Free Motion for Release from Custody - District Court of Arizona - Arizona

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Anders Rosenquist Jr., Bar No. #002724 ROSENQUIST & ASSOCIATES ATTORNEYS AT LAW 80 East Columbus Phoenix, AZ 85012 TELEPHONE: (480) 488-0102 Attorney for Defendant-Appellant IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ANDREW TAYLOR, Defendant-Appellant. (expedited ruling requested) No. CR-04-00809-PHX-NVW MOTION FOR RELEASE PENDING APPEAL

Defendant, Andrew Taylor (hereinafter "Defendant"), through undersigned counsel, hereby requests that Defendant be released pending his direct appeal in this matter pursuant to Fed. R. Crim. P. 46(c) and 18 U.S.C. § 3143(b), and that his sentence of imprisonment be stayed pursuant to Fed. R. Crim. P. 38(b). Memorandum of Points and Authorities. MEMORANDUM OF POINTS AND AUTHORITIES I. FACTS Undersigned counsel was retained by Defendant to represent him on direct appeal of his convictions to the Ninth Circuit Court of Appeals. Undersigned counsel has since reviewed the entire record, including trial transcripts and the file of Defendant's trial attorney. Undersigned Defendant's request is supported by the following

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counsel has drafted and filed an opening brief in the direct appeal, which raised several substantial issues regarding the validity of Defendant's convictions. (See Opening Brief in direct appeal, attached as Exhibit "D"). Not only do the issues raised in Defendant's direct appeal raise substantial issues of law, but also many facts have come to light that seriously undermine Defendant's convictions. These new facts will be raised in a habeas corpus petition, but are covered in this Motion to support Mr. Taylor's release pending appeal. First, as this Court is well aware, a substantial question of law exists in this case regarding the appropriate bankruptcy and criminal law that underlies Defendant's convictions. One major issue in Defendant's opening brief to the Ninth Circuit hinges on this Court's ruling regarding whether a Chapter 13 debtor is required to disclose certain assets acquired after the filing of the Chapter 13 petition. Defendant argues that the evidence presented at trial was insufficient to convict Defendant of the charges because: (1) there was not sufficient evidence presented at trial regarding `materiality' and `fraudulent intent' for the government to sustain its burden under 18 U.S.C. § 152(3); (2) there was not sufficient evidence presented by the government that Defendant was required to disclose the after-acquired property; (3) there was not sufficient evidence presented at trial regarding the elements of `fraudulently' and `knowingly' for the government to sustain its burden for a conviction of concealment under 18 U.S.C. § 152(1); and (4) there was not sufficient evidence presented to prove the element of `scheme to defraud' under 18 U.S.C. § 157. This Court's own rulings and comments prior to and during trial demonstrate that this case undoubtedly presents significantly debatable questions of law concerning the Defendant's
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convictions. Prior to trial, this Court requested that Defendant and the Government file several briefs to educate the Court on the relevant bankruptcy law, which addressed whether the Government could proceed with the charges against Defendant, and whether Defendant had even committed any crime at all. Of main concern was whether the bankruptcy laws required a debtor to disclose after-acquired assets, and if so when and how. Regarding the issues briefed by Defendant and the Government, specifically regarding whether a Chapter 13 debtor is required to disclose after-acquired assets, the Court commented, "My reading of the disclosure statutes and rules is that Rule 1007(h) specifically implements the disclosure requirement of Subsection (a)(5), which is not what we're talking about here. We're dealing here with

