[00:00:07] Speaker 01:
Our next case is number 2110277, United States versus Graham.

[00:00:19] Speaker 01:
Mr. Bresnahan.

[00:00:20] Speaker 02:
Thank you.

[00:00:21] Speaker 02:
May it please the court, Mike Bresnahan representing Michael Graham.

[00:00:27] Speaker 02:
There are several issues here.

[00:00:29] Speaker 02:
I would like to start with the restitution issue, if I may.

[00:00:34] Speaker 02:
We're challenging the restitution ordered as to Ireland, Hill, York, Knutson, and Shoning.

[00:00:42] Speaker 02:
It's our position that the government did not adequately or failed adequately to establish these claims through what I would describe as poorly constructed and poorly completed boilerplate victim impact questionnaires.

[00:00:56] Speaker 02:
And as to Dan Hill, I didn't see an impact statement.

[00:01:01] Speaker 02:
All I could find in the record was an interview that he gave a partial interview that he gave.

[00:01:07] Speaker 02:
Uh, I think it was the FBI that can be located at two ER one 55 where he talks a little bit about, um, investing.

[00:01:16] Speaker 00:
Mr. Bresnahan helped me on this as to the people for whom there were counts of conviction as to the victims for which, for whom there were counts of conviction.

[00:01:29] Speaker 00:
Is it your claim that the evidence isn't sufficient to support the amount of restitution?

[00:01:35] Speaker 00:
Or it isn't sufficient to support a restitution order at all?

[00:01:40] Speaker 02:
Well, the restitution argument centers around these specific individuals.

[00:01:48] Speaker 02:
I don't think any of these individuals were mentioned in any of the counts of conviction.

[00:01:55] Speaker 00:
There's one, because there's one you're arguing because

[00:01:58] Speaker 00:
that count that related to her?

[00:02:00] Speaker 00:
Well, Ireland, yes.

[00:02:01] Speaker 00:
Right.

[00:02:01] Speaker 00:
But as to the others, so is your argument that there's no evidence that they were injured at all, or is your argument that there's not sufficient evidence to support the amount of the restitution order?

[00:02:12] Speaker 02:
That they were not injured at all in the sense that there was insufficient evidence to connect them to the case.

[00:02:20] Speaker 03:
Was this argued in the district court?

[00:02:24] Speaker 02:
Well, yes, there was an argument at sentencing that restitution should not be ordered as to these individuals.

[00:02:35] Speaker 02:
And so that's what I'm working from.

[00:02:36] Speaker 03:
And all we have with regard to them are their victim impact statements.

[00:02:40] Speaker 03:
I mean, the victim impact statements do say that they were defrauded or at least can be inferred that they were defrauded and they have an amount.

[00:02:50] Speaker 03:
So is your problem that it's hearsay and it was under penalty of perjury, right?

[00:02:55] Speaker 03:
These statements.

[00:02:55] Speaker 02:
Yes, they were.

[00:02:56] Speaker 03:
So the question is,

[00:02:58] Speaker 03:
Is it a hearsay problem or what's the problem?

[00:03:01] Speaker 02:
No, not so much a hearsay problem.

[00:03:03] Speaker 02:
I think hearsay would be permitted.

[00:03:05] Speaker 02:
I think the problem was in looking at the actual victim impact statements and that the interview at 2ER 155, there simply wasn't enough information provided by these alleged victims that they were defrauded

[00:03:26] Speaker 02:
in the way alleged in the indictment or that they were really defrauded at all.

[00:03:34] Speaker 02:
They were simply inadequate.

[00:03:37] Speaker 00:
So I take it your argument is, I mean the victims did say, I sent a bunch of money to Mr. Graham and I didn't get it back or didn't get all of it back in some cases.

[00:03:50] Speaker 00:
So I take it your argument is, well, that's not enough.

[00:03:54] Speaker 00:
There must be some evidence that the reason they didn't get it back, these particular victims didn't get it back or lost the money, was because of the things for which Mr. Graham was convicted.

[00:04:07] Speaker 00:
Am I fairly summarizing your argument?

[00:04:10] Speaker 00:
Yes, Your Honor.

[00:04:11] Speaker 00:
Because there's clearly evidence of loss here.

[00:04:13] Speaker 00:
You're saying there's no evidence of causation.

[00:04:17] Speaker 02:
Correct, that they were connected to this specific scheme.

[00:04:20] Speaker 02:
And I would note that with regard to Hill, York, Knutson and the Shonings, none were mentioned in any of the counts of the indictment, none appeared at trial, none provided... It doesn't matter that this is a scheme crime, so that if there was a scheme, which was found that there was, and they gave him money and they lost money,

[00:04:46] Speaker 03:
Do they individually have to have been defrauded?

[00:04:50] Speaker 02:
Well, yes, they have to be connected to the scheme in some way.

[00:04:53] Speaker 03:
Well, they're connected to the scheme.

[00:04:54] Speaker 03:
They gave them money and they didn't get it back.

[00:04:58] Speaker 03:
The question is, do they each individually have to be defrauded?

[00:05:02] Speaker 02:
Well, I'm not sure I agree with the idea that because they alleged that they sent money to Mr. Graham and didn't get it back, that they were necessary.

[00:05:12] Speaker 03:
And we know he had a scheme to do that because that's what was the finding, to do that by defrauding people.

[00:05:17] Speaker 03:
So the question is, do they individually have to assert that they were defrauded?

