first is sufficiency evidence of evidence argument that is race dumb i'll touch upon that but i want to touch most of my focus this morning on the sentencing issues that are raised in this as as was indicated in the brief in this matter this case involves the largest failure of a credit union the united states history the st paul croatian credit union in cleveland ohio basically was a credit union that was started a long time ago a church credit union it grew over the years most relevant for purposes of this case is what happened basically its last ten years of existence at that time a gentleman by the name of anthony reduce whose father was on the board of the credit union i became the credit union manager and he decided to start running the credit union like a commercial bank rather than like a credit union he granted all sorts of loans that were permissible under credit union lending standards many of these loans went to individuals of croatian descent many went to individuals of how banning descent and other people from the the balkans area where most of the credit union members were from over time when anthony basically assumed responsibility for the credit union its assets were about thirty million dollars in three years he'd raise those assets over one hundred million dollars by the time that the credit union defaulted or there fell into receivership its value was up over one hundred eighty million dollars this is a unique case because there was a tremendous amount of fraud in this case and as it relates to the sufficiency of evidence argument i think the reply brief says it best and that is that the fraud in this case wasn't necessarily frauds to induce the loans that were received on behalf of my client and myriad others others who were charged or prosecuted but they were frauds to cover up reviews his own conduct as rods well it's not it's not financial institution fraud got it it's not the fraud the fraud that was being created in this case was quite frankly the st paul credit unions fraud against the national credit union association through basically the person  i stated in the in the reply brief what the government failed to do during the trial all the reviews testified that no none of the board members knew anything about this even though they're there the value of their credit union was skyrocketing from thirty million dollars to one hundred million dollars in a three year period of time none of them knew about that that's what anthony reduced testified to but the government never called want to witness from the credit union board to say yeah but anthony was making a lot of loans that we weren't approving of the fact is most of these loans were in business is names my clients loans are all in business is names that the the board was overseeing the credit union at all it would have realized that there were all sorts of commercial loans that were being created by by  credit union manager and they were reaping the benefits of that because they were basically a credit union that was operating as a commercial bank i don't i don't understand the point of all this and said fraud is for it's well you're certainly your client was the beneficiary of it doesn't seem to be an incidental one to me and the the victim was not reduce it was either the credit union itself or whoever insured it well so he knew what he was doing all the know that my client made made made many efforts to pay it back in fact that the government's own evidence indicated that he paid back between four and five hundred thousand dollars in loan payments the ones that they were willing to credit in his business is actually created sixteen million dollars of the posits into his business accounts over a seven year period for which is four years of which he was actually in prison on another matter you know he was these were legitimate operating businesses they were generating income he was he was paying money back a lot of money if you don't pay back your loans i mean he made only incidental payments on the interest and no payments on the principle whatsoever pretty easy to have a successful business when you when you run your business on credit you don't pay the loans back well i and i'm not suggesting that even the business is where we're successful you have to look at this from the perspective of mike my client who's been an immigrant from albanian an asylum seeker someone who started driving a delivery truck started a trucking company basically with us this is a van to refuse an m b a educated bank manager don't understand where everything you've been saying goes to the sentencing issue it doesn't at all in fact that i'd like this sort of segue my way into the sentencing arguments the sentencing arguments are fairly clear and even though these seem to be in  the burdens that are that are difficult to overcome in most instances because of standards or abuse of discretion and clearly clearly erroneous the record in this case does support that the judge was clearly erroneous is that really for the l calculations i think the biggest loss in the difference here is one point six million dollars one point six million dollars less than that then the amount that was being disputed would have put my client in a handsome level of eighteen levels but as compared to the r is what sort of help lead us to what were the where the where the losses came so there we have multiple loan reconstructions basically we had to go through every loan as that was attributable to my client and because of the  he would sometimes pay my clients debts out of other people's loans and sometimes he would use deadly created in my client's name to pay other people's loans so in the one instance i put in the brief is on one day anthony created over seven hundred thousand dollars in debt my client's name in the paid six hundred thousand dollars in bad loan payments to other people's loans i mean this is the type of accounting that edward we're dealing here with in this case you've got to get