he went out and he found a civil lawyer now maybe found a lawyer in danbury to draft a loan agreement and the loan agreement is set forth in other mother places on page twenty of my memo basically characterizes the document as being  says this won't is made for business purposes the proceeds are being used to fund the business operations and not going to jet ski is like buying a jet ski is a business purpose well that was that's an interesting question the jet ski  wasn't that wasn't one of the charges for the fraud for the fraudulent conduct the jet ski was part of a a money laundering count and the money laundering count raises other issues just with not the government has a den of fire the unlawful source of the funds because in the indictment just to jump to this point in china raises the indictment raised talks about three separate people who gave money or loan money to be in big so which was was was more than likely was proved to be used for the jet ski purchases but it's not it was never proven as to what the source of those funds was from the any of those three people i had requested in toronto tori's to the jury the judge didn't know what you mean the source of the money i thought the government's proof was he has a thousand dollars in his bank account he then deposits a check from one of the victims who specifically identified in the mail fraud count that the jury found the defendant guilty of into that account and then he's takes money account at that time against this we're talking about in response to your honor's query we're talking only about the money laundering count not about the fraud counts there was no specific fraud count for that isn't the whole point of the fraud count that he represented he was going to use the money for one purpose and there's evidence that he used it for personal purposes well if you look at it again there's there's the government put on a live and people who testified in this particular case and then another nine contracts which i'll address that getting back to confrontation because issue again your honour's just heard but but on those eleven people the question was was it a loan do you have the right to to be so government calls it a mr big characterized it is a refinancing in other words he got the money from one person to pay another back it was businesses do that all the time with with regard to refinancing and so forth so he isn't all that's all a jury question the fact is the evidence could support the view that he asked for money on the representation that he was going to use it for business purposes and then he didn't and a jury could reasonably find that isn't that right i think with focusing on that on the jet skis just for a second get the jet is that in general not true the jet skis would just be one example of that there is purchases in other you know luxury goods of various kinds i think that was i think the evidence at trial was was just that  n our are arguments against that was that but these were these were loans and he could do with the money basically what he wanted with the white why what why do you say that if i asked to borrow money for somebody on the representation that it is a loan to a business and the money is going to be used for business purposes and then i use it for personal consumption why is that not a fraud because the person who is lending me the money is has certain expectations about whether it's going to get paid back that are based on the representations that i've made about what i'm going to do with the money but taking the take in the facts as a whole in this particular case he would go to lenders they were really investors in this case they were lenders and the lenders would loan of money and he would say in some cases i'm using the money for my internet business of cellphones and whatever was radios and in fact they did have such a business the question is when that he was a good businessman or a bad businessman my argument is that this is this should have been a civil case that he was he just a bad business maybe took the money to build he did buy some of the government's evidence would agree he did buy some cell phones and and so forth he just never really never pursued it properly and so forth in terms of the some of these specific if sources of the monies of the government some of those were normal business expenses sure did he did he take investors lenders out for dinner did he take them on a trip and so forth i don't know i b m seems to do that all the time i guess so my argument is that this is this recent recent really should have been a civil case and in fact we saw one of the people involved did bring a civil action to attempt to get back his money but our argument is that the crime victims bring civil cases if they have a defendant who is not judgment proof i would see why the fact that somebody sued someone who defrauded him makes it not a criminal case i don't i don't i wouldn't imply that i'm just saying that that in fact someone actually did do that and they could have done that the government's not a collection agency obviously this is the our claim here is that these were these were loans and everyone knew they were getting the money and my argument which that ties into is the is there any case that you can cite that says if her makes for a joint representations in order to get a loan that's ok because it's only the loan can be used for any purpose and therefore it doesn't matter what the borrower says he's going to use the money for oh no i know there's no law in that regard but it but the exact language of the of the loan itself which was drafted by by counsel competent counsel indicates in fact that he was going to use the money to fund his business business operations i think to the most to the most part you could you could argue that in fact that's what happened with regard to these expenses you could argue it and then the jury decides whether it's true or not may can argue that the government can argue the opposite well that sort of takes me to my next argument which was the crawford argument which it isn't really is really a classic proffer argument my my my  say the least absolutely my argument is that they're what happened here was functionally identical to live testimony the government puts on eleven people they testify as to what happened what mr big said my cross examination essentially had to do with the fact  that they were looking for a high rate of interest fifty percent they were looking for the money really they knew they were loans they knew they were three times as old as he was they were really taking advantage of him and so forth and that was my that was the basis of a lot of cross then the government puts on an f b i agent who says by the way here's nine more contracts there's nine more contracts and in the contracts themselves are the loans which is still a contract where the base is the nub of this entire case and so by putting on these nine contracts i was deprived of the opportunity