seeks reversal of his criminal conviction and in the about that this conviction is not reversed at least a three man four resizing in the united states versus box seven circuit recognize that there exist adequately address this question i think we have to just briefly summarize once again the elements of mail fraud those are a scheme to defraud the intent to defraud and the use of the mails and further acts of that fraud so all of them away the question  comes to bear and in this case in every case is what was the scheme in this place in this case rather the scheme so called scheme started in two thousand and one mr scotia was appointed receiver over a receivership as a result of two brothers who are the odds over all the corporations of which they were members should be handled receivership was appointed through the spirit court of lake county the successor of receiver and beginning end two thousand and one he made some authorized unauthorized withdrawals those withdrawals proceeded until two thousand and four at which time the receivership bank the method by which he would do this would he would draw a check on the receivership account negotiated checkered past through the banking channels and he would retain the funds and then at the end of every mo as with every virtually every bank account a statement would come from the bank showing these on authorized withdrawal at that juncture the scheme in essence was complete because scheme to go on and just focus on the mailing in question that is trouble sixty motion for relief from judgment we have to apply some of the basic principles of what the mailing must entails and that is we know that the mailing must be an enterable part of the schemes execution we know that the schemes of success must depend upon the mail and we know that the mailing must be sufficiently closely related to the scheme the we also know that knowledge that work against the scheme are insufficient to support the mailing requirement so it's relevant it's motion basically was an effort to postpone the day of reckoning the disclosure of his theft from the receivership because it kept the state court in the dark it kept that beneficiaries in the dark  kept everybody in the dark except for him and he was doing that for so irrational jury could conclude to him to cover up his fraud and it actually did just the opposite but this motion did was it hastened the day of reckoning because we have to remember in order to wall because that's the theory and that was how the jury was instructed whether it was successful and lolling the judge and the other parties is sort of beside the point question is whether it was part of the scheme the ongoing scheme to continue to cover up what he had done early on in the receivership true he didn't steal more later but he was trying to avoid complete and anything after that is to merely avoidance of detection because you have to remember at the juncture that this had happened for lack of a better term but homes have been reduced at this point he was ordered by a court  order of which he had no notice for turn over the files and to pay the auditor he learned of this court order while the motion was filed without notice the order was issued he learned of the order the same day or i believe it was the same day that his compliance was necessarily required given a false statement in that motion he said that he needed to he said the receivership account hit adequate funds to make any thousand dollar retainer payment the funded been closed two years earlier so it's not just a now i didn't get notice it's i didn't get notice and here's a lie that i'm going to tell you to buy another month of not getting caught so actual statement i think was the receiver has adequate funds to make the payment when required however whether it's false or whether it's true you know that doesn't matter either that's not relevant to the equation because even a true statement can serve as a basis  out at sentencing i spent some time trying to be forensic accountant myself to figure out what the intended loss and what the actual assets tell me what what is your position exactly the the loss setting aside any and there's an exhibit i think it's because of the one hundred a one off the one hundred no one hundred a i think is the total unauthorized thralls but it's in the one hundred series right after that and there is a separate in that same series in the appendix showing three hundred seven thousand dollars of repayments and so that the total receipts of the receivership should have been roughly five hundred twenty eight thousand dollars the total payments back to the she's receivership were about three hundred and seven thousand dollars and if you net those out you get back to two hundred twenty thousand dollars now that puts him on at a level ten instead of a level twelve level twelve that the present report calculated on the court adopted that's how you would get to the actual loss now that's not the government's position they say look at intended loss and there are some problems with their argument as to intended last because if you look at the application notes to be one point one three one i think it is if you look at it that application oh there are certain parameters you look at that had the hey you got to pay the money back you paid it back the site credit for that they said no you don't get that so either if it's been detected or it's about to be detected you don't get credit for those payments back before why are these pay much more money how many lives thousand four and two thousand and six and you have to remember this indictment was returned in two thousand and fifteen the mailing in question took place in march of two thousand and twelve so it's either six or eight years later that the mailing that the government relies upon for it and nine years or eleven years depending on which cut off they want to use before they always return certainly he was entitled to that three hundred seven thousand dollars that he paid back into the account and pointedly the government wants to argue that these were to pay certain expenses that the receivership estate was incurring and yes they were but if you look at the amounts in the exhibit they greatly exceeded the ongoing expenses of the receivership there was a one hundred thousand dollars payment i think a two hundred thousand dollars repayment they were large psalms deposited back into