you know the lighting system when the yellow like goes on that means that your time is drawing to a close so begin to wrap up if we take you beyond the red light and don't worry just keep talking to us and you're on our time and not yours and with that will begin with our first case this morning case number fifteen dash one five two three five united states versus brian newton and victoria snow who is going first mr abrams in this particular case what's happened is that there was a missing element that went to the actual charge the cases that the government sites in regards to constructive amendment are invited are a deal with changes in facts that support specifically that wilfulness is a requirement for a finding of guilt and that was the u s view ward case where they talked about it and and there have been numerous other cases well what do you think about the possibility that the intent to defraud language might subsume the concept of willfulness the intent to defraud does not go to the aspect of voluntary and purposely with the intent to do something that the law forbids intent to defraud can be from a from a curious point of view they can look at that in a different manner and what and that's why the wealthiest element is required it has to show that there is some form of illegality or some purposeful attend to disobeyed or disregard the law and willfully and knowingly doesn't cover that knowingly only goes to the intent and knowledge of the fact it doesn't go to the purposeful action to disregard the so the issue here is that we have this omitted element and while the cases that the government cites to talk about invited aren't talked about constructive amendment deal with the changes in facts that support the charge or supplemental instructions or omitted definitions it doesn't go to the omitted element the need or versus u s case the supreme court case it provides a better understanding for this court to apply and the universe is us also and mail fraud and wire fraud case we had  the issue of materiality which was not in the statute yet the supreme court said materiality is a requirement yes that was a case of first impression that is correct and the materiality however was on on god if i remember right godden is a case and says materiality is an element right in the neater addresses whether or not the omission of that element can ever be harmless error says and says yes  can depending on the circumstance right and they look at whether or not there was sufficient evidence to get past the reasonable doubt and here in this particular case we do have sufficient evidence to to show that there is still reasonable doubt the facts in this particular case are that and it's no trial of thirteen days about fifty minutes of that trial was concerning miss no only there was no evidence to support or presented at trial that showed that she voluntarily or purposefully acted with intent to do something that the law forbid the district court judge stated during sentencing that this know is not the instigator and worked under mr newton and  paraphrase you may not believe this to be a problem in the beginning but over a period of time there had to have been some recognition that the conduct was awful so i think the judge looked at him and said wait a second you know that she did not recognize that it was this will and maybe in the beginning we don't know when the willfulness act may have come into play but it may not have come in the beginning it may not have come in the middle and i think that's why we're looking at that requesting a new trial in this particular matter show that she was well following her actions and likewise we also have this one additional aspect and that was the fact that during the trial there was a  document placed into evidence that had mr newton's wife's name on it violating the court order asking and requesting and demand and what reason at the defense counsel's fault for not retracting it yes but they did this at the eleventh hour on the tenth day of the trial and i think that that's what caused this problem when you try and fix something right on the fly at the last minute you're bound to make mistakes but now that you know  please with regards to that issue do you remember from when that tax return was in terms of time i don't recall because assuming it was error then that may have some potential for harmlessness right because if you have a tax return that's let's say in a hypothetical world ten years old a lot of things can happen in ten years and a jury may not draw the inference that mr newton was married at the time that he and miss no began a relationship that is correct but the but the court's order said that they wanted to move all i no no no that's why i'm saying assuming it's error i'm with you that you know there's there are so my question is you know but you don't have a recollection of from what year that tax return was that how it had to it's in the end that we provided to will find it yes of course it please the court counsel interest or behalf of the palace the first issue i'd like to address is the issue of loss mr newton had a lengthy trial during the trial the government made no effort to specifically prove a specific quantifiable lost as defined under the sentencing guidelines so instead at the sentencing hearing the government attempted to rectify that issue objected to the last calculation that purported or proposed by probation then at the sentencing hearing the government had two documents purported summaries which it presented to the court when it was presented to the court and when the issue of loss was presented to the trial court defense