Oral Argument Legal Case Summary

Oral Audio Transcript(Beta version)

. And if I do not have time to address our multifaceted sufficiency issues, I will leave those to Mr. Whale and Mr. Perez. Maybe I'll get to return to it on a rebuttal. With regard to restitution, there's a point that the government makes in their brief judge to lease from a verdict to it at the second sentencing hearing, where they actually took up restitution. And that was where they repeatedly said that the evidence that was presented was something along lines of quote, the best evidence we have available. And it seems to me that's very telling because that necessarily suggests that we are in the flawed paradigm that comes from economics, a theory of second best. And the problem with second best evidence is that it is inherently unreliable. That is very important in the restitution context. We're taking property from one citizen giving it to another through the collection mechanism of the federal government. Before I turn your honors to the issues of rovers and the implication of that case and these other appellate cases, it dawned on me as I was preparing for this argument that we cannot say necessarily that the current holders of the notes, for at least current as the time of the sentencing, they've probably since been transferred again, there is no way to say that the current holders of the note actually bought them from either the mortgage issue or some secondary, it may well be your honors that the current holder of the note refinanced for the current occupant of the house. You could have an equitable subrogation type interest. Let's say that new refinancer did a bad title search. They didn't find some outstanding judgment lean that was entered. Are you gonna, this court in order to accept this idea that whatever evidence the initial mortgage price minus the payments minus the sale price is necessarily what has to obtain, you would have to say that somebody who refinanced and did a bad title search, nevertheless is a victim of Mr. Tisdale or his co-conspirators. We would argue that is inherently flawed and it's not acceptable interhewier any of the restitution cases. Turning specifically a year ago, we wrote the brief, of course Robert Sir Petition was still pending at that time, but the three main appellate cases is a sort of arch-druest, prudential landscape here, Cheyakuffinate, Circuit Young from the Knife, and James from the Temp. Those are still the three appellate cases on the issue of secondary lenders. In Jung, which of course the court cited to in Frazier, not the part that was overruled by robbers, of course, at pages 601 to 602, there's a lengthy paragraph about all of the different factors that might impinge on what affects the damages to a secondary holder. It might be a function of the interest rate, it might be a function of any number of other things. We would argue to your honors that one of the issues that this court is is confronted with as a result of being the first case in the country to apply robbers in the context of these secondary purchasers is to what extent is the analysis now no longer unidimensional. All these other cases look at the situation where holder one, Seltzra Holder two, Seltzra Holder three. Maybe you back out what was paid on it, but that seems to assume that these notes are always held are sold for par. Well, of course they're not sold for par, ask debt prices fluctuate, for any number of other reasons, especially, and this is the point I think, Justice Odomyre was getting at her concurrence in robbers. By the way, the name of this case is allegorical, right, and robbers, it's rather ironic. But is that in the mortgage context, the more reason we have heartings that are relief programs is that we've one house goes into foreclosure every other house the neighborhood falls by like 30%. There's any number of reasons that we would argue is to remove from the causal chain to tag Mr. Tisdale people like with the restitution under the evidence that was again, the government's burden to produce

. Judge Solis said direct words, I don't have the evidence as the secondary resale price that the government didn't bring it and you defendants didn't bring it. Well, of course, it's the government obligation to bring it. If we accept that they did not bring it, then necessarily the restitution award is bad. We would argue this is different in the situation which compelled reversal by the case of the co-defendant Frazier last month, and of course that we preserve this issue down below. This was heavily litigated, there were numerous objections on the whole second hearing on restitution the government went and called a new expert, witnessed the case agent. We would argue your honors that what this court should do is remand to Judge Solis for the proper determinations that he is required to make, but we would submit in this case it would be appropriate to tell the government they don't get a second bite in the apple. This is all the evidence they had due so they brought to even the second restitution hearings where all these issues had been fleshed out that Judge Solis should make these determinations based on that which was presented in the first instance. We want to cut the government totally off. I mean assuming some measure of sea change, perhaps not all, brought by the Supreme Court. I mean if we remand it at all, I mean if nothing but from efficiency purposes, why would we want to issue a mandate that is somewhat conditional? In other words, what's the, I mean I know the value in terms of, to relieve your client, but in this sort of landscape here, what's secondary, more kind of the nature of what we're talking about and most of the time we get this restitution cases even if we're talking about lost profits, et cetera, there's sort of less ephemeral. I mean, you get the account seen, somebody can get their fingers around the dollars in calculate and this is a lot more abstract because we're talking market conditions and that kind of thing and I'm not sure how many cases are out there, but it's a little different. We frequently have problems with the calculation of losses, but as I said, you get in the right account and so whatever you sort it out, the judge makes a decision and kind of, there we are. This one's, so I guess what I'm asking is because the nature of the kind of restitution we're talking about is so different while we're in the value of B first. At best, we remand it for further proceedings and light of what the Supreme Court said. I mean, to your point, the government either has the evidence so they don't. So would your client be prejudiced by doing that? I'd like to answer your question to Stuart in two parts. Let me address the second part of your question first, which is with regard to the calculation of damages, certainly every restitution case is a horned book law that restitution is in a had to be proved with mathematical precision. We don't have to have an actual down to the penny accounting. Nevertheless, we would argue the authority that I would submit to the court in support of my argument that they should remand based on the record as it was adduced to the district court, at least at the time of the second sentence in hearing, is the 11th Circuit's very recent opinion in this case of singletary. The site is 649 F3D 12, it was an opinion by Judge Joe Flappen, an anonymous opinion, where the 11th Circuit did exactly that which I urged earlier in my argument, which is remanded to the district judge for the appropriate factual determinations within his province to make, but the exact words, the government does not get a second bite at the apple. That's exactly a direct quote from this case from the 11th Circuit, because your honors is very important. And it's paradigm where the government bears the burden. If we were here on a sufficiency case, let's say it was something that would be convicted of conspiracy and I was challenging sufficiency of the evidence. And if the government said, you know, we admit, we didn't call this witness who would have testified about agreement that they were on our witness list, they were in the hallway, we would have called them, we say, of course not, they didn't bring it into the four corners of the courtroom when it was their obligation to do. Well that's true, but I mean, oh yeah. But if we think about the nature of resolution, I mean, obviously, maybe not obviously, the rest of the design to make somebody hold, there's a loss, you know, there's a replacement of something that was diminished. So if what it purposes sent a singletary on its most punitive, but to replace that which is lost, why should, as a policy matter, the opportunity to make somebody hold or it's close to hold or whatever, there may be sort of go down the tubes really because in the scheme of saying, no. So I guess my point is, and I haven't read the case, I get your point on it, but because we are talking about a quote restitution, usually it's an impossibility that 100% is going to be replaced, but if there's some measure of it, isn't there kind of an underlying policy here in the sentencing equation to allow maximum opportunity for that to happen? If it doesn't happen, fine. I think my answer to your question, Judge Stewart, must directly be the structure in the exact requirements of the MVRA

. There is this 90-day window in which a judgment can be held open before it's officially compromised as the restitution judgment. I know in the Supreme Court in Dolan, said maybe that could be extended in certain circumstances, but here since been, I don't know, about two years or so since the sentencing, you will have effectively created a mechanism whereby the government's failure to reduce the evidence they were legally required to deduce in the first instance has extended that 90 days to something like two and a half years. That'd be the first argument, I answered your question, Judge Stewart. The second would be that again, well certainly we do want, the law does want to make victims whole, that's just a court type of inherent power to do, that they can only do that pursuant to the statutory authority of the MVRA, but is absolutely impermissible that, of course, goes to Huey-Wan and Huey-2, is to overcompensate. That's as I pointed out in my reply, if it seems to me the government wants to frame the do-alpally as either, you know, we don't compensate any of the victims or we overcompensate certain people, and in this case, Judge Stewart, there's no doubt many of the listed victims, as Judge Sully said himself, at the sentencing, are in fact not the ones who qualify as victims. I know my time is up, if I could just direct the court to record 1175, or at least Tisdale's 1175, Mr. Broden, and then 612 Anita, one list Bank of New York is the victim, and the pre-sentence report has a marathon wholesale as the victim, and the court's response, we will track down the victim. In other words, the judgment as written, the restitution part was directly quoted in Mr. Tisdale's brief, awards restitution, which one is probably invalid to people, legal entities at least, which are not and were not victimized. That is impromissible from every aspect of restitution doctrine. All right, thank you. You're safe, you reserved. I'll be back. All right, Mr. Whalen. May I please the court? Good morning, my name's James Whalen. I represent Lendle Beacham. The two issues that I'd like to discuss today relate to the sufficiency of the evidence as to his convictions of count one and count two. In count one, he was charged with conspiracy to commit wire fraud, and we believe that the evidence clearly fell short of sufficient evidence to find him guilty of that offense. And I'd like to focus on basically the concept in US versus Loney, where it talks about specific intent, that there has to be specific intent to commit wire fraud, and that the person must intend some specific harm from his deceit. Now, the government's theory at trial was simply that Mr. Beacham was participating in what we call VORs or verifications of rent. The evidence clearly showed from trial according to Mr. Frazier, that Mr. Beacham never created these documents or signed these documents. And so without having any documents with his signature on or handwriting, then the government moved to the next theory is that he was aware that he was participating in this conspiracy. And so that solely relied on the testimony of Mr. Lockhart and Mr. Frazier

. And we believe that the testimony of Mr. Frazier and Mr. Lockhart clearly falls short to establish that. Why they did? What departure from the usual notions of attribution in conspiracy law, you urgent? He wasn't part of the conspiracy that, I mean, I know you're saying that, where, but sort of on book, he's charged in the conspiracy, he's charged with the knowledge of others, et cetera. So specifically, where do you say the chink was in the, I mean, assuming the believability of the witnesses having him looped in, why isn't he culpable that way? Well, I think if I would agree that if there's a believability of Frazier and Lockhart, then it, then it, then it. I case law clearly forecloses that. I mean, didn't it? I mean, they testified to certain facts. They did testify to certain facts, but I think they're testimony as a whole when you look at all the different contradictions and misstatements that they may compare to other people that testified, especially when it's related to germane Frazier. It all comes down to credibility, didn't it? I understand that, but I think that there are, our position is that they're not reliable, that they couldn't be relied on to establish that. You have a case from our circuit, any place else, it says, as a matter of law, this testimony is not reliable. It has to be incredible and unbelievable to disregard a co-conspirators testimony. I agree that the case law clearly says that they can rely on a co-conspirators testimony. Our belief based on the record as a whole that it was unbelievable because there were so many contradictions between not only Mr. Lockhart and Mr. Frazier, but also Mr. Frazier as related to the straw buyers. Mr. Frazier testified on several occasions every single one of those people came in and sat down across from him and filled out those documents. And then every straw bar that I recall from the record came in and said, I never sat down with Mr. Frazier. I never filled out the documents. I gave him some information and he created them whole cloth from there. And so I think those contradictions are important. That does have anything to do with the VORs. I mean, the fact that he didn't sit down with the straw buyers, lens credibility to the theory that Beechham was in on the creating the false documents, didn't it? Well, I disagree. I don't think it does, but I think the other part that it goes as far as the conspiracy goes, I think that's important that as far as whether Mr. Beechham was involved in the conspiracies, I think the testimony of Frazier and Lockhart, where they both said that they began. One Frazier said, I didn't believe I was, we started this with good intentions. I think was the quote of Mr

. Lockhart and then Mr. Frazier. And so the essence of that argument is, is where is Mr. Beechham agreeing to participate in agreement to violate the law? Where was the agreement to violate the law on Mr. Frazier and Mr. Lockhart? Because they both said Mr. Lockhart testified, I started this with good intentions. Mr. Frazier testified. Well, I thought there was evidence he needed. They were each of the straw purchases was getting 15 or $20,000 out of the deal. And I mean, I thought there was evidence from which someone could figure out that this is not. I think when it relates to the count one with Mr. Beechham, I think solely with the VORs, the argument is, is that they believe that they were, this was a legitimate deal and it was started with good intentions that therefore he can't then agree to enter into a conspiracy where there's no agreement to violate the law or knowingly with a specific intent to the fraud. So I think that kind of goes to that part of it. I said, and then the second part, I think as it relates to count one, is the materiality of these VORs. I think there is, obviously there is testimony in the record that they say, well, we would look at these VORs, but I think the evidence is contrary to that. Because when you look at the specific, all the different documents, the verifications of rent that were submitted in the evidence, there's so many of them that don't have any information in them, they don't have addresses, they don't have phone numbers, they don't have any identifying information in them. And then there was testimony that, at least on one of the exhibits, Veronica Gilby, I think, was the witness said, well, there's no way we would have relied on that because it doesn't have any information in it. That's one of them. That was one of them, but I think also, when we talk about that, they said, well, there's no way we could have relied on it. I think it goes to the greater inference of the evidence that they didn't rely on them at all, because when you look at every underwriter, testify that, or mortgage persons, that we just verified income and employment over and over and over again. And so they never said, we came back and verified these verifications of rent. They said, well, we may have relied on them, but I think when you look at the documents as a whole, and the way they were put together, and the way they were presented, I don't think the evidence supports that there was any reliance on them in a material way, based on the testimony that said, we just verified income and employment for these types of loans. So I don't think the evidence falls short on the materiality part of it as well. And so on the count one part for Mr. Beecham, I don't think the evidence was sufficient for those reasons. Also with regards to count three, which was the substantive wire fraud, once again, I come back to the specific intent to the fraud. I know that he had a general warranty deed

