In the Courts

First, the court held that the district court did not err when it used the intended loss, rather than the actual loss, in calculating Miller's sentence. Examining case law, the court explained that the district court properly applied case precedent when it calculated the loss by subtracting the value of the services to which Miller was actually entitled (ie, the value of the services he actually performed) from the amount that he billed.

Second, in a matter of first impression in the Fourth Circuit, the court held that the Guidelines permit courts to use intended loss in calculating a defendant's sentence, even if the amount exceeds the amount of loss actually possible, or likely to occur, as a result of the defendant's conduct. The court rejected the 'economic reality' approach taken by the Sixth and Tenth Circuits, and adopted the majority view because the majority approach better accords with the text of notes to U.S.S.G. ' 2F1.1, is more consistent with the principle underlying the Guidelines of matching punishment with culpability, and is consistent with the Sentencing Commission's recent amendment to the loss definition that expressly states that 'intended loss includes unlikely or impossible losses that are intended.' Thus, the Court affirmed the district court's sentence of Miller.

The Business Crimes Hotline and In the Courts were compiled by Bradley J. Bondi, Esq., an associate with Williams & Connolly LLP, Washington, DC.

United States v. Miller, No. 02-4078, 2003 WL 107766 (4th Cir. Jan. 14, 2003).

'Intended loss' under the Fraud and Deceit sentencing guideline is not limited by the amount of loss actually possible, or likely to occur, as a result of the defendant's conduct. So ruled the Fourth Circuit in United States v. Miller. In this case, Robert Miller, MD, appealed his prison sentence following his conviction for 22 counts of mail fraud in violation of 18 U.S.C. ' 1341 (West. 2000) for over-billing third-party insurers for services rendered in his medical practice. The Sentencing Guidelines used to sentence Miller direct courts to increase the offense level for defendants convicted of fraud commensurate with the amount of loss involved in the fraud. U.S.S.G. ' 2F1.1(b)(1).

On appeal, Miller challenged the district court's interpretation of 'loss' under the Sentencing Guidelines on two grounds. First, he argued that the district court erred in interpreting the term 'loss' under the Guidelines to encompass intended loss, rather than actual loss. Second, he argued that even if the district court correctly used intended loss in its calculations, the Guidelines limited intended loss to the amount of loss that was likely, or possible, and the loss calculated by the district court was not likely. The Fourth Circuit rejected both arguments.

First, the court held that the district court did not err when it used the intended loss, rather than the actual loss, in calculating Miller's sentence. Examining case law, the court explained that the district court properly applied case precedent when it calculated the loss by subtracting the value of the services to which Miller was actually entitled (ie, the value of the services he actually performed) from the amount that he billed.

Second, in a matter of first impression in the Fourth Circuit, the court held that the Guidelines permit courts to use intended loss in calculating a defendant's sentence, even if the amount exceeds the amount of loss actually possible, or likely to occur, as a result of the defendant's conduct. The court rejected the 'economic reality' approach taken by the Sixth and Tenth Circuits, and adopted the majority view because the majority approach better accords with the text of notes to U.S.S.G. ' 2F1.1, is more consistent with the principle underlying the Guidelines of matching punishment with culpability, and is consistent with the Sentencing Commission's recent amendment to the loss definition that expressly states that 'intended loss includes unlikely or impossible losses that are intended.' Thus, the Court affirmed the district court's sentence of Miller.

The Business Crimes Hotline and In the Courts were compiled by Bradley J. Bondi, Esq., an associate with Williams & Connolly LLP, Washington, DC.