six and through eight of the indictment charge counts suckley with violation of the second paragraph of eighteen u s c section five forty five which applies only to someone who fraudulently or knowingly imports or brings into the united states any merchandise contrary to law and that phrase contrary to law you have to look elsewhere to find out where it's contrary to law but the most important point here is that the phrase contr law contrary to law applies to the act of importing for bringing into the united states it does not apply to the condition of the merchandise that's being brought in and that's exactly what the united states isn't it can this was the marking of their action day and i'm not quite sure why you're equating condition with a false marking where you're honored first of all the marking took place in korea not united states and it came here with that marker already on it so what the act of importing it necessarily entails the condition of it having that mark on there but nonetheless what  focus is that something has to be prohibited by the law and our position is your honor that the title of the actual smuggling act the statutes provisions itself in the case law all show right that the marking that contrary to law provision when you look elsewhere to see what if on the outside of the container he had marked it as something that it wasn't say he marked it as broccoli you know when it was really sp h would that be importing contrary to law no because it's it might be a violation of the first paragraph five forty five because he's providing false documentation but that's not the case here this was clearly marked on the outside  years ago the united states supreme court said that it was a commonly understood meaning you know what that is is bringing down short goods of which the importation is prohibited and if your client had been charged with the first section i think you would have a good argument but the second section doesn't use the word smuggling and so it seems to be designed to capture something else and and constable before i let this go i just wanted to make a comment about your combined response reply brief because you used almost that entire brief as a reply so you essentially rehash the opening whereas if you had really done just a reply you would have been allocated very few words and instead of actually using that response to respond to the cross appeal you a cross appeal and so on and so on i didn't see anything prohibiting that in the rules but i'll take your counsel think the spirit if if that letter ok understood your  in any event you have to look elsewhere to see whether there is some kind of statute that prohibits importing these goods into the united states the only statue and by the way the  period there's nothing in thirteen zero four that prohibits importing even mis marked merchandise so the contrary thirteen zero four expressly contemplates that miss market merchandise is going to come into customs that's going to happen and there's a lot of reasons for that including the complicated determination of where or what the country of origin is it's not a very simple determination in fact we have the world trade court and other mechanisms set up to figure that all out and that's why under thirteen zero four they they knowledge you're going to bring in people are going to bring in mr mark perch and merchandise that's not prohibited and consequently the importation of miss marker to deice is not prohibited it's not contrary to law what's supposed to happen at that point is this the director the center director is supposed to give notice written notice to the importer hey you mis mark this this isn't made in the usa it's made in korea remark that's the procedure that's supposed to be file or follow what's not supposed to happen under that statute is that the good serve mediately seized and the importers arrested that's not civil procedure that was set up in that statute and under the tariff this was a purely statutory procedure or administrative civil procedure not a criminal procedure there's nothing in there that prohibits this what they are trying to do what the government's trying to do is turn an affirmative obligation to mark the country of origin into an implied prohibition not just the mis marking but it a criminal act in fact to the contrary everything about the tariff act shows that they had meant to apply only civil perhaps monetary penalties with him to do additional duties but that said nobody's going to end up in jail nobody's going to get charged for the crime for mis marking or again it's a complicated determination because a lot of goods a lot of merchandise are built in many different countries question a predominance it's a question of where imported and then it's accurately marked with its country of origin of somebody's teeth faces that removes it or hides it that's not what khan was charged with that's not even relevant here so the only  in that case the leaf and then it was importing carpets that were made in iran but there was an executive order in implementing regulations which prohibited  that originated in iran or that made in iran and so that is exactly our interpretation here is that the actual category or type of good he asked to be prohibited entry absolutely into the united states without regard to the labeling in the house and side of the court didn't even talk about the labeling other than point out some of them were even correctly marked and yet he was still guilty of smuggling showing that labeling has nothing to do with smuggling or a violation of section five forty five the government he asked prove there was an alleged scheme to defraud in this case the scheme alleged in the indictment and proved ever presented with evidence at trial or at least what they called to provide was that presented at trial showed that there was no such team and that there was therefore no such crime sixteen zero five a said good take goods essentially must