Thursday, December 03, 2015

Loss calculation leads to remand

US v. Qazah:  Kamal Qazah and his uncle, Nasser Alquza, received charges for conspiracy to receive and transport stolen cigarettes, conspiracy to commit money laundering, and money laundering.  Qazah received an additional charge for receiving cigarettes purportedly stolen in interstate commerce.  After a jury convicted Qazah and Alquza of these charges, Alquza appealed the district court’s denial of his pre-trial motion to suppress evidence recovered during a search of his home; Qazah appealed the denial of his pre-trial motion to sever.  Both defendants appealed their sentences, specifically the district court’s calculation of the loss amount for which they were held responsible, by relying upon the retail as opposed to wholesale value of the purportedly stolen cigarettes.   The Fourth Circuit upheld the convictions, but vacated the defendants’ sentences for further evidence gathering on the loss calculation.

In its calculation of loss analysis, the Fourth Circuit examined the district court’s basis for its use of the retail value of the stolen cigarettes in determining the defendants’ sentences.  The district court believed that it was obliged to apply the “greatest intended loss” as between the wholesale and retail value of the cigarettes, regardless of whether the value in fact represented a loss.  The retail value of the cigarettes here was $3k per case, and the wholesale value was $2,126 per case.

The parties agreed, as did the district court, that the “intended loss” rather than “actual loss” is the relevant measure under the guidelines.  The general rule that guides the Fourth Circuit is that loss is determined by measuring the harm to the victim, one of whom was Phillip Morris.  The cigarette company’s loss would have been the amount it would have otherwise received for selling the cigarettes, which the record indicated was $2,126 per case (8,000 cases were involved).  The Fourth Circuit noted, however, that there may have been other victims here, e.g. the states that did not make money on the taxes on cigarettes lawfully sold, and sales that legitimate retailers may have made.  The identities, then, of the intended victims and their losses are questions of fact for the district court to resolve, so the Fourth Circuit vacated and remanded.

No comments: