mr spangler was charged with intent to defraud a number of investors here in seattle his defense was that he did not engage in any scheme or are to fight face to defraud anyone that he had a long history of providing  investment services to in a limited liability corporation and partnerships in the seattle area he provided full disclosure to these wealthy well educated investors and the fact that they did not read the documents they signed are you referring to the one thousand nine hundred eighty eight agreement or the two thousand and eight agreement because there's a significant difference is there between the two yes and two thirds of them voted to change the investment values of the investment ambitions of the private partnerships that they were involved with if you read all of the seventeen or so investors testimony they generally testified to a person that they didn't read the documents went out that these are sets that is a responsive to my question first of all you don't read anything in your brief about the fact that two thirds of the investors voted to approve investments in these two private  companies is that what you're telling me yes a presser gonzales testified to that as did as did others that they had received that there was no indication that they had all approved the change covers are you affirmatively representing th record shows that two thirds of these investors voted in favor of putting the majority of their funds into these to start up companies is that what you're telling me yes a no no they did not fire does not show that does it it showed that they changed that the investment partnerships changed and they all agreed to reinvest in the new partnerships yes and committed they didn't record site for that ok i'll find it before the reply so your position now is that contrary to the syria trial of the government that the bulk of these were going to go into publicly traded companies that these sophisticated investors affirmatively agreed that the money could be diverted to start up high risk investment in the first well yes or no no what it says it says it says mark has complete discretion in all of the documents in the first document he named a particular investment company south south eastern partnership or something that changed over time and that was in the documents it changed to hutchinson investments that changed to a different investment company he then in his document states i have complete discretion this is going to be an illiquid partnership i am going to invest in nontraditional investments what the investors testified to was he never told us that he was going to as the market changed take the money that we had previously invested in other investment vehicles some of which were high risk and put the bulk of it into tamarac and carry counsel that might get you halfway there as i understand the record under the one nine hundred ninety eight agreement until it was changed in two thousand and eight some twenty three million out of the forty six million dollars was invested in these two startup companies and as i understood the record he did not have the authority to make that determination it was se management assets or their successors who were designated under the one nine hundred ninety eight agreement to make that decision isn't that true that is who he named but that is not true the document said he had complete discretion to decide where the  se asset management company for just somebody to to get commissions out of the sales i believe i provided no services whatsoever to the investors i assume that they provided some services to the investors but he determined mr speight the defense was that he determined that as the markets changed i'm not saying he didn't make a mistake with the markets in two thousand and eight a different question if this was your defense at trial was that if it was argued to the jury can't we assume from the verdict of guilty that they didn't buy your defense that simply doesn't support that theory well i think the problem i'll tell you there's three you know my defenses here are that they should have heard from the expert mr keller who would talk about the addition of fraud and about the doc i mean mr i said mr kelly believe it's mr keller the expert who was excluded by the trial judge to talk about you know fraud nobody comes out and said i'm committing a fraud you look at the circumstantial evidence on both sides of the argument and you say look here are the circumstances he's been in prisons for twenty five years he had full disclosures all the documents the folder and when all that was before the jury  this was the defense you know but all that information can get there without the expert witness as we start out this argument it almost sounds like we're arguing insufficiency of the evidence or some kind of missed charging when in fact we have a fairly narrow focus from the briefs on the exclusion of the expert and then the collateral consequences isn't that right so he wanted an expert to say none of these things who examined the actual documents here he wanted that expert to say i don't see any of those kinds of in to show a fraud here all the a people's account balances are counted why do you need an expert to say that i mean that all the documents are in there right yes that is correct and then let me just ask you which of the documents are in there and what you just told us about the structure of the change the folders question that was argued to the jury and it was testified about by various witnesses correct that is correct the govern would it what is what abuse was there on the part of the district judge then to say this expert we don't need two reasons one is the government said the documents were meaningless their entire defense was it was what mr spangler said orally to the investors so the government's argument was the documents have no meaning here i think that the expert would have testified the jury's determination the jury credited mr carlton testimony and rejected mr spangler mr carleton said two different