to a ruling from the court sustaining the trial court's ruling the district court's ruling that fraud does not involve the tiriel misrepresentation or an omission of material fact or indeed any other form of  sent government agreed that the court's instructions an honest services fraud did not contain any element of a reference to deceit or misrepresentation or omission how can you argue exams such an argument in the face of natter the government seems to say that that thirteen forty six never was a thirteen forty one mail fraud case and because it was thirteen forty six and out of service is fraud that somehow there is a looser definition of fraud in fact a definition of fraud that doesn't need been involved fraud it doesn't it doesn't involve deceit it doesn't involve fraud that can be applied in honest services cases but if you look at thirteen for obvious from the legislative history as well that its only purpose was to include within thirty even forty one and thirteen forty three the definition of wire and mail fraud a non monetary kind of fraud that is a scheme to instruction is wrong well if it is i didn't factor absolutely that instruction is probably commonly given in conjunction with thirteen forty one instructions and maybe in a lot of cases it can be given in such  material fact right however i think it's subject to harmless error review even if an instruction omits an element of the crime namely that one yes i right underneath it is absolutely right and this seems it seems so so why does it matter it seems like it's undisputed they just represented his consulting fees money that wasn't consulting fees well your honor it would be extraordinary for the government to prevail on a harmless argument in this case because the trial judge himself at the end of the government's case throughout the allegations that the defendants had obtained money and property by force representations or omissions by saying  that it did not find those it essentially what the indictment alleged was not so much false representations but failures to disclose and the trial court found an absence of any duty to disclose but that's not quite right  listen judge threw out with respect to the money and property theory under the mail from county only part of the different judge did not throw out that part of the money and property claim with respect to the money that went to the stepfather of the girlfriend because as he read the governing statute the money had to come quote to him and that was the only money that came to him so different judge did not throw it out entirely but that that find it by the instructions the government had to prove beyond a reasonable doubt that the absence of this instruction made no difference at all in seems like there was evidence and there was no consulting fees is that right well there's certainly was evidence of that effect on it there's no evidence that would throw any doubt on it but but but your honor when when when the court acquit struck the representations segment from the indictment entirely and this this case went to the jury all it was left when you amended the indictment was the failure of a duty to disclose the failure to a duty to disclose in other words the misrepresentations were pulled out and the only theory there was a judgment of acquittal the only theory on which the case could go to the jury consistent with the original indictment was not a failure to disclose  and i submit your honor that that the trial court's ruling that there wasn't a duty to disclose certainly made this a trial balloon case i'm not even sure the failure to disclose went to the jury as as i read that instruction and didn't even say judgment of acquittal on it we can't possibly affirm on the theory of misrepresentation it let me ask you this and we've got to kind of harmless error things to get past one of them is plain error because the instruction was not objected to on this ground and the other one  preserved the government's only play an arrow argument is that it says well ok that's closer but the courts failure to even say there has to be an attempt to deceive was not the subject of an explicit when you're when you sit down if you can services here quits on money or property he doesn't care but on this representation well well your honor it is only that once he struck it from the indictment to the word money or property by misrepresentations pretenses and so forth are struck from the indictment completely out of the case there's been an acquittal on that theory the only language which is consistent with fraud left in the indictment is omission if you really actually redraft the indictment if you'll find it in is well there and in response to judge kleinfeld question well there was enough evidence in there to support misrepresentation that cannot be a tough check to chapman error because then you're talking about a very then you're talking about or you're talking about conviction on a theory of which the defendant has been acquitted the theory that is left in the case is a failure to disclose and on that question the court had said it didn't find a duty disclose so what we're talking about here is a case that was eminently triable and whether there was a violation of the duty to disclose when that's the only theory left in the case after the court acquit and strikes material from the indictment and under their own  reversible you're saying if all that's left is to be to disclose and fraud underneath or requires a misrepresentation or concealment and there is no proof of either misrepresentation or some sort of active concealment of anything it's just a breach of fiduciary duty which is a civil wrong and it is not fraud oh no no no be because you said there's no proof you could have substantial proof of a crime in the record and if you have a federal constitutional error the fact that there's sufficient evidence to sustain a conviction thing in this case your honor is that the you would have to hold that the evidence of the failure that the defendant deprived the union of honest services by failing to disclose certain things is so overwhelming that it can be helped to know you and i are looking down different paths here what i'm saying is if i understand your argument right even if it was overwhelming or not contradicted that he didn't disclose so long  didn't misrepresent or conceal he's not guilty of the crime because the crime requires misrepresentation or concealment