[00:00:00] Speaker 04:
Good morning, Your Honors.

[00:00:01] Speaker 04:
May it please the Court.

[00:00:02] Speaker 04:
Lisette Pino on behalf of Mr. Anderson.

[00:00:05] Speaker 04:
I would like to reserve five minutes for rebuttal, and I'll keep track of my time.

[00:00:10] Speaker 04:
At sentencing, the District Court committed two legal errors that not only impacted its assessment of the 355 3A factors, but also increased the loss amount and the restitution award by $2 million.

[00:00:24] Speaker 04:
First, the District Court adopted an incorrect fraud by omission theory.

[00:00:29] Speaker 04:
It held Mr. Anderson had a duty to affirmatively disclose the financials of his privately held company to prospective investors.

[00:00:38] Speaker 04:
Now that ruling is so wrong, the government does not even defend it on appeal.

[00:00:42] Speaker 04:
And for good reason, this court's decision in Shields is very clear that a duty to disclose cannot exist in the absence of a fiduciary or special trust relationship between the parties.

[00:00:54] Speaker 04:
And here, under California law, Mr. Anderson did not owe any such duty to prospective investors.

[00:01:01] Speaker 04:
The second error is that the district court failed to resolve Mr. Anderson's factual objections to the loss amount in violation of Rule 32, which independently warrants a remand for resentencing.

[00:01:13] Speaker 04:
But I'd like to start with the fraud by omission argument, because the district court's loss amount finding really was predicated on that error.

[00:01:22] Speaker 04:
The District Court calculated loss by assuming that every investment after the scheme began was fraudulent.

[00:01:29] Speaker 04:
But it was difficult in this case to determine the exact date on which the scheme began, because everyone, including the government, conceded that MBIE had operated lawfully for a time.

[00:01:40] Speaker 04:
So to pick that date, the District Court theorized that

[00:01:46] Speaker 04:
It should look to the first clear instance of fraud.

[00:01:49] Speaker 04:
And that was a September 2011 email that Mr. Anderson sent to an investor named Clark Colvis.

[00:01:54] Speaker 00:
This is the one that starts.

[00:01:56] Speaker 00:
As discussed, we are all very, very excited about the YouTube Google deal.

[00:02:01] Speaker 00:
We have worked very hard for this.

[00:02:03] Speaker 04:
Yes, Your Honor, which we concede was a misrepresentation.

[00:02:06] Speaker 04:
But the error the district court committed is it assumed that everyone who invested after that date

[00:02:13] Speaker 04:
had a right to know that Mr. Anderson had sent that email and received $300,000 fraudulently.

[00:02:20] Speaker 04:
And that's just not correct under shields.

[00:02:24] Speaker 04:
There has to be a finding of a special relationship.

[00:02:28] Speaker 04:
A pure omission without such a relationship is not enough.

[00:02:34] Speaker 04:
And here, the real problem is that while Mr. Anderson did have a relationship with some investors, many prospective investors, there's actually no evidence he knew them before they invested at all.

[00:02:48] Speaker 04:
So there's not much of a factual basis to support the finding, even if an informal trust relationship, which Shields recognizes is permissible.

[00:02:58] Speaker 04:
So to give the court just one example, Philip Buchanan,

[00:03:01] Speaker 04:
I believe, invested in November 2011, two months after this email.

[00:03:07] Speaker 04:
There's nothing in the record that explains how this person knew Mr. Anderson.

[00:03:11] Speaker 04:
He's not mentioned in the PSR.

[00:03:13] Speaker 04:
There's no victim impact statement.

[00:03:15] Speaker 04:
There's no FBI interview record.

[00:03:17] Speaker 04:
And so from that there's really nothing that can support a trust relationship finding.

[00:03:23] Speaker 02:
Let me ask you this Council and this relates to the rule 32 issue as well.

[00:03:29] Speaker 02:
Would this have made any difference in the sentencing imposed in this case?

[00:03:34] Speaker 02:
The court really kind of focused on rather than the actual numbers and determining the sentence which you're

[00:03:40] Speaker 02:
you're raising as part of this appeal, that the range is more important than the actual number.

[00:03:45] Speaker 02:
So even if we reduce it by, you know, 1.5 or $2 million, he's still in the same sentencing range, is that right?

