The Third Circuit Court of Appeals held  in United States v. Banks that the meaning of “loss” in USSG 2B1.1 is actual loss, not intended loss, and that the application notes cannot change the plain meaning of the text of the guideline. 

Defendants have long been sentenced according to the application notes--which provided that intended loss "includes intended pecuniary harm that would have been impossible or unlikely to occur (e.g., as in a government sting operation, or an insurance fraud in which the claim exceeded the insured value)."

This has huge implications for federal white collar sentencing and will better align the guidelines with our clients’ conduct.  Stay tuned to see whether other circuits follow suit, and for any revisions to the guidelines by the Sentencing Commission. 

The Guideline does not mention “actual” versus “intended” loss; that distinction appears only in the commentary. That absence alone indicates that the Guideline does not include intended loss. The government concedes that “the presumption is that a word carries its ordinary meaning (and thus may resolve its ambiguity).” We agree. The ordinary meaning of “loss” in the context of § 2B1.1 is “actual loss.”

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