Banking Expert Witness Not Allowed to Opine on the Materiality of Documents Submitted
Posted on January 22, 2025 by Expert Witness Profiler
A grand jury indicted Rasta Khalid Walid (“Walid”) on 17 counts, including failure to pay legal child support, bank fraud, false statements to a bank, engaging in monetary transactions, and false, fictitious, and fraudulent claims.
Walid filed a notice disclosing the proposed testimony of two expert witnesses he intended to use at trial:
- Conor Newman, a certified public accountant, offers testimony regarding issues of Walid’s use of general accounting principles and Walid’s understanding of the tax code and regulations.
- Steve Bryant, a banking and paycheck protection program (“PPP”) expert, offers testimony regarding issues related to PPP loans.
In response, the Government filed a motion in limine to exclude Walid’s expert testimony of Conor Newman and Steve Bryant.
Accounting Expert Witness
Conor Newman is a Certified Public Accountant with Boyle, Deveny, and Meyer, a Montana accounting firm that provides consulting and tax services across the United States. He is responsible for services in the areas of compiled financial statements, tax consulting and compliance, and accounting system software consulting.
Banking Expert Witness
Steve Bryant is the Vice President of Commercial Lending at First Security Bank of Missoula, a division of Glacier Bank.
Bryant has been in commercial lending since 2008. In 2020, Bryant played a critical role in reviewing and approving or declining Paycheck Protection Program (PPP) loans.
Discussion by the Court
The Court ruled in part from the bench on the scope of expert testimony. It allowed the parties to reserve further objections during the trial. The Court sought to clarify the scope of expert testimony at trial.
Conor Newman
Walid sought to elicit testimony from Newman regarding issues of Walid’s use of general accounting principles, the complexity of the tax code, and the procedural requirements for submissions like Walid’s. Newman made several findings in his report that addressed Walid’s mental state during the preparation of the report. Some of Walid’s charges requires the government to prove that Walid knew the claim was false, fictitious, or fraudulent. Newman sought to testify that Walid “held the incorrect belief” that Walid thought he had properly filed the forms. However, the Court held that Newman’s testimony with regard to Walid’s knowledge of whether he knew what he was filing was potentially fraudulent properly would be limited.
The Court held that Newman could testify to what Walid’s filings looked like compared to others in similar circumstances for the jury to make inferences about Walid’s state of mind at the time he filed his taxes. The Court held that Walid may also testify to his own experience about what he knew at the time the claims were filed but may not use Newman to convey to the jury, Walid’s state of mind at the time he prepared his taxes.
Steve Bryant
Walid also sought to elicit testimony from Bryant regarding issues related to Paycheck Protection Program (“PPP”) loans. Specifically, Bryant sought to testify about documents relevant to approving or denying PPP loans and offer an opinion on the submissions for PPP loans from Walid to certain banks.
The Government contended that Bryant should not be allowed to testify to the materiality of what Walid submitted. Count 15 in the Indictment, requires Walid to have made statements that were “material” and “had a natural tendency to influence or were capable of influencing” a financial institution. The parties agree that this testimony properly may be limited through objection at trial and instructing the jury on the legal definition of “material”.
The Court allowed Walid’s expert to testify based on their expert opinion on a review of Walid’s submissions to the Internal Revenue Service and financial institutions, but Walid’s proposed experts shall not testify to Walid’s willfulness or Walid’s personal knowledge of filing fraudulent, fictitious, or false claims. The Court reserves ruling on any other expert testimony until trial.
Held
The Court granted in part the Government’s motion in limine as follows:
1. Walid’s expert Newman shall not testify to whether Walid knew the claim Walid filed was false, fictitious or fraudulent.
2. Walid’s experts shall not testify to an ultimate issue of the crime charged.
3. Walid’s expert Bryant shall not testify to Walid’s intent to defraud any financial institution.
4. Walid’s expert Bryant shall not testify to the materiality of documents submitted by Walid to any financial institution.
Key Takeaway:
The Court allowed Newman to testify about Walid’s use of general accounting principles and Walid’s understanding of the tax code and regulations but prohibited him from opining on Walid’s mental state or willfulness in filing fraudulent claims. Similarly, the Court allowed Bryant to discuss documents and processes related to Paycheck Protection Program (PPP) loans but barred him from testifying about Walid’s intent to defraud financial institutions or the materiality of submitted documents. These limitations preserved the jury’s role in determining Walid’s intent his state of mind.
Case Details:
| Case caption: | United States v. Walid |
| Docket Number: | 6:23-cr-00012 |
| Court: | United States District Court for the District of Montana, Helena Division |
| Dated: | January 17, 2025 |
