IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

UNITED STATES OF AMERICA, )

) Case No. 3:15-CR-0438-JO 

 Plaintiff, ) 

) 

v. ) April 17, 2017 

) 

WINSTON SHROUT, )

) 

 Defendant. ) 

__________________________________) Portland, Oregon 

TRANSCRIPT OF PROCEEDINGS

(In Chambers Conference) 

BEFORE THE HONORABLE ROBERT E. JONES, SENIOR JUDGE 

APPEARANCES: 

FOR THE PLAINTIFF: STUART WEXLER 

 LEE LANGSTON 

 Department of Justice 

 Tax Division 

 601 D Street NW 

 Washington, DC 20004 

 (202)514-5496 

FOR THE DEFENDANT: RUBEN INIGUEZ 

 Assistant Federal Defender

 101 SW Main Street, Suite 1700 

 Portland, OR 97204 

 (503)326-2123 

 

COURT REPORTER: AMANDA M. LeGORE 

 CSR, RDR, FCRR, CRR, CE 

 U.S. Courthouse 

 1000 SW Third Avenue Suite 301 

 Portland, OR 97204 

 (503)326-8184 

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(Monday, April 17, 2017; 10:30 a.m.) 

P R O C E E D I N G S 

THE COURT: Put on the record that the defendant,

Shrout, has waived appearance today.

Since we're just going to talk about things -- 

And thank you for working hard to get this thing

together. And your paralegal is always welcome to join us --

MR. INIGUEZ: Okay.

THE COURT: -- and be with you at the trial, at

counsel table.

MR. INIGUEZ: Thank you, Judge. Yeah.

THE COURT: Okay. We'll start with the -- I think

we'll do the easy stuff first.

As I mentioned before, I'll conduct the voir dire for

both sides. I have the requested questions. I won't ask them

in that form, but I'll cover their experiences.

The -- the other thing is the preliminary

instructions -- you've done a great job in agreeing on almost

everything except for -- for the -- are you -- tell me what

your objections are to the Government's --

MR. INIGUEZ: So, Judge, they have two instructions.

I believe it's two that are disputed.

THE COURT: Yeah, well --

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MR. INIGUEZ: I'll start with the second one. The

one they proposed is -- Government's proposed instruction 2 is

on page 3 of their document. Deliberate ignorance.

THE COURT: Yeah.

MR. INIGUEZ: The problem there, I think, Judge, is

that goes directly against the idea of a sincerely held good

faith belief. You know, here, this is instructing that the

defendant acted knowingly if he was aware of a high probability

that a fact was true and deliberately avoided learning the

truth.

The problem here, of course, is for the good faith

defense under Cheek, you can have an irrational, unreasonable

misunderstanding or mistake of the law. And I think -- you

know, I -- I look for cases in which a Cheek instruction is

given, as well as deliberate ignorance, and I didn't find any.

And I think that's the reason why, is that it seems to be

countered to the idea that you can -- I understand the

Government, I guess, saying deliberately. But you can be

unreasonable, you can be irrational in your belief, as long as

it's sincerely held. So I think this just sort of -- if not

undercuts it, it directly conflicts with that.

THE COURT: Do you have a suggested alternative?

MR. INIGUEZ: I think this instruction just shouldn't

be given.

THE COURT: Okay. Defendant acted knowingly if you

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 3 of 36
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find beyond a reasonable doubt that the defendant was aware of

a high probability that a fact was true and deliberately

avoided learning the truth.

MR. LANGSTON: And, your Honor, if I may.

THE COURT: Yeah.

MR. LANGSTON: It may be premature to address this

instruction. We included it as one of the possible

instructions, and I know your general practice is to give

this -- give the instructions to the jury prior to the

evidence. We understand, under Ninth Circuit law, we would

only be entitled to this depending on what defense is set

forth.

However, particularly with the 514 count, we

anticipate that it likely will be relevant. But perhaps it's

better to table this until the conclusion of the evidence.

THE COURT: I think that's probably true. And I

would anticipate saying -- him saying that he truly believed

what he was doing was lawful and he did so openly and to all

comers. And so you would have to have some evidence that he

avoided learning the truth and he was reading the things he

wanted to.

But you have some admissions -- so I'll put a big

question mark on that. I doubt that I'll give it.

MR. INIGUEZ: Okay, Judge. Because I think it gets a

little too metaphysical, I think, for the jury really to be

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 4 of 36
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thinking, okay, this guy honestly, sincerely believed this

stuff --

THE COURT: It's metaphysical enough for -- to act

intentionally to defraud, and yet willingness becomes an issue

for some counts and not others.

We've had an -- another instruction?

MR. INIGUEZ: The other one is the Government's No. 1

instruction.

And this one, Judge, I think we have to look at it in

concert with my proposed -- Mr. Shrout's proposed instruction,

which is No. 2. This is essentially competing versions of the

same instruction.

