player i want to bring up some issues that were addressed earlier and first of all the defendants were entitled to defend the charges as filed the charges in this case were filed that they were false statements in the you are l's directed to the specific lenders and therefore they were material to these specific lenders so that the case as charged the the people the the defendants were entitled to put on their evidence the expert testimony to rebut those specific charges the government could charge this case in several ways and judge it the regulators they could have charged the case in terms of whether the statements were material regulators or whether they were material to the ultimate buyers but they didn't charge the case that way  o and in particular in our particular case the issue of materiality was well preserved i believe i believe you would agree to that also in terms of the testimony  significant or not significant our lawyers went back after these questions a series of significant not significant and went back and chambers and asked the judge to rethink his can his ruling on the and women emotion and pro and ask to be asked about the security i say ssion process etc i know there's a harmless error issue that's been brought up because they committed fraud you know that they lied and so how should they you know why should they get off well they should be able to go before a jury and have the jury make that decision and on the other hand as i said before they if the government had charged it in a different way they wouldn't be necessarily getting off or maybe they will maybe they won't if the if the jury actually hears this materiality evidence i think one of the clear insights that i noticed in this particular case as i was going through the record was how to judge mendez actually changed his view of the evidence from the until he won't testify why the falsified documents alleged to have been used his case i'm not sure i have explained the conduct of the lending institutions as well as the securitization process and what happened in the financial market further he will explain why the lending institutions and i take to mean that particular he says earlier professor partner will testify as an expert in the mortgage meltdown involving the lending institutions involved in the indictment and discovery the particular instructions and then it goes on  d says that he was going to explain the hundred of the lending institutions meaning those lending institutions right why they would accept loans that were clearly falsifying and  victims in the indictment parentheses the lending institutions were not to fraud and so he's testifying about the particular lending institutions it can be read that way can also be read generally so it's you know it's of short statement but i think it can be read generally and  particularly during the arguments council made it very clear that it was about the what was going on in the industry the mortgage industry generally at the time it's going to be part of his testimony nobody was pressured and knew what was going to happen  lindsay at the time knew that that's how the evidence would come out but i think that the offer was was fairly general in terms of what was going to testify to an industry standards were definitely going to be a part of it institutions he analogized it to the banks putting money on the porch and someone coming up and stealing the money off the porch and he said just because you steal the money off the porch just because it's negligently it laid on the porch doesn't mean that it's material i mean that that isn't a crime to steal it by the time we regard to sentencing and had read the sean martin report his analogy changed and his analogy changed because he realized how involved the lent these particular lending institutions were in this case and his new analogy was the lending institution just said to these people my client you know i'm i'm opening up the door you just come in and take it in so that he could defraud someone else down the road so it's imperative that the people the jury receive some context of what was going on in the mortgage industry at the time and how far it went down the line and at the time it went way down the line and it may have even gone beyond the regulators and the victims the true victims of this case were not mentioned not charge and was not before the jury and so that's basically that mentioned that charge meaning were not they're not an indictment they use the indictment alleged against these particular lenders only it did not talk about defrauding next group of people down the line or you and me in our mortgages in our case for a one case you please the court in this barrymore's i represent every new in this case what may be relieved to learn that i'm not going to be discussing lindsay at all to reality will not play a part in this argument what will play a part in this argument is the government's introduction of force evidence two areas of false evidence one they introduced forged signatures of my client mr new second they put a witness on who said she worked at the firm from two thousand and five to two thousand and six unfortunately the the only paychecks for that witness were in two thousand and nine and we called a witness who testified that she was in fact the secretary the case in any of that right in the whether it was his signature or not if the government put on somebody to say that this was in fact his signature and to prove it that would be one thing but they didn't do that the question is did they use the fact that it was missing a chair and some fashion of course they did have first of all every witness who testified about any of the real estate transactions s and who is the person who interviewed in our new direct your attention to page so and so does that reflect her new yes and that was done over and and is the application that was made and it was pertinent to the case well if the court is to suggest i'm not suggesting that the document itself was any missile way i'm suggesting is that document could have been introduced with the government saying and the signature by the way we have reason to believe that that was not signed by mr