insurance companies the suggestion that mr r t could be guilty of joining the scheme while at the same time avoiding learning the purpose or object of the scheme should not be sanctioned by this court as to this fraud the government proved that most  general knowledge about so called credit mewling and it showed that some of the defendants particularly mr patel were actively involved in such fraud it did not show that mr archie knowingly participated in the scheme as the fifth circuit as explained in fuchs the government may not prove a conspiracy merely by presenting evidence placing the defendant in the climate of that timothy that reeks of something facile and as this court held in jenkins we cannot assume guilt solely through the close association of the parties but wasn't there testimony from at least some of the alleged coconspirators about some of the very specific discussions they had with mr orci there were your honor i'll point the court to  coconspirators the one the first one i'll call handy had a long last name his first name was handy and he testified and he was asked did mr archie recruit people and he testified yes and when they followed up on that to say what does that mean he said mr archie would say things like if you know anybody who wants to sell phones bring them here and i'll give them my business card there was no evidence that he was recruiting people or encouraging them to commit credit fraud or credit mewling when they asked mr hand and did mr archie ever ask you about the phones or where you got the phones he said no he did not and i didn't tell him where i got the phones another coconspirator mr patel testified he testified that he was in a conspiracy with another person named chris overstreet trained defendant in this for all that's right he well your honor he testified that he trained defendant in how to operate the cell phone store and how to buy and purchased cellphones and that when he initially started mr floria that he encourage people to commit credit mewling but he only did that for a limited time before he met mr archie and then after consulting with lawyers he learned that he should not be involved in the credit mewling or encouraging people to credit kneeling and he testified that they specifically discouraged employees from doing that type of thing so the problem in this case is the government's money but his testimony after they searched ace ace closed and archie  agreed to go back into business and figure out how they could go back into business and protect themselves by ignorance of where the cell phones came from well your honor he testified that they both went back into the business of buying cell phones and that he understood that if he wasn't involved in the credit mewling that he wouldn't be in the conspiracy your honor and i understand that the inference the court wants to make is that then they went in and said we're going to participate in this credit mealing but we're going to act like we don't know about it the problem is the intent that is charged here by the government in this case is the committee the intent to commit the fraud on the wireless carriers so there's no evidence that mr archie agreed to join into that scheme to commit fraud on the wireless carriers now the case is that the government has sided about if you're a repeat purchaser of goods then it must show that you intend to join in the scheme all of those cases are about the intent to possess or be in recess stolen property or drugs the issue here is the government's trying to stretch that out to say if you repeatedly by stolen property we can extend that to say you must have the intent to commit the fraud that is what achieves that property but it is if it's obvious to you that the property is stone why your honor i think the problem here is the government decided to charge this as a fraud case not as a receipt of stolen property case and i agree that there may have been some stuff going on at these businesses where people should have known the property was obtained through fraud or stolen property but the idea that just knowing that means that you have the intent to commit fraud so you end up with a menu you know you are receiving stolen property and notwithstanding knowing that you here on our end there was testimony from sprint that some of the phones that were showed up at westside wireless are ace wholesale were phones that they thought had never even left their warehouse which shows that they were stolen from and so the problem here is the government has said the only thing we've charged is your intent to commit fraud on these kids on these carriers and so the fact that you received phones in your store has to show that you joined in the conspiracy to commit that fraud and i think it's stretching the evidence in this case too far even the co defendants when they were asked about this mr patel was asked did you discuss pricing with mr archie and he said yes i discussed general pricing with mr archie and then he said quote but there was nothing you know where i was told to go get tony never asked me to get stolen phones or fraudulent phones and that's at page one eighty seven then and want i'm sorry one seventy seven one eighty six of his testimony so the two strongest people who were supposed to be able to show that mr archie was involved in  evidence is necessary to support the conspiracy conviction and if that's your suggestion i'm not sure that you're correct and i don't suggest your honor i understand that the jury was instructed in this case on deliberate ignorance or deliberate indifference but i think the problem is that we're conflating the knowledge joining into the scheme the scheme to defraud and the knowledge of what the object of the conspiracy well it's a new one for the object when the goes on so long it's such great quantities you start transport of stolen or fraudulent we obtain property he did not plead guilty to conspiracy to commit