good morning your owners may please the court i would like to take eight minutes for my main argument and reserve five minutes of my thirteen minutes  this is a case about entrapment this is a case about legitimate and at legitimate business men looking for financing for their companies my client was one of them mr jordan my client was not the financial guy my client was miss the fish guy my client came to a meeting where he expected to get financing very costly financing agreed but financing at that time the government had set up a sting in order to draw him in to make him believe that this arrangement was something that he should be able to do and that it could be legitimized through the documents that were provided by the government the fundamental difference in this case from the entrapment cases that are cited by the government is that what was happening in the so called skiing in the set up the sting was not inherently illegal this was not a robbery case this was not a drug kickback and as you can see throughout the testimony there is the notion that the key is essentially a fee and it's discussed as a financial feat and indeed some of that that fifty percent fee was discussed as being more attractive than some of the financing and that he had to sell his company has his company had value  and i have difficulty coming up with with anything anything of that nature here certainly not enough to warrant the judgment as a matter of law  this was a single operation you're on with a lot of the language of the agent meant to make this a legitimate transaction saying things like this is not going to hurt my investors that's coming out of my own pocket that this is  we can this will be legitimated through the use of the in forcing providing the invoicing here comes someone and not and in some ways you're i mean this is a case where the government's creating crime a crime and they're taking a desperate business and now the desperation is an element that has been seen in the cases where you take someone you know is desperate for a crime you have no information that this person has been seeking illegal funding you have no information that this person is even a target they didn't even know about my client he believed that this was going to be legit at once it was going to be a deal that was good being good for everybody as indicated by the agent he continued to provide pitch materials he continued to provide mr jordan didn't think what he was doing was a crime he didn't think it was wrong he thought he was getting legitimate financing in in the jury resolved any issues of intent against your client your honor the induce dispute that and that he continued to act after the court heard me it so he continued to act after he knew it was illegal at that point when he's when he's or at least should have been on notice of it is when he's when he's still i mean it's it's not clear but to the extent that that there's a finding that what he did was illegal providing them in forces i think that's a critical juncture but prior to that your honor you have a situation where the government never s client and i think that's why mr jordan's case is different from the co defendants because they never say to him this is illegal this is fox they basically use terms that are just as legitimate as any other  that's what i find i find and i think that a court of law can find is a matter of law and the government's notion that if he had provided words like fraud or he had provided words like illegal that that would have blown this cover up that this is not that kind of case this is not about education let me ask you this so if i understand you now i think what you're saying is that the improper conduct you're alleging is that they made the transaction look legitimate to reel him halfway into it and then it was only when he was already caught up with it that he found out it was illegal and he didn't abandon it at that point right do you have any precedent that that type of approach by the government four minutes of rebuttal of my remaining time let me skip right to a couple of points based on the questions that the panel has and that is what is the conduct that was the inducement and you asked if there was a case in th advantage or exploiting certain conditions are present in that case but it's rationale is particularly useful here here where the government noted that it's a tool or advantage of a non criminal motive creating a corrupt enterprise and then solicited non criminals to see if they could figure out if it was a crime or an enterprise in which they would participate and what the court had said is that the through cases on the method of inducements which create a substantial risk that such an offense would be committed by persons other than those who are ready to commit a crime and i submit to you that there was plenty of evidence to show that that was exactly the case here what we had was a sting a legitimate enterprise pitched republic that we invest types of securities transactions or we fund to type we offered two types of funding whether it's a fund of last resort investing in restricted stock or publicly available securities or lender they do two things they have what they call loosely legitimate clients where they go when they do a lot of due diligence but they're all micro cap companies they go in they do a lot to do diligence for example if you like a drug company with a when they analyze the patents and they do all that work and they have these flyers illegitimate companies now in terms legitimate and illegitimate suspect but if you're looking at the context of what the evidence was he says he's a loser illegitimate deals because he doesn't do any due diligence but these are fliers all they have is transaction thinking it's a legal transaction what he told and the information is carefully layered in each phone call and if you look at the progression of the transcript it's carefully laid when mr henderson first contacted him pranky he testified on cross examination that he didn't tell him the terms were illegal he didn't tell them about the kickback terms what he said was that this is expensive money and he says while when i questioned him about what he discussed is what was illegal that he should known as illegal he said while i was just warming up this wasn't a baseball game we're warming up these are real people's lives it's a real futures and it's a future of companies and they carefully orchestrated and leave the information that they would make available to these targets first it's expensive money but worth three billion dollars hedge fund it painted a fifty percent fee to kick it out to me it's going back and then later on while my fund doesn't know that it's later on my partners don't know he never says i'm ripping off the fund i'm stealing the money from the phone there's never any evidence in this entire case that the farm didn't know if it was being paid using arguably in legal terms to get people to invest but it's the layering of the information over the course of time and the ambiguity in the terms that they use and how they pitch it they targeted a specific kind of individual companies that were down and out executives trying to save the companies and gentlemen like jim frank who survive on investor relations work for these small companies and if they don't get funding he out of business they all know that this is what he does any makes introductions to these companies and he makes