counsel had a long lengthy discussion with the trial court wherein she advised the district court that these charged these summaries were in accurate and she reminded the court that the government bore the burden at the sentencing hearing to prove up the allegations on these documents well here's my understanding my and i've read through the senate seen transcripts and you'll understand with me that i wasn't there looking at charts and it's awfully hard to follow when people are throwing numbers out but i tried to follow it as well as i could but my sense was that defense counsel wasn't complaining that the charts or authenticated or where did you get this number or that number my sense was that everybody was pretty much on board with their various numbers came from but the defense counsel instead was arguing that investment monies for the third company should not have been considered that that there were some investors in a different company whose name escapes me as they see now but that that should have been counted and it should have just been the investors in the company that was it is she plus plus whatever the fraudulent amounts of money were and that all the arguments were about how do you segregate those numbers but i got no sense that there was any authentication  dispute about particular numbers and in fact she didn't object to that here in the brief you're sort of arguing are we needed a witness to authenticate summaries is my reading accurate i believe it's accurate in that she did make those arguments but i believe  where in a mer factors didn't really sustained some of these losses because data force which was one of the other entities bought the items back monies were returned those are excluded from law so she mentioned that at the sentencing hearing repeatedly repeatedly these charts don't consider buybacks the prosecutor response simply gave his own verbal representation that the buybacks were not in there she also referenced the fact well tell me what do you think the loss amounted is i don't believe the government proved it because we had the issue with the trial based on the evidence what would you what you she was agreeing that there was some law she wasn't saying what would you say the loss amount is so so i would say that the government board the burden of proving  last there were two issues that were that their witnesses at trials testify to the reply back no one anywhere ever quantify what the buybacks were and number two there was an issue of how they can you're at a sentencing hearing defense attorneys are not usually that difficult about they'll say judge this amount lost we've done to speed but this is all is what would you say the amount of loss it at what was proved i don't believe any of it was proof because you have the issue of the prosecutor conceded this heat the prosecutor said at the sentencing that mare factors we don't know how much of a given invoice they factored we're going to look at the contract in their contract was to to factor ninety percent so therefore it this is but you know that the guidelines and vies really as they are asked district courts to make a reasonable estimate of loss and in cases where there are hundreds or thousands of transactions using a contract basis doesn't seem from a starting point as i tell you everything from a starting point it doesn't seem all that crazy to me to say parties generally it here contracts so we'll assume absent evidence to the contrary that they factored a certain percentage of the invoice so i think the guidelines call for you can estimate in certain circumstances but when someone's life and liberty is at stake you can't guess and that's the issue here guessing versus an estimate and the prosecutor called upon t court to guess nobody knows nobody there's nothing in the record what percentage was actually paid what was the actual loss and you can't go on the alternative theory if you can estimate of the guidelines cometary says you can go on the gain to the defendant we can't go on the game because the government testimony a trial they never looked at there was no there was no evidence at trial from i haven't read the trial transcript i would like to charan's a look at the sentencing transcript i haven't read the trial transcript cover to cover was there any testimony from any representatives of those other two companies about what happened to them at least their perspective of what happened to them and in the alleged scheme and you know at least testimony as to some was there was or any of that at the trial right so there was what one witness from a mer factors said that they believe the loss was over two million they gave a number ok didn't quantify buybacks all of that but later on the summary witness chief law enforcement agent assigned to the case acknowledged that buybacks were an issue but he said that wasn't my job i was just tracking the flow of monies for purposes of proving the conspiracy and just very briefly on the the the  charge which was the other set of victims only three witnesses testified at the sentencing hearing they provided a chart that purportedly had sixty six victims so again this is just none of it was proved up which is the prosecutor's verbal representations and i humbly suggest that the defense counsel did object to the veracity and accuracy of the charts well i thought your big you were going to spend your time on the senate saying in the one book and you haven't heard from you that would actually have some real benefit your client in the numb we could extend just a little bit so you could frame that argument so the government could respond tony can you