USA et al v. E-BIOFUELS, LLC et al
Filing
451
ENTRY ON MOTION IN LIMINE - This matter is before the Court on a Motion in Limine filed by Plaintiff-Relator Alexander Chepurko (Filing No. 431 ). The Motion in Limine is GRANTED in part and DENIED in part. Ms. Furando may provide testimony and th e motion in limine is limited to the two narrow questions propounded in Interrogatories 7 and 9. An order in limine is not a final, appealable order. If the parties believe that specific evidence is admissible or inadmissible during the course of the bench trial, counsel may raise specific objections to that evidence. (See Order). Copy sent pursuant to distribution list. Signed by Judge Tanya Walton Pratt on 7/23/2021. (AKH)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
CHRISTINE FURANDO,
Defendant.
ALEXANDER CHEPURKO,
Relator.
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No. 1:14-cv-00377-TWP-MJD
ENTRY ON MOTION IN LIMINE
This matter is before the Court on a Motion in Limine filed by Plaintiff-Relator Alexander
Chepurko ("Chepurko") (Filing No. 431). Chepurko blew the whistle on numerous individuals and
entities for false claims submitted to the United States Government ("Government") for
transactions in the renewable energy industry. Because of Chepurko's whistleblowing efforts, the
Government was able to criminally prosecute a number of individuals and entities named in this
case, resulting in criminal convictions. Chepurko separately filed this civil False Claims Act qui
tam action to recover damages and civil penalties on behalf of the Government and himself.
After years of litigation and motions practice, this matter is set for a bench trial to
commence on August 9, 2021, against Defendant Christine Furando ("Ms. Furando"). The claims
to be tried are Counts I and II of the Second Amended Complaint: Chepurko's civil False Claims
Act qui tam claims against Ms. Furando. The issue to be presented at trial is Ms. Furando's liability
under the False Claims Act concerning her "knowledge." Chepurko filed his Motion in Limine to
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exclude testimony and evidence from Ms. Furando because she invoked her Fifth Amendment
rights. For the following reasons, the Motion is granted in part and denied in part.
I.
LEGAL STANDARD
"[J]udges have broad discretion in ruling on evidentiary questions during trial or before on
motions in limine." Jenkins v. Chrysler Motors Corp., 316 F.3d 663, 664 (7th Cir. 2002). The
Court excludes evidence on a motion in limine only if the evidence clearly is not admissible for
any purpose. See Hawthorne Partners v. AT&T Technologies, Inc., 831 F. Supp. 1398, 1400 (N.D.
Ill. 1993). Unless evidence meets this exacting standard, evidentiary rulings must be deferred until
trial so questions of foundation, relevancy, and prejudice may be resolved in context. Id. at 1400–
01. Moreover, denial of a motion in limine does not necessarily mean that all evidence
contemplated by the motion is admissible; rather, it only means that, at the pretrial stage, the Court
is unable to determine whether the evidence should be excluded. Id. at 1401.
II.
DISCUSSION
In his Motion, Chepurko asks the Court to exclude testimony and evidence from Ms.
Furando because she refused to provide complete answers to interrogatories after being ordered to
do so on the grounds that her answers would tend to incriminate her under the Fifth Amendment.
Chepurko contends the primary issue for trial is whether Ms. Furando had the requisite knowledge
under the False Claims Act of the false claims her companies submitted or caused to be submitted
to the Government. He asserts that impacting this issue is how Ms. Furando's invocation of the
Fifth Amendment in response to his interrogatories affects the scope of evidence that can be
presented in the upcoming bench trial.
Chepurko intends to present evidence showing that Ms. Furando acted “knowingly” to
establish liability under Counts I and II of the Second Amended Complaint pursuant to the False
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Claims Act’s “deliberate indifference” and “reckless disregard” standards. Ms. Furando has
asserted that she lacked knowledge of the fraud and had no role in or responsibility for the false
claims fraud scheme. During the course of the litigation, Chepurko served discovery on Ms.
Furando, she did not fully respond, and she was ordered by the Magistrate Judge to provide more
detailed responses to Chepurko's discovery, including Interrogatories 7 and 9.
