NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
________________
No. 22-2851 ________________
UNITED STATES OF AMERICA
v.
KIMBERLY SPONAUGLE, Appellant _____________
On Appeal from the United States District Court for the District of Delaware (D.C. Criminal No. 1-19-cr-00103-001) District Judge: Honorable Leonard P. Stark ________________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) on April 9, 2024
Before: CHAGARES, Chief Judge, PORTER, and SCIRICA, Circuit Judges.
(Filed: September 11, 2024)
OPINION * ________________
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. SCIRICA, Circuit Judge
Kimberly Sponaugle appeals her conviction for wire fraud. She argues that the
District Court erred in granting the Government’s motion in limine to (1) admit lay
opinion testimony of accountants with personal knowledge of her scheme to defraud her
employer; (2) introduce her tax returns as intrinsic evidence of fraud and evidence of her
intent and knowledge; and (3) preclude her from introducing a government witness’s
efforts to correct her testimony in an unrelated proceeding. We disagree and will affirm
the District Court’s judgment of conviction and sentence.
I.
From 2005 to 2018, Kimberly Sponaugle worked as an office manager for All
About Women (“AAW”), a small, privately-owned healthcare practice in Delaware. Her
responsibilities included reviewing monthly checking and credit card statements, entering
financial information into the company’s QuickBooks ledger, and tracking credit card
charges and reimbursements. AAW retained the accounting firm Stephano Slack to
reconcile their accounts, but the firm did not have access to or review AAW’s credit card
statements. Sponaugle nevertheless told AAW’s head partner, Dr. Diane McCracken,
that Stephano Slack performed monthly audits of AAW’s accounts, which would have
involved a review of credit card statements.
AAW gave Sponaugle a corporate credit card to use for business-related expenses.
Sponaugle knew that if she used her AAW credit card to make a personal purchase, she
would have to reimburse the company.
Beginning in 2012 and continuing until her termination in 2018, Sponaugle made
2 numerous unauthorized, personal purchases with her AAW credit card and paid her
AAW credit card bills with electronic transfers from the company’s checking account.
She concealed her purchases by mislabeling them in AAW’s QuickBooks ledger.
In March 2018, McCracken discovered Sponaugle’s unauthorized personal
transactions, which prompted her to ask Certified Public Accountant (“CPA”) Ralph
Cetrulo and accountant Kathy Storm at Stephano Slack to investigate Sponaugle’s
spending. AAW terminated Sponaugle and contacted law enforcement. An FBI
investigation determined Sponaugle made over 3,000 unauthorized transactions totaling
over $250,000.
Sponaugle was charged with one count of wire fraud, in violation of 18 U.S.C.
§ 1343. In its pretrial memorandum and omnibus motion in limine, the Government
sought several evidentiary rulings, which the District Court addressed during a pretrial
conference.
First, the Government sought to admit lay opinion testimony from Cetrulo, Storm,
and FBI forensic accountant Michelle Hoffman. The Government explained that Cetrulo
would discuss preparing Sponaugle’s tax returns, describe what information he usually
sought from clients when preparing taxes, and provide lay opinion testimony respecting a
taxpayer’s obligation to declare non-monetary income on her taxes. Next, the
Government explained that Storm would testify about how QuickBooks software is used
for bookkeeping, as well as the difference between reconciliations, which Storm
performed for AAW, and more thorough accounting practices like audits. Finally, the
Government explained that Hoffman would testify about her participation in the FBI’s
3 investigation into Sponaugle’s spending. Hoffman would also explain whether AAW’s
ledgers were consistent with the proper use of QuickBooks based on her personal
knowledge of the software as a forensic accountant. The Government argued that all
three accountants could give lay opinion testimony because of their personal knowledge,
either as AAW’s outside accountants or as an FBI investigator.
Sponaugle objected to the Government’s request to admit the accountants’
testimony as lay opinion testimony, explaining that any testimony they could give about
accounting, bookkeeping, or the operation of QuickBooks software would rely on
specialized knowledge. Sponaugle also objected to the Government’s purported failure
to provide written summaries of the basis for their testimony as required for the
admission of expert testimony under Federal Rule of Criminal Procedure 16(a)(1)(G).
