[00:00:08] Speaker 00:
Good morning, may it please the court.

[00:00:10] Speaker 00:
My name is Segal Lakiti, and I'm here to represent the appellant, Stephen McGonigal.

[00:00:15] Speaker 00:
Please be advised, I would like to reserve five minutes for my rebuttal.

[00:00:18] Speaker 00:
Just watch the clock.

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

[00:00:20] Speaker 00:
Understood, John.

[00:00:22] Speaker 00:
This case presents critical issues regarding the improper application of third party funds towards restitution, the procedural and substantive reasonableness of his sentence, and lastly, the constitutionality of 18 USC 1028A.

[00:00:38] Speaker 00:
I'll address each issue in turn, focusing on legal errors that demand reversal.

[00:00:43] Speaker 00:
Regarding the first issue and proper application of third party funds towards restitution, Your Honor, here the district court abuses discretion when applied the entirety of Mr. McGonigal's $300,000 bond towards his restitution.

[00:00:57] Speaker 00:
It is undisputed that the funds were owned by Mr. McGonigal, his wife Janelle Smith, and his friend Julie Tolbert.

[00:01:05] Speaker 00:
under 28 u.s.

[00:01:06] Speaker 03:
But he represented otherwise and his wife signed it when he signed the bond and the district court's findings were you sold it for 1.2 million that's four hundred thousand dollars apiece this is only three hundred thousand dollars so no problem the other co-owners of the property have got their money and this is his share so what's wrong with those findings don't we have to find those findings are clearly erroneous

[00:01:28] Speaker 00:
Yes, your honor.

[00:01:29] Speaker 00:
My understanding is that one, when Mr. McGonigal signed the affidavit, it was without a counsel present.

[00:01:34] Speaker 03:
Two, that the... Yeah, but this is his house, and it was his wife's house, and she signs it.

[00:01:41] Speaker 03:
Well, the fact that they didn't have counsel present, I mean, you've got to be able to know what the value of a house is and whether you've got a full share in it or not.

[00:01:49] Speaker 00:
As you articulated, Your Honor, his wife also signed for the House and the surety bond.

[00:01:54] Speaker 00:
The court did not allow counsel to make an argument or to issue a finding of fact regarding whose money this was.

[00:02:05] Speaker 00:
For those reasons and the lack of clarification of the ownership of the funds, and summarily relying on the affidavit, we submit that they failed to resolve the factual dispute in line with United States v. Andrews.

[00:02:17] Speaker 00:
Their summer rejection of a meaningful opportunity to determine ownership was reversible error.

[00:02:24] Speaker 00:
Your Honor, now I would like to discuss the second issue, procedural and substantive and reasonableness of the sentence, unless, Your Honor, Judge Bybee, you have further questions regarding.

[00:02:32] Speaker 00:
Thank you.

[00:02:34] Speaker 00:
Now, in regards to the procedural and substantive unreasonableness, there are three grounds here we submit.

[00:02:41] Speaker 00:
One, the district court committed procedural error in calculating the loss amount.

[00:02:45] Speaker 00:
Two, the court erred in applying the four-level aggravating role.

[00:02:49] Speaker 00:
And lastly, the sentence was substantively unreasonable.

[00:02:54] Speaker 00:
Now, in regards to the first issue, the first sub-issue committed procedural error in calculating the loss amount, here the court applied a 20-level enhancement under 2B1.1B1K.

[00:03:06] Speaker 00:
Now, the actual loss in the case was significantly lower.

[00:03:10] Speaker 00:
Your honor, we submit that it was warranting a 14-level enhancement as opposed to the 21-level enhancement.

[00:03:18] Speaker 00:
Now, the government attempted to justify the loss amount by retroactively applying the 827 Amendment to 2B1.1.

[00:03:28] Speaker 00:
Now, that retroactive application is unconstitutional, Your Honor.

[00:03:32] Speaker 00:
The amendment which clarifies the intent of loss can be included in the calculation, do not take effect until November 1st, 2024, seven months after McGonigal's sentencing.