please give him three more minutes and we'll give this macnamara the same amount of extra time please actually later on said or acknowledge the need to use the two thousand and fifteen guidelines then for whatever reasons we well know that tell me how it matters here what i'm thinking is you take a bit of a gamble here less is same that we rule that it is plain error you should have used the problem for your client arguably is as to sophisticated means it may be harmless because the new requirement for sophisticated means is the defendant has to intentionally engage in or cause the conduct that i don't think that's going to be a real tough showing for your client miss no may have an argument on that the more than fifty victims though is particularly dicey that's no longer in the guidelines however it's a lower number of people with a higher standard so if he went back on remain and and the government could show that there were twenty five thick tims much less than fifty and there were twenty five here for sure destroyed that there were twenty five and that those victims suffered a stanch hardship which is defined in the guidelines then your client would not be looking at four levels he'd be going up to six so my question was did defense counsel know that and kept her mouth shut and was happy with the four are you in some jeopardy if we were manned on that i think back to what we have for a player is in error existed it's obvious it's plain on the record and what we know based on what how he was sentenced there was prejudice because we know he received an up with for just twenty five victims substantial hardship your client will be looking at an increase in his guidelines at that point you're willing to make take that risk respectfully my client is asking the court that as with every other criminal defendant he sentence under one guidelines in this case is the two thousand and fifty we are aware that there are possibilities but all of that is cannot in north carolina be pierce argument he could go back and get a higher sentence i just want to make sure that's what you're asking but yes your honor our thank you for your time right thank you very much the court linda mcnamara for the united states and i'd like to start with loss to dispel this notion that the district court's findings were based on a mere proffer by the united states at the beginning of the sentencing hearing the district court judge explained to the party is that the court takes copious notes throughout the trial the judge said that he had ninety four pages of notes that he'd taken throughout the trial he had really read those notes before the sentencing hearing and he demonstrated his familiarity with what had happened at the trial by specifically referring to the testimony of several witnesses as to what they had testified to with respect to loss he specifically referred to the testimony of jack mauger and jerry cast leo who were witnesses from hewlett packard regarding their review of invoices that had not been submitted to packard at all that had been sold to marathon actors and to debt to prestige to the tune of two point eight million dollars it had never been submitted to the o b ten system at hewlett packard the court also clearly relying on the other trial testimony we had testimony question this is like a very impressive and thorough judge he had lots of notes and boy he went through my question is numbers yes and so what is your trial was that at the end of the day american actors had lost two million seven hundred fifty seven thousand nine hundred sixty five dollars now you have to do you have to discount that by the ninety percent correct and so that's what that's what they're about that ends up not being two point necessarily due to any illegal activity there could have been a multitude of factors for them not getting their investments back well the testimony went was that two point nine million dollars of newton's company b and b after which b and b had transferred directly to newton another three point one million dollars now that's not what the prestige investors paid their money for they they invested to buy data force hewlett packard backed invoices not to transfer the money to new so how much went on in two point nine million two point nine million went to b and b and then being be transferred three point one to newton because b and b was also getting money from other from other sources so those are saying there's no way that two point nine million dollars could have earned anything for them because it will need only taken from the company that's not what they were investing for that was not the purpose of their investments they believed they were buying hewlett packard back in boyce's from from data force and that's what they were doing getting they weren't paying newton the money so that was that was an additional that that easily gets a so over three point five million dollars and at sentencing we presented an updated chart from prepared by agent called the witness who testified during the trial where he listened out the names of the witnesses the victims the number of the prestige victims and how much each victim had lost from their investments and that  came to a total of four point seven million dollars that those investors had have lost from their investment in prestige so we had two point five from arafat's years we had four point seven to the prestige investors easily more than the three point five necessary for that eighteen level increase and the same amount they were ordered to pay in restitution as well but up but all those numbers just to make make it clear i hope we're clear we're