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United States of America v. Brent Roger Wilkes

June 5, 2012

UNITED STATES OF AMERICA, PLAINTIFF,
v.
BRENT ROGER WILKES, DEFENDANT.



BEFORE HONORABLE LARRY ALAN BURNS, JUDGE PRESIDING

TUESDAY JUNE 5, 2012 9:00 A.M. CALENDAR

REPORTER'S TRANSCRIPT OF PROCEEDINGS EVIDENTIARY HEARING

TRIAL, THAT MOTION IS ALSO DENIED. THE COURT CONFIRMS THE JURY VERDICT AND THE SENTENCE THAT WAS PREVIOUSLY IMPOSED IN THIS CASE.

THOSE ARE MY FINDINGS.

THE ADDITIONAL ISSUE THAT HAS BEEN BRIEFED BY THE PARTIES REGARDS MR. WILKES'S STATUS ON BAIL. I HAVE REVIEWED THE PARTIES' SUBMISSIONS. I HAVE ALSO READ THE CASES FROM THE SIXTH AND SEVENTH CIRCUIT. ONE OF THE CASES I THINK IS ALLUDED TO IN THE GOVERNMENT'S PLEADINGS, THE KRZYSKE CASE, I THINK. THERE IS ANOTHER CASE FROM THE SEVENTH CIRCUIT, UNITED STATES VERSUS BLACK, 543 FED.2D 35.

AND BOTH OF THOSE CASES, MS. CHARLICK, CUT AGAINST YOUR ARGUMENT. YOUR ARGUMENT IS THAT I HAVE LIMITED POWERS UNDER THE MANDATE, AND SINCE BAIL WAS NOT AMONG THOSE POWERS I HAVE NO AUTHORITY TO RECONSIDER THE MATTER OF BAIL.

FIRST -- GIVE ME JUST ONE SECOND HERE TO FIND MY PLACE IN ALL OF THESE DIFFERENT BOOKS.

LET ME SPEAK FIRST TO THE ARGUMENT THAT YOU MAKE ABOUT THE MANDATE.

THE STANDARD SET FORTH IN U.S. VERSUS BAD MARRIAGE AT 439 FED.3RD 534, THE DOCTRINE OF THE RULE OF MANDATE STATES THAT A LOWER COURT -- IT IS ACTUALLY AN INCLUSIVE DOCTRINE. IT SAYS IT MAY DECIDE ANY ISSUE NOT FORECLOSED BY THE COURT'S MANDATE.

IT NOTES THAT THE COURT OF APPEALS MAY LIMIT THE SCOPE OF THE ISSUES FOR WHICH WE REMAND, BUT THAT LIMITATION IS EXPLICIT WHEN IT IS DONE. WHEN WE CLEARLY INDICATE OUR INTENTION TO LIMIT THE MANDATE, THEN THE DISTRICT COURT ORDINARILY LACKS AUTHORITY TO CONSIDER ANY ISSUES NOT WITHIN THE SCOPE OF THE REMAND.

SO, FOR STARTERS, I DON'T FIND THAT THE MANDATE HERE IS SPECIFIC OR IS LIMITED. BUT I REALLY THINK THAT IS BESIDE THE POINT. THE COURT FINDS THAT UNDER BLACK -- AND GIVE ME JUST A SECOND, I AM HAVING TROUBLE RECALLING THE NAME OF THE OTHER CASE. THERE IT IS, KRZYSKE. KRZYSKE IS AT 857 FED.2D 1089, SIXTH CIRCUIT, 1988.

UNDER THOSE TWO CASES, THE RULE IS THAT WHEN A CASE IS REMANDED FOR DETERMINATION OF LEGAL ISSUES THE ISSUE OF BAIL IS OPEN TO THE COURT. I MEAN, THAT ONLY MAKES SENSE. THINK ABOUT THIS FOR A SECOND.

YOUR CLAIM IS THAT I HAVE NO AUTHORITY OVER MR. WILKES REGARDING BAIL. LET'S SAY, YOU KNOW, THIS MORNING HE SHOT SOMEBODY HERE IN THE COURTROOM. YOU WOULD SAY THAT BECAUSE OF THE MANDATE THAT I COULDN'T ADJUST HIS BAIL AT THAT POINT OR TAKE APPROPRIATE ACTIONS, REGARDLESS OF WHETHER HE IS CHARGED WITH A NEW OFFENSE. THAT JUST DOESN'T STRIKE ME AS RIGHT, AND THE CASES SUGGEST THAT IT IS NOT RIGHT. THAT THE DISTRICT COURT RETAINS JURISDICTION OVER THE PERSON OF THE DEFENDANT, AND IN THAT REGARD CAN TAKE INTO CONSIDERATION CHANGED CIRCUMSTANCES.

SO I DON'T FIND THAT THERE IS ANY PROHIBITION HERE, BASED ON THE MANDATE THAT ISSUED IN THIS CASE. I MEAN, FOR ONE THING, THIS COURT NOW HAS JURISDICTION; THE APPELLATE COURT DOESN'T ON THIS ISSUE. IT HAS BEEN REMANDED TO ME. THE MANDATE HAS ISSUED. I AM NOT ACTING BEFORE THE MANDATE WAS SPREAD HERE, THE MANDATE WAS SPREAD AND THE HEARING WAS SET AFTERWARDS. SO I DON'T FIND THAT THE MANDATE CONTROLS THIS CASE AT ALL. AND I DO FIND THAT WITH RESPECT TO BAIL I MAINTAIN JURISDICTION.

