good morning your honour's may please the court my name is polixeni said i along with my co counsel kenneth ravenel represented peter juan in the case before your honor's we're here today because when mr owen was sentenced for his tax evasion offense the district court categorically prohibited mr one from introducing any evidence about his actual civil i r s liability went ahead and the judge heard all the seven and so shortly before th he really hadn't because the way the posture of this case went is in november and your honor can look to the november seventeenth order of the district court the district court said unequivocally i am not hearing any evidence or argument on this point for purposes of thirty five fifty three day that there was some back and forth because in that same order the court specifically said and if you want to raise it i just want you have to move to withdraw so the court and i quote says unless mr one chooses to move to withdraw from the plea he may not argue the actual tax loss which everyone knew to mean the i r s civil liability was highly unpersuasive didn't need and said it was riddled with holes i mean he was he was quite strong in his assessment of it cost money and we would submit your honor that the court made that comment at a hearing not the sentencing at the motion to withdraw stage and that comment according to this court's settled precedent should be given no weight when the court is determining the reasonableness of the sentence and the decision to categorically exclude the evidence in the first instance and we know that from united states versus thomson thompson which is cited in the briefs is very instructive on this point that was a case in which this court was reviewing the reasonableness of an eighteen month supervised release sentence where the court may no findings and the government made the same argument in thomson that they're making to you today the government said well actively engage your honor the he was engaged in the sentencing but but that was a sentencing in which he said we categorically could not argue under thirty five fifty three day any of the actual i r s liability and this was even after mr one in his plea agreement was promised in exchange for giving up those important fundamental constitutional rights he was promised you may argue for and there and sentence under any thirty five fifty three a factor and that would include the seriousness the oftens the nature and beginning the starting point as goal says of the sentencing conversation would be and still on throughout maintained we stand by that for criminal purposes for the guideline purposes but as your honor knows loss in the guidelines is a very elusive concept it's complicated and it can mean different things at different times but in the fall analysis didn't your client get exactly what he bargained for no he bargain judge said he was going to send him at level nineteen in conformity with the police agreement and did so but and is that the sentence and not the guideline range that go that triggers the right of appeal what are you know and we're in good company on this good company on this because even at the guilty plea at the plea colloquy the district court read it that way the district court it mr ones guilty plea when it's the point of no return right mr one is giving up those important constitutional rights based on what he is told his promises are and the district court said at the colloquy quote i draw your attention to paragraph eleven b the appeal waiver that means if i want to sentence you above a level nineteen then you could appeal no abberation no discussion of the government wants to do today and say well that really means thirty to thirty seven months the court advisory should just above ninety he gave he was given above a level nineteen that was the twenty that the for whether and procedurally unreasonable sentence is harmless you look to the sentencing findings that were made at the sentencing hearing and this is what the district court said at j eight ninety eight through nine hundred the court pointed two things that informed him on the sentence that were material to him one was a ten year conviction that mr one had the other was the millions and millions of dollars of income there were not reported to the s and then he goes on and he says the stipulated tax liability is highly significant in this case so putting it all together i thought that the guideline range sentence was appropriate so the procedural error here was not permitting mr one to argue the actual sieve our civil i r s liability that cuts to the heart of whether the stipulated tax liability should be given as much weight as the court gave it here so this is clearly not a case  it's the other way the court highlighted for this court this was really significant to me so i'm going to not let mr one argue any thirty five fifty three factors with respect to the actual liability even though the settled precedent pursue the procedure that's supposed to take place at sentencing is first we determine the guideline and mr once said i stand by that level twenty two i stand by the fact that we're going to start at four years then the court under gall and this court's interpretation of goal says he's supposed to let the defendant make every org human that he wishes to make and of course that would require the factual predicate behind it and then finally the court has to address those arguments here the court cut us off at the pass we couldn't even argue it or bring the evidence at sentencing and then the court said and you know that area over here that i wouldn't let you argue thirty five fifty three matters that's what i'm going to sentence you based on when we take what the court actually said at sentencing and we combined it with this course established precedent which says and i go back to thomson because i do think it's instructive when this court was determining was the sentence procedurally reasonable and i'm asking what judge floyd just asked of me is it harmless the government said well you know where you could look since the district court didn't make any findings at the sentencing look to the district court's