good morning and we have placed the court bianca's who came for the united states this appeal arises from a twenty eight million dollars securities an accounting thought in which the two defendants who are appealing personally directed employees of their company to falsify sales reports invoices bills of lading in order to prop up the company's stock price and in which the two defendants also engaged in a separate embezzlement scheme in which they pocketed over two million dollars the district court in this case automatically determined that their sentencing guideline range was from seventy to eighty seven months and yet and that's a range that was actually less than the potential exposure contained in the plea agreements that both defendants entered into record nevertheless went on to rely hurst really on three relatively minor factors one of which was already accounted for fully by the guidelines to reduce the guideline to reduce the sentence by asking the sixty six percent or two thirds the issue presented by this appeal is whether such a sentence which deviated from the guidelines to an extent that was unjustified by the reasons provided by the district court was unreasonable and the government's position that it is all of those courts the other circuit courts that have confronted similar issues to the one in this case have adopted a relatively honor and this court has explicitly reserved the question of what kind of weight the guideline should play in reasonableness review not so sure that's right well it seems to me it's  volatile was a case that involved a district court saying that he was going to attack a presumption of weight at the district court level to the guidelines and then it was up to the defendant the defendant has the burden in order to justify why a honor and assuming that's a valid does become the law of this circuit savalas nevertheless i think case that deals with the presumption or a district court stating that there was a presumption of guidelines way past the district court level not a lot of language about addressed the question of whether at the district court level this is what kind wade should be provided the guidelines which is which is not only a third actor that is required to be considered under thirty five fifty three a but also that's repeated essentially by thirty five fifty three eighty six the standard provision dealing with avoiding unwarranted disparities between defendants second your honor the vaal is a case that dealt with  methodology if you will that should be applied by sentencing courts it did not address the question of what kind of weight the guideline should play in structuring reasonableness review and now we want to have not only confusing is a reasonable and unreasonable sentence the guard lines because there's one factor under thirty five fifty three eight that are quantitative necessarily form not only as a starting point to borrow some of the phraseology from the volatile case but they also have is that the further the district court deviates from the standard in the guidelines the more compelling it's just a fact needs to be language in this court's own decisions in the many whether case in the next case and in the c supports this general principle in all of those cases this court distinguish between guideline and non guideline sentences and emphasized i think that's the language and carty them portions of a that's the provision of the code that explicitly requires the district judge to provide specific reasons for imposing a sentence outside without lines all of those bases and all of those support the proposition that the government is urging this court to adopt in this case and if this court has adopt that principle i think that if you look at the reasons provided by the district judge and in reducing the sentence in this case possibly sixty six percent the sentencing plea cannot stand in this case should be remanded the three factors cited by the district judge where health age lack of criminal history with respect a lack of criminal history first of fact engaged in a separate fraud previously at their prior employer c p i so it's unclear what will this factor played and second of all it's a factor that was fully accounted for by the guidelines by position anything accounted for in the guidelines has the counterpoint grounds you must follow the guidelines on last you get out of the normal reach of the guidelines you're just back to talking about guideline departure argument and that's really stablish in the guidelines for all practical purposes and that the vala did say the guidelines as a starting point are prior case and said the same thing that's starting point the district but the argument you made earlier on and the argument you're making now are essentially well the guidelines remain a requirement on the district unless a district judge can find something that's not covered by the guidelines and deviate on that basis that sounds an awful lot like real stablish in pre book law that's not our intent to judge fernandez on a beer intent but it's not like you're saying well then let me clarify what i'm saying we guidelines and the fact that the district judge failed to consider what i thought in terms of thirty five fifty three a six provision dealing with unwarranted disparities between defendants  defendant can take into account a factor that's already considered accounted for by the guidelines and and use that under booker to deviate from the guidelines even more government has no quibble with that but the reason that's the reason that the guidelines mu objectively implement the mandate of thirty five fifty three eighty six but objective is an interesting concept once you have booker because the court says we're doing resembles review which sounds something like abuse of discretion at their age i'm looking at their health i think all the things taken together mean that there's a different point within the reasonable us territory the guidelines are one yes and