The Tenth Circuit Court of Appeals issued its opinion in United States v. Manatau on Monday, August 1, 2011.

The Tenth Circuit vacated the district court’s sentence and remanded for further proceedings. Petitioner was in the business of stealing identities, including social security numbers, credit cards, and checks. When finally indicted by the government, the district court looked at Petitioner’s conduct regarding “convenience checks,” which allow the holder to write a check against their line of credit. Along with two of the checks, Petitioner had a statement revealing a credit limit of $30,000. Two other checks, however, did not state the limit to which they could be drawn, even though it was $10,000; Petitioner only negotiated those two for $1,800. When determining an appropriate sentence, the Guidelines suggest lengths based on actual or intended victim losses, whichever is greater. The district court agreed with the government that the intended losses should equal the amount of the credit limits, despite what was actually negotiated by Petitioner; whether or not Petitioner ever intended to reach those credit limits does not matter, and the appropriate consideration is the loss up to the credit limits that was both possible and potentially contemplated by the scheme.

The Court disagreed with the government and district court. Instead, the Court agreed with Petitioner that the appropriate inquiry requires an analysis of Petitioner’s mens rea when determining his intended loss. Such an inquiry in his case shows that he didn’t intend to reach the available credit limits on at least some of the convenience checks, because he had no knowledge regarding those credit limits. “‘Intended loss’ means a loss the defendant purposely sought to inflict. ‘Intended loss’ does not mean a loss that the defendant merely knew would result from his scheme or a loss he might have possibly and potentially contemplated.” “The available credit limits on the convenience checks in question and the defendant’s knowledge (or lack of knowledge) of them may well be relevant evidence bearing on what loss a defendant did (or didn’t) intend. But a court cannot simply calculate ‘intended loss’ by toting up credit limits without any finding that the defendant intended to inflict a loss reasonably approaching those limits.”