What I would -- what I would tell you is my

instruction -- No. 2 -- I verbatim quoted the Ninth Circuit

cases that we're talking about -- or that we're relying on;

whereas, the Government is kind of -- what? Using their own

language to synopsize, in a way, what the cases are saying.

And then I think actually going a little further than the cases

would warrant.

For example, their Instruction No. 1, after you list

these indicia or hallmarks of -- of what would be, you know,

genuine financial instruments, they say: 

Such obligations are illegal, regardless of their 

status as negotiable or nonnegotiable. 

Well, that's an overstatement of the cases, I would

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 5 of 36
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say.

We're talking, here, about Howick case and the Salman

case. And in -- in Howick, there was a negotiable instrument.

It was a currency. In the other case, it was -- that was --

the document was actually marked "nonnegotiable."

What the -- what the courts are saying is that you

can't rely on one of these indicia. One indicia won't take it

either way. Right? It doesn't win the day for you or -- you

have to look at the entire document and see what the indicia of

genuineness are.

So although in Salman they did say, "This document,

even though it's nonnegotiable that doesn't win the day for the

defendant," it's a little too much to say simply that they're

illegal regardless of whether they're negotiable or not. It's

one factor to consider. And that's why, you know, the

paragraph right above talks about those various factors. So I

would certainly want that out. 

Like I say, I just -- in my instruction, I tried to

go with exactly what the court said so that there wasn't an

issue here. And so I would ask the Court to instruct on

Mr. Shrout's No. 2, rather than the Government's No. 1.

The other problem I have with the Government's

instruction is that it then is the intent to defraud, right?

These are supposed to be definitions. And it does define -- it

goes on to define intent to defraud. And it seems like they

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 6 of 36
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are adding, maybe, one sentence here on good faith. Whereas I

think -- and I have proposed -- a separate instruction that

there be a good faith defense to this.

So I don't think it's correct to just toss it out in

the -- you know, in these -- in this definitional section. The

Government says, simply: 

Further, in determining whether he acted with 

intent to defraud, you may consider whether he had 

an honest, good faith belief in the authenticity 

of the documents. 

THE COURT: Don't go too fast.

MR. INIGUEZ: Okay. So that sentence there.

And then the -- the next sentence, one who acts with

honest intention is not chargeable with fraudulent intent.

I mean, if we were actually looking at this

instruction, I would say, well, you know, it's an open issue.

It's whether you've charged somebody who has an honest

intention. I take issue with the language here.

But I think, just as for the tax charges, we have the

instruction on the elements of the offense, and then you have

the defense, the Cheek instruction. 

Here, I agree -- you were the other day noting that

willfulness is an element of the Cheek defense but good faith

is a separate defense to intent to defraud. And I think the

parties are in agreement on that.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 7 of 36
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So what I would propose is the instruction that Judge

Simon gave in the Stephens case. And that's what I gave you,

as well as the Ninth Circuit's opinion in Molinaro where that

came from. And I think that's just the better form to have the

514 instruction on elements, and then the next good faith

defense; just as we're dealing with the tax instruction on the

elements for 7203 and then willfulness and the Cheek defense

right there.

THE COURT: Response?

MR. LANGSTON: Yes, your Honor.

I mean, I think the Ninth Circuit case law -- I'll

talk about good faith first -- is fairly clear that once you

tell the jury to act with intent to defraud means an act with

intent to deceive or cheat, and give that specific intent, you

actually don't need a good faith instruction at all.

Now, the Government's included one here, in part

because the jury is going to hear the Cheek instruction with

respect to tax counts. And we think this provides

clarification with respect to the different standard for 514. 

We think we've clearly stated the law there and

provided the defendant -- and laid out the good faith

instruction as part of that. I think to add a separate

instruction as to good faith muddies the waters more than just

as part of the definition of intent to defraud allows the

defendant to argue that he has a good faith belief in the

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 8 of 36
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authenticity of the documents and that negates his intent to

deceive or cheat.

With respect to the rest of the instruction, the

Government did follow the Ninth Circuit cases here. In

situations where we did paraphrase, it's simply providing

additional context rather than laying out additional language

that would confuse the jury.

I actually think the defendant's instruction and the

Government's instruction are not too far off. And the

Government's instruction No. 1 accurately reflects the case law

and provides the jurors with the information --

THE COURT: I don't perceive there's a real dispute,

then.

MR. INIGUEZ: I would agree, your Honor, that we're

not too far off. I just think it's probably the better

practice, if we're using this case law, just to say what the

cases say, rather than sort of, you know, elaborating on the

paraphrasing --

THE COURT: Judge Simon, and elsewhere, used the term

"family"?

MR. INIGUEZ: Right.

THE COURT: What the heck does that mean?

MR. INIGUEZ: Saying family, class of documents.

THE COURT: Huh?

