for charles up to growth and how he's going to divide up the argument or are you going to divide we are going to divide it up that's what i'm addressing now i'm going to test our address the court first on the mens rea issue which has been presented by  you want to divide that up in terms of time we were thinking of fairly equally so i was more in my minutes each five minutes each holding to see if i managed for a model correct five five five ok now that we have the housekeeping out of the way could you put twenty minutes presenting a false claim for to the government the charge was eighteen u s c two eighty seven which prohibits false fictitious or fraudulent claims on the government the court proceeded with a  three prongs essentially in regards to ms moon and mr up the grove they were acquitted under the fraudulent prong but that convicted under the false statement prong the underlying statement here we believe it significant that what the indictment alleged and what the jury really focused on was that the claim that the defendant submitted fraudulent tax returns if they were prosecuted for submitting those fraudulent tax returns willfulness would definitely appl it requires knowledge that you're you're violating the law or doing something that the law forbids more than just knowledge that it is a false return yes it would be good because i think the problem with just a false return is the fed in the banking system in one office fairly convoluted but those constituted interest that could be claimed as refunds on tax returns i mean clearly those weren't interest but i know ms moon and i believe some of the other defendants had good faith beliefs that it was interest and they believed in good faith that when they were seventy those returns that they were they were legitimate that was a legitimate way to do so in the jury was instructed with respect to falsity that it was that the but that the jury was properly instructed on the willfulness requirement they didn't explicitly say you have to be instructed on willfulness but they said that the jury was properly instructed on muslims and door to the issue  whether there was a denial of a good faith instruction that the court said that the favorite issue of the good faith instruction was excused because the jury was basically instructed on the intent to defraud and willfulness were required and we agree that intent of fraud to defraud is not required but we believe that that will fullness should be and the issues are all really interrelated and i think that there is a difference between an intent to defraud or or or willful act and knowledge of something is false and i think that that's illustrated by the jury's verdict here they distinguish between projects and false statements some defendants were convicted of project statements some convicted of  false statements some conviction of both but that they clearly delineated between fraudulent statements and false statements based on essential at the same the same evidence and we think also that many other  but turning back to the prejudice that arose from this bolano says outburst the question for this court is whether the episode presented an unacceptable risk of impermissible factors coming into play in our position on behalf of all three defendants is that both what happened during and in the presence of the jury and then what happened subsequently when they were called back in when the court gave what it terms and admonition to the jury and then the remainder of the trial in terms of the defense theory as your honor points out it was actually two more than two minutes that timestamp other video reveals uninterrupted by the court in the presence of the jury with the other defendants and counsel really surprised then subsequent to that the jury went out for this quick quick break and the court brought them back in and we were all really surprised by what happened and now we need some time to address it then there was a three hour break where the jury had nothing to do other than either go to lunch or kind of mull over what had the bizarre episode that had just happened so  three hour half day essentially delay they come back and my client who had just proceeded to the witness box to give testimony and then had to come down because the episode happened he then immediately testified and so what this architect d one sixty nine and what he says the first thing he says well he gave the jury sort of the brief one at that mini break and then there was the two and a half hour break but what he said after the two and a half hour break he said all right the jury is present members of the jury thank you for your patience obviously we had an unusual situation here i did want to give all the parties an opportunity to reassess and proceed forward so we don't have any issues that arise later he then tells the jury to put it out of their mind he says i'm so concerned i'm concerned you may be so upset at what was done and said it would prejudice the other defendants in the action he says then if anyone had any concerns they should raise them with according to visually but but really where we see the prejudice is that the defense theory was based on the fact that she had given each of them advice that they had followed and as my colleague just asserted it was based on this good faith reliance on that it's really hard to say that the jury could then compartmentalize and find reason wallace and credibility based on what had just happened with admonition my client mr up to then gets up to testify and try to explain this it's really hard to put that out of your mind as a juror and we know from the many cases that the courts have said even where a court gives that kind of admonition and says you know if if you put this out of your mind there is such a toxic risk of this that we don't even we can even disk jurors saying that they're not prejudiced that that that a germ a b and defense counsel actually made this argument there was also an element of peer pressure by not individually polling them but simply asking them to raise their hand if they felt like they were potentially going to become impartial or take for the side and so our argument really is in addition to the outburst you had this scenario then subsequently architect that was really prejudicial and it really went to the crux of the defense theory of the case which was reliance on the very codefendant who had engaged in the outburst i do have a question about the acceptance but i don't want to interrupt if you want to talk  pitch for eighty five and then that turned out there wasn't any forty five and that and that i did six seventy five but that's not up to gross testimony it's attorney argument so if you know him and you could tell us or maybe you could submit quickly afterwards where it is up to where  grover actually accepted responsibility at trial for putting false