most of you i think of veterans that this so you know the rules but the most violated is that we can't hear you so during your argument please stay in the microphone keep your voice now saying loud so we can hear your answer as well as hear your argument you know the red light system and so forth but the main thing is that we have questions for you please answer those questions succinctly that having this there first case united states versus when mr rop morning may please the court and counsel for the government my name's richard roeper i represent the appellant and defendant in this case avon when this is an appeal from the sentencing imposed by judg the forward division in northern district of texas or he impose an up or departure to the maximum sentence possible of thirty six months in a two hundred fifty thousand dollars fine which was twice the original g range as recommended by the probation office and three times they got on range for the fine the case started with the execution of a search warrant of the internal revenue service in the warrant was the defendant's wholesale nail salon salon business that catered to vietnamese nail salon owners throughout the country the government seized in that raid money from bank accounts and monies found in a safe mr wynn on the premises of is a warehouse about three point five million dollars was seized altogether the basis of the search warrant less structuring activity that the i r s to term and from  review of bank accounts when and destruction activity was not from when there was no evidence that when engaged in structuring oh let me ask you a question about that how does it how does does that imply that all the people who were paying him for a nail salon by the way what do you buy for a nail salon where they buying those little fish or were they buying you know like clippers and polish and catering to this group of vietnamese people presumably if it's all over the hundreds of clients how does it happen that all of them are just coincidentally sending in payment checks for ninety nine hundred dollars  maybe part of the reason the reason they had accounts in other cities because a lot of these nail salon businesses dealt with cash and they had to deposit cash i understand that but there's a reason there's no only reason why you either they were always purchasing less than ten thousand dollars worth of goods a couple hundred dollars less or else they were deliberately be positing that in their by engaging in their own sort of tax fraud which i can't fathom why does wasn't it a speculative is new to reasonable inference that's the whole basis of your argument no your honor i don't think it is first off it was only twenty five percent of the whole deposits that were going into his bank accounts only twenty five percent of the deposits that was made were structured and the garrison never they never obtained the bank accounts and this is important of the customers that we're putting in so you don't know you don't have a basis to conclude that there was a cash couldn't prove structuring bottom when because we didn't seize bank accounts and i think it's important well that was their decision i suppose by my point but again they did not object to the forfeiture is that right yes we did well we we agreed him to mount a forfeiture and how much was that one point one million dollars right and what was the basis for the forfeit check the basis of the forfeiture was that there we did not contest the fact that there was structuring going into those accounts in amounts up to one hundred one point one million dollars but that doesn't mean in the in the government could obtain a forfeiture order whether women had any involvement in the structure or not and that's important well that it is his account and if it's his business who's doing the structuring he or his wife or their accountant  why because they're putting money and in an effort to if you follow i still think there's not sufficient evidence to show they are guilty of structuring law but i think it would benefit them because they would be for structuring if the illegal activity is being done by his customers that seems like appropriation of his money well that's what the law provides the ball provides that they can forfeit money it's i understand that but normally they forfeit from the guilty party they don't forfeit from the buy point that was a you agreed to the forfeit cherry but that's because they were going to move to forfeit even more than that but you had a right to defend didn't  yes we had a right to get it but you're on to it didn't matter where the wind was participating in the form or not to allow the government to paint forth but that's what i don't know that's what i don't understand if if i'm a drug dealer and i deposit ninety five hundred dollars and somebodies account and they sell me something right then whoever i purchase let's say the diamond ring for my girlfriend from they so you're saying that the government can go after the ninety five hundred dollars in the seller's account yes the court even if it's a bona fide even if he's a bona fide you know in good faith without knowledge cash and after they seized the money in the bank accounts they began an investigation and they found out that when was involved in tax fraud for the cash not the money that was coming in the bank accounts but rather cash for it was received from walking customers that would come into the to his business and that was the basis for the tax fraud was the do in fact that he wasn't for underreporting cash walking in business that was coming into his customers and that resulted in the tax fraud conviction and and where he agreed that he did not report that he did not pay taxes on approximate lou less than two hundred thousand dollars that upper departure appropriate and even to the point that i think the plea agreement should be drunk rejected because it limits my ability to sin it seems only been three years even  assuming you know there's a range of discretion in the summer from your standpoint you would argue at best at worst just big prize at the outer limits of whatever that is  none the less if destructuring is over here which as you say from your standpoint you know and when is unaware of it but there's no doubting that it occurred so it's over here there's a structure et activity he had a meeting a bear or assist in a structure in some way and there's just no