MR. LANGSTON: So I think that is directly from the

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 9 of 36
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case law.

THE COURT: I know it is. But that doesn't make

it -- we've said many times, don't use the appellate opinions

for your instructions. And I'm not going to use an expression

I don't understand.

MR. INIGUEZ: Right.

MR. WEXLER: And if I may, your Honor, just to sort

of follow up on what Langston said, the Government specifically

included the good faith instruction as it regards to intent to

defraud within the definitions related to 514 and not in a

separate instruction, so as the jury would understand that this

definition is specifically related to 514.

By giving them a good faith instruction separately,

it does increase the chance that the jury will misapply that

instruction to other statutes that have also been charged.

THE COURT: I'll try my best to keep them separate.

MR. INIGUEZ: Well, Judge, and that's why, in mine,

what -- I start off by saying is -- for the good faith

instruction. And I think it's a little -- you know, to -- to

hide the good faith defense within the definition of intent to

defraud, that's, I think, my problem. I think we need to pull

it out for the jury, and tell them the good faith is a complete

defense to a charge of violating Section 514. That makes it

clear. It doesn't -- it doesn't muddy anything because it's

making clear that it's for that particular charge only. But I

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 10 of 36
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think to sort of --

THE COURT: As I said, we will make it clear as to

which charges we're talking about.

MR. LANGSTON: Judge, I just also did want to

highlight one particular difference between the Government's

proposed instruction and the defendant's proposed instruction

is that at the bottom of the Government's proposed instruction

No. 1, fictitious instruments include even bogus instruments --

THE COURT: Will you speak a little more slowly and

clearly.

MR. LANGSTON: Yes, your Honor.

THE COURT: Because, you see, this is Amanda LeGore,

and she's been with me for over 25 years. And she'll frown at

you if you go too fast. And the jury will, too.

MR. LANGSTON: Yes, your Honor.

Include documents that a prudent person might be

unlikely to accept as genuine. And I think that is very much

an accurate statement of the Ninth Circuit law. We anticipate

that the defense in this case may well include something about

the fact that because the amounts were for a trillion dollars,

no one could accept these as real.

And so we think it's important that the jury be

instructed that even if a prudent person might be like --

unlikely to accept them, provided they bear a resemblance to

the -- to actual documents and the defendant having an intent

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 11 of 36
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to defraud, that he's still liable under 514.

THE COURT: All right. I think that we will come up

with a composite, then.

And I do pre-instruct the jury to a degree, realizing

that these are preliminary instructions. And that I will

supplement them later. Repeat them and supplement them.

So a lot of times, previously -- well, judges have

not even instructed a jury beforehand. And so I want to have

them realize what they -- what they have to decide, rather than

saying, by the way, after a week, you should have been paying

attention to this and this.

So it's a vast improvement for them. The -- I looked

over your list of witnesses, and you have nine, which is fine.

Any particular problem with the witnesses that the

Government's going to call?

MR. LANGSTON: Your Honor, if I may, one other issue

with the jury instructions is defense Instruction No. 6.

THE COURT: Yeah.

MR. LANGSTON: Defining "void." The Government

thinks that instruction is improper.

THE COURT: I don't think it's necessary. Void is

void.

MR. INIGUEZ: Judge, here's the reason we've raised

it. I'm sure you've looked at these --

THE COURT: Yes, I did.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 12 of 36
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MR. INIGUEZ: Each one of them, on their face, says,

"Void where prohibited by law." And I think most people might

have an understanding -- a general understanding, a lay

understanding what "void" means. But I think to give them the

legal understanding of that meaning, I think that would help

them in determining what this exactly means on its face.

THE COURT: Are you claiming that those are -- have

legal effect in this case?

MR. INIGUEZ: No. I would say that by using the word

"void," indicates that they're null. That they're ineffective

legally, where prohibited by law. If the Government's theory

is correct, that they're prohibited by law, then they are on

their face void, of no legal effect. That's what the documents

say on their face. I'm just concerned that a juror is not

going to understand the legal meaning of the word "void."

THE COURT: Well, what is the legal meaning of this?

The fact that you're a notary from some Excalibur, or you've

been -- it's nonsense. So I'm not going to worry about it.

MR. INIGUEZ: Okay.

THE COURT: I appreciate the position you're in.

MR. INIGUEZ: Yeah. And, obviously, I'm offering the

instruction. I think it goes to the document, so I would ask

that it be instructed. But I hear you.

THE COURT: Yeah. Anyway, I have said what I've

said, I wanted to say.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 13 of 36
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My question was, did you have any problem with the

witnesses that they've listed?

MR. INIGUEZ: I don't think so. I am not sure -- the

initial list was 16, I think. 

Right, guys?

THE COURT: Down to nine.

MR. INIGUEZ: So I'm not sure exactly which nine

we're talking about now.

THE COURT: He gave you a copy of it.

