In U.S. v. Paley, No. 05-13422 (March 15, 2006), the Court reversed a sentence for a defendant convicted of money laundering, where the district court had calculated the amount of laundered funds based on the appreciated value of the company in which they were invested, not the amount of the original investment.
The Court noted that the Guidelines defined the amount at issue as the amount of "laundered funds" (not as, in the earlier Guideline language, simply the "funds"). This language referenced funds that were "actually laundered." The Court noted that allowing subsequent market changes to affect the amount at issue could result in a decrease in the amount, if the laundered funds were invested in an asset that decreased in value.
The Court rejected the government’s argument that any error was harmless, because the district court would have imposed the same sentence, even once it correctly understood the Guideline. The Court pointed out that the district court stated that Paley’s sentencing was "difficult," which suggested a different sentence was possible on remand. The Court therefore vacated the sentence and remanded for resentencing.
