[00:00:03] Speaker 03:
I'll turn to 23-40-99, United States versus Baker.

[00:00:11] Speaker 04:
Good morning, and may it please the Court.

[00:00:13] Speaker 04:
Two problems beset Mr. Baker's wire fraud convictions.

[00:00:17] Speaker 04:
First, the pair of victims named in the indictment and presented to the jury lacked property rights in the object of the charged scheme to defraud, a fee tied to a real estate transaction.

[00:00:31] Speaker 04:
This hole in the evidence

[00:00:33] Speaker 04:
leaves the money or property element unsupported under at least half a dozen Supreme Court cases.

[00:00:41] Speaker 04:
The second problem with Mr. Baker's convictions lies in a state court judgment issued over a year before trial.

[00:00:49] Speaker 04:
It was submitted to the district court.

[00:00:52] Speaker 04:
It adjudged Mr. Baker to be the sole owner of the disputed real estate fee, excluding all other claimants, including the two putative victims here.

[00:01:03] Speaker 04:
And it is legally operative.

[00:01:06] Speaker 03:
It wasn't admitted in evidence, was it?

[00:01:08] Speaker 04:
True to that, Your Honor.

[00:01:11] Speaker 03:
Well, if you had the opportunity to offer it, your brief says that there was a response to your motion in limiting, or to the government's motion in limiting, was dispositive.

[00:01:21] Speaker 03:
But the judge issued an order saying it was not dispositive.

[00:01:25] Speaker 03:
And then you never offered it at trial.

[00:01:27] Speaker 04:
And you're right, Your Honor.

[00:01:30] Speaker 04:
But to be blunt, I have bigger fish

[00:01:32] Speaker 04:
to fry here than an evidentiary rule.

[00:01:34] Speaker 03:
That may have been a good tactical decision, but you're bound by that tactical decision.

[00:01:39] Speaker 03:
That was not in evidence at trial, and I don't see how you can rely on it here.

[00:01:43] Speaker 04:
Well, I'm asking this court in my third, second issue to take judicial notice of it because it bars Mr. Baker's convictions.

[00:01:53] Speaker 04:
He could not devise a criminal scheme to obtain his own property.

[00:01:58] Speaker 04:
He could not defraud himself.

[00:02:01] Speaker 04:
That claim lies in the first issue that I've pressed, which is that government did not show that either victim held cognizable property rights in the very object of the charge scheme.

[00:02:14] Speaker 04:
So put aside the state court ruling, and let's address the dearth of evidence on the money or property element of the statute.

[00:02:27] Speaker 04:
I don't know what to add to the fact that the Supreme Court has said the federal fraud statutes protect property rights.

[00:02:39] Speaker 03:
Defendant must... Do you think the escrow agent had no property rights?

[00:02:45] Speaker 03:
Yes, I think that.

[00:02:47] Speaker 03:
It could exclude other people from that money.

[00:02:50] Speaker 03:
True, but that's a property right, is it not?

[00:02:54] Speaker 04:
It is not a property right, a common law.

[00:02:58] Speaker 04:
Escrow agents and Baileys acquired no property rights under common law.

[00:03:07] Speaker 03:
They have the right to that property above the entire world, except the two parties to the Escrow.

[00:03:13] Speaker 04:
They have a right to possess that property according to the Escrow agreement.

[00:03:19] Speaker 04:
They do not acquire ownership rights.

[00:03:21] Speaker 03:
Well, they don't have full ownership.

[00:03:23] Speaker 03:
But there are lots of property rights less than full ownership.

[00:03:28] Speaker 04:
Which one, say, mere possession does an escrow agent have?

[00:03:33] Speaker 04:
It can't sell the money.

[00:03:35] Speaker 04:
It can't control it.

[00:03:38] Speaker 04:
It can't exclude others from taking it.

[00:03:43] Speaker 03:
Contrary to the... The money was embezzled from the escrow agent.

[00:03:46] Speaker 03:
The escrow agent could sue the embezzler and try to get it back so it could perform its functions as an escrow agent.

[00:03:52] Speaker 03:
That's a property.

[00:03:54] Speaker 04:
That's a right of potential litigation.

[00:03:57] Speaker 04:
A remedy is not a property right, Judge Hartz.

[00:04:01] Speaker 04:
It's certainly not a property right in the sense that 40 years of Supreme Court cases have described property rights.

[00:04:11] Speaker 04:
That is, property in the hands of the victim.

