Opinion ID: 1085401
Heading Depth: 3
Heading Rank: 2

Heading: Private Investor Letter

Text: Second, Nelson challenges the valuation of the letter he wrote to private investors as $2 million in intended benefit for Cifer. The district court found “by a preponderance of the evidence [that] the defendant believed the investor letter would be used to generate at least two million dollars . . . if not three million dollars . . . and maybe [just] as a starting point.” The guideline commentary defines the value of “the benefit received or to be received” as “the net value of such benefit.” U.S.S.G. § 2C1.1(b)(2)(A), cmt. n.2. The commentary provides two examples: (1) A government employee, in return for a $500 bribe, reduces the price of a piece of surplus property offered for sale by the government from $10,000 to $2,000; the value of the benefit received is $8,000. (2) A $150,000 contract on which $20,000 profit was made was awarded in return for a bribe; the value of the benefit received is $20,000. Do not deduct the value of the bribe itself in computing the value of the benefit received or to be received. In the above examples, therefore, the value of the benefit received would be the same regardless of the value of the bribe. U.S.S.G. § 2C1.1, cmt. n.2; see United States v. Griffin, 324 F.3d 330, 366 (5th Cir. 2003). Nelson gave Cifer a letter expressing his official support for the Cifer project to Quorum Venture Group, which had been set up by the FBI. The original letter, drafted by undercover agents, suggested the New Roads City Council supported the contract, but Nelson edited it to state that while New Roads was “committed to working towards a contract” to use Cifer, it was contingent on the approval of the City Council and public input. Id. The letter concluded: “Be assured that the appropriate steps will be taken to ensure that 25 Case: 12-30101 Document: 00512407432 Page: 26 Date Filed: 10/15/2013 No. 12-30101 the city makes a good faith effort to reach a final agreement with [Cifer] that is both fair and reasonable.” Id. Nelson told the FBI after the investigation had ended that the letter “was to be used to obtain two to three million dollars in private investment money for the Cifer 5000.” As with the EPA letter, while Nelson may have expected the letter to contribute to Cifer’s ability to obtain private investments, the letter itself was not a funding application, nor did it explicitly request any funds. The record indicates that Nelson expected Cifer to use its investment funds to launch a legitimate waste receptacle cleaning business. See United States v. Sublett, 124 F.3d 693, 695 (5th Cir. 1997) (where a defendant “uses fraud to procure a contract but intends to provide the contracted for services,” the defendant “should not be characterized as causing as much loss as one who intends to totally cheat the victim, giving nothing in return.”). In overruling Nelson’s objection to the $2 million valuation, the district court found that Nelson “not only knew that there would be large profits generated as a result in part from this letter, but also that . . . the letter was yet one step perhaps in a series of steps of activities, the ultimate goal of which would result in a large sum of money to [Nelson] personally.” In making that finding, the district court referenced Nelson’s stated concern that Cifer would walk away with millions and leave Nelson with “some chump change.”That statement, however, was made in connection with the kickback scheme, see infra, and not in connection with the private investor letter. As noted above, furthermore, we have held that the expectation of receiving a large or “substantial” amount of money is insufficiently specific to base a calculation of intended loss. Roussel, 705 F.3d at 201 (“‘Substantial sums’ . . . cannot constitute an estimate of an intended benefit for the purpose of the sentencing guidelines enhancement.”). 26 Case: 12-30101 Document: 00512407432 Page: 27 Date Filed: 10/15/2013 No. 12-30101 Because we have concluded that a loss recalculation for the EPA letter is appropriate on remand, and because the district court’s reasoning with regard to the private investor letter relied in part on Nelson’s general expectation to generate “a large sum of money,” we deem that closer scrutiny is advisable regarding the valuation of the private investor letter.8