The Department of Justice recently filed a new objection in the case against Paul Burks, founder of ZeekRewards, arguing that his proposed defense experts, John White and Morris Aaron, seek to "serve as judge, attorney, and jury." This filing intensifies the debate over the scope of expert testimony permitted in the wire fraud prosecution.
Burks intends to have John White testify that ZeekRewards did not operate as a Ponzi scheme. White's planned approach involves reading a dictionary definition of a Ponzi scheme and then comparing it to ZeekRewards' business model. The DOJ contends this method attempts to "conflate the issues and ignore and/or misrepresent the relevant law."
The prosecution states it will not call an expert to testify that Burks' scheme is a Ponzi scheme. This renders White's proposed testimony moot, according to the DOJ. Burks faces charges of wire fraud, not specifically operating a Ponzi scheme. The government's case does not require proving a Ponzi scheme's existence to establish wire fraud.
Wire fraud, defined under 18 U.S. Code Section 1343, requires prosecutors to demonstrate a scheme to defraud and the use of interstate wires to further that scheme. A Ponzi scheme is one common type of fraudulent scheme, but proving its specific characteristics is not a prerequisite for a wire fraud conviction. The DOJ characterized Burks' strategy as an attempt to "set up a straw house and then knock it down." Burks seeks to offer expert testimony defining a Ponzi scheme and then opining that his operation does not fit that definition. However, the government emphasizes that proving a "scheme to defraud" does not necessitate proving all elements of a Ponzi scheme.
In his reply to the initial objection, Burks asserted that "the existence, or non-existence, of a Ponzi scheme" is a "well established" and proper subject for expert testimony in mail and wire fraud prosecutions. He cited several cases to support this claim.
The DOJ dismisses Burks' cited legal precedents, stating his claim "does not withstand scrutiny." The prosecution differentiates those cases, noting they involve different violations than Burks' wire fraud charges. The dispute also centers on the nature of White's testimony itself.
Burks claims White offers an "accounting analysis," not a legal conclusion. The DOJ, however, points to White's filed opinion, which begins by quoting Black's Law Dictionary's definition of a Ponzi scheme. White then explicitly states he will discuss and compare these "Ponzi scheme characteristics" to ZeekRewards. The prosecution argues this constitutes instructing the jury on a legal definition, a role for which White lacks expertise.
The traditional role of an expert witness is to assist the jury in understanding complex factual matters that are beyond the common knowledge of the average person. Experts apply specialized knowledge to facts, but they do not interpret or present legal definitions. Such interpretation and instruction on legal standards fall under the purview of the court and the presiding judge. An expert attempting to define legal terms for a jury oversteps this boundary.
Such an approach attempts to usurp the court's function in instructing the jury on legal definitions. The court is responsible for providing legal instruction. The legal maneuvering underscores a fundamental disagreement over how the ZeekRewards case should be framed for the jury, with the DOJ aiming to keep the focus strictly on wire fraud elements.