[00:03:54] Speaker 04:
Yes.

[00:03:54] Speaker 02:
And the court stayed within the range in imposing the 88-month sentence?

[00:03:59] Speaker 02:
Yes, Your Honor.

[00:04:00] Speaker 04:
And so that's why we're not raising a strict procedural guidelines error argument.

[00:04:05] Speaker 04:
We're rather arguing that

[00:04:07] Speaker 04:
These errors ultimately impacted the district court's consideration of the 355 3A factors.

[00:04:14] Speaker 04:
And so what the court referenced when the district court said, I don't need to calculate the loss amount with precision, that's at the part of the record where the district court was arriving at its guidelines calculation.

[00:04:26] Speaker 04:
But it then goes on to consider the 355 3A factors.

[00:04:30] Speaker 04:
I think this is around ER 182.

[00:04:34] Speaker 04:
But it goes on to consider the 355.3a factors, and it talks about the length of time the offense went on and the number of victims, both of which were impacted by this error.

[00:04:47] Speaker 04:
Because since the date on which the scheme began was moved up, seven more victims were counted, and the length of the offense increased by over a year.

[00:04:58] Speaker 00:
Although, counsel, when I look at the district court's

[00:05:02] Speaker 00:
overall remarks of sentencing.

[00:05:04] Speaker 00:
And I'm looking for, excuse me, right now, for example, at ER 245 and 246.

[00:05:11] Speaker 00:
When we look at the offense, we see an egregious offense that was inflicted on multiple victims over an extended course of time.

[00:05:22] Speaker 00:
It's quite sophisticated.

[00:05:24] Speaker 00:
It's not just sophisticated, but its deliberateness, its calculatedness, and its extension of time.

[00:05:30] Speaker 00:
This wasn't a one-time deal.

[00:05:31] Speaker 00:
or a moment sort of reflection or misjudgment, but an extended scheme to defraud multiple people over multiple years.

[00:05:41] Speaker 00:
People have lost their life savings.

[00:05:43] Speaker 00:
It has wreaked a great amount of hardship.

[00:05:46] Speaker 00:
I mean, it seems to me that the court was looking at the facts here at a high level as exemplified in what I just read.

[00:05:56] Speaker 00:
So it's hard for me to see sort of echoing

[00:06:00] Speaker 00:
Judge Nguyen's question that even if theoretically you might be right, I'm not saying you are, that that really had an impact given where the district court was.

[00:06:09] Speaker 00:
Why is my view of that wrong?

[00:06:12] Speaker 04:
Well, Your Honor, two points.

[00:06:13] Speaker 04:
First, the district court did recognize some mitigating circumstances in this case, one of them being right after what Your Honor read at ER 246, that this is a case where the money was not just used for self-aggrandizement, and in fact, the bulk of the money received for investors

[00:06:30] Speaker 04:
went back into the company in an effort to save it.

[00:06:33] Speaker 04:
And because of that, the district court did seriously consider the downward variance that probation had recommended to a term of 42 months.

[00:06:42] Speaker 02:
My second point is that... But I think that point...

[00:06:47] Speaker 02:
undercuts your argument, because what it does show is the district court really thoroughly considered the nature of the offense, the mitigating circumstances that were raised and argued, as well as the aggravating factors, and did a pretty thorough analysis.

[00:07:04] Speaker 02:
I'm not going to repeat all of that, including what Judge Bennett read, but it was a very thoughtful, thorough consideration of the 3553A factors.

[00:07:15] Speaker 02:
you know, as it's reflective of a case of this magnitude, a pretty thorough sentencing hearing.

[00:07:21] Speaker 02:
And so...

[00:07:23] Speaker 02:
That sort of wholesome, holistic evaluation coupled with the district court's clear view that it's the resulting offense level adjustment.

[00:07:32] Speaker 02:
It's more important than the precise number sort of shows.

[00:07:36] Speaker 02:
It's not $2 million loss wouldn't have really made the difference.

[00:07:39] Speaker 02:
It's the pattern of deceit and conduct and the number of victims and the other circumstances that really drove the sentencing.

[00:07:46] Speaker 04:
Yes, your honor.

