finding mr finger responsibly connected to adam's produce because petitioner was not actively involved in the activities resulting in the violation and because u s d a has determine produce was the alter ego of scott greenstick the c e o and owner was produce at the time of the violations act as responsibly connected provision affords owners officers and directors patco violator to avoid the are restrictions imposed by the statute if they can satisfy a two prong test the st prong is they must show that they were not actively involved in the activities resulting in the specific violation the nd prong requires them to either show that they were a nominal officer and director or they were not the owner of the packet violator and the packet violator credit because there were reports of mismanagement in an investigation of fraud on the department of defense correct know that there is no evidence that why the bank where the finger was involved in any of those four activities there's no but there's testimony that one of the reasons people started to lose faith in this company w mr green's day and told him about what was going on he was still your was not to report it to the federal authorities here we have a violation which is failure to pay produce in this case there is no the department has not provided any substantial evidence to show that there was a nexus or any direct causal link between the failure to report the d o d fraud and the failure to pay for the suppliers take your point that there are other causes here and there were other frauds in which was snot involved and maybe you made their sufficiently distinct that  you think of them as different activities but the dio did that there was testimony that the d n a fraud was one significant piece of the company's downfall well that was there's testimony that there was negative publicity but that was offset by other testimony that said that adams was functioning and folky well before the sweep of the account the evidence is conflicting case you have neither the department could have in terms of his involvement you have the what he pleaded guilty to which is undisputed and also in the record is the indictment which says that he was actively involved in com coxing the fraud from the outset can we consider that and if we can consider  proceeding it's his burden to disprove his involvement but the facts of the indictment were never proved in a court of law it's merely just an indictment it can't be used against mr finger because there was no trial to prove what the facts of the indictment were finding or the alter ego defense because you are like the c r c directors didn't put personal money into the business you didn't know how to root out the wrongdoing and you're not innocent party however the standard doesn't violations of the aca that's wrong there is i mean st of all the government did not start investigating adams because of any of these other activities because grinstead was a gerson expenses expenses on his credit card is responsible for the error was a part of the failed sorry your honor yes the th two directors who were on the special committee that was formed to respond to the fraud were the st to testify to ministre fury they said the fraud against the government and the government's investigation was significant for four reasons st the company and they invested in adams an additional two million dollars to help pay those costs the legal fees and to see that some of the packet that is left then become  for which this proceeding is brought to it i mean the company incurred the fines the fact that the you know outside parties wanted to save the company and put funds into the company i had to be activities mr mr feinberg you have at least three different fraudulent schemes you have a somewhat attenuated serious causation because the the pocket violation has nothing to do with the fraud on have a pretty short timeframe between when we know d o j to be investigating and when the company fails and just nothing in the administrative order analyzing the cause ation question is just sure if it's a dixon well i mean i think the problem is you know i'm not sure that this was front and center when the g a o wrote her opinion and i think there is substantial evidence i don't think that it's you know i think there is ample evidence now that the su has been raised i don't think you can say a judicial officer missed something in the record that makes certain you know arbitrary creases and that's because not only did they incur legal expenses they lost business but they also lost outside investment so they couldn't get enough money to save and they also lost the bank financing restraint years you think it's been to meet because ation requirement of this proceeding that he did covering up the other for a loan well i think there is the director very clearly testified that at some point they discovered what the government was investigating and they went to the bank in see bank their lender and they said look here here's what we know employees and officers within the company have been trotting the government and we also had this internal fraud we're going said was inflating the receivables so they told the bank about both and that was the pivotal event because the bank this proceeding though is not about either one of those issues it's about the nonpayment right that's right but you know and i'm not hearing you answer my question as to what is it in the record is as they would have paid they would not have incurred  payment but for something that mr feinberg did well i mean i think it is linked because when they told the bank about the fraud the bank withdrew the company's plan credit and the director said very clearly that was it we were dead in the two i guess the bottom line question in one sense is was the judicial officer opinion sufficiently specific on causation well i don't think that's the issue i think you know even if it was and i think that the but for question