actually no crime here whatsoever when you get the best way i think to get rid of all the noise and there's a lot of it in this case is to focus on the actual charges in the indictment and if you go to record number three which is the indictment and page three the government has a chart of whiners and checks that they say were paid to mr beach or beach petroleum one of the problems number twelve those are all those in the chart on page three of the indictment total one hundred and twenty thousand dollars as pre partition income that the government claims wasn't disclosed well aside from the fact that and on top of that he produced all his bank statements which showed the exact amounts that were paid and those are on record excerpt tab fourteen as well so basically the key docs are for record specifically notified his lawyer about it and writing i reply brief explains this and detail he wrote his lawyer about making fifty thousand dollars a month his lawyer said he could do that it was his to keep  income so obviously at least in terms of the government's intent to prosecute here it mattered but it didn't according to the government's witnesses because everybody said his post petition income wasn't part of the bankruptcy estate and he was entitled to keep fouling so that there was no crime there with respect to count three which they found him guilty that's the zero future income problem that's attributable soley to mr de facto and his deliberate decision as he admitted in the was for fraudulent only concealing the total amount of consulting fee income which added pre partition and post petition to gather so it's in fact did with the same problem of the petition income that is reported to petition income which is completely irrelevant and depended on the photos to deliberate decision to report zero future income even though he knew mr beach was going to be earning fifteen thousand dollars a month and he also the jury also agreed that it had that no one paid him the money until january the so the jury understand or said the difference at least to that extent of the separate legal entities so then that l good jury until the ones where they decided he was guilty pretty much yeah they got confused by all the money and the charts the government was throwing around in fact that the government chart showed huge amounts of money wasn't charged in the indictment that wasn't relevant to these charges and they combined pre partition and post petition income despite the fact that other witnesses said post petition income wasn't relevant at all and that argument is one that was made to the jury when you just may i'm not sure how well that was articulated to the jury if if it was even specifically articulated at all the government combined it all made it sound terrible and managed to persuade the jury to convict on those counts but the evidence is insufficient as a matter of transfer sir three and i love that money that thirty thousand dollars or forty five thousand dollars is reported in the supplements behind tabs twelve and fourteen he reported it a little bit incorrectly but the total amount is reported there he didn't specify additional check call that thirty thousand dollars from the wire transfers and at tab fourteen but he didn't see the check but the check was included behind him to let ninety thousand dollars that's reported behind tab twelve because otherwise it would have been seventy five thousand dollars so the amount of money is correctly reported he just d adopt pick up despite having the bank records and pay and that there were there was one dollar check and two wire transfers of course the creditors counsel had that information in his hand when he was questioning mr b h and simply led him down the path of saying oh yes they're there too if you'd shown him the rd one which he had in the bank records i'm sure mr beach would have said oh yeah i'm sorry i forgot there was another check but i got another fifteen the thirty thousand is reported and then the nine thousand is reported the government talks about in terms of seventy five million forty five thousand because of the two different times but the entire amount was reported in the amended falling adamant about it and so what do we make of the e mails and then the record from mr defoe to mr beech about the risks associated with the way that this petition was being the supreme petition behavior whether it was house purchase or the various relationships between the trust and be petroleum and mr beach it sure seems like mr defoe was worried about the way this was going to go south for mr beach after the petition was filed well  request if he went ahead and purchased a house in the trust but even the government's witnesses admitted that the purchase of the house and the trust was a left prospect i mean it was a laugh a function of the trust to provide point that it was reported on the forms and it wasn't like the next day he was out i mean the day after the petition no but mr de facto knew that in fact mr defoe said he expected mr beach to go back to work and earn money and resources project helped out right but mr defoe is not a defendant in the case mr beaches and he was the one who said zero dollars expected future income criminal intent on his part not to override the advice of his lawyer and mr de made it all out on the witness stand that it was his decision he literally said i don't see how it matters and every government witness dollars in undisclosed income in two thousand and eleven on two thousand and twelve he lied about this income repeatedly and under oath as a result he cannot merely meet the high showing necessary to demonstrate that this court reversed any of the counts of conviction on sufficien review i'd like to start we're misspell ended by talking about mr defoe it is no overstatement to say that this was the key theme of the defense case at trial mr beach attacked mr defoe in his opening statement he was able to cross examine him a great length during trial it was again a focus of his closing argument but i think most importantly here mr beach requested and received an advice of counsel defense he didn't object to it at the district court level and he doesn't object to it here and the advice of counsel defense is where his argument falls apart because in order to receive the benefit of that defense mr beech had to do a number of things but chiefly here he had to disclose all material facts that he knew to his attorney and he had to rely on advice that mr defoe gave him mr beech quite simply kept mr defoe in the dark about the key activities of the beach two thousand and ten trust in two thousand and eleven i disagree completely with my friend  powell about whether or not mr de phone