MR. INIGUEZ: A new list?

MR. WEXLER: Yes. And it's just, for the most part,

the custodians that have been excluded. But it will be --

THE COURT: We'll --

THE CLERK: Do you have a copy of this. You can have

that.

MR. INIGUEZ: (Handed document.) Oh, yeah. Right,

right.

THE COURT: It looks innocuous.

Now, I haven't played that DVD. Does that have the

statements being made by the defendant?

MR. WEXLER: From the defendant's exhibits, your

Honor?

THE COURT: No, I thought -- I -- excuse me. I just

got a DVD.

THE LAW CLERK: Right here, Judge. That was from the

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 14 of 36
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defendants --

THE COURT: Oh.

MR. INIGUEZ: That was from his website, his YouTube

channel.

THE COURT: What's in it?

MR. INIGUEZ: It's him introducing -- it's the first

YouTube presentation that he gives. And it's kind of him

explaining what it is that he's doing.

THE COURT: Do you know what it is? Did you get a

copy of it?

MR. LANGSTON: Yes, your Honor.

THE COURT: Have you played it?

MR. LANGSTON: We haven't played the DVD itself, but

we've been to the YouTube channel and watched it.

THE COURT: How long is it?

MR. INIGUEZ: 20 minutes.

MR. LANGSTON: And the entire thing consists of

hearsay.

THE COURT: Okay. I'll be looking at it. 

But back to -- you have a cropped version of the

defendant making admissions of a party opponent?

MR. WEXLER: Yes, your Honor.

As we submitted -- I can't remember exactly where we

submitted it, but we did list the timestamps during which we're

going to play the video. So the jury will only see, in total,

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 15 of 36
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I believe it's seven video clips. They total about 20 minutes.

THE COURT: Just give me a brief summary of your

most-telling admissions that he made.

MR. WEXLER: Yes, your Honor.

In the videos from -- the video clips from both

Orlando and London, the defendant walks a seminar class through

the creation of a nonnegotiable bill of exchange, which the

defendant is charged with filing --

THE COURT: What does he say?

MR. WEXLER: He says he doesn't know what any of the

words mean. And, in fact, he says, "Which is pretty cool,

because if we don't know what they mean, they don't either."

And he's referring to the Government and the banks.

THE COURT: That's the essence of it?

MR. WEXLER: Yes, your Honor. 

In another part of the clip, he mentions how he came

up with the idea of putting a stub on the document because he

thought it would make it seem more complete.

And so the Government's argument is that he's

attempting to make this document appear as legitimate as

possible in order to trick someone into actually crediting it.

So by adding this stuff --

THE COURT: Is he telling the audience that they

should do specific acts?

MR. WEXLER: Yes. He's telling -- you know, with

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 16 of 36
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regards to the sub -- stub, he actually says: 

You can do this or you can not do it. We haven't 

had success with it. I thought it would work. So 

you -- you can try it. 

In regards to the other aspects of the bill of

exchange, he does specifically say: 

Look, this is where you put your Social Security. 

Don't put any dashes. Make sure that's just your 

straight Social Security number. This is where 

you put this. This is where you put that. 

He walks them completely through the creation of --

THE COURT: Is he telling them then you won't have to

file income tax?

MR. WEXLER: In those clips he does not address the

filing of income taxes. 

And, your Honor, the Government's clips generally do

not go to the 7203 counts. They go to the 514 counts. And

most particular, Counts 10 and 13, which is the nonnegotiable

bill of exchange the defendant sent to the Treasury.

In another, clip -- and I apologize, your Honor. I

didn't bring my notes as to the clips, so I'm going off the top

of my head.

In another clip in San Antonio, he talks at length to

his seminar about the concept of wishful intent and how to get

around willful intent. And that if you actually intend to do

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 17 of 36
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something, you should be judged guilty of that act.

In the St. Joseph -- I believe it is -- Missouri,

video, he actually tells the seminar that they should juice up

the numbers on these documents, and specifically instructs them

to lie by saying, "You should put 10 million dollars instead of

ten dollars," for --

THE COURT: I remember that part.

MR. WEXLER: And -- because that's what the Treasury

is looking for. They're not looking for a 10 or hundred dollar

debt.

THE COURT: Okay. This is what I -- are you going

to -- who's going to make an opening statement?

MR. LANGSTON: I will, your Honor.

THE COURT: Okay. What I want you to do is to

clearly define in your opening statement the distinction

between these two main counts and the elements. I want you to

point out, These are the elements you must find for this count,

these counts. And these -- these are the elements you must

find for these counts.

And so the jury will know in their own mind, and

state it precisely where you think good faith is relevant and

where it is not.

MR. WEXLER: And, actually, your Honor, I did find my

notes as to the other videos, if you would like me to address

the other video clips as well, I can.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 18 of 36
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THE COURT: Just a moment. Let's just do one at a

time.