NOW, THAT SAID, THE GOVERNMENT HAS TAKEN THE POSITION THAT CHANGED CIRCUMSTANCES ARE THESE. THEY SAY THAT MR. WILKES HAS MADE UNAUTHORIZED WITHDRAWALS FROM AN EMPLOYEE PENSION PLAN, 401K PLAN AND ANOTHER TYPE OF PLAN. THEY POINT OUT THAT HE GOT HIS ENTITLEMENT OUT OF THOSE, BUT THEN HE TOOK LOANS AGAINST IT AND THE LOANS HAVEN'T BEEN FULLY PAID BACK. AND THAT THAT VIOLATES FEDERAL LAW, IT IS A FORM OF CONVERSION.

WHEN I GOT THE PAPERS, BOTH SIDES -- AND I WANT YOU TO SPEAK TO THIS, MS. CHARLICK. IT ALSO OCCURS TO ME THAT JUST THE FACT THAT HE CONTINUES TO OPERATE AS A FIDUCIARY -- AND HE DOES, THERE IS NO DISPUTE ABOUT THAT -- WOULD ALSO VIOLATE FEDERAL LAW, AND IN FACT AMOUNT TO A NEW FELONY OFFENSE UNDER THE LABOR CODE 29 USC 1111.

THE PROVISION IS THAT NO PERSON WHO HAS BEEN CONVICTED OR IMPRISONED AS A RESULT OF A CONVICTION FOR, AMONG OTHER THINGS, BRIBERY MAY ACT AS AN ADMINISTRATOR, FIDUCIARY, OFFICER, TRUSTEE, SO ON AND SO FORTH, OR IN ANY REPRESENTATIVE CAPACITY OF ANY EMPLOYMENT BENEFIT PLAN.

AND I THOUGHT, WELL, OKAY, BUT THE CONVICTION IS GOING TO BE APPEALED AGAIN, DOES THAT AFFECT ANYTHING? WHEN YOU GO ON TO C(2) UNDER 29 USC 1111, THE DEFINITION UNDER C(1) SAYS A PERSON SHALL BE DEEMED TO HAVE BEEN CONVICTED AND UNDER THE DISABILITY OF CONVICTION FROM THE DATE OF THE JUDGMENT OF THE TRIAL COURT, REGARDLESS OF WHETHER THAT JUDGMENT REMAINS UNDER APPEAL.

THE PENALTY FOR MR. WILKES ACTING AS A FIDUCIARY, HAVING BEEN CONVICTED OF BRIBERY, IS A FIVE YEAR PENALTY. THAT IS ACCORDING TO THE U.S. CODE.

I ALSO HAVE CONCERNS THAT IF THE REPRESENTATIONS OF THE UNITED STATES ARE TRUE, THAT HE CONVERTED FUNDS THAT DID NOT BELONG TO HIM. THEY REPRESENT THAT HE GOT HIS MONEY OUT. TO THE EXTENT IT WAS -- FORGET ABOUT THE EMPLOYEE BENEFIT PLAN, LOOK AT THE 401K. CONTRIBUTIONS TO THOSE PLANS ARE MADE BY THE EMPLOYEES OR THEY ARE MADE BY AN EMPLOYER ON BEHALF OF THE EMPLOYEES. I KNOW THAT FROM ERISA LAW. BUT ONCE THE CONTRIBUTIONS ARE MADE THEY ARE IMMEDIATELY VESTED FOR THE BENEFIT OF THE EMPLOYEE. AND MR. WILKES HAD NO RIGHT, NO RIGHT TO WITHDRAW FUNDS THAT WERE VESTED FOR THE BENEFIT OF THE EMPLOYEES FOR HIS OWN USE.

THE GOVERNMENT HAS GIVEN ME A CHART IN THEIR FAVOR SAYING HE MADE, WHAT, $167,000, SOMETHING LIKE THAT, WORTH OF WITHDRAWALS. I UNDERSTAND THAT HE PAID SOME OF IT BACK. BUT IT APPEARS TO ME, ON THE FACE OF THINGS, AND LOOKING AT THE LAW THAT APPLIES, THAT THERE IS PROBABLE CAUSE TO BELIEVE HE COMMITTED A FELONY WHEN HE DID THAT.

SO OF COURSE I WANT TO HEAR FROM YOU ON ALL OF THIS, BUT MY PRELIMINARY BELIEF IS THERE IS CHANGED CIRCUMSTANCES HERE. NUMBER ONE, HE HAS COMMITTED A NEW OFFENSE.

I AM NOT HARKENING BACK TO HIM BEING AN ECONOMIC DANGER. I KNOW THAT THAT WAS RAISED BY THE GOVERNMENT. THE COURT OF APPEALS HAS DEALT WITH THAT. I AM DEALING WITH CHANGED CIRCUMSTANCES NOW, THIS RAIDING OF THE PENSION PLAN.

THE OTHER THING I HAVE TO TELL YOU IS I THINK THE CIRCUMSTANCES HAVE CHANGED IN ANOTHER IMPORTANT REGARD. UNDER 3143 I AM TO EVALUATE, YOU KNOW, WHETHER THE ARGUMENTS THAT HE HAS ON APPEAL ARE FAIRLY DEBATABLE. I AM FULLY FAMILIAR WITH THAT STANDARD.

WHEN THIS CASE WENT UP THE FIRST TIME IT WAS A DIFFERENT ISSUE. HE HAD A HOST OF ISSUES. ALL OF THOSE, NOW, ALL OF THOSE, BY THE APPELLATE COURT, SAVE ONE, HAVE BEEN DECIDED AGAINST HIM, AND I HAVE NOW DECIDED THE OTHER CASE AGAINST HIM.

