you the next case on the calendar which is united states versus miller counsel for that case could please with the instructional error issue just briefly and then turn to the maybe more meaty issue of the participation of an interested prosecutor in this case but i'm happy to adjust that and to to start with the nd issue if the court prefers i go ahead and start with the instructional err i think now that aftershock after the supreme court's decision and shaw and then it's three man and in this court's decision on remand that the correct intend instruction is that the government has to prove that the intent to defraud is the intent to deceive and cheat and this court has held that now in an unpublished opinion the george case which quite obvious that that the correct instruction should be deceived and cheat but the once or get had not gone was a little bit of an outlier in that in that regard and now all the circuits have been brought in our are being brought into line under that shod opinion and so cancel even if we were to agree with you what is your response to the government's harmless error argument based both on the other language in the instruction including the definition of materiality that is it had any influence or capable of influencing a person apart with money or property and the description of the wire transmissions  with regard to a scheme to get somebody to part with money and start to put so many questions in one but also the facts here which are that although your client says he intended alternately to pay it back that the government says that's not a defense exactly the question is here the harmless error question because errors clear so at that point  i do think in terms of the this the instructions that intent struction is critical it's different from materiality but then the bigger thing here is that this materiality only deals with an objective question not with intent similarly the description of the scheme deals with the what the scheme in the abstract was not what the intent of your client was the only instruction i can see on and turn is the one we've just been talking about yes and mr miller's defense was that he did not have the requisite intent for wire fraud this really was absolutely the heart of his case and he said that under the unique facts of this case that the government couldn't prove that he had intended to deceive and cheat and w r c and when you look at the facts of this case he presented a lot of evidence of this that and i think the biggest thing to keep in mind is that he was holding in his hand this note for three hundred thousand dollars that any point he could hand over to the company and everything everybody would be made whole which is what ultimately happened but there are a lot of other facts as well i'm including that he was authorized to write checks as the president or managing member of the company that the company had a history of making loans over ten thousand dollars this had happened numerous times with russ lesser writing checks or with jim miller writing checks to body glove  previous managing member and also written large checks to himself there is this history of loans that were made and also that mr miller had to keep his credit perfect because he was the personal  c s credit card processing payments and so any company was going to go under if they couldn't do that his house was uncovered because of this pension but i'm not sure i understand your argument fully here if i intentionally by use of the c obtain without permission your money and person in the particular case and whether they intended to do harm to the company which is what that and sheet in i mean i mean i understand that's your argument but i kind of don't understand how that doesn't violate because the government has to prove the intent to deceive and sheet and so that he was going to that he intended to do harm to the company and his defense here were not i'm not arguing sufficiency i'm just saying that this should have been put before the jury under the unusual facts of this case given all of those factors that he was trying to keep the company going and he made those decisions in light of all of  t embezzle money from my company to invest in a gold mine in timbuktu that i feel absolutely sure will be  a great investment but of course it turns out that it's a worthless gold mine you're saying that that's basil because it was you know an investment perhaps that you if you intend not to do harm to the company then that would be a defense to the crime  that you were believe that it will all turn out well in the end which i think might characterize ninety nine percent of the con men in the country is the defense i don't i mean of that's right but but the question is what's meant by cheat yes and you seem to think it means more than just to intentionally obtain money and property by company immediately but an intent not to harm the company all to but like and i don't know any case it goes that far well i what i'm saying is that sheet if we define cheat is the intent to deprive the victim of something of value and cause harm yeah that's that's why i mean i agree with you i want to hear our government i agree with you that there's a big difference between deceit and she why do you need both right but what i don't understand is what wh y you think that a good faith belief that all turn out all right in the end it's a defect so perhaps and that's not the intent to deceive and cheat i'm talking about in this case what the evidence showed and what mr miller really the heart of his defense i mean and the government got up and said he got up on the sea and confessed all the elements of the crime because this is not a defense that he all