that one issue requires a reversal of their convictions namely that the government did not prove beyond a reasonable doubt that these defendants were guilty under either prong of the bank fraud statute as it existed in two thousand and six and two thous now the government charge these defendants because of their roles in allegedly in the submission of allegedly fraudulent mortgage applications so what's the limitations period must so it's ten years or something for the documentation is ten years for an bank fraud loan documents where they sent by e mail and all this is just for my own curiosity why we're here straining the language of the statue when regular old wire fraud usually does you know you're not i'm not sure that there is any record evidence as to whether or not these documents were submitted by wire or not but but the court is here on a key point here which is that you know the government to plea missed the statute limitations on what they could have proved regardless of the of the of the statuses that came down after its investigation in two thousand and nine they had five years which were taken up to two thousand and eleven or two thousand and twelve to bring wire fraud or mail for mail fraud charges irrespective of whether the victim was a financial institution or not they simply missed that deadline and what's interesting here your honor is that the government knew exactly that because in two thousand and eleven they brought wire fraud charges against two of the cooperating witnesses in this case erica watkins and r obert adams who testified for the government and who had participated in fraud that was directed at him at the key that everybody agreed wasn't a financial institution so the government knew what it had to do but for whatever reasons let the statute limitations that five year period run and it didn't charge mr puckett and mr benyon until july second two thousand and fourteen which is it yours after the two thousand and six that loan applications near it and nearly seven years after the two thousand and seven loan applications what your best case that trust and under the bank fraud statute as it existed in two thousand and six two thousand and seven the banks are covered by the statute the uninsured subsidiaries were not your clients had no communications with the financial institutions the insure certain checks that were made out to sun trust bank as partial payment for on these loans but that's that's not is a court no is the crime a bank fraud is executed at the time that the loan application is submitted the indictment here charge right right goes right so there wasn't there wasn't any thirty forty four one because there is no evidence that anyone involved in this in the process of submitting the applications including these defendants had any intent to insure to defraud the f d i c insured banks they the government to submitted those as some of the exhibits in this case went to the uninsured loan subsidiaries and there is no proof under section thirteen forty four to which was judge campbell's basis for denying the judgment of acquittal because there's no the government presented no evidence that either bank funded either of these loans the government presented no evidence that either bank had a line of credit to its subsidiary to fund in a more general sense so there's no record evidence specific to these banks that showed that these parents had some unusual immediate degree of control over the operations of the mortgage companies that that's absolutely correct and in fact you're on to what the sun trust presented  witness who was who was dual hatted who testified as a representative of the mortgage company and the bank if anybody could have testified to that kind of connection he could have mr switzer and he testified to no such thing you talked about the fundamental difference there because every single one of those cases the government presented some kind of evidence that there was a funding connection between the parent insured bank and the mortgage lender and in fact that's that's the roadmap  that's the roadmap that the government could have followed here in order to secure its conviction in fact it's now don't not only wish that road map clear from the cases but the government council knew it because mr patrick because the lead prosecutor in this case said in his opening statement that the lender is chiefly being the subsidiary sun trust and for third bank wholly owned subsidiaries that got their funding for the loans from these banks that's at page id forty three seventy one and the fact is the evidence that they present the did not bear out the representation that they made in opening statement real quick the government wants us to throw out the corporate form here because it's a criminal case what's your response to that got our cut my teeth decades ago prosecuting criminal and i trust cases in which most of the time there is a corporate defendant we've pointed out in our in our reply brief cases in this court going back to the carter and continental bacon cases back in your early sixty's you know the government prosecut four minutes of my ten for a bottle i'll start with some of the adverse cases that judge oliver brought up but also this issue about corporate form if you actually look at the government's brief and the way they argue this they say well gosh you know the corporate form is not meant to protect fraud and it's a truly disingenuous argument because what they're cited to the case is the talk about when a corporation commit fraud to its subsidiaries it's not protected by that form there's no case this court nor any other circuit who's ever served holy abandon in a reason opinion the corporate form and we certainly don't think there's a reason for this court to do so any bad test about the fact that that this pair banco on one of the saviour's are there was there was a single stipulation that the parties agreed to that said that the mortgage company w owned subsidiary of either sun trust mortgage or fifth third bank that was the only testimony as to the relationship as a corporate matter there was no testimony about overlapping board members there was no testimony about overlapping officers there is no testimony about policies or procedures so we know nothing about the way that sun trust mortgage did its business or funded its loans when that when they have made their payments to the motor company they make it straight to the mower good company or that make it to the bank well there's only testimony about it i think one particular two particular loans the payments because most of these loans are not obtained by my client or the codefendant they are obtained by third parties but it one point there is a loan that was obtained by mr puckett and a year or two after the one was obtained he wrote a check to sun trust bank it's unclear why the check was written it's unclear why it was something listed as sun trust bank supposed sun trust mortgage