turning st to procedure on reasonableness the st point mr mccollum raises of the district court miscalculated his guideline range when it included the enhancement for sophisticated means taken as a whole which his court does upon review offense conduct here bears none of the architecture necessary for the sophisticated means enhanced under the guidelines sophisticated means is applied where there is especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense or conduct such as hiding assets or transactions both through fictitious entities shell corporations or offshore accounts but he did have various bank accounts and he didn't transfer money from one to the other he did your honor if i did that to conceal no your honor that's not our position would be he did not do that to conceal and in fact it was readily apparent whose bank accounts those were prior to the offense conduct here and they're going right to the offense conduct here which ran from two thousand and eight to two thousand and ten mr mccollum had several businesses for many years and several different corporate names the government presented his office manager at trial at trial her testimony establishes that it was well within his practice to transfer funds among these accounts prior to the offense conduct whether that's good business practice or not it wasn't done or structured in an effort to facilitate or conceal this offense nonetheless when i do we have to look at the intent i mean the the characteristics of this crime were that across  jurisdictions with us in canada it was undetected for many years involve the transfer of funds among many accounts and of all the creation and you can use of fake promissory notes and loan documentation and we i don't think we've required much more than that to be together count for printing a predicate for applying the sophisticated means and handsome and so i think that the court has required that there be an intent in other words when you look at the case law that this of this court the type of conduct that we're talking about the creation of accounts for the hiding of transactions which is what the guidelines require the creation of shell corporations that engage by definition in no legitimate business is what the guidelines require here what happened during the financial downturn of two thousand and eight is a mr mccollum's legitimate businesses imploded and he lost millions of dollars of primarily his father in law's money he turned then to more risky investments in attempt to recruit and there in began what would amount to this crime it's not a simple ponzi scheme where he was taking money from one dollar investor and using it solely to pay other earlier investors what you find here is that he is taking money by falsely representing high returns to investors they're in his the fraud by representing that it's secured by real estate or insurance and they're and is the fraud but he uses a portion of that money to invest in other real estate transactions like the barton hotel in lewiston and the dove valley estates in kentucky actual legitimate real estate investments though not nearly worth what he was representing he does use a portion of the money to pay off earlier investors but he is chasing his losses and gambling to try to recoup what he lost in the economic downturn the case law your honor here i believe requires architecture i think the guy in line to require architecture that the fraud be structured in a way so that when the approach to an investor  happens it is designed to overcome their will so to speak and if you look at some of the case a lot of that involves the creation of fictitious portfolios of assets that don't exist the alteration or creation of financial worth statements didn't happen here when offered to prospective investors so the bell rely on the commentary on the guidelines and says especially  pertaining to the execution or concealment so just carrying out the execution for example locating the main office of the scheme and wonders stiction but the soliciting operations in another is enough to be sophisticated means that's not particularly complex the use of pictish is entities corporate shells or offshore financial accounts ordinarily indicates it's the use of them the fact that he used several different bank accounts where they were preexisting or not still suggest to me that there was likely enough for the court to have applied the guideline the marriage was to that is twofold your honor st i think it requires that they be fictitious that they have been invented for the perpetration of this offense and that just simply wasn't the case here but i would also say your honor that none of these accounts were difficult to trace they were all readily in mr mccallum's they were all business account or personal accounts that he held for years all of the movement of money was traceable through those accounts i would also like to know that although there is an account in canada he had legitimate real estate investments in canada pre baked pre dating two thousand and eight so again he doesn't create a fictitious offshore account to facilitate this scheme it's rather part of an all in a row of legitimate business activity that when he goes s off the top of my head i'm i'm fairly certain it is fifty seven to sixty four months if you reduce by the enhancement ok thank you you want to talk about likelihood of reoffending or the rd party risk notification i gather that  could you describe what happened on that issue can your honor and i think it would be important respectfully for the court to reach it here because we do continue to object to the new language we haven't decided a case on the new language not to not know your honor not to but the government also hasn't had a chance to respond to that i don't believe other than in this case yes well we'll hear a new language you can find a page six of my reply brief is frankly more vague than the old the language itself doesn't actually impose upon mr mccollum or any defendant a condition whatsoever it says instead