all we have to show is that he didn't intend that he intended to deceive the company and so we're saying that that under the facts of this case this should have been given to the jury to decide that question so if the juror your view is if the jury under the correct instruction of the jury believed your client that he intended alternately to put the money back that that's a defense well it's all it's more complicated than that here because really he was his intent was i mean what his defense was that he had no intent to harm the company that he could at any moment you know this was moving money around and that he had to keep his credit perfect or the company was going to go under so it was a much worse harm to miss a payment and we're saying that that should have  write i turned to the nd issue and i just what i'd like to start doing is just by acknowledging that this was a highly emotional situation this was a company involving two best friends who'd been friends for decades their families were friends they were prominent people in the community the story was covered by the local newspapers as something that was dividing the community and they went into business together and things blew up and the friendship was destroyed and they both felt that they had been bending over backwards for each other and there was a huge sense of betrayal and at the end everything their financial connections were untangled everybody was made whole so there was no loss in this case and this is a familiar tale except that at the end of this case we have a criminal prosecution and the question that has is haunting the millers and their community is why was this case where there was no loss why was this case prosecuted and the problem is is that this son of russell lesser was an assistant united states attorney in the central district office and he was the one who reported the case to the f b i to a friend of his and then for the next twenty two dollars days during which all of the investigation was done in this case that when there when there was a  wiretap or a wired confrontation that happened a interviewed by the f b i during that entire time that the conflict of interest was not reported to the prosecutor's office and was at the end of that twenty two days that it was finally reported and given that scenario we have a clear appearance of impropriety it your position that that bad conduct that that permanently barred the united states from prosecuting your client because of the involvement during that that the reporting of it and all of the investigatory phases yes that at that point the case could could not be prosecuted under the young case which says when we look at this prosecutorial function we look at the entire length of the case and really the young cases case focuses on that investigative stage in particular so i mean you would ask us to create a circumstance that says this activity which doesn't affect really the underlying facts of what went on is something that whatever the motive was bad good whatever doesn't matter this is the end of the case the united states the judicial branch tells the executive branch you could never ever prosecute this case yes because once you have that violation of eighteen u s c section two hundred and eight which is whether once the federal prosecutor has participated personally and and substantially in a matter in which he has an interest and that this court has defined that term very broadly  far i mean i thought your argument was looking at the reported cases it's very rare that the wire fraud statute is to vote when there is no loss and in a few cases where it there is a loss that where there was no loss it's usually because the fraud was caught at the outset so there wasn't time for there to be a loss and so your argument is the improper have been if it just nor been reported by someone outside the think that young says that was it it doesn't even it doesn't even matter that you know we don't decide if there actually was impropriety it's that appearance of repeated had violated the court's injunction and so judge laskar of a place you may not have heard of called the southern district of new york appointed plaintiff's coun to be the prosecutor on the theory that he already knew the whole case so it's a matter of a fish and so you have the supreme court ultimately said no you can't do that because it's two different roles and depriving the system of the objectivists that they profit prosecutor who wasn't don't have a motive would bring to the case i'm not saying is that they're relevant but it does seem to be a very different context which well we don't have very many cases actually involving interested prosecutors i mean it's i mean to me it was fairly astonishing that there's these a couple in the this is the set of companion cases i think out of the th circuit  where that there wasn't much involvement really at all or the the conflict was certainly much less here we have such a clear conflict and in this case that it continued past you know past that there was still participation in the investigation even after the period of indictment i'm not saying there was contact with the prosecutor in the southern district but that there was you know that mr lester was continuing to investigate mr miller's employment in with the as you see in this prior civil case and was passing along advice about how to get the case the plea that participation can continue and so it is more than just that those initial twenty two days although i think that's quite significant and i you know it weren't his conversations primarily with his father he had conversations with his father he also e mailed me this is what we have what was turned over there were