knew about the existence of beach petroleum knew about the participation agreement you know about the assignment of that because patient agreement knew about his client's activities his work his income in november of two thousand and eleven as as has been pointed out previously mr the photo expresses concerns about the arrangement of this trust the existence of this trust notwithstanding that fact in november two thousand and eleven mr beech tells mr defoe all my income in two thousand eleven was forty one thousand dollars from my old job that clearly wasn't the case given that he had earned one hundred and twenty thousand dollars to that point forty five thousand dollars sent to him personally and another seventy five thousand dollars through beach petroleum as a result all of mr defoe's advice to mr beach has to be seen through the lens of what he knew and what he didn't know at the time he didn't know about beach petroleum he didn't know about these payments so when he's talking to him in december of two thousand and eleven and he that he can go back to work that has to be understood through the lens of not understanding what beach petroleum is doing not knowing that it's doing anything but startup activities he doesn't know that it's earning fifteen thousand dollars a month when mr defoe was given the opportunity to talk about at trial what he would have done had he known the full picture he said time and time again i would have disclosed these payments i would have disclosed them as two thousand and eleven income i would have disclosed the payments on the count three schedule i as projected income i think it's important also to note joe and i think you made this point it was a mortal lock that mr beach was going to be paid more money going forward he sends an  invoice to blackhorse resources on january th two thousand and twelve in it's really important this invoice is for work done in december in january and for work to be done in the future so he sends an invoice for money he expects to earn fifteen thousand dollars unearned income that money is wired to him on january st two thousand and twelve and he on that same day executes a bankruptcy petition in which he indicates he has no current income and no expectation of earning anything in the future as a result there is simply no basis upon which to reverse count three before we move off of count three can we talk about the requirements of the government has to prove that he knowingly lied on when he said  dollars of expected future income i understand his argument to be where you this is income to the trust or to beach petroleum which i gather is owned by the trust the other way around that no you got it right ok so that it's income to those two entities those are distinct legal entities from me mr beach so there's a sentence on page thirty six of your brief that says we should reject that because it depends on the rejected premise the beach was entirely distinct from the company in the trustee control now lawyers and judges may understand the legal distinction between trust companies owned by trusts and the ultimate pastor beneficiary in this case mr beach but when the government have to additionally prove that he knew when he said it was zero dollars that he also knew that the schedule i understood i have a few responses i think the court dealt with that precise issue in the chucker case and the court was considering a person who had purchased a rental property in his own name and then put it in an l l c and was renting it in both entities and he filed for bankruptcy eventually he said i didn't rent this property to my fellow or he didn't say anything he said i didn't write this property he filed for bankruptcy that's rejected this court says this little truth defense didn't fly because that particular person exercised the beneficial interest over that he was involved in the rental process and so essentially that's thinking without a difference i think so to he himself provided in an april two thousand and twelve deposition i think he was absolutely in a position to know that i'm doing the work i'm earning the money i'm controlling the money i'm spending the money this is income to me so i understand the legal argument and i certainly understand the inference  that could be drawn bonnett but when he says to his lawyer my total income is to that i'm whatever was forty one thousand dollars and he's obviously excluding the money that he that these separate legal entity spurned it's consistent with his argument now which is that it was  dollars in the sense that there was more monies being generate the fifteen thousand dollars and everything else is being generated by distinctly when it is i would think that the government would need some additional evidence that would show that he either knew or should have known that any exposure doing more than that right because the statute says knowingly that he knowingly was committing fraud when he said zero dollars i mean would it be enough to just say he's legally wrong i think i think you're right your honor although the court has said in cases like this it's obviously very complicated to find direct evidence of criminals culpable mental state when it comes to a crime like this so what you have to do is infer from a course of conduct that particular mental state and i think through the course of conduct it is clear that mr beach was organizing his activities in a way to conceal income going forward it's a peculiar arrangement to sign an agreement on a trustee have and have your payments directed to that trust rather than to yourself when you are the one doing the work and you are the one spending the money is similar similarly particularly or to have an attorney expressed deep concern about the arrangement of this trust and then turn around and not tell them about anything that the trust is doing throughout two thousand and eleven and this is the case even after mr defoe presses mr beach after the january two thousand and twelve creditors hearing where mr defoe starts learning information for the very st time about mr beach what he's been up to he presses and he tells him you have to disclose everything in order to receive the possibility of a discharge of your debt mr beach does not correct the impression that his income was only forty one thousand dollars he's not correct the misimpression that he is earning nothing going forward and i think your honor another point to your question  beech indicated in a may two thousand and twelve deposition that he had been providing these services for beach petroleum and being paid for them he was simply not confused about this any purported confusion arose at the time of trial as a matter of a defense case but i don't