[00:00:02] Speaker 03:
We will now hear argument in the final case of the day, which is Feinberg versus United States.

[00:00:22] Speaker 03:
While everybody's getting ready, I want to make certain I have this down.

[00:00:26] Speaker 03:
Mr. Manch, you have seven minutes, is that right?

[00:00:29] Speaker 02:
That's correct, Judge.

[00:00:30] Speaker 03:
And then I gather that Ms.

[00:00:32] Speaker 03:
Bond is going to be doing the rebuttal and we'll have three minutes.

[00:00:35] Speaker 03:
Is that right?

[00:00:37] Speaker 03:
That's correct, Judge.

[00:00:38] Speaker 03:
That's right.

[00:00:38] Speaker 03:
Very well.

[00:00:39] Speaker 03:
Okay, Mr. Manch, please proceed.

[00:00:39] Speaker 03:
Yes, thank you.

[00:00:41] Speaker 05:
Please, the court, counsel, good morning.

[00:00:43] Speaker 05:
My name is Eric Manch.

[00:00:44] Speaker 05:
I represent Mr. Feinberg.

[00:00:47] Speaker 03:
Can you get close to the microphone, Mr. Manch?

[00:00:50] Speaker 05:
Yes, of course, sir.

[00:00:54] Speaker 05:
I'd like to get straight to the issue that I'd like to spend the most time on, and that has to do with an issue that was brought up in the government's brief, and that has to do with the issue whether, as the government argues, the argument that we have raised in our appellant brief regarding, with respect to the restitution, the restitution hearing should be dismissed.

[00:01:24] Speaker 05:
pursuant to the government's argument in Menrique's first United States Supreme Court opinion in 2017, we would argue specifically that this case, for a number of reasons, is distinguishable, the most prominent of which is actually brought up in the government's own answering brief, which Menrique has to do with an amendment judgment, first of all, and our

[00:01:53] Speaker 05:
brief, the order which we find most objectionable in our case has to do with an order, we think this is significant for a number of reasons, which goes to the court of our, yes?

[00:02:10] Speaker 03:
When you get to Manrique, I want to be sure we're confining the appeal to what I understand it's supposed to be.

[00:02:16] Speaker 03:
I understand your Rule 29 motion as you presented it to the trial court.

[00:02:21] Speaker 03:
only challenged whether the government had presented sufficient evidence that the defendants intended to defraud their victims.

[00:02:27] Speaker 03:
Do you agree that's the only issue before us on appeal?

[00:02:30] Speaker 05:
Correct, Judge.

[00:02:31] Speaker 03:
Okay, thank you.

[00:02:32] Speaker 05:
So, as well as we're also arguing the restitution issue specifically, we brought that up in our brief as well.

[00:02:41] Speaker 03:
Well, that's my point.

[00:02:42] Speaker 03:
Yes.

[00:02:43] Speaker 03:
I'm not sure that's before us.

[00:02:45] Speaker 05:
Well, of course, our argument is that that was probably brief.

[00:02:48] Speaker 05:
And that was, of course, there's no argument as to whether the appeal itself, the notice of appeal was timely.

[00:02:56] Speaker 05:
The argument being raised by the government is whether the appeal issue with respect to the restitution should be dismissed.

[00:03:09] Speaker 05:
So.

[00:03:09] Speaker 00:
Well, you've argued that Manrique is distinguishable.

[00:03:11] Speaker 00:
What is the authority that supports your idea

[00:03:14] Speaker 00:
you can have a subsequent substantive order and you don't have to file a separate notice of appeal.

[00:03:20] Speaker 05:
Well, again, this goes to the core of the issue in our case, which is the restitution hearing, there was no amended order in our case.

[00:03:30] Speaker 05:
So the judge could, in this case, there was never an amended judgment setting the

[00:03:38] Speaker 05:
ordering this substantial restitution order of $4,925,134.79 in this case.

[00:03:44] Speaker 05:
Well, that's true.

[00:03:46] Speaker 00:
You have no reason to argue that we should deal with it.

[00:03:50] Speaker 00:
If the court just talked about restitution but never actually ordered it, then why are we even talking about it?

[00:03:55] Speaker 05:
Because, and I'll point the court to Justice Ginsburg's dissent, which I think makes some important decisions

[00:04:07] Speaker 05:
distinctions in her own dissent, which points out there was no opportunity for the district judge in this case to make any sort of advisory under Rule 32j that the defendant, defense counsel, had to file a proper notice of appeal.

