good morning your honour's may please the court my name is katie henderson and i represent michael harris the defendant appellant in this case i'd like to reserve two minutes for a bottle of your honor's at issue here is whether mr harris is false statements on a financial statement form and submitted to the financial litigation unit of the united states attorney's office caused a loss within the meaning of the guidelines such that a twelve level and handsome and and quadrupling of his guidelines range was warranted represent a loss if if that is correct then wouldn't we have to affirm on the ground that even though it's less than two below two hundred fifty thousand dollar range the sentence would be the same so you know if i'm correct about the one seventy one would there be any difference when we have to for sure your honor i take your question to be the district court didn't say that if the guidelines range was what it would be if there was a ten loved one handsome and then i would impose the same sentence here and in fact a few pages before the court when it inquires about what that guidelines range would be if a ten level rather than a twelve level enhancement applies the court said i'm just curious i'm not trying to split the baby could you know sure i want you to where the court says regardless whether the guidelines range is x or y i would i would impose the same sentence here and i'll turn now judge kleinfeld to the statement that i'm referring to which is on i believe let's see of page twenty five of the record the court asks what would what would the guidelines range be here if the ten level enhancement applies and the court says something to the effect of well it would be a lot more inside the government says something to the effect of well it would be at a level thirteen but i don't think that's what the court should do here is apply is split the baby and the court says i'm not trying to split the baby i'm just curious to know so what i think that indicates is not that the court would it was asking because it would have imposed a the same sentence an eighteen month sentence if the guidelines range was was one bumped down a ten level rather than a twelve level enhancement so your honor what mr as the court clearly knows what mr harris failed to disclose on this form was a spendthrift trust that spendthrift trust was composed of his parents assets and was set up by his parents principally to protect their assets for their grandchildren are you talking about the one that's labeled terrorist trust agreement you know that's right judge and the district court here concluded that  mr harris is false statements caused a loss because if he would have disclosed that trust all the funds distributed from that trust would have been paid down paid towards his one thousand nine hundred seven restitution order and i don't think your honour's that reflects the realistic economic approach that has been adopted by this court for purposes of loss calculation and that's that's for two reasons the first is that if the government had known about this spendthrift trust and had sought to garnish any funds or any payments that were distributed from it realistically the trust would not and really could not have distributed any funds because by its own terms it didn't together with personal property in the in the house to the trustee name below i'm sorry are you looking at the hair stress that's right ok my looking at the wrong one no no i just wanted to clarify and you're looking at either of them both there were two trusts at issue here both of them of the both the harris trust and the read and gilbert hair stress had a spendthrift trust i don't show here is the spendthrift trust i provided and the harris trust because that's where these these labeled paragraph five spendthrift and that's that the spendthrift clause that i'm i'm referring to and what that clause says is that the interest in the of the beneficiary in principal or income shall not be subject to the claims of any creditor and why i think that's important is because realistically if the government had gotten rid of garnishment for for this trust the trust really couldn't have by its terms distributed any any payments that would have been garnished towards restitution you know i don't really i am confused here because it seems clear under the previous decision by our court which is law of the case that the government can't take the principle but it can take distributions and it has a continuum you know in distribution so i don't really see what's at issue there that's right this court and united states versus harris found that mr mr harris is the defendants here  interest in the spendthrift trusts was was federal property within the meaning of the federal debt collection proceeding statutes but but what i'm referring to is not whether or not the government could garnish any payments or distributions this court has said that it can what i'm referring to is that the trust itself the trustees would not have permitted payments to come out of this trust that would have been garnished how how does how does that argument affect your friend all one hundred seventy one thousand dollars which was actually distributed to him the one hundred that's right the hundred seventy one thousand dollars was distributed to him my what i'm submitting to this court is that when the district court made its finding what it determined was if mr harris had disclosed this trust that payment would have been paid down towards the  him i disagree with that because i think if the government had known about this trust then those payments would never have been made because they would have been that would have been inconsistent with the terms of the trust not as you've suggested kleinfeld it's not that the government could not have breached them if they were distributed it's that they would not have have been distributed you want to reserve i do thank you judge morning and may it please the court yourself the united states i just want to start with the last thing that counsel said which is that if the government had known about the trust the payments would not have been made and that is precisely the point your honor that is why it's loss in this case that i don't know if it's the point for me my concern is the one hundred fifty thousand dollars that went to the woman who was his victim and then it's girlfriend or maybe girlfriend and then victim i don't know which and then his wife i'm having trouble with why that should be treated as though or distribution to him it looks as though the one fifty goes toward a down payment on a house where his wife has a life estate and the trust tours grandchildren get the remainder there the remainder when he gets nothing and he has no interest in the house a s for whether giving half the downpayment to his wife is the same as giving him one hundred fifty thousand that seems like at doesn't make any sense also  can't count on the relations between harris and his victim and wife not to be adverse it's not as though she's a straw man and harris is really getting the money also i don't really see what a