before i start i would like to say one thing i am exploring merely hard of hearing i've got all of the high tech available to me and to the court but because of my hearing loss words do not some words don't process and which means i sometimes can't hear your questions or understand your questions i'm not to keep your questions i've been doing this long enough before you not to ever duck a question and give another minute to one of my colleagues here because there's a lot to cover i want to cover two topics the st i want to cover is harmless error which is sort of the tag end of all of this but i want to do that and then the nd one i want to least as to harmless error i think we agree we agree that lindsey holt i don't necessarily agree with that but if we agree that materiality is defined as a statement capable of influencing it's evaluated under an objective standard it's not a subjective personal perspective of the anybody i think we agree that the only admissible evidence then according at least to lindsay it's an objective standard of materiality that's it nothing else to prove materiality the manner in which an entire industry according to lindsey from that we may well what is and is not material within the within the industry which would include the specific lenders in this case but we've got to extrapolate down to that we also i think agree the whole thing is a jury question now ok it's a question that has to the jury submitted to the jury that has nothing to do with a subjective perspective of what is and do with not and is and is not material i think we agree with that that i think that's what the government and actually the court can't have it both ways you can't have us the defendants focusing on an objective standard and then we get to that says ladies and gentlemen you can repeat you can rely on their subjective perspective in order to determine whether or not it is mandatory and by the same token your hon when you start looking at harmless error and saying yeah the government proved by beyond a reasonable doubt that the error i'm assuming that it's an error further below but anyway the  harmless because there is whatever nader said substantial evidence of materiality it's undisputed and i think this court in or a panel of of which the chief justice judge was was part said that yeah there is just all kinds of evidence that it was material the question then becomes when you're dealing with harmless error what does the court look to what does the government look to to prove beyond a reasonable doubt in this case they were relying exclusively on a subjective perspective that yeah ladies and gentlemen look at where all of these lender witnesses said yes it's significant yes it matters to us with one exception which i point out and says we don't know if it matters or not  they're relying on a subjective perspective of from the lender's the court it in this case what would the court rely on what would the court have to rely on to make a determination that beyond a reasonable doubt an error was harmless what are they going to look at they're going to look to only the subjective belief of the lenders so i don't think that error was harmless let's go to proffer the defense proffered although nobody is willing to concede it that they wanted to present evidence from portnoy partnoy that industry standards was going to be presented to the jury yeah there may have been some talk about lender conduct in fact there's one somewhere along the line they say yeah defenses focused on conduct of the lenders well ok the trial judge can say no it's not enough of it you can't admit that well what about the other stuff well you could admit  that were we able to absolutely not nor along the line did we get a chance to proceed at anything close to the defense industry standards mattered and with that i'm done i'll let you get questions materiality so for both and it so that it's a critical document to look at and i know as i understand it your defense the defense presented at trial was that the statements made to obtain these various which or as i understand it you concede our faults didn't matter because the loans were being made on the value of the property the collateral whatever and that this was common in the industry in this time is that record that's that's pretty accurate correct during this this is at the height of you know the time of the liar  and and the fraud that was prevalent with regard to the lenders in particular was there anything to prevent the defense from calling the actual loan officers involved in these transactions to see if they would admit that that was the case well some of the lender did have that have witnesses at the trial and they were asked questions by the government with regard to you know would this be significant to you you know the income and and so forth but the defense wasn't allowed to show then in response there was a lot to cross examine them to show that you know in fact that the practice of the lender lending institution itself was basically it didn't really matter all they want to do is get these loans through as much as fast as possible and the numbers themselves you know that the answers didn't matter to the lending institutions all they cared about was getting their commission and then you know passing on the loan to a secure you know become securities sensually  so so they were i think the fence was actually closed off through the end limb in a proceedings and not allowed to and you can look at some of the times where they try to go there with the witnesses with the lending institution witnesses allow them to go into either one either the in the ship access or with regard to the specific practices of the lenders at issue in some instances it is correct that some of the verifying information in connection with these loans was actually done by the defendants in this case and i'm not sure what you mean by the verifying no wasn't there some verification of actual interviews of the applicants or one of the defendants forge the name of the actual interviewer that sort of thing was going on correct but you know the defense position was that it was still not material because these lenders basically didn't care one way or the other and and yet the government was able to present this evidence saying well these lenders did care and present these lenders as basically innocent victims but that's not at all the case it's you know the truth  that lindsay is wrongly decided because lindsay says that and i'm quoting evidence of individual lender behavior