findings on release or detention same proceeding courts and all these things about the defendant that seemed material to the sentence and the court said no no no we're not going to look at some other proceeding to inform the sentence in fact the court said it didn't relate to the sentence so we can't consider it on appeal we have the same situation here the one sentence that the government wraps itself in was set at a different proceeding on a different matter with different standards and that can't inform the harmlessness test here because if it does then let's think about what does that set up in the future does that mean that this court's going to be in the business of looking at was senator suppression hearing or a trial or at the detention hearing and so will that inform the sentence when the court said what it said at the withdraw motion the sentence was in before him the arguments hadn't even been made and that's because the court three months before sentencing said we're not permitted to make them i was looking for a case in which this very thing happened and the only two i could find that even come close are kemb and pepper and pepper was most recently decided by the supreme supreme court and the court couldn't have been clearer about what congress has said thirty five fifty three day is not discretionary it's a congressional mandate congress has said the judge at sentencing you must start with the guidelines but then you have to consider all these thirty five fifty three factors and what's noteworthy about pepper is that pepper also read thirty five fifty three in conjunction with thirty six sixty one thirty five fifty three a is what has to be considered and i don't mean to cut you off what if what the defendant wants to do it sentencing regarding thirty five fifty three a day constitutes a retraction of part of his plea agreement you're saying no problem well your honor i think that that's really what happened here he wanted to retract part of his plea agreement least from my viewpoint that's what's happened but we don't when you know you're not yes isn't to agree with that but but assuming that his action in attempting to present this evidence and sentencing was in part a retraction  stipulation made in his plea agreement then how do we then analyze the duty of the court to consider the thirty five fifty three eight factors doesn't that bear on the subject at all i think it bears only and in so far as this the evidence has to be let in the arguments need to be made and that's when the court can determine whether a breach has occurred we would vigorously disagree that a breach occurred in part because the district court never asked what do you mean by the stipulated two point four million dollar loss number the guidelines for tax loss are very different than the guidelines the rules that had the assistance of an accountant before he entered into his plea correct for court then have to put on the green eye shade and start looking into whether this defendant knows what he was stipulated to because the plea agreement as a matter of fact not not that the defendant understands the wall but that he knows that he was  to a fact under correct assumptions because that fact had a certain meaning and it was for criminal guideline purposes only that's what the plea agreement says it says that the two point four million dollars tax loss was for the and it's titled in the plea agreement advisory and factual guidelines to appeal ation so it was read and remove we have to read the plea agreement in favor of the defendant right any ambiguity soaring consistencies must be read against the draft procedural error the court deciding from findings based on the motion to withdraw because the court never let the evidence in those findings weren't made at the sentencing hearing and we don't have any factual footprints like this in any of the cases because the cases that come before your honor the court does what district courts do they let in the evidence they let the defense make the arguments they control the courtroom certainly and say i'm not going to let you you know waste my time with cumulative evidence or put on four witnesses to say the same thing but they let the evidence in and then decide these important issues then how can a tax loss be x about four guidelines purposes but yet why  for thirty five fifty three a purpose a quick example is if you look at the guidelines themselves it says take a certain percentage of the gross revenue and that will be the tax loss unless a more accurate figure can be determined so by the time from the time you get in i'm not saying as the record doesn't really bear out how they came to the two point four million dollars number but i'm giving the court an example so that's a way in which the guidelines for loss give you a rough cut and they do that all the time and the reason why we know this was going to happen in this your honour's is because the plea agreement itself has that separate provision in paragraph fourteen that says you know i for restitution purposes for civil i r s liability purposes we're not using the two point four number we're going to let the defendant execute a closing agreement and whatever that number is will be the restitution number and then the government so it's not the same right because if it were the same then we wouldn't need paragraph fourteen the tax laws for criminal purposes under the guidelines of it's that the plea agreement says to mr juan you're going to have this opportunity to figure out whether the tax liability is different than the criminal liability and if it is you'll be permitted to raise it as a guideline that your gross loss and for the purpose of  so to speak it's another lost net of the doctrines that correct exemptions and different calculus correct but the calculus may be different and if it's mitigating to mr want because the i r s is not going to be out as much money as the criminal got line suggests that's mitigation thank you thank you very much the stipulation the two point four million dollars to be relation was only for guidelines purposes that is simply not true if you look at page fifty of the joint appendix this is the