Sentencing — amount of loss

Listen to this article

U.S. Court of Appeals for the 7th Circuit

Criminal

Sentencing — amount of loss

In calculating amount of loss, the district court improperly attributed losses caused by a third party to the defendants.

“The government argues we can infer the district court’s reasoning based on the fact that the court found the Domnenkos knowingly and intentionally defrauded Countrywide, the loss of $600,000 was by no means a small amount, and that the Domnenkos acted sophisticatedly and with premeditation. We reject this argument because it reads any reasonable foreseeability analysis out of the Sentencing Guidelines. If the government was correct, practically every defendant convicted in every fraud case could be held responsible for every resulting loss, foreseeable or not, since everyone convicted under 18 U.S.C. § 1343 must have had an intent to defraud. See Sheneman, 682 F.3d at 628. But that is not what the Guidelines say. The loss must be ‘reasonably foreseeable,’ which requires some causation analysis, and that was not done here. See United States v. Whiting, 471 F.3d 792, 802 (7th Cir. 2006) (noting there must be both ‘but for’ and ‘legal’ causation for the enhancement to apply). We express no opinion on whether or not the loss is reasonably foreseeable to the Domnenkos, but such a determination should be made and explained by the district court. We therefore remand to give the court an opportunity to explain its rationale in attributing that loss amount to the Domnenkos.”

Affirmed in part, and Reversed in part.

13-1004 & 13-1005 U.S. v. Domnenko

Appeals from the United States District Court for the Northern District of Illinois, Norgle, J., Williams, J.