Opinion ID: 2748470
Heading Depth: 2
Heading Rank: 2

Heading: Agent Testimony

Text: Jordan first argues the district court erred when it permitted the undercover agent to interpret what he and Jordan meant by certain questions and statements in their recorded, faceto-face conversation. Jordan preserved his objections to the agent’s testimony at trial so we review these evidentiary rulings for an abuse of discretion. See United States v. Albertelli, 687 F.3d 439, 445 (1st Cir. 2012). “But abuse of discretion is not a monolithic standard. Within its margins, embedded issues may receive attention under more narrowly focused standards. Thus, -12- embedded questions of law engender de novo review and embedded findings of fact engender clear-error review.” United States v. Carrasco-De-Jesús, 589 F.3d 22, 26-27 (1st Cir. 2009). Jordan argues the agent impermissibly testified as to (1) the agent’s own state of mind and intent, (2) Jordan’s state of mind and intent, and (3) the ultimate legal issue in the case. He gives a number of examples of this purportedly improper testimony: -13- Recorded Conversation Agent’s Testimony Jordan: “Do we as a corporation have to issue a 1099?” “It’s my understanding that [Jordan]’s engaging me now on Agent: “No” how best to cover up the kickback payment.” Jordan: “How do we go around that?” “I understand Jordan to be telling me that the consulting Jordan: “If [other agreement--phony consulting participating companies] have agreement and the fake done well and their audits go invoices, if they passed through then I’m sure ours audits from companies . . . will do the same.” that have already done these stock deal--frauds with, then he thinks that it will pass his as well.” Agent: “my biggest concern . . . is your ability to . . . “It’s my understanding that feel comfortable and . . . Mr. Jordan was clear that this cover or hide the payment that was an illegal stock deal and you’re making back to me.” he was willing to participate.” Jordan: “I have no issues.” Agent: “I’m screwing my “This is another . . . way I investors on the hedge fund can make clear to Mr. Jordan side.” that this is not a legitimate . . . transaction.” “So if you have any pangs of con[science] with that.” “I understand Mr. Jordan had no problem with what I was Jordan: “No.” doing by screwing my investors.” Our first task is to establish whether the government offered this testimony as expert testimony or lay testimony. When critical evidence in a case consists of recorded conversations, -14- “officers commonly help interpret [these] conversations by translating jargon common among criminals.” Albertelli, 687 F.3d at 446. “This [testimony] can be admitted as lay testimony from experienced officers, expert testimony or both depending on circumstances.” United States v. Santiago, 566 F.3d 65, 69 (1st Cir. 2009). Where the basis of an interpretation comes from the officer’s personal involvement in the case, rather than from specialized outside knowledge, we typically construe it as lay testimony under Federal Rule of Evidence 701. See Albertelli, 687 F.3d at 446–47. Jordan’s opening brief sometimes assumes the agent’s testimony was lay testimony. See Jordan Br. at 25 (“Even if the agent was being used as some type of expert . . . .” (emphasis added)). Other times it assumes the testimony was expert testimony. See id. at 31 (asserting the agent’s testimony violated Fed. R. Evid. 704, which applies only to expert witnesses). Not until his reply brief does Jordan assert that the agent’s interpretations should be classified as expert testimony because the agent had also testified about “industry terms.” Jordan Reply Br. at 1. “While a reply brief is not the proper place to raise new arguments, it is proper for a court to look there for clarification.” United States v. Bradstreet, 207 F.3d 76, 80 n.1 (1st Cir. 2000) (citation omitted). Regardless, the fact that this case involved some industry jargon does not automatically turn the -15- agent’s interpretations of his own conversations with Defendants into expert testimony. Indeed, the agent prefaced almost every interpretation he gave with “I understand this to mean,” or “it is my understanding that . . . .” The agent never once said, for example, “Jordan said X and, in the finance industry, that means Y.” Furthermore, as to the jargon used, the agent used terms like “lender of last resort” to try to convey the illegality of these transactions to both Defendants. But when pressed on the meaning of these particular terms, the agent readily admitted he did not know and did not look up their meaning “in the business community.” Rather, the agent based his understanding of Defendants’ responses to terms like “lender of last resort” on his personal understanding of that term “[i]n the context of this undercover operation.” (emphasis added). As such, we fail to see why we should treat the agent’s interpretation of his own conversations as expert testimony. “Although linguistically possible, calling such testimony ‘expert opinion’ would lend undue credibility to it and increase the risk of reliance on information not properly before the jury as data on which ‘experts in the particular field would reasonably rely,’ [when] the ‘field’ is merely the facts of the case.” Albertelli, 687 F.3d at 446 (quoting Fed. R. Evid. 703); see also United States v. Rollins, 544 F.3d 820, 833 (7th Cir. 2008) (Where “the agent’s ‘impressions’ testimony was based on his own personal observations -16- and perceptions derived from this particular case[, s]uch testimony is admissible as lay opinion testimony.”). Of course, we have previously detailed many potential dangers of allowing this form of interpretation as lay testimony. See Albertelli, 687 F.3d at 447. And Jordan, in a conclusory list in his reply brief, asserts every one of these dangers were harmfully manifested at trial. Again, the reply brief is not the proper place to raise these new arguments. See Bradstreet, 207 F.3d at 80 n.1. Moreover, Jordan only hints at developed argument as to two of these dangers. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.”). First, Jordan essentially argues that we cannot treat the agent’s testimony as admissible lay testimony because the government failed to lay the necessary foundation for lay testimony. See Albertelli, 687 F.3d at 447. The Federal Rules of Evidence require that lay testimony be “(a) rationally based on the witness’s perception; (b) helpful to clearly understanding the witness’s testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” Fed. R. Evid. 701. Alluding to Rule 701(a), Jordan argues the agent was “unable to point to any rational basis for the interpretation -17- offered [and did] nothing more than speculating.” Albertelli, 687 F.3d at 447. Jordan relies heavily on two Second Circuit cases to argue this foundational element was not met, at least as to the agent’s testimony interpreting what Jordan meant by his statements and responses during their recorded conversation. Most significantly, he cites United States v. Garcia, 291 F.3d 127 (2d Cir. 2002), for the proposition that “[w]hen a conversation has a legitimate purpose understandable to a lay person, testimony about a code without some evidence of prearrangement or some other foundation is inappropriate.” Id. at 141; see also United States v. Rea, 958 F.2d 1206, 1215 (2d Cir. 1992)(“When a witness has not identified the objective bases for his opinion, the proffered opinion obviously fails completely to meet the requirements of Rule 701 . . . .”). We fail to see how statements such as “screwing my investors on the hedgefund side” could lend themselves to a legitimate purpose understandable to a lay person. Moreover, the government laid out an objective basis for the agent’s understanding that Jordan knew they were speaking in coded terms and his impression of what Jordan actually meant.2 Specifically, the agent testified that stock fraud deals are “discussed 2 Clearly, the agent had personal knowledge of what he meant when he spoke to Jordan, and “his status as a participant in the conversation is sufficient to demonstrate the basis of this opinion.” Garcia, 291 F.3d at 140-41. -18- privately,” “happen quickly,” and employ “coded terminology.”3 Furthermore, before meeting with Jordan personally, the agent asked Prange, who had recruited Jordan into this scheme, about Jordan’s understanding of the scheme. Prange told the agent that Jordan’s “money guy” had explained to Jordan that they had tried “different ways” to get financing and that “this deal makes sense.” Prange also told the agent, Jordan “gets it.” The agent then pressed Prange: “All right. And he’s good with the kickback with the 50 percent?” To which Prange responded “yes.” The government thus provided an objective basis for the agent’s opinion that Jordan met with him personally to discuss participating in an illegal stock fraud scheme. Jordan then asserts the government did not establish a foundation for how this lay testimony was helpful to the jury. See 3 To be sure, the Second Circuit has condemned, and we have strongly cautioned against, a witness using “broad appeals to ‘the totality of the investigation’” or “purporting to represent collective knowledge” “for the bases of his interpretations.” Albertelli, 687 F.3d at 448 (quoting United States v. Grinage, 390 F.3d 746, 749 (2d Cir. 2004)). And here, the agent relied on his specialized expertise and “experience investigating frauds like this” in explaining how stock fraud deals typically work and why interpretation was needed. But Jordan does not point to, and we have not found, any place in the record that indicates the agent purported to base his interpretations of Jordan’s specific statements on collective knowledge. Rather, as explained above, the agent readily admitted on cross-examination that his understanding of certain terms might not line up with their traditional meaning in the business community. Furthermore, unlike in Grinage, where the agent never made any personal observations of the defendant, see 390 F.3d at 749, here, the agent interpreted his own face-to-face conversation with Jordan. -19- Fed. R. Evid. 701(b). Rather, Jordan claims, his conversation with the agent used everyday terms that made sense contextually. We disagree. Jordan often used abrupt stand alone words or phrases that do not strike us as everyday terms, for example: “what will be your overpay,” and “[f]or five, half back.” Likewise, without proper context, a lay jury might easily fail to grasp the significance of many of Jordan’s comments. For example, at one point in their conversation, the agent explained to Jordan that his hedge fund had “CalPERS” and “other pension money from California,” and also that he was “screwing” his investors on the hedge fund side. Jordan then responded simply, “my wife . . . doesn’t work with the state[,] so.” Those familiar with public company auditing and state retirement systems might grasp the significance of Jordan’s response without any further explanation, but a lay juror might not. The agent’s own statements at the meetings were often equally obscure.4 True, Jordan--the President, CEO, and CFO of a public company--never expressed any confusion with the vernacular the agent used or its significance, but we understand how a lay juror might. The agent’s testimony therefore helped the jury clearly understand the recorded conversation and its significance. 