plea agreement and it is in bold face ok last paragraph on that page none of this income was reported to the i r s that's the over eighteen million dollars in income the total tax loss owed to the i r s is approximately two point four million dollars that is in bold print and it is under the statement of facts it is not under the guidelines calculation portion of the plea agreement it is under the statement of facts the stipulation there is i know the i r s at least two point four million dollars if you look at the next page page fifty one of the joint appendix still within the statement of facts not under the guidelines portion of the plea after taking into account additional expenses in two thousand and seven and two thousand and eight and for the purposes of this plea agreement and sentencing the total tax loss is approximately two point four million dollars this is not just a guideline stipulation it is a factual admission that the amount owed to the i r s the actual tax l is two point four million dollars and i should take a step back to your honor's and give the court some perspective of the broader litigation here the appellant i think for his own purposes is just focusing on the sentencing issue in this case but i think it's very important to controversy out of baltimore mr one was an interested party in that case it's a related matter it's in the joint appendix in his pre sentence report i think page nineteen explicitly linking him to that broader conspiracy the government decided not to charge him in that case and of course if it had charged him in that case a twenty million plus dollar conspiracy money laundering interstate transportation of stolen property his guidelines would have been fundamentally higher fundamentally and so the benefit here want if you plead guilty to a criminal tax offense of two point four million dollars we will not charge you in that broader seventeen person conspiracy that's the benefit him in this case he wasn't charged in that massive stolen goods conspiracy and as a result he pled guilty to tax offenses essentially he gets that benefit he pleads under oath my last two point four million dollars and by the way as you observe earlier he had a c before he pled guilty the tax loss was disputed before he pled very experienced counsel bruce marcus highly regarded defense lawyer in maryland he had a c p a working with him they said look the tax loss is less than two point four we disagree with the amount and the government said look if you don't agree let's go to trial all right and we'll charge you with everything else and won't let the jury resolve this mr one made a strategic decision the government is right they had my records they have my computer i've got my c p a obviously no one believes him i'm going to stipulate to the two point four million dollar figure that's a benefit to him and we've pointed out in our briefing why even two point four is a benefit if it had been over two point five he would have had a fundamentally higher guideline calculation because that's where the the cutoff is in the guidelines so he had extraordinarily effective advocacy from mr ravenel who was here today in negotiating that plea there were substantial benefits of this defending gained but the the game was the understanding was he will pay two point four million in restitution now fast forward he strategically delays his sentencing and that's not just me seeing it saying it your honour's judge away made a specific factual finding highly experienced district judge over twenty years on the bench very very carefully analyzed this case and he said specifically this delay is strategic it is disingenuous now the court is well aware of judge legs findings here frankly forcefully rejecting what the defendant was doing finding it to be completely inappropriate showing up essentially strategically delaying his sentencing for over a year until all of the farmgate all of the baltimore conspiracy case was over he waited over a year and then he moved to wit and then he challenges the tax loss ten days before sentencing he says you know what it's not two point four million it's forty thousand dollars and the reason he did that your honour's is because that was the restitution or him out he only wants to pay forty thousand dollars to the i r s and this is his way of trying to essentially judge keenan as you mentioned before so certainly rewrite his plea he's already gotten rid of all the i t s p money laundering charges he wasn't charged in the stall case he has waited until all of those cases are finished and now he strategically tries to cut down his tax loss to just forty thousand dollars and the government would not stand for that and it will not stand for that and so we opposed  we said we will not allow a defendant self serving lee to show up ten days before sentencing after he himself is strategically delayed that sentencing and say that the factual stipulation is wrong imagine your honour's what sentencing proceedings would turn into if a defendant can self serving way show up retain all of the benefits of his plea agreement and then show up in sentencing and say you know what it's not ten million dollars like i stipulated in my plea it's five thousand dollars it's ten thousand dollars imagine h disruptive that would be for a district court's docket every sentencing proceeding would turn into a mini trial over mr barsky is analysis which this court the district court found to be specifically riddled with holes and incompletion so finding error here of procedural reasonable procedural error here would frankly be catastrophic for the sentencing regime every defendant at least every defendant like mr one who is blatantly guilty of tax offenses has no incentive to go to trial put his hands up plead guilty and then with all that money that he save by not paying the i r s will hire c p a s and expensive lawyers who will come in and say you know what folks the loss isn't two point four million it's not ten million it's fifty dollars and the sentencing proceeding is going to turn into a into a huge mess where essentially we're litigating issues that we thought we had resolved right that's the whole point