MR. WEXLER: Oh, I apologize, your Honor.

THE COURT: And he's going to give the opening

statement?

MR. INIGUEZ: He is, Judge.

THE COURT: All right.

MR. INIGUEZ: I won't jump there yet, but maybe we

can talk about closings when we're further along.

THE COURT: Okay. Now, for defense witnesses, is he

going to testify then?

MR. INIGUEZ: He is.

THE COURT: And is there anybody else?

MR. INIGUEZ: Well, I gave you the list.

THE COURT: I didn't see anybody else.

MR. INIGUEZ: Oh, no?

He listed the agent, the special agent for the I.R.S.

THE COURT: Oh, yeah, I did.

MR. INIGUEZ: He, of course, will be cross-examining.

But he would like to call -- call the agent, rather than

cross-examine --

THE COURT: Whatever.

MR. INIGUEZ: Yeah.

He listed Mr. Wexler as a witness, and gave the

reasons. I think he gave a little summary of why.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 19 of 36
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THE COURT: Yeah.

MR. INIGUEZ: And he listed the Attorney General for

Oregon, Ms. Rosenblum. And I think --

THE COURT: I didn't see that.

MR. INIGUEZ: Yeah, yeah. So he listed those --

those three --

THE COURT: I would need an offer of proof as to each

one before they'll -- I'll even permit them to be called.

MR. INIGUEZ: Okay.

THE COURT: But -- there's no prohibition against

calling another lawyer, if it's relevant.

MR. WEXLER: A couple of conditions, your Honor.

THE COURT: Highly frowned upon, but it's not

impermissible.

MR. WEXLER: There was, in the defendant's filing, a

proffer as to each witness, and the Government strongly objects

to all three, based on the proffer.

First, as Mr. Iniguez stated, Agent Hill will be a

Government witness, to the extent that the role of the I.R.S.

is relevant. And, actually, Agent Hill won't be the only

I.R.S. witness of the Government's. There will be two other

I.R.S. employees. The defendant can cross-examine them as to

the role of the I.R.S.

THE COURT: Sure.

MR. WEXLER: Two, the proffer for my testimony is to

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 20 of 36
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establish the Providence of the case and to establish that the

case is bonded. Also to testify to the issuance of certain

bonds on the basis that if those bonds --

THE COURT: I don't know what they're talking about.

MR. WEXLER: Exactly, your Honor. It's completely

irrelevant. I have no personal knowledge of any of that

information and --

THE COURT: I'll be excluding it.

MR. WEXLER: And, finally, the defendant has

proffered that Ms. Rosenblum, Attorney General Rosenblum will

be called to establish whether the charged statutes are

constitutional and, therefore, relevant. Which, as the

Government --

THE COURT: Not going to happen.

MR. WEXLER: Yes, your Honor.

THE COURT: She doesn't even have to be -- respond.

Nor do you.

MR. WEXLER: Thank you, your Honor.

THE COURT: All right. Well --

MR. WEXLER: And then if your Honor would like to

then address the Government -- the defendant also, in addition

to the proposed video, proposed three additional exhibits. And

the Government would note for the record that, first, the

defendant's proposed Exhibit No. 2 is already admitted into

evidence as Government's Exhibit 11-17. That is the

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Treasury -- the Office of International Treasury Control

Certificate.

THE COURT: Sure.

MR. WEXLER: Two, the defendant propose the Exhibit

No. 4, which is a -- purports to be a certified record of the

state of Delaware as relating to the Internal Revenue Tax and

Audit Service, Incorporated, is not the I.R.S. And so that

document is entirely irrelevant to this case.

And, finally, the statement made in defendant's

proposed Exhibit No. 3, which is the United States's answer and

claim in diversified metals.

THE COURT: Well, I don't know what in the world that

is.

MR. WEXLER: Well, specifically, your Honor, I

believe the defendant is referring to paragraph 4 in that

document, which is a pleading by the United States in the case

in which it denied the Internal Revenue Service as an agency of

the United States Government. It's actually accurate, the --

the Internal Revenue Service is an agency of the Department of

Treasury. And the Department of Treasury is a department of

the United States Government. So to the extent that that's

accurate, it's an accurate statement of law. But the function

and proper role of the I.R.S. --

THE COURT: It's a stupid thing to deny.

MR. WEXLER: Yes, your Honor. Yes, your Honor.

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MR. INIGUEZ: Maybe on that, Judge, if we could

stipulate as to the correct statement that Mr. Wexler just

made, that may be helpful, I guess.

THE COURT: You make it --

MR. WEXLER: And I believe that's actually how it's

phrased in the Superseding Indictment, your Honor, but I could

refer back to that. But it's generally our practice to refer

to the I.R.S. as an agency of the department of --

THE COURT: You just make that statement in your

opening statement.