[00:04:15] Speaker 04:
The escrow agent has fiduciary responsibilities and may face litigation as a defensive matter or could bring offensive litigation, does not convert

[00:04:27] Speaker 04:
does not translate to a property right within the meaning of McNally, Cleveland, Seminelli, Kelly.

[00:04:35] Speaker 00:
I could go on and on.

[00:04:36] Speaker 00:
Counsel, I'm glad you mentioned those cases.

[00:04:38] Speaker 00:
McNally, Cleveland, those cases, I agree with you that they do say that both the mail fraud statute, wire fraud statute must be based upon property, but really an issue in those cases was whether or not

[00:04:53] Speaker 00:
what the scheme was all about was to actually get something that qualified as property.

[00:04:59] Speaker 00:
They did not talk about adding an element to the fraud statutes that the government must prove, not just that what the scheme was devised was to get property of another.

[00:05:12] Speaker 00:
but that the government must also establish ownership rights.

[00:05:16] Speaker 00:
I mean, you seem to be adding an additional element that I don't see in the fraud statute, nor was it in the elements that were advised to the jury, nor is it in the definition of scheme to defraud.

[00:05:26] Speaker 00:
So why should we read those cases to impose this additional element, not just a property, a scheme to defraud, another property, but also property that they owned?

[00:05:38] Speaker 04:
With due respect, you're wrong, Judge Federico, twice.

[00:05:42] Speaker 04:
First, I'm not adding an element.

[00:05:44] Speaker 04:
The definition of a scheme to defraud is to obtain property from another, money or property from another, not the defendant.

[00:05:53] Speaker 04:
And that is precisely what this jury was instructed.

[00:05:56] Speaker 00:
If you look at the definition... I have it right in front of me.

[00:05:58] Speaker 00:
I agree with you.

[00:05:59] Speaker 00:
Okay.

[00:06:00] Speaker 00:
But your argument is that here, because the title company and the brother

[00:06:06] Speaker 00:
had no ownership rights, that there could not have been a scheme to deprive them of property.

[00:06:11] Speaker 00:
But the title company had possession of the property.

[00:06:15] Speaker 00:
So you're distinguishing possession versus ownership, but that's nowhere in the definitions of scheme to defraud.

[00:06:22] Speaker 00:
I guess I'm asking you, where does that come from?

[00:06:24] Speaker 04:
It's in the common law, Your Honor.

[00:06:26] Speaker 04:
And when the Congress imports

[00:06:31] Speaker 04:
fraud from the common law, it brings all the soil in which that doctrine was planted.

[00:06:37] Speaker 04:
Chief among them, the victim of the fraud must have property rights, must have ownership in the object of the charged fraud.

[00:06:50] Speaker 03:
Where are you drawing the line?

[00:06:52] Speaker 04:
It's a fair question.

[00:06:53] Speaker 04:
I don't have to draw that line here.

[00:06:55] Speaker 03:
I wouldn't be... Well, you do in a way, because common law refers to property as a bunch of sticks of individual interests that an owner has.

[00:07:08] Speaker 03:
But you have property if you...

[00:07:12] Speaker 03:
I had the right to exclude people from this.

[00:07:15] Speaker 03:
The Supreme Court said that was a property interest in a recent Takings case.

[00:07:23] Speaker 04:
I challenge that, Your Honor.

[00:07:25] Speaker 04:
I think the whole notion of the common law idea of bailment, which the government has injected into this case, is to separate mere possession from all other aspects of ownership.

[00:07:40] Speaker 04:
So the common law gave a bailey, if that's what an escrow agent is, and I don't think so.

[00:07:47] Speaker 04:
It gave it only possession, no property rights, no property rights within the meaning of the statute.

[00:07:52] Speaker 04:
I'm not suggesting that it didn't have the right to possess that property, but it did not own it in the sense that the Supreme Court demands.

[00:08:03] Speaker 04:
And if I'm wrong, this would be the first court to consider

[00:08:08] Speaker 04:
whether some kind of ethereal, squishy property right exists in an escrow agent, and that must therefore be attributable to ambiguity in the definition of property or money in the statute for which I invoke the rule of lenity.

[00:08:26] Speaker 00:
How do you wrestle with the line of cases that say that a claim of right to property is not a defense to the fraud statutes?

[00:08:34] Speaker 00:
In other words, the law doesn't allow for someone to say, well, I don't think they actually have any ownership rights over this property.

