[00:00:00] Speaker 02:
is United States versus Martin.

[00:00:02] Speaker 02:
It's 24-3-1-4-0.

[00:00:04] Speaker 02:
And we'll hear from Mr. Bill.

[00:00:20] Speaker 03:
Good morning, and may it please the Court.

[00:00:27] Speaker 03:
Imagine a newlywed couple.

[00:00:31] Speaker 03:
decide to establish a joint bank account right after they get married.

[00:00:35] Speaker 03:
They're young.

[00:00:36] Speaker 03:
They don't have a lot of money.

[00:00:37] Speaker 03:
So between the two of them, they make a rule.

[00:00:40] Speaker 03:
Nobody spends more than $100 without the other one's permission.

[00:00:46] Speaker 03:
The husband is a golf fanatic.

[00:00:49] Speaker 03:
And one day, he's at a store, and he sees a new putter for $200.

[00:00:56] Speaker 03:
He doesn't ask the wife for permission, because he knows he won't get it.

[00:01:00] Speaker 03:
But he writes a check.

[00:01:02] Speaker 03:
for $200 and buys the new putter.

[00:01:06] Speaker 03:
Has the husband just committed bank fraud?

[00:01:10] Speaker 03:
He's a signatory on the account.

[00:01:12] Speaker 03:
He's authorized by the bank to write checks on the account.

[00:01:18] Speaker 03:
Did the husband lack authority to write that check, or did he abuse his authority to write that check?

[00:01:30] Speaker 03:
Ms.

[00:01:30] Speaker 03:
Martin was charged with bank fraud because she had the authority to write checks from her employer.

[00:01:38] Speaker 03:
It was a signatory on the account.

[00:01:41] Speaker 03:
But abused that authority to write checks from that account to pay her personal credits.

[00:01:48] Speaker 03:
No misrepresentations went to the bank.

[00:01:52] Speaker 03:
She didn't claim that she had signatory authority.

[00:01:55] Speaker 02:
If she had said to the bank,

[00:02:00] Speaker 02:
I actually embezzled this check for $1,000.

[00:02:06] Speaker 02:
It's not forged.

[00:02:07] Speaker 02:
Here's my ID.

[00:02:08] Speaker 02:
I want to get $1,000 cash or to put it in my personal account.

[00:02:16] Speaker 02:
Would the bank have honored that check?

[00:02:20] Speaker 02:
Would it have been obligated under your view to honor that check?

[00:02:29] Speaker 03:
I believe the bank's authority in that circumstance, even given that additional information, is simply to compare whether she's a signatory on the account and then honor the check.

[00:02:39] Speaker 03:
Now, practically speaking, the bank likely would have made some inquiries in the face of her statements outside.

[00:02:46] Speaker 02:
Why?

[00:02:46] Speaker 02:
Well, let's say it inquired.

[00:02:47] Speaker 02:
It would have found out, well, OK, it looks like she stole that check.

[00:02:53] Speaker 02:
But you know, she's a signatory on the business account.

[00:02:59] Speaker 02:
And so the real question is, would the bank have been obligated to honor that check?

[00:03:07] Speaker 02:
And if the answer is no, then she would have obtained that check by fraudulent means against the bank, necessarily.

[00:03:20] Speaker 03:
I think, strictly legally speaking, Judge, the answer is yes.

[00:03:23] Speaker 03:
The bank would be obligated to honor the check as long as she remains a signatory on the account.

[00:03:29] Speaker 03:
The bank's job, legally speaking, is very limited under this circumstance.

[00:03:34] Speaker 03:
And if she has a valid signatory on the account, regardless of what happens outside of it, legally speaking, the bank is obligated to honor it.

[00:03:46] Speaker 02:
Would the bank have been aiding and abetting a state crime of embezzlement by allowing her to, knowingly,

[00:03:58] Speaker 02:
to have embezzled money, a state crime, against her employer?

[00:04:04] Speaker 03:
No, Your Honor.

[00:04:05] Speaker 03:
I don't think it would have aided and abetted because its obligations are governed by the signatories to the account and what it has to do.

[00:04:15] Speaker 03:
At that point, it has an automatic superseding duty to honor the check, regardless of what statement she makes when she shows up at the teller window with the check.

[00:04:27] Speaker 03:
In this instance, there's no evidence that any statements about embezzlement or not embezzlement or any inquiry in the bank or communication in the bank happened here.

[00:04:38] Speaker 03:
This was a simple case of the bank getting checks by an authorized signer and honoring them.

[00:04:45] Speaker 03:
Again, no misrepresentations went to the bank.

[00:04:48] Speaker 03:
And there's certainly no misrepresentations that went to the bank that caused it to pay the checks that were

[00:04:53] Speaker 03:
that were delivered to it.

[00:04:54] Speaker 01:
Counsel, can I ask you on that point?

[00:04:56] Speaker 01:
In the plea agreement, Ms.

[00:04:59] Speaker 01:
Martin agreed to certain facts.

[00:05:00] Speaker 01:
And one of the facts was that she, quote, used fraudulent pretenses to obtain money from the banks.

[00:05:06] Speaker 01:
So how do we square that argument with her agreement that she engaged in fraudulent pretenses?