things and he was not exactly he was not our second issue of course is that  we didn't have the complete opportunity to impeach it mr carleton reviewed some of the documents for a nother accredited investor he said anyway i trust mark implicitly and to he said mark has broad discretion here ask him whether or not i mean we have to be careful which agreements we're talking about i agree that there's more discretion in the two thousand and eight agreement than the one nine hundred ninety eight but then we also have the testimony from mr carleton that he he didn't draft that agreement he reviewed a very briefly and the district court properly sustained objections asking to interpret what that document meant saying that the documents and evidence the jury can read for itself what the words are the debt and abus mentioned they were trying to confront him with them left did that i mean it's a question of like moving on and there was cross examination and at a certain point it because it was becoming repetitive and the district court has broad discretion i'm having trouble i don't know of cases where when you've been able to make your point and the information's come in can you point me to a case for we would determine that it was an abuse of discretion to impose a time limit but he cut off the cross that the cases have it you know obviously it is clearly within the trial court discretion but and i cannot point you to a case that says you only have fifteen minutes left counsel and you're done but in this case the state or the government had had twelve days to put on their case and apart from mr spangler mr carlton had been involved in mr spangler's companies for years he had carefully drafted documents that he quite frankly in my opinion was disavowed when he said these these disclosures are legal boilerplate you know they're not their contracts that are enforceable under the law i i was surprised by that testimony under washington law if use if you if you sign a take an hour the cross actually exceeded two hours at twenty minutes before the end of the two hour period the district court warning mr zero up that he was basically being repetitive and urged him to finish up this cross examination he gave him another warning at seven minutes and i think there might have even been another warning before he finally said you're done i mean it's no different than the clock that's in front of you where we give you a fixed amount of time and then when the yellow light comes on that's a warning and when the red light comes on you're d about answers that should have been clear to him i am certain he had been prepared for his testimony he disavowed knowledge or zilla had every had the right to demonstrate that i think mr carleton had changed his in between the time he worked with mr spangler and the time he had said i trust him implicitly to the time that he got on the stand i think you also changed this tune about what documents mean when you're investing in private placement ventures and are joining a limited partnership so well that would then go ahead what what what didn't come in and that might have come in that would have made a difference i think further examination about his advice to mr traveler and the email and further examination of how deeply he was involved in the spangler partnership to show that he now had a motive to distance himself when the f good morning your honor so may please the court i'm feeling on behalf of the united states this is not a sufficient evidence appeal i'm happy to clarify aspects of the record if the court has questions but i i i think the  elliott assertion that two thirds of the shareholders voted to approve under the one nine hundred ninety eight agreement the diversion or investment of the majority of their forty six million dollars and these two startup companies when they were told that they were going into public equity i can speculate as to what she means when you've read the transcript of you know is there no there any testimony to that effect no i mean this came as a toll surprise to me and i thought i'd read the record pretty carefully you're right your honor that both but more than twenty million dollars have been transferred before the two thousand and eight document i believe what she's saying is that when the clients signed the two thousand a document and send it back to him that was an affirmative vote to change the investment strategy so it somehow testified that to the extent they didn't review the documents particularly carefully it was because the the the what he said to them about what the two the function of the two thousand and eight memorandum was that it was announcing a name change for the phone and that the funds needed the private placement memoranda needed to be updated after ten years it did not say he was a fiduciary to these people by the way i'm going to be doing something very different with your money from here forward it already because we weren't focusing as much on the closing argument and looking at the evidentiary questions but in the course there were some comments in closing argument that are a challenge but was this the did the defense argue this in the closing that basically there's been a wholesale change by signing up to these documents in a sophisticated investors they're deemed to know what's in the documents i don't believe the defense ever suggested that the two thousand and eight memoranda h retroactive effect i think they did try to suggest that the two thousand and eight memoranda gave mr spangler unfettered discretion that was something that the government disagreed with and which witnesses disagreed with both because the disclosures were inadequate and because  of some limitations in the in the two thousand and eight memorandum as well mr spangler has suggested that the district court abused his discretion by ruling that by his pretrial ruling was in error when he said that mr heller could not testify as we've suggested there different reasons why that argument is incorrect the first is that it's been waived the second