necessarily a case about crime and punishment this is a case about government accountability and what has happened when a defendant provides a substituted asset to the government for the sale and distribution of proceeds of that sale or the payment of forfeiture and the fines and restitution and with that once the government receives such an asset when the government takes that asset and does everything in its power to deliberately destroy the asset by failure to maintain a grandfathered use such as an adult license at that point as we have seen in cases both in the ninth circuit and the supreme court before we before we get too far wrong and i hate to interrupt your argument specially since this is your first one but there's one question i have and that is the order of substitution doesn't seem to go in the same direction you're arguing in other words the our order of substitution just says that the assets shall be sold and applied to the forfeiture and restitution not the property value at the time of the substitution that's correct you agree with that i agree with that and the so then your a claim then that the four particular the club are a v reads leaves your client of any further obligation wouldn't be so i'm sorry then your claim that the governor governments for particular of the club the whole relieved him of any further obligation couldn't be so because at that point we're saying we're going to take these assets we're going to sell them and the sales my relieve and that's very important when you didn't object it seems to me then the order suggests that just because they took the club or the property didn't relieve of any obligation what happens is you take the club and then the sales of the proceeds might relieve of the obligation do you agree i do agree all right based on the notion that mr riddell entered into the stipulations on the subsequent forfeit stipulations with the knowledge that the united states government was sent to do everything in its power to maintain the value of the club no so really we're talking about alleged waste correct so that's really the big argument here today is was there waste they go argument is whether the waste of the asset breaks the proximate cause a sion of the the value of the s all right so then my next question without trying to steal too much time from my colleagues is what is my standard of review in determining whether the district court erred in finding that the government's actions did not cause the decline in the property bad we believe that under the terms and the court you had all this in front of you people presented evidence here and there and the decision you made unless it's a clear abuse is ok and i agreed you're go with that all right any time you can interrupt me here but be careful about that why is it abuse of discretion and not clearer and as much as the issue is a factual one because the reduction of restitution under these terms when the united states government stablished a clear price in two thousand and eight of top of the thirty one million dollar assets and then that the lower court did not comply with that value and place the burden on us to establish the value of an asset is an abuse of discretion the inconsistency in the lower asset and if there is such evidence why isn't that a fact question for the district judge the evidence that we have that the government deliberately wasted that is the fact that in two thousand and eight the government had the opportunity to operate a club and they made a moral judgment not to operate an adult entertainment business in a city like las vegas and in two thousand and eight when the adult use permit was set to expire they came to the judge and requested declaratory relief to not have to stay the expiration of the adult use yes judge the lower court judge specifically told them you waited until the eleventh hour to come to me and intervene and at that point he said i'm not going to intervene i'm not going to invalidate it completely legitimate and constitutional local rule and not only that but why is that evidence and purposeful to liberate the liberty just because the government had spent almost a year trying to some of the assets right the government there were and enter and considered several potential purchasers correct they were they refused to sell the assets of those purchasers what's the evidence that they refused to supposed to the deals didn't close just as the didn't close from the the our property was being offered by the by the appellant corrupt what are we to do with the historical fact that that was the crash in two thousand and eight of the value of the that was not in the real estate the value of the asset was in the grandfathered adult use permit that because the government despite offers to light since the united states marshal service to spite offers  from the mayor to license the united states marshal service to open this club for one hour and sell one drink to maintain the grandfathered use permit they refused to do so so the value the twenty two point nine million dollar reduction in value was which we are going according to the government's price when the government came and begged the united states district court to set it to stay the expiration the value was not in the real estate the value was in the adult use that's where the value came and the real estate was just like any other real estate without the adult use  or the liquor license which is which was such a valuable asset and that's where the value payment it's not in the real estate your honour's what i would like to do is reserve five minutes for a  after the entry of the plea to sell to you to sell the property you agree with that do you agree that the appellant made numerous efforts to sell the property during the first year following the entry the plea yesterday and those were unsuccessful that during the first period following the forfeiture that the government didn't also seek buyers the government did not market the property in the way that the property should have been marketed this was a special property well and but i guess what we're really trying to get at regardless of exactly the standard we would use was these are arguments that you made to the district court the government made other arguments and now it is for us to give some deference if you will to the district court's decision so your argument may be good but if there is a countervailing argument with some substantial evidence to it and the district court accept that rather than yours we're kind of bound by that argument are we based on a standard of review to a certain extent you are bound by that argument and so we're again asking in that circumstance what is the case or what is the law which would suggest that the district cord was out of whack and the accept him spend it did of the government's case one of the cases that kanya and i might be mispronouncing it which is the second circuit case where in that case the defendant surrendered i'm sorry nineteen million dollars  attributable to the proximate cause of the defendant because the defendant did not cause that sale from nineteen million dollar