also e mails  h colleagues to find out about the s c c and then he did some research trying to find out about this prior civil case and what had happened with it and that continued for quite some time because the it had ended you're over but i had one operation and this is an important case will certainly give you at a time i just have one question about your theory as to why prosecution altogether was barred i don't understand why the  the central district office to shift of all charging authority to the southern district office doesn't cure whatever appearance might have occurred because i grew the sort of a surprise that this case went forward it doesn't seem like something that would warrant the attention of the federal government but nonetheless whatever taint occurred in terms of the initial interest in pursuing the case as a result of the central district involvement why wasn't it cured by having a totally independent office which presumably has no doesn't know any of these people hasn't really care about any of them make an independent judgment as to whether this want to prosecute yeah well i would say two things i mean one even though i agree that young is not you know exactly the same scenario but young does talk about to the the important thing is to think about that that a ray of of coercive methods to obtain information in investigation it talks about wiretapping all that stuff that happened before and the case before the case was sent to the southern district you know whether an investigation even would have happened or would have gone on would have proceeded in this way and that that the young case says that once we have that taint and that that concern diminishes faith in the fairness of the criminal justice system that at that point we have structural air so and also young also says that having it you know the argument in young was well there was a district court judge there who was in a neutral authority and i know you know it's not exactly the same but the court there said you know that doesn't even cure it to have a neutral party that that's overse yet and obviously if the central district office had remained the prosecuting authority throughout my i think you would have something to say there but you had a completely untainted office i just don't think it's fair to lump the federal government you know the department of justice is just one big energy right now and i don't you know and we i certainly don't think that there was i absolutely we accept this on the southern district their statements that they did not have any contact the interested prosecutor on the charging and i'm getting things going that nobody would have bothered with us and i guess i just don't find that persuasive when it was handed to prosecutors who had no interest in this and having this go forward and they nonetheless decided to charge yeah i mean i find it very curious at this case when i went forward i have not seen a case like this prosecuted honestly and i just think you know given the given this and this odd know i don't have any other way to explain it why it was pursued because i i don't see cases like this with absolutely no loss no loss that where you know it was all made good before mr miller even knew that the federal government was involved in it i don't have an answer for why it was prosecuted and i think that partly that's the question that's hanging over this case and that continues to hang over it is why  thinking your honour's and good morning i can address the question of why this case was prosecuted because i'm the one who made the decision to prosecute it i recognize that a case of this size may seem small compared to new york who are los angeles but in san diego in the southern district of california this is a case involving about a quarter of a one million dollars of untended loss on top of the tax loss is a decent little case where it comes to me with the without all of the client there if someone steals a quarter one million dollars and then when they get caught out on it they pay it back that they still committed an obvious crime that might well  be worth prosecuting for both its own terms and ford's to turn to yes your honor and particularly where as here there's also a tax consequence and i would take issue with the characterization that this case was fully investigated before it came to the u s attorney's office in the southern district of california that's that's not at all the case among the many things that i did not not to be to cicle about it but  involved there was no tax case until i referred it to the tranche of the documents that we have been reviewed in connection with that all of that happened later very little and relatively speaking actually very little investigation took place prior to recusal happening and i'm counsel i presume although you would say it very politely the government's view is that essentially except in the most limited circumstances this is an executive department decision not a judicial branch session that's exactly right and whether it's a wise one or not it can be debated but it is a decision of the executive branch and it's one that in the southern district we make routinely and i would disagree that this is a no last case for one thing the intended loss which was correctly used to calculate the sentencing guidelines which have not been challenge this sentencing guidelines for loss was over a quarter one million dollars not even counting the tax loss and well i would agree that on a restitution side for the investment there was no restitution order so there was no restitution lost on the investment there was on the tax loss and that restitution order still outstanding so it was a case that did involve