knew then problem solved because then it wouldn't be the jury it's not an answer to say wouldn't ultimately did it actually in the closing argument well yeah but that's a little late in a dollar short i mean the bottom line is in closing argument they conceded that it was false but then they argued well meaning he wasn't certain what the higher percent certainty so they try to get best of both worlds but  looking at a document with a signature the bottom is going to assume that it's introduced for the purpose of showing that he signed the document and he didn't and the government seems to think that's ok because the jury saw you you didn't  pretty high standard to meet troop so what if we were looking at it under a plane or review tell me how it affected the jury's verdict well first of all when you introduce false evidence that's in a different category than an ordinary misconduct and the question is not whether or not it did influence the jury a would influence the jury but whether it could influence the jury is that sure if the government had the say here's this document and by the way we have that doesn't prove that he knew that i was and i am doesn't prove that he knew there was anything wrong with the source of the money you know his work on the brokers always kick back some of the fee to the broker there's nothing wrong with that what was wrong is that if the if the if the loans were secured with him false information the other than the government did is that it intrigued introduced the testimony of a witness that said that she worked there during the time of the indictment well it turns out she didn't work there in terms it i mean it was the government's answer well that she gave in testimony that's corroborated in many respects that's nice except it's all false because she said it all happened in two thousand and five and two thousand and six and she didn't work there then she  obvious that in terms of the plane error doctrine when you have the government deliberately introducing two items of evidence extensive items that this is not a passing remark and and basic rules as a prosecutor i would hope is you don't introduce false evidence and this case introduce false evidence they argued the truth of the false evidence and they secured a conviction i would hope that in this country under our constitution that that wouldn't be allowed that a conviction wouldn't be allowed to stand on false evidence knowingly introduced by the government i have saved thirty seconds of whatever's worth that anyone has lost money at all and even if there was any loss or it's going to be a future laws it's going to be nowhere near the amount of the original principal balance distribution but he did credit i don't see how using that formula in a nice fact would be a reasonable estimate of the laws of the actual loss in the case so that's our basic argument on the loss and i don't know as a general matter this methodology has been approved it has been approved in in general not on any facts there are close to our facts not in but i don't believe there is any case that certainly not and i found one that was cited where you have an expert saying because there were securitized you can trace that there was ever a loss so it's not a question of who lost i understand the case to say that if it's between the bank and the bank with an issue we have to figure this out but i think where would you problem the expert is saying you cannot determine that anyone has lost money but i think that's a fundamental problem for this me y if you can say that anyone has lost money and certainly not in any sing approximating the value of the original long how can this be a reasonable estimate of the loss so do you think the loss was well i think one they profit at how the profit and i think you know that i don't think the court made specific findings but their allegations were for example for my client it was anywhere between one point two one point five million which would drop the  so it was something that the court could have used if you can ascertain actual loss you could go to gain the guidelines allow this and i think that might have been as reasonable as you're going to get if the government is unable to produce any contrary evidence and there apparently weren't in any of the cases it sounds like only an hour's journey in hours there was no contrary evidence that maybe gain is the best approximation journal going to get here and you'd still you know it would be methodology would be appropriate in this particular case let me ask you so it's actually lost some of the guideline that applies here is defined as means the reason we foreseeable harm rather possibility is that it means reasonably foreseeable harm whether the harm happened or not well i think that would if there was a definition of actual us what was the difference between that and the laws i think what the court describe nature that's not our problem i think the government cannot prove hasn't proven that there was a loss to somebody and certainly not anywhere close to what the original principle bounces so if actual loss has to mean actual loss that's that's my position as you have and your suggestion that it could be measured by the gain of the defendant is separate prevention recovered in sales to third parties this is consistent with this court's case law in morris high miss and young the high miss case involved cases situations where loans were resold the young case  dealt with a case of securitization and there this court stated that taking the principal balance on the loan minus any money recovered from the sale of the property was an appropriate approach in terms of  in your honor there is a loss that is spread amongst many different lenders in this scenario so there is a reasonably forseeable puna harry harm here what the issue is just who suffered specifically that harm and for example the eighth circuit specifically found in a case with respect to securitization that although securitization may make it more difficult to allocate losses among individual banks or investors the district court's method produced a reasonable estimate of loss so the eighth circuit has pacifically address this case and with