Opinion ID: 778756
Heading Depth: 3
Heading Rank: 1

Heading: Loss determination for sentencing purposes

Text: 50 The government claims that the district court erred in its calculation of loss because (1) it improperly reduced the estimated value of the Bremen drawings due to their initial theft from the Bremen Museum in 1945 and (2) the district court's valuation of the art was not adequately supported by the record. 51 The parties contested the valuation of the art in a classic battle of the experts. The government's first expert, Dr. Andrew Robison, Senior Mellon Curator of Prints and Drawings at the National Gallery in Washington, D.C., opined that the Bremen drawings included authentic works by Dürer and either Rembrandt or a student of Rembrandt. He estimated the total value of two Dürers to be $2.5 million and all twelve of the Bremen drawings to be $2.73 million. Robert Kashey, a New York art dealer, estimated that fourteen of the Baku Pieces were collectively worth $18,500. 52 To rebut Robison's testimony, the defense called Dr. Thomas Hoving, former Director of the Metropolitan Museum of Art and an author of a recent book about art forgeries. Hoving opined that the Bremen drawings attributed to Dürer and Rembrandt were fakes and that their value would greatly diminish at the slightest hint of inauthenticity. In addition, Hoving testified that the cloud on the title of the Bremen drawings due to the thefts from the Bremen and Baku Museums rendered their worth nil because no art gallery or collector would buy them. As of the date of sentencing, the issue of whether the artwork belonged to the Bremen Museum or the Baku Museum had not yet been resolved. 53 The district court credited Hoving's testimony and rejected the government's argument that the art's value should be assessed from the perspective of the Bremen Museum, without consideration of the 1945 theft by the Soviet army. As a result, the district court found that the art in question was only worth $183,500. 54 We review the district court's factual determinations for sentencing purposes for clear error and its application of the Sentencing Guidelines de novo. See United States v. Fitzgerald, 232 F.3d 315, 318 (2d Cir.2000). Application note 2 of § 2B1.1 instructs that, [o]rdinarily, ... the loss is the fair market value of the particular property at issue. U.S.S.G. § 2B1.1, cmt. 2 (1998). 2 The question for us, apparently one of first impression, is whether the loss should be measured by the value to the original victim (i.e., the Bremen Museum) or the value to the last victim (i.e., the Baku Museum) where a defendant is in possession of stolen property with a cloud on its title due to an earlier, unrelated theft. 55 The government argues that loss should be determined by the value to the victim on the legitimate market, rather than its diminished value on the black market. We agree that such a proposition makes sense in the usual case. See United States v. Coviello, 225 F.3d 54, 63 (1st Cir.2000) (Obviously, the fact that a product is sold for less because it is stolen provides no basis for lowering the loss calculation. ...). The government contends that by devaluing the artwork due to the 1945 theft from the Bremen Museum, the district court essentially based its loss calculation on the diminished black market value of the art. We disagree. 56 Hoving's testimony regarding the effect of the cloud on the title related to the value of the Bremen drawings to any possessor on the legitimate market, not the black market. That Aleskerova and her co-conspirators may have believed that the drawings would have sold for millions does not alter the calculus. As we stated in United States v. Robie, [o]ne who steals rhinestones thinking they are diamonds is surely held to account for the theft of baubles not gems. 166 F.3d 444, 455 (2d Cir.1999). 57 A loss determination that reflects the value of the artwork to the last possessor who operates on the legitimate market is both reasonable and permissible under § 2B1.1. Given the state of uncertainty created by the cloud on the title and the ongoing dispute over which museum could claim legitimate ownership of the drawings, the district court's decision to identify the victim as the Baku Museum (the entity directly impacted by the loss due to the chain of theft in which the defendant participated) and not the Bremen Museum (an earlier owner whose claim was uncertain and whose loss, if loss there be, was the fault of a different set of actors) was not clearly erroneous for purposes of § 2B1.1. 58 The government further challenges the district court's final valuation of the art, $183,500, as lacking a factual basis. The district court heard testimony from experts placing the value of the artwork between nil and several millions. The district court could make a reasonable finding by settling upon a valuation within the range created by the experts. See U.S.S.G. § 2B1.1 cmt. 3 (1998) ([L]oss need not be determined with precision.); United States v. Carboni, 204 F.3d 39, 46 (2d Cir.1999). We note that the district court also could have exercised its discretion to use an alternative measure for loss that accounted for values of the artwork to the Baku Museum other than its fair market price, such as its value in generating revenue or its replacement cost, if such evidence had been presented. See U.S.S.G. § 2B1.1 cmt. 2 (1998). To the extent that the district court's loss figure reflects a reliance on Hoving's opinion that the artwork was worthless, such reliance was not clearly erroneous, see Fitzgerald, 232 F.3d at 318, and thus we will not disturb the district court's determination of loss in this case. 59 The government's final objections to the loss calculation, that the court made an arithmetic error and that the value of the Baku works was omitted from the final sum, were not raised at or before sentencing. Thus, we decline to disturb the sentence on these grounds. See United States v. Ben Zvi, 242 F.3d 89, 95 & n. 1 (2d Cir.2001).