[00:08:40] Speaker 00:
So therefore, I can engage in any scheme lie that I want in order to try to get the property from their possession, because I think I actually own it.

[00:08:49] Speaker 00:
There are cases that say that's not a defense.

[00:08:51] Speaker 00:
So how do you wrestle with those?

[00:08:52] Speaker 04:
You're gesturing at the intent requirement of wire fraud

[00:08:56] Speaker 04:
I'm in a completely different zip code.

[00:08:58] Speaker 04:
I am challenging the money or property element.

[00:09:01] Speaker 04:
I'm not contesting whether Mr. Baker had a sufficient mens rea.

[00:09:08] Speaker 04:
I'm attacking an altogether different element.

[00:09:13] Speaker 04:
So to be blunt, I don't care what prior cases say about intent.

[00:09:18] Speaker 04:
I care what cases say about property.

[00:09:25] Speaker 04:
If there are no further questions, I'll reserve.

[00:09:27] Speaker 03:
You don't have any other issues you're going to raise?

[00:09:29] Speaker 03:
You raised other issues in the brief.

[00:09:32] Speaker 04:
Certainly not waiving any of those issues.

[00:09:36] Speaker 03:
If you don't address them now, I'm not going to allow you to address them in your rebuttal.

[00:09:42] Speaker 03:
You can't hold them back until you hear from the other side.

[00:09:47] Speaker 03:
So if you have any other issues you want to raise with respect to the conviction, you should

[00:09:54] Speaker 03:
address them now.

[00:09:56] Speaker 04:
I anticipate we're going to hear for 15 minutes about the property or money element, which I challenge, and I will dedicate my rebuttal only to those.

[00:10:06] Speaker 00:
Actually, I have another question about the state court judgment and the interpleader action.

[00:10:11] Speaker 00:
I thought at the beginning of your argument, you conceded that it wasn't offered.

[00:10:15] Speaker 00:
So therefore, your only argument you're making now is asking us to take judicial notice.

[00:10:20] Speaker 00:
But I read in your briefs you also offered the futility doctrine and acknowledged a point I agree with, which is defense lawyers have feelings too.

[00:10:29] Speaker 00:
So it would be futile for the defense lawyer to have tried to offer it in the face of the judge's pronouncements already made.

[00:10:37] Speaker 00:
But are you abandoning the futility doctrine?

[00:10:40] Speaker 04:
No, absolutely not.

[00:10:42] Speaker 04:
I am not pressing that issue because I don't want a new trial.

[00:10:46] Speaker 04:
I want a remand.

[00:10:48] Speaker 00:
So you're not pressing it, but you're not abandoning it.

[00:10:51] Speaker 00:
So where does it live?

[00:10:52] Speaker 04:
I've written not one, but two briefs on the issue.

[00:10:58] Speaker 04:
I'm prepared to pair your very fair observation, Judge Federico.

[00:11:02] Speaker 04:
I agree that I've got presentation problems here.

[00:11:06] Speaker 04:
So the next argument in my brief, or our sub-argument in my brief, is that district court should have recognized

[00:11:14] Speaker 04:
immediately that this document is not hearsay.

[00:11:18] Speaker 04:
It's a legally operative determination of rights.

[00:11:21] Speaker 03:
Any issue about futility, though?

[00:11:24] Speaker 03:
Immediately after that hearing, I think it was the same day, the judge issued an order saying it denied the government's motion limiting to exclude that document, subject to what goes on at trial?

[00:11:42] Speaker 03:
Well, it actually works.

[00:11:44] Speaker 03:
It's worse than that for me.

[00:11:45] Speaker 03:
It certainly doesn't seem like it's futile at that point.

[00:11:47] Speaker 04:
It's worse for me.

[00:11:48] Speaker 04:
He didn't deny the motion and eliminate it.

[00:11:51] Speaker 04:
He reserved it.

[00:11:52] Speaker 04:
Right.

[00:11:53] Speaker 04:
And we failed to raise it.

[00:11:56] Speaker 04:
Now, I have a futility argument.

[00:11:57] Speaker 04:
I think the words he used in not one but two pre-tribes.

[00:12:01] Speaker 03:
He clearly indicated what he was feeling at that time, but he didn't feel that he could make a final decision without hearing the evidence at trial.

[00:12:08] Speaker 04:
I can read the room.

[00:12:09] Speaker 04:
I'm not going to convince two of you on futility.

