Eleventh Circuit Court of Appeals - Published Opinions

Monday, December 11, 2006

Cedeno: "loss" amount does not include both repair and fair market value

In U.S. v. Cedeno, No. 05-16616 (Dec. 6, 2006) (Black, Carnes, Barkett), the Court held that the sentencing court erred in its "loss" calculation, and reversed the sentence.
The defendants made off with $1,485,000 worth of watches. The store got the watches back after the police recovered them. The store spent $13,939 repairing the damage some of the watches suffered during the smash-and-grab job. The issue was whether, to calculate the "loss" amount, the cost of the repair should have been added to the value of the watches before any damage. The district did add these two, resulting in a loss amount in excess of $1.5 million, that is, in excess of the original fair value of the watches.
The Court noted that the district court used the wrong guideline in calculating the loss. Further, the correct guideline capped the "loss" amount at fair market value, which, by definition, could not exceed the value of the watches before the smash-and-grab. The Court rejected the district court’s attempt to explain its calculation as being based on "the perspective of the victim." Here, the jewelry store recovered the watches, so the $1.5 million "loss" amount far exceeded its actual loss. The Court also noted that allowing a sentencing court to disregard the recovery of stolen goods would create a "backwards incentive." In any event, this approach made no sense, as it effectively doubled the value of the goods, once for being stolen, and again for being damages or destroyed.