mere squeezing us is not enough well just reaching for do carry duty is not enough well that's and i look at the financials when the executive director brings a man one thing you always have to worry about if you're on the board of directors is this effective directors feeling but as long as they see consulting previews and do something really complicated possibly probably beyond the executive directors ability and expect consulting fees well your honor there's substantial testimony in the record however that there was no by other members of the board that there was no duty to disclose the nature of the hiring here and therefore it certainly was a trial case on whether there had been a breach of a duty to disclose know well it is certainly i mean one thing that's critical is that if somebody stood up a union president stood up and said i'm going to hire my daughter and i don't even care if he's the most qualified person in the world he might be produce reaching produce jerry duties you might be committing other legal wrong and he's certainly not committing fraud no it's a little different it's more like what if somebody tells what's it's fifty thousand dollars going to your daughter well that's a consulting fee she's in the business of consulting on a matters well ok we don't have any objection we're all bringing our sons and daughters into the union i mean take care euro but if it's not really a consulting free and she's not doing any consulting that's  and it looks to me like she's not doing any consulting it is deceit and just because no member expressed explicitly raised it in the hypothetical way i've described doesn't mean that they wouldn't look at the document and think wonder what this money is going to this mysteriously name corporation oh it's consulting fees what's ok but you wanted the evidence of that is that these were not consulting fees was not an contradicted  there was indeed evidence in dispute on that question there were indeed activities that mr aberdeen it was engaged in and of course the jury never reached the question of whether there was deceit in that regard because it was never asked to and this court would in effect have to say that there is there is competing evidence in this situation the jury never reached a critical elements of the crime but we will essentially usurp the jury's function and find  that that where we were jurors we might find the case proven it is neither is it is a situation overwhelming evidence an contradicted evidence that that is not the situation in this case and i'd like to keep well the well there's a number of the issues as to different counts where for instance and the prosecutor parent was under the impression that you could have a count over here and somehow incorporate language from other parts of it without doing it specifically that's a separate question but but the you know there was originally a scheme to defraud and there were misrepresentations and omissions listed that that charging may have been adequate of the fraud crime and then it gives instruction which it doesn't require the jury to find those allegations to be true the instructions given here and let me say that the instruction given here basically could permit this jury to convict on the basis of non criminal conduct hiring a daughter may be a conflict of interest absent some specific criminal statute it is it is not a crime is certainly not fraud unless we get into the element of deceit and the one thing that we know for sure is that the jury's verdict in this case do not represent any finding of deceit on the part of the defendants and left evidence had the jury believed her number one three witnesses  was evidence the consulting work was done the second offense that was presented looked you know through cross examination was that in fact the consultant fees did not come from the union or the union but the consulting fees came from the insurance carriers that it was part of their overhead that was contested evidence and in fact all that matters it's like the employer share of social security comes from the employer not the employee but he still looks at the cost of hiring an employee including that expense i understand you want that there was extensive evidence in this case that it did not that the consulting fee did not affect the premium that if the union was not losing money and union members were not losing money then that affects and goes to the question of what would entitle to know and was he right or wrong in not telling it does go to the question of the seat as well as that some of these consulting fees are really just described payments to family members for doing very little work you know but what was presented to the jury extensively was that everybody has consultants and use them in different ways and the percentage paid in this case was  according to the record so i'll just have to allude to it briefly employers sent to the union money representing an employer share in an employee share of premiums the union took that money and passed it on penny for penny that these were designated funds and even the prosecution's theory was that if if the if the sponsor been placed in a separate account by the union and passed on that would not a been a crime it was the notion that they were put in the status i'm sorry that really matters i would think that if you if the teller if money that the prosecutors brought into a bank was put in a trust fund for the deposit or and that would really would raise an issue of whether the tellers embezzling the bank's money or the depositors money but because the money that the posset are put brings to the bank goes into the banks unrestricted accounts in the bank lends it to people for home mortgages your car mortgages or whatever it wants it's because it's in the general fund that the tellers investment from oil and well let's talk about what the alleged embezzlement was what was the best here because that's what an investment requires of taking what was the taking the money was taken into account and passed on to each of the ass with the investment accounts alleged is that passing the money to h d s as premiums was somehow investment what was the theory of that embezzle perhaps more important it was not a theft because it was passed on to h d s now the theory that the government originally took before trial in defending the charge was that as soon as the money was sent h g s that was the completion of intention