based on an insufficiency of the evidence there was a false premise that really ran throughout the government's case that mr months from simply because he was the chief executive officer of the year one bank was the person who is making all of the decisions and that's simply we're going to assumption there was there was testimony that he was involved in the right there was testimony that he was involved obviously in certain issues as the chief executive officer but the two core elements of the government's case were it an argument that the bank had delayed its ordering of appraisals that was not a decision that mr lunsford was involved in the ordering of appraisals the administration of appraisals was not something that in his role as chief executive officer he was involved in on a daily basis nor on any supervisory basis to monitor the fact that he was it was he was involved in th incisions and supported them or i would respectfully disagree judge and i think a close examination of the testimony is important here i think one of the things that we saw particularly in the government's response was a painting with a broad brush talking about testimony the reality is that there was to cooperate years for the government the first testified that there was no meeting no discussion of a plan to delay appraisals at plan to delay appraisals the first time he ever heard of a plan was there in the courtroom and he was not somebody who testified to any detail about a conversation with mr luntz drum a directive from mr launched from a memo a handwritten note anything that would conspiracy to do to delay the appraisals one of the charges was conspiracy judge but but that obviously requires a couple things knowledge and intent he didn't i thought lap l a p d a t m laugh and lap and didn't he testify that your client agreed to this process of delaying the appraisals your lap and testified generally about a plan at the bank to delay appraisals but i think the details judge matter  capital deficit and and in her client sort of conceal that from the board and wouldn't that be evidence of joining this conspiracy again i would respectfully disagree with that assertion by the government there's two things there monstre in his role as chief executive officer was dealing with an investment banking firm in new york in order to sell assets of the bank in order to try to address what clearly was a problem going out of the bank well disclosed the problems going on at the bank and he asked for gail furnace to put together projections different scenarios in the future as to what effect the decline in the real estate market appraisals could have  on the bank's financial condition it was not the same as the work done by the c f o and the folks working for the c f o in terms of assessing the current financial condition of the bank the as of a certain date condition of the bank that was a process that latter process was done pursuant to gap very specific accounting standards that they needed to follow in order to assess what was the appropriate calculations for example one of the things that the government argued was that lowball offers on properties that the bank health should have been used to determine fair value that's not consistent with the accounting standards under gap they require fair value an early exchange between two market participants that's not a vulture sale so there was two really separate things judge and i think that the government conflated those well in its presentation but there are really two separate things to give you my  bystanders sort of bystanders sort of like lincoln there were brassicas answer to richard fuld of lehman brothers i didn't really know what was going on my help was running me into the ground and the he was i would not describe mr months from as a bystander at this bank but the detail matters mr lunsford miss role as chief executive officer was focused on certain things certain aspects of the bank judge i would submit that the quite frankly that's irrelevant and it for this reason judge respectfully the government talked about the fact that this bank changed its strategy trains a strategy from being a traditional lender with home mortgages to a more aggressive strategy after its capital raised by going public that strategy obviously did not work out well but by no means was your one bank the only one who suffered from a bad financial strategy having a bad strategy to the extent that mr lunsford was involved in developing a strategy was not the crime that was charged here and certainly a crime for which he was found guilty the crime for which he was found guilty was this so called plan to delay appraisals and the so called extensions of trial referred to them as one strong decisions one only needs to look at the evidence to understand that these were not quote lundstrom decisions but in fact and originated with a lower level employee who was dealing that with that power negotiating what that extension would be securing additional collateral and then bring it up to sapir ears who then advanced it through written documentations ultimately to the board were each director would receive a memorandum extra describing what the extension should involve each of them approved it mr munsterman his role as a chief executive officer and chairman of the board was the last signatory on it to characterize that as a one person decision is not consistent with the record i don't think that i'm not trying to suggest that mr lun home was on the golf course three o'clock far from it he was very involved in a very difficult situation at the bank but as it relates to the two core sets of conduct that the government points to as criminal acts he was not involved he what extent can we get into well sure i think that you are allowed to obviously look at the record and i understand the standard here is to draw inferences in the government's favor draw credibility inferences in the government's favor i understand the standard but this will not be the first case by any means that this court has decided to that the district court erred in not entering an acquittal in part because simply because the defendant was associated with with others who work committing criminal conduct is not as not enough of a basis to sustain a conviction there were two cases cast person in iraq i both of which we cited in our briefs that dealt with this very issue simply because somebody is around others associated with others in what turns out to be a criminal operation obviously that believes that guilt it's very difficult for a jury to understand the distinctions it's difficult for all of us to understand those distinctions but it's our job and certainly was the district court's job to look at a detailed level at the evidence and the chairman that mr monstre in his role was simply associated with others who are making bad decisions for the bank and i go back to the spreadsheet knew you