Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cr-00491/USCOURTS-cand-3_17-cr-00491-12/pdf.json

Parties Involved:
Marc Howard Berger
Defendant
G. Steven Burrill
Defendant
USA
Plaintiff

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

UNITED STATES OF AMERICA,

Plaintiff, 

v.

MARC HOWARD BERGER, 

Defendant.

Case No. 17-cr-00491-RS-1

ORDER DENYING DEFENDANT'S 

MOTIONS FOR JUDGMENT OF 

ACQUITTAL AND FOR A NEW TRIAL 

I. INTRODUCTION 

In June 2018, defendant Marc Berger was convicted by a jury of three counts of aiding and 

abetting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2). Berger now 

moves for a judgment of acquittal under Rule 29 or, in the alternative, a new trial under Rule 33. 

For the reasons explained below, both motions are denied. 

II. BACKGROUND 

The charges against Berger arose from his role as a tax partner at the accounting firm Burr 

Pilger Mayer (“BPM”), where he oversaw the preparation of tax returns for G. Steven Burrill and 

for several of Mr. Burrill’s wholly-owned eponymous entities. Among these entities was Burrill 

Capital Management LLC (“Burrill Capital”), which served as the management company for 

Burrill Life Sciences Capital Fund III (“Fund III”), a venture capital fund in the biotech industry. 

In September 2017, a grand jury returned an indictment against Berger charging him with 

three counts of aiding and abetting Burrill in filing false tax returns, in violation of 26 U.S.C. 

§ 7206(2). The indictment alleged Berger helped Burrill prepare tax returns which falsely reported 

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Burrill’s income as less than $0. To establish a violation of section 7206(2) the government must 

show: (1) the defendant aided or assisted in the preparation of a fraudulent income tax return; (2) 

the tax return was false or fraudulent as to a matter necessary to determine whether income tax 

was owed; and (3) the defendant acted willfully. Berger conceded the first two elements therefore 

the case turned on whether he knew the money transferred from Fund III to Burrill’s management 

companies was income, or whether he believed the transfers were loans and therefore not 

otherwise taxable. 

The case proceeded to trial in June 2018. At the end of the government’s case, the defense 

unsuccessfully moved for a judgment of acquittal under Rule 29. The jury subsequently returned a 

guilty verdict on all three counts. Berger now moves for a judgment of acquittal under Rule 29 or, 

in the alternative, a new trial under Rule 33.

III. LEGAL STANDARD 

A. Rule 29: Motion for Judgment of Acquittal 

After a jury has returned a guilty verdict, a district court “may set aside the verdict and 

enter an acquittal.” Fed. R. Crim. P. 29(c)(2). When evaluating whether to grant a motion for 

acquittal the court “must consider the evidence presented at trial in the light most favorable to the 

prosecution” and resolve all inferences in the government’s favor. United States v. Begay, 673 

F.3d 1038, 1043 (9th Cir. 2011) (quoting United States v. Nevils, 598 F.3d 1158, 1164 (9th Cir. 

2010) (en banc)). The court must determine “whether the evidence, so viewed, is adequate to 

allow ‘any rational trier of fact to find the essential elements of the crime beyond a reasonable 

doubt.’” Id. (quoting Nevils, 598 F.3d at 1164). If the government fails to provide sufficient 

evidence of an essential element of the crime, the court must grant the motion for acquittal. United

States v. Katakis, 800 F.3d 1017, 1023-24 (9th Cir. 2015). 

B. Rule 33: Motion for a New Trial 

Under Rule 33, a court may vacate a judgment and grant a new trial “if the interest of 

justice so requires.” Fed. R. Crim. P. 33(a). A district court’s power to grant a motion for a new 

trial is “much broader than its power to grant a motion for judgment of acquittal.” United States v. 

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Kellington, 217 F.3d 1084, 1095 (9th Cir. 2000). In considering whether to grant a new trial, the 

court may weigh the evidence and “evaluate for itself the credibility of the witnesses.” United

States v. Alston, 974 F.2d 1206, 1211 (9th Cir. 1992). If the court concludes “the evidence 

preponderates heavily against the verdict,” it may set aside the conviction and grant a new trial. 