[00:12:14] Speaker 04:
remains plain error for the district court not to have recognized a five-alarm fire in his chambers, with the state court judgment negating the very core of the government's allegation.

[00:12:28] Speaker 04:
I fault him for not sui sponte, recognizing that is a verbal act or a statement regarding property.

[00:12:37] Speaker 04:
Either way, it is either not hearsay or an exception to hearsay.

[00:12:41] Speaker 04:
It was admissible.

[00:12:43] Speaker 04:
dispositive of the case.

[00:12:49] Speaker 02:
You say that the government has switched its theory, but you're not arguing for waiver or anything.

[00:12:54] Speaker 02:
Do we just pick up with the new theory from the government as though that was what had been argued in the district court?

[00:13:01] Speaker 04:
Well, I struggled with this, Your Honor, as I wrote the briefs.

[00:13:07] Speaker 04:
There was a draft that did argue.

[00:13:10] Speaker 04:
I recognize that you can affirm on alternate grounds.

[00:13:13] Speaker 04:
That's a discretionary power.

[00:13:16] Speaker 04:
The government has shifted theories of property, but we bear some responsibility because we didn't alight in the district court on the problem with the escrow agent's claim.

[00:13:30] Speaker 04:
We focused

[00:13:31] Speaker 04:
at the Rule 29 only on Mr. Baker's claim, I mean, Ms.

[00:13:35] Speaker 04:
Shane Baker's claim of ownership.

[00:13:38] Speaker 04:
So we don't have clean hands completely to come in and demand that waiver.

[00:13:45] Speaker 04:
I don't think you have to exercise your discretion to consider the alternate, the new theories, but I'm not afraid of them.

[00:13:52] Speaker 04:
They don't improve the government's position.

[00:13:57] Speaker 04:
Now I will reserve my time.

[00:13:59] Speaker 04:
Thank you.

[00:14:05] Speaker 01:
May it please the court, Tyler Murray on behalf of the United States.

[00:14:11] Speaker 01:
Defendant Shane Baker, while serving a federal sentence for felony healthcare fraud and falsification of documents, committed wire fraud.

[00:14:21] Speaker 01:
And then after that, while he was on pretrial release for the new charges and supervised release for the old charges, he committed contempt of court and possessed ammunition as a felon.

[00:14:34] Speaker 01:
those convictions should be affirmed.

[00:14:36] Speaker 01:
They should be affirmed because the victims in this case, Mr. Baker's brother Shane Baker and Old Republic Title Company, had cognizable property rights, traditionally recognized property rights, that are protected by the wire fraud statute.

[00:14:54] Speaker 01:
First we'll go to the title company, Old Republic Title Company.

[00:14:58] Speaker 01:
A title company has

[00:15:00] Speaker 01:
of fiduciary duty, an obligation to take in this money, to care for it, to protect it from loss, and then dispose of it only according to the terms of the escrow agreement.

[00:15:16] Speaker 01:
The Supreme Court answered the question as to whether that's a property right in the case of Shaw.

[00:15:22] Speaker 01:
Shaw involved a case where there was a depositor at a bank, and the assumption in the case was that

[00:15:29] Speaker 01:
Sometimes deposits in a bank belong to the bank, but in some cases they don't.

[00:15:34] Speaker 01:
They remain the property of the depositor.

[00:15:39] Speaker 02:
Is that your best case on the escrow is the Shaw case?

[00:15:43] Speaker 02:
It is the best case, Your Honor.

[00:15:44] Speaker 01:
The Shaw case talks about the notion that when you have custody of another's property and you can block everybody else from the world from getting at it,

[00:15:54] Speaker 01:
You have a property interest that's protected by the wire fraud statute Otherwise, it would be open season at least as far as federal wire fraud statutes are concerned on escrow companies you could have

[00:16:06] Speaker 01:
business email compromise schemes.

[00:16:08] Speaker 01:
You could have people calling the escrow agents and impersonating the parties of transactions to divert that money, and they might have a remedy in civil cases.

[00:16:18] Speaker 01:
There might be a state court crime, but that would take it out of the ambit of the federal wire fraud statutes.

[00:16:22] Speaker 02:
I think that's... Why would our ruling be that broad when the asserted basis for it from your opposing counsel is that Matt owned the money?

[00:16:33] Speaker 02:
The examples that you're giving, none of them involve

[00:16:36] Speaker 02:
the fraudster owning the money, I presume.

