Case Document 329 Filed 04/25/13 Page 1 of 10 THE UNITED STATES DISTRICT COURT g3/( 5 FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA I ex rel. ROBERT R. PURCELL, I is (f Plaintiff, v. Civil Action No. 98?2088 (GK) MWI CORPORATION, Defendant. UNITED OPPOSITION TO MOTION IN LIMINE TO EXCLUDE EVIDENCE OF PERSONAL WEALTH, LIFESTYLE. AND SPENDING HABITS TABLE OF AUTHORITIES Cases Page(s) Commc'ns, Corp. V. Sys., Inc, No. 02 Civ 9144 (PAC), 2006 WL 988143 (S.D.N.Y. Apr. 13, 2006) ..9 United States ex rel. Miller v. Bill Harbert Int Constr. Inc, 608 F.3d 871 (DC. Cir. 2010) United States ex rel. Purcell v. Corp, 824 F. Supp. 2d 12 (D.D.C. 2011) ..3 United States ex rel. Purcell v. Corp, 520 F. Supp. 2d 158 (D.D.C. 2007) ..3 United States v. Gartmon, 146 F.3d 1015 (DC. Cir. 1998) ..8 Statutes 31 U.S.C. 3729(a)(1) ..3 31 U.S.C. 3729(b) ..4 Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 2 of 10 INTRODUCTION The United States hereby opposes defendant?s Motion In Limine to exclude ?all evidence . . . related to the personal wealth, lifestyle and spending habits of Alhaji Indimi, David Eller, or any other executive, employee or agent of (ECF No. 317). As an initial matter, the United States does not seek to introduce any evidence of the ?personal wealth, lifestyle or spending habits? of former MWI president David Eller ?or any other executive, employee or agent of Accordingly, defendant?s motion should be denied as moot with regard to those individuals. Defendant?s motion should likewise be denied as to exhibits and testimony relating to its Nigerian sales agent, Mr. Indimi. Defendant goes to some length to suggest that the United States is seeking to introduce extensive evidence relating to Mr. Indimi?s personal spending that has no connection to the facts of this case. Def.?s Mem. at 3?4. Defendant then contends that this evidence has no probative value, or alternatively, that what little probative value it may have is outweighed by the danger that it would unfairly prejudice the jury by creating an aura of excessive wealth and potential corruption around Mr. Indimi, and thus by inference around defendant MWI. Id. at 6. Remarkably, defendant fails to inform that Court that all of the evidence at issue re?ects not simply Mr. Indimi?s expenses, but rather Mr. Indimi?s expenses that were paid, at least in the ?rst instance, by defendant. This point bears repeating: the evidence at issue is not as defendants have characterized it simply evidence of Mr. Indimi?s personal expenses with no connection whatsoever to the facts of this case. To the contrary, it is evidence that the defendant corporation routinely paid Mr. Indimi?s bills for everything from house cleaning to the purchase of personal vehicles to tuition for Mr. Indimi?s children. See Def?s Mem. at 4 (listing the types Case Document 329 Filed 04/25/13 Page 3 of 10 of expenses at issue). While there is evidence that suggests MWI reimbursed itself for some of these expenses by deducting them from Mr. Indimi?s commissions, there is also evidence that defendant simply ?absorbed? some of Mr. Indimi?s expenses. Moreover, there is no evidence that MWI ever charged Mr. Indimi any fee for the extensive personal and ?nancial management services that it provided to him, or charged him any interest on the numerous loans and advances he received. In addition, several MWI employees, including Mr. Eller, testi?ed that defendant did not provide these services for any other sales agent. Thus, whether or not the personal expenses that MWI paid for Mr. Indimi were ultimately deducted from his commissions, the fact that MWI provided Mr. Indimi with so much more than commission payments in return for his services as a sales agent is directly relevant to the central issue in this case: the truth or falsity of repeated certi?cations to the Export?Import Bank of the United States (Exim) that its remuneration to Mr. Indimi in connection with the Nigerian sale was a ?regular commission . . paid . . . in the ordinary course of business? to a ?regular sales agent.? Accordingly, defendant?s motion to exclude evidence of the extensive ?nancial services and bene?ts that it provided to Mr. Indimi should be denied. BACKGROUND Defendant MWI received $74.3 million in public ?nancing from Exim in connection with the sale of its pumps to Nigeria. United States ex rel. Purcell v. MWI Corp, 824 F. Supp. 2d 12, 17 (D.D.C. 2011). In order to receive these funds, defendant repeatedly certi?ed to the Exim that, in connection with this transaction, it had paid only: Regular commissions or fees paid or to be paid in the ordinary course of business to our regular sales agents or sales representatives and readily identi?able on our books and records as to amount, purpose and recipient. United States ex rel. Purcell v. MWI Corp, 520 F. Supp. 2d 158, 174 (D.D.C. 2007). Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 4 of 10 The United States contends that the $28 million commission that defendant paid to Mr. Indimi, in connection with this deal which was 50 times larger than the second largest commission that defendant paid during the relevant time period and more than $27 million greater than all of the other commissions that MWI paid during this period combined was not a ?regular commission.? The United States further contends that Mr. Indimi was not a ?regular sales agent? and that the commission he received was not consistent with the ?ordinary course? of business. The United States alleges that defendant violated the False Claims Act (FCA), 31 U.S.C. 3729 et seq. by submitting false claims for payment in violation of 31 U.S.C. 3729(a)( 1) and by using false records or statements to get its false claims paid in violation of 31 U.S.C. 3729(a)(1)(B). United States Compl. (ECF No. 18) at 111] 46-50. In order to prove liability on each of these counts, the United States must prove, among other elements, that defendant?s certi?cations to the Exim were false and that defendant had knowledge as that term is de?ned in the CA of their falsity.l I. The Evidence of Payment of Mr. Indimi?s Personal Expenses Is Relevant to the FCA Elements Of ?Falsity? and ?Knowledge.? Defendant asserts that the evidence at issue here should be excluded because it is ?not relevant to any element of a false claim.? Def.?s Mem. at 1. This assertion is demonstrably wrong. Evidence is relevant ?if it has any tendency to make a fact more or less probable than it would be without the evidence; and the fact is of consequence in determining the action.? Fed. R. Evid. 401. The evidence at issue here shows that defendant 1) routinely paid Mr. Indimi?s bills and managed his personal ?nances; 2) did not charge him for these services; 3) did not 1 Under the FCA ?the terms ?knowing? and ?knowingly? mean that a person, with respect to information (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information; and no proof of speci?c intent to defraud is required.? 31 U.S.C. 3729(b). 4 Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 5 of 10 include the value of these services in the calculation of Mr. Indimi?s commission, and 4) did not provide similar services to any other sales agent. This evidence is directly relevant to the truth or falsity of certi?cations that it paid Mr. Indimi a ?regular commission,? that this commission was consistent with ?ordinary course of business,? and that Mr. Indimi was a ?regular sales agent.? This evidence of own actions is also directly relevant to knowledge of the falsity of its certi?cations to the Exim. Accordingly, the evidence of extensive ?nancial relationship with Mr. Indimi beyond those payments that it expressly labeled ?commissions? should not be excluded from the trial of this matter. The record in this case includes evidence that MWI 1) routinely paid Mr. Indimi?s credit card bills; 2) paid Mr. Indimi?s household expenses including housecleaning, groceries and lawn and pool maintenance; 3) regularly provided loans and cash advances to Mr. Indimi; 4) purchased vehicles for Mr. Indimi and paid for the shipping of those vehicles to Nigeria; and 5) assisted Mr. Indimi with the purchase, sale, construction and upkeep of homes in Boca Raton, London and Nigeria. For example, United States Trial Exhibit 78 is a chart entitled ?1995 Indimi expenses paid by MWI Corporation.?2 This document shows the amount that MWI paid for each month for the following expenses: Lawn Svc. Pool Svc. Water Electric Cable Phone Cleaning 2 A copy of this document is attached as Ex. 3 hereto. Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 6 of 10 At the bottom of this chart is a handwritten note from Judy Ennis, Mr. Eller?s secretary, to David Eller, then president of MWI, which states as follows: David these are the bills which MWI typically pays?