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Case number 18-3079, United States of America versus Anthony J. Ferreri at balance.

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Ms.

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Taormina for the appellant, Mr. Smith for the appellate.

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Ms.

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Taormina, good morning.

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You may proceed.

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Good morning.

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May it please the court.

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Rosanna Taormina from the Federal Public Defender's Office for Appellant, Mr. Anthony Ferreri.

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I'd like to reserve two minutes for rebuttal.

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The United States as payee currently has four separate but overlapping money judgments seeking to discourage Mr. Ferrari and his two co-conspirators of the ill-gotten gains they obtained through their involvement in the scheme to defraud to which they each separately pleaded guilty.

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The subject of this appeal is the $3.6 million forfeiture order obtained in the context of Mr. Ferrari's criminal case here in the District of Columbia.

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But before the government obtained that order, it also separately obtained civil disgorgement orders in the Southern District of Florida for broader conduct encompassing the criminal conduct charged in DC in pre-judgment or pre-interest amounts of $1.8 million for Mr. Ferreri, a partially overlapping $3.4 million for Paul Herreri, and $82,500 for Douglas Zemsky.

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The government thus has outstanding money judgments totaling $8.9 million, with no offsetting or contribution provisions, where there is no allegation that Mr. Ferreri and his co-conspirators benefited from their scheme either individually or combined anywhere near that amount.

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Although, Ms.

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Tearmina, in the briefing in this case, the government has said that it does agree to or would agree to some offset and has consented, as I understand it, to the district court entering an order to that effect.

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So it would be helpful if you would focus on were that to happen, what would be left?

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Sure.

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Yes, Your Honor.

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While we obviously agree that there should be an offsetting provision for Mr. Ferrari's payments in the Southern District of Florida,

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The government did not address and has not conceded what we believe would need to also happen would be offsetting payments, offsetting Mr. Ferreri and Mr. Zemsky's payments in the Southern District of Florida towards their disgorgement order, offsetting Mr. Ferreri's

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forfeiture order as the $3.6 million amount purportedly represents collective gains of the three co-conspirators.

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So there would also need to be the contribution offsetting provision as well.

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What then remains- If that were part of what the government were willing to agree to on, as you say, on the notion that the joint and several liability against Ferrari and his criminal case

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counts gains of, is it Harari and Zemsky?

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So if the government were to agree with contribution being counted against Mr. Farari's forfeiture liability, would there be any prejudice remaining to Mr. Farari?

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There would be, unless there was one additional agreement.

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The prejudice that would be remaining is that he would then have, he has a $3.6 million forfeiture order on top of the $3.6 million restitution order.

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Now we absolutely concede that the government can collect restitution goes to the victims, forfeiture goes to the government.

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Now there is a provision in section 981 that authorizes the attorney general to transfer forfeited property or monies to the victims such that any forfeited money would essentially offset restitution.

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And if that happened in this case, if that was definitely going to happen, then there would really not be any prejudice to Mr. Ferreri because then he would

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that $3.6 million would only, even though it would sound in forfeiture and restitution, he would only be paying it once.

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And no matter what, he has to pay the $3.6 million restitution.

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I thought they'd already agreed.

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I'm sorry, Tindra.

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No, please.

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I thought that that was what the government did already clearly agree to was that any amount paid by Mr Ferrari, which I understand under federal law would first be credited toward the restitution amount would be would offset his forfeiture liability.

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First of all, I know that the the

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Two things, that agreement is not self-executing.

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No, no, no.

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But I'm assuming that they would be willing to jointly move the district court to have an order entered to that effect.

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Yes, which, yes, I know that that agreement accounts for prospective payments.

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I will certainly,

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While Mr. Smith is arguing, I will certainly confirm that that agreement also accounts for payments in the future as opposed, sorry.

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The agreement accounts for past payments because Mr. Ferreri before entering into this agreement made several payments to individual victims that were never credited to him.

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So I know that agreement accounts for those payments.

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I have to make sure that it also accounts for the perspective.

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Because that that agreement wasn't the court didn't didn't enter that agreement.

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It's not

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Currently, I think, like I said, I don't believe it's self-executing.

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I've talked to the clerk's office, and they need the court to sign off on it.

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And he declined to do so.

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We can obviously ask Mr. Smith about this.

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But I mean, it's really three buckets, as I understand it.

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It's before the agreement, after the agreement, but before now, or before any district court order, and then from any district court order going forward into the future.

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And we'll hear from Mr. Smith whether that's something the government would agree to.

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And if not, why not, on which part?

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And certainly, to be clear, that is not to concede that the forfeiture order is of $3.6 million is correct.

