we welcome you to the courthouse like it when the courthouse full of people i've had a terrific week this week haven't just rosenbaum with me on the panel it's nice to have her help me try to figure these cases out and the two of us together have enjoyed being with you judge martinez since martinez i'm sure you know it sits in south florida and when district judges come to help us they don't get  to put aside their regular work they do this in addition but it's been a real pleasure to have you and your law clerks here do we thank you very much it's it's a pleasure to be here so we have three cases this morning and i see we have experience counsel so i'm not going to explain the stoplights system to you and we'll just get underway with the united states of america versus the jink good morning good morning i may please the court my name is lee and webster and i represent fragile cans in this appeal this morning i would like to address that mandate issue or whether the government should have been allowed to introduce additional evidence on couple of comments that are reflective of the issues that we've presented in our appeal she said i think that justice isn't just isn't served by saying the government should have done this the st time i think the culpability of the defendants is so high that i cannot bring myself to cut off the evidence at this point although i will freely admit that it is unusual for the government to bring in more evidence at a recent sing hearing this is reflective of the issues we've raised for a number of reasons you know you've hit on on one of my peeves i mean i just feel like the rules ought to be the same if the if when it goes back if the government can raise new climbs and present new evidence then the defendant ought to be able to do that  they're hard to fault her i think i think there are a couple of points i should have indicated to her that are to the judge that the government should not have been allowed to introduce additional evidence those points are to i think one is that the general rule stablish in came to me and washington as where the sentencing objection is clear at the st sentencing hearing where the objection was made to the p s i i to the hands when and when the of recent unpublished decisions from this court including that she case and the ham a doula case that judge rose mom i think you're on the panel for that so i think that rule is clear and so here there's no question that the issue insufficient so that if we apply the general rule then that compels the conclusion that new evidence should not have been allowed on remain the other point that i think responds to your question judge martin is that there was some indication from this court what the outcome should be and we can look to the post decision litigation for that so after the decision came down bay kading their sentences  that order the court also denied the government's motion in which they asked for to be able to introduce additional evidence or for clarification either way and so i think  canty and washington and the court order judge wilson's order that was issued in response to the motion to expedite the mandate then there was guidance to judge evans and their shit she should not have issue or how do you want to respond to that i think that those cases aren't specific to this context and so we have the more specific rules from washington and ca and so while those general propositions exist i think when you're deciding whether or not the government should have been allowed to introduce additional evidence the more specific cases govern and those are also the more recent cases from this court on that issue respond even though it's over time quickly ok she specifically said that she did not like the fact that mr jenkins had made comments where he was d meaning the government i think that sort of speech is clearly again thank you my name is amy while and i represent willie jenkins the district court in this case judge evans clearly erred both in finding that there was a loss in this case but also based on her  failure to find jointly undertaking criminal activity and her reliance on the government's flawed extrapolation very st with respect to jointly undertaken criminal activity she seemed to think that because  business that they were responsible for everything that was done within the business whether they knew about it or not by all of the employees of the business and the nine locations that they had for their business saurabh it georgia and apparently also in alabama and she says was saying the whole time that somehow the their fact that they had committed fraud on sixteen returns only sixteen returns out of over five thousand dollars returns over a four year period of time that they were responsible for every return by every other tax preparer and that they had set some sort of guidelines and she made this finding when she was making her findings as apparently to jointly undertaken criminal activity although she never said that the methods used by fred and willie were not idiosyncratic when you look at what they were doing there is a pattern a pattern in practice there there was no evidence that they had anything any kind of pattern and practice with other employees and i think the extravagance of the fraud and the pattern are good reasons to believe that the same type of fraud wasn't just confined to these returns that's impossible finding to make on this record she goes on to say that they set certain guidelines what guidelines they set no guidelines there was no discussion of any guidelines no discussion of any contact between fred and willie and their other employees she also said that you can look at it that they were the employee ers of the business and they did set standards for the business what standards there was no testimony about any standards in other cases in which there has been a finding of a loss throughout a business there has been some type of testimony a fraud permeat entire business and that other employees are involved for example and tax cases you'll have a situation where there will be a person who's the owner of the business who will train actually train the other employees of the evidence or testimony that the training of the other employees guidance of them i've had cases where they've had up on the walls this is what you should put in the returns you should this is the edge of the schools they should put down these are the number of kids you should put on basic stuff teaching the other employees or other testimony that there was other guidance given to any other employees here there was none but what the court did he'd agreed but the government's extrapolation theory since they didn't know about the two thousand eight hundred and thirty one returns that had a schedule c that was what was there were sixteen returns proven at trial that had fraudulent schedule say the government wanted to extrapolate from the larger universe of two thousand eight hundred were able to show that the majority of those returns or not it was i think sixty eight percent of the fifty eight percent of the returns were not signed by either fred or willy will never sign a returns he's not a  repair fred signed some returns but he didn't sign all of these returns yet the judge made a finding i can find lost based on this entire universe of returns