is that the evidence simply wasn't relevant and the third is that he there's no sed prejudice to mr spangler when you start by saying why i think it isn't relevant even though that's kind of counterintuitive because i think the lack of relevance shows why this argument is speculative and the argument the evidence wasn't relevant because the government's theory of liability was not that mr sanger had two sets of books it wasn't that his internal documents showed one thing and his extra documents he gave to his client showed another rather it was that the that the clients the documents given to the clients accurately reflected which fund the money was in but didn't but but didn't disclose to them that that fund itself was in turn invested in private in these two private companies that mr sanger was intimately involved with and so the the difficult was right that it wasn't relevant because it didn't it didn't controvert the government's basically there wasn't any indication of diverted funds in the way the books were kept would that not have some indicia of intent i don't think it it shows he didn't intend to cook the books  wasn't being accused of that so i don't think it's relevant in that sense and of course mr spangler has suggested on appeal that you are ways in which it might have been relevant but those are all speculative because of the limited nature of the information provided to the district court at the pretrial hearing about what mr keller would testify to and keller terminations not to put on any defendant testimony not to put on the other three experts he was given permission to put on or to try to make a proper about what our revisit the issue with the district court when the government's case closed and i t probably a better question for ms elliott but i take it that in trying to evaluate the import of mr colors testimony we would have to know what documents he looked at and what his opinions or from those documents is there any proffer in the record as to what he had exam i believe he said he had examined the retreat the receiver's analysis of the spangler group and then also several client statements there how much the clients had invested in particular funds it was where the funds themselves were invested so you're not arguing that this mr keller's testimony invaded the province's a jury there is a little suggestion in what was pro to the district court that he would he would say it goes to the it shows that he didn't have a and intent to defraud i believe in their response to our motion in limine a the defense said well that was a mischaracterization but he would testify to so i don't i don't think that that was part of the objection or the district's determination about mr taylor's testimony if the court has no further questions i'm happy to address the suggestion proscar misconduct or any other area of concern to the court  i'm interested in this loose issue talk about that we may never have to reach it but it wasn't with much narrower than your proposal i just glance this morning at your review denial motions to admit evidence are you want to loose is narrower announce a narrower rule this would be an extension of lose but i don't think it's all that far  bridge if if if i can put it that way i think lou stands for the proposition that when a defendant there are times when a defendant has to actually taste the toadstool in order to get review he he has to put on the extend to every circumstance in which an expert witness doesn't testify because of course there would be circumstances in which there was nothing more the defendant could have done but it extends to circumstances like these where there was more the defendant could have done and where the defendant what the defendant did when it came the moment to put on his experts and again he had three other experts makes it purely speculative that he would have had mr keller testify at all in this case so we have three levels of speculation one that the district court wouldn't have reconsidered his decision if if mr spangler had presented additional material after the close of the government's case about why he thought this was relevant to refuting that case to that mr keller would have testified mr spangler would have opted to have this one defense expert testify even though he had no other experts until he had other experts available to him and didn't have them testify and three what mr kelly would have set and mr spangler has made you know representations or theories about how mr keller's testimony would have been helpful but if you look at page sixteen of the  records that's all the defense said at the pretrial hearing before the district court about what mr keller would have said and it really shows the lack of relevance convictions for a conviction could come in and here it was pretty clear it was a definitive ruling on a motion and lemony evidence excluded and you know as a practical matter when that lawyer hears that and you have a definitive ruling you know that sometimes some judges get a little antsy when you keep trying to overrule the young woman a ruling which is totally definitive said well that's been excluded well i want to reargue you why we argued it it was a clear ruling it wasn't tentative it wasn't conditional it was an it was a ruling and under your theory i would think you would basically you know have this  popping up all through the trial when when do i need to re argue my motion eliminate in order to preserve it so i'm maybe a little perplexed about what would be the principal you would think come out of a ruling were we to base it on a loose or an extension of lose a couple of different notes on that a response first the district court said of twenty one of the excerpts of record this is his ruling in looking at the materials that were presented to the court the court has no value in the testimony that suggests to me at least implicitly that if additional materials had been presented the court might be going to reconsider if you reject that suggestion by the record i think you might i mean