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It's only, I think, agreeing to the fact that there would be no tangible prejudice if it remained in effect.

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So I still believe that the forfeiture order is incorrect at $3.6 million.

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It should be

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We would need further development on exactly what it should be, but it should sound in the $1.2 million range referencing the Southern District of Florida pleadings.

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But I do concede that there would be no tangible prejudice if the government doesn't plan to collect twice the forfeiture on top of the restitution.

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do want to point out that we understand that the government can collect restitution and forfeiture separately.

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And that's what we are worried about in this case, because like I said, if it collects, right now it has several outstanding orders from numerous people, none of which reference each other.

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And Mr. Ferrari, at the very least,

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is on the hook for much more than he obtained through the scheme to defraud.

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But absolutely, Your Honor, if those agreements were in place, there would be no tangible prejudice to Mr. Ferrari.

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The government does also concede at this point, not in this point in the proceedings, but at this point in the state of the law that the Supreme Court

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the Supreme Court's holding in Honeycutt does apply to the forfeiture statutes in this case, which would prohibit, at least prospectively, the forfeiture of money and or property under a theory of joint and several liability.

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So they do agree that if this case were in a different posture, if we were on plain error review, that that forfeiture amount would be wrong.

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We are in a different posture.

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We are in ineffective assistance.

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But I believe that the fact that the error is plain also informs the deficiency of the council's deficiency.

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Now, if the case were brought today, the error would be plain.

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But at the time, it was pre-Canoflores and pre-Honeycutt.

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And so my understanding is that under our case law, it wouldn't have been plain error.

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But is it nonetheless an effective assistance?

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And how so?

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Well, that's what we argue.

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Yes.

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I would say I wouldn't necessarily concede that it wouldn't be plain error.

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There's case law in this circuit that acknowledges, and I believe that, I know we cite one case in our brief, I believe it may be Soto, but there's also, I know in United States versus Lori's,

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concurrence that details this, that even in the absence of binding precedent, and even where there's conflicting out-of-circuit precedent, if we're talking about plain textual language, that an error can still be plain, that this court can recognize the error as plain, but even so.

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You focus on the language, but the word obtained doesn't appear in the statute here.

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The word that was really the focus of the kind of florist

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And so it has to be more conceptual, doesn't it?

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Your argument has to be, well, what forfeiture is, is the, you know, having in hand or getting or taking or obtaining property and that therefore it should be measured differently from the victim's loss, which is, you know, I think your brief does a pretty good job of

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of spelling that out.

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But then the question is based on what legal sources was that an error that was sufficiently evident that it should have been raised by competent counsel.

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Sure.

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Well, two answers to that.

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Well, one, the government does concede that Honeycutt now does answer this question.

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So I'd be curious why the government takes that position itself.

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But my answer is to the question

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outside of that are the fact that there are, the forfeiture allegation in this case, the plea language, and then the consent order of forfeiture itself uses the words obtained directly and indirectly.

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It uses the words that are in, that are the operative language in Honeycutt.

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So the actual, even if council didn't look up the statutes, the actual documents in this case that are binding, the plea documents,

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most operatively uses that language.

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Second, 981 is a civil forfeiture statute.

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It needs to be incorporated into the criminal proceedings through the other statutes that the government cites in the forfeiture allegation and in the plea document and in the consent order forfeiture.

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And those statutes do use the word obtained.

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So I think that that may be that may be one of the reasons that the government is conceding that honey cut does does govern but the government itself who wrote the plea agreement use the word obtained in its plea agreement so even on the

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that Mr. Ferrari agreed to, it says that he's agreeing that this amount represents the money that he obtained through the results of the scheme.

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And that's just not the case.

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And I don't believe that the government believes that he obtained that amount of money either.

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Let me ask you, counsel, about this attempt, I guess, by Judge Sullivan to transfer jurisdiction to the Eastern District of New York.

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He hasn't done it on the DDC docket yet.

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So we have jurisdiction.

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But tell us what you know about this, because why should we tie the hands of the East District of New York?

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My understanding is that that is a transfer of jurisdiction only for purposes of supervision.

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So it's not a transfer of the entire of the

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of the case, it's a transfer of supervision so that the Eastern District of New York can supervise Mr. Ferreri, because that's where he lives.

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And that commonly happens in cases where our clients do not live within the jurisdiction.

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They're supervised outside of the jurisdiction.

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And so you transfer jurisdiction for supervisory purposes.

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But the case remains here.

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I apologize.

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That has not been effected yet.

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My understanding is that Mr. Ferrari's probation officer is in New York.

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He's not being supervised by DC.

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But again, the case itself hasn't been transferred.