. Now, I know the testimony stated a trial that the transaction hadn't been completed, but there was no specific intent to the fraud because there were so many different third parties involved in this, there was realtors, there was title agents, there was everybody that was aware that was going on, because if you look at the title policy, it showed in the title policy that this was subject to an unrequited warranty deed. And so it was there and disclosed in the title policy. Secondly, WMC, there's testimony that they did a collateral review, because there's an allegation that this appraisal wasn't inflated and that was part of the fraud, but it shows they did a collateral review and they also requested a 12 month chain of title. So in their underwriting policy, it reflects that they did a collateral review, they did a 12 month chain of title. The title policy says there was an unrequited warranty deed. So to me, based on the evidence of Pierce's full disclosure of this, but finally, I get to the end, when you talk about specific intent to the fraud, when you look at Mr. Beechham's statement to the regulators and the auditors that he goes, I believe these transactions to be legal at the time. He believed that they were legal and he could do it this way. And I think the documents reflect that because they were fully disclosed in the title policy and everything else that they did. And so when you get down to specific intent, did he intend to harm anybody? Well, I mean, it didn't harm the fact that they were taking the mortgage proceeds and paying off the straw buyer and then scraping some off the top for themselves. It wasn't the fact that he didn't pay the price for the properties. It was they were taking mortgage money and using it for other than paying the purchase price of the property. They were, they were, I think that would make, I would agree with you if there was the inflated appraisal. But I think when you look at, I thought there was evidence that they were. Well, I think their evidence that also that there wasn't because I think there was testimony in the record that the appraisal of the property through the central appraisal district at the time was on par for the sales price. And so there was some testimony or some evidence to support that it wasn't inflated. And also, I think it was. But there was evidence that what? And we've got to take the evidence and light most favorable to the jury verdict. Right. And I think also going back to it, you had the testimony of Mr. Mooreman who said, no, I inflated the appraisal, the calling counting appraisal district evidence suggested otherwise. Well, the fact was that the price that Mr. Beecham agreed to pay to the sellers was quite a bit lower than the mortgage that they've obtained. So there's a pretty good spread in there. Yes, there was a good spread, but I think based on the evidence, it was an arm-plank transaction that wasn't anything inflated that if they're based on the fact that the loan company did a collateral review and were satisfied that the collateral was sufficient to support the loan. And so I think market forces, one could say, we bought it at this price, he was able to sell it higher due to maybe changes in the market. I don't necessarily think that in and of itself would show that there was intent to harm. I think the other interesting part about the Quimlin property was that eventually that was sold and there was no loss to it. Now, I know you can't say, look in the future, there wasn't any harm to anybody, you have to look at it at the time

. But I think when you look at the transaction as a whole, I don't think there was any intent to harm the mortgage company or anyone else other than the fact people made a transaction that they really brought up. Well, I thought there was testimony that they knew these people couldn't pay the mortgages. They agreed to pay the first two payments. They knew they were going to default and they didn't care. So that it was fairly likely that the mortgage company was going to end up holding the bag. For the most part, that was a general theme of it. But I think when it came to Mr. Mizzou, I don't think there was testimony that he said, no, there's no way I could have made it. He did eventually, he did make payments on it, eventually sold the property and was never in default on it. And never went into foreclosure. So I think when it comes specifically to the Quinoa property, I don't necessarily believe that applies here. Thank you. All right. Thank you, Mr. Wu. Mr. Puyers. May it please the court? I naturally want to request that the court allow us to adopt the ordinance put forth by co-counsel Tizdale under rule, a permeate I-regard in restitution. There was some brief discussion in my brief regarding that, manly about the definition of the pay restitution amount greater than loss cause and the error effects substantial rights. But I want to talk more about the multi-conspiracy issue. We discussed the multi-conspiracy issue under Maribel. And I believe those factors still pertain on here. They were in the context of double jeopardy, but they still pertain. I do want to argue this and discuss this regarding the three factors under Maribel, though. Before, as a background, Maribel was a conspiracy involving persons who brought in mobile homes. And everyone in that conspiracy were all part of the same conspiracy. There was just a division of labor, under Mitchell that the court, that the government also relies on. It was a drug conspiracy. And what you see is a hierarchy involvement there

. So the court does not believe there's multiple conspiracies. In our case, it's different. We have a dissolution between the partners. Now, the first one is common goal. And the government is right. It is brought into fine. But this is a little bit different. They indicate that in tomorrow, the common goal was for the defendant to derive gain from the sale of mobile homes. They're saying that's the same with us. But what they see in the definition is the goal is to derive gains. It's not to do the mortgage fraud or commit this fraud against lenders. It was to derive gain. And ours, it was to derive gain. That's not a common goal. Because the gain in our situation was for our conspiracy. The gain in law cards was for their conspiracy. That was not the common goal. The second factor is the nature of the scheme. And it's inferred from the act. Basically, the activity is the one scheme unnecessary or advantageous success of another. That's not true here. We have a separate entities by name, by employees, by the method of which they may have committed this fraud. The government says that there's a larger plan and it spans both conspiracies, but that's not true. Now, they say that it's because of holidays and Jacque and Hoth are involved and the parties knew both of them. But there was not an agreement to defraud the holidays. In our case, there was no specific intent to defraud them before the split. There's no evidence of that. Also regarding any kind of early groundwork made, laid on this, the government says that there was just football given to Catherine Gill. There were talks between law, cart, and tith, all after the split

. I don't think the football is enough to tie these two conspiracy together. I don't think the conversation was too stacey Chambers testified that the conversations were after the split, but after the conversation, Tisdale said he just wants, he just wants to know my business plan and I'm not going to give it to him. Also, the difference in nature of the scheme was we didn't use the false VLORs, didn't use the false depressions. And everyone of the properties and junctions involved in, the lenders agreed that the appraisals who were fair appraisals because the comparative values the homes around them. What we have here, there's a disparity in what's been earned and what was made here and what the houses were sold for. But what we have is that everybody that bought a home got what they paid for, what they bargained for. The fact that Jones made a profit on that doesn't mean that he had an intent to defraud. The last factor, the overlapping participants, regarding the interrelationships between the parties. In this situation, Lockhart was the key player in his, in his conspiracy. Tisdale was the key player in his conspiracy. There was a dissolution, there were papers, there was a partner in the ways. Lockhart took his clients, Tisdale took his clients. There was no sharing of profits. It was a situation where Tisdale opened up a branch office and it was a complete name completely different. There was no connection between them. I guess lastly, what I want to talk about is the harm analysis. I do believe that in burger it says the conspiracies, if a defendant's found guilty of one of the conspiracies, substantial rides aren't affected. But they aren't affected if the defendant can show prejudice by variance and what was charged and what was proven. As the government says, this is, this is going to transference of guilt from one co-definanced to the other. And it's saying that there's not. There is. They found our clients, Tisdale Jones and under a pinnacle and until a guilty by association. Government says there's no spill over prejudice. But that's exactly what it was. In addition to that, I think that the serious, the problem that we had in our case, the real harm was is that the jury wasn't able to make a reliable reliable judgment about guilt, guilt or innocence on our conspiracy and that it did affect my clients' trial rights. All right, I gave you an extra minute. You may not have known it. About a minute. About two seconds

. You had run out a long time ago. I gave you an earphone there, man. Oh, you should get that last point in. All right. Thank you, sir. All right, you're from the government. Some slight disagreement. Just some of the points you are. Leah Simonson for the government. Gonna start with restitution. I think that is the issue that's really a play here as shown by the fact that's really the only issue that was addressed in the reply briefs and that's what they started out with. The government realizes it's in a compromised position on this because of the Fraser opinion. The government realizes that. But the government also sees no legal reason why it should concede error. So I'm not going to do that. I still believe that Judge Silesh did a reasonable thing by looking at the evidence in the record, looking at the agent's testimony, where she explained that she was not able to reduce the documents of what the secondary lean holder is paid for the loans. Looked at the time period of the loans, one thing I want to address is that Mr. Tisdale's council suggests that these loans could have been sold 100 times. If you look at synopsis a bit one, which is Tisdale's properties, those loans were foreclosed on in between one and three years of when the loans were taken out. There was not time for them to be sold 100 times. There was barely time for them to be sold once. I believe there's testimony in the restitution hearing record that some of these loan companies, or it made them in the trial, but some of these companies are just mortgage companies. They're not loan servicing companies. So what would happen in some of these cases was that the loan company would issue the loan and it would sell it to a servicing company, the servicing company would end up foreclosing. The other thing that happened in some of these situations was after the loan was given out, it was sold to an entity that sold it as mortgage-backed securities. So those were the two things that happened with these loans. So A, there was not time for the face amount of the mortgage to change very much because of the short time frame we're talking about, B, not time for them to be sold several times. Looking at all of those facts, Judge Siles made the very reasonable determination that instead of awarding zero restitution, which is what the defendants were asking him to do, to victims who were obviously injured in some way, he would award restitution equal to the face amount of the loan minus the amount of the property once it was sold out of foreclosure to a third party. And that is what he did. And the government maintains that that was the correct way of calculating the restitution amount in this situation. That's assumed based on what was known at the time, that was the best approach or whatever. I mean, does the government acknowledge that, well, let's back up to the point made by the other side that the government didn't produce the best evidence, that it was either the second vaster or not. I mean, what do you say to that? The government produced evidence that it had available given the state of the defunct mortgage companies and other holders of these properties at the time. Mr. Tizzale's Council admitted that this was a crazy time in loan funding where a lot of companies lent money and then because of the great number of defaults that happened during the recession, they are defunct, the documentation is just not there for some of them, but they still are victims. What do you do in that situation? And that's where the government asked Judge Celes to go ahead and award restitution according to this formula that I explained instead of awarding zero. Now, in terms of Mr. Tizzale's argument that we should not get a second bite of the apple because we could not produce the documentation the first time there are other ways. First of all, Frazier, if it's adopted by this court, Frazier is unpublished, obviously. So I would say technically it doesn't exactly change the law on the circuit, although a lot of the supports are gonna follow that anyway. But certainly, if this court were to issue a published opinion adopting Frazier's reasoning, which we asked the court not to do, but if you were to do that, then that would change the law in this circuit on how to determine restitution in these circumstances. There was no case telling Judge Celes what to do and telling the government what type of evidence to produce. Although the government may not be able to produce, as it said the first time in the first restitution hearing, it may not be able to produce any documentation showing what the secondary leanholders paid to purchase these loans. It could potentially provide expert testimony or something else to say that in these precise circumstances, the secondary leanholders would not have bought the loan for less than the face value. I can anticipate that that is what we would try to do. For example, at Frazier's new restitution hearing that he will get, and that's another point I wanted to highlight is that Mr. Frazier, who is a co-definite of these defendants, will get a new restitution hearing. And so it would be unfair for the government to not also be- Suppose we take you at your invitation, and we hear issue, depending from this panel, formally adopting Frazier, not Frazier's defendant, but adopting the unpublished, non-presidential analysis, if you will, a holding of that case and remand of further proceedings in light of a Frazier, and be, you know, to the extent robbers or robbers, you know, applies and just sort of clearing the slate, so to speak, so that without necessarily criticizing whether what Judge Sully's did was correct based on what he then knew. But everybody now knows, you know, what the law is, but particularly as I was trying to say before, this kind of evidence is just kind of nebulous. I'm not sure whether the snapshot the government had back then of these defunct mortgages. I have trouble staying with what the quality of that evidence will be on a remand or not, but as pointed out, that's the government's burden. So I guess underneath my question, is there some potential quality of this evidence or availability of evidence, or a center that may be available to then be applied to, you know, the new legal principles? Yes, Your Honor. One thing I think that we're also gonna explore is whether we could get representatives from the defunct mortgage companies to say what their practice was in terms of the lean holders who ultimately sold the properties after foreclosure, they could testify to what their practice was in terms of what the amount they usually paid for mortgages from the original mortgage company would be. So there is potential testimony that I can imagine that we would try to elicit at a restitution hearing that would, we expect be a good substitute for the documentation that we can't get. So the government strongly requests that we be allowed another chance to make these victims whole, as you said, judge Stewart, because we're not just talking about us, we're talking about the victims. The government has an obligation under the law to try and make these victims whole. And we will.

