[00:00:00] Speaker 03:
So we proceed to the last case on our docket for today, and that is United States of America versus Jaffa.

[00:00:54] Speaker 01:
May I proceed?

[00:00:55] Speaker 01:
You may.

[00:00:57] Speaker 01:
Good afternoon now, Your Honors.

[00:00:59] Speaker 01:
Mark Furnish for Defendants Appellants Joshua and Jamie Yaffa.

[00:01:03] Speaker 01:
And I've reserved five minutes for rebuttal if needed.

[00:01:08] Speaker 01:
Your Honors, this is a case where the district court countenance the government's misuse of expert testimony overt and covert in two principal ways.

[00:01:19] Speaker 01:
First, it allowed a designated law enforcement expert

[00:01:23] Speaker 01:
to construct a supposed model of typical pump and dump stock manipulation schemes, thereby bolstering the suspect credibility of the government's accomplice witnesses, channeling unexamined hearsay, and most critically, inviting conviction simply because the conduct imputed to the defendants allegedly fit the supposed model.

[00:01:48] Speaker 01:
Now second, the district court allowed an undercover FBI agent to testify as an expert witness in lay witness clothing.

[00:01:58] Speaker 01:
That is, the court permitted the expert, the agent I should say, to pervasively mix factual assertions and percipient observations from personally investigating the office with sweeping opinions and conclusions

[00:02:13] Speaker 01:
based on general law enforcement experience.

[00:02:17] Speaker 01:
Now, this error in particular had severe consequences.

[00:02:22] Speaker 01:
For one, it enabled the government to evade expert notice, disclosure, and reliability scrutiny.

[00:02:29] Speaker 01:
For another, it allowed the agent to conflate firsthand knowledge of the case with extrapolations from his specialized background in training

[00:02:39] Speaker 01:
the latter fortifying the former.

[00:02:41] Speaker 02:
So we've already held that there's a fine line between lay testimony and expert testimony.

[00:02:49] Speaker 02:
So taking that as our precedent, why does the admission of Durant's testimony here constitute plain error?

[00:02:58] Speaker 02:
Even if it's error, why is it plain?

[00:03:01] Speaker 01:
Well, the fine line is not fine in the context, the specific context at issue here.

[00:03:07] Speaker 01:
which is that of a law enforcement agent serving as both an expert, an unnoticed expert, and a percipient fact witness.

[00:03:17] Speaker 01:
That line is not fine at all.

[00:03:20] Speaker 01:
And it dates back to Freeman in 2007, and it dates back even further to Figueroa Lopez in 1997,

[00:03:30] Speaker 01:
The very case that the advisory committee on the federal rules of evidence cited in its commentary to the 2000 amendments

[00:03:41] Speaker 01:
to Federal Rule 702.

[00:03:44] Speaker 01:
So this court was actually the first court to recognize in this particular context, because there's a whole line of cases in the Second Circuit where I come from that grow out of Figueroa Lopez.

[00:03:56] Speaker 01:
So this court has long recognized this distinction in the particular context at issue here.

[00:04:02] Speaker 01:
And why is that, Judge Thomas?

[00:04:05] Speaker 01:
Because law enforcement expertise conveys, as this court held in Webb,

[00:04:11] Speaker 01:
It carries a special aura of reliability and trustworthiness.

[00:04:16] Speaker 01:
So the bolstering concerns, especially where you have a case that's premised on turncoat accomplices with all the usual baggage they carry, the motives to fabricate, and it's laid out in our brief, this was some cast of characters that the government called in this particular case.

[00:04:33] Speaker 01:
And we're all familiar with them.

[00:04:36] Speaker 01:
The bolstering effect of this kind of testimony is not like what the court just held in Holmes, which is dry scientific testimony.

[00:04:45] Speaker 01:
People, at least before the last several years, they have a tendency to credit law enforcement testimony out of hand.

[00:04:55] Speaker 01:
Maybe that's changing now.

[00:04:56] Speaker 04:
Can I interject for a moment?

[00:04:59] Speaker ?:
Sure.

[00:04:59] Speaker 04:
I looked at Agent Durant's testimony, and much of it was case-specific related to describing, well, you may disagree, but phrases that came out of the case investigation.

[00:05:13] Speaker 04:
What are the areas of concern that you have where it crossed over into expert territory?