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So my understanding is in light of that, if Mr. Ferrari were to violate his supervised release, he would be violated here in DC before Judge Sullivan and not New York.

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All right.

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That is just my understanding.

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So this is a limited transfer of jurisdiction for supervision, which hasn't been effected.

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And when it is effected, it has no relevance to the issue we're dealing with, the forfeiture and restitution.

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Yeah.

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All right.

[00:14:40] Speaker 02:
Yeah.

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That is my understanding that it would have no bearing on this court's jurisdiction.

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Judge well, do you have any more questions?

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Or do you have any questions?

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I do not.

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Thank you.

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All right, Mr. Smith.

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Thank you.

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Mr. Smith.

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Thank you very much, your honor.

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May it please the court?

[00:15:01] Speaker 04:
Peter Smith on behalf of the United States.

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District Court did not err in rejecting appellant's ineffective assistance of counsel claim.

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And I'll address initially the deficient performance prong of the Strickland analysis.

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The defense counsel made a reasonable strategic decision to advise appellant to accept the very favorable plea offer from the government and not to further contest what the parties below described as the loss amount, which was

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All of these things put together in the government's plea offer to appellant, which included the forfeiture and included the restitution amount and it included the terms of the offenses to which appellant pled guilty and other benefits he received in terms of his guideline range.

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For example, the prospect of a 5K departure from

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the otherwise applicable guideline range.

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Both during the evidentiary hearing in this case, both defense counsel and Apollo himself testified that the government insisted on what they called the loss amount, which was both the same amount for the amount of forfeiture and for the amount of restitution.

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And that did not give defense counsel room to further negotiate that amount.

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The government's

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plea offer was tendered with a two-day turnaround and defense counsel and appellant had to make that decision quickly.

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So it was certainly a reasonable strategic decision on counsel's behalf.

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And then I wanted to make a couple of points about- Before you move on- Mr. Smith, could I- Go ahead.

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Judge Rao, go ahead.

[00:16:52] Speaker 01:
Oh, thank you.

[00:16:53] Speaker 01:
Mr. Smith, I had a question about

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the basis for the government seeking forfeiture here.

[00:17:02] Speaker 01:
So the government cites 28 USC 2461C, which sets out the requirements for forfeiture.

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And then it cites 18 USC 981, which provides for forfeiture for certain offenses.

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Offenses doesn't include mail fraud, the offense that

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Ferrari pleaded guilty to.

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So I'm wondering what the statutory, is there another cross reference for why the government can seek forfeiture for mail fraud here?

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I guess I have two responses, Your Honor.

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First of all, I don't think Appellant has raised that argument that the government lacks authority for the forfeiture award.

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And my understanding from briefing this case was that

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there was a basis that the fraud, the count of conviction, the mail fraud was a basis for forfeiture.

[00:18:03] Speaker 01:
So under what statute?

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I mean, I think so.

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I mean, forfeiture is a pretty serious penalty.

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So it seems the government should know what statute it is imposing forfeiture under, whether or not the appellant raises that.

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I understand, and all I'm saying is I don't know off hand.

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I remember when preparing the government's brief that I looked at the statutory authority, and I believed that there was authority for that.

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But since appellant hasn't briefed that or raised that argument on appeal, I didn't look at that in preparation for today's argument.

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But I believe that there is authority for that.

[00:18:44] Speaker 01:
Okay, that does seem worrisome to me that the government can't state the statutory authority for its forfeiture penalty.

[00:18:53] Speaker 01:
It seems like that should be a pretty straightforward question.

[00:18:58] Speaker 04:
Well, it would be, Your Honor, if a propellant were raising a challenge to the forfeiture award or the judgment, but he's not.

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He's raising an ineffective assistance of counsel claim.

[00:19:08] Speaker 04:
I understand that.

[00:19:10] Speaker 04:
Okay, and under that claim, we would be looking at whether counsel's actions were reasonable, both on the deficiency prong and then whether a pollen has shown a reasonable probability of a different result on the prejudice prong.

[00:19:24] Speaker 00:
So, Mr. Smith on the on the, you know, you talk about the

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the benefits that Mr. Ferreri obtained.

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And it does seem like if this were, in fact, a strategic decision, that it might be reasonable.

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But the record really shows, as you mentioned, and I appreciate the accuracy and fastidiousness of your characterization, that you talked about what the court and the parties characterize as the loss amount.

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And it's very clear reading the record that they were really equating

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loss amount and the amount gained unlawfully gained through this conduct.

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And so it's hard to say that there was even consciousness of this, what we now know in light of kind of Flores and Honeycutt to be an error, that there was even consciousness and therefore a strategic decision being made at the time.