United States v. Rush, 749 F.2d 1369, 1371 (9th Cir. 1984). A new trial may also be warranted 

based on an “incorrect evidentiary ruling or an erroneous jury instruction if a party was 

substantially prejudiced.” United States v. Hussain, No. 16-cr-00462-CRB, 2018 WL 3619797, at 

*21 (N.D. Cal. July 30, 2018) (citing United States v. 99.66 Acres of Land, 970 F.2d 651, 658 (9th 

Cir. 1992)). “Improprieties in counsels’ arguments to the jury,” however, do not generally require 

a new trial unless they are “so gross as probably to prejudice the defendant.” United States v. 

Parker, 549 F.2d 1217, 1222 (9th Cir. 1977). 

IV. DISCUSSION 

A. Sufficiency and Weight of the Evidence 

Berger’s primary argument is that the government’s evidence is insufficient to support a 

conviction. In the alternative, Berger argues the weight of the evidence preponderates against a 

conviction therefore justifying a new trial. The only disputed element in this case is whether 

Berger knowingly helped Burrill file false returns. 

Berger characterizes the government’s case as consisting exclusively of weak 

circumstantial evidence. According to Berger, the “centerpiece of the government’s circumstantial 

case” was testimony by Burrill’s financial staff that Berger advised Burrill to change the name of 

the 2-1800 account from “Deferred Revenue” to “Note Payable” and to execute a promissory note 

to document the purported loans. In Berger’s view, this evidence is consistent with his innocent 

explanation that he believed the payments were loans. Berger also attempts to undermine the 

government’s argument that Berger must have known the loans were fraudulent based on Burrill’s 

refusal to create a promissory note. Berger contends this evidence is rebutted by testimony from 

Berger’s colleagues and from expert witness Karen Hawkins that the absence of a promissory note 

would not change the nature of the underlying transaction. Berger also points to emails from 2013 

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where Berger referred to Burrill having an $18 million debt obligation to Fund III, and to 

Hawkins’ testimony that Berger reasonably relied on Burrill’s representation that he was obliged 

to repay the Fund III transfers. Finally, Berger argues the government failed to establish a motive 

for him to assist in the filling of a fraudulent tax return.

Direct proof of wrongful intent is “rarely available.” United States v. Dearing, 504 F.3d 

897, 901 (9th Cir. 2007). Specific intent may therefore be demonstrated by circumstantial 

evidence alone. United States v. Rogers, 321 F.3d 1226, 1230 (9th Cir. 2003). For example, the 

government points out that BPM decided to treat the Fund III transfers as loans only after Berger 

learned that Burrill would owe a substantial amount of income tax on the payments. Berger also 

read and was familiar with Fund III’s limited partnership agreement (“LPA”), which forbade loans 

and advance management fees. Accordingly, Berger must have known that an “interest free, 

unsecured, undocumented loan was wholly inconsistent with the LPA.” Opp. Mot. J. Acquittal 7. 

The government further notes that Berger was aware Burrill had previously recorded the Fund III 

transfers as prepaid expenses in Fund III’s books and as deferred revenue in Burrill Capital’s 

books, rather than as loans. Finally, the government points to evidence that by November 2013 

Berger was aware Burrill had been accused of misappropriating funds, yet still signed off on 

Burrill’s fraudulent 2013 tax returns. 

Viewing the trial record as a whole, there is sufficient evidence to support the jury’s 

conclusion that Berger acted willfully. Furthermore, Berger fails to show the weight of the 

evidence preponderates against a conviction.

B. Whether Erroneous Evidentiary Rulings Require a New Trial 

Berger argues the trial record is replete with erroneous evidentiary rulings whose 

cumulative effect requires reversal of the conviction. See United States v. Inzunza, 638 F.3d 1006, 

1024 (9th Cir. 2011) (“Even if no error individually supports reversal, the cumulative effect of 

numerous errors may support reversal.”). Berger contends the prejudicial effect of the purportedly 

erroneous rulings is particularly significant here because the government’s case is weak. United

States v. Bordewick, No. CR-06-00022-DLJ, 2008 WL 4058665, at *4 (N.D. Cal. Aug. 27, 2008).