I HAVE LOOKED AT THE STANDARD FOR REVIEWING THAT. MY FACTUAL FINDINGS ARE REVIEWED FOR CLEAR ERROR. IT IS LIKELY, IN MY JUDGMENT -- ALTHOUGH I DON'T KNOW FOR SURE AND I WON'T PRESUME, BUT IT IS LIKELY, IN MY JUDGMENT, THAT THIS IS GOING TO BE WHAT THE NINTH CIRCUIT CALLS A COME-BACK CASE. WHEN THERE IS GREAT EFFORT EXPENDED BY A PANEL ON A CASE, THEY ARE VERY FAMILIAR WITH THE RECORD AND THEY DO A REMAND, IT COMES BACK TO THEM.

NOW, THAT IS A MATTER OF THEIR DISCRETION. BUT I HAVE SAT WITH THE NINTH CIRCUIT SEVERAL TIMES, I HAVE BEEN ON PANELS WHERE WE HAVE HAD COME-BACK CASES. AND THE BASIS, MUCH LIKE THIS CASE, IS WE REVIEWED THE WHOLE RECORD, WE HAVE REMANDED FOR SOMETHING.

THAT ALSO INFORMS MY JUDGMENT ON THE BAIL MATTER HERE. IF THIS IS, INDEED, A COME-BACK CASE, I HAVE A PRETTY STRONG VIEW OF HOW THAT APPELLATE PANEL VIEWS THE RECORD IN THIS CASE. AND I THINK THAT HAS CHANGED, TOO. I THINK YOU ARE GOING TO HAVE A HARD TIME CONVINCING THEM THAT MY FACTUAL FINDINGS, AFTER THIS INQUIRY, ARE CLEAR ERROR, AND THEREFORE IT IS VERY UNLIKELY MR. WILKES IS GOING TO PREVAIL ON ANY SUBSEQUENT APPEAL OF THIS DECISION.

SO THOSE THINGS SAID -- AND THAT IS A MOUTHFUL, I UNDERSTAND -- I AM HAPPY TO HEAR FROM YOU.

MS. CHARLICK: LET ME ADDRESS YOUR LAST POINT FIRST, UNDERSTANDING THAT WE DO BELIEVE THAT THE SCOPE OF THE MANDATE IS LIMITED. WE CITED NINTH CIRCUIT CASES THAT DISCUSSED HOW YOU DO HAVE LIMITED AUTHORITY.

IT IS THE COURT OF APPEALS WHO GAVE MR. WILKES BAIL, AND THEY ISSUED SOME REPEATED ORDERS. AND THEY ARE THE ONES WHO GRANTED HIM BAIL. AND IF THERE ARE CHANGED CIRCUMSTANCES THE GOVERNMENT SHOULD MOVE IN THE COURT OF APPEALS, IF THE COURT OF APPEALS CHOOSES TO REMAND IT TO THIS COURT, THAT IS MY POSITION.

AND I DON'T THINK THAT THE BLACK CASE ADDRESSES CHANGED CIRCUMSTANCES, BUT I THINK THE SIXTH CIRCUIT CASE MERELY ADDRESSES THE FACT THAT THE DEFENDANT LOST HIS APPEAL. SO THEY SAID, LOOK, THERE IS NO MORE SUBSTANTIAL ISSUES.

THERE WASN'T ANY EVIDENTIARY HEARING OR ANYTHING OF THAT NATURE, FROM WHAT I REMEMBER. I BRIEFLY SKIMMED THE CASE, LIKE, LATE LAST NIGHT.

SO I THINK THAT IS DIFFERENT. THE COURT OF APPEALS HERE REMANDED FOR THE EVIDENTIARY HEARING. AND THEN UNDERSTANDING, JUST AS IN STRAUB, THERE IS A POSSIBILITY, A VERY REAL POSSIBILITY, OF A SECOND APPEAL. AND REMEMBER, STRAUB ITSELF WAS REVERSED THAT SECOND TIME.

THE COURT: RIGHT.

MS. CHARLICK: AND SO THAT ISSUE CERTAINLY WAS SUBSTANTIAL. AND BY THE SAME PANEL.

THE COURT: HERE IS WHAT KRZYSKE SAYS ABOUT THAT POINT. IT SAYS: THE FILING OF A NOTICE OF APPEAL, ALTHOUGH TRANSFERRING JURISDICTION OVER THE CASE FROM THE DISTRICT COURT TO THE COURT OF APPEALS, DOES NOT RENDER THE DISTRICT JUDGE POWERLESS OR WITHOUT JURISDICTION TO ENFORCE CONDITIONS OF A BOND UNDER WHICH THE DEFENDANT MAY HAVE BEEN RELEASED PENDING APPEAL. THE COURT ALSO RETAINS JURISDICTION OVER THE PERSON OF THE DEFENDANT AT LEAST FOR THE LIMITED PURPOSES OF REVIEWING, ALTERING OR AMENDING THE CONDITIONS UNDER WHICH THAT COURT RELEASED THE DEFENDANT, AND IS EMPOWERED TO REVOKE OR FORFEIT THE DEFENDANT'S BOND DURING THE PENDENCY OF AN APPEAL FOR ANY OF THE REASONS WHICH WOULD HAVE SUPPORTED AN INITIAL DENIAL OF THE DEFENDANT'S APPLICATION FOR RELEASE.

AND IN THESE CASES, THE COURT OF APPEALS -- BOTH CASES THE COURT OF APPEALS HAD ACTUALLY SET BOND AND THEN IT GOT REVOKED BY THE DISTRICT COURT, IN ONE CASE BEFORE THE MANDATE HAD EVEN ISSUED.

APPARENTLY THE COURT HAD FOUND OUT THAT THE DECISION WAS MADE BUT THE MANDATE HADN'T ISSUED, SO IT REVOKED BAIL. AND THE CONTENTION THERE WAS THAT.