Chepurko continues,
However, instead of complying with the order compelling Ms. Furando to provide
complete answers to interrogatories she invoked the Fifth Amendment in response
to Plaintiff-Relator’s interrogatories seeking information about her claim to
ownership of the assets that were seized by the government and the sources of
income used to purchase these assets and real estate. The failure to answer these
questions prevented Plaintiff-Relator from obtaining discovery from Ms. Furando
about her claim to ownership of assets which logically would have been purchased
from her ownership and control of these companies that were ultimately criminally
convicted for the false claims fraud scheme.
(Filing No. 431 at 4.)
Chepurko asserts that Ms. Furando’s assertion of the Fifth Amendment to the two
interrogatories implicates her role in the companies and her knowledge of the fraud scheme
because the interrogatories go to the heart of her ownership and utilization of company assets as
well as her knowledge of the companies’ activities. He argues the information sought from the
interrogatories would either contradict Ms. Furando's assertion that she has no knowledge of the
business affairs of her companies or support the contention that she acted with deliberate ignorance
or in reckless disregard of the fraud. He asks that Ms. Furando not be permitted to testify or present
evidence on matters that are implicated by her assertion of the Fifth Amendment in response to
discovery requests because it is too late for her to waive the right in this proceeding, and it would
be unfair and prejudicial to permit her to proceed with evidence while asserting the Fifth
Amendment. And, "Ms. Furando should not be permitted to testify or present any evidence about
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her role in the company or lack of knowledge of the fraud scheme because she refused to produce
complete answers to interrogatories seeking information that is highly relevant to her knowledge
and role in the fraud." Id. at 6. "Ms. Furando’s assertion of the Fifth Amendment in discovery
should preclude her from presenting evidence denying knowledge of or involvement in the false
claims fraud scheme." Id. at 7.
Chepurko argues he is entitled to an adverse inference that the assets (the subject of the
interrogatories) were illegal proceeds of the fraud scheme and subject to forfeiture, and Ms.
Furando participated in and had knowledge of the fraud. See Baxter v. Palmigiano, 425 U.S. 308,
318 (1976) (court may draw an adverse inference based on the invocation of the Fifth Amendment
in a civil case). He contends that such an adverse inference would not be unfair or prejudicial to
Ms. Furando because she already has lost on the merits of her petition seeking the real estate and
assets in the related criminal case. Chepurko recognizes that, “[a]s with most evidentiary rulings,
the decision whether to permit the inference falls within the district court's broad discretion,” First
Midwest Bank v. City of Chicago, 337 F. Supp. 3d 749, 776 (N.D. Ill. 2018), and the inference is
not required. Daniels v. Pipefitters' Ass'n Local Union No. 597, 983 F.2d 800, 802 (7th Cir.1993).
In response to the Motion in Limine, Ms. Furando argues that Chepurko's request is vastly
overbroad and should be denied entirely or, at a minimum, denied in large part and substantially
limited to the two narrow questions propounded in Interrogatories 7 and 9. Ms. Furando explains
that Chepurko initially sued her and numerous co-defendants and then voluntarily dismissed the
case against her. After Ms. Furando filed a petition in a related criminal matter, claiming interest
in assets subject to forfeiture, Chepurko filed his Second Amended Complaint, renaming Ms.
Furando as a defendant and adding a new claim (Count IV) against her based on the forfeiture
petition in the criminal case. Ms. Furando moved to dismiss Count IV, and the Court granted that
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motion, but before Count IV was dismissed, Chepurko issued discovery including nine
interrogatories and a notice to produce.
Ms. Furando further explains that she produced hundreds of pages of documents and
provided robust answers to most of the interrogatories, and after Chepurko moved to compel
discovery responses, she invoked her Fifth Amendment rights as to Interrogatories 7 and 9, which
ask about ownership of assets subject to forfeiture and sources and amounts of income used to
purchase the assets. Those interrogatories, Ms. Furando argues, pertain to Count IV of the Second
Amended Complaint, which has been dismissed and will not be presented at trial. Ms. Furando
explains that she provided a ten-page response to Interrogatory 6, which specifically addresses Ms.
Furando's knowledge of the biodiesel fraud scheme and which is the issue for trial.