. And the government maintains that that was the correct way of calculating the restitution amount in this situation. That's assumed based on what was known at the time, that was the best approach or whatever. I mean, does the government acknowledge that, well, let's back up to the point made by the other side that the government didn't produce the best evidence, that it was either the second vaster or not. I mean, what do you say to that? The government produced evidence that it had available given the state of the defunct mortgage companies and other holders of these properties at the time. Mr. Tizzale's Council admitted that this was a crazy time in loan funding where a lot of companies lent money and then because of the great number of defaults that happened during the recession, they are defunct, the documentation is just not there for some of them, but they still are victims. What do you do in that situation? And that's where the government asked Judge Celes to go ahead and award restitution according to this formula that I explained instead of awarding zero. Now, in terms of Mr. Tizzale's argument that we should not get a second bite of the apple because we could not produce the documentation the first time there are other ways. First of all, Frazier, if it's adopted by this court, Frazier is unpublished, obviously. So I would say technically it doesn't exactly change the law on the circuit, although a lot of the supports are gonna follow that anyway. But certainly, if this court were to issue a published opinion adopting Frazier's reasoning, which we asked the court not to do, but if you were to do that, then that would change the law in this circuit on how to determine restitution in these circumstances. There was no case telling Judge Celes what to do and telling the government what type of evidence to produce. Although the government may not be able to produce, as it said the first time in the first restitution hearing, it may not be able to produce any documentation showing what the secondary leanholders paid to purchase these loans. It could potentially provide expert testimony or something else to say that in these precise circumstances, the secondary leanholders would not have bought the loan for less than the face value. I can anticipate that that is what we would try to do. For example, at Frazier's new restitution hearing that he will get, and that's another point I wanted to highlight is that Mr. Frazier, who is a co-definite of these defendants, will get a new restitution hearing. And so it would be unfair for the government to not also be- Suppose we take you at your invitation, and we hear issue, depending from this panel, formally adopting Frazier, not Frazier's defendant, but adopting the unpublished, non-presidential analysis, if you will, a holding of that case and remand of further proceedings in light of a Frazier, and be, you know, to the extent robbers or robbers, you know, applies and just sort of clearing the slate, so to speak, so that without necessarily criticizing whether what Judge Sully's did was correct based on what he then knew. But everybody now knows, you know, what the law is, but particularly as I was trying to say before, this kind of evidence is just kind of nebulous. I'm not sure whether the snapshot the government had back then of these defunct mortgages. I have trouble staying with what the quality of that evidence will be on a remand or not, but as pointed out, that's the government's burden. So I guess underneath my question, is there some potential quality of this evidence or availability of evidence, or a center that may be available to then be applied to, you know, the new legal principles? Yes, Your Honor. One thing I think that we're also gonna explore is whether we could get representatives from the defunct mortgage companies to say what their practice was in terms of the lean holders who ultimately sold the properties after foreclosure, they could testify to what their practice was in terms of what the amount they usually paid for mortgages from the original mortgage company would be. So there is potential testimony that I can imagine that we would try to elicit at a restitution hearing that would, we expect be a good substitute for the documentation that we can't get. So the government strongly requests that we be allowed another chance to make these victims whole, as you said, judge Stewart, because we're not just talking about us, we're talking about the victims. The government has an obligation under the law to try and make these victims whole. And we will... If the victims are defunct, where's the money get? The secondary purchasers? It goes to, I'm not sure, it would go to the receivership, if they're in bankruptcy, it would go to the receivership and be distributed in line with what that, what the court order is relating to that would be. So it ultimately would go to, whoever's standing in the place of those companies at this point to be distributed as they see fit. Potentially just a ballpark figure. How much are we talking about? Well, I did some rough calculations of how much it would be in example, and for example Mr. Tisdale's case, and we're looking at possibly half of his restitution amount that we're talking about. And his restitution amounts a little over a million dollars. It's $1.1 million. I believe we're looking at about $550,000 that victims might lose if we don't allow a new restitution hearing. If this court does decide to adopt Frazier, which, as I said before, the government, the government's position is that you shouldn't do that, but we understand that you might. And I wasn't suggesting that, you know, Joe and the panel had decided to do that. I was just trying to give you... Yes. ...the hype that if it came to that, but I wasn't suggesting that we made any such decision beforehand to necessarily do that. There were probably some reasons not to do it, but just sorry about thoughts or kind of... No, and I've seen, of course, I've seen that happen before. So, obviously, completely up to this court, what to do, obviously, though, this court can also, although it might present some practical difficulties for you, reach a decision contrary to Frazier. Now, I want to move to Mr. Beachham's arguments. Joe, when you were correct that the evidence just simply goes against Beachham's arguments on both of his counts of conviction. I'll start with count one

.. If the victims are defunct, where's the money get? The secondary purchasers? It goes to, I'm not sure, it would go to the receivership, if they're in bankruptcy, it would go to the receivership and be distributed in line with what that, what the court order is relating to that would be. So it ultimately would go to, whoever's standing in the place of those companies at this point to be distributed as they see fit. Potentially just a ballpark figure. How much are we talking about? Well, I did some rough calculations of how much it would be in example, and for example Mr. Tisdale's case, and we're looking at possibly half of his restitution amount that we're talking about. And his restitution amounts a little over a million dollars. It's $1.1 million. I believe we're looking at about $550,000 that victims might lose if we don't allow a new restitution hearing. If this court does decide to adopt Frazier, which, as I said before, the government, the government's position is that you shouldn't do that, but we understand that you might. And I wasn't suggesting that, you know, Joe and the panel had decided to do that. I was just trying to give you... Yes. ...the hype that if it came to that, but I wasn't suggesting that we made any such decision beforehand to necessarily do that. There were probably some reasons not to do it, but just sorry about thoughts or kind of... No, and I've seen, of course, I've seen that happen before. So, obviously, completely up to this court, what to do, obviously, though, this court can also, although it might present some practical difficulties for you, reach a decision contrary to Frazier. Now, I want to move to Mr. Beachham's arguments. Joe, when you were correct that the evidence just simply goes against Beachham's arguments on both of his counts of conviction. I'll start with count one. He argues he had no specific intent to defraud the lenders. In line with that, he suggests he didn't create or sign any of these documents, and that's just purely contrary to the record. Mr. Frazier testified that he first contacted Beachham when he could not get alone through, because he could not show that this straw buyer could afford the mortgage amount they were applying for. And I have the testimony on page 29 of my brief. So, Frazier says he talked to Mr. Breachham about this, because he thought maybe Beachham could help him with this. And he told Mr. Beachham, I need you to sign a false verification of rent documents so I can get this loan approved. And he said, Beachham had some questions about it, so they talked about it. Frazier actually sent him the form for the verification of rent. Beachham read the form and sent the document back to him the way Frazier needed it. And so then the prosecutor asked, even more clearly, did he sign it and Frazier says yes, he did. Did he sign it with false information and it, yes, he did. Had you told him the information was untrue, yes, I had. So this was not something that Frazier and Lockhart just concocted or Tisdale II, just concocted a scheme where they were just using Mr. Beachham's name, but Mr. Beachham was actively participating in it. And he was being compensated for that. He got, I believe the testimony was about $200 per verification of rent that was filed with the loan application for each letter that was filed. The testimonies also that Frazier had permission to sign some of these verifications of rent when Mr. Beachham was not available. That comes from Mr. Lockhart. Beachham paid for those. He was, yes, the testimonies that he was paid for, all of them that were filed. And Lockhart said whenever, he agreed that whenever Frazier signed those, Beachham knew what was going on. Beachham gave his consent authorization for Frazier to sign Beachham's name. There were about, I believe the testimony was about eight properties in which these were filed

. He argues he had no specific intent to defraud the lenders. In line with that, he suggests he didn't create or sign any of these documents, and that's just purely contrary to the record. Mr. Frazier testified that he first contacted Beachham when he could not get alone through, because he could not show that this straw buyer could afford the mortgage amount they were applying for. And I have the testimony on page 29 of my brief. So, Frazier says he talked to Mr. Breachham about this, because he thought maybe Beachham could help him with this. And he told Mr. Beachham, I need you to sign a false verification of rent documents so I can get this loan approved. And he said, Beachham had some questions about it, so they talked about it. Frazier actually sent him the form for the verification of rent. Beachham read the form and sent the document back to him the way Frazier needed it. And so then the prosecutor asked, even more clearly, did he sign it and Frazier says yes, he did. Did he sign it with false information and it, yes, he did. Had you told him the information was untrue, yes, I had. So this was not something that Frazier and Lockhart just concocted or Tisdale II, just concocted a scheme where they were just using Mr. Beachham's name, but Mr. Beachham was actively participating in it. And he was being compensated for that. He got, I believe the testimony was about $200 per verification of rent that was filed with the loan application for each letter that was filed. The testimonies also that Frazier had permission to sign some of these verifications of rent when Mr. Beachham was not available. That comes from Mr. Lockhart. Beachham paid for those. He was, yes, the testimonies that he was paid for, all of them that were filed. And Lockhart said whenever, he agreed that whenever Frazier signed those, Beachham knew what was going on. Beachham gave his consent authorization for Frazier to sign Beachham's name. There were about, I believe the testimony was about eight properties in which these were filed. Those include the ones where Frazier signed and the loss was almost a million dollars from those properties. In terms of the materiality of the verification of rent, the government also highlights that testimony and it's brief between pages 28 and 35, but just to briefly summarize, Frazier explained that the reason in the first place he asked, and I just repeated this to the court, but the reason he asked Beachham to do the first verification of rent was he was having trouble getting a loan through. That VAR, VOR after Beachham signed it and Frazier submitted it helped get that loan through. Lockhart also testified it was important to have a VOR because Linder sometimes required it and then Veronica Gilby testified that VOR is a material to an underwriter's decision to recommend a approval of a loan because they show that the person applying for the loan has shouldered a payment that is in line with the mortgage payment that they are applying to get. Mr. Beachham talks about one VOR where there was some information missing, it was really a relevant, basically relevant information. I think it was his address that was missing. And then there was a box, the wrong box was checked, it said, the box for verification of mortgage was checked instead of verification of rent. But if you look at that exhibit and that exhibit is discussed in my brief, the relevant information showed it was clearly a verification of rent, it explained how much rent the shop purchaser was supposed to have been paying per month and for how long they had held the lease. So that too would have the correct information for a mortgage company to rely on and lending. On count three, Mr. Beachham also is ignoring the evidence when he argues that there's no evidence with specific intent. I want to just say that this count three and it focuses on a specific transaction called the Quinlan transaction for the house that it pertained to. It was about more than whether Mr. Beachham owned the house when he as a middle man sold it to the in purchaser because what happened was this couple called the Beatles, they owned the house, they sold it to Mr. Beachham for $310,000. A few months later Mr. Beachham sold it to Mr. Maisu, actually I was at the same time, I'm sorry they were basically simultaneous transactions but then he sold it to Mr. Maisu for $400,000 so that's a 90% markup in a span of weeks. And it's more than did he have the title when he sold it to Mr. Maisu from the Beatles? It's the fact that he also acted as the broker for the transaction from himself to Mr. Maisu and he misrepresented several things in the loan application that funded the purchase of Mr. Maisu's home, including Mr. Maisu's income. He, I believe increased it by about $5,000 per month. It was a false verification that Mr. Maisu would occupy, the property after the purchase, the loan document said Mr. Maisu would, and this was a common theme throughout all these transactions, these false spherifications of occupancy

. Those include the ones where Frazier signed and the loss was almost a million dollars from those properties. In terms of the materiality of the verification of rent, the government also highlights that testimony and it's brief between pages 28 and 35, but just to briefly summarize, Frazier explained that the reason in the first place he asked, and I just repeated this to the court, but the reason he asked Beachham to do the first verification of rent was he was having trouble getting a loan through. That VAR, VOR after Beachham signed it and Frazier submitted it helped get that loan through. Lockhart also testified it was important to have a VOR because Linder sometimes required it and then Veronica Gilby testified that VOR is a material to an underwriter's decision to recommend a approval of a loan because they show that the person applying for the loan has shouldered a payment that is in line with the mortgage payment that they are applying to get. Mr. Beachham talks about one VOR where there was some information missing, it was really a relevant, basically relevant information. I think it was his address that was missing. And then there was a box, the wrong box was checked, it said, the box for verification of mortgage was checked instead of verification of rent. But if you look at that exhibit and that exhibit is discussed in my brief, the relevant information showed it was clearly a verification of rent, it explained how much rent the shop purchaser was supposed to have been paying per month and for how long they had held the lease. So that too would have the correct information for a mortgage company to rely on and lending. On count three, Mr. Beachham also is ignoring the evidence when he argues that there's no evidence with specific intent. I want to just say that this count three and it focuses on a specific transaction called the Quinlan transaction for the house that it pertained to. It was about more than whether Mr. Beachham owned the house when he as a middle man sold it to the in purchaser because what happened was this couple called the Beatles, they owned the house, they sold it to Mr. Beachham for $310,000. A few months later Mr. Beachham sold it to Mr. Maisu, actually I was at the same time, I'm sorry they were basically simultaneous transactions but then he sold it to Mr. Maisu for $400,000 so that's a 90% markup in a span of weeks. And it's more than did he have the title when he sold it to Mr. Maisu from the Beatles? It's the fact that he also acted as the broker for the transaction from himself to Mr. Maisu and he misrepresented several things in the loan application that funded the purchase of Mr. Maisu's home, including Mr. Maisu's income. He, I believe increased it by about $5,000 per month. It was a false verification that Mr. Maisu would occupy, the property after the purchase, the loan document said Mr. Maisu would, and this was a common theme throughout all these transactions, these false spherifications of occupancy. Mr. Maisu was not gonna occupy the property. Then there was also the fact that Mr. Beachham hid from the mortgage company that he was acting both as the broker on the transaction and the seller of the home. So this is far from an arm's length transaction. This was a very close transaction where there was an obvious conflict of interest. Not only did Mr. Beachham not mention the fact that he was the broker and the seller to the mortgage company, but he actually altered documents or created two sets of documents to prevent the mortgage company from finding out that he had been both the broker and the seller. And it was one of the loan inspectors for the company that lent the mortgage that testified that this name is Diana Taylor, and this is in my brief pages 48 to 52, but she explained that there was no reference to his company Ace Mortgage and the documents that the mortgage company had, even though there was in another set of documents that was retained by Ace Mortgage. Another thing that Mr. Beachham climbs is that the property value when it was sold to Mr. Maisu was not inflated and that's just a lie. Brian Mormon was an appraiser and he testified that he was paid to inflate the appraisal that led to Mr. Maisu's purchase of that house. And that's pretty obvious when we look at a first sale price of $310,000 in a second sale price weeks later of $400,000, but Mormon testified I did inflate it. And then we also had the real estate agent who represented Beachham in the initial transaction where Beachham bought it from the Beatles saying it's crazy that Beachham turned around and sold that house for $400,000 when he just bought it for $310,000. She didn't think that that house could appreciate that much in that short of a time frame. Finally, I want to move to Mr. Jones' argument and he focused on the multiple conspiracy argument. First of all, as I explained my brief, beginning on page 36, whether a count charges multiple or single conspiracies and whether the government has proved multiple single conspiracies is a question of fact for the jury with a very deferential standard of review. It's the same type of standard of review we have in deficiency cases where the defense can only overturn that finding if they can conclude to can show that the evidence viewed in the night most favorable to the government would preclude a reasonable juror from finding a single conspiracy. And here, the evidence is not that clear at all. In fact, it very much supports there was a single conspiracy. Before I even get to the evidence, so I want to mention that at the defense request, the district court gave the multiple conspiracy instruction so that it charged the jury that if they were to find that the defendants, any of the defendants were not a part of the conspiracy charging count one, they were too acquitted. If they were to find that one of the defendants was part of a different conspiracy than the one charging count one, they were too acquitted. Obviously, the jury did not believe that there were different conspiracies obviously than the one charging count one. The defendants also strongly urged their argument to the jury in closing arguments. I believe every defense attorney did. I know for sure to his day on Jones' attorneys argued exactly what they're arguing here that there were multiple conspiracies and not a single conspiracy

