the declaration on the utah county assessor we hired an m a i appraiser to a crazy value of a two san diego farm parcels when we got to the sentencing hearing and began to go through the values of each of the assets that arguably where the subject of the conviction of concealing assets in bankruptcy the court said i don't have to get into those values because the measure of loss that i'm applying here is not actual los intended loss and if it's intended loss i don't have to get into the actual values of the court erred prejudicially erred in two respects there first of all intended loss was the wrong measure of damage if the wrong measure of loss it should then actual loss and secondly whether you're looking at intended loss or an actual loss the case law is clear that you have to value the assets that the defendant's been convicted of concealing let me ask you that my understand that argument but what ninth circuit authority supports your argument that the intended law should be limited to the value of assets concealed or the value of the debtors liabilities which ever using intended losses the measure and secondly and not calculating the value of individual assets intended loss would be the proper measure in the following scenario assume that the de owes five hundred thousand dollars in schedule five hundred thousand dollars on the bankruptcy titian it doesn't disclose that you know she put one hundred thousand dollars in a coffee can and very did in her backyard if the hundred thousand dollars is discovered before the bankruptcy proceedings are complete and the creditors in the court learn of those funds and factor them into whether to dismiss the case or to apply them to the debts then there would be no l there would be no actual loss and so you would look at intended loss and so for example in wheeled in that there were assets that were not scheduled in the original bankruptcy edition but they came to the attention of the bankruptcy court later and so the court  intended losses the measure rather than actual costs but what if the assets that are hidden would make the difference in terms of whether the person would be eligible for bankruptcy i'm not sure he didn't give us enough numbers on your five hundred thousand and one hundred thousand dollars in the can but in this case as i understand it if we take the two point three million dollars and add that to the disclosed assets presumpti discussions i think that there could be an argument made that be i think when we had a lower court yes and if you were saying well do you want me to go through the numbers or something and the judge said well they're in the  or something along those lines i don't know that the court did not say they were in p s or the court said quite clearly and we've visited probably six different times in our brief that if i use intended loss i don't have to get into the values and again we requested an denture rehearing the court in response to the request and will determine later whether it's necessary and the court never got into that in the assets and there is no way whatsoever that the court could ever reach a number anywhere near two point four million dollars the numbers in the p s are you know as it sets forth in the p s r that the numbers are taken from a trial memorandum provided to the probation officer by the government and we challenge tho counted one the conspiracy to conceal assets is very specific in identifying assets you know in some banks see concealment cases you will see that the prosecution asked the grand jury to charge in the grand jury charges that the defendant concealed assets including but not limited to the following or the following among others that's not what the indictment here says it says that the defendant concealed three specific a s interests in two medical management corporations and equity in a condominium in utah those are the only three assets with regard to those three assets talking l bank account was subject unpaid taxes because that was the subject of four counts fourteen fifteen and sixteen of the indictment not against my client but against her husband and it's undisputed that if those funds would have been made available in the bankruptcy courts not only with the taxes first that had to be subtracted but also in any distribution to the bankruptcy estate would also have been subject to taxes that's undisputed based on the testimony of the courts of the government's bankruptcy expert mr albert and it's also one disputed because in count seventeen of the indictment they're discussing what happens after distribution of the funds from the bank accounts and saying the taxes were  and we perform the calculation it's in the record below and it's never been disputed by the government that after application of all the taxes and penalties and interest that apply to the nine hundred fifty five thousand dollars you end up with eighty five thousand dollars two separate distinct issues there they absolutely have to keep focused on the two of them separately right it's helpful if when we're talking about this we talk about either restitution or sits right yes go to say it's a right that's what i'm concealing three assets making false statements in a bankruptcy and i forget that's also it's ok now well well but the conspiracy big conspiracy was was to conceal assets to conceal that is that you literally look at what she was convicted of this conspiracy it's open ended to conceal assets and and then we're not are we found in just to just look at these things that have been a numerated so far already a look at the purpose of this conspiracy and then see that she has a couple million dollars or more in debts that she succeeded in getting discharged and if you look at the in the end the purpose and the scope of this conspiracy it wasn't to get part of the debts just charge it was to get him all this time right ok but now ok two different intense analyses there one is was their intent to commit the crime and the jury found the