Subsection (a)(7) that deals with the later-acquired assets being part of the property of the estate. And frankly, it looks to me like we have no rule that specifically implements the obligation of disclosing the later-acquired assets that are defined to be part of the property Chapter 13 estate under (a)(7), but my mind is totally not at rest on that." This Court further stated: "But my sense is the statute clearly creates ­ makes these assets property of the Chapter 13 estate. I don't think Rule 1007(h) literally speaks to it, to an implementing procedural requirement to report it. So I'm looking at two possibilities: One, there's a statutory obligation that says that this is property of the estate. And is there a necessary implication it must be reported. If it's not reported it is concealed. And the other way ­ the two other ways to view it are, second, that even though where rule 1007(h) may not technically impose an obligation to affirmatively report it because it related to Subsection (a)(5) assets, once a report is made there's an obligation that it be complete, that it go beyond Subsection (a)(5) assets and include all assets in the case of a Chapter 13. That's another view of it. And a third view of it is that the definition of the estate, of the property of the estate, is empty; that the debtor has a naked but unenforceable obligation to treat these assets as property of the estate. Those are the three possibilities I'm thinking of.

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After empanelling the jury, this Court again addressed the issue of disclosure of after acquired assets and stated, "By my sense of that is that my best reading now is that there is, in this case, as I understand, there was a duty to disclose in the amended schedules because they were filed. Whether or not Rule 1007(h) or any other rule or no rule required them to be filed, they were. And they were incomplete under the Government's view of the facts and therefore, arguably were misleading...But without any rule, it strikes me that there is a credible and necessary inference that at some reasonable time, these after-acquired assets must be disclosed or else the whole substance of law that that is part of the estate in the chapter 13 could be defeated." Defendant's trial counsel addressed his frustration regarding the lack of authority on the subject and the fact that Defendant's case seemed to address a matter of first impression. Defendant's trial counsel stated: "Judge, I have tried to go across the board on my research. I probably looked at 150 cases on these two issues. There is nothing I can find that is directly on point, no case apparently has dealt with this issue because it is so rare, at least in the criminal context." The Government concurred with Defendant's trial counsel and stated, "In fact, I'm a little troubled that I have not been able to find case law directly on point although the annotated Rule 1008 had a couple of cases concededly very old cases...And I'm troubled and confused as to why I can't find something more direct." Even given the lack of authority on the issues raised in Defendant's case, this Court issued a ruling regarding the disclosure of after-acquired assets and concluded: "The only express textual obligation to disclose after-acquired property is found in Rule 1007(h) and is limited to property acquired through inheritance, a property divorce settlement, or life insurance. Mr. Taylor voluntarily caused his schedules
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to be amended after he acquired the properties at issue and without disclosing them on the amended schedules. The submission of those amended schedules can satisfy the concealment of property element of the offense even if the absence of a disclosure rule or statute absolves a Chapter 13 debtor of any duty to amend schedules solely to disclose new property of the estate." However, the Government later questioned the Court's rulings and the following exchange was held: "THE COURT: That's the conclusion I have reached. MR. TUCHI: And that's independent of ­ or it's not relying on any of the case law that we have submitted is what you have gone on to say. THE COURT: That's the sense I have of it. But I will confess to you that with the benefit of all the work you did and what I did, the authority is awfully thin for all of this." Therefore, this case undoubtedly presents a fairly debatable question of law concerning Defendant's