good morning may please the court michael caruso federal public defender's office on behalf of carrie kelley actions have consequences and so do the words the lawyers use in litigation and the consequence for lawyers is found in federal rule of evidence eight zero one d to see and that's essentially what this case is about with regard to miss caylee's trial this case prior to miss croons stron says trial the government filed a bill of particulars where they quite clearly and directly said that the victim of the theft that was at the core of this case was the corporate employer of miscreants stross and miss caylee not only did the government make that statement before trial they made similar statements at the rule twenty nine stage actually three separate statements that advance the theory and assertions of fact that the defendants in this case stole these medical products from their corporate employer groups ross's trial the government in closing arguments i think with the clearest expression said well in point of fact in counts one through six the superior interest that was defeated from which the defendant converted and took by fraud was from her employer were we were not saying it was the hospital now this theory and these assertions of fact stand in stark contrast to the evidence an argument elicited at miss caylee's trial at miss caylee's first trial which i thought their argument was that first of all there was nothing wrong with what they did that they could change their theory as to defendant but that with regard to the first defendant that she herself was looking at what she had done they had a certain theory but with your client she was dealing with a lot of folks that were doing a lot of things and the main thing that they were doing was stealing from the shelves as opposed to having the hospital give them some things that are expired so they're saying also different has the same have a right to use a different theory but they're also saying they had different facts is that not correct so caylee's trial so in that sense there were different facts you know in the in the first trial the government's cooperating witnesses testified that the that there was no theft from the hospital and if you fast forward to miss caylee's trials these witnesses were now on board with the government's new theory is where the same witnesses who changed their stories yes your honor assume they were cross examined a great length about that change i mean that they were they were cross examined but what the prejudice that we suffered at her trial was that we didn't have the evidence of the government's prior statements about who they asserted was the was the victim of the theft so yes well while we are we agree in large part that the government through a prosecutor may change the theory of the case they don't have the right to hide that change in theory from the jury and that's the main evil that happened here so for example how is it be hidden from the jury if you have a witness a who says in the first trial  know here's how i got the goods they were expired in the hospital said your nice guy we're just going let you happen million dollars worth of goods first if he comes to the second trial and someone says you know what a style i'm at i would think the jury is going to know because any decent defen attorney is going to cross examine them with the inconsistent statement right but that's only part of the judge barnes so there are there are two parts to the defense in this case the defense that we wanted to put forward certainly these witnesses were cross that cross examined with the exception of the issue of one of the cooperators we weren't allowed to cross examine him as to what his lawyer said at his sentencing which is which is a standalone issue but what we were not allowed to present to the jury was the bill of particulars that was filed in the case excerpts of the rule twenty nine argument and excerpts of the closing argument how does that help if you've got the testimony of the witness you can show the story not only occurred with the witnesses but it also occurred with the with the prosecuting lawyers so if you put on one side the inconsistent statements of the cooperating witnesses which we had in large part with that one exception but if you add in the dog and prosecutor who after years of investigation and his review of the evidence came to the conclusion that the victim of the theft was the corporate employer that gives the the jury a complete picture of what happened the investigation occurs the indictment is brought the prosecutor  numerous occasions that the victim was the corporate employer the cooperating witnesses testify in line with that theory the first trial ends in a not guilty verdict then  trials the cooperating witnesses shift their stories and now say for the first time we stole from the hospitals but the jury isn't not given the piece that the prosecutors on three separate occasions asserted as factual matters to a judge and to a jury that the theft was from the corporate employer so if you put those two pieces together miss caylee is left in a much stronger position with the jury and we know she she was in a strong position to begin with because her first trial ended in them in a mistrial or a hung jury in large part with the exception of one count so we can see that it was a very very close case from that mistrial and i think we know if we have the evidence that came from the prosecutor's own words and his own mouth that heat that he believes after years of investigations we always tell the jury what the lawyers say is not evidence we say that over and over again we do say that and i think everybody in this room has has practiced and presided in district court and i do believe while while true that statement is ripped from its context if you look at the eleven circuits pattern jury instruction you can see the context of that statement is judges and structure is the evidence in this particular case is what comes from the witness stand the law what the lawyers say essential is to guide your view of the evidence but that's far different than what happened here it's apples and oranges what you did there's there's no context or the context is not the same when we're talking about getting lawyers words admitted into evidence and the plain language of the federal rule of evidence permits those there i don't