court my name is daniel drake i'm an attorney from phoenix i will take the first five minutes of argument reserving one of you point that microphone to your mouth and speak up a little bit is that better better all right i will try to speak more loudly for my benefit i'm the one that doesn't hear very well so thank you but you've got a big voice anyway i'm going to save one minute for a bottle and use four minutes mr dichter will follow and address the second issue of the ineffective assistance of coun claim ok this is a ponzi case and that's what the government argued it took a seventeen lines to get into it in opening statement what it did not involve however in this case was any evidence about a real business that there were real assets that had value and so because of that and the testimony about measures that were made to ensure that this business ran fairly that there were compliance officers there  accountants there were auditor's all those things really meant nothing because one of the problems i have with that argument is that under stand it the fund raise some were around one hundred thirty million dollars that is that right  it was quite substantial ok but the evidence showed that an awful lot of that money was used to fund loans to what the evidence suggests were shell corporations and which then obtain additional loans to pay off the original loan so why isn't this like a ponzi scheme where the new money is being repaid to investors who got in first all right the basic concept of a ponzi scheme is that you get money and you don't have a real business it is simply a method to take new money to pay all with no underlying assets there were underlying assets here a viable business we assets came from from the investors and i guess what i'm looking for here aside from own from using some of the money to buy real estate that obviously would have some value depending on what the real estate market is at the time the investors were being promised you know these exorbitant rates of return fifty hundred percent return on the investment but the money was actually coming from the new money that came in i mean isn't that a scheme what am i missing here well again i come back i come back to the value and yes there were payments that were made from old investors to start payments made to old investors from new investors and the new investors in some degree knew that they were going to take out some of these other investors that happened for example in the bo dell situation and things of that sort but we come back to this basic issue of what is the harm what is the harm in letting the defendants establish that there were some value here that there were real assets things of that sort the harm is that you but you have to give it was structured precluded from doing that if you read the judges and if you read the judge's order you would think that if you read the judge's transcript of the opening statement i do believe that this transcript and i don't see it so since you now finally provided us with a copy of the line fourteen through line one thousand and that's where mr jones defense lawyer explains to the court that it's essential to present this evidence otherwise it's just a big failure  what's the jury going to think when it gets a big failure let's move now to s e r eight seventy two ok it begins at line seven the court if you wish to pursue this in opening with specifics you run the risk that i'm not going to allow you to get into it in your case so that your case he goes on and warns them again from getting into it he says that's the risk you can take if you right all right and you're going to have to tie it up but judges codd's us do that all the time tireless you know you can't have everything coming in at the same time and judges often say well i don't see how this fits and now i will let it then provisionally but if you the evidence excluded what's the point of standing there and arguing the importance of the evidence if you can point to me some place where the judge actually excluded the judge made it clear your honor and i've stood in front of other judges  have made it clear to me with words like this that this is an area that i ought not go into that i ought to stay away from this that it's a risk though i'm going to say i can't speak for my colleagues but to me looking at the language it looks to me like the judge was telling you it's in your it's your judgments your professional judgment you should be aware of the consequences if you get into something that you can't later tie up i may strike it this is this is the kind of judgment the lawyers are quiet to do and court there were repeated instances and weaves we cited these in our opening brief there were repeated instances where they would draw close to this issue and there would be an objection and the judge would remind the juror the the i'm looking at f d r one thirty seven starting at line three down the line twenty five it's the colloquy with the court with regard to denying the motion for mistrial and as i colloquy he was essentially saying look if you want to pursue this theory that the conservator was responsible for the losses all let you get into that but you're doing pointed out at your risk because part of the problem with that defense as i see it is that it doesn't address what happened before the conservatorship which is the heart of the government's theory of fraud that material misrepresentations were made to induce the investors to part with their money at the very beginning and so the question in the courts mind as i read that transcript is how do you tie in the defense that the conservat responsible for all these losses when it doesn't address the question of the truth or falsity of the representation is made prior to the investors to get them to part with the money if it all goes the state in the manner in which he wrapped up the affairs of the corporation how does that address the truthfulness of the representations that were made years before to the investors to get them to enter into this investment in many instances and my my time is up and mr director is there but in many instances your honor the investors made their own choices whether to get in  this there was an attorney by the name but this request has to be informed and if the if the investor is not truthfully informed then our case law says that's not choice at all there was an investor by the name of i mean a lawyer by the name of drake who came down to the offices and sat there and review the evidence he went