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That one could characterize as as reasonable or not.

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I mean, if it's a kind of error that the nobody's really paying attention to and counsel for Mr. Ferrari had said to the government.

[00:20:36] Speaker 00:
Look, you know, the total amount.

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In terms of restitution should be the three point

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six or eight, but six.

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But the forfeiture amount, because it's measuring something different, should be lower.

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It's not clear that the whole deal would have fallen apart and that the benefits that Mr. Ferrari stood to gain from pleading would have gone away.

[00:21:00] Speaker 00:
So how do you respond to that concern about effectiveness or not?

[00:21:06] Speaker 04:
Well, I think I have three responses, Your Honor, starting with the last part of Your Honor's point.

[00:21:11] Speaker 04:
I think it is speculative to think that the government that had defense counsel taken on the forfeiture fight that the government would have simply acceded to that and not otherwise changed the terms of the plea agreement.

[00:21:24] Speaker 04:
I think that's purely speculation.

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And under the Strickland standard where a pollen bears the burden of showing a reasonable probability of a different result, he hasn't proven that.

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And then I have two other responses.

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One is that the government treated all of these amounts

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as part of its plea agreement.

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So I guess part of my response is that, that defense council had to play on the government's playing field, given the terms of the plea offer.

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The other part of my response is that there was a reason that all of the parties below used these, the term loss amount as sort of heuristic to mean all of these different amounts.

[00:22:09] Speaker 04:
And that's because

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on the facts of this case, the loss amount and appellant's proceeds were the same.

[00:22:16] Speaker 04:
Appellant's scheme was one where he sold worthless stock to his clients.

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So it seems to me that the victim's losses in this case were the same as appellant's proceeds.

[00:22:30] Speaker 04:
And therefore there was no- Really?

[00:22:32] Speaker 00:
Because the proceeds, he guides his clients.

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to buy stock that aren't worth what they're supposed to be worth.

[00:22:42] Speaker 00:
The sellers of the stock or the co-defendants actually received that money from Mr. Ferrari's clients.

[00:22:51] Speaker 00:
Mr. Ferrari never himself in any kind of ownership terms received any of that money, right?

[00:22:58] Speaker 00:
He gets hitbacks then from the co-defendants, but the amount that he ever had in his

[00:23:06] Speaker 00:
possession and control wasn't the entire loss amount, was it?

[00:23:11] Speaker 04:
Yeah, I would agree with that.

[00:23:13] Speaker 04:
And I would say that he got something like $820,000 from Ferrari.

[00:23:20] Speaker 04:
I think what the court is referring to or suggesting is the joint several liability issue.

[00:23:26] Speaker 04:
The forfeiture amount is clearly predicated on joint several liability, which asks

[00:23:33] Speaker 04:
You know, has been discussed a little bit earlier this morning was proper at the time of the plea agreement and a palance has made this argument on appeal.

[00:23:44] Speaker 04:
many years later that councils should have somehow anticipated the result in Cana Flores, but it simply isn't, it wasn't at that time that obvious that appellant's council should have anticipated that.

[00:23:58] Speaker 04:
It was a much more mercantile issue.

[00:24:00] Speaker 04:
And also this was in the context where appellant received a very favorable plea offer.

[00:24:08] Speaker 04:
Appellant and appellant's council were both focused on

[00:24:12] Speaker 04:
reducing appellant's term of incarceration.

[00:24:15] Speaker 04:
Each of the dismissed accounts, for example, the mail fraud and mail fraud accounts, I believe, were a 20-year maximum term of incarceration.

[00:24:23] Speaker 04:
And appellant also had the prospect of the 5K departure from the guidelines range.

[00:24:30] Speaker 04:
He also got an adjustment for accepting responsibilities.

[00:24:36] Speaker 04:
So he did get an extremely favorable fee.

[00:24:40] Speaker 04:
And when you're evaluating ineffective assistance, you've got to consider that context.

[00:24:44] Speaker 00:
Of course, of course.

[00:24:46] Speaker 00:
I wonder if you could address the points that we asked Ms.

[00:24:52] Speaker 00:
Termina about in terms of the government's, I think, quite reasonable

[00:24:58] Speaker 00:
Proposal to offset and just you know the ineffective assistance issue we could we could Theoretically dispose of it on the basis of lack of prejudice But that would require us to determine that there was in fact a lack of prejudice and I'm not sure that what the government's offering is sort of all

[00:25:19] Speaker 00:
eliminates what I think of it, of perhaps as at least three separate sources of prejudice.

[00:25:24] Speaker 00:
So could you address what the government is willing to move the district court to do in terms of counting the various relevant payments here?