[00:07:48] Speaker 04:
What I think I'm trying to say is not that this is not a case where the legal error the district court committed resulted in a new aggravating fact.

[00:07:58] Speaker 04:
It just made the facts more aggravating.

[00:08:01] Speaker 04:
It meant that there were 30 victims instead of 23.

[00:08:03] Speaker 04:
That the offense went on for seven years rather than six.

[00:08:08] Speaker 04:
It meant that in an $8 million case,

[00:08:12] Speaker 04:
two million dollars were added wrongfully.

[00:08:15] Speaker 04:
So the offense level, so the amount increased from six to eight million.

[00:08:20] Speaker 04:
And this is my second point.

[00:08:22] Speaker 04:
The premise of the fraud guidelines is that it matters how much loss the defendant costs.

[00:08:28] Speaker 04:
That's relevant to his culpability.

[00:08:30] Speaker 02:
Sure, and sometimes that argument works on sentencing.

[00:08:33] Speaker 02:
Certainly, and sure you've seen, we have on multiple occasions remanded for resentencing.

[00:08:39] Speaker 02:
where the error over inflation of loss, for example, may have driven the considerations in sentencing or we can't tell one way or the other because you're starting at a point that may have been erroneous.

[00:08:53] Speaker 02:
I'm not sure if there was error because we're still reviewing it for clear error in this case.

[00:08:58] Speaker 02:
But even assuming error, sometimes we do send it back for that.

[00:09:03] Speaker 02:
I'm having a hard time adopting your argument under the factual circumstances of this particular case.

[00:09:09] Speaker 02:
I guess is what I'm trying to say.

[00:09:10] Speaker 04:
I understand the court's position.

[00:09:12] Speaker 04:
Another argument we've raised in favor of reversal is the Rule 32 argument.

[00:09:18] Speaker 04:
And this court does require strict compliance with Rule 32.

[00:09:22] Speaker 04:
So that error in and of itself is sufficient to warrant resentencing.

[00:09:26] Speaker 04:
And that error, we're on plain error review?

[00:09:29] Speaker 04:
Yes.

[00:09:30] Speaker 04:
Yes, we are.

[00:09:31] Speaker 04:
But there's three objections here that the district court really did not resolve.

[00:09:37] Speaker 04:
So Mr. Anderson objected to the loss amount as a whole.

[00:09:41] Speaker 04:
And he did so for three reasons.

[00:09:43] Speaker 04:
He argued that certain investments, even though they had happened after the date in which the scheme began, were not related to the scheme.

[00:09:52] Speaker 04:
He had received that money for other purposes.

[00:09:55] Speaker 04:
And so we've raised that argument as to Mr. Silverman and Mr. Zeiker.

[00:09:59] Speaker 04:
As to the dillies, Mr. Anderson argued that some of their investments had not been substantiated.

[00:10:06] Speaker 04:
And so that's about a $1.5 million difference in the loss amount as well.

[00:10:13] Speaker 04:
And it also impacted the restitution order by about $1.15 million.

[00:10:18] Speaker 04:
So these were factual objections.

[00:10:22] Speaker 04:
And Rule 32 required an express ruling.

[00:10:26] Speaker 04:
The government has not pointed to anything in the record that could constitute such an express ruling.

[00:10:31] Speaker 04:
And I'll give the court one example.

[00:10:33] Speaker 04:
For Anthony Zeiker, Mr. Anderson said, I received this money from Mr. Zeiker as payment to produce a series for children called Mysteriopolis, which no one disputes was completed, produced, and went out into the world.

[00:10:52] Speaker 04:
The question for the district court was, why did Mr. Seicher send these $50,000 to Mr. Anderson?

[00:10:58] Speaker 04:
And nowhere in the sentencing record is that resolved.

[00:11:02] Speaker 04:
So that is a plain error that warrants reversal.

[00:11:06] Speaker 04:
If the court has no further questions on this point, I'll reserve the rest of my time for rebuttal.

[00:11:10] Speaker 01:
Thank you.

[00:11:10] Speaker 01:
Council, I have a question for you.

[00:11:11] Speaker 04:
Yes, Your Honor.

[00:11:12] Speaker 01:
I would just like to hear your perspective on the standard of review that we must

[00:11:22] Speaker 01:
I mean, normally, sentencing issues are viewed for an abuse of discretion.