[00:05:18] Speaker 04:
I saw something at the very end of his testimony that was a bit of a summation, but was there anything else in particular?

[00:05:25] Speaker 04:
Or maybe you want to start with that.

[00:05:26] Speaker 01:
Well, in one of the prior arguments,

[00:05:29] Speaker 01:
Your honor use the word disentangle and disentangle is apt here because it's completely pervasive I had a great deal of difficulty cataloging how it was all mixed together and part of the problem is.

[00:05:43] Speaker 01:
And admittedly, we didn't object properly to this.

[00:05:46] Speaker 01:
There was no foundation laid for it at the beginning of the testimony.

[00:05:50] Speaker 01:
And at the end, by the way, the prosecutor asks, how do you know all this?

[00:05:54] Speaker 01:
What are you basing it on?

[00:05:55] Speaker 01:
Because there's no special codes in the case.

[00:05:58] Speaker 01:
An expert, an undercover who participates in the investigation

[00:06:02] Speaker 01:
can interpret codes, ambiguous words, and the like.

[00:06:06] Speaker 01:
Much of this stuff is straightforward.

[00:06:08] Speaker 01:
And he explains in great detail at the end, rather than at the beginning, oh, I'm basing this on my 20 years or 30 years of doing this, first back east, then going to the agent school, and I've been doing this forever, and I've investigated myriad white collar offenses and stock.

[00:06:25] Speaker 01:
So it's very, very difficult.

[00:06:28] Speaker 01:
your honor, to tease out where the fact ends and where the expertise begins.

[00:06:35] Speaker 01:
Excuse me.

[00:06:36] Speaker 01:
Let me ask you this.

[00:06:39] Speaker 04:
Being an agent, there's a certain amount of, I would assume, having background experience in order to help inform the investigation itself.

[00:06:49] Speaker 04:
That doesn't always cross over into becoming an expert, does it?

[00:06:52] Speaker 04:
So what I think this is what Judge Thomas was getting at is it's a little bit difficult to take those things apart where it's permissible for a late witness to rely on their background experiences in informing their investigation of the case versus getting into the expert terrain.

[00:07:11] Speaker 01:
So the case law from this court, many other courts, and the advisory committee notes themselves make clear that the issue

[00:07:19] Speaker 01:
is not the testimony, but the basis of the knowledge.

[00:07:23] Speaker 01:
That's what distinguishes expert testimony from factual testimony.

[00:07:27] Speaker 01:
And here he told you, he told you in two paragraphs that I set forth in full in both the opening and reply briefs, that the basis of his knowledge, all of the pages of testimony, the two days of testimony before, the basis of his knowledge was what he did before, not anything

[00:07:44] Speaker 01:
particular or unique to this case.

[00:07:47] Speaker 01:
So he's extrapolating from all his history to what's going on in this case.

[00:07:52] Speaker 01:
And by the way, he's also defining terms, particularized terms in statutory language, connoting guilt, which I mentioned in passing in the briefs.

[00:08:02] Speaker 01:
That stuff's not coming from this case.

[00:08:04] Speaker 01:
If we take the premise that there is a model of a pump and dump scheme, which is a dubious premise,

[00:08:10] Speaker 01:
because both the designated expert, Tarwater, and the putative expert, or the functional expert, Durant, admitted that these schemes take many different shapes and forms.

[00:08:25] Speaker 01:
And that underscores why

[00:08:29] Speaker 01:
It's critical to disclose this person as an expert so we can conduct the threshold reliability analysis.

[00:08:37] Speaker 01:
Why are we letting in a supposed model of how these schemes work when both persons propounding the model say, oh, by the way, there is no model.

[00:08:47] Speaker 01:
These things take many different shapes and forms.

[00:08:50] Speaker 01:
And that creates for a defendant

[00:08:52] Speaker 01:
a catch-22 situation.

[00:08:55] Speaker 03:
But he did say, and I think it's probably reasonable for the district court to find that Durant will describe his long-running personal involvement in the investigation.

[00:09:10] Speaker 03:
Do you dispute that?

[00:09:12] Speaker 03:
No, I don't.

[00:09:13] Speaker 03:
Okay.

[00:09:13] Speaker 03:
All right.

[00:09:13] Speaker 03:
And explain that his knowledge was based on prior investigations.