[00:05:12] Speaker 01:
She did nothing beyond just present the check.

[00:05:15] Speaker 03:
Your Honor, I think that, as you'd recognize, that's legal language.

[00:05:21] Speaker 03:
cast in the language of the statute, that fact from the plea agreement.

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And her agreement to that was based on the deficient advice she got from counsel.

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We would not expect a layperson to understand the legal implications of that term or that sentence about what she agreed to.

[00:05:39] Speaker 03:
And had she gotten effective advice from counsel, then she obviously would not have agreed to that statement in the plea agreement.

[00:05:52] Speaker 01:
Yeah, but how can we conclude that?

[00:05:55] Speaker 01:
I mean, Ms.

[00:05:55] Speaker 01:
Penner's affidavit makes clear that in her interactions and discussions with Ms.

[00:06:00] Speaker 01:
Martin, that Ms.

[00:06:01] Speaker 01:
Martin never disputed the facts that she was obtaining all this money for a personal gain that was beyond the authorization, to use your words, that she had in terms of those checks.

[00:06:11] Speaker 01:
So how can we conclude looking at the affidavit that Ms.

[00:06:14] Speaker 01:
Martin would have said, well, now that you tell me what fraudulent pretenses mean, there's no way I can agree to that fact?

[00:06:20] Speaker 03:
I think had she been told what the bank fraud statute was required and what the government was required to prove under that statute, then there certainly would have been an objection.

[00:06:30] Speaker 03:
I don't think there's a lot of dispute between the parties about the factual underpinnings of this offense.

[00:06:36] Speaker 03:
The dispute is whether it was charged as the correct crime and whether that criminal offense, the government could prove the element of obtaining by misrepresentation and

[00:06:48] Speaker 03:
At the very least, Ms.

[00:06:50] Speaker 03:
Martin was owed that advice about that element so she could make an informed decision about whether to accept the plea agreement or not.

[00:06:59] Speaker 00:
So your argument is that even if she admitted her conduct, that conduct wasn't sufficient to constitute a misrepresentation under the statute, and she was misadvised as to that aspect of it.

[00:07:12] Speaker 00:
Correct.

[00:07:12] Speaker 00:
She didn't know the impact of the conduct.

[00:07:15] Speaker 03:
Correct.

[00:07:17] Speaker 03:
She was never informed that one of the elements of the offense of this offense was that the government would have to prove that she obtained bank property by a misrepresentation that would make its way to the bank.

[00:07:32] Speaker 03:
And she was at least owed that explanation of the law before she made a decision about her plea.

[00:07:38] Speaker 00:
You're not suggesting, are you?

[00:07:43] Speaker 00:
focusing in on Judge Melgren's determination that there was an implied misrepresentation here.

[00:07:49] Speaker 00:
So no one suggests there was anything in writing.

[00:07:53] Speaker 00:
No one suggests there was any actual conduct other than just the presentation of the check.

[00:08:00] Speaker 00:
Is that correct?

[00:08:01] Speaker 00:
Correct.

[00:08:01] Speaker 00:
But you're not suggesting, are you, that conduct could never form a misrepresentation?

[00:08:08] Speaker 03:
Oh, no, conduct can form misrepresentations.

[00:08:11] Speaker 03:
There are 10 circuit cases quoted in the government's briefing where it says presenting an instrument coupled with some sort of conduct can create the necessary misrepresentation.

[00:08:22] Speaker 03:
That's just not what happened in this case.

[00:08:25] Speaker 00:
Showing up with the check and standing there with it is not conduct as such.

[00:08:31] Speaker 03:
Correct.

[00:08:31] Speaker 03:
There's no additional assertions or anything outside of the check.

[00:08:38] Speaker 00:
The fact that she did this regularly, nothing like that.

[00:08:43] Speaker 03:
I don't think that there's, given the precedent that a valid check signed by a signatory doesn't contain an assertion, I don't think there's any authority or reasoning that says that cumulative conduct somehow converts what in one instance would not constitute to be an assertion when even one of them wasn't.

[00:09:07] Speaker 03:
In any instance, as our brief puts out, the implied authority argument that the government makes has been rejected any time it's been addressed by the courts just on its own.

[00:09:25] Speaker 03:
Certainly there are cases, as Judge Moritz points out, where conduct coupled with presentation

[00:09:31] Speaker 03:
would equal a false statement or a false representation.

[00:09:34] Speaker 03:
A mere presentation alone by an authorized signatory does not contain some implicit authorization.

[00:09:42] Speaker 03:
Yeah, the most recent case, and I'll supplement it with a supplemental authority letter, was out of the Seventh Circuit just last month.

[00:09:52] Speaker 03:
And US versus Robinson, 161 F fourth, 1069.

[00:09:58] Speaker 03:
where the Seventh Circuit explicitly rejected the implicit authority argument that the government makes here.

[00:10:07] Speaker 01:
Counsel, can I ask you about your prejudice arguments?

[00:10:10] Speaker 01:
Certainly.

[00:10:11] Speaker 01:
It seems, if I make sure I have this correctly, that when you were comparing the prejudice analysis that was done for the tax case accounts versus the non-prejudice analysis, what we don't have for bank fraud, I think you made your point maybe in the reply that

[00:10:28] Speaker 01:
Ms.