MR. LANGSTON: That the I.R.S. --

MR. INIGUEZ: Department of Treasury.

THE COURT: But that pleading is not going to be

received. None of those will be.

MR. WEXLER: So then, your Honor, the only question

mark is the defendant's video, which I understand you haven't

had a chance to review. Mr. Langston has reviewed it, and we

would object to it as entirely self-serving hearsay.

THE COURT: Well, we'll take a look at it.

It's going to be helpful to the jury to hear what

this fella is saying to these audiences in London and around,

to get some context to this.

I appreciate that his own statements are hearsay

under our rule, unless they fall within one of the exceptions:

Inconsistent, recent fabrication, identification. They don't

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 23 of 36
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fall under those. But, on the other hand, this jury will want

to know what is this guy saying out there.

MR. INIGUEZ: And, Judge, I think, just to go to that

issue, before you look at it, right, we were introducing all of

these other statements from all of these other seminars. This

is a YouTube video that he presents to the world, as it was.

And I think in order to have the completeness of his statements

be known to the jury, I think it's important for this to be

heard. And, again, it does go to that sincerely held belief

that he has. So I think it is relevant and important for them

to hear it all.

MR. WEXLER: To that effect, your Honor -- I'm sorry.

Did you want to --

MR. LANGSTON: Yeah. And, your Honor, I should note

that -- so this is not a speech that he gave at the seminars.

This is an entirely separate set of talking points that he

made --

THE COURT: Where did he make them?

MR. LANGSTON: -- on his YouTube channel.

He is literally speaking to the camera in his

apartment. It doesn't speak to any of the documents contained

in the 514 counts.

THE COURT: What?

MR. INIGUEZ: He kind of -- what it is -- he says,

"This is the first time I'm doing this. My first YouTube."

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And he's trying to explain why he's doing it.

THE COURT: I'll look at it. It sounds awfully

self-serving. The point now -- but I was hoping to have a

sniglet of him -- what he's saying to a live audience in a

hotel environment.

MR. WEXLER: Well, your Honor, to the extent that the

Government's video -- they've all been taken at seminars and in

a live environment.

THE COURT: I think that would probably do it.

MR. WEXLER: And the other thing I would say about

the YouTube video is that the defendant can get on the stand

and apparently will get on the stand and say all of the things

that are in his video and simply say that I put up a video on

YouTube saying that. The video itself is out-of-court hearsay

and should not be available.

THE COURT: Well, after he testifies, we'll see if it

needs any -- if it's simply cumulative, it won't happen.

MR. WEXLER: Thank you.

THE COURT: Okay. Anything else?

MR. WEXLER: Yes, your Honor. I apologize.

And these are --

THE COURT: Don't apologize. We're here to -- this

is hard work, when we're dealing with a person who wants to

represent themselves, who have no legal training. They are all

over the block. And so counsel's got -- he's trying a case

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 25 of 36
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with his arms tied together.

Anyway, go ahead.

MR. WEXLER: So, your Honor, I have -- the Government

has a few points that we could either resolve today or we could

resolve tomorrow.

THE COURT: Better do it right now.

MR. WEXLER: So the first is the Government intends

to introduce via judicial notice under Federal Rule of Evidence

201, a copy of 18 USC 514 that is more complete than what is

contained in the jury instruction. And, specifically, the

reason why is that 18 USC 514(b) refers to definitions

contained in 18 USC 513.

And a copy of 18 USC 513 was found on the defendant's

computer and has been admitted as Government's Exhibit -- part

of Government's Exhibit 11-8.

What the Government would like to do is to establish,

one, that the defendant knew of 18 USC 514. And the Government

will do that through an alert that was found on the defendant's

computer specifically referencing 18 U.S.C. 514. Show 

18 US 514 where it references 513. Make it clear that 514 was

not on the defendant's computer but 513 was. 

THE COURT: Can't you save that for your

cross-examination of him?

MR. WEXLER: Yes, except the defendant could always

decide that he doesn't want to --

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THE COURT: Well, I don't want to give an exhibit of

what the law is. It's my job to do that via instruction. I

think that you can do that when he testifies. And if he

denounces it, then you can make your offer.

MR. WEXLER: Very well, your Honor. The second item

is while --

THE COURT: And there's nothing that prevents you

from blowing that up, any portion of my instructions. Both

sides can blow up and -- in your closing -- even in your

opening statement, but preferably in your closing argument.

MR. WEXLER: Yes, your Honor. And I do intend to do

that. It's just that this particular part of 514, since it's

not relevant to the jury's deliberations, is not part of your

instruction.

THE COURT: Well, you do it in your --

MR. WEXLER: I think cross-examination will work,

your Honor.

THE COURT: If it doesn't, you can do it in your

closing argument.

MR. WEXLER: Thank you.

THE COURT: And perhaps in my closing instructions.