is not admissible to disprove materiality but evidence of general lending standards in the mortgage industry is admissible to disprove materiality so i understood the district court's order to be that the proffered expert was only going to talk about the conduct of the alleged victim lenders and so involved the government relying on a lender specific period trial as a matter of due process basic fairness right to cross examine right to impeach the witnesses the defense had a right to go against that to show why that that testimony was not correct and  i don't think that lindsey is directly if lindsey had involved lender specific theory used by the government at trial i would i think the argument would more problematic but clearly here the government relied on the lender specific not only through the testimony  witnesses but also during the closing argument five hundred and twenty seven thousand five hundred and twenty eight clearly the government is talking about whether or not this was material to the specific lenders and they can't have it both ways you know if they rely on the specific lender theory  theory by the government at trial and that's a distinction that from reading the opinion i see no evidence in that opinion that it was under specific theory so you know here the defense wanted to introduce both the letter specific and industry wide and they were completely shut down on both and that is why it was a romance i if if i may just since i only have about a minute left i would like to mention with the guts of the mailing issue this is a pretty significant case with the guts of the mailing issue because the district court departed from this cour model jury instructions and included the notion that the mailing only needed incident to the central part of the scheme and that allowed the jury to basically if even if the mailing were just incidental to the scheme that would be sufficient and allo the jury to draw that conclusion but that's directly contrary to supreme court precedent i mean supreme court precedent says merely incidental and collateral mailings are insufficient under the statute and i think the deed of trust in the old for the purpose of recording that you trust was mailed this is after this person of the funds and so it was it was not a core part of the scheme the scheme to not depend on the mailing in that respect i see that i've only got two minutes under a under the theory of that they were against penal interest the williamson decision requires that the court engage in parsing of those statements which requires an individual factual specific factual evaluation of each of these statements and i do not see that that parsing occurred  evaluation of the record is that the court basically in bulk allowed these statements to come in that were very prejudicial to mr bond look at these statements included things where miss check would call mr bond a bum she would comment on his binge drinking on his gambling she referred very prejudicial to him refer to bur gold and money and losing gold losing money gambling she referred to him as greedy these statements not only were they inflammatory they were really blame there were blame shifting statements in there and they were statements that are relating to him only and not her criminal conduct discussions upon a diamond bracelet and i think particularly harmful to direct argued that the entire transcript of miss palmer check statements should be admitted because his theory was that she was biased against him and so he wanted all of these statements to come in to show that she should be believed because she really just didn't like him and was saying bad things about him calling him a bhaumik cetera right i think of the i think the flow of this issue it the st thing that is the council objected to the statements on the basis that they were prejudicial on the basis they violated confrontation clause on the basis that they were so he they objected to the statements in total and the district court had the entire transcript reviewed it and determined that miss palmer checks statements were against her penal interest because she was making admissions to illegal conduct and so ruled that those statements were coming in and then at that point if i understand the record  x counsel one of the entire statement admitted so why are we not now reviewing this for player i guess counsel once the statements were in the statements were in defense counsel had to deal with that there were a number of capital statements that i discussed but counsel didn't do was say all right your honor you've agreed that these statements are against miss palmer checks interest but these particular statements can you excise i mean said council did the opposite and said i want all these statements in soccer act during the discussion the initial position was to exclude the statements during that statement the court allowed them and then counsel i agree that counsel did request that more statements come in she could address them on the cross as a prejudice in front the witness with prejudice at that's true at that point she wanted the statements to camembert it was only because they were going to come any because she'd lost the i don't actually because the only reason defense counsel then ask for them to come in more complete statements to come in is because she'd already lost that initial gambit of trying to exclude the statement so she had no choice at that point but to be able to use his statements during cross to show prejudice go ahead and i going to shift gears just in the last final seconds and i think mr big bar has time and it's not much but each defendant the government has to prove that each defendant knew that his or her benefits were probably dependent on the success of the entire operation and i think where this issue comes in is that  manka and jury ok they were involved in separate transactions involving separate houses separate transactions but your client earned rental income from a house purchased with a more mortgage where the applications said he was going to live there there's his primary residence right and this this argument goes to count one which is the overall  conspiracy and that's that's what's been disputed so my position is that that has not been the overall conspiracy encompassing all the defendants has not been proven because on one hand and whose make a one on one hand did not know about each other and the success of the money that they received it is in no way depend on the other property transaction their money came