[00:25:36] Speaker 04:
Yes, I understood that government's offer, which is set, I don't know it offhand, but the exact

[00:25:47] Speaker 04:
The prosecutor's statement is recited in the government's brief exactly what he agreed to end the citation for it.

[00:25:54] Speaker 04:
And my understanding of that is that any amounts of power pays, either in disgorgement or in forfeiture or in restitution would be offset against the other.

[00:26:06] Speaker 04:
And what the prosecutor was saying during the remand hearing was that the government's already done that for the payments appellant had made previously.

[00:26:15] Speaker 04:
And that I understood the prosecutor to be saying that any subsequent payments would also be offset.

[00:26:22] Speaker 04:
And that was the discussion that we had, we meaning U.S.

[00:26:26] Speaker 04:
Attorney's Office internally in preparing a brief where we said,

[00:26:30] Speaker 04:
that we understood that to be the case and that we would agree to the entry of an amended order, making that clear, that option clear.

[00:26:40] Speaker 00:
I don't know if you have authority to respond, but one of the points that Ms.

[00:26:47] Speaker 00:
Teramina raised was, given the claim of ineffectiveness with respect to the joint and several liability for restitution,

[00:27:00] Speaker 00:
The briefing, the government's briefing doesn't undertake to credit any payments, however unlikely that Mr. Harari or Zemsky might make to satisfy their obligations, restitution obligations.

[00:27:16] Speaker 00:
In other words, part of the amounts on which the joint sever liability, forfeiture liability against Ferrari are based.

[00:27:24] Speaker 00:
And I don't know if the government, I mean, that would be,

[00:27:28] Speaker 00:
a prejudice claim that, and I wonder if the government's in a position to say that were they to be able to make payments against their obligations, would those also be credited against Mr. Ferrari's joint central forfeiture liability?

[00:27:46] Speaker 04:
Well, the short answer, Your Honor, is that we didn't discuss that beforehand, so I wouldn't know the government's position on that.

[00:27:53] Speaker 04:
The reason we didn't is because I had never heard that

[00:27:57] Speaker 04:
any mention of that sort of offset until today.

[00:28:01] Speaker 04:
I know that Appellant Challenge joined the idea of joining several liability and argued that defense counsel should have anticipated that, but I've never heard the argument about offsetting payments that Harari or Zemsky made until today.

[00:28:20] Speaker 04:
But I would add a couple of things to my response.

[00:28:23] Speaker 04:
And one is that,

[00:28:25] Speaker 04:
The forfeiture judgment itself and the restitution order, both of those orders, which are part of the court's judgment are not

[00:28:35] Speaker 04:
before this court in the sense that Appellant can directly challenge those orders.

[00:28:40] Speaker 04:
And he hasn't on appeal.

[00:28:42] Speaker 04:
He's raised an ineffective assistance claim.

[00:28:44] Speaker 04:
And I would wonder whether Appellant's new argument about prejudice is really a prejudice argument or whether it's really a challenge to the judgment or those orders over which this court lacks jurisdiction.

[00:28:59] Speaker 04:
Not only because Appellant never raised it, but because

[00:29:03] Speaker 04:
Appellant can't challenge those orders directly.

[00:29:06] Speaker 04:
He can only raise an ineffective assistance challenge.

[00:29:09] Speaker 00:
Right.

[00:29:10] Speaker 00:
And I mean, I guess

[00:29:13] Speaker 00:
I mean, I think they're before us in the sense that were we defined in effectiveness with respect to either of the two related theories, which I understand to be one that it's double counting against Mr. Ferrari to make him liable both for disgorgement and criminal forfeiture.

[00:29:37] Speaker 00:
And two, just looking at the criminal forfeiture that it was ineffective not to limit his forfeiture to his own gains and therefore the joint and several issue, the failure to sort of push back or at least raise or identify or even be aware of that.

[00:29:55] Speaker 00:
but also have been ineffective.

[00:29:57] Speaker 00:
And to the extent that he's making an ineffective assistance of council claim with respect to one or both of those, if it were a meritorious claim, then the order would be before us, no?

[00:30:07] Speaker 00:
I mean, I'm assuming that he, so in talking about the prejudice prana, obviously he doesn't get there unless he has crossed the threshold of ineffectiveness.

[00:30:21] Speaker 00:
But were the government voluntarily willing to make an undertaking

[00:30:24] Speaker 00:
that would eliminate the prejudice that we would need to reach that threshold issue.

[00:30:32] Speaker 00:
So I'm just trying to explore what really is before us in light of the undertakings.

[00:30:38] Speaker 04:
I understand.