. Mr. Maisu was not gonna occupy the property. Then there was also the fact that Mr. Beachham hid from the mortgage company that he was acting both as the broker on the transaction and the seller of the home. So this is far from an arm's length transaction. This was a very close transaction where there was an obvious conflict of interest. Not only did Mr. Beachham not mention the fact that he was the broker and the seller to the mortgage company, but he actually altered documents or created two sets of documents to prevent the mortgage company from finding out that he had been both the broker and the seller. And it was one of the loan inspectors for the company that lent the mortgage that testified that this name is Diana Taylor, and this is in my brief pages 48 to 52, but she explained that there was no reference to his company Ace Mortgage and the documents that the mortgage company had, even though there was in another set of documents that was retained by Ace Mortgage. Another thing that Mr. Beachham climbs is that the property value when it was sold to Mr. Maisu was not inflated and that's just a lie. Brian Mormon was an appraiser and he testified that he was paid to inflate the appraisal that led to Mr. Maisu's purchase of that house. And that's pretty obvious when we look at a first sale price of $310,000 in a second sale price weeks later of $400,000, but Mormon testified I did inflate it. And then we also had the real estate agent who represented Beachham in the initial transaction where Beachham bought it from the Beatles saying it's crazy that Beachham turned around and sold that house for $400,000 when he just bought it for $310,000. She didn't think that that house could appreciate that much in that short of a time frame. Finally, I want to move to Mr. Jones' argument and he focused on the multiple conspiracy argument. First of all, as I explained my brief, beginning on page 36, whether a count charges multiple or single conspiracies and whether the government has proved multiple single conspiracies is a question of fact for the jury with a very deferential standard of review. It's the same type of standard of review we have in deficiency cases where the defense can only overturn that finding if they can conclude to can show that the evidence viewed in the night most favorable to the government would preclude a reasonable juror from finding a single conspiracy. And here, the evidence is not that clear at all. In fact, it very much supports there was a single conspiracy. Before I even get to the evidence, so I want to mention that at the defense request, the district court gave the multiple conspiracy instruction so that it charged the jury that if they were to find that the defendants, any of the defendants were not a part of the conspiracy charging count one, they were too acquitted. If they were to find that one of the defendants was part of a different conspiracy than the one charging count one, they were too acquitted. Obviously, the jury did not believe that there were different conspiracies obviously than the one charging count one. The defendants also strongly urged their argument to the jury in closing arguments. I believe every defense attorney did. I know for sure to his day on Jones' attorneys argued exactly what they're arguing here that there were multiple conspiracies and not a single conspiracy. And therefore, their clients cannot be convicted. The jury rejected that argument. The government has highlighted, according to the Morrow factors, the evidence that supports all three of the factors, the existence of a common goal, which Mr. Jones' council ignored, is to be broadly construed, is not limited to, the common goal is not limited to, are they always engaging in things that every conspirator will profit from? Clearly, that would not be the case in most conspiracies because most conspiracies are not these tightly wound circles. They are amorphous, they're more like amoebas and they change over time. But there were common defendants in the beginning of the conspiracy and there were even common defendants at the end even when Tisdale and Lockhart weren't technically doing business together anymore. There were conspirators like Suarez, who was doing business with both of them, both of the branches of the conspiracy. There were also several straw purchasers who had interaction with many of the conspirators during the time frame when Lockhart and Tisdale were beginning to separate. A few of those include Jacqueline Hawthorne, she was our witness number three, Wilma Holiday, she was our witness number seven, and Catherine Gill, actually Catherine Gill was interesting because she first had interaction after the split, but Tisdale and Jones still told her Lockhart was the head of their company. And that's where she got the football, but it wasn't just the fine football from Lockhart. It was the fact that they were representing to her that Lockhart was still involved in the company when she was engaging in these transactions with them. Even if one more is William Purcell, he bought three houses, the first he bought with Lockhart, Tisdale and Jones, the next two he bought with Jones and Tisdale. So there was not a clean break. There were a lot of straw purchasers that these defendants had in common. Some of them began with one or two of the defendants pitching the deal to these investors, and then in the end after Lockhart and Tisdale separated, Lockhart and Frazier would take some of these, Tisdale and Jones would take others. They would execute the same scheme. May I ask you, Mr. Quitsker, Director of our attention to record page 1175 and said many of the listed victims are not the real victims, what's he referring to? He's referring to the fact, not the fact, but there was testimony in terms of, at the restitution hearing, that's what he's talking about. The restitution hearing, there was a lot of discussion of representatives for the victims. There were trustees, as I explained to Judge Owen before, there are trustees for some of the victims because they're defamed. And in the spreadsheet that the agent provided, some of the names of the trustee, it would be the trustee, and then on behalf of, and then the actual victim name, and one of those she had, the actual victim name, cut off. So you couldn't tell what the victim, what the name of the victim was. So there, I think there was only one instance of that. There was another discussion of, as he referenced, whether American wholesale liners, or I think it was countrywide, was the one actually American wholesale liners is a sub of countrywide, so that's not really discrepancy, and that's in the record. He was talking about what are the names of the real victims versus the representatives of the victims. And what I did in my victim list, in our brief, and I counted 10 victims, who had at least some amount of loss, and those were the ones who ended up selling the properties in foreclosure, and those don't include any of the victims that were disputed in the restitution hearing in terms of what was the name of the real victim. So I excluded those, the one where the victim's name was cut off, and I still came up with 10. So the government sees no issue there. That's on pages 54 to 56, and I won a correct roll or on that topic, Judge Stewart

. And therefore, their clients cannot be convicted. The jury rejected that argument. The government has highlighted, according to the Morrow factors, the evidence that supports all three of the factors, the existence of a common goal, which Mr. Jones' council ignored, is to be broadly construed, is not limited to, the common goal is not limited to, are they always engaging in things that every conspirator will profit from? Clearly, that would not be the case in most conspiracies because most conspiracies are not these tightly wound circles. They are amorphous, they're more like amoebas and they change over time. But there were common defendants in the beginning of the conspiracy and there were even common defendants at the end even when Tisdale and Lockhart weren't technically doing business together anymore. There were conspirators like Suarez, who was doing business with both of them, both of the branches of the conspiracy. There were also several straw purchasers who had interaction with many of the conspirators during the time frame when Lockhart and Tisdale were beginning to separate. A few of those include Jacqueline Hawthorne, she was our witness number three, Wilma Holiday, she was our witness number seven, and Catherine Gill, actually Catherine Gill was interesting because she first had interaction after the split, but Tisdale and Jones still told her Lockhart was the head of their company. And that's where she got the football, but it wasn't just the fine football from Lockhart. It was the fact that they were representing to her that Lockhart was still involved in the company when she was engaging in these transactions with them. Even if one more is William Purcell, he bought three houses, the first he bought with Lockhart, Tisdale and Jones, the next two he bought with Jones and Tisdale. So there was not a clean break. There were a lot of straw purchasers that these defendants had in common. Some of them began with one or two of the defendants pitching the deal to these investors, and then in the end after Lockhart and Tisdale separated, Lockhart and Frazier would take some of these, Tisdale and Jones would take others. They would execute the same scheme. May I ask you, Mr. Quitsker, Director of our attention to record page 1175 and said many of the listed victims are not the real victims, what's he referring to? He's referring to the fact, not the fact, but there was testimony in terms of, at the restitution hearing, that's what he's talking about. The restitution hearing, there was a lot of discussion of representatives for the victims. There were trustees, as I explained to Judge Owen before, there are trustees for some of the victims because they're defamed. And in the spreadsheet that the agent provided, some of the names of the trustee, it would be the trustee, and then on behalf of, and then the actual victim name, and one of those she had, the actual victim name, cut off. So you couldn't tell what the victim, what the name of the victim was. So there, I think there was only one instance of that. There was another discussion of, as he referenced, whether American wholesale liners, or I think it was countrywide, was the one actually American wholesale liners is a sub of countrywide, so that's not really discrepancy, and that's in the record. He was talking about what are the names of the real victims versus the representatives of the victims. And what I did in my victim list, in our brief, and I counted 10 victims, who had at least some amount of loss, and those were the ones who ended up selling the properties in foreclosure, and those don't include any of the victims that were disputed in the restitution hearing in terms of what was the name of the real victim. So I excluded those, the one where the victim's name was cut off, and I still came up with 10. So the government sees no issue there. That's on pages 54 to 56, and I won a correct roll or on that topic, Judge Stewart. Mr. Tisdale represents that the case agents testimony, that I'm not giving the proper citation in the brief to the case agents testimony, where the case agent is discussing exactly what I said that some victims are named by trustee, and then on behalf of, and then the victim name. And I checked again, and I do give the correct record site. It's page 10, 19 through 20 of the restitution hearing. Do you have a response to his urging of us to read Singletary from the 11th Circuit in which he argues that the remand occurred without giving the government the second by the apple, do you have a response to that case or want to comment it at all? I do not know that case, because he is not filed to any J letter on it, so I've not had a chance to look at it. I will look at it later today, but I am familiar with a similar case in this circuit, and that was as chemical and metal industries. That was a case where the government simply did not fulfill its obligation at all to produce any evidence supporting restitution. It was just a big flood. And in that case, I think to penalize the government, the fifth circuit said we're not gonna allow you to have a second by the apple to prove restitution. That's a completely different situation than here when we had a very long 200 page, two day restitution hearing, where we tried, and we did, the agent, we're talking some about that documents that the agent could not provide, what we haven't talked about is a whole of the information and the spreadsheets that the case agent did provide. She went into painstaking detail about all of these properties. She looked at so many records. You can see that just by all of the exhibits that were entered at the synancing. The government did try very, very hard to fulfill its obligation here, and we should not be penalized in a way that the government was penalized in chemical and metal industries. If the court has no further questions, the government will see the remainder of its time. The government asked that the court affirm on all grounds, and if the court does decide to remand for a new restitution hearing, it asks that the court allow the government to try and fulfill whatever its new obligations might be under this case, under this new opinion, to provide restitution to these victims. Thank you. All right, Mr. Quetz, you have right to rebuttal? Yes, Your Honor, I don't have to speak. The case agent put a lot of time and effort in creating this exhibit right here. The problem is the most information on there is wrong. In the Supreme Court, when they reversed earlier this year in Riemi Peraline, they said the danger of restitution is that it is a criminal penalty with no beyond reasonable doubt protection and a civil remedy with no seventh amendment jury trial right. That is why restitution is so important here, Your Honor. One of the first parts of Miss Simonsons argument she said, while there wasn't enough time here, probably for these loans to be resold 100 times. Well, maybe there wasn't enough time to resold 100 times, but I assure you that throughout, I think we in our reply, if we cited the quote from the Financial Crisis Inquiry Commission, the core function of mortgage originators throughout the industry, that port of time, all this 10 years ago now, sometimes they didn't even hold a new debt obligation for a single payment. They immediately turned around and resold it to one of the larger banks. The Financial Crisis Inquiry Commission described these mortgage originators as mere sales offices for franning and fed, not legally. They were different legal entities, but that was what their function was. I don't know how quickly that they were sold before a single payment was received in this case