back and he told his clients i don't think i could do this any more i get out of this his clients put more money in the over the lawyers comments that's what happened in this case that's the way this happened and that's what we talked about in terms of the greed of these people trying to get into this thing and and and get rich at it ok was there ever an offer proof made by the defense lawyer with regard to what evidence he wanted to get in there wasn't any i'm you know i don't think the  got into that because of this issue of specifics he was concerned about not getting into specifics and not delaying the trial now but you do that the presence of the jury and the courts you make your record well known wasn't your right  it it's something that's often done it's should be done it was not done in this case as i said that the court didn't seem interested it wasn't the thrust of what you wanted was that the conservatives said that it was worth sixty million whatever was left and that the conservative one up getting about thirty million for what he said was we're sixteen that's part of what they were trying to get in as of right that was there was a challenge to what the conservative did they did just they disagreed with his assets and to the extent that the judge could have parsed some of this out and taken part of it and said ok you can get this in but you can't get this and it would have been worthwhile it would have left them with the defense it would have left them with a good faith instruction that would have told the jury it's not a part partly is that you really don't have any defense with the way the judge ruled so did the defense propose a theory of defense instruction i normally give such instruction and i'm trying to scan mckay's i can answer that i'm sorry  victor my client's lawyer couldn't read i mean that's the start the finish and the end if we were to take the government's approach and the sides don't disagree really on what the standard if is the record sufficiently developed was  the reasonable would it have made a difference if you didn't decide this issue here and send it back down for a hey b s in a year or two years or whatever it will take to get back up here my guy stays in prison another two years or so and the only thing that would be new is that his condition never improved he was eliminated from the federal panel and he's retired to mess around in sailboats and we can leave it for whether it's a better end than before he couldn't read he couldn't absorb what and it's not like this was sort of a philosophical thing this is a neuro a neurological thing attested to by michael powers is one of the from this for thirty years and i know now he'd suffered it for about a year he had suffered from from cross vision but you know like thirty years ago i was in a lot better shape than i am now and i didn't have cataracts thirty years ago when i had him until this is just how it is for criminal defense counsel he'd never been a criminal defense counsel but he said this is just how it is and the point of this is is he didn't know dennis jones for forty years like every other judge in phoenix arizona did that did criminal work jones was an honorable and an honest and a really good defense lawyer for a long long time and what happened he couldn't read so what's the judge doing contradicting dr powers he i submit his colleagues said in the first trial this is like groundhog day a what does that mean it means that jones keeps repeating and repeating and repeating and repeating the same thing the paralegal appointed by the court not connected with the court's confidence in the outcome of the trial has been underlined there is a reasonable probability but but for the unprofessional lepper ever in that case not getting a cause of death expert the result would have been different the guy couldn't read there were five thousand exhibits in this case he couldn't even take the first trial transcript and read the questions to the witnesses and we have affidavits to that it to that extent this is to end up and i really appreciate the time instead of dealing with the counsel's well founded concerns us his medical ability to adequately defend his client and instead he after giving it in trial in dr phil diagnosis in a pep talk and directed eighty proceed one might say in the words of a recent commentator on our criminal justice system drawing on the words of a nineteenth century boston barkeep one michael t mcgreevey nuff said couldn't read what  thank you may it please the court my name is dominic lanza represent the united states i want to start in with the first issue having to do with the purported evidentiary ruling i think the court hit the nail right on the head there was no exclusion of evidence and i want to  in their reply brief the defense put a lot of emphasis on the january second transcript and we then submitted the supplemental excerpts to provide the court with the full transcript from that hearing and i think there's two reasons why the defense is in aid by their reliance on january second and i'll call them to context and colonel logy context the defense in the reply brief cited very narrowly some out of context statements when mr jones in his opening tried to get in to pose conservatorship events and i stood up and said objection based on your ruling if the court looks at the entire transcript we provided the supple excerpt it's very clear that judge suharto went on the record before opening started and said i want to memorialize for the record that for purposes of opening statement only we are not going to get into specifics on what happened after the conservatorship and that's reflected in multiple places in the actual transcript from january second on page eight seventy two and eight seventy three when all this objection was going on i then explained the solution was that even though we might be able to get into this later we decided it's not fair game in opening and then the court there's several places where judges who are he says well when the time comes we'll figure out whether all this is going to come in so just based on january second alone the judge wasn't coming anywhere close to making a for the rest of trial exclusionary ruling he was simply saying as is judges do the court had on openings aren't the place to get into evidence that might have very nuanced for a one in four zero three things that need to be decided in the context of the actual trial and that's all the court was doing he was saying we might get into this later if