4th Circuit clarifies meaning of ‘loss’ in sentencing guidelines

Where the District Court determined that “loss,” for purposes of calculating the sentence of a woman convicted of presenting false tax returns to the Internal Revenue Service, encompasses both the actual harm and the harm that was the object of the scheme, it did not err. Guidelines sections 1B1.3 and 2B1.1 support the understanding that “loss” must encompass both the actual harm and the harm that was the object of appellant’s scheme.

Background

Maggie Boler was convicted of six counts of presenting false claims against the United States by submitting false tax returns to the Internal Revenue Service, or IRS, and one count of making a false statement on her fraudulent Paycheck Protection Program loan application. Appellant submitted six tax returns to the IRS but only received refunds on four of those returns. Boler argued that the loss calculation, for purposes of sentencing, should not include the two tax returns rejected by the IRS. The District Court disagreed.

Analysis

The relevant conduct Guideline directs courts as to how to consider “harm” in the context of specific offense characteristics “[u]nless otherwise specified.” In this instance, section 2B1.1 does not explicitly limit “loss” to actual or intended loss. Therefore, the language of section 1B1.3 provides a starting point for interpreting the section 2B1.1 enhancements. When read together, Guidelines sections 1B1.3 and 2B1.1 support the understanding that “loss” must encompass both the actual harm and the harm that was the object of appellant’s scheme.

Appellant argues that “loss” should be limited to “actual loss” where the Commission omitted any reference to intended harm. In appellant’s view, the decision to omit explicit language including “intended loss” from section 2B1.1 was intentional where similar language is present in other sections of the Guidelines.

But section 2B1.1 does not define “loss” and does not suggest that intended loss should be excluded from its definition. And, as previously discussed, the relevant conduct that Guideline § 1B1.3 directs the sentencing court to consider is more than just the tangible harm — it includes unrealized but intended loss. Further, the court’s reading of section 2T1.1(c)(1) in comparison to section 1B1.3(a) does not render the language of other Guidelines sections “superfluous.” Reference to Guidelines § 2T1.1(c)(1) is not a useful comparator. It simply does not apply here.

In promulgating the Guidelines, the Commission set out to “establish sentencing policies and practices for the Federal criminal justice system that . . . avoid[] unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar criminal conduct.” Appellant’s limited reading of “loss” could result in sentencing disparities for defendants with similar culpability. For instance, if sentencing courts only considered “actual loss” when deciding the specific offense characteristics, defendants with equal culpability for the same criminal acts would receive longer sentences merely because, for one reason or another, one succeeded in carrying out their fraudulent scheme while the other did not.

Given that ambiguity exists as to the Guidelines’ definition of “loss,” the court next considers whether the commentary’s definition of “loss” falls within the “zone of ambiguity” such that it should be given deference. The court holds that the character and context of the commentary entitle it to controlling weight.

In sum, because the commentary defines loss within the “zone of ambiguity” created by Guidelines § 2B1.1 and because the “character and context” of the commentary support that it is deserving of “controlling weight,” the District Court properly deferred to the commentary to determine the appropriate loss amount in appellant’s case.

Affirmed.

Dissenting opinion

Quattlebaum, J., dissenting:

“Loss” is not ambiguous. “Loss” means actual loss, not intended loss. Because the Guideline commentary’s interpretation of “loss” in § 2B1.1(b)(1) to include intended loss is both inconsistent with and a plainly erroneous reading of the Guideline, no deference to the commentary is warranted.

And because the District Court applied a § 2B1.1(b)(1) enhancement based on intended loss instead of actual loss, I would vacate the sentence and remand for resentencing with instructions to the District Court to calculate Boler’s Guidelines range without considering intended loss for purposes of a § 2B1.1(b)(1) enhancement.

United States v. Boler, Case No. 23-4352, Oct. 8, 2024. 4th Cir. (Thacker), from DSC at Columbia (Wooten). Jeremy A. Thompson for Appellant. Tommie DeWayne Pearson for Appellee. 51 pp.