l a i mean i hear what you're saying i guess i just don't find it very believable not not believe boy i thought that's the wrong word i had to just not compelling because this is really a dispute between two long time friends and they work things out it got worked out between them granted there are you know the i r s had an interest possibly but what drove this initially at least was the embezzlement ankle and i just i don't even in san diego i can't imagine that this is a you know you don't have better perhaps outweighed the overall harm the turd turn a fact but those were not the facts we were presented the point in time in which i was developing the case working on it and assessing whether there was a tax lost trying as we always do to work out something preen damon an ultimately this is where we let's put aside their the issue as to whether prosecution will be barred all together at least on on the record we have now i guess i'm i'm a little troubled that the district court didn't at least her conduct in a limited have an entry hearing at which we could have heard from a us a lesser and you know perhaps maybe some of the agents that he worked with a guest i'd like to just hear your response took it because part of the argument is that are should have been an avid entry hearing at least so that we could get the full story and not have to rely on your representation to the us and to the district court that i had no contact with that with the guy and he had no influence on the course of the investigation after the recusal occurred yes your honor and well i never to ensure a hearing in this case would not have resulted in any different outcome for one thing taking the possibility of a us a lie us are who i did not speak to in producing the discovery in trying to answer defendants discovery questions the court i'm sure has reviewed the letter that i wrote is in the ex starting point is they of course document the vast majority of their contacts in those forms but i wanted to be exhaustive and get everything out so we got the e mails and we also i just talked to them and i summarized those findings in a  letter i did not talk to us or to the extent the accusation is that he engaged in criminal conduct i mean query whether he would have been in total to invoke the th amendment right at such an evidentiary hearing so i don't know that we would have gotten the kind of information that there that they would have liked to receive and the record as it stands now shows that there just weren't from the e mails from all the communications with the f b i a usa lester did not direct them in the two small investigative st that they took prior to the conflict yes he refused for the case and that i'm not talking about the preview period i'm talking about afterwards i mean let's assume that we were to accept your argument that whatever taint existed in that twenty two days was purged by the recusal in your office coming in and taking a fresh independent look at all that it would be more concerning however would you agree that if it was a lesser in fact had maybe not directly with you but had continued to play some kind of a role in the a the case moves forward i think that would be of concern and the district court it seemed to me did never really got conclusively to the bottom of that question i believe that this because the district court assessed correctly that w a lesson was doing his office with contacting friends of the f c c drafting call as for the prize was irrelevant none of it made it to touch on the prosecution he could've been dropped in a closing argument for trial for all i know it doesn't matter he had no contact with the prosecution team with myself or agents once and so there was nothing that he was doing was material in any way to the decisions being made on how to proceed with the case what to charge what to recommend for sentencing or anything so it to some extent again whether it's ill advised is a different question whether it's criminal a different question but whatever he's doing in his own office or with his own colleagues doesn't touch on that did not affect the defendant's rights and did not cause any prejudice to the defendant because there was a neutral prosecutor this is different from young young the point of the court meeting young is that the prosecutor is in doubt was so many powers and it lists all kinds of wire taps and all sorts of investigative steps that a prosecutor can situation compared to this but i wonder if we could turn in some point i don't mean to interrupt to the to the charge is your are you seriously maintaining that it should be deceit or are and that so so let me make sure i understand so because the statute of course talks about a scheme or artifice to defraud and it common law intent which had always been more than just telling a lie but your position is that it's still good knowing circuit law spike despite all that history despite frankly the views of every other i want to gain entry to the boss of a company so i can sell my wares secretary says he's very busy who are you and i lie and i say oh i'm a close personal friend and she is ok that's good enough i'll let you go see the boss and then without any fraud whatsoever i sell the boss my wares and he's very happy and all like that but i use that laurie to get in the door and you saying that that is a scheme to defraud punishable under the wire fraud statute well you hit on it exactly there was a scheme to defraud in this case all they're telling seeing is the intense instruction there is that's only one of the four elements that the court the jury was instructed on they were still instructed that there had to be a scheme to defraud and it had to be material and then