think there the dispute from the other side that the government is a party opponent in a criminal case the prosecutor is an agent for the government and by the plain language of ada one d to see andy these statements are statements by a party opponent and it seems to me a stretch to argue that a very basic simple instruction to a jury trumps the federal rules of evidence so we think all  five of these statements the bill of particulars the three statements during rule twenty nine in the closing argument come in under that rule and should have been admitted at miss cayley's trial is to have a record question as i understand the record there was no restitution to the employer all the rest to sion was to the hospitals is that correct that was ordered by the court in miss caylee's case there was an order restitution that that's one of our issues in this appeal and now was that was ordered to be paid to a hospital yes your honor and there was no restitution order in this case and her conviction to the employe that's right and that's because under the evident evidence showed that the products were primarily taken off the hospital shells i'm just trying to make sure i'm just saying what the evidence was in the case is that correct that's why the employer employee got paid by the hospitals for everything and then it was taken off the shelves were not delivered are however it was stone and that the hospital got the restitution i believe that the hospital got the restitution new york methodist right because they're the only entity that submitted to a claim for restitution or what was their climb for restitution about their their claim was that they lost they lost product now i mean that that was one of the issues that they didn't really know they so the way the evidence i know but what was the evidence that they took it off the shelves they replaced new products and took off products that was one way is that correct they will certainly the government presented evidence in the form of cooperating witnesses that they took product  at a various hospital just out that was the evidence of your aka but the hospitals claim restitution and two million dollars i think that was the approximate amount for property that was at the hospital that was taken from them in some manner is that correct that was the claim but of course there's no there's no underlying evidence that that claim was true what happened at trial there was a representative from new york methodists who testified and this is the issue regarding the chart and it also flows into the the restitution issue he had very little knowledge of what had occurred ten years previously what happened is that he heard through the grapevine that another hospital had suffered a loss so what he did is he contacted at the con a johnson and johnson subsidiary to get evidence of what new york methodist spent through at the con for a three year period he got that evidence from ethicon he didn't do any independent research and we never were given the underlying data that he received if he had received any at all from ethicon he then also talked to his distributors and he looked at operating records and all they had was sort of raw numbers of the number of surgeries performed for three years and the amount of money spent through on through ethicon for those years and combined with the testimony of one of the cooperating defendants who changed his story and said that he took products from the hospital during one of those years so we think with the with regard to the restitution you know under the mandatory victim's restitution act the government has the burden to prove actual loss and what if you if you look at the transcript of the restitution hearing what essentially the judge did was what's forbid a sort of back of the envelope guess as to how much restitution was owed he took it he took the numbers from those three years and then essentially subtracted the spend data from the last year from the second year and came up with this number where and he imposed restitution but without the underlying data of of of those numbers the defense was severely limited in how we could challenge or or try to combat those numbers you know we were never given information about you know when the surgeries were performed what products were ordered and when they were ordered when they were delivered we just didn't have that information like i said we had these raw numbers that we couldn't challenge our right to confrontation was severely limited and i think under the mandatory victims restitution act that's just not sufficient to take these raw numbers and mak it was about he got about two million dollars in product yet from from them so why would not be relevant it from them but but that was never it was never tied to any hospital's actual loss i mean under the mandatory victim's restitution many hospitals are we dealing with here that got rest in our case one new york not a lot just one and we never had the underlying data from new york methodist and that's you know what we're here today come complaining hospitals danks it said he actually got ten million dollars worth of product paid two million i mean hospitals where we potentially dealing with here  the government would know better than i but a dozen i mean there are there were a number of hospitals involved but again the restitution was was confined only to new york methodist the cooperating witness who testified that he was the representative from new york methodist i don't believe ever gave the jury the jury or the judge a number of what what he said he took from that so there's no evidence from frank number what he thinks i say the appropriate number is zero your honor because they have a burden to prove actual loss and they and they have been and they have been proved out loss so you've reserved three minutes  the inconsistent positions and i think a couple of clarifications to the record that hopefully were evident from the brief but let me go over those again what happened was the government indicted this case there was no identification of a specific victim in that that's because the statute doesn't require it so transportation of stolen property statute the stat the indictment did clearly allege that the defendants including caylee were dealing in property to which they had no valid right title or interest government never changed from that position at