[00:03:42] Speaker 03:
So let's suppose that, I'm still trying to figure out what the government should have charged with.

[00:03:51] Speaker 03:
Let's suppose that he went to the IRS, filed all of these fraudulent things all across the country, and didn't get a penny.

[00:03:57] Speaker 03:
The IRS somehow sort of linked him to all of these things and said, holy Toledo, there's an attempted fraud here going on on a massive scale.

[00:04:06] Speaker 03:
What should the government have charged your client with?

[00:04:08] Speaker 03:
Could they have charged him under this statute or they have to charge him with something else such as attempt?

[00:04:14] Speaker 03:
Attempted fraud.

[00:04:14] Speaker 00:
Are you asking if the government should have charged him under wire fraud and conspiracy to the fraud?

[00:04:19] Speaker 03:
Well, I'm wondering whether there's a difference, whether we have to take into account here

[00:04:25] Speaker 03:
that the loss of the government, that the district court found of 9.5 plus million includes the loss that he tried, that he attempted, the money he attempted to get out of the IRS, but did so unsuccessfully.

[00:04:40] Speaker 03:
He successfully defrauded them of 1.2 million.

[00:04:44] Speaker 03:
But the government said, and the district court adopted and said, yeah, we're going to take the higher amount because you filed thousands of these claims

[00:04:52] Speaker 03:
fraudulent claims all across the country.

[00:04:55] Speaker 03:
You defrauded all kinds of people.

[00:04:57] Speaker 03:
And so do we get to take into account what he tried to do?

[00:05:03] Speaker 03:
And if the government had interdicted this before he got a single penny out of any source of revenue, either state or federal, does that mean that there's no loss?

[00:05:14] Speaker 00:
The question appears to me, I understood your question to say, if the government was correct in applying the intended loss, Your Honor?

[00:05:23] Speaker 03:
Well, the district court adopts the 9.5, right?

[00:05:25] Speaker 00:
Yes.

[00:05:25] Speaker 03:
Okay.

[00:05:26] Speaker 03:
And that includes all of the, that includes the amounts of all of the fraudulent... Actual intended, yes.

[00:05:33] Speaker 03:
...files that he filed with the IRS and with state, and with state internal revenue as well.

[00:05:40] Speaker 03:
The only reason that he didn't collect 9.5 is because they figured out that he was that he was engaged in this fraud So how would the if the government had interdicted him if they stopped him before he collected a single penny?

[00:05:55] Speaker 03:
What should they have charged him with could they have charged him under this statute?

[00:05:59] Speaker 03:
Or does it is does his loss become zero because he didn't collect anything.

[00:06:05] Speaker 00:
That's a great question your honor and

[00:06:06] Speaker 00:
Now, unfortunately, that is not the issue presented before us.

[00:06:11] Speaker 04:
Well, it may be because it goes to whether or not the intended loss can, in this context, be taken as the appropriate measure.

[00:06:21] Speaker 04:
I mean, if we accept the proposition that, I mean, you haven't responded to whether it have to be charged under a different statute, if we would accept the proposition that what it was charged with could cover

[00:06:35] Speaker 04:
that as a criminal act, isn't that what we're struggling with to decide whether the larger figure, the nine point whatever it was, can properly be counted?

[00:06:48] Speaker 00:
Your Honours, now if the government had charged him with attempted conspiracy to defraud the government or attempted wire fraud,

[00:06:55] Speaker 00:
and then had also charged him with the conspiracy itself and the subsequent wire fraud, they could have pursued that at trial and, of course, it could have merged.

[00:07:03] Speaker 04:
Well, same conspiracy.

[00:07:05] Speaker 04:
I mean, don't charge me.

[00:07:07] Speaker 04:
He did somewhat succeed.

[00:07:09] Speaker 04:
It's not like there was no criminal misconduct accomplished at all.

[00:07:15] Speaker 04:
Why isn't that encompassed by a conspiracy charge, just because you didn't succeed in all aspects of your conspiracy?