hope all of those numbers are not tagged onto each other there's overlap right because if not you'd be way over we're way over we are way out there because i mean you don't add the two point five million plus to one point one zero three point one zero zero zero one point seven right we have two point five for america factors and four point seven for prestige that's what we c million that went to be and be easily easily get to three point five even if you discount this four point seven for some money that was supposed to go to this other company edison we easily easily get to three point five based on the trial testimony that was refined by the charts that we submitted at the sentencing hearing prepared by hbert agent culbertson in response to their objections that we hadn't taken into account this ninety percent and that we hadn't taken into account invoices that had been bought back once we address those concerns they didn't say no no no you got to put out agent culberson or some other witness on the stand you need to present further evidence that this agent culbertson was there at the sentencing hearing and could have testified but that was not what they asked you they asked us to address those deficiencies they thought with our own regional loss calculation once we done that they didn't object further the district court found our charts to be credible easily not that three point five million dollars threshold  efficient for the questions and that i wanted to address the one book rule error because i think it's an error that newton invited the court to make and possibly did so purposely because in in your to his benefit at the beginning of the hearing there was discussion about the twenty fifteen book and the change to the last the last guidelines and the and those ranges now newton however didn't argue that there were any other changes in the twenty fifteen book that applied to him in fact throughout the hearing all the discussion was about this fifty victims and whether we've proven fifty victims his sentencing memo was about that and that's what he argued during the sentencing hearing and the fifty victims had no that and nothing to do with the under the twenty fifteen guidelines fifty doesn't come into play at all you have so it's a possibility that that was done purposely for the reasons i suggested the counsel that you get more but there's also a chance the attorney had focused on and just didn't even know about the i mean it's odd it's certainly possible but i believe that this was an in by invited error because all he was talking about was this fifty victims fifty victims fifty victims no he never brought to the district court's attention that there was any other thing that the court needed to look at where there was substantial financial hardship to one five ten or twenty five victims never brought that to the court's attention so you know we talk about whether the defendant directed the court down the primrose path to error this is clearly the primrose path to using two books but even if we don't get there and we look at it under a player standard he has to show harm to substantial rights which in the plane or within the sentencing contacts means that he has to show a reasonable probability he would have received a lesser sentence and that he can't shout now the dice let me run mine you through the numbers ok the district court here found that he had a level thirty six that's the that's the level that he was sentenced under under the twenty fourteen manual if we looked only into the twenty four thousand manual we start with a base offense level of seven with a loss of more than seven million we add twenty levels and the p s r said there was a loss of more than seven million our numbers i just gave you gives us a loss of more than seven million we easily could approve a loss of more than seven million so we're up to twenty manager or supervisor gets in three an obstruction gets into so we're up to thirty eight under the twenty fourteen manual he undoubtedly would have had a higher fence level under twenty fourteen under twenty fifteen he would have had higher or the same we going through that he has a base level of seven again we get to the loss of more than three point five million gets him another eighteen so up to twenty five now we get to this number of victims substantial financial hardship issue if we proved five or more victims had a substantial financial hardship we add four and we had we had fifteen victims who lost more than a hundred thousand dollars we had thirty four who lost more than i when you signed on our ships a pretty tough test the question is did you have five victims or right more than dead had the victim became insolvent file for bankruptcy last requirement had to change employment substantial changes to living arrangement couldn't get credit did you have five victims that would make that definite we don't have evidence of that in the record because this was not an issue so we don't know we don't know all we know is how much each of those victims lost and we have so i mean i guess you would turn it and say god defendant to prove his substantial rights were affected would need to tell us that there weren't those but nobody that was lacking in the record that's exactly right i mean we had six victims who lost more than two hundred thousand dollars so i mean i think we could have proven that but the record doesn't show that so anyway so all we needed was five or five or more to get him before he gets six more if it's twenty five vixens who had substantial financial hardship then we have the sophisticated means is to manager or supervisor is to obstruct