every effort to introduce an opportunity and let executives decide whether or not to invest so it is a very structure of the transaction it's the wearing of information directly to the people to get into the investment thinking it's legitimate and then give them enough terms and enough ambiguous terms that these people don't understand that this is clearly  illegal in legal opportunity from the get go you know i can see how a smart lawyer might be able to convince a jury what you just said and so but i can't jury question about it and i keep going back i look at what the government did here and yes i can see how you can put a sinister face on it but to say that it's improper with the degree of clarity always the case if you look at a number of our guide check case in other cases the hook is often dangled out there first with some ambiguity and then more information is supplied as it looks like the person has an interest but and  the investors but what he said is is that i'm not telling my partners i'm receiving the fee not that the fun doesn't know the fees being paid in fact the public records are disclosed in these transactions all show that the  is buying the stock and that the company then wish me invest is only keeping fifty percent of the money that's in the public filings so everything they did to structure this transaction was in big it was and self contradictory we're not going to document any of this because we don't know or we don't want our our partners or the fun to know about the nominee accounts in the money where it's going yet in the file for three billion go ahead fun there's going to be a consulting agreement showing that fifty percent of the money an appeal of a jury's denial of an entrapment claim and so that's how i have proceeded in my brief the question in this case is could the jury reasonably find that no improper interests meant occurred and the answer is yes they had a front row seat to all of the interactions in this case all the videos the audios the e mails they saw every interaction between our undercover agent and these two defendants and they were in a prime position to judge whether or not the our agent's conduct here was improper and they received the arse of the first circuit standard jury pattern instruction on how to determine whether complete whether inducement was improper they found t found in the negative we can assume and that judgment is unassailable on appeal i've not heard anything this morning and alledge izing the government's conduct to any of the categories that this court identified him to get a get drawn decision which are illustrated but there illustrated for a purpose there is no forceful solicitation threats of violence these defendants were not desperate for food desperate to save their child custody or agent did not dress up as a suicidal person and constrict the defendant into this crime our agents offered these defendants the ordinary opportunity to commit a securities transaction as well as the proceeds of death transact in fairness to the defendants there there is a suggestion more than a suggestion look favorably on any investment deal that promised to give him before and that the government exploited that that type of desperation to points in response you i have not found any example in the case law where a desire to help one's business rises to the same level of the vulnerabilities identified in kendra but assume that it does because this is a fact specific inquiry there was not evidence of that mr jordan did not present any evidence that he was operating under this save the company desperation and his conduct and need only after the meeting with the undercover agent would have undermine soon as he received the hedge fund money he diverted it to his personal accounts his personal credit card as well as the accounts of his attorney his and he and his business partner personal accounts the jury could look at that and fairly story when we were using our personal accounts to purchase business items there was no evidence of that the jury was entitled to reject that i think that the defendant's entire claim un proper inducement distills down to the government needs to effectively do a stings you know this is a legal do you know that you are in fact harming this particular investor is that is abundantly clear that what you're doing is fraud and that's just not the way that these cases apparent in the record certainly enough for the jury find at every opportunity every phone call and e mail mr praying sought to expand the stock for kickback deal to dish will companies expand the program beyond its additional moorings and this court has said that desire to expand in engaging you a criminal opportunities defeats an entrapment defense under strict jordan it's important to look at what he did immediately after the meeting we called it our agent did not let him sign the stock subscription agreement at the meeting mr jordan wanted to the agent said no he sent mr jordan back to california three thousand miles away and the comfort of his own home and then mr jordan fills out the stock subscription agreement e mails it to the agent with the notation please sign at your earliest convenience so at power point mr jordan is three thousand miles away from the allegedly improper inducement in this case and still jumps in with eagerness and enthusiasm about defeats his claim of entrapment he did provide stock what was it fo hundred thousand if it's what it seemed to me that you argue to the district court the government argued the district board that it didn't need consider the value of that stock in calculating the amount of the loss because of transaction so our argument to the district court was that this stock was could not be valued and the district courts looking at the record correctly declined the defendant's offer to offset the lawsuit and i can explain why in detail the probation office set recommended a thirty two thousand dollars loss for the sensing guidelines calculation it was then up to the parties to object if that was the wrong  valuation mr jordan and also followed by him mr crane he said no you should value that four hundred thousand shares at a forty five cent range and then deduct accordingly that forty five cent range was the range that unrestricted shares traded on the market in august twentieth levon the district court rejected that valuation and that was correct because there's a new dispute that these shares could not have treated in aug twenty eighth levin at that range the forty five cent range because they were restricted the defendants did not offer up any alternative objection or any other way to value the amount of loss in this case and under rule thirty two the district court ruled on the objection the arguments presented for it was new clear in rejecting the defendant's incorrect valuation and then adopted the probation officers recommendation well but it doesn't restricted it didn't have you and it seems to need through those arguments correct so as i read the transcript i thought the discord it's excepted the second one of the government's argument about that these stocks were  all in light of their restricted nature now that record is silent as to what one needs to do or when those stocks could possibly come become unrestricted witness said that they have no value the august twenty seventh date that the defendants are talking about there was no value because they could not be treated i think it's