[00:07:23] Speaker 00:
Well, I'm truly arguing in terms of how the intended loss application in the retroactive amendment was applied, Your Honors.

[00:07:31] Speaker 00:
Now, if this case was before a court today, we all know that actual intended loss are both applied.

[00:07:38] Speaker 00:
There is no question about it whatsoever.

[00:07:41] Speaker 00:
However, at the time that this case was heard, that was not the case.

[00:07:46] Speaker 04:
Well, there was some uncertainty

[00:07:50] Speaker 04:
Looking at it from today, we understand that it wasn't clear at the time because the application note hadn't been converted yet.

[00:07:58] Speaker 04:
But particularly given the sentence that was imposed here, the calculations made by the district court, the district court statement that it was going to be the same either way, recognizing the uncertainty, at least in his mind, as to what the law was, and that the sentence imposed wasn't above

[00:08:20] Speaker 04:
the guideline under either calculation, indeed was substantially below the guideline based on the nine million calculation.

[00:08:29] Speaker 04:
I'm having trouble figuring out how in the end it made any difference.

[00:08:33] Speaker 00:
Well, Your Honor, in terms of how it made any difference, we do submit that there were numerous issues that cumulatively together highlight the procedural and substantive unreasonableness.

[00:08:44] Speaker 00:
My argument is not based purely on this calculating of loss.

[00:08:48] Speaker 00:
However,

[00:08:49] Speaker 00:
the application of that retroactive amendment, or the retroactive application of the amendment, would definitely violate the ex post facto clause, Your Honor.

[00:08:59] Speaker 04:
So we accept that.

[00:09:00] Speaker 04:
But my question is, at the time that he entered the sentence, he enters the sentence, he says this calculation

[00:09:11] Speaker 04:
Apparently, in his mind, it's sufficiently uncertain.

[00:09:13] Speaker 04:
He calculates it either way and says he'd give the same sentence either way.

[00:09:18] Speaker 04:
And the sentence isn't higher.

[00:09:21] Speaker 04:
I mean, we've got cases where you can fairly say, well, but the sentence turned out to be higher than the guideline range.

[00:09:27] Speaker 04:
And we want to make sure the court sentences with the guideline range in mind.

[00:09:31] Speaker 04:
But in this case, it's markedly lower than the guideline range.

[00:09:36] Speaker 04:
I had it written down someplace.

[00:09:39] Speaker 04:
was way lower than the guideline range with a 9 billion calculation.

[00:09:44] Speaker 04:
And I think it was within the range for the lower calculation.

[00:09:49] Speaker 04:
So what reason would we have to think that your client was prejudiced, that the sentence wouldn't have turned out to be exactly the same if the judge had accepted the argument that the lower amount was the appropriate amount to use?

[00:10:03] Speaker 00:
Well, like I said, my issues here, as we present in our brief, are cumulative in terms of the procedural substantive unreasonableness.

[00:10:10] Speaker 00:
discussing that sentence, I would submit that although your argument is that the ranges weren't the only thing taking into account, the overall sentence of 120 months when compared with the co-defendants clearly also supports that was substantially unreasonable.

[00:10:26] Speaker 04:
Well, this is a guy trying to get away with nine million dollars.

[00:10:29] Speaker 04:
Somehow it doesn't seem quite so unreasonable if you look at the context of what the intended loss

[00:10:35] Speaker 04:
or what his aim was, even if at a time that actual law should have been the measure.

[00:10:40] Speaker 04:
And he did get away with, what, $1.2 million?

[00:10:43] Speaker 04:
So I'm not sure what's so substantially unreasonable.

[00:10:46] Speaker 00:
Well, Your Honor, first and foremost, Mr. Waldrop, who is clearly involved, even by his own admission, only received a year and a day.

[00:10:57] Speaker 00:
as opposed to the 120 months our client received, Your Honor.

[00:10:59] Speaker 00:
I think by your own admission that, whether it's... I haven't admitted anything, but... No, sorry.

