The Federal Sentencing Guidelines were enacted in 1987 to create uniformity in sentencing, including for sentences white-collar crimes. There has always been a perception that white collar crimes were treated more leniently than other crimes. The U.S. Sentencing Commission (USSC) created the §2B1.1(b)(1) Loss Table, which adopted enhanced penalties for people who are convicted of committing white-collar crimes. The more severe the loss, the more severe the sentence.
Since the sentencing guidelines were implemented, judges, lawyers, and others involved in the federal criminal justice system have called for a reassessment of the sentencing guidelines and their emphasis on the amount of loss as the primary driver of the severity of the sentence. Courts have recently weighed in on the inequities caused by sentencing people on the amount of “intended loss” where there is a significant disparity between that amount and the “actual loss.”
When a judge sentences someone who has been convicted of a white-collar crime, they begin with guideline §2B1.1, which addresses “Larceny, Embezzlement, and Other Forms of Theft.” Then they apply the Special Offense Characteristics (SOC) associated with §2B1.1.
The §2B1.1 Loss Table identifies 16 different categories, increasing in dollar value from $6,500 to more than $550,000,000.
The amount of loss caused by the offense is the primary driver of sentencing for economic crimes. However, under the guidelines and the commentary, a defendant can be sentenced based upon “intended” loss rather than “actual” loss. This distinction often results in extraordinarily unfair results because a person can be sentenced on a very large “intended” loss when the victims lost little or no money.
The commentary to the sentencing guidelines, at §2B1.1 cmt. N.3 (i)-(ii), requires that a court compare the financial harm the defendant “actually” inflicted on his victims with the losses that were “intended” to result, and to apply the greater amount. “[I]ntended loss” is defined as “the pecuniary harm that the defendant purposely sought to inflict.” Thus, when a defendant is involved in a scheme that failed to succeed, or only partially succeeded, he/she can be sentenced based upon a fictitious amount.
This commentary to the guidelines provides that the defendant’s subjective intent is the appropriate standard when analyzing intended loss and that “reasonable inferences about the defendant's mental state [may be made] from the available facts.” Under the subjective standard, prosecutors can argue that as long as a person intended to inflict a loss, the person should receive the same enhancement as a defendant who actually caused a loss. This has resulted in grave inequities. For example, in a credit card fraud case, defendants are often sentenced based upon the total credit limit on each card, rather than the amount that was actually fraudulently charged.
Recognizing the disparities in sentencing people for “intended” losses, where there was little or no “actual” loss, courts have recently questioned the fairness and legality of the commentary and have required a greater standard of proof as to the amount of “intended” loss. In United States v. Kirschner, 995 F. 3d 327 (3d Cir. 2021), the Third Circuit Court of Appeals, questioned the government’s argument that the “intended” loss equalled the maximum potential loss that the defendant could have committed and held that the courts must conduct a “‘deeper analysis’ before inferring that a defendant intended to cause a particular loss.” The Kirshner Court held that the government must prove by a preponderance of the evidence the defendant’s intent and the court must make a “reasonable estimate” of the intended loss. Thus, “intended” loss no longer equates with maximum potential loss and an individualized inquiry must be made to determine the amount of loss that the defendant purposely intended to cause.
In addition, in United States v. Nasir, 17 F. 4th 459 (3d Cir. 2021), the Third Circuit, citing the U.S. Supreme Court decision in Kisor v. Wilkie, 139 S. Ct. 2400 (2019), held that “[r]ather than defer to the commentary, we should use lenity to interpret ambiguous Guidelines.” Thus, defendants can now argue the rule of lenity in order to defeat the inequitable direction in the commentary requiring “intended” loss to control at sentencing. As the Third Circuit stated in Nasir, “[t]he presumption of liberty remains crucial to guarding against overpunishment. When a guideline is ambiguous, the rule of lenity calls for adopting the more lenient of two plausible readings……..There is no compelling reason to defer to a Guidelines comment that is harsher than the text.”
In order to succeed in persuading a court to follow these newly established principles of law, you need an experienced federal criminal defense attorney who knows how to present evidence that will educate the judge about the flexibility of federal sentencing guidelines and compel a successful result.
If you have been charged with a white-collar crime in federal court, you need a criminal defense attorney who has experience defending people accused of white-collar crimes and has a proven track record of success.
Philadelphia City federal criminal defense attorney Hope Lefeber has spent more than 30 years defending people who have been accused of white-collar crimes. She began her career as an enforcement attorney with the Securities and Exchange Commission (SEC), where she learned first-hand how the government prepares and prosecutes white-collar criminal cases. Today, she uses that experience to defend people facing white-collar criminal charges in federal court.
Ms. Lefeber has defended high-profile clients, including executives of Fortune 500 Companies, businessmen and women, professors, doctors, accountants, healthcare professionals, individuals involved in securities transactions, and lawyers who have been under investigation or charged by the government with committing a crime. She regularly engages highly regarded forensic experts to assist her in her investigation and analysis of complex financial cases to minimize the amount of loss alleged by the government and to achieve superior results for her clients.
If you are under investigation or have been charged with a white-collar crime, contact Hope Lefeber today to schedule a confidential consultation to discuss your situation and how she can help.