be produced in the united states but sixteen zero five d provides an exception to that it says this section shall be applied in a manner consistent with united states obligations under international agreements well there is an international agreement right on point that governs government procurement as in this case that's the world trade organization government procurement activity over g p a and under that treaty the us and the e p a are obligated to treat the good of other parties to that agreement which include korea as the same as us goods meaning that to buy u s goods a provision under sixteen zero five k is written now for those parties to the to be used under six you know five d for and his defense that last june did not address the question that faces this court and then event that's a wrong interpretation of the statute section one point three of the statute specifically provides that when the government when a partner to the asked treaty requires certain provisions to be in contracts entered into by municipalities or other entities that are not party to the treaty then the  the requirements the equal treatment requirement under article three shell apply you tatis mutantes us to such requirements my latin is nonexistent not just rusty but under the dictionary is the definition is this is a phrase of frequent practical occurrence meaning that matters for things are generally the same but to be altered when necessary has two names offices and like so in other words there is going to be differences in personnel departments involved between the u s government and municipalities and states nonetheless the treat the equal treatment requirement of article three still applies to those because in this case the us government is telling those entities what they are going to put in their contract this is what i would call an anti strawman purchase provision so in other words the government is saying look i treaty i can't buy a gun but i'll give you the money to buy a gun for us that we all get around the treaty well that provision doesn't allow that to happen what the government is saying is we're going to we cannot if we bought this these goods ourselves directly we would have to allow korean goods to be used we're trying to get around the out by giving money to somebody else to buy it for us it's not allowed under our nuclear waiting down the into the technicalities of this act to which your client was not subject i mean issue here on the wire fraud charge as i understand it is simply did he represent to the municipalities that these products were made in america the indictment reference says they are a are a but the representation he was making was with respect to the buy american version and he wasn't accused of making any kind of representations to the purchasers about legal advice such as whether they were treaties that exempted korea i mean he never said hey there are two provisions that exempt korea so you don't really have to worry about this and making these things in korea so no worries the area doesn't apply he was specifically representing in charge of the indictment with representing them as having been made in america again i don't think he said he refused going to make them in america there's no representation in the indictment itself that that he said he represented he would make them or assemble them in the team that's not an accurate allegation by them as to what was actually in the and i think in any event the question is whether he was charged with a crime if he if it was not a crime for him to ship goods all completely made from korea under section sixty no five because of the application of the trees and there was no crime alleged what if he made a misrepresentation or series of misrepresentation and we had up going with you with regard to this legal possibility how do we gauge whether or not misrepresentations the mystery of why made are material well to me if he's making misrepresentations but that's  doesn't constitute a crime there is no or even a fraudulent schemes and that's not a proper allegation of wire fraud so it's a lot of sound and fury but it signifies nothing the real question here is i exactly what we're talking about here where the contracts are signed after february seventeenth two thousand and ten which is the case here all these contracts were signed after that date so the treaty by its provisions renders the recovery act he's charged with committing wire fraud correct and that's different so the question is whether he lied whether he lied and you said he wasn't accused of saying things were made in korea ok i mean made in the united states it said  he was accused of affixing signs that said assembled on the u s side i said made instead of assembled assembled the usa and that you know the last track of the other when he falsely represented that they would be wire fraud that's something that's a fix or there's no electronic communications there's no transporter communications or it's also not material because nobody saw it it was under seal when it came near it never got to the site up nobody recovery act he did whether you look at the treaty or as all get to now if you look at the evidence the evidence at trial was and this is why he's entitled to an acquittal is because there was only he alleged that he was alleged to have promised to provide blowers that were compliant but there's fraud newswire fraud a fraudulent scheme which is a necessary element only when you have to contemporaneous intent to defraud so the government presented a lot of evidence about l her statements made from june two thousand and nine through march two thousand and ten and as the district court itself found she thought it was clearly established that at the time to those representations were made honestly intended to comply with with our or section sixteen zero five and that's amply supported by the evidence and is enough to create a reasonable doubt in anybody's mind first of all first