we have four cases to be submitted today on the oral argument of the first two and then take a brief recess before hearing the final two cases would begin today with united states versus spanish more  how many arguments is this for you mr craig probably pushing sixty ok may it please the court the the district court in this case found one point seven million dollars in actual loss to an t called portico on in this case but the true number of actual loss to that into t should have been zero oregon in this case issued loans to fund the purchase of life insurance policies and in the process took a security interest in those policies but after the fraud was disclosed and it might be worth reiterating again that it was a not a fraud that affected the age or health status of the insured so it it doesn't directly affect the likelihood that the insured would pass away before the premiums were collected or vice versa but after that it was a fraud a jury did find it was a fraud and  a gone turned around and sold its loans and the associated interest in the policies to an entity that i will call a for lack of german language skills and in this sale porter gone recouped every penny of its loan and so because part of gone has lost no money and a was not a fraud because it bought the policies after the fraud was disclosed one point seven million dollars is not the correct measure of actual loss and when our son the record it doesn't seem like there's a lot of detail about the subsequent sales of the poor loans who bears the burden of proof on what happened to the loans because it seems to me you're arguing for an offset against loss amount who bears the burden of proof on the government does for three reasons the first reason is that it is it is loss and losses in offset i mean losses a is an adjustment to the base offense level it's clear under this court's precedent that that adjustments to the base offense level are borne the burden is borne by the government by the proponent  can be used to value collateral and that shows at least that the sentencing commission knows how to create a presumption in the valuation of collateral when it wants to do so and there is no indication in the text of that there is no value to collateral until the got until the defendant shows that there is some the third reason that the government ought to bear the burden of proof is i think we can take some guidance from goss which is a case cited by the district court and cited again by by mention in the briefs again and which this court had to decide whether the defendant had really had an intent to repay a loan in order to decide whether it would take into consideration collateral at all and when it did so it said there is basically a silent record about this there's no evidence that he intended to repay the loan there's no evidence that he didn't that's a different question about collateral than we have here but that silent record in goss was resolved against the government and the case was ultimately remanded to the district court so that shows that there isn't a general burden shift when we begin dealing with the question of o submit you could think of it as an offset but you could just as easily think of it as a question of whether or not corrigan was harmed at all or whether it was there was proximate cause for the secondary purchaser in this case so in those cases you don't have to to it's sort of arbitrary whether we consider the question as involving collateral which is an offset the loss or the absence of loss in the first place so that i don't think there's anything that submit that shi probative facts in the record the bend in favor of the defendant and the most probative fact and that is that if we look at page seven eighteen of the record it does say that a secondary purchaser continued to make per payments on at least some of the policies so that's pretty significant for for several reasons that it shows that the policies when they were transferred had some economic value the government in this case relying on the fact that the three o two names it says that this wasn't an easy you mandated wind up suggests th was not an arm's length transaction that maybe it was something like a bailout of of of a corp a corporation that or a financial institution that had made some bad loans but if that were so then i don't think that we would expect to see if they weren't buying it for value we wouldn't expect them to see to see them continuing to back the policies the security interest they've bought with additional with additional money after that  happened if it was just there to clear the books then then we wouldn't expect them to to to continue to have to continue to support to to to invest acknowledge that this is a rare case that it probably is a rare case where the victim's compensation produces loss and so i want to distinguish this from two other situations that are probably more common where a victim's compensation would be would not reduce loss one of these is where an asset is fraudulent the acquired and then it is sold by the victim to a secondary purchaser before the fraud is discovered in that case the secondary purchaser really does stand in the shoes of the first purchaser economically speaking they are as  then the bank sells that to a secondary purchaser down the line if that all happens before the fraud is disclosed then whoever buys this at the house the second time is as defrauding as the first one but here on page seven eighteen of the record again the government's three zero two says that the secondary purchase occurred in january of two thousand and fifteen while mr bass more was sitting in a federal prison so this is not a case where a was  fraser the products are already out there for them to see given the complexity and uncertainty and i think you've highlighted surrounding the last calculation isn't this precisely the type of case in which again should be the basis for the sentencing garments in other words looking at your client's commissions because loss is not well the first most obvious reason that it is not the case for that is that the court ruled that gain shall not be the measure of loss in the first sense and hearing so so if we have nothing else to say about law the case in this case then at the very minimum we can't undo that we there's a there's a body found that because he said there was this big huge loss amount that he thought he could correctly calculated we didn't said it was