in this case your honour's the government is attempting to impute the s p s responsibility to investigate and vet a date companies to colonel harris when he had no contractual or statutory duty to do the s p s job i think it's pretty clear in this case that the s b a has that ultimate responsibility in this government program this is the government going to catch you if you can program and the government has a job to do to investigate they have a job to do to monitor an audit these companies and the s b a did not do that job it's not incumbent upon colonel harris to do  job for them he had no duty to report even the failings of tropical the company or the a company and to impose that duty and responsibility on colonel harris would be unjust it's the government when they establish these programs they stablished these programs so that they should work and there's good intentions and do these programs but as even the district judge remarked there's an extended use attorney remark during the during the case there's an extraordinarily amount of corruption at the s b a and you know that's why these programs don't work in part but the question that i thought the smarting that i would engage t court with is does this automatically mean that somebody should have a free pass because the government didn't do their job and the answer is no of course not i think each case needs to be looked at on its own merits but there should w the water commission contract they did do one hundred percent of the work so it was clear that mr winters was capable of performing she just didn't want to perform because she didn't want to spend the money for employees who work wasn't on the technical merits something that she could laugh the technical expertise it's that who was going to hire the workers right yes she was basically cheap she didn't want to spend the money to do the work here how much money did she get out of  she got fifty one percent of the profits she got her fair share of the profits but she didn't do the forty percent of the work now how does that forty percent work he missed that was a question mr harris seemed to have  he does it have to be forty percent as you go constantly or is it forty percent on the overall what's you know how he said this to do they have to be doing the work as they go or is long as they do some work at some point how does that calculate what's the legal answer to the question i think you're right or it was my understanding it's over the life of the contract of each particular deal or the whole joint venture each particular contract and a joint venture  so in this situation for example in this joint venture there was the galveston contract there was the id w c contract and then there was the fort bliss contract you haven't that one contract  doesn't have a misrepresentation or that he wasn't involved in it is it does this have to be the all of it is one good enough or if one's bad does it have to go back i think  galveston contract then the the invoices and monies paid by the government under the galveston contract would not be false would not be fraudulent then you would go look at the fort bliss contract i don't think i think they stand on their own merits they're not integral but do you lose your case if any one of the contracts stands or do you or do you get something if we find that one contract doesn't stamp doesn't matter you don't know i would i would think that i need for me to survive here or for colonel harris to get a complete reversal both contracts would have to be would have to withstand both contracts because the relate to different contracts here are some counts that relate to the galveston contract and there's some counts to relate to the fort bliss also asking about sitting i think i'm sorry rudnick she was also asking about sentencing but if the financing is calculated on the total loss amount and one of the contracts is not doesn't have rep misrepresentation a false representations then would have to be sent back to rescind it saying because the total loss amounts  yes in this circumstance yes i'm sorry i misunderstood yes i would have to go back for we sentencing because of the sixteen level adjustment of the court made when the court sentenced carl harris  the but going back to the miss winters had three joint ventures going on she she was granted three joint ventures within one week by the small business administration what what did in what manner did she perform what did she do article what did tropical do in any of these they have very little very little to do anything no they did zero work and that was a report that was report that was going to very beginning to the very end tropical never did anything that she didn't perform from the very beginning correct and how long a period of time the discount go on well the galveston contract was cut short after fifteen months it was supposed to be a three year puts the total ban of this of the contracting officers the tropicals not doing their work colonel harris work for luster he was not capable of getting tropical to perform well yet the question the question is what did the what what was harris communicating to the government about her performance during that nearly two year period in which he did nothing with being a colonel harris was not communicating with the government he had no obligation to communicate with us i'm not sure what you're obligated what did he tell them if of to report to the government about what they should be doing themselves it's cannot colonel harris's job to vet the s p s responsibilities it's the s b a that sets the program up and it's their job to determine whether or not somebody is complying but colonel harris went above and beyond that by putting together templates and even arranging for the invoice packets that went to the government to reflect that tropical was doing zero of work so that the government right well bosses of the principals didn't see that he said he didn't send it but the people said that they got it and the contracting officer said that they would have required the backup information and the backup information reflected zero work but assuming for a minute the information if you gave anything yes he had available information if there was an audience and even the the employee for the joint venture testified that if somebody came to his offices they would have seen the records in the files reflecting zero work by tropical when that template was initiated in prepared by colonel helps with even a principle on the he didn't but did he