any trial in any pleading even during the trial it was on the record as saying kerry caylee had no right to any of these items of matter how are they are work wired by her sales representatives is simply no deviation in that so when it comes to kerry kelly there was never been any inconsistency the defense in the green stross case back in two thousand and seven asked for a bill of particulars and the court granted that and the government submitted a bill of particulars that initially identified not just the employer but also the hospitals as victims based on the different circumstance of the k the record is unclear as to what the basis for the court's subsequent ruling was but it basically came back and said i want you to pick one victim for purposes of this case and then the government submitted a revised bill of particulars where it said the victim for purposes of the case with respect to de jennifer the victim as to each of counts two and six was ethicon so we're talking about only that's the exact language of what the government said in that bill of particulars which is docket entry one fifty nine so these claims about a global statement in the case to use mr caruso's language as to who the victim was is not consistent with what the government represented and the government took that position i think for a couple of reasons one was there were  schmidt dealt primarily with suture products which is the kind of string you would use to to tie up wounds and the debate i mean that's not really distinguishing feature well the distinction is this it does matter in terms of what she was able to do with the hospitals in her case the evidence was that she was basically given this stuff back for the most part by the hospitals and that's why it does matter what the type of material is she had an obligation to her employer to return those things to me i think all right she was in a different department so she dealt differently and that anger sadness and that's that's a fact that she dealt with sutures isn't it doesn't seem like a real distinction i would agree with you judge as a mom but you clarify the point better than i did th there are factual differences with her and the key one in terms of how she got the product is she was given this stuff back or at least that was the defense theory and the government evidence was was basically can see with that and then instead of returning it to her employer to ethicon as she was supposed to do she went and arranged for it to go to caylee so it could be resold on the black market so the debate at that trial was about whether that was the stolen property that was being dealt with other sales rep as became clear at the trials and there was testimony to this effect at the first trial involving grooms just but it certainly was more clear in the set in the first and second caylee trials is that they walked these items off the shelves no claim that they were getting these things with the hospital's approval and then dealing in them that they still i mean testified as plain as day that he would walk in through the back door of these hospitals and take the product out and not only that that they would inflate the orders for the hospital because the sales reps had the ability to essentially stock the hospitals themselves they relied on them to do that they would inflate the orders come in walk the product out get it to carry caylee caylee would send it down to dance in florida and would go on the black market sale that way so there are fundamental differences so both factually and in terms of what the government actually represented as its quote unquote inconsistent position the mr bruce's argument is represent single conspiracy right i mean yes i noticed that the indictment itself charged sort of three objects may not be the right way to describe it but faffed you know fa then i guessed something that effect would go to the group in the caylee case but the one of the other objects would have gone to the grand stress case it could have read i think the statute there was a there was an additional theory of the conspiracy that was dropped out of the caylee trials are a separate object but in terms of the statute itself the stolen property stand statute the trial but here's the thing i mean grant's trust was still if you look at the indictment is still identified as a member of the conspiracy and so i mean it seems like her role in it and the part about her not about her alleged theft from ethicon as opposed to  hospitals would be a relevant consideration i think it's certainly relevant testified though for the defense at the caylee trial and so that issue of the the opportunity present her account of how she acquired this product was was put before the jury and as judge barnes you also pointed out there was extensive cross examination of the sales reps who testified that caon and schmidt about suppose it changes or evolutions of their testimony from what they had said initially to the grand jury again i don't agree that it's as stark as mr cruz or characterizes it i think you go back to the first case and they are clearly references by witnesses and by the government to the fact that some of this product was stolen at the end of the day that that's true why shouldn't something like that be allowed to be used to impeach mr tarzi if mr tarzan had been asked for example you know didn't you originally say that  didn't steal these things were you you hit the nail on the head right there because he wasn't there was no impeachment and i did so i am asking the question but but but but maybe there was no impeachment because there'd been a rule in beforehand that there wasn't going to be able to testify on direct examination that he stole the products that was mr sharp scenes where and so the connect is in there he certainly said he walked these items out of the hospital so that word it's not as if he testified i stole these products that was the label that mr sharpstein was using in his advocacy back for him ten years earlier there's also no impeachment because before defense counsel tried to introduce this mr sharp seen statement from sentencing the question was asked do you remember your what your coun said sentencing this is now ten years earlier and he said he did not so there was no impeachment to the sharpstein statement at all it certainly from a defense perspective had relevance to try and make