it you've got to get down what below nine point five million below nine point five million had said ten point six a judge found ten point six and i'm going to get there with a two out of the three of these loans that you're quibbling with the three thirty two or the two twenty seven you get you only get you only win this unless i misunderstand  unless you win on the issue of the inclusion of these pre indictment loans that's that's that's exact that's true now if if there were simply a pre and loan that was the never modified change or anything else seems to me you'd have a pretty strong argument but what the government is saying as i understand it is that yes a couple of these loans originated creme de mint period but then they were what the word is being used here they were reset and rolled into new fraudulent loans so  i don't understand why they wouldn't be included as long as that reset occurred during the indictment period so that's the government's argument but what we have to go back to what my client was convicted of he was convicted of financial institution fraud and when he he a crude one million three thirty thousand dollars in loans pre indictment the government didn't present any evidence that those loans were the product of fraud the fact that he still has a loan balance that  then continues to roll into the the the later loans that are within the charging period doesn't change the quality of that million dollars into the fraudulent proceedings because there's no evidence that it was fraudulent proceeds and you can look at the other the other loans that mr grant did during these time periods loans that the government knows were made pursuant to proper credit union lending standards but loans nonetheless they chose not to prosecute the perfect example is frank benefic the gentleman who was my client's business partner and that also goes to to one of the arguments that loans paid for his attorneys to sell packet claims were then used that were held against my client in the last minute just so i understand this he takes out his this million thirty five one loan or a series of loans pricks it's that's the loan balance on multiple loan accounts prior to the charging period in the end day right now would i be correct in assuming that they were reset and ruled in the new loans because they became do they well because they were still do yes they were what they were they were they were loans that he was still responsible to pay on because they haven't been paid out this what i'm asking w do either because they then matured during the indictment period or they had gone into default during the indictment period even though they were not otherwise do because he didn't pay them and so therefore they accelerated  that that's not the way anthony reduces running the credit union that's the problem but hear me your problem it seems to me is the overwhelming evidence seems to be he didn't keep he wasn't paying any of us laws he wasn't keeping any of his loans current except in terms of this so called loan so are you saying that there was evidence that he was actually paying on these million thirty five they didn't need to be rolled into new loans everything was well some of his loans were current some of his loans weren't current and in this this was true of every credit union member that had commercial loans with the credit union and it reduces consider this what is the standard that we employ to determine whether the judge was accurate in concluding that the million thirty five essentially became fraudulent because of what happened during the period that there's no evidence there is an abuse of discretion motive i think it's clearly erroneous because there is no evidence that that that million thirty five was was received through through through with fraudulent inducements or through scheme an artifice the fraud there's no evidence presented as it related to that the mere fact that he still has a loan balance and i quite frankly i'm not sure how many people can pay off a million thirty five dollars thirty five thousand dollars in loans and balances on them but then they continued and a lot of the problem when mr so you're saying there's evidence in the record that he was current and all and whatever number of loans it was that adds up to the million thirty five though there's evidence in the record that that he was making loan payments but as it related to ask if he was making a loan payments was he currently on those loans at the time that they were ruled a new loans under proper accounting standards probably not ok if they weren't current he wasn't paying fraud nor he's not the one who put them into the new loans that's the whole point and he never goes is the one who's who's running the numbers here he's the one who's controlling the loan activity he's the one that's even making the loan payments might be  say he doesn't know we don't know why that he was doing what he was doing sure we know whether it's the web that conduct is charged another counter not we know he did it because your client bribed him you know what he did it for billions of other loans that  testified to weren't the product of bribes that's the whole point so he was running the bank like running the credit union like a commercial bank had plenty of loans that the government never prosecuted that were being paid back and he had those loans as well he didn't do what a normal lender does he didn't didn't excel or at the loan in fact if he would have defaulted on the loan and accelerated the my client's remedy could have been bankruptcy and then if he'd done that in the prior to the the charging parody would be held responsible for thank you good morning your honour's bridget friend and i me after the united states in this case there is proof beyond a reasonable doubt that this defendant while on county supervision federal pretrial release for approximately four years of being incarcerated in a federal prison and then on federal supervised release conspired to