BUT BOTH THE SIXTH AND SEVENTH CIRCUITS, AND I THINK SENSIBLY, FOR THE REASON I GAVE YOU ABOUT, YOU KNOW, NEW CRIMES BEING COMMITTED, SAY THAT THIS ISN'T WITHIN THE SCOPE OF THE MANDATE.

IT MAKES SENSE. IF YOU THINK ABOUT THE MANDATE, IT IS THAT CERTAIN THINGS HAVE BEEN SETTLED BY THE COURT OF APPEALS. THEY HAVE BEEN SETTLED ONCE AND FOR ALL, AND THE DISTRICT COURT SHOULD NOT REVISIT THEM. THAT CAN'T BE SAID WITH RESPECT TO BAIL. BAIL IS A FLUID SITUATION. OBVIOUSLY YOU WOULDN'T CONTEND THAT IF, IN FACT, MR. WILKES HAS COMMITTED NEW OFFENSES THAT HE SHOULD REMAIN OUT ON BAIL, OR THAT SOMEHOW I SHOULD BE HAMPERED IN CONSIDERING THAT, OR THE COURT OF APPEALS, WHICHEVER FORUM YOU WANT.

BUT I JUST DON'T -- HONESTLY, I DON'T SEE THIS AS WITHIN THE MANDATE. I THINK IT IS A COMPLETELY DIFFERENT SET OF CONSIDERATIONS.

THE OTHER POINT I MAKE TO YOU FROM THIS KRZYSKE CASE IS THAT THEY POINT OUT THAT THE DISTRICT COURT, IN MOST INSTANCES, BECAUSE OF ITS FACT FINDING ABILITIES THAT THE COURT OF APPEALS LACKS, IS IN THE BEST POSITION TO MAKE THE TYPE OF DETERMINATION THAT BAIL INVOLVES.

YOU KNOW, OBVIOUSLY, I AM GOING ON WHAT THE GOVERNMENT HAS TOLD ME HERE, AND I READ YOUR RESPONSE TO THAT. BUT THE APPELLATE COURT CAN HARDLY SORT THAT OUT. THEY DON'T HAVE THE ABILITY TO CALL WITNESSES AND FIGURE THAT OUT.

MS. CHARLICK: WELL, BAIL DETERMINATIONS ARE REVIEWED DE NOVO, THOUGH, BY THE APPELLATE COURT. THEY DO REVIEW THE FACTUAL RECORD. YOU KNOW, THAT IS THE STANDARD.

AND WITH RESPECT TO THE CHANGED CIRCUMSTANCES, WE FOUND OUT ABOUT THESE ALLEGATIONS FRIDAY NIGHT AT 5:00, AND THEN I GOT THE OTHER PLEADING LAST NIGHT AT, LIKE, 8:00 OR 9:00. I HAVE HAD THE MOST LIMITED ABILITY, WHILE PREPARING FOR THIS HEARING, TO INVESTIGATE OR TO DO ANYTHING. THERE IS NO ORDER TO SHOW CAUSE ISSUED.

I SPOKE WITH DAVE HORTON FROM PRETRIAL SERVICES WHO SAYS HE KNEW ABOUT THE LOANS, AND IT WASN'T -- MR. WILKES WAS IN COMPLIANCE WITH THE CONDITIONS THAT YOUR HONOR SET FOR REPORTING.

THE COURT: HE WASN'T IF HE IS COMMITTING A NEW FELONY.

MS. CHARLICK: IT DOES NOT SEEM THAT MR. HORTON THOUGHT THERE WAS ANY NEW FELONY.

AND, JUDGE, I AM NOT FAMILIAR WITH THIS LABOR CODE. MAYBE THERE IS A MENS REA ASPECT. I HOPE SO, BECAUSE IT WOULD SEEM VERY HARSH TO PENALIZE SOMEONE WHO DID NOT KNOW.

THE COURT: WITH ALL RESPECT TO THE PRETRIAL SERVICES OFFICER, I DON'T EXPECT HIM TO BE VERSED IN VIOLATIONS OF THE LABOR CODE AND LIKEWISE. SO HE MAY HAVE THOUGHT, WELL, THIS IS ALL HUNKY DORY, HE IS THE TRUSTEE. THE PROBLEM IS YOU CAN'T BE THE TRUSTEE. HE IS FORECLOSED BY VIRTUE OF HIS CONVICTION.

THEN THE SUBSTANTIVE PART OF IT IS, YOU KNOW, YOU TALKED ABOUT, WELL, THESE HAVE ALL BEEN ORPHANED FUNDS.

THAT DOESN'T MEAN THAT MR. WILKES IS ENTITLED TO USE THEM.

MS. CHARLICK: I AM NOT MAINTAINING THAT POSITION, YOUR HONOR.

THE COURT: HERE IS WHAT HAPPENS, MS. CHARLICK, ON AN EMPLOYEE BENEFIT PLAN. IF THE HEIRS OF THE EMPLOYEE, YOU KNOW, IF THE EMPLOYEE IS DEAD OR CAN'T BE FOUND, IF THE HEIRS DON'T HAVE CLAIM TO IT THEN THE STATE HAS FIRST RIGHT TO IT, GOES TO THE STATE. BUT IN NO EVENT DOES MR. WILKES, WHO HAS NO ENTITLEMENT TO THOSE FUNDS, HAVE THE RIGHT TO RAID THE COOKIE JAR AND USE THE FUNDS FOR HIS PERSONAL BENEFIT.

THEN I AM TOLD BY THE GOVERNMENT THAT HE IS GAMBLING. ARE THE FUNDS BEING USED TO SUPPORT GAMBLING HABITS?

