Precedents Cited

The judgment heavily relies on established precedents to uphold the district court's decisions. Key cases include:

• United States v. You, 74 F.4th 378 (6th Cir. 2023):

This case clarified that "loss" under U.S.S.G. § 2B1.1(b)(1) encompasses both actual and intended loss. The Sixth Circuit held that the intended loss should be considered when determining the offense level for theft-related crimes such as wire fraud.

• United States v. Riccardi, 989 F.3d 476 (6th Cir. 2021):

Riccardi established that factual findings related to the loss amount in sentencing are reviewed for clear error, while the methodology for calculating such amounts is reviewed de novo.

• United States v. Banks, 55 F.4th 246 (3d Cir. 2022):

Although the Third Circuit in Banks took a different approach regarding loss calculations, the Sixth Circuit in Watkins emphasized that a panel cannot overrule the decision of another circuit, thereby upholding the precedent set in You.

• Kisor v. Wilkie, 588 U.S. 558 (2019):

This Supreme Court decision provided the framework for determining when to defer to an agency's interpretation of its own regulations. The Sixth Circuit applied this framework in assessing the Guidelines' commentary on loss calculations.

• Tri-Cities Holdings LLC v. Tennessee Admin. Procs. Div., 726 Fed.Appx. 298 (6th Cir. 2018):

This case underscored the necessity for appellants to present developed arguments rather than mere assertions when challenging district court findings.

Legal Reasoning

The court's legal reasoning centered on two main aspects: the inclusion of intended loss in the sentencing calculations and the appropriateness of separate sentencing hearings.

1. Use of Intended Loss in Calculating Offense Level

Under U.S.S.G. § 2B1.1(b)(1), theft and fraud offenses begin with a base offense level, which is then adjusted based on the amount of loss. The key issue was whether "intended loss" could be counted alongside "actual loss." The Sixth Circuit, referencing the precedent set in United States v. You, concluded that the Sentencing Guidelines' commentary explicitly includes intended loss as a component of the total loss, thereby allowing courts to consider it when determining offense levels.

Watkins argued that the district court had misinterpreted the Guidelines by including intended loss. However, the appellate court dismissed this by reinforcing that the Guidelines, as interpreted in You, clearly permit such calculations. Moreover, the court emphasized that lower courts are bound by the interpretations established within their circuit, rejecting Watkins' attempt to rely on a dissenting Third Circuit opinion.

2. Calculation of Loss Amount

Watkins contended that the district court relied on speculative and inflated loss figures provided by the government. However, the appellate court found his arguments underdeveloped and merely conclusory, lacking specific evidence to demonstrate any error. The court reiterated that to challenge factual findings, appellants must provide concrete evidence of errors, not just vague assertions.

The district court's use of "relevant conduct," including uncharged conduct similar to the charged offenses, was upheld. The court highlighted that the government's evidence showed these additional instances met the criteria for relevance under U.S.S.G. § 1B1.3, justifying their inclusion in the loss calculations.

3. Concurrent Sentencing and Criminal History Score

Watkins also objected to being sentenced separately for the Walmart fraud and EIDL fraud cases, arguing that this approach adversely affected his criminal history score and, consequently, his sentencing range. The appellate court affirmed the district court's discretion to conduct separate sentencing hearings, especially since the cases, while related, did not overlap factually or temporally.

The district court appropriately included the Walmart fraud conviction in the EIDL fraud case's criminal history score, as per the Sentencing Guidelines' commentary. Watkins' request for a downward departure or variance was denied due to a lack of substantial evidence to warrant such discretion.

Impact

The decision in United States v. Watkins has significant implications for future federal fraud cases, particularly those involving complex schemes and multiple defendants. Key impacts include:

• Affirmation of Using Intended Loss: The court's reaffirmation that intended loss is a permissible factor in calculating offense levels provides clarity and consistency for future sentencing, ensuring that defendants are held accountable not just for actual losses but also for the potential harm they intended to inflict.
• Emphasis on Developed Arguments: The ruling underscores the necessity for appellants to present well-supported, detailed arguments when challenging factual determinations, setting a higher bar for appeals.
• Discretion in Sentencing Practices: By upholding the district court's decision to conduct separate sentencing hearings, the judgment reinforces judicial discretion in handling multiple related offenses, allowing for tailored sentencing that reflects the nuances of each case.
• Guidance on Relevant Conduct: The court's interpretation of relevant conduct under the Sentencing Guidelines offers clearer guidance on how uncharged conduct can influence sentencing, thereby informing both prosecution strategies and defense preparations.

Overall, this judgment strengthens the framework for sentencing in fraud cases, promoting fairness and adherence to established legal principles while providing a robust mechanism for addressing complex fraudulent activities.