wrong in the mind you used again if wast cannot be reasonably after time and so since we've now told him at least in the first appeal last cannot be reasonably ascertained that you don't correctly determine lost the details of this transaction and say you know what was there a specific itemized price for these particular loans in this case the mere fact that the that the record is not well developed doesn't mean that it's impossible to show what the what the losses in this case and as far as law the case goes i would submit that this situation is basically just like haas there was a  something else that determine the sentence that made it sort of gave us less a lot less incentive to appeal when both sides are less incentive to appeal the the ruling the game could not be the measure of lost in this case but but but as in haas the fact that something else was more salient in the first appeal doesn't absolve the parties of that the duty to appeal the findings that were made that don't affect them  so the other but the other point i want to make about the part of the record that the government relies on is here's the part of the record that they say shows that this was not a transaction and that it was part of a larger portfolio as part of the wind down measures mandated by the european union puerto gone formerly known as west i'll be transferred its loan and securities portfolios may two thousand and ten the loan made to p f participation trust was transferred to that part of the record first of all doesn't say that this was not an arm's length transaction it says that in a way portadown was required to make this transition but it doesn't say it but the record from all the record shows it doesn't even show that e a is a public entity it doesn't say that and certainly doesn't say that they weren't profit motivated or that they weren't motivated to get a good deal in this  transaction so it's the part of the government the part of the record that the government lies and certainly doesn't carry its burden and it doesn't stand up to the more probative evidence that e a is continuing to make payments on the policies so they they must expect that there is some proffer agreement is that it is a finding on against the excuse me that it is a it's an attack on a finding of actual loss and there was no finding of actual loss in in the first  it was no week we could have raised a similar attack on the finding of intended loss in the first appeal but the defendant is not required the parties are not required to raise all issues that are similar to ones that they might want to raise in a second appeal or on remand this is an attack on a finding of actual loss which was not made in the first in the first hearing there is a dispute about whether or not there was an affirmative finding of zero loss but there certainly was not a finding that the defendant called caused actual loss under the guidelines in the first appeal so at a minimum this arises from the from the the remand the issues in the remand that one point the one point i want to offer the court about the proffer agreement is that there is a derivative use exception in the proffer agreement but the reason that this is not fall within that is that the government was using in the court was using to calculate his actual loss the very same misconduct that the defendant confessed in the process agreement but not his statement and they knew about it even before suddenly it's even one of the better cases for arguing there's a violation of that how do you get around the fact that the agreement says the government can pursue investigative leads based on one person being questioned if that that part of the well there's two ways two ways one way is that the the wreck the agreement says it shall not directly use his statement or any information right so proceeding that's standard language in all of these proffer agreements which as you well know you would basically be giving blanket immunity and someone comes in and says i committed twenty murders and the government in your view can't follow up and look and and provide honest information about what they've done and we don't want them to be dishonest and if they are incomplete about their confession then the government can take a lead something else that they've used that they've said in there and then go and prove the rest of the case but it doesn't as was more than reasonable  record in determining exactly what those losses were we have to remember that the guideline requires only a reasonable estimate based on the evidence initially this court said in the gas cars which mr page discuss d moments ago that sometimes in a case like this where you have a type of fraud that results in some secondary losses to lenders oftentimes it's difficult if not impossible to determine the exact amount of los entity that lost money on three categories of loans by lending the premiums to fund these fraudulent loans applied for by mr hayes more now that fact is undisputed here it was undisputed at the first sentencing it was undisputed on the first appeal that amount was included in the restitution award in the first appeal and is never at this point been disputed even on this appeal the porter gone suffered a loss now the question is what do we do with the fact that stepped into the shoes of porter goss with respect to that loss now that in our opinion is the easiest way to resolve this case is to say that the record clearly states that those losses to porter gone were passed down to the not really important the series of transfers age answer at all and that the law should be assessed at the time of the first sentencing and which case it would just be a matter of taking the the losses to port are gone and that's attracting the value of the collateral now mr page discuss outlining the value of the collateral but i would point out that from the first three are to the three categories of loans that were secured by insurance policies the collateral is insurance policies that have terminated lapsed or been policy a policy that's been rescinded by the insurance company hasn't got to you as a collateral no one's ever going to collect on those policies they've been closed the policies that are still active that can't be collected upon those have not been included in the last amount neither last the standard of review on this issue i'm certainly would be the method of calculating loss would be to know about all these questions about what