[00:16:39] Speaker 01:
The issue of whether, at the time of the wire fraud at issue here, the issue of who owned the money had not been resolved by any state court.

[00:16:47] Speaker 01:
It had happened before that.

[00:16:49] Speaker 01:
And that's where we went to the cases that say, oh, well, I can't be liable for fraud if it was my money to begin with.

[00:16:57] Speaker 02:
Well, you don't contend that a different owner owned it at different times, do you?

[00:17:01] Speaker 02:
You're just saying that it hadn't been adjudicated?

[00:17:04] Speaker 01:
It hadn't been adjudicated and that different people had property rights that were cognizable and protected under the wire fraud statute.

[00:17:10] Speaker 01:
The old Republic title company at that time had a cognizable property right under the wire fraud statute that it could be defrauded.

[00:17:18] Speaker 01:
Do you acknowledge that your theory has changed on appeal?

[00:17:22] Speaker 01:
I don't, Your Honor.

[00:17:24] Speaker 01:
At trial, with respect, and the only theory that would have changed would have been with respect to the theory of victimhood of the brother Shane Baker.

[00:17:33] Speaker 01:
And at trial, the evidence showed that Mr. Baker, defendant Baker, approached his brother and said, hey, I owe the government money.

[00:17:42] Speaker 01:
I'd like to not pay them, but I'd like to pay back the money I owe you.

[00:17:46] Speaker 01:
And so let me create an LLC in your name.

[00:17:50] Speaker 01:
I'll do a real estate transaction through it.

[00:17:52] Speaker 01:
And then I'll get you paid back with those proceeds.

[00:17:57] Speaker 01:
That was the theory at trial.

[00:17:58] Speaker 01:
That's the theory we're espousing here.

[00:18:00] Speaker 01:
And the theory is that his brother had a right to be repaid, which the Supreme Court in Pasquitano recognized as a cognitive property right from which someone could be defrauded.

[00:18:13] Speaker 01:
So no, I kind of push back on that, that our theory has changed.

[00:18:18] Speaker 01:
It has not.

[00:18:21] Speaker 01:
So with respect to the title company, Shaw is the answer to that one.

[00:18:26] Speaker 01:
With respect to his brother, Shane Baker's property right, that case, the Supreme Court answered that question in Pasquitano, where the right to be repaid is clearly a property right that's traditionally been recognized and from which someone can be defrauded.

[00:18:43] Speaker 01:
The whole purpose of saying that my brother has assigned it to me was to avoid having his brother find out that this money was coming.

[00:18:51] Speaker 02:
So Shane is the equivalent of the Canadian government in that case?

[00:18:55] Speaker 01:
Yes, yes.

[00:18:58] Speaker 01:
The Canadian government is the same in that they both had a right to be repaid.

[00:19:04] Speaker 01:
The difference here is that they've mentioned in the reply brief, my friend has mentioned in the reply brief as well, it wasn't reduced to judgment.

[00:19:12] Speaker 01:
There wasn't a lien.

[00:19:14] Speaker 01:
There wasn't a UCC-1 filing.

[00:19:16] Speaker 02:
But go ahead.

[00:19:17] Speaker 02:
Isn't that the natural course of events?

[00:19:20] Speaker 02:
He claims that he's owed $445,000 from his brother.

[00:19:23] Speaker 02:
There's no judgment.

[00:19:24] Speaker 02:
You go get a judgment and you collect against assets.

[00:19:27] Speaker 01:
Absolutely, Your Honor, that would be the natural course of event.

[00:19:30] Speaker 01:
But that right to sue, I disagree with my friend, that is a property right.

[00:19:36] Speaker 01:
Just like the Canadian government hadn't, you know, they have a right to collect that tax money, but they hadn't reduced that to a judgment yet.

[00:19:42] Speaker 01:
There's nothing in the record that showed that's been reduced to a judgment or they attached a lien or anything.

[00:19:47] Speaker 01:
That right to be repaid, whether you're a secured creditor or an unsecured creditor, is a property right from which someone can be defrauded.

[00:19:57] Speaker 01:
With respect to the Supreme Court cases that talk about this issue of property rights, in the briefing, my friend has appeared to hang their hat on language from the Cleveland case that says that the property to be obtained in the wire fraud has to be property in the hands of the victim.

[00:20:17] Speaker 01:
But it's important to understand the context in which that language comes.

