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The Tenth Circuit on Credit Cards, Loss, and the Sentencing Guidelines

Sometimes it’s hard to know what’s been stolen, even after it’s gone.

Suppose I go swimming with David Lat. While we’re in the pool, Tom steals our wallets. If Lat and I both have $10 in our wallet, we know what Tom took – he took $20.

What if Lat and I both have credit cards? Suppose Lat has an Amex Black card with a $100,000 limit and I’ve got a Capitol One card with a $1500 limit. Tom charges a $40 annual subscription to the Green Bag to each card (one for him and one for his mom – and worth every penny, by the way). What is the value of what Tom has tolen?

Perhaps he’s stolen $80, the value of the things he charged on the credit cards?

Perhaps he’s stolen $101,500, the credit limit of the two credit cards?

Perhaps he’s stolen something in between – the foreseeable amount that he’d be able to charge on each card, maybe capped by the actual amount on the cards? So, if on assumes that the average credit limit is $10,000, he stole $10,000 from Lat and $1,500 from me.

Under the federal sentencing guidelines, much of a person’s sentence is riding on how you calculate the loss from an economic crime.

It was just this question that the Tenth Circuit answered this week in United States v. Manatau.

There, the court of appeals held that the guidelines are clear – loss means intended loss. It has to be the amount that the person intended to take, not the amount that the person could have taken, or the amount that a person in general would think that he would have been able to take.

The government argued that the loss amount should be the full amount that the person could have taken – to use my example, the loss would have been $101,500. The court found no support for this view, noting that the guidelines incorporate a mens rea requirement – that is, the guidelines only punish a person for what he, himself, thought he was taking.

Should a person who steals a credit card be punished more severely for stealing in Georgetown than in Columbia Heights?

Maybe. What this opinion makes clear, I think, is that if a thief is in Georgetown to steal a credit card thinking it will let him charge, for example, a Chanel sequined tweed coat for $9,010, then the loss amount would be higher than that of a thief looking to charge a pair of Keens at REI.

So the thief gets a more stringent punishment only if he’s planning on using the higher credit limit to get access to fancier stuff.

And, as Professor Berman has already pointed out, this opinion is going to have meaningful and interesting implications in many other cases involving economic crimes.

And, as Scott Greenfield has noted, the person charged with the crime is likely to get hosed anyway.

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If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.