there's also of course the intent requirement and is you have to have a specific intent to defraud you're not just telling a lie here or there which in this cold cruel world of commercial activity sometimes people do you have to have and intend to obtain be a scheme to bad off you go to jail well this court did require that there be an intent to defraud it's said that it just defined intent to defraud as it in a sense to deceive or cheat which on the facts of this case your honor it's very clear that the outcome would not have well but i understand the harmless error i think the harmless error argument is a substantial and but i'm i'm surprised the government even in this late day and age was this the charge you submitted to the where was simply the pattern instruction that hasn't been changed or what how did this come about the pattern instruction it's the same pattern instruction and i double checked it yesterday and it's in the record but it's it doesn't look like it's changed since even then so not even in san diego that isn't my thing and the answer you about pattern instructions is you can go to them and they are consistent across all the districts and it does not the defense really makes a start deponent makes too much the supreme court nor the th circuit on remand in shock actually hell even in the context of the bank fraud statute that that instruction was erroneous and and and of course we're not dealing with the bank fraud structure so i come back to the fact that this circuit's law has consistently been that the model instruction a point once you for it used to have a different number but it's it's now eight point one to four deceive or cheat is a proper definition of intent to defraud and in the treadwell case explored pretty thoroughly the competing cases from other circuits in other districts and the th circuit did explore those and determined that the jury instruction used in actually which is a stain when used in this case the model instruction was consistent with the requirement to prove intent to defraud you know this court could disagree whether that those other cases were adequately  distinguished but that was none the less explored in treadwell and that was the clear express holding i see that i am almost out of time so i do want to make sure i have addressed any harmless error if i may briefly turn to that ultimately it's significant that even if the court the jury had been instructed that the requirement to meet the intent to defraud element was an intent to deceive and to cheat suggesting something more than just lying here it's very clear there was an abundance of evidence that the defendant intended to cause it least if temporary financial harm by depriving the company of money he received checks into his personal account of all the lies he told falsifying the check book to say that being checks had been transferred to another bank instead of to himself falsifying the account statements when he met with rest less or to go over the accounting and lying to rest less or all of those things show that he was intending to deprive it of money i also think it's worth noting that on in the jury instructions for purposes of the tax count the jury was instructed that a loan is not income so to the extent the jury had credited the defendant's claims that this was just a temporary loan this was very common at the company they could not have convicted on the tax counts which they did so we know that the jury rejected the defendant's testimony in his own characterization of this as merely a loan something he intended to repay so the evidence in this clay's case just doesn't support his own spin that he he wanted the jury to believe in it was rejected in would have been wanted to start by addressing the issue of the evidentiary hearing and the question of discovery because as a judgment you were asking about what how a u s a lesser was communicating or continue to be involved and i think that it's true that he was mostly he was communicating with his colleagues and he was communicating through his father but it was certainly filtering through to the f b i agent and there is that additional allegation of misconduct against  the f b i agent as well but that the question of the linster matter that that continued to be floated or continued to be a question in the prosecution there was also that he had spoken to mr miller's st attorney about his statements that be i and that was passed along through the agent and because we didn't have any sort of evidentiary hearing or even that he was a lesser road in his e mails i am not commit i don't want to communicate in my fish el e mail i want to communicate on this private e mail and the response to one of his correspondence was all that's going to be public record and he said i know that that's how i want to communicate none of that was turned over in the government's position  is that they don't have possess set but what we're asking for this and for the other discovery issues is just that the government try to get this and take a look at it when i'm not when not asking that text messages and e mails be you know turned over to the press that would be something that it ought to do yes i'm asking i'm saying that that this is an appropriate case for the exercise of the court's supervisory powers which i understand is a serious thing but there is also this you know serious allegation that that does lead us to question the integrity of this is mr lester the younger still a new usa i believe that he is yes nice does a court have any other questions about the discovery or any other topic now i think we got the arguments thank you very much for the help arguments in this case the case just are you to submit it