[00:30:38] Speaker 04:
I mean, if the government did it, if the government did that, I suppose that would solve part of the court's issue.

[00:30:48] Speaker 00:
Or could it co-resolve the whole case?

[00:30:50] Speaker 00:
That's what I'm exploring.

[00:30:51] Speaker 00:
I'm trying to figure out what actually we have to decide.

[00:30:54] Speaker 04:
Yeah, no.

[00:30:54] Speaker 04:
OK, I see what you're saying in terms of the prejudice.

[00:30:57] Speaker 04:
I mean, if the government did that, it would obviously sort of mute this question.

[00:31:01] Speaker 00:
Right.

[00:31:01] Speaker 00:
And I just wonder what interest the government has in resisting that, because it seems like it's, well, I'm just asking you, what is the government's interest in resisting that?

[00:31:12] Speaker 04:
Well, on the first part of the court's question about the offset of disgorgement and the forfeiture, we've already agreed

[00:31:19] Speaker 04:
I just want to, we've already agreed that we would do that.

[00:31:22] Speaker 04:
So that's off the table.

[00:31:24] Speaker 04:
The second part, I guess, the question is whether, you know, in order to reach that, the courts got to find deficiency.

[00:31:32] Speaker 04:
I mean, someone says you go through this analysis and if you fail on either prom, if you're the defendant, you can't prevail.

[00:31:39] Speaker 04:
And so it's appellant's burden to show both deficiency and prejudice.

[00:31:44] Speaker 04:
Of course.

[00:31:46] Speaker 04:
He, you know, he wouldn't, you wouldn't necessarily get to that question, even if you disagreed with me on the prejudice point because there's no deficiency.

[00:31:55] Speaker 04:
I mean, I know you're asking me about the prejudice point, but Right, because we may disagree.

[00:32:00] Speaker 00:
I mean, you know about deficiency.

[00:32:05] Speaker 00:
depending on how clear one thinks the concept of forfeiture being about gain and restitution being about loss is, you know, that seems like one could say way before kind of Flores and Honeycutt,

[00:32:23] Speaker 00:
pretty clear distinction conceptually between those two things.

[00:32:27] Speaker 04:
But I wouldn't say obvious enough that appellant had, that appellants council had a constitutional duty.

[00:32:32] Speaker 00:
No, I understand.

[00:32:33] Speaker 00:
I understand your position on that.

[00:32:35] Speaker 00:
But I'm just saying that it's in the case and the government has come forward and said, look, we really, we get it and we're willing to do some cross crediting.

[00:32:45] Speaker 00:
And so all I'm asking is if you, if the government is also willing to credit

[00:32:54] Speaker 00:
payments by the co-defendants toward their restitution amounts as against Mr. Ferrari's forfeiture amount, that could actually eliminate the claim of prejudice altogether.

[00:33:10] Speaker 00:
And so it would be helpful for us.

[00:33:12] Speaker 04:
And I simply can't answer that.

[00:33:15] Speaker 00:
Yeah.

[00:33:16] Speaker 00:
So it would be helpful to know that.

[00:33:17] Speaker 00:
And perhaps you could ask.

[00:33:19] Speaker 00:
I mean, if the government has no objection to that, that would obviate

[00:33:25] Speaker 00:
need to decide in unnecessary.

[00:33:27] Speaker 04:
I understand and I'll take that back to the office and we'll, you know, I suppose if the court is asking, which I understand you to be asking, we'll file a letter one way or the other with either stating our position.

[00:33:40] Speaker 00:
That would be great.

[00:33:41] Speaker 00:
And the other thing that's a little bit unclear to me from the record is with respect to either or both the offset, you know, within Mr. Ferrari's own kind of two columns or the crediting from the other co-defendants,

[00:33:55] Speaker 00:
pre-agreement, post-agreement, but pre any amended consent, you know, motion, amended order and going forward.

[00:34:04] Speaker 00:
Is there any distinction in the government's view or would it be, you know, assuming that all, you know, whenever it occurred that the crediting offsetting would take place.

[00:34:14] Speaker 00:
It'd just be helpful, I think, to know that.

[00:34:16] Speaker 04:
Right.

[00:34:17] Speaker 04:
I'm pretty comfortable now saying that, you know, we did discuss that and my understanding is that we, you know, it is,

[00:34:24] Speaker 04:
and perspective relief in terms of the offset.

[00:34:31] Speaker 04:
I believe that to be the case.

[00:34:32] Speaker 04:
So I think I can answer that now, but if we're going to file a letter, we may as well explain our position on both.

[00:34:39] Speaker 03:
Great.

[00:34:39] Speaker 03:
Thank you.

