Motion to Release Pending Appeal
COMES NOW the Defendant, by and through his undersigned counsel, and hereby files this Motion to Bifurcate Release Pending Appeal Decisions and Memorandum of Law Clarifying Certain Issues Addressed at Post Release Pending Appeal Hearing, regarding the oral argument hearing held on November 13, on his (1) Motion for Conditions of Release Pending Appeal (“Motion”) (Doc. 401), and his (2) Supplement to Motion for Conditions of Release Pending Appeal (“Supplemental Motion”) (Doc. 419), and, in support hereof, the Client states as follows:
1. On September 27, the Client filed his Motion for Conditions of Release Pending Appeal (Doc. 401).
2. On October 10, the Government filed their Consolidated Response to Defendants’ Motions for Bond Pending Appeal (Doc. 406).
3. On October 13, the Client filed a Supplement to Motion for Conditions of Release Pending Appeal (Doc. 419).
4. On November 13, the Honorable Judge held an oral argument hearing on Client’s motion for release pending appeal.
5. In the companion case of D. C., a telephonic hearing was held with the parties on October 27, by the Honorable Judge, who scheduled a hearing regarding the outstanding restitution issues on December 4, at 10 a.m., and also scheduled oral argument for D. C., on D. C.’s separate motion for release pending appeal (Doc. 399). Doc. 428. Depending on the length of the hearing on the restitution issues, the Honorable Judge advised the parties he would conduct the oral argument on D. C.’s release motion later that morning, or that afternoon. Of course, since the Client is not a party to D. C.’s separate motion for release pending appeal, he and his counsel are not a party to that additional hearing.
Motion to Bifurcate Release Pending Appeal Decisions
6. During the oral argument hearing, the Magistrate Judge inquired of the government as to whether the decisions on D. C. and the Client, regarding bond pending appeal, were, in substance, coterminous. In other words, would a decision on bond pending appeal for D. C. yield the same ruling for the Client. The government stated they were. Respectfully, that assertion is entirely incorrect, as evidenced by both the motions filed by the Client, as well as the content of the oral argument. Rather, the Client has grounds for appeal that are entirely unique to him.
7. Magistrate Judge then announced his intention of conferring with Judge, on or after the (then-scheduled) December 4 hearing on D. C.’s motion for bond pending appeal, with regard to the Client’s entitlement to bond pending appeal.
8. Respectfully, for all the reasons set forth herein, and for the reasons presented to the Court during oral argument, wedding the entitlement of the Client to bond pending appeal to that of Mr. D. C. is unfair to the Client and would deprive him of due process. Thus, this motion seeks to bifurcate the appeal bond decisions of the two codefendants, and not have the decision on the Client wedding to that of D. C.
9. First, it is essential to note that the Client and his counsel are not parties to the oral argument hearing to be held by Magistrate Judge, on the D. C. bond request. Thus, any reliance on the bond decision relevant to D. C. will deprive the Client of due process, since he will not be a party to that hearing.
10. Second, for all the reasons we have reported to the Court, the Client’s entitlement to bond pending appeal relies on issues that stand separate and apart from those applicable to D.C., including but not limited to the following:
a. The Client had nothing to do with the development and/or creation of the Business Protection Plan (“BPP”), and had no interaction or dealings with the tax firms that created the BPP, in terms of providing them any representations upon which their opinions were founded. Rather, all such dealings and/or representations regarding the creation of the BPP came from the insurance companies over which the Client had no control.
b. The Client was not involved in the ownership, operation, management or control of the insurance companies, whose operation is the centerpiece of the government’s theory of fraud, and thus had no role in the implementation of the BPP. Mr. D. C. was the owner.
c. The Client operated a separate company, Foster & Dunhill, which was solely involved in marketing. The Client functioned solely as a salesman. Conversely, Mr. D. C. was not involved in marketing the BPP.
d. Thus, notwithstanding the finding by the trial court that the BPP, as implemented, was not a legitimate insurance policy or structure, the Client has compelling appeal issues that are not dependent on that finding, and, indeed, the Client has no need to litigate the validity of the BPP (as implemented ) in his appeal.
e. The loss calculations applicable to the Client entail a Reese analysis unique to him.
11. In summary, while D. C. has his own issues on appeal, and while some of the appeal issues might overlap, the Client can accurately state that, without any input into the design of the BPP, the selection of the lines of coverage to be included in the BPP, the writing of the tax opinions, the implementation and administration of the BPP, the reinsurance or payment of claims in the BPP, he is fully able to claim the applicability of the Parker decision, as well as his right to rely on the legal advice and tax opinions he was provided (as addressed in Part C, infra).
Reliance on Advice of Counsel
12. During the October 27 oral argument hearing, the Honorable Magistrate Judge read a portion of the Client’s sentencing transcript, in which the trial court stated, “I don’t think you raised advice of counsel, did you?” – and then stated its view that advice of counsel was “not formally raised as a defense.” Doc. 436 at 94:8-14. Relying on those statements from the trial court, the Magistrate Judge asked the government if the Client had raised advice of counsel as a defense, and the government replied the Client had not. Respectfully, both of those reports are incorrect.
13. The Client’s Proposed Findings of Fact and Conclusions of Law (Doc. 360) specifically asserted the advice of counsel defense, inter alia, as follows:
Regarding the structure of the offshore business insurance product, this HTD opinion letter to the Client expressly assured him it was lawful. As such, he is entitled to the defense of reliance on advice of counsel, to the extent he marketed that product consistent with the HTD opinion.
Doc. 360 at ¶15 (emphasis added).
Thus, in addition to his reliance on his own written opinion, the Client received the legal imprimatur, as to his sales presentations, from the law firms, thereby further entitling him to the advice of counsel defense.
Doc. 360 at ¶16 (emphasis added).
14. Of course, the Client’s defense of reliance on advice of counsel becomes all the more important, as related to his good faith grounds for appeal, not only from a sufficiency of the evidence standpoint, but based on the failure to grant his New Trial Motion (Doc. 378), seeking to call attorney J. D. (the author of the subject HTD opinion), to refute the conclusion in the verdict (Doc. 365 at 27) that the Client lied to those lawyers.
Good Faith Belief in Validity of the BPP
15. The record confirms the Client’s good faith belief in the legitimacy of the BPP policy coverages. Of course, he had every right to believe it was a legitimate policy, since he had been provided with tax opinions the trial court and the government both agreed were lawful.
16. Respectfully, in addition, as we have demonstrated (see, in particular, our Motion for New Trial (Doc. 378) at Part C, the trial court’s conclusion that the 22 coverages were “fantastical and superfluous” is not only contrary to the record (including the fact the HTD opinion – see, e.g., DX 11C-2 and GX 11H specifically approved those 22 coverages as proper, deductible coverages), but contrary to our identification of many current insurance companies offering the same lines of coverage. Again, even if that finding was correct, it would not defeat the Client’s entitlement to bond on appeal, for reason that he would retain the benefit of the Parker decision.
WHEREFORE, it is respectfully requested the Court bifurcate any appeal bond decision on the Client from any such decision on D. C., and accept the clarifications and corrections to the oral argument hearing, as set forth herein.