the account long before anyone even had a whiff of what was going on and they were used to pay the legitimate expenses of the receivership account in other words some times that that occurred granted but if you take the account down to zero whether you start at one hundred two hundred half a million dollars it doesn't matter if you take it on the street and you put on fifty thousand then you take it out again that's not additional loss or intended loss that's just taking the money back out that you took initially repaid and took back out again look at that's credit card that right i mean you know you want fifty thousand dollars and then you take it back out you don't get a credit or not set for that in anything or night you know but he was certainly at the very least get credit for the two hundred twenty thousand dollars should have been should have been there that he took out  what's the difference when he repaid at the risk because there was an expense which if left on paid would have blown up the scheme is that correct that is true but that's not that's not the standard that's not what we look at we look at had he been detected under the application or had it been detected no we know it wasn't because it wasn't detected until the audit was performed late in two thousand and twelve we're talking about repayments in two thousand and four through two thousand and six nor nor was it nor is the standard i'm going to repay this so they don't start looking around that confuses lowing behavior with what the application note requires so under the application noted to be one point one he's certainly entitled to those repayments that if i could just for a second get back to the drawing on the conviction  self long as defined by this court the supreme court has to create a false sense of security has to postpone complaints to the authorities now the complaints were already made the investment investigation was underway the auditor was appointed and by the way there was no requirement that an auditor auditor be appointed no receivership in the state of indiana this was something requested by the parties indeed as one of the cases note it would have been the preference of mr social to no audit had ever been performed now if we were talking about the final accounting that was filed more than five years before the indictment i would have a hard time standing here saying that doesn't constitute walling under the federal mail fraud statute but this is something after the fact after he was found out there was nothing that he could do at that point to make apprehension less likely there was nothing he could do that would permit this period of time thirty days sixty days whatever it was behave here it's certainly an attempt to model the court and the other parties to the receivership that there are sufficient funds when in fact there are not successfully telling everyone to look at the account there's nothing to see here trying to convince the victims of this case that in fact there is still money they don't have to appoint the auditor because as he says in his deposition he knows when they start digging into those records they're going to figure out exactly what went on and that he stole the money that is lulling as this court has put it in all the cases cited in our brief as the supreme court describes it sampson it is to put the victims of these and say you don't need to follow up on what i've been doing yes i've been appointed to protect this money you can trust me there's plenty of money here and all the acts of concealment are attempts to conceal it's a broad which is an integral part of the fraud that's exactly right  it's eight years of successful attempts i don't know that there's the supreme court mark rejected the notion i think that there's you know if this mailing is going to make the tension more likely it doesn't constitute mail fraud but i also think factually this mailing didn't make it more likely it's again mr stone trying to say nothing to see here guys don't need to appoint the auditor i'm not going to hand over my files right away and then he gets another three months out of it he after he filed the rule sixty distribution based on mr schofield representation and that's page seventy nine of  in but on page seventy five which is exhibit one hundred f there's that three hundred seven thousand dollar amount that mr social represented or talked about and opening argument and i think your honor is exactly right judge buried on page five of our brief we lay out how this money was spent and so you have this first roughly one hundred thousand dollars that's put in between when the account goes pear and february two thousand and five he almost immediately pulls that back out so he's putting it in  takes it back out and what he says in his deposition is the reason he's doing that is because he wants to keep the account open starting in february of two thousand and five there's this mediation between the parties and they agree that they're going to disperse all the funds they  want to settle this dispute that's been raging on for eighteen years at that point so they want to have a seventy five thousand dollars payments come out of the receivership now the account is  there's less than there's about two hundred eighty dollars at that point so what mr social if you look at exhibit one hundred f it's reflected on the february twenty third two thousand and five transaction puts in one hundred thousand dollars he then deposits what he's doing is he's putting in just enough money as judge darkon noted to recover to cover these legitimate receivership expenses so it's so here's the question if he's if he's putting in enough money to cover the legitimate receivership expenses under the application note i'm just wondering why he should get a credit for that because i don't read the cases that you cite for that proposition as standing quite for that result in the application note does distinguish between payments made before and after discovery and your interpretation would extend beyond that application i mean you can read the application notice a get credit until the scheme is discovered and then after that if you're trying to put money back into lawyer guidelines range you're not going to get credit for it but that's not that's not what he did here so is the only reason why he didn't get credit this theory that you have about listen if you're putting the money in