chambers at little rock and i would like to thank you judge wright for coming all the way from arkansas to help us decide these cases this week thank you in the first case looks like you're ready to go as united states of america my name is amy while ny and here representing samuel question lang's as your honour's read the briefs our main argument to begin with is the sentencing issue the tester court in this case clearly erred on two levels two very distinct very significant as far as mr krishna a sentence goes the first is the last amount the method in which the district court determined last mount is pretty uncomprehensible when you look at the record and you look at what happened in this case the court use what is a comparative store methodology which was complete speculation on the one hand that the other stores were actually even comparable but also what they came up with had nothing to with loss in this case what what the court did was they said oh there's these other comparable stores are nearby like a mile and a half away three miles away but there are small stores that sell food stamp forwards and who are required to use the because under the net loss theory which is required your honor asked if they were required yes they're required and this court has used it before and approved stamp cases because it's the government benefit rule which is a specific rule under three  to be one point one and under that rule you find the net loss which means you take into account legitimate sales the comparable store method not only had nothing to do with loss in this case but it didn't at all in all take into consideration legitimate sales and i'd like to point out to the court where they knew they were acquired it's required to take into account legitimate sales because it's now it's not just all the abt transactions that took place at a store but some of those  transactions we absolutely know were legitimate and the thing that's ironic in this case is of the twelve be it people that were interviewed two of them that showed up in the pre sentence report both had legitimate sales all eighteen undercover operations all included legitimate sales and the sentencing transaction that took that that was described at sentencing and it's i'm sorry the b e t transaction it was described at sentencing that also had a legitimate sale and in fact and she her sale the biggest thing that happened was she bought three hundred dollars worth of meat out of a seven hundred dollars sale so all of the court use that method to determine the loss than the loss  what how would it how would it work and bring it all across the murders and have them tell us how much money they got back in return for the use of their cars or her power would work no your honor there's several different ways that the courts have determined using the net loss and i've set forth a different cases and my brief but one of the ways they could have done it in this case is one of the ways that would have automatically changed the guidelines was just say a certain percentage of his sales in this case is what the evidence appeared to be was that he took back forty percent and he gave to the customer sixty percent neither some of it was good and some of it was money but if you just took figures and you just said ok well not all of it was bad and six in forty percent he kept in sixty percent he didn't keep that and he used the sixty percent method he's under three point five million or do you want to get the forty in the sixty just on clear how do we extrapolate forty and sixty from both evidence of what people said well that was the way we normally did it i mean normally we'd go in and you know that's our set up was he would keep forty percent and that's born out by the meat sale i mean there are that many sales in this record we were a lot for your client didn't have very good records either didn't he have all the bank records the government had so in your honor points out yes we have bank records that's a different way that the court could have made a determination some of these cases they it's hard i mean you can't just go comparable sales growth subtract this is easy with this in the computer and they actually went through bank records of the person who they were going to be sentencing and said well let's look at what really was the law in a net loss let's really where sales were and they'd they'd look at how much inventory had and how much they abt and they make a comparison they go through bank robbers they talk to people they would look at customers they look at it you know what was being done here you have you know a sales honor when you make a reasonable estimate one thing there has to be sure it can't be speculative and it can't be based on lack of credible reliable evidence what's wrong with the combat there are several things wrong in this case and where it's wrong with the comparable store it doesn't give you anything all it tells you is all these other stores had abt transactions so did you it doesn't take into account legitimate sales which is required and it doesn't really give you a figure that has anything to do with  they just look at the other stores that examined snap transaction records or took in the consideration of testimony it took in the consideration mr crew shoes on their application the participate in the program i mean the court looked at a lot of other things other than the soil's comparables oils that look not in determining loss because you know you might have thought about it i mean i think about you know all these sales and i'm going to think about legitimate south but that wasn't factored in the only thing that was factored in was there were these other stores that were about the same size it starts off for months and i would like to point out here to your honor that over a myth of a million dollars worth of sales were before those other stores even more in existence programs they're adding at just mr kush ways sales and those are also for a three year period before mitt there was any evidence that he was involved in any fraud because they didn't start their investigation until march of two thousand and fifteen but wasn't the point though of the comparable stores comparison to give mr to a credit for legitimate salesmen isn't that the idea let's find some stores that are not under investigation i understand governments have had a hard time finding stores one under investigation but let's find some that are under investigation see what their normal e v t sales arm will give khushwant a credit for those but say it doesn't really mean anything all that showed is or how much business do they have mr bush way had a big store he was in a different area and he didn't have much inventory in the store according to time they came in and now your honor the time they came in there was not much of a deal he estimated his his snaps ailsa be twenty five thousand dollars a year and they over over a four year period they were grossly in excess  anything that was what this showed and you can't