Opinion ID: 167108
Heading Depth: 2
Heading Rank: 7

Heading: Significance of Collateral in Determining Amount of Loss

Text: 132 Mr. Wittig and Mr. Weidner also challenge the district court's determination of the amount of loss under an intended loss theory. They invoke the commentary to USSG § 2B1.1, which defines [i]ntended loss as: 133 (I) . . . the pecuniary harm that was intended to result from the offense; and (II) includes intended pecuniary harm that would have been impossible or unlikely to occur ( e.g., as in a government sting operation, or an insurance fraud in which the claim exceeded the insured value). 134 USSG § 2B1.1 cmt. n. 2(A)(ii) (2001). 135 Here, the district court found that both defendants intended a loss of $1.5 million. In reaching this conclusion, the court did not consider the value of the collateral that Mr. Wittig had pledged to secure his line of credit. The court reasoned that, when he had obtained the $1.5 million increase on April 30, 2001, Mr. Wittig had pledged no new collateral, and that even considering the collateral that he had previously pledged for the line of credit, the amount was still below the loan-to-value ratio required by the bank. See Wittig App. at 2639-40; Weidner App. at 622. 136 Mr. Wittig and Mr. Weidner contend that the district court erred by not considering the fact that Mr. Wittig provided adequate collateral for the $1.5 million increase in his line of credit. They note that this circuit has . . . required that the value of security given for a loan be taken into account in determining intended loss. United States v. Schild, 269 F.3d 1198, 1201 (10th Cir.2001); see also United States v. Nichols, 229 F.3d 975, 980 (10th Cir.2000) (The security of [a] loan is a valid consideration in evaluating a defendant's realistic intent and the probability of inflicting the loss.). In response, the government has chosen not to argue in support of the district court's disregard of the collateral provided by Mr. Wittig, instead arguing only that the amount of loss determination is proper under the gross receipts approach that we have addressed above. 137 From a review of the record, we conclude that the district court did not adequately consider the amount of collateral provided by Mr. Wittig in determining the amount of loss under an intended loss theory. Although there are instances in which a district court may ignore collateral in determining intended loss, the court must first determine that the defendant intended to deprive the lender of its collateral. See United States v. Williams, 292 F.3d 681, 686 (10th Cir.2002) (stating that we have upheld a finding of intended loss of an entire loan amount where the record indicated the defendant intended to permanently deprive the lender of security by concealing pledged collateral). 138 The district court did not make such findings. The facts noted by the district court—that Mr. Wittig provided no new collateral for the $1.5 million increase in his line of credit and that amount of collateral provided did not comport with the bank's rules—might justify the disregard of some of the collateral pledged. However, absent further explanation and findings, we cannot see how those facts justify a disregard of all the collateral pledged by Mr. Wittig in calculating the amount of intended loss. 139 Accordingly, we conclude that the district court also erred in calculating the amount of loss under the intended loss approach.