The District Court granted the Government’s motion to admit the accountants’ lay
opinion testimony, finding that the testimony was based on personal knowledge. The
District Court also concluded that because the accountants were giving lay witness
testimony, the Government did not need to provide Rule 16(a)(1)(G) disclosures.
Second, the Government sought to admit Sponaugle’s tax returns. The
Government argued that Sponaugle’s failure to report her non-monetary income from
AAW was intrinsic evidence that helped to directly prove the wire fraud charge by
showing her intent to defraud and knowledge of the fraud. The Government also argued
that these omissions from Sponaugle’s tax returns were evidence of contemporaneous,
uncharged acts that facilitated the charged offense. In the alternative, the Government
argued that her tax returns were admissible, relevant evidence of Sponaugle’s intent and
4 knowledge under Federal Rule of Evidence 404(b).
Sponaugle objected to the Government’s use of the tax returns as evidence that she
committed wire fraud, arguing that their admission for that purpose would require a “mini
trial” on her knowledge of taxable income and that their probative value was substantially
outweighed by the potential of unfair prejudice.
The District Court granted the Government’s motion, finding that the tax returns
were intrinsic evidence of wire fraud, as well as valid, non-propensity evidence of
Sponaugle’s intent and knowledge of the crime under Rule 404(b). The District Court
found that any potential prejudice was outweighed by the probative value of the evidence,
especially because the District Court would prohibit the Government from suggesting or
arguing that Sponaugle committed tax fraud.
Third, the Government sought to preclude Sponaugle from introducing evidence
of McCracken’s attempt to submit a deposition errata sheet in an unrelated medical
malpractice action in Delaware Superior Court. There, the Superior Court granted the
plaintiff’s motion to strike McCracken’s errata sheet, noting that her proposed changes
were significant enough to frustrate the purpose of the deposition. The Government
argued that extrinsic evidence of the deposition, the errata sheet, and the Superior Court’s
opinion striking the errata sheet should not be introduced in Sponaugle’s trial under
Federal Rules of Evidence 403 and 608(b). Sponaugle responded that she could use the
errata sheet and Superior Court opinion to dispute McCracken’s credibility at trial.
The District Court granted the Government’s motion under Rule 403, finding that
McCracken’s submission of the errata sheet likely reflected a strategic decision by her
5 attorney, rather than her penchant for truthfulness, and that the “fairest reading” of the
Superior Court’s opinion was that the “decision . . . was entirely unaffected by any
views . . . as to whether or not Dr. McCracken was being truthful or untruthful.” App.
345. The District Court concluded that this evidence had “close to zero . . . probative
value[,]” which was outweighed by a high risk of unfair prejudice, jury confusion, and
potential for waste of time that could be caused by explaining an unrelated Superior
Court proceeding and Delaware civil discovery rules. Id. at 345–46.
At trial, the Government presented Cetrulo, Storm, and Hoffman as lay witnesses.
Cetrulo testified about the accounting services that Stephano Slack provides, including
audits, which could involve reviewing a company’s credit card statements, and
reconciliations, which would not. Cetrulo explained that Stephano Slack performed
reconciliations for AAW, which entailed “just ensuring the bank statement agrees to the
general ledger.” App. 1297. Cetrulo testified that he prepared Sponaugle’s tax returns.
Cetrulo explained that when he prepares tax returns, he consults a client’s W-2 Form,
which should include both cash and noncash income. He defined non-cash income as
any “non de minimus [sic]” benefit conferred by an employer upon an employee and
provided examples. App. 1271. Finally, Cetrulo testified that AAW retained Stephano
Slack to investigate Sponaugle’s purchases and that he supervised the investigation that
Storm carried out.
Storm described the steps she took when performing monthly reconciliations for
AAW, including comparing AAW’s bank statements with the company’s QuickBooks
ledger to ensure that their bottom lines matched. She testified that she did not have
6 access to or review AAW’s credit card statements when she conducted the
reconciliations. She described QuickBooks as a “very user-friendly accounting system”
that “you don’t have to receive formal training to . . . use.” App. 1338, 1362. Finally,
Storm testified that to investigate Sponaugle’s spending, she reviewed Sponaugle’s credit
card statements and QuickBooks ledger, categorized the purchases, and created a
spreadsheet for AAW’s review.