MR. WEXLER: The other two items, the Government --

as you may recall, your Honor -- agreed to withdraw

Government's Exhibit 11-9 and 11-10 and simply refer to them in

summary.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 27 of 36
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In going back through our evidence, however, there

are two specific documents in 11-10 that are highly relevant to

other documents that have already been admitted.

THE COURT: Is that part of the summary?

MR. WEXLER: They're part of the summary, your Honor,

but the content is very specific.

THE COURT: Well, if they have independent relevance,

that's fine. The fact that he has a summary doesn't prohibit

you from using specifics, obviously.

MR. WEXLER: Yes, your Honor.

It's just that they are not currently admitted

because they were excluded as part of 11-10.

THE COURT: Oh, I see.

MR. WEXLER: So the Government would simply suggest

that they be admitted as Government's Exhibits 11-20 and '21.

And we could either do that at the --

THE COURT: Identify them more clearly, other than

number.

MR. WEXLER: Yes, your Honor.

They are in Exhibit 11-10, page 34, which is a

template of an international bill of exchange for credit to

Metro Grant Holding. That is the same IBOE that's charged in

Counts 10, 11, 8, and 9.

And then also 11-10, page 139, which is an IBOE

template to -- and someone known as Father George Abdulrahim

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 28 of 36
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Mouselli. 

THE COURT: Spell that.

MR. WEXLER: I would have to do it off the top of my

head, your Honor. But I believe -- 

THE COURT: Well, that's good enough. Phonetically

is fine.

MR. WEXLER: Thank you.

And that relates directly to an item that's been

admitted as Government's Exhibit 11-8, a joint venture

agreement that proposes the defendant make an IBOE.

THE COURT: When I said you didn't have to spell it,

but would you please do it phonetically.

MR. WEXLER: Oh, oh. I'm sorry, your Honor.

THE COURT: For Amanda.

MR. WEXLER: It's Father George Abdulrahim Mouselli.

Is that good?

THE COURT: Got it?

THE COURT REPORTER: (Nods head.)

MR. WEXLER: And so, your Honor, those two exhibits

are what the Government would propose as 11-20 and 11-21.

THE COURT: Okay. There is no objection. They'll be

received.

MR. WEXLER: And then the remainder are just

housekeeping items, your Honor.

The first is Kristin Ellinger, who is the revenue

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 29 of 36
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agent in the Government's case, as noticed in our trial brief

and I believe in our witness summary.

Ms. Emminger will be testifying last because she is

testifying to certain tax implications of the defendant's

conduct, and she must take into account the entirety of the

admitted testimony when doing that.

THE COURT: Fine.

MR. WEXLER: Draft schedules have already been

provided to the defendant. But before Ms. Emminger testifies,

the Government would ask that we take a break, so that

Ms. Emminger can actually finalize --

THE COURT: Just alert me when that happens.

MR. WEXLER: Yes, your Honor.

The other item -- well, a second item is that, as the

Government has informed and the Court has seen, Ms. Becker, the

Government's --

THE COURT: Yeah.

MR. WEXLER: -- witness, is not in good health and

cannot sustain remaining in court --

THE COURT: Do you really need her?

MR. WEXLER: Yes, your Honor. Absent a stipulation

to the deposition --

THE COURT: Well, it would appear that she's not in

good health, and this would be former testimony?

MR. WEXLER: Yes, your Honor.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 30 of 36
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THE COURT: Subject to -- prior testimony under oath,

subject to examination?

MR. WEXLER: Yes, your Honor.

THE COURT: It will be admitted on that basis. She

doesn't need to appear.

MR. WEXLER: So to that extent, your Honor, would the

Court allow the Government to play the video of her testimony

for the Court?

THE COURT: Either way.

MR. WEXLER: Okay.

MR. INIGUEZ: Judge, Mr. Shrout would -- when he was

here the other day, he did object to that.

My understanding -- you know, there's this

relationship among these folks. Right? The gal that you

allowed to stay in the courtroom, Ms. Bekken, Patricia, is

really good friends with Ms. Becker. And so in speaking with

Ms. Becker, she understands that actually right now Ms. Becker

is doing better than she was back when we did the deposition.

I understand that she would prefer not to come to

Court, but she is certainly local. She's certainly in good

enough health where she could appear. I don't think she meets

the standards for an unavailable witness.

THE COURT: Do you want her here in person?

MR. INIGUEZ: Mr. Shrout does want her here in

person.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 31 of 36
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MR. WEXLER: And the Government is fine with that,

your Honor, and generally would agree. We have not met with

Ms. Becker since she testified --

THE COURT: Does -- she has a medical -- documented

medical disability, of course, and it's unrebutted?

We will go with her testimony under 804. But,

otherwise, she'll -- if she has to go to the bathroom, we have

a facility within steps.

MR. WEXLER: Yes.

THE COURT: Your call.

MR. WEXLER: Yes, your Honor.

