Opinion ID: 593259
Heading Depth: 2
Heading Rank: 2

Heading: Amount of Loss Under Section 2F1.1

Text: 15 The base offense level assessed for offenses involving fraud varies with the amount of the loss occasioned by the offender. See U.S.S.G. § 2F1.1(b)(1). At sentencing the district court found that the intended and/or attempted loss was as set forth in the addendum [to the presentence report], that is $267,874. Because this amount exceeded $200,000, but was less than $500,001, Galliano's base offense level was increased 7 levels. See U.S.S.G. § 2F1.1(b)(1)(H) (June 1988). 16 Galliano pleaded guilty to fraudulently obtaining two automobile loans, totaling $39,109.20, under the name Julian D. DiNero, from Valley Bank of Nevada (Valley Bank). Valley Bank recovered possession of both cars after Galliano defaulted on the loans, and sold them for $30,245.98. Galliano also pleaded guilty to fraudulently obtaining a $153,700 home mortgage loan, under the name of Julian Dino DiNero, from California Federal Savings and Loan (California Federal). After he defaulted on this loan, California Federal foreclosed on the house and recovered $107,334. 17 Galliano contends the district court should not have included the amounts recovered by California Federal and Valley Bank in calculating the amount of loss under section 2F1.1(b)(1) because he sincerely intended to repay both institutions with the proceeds of an expected civil suit settlement involving hundreds of thousands of dollars worth of gemstones. Therefore, he argues, the amount of intended loss is zero; only the loss actually incurred by the banks is relevant. Under Galliano's calculation, the gross loss on the California Federal and Valley Bank loans, $192,809.20 ($153,700 plus $39,109), should have been disregarded and only the actual loss, $55,229.22 ($46,366 plus $8,863.22), should have been considered in calculating his sentence. 1 We reject this argument. 18 When calculating the loss under section 2F1.1 of the guidelines, the commentary instructs the district court to use the greater of the actual loss suffered or the intended or probable loss the defendant attempted to inflict. See U.S.S.G. § 2F1.1, comment. (n. 7) (June 1988); United States v. Davis, 922 F.2d 1385, 1391-92 (9th Cir.1991). Moreover, when a person commits fraud and absconds with no intent to repay, the fact that he is caught and part of the money is recovered does not change the calculation of loss: the amount of the intended loss is the overall amount taken. United States v. Wills, 881 F.2d 823, 827 (9th Cir.1989). 19 On the other hand, several Circuits have recently held that when a person obtains a loan or contract through fraud, but intends to repay or make good on his part of the deal, he is not accountable for the full amount of the loss as intended loss. Rather, in such a case, the intended loss is zero; only the loss actually incurred by the victim, if any, may be used to calculate the amount of loss. See United States v. Schneider, 930 F.2d 555, 559 (7th Cir.1991) (Posner, J.) (calculation of loss is based on actual loss to the victim if the defendant intended and was able to repay the loan); United States v. Kopp, 951 F.2d 521, 536 (3d Cir.1991) (case remanded to determine, inter alia, whether the defendant intended to inflict any loss on the bank); United States v. Smith, 951 F.2d 1164, 1167 (10th Cir.1991) (sentence revised because there was no support in the record for the district court's finding that the defendant intended to inflict a loss on the victim and there was no evidence of any actual loss); United States v. Rothberg, 954 F.2d 217, 218 (4th Cir.1992) (if the amount of intended loss is zero, the actual loss, if any, is used to calculate loss). But see United States v. Brach, 942 F.2d 141, 143 (2d Cir.1991) (the intended loss is irrelevant to calculating the amount of loss, because it is enough to recognize that [the defendant] put [the victim] at risk for the full amount of the loan). 20 There is no controlling Ninth Circuit law on the question whether the gross amount of a fraudulently obtained loan is the amount of loss to be used for sentencing purposes. But see United States v. Hughes, 775 F.Supp. 348 (E.D.Cal.1991) (if the defendant intended to repay a fraudulently obtained loan, the intended loss is zero and the actual loss is the loss for sentencing purposes). 21 We reject Galliano's argument that his sentence should have been calculated with reference to the actual, net loss suffered by the banks and not by the gross amount he obtained by his fraudulent loans. Galliano's argument is based on the premise that he intended to repay what he borrowed. The district court found this premise to be false. 22 In response to Galliano's contention that he intended to repay the loans, the district court ruled I do disagree and find that in this case the intended and/or attempted loss was as set forth in the addendum, that is $267,874.00. 2 This factual finding is not clearly erroneous. It is sufficient to establish that Galliano did not intend to repay the loans. Because he did not intend to repay the loans, we look to the gross amount of the loans he obtained by his fraud to determine the intended loss for sentencing purposes. We do not reach the question whether a person who does intend to repay a loan obtained by fraud is accountable for sentencing purposes for the full amount of the loan, see Brach, 942 F.2d at 143, or only the actual loss, see Schneider, 930 F.2d at 555; Kopp, 951 F.2d at 536. 23 We conclude that the district court did not err in calculating Galliano's sentence on the basis of the gross amount of the loans he obtained from California Federal and Valley Bank.
24 Galliano argues the district court erred by including in its calculation losses of $74,254.48 and $810.82 attributable to counts the government agreed not to prosecute, or dismissed pursuant to the plea agreement. 25 Section 1B1.3 required the court to determine the amount of loss on the basis of all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction. U.S.S.G. § 1B1.3(a)(2) (June 1988); accord United States v. Restrepo, 903 F.2d 648, 651-53, modified, 946 F.2d 654 (9th Cir.1991) (en banc) (the sentencing court must consider relevant conduct in making adjustments to the base offense level for specific offense characteristics, such as the amount of monetary loss). This is so even though Galliano was not charged with the relevant conduct. Id. 26 Because there is no dispute that the $74,254.48 loss arose out of a common scheme, the district court properly included this sum in calculating the total loss Galliano attempted to inflict. 27 With regard to the $810.82 loss attributable to the dismissed counts, the district court may or may not have erred by including this sum in its loss calculation. We do not decide this question because we don't have to. The error, if any, was harmless because the amount of the calculated loss exceeds $200,000 even without including the $810.82. Thus, Galliano's base offense level was properly increased by 7 levels. See U.S.S.G. § 2F1.1(b)(1)(H) (June 1988) (losses exceeding $200,000 receive an increase of 7 levels). Cf. Williams v. United States, --- U.S. ----, ----, 112 S.Ct. 1112, 1121, 117 L.Ed.2d 341 (1992) (error in misapplying the guidelines is harmless if the district court would have imposed the same sentence absent the erroneous factor). 28