Hoffman testified about her investigation into Sponaugle’s spending, which
included reviewing Sponaugle’s credit card statements, purchase receipts, and AAW’s
QuickBooks ledger. Hoffman briefly described QuickBooks as a program that permits a
user to record funds coming into or out of a business and to group credit card transactions
into categories. She explained how she compared Sponaugle’s credit card purchases with
the corresponding QuickBooks entries and found that Sponaugle had mislabeled these
personal purchases. She noted how she cross-referenced purchases with
contemporaneous communications to determine whether the transaction was authorized
and added up the total amount of unauthorized purchases Sponaugle made.
The Government offered additional witnesses to testify about Sponaugle’s
unauthorized spending. FBI Special Agent Joshua Wilson described law enforcement’s
investigation and introduced into evidence the financial records about which Hoffman
testified. Wilson described QuickBooks as a “user-friendly basic accounting software
that many small businesses use” to “keep[] track of money coming into . . . and leaving
the practice.” App. 738–39. Dr. Diane McCracken testified that she was unaware that
Stephano Slack was not reviewing AAW’s credit card statements until she discovered
7 Sponaugle’s unauthorized credit card transactions. For her part, McCracken identified
specific unauthorized purchases that Sponaugle made.
After a seven-day trial, the jury found Sponaugle guilty of wire fraud, and the
District Court sentenced her to twenty-four months of probation. Sponaugle timely
appealed.
II. 1
“We review the District Court’s decisions as to the admissibility of evidence for
abuse of discretion.” United States v. Serafini, 233 F.3d 758, 768 n.14 (3d Cir. 2000)
(citing United States v. Pelullo, 964 F.2d 193, 199 (3d Cir. 1992)). To the extent the trial
court’s rulings turned upon an interpretation of the Federal Rules of Evidence, our review
is plenary. Id.
A.
First, Sponaugle argues that the District Court erred by permitting Cetrulo, Storm,
and Hoffman to offer lay opinion testimony. 2 She urges that their topics of proposed
testimony and testimony they gave at trial were based on their technical and specialized
accounting knowledge. We are not persuaded.
A lay witness may give opinion testimony that is “(a) rationally based on the
1 The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction under 28 U.S.C. § 1291. 2 Sponaugle contends that because the accountants gave expert testimony, she was unfairly prejudiced by the Government’s failure to provide Rule 16 expert witness disclosures. Because we find that the District Court did not abuse its discretion in admitting the accountants’ testimony as lay opinion testimony, we conclude that the Government was not obligated to provide Sponaugle with Rule 16 expert witness disclosures.
8 witness’s perception; (b) helpful to clearly understanding the witness’s testimony or to
determining a fact in issue; and (c) not based on scientific, technical, or other specialized
knowledge.” Fed. R. Evid. 701. But Rule 701 does not prohibit a witness from giving
lay opinion testimony simply because she may possess specialized knowledge. See
United States v. Savage, 970 F.3d 217, 286 n.77 (3d Cir. 2020). Rather, “[w]hen a lay
witness has particularized knowledge by virtue of her experience, she may testify—even
if the subject matter is specialized or technical—because the testimony is based upon the
layperson’s personal knowledge rather than on specialized knowledge within the scope of
Rule 702.” United States v. Fulton, 837 F.3d 281, 301 (3d Cir. 2016) (quoting Donlin v.
Philips Lighting N. Am. Corp., 581 F.3d 73, 81 (3d Cir. 2009)). In other words, “as long
as the technical components of the testimony are based on the lay witness’s personal
knowledge, such testimony is usually permissible” under Rule 701. Id.
First, Sponaugle urges that the District Court erroneously concluded that Cetrulo’s
proposed testimony about the information he seeks from clients when preparing taxes and
the income disclosures required for tax filings was permissible lay opinion testimony.
But as the Government explained, Cetrulo prepared Sponaugle’s taxes, and would testify
about the information she provided him, as well as the information he usually received
from other clients. Accordingly, his testimony was within the scope of Rule 701 because
it was based on his personal knowledge, as well as “particularized knowledge that [he]
ha[d] by virtue of his . . . position.” Fed. R. Evid. 701 Advisory Committee’s Note
(2000).