sign the contract itself in any way for the galveston project no these were this is the responsibility of last who was the owner of the cover so he didn't represent  was no there was no there was no representations judge on rod by colonel harris and any form or fashion that he was certifying that this was  obligation to tell a government they want to but if so that is ok they didn't have an obligation but they did let the government know because the packets of information according to what the government said contracting officers they said that they got the packets of information reflecting zero work and they still didn't do anything here so the invoice packets that were part of the briefing are reflected zero work i know what the government representatives the government contracting officer said that we got we would have expected that backup information and we got it and it showed zero work but the tropico i'm sorry the joint venture employee said i didn't mail that out but i had available for someone to review either way there was nobody hiding the truth of what's going on here that there was zero work going on and that it would have been a document that was contrary to that scheme and have been readily available for the government you know you would put together a package to the government you're either exactly a judge all of you want to put a package together saying that the eight a is doing zero work and flying in the face of the government regulations that's not out there that was interested in working with them and colonel in that luster engaged colonel harris to go out and seek out the eight participant to assist them in the process thank you i'm just trying to talk about i'm sorry your eyes first the the selection of tropical itself was part of the scheme to defraud tropical was a small concrete construction firm they were painting operation tropical to do the construction but she said my firms too little for this and then harris came back with this project management of these these sophisticated projects and she said i didn't understand the concept or how we were going to do it her background was in hotel management or her degrees were in human sciences even though she did some human relations work for four am oh tel and they had no experience in the in the sophisticated and highly technical areas that they were doing and as the district judge found they really didn't have the capacity to learn that she just couldn't hire an employee well that the the technical part of it is is evaluating the corps of engineers dredging operations and the technical part of the net zero are these all of these different alternat sources of energy negotiating with the p c using lawyers they even just looking at the table of contents of the deliverables you'll see you'll see how difficult that is it and if you say if you say  well luster could find the people and then she could hire them but is there any real meaningful management is earning meaningful learning in doing something like that  the first set of a false representation occurs in the in the creation of the joint venture agreement yes he didn't sign the joint venture agreement and no matter who circulated the template for it winner's testimony was that it was harris who came up with the idea that charles winners was going to be the program director the overall in charge responsible for the overall contract performance and winners charles winners never participated  was never a program director he was never consulted he never visited jobsite never did any work whatsoever he was he was a straw man international boundaries and water commission there are two sentences in the record about that one is in the f b i interview it said in two thousand march of two thousand and thirteen kernel here said that there was this project one sentence about it and then one sentence from patricia winners that the project was done no information about what what the project was or whether it was really done two sentences about that in the entire record to answer your question judge a lot about the contract yes  colonel harris signed as the exclusive representative of truffle management a truck hold lester a joint venture he signed the contract on the next government exhibit twenty nine and government exhibits seven and the boxes is checked there that this is an eighty joint venture that's a false representation that this is that this is going to be a born to fight joint eight joint venture and putting a straw man as as in the in the joint venture agreement signing that the two contracts that you it's an eighty joint venture when it's really not in ajoint it's just that it's a sham it's a it's a pass through in order to work on the galveston contracts and bringing patricia harris out to the fort bliss kickoff i mean just to say hello and saying you don't need to stay you know if you do anything you can just go home in the first place and that she just didn't want to well that with the fact the the a p is supposed to be in charge of the operation but you can be in charge and sub out i mean that could be in charge and sub out if you're actually directing the project the sophistication of these projects was such that that then she had no idea what will this going on and she been in the hotel industry in addition to the construction industry exactly i said that she that she had been in the hotel as human relations business supervising people yes yes i'm not clear i had defended enough of this particular minority enterprise oh well the record what what would work or tell us about that how do they locate a minority in a pri obviously want to partner want to get the benefits of that of the program of the for actually the the first contact was someone said you ought to call this person and the first contact was charles winners talking to colonel harris and that's how they that's how they knew about each other and then as i said harris came to them and said are you minority contractors if you get this business yes and then he said he also was was saying i have a lot of contacts i can get i can get this business so what is the evidence of at the time you say the representations from my parents knew this it was fall yes i  experience was just in that as a mom and pop operation for concrete construction and painting wasn't anything close to to what was being done it this is  when they did no trouble did no work is that right yes they did no work and so he said he did it appears that luster was gaining access to eight a sole source contracts by