[00:04:27] Speaker 05:
There was no opportunity for that to be done.

[00:04:30] Speaker 05:
there was no proper order, again, judgment.

[00:04:35] Speaker 05:
What would the proper protocol to happen in this particular case for counsel to simply wait and for a proper amended judgment to happen wouldn't have ever come in this case because, again, it simply never happened.

[00:04:52] Speaker 05:
It didn't happen in this case because

[00:04:56] Speaker 05:
Again, the issue simply was that there was never any restitution hearing conducted in the first place.

[00:05:03] Speaker 05:
In fact, in the judgment that was appealed… There was a restitution hearing.

[00:05:07] Speaker 00:
My understanding is that your client just didn't show up.

[00:05:10] Speaker 00:
Was his counsel there?

[00:05:13] Speaker 05:
In fact, if you look at the transcript, his counsel was there.

[00:05:15] Speaker 05:
And in fact, if you look at what the government actually did, the government actually did not want to proceed with the hearing at that time.

[00:05:22] Speaker 05:
The government actually asked for a warrant for both defendants and proposed that a status conference be set in 90 days.

[00:05:29] Speaker 05:
If you look at the judgment commitment order, the judgment commitment order says that the restitution amount was to be determined and says that the restitution was to be set in December of 2022.

[00:05:41] Speaker 05:
So there was no,

[00:05:43] Speaker 05:
subsequent order entered.

[00:05:46] Speaker 05:
There was simply an order entering the amount written by the district court judge, entering the amount, and there was no testimony taken.

[00:05:54] Speaker 00:
There was no additional... Is that order being entered and Manrique being applicable law?

[00:06:02] Speaker 00:
What's the excuse for not appealing from that order?

[00:06:04] Speaker 05:
Because, again, our contention is there was no... The problem

[00:06:12] Speaker 05:
becomes there was no proper advisory made, there was no opportunity made because there was no separate judgment to appeal from is the problem.

[00:06:26] Speaker 05:
If there was an opportunity to be made, there was one order to appeal from.

[00:06:35] Speaker 05:
And so it's distinguishable for that simple reason.

[00:06:41] Speaker 03:
Let me ask you this.

[00:06:42] Speaker 03:
I know you're trying to distinguish the case, but if the court is unable to distinguish Monrique, then you would agree, I gather, that your appeal on the restitution order is not before us.

[00:06:55] Speaker 03:
Is that fair?

[00:06:56] Speaker 03:
If we can't do that.

[00:06:58] Speaker 05:
If there is no distinction, well, it's a Supreme Court case, but we obviously would argue that it is distinguishable because it's— Of course, we understand.

[00:07:07] Speaker 03:
We feel differently about it.

[00:07:08] Speaker 03:
It's an amendment.

[00:07:11] Speaker 03:
Again, our position is that this is a wholly different case because the order is

[00:07:26] Speaker 05:
that's being appealed from is this initial judgment, which was entered in November of 2022.

[00:07:32] Speaker 05:
Simply put, there was never, now, if hypothetically speaking, the district court entered an amended judgment, which was contemplated in Menrique, then we would have a different situation.

[00:07:43] Speaker 05:
Thank you.

[00:07:43] Speaker 03:
Your time is up.

[00:07:44] Speaker 03:
Let me ask my colleagues whether either has additional questions.

[00:07:47] Speaker 04:
I have a question.

[00:07:49] Speaker 04:
I'm not sure if you're alluding to this, but it seems in your comments you're alluding to Justice Ginsburg's

[00:07:54] Speaker 04:
where she said that Menereke was not advised of the right to appeal and the government conceded that that was necessary.

[00:08:05] Speaker 00:
Correct.

[00:08:05] Speaker 04:
So if that's in the dissent, but if the government there conceded that the district court was required to advise the defendant of the right to appeal and that didn't happen here?

[00:08:16] Speaker 05:
It did not.

[00:08:18] Speaker 04:
So what does that mean?

[00:08:20] Speaker 04:
You think that means that the

[00:08:24] Speaker 04:
we should apply Manrique as a claims processing role and conclude that you have an appeal?

[00:08:33] Speaker 05:
Yes.

[00:08:34] Speaker 05:
Well, yes.

[00:08:35] Speaker 05:
Again, if Manrique is controlling, then the district court should have to advise defendants of their right of appeal after a, and that was not done here.

[00:08:47] Speaker 05:
That was not done here.

[00:08:49] Speaker 05:
And the defendant

[00:08:51] Speaker 05:
Neither defendant was advised of their right of appeal.