Second, Sponaugle argues that the trial court improperly allowed lay opinion
9 testimony about the difference between a reconciliation and audit. Yet neither Cetrulo
nor Storm provided general definitions of an “audit” or “reconciliation,” or assessed
whether the services that they provided to AAW conformed to the industry definition of
those terms. Cf. United States v. Kerley, 784 F.3d 327, 340 (6th Cir. 2015) (finding that
the district court did not abuse its discretion by permitting underwriters to offer lay
opinion testimony because their testimony was derived from their knowledge of their
employers’ underwriting policies and did not concern generally applicable standards in
the mortgage lending industry). Instead, Cetrulo defined these terms within the context
of the services that Stephano Slack provided to its clients, including AAW, and Storm
described the reconciliation process based on her own experience conducting
reconciliations for AAW. Because Cetrulo’s and Storm’s testimonies were derived from
their personal experience as AAW accountants, the District Court did not abuse its
discretion in admitting it under Rule 701.
Third, Sponaugle challenges Storm’s testimony about QuickBooks’s functionality.
As Storm explained, QuickBooks is a user-friendly software, and her review of AAW’s
ledger essentially entailed matching bottom-line amounts. Accordingly, Storm could
offer lay witness testimony on this topic because it was a “relevant, readily-
understandable . . . procedure[] or operation[] of which [she] had firsthand knowledge.” 3
United States v. Caballero, 277 F.3d 1235, 1247 (10th Cir. 2002); see also United States
3 Indeed, at the pretrial conference, Sponaugle’s counsel acknowledged that basic bookkeeping concepts, such as ledgers, checkbooks, credits, and debits were “pretty basic” and “probably . . . familiar[] with most lay people.” App. 323.
10 v. Ganier, 468 F.3d 920, 926 (6th Cir. 2006) (noting that the “average layperson today
may be able to interpret the outputs of popular software programs as easily as he or she
interprets everyday vernacular”). And, as an accountant with personal knowledge of
AAW’s QuickBooks ledger, Storm could provide lay opinion testimony about her review
of AAW’s records. See Teen-Ed, Inc. v. Kimball Int’l, Inc., 620 F.2d 399, 403 (3d Cir.
1980).
Finally, Sponaugle argues that Hoffman’s proposed testimony about her
“perspective” of AAW’s QuickBooks ledgers and the proper operation of QuickBooks—
as well as her testimony about the investigative reports she generated from her review of
AAW’s QuickBooks software—was derived from Hoffman’s specialized education and
training. Sponaugle Br. 50. We disagree.
Hoffman’s proposed testimony about the proper operation of QuickBooks was
based on her personal experience using the software and as an investigator in
Sponaugle’s case. Hoffman testified to the “user friendly” software’s basic functionality
based on her experience, explaining how a user could categorize and record any cash
coming into or flowing out of a business, including credit card transactions. App. 1396–
99. Like Storm, Hoffman could testify to the software’s basic bookkeeping functionality.
See Caballero, 277 F.3d at 1247. Improper use of a ledger, such as mislabeling entries, is
not so complex or specialized that a lay witness cannot provide opinion testimony
consistent with her personal experience. Accordingly, the District Court did not abuse its
discretion in admitting Hoffman’s proposed testimony respecting the proper use of
QuickBooks.
11 And Hoffman’s trial testimony about the Excel sheet summaries of Sponaugle’s
spending was plainly proper lay witness testimony because she personally conducted the
investigation and prepared the summaries. See United States v. Georgiou, 777 F.3d 125,
144 (3d Cir. 2015) (no abuse of discretion in admitting SEC employee’s testimony as lay
opinion testimony when the witness “provided factual information and summaries of
voluminous trading records that he had personally reviewed in his capacity as an SEC
employee and as part of the SEC’s investigation of” the defendant); United States v.
