The United States federal government has a very complex set of guidelines for sentencing individuals who are convicted of federal crimes. Federal white-collar or fraud crimes have a specific set of guidelines that deal specifically with these types of crimes.  

Federal crimes typically incur stiffer penalties that can include fines and prison time in comparison to similar cases prosecuted in state courts. This is because federal penalties are determined by the U.S. Sentencing Commission Voluntary Sentencing Guidelines. These guidelines usually carry severe penalties.

While federal judges are not bound by the sentencing guidelines, they still very often will sentence defendants in accordance with the guidelines.

If you have committed fraud or have been charged with fraud on a federal or state level, you need a good criminal defense lawyer. A fraud conviction could mean that you face very serious penalties, such as long prison time and high fines.

A criminal defense attorney will review your case and determine the best course of action for your case. Call The Litvak Law Firm today to get your free consultation and discuss the next steps to protecting your rights.

The Federal Definition of Fraud

Under federal law, fraud is defined as any misrepresentation or deception that is intentional and is used to benefit the defendant or another person.

Types of fraud as listed under federal law and the US Sentencing Guidelines include:

  • Wire fraud
  • Mail fraud
  • Insurance fraud
  • Credit card fraud
  • Computer fraud
  • Embezzlement
  • Tax fraud
  • Bank fraud
  • Health care fraud
  • Medicaid fraud
  • Medicare fraud
  • Securities fraud
  • Identity theft
  • Mortgage fraud
  • Government procurement

Each of these crimes carries a harsh penalty, but when they are combined, the sentencing can be devastating. It could mean that you spend the rest of your life or most of your life behind bars.

The United States Sentencing Commission (USSC)

The U.S. Sentencing Commission (USSC) is an independent, bipartisan agency that is part of the judicial branch of government. It was established in November 1991 by Congress under the Sentencing Reform Act and is comprised of seven voting members.

The seven voting members of the Commission are presidential appointees who are recommended by the Judicial Conference and the members are then confirmed by the Senate. Each member has a six-year term.

There are several requirements for the Commission:

  • 3 of the members must be federal judges
  • No more than 4 members can belong to the same political party
  • The Chair of the U.S. Parole Commission and the Attorney General sit as non-voting, ex officio members
  • There must be a quorum of 4 or more members voting to approve any amendments to the Sentencing Guidelines

The Commission is an information resource for the courts, Congress, the public, and the executive branch of the U.S. government on issues that relate to federal crime and sentencing. It also develops policies for sentencing for the federal court system.

The USSC Guidelines Manual

The Federal sentencing guidelines, or USSC Guidelines, are a set of rules or guidelines that are non-binding and are intended to provide a uniform sentencing policy for federal defendants who are convicted in federal court in the United States.

The guidelines use many factors to determine a recommended guideline sentence. However, the Guidelines have been called into question regarding their constitutionality because they can potentially result in a sentence that is based on facts that were not proven to a jury beyond a reasonable doubt. This violates the Sixth Amendment.

While federal judges can sentence defendants outside of the guidelines recommended range, they are required to consider them during the determination of a defendant’s sentence. If the judge chooses to enact sentencing that is beyond the scope of the Guidelines, he or she must explain the factors that influenced their decision to decrease or increase the sentence.

How the Guidelines Work for Fraud Offenses

§2B1.1 – LARCENY, EMBEZZLEMENT, AND OTHER FORMS OF THEFT; OFFENSES INVOLVING STOLEN PROPERTY; PROPERTY DAMAGE OR DESTRUCTION; FRAUD AND DECEIT; FORGERY; OFFENSES INVOLVING ALTERED OR COUNTERFEIT INSTRUMENTS OTHER THAN COUNTERFEIT BEARER OBLIGATION OF THE UNITED STATES

(a) Base Offense Level:

(1) 7, if (A) the defendant was convicted of an offense referenced to this guideline; and (B) that offense of conviction has a statutory maximum term of imprisonment of 20 years or more; or

(2) 6, otherwise.