you want to get into it now you're at your peril and the peril is if i ultimately decide that you're not going to be permitted to enquire in this area you will have represented to the jury that your defense case is going to show this and at the end of the case the government's going to be able to come back and say he promised you an opening but where's the beef exactly and that's a very common ruling that trial counsel deal with all the time you need to make tactical judgments about how far you're going to go in opening based on what you think you're going to get into later and i want to turn second from context to chronology separate from all of that this happens on january second the matter that we cited in our brief happens the next day we now that the trial is actually begun and evidence is coming in that's the transcript that got referenced when defense counsel's up there where judge you are he says if you want to get the stuff in about cell get it in all allow you to do it so whatever ambiguity may have been created by the comments during opening statement the january third comments later during trial were utterly unambiguous the judge said you can put this in if you want so there was simply no exclusion now separate from whether the issue preserved i just wanted to amplify on a point that judge tolman was touching upon and also judge pierce saw you know what what is the evidence even though they didn't make an offer of proof that it would have showed perhaps conservators cell could have gotten more money for the collateral that fact has very little if any relevance to the things that were actually contested in this trial whether or not conservator sell should have got sixty million or more doesn't enable somebody running an investment fund to lie about the fact that their in house counsels been disbarred it doesn't allow them to lie about the fact that they say they have a twenty million dollar insurance policy and they just don't have one whether or not you have the most collateral in the world and you are solvent investment fund you can't tell people i've made three hundred loans in the last year and a half in all of them have paid off when in fact you've only made twenty and fourteen of them have gone into default the point being that the theory of prosecution in this case was and we said explicitly in our pretrial pleadings and in opening and closing is that whatever good intentions the defendants may have had when they started made on they had a fork in the road when they started having  lied about material things about the investment that this court has held time and again and treadwell and more narrow investors are entitled to a fair picture about why they're investing yes but they're entitled to the rest of the picture too least to show that the conservator senate some point there was sixty million worth he thought there was sixty million worth of assets there and that he actually cleared apparently about thirty million and then apparently over fourteen million of his expenses too but normally when i've got a ponzi scheme there's zero right now and it seems to me and maybe it was counsel's failure to push the trial judge it seems to me that the defense should have been able to show that elisa conservator thought there were sixty million there because that some evidence that it wasn't a complete sham even though they were obviously wind on the wind but the be something the defense could come back with otherwise one of the gun but i have to have a couple responses to that first it's not accurate in the record doesn't support the notion that conservator self thought everything was worth sixty he explained during the post trial proceedings related to restitution that he got appointed to take over this big mess of a financial company and when he took over the first thing he did was look at the reports that the defendant had prepared and he said well they say it's worth sixty million so in his initial report to the bankruptcy court he said it looks like it's worth sixty million and then as he actually started investigating these things he learned that all the collateral was screwed up so that's point one point two is separate from what conservator sal may have thought about the collateral there was an awful lot of evidence that the defendants were allowed to get in about their own subjective understanding about what the collateral was worth and that's why this isn't a complete deprivation of a defense case we cited some of that in our brief like for example tim abraham the conservator was cross examined at extensive length by the defense about the fact that may thousands own internal spreadsheets purported to show that the collateral in this case was actually worth six hundred million dollars and that it was a really solvent fund and all of this stuff was valuable scott johnson the president was asked on cross examination admitted that when he joined the company he went through every file and looked in there and it appeared to him that there was an appraisal that supported the value of the underlying collateral so whatever conservator sell my been able to offer about his initial mistake and reliance on their own documents there was a whole lot of other evidence that had to do with collateral and you know some of the things that were said you know mr dichter came up here and said well dennis jones is now retired from the practice of law he isn't on the c j panel anymore and he's just sailing his boat how do we know that stuff that's not in the record i don't think many able to is good evidence of not being competent right but in any event that this court case law is very good going to this court's laws very clear that hey vs proceedings rather than direct appeals or new trial motions are the proper procedural vehicle for portions we try to move on to the next exhibit mr jones jumps up and says wait wait read the bottom and then he reads it when i was preparing last night i found at least six different instances i'll point the court to one of them it's on e r two forty one in two forty two he's examining a riddle how big of them on the screen though i mean there's the statement is he can't read period it's not a question about he can't read certain font sizes pages to forty one to forty two robby riggs a witness is being direct examined by dennis jones he starts talking about a document he says i can't really recall it mr jones says why don't i refresh your memory he runs up hands him an exhibit and then at the bottom of page two forty one starts reading