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On November 1, 2015, several important amendments to the U.S. Sentencing Guidelines became effective.  The amendments include changes to the guidelines governing fraud and economic crime that will have a significant impact on the prosecution of individuals for a wide range of conduct.  This article summarizes several of the amendments that could have a significant impact on sentencing and settlement negotiations in Foreign Corrupt Practices Act (“FCPA”) cases.


On April 9, 2015, the U.S. Sentencing Commission voted to recommend changes to its sentencing guidelines in fraud and antitrust cases.  The Commission announced that the proposed changes were designed “to address longstanding concerns that the guidelines do not appropriately account for harm to victims, individual culpability, and the offender’s intent.”  Because Congress did not act within the required six months, the amendments went into effect on November 1 and have been incorporated into a revised Sentencing Guidelines Manual.

Loss Tables Adjusted for Inflation

One change that will have a direct and quantifiable impact on sentencing in white collar cases involves adjustments to the loss tables used under the guidelines to account for financial loss.  The Commission has amended the monetary loss tables to adjust for inflation.  By increasing the loss thresholds that correspond to higher offense levels, the adjustments could have the impact in many cases of reducing the guidelines-recommended sentence, especially in cases involving large dollar losses. Among the monetary tables that have been adjusted are those in §2B1.1 (Theft and Fraud), §2R1.1 (Antitrust), and § 5E1.2 (Fines for Individual Defendants.  For §2B1.1, which covers sentencing of some of the most common white collar crimes—mail fraud, wire fraud, and securities fraud—the inflation adjustment means that the lowest offense level increase begins at a loss of $6,500 (versus $5,000 today), and the maximum offense level increase would not be triggered until a loss of $550 million (versus $400 million today). A brief example illustrates the significant potential consequence of the loss value adjustments for a hypothetical large company charged with violating the FCPA’s Anti-Bribery Provisions.  Criminal fine calculations begin with a determination of total loss, which in the FCPA context can be defined in several ways, including as the pecuniary harm caused by the offense, the defendant’s gain, or the quantum of corrupt payments. [1]  Next, §2B1.1(b)(1) sets out the loss ranges and corresponding offense level increases applicable in FCPA cases.  Under last year’s guidelines, a 1,000-employee company charged with earning $1.4 million in profit through multiple corrupt payments to a low-level government official could face a guidelines-based fine range of as much as $8-16 million—even after self-reporting and cooperating with a government investigation.  Under the revised guidelines, a loss value of $1.4 million corresponds to a 14-point offense level increase—versus a 16-point increase under the previous tables.  All other factors remaining equal, the company in this example could see a reduction in its fine range of $3 million to $6 million under the adjusted loss tables in §2B1.1. The U.S. Department of Justice (“DOJ”) had opposed adjusting victim loss values for inflation on the ground that any resulting decrease in the sentence imposed would be contrary to strong public interests in strict sentencing of fraud and economic crimes.  As the Commission noted in its press release on April 9, 2015, however, many of the monetary values in the guidelines have never been specifically adjusted for inflation since the guidelines were established in 1987.  As the Commission stated in its commentary to the amendment, “[d]ue to inflationary changes, there has been a gradual decrease in the value of the dollar over time.  As a result, monetary loses in current offenses reflect, to some degree, a lower degree of harm and culpability than did equivalent amounts when the monetary tables were established or last substantively amended.”

Guidance Provided on Mitigating Role Adjustment

A second group of amendments provide guidance on when a defendant is eligible for a reduced sentence because he or she played a minor role in an offense relative to the “average participant.” In particular, the Commission has adopted an approach taken by the Seventh and Ninth Circuit Courts of Appeals to determining the “average participant” benchmark.  Under that approach, a defendant’s relative culpability is generally determined with reference to the defendant’s co-participants, and not to typical offenders who commit similar crimes.  The amendments also provide a “non-exhaustive list of factors for the court to consider in determining whether to apply a mitigating role adjustment,” and provide that a defendant’s “indispensable” role in criminal activity should not preclude a mitigating role adjustment if the defendant is indeed less culpable than the average participant. According to the official press release, the Commission adopted these changes to “encourage courts to ensure that the least culpable offenders, such as those who have no proprietary interest in a fraud, receive a sentence commensurate with their own culpability without reducing sentences for leaders and organizers.”

Intended Loss Definition Revised

Another amendment to §2B1.1 revises the definition of “intended loss” under Application Note 3(A)(ii). Noting disagreement among the federal courts of appeals, the Commission proposed changing the definition to provide that intended loss means “the pecuniary harm that the defendant purposely sought to inflict.”  With this change, the Commission signals its approval for the subjective test used in United States v. Manatau,[2] in which the Tenth Circuit held that the appropriate standard for determining intended loss was not objective foreseeability but “subjective intent to cause the loss.”[3]  The DOJ had opposed this amendment and advocated an objective standard for evaluating intended loss.  The Commission indicated in its commentary to the amendment that it “reflects the Commission’s continued belief that intended loss is an important factor … but also recognizes that sentencing enhancements predicated on intended loss, [rather than actual loss] should focus more specifically on the defendant’s culpability.”  Although the DOJ has prosecuted virtually no FCPA cases in the absence of actual improper gains attributable to corrupt payments, this amendment to the definition of intended loss could theoretically be relevant if an individual FCPA defendant could somehow prove an absence of subjective intent to cause the “harm” attributable to an Anti-Bribery violation.


