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How Do the Federal Sentencing Guidelines Work in Fraud Cases?

October 11, 2021

The federal sentencing guidelines for fraud provide for serious penalties, including potential prison time. If you are facing any type of federal fraud charges, you should consult with an experienced criminal defense lawyer who practices in both state and federal court. This can help you determine what you might be facing and the most appropriate defense strategy to take. You need to understand how federal sentencing in fraud cases works.

What is federal fraud?

Federal fraud includes many different types of white collar crimes, including the following:

  • Mail fraud
  • Internet fraud
  • Government procurement fraud
  • Health care fraud
  • Tax fraud
  • Insurance fraud
  • Securities fraud
  • Embezzlement
  • Credit card fraud
  • Mortgage fraud
  • Wire fraud

While each of these offenses has unique elements, all types of fraud cases have similarities. Essentially, federal fraud cases include allegations that a defendant participated in a fraudulent scheme or made misrepresentations to secure something of value through deceit. Regardless of which type of federal fraud charge you are facing, the prosecutor must meet the burden of proof to prove your guilt beyond a reasonable doubt before you can be convicted. You might be able to successfully defend against fraud allegations and the significant penalties you might otherwise face.

Federal fraud sentencing guidelines

Since most financial crimes are similar to each other, most fall under the United States Sentencing Guidelines §2B1.1. These sentencing guidelines are fairly complex, and certain offenses might also have other, specific guidelines that apply, including forgery, counterfeit instruments, stolen property, embezzlement, and other types of theft.

Courts use a points system to determine the penalty range for crimes covered by §2b1.1. The points system includes several factors that are used to calculate points.

All federal crimes are assessed base points. For fraud, around six or seven points will be counted as the base points. Seven base points are assessed for crimes referenced in the guideline that carry a statutory maximum prison sentence of 20 years, and six points are assessed otherwise. Next, the court calculates the loss. The loss calculation includes the intended or actual loss, whichever is greater. Points are higher for greater losses. A loss table is included in §2b1.1(B) with increases in levels for loss amounts above $6,500 as follows:

  • Loss of $6,501 to $15,000 – Two levels added
  • Loss of $15,001 to $40,000 – Four levels added
  • Loss of $40,001 to $95,000 – Six levels added
  • Loss of $95,001 to $150,000 – Eight levels added
  • Loss of $150,001 to $250,000 – 10 levels added
  • Loss of $250,001 to $550,000 – 12 levels added
  • Loss of $550,001 to $1,500,000 – 14 levels added
  • Loss of $1,500,001 to $3,500,000 – 16 levels added
  • Loss of $3,500,001 to $9,500,000 – 18 levels added
  • Loss of $9,500,001 to $25,000,000 – 20 levels added
  • Loss of $25,000,001 to $65,000,000 – 22 levels added
  • Loss of $65,000,0001 to $150,000,000 – 24 levels added
  • Loss of $150,000,001 to $250,000,000 – 28 levels added
  • Loss of more than $550,000,000 – 30 levels added

For example, a case with losses assessed at an increase of eight levels could result in an increased range from 15 to 20 months.

The sentencing court will then consider any aggravating or mitigating factors to determine whether to enhance the sentence or lower it. Some aggravating factors include such things as abuse of a position of trust, using mass marketing schemes, having multiple victims or vulnerable victims, using minors to commit the offense, and being the leader of a fraud scheme. These types of aggravating factors can result in a longer sentence when they are present.

Mitigating factors can help to bring a potentially long sentence to something more reasonable. For example, people who only played minor roles and have accepted responsibility might receive mitigated penalties.

Once these steps have been completed, the court will add up all of the points to determine the offense level. The court will then consider the defendant’s criminal record to determine the appropriate range under the federal sentencing guidelines. Courts can depart from a guideline range, but a federal fraud conviction can still carry a long prison sentence.

Consult with an experienced federal crimes attorney

If you have been indicted for a federal fraud crime, you need to understand the importance of getting help from an experienced criminal defense attorney who practices in federal court. The federal court system has significant differences from state criminal court. If you are convicted of a federal fraud crime, you could face a much longer sentence than you might for the same offense under state law.

It is likewise important to retain an experienced federal criminal defense lawyer if you have learned that you are being investigated for a federal fraud crime but have not yet been charged. In some cases, a good defense lawyer might be able to negotiate with the federal prosecutor to secure an agreement not to pursue an indictment. Your defense attorney can help to identify potential issues in the government’s case against you and work to build the strongest possible defense strategy. Contact us today to schedule a confidential consultation.

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