that it be given back to robin seventeen e to do consulting work which she did not do because in fact each step of that is not proven by the evidence below or was at least contested and a properly constructed jury would have been  on these investment charges because the charge itself did not incorporate the theory that sabbatini was doing was going to pay for the somewhat that wasn't done to the environment count specifically incorporated number one it wasn't the union's assets number two every penny went through number three the premiums were in fact lower and number four the premiums were a cost to the carrier and number five sabbatini did in fact do consulting work we argued every single one of those things because for example vigorously on every single one of those points and we truly believe that the end of the government's presentation that the government has failed to prove the negative on any of those after i do not believe the specific objection was made after no objection was not i don't believe that direction was made after the jury was instructed your honor their belief here well i think it leaves us with a number of things one is it also leaves us with the issue of constructive amendment the fact that the judge's instructions allowed the jury to convict on uncharged theories and it's still not clear given the evidence and the instructions whether the jury so they were from it to try to convict on either the theory that sabbatini got consulting fees that were earned and that was the plan which was not charged or that he committed and that's contrary to what a labor official ought to do which was not charge objection has been valid we presented to an obstruction and the court rules on the objection it says i'm going to give the following structure notwithstanding your objection i'm not aware of any rule that requires a pro forma objection for the record after that if there is such a rule it's news to me and i will follow it in the future but i think in this it i don't believe there is such a rule and it certainly would seem to me to be a futile exercise if in fact we asked for instructions that were not given and objected to ninth circuit form instruction was used again the defense lawyer was saying there has to be to see or misrepresentation are rather he said there has to be a misrepresentation or concealment of material fact the government said no that's not right the defense lawyer stood up in oral argument and he said that neither need or need or and then he said i'm all done unless the court has questions and i thought he was all done because nader says and where is that then in the instruction argument that is under the under the non technical standard for proving frog the instruction that requiring the jury to find that the defendants knowingly my harmless fair argument we believe that under the non technical standard looking at the objection the defendants made in the instruction they requested in the district court they requested an instruction that the jury be required to find a specific misrepresentation or emission of fact and i think it's clear under this court's law before and after nader that fraud well it requires deception doesn't require the jury to find any specific misrepresentation world mission of facts and our argument is that that scheme or artifice language construed in life let me understand where you're going with that argument are you saying that the form of the injection then is insufficient to preserve the objection and explain her you just saying you disagree  instruction i want to we there are two parts to their argument one one of their arguments we have deemed preserved and we believe that their request for a misrepresentation instruction effectively preserve the t to defraud goes to the mental state obviously and they did not request a mental state an instruction for and for intent to deceive or cheat and so we believe that part of their argument is not sufficiently preserved but i see in other words you're saying that they kind of made the argument but they didn't say the magic words they they did not mean they only made one instruction your honor then it was requested one instruction and made one of jackson with respect to the mental state required to prove fraud and that  adopts that harmless or standard in fact the court in that case where you have a similar mission from the instructions remanded the case to the eleventh circuit which as you know reasonable resort of acquitted on as evidence are makes clear that where there is overwhelming evidence of the omitted fact which we have in this case the error to be clear beyond a reasonable doubt that clearly on a reasonable doubt what that no reasonable jury could could have acquitted on as evidence going to convict i just help me out as to how things sort out beyond a reasonable doubt that it properly instructed the jury would have found the omitted element that's the standard your honor and we believe that standard satisfied here we have as another was no reasonable jury would have would have acquitted because the entire scheme in it was the centerpiece of the government's case the entire scheme was set up to treat as consulting fees what basically kickbacks exception reports and those exception reports the evidence showed a trial did not think consistent and i'm not asking for your version aliyah but once i'm asking you one question you don't really want but can you characterize in as favorable a way as possible the other  side the evidence that she was performing work i understand what your view of the evidence has but what was her view of the others was that evidence put on the evidence was that she submitted these exception reports beginning in one nine hundred ninety eight which were submitted sixty or ninety days after the relevant period which reportedly purportedly were supposed to be helping or it looks phony to me but i'm wondering how do i say as i have to say under the chapman test restated a need or that it appears beyond a reasonable doubt that the error complained of did not contribute to the verdict of taint let me tell you what i'm worried about these people look like crooks to me and it looks pretty plain to me i don't really have i don't really think there's much to their case but i worry because the jury was not told that it has to point to something and say that was a lie told to the union in order to give the unions money or the insurer or the money that was