2009 NASAA Attorney/Investigator Training

ANALYZING EVIDENCE

Randy McNeill, Deputy Director

334-242-2984, randy.mcneill@asc.alabama.gov

Martin Cordell, Enforcement Attorney:

360-902-8772, mcordell@dfi.wa.gov

ANALYZING EVIDENCE:

How and what you should look for in reviewing your case in making a referral or drafting a pleading.

Using evidence to tell your

story.

In evaluating the strength and weaknesses of your case or evidence, consider:

What are the violations to be proved?

What are the elements of each violation?

What evidence supports each element of the violation?

What are potential evidentiary issues or objections?

What are the potential violations?

Typical violations: Sale of Unregistered Securities

Exemptions? Unlicensed broker-dealer/salesperson Fraud

Device, Scheme, Artifice Misrepresentions Omissions Act, practice or course of business

What are the elements of each violation?

Conduct

Mental State

Jurisdictional Issues

Statute of Limitations

Subject Matter

Location of the violation

What evidence supports each element of the violation?

Types of Evidence

Testimonial

Documentary

Strength of Evidence

How Much Evidence Is Needed?

Corroborating Witnesses

Supporting Documents

Impact of Evidence?

Sympathetic Victims

“Smoking Gun” documents

Circumstantial Evidence

Evidence Analysis

How does this piece of evidence help?

Theory, Theory, Theory!!

First question that you must answer is, “What is my theory in this case?”

Questions to Ask in Forming Your Theory

What type of case is this? What is the fraud? Who are the investors? What is the motivation of the

defendant/respondent?

Tell the Story

You should think of every document as a potential piece of evidence that will help you tell the story.

Key Questions

Does this piece of evidence help prove an element of the case?

Does it show relevant pattern or practice? Can it be used against me, and if so what

impact? Are there evidentiary hurdles in getting the

evidence admitted? Does it create an unnecessary appellate issue?

It’s not what you know. It’s what you can prove!

Goal: Make the Complex Simple

Evidentiary Issues

Authentication: FRE Rule 901. Best Evidence Rule: FRE Rule 1002, et seq. Hearsay: FRE Rule 802, et seq. Relevancy: FRE Rule 402 Undue Prejudice: FRE Rule 403 Other Acts: FRE Rule 404

Twelve Banker Boxes to 38 ExhibitsNumber Admit Description Witnesses

1. Letter to Circuit Clerk Morgan County Stephens

2A. Suspension Complaint Lusk

2B. Suspension Order Lusk

2C. Disbarment Complaint Lusk

2D. Disbarment Order Lusk

3A. Certified Conviction CC# Certified

3B. Certified Conviction CC# Certified

4. Bail Bond Act Self proving

5A. Certificate of Non-registration for Jailbusters Certified, Tolar

5B. Certificate of Non-registration for Butler Certified, Tolar

6. Buy/Sell Agreement Jailbusters Marshall County Roome

7. Promissory Note 1/22/03 Roome

8. Corporate Resolution Jailbusters Marshall County Roome

9. Articles of Incorporation Roome

10. Certificate of Deposit Jailbusters of Marshall County Roome

11. Business Signature Card Roome

12A-Q Marshall County Monthly Split Roome

13A-L Checks/Money Orders Roome

14. Lease Jailbusters Morgan County Roome

15. Minutes & Addendum 6/6/04 Meeting Roome

Twelve Banker Boxes to 38 Exhibits16. Termination Letter Roome

17. Notice of Default Roome

18. Buy Sell Agreement Jailbusters Cullman County Flinner

19. Promissory Note 1/27/03 Flinner

20. Corporate Resolution Flinner

21. Check #626 1/29/03 Flinner

22. Articles of Incorporation Flinner

23. Certificate of Deposit Jailbusters of Cullman County Flinner

24. Termination Letter Flinner

25. Buy Sell Agreement Jailbusters Walker County Parnell

26. Promissory Note 8/14/03 Parnell

Number Admit Description Witnesses

27. Check # 6689 8/14/03 Parnell

28. Certificate of Deposit Jailbusters of Walker County Parnell

29A-H Checks to Butler or Parallax Parnell

30. Termination Letter Parnell

31. Notice of Default Parnell

32. Withdrawal of CD Jailbusters of Marshall County Custodian, Lewis

33. Withdrawal of CD Jailbusters of Cullman County Custodian, Lewis

34. Withdrawal of CD Jailbusters of Walker County Custodian, Lewis

35A- Bank Records Custodian, Lewis

36A- Certificates of Incorporation of Butler Related Companies Certified, Lewis

37. Flowchart Butler Related Companies Lewis

38. Timeline Lewis

Example

Sharp Instrument

GUILTY!

Butler found guilty of securities fraud, faces 10 years to life Categories: Court

Huntsville TimesJamie Butler, left, confers with defense attorney John Mays of Decatur.

HUNTSVILLE, AL - A Madison County jury has found James L. "Jamie" Butler Jr. guilty of nine counts of securities fraud in the sale of several Bail Busters bail bond company franchises. Butler faces between 10 years and life in prison and will be sentenced later.

The verdict was read in open court at about 4 p.m. after a jury of 10 women and 2 men deliberated about four hours. Butler's trial lasted a week.

Butler stood impassively as visiting Circuit Judge Brian Howell of Anniston read each of the verdicts on the 11 charges against Butler. He was found not guilty of two charges involving victim Kay Roome.

Butler will be sentenced Sept. 11 under Alabama's Habitual Offenders Act. He has two prior convictions for theft.

Prosecuting Butler under securities laws was like the decision federal investigators made to prosecute Al Capone for income tax evasion. Butler was described as a career criminal who, in the words of lead prosecutor Randy McNeil of the Alabama Securities Commission, "has hurt a lot of people for a long time."

Butler's lead defense attorney Bruce Gardner expressed disappointment after the verdicts were read. Gardner said he thought the defense would prevail on more of the charges, but "I'm not sure I ever expected to win on all counts, to be brutally honest."

Summary:

In analyzing the evidence in your case, prepare a list to ensure that you cover:

Each violation to be proved,

Each element of the violation, and

Witness or documents supporting the violation of each element.

Summary:

To tell your story effectively: Determine your theory of the case, ID evidence that tells the story, Keep it simple, What are evidentiary issues? Use a sharp instrument to obtain

successul results.

Thank you.