of cross examining those people in this case it was significant because essentially the government some of those contracts for your client signature am i right about that yes some did so it's hard to see how this could possibly be testimonial for confrontation cross purposes because your client didn't create the agreements to have them in or just a trial against him absolutely not the price yes it is the primary purpose of these documents was not to prepare to d v used  trial but there are functionally equivalent in there are functionally identical to wife testimony biggest with the government the government says well we're not offering this for the truth of the matters asserted but when you when the entire case so far has been these contracts and the entire case so far has been people testifying about how horrible mr big was as to these contracts and then you say oh by the way here's another nine we're not offering him for any and for the truth of matters a certain and there were of course you are but i'm just being deprived mr because being deprived of the right then to cross examine those people please bear in mind that in this particular case there were two types of contracts if you will loans and contracts one had to do with his his so called cell phone business the other had to do with this concert business the jury found him not guilty with regard to the their contract business so he was obviously at the site the concert business so those obviously some concern in the in the jurors minds i believe that in fact it wasn't it wasn't all that clear cut about about what mr mr big was up to and in fact people may have been trying to take advantage of him which is why i think the cross examination was so necessary as to these other nine contracts i concede it's not i mean it's clearly not a crawford issue but it bothers me in my gut that the government can can put on an agent any agent in and why we have trials that just put on the agent and say what's the evidence agent and the agent rattles off documents and so forth have been seized and  government sits down and that's that's what bothers me here granted there were there were eleven people who have been witnesses who testified first as to similar almost identical contracts and that's why that's why i'm bothered by the fact that that as to the remaining nine contracts that were put on in this in this fashion that there was no cross examination yes i concede that that the primary purpose wasn't but you know it's it's it's so unclear in the serious to how far the government can go  i guess the best i can say is it was an alternate purpose it's definitely not a primary purpose but certainly it it served the government's government's interest in showing the jury that hey look at this here's another night thank you please the court mike mcgarry from the u s attorney's office for united states of america like to start off by say that there's no reason none set forth any pals brief and none said today that would lead this court to upset the verdict of guilty in this case the government introduced more than sufficient evidence for each of the counts of conviction and viewing the evidence in the light most favorable to the government crediting every inference in the government's favor the trier of fact here the jury clearly could have and did find every essential element beyond a reasonable doubt this was a straightforward ponzi scheme the district court made no errors the admission of the contracts the e mails the checks was proper the evidence is not testimonial i think it's been conceded today that it would fail the primary purpose test as the primary purpose was for mr beck to get money he used the contracts as part of his scheme as far as the other counts there was certainly sufficient evidence as to the money laundering and certainly sufficient evidence as to the to the wire fraud i think you clarified for me a little bit about these nine contracts and i'm just trying to understand what they were used for there are these contracts mr einhorn suggested these are contracts that essentially excess or an extension of the scheme in the sense that you have certain victims testify and then there is then you put into evidence that oh by the way there were also nine other investors is the point or no no the point is or was that you've got the core of the scheme you've got the scheme as it stands to be established and then you have the victims money being spent the jury knows what a jet ski is they know what the sunglasses hut is they know what embassy suites and ruth chris steak house is and then there are these other names that appear in the bank records mr galante missed you're pinto and if you look at the fifty thousand dollars that the burkes invested on july twenty six after one thousand eight hundred dollars was in the account and then after that the palm a family put in fifty thousand dollars then there was a check from another person who testified mr henry scott the father then you start seeing the spending and at some point as you go through the bank records if you would go to the government's appendix at seven twenty eight for instance you'll see a ten thousand dollars check to an anthony galante who is that well by put in the contract e mailed by mr beck signed by beck you're in essence showing how the money was spent oh so these are these are not these contracts that mr einhorn referred to the nine contracts are not contracts with investors but are contracts with other people for the purchase of goods or things of that kind as i know now by close their contracts with other investors but in the ponzi scheme money went back to them whether it was in the music venture part of the business or the electronics part of the business but they are introduced to show how the money is i sense this is about how the money was spent not a this is not a because mr einhorn implied that he wanted to get those people in to cross examine them about what representations were made to them but that's not the they're not being presented as other fraud victims who were lied to necessarily they're people who got the money they got the money they're the not to mix you may think that they were d they actually are the early investors in the ponzi scheme who suffered no loss or a little laws because they're getting money back out of the people who are testifying out of the proceeds of the loans made by the people who are there to testify that they were told this is going to be used for e mail and it is also a statement of the defendant because he signed it as the court pointed out they're not offered for the truth of the matter as to the text of the contract i'll use your money to violate tronics your use your money for business purposes but to kind of color in the edge of the scheme as to who these people are so if they were not made for the purpose of being introduced that trial correct they were made by mr beck the e mails were sent by mr beck in you know as part of his scheme and