and we will begin with the st case united states versus the skiers yes q thank you good morning your my name is myra sun and i represent richard's risky the indictment in this case charged my client with engaging in a fraudulent scheme that led to his receiving just about ninety six thousand from roy bhalla my client's defense in this trial was that this transaction was not an investment but a loan that he negotiated with m bauer and did not fully repay the court will notice that the record shows that he paid about sixty two thousand dollars of that back these facts i think make clear that my client's defense was that he did not have a fraudulent intent to take mr ballers money and what matters in this case if i can begin with the issue of his sentence is the nature of that  the district court did not make specific findings about the imposition of a vulnerable victim enhanced against mr bower it led to a two level enhancement and raised my client's  guideline range to such that the high end of the range fifty one to sixty three months the high and sixty three months was actually nine months lower than the sentence my client ultimately received  and i wanted to emphasize to this court that while mr barlow was suffering from certain medical conditions and these were amply described in the government's brief and brought up a trial in fact the standard for imposition of a vulnerable victim enhanced meant comes from the it talks about unusual vulnerability once you've established some amount of vulnerability the issue is whether it is unusual and the cases that i did supplement tuesday talk about the difference between characteristics that a victim typically will have in a  case in those cases they involve trafficking victims many of them will be poor and many of them will be disadvantaged in terms of their ability to get themselves out of a situation but the question is whether it's unusual but i think that the supreme court has recently told us that when a guideline calculation is incorrect that the that there is usually going to be a serious error and that is true in this case terms of the planner and this is true court didn't actually announce that he was applying so how could you get what if and i guess i'm sorry i think that's true i mean there was a great deal of back and forth at the sentencing there is a lot of discussion about in position of the financial hardship in hanson and the court ultimately decided it would not impose that and my understanding is the then gave a calculation but he never report that was in that the in order to get to the number that he applied to get to the range that he applied you had what was in the pre sentence report and then you knocked out the financial hardship the two points for that right case that this is something that was imposed as part of the sentence and the court told us that it thought seventy two months was the right sentence within a range that it chose that included  but we think that that was ronnie asli impose imposed and so i wanted to call the court's attention to that it goes to the fact that my client's defense at this trial was that there was a loan that that it was a transaction that he negotiated still an open question for purposes of sentencing in terms of my client's right when not a question of whether it was a loan or wasn't all right this is just really a way for me to try to pivot to some of the trial issues your honour's we raised the issue of variance and i understand the government's argument that the instruction is in this case didn't call for my client to be convicted didn't require my client to be convicted based on what i'll call that the tile the scheme the part of the the claim that he my client got fifty thousand dollars from mr lee this grand master and the variance but the variance it is true nonetheless even if it isn't a fatal variance the client didn't have notice that he had to defend against a piece of the scheme that the government alleged only one truck once trial began and that was that my client went to mr lee to get money to pay back mr bala and that this in other words it's adding sort of a ponzi component to the scheme that simply was not charged in the indictment and that is our point with respect to the variance it also goes over into the issue of rule for a for b error that we raise and to be clear my reading of this record is that there is an audio which is government's exhibit one hundred and twelve that is the conversation that mr barlow recorded when he spoke to mr the ski and my client talked about how he wanted to make money from his business might auditing in order to replace repay mr ball and that's why he got the money from m lee the government didn't show and i don't think they're going to say today that my client literally used the lien money to repay power and they're not going to be able to show that my client failed to use it for light auditing  that's not that proof isn't in the record and and finally we know of course that this money was apparently turned over to my client in cash and there is no connection to the use of the wires in any way so that this component of the government's evidence simply did not support it being part of the scheme it bears also on the restitution is the court will know the court as the district court chose to impose fifty thousand dollars in restitution based on mr lee's testimony that he'd given fifty thousand dollars to my client and there is a low note that was slightly less i think it's forty six thousand something there is some lack of there's really no documentation of the kind that this court typically expects for purposes of restitution  for purposes of imposing an order of restitution there is nothing none of that kind of documentation and so we believe that the restitution portion that includes the fifty thousand dollars should be vacated leaving about the thirty four thousand i think that is that my client still owed mr bauer and the transaction also the other piece of this case that's that's troublesome is the government's use of a portion of the plea agreement that my client entered into in his st conviction and i have to be honest the st thing that struck me that was troubling was the sort of ceremonial use plea agreement this caption says united states versus richard's esky and then there's a portion that lists the charge and then it goes into this very detailed single space factual basis that is a really troubling piece of evidence under rule forward be in part because the well they could have you i think you said they could have used a conviction the fact of the conviction and so well this is what i think under rule four hundred and four b it's materiality really was very factual basis was very limited that was extremely prejudiced prejudicial i'm sorry it you saying they couldn't give us the conviction so they well let me back up my client never testified at trial if he'd gotten on the stand and said this was a loan well right then i think you could easily been cross examined with the factual basis yes in fact they're there understand their argument about why they were using yes and also the skull well so that's the that's their explanation for why they need this material and how else would they have gotten it and well st of all again if my client's defense that this was a loan it did not mean that last time when he was convicted of this others scheme that either the scope of it or the details of it make the