Opinion ID: 743028
Heading Depth: 4
Heading Rank: 2

Heading: Reliability of Data

Text: 24 Barnes' second basis for contesting the district court's loss calculation lies in the reliability of the data actually plugged in to the Government's formula, discussed supra. He contends that the gross sales figures used at sentencing, which had been taken from documents submitted to the Internal Revenue Service (IRS), were inaccurate to the extent that several of his employees had stolen from him by drawing checks on [his] business and, alternatively, it is unclear whether the food stamp transactions in which Barnes' employees participated had been reported or kept off the books. 25 As to Barnes' first argument, we fail to see how the employee theft alleged in this case greatly weaken[s] the reliability of the gross sales figures. At trial, Barnes testified that, on one occasion, somebody took some [pre-signed checks] and he posed as [Barnes] and went to the drive-up [at the bank] and cashed over 900 some dollars.... When several other attempts were made at such forgery, the bank simply refused to honor the checks submitted to it. Even if we assume, arguendo, that the $900.00 theft of which Barnes speaks is not de minimis relative to the $2,974,444.00 loss calculated by the district court, basic accounting principles lead us to conclude that the theft to which Barnes alludes has no impact whatsoever on the gross sales figures obtained from his IRS filings. That is, gross sales, in the legal and financial sense of the term, is the [t]otal of all sales at invoice prices, not reduced by discounts, allowances, returns, commissions, or other adjustments. Black's Law Dictionary, at 703 (6th Ed.1990). Thus, its value is derived from sales receipts. Returns and the like, including expenses paid by check (whether forged or authentic), do not affect amount of gross sales reported to the IRS. Barnes' argument in this regard is less than persuasive. 26 Barnes' second explanation for the discrepancy between gross sales and food stamp coupon redemptions is also faulted. He seems to contend that, if the cash-for-coupons transactions that his employees engaged in were kept off the books, gross sales would have been understated, thereby overstating loss vis-a-vis the Government's formula. The logic of Barnes' argument flies in the face of what § 2F1.1 of the U.S.S.G. requires us to measure--the value of the benefits diverted from intended recipients or uses. U.S.S.G. § 2F1.1, Application Note 7(d). In effect, we seek to determine the difference between legitimate food sales under the Food Stamp Program (e.g., those involving any food product for home consumption except alcoholic beverages, tobacco, and hot foods or hot food products ready for immediate consumption. 7 U.S.C § 2012(g)), and illegitimate ones. Had the employees of Family Market and Barnes Grocery actually recorded the illegal transactions at issue as sales, the Government's formula would be meaningless. Just as if Barnes were to have exchanged drugs or alcohol for food stamps and recorded the transactions as legitimate sales, the subtraction of sales from food stamp redemptions would result in an understatement of loss. Once again, the sentencing judge calculated loss by subtracting total legitimate food sales from food stamp coupon redemptions, both legitimate and illegitimate. We find this to have been a reasonable approach under the circumstances and do not believe clear error is manifest.