[00:11:33] Speaker 01:
But tell me, how do you deal with that standard in connection with a complex business, college fraud that we've got before us?

[00:11:50] Speaker 04:
Yes, Your Honor.

[00:11:51] Speaker 04:
Well, the Rule 32 error is a legal error that this court reviews de novo.

[00:11:57] Speaker 04:
Of course, it's also under the plain error standard.

[00:12:00] Speaker 04:
But I think Your Honor is asking about the substantive unreasonableness argument that we've made.

[00:12:04] Speaker 04:
And so under RESSM, when a district court makes a clear error of law that impacts the overall sentence, that is an abuse of discretion.

[00:12:15] Speaker 04:
So it is an abuse of discretion argument.

[00:12:17] Speaker 04:
But the underlying legal claim we're raising

[00:12:20] Speaker 04:
is subject to the NOVA review.

[00:12:33] Speaker 03:
May it please the court, Elizabeth Berenger for the United States.

[00:12:37] Speaker 03:
The court should affirm the sentence and restitution order in this case.

[00:12:41] Speaker 03:
The defendant here received a guideline sentence for his second federal fraud conviction after receiving a light sentence the first time around.

[00:12:50] Speaker 03:
Everyone agrees that the guideline range was correct in this case.

[00:12:53] Speaker 03:
The defendant is now challenging the substantive reasonableness of his sentence based on what he claims is error in calculating the guideline range.

[00:13:01] Speaker 03:
And in making this claim, he's conflating the distinct standards in Gall and Cardi for reviewing the reasonableness of a sentence.

[00:13:09] Speaker 03:
He wants to import this court's less deferential and highly technical review of guideline error to its substantive reasonableness review, but without harmlessness.

[00:13:19] Speaker 03:
And this hybrid approach of attacking the reasonable and sub-sentence overlooks both what this court has acknowledged, I think all three panel members, in the substantial discretion given to the district court, as well as the holistic approach that Judge Nguyen mentioned.

[00:13:35] Speaker 03:
The defendant is also raising some procedural challenges to his sentence, none of which were presented to the district court below, and none which arise to plain error.

[00:13:45] Speaker 03:
And unless the court wants me to address these in a different order, I plan to first address the reasonableness of the sentence, then the rule 32, and finally the restitution order.

[00:13:56] Speaker 03:
I think the court obviously has a good handle on the government's arguments in the reasonableness avenue.

[00:14:01] Speaker 02:
Remind me of what range the offense level resulted in.

[00:14:08] Speaker 03:
He got an 88-month sentence, so I have to look at it.

[00:14:10] Speaker 03:
And that's in the mid-range?

[00:14:12] Speaker 03:
He got a mid-range, yeah.

[00:14:14] Speaker 03:
So if we're taking the substantive reasonableness at first value, the court must defer with substantial discretion.

[00:14:23] Speaker 03:
And under that lens, it must affirm.

[00:14:25] Speaker 03:
For several reasons, one, the sentence fell within the correctly calculated range under CARDI.

[00:14:30] Speaker 03:
The overwhelming majority of cases that fall within a guideline range will be affirmed as reasonable.

[00:14:36] Speaker 03:
Second, as this court recognized during my friend's argument, the choice of sentence and the assessment of the seriousness of the offense was supported in the record, both in ER 245

[00:14:49] Speaker 03:
50, there were factual assertions that were pretty much uncontroverted.

[00:14:53] Speaker 03:
I mean, the defendant agreed that after 2013, all the investments or nearly all the investments were fraud.

[00:15:01] Speaker 03:
He doesn't dispute his prior conviction.

[00:15:02] Speaker 03:
He doesn't dispute that he took advantage of unsophisticated investors, that he

[00:15:09] Speaker 03:
use the perpetual use of lies in these doctored documents based on his past financial experience to entice these people to invest.

[00:15:18] Speaker 03:
But a really important point is that the fact finding on relevant conduct here, whether or not these disputed investments counted as relevant conduct under the guidelines, the district court could still consider them.

[00:15:29] Speaker 03:
And I point this court to its decision in Christensen.