i've considered that but i think all these things start with another reasonable point and that's one of the you know our question is is that a reasonable point tonight that the guidelines never talk about a do they ever talk about criminal history  etc seems to me your honor my discussion about the fact that the guidelines take into account the criminal history of defendants is relevant only to the extent that it informs this court's determination as to whether the sentence was reasonable the government is not saying that whenever a district judge departs or deviates on the basis of lack of criminal history as it did in this case that that sentence itself factor becomes and reasonable  but it's it informs this court's determination and other courts like the first circuit and the third and the second circuit have both talked about judgment is the difference between relying on factors that are particular to the defendants before the history category provisions ok i'm in charge of the ring before it couldn't drop in criminal history because they don't take into account in the criminal history they say that's not part of his criminal history exactly your honor and that's really the government's point so anything that you did wrong in the past is not taken into account in your criminal history is not sufficient grounds is of is not a sufficient grounds the record to do so that's that's absolutely correct and the reason that i bring up i'm going to essentially double count that i'm going to not only apply the guidelines which take into account that they thought it had a criminal history category one i was going to use that as a basis for deviating further from the guidelines in the amount of approximately sixty six percent problem for this court to consider reasonable in his review which is that first of all how much weight is really should be placed on a factor that's already taken into account by that jack of guidelines and that now  when taking into account that factor would presumably control it with the mandate of thirty five fifty three eight secs number one that's just more in that and a logical top when you say wait things don't him this has wa my lack of criminal history doesn't have any weight so what do you mean by how much weight the district judge can consider objectively objectively i can tell you the weight of this tell me the objective that should be the standard but there's not an algorithm whereby this court needs to four sentences that deviate greater than fifty percent for example need to provide x number of reasons that's not what the government's arguing so that the general principle your honor is simply that the greater the deviation in this case the deviation was dramatic there have to be correspondingly dramatic and compelling reasons for that departure probably many whether for example we suggested that the the other cases that's in the money whether a case in the money where the case the district court cited other cases in which there had been similar departures in this case there was no finding no opinion offered by the district judge that in other similar cases with other there was no such finding with respect to and that goes to that that relates to all of the factors that the district just relied on with respect to age there was no finding as to first of all whether it was the age at the time of the fence or at the time of the sentenc the district court as to whether their health conditions given their ages were any worse or better than those of similarly situated defendants the record is bereft of any explanation and the problem is not only did the district judge fail to explain the relevance of these factors that have a light on it completely devalued thirty five fifty three a sex it didn't even mention that factor in this court is that district courts don't have to go through every single know that the district judge paid no heed to that and we said they don't have to talk about each one so you're suggesting that we should infer it was thrown out the window because you think that the disparity is too great but you are because she mentioned almost all  correctly calculate the advisory guidelines and second apply the mandatory factors under thirty five fifty three a of which the guidelines are just one of several different factors and in the last year since booker was decided this court has provided some ground rules about how the district court should go about conducting that process and in cases like the many weather case which came out just a few days before our brief in this case and then again recently in the cardi case which came out i think just a week ago today and in those cases the court provided guidance on the need for the district courts to especially make a record to set forth at least some indication of the grounds for in the sense that the court imposed and specifically in the cardi case with judge builders opinion he said that the district courts need to provide at least quote some articulation and explanation of the reasoning behind that sentencing selection you know and it's interesting because there's a little bit of tension between that directive and the fact that on the other hand both in this circuit and in circuits all across the country the courts have been saying almost since the day after booker that it's ok we don't need the district courts to to become score what turned out to be a departure from nearly two years in prison for probation and that was upheld as reasonable i think it's also important to well it isn't just stating grounds and he made specific detailed law granted it was the third time around for that case so it's an exceptional case we don't have anything in that kind of detail here we have more general observations of that yeah i understand the problems everybody's having with the case law it's not like everything's pointing in the same direction but here we have these observations help than age but without any articulation of what it is about the health of