from the document portions to refresh robby riggs his recollection i found at least six or seven examples of those just last night i'm happy to go through but the point is it is dixit by the defense to say he can't read when time and again there are examples of mr jones cross examining witnesses by reading verbatim portions of very detailed financial contracts and getting them to getting those witnesses to agree that they made certain missions in their court has no further questions thank your honor i checked the briefs i did not find a citation to the an attempt to offer something because at that point the the defense had been had been chased chastened and scared away from this  issue and so my point in final is that had the court permitted this evidence the same instruction would have been given about good faith and the jury would have had a chance to evaluate it and make its own determination cases like a post mortem or an accident reconstruction the difference is of course this was gone going and pointed out by the lawyer during the first trial and the second trial and the first trial obviously his inadequacies were mas sabermetrics in our brief some may ridicule me for doing that but i think the government put on eighty five percent of the witnesses eighty five percent of the direct and the cross was less than forty percent of what it had been in the trial first trial no conviction second trial they convict the two remaining defendants in either two hours or three hours depending on who's counting and what do we do without that i mean i've tried cases where we try to three time right and the third trial moves a whole lot faster than the first two did because everybody knows what the evidence is right but listen please what i said not not he didn't the government took the same amount of time to put on the same number of witnesses less four so the government put on eighty five percent of the witnesses they put on in the first trial and the transcript length of the direct examination by the government lawyers is eighty five percent of what it was in the first  that mr jones was hearing something in the second trial that he'd never heard in the first trial my position is that didn't matter what he heard in the second trial he was incapable of reacting to it because he didn't do the first try but the judge said in ruling on the motion for a new trial that he was influenced by the fact that the defense was in essence retrying the same case that they had had a dry run on what the judge didn't know that then that just one judge said well the judge said a lot of things your hon the but i mean did that isn't that what the judge relied on in part when he said i know why does it want it now three to trial i disagree and i don't see deficient performance the trial was forty percent shorter all on the defense side it had nothing to do with the government the government put on the same one of the defendants yeah but that made no difference they put on the same witnesses they put on the same evidence that's what i'm saying please eighty five percent of the witnesses eighty five percent of the direct it's the same the government did put on the same trial the first time was the second time and the defense didn't get why because they were incapable of doing it right because the lawyer was not even able to read if all he had done was read dennis willing checks cross examination of every witness we would have probably got or might have gotten to the same result who can say we wouldn't have gotten to the same result in the first trial that is a hung jury who knows what would have happened what is the value of a chance the guy couldn't read the transcripts in other words could he say the words yet jump ship jump see the dog jump what does that mean his brain was not understanding it what's your response to mr lanza's citation to the workings of the record were in the middle of examination of witnesses counsel stands up walks asked to approach points out a paragraph in the document raise the witness for reason so after at a five thousand documents he points to four five or six  examples where there was a moment of lucidity a moment of able to he to read two percent of the time but ninety percent time he was blind well i really believe that if you read dr powers medical evaluation of him yet that's exactly what happens but why shouldn't we send if this is a viable issue and it may be why shouldn't we send it back to the district court for a full blown evidentiary hearing on a properly filed papers corpus because well i mean the practical ramifications are is that he probably doesn't wind up with a lawyer on a hay vs unless somebody winds up appointing one for him which is not at all likely to happen his family and friends would scrape together some money to hire me probably aren't going to be able to do that again and he'll serve another couple  years in prison while that happens but obviously we know that that's the that is the normal result this is an unusual case because as was said when he couldn't read i mean really he couldn't read he couldn't read some of the time you your honor i you know i understand what the weight of the law and the weight of custom and tradition in this circuit is and if that's what's going to happen obviously that's what got him to the point i'm trying to make is that and i thought about the sleep part and i thought whether a club or a remark would have been you know might have been well i mean if he had been asleep what difference would have been made in this case or another one would have been well even if the judge had let him put on the defense this guy was incapable of putting on the defense and i thought well that was nice if the ninth circuit wants to say you lose because your lawyer wasn't competent enough in this case to be able to put on a defense if the government had not in help the court find its way to not allow the defense i guess i'll live with that ruling i understand what the court is likely to do here what i'm saying is that at the end of the day and yes i had a sailboat forever too and i don't think you're incompetent if you're sailing i guess what i said in my opening it may have been a better result for him but the fact is that he's not on the panel how do i know th ok i confess i know this because there was a letter from the federal defender's office taken his cases away and because i called dennis and asked him if he was still practicing law and he said he wasn't so yes it's not in the record sue me ok that's it we don't