convictions. Second, Defendant's convictions regarding bankruptcy fraud rest on the perjured testimony of the government's first witness, Bharat Lal. At the Restitution Hearing in this matter, the government disclosed for the first time that victim Bharat Lal did not own the property that was the subject of a law suit he filed against Defendant, claiming past due rent in 1999. This information directly contradicted the trial testimony of Mr. Lal. The government stated, "Your honor, the legal fees for which the Government is seeking restitution are contained in the documents which were submitted to the Court...The Government seeks restitution in the amount for the fees and costs included in the submission in addition to the $8,500 judgment
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which the Court heard evidence about at trial." (Id.). The government then went on to inform the Court of "the fact that...the billing invoices, they are addressed to a third party, a Mr. and Mrs. Rana Kohli." (Id.). The Government further informed the Court that they, "just received those documents yesterday, and for the first time had an opportunity to discuss with Mr. Lal why theses legal billing invoices were addressed to a third party." (Id.). The government then admitted that the legal bills were actually sent to a third party, not Mr. Lal, and it was the third party that was responsible for paying the legal fees. (Id.). The government explained that in June of 1999, prior to Defendant voluntarily vacating the residence, Mr. Lal sold the residence to Mr. and Mrs. Kohli, the parties who were paying the legal bills. (Id.). Therefore, Mr. Lal lied in his testimony at trial about material facts which were extremely prejudicial to Defendant. The government does not dispute that the legal bills brought forth at the restitution hearing directly contradict the testimony of Mr. Lal given at trial. Third, an important witness for the Government, Defendant's bankruptcy attorney Lawrence Hirsch, continually asserted that he did not know about Defendant's partnership interest in Automotive Investment Solutions, Inc. dba The Car Store (hereinafter "AIS"). This was Mr. Hirsch's explanation for why he never filed an amended schedule, nor listed on the amended schedules he did file, Defendant's interest in AIS or an aircraft sale that Defendant had brokered. However, evidence obtained by undersigned counsel shows that Mr. Hirsch actually knew about Defendant's interest in AIS and the airplane nearly five months prior to Defendant's May 2000 bankruptcy petition being dismissed by the bankruptcy court, yet Mr. Hirsch never filed an amended schedule reflecting these newly-acquired assets.
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In late June or early July 2000, Defendant hired attorney Larry Hirsch to represent him in the Chapter 13 bankruptcy that was filed by Defendant in May 2000. (See Affidavit of Andrew Taylor, attached as Exhibit "A"). Upon Defendant's first visit with Mr. Hirsch, Defendant explained to him that he had filed a Chapter 13 bankruptcy petition in May of 2000 as a pro se filer, and also completed all the required schedules and filed them as well. (Id.). Early on in the relationship, Defendant also explained to Mr. Hirsch that he had brokered the sale of an airplane, as well as the other positive aspects of Defendant's personal finances since filing the Chapter 13 petition, including Defendant's partnership in the AIS dealership, which allowed Defendant to finally have the money to hire an attorney. (Id.). Defendant also explained to Mr. Hirsch his past failures in bankruptcy as reasons why he wanted an attorney's assistance with the bankruptcy. (Id.). The reason Defendant filed the Chapter 13 bankruptcy petition in May 2000 was because his landlord was attempting to evict him from his residence. (Id.). Shortly after Defendant's filing of the May 2000 petition the landlord was seeking relief from the automatic stay. (Id.). Mr. Hirsch was able to negotiate a stipulation with the landlord's attorney regarding a settlement where Defendant was to deposit the back rent in Hirsch's trust account by a date certain, from which Hirsch would pay her from his trust account. (Id.). In October 2000, the landlord filed a motion to dismiss the forcible detainer case they had against Defendant, since the parties had made an agreement in bankruptcy court for the payment of back rent through Mr. Hirsch's trust account. (Id.).