[00:11:04] Speaker 00:
But by your own statement regarding the 9.1 million, if that was the leading factor in determining this entire sentence, Mr. Waldrop's sentence would have reflected similarly.

[00:11:14] Speaker 00:
I do submit that

[00:11:17] Speaker 00:
Mr. Waldrop sentence was 10% of Mr. McGonigals, but Mr. Waldrop is the defendant here whose behavior was articulated and found by majority of the witnesses in this case.

[00:11:29] Speaker 02:
I could ask just a slight variant of Judge Bybee's question.

[00:11:32] Speaker 02:
Suppose there's defendant A and he tries, has this tax return scheme and tries, files thousands of returns to get nine million dollars, but someone's tipped off, someone tips off the law enforcement, he only succeeds in getting $90,000 from the government.

[00:11:49] Speaker 02:
Then suppose there's defendant B who perpetrates the exact same scheme, but only submits one

[00:11:56] Speaker 02:
fraudulent tax return gets $90,000.

[00:11:58] Speaker 02:
I mean, isn't defendant A more culpable than defendant B?

[00:12:02] Speaker 02:
Even though the actual loss is the same, $90,000 on both, but has intended try to get $9 million.

[00:12:08] Speaker 02:
Wouldn't defendant A be more culpable and should be subject to higher

[00:12:14] Speaker 00:
Well, my personal opinion clearly differs from the guidelines because I still have issues with the actual versus intended loss.

[00:12:22] Speaker 00:
I would submit no, they're both $90,000.

[00:12:24] Speaker 00:
Let's look at the actual harm that was suffered, and they're both being held accountable for that, and they're both caught by perpetrators before further harm was suffered.

[00:12:32] Speaker 00:
So I would submit neither one is more culpable than the other, Your Honor.

[00:12:37] Speaker 03:
Does the fact that this was charged as a conspiracy change that theory at all?

[00:12:41] Speaker 03:
It's an inchoate climb.

[00:12:44] Speaker 03:
And so why don't we get to why don't we get to look at the whole scheme rather than rather than just the just the actual money they collected Well your honor in terms of looking at the whole scheme to more people and furtherance of a criminal event The whole scheme was looked at and considered.

[00:13:02] Speaker 00:
I'm not truly understanding your question as relates to how that separates with the amount received in terms of conspiracy and

[00:13:12] Speaker 00:
If the goal of the conspiracy was to obtain money, and they obtained $90,000 as opposed to $1.2 for trying to stay in the example, the conspiracy still occurred.

[00:13:27] Speaker 00:
I'm kind of confused where your question is.

[00:13:30] Speaker 00:
I understand that an attempt would merge.

[00:13:34] Speaker 03:
Yeah, I'm still hung up a little bit over the question of how much you've attempted and what happens if the government... You know, we have a number of cases in which you have, for example, a sting, and the government stops it before money actually changes hands.

[00:13:50] Speaker 03:
We have to have some way of sort of valuing what this was, right?

[00:13:55] Speaker 00:
Well, if they were charged with attempt, then I would say the intended loss

[00:14:01] Speaker 00:
It would make sense to look at the intended loss.

[00:14:03] Speaker 03:
That's why I started off by asking you what happens, you know, should they have charged this as an attempt and how would that have changed things?

[00:14:10] Speaker 00:
Fair, yes, Your Honor.

[00:14:11] Speaker 00:
Back to that first question, if there was an attempt, they would have to look at intended loss because there was no actual loss, because if there was actual loss, it would have gone past the attempt.

[00:14:24] Speaker 03:
So let me take you in a slightly different direction.

[00:14:26] Speaker 03:
I think it's one that maybe Judge Clifton asked about.

[00:14:29] Speaker 03:
And that is that Judge Selna, I mean, we've got the problem with between that.

[00:14:34] Speaker 03:
We've got some conflicts in the circuits over intended versus actual loss.

[00:14:38] Speaker 03:
And now we have a change in the guidelines, so the whole question is sort of moot, except for these last trailing cases.