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1. Admission of Evidence of Burrill’s Fraud 

Berger argues he was prejudiced by the admission of evidence that related “only to 

Burrill’s fraud.” Mot. J. Acquittal 11. Berger specifically objects to the admission of (1) testimony 

from Burrill employee Roger Wyse, (2) testimony from Fund III investor representative Craig 

Demko, and (3) “piles of capital call letters, agreements and side letters between Fund III and its 

investors.”1 Id. According to Berger, this evidence ran afoul of the Court’s admonition that the 

government “focus its presentation of any fraud-related evidence on material that is relevant to 

what Berger knew,” and should have been excluded under Federal Rule of Evidence 403. Order 

Re Mot. In Lim. 2. Berger further contends the government used Demko’s testimony to highlight 

that the investment fund included a pension plan that benefited public servants such as police 

officers and teachers. Finally, Berger argues the government improperly invited the jury to infer 

Berger participated in Burrill’s fraud based solely on proof of Burrill’s fraud rather than on proof 

of Berger’s subjective intent.

The admission of evidence of Burrill’s fraud was well within the court’s broad discretion 

under Rule 403. See R.B. Matthews, Inc. v. Transamerica Transp. Servs., 945 F.2d 269, 272 (9th 

Cir. 1991). The Wyse and Demko testimony demonstrated that Burrill lacked the authority to issue 

himself a loan. These facts are relevant because Berger reviewed Fund III’s operating documents 

and therefore must have known the transfers were not bona fide loans. The call letters and other 

documents demonstrating Burrill’s fraud were similarly relevant to address whether the transfers 

were bona fide loans. Finally, Berger’s knowledge of the fraud is supported by other evidence in 

the record. For example, the evidence demonstrated that by November 2013 Berger knew Burrill 

had torn up the promissory note to avoid disclosing it to investors and that he was being accused 

of improperly calling capital from Fund III. 

1

 The government notes Berger did not object to any of these documents at the time they were 

admitted. Berger argues he was forced to adopt a strategy of non-objection to the evidence of 

Burrill’s fraud to avoid appearing obstructionist or unduly concerned. While Berger is entitled to 

make that strategic call, the consequences remain that any objection has been waived. 

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In short, Berger’s arguments are unavailing. The evidence of Burrill’s fraud was necessary 

for background and context and to establish the returns were fraudulent. Furthermore, Berger’s 

argument that the government misled the jury to convict Berger based solely on evidence of 

Burrill’s actions is unpersuasive considering the substantial evidence that Berger was aware the 

Fund III payments were not loans. Accordingly, the aforementioned evidence was properly 

admitted. 

2. Exclusion of Evidence Regarding Burrill’s Post-2014 Tax Liability 

According to Berger, several pieces of evidence relating to Burrill’s post-2014 tax liability 

were improperly excluded. Berger specifically contests the exclusion of (1) some aspects of Erik 

Weinapple’s testimony and (2) emails which purportedly reflect Berger’s state of mind regarding 

the Fund III payments. Berger finds it inconsistent that the government was permitted to introduce 

Sarah Schoech’s handwritten notes taken in 2015 whereas Berger was prevented from introducing 

his post-2014 emails.2

Exclusion of these post-2014 statements was proper because they were irrelevant and 

prejudicial under Rule 403, and constituted hearsay falling outside any exception. The emails do 

not qualify under the the business records exception because they were created while Berger was 

working as Burrill’s litigation consultant rather than during the course of ordinary business. These 

emails similarly do not qualify for the state-of-mind exception because the statements were not 

made contemporaneously. United States v. Emmert, 829 F.2d 805, 809-10 (9th Cir. 1987). In fact, 

by the time these emails were sent, Berger was aware of the investigation into Burrill’s fraudulent 

tax returns and had time to reflect before he made statements about his state of mind. See United 

States v. Ponticelli, 622 F.2d 985, 991 (9th Cir. 1980). Finally, Weinapple’s testimony about how 

he calculated Burrill’s 2015 and 2016 taxes is irrelevant and was therefore properly excluded 

under Rule 403. Accordingly, the exclusion of the post-2014 evidence was proper and did not 

2

 The Schoech notes were introduced under the past recollections recorded exception. Fed. R. 