they were the ones that were nazis pursuing their search warrant were produced pursuant to a subpoena served on the defendant's companies for his business records so the primary purpose of introducing the documents to kind of mix are different sections here the primary purpose was to eliminate any question that the jury would have as to these dames appearing in the bank records  you go through you know the government's appendix seven twenty eight which sets forth government's trial exhibit sixty four you'll start to see these names as a general matter you don't need to know precisely who they  are because the lion's share of the money spent any way i mean the fifty thousand dollars comes in twenty one thousand dollars goes to the jet ski the fraud is afoot the fraud is in essence proven we don't have to prove where every dollar goes but to the extent that the jurors are looking through the evidence and says what is this well i know what embassy suites are but i don't know what who anthony lottie has i know mastro steakhouse of beverly hills is probably a steakhouse in beverly hills but who is this jonathan pinto well those contacts merrily introduced to eliminate any question that the jurors might have understand thank you the i guess the other point that i make briefly though the court has an inquiry is that as to the country wide argument or as to the argument as to do did he have intent at the beginning prior clearly the pitch that he made that he made to the individuals the way that the money was used he told people they were making sizable profits but they were not he said he was by and large quantities of pallets of electronics the coconspirator testified that that wasn't true that they only bought a small amount and when you look at the timing of the coun conviction which is july twenty fifth is the first count of conviction chronologically the it is a thirty thousand dollars wire back to the burke family that's made up of money from other people including mr tepper who  testified and after they get their thirty thousand dollars back thinking they've made a profit they turn around and give the fifty thousand dollars which is also a count i believe that's count ten which then also supports count fourteen which is the money laundering so clearly the jury was able to conclude that he had intent at the time he was making the false representations and just to go back to the documents which the court talked about if we look at the weaver case which is per curiam by this court it talks about how fraudsters cannot escape criminal liability for lies told in connection with with by by inducing victims to sign contracts of disclosure or alliance i know the court is familiar with that case but that certainly says that whether or not these vague contracts at business purposes and when that is not sufficient to cure the false statements that he was making that he could make a fifty percent return that he was buying electronics that he was that he had bought pallets and then nor does it cure the fact that the jury could look at the bank records and see by his conduct by how he was using the my any that when he was making those representations it was false finally he kept making lies afterwards which i think the jury could use just to establish or to buttress the fact that his his statements made at the time were false judge meyer found that there was fraud at the outset  and i submit that the evidence simply supports that so i guess i would just say that there was more than sufficient evidence to support the convictions on all the counts and if the court doesn't have any more questions that somebody lies after the fact countrywide there had to be a finding that the time that the fraud happened that the the federal inducement happened before the the the contract was entered into and the government talks about mr big  lying afterward telling people things afterward and that's not enough to satisfy countrywide but with regard to the nine contracts which would still bothers me the facts and was i don't understand your point here in your morally here today more or less conceded that there is no confrontation this problem so what you are now saying is that just bothers you your sense of fairness or whatever but that's hon here is it any time with respect to these contracts in your brief to this court so why should we even spend any time on it now when i said i that i i can see that it's not  of testimony in trial which these so clearly were not aware that what i was suggesting earlier is that it was an alternative alternate purpose and that even though they were clearly not prepared for the purpose of trial as your honour's heard in the last case which was seem to be the issue the in this particular case the use of these documents denied mr big the opportunity to cross examine their or their makers or having the having the procedure the government followed it with they were not early honor these people were not this wasn't a case of the government showing where the money went they could have just showed bank statements in that case or checks in that case they didn't do that this was when the government says these were these were just for the purpose of showing payment that that's not  t what is there what is it that you say was so harmful about them then there was no opportunity to cross examine about what about what what is it that they were being used by the government or ok to do that would have been defeated by cross examining the people on the other side of the contract specific leo what would it mr big say to you what we share this with they identified as victims by the government well i mean it's any i think any reasonable jury would assume their victims are nine more contracts of the same quality of the exact same a dental contract the eleven people testify why would any jurors think aha he had a contract with this person i don't believe any of those other witnesses i think that's not a fraud but the people who we didn't even hear from that's a fraud well i think if i think you're talking about a volume argument you've got you've got to live in contracts where people are cross examined as to their motives and as to what mr blix said and then you just put on nine without the opportunity then to ask those people w like what you're saying is that there you think that there was a rule for a three problem with the emission of these contracts and it would be that would depend on if the prosecutor argued them in a way that you think went beyond whatever they might show and i can't i can't and i don't want to mislead the court i can't i can't recall who was there ever an objection to the remission on four or three grounds my i believe i did in the government and the and the court ruled that they could be three or four at that was too proud that it was prejudicial i don't know that i reserve for all three issue exactly i think it was more of an issue about i objected to them being admitted in any instance in the government civil