these individuals that explains this sentence whether or not it's calculated in comparison with the guidelines that is which may not be presumptive but is a starting point whatever that means and so what is it what are we supposed to look at the determine how the age and health of these people and  the lack of criminal history or lack of background relates to what the government keeps wanting to is what other people to get and sentenced for similar offenses and really that's what the guidelines are supposed to be and a large part calculated based upon so if there's no explanation from the judge as to why this this unique circumstance of this individual points in this direction in this much weight or this much factor what are we revealing well i appreciate that your honor i think and the impact that that has the unique impact that has on a sixty year old person's health or aging process the department of justice said that sending a sixty year old person into prison i mean this is this is all on himself well going like you know to the extent they say anything at all the guidelines would indicate age is just an ordinarily not a factor in any heinecke i don't know if you could argue that it's a whole lot better for somebody already spent most of their life in the real world to go to prison than it is to private somebody who's in or how do you make allowance for with the guidelines actually yes i think after booker the judge and this judge just cooper certainly did consult the guidelines and she did so very carefully  she was not as after for her she was not constrained by the extraordinary sort of showing that was required prior to booker which believe me we attempted in many many cases of the last twenty years she was that and say is that reasonable by itself here i think all three of them age and health and the lack of prior criminal history all meshed together and created a very significant basis for the sense that  the fact that in this was true and they now says even before booker came out that the lack of criminal history in a person of aids in their fifty's at the time of the offense in this case is more significant than the lack of criminal history and somebody who hasn't been around so long and who hasn't had as much histories of italy on that and do so with the reference to this case because in some ways it surprised me a little bit that this was considered i'll use the language for lack of something else a departure or a downward factor here most people convicted of white collar offenses don't have a long rap sheet this is the first time they're picked up and they're not likely to do it again because the spotlight is on  in this case the criminal charges really encompass two separate episodes of misconduct and there were suggestions which the government alluded to in its argument that there was some some some stuff in the closet from the past so that it's hard to say in this case with whatever reason on this review entails that these are people that are squeaky clean but for one unfortunate left and that's luke is just not to be considered because  record didn't suggest there was just one blow up there were at least two that they were convicted of so how does this case justify a departure down retype stems a lower than typical sentence because of their lack of criminal history i think first of all i want to say that the government counsel indicated that the court found that they committed fraud in this prior uncharged incident which incidentally occurred fifteen years earlier didn't result you know allegations of prior contact but i think as i said before the fact if they were sixteen years old that this was essentially their first offense the two different offenses in this case were with the same parties and the same it was really i don't think you were two distinct and separate sort of crimes so it really was viewed by properly by the district court as their first offense after fifty plus years of law some of the most unbelievable character letters and i know it's people think it's easy to get character is for all the hon or whoever it doesn't matter but in this case it was unlike anything we've ever seen before these are truly remarkable governmental disagree that until the problem that they ran into in this case and we set out why they ran into that problem these are true two highly highly extraordinary people and i think the  court took that into account like a criminal history in any case i think is a very very significant that at the start of a sample of we're dealing with all because in answering this lack of criminal history you've you've elected upon something which may be related in terms of  sterling character letters but that's not something the judge actually pointed to as the reason for her sentence they tied together what kind of people are they like to the extent that the law requires a more specific articulation in our cases cames and she imposed the sentence so it's a little bit of after the fact can you really say that that her articulation here let's just go and look at those sterling character references as a justification for a sentence when she didn't make reference to well it's i think so and i think that in terms of judicial economy of the just record  where is the line going to be drawn how much a lizard ation is required i think it's particularly in this case where by the end of the case the court of the parties were talking in shorthand to each other because the the issues have been brief so thoroughly that i think you can fairly infer that when the judge set forth those three very bedrock factors that she wasn't doing it in a factual vacuum she was doing it based on judge to look at that she did identify on like in some of the other cases like you carty the judge didn't even identify what he or she was looking at here she did and the court has the record of what the basis of those factors were it was like the it was complete it was compelling and i submit your honor that they're actually