Evid. 803(5). 

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unfairly prejudice Berger. 

3. Emails Written by Berger Relating to His State of Mind 

Berger argues several of his emails were improperly excluded as hearsay, specifically 

Defense Exhibits 28, 55, and 126. According to Berger, DX 28 was not introduced to show that 

Burrill “[was] personally liable for the debt,” but rather to show that Berger believed this to be true 

at the time the email was sent. DX 28. Berger also contends DX 126 was offered simply to show 

that he was contemplating the tax consequences of a sale of carried interest, and therefore believed 

Burrill was personally liable for the purported loans.3

 Finally, Berger contends each of these 

emails qualifies for the business records exception. 

The government objected to the introduction of each of these emails as inadmissible 

hearsay. Berger’s strongest argument is that DX 28 reflected his subjective belief that Burrill was 

personally liable to repay the Fund III payments, regardless of the truth or falsity of the assertions 

in the email. Read in context, however, Berger’s email asserts that he met with Burrill and that 

Burrill stated that he was liable to repay the purported loans. 4 When viewed in this light, DX 28 

clearly constitutes hearsay. Furthermore, Berger fails to establish the requisite elements of the 

business records exception. Accordingly, there was no error in the exclusion of these three 

exhibits.

4. Audio Recordings of Berger’s SEC Testimony 

Berger argues it was error to allow the government to introduce audio recordings of his 

testimony before the Securities and Exchange Commission (“SEC”). He alleges the government’s 

untimely production of this evidence forced his counsel to spend hours reviewing the recordings 

when they “should have been singularly focused on preparing opening statement and witness 

examinations.” Mot. J. Acquittal 15. In response, the government notes that it produced transcripts 

3

 Berger asserts without explanation that DX 55 was not introduced for the truth of the matter 

asserted. 

4

 The email states in pertinent part: “Met with Steve. He is personally liable for the debt issue we 

discussed.” DX 28. 

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of Berger’s SEC testimony over a month before trial. The government also argues Berger is unable 

to demonstrate “a likelihood that the verdict would have been different had the government 

complied with the discovery rules.” United States v. Figueroa-Lopez, 125 F.3d 1241, 1247 (9th 

Cir. 1997) (quoting United States v. Baker, 10 F.3d 1374, 1398 n.8 (9th Cir. 1993). In particular, 

there is no indication Berger’s cross-examination of witnesses or opening argument suffered as a 

result of any delayed disclosure. 

Once again, the government’s arguments are persuasive. Berger has not shown any 

prejudice warranting exclusion of the audio recording. Furthermore, Berger’s access to the 

transcripts well in advance of trial undermines his argument that admission of the audio recordings 

meaningfully prejudiced him. 

5. Jackie Matsumura’s Immunity Instruction 

Berger argues the Court erred in declining to provide specialized instructions regarding 

Jackie Matsumura’s court-ordered immunity. According to Berger, without a special instruction, 

the jury was free to conclude that Matsumura’s immunity, like Helena’s Sen’s immunity, was in 

exchange for the government agreeing not to prosecute her. In reality, Matsumura’s immunity was 

ordered, over the government’s objection, to protect her from being charged based on her 

testimony. As a result of the options outlined in the order, the government elected to offer 

immunity to Matsumura. Accordingly, her testimony was ultimately given in the same posture as 

the other witnesses immunized by the government. 

Berger’s argument that the jury required a more detailed explanation of the difference 

between Sen’s immunity and Matsumura’s immunity is unpersuasive. The Matsumura instruction5

was derived from the Ninth Circuits model jury instructions, Ninth Cir. Model Instr. 4.9, and 

adequately apprised the jury of the basis for, and effect of, Matsumura’s immunity. 