respect to actual loss the seventh circuit quoted that language an angle man and calculated loss in a similar fashion as this court has done repeatedly and us the eighth circuit has done the first circuit specifically is said provided that the total actual loss is reasonably forseeable its apportionment as between the original lender and a successor lender or other downstream purchaser does not matter so this is the way the court calculated loss here is consistent with this court's case law and case law in other circuits and honestly to hold that the district court's loss calculation was inappropriate in this case would create a circuit split here and with respect to professor martin's report which counsel referenced even there professor martin conceded that there may be investors who lost a small albeit collectively a large amount of money even he's admitting there's a loss here he's just admitting that he's just saying it was so spread out that it's so hard to calculate so the united states ask that the court calculate affirmed the district court's calculation of loss and it's appropriate under what morris says that defendants who progeny into some financial institutions just  risk of lending to an unqualified borrower are responsible for the natural consequences of their fraudulent conduct i may go in reverse order in terms of these arguments i'm now going to move on to whether myself and my co repeatedly since two thousand and eleven that she worked at the k tech services in two thousand and six and two thousand and seven my understanding of the argument is that you had the checks and you could have and should have left and she actually must change your  honor the checks were spread throughout discovery and honestly to this day we still don't know what those checks are for those checks are for example other woman party for the other woman to the other  services in two thousand and six and two thousand and seven she was adamant all about that on the stand she talked about what she saw there what she saw was corroborated by witness after witness after witness for example she saw  manco she even knew the amount of money he was charging them to create fake bank statements he corroborated her testimony she saw the various witnesses come in to get their tax returns done and also to do real estate those witnesses corroborate during that time period that they were coming in to get their tax returns done and also to buy houses in this scheme so again and again as we  reach we discussed in the brief misleads testimony is corroborated on the other hand we have missed ali who came in and testified that she was the receptionist but she saw no real estate there that's just not believable your interview her before her testimony and use the answering bruces it might be possible that the first time the family was interviewed by the government was really january thirty first two thousand and fifteen between one and one ten pm via the telephone which was well your honor the disk i the defendants accused us of knowingly sponsoring purchased testimony they accused us in their opening brief of speaking with ali prior to the struggle and knowing that what something which is strange for a geology of what you believe happened it was not in a record yes your honor and the reason it's not in the record is because none of the defense the trial counsel and none of the defense counsel raised  argument at the district court level so we couldn't get stuff like that into the record because it wasn't an issue no one accused us of sponsoring certain overall response to this and it should be a twenty to fifty five we should you know address in your honor i don't think that this is warranted that this argument is warranted of your time at this time then with respect to aaron news testimony i'm not testimony with respect to his signature it was not plain error here in a mortgage fraud to introduce these loan applications the defendants had even stipulated to their admission the loan applications we weren't arguing here that he had signed these loan applications in fact at applications or not for example even the defendant's expert testified that one of the one applications look consistent with the air and news signature so we had that it was a virtual certainty as to twelve or thirteen  he said that it was a virtual certainty with respect to the selected ones that were given to him and but with respect to that testimony he didn't say it was certain and in addition he testified that people can sign their names in different working forge your honor but that even that even shows the issue for example victor dumptruck the other broker testified that his signature was forged however when the f b i went to interview him and  was he was shown these loan applications he said that's not my signature he told them that whereas here is a situation where when the f b i went to interview mr new he was shown twelve fraudulent loan applications while the i agent does not remember whether he specifically pointed to the signature and said is this your signature we don't have aaron new saying oh my gosh that's not my signature we don't have air a new showing the same not how we proof that era knew was guilty of this crime we prove that because he was getting all of these commissions commission after commission on fraudulent loan transaction he received payments from shell accounts that were used  his scheme there was testimony from more than one witness regarding his involvement in the fraud he was a straw buyer himself on one of the transactions it was proven that he lied to the f b i and aaron knew took the stand in this case and the court and the jury did not find him credible that wasn't some chunk of the evidence that he his name appeared as interviewer on all of these forms but in fact he doesn't speak russian and he didn't interview anybody well we would ask questions such as who is the mortgage broker for this loan application or who is listed as the interviewer on this loan out when he was waiting for her in the interview with the same person or a different person they could be the same person or they could not be has to approve the loan applications and there is testimony