[00:09:17] Speaker 03:
It seems like the district court, in light of everything that happened, was not unreasonable to conclude based on exchanges like the one regarding the Chinese wall that Durant grounded his interpretations on information gained during

[00:09:41] Speaker 03:
his investigation of this group, despite that he also had knowledge of pump and dump schemes from prior experiences.

[00:09:49] Speaker 03:
So I guess the question becomes, why is this affecting his substantial rights, as Judge Thomas asked you, because I'm not quite sure you've made your place for that, because it seems that Durant did make clear to the jury that his interpretation of the Chinese wall, which may have played a role in a determination by the jury,

[00:10:17] Speaker 03:
one of the officers acted with deliberate ignorance by purposely shielding himself from aspects of the fraudulent scheme stemmed from knowledge he gained during the investigation in question.

[00:10:28] Speaker 03:
It seems that that may be significant here for us to consider.

[00:10:32] Speaker 01:
So there are multiple ways in which this was concretely prejudicial, but I'll tell you what I deem to be the most significant one.

[00:10:41] Speaker 01:
You have to put yourself in the shoes of a lay juror who doesn't know

[00:10:46] Speaker 01:
I mean, all the arguments here this morning were about stock fraud, incredibly.

[00:10:50] Speaker 01:
But a lay juror isn't going to understand this stuff.

[00:10:54] Speaker 01:
And a lay juror isn't going to understand the difference between what the undercover agent personally observed and what he's extrapolating from his past experience.

[00:11:05] Speaker 01:
And that's why this circuit has a model jury instruction as to how to parse this testimony.

[00:11:12] Speaker 03:
But didn't the jury also hear from Bulmer

[00:11:14] Speaker 03:
who also interpreted the same conversation and many of the same phrases that- From whom I didn't catch.

[00:11:22] Speaker 03:
Bolmer, Mr. Bolmer, B-O-L-M-E-R.

[00:11:25] Speaker 01:
Well, Bolmer is literally a dirty rat in this case and me.

[00:11:29] Speaker 03:
Well, I mean, whatever he is.

[00:11:30] Speaker 01:
But the jury had his testimony.

[00:11:31] Speaker 03:
The jury can evaluate this, but they heard the same thing from him, so I'm trying to figure out where is the substantial rights.

[00:11:38] Speaker 01:
Well, he bolsters the testimony.

[00:11:40] Speaker 01:
as I said earlier, the law enforcement officer who's done this over and over and over again in case after case after case, the overwhelming temptation is to set aside the witnesses' interest, Volmers, his credibility baggage, everything else that's wrong with him, his bias and motive, his cooperation, his motive to fabricate, and just trust the agent because he says, I've done this before and this fits the pattern, everything I've seen and done,

[00:12:09] Speaker 01:
both as an undercover agent and otherwise.

[00:12:12] Speaker 02:
So even if Volmer had just testified to all the exact same things, in your view, there's no overcoming Durant's testimony because of his law enforcement background?

[00:12:20] Speaker 01:
I'm saying that Volmer, as an accomplice, provided sufficient evidence for the jury to convict.

[00:12:26] Speaker 01:
But a sufficiency of evidence analysis is distinct from prejudice and harmless error.

[00:12:32] Speaker 01:
The issue, and we have the burden on this on point two, because it's plain error, the issue is whether it affected substantial rights, whether it was prejudicial.

[00:12:42] Speaker 01:
That's not sufficient.

[00:12:44] Speaker 01:
That's not a sufficiency claim.

[00:12:45] Speaker 01:
I'm not disputing that the jury can or cannot believe Vollmer and the other snitches and convict on that basis alone.

[00:12:53] Speaker 01:
They can.

[00:12:54] Speaker 01:
The issue is whether these two experts, notice and unnoticed, and what we contend are their excesses and improprieties

[00:13:02] Speaker 01:
had a substantial injurious influence on the verdict or on defendant's substantial rights.

[00:13:07] Speaker 01:
Now, this expert testimony, think about this.

[00:13:10] Speaker 01:
Think about how this case unfolds, because I've thought about it, and it doesn't make any sense to me.

[00:13:15] Speaker 01:
They start, the second witness, they start with a model based on what the first expert, he constructs this model.

[00:13:27] Speaker 01:
And then they proceed to fit the defendant's conduct into the model

[00:13:33] Speaker 01:
and urged the jury to convict based on the resemblance, based on the match.