of a plea agreement the emphasis of finalmente of speed of resolving cases and to find for the defendant in this case is a recipe for the exact opposite to draw out litigation like this defendant did over a year between his guilty plea and his sentencing by his own actions the incredible cost here the government i think nine hundred pages in the joint appendix all of that is after the guilty plea right all of that litigation is after the guilty plea when one presumes the litigation had been final when it was over it is a tremendous burden on the government it is a tremendous burden on the course to have district courts having to deal with these kinds of last minute issues that or disingenuous not my words judge leg that motion to withdraw hearing was five minutes before the sentencing over five hours that day judge leg heard a marathon argument very patiently listened to both sides weighed pros and cons and forcefully rejected the motion yes your honor i think i hear the point although i would respectfully even disagree on that you think it's a distinction without a correct certainly on the facts of this case it here's why when a defendant stipulates to a plea in this is the legal issue putting aside the facts of this particular case when a defendant stipulates to a factual issue in his plea there are benefits to him for doing that and there are reasons to accord that stipulation finale the defendant if he disagrees with a particular statement if he things that you know what i made a huge mistake here his remedy is to move to withdraw and there is a long line of precedent in this court in the supreme court about how you have to actually withdraw from a guilty plea if you don't if you think you made a mistake rule eleven has procedures for that united states against more which is the warm settled precedent from this court is a six factor test that a defendant has to qualify if he wants to withdraw so there's finale when it comes to guilty pleas that's a fundamental precept of the criminal justice system there has to be finale and so when a defendant says i made a mistake there are procedures for him to follow and that procedure is not to self serving lee hold back on one aspect of the plea but derive all the benefits that he's he's otherwise gained remedy is to move to withdraw and simply because he moves to withdraw doesn't mean he's he's awarded relief of course he has to qualify under the six point test which judge white i thought very carefully went through in this case  in on that score one of the factors intense your question is a demonstration of actual innocence or incredible innocence that's where judge judge legge made his finding in other words judge led would have released this defendant from his plea if indeed the forty thousand dollar tax analysis was persuasive right so judge legge did consider the tax loss now if there was a serious question all right that's right that's what he would have been obligated to analysis is i think your lodestar if you can qualify under each of those factors number one i know the right factors i just didn't know if there was a concise standard that we've articulated other than it would be more  d your honor it you know there is sort of a broader economic principle here and i should say you know the government has very little interest in it if indeed the tax laws here was fifty dollars you know i don't think we would in good faith be standing here and saying no he is stuck to the two point four million dollar figure i could see the parties being able to work something out coming back to the court and saying you know what the p s r is wrong there are issues here with the tax laws i could see that in sort of practical terms but we vigorously contest the tax laws in this case for the reasons again you don't have to take my word for it you can take judge leg specific factual finding which of course the defense makes no reference to in his briefing it's dar obligation to bring it to the court's attention but that's important because it's part of the broader story of this litigation i think it's so important to think about what this withdrawal litigation what this tax loss litigation represented within the broader sweep of this of this case the real benefit here to this defendant was this criminal plea that was a victory for him not being charge with those other sixteen seventeen defendants he then strategically delays his sentencing again not not my words judge leg specific finding of disingenuousness strategic behavior sort of thing that just records simply will not stand in the government had to vigorously respond and we did and we will certainly do our jobs when it when it comes time to do that like nothing your honor one last point judge can and we haven't talked about appellate waiver issue i'm happy to address that if the court has any questions the only point your honor i do think the substance here is important and so certainly we could we could see an opinion where the court chooses not to really resolve the appellate waiver issue and gets to the substance but if you look at just focusing on the appellate waiver if you look at the actual language here the emphasis is on waiver from a sentencing range right that is essentially let me just read the language it's  page fifty two of the joint appendix paragraph eleven be relevant portion the defendant reserves the right to appeal from any sentence above the advisory guidelines range resulting from an of the level nineteen in the criminal history which consist of what most u s attorneys offices are offices not take a position on a defendant's criminal history at the time of his plea because anything could happen you know there might be things we don't know about that turn up at sentencing so the point is it's he's waving any any the ability to appeal any sentence within a range it's not the it's not tied to the calculation of the offense level there's nothing about that in this  waiving your right to appeal from a range and that range in this case is what's linked to a level nineteen which is thirty to thirty seven months or so and i should also say and i guess i don't want to take up a course time but there's a reason