from the escrow there would be no belief or no reason to think that their success depended upon some other track transaction that there's no evidence they knew of in the st place thank you counsel thank you good morning may i please the court the bickley on behalf of the united states i was trial counsel in this case i'm to start with a question from judge hawkins i believe you asked one of the defense attorneys whether the defendants could have called their representatives in this case they most definitely could have the defendants were able to challenge the government's evidence they could have called witnesses from these lenders in fact the united states in our motion in limine a specifically said there are in contrast witnesses who would know what actually happened at these institutions they are the individuals who work at the lenders and defendant should call them as witnesses and that's it s e r one thousand five hundred and twelve and the court specifically on r thirty nine to forty one suggested that defense witnesses from the companies would be better witnesses and that because the beginning of why this expert was irrelevant and why the trial court in this case did it job the trial court held that the what it was excluding was what lindsey says is allowable here the trial court said the government moves that the court exclude evidence or argument that the mortgage lenders in this case were negligent in verifying information on loan applications or that the lender knowingly allowed borrowers to submit fraudulent loan application i have indicated that relevant the defendants in addition have made no showing as to how mr partnoy has reliable knowledge of the practices of the lending institutions actually involved in this particular case this would be in contrast to employees  officers of these institutions and then they got the court also went further and said if the government had opened the door the defendants should come back and discuss that they never did the district court properly excluded expert that was to testify regarding the negligence and intentional regard of specific lenders in this case and not general lending standards in the marcus industry the defendants in their notice  specified that the evidence that they were going to present were about the lending institutions they defined lending institutions as the alleged victims in the indictment that it e r six hundred and forty eight dollars they defined lending institutions in this manner because the expert was not going to present evidence of the lending industry standard to the entire mortgage industry they never said that they were going to do that and we did say the professor part would be testifying as to the securitization process and what happened in the financial market during the time frame outlined in the in time but your honor that doesn't mean lending standards in the entire industry they didn't talk about how they were going to present evidence with respect to income or the primary residence representation that mr bond had to make the defense was that this expert testimony should be allowed because it would show because of the general overall practice in the lending industry the jury would be free to disregard the testimony of the people who sum of the representations it was not about the general industry their notice was very specific to the lending institutions and the court in its ruling specifically talked about that the lenders in this case and what the united states was asking to move in lemonade to exclude was respect the lenders in this case so that's what was excluded it was not general lending practices in the of statement it uses the word entire that is just not what the defendants in this case were doing well if for example hypothetically the proffer had ended with the description of the securit process and what happened in the financial markets nationally within the timeframe but in your judgment without a bill acceptable expert testimony i think what the x they would have had to proffer was we're going to talk it's not broad enough and it doesn't link it to exactly what the general lending standards they wanted to present are you know it talks generally about securitization but it's a broad statement and doesn't link it to  representations that they'd be going into and how they are generally applied in the mortgage industry in its totality in addition if the court finds that there's any harmless error with respect to i mean if the court finds there is there we would argue that any arc or any error was harmless st as judge hers on said in the case partnoy it was not going to testify that representations such as primary residency income to not have the next natural tendency to influence the defendants lied about the core mortgage information here we had a lender representative testify in this respect to resume that they didn't offer one hundred percent financing with respect to with respect to investment properties or secondary homes that's materiality and nowhere and partnoy is in there no where with respect to part noise disclosure was it ever a challenge that you said he would say that it didn't matter whether the primary occupancy box was checked or what the income was that was on the application and with respect to the evidence we presented with respect to the lender's we focused on the words on the application we were talking about that the primary residency box had to be checked and the defendants themselves in both their opposition to the motion in limine a and in their motion for acquittal said all that mattered was what income was the bar were stated and that's it s t r twelve that's admitting mere materiality partner i was not going to be coming in here and saying that a box didn't have to be checked or a certain income on the application didn't have to be put there and so consequently even if the proffer testimony had been admitted it no jury could reasonably found that the defendants did not make material misrepresentation and also with respect to harmless error the defendants themselves believed that these representations were material they made big lies and they supported them with false tax returns with false letters of employment with false prophets and loan statements they realized and was a loan officer so she realized that what the presentations here were materiality regardless of what partnoy testified the jury would have been aware that in this case these representations were material in addition the defendants were specifically told that the primary residency