of all the allegations about references are to internal communications if we're going gauge and fraud why are we engaging in internal fraud amongst ourselves that those internal communications are enough to show an honest intent by him and everybody else that key turbo to honestly comply with what they understood the requirements at that point to be on the  under the case law the mere fact that he ended up not being able to fill the promises that he made during that time period in the form that he made them is not enough to show intent contemporaneous intent and the now overlaying all they out told there was a transition going on there was a transition in the e p a as to the guidelines they issued in september and then that later in october regulations or or guidance which said by the way produced in the usa doesn't mean they actually have to physically make it here it means you only have to substantially transform it here and then they clarified it a more well substantially transform means you only have to answer two out of five of three questions yes did it take a lot of time to do onsite and more importantly this had to crawl happen on site meaning act these waste treatment centers did it did what you were supposed to do to get it functional did that take a lot of time did it take a lot of high skills you have here under the guidance the statement assembly and installation includes sophisticated adjustments contract and not only that but the government itself its own e p a witnesses said that what k turbo was supposed to do onsite would have meant that they couldn't answer yes to two of the five questions of sub part three of the three question test meaning that what they were intended to onsite would have been substantial transformation and they execute because what the government did here is they said well look at his earlier things look at his earlier promises that he was going to build  faith interpretation of the e p a test the three question tast that's not it's the answer that's an honest statement that's what they tried to do and that's what they were acquired to do so there was completely insufficient evidence to prove it trial  anything beyond a reasonable doubt he was entitled to acquittal under those counts the problem here is they had the government at century constructively amended the indictment from the time the grand jury to shoot it to trial they started out by saying you promised to make blowers compliant with section sixteen zero five at trial they said we don't care whether you were compliant with sixteen  five we don't care that this is a case about violating our it's a question about whether you violated your promises back in two thousand and nine to assemble at batavia but that's not what the indictment alleges by doing that  it impossible for him to defend himself because it changed the entire theory it prevented him from showing that he actually intended still even after march two thousand and ten to fully comply with his promises by providing substantial transformation onsite that the same allegations were in the south burlington vermont case we never promised we would make it to the table we promised to them that we would make it we would comply with the three part u p a test which is what we intended to do  so because of their destructive amendment in a change the government broadened that the potential liability of and that's improper under this so till case and consequently english name of the country of origin and that affirmative command which is clear and unequivocal is the same as saying that it shall not do the opposite so by fermat of the requiring that the goods be marked it prohibits not marking the goods and here we had something that was more egregious than not marking the goods or a type of mis marking that could be the part you know some complicated factual issue that would need to be resolved by the world trade court was marked assembled in the united states when it had already been assembled and it was coming across the border from korea counsel can you address the defendant's prate of horribles argument that if contrary to law really means contrary to any law then many minor regulatory violations can then be construed by elations of five three five yes and that is really the requirement that he understand that what he is doing is contrary to law and i think it's actually a regulatory scheme that works pretty well the inadvertent mis marking that typical sort of mis marking that appears to be contemplated by the statute can be cured once it's brought to your attention and it makes sense that that doesn't require bad intent because it's a regulatory scheme and we don't want every case of goods coming across the border to require a entire fraud investigation but in the case where you attempt to evade those requirements by deliberately acting in a way you know to be illegal it makes sense for there to be criminal penalties to deter people from engaging in exactly that sort of conduct of the one thing about the the mens rea argument that you're making is that five forty five also says that proof of defendant's possession of such goods unless explained to the satisfaction of the jury shall be deemed sufficient to authorize conviction does that mean then that possession and tickets knowledge or is that getting at something else like  indicates knowledge of the condition of the goods i don't think it indicates knowledge of the law that that would be a bridge too far and certainly that's not how the jury was instructed in this case and in this case the jury was instructed that the defendant needed to know that the  what he was doing was contrary to some law that it was it would go so that's certainly not not what happened here the jury necessarily concluded that when the defendant mark those goods and sent them to the united states he knew or at his employees do that he knew what they were doing was it is then usual case that i couldn't find cases that were