[00:20:20] Speaker 01:
And I think he's asking that phrase to do more work

[00:20:25] Speaker 01:
than was intended in that.

[00:20:28] Speaker 01:
In the Cleveland case, recall that was the case where there was a fraud at issue to get on the state to issue video poker licenses.

[00:20:38] Speaker 01:
And the issue in that case that the court decided was that, no,

[00:20:42] Speaker 01:
In the hands of the state, those video poker licenses aren't property yet because it's an exercise of regulatory power as to who gets a property right and when.

[00:20:52] Speaker 01:
But once they leave the state's hands, then it's property.

[00:20:55] Speaker 01:
That's not the situation we have here.

[00:20:57] Speaker 01:
We have two cognitively recognized property rights from which they could be defrauded, and the jury properly found that here.

[00:21:07] Speaker 00:
Council, yeah, can you help me with this?

[00:21:11] Speaker 00:
The Supreme Court cases that are talking about property and the basis for these fraud statutes are to protect the property.

[00:21:18] Speaker 00:
But I'm stuck a little bit overlaying that with the elements of fraud statutes and the definitions.

[00:21:26] Speaker 00:
And you heard me maybe ask your opposing counsel the question about whether they've added an element here.

[00:21:32] Speaker 00:
And so as I look at the elements the jury was instructed, including the definition of a scheme to defraud,

[00:21:40] Speaker 00:
I think I'm maybe perhaps missing their argument as to whether or not, or maybe I am myself adding an additional element here that the government has to prove the property of another is somehow what the realm of their ownership rights are.

[00:21:58] Speaker 00:
But you heard them respond, so I'd like to give you that opportunity to maybe help me understand this better.

[00:22:03] Speaker 01:
Sure, certainly.

[00:22:05] Speaker 01:
The notion that the Supreme Court has given in this line of cases, starting with McNally and Ending and Seminelli and others, is that the right to be sought, or the property that has to be sought, has to be a traditionally recognized property right.

[00:22:21] Speaker 01:
It can't be a right to honest services until they change the statute.

[00:22:26] Speaker 01:
It can't be a right to control.

[00:22:28] Speaker 01:
It can't be the right to control the lanes of a bridge.

[00:22:32] Speaker 01:
It has to be a traditionally recognized

[00:22:35] Speaker 01:
property right.

[00:22:36] Speaker 01:
And that's what we've got here.

[00:22:38] Speaker 01:
And they've identified that in the Pasquotano and Shaw.

[00:22:41] Speaker 01:
We've got those kind of traditionally recognized property rights.

[00:22:45] Speaker 01:
And I would point the court to language in the Carpenter case.

[00:22:50] Speaker 01:
Carpenter, you recall, was decided shortly after McNally.

[00:22:53] Speaker 01:
And it's held that confidential business information was a traditionally recognized property right.

[00:22:58] Speaker 01:
And in that case, the court made

[00:23:00] Speaker 01:
a cogent observation, which is that within that scope of traditional property rights, the wire fraud statute covers all the schemes to get any of those traditional property rights.

[00:23:12] Speaker 01:
So we're squarely in the middle.

[00:23:14] Speaker 01:
We're not asking the court to recognize a right of good government like they do in Kelly or some other cases.

[00:23:21] Speaker 01:
We're right squarely in the middle of the intent of this fraud was to obtain property

[00:23:28] Speaker 01:
And there was a cognitively recognized traditional property right in both of the victims.

[00:23:32] Speaker 00:
Here we're talking about money.

[00:23:34] Speaker 00:
And it doesn't seem to me to be a leap to say that someone's going to have a claim on that money.

[00:23:41] Speaker 00:
So whatever traditional property rights one may have in money would not be something in dispute.

[00:23:47] Speaker 00:
But what I hear the real dispute here is really who had the claim to that money.

[00:23:54] Speaker 00:
Again, going back to the scheme to defraud, it says in order to deprive another.

[00:23:58] Speaker 00:
Would the government even have to prove who that another person is that has the property rights in order to sustain a conviction for the wire fraud?

[00:24:09] Speaker 01:
Yeah, I do think the government has to show that the object of the fraud is a traditional property right in the hands of another.

[00:24:16] Speaker 01:
I don't dispute that.

[00:24:18] Speaker 01:
What I dispute here is

[00:24:20] Speaker 01:
They're trying to define that property rights very narrowly here, too narrowly.