5

 The following instruction was given: “You have heard testimony from Jackie Matsumura, a 

witness who received immunity. That testimony was given in exchange for a promise by the 

government that the testimony would not be used in any case against Ms. Matsumura. For this 

reason, in evaluating the testimony of Ms. Matsumura, you should consider the extent to which or 

whether her testimony may have been influenced by this factor. In addition, you should examine 

the testimony of Ms. Matsumura with greater caution than that of other witnesses.” Jury Instr. 15. 

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6. Sarah Schoech’s Handwritten Notes 

Berger argues it was error to allow the handwritten notes of BPM staff accountant Sarah 

Schoech to be read into the record. It is undisputed that Schoech customarily took notes during 

meetings, for her own use. The government sought to introduce two sets of Schoech’s notes at 

trial. Berger argues the government failed adequately to lay the foundation for these notes. Berger 

further argues the government “cherry pick[ed]” the most prejudicial lines and “improperly 

attribute them” to Berger despite ambiguity about who made each statement. The notes were 

properly admitted as past recollections recorded. Fed. R. Evid. 803(5). Furthermore, Berger’s 

participation in such conversations was relevant even if some of the statements were not 

attributable to him. Any ambiguity about which meeting participant said any particular statement 

goes to the weight of the evidence, not its admissibility. 

7. Oertel Testimony 

Berger contends the Court erred in permitting the government’s expert, Revenue Agent 

James Oertel, to opine on the correct tax treatment of the Fund III transfers because this testimony 

exceeded his area of expertise. Berger also objects to Oertel’s testimony about objective loan 

indicia because it “wrongly invited the jury to convict Mr. Berger based on an objective checklist” 

rather than his subjective state of mind. Mot. J. Acquittal 18. Oertel’s testimony about loan 

attributes did not exceed his expertise given that he has audited approximately 5,000 tax returns 

and dealt with loan issues on several occasions. Furthermore, the government did not invite the 

jury to convict based on anything other than Berger’s state of mind and correctly described the 

elements of the crime in its closing. Indeed, Oertel’s testimony regarding loan indicia ultimately 

bears on the plausibility of Berger’s argument that he subjectively believed the payments were 

loans. Accordingly, admission of Oertel’s testimony was proper. 

8. Beamish Deposition and Government Rebuttal Case 

Berger argues the Court’s decision not to require Adrian Beamish to return from a trip to 

England to testify at trial was prejudicial. According to Berger, this decision forced Berger to 

depose Beamish to preserve his testimony for trial. The government subsequently introduced 

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portions of this cross-examination testimony at trial as part of its rebuttal case. Berger argues the 

Court’s ruling therefore allowed the government to introduce deposition testimony that otherwise 

would not have been available. Berger also argues Beamish’s testimony was not proper rebuttal 

testimony. Finally, Berger argues Beamish’s testimony that he did not believe the Fund III 

transfers were loans improperly invited the jury to convict Berger based on an objective rather 

than subjective standard. 

As Beamish was not a central witness in the case, the Court encouraged the parties to work 

out an alternative solution to requiring his return from a pre-arranged overseas trip. The parties 

subsequently agreed to take Beamish’s deposition to preserve his testimony for trial. The 

deposition testimony was proper rebuttal evidence because it countered: (1) Matsumura’s 

testimony that she and Berger relied on the PricewaterhouseCoopers (“PwC”) audit in determining 

whether the Fund III payments were loans, and (2) defense expert Hawkins’ testimony that Berger 

reasonably relied on PwC’s analysis in determining the payments were loans. 

As explained in the order issued on July 12, 2018, Berger’s “examination of Jackie 

Matsumura, among other evidence, has identified PwC’s audit as relevant to this case and has 

thereby ‘opened to the door’” for the government’s use of Beamish’s testimony regarding PwC. 

Order Re Beamish Test. & Berger Email Evid. 1. Beamish’s testimony about the limits of the PwC 

audit allowed the jury to assess Berger’s purported reliance on PwC. Furthermore, Berger’s 

argument that Beamish’s testimony invited the jury to convict him based on an objective rather 

than subjective standard is unpersuasive. Accordingly, Beamish’s testimony was properly 

admitted. 