doing that but here's here's where i have my problem if we say ok she doesn't have to elaborate but if what she gives us isn't what you give us when i asked for an explanation as to why it's reasonable let's suggest that well do we just assume that you thinking the right things in the background i mean this isn't just a requirement to articulate that we're to judge reasonable most of all we need to know what the basis for deciding and again how to use the same to have figured out what the new language is going to be this departure downward or this sentence that seems less than other people were getting for the same offense what's exceptional about these people and share technology three things i'm not sure how exceptional those characteristics are when i ask you about it you start telling me about a fourth which she didn't talk about now maybe she should be required to talk about of the how can we weigh that if if it's not on the record well i was talking  i was talking about a fourth because i was talking about it as a basis for of a lack of criminal history thirty five fifty three a starts off of the introduction as you look at the history characteristics of the defendant this is a pro she did and when the government says no prior records so what it's already considered under the guidelines i think that you see this place that but basic argument here it's more than a twenty one year old young man who doesn't have a criminal history who's got no family attachments is sort of just out there in the world here i think it's clear that the court took that into account under that factor that it's all too confusing finding with respect to the securities restitution issue then there was some colloquy over which shifted question i don't understand how the same it's too confusing and complicated to figure out finding can apply when there are only two victims who are clearly identif and when there is an admission in the plea agreement that the amount of the loss is at least one point one million dollars which apparently this district judge found was the correct statement early on there the two exceptions to the to the mandatory restitution one was the number of identifiable victims the other was the complexity and of the the effect it would have in the sense the process to figure it out with respect to  evidence is there well i think they're still alive ready to receive the money which is the evidence that they did then i'm well i think i think there are some other issues one the court has to find an identifiable victim and to the amount of restitution to one point one million of minutes of the loss of one point one million as to neukom and one point one million is the act rate that when you come on the date of sentencing one of the court had half the court had eight to whom it may concern letter from an send one point one million dollars to this entity presumably goes in the pocket of mr shiny he indicated in the f b i through two that was just him and his father who now have the company and and he's not the right victim because he's not out anything so i think the government had to establish more in their burden of proof to say here are the people who actually lost money who are out of pocket you tell me in corporations you have to p was react to high paying your taxes in california happens all the time because in the summer activity going forward and they just forgot to pay their taxes and i understand why you think you need to well anyway you pay the taxes you you make the company li the companies now live in entitled to collect things you're on i think the court would be entitled to look behind and say who actually lost the money and what pocket will this money go to also i would point out that there was a significant disagreement even though there was a an amount of lost stated there was disagreement as to whether it was embezzler versus alone what may have been outstanding at that point none of those issues were great were addressed by the government i'd also move on to the ak trade issue actuated i think is even even more interesting that athlete went into liquidation so all we had on accurate was a letter saying send checks here there was no indication as to the existed those letters are almost a year old whether x rayed liquidation trust the insisted that it was in june the year before didn't know how much was actually owed x rayed if anything if x rated being reimbursed by the insurance company maybe the insurance companies the broker victim for restitution purposes the point of restitution obviously is to get the cash in the hands of those people who actually lost it and i think there was an issue and i think the court could say we're nineteen months after the change of  plea the sense has been delayed one thousand months this is too complex to figure it out we have to bring all these parties and i would point out none of them showed up for sentencing and they didn't fill out the victim impact statements ok thank you for your entry question yawners with respect to restitution none of the concerns and issues that were just raised by mr hand i were issues that were part of the district judges findings i think that if you look at the record either the district judge simply didn't make findings with respect to the restitution to the to victims or the findings that it did make are just simply not supported by the record the government did support i submit ample documentation with respect let restitution i'd like to turn if i may to really the first question you judge really discussed this issue have have held that there are two aspects to reste must procedural and substantive and i think that there's nothing in any of this court's precedents that indicate that simply stating reasons no matter how flimsy those reasons are no matter how unexplained they are that simply because a district judge goes on with reasons of a requisite or a certain number or parks to a certain length that simply because of that the sentence can be upheld