[00:10:28] Speaker 01:
Martin says that she would not have gone to trial because any time in prison was too much.

[00:10:32] Speaker 01:
It was sort of all or nothing.

[00:10:34] Speaker 01:
Uh, is that, first of all, did I sort of correctly frame that?

[00:10:38] Speaker 01:
That she would not have gone to trial or that she would have gone to trial, excuse me, because to her, if she had any exposure to prison time, that wasn't going to be worth it for her.

[00:10:47] Speaker 03:
Correct.

[00:10:49] Speaker 03:
Ms.

[00:10:49] Speaker 03:
Martin's position would have been that if she would not have accepted something that, um,

[00:10:57] Speaker 03:
contained the realistic possibility of a term of imprisonment.

[00:11:00] Speaker 01:
So then when we think about any relief to afford to her, we have to find prejudice then on both the tax offenses and the bank fraud count.

[00:11:09] Speaker 03:
Your Honor, I think that because the district court didn't address prejudice as to the bank fraud count, I think the proper course would be to remand it for the district court to examine prejudice after reversing it on its deficient performance.

[00:11:24] Speaker 03:
As to prejudice on the tax count, I think the court should remand it with instructions to the district court to use the appropriate legal standard.

[00:11:35] Speaker 03:
I don't think that this court is in a position in the first instance to make a prejudice determination on either of those counts.

[00:11:48] Speaker 02:
that was advocate with you on the tax scale.

[00:11:52] Speaker 02:
Mr. Brown argued for a firmness on alternative grounds based on harmlessness.

[00:11:59] Speaker 02:
And I didn't see you with a rejoinder in your reply brief on the harmlessness argument.

[00:12:07] Speaker 02:
And we do have some cases

[00:12:09] Speaker 02:
published cases saying that if an appellate doesn't respond in a reply brief to an argument for affirmance on alternative ground, they waive any non-obvious defects in that argument.

[00:12:24] Speaker 02:
So have you waived any non-obvious defects in Mr. Brown's argument on the tax count on prejudice based on harmlessness?

[00:12:33] Speaker 03:
I don't think so, Your Honor.

[00:12:35] Speaker 03:
I think because this Court's long-standing precedent has been

[00:12:39] Speaker 03:
on a question that involves facts that you remand to the district court to make the factual determinations.

[00:12:46] Speaker 03:
Here, the district court used a flawed, what we consider to be an incorrect legal standard to address the prejudice standard.

[00:12:53] Speaker 03:
And so far, the overwhelming majority of this court's precedents say that the proper vehicle is to remand to analyze it under the proper legal standard.

[00:13:05] Speaker 03:
I see I have two minutes remaining, and I neglected to reserve time for rebuttal, so I'll do that now, unless the court has any other questions.

[00:13:14] Speaker 03:
Thank you.

[00:13:23] Speaker 04:
Good morning, Your Honors.

[00:13:24] Speaker 04:
James Brown for the United States.

[00:13:27] Speaker 04:
Your Honors, this court says that for counsel's advice to be deficient under Strickland must be completely unreasonable.

[00:13:34] Speaker 04:
Counsel's advice in this case was not completely unreasonable because it was consistent with this court's own interpretation of 1344-2, as well as this court's case law.

[00:13:45] Speaker 04:
In United States v. Kane, this court said, quote, a defendant's misrepresentation to a bank that he or she is authorized to engage in a particular transaction may constitute a violation of 1344-2.

[00:13:58] Speaker 04:
That language applies to defendant's conduct in this case, and that language in this court's case law provided an objectively reasonable basis for counsel's advice.

[00:14:09] Speaker 04:
Now, could counsel have been more imaginative and advise defendant about all the potential defenses or novel defenses or his interpretation of law offering?

[00:14:19] Speaker 04:
Yes.

[00:14:20] Speaker 04:
But counsel is not required to advise of all potential defenses or novel defenses or unsettled defenses.

[00:14:26] Speaker 04:
Counsel's advice just has to be within prevailing professional norms.

[00:14:30] Speaker 04:
And that's what we have here.

[00:14:34] Speaker 02:
Let me play devil's advocate with you, Mr. Brown.

[00:14:38] Speaker 02:
Now, we do have cases saying that counsel isn't necessarily unreasonable or deficient in failing to present every plausible argument.

[00:14:47] Speaker 02:
But Judge Ebell wrote an opinion in Hurd v. Addison

[00:14:50] Speaker 02:
that said that at Prong One, counsel was deficient because the argument that counsel failed to advise the client about was a very strong argument.

[00:15:02] Speaker 02:
And so it seems to be that there is a continuum.

[00:15:06] Speaker 02:
If it's just simply one of many possible arguments, maybe counsel is a deficient.

[00:15:14] Speaker 02:
But under Herd, if it takes on

[00:15:19] Speaker 02:
If it's a powerful, good argument, you'd have to acknowledge that that counsel was deficient in failing to advise a client of a good argument, right?

[00:15:31] Speaker 04:
In most cases, we would be constrained to agree with that.

[00:15:34] Speaker 04:
But we would also respond that this was not a very good argument.