occupant representation was material in each of the deeds of trust was told that that is immaterial representation and he signs those dates of trust and the lenders were quired supporting material and the lenders repeatedly asked for this material and what the court focus on is that despite the court's ruling regarding some of the evidence the defendant still presented a defense that these lenders were negligent and intentionally disregarded they repeatedly cross examined all these lender represented representatives about what they tag what supporting information they needed so they were able to make that argument so looking at the nature of this expert's testimony in that specific in terms of what this expert in this case was going to do the fact that the defendants were able to present a defense and the overwhelming evidence materiality we would argue that any error was harmless now with respect to the mailing the jury instruction follows the supreme court and this court's words it's this if the supreme court is held to be part of the execution of the fraud the use of the mails need not be an essential element of the scheme it is sufficient for the mailing to be incident to an essential part of the scheme this court has reiterated that in lo and a clash the district court was just repeating the words of the supreme court and this court counsel why did the government request an instruction that differed from the th circuit model jury instruction on mail fraud because it's an accurate statement of the law and we believe that the jury was entitled to know what the law is and the judge felt that it was an accurate statement of the law and so he put it in to the jury instruction and the th circuit has held that a similar instruction was adequate and in addition if you look to the th circuit it is part of their jury instruction although it uses the word incidental as opposed to incident and the word incident to an essential part of the scheme is exactly what the supreme court has told us what the law is so we think that the instruction was adequate and that should not be a basis for a reversal in this case we haven't talked in all about sen you need to when you're deciding on any role it just and that would be for you know a upwards or downwards that you need to consider the money laundering out she was sentenced under th provision and she was sentenced for her count for money laundering so under application no to see you need to look at her money laundering conduct and she clearly and the defendant does not even argue what not to be entitled mailed to her house so she created the money and then she funneled it to defendant palomar check and she also kept a significant chunk more than half of it for herself and then the court also ruled with respect spin if you look at her role in terms of the conspiracy that she was also an average participant so both with respect to the money laundering and also with respect to the conspiracy we would rule we would argue that she was an average participant now going on to mr warner's arguments with respect to ms coos leitz a statement your honor judge made that you are correct one of the entire of these statements were exculpatory and then once they once upon direct realized that the statements were coming in he wanted the entire statement in the court repeatedly had this statement in front of it you know time and time again he had the exhibit in front of it and we the counsel for bond direct even said i believe that the conversation  complete because you have an ex girlfriend talking about another girlfriend and basically complaining about her ex that's it s e r five ninety seven dollars not one of the defendants we spent over an hour going word for word with the court about the statement and again and again they just wanted more and they kept saying rule of completeness we want more and more and more and and we were trying to redact more out so the idea that the judge did not know what he was doing with respect to this the defendant's suddenly wanted more redacted is a little bit hard to believe especially when you were there in that trial and spending all the time on this transcript  if the court holds though that any of those statements were erroneous lee admitted we would argue that they were heart that it was harmless error with respect to bond wrecked which seems to be the focus of we never focused on those statements in our closing or on our rebuttal the individual who was focusing on those statements was the defendant bondra kim self over the government's objection bondra counsel question  about comments concerning him being a bomb and other derogatory things she said he even questioned mislead about things that weren't even in the exhibits she went on to ask him whether called him a good for nothing lazy and worthless so and again and again this became the focus of her defense the palomar check didn't like mr bond correct and she used the transcript in order to do that and then as we once it was determined that the transcript was coming in the defendant definitely wanted it in all of it with respect to the conspiracy we would argue that this was sufficient evidence and if a rational juror could find that there was a single conspiracy in this case with respect to all of these defendants they all profited from this conspiracy and the scheme and so and it was all dependent on the success of the entire operation they all had their hands in this entire conspiracy and any rational church could have found that if there are no further questions pays a particular claim in full despite its actual knowledge a certain requirements were violated that is very strong evidence that those requirements are not material that's precisely the problem here that the kind of evidence that we should have been able to present and by not being allowed presented is the same district involving the same allegations and result in acquittals for all the defendants with respect to the cross examination the defense was just shut down in cross examination they were and whenever they got close to the is actually contra the incident to language does appear in the supreme court cases but so does the language merely incidental mailings are not sufficient and it's improper in my view to throw that kind of the jury and say without telling them that incidental is insufficient if you tell incident to a sufficient you should also tell them that it's a dental is not sufficient as the supreme court said in household credit case incident two is is ambiguous it's hard to tell