i mean three obstruction is two so either gets thirty six or thirty eight under the twenty fifteen book depending on how many victims had a substantial financial hardship so he either comes out the same or worse under the twenty fifteen book so he can't show a reasonable probability that he would have received a lesser sentence had he had this error not occurred it's error it's error to not use one book but he can't meet the plain error standard have been is no her attorney didn't argue it but she had a shot on sophisticated means she had a shot at lowering her lowering her guidelines by two levels did she not with a new definition well first of all thanks she goes back to the same calculation right now this is not an issue she's raised she didn't challenge sophisticated means in the district court and in fact her sentencing hearing occurred immediately after the sensing hearing and her counsel came in and said i had a chance to sit through mr newton sensing so i heard the arguments put forth by the defense and the government and you're under signings and i don't feel it's necessary to try to litigate your religious get your findings judge i believe you took your time and made well thought out rulings so again invited error if there's an error with respect to sophisticated means as to her she invited that error so i and it's not an issue that's been raised in the recent an issue she's never raised so i just don't think it's an issue that it's an issue here at all she also got a substantial departure that actually did knock out a lot of these although i don't believe the judge indicated he would have given the same sentence and that he didn't use the magic words that were given so that's right my guideline calculate right or not right right but if we look at our pla error standard she had this huge to put variance downward she can't show a reasonable likelihood she would have gotten a lesser such a lesser sentence so even if the court were to look at that she can't she can't meet that burden could you go over this and issue yes yes now of course again this is an invited error i don't think that the court to look at this at all is the jointly proposed instruction say these instructions are being jointly recommended by the parties in this case during the charge conference when asked about these instructions both defendant said they had no objection they didn't object at the close of the jury charge and there was no motion for judgment of acquittal based on a lack of and will be put in there it well in twenty ten the the pattern jury instructions were amended to remove willfulness from the instructions as to any crime that that was not wilson this is not specified not actually that's exactly right after twelve twenty there in dicta that was a civil rico case the court said male and wire fraud are specific intent crimes requiring the defendant acted with bad purpose either to disobey or disregard the law and then cites maxwell for that proposition well doesn't that purposefully word specifically does it isn't that included in knowingly and willfully if i think you're right about that this that the stats that maxwell says the specific intent required under the mail in wire fraud statutes is the intent to defraud not the intent to violate a particular statute or regulation so i think when this court says that this that went in in gray versus spirit airlines when the court said that the defendant has to act with bad purpose or just to disregard the law and cites maxwell it's for that not a mistake are actually correct yes that's right the problem is i mean putting aside for a moment the invited error contention that there are a number of cases from the circuit whether rightly or wrongly decided that indicate that wil separate and distinct element beyond knowingly that's true yes but there are no cases from the circuit saying that wilfulness apart from intent to defraud is an element i mean where frank you won't find that in the circuit there aren't any that's just that just not the at the drafting history of the eleventh circuit pattern jury instructions which are binding right i think some rule committees must of believed that those statements in prior eleven circuit opinions grafted on a willfulness element correctly or incorrectly and that's why willfulness became part of the standard pattern jury instruction than once the supreme court started sort of reversing course on that and another committee  of rule rule makers decided to take it out of the eleventh circuit pattern jury instructions so it's pretty unclear what our prior cases meant about willfulness whether it's distinct element whether it's observed with intent to  i didn't find any case holding even prior to that i'm at that moment to the jury instructions that wilfulness was an element of mail wire fraud i don't find i don't find that night and believe me i'm not so it in any event even if we don't have invited here they have to show plane air and as we're discussing they can't show that it's plain under eleven circuit law that wilfulness is an element of mail and wire fraud they can't show that there's not lemon circuit binding precedent that what would hold that so they can't meet plane air standard either the only other thing i wanted to mention with your question about the tax return and this failure to redact that tax return was from two thousand and three so that was going to be one of the points that i was going to make that nobody can show any type of harmfulness here because even if they could show that the jury saw this  ture line on the back page of a tax return that had a name on it they didn't specify that