current transaction not alone and fraud that when he never had a license to be a stock trader which was part of the earlier case and b he wasn't retired he was banned because of the earlier conviction and seen he a least at the time he entered the plea was not contending that he was taking the fall for someone else so that it demonstrates in various ways that what he told mr valma about his past was not true i think the fact of the conviction without the factual basis would have supported all of those premises your i understand that it was going to be used for that purpose and i think the court just asked me that and saying yes the fact of the conviction could have been used for that purpose i'm talking about the use of the factual basis which made clear in fact that my client's prior conduct was not similar to the conduct that was alleged in the sky when it wasn't being used for that purpose well there's a four o three prejudice that arises the likelihood of a jury again then my question is how presumably they were able they were allowed to prove that the representations he made about his past were not true how would they prove i think that the representations that he made about his past put mr barr on notice and because the context of this  you're saying they weren't entitle but if i thought they weren't child how would they prove it other than with the this talking about the i think the fact of the conviction i don't think that there is a need to put in the amount of the loss or the different entities that he purportedly used those aspects simply invited excessive prejudice i mean we often say that for a for b evidence is yes to a two point but the government did not have to put in the entire factual basis to make the point that the court is suggesting they were entitled to make and the district court certainly thought there was a need to clarify the what my client told mr ball i think obviously the defense the other piece of this is i think the defense did not agree that mr barlow was utterly surprised by it we did point out that there was another this was it got a very close knit group one of the members of it wonderful morrison did tell mr boller that he sort of parameters of the conviction of eventually after this  at trial there was no objection there was no objection is sort of like a nit picking objection to i don't want this i don't want that it was a wholesale objection that it shouldn't come in and judge burton is has certainly recognize one reason why it was defense in this case was this was a long there was not a shred of evidence to support that defense but that was the defense so evidence that he had engaged in a similar scheme previously is direct is evidence to rebut that the fence again right no your honor if you're going to deny the scheme existed under this court's precedents evidence that you committed a similar scheme previously is evidence is admissible to prove the scheme to it's intentions as a plan it's always i mean when you say this proves intention or say you're proving character that's what you're after that's what you're claiming i mean i guess the short answer is you're court's precedents allow it i mean that's that's the answer is  his relationships with rb in r p to solicit additional funds from other investors i and which i read as referring back to this earlier essence thing investors including certain people but i'm not worried about th i'm worried about the fact that the allegation is that he had this plan to do what i read in number two and he did it with her of course other investors some how did you get out of that notion and then he went to this other person who not as an investor i mean it is my understanding that in any event not as part of this scheme that's described at the beginning and got some other money and never paid it back to him but it just doesn't seem that that is part of the same thing well i guess like you how is your court that the question but there's an easier answer probably answer your question st which is paragraph eleven which is the paragraph that you were describing that is in fact the ponzi aspect of the scheme is that i'm out there trying to solicit more investors because by this time he's already losing and spending mr bali's money one of those investors identified in the indictment is bali's mother and she was not solicit the turn over a for a one k or anything like that she was solicited because she had a piece of property that mr mr or mr says he wanted to put to work whatever that means but what it certainly wasn't was the type of solicitation that was made to mr ball and the other two identified people in paragraph eleven which was to convert there for a one k so what this does show is that part of the scheme alleged and that the grand jury passed on was a scheme to solicit other people to invest not specifically in securities just to invest so app and one i mean one reading this would think that these people were investors of the kind that was referred to earlier as the essence of the scheme and  that's what the allegation is not the sponsor thing which is not an indictment with respect right you don't have to use the word ponzi i understand that but there's nothing in here about going to different people not to get them to invest money in securities and earn the investors a substantial profit but for some other purpose and some other scheme not not to sell them securities but to do something else well well the indictment  the basic core of the scheme the basic core of the scheme was the securities fraud scheme it had this tale in scheme where he part of the scheme this tail end of it where he's trying to just solicit additional money and all that concerned about the variance part  the variance you're honest correct if it comes in for some other reason even if it's not part of the charge scheme it's not a variance it's also not even if it was a variance in this case would be completely harmless because the court's instructions ruled out any possibility that he could be convicted other of the the leaf fraud happens after bol is entire account has been liquidated there's not a penny left and what you have is at that point you know trying to like i need money you know i was supposed to get money and then you have mr on tape saying that he solicited lee in part to get money for bo now whether or not he intended to do that or not he tells bob is that obviously lowering behavior right he's trying to sort of calm him down that  it also puts in context the january th confrontation with lee and phil back with ziska when they confront him about what did you do with master lease money what did you do with message well that i do agree that you have to find that it is part of this charge scheme for him to be eligible for us to should we do the government agrees with that for the for the reasons i've argued i do believe  within the term of the indictment that the grand jury passed on is just an uncharged execution of paragraph eleven but the law is clear you don't have to charge every single execution of a fraud scheme so the fact the fact that you know there is no m l or it b t l in paragraph eleven doesn't preclude the government from offering that additional proof additional executions of the scheme and i understand judge burns on your point about reading the indictment as a whole but i do think i mean the language  paragraph eleven is specifically if the government wanted to limit it to securities