happened who suffered a loss when these are all factual determination  between what an actual loss amount under the guidelines and what restitution does but the bottom line is that this one point seven million dollar figure was up play in the first sentencing it was included in the restitution award it was never mentioned it was never challenged it was never raised in district court in tel now so i'm there certainly are a waiver that has gone on there additionally and i think the strongest case for waiver is and as mentioned during proffer session but if the court is inclined to delve into that issue the issue of the proffer the derivative use clause in the proffer agreement is extremely broad it allows the government to use make derivative use of any statements or information provided to pursue any investigative leads in the agreement and there's some case officer of a case law that talks about the cat cases one that we cite in our brief that construe such provisions extremely broadly now our agreement with that step further and said we have a broad river to use agreement here and the purpose of that is so that we don't later have to litigate the issue of whether our whole investigation was tainted by you having revealed this you information there additionally the government isn't even directly as the argument he's making is that the government simply took the information from the proper session and corroborated it and that that's not acceptable that we argue that under this court's case law it is that's not what he used quote banks and hedge funds to fund the scheme he didn't say anything about court on there was nothing about any specific entities so the argument he seems to be making here is that none of this but his he's basically by mentioning sentence within this range x to y i don't remember exactly what the numbers were in that case that it's within this range is i would pick in any event something within this range and this court said it's just you can't say that it's a coincidence that you would since within this range and it wasn't tied to the guidelines now didn't say anything about picking a number within a guidelines in to construe it that way to say that picking any sentence within the proper guideline range can't be harmless only is a loss not difficult to determine but the two hundred two point seven million are actually lost in many ways understates the culpability of his conduct i think that's something the court was looking at too i mean perhaps he didn't the guidelines do say that it's only necessary to provide a reasonable estimate of the loss but it is not reasonable to ignore the fact that the victim was completely repaid by a second buyer and it is not reason a reasonable way to estimate the value of the security interests and in the life insurance policies by ignoring the fact that e a is continuing to pay money on some of them even after their purchase they were purchased by them with the gov that what the district court has done is essentially to ignore entirely the secondary payment the method used by the district court is was basically as i understand the sentencing transcript to say gossip or bids me to consider events that occurred after the first three sentencing entire and so it's this is not merely a case of a factual finding which might be right or wrong but is sort of in the ballpark and we can say it's not clearly erroneous this is a case where the district courts reading of the gospel caused it to blind itself to fa that occurred afterwards which shed enormous information about the value of the collateral provided to the to the first victim and probably zero out the loss entirely but gosh does show to use the market of pretty plain statement not hard to deal with as well the subsequent payment of that of the subsequent disposition of that of that collateral  sheds a great chance more information about what the the value was at the time of the first since right goss doesn't say ignore all facts that occurred afterwards it says the ultimate issue you're looking for is what was the value of the collateral at the first sentencing it doesn't say it doesn't close the record doesn't close the other didn't record on that question if there is much more productive evidence that occurs and goss is also saying it is also about a case probably go down what is the what does that tell you of those houses at the time so we can stink wish goss and from a case that were like this one where we were not looking at what just let what the value was going pouring on had it but it's a completely different case reported on disposed of the collateral and sold it the guideline treats those two questions separately it says don't don't look at the value of the collateral at the time of sentencing if if it has been disposed of that's what's in the defendant carry that burden at least by a preponderance of the evidence by showing the first of all that and that the collateral the sole but and second of all most importantly that e a a continues to make payments on the active policies that are that are happening right now it is not in the proffer agreement going back to the give me an example in your current situation mr bay's more of an investigative lead the government could have pursued as contemplated by the agreement in response to what he said if if the defendant said i know a man named and he named a coconspirator in that case but didn't tell him i've been engag insurance fraud or describe outline that scheme then in that situation they could use something that he said to prove misconduct that he didn't tell them about but but if the agreement says statement or information than the in or information part must mean if if it's to have any benefit to the defendant at all or information must i mean if it is you get you typically do those various you get cooperation it's a huge benefit which we know is the real way in the federal system to reduce your sentences to get cooperation that's that's what people do it wouldn't or still be a full incentive to go in cooperating get your sentence reduced but there wouldn't be any incentive to to be in a proffer agreement there might be an incentive to cooperate but we're looking for looking at a contract with saying a contract has a real benefit from both sides the defendant can walk in and cooperate and hope to get a five k but he doesn't get any assurance that he's going to get a five k for doing that with a proffer agreement does that say