evidence of it in other contexts not like this in other cases with drugs or whatever i mean you know we  do the deliberate ignorance instruction we say well ok you can't look the other way while this stuff is happening and then later say well i didn't know about it i mean we charge on deliberative and i'm that sameness of the deliberative ok but i'm just saying again given the mil similarity here you might say well this is intrinsic to the whole deal because it's all instructions i'm just trying to get to where i have promised a new argument just trying to get to where the reversible pisco is speculative and i when was it were see it was just a letter that was found in the fall that's the state of the record they never showed the letter was mailed there was they never actually in a better they never the agent got up on the stand and said that they didn't talk to anybody about it they did we don't know we just have a letter that came from the records of the bank but i even that i don't think that's sufficient now there's one thing i want to point out that thinks important in and in his three sixty three thirteen sixty three of the record and it shows you i think we're judgment bride was coming from he east he cites from a document that says case summary that was prepared by the i r s an essentially what he did was after the government refused to go along with the upward departure he ordered the government to turn over the files and he poured through the files looking for evidence to support his findings and he looks at a result of his scratching activities that never occurred and that's really poor i hope the court considers that the fact of the matter is there was no admission by the million there was no evidence to in the district court the government was of the opinion that this a court that a guideline sentence was appropriate that's what we advocated to the district court ultimately the court disagreed that's not what the question is on appeal the question is courts factual findings if they are plausible in mind of the record regardless of whether the court itself would have reached a different conclusion now looking at the i didn't hear there's no way for me to include  was clearly erroneous or impossible for the court to conclude structuring just to look at evidence quite briefly with three elements that were required in the structuring in this case that would have been directing the customers to structure this deposit in the third being that those deposits were structured with the purpose of avoiding those reporting requirements now the third element is it i mean so that i guess that evidence is susceptible to take that evidence that it was sent i don't believe that was in the pilot and they found in the big file i don't think they presented by registered mail i don't think there's any evidence that that but i don't think there needs to be i mean the question is do we think that you know the court could look at that letter it was in the bank's file is clearly written to him and the court could say could could either infirm that he did receive it or infer that maybe it got lost in the mail or wasn't actually sent in that was  the main one being that after the date of that letter which was june of two thousand and twelve five days after the date on that letter he goes to the secretary of state in the state of texas and changes the name of his business substantially to from novel material goods to a bond materials and then several days after that he goes to the base opens new accounts under new names at chase and i wells fargo and all the sudden all the structure activity that was happening in those other accounts under one name is now happening in new counts under a different name of that evidence tends to suggest and the timing can suggest he did receive that letter and that was a respons and his actively engaging in the structuring activities i'm there's a couple of a couple things can one be inferred simply just from the circumstances of the fact that you have multiple bank accounts multiple customers in multiple parts of the country unrelated to one another all of them making these deposits into mr wins accounts what mr went on and benefit he gets is that those deposits aren't being recorded deposits in his bank accounts and he doesn't have to report it if my understanding is that if the bank file the currency transaction report that that information is available to the higher us when he finds that when he files his taxes in two thousand and eleven or two thousand and ten and says he made five million when really he made ten million there's no way that iras to know that that's not true absent you know with an auditor subpoena into his records but just as a general matter if it the other here with me three million four million but i don't know that they were those were directly i think it's stands to reason it always has to be because that was you know five million dollars in structure deposits what was the evidence third of his proceeds are are being structured i'm so i think that necessarily on between and that no i mean other than the fact that i think just by making that deduction that it's a certain percentage of his income that's he's not reporting in a certain is dealing with this and insulating him from knowledge so no that wasn't he he did have a c p a who handled his finances but with respect to his cash deposit with the customers were making supposedly installment payments and making the and exhibit thirty six as a good example of these bank records it's pretty staggering when you see or nine thousand our deposit in one day he tells the agent i'm getting phone calls every time one of these deposit is made i mean i don't see how he possibly couldn't have known or been insulated from that why didn't i mean why wouldn't this have been enough for a jury to convict him of structuring you're talking millions of dollars and yet your brief says which i absolutely do not understand he under reported gross business receipts by over three million for two thousand and ten and almost five million for two thousand and eleven this caused a tax loss to the service of eleven thousand nine hundred two for tax year two thousand and ten and eighty thousand one ninety seven for it for two thousand and eleven well you know i make a lot my husband  why it's not that much you know why why the display it is disparity between the amount under reported in