investors it could have just been you know securities investors instead of investors and i think factually when you look at the solicitation of dollars mother it does go to show that like this wasn't question is whether that's what he was being charged with well i mean he is told that he's trying to get investors now i suppose i could say that the defendant knows full well what he did but i understand the course point for notice and the notice is that he was trying to get additional investors at a period of time after he had lost money i think that's i put him on notice that the government believes he's trying to solicit money from other this court's decision in peter's foreclose any claim that this was plainer peters holds that when you target a fraud scheme to a victim you have reason to know is financially vulnerable to that scheme that victim qualifies as a vulnerable victim because the fraud statute is not targeted at just people who are in financial distress it's just a general thing that it's targets people for fraud so when you when you focus your scheme on this limited universe of people that qualifies you for a vulnerable victim and hence meant this isn't a case where somehow the nature of the crime takes the particular vulnerability into account in the nature  was imposing the vulnerable victim in the way that you just argued but i just want to be clear about the fact that he was doing it the way i understand it and tell me if i got this wrong is the probation office had a calculation totaled up to twenty five that included the financial hardship they objected to a lot of things the government asked for a vulnerable victim and the probation office said no so that's why it was sort of in play yes then at the sentencing hearing the judge says well if i impose the financial hardship i would get to twenty seven dollars and that could only be true if he was taking your view hearing you give reasons that the judge should impose a vulnerable victim yes i don't think it doesn't he doesn't answer them per se that's correct he did that the judge makes no specific finding about donald victim but it definitely was in play for the reasons that your honor just arti stated because when i st read it i thought it was clearly in the pre sentence report and the answer is that's not in the original calculation right ok got it that that's how that plays out with respect to  sophisticated means i e the nature of this fraud scheme and the way that the multiple brokerage accounts and bank accounts and the multiple wires in and out running this money that then funneled out to this these personal account and that falls well within the type of schemes this court has held that qualifies as a sophisticated means and one thing with respect to restitution i want to point out like i understand the court's concern about whether or not this is part of the charge scheme or not but with respect to the question of whether or not there was a a basis a factual basis for the fifty thousand dollars finding in the present report in the defendant didn't object so the defense doesn't object to the to the present report the court can lie on it as evidence of the scheme i mean masterly testified to a trial that was about fifty thousand but the prisoner's port says fifty thousand and there was no objection if we were to disagree with you on the notion that the le transaction was part of the scheme charged in the indictment so you said you can see that it can be the subject of restitution yes only i would say that it could be subject to loss amount for the guidelines because the guidelines are different but for restitution the volume i don't i don't know why that's relevant given that bala himself i thought testified that if he had known the details of the prior conviction as he later found out he would never have invested his money in the st place so that seems to me the only relevant well it seems this is part of i think the notion that the defense here was that my client negotiated alone with mr ball and that it was an arm's length law that he that no advantage was taken of him we do know that there is this situation which the holding company my client tried to have a hold the in investment vehicle said no because but the point is that you're saying the fact of conviction alone was all the government needed and i think  that the guy had been convicted but what he didn't know were the particulars and i thought he did testify at trial that had i known the particulars my god i would have never given the guy a red cent of my money well but he never even said which particulars mattered to him and that is why i think the word but not surprised does bear on evaluating whether the factual basis had to come in for that purpose the i quickly want to comment on the sophisticated means you know the th circuit does this a lot of times frankly with these enhancements the dictionary definition of sophisticated is quote highly complicated or developed complex  large number of accounts and and supposed entities and so on and it was it was not at all straightforward it was really as they are with with all due respect what i think happened here is that money went to one account and it could be traced as it left those accounts and i think it was like for other accounts i mean i'm not going to say there wasn't some movement going on but whether it was creating highly colley had it or his allegations was phony documents as i understand know well that was the initial attempt with the right so now we have phony entities phony documents for different can after that didn't work for different accounts the money is going through it really has to do with complicated or developed the last point i wanted to make very quickly with respect to the indictment is mr ballance mother didn't even testify at trial the jury didn't hear that there were these two other folks who did testify about my client trying to get them to invest i don't really don't  what i mean to me paragraph eleven standing alone might read the way they said but when you put it what next paragraph to if it comes much more questionable that's that's what i think i don't think paragraph eleven is a detail does what the government wants it to do and this is the difficulty with four o four b it's really a matter of just expanding it beyond to where we get to four hundred and three air and that's what i think happened here i don't know if the court has any other specific questions on the vulnerable victim your honor i the one thing i want to point out is i didn't make a big deal about it before but the government the district court chewed my client's lawyers out for what i thought was a rather odd reason this whole ex post facto matter and that them claiming that the earlier guidelines needed to apply and their attempt to get the reduced offense level in part because of that and the court was pretty hard on them sort of questioning their ethics which i don't think as a trial lawyer what i think could happen is that you might definitely get thrown off and forget to raise victim in that context but more importantly i think it's also important as judge boggs noted to realize that there was a lot of talk about this other enhanced meant for my clients lawyers what they saw was that probation office said this is not a vulnerable victim case i think that there was a bit of narrative in their report and think that they were relying kind of on that thank you very much th