ending gauged in financial institutions and bribery and that using some of those proceeds to launder the money after twenty seven counts of conviction at trial the district court very carefully and correctly jack calculated the guideline range and then imposed the presumptively reasonable guidelines sentence it's been argued that this defendant was sort of a well intentioned businessman who was victimized by it the rag well intentioned businessmen don't pay bribes they don't walk out of a credit union with north of ten point six million dollars and three years committing over and over to make payments only to see at the end of their scheme as reflected in government's exhibit seventy seven a monthly interest payment balance north of said and the seven thousand dollars which as we all know is more than the gross income most americans make in an entire year and he was clearly say i mean in terms of the sentencing it's almost like he's treated like greg who i mean he's clearly not the leader of this you would agree with that right no not well you know into the regular second question on direct examination who is the most culpable person for this ride it's him but he didn't act alone it's really helpful that he doesn't say i was the most culpable but he did say that raghu said i'm the most corrupt i'm the most ok yeah he had so so you're you're agreeing with my point that for purposes of sentencing it seems very funny that given how culpable regu was this is treated as the leader of the you know he's given all these management  the little funny now when you look at the way the scheme breaks down into the regulus was absolutely the one inside the credit union and he was the leader and organizer and he got hit with that enhanced man in his own sentencing for how long is his sentence  i think he ended up with fourteen years of incarceration here and this one is twenty five and the reason being walked into the regular was never incarcerated he has no criminal history and he certainly was an engaging in this fraud while sitting in a federal prison or unsupervised release that would be the first difference the second difference would be cooperation acceptance of responsibility and he did perjure himself a trial which is all the factors that this district court or some the main driver was cooperation yeah i think i can see that i'm trying to remember specifically how his sentencing was argued but i think the main driver would become cooperation and the lack of criminal history i mean to organize or lead at least one other purpose person and the district court found as a matter of fact he organized and led are to hoax and judge me or compose the fact the testimony a trial was to lead a few more had a unique relationship with the defendant and the defendant would direct the example would be pamela goldsmith i don't know if you recall the testimony from her but there was a truck loan she was trying to get for start up business before she ever submitted any documentation to the credit union the defendant told miss goldsmith to go to the credit union and speak directly with deborah palladian that her loan had been approved and then there were government exhibits sixty seven to seventy one and  testified about those but those were loan sheets that he would generate every month about what loans were about to be in default and then the initials of those tellers would be alongside those loan resets sort of indicating who was responsible for going in and resetting the loans to make the credit union look her in so that would be the five or more participants and then another factor could we look at this this way when we're trying to figure out who's more or less culpable in all of this if the transaction had been one were the this fellow had taken out these loans and couldn't pay and the president wanted to cover that up to either show the board that he wasn't stupid for having made the loans or he didn't want to jeopardize the financial health of the institution and he just kept rolling it over you could make the argument that he was much more culpable but this transaction is one we're even during this rollover period the defendant is continuing to ask for more ask for and receive more loans that he wasn't otherwise entitle to get because of the fraud yes i mean that's really your point here isn't it absolutely and it's all consistently reflected in the quarterly account statements as elizabeth martin testified those quarterly account statements matched perfectly with the credit unions general ledger so all those numbers checked out and every quarter in the fund acknowledged he was receiving quarterly account statement every quarter it showed resets and it showed these phantom payments being made to his all empire of loans and he continued to go in and get loan additions additional money and to make those payments and he even explained this whole scheme to arthur ho and recruited him to become part of the scheme with him that was the testimony and not a trial i guess so this the defendant was not some unwitting or unknowing participant he was constantly part of this game forging documents recruiting people to go into the credit union to sign for false loans the defendant admitted he didn't make payments now there was a suggestion that the government didn't give him enough credit for payments but that's actually not true he got credit for cash payments the only transact over doesn't then make them fraudulent so what do you say that when the district court clearly found that those loans were rolled in in order to keep this entire empire going and thriving and allow him to ultimately walk out with ten point six million dollars but i would point out to your honor 's that why were they why were they rolled over so that they rolled over because they were in default because they were due both your honor they were rolled over because they had to make this defendant look current on his l or to explain why he would be getting additional loan proceeds from the