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United States of America v. Marian Morgan

November 18, 2011



This cause comes before the Court for consideration of Defendant Marian Morgan's Renewed Motion for Judgment of Acquittal Pursuant to Federal Rule of Criminal Procedure 29 and Motion for New Trial Pursuant to Federal Rule of Criminal Procedure Rule 33. (Dkt. 306.) The Government filed a response in opposition to the motion. (Dkt. 312.) The motion is timely.

I. Background

The trial of this matter took place over a period of seventeen days beginning on September 6, 2011. On September 29, 2011, the jury returned verdicts of guilty against Defendant Marian Morgan on all 22 counts alleged in the Superceding Indictment. Contrary to the defendant's recitation of the evidence in her motion, the evidence adduced at trial established her guilt as to all 22 counts beyond a reasonable doubt.

The evidence presented at trial demonstrated that the defendant, her husband, John Morgan, and others had engaged in a "prime bank note trading" scheme through their company "Morgan European Holdings, APS" ("MEH") from March of 2005 to August of 2009. The Government presented testimony from numerous victim-investors and others that established that, in order to recruit investors into MEH, Marian Morgan and others made numerous fraudulent misrepresentations to the victims, including statements that the Morgans had exclusive connections with prime bank note trade programs; that the projected profit from their investments would range between 30% and 70% per month; that their principle would be safe because it was held in escrow in an account at the Danske Bank in Denmark; and that the escrow account was maintained by Eli Hecksher, a Danish attorney and a co-defendant. Investor-victims also testified that the defendant threatened them with the loss of their investment in order to keep them from reporting the fraud to the Securities and Exchange Commission ("SEC") or to law enforcement.

The testimony of the investor victims, and IRS Special Agent Diane Knott, along with numerous emails to and from the defendant and exhibits from a variety of foreign and domestic financial institutions, established that the Morgans collected approximately $28 million from investor-victims across the United States, Canada, and the United Kingdom. Then, instead of maintaining the funds in the secure escrow account as promised, the Morgans diverted approximately $10.8 million of investor funds to their own use, spending the monies on real estate, cars, and a lavish lifestyle. Expert witness Professor James Byrne, whose expertise is in the area of international banking and commercial fraud, opined that the MEH program was a textbook example of a prime bank/high yield scheme.

The Government also presented testimonial and documentary evidence regarding the defendant's conduct in the civil SEC action that predated the criminal case. That evidence, which was elicited through SEC Attorney Zach Carlyle, established that the SEC action was based on the defendant's and others' involvement in defrauding investors by offering and selling investments in the same fictitious prime bank instrument trading program that was the subject of the criminal case.

Finally, the Government also offered into evidence the Morgans's income tax returns for 2005, 2006, and 2007, along with Special Agent Knott's analysis of their income from the MEH scheme and how their income tax returns under reported that income.

The defense's primary witness was the defendant Marian Morgan who testified for approximately 11 hours over a three day period. She offered an explanation for everything she had done during the relevant time period, including the meaning of numerous emails. In addition, the defense called fact witness Michael Von Guttenberg and expert witness Kevin Carreno. Finally, the defense attempted to call Terry Provence; however, Mr. Provence exercised his fifth amendment right to remain silent.

II. Discussion

A. Renewed Motion for Judgment of Acquittal

In considering a motion for judgment of acquittal, the evidence at trial must be viewed in the light most favorable to the government, "with all reasonable inferences and credibility choices made in the government's favor." United States v. Keller, 916 F.2d 628, 632 (11th Cir. 1990). The evidence need not "exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt." United States v. Ospina, 823 F.2d 429, 433 (11th Cir. 1987). "A jury is free to choose among reasonable constructions of the evidence." Id.

1. Count One: Conspiracy

The evidence presented at trial established beyond a reasonable doubt that the defendant was guilty of conspiracy to commit wire fraud, the unlawful transfer of stolen funds and money laundering. The testimony of the witnesses established that Marian and John Morgan ran MEH as partners and utilized Eli Heckscher as their escrow agent. Stephen Bowman was an intermediary with his own group of MEH investors. Hundreds of emails, most of which were authored by the defendant, and numerous other documents, corroborated the illegality and joint nature of the investment scheme. Those same emails also established the defendant's knowing and ...

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