Summary of False Evidence Error by the Appeal Court and Substantial Impact Against the Interest of Justice.
The Appeal Panel misunderstood the significant impact that knowingly presenting false data and testimony through four key witnesses had on the integrity of the trial. The panel relied on a deliberate misrepresentation to excuse the widespread use of false data and testimony, which inflated losses by over $28 million and invalidated all the data used to prove the offense. Reynolds’ system directly tracked these omitted commissions, explicitly described as included in the key gains/losses data. (refer to 101i and Summary Chart 232).
The panel unreasonably concluded that Hosseinipour, with ineffective assistance acknowledged by six judges of the Sixth Circuit, could have uncovered well-hidden data manipulations to falsify data and challenged it during cross-examination.
The government misled the panel on its “knowledge” of “filtering out” 28 million dollars of commissions from its key loss data, which it represented to include. (101i) Knowledge is proven through witness’s testimony (Doc 663 #6572) and request to “filter out” exculpatory commissions from (7240) just before trial. Reynolds testified that these commission types (funds transfers) “filtered out” of 101i were “tracked.” (doc 498 #4220 4221)
Q. Let me ask you this, if you recall: Do you recall whether I2G had a gift — this has to do with one of the charts you were shown and one of the spreadsheets — whether I2G had a gift certificate function within the e-wallet where one distributor who had commissions built up could request a gift certificate and a number was issued and the distributor could use the gift card to pay for a new enrollee? (Doc 498 #4221)
A. The system does include that functionality; it’s perfectly conceivable. There were a lot of financial transfers — or transactions that dealt with what we call funds transfers, and that’s how a gift certificate is paid for. ..The gift certificate could be used for anything.
Reynolds acknowledges in his post-trial affidavit that he, Dr. Keep, and Agent McClelland provided false testimony. The affidavit reveals that significant tracked commissions, which he and Keep had claimed were included, were “filtered” out of the 101i data. In contrast, non-tracked commissions, such as “external checks,” could not be “filtered” from the data.
The $28 million in omitted commissions and “fund transfers” were the source of the purchases and, therefore, were not losses as represented in the 101i Gain/Losses (n column) and summary chart 232. These amounts were not hidden or “missing funds” as described. (Doc 671 #7702).
These commissions reduce the reported losses from $31 million to $3 million. When accounting for the conceded $800,000 in waived auto-ships (Doc 663 #6573) and $600,000 in refunds (Doc 663 #6569), the losses are reduced to $1.5 million. This aligns with the post-trial claims of $1.5 million (Doc 718 #11343).
As proof of losses relied entirely on representations from 101i Participant Gains and Losses, which are proven invalid, no trial proof of losses existed beyond nine witnesses with gross purchases totaling $85,000. However, since their loss representations were also represented from 101i, excluding commissions received, these losses were also invalid.
The massively inflated losses and false 97% loss rate had a devastating impact, representing 34 million in losses that never occurred. Accordingly, the panel relied on this false evidence to misjudge Hosseinipour and deny each of her arguments.
The government knew of the significant commission data as it directed Reynolds to “filter” it (Doc498 #44163). The new data requests days before trial suggest an intended purpose. Agent McClelland admitted that commission records showed 40 million in paid commissions.
Keep and Reynolds falsely described 101i as total “Participant Gains and Losses,” misrepresenting the losses of 18,000 distributors (Doc 487 #3876 Doc 498 #4163, 64) and used extensively at trial.
The integrity of the trial was further compromised by three key witnesses’ misrepresentations of two years of non-i2G data as belonging to i2G (Doc 498 4123, 4136, 4163, 64). The determination of a pyramid scheme or securities losses can not be proved through the data of an unrelated company, which operated after I2G was closed.. Agent Sauber admitted knowledge that the data ran until March 2017 (Doc 663 #6557) and included Maike’s successive company XTG1 (Doc 663 #6572)
Despite the panel recognizing that I2G was closed in December 2014, it relied on data that ran until March 2017, invalidating the data, testimony, and conclusions drawn from it (Doc 498 4123, 4136, 4163, 64). The government knew about the unrelated company, as XTG1 is mentioned in two post-I2G email exhibits.
Dr. Keep impressed the jury with the necessity of accurate data to determine a pyramid scheme. Despite clear knowledge of the compromised data, the government repeatedly misrepresented XtG1 activity as part of I2G. (Doc 498 #4098-4100)
XTG1 included 4,091 distinct distributors and generated over four million sales unrelated to I2G, which was not rebutted. The invalid data undermined Dr. Keep’s analysis, conclusions, and testimony. Since Keep’s testimony was the basis for concluding a pyramid scheme, it cannot be considered harmless.
The panel acknowledged that an “overstatement of losses” occurred in 101i, but misunderstood the magnitude of over $28 million in omitted paid commissions misrepresented as losses through four key witnesses.
Hosseinipour’s ability to challenge the “filtered data” was hindered by deliberate attempts to discredit the original data (Doc 718 #11345) by attributing false statements to Reynolds about “problems” with the data, which the Court even recognized as “self-serving.”(Doc 718 #11345) The false testimony could not be identified until Reynold’s affidavit affirmed it and validated the exculpatory data and “filtered commissions.” Therefore, cross-examination on “post-trial” discoveries was not possible.
The “filtered” commissions also concealed significant “gains” exceeding $786,000 to “victim investors” Pepito, Kim, Jeong, and Hussain as represented in jury instructions. No data was unimpacted or invalidated.
Given the severity of what can only be described as a fraud upon the Court, the interest of justice demands a rehearing of the evidence using the proper standard.