specific intent to commit a crime when you're looking at intent or whether you're looking at actual with respect to lo the cases are uniform that you have to value the assets and so you have to identify specific assets and as the panel knows we have focused on the three specific assets but even if we counted the additional quote assets that the government has presented in its briefs in the trial quarter here you still end up with a number that is under a million dollars well i'll get back to that  and secondly if you look at what the government represented to the court at the time the coconspirator jeffrey sherman was sentenced mr sherman is the former i r s lawyer who handled the taxes he's the one who filed the all the documents and it has court proceeding he's the one who prepare the bankruptcy petition which is the subject of all of the offenses that my client was convicted of and he is the one who exchanged correspondence with beaudry who he brought into this case saying we've got another one you know he's right in the middle of everything and the government said to the court the sense you know that the last attributable to the conspiracy in this case to count one and to count twelve which is the tax evasion charge is three hundred fifty three thousand dollars frankly i think three hundred fifty three thousand is too much that's the upper  limit the government can't come in and say to the district court judge this conspiracy and volved a loss of three hundred fifty three thousand dollars on one day and then on another day say forget everything we said before it's a different number two other things i want to call wrong but at some point along the line the district court either initially or on remains adopted the priest and three initially in ruling on the objections the court overruled our objections and s it's not minute order there's the court's tentative excuse me where the court does that and then i walk through as the panel can see from reviewing the transcript i walked through all of the assets and we had requested an evidentiary hearing and the  we don't have to get into any of that because i'm using intended loss now the other thing that i that i want you to comment on and i appreciate you taking some of your time and somebody talking about a million dollars that came from someplace that wound up in a swiss bank account where did that come from and where did it ever go after it got to switzerland the government is talking about that in its brief right and there was substantial testimony on that subject in the trial and that relates to count seventeen which involves a distributed the funds were withdrawn from the sand what anchor count in one nine hundred ninety six and then you sell and mr both agree are involved according to the evidence in moving the funds around my client was acquitted  charge number one and number two those are events in one thousand nine hundred sixty and subsequent and what we're talking about is a conspiracy that ended according to the indictment in one thousand nine hundred five so it has nothing to do one whatsoever with the sentencing in conspiracy which is the crime of which my client was convicted it is not an overt act it's not anything as part of the conspiracy let me ask you if the if the conspiracy of which he was convicted as described in this indictment is broad enough to include the million dollars that they may have jockeyed around after the conspiracy according to the firm for the indictment the polls that show that the court down from considering the million dollars is essentially the nine hundred fifty five thousand dollars so it's the same amount of money but you still have to look at in calculating the actual loss and this really is an actual loss case because nobody discovered the funds during the bankruptcy you have to look at the whole we are the creditors would have been if this at all then disclosed and because of the tax liabilities that when rates were cited for the tax liability that only goes to the amount but i take it that you your position is that whatever happened to that money or wherever it came from and whatever became of it it's off the on that matter like to start with the question of the million dollars and whether that could fairly be considered and what happened to it you connection with determining defendant's this defendant's relevant conduct the million dollars was the evidence the trial so the million dollars or sensually can steal profits from defendants dermatology practice where she agreed to set up a so called medical management company the officer with defendant your husband provided that the medical management company among other assets would be set up so that no creditors would understand that those were defendants assets and so they would be in a position to appear upon the following the bankruptcy as if they had did not have a million dollars in a non interest bearing bank account of which the signatories were two friends of the defendants who also testified at trial they had no knowledge that they were on the signature hundred six in february i believe it's moved to an entity called global capital and reprises and thereafter it makes its way across it goes to the cayman islands and then it goes ends up in switzerland in a bank account called syntax i'd also like to the whole stoeckel valuation that was the first presented by the defendant was based on the false premise that somehow you get to subtract costs that are incurred that would have been it occurred in the event defendant acted lawfully that the bankruptcy trustee might have incurred by having to pay taxes well the fact of the matter is it's charged in the indictment the bankruptcy trustee was one of the victims of the crime and so the bankrupt if we're just if we're doing this sort of alternative scenario pursuant to which what would have happened had the defendant acted lawfully we would submit had the defendant act of lawfully she would have been eligible for a discharge  feldman