[00:24:25] Speaker 01:
We do have to show that there's property in the hands of another.

[00:24:29] Speaker 01:
In the case of the title company here, it literally was in the hands of another.

[00:24:33] Speaker 01:
And so we do have to show that.

[00:24:35] Speaker 01:
But we don't have to show that there's somehow a security interest or a perfected lien or a judgment or anything like that.

[00:24:42] Speaker 01:
Shaw and Pasquotano answered those questions with respect to this case.

[00:24:49] Speaker 01:
I'm just going to say, Your Honor, with respect to the court asking questions about the state court judgment, let me just mention that it can't be the case that when there's supposedly this dynamite piece of evidence and the

[00:25:08] Speaker 01:
the district court expresses some doubt, as a good trial judge will do.

[00:25:14] Speaker 01:
It will give the parties some insight as to what it's thinking.

[00:25:18] Speaker 01:
And instead of marshaling your evidence in response to that and marshaling your arguments, you just don't offer it at trial, then that's not something that gets to be reviewed later on appeal.

[00:25:27] Speaker 03:
If we were to review it, why is it not dispositive?

[00:25:33] Speaker 01:
There's several reasons, Your Honor.

[00:25:39] Speaker 01:
The state court judgment isn't dispositive here, number one, because if you were to consider that issue, the trial court didn't exclude it.

[00:25:48] Speaker 01:
But even if it had, even if it had, that would have been proper under this court's precedent in the Herrick case, which says that an out-of-court or an out-of-court... They say it was admitted.

[00:25:58] Speaker 03:
Sorry, what?

[00:25:59] Speaker 03:
I want you to assume it was admitted and were considered.

[00:26:03] Speaker 03:
Why would that not be, why would that not provide a defense?

[00:26:07] Speaker 01:
because a claim of right to property isn't a defense.

[00:26:10] Speaker 01:
We've cited the court to cases out of the Second Circuit and elsewhere that talk about this notion that just because ahead of time you think you have a right to property that does not justify you in

[00:26:22] Speaker 01:
lying, cheating, and stealing to try and get it.

[00:26:24] Speaker 01:
Such disputes get to be resolved through civil litigation or settlement, but not through lies or deception.

[00:26:32] Speaker 01:
So even if the judge came in later and said, yes, you own it, that hadn't been decided yet.

[00:26:38] Speaker 01:
In fact, Mr. Baker's crime, oh, sorry.

[00:26:40] Speaker 03:
So the defrauder may have some right to the property.

[00:26:43] Speaker 03:
That doesn't give the defrauder the right to deprive others of whatever rights they may have.

[00:26:49] Speaker 03:
Correct.

[00:26:50] Speaker 01:
Correct.

[00:26:50] Speaker 01:
You don't get to short-circuit this whole interpleter proceeding that happened through defrauding.

[00:26:56] Speaker 03:
Let me ask you on the interstate commerce issue.

[00:26:59] Speaker 03:
You indicate maybe you're conceding.

[00:27:03] Speaker 03:
Where is the interstate transfer with respect to the wire communication with the Utah?

[00:27:13] Speaker 03:
Was it the Corporation Commission?

[00:27:15] Speaker 03:
Somewhere on the other side.

[00:27:18] Speaker 03:
Under our precedent,

[00:27:20] Speaker 03:
Have you shown an interstate wired communication?

[00:27:26] Speaker 01:
What we've offered is the evidence in the record, which was that this was a publicly facing website that was available across state lines and internationally.

[00:27:34] Speaker 03:
That should be enough.

[00:27:35] Speaker 03:
But my question, you suggested that perhaps you'd like to raise it en banc if we don't agree with you on the interstate.

[00:27:46] Speaker 03:
We've required an identifiable communication as part of the crime from one state to another.

[00:27:58] Speaker 03:
And the fact that it's on a website that some other person in another state could view, I'm not sure that that's part of the crime.

[00:28:07] Speaker 03:
I'm not sure that's enough under our precedent to show an interstate communication.

[00:28:13] Speaker 03:
How do you respond to that?

[00:28:14] Speaker 01:
I understand your point, Your Honor, and other than what's in our brief, I would say that ultimately this issue doesn't matter because the same evidence would have come in at trial, the same arguments would have been made, the two counts grouped, and so the same sentence would have been imposed.

[00:28:33] Speaker 01:
So ultimately, even if there wasn't an interstate wire, if it turns out that the evidence in this record is insufficient, it would be harmless

[00:28:42] Speaker 01:
on this record.