MS. CHARLICK: I DIDN'T GET -- I MEAN, MAYBE I READ IT TOO QUICKLY. I DIDN'T SEE THAT, AT ALL, YOUR HONOR.

THE COURT: THE LAST PLEADING FILED LAST NIGHT, I HAD A CHANCE TO LOOK AT IT.

MS. CHARLICK: GAMBLING?

THE COURT: THEY REFER TO HIM AS BRENT "THE ENIGMA" WILKES, WHICH I THINK IS SOME HANDLE OR TITLE WHEN HE PLAYS POKER.

MS. CHARLICK: I DON'T -- YOUR HONOR, THESE ARE ALLEGATIONS THE GOVERNMENT IS MAKING. IF THEY WANT TO SUBSTANTIATE AND PROVE UP THESE ALLEGATIONS, I WANT A HEARING. I WANT THE WITNESSES HERE. HE IS ENTITLED TO THAT.

THEY CAN'T JUST FILE A DECLARATION FROM MS. CHU AND SAY YOU SHOULD REVOKE HIS BOND, HE HAS BEEN RAIDING THE PENSION FUND AND GAMBLING. I MEAN, THIS IS --

MR. HALPERN: WE HAVE WITNESSES RIGHT HERE, YOUR HONOR, THAT WE COULD CALL IF THIS IS REALLY A POINT.

THE GOVERNMENT'S POSITION, OF COURSE, IS THAT ON SECTION 3143 THE COURT MUST REMAND HIM, EVEN WITHOUT REACHING THIS ISSUE, UNLESS YOU BELIEVE THAT YOUR RULING IS SUBJECT TO THE CLEAR ERROR STANDARD OF BEING REVERSED. OTHERWISE, UNDER THE STATUTE, YOU DON'T EVEN GO TO THIS.

THE COURT: WHAT ABOUT THAT, MS. CHARLICK? BECAUSE I HAVE LOOKED AT THAT, AND, YOU KNOW, I SAW IN ONE OF THESE BAIL CASES THAT THE JUDGE, THE TRIAL JUDGE, CHARACTERIZED THE DEFENDANT'S CHANCES AS SLIM TO NONE. I AM NOT GOING TO DO THAT, I AM NOT GOING TO TRY TO QUANTIFY WHAT HIS CHANCES ARE. BUT IT JUST SEEMS TO ME THAT THIS IS A VERY DIFFERENT SITUATION FROM THE ONE THAT EXISTED INITIALLY.

HE HAD A HOST OF ISSUES. WE HAD THE SKILLING CASE THAT THE SUPREME COURT GRANTED CERT IN, AND THE NINTH CIRCUIT DELAYED RESOLUTION OF THIS SO THEY COULD DECIDE SKILLING. ALL OF THAT IS OFF THE TABLE NOW, ALL OF THAT IS OFF THE TABLE. THERE IS A VERY LIMITED, DISCRETE ISSUE, AND IT IS A FACT BOUND ISSUE, AND HE HAS TO SHOW THAT I WAS CLEARLY ERRONEOUS IN MY FACTUAL FINDINGS TO GAIN RELIEF HERE. WITHOUT QUANTIFYING IT, I JUST DON'T THINK THAT THAT MEETS THE STANDARD UNDER 3143 FOR A FAIRLY DEBATABLE POINT. AND THAT IS A CHANGED CIRCUMSTANCE. THE OTHER STUFF SORT OF COLORS THIS.

AGAIN, I AM MINDFUL THAT THE APPELLATE COURT DIDN'T AGREE WITH ME THAT HE WAS AN ECONOMIC DANGER. FINE. BUT EVERYTHING THAT FACTORED INTO THAT CHARACTERIZATION IS OUT OF THE ANALYSIS FOR NOW. THERE IS NEW STUFF. THERE IS NEW STUFF. IF I BELIEVE THE GOVERNMENT HE IS COMMITTING A FELONY AS A PERSON CONVICTED OF BRIBERY THAT IS CONTINUING TO EXERCISE POWERS OF A TRUSTEE OVER AN EMPLOYMENT PLAN. THAT IS PROHIBITED BY LAW, IT IS PUNISHABLE BY UP TO FIVE YEARS. AND SECOND, HE IS CONVERTING MONEY THAT DOESN'T BELONG TO HIM TO HIS OWN USE. SO THOSE ARE THE CHANGED CIRCUMSTANCES HERE.

I APPRECIATE YOU WANT HEARING, AND WE WILL HAVE A HEARING. THEY WILL HAVE TO DOCUMENT SOME OF THIS STUFF. I MEAN, THAT DOESN'T SPEAK REALLY TO THE CHANGED CIRCUMSTANCE REGARDING THE STATURE OF THE CASE AT THIS POINT. BUT AS TO THE FACTUAL ALLEGATIONS, I THINK YOU ARE ENTITLED TO CHALLENGE THOSE, AND THEY HAVE WITNESSES READY.

MS. CHARLICK: WELL, IF YOU WANT ME TO ADDRESS THE 3143(B), DOES THE CASE STILL PRESENT A SUBSTANTIAL ISSUE, IT DOES. THE STRAUB ISSUE WAS ALWAYS OUR STRONGEST ISSUE. IT WAS THE ONLY ONE THAT WAS PRESERVED, SO THAT AUTOMATICALLY ASSISTED US.

STRAUB CAME OUT. IT WAS A VERY HELPFUL CASE. IT IS

THE CASE THAT THE JUDGES FOCUSED ON IN THE ORAL ARGUMENT.