[00:05:23] Speaker 02:
Maybe I should answer it this way.

[00:05:25] Speaker 02:
Let's suppose that some of them, all of them, perhaps sent money to Mr. Graham for reasons having nothing to do with this.

[00:05:32] Speaker 02:
This other stuff that led to the convictions.

[00:05:36] Speaker 03:
It's not a fair inference that it had to do with this.

[00:05:38] Speaker 03:
It was part of the same scheme.

[00:05:42] Speaker 02:
Again, I'm not sure I agree based upon the actual record here.

[00:05:47] Speaker 00:
Do you think there's a tracing requirement of some sort?

[00:05:50] Speaker 00:
As I understand the big picture in this case, the argument was took money from clients and didn't put it into investments, but rather into his own account.

[00:06:02] Speaker 00:
And he was convicted of doing that.

[00:06:06] Speaker 00:
Sometimes it was mail fraud, sometimes it was wire fraud.

[00:06:08] Speaker 00:
But that's the basic allegation of the case.

[00:06:12] Speaker 00:
And these people are clients who said, I sent you money and it's not in my account.

[00:06:17] Speaker 00:
I didn't get it back.

[00:06:19] Speaker 00:
And so are they required to show it was his money, each of their individual money that was put into his StratX account, or are they only required to show that I sent him money and it's not in my account anymore?

[00:06:33] Speaker 02:
I think they have to at a minimum show that they sent money to the StratX account.

[00:06:40] Speaker 02:
It arrived there.

[00:06:41] Speaker 02:
Uh, and they did it for a particular reason.

[00:06:44] Speaker 03:
And the reason the question they were asked is what kind of financial laws have you experienced as a result of this crime?

[00:06:52] Speaker 03:
Right.

[00:06:52] Speaker 03:
So the premise here is that.

[00:06:54] Speaker 03:
whatever they're telling him is because of the crime and the crime is this scheme.

[00:06:59] Speaker 03:
Would the victim impact statements?

[00:07:01] Speaker 03:
We have statements.

[00:07:03] Speaker 03:
We don't have whatever was sent.

[00:07:04] Speaker 03:
If there was a cover letter of some kind that said that this person was convicted of X crime.

[00:07:09] Speaker 02:
I don't, it's good question.

[00:07:11] Speaker 02:
I don't know what they were told.

[00:07:12] Speaker 02:
And so I don't know what they mean or how they, uh,

[00:07:18] Speaker 02:
purported to answer to that question when the question contains the word crime.

[00:07:24] Speaker 02:
I don't know what they understood about the case.

[00:07:26] Speaker 03:
Again, these people were not, other than there being records that they wired or- For example, Mr. Knudsen and his wife say, I gave Michael crime $20,000 to invest in his automated currency trading program, which is the Scape, right?

[00:07:43] Speaker 03:
And I have no documentation.

[00:07:46] Speaker 03:
received zero return or any initial $20,000.

[00:07:50] Speaker 03:
So he specifically says what he invested in and that he didn't get it back.

[00:07:55] Speaker 03:
Why isn't that good enough as a result of this crime?

[00:07:58] Speaker 02:
Well, that's probably the most complete example that we could find among the statements that came back.

[00:08:08] Speaker 02:
The other ones were not nearly as complete as that.

[00:08:11] Speaker 00:
Well, but York says

[00:08:13] Speaker 00:
I invested with Graham and was promised great returns in the Forex market.

[00:08:19] Speaker 02:
But invested in what?

[00:08:21] Speaker 01:
Why does any of that matter if they're claiming that they're victims of, again, a scheme?

[00:08:27] Speaker 01:
That's quite broad.

[00:08:28] Speaker 01:
This isn't your sufficiency challenge where there's a bare traceability requirement.

[00:08:35] Speaker 01:
This is simply, we're reviewing for clear error whether

[00:08:39] Speaker 01:
for restitution, the district court could find by preponderance of evidence.

[00:08:45] Speaker 01:
What evidence is there on the other side that it's not part of the scheme?

[00:08:47] Speaker 01:
Why aren't these bearer-victim impact statements under oath enough?

[00:08:53] Speaker 02:
Well, they have to at least present a prima facie connection to a particular, a specific scheme, not the scheme alleged in the indictment, not a scheme.

[00:09:03] Speaker 03:
This crime.

[00:09:04] Speaker 02:
There could have been four.

[00:09:05] Speaker 03:
As a result of this crime.

[00:09:07] Speaker 02:
Pardon me?

[00:09:08] Speaker 03:
was as a result of this crime.

[00:09:09] Speaker 02:
Right.

[00:09:10] Speaker 02:
But we don't know what the victims are are telling us when they say that.

[00:09:13] Speaker 02:
That's a boilerplate.

[00:09:14] Speaker 02:
That's a boilerplate questionnaire.

[00:09:17] Speaker 01:
What more would they why don't we ask what more would they have had to have said given that there's this doesn't even need to be um

[00:09:27] Speaker 01:
charged conduct.

[00:09:28] Speaker 01:
So what more did they need to say to suffice?

[00:09:31] Speaker 02:
I think they could have been coached a little bit, first of all, not to make stuff up, but to say the things they needed to say to connect the money they sent to this particular alleged scheme.

[00:09:45] Speaker 02:
that led to convictions.

[00:09:48] Speaker 02:
What they probably should have said is I sent money, this was the agreement, and these are the facts upon which I base my opinion that there was fraud.