information in his return and i'll be asking the government to concede that yes and so the falsity in terms of he understood at the time he gave his  testimony that it was not accurate but that not that at the time that he he relied on a good face defense that he what he believed that at the time that he is sorted and the time he filed the amended return but then he understood that the advice actually wasn't accurate and so now he understands the interest was not actually interest or deductible and so that that is where we have a disagreement with with with that we have not accepting responsibility and subsequent to trial he has also  undertaken a lot of efforts to remedy that and negotiated with the i r s to make payments and so he has certainly acknowledge that in all the subsequent conduct with that which they just report found to be sincere in his efforts to do that but he but he didn't at trial that at the time he filed it he didn't know it was false and so that was his defense that he filed it in good faith and in reliance on the advice that he had received well he didn't know that there was false information it's not a false returns not a ta claim that's of false information if he says i was entitle to six million dollars of interest he believed that to be true at the time so would you say yes and where did he say that and i don't have that i can try to find out for rebuttal the exact on good afternoon your honour's andrius st joy and for the defendant roig holmes i first very briefly like to touch on the the mistrial issue this case was was really largely about it intent the actual the actual return submitted weren't really there was really no dispute about that the problem with miss ball on a says outburst was that it showed her to be so incredibly irrational and she also specifically linked herself to all the defendants including my client mr columns and so this gave the jurors the impression that there was probably really no rational basis for mr combs his actions and that's why mr combs was so prejudiced by what miss miss blondness did and i think it was particularly prejudicial to mr combs because he didn't testify he he exercised his right not to testify and so the impression that the jury got of mr combs came from mrs miscible on ases outburst and her linking of of her thoughts and activities with that of mr combs and so i just wanted to touch on the prejudice particular to my client and my recollection is not just i know i did a double of that she outburst and also talked about mental health issues that may have had so i just wanted to talk about prejudice as to my client i then want to go on to my sentencing issue and the first thing i'd like to do is i'd like to apologize to the court the court may have noticed that i uploaded the wrong p s r with the excerpts of record and i did not notice that mistake until today i deeply apologize for that also the references in my briefing are to the original p s r as opposed to the final so with that said the thrust of my sentencing argument remains the same  sentially what the district court did was it sentenced miss mr combs based on the unsupported belief that mr combs had a long history of a criminal intent to violate  excerpts of record page twenty two the very first prep paragraph he talks about mr combs criminal actions and for them to be criminal they have to have intact a criminal intent and missed the record simply does not support that and if you simply look at the facts out i'll just briefly go through them particularly as found in the supplemental e r with respect to the tax court's decision starting at the supplemental e r one fifty nine this all comes from one tax year ok this nineteen ninety four all right mr combs albeit a few years late but he's trying to do the right thing all right when he files it the he discovers for the first time that the trusts that two attorneys and two c p a set up for him were not valid and so he owes taxes on approximately a little less than three hundred thousand dollars he further finds out that the  s does not allow any of the business deductions that he took now these businesses were the income is primarily from two to day cares ok day cares which obviously have quite a bit of business expenses in terms of employees in terms of of physical structure mr combs was not allowed to deduct any of those expenses because the court found that he wasn't able to adequately substantiate them so he is now on the hook for all of for every penny of this money that he really simply never had and that's why he kept repeating i was taxed on money i never had and that's because this income this suppose that income really was mainly business expenses for his employees so so this set up a really horrible chain of events for him for m combs he doesn't have any money he obviously doesn't try to trust the professionals anymore because of the trust that they set up for him and so he set about a course of action to try to do the best he can to manage this situation the first thing he does one of the first things he does is he goes to tax court and he tries to to explain what happened he doesn't explain well he does he the court did ultimately find him to not be forthcoming and in terms of filings but again these are not these are not examples of criminal intent to violate may please the court grant raven for the united states good afternoon your honors if you could keep your voice up i would appreciate it yes your honor on the first issue of the outburst the fundamental question is whether or not the district court abused its just a discretion and how responded to that outburst and the answer is that the court did not abuse its discretion it did everything that it could have been expected to do in response to it short of  mistrial correct your honor and i think factually it's an individual question here jurors well i think that is for the the court to decide and obviously this court gives deference to the district judge in determining how to deal with the jury and the district judge specifically said that he did not want to individually why dear at the jurors because he thought it would add additional attention to the often ask the jury generally well ladies in germany you have any concerns about what happened what we just witnessed in the courtroom you know realistically the jurors are going to judge i have big problem with what happened it doesn't really happen that way sometimes the importantly here this was about halfway through the trial right there was about two and i haven't he wanted to or mistrial and that may be the case but we were about there were two and a half days of why dear to pick this juror the judge was quite familiar with the jurors he specifically noted on the record that he was and that he believed that if there were any concerns he would know that the cautionary during his testimony the thrust of his