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Unknown to Defendant until he received notice of his criminal indictment, Mr. Hirsch had for some reason amended the original schedules filed by Defendant as a pro se filer in his May 2000 bankruptcy. (Id.). Shortly after Mr. Hirsch amended the schedules, he amended

them a second time, also for reasons unknown to Defendant. (Id.). Defendant never received a request from Mr. Hirsch to review the amended schedules or a notice that the original schedules had been amended. (Id.). In December 2000, Defendant contacted Mr. Hirsch and explained to him that the AIS dealership Defendant had invested in was in financial trouble and that Defendant was at risk of losing his investment. (Id.). Mr. Hirsch certainly, by December 2000, had full knowledge of Defendant's interest in the AIS dealership. (Id.). In late December 2000, early January 2001, Defendant's partners in the AIS dealership and Defendant met with Mr. Hirsch to have him represent the company in Chapter 11 bankruptcy. (Id.). Mr. Hirsch agreed to take the case and requested a retainer of $13,000.00. (Id.) Defendant and his partners agreed to the fee and that Defendant would be personally responsible to pay the retainer. (Id.).

Defendant wrote a check to Mr. Hirsch for part of the retainer from his personal checking account. (See Copies of Checks from Taylor to Hirsch, attached as Exhibit "B"). Defendant then asked him that he be allowed to pay the balance of the retainer when Defendant sold the homebuilt aircraft that he had taken as a trade in the brokering of another aircraft. (See Exhibit "A"). Mr. Hirsch agreed to Defendant's proposed payment of the retainer for the AIS dealership bankruptcy. (Id.). In the meeting with Mr. Hirsch and Defendant's partners regarding filing the Chapter 11 petition for the AIS dealership, Defendant asked Mr. Hirsch to not discuss his personal bankruptcy case with Defendant's partners. (Id.).
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In January 2001, Defendant received a call from Mr. Hirsch inquiring on how Defendant was doing on the sale of the trade-in plane. (Id.). Defendant advised Mr. Hirsch that although Defendant didn't have a sale, Defendant felt that he soon would. (Id.). Mr. Hirsch then asked that since a sale was forthcoming soon on the plane, if he could use the money that Defendant had in his trust account to pay the attorney for the landlord and the balance of the retainer for the AIS dealership bankruptcy. (Id.). Defendant was then to pay the landlord directly. (Id.). Reluctantly Defendant agreed. (Id.). Mr. Hirsch then took the money that Defendant had in his trust account and transferred it to the benefit of the AIS dealership. (Id.). Defendant then paid the landlord directly. (Id.). Defendant has provided undersigned counsel with copies of checks given to Mr. Hirsch by Defendant. (See Exhibit "B"). Specifically, check # 6870 in the amount of $5000.00, which is dated January 15, 2001, clearly states in the memo line that it is for "Chp. 11 Retainer The Car Store." (Id.). This clearly proves that Mr. Hirsch knew of Defendant's interest in the AIS dealership well before Defendant moved for dismissal of his May 2000 bankruptcy case. Defendant's case was not dismissed until nearly 5 months after Mr. Hirsch had full knowledge of Defendant's interest in the AIS dealership and the airplane. (See Exhibit "A"). The fact that Mr. Hirsch had this knowledge and did not file an amended schedule reflecting such is very important to Defendant's criminal conviction. The cornerstone of the government's case was the amendment of the schedules in the May 2000 bankruptcy. The trial court alluded to the fact that if not for the filing of the amended schedules, which left off Defendant's interest in the AIS dealership and airplane, the government would not have had
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a case and Defendant probably would not have been able to be criminally charged. (See Exhibit "D"). Defendant's conviction is based in large part on Mr. Hirsch's malpractice as described herein. Later in 2001, Defendant's relationship with his partner at the AIS dealership ended and Defendant filed suit against the company to recover damages. (See Exhibit "A"). Mr. Hirsch, now as counsel for the AIS dealership because of the money Defendant paid him for the retainer, became Defendant's adversary. (Id.). Defendant went to Mr. Hirsch's office to express to Mr. Hirsch his dissatisfaction in Mr. Hirsch representing the AIS dealership against Defendant in its bankruptcy matter, when it was Defendant who had paid Mr. Hirsch the retainer to represent the company to protect Defendant's investment. (Id.). However, Mr. Hirsch refused to see Defendant and Defendant then filed a bar complaint because he felt Mr. Hirsch's representing the company against Defendant was a conflict. (Id.). Fourth, Defendant's trial attorney, Cameron Morgan, was constitutionally ineffective in representing Defendant at trial. Defendant provided all of the above information regarding Mr. Hirsch and the events surrounding the May 2000 bankruptcy to Morgan via written statements and during interviews. (Id.). Although Defendant strongly urged Mr. Morgan to investigate Defendant's claims against Mr. Hirsch and interview Mr. Hirsch, he did neither. (Id.). Furthermore, Bharat Lal, an alleged victim called by the state, testified at trial that he had spent thousands of dollars in attorney's fees attempting to obtain judgments and collect back rent from Defendant. (Id.). However, at the restitution hearing after Defendant's trial, it was discovered that Mr. Lal did not pay the legal fees and that in fact another couple was on the
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billing receipts and had paid the fees, and Mr. Lal probably did not even own the house during the time periods he testified to at trial. (Id.). To this date, Taylor has never received anything from the couple named on the billing receipts. (Id.). Although Defendant's family went to great lengths to obtain information about Mr. Lal's background to assist Mr. Morgan with his crossexamination at trial and impeachment of Mr. Lal, Mr. Morgan never followed up on the information, nor did he even interview Mr. Lal. (Id.). Had Mr. Morgan interviewed Mr. Lal prior to trial, it is likely that the information discovered at the restitution hearing would have come out prior to trial and Mr. Lal's perjured testimony would never have been heard by the jury. (Id.). Mr. Morgan did very little in Defendant's criminal case to prepare for trial even though Defendant's case dealt with very complex bankruptcy issues for which there was no direct authority in the statutes and case law. (Id.). Mr. Morgan failed to use the considerable

