Improving the Guidelines for Fraud Offenses

The Problem:  There are numerous types of federal fraud offenses:  identity theft, wire fraud, mail fraud, tax fraud, and honest services fraud are just a few. The sentencing guidelines for these offenses are full of problems. One of the biggest problems with the fraud sentencing guidelines is the so-called “loss table.”

Sentences are based first and foremost on the amount of monetary loss (either real or intended) in the case:  the bigger the loss, the longer the sentence.  Then the guidelines increase the sentence based on overlapping and often unnecessary “enhancements.” Like drug cases, though, the amount of monetary loss is not necessarily a good indicator of how blameworthy the offender is.  In fraud cases, an offender might have played a minor role, for example, or might not personally have profited much from the crime even though his co-conspirators did. Sometimes, the amount of loss can be difficult or impossible to calculate, and occasionally, a fraud offense might not produce an actual financial loss to anyone! And too often, when the loss figure is high and enhancement have been applied, the sentence recommended by the guidelines can exceed the maximum set by Congress, sometimes approaching life in prison, even for a first-time offender. Judges who encounter these problems when using the fraud guidelines will often impose a lower sentence than what the guidelines call for and have sharp words for the guidelines. The Commission has noticed and plans to take a close look at the guidelines and rewrite them if necessary.

Solution: FAMM and others have repeatedly called on the Commission to revisit the fraud guidelines. The Commission is engaged in an ongoing review and study of the fraud guidelines.  FAMM supports the Commission’s review and provides advice and feedback when appropriate. FAMM is also part of a special task force of experts and attorneys doing an independent review of the fraud guidelines and preparing a list of suggested amendments for the Commission.