[00:10:02] Speaker 02:
They didn't do any of that.

[00:10:03] Speaker 01:
But that would require them to establish the elements of an offense.

[00:10:13] Speaker 01:
That's the first part of the statute, but then the statute goes on to say that if you're dealing with a scheme such as this, you simply have to show direct harm.

[00:10:23] Speaker 02:
But you have to show a nexus, though.

[00:10:25] Speaker 02:
You have to show connection between the money going out and connection to the actual alleged scheme and the indictment, and that just didn't happen here.

[00:10:35] Speaker 02:
One of the individuals got close, but we don't know that it was the same

[00:10:43] Speaker 02:
operation, the same alleged scheme as the one alleged in the indictment.

[00:10:48] Speaker 01:
Do you want to take some time on any of the other issues?

[00:10:51] Speaker 02:
Well, real quickly, the insufficiency of evidence claim.

[00:10:57] Speaker 03:
It was just sort of the same issue on a different guise, but go ahead.

[00:11:02] Speaker 02:
Yeah, with respect to counts 2, 5, 6, 9, 10, 14, 15, 18, 19, and 20,

[00:11:09] Speaker 02:
all of which involve monies going out to Cecilia Cordova, Valenzuela.

[00:11:16] Speaker 02:
Our argument here is that there could only have been a finding of guilt by the jury, guilt beyond a reasonable doubt, if we know that Marc Jacobs, Christopher York, Dan Hill, Kenneth and Emily Ward, Harrison Andrews and David Erickson were investors, were real investors.

[00:11:40] Speaker 02:
The only proof that the government introduced a trial that they were true investors in this alleged- Well, wait a minute.

[00:11:48] Speaker 03:
The counts are about particular wire transfers from a fund, and they don't relate to any particular investor.

[00:11:58] Speaker 02:
Is that- No, no.

[00:11:59] Speaker 02:
The counts don't relate to that, but- Okay, so just a minute.

[00:12:06] Speaker 03:
Yeah.

[00:12:09] Speaker 03:
a potential portion of the money in this fund, maybe 50 percent, I think was said at one point, at least that.

[00:12:15] Speaker 03:
Let's assume it's 50 percent.

[00:12:18] Speaker 03:
One from the investors as to which there was evidence.

[00:12:23] Speaker 02:
There was evidence, yes.

[00:12:24] Speaker 02:
There was money coming into StratX.

[00:12:28] Speaker 03:
From investors as to which we have evidence that they were defrauded.

[00:12:32] Speaker 02:
Right.

[00:12:33] Speaker 02:
proven to be investors, some of whom we argue were not.

[00:12:39] Speaker 03:
So let's say it's 50 percent.

[00:12:42] Speaker 03:
I don't know if it's 50 percent, but it was a lot, a good portion of this Stratix fund and our account.

[00:12:52] Speaker 03:
And suppose, there was some testimony about how you would figure this out.

[00:12:57] Speaker 03:
And at least one of them, it seems to me, is for each dollar that then comes out to the personal account, say 50 cents of it is from the investors, that we know are investors.

[00:13:15] Speaker 03:
So why isn't that good enough?

[00:13:17] Speaker 03:
In other words, a pro-rata approach to it.

[00:13:21] Speaker 03:
Forget about the other investors.

[00:13:23] Speaker 02:
Well, our argument is, first of all, you shouldn't use a pro-rata approach.

[00:13:29] Speaker 02:
You should use a pooling approach.

[00:13:30] Speaker 03:
Well, I know.

[00:13:30] Speaker ?:
Why?

[00:13:31] Speaker 02:
Pardon me?

[00:13:32] Speaker 03:
Why is that required?

[00:13:34] Speaker 03:
Again, this is a scheme crime, right?

[00:13:37] Speaker 02:
Because money is fungible.

[00:13:38] Speaker 03:
Exactly.

[00:13:39] Speaker 03:
Because money is fungible, you can't trace it.

[00:13:42] Speaker 03:
And because you can't trace the money from one investor to go out at the other end, so you have to have some other way to figure out whether the money that's coming out is money that was fraudulently obtained.

[00:13:58] Speaker 02:
Right, and that's the challenge for the government in a case like this.

[00:14:01] Speaker 02:
It's their burden to establish that the money had to have been... All of it?

[00:14:07] Speaker 03:
Or, I mean, every penny of it?

[00:14:10] Speaker 03:
Or, you know, 50 cents on the dollar?

[00:14:13] Speaker 02:
Well, let me, if I may, explain it this way.

[00:14:16] Speaker 02:
With respect to Jacob's York Hill Ward, Andrews and Erickson, who we claim were not proven to be investors in this case, the money they put in during the same time frame of the counts I just read off, the money that they put in was about $261,000.

[00:14:33] Speaker 02:
That exceeded the amount of money that went out to Cecilia Cordova during that same time period.

[00:14:40] Speaker 02:
If you use the pooling theory as the defense expert, Hogan suggested we use, it leaves the possibility that all of the money that went out to Cecilia Cordova was funded by people who were not determined to be investors in this case.

[00:15:00] Speaker 02:
And if that's so, no juror could conclude beyond a reasonable doubt that those monies were part of that fraud.

[00:15:10] Speaker 02:
Whether there was fraud in other ways with other victims, okay.

[00:15:16] Speaker 03:
What about, we have a case, Lazarenko, which seems to say that you don't need to do that.

[00:15:26] Speaker 03:
You want to comment on that?

