simmons from hailey mcnamara law firm on behalf of the pellant walter reed may please the court in connection with this case pretrial during trial and post trial we raise the federalism issues of the federal government using fraud statutes in connection with it investigation of state campaign activities by state public officials at the conclusion of the trial judge f basically said he thought that the issues i raise would be more better determined by a policy oriented court such as the fifth circuit the united states supreme court accordingly most of the time of the oral argument will ease spin on the federalis twenty ten the shilling case the enron case the us supreme court defined the honest services fraud statute in terms of of kickback and in broad's and the reason for that is in the state court has been compromised or the state process been compromised and therefore the federal government stepping in is kind of a lot but that's not this case the state system was not compromised  reid never sold his office oh i mention this chilling because i think his comments the concurring opinion by judge justice scalia set forth what's about to happen in this case  his finding term was his concern was the power to define new federal crimes with no ascertainable standard of guilt and that's what we have here the u s supreme court has kind of confirmed that in connection with the mcdonnell case there they declined to construe the statute with regard to official act and said we're going to eat not let the government set the stated for good government one of them was what you consider your dish an old two thousand people at the event with with banners and well three for d n a the other was it was a simple function which it was no a request to get funds but merely a gathering of what i call a patron party where you have your political supporters that they charged as a crime and the reason they did that they had a witness who attended both events and made a comparison of them which which was very that's the one the poem judge fallon ultimately discarded but part of that twenty five was eight thousand dollars of liquor supplied by his son i don't think there was an issue there in terms of that took that equipment but there was an allegation that the money was actually redirected to a third party or something you know that's in connection with you the america concept that the open house the reason i mention the open house because that's where they're defining that the crime in count one they define this open house as a crime and it just wasn't the case but the truth of the matter is we had photographs from third parties after the indictment that showed him giving a speech which showed political supporters here it was a classic political event they just didn't pass the and that once again the government's defining this political event they're saying it can't be a a allowable event on the state of us state campaign laws because there was no contributions there defining the crime once again then when when the judge found looked at the case he says it's but especially the photograph he says it appeared to be squarely a political function and he took just over twenty five hours of a focus on that because there in lies the potential for the government to define the crime the second instance of over defining the crime is what the government did in this case the state law has a phrase unrelated to the campaign or the holding the public office they tried to eliminate the second phrase they may be focusing just on on the campaign function the concept of holding public office is very very gentle the state legislature has not done anything to change that it's sort of a vague term but now they're just forcing a campaign laws and making crimes out of something under state law is not a crime the governess case attempted to make this an honest services case because they had it in the exception of the indictment certain paragraph that talked about on a services i moved to strike that and the judge agreed with me  also limited the expert i had to present those cases sure enough right up to out the box they call the expert their expert from the board of ethics who's defining everything in terms of violations of campaign law and after this happened i approached the bench and the judge agreed with me that his comment was the way the prosecution is packaging this evidence they're misleading the jury misleading in the sense he says they re injecting the honest services is not an honest services case and ultimately we were unable to present our own expert to get to the full deflate of the number of these allegations built in walter reed was given recognition which may have given votes that's what politics is about trying to get  case of red cliff is leading case and i think the quote there from redcliffe it states following louisiana law established a comprehensive regulatory system governing campaign contributions and we resist the government's i don't think i've seen a fraud case like this before and he's been on the bench twenty three years and the reason is they're defining the field that they saw as the violations and that's exactly what judge justice scalia warned about letting the prosecutors define and that's what they did here there's also other policy reasons including the use of the i r s in this case any time you have a campaign you're going to report your expenditures on the on your campaign report and their position is if you don't report on your ip your iris ten forty innocent iris filers so any time if it said federal prosecutors in forcing state campaign law you've got a built in iris case here this man paid five hundred thousand over half a million dollars in taxes and there talk about another thirty three thousand that would be a civil case ordinarily if i'm saved a few minutes from the bottle but i think the thrust of this case is we have federal prosecutors defining the crime especially in terms of state law the state law has not changed this that it's very big perhaps but maybe the state legislature left it that way have the good morning may it please the court autum town on behalf of appellant stephen read your honour's or where we've raised two issues in the brief he insufficient evidence which ties in the mcdonnell argument and the severance issue i'm not  our position on that your honor is that walter reed was one of the witnesses who ended up testifying on steven reid's behalf several of the incidents that he was questioned about dealt with the allegations against even read the allegation about the liquor that was provided that was paid for but supposedly not provided an allegation about payments that were made from vendors at that event and allegation as to fourteen thousand dollar invoice for several different projects that steven reed did for his father so walter reed was one of the witnesses who testified as to all of those incidents those having been performed how they were carried out there were additional witnesses even witnesses called by the witnesses who came in to testify as to the hospital counts testified that they essentially the prosecution used one of them to impeach walter reed to basically say that he helmut had been asked supposedly to sign affidavit on behalf of walter reed saying that he knew that alter believed it was his intention to represent the hospital personally and that he was asking for him to sign essential a fraudulent affidavit and