she was actually this woman was actually married to mr newton they couldn't show harm because you know a jury easily could have found this was two thousand and three they're divorced by now he's in a relationship because the notion behind the request for the ruling that the jury would think even more harshly have misters mr newton if he were married to every the jury me that they were having an affair right well i mean they are so it's just that they might be a little more in addition to everything else they might think badly of those two but i think that they were also adulterers is that right i mean that was a motion in limine need to exclude this testimony and i think the court just felt that it wasn't necessary it wasn't particularly relevant and there was no reason to bring thank you it is it is clear from the trial transcripts that miss know was mr newton's assistant operated under his direction was his employee and did not gain substantial did not gain financially you know i think the words that they used by the special agent was pretty much evened out in her bank account she did let mr new use her bank accounts and her credit cards for that scheme but she did not gain financially substantially the circuit that wilfulness was a requirement if you look at all the other circuits in this country nearly every one of them required and set the elements including knowing and willfully the two exceptions that i can find was the fourth circuit where they talk about purposeful existing us of executing a scheme and a recent unpublished decision from the ninth circuit where they removed willfulness because it did not appear in the statute but as we know the  statutory interpretation or the statute language is just one aspect of the law you have to look at the case wasn't a fraud somebody haven't you acted willfully necessarily remember that all the words willfully did that willfulness is voluntary and purposely acting with intent to do something the law forbids with bad purpose to disobey or disregard the law in other words an evil mind if you intend to defraud haven't you met that  i'm sorry one more time but in any juror ever think that what they did would not also meet the standard for well they would look at it but also from this nose perspective she was acting under the direction of mr newton she was doing  she was she intended like fraud people that's what the jury but but she again the defrauding is usually for financial gain she did not gain financially the argument that the government made was that oh she participated in this twelve hundred dollars or so dinner attended to by all the other employees and there was a company apartment that she used occasionally on it but there's nothing to show that she gained financially out of the millions of dollars there's nothing to show that she got anything thank you mr thank you very much similar without belaboring the point just very briefly on the issue of lost the government's then the notion that somehow the loss was proven because of the flow of money to newton suggested that we're now looking at again to do the record evidence doesn't support that that their own agent testified newton loaned hundreds of thousands of dollars to these companies that were credit cards that contained expenses that were legitimate expenses and none of that was calculated by the agent he didn't look at any of that so he cannot prove lost by game the defense counsel at that sensing hearing she don't think they're saying is that obviously if that amount of money is taken out of the company that amount of money is not being used for the purpose the investors invested their money what is wrong with that argument well if you're going to look at monies taking out from any particular company you still have to look at the big picture the buybacks the amount of factoring all of that and then if you're looking at i think now that's what they're talking about with precedes only three witnesses testified at the trial the sum it all up we know what the loss is merely because the prosecutor at the sentencing hearing told the court and that's insufficient paper i don't read that that she she didn't say those words but she did creepy to say she disagreed with the numbers and at the end of the day all it takes under the law is a factual dispute a factual dispute with numbers in the p s are facts and then the burden shifts to the government to prove it so respect least rely on my brief that i filed with regard to that the only other issue and i'm running out of time is sophisticated means we cardless of what guideline to use i don't believe that that was proven i'm out of time unless the court you could if you can finish up ten seconds so this is sophisticated means the vast majority of cases if not all require thick tissues and entities things of that nature in this case  that to do different people and use his real name real bank accounts real business entities in evitable he was going to be discovered this that the paper trail that was shown in this case was largely a result of mr newton simplistic acts in this case where he used his own bank account and moved money to another bank account had his own name in it selling one item to two different people there there is no other net result being caught with the conspiracy in the charges that were levied here and so respectfully submit regardless of what guidelines to use if it's decayed it means and what should not have been applied thank you very much as much as your able to know your court appointed and we want to thank you on behalf of the court for your service to your client we do appreciate it thank you our next case