Douglas Worman owns and operates Worman Forest Management, LLC (“WFM”), a limited liability company providing forestry services to various public and private entities. Worman’s spouse owned CRW Resources, LLC (“CRW”), another forestry services limited liability company. Worman was a signer on several of CRW’s bank accounts.
In 2015, Worman entered into a factoring agreement with another business as the lender. From 2015 through at least September 2018, Worman’s customers submitted invoices to him, and he submitted invoices to the lender for factoring.
From July 2018 through September 2018, Worman wrote checks between WFM’s and CRW’s bank accounts at two financial institutions—Mountain West Bank and Numerica Credit Union. Worman and his wife later obtained a loan on behalf of CRW from another financial institution, Carolina Bank.
In May 2023, Worman was indicted on seventeen counts of wire fraud, four counts of bank fraud, and one count of false statements to a bank or other federally insured institution.
In the indictment, the Government asserts, generally, that Worman inflated and/or falsified invoices from subcontractors and vendors to artificially inflate his factoring requests, then received funds from the factoring lender for work he and his business did not actually perform. The Government also alleges that Worman engaged in check kiting by writing checks between WFM and CRW bank accounts and taking advantage of the float time wherein the account balances appeared inflated. Finally, the Government alleges Worman concealed a material fact in his loan application to Carolina Bank, a federally insured financial institution. Worman has pleaded not guilty to the charges and denies any wrongdoing.
The Government sought exclusion of Professor Daniel Morrissey as an expert witness pursuant to Federal Rules of Evidence 702, 704, 401, and 403.
Corporate Law Expert Witness
Daniel J. Morrissey holds both a bachelor’s (Phi Beta Kappa) and a law degree from Georgetown University. After law school he served as a law clerk for U.S. District Judge Richard Austin in Chicago. He then worked as an attorney in the enforcement division of the Securities and Exchange Commission in Washington, D.C. and Los Angeles. After a period of private practice in Los Angeles, he became a law professor at the University of Tulsa, where he earned the rank of tenured, full professor. He has also served as a visiting professor of law at Pepperdine University, the University of Denver, and Seton Hall University, and as an adjunct professor at Loyola of Los Angeles.
In 1994 he was appointed dean at St. Thomas University School of Law in Miami, and served in that capacity until 1999. In 2001 he was appointed Dean of Gonzaga School of Law and served in that capacity until 2004. He has published a number of articles in the areas of corporate securities law and jurisprudence.
Discussion by the Court
Government asserted that Morrissey’s testimony impermissibly instructs the jury on the law and usurps its role by applying the law to the facts of this case; incorrectly comments on a witness’ credibility and Defendant’s mental state.
Morrisey opined on the law regarding the elements of the crimes Worman is charged with, including the requisite intent.
The Court held that he applied that law to the facts of this case to draw legal conclusions regarding the legitimacy of the Factoring Agreement and the legal sufficiency of Worman’s federal charges. Morrissey’s report both comments on the law and intrudes upon the jury’s role in applying the law to the facts of this case. The Court found that Morrissey’s opinions are rife with evidentiary defects that demonstrate their inadmissibility. Furthermore, Morrisey improperly opines on Worman’s mental state and concludes that he lacked the intent necessary to result in a conviction in this case.
Key Takeaway:
Morrissey’s testimony intrudes upon both the roles of the Court and the jury by opining on the law applicable to this case and by applying the law to the facts. It is well settled that the judge instructs the jury in the law. Furthermore, the Ninth Circuit “has repeatedly affirmed that an expert witness cannot give an opinion as to her legal conclusion, i.e., an opinion on an ultimate issue of law.”
Held
The Court granted the Government’s motion and excluded the testimony and report of Daniel Morrisey.
Case Details:
| Case Caption: | United States V. Worman |
| Docket Number: | 2:23cr136 |
| Court: | United States District Court, Idaho |
| Order Date: | August 1, 2024 |
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