we don't know who held the mortgage at that point and so the records very unclear as to how that happened but that's the only connection with the word suntrust bank with many of these mortgage one thing it's a point about both those cases really every case the government sites is either pre law from or is a post law firm and doesn't distinguish between subsections one and two and that's important because if you look at the case law which the reason law firms granted cert and they discuss these loss to them to their girl killed it completely ignores sort of the i think the really reasoned analysis of bennett which explains why we have to have some form and i have to the president is looking at what the statute actually says exactly and that's what we asked this court to do as well i don't want to err to look at what the statute says before you convict somebody and i think when it go to the issue of flow through profits to talk about that briefly one of things that's clear we don't have any information as to when that happens how close in time we don't know and it's quite possible given  mortgage was obtaining the funds for its mortgages from third parties hedge funds folks who wanted to invest in this so there's no record evidence that the money that comes in to fund the operations actually came from the parent bank and there's lots of reasons to believe that wouldn't happen nor is it actually in this perverse world of mortgage fraud necessarily true that a loss on a mortgage would result in a loss to your profits because banks were buying credit default swaps they were actually betting against some of these loans to fail and so we don't nothing about that we have the black box where they've told us profits and losses flow and that should be enough and that's simply not enough out of the statute for the questions thank you bottom we hear from the government about the effect on the parent company other than that it's a subsidiary that's involved in it was there information before the court beyond the fact that this was a subsidiary profits and losses from the mortgage company flow directly to the bank now the defendants characterize that evidence does go towards as a connection between the banks so it's whether it was that go towards it goes towards the custody and control fron energy owns the property and the pira corporation by owning it wholly owned in this city or it also owns the really what i'd like to talk about is the custody or control prong because i think that the evidence is stronger on that and that requires authority or controls a subsidiary by wholly own it has assets and the funds of the subsidiary under it's put on and any evidence to that effect so you're making your convicting people based on an inference that you but there's more and there's four other at that point about it and it's not like race through us on that point you know the question is did you did the actual financial institutions somehow control the money of the mortgage company the let's say that the losses of the mortgage company company indeed passed through to the bank that just shows a causal relationship to the  bank's financial bottom line it doesn't show anything about the bank controlling the mortgage companies money we think that there's a part of what the circuit got wrong that if it's under checks paying making mortgage payments after after the fraud they are if there are more than thirty of those checks why does this matter if it's after the fraud and somebody just paying more well they span the life of the fried if you look for example at notation december slash january so given that it takes a while for the mortgage to go through that indicates it's the first check so by the beginning of the mortgage payoff defendant puckett was indicating that he shows that one of the checks was returned for insufficient funds it was not returned because it was incorrect it was returned for insufficient funds showing once again that some trust think was the person being paid for these loans that  i understand your point there but i don't know if your experience is like mine but you know when i sign a mortgage usually six months later i get a letter from somebody saying your it's been assigned and now you're going to be paying these people over here the government had an obligation to prove beyond a reasonable doubt that these defendants obtained monies under the custody or control of financial institutions namely the banks beyond a reasonable doubt sure we view it in the light most favorable but are beyond reasonable doubt so it's a government's contention that that because somebody writes a check to a after the fraud that shows that they were actually obtaining money from that even where the loan agreement and the dispersement was from a different entity well it's important that the court doesn't dissect evidence and consider it when it is time to strike it would be that the court lets it all happen and so when you take all the inferences from evidence yes we do think it proves that beyond a reasonable doubt i'd like to point the court to another document which is government exhibit three asks it's for t and frankly they're not presumably even prepared to talk about things the government didn't or well the question for this court is in a search of the record whether there is sufficient evidence of the connection in the record was this to well business about the checks i get was that in the government's brief two x three pm three q i believe were they were definitely mentioned i didn't defend this reply brief when they said that there were only three tax i don't believe that two al was mentioned in that connection a good be good idea to stick to what's in the government's brief frankly otherwise we're going to have to give them a chance to respond in writing to what you're arguing now yes your time i mean argue what you want but understand just let us know when you're going outside the reach so that point would be outside the brief and just just to finish that point if you look at that government exhibit it's titled underwriting approval commitment again showing that this is the entity that was involved in underwriting and that header of it says sun trust it doesn't say sun trust mortgage it's in the same font and appearance as sun trust bank uses so if you look at other exhibits in the record that are coming from  it but sun trust in the same appearance and font as sun trust bank uses on its bank statements on its checks so we just think that we're that's showing once again that there's a connection but there is more there's evidence of an overlap much reduced to arguing about similar fonts here as a means to disregard the corporate form i mean that that's a lot about the government's case here and it's not a disregard of the corporate form we're simply looking at the fraud statute and taking its plain terms it's plain terms to talk about the custody and control if you look at the cases the defendant