[00:15:38] Speaker 04:
It was hardly even a colorable argument.

[00:15:40] Speaker 04:
In fact, I don't even think it's a colorable argument when you look at this court's case law.

[00:15:43] Speaker 04:
In the Kane statement that I just quoted,

[00:15:45] Speaker 04:
That basically applies to counsel's conduct.

[00:15:48] Speaker 04:
And then you have four cases from this court where we have implied misrepresentation cases.

[00:15:54] Speaker 04:
And I'm referring to the McDonald case, the Briggs case that was cited with approval in McDonald, the Morgan-Stern case from the Second Circuit that was cited with approval in McDonald, and then the Adams case from the District of New Mexico.

[00:16:07] Speaker 04:
Each of those was an implied.

[00:16:08] Speaker 02:
And they were all pre-law for it.

[00:16:12] Speaker 02:
And McDonald was unpublished.

[00:16:15] Speaker 02:
2006, right?

[00:16:17] Speaker 02:
And so then the other case that was pre-Loughlin, Loughrin was relying on this unpublished pre-Loughrin case, McDonald, right?

[00:16:27] Speaker 02:
You haven't cited anything after Loughlin.

[00:16:30] Speaker 04:
Well, you know, that's correct.

[00:16:31] Speaker 04:
But let me discuss those cases, and then I'll get to law frame.

[00:16:34] Speaker 00:
Why don't you discuss the post-law frame cases from other circuits, such as the one that was just mentioned, or the McDonald case from the District of Virginia, where the court has very clearly said, yes, there is no such thing as implied representation in this very scenario.

[00:16:50] Speaker 00:
I mean, those are post-law frame cases.

[00:16:53] Speaker 00:
Both are published.

[00:16:55] Speaker 00:
That by itself.

[00:16:57] Speaker 00:
And they relied on law frame.

[00:17:00] Speaker 00:
That by itself should be evidence that this was certainly a plausible defense.

[00:17:06] Speaker 00:
It's been made and accepted post-Laufrin very clearly.

[00:17:10] Speaker 00:
And I think you can read the language of the statute and see that it's a plausible offense.

[00:17:16] Speaker 00:
So why was it reasonable not to do that, to read the language of the statute, to think about this in terms of the facts that were before this

[00:17:27] Speaker 00:
with this attorney knew, which is that she was a signatory and had authority to write those checks.

[00:17:33] Speaker 00:
Why was that not a plausible and complete defense that should have been considered?

[00:17:39] Speaker 04:
Two responses, Your Honor.

[00:17:40] Speaker 04:
The first is with regard to the court's questioning about the McDonald case cited by the defendant.

[00:17:45] Speaker 04:
That was decided on May 24th.

[00:17:47] Speaker 00:
I understand that.

[00:17:48] Speaker 00:
But it was decided based on Loughran.

[00:17:51] Speaker 00:
And my point is this court, Judge Melgren could have done the same thing had someone presented him with the Loughran case and made that argument.

[00:18:00] Speaker 04:
Well, but we look at whether counsel's advice is deficient in light of prevailing professional norms.

[00:18:06] Speaker 04:
And when counsel advised definitive this, that was not part of the prevailing professional norms, because that case was not decided.

[00:18:11] Speaker 00:
It wasn't when this case was decided either.

[00:18:13] Speaker 00:
The point is, somebody's got to make the argument.

[00:18:16] Speaker 00:
But that doesn't make it a novel argument.

[00:18:19] Speaker 00:
The fact that no one's made this argument post-Loughran doesn't make it novel or implausible.

[00:18:25] Speaker 00:
Well, this is a very plausible argument that just wasn't made.

[00:18:29] Speaker 04:
Well, we don't agree that it was a plausible argument that just wasn't made.

[00:18:34] Speaker 04:
Council was not completely unreasonable for not making that argument.

[00:18:38] Speaker 00:
I didn't say Council was completely unreasonable.

[00:18:40] Speaker 00:
I'm saying it was a plausible argument and it was a complete defense.

[00:18:44] Speaker 04:
If Council was not completely unreasonable, there's no deficient performance.

[00:18:47] Speaker 00:
Now, with regard to law... I don't think completely unreasonable is the standard in terms of not raising a defense.

[00:18:53] Speaker 04:
It is the standard.

[00:18:54] Speaker 04:
This court says that for counsel's advice to be deficient under Strickland, it must be completely unreasonable.

[00:18:58] Speaker 00:
Well, what is completely unreasonable when a complete defense is potentially obvious from the language of the statute itself and post law firm, which was decided in 2014, is clearly an available argument?

[00:19:11] Speaker 00:
Well, the court keeps saying... What is completely unreasonable?

[00:19:14] Speaker 04:
Well, it has to be like...

[00:19:17] Speaker 04:
Like Judge Baccarat said, we can look at things on a continuum.

[00:19:21] Speaker 04:
At the time of counsel's advice, no court had decided that.

[00:19:24] Speaker 04:
That was a logical reading that he infers from Loughran.

[00:19:28] Speaker 04:
Loughran didn't say that.

[00:19:29] Speaker 04:
Loughran was not an applied misrepresentation case.