[00:13:38] Speaker 01:
That's not how we do things in a criminal case.

[00:13:41] Speaker 01:
We prove what the defendants did.

[00:13:43] Speaker 01:
And then on its own merits, we prove why it was wrongful.

[00:13:49] Speaker 01:
and why it was illegal.

[00:13:50] Speaker 01:
We convict somebody.

[00:13:51] Speaker 04:
Can I pause you?

[00:13:52] Speaker 04:
It's not uncommon for an expert in a criminal case to set out that model of modus operandi in a general sense.

[00:14:00] Speaker 04:
You just said a moment ago that these are very difficult, confusing cases for a juror to understand what in the world is pump and dump in the first place.

[00:14:08] Speaker 04:
And so you have an expert testimony, testify as to what these general schemes are, and then you get into the specific evidence of the case.

[00:14:16] Speaker 04:
Why is that something we don't do?

[00:14:18] Speaker 01:
So there's a tension, respectfully, in this court's cases between the doctrines of modus operandi on the one hand, which they say is fine, and profile evidence on the other hand, which is not fine.

[00:14:33] Speaker 01:
And I've tried to figure out what the difference is between the two, because it doesn't make much logical sense.

[00:14:39] Speaker 01:
And what I came up with,

[00:14:41] Speaker 01:
in the opening brief was that modus operandi means it's OK to paint out a very general model of criminal activity, but that profile evidence, when it specifically comes, when it comes very, very close to the peculiar facts in crime and scenario of the case on trial, that that's problematic.

[00:15:04] Speaker 01:
That's what I've gleaned from this court's cases.

[00:15:08] Speaker 03:
No, you may not want to talk about sentencing, but I would like to talk about sentencing.

[00:15:13] Speaker 03:
You cite to the Third Circuit decision, United States versus banks, for the proposition.

[00:15:20] Speaker 03:
I think that loss is unambiguous, and it was therefore improper, I think this is your argument, for the district court to defer to the guidelines commentary during sentencing.

[00:15:32] Speaker 03:
But since banks ...

[00:15:36] Speaker 03:
third and sixth?

[00:15:38] Speaker 03:
No, at least the sixth circuit and another circuit have reached the opposite conclusion, noting that the term loss has no one definition.

[00:15:50] Speaker 03:
So I'm just trying to figure out how we should proceed going forward here.

[00:15:55] Speaker 01:
Sure.

[00:15:56] Speaker 01:
There is definitely a split on it, and it's unlikely that the Supreme Court will ever resolve the split because the Sentencing Commission fixed it by moving subsequently.

[00:16:06] Speaker 01:
We have an ex post facto problem here if we were to be resentenced under the new guideline, but they fixed it by moving the commentary into the text.

[00:16:16] Speaker 01:
What I think is important, or maybe even dispositive on this point, is the 28-J letter that I submitted on January 28th, alerting the court to this court's, and I guess it's non-precedential, subsequent decision in Burama.

[00:16:32] Speaker 01:
And that was issued on January 27th, 2025, and it's about

[00:16:36] Speaker 01:
It's exactly on point with my argument.

[00:16:41] Speaker 01:
And the quote is, because loss as used in former guideline 2B1.1B1 was not so ambiguous,

[00:16:50] Speaker 01:
as to allow for a gain that does not approximate the victim's loss.

[00:16:54] Speaker 01:
The district court reversibly erred in using Burama's gain as a substitute for PANW's loss without making any findings on the victim's loss.

[00:17:04] Speaker 01:
And as I went on to note in the letter, this case is pretty close.

[00:17:10] Speaker 01:
The judge found that there were clearly other open market losses to unidentified victims.

[00:17:16] Speaker 01:
But he didn't make any finding as to what those losses might have been, whether and how they related to or were caused by the conduct attributed to the office, and most vitally, whether and how the gains imputed to the office fairly approximated those presumed other open market losses.

[00:17:37] Speaker 01:
sort of tying into the cases.

[00:17:39] Speaker 01:
We heard before at sentencing in these stock fraud cases, you can often have these event studies that attribute the drop in the stock to other things than the defendant's misrepresentations, and even by the guidelines' own commentary, it has to be

[00:17:56] Speaker 01:
the loss, the gain, whatever we're using as a proxy, it has to be proximately caused by the defendant's conduct.

[00:18:03] Speaker 03:
What is it that how you would like for us to proceed?