Rigas, 490 F.3d 208, 224 (2d Cir. 2007) (“A witness’s specialized knowledge, or the fact
that he was chosen to carry out an investigation because of this knowledge, does not
render his testimony ‘expert’ as long as it was based on his ‘investigation and reflected
his investigatory findings and conclusions, and was not rooted exclusively in his
expertise.’” (quoting Bank of China, New York Branch v. NBM LLC, 359 F.3d 171, 181
(2d Cir. 2004)). And the steps Hoffman took during the investigation, such as matching
credit card charges with QuickBooks ledger entries, categorizing unauthorized spending,
and calculating Sponaugle’s total unauthorized purchases, are readily understandable
procedures for an ordinary layperson. See United States v. Hamaker, 455 F.3d 1316,
1331–32 (11th Cir. 2006) (finding that FBI investigator’s review and summary of
QuickBooks records was “within the capacity of any reasonable lay person” where the
investigator “reviewed and summarized” voluminous financial documents, “matched a
small subset” of the records, presented summations and “used an Excel spreadsheet to
calculate some of these figures”).
Even if the District Court erred in permitting the three accountants to offer lay
12 opinion testimony, any error was harmless. “Discretionary evidentiary rulings will give
rise to reversible error only where ‘a substantial right of the party is affected.’” Hirst v.
Inverness Hotel Corp., 544 F.3d 221, 228 (3d Cir. 2008) (cleaned up). We will affirm an
erroneous evidentiary ruling “only if it is highly probable that the error[] did not affect
the outcome of the case.” McQueeney v. Wilmington Tr. Co., 779 F.2d 916, 917 (3d Cir.
1985).
Here, Cetrulo’s and Storm’s testimony about the definitions of income, audit, or
reconciliation did not prejudice Sponaugle. As we have already discussed, Cetrulo and
Storm provided these definitions when describing the services their firm rendered to
Sponaugle and AAW; and functionally, their definitions merely helped to establish that
Sponaugle did not report anything other than her salary to Cetrulo when he prepared her
tax returns, and that Stephano Slack did not review AAWs credit card statements.
Moreover, the vast majority of the accountants’ testimony was purely factual. So even if
the accountants’ purportedly expert testimony were stricken from the record, the
remaining testimony establishes that Sponaugle had unsupervised access to AAW’s credit
card statements and used her AAW credit card to make unauthorized personal purchases.
See United States v. White, 492 F.3d 380, 403–04 (6th Cir. 2007) (preserving proper lay
witness testimony while striking improper expert testimony). Finally, the Government
offered testimony from other witnesses to establish Sponaugle’s scheme to defraud
AAW. Agent Wilson, whose testimony is unchallenged, introduced into evidence the
financial documents and company records about which Hoffman testified, provided a
brief description of QuickBooks’s functionality, and described the Government’s
13 investigation. And McCracken identified specific, unauthorized purchases that
Sponaugle made. Because Sponaugle was not prejudiced by Cetrulo’s, Storm’s, and
Hoffman’s predominantly fact testimony, and because of the significant, independent
evidence of her guilt, we will affirm.
B.
Next, Sponaugle urges that the District Court abused its discretion by granting the
Government’s motion in limine to introduce her tax records as intrinsic evidence of wire
fraud, or, in the alternative, as evidence of Sponaugle’s knowledge and intent under Rule
404(b). We disagree.
Intrinsic evidence is evidence that either directly proves the charged offense or
“uncharged acts performed contemporaneously with the charged crime . . . [that]
facilitate the commission of the charged crime.” United States v. Green, 617 F.3d 233,
248–49 (3d Cir. 2010) (quoting United States v. Bowie, 232 F.3d 923, 929 (D.C. Cir.
2000)). “[T]he nature and scope of the evidence able to be deemed intrinsic will vary
with the charged offense.” United States v. Williams, 974 F.3d 320, 357 (3d Cir. 2020).
Because intrinsic evidence is directly related to the crimes charged, it need not be
evaluated under Rule 404(b). Green, 617 F.3d at 240–41.
