little district of florida so that with us this week which conway previously served as chief judge and the little district of florida we've been friends and colleagues for a long time all of us in fact i think we have it all florida panel this morning ah so welcome judge conway it's a pleasure to have you we appreciate your helping us what i got at this week thinking we have three cases when there are undisputed gaps in the inculpatory evidence a judgment of acquittal must be entered after a multi week trial with dozens of witnesses and hundreds of exhibits and almost two hundred pages of briefing before this court the government has not identified government's own undisputed evidence in its case in chief taken together the absence of those two pieces of evidence conspired and result in the conclusion that there was no fraud committed by mr dunning and a judgment of acquittal must be entered w the people on the board did not remember ever approving the transfers are ok how can you not be evidence that transfers were made without appropriate authorization your honor this particular board for b h c was a policy setting board rather than a governing board terry bernie a member of that board testified for the government and said he was an accountant and he actually didn't even receive the accounting statements or the financial statements for b h c unless he specifically asked for them under the b h these rules and regulations the board was there to set generalized policy for a blacklist another member of the board testified  kimberly patten another member of the board testified terri bernie is a member of the board testified all three of them agreed that the day to day operations of b h c were delegated to the management of b h c what would have necessarily  been wrong or criminal or evidence that a criminal transaction had occurred simply because the board had been unaware of that transaction to begin with there would have had to present evidence that the people in charge of the financial did not approve the transfers that would have been helpful evidence your honor but not enough well it would have depended on what the particular people in the financial department said for example if the people said we were simply unaware of this transaction that may be a closer question if they said for example we have from italy did not know about this and when we saw this transfer of money we asked questions and we couldn't figure out where it came from and what happened that's a different scenario but what we have here is a sheer absence of evidence as to the management of b h c that anyone had affirmatively not approved it or when they discovered it that they said what is going on here this is not an appropriate transaction what we have though after this transaction goes through is in the audited financial statements  receivable in the amount of six hundred twenty two thousand dollars be booked showing an amount of by mr dunning's company to be h c which accounts for at least one of the wire transfers the remaining four hundred thousand dollars that gets wired out in december of two thousand and nine to purchase the norwood property is a mystery we have no idea how that gets accounted for what happens to it or anything along those lines so those if there was a portion of that right that whatever happened on the front end there was a portion of that that was not repaid evidence in the record i think that go ahead i'm sorry i don't i guess what i'm trying to figure out is was there any evidence to show that the six hundred twenty eight thousand eight hundred eighty eight dollars that  for that building the bank was approving them that sort of thing so i mean there's a there's there's definitely a question in the record about how much improvements actually happened to the twenty thirty building but there is no dispute that the money was spent toward that goal of renovating it that well that we've got a lot series a a lot of complicated business transactions here and there are several transactions and so we have to look at the evidence and you know and a light most favorable to the government and miss parker testament sheila parker was the government's primary witness in this case she was involved in all of these transactions she pled guilty and and she was a cooperat was involved in all these transactions yes your honor and during the government's case in chief when she was asked the question did you and mr dunning enter into an agreement to commit crimes her answer was and unequivocal no so the information that she was supplying about the mechanics of these transactions we do look at that the light most favorable to the government completely agree the issue becomes what inference do we draw from the it sheer existence of the business transactions the government here presented significant evidence that certain transactions in fact occurred to extrapolate from that that the transactions amounted to fraud that's where the inference is in the government's case becoming reasonable  from the circumstantial evidence yet shot and so i guess your argument is that if we look at the record there's what's missing is that  the e mail was and that goes into one of our evidentiary challenges which is that e mail was improperly admitted at trial because of that very fact the person to whom it was admitted didn't even know what the e mail was there was nothing to suggest that mr dunning ever received it there was nothing to suggest what mr lacy meant by it or anything else was it introduced through mr bernie a board member of b h c who knew nothing about it your honor he was not copied on it or was not a recipient eighty five thousand knowledge and law that he got funding from that he purchased he then fill out an application then have a credit check then receive the approval of the board jury factor that the consideration yes your honor and to that point with the bank fraud statute it's not imposing recordkeeping acquirements for credit union and that's the disconnect in the government's evidence there may be bad recordkeeping practices there may be bad banking practices but that doesn't transform into a fraudulent activity where mr dunning is trying to deprive the bank of money it was it was owed there was nothing false about the disbursement of funds for the purposes of leasing that car purchasing that car so again that's a case where the government undeniably prove that the transaction occurred there's no question well mr dunning didn't pay for that jaguar did it well it came from the b h p funds it was used to pay that yes your hon and in that case what we have is sheila parker testifying for the government that mr dunning told her to do that because he believed he was owed money another undisputed fact from miss parker was that she had calculated over a million dollars of amounts of food by b two mr dunning the second point there is she's testifying that she's keeping mr lacy apprised of these sorts of transactions and he was the c e o of b h c he would have been the management who the board was looking to to handle those financial transactions so again we don't have anything false or fraudulent about that transaction concerning the jaguar it's just the transaction occurred in the government's extrapolations from it and then they want the board