why we ended up with a level twenty in this case the government withheld a third point of acceptance because of the defendant strategic behavior i mean that's not there's no dispute about that if all of this stuff had happened between the year between the guilty plea in the sentencing we would have had a level nineteen so defendant certainly shouldn't be rewarded for engaging in the act in the kind of conduct that mr want to engage in here or his representatives at least what they did again judge leg specific finding was strategic it was  completely inappropriate and the government again is simply not going to stand back and let that happen we withheld the third point of acceptance because that's what we were entitled to do but by doing that certainly a defendant shouldn't gain the right to be in this court right if mr  had been sentenced to thirty months in prison and if he had been a little nineteen in other words of the government had moved for the third point of acceptance he wouldn't have he wouldn't be here today right he wouldn't have an appt by engaging  essentially earned the right to take up this court's time and all the briefing that took place in this case that we simply the government simply cannot stand back and let that happen so we would again in valuating the appellate waiver in this in this case your honour's we would respect y submit to the court that you should think about the practical import of what a ruling for the defendant on the appellate waiver issue would would hold defendants can then essentially withdraw from their guilty pleas challenge the factual stipulations come up with  tax loss analysis that are riddled with holes and incompletions ten days before sentencing and somehow earned the right to be before this court it's not a use for you or use of the government's resources is not a useful use of the district court's resources certainly not a useful use government agreed to and endorsed and most importantly this is i don't know that that really helps us here that's fine your honor then i'll move on with respect to the government likes to talk about the negotiations that happened before the plea was entered that's so highly instructive your honor because the government was on notice when they drafted this agreement that the defense did have problems with a lawsuit now and in fact the stipulated tax loss has the qualification in it for criminal guideline purposes because it's under factual and advi guidelines stipulation as part of the plea agreement and it notes that this loss deals only with the expenses of two thousand and seven and two thousand and eight yet mr one pled guilty to five years of tax offenses right so by the way the plea agreements plain language there are going to be potentially other expenses that would be part of the civil laws and that's where paragraph fourteen comes in the midst will figure out his civil iris liability and then the government standing here today saying that we had all these negotiations then drafts this agreement and allows mr juan in the agreement to make thirty five fifty three arguments and bring up as we see in paragraph eight all evidence concerning background character and conduct of the defendant so the government as the drafter of the agreement likes to talk about all the concessions it made but how about the benefits it got in exchange for the promises that it may roll eleven call it quick i haven't heard well there wasn't an our opinion because at the rule eleven colloquy mr ravenel made clear for the court that we would be raising we're going to do a civil closing agreement with the i r s and that number is going to be the restitution number it came up in the context of the court asking it is ambiguous it is clear as mud that that clause we would read in favor of the defendant because that's what the clearly established jurisprudence says we do in the context of a plea agreement this is not just a mere contract it's contract plus it's when a defendant gives up those fundamental constitutional rights so when we're having a good faith debate as to what those words mean it is by definition ambiguous and i want to raise one other point and it wasn't very artfully raised so i apologize for that but in every case that both sides cite blick but no this court most recently decided this in lewis when the government below is actually arguing and the government did this in contravention of the plea agreement because remember the government well before the that i'm not going to hear civil liability for thirty five fifty eight purposes the government agreed with that so we would argue it's the government that breach this agreement the government did not stand behind its mamma says in this agreement and they can't then have the benefit of keeping us to the appeal waiver that's what blake says that's what both says that's an independent reason that this court should look very carefully at this appeal waiver because if the government did not honor its end of the bargain which did not because mr juan gave up his right to go to trial you know the government wants to make very little of that but what mr won save them was a lengthy trial it's the government's characterization that they would have won perhaps they would have that's why  r one made a good decision for himself but he saved them a lengthy trial it's save them a guideline dispute and what this is really about the district court is will let the evidence in the huge mass mr wrong talking about is what happened because the court in november three months before sentencing said i'm not going to let it in and that is so unprecedented that at sentencing a defendant on thirty five fifty three day with a congregational mandate is the court  must consider this evidence it was unprecedented to hear that we couldn't so that's where the mess and sued we wasted a lot of trees and a lot of hours talking about whether we should let the evidence in instead of just at sentencing let the evidence say we're not going to hear any more from those witnesses i've heard enough not i'm not going to hear it at all but i've heard enough and then make the thirty five fifty three a determination had the court on that