If given the opportunity, how many years would you sentence Sam Bankman-Fried to prison? The Presentence Report (PSR) recommended that the judge impose a sentence of one hundred years. Describing the recommendation as “grotesque” and “barbaric,” attorneys for Bankman-Fried argued that five to six years would be a more “just sentence.” Despite the large discrepancy between the two, both the PSR and Bankman-Fried’s attorneys arrived at these recommendations after applying Section 2B1.1 of the United States Sentencing Guidelines (“Sentencing Guidelines” or “Guidelines”).
Loss is the single most important factor in the sentencing of criminal fraud defendants. The basic rationale for its central role is as follows: because the object of the fraud is the victim’s money or property, the defendant’s punishment should be proportional to the economic harm caused by the offense. Framed this way, loss as a measure of the seriousness of the defendant’s conduct is much like the use of weight in sentencing drug trafficking offenses: the greater the amount, the more serious the offense, the longer the sentence. And just as weight is criticized as “a poor proxy for culpability” in drug trafficking offenses, so too is loss. This critique has plagued Section 2B1.1 since the Guidelines were first adopted and it continues to fuel disagreement among federal courts as to the appropriate role of loss. This Comment discusses the latest iteration of this debate, which challenges the degree of deference sentencing courts should give to the Guidelines’ commentary on loss calculations.
The instruction in Section 2B1.1 seems straightforward on its face: the sentencing court should increase the defendant’s sentence based on the amount of loss attributable to his fraud scheme. But because Section 2B1.1 governs a wide array of fraud offenses, the method used to calculate loss varies from one fraud scheme to another. Moreover, the Sentencing Guidelines contemplate two separate and distinct concepts of loss actual loss and intended loss and require that the loss enhancement be based on the greater figure. The definitions of actual and intended loss, along with the special rules for calculating loss, appear in the roughly five pages of commentary that follow Section 2B1.1 rather than in the guideline provision itself. Ultimately, these detailed instructions aim to help sentencing judges avoid unwarranted sentencing disparities by attempting to standardize, to the extent possible, loss as a measure of culpability across hundreds of fraud offenses.
Even with these detailed instructions, some judges have observed that loss calculations under Section 2B1.1 amount to “nebulous eyeballing” and resemble “more an art than a science.” Judge Crowell goes further, commenting that the “specific guidance in [Section 2B1.1] . . . can sometimes bind sentencing judges into unreasonable and illogical outcomes.” To be sure, the Sentencing Guidelines are, in fact, not binding on sentencing judges and have not been since the Supreme Court’s 2005 decision in United States v. Booker. What Judge Crowell is highlighting, however, is that in spite of the Guidelines’ advisory status, sentencing data suggests that the Guidelines remain highly influential on the sentence ultimately imposed. In other words, the Guidelines, though advisory, continue to limit judicial discretion in sentencing.
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