Ms. Furando argues that evidence about the ownership of assets subject to criminal
forfeiture and the sources and amounts of income used to purchase those assets—the topics of
Interrogatories 7 and 9—is not relevant to the issue for trial, which is Ms. Furando's knowledge of
the fraud scheme. Thus, Ms. Furando's invocation of the Fifth Amendment to not answer
Interrogatories 7 and 9 is not relevant to the issue for trial and should not result in exclusion of all
her evidence and testimony. Furthermore, Ms. Furando has not invoked a Fifth Amendment
blanket privilege to avoid any and all discovery. Rather, Ms. Furando has produced many
documents and answered many interrogatories. Therefore, Ms. Furando asserts, the broad sanction
of not allowing her to testify or present any evidence is unfounded.
As to Chepurko's request for an adverse inference, Ms. Furando argues that the requested
inference about ownership of the assets subject to criminal forfeiture is not relevant to the issue
for trial, which is he knowledge of the fraud scheme and presenting false claims to the Government.
There is no probative value to this inference, and it would be unfairly prejudicial to Ms. Furando.
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In reply, Chepurko argues the Court should exclude Ms. Furando’s testimony and evidence
as to her lack of knowledge of the false claims fraud scheme because her invocation of the Fifth
Amendment deprived him of evidence relevant to Ms. Furando's knowledge and her status as an
"innocent spouse." Ms. Furando cannot have it both ways of testifying that she had no knowledge
and then refusing to testify about other matters that are relevant to her knowledge. Chepurko asserts
that, while the information sought in Interrogatories 7 and 9 relate to Count IV that was dismissed,
the Court already has determined that Interrogatories 7 and 9 also relate to the remaining claims
for trial (see Filing No. 365 at 9 (Order on Motion to Compel)). He argues,
It doesn’t matter that Ms. Furando didn’t raise the Fifth Amendment in response to
other questions or that she produced some documents. That doesn’t change the fact
that she has asserted the Fifth Amendment effectively cutting off discovery on
matters that are relevant to her defense on the sole issue that remains for trial.
(Filing No. 445 at 6.) Furthermore, Chepurko contends that it is "entirely appropriate in a civil
case for the Court to draw an adverse inference of Ms. Furando’s guilt because her claim of the
Fifth Amendment is at direct odds with her defense. That’s not prejudicial. It’s a logical adverse
inference that is permitted by the law." Id. at 7.
As the Court noted above, it excludes evidence on a motion in limine only if the evidence
clearly is not admissible for any purpose, and unless evidence meets this exacting standard,
evidentiary rulings are deferred until trial so that questions of relevance and prejudice may be
resolved in context. While the Court agrees with Chepurko that Ms. Furando's relevance argument
previously was addressed by the Magistrate Judge in the Order on Motion to Compel, the Court is
not persuaded at this pretrial stage that the broad sanction of complete exclusion of testimony and
evidence from Ms. Furando and an adverse inference are appropriate. The Court agrees with Ms.
Furando that the scope of the Motion is too broad, and the scope of evidence should be limited to
the two narrow questions propounded in Interrogatories 7 and 9. If additional evidence is presented
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by Ms. Furando during trial that should not be admitted, the Court can prohibit its admission or
strike the evidence without resulting in unfair prejudice to Chepurko, especially in light of the fact
that this will be a bench trial.
III.
CONCLUSION
As described above, the Motion in Limine (Filing No. 431) is granted in part and denied
in part. Ms. Furando may provide testimony and the motion in limine is limited to the two narrow
questions propounded in Interrogatories 7 and 9. An order in limine is not a final, appealable order.
If the parties believe that specific evidence is admissible or inadmissible during the course of the
bench trial, counsel may raise specific objections to that evidence.
SO ORDERED.
Date:
7/23/2021
Distribution:
Joyce R Branda
US Attorney's Office
Commercial Litigation Branch
PO Box 261 Ben Franklin Station
Washington, DC 20044
Stephen Martin Kohn
KOHN KOHN & COLAPINTO LLP
smk@kkc.com
Stephen M. Komie
KOMIE AND ASSOCIATES
stephen_m_komie@komie-andassociates.com
David K. Colapinto
KOHN KOHN & COLAPINTO
dc@kkc.com
Brian J. McCabe
US DEPARTMENT OF JUSTICE-CIVIL
DIVISION
brian.mccabe@usdoj.gov
Tracy Lyle Hilmer
US Department of Justice - Civil Division
PO Box 261
Ben Franklin Station
Washington, DC 20044
Shelese M. Woods
UNITED STATES ATTORNEY'S OFFICE
shelese.woods@usdoj.gov
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