possible that i don't it's not in the record that i don't know what the vesting condition was on this these restricted shares it's possible that based on whatever condition it was at some point in the future there could have been an argument that these shares had value but that was not presented by the defendant they did not offer up an alternative method evaluation and so the district court took the arguments that it had in front of it and ruled on it and i think on this record there's no clear error in how the district court made his judgement the district court only needs to come up with a reasonable estimate of the amount of l show the evidence of anything that he proposes to be a set off so the amount of loss i think under rule thirty two that's right in that there's a there's a thirty there's the sees me there's the thirty two thousand dollars proposed by the probation and then it's up to the parties if the government thought that that was wrong it would be on our burden to file an objection and say no you should value it higher the defendant wanted to lower they have to come in and explain why it should be lower and the district rules on the evidence and arguments that it had before it so i think the district court here acted quite reasonably and certainly its decision is supported by the factual record that it had in front of it all the while we're talking about the reason why most of the court regards t this court in the seventy's decision said that the act of recruiting constitutes organizing under three one point one and the evidence in this case certainly supports a conclusion bet mr and he was organizing because this entire city good not have occurred had he not brought in the three executives into the scheme pearson jordan and berman and that alone supports the district court's factual conclusion without actually inclusion was at least a manager or supervisor he did not say organizer i think that the district court in reaching that ruling was simply to say i find that this enhanced applies here three b one point one the two one has been applies and recruit recruiting is managing in organizing under several days and that is enough to support the district court's inclusion we think that mr president did a lot more he was essentially the gateway for these executives to the undercover agent  scheme was enough for three d one one but what's troublesome a boat your approach to both a moment of loss leadership enhancement is that you want us to take conclusions but the district court district court didn't make those findings and i'm wondering on both the extent of our authority and the wisdom of a practice that says that when a district court doesn't do wit it's fact finding properly on the record the court of appeal should just go ahead and look at the underlying record and make the fact finding and say well the district court could have done this not the district must this because those cases we've got what the district would have thought this and therefore will say to the extent that the court is concerned that the district court did not make any particular factual findings it remain and then we can go and have a recent thing and ask for factual findings with greater specificity on this in hand on the two level enhanced for organizer leader i think it is quite obvious that the district court necessarily found the factual arguments that i am making because these were the factual disputes that were presented to the court the only factual disputes presented for the court so the court obviously rejected the defendant's arguments sided with the government's view of the record on that one and i think in light of the data points that we have this falls under the line of cases which we can say with fierce certainty that the district court made the conclusion that it was an organizer a leader or  manager for the two points based on the arguments that the government presented i'm happy to address any of the other claims that the defendants have raised they've raised a number of them i feel court has any concerns government which should be in fact controlled and discouraged and stopped the sting operation when ensnared these businessmen who needed this funds were desperate for these funds talked about paying fifty percent in fact some of them were going to go even higher in terms of the financing fees now the government talks about the fact that this was just an ordinary opportunity it wasn't an ordinary opportunity it was a sting operation and what's concerning is the way it was it was described to my client it became very ambiguous about what its real nature was and that was done deliberately for example the government talks about that it clearly was going to fraught it wasn't clearly i can make money this is the agent to my client i can make money then everyone's going to make money so it's if you're comfortable with that like that's what with will do with the consulting agreement that's the kind of language that throughout this interaction i understand that my client had no dealings with him percent my client had no dealings with anybody on the record other than this first meeting on the twenty second that first meeting on the twenty second and this age and by the way he is that the court allowing him to describe what my client thought what he thought and what he meant and i detail that i don't have time to go into that i have detail that in my paper added to  the final verdict of this of the jury and that was not as the government asserts easily rejected that was three days of deliberations or honors with respect to the counsel you're making beyond to me the same of cases where the like ninth circuit had said that they thought there were a lot more risk than there were benefits there was a case in which they had additional charges that had been dismissed in a way were in that same position where you the law and that that should not have been given to the jury you don't have to go that far your honor there should have been a full redaction the actual charges themselves are not the problem these indictments dykeman's as i've indicated are starting to sound like somebodies thesis at that's what they're claiming and to the extent there's a lay witness there is no foundation that there that that code and those terms were ever something agreed by my client again this is not a drug case these financial terms essentially what the government saying we want a mini closing argument after each time the agent talks about what he thought what he said but what he meant was sad and more even more concerning to me what my client thought or meant that's the province of the jury he is a layperson there is no foundation that he had anything to lance with my client beforehand n that you do review for clearer the court found not that he was an organizer here the court found that he managed certain activities of the conspiracy he did not find that he managed any particular experience in the securities industry there was no evidence in a record that mr craig you had a life long experience of the experience and the securities industry in fact he had simply been registered as a security croaker who sold real estate partnerships back during been told was that this was essentially a legitimate enterprise that it was expensive money and that these people would have to speak to the hedge fund manager the undercover agent and learn about the transaction the details of the transaction to make their own decisions