Opinion ID: 157837
Heading Depth: 2
Heading Rank: 1

Heading: Amount of Intended Loss

Text: The district court sentenced Mr. Ensminger based on the uncontested value of the properties, $540,700, that he attempted to have the U.S. Marshal seize. Mr. Ensminger argues that the district court erred in sentencing him based upon an intended loss of greater than $500,000, see USSG § 2F1.1(b)(1)(K), because there was no possibility of loss occurring as a result of his “Special Execution and Order of Assistance for Possession.” He asserts that he was “incapable of causing loss because of governmental control over the civil execution process and judicial intervention.” Aplt. Brief at 14. Mr. Ensminger relies upon our decisions in United States v. Galbraith, 20 F.3d 1054 (10th Cir. 1994), and United States v. Santiago, 977 F.2d 517 (10th Cir. 1992). In Galbraith, the defendant argued that “because his offense was committed in response to an undercover sting operation structured so there was no possibility of loss to a victim, the intended or probable loss was zero.” Galbraith, -4- 20 F.3d at 1059. We agreed, stating that the loss defendant subjectively intended to cause is not controlling if he was incapable of inflicting that loss. Because this was an undercover sting operation which was structured to sell stock to a pension fund that did not exist, defendant could not have occasioned any loss even if the scheme had been completed. Id. Galbraith relied in part on Santiago, in which we held that “whatever a defendant’s subjective belief, an intended loss under Guidelines § 2F1.1 cannot exceed the loss a defendant in fact could have occasioned if his or her fraud had been entirely successful.” Santiago, 977 F.2d at 524. In that case the defendant fraudulently filed a claim of $11,000 with his insurance company. However, the market value of the car that he falsely claimed was stolen was only $4,800, which was the maximum amount the insurance company would have paid had his scheme been successful. In finding that the $4,800 was the intended loss, we looked to the economic reality of the situation and established the principle that “the fair market value of what a defendant has taken or attempted to take defines the upper limit for loss valuation.” Id. at 525. While there is no dispute that the fair market value of the properties that Mr. Ensminger attempted to obtain was $540,700, see Aplt. Brief at 12-13, there is also no dispute that there was no way in which the scheme could have been successful. Although Mr. Ensminger successfully persuaded a deputy clerk to -5- sign the “Special Execution” document, the properties he sought had already been sold to third parties. No record facts suggest that there was even a remote probability that he could have either obtained the properties or the proceeds from the sale of the properties. While it is true that Mr. Ensminger tried to obtain the properties, and perhaps thought he could succeed, under Galbraith we must still consider that “the loss defendant subjectively intended to cause is not controlling if he was incapable of inflicting that loss.” Galbraith, 20 F.3d at 1059. Ordinarily, it would be necessary to remand for a determination on this issue; however, because the uncontroverted facts establish that there was no possibility for Mr. Ensminger to have succeeded in his scheme 1 we hold that the ten-level enhancement was clearly erroneous — applying Galbraith, the intended loss was zero. We note that a number of circuits have disagreed with our analysis of intended loss in Galbraith, reasoning that it “is inconsistent with application note 10 to section 2F1.1 of the guidelines, which by authorizing a downward departure ‘where a defendant attempted to negotiate an instrument that was so obviously fraudulent that no one would seriously consider honoring it’ implies that the 1 This conclusion is not based on “governmental control over the civil execution process and judicial intervention,” Aplt. Brief at 14, as Mr. Ensminger asserts. Such control does not preclude a remote possibility that he could have succeeded in his scheme. Rather, our conclusion is based on the fact that the properties had already been sold to third parties. -6- unlikelihood of an actual loss does not affect the computation of the ‘intended loss.’” United States v. Coffman, 94 F.3d 330, 336 (7th Cir. 1996) (quoting USSG § 2F1.1 commentary at n.10 (1997)); see, e.g., United States v. Studevent, 116 F.3d 1559, 1561-64 (D.C. Cir. 1997); United States v. Wai-Keung, 115 F.3d 874, 877 (11th Cir. 1997), cert. denied, 118 S. Ct. 1095 (1998); United States v. Ismoila, 100 F.3d 380, 396-97 (5th Cir. 1996); United States v. Robinson, 94 F.3d 1325, 1328 (9th Cir. 1996). 2 However, because “one panel of this court is bound by the precedent of an earlier panel absent en banc reconsideration or a superseding contrary decision of the U.S. Supreme Court,” LeFever v. Commissioner of Internal Revenue, 100 F.3d 778, 787 (10th Cir. 1996), we are bound to apply Galbraith.