[00:15:32] Speaker 03:
It can consider it under 3553A, under Pepper, under 18 USC 3661,

[00:15:38] Speaker 03:
All of those other investments that are bound up in this offense, even if they're not strictly relevant conduct, they can still be considered by the district court in its substantive reasonableness analysis.

[00:15:50] Speaker 03:
And as Judge Nguyen mentioned, I think this court's well aware, that these disputed losses, six million versus eight million, did not drive the sentence.

[00:15:59] Speaker 03:
That's not why the district court chose the sentence it did.

[00:16:02] Speaker 03:
In fact, it said it believed that loss was overstated in the guidelines and it was gonna give a discount

[00:16:08] Speaker 03:
because it thought that the guidelines overemphasized it.

[00:16:11] Speaker 03:
So eight versus six didn't matter.

[00:16:13] Speaker 03:
There may be a decision where the next range is 9.5 to 25.

[00:16:17] Speaker 03:
There could be a situation where a court finds 25 versus 9.5.

[00:16:22] Speaker 03:
That can make more of a difference than here, where it's eight versus six.

[00:16:26] Speaker 03:
And as far as the clear error, I did want to address one point, I think our brief.

[00:16:30] Speaker 03:
discusses our view.

[00:16:31] Speaker 03:
I mean, we're not deciding whether all of these individual investments were wire fraud.

[00:16:37] Speaker 03:
The defendant admitted wire fraud.

[00:16:39] Speaker 03:
We're trying to decide relevant conduct.

[00:16:41] Speaker 03:
whether it's part of that same course of conduct, which includes all acts of admissions that are part of the same course of conduct.

[00:16:47] Speaker 03:
I think the government's brief sets out our belief on the pre-2013, the Zucker and Dilley investments, but I did want to spend some time with Mr. Silverman briefly, because it also impacts the restitution order.

[00:16:59] Speaker 03:
But Mr. Silverman, as the record reflects, is over 90 years old, which shows the type of investor that Mr. Anderson was deceiving, and he gave

[00:17:09] Speaker 03:
a statement to the FBI saying he'd invested 1.1 million and suggesting it was all in comic toast in 2017, but obviously he is an older gentleman and that was not reflected really in the bank records that he, I want to direct the court's attention to.

[00:17:26] Speaker 02:
I thought on this one it did go into a bank account that was associated with cosmic toast, but then there were subsequent transfers out of that.

[00:17:34] Speaker 03:
Well, Your Honor, I'm going to direct you to ER 473.

[00:17:38] Speaker 03:
And it's interesting, because the large bulk of the money that he transferred into went to FOMLA law accounts.

[00:17:44] Speaker 03:
ER 473.

[00:17:45] Speaker 03:
And if you look at 473, and then you compare it to the FOMLA law bank records on 803, 804, 805, 806,

[00:17:59] Speaker 03:
you see that he's actually making over $700,000 of investments into Fond La La between 2013 and 2015.

[00:18:06] Speaker 03:
So he's not just sending money to Cosmic Toast, he's sending money into accounts controlled by Anderson's under the auspices of his company.

[00:18:15] Speaker 03:
And I wanted to show you that, I mean, the Grossmans are also sending money into those other accounts that the money was wired into for Mr.

[00:18:25] Speaker 03:
Silverman, that's at, if you compare 471 to 473 of the record.

[00:18:29] Speaker 03:
But as far as Cosmic Toast just being this sort of independent company, there's plentiful evidence in the record that not only was it the same temporal time as the conspiracy, I mean as the scheme, which is what this court looks at to see if it's relevant conduct.

[00:18:44] Speaker 03:
But you look at all the other investors.

[00:18:46] Speaker 03:
And PSR 27, the Delfanis, talked about that Cosmic Toast was one of the defendant's companies and they were aware of it.

[00:18:54] Speaker 03:
Hess paid a check to Cosmic Toast on 7-4-15.

[00:18:57] Speaker 03:
He was like a main recruiter and one of the more substantial investors.

[00:19:01] Speaker 03:
That's on ER 961.

[00:19:03] Speaker 03:
And of course the government's brief reference is Jack Dilley.

[00:19:06] Speaker 03:
Jack Dilley was, you know, toured around the company and shown the company, given false profit statements, showing that Cosmic Toast was turning to profit.