come up with a government benefit analysis like that what is this is really a white to a way maybe not the way you want but it is stores legitimate sales and giving him as if he had credit for that amount no matter what they did was they added up all the abt sales and they took the average abt sales and they said how many more him with it i mean this is my point i mean like a did they look at non fraudster stores they look at those abt sales and they assume a let's you know let's just give coos way the credit for what he would have done had he not been a  they are looking at something that doesn't have anything to do with this case and it's speculative as to the what the number has anything to do with and the only last thing i'll say about it is that this is the kind of an see if somebody is engaging in fraud in fact this is been alice's they did when they said oh we see he's got more bt sales than any other store so we're going to go investigate him that's fine that is appropriate that's what you use a comparative store for but then instead of digging down and determining what the actual loss was it really wasn't that they saw their wages and use that and you can't do that that's not the way you're supposed to do the analysis ok i'd also like to argue to  still have time the other issue of role in the offense it's very clear that under the law you are required to show supervisory authority over the other people and that just didn't exist here and as was argued before to the district court there are customers who came in the store weren't controlled by him they just came other cases in which the supervisory roles been applied across the board i still haven't found a different case will the government that is what they say but that's not when you read it that's not what happened i mean i'm fortunately for the prosecutor he didn't ask that he didn't say to the judge well would you to impose the same sentence if you had not made this determination about roll or made t e variance dowered he didn't say that and said he said is it fair to say your honor would have reached this conclusion regardless of whether the role unhandsome an error applied or not while this conclusion was he talking about he started talking about a variance the judge judge was saying bury downward but what about what about the next sentence and maybe you'll tell me why i'm misreading this but he says the judge says the main thing i want to stress here is that i just don't think that this four level enhanced money even though i found it is something i would send some other rights after saying like i'm not going to use it right that didn't spend six sentences talking about my conclusion about variance and somebody asked me would you have reached back this conclusion i would have thought he was talking about the variance i want to talk about sentence and it's at least nebulous or judge and it's important this is four levels this isn't even just a two level i mean that's so let me just ask you this about variance and i'm sure i'm misunderstanding something but in the sense that i just read you refer to you were talking and you said this is about a four level answer but the judge says let me just make clear i'm not and right right now he's saying it was a varying downward so that he wouldn't have him be sentenced under that so he found it which is i don't really understand why the judge was doing this ok it's not totally clear but i think is more like i feel bad i think he's that but i feel bad is that but he says the power level enhanced mode which is the thing we're talking about is not something i would sentence him under he did i mean he he did find the four level and he said even though i found it right i'm in a very under ok because i just is essentially saying i just don't feel good about this but the point is that and the reason why this was so harmful is that he thought this man was a guy who was entitle to a poor level that's like way up to this kingpin this is kingpin territory up there and he thought this guy's a king if this was a buyer seller he should have gotten the floor level and if the judge had known he wasn't a kingpin of anything he was a man in the store with customers then the judge would have looked at this case entirely differently and very court counsel my name is trevor wilmont it's my privilege to represent the united states in this case your honor i'd like to begin with the discussion on last since that seems to be where the court's been most of the time your time questioning mr coo shoes attorney honour's the district court did not commit clear error in finding that the loss amount reasonably estimated a loss amount to mr crewe shoes five year snap fraud was approximately five point two million dollars the government argues that that  finding that was based on specific and reliable evidence as the law requires and it was it was supported by that evidence here and to begin with the guidelines in this concept of the government benefits rule the government's interpretation of it a simple mathematical formula at the end of the day you take total snap you less that by a legitimate snap and you're left with loss and that was the method that was used here because the question is what how  factor legitimate loss we knew that the total snap was about five point four million dollars the method used here by the government to determine legitimate snap was an average store comparison for stores within  radius of mr coo she was katie metro store stores that were selected because there was no indication of fraudulent snap transactions at those stores and stores that were selected because they were of a similar size  are the stores you chose don't have any connection to the record this case why sort of go so far afield you know why wasn't there something you could do with the evidence with respect to mr coo to a store itself she said you had the bank records why isn't that a good place to start well firstly you're on araa the record of what was at mr crewe shoe store the kiddie measure was very sparse during the search warrant was executed there were no records there were no receipts or invoices found there was evidence in the record that over the course the agents or valence there was no deliveries there was never a time that the agents all stocking going on so this there was no way to reasonably arrive at an estimate of legitimate sales from mr crewe shews own records and what about the bank records there's i don't know in this record that we have them there's a statement that the prosecutor said we have the bank records assuming that those bank records could have been analyzed and i don't know the reason for that but it's sort of besides the point  to respectfully because we're still trying to find a reasonable estimate of the loss at the end of the day and given the state of mr crew shoes affairs as they were when the search warrant was executed i think it was reasonable under the circumstances and not clear error for the court to rely on the average stores to say yes i guess