bankruptcy experience of the defense expert witness, bankruptcy attorney Allan D. NewDelman. (Id). Since Mr. NewDelman was handling Taylor's Chapter Thirteen bankruptcy at the time, and is knowledgeable in bankruptcy law, Mr. NewDelman agreed to testify for the defense at Taylor's criminal trial as an expert witness in bankruptcy law. (See Affidavit of Allan D. NewDelman, attached as Exhibit "C"). In mid November 2004 Mr. NewDelman had one (Id.). This

telephone conference with Taylor's criminal counsel, Cameron Morgan.

conversation was generic in nature and for the purpose of giving Mr. NewDelman some background relative to the criminal charges against Taylor. (Id.). Mr. NewDelman had no
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further contact with Mr. Morgan until April 19, 2005. (Id.). Between April 19, 2005 and May 11, 2005 Mr. NewDelman had a total of four telephone conferences with Mr. Morgan (Id.). Two of those conferences took place while the trial was in progress (Id.). Those conferences lasted a few minutes up to just over an hour. (Id.). One of the conferences, held on May 9, 2005 included a three way conversation between Mr. Cameron, a federal prosecutor, and Mr. NewDelman. (Id.). Each telephone conference held between April 19, 2005 and May 10, 2005 included a detailed discussion of bankruptcy laws and the debtor's duty (or lack thereof) to amend schedules to list property acquired before the bankruptcy was filed and property acquired after the bankruptcy was filed. (Id.). Each conversation elaborated Mr. NewDelman's belief that after acquired assets, while property of the Chapter Thirteen Estate, did not need to be disclosed by an amendment to a Debtor's schedules. (Id.). Mr. NewDelman repeatedly referred Mr. Cameron (and the prosecutor) to Bankruptcy Rule 1007, 11 U.S.C. § 541 and 11 U.S.C. § 1306. (Id.). On May 11, 2005, Mr. NewDelman testified at Taylor's criminal trial. (See Affidavit of Allan D. NewDelman, attached as Exhibit "C"). Mr. NewDelman's testimony was relatively short considering his expertise in the field of bankruptcy law. (Id.). The questions that were posed on direct examination dealt with Taylor's then pending Chapter Thirteen. (Id.). Mr. Cameron failed to inquire of Mr. NewDelman as to the interplay between the various provisions of the Bankruptcy Code and Rules relative to the need to disclose assets and how those disclosures would relate to the charges under the indictment. (Id.). In fact, on direct

examination, Mr. Cameron failed to inquire, let alone expand upon the information Mr.
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NewDelman supplied to him (and the prosecutor) during their various telephone conversations. (Id.). Mr. NewDelman felt that Mr. Cameron had therefore permitted the Government to avoid any meaningful cross-examination. (Id.). The information discussed between Mr.