that witness testified that he refused so what the jury heard was because of those hospital counts that walter reed essentially was lying and he was one of the witnesses who testified as to the defenses presented by steven reed additionally the thing credibility it did your honor yes and so that additionally there were three full days spent on the hospital case that had absolutely nothing to do with steven reed and the dollar amounts alleged there was over six hundred thousand dollars which also went to see just that this was a wide ranging pattern of fraud and deceit when in fact it was not none of this was hidden like traditional fraud cases are you know you better shift to your other point you're going to run out of time thank you judge switching back to the insufficient evidence a steven reed was convicted of three counts our first portion of that argument is the mcdonald federalism issue a sensually that at trial at no point was the second prong of the state campaign finance law argued basically a louisiana state official can use campaign funds for reelection which was the crux of the prosecution's case or they can use it for the holding of public office and the holding of public office is not defined anywhere so there is no notice as to when you are or are not violating that particular problem that now the government put on witnesses that never addressed that particular issue they called three donors to the stand and they said aren't you upset that your money was fraudulent taken didn't you think it was going to be used for walter reed reelection they all said yes we are angry about that but on cross it was clarified that number one they did not actually know the state campaign laws that they wanted it to only be used in accordance with the state campaign laws which also included the holding a public office and the government has argued that the mcdonnell issue doesn't actually apply to this case because it's a different statute than the one the supreme court looked at but it's been applied throughout  dictions since that decision came down to basically argue against the idea that you have for the idea that you have to have a fair notice of what a term means that you have to it has to be an agreed upon definition and that you can't expand a crime without proper notice to a party and that's exactly what happened here everything that walter reed and subsequently stephen read because he received payments for campaign events was legal none of it was hidden it was all reported and as to the specific instances with stupidity the first count that he was convicted for involved a fourteen thousand dollars approximately invoice for several events that he did for his father several programs the government when it presented this information a trial ignored the fact that the total amount of the invoice it was claimed to be for a one particular video and they put on that support and said there's no way that this video could have been worth that much but what it was was actually three separate invoices a golf tournament a safe driving initiative and a video that we're all lumped together per walter reed to request which was supported by his c p a wrong garrity to make one full amount and it was testified at trial by the government's own expert that steven reid's rates of hire for that particular video were not in reasonable but they lump it all together to try and argue that this money's being hidden it's being stolen when it's not the second issue the wire fraud that involved at the liquor that judge clement had asked about previously and even the state's witnesses testified that jill jill's arraying there are friends of accountants simply said i didn't include the liquor in there that was provided by steven reed they had witnesses who testified it was brought from the d a storage unit they ignored these things because they were focusing on the first prong and that's what they were hoping to convict under have reserved two minutes for rebuttal time if you have thank you thank you good morning in may please the court my name is jordan ginsburg and i was trial counsel in this case with me today as my colleague brian mclaren your honour's this is not a state finance case when walter reed and steven reed took money that did not belong to them when they treated the funds of others their personal piggy banks they committed a classic federal crime a crime of fraud now one of the defendants happened to be a public official one of the sources of phones happened to be a campaign account and they happened to spend some of those ill gotten funds on things like flowers and money to a church and dinners but that information your honour's is evidence not elements of the crimes with which they were charged and convicted now misspoke there are two prongs to the mcdonald's federalism argument and neither of them it's apply here first mcdonald the opinion itself is very limited in scope it applies only to section two on bribery cases those circuits to have issue here and there's been no indication either in the record or elsewhere to suggest that a court has extended mcdonald to a non bribery case moreover any of the federalism issues raised by the supreme court in dicta in mcdon they don't exist here as the district court noted the terms that issue here the elements of fraud are not complex and are less technical than section two one bribery as the district court recognized in quoting this co skurry opinion law does not define fraud it needs no definition moreover any other result would effectively immunize state officials from committing wire fraud in certain contexts that certainly doesn't seem to could have been the opinion or the intention of the supreme court in rendering the macdonnell opinion moreover your honour's the state finance laws in this case were used as contact context it explains the scheme  tells the story it provides proof of the defendant's respective knowledge and intent had someone else affiliated with the campaign done the same thing that walter and stephen reid did had they diverted money from the campaign if the accountant for example had that would be a wire fraud case to the same one that is that exists here the elements that were presented to the jury the instructions were present to the jury were not those of the state campaign  anything else it was simply in the respective counts conspiracy and why you're a fraud and for those reasons walter reed's position of politician was again simply context mcdonnell other cases it required the defendant have that public official don't that public official status and position that wasn't the case here didn't matter other than in context to explain how he had access to the funds that walter reed was a public official  or that there were campaign matters this is also not new or novel for this court as far back as one thousand nine hundred two this court is considered public officials and their misuse of campaign funds other circuits have done so similarly in more recent years and furthermore the the matters that issue here were close calls that the counts that were charged the count with which the that walter reed was convicted of not presented to the jury the charge that was presented to the jury was correct and that the thirty thousand dollars came from a separate source of funds from j marshall james morrison not from the hospital it was the defendant that it was the defendant who brought it out that that there