. Mr. Tisdale represents that the case agents testimony, that I'm not giving the proper citation in the brief to the case agents testimony, where the case agent is discussing exactly what I said that some victims are named by trustee, and then on behalf of, and then the victim name. And I checked again, and I do give the correct record site. It's page 10, 19 through 20 of the restitution hearing. Do you have a response to his urging of us to read Singletary from the 11th Circuit in which he argues that the remand occurred without giving the government the second by the apple, do you have a response to that case or want to comment it at all? I do not know that case, because he is not filed to any J letter on it, so I've not had a chance to look at it. I will look at it later today, but I am familiar with a similar case in this circuit, and that was as chemical and metal industries. That was a case where the government simply did not fulfill its obligation at all to produce any evidence supporting restitution. It was just a big flood. And in that case, I think to penalize the government, the fifth circuit said we're not gonna allow you to have a second by the apple to prove restitution. That's a completely different situation than here when we had a very long 200 page, two day restitution hearing, where we tried, and we did, the agent, we're talking some about that documents that the agent could not provide, what we haven't talked about is a whole of the information and the spreadsheets that the case agent did provide. She went into painstaking detail about all of these properties. She looked at so many records. You can see that just by all of the exhibits that were entered at the synancing. The government did try very, very hard to fulfill its obligation here, and we should not be penalized in a way that the government was penalized in chemical and metal industries. If the court has no further questions, the government will see the remainder of its time. The government asked that the court affirm on all grounds, and if the court does decide to remand for a new restitution hearing, it asks that the court allow the government to try and fulfill whatever its new obligations might be under this case, under this new opinion, to provide restitution to these victims. Thank you. All right, Mr. Quetz, you have right to rebuttal? Yes, Your Honor, I don't have to speak. The case agent put a lot of time and effort in creating this exhibit right here. The problem is the most information on there is wrong. In the Supreme Court, when they reversed earlier this year in Riemi Peraline, they said the danger of restitution is that it is a criminal penalty with no beyond reasonable doubt protection and a civil remedy with no seventh amendment jury trial right. That is why restitution is so important here, Your Honor. One of the first parts of Miss Simonsons argument she said, while there wasn't enough time here, probably for these loans to be resold 100 times. Well, maybe there wasn't enough time to resold 100 times, but I assure you that throughout, I think we in our reply, if we cited the quote from the Financial Crisis Inquiry Commission, the core function of mortgage originators throughout the industry, that port of time, all this 10 years ago now, sometimes they didn't even hold a new debt obligation for a single payment. They immediately turned around and resold it to one of the larger banks. The Financial Crisis Inquiry Commission described these mortgage originators as mere sales offices for franning and fed, not legally. They were different legal entities, but that was what their function was. I don't know how quickly that they were sold before a single payment was received in this case. I do know the government had to abandon that part of their multi-object conspiracy in count one, because they conceded there were no FDIC-insured originators in count one. They were necessarily these originate to distribute type entities. It's for that reason, Your Honor, that we don't know who the proper victims are. To take one example, I was looking, I would refer the court also to page 1124 of the record, that is from the first hearing before the judge that was reconvened for exclusively sentencing. And Mr. Broden, Mr. Tisdale's trial counsel, started explaining about Murge, which is a recording company. There's been a lot of litigation about Murge, that the mortgage electronic registration system, this is company in Virginia with like 10 people and computers. What Murge has done has become a nationwide foreclosure plan of what they did with these super computers as these securities were bundled up and tranched, and we know how this ultimately ended, what they did was enable to cut out the middle man, so they're able to remit to the ultimate investor, if they cut out Goldman Sachs to go to the pension fund, because it's ultimately paid to, in these gigantic debt obligations. That's what they do. And yet, Your Honor, this company, which no one thinks that this computer data compilation company is a victim, they are listed in the name of payee in the judge's order as being owed $18,000. Now, there's no way that anyone just claims that Murge is a victim, and there's no way to know that Murge is going to ultimately remit that money to the person who we claim is a victim. Judge Owen asked, what do we do if the victim is a company that is a defunct or no longer a business? I think the prosecutor's answer was, well, we look at the receivership order and bankruptcy court. Judge Owen, that does not fulfill the core function of restitution, which is to make the victim's whole, but not overcompensated, and only victim's whole. That is the core problem with what happened here. In my initial argument, Judge Stewart asked me, why should we not allow additional evidence to be taken or at least allow additional victims to be located? I mentioned the Supreme Court's opinion in Dohlin. I've done some further research on this since I sat down. We would commend to the Court of Professor Goodwin's restitution treatise, if we cited extensively in all of our previous briefing, section 9.22. This is a section where the Professor Goodwin specifically analyzes the issue in Dohlin. Of course, in Dohlin, what happened here, is the statute says you have 90 days, and Judge has said, well, we'll go longer than 90 days, so the statute says 90, what do we do? It's a very contentious five-four decision. But what Supreme Court specifically said in Dohlin, and what the Professor Goodwin's cite numerous other case, of course, with appeals have done, they said, if a district judge says I'm going to hold open restitution for some additional period of time, then they can do that. Here, there's no doubt that Judge Stewart at least did not say, well, okay, I'm going to enter this order provisionally, and then we'll find who the right victims are, the right people, and all amend the order, and then of course, we could appeal to this Court based on that amended order. That's not what happened here. It was a second hearing on restitution. The judge said the defendant didn't bring me countervailing evidence, so even though the government's evidence isn't really right, I'm going to go ahead and credit it. He signed the final order, that is the concrete restitution judgment, any person who thinks they've been agreed by Mr. Tisdale could go in the public records and search, and that's what they would see. And that information is categorically wrong

. I do know the government had to abandon that part of their multi-object conspiracy in count one, because they conceded there were no FDIC-insured originators in count one. They were necessarily these originate to distribute type entities. It's for that reason, Your Honor, that we don't know who the proper victims are. To take one example, I was looking, I would refer the court also to page 1124 of the record, that is from the first hearing before the judge that was reconvened for exclusively sentencing. And Mr. Broden, Mr. Tisdale's trial counsel, started explaining about Murge, which is a recording company. There's been a lot of litigation about Murge, that the mortgage electronic registration system, this is company in Virginia with like 10 people and computers. What Murge has done has become a nationwide foreclosure plan of what they did with these super computers as these securities were bundled up and tranched, and we know how this ultimately ended, what they did was enable to cut out the middle man, so they're able to remit to the ultimate investor, if they cut out Goldman Sachs to go to the pension fund, because it's ultimately paid to, in these gigantic debt obligations. That's what they do. And yet, Your Honor, this company, which no one thinks that this computer data compilation company is a victim, they are listed in the name of payee in the judge's order as being owed $18,000. Now, there's no way that anyone just claims that Murge is a victim, and there's no way to know that Murge is going to ultimately remit that money to the person who we claim is a victim. Judge Owen asked, what do we do if the victim is a company that is a defunct or no longer a business? I think the prosecutor's answer was, well, we look at the receivership order and bankruptcy court. Judge Owen, that does not fulfill the core function of restitution, which is to make the victim's whole, but not overcompensated, and only victim's whole. That is the core problem with what happened here. In my initial argument, Judge Stewart asked me, why should we not allow additional evidence to be taken or at least allow additional victims to be located? I mentioned the Supreme Court's opinion in Dohlin. I've done some further research on this since I sat down. We would commend to the Court of Professor Goodwin's restitution treatise, if we cited extensively in all of our previous briefing, section 9.22. This is a section where the Professor Goodwin specifically analyzes the issue in Dohlin. Of course, in Dohlin, what happened here, is the statute says you have 90 days, and Judge has said, well, we'll go longer than 90 days, so the statute says 90, what do we do? It's a very contentious five-four decision. But what Supreme Court specifically said in Dohlin, and what the Professor Goodwin's cite numerous other case, of course, with appeals have done, they said, if a district judge says I'm going to hold open restitution for some additional period of time, then they can do that. Here, there's no doubt that Judge Stewart at least did not say, well, okay, I'm going to enter this order provisionally, and then we'll find who the right victims are, the right people, and all amend the order, and then of course, we could appeal to this Court based on that amended order. That's not what happened here. It was a second hearing on restitution. The judge said the defendant didn't bring me countervailing evidence, so even though the government's evidence isn't really right, I'm going to go ahead and credit it. He signed the final order, that is the concrete restitution judgment, any person who thinks they've been agreed by Mr. Tisdale could go in the public records and search, and that's what they would see. And that information is categorically wrong. That's why we submit, and we go back down, if the government wants to find some additional evidence about damages, maybe that's okay. I wouldn't not urge the Court to do it, we should be confined to the four corners of the record. What the government should not be allowed to do is to go and find additional people who can now claim they are victims years after the fact when none of that evidence was deduced fairly in the first instance. I see my time is rapidly diminishing, but I would just point out, you know, the prosecutor makes this argument in her brief and in her response to my 28J letter, that mortgage is always increased in value. I'm pretty sure that's not what happened in this country in 2008 and 2009. The problem is not rapidly increasing mortgage prices. If these properties have fallen further in value by subsequent holders, maybe even financed by additional entities, that is too far removed from any causal, chain, attributable to Tisdale, and that is exactly what Justice Sotomayor said in her concurrence in the Roberts opinion. I was like a great argument for Judge Sully, Mr. Dreads. He might invoke the complicatedness exception. It was a wonderful way for him to end the entire process, but I was not there for the original, but I will be there for the new. And got you in the books. That segues to me, Mr. Kretsky, Mr. Wayland, Mr. Perez, our system absolutely could not function without the excellent counsel of point counsel, such as yourselves, not just in this case, but all the cases we have. This is a very complicated case in some major, some parts of it not so, but other parts of it. It's a little tricky. And so we appreciate, as a panel, as a court, all of you who serve as court-appointed counsel, in this case, and others, for the great work you do on behalf of your clients on behalf of our system. And we thank you. Thank both sides for good arguments and briefs in the case. It'll be submitted and we'll figure it out in due course. All right.