the actual tax liability is that this is ultimately just at a fairly low margin business i mean what he was charging his customers was not particularly high and it was not that much higher than what his actual costs were so i think that's why you see these huge numbers of underreporting in relatively smaller numbers on liability that i'm next question the way you those is that these conversations were happening before before the sentencing hearing before the case agents got up and testified and in the trial attorney the trial usa in when he's being asked by the district who are why are you pursuing this how are the number of reasons and mine and he says well evidence i'm not sure that he ever came out so much and said that at the large part of the questioning that was going on was was why did he target and he said we can't prove it beyond a reasonable doubt i'm not sure that he ever said in so many words you can't prove it by but anyway i think there's a difference even if he did say that i think there's a difference between saying i'm not going to go forward and tell and say to the court that the only evidence on one point is an inferential step as as plausible as that step may be suggesting the u s attorney didn't confirm with his own agents well you know we didn't put the it isn't on there is a car called the witnesses itself we didn't and you know we were i think aware of what the general testimony would be from the case his record not looking to get on through this or should i do it and ultimately he felt that more evidence would need to be gathered and we need to interview the customers if we want to pursue criminal charges and ultimately thought that wasn't a good use of prosecutor of resources the kind of conduct from there so i mean i think he knows essentially what the agents are going to say is special because it's in the p s r but ultimately he wasn't looking to prove structuring so i think he's speaking to some extent  you know based on not having not having reviewed all the evidence with an eye toward how can i prove that and how but ultimately whether or not he thought the evidence was sufficient is really not relevant to the determination on appeal of whether it was repeated in the same high volume high frequency nine thousand out of pocket in the new account but i don't think there's anything in the record to suggest that chase used to somehow crop but when it's investigating possible structuring an account that it will cross reference signatories on those accounts under different names to see if they were the same person i mean i don't that's something that one that misrepresents has and i think that is entirely speculative it's not supported by the record so and this is undisputed was the day that he went to the secretary of state and change the name of his business and then a week or so after that was the date and you can see that in exhibit thirty six was when the new accounts were open and the structuring minimum a mandatory minimum for structuring violation i don't know the answer to that on i'm sorry i don't know that thought would be the case that i believe the estimation that the parties reached at the district court was that it would change the noxon that wouldn't have changed the guideline range substantially but i guess i don't i haven't researched and looked at so i don't know but he does mention and there were two factors two improper factors that the court looked at on that one being the pre two thousand and ten tax fraud and the other being the fact that the rest of that three point five million dollars was subject to forfeit besides two pages in the record search in thirty eight and thirteen sixty one those pages do not support the fact that the district court relied on those in fact this report disclaimed reliance on those of us disagree that it was not relying on those things and that it couldn't draw conclusions based on  speculation that it was even mail but the knowledge is more than that it has to show that and this is unlike most of the cases you deal with in the circuit where the person that's receiving the money had nothing to do with the bank account where the money was coming from and in the prosecutor who pointed out the judgment brought for one of the reasons he thought when the lead was not guilty because they didn't pull the bank accounts so they wouldn't knowledge that there was this in the amount of cash that they were going out in structuring to avoid the c t r l an argument that he would not have to report he might not have reported income on the under ten thousand dollars cash deposit well the record is clear that none of the money that flowed in those accounts that allegedly were structured was part of the basis for the tax fraud the tax fraud came from cash customers that were coming in to his business w i know that that that was not the basis for the tax fraud charge we know that so i think the inference is that it would have been on his returns that that was going to his accounting that man that argument ridgeley made by the government is they pivoted to another bank they didn't do that it was in the very same bind the reason they changed banks was the son their son that was a part owner wanted to go to medical school instead of staying in the family business so they had to set up a new a new business arrangement in we have a new business you got to have a new corporation you can't use the same bank again but they didn't change banks it was the very same bank now the stretching  activity in the accounts all the activity diminished because of the fact that the that the defendant lost an exclusive distributorship to nails supplies in really his cash he is income all together was going down and you can see that see that from the charging including in their records serves the bottom line is it and i want to respond well i guess i'm going to i can see that you know there it is it is but the fact of the matter is they didn't move they didn't change and thank the banks would have still been able to look at the volume of activity in the account in when the nine you can draw an inference when there's no evidence is to show anything the the you know support that the inference in what it shows they were started two million dollars in total deposits made into those bank accounts thirteen million dollars there isn't any evidence they ever called about any of this and it was only one four point one million