was a prior draft of the charge to the extent there was any confusion on behalf of the jury it would have been as a result of the admission of the prior version which was not ever presented by the government to the jerk and there's no question as it concerns the tax counts that the thirty thousand dollars was unpaid that out whether regardless of where it came from it doesn't change the tax loss amount and they they don't contest now that the thirty in any way the the the court should consider that by means of a player review but under either the plane air standard or the abuse of discretion standard the issue that judge clement you bring up concerning the trial to consider that evidence a billet and how the court considered that it was not going to be difficult for the jury to assess and to separate evidence were applied and moreover on multiple occasions judge found employed a curative instruction to specifically instruct the jury to keep certain pieces of information separate in this case as is tom noted there were witnesses that campaign a couple all three of those witnesses very six significant witnesses testified extensively both as to the hospital portion as well as the campaign finance question and the crimes took place over the same time period now the hospital counts extended much earlier but between two thousand and nine and two thousand and thirteen the schemes that were alleged with which the defendants were convicted were ongoing at the cut case the forty six thousand two hundred dollars that the district court order to be jointly and severally libel should be removed and how would we do that we modify that here i believe it would be remanded to the district  consider the portion how that forty six thousand two hundred dollars should be a elements as to all count with which stephen reed was charged and convicted were established beyond a reasonable doubt the district court in a extensive opinion had the opportunity to consider those very arguments i did so and rejected those and her predecessors before the district court have been able establish prejudice for many of the hospital counts they were sufficiently discreet for a jury to be able to consider in a portion the respective pieces of evidence and for those reasons  given the the singular purpose of the crime the overlapping witnesses as well as the overlapping time period it's the government's position that the district court appropriately denied severance both as to the towns as well as the the jointer issue and in applying the abuse of discretion standard that would be appropriate the district court did not abuse its discretion if there were no other question if i would submit to the court that this is simply a textbook fraud case if he is not a prosecution of campaign laws or ethics laws judge found his the opportunity to address all of these issues and for those reasons to disprove that the government would request that the th with regard to the thirty thousand dollars the indictment suggested that there was a deliberate omission of the thirty thousand dollars legal fees at st tammany from his tax returns that proved to be wrong the indictment was totally wrong that was a adding machine tape that we discovered and showed to the government three or four weeks before trial which showed that the thirty thousand had something else to do that was as a forty eight that was looked at as an eighteen as a simple c p a era ye they pretended all through the journey through the trial and they knew it three weeks before that it was an indictment was an error and they left it there i'd previously tried to move to strike that section and yet they went forward there even up in this court sent on we're still investigating no they knew it they were trying to finesse the jury they had charts two sets of the truth one had to sit at the same time in hospital they didn't use that one i mean that they cannot go forward with a grand jury indictment knowing it's and then when i showed him the adding machine tape they should've said well ok it's confusing let's strike but they went forward and deliberately and even at this court saying oh we're still investigating if if they're still confused by the time the jury's impaneled they should strike it too  going back to the issue of miss allen yes she was close a fact witness but what they did they package there is an expert that's what the judge fallon was saying you took over one hour talking about reading the false statement provisions and said ok you package there that's what he referred to you package her as an expert and you're not fair to the defense i e you had already excluded mr gray sextant we did not get to prepare our defense not in opening suggest that this is a case of government overreach i would ask the court to dismiss the campaign accounts in the corollary attacks comes and i suggest that there is a spillover effect and with regard to the severance your came up i did a trial and i'm up here so there's a prejudicial overflow and the judge fallon in his decision to get bond pending appeal says there's a substantial issue as to whether that spill over of campaign accounts which are not judge i would just like to address briefly two of the points the prosecution made they argued that this was not about state campaign laws this was a federal fraud case but it's not fraudulent if what you're using the money for is provided under state campaign finance law walter reed wasn't taking this money and building himself new houses he wasn't buying votes he was giving money to churches who were constituents in his parishes he was buying dinners and drinks for constituents when he saw them out at restaurants he was sending flowers to constituents he was paying his son steven reed who provided goods and services for fundraising events for the patron party open house event for safe driving initiative that was part of his district attorney's office none of these funds were converted to personal use the government keeps trying to argue that to say that it's a fraud case it's not and they also try to argue that mcdonnell is not been extended but there have been other cases and we've cited them in our briefs united states versus edwards over the seven circuit that was a witness tampering conviction that was reversed and they cited mcdonnell united states versus mary mello that was an i r s case that one was reversed by the united states supreme court and we've cited that also citing there now so it has been extended and the court doesn't have isn't bound to apply it just to that section two a one it's clearly been extended for the purposes of defendants deserve fair notice they deserve a definition of what they're being charged with and the government can't broaden their crimes by that and they argue as to the severance issue delicately instruction was made and we have knowledge that the standard is that you do have respect for jury verdicts but if the jury is given the wrong information then you can't trust that verdict and the district court recognized all of those issues and cited mcdonnell in its decision to grant appeal bond it talked about the prejudicial spillover from the hospital it cited all of these issues and we asked the court to consider that and reversed even reach convictions thank you for thank you miss towne your case center submission and we noticed that your court appointed wish to thank you for your witness to take the case in for your good work