Channel for this week does consist of myself. Judge Benavides and Judge Owen. Judge Benavides was here yesterday. He's not able to be here today. However, as you know, we are recording the arguments. And so Judge Benavides will listen to the arguments and participate in our conferencing and otherwise fully participate in the decision of the case. So though he's not here to ask you some penetrating questions, we will try our best to ask the ones that he will ask you. But nonetheless, he will be fully participating in the case. And so with that, I remind you of what I try. Most people is just to say, if you stay center of the lectern, the microphones will definitely pick up your argument well. We'll hear it in even occasionally people in the audience want to hear what you have to say, even though we don't want you to play to the audience. But if you keep your voice up, the tape will be, but particularly here where he will be listening to the tape. And we listen to the tape actually to help us in writing the opinions are going back over it. And so the system is good, but it works best. Sometimes even yesterday with lawyers who are used to giving their jury arguments and so they like to move around and kind of do that. So far, purposes, if you just kind of stay there and keep your voice up. The only other admonition is just, you're familiar with the lighting system, when it's green, you got a full run. When it's amber, it's maybe a good idea. If there's another point you meant to hit, you might want to shift gears. When the red lights on, it does mean stop. But it's very important that we get the answers to our questions. So if we're asking you questions by all means, please fully answer the questions that we asked. With that, we're prepared and ready. So we call the first case in the States of America versus Beecham et al. Who's up first, Mr. Creston? Yes. Good morning, may it please the court? Seth Creston for the Appellian William Tisdale. For our order of operations, Your Honours, we would like to proceed today. I would like to begin my argument addressing the restitution issues. Then I will turn to the guidelines specific sentencing issues. And if I do not have time to address our multifaceted sufficiency issues, I will leave those to Mr. Whale and Mr. Perez. Maybe I'll get to return to it on a rebuttal. With regard to restitution, there's a point that the government makes in their brief judge to lease from a verdict to it at the second sentencing hearing, where they actually took up restitution. And that was where they repeatedly said that the evidence that was presented was something along lines of quote, the best evidence we have available. And it seems to me that's very telling because that necessarily suggests that we are in the flawed paradigm that comes from economics, a theory of second best. And the problem with second best evidence is that it is inherently unreliable. That is very important in the restitution context. We're taking property from one citizen giving it to another through the collection mechanism of the federal government. Before I turn your honors to the issues of rovers and the implication of that case and these other appellate cases, it dawned on me as I was preparing for this argument that we cannot say necessarily that the current holders of the notes, for at least current as the time of the sentencing, they've probably since been transferred again, there is no way to say that the current holders of the note actually bought them from either the mortgage issue or some secondary, it may well be your honors that the current holder of the note refinanced for the current occupant of the house. You could have an equitable subrogation type interest. Let's say that new refinancer did a bad title search. They didn't find some outstanding judgment lean that was entered. Are you gonna, this court in order to accept this idea that whatever evidence the initial mortgage price minus the payments minus the sale price is necessarily what has to obtain, you would have to say that somebody who refinanced and did a bad title search, nevertheless is a victim of Mr. Tisdale or his co-conspirators. We would argue that is inherently flawed and it's not acceptable interhewier any of the restitution cases. Turning specifically a year ago, we wrote the brief, of course Robert Sir Petition was still pending at that time, but the three main appellate cases is a sort of arch-druest, prudential landscape here, Cheyakuffinate, Circuit Young from the Knife, and James from the Temp. Those are still the three appellate cases on the issue of secondary lenders. In Jung, which of course the court cited to in Frazier, not the part that was overruled by robbers, of course, at pages 601 to 602, there's a lengthy paragraph about all of the different factors that might impinge on what affects the damages to a secondary holder. It might be a function of the interest rate, it might be a function of any number of other things. We would argue to your honors that one of the issues that this court is is confronted with as a result of being the first case in the country to apply robbers in the context of these secondary purchasers is to what extent is the analysis now no longer unidimensional. All these other cases look at the situation where holder one, Seltzra Holder two, Seltzra Holder three. Maybe you back out what was paid on it, but that seems to assume that these notes are always held are sold for par. Well, of course they're not sold for par, ask debt prices fluctuate, for any number of other reasons, especially, and this is the point I think, Justice Odomyre was getting at her concurrence in robbers. By the way, the name of this case is allegorical, right, and robbers, it's rather ironic. But is that in the mortgage context, the more reason we have heartings that are relief programs is that we've one house goes into foreclosure every other house the neighborhood falls by like 30%. There's any number of reasons that we would argue is to remove from the causal chain to tag Mr. Tisdale people like with the restitution under the evidence that was again, the government's burden to produce. Judge Solis said direct words, I don't have the evidence as the secondary resale price that the government didn't bring it and you defendants didn't bring it. Well, of course, it's the government obligation to bring it. If we accept that they did not bring it, then necessarily the restitution award is bad. We would argue this is different in the situation which compelled reversal by the case of the co-defendant Frazier last month, and of course that we preserve this issue down below. This was heavily litigated, there were numerous objections on the whole second hearing on restitution the government went and called a new expert, witnessed the case agent. We would argue your honors that what this court should do is remand to Judge Solis for the proper determinations that he is required to make, but we would submit in this case it would be appropriate to tell the government they don't get a second bite in the apple. This is all the evidence they had due so they brought to even the second restitution hearings where all these issues had been fleshed out that Judge Solis should make these determinations based on that which was presented in the first instance. We want to cut the government totally off. I mean assuming some measure of sea change, perhaps not all, brought by the Supreme Court. I mean if we remand it at all, I mean if nothing but from efficiency purposes, why would we want to issue a mandate that is somewhat conditional? In other words, what's the, I mean I know the value in terms of, to relieve your client, but in this sort of landscape here, what's secondary, more kind of the nature of what we're talking about and most of the time we get this restitution cases even if we're talking about lost profits, et cetera, there's sort of less ephemeral. I mean, you get the account seen, somebody can get their fingers around the dollars in calculate and this is a lot more abstract because we're talking market conditions and that kind of thing and I'm not sure how many cases are out there, but it's a little different. We frequently have problems with the calculation of losses, but as I said, you get in the right account and so whatever you sort it out, the judge makes a decision and kind of, there we are. This one's, so I guess what I'm asking is because the nature of the kind of restitution we're talking about is so different while we're in the value of B first. At best, we remand it for further proceedings and light of what the Supreme Court said. I mean, to your point, the government either has the evidence so they don't. So would your client be prejudiced by doing that? I'd like to answer your question to Stuart in two parts. Let me address the second part of your question first, which is with regard to the calculation of damages, certainly every restitution case is a horned book law that restitution is in a had to be proved with mathematical precision. We don't have to have an actual down to the penny accounting. Nevertheless, we would argue the authority that I would submit to the court in support of my argument that they should remand based on the record as it was adduced to the district court, at least at the time of the second sentence in hearing, is the 11th Circuit's very recent opinion in this case of singletary. The site is 649 F3D 12, it was an opinion by Judge Joe Flappen, an anonymous opinion, where the 11th Circuit did exactly that which I urged earlier in my argument, which is remanded to the district judge for the appropriate factual determinations within his province to make, but the exact words, the government does not get a second bite at the apple. That's exactly a direct quote from this case from the 11th Circuit, because your honors is very important. And it's paradigm where the government bears the burden. If we were here on a sufficiency case, let's say it was something that would be convicted of conspiracy and I was challenging sufficiency of the evidence. And if the government said, you know, we admit, we didn't call this witness who would have testified about agreement that they were on our witness list, they were in the hallway, we would have called them, we say, of course not, they didn't bring it into the four corners of the courtroom when it was their obligation to do. Well that's true, but I mean, oh yeah. But if we think about the nature of resolution, I mean, obviously, maybe not obviously, the rest of the design to make somebody hold, there's a loss, you know, there's a replacement of something that was diminished. So if what it purposes sent a singletary on its most punitive, but to replace that which is lost, why should, as a policy matter, the opportunity to make somebody hold or it's close to hold or whatever, there may be sort of go down the tubes really because in the scheme of saying, no. So I guess my point is, and I haven't read the case, I get your point on it, but because we are talking about a quote restitution, usually it's an impossibility that 100% is going to be replaced, but if there's some measure of it, isn't there kind of an underlying policy here in the sentencing equation to allow maximum opportunity for that to happen? If it doesn't happen, fine. I think my answer to your question, Judge Stewart, must directly be the structure in the exact requirements of the MVRA. There is this 90-day window in which a judgment can be held open before it's officially compromised as the restitution judgment. I know in the Supreme Court in Dolan, said maybe that could be extended in certain circumstances, but here since been, I don't know, about two years or so since the sentencing, you will have effectively created a mechanism whereby the government's failure to reduce the evidence they were legally required to deduce in the first instance has extended that 90 days to something like two and a half years. That'd be the first argument, I answered your question, Judge Stewart. The second would be that again, well certainly we do want, the law does want to make victims whole, that's just a court type of inherent power to do, that they can only do that pursuant to the statutory authority of the MVRA, but is absolutely impermissible that, of course, goes to Huey-Wan and Huey-2, is to overcompensate. That's as I pointed out in my reply, if it seems to me the government wants to frame the do-alpally as either, you know, we don't compensate any of the victims or we overcompensate certain people, and in this case, Judge Stewart, there's no doubt many of the listed victims, as Judge Sully said himself, at the sentencing, are in fact not the ones who qualify as victims. I know my time is up, if I could just direct the court to record 1175, or at least Tisdale's 1175, Mr. Broden, and then 612 Anita, one list Bank of New York is the victim, and the pre-sentence report has a marathon wholesale as the victim, and the court's response, we will track down the victim. In other words, the judgment as written, the restitution part was directly quoted in Mr. Tisdale's brief, awards restitution, which one is probably invalid to people, legal entities at least, which are not and were not victimized. That is impromissible from every aspect of restitution doctrine. All right, thank you. You're safe, you reserved. I'll be back. All right, Mr. Whalen. May I please the court? Good morning, my name's James Whalen. I represent Lendle Beacham. The two issues that I'd like to discuss today relate to the sufficiency of the evidence as to his convictions of count one and count two. In count one, he was charged with conspiracy to commit wire fraud, and we believe that the evidence clearly fell short of sufficient evidence to find him guilty of that offense. And I'd like to focus on basically the concept in US versus Loney, where it talks about specific intent, that there has to be specific intent to commit wire fraud, and that the person must intend some specific harm from his deceit. Now, the government's theory at trial was simply that Mr. Beacham was participating in what we call VORs or verifications of rent. The evidence clearly showed from trial according to Mr. Frazier, that Mr. Beacham never created these documents or signed these documents. And so without having any documents with his signature on or handwriting, then the government moved to the next theory is that he was aware that he was participating in this conspiracy. And so that solely relied on the testimony of Mr. Lockhart and Mr. Frazier. And we believe that the testimony of Mr. Frazier and Mr. Lockhart clearly falls short to establish that. Why they did? What departure from the usual notions of attribution in conspiracy law, you urgent? He wasn't part of the conspiracy that, I mean, I know you're saying that, where, but sort of on book, he's charged in the conspiracy, he's charged with the knowledge of others, et cetera. So specifically, where do you say the chink was in the, I mean, assuming the believability of the witnesses having him looped in, why isn't he culpable that way? Well, I think if I would agree that if there's a believability of Frazier and Lockhart, then it, then it, then it. I case law clearly forecloses that. I mean, didn't it? I mean, they testified to certain facts. They did testify to certain facts, but I think they're testimony as a whole when you look at all the different contradictions and misstatements that they may compare to other people that testified, especially when it's related to germane Frazier. It all comes down to credibility, didn't it? I understand that, but I think that there are, our position is that they're not reliable, that they couldn't be relied on to establish that. You have a case from our circuit, any place else, it says, as a matter of law, this testimony is not reliable. It has to be incredible and unbelievable to disregard a co-conspirators testimony. I agree that the case law clearly says that they can rely on a co-conspirators testimony. Our belief based on the record as a whole that it was unbelievable because there were so many contradictions between not only Mr. Lockhart and Mr. Frazier, but also Mr. Frazier as related to the straw buyers. Mr. Frazier testified on several occasions every single one of those people came in and sat down across from him and filled out those documents. And then every straw bar that I recall from the record came in and said, I never sat down with Mr. Frazier. I never filled out the documents. I gave him some information and he created them whole cloth from there. And so I think those contradictions are important. That does have anything to do with the VORs. I mean, the fact that he didn't sit down with the straw buyers, lens credibility to the theory that Beechham was in on the creating the false documents, didn't it? Well, I disagree. I don't think it does, but I think the other part that it goes as far as the conspiracy goes, I think that's important that as far as whether Mr. Beechham was involved in the conspiracies, I think the testimony of Frazier and Lockhart, where they both said that they began. One Frazier said, I didn't believe I was, we started this with good intentions. I think was the quote of Mr. Lockhart and then Mr. Frazier. And so the essence of that argument is, is where is Mr. Beechham agreeing to participate in agreement to violate the law? Where was the agreement to violate the law on Mr. Frazier and Mr. Lockhart? Because they both said Mr. Lockhart testified, I started this with good intentions. Mr. Frazier testified. Well, I thought there was evidence he needed. They were each of the straw purchases was getting 15 or $20,000 out of the deal. And I mean, I thought there was evidence from which someone could figure out that this is not. I think when it relates to the count one with Mr. Beechham, I think solely with the VORs, the argument is, is that they believe that they were, this was a legitimate deal and it was started with good intentions that therefore he can't then agree to enter into a conspiracy where there's no agreement to violate the law or knowingly with a specific intent to the fraud. So I think that kind of goes to that part of it. I said, and then the second part, I think as it relates to count one, is the materiality of these VORs. I think there is, obviously there is testimony in the record that they say, well, we would look at these VORs, but I think the evidence is contrary to that. Because when you look at the specific, all the different documents, the verifications of rent that were submitted in the evidence, there's so many of them that don't have any information in them, they don't have addresses, they don't have phone numbers, they don't have any identifying information in them. And then there was testimony that, at least on one of the exhibits, Veronica Gilby, I think, was the witness said, well, there's no way we would have relied on that because it doesn't have any information in it. That's one of them. That was one of them, but I think also, when we talk about that, they said, well, there's no way we could have relied on it. I think it goes to the greater inference of the evidence that they didn't rely on them at all, because when you look at every underwriter, testify that, or mortgage persons, that we just verified income and employment over and over and over again. And so they never said, we came back and verified these verifications of rent. They said, well, we may have relied on them, but I think when you look at the documents as a whole, and the way they were put together, and the way they were presented, I don't think the evidence supports that there was any reliance on them in a material way, based on the testimony that said, we just verified income and employment for these types of loans. So I don't think the evidence falls short on the materiality part of it as well. And so on the count one part for Mr. Beecham, I don't think the evidence was sufficient for those reasons. Also with regards to count three, which was the substantive wire fraud, once again, I come back to the specific intent to the fraud. I know that he had a general warranty deed. Now, I know the testimony stated a trial that the transaction hadn't been completed, but there was no