fraud on these wireless carriers and i think the reason for that is it's a bridge too far in this case the idea is if there's repeated volume yeah you can show maybe this person knew he was trafficking in these stolen items or project island items i didn't have to say we can extend that out and say nope he must have meant to achieve the fraud on the wireless carriers i think pushes it and but that's what the government the government chose to charge it as a fraud conspiracy they chose to present the witnesses that they did that said we never talked about this with tony he never asked us to bring fraudulent phones he never asked us to bring stolen phones and so i think the problem is the government chose to plead it one way they've now conceded that this is so called the financing case where he was buying and selling the stolen property but there's no evidence that he had the actual intent to join a conspiracy specifically carriers and that you could get a number if you use to get a family and a corporation could get even more you could get up to five for a family or something like that i'm a corporation could get even more than that  to commit credit mewling or that it existed in the world but there's no evidence in this case that he participated in the cases cited by the government when you're talking about neuron ho or and navarro or deaths that the government cites those people actively participated in the deceit or the misrepresentations you good morning a minute please the court smear caution for the united states your honor as i think that this case and the arguments have been raised here today show that there's only one issue that defense is challenging which is whether this defendant knew that he was involved in a scheme to defraud i think that's true for our oral argument purposes but every issue in the brief is preserved that that's correct your honor and if your honor has questions about other issues i'm happy to address those if you would like to ask questions about other matters here today the issue that the raises that knowledge question and i think the the evidence that was presented at trial was substantial and i think i think that the portrayal of the evidence here has not been complete we have to start with first of all that the defendant testified walt taking one step back the premise that circumstantial evidence is crucial for showing knowledge is one that the eleventh circuit has abided by for a long period of time it's hard to find direct evidence of knowledge because it's hard to see what's inside someone's mind so circumstantial evidence is what juries typically look at what the government usually present as evidence to show intent and knowledge and in this case this defendant tony archie he testified and that testimony went very poorly for him in the jury did not believe his testimony and during that testimony the defendant repeatedly professed to a lack of knowledge and that was disbelieved and in the transcript at document eighty three on page one fifteen one twenty three one fifty seven one ninety four one ninety nine two thirty one page after page of the transcript you will see instances where the defendant says things like on page eighty seven he says i never ever thought the phones were stolen and the jury did not believe that because they convicted him for obtaining stolen phones the defendant said well that's not what they convicted him of that i wasn't to charge the charges not receipt of stolen property the stolen property is part of the intrinsic fraud but that's not the charge the charges of conspiracy to commit a certain type of fraud that's correct your honor and the  conspiracy charge discusses painting through wire fraud stolen and fraudulently obtained phones and while perhaps there's some there there could be some wiggle room there but there are some there are some other instances where the defendant says that for example he he says in response to the question did you buy any phones that you believe are new to be procured by any sort of fraud this is on page one twenty nine of document one eighty three during his testimony he says no sir and that also was disbelieved by the jury because they convicted him and to take one step back your honor to that question of stolen property versus wire fraud and wire fraud conspiracy defense counsel a suggested that the government somehow made a mistake by not charging a stolen property charge here and that is not true because the same issue that the defense has raised here today that knowledge question would still be the same issue that we would be discussing today had we charged a stolen property charge in this case we would still be asking whether there was sufficient evidence to show that this defendant had obtained stolen and fraudulently obtained phones now aside from the defendant's testimony which in addition to being disbelieved by the jury based on the conviction and the defendant was impeached several times during his testimony as well but aside from that there was substantial circumstantial evidence of actual knowledge by this defendant and when i used the phrase actual knowledge i'm drawing a distinction between actual knowledge and deliberate ignorance ignorance and in this case the testimony came out the did the defendant managed is wholesale and was the primary contact for the individual from michigan jason floria there were phone records and testimony that showed  honor there was testimony from both head teacher to a giant and true sharp patel coconspirators and testimony from jason floria describing the manner in which individuals could obtain cell phones through two year subscription contracts where they would be able to get a discounted or free telephone or cellular phone they told them how to do it somebody there people did learn how to do it and i think the testimony at trial at least jason florio testimony explained how scheme he did tell people how to obtain multiple phones