Clarifying Loss Calculation and “At the Crux” in Aggravated Identity Theft: United States v. White

Introduction

United States v. White, decided April 11, 2025 by the Second Circuit (24-66), involves a contractor’s fraudulent scheme to obtain a munitions training facility contract from the District of Columbia Army National Guard (DCARNG). Raymond White pleaded guilty to six federal offenses, including major fraud (18 U.S.C. § 1031), wire fraud (18 U.S.C. § 1343), aggravated identity theft (18 U.S.C. § 1028A), false statements (18 U.S.C. § 1001(a)(2)), and preparing false documents (18 U.S.C. § 1001(a)(3)). On appeal, White challenged: (1) the district court’s loss calculation under the Sentencing Guidelines (USSG § 2B1.1); (2) the adequacy of the factual basis for his guilty plea to aggravated identity theft (Count Four); and (3) the effectiveness of his counsel in failing to object to that factual basis. The Second Circuit affirmed in all respects.

Summary of the Judgment

Loss Calculation (USSG § 2B1.1): The court reviewed the district court’s application of the Guidelines de novo and its underlying factual findings for clear error. It upheld a loss figure equal to the difference between White’s fraudulent contract and the replacement contract, including foreseeable administrative costs and market adjustments.
Factual Basis for Aggravated Identity Theft: Under Rule 11(b)(3), the court held that the district court had an adequate factual basis—drawn from White’s admissions and counsel’s representations—to support his plea to using another person’s means of identification as a “key mover” of the fraud.
Ineffective Assistance of Counsel: Applying Strickland v. Washington, the circuit concluded that even if counsel had erred by not objecting to the plea’s factual basis, White did not show a reasonable probability of a different outcome.

Analysis

Precedents Cited

United States v. Cramer, 777 F.3d 597 (2d Cir. 2015) – Standard for de novo review of Guidelines application with factual findings for clear error.
United States v. Mi Sun Cho, 713 F.3d 716 (2d Cir. 2013) – Clear-error standard: plausible findings stand.
United States v. Turk, 626 F.3d 743 (2d Cir. 2010) – Emphasizes the centrality of loss in fraud sentencing under § 2B1.1.
United States v. Canova, 412 F.3d 331 (2d Cir. 2005) – Procurement-fraud loss analysis; substitute goods/services context.
Robers v. United States, 572 U.S. 639 (2014) – Restitution context; market fluctuations remain foreseeable loss.
United States v. Byors, 586 F.3d 222 (2d Cir. 2009) – “Value” offset limits: only money/property returned or services rendered count.
United States v. Albarran, 943 F.3d 106 (2d Cir. 2019) – Rule 11(b)(3) factual‐basis standard for guilty pleas.
United States v. Maher, 108 F.3d 1513 (2d Cir. 1997) – Plea court must assure admitted conduct constitutes offense.
United States v. Culbertson, 670 F.3d 183 (2d Cir. 2012) – Permissible bases for Rule 11 factual inquiry.
United States v. Aybar-Peguero, 72 F.4th 478 (2d Cir. 2023) – Limits on post-plea materials; plain error review.
Dubin v. United States, 599 U.S. 110 (2023) – “At the crux” requirement for aggravated identity theft.
United States v. Omotayo, 132 F.4th 181 (2d Cir. 2025) – Applying Dubin’s three-part “at the crux” test.
Strickland v. Washington, 466 U.S. 668 (1984) – Two-prong standard for ineffective assistance of counsel.
United States v. DiTomasso, 932 F.3d 58 (2d Cir. 2019) – De novo review of Strickland claims; options on direct appeal.

Legal Reasoning

Loss Calculation: Under USSG § 2B1.1 Comment 3(A), loss equals the greater of actual or intended loss. “Actual loss” includes reasonably foreseeable pecuniary harm (comment 3(A)(i)–(v)). The court agreed with the district court that re‐procurement costs—difference between the fraudulent award and the replacement contract—were foreseeable. White’s attempt to offset by “services rendered” failed: defense expenditures were merely reimbursements, not value conferred (Byors).

Plea Factual Basis: Federal Rule of Criminal Procedure 11(b)(3) requires a “factual basis” but not proof beyond a reasonable doubt. The district court may rely on counsel’s stipulations, the defendant’s admissions, and any presentence report available at the plea hearing. White’s admitted use of another’s social security number and signature to procure SBA guarantees and DCARNG contracts satisfied Dubin’s “at the crux” test: the identity misuse was integral (“key mover”), fraudulent, and central to the scheme.

Ineffective Assistance: Even assuming counsel erred by failing to object under Rule 11, White did not show prejudice: there is no reasonable probability he would have gone to trial or achieved a better outcome. The record firmly established his identity‐theft misconduct.

Impact

United States v. White clarifies and reaffirms:

Broad scope of “reasonable foreseeable” loss under USSG § 2B1.1—including administrative and market‐driven repurchase costs.
Limits on offsetting loss: only returned money/property or actual services (not reimbursements) reduce loss.
The “at the crux” requirement for aggravated identity theft: misuse of another’s identity must be an active, integral element of the predicate fraud.
Proper use of Rule 11(b)(3) and plain‐error review: plea courts may rely on stipulations and admissions without reweighing evidence.
High bar for succeeding on ineffective‐assistance claims when the record overwhelmingly supports the conviction.

These principles will guide sentencing courts, plea allocutions, and appellate review in procurement fraud and identity‐theft cases.

Complex Concepts Simplified

Reasonably Foreseeable Pecuniary Harm: Loss that the defendant knew or should have known would result, including costs of correcting a fraudulently awarded contract.
Actual vs. Intended Loss: Actual loss is what the victim truly lost; intended loss is what the defendant aimed to take. Under § 2B1.1, use the larger.
At the Crux: For aggravated identity theft, the improper use of someone else’s identity must be a central, active part of the crime, not mere background detail.
Plain Error Review: For unpreserved Rule 11 errors, the defendant must show a clear mistake that affected substantial rights and the fairness of judicial proceedings.
Strickland Two-Prong Test: Counsel’s performance must be objectively unreasonable, and that deficiency must have changed the outcome.

Conclusion

United States v. White reaffirms robust standards for calculating fraud loss under the Sentencing Guidelines and ensures that plea allocutions meet the “at the crux” threshold for aggravated identity theft. The decision underscores that only real value returned to a victim reduces loss and that central identity misuse fuels Section 1028A liability. Finally, it confirms the high bar for overturning guilty pleas or challenging counsel’s effectiveness when the defendant’s own admissions and the record plainly establish the crime.