implies that there are a lot of things going on that some findings that were made is related to seating seeing contrary to the implication of the decision here but as you re is all this other evidence but that's not what the joy of judicial officers cited or even referred to right but the judicial so it's not just you know whether there's a potential you know dominant or it's whether there's an injustice you have because you know we're centrally setting the corporate form inside to let someone who's really in office or go  because you know we're going to ignore the fact there are no absurd because it's been justice that we're trying to prevent and in this case there is no injustice it was a protest and in the fraud against the government which clearly had significant financial consequences for the does that reduce you know magician of the agency to demonstrate but for causation yes a i think that's true i think in this case for example he said you know we don't know exactly why p m c bank was through the line of credit and sweat the count's well it was after the company and anybody who's an official in the company who can prove two elements is necessarily bro that's the only way you can prove a negative is that you a sandwich the weakness of the evidence for the fusty he's not going to have something ever that's going to be direct evidence of a negative so why isn't this in this case i don't think he has to have direct evidence of a negative i think when the directors testified that they reported this pride and the internal fronts of the bank and the bank all the line of credit which but the company then the water i think you needed to ask you know are you sure  you know how some of the hole you don't leave much meaning in this that you if it's sufficient to show that he did something else that gulf coast the company to lose business or lose status or lose credit then you don't really need that element of the state you know but much content in this are you cancel well i mean i think in a lot of cases this case is different in many cases you know we have an officer who for example looted the company as it's going down that was norms for a case we cite for the standard of active involvement prior to the company's collapse the family wrote checks themselves and took money out that could have been used for the produce i guess it's not you know and that's what we went after them for again it wasn't that they themselves didn't pay the produce sellers it was the reason the company didn't have the money to pay and in this case the reason  company couldn't fulfill its obligations under pack it was because of the various fraudulent schemes perpetrated by employees officers within the company what's all he pleaded guilty to is there anything that shows that had this fraud been disclosed at the moment he learned that there would have been any difference in this nonpayment situation well i think it you know if his pride i mean fraud by its nature secret i mean we're we're speculating either way because that's not what happened but the really you know how do you disclose the secrets of the government it's reasonable to assume that it would have stopped you know were not  made i think potentially certainly we wouldn't be here for this responsibly connected perceiving if he hadn't concealed the fraud which is what he admitted to in his plea and agreed to continue it which is what he that's actually admitted to in his plea agreement are are we allowed to consider the allegation that he was he  didn't simply conceal the fraud but he was actively involved in creating it that's the allegation in the indictment he didn't plead to it and friend on the other side has a at least an intuitively appealing point that that's just an allegation that hasn't been tested right and that is his argument and we didn't make much of an indictment in the brief and now i think you said that the issue has been great are you suggesting that the causation issue was not raised on till the appeal   you know i guess you know we didn't raise that issue i didn't chase it down because it would be arbitrary and capricious if it you didn't show up sir missed you know a chunk of evidence in the record but he he has no company yes that the judicial officer has defined what the i what activities resulted in the violations of the package and in this case the ministry of law just found there were three misuse of company fons the fraud against the government and the fraud against the company itself he participated in only one so it was the fraud against the government was one of the activities that resulted in the violations on the  preservation question before the agency the fraud the causation question was raised in this court in the blue brief if and unless i missed it individual his individual acts or omissions and the failure to pay don't you still have a little bit of a problem because the statute doesn't require causation between the individual's misconduct and the violation it requires that he be actively involved in activities that cause the violation so isn't it enough even if we can trace what been burnt did to the failure to pay isn't it enough if the record has substantial evidence that he was involved in the one fraudulent scheme and vast scheme was a substantial factor of the government  oh he was found guilty found guilty of and pled guilty to was phil you're to disclose the fraud there's no evidence that he was a participant in fraud so we have to show hey if he reported this would this have prevented the violation from occurring and this court in neurons burke specifically was pretty clear that the legislative history for the amendments in one thousand nine hundred and five to be actively involved standard was that congress were to make it clear that constitute active involvement but i'm not sure that's right i can and i can conjure up a hypothetical where the concealment would be absolutely critical  thank you but we'll take the case under advisement