asset to a one point nine million dollars asset because it was the nominal value exchanged here let's not forget the government never even paid the mortgage the government never even paid the mortgage on the asset so there was no money made on the ass that there was and there was a foreclosure i did of trust for closure on the ad that where despite collecting half a million dollars in rent on the ass that they never paid the mortgage so that's the way to and that's a loss all right i understand your argument i understand your reserve dime states there's significant evidence in the record many many attempts to sell this property beginning from the time of the plea agreement the plea agreement called for mr is allowed to sell the property within twelve months and  at the end of that twelve months the property was not sold there was actually a provision that if there was a contract for sale at the end of that twelve months that it would be extended for another two months to try to clear anything in the record to show that he tried to sell there were at at the time guilty to defrauding united states mr is a low sort of turning the club over to this michael signal rally who got a temporary liquor license and reopened the club and as the government has explained the numerous proceeding for the next year mr cigna really essentially bled the club dry i mean with withheld didn't pay payroll taxes didn't pay sales taxes didn't pay rent and so and then and the city had offered him that license with  provision that he would buy the club at the end of the year the end of the year comes he walked away there was a contract under which he was to purchase the club chris and that's the one he entered as a result of the efforts of the appellant correct yes yes and that one and so that sale didn't happen at the time of the forfeiture at the time of the substitution i'm sorry there were three additional signed contracts to purchase to purchase the property one for it was like thirty two million thirty one million and twenty nine and a half million and the substitution there was a hearing on that actually both parties filed things the same day asking the court to approve those sales so that we could go forward so that mr riddell could go forward and negotiate one of those three sales and and the substitution said ok the court approved those three and said yes mr result try to do those three and then if you can't then the marshal service will take over and try to sell it also three of those sales fell through and then the marshal service took over and they did attempt to sell it and i actually don't know this is the first i'm hearing some sort of accusation that the marshal service didn't try to sell the property there were numerous contracts they have actually they complained in prior pleadings that we had these things under contract to people for too long and at one point we actually had an approved contract that was ready to go took it to the city of las vegas and they wouldn't give that b liquor license so that one fell out so i think i mean the fundamental question here is it is true everyone thought at the time of the plea at the time of the substitution everyone thought that th was worth thirty two million dollars but as judge pros that at the hearing you know you can talk about what something something is worth but what something is worth is what somebody is willing to pay for it and nobody was willing to buy this club now why was that there wasn't the liquor license had been had been revoked and mr cigna released temporary license had been revoked and at one point mr results former counsel was saying had said that he didn't believe that when the club was not off operating that it wouldn't be possible to finance a sales a pub wasn't operating in the club wasn't operating because the liquor license had been had been pulled misjudged pro at one hearing suggested that it was a bunch of litigation ancillary litigation of you know different claimants on the property and you know i'm just pro said this can't be helping you know who's going to want to buy something  operate a strip club and that was the one the one document that's missing that i haven't been able to find and i don't even see it on the document is is the hearing the transcript of the hearing where the decision was made to substitute the asset because the government had filed a motion to substitute the asset approve the sale allow mr is a low the opportunity to try to complete one of these three contracts and then and then substitute the asset and use the to the transcript of that hearing but we don't have it and it's not on the docket so i'm not sure where that came from but but at that hearing and every hearing sense the government was very clear that it was not going to run a strip club that the district court rejected that argument didn't district court did not accept the government's position that it could do so i don't know that the government i don't know that the government ever made the argument that it couldn't do so what we said is that we wouldn't do so and we said that from the very beginning we are not going to run a strip club let me ask you this question the substitution occurred in august of two thousand and seven yes the motion for a stay was filed in june of two thousand and eight in light of the impending june thirty two thousand a deadline expiration of the permit yes given why given that the government chose to seek that relief when it did why didn't it act more quickly why did an excellent or well either to do that as have that is remedy or to seek an interim operator yeah and i'm sorry and obviously the district court denied us that relief which which the defendant had joined in that request but but i think that one thing that had happened that relief was six weeks before the liquor license was set to expire yes and that was very soon after very soon after and i'm sorry that i don't have the exact date but there was one contract that we had worked out with buyers to the point of find it was an escrow they went to the city in the city refused to give them a liquor license and so i think you know i think we were we were very very close to the point that we just thought that this wasn't going to be necessary and then when the city rejected the liquor license to these potential buyers which was sort of tenth our decision we were stuck with the eleventh hour decision of trying to move forward with this year is sleep i it's in la it's in las vegas i don't know i'm sure appellant's would be able to answer that question for you i'm from reno i don't get down to vegas but you know but at the end of the day this is what what judge pro who before he retired i mean he's been he's been handling this case for eight years right and he had seen all the different machinations of a ten and this is not the first time that that mr is allowed had attempted this i mean he filed a request for a final order of satisfaction in two thousand and ten thing that the substitution should take care of all of my obligations and judge pro denied attend and actually judge pro to night and then the defense counsel said is this a