[00:19:13] Speaker 03:
That's PSR 49.

[00:19:16] Speaker 03:
So we have, this company is bound up

[00:19:19] Speaker 03:
in the same companies.

[00:19:20] Speaker 03:
And Silverman was not just contributing to Cosmic Toast.

[00:19:23] Speaker 03:
He was doing it to a lot of other ones.

[00:19:27] Speaker 03:
If the court doesn't have other questions about the substantive reasonableness, I'm going to briefly move on to the Rule 32 issue.

[00:19:34] Speaker 03:
Of course, as this court recognized, it is plain error.

[00:19:37] Speaker 03:
It's the defendant's burden to show both clear and obvious error as well as it affects his substantial rights.

[00:19:44] Speaker 03:
It's our view that the court did

[00:19:46] Speaker 03:
expressly deal with the objections on loss, and the defendant is demanding a level of granularity in how the court addresses loss that is not required by this court's precedent.

[00:19:57] Speaker 03:
I direct this court's attention to, I'm gonna butcher this name, I apologize in advance, Vajudagunarata, it's Dr. J case, which both Judge Gould and Judge Nguyen decided, it stated that overruling a loss amount is enough to satisfy the court's duties in deciding a rule 32, and here,

[00:20:16] Speaker 03:
the court did something interesting.

[00:20:17] Speaker 03:
It sustained the loss in part.

[00:20:21] Speaker 03:
So in sustaining the loss in part, it recognizes that there are other objections that the defendant has made to loss, which it is not sustaining.

[00:20:29] Speaker 03:
And so it recognized that there are other objections.

[00:20:32] Speaker 03:
Another thing is in addition to expressly dealing with this, the court also said the precise number of loss isn't as important because they've already given the defendant what he wants, which is to get below the 9.5 million.

[00:20:46] Speaker 03:
So he is expressly recognizing that further fact-finding is not required in this instance, because everyone agreed it's above 3.5 million.

[00:20:55] Speaker 03:
And then, of course, the same arguments for the substantive reason will just go into the third prong, because the defendant cannot show a reasonable probability it would have changed the sentence.

[00:21:06] Speaker 03:
None of the laws didn't drive the sentence for the reasons I mentioned earlier.

[00:21:12] Speaker 03:
If the court doesn't have any further questions on Rule 32, I'll just briefly cover restitution.

[00:21:16] Speaker 03:
I did want to talk about the standard of review just for a brief second, because it's disputed.

[00:21:21] Speaker 03:
And like Judge Bennett mentioned in the first argument this morning, it was a different material objection at the sentencing.

[00:21:30] Speaker 03:
As far as Silverman's objection, I'm sorry, to be more clear, when the defense was objecting to the inclusion of Silverman's loss,

[00:21:40] Speaker 03:
I want to direct the court's attention to 322 and to 275.

[00:21:45] Speaker 03:
In both of those cases, the defendant argues, absent a showing that Mr. Anderson fraudulently induced Mr. Silverman to continue invest in Cosmic Toast,

[00:21:59] Speaker 03:
his former company, the funds he provided should not be considered.

[00:22:03] Speaker 03:
So it was the same objection that he was making to that pre-2013 investments, that there was no evidence that he had caused anyone to or fraudulently induced anyone.

[00:22:16] Speaker 03:
So that was the objection that the district court was resolving.

[00:22:20] Speaker 03:
All of the parties thought he resolved that objection, which is evidenced by the fact that there was an agreement to the restitution for Silverman.

[00:22:27] Speaker 03:
There was no re-logging of that argument at restitution.

[00:22:30] Speaker 03:
So the government believes that this is under Olivas, this court's recent decision, Olivas.

[00:22:37] Speaker 03:
Because he made a different objection, it's a plain error.

[00:22:40] Speaker 03:
I did also want to highlight that there is this disparity between the loss finding at sentencing and loss finding at restitution.

[00:22:49] Speaker 03:
And as this court has recognized, those are different analyses.

[00:22:54] Speaker 03:
And one of the reasons that they're different analyses is that loss doesn't include any sort of payments after the frauds detected versus restitution does.

[00:23:06] Speaker 03:
And there was an exchange of extensive documentation probably with respect to Dilley.