to avoid detection you should get the credit is that the reason or is the reason that as you're making payments continue the lowing you don't get credit for that and the reason mr socials putting all this money into the accounts to make these receivership payments is because these payments need to come from the receivership account so they need to have the receivership check he needs to look like there's money in receivership accounts so that no one comes on the books and tries to dig in to figure out wait a minute why isn't a this coming from the receivership account that's what he's doing and that's why he doesn't get credit for that but alternatively this court could base it on the district courts finding that in february of two thousand and five he recently should have known the scheme was about to be uncovered not that it was uncovered it certainly wasn't uncovered at that point but that's the time when there's this mediation there's less than three hundred dollars left in the  account he knows that if he doesn't start putting these payments in that he is not someone's going to figure out you know the cookie jar is bare essentially and so he reasonably should have known at that point that people were about to uncover the fraud and at that that's going to knock out the vast majority of it but he also doesn't get credit for the payments before that because that's the money's putting in and taking out right away so it's not like he's actually repaying anyone at that point he's just putting it into keep as he says in this deposition to keep the account open so that the doesn't close the account it's a functional ponzi scheme that's absolutely right there and that money wasn't used to pay the legitimate receiver none of that money was used to pay the legitimate receivership expenses and that's all before february of two thousand and five your honor so i unrelated to the receivership and if you kind of play the role of forensic accountant for julian jump from exhibit exhibit you can see what's going on where he's just putting it in taking it out almost immediately up through two thousand and five and then after that he's just putting in enough to cover all the expenses after that so if he were to get any credit it would really only be for the things after two thousand and five when some of the money he was putting in maybe went towards legitimate receivership expenses as opposed to well it's our position to get any credit i know that you're on it but i guess if if you were to get any credit that would be the credit that he would get but keep in mind we're also talking about intended last year which is what the district court based this on the not actual loss you certainly are entitled to credit for intended loss and i'm not trying to argue that but that's why there's a discrepancy between the two hundred twenty thousand dollars the mr stone things that should be the last amount that's the actual loss yeah but what the district court found is the intended loss was three hundred thousand roughly i just want to explain where the three hundred thirty thousand dollars comes to get this court's determined that and you do get credit for intended loss ok so explain to me why that application which draws this line let's put aside the district for finding that he was on the cusp of discovery and should have known that in february  two thousand and five why doesn't this application which draws a line between payments made after discovery on the husband discovery and what your colleague kind of lowering payments to say why should we say that the loan payments don't count given in furtherance of the fraud because he's trying to avoid detection but in that's not an interpretation of the application note that's a interpretation of intended loss because he doesn't intend these victims to get any of their money back by paying these are ship expenses what he's intending is he's intending to make sure no one realizes there's no money left this court's talked about a little bit about how basically the credit against loss should reward someone who's maybe have a change of heart or whose realize that what they've done is wrong and their intentions change right so i no longer intend to steal every cent i changed my mind and i've decided yeah i want you to get some of the money back that's my intention there's no evidence of that intention in this case and the bottom line it's t he hasn't proved that these were legitimate expenses rather than and a part of the fraudulent scheme that's correct your honor and just quickly touching to the ninety three thousand dollars fees this is an all or nothing proposition is mr stone szell's put it he's entitled to all ninety three thousand or nothing as the district court found it's a little galling that mr socials taking the position that he should get credit for work that he did and stealing from these victims  billed for the times that he prepared these fraudulent statements he billed for the times that he's lolling the attorneys into believing that there's money into the account and he wants credit for that there's no basis in the record for that in the state court appropriately withdrew those fees at the same time it kicks mr stone shell off the receivership at the same time it says you need to comply with my order right so why should a federal court countermand that determination by the state court we absolutely agree with that your honor it certainly wasn't clear error for the district court to accept the st forensic accountant to prepare this document a point of or i'm sorry the defendant chose deposits other in two thousand and four and two thousand and five totaling three hundred five thousand dollars it shows legitimate expenses and in two thousand and five of two hundred one thousand six hundred eighty two dollars those were clearly payments made to cover receivership expenses before anyone was any the wiser as to what was going on just a word about pew pew was based upon interest payments made on a bank note to which several people had access to the banking records and the banking statements it's important to remember that mr social was the only signatory to to this account he's the only one that had access to take out nor the beneficiary or the court no one had access to these records that would have discovered these withdrawals nor the repayment that's why he's entitled to credit for those payments made thank you thank you