credit you say the record shows that he was in fact in default on those loans when they were rolled over during the indictment period yes he was not making payments therefore they would have been in default but again part of the scheme was to rescue the default and continually reset and pull interest into principal and reset these loans but there's there's four categories of loans before specific that i understand this correctly from back in my banking days if had actually declared them to be in default they had to list them as loans that were in jeopardy and that directly affected their capital ratio and you didn't have capital to support that level of really the loans that were booked that were in default  about absolutely right and certainly the loan loss reserves would not have captured this loss amount but i would point out will the regulators would have swooped in and said either you got to close down or you got to come up with additional capital and he didn't want that absolutely and the defendant would have lost his income machine here but with respect to jimmy's trucking two hundred fifty seven thousand four hundred sixty nine dollars testified that the very first bribe he received from the defendant was in the creation of jimmy's trucking in part either by the evidence situated or by the statue of the titians correct so he enters into a false transaction that's outside the statute of limitations if he had if he had kept that loan current and was paying  during the indictment period you couldn't count that could you know we wouldn't have counted that but that certainly wasn't the case in this instance and relevant conduct allows us to go back and look at additional fraudulent transactions are never an operating entity top quality produce which makes up three hundred forty seven thousand of that one million dollar number the very first loan for top quality produce was a kite like the member first of two thousand and two when you look at that transaction it was used to go and pay down the debt on all these other loans that the defendant wasn't actually paying on and then the three hundred sixteen thousand for his personal account same thing your honor it was rolled and the district court found that w all four of those categories of loans that they were part of the scheme properly considered as relevant conduct improperly added into the last count and there was also a reference made by counsel with respect to the pack of loans and he said here the pac alone money was used to pay down frank kind of excess attorneys that's not true and it's disproven by the evidence and the record in this case frank kind of it was represented by a gentleman by the name of mr gardner his law firm was chester net wasserman yarder and pasternak and we have the the letter had from mr yarder and the defendant's appendix when you look at the pack a money that transaction off of jimmy's truck that two hundred seventy nine thousand dollars when you go into the exhibit for that and you follow it the way elizabeth martin did during trial that money was deposited into jimmy's tracking share account and then immediately wired out to two different law firms not mr jaroslaw for they were wired out to the law firms who represented the pakis liars that money did not pay on frank kind of x the terry's it paid package which is exactly what the defendant wanted to do he sought and received two letters of credit for the package that he talks to anthony rag hughes from prison about paying for that package at and then he also talked to arthur hoekstra and asked to speak with the anthony of a very similar instance came in that case as well which is a sister credit union case and the situation that the court has to consider is whether the district court abused its discretion in denying that it and the reason it did is because the information that would have sought based on what the defendant was seeking wasn't helpful or relevant he wanted regulus to explain the loan reconstructions didn't create them couldn't explain them the witness for that was elizabeth martin they didn't seek to bring her back they could have they argued about when he would have had some some things to say about reconstruction if he was the head of the whole enterprise he didn't he did not recreate those long reconstruction john or he did not do that that was a painstaking effort done by the way down in austin texas most of the time while the defendant was in carcer regulus was incarcerated so he wasn't privy to how those documents were created and he certainly didn't compare the loan documentation to the general ledger elizabeth martin was the best person for that would have called her back they didn't they wanted anthony and the other thing they wanted him to explain were at these sort of payments and again governments exhibit one c c page two governments exhibit one page three governments exhibit thirteen w those show the defendant making cash payments and then being recorded in the phone reconstructions he got credit for this one of the things he tries to say is he should get credit for deposits there's a lot of talk about deposits even s acknowledge deposits are payments and when he says he had this whole you know legitimate business going and look at all the deposits that were being made that's only one half of the balance sheet the other half and government's exhibit seventy nine show that there were incredible expenses in those businesses were operating in the red so this whole the paint deposits in payments thing it skews the analysis the analysis is payments even the defendant page i thirty five zero one said i rarely made any payments deposits simply aren't the same thing but he also wanted to come in and explain that the defendant wasn't part of these backdoor operations well first of all the defendant forged documents as we and everything that counsel has attributed to anthony reduces that relates to jimmy subject he did for everybody at the credit union including myriad individuals