Opinion ID: 2723829
Heading Depth: 5
Heading Rank: 1

Heading: Actual loss

Text: Actual loss is the “reasonably foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1 cmt. n.3(A)(i). The district court concluded that the actual loss resulting from the defendants’ fraud was $202 million. This calculation was based on a report from Fair’s trustee in bankruptcy. After a thorough review of Fair’s books and the claims submitted by investors, the trustee reported that Fair’s investors were owed more than $208 million (excluding claims for $7 million in interest payments) and that around $5.6 million in assets were recovered, resulting in a net loss of $202 million. (The government notes the arithmetic here is off and the net loss should have been a bit higher, but that does not affect the analysis.) This evidence is easily sufficient on its own to support the judge’s finding of actual loss. In addition to the trustee’s calculation, the judge heard substantial evidence at trial that the money from the certificates issued by Fair ended up in the pockets of the defendants and related parties. The defendants contend that their fraud did not cause the full $202 million in losses. Instead, they cast partial blame on the effects of the 2008 financial crisis and the ensuing recession. But they did not substantiate that claim. The only hard evidence they submitted consisted of an affidavit of a former Obsidian employee attributing Fair’s declining value to market forces and valuations generated by Fair itself reporting that it had more assets than liabilities in November 2009. But Fair’s own internal accounting could not be trusted; the evidence established widespread manipulation of its financial information. And the affidavit from the former Obsidian employee is 28 Nos. 12-3819, 12-3833 & 12-3867 very general; it does not indicate how much of the loss in value was attributable to broader problems affecting the American economy. While it is certainly possible that the recession compounded the effects of the defendants’ fraud, there is no reliable evidence establishing whether and to what extent it actually impacted Fair’s business. The restitution order was premised on the court’s finding of actual loss, and appropriately so. See Allen, 529 F.3d at 396–97. Because we find no error in the judge’s actual-loss finding, the defendants’ challenge to the restitution order necessarily fails.