suggested that it wasn't a gap assessment it correct me if i'm wrong my understanding of the spreadsheet is the sort of if we were to go get appraisals now this is where we would be do i had to understand that correctly so that judge i think it depends upon the perspectives of those involved with mr lunsford asked for this to be created it was consistent with what was being done with sandler o'neill who is an investment firm it was talking about how bad could things get what's  best case scenario what's a moderate case scenario what's the worst case scenario it was projecting as part of the financial elsa's to do such a sell assets of the bank when one of the employees who was involved in helping to prepare that chart changed the title change the title of that report and put down that it was involving the when it went appraisals would be ordered that was not a month from decision that was not a  directive that changed the nature of the information and created a document that mr luntz from did not direct and judge i know you asked before about women didn't mr lunch from have a role in making sure that that didn't reach the judge i respectfully disagree with that mr lunsford was the one who had it presented to the board there was one witness who suggested that a now deceased person one it was the one who wanted to be before the board but mr lunsford was the one who brought that material before the board not once judge but twice twice and it was the full board the independent directors people who were very well respected the community folks that had long  industry recognition in terms of running banks that's information that mr lunsford presented to the board he also presented it to the outside third party consultant this religion was not trying to hide this document judge what about  the argument the government brief that he lied about whether he was seeking tarp funds ga i would like to talk about that specifically everybody agreed that the slide that was presented at the shareholders meeting was true what it said and the reason it was it was phrased the way it was was based on advice provided by counsel who were understand or aware that the government had directives out in the market to banks telling people that were applying for t remain confidential the government had a specific advisory telling folks that if we decline your request for tarp funds that's something that we will not publicly disclose they didn't want it disclosed they didn't want  further panic that was a government position and what the lawyers who mr lawson consulted with prior to that year old was meeting new and said was they were not to disclose that the bank has applied for tarp phones and so that's why that slide not written by mr luntz drum but certainly senate bias a lot some said what it said there was good reason not to share that information but whether it's that judge whether it's discussion of a corporate governance report whether it's discussion about the spread sheets all of that was to the sidelines of what the core conduct in this case was delaying appraisals and extending additional financing to borrowers those were the two sets of conduct that drove the banks are ultimately reported financial condition and those were things that mr luntz room was simply not involved in in the way that the government now characterizes can i ask another question about the spreadsheet and understand it was  between what appeared as expected case on their loans and what was reported with respect to the condition of the bank in the public to the public with respect to  was not consistent with the projections that were on the spreadsheet not even the expected one judge no no no no bones about it however it's important understand that we're talking about two wholly separate lanes one is you know the preparation consistent with gap done by the c f o and his staff where they do keep the detailed analysis of the bank's condition and put together centrally a draft statement for six weeks review that's the compliant process where the information goes out to the public that's what every public corporation does this internal kind of asked him it as to how bad things can be so that they can properly work with the consultant and try to sell the a was reported in public forms a bike which comes from having to do with this condition subsequent to the banks report of its condition obviously things continued to worsen for the bank and so at the point long was it that it's reported poorly judged in fact one of the charges here was securities fraud based on a particular quarterly report issued by the bank the projections in terms of the spreadsheet that was prepared by mr ferguson mr l talked about the future how can this go and to answer your question directly as the timeline progresses after the sharing of information to the public that's that there was meant to be gap compliance things got worse things are worse for this bank and without doubt the situation of the bank worsened fairly quickly that that that's really just not in dispute but whether that's the strategy that was chosen whether that was the market whether that was the truly unique financial crisis that the whole nation was experiencing there's a lot of things that went towards the fact that the banks condition worsened the way dead what mr wants from what all the executives at the bank required to do was determine what the bank's financial condition was as of a certain date in a way that was gap compliant that was a process that was put together by the c f o and his staff they signed certifications to mr luntz room telling him that the information they put together was at that as true as accurate as it could be and mr wants him or a lot upon those certifications he was not getting into the details of of the preparation of these statements and significant point for the defense in this case the government allege that mr lunsford was involved in adjusting those financial statements and the defense in order to prepare for that sort information from the government as to what it was summary witness where there was can be no thirty five hundred material provided to us to give us any notice whatsoever that that's what the government cause was going to rely upon i see judge that are forty five seconds left and i know there's a lot to this case i'd like to reserve a little bit of time for rebuttal of i it's really really good morning or may have they please the court dave lieberman for the united states the defense has once again tried to portray our prosecution as being all about appraisals that is wrong mr the other executives were charged and convicted for lying to regulators for lying to shareholders specifically misrepresenting the value of tear one's assets on public financial reports misrepresenting  their activities in complying with regulatory duties that they agreed to in the trial evidence this is going to be sufficiency claim