4 For example, the agent told Jordan, “I view you differently and take that as a compliment . . . I see you as having, uh, access . . . either to venture capital money or to government money.” Furthermore, in trying to convey the illegality of the scheme to Jordan, the agent used terms like “last resort,” “kickback,” and “papering the file.” -20- Finally, the agent’s testimony was “not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” Fed. R. Evid. 701(c). Jordan does not argue otherwise. As we noted above, although the agent referenced his specialized expertise in explaining that stock fraud deals are often planned in a coded language, Jordan does not point to any place in the record where the agent relied on prior specialized knowledge to interpret the particular terms used in his conversation with Jordan. Rather, the agent’s interpretations appear to be based on his own personal understanding of what Jordan meant, developed in the context of face-to-face conversation. See Rollins, 544 F.3d at 832 (admitting agent’s lay testimony about code words when “not based on any specialized knowledge gained from his law enforcement training and experience,” but instead on “the particular things he perceived from monitoring intercepted calls” and other case-specific investigative activities). We are therefore satisfied that the government laid a sufficient foundation for the agent’s lay testimony interpreting his face-toface conversation with Jordan. The second danger Jordan alludes to is that the agent “usurp[ed] the jury’s function by effectively testifying as to guilt rather than merely providing building blocks for the jury to draw its own conclusion.” Albertelli, 687 F.3d at 447. In this vein, Jordan points out that the agent repeatedly testified as to -21- Jordan’s knowledge of the illegality of this scheme. But Jordan does not explain how this usurped the jury’s function. Instead, he relies on an unpublished district court memorandum and order for the proposition that “[a]n expert witness may not testify as to another person’s intent. No level of experience or expertise will make an expert witness a mind-reader.” Holmes Grp., Inc. v. RPS Products, Inc., CIV.A. 03-40146-FDS, 2010 WL 7867756, at  (D. Mass. June 25, 2010) (emphasis added). Yet Jordan fails to acknowledge that a lay witness may “offer an opinion that is ‘rationally based on the witness’s perception,’ and though one can’t actually read another person’s mind, one is often able to infer, from what the person says or from the expression on his face or other body language, what he is thinking.” United States v. Curescu, 674 F.3d 735, 740 (7th Cir. 2012). Given that the agent was a lay witness, he was free to state his rationally-based perception of what Jordan was thinking during their face-to-face conversation. Lest any doubt remain as to the propriety of the agent’s testimony, Jordan’s trial contained numerous safeguards against the danger that the agent might usurp the jury’s function. See Albertelli, 687 F.3d at 447. The district court sustained several of Jordan’s objections where the prosecution’s question called for generalized or speculative responses. Moreover, the court afforded Jordan “very liberal cross-examination” on whether the agent -22- properly understood the recorded statements. This crossexamination drew out possible alternative interpretations of certain terms and phrases--for example “confidentiality” and “lender of last resort.” “Where such alternatives can be offered, the plausibility of the witness’ own position--unlike, say, that of a medical expert--is readily measured by the jury.” Id. at 448. Finally, and in a similar vein, Jordan argues the court erred when it allowed the agent to testify to the ultimate issue in this case. The challenged conduct is exemplified by the following excerpt from trial: Q [to Agent]: “How are you familiar with Mr. Prange and Mr. Jordan?” A: “Mr. Prange and Mr. Jordan both participated in stock fraud deals that we had done.” But, again, as we explained above, Jordan fails to recognize that this testimony was properly offered as lay opinion testimony, and lay opinion “is not objectionable just because it embraces an ultimate issue.” Fed. R. Evid. 704(a) (emphasis added). In sum, because the district court properly admitted the agent’s interpretation as lay testimony and Jordan’s trial contained sufficient safeguards against the abuse of such testimony, Jordan’s objections to the agent’s testimony fail.
Prange, on the other hand, conceded at oral argument that, because he did not object to the agent’s testimony below, we review his challenge to the agent’s testimony for plain error only. -23- See Albertelli, 687 F.3d at 445. Furthermore, Prange’s challenge to the agent’s testimony consists of one sentence in his brief joining in Jordan’s argument on this point. As such, Prange’s argument clearly fails. We see no reason to provide any further analysis when Prange gives us nothing further to analyze. See Zannino, 895 F.2d at 17.