(b) Specific Offense Characteristics

(1) If the loss exceeded $6,500, increase the offense level as follows:

Loss (apply the greatest) Increase in Level
(A) $6,500 or less no increase
(B) More than $6,500 add 2
(C) More than $15,000 add 4
(D) More than $40,000 add 6
(E) More than $95,000 add 8
(F) More than $150,000 add 10
(G) More than $250,000 add 12
(H) More than $550,000 add 14
(I) More than $1,500,000 add 16
(J) More than $3,500,000 add 18
(K) More than $9,500,000 add 20
(L) More than $25,000,000 add 22
(M) More than $65,000,000 add 24
(N) More than $150,000,000 add 26
(O) More than $250,000,000 add 28
(P) More than $550,000,000 add 30.

(2) (Apply the greatest) If the offense—

(A) (i) involved 10 or more victims; (ii) was committed through mass-marketing; or (iii) resulted in substantial financial hardship to one or more victims, increase by 2 levels;

(B) resulted in substantial financial hardship to five or more victims, increase by 4 levels; or

(C) resulted in substantial financial hardship to 25 or more victims, increase by 6 levels.

(3) If the offense involved a theft from the person of another, increase by 2 levels.

(4) If the offense involved receiving stolen property, and the defendant was a person in the business of receiving and selling stolen property, increase by 2 levels.

(5) If the offense involved theft of, damage to, destruction of, or trafficking in, property from a national cemetery or veterans’ memorial, increase by 2 levels.

(6) If (A) the defendant was convicted of an offense under 18 U.S.C. § 1037; and (B) the offense involved obtaining electronic mail addresses through improper means, increase by 2 levels.

(7) If (A) the defendant was convicted of a federal health care offense involving a Government health care program; and (B) the loss under subsection (b)(1) to the Government health care program was (i) more than $1,000,000, increase by 2 levels; (ii) more than $7,000,000, increase by 3 levels; or (iii) more than $20,000,000, increase by 4 levels.

(8) (Apply the greater) If—

(A) the offense involved conduct described in 18 U.S.C. § 670, increase by 2 levels; or

(B) the offense involved conduct described in 18 U.S.C. § 670, and the defendant was employed by, or was an agent of, an organization in the supply chain for the pre-retail medical product, increase by 4 levels.

(9) If the offense involved (A) a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious, or political organization, or a government agency; (B) a misrepresentation or other fraudulent action during the course of a bankruptcy proceeding; (C) a violation of any prior, specific judicial or administrative order, injunction, decree, or process not addressed elsewhere in the guidelines; or (D) a misrepresentation to a consumer in connection with obtaining, providing, or furnishing financial assistance for an institution of higher education, increase by 2 levels. If the resulting offense level is less than level 10, increase to level 10.

(10) If (A) the defendant relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials; (B) a substantial part of a fraudulent scheme was committed from outside the United States; or (C) the offense otherwise involved sophisticated means and the defendant intentionally engaged in or caused the conduct constituting sophisticated means, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(11) If the offense involved (A) the possession or use of any (i) device-making equipment, or (ii) authentication feature; (B) the production or trafficking of any (i) unauthorized access device or counterfeit access device, or (ii) authentication feature; or (C)(i) the unauthorized transfer or use of any means of identification unlawfully to produce or obtain any other means of identification, or (ii) the possession of 5 or more means of identification that unlawfully were produced from, or obtained by the use of, another means of identification, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(12) If the offense involved conduct described in 18 U.S.C. § 1040, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(13) If the defendant was convicted under 42 U.S.C. § 408(a), § 1011(a), or § 1383a(a) and the statutory maximum term of ten years’ imprisonment applies, increase by 4 levels. If the resulting offense level is less than level 12, increase to level 12.

(14) (Apply the greater) If the offense involved misappropriation of a trade secret and the defendant knew or intended—

(A) that the trade secret would be transported or transmitted out of the United States, increase by 2 levels; or

(B) that the offense would benefit a foreign government, foreign instrumentality, or foreign agent, increase by 4 levels.

If subparagraph (B) applies and the resulting offense level is less than level 14, increase to level 14.