to know about it and so that demonstrates guilty knowledge that anybody was affirmatively concealing financial information from the board the board testified to the extent we wanted any financial information we were given and in fact they were given the opportunity to sit down with the outside auditor each year after he conducted the audit b h c ask good morning michael billingsley for the united states may it please the court let me first just dispute the fact that he's saying there was undisputed evidence of anything in terms of the mr dunn his conduct being criminal  said that the there was undisputed evidence that he was owed money that's simply not true the evidence if you look at the government's closing argument in this case that was a big part of the argument that this idea that birmingham health care owed him money was heavily disputed but more important than that it was disputed by the evidence in the case we just talk about a couple things first of all of the counts of conviction dispute that he was owed money for example he brought up the norway building a building that he used birmingham health care funds to buy for him self then turn around at least at the birmingham health care charging the money to pay rent for a building that they bought well that wouldn't have been the legal if if birmingham knew in birmingham health knew about the loan to him that's not illegal and there's absolutely no evidence that they were i know i know well you know that this is fine there's a lot of evidence in this case but here's world here's the feeling i get from but the government didn't present any evidence of outright fraud you seem to say he in russia unlawfully enraged himself so much that there had to be some criminal wrongdoing so what i want to do is ask you if you could give me a one and you may not be able to and if the answer is no just say no i will move on to the next one i want to one line answer on each set of transactions on what made his conduct criminal so for example the plaza building what did he do that was fraud in the criminal sense ok so we'll start plaza building ok what did he do that tenant but they were the owner of the building they had tenants there's an incident there's evidence in the notes of the board meetings that this thing had sat without offers for a while that was before they purchased it but yes i own that they hadn't put it on the market they were trying to sell it this was done in bringing it to him as an idea running in lacey and so it is so your claim is that because another outside entity obtained a higher appraisal the obtaining of a lower appraisal he didn't inform them that there was this higher appraisal the value of the building when he went in there with lacy and encourage them to sell the building to him for what he said was ninety percent of the appraisal value ninety percent of a lot how do you know how do you know that that first appraisal made sense given the wide  disparity between the two values when there was there was a lot of evidence about why the values were different in the values were different because if anybody testified that the first appraisal was correct well it depends on yeah i mean the you know the i don't remember the witnesses name but the i think the witness who conducted the appraisal but if i could explain just why there's this difference your honor it's because if i'm going to buy a building it's going to be a lot more valuable to me in the bank sign off on the difference between the appraisals there and the two different banks i know the bank that loan the money at the end of the day the wasn't there an e mail from one of the bank officials speaking about the gulf between the two appraisals right that's what the reason there's a difference in value is because it depends on who's going to bear the cost of maintenance property taxes whether it's going to the tenant or the landlord the six million dollar value was based on an assumption that the tenant would be of those c and that's in fact what happened birmingham health care or those costs once they sold the building to dunning and so they ended up paying more than they were as owners of the building as winners of the building because of the deal that they went o of birmingham health care he's trying to buy the building from birmingham health care he's a c e o he knows there's this six million dollars prize which by the way he then uses after he buys the building to go obtain a i think one point three million dollars line of credit based on the don't you know we've talked about this in the senate answer the answer has to be no well i mean it is right if you if you and i are if i want to buy your building right right and we go out the two of us go out and we get an independent appraiser in the appraiser says two million dollars i don't tell you that i've done my own appraisal with another outside entity that i don't control and that entity has said that building is worth for i don't tell you about that appraisal that i've secured on my own you sell me the building for to have i committed bank  there's evidence that they were in a conspiracy together in this is part of a conspiracy charge not a bank fraud charge it is part of there were no bank fraud charges arising out of the plaza building transaction no bank fraud  bank fraud wire fraud but it's on they were there were specific substantive fraud charges based out of each of these buildings although they were part of the overall conspiracy to write what you would have to look at drill down on and i can do that so the criminal conduct is the sale or the lease agreement well it's the sale then it's not the lease agreement your honor the problem with this is the problem i'm having with this case on your side o there's tons of evidence and i again i haven't read the trial transcript but it looks to me like mr dunning did everything he possibly could to enrich himself the question is whether or not those distasteful acts that he committed amounted to actionable criminal fraud and starting out with this plaza building transaction if in our hyper our little hypothetical you're not sure that i've committed bank wire fraud or bank fraud i need to know why mr dunning committed bank fraud with the plaza building or wire fraud just to be sure this is clear mr lacy was was board chairman at the time dunning was c e o of birmingham healthcare once he ransactions they didn't enter into were not legitimate i mean he was not legitimate ok was the sale of plaza the plaza building criminally actionable yes it  represented because what fraud was committed in the sale of the concealed material facts of what i did you can see all the appraisal boredom testified if we had been aware of that appraisal it would have struck to change the way we would have structured the deal because our whole point was to get out of it paying less than we were and that's not what happened though it's not that they paid or is it that they paid more after they got into the lease is it just don't work that no hiding of the appraisal i'm sorry i'm out of trouble separating agreement after the sale or both i think it's both a combination because as a time of the sale is a real inference that they knew that's what was going to happen in fact i think in the six million dollars raise all there's