who has never been held accountable by the justice department for his kickbacks and that's even though the justice department knows everything about it and congress knew there would be situations like th and that's why they passed the amendments in one thousand nine hundred six to the public disclosure of the f c a relating to public disclosure bar because what's interesting about those amendments and which i think is sometimes lost and the case law relating to this is that before the amendments if the government knew about the allegations that the private citizen was basing his complaint on his or her complaint on the case with bart after the amendments even if the government knows everything that the relator puts in his complaint the case is not barred under the public disclosure and in our view we think this is what the district court failed to appreciate in its order because the issue isn't whether the government knew it it does it isn't whether or not the government had other sources  information the issue is was the information in the government's possession or in the related possession public now that issue was never analyzed by the district court because if it had been i think there's really only one conclusion and that is that the grace examination which is how i'll call it was a private setting it was a disclosure in a private the real estate broker mr grace who is paying the kickbacks with john l scott and remax told them that mr steinberg and he had been working together on one hundred properties in the past so i  found out by going to the public records in the bankruptcy courts and then mr steinberg was representing to the bankruptcy court that property was that was to be sold was needed repair and was of a laura value then it actually was and that those false statements were being made they found out they went to the public record find the chain of title and some of those properties learned that the property was being sold to people who mr steinberg had hired as a handyman in some other which gave an inference that there was a sharing of income not only on the straw buyers necessarily but on the sale of the property now was circumstantial reasoning on their part but it was accurate reasoning because they wrote to the bankruptcy board in approximately december of two thousand and s know what we're really concerned that this fellow with a real estate license has an motive and the opportunity to profit from the transactions that was precious and it was based on their were just sharing commissions and because mr steinberg was a real estate broker he could legitimately a painless these commissions so my smiter submission is wrong when you look at all the evidence which includes fraud in connection with the straw buyer program fraud in connection with forcing people to sell property railroading them to sell their property he understood that from his own experience he has a real estate license he's working with the same broker over and over again  what the they knew he had fraudulent intent from the from this raw buyer transactions so when you look at all the evidence they go to the trustee and say this he's now a rat this person is involved in a financial improper financial where you get here as to whether what they had suspicions about problems but what is the information they knew that led to judge what from my sat the actual fraud that became an issue but with the information they constitute information a qualifies them as an original source the court may decide that needs to be something more but i think when they've got the guy they know he's involved in a fraud with mr grace you know he's got a real estate license they know that he's there doing it weren't you know i mean when they were questioned they used words like suspicion and so forth but they're laypeople you know they don't know the significance of that i think what's really important is what is it that they actually knew and how would a did you know about the commission based fraud and i think they said pretty clearly in response that nothing until the gracie said well i think what they said your honor is we don't have proof of it we don't have proof of that of what what was happening but we had our information they characterize it as and then you then get into what is the difference between suspicion and information so whenever value went back and i think that's right and i mean i look at these law and i don't really see a lot of and i think there's a lot of help on that i think you look at springfield terminal for example which i think is really what our case is all about and what the court says is that what you need to know is information that relates to one of the essential elements of the fraud so i mean that's a pretty broad standard and i think one that we could work with as the accounts in this case to say all that information they had gathered that led to the inference of fraud and some kind of financial sharing of commissions or other benefits from the sale of these properties was going on that's our position well i like to have more facts that would nail it down yeah of course i would but i do think that he furthers the purposes of the f d a to allow these individuals to be characterized as a regional source of examination or constituted disclosures and public's fear didn't even analyze that and if you look at all the cases schumer if you look at berg versus honeywell  valid memoranda disposition that is not of any presidential value and it's a very different situation where you have as i recall the auditors say is that the what's what's what you see in those cases is the fact the government knows the information isn't enough the fact it's theoretically available to the public is not enough there has to be an actual disclosure in a public sp e so in schumer which i moved to a more directly case you know you have the same you had the government going to somebody and giving them information it was happenstance of those particular employees were there and got the information and  deposition you have anything that we should look at other than throw that supports your position on that point legally honor no but i think though is a very persuasively written case by judge if somebody tried to show up at the deposition his position would be you have no standing to be here it was he stated they never gave anybody there's no evidence they were giving this information to the public to begin with but  the evidence is also that it was just almost and so the reason the trustee chose the mahal for his case it was open and mr steinberg was the trustee you want to save if we used up all your time i would like to say this and now you've used it all up we'll give you a short rebuttal yes life  you very much yours though that will later provided no information of any true value to the government the mojados had no true knowledge of the fraud that they allege and complain they didn't trigger the office of the united states trust a false claims act is designed quote to prevent someone who has information only because he obtained it from the government from profiting from that information close quote this is the seal one case all over again district court here had an opportunity after extensive briefing and a full day of hearing hearing from the malhotra is hearing from through two attorneys from the office of the united states trustee to evaluate questions about knowledge and information and whether or not the mojave has actually benefited the government's investigation in any way and some of the things that the court found that are more than adequately supported by the evidence include and these are all in the district court's decision the malhotra slax true knowledge of steinberg's activities and had only suspicions so in terms of your questions to counsel about what knowledge they had they didn't have any knowledge they didn't know anything certainly not anything from an insider perspective they had suspicions in mr counsel's words they smelled a rat there's no question about that what does that you think they would have had to have disclosed to the u the outset to to to have a viable case for just the level of