[00:14:45] Speaker 03:
But Judge Sullivan says, it doesn't matter.

[00:14:47] Speaker 03:
Whether I calculated this as 1.9 or 9.5, I've taken into account and I've given you a pretty good variance.

[00:14:54] Speaker 03:
I've varied down, and my sentence would be the same under either one.

[00:14:59] Speaker 03:
So what's the problem?

[00:15:00] Speaker 00:
Your honor, I would say there is a cumulative of factors for the unreasonable sentence.

[00:15:04] Speaker 00:
The loss is not the only issue that we've submitted to this court.

[00:15:07] Speaker 00:
I understand that the loss is the one that we spent the most time discussing.

[00:15:10] Speaker 00:
However, I believe that when compared with the other defendant's sentences, as well as the low-risk recidivism and his limited role in the scheme, on the personal principle, the court should vacate the sentence or remand for re-sentencing.

[00:15:22] Speaker 00:
Now, if I may, I only have five minutes remaining, and I would of course like to discuss what I'm sure we're all really here for today, the 1028A case.

[00:15:32] Speaker 00:
Would you like me to continue with 1028A, or stick with our present issue?

[00:15:38] Speaker 03:
And if you think you've got something there that tells us that this guy was not using somebody else's ID, I'd be really, really interested to hear it.

[00:15:47] Speaker 03:
Because I've seen the record, and the record is pretty damning.

[00:15:50] Speaker 00:
Your Honor, while I understand that this is fun from an academic standpoint, in this case, the IDs were ancillary, Your Honor.

[00:16:00] Speaker 00:
The tax returns filed here, where I will submit the wire fraud, is that predicate offense, Your Honor.

[00:16:07] Speaker 00:
Now, if they had submitted tax returns for themselves with inflated numbers, the conspiracy and the wire fraud could still have been charged, Your Honor.

[00:16:18] Speaker 04:
But they didn't do that.

[00:16:20] Speaker 04:
They used other people's names.

[00:16:22] Speaker 00:
Yes, Your Honor.

[00:16:23] Speaker 04:
It's hard to escape the conclusion that the use of other people's names didn't have something to do with the scheme.

[00:16:30] Speaker 00:
Yes, Your Honor.

[00:16:31] Speaker 00:
However, we are focused in our arguments on the vagueness of the statue.

[00:16:36] Speaker 00:
Vague on its face and vague as applied.

[00:16:39] Speaker 00:
Now, in terms of vague on its face, the vagueness is evidence, especially in this case.

[00:16:45] Speaker 00:
If we're going to look at Dublin,

[00:16:47] Speaker 04:
In his concurrence, Gorsuch... Is it Justice Gorsuch expressed concern about vagueness, but his colleagues didn't sign on to that?

[00:16:54] Speaker 00:
Why should we?

[00:16:56] Speaker 00:
Because Justice Gorsuch had a great point, Your Honor, that this Court should sign on to in order to have it reconsidered, Your Honor.

[00:17:04] Speaker 04:
If the rest of his colleagues signed on to it, who are we supposed to follow?

[00:17:09] Speaker 00:
Well, Your Honor, unfortunately, that is not the job duty before me.

[00:17:14] Speaker 00:
I do commend you for the insurmountable hurdle that is before you, and I am very privileged to watch you guys decide that issue.

[00:17:26] Speaker 00:
We're honored.

[00:17:30] Speaker 00:
In terms, and I do submit that the ambiguity violates the due process.

[00:17:35] Speaker 00:
In terms of vague as applied, Your Honor, here the jury was never instructed on which specific identifiers they had to find were unlawfully used.

[00:17:44] Speaker 00:
The lack of clarity definitely prejudiced Mr. McGonigal because different jurors could have convicted based on entirely different theories.

[00:17:51] Speaker 00:
The government, even in its argument, is not, that 1028A is not unconsciously vague, fails for a simple reason.

[00:17:57] Speaker 00:
The statute lacks clarity on what constitutes a means of identification.