a point or reiterate to the jury that  tarsus story had changed from what he had said initially but i think we run into a couple problems on that first of all this court in kendrick i think is about as clear as can be in saying that statements and arguments of counsel are not evidence not just in the jury instruction formulation that we've all familiar with from trying cases but that from one trial to a second trial it's untrue but aren't those cases involving things like opening statements closing arguments which seem to me to be very different from a sentencing proceeding where where the attorney is asking for a sentence and is basically the mouthpiece of the the defendant they're acting as his agent in that advocacy of counsel and i think that one is more of interest one of some more of an argument the other seems like more of a factual representation i don't know i mean that's that it's asking you your thoughts i i understand i don't see it as much of a factual distinction because whether we're talking about again should not use the word steal so we're talking about a label least in the context of what his is testimony is and course sharpstein also said in that same oration and this is the the additional problem with all this there was a lot of content in what mr sharpton was advocating a court that haley did not proffer and presumably would not have wanted in front of the court including the same said look he had no right to any of this stuff that what he did was wrong and also representations in the course of the argument that caylee was the ringleader of the scheme and that she picks a live one of a kingpin in a drug but saying that he had no right to it and i mean we all know what he was doing he was trying to not lose acceptance of responsibility while trying to you know represent the conduct in a light that is most favorable to his client so the fact that he said he's not you know he knows he did something wrong i'm not sure that this is back in two thousand and six my recollection of it and i don't have a copy of it in front of me now is that it was so it was not specific as to that he took these products and that he was not entitled to the products i don't know whether it was specific and i'm thinking if there  sort of a written statement or he says orally you know they were expired and they gave them to me versus a lot of them out than that something that could be seen you don't know the answer to that i don't you understand when he sentence then is the position of his counsel essentially it's not that big a deal i gave it to him he didn't steal it was that there was and i don't think he put it in quite those terms of that may have been the thrust of it that this isn't as big of a deal he wasn't entitled to have this stuff that was the thrust of it i think that's right i don't think that's how the language quite came then cut to how many years later after the trial the convictions on the two thousand and sixteen so ten years later and years later his given a different story there was substantial cross examination about precisely that issue going back to which the court allowed full indulge without going to consistency if it didn't deal with his plea it dealt with what interviews with investigators i believe it dealt with grand jury testimony it dealt with prior testimony in one or both of the earlier trials the the trial in two thousand and seven or the first trial in two thousand and fourteen there's substantial cross examination of that point there's no possibility of the jury or whatever form it was now his story is a very different was that made clear that i think that what what was clear to the jury is that he had not used he had not used words like steal you not talked about stealing the property ten years earlier in they had every opportunity consider that i'm asking back and if again harsh it was right i mentioned he's want to in addition there are other witnesses both cast canyon and schmidt who are the other two sales representatives testified for the government talked about walking products same thing walking products out of these hospitals so he was not the only witness who said that beyond that you have the evidence that was referenced earlier just to be clear what he actually what mr sharpstein actually said at the sentencing hearing which i would consider more in lines of a proffer than an argument which is why i think it's different and the other cases was that mr tarzan was selling medical supplies to hospitals from time to time and hospitals would have supplies that would become obsolete if not it's not necessarily due to expiration but due to the fact that new inventions new developments and surgery exist so the hospitals would have an overstock lot of supplies that he didn't that they didn't need  anymore and the supply representatives in the people that tarzi dealt with at the hospitals gave them they didn't want the supplies anymore which is a very different story and saying i stole them well i think the government had its evidence at that time that these were stolen the stolen items i don't disagree i mean i don't disagree that that's the case but i guess my question goes more to why shouldn't this have come in i mean you know what i'm saying  do and the summary answer and that seems like my time is over but to answer it feel free to respond first of all we have under under the law again these statements are not evidence and i think kendrick forecloses this number one absent at least impeachment which again we don't have on this record this is not impeaching testimony that tar she gave during the during the trial or gave during his direct examination as part of the prior inconsistent statement ok i thought they cross examined him with some of the no they didn't allow this statement by his wire but i thought he was cross examined on some of the par and consistent statements exactly right judge a light at the so this would have been cumulative arguably i have that he had previously test and they cross examined him about that he require a card these legitimately from the hospitals when they substituted newer products for older devices ok so he jury that he had made the same type of inconsistent statement that the lawyer said before yes and there may have been more than just the grand jury ok so ok then i have one of the think it's hearsay so it's now whether it's admissible was an