that if at some future point the court in consultation with probation determines based on certain factors that you pose a risk but this is sentencing and the conditions of release are meant to provide clarity to an individual of what conduct will result in their going back to prison and there isn't any identified risk in the new language itself there's no opportunity for one because this is a standard condition of release and not a special condition of release but that this does require the court and probation to consult at the at the start which was lacking from the condition correct yes your honor but it doesn't actually identify the risk which is what this court held in peterson and bowles that the sentencing court must identify the risk before imposing the condition and then set forth the scope of the notification requirement of course the nd part of the language in the new condition still delegates to probation the probation officer may require a defendant to a supervisor to notify a person about the risk and may contact this rd party to confirm that the notification occurred that part is clearly a delegate delegation that the court found improper in bowles and peterson and if i may i think the issue when i read the court's caseload now almost twenty years in its existence you were there peterson correct was there peterson i respectfully believe this needs to be a special condition of release because in order to meet with this court is directed in order for the court to define their nature of the risk it would need to be a special condition and not one imposed on every single defendant in the western district of new york because the risk by nature is going to be individual and then the scope follows from there it also fulfills the statutory obligation of the court under three thousand five hundred and eighty three d to ensure that that the conditions it imposes are no greater deprivation of liberty than necessary so for example the court may identify risk but there may already be a special condition addressing it not isn't that something that a court would consider when a probation officer arrives and says i would like authority to notify this person about this risk would be out of control though i certainly don't mean to imply that but what what the conditions of release require is clarity in order to satisfy due process a defendant has to know with clarity what conduct he or she can take and what conduct he or she cannot take what will what will what will a defendant do to contravene this condition that could result in a deprivation of their liberty of being sent back to jail would exercise judgment about that and would and would not for example if you have somebody who's accused of running a ponzi scheme that the but the speculation that you're honoring gauges in is exactly why this is a violation of due process and well taken but you know and again i would just like to know we don't suggest that there is no basis for the potential risk notification condition in this good morning may it please the court michael giacomo for the united states of america if i may i would like to go in reverse order and start with the issue we were just discussing with the rd party notification and i have the position of the government that as we put in our brief that when the district court provided the original condition of rd party notification condition it didn't comply with this court's decision and based upon his as as you noted your honor that there the western district came up with a standing order that now says if the court determines in consultation with probation that based on your criminal record personal history and characteristics and the nature and circumstances of the offense you pose a risk and it's all there for you in black and white i believe that this new standing order alleviates the concerns that were raised in this court's decision prior decision it would be lost if this was and if this was applied as a special condition and sending order it could be i don't disagree that it could be applied as a standing condition i i was under i was reading that the defendants brief in the argument that because it's vague as it sits here that the court determined in consultation that it's the nature of the risk that this is speaking to the nature of the film committed notification because probation what let's assume mr mccollum when he gets released from incarceration applies for a job in the banking industry or decides to go out into the financial world for whatever reason he successful in taking the job it would be those type of circumstances that may warrant probation contacting the district judge i don't think and i don't think anyone is disputing that it might be appropriate to have a notification requirement in certain circumstances the problem is that the standing order is a standing order plaza cross the board it says you've just pose a risk of committing further crimes it's not specific at all as to the particular risk you just on the probation officer may require you to notify the person about the risk suggesting that's the probation officer in the end who makes a decision the court determines which talks with the probation officer now the court is injected into this but in a very in specific way and in my view let me just clarify one thing you have not had the government has not had a chance to take a position in writing on the merits and demerits of the standing order is that correct because it came up kind of at the last moment i was thinking that my colleagues and i might benefit from having a written submission on the merits your position about the with the challenges raised by your adversary to the order of judge park that cynthia could could we have a letter brief in the next week one of the other questions a couple points with respect to the sophisticated means enhanced just i would like to know the court i'm with you i would like to hear that we're looking at the documents that were created they where i could i could do that that was really sophisticated i mean they were