placed mr luntz wearily in that scheme so the court has referenced some of the testimony the two witnesses that i would like to mention mr latham the chief operating officer transcript page three ninety four through three ninety six he says lunchroom was part of this process the part of the process is to delay the taking of losses one of which one component of which was the decision to delay appraisals question did mr once from agree with the plan answer from way through yes he did the second piece of testimony that i would like to reference is testimony from lankford went for talks about a conversation that he has in the parking lot with mr furnace in february of two thousand and nine furnished coming from the corner offices who are the individuals that sit above mr from this in the organizational chart mr lay from mr lunch from the second critical bucket of evidence that the court has been discussing are the spreadsheets and e mail from mr furnace in april of two thousand nine hundred trial exhibit two forty seven contemporaneous e mail when he's preparing the spreadsheet which tells us what what are these spreadsheets supposed to be for i continue to have discussions with one strum regarding reserves and remember the testimony about reserves that is the money that the bank needs to cover its losses on its loan portfolio i continue to have discussions with mantra about reserves we really need to calculate what we will likely need in the next six months that is an internal e mail from one strum he sees me from furnace emitted at trial discussing his conversations with one stream the jury heard testimony from laith and from langford from francis saying that this was not about gap procedures this was not about that separate process this was about an internal document that mr lunch from directed furnished to prepare to quantify the losses in the loan portfolio that had never been reported on the books that had never been reported on public financial statements in mr furnace says thirty six million two hundred fourteen million dollars that's his calculation if the jury needed any more evidence to doubt mr lunchrooms explanation the government provided the spreadsheets title potential reserve additions needed due to the timing of new appraisals that says it right there says exactly what for us is e mail said this is about reserves this is about money that we have not reported to cover our losses on these loans and mr launch of the only defense when we asked him didn't you see the title i didn't notice it when he first received it many instances documented and many instances were launched from try to conceal the spreadsheets from other individuals at the bank and outside the bank wants to conceal that from the independent accountant t p m g e transcript page six fifty eight k p m g later not think it was necessary or appropriate to present these these spreadsheets to the board mr furnish that he insisted and he was absolutely intending to present it so that is additional evidence of concealment finally transcript page thirteen seventy seven on strum directs the when the board secretary to remove mention of fairness is presentation from the meeting minutes why is that because the bank examiners under the supervisor agreement were reviewing the o t s excuse me the tier one meeting minutes to ensure compliance with the supervisory agreement the last bucket of evidence on the sufficiency claim that i would like to disagree with opposing counsel on is that the government cited many instances where lunchroom was doing something internally at the bank and modifications but it's important to look at the procedures in which the sequence in which this came about the bank examiners told here one these are big projects twenty thirty million dollars loans they have stale appraisals get a new we w the new appraisal one strum who's signed the supervisor agreement so he knows o t s has concerns lunchroom life in the other executives approved these loan modifications they approve additional financing no  praise was ever ordered and then when months from signs the tracking reports that tell the examiners how how the bank is doing on their progress in complying that with their regulatory regulatory duties with these loans lunchroom says your concerns satisfied doesn't go to sufficiency but i'll point it out at trial mr lunchroom said his lawyers he consulted with his lawyers and they told him we don't need to disclose the fact of a tarp application or with the withdrawal of there was absolutely no testimony that any lawyer approved the false and misleading statement that mr once from directly made to shareholders in may of two thousand and nine giving them the impression that the bank didn't need  three buckets of evidence coconspirator statements the spreadsheet which the government presented overwhelming evidence was not about gap and that was about accounting but the second set of hidden books to quantify t and let's talk about the first bucket yes the first one was one person saying he agreed to do this and then the second one was this came from the corner office presumably mr launched from his office yes both of those are pretty conclusory you know there was no foundation laid there was no wall how do you know that he agreed to this you know that it occurred in a meeting did he send an e mail and and that was sort of my concern about that and interestingly there was no follow up question from that and it was from you or the a usa who handled it but they seemed a little conclusive with no foundation so for m re says hey i continue to have discussions with lunch from regarding reserves which again reserves is about capital but the bank needs to cover losses and i go back to my main point in which there is no disagreement on the spread sheets document thirty six million to one hundred fourteen million dollars in hidden losses none of which ever made and this was an april so none of which ever made it on to any financial report second quarter or beyond until november when the bank starts announcing it has recovered losses so i think the answer to your question is read the statements in context in context with the other evidence that the government presented about the spreadsheets in context with the email that we have from furnace saying what  spreadsheets about this second if there are no further questions about sufficiency or about any of the government's i'll move on to the bill of particulars the government's position on the indict doesn't adequately inform once from of what that allegation was we say yes first of all it was one of fifteen manner and means of the conspiracy it wasn't the linchpin of the government's case and it informed the defense that the bank the manner of how the government proved up its case that's not a bill of particulars objection and judge gerard correctly noted this when he said in denying relief at post trial if you were surprised if