final order because we're going to want to get that reviewed and he said he filed a motion i denied it and they did that appeal and that was two thousand and ten and they came back in two thousand and eleven and i mean it seems like as judge pro is well aware mr as well as eight year effort to avoid the consequences of his actions and avoid th having to pay this restitution and forfeiture that you know for the one question that i think is somewhat worrisome to me is the last question we we can talk about the weather the saying the government didn't waste and we have some differences we're supposed to give to the district court and we know that the asset declined in value so why is it that we should firm the district court's idea that the that the situation presented did not find change circumstances presenting meriting relief under eighteen thirty six sixty four when you get to that the changed circumstances to reduce the restitution based on his current inability to pay you know i think that there is this asset there's this one asset that like i say everybody thought was worth thirty dollars and i'm glad of that it's not now not i'm trying to decide whether the district court was right in saying well there's no change circumstances well it and that and for that you have to look at the circumstances of the defendant as a whole right i mean that's about whether he can pay the restitution in the fact that there is one asset it's the question is whether he can pay this restitution and you know and what we have is they didn't bring forward any evidence about his current financial i mean he he made these monthly reports to probation but beyond that there was no there was no presentation of his current financial situation to the court which the court would probably pretty reasonably have been skeptical of given the millions of dollars that over the years that mr is alone has gone to great lengths to remove from from the ability of the united states to get it i mean beginning beginning at while this plea was being negotiated which would require him to sell the club he takes out a five million dollars loan and secures it against the club transfer seven million dollars in assets you know out of the country and offshore he ended up i mean his probation was revoked and he was sent back to prison for another nine months because of hiding assets and offshore accounts and and so so this coming to the court and saying oh my situation has changed without providing evidence and that's what judge pro found was that he hadn't satisfied the burden of  providing evidence that he was unable to pay the restitution and and that and that that standard of review is clear clear i mean that is a factual finding and there's just no clear just just one thing which wasn't mentioned but i do want to raise because i know there's a lot going on in this appeal and so i did want to just take a moment and kind of clarify what is not involved in this appeal and one of the first and foremost is the ten million dollars in restitution to the h s in the district court the appellate repeatedly and emphatically said this motion is not about the ten million dollars restitution to the hand right and in fact in that reply they kind of took the government to task for raising the ten million dollars restitution saying that's not what this is about that's not what this is about and then here comes the opening brief saying they want to be released from the ten million dollars in restitution so we're cardless of anything that was not merely forfeited that was waived when they explicitly said to judge pro that restitution to the henrys is not before this court thank you very good thank you for your argument ma'am could i ask you one last question the district court said that the decline in the real estate market in las vegas was i'm was among the reasons for the decline in the value of this asset you agree with that and he said  to be precise he says rizla has not presented any evidence from which this court could determine how much if any a decline in value was due to alleged waste by the government versus the dramatic decline in property values during the red relevant time frame what evidence was presented during the hearing as to the dramatic decline in real estate values i don't  obligations in this case we don't not shrink from the fact that our client is not a boy scout our client was convicted of these offenses but he did this time he paid he gave everything he had and turned it over to the government by agreement they took that as a landmark institution of its kind in the las vegas adult entertainment community which is a unique market weary it is what it was on industrial road it was right off of the las vegas strip very very close to the las vegas i was what district in an in an area which at the time was proper the zone for had a grandfathered adult use license that was many years of long standing the asset with the denver mint completely agreed was worth in excess of thirty million dollars and what did they do they insisted on acquiring it and forfeiting it as a substitute property and our client agreed to that but once they acquired all right title and interest they didn't pay the mortgage they allowed the license to lapse they did nothing about it they allowed this valuable asset which was emperor money the available to take care of all of these obligations and they deliberately allowed conscionable economic waste to take place and they did so liberally in the court said earlier asked why is it deliberate it's deliberate because it was a policy that was undisclosed to our client when he entered into this agreement that they had no intention of sell the it was their policy not to operate it and they could have had a receiver appointed they could have asked judge pro for an independent manager to take that business and preserve it for the benefit of mr henry and everyone else involved there would have been enough money to make all the restitution pay the fines satisfy the forfeitures with change left over argument pare that argument to the argument of the government made a decision about that correct that's correct and we're stuck with saying did he make clear air right was what he did so out of the ordinary that is impossible to have suggested and all i'm trying to do is i'm trying to say based on the standard  what are you going to tell me what case what something you have to suggest what judge pro did was clear air abuse of discretion whatever what do you have  you let me quote judge pro the courts ask the court asked this question earlier and i would like to very briefly when the city desperately of the government desperately went to him and asked for extraordinary relief to sta court finds that the united states has significantly contributed to the dilemma the brings it to this court seeking extraordinary relief at the eleventh hour the united states could have attempted to extend the license and permits for for the forfeited property by operating the crazy horse too directly or through a receiver show not to do so and in the roberto decision the united states supreme versus power company is submitted