[00:15:27] Speaker 03:
What Lazarenko says is that

[00:15:40] Speaker 01:
I think it rejects any tracing requirement.

[00:15:43] Speaker 01:
And what's your best authority for requiring that the jury could not depend on the government's theory of the scheme rather than yours?

[00:15:54] Speaker 02:
Right.

[00:15:54] Speaker 02:
I haven't read the case that we're looking for right now.

[00:15:59] Speaker 03:
In such a case as this, where the wire at issue is a wire transfer of funds that are connected to an unlawful activity, the furtherance inquiry may be met without a strict tracing of the wired funds.

[00:16:12] Speaker 02:
I would have to read the case, read the context.

[00:16:14] Speaker 03:
Well, I mean, that's your job as a lawyer is to read it before you come in here, not afterwards.

[00:16:18] Speaker 02:
Right, right.

[00:16:19] Speaker 02:
Well, I can't respond specifically because I'm not sure whether the facts in that case could be transferable to this case.

[00:16:27] Speaker 02:
I'm just saying that if monies come out from people who are investors and then another group of people who haven't been determined to be investors and they are pooled

[00:16:41] Speaker 02:
They become part of a large pool, potentially, including offshore monies, including personal accounts, where money is coming in and going back out to the offshore accounts, and so forth.

[00:16:55] Speaker 02:
And if it's possible that the monies that came in from non-investors was used to send out to personal accounts, then those accounts, the accounts involving those transfers,

[00:17:10] Speaker 02:
are not criminal.

[00:17:12] Speaker 02:
That's our position.

[00:17:14] Speaker 02:
That's our theory.

[00:17:15] Speaker 01:
Thank you, Mr. President.

[00:17:19] Speaker 01:
We'll give you a couple minutes for rebuttal, any other issues you want to address.

[00:17:23] Speaker 01:
Okay, thank you.

[00:17:27] Speaker 01:
Ms.

[00:17:27] Speaker 01:
Clapper.

[00:17:32] Speaker 04:
May it please the court, my name is Monica Clapper and I represent the United States.

[00:17:37] Speaker 04:
All of the district court's rulings in this case that have been challenged on appeal, and there are five, have ample support both in the record factually and legally and should be upheld by this court.

[00:17:53] Speaker 00:
Can I ask you to first address a topic that your friend didn't address?

[00:17:58] Speaker 00:
I'm interested in the guilty plea issue or the rejection of the guilty plea issue.

[00:18:07] Speaker 00:
The judge says, I won't accept this plea agreement because, and perfectly entitled to do that.

[00:18:15] Speaker 00:
He then goes on to say, I think it's he in this case.

[00:18:18] Speaker 00:
Yeah, it is.

[00:18:19] Speaker 00:
He then goes on to say, but here's, I would accept it if it didn't have a cap.

[00:18:25] Speaker 00:
And in general, judges are not supposed to say what would be acceptable to them, but rather simply to say what would not be acceptable to them.

[00:18:34] Speaker 04:
Well, and that's not precisely what happened here, Judge.

[00:18:38] Speaker 00:
Well, tell me what you think happened.

[00:18:41] Speaker 04:
Well, what happened is the judge said he was rejecting the plea agreement.

[00:18:46] Speaker 04:
He gave all of the reasons why, you know, in accordance with this court's

[00:18:51] Speaker 04:
prior case law requiring that.

[00:18:52] Speaker 00:
That's all fine.

[00:18:53] Speaker 00:
Nobody thinks there's a problem with that.

[00:18:55] Speaker 04:
And then he did what he's actually required to do under Rule 11C is give the defendant the opportunity to withdraw the guilty plea or to go forward with the guilty plea.

[00:19:07] Speaker 04:
And the language that is seized on appeal is actually the judge telling the defendant, if you wish to go forward with your plea of guilty,

[00:19:22] Speaker 04:
to mail fraud in violation of the statute, a Class C felony, without a stipulated cap, the court will accept the plea.

[00:19:30] Speaker 00:
Is that okay?

[00:19:31] Speaker 00:
See, it seems to me, however it occurs and whatsoever it's phrased with, in this case it's fairly close to the line, but isn't our law generally, you may tell somebody what agreement you would accept,

[00:19:47] Speaker 00:
but you would reject, and why you would reject it, but you may not tell him which one you would accept.

[00:19:55] Speaker 00:
And isn't that essentially what he was saying?

[00:19:57] Speaker 00:
Well, look, if you want to plead guilty to one count with no cap, I'm fine with that.

[00:20:04] Speaker 00:
Now, in this case, I must say it's less troublesome because it is the necessary inverse of what the judge actually said before.

[00:20:14] Speaker 00:
The only reason I'm rejecting your agreement is because it has a cap.

[00:20:17] Speaker 00:
So it seems to me quite clear as a matter of logic that he would have accepted one without a cap.

[00:20:23] Speaker 00:
But I'm trying to figure out where the line is on this.

[00:20:27] Speaker 00:
In other words, our cases in the past, and maybe with different facts, just sort of say, look, you can say why you're rejecting something, but you can't say what you would accept.

[00:20:38] Speaker 00:
And it seems to me the judge did say here what he would accept, which is a plea to one count with no cap.

[00:20:46] Speaker 04:
And in this particular case, I think Your Honor is correct, that that was just the, it was obvious at the court, the court specifically said that he was rejecting the plea agreement because of the cap.

[00:21:01] Speaker 00:
So let me ask you a hypothetical.