i'm just curious when i hear bank records i guess i sort of like think of my own and i'm wondering like what the bank records would have shown sort of maybe there's an easy answer to this how would they have the name but i wouldn't how would you been able to distinguish show clearly what was purchased and what was not but what we know about the facts of the case from the search warrant is there's no indication that food was regularly being purchased that off so there's no i've been get some thinking about my own wells fargo statement and it just says you know it might say you know e t transaction at c v s for sixty seven dollars but it can you move from that to like what actually happened inside the store that's what i'm trying to figure out i don't know how you'd be able to make that that calculation  a bank records theory assuming that there were the bank records were to show purchases from a food wholesaler i believe the theory would be you can take the aggregate of all of that bank statement activity in order to arrive at how much misted mr coo should buy wholesale for the food and we can use that as a as an to estimate the lead the legitimate sales and the government benefits rule formulation but compared to that i don't think that the method employed by the government here i don't believe there's clear error to show that it was not a reasonable estimate of the loss it was based on specific evidence the selection of the stores was intentionally made small stores nearby no suspicion of fraud square footage wise and sales wise they were reasonable compared to mr who should store and in addition to being specific there was indication in the record that the number that was arrived at approximately a little over one hundred thousand dollars as the average of the stores over all of these years that that number was reliable because the the the government for lack of a better term checked the math right because they didn't just look at the average of these four stores they looked at the whole numbers of the same four stores so they're doing an average and then sort of  a some number and then they're looking at the government looked at and presented evidence of the state average for other small stores on the national average for other small snap stores and these numbers all show looking at the other stores that's the government benefits disagrees judge wilson this court has never held on a government benefits fraud case and i'm not aware of any circuit court holding that the government that the government must use an inventory type method to arrive at the last amount and indeed there's a number of cases cited in the briefs in this case where courts have affirmed reasonable estimates that we're relying on average store comparisons are we kind of bickering over terminology here i mean can we agree that a net loss methodology is required under the government benefits rule and now let's talk about how do you arrive at last she says you've got to use records you say you can use comparative still in comparative stores i would agree with that judge newsome again i believe that the formula would be total snap minus legitimate snap equals loss and i believe that the question really is how are we getting at legitimate how riving that are a reasonable estimate of legitimate snap and the government use an average of nearby stores and then check that number against other stores in the area in the state in the country and then mr crewe shoes own estimate of what he believed he would set but miss while as is presented the court is that alternative way to get at legitimate sales using inventory using vendor analysis using bank records so there are two different ways to look at that same critical piece your honor and i believe that the that the alternatives presented by miss while don't establish that the method used here was an reasonable in fact the defendant estimates would be less reliable and plainly not feasible if the district court were to use that method for a loss in this case the d d do you or does the government agree that ideally if mr couey had had a spotless record lots of invoices lots of you know inventory records of inventory that that would be ideally a better way to reconstruct legitimate sales in a case like this respectfully judge newsome i don't think i could say that there would be one ideal versus another  think it would have to turn on the facts of a particular case if the bank records were to prove to be very if they didn't show anything significant if they were really vague if there was you know then that would not be a case where we really ought to focus on the vendor method or the inventory method or the bank records assigned to say that it's not reasonable to use that method when it is available and i believe there was a recent case here in the eleventh circuit the the loss looked at the vendor sales they looked at the cost of goods sale sold and that was a reasonable way to arrive at the legitimate six snap but we don't have those facts here so the government was searched for a way and found a reasonable way to arrive at a loss estimate was legitimate sales the use of alternatives in this case again was not feasible the government would argue for example a ms well talks about the case of  the interviewed witness mr tuchman who said that she had had gone into the store conducted about a seven hundred dollar transaction of which three hundred dollars was for me and the remainder was split amongst her and misc i believe it would be  unreasonable to extrapolate from that won transaction that this was that this proportion that this number is what mr coo she was engaged in over the course of five years and how many witnesses were there like her gave this kind of testimony we extrapolated from one witness or where there are dozens or there were believe that the p s r around or so approximately a dozen interview witnesses were interviewed however the p s r also only talks about two or three witnesses specifically  but based on that record that we have that the court has before it the tuchman transaction this three hundred dollars with the meat was an anomaly there is for example mr peta who says that she would typically get chips in a drink and that was when she was conducting these transactions that katie metro there was miss star who said she would just get enough to make it look like she was buying something the use see the when indicate the metro approximately eight hundred times and this is in the p s r as well as conducting  transactions for a couple two hundred dollars say and the agents buying chips and a drink or something like that i mean very small amounts of food from the u c over this period of time and from the witnesses that we do know about it's also consistent your honour's with the testimony of the surveillance the testimony about the surveillance you'll recall the agent said that she had a computer that allowed her to look at snap transactions in real time and she would see people go into the store with personal  nothing and come out