you were confused all you just asked for continu all the efforts that the government tried to take to communicate to the defense the nature of these allegations we have a detailed indictment we offered categorized searchable electronic discovery we had early production of three zero to witness statements and we also pulled out from our discovery and marked four hundred documents that we linked to specific allegations in the indictment and we pulled out a document it was later admitted at trial it's about three sixty seven a three that related in said this relates to paragraph thirty seven and what was that document it was an interim it was the internal numbers that tier one had run showing that they were going to have a capital shortfall and the document has two sets of handwritten notations on it and there's no dispute about who made those way and finally at your evidence why did you object to the particulars request because your honor if you if the court goes back and look at the bill of particulars it was this on the bus giant request saying asking for details on every single additional every paragraph we need help our trial team would have endeavored to accommodate that request but the requests here were overbroad they were claiming everything in practically everything in the indictment which was overbroad a vague in conclusory so had they narrowed the request we probably wouldn't be here so the defense has raised a number of other objections that mr collins has not reference this morning to evidentiary objections to jury instructions  a reasonable estimate of loss and so we use with the guidelines referred to as the modified recessionary method and then restitution refers to actual loss that we have to point to actual loss by an actual shareholder and that's it the district court district court with district judges i've ever seen sort of charts this out says we're using the modified recessionary method for the last and says i need to consult actual shareholder data people that actually came in and went out detail how it calculates loss the parties had extensive litigation on this below you know and we both called our experts and the district court credited the government's expert who said listen to your on price was during the fraud period with matching the s and p regional bank index which means it's a good measure of general market forces when does the price fall when is the bottom out november of two thousand and nine when defendant sent out citing bogus sales the court goes out of its way to say we could we could reach a different to see decision with stronger circumstantial evidence that shareholders were relying on the misstatements coming from the defen or defendant in this case mr lunchrooms misrepresentations were far more significant he was talking about here once viability as a financial institution we have strong capital levels we are exceeding our supervisor requirements we are exceeding our capital ratios and mr owens for made those representations not in a press release well he did make them in press release but he first made them in public financial reports which he signed and certified as true he also  meeting second big point on stein is we actually did connect the dots so first of all we know that investors are coming in during the fraud period there presumably relying on something to purchase tier one stock and we think the the re is they're looking out the public reports how healthy is this company and that's bolstered by trial testimony from bruce hudson and stephen grey at trial that's what we did and really some heartbreaking with three o two witness statements this is that documentary two one three ordinary nebraskans they read something in the newspaper about here once the financial reports they look it up on the internet they then move their retirement savings in there and they lose substantial portions but they were saying we looked at we are hearing news reports about tier one we're looking at the public reports on the proximate cause was there some other intervening unforeseeable event that caused a decline into your one stock price in stein it was some other investors were coming in on short selling our trial team asked the defense expert how do you explain the seventy percent plus price drop in november of two thousand and nine responses to that sense in traffic one twenty two i really don't have an opinion with respect  that we followed up could it be that the stock price declined when the market learned that pier one was revising its prior financial reports to two hundred twenty million dollars in lost response i was not asked to look at something transcript one twenty two so the defense expert could not offer up another explanation that intervening unforeseeable cause to get prompted this decline i think the district court did an excellent lunchrooms fraud brought all these individuals into the market so they are he is responsible for their losses even if some are resulting from other causes he took that risk his second explanation was i don't  based on the evidence before me i don't see any other forces that caused the decline so unless there are any questions about for the questions about this or any of the other questions the government asked the  know to i don't have much time that is the point there was no foundation these are these are witnesses who are essentially offering their opinions and there's no facts there's no statement attributes of surveillance from not even a not of a had attributed to mr lunsford i'm now as to the bill of particulars issue  there was just a statement made that you know an accounting was called all of which was a school owed not the case if we ever reversed on the denial of a bill particularly i think the the appropriate remedy here is to allow for a new trial one it was a total surprise it was a total head fake to say that the discovery is replete with information that allows us to prepare the discovery let us in one direction and then they changed that's the unfair surprise that is why the relief i believe is an appropriate the idea that an accountant was disclosed is not the case he was disclosed as a summary witness no thirty five hundred material was provided and in an issue saying that that there was no more specific requests that is not the case there was a number of requests for that specific information as to the adjustments and we were told one thing and they did another i think that the decision in the recent decision is very important as a relates to last there shouldn't be such a huge delta between what the court uses for applying the guidelines and then the actual loss we did raise that before the district court we pointed out that using the estimate methodology included all outstanding shares and that's what the judge decided to do was use all outstanding shares as part of the calculation to produce such a huge lost figure in stein that court used just the