defense was not that there was this i think as your honor said crazy woman and i did what she told me to do i relied on her and therefore i didn't have the intent that really wasn't the thrust of his defense the facts that came out of trial was that there was a group of people who were doing this but one of us of course was one of them and for mr up for grabs tax return for example the testimony from a cooperating witness for the government and for mr upper grow is that a group of them filled out his tax form with him and it wasn't pinned exclusively on bill on a house so i don't agree with the defense's characterization of what their defense was here as for the other defendants they didn't testify so essentially there was no defense obviously that was their prerogative to do so but they can't argue that well my defense was that i relied on belong to us because that's not what happened and in the government's case  we had a cooperating witness who was part of that core group who gave the jury a flavor of what miss bolanos was like it didn't depict her has some sort of to use the word crazy again it she was one of the group who were sovereign citizens that wasn't his actual language but their sovereign citizens or tax protestors and they were trying to steal money from the government by submitting these outlandish claims so the idea that there's such an extreme prejudice because the entire defense was based on mis bolanos is inappropriate guidance and counsel is not correct and and during  pin most of the blame on tax professionals he had been with on lawyers and on others in their sovereign citizen group not miscible on us so i don't think the prejudice  inertia to any of these defendants by the because somehow bill on us was the ringleader because that really wasn't what their defense was i think some other important facts to look at is that the jury didn't just give a blanket verdict all of these all of the verdicts for the individual defendants were different the government the the judge allowed the jury to decide on the false fictitious or fraudulent prongs and they were individual determinations for each defendant i think that shows that this didn't somehow overwhelm the jurors to the point where they said they're all guilty because that's not what happened even miss belong to her self was acquitted on to come on two counts  based on all of those facts i don't think the court abused its discretion and how it handled this and i don't think any of the fundamental rights that the defendants had to to a fair trial were or impinged by by this outburst and the bamberger  that passive defendants which is how they describe the non outburst defendant that the prejudice doesn't and nurture to them some of the cases cited by the defense imply that the prejudice can go towards the passive defendants but in every single case that the defense sites on the outbursts those are really extreme set of facts that are not the same as the facts are here in every one of those cases there was either violence in front of the jury there were repeated out s the judge failed to do something and the one case your honour's have to look at is mccormick which isn't the one nine circuit case and it that is on point and in mccormick it says that the district judges prompt handling of the matter an appropriate cautionary struction instruction resolves the prejudice and even in mccormick i think the district judge there did something that was probably a little bit out of line which is he said in front here she said i'm from the jury i find you in contempt judges she did not do that here he acted extraordinarily calm he responded to the situation he dismissed the jurors and it was a very short period of time in terms of it being written out it was three or four paragraphs and if you look at the substance of what she said really what she was doing was attacking the government and the court she was insane charles up her grove is guilty and i'm innocent she said the government and the court are crooks and they're framing us so the substance of what she says is expulsion it's not in copa tory now certainly the argument they make the argument that it overwhelmed the judgment of the defense of the jury and if there are any further questions on the outbursts i'd like to move on to willfulness and time for acceptance of responsibility yes i'd like to your honor the question is does willfulness applied to two eight seven and the case law in this court is that it doesn't we have recent unpublished decisions saying that it doesn't and they rely on older published decisions saying wilfulness is not an element of two eight seven now what the defense is trying or what the appellant's are trying to do is they're stuck there trying to stitch together this element with some scraps that they found in these other cases in the door to each case and in nash which is an out of circuit case and they're saying look we can read into the fact that the ninth circuit that this court approved the district court's jury instructions which reference we therefore can read willfulness as an element into this crime it's not statutorily the language isn't there the statute to wait seven itself was was split apart from the false statements from one thousand and one in  forty the false statements crime requires willfulness that's the language that congress put into that statute and when they split off from two eight seven congress did not put willfulness into the statute and and it and other courts have noted that this is because the filing of a claim implies some level of willfulness so it therefore doesn't have to be put explicitly into it it's not just making some random statement such as such as under false statements here it's you're making a claim and it's going to the government and there's a willfulness implied in that that's another reason why there really isn't any wilfulness is not an element to this offense what about a good faith instruction they asked for a instruction number one i think good faith flows from there being a willfulness as an element because the idea the idea is all i'm willing to even irrespective you have to have willfulness in order to have a good faith instruction the fee arrow slike defense which is related to good faith which is basically the idea that well the idea that we're going to read will into this type of statute because it's a complex regulatory scheme and therefore good faith a good faith defense should apply and this court said into four that that two eight seven and it has not been read into two eight court and the jury instructions that were provided to the jury in this case discuss what what actually is a good faith reliance because they were instructed on good faith reliance just not as to the false and fictitious prongs and it's not that it's you can just disagree with the law it's that you had to have an actual belief