Case 3:10-cr-00003-SA-SAA Document 54 Filed 11/01/10 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF MISSISSIPPI

UNITED STATES OF AMERICA

V. CRIMINAL NO.: 3:10CR003-SA

PHILIP HALBERT NEILSON DEFENDANT

ORDER ON MOTIONS IN LIMINE

United States’ Motion in Limine Requesting a 104(a) Hearing to Establish

Authentication and Admissibility of United States’ Exhibits [43]

The Government has filed a Motion in Limine Requesting a 104(a) Hearing to Establish

Authentication and Admissibility of United States’ Exhibits [43]. The Government seeks to have

its exhibits authenticated outside the presence of the jury. Attached to the motion are declarations

by records custodians affiliated with the following entities: Amerifund Commercial Corporation;

Renasant Bank; and USAA Federal Savings Bank. Defendant does not object to a hearing to

determine the authenticity of the items detailed by the Government; however, Defendant objects that

some documents are not relevant, and should not be admitted.

Federal Rule of Evidence 902 provides that “[e]xtrinsic evidence of authenticity as a

condition precedent to admissibility is not required with respect to . . . (11) certified domestic records

of regularly conducted activity.” Under that provision, documents of domestic records of regularly

conducted activity admissible under Rule 803(6) that are accompanied by a written declaration of

its custodian are “self-authenticating” if the custodian certifies the documents was: (a) made at or

near the time of the occurrence of the matters set forth by a person with knowledge of those matters;

(b) kept in the course of the regularly conducted activity; and (3) made by the regularly conducted

activity as a regular practice.

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The declarations attached to the Government’s Motion in Limine all provide: (a) that the

document provided are true and correct copies of the original records; (b) that the signatory is the

authorized custodian of such records; (c) the records were made at or near the time of the occurrence

of the matters set forth by a person with knowledge of those matters within such records; (d) the

records were kept in the course of regularly conducted business activity; and (e) it is the regular and

routine practice of such business activity to make the records accompanying the declaration. The

custodians then declared under penalty of perjury that the certification was true and correct.

The Court hereby GRANTS the Government’s request for a Federal Rule of Evidence 104(a)

hearing regarding self-authentication of the documents from Amerifund Commercial Corporation;

Renasant Bank; and USAA Federal Savings Bank. Relevance and other issues of admissibility will

be determined during the trial phase.

Defendant’s Motion in Limine to Exclude the Testimony of Ronald L. Gagnet [44]

Defendant has moved to exclude the testimony of the Government’s expert, Ronald L.

Gagnet, based on certain opinions espoused by him, and on the basis that there is no methodology

or tested principles used to make those observations.

Federal Rule of Evidence 702 provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue, a witness qualified as an
expert by knowledge, skill, experience, training, or education, may testify thereto in
the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts
or data, (2) the testimony is the product of reliable principles and methods, and (3)
the witness has applied the principles and methods reliably to the facts of the case.

The Supreme Court has charged trial court judges with the responsibility of acting as

gatekeepers in determining when expert testimony is admissible. Daubert v. Merrell

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Pharmaceuticals, Inc., 509 U.S. 579, 589, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). Daubert

requires that “when expert testimony is offered, the trial judge must perform a screening function

to ensure that the expert’s opinion is reliable and relevant to the facts at issue in the case.” Watkins

v. Telsmith, Inc., 121 F.3d 984, 988-89 (5th Cir. 1997). Determining reliability requires assessing

“whether the reasoning or methodology underlying the testimony is scientifically valid.” Daubert,

509 U.S. at 592-93, 113 S. Ct. 2786. Relevance rests on “whether [that] reasoning or methodology

properly can be applied to the facts in issue.” Id. at 593, 113 S. Ct. 2786.

The Kumho court extended Daubert to include all expert testimony:

We conclude that Daubert’s general holding--setting forth the trial judge’s general
“gatekeeping” obligation--applies not only to testimony based on “scientific”
knowledge, but also to testimony based on “technical” and “other specialized”
knowledge.

Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999).

Ultimately “the objective of that [gatekeeping] requirement is to insure the reliability and relevancy

of expert testimony.” Id. 119 S. Ct. at 1176, 143 L. Ed. 2d 238. The proponent of the expert has the

burden of establishing the pertinent admissibility requirements under Federal Rule of Evidence

104(a) by a preponderance of the evidence. See Bourjaily v. United States, 483 U.S. 171, 107 S. Ct.