relies on for the corporate form let's look at the deal for example the supreme court case in that case the question was whether  it was a question of the do the foreign sovereign immunity act and the question was whether a subsidy ery was entitled to sovereign immunity when israel owned a majority of shares in a parent corporation that was separated by many a subsidiary the supreme court in analyzing whether the subsidiary should come under it still it's cited in the defendant's brief it's the main case that they say when they're talking about the purpose for so the supreme court looked at the of the statute which talked about shares of the corporation in defining whether instrumentality would be granted the sovereign immunity of the country and then said that because the statute itself recognized the corporate form the  was important and then went on to talk about the principles something very similar is true about carter which is the pilger brewing case from the sixth circuit once again the court this court looked at the statute and there the question was whether for a labor relations law these other connections showing that it's not an absent parent does have custody or control over the subsidiary and we think that that is enough and in this case let me take you back back to just very briefly the situation where there are thirty checks or whatever over the life of a low if you are there is your argument basically that this was part of a scheme to the fraud that one day into our agreement to do fraud but that the bank counts two and three where i get the number of over thirty checks there's involve both defendants and yes one so that those are checks written by defendant packet the we think that shows that that's in fact what the relationship was also defendant banyan had actually worked at sun trust mortgage and was a mortgage officer for many years and so that also he wouldn't he's an experienced like puckett he's very experienced in the industry he would know that connection to another piece of evidence is that william bruce who works for fifty third when he testified he kind of use the names referred to the banks in the mortgage company interchangeably and he said he worked for the wholesale mortgage division a fifth third bank so he didn't characterize that even though there's other evidence in the record that has him working for the fifth third mortgage company he didn't think of the subsidiary as a separate entity he thought  count six and if you look at all the testimony from the bank representatives you can see that they they really make not a distinction between a bank in the mortgage company they're asked for example where those records from the bank and they say yes and then they're asked what were those records actually in from the mortgage company they say yes ok there's you know so basically the government is trying to make a circumstantial case it sounds to me that  the fifth third bank actually control the fong of the mortgage company or i guess why didn't why didn't the government ask these witnesses directly about the banks be expert testimony and so i think that the implication is the government was in fact scrambling and i don't understand why something that would pertain to expert testimony i mean this is a factual question right but it would have  bank approve these kinds of loans that were being made so we don't have enough evidence in the record to say specifically but we think that in general that yes the thing could have exercised any any of standard setting aside the checks business again any specific instance anywhere in the record of any of these banks actually exercising control over a dollar from the mortgage companies i think that th could find the inference is that the banks did all of that because they were basically considered the same the answer is no the government has no specific instance they can point to that shows that is an example of the banks exercising control over the mortgage companies fair except for the g x three s i'm sorry given exhibit three f which is that underwriting approval commitment which i agree is you know it just says sun trust it has the font it looks like sun trust i think that you have to put it all put all the inferences together to get us to the point where you can you would find that the parent was integrally involved with the city subsidiary and when you put those relationship s evidence together with just the simple fact that it was a wholly owned subsidiary and that meant that it it had got guardianship and authority to manage the entire subsidiary  the government could see that the mortgage companies were not financial institutions within the meaning of the statute correct correct not by themselves ok that at that time right at that time thousand night so i have you abandoned the thirteen forty four one argument that i mean i thought the government was arguing that because their holy these mortgage companies are in fact financial institutions well i banks the banks are and that the relationship was so close that it's that they should be considered this whole there's a there should be there should be time that there was a scheme to defraud a financial institution because it was a financial misrepresentation upon which the victim the defrauded party relies so that theory would seem to me to require a determination that the bank relied the bank in fact relied upon some misrepresentation in the loan documents that were presented to the mortgage companies so that fair and it's your honest question about that section one specific yeah yeah i mean to get subsect to say that the bank was defrauded i mean there are two ways you can go at this somehow you might try to argue that the mortgage company is a financial institution i don't know how but you could argue that or i think what you're saying is that actually the bank itself was defrauded by the misrepresentations that the defendants made is that what you're arguing and in order to to to have proven that you would have to show that the bank itself in fact relied upon those misrepresentations correct well i think we would have to find that the scheme was such that the defendants not affected by relied upon fraud specific relied upon the misrepresentations is that proved here that because of the close connection package for example writing that first mortgage check to suntrust bank he knew that it was the bank that was asking us to disregard the corporate form to say that the bank was defrauded because the mortgage company was defrauded we don't believe that your honor we did we think that because of all the connections we found that that under the plain terms of the statute that plain terms of the statute it's not disregarding the i mean that's remarkable because the government's brief doesn't even analyze the terms of the statute it starts i mean it's like a no mas to the one nine hundred seventy s respectfully it starts with legislative history it goes on to two statutory