what the district court was doing with regard to intended last was with considering the gross value of assets conceal of which there was ample evidence that was the million dollars in the bank account there was five hundred thousand dollars of equity in the  ski condominium and park city utah there was evidence submitted by an appraiser testified at trial that he didn't appraisal in july of one thousand nine hundred five compared three properties the value of that property was eight hundred thousand the only real loan on that property was three hundred twelve thousand so there was five hundred thousand in the in the ski condo that so you're up to one point five million there was a san diego farm fifty acre parcel there was evidence that made it a trial that the value of that was between a million and a million and a half there was one point three million dollars in disability income that was not disclosed in the statement of financial affairs now that's an example asset but under feltman the court in determining intended even if you're not charged with a conspiracy it's part of a common course of conduct that can be considered by the court but we also argue that there was with her at this trial there was that if the codefendant was tarz i believe in  nine he stated that he knew we had he said there were no additional substantial assets other than those referenced on the petition and that event made a request for the bill of particulars i think in january of two thousand and one and we enumerated in two different like eighty five thousand dollars right now you're getting into the multimillions here yes let's talk about for this to that argument and i'm trying to find out what i'm talking about you or i for a preset they're talking about the first of all the gross value of the assets which i think would be appropriate to consider and evaluating intended lost the growth of the charge that sets are as follows first the million dollars in the b b l bank account second the five hundred thousand in equity in th condominium third one point three million dollars in disability insurance proceeds that were received in the twenty six months prior to banks roxy and work in steel because of the statement of financial affairs that the defendant her husband disclosed that they received three hundred thousand dollars in disability insurance proceeds in fact they had received one point six million so if you now that arguably that's an example asset but we would submit the court can consider of the receipt of that large amount of cash income in conjunction with the concealment of a hidden bank account with a million dollars in it in conjunction with the concealment of five hundred thousand dollars in equity in a ski condominium and and also particulars include the sandiego farm the syntax bank account international trading partners which was set up to conceal the disability income and the palm springs condominium and magnum industries which was also a laundry business that was set up and supposedly owned under the t v victor irrevocable trust if you consider all those assets were actually listed on a chart which was government exhibit nine o six and if you look at the state of the formation of most of the corporations on that chart it coincides with the time in the conspiracy where they started concealing assets in anticipation of bankruptcy that was may or june of one thousand nine hundred two of all those corporations were conceal and this court instructed the court to follow feldman in calculating the restitution the court's supposed to figure out what would have happened and to the victims had the defendant acted lawfully and we would submit under two different scenarios had the defendant acted lawfully she would not the district court decided on this basis on that's the basis on which we're defending the actual losses the amount of debt actually this taurus which i believe was in the neighborhood of two point two nine million even setting aside on the whole the alternate scenario you have to look at what would have happened at the time she filed for bankruptcy she would have to disclose that she owned an interest in a medical management company with a million dollars in the bank and the nominal at the assets and determine you know whether the assets were equal to the debts or less than the debts and ordered restitution on that basis or you can find that had a lawful and lawful disclosure been that made the defendant would not have been point three is the amount of actually discharged at what the court is fine is the court's determination that that's the appropriate amount of restitution is based on the premise that the defendant is frank was not eligible for bankruptcy a reasonable trustee would not a defined that to come to that conclusion how do i know what numbers the court use i think the court took into account all the facts that were presented to it namely that had a truthful disclosure full and truthful disclosure been made at the time of the bankruptcy and if then it would not have been eligible for bankruptcy so if that applied finding or press finding with respect to or nine or whatever that was in the p s r and then come back with that they had if you add that to what they did disclose that that was so they actually had enough money to pay their debts they would have been eligible for bankruptcy and so the amount of restitution is  apparent based on what the defendant was convicted of that a full and honest disclosure would have the supposed nine hundred forty nine thousand in a bank account held in somebody else's name and the defendant would have to explain that the defendant would have to explain that there was another company international trading partners in which all this disability income had been set and if the presumption is and we are going as an alternative ground that the bankruptcy trustee also could have referred the matter to  the bankruptcy court and a reasonable judge would have dismissed this case for substantial