admission of a party opponent is that what they're now says he is but he's not a party opponent so that's what i'm stuck on me with that sure well i think that's one piece of it i think and you can't you hit on the important point in all of this analysis about the admissibility of attorney statements it's not simply the hearsay exception and you have to have to for one and for all three both of which we argued are independent grounds to exclude the sharpstein oration what that would show to the extent it it would simply mean that it is not hearsay in the sense of being a admission by tarsa and i think the defense of logic was that this was although it was sharpstein saying it and even though it wasn't adopted by mr parcher during the  he was the most important witness in the government's case and in our view because you can't look at his his testimony and isolation he came in and he testified he was a sales rep he provided products to carry caylee to resell on the market he also testified that he was the representative for new york methodist hospital new york methodist hospital is the only hospital that came into the trial to attest to testify and introduce evidence that they had products stolen from them i didn't mr smith also say that he represented new york mathen ist at some point and that he stole from them he did but i don't i i believe his testimony was that he was not the sales representative at the time from two thousand and three to two thousand and five and that was the time frame where mr sharp on behalf of new york methodist provided the jury with the numbers about the numbers of surgeries and the spend data so i think in the in the context of the trial  very important in combination with the testimony with from mr sharp about new york methodist and to answer judge hall's question i don't i don't think his testimony was cumulative because if it's a of a different quality i think it's one thing to be cross examined about prior inconsistent statements even under oath to a grand jury or two and i understand what the lawyer says may perhaps have more credibility but did they cross examine ham on prior inconsistent statements he had made before they got to this question about the lawyers statement they did that there were but they were of a different explanation on cross examination one wh those years you know i think the testimony was he didn't he didn't work in the hospital he worked at an office building a few blocks away so he had no independent knowledge of that but i but i think the cross examination that we were not allowed to perform with regard to mr sharpstein statements is of a different quality he's coming into court on the most important day of mr tarsus life the day that the judge is deciding how long he should spend in prison and he gives an impassioned plea and statement is hearsay if i am i cannot tell made this is what he did but you can impeach with hearsay your honor so to to impeach a witness with a prior inconsistent statement it doesn't have to be you know admit it doesn't have to be admissible evidence she can say isn't it true yes i am hardy opponent ok i know if you're a party of if you're a party opponent then it is admissible like we're saying mr watts fitzgerald statements were admissible but if you're cross examining a witness that statement does that the statement doesn't have to be admissible to to require a response from the witness you can ask the witness on such and so and day you and mr sharpstein showed up for sentencing and mr sharpstein made these statements on be have on your behalf and you are sitting there and you agreed with mr sharpstein so there is a sensually a prior inconsistent statement that was made by mr sharpstein but that mr tarr should opted by silence and he fully embraced when the judge only gave him five months in prison and of course that  from his own mouthpiece or or advocate is about i was a judge for twenty two year kind on understand why there's not something in this record is there written statement where everybody says here's what i did did you do that mr  factual basis would be mr tar should tell me what you did or the prosecutor says here's what we could prove mr tarshish is that accurate wouldn't i would think without having to go to the ends of the year with hearsay in attorneys there would have been something in that record  h there wasn't the iran i don't know the answer to that i mean you know from being a district court judge that and every plea for it to be permissible there has to be a factual proffer eve or either verbal it or in writing usually in this district the factual proffer especially for cooperating witnesses would not be very wordy it would stick very closely to the elements so i don't believe that that would be a very good grounds for impeachment as a as opposed to what  would not have been given a copy of his we would absolutely not have received a copy of his pretrial son's or i'll finish i'm not taking your time i'm just curious because i never had a case like this everything everything's overbilling or too much for the service they did or they never did the service that was all kind to health care fraud in this that we've had here i have never had a case like this if you haven't had a case like the hospital shelves now out of date but yet there's a huge black market for it where is it going to we know one i think they call it a gray market they don't cocoa black ok but i thought some my earlier so and  is we're hoping we're not going to the doctor using these products no the and by the way these products are not out of date the products are good products what the testimony was is the hospitals bow to the surgeons so if a surgeon says i want this chair two weeks later they hear about a new and better suture and the hospital buys a for them because the surgeons make the head they have oversupply that's you know it's just what happens on the spot you get to take it you know what that's what mr specific very specific and low amounts so it boggles the mind to react to the government's position that the owner of the goods in counts two and six can somehow be different i think the figures are five thousand dollars a thousand dollars there's no evidence that that they were any different for counts two through six and i would urge this court to hold that these the evidence of the prosecutor statements were thank you counsel thank you