[00:18:00] Speaker 00:
Even the government's own brief alternates between the means of identification as names, social security numbers, or undefined sensitive personal data.

[00:18:09] Speaker 00:
This inconsistency, Your Honor, highlights the statute's failure to provide fair notice of what conduct it criminalizes, leaving jurors to guess and inviting arbitrary enforcement.

[00:18:19] Speaker 00:
Now, Your Honor, for these reasons, I do submit and the reasons written in our brief that the statute's unconsciously vague, both on its face and as applied,

[00:18:28] Speaker 00:
And in sum, Your Honor, the district court's errors in convicting, sentencing, and applying bond funds demand reversal.

[00:18:33] Speaker 00:
I respectfully request that this court vacate Mr. McGonigal's convictions and sentence and remand for further proceedings consistent with the law.

[00:18:40] Speaker 02:
Great, thank you.

[00:18:59] Speaker 01:
Good morning, Your Honors, and may it please the Court, Colin Scott, on behalf of the United States.

[00:19:04] Speaker 01:
This Court should affirm the convictions and affirm the sentence.

[00:19:08] Speaker 01:
I want to start where my colleague on the other side of the aisle ended, which is the purported vagueness of 1028 Big A.

[00:19:16] Speaker 01:
To start, this argument was waived before the district court.

[00:19:20] Speaker 01:
Under Federal Rule of Criminal Procedure 12b3, any argument regarding the sufficiency of the indictment, whether it's failure to state a claim, needs to be brought before trial, unless it's excused for good cause.

[00:19:33] Speaker 01:
And here, there's no argument, good or otherwise, for why Mr. McGonigal could not have brought the argument relying on Dubin before trial began in this case, which started in November of 2023.

[00:19:45] Speaker 01:
The Dubin concurrence was available in July of that year, so there was at least four or five months before trial started in which defense counsel could have brought a motion under 12b3 to dismiss this portion of the indictment.

[00:20:03] Speaker 01:
They failed to do so, so this court should find the argument was waived.

[00:20:07] Speaker 01:
The court does not want to go to a waiver.

[00:20:10] Speaker 01:
I think, as my colleague on the other side of the aisle stated, the insurmountable hurdle in finding 1028 Big A to be unconstitutionally vague.

[00:20:20] Speaker 01:
As Judge Clifton pointed out, there's no basis for this court to do that.

[00:20:24] Speaker 01:
Judge Gorsuch's loan concurrence

[00:20:27] Speaker 01:
was explicitly rebutted by a supermajority of the Supreme Court in that decision.

[00:20:33] Speaker 01:
There's no basis to find that the statute as a whole is unconstitutionally vague or specifically, as Judge Bybee pointed out, as to this defendant as applied.

[00:20:44] Speaker 01:
This is clearly aggravated identity theft.

[00:20:47] Speaker 01:
The defendant stole thousands of identities, used them to file fraudulent tax returns, and then profited.

[00:20:54] Speaker 01:
This should be an easy issue for the court.

[00:20:58] Speaker 01:
I want to now briefly address the issue of loss amount and the question that Judge Bybee raised of

[00:21:05] Speaker 01:
Do we get to take into account what he tried to do?

[00:21:09] Speaker 01:
And I think the answer has to be yes.

[00:21:12] Speaker 01:
The guidelines specifically allow this court to consider in looking at 1B1.3, which is the portion of the guidelines that kind of inform how district court judges are supposed to evaluate calculating the offense level, specifically tells district courts to take into account all harms and all objects of the harm.

[00:21:35] Speaker 01:
And when reading that in conjunction with 2B1.1, it becomes clear that a reasonable interpretation of loss encompasses both actual and intended loss.

[00:21:49] Speaker 01:
So the government's contention here is that there was no error by the district court, let alone plain error, considering this court's holdings in Hackett and also recently in Yaffa.