think contemporaneously he had any particular confusion about what was going on i'd like to make another point about the ninety thousand dollars that mr powell indicated had been disclosed well this is a separate ninety thousand dollars than the ninety thousand dollars that mr beach earned from black horse resources and this is the case for a few reasons sheila powell government expert witness on page five hundred and forty nine dollars of the record testified that that ninety thousand dollars came from a separate simply from the spendthrift portion of the trust it did not come from the black horse resources and that makes a lot of sense when you consider mr defoe's testimony mr defoe talked in that letter about the ninety thousand dollars but mr defoe also testified to great length that he didn't know about these black horse resources payments he didn't know about these monthly payments that had happened all the way through two thousand and eleven so taking those two facts together these ninety thousand dollars in payments were not black horse resources payments and as a result he did not really disclose anything until the april two thousand and twelve deposition and at that point he still did not disclose the full scope of what he's been doing in two hundred two thousand and eleven and  respect to the two thousand and twelve april deposition i'd like to speak to judge wieners point because i do believe that this particular argument has been waived i think it's been waived because at the outset of the very brief arguments concerning  that particular that particular count at the very outset it is posed as if the only problem with count seven has to do with whether or not there was a mistake about receiving two or three payments but of course the  st charge seventy eight dollars was an allegation that mr beach lied about whether or not he received only one of the three payments so by failing to set forth a a more fulsome discussion concerning that that st false statement whether or not there was one or three this court i think should find this count waived as a result of insufficient briefing and on that basis you can affirm the entire sentence against mr beach because the court imposed for four month concurren sentences course the court has to deal with the other counts but the sentence alone i think can be affirmed on that basis the judge agrees to your point i think it is true that he made this mistake a number of times when it came to disclosures he made it in january two thousand and twelve bankruptcy filings when he didn't disclose the forty five thousand dollars he received personally or the other seventy five thousand dollars he received through the trust made the same mistake or lied again in april of two thousand and twelve in his depositions two times when he talked about the payments that he received he only revealed two of them and then in may of two thousand and twelve he makes the exact same mistake he lies again actually in may of two thousand and twelve when he says he only received these two payments now i'd like to just spend a brief moment on the matter of what was disclosed because i think the notion that a great many financial documents were disclosed is a vast overstatement of what actually occurred the only reason mr beech turned over any information in january of two thousand and twelve is because the bankruptcy trustee quite rightly accused him of seeking bankruptcy in bad faith as a result she sought a number of documents from mr beach which mr defoe provided among these documents there is no mention of beach petroleum there is no mention of the participation agreement the statements that contain the payments directly to mr beach i think it's important to note the only reason that this rd payment didn't come out at the deposition is because it is listed only as a line item deposited doesn't indicate where it came from so to suggest that anyone could look at that bank statement and take from it anything about black horse resources or the participation agreement or income or any meaningful information about his bankruptcy is simply false so all there were were  two wires into his account from black horse resources but it doesn't really provide any context as to what they are it certainly doesn't provide any context about beach petroleum about blackhorse resources full activities throughout the course of that year so the notion that these disclosures which were certainly not gratuitous they were forced by the bankruptcy court under under a threat of this charging dismissing its bankruptcy petition is completely false there is no precedent for this case it's literally an unprecedented prosecution checker doesn't apply at all that was a series of bankruptcies one after the other where the guy was trying to forestall foreclosure on  house so every time something came close he would follow bankruptcy and then made false statements in the process swaim for example the man stole six hundred and twelve thousand dollars this is a case where every dime of the money is accounted for there's argued that the trust itself didn't have to be disclosed but the trust was disclosed in the original bankruptcy filing and that trust helped breach petroleum it helped by close resources it helped the house and every government witness including the trustee testified that that was sufficient disclosure to allow them to follow the assets and find out whatever they needed to find out they also admitted that the trust wasn't part of the bankruptcy esta facto there's no issue of mr beach not having told mr de facto anything that was relevant to future income because he wrote him an e mail saying you know i'm planning on going fifteen thousand dollars a month but one of the most important thing that the trust was disclosed in the original filing and all the government witnesses admitted that was sufficient for them to follow those assets which included the house beach petroleum and black course resources defo did have all the bank records as did the trustee bankruptcy is a process i don't know of any situation in which someone has been criminally prosecuted for their st bankruptcy filing expected a bankrupt person with some title to do that schedule statement of financial affairs he increases this income by eighty eight thousand dollars and number two reports the gross income was two hundred and forty eight thousand and eight one hundred and thirty five dollars from the original eggs up fourteen the entire one hundred and twenty thousand dollars in the government's indictment by petition was disclosed satisfactory to the trustee r b a offered to her opinions and opportunities to disclose that he didn't take that is no evidence of his criminal intent whatsoever nor