[00:34:39] Speaker 03:
All right.

[00:34:41] Speaker 03:
Judge Brown, do you have any questions of Mr. Smith?

[00:34:44] Speaker 03:
All right.

[00:34:44] Speaker 03:
Mr. Smith, before opposing counsel replies,

[00:34:54] Speaker 03:
I'm concerned, like Judge Rao, with whether or not there's a statutory basis for the forfeiture.

[00:35:00] Speaker 03:
So once counsel concludes, well, I'll just say it now.

[00:35:07] Speaker 03:
I'd like you, along with the inquiry you're going to make about the amounts and so forth and the offsets,

[00:35:18] Speaker 03:
to also address the statutory basis for the forfeiture.

[00:35:25] Speaker 03:
And you may need longer to get permission about the offsets, but I'd like to know, frankly, by, say, noon tomorrow, what the statutory basis is.

[00:35:39] Speaker 03:
That I think you can submit immediately.

[00:35:48] Speaker 03:
Well, since we're all here, if that does take care of the case, it takes care of the case.

[00:35:53] Speaker 03:
If it doesn't, we'll get an order out today about how much time we'll give you to consult with whoever you need to consult with about the offsetting amounts.

[00:36:06] Speaker 03:
OK.

[00:36:06] Speaker 03:
I understand, Your Honor.

[00:36:08] Speaker 03:
Thank you.

[00:36:08] Speaker 03:
All right.

[00:36:09] Speaker 03:
All right.

[00:36:10] Speaker 03:
Ms.

[00:36:10] Speaker 03:
Tamina, why don't you take two minutes?

[00:36:12] Speaker 02:
Thank you, Your Honor.

[00:36:16] Speaker 02:
because it's also, it would be embarrassing for me to not have raised the issue.

[00:36:21] Speaker 02:
I do believe that potentially the government's forfeiture authorization is not in the actual subsection that they cited.

[00:36:30] Speaker 02:
It looks to be in 981A1D little V, that one.

[00:36:38] Speaker 02:
All right, say that again, A1 what?

[00:36:41] Speaker 02:
Oh, A1 big D, little V.

[00:36:45] Speaker 02:
which authorizes forfeiture for relating to mail fraud.

[00:36:50] Speaker 02:
So that specifically cites 1341.

[00:36:52] Speaker 02:
VI is 1343 for wire fraud, which is important to note as well.

[00:37:03] Speaker 02:
D does contain the obtained directly or indirectly language.

[00:37:08] Speaker 02:
So the government's argument with respect to the absence of that language in 981C is not operative.

[00:37:17] Speaker 02:
And so I could be wrong.

[00:37:22] Speaker 02:
I mean, I could be wrong, but I believe that that's where it is.

[00:37:24] Speaker 02:
And that's potentially why we didn't raise the race failure.

[00:37:29] Speaker 02:
Sure, sure.

[00:37:31] Speaker 02:
And then with respect to, I wanted to say, I pulled up the party's joint proposal

[00:37:37] Speaker 02:
That proposal only deals with past payments.

[00:37:41] Speaker 02:
It does not deal with how prospective payments will be credited, whether they would be credited to both forfeiture and restitution.

[00:37:49] Speaker 02:
So there's still that outstanding agreement that we would ask for.

[00:37:55] Speaker 02:
Two very quick things.

[00:38:00] Speaker 00:
The timing.

[00:38:01] Speaker 00:
So when you say past, do you mean pre-plea?

[00:38:07] Speaker 00:
or between the plea and now?

[00:38:11] Speaker 02:
Well, there were pre-judgment, I suppose.

[00:38:20] Speaker 02:
I'll have to check the date of all the payments, but there were pre-indictment payments, there were pre-plea payments, and there were pre-judgment payments.

[00:38:28] Speaker 02:
Mr. Ferrari, one of the things that they spoke about at length at the sentencing was that Mr. Ferrari began to repay some of the victims before

[00:38:37] Speaker 02:
even the criminal case was brought.

[00:38:39] Speaker 02:
And so there was a question about how these payments would be credited.

[00:38:43] Speaker 02:
And so this agreement allows those payments, the plea agreement referenced those payments and allowed for offsetting, but it was not specific enough.

[00:38:56] Speaker 02:
So this agreement addresses those payments.

[00:39:00] Speaker 02:
It does not,

[00:39:01] Speaker 02:
It does not address prospective payments towards restitution that would be credited towards forfeiture.

[00:39:07] Speaker 02:
And again, that is permitted.

[00:39:10] Speaker 02:
It's permitted, it's discretionary, but we'd ask that the government exercise discretion.