with a small bag something that would while the computer showed that there was a two hundred dollar to a seven hundred dollar trick snap transaction but there was clearly in her opinion there was nothing to suggest that a three hundred dollars that's almost buying several hundred dollars worth food indeed i would submit to the court that it's not reasonable to conclude or not reliable to conclude that mister tuchman purchased three hundred dollars with the meat at that store we know from the photographs in the testimony that it  was there was scarcely any food in the store there was hardly any meat it was expired there was freezer burned it was a night and identifiable bags and given the state of the store at the time of the search warrant it calls into question  furthermore for the government had the government relied on a misstatement statement to arrive at roth lost to extrapolate on this record i think would have been unfair not reasonable let me ask you this yes or how do you get a supervisory role in hand some if you don't supervise anybody your honor our supervisor this concept of supervisory authority and supervisory control is sufficient but not necessary to apply overall enhanced meant for organizing and leading and the guidelines of this court's precedent tells us so that there are seven factors as the court knows in the in the commentary to the aggravating role only one of those is the degree of control and authority exercised over others indeed there are other factors that don't deal with supervision for example the recruitment of others the share of proceeds that are obtained in the offense and what we know who are the to perpetrate a fraud and steal from a third party one of whom is a buyer and the other of whom is a seller i would disagree with that respectfully judge wilson because no one's bringing anything the in the intent of this transaction is to steal money from the government that neither of these two parties is entitled to or legitimately possesses what i argue to the court that these are people who brought in instead instruments that if combined were allowed to create something of value in a buyer seller transaction and first of all the case law that's been cited in the brief is tailored to a drug context only one of the cases found that there was a buyer seller relationship there and there was no role that's already but here no one's bringing drugs and money there's no like for like exchange it's not an exchange of a widget for a dollar lawsuit you're correct how does he supervise the other perpetrators the people who bring these food stamps and these coupons how is he supervising them just right he doesn't have to supervise them he has to exert control or influence or leadership over them there are all these other factors in the guidelines that that are a proxy for determining whether one is an organizer and a leader and there was no clear error here in the district court concluding that he mr boucher was an organizer a leader he planned in or an organized defense he was in the position to he had access to the point of sale system he was the one that every snap holder had to come to to conduct one of these transactions and significantly he reap the whirlwind of the profit and to the extent your honor that there were there was any error here clear or here in the application of the role in the government argues there was not an here of course is harmless on the on these on this record it's clear that judge jones intended while he applied the four level and has been for a role it's clear that he intended to and did very downward by the four level enhanced meant and sentence is not only do you have to supervise the other participants but those seven factors that the prosecution is discussing don't have anything to do with this they are done to determine whether you want to get four levels are where they get to levels that was what that commentary is about th ask you about bank records i've been sitting here thinking about what you had suggested concerning bank records bank records could show purchases of inventory bank records in an honestly run business could also also show daily deposits from the business do we know what your client did once he made one of these illegal transactions  example the woman who said she bought three hundred dollars worth of food from seven hundred dollars and i think she split the remaining four hundred with your client that was her testimony what did your client is there anything in the record to indicate what he did with that two hundred he might not have made a deposit and that he might have put it in his pocket now you're out when it wasn't even the day it would be speculative so how would we how a bank records be helpful bank records might show inventory but it might not actually show the transaction bank also show my credit cards and debit cards where the vendor is and that's what they did and hussein ali had dodd all these cases they relied on bank wreckers and let me point out your honor that no case has ever had a comparative store method and just said that's it we're in compare the stores because i think more in answer to your question judge right is that the comparative store method in this case only told you abt sale transactions period they were comparing the number of abt sale transactions wasn't giving anybody any credit for some of the most legitimate it was only giving him credit for oil he didn't have as many this and or the only way that any case and i've cited  brief have been able to come up with a loss amount that is fair and has anything to do with the case is when they subtract out legitimate sales from bank records you just look at he only has five thousand dollars worth of vendors trances so what that what  gets but in this case it's significant because a it wasn't factored out at all nobody bothered to look and they were to really hard in these other cases it's hard it takes work but you have to do it to send somebody to jail for more time than they than they otherwise would and also i really want to point out to your honor the importance of the sentencing factor manipulation this was three thousand dollars it was over sixty percent of all the fraud in this case was passably well the agents were sitting around long after they knew this it happened i'm not saying they didn't need thing objective only that would cause this to throw out the prosecution they were horrible for waiting the point is you're not supposed to sentence somebody let's look at what happened after after eighteen transactions and they waited seventeen more months while this stuff just kept ratcheting up not only was the judge upset you'll see in the transcript the judge was saying i don't really like i did still going on you know why didn't your closest thing down i mean it was bad for the government because it took out an extra three million dollars but it really popped this man because it caused him to go to jail for much longer and that's just not fair and the purpose of sentencing pattern manipulation is