[00:18:06] Speaker 01:
That's a great question.

[00:18:09] Speaker 01:
Jamie Yaffa has been released from jail because of his

[00:18:14] Speaker 01:
good time credits, I would suggest that we vacate the sentences and remand for further proceedings consistent with the court's opinion and leave us to fight it out in the district court.

[00:18:26] Speaker 03:
With the court's opinion in what case?

[00:18:28] Speaker 01:
In this case.

[00:18:30] Speaker 01:
In this case.

[00:18:31] Speaker 01:
The presumed forthcoming opinion.

[00:18:34] Speaker 01:
I mean, the court issues a mandate, there's a mandate rule.

[00:18:38] Speaker 03:
No, no, no.

[00:18:40] Speaker 03:
So what would we find at this point?

[00:18:43] Speaker 03:
That it was error or it wasn't error?

[00:18:46] Speaker 03:
Yeah, error to- Why was it error though?

[00:18:48] Speaker 03:
For the reason- If we agree with the other circuits, not the third circuit, if we agree with the other circuits,

[00:18:55] Speaker 03:
Why would it be?

[00:18:55] Speaker 01:
Well, then if you agree with the other circuits, then Barama is wrongly decided.

[00:19:01] Speaker 03:
I understand.

[00:19:02] Speaker 03:
Is Barama an opinion?

[00:19:02] Speaker 03:
I'm sorry.

[00:19:03] Speaker 03:
Is Barama an opinion or a memdispo?

[00:19:05] Speaker 01:
I'm sorry, ma'am?

[00:19:06] Speaker 03:
Is Barama an opinion or a memdispo?

[00:19:09] Speaker 01:
Yeah, I guess.

[00:19:11] Speaker 01:
Yeah, it's what we call a summary order.

[00:19:15] Speaker 01:
So it's non-presidential.

[00:19:16] Speaker 03:
Yes, non-presidential.

[00:19:19] Speaker 01:
But non-presidential, it's still pretty persuasive that court

[00:19:24] Speaker 01:
adopted in substance the rationale of banks, otherwise we wouldn't be talking about ambiguity, you know, we wouldn't be referring to ambiguity in the face of the guideline.

[00:19:35] Speaker 01:
And they're saying it's not so ambiguous as to allow resort to the very commentary at issue in this case absent appropriate findings supporting the correlation between gain and loss in this case.

[00:19:51] Speaker 03:
Thank you.

[00:19:59] Speaker 00:
May it please the court, Daniel Zip, on behalf of the United States.

[00:20:02] Speaker 00:
Your Honor, starting with the sentencing issue, this court doesn't have to decide whether to weigh in on the banks versus the other circuit decision as to whether loss is ambiguous in the guidelines.

[00:20:14] Speaker 00:
And that's because the type of loss here, which is gain as a proxy for loss, fits into the definition of loss regardless of whether it's ambiguous or not.

[00:20:23] Speaker 00:
In other words, there is a distinction, which was the case in the Third Circuit, between intended loss and loss, which is ambiguous enough that the court has to go to the commentary, because the average person, if someone was threatening to take their wallet but didn't actually do it, might not perceive that as loss if it's just the intended loss, but if it's gain as a proxy for loss,

[00:20:45] Speaker 00:
It just makes intuitive sense that if someone then took the money out of your wallet, you could count that and that would be the equivalent of the loss.

[00:20:52] Speaker 00:
And that's what the district court did in this case.

[00:20:55] Speaker 00:
It basically used the gains, which could calculate that the office earned from this.

[00:21:00] Speaker 04:
But the district court was relying on the sentencing guidelines commentary in order to do so.

[00:21:05] Speaker 04:
And under Kaiser, it's not supposed to do that until it finds ambiguity first.

[00:21:11] Speaker 04:
That's correct.

[00:21:12] Speaker 00:
But still, there's not a reason to remand in this case.

[00:21:16] Speaker 00:
Even the recent MemDISPO in Burama said that Castillo and the Quesor cases did not foreclose the use of GAIN as a proxy for loss, and the government should have an opportunity to demonstrate that below when it's set to back down.

[00:21:30] Speaker 00:
Here, even if the court referenced the guidelines, the fact remains that on the facts of this case, the loss necessarily translates or the gain necessarily translates into loss.