through entering into numerous family contracts but then after a short period of time he no longer had to tell people because it became contagious is what he said and people just knew that this was something that could be done in order to obtain cellular phones and your honor i also think that there's there is also there was evidence of alfredo kaposi having committed wire fraud in obtaining carry out that contract and there was also testimony from the cellular providers on that matter but there was another type of fraud that was being conducted as well the assuring in cell phone insurance fraud through which individuals would obtain a cell phone get cell phone is insurance for that phone and then turn around and report the phone having been damaged by water damage this is the scheme that alfredo kaposi and the defendant engaged in to obtain phones through insurance fraud they they were able to report the phone was damaged and then a new phone gets shipped out and there was testimony from the insurance company about how the new phone when there's a damage report the new phone gets shipped out before the old supposedly damaged phone has to be returned back to the insurance company so in that instance the individual's able to obtain two phones and then they take both those phones and take them to a soul cell or westside wireless and in this case the government showed that there were many many phones that were taken to westside wireless by alfredo capote to that word sourced by this is sherry and cell phone insurance fraud was that scheme charge separately that was included your honor in the in the conspiracy count and sent count sixteen and seventeen the ones that were mailed on september eleventh yes your honor that those phones went and they were mailed straight see under thirteen is what i meant to describe how they got the phone yes your honor that was described in the conspiracy count and there were counts both from mailing the phones based on the issue and fraud and also counts where the phone calls to assure he and where lies were being told about the damage to the phones those counts were also presented to the jury and the defendant was convicted on those counts as well but what about the trash pool swear they had the bags and receipts that showed that these phones were coming from that wireless carriers and just a few days before they were brought and so they  what does that show yes your honor there was evidence showing that there that that in the trash at ace wholesale there were receipts in contracts and retail bags from various stores such as or apple and those receipts and contracts indicated on them that there were that the individual who had purchased the item that was once in that bag had entered into a contract in order to obtain cellular service so there were these receipts bags and also contract documents that were sometimes in those bags that were all taken a sole sale and ended up in the trash and significantly in connection with that and the government did multiple trash polls didn't analysis of those trash polls that showed that there was that close proximity of purchase of the phones and entering into the contract and then the phones ending up at ace wholesale which goes back to the evidence that the individuals bringing the phones had no intent to honor the contracts that they were entering into in response to serious seeing and hearing this testimony during the trial the defendant's response was that he if he's first he said this is around page one fifty seven and document one eighty three which is primarily the defendant's testimony the defendant first said that if there were contracts and receipts excuse me that he did not see the contracts and receipts and then later said if there were contracts and receipts he disregarded them because they were quote just paperwork so he waffled on whether he had seen those documents before and there were many many of those documents shown in the trash holes and also your honor on that note there was a discussion and jason florrie is testimony about after the there was a first some background there was a search warrant that was conducted at ace wholesale which was the initial store that was originally owned by jason floria after ace wholesale was shut down due to that search warrant jason floria testified that he and the defendant discussed how to continue the fraud that they did it is wholesale while trying to protect themselves and this is around document one eighty one pages forty two through forty nine and eighty three to eighty four so they figure out that they've been shut down and now they want to do it again but they need to protect themselves and this goes back to that idea that if they do use the word continued the terms continue the frog that your honor i don't have the transcript in front of me and i don't think he specifically used those words i do think he said that they were trying while trying to protect themselves i do think something along those lines was stated by jason floria and as a follow up to those questions on page forty seven of document one eighty one there were questions asked about what they did to try and protect themselves and jason floria discussed how he had learned after the search warrant at ace wholesale that there were certain techniques that investigators were using in order to show that they were that jason floria and tony archie were obtaining newly obtaining fraudulent obtained new phones and jason floria said that things that they needed to do to avoid detection would be things like not leaving sim cards on premises so that was something that happened at days wholesale along with the contracts and receipts there were sim cards that were inside the phones that were being sold those sim cards were just thrown in the trash and they were found or and trash po as well so jason floria said that they were taught what is the significance of that the significance of the sim card your