who were never charged or indicted in this case including frank kind of a good man who just failed as is mr business partner paid off millions of dollars worth of packet claims and the lawyers fees related to those packet claims then set him up again in a new distributorship in a new produce distributorship paid it gave him three hundred fifty thousand dollars up front the guy who had just failed in his business to start another business a freshly as a witness for the government he wasn't prosecuted there was a gentleman who was a witness for the government by the name of latimer groups and figure out why you're continuously telling us that there was other fraud going on no relevant according to the government it was another fraud that's the whole point yet yet deb what they're trying to claim is that these resets and things are a continuation of the fraud that has nothing to do with mr steele jacket that has to when in their loans included the tellers themselves included other bank employees included board members from the credit union all of that is part of the record in this case and that's why i requested permission to exceed the page limitation because there was no and it's all in the briefs as well and it can be deciphered extremely well from the briefs what was going on here mr subjects it was an albanian immigrant who was trying to live the american dream he was asking for capital to start a business is going to you're going to get our attention a as witnesses during mr soldier case trial we thought they were helpful to mr subjected to show that he didn't have knowledge of the backroom dealings of the pajama parties that he wasn't privy to all of that but that was what mr revues did along with his employees to cover work on it it's not just it's the trial lawyer i mean i believe me just tell you something i think you care about your clients if you care about your clients you learn how to moderate that because you're not helping them i politics but they took the fifth amendment they couldn't test yes but now the government wants to use them they want to use them to enhance my client by another four levels for sentencing purposes lies the government precluded from using them because they invoke their fifth amendment rights wh is the is the government was included when when will the government has the power here they they never did charge the tellers that were two years now after the trial they never did charge the tellers but because they held them in limbo i couldn't call the tellers as a principle out there that you're not allowed to use people that you don't charge i mean i'm that's actually not great for it that's not a great position for a public defender's office to take that's not in the does not the point i'm trying to make i'm i'm trying to say that the it was insufficient to use them as  rules as as part of mr subjective offense conduct because he didn't control their offense conduct he didn't control what they were doing anthony produce did that's what the record was in our efforts to try to prove that fact wrong even a trial were barred by the fifth amendment in the government's decisions not to charge mr subject he was the last person to go to trial in this case the this case was was was pending for over five years before mr subjective went to trial in the in the in the the tellers were never they bargaining and i was all going to work out i know stand all that in our two years after the trial and they still haven't been shot i'm still missing it about the tellers for the role in the offense he just got to say how many people were involved in that criminal activity he only has to control one of them and he clearly controlled the two people who work for the government that the wrong defense adjustment doesn't turn on whether he actually control the other two people or in many years i think in several cases whether even knew about the other two people it turns on whether or not they were involved in his criminal activity right in separate criminal activity related to trying to avoid a you know who else could have been a helpful witnesses are related to the roles of the tellers and reduce the witness that the judge precluded us from allowing a call he would have been and it's not just a matter of these lone reconstructions he knows what the lone amounts are for cross examining as it related to guilt or innocence i wasn't i mean i don't think it was teaching but if i tried to get into every transaction as it related to last calculations it would have been a much longer cross examination it was relevant for sentencing purposes as it related to last calculations of what we've been relevant necessarily for guilt or innocence a trial might have been it could have been it could have been brought in sort of back door but from what i've seen really helpful tellers not the client and that was that that's part of the record in another reason why and that was cross examined i think we can agree the jury didn't buy correctly or incorrectly well i mean we're talking about lost now the jury had nothing to do with the loss i'm talking about act two years saying the question of whether this was really all reg dealings are doing is or whether it was your client's doings my client requested loans granted the loan request and the jury found that it least some of them were granted because  the fraud for sufficiency because there's a tremendous amount of fraud here but it doesn't go to defrauding the financial institution it's quite frankly the financial institution has i think we understand both of your arguments really appreciate both the briefs the sentence which is eleven years longer than all three of us have had clients before we understand but the point being is i never did get did to my final argument which is the substance substantively on reasonable ask that when we understand that when we've seen before so we do know how that works all right thanks to both of you the case will be submitted we're going to take a brief