passed through the union and i have to be sure that didn't matter and what i'm thinking is  it's all kind of complicated there are legitimate consulting contracts what's more late reports don't mean they don't matter people do charge backs all the time in business where at the at gee we do it on our bits of bills no big deal common so the lateness of the consulting reports doesn't show they're not consulting reports what i worry about is that in a fraud case like this all the jury needed to be satisfied with was that these are really sleazy people and it's a very young and dirty guy running the union and funneling money to his daughter and i don't have to get their teeth  specific so show me exactly why it appears beyond a reasonable doubt that the have failure to instruct on deceit or concealment did not contribute to the verdict but the best covering earlier periods when in fact the company didn't even exist during that period in time to us that is holding out that company as a bona fide consultant for a period in which it couldn't have performed any work we also have using not her own first name but her middle name which the testimony showed she didn't go by and we have a restructuring of the entire arrangement to add an extra layers all of this we argue clearly and i would urge the court to take a look at the government's closing argument there s you also have a restructuring of the entire arrangement so that the money is no longer flowing directly to the consulting company but it's going through intermediary yes that we argued was designed to cover up and  union offices before that there's no evidence whatsoever of any work done and finally got the testimony of jane endo that defendant rodrigues again after learning that each of us have been served with a subpoena shredding tax forms this is example would be defending rodriguez resigning from one of the intermediaries that was added in to this consulting arrangement resigning from the board which he had been a long time board member and we argued that his resignation was intended to cover up what was really going on in the connection between him and the consulting fees so all of that we would argue constitutes farm harm any evidence sufficient to carry our burden under the question just has risen porton case for the government right yes or so why can't you do it right the first time well why why was it also slapdash i don't believe it was your honor again we follow why do we even have to be here arguing about all this stuff today i mean who went through this indictment who figured out who drafted it the u s attorney's office i believe in conjunction with organized crime section of part of they didn't do it right the day the indictment i believe your honour's is it is fine i mean in so far as the jury instruction issue that rightly or wrongly the court in the parties basically asked for the pattern instruction now in hindsight would it have been better to add more in yes but both parties are effectively asked for the pattern instruction slightly modified the defendants got one of the modifications they requested but not the other but that's where we're left with its people the government was careful the district court was careful and the instructions again were tailored after the nice circuit pattern government's case was concealment cover up and again i would urge the courts look at the government's closing argument that was what we were arguing about and by the way i would note that on the investment counts the jury was instructed that it it happened very quickly after the partial rule twenty nine was granted your honour's the the defense decided not to put on a case and in the case as a result we ended up at the charge conference much more quickly than anyone anticipated it would have been better to stop and think more and be a little more careful yes but did you have these it ready before the trial i would assume we did your honor but you know i assume you come from d c and that you office in conjunction with the organized crime i have something i have to when they put them together they were prepared they were preparing exchange before trial they just record gave a deadline which the parties and they were a little district court before trial yes yes your honor i have a question th having problems following because it's such a huge complex case when the judge granted that partial trenchant acquittal it really blew a hole in the government's case and it really complicated the instructions to the  arguments for what was left tell me what exactly what the judge took out and what the drugs left and how what he left then still enables you to make a case even if we disagree with you on  whether misrepresentation or concealment is necessary the judge is the judge of pretrial order grant partially granting the judgment of acquittal makes clear that the judge believed the money or property fraud theory to restaurants allegations of specific misrepresentations or omissions of fact the court found that the government failed to introduce sufficient evidence to prove any such specific this representation going to him that is to say going to mr rodriguez hence the got the records exception for the money that was paid to the stepfather of the girlfriend which was to result in a forgiveness of a debt owed by him court did not remove the fact of false sort of perception from the case altogether and we know that from the order itself which talks about some of the same examples i've already discussed with the court and the redacted version of the indictment which appears in the experts and record  fically pages seventy one through roughly seventy six or so of the excerpts of record talks about in these allegations again were were left in this indictment and the subject of evidence and argument at the conclusion of trial that redacted indictment includes very specific allegations of cover up and concealment and so we know from that circumstantially that the court clearly didn't intend to remove the fact of falsehood from the ca altogether i think i think the court really thought that the money in property theory at least in part required specific proof of specific misrepresentations or omissions look respect to money going to rodriguez yes you consulting fees read it it confuses us and it did it did the heart of the case was calling some consulting fees when it wasn't right and it is that part of the case i think that is the heart of the