'Loss' in the Air Will Not Do

'Loss' under ' 2B1.1 of the U.S. Sentencing Guidelines is a pivotal sentencing issue in many federal fraud cases. In securities fraud, if the sentencing judge finds that the victims collectively suffered losses over $2.5 million, this alone can generate a sentence of five years in prison for a client with no criminal record. Over $400 million in losses can increase a sentence by almost two decades. However, sky-high loss enhancements are increasingly scrutinized in a post-Booker world. Drawing on civil securities law, recent decisions in several circuits endorse an approach holding a defendant responsible for only the portion of victims' losses that was proximately caused by the offense. Although stratospheric sentences in cases like WorldCom and Enron may not be past history, some courts' critical analyses bode well for future sentencings.