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August 2, 2011

Significant Tenth Circuit ruling on meaning and application of "intended loss"

The Tenth Circuit yesterday released a thoughtful new decision about the application of the important federal sentencing guidelines concept of "intended loss" in US v. Manatau, No. 10-4101 (10th Cir. Aug. 1, 2011) (available here).   Though the stakes in the Manatau case itself are small, I suspect a lot of white-collar defense practitioners will find the ruling significant. Here is the start of the opinion and a few key excerpts (with emphasis in the original):

When calculating an advisory guidelines sentence for an economic crime a district court naturally must take account of the losses the defendant caused others.   But the guidelines instruct that, when fashioning a sentence, a court should also account for the losses the defendant “intended” but was unable to realize.   The question we face in this case is what counts as an “intended” loss?  Unsurprisingly, we hold that the term means exactly what it says: to be included in an advisory guidelines calculation the intended loss must have been an object of the defendant’s purpose....

We hold that “intended loss” means a loss the defendant purposely sought to inflict. “Intended loss” does not mean a loss that the defendant merely knew would result from his scheme or a loss he might have possibly and potentially contemplated....

[T]he district court should examine what losses Mr. Manatau intended.   Of course, in answering this question the court is free, as we have explained, to make reasonable inferences about the defendant’s mental state from the available facts. In the sentencing context, too, the government need only prove Mr. Manatau’s intent by a preponderance of the evidence, and the court need only make a “reasonable estimate” of the intended loss.... The available credit limits on the convenience checks in question and the defendant’s knowledge (or lack of knowledge) of them may well be relevant evidence bearing on what loss a defendant did (or didn’t) intend.   But a court cannot simply calculate “intended loss” by toting up credit limits without any finding that the defendant intended to inflict a loss reasonably approaching those limits.

August 2, 2011 at 09:32 AM | Permalink

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