NewDelman and Mr. Cameron and that Mr. NewDelman believed would be the subject of his testimony, was critical to Taylor's defense. (Id.). Outside of Defendant his wife, and Mr. NewDelman, Mr. Morgan did not interview a single witness prior to trial to ascertain what they would testify to at trial. (See Exhibit "A"). Mr. Morgan also did not conduct a meaningful investigation in the case. (Id.). Mr. Morgan has further wasted four months after Defendant's conviction and notice of appeal were filed lying to Defendant and telling Defendant that he was going to order the trial transcripts, but never did so. (Id.). As a result, Defendant's opening brief to the Ninth Circuit Court of Appeals was due to be filed even though Mr. Morgan had never ordered the transcripts. (Id.). Given Mr. Morgan's failure to obtain Defendant's trial transcripts in a timely manner, Defendant will have served more than half of his sentence before the Ninth Circuit will hear Defendant's direct appeal. (Id.). Lastly, the District Court erred in calculating Defendant's offense level and criminal history category for purposes of sentencing pursuant to the federal sentencing guidelines. The Defendant should have received a much lower sentence than the thirty-three months he received. Defendant's criminal history category was calculated incorrectly because one of Defendant's felony priors should not have been counted because it was impossible to tell from the record whether the term of incarceration was served more than 15 years prior to the current offenses.
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Also, the Court incorrectly calculated the loss calculations for purposes of sentencing enhancement and offense level. Pursuant to the correct formula used to calculate loss, there was no loss to the victims and therefore should have been no enhancement to the offense level. Therefore, it is also likely that Defendant's case will be remanded by the Ninth Circuit for resentencing under the correct guidelines, which will result in a sentence that is likely to run prior to the conclusion of Defendant's direct appeal. II. DEFENDANT HAS MET THE REQUIREMENTS OF FED. R. CRIM. P. 46(c) AND 18 U.S.C. § 3143(b) AND THEREFORE SHOULD BE RELEASED PENDING THE APPEAL OF HIS CONVICTIONS. Rule 46, Federal Rules of Criminal Procedure, states, "The provisions of 18 U.S.C. § 3143 govern release pending sentencing or appeal. The burden of establishing that the

defendant will not flee or pose a danger to any other person or to the community rests with the defendant." Furthermore, 18 U.S.C. § 3143(b), which governs the release or detention of a defendant pending appeal, states that a person may be released pending appeal if the judicial officer finds: "(A) by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released...; and (B) that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in-- (i) reversal, (ii) an order for a new trial, (iii) a sentence that does not include a term of imprisonment, or (iv) a reduced sentence to a term of imprisonment less than the total of the time already served plus the expected duration of the appeal process."

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If the judicial officer makes such findings as set forth in 18 U.S.C. § 3143(b), "such judicial officer shall order the release of the person in accordance with section 3142(b) or (c) of this title." 18 U.S.C. § 3143(b). 1. Defendant Is Not Likely To Flee Or Pose A Danger To The Safety Of Any Other Person Or The Community If Released. Defendant was on release status from his arraignment on August 18, 2004 until his selfsurrender date on March 7, 2006. Defendant was on release prior to his trial and throughout his entire criminal trial. During the approximately two years Defendant was on release during this case, Defendant complied with the law and with all restrictions imposed upon him by this Court. Also, Defendant was not convicted of any violent crimes. At Defendant's initial appearance and arraignment, the government did not object to Defendant being on release. Defendant complied with all pretrial release conditions.