case and i think that again if you look at the government's closing argument in i guess what i don't understand is something that's not appealed so i don't have to understand it's not before me to decide whether the judges rule twenty nine decision was right so right i think that's i mean we're not we obviously we can appeal  a judgment that he went about it right i mean we're stuck with it but i guess we think it's abundantly clear from the record that the court did not it narrowed our case but the court did not strike a fatal blow to our fraud case the court left enough for us to proceed to the jury which we did that that was cohesive it was clear perhaps what i want you know i don't really blame anyone for if i were if i quit this job and went back into law practice what i would do differently because what i know as a judge write the instructions when i first got the case send a copy to my client this is what's going to be an issue but i have talked to other judges who've been crowd charges and they all say the same thing yeah that's what we do right the instructions when we first got the case civil case soon as the client through the just for whoever comes in with a criminal case soon as to defend the comes in but none of us knew that we were in practice that gosh i think we all that i'm at the last minute i did it when i was in event never asked for an instruction that the government had to prove with specific for statement that asked for the correct instruction that it had to prove a material for statement or omission the then the objection to the ok and over two to forty the defense says that the instruction as written is deficient because it does not require a finding of either actual or potential canary loss or any material omission or you have the original indictment which says that there was a scheme or artifice to obtain money and property by means of material for and fraudulent pretenses representations promises and omissions if you look at paid fifty seven you'll see that all of those words are struck from the indictment at it as it existed at the time when the case went to the jury so when mr when the defendant stood before the jury to decide their guilt and innocence they were not charged with making material false and fraudulent pretenses representations promises and omissions those words were struck there were no longer part of the remaining charge the there did remain in there a number of allegations of a failure to disclose but what i would emphasize is that in order to find a harmless error this court couldn't say oh there was overwhelming evidence of a false or  material misrepresentation or omission it would have to find overwhelming evidence limited to the allegations that remained in the indictment after it was redacted which were about a failure to disclose and i  would submit that there is a great deal of evidence in the court that apparently in the record that apparently convinced the trial judge that there wasn't a duty to disclose the one to him or the last three words that that there was a d and of course what what the jury was never told was that they had a limit their consideration of each count to the allegations within that count for instance in the health fraud was a failure to disclose the consultant chip arrangement so fifty six can't be affirmed on the grounds that there was evidence that the fees weren't paid or earned or earned rather because that was never part of the charge of the government was apparently under the impression that the jury could go willy nilly from one count to another and consider allegations made in one count in terms of another when the rule that the court is as stated again and again is that each count must be that point on temporal cajuns anything else so i don't think that there's any what very commonly happens in the trial context in my experience is that the settlement conference happened the objections were all made and everybody agrees that whatever objections the end of the settlement conference it was very clear that all objections had had been fully preserved so what the judge was saying is is there anything new anything i permitted rather than to you waive all your objections right right i think go all hard take exception in the federal role that's right i don't think that's required so the question i would leave the court with is is it possible to say that there is overwhelming an contradicted evidence as to the specific allegations in the indictment that were that remained after the rejection court may feel and the government certainly feel that the rule twenty ninth should have granted as to certain misrepresentations that there was adequate evidence there but we would all agree that that having been acquitted we'd have a double jeopardy problem if the if the jury could again consider or affirm or if this court could affirm on the grounds of allegations what about why couldn't we send this back judge fletcher raised in his questions the issue of how limited the language was in the rule twenty nine decision by the judge why couldn't we remained for a new trial on misrepresentations and concealment that were not covered by the judges rule twenty nine decision well i believe that if this court reverses and remains as obviously we believe it should that the government is any possible retrial for deceit or or concealment is precluded by double jeopardy no i think our position would be that retrial on the redacted indictment with all that properly would involved is appropriate but obviously nothing could be resurrected that had been struck from the indictment because i indictment and a retrial would be appropriate only on the redacted indictment and there probably would be some fights below as to the scope of that but the court would make rulings that certain things you know remain in the case  and i believe they were yes and just just one final point the government is correct that there was not a specific request that the court give an intent to deceive instruction but we are dealing with a court that said no misrepresentation or all mission is required in an honest services and so one i think that further objection is futile but secondly the absence of deceit i harbor for visions of twenty nine c f are are mandatory are the correct test and the court absolutely refused to apply that under the correct test there's no question that this was not subject to arrested because it was an exempt governmental plan