that what you were doing was somehow not morally wrong or not in violation of the law and i think if you allow for good faith just for unknowingly crime it doesn't apply can you hypothesize how someone could make a knowing false statement in good faith how someone can make a statement they knew to be false in good  question sure i think the way in theory it would go to this idea that i say it goes more towards the idea that you did you don't but you but you knew that the information you were putting on that tax return was false but because of your belief system you didn't know that you were actually committing some sort of crime but i think it gets challenging to think about what a good faith defense would be for knowing crime yes and in national that's correct and even so dora to each states that if the jury is correctly instructed on the specific intent then it's not reversible error to have not and because it was knowingly because they were properly instructed on the men on the intent requirement it didn't matter that they weren't provided with a good faith defense i also say that the defendants were still free because they the good faith was allowed for the fraudulent prong they were still free to present a good faith defense factually and i believe that's what mr up to grove was trying to do  and there are there is a case where there are some cases that say that as long as there is some ability for a defense to for a defendant to factually presented at trial it doesn't matter whether or not the jury's instructed on good fa address i ask my acceptance of responsibility question is that the government's view that mr up there grove did in fact accept responsibility as a factual matter at trial and say i  didn't know that i was submitting a false statement to the government no your honor and mr after grove acknowledged the act but he factually argued that he didn't have the intent the u s sentencing guidelines state that that is not acceptance and this court stayed in and burros that asserting a complete defense based on lack of intent is not acceptance  for that reason the government i do not think that that mr up there grove should have received the reduction for acceptance of responsibility use this go to the other side the moment but the exceptions responsibility issue troubles me a little bit the district judge says there's no accepting responsibility because he denied in his testimony the factual he says that's not necessarily enough you're going to look for the rest of the record is there anything else in the record goes to whether he was excepted responsibility your honor there there are competing facts because prior to trial and during trial and even to some extent at the sentencing there's a lot of blame put on others he does say mr after grove does testify at trial  now i understand it was a false claim but at the time i didn't and at sentencing he essentially says the same thing and he says i'm trying to fix my issues with the i r s but conclusion i would be troubled i think under three one point one of the guidelines and under burroughs that is all that the court had to determine nonetheless if you look at the entire scope of the sentencing the judge went through almost every and extensive amount of factors in in determining what the sense would be which was ultimately a twelve month downward variance and i think the court factually covered almost every aspect who has ever said that wilfulness should be included has ever been told no that's not a no there's no ninth circuit authority on that and i think it relates to willfulness a good faith related and regards to the jury instruction the government mention that the court advised th was that she proffered pretrial that she intended to pursue a good faith defense in the court rejected that they said no there is no good faith on making a false statement only on a fictitious statement how do you make a false statement to the government in good faith and knowingly false statement to the government of the size how that how how you could do such a thing well she she would have argued that because of the way she was an instructor by somebody she believed was a tax professional who i think that the government acknowledges they had a cooperating witness who said that in these meetings that the tax plans were put forth as a legitimate tax plan it wasn't put forth that's a big for a false statement but the false statement she would have testified that she she was found guilty but she did not testify she would have testified that she did not believe it was a false because she believed based on her good faith reliance on the that the tax advice she received that it was a legitimate tax tax tax a matter that she was submitting so she would have argued that it was not a false statement but the problem is that she would have been prohibited from arguing that in regard to the false prong only the fictitious problem is what that would apply to so basically you're stuck because the good faith doesn't apply to the false the false prong that she was thank you your honor just to quickly go through some of the points on the outburst issue i'm not sure i agree with the characterization that the judge quickly dismissed the jury it went on for several pages without the court actually interrupting ms bolanos in the video shows that she was up and down and the other defendants were charged as coconspirators for her she was the lead schemer i don't think it's really accurate now to say that she wasn't the ringleader that's how the whole case was presented bamberger and mccormick the two cases that opposing counsel cited in bamberger it's actually the opposite holding then than co counsel represented that court this court recognized that there was harm to the co defendants from the from the outburst of the lead defendant not that it minimized the harm to the co defendants and in mccormick it was the defendant herself who stood up and defied the judge and was found in contempt and the court to decide the mistrial because the court said the defendant should necessarily be able to architect her own mistrial by her own misconduct it wasn't a codefendant case and so when we look at the codefendant cases we have they are out of circuit but i think they're really on point we have braz well manny and erik hurry which are discussed extensively in the briefing so i'll just address three quick points manny again the court said there was a toxic risk of the outburst it was so high that we don't necessarily credit the jurors claims that they weren't prejudiced in braz well the court said we're not that a defendant in order to to reverse a denial of mistrial is not subsequent citations on the acceptance of responsibility i only have one comment your honor with respect to the to the argument that mr combs was part of this larger group i don't think that the record really bears that out