OPINION AND ORDER Defendant Edward Shin is the former Chief Executive Officer of Noah Bank. He is charged with multiple violations of federal law for allegedly causing Noah Bank to issue illegal loans to companies that Shin had secret ownership in, issue loans to borrowers who had put insufficient funds towards the businesses, and pay fees to brokers that secretly gave Shin a kickback. The Court has set a trial-ready date of April 4, 2022. Pending are three motions in limine filed by the Government. The Government has moved to admit (1) evidence that Shin had a Noah Bank employee mislead a casino in Las Vegas about Shin’s personal bank account balance and (2) evidence involving a food market in Armonk, New York, including the involvement in that business of two alleged co-conspirators. The Government also has moved to exclude evidence involving a 2018 recorded conversation between a cooperating witness and Shin. For the reasons below, the Court grants the two motions to admit evidence and reserves ruling on the motion to exclude evidence about the recorded conversation. I. Background A. Alleged Criminal Conduct1 Shin was the Chief Executive Officer of Noah Bank, an FDIC-insured regional bank headquartered in Pennsylvania with branches in New York, New Jersey, and Pennsylvania. Indictment 1; Complaint 10. Noah Bank’s business included, among other services, the issuance of commercial loans to small businesses that were guaranteed by the U.S. Small Business Administration (“SBA”). Indictment 1; Complaint 10. While the SBA does not itself lend money directly to individuals seeking to start or expand a business, the SBA guarantees at least some of the losses incurred by the lender if the loans are not repaid, provided the lender complies with the relevant loan program requirements, including the applicable law and procedures. Indictment 2. One of the SBA’s programs is known as the 7(a) Loan Program, which is focused on helping start-ups and existing small businesses by guaranteeing loans for various business purposes, such as acquiring land, expanding operations, and purchasing machinery or other materials. Id. 3. Under the SBA’s procedures, and as relevant to the allegations against Shin, a lender may not have any real or apparent conflict of interest with a borrower, must assess the appropriate amount of equity the borrower is required to have in the small business receiving the loan, and may permit the payment of broker fees only in connection with loan funds that are reasonable and customary for the services performed. Id. 4; Complaint 11(d); see, e.g., 13 C.F.R. §§120.110, 120.140, 120.221, 130.5. The Indictment alleges that, at all times relevant to the Indictment, Noah Bank was what is known as a preferred lender under the SBA’s Preferred Lenders Program (“PLP”). Indictment 3. That preferred lender status allowed Noah Bank to provide SBA-guaranteed loans without first providing documentation to, or even securing approval from, the SBA. Id.; Complaint
11(c), 12. With PLP status came additional responsibilities for Noah Bank. A lender operating by a grant of PLP authority must confirm that all its PLP loan closing decisions are correct and that it has complied with all requirements under the law and SBA regulations, including the aforementioned ones concerning conflicts of interest, equity injections, and payment of broker fees. Indictment