specific intent to the fraud because there were so many different third parties involved in this, there was realtors, there was title agents, there was everybody that was aware that was going on, because if you look at the title policy, it showed in the title policy that this was subject to an unrequited warranty deed. And so it was there and disclosed in the title policy. Secondly, WMC, there's testimony that they did a collateral review, because there's an allegation that this appraisal wasn't inflated and that was part of the fraud, but it shows they did a collateral review and they also requested a 12 month chain of title. So in their underwriting policy, it reflects that they did a collateral review, they did a 12 month chain of title. The title policy says there was an unrequited warranty deed. So to me, based on the evidence of Pierce's full disclosure of this, but finally, I get to the end, when you talk about specific intent to the fraud, when you look at Mr. Beechham's statement to the regulators and the auditors that he goes, I believe these transactions to be legal at the time. He believed that they were legal and he could do it this way. And I think the documents reflect that because they were fully disclosed in the title policy and everything else that they did. And so when you get down to specific intent, did he intend to harm anybody? Well, I mean, it didn't harm the fact that they were taking the mortgage proceeds and paying off the straw buyer and then scraping some off the top for themselves. It wasn't the fact that he didn't pay the price for the properties. It was they were taking mortgage money and using it for other than paying the purchase price of the property. They were, they were, I think that would make, I would agree with you if there was the inflated appraisal. But I think when you look at, I thought there was evidence that they were. Well, I think their evidence that also that there wasn't because I think there was testimony in the record that the appraisal of the property through the central appraisal district at the time was on par for the sales price. And so there was some testimony or some evidence to support that it wasn't inflated. And also, I think it was. But there was evidence that what? And we've got to take the evidence and light most favorable to the jury verdict. Right. And I think also going back to it, you had the testimony of Mr. Mooreman who said, no, I inflated the appraisal, the calling counting appraisal district evidence suggested otherwise. Well, the fact was that the price that Mr. Beecham agreed to pay to the sellers was quite a bit lower than the mortgage that they've obtained. So there's a pretty good spread in there. Yes, there was a good spread, but I think based on the evidence, it was an arm-plank transaction that wasn't anything inflated that if they're based on the fact that the loan company did a collateral review and were satisfied that the collateral was sufficient to support the loan. And so I think market forces, one could say, we bought it at this price, he was able to sell it higher due to maybe changes in the market. I don't necessarily think that in and of itself would show that there was intent to harm. I think the other interesting part about the Quimlin property was that eventually that was sold and there was no loss to it. Now, I know you can't say, look in the future, there wasn't any harm to anybody, you have to look at it at the time. But I think when you look at the transaction as a whole, I don't think there was any intent to harm the mortgage company or anyone else other than the fact people made a transaction that they really brought up. Well, I thought there was testimony that they knew these people couldn't pay the mortgages. They agreed to pay the first two payments. They knew they were going to default and they didn't care. So that it was fairly likely that the mortgage company was going to end up holding the bag. For the most part, that was a general theme of it. But I think when it came to Mr. Mizzou, I don't think there was testimony that he said, no, there's no way I could have made it. He did eventually, he did make payments on it, eventually sold the property and was never in default on it. And never went into foreclosure. So I think when it comes specifically to the Quinoa property, I don't necessarily believe that applies here. Thank you. All right. Thank you, Mr. Wu. Mr. Puyers. May it please the court? I naturally want to request that the court allow us to adopt the ordinance put forth by co-counsel Tizdale under rule, a permeate I-regard in restitution. There was some brief discussion in my brief regarding that, manly about the definition of the pay restitution amount greater than loss cause and the error effects substantial rights. But I want to talk more about the multi-conspiracy issue. We discussed the multi-conspiracy issue under Maribel. And I believe those factors still pertain on here. They were in the context of double jeopardy, but they still pertain. I do want to argue this and discuss this regarding the three factors under Maribel, though. Before, as a background, Maribel was a conspiracy involving persons who brought in mobile homes. And everyone in that conspiracy were all part of the same conspiracy. There was just a division of labor, under Mitchell that the court, that the government also relies on. It was a drug conspiracy. And what you see is a hierarchy involvement there. So the court does not believe there's multiple conspiracies. In our case, it's different. We have a dissolution between the partners. Now, the first one is common goal. And the government is right. It is brought into fine. But this is a little bit different. They indicate that in tomorrow, the common goal was for the defendant to derive gain from the sale of mobile homes. They're saying that's the same with us. But what they see in the definition is the goal is to derive gains. It's not to do the mortgage fraud or commit this fraud against lenders. It was to derive gain. And ours, it was to derive gain. That's not a common goal. Because the gain in our situation was for our conspiracy. The gain in law cards was for their conspiracy. That was not the common goal. The second factor is the nature of the scheme. And it's inferred from the act. Basically, the activity is the one scheme unnecessary or advantageous success of another. That's not true here. We have a separate entities by name, by employees, by the method of which they may have committed this fraud. The government says that there's a larger plan and it spans both conspiracies, but that's not true. Now, they say that it's because of holidays and Jacque and Hoth are involved and the parties knew both of them. But there was not an agreement to defraud the holidays. In our case, there was no specific intent to defraud them before the split. There's no evidence of that. Also regarding any kind of early groundwork made, laid on this, the government says that there was just football given to Catherine Gill. There were talks between law, cart, and tith, all after the split. I don't think the football is enough to tie these two conspiracy together. I don't think the conversation was too stacey Chambers testified that the conversations were after the split, but after the conversation, Tisdale said he just wants, he just wants to know my business plan and I'm not going to give it to him. Also, the difference in nature of the scheme was we didn't use the false VLORs, didn't use the false depressions. And everyone of the properties and junctions involved in, the lenders agreed that the appraisals who were fair appraisals because the comparative values the homes around them. What we have here, there's a disparity in what's been earned and what was made here and what the houses were sold for. But what we have is that everybody that bought a home got what they paid for, what they bargained for. The fact that Jones made a profit on that doesn't mean that he had an intent to defraud. The last factor, the overlapping participants, regarding the interrelationships between the parties. In this situation, Lockhart was the key player in his, in his conspiracy. Tisdale was the key player in his conspiracy. There was a dissolution, there were papers, there was a partner in the ways. Lockhart took his clients, Tisdale took his clients. There was no sharing of profits. It was a situation where Tisdale opened up a branch office and it was a complete name completely different. There was no connection between them. I guess lastly, what I want to talk about is the harm analysis. I do believe that in burger it says the conspiracies, if a defendant's found guilty of one of the conspiracies, substantial rides aren't affected. But they aren't affected if the defendant can show prejudice by variance and what was charged and what was proven. As the government says, this is, this is going to transference of guilt from one co-definanced to the other. And it's saying that there's not. There is. They found our clients, Tisdale Jones and under a pinnacle and until a guilty by association. Government says there's no spill over prejudice. But that's exactly what it was. In addition to that, I think that the serious, the problem that we had in our case, the real harm was is that the jury wasn't able to make a reliable reliable judgment about guilt, guilt or innocence on our conspiracy and that it did affect my clients' trial rights. All right, I gave you an extra minute. You may not have known it. About a minute. About two seconds. You had run out a long time ago. I gave you an earphone there, man. Oh, you should get that last point in. All right. Thank you, sir. All right, you're from the government. Some slight disagreement. Just some of the points you are. Leah Simonson for the government. Gonna start with restitution. I think that is the issue that's really a play here as shown by the fact that's really the only issue that was addressed in the reply briefs and that's what they started out with. The government realizes it's in a compromised position on this because of the Fraser opinion. The government realizes that. But the government also sees no legal reason why it should concede error. So I'm not going to do that. I still believe that Judge Silesh did a reasonable thing by looking at the evidence in the record, looking at the agent's testimony, where she explained that she was not able to reduce the documents of what the secondary lean holder is paid for the loans. Looked at the time period of the loans, one thing I want to address is that Mr. Tisdale's council suggests that these loans could have been sold 100 times. If you look at synopsis a bit one, which is Tisdale's properties, those loans were foreclosed on in between one and three years of when the loans were taken out. There was not time for them to be sold 100 times. There was barely time for them to be sold once. I believe there's testimony in the restitution hearing record that some of these loan companies, or it made them in the trial, but some of these companies are just mortgage companies. They're not loan servicing companies. So what would happen in some of these cases was that the loan company would issue the loan and it would sell it to a servicing company, the servicing company would end up foreclosing. The other thing that happened in some of these situations was after the loan was given out, it was sold to an entity that sold it as mortgage-backed securities. So those were the two things that happened with these loans. So A, there was not time for the face amount of the mortgage to change very much because of the short time frame we're talking about, B, not time for them to be sold several times. Looking at all of those facts, Judge Siles made the very reasonable determination that instead of awarding zero restitution, which is what the defendants were asking him to do, to victims who were obviously injured in some way, he would award restitution equal to the face amount of the loan minus the amount of the property once it was sold out of foreclosure to a third party. And that is what he did. And the government maintains that that was the correct way of calculating the restitution amount in this situation. That's assumed based on what was known at the time, that was the best approach or whatever. I mean, does the government acknowledge that, well, let's back up to the point made by the other side that the government didn't produce the best evidence, that it was either the second vaster or not. I mean, what do you say to that? The government produced evidence that it had available given the state of the defunct mortgage companies and other holders of these properties at the time. Mr. Tizzale's Council admitted that this was a crazy time in loan funding where a lot of companies lent money and then because of the great number of defaults that happened during the recession, they are defunct, the documentation is just not there for some of them, but they still are victims. What do you do in that situation? And that's where the government asked Judge Celes to go ahead and award restitution according to this formula that I explained instead of awarding zero. Now, in terms of Mr. Tizzale's argument that we should not get a second bite of the apple because we could not produce the documentation the first time there are other ways. First of all, Frazier, if it's adopted by this court, Frazier is unpublished, obviously. So I would say technically it doesn't exactly change the law on the circuit, although a lot of the supports are gonna follow that anyway. But certainly, if this court were to issue a published opinion adopting Frazier's reasoning, which we asked the court not to do, but if you were to do that, then that would change the law in this circuit on how to determine restitution in these circumstances. There was no case telling Judge Celes what to do and telling the government what type of evidence to produce. Although the government may not be able to produce, as it said the first time in the first restitution hearing, it may not be able to produce any documentation showing what the secondary leanholders paid to purchase these loans. It could potentially provide expert testimony or something else to say that in these precise circumstances, the secondary leanholders would not have bought the loan for less than the face value. I can anticipate that that is what we would try to do. For example, at Frazier's new restitution hearing that he will get, and that's another point I wanted to highlight is that Mr. Frazier, who is a co-definite of these defendants, will get a new restitution hearing. And so it would be unfair for the government to not also be- Suppose we take you at your invitation, and we hear issue, depending from this panel, formally adopting Frazier, not Frazier's defendant, but adopting the unpublished, non-presidential analysis, if you will, a holding of that case and remand of further proceedings in light of a Frazier, and be, you know, to the extent robbers or robbers, you know, applies and just sort of clearing the slate, so to speak, so that without necessarily criticizing whether what Judge Sully's did was correct based on what he then knew. But everybody now knows, you know, what the law is, but particularly as I was trying to say before, this kind of evidence is just kind of nebulous. I'm not sure whether the snapshot the government had back then of these defunct mortgages. I have trouble staying with what the quality of that evidence will be on a remand or not, but as pointed out, that's the government's burden. So I guess underneath my question, is there some potential quality of this evidence or availability of evidence, or a center that may be available to then be applied to, you know, the new legal principles? Yes, Your Honor. One thing I think that we're also gonna explore is whether we could get representatives from the defunct mortgage companies to say what their practice was in terms of the lean holders who ultimately sold the properties after foreclosure, they could testify to what their practice was in terms of what the amount they usually paid for mortgages from the original mortgage company would be. So there is potential testimony that I can imagine that we would try to elicit at a restitution hearing that would, we expect be a good substitute for the documentation that we can't get. So the government strongly requests that we be allowed another chance to make these victims whole, as you said, judge Stewart, because we're not just talking about us, we're talking about the victims. The government has an obligation under the law to try and make these victims whole. And we will... If the victims are defunct, where's the money get? The secondary purchasers? It goes to, I'm not sure, it would go to the receivership, if they're in bankruptcy, it would go to the receivership and be distributed in line with what that, what the court order is relating to that would be. So it ultimately would go to, whoever's standing in the place of those companies at this point to be distributed as they see fit. Potentially just a ballpark figure. How much are we talking about? Well, I did some rough calculations of how much it would be in example, and for example Mr. Tisdale's case, and we're looking at possibly half of his restitution amount that we're talking about. And his restitution amounts a little over a million dollars. It's $1.1 million. I believe we're looking at about $550,000 that victims might lose if we don't allow a new restitution hearing. If this court does decide to adopt Frazier, which, as I said before, the government, the government's position is that you shouldn't do that, but we understand that you might. And I wasn't suggesting that, you know, Joe and the panel had decided to do that. I was just trying to give you... Yes. ...the hype that if it came to that, but I wasn't suggesting that we made any such decision beforehand to necessarily do that. There were probably some reasons not to do it, but just sorry about thoughts or kind of... No, and I've seen, of course, I've seen that happen before. So, obviously, completely up to this court, what to do, obviously, though, this court can also, although it might present some practical difficulties for you, reach a decision contrary to Frazier. Now, I want to move to Mr. Beachham's arguments. Joe, when you were correct that the evidence just simply goes against Beachham's arguments on both of his counts of conviction. I'll start with count one. He argues he had no specific intent to defraud the lenders. In line with that, he suggests he didn't create or sign any of these documents, and that's just purely contrary to the record. Mr. Frazier testified that he first contacted Beachham when he could not get alone through, because he could not show that this straw buyer could afford the mortgage amount they were applying for. And I have the testimony on page 29 of my brief. So, Frazier says he talked to Mr. Breachham about this, because he thought maybe Beachham could help him with this. And he told Mr. Beachham, I need you to sign a false verification of rent documents so I can get this loan approved. And he said, Beachham had some questions about it, so they talked about it. Frazier actually sent him the form for the verification of rent. Beachham read the form and sent the document back to him the way Frazier needed it. And so then the prosecutor asked, even more clearly, did he sign it and Frazier says yes, he did. Did he sign it with false information and it, yes, he did. Had you told him the information was untrue, yes, I had. So this was not something that Frazier and Lockhart just concocted or Tisdale II, just concocted a scheme where they were just using Mr. Beachham's name, but Mr. Beachham was actively participating in it. And he was being compensated for that. He got, I believe the testimony was about $200 per verification of rent that was filed with the loan application for each letter that was filed. The testimonies also that Frazier had permission to sign some of these verifications of rent when Mr. Beachham was not available. That comes from Mr. Lockhart. Beachham paid for those. He was, yes, the testimonies that he was paid for, all of them that were filed. And Lockhart said