the notes where three lines and they were they were three lines these these were prigs listing entities there was very little other than the in any ponzi scheme or any fraud there was an intent to conceal in of sophisticated means in this circumstance the factual basis your honor that that the district court heard my opponent's brief looks at what the defendant didn't do i think as the district court judge she examined and look at what the defendant did do now he ran into some financial problems having lost over four million dollars of his father in law's money but what he did is when he went in his own admission to the court which is contained in the record he had no is that he went out and tried to seek investors i grant and concede the fact that his promise ery notes are nothing that should be put in any type of legal forms book with respect to sophistication but i think when you look at the other investor money and then say hey by the way now that i've met and paid you your twelve or fifteen percent interest before i give you this money i would like for you to consider reinvesting in which they did that help again but again how that different from just any ponzi scheme can't can you point to anything specific about how this crime was committed that is especially sophisticated well with respect to mark ballas who he retained i believe close to five hundred dollars or eight hundred and fifty thousand dollars he provided him real estate documents maps things of that nature to entice him to invest and that was a significant investor he provided him a property map he said this this is the property i'm going to be tying your and showed the court and the jury what he was presenting i cannot sit here and say that mr mccollum created those documents or where he got them your honor it would be i would not take such a liberty so i believe when you couple the fact that he was using other investor money he was entice and investors over in canada filtering their money down into the united states through that foreign bank account that he had up in canada the h s b c account and the fact you know he  he lied to he was also concealing what he was doing to is what i would call his business partners and how sophisticated was he to know there's other i will concede that there's other cases where individuals engage in this practice were perhaps more sophisticated but am also comparing to garden variety mail fraud as opposed to securities fraud well i mean that we don't know is the court said that this wasn't the garden variety mail fraud your honor if that's the question you're asking me with because of the although the way he was successful in  orchestrating this scheme the court judge wilford went in great lengths because these were objections that were raised as part of the pre sentence investigation and she she made quite the detailed finding as to why she felt that this case was not the overview of analysis per faired from various bank accounts he represented victims of their investments were secured by property which we just talked about he also told victim investors that their investments were secured by a life insurance which in fact was not he embellished his net worth all things that helped him conceal and made this event sophisticated in the government's eyes as well as the district courts us ok thank you very much and he provided a promissory note either upon request or possibly to induce a particular investor they were not false they were not fake it is just like the promissory note i signed when i took my student loan it says the bank gave me x amount of dollars and i promise to pay them back by a certain date with a certain amount of interest that is all those notes say it doesn't make a representation of how the money will be used or that it's secured why can't one say that  scheme is by definition and you know much more sophisticated than ordinary writing well for i think the sentencing commission could potentially say that your honor but they don't and in fact under that he was convicted of offer the sentencing commission statistics and on securities and investment fraud under the statistics which i do cite my brief only approximately thirty percent of cases actually receive this enhanced meant in securities and investment frauds they don't break out ponzi scheme so to speak your hon but i think that that is a telling statistic it's not meant to apply to every case mr mccollum scase but before it gets to this point i want to reach the mr bailiff says the documents mr bayliss provided a trial jovially real estate is a true  actual real estate development in kentucky and if you google it you will find the map and you will find the documents that were provided there was some in introduction a trial that mr mccollum is likely being victimized by a yet separate real estate scam or a ponzi scheme that he thought was legitimate we didn't get much evidence in in that regard and there was no further investigation but i offer that a simple google will produce those records and finally mr mccollum fraud was born of failure and desperation and absolutely bears no home mark of sophistication in his disorganized there's no consistent approach to investors it is simply not sophisticated and to apply it here would be to apply it in every case and actually dilute the value and importance of the enhancement and this court has recognized the value and importance of that enhancement in united states versus amigo in united states versus lewis we  e the district court a fair amount of leeway in applying and hence mint such as is this one can you point to a case in which we've struck down the application of the sophisticated use enhancement in the nd circuit you know your honor i can point to both the th circuit and the th circuit i cite those cases in my brief where they have stricken the use of the enhancement and i do quote a district court decision in alabama that i thought was on point but certainly not in no way presidential here thank you very much i think we have the arguments will reserve decision