- So far this year, we have absorbed over $12,000 for Indimi. What, if any, do you want to charge back to Mr. Indimi? Id. 3 (emphasis added). Ms. Ennis testi?ed that she could not recall whether any of these costs were, in fact ever ?charged back? to Indimi. Ennis Dep. at 285-87, Oct. 14, 2004, Ex. 1. This document shows that when defendant paid Mr. Indimi?s bills it did not always charge these payments back to Mr. Indimi but that MWI simply ?absorbed? these costs itself. Finally, there is no evidence in the record that defendant ever charged Mr. Indimi any fee whatsoever for the numerous personal and ?nancial services that it provided to him, or that MWI ever charged Mr. Indimi any interest when it loaned him money or expended ?mds on his behalf that he had not yet earned. This Court has previously held that the question of whether the commission at issue in this case was ?regular? must be determined in light of commissions typically paid by MWI and its competitors. See United States ex rel. Purcell, 520 F. Supp. 2d at 178 (?The court af?rms Ex?Im?s ascription of an industry?wide frame of reference to the term ?regular commission?) The extensive ?nancial and personal management services that defendant provided to Mr. Indimi are relevant to determining whether the Indimi commission is ?regular? under this standard for several independent reasons. First, this evidence is relevant to calculating the true value of the remuneration that Mr. Indimi received from MWI in connection with the seven?state Nigerian 3 See also U.S. Trial Exhibit 44 ?1992 Indimi expenses paid by and Pump Corporation. A copy of this document is attached as Ex. 4 hereto. 6 Case Document 329 Filed 04/25/13 Page 7 of 10 transaction. Defendant admits that the commission was at least $26.2 million. 4 The United States contends that the commission was $28 million or more. If, as the evidence that defendant now seeks to exclude would suggest, MWI ?absorbed? certain personal expenses for Mr. Indimi during the time that it was paying him in connection with these Nigerian transactions, provided personal and ?nancial management services for him without charging any fees, and provided interest-free loans and advances, then the actual remuneration he received for his work on the seven state transaction may have been well in excess of $28 million. Since the size of the commission, both in total and as a percentage of the transaction, is directly relevant to the determination of whether the commission was ?regular,? these facts provide the basis for comparison with other commissions paid by MWI and its competitors, and are therefore highly relevant to the truth or falsity of defendant?s certi?cations. In addition, Mr. Eller and his secretary, Judith Ennis, both testi?ed that the types of personal services and ?nancial largesse that MWI provided to Mr. Indimi were not provided to any other sales agents. See Eller Dep. at 205, Jan. 13, 2005, Ex. 2; Ennis Dep. at 145?46, Oct. 14, 2004, Ex. 1. The evidence that Mr. Indimi received unique treatment well beyond even the mammoth size'of his commission is likewise relevant to the truth or falsity of certi?cations because it shows that the relationship between MWI and Mr. Indimi was not consistent with ?ordinary course of business? and that Mr. Indimi was not a ?regular sales agent.? 4See United States ex rel. Purcell, 824 F. Supp. 2d at 17 n2 (citing Defs.? Mot. For Summ. J. at 3.). If defendant is correct, the Indimi commission amounted to 33% of the $80 million total value of the transaction or 36% of the $74.3 million in ?nancing that Exim provided. If the United States is correct, the Indimi commission amounted to at least 35% of the total value of the transaction or 38% of the Exim ?nancing. Defendant?s own documentation repeatedly refers to the commission percentage as 36.5%. Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 8 of 10 Under Rule 401 evidence is relevant if it has ?any tendency to make . . . more or less probable? a fact that is ?of consequence in determining the action.? The evidence that defendant seeks to exclude easily meets this standard because it bears directly on the truth or falsity of defendant?s repeated certi?cations that the Indimi commission was a ?regular commission . . . paid . . .in the ordinary course of business to regular sales agent.? 