2775, 97 L. Ed. 2d 144 (1987).

Before admitting expert testimony, the court must be satisfied that the following conditions

are met: (1) the witness qualifies as an expert; (2) the subject matter of the testimony is an

appropriate one for expert testimony; (3) the expert testimony will assist the factfinder in deciding

the case; and (4) the expert’s opinion is sufficiently reliable. See Fed. R. Evid. 702, comments.

The Government seeks to introduce Ronald L. Gagnet as an expert in forensic accounting.

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Gagnet is a CPA licensed and certified by the State of Louisiana. He also holds Certified Valuation

Analyst (CVA) an Certified Financial Forensics (CFF) credentials. Gagnet input Neilson’s personal

checking and savings account transactions into QuickBooks in order to analyze his cash flow. He

compared income to expenditures and opined that in 2004 and the first half of 2005, Neilson was

not living within his means. Gagnet traced a $50,000 check from C&G Properties, LLC, account

to ACM, to Defendant. Gagnet then totaled Neilson’s monthly benefit provided by his association

with C&G Properties, LLC. Gagnet also analyzed C&G Properties, LLC’s general ledgers for 2007

and 2008 and projected Neilson’s equity in C&G Properties, LLC, from 2006 through 2012.

The Court finds Gagnet to be qualified as an expert. Moreover, the methods he used to reach

the conclusions are reliable. Accordingly, a Daubert hearing is not necessary, and Defendant’s

Motion in Limine [44] requesting his exclusion as an expert is DENIED.

Defendant’s Motion in Limine to Exclude the Testimony of Patrick Kelley [45]

Defendant filed a Motion in Limine to exclude the testimony of Patrick Kelley. The

Government notified Defendant that Patrick Wayne Kelley’s specialized knowledge in the field of

Confidential Financial Disclosure Reports may be used during trial. Defendant objects on the basis

that Kelley did not employ any kind of methodology or use reliable principles to determine anything.

Defendant further objects to Kelley’s testimony as to the FBI’s ethics program as not in the province

of expert testimony. Otherwise, Defendant contends, Kelly’s testimony is simply his giving his

opinion of what should have been done. Thus, Kelley’s testimony is irrelevant.

Kelley is the Deputy Agency Ethics Official which handles responsibility for the oversight

of the FBI’s Ethics and Standards. In his grand jury testimony, Kelley explained that there are two

tiers of disclosures FBI agents and supervisors must fill out. For the top three hundred FBI officials,

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a publicly-available Executive Branch Confidential Financial Disclosure Report must be filed

annually. Kelley reviews each of these Reports himself. Lower level agents are required to fill out

the non-public Confidential Financial Disclosure Report, also known as OGE 450. These reports

are completed by each agent, reviewed by their immediate supervisor, and then finally reviewed by

the Chief Division Counsel for the district. Each Chief Division Counsel sends confirmation to

Kelley that his division is in compliance with the OGE 450. Kelley never sees any field agent’s

Confidential Financial Disclosure Reports. Instead, he receives fifty-six reports from Chief Division

Counsels that the offices are in compliance.

In his grand jury testimony, Kelley notes that the OGE 450'
s are intended to be used by a

reasonable person. Kelley opines that Neilson should have disclosed his alleged position with C&G

Properties, LLC, the supposed $50,000 loan, his interest in the FBI Building real estate, and the

income from the FBI Building lease.

Patrick Kelley is undeniably qualified as an expert based on his experience - fifteen years as

an FBI attorney, the past decade of which he has been the FBI’s Deputy Agency Ethics Official. The

Government contends that Kelley will testify as to his reliance on Neilson’s CFDR as complete and

accurate, actions that would have been taken had Neilson disclosed his financial interest in the FBI

Building, and Neilson’s knowledge of those consequences.

The Court finds that to the extent Kelly would be offered as an expert witness, he is qualified.

No Daubert hearing is necessary. Defendant’s Motion in Limine [45] is DENIED.

SO ORDERED, this the 1st day of November, 2010.

/s/ Sharion Aycock

U.S. DISTRICT JUDGE