[00:21:03] Speaker 03:
The difference, it's very subtle, but he didn't say because of the cap, he said because of a cap.

[00:21:11] Speaker 03:
Right.

[00:21:12] Speaker 03:
possible implication was don't come back.

[00:21:15] Speaker 03:
If you want to try it, you may as well.

[00:21:19] Speaker 03:
Well, the only kind of agreement I would accept is one without any cap, not without this particular cap.

[00:21:28] Speaker 04:
Well, and that certainly is the argument that has been raised.

[00:21:31] Speaker 03:
I understand, and I'm wondering why, you know what, in context, was he saying the cap, even though it's written as a cap, or was he saying essentially you complete without the agreement, this particular agreement, or was he saying I'm not going to take any, what was he saying?

[00:21:50] Speaker 04:
Well, in the context of this exchange on the record, the court several times referred to this plea agreement.

[00:22:03] Speaker 04:
The court used the phrases, and I'll give them exactly.

[00:22:09] Speaker 04:
Um, you know, the cap in this case, um, the stipulated cap under this plea agreement that those are all other statements within the same, just two or three pages of the transcript, um, at 115 to 119, I guess that's four pages where the judge is talking about this.

[00:22:29] Speaker 00:
Let me be clear.

[00:22:31] Speaker 00:
I think that's fine.

[00:22:32] Speaker 00:
I think a judge can say, I'm not going to accept this cap.

[00:22:36] Speaker 00:
I'm not even a judge can say, by the way, I won't accept a plea agreement with any cap because I don't believe in caps.

[00:22:45] Speaker 00:
I'm not sure that he's entitled to, I'm not sure that a judge is required to accept a plea agreement with a stipulated sentence or a cap.

[00:22:54] Speaker 00:
But here he says, but I would accept one.

[00:23:00] Speaker 00:
I would accept your plea.

[00:23:01] Speaker 00:
This very plea agreement, this very plea is in front of me.

[00:23:04] Speaker 00:
You take out the cap, we're fine.

[00:23:06] Speaker 00:
I'll take it.

[00:23:07] Speaker 04:
The judge was referring to the guilty plea, not the plea agreement.

[00:23:11] Speaker 00:
What else was in the agreement other than the cap?

[00:23:14] Speaker 04:
There was another stipulation about

[00:23:20] Speaker 04:
agreeing to time served if certain conditions were met.

[00:23:24] Speaker 04:
I think the record is pretty clear that those conditions weren't going to be met.

[00:23:27] Speaker 00:
So you read what the judge is saying is, look, if you just want to plead guilty today to this one count.

[00:23:33] Speaker 00:
That's okay with me, but I'm not going to accept any, but I'm not, no other agreements if that happens.

[00:23:40] Speaker 00:
You just plead guilty to one count.

[00:23:41] Speaker 04:
And then, and that is borne out by the, what the judge says after that, your honor.

[00:23:47] Speaker 04:
And that is, I do have to warn you that if you go forward with your plea of guilty to mail fraud,

[00:23:54] Speaker 04:
I have the authority to sentence you all the way up to the statutory max.

[00:24:01] Speaker 04:
So all of that together, and it's just a normal course in proceedings where pleas are rejected.

[00:24:10] Speaker 04:
Um, the guilty plea, the question is, and, and the, the directive under rule 11 is what do you do with the guilty plea then?

[00:24:20] Speaker 04:
There's already been a guilty plea.

[00:24:22] Speaker 04:
It's already been accepted.

[00:24:23] Speaker 04:
The only question is, is the plea agreement going to be accepted?

[00:24:29] Speaker 03:
So the defendant either point that, um, the party, the parties have stipulated to a cap sentence.

[00:24:38] Speaker 03:
And that cap sentence binds the court.

[00:24:40] Speaker 03:
It results in this case in the over influence of the parties on this court sentencing discretion, which sounds like, which is sort of a piece with what he said later, which is you can plead without a cap.

[00:24:55] Speaker 03:
So it seems to be saying generically, if you go back and negotiate another agreement with the cap, I'm not going to take it.

[00:25:04] Speaker 03:
Is that a fair reading?

[00:25:05] Speaker 03:
I'm not sure.

[00:25:06] Speaker 04:
That it really isn't.

[00:25:08] Speaker 03:
I don't think I agree with Judge Hurwitz that if that's what he was saying, that's okay.

[00:25:12] Speaker 03:
I think that's precisely what's not okay.

[00:25:15] Speaker 03:
So why isn't that what he was saying?

[00:25:20] Speaker 04:
several points here.

[00:25:23] Speaker 04:
One is, in between the statements, Judge Berzogne, that you just recounted, the judge specifically says, I'm not interfering in plea negotiations.

[00:25:36] Speaker 04:
That's not my position.

[00:25:38] Speaker 04:
and then goes on to talk about the stipulated cap in this case, the guilty plea in this case, the 20-month stipulated cap.

[00:25:50] Speaker 04:
There is nothing in the evidence in the record to suggest, you know,

[00:25:55] Speaker 04:
that the use of the term a stipulated cap refers to all future plea agreements with stipulated caps that the judge would reject them.

[00:26:07] Speaker 04:
There's just nothing else in this record.

[00:26:11] Speaker 03:
I suppose we can pretty much guess, assume, that if they had come back with a stipulated cap of the sentence he in fact got, the judge would have said okay, i.e.