from various different witnesses with respect to his responsibility listed as and did he ever suggest that he was a mortgage broker in these you know he never did now going back to the aspect with respect to the expert testimony in this case this is another case where the trial court in this job i mean the trial court in this case did its job it excluded an expert that was to testify regarding the reliance on negligence of the specific lenders in this case this their expert mr partnoy was not to testify to general lending standards in the mortgage industry the court's ruling is appropriate under this court it's ruling in united states versus lynsey in the seven circuits ruling invests his stock on the trial court understood in this case of the expert was to testify regarding the reliance and negligence of victims in this case and that's the evidence that excluded you can look to the s c r forty five to forty nine to see what exactly it excluded it held actually by the victim in this case it's alleged to be first franklin financial is a relevant to the element of materiality the defendant clearly cannot point to loose lending practices of the victim financial institutions to establish a defense to the charges of wire fraud or conspiracy to commit wire fraud it referred to the latest case as a case with nearly identical circumstances as i discussed earlier today that latest case is a case where the defendant defendants were trying to say that bank of america and the other banks to him false statements were made  negligent and intentionally disregarded information in the latest case that the court held that the fact that bank of america and those other banks to false statements were made in that case did not rely on the false statements gave no way to the defendants false statements or negligent to the point of complicity was not exculpatory or relevant in a wire fraud case defendants in this case are just trying to rewrite the record partnoy was not to testify about general lending standards in the mortgage they specifically kabi out what their testimony was going to be and narrowed it to those alleged victims in the entitlement their jury instruction shows what they wanted to do then you must determine whether the false statements or facts  d and had a natural tendency to influence or capable infimum flew in saying the mortgage lending institution to part with money or property during the time period between december two thousand and six and december two thousand and seven even defendants in the reply brief concede that a conscientious attorney would naturally have tailored his or her proffer of expert testimony to the facts of the case at bar that's what they did they were trying to prove to present testimony with respect to the specific lenders and that's just not a defense to wire fraud and what they do in order to promote their argument their current argument is they refer to michael lewis books they refer to the martin report martin report was not even in front of the court during this case and they do cute things in their briefs like for example put industry standards into the language that they're using for what they're noticed was that just was not in their notice they were not presenting evidence of industry standards in the national mortgage industry the united states has a harmless error should you decide that there was error in this case and the harmless error is three fold first of all it goes to the evidence in this case but it also goes to whatever any expert witness was going to testify to this was not a case where any expert was going to say that it didn't matter on the loan application what was written down the occupancy box still needed to be checked certain income needed to be given any expert who testified would have admitted that these false statements in this case were material in addition this was a case where the defendants were not precluded from making a defense the defense attorneys cross examined ms hanson at length they asked whether first franklin was a repeatable lending institution they asked about interest only in balloon payments loans they asked whether a loan was sub brime or not they asked whether anyone checked the representations and supporting documentation they asked about first franklin selling loans into the secondary market and whether first franklin still owned any of the loans involved in this case they got to ask about securitization they were able to solicit testimony from a mr me chose who had been involved in this case he was also a licensed real estate agent who provided  and where all that needed to be done was to put the company name and provide a list letter from the c p a and that new documentation was needed he testified to various different aspects of the mortgage industry at the time they called they themselves called a first franklin underwriter on the loans and questioned him about whether he checked what he checked and what he didn't check they cost cross the representative from the dental board about how easy it was check certain recommend representations they were allowed to question borrowers about what financial entity own the loans and they argued in closing banks we h people testifying in this case that the people were banks were giving money away they argued that there were commissions they argued that the banks got appraisals they argued everybody made money along the way even with all of this testimony about the negligence of lenders of with respect to first franklin and the state of the mortgage industry at the time the jury still convicted so if you look at what they were able to present in this case which was a very robust case with respect to whether certain banks were bad and in addition what any testimony would have been and then if you also look at the facts of this case once again these are not stated income loans the defendants were doctoring document after document after document the lenders were requiring these thinks statements that lenders were requiring these tax returns when you look at all of that beyond a reasonable doubt chance was that they made no agreeing to anything but they're a minimal inquiry into your employment and appraisal but they required