Extrinsic evidence may be admitted under Rule 404(b) if it is “(1) offered for a
proper non-propensity purpose that is at issue in the case; (2) relevant to that identified
purpose; (3) sufficiently probative under Rule 403 such that its probative value is not
outweighed by any inherent danger of unfair prejudice; and (4) accompanied by a
limiting instruction, if requested.” United States v. Caldwell, 760 F.3d 267, 277–78 (3d
14 Cir. 2014).
Here, the District Court did not abuse its discretion in admitting Sponaugle’s tax
returns as intrinsic, direct evidence of wire fraud. The Government sought to admit
Sponaugle’s tax returns because her failure to claim the additional “income” she received
in the form of her personal, unauthorized purchases could support the inference that she
acted with knowledge or intent to commit wire fraud. Indeed, its omission from her tax
returns could have reflected her knowledge that such income was illegitimate or that she
tried to conceal her scheme to defraud AAW. And this evidence directly helps to prove
wire fraud because the Government needed to establish that Sponaugle acted with the
intent to defraud. 18 U.S.C. § 1343; United States v. Anderskow, 88 F.3d 245, 251 (3d
Cir. 1996) (explaining that intent to defraud can be established through circumstantial
evidence and inferences).
Although we hold that the tax returns were intrinsic evidence of Sponaugle’s wire
fraud, the District Court did not abuse its discretion in admitting Sponaugle’s tax returns
on an alternate, Rule 404(b) basis. As the District Court explained, the Government
presented Sponaugle’s tax returns for a proper, non-propensity purpose—to demonstrate
her intent and knowledge of the crime or her possible efforts to conceal her criminal
acts—and that the documents were relevant to and probative of that non-propensity
purpose. The District Court concluded that any prejudice or juror confusion was
outweighed by the tax returns’ probative value, and offered to give a limiting instruction,
which it later did at trial.
C.
15 Lastly, Sponaugle contends that the District Court abused its discretion by
precluding her from cross-examining McCracken about her efforts to amend her
deposition testimony in an unrelated Delaware Superior Court proceeding. Although the
District Court precluded this evidence under Rule 403, Sponaugle now argues that this
evidence was admissible under Rule 608(b). 4 Because Sponaugle failed to present any
argument that the District Court erred under Rule 403, she has waived any challenge to
this evidentiary ruling. See In re Asbestos Prods. Liab. Litig. (No. VI), 873 F.3d 232, 237
(3d Cir. 2017) (“As a general matter, an appellant waives an argument in support of
reversal if it is not raised in the opening brief.” (citing McCray v. Fidelity Nat’l Title Ins.
Co., 682 F.3d 229, 241 (3d Cir. 2012)). Nevertheless, we find that the District Court did
not abuse its discretion in doing so, nor would it have abused its discretion had it
precluded the evidence under Rule 608(b).
A trial court may “exclude relevant evidence if its probative value is substantially
outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the jury,
undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid.
403. We give “substantial deference” to a court’s Rule 403 determinations. Hurley v.
Atlantic City Police Dep’t, 174 F.3d 95, 110 (3d Cir. 1999).
Here, the District Court found that the Superior Court’s decision to strike
McCracken’s errata sheet had “close to zero . . . probative value” because “the fairest
4 We note, however, that Sponaugle’s counsel conceded at the pretrial conference that Rule 403 served as an independent basis to preclude this evidence regardless of its admissibility under Rule 608(b).
16 reading” of the opinion showed that the state court’s decision was “entirely unaffected”
by any views about McCracken’s truthfulness. App. 345. Moreover, the District Court
emphasized the reasonable likelihood that McCracken relied on her attorney’s strategic
advice when submitting the errata sheet, further reducing its probative value respecting
her truthfulness. The District Court noted that the near-nonexistent probative value of the
errata sheet was substantially outweighed by the high risk of prejudice to the
Government’s case, potential juror confusion caused by distinctions between civil and
criminal matters and depositions and trial testimony, and wasted time delving into the
medical malpractice case, deposition testimony, and state law rules respecting the
submission of errata sheets.
Although the District Court did not premise its evidentiary ruling on Rule 608(b),
the record reflects that it would not have abused its discretion in doing so. Rule 608(b)
allows prior acts to “be inquired into on cross-examination, at the discretion of the court,
if they are probative of a witness’s truthfulness or untruthfulness.” United States v.
Davis, 183 F.3d 231, 257 (3d Cir. 1999). As we have previously discussed, when the
District Court conducted its Rule 403 analysis, it found that McCracken’s efforts to alter
her deposition testimony were not probative of her truthfulness.
III.
For the foregoing reasons, we will affirm the District Court’s judgment of
sentence.