Opinion ID: 199119
Heading Depth: 2
Heading Rank: 1

Heading: Calculation of Intended Loss Figure

Text: 61 First, they claim that calculating an increase to their base offense level based upon an intended loss of $2.5 million was error. See U.S.S.G. § 2F1.1. Our review is for clear error. See United States v. Rizzo, 121 F.3d 794, 798 (1st Cir. 1997). Application Note 8 to § 2F1.1 provides that if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss. An intended loss finding should be upheld where there is good evidence of actual intent and some prospect of success. United States v. Robbio, 186 F.3d 37, 44 (1st Cir.) (internal quotation marks omitted), cert. denied, 120 S. Ct. 602 (1999). There was ample evidence of defendants' actual intent to cause a loss. The only remaining question is whether there was some prospect of success from defendants' fraudulent scheme. Defendants argue that FEMA never would have paid that amount of money and so a loss of $2.5 million was not possible. 62 The argument is too broad and the cases on which defendants rely are distinguishable. This is not a situation in which the fraud, if successful, could, for other reasons, have caused no loss. Cf. United States v. Khan, 969 F.2d 218, 220-22 (6th Cir. 1992). Nor is it a situation in which the defendant mistakenly and unreasonably believes that the amount he can get by insurance fraud is greater than an objectively determined maximum the insurer could have paid. Cf. United States v. Santiago, 977 F.2d 517, 525-26 (10th Cir. 1992). Nor is this a case in which the prosecution's theory of intended loss is economically irrational. Cf. United States v. Schneider, 930 F.2d 555, 558-59 (7th Cir. 1991). The rule this circuit has followed is that the intended loss determination made by the district court must be based on evidence of some prospect of success. Robbio, 186 F.3d at 44. That standard was met here. 63 The evidence showed that the defendants were going to submit certified fraudulent dump truck tickets and landfill log entries and a fraudulent survey from a licensed surveyor hired to inflate to FEMA the amount of debris at the site. In light of the need for speed when providing disaster relief, FEMA traditionally relies on the goodwill and candor of local municipal officials, as embodied in such certifications, rather than perform its own independent surveys. It is more than a bit odd to have defendants, who obviously took steps to make their fraudulent scheme successful, argue that the scheme in fact had no prospect of success and so they must receive a lesser sentence. The Guidelines do not give a break to defendants whose greed, in retrospect, may have overreached their abilities. Nor do the Guidelines impose an obligation of perfect diligence on the government agency to avoid being defrauded.