[00:39:14] Speaker 00:
And when you talk about prospective, I'm just worried about so,

[00:39:20] Speaker 00:
There's before the judgment, you talked about three categories that precede the judgment pre indictment plea and then pre judgment, and then you talk about prospective, but then there's between the judgment and activity.

[00:39:35] Speaker 00:
I don't know if anything happened, but there is a period of time that has passed, quite a long period of time.

[00:39:42] Speaker 00:
So I also would want to, I mean, whoever's describing this needs to describe it in a way that covers unambiguously whatever periods the government is willing to do this for, which I assume would be all relevant periods.

[00:39:57] Speaker 00:
But you don't know whether there were any agreements between judgment and now?

[00:40:02] Speaker 02:
No, there have been.

[00:40:06] Speaker 02:
Payments between judgment and now the government does their de minimis, but, and they're being collected through the probation I believe and through the clerk's office.

[00:40:19] Speaker 02:
I am unaware of that accounting.

[00:40:23] Speaker 02:
But we could, I believe that if there was going to be an agreement, we could find a way to word it such that any payments, both prior and in the future, we could certainly find a way to word that.

[00:40:34] Speaker 00:
Provided the government were willing to do that.

[00:40:36] Speaker 02:
Yes, absolutely.

[00:40:38] Speaker 02:
And with respect to the offsetting of the co-defendants, sorry, not co-defendants, but co-conspirator payments in the Southern District of Florida, the government described that as a new argument and I don't

[00:40:53] Speaker 02:
I don't believe that that's a new argument at all.

[00:40:55] Speaker 02:
It's a remedy to remove prejudice.

[00:41:02] Speaker 02:
I believe that the argument is definitely laid out before the court.

[00:41:08] Speaker 02:
Finally, I want to say one more thing as the government just numerous times has described the plea agreement in this case is very favorable.

[00:41:19] Speaker 02:
And I have to push back on that.

[00:41:22] Speaker 02:
The only benefits I can see from this plea agreement versus him just pleading straight to the indictment, which he could have done.

[00:41:29] Speaker 02:
And that is something that the courts have recognized when you're looking at the prejudice in the plea context that you compare the prejudice or the outcome to pleading straight to the indictment is the government moving for one additional point for acceptance of responsibility.

[00:41:49] Speaker 02:
which courts have the discretion to grant in any event.

[00:41:53] Speaker 02:
And also just the, when there's three counts, the court assesses $300 versus when there's one account, one count, they assess $100 in essentially court fees.

[00:42:12] Speaker 02:
And so he didn't have to pay the difference in the counts, but Mr. Ferrari,

[00:42:18] Speaker 02:
those dismissed counts were still considered relevant conduct.

[00:42:21] Speaker 02:
So Mr. Ferrari was held accountable in his guidelines calculation for all of the conduct that was referenced in the indictment.

[00:42:30] Speaker 02:
None of that went away.

[00:42:31] Speaker 02:
He was precluded from arguing this question.

[00:42:37] Speaker 02:
He was precluded essentially from arguing against his loss calculation, against his restitution calculation.

[00:42:44] Speaker 02:
I would disagree that this was a particularly favorable agreement.

[00:42:48] Speaker 02:
So that's your position.

[00:42:50] Speaker 02:
Judge.

[00:42:50] Speaker 01:
Thank you.

[00:42:51] Speaker 01:
I just I just had one thing.

[00:42:53] Speaker 01:
I was just looking at the provision that Miss Tormina that you cited for including the mail fraud.

[00:42:59] Speaker 01:
And I'm not sure that that provision is applicable because it refers to Section thirteen forty one relating to mail fraud.

[00:43:06] Speaker 01:
but then specifies if such violation relates to the sale of assets acquired or held by the FDIC as conservator or receiver for a financial institution, which is not the case here where Mr. Ferreri had his various stocks and companies.

[00:43:27] Speaker 01:
So unfortunately, I don't think that we understand that his obligation to provide us a statutory source for this civil forfeiture.

[00:43:36] Speaker 00:
My understanding is that it might be under 981A1C, which cross-references specified unlawful activity in 1956C7, which cross-references 19611, which does include 1341.

[00:43:53] Speaker 00:
But you'll get back to us on that.

[00:43:55] Speaker 00:
The government will get back to us on that.

[00:43:57] Speaker 03:
Well, I think both of you ought to, by noon tomorrow, submit what you think is the statutory basis for the force feature.

[00:44:08] Speaker 03:
And then we'll get an order out later about Mr. Smith about how much time to consult with your colleagues at DOJ.

[00:44:16] Speaker 03:
All right, thank you all.

[00:44:19] Speaker 03:
And let's go to the next case.