Furthermore, at a pretrial hearing on April 18, 2005, Defendant requested that he be allowed to travel out of the country to attend his son's wedding. In response the government stated that it had seen no evidence that Defendant posed a flight risk and did not object to the motion. The Court subsequently granted Defendant's motion to travel to Jamaica from May 18th through May 23rd, 2005. At the conclusion of trial and after the reading of the guilty verdict, the Court affirmed Defendant's release pending sentencing. Defendant was originally ordered to self-surrender on January 30, 2006. Defendant then made a motion to extend the time to self-surrender, which was granted by the Court. Subsequently, at the evidentiary hearing regarding restitution

Defendant made a second request to extend the time to self-surrender, which was also granted.
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The government had no objection to the extension, and Defendant's self-surrender date was again extended until March 7, 2006. The government persuaded the Court that although Defendant does not pose a `physical' danger or risk to the community, that he somehow poses an `economic' risk to the community. However, Defendant has not committed any new crimes and has complied with all of his release conditions, including not applying for or opening any new lines of credit without permission of the Court. Furthermore, Defendant had been in Chapter 13 bankruptcy for over twenty (20) months due to filing his most recent Chapter 13 on October 19, 2004. During that time, Defendant complied with all requirements regarding his finances in that matter. Defendant also made all required plan payments prior to being incarcerated. However, that Chapter 13 was dismissed shortly after Defendant's incarceration in this matter due to his inability to fund the plan. Other than Defendant's inability to make the payments due to his incarceration in this matter, he did comply with all other requirements. Although there was some confusion as to the exact amount Defendant was required to pay after the filing of an Amended Plan in that matter, Defendant made every plan payment as set forth in the original Plan. Lastly, Defendant was ordered to pay all restitution in full in this matter by September 12, 2006. Defendant and his family are currently attempting to sell their home in an effort to meet this financial responsibility. Defendant has done nothing over the past several years to cause this Court to believe that he is somehow an `economic' risk to the community. Instead, Defendant has shown complete financial responsibility.

