Opinion ID: 743072
Heading Depth: 3
Heading Rank: 1

Heading: Sentencing Guidelines--Loss Value Calculation

Text: 36 On cross-appeal, the Government first asks us to vacate the judgment and remand for resentencing on the basis that the Guidelines loss attributable to Trupin cannot be based on the fair market value of the painting in 1978 when Trupin purchased it, but must be based on its fair market value in 1990, the year he last possessed and attempted to sell the painting. The Government argues (and it is undisputed) that at the time Trupin gave the painting to his representative to sell, its fair market value was between $1 and $1.5 million, much appreciated from the $100,000 which he had paid for it. 37 In deciding this point, the district court relied upon the November 1, 1993, amendment to Application Note 2 to § 2B1.1 of the Sentencing Guidelines. 5 This amendment provided that [l]oss does not include the interest that could have been earned had the funds not been stolen. U.S. Sentencing Guidelines Manual [hereinafter U.S.S.G.] § 2B1.1, Application Note 2 (1993). Evidently, the district court analogized the increase in the value of the painting to such interest. This analogy has found some support in United States v. Arjoon, 964 F.2d 167, 172 (2d Cir.1992) (defining, in the context of not taking into account property returned by the defendant to the victim voluntarily or before the theft was discovered, loss to mean not the ultimate harm suffered by the victim, but ... rather the value of what was taken. (citing United States v. Brach, 942 F.2d 141, 143 (2d Cir.1991))). On the other hand, the Government points to cases such as United States v. Henderson, 19 F.3d 917, 928 (5th Cir.1994), where the court found that this commentary sweeps too broadly, and that [i]nterest should be included if, as here, the victim had a reasonable expectation of receiving interest from the transaction. (citation omitted). 38 Unfortunately, the Sentencing Commission has not explicated this amendment to § 2B1.1. See U.S.S.G. Appendix C, amendment no. 482 at 318 (1993). We think that in the absence of such guidance, a district court could properly go either way on this question. The 1989 Manual Application Note 3 states that the amount of loss need not be determined with precision, and may be inferred from any reasonably reliable information available, including the scope of the operation. U.S.S.G. § 2B1.1, n.3 (1989). See United States v. Wilson, 900 F.2d 1350, 1356 (9th Cir.1990) (where goods have no readily ascertainable market value, any reasonable method may be employed to ascribe an equivalent monetary value to the items. (internal citations and quotations omitted)). We are required to give due deference to the district court's application of the guidelines to the facts, 18 U.S.C. § 3742(e), and will not overturn the court's ruling unless there has been an abuse of discretion. United States v. Parker, 903 F.2d 91, 103 (2d Cir.1990). Though the appreciation in a painting's base value is not necessarily the same as interest, the concepts are similar. In this case, where Trupin did not attempt to sell the painting at its full market value, we will not second-guess the district court's decision to value the painting at the lower amount, though we do not hold that, as a matter of law, appreciation in value can not be considered when calculating loss. 39