Opinion ID: 199159
Heading Depth: 2
Heading Rank: 2

Heading: Intended loss calculation (Golenbock and Stein)

Text: 60 The district court increased Golenbock and Stein's base offense levels by six levels because of the amount of the intended loss for which they were responsible. 7 The court determined that the intended loss was approximately $74,000, which it characterized as the amount of the net gain over the mortgage and expenses. The district court's findings were based on the facts that the Wellfleet property was sold in June, 1996, for $175,000, and that $73,906.66 remained after the mortgages, tax obligation and brokerage commission were deducted from the escrow. 61 We review a district court's intended loss findings for clear error. See United States v. Robbio, 186 F.3d 37, 43 (1st Cir. 1999); see also United States v. Cali, 87 F.3d 571, 575 (1st Cir. 1996) (clear error standard applied to sentence enhancements even where defendant objected in district court). Courts can, and frequently do, deal with rough estimates, and as such, a party dissatisfied with a sentencing court's quantification of the amount of loss . . . must go a long way to demonstrate clear error. United States v. Rowe, 202 F.3d 37, 42 (1st Cir. 2000) (internal citations omitted). 62 Golenbock and Stein argue that the district court's calculation was flawed because it did not take into account the more than five years of carrying costs that defendants had paid while the property grew in value from its $120,000 purchase price in 1990 to its $175,000 sale price in 1996. During this time period, Golenbock and Stein made insurance and mortgage payments totaling approximately $70,000. Golenbock and Stein argue that the creditors reaped the benefit of an increase in the value of the property that was created by Golenbock and Stein's payments. Golenbock and Stein argue there was no intended loss whatsoever, because the amount they paid to carry the property over the five years approximately equaled the net value in 1996. Had they kept the sales proceeds, their net would be zero after subtracting the payments they made. 63 But we believe the district court's intended loss calculation was justifiable and well within the standards of the Sentencing Guidelines and relevant case law. Section 2F1.1 of the Guidelines provides that an offense level shall be increased by six levels if the loss or intended loss amounts to more than $70,000. Intended loss need not be determined with precision; [t]he court need only make a reasonable estimate of the loss, given the available information.' United States v. Pervaz, 118 F.3d 1, 10 (1st Cir. 1997) (quoting U.S.S.G. 2F1.1, cmt. (n.8)); see also United States v. Parsons, 141 F.3d 386, 392 (1st Cir. 1998) (loss is a proxy for the seriousness of the offense). Section 2F1.1 does not otherwise specify or restrict the means by which intended loss may be calculated in a bankruptcy case. Compare U.S.S.G. 2F1.1 cmt (n.8) (providing special rules for calculating loss in particular types of cases, including loan fraud). 8 64 Here, it was reasonable for the district court to treat the $74,000 net gain realized on the 1996 sale of the property as the measure of the creditors' intended loss. For each of the five previous years during which Golenbock and Stein held it, their exclusive control gave them the economic use of the property in addition to the profit they later realized when the property was sold. Golenbock and Stein could rent the property to others and on occasion did so. In lieu of renting it, they could and did themselves enjoy its use. In either event the property, during all of the years when they were paying the carrying charges, had immediate value to those who controlled it, just as ownership of one's home provides continuous economic value distinct from the capital gain when the home is eventually sold. In the circumstances, we think the district court could reasonably treat the economic value of the property during the years Golenbock and Stein fraudulently withheld it from their creditors as offsetting its carrying expenses, leaving the $74,000 net gain on the 1996 sale as the amount Golenbock and Stein would have realized had the fraud succeeded and, conversely, as the loss the fraud would have caused to the creditors had the scheme worked. Golenbock and Stein clearly never intended by paying the mortgage and other expenses to benefit their creditors; during this period they alone retained the exclusive right to the property's use. We do not find clear error in the district court's refusal to subtract Golenbock and Stein's annual payments from the $74,000. 65 Nor is there error in the fact that the court evaluated the intended loss at the time Golenbock and Stein sold the Wellfleet property, rather than at the time they filed for bankruptcy. Like conspiracy, bankruptcy concealment has been described as a continuing offense. See 18 U.S.C. 3284; 9 United States v. Gilbert, 136 F.3d 1451, 1453 (11th Cir. 1998); Sultan v. United States, 249 F.2d 385, 386 (5th Cir. 1957) (noting that 3284, in addition to describing a statute of limitations, has substantive consequences). [C]oncealment by its nature is an act which goes on until detected or its consequences are purged. Sultan, 249 F.2d at 386. The fraud was still ongoing at the time the Wellfleet property was sold, as the concealment had not yet been revealed at that point. Hence, it was proper for the court to base its intended loss findings on the value of the property at the time of the sale.