abuse we also assuming that the two point three is accurate shouldn't that be offset by the amount of the to someone who was already recovered well that they have not recovered they have ceased some assets of the defendant they put a lien on assets the defendant went to tax court and it was that was converted now when that's done should that be credited against  dollars if i'm not correct that was this charge from the i r s is debts and that would be credit in the normal way that that would occur it would reduce the two point three and yes you and defendants are generally speaking in cases like this defendants come back to district court and they say we should get credit for that sound and pay well i think the press terms of the restitution order is already now i want to get well first of all i don't hear you very responsive to the precise questions that have been  let the exact impact some issues as the paragraphs forty forty eight yes and you did that before the first to feel direct has that adoption of that pre sentence report or whatever the court did look for the prior appeal levy as a question now these deeds or whatever they were i guess there were deeds trusts or something that were deposited with the clerk that's correct to somehow stay the execution of restitution during the pendency of the other that's that was the term when that appeal was over and the mandate came down there was no order of restitution for that interim period right that's correct and the court was asked during that time discharge this or return and the court said no i'm not going to do that because i'm going to order restitution and you might appeal to the defendant so i'm going to hold on to that how does the court get to do that when you know what happened was the defendant brought a motion of brought a motion to reconvince of the trustee there was a hearing on november twenty first two thousand and five just not actually the court i'm going to defer ruling on that i would take that under that the question is if that was incorrect decision by the court whether there was any prejudice or any harm to the defendant by that and at the november hearing the judge asked about that and the defendant stated that the form was that that property was subject to an above market mortgage and the court said if that's the case we will reconvene it for the purpose of refinancing i would looks things openly on a motion to do that and that is certainly true your honor but then the next question has to be if there was error was it harmless and i would propose to the court that it was harmless in the sense that the defendant was offered express only the opportunity to have the deed bank accounts after they would have been applied to creditors or the court made absolutely no finding as to any value on remained of the court disregarded i'm sure unintentionally that did not follow the mandate of this court settlement is very clear that you have to go and find out what would have happened if the defendant had acted lawfully from day one in effect what you have to do here is prepare a new bankruptcy schedule and say what shows up on the asset side which is up on the liability side and we are we and the argument that the government made just now and made below was well if this defendant was concealing stuff that's not what feldman tells us that's not what the ninth circuit said last time around it's assumed that she acted lawfully in the same argument that the government just made here and that they made below was made by feldman if the court reviews once again the thousand opinion the government and government said you should operate under the assumption that the bankruptcy court because of the principle of deterrence but we're not talking about deterrence we're not talking about bankruptcy court proceedings we're talking about restitution to victims of crime and when we're talking about restitution you look at it from the analysis of how much worse off is the victim than the victim would have been if the defendant had acted lawfully at all times and you cannot make that determination unless you go and you value all of the assets that were not disclosed on the bankruptcy petition and those are that are subject to exemptions in the case of the disability benefits those are the assets that are subject to capital gains taxes with respect to the utah condominium that's not just the three hundred thousand dollar mortgage but it's also kind of  capital gains taxes that would been applied before a creditor would receive any money we can't look at that income stream or purpose of the risk and what you heard the government argue that you could in terms of the global aspect the sentencing right i heard the government argue that the government is incorrect again first of all you have to look at actual loss and the only way you get after the loss is deceit how much worse off the creditors are than they would have been if everything had been properly disclosed in terms if you apply intended laws and i with my coffee can now he showed you why we're not talking about intended last but to use intended last you have to look at what the defendant understood that these assets were worth mr stern referred to the san diego properties and what was present to the trial nothing was presented concerning any value of the san diego properties at trial my client wasn't asked a single question in several days of testimony about the san diego properties and of course the san diego properties are nowhere in the indictment you know this testimony about swiss bank accounts and opened by my client well number one not only was she acquitted of that but the testimony was i don't know whether or busso knew about the bank account i know her husband knew about it that's the testimony on the trustee question your honor is absolutely correct it is automatic under the california automatically it was never be conveyed on a thank you counsel your time as if the case just argued will be submitted for decision