[00:26:21] Speaker 03:
the 70 months or whatever it was.

[00:26:24] Speaker 04:
And the judge may well have said OK to any other form of stipulation, of stipulated cap too.

[00:26:32] Speaker 04:
One lower than what he got, one higher than what he got.

[00:26:34] Speaker 03:
What he got was it was an under-guideline sentence, is that right?

[00:26:37] Speaker 04:
72 months, yes.

[00:26:39] Speaker 00:
So I take it what you're saying here is he already pleaded guilty.

[00:26:45] Speaker 00:
Now the question was whether the judge was going to approve the plea agreement.

[00:26:48] Speaker 04:
Yes.

[00:26:49] Speaker 00:
The judge said, I'm not going to, because it has a cap.

[00:26:55] Speaker 00:
He says, if you want to keep your plea of guilty, you have no cap, because I haven't agreed to the plea agreement.

[00:27:02] Speaker 00:
And you should know that if you want to keep your plea of guilty.

[00:27:06] Speaker 00:
And then Mr. Graham, through counsel, says, I don't want to plead guilty.

[00:27:10] Speaker 00:
I want to go to trial.

[00:27:12] Speaker 00:
That's how you see this happening.

[00:27:14] Speaker 04:
Yes.

[00:27:14] Speaker 04:
And that is precisely what Rule 11 requires.

[00:27:17] Speaker 00:
So he wasn't saying, you don't think he was saying, I would accept an agreement, a different agreement, without a cap?

[00:27:23] Speaker 04:
Well, he specifically was referred to the guilty plea as opposed to a plea agreement.

[00:27:32] Speaker 04:
And there's a very big difference between the two.

[00:27:37] Speaker 04:
And particularly in a change of plea proceeding and a sentencing proceeding that is based on a plea agreement, the language is very important.

[00:27:47] Speaker 04:
The difference is very important.

[00:27:50] Speaker 04:
And certainly, Your Honors,

[00:27:53] Speaker 00:
Um, I see you say if you wish to go forward with your plea, he's saying no agreement here.

[00:27:59] Speaker 00:
Well, I've just already turned it down.

[00:28:01] Speaker 00:
You've already pleaded guilty to discount if you want to continue to go forward with that plea of guilty.

[00:28:08] Speaker 00:
Um, that's fine with me, but you'll, the court will accept it, but absolutely.

[00:28:13] Speaker 00:
But you won't, but there is no agreement.

[00:28:15] Speaker 00:
There is no stipulation.

[00:28:17] Speaker 04:
I got you.

[00:28:17] Speaker 04:
Right.

[00:28:17] Speaker 04:
There's no stipulation.

[00:28:19] Speaker 03:
And then not just as no stipulation, there's no agreement.

[00:28:23] Speaker 04:
Right.

[00:28:23] Speaker 04:
There's no agreement.

[00:28:24] Speaker 03:
And then you want to come in briefly on this, um, the restitution issue that he did spend time on combined with the tracing question on the counts because they're somewhat related.

[00:28:37] Speaker 04:
Sure.

[00:28:38] Speaker 04:
So on the restitution issue, that one, you know, the court is reviewing for clear error because these are factual findings that the court is looking at.

[00:28:54] Speaker 04:
And the burden of proof for the government was just a preponderance of the evidence, very different than beyond a reasonable doubt.

[00:29:03] Speaker 03:
Can we know whether these documents, I mean it talks about this crime where these victims told what this crime was?

[00:29:13] Speaker 04:
There is nothing in the evidence to show what the cover letter to the victims says.

[00:29:23] Speaker 04:
Either a cover letter or maybe the face of an email if it's sent to them that way.

[00:29:28] Speaker 04:
Though that did not appear in the evidence.

[00:29:31] Speaker 04:
But Judge Brizon, I think you really were onto it with the victim impact statements did actually have attachments to them.

[00:29:47] Speaker 04:
And for much of them, I was starring them as we were talking.

[00:29:54] Speaker 04:
Of course, Sue Ireland, she testified at trial about the misstatements made to her, the material misrepresentations made to her, and the money she gave as a result.

[00:30:06] Speaker 03:
Dan Sherman, he submitted fake- We have an clue, by the way, as to why she was acquitted, that he was acquitted on that count.

[00:30:14] Speaker 03:
This is because

[00:30:15] Speaker 03:
She really seemed to be relying on this other person primarily and not on Michael Graham.

[00:30:22] Speaker 03:
Well, that was the entire- It's somewhat relevant to how her evidence ties into the restitution.

[00:30:30] Speaker 04:
And that was the beginning to the end of the cross-examination of her was really on that particular topic, that third party intermediary

[00:30:41] Speaker 04:
and kind of trying to point the finger to that person.

[00:30:46] Speaker 03:
So the judge could have relied on her testimony and taken a different view of it for purposes of the preponderance of the evidence as to whether she sufficiently relied on Michael Grant.

[00:30:54] Speaker 04:
Absolutely.

[00:30:55] Speaker 04:
And the judge specified right on the record why he was including her and that he was taking that approach.

[00:31:06] Speaker 04:
He was, you know, he found sufficient her statements about the material misrepresentations and why she sent the money, et cetera.

[00:31:15] Speaker 03:
Made by Mr. Graham, not by somebody else.

[00:31:18] Speaker 04:
Right.

[00:31:19] Speaker 04:
And Dan Sherman, in particular, these are just examples.