specificity you think they need to come forward if information specific direct and independent knowledge that they had in the statute that there was fraud ongoing that would allow the trustees office to open an investigation and uncover what ultimately they did uncover once they receive the true information from mr bennett at that at the hearing i  used the example of of lance armstrong who is now subject to a false claims act because of his work with the postal service i suspected prior to the time that it was a knowledge they had nothing to offer the government that the government could go on just give me give me an example what is it that they're supposed to have an example would have been related to the kind of fraud that was disclosed in the phrase it would have been what what mr bennett had which is a receipt showing payment of a referral thing the identity of specific transactions where referral fees had been paid some evidence hard evidence that trustees office could look at and say you're right we need to investigate this what they had even even the suspicions that they did have would doesn't rise to the level of direct and independent knowledge under the statute because it wasn't information that they had from being on the inside of these transactions and mr bennett had worked with mr stein for mr bennett had seen the documents was aware of these transactions as they were going on and so was able from that perspective to bring the insider information to the trustees office specific identification of allegations and transactions which are which are the things that the statute first it remind me mr bennett is the one who district court found that they did not know that they suspected vaguely that mister mr steinberg was profiting from his position but one of the factual findings that the court may  told the office of the united states trustee they suspected steinberg was going to kickbacks or otherwise secretly profiting from receiving money from real estate agents so the information that is really the crux of the false claims act case that they ultimately filed they never provided they never even alleged much less did they know so yeah they said we don't like this guy we smell  source what i think is important for this court to look at is how a public disclosure occurs under the false claims act there are specifically enumerated fora in the false claims act where public disclosures can't work disclosures of government information can occur they fall into three general categories the one is criminal the ministration or civil hearings one is a government report audit or investigation and another is newsmedia those are the three general categories what we're talking about in this case is disclosure in a governmental investigation what the case law that the an argument that disclosure any information had been disclosed in a civil lawsuit during a deposition and that that triggered the civil hearing disclosure under the false claims act and the court said no it's only potentially disclosed until it comes to the court in either open hearing or in a pleading but there's a footnote in the putnam case it's very revealing that says you know we can we can see whether under this circumstance there could be a disclosure under one of the other categories a for a such as if in that deposition there had been a disclosure of a government report well that's what happened in this case we're talking a lot about whether the deposition was private whether a bankruptcy was private the fact remains that what was happening in that room was a government investigation and it's that type of four that we need to look at to evaluate there's no claim there's no question that what occurred triggered public disclosure we're talking about a civil hearing disclosure doesn't you can't ignore the fact that it was disclosed in administrative in a government investigation which takes you to the next question was it public and the case law is clear seal versus seal says if the disclosure is made to a person who subsequently uses that the government made to a single person on the street gail and the question was is that public is it in a private sphere or a public sphere and the court said but it is public as to gale in the sense necessary for the sensible operation of sex in session thirty seven thirty four a because it was disclosed to an outsider to the investigation who now seeks to profit from it as an f c a relator it was publicly disclosed to that person that's exactly what we office they were not an insider to the investigation again we've got to we have to distinguish the hearing from investigation examination from investigation investigation that's what was going on and they were an outsider to didn't get information from the government and then seek to use it it's a big distinction between schumer and unseal here that the district court found significant the court said this is much more like seal then schumer because the mouse watchers are like gail they got information from the government and now they're trying to take advantage of it they would have to bow out just would have no factual basis to assert the claims that they've asserted in their complaint but for the fact that the government gave it to them i guess let me just i mean i understand your characterization of the government having given them something but the government didn't have anything time of the grease examination i mean it's terms of the actual information that was revealed the most offers were getting at the same time physically as the person from the trustees office so it seems a little different from seal one where the government literally is here take a look at this  they're in their own bankruptcy proceeding they have a right to be there they're learning of information in real time at the same time the government is out just tell me that two answers to that first of all the government did have a lot of information for the grace subpoenaed john l scott john all scott produced over a thousand pages of documents about every single transaction that that the government went through in a grace examination every transaction every referral fee every check every payment that the government went through during that examination they already had before the examination because they had subpoenaed it as part of their investigation from john scott so they were revealing to the malhotra set that time what they knew second in terms of the simultaneous disclosure of false claims act works the other way that the government doesn't have to beat you to the information you have to beat the government so high goes to the government what everyone's hearing at the same time is the burden of the malhotra to establish by a preponderance of the evidence that they had both direct and independent knowledge the meier case makes clear that the court's determination on that issue is subject to a clear error standard and this district court in this case said that the malhotra had neither director nor independent knowledge they thought they had no true knowledge at all and the original source my last comment just quickly on the cost issue because i know with before the court is that the court's ruling the district court's ruling on that was again based upon its hearing of a full day judge robert found it really wasn't that close of a case in terms of jurisdiction one of the reasons that he exercises his discretion to work cost at all is because ultimately after hearing all the testimony i'm very much appreciate that i'd like to take the minute to sort of harmonize schumer seal one in this case because i think if you if you listen to what mr found else that quite eloquently the employee and schumer who received the information when saddam was because he was there about the fraud could have gone on and and brought a false claims act case based on that information so the fact there's a government investigation going on the fact the government relator to the punch to bring to get the information doesn't really make a difference because those employees could go and bring a case based on what the government told them that's what she was says and they said it because the is