And the reason I --

THE COURT: I mean, it's my call, but I'll adhere to

the information that I get.

MR. WEXLER: Thank you, your Honor. 

And the reason I bring it up is simply that the

Government intends for Ms. Becker to be our fifth witness, and

it will mark the transition in the Government's case from the

514 statutes to the 7203 statutes.

THE COURT: Perfect.

MR. WEXLER: We believe there is a possibility that

we could get to Ms. Becker's testimony late in the day on

Tuesday, however -- which is tomorrow.

THE COURT: I doubt it. I doubt it.

MR. WEXLER: Well, the Government has instructed

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 32 of 36
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Ms. Becker, because of her health, to just show up Wednesday

morning.

THE COURT: Perfect.

MR. WEXLER: And the Government would simply ask that

if we get to Ms. Becker's testimony, that the Court adjourn for

the day and take up the next morning. The Government will only

have about two hours total.

THE COURT: As long as we get through before next

week. I've got a commitment for the following Monday.

But everything's moving much faster.

MR. WEXLER: Thank you, your Honor.

THE COURT: So on that score, do you think we'll be

through with your case by Wednesday?

MR. WEXLER: Yes, your Honor.

I anticipate, based on our witness prep -- of course,

we don't know the extent of cross-examination. But we do

believe that we will --

MR. INIGUEZ: Neither do I.

MR. WEXLER: But we do believe that we will be

closing our case-in-chief sometime Wednesday, possibly

Wednesday morning.

THE COURT: And how long the defense will take is how

long it will take.

MR. INIGUEZ: Well, your Honor, given the anticipated

rulings on his other witnesses, it shouldn't be -- should not

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 33 of 36
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take very long.

Of course, the Government is suggesting that rather

than do things like a 20-minute video that he be allowed to

present that. It may take -- may take longer, but I can't

imagine it's going to be --

THE COURT: Fine.

MR. INIGUEZ: -- past Thursday.

THE COURT: Perfect.

MR. WEXLER: Thank you, your Honor.

And then, finally, the Court docket says that the

proceeding will begin tomorrow at 9:00 a.m. Just wanted to

confirm that time and also confirm the Court's expected daily

calendar, when --

THE COURT: Okay. I -- I -- as I told you, I go down

and excuse the jurors who can't serve.

We have 35 jurors coming in. We've got ten

peremptories for the defense and six for the Government, and I

hope you don't use anywhere near that number. And -- because

I -- but I think I can tell the jury safely that this case will

be complete -- completed no later than Friday. And that if we

finish earlier, they'll be happier.

But my hours are 9:00 a.m., morning. Break at noon.

Pick up at 1:15 to 1:30. And go until 4:30.

MS. BECKERMAN: We have an 11:30 one day. We have

11:30 hearings on one day.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 34 of 36
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THE COURT: Yeah. Well, they'll be fast.

THE CLERK: Yeah. But, I mean, we'll be breaking.

Just so they'll know we'll be breaking early that day.

MR. WEXLER: What day is that?

THE CLERK: I have that list right here for him.

The 9:30s are on the 19th.

MR. WEXLER: The 11:30s?

THE CLERK: The 11:30s, I mean. Yeah. We have two

on the 19th. Um-hmm.

THE COURT: Okay. Well, you have all done a great

job to narrow these issues down, and we'll take it from there.

MR. WEXLER: Thank you, your Honor.

THE COURT: Anything else?

MR. LANGSTON: Not from the people -- or not from the

Government.

MR. INIGUEZ: You had asked at the beginning, Judge,

about their witnesses. I don't see any problem with those nine

witnesses.

THE COURT: Thank you.

MR. LANGSTON: Was there an issue with the defense

closing?

MR. INIGUEZ: Oh, I wanted to raise the issue of the

defense closing and the possibility that Mr. Shrout be allowed

to do the majority of that but I be allowed to do a brief

closing as well.

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Case 3:15-cr-00438-JO Document 113 Filed 05/08/17 Page 35 of 36
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THE COURT: It would be welcome.

MR. INIGUEZ: Thank you.

THE COURT: Anything else for the good of the order?

MR. INIGUEZ: No, Judge, not for the defense.

MR. LANGSTON: No, your Honor.

THE COURT: Off the record.

(Conclusion of proceedings.)

--oOo-- 

I certify, by signing below, that the foregoing is a correct 

stenographic transcript of the oral proceedings had in the 

above-entitled matter this 8th day of May, 2017. A transcript 

without an original signature or conformed signature is not 

certified. I further certify that the transcript fees and 

format comply with those prescribed by the Court and the 

Judicial Conference of the United States. 

 /S/ Amanda M. LeGore 

____________________________________ 

AMANDA M. LeGORE, CSR, RDR, CRR, FCRR, CE 

CSR No. 15-0433 EXP: 3-31-2018 

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