AND WE TAKE ISSUE WITH YOUR HONOR'S CHARACTERIZATION OF THE DIRECT CONTRADICTIONS AS NOT BEING DIRECT CONTRADICTIONS, AND THINK THAT ACTUALLY STRAUB SUPPORTS US ON THAT POINT, PRECISELY. AND ALSO LOOKING AT WHETHER OR NOT THE FACT FINDING PROCESS WAS DISTORTED.

AND STRAUB DID FIND -- JUST BECAUSE THERE WERE, YOU KNOW, 11 OF 12 WITNESSES IMMUNIZED IN STRAUB, THERE WAS ONLY ONE WITNESS THAT CONTRADICTED -- THAT BAUMANN'S TESTIMONY CONTRADICTED, THE ONE GUY. THAT IS ALL THAT MATTERED.

THE COURT: YOU ACKNOWLEDGE, DON'T YOU, THAT MY FACTUAL FINDINGS AS TO THIS ISSUE ARE REVIEWED FOR CLEAR ERROR OF FACTUAL FINDINGS.

MS. CHARLICK: NO, IT IS A MIXED QUESTION OF FACT AND LAW.

THE COURT: STRAUB SAYS MY FACTUAL FINDINGS ARE REVIEWED FOR CLEAR ERROR, WHICH MEANS MORE THAN THE APPELLATE COURT SIMPLY WOULD HAVE REACHED A DIFFERENT CONCLUSION. THEY HAVE TO BE IRRATIONAL OR OFF THE BOARD BEFORE THEY CAN REVERSE FOR CLEAR ERROR ON FACTUAL FINDINGS. AND STRAUB SAYS THAT.

MS. CHARLICK: YOUR HONOR, THE DIRECT CONTRADICTION ANALYSIS, REMEMBER STRAUB REVERSED THE SECOND TIME AND SAID THE DISTRICT COURT ERRED NOT -- I MEAN, IT SAID IT WAS A MIXED QUESTION OF FACT AND LAW.

THE COURT: IT DID. BUT AS I HAVE SAID, AND AS MY RULING ATTESTED TO, IT IS A VERY, VERY DIFFERENT, STARKLY DIFFERENT CASE FROM THIS ONE. I MEAN, JUST START WITH THE NUMBERS, WHICH ARE NOT DISPOSITIVE, 11 OUT OF 12 GOVERNMENT WITNESSES GOT IMMUNITY. SECOND, THEY GOT ALL KINDS OF BENEFITS FROM THAT.

HERE, A COUPLE OF THE WITNESSES THAT GOT IMMUNITY, BORROMEO AND MAX KANE, MR. WILLIAMS OFFERED NOTHING ABOUT THEM. SO THEY ARE KIND OF OUT OF THE EQUATION FOR DIRECT CONTRADICTION.

THE MOST YOU COULD SAY WAS THAT JOEL COMBS, WHO WAS IMMUNIZED, AND WADE, WHO GOT THE BENEFIT OF A PLEA AGREEMENT, WOULD HAVE BEEN IMPEACHED IN SOME OF THE IMPRESSIONS THAT THEY HAVE.

I DON'T NEED TO REARGUE THIS, I AM JUST TELLING YOU THAT THE REVIEW IS FOR CLEAR ERROR WHICH IS A DIFFICULT -- MUCH MORE DIFFICULT STANDARD TO SHOW, YOU KNOW, THAT THERE IS NO SUPPORT FOR THIS. NOT JUST DISAGREEMENTS AMONG JURISTS BUT NO SUPPORT FOR MY FINDINGS.

AND I DON'T KNOW. STRANGER THINGS HAVE HAPPENED, I CAN ATTEST TO THAT, WITH THE NINTH CIRCUIT. BUT I JUST DON'T THINK IN THIS ONE THAT THEY ARE GOING TO FIND THAT MY FINDINGS WERE IRRATIONAL OR NOT BASED IN FACT AT ALL.

MS. CHARLICK: BUT YOU DIDN'T THINK THAT THE NINTH CIRCUIT WOULD GIVE MR. WILKES BAIL PENDING APPEAL, EITHER.

THE COURT: NO, I SURE DIDN'T. PARTICULARLY AFTER THEY STRUCK HIS FINANCIAL AFFIDAVIT BECAUSE THEY FOUND IT WAS FRAUDULENT, JUST AS I DID. THAT WAS --

MS. CHARLICK: WELL, I DON'T --THE COURT: THAT IS MYSTIFYING TO ME THAT THEY WOULD STRIKE HIS FINANCIAL AFFIDAVIT AND THEN STILL LET HIM OUT.

MS. CHARLICK: I DON'T THINK THAT THEY SAID HIS FINANCIAL AFFIDAVIT WAS FRAUDULENT, YOUR HONOR.

THE COURT: THEY STRUCK IT. THEY STRUCK IT BASED ON THE GOVERNMENT'S CONTENTION THAT IT WAS FRAUDULENT. AND I FOUND IT WAS. I FOUND THAT HE DIDN'T REVEAL MONEY THAT HE HAD, THAT HE HAD COMING IN, THAT HE ARRANGED TO HAVE COME IN. YOU KNOW, MY GOSH, I THINK I SAID TO HIM AT THE TIME YOUR ASS IS ON FIRE AND YOU ARE STANDING IN FRONT OF ME HANDING ME A PHONY FINANCIAL DECLARATION?

THAT IS NEITHER HERE NOR THERE, MS. CHARLICK. AGAIN, THEY HAVE RULED ON THAT, AND I ACCEPT THAT RULING. THIS IS A NEW DAY, A NEW SET OF CIRCUMSTANCES HERE. AND THAT IS WHAT I AM ASKING YOU TO ADDRESS AND DEAL WITH.