[00:08:55] Speaker 05:
So that would, so there becomes a whole nother issue of.

[00:09:00] Speaker 04:
What happens in a different sort of case, if it's not a case involving deferred restitution judgment, if it's just another criminal case and judgment is entered and there's sentencing and the district court doesn't advise the defendant of the right to appeal.

[00:09:19] Speaker 05:
Well, it's a violation of Rule 32.

[00:09:22] Speaker 05:
If they have a right of appeal, the defense is not properly biased.

[00:09:26] Speaker 04:
So how would that come into play as a practical matter if their appeal was untimely?

[00:09:29] Speaker 04:
Would they get some relief from that because they weren't advised of your right to appeal?

[00:09:32] Speaker 03:
Yes, they would.

[00:09:35] Speaker 03:
Other questions?

[00:09:37] Speaker 03:
All right.

[00:09:37] Speaker 03:
Thank you, counsel.

[00:09:38] Speaker 03:
All right.

[00:09:38] Speaker 03:
Thank you.

[00:09:39] Speaker 03:
All right.

[00:09:40] Speaker 03:
Let's hear from the government.

[00:09:41] Speaker 03:
Mr. Manti, is that the way he said it?

[00:09:44] Speaker 04:
He's back.

[00:09:45] Speaker 04:
He was here.

[00:09:45] Speaker 03:
You're back.

[00:09:47] Speaker 03:
There we are.

[00:09:56] Speaker 02:
Good morning again, Your Honors.

[00:09:57] Speaker 02:
May it please the Court.

[00:09:58] Speaker 02:
My name is Corey Mantyne.

[00:09:59] Speaker 02:
I'm representing the United States from the Tucson U.S.

[00:10:01] Speaker 02:
Attorney's Office.

[00:10:03] Speaker 02:
This Court should affirm the defendant's jury trial convictions and the District Court's restitution order.

[00:10:08] Speaker 02:
There is sufficient evidence of the defendant's guilt on those security and wire fraud convictions.

[00:10:14] Speaker 02:
Also, the defendant's challenge to the District Court's restitution order is not reviewable under Supreme Court precedent.

[00:10:22] Speaker 02:
But even if it is, the defendant has failed to show any plain error in how the district court issued its restitution order.

[00:10:30] Speaker 02:
Starting with the first point, there was sufficient and indeed overwhelming evidence of guilt in this case, including of the defendant's fraudulent intent, which is the focus of this appeal and was the focus of the defendant's Rule 29 motion.

[00:10:46] Speaker 02:
The evidence showed for well over a decade, the defendant systematically defrauded

[00:10:51] Speaker 02:
approximately 150 victim investors of nearly $5 million by convincing them to buy company stock, promising enormous investment returns that were never received, making promises about their V Delta software and promises about enormous investment returns and even charitable donations that they did not make.

[00:11:18] Speaker 02:
However, the victims never received a cent

[00:11:20] Speaker 02:
of an investment return from their investments.

[00:11:24] Speaker 02:
Many of these victims lived in the same town as the defendants and were part of their synagogue, their social circles and clubs.

[00:11:31] Speaker 02:
The defendants victims include their barber and even their office manager.

[00:11:36] Speaker 02:
There were numerous badges of fraud in this case as cases like Lothian show.

[00:11:41] Speaker 02:
For instance, the evidence of fraud

[00:11:43] Speaker 02:
included the defendant's various representations made to the victim investors.

[00:11:47] Speaker 02:
These misrepresentations appeared in the company's publications in addition to their presentations and face-to-face conversations with the victims.

[00:11:58] Speaker 02:
The defendant sold their company stock by promising significant investment returns, reaching hundreds if not thousands of percent returns and gains.

[00:12:07] Speaker 02:
Investors never received any money back, any investment return.

[00:12:12] Speaker 02:
Also touted the company's imminent release of the V Delta software and the imminent release of dividends to the victims.

[00:12:23] Speaker 02:
However, none of these circumstances ever occurred.

[00:12:25] Speaker 02:
And they also embellished and touted their revolutionary capabilities of their V Delta software.

[00:12:32] Speaker 02:
But their own programmers testified that the features that were promised were not ready to, ready in the software.

[00:12:41] Speaker 02:
And indeed, the software was never released.

[00:12:44] Speaker 02:
And finally, Your Honors, the defendant, among other evidence, the defendants also improperly used the victim's monies, which is also highly probative evidence of their intent to defraud.