[00:31:25] Speaker 04:
He submitted the very same fake account statements that some of the other victims talked about in his victim impact statement.

[00:31:37] Speaker 04:
Bruce Knudsen, I think, was another one who was very specific about the statements that were made to him and who they were made by.

[00:31:48] Speaker 04:
And then Dan Hill,

[00:31:49] Speaker 04:
um, had the, the 302, um, from the, his, his interview with the FBI.

[00:31:57] Speaker 03:
Now, this was a... The objection, as I think was clarified in the, um, uh, argument was, is not to the amount, it's to whether there's specific, um, these individuals who are specifically, um, injured by this, by these, by the scheme or by the crime.

[00:32:19] Speaker 04:
Sure, the causation.

[00:32:21] Speaker 04:
And I think that that is what all of the evidence I just recounted goes to is the causation, the connection between these victims and the crime.

[00:32:30] Speaker 04:
But this was all far and above what the judge needed to make his ruling.

[00:32:36] Speaker 01:
Ms.

[00:32:36] Speaker 01:
Klaver, on this, then what work does the word directly do in the statute?

[00:32:43] Speaker 01:
Any person directly harmed by that?

[00:32:47] Speaker 01:
in some of these cases, particularly in the case of Ms.

[00:32:51] Speaker 01:
Ireland, who is that not indirect and why not?

[00:32:59] Speaker 04:
Um, I, I see them.

[00:33:00] Speaker 01:
Yeah, you can, you can take time.

[00:33:02] Speaker 01:
Okay.

[00:33:02] Speaker 01:
Right.

[00:33:02] Speaker 04:
And this is on the restitution piece.

[00:33:04] Speaker 04:
That's not what the direct goes to.

[00:33:06] Speaker 04:
Okay.

[00:33:07] Speaker 04:
Um, certainly the statements can come to the miss, the material misstatements can come to a victim indirectly.

[00:33:14] Speaker 04:
The harm being direct is, um, is, is different that the victim was included, um, in the group of people who are part of the scheme, who are directly harmed by the defendants.

[00:33:27] Speaker 04:
conduct in that they provide the money and the defendant misappropriates it.

[00:33:35] Speaker 04:
That's the direct harm.

[00:33:37] Speaker 01:
Okay.

[00:33:39] Speaker 01:
There are no other questions.

[00:33:40] Speaker 01:
We'll let you close.

[00:33:43] Speaker 04:
Well, thank you.

[00:33:44] Speaker 04:
We do request that the court affirm the district court on all of the rulings that are at issue on appeal.

[00:33:52] Speaker 01:
Thank you, Ms.

[00:33:52] Speaker 01:
Clifford.

[00:33:54] Speaker 01:
Mr. President, we'll give you two minutes.

[00:33:59] Speaker 02:
I'll be brief.

[00:34:01] Speaker 02:
Just a couple of things, if I may.

[00:34:05] Speaker 02:
With respect to the guilty plea, I think the fact that Mr. Graham immediately asked the case be set for trial tells us that he interpreted the court's rejection of a guilty plea with a cap.

[00:34:25] Speaker 02:
That's the way I would characterize it.

[00:34:30] Speaker 02:
took away really any incentive to continue.

[00:34:34] Speaker 00:
Um, well, but here's, here's my, even if I thought there was a violation of rule 11 here, I'm not clear what we could do.

[00:34:43] Speaker 00:
Um, the government's plea offer was obviously conditioned on, you're not going to trial.

[00:34:51] Speaker 00:
You went to trial.

[00:34:52] Speaker 00:
Um, we may or may not affirm the result at trial, but just assume for purposes of discussion that we find that there was no reversible error at trial.

[00:35:01] Speaker 00:
What are we supposed to do at this point?

[00:35:03] Speaker 00:
We can't order the government to negotiate with you.

[00:35:06] Speaker 00:
It's not like they broke the plea agreement.

[00:35:09] Speaker 00:
So, I mean, the government says you should have raised this earlier.

[00:35:12] Speaker 00:
I don't know whether that's true or not, but I'm trying to figure out what possible remedy we could give you, even if we agreed with you.

[00:35:20] Speaker 02:
Well, it is interesting because normally you see this the other way around.

[00:35:25] Speaker 02:
Person waves a trial and pleads guilty, and now they want to get out of the conviction.

[00:35:31] Speaker 00:
That I understand.

[00:35:33] Speaker 00:
But I don't understand what we're supposed to do for you in this situation.

[00:35:37] Speaker 02:
Well, I think he has a due process entitlement to negotiate.

[00:35:44] Speaker 02:
But you're right, the remedy does become a little bit fuzzy.

[00:35:49] Speaker 02:
If I'm asking the court to order the

[00:35:52] Speaker 00:
We can't order the government to negotiate.

[00:35:55] Speaker 00:
They've got no obligation to negotiate.

[00:35:57] Speaker 00:
I'm not going to ask Ms.

[00:35:58] Speaker 00:
Clapper, but my guess is if we see it, she'd say no.

[00:36:03] Speaker 00:
That was a deal conditioned on not going to trial.

[00:36:06] Speaker 00:
So I'm just not sure.

[00:36:08] Speaker 00:
That's why the mandamus thing makes some sense, because we can intervene at a point when a remedy still can be given.

[00:36:14] Speaker 00:
I'm not sure it's a requirement, but I'm just not clear what remedy we can give you, even if we agree with you.