MS. CHARLICK: I DO THINK, THOUGH, THIS ISSUE REMAINS AS SUBSTANTIAL, ESPECIALLY IN LIGHT OF THE FACT THAT STRAUB ITSELF WAS REVERSED THE SECOND TIME AROUND. AND I THINK IT DID GO BACK TO THE SAME PANEL.

THE COURT: THAT IS TRUE. BUT AGAIN, I DON'T KNOW IF YOU WILL ACKNOWLEDGE THIS, STRAUB WAS A STARKLY DIFFERENT SCENARIO THAN HERE. STARKLY DIFFERENT.

YOU HAVE IDENTIFIED, MR. CAHN HAS IDENTIFIED THE DIFFERENCE. YOU KNOW, I AGREE WITH YOUR CHARACTERIZATIONS. IF YOU HAVE GOT A WITNESS WHO SAYS I NEVER SAID THAT, ANOTHER WITNESS SAYING YES YOU DID, AND IT GOES TO THE HEART OF THE CASE, WHO SHOT THE VICTIM IN THAT CASE. THAT IS COMPLETELY DIFFERENT HERE. THIS THING IS ON THE OUTER BOUNDARIES.

MR. WILLIAMS' TESTIMONY IS AT THE PERIPHERY. HE IS AT, YOU KNOW, PLUTO.

MS. CHARLICK: BUT IT IS A DIFFERENT KIND OF CASE, JUDGE. IT IS A DIFFERENT CASE. IT IS AN HONEST SERVICES FRAUD, BRIBERY, CIRCUMSTANTIAL CASE. THAT ONE WAS, LIKE, A MURDER.

THE COURT: I KNOW.

MS. CHARLICK: SO IT IS VERY, VERY DIFFERENT, SO THE INFERENCES ARE DIFFERENT.

THE COURT: YEAH. EASIER TO CONCEPTUALIZE DIRECT CONTRADICTION IN A BLOOD-AND-GUTS CASE LIKE THAT.

MS. CHARLICK: YES, AND MUCH EASIER AND SO --THE COURT: HERE IS THE PROBLEM, HERE IS THE PROBLEM YOU HAVE. I MEAN, AT MOST THE ARGUMENTS YOU HAVE MADE, I THINK, GO TO THE CONSPIRACY COUNT, THEY DON'T GO TO THESE OTHER THINGS. THEY REALLY DON'T. THEY DON'T SLOP OVER TO WHETHER HE BRIBED CUNNINGHAM; HE DID. THE JURY FOUND HE DID. HE DOESN'T HAVE ANY RELIEF ON THAT.

AND THE APPELLATE COURT SAYS, YOU KNOW, COMBS ISN'T A VERY IMPORTANT WITNESS. THE GOVERNMENT'S CASE IS STRONG, SUBSTANTIAL, AMPLE, OVERWHELMING, NOT A CLOSE CASE.

AND, YOU KNOW, YOU WANT TO TALK ABOUT LAW OF THE CASE, THAT IS LAW OF THE CASE. SO ALL OF THOSE THINGS HAVE BEEN DECIDED. YOU HAVE GOT A TEENY TINY SLIVER OF HOPE HERE THAT THE COURT OF APPEALS WILL FIND THAT I MADE A CLEAR ERROR IN THESE FINDINGS, AFTER LISTENING TO THE WITNESSES, CANVASSING THE RECORD, READING THE CASES CAREFULLY.

I DON'T WANT TO SOUND PRESUMPTUOUS ABOUT THIS, AND I AM CERTAINLY NOT ARROGANT. AS I TOLD YOU, I KNOW STRANGER THINGS HAVE HAPPENED WITH MY RULINGS IN THE COURT OF APPEALS BEFORE. BUT I HAVE TO MAKE A JUDGMENT HERE UNDER 3143, AND I JUST DON'T SEE THAT HE HAS A FAIRLY DEBATABLE ISSUE ON THIS. I DON'T. I DON'T SEE THAT HE IS LIKELY TO PREVAIL, AND NONE OF THE OTHER EXCEPTIONS TO PRESUMPTION -- TO THE PRESUMPTION OF DETENTION APPLY HERE.

THAT IS PUTTING ASIDE THE FACT THAT HE IS CONTINUING TO ACT AS TRUSTEE EVEN THOUGH HE IS A CONVICTED OF BRIBER.

MS. CHARLICK: YOUR HONOR, THE COURT OF APPEALS OPINIONS THAT THEY ASSERTED ABOUT THE STATE OF THE EVIDENCE WERE NOT IN THE CONTEXT OF DECIDING THE STRAUB ISSUE.

THE COURT: YOU ARE RIGHT.

MS. CHARLICK: AND I THINK THAT THE REASON IS BECAUSE ONCE WILLIAMS TESTIFIES, IT IS A TOTALLY DIFFERENT BALLGAME. AND THE EVIDENCE IS NOT GOING TO BE SO OVERWHELMING. IT IS CERTAINLY NOT GOING TO BE JUST MR. WILKES HANGING OUT THERE BY HIMSELF. SO I DO THINK THAT IT IS A COMPLETELY DIFFERENT STATE ONCE WILLIAMS TESTIFIES AND THOSE STATEMENTS DON'T MATTER. AND I THINK THE JURY --

THE COURT: I DISAGREE WITH YOU ON THAT. HERE IS THE QUESTION. YOU WANT THEM TO CALL WITNESSES IN SUPPORT OF THE ACCUSATIONS THEY HAVE MADE ABOUT HIM -- I MEAN, IT SEEMED TO ME IMPLICIT AT LEAST IN YOUR RESPONSE THAT YOU ACKNOWLEDGE THAT HE DID THOSE THINGS. BUT YOU SAID, LOOK, THERE IS AN EXPLANATION AND HE HAS PAID THE MONIES BACK, AND SO ON AND SO FORTH. SO I ASSUME THAT, YOU KNOW, THAT HE CONTINUED TO ACT AS TRUSTEE OF THOSE ACCOUNTS.