[00:21:59] Speaker 01:
uh... regarding the ambiguity of the term loss uh... in light of uh... kaiser uh... there's no issue with the district court judge applying intended loss but for a yes do you have any clarity on how many more at least in your office how many more these cases are in the pipeline because the past year

[00:22:19] Speaker 02:
had under five or six and every single time we've done an unpublished case saying this is probably the you know given the 2024 amendment this is it but he keeps you know they keep coming yeah it's it's it's like I don't know like Brett Farr retiring he's back again back again you think it's over but it's not I mean it's so I mean I'm wondering should we you know write an opinion on this because they just you know if you can just

[00:22:43] Speaker 02:
if you have any clarity on how many more we have of these cases.

[00:22:46] Speaker 02:
Because it's a difficult issue, and we struggle over it.

[00:22:48] Speaker 02:
And in the end, we end up doing a very short unpublished opinion memorandum thinking, this is it.

[00:22:55] Speaker 01:
Your honor, I unfortunately can't provide a panel with clarity on how many more cases in the central district of California involve this issue.

[00:23:03] Speaker 01:
I imagine that it truly is dwindling at this point, given that this is a sentencing from 2024.

[00:23:08] Speaker 01:
We're at the tail end, but I can't presume to tell the panel how many more are left.

[00:23:13] Speaker 01:
But regardless, to get to Judge Clifton's point, there is no prejudice here.

[00:23:20] Speaker 01:
The district court judge, you have a very careful district court judge who issued a tentative sentencing memorandum, walked through each of the issues, as the panel noted, said,

[00:23:29] Speaker 01:
Regardless of whether I consider intended loss or actual loss my sentence is going to be the same under a plain error review standard There is no prejudice and there is no plain error for this court to reverse on there are no further questions So your colleague who points out that he has other arguments with regard to the reasonableness of the sentencing and although I'm suddenly blanking on his name there was a

[00:23:51] Speaker 04:
The other person involved who got a much lower sentence and he suggests that that demonstrates the unreasonableness of the sentence that was imposed even if it was either below or within the guidelines depending how they're calculated.

[00:24:05] Speaker 04:
What's your response?

[00:24:06] Speaker 01:
Yes, Your Honor.

[00:24:07] Speaker 01:
So I think two points.

[00:24:09] Speaker 01:
One is that the issue with unwanted sentencing disparities has to do with national sentencing disparities regarding similar situations.

[00:24:17] Speaker 04:
It comes up in the same case in the sense that you anticipate that people convicted as part of the same conspiracy probably wind up being treated the same way with noted differences between the leaders and organizers and so forth.

[00:24:30] Speaker 04:
But is there an explanation for why the sentences are different here?

[00:24:35] Speaker 01:
Yes, your honor.

[00:24:36] Speaker 01:
So based on the record before the trial court, the two defendants, the co-defendants who testified against defendant McGonigal at trial quickly accepted responsibility, worked with the government, testified at trial, fully accepted their role in the conspiracy, which

[00:24:50] Speaker 01:
The district court judge was presented with that sentencing was minor they took direction from the defendant 20 years of tax experience and preparation he told the co-defendants what to do and so given their differing roles in the conspiracy the stage at which they pled guilty and their role and accepting responsibility, I think the

[00:25:11] Speaker 01:
Difference disparity between the sentences was was warranted You also have a defendant who took the stand and in a district court judges estimation lied There was an obstruction of justice enhancement that was applied.

[00:25:23] Speaker 01:
So I think on that record its refusal to really accept responsibility Belays or underscores why the district court came out and sensing the way it did which was below both probation and the government's recommendation and as your honor noted a Guideline sentence is presumptively reasonable.

[00:25:39] Speaker 01:
I think the same analysis applies for a below guideline sentence

[00:25:41] Speaker 01:
So briefly, moving on from loss, I do want to address the restitution issue that was before the court at the beginning of the hearing.

[00:25:52] Speaker 01:
My colleague on the other side of the aisle says that it's undisputed that the wife owned the money.

[00:25:56] Speaker 01:
I don't think that is quite accurate of a characterization of the disposition of the bond funds.