(15) If the offense involved an organized scheme to steal or to receive stolen (A) vehicles or vehicle parts; or (B) goods or chattels that are part of a cargo shipment, increase by 2 levels. If the resulting offense level is less than level 14, increase to level 14.

(16) If the offense involved (A) the conscious or reckless risk of death or serious bodily injury; or (B) possession of a dangerous weapon (including a firearm) in connection with the offense, increase by 2 levels. If the resulting offense level is less than level 14, increase to level 14.

(17) (Apply the greater) If—

(A) the defendant derived more than $1,000,000 in gross receipts from one or more financial institutions as a result of the offense, increase by 2 levels; or

(B) the offense (i) substantially jeopardized the safety and soundness of a financial institution; or (ii) substantially endangered the solvency or financial security of an organization that, at any time during the offense, (I) was a publicly traded company; or (II) had 1,000 or more employees, increase by 4 levels.

(C) The cumulative adjustments from application of both subsections (b)(2) and (b)(17)(B) shall not exceed 8 levels, except as provided in subdivision (D).

(D) If the resulting offense level determined under subdivision (A) or (B) is less than level 24, increase to level 24.

(18) If (A) the defendant was convicted of an offense under 18 U.S.C. § 1030, and the offense involved an intent to obtain personal information, or (B) the offense involved the unauthorized public dissemination of personal information, increase by 2 levels.

(19) (A) (Apply the greatest) If the defendant was convicted of an offense under:

(i) 18 U.S.C. § 1030, and the offense involved a computer system used to maintain or operate a critical infrastructure, or used by or for a government entity in furtherance of the administration of justice, national defense, or national security, increase by 2 levels.

(ii) 18 U.S.C. § 1030(a)(5)(A), increase by 4 levels.

(iii) 18 U.S.C. § 1030, and the offense caused a substantial disruption of a critical infrastructure, increase by 6 levels.

(B) If subdivision (A)(iii) applies, and the offense level is less than level 24, increase to level 24.

(20) If the offense involved—

(A) a violation of securities law and, at the time of the offense, the defendant was (i) an officer or a director of a publicly traded company; (ii) a registered broker or dealer, or a person associated with a broker or dealer; or (iii) an investment adviser, or a person associated with an investment adviser; or

(B) a violation of commodities law and, at the time of the offense, the defendant was (i) an officer or a director of a futures commission merchant or an introducing broker; (ii) a commodities trading advisor; or (iii) a commodity pool operator, increase by 4 levels.

(c) Cross References

(1) If (A) a firearm, destructive device, explosive material, or controlled substance was taken, or the taking of any such item was an object of the offense; or (B) the stolen property received, transported, transferred, transmitted, or possessed was a firearm, destructive device, explosive material, or controlled substance, apply §2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses); Attempt or Conspiracy), §2D2.1 (Unlawful Possession; Attempt or Conspiracy), §2K1.3 (Unlawful Receipt, Possession, or Transportation of Explosive Materials; Prohibited Transactions Involving Explosive Materials), or §2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition), as appropriate.

(2) If the offense involved arson, or property damage by use of explosives, apply §2K1.4 (Arson; Property Damage by Use of Explosives), if the resulting offense level is greater than that determined above.

(3) If (A) neither subdivision (1) nor (2) of this subsection applies; (B) the defendant was convicted under a statute proscribing false, fictitious, or fraudulent statements or representations generally (e.g., 18 U.S.C. § 1001, § 1341, § 1342, or § 1343); and (C) the conduct set forth in the count of conviction establishes an offense specifically covered by another guideline in Chapter Two (Offense Conduct), apply that other guideline.

(4) If the offense involved a cultural heritage resource or a paleontological resource, apply §2B1.5 (Theft of, Damage to, or Destruction of, Cultural Heritage Resources or Paleontological Resources; Unlawful Sale, Purchase, Exchange, Transportation, or Receipt of Cultural Heritage Resources or Paleontological Resources), if the resulting offense level is greater than that determined above.

If you are facing federal fraud charges, you need someone who will fight to protect your rights. Call The Litvak Law firm today at (718) 989-2908 and get results.