purpose and then it talks about case law and never to your credit you're talking about the word control the government's actual brief doesn't talk about the language of the statute we think that this court should focus on the language of the statue at this point all right we're in agreement on the end look at the core perform and also just take and can to counter principle that the corporate form is ignored when that's when it doesn't actually meet the public convenience or for questions of fraud so if there's a very formal reason that this court believes that there's a distinction between a parent and subsidiary of a formal government briefly respond to a few of the government's points but there are the language of the statute matters and eighteen u s c section twenty and specifically sub paragraph one says that financial similarly in section thirteen forty four to me ask you this question  there some evidence in this case based on those checks that the loans were funded by the f b i s bank no there is no evidence whatsoever in this case that that the loans are funded by the f c insured bank and the government presented four witnesses two from each bank neither one of them said anything of the sort and in fact mr mr bruce the witness that was cited in the government's argument said no more than that any losses incurred by the third mortgage companies losses or profits flow directly up through the bank to the bank corp that's it and then just one question no question in regard to that do you have any understanding just generally as to to who made out that was checks the record asylum as to why mr y mr pocket signed him under the circumstances under which he signed them but the key thing here is corral a g because the crimes occurred at the time the loan applications were submitted in two thousand bank and there's nothing about mr park writing mr perfect writing checks months or even years later the can go back and establish that their crime was committed at that time the mortgage application in count two was submitted on january twenty fifth two thousand six mr pocket wrote a check exhibit two k in april of two thousand and seven and more than fourteen months later it doesn't this doesn't do anything to establish the crime was committed in february of two thousand and six similarly in count three the application was in october of two thousand and six and doesn't by itself you're saying you don't know any reason to tie it up now conceivably the money could have been an advance by the the bank but you're saying evidence that your honor that that would be that would be the kind of speculation that the ninth circuit said we can't gauge and in the bennett case they're presented with a very similar sort of argument that that that the court should speculate as to a degree of ownership or control based on a number of facts that mike the facts in this case simply don't support the kind of inference really talking about the distinction between a fair inference and mere speculation and i think any any conclusion based on checks written long after the crime was allegedly committed that amounts to nothing more than mere speculation that the transaction the first circuit even a rebuff ok to more recently eleventh circuit there couple of others in each of those cases the government was able to show yes there's a line of credit from the parent bank to the subsidiary there was a flow of funds from the parent bank in subsidiary and they knew exactly th that was what was required because that's what the prosecutor said in opening statement but then they didn't prove it they didn't put in a single shred of evidence to prove the any funds move from the parent to the subsidiary and the last point i want to make your honor is with you to assert two final brief points one is that you know we're asking asking the court to rely on bouchard and the and bennett as opposed to the whole case with all due respect a judge sent help and i point out the what what bennett and bouchard had to say is completely consistent with what this court had to say in the everett case back in two thousand and one where it noted that the purpose of section thirteen forty four is to protect the federal government's interest is in the church of financial institutions and there is nothing in this case that in any way affected the federal government's insurance isn't interested in  insured bank finally let me note that the government at the end they are centrally says that ownership is sufficient to you that the mere ownership by the parent of the subsidiaries sufficient to bring this case within the bank fraud statute and as we pointed out in their brief that any entity owned by an f d i c insured bank is within the scope of the bank fraud statute that sweeps in all kinds of non bank at the tease for you that we noted in our brief page thirty one where we noted some of the insurance company in the tax service c insured bank cannot of the parables in company they are wholly owned subsidiaries that are tech services that are reinsurance companies that are all sorts of other things and we submit that any any interpretation of the statute that brings those within the scope of the bank fraud statute it is way beyond i wanted to dress a few sort of record issues siler the question of when the funds were obtained we have the record these hard ones that show when the loans were dispersed it would be very easy to look at the dates of when that happened and there's nothing though that follows and the specifically the mortgage companies knowledge of misbehavior of these sorts of practices that they knew and expected applications to have basically stated income loans there was nothing at all precluding them from answering the sort of questions of this court's talked about of the government talks about things like close connection or affecting the bank none of those things are the words in the statute it's obtaining money that's in the control contest city or ownership of the if you see it your bank that's not here they miss the statute on regular wire fraud they thought this was close and they tried to make it close enough the entire time we asked the you know a lot thank you is is there anything that and i'm not attributing any bad intent to the government at all but is there anything that the government argued here outside  government's brief that you feel you've not had a chance to be prepared to respond to you know no but i will say that i think when the government starts making representations to this court about the ways in which this mortgage company can but the bank control the mortgage company that are completely outside of the record and i think are probably her best attempt to construct a theory the problem is we don't know if those things are true or not true or not and quite likely they may be untrue and if they're untrue we may be here if this convictions affirmed on some basis that they've convinced this court that that's how the bank