[00:26:02] Speaker 01:
As Judge Bybee pointed out,

[00:26:04] Speaker 01:
the district court judge clearly recognized that if you sell a $1.2 million house and there are three participants, you're going to net more than $400,000 each between the three individuals.

[00:26:16] Speaker 01:
And so the question of, was this $300,000, which defendant conveniently argued at the time of sentencing was from this house, was there enough money in that bond to be fully his?

[00:26:27] Speaker 01:
The answer is yes.

[00:26:29] Speaker 01:
But it was certainly not an abuse of discretion for the district court judge to rely upon the sworn statement by the defendant and his wife that the funds were his and to be returned to him at the conclusion of the proceedings.

[00:26:43] Speaker 01:
I think the most charitable view of my colleague's argument is that it was abuse of discretion to possibly not allow the defendant to speak again at the end of the hearing.

[00:26:52] Speaker 01:
But a careful reading of that transcript

[00:26:55] Speaker 01:
defense counsel offers his client and says, you know, he's available to speak if you want to hear from him.

[00:27:00] Speaker 01:
And Judge Selna in that moment says, no, I don't think I need to.

[00:27:04] Speaker 01:
Not that he wouldn't be allowed to speak.

[00:27:06] Speaker 01:
So I think there's a difference between refusing to allow him to present evidence, which he was allowed to do, and the opposition to the government's motion to apply the bond to restitution versus what occurred here.

[00:27:15] Speaker 01:
A very careful district court judge who held a hearing, you know, made findings regarding who owned the funds and then properly applied it to restitution.

[00:27:25] Speaker 01:
Unless there are any other questions from the panel, I'm happy to yield back my time and would ask that for the reasons set forth in our brief, the government would ask that you affirm the convictions in the sentence.

[00:27:42] Speaker 02:
Great.

[00:27:42] Speaker 02:
Thank you.

[00:27:54] Speaker 00:
Your honors, very briefly, as relates to the application of the third party funds towards restitution.

[00:28:03] Speaker 00:
First and foremost, I don't need you to speak.

[00:28:07] Speaker 00:
Is the play way saying no?

[00:28:09] Speaker 00:
Now, if they had allowed Ms.

[00:28:11] Speaker 00:
McGonigal to speak, then maybe the record would show whether or not there was a mortgage on the property or there was some other kind of lien or something else that would have not created a 400-400-400 split.

[00:28:22] Speaker 00:
However, that opportunity was not presented.

[00:28:25] Speaker 00:
All we know is that in the PSR, the pre-sentence report, Ms.

[00:28:30] Speaker 00:
Smith is identified as surety.

[00:28:33] Speaker 00:
We did not have the opportunity to clarify that for the court.

[00:28:37] Speaker 00:
And we do submit that it was an improper application, Your Honor, because we did not have the ability to clarify that.

[00:28:43] Speaker 00:
Now, if Your Honors have any other questions as it relates to the other claims, I do submit that

[00:28:52] Speaker 00:
Internal disparities and external disparities are both looked at in terms of sentencing disparities So as your question to the internal disparity amongst the defendants I think that's an important point that we need to highlight now your honor if you've got a defendant who cooperates with the government doesn't obstruct justice and testimony Can't that explain a differential sentence?

[00:29:17] Speaker 00:
Potentially, your honor.

[00:29:17] Speaker 00:
However, the large amount of funds at issue here, I think, leaves something to be wondered about.

[00:29:24] Speaker 00:
Additionally, we do submit that Mr. McGonigal did have a minor role, and I think the evidence does show that.

[00:29:30] Speaker 00:
Unfortunately, I am out of time, your honors, but I am open to any other questions you may have, but I do stand behind our arguments as raised in Palin's brief and response.

[00:29:40] Speaker 02:
Thank you.

[00:29:41] Speaker 02:
Thank you both for your helpful arguments.

[00:29:43] Speaker 02:
The case has been submitted.

[00:29:45] Speaker 02:
And the final case we will hear today is United States versus Red Bones.