C. Whether the Government’s Conduct Confused or Misled the Jury 

A trial court may grant a new trial if counsel’s misconduct during trial likely affected the 

verdict. Interstate Markings, Inc. v. Mingus Constructors, Inc., 941 F.2d 1010, 1015 (9th Cir. 

1991). Berger contends that a new trial is warranted because the government intentionally 

confused the jury by referring to deferred revenue issues on the books of Burrill entities that took 

no part in the alleged fraud. Mot. J. Acquittal 21. Berger also argues the government 

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misrepresented the facts in its closing argument by saying Berger was going to “wipe out” 

millions of dollars of Burrill’s income. Id. 21-22. Finally, Berger argues the government 

improperly insinuated that Berger conspired with Burrill to defraud the IRS despite the evidence 

that Berger urged Burrill to execute a promissory note. 

The government properly drew the jury’s attention to Berger’s consideration of other 

entities’ books to show that Berger was familiar with the topic of deferred revenue and that he did 

not typically delegate deferred revenue questions to his staff. Berger’s work on other deferred 

revenue issues supports the inference that he personally worked on the deferred revenue question 

at issue in this case. That Berger was trying to “wipe out” Burrill’s income was supported by 

evidence that treating the deferred revenue payments as loans would render the payments nontaxable. In short, the government’s arguments were fairly supported by the evidence and were 

relevant to the government’s theory of the case. Therefore, Berger has not demonstrated any 

misconduct, much less misconduct that warrants a new trial. 

D. Whether the Government Constructively Amended the Indictment 

Under the Fifth Amendment, a defendant has a right to be tried only on the grand jury’s 

indictment. United States v. Olson, 925 F.2d 1170, 1175 (9th Cir. 1991), abrogated in part on 

other grounds by United States v. Cotton, 535 U.S. 625, 630 (2002). A trial court may therefore 

set aside a verdict and order a new trial if there is a constructive amendment or a material variance 

in the indictment. United States v. Bhagat, 436 F.3d 1140, 1145 (9th Cir. 2006). An amendment 

occurs when “the charging terms of the indictment are altered, either literally or in effect, by the 

prosecutor or a court after the grand jury has last passed upon them.” United States v. Von Stoll,

726 F.2d 584, 586 (9th Cir. 1984). Alternatively, a variance exists when “the evidence offered at 

trial proves facts materially different from those alleged in the indictment.” Id.

Berger argues the government based the indictment on the theory that Burrill did not report 

the advance management fees as deferred revenue. According to Berger, the government changed 

its position at trial by arguing that Berger knew the returns were false because he knew the money 

in the 2-1800 account was stolen from Fund III. Accordingly, Berger contends the 

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“misrepresentation specified in the indictment and the misrepresentation shown at trial” were 

different. United States v. Adamson, 291 F.3d 606, 615 (9th Cir. 2002). 

The indictment alleges that Berger filed tax returns showing an income of $0 despite 

knowing Burrill’s income was more than that amount. The jury instructions and verdict form 

closely track the language in the indictment. Accordingly, the government proved what the 

indictment alleged—that Berger knowingly filed tax returns that understated Burrill’s income. The 

fact that the government sought to prove that Berger knew the payments were the product of theft 

is consistent with the indictment. The Ninth Circuit’s holding in Adamson is not to the contrary. In 

Adamson, the government attempted to convict the defendant for a misrepresentation that was 

different than the misrepresentation specified in the indictment. 291 F.3d at 609-10, 615-16. Here, 

by contrast, the government proved specifically what was alleged in the indictment. 

IV. CONCLUSION 

For the reasons set forth above, Berger’s motions for a judgment of acquittal and for a new 

trial are denied. 

IT IS SO ORDERED.

Dated: 11/15/2018 

______________________________________

RICHARD SEEBORG 

United States District Judge 

Case 3:17-cr-00491-RS Document 214 Filed 11/16/18 Page 12 of 12