[00:23:10] Speaker 03:
And that might have accounted for some of the differences.

[00:23:13] Speaker 03:
But more importantly, and this is the government's main point, is that the court decided at sentencing that further fact finding on loss wasn't important after it made that loss determination.

[00:23:24] Speaker 03:
But it was important at restitution because it was mandatory.

[00:23:29] Speaker 03:
And so it had to delve into the loss in a way that it didn't have to delve into it at sentencing.

[00:23:37] Speaker 03:
Further questions from the panel, I would ask the court to affirm the sentence and the restitution order.

[00:23:43] Speaker 03:
Thank you, counsel.

[00:23:52] Speaker 04:
In the brief time I have left, I'd like to make a few points about Mr. Silverman.

[00:23:58] Speaker 04:
The first is, so under the MVRA, legally,

[00:24:04] Speaker 04:
The government was required to show that Mr. Silverman was the victim of criminal conduct by Mr. Anderson.

[00:24:12] Speaker 04:
Now, nothing in Mr. Silverman's FBI interview, which is the only explanation we have for why he invested in Van Lala or Cosmic Toast or whatever company we want to call it,

[00:24:24] Speaker 04:
Nothing in that FBI interview indicates that he was defrauded.

[00:24:27] Speaker 04:
He says that he cannot remember what he was told.

[00:24:30] Speaker 04:
And so the only reasoning under which that award can be upheld is a fraud by omission theory.

[00:24:38] Speaker 04:
which, as I've already explained, legally fails.

[00:24:41] Speaker 04:
So that's one reason to strike down the restitution award, as to Mr. Silverman.

[00:24:45] Speaker 04:
The other reason to strike down the restitution award is that the MVRA requires that the conduct be part of the same scheme as the scheme of conviction.

[00:24:54] Speaker 04:
And as we've noted, Cosmic Toast had a different CEO.

[00:24:58] Speaker 04:
There's very little information in the record about Cosmic Toast.

[00:25:02] Speaker 04:
Certain victims heard about Cosmic Toast at periods of time.

[00:25:06] Speaker 04:
But the PSR says very little about

[00:25:08] Speaker 04:
how Mr. Anderson acquired Cosmic Toast.

[00:25:11] Speaker 04:
The parties agreed that he received it from Mr. Silverman.

[00:25:15] Speaker 04:
He actually purchased it from Mr. Silverman at one point.

[00:25:18] Speaker 04:
The government concedes that in their sentencing brief at ER 301, footnote 10.

[00:25:24] Speaker 04:
But beyond that, there's very little about it, in part, I think, because so many of the victims purchased shares of Imbi and not shares of Cosmic Toast.

[00:25:36] Speaker 04:
The two schemes are substantially separate, even though they occurred at the same period of time.

[00:25:42] Speaker 04:
And finally, just to quickly touch on the rule 32 point, I will also butcher the name, Wajigunaratna.

[00:25:50] Speaker 04:
But I think that case is different, because there, the district court showed that it was aware of the objection, and it adopted the PSR in response to that objection.

[00:26:00] Speaker 04:
Whereas here, the district court

[00:26:02] Speaker 04:
did not seem to be aware that there were objections to the loss amount that went beyond the date.

[00:26:07] Speaker 04:
So I think a fair reading of the sentencing transcript shows that the district court was under the impression that once it picked a cutoff date, the entire issue was resolved.

[00:26:19] Speaker 04:
And I think that is clearest

[00:26:25] Speaker 04:
I'm not going to find the specific page.

[00:26:26] Speaker 04:
But I think that is clearest if the court looks at the portion where the district court actually calculated the loss amount.

[00:26:32] Speaker 04:
It's all based on the September 2011 date.

[00:26:35] Speaker 04:
Thank you.

[00:26:36] Speaker 02:
Thank you very much, counsel, for both sides for your argument this morning.

[00:26:41] Speaker 02:
And special thanks and congratulations again to our courtroom deputy, Bonnie Cates.

[00:26:46] Speaker 02:
We are in recess until 9 o'clock tomorrow morning.

[00:26:50] Speaker 02:
And this last matter is also submitted.

[00:26:57] Speaker 02:
This court for this session stands adjourned.