11. Evidence of Payment of Mr. Indimi?s Personal Expenses Does Not Create A Danger of Unfair Prejudice. For the reasons discussed above, the evidence that defendant MWI routinely paid personal expenses for Mr. Indimi is highly probative with regard to the central issue in this case, i.e. the truth or falsity of defendant?s certifications to the Exim. Defendant contends nonetheless that this evidence should be excluded because it creates a risk of unfair prejudice that outweighs its probative value. Def?s Mem. at 5?8. This argument must fail. Rule 403 ?does not bar powerful, or even ?prejudicial? evidence. Instead the Rule focuses on the ?danger of unfair prejudice,? and gives the court discretion to exclude evidence - only if that danger ?Substantially outweighs? the evidence?s probative value.? United States v. Gartmon, 146 F.3d 1015, 1021 (DC Cir. 1998). If the evidence at issue were as defendant presents it, i.e. evidence that Mr. Indimi?s ?personal wealth, lifestyle and personal spending habits are signi?cant,? Def.?s Mem. at 6, with no nexus to the facts of the case, there might be some basis for defendant?s contention that this evidence could have an unfair prejudicial effect on the jury. As noted above, however, the evidence at issue is not simply evidence of Mr. Indimi?s spending, it is evidence of spending on Mr. Indimi?s behalf. Because this evidence relates directly to the extensive ?nancial relationship between defendant and Mr. Indimi and is directly relevant to the disputed issues in the case, it does not create any danger whatsoever of unfair prejudice. See, Gartmon, 146 F.3d 1020 (?nding ?no abuse of Case Document 329 Filed 04/25/13 Page 9 of 10 discretion in the district court?s . . . admission? of concededly prejudicial testimony because ?[t]he probative value of the incident is plain. It constituted direct evidence of [defendant?s] knowing involvement in, and direction of, the scheme to defraud?) Moreover, the cases cited by defendant do not support the conclusion that this evidence should be excluded. Defendant relies principally on United States ex rel. Miller v. Bill Harbert Int Constr. Inc, 608 F.3d 871 (DC. Cir. 2010). Def?s Mem. at 2-6. In that case, the prosecution referred in closing argument to the wealth of a company that managed defendant?s money. The Court held that this evidence, which ?had nothing to do with the liability of any of the defendants or the measure of damages,? was both irrelevant and unfairly prejudicial. Miller, 608 F. 3d at 897. This has no bearing on the present case in which the evidence at issue is not re?ective of accumulated wealth that has no bearing on defendant?s liability, but rather relates to payments made by defendant to, or on behalf of, Mr. Indimi that are directly relevant to the truth or falsity of the certi?cations that are at the heart of this case. Because this evidence is highly probative and does not create any danger of unfair prejudice, the United States should be permitted to introduce it at trial.5 Respectfully submitted, STUART F. DELERY Acting Assistant Attorney General RONALD C. MACHEN United States Attorney 5 Defendant?s reliance on L-3 Commc ?ns, Corp. v. 051 Sys., Inc, No. 02 Civ 9144 (PAC), 2006 WL 988143 (S.D.N.Y. April 13, 2006) is likewise completely misplaced. In that case, the Court?s determination that evidence of wealth should be excluded was based on the threshold determination that ?[e]vidence regarding this topic is clearly irrelevant.? Id. at 9 Case 1:98-cv-02088-GK Document 329 Filed 04/25/13 Page 10 of 10 s/Keith Morgan KEITH MORGAN (D.C. Bar No. 422665) BEVERLY RUSSELL Assistant United States Attorneys United States Attorney?s Of?ce 555 Fourth St., NW. Washington, DC. 20530 s/David Wiseman MICHAEL D. GRANSTON DAVID B. WISEMAN (D.C. Bar No. 452698) ELIZABETH YOUNG Attorneys, Civil Division Department of Justice Post Of?ce Box 261 Ben Franklin Station Washington, DC 20044 Telephone: (202) 514-0132 Facsimile: (202) 307-3852 10 Case 1:98-cv-02088-GK Document 329-3 Filed 04/25/13 Page 1 0f 2 Exhibit 3 I 1995 INDIMI EXPENSES PAID BY MWI CORPORATION MONTH Lawn Svc. Pool Svc. Water Electric Cable Phone Cleaning TOTAL January 165.00 255.00 69.56 293.92 96.40 2160.00 3039.88 February 290.00 550.00 25.18 50.23 96.40 836.82 742.50 2591.13 Match 80.00 453.00 48.23 189.74 107.12 496.47 . 1374.56 April 290.00 205.00 13.65 131.34 107.13 261.59 1008.71 May 80.00 70.00 52. 10 3.50 97.13 45.47 742.50 1090.70 June 70.00 16.68 184.87 97.13 72.86 441.54 July 120.00 70.00 54.09 344.09 . 35250 940.68 Eggs! 295.00 70.00 42.44 360.33 63.00 1 830.77 September 120.00 70.00 89.07 362.78 641.85 October 295.00 . 70.00 42.20 407.20 November 0.00 Decembei? 0 00 TOTAL: 1735.00 I 1883.00 - 453.20 1920.80 664.3% 1713.21 3997.50 12367:02 rah?.5- MWI 089004 Case Documeht 329-3 Filed 04/25/13 Page 2 of 2