[00:12:56] Speaker 02:
They drew victim's money from their bank accounts and used them to pay for personal expenses, like massages and restaurant bills.

[00:13:06] Speaker 02:
The FBI accountant testified and showed the jury how the defendants

[00:13:10] Speaker 02:
had used certain money to pay their bills and their mortgage.

[00:13:14] Speaker 04:
Can you turn to the restitution issue?

[00:13:16] Speaker 02:
Absolutely, Your Honor.

[00:13:17] Speaker 02:
In terms of the... I'm sorry.

[00:13:19] Speaker 04:
You heard our questions to your friend on the other side.

[00:13:23] Speaker 04:
So it looks like Judge Soto sentenced the defendants entered the judgment on November 15th, 2022.

[00:13:31] Speaker 04:
And then on December 13th, 2022, had a restitution hearing.

[00:13:39] Speaker 04:
The defendants were not present.

[00:13:41] Speaker 04:
He entered an order for restitution.

[00:13:45] Speaker 04:
Your friend says that there was no advisement of the right to appeal the restitution order.

[00:13:50] Speaker 04:
Do you dispute that or agree with that?

[00:13:52] Speaker 02:
I agree with that, Your Honor.

[00:13:53] Speaker 04:
So what are the consequences for failing to advise him of the right to appeal?

[00:13:57] Speaker 04:
Or do you think it was even required?

[00:13:59] Speaker 02:
I would say that the dissent in Minmarie case suggests that it's required.

[00:14:05] Speaker 02:
However, the majority decision obviously still ordered the dismissal of the appeal.

[00:14:10] Speaker 02:
And as Your Honor pointed out in the underlying proceedings, the district court also failed to advise of the appeal rights from the restitution order.

[00:14:19] Speaker 02:
So in terms of that, in Manrique, as on all fours on this case, the defendants were obligated to appeal from this final order.

[00:14:28] Speaker 02:
They didn't.

[00:14:29] Speaker 02:
They only appealed the final judgment.

[00:14:33] Speaker 02:
final judgment from the sentence earlier, as Your Honor mentioned.

[00:14:38] Speaker 02:
So we would argue that Menrique controls in this case and that dismissal of this portion of the appeal is mandatory.

[00:14:45] Speaker 02:
I would also say though, Your Honor, if the court chooses to review the merits of the restitution order, there is no plain error, let alone any error.

[00:14:55] Speaker 02:
The district court relied on uncontroverted evidence in the record, including the FBI accountants,

[00:15:03] Speaker 02:
summary of the victims' losses.

[00:15:05] Speaker 02:
The district court properly based its restitution order on the victims' actual losses as the Mandatory Victims Restitution Act required.

[00:15:15] Speaker 02:
At the restitution hearing, which was held, the defendants had an opportunity to present any contrary evidence or argument disputing the restitution award, the amounts, and so forth.

[00:15:27] Speaker 02:
There's no objection to any of the calculations.

[00:15:29] Speaker 02:
There's no objection to the restitution order

[00:15:32] Speaker 02:
The district court entered that order with no objection, without objection.

[00:15:38] Speaker 02:
The district court wasn't required to conduct a more, take further steps to order the restitution, where this wasn't a case where anything was actually in dispute.

[00:15:51] Speaker 03:
So the- I gather that the defendants were represented at the restitution hearing, right?

[00:15:56] Speaker 03:
The district's objection.

[00:15:57] Speaker 02:
That's absolutely correct, Your Honor.

[00:16:00] Speaker 02:
At the sentencing, in fact, the earlier sentencing, the defendants were advised of the date of the restitution hearing.

[00:16:06] Speaker 02:
They did not show, and one of the defense attorneys basically said that they had communicated with their clients and that the finders weren't going to appear because they were packing up their place.

[00:16:20] Speaker 02:
The district court then chose to proceed with sentencing, finding that

[00:16:24] Speaker 02:
They had voluntarily absented themselves.

[00:16:27] Speaker 02:
And on appeal, there's no objection to that course.

[00:16:30] Speaker 02:
There's no dispute that that was finding.

[00:16:35] Speaker 03:
That was... From the government's perspective, even if we were able to review the restitution order, notwithstanding Monrique, they didn't object.

[00:16:45] Speaker 03:
It's uncontroverted.

[00:16:47] Speaker 02:
Correct.

[00:16:48] Speaker 02:
Your Honor, there couldn't have been error, let alone plain error, when the district court was relying on uncontroverted evidence from trial, sentencing, and the restitution hearing.