MS. CHARLICK: YOUR HONOR, I DON'T --THE COURT: MAYBE HE DIDN'T.

MS. CHARLICK: I AM NOT GOING TO BE CONCEDING OR ADMITTING ANYTHING ON THESE POINTS.

THE COURT: ALL RIGHT.

MS. CHARLICK: BUT I DO WANT TO REMIND THE COURT THAT THE JURY DELIBERATED FOR FOUR DAYS IN THIS CASE. IT WASN'T SO CLOSE. AND YOU, YOURSELF, TOLD MR. GERAGOS THAT HE HAD THE JURY ON THE ROPES FOR THE FIRST TEN WITNESSES.

THE COURT: I THOUGHT HE DID. BUT, YOU KNOW, LOOK, THE COURT OF APPEALS SAID IT IS NOT A CLOSE CASE. THAT IS WHAT THEY SAID, IT WASN'T A CLOSE CASE. THEY SAW IT VERY DIFFERENTLY. THERE ARE VERY EXPERIENCED JURISTS ON THAT PANEL. JUDGE ALARCON, HE HAS BEEN AROUND FOR A LONG TIME, HE HAS SEEN A LOT OF THINGS. HE WROTE THE MAJORITY OPINION THERE.

SO, MR. HALPERN, YOU SAID YOU HAVE WITNESSES ON THAT? MR. HALPERN: YES, YOUR HONOR, IF YOU ARE TALKING ON THE SECOND POINT.

WE AGREE WITH EVERYTHING THE COURT SAID ON 3143, WE THINK YOU MUST DO IT UNLESS YOU MAKE A FINDING THAT YOUR OWN FACTUAL FINDINGS ARE CLEARLY ERRONEOUS. CONTRARY TO WHAT MS. CHARLICK SAYS, OR MAYBE NOT, BECAUSE CLEARLY THERE ARE MIXED QUESTIONS INVOLVED. BUT STRAUB IS CLEAR, AS THE COURT NOTED.

IT SAYS, ON 1156, FACTUAL FINDINGS UNDERLYING THE DISTRICT COURT'S RULING ARE REVIEWED FOR CLEAR ERROR.

IT IS NOT AMBIGUOUS, IT IS CRYSTAL CLEAR. SO WE DON'T EVEN GET TO THE SECOND ISSUE UNLESS YOU FIND -- AND I UNDERSTAND MS. CHARLICK'S POSITION. IT IS VERY DIFFERENT FROM THE ONE THE COURT IS TAKING, SHE HAS A VERY DIFFERENT VIEW OF THE FACTS, AS THE COURT DOES.

THE COURT: I KNOW, I KNOW. AND NECESSARILY SO. NECESSARILY SO.

MR. HALPERN: I TAKE NO UMBRAGE ABOUT THAT, BUT AT THE END OF THE DAY IT IS THE COURT'S OPINION THAT ARE REVIEWED, IT IS THE COURT'S FACTUAL FINDINGS THAT ARE ACCEPTED HERE AND REVIEWED, UNLESS THEY ARE CLEARLY ERRONEOUS.

THE COURT: I MADE MY RULING ON THAT. I DON'T THINK HE QUALIFIES, AT THIS POINT, UNDER THE STANDARD OF 3143. I DON'T THINK THERE IS A FAIRLY DEBATABLE ISSUE, GIVEN THE THOROUGHNESS OF THE FINDINGS AND THE STANDARD OF REVIEW THAT APPLIES, AND THE NARROWNESS OF WHAT IS GOING TO BE IN FRONT OF THE COURT OF APPEALS. HE IS NOT GOING TO BE ABLE TO RELITIGATE ALL OF THOSE OTHER ISSUES.

SO LET'S GO TO THE SECOND BASIS FOR YOUR MOTION.

MR. HALPERN: THE SECOND BASIS, YOUR HONOR, GOES TO CHARACTERIZATION USED BY MS. CHARLICK, ADOPTED BY THE COURT, URGED ON PRETRIAL, THAT THIS WAS A LOAN.

EVEN ASSUMING HE COULD BORROW IT, MONEY FROM IT -- WHICH I THINK IT IS CLEAR HE CAN'T UNDER THE TERMS OF THE PLAN.

THE COURT: IF IT IS THE PROCEEDS OF A 401K, EMPLOYEE BENEFIT PLAN, HE CANNOT. THAT IS SELF-DEALING. HE CAN'T USE IT HIS OWN BENEFIT, AT ALL. HE HAS TO ACT AS A FIDUCIARY FOR THE BENEFIT OF THE EMPLOYEES WHOSE MONEY IT WAS. I GET THAT. THOSE ARE SETTLED PRINCIPLES OF LAW.

NOW, SHE IS DISPUTING THAT YOU CAN PROVE THAT. YOU HAVE A WITNESS THAT CAN SAY --

MR. HALPERN: WE HAVE TWO WITNESSES, YOUR HONOR, THAT CAN TESTIFY AS TO THEIR DISCUSSIONS WITH FOUR OF THE INDIVIDUALS INVOLVED IN THIS PLAN WHO WILL TESTIFY --

THE COURT: ALL RIGHT. CALL THE WITNESSES.

MR. HALPERN: WE CALL SPECIAL AGENT JAMIE HARRISON. THE CLERK: PLEASE RAISE YOUR RIGHT HAND.

YOU DO SOLEMNLY SWEAR THAT THE EVIDENCE YOU SHALL GIVE IN THE CAUSE NOW BEFORE THIS COURT SHALL BE ...


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