[00:28:43] Speaker 01:
Because he'd be guilty of the other.

[00:28:45] Speaker 01:
Yeah.

[00:28:46] Speaker 01:
Count one stands and the counts grouped in the Senate would have been the same.

[00:28:51] Speaker 01:
The arguments would have came, the evidence would have come in.

[00:28:54] Speaker 01:
It wouldn't have just been a count.

[00:28:56] Speaker 01:
It would have come in that this is what he did when he changed that.

[00:28:59] Speaker 03:
That would apply to the other arguments that are unique to that transfer, to that communication with respect to

[00:29:10] Speaker 03:
the escrow account, right?

[00:29:14] Speaker 03:
I'm sorry, Your Honor.

[00:29:15] Speaker 03:
I don't fully understand.

[00:29:16] Speaker 03:
The communication to the Utah Corporation Commission was relevant to the escrow account.

[00:29:22] Speaker 01:
Is that right?

[00:29:23] Speaker 01:
It was, because the escrow agents had looked at it beforehand and said, well, boy, this belongs to Shane Baker.

[00:29:28] Speaker 01:
And then they looked at it later.

[00:29:30] Speaker 01:
So it was relevant.

[00:29:31] Speaker 01:
It would have come in as part of that.

[00:29:34] Speaker 03:
Never mind.

[00:29:35] Speaker 01:
I see that I'm out of time, Your Honor.

[00:29:36] Speaker 01:
We ask the court to affirm.

[00:29:43] Speaker 04:
Let me tell you what is not a traditionally recognized property right, the potential right to bring a future lawsuit.

[00:29:51] Speaker 04:
You won't find no case law and nothing in the historical record suggesting that a potential right to sue somebody is a property right.

[00:30:04] Speaker 04:
Second point.

[00:30:05] Speaker 04:
Judge Hart, do you have a question?

[00:30:06] Speaker 04:
I sense OK.

[00:30:07] Speaker 04:
Second question is Mr. Murray has suggested that the fraud statutes are intended to capture, I think his words were, all the schemes.

[00:30:15] Speaker 04:
That is precisely the lesson that the 40-year game of whack-a-mole that the Supreme Court has played with very talented prosecutors like Mr. Murray.

[00:30:28] Speaker 04:
The Supreme Court restricts the property right.

[00:30:31] Speaker 04:
Prosecutors like Mr. Murray then innovate and find a new property right.

[00:30:35] Speaker 04:
Here it's the right to bring a suit.

[00:30:38] Speaker 04:
And then the Supreme Court narrows it again.

[00:30:41] Speaker 03:
We don't consider cause of action a right, a property right.

[00:30:47] Speaker 03:
You have to disclose it in your bankruptcy.

[00:30:50] Speaker 04:
Yes, undoubtedly.

[00:30:52] Speaker 04:
A disclosure requirement does not give rise to a legally cognizable property.

[00:30:58] Speaker 03:
But in bankruptcy,

[00:31:01] Speaker 03:
the debtor has to disclose causes of action he might have, because those are valuable property to the bankruptcy estate.

[00:31:11] Speaker 04:
Well, and there are information for potential creditors.

[00:31:14] Speaker 03:
I do not think that's... The debtor doesn't have the right to just hide that and then bring a lawsuit and collect the money and escape

[00:31:27] Speaker 03:
the constraints of bankruptcy.

[00:31:29] Speaker 03:
That's a property interest, is it not?

[00:31:31] Speaker 04:
Well, I don't know bankruptcy law, but what I am not going to budge for purposes of the federal fraud statutes... But you're talking about traditional.

[00:31:41] Speaker 03:
And traditionally in bankruptcy proceedings, the cause of action is considered part of the debtor's estate, is it not?

[00:31:50] Speaker 04:
I don't know, Your Honor, to be blunt.

[00:31:52] Speaker 04:
I have never handled a bankruptcy case in my life.

[00:31:55] Speaker 04:
If you find

[00:31:56] Speaker 04:
a binding case that describes a potential right to bring a future lawsuit on a breach of contract action, I've got big problems.

[00:32:05] Speaker 04:
I don't think you'll find that case.

[00:32:07] Speaker 04:
And I don't think you'll find that in the historical, the treatises about property.

[00:32:14] Speaker 04:
I'm over.

[00:32:18] Speaker 04:
Thank you.