[00:21:42] Speaker 02:
But again, the district court arguably shouldn't have gotten to the commentary at all.

[00:21:48] Speaker 02:
Didn't it have to first find that the work was ambiguous?

[00:21:54] Speaker 02:
On what basis is it looking to the commentary?

[00:21:58] Speaker 00:
Well, I think at the time of sentencing, that was still the law in this circuit.

[00:22:01] Speaker 00:
The commentary was still fair game.

[00:22:04] Speaker 00:
But even if that is now error, there's no need to remand for resentencing in this case because of the nature of the fraud here.

[00:22:11] Speaker 00:
At one point during the recorded calls, Volmer describes this as a story stock.

[00:22:16] Speaker 00:
No, no.

[00:22:16] Speaker 03:
So are you saying that we would then make the determination under Kaiser

[00:22:21] Speaker 03:
that this is ambiguous, so therefore going to gain in the commentary was appropriate, and then just letting the sentence remain.

[00:22:35] Speaker 00:
There's two ways, basically.

[00:22:37] Speaker 00:
That would be to wade into the circuit split and say, yes, we agree with the fourth, second, and seventh circuit that this is ambiguous, and the court was fine to use the commentary.

[00:22:46] Speaker 00:
The alternate route would be to say that even if it wasn't ambiguous, given the nature of the gain versus loss analysis in this case, the defendant's gain here still meets the unambiguous definition of loss.

[00:23:02] Speaker 03:
Right, but I guess what I wanted to explore, because it seems like we have the couple options that I see, is we do the Kaiser analysis, or do we do what the 11th Circuit just did and said because of the amendment that was made, find that it was clarifying, and therefore, and then apply gain at that point, because it was a clarifying amendment.

[00:23:29] Speaker 03:
I don't know if you're familiar with the 11th Circuit's case.

[00:23:32] Speaker 00:
I'm not sure that I know that particular part, but I would agree with defense counsel this has been changed in the sentencing guidelines so it's not an issue that's likely to repeat as these cases sort of sunset.

[00:23:42] Speaker 00:
But I think this most straightforward way to decide it would say even if the court, even if

[00:23:50] Speaker 00:
loss is not ambiguous, that on the facts of this case, there's no dispute that this company was worthless by the end.

[00:23:59] Speaker 00:
So it's not a case where there's sort of difficulty correlating what some people may have gained versus what some may have lost.

[00:24:07] Speaker 00:
All of the money that the defendants in this case gathered from the investing public is necessarily lost to the investing public because this was a worthless stock at the end and because they were selling a story that had no real value.

[00:24:20] Speaker 04:
But at the time, the guidelines did not define loss, right?

[00:24:25] Speaker 04:
And so set aside intended loss, even the notion of loss being defined as actual loss and that one could use gain as a proxy for it, is that something that's clear from the meaning of the phrase loss?

[00:24:40] Speaker 00:
We believe it is.

[00:24:42] Speaker 00:
This court has recognized that in Martin and sort of as a general principle of law.

[00:24:50] Speaker 00:
bag of marbles and two people take a marble each out of that bag, you can look at the marbles that people took and that's necessarily going to be lost from your bag and gained to them.

[00:25:04] Speaker 00:
It's sort of a straightforward analysis that doesn't really require a

[00:25:07] Speaker 04:
But I guess what falls short in that analogy is you know exactly who the two people are who took the marble.

[00:25:13] Speaker 04:
And in this case, you had, I think, eight investors where you could attribute to their actual losses.

[00:25:18] Speaker 04:
But I take it the government's case is that there are other investors that they can't find who also suffered losses.

[00:25:24] Speaker 04:
And so therefore, we have to rely on gains to the defendants.

[00:25:28] Speaker 04:
So I guess I'm not seeing the analogy fit very well.

[00:25:31] Speaker 00:
In that analogy, the people left holding the marbles would be the Yafas and their co-defendants, right?

[00:25:37] Speaker 00:
So even if we don't know what happened to the rest of the bag, and we can't analyze exactly how much was taken out of the bag, we can look at the two marbles that they're holding and say, that's your gain, and by definition, it's loss from this bag.

[00:25:51] Speaker 00:
It's a sort of straightforward...

[00:25:54] Speaker 00:
understanding of what the word loss means in this context, that you can use others' gains, at least in a case like this where all of the value was gone by the end.

