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White Collar Defense & Compliance Developments in Criminal Law, Federal Case Law and Statutory Developments

All Relevant Conduct Included In Calculating Guidelines Loss, Even Counts Of Acquittal

Posted in Sentencing

Jana C. Volante writes:

Last week, we explored one aspect of an interesting new Seventh Circuit mortgage fraud opinion, concerning the government’s use of a willful blindness argument to prove the requisite intent to commit fraud.

Part II of the discussion of United States v. Westerfield, 2013 WL 1405881 (7th Cir. Apr. 9, 2013) will focus on a recurring sentencing issue addressed in that case, the reliance in calculating “loss” on transactions reflected in counts on which the defendant was not found guilty.

In Westerfield, the defendant attorney had been convicted for her role in facilitating fraudulent real estate transfers involving the use of stolen identities to “sell” houses that were not for sale to fake buyers. She was charged with five such transactions, and found guilty only in three of them. Based upon a “loss” calculation derived from all five charges, the district court sentenced her to 72 months in prison with three years of supervised release and ordered her to pay $916,300 in restitution.

On appeal, Westerfield challenged her sentence based on the district court’s application of the U.S. Sentencing Guidelines. She argued that the district court improperly calculated the “loss” under § 2B1.1(b)(1) of the U.S. Sentencing Guidelines because it incorrectly used the value of the  loss stemming from all five of the transactions she facilitated ($916,300), instead of the value of the loss from only the three transactions for which she was convicted ($714,000).  Joining the majority of courts of appeal, the Seventh Circuit held that, under § 1B1.3(a)(2), the district court is required to consider all the “relevant conduct” of the defendant, which includes “all acts and omissions . . . that were part of the same course of conduct or common scheme or plan as the offense of conviction.” Thus, the district court correctly included all five transactions that Westerfield had facilitated in the calculation of the loss, even though she was acquitted by the jury on two of them.

Part II of II

(Jana C. Volante, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Pittsburgh, PA office. Her practice concerns white collar criminal defense and commercial litigation)