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Due to Defendant's performance while on release status, the fact that he was not convicted of a violent crime, and the fact that he does not pose an `economic' risk to the community, Defendant has demonstrated by clear and convincing evidence that he is not likely to flee and does not pose a danger to the safety of any other person or the community if he were to be granted release pending his appeal. Therefore, Defendant has met the first requirement of 18 U.S.C. § 3143(b). 2. Defendant's Appeal Is Not For The Purpose Of Delay And Will Raise A Substantial Question Of Law And Fact Likely To Result In Reversal Or An Order For A New Trial. Before ordering Defendant's release during appeal, the Court must find that Defendant's appeal is not for the purpose of delay and raises a "substantial question" of law or fact "likely to result" in a new trial or reversal of conviction. 18 U.S.C. § 3143(b)(1)(B)(ii). In this circuit, a "substantial question" is one that is "fairly debatable." United States v. Handy, 761 F.2d 1279, 1281-83 (9th Cir. 1985). The words "likely to result" mean that if Defendant prevails on the fairly debatable question, it is more probable than not that he will be granted a new trial. See United States v. Balko, 774 F.2d 516, 522 (1st Cir. 1985). Although the Court ruled against Defendant on a variety of issues in post-trial briefing, which are now the subject of Defendant's appeal, this Court is well aware that the issues presented are, at a minimum, "fairly debatable" due to the lack of any case law being directly on point. Furthermore, if Defendant prevails on one or more of his claims presented on appeal he is likely to be granted a new trial because under the relevant law Defendant's actions in no way constituted a crime and therefore he should never have been charged in the first place.
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Defendant reincorporates the facts as set out in the "Facts" section above, which demonstrate that the issues presented herein raise a substantial question of law or fact likely to result in a new trial or reversal of conviction. First, Defendant has shown that a substantial question of law exists in this case regarding the appropriate bankruptcy and criminal law that underlies Defendant's convictions. Second, Defendant has shown that his convictions regarding bankruptcy fraud rest on the perjured testimony of government witness, Bharat Lal. Third, Defendant has shown that attorney Lawrence Hirsch, witness for the government, lied when he testified that he did not know about Defendant's partnership interest in the AIS dealership and the aircraft. Instead, Defendant has shown that Mr. Hirsch in fact knew about the assets and never disclosed them on an amended schedule prior to the dismissal of the Chapter 13 petition. Fourth, the Defendant has shown that his trial attorney, Cameron Morgan, was constitutionally ineffective in representing Defendant at trial. Should Defendant prevail on any one of those issues, all of which present a fairly debatable question, it is more probable than not that Defendant will be granted a new trial. At a minimum, Defendant has demonstrated that it is likely his case will be remanded by the Ninth Circuit for resentencing under the correct guidelines, which will result in a much reduced sentence that is likely to run prior to the conclusion of Defendant's direct appeal. Based upon the foregoing, Defendant has filed a direct appeal with the Ninth Circuit Court of Appeals. (See Exhibit "A"). Defendant will also be filing a Petition for Writ of Habeas Corpus in the future since it appears that some of the issues in Defendant's case occurred outside of the trial record, such as receiving constitutionally ineffective assistance of counsel and the fact
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that new evidence shows Mr. Hirsch lied about his knowledge concerning Defendant's interest in AIS and the aircraft. It is highly likely that Defendant's appeal will result in a reversal of his convictions or new trial, or at a minimum that he will be resentenced to a severely reduced term. Therefore, Defendant is entitled to release pending his appeal. 3. Exceptional Reasons Also Exist That Make Defendant's Detention During Appeal Inappropriate. The length of a prison sentence is a relevant factor when determining whether to release a defendant pending his appeal because the defendant could be forced to serve most or his entire sentence before his appeal has been decided. United States v. Garcia, 340 F.3d 1013, 1019 (9th Cir. 2003). Incarcerating such a defendant immediately upon conviction will substantially diminish the benefit he would ordinarily receive from an appeal. Id., citing United States v. McManus, 651 F.Supp. 382, 384 (D.Md. 1987) ("There seems little point to an appeal if the defendant will serve his time before a decision is rendered."). Mr. Morgan wasted four months after Defendant's conviction and notice of appeal were filed lying to Defendant and telling Defendant that he was going to order the trial transcripts, but never did so. (See Exhibit "A"). As a result, Defendant's opening brief to the Ninth Circuit Court of Appeals was due to be filed even though Mr. Morgan had never even ordered the transcripts. (Id.). Given Mr. Morgan's failure to obtain Defendant's trial transcripts in a timely manner, Defendant will have served more than half of his sentence before Defendant's direct appeal will be heard by the Ninth Circuit. (Id.). As stated, Defendant's sentence of imprisonment is only for thirty-three months. As Defendant has previously set forth, his appeal has merit because his convictions rest on unsettled
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law. Defendant self-surrendered on March 7, 2006, which means he has already served four and a half months of his sentence. Given that Defendant's fifty-page Opening Brief was just

submitted to the Ninth Circuit a couple of weeks ago, it is likely that Defendant will have completed well over half of his sentence prior to the appellate court hearing the merits of his appeal. This would cause irreparable harm and Defendant will have served an unjust prison term should the appellate court reverse his conviction or order a new trial in this matter, which is likely. The fact that Defendant's prison sentence is only thirty-three months is an exceptional factor, which makes Defendant's detention during appeal inappropriate. III. CONCLUSION Based upon the foregoing, Defendant respectfully requests this Court order that Defendant be released pending his appeal. Defendant further requests that the remaining portion of his sentence of imprisonment be stayed pursuant to Fed. R. Crim. P. 38(b) because "if the defendant is released pending appeal, the court must stay a sentence of imprisonment."

RESPECTFULLY SUBMITTED this

15th

day of August 2006.

ROSENQUIST & ASSOCIATES

By:

/s/ Anders Rosenquist Anders V. Rosenquist Attorney for Defendant

Case 2:04-cr-00809-NVW

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ORIGINAL filed this 15th day of August 2006 with: Office of the Clerk Arizona District Court COPY delivered this 15th day of August 2006 to: Assistant U.S. Attorney Two Renaissance Square 40 N. Central Avenue Suite 1200 Phoenix, AZ 85004-4408 Andrew Taylor

By:

/s/ Anders Rosenquist

Case 2:04-cr-00809-NVW

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