[00:26:05] Speaker 00:
So you could just sort of look to what they took from the conspiracy and use that as a proxy for the loss amount.

[00:26:13] Speaker 00:
Turning to the substantive issues on the modus operandi, the district court was within its discretion in allowing Agent Tarwater to testify about the common scheme or the common characteristics of pump and dump schemes.

[00:26:29] Speaker 00:
His testimony was reliable because he had 15 years of experience working on these type of investigations, and this court has repeatedly approved of this type of testimony.

[00:26:38] Speaker 00:
as it helps the jury to understand complex criminal activities and alerts them to the possibility that combinations of seemingly innocuous events may indicate criminal behavior.

[00:26:50] Speaker 00:
Likewise, on the lay testimony, it wasn't plain error for the district court not to Sue Espante strike Agent Durant's testimony as improper.

[00:27:03] Speaker 00:
testimony.

[00:27:05] Speaker 00:
As Your Honor noted, we're on plain error review.

[00:27:08] Speaker 00:
This Court has repeatedly recognized that the distinction between lay and expert opinion in this context is a fine one, and the defense has not

[00:27:19] Speaker 00:
met their burden of showing that this was so plain, or even identified which portions of the 48 tapes that we play they're actually saying meets the test.

[00:27:29] Speaker 00:
They haven't met the, at the very least, haven't met the burden of showing that this is something that a court should have stepped in and Sue Espante corrected on its own.

[00:27:39] Speaker 00:
You've got plenty of time left.

[00:27:41] Speaker 00:
I'm happy to answer additional questions.

[00:27:44] Speaker 00:
Thank you.

[00:27:45] Speaker 03:
Thank you.

[00:27:47] Speaker 03:
me come up for rebuttal.

[00:27:49] Speaker 03:
I don't know if you had, oh, you did have a minute left.

[00:27:52] Speaker 01:
Quickly on the sentencing, which is all I'm going to focus on.

[00:27:56] Speaker 01:
In a plain meaning analysis, gain and loss are not the same thing.

[00:28:01] Speaker 01:
A loss is a deprivation.

[00:28:03] Speaker 01:
And a gain is a benefit.

[00:28:05] Speaker 01:
And as I explained in the reply brief, this is why there are distinct forfeiture and restitution statutes.

[00:28:12] Speaker 01:
Forfeiture strips the defendant of his ill-gotten gains, whereas restitution compensates the victim for what they lost.

[00:28:20] Speaker 01:
And they're different things.

[00:28:23] Speaker 01:
And if you look at it in the context of mail fraud, courts repeatedly hold that a deprivation without a contemplated harm

[00:28:34] Speaker 01:
which is the loss, does not amount to mail fraud.

[00:28:38] Speaker 01:
If you look in the extortion context, a deprivation without an obtaining, and this is Sekhar from the Supreme Court, doesn't rise to the level of extortion.

[00:28:49] Speaker 01:
And why is that?

[00:28:50] Speaker 01:
And this is reflected in the commentary itself.

[00:28:54] Speaker 01:
There has to be a causal connection between the deprivation

[00:29:04] Speaker 01:
and the harm.

[00:29:06] Speaker 01:
And there was no findings in the district court on that issue.

[00:29:10] Speaker 01:
And to Your Honor's point about the substantive change, and we have to remember that even if the court were to deem it clarifying, the guidelines are still advisory.

[00:29:22] Speaker 01:
So that's not going to be determinative here.

[00:29:25] Speaker 01:
The district court on remand is free to disagree with the guidelines on policy grounds, say the commentary is wrong,

[00:29:32] Speaker 01:
And I don't credit it, among others, some of the reasons that I just articulated here.

[00:29:37] Speaker 01:
There's not a necessary correlation between loss and gain, particularly in light of what I said in the opening argument.

[00:29:46] Speaker 01:
In sentencing all the time, we could get an event survey to show that the fraud wasn't the cause of the victims' alleged losses.

[00:29:58] Speaker 01:
Thanks very much.

[00:29:59] Speaker 03:
Thank you.

[00:30:00] Speaker 03:
I appreciate your oral argument presentations, Mr. Hernich, Mr. Zip.

[00:30:05] Speaker 03:
Appreciate your being here.

[00:30:08] Speaker 03:
The case of United States of America versus Jamie Yaffa is now submitted.

[00:30:16] Speaker 03:
Thank you.