[00:19:32] Speaker 04:
And that's why it's distinguishable.

[00:19:35] Speaker 04:
It didn't address checks submitted under false pretenses.

[00:19:38] Speaker 04:
That's what happened in this case.

[00:19:40] Speaker 04:
So a reasonable counsel could look at this and say, hey,

[00:19:42] Speaker 04:
Loughran didn't address a check submitted under false pretenses, as this case does.

[00:19:47] Speaker 04:
In Loughran, the checks were altered or forged.

[00:19:49] Speaker 04:
The falsity was facially evident from the check.

[00:19:53] Speaker 04:
That was the false statement.

[00:19:54] Speaker 04:
A false pretence is a fact that is not disclosed, where somebody has a duty to disclose it.

[00:20:00] Speaker 04:
She didn't disclose that she didn't have the authority from her employer to write any of these checks, and she had a duty to disclose that.

[00:20:07] Speaker 04:
Like Judge Baccarat said, if she had gone to the bank with a check and said,

[00:20:11] Speaker 04:
I don't have authority from my employer to draw this check or cash this check that's a false that would not be a false pretense but she had a duty to disclose that she didn't.

[00:20:23] Speaker 00:
What about the fact that we've defined false representations consistently as either express stated oral statements or not implied contact

[00:20:36] Speaker 00:
conduct, never said implied, but conduct, actual conduct of some sort.

[00:20:41] Speaker 00:
We've never, that I've said, really studied this idea that Judge Melgren came up with that was presented to him by the government that some sort of implied representation, no physical manifestation of that in any way can constitute a false misrepresentation under this statute.

[00:21:03] Speaker 04:
Well, we would disagree that the statute does not include implied representations because the statute uses the term false pretenses.

[00:21:12] Speaker 00:
A false pretence is an implied misrepresentation.

[00:21:17] Speaker 00:
Do you think pretenses and misrepresentations here are one and the same?

[00:21:21] Speaker 04:
No.

[00:21:22] Speaker 04:
False pretenses is distinct.

[00:21:24] Speaker 04:
False pretenses is an implied misrepresentation.

[00:21:28] Speaker 04:
or an implied false statement.

[00:21:30] Speaker 04:
A false representation, on the other hand, is an express misrepresentation.

[00:21:35] Speaker 04:
And I get that from the Baumgartner case that we cite in our brief.

[00:21:38] Speaker 04:
There are two distinct things.

[00:21:39] Speaker 04:
And this court has used implied false representations in four cases.

[00:21:44] Speaker 04:
Well, in one case, McDonald talked about implicit false representations.

[00:21:49] Speaker 04:
In Briggs, which this court cited with approval, talked about implicit misrepresentations.

[00:21:55] Speaker 04:
In Morgenstern, they were implicit misrepresentations.

[00:21:58] Speaker 04:
In the Adams case, the checks were perfectly valid, but there were implicit misrepresentations.

[00:22:03] Speaker 04:
So counsel could look at these four cases and say, hey, and the statement that I just quoted in Cain and say, hey, this is a false representation case.

[00:22:13] Speaker 04:
The Loughran case doesn't cover false pretenses.

[00:22:20] Speaker 04:
There's four cases that do cover false pretenses, and those cases

[00:22:24] Speaker 04:
fit the facts of my case.

[00:22:26] Speaker 04:
And then I have this statement from Kane that I have to consider that comes directly from this court.

[00:22:31] Speaker 04:
How does counsel make an unreasonable decision not to advise a defendant about the defense that was basically first stated in a case decided one and a half years after the defendant entered her plea?

[00:22:44] Speaker 01:
Counsel, can I ask you, though, about the evidence that we have before us, and Ms.

[00:22:49] Speaker 01:
Pinner's affidavit in particular?

[00:22:51] Speaker 01:
As I read the motion to vacate Ms.

[00:22:53] Speaker 01:
Martin,

[00:22:54] Speaker 01:
says explicitly that she was not told that the elements required that she use deception as a way to obtain bank property.

[00:23:02] Speaker 01:
And then I look at the affidavit and Ms.

[00:23:04] Speaker 01:
Pinner doesn't really take on that element at all.

[00:23:07] Speaker 01:
She talks generically about the facts and the evidence meeting the elements.

[00:23:13] Speaker 01:
But she doesn't discuss this particular theory of defense at all.

[00:23:16] Speaker 01:
It's alleged in the motion to vacate.

[00:23:19] Speaker 01:
And there seems to be then some gaps then in whether or not she's even rebutting that allegation.

[00:23:25] Speaker 01:
Am I reading that correctly?

[00:23:29] Speaker 04:
Maybe, maybe not, depending on how the court interprets what I'm going to cite at record volume one, page 162, where Ms.

[00:23:35] Speaker 04:
Penner states that the defendant wrote numerous checks that named her as the payee, which resulted in funds being withdrawn from the employer's bank account.

[00:23:42] Speaker 04:
She did this without authorization and in doing so misrepresented to the employer's banks that she was authorized to receive the funds.

[00:23:50] Speaker 04:
So there you have Ms.

[00:23:51] Speaker 04:
Penner talking about the misrepresentation, the implicit misrepresentation.

