When defending against federal white collar crime charges, an important aspect of the case is the loss calculation. The potential sentences defendants face often depend on this loss calculation, which considers the amount of financial harm caused by financial or economic crimes.
However, loss calculation has often been a hotly contested aspect of criminal cases in the federal system. In attempting to argue for longer sentences, prosecutors will often suggest that the loss in any given case was higher than the loss that actually happened. One way they do that is to look at the loss the defendant intended to create.
The U.S. sentencing guidelines for financial crimes instruct judges to look at the loss the defendant intended to cause in addition to the loss the defendant actually caused to others.
Because of this quirk in the guidelines, many white collar defendants have been exposed to longer sentences because of the loss that was possible due to the crime, regardless of the defendant’s actual intent. However, the U.S. Court of Appeals for the 10th Circuit recently addressed this issue and found that intended loss needed to be calculated by looking at what the defendant actually intended, instead of merely looking at what losses were possible.
The case involved a man who pleaded guilty to bank fraud and identity theft charges. Because of the guilty plea, the only issue that the trial judge needed to decide was the defendant’s sentence. The defendant was accused of taking and forging convenience checks that come with credit cards.
Although the defendant did not know the exact credit limits on the accounts, prosecutors convinced the judge to use the credit limits of the accounts to calculate the intended loss. As a result, the defendant received a higher sentence under the guidelines. On appeal, the 10th Circuit disagreed with the trial judge and vacated the defendant’s sentence. The 10th Circuit sent the case back to the trial court, where the man’s sentence will be calculated based on what he actually intended, instead of the amount he could have theoretically taken.
Source: U.S. v. Manatau, 10-4101, (10th Cir. 2011)