really exactly like this because it does seem like five forty five is more often used for things that when you're importing you know there are many prohibition era cases  statute that it more often has been used when things are being imported in that are themselves a legal it's really commonly used in that and i think part of is the timing of many of the cases but it is also used in the case of import controls and the companion statute five forty four is used for export controls in those typically are regulatory scheme so in the case involving the the rugs from iran that was a regulatory scheme nothing inherently illegal about a rug  only the fact that it was made in iran makes it illegal for the desert big horn sheep case coopers is another good example that the cheap ampere's could be legally brought into the united states you just have to show you had an export permit from mexico that you legally take in this animal and the fact that the different in that case didn't have that is what's grander still a little bit different because in iran well there's nothing inherently illegal about iraq and it was against the law to bring in rugs from iran or you know in the case of bringing in some of these endangered species type arguments it is illegal to bring them in unless lawfully taken and here there was no scenario in which sending these blowers and was contrary to law in the sense that it was prohibited by law to have them cross the border so it's different than the cases at least the cases that i was able to find i think it's different in that here you had you simply marked them properly they could have come into would be very easy to comply with the law and i think that's actually what makes  unusual case but one that is before the court is that the misrepresentation was so blatant because we have that wilfulness standard it's framed in terms of knowing that we have to show he knew it was illegal that's a very high standard and something that's difficult to prove think this is reflected from the trial record didn't know anything about the broader investigation when they first saw the labeling and then later agents who were aware of the investigation came out there but it jumped out to customs as unusual that a blower would say assembled in the united specific way he told them he was going to comply with the buy american provision and he told them he would do it in a particular way that he would substantially transform those blowers at his fertility facility in batavia illinois that term gets tossed around a lot but its meaning is really fairly simple it just means you do so much to them that for all practical purposes they are made in the united states not made overseas and he went so far as to represent in a very specific way how he was going to do that that he was going to purchase enclosures in the united states for the blowers he was going to source parts here they would be a symbol here and for that charged executions of this scheme those particular municipalities absolutely none of that happened and substantially transform the blowers at his protg be a facility as promised i'm paraphrasing slightly but it's it's quoted in the brief as well so that idea of the specific promises was certainly in the indictment  certificate to representatives of the ottawa project that's one of the municipalities saying that the blowers were going to be assembled and tested in the united states and in fact the fully assembled blowers had arrived in the united states a week  he specifically in that instance represented assembled and tested were other instances where he did do that or he just said comply complying so yes good very good and it really depended on how many follow up questions the  so the more they asked the more detailed and specific his misrepresentations are so the jury could infer from that that he was deliberately misrepresenting that he would comply because his later clarifying statements all events that intent he had cancelled the contract was really a contract would explore the possibility of ordering parts here in the united states panels and things like that he had cancelled those before the vast majority of the representations he made that were presented at trial so you know regardless i mean i think defendants argument if nothing had happened after the initial representation to the to the e p a in two thousand and nine about what his plan was the governor would have a difficult case proving what his intent was but as time goes forward and he's taking actions that are directly contrary to his stated intent contemporaneously was making those representations the jury was certainly entitled to conclude that he intended to defraud and the other piece of this is the jury was presented with evidence as to materiality every single municipality at issue at this trial representatives testified that they would not have purchased the blowers if they had known that the defendant was actually assembling them in korea the defendant was aware at his facility in the tavia which he would travel to from time to time marked up copy of the e guidance was found e p a had been tasked with administering the buy american regulation for projects which they supplied funding and they had rejected the argument that the world trade organization agreements negated the buy american provision the technical reasons are complicated it has to do with the way the e p a supplies the money which is not directly to the projects but through a series of state run revolving loans but what the defendant knew is that the e didn't agree with this argument that he's now raising on appeal he could have chosen to contest that he could have told the municipalities i don't think you have to comply you should buy my blowers anyway instead you choose to chose to to trick them into buying  blowers and they said if they hadn't been tripped they would've bought them so we know that they were representations were material because the buyers relied on