[00:23:55] Speaker 01:
She also, though, says that she doesn't talk about case law or review the applicable PIC instructions with her client.

[00:24:02] Speaker 01:
And that kind of stood out to me.

[00:24:03] Speaker 01:
I mean, I'm a Kansas lawyer.

[00:24:05] Speaker 01:
And this is federal court and typically the instructions we come up with for federal offenses are not from the Patterns and Instructions in Kansas.

[00:24:12] Speaker 01:
So at least gives me pause as to whether or not Ms.

[00:24:15] Speaker 01:
Penner is even rebutting the allegation made.

[00:24:18] Speaker 04:
Well, she looked at the statute which talks about false pretenses.

[00:24:22] Speaker 04:
She concluded that the defendant engaged in false pretenses or implicit misrepresentations to get the money.

[00:24:28] Speaker 04:
And we think that that sufficiently shows that her advice was not completely unreasonable, even if she didn't cite any cases in her affidavit or consult a pick, as the court points out.

[00:24:38] Speaker 01:
How do you read the district court's order, though, to not hold an evidentiary hearing?

[00:24:43] Speaker 01:
Judge Melgren sets out the standard, but doesn't actually, as I read it, explain why he doesn't hold a hearing.

[00:24:48] Speaker 01:
So how does the government read that?

[00:24:49] Speaker 04:
The only way we can read it is that counsel's affidavit said that basically the defendant had no memory of the offense anymore because she had a stroke.

[00:24:59] Speaker 04:
And what would be the point of having an evidentiary hearing if you couldn't put on the defendant because she would just say that she can't remember anything from the offense?

[00:25:06] Speaker 04:
So what would be the point?

[00:25:08] Speaker 04:
The court just looked at the offense, but also it was probably an easy case for the court because these are implied misrepresentations.

[00:25:13] Speaker 04:
There's four cases on point for implied misrepresentations.

[00:25:16] Speaker 04:
The statute talks about false pretenses, and false pretenses are implied misrepresentations or implied false statements.

[00:25:24] Speaker 04:
So the court probably thought this is an easy case on the law, and that's the only thing that's an issue.

[00:25:30] Speaker 04:
And the only case the defendant cites is a case cited a year and a half after the defendant entered her plea.

[00:25:35] Speaker 04:
keeping in mind that counsel's advice only has to be reasonable under prevailing professional norms.

[00:25:41] Speaker 04:
And at the time, counsel was not required to read Loughran as even addressing false pretenses or implicit misrepresentations.

[00:25:50] Speaker 04:
It wasn't even applicable.

[00:25:51] Speaker 04:
Now, could counsel have been more imaginative and thought, hey, I can say that Loughran really does address false representations or false pretenses, even though it doesn't talk about them.

[00:26:04] Speaker 04:
And I can say that because this wasn't an express representation, it must apply.

[00:26:09] Speaker 04:
And I can say this, that, or the other thing.

[00:26:11] Speaker 04:
But that doesn't mean that counsel's advice under prevailing, then prevailing professional norms, was unreasonable.

[00:26:17] Speaker 02:
What about, Mr. Brown, a check-kiting scheme?

[00:26:20] Speaker 02:
Let's say, hypothetically, I decide to supplement my income by running a check-kiting scheme.

[00:26:29] Speaker 02:
And I've got an account with Oklahoma Bank.

[00:26:37] Speaker 02:
Have I committed any implied misrepresentations or explicit misrepresentations to the bank?

[00:26:46] Speaker 04:
Well, you know, the court is probably trying to trap me with the Williams case.

[00:26:51] Speaker 04:
Well, gosh, I am not that deep.

[00:26:56] Speaker 04:
OK, that being said, it's not a false statement for 18 USC 1014 under Williams.

[00:27:06] Speaker 04:
Is it a false representation?

[00:27:08] Speaker 04:
It might be.

[00:27:10] Speaker 04:
It might be a representation that the funds are actually there.

[00:27:15] Speaker 04:
Or that the drawer promises to pay those funds.

[00:27:19] Speaker 02:
So it is a fair inference that it is a misrepresentation?

[00:27:26] Speaker 04:
For the bank fraud statute, not for 1014, which is the false statement statute.

[00:27:30] Speaker 02:
Okay, so why in footnote four of law three did the Supreme Court say that every single circuit court to address the issue has found that a check hiding scheme does not violate 1344.2?

[00:27:41] Speaker 04:
Well, you know, that's what the court was saying and they were saying this within the context of the false statement statute and whether an insufficient... The state... Yeah, the same statute they were talking about.

[00:27:51] Speaker 04:
An insufficient funds is a false statement statute.

[00:27:53] Speaker 04:
And I understand what the court is saying, but I'm saying that there's another way to look at it.

[00:27:57] Speaker 04:
And I can't explain why every other court did that.

[00:27:59] Speaker 04:
But I can see the court's point.

[00:28:01] Speaker 04:
It's very well taken.

[00:28:02] Speaker 04:
But I don't think we need to get there.

[00:28:04] Speaker 02:
It's not a point.

[00:28:05] Speaker 02:
Slow down.

[00:28:06] Speaker 02:
We'll give you more time, as much time as you want.