[00:36:20] Speaker 02:
Well, if there's no other remedy, then, uh, uh, the conviction be, uh, vacated, uh, even if we thought you got, even if we thought Mr. Graham got a fair trial.

[00:36:32] Speaker 02:
Yes.

[00:36:33] Speaker 02:
Yes.

[00:36:34] Speaker 02:
Uh, it's, it's, it's difficult, but yes, I, I don't, I don't see any other remedy.

[00:36:40] Speaker 02:
I agree.

[00:36:41] Speaker 03:
The premise of the mandamus cases has to be, and I think was that there's no, essentially no remedy available later.

[00:36:49] Speaker 03:
That's usually why we grant mandamus.

[00:36:52] Speaker 03:
Kyle was a mandamus case, right?

[00:36:55] Speaker 03:
Well, I believe it was.

[00:36:57] Speaker 03:
No, maybe it wasn't.

[00:36:58] Speaker 03:
I'm not sure it was.

[00:37:00] Speaker 02:
I would say this mandamus, I don't think it's required.

[00:37:04] Speaker 02:
It was an appeal.

[00:37:05] Speaker 03:
So why isn't Kyle in this posture?

[00:37:07] Speaker 03:
Why wasn't Kyle in this posture?

[00:37:10] Speaker 03:
Why?

[00:37:10] Speaker 03:
I'm sorry.

[00:37:11] Speaker 00:
Wasn't Kyle in this posture?

[00:37:14] Speaker 00:
Kyle had a, Kyle was an, there was an acceptance of a later plea agreement.

[00:37:18] Speaker 00:
Okay.

[00:37:19] Speaker 00:
So we could say we throw out the second plea agreement because the judge nudged you into it and go back and you can either try the case or not try it.

[00:37:30] Speaker 00:
But here,

[00:37:31] Speaker 00:
It may be that the only time to, once you go to trial and if you lose and we find no error at trial, it may be that we can't fix a rule 11 problem at this point.

[00:37:43] Speaker 02:
And all I can say, you may be right, your honor, all I can say is that if my client was denied the due process right to negotiate

[00:37:56] Speaker 02:
And felt that he was forced into going to trial.

[00:38:00] Speaker 02:
He was deprived of an option that he shouldn't have been deprived of.

[00:38:03] Speaker 02:
And there must be some remedy, and I can think of no other remedy than simply setting aside the conviction.

[00:38:11] Speaker 00:
I can't think of one either.

[00:38:12] Speaker 00:
That's why I was asking.

[00:38:15] Speaker 02:
Yeah.

[00:38:16] Speaker 02:
With respect to Ireland and her connection for restitution purposes, Graham made no representations to Ireland before she invested, probably one of the reasons he was found not guilty on that account.

[00:38:30] Speaker 03:
And we argue that any post-investment statements by Graham... But she did speak to him fairly frequently, as I recall, later on.

[00:38:39] Speaker 02:
But not before she invested.

[00:38:41] Speaker 03:
Yes, but when she tried to get her money back and so on.

[00:38:45] Speaker 02:
There were some communications.

[00:38:47] Speaker 02:
I think many, actually.

[00:38:50] Speaker 02:
Asking for the money back.

[00:38:51] Speaker 03:
And getting reassured by him and so on.

[00:38:54] Speaker 03:
So she was communicating with him.

[00:38:59] Speaker 02:
Right, but that doesn't prove the elements of fraud.

[00:39:02] Speaker 02:
It's problematic.

[00:39:04] Speaker 02:
It's bad business at the very least.

[00:39:06] Speaker 03:
Well, why isn't the fact that she left the money there

[00:39:08] Speaker 03:
you know, and didn't try to get it back for quite a while while she was getting the two or $3,000 a month.

[00:39:15] Speaker 03:
Um, and at the time she tried to get it back, she didn't get it back and he kept telling her stories that weren't true.

[00:39:21] Speaker 03:
Um, I mean, that seems enough for preponderance of the evidence.

[00:39:24] Speaker 03:
I mean, you can understand where the acquittal came from.

[00:39:28] Speaker 03:
Um, but that doesn't mean that there wasn't evidence of sufficient evidence of Graham's connection to all of this.

[00:39:35] Speaker 02:
Well,

[00:39:36] Speaker 02:
I'm not in a position to concede that the statements that he made to her afterwards were not true.

[00:39:42] Speaker 02:
I can't concede that point.

[00:39:47] Speaker 02:
I understand the Court's question and concern.

[00:39:50] Speaker 02:
Our position is that all of the post-investment statements made by Mr. Graham to Ms.

[00:39:55] Speaker 02:
Ireland were either accurate or they weren't material to her decision to get in and stay in.

[00:40:01] Speaker 02:
In her, along the way, I think she alleged that he made representations about how he would use her $250,000 investment, that he would only invest the profits and preserve the corpus.

[00:40:18] Speaker 02:
But I think that was mischaracterized by the government.

[00:40:23] Speaker 02:
He would have had to use some of the corpus to get some of the profits going to begin with.

[00:40:28] Speaker 02:
And if there weren't any profits initially, he would have dug deeper into the corpus or the principle, I guess you might say.

[00:40:37] Speaker 02:
to try to begin generating profits that he could then churn and would allow him to return the principal.

[00:40:46] Speaker 01:
Thank you, Mr. President, unless you have anything else.

[00:40:48] Speaker 01:
No, thank you.

[00:40:50] Speaker 01:
Thanks to counsel.

[00:40:51] Speaker 01:
The case will be submitted.