jass and your argument that he either waived a forfeited the constructive amendment argument that you alleged in the indictment that this was in representations about compliance with the ai you know to the extent that you might have proof that it was my generally lies about where the blowers are made that yes he raised it as he raised a different  constructive amendment argument below so he had already raised the issue of constructive amendment but he never argued that the government was limited to proving that he promised to deliver compliant blowers and then failed to deliver compliance blower's this sort of narrow technical argument that attempts to turn the case completely on the world trade organization or these foreign trade policies and laws so that's a new argument ultimately i don't think it's particularly important to the waiver because i think it's also just simply belied by the plain language of the indictment also note there was ample discovery in this case of santiago proper explaining what the government's evidence at trial would be so the defend nt was definitely on notice as to why he was going to be called to defend trial is the appellant correct as a matter of law that the chain of documentation results in a manufactured good not being violent i think the e p a had it right that in this the way these projects are funded that the defendants goods were not exempt they had to comply with the buy american provision and i  think that's also sort of borne out by the course of the defendant chose to take which is rather then attempt to convince the e p a they were wrong or that his goods in some way comply he took the course of of just misrepresenting where they were actually being manufactured to turn to the government's cross appeal in this matter the last amount at sentencing was a very contested issue spread out across multiple hearings that the district court ultimately ruled on and found an actual loss in the amount of one hundred eighty thousand dollars and that was at the feb twenty eighth sentencing proceeding the government sought a much higher loss figure based on the intended loss so situ at the district court date is taking only the payment for the blowers that were actually delivered and use that as a loss amount and ignored feet other contracts that the fin that ad for which his company was never paid so to extent there was air there that was certainly to the defendant's benefit it reduced the loss from over one million dollars down to approximately one hundred eighty thousand dollars definit was sentenced on the basis of that actually received a below guidelines  sentence and at that point he filed his first notice of appeal before that judgment was reduced to writing on a motion by the defendant filed in the district court to which govern was not given an opportunity to respond the district court brought the parties back in and under rule thirty five said that her prior guidelines calculation had been clearly erroneous and substituted it with the new guidelines copulation that is contrary to the language of rule thirty five a to the committee note accompanying it and to this court's precedent all of which say discretion the exercise of discretion with regard to the below the statutory mandatory minimum a core correlating error although i don't believe there are cases where this has happened to be imposing a sentence above the statutory maximum sentence that simply cannot be imposed but is it really i mean yes a creative class and there are circumstances but if the district quite applies the wrong legal standard and in a way that we would reverse as clear error on appeal why wouldn't that satisfy rule thirty five so i think it is because of the narrow purpose of rule thirty five it's only two where it there is inefficiency because the error is so apparent that it's in a possibility and the legislative history here is that for a while thirty five prohibited any of these modifications in the case relied upon by the defendant involving the sentence under the mandatory guidelines that fell in that narrow area and then it was excess basically rule thirty five a was amended to correspond with that case which is only within fourteen days we reject the defendant's contention that there was any sort of clear error here but the proper way to seek review of a district court's decision on a contested issue at sentencing that that has clearly accept the premise that it was a clear legal air that it wasn't you know it wasn't the district court changing at the district judge changing her mind about how to exercise discretion or it was a hotly disputed legal question to which there was not a clear answer then that's not clear air that would be reversible as clear on appeal but if it was the application of clearly the wrong legal standard such that it flew in the face of quite settled law would you agree that will thirty five then permit its correction i w honor and my hesitation comes from the committee note and from this court's decision in clarke which is appears to just segregate out the application of the sentencing guidelines entirely in the absence of the committee no i would agree that clear air would simply mean clear error but the fact that the committee know it is there and that this comes up in every case where it's mentioned even the unpublished decision that's in the government's brief been sent i think that it clear air it's really arithmetical technical or other clear air and the appearance of those three terms together combined with the committee no seems to say this isn't an even more narrowly  so that would be an automatic we manned the parties agree it's just simply eroni as in in a mathematical sort of way what we have here is an argument about the government's evidence that was presented at the sentencing of a large trial and is an area where the district court does have a quite a bit of discretion in making a factual finding as to you know what it what the loss actually