certain for supporting documentation so for example they required twelve months of bank statements so both fear could make i had to fake these thank statements they paid andre kim in order to get them all fake to support the income representations in other loans for example both of the euro and were working in attack shop so tax returns were doctored up in order to support the representations in other cases for example to use were doctored or ten ninety nine for doctored or they created business licenses or they created fake rental agreements in order to support brattle rental income and here are document after document was submitted to lenders in order to support these false statements and once again this is a case where the defendants themselves admitted that these statements were material we have once again well this is a small what does that have to do with a mature reality question you had to lie a lot in order to get these loans your honor and that's why it matters well these people had to lie a lot because there were very poor and they rather then maybe a lesser amount of still would have gotten the loan but i don't know i still don't get what it has to do with jury ali well if the banks didn't care about income or assets the lives wouldn't have had to be so large for example you could have just said oh well i'm a fixed zero dollars or i make a thousand dollars but your whole point is that they were just going from a thousand dollars two to a reasonable normal income they were going from zero dollars to a very high income and th i know that i'm out of time to use the court have any additional questions i think so thank you much for your argument thank you very much you will hear the bottle is buchanan you have one minute i know you make good use of i will even though no one knew at the time that a future case like lindsay would be coming out to set the standards for expert testimony in this context the appellant's said to the court in the argument for mr portman's testimony that having an accurate historical context regarding the market industry at the time of the alleged offense would be critical in the determination of what i went to see pretty quickly a lot more of this came out in the cross examination of ms hanson in this case than in the others it seemed that there was a lot of it they came in so why wasn't there good enough a lot of the material about the you know they didn't care and will never check anything in and and then this was all going on in the industry at the time and so on because it wasn't bits and pieces it wasn't put together in a cogent tense testimony of an expert witness the jury couldn't follow along these little snippets here and there and also they you know they did at to ask the judge to have some leeway on reliance on the reliance issue and he said no and they repeated their request for the for the expert testimony because expert testimony is a whole lot different than a couple of cross examination questions when there aren't a couple there are quite a lot there were there were some but it wasn't it wasn't enough to meet the burden of the expert testimony that doesn't meet the lindsay standard under lynsey the jury should have been able to hear the expert testimony on why the false statements or the you are on the you are a were material to these lenders given the situation in the industry at the time and not just some individual questions cross examination questions thank you thank  you have thirty seconds now i just want to respond to a couple of things first of all the government says well we had no idea what these checks were about that's nonsense twenty four the checks have to pay period listed claim as a natural claim at the trial of a yes but we raised the substance of it namely that we put on evidence that said that the testimony in the evidence produced by the government was false so it's sort of in a hazy area between plane  and not plane air because the purpose of plane air rule is that the court should be aware of the issue so it can make a decision here that the issues were joint they were there the court knew that the government had presented evidence as expert testimony that the trash can because it was enraged it was raised they didn't make a formal nap to motion that's right but on the other hand if there's anything that's plainer in our system of government is when the government introduces force evidence and tries to get a conviction but the government maintains that it could explain some of this since anybody have raised it so i repeat what i asked before why isn't this just not an appropriate issue on appeal because the fact of the matter is that the government didn't try to explain it the contest it the government responded to the allegation that they used the witness who testified in the tahlia we testify as to the wrong period of time because of the checks they didn't bring any contrary evidence what they did in their brief from what they did here now is a look at a reliable witness years yeah as the stuff that happened outside the period of indictment i think it's established beyond any reasonable doubt that she didn't work there during the period of time in the ind was the secretary before so there's no question that she wasn't there as a as she testified and she didn't was in a position to see what she said during the time of the indictment first maybe didn't work there the second may not be true that well it's an imposition she now has the things that would she testified this happened at a certain time she wasn't there at that time therefore it can't be true if it happened that another star and as a secretary perhaps but it isn't that she wasn't there well there now we're creating our own evidence your honor i mean i thought that the evidence was that she knew these people shot at what time she was there some of the time quite or apart from whether she worked there actually the only evidence that she was there and any other time came from the secretary who was there who said she came in for lunch every now and then other than that the only testimony as to when she was present in the office was her false testimony that she was there during the period of the indictment