[00:16:59] Speaker 02:
Again, the defendants had an opportunity, and through defense counsel, to present any contrary evidence or arguments.

[00:17:06] Speaker 02:
They failed to do so, and certainly the district court did not err, let alone plain error, in issuing that restitution order.

[00:17:16] Speaker 02:
If the court has no further questions.

[00:17:20] Speaker 03:
Other questions?

[00:17:21] Speaker 03:
I think not.

[00:17:22] Speaker 02:
I'll simply close that we would respectfully request that this court affirm the defendant's convictions for money laundering, referring to my previous case, securities fraud and wire fraud, and also affirm the district court's restitution order.

[00:17:37] Speaker 02:
Thank you very much.

[00:17:38] Speaker 03:
Very well.

[00:17:39] Speaker 03:
Ms.

[00:17:39] Speaker 03:
Bond, you have three minutes of rebuttal.

[00:17:44] Speaker 01:
Thank you, Your Honors.

[00:17:46] Speaker 01:
And just for the record, I am Stephanie Bond, and I represent specifically Betsy Feinberg in this case.

[00:17:53] Speaker 01:
Your Honor, in looking at the Rule 29 issue, I'd ask the Court to focus on the fact that this was a functioning company.

[00:18:02] Speaker 01:
Granted, it was not run very well.

[00:18:05] Speaker 01:
It didn't do what the defendants believed that it could do.

[00:18:10] Speaker 01:
But this was a functioning company.

[00:18:12] Speaker 01:
They had offices.

[00:18:13] Speaker 01:
They had employees.

[00:18:15] Speaker 01:
The employees testified.

[00:18:18] Speaker 01:
As this court has stated, the office manager, who you would assume would know of the progress of everything and what was going on in the company, she was a victim in this case because she was given stock as a part of her employment.

[00:18:35] Speaker 01:
She didn't ring any bells about there being any issues.

[00:18:40] Speaker 01:
in this company.

[00:18:42] Speaker 01:
We had several employees.

[00:18:46] Speaker 01:
The Feinbergs themselves were also employees of this company.

[00:18:53] Speaker 03:
With respect, I gather you're making this efficiency of the evidence argument.

[00:18:58] Speaker 03:
Given the overwhelming evidence presented by the government with all these victims, a lot of people in the synagogue, friends and so on, the luxurious lifestyle that the Feinbergs had,

[00:19:11] Speaker 03:
Is there any really serious argument that you can make about sufficiency of the evidence under Jackson?

[00:19:17] Speaker 01:
Judge, the best argument that I have is the fact that they were not living a lavish lifestyle.

[00:19:26] Speaker 01:
I think that was overblown in the trial because if you look at the actual testimony of Betsy Feinberg, she's driving a 22 year old car

[00:19:37] Speaker 01:
She's going to her normal hairdresser that she's gone to for all these years.

[00:19:42] Speaker 01:
There's nothing lavish about it.

[00:19:44] Speaker 01:
They're taking people out to employees for businesses, type meetings, all those kinds of things.

[00:19:52] Speaker 01:
And they're going to pizza places and bar and grills.

[00:19:55] Speaker 01:
They're not going to some lavish steakhouse spending all this lavish money.

[00:20:01] Speaker 01:
The money was actually pretty

[00:20:04] Speaker 01:
reasonable when you think about it, the money that they were spending.

[00:20:08] Speaker 01:
The government is saying, well, they were spending all this money on their health care.

[00:20:14] Speaker 01:
Well, that was part of the company's health care that all the employees, them as employees, were able to take advantage of.

[00:20:22] Speaker 01:
So that's really the sufficiency of the evidence argument is the fact that these aren't people that came in, took people's money, and left.

[00:20:31] Speaker 01:
They lived in this area.

[00:20:34] Speaker 01:
They continued to go to see the hairdresser who was also an investor.

[00:20:39] Speaker 01:
Their office manager continued employment with them who was also an investor.

[00:20:45] Speaker 01:
Everybody at their synagogue was also investors.

[00:20:48] Speaker 01:
They continued to go there for years and years and years.

[00:20:52] Speaker 03:
Your time is up.

[00:20:53] Speaker 03:
Other questions about my colleague?

[00:20:54] Speaker 03:
All right.

[00:20:55] Speaker 03:
Thank you, counsel, for your argument.

[00:20:57] Speaker 03:
The case just argued is submitted and the court stands adjourned for the day.