whenever, he agreed that whenever Frazier signed those, Beachham knew what was going on. Beachham gave his consent authorization for Frazier to sign Beachham's name. There were about, I believe the testimony was about eight properties in which these were filed. Those include the ones where Frazier signed and the loss was almost a million dollars from those properties. In terms of the materiality of the verification of rent, the government also highlights that testimony and it's brief between pages 28 and 35, but just to briefly summarize, Frazier explained that the reason in the first place he asked, and I just repeated this to the court, but the reason he asked Beachham to do the first verification of rent was he was having trouble getting a loan through. That VAR, VOR after Beachham signed it and Frazier submitted it helped get that loan through. Lockhart also testified it was important to have a VOR because Linder sometimes required it and then Veronica Gilby testified that VOR is a material to an underwriter's decision to recommend a approval of a loan because they show that the person applying for the loan has shouldered a payment that is in line with the mortgage payment that they are applying to get. Mr. Beachham talks about one VOR where there was some information missing, it was really a relevant, basically relevant information. I think it was his address that was missing. And then there was a box, the wrong box was checked, it said, the box for verification of mortgage was checked instead of verification of rent. But if you look at that exhibit and that exhibit is discussed in my brief, the relevant information showed it was clearly a verification of rent, it explained how much rent the shop purchaser was supposed to have been paying per month and for how long they had held the lease. So that too would have the correct information for a mortgage company to rely on and lending. On count three, Mr. Beachham also is ignoring the evidence when he argues that there's no evidence with specific intent. I want to just say that this count three and it focuses on a specific transaction called the Quinlan transaction for the house that it pertained to. It was about more than whether Mr. Beachham owned the house when he as a middle man sold it to the in purchaser because what happened was this couple called the Beatles, they owned the house, they sold it to Mr. Beachham for $310,000. A few months later Mr. Beachham sold it to Mr. Maisu, actually I was at the same time, I'm sorry they were basically simultaneous transactions but then he sold it to Mr. Maisu for $400,000 so that's a 90% markup in a span of weeks. And it's more than did he have the title when he sold it to Mr. Maisu from the Beatles? It's the fact that he also acted as the broker for the transaction from himself to Mr. Maisu and he misrepresented several things in the loan application that funded the purchase of Mr. Maisu's home, including Mr. Maisu's income. He, I believe increased it by about $5,000 per month. It was a false verification that Mr. Maisu would occupy, the property after the purchase, the loan document said Mr. Maisu would, and this was a common theme throughout all these transactions, these false spherifications of occupancy. Mr. Maisu was not gonna occupy the property. Then there was also the fact that Mr. Beachham hid from the mortgage company that he was acting both as the broker on the transaction and the seller of the home. So this is far from an arm's length transaction. This was a very close transaction where there was an obvious conflict of interest. Not only did Mr. Beachham not mention the fact that he was the broker and the seller to the mortgage company, but he actually altered documents or created two sets of documents to prevent the mortgage company from finding out that he had been both the broker and the seller. And it was one of the loan inspectors for the company that lent the mortgage that testified that this name is Diana Taylor, and this is in my brief pages 48 to 52, but she explained that there was no reference to his company Ace Mortgage and the documents that the mortgage company had, even though there was in another set of documents that was retained by Ace Mortgage. Another thing that Mr. Beachham climbs is that the property value when it was sold to Mr. Maisu was not inflated and that's just a lie. Brian Mormon was an appraiser and he testified that he was paid to inflate the appraisal that led to Mr. Maisu's purchase of that house. And that's pretty obvious when we look at a first sale price of $310,000 in a second sale price weeks later of $400,000, but Mormon testified I did inflate it. And then we also had the real estate agent who represented Beachham in the initial transaction where Beachham bought it from the Beatles saying it's crazy that Beachham turned around and sold that house for $400,000 when he just bought it for $310,000. She didn't think that that house could appreciate that much in that short of a time frame. Finally, I want to move to Mr. Jones' argument and he focused on the multiple conspiracy argument. First of all, as I explained my brief, beginning on page 36, whether a count charges multiple or single conspiracies and whether the government has proved multiple single conspiracies is a question of fact for the jury with a very deferential standard of review. It's the same type of standard of review we have in deficiency cases where the defense can only overturn that finding if they can conclude to can show that the evidence viewed in the night most favorable to the government would preclude a reasonable juror from finding a single conspiracy. And here, the evidence is not that clear at all. In fact, it very much supports there was a single conspiracy. Before I even get to the evidence, so I want to mention that at the defense request, the district court gave the multiple conspiracy instruction so that it charged the jury that if they were to find that the defendants, any of the defendants were not a part of the conspiracy charging count one, they were too acquitted. If they were to find that one of the defendants was part of a different conspiracy than the one charging count one, they were too acquitted. Obviously, the jury did not believe that there were different conspiracies obviously than the one charging count one. The defendants also strongly urged their argument to the jury in closing arguments. I believe every defense attorney did. I know for sure to his day on Jones' attorneys argued exactly what they're arguing here that there were multiple conspiracies and not a single conspiracy. And therefore, their clients cannot be convicted. The jury rejected that argument. The government has highlighted, according to the Morrow factors, the evidence that supports all three of the factors, the existence of a common goal, which Mr. Jones' council ignored, is to be broadly construed, is not limited to, the common goal is not limited to, are they always engaging in things that every conspirator will profit from? Clearly, that would not be the case in most conspiracies because most conspiracies are not these tightly wound circles. They are amorphous, they're more like amoebas and they change over time. But there were common defendants in the beginning of the conspiracy and there were even common defendants at the end even when Tisdale and Lockhart weren't technically doing business together anymore. There were conspirators like Suarez, who was doing business with both of them, both of the branches of the conspiracy. There were also several straw purchasers who had interaction with many of the conspirators during the time frame when Lockhart and Tisdale were beginning to separate. A few of those include Jacqueline Hawthorne, she was our witness number three, Wilma Holiday, she was our witness number seven, and Catherine Gill, actually Catherine Gill was interesting because she first had interaction after the split, but Tisdale and Jones still told her Lockhart was the head of their company. And that's where she got the football, but it wasn't just the fine football from Lockhart. It was the fact that they were representing to her that Lockhart was still involved in the company when she was engaging in these transactions with them. Even if one more is William Purcell, he bought three houses, the first he bought with Lockhart, Tisdale and Jones, the next two he bought with Jones and Tisdale. So there was not a clean break. There were a lot of straw purchasers that these defendants had in common. Some of them began with one or two of the defendants pitching the deal to these investors, and then in the end after Lockhart and Tisdale separated, Lockhart and Frazier would take some of these, Tisdale and Jones would take others. They would execute the same scheme. May I ask you, Mr. Quitsker, Director of our attention to record page 1175 and said many of the listed victims are not the real victims, what's he referring to? He's referring to the fact, not the fact, but there was testimony in terms of, at the restitution hearing, that's what he's talking about. The restitution hearing, there was a lot of discussion of representatives for the victims. There were trustees, as I explained to Judge Owen before, there are trustees for some of the victims because they're defamed. And in the spreadsheet that the agent provided, some of the names of the trustee, it would be the trustee, and then on behalf of, and then the actual victim name, and one of those she had, the actual victim name, cut off. So you couldn't tell what the victim, what the name of the victim was. So there, I think there was only one instance of that. There was another discussion of, as he referenced, whether American wholesale liners, or I think it was countrywide, was the one actually American wholesale liners is a sub of countrywide, so that's not really discrepancy, and that's in the record. He was talking about what are the names of the real victims versus the representatives of the victims. And what I did in my victim list, in our brief, and I counted 10 victims, who had at least some amount of loss, and those were the ones who ended up selling the properties in foreclosure, and those don't include any of the victims that were disputed in the restitution hearing in terms of what was the name of the real victim. So I excluded those, the one where the victim's name was cut off, and I still came up with 10. So the government sees no issue there. That's on pages 54 to 56, and I won a correct roll or on that topic, Judge Stewart. Mr. Tisdale represents that the case agents testimony, that I'm not giving the proper citation in the brief to the case agents testimony, where the case agent is discussing exactly what I said that some victims are named by trustee, and then on behalf of, and then the victim name. And I checked again, and I do give the correct record site. It's page 10, 19 through 20 of the restitution hearing. Do you have a response to his urging of us to read Singletary from the 11th Circuit in which he argues that the remand occurred without giving the government the second by the apple, do you have a response to that case or want to comment it at all? I do not know that case, because he is not filed to any J letter on it, so I've not had a chance to look at it. I will look at it later today, but I am familiar with a similar case in this circuit, and that was as chemical and metal industries. That was a case where the government simply did not fulfill its obligation at all to produce any evidence supporting restitution. It was just a big flood. And in that case, I think to penalize the government, the fifth circuit said we're not gonna allow you to have a second by the apple to prove restitution. That's a completely different situation than here when we had a very long 200 page, two day restitution hearing, where we tried, and we did, the agent, we're talking some about that documents that the agent could not provide, what we haven't talked about is a whole of the information and the spreadsheets that the case agent did provide. She went into painstaking detail about all of these properties. She looked at so many records. You can see that just by all of the exhibits that were entered at the synancing. The government did try very, very hard to fulfill its obligation here, and we should not be penalized in a way that the government was penalized in chemical and metal industries. If the court has no further questions, the government will see the remainder of its time. The government asked that the court affirm on all grounds, and if the court does decide to remand for a new restitution hearing, it asks that the court allow the government to try and fulfill whatever its new obligations might be under this case, under this new opinion, to provide restitution to these victims. Thank you. All right, Mr. Quetz, you have right to rebuttal? Yes, Your Honor, I don't have to speak. The case agent put a lot of time and effort in creating this exhibit right here. The problem is the most information on there is wrong. In the Supreme Court, when they reversed earlier this year in Riemi Peraline, they said the danger of restitution is that it is a criminal penalty with no beyond reasonable doubt protection and a civil remedy with no seventh amendment jury trial right. That is why restitution is so important here, Your Honor. One of the first parts of Miss Simonsons argument she said, while there wasn't enough time here, probably for these loans to be resold 100 times. Well, maybe there wasn't enough time to resold 100 times, but I assure you that throughout, I think we in our reply, if we cited the quote from the Financial Crisis Inquiry Commission, the core function of mortgage originators throughout the industry, that port of time, all this 10 years ago now, sometimes they didn't even hold a new debt obligation for a single payment. They immediately turned around and resold it to one of the larger banks. The Financial Crisis Inquiry Commission described these mortgage originators as mere sales offices for franning and fed, not legally. They were different legal entities, but that was what their function was. I don't know how quickly that they were sold before a single payment was received in this case. I do know the government had to abandon that part of their multi-object conspiracy in count one, because they conceded there were no FDIC-insured originators in count one. They were necessarily these originate to distribute type entities. It's for that reason, Your Honor, that we don't know who the proper victims are. To take one example, I was looking, I would refer the court also to page 1124 of the record, that is from the first hearing before the judge that was reconvened for exclusively sentencing. And Mr. Broden, Mr. Tisdale's trial counsel, started explaining about Murge, which is a recording company. There's been a lot of litigation about Murge, that the mortgage electronic registration system, this is company in Virginia with like 10 people and computers. What Murge has done has become a nationwide foreclosure plan of what they did with these super computers as these securities were bundled up and tranched, and we know how this ultimately ended, what they did was enable to cut out the middle man, so they're able to remit to the ultimate investor, if they cut out Goldman Sachs to go to the pension fund, because it's ultimately paid to, in these gigantic debt obligations. That's what they do. And yet, Your Honor, this company, which no one thinks that this computer data compilation company is a victim, they are listed in the name of payee in the judge's order as being owed $18,000. Now, there's no way that anyone just claims that Murge is a victim, and there's no way to know that Murge is going to ultimately remit that money to the person who we claim is a victim. Judge Owen asked, what do we do if the victim is a company that is a defunct or no longer a business? I think the prosecutor's answer was, well, we look at the receivership order and bankruptcy court. Judge Owen, that does not fulfill the core function of restitution, which is to make the victim's whole, but not overcompensated, and only victim's whole. That is the core problem with what happened here. In my initial argument, Judge Stewart asked me, why should we not allow additional evidence to be taken or at least allow additional victims to be located? I mentioned the Supreme Court's opinion in Dohlin. I've done some further research on this since I sat down. We would commend to the Court of Professor Goodwin's restitution treatise, if we cited extensively in all of our previous briefing, section 9.22. This is a section where the Professor Goodwin specifically analyzes the issue in Dohlin. Of course, in Dohlin, what happened here, is the statute says you have 90 days, and Judge has said, well, we'll go longer than 90 days, so the statute says 90, what do we do? It's a very contentious five-four decision. But what Supreme Court specifically said in Dohlin, and what the Professor Goodwin's cite numerous other case, of course, with appeals have done, they said, if a district judge says I'm going to hold open restitution for some additional period of time, then they can do that. Here, there's no doubt that Judge Stewart at least did not say, well, okay, I'm going to enter this order provisionally, and then we'll find who the right victims are, the right people, and all amend the order, and then of course, we could appeal to this Court based on that amended order. That's not what happened here. It was a second hearing on restitution. The judge said the defendant didn't bring me countervailing evidence, so even though the government's evidence isn't really right, I'm going to go ahead and credit it. He signed the final order, that is the concrete restitution judgment, any person who thinks they've been agreed by Mr. Tisdale could go in the public records and search, and that's what they would see. And that information is categorically wrong. That's why we submit, and we go back down, if the government wants to find some additional evidence about damages, maybe that's okay. I wouldn't not urge the Court to do it, we should be confined to the four corners of the record. What the government should not be allowed to do is to go and find additional people who can now claim they are victims years after the fact when none of that evidence was deduced fairly in the first instance. I see my time is rapidly diminishing, but I would just point out, you know, the prosecutor makes this argument in her brief and in her response to my 28J letter, that mortgage is always increased in value. I'm pretty sure that's not what happened in this country in 2008 and 2009. The problem is not rapidly increasing mortgage prices. If these properties have fallen further in value by subsequent holders, maybe even financed by additional entities, that is too far removed from any causal, chain, attributable to Tisdale, and that is exactly what Justice Sotomayor said in her concurrence in the Roberts opinion. I was like a great argument for Judge Sully, Mr. Dreads. He might invoke the complicatedness exception. It was a wonderful way for him to end the entire process, but I was not there for the original, but I will be there for the new. And got you in the books. That segues to me, Mr. Kretsky, Mr. Wayland, Mr. Perez, our system absolutely could not function without the excellent counsel of point counsel, such as yourselves, not just in this case, but all the cases we have. This is a very complicated case in some major, some parts of it not so, but other parts of it. It's a little tricky. And so we appreciate, as a panel, as a court, all of you who serve as court-appointed counsel, in this case, and others, for the great work you do on behalf of your clients on behalf of our system. And we thank you. Thank both sides for good arguments and briefs in the case. It'll be submitted and we'll figure it out in due course. All right

Legal Case Summary

United States v. Lendell Beacham

Date Argued: Wed Sep 03 2014

Case Number: D-14-0002

Docket Number: 2591025

Judges:Not available

Duration: 64 minutes

Court Name: Court of Appeals for the Fifth Circuit

Case Summary

United States v. Lendell Beacham

Oral Audio Transcript(Beta version)