honor is that the sim card is needed to provide cellular service on the phone so if the sim card that was associated with a certain subscriber who had entered into a contract was simply tossed in the trash a couple days after the phone was purchased and obtained for cellular service that is also evidence that the individual did not intend to honor the contract and therefore would have had fraudulently obtained that phone and in addition to talking about sim cards jason floria discussed the need to limit bags receipts and stuff like that is what he said and so those are the bags to the retail bags that are emblazoned with the logos of the stores that these new phones were being brought from the receipts and other things associated like that which would be contracts so  your honor your honor that there there was a substantial amount of evidence in this case in the briefing outlines additional and additional pieces of evidence there were also multiple conspirators that testified for the government there was a substantial amount of records analysis that was conducted the cellular providers testified explained how these phones were obtained through fraud and the the records from a small cell in westside wireless themselves tied back to those phones that the providers said were obtained through fraud thank you so the government top started out by talking about how mr archie testified in this case and i agree that he did testify in this case and the government laid out in its response brief the things that he testified to and i asserted in my reply brief that even if the court believes the exact opposite of the testimony that he provided i still don't think you have sufficient evidence to show that he intended to join this specific conspiracy as outlined in the indictment and that's the choice that the government made here asked the government whether there were specific instances in this case of actual fraud that could be tied back and i don't think there were cases where they brought it came in and said ok mr jones went in on february first and he broke his contract and here's the phone that came from mr jones and then mr patel says yes i told mr jones to do that there was no evidence like that in this case there was evidence that there's a general credit scream scheme that can occur and everybody knows how it works you go in and you get the phones and then you break your contract and that some of those phones ended up at ace wholesale or westside wireless but i don't think that then can be extrapolated to say well mr archie must have wanted to carry out that scheme i mean if they were that's what did he say he understood when he received or was told about bull deliveries of phones but he talked about people getting replacement phones or upgraded phones so carriers would often give incentives so if i have my two year old cell phone they would say come and get your new cell phone from sprint we're going to give it to you for two hundred dollars if you re up with us so he testified that his understanding is someone would go in and get the new phone decide to keep their old phone and sell their new alluded to this earlier if you had individuals coming in one by one and doing that then maybe there isn't any inference at all to draw that the recipient of the phone mr archie in this case knows anything of what happened behind the scenes but he was receiving he in the company were receiving as i understand the brief that i haven't gone into the record so i don't i can't verify it yet they were craigslist so someone would list i have a phone for sale i go meet that person at mcdonald's and i buy their phone then i would collect all the phones that i bought from people at mcdonald's or at my own store the co defendants had their own store where they were buying the cell phones so people would either break their contract or do whatever bring the phone in to mr patel or hindi he would collect the phones that he paid for and he would bring those phones to mr archie store westside wireless and sell was mr arch he asked about whether he thought anything was unusual given that the fall out some of the phones that were purchased in bulk were new i mean people don't usually it seems to me sell new phones on craigslist if they do what you suggested they'll sell the old phone not the new phone right i understand what he testified to was he saw at the time that this was occurring he saw advertisements on t v and other places of other businesses doing this so t v advertisements a place called gazelle saying we buy your phones and he so his assumption was everybody is doing the same thing we're all buying these phones and people are bringing them in and i think even if the court believes the opposite of what he testified everything that the government said i don't see how that shows that he had the intent to defraud the characters yes he may have had the intent to buy stolen property or traffic in stolen or fraudulent property but the court the government is asking the court to make a big stretch here in the cases that it has cited the intent that is it is shoe when you say oh they're repeated sale so he must have been to this the intent that it is the issue is the same in cards being disposed of at his place and with the presence of all of those broken contracts that he the jury could know about ok your honor and i think that's where we get into the issue of did he have actual knowledge or was he deliberately indifferent to this the co defendants who testified never said and they testified explicitly we did not tell him this he did not ask us about the stolen phones he did not ask us about fraudulent phone so i understand that we can make some presumptions if the defendant testifies but i'm going to ask the court how far we can carry that out does it mean that the government no longer has any burden on any issue that we might raise on appeal if the person testifies it just can't be that way that i think