life estate has to do with a situation where they just give one hundred fifty to somebody who's who at least the government presumes is going to spend it on him i'm just having a lot of trouble with the one fifty and i didn't really see your help for my troubles and  including his employees who were the victims in this case so when we lying on is the son saying that the distribution was made to avoid the government getting the money yes and particular he said the distributions to harris's wife were trustee the son was one of the beneficiaries of the trust but he wasn't a trustee so he didn't make the distribution your honor it is not apparent in the record there are two sons and it's not apparent in the record which son made this  trustee at the time the distribution that went toward the down payment was made that is not in the record your honor we know that mr you fairylike just read the trust instruments and figured out you honor there were several amendments to the trust that are not in the record oh is that why i couldn't find yes or why are they in the record the government's got the burden of proof on this your honor i don't know why they're not on the record your honor the district court apparently don't know what it looks like to me is the son certainly has an adverse interest because whatever money dad doesn't get he does he and his sister i think it was at but if he's not the trust store and he's not the trustee he's just a potential beneficiary with an interest adverse to it was crooked father then it strikes me is hearsay with no way to know all except he wouldn't know why the distribution was made and what's more if it was perfectly would get him to make the distribution other than to the son it wouldn't matter why that was done and that's the second point your honor is it's not perfectly legitimate under the terms of the trust to make a distribution other than for mr harris is benefit by the terms of the trust itself the trust could only distribute funds for mr harris is a benefit and so if a little time was if it wasn't for his benefit and it turned out that mom liked his wife girlfriend better and she liked him and she thought he was a crook then he can sue her or whoever the at trustee was for making an improper distribution but that doesn't mean that it was actually made for a proper purpose but that is all speculation your honor what that's all that's what you're saying that it was made for an improper purpose because since he wasn't trustee as far as you've been able to prove the son didn't make the distribution and he didn't even know the motives of whoever made the distribution your honor we do know that he was that mr harris the defendant was the trustee from two thousand and nine from at at least two thousand and nine through two thousand and fourteen because that's when he wrote the checks to himself from the trust  record your honor i keep telling you the evidence you would like to see in the record is not in the record you know ever there is evidence in the record the evidence is going up against you've got is this inadmissible hearsay statement from the son that he thinks that's why the distribution was made that way  sentencing hearing i don't think that the hearsay rules apply and if it really did it is a statement against his interest because he if the victims get this money he doesn't get it so even under the hearsay rule does he does you know the difference between a life estate no remainder can't see where it's in his interest the more dad gets or the more dad's girlfriend gets or wife the less he gets correct your honor yes your honor however he is admitting that he is part that his family trust is is is committing fraud he's admitting that they're making distributions and always a way yank is union the son the son is it is yes i don't know if you'd call that an admission exactly it's a  claim basically that whoever is trustee is ripping him off by giving away his money to is crooked dead be that as it may your honor it is the evidence that we have in the record that is not speculation we have two pieces of evidence one the trust is required to distribute the money for the benefit of mr harris and to mr harris is sun said the distributions were made to the wife in order to avoid paying the credit required to stop at a red light i always wait because in this town people are always running the red light when it first changes had just because the love rest is required to do that then mean it did or does but it was not clear error for the district court to assume that everyone was being honest or were the trust was distributing things in the manner that the trust w i just don't see be evidence and i really want to know it had to show why the distribution to the crooks wife of a down payment toward a life estate amounts to a distribution to him because your honor it was a distribution for his benefit counsel before you run out of time i'd like to ask you about the hundred seventy one thousand dollars opposing therefore we should not consider that a loss and also it's not harmless could you respond to that yes you are on the harmlessness point first counsel read the court from excerpts of record twenty five excerpts of record thirty three i think is what your honor was referring to right where he says yeah if we assume tan it would still be within the guidelines you know i'm going to give you eighteen it's not crystal clear but the import of it mr harris as a trustee of the trust wrote to himself and and he while he was hiding the fact the trust existed from the u s attorney's office as i stated the son admitted that this was all done to hide the trust assets from the from the creditors from the victims it's money that he actually had in his hands and because there was a lean in that was placed as soon as the restitution judgment was entered any assets that he had were rightfully assets that belonged to the victims not to him so any money that he had that came from that trust was rightfully his victim's money that he converted to his own personal use and that is actually lost to them because they did not get that money he was required because your honors want to make i think one or two quick points in the first is that as i pointed out in my briefs or tried to i think the fact that there's no loss in this false statements cases is borne out and buttressed by the fact that no additional restitution was ordered i don't understand why there's no loss of beneficiary who's seventy may still be young enough to enjoy getting their retirement distribution and one who's eighty may not be is the way is that the way these retirees are getting their money it's a delay in the paying down of the restitution order of the debt well did anyone pay the retirees the money that he stole so it could be paid out of the retirement fund he has made payments your honor the government has garnished his his some of his wages some of his so it's not like the government has stepped in and paid the retirees and then he just pays the government not that i'm aware of you know he's made i think fifty six oral argument calendar which is what converses arnold