if i if i were you know if i w i but setting that aside i think at that point the onus is on the lawyer to say i'd like to make a profit this just like which he didn't do we have a very gentle paragraph and then as i said a page sixteen just a couple  the other thing that that i think would be a limiting principle of this court is looking for one is there's no suggestion on this record that mr keller was the linchpin of mr spanglish defense the never said but this is the one witness i really need or but this is the witness who if i don't put this on there's no point in me putting on an affirmative defense case those sorts of things might well be exceptions to the rule that the court announced if it were to to make this extension we're advocating for and of course of this court doesn't want to decide on  also the lack of relevance and also the lack of prejudice to mr spangler and i think all of these loose factors also matter as a lack of prejudice because how do you establish how do you assess prejudice when they're you know you're you're guessing that the district court wouldn't have reconsidered your guessing and there was a there was a hearing at the close of the government's case not hearing i'm sorry but there was outside of the jury there were a number of different experts discussed some witnesses who had been lawyers to mr spangler that mr spangler successfully convinced the court to get in and he didn't put any of that on this happened before right before the government close right after the government closed and he didn't mention this witness there's nothing in this record that suggests that supports the suggestion on appeal that it all came down to mr keller and without mr prejudicial you should have a trial well one of the things i'll just try one more time i think i understand ok i think i am here are you ok in mind thank you if the court has no further questions thank  citation to the record and there was never any argument i stand by this there was never any argument by the government that somehow less than two thirds of the members of the l l c had voted that had not voted different question the question i'm struggling with and i'm still surprised by your representation and we're going to check it is that there was testimony that two thirds of the investors hundred eighty agreement approved the investment between nine hundred ninety eight and two thousand and eight that's how i understood your representation if i misunderstood it now is the time to correct it let me tell you how i think you misunderstood it what  investigator what the investor said was i thought in part what they said the trial was i thought in perpetuity that my funds were going to remain in southeastern or something similar i think that's what they testified to but their testimony was unreasonable based upon the documents which said mark has full discretion and that his you're buying his expertise again i guess i guess back to ok you made that pitch to the jury but they didn't believe it and they the witnesses also testified that they instructed him that they wanted him to be conservative in his investment decisions there were some investors who gave him very express instructions as to how the money was to be managed so it could be available to pay college funds and that sort of thing and if the jury credited those statements i could understand why it would not  representation by the defense that spangler could do whatever he wanted with the money because that would be a breach of the fiduciary obligation to follow the client's instructions it may be that one problem was  should have told them then get out of my funds if they said that but that doesn't make the documents they signed irrelevant that puts every one i find the problem necessarily make it inconsistent oh i think what they got darn close to that position in this case we know that's not true it's one factor one factor over here on the government side i don't disagree i think the way it was argued here i think asking  challenging that sort of this breach of produce jury duty seeped into yes so mr and i think you know my view too much but it came and so then the ability to cross examine mr carleton and bring in the expert the only expert proposed to it actually this is docket seventy four is his offer proof the only person who actually looked at all the documents in the case was the expert to us exclude it the other two were sort of theoretical this is what was looking at all the documents counsel well i guess is i may perhaps not but he said i also looked at the ports the portfolio now so said the minister so they can learn some of them again if we had a full or proffer from defense counsel a trial as to what the basis was for mr keller's opinion and and what that opinion would be it would be much easier for us rather than to speculate as to what heller looked at and what he would have said in my view there's no speculation he would have said he saw no india share fraud which was a defense to the notion that he was engaged in fraud and it's all those little i agree the government didn't charge him with with with anything  like diversion of investor funds but every aspect of that weighs then on mr spangler side of the defense the defense theory is that it overlooks the fact that what is it issue here is a material omission of relevant information which investors would have wanted to know and had they known that information they would have acted upon it that that's what i understand the government's theory was as hundred eight that it was going into a publicly traded equities which are much safer yes these than start a company well they weren't in two thousand and eight and that was mr spangler's approach was he and he wanted mr keller to testify that if i'd remained in southeastern you would a lot the same amount of money i think we have your argument what i find thank you given if there were extra time here to say that whatever the court reversed thanks very much thank you i'd like to thank both counsel for your argument and your briefing this