[00:28:08] Speaker 02:
I'm not trying to trick you.

[00:28:10] Speaker 02:
I'm really not.

[00:28:11] Speaker 02:
I was just joking, actually.

[00:28:12] Speaker 02:
I know.

[00:28:14] Speaker 02:
But I'm just really trying to ask you a question.

[00:28:17] Speaker 02:
And I'm not sure that we're communicating.

[00:28:20] Speaker 02:
So I just wonder.

[00:28:22] Speaker 02:
If this is a misrepresentation, and if the Supreme Court implicitly is saying every single circuit court to address the issue has found that that scheme, despite the implicit misrepresentation that's inherent, does not violate the very statute that we're talking about, 1344-2, I'm really trying to figure out how do I reconcile footnote four with your argument.

[00:28:48] Speaker 04:
Well, you know, I would have to

[00:28:50] Speaker 04:
look at the cases that the court is citing.

[00:28:53] Speaker 04:
I haven't looked at those cases or looked at the basis for those court's decisions.

[00:28:58] Speaker 04:
I suppose the court can say that if somebody writes a check for $1,000 and they have $10,000 in their account, is that check a false statement?

[00:29:06] Speaker 04:
That check basically promises whoever the payee is that they have $1,000 in their account because the check is a promise to pay.

[00:29:14] Speaker 04:
Is the promise to pay a misrepresentation

[00:29:19] Speaker 04:
It could be.

[00:29:20] Speaker 04:
Is it a false statement?

[00:29:21] Speaker 04:
No, because Williams says it's not a false statement.

[00:29:25] Speaker 04:
If the check is forged, then we know it's a misrepresentation or a false statement under Loughran, right?

[00:29:30] Speaker 04:
So there's some argumentative wiggle room there to flesh out exactly what is what.

[00:29:36] Speaker 04:
But here, all we have to know, we have to decide whether counsel's advice was completely unreasonable.

[00:29:42] Speaker 04:
It was not completely unreasonable under Loughran.

[00:29:45] Speaker 04:
It was not completely unreasonable in the four cases that I've been talking about.

[00:29:48] Speaker 04:
It was not completely unreasonable under the plain language of the statute which talks about false pretenses.

[00:29:55] Speaker 02:
What about Williams?

[00:29:58] Speaker 02:
Now, it's an old case, but it doesn't say that a check doesn't contain any representation whatsoever.

[00:30:05] Speaker 02:
It can't be true.

[00:30:06] Speaker 04:
Council was not required to give any credit to those statements because, number one,

[00:30:11] Speaker 04:
That was an 18 USC 1014 case in number two.

[00:30:14] Speaker 00:
Since when does that matter?

[00:30:16] Speaker 00:
Since when does it matter?

[00:30:17] Speaker 00:
Since when does it matter that a statute that is an entirely different statute but might contain a similar false misrepresentation type aspect that would clearly apply to this statute or might clearly apply?

[00:30:36] Speaker 00:
And people have been making that argument and winning.

[00:30:40] Speaker 00:
As defense counsel, can you just kind of put blinders on and say, well, I'm going to look at this statute, but I'm not going to look at anything else that could be related in the bank fraud area, because I don't need to look at those to represent my client adequately.

[00:30:55] Speaker 00:
Is that what you're saying?

[00:30:56] Speaker 04:
To that I would say look at footnote five of our brief, where the law firm court uses the term false statement and false representation repeatedly to describe a forged or altered check.

[00:31:06] Speaker 04:
The law firm's use of that term to describe a check

[00:31:08] Speaker 04:
is exactly contrary to Williams.

[00:31:10] Speaker 04:
That's why counsel was not unreasonable in not relying on Williams, which addressed a different statute.

[00:31:16] Speaker 04:
Apparently, the Supreme Court thought the distinction mattered because they said a check can be a false statement or false representation under 1344.

[00:31:22] Speaker 00:
I agree there may be some inconsistency between Williams and Loughran.

[00:31:29] Speaker 04:
And counsel is not unreasonable for saying, there's an inconsistency here.

[00:31:32] Speaker 04:
I'm going to go with 1344.

[00:31:33] Speaker 00:
Well, we don't even know that.

[00:31:34] Speaker 00:
I mean, I guess I'm saying to you, we don't have any idea if there was any attempt whatsoever for counsel to even, that counsel even made any evaluation.

[00:31:44] Speaker 00:
Based on her affidavit, we certainly don't understand that.

[00:31:49] Speaker 00:
And you're basically saying it's totally reasonable for counsel to consider all of these things and then rule them out.

[00:31:58] Speaker 00:
That's not really the standard, is it?

[00:32:00] Speaker 04:
Well, the standard is whether counsel's advice was objectively clear, completely unreasonable.

[00:32:06] Speaker 00:
And there was no advice here, apparently.

[00:32:09] Speaker 04:
There was advice, if you look at the affidavit, that they talked about the elements, and she talked about misrepresentations, and she thought that... Yeah, no advice that this may not be a misrepresentation, that her conduct

[00:32:24] Speaker 00:
might not form a misrepresentation under this statute.

[00:32:28] Speaker 00:
No advice like that, and apparently no consideration of that.