a statement that the ten it's going to bear these costs if they if the lease agreement had not been so one sided is the sale of fraud to disclose this to the board right so that that is the lynchpin of your argument well i think without that in false i don't want to concede that that's the only thing that's important here but it certainly is if he had no fiduciary duty where's the crime because the record that what is it that inc paid lacie twenty five thousand dollars thank you your honor yeah that's what you all referred to the e mail on this was right after the six million dollar prize that he pays him twenty five thousand dollars and the e mail is and then after that he says  our collaboration is a conspiracy that is essential to our success that's correct and when you talked about the witness who testified about the e mail first of all he can he's to please the authenticity of the e mail so there's no issue about whether it appraisal and then place he had sent this e mail so it was the first or second appraisal that was a six million dollars raised ok we're just a few minutes left i just want to dispute this idea that the judge should record that was a subject line of that of the email was for the records their idea was with something to do with it but for the records a common expression there was nothing no other connection between the email or the quote to the magazine why did you object  just don't think it the jury should have paid attention to it but that doesn't mean it's not that miscible well i certainly don't think the judge abused her discretion in excluding the evidence on the basis of you know that it was relevant and it wasn't there wasn't a connection the i've been told but this is the trial attorneys here that we didn't object she was there that this was a huge record as you know that we did not object to that so i guess judge rusting excluded it even though we didn't object but anyway it wasn't improper for to do so  police court in response to the plaza transaction a couple of points on that keith covington testified for the government and that's at page three fifteen of the trial transcript he was with walker via bank and he was asked the question so you it was a bank were aware of a six million dollar appraisal and you were also aware of a three million dollar praise all but you went with a three million dollar prize all because you thought that was a better fair market value for the plaza building and he answered yes that's correct so what we have here is the government taking suppression of something that is not true or or false or or more correct or less correct than the actual appraisal on which the border a lot in trying to convert the bank but the bank wasn't making a decision about whether to sell the property or not correct your honor and so whether the bank decided to go with the lower appraisal having notice of the first one doesn't tell you whether or not there was fraud committed in keeping the first one from the people who are deciding whether to sell the building and under what conditions absolutely your honor and to that it goes to the fundamental problem with the plaza building transaction which is what we have is arguably assuming the worst the suppression of an appraisal it's not the supports not the suppression of a fact the existence of  value the value is not fixed there was no evidence that mr dunning influenced any of these appraisals or talk to any of these appraisers nobody's claiming that the appraisal was in another self defective it's the withholding of information that he had a fiduciary relationship when he was wearing two hats during some of these transactions i'm not aware of that argument a trial there may have been that argument a trial on appeal i'm unaware of that argument being asserted as the basis for the  claim so as to the fiduciary duty issue you know that's a very fact specific issue that would require detail alice's of the evidence in this record but the simple simple fact is there's no evidence in the records showing that dunning was aware in february of two thousand and eight that that appraisal in september of two thousand and seven existed the only evidence is in july or june of two thousand and eight there's a document in a bank file which makes reference to another appraisal now presumably i suppose mr dunning told the banker who got that who got the first appraisal done it was capital southbank your honor no one who got it done who asked for it capital southbank that's who they were praising because because they were doing what they were praising the property in when asked  what purpose in the appraisal report it says that there is going to be a transfer of title from birmingham health care to synergy an entity to be formed those are both entities were mr dunning is involved up to his eyeballs yes your honor absolutely  how could he get out of known i think there's a distinction between knowing that perhaps an appraisal is to be performed and what the appraisal actually says he never got it there's no evidence that he ever got it how can that not be a fair inference for a jury to draw that if an appraisal is being done by a bank in anticipation of a proposed transaction between two entities that the person who is intimately involved with both entities will not know how that appraisal came up and if the government had presented any evidence or are that for example the appraisal  found found in mr dunning's files that might be a reasonable inference that ok it's in his files he probably saw it he probably received it but the only evidence presented on the surprisal was from the appraisal of that there was no evidence presented from the bank capital south bank which ok we're the only two witnesses to the crime there's nobody else there's no documentary evidence there's no there there is no forensic evidence it's you and me and i say x and you say absolutely not x y what can the jury do in that case the jury can weigh the credibility of the witnesses and decide between that even though each one is equally plausible but here we have a gap in the evidence your honor and well then that's that's a different argument it's not that it's not that equally different inferences can be taken by a jury one way or another absolutely or i guess the point is when there's a gap in the evidence like there is here then it becomes a question of what inference becomes reasonable and it's not a reasonable inference to say not only did the bank commission the appraisal the appraiser testified that he never had any communications with mr dunning and that's it and then to infer from that that not only mr dunning had awareness of the appraisal being commissioned but also that he knew the results of the appraisal and he had a copy of the appraisal etc et thereby allowing him to provide it to be h c that gets into the territory of unreasonable extrapolations from the evidence and that's the problem with the government's case they do prove it in june or july of two thousand and eight to see that time is expired if i could briefly conclude that answer thank you what we have here is the government proved in june or july of two thousand and eight that he had been aware of it that's the only evidence there is no evidence at february of two thousand and eight when the sale occurs