using tropical status and said when you put it like whereas to the wire fraud come for each of the sixteen payments for the two the two projects in the stipulation according to the indictment that they passed in interstate commerce and one was from tennessee and i forget where the other one was from that the silence for the duty to speak really is comes from as a timing argument they say because of the not good there is one not guilty verdict for the first payment and because of the not guilty verdict for the first payment then the argument is that the jury must have believed before in the intent to defraud after the but if it was not clear as to one particular contract would we have to send it back for recent sing yeah i think you would it was i suppose a huge court calls a downward departure but it was a variance from like fifty seven to eighty seven or fifty one eighty seven he got twenty four months on a huge down variance and i didn't like to make the argument that he would have gotten the same sentence anyway but the court doesn't say   in that case they said well in these government benefit programs affirmative action programs the the emphasis is not on what work is being done but it who is doing the work and and were there was fraud  they said the contractor who even though we completed the project got the contract by fraud none of that or all of that counts because he's an unintended recipient and the minority contractor who did no work that's an unintended recipient also and here buster was an unintended recipient there shouldn't be contract money that for a company that it team the contract by fraud there was no government position  was just a pass through and maxwell talks about passthrough operations it was just as a vehicle to obtain the government contract they could give the contract anyway no they could not it's set aside from the record would be under the generous amount not not the zero amount or whatever that they're asking for would be forty percent of the one point three because the work was done and so it would what seems that's the brothers construction and that's brothers construction right and i was talking about maxwell and worship you have brothers and i feel does that too maxwell says that should be the last should be one hundred percent of the contract ok if we did it if we followed brothers would we have to sit in this back for recent saying again if you if you if it's not sixteen levels you would have had a correct guideline range and calculate because we don't have set a precedent that requires us to go that is exactly correct and there are different methods used by the different circuits and so we're trying to pick the best one and we need to do it right in this case because we have this is our first how is how is the luster and intended recipient when it wasn't a real joint venture and they wouldn't have gotten the contract if they had if there was no work done by tropical  look at the guidelines that a standard contract subtract what the government actually gets that's the way it's stuck but when you look at maxwell you look at those other cases are saying this is this is different because it's not the work that's getting that's important it's who is doing the work that's important on these affirmative action on drugs and here then the government was was was deprived of of the ability of the minority the winners were never brought to the job site they were never in the they were never asked to learn anything they were just treated as a as a as a shell company as a fake company you please the court honors i'd like to address briefly the government's points first the government makes the point that tropical lack the capacity from the very beginning to hire its employees that this was a mom and pop operation and that patricia winners didn't know what she was doing when she signed the agreement but if that's truly the case and the s b a failed to do its job at the very beginning the s b a knew back in february two thousand and nine exactly what tropical was capable of doing in february two one count was not guilty of the all of the rest were guilty what we do know though is what was colonel harris's legal obligation under the the agreement and what was really obligated to do since  were designated as the project manager and several government witnesses testified again and again that colonel harris under the agreement was not responsible for reporting tropicals failure to do its job and he was reassured again and again and again that it could happen over the life of the contract and so the government's position that tropical was not this construction management firm it was a construction firm that only dealt with painting with no experience that's completely irrelevant the whole point of the joint venture as for eight eight and to get experience so that it can continue to get different job experiences that it otherwise wouldn't have that opportunity to do the only way you can get  is if the if the a company lacks the capacity to do it on its own and so jose compos who is a twenty nine year veteran under the s b a testified that the goal of the company is to get experience so that hopefully the company can do it on their own the next time around it's very natural for a construction company to want to do construction management it's not some sort of janitorial type work doing construction for the very first time this was a company that perhaps didn't have a lot of employees but they were in hiring qualified subcontractors who could do that type of work and that's exactly what they did during a baffling to me if he's constantly seeking surance is that it's ok that they're not doing their forty percent at this present time wh going to the government saying are you sure we're going to anyone seeking clarification on this if you scheming from the get go but at the same time we do have this jury verdict and i can't figure out did was is something honor i'm not sure i can't answer for the jury but i do know that you know over and over again when the contract was going on he attempted to get patricia winters to hire her employees and again and again she said before the galveston contract even started that she was ready to go and that's in defense exhibit sixty six sixty eight sixty nine we're ready to go i'm ready to go i have all the updated information here's my package of benefits and then as the contract proceeds he they can do this over the life of the contract but the contract was cut short prematurely before they were able to complete