[00:32:35] Speaker 04:
There had to have been some consideration of it, because we have counsel's representation in the affidavit that she considered that the defendant made misrepresentations

[00:32:44] Speaker 04:
And she defrauded the bank by false pretenses.

[00:32:46] Speaker 00:
She accepted, counsel did, that those misrepresentations apparently were sufficient, implied misrepresentation.

[00:32:52] Speaker 04:
She thought they met the definition of false pretenses, and that's what the statute criminalizes.

[00:32:57] Speaker 04:
I see my time is up, and I thank the panel for the extra time.

[00:32:59] Speaker 04:
Thank you.

[00:33:07] Speaker 02:
Mr. Bail, I just want to tell you, it was in a moment

[00:33:12] Speaker 02:
temporary insanity that I told Mr. Brown that you could have as much time as you wanted.

[00:33:18] Speaker 03:
I was going to insist on equal treatment.

[00:33:21] Speaker 02:
I know.

[00:33:21] Speaker 02:
And that's why I wanted to plead insanity to that.

[00:33:28] Speaker 03:
I think Judge Moritz's last exchange with the government really encapsulated the issue, at least as it goes to the bank fraud, is that, you know,

[00:33:39] Speaker 03:
right or wrong, whether it ultimately would have prevailed or not.

[00:33:43] Speaker 03:
It was a plausible defense, and Ms.

[00:33:46] Speaker 03:
Martin should have been informed about it before making a decision about how to plead.

[00:33:52] Speaker 03:
And just to give some context about whether it would have been obvious or should have been obvious, in that Robinson case from the Seventh Circuit that I just mentioned

[00:34:02] Speaker 03:
The Seventh Circuit found it was plain error for the district court not to sua sponte enter a judgment of acquittal based on the same facts.

[00:34:11] Speaker 03:
So just to give you an idea of how obvious it was, and I can't substitute my own experience or judgment with anybody else's, but just looking at the Loughran case,

[00:34:26] Speaker 03:
It doesn't seem like there has to be much extrapolation from the statements of the Supreme Court there to Ms.

[00:34:33] Speaker 03:
Martin's case to realize Loughran gives you a viable and complete defense.

[00:34:40] Speaker 03:
I mean, the statements in Loughran are on the head saying this is what is required for a conviction under this statute.

[00:34:48] Speaker 03:
And it's not necessarily phrased in murky 19th century language either.

[00:34:53] Speaker 03:
It's pretty stark.

[00:34:56] Speaker 00:
Isn't there a conflict between Williams and Loughran in the sense that Williams said there's simply no factual assertions at all when in check?

[00:35:05] Speaker 00:
There's nothing that can be characterized as true or false.

[00:35:10] Speaker 00:
And yet, then you have in Loughran the court saying, well, at least the signatory aspect of it can be a misrepresentation.

[00:35:21] Speaker 00:
True or false that you have authority to

[00:35:25] Speaker 00:
as a signatory, isn't that inconsistent by itself?

[00:35:30] Speaker 03:
I think at first blush, yes, but putting them in context, no.

[00:35:34] Speaker 03:
And I see I'm about to elapse my time, so if I could have some time to respond.

[00:35:39] Speaker 03:
Sure.

[00:35:39] Speaker 03:
Thank you.

[00:35:42] Speaker 03:
The context of Williams was in a check-cutting scheme, right?

[00:35:45] Speaker 03:
So in that case, the court's dealing with checks that are signed by a valid authorized signatory.

[00:35:52] Speaker 03:
Right?

[00:35:52] Speaker 03:
And so just the face of the check, this is a command by a valid person to transfer money to this other party.

[00:35:59] Speaker 03:
There's no statement of fact within there.

[00:36:01] Speaker 03:
A forged check, though, is different because it itself is false because the person is purporting to be someone they're not and have the authority to command the bank to transfer the funds.

[00:36:12] Speaker 03:
So I think once you put the context of what Williams and his project were into, I don't think there's a conflict between the two.

[00:36:18] Speaker 00:
I get the context.

[00:36:18] Speaker 00:
I just think the statement was broader.

[00:36:21] Speaker 00:
as I read it in Williams, maybe than it needed to be.

[00:36:26] Speaker 03:
It would have been better if there had been some explanatory clause in the beginning of the no check can be a false statement.

[00:36:35] Speaker 03:
But I think in the context of what they were dealing with, it's clear that they're talking about, under those facts, by an authorized signatory and everything else, the check is an altered, it's not forged, on its face.

[00:36:46] Speaker 03:
It's a valid instrument.

[00:36:53] Speaker 03:
Thank you very much.

[00:36:55] Speaker 02:
Thank you It's very well presented by both sides in by the way, mr.. Bell do you think in the next?

[00:37:03] Speaker 02:
Say sometime this in the next three days.

[00:37:06] Speaker 02:
Could you give us 28 J letter?

[00:37:08] Speaker 02:
With that set I guess it's that 7 circuit site and Can you do me a favor and not include a whole bunch of argument?

[00:37:16] Speaker 02:
All we need is that okay is that soft?

[00:37:22] Speaker 02:
All right.

[00:37:22] Speaker 02:
Thank you, counsel.