was so that i think is exactly the type of guidelines issue that the committee you know and then the later cases are identifying as things that are simply too murky to be resolved through thirty five even if potentially that this court  reviewing the decision might reverse i will say on the merits of this though again the government's evidence was that the defendant had secured one point six million dollars in blower contracts by representing that the blowers were going to be made in america when they were not and so the government's position is that was the intended loss even if the defendant received an offset which we contested but the district court originally raised for the blowers he actually delivered which weren't compliant but giving him the benefit of the doubt it's still one point one million dollars intended lost and with the district court date i think is the narrowest possible interpretation the district court took the actual loss the actual amount of money that the municipalities paid to the defendant's company particular issue of the buying merican act has not come up before in this court but a somewhat similar type of fraud has where somebody represents you know my company is owned by a woman and therefore entitled to get certain satisfy contracts from the city and in those cases this court has held that because the city or the sub contractor of the city didn't get what they bargained for which is not just the work the street sweeping you know the widgets you know whatever it was i was called on the contract but the other thing they wanted which was the perceived social benefit of having that work performed by a particular person that the money they paid or intended to pay is the loss and so that is the basis of the last calculation here and also note to the extent twenty eighth notice that it was going below the advisory guidelines in part for that reason so that was taken into account by the court here under thirty five fifty three a factors so unless or further questions from the panel the governor would ask that the conviction of the defendant be affirmed but that the later judgment the one imposed on march fourteenth of two thousand and eighteen be vacated in that case be reminded to the district court with instructions that a written judgment be issued that conforms to the sentence orally pronounced on february twenty eight think first of all address the question of smuggling i've never seen any case that said that just because somebody knew what he was doing was wrong that there constitutes smuggling the question here is was it contrary to law to import something  that was mis marked and there's nothing they haven't established any language in section thirteen or four that establishes that importing mis marked goods is contrary to walk they acknowledge in fact that it can be cured mis mark can be cured now they strive to say that well that there is a difference between an innocent mr marking and an intentional miss markham but there is nothing in thirteen zero for establishing that distinction intentionally missed mark merchandise can be cured and remarked just as innocently mis marked merchandise can be so there's no distinction there and thirteen zero for anything can come in that's mis marked the case law that we cited shows that itself in terms of wire fraud a particular promise in the allegation or in the indictment is that he represented that he would provide lower is compliant with section sixty five and i laid out in our brief all of the allegations establishing that their sole response to that is to refer to paragraph three but there's no representation there from hina r k turmel that he lowe would be assembled in batavia that's the key for you don't have a misrepresentation if you don't have a false intentionally false misrepresentation there's no wire fraud they had to show that there was a misrepresentation in the indictment first and then a trial they had he promised to assemble in batavia as we did they didn't allege that in the complaint there's nothing in paragraph three that says that there's nothing in the evidence that shows that he made those kind of promises to the particular municipalities they have were involved in the five counts of the indictment he refers to one statement he doesn't give the year he said something about january involved in the indictment here it was not mentioned in the enticement it talked about it would be assembled into two you know but there's this was a statement made by sawmill to sales frappe not to the actual their statement that the contractor said they would not have bought these blowers if they knew they were assembled in korea is now correct what they said is that they would not have bought them if they knew they were not compliant with our there it was a key they wanted to lower its compliant with our  they would have been if they had instead of seizing these blowers they had allowed us to to install them calibrate them a program them on site thanks to the e p a disagrees with that i don't know that that even was established by any evidence at trial but include korea so the restrictions of section sixteen zero five of the recovery act will not apply to korean goods period end of analysis he fully complied with section sixteen zero five there was no fraudulent scheme  the cross appeal and only a few satisfied it is it was filed too late we had a notice of appeal that was already filed it was not in effective it still would have been affected to appeal the conviction which is all we ended up doing  reason i filed a subsequent notice of appeal on march twenty eighth is because i wasn't sure yet whether i was going to appeal the sentence i ended up not doing that they cross appealed but the point is it was too late and finally the and the restitution municipalities did get what they bargained for and they admitted on the record that they suffered no loss consequently there is no grounds for restitution and there is no grounds for