even though there's only proof at trial of sixteen returns being project on and i can allow the government to extrapolate out into the entire universe and find fraud in all the returns we argued wait a nd you have to prove the government has proved jointly undertaken criminal activity government has to show something some fraud connecting the defendants either fred or willy with the returns that were signed by other people if not you don't have enough factual evidence or a basis for that five judges ignore that and then she went into this there were basic guidelines of which there was no proof at trial the government actually said other employees weren't involved in this and that was the government's position on the sixteen returns they said no you know the government other employees were involved this was totally fred and well at resentencing there was no evidence of any other employer being involved in any kind of fraud on any return that had anything to do with fraud and well ordinates st opinion said there was nothing in the trial evidence that was a pitch sufficient to support fraud between fred and willie in any return other than the sixteen returns that were charged in the indictment but she kept judge  kept going back to that same argument she in fact spent i think it was around forty five minutes i don't know it's about twenty pages of the transcript summarizing all of the trial testimony which was sixteen tax returns and then when she was through with  she said well you know they set the guidelines and they're responsible well that was exactly what the st panel said isn't so if it shan't i understand that the government and went out and interviewed some people and had thirty four people who they said had fraudulent return this statement where we went out and interviewed misty davis and she said i didn't have a business and she said i don't have you know i should have gotten these business father who had nothing to do with his return so he would ask the court and i don't have time right this minute i have to do it in my rebuttal for an appeal bond because mr jenkins well he jenkins is still in jail he's going to be in jail until august tw twenty and he should have been way out because either he if limited on the returns or at least limited to the returns that were proven to have the fingerprints of fred and willie on them he would have gotten at most forty one months and the judge entered a low lowish guideline sentence that's a top forty one so we would ask the court when we come back thank you good morning good morning your honour's i'll kind of outnumbered over there aren't you and i'm sorry you're on to be outnumbered over there aren't it's unusual for them to have more than us good morning your honor alex islam we have united states st judge marne and judge it was a bomb i think you are correct i think that the panel in jenkins one did not give explicit instructions to judge evans as to how to conduct the recent insane and under the default rule in as judge rosenbaum highlighted in martina's instance and when this court vacates a criminal sentence it's gone the record is clear and the district court has the authority to hold a undertaken criminal activity with regard to the large number of returned the loss amount to show your honor yes yes i think i think the starting point if i could start with the standard it's subject a clearly erroneous review and the judge and he did it only to come up with a reasonable estimate and this court as it held in whitman must affirm the finding of the district court with respect to last as long as it is plausible in prints are on these you know dozens or hundreds of tax returns so if you took a different position at sentencing well i think i think your honor it is sort of like it's sort of to look at what was the scope at issue at trial versus sentencing i think the position at trial in work was in response to the specific defense that was raised at trial which is hey jury look there are other tax preparer names on the returns and that's at trial we said no that's not a defense because you've heard from the actual taxpayers and the taxpayers have indicated that the only individuals that you interacted with were willie and fred jenkins the government never took the position that that there were no other returns filed by other and employees and never took the position that the jenkins were brothers were only involved in the sixteen specific returns and i think your honor if i could could have a  moment i think it might help to walk through how the government got to its last calculation and the sentencing to show that every assumption in near to the to the benefit of the of the theory of fraud was that the schedule c the jenkins brothers were creating fraud on schedule c in order to create a loss which would then offset their the person's income and generate a fraudulent refund and so what the government did is instead looking at all five thousand dollars returns it only looked at the subset of returns that had schedule c's that was approximately two thousand eight hundred it then took a sample of those two thousand eight hundred and that sample was two hundred and eighty three returns in the way the government did that is they put all the returns  excel spreadsheet and they took every chance return and the palin's own expert at the recent instance said that was a correct way to to create a random sample then what the government it is said look our theory of the cases you were generating fraudulent losses in order to offset the income so we'll look at the subset of we'll look at the sample of two hundred and eighty three returns and if there are any returns that have a positive income will just assume that those are not  willy and fred where they responsible for the filing of returns the issue in jenkins one was whether or not the government's evidence with respect to advertising expenses and real estate costs and the fact that there wasn't depreciation was sufficient indic show fraud to show that the sample returns were fraudulent and the court said no and so what the government did not remained is and went out and said ok we will go talk to as many taxpayers as possible what about the argument th if you can't you couldn't have talked to mr davis for example because she wasn't a well thought on this earth and then you know talking to the father instead of the tax payer and in another instant your honor i think that was addressed at   jenkins brothers participated in the preparation of the tax returns out of alabama you know your honor i have to be honest that's the st time i'd heard about alabama was this morning i don't recall any testimony about alabama  i will be honest your honor i can simply not recall testimony as to alabama i'm not suggesting counsel misstated i just can't recall from the from the record where were the offices they were in the greater atlanta area and in fact the e those one hundred and eight people just to let you know and i mean i don't mean to interrupt and maybe my colleagues want to hear this i'm very familiar with i think we all are you are i know what i just i didn't i felt like it  singing judge evans expressed some confusion at times i i think that the briefing and the record do a very good job of explaining how it was reached ok so iran or then in that respect the evidence the defendant