Taken together, the amendments discussed above reflect an attempt to better account for financial harm to victims, individual culpability, and a defendant’s intent in sentencing.  Changes to the definition of intended loss give greater weight to an individual defendant’s subjective intention, and judges—and prosecutors—will now need to consider whether a defendant “purposely sought to inflict” some harm when committing the crime.  Changes to the mitigating role adjustment mean that sentences for defendants with minor roles in a fraud should be more commensurate with their relatively lower culpability.  And the inflation adjustments to the monetary loss tables means that many defendants, especially in cases involving large dollar losses—or significant ill-gotten profits—could soon see significantly reduced criminal fines. These amendments take effect at a notable time for FCPA enforcement, as DOJ policy has now signaled a heightened focus on prosecuting individuals involved in corporate wrongdoing.  On September 9, 2015, Deputy U.S. Attorney General Sally Yates issued a memorandum on the importance of seeking individual accountability in prosecutions of corporate fraud.[4]  The memorandum states that “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing,” and calls on DOJ attorneys to “fully leverage [the DOJ’s] resources to identify culpable individuals at all levels in corporate cases.”  One specific measure recommended in the memorandum would require that “in order to qualify for any cooperation credit, corporations must provide to the [DOJ] all facts relating to the individuals responsible for the misconduct.”  The Deputy Attorney General’s call for a greater focus on individual accountability, including as a precondition for cooperation credit, has been echoed by other DOJ officials. At a time when the DOJ is poised to increase individual prosecutions for corporate misconduct, including violations of the FCPA, the amendments to the mitigating role adjustment in §3B1.2 serve as an instructive measure of how prosecutors will weigh individual culpability.  In particular, the amendments clarify that individual culpability will be assessed relative to co-participants, and also in light of certain specific factors, like “the degree to which the defendant understood the scope and structure of the criminal activity” and “the degree to which the defendant participated in planning or organizing the criminal activity.”[5]  These factors are designed to ensure that less culpable offenders are considered for a downward adjustment to their offense level, and should be especially helpful to defendants who can demonstrate that their role in an offense was minor or minimal.

[1] According to the commentary to §2B1.1, loss is normally the “foreseeable pecuniary harm that resulted from the offense” (or that “the defendant purposely sought to inflict”).  Where “there is a loss but it reasonably cannot be determined”—as is often the case when a corporation has profited through bribery—a defendant’s monetary gain can be used as an alternative measure of loss.  United States Sentencing Commission, Guidelines Manual, §2B1.1 (Nov. 2015).  And in its landmark settlement with Siemens, the DOJ chose a third measure of loss was used in computing the loss figure, namely, “the amount of money directly involved in the corrupt payments.  See Department’s Sentencing Mem., U.S. v.  Siemens Aktiengesellschaft et al., Docket No. 08-CR-367-RJL (D.D.C 2008).
[2] 647 F.3d 1048 (10th Cir. 2011).
[3] Id. at 1055.
[4] Deputy Attorney General Sally Quillian Yates’s Memorandum on Individual Accountability for Corporate Wrongdoing, September 9, 2015, available at:
[5] United States Sentencing Commission, Guidelines Manual, §3B1.2 (Nov. 2015).

Brian Whisler is a member of Baker McKenzie’s Compliance and Investigations, Dispute Resolution and Global Pharmaceuticals Practice Groups. Prior to joining the Firm, Mr. Whisler served as the criminal chief assistant United States attorney in the Eastern District of Virginia, where he managed the criminal trial practice of the Richmond office which handled cases ranging from white collar crime, violent crime, public corruption and terrorism. Mr. Whisler focused his own trial practice on white collar prosecutions including health care fraud, securities fraud, money laundering, and tax fraud. He also served as an assistant United States attorney for the Western District of North Carolina where he focused on white collar prosecutions and served as chief of appeals and health care fraud coordinator.


Jean-Paul Theroux is an associate in Baker & McKenzie´s Compliance & Investigations Practice Group in Washington, DC. Before joining Baker & McKenzie, he was a legal intern in the US Attorney’s Office for the Eastern District of Virginia, Richmond Division, where he supported attorneys prosecuting white collar fraud and violent crime. During law school, Mr. Theroux was an intern for Judge Mark S. Davis of the US District Court for the Eastern District of Virginia in Norfolk, as well as a lead editor of the William & Mary Law Review. Mr. Theroux was a Baker & McKenzie summer associate in 2012 and has extensive international legal experience, having previously lived and worked with leading law firms in India, Central America and Turkey.

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