unreliable and the district i'll start with the last one well what about adding love to hear your thoughts on the statement made during sentencing about the political speech of the defendants so certainly your honor i think with respect to the it but you agree with me you can't punish somebody for even somebody who's committed a crime for political speech no doubt you're the government would never defend judge the governor would never take the position that a defendant should be punished more harshly because of their political speech i don't think that's what's happening here i think it was reflective of them being sovereign citizens not not respecting the government is reflective of the running a fraud in scheme they don't they they know they don't really respect the i r s they don't respect the tax laws i mean it is common in cases involving sovereign citizens that they try to inject their political beliefs into the case and making those kinds of comments because they could easily be construed as punishing somebody for political belief if they're they're not careful about how they make those comments one hundred percent your honor but in this case your position is that the comments went to the idea that this is a scribe to the sovereign citizen movement and so so it was relevant to determining intent and motive and then there and the relative culpability and then it was gone going and to the extent that there is any and i agree sort of at a context it can look it could be construed poorly it can be construed as the court may be starting to get crossed the line that it should not approach that it wasn't a small comment there was a lot of other factors driving the district court's sentencing ra process the district court had heard from the i r s agent who testified describe the process describe how agents went out and interviewed these these witnesses these tax payers and the asian himself went back into and called determination is entitled deference on appeal now one argument that they that the palace raise in the reply brief is this extrapolation issue citing united states versus jones that's a red herring your honour's what happened and what happened in jones what they're trying to argue here is because the government took out those fifty five returns from the sample set of two hundred and eighty three somehow that ruins the sample but that's different than what happened in jones what happened in jones it was a similar situation the government it was a medical  the government looked at a sample of p sample set of patient returns and they were only able to find parts of them they took all the returns they all the patient files that they were able to find fraudulent and the government said ok since one hundred percent of that s of the random sample were frauds and therefore will ply it across the entire income higher universe call one hundred percent project that's not what the government did here the government only calculated the fraud rate of the returns only based on those returns in which there was actually the taxpayer confirm there was fraud and that was that subset of three hundred and ninety nine returns and so the problem presented in jones isn't the problem presented it here and therefore the government's extrapolation is fine finally with respect to of activity may be used to infer the conduct and here the pattern activity was based on two main things these guys are the owners of this is a long sentence i'm sorry a small business and i'm apologize and the nature of the fraud that was looked at it was just the schedule c fraud for the foregoing reasons the government respectfully ask that you from their sentences thank you just i'm sorry i wanted to give you a chance to respond because i had asked opposing counsel about it seem like even though it might be close to the line that it was a sovereign citizen type of thing and that the court was using it to to explain motive intent and knowledge and i think judge martin brings up a good point that we have to be careful about these things and i wanted to give you an opportunity to respond and to let me know if you disagree that that's a fair interpretation of that respect but i do we do disagree with that i think that it's important to understand the context in which our the evidence are what judge evans was referring to when she made these comments and so they were to sort of different categories of information the st which we think is the bigger problem is that she was referring to when the brothers would take the clients and to their office and talk to them and she said i also thought it was a very negative indication that the defendants discussed political stuff with their clients meant to demean the government and i think that was referring to evidence that came out of trial that they were talking about like the illuminati and stuff like that and that political speech that's protected by the st amendment the stuff about the sovereign citizen did not come until much later that came at the st sentencing hearing where they they were they went pro se for the final sentencing hearing before the initial appeal and at that hearing they engaged in some limited i would say sovereign citizen rhetoric and so those are two different things and i think were talking to their clients about their opinions on the government and that is clearly protected under the st member and cannot be a basis to thank chris their sentence here thank you i appreciate that thank you i just want to all with respect to the officers in alabama the government must have forgotten that in the indictment on page two paragraph three they charged with several locations throughout the atlanta ga ga area and in alabama so they were officers in alabama a prosecutor also responded to the question about jointly undertaken criminal activity by referring to the trial testimony that the jenkins brothers created scrouge fraudulent schedule c that's our entire point they created sixteen fraudulent schedule c there is no evidence as to the creation of the universe of outside of those sixteen that they had anything to do with those schedule say and they also could not have had anything to do with two thousand eight hundred and thirty one returns that were all over atlanta and in alabama as for arguing the government argue about the pattern of activity there was no pattern of activity other than the sixteen charged indictment but even if there were none of the pattern of activity related to any of the other employees and related to any of the other tax returns so the government continues to try to obfuscate that issue by going with i guess judge  jenkins has spent thirty nine months in jail the top of his guidelines would be forty one dollars it with the good time that he would have gotten while he was in jail he should already be out if he had been sentenced only to the sixteen returns it would  twenty one to twenty seven months in prison if he had been sentenced only to the returns that were proven to have as we said his fingerprints on it or his brother's fingerprints it would have been twenty seven to thirty three months in jail or with hugo with the government's figure at it's very it's the audience are very helpful to us and we're you know proud of the work that you do for the system as we are of you so thank you all for come and the next case