Requiring Actual Loss for Sentencing Enhancements under U.S.S.G. §2B1.1

Introduction

The consolidated appeals in United States v. Patrick Barkers-Woode and United States v. Nana Mensah arose from a cross-border fraud scheme targeting Sprint’s promotional smartphone program. Conspirators in Ghana obtained personal information of unsuspecting U.S. residents to open Sprint accounts, have smartphones shipped to vacant residences, and then resold the devices. A jury convicted both appellants of mail fraud, aggravated identity theft, and related conspiracies. At sentencing, the district court applied several Guidelines enhancements—most notably a 14-point enhancement under U.S.S.G. §2B1.1(b)(1)(H) based on “intended loss” of $595,399.76 and enhancements for the number of victims and leadership role. Barkers-Woode also challenged the admission of co-conspirator testimony under Rule 404(b) and the district court’s decision to force him to proceed pro se. Mensah argued that certain enhancements violated Apprendi because they rested on judge-found facts.

Summary of the Judgment

The Third Circuit held that:

The use of “intended loss” to calculate the §2B1.1(b)(1) enhancement was plain error under United States v. Banks, which requires use of actual loss. The cases are remanded for resentencing using the actual loss figure ($357,565.92).
The 2-point enhancement under §2B1.1(b)(2)(A)(i) for the number of victims was correctly applied. Under both the amended Guidelines and independent textual analysis, “victim” includes those whose identities were used without authority.
The district court did not abuse its discretion by admitting co-conspirator testimony about a contemporaneous fraud against Walmart as “intrinsic” evidence of the conspiracy, not subject to Rule 404(b).
Barkers-Woode forfeited his Sixth Amendment right to counsel through “extremely dilatory conduct” despite multiple warnings, justifying the court’s order that he proceed pro se.
Mensah’s challenge under Apprendi to sentencing enhancements based on judge-found facts (U.S.S.G. §§2B1.1(b)(10)(B) and 3B1.1(a)) failed because advisory Guidelines do not trigger Apprendi’s jury-trial guarantee.

Analysis

Precedents Cited

United States v. Banks, 55 F.4th 246 (3d Cir. 2022) – Holds that “loss” under §2B1.1(b)(1) is limited to actual loss, not intended loss.
United States v. Kennedy, 554 F.3d 415 (3d Cir. 2009) – Initially required pecuniary harm for “victim” under §2B1.1(b)(2), later superseded by Guidelines amendment.
United States Sentencing Commission Amendment 726 (2009) – Added Application Note 4(E) explicitly defining “victim” to include identity theft subjects.
United States v. Nasir, 17 F.4th 459 (3d Cir. 2021 en banc) – Clarified modern deference to Guidelines commentary under Kisor v. Wilkie.
Henderson v. United States, 568 U.S. 266 (2013) and Olano, 507 U.S. 725 (1993) – Govern plain error review.
United States v. Green, 617 F.3d 233 (3d Cir. 2010) – Defines “intrinsic” evidence as that which directly proves the charged offense or occurs contemporaneously.
United States v. Goldberg, 67 F.3d 1092 (3d Cir. 1995) – Explains forfeiture of the right to counsel through dilatory conduct.
United States v. Grier, 475 F.3d 556 (3d Cir. 2007 en banc) – Holds that fact-finding for advisory Guidelines enhancements is judge-driven and not subject to Apprendi.

Legal Reasoning

1. Plain Error in Loss Calculation: Under Banks, a §2B1.1(b)(1) enhancement must be keyed to actual economic loss. The district court’s use of intended loss was “plain” and affected both appellants’ substantial rights, warranting remand for resentencing.

2. Victim‐Count Enhancement: The court applied §2B1.1(b)(2)(A)(i) based on 248 identity theft victims. After Nasir and Amendment 726, “victim” plainly includes anyone whose identifying information was misused—no pecuniary-harm threshold remains.

3. Admission of Intrinsic Evidence: Testimony about a parallel Walmart fraud was intrinsic to the charged conspiracy. It directly proved the scope and agreement among conspirators, so Rule 404(b) did not apply.

4. Forfeiture of Counsel: Barkers-Woode’s repeated hostility, baseless complaints, threats, and physical altercation with counsel—despite multiple warnings—amounted to “extremely dilatory conduct” that forfeited his right to counsel without a formal Faretta colloquy.

5. Apprendi and Advisory Guidelines: Mensah’s Apprendi challenge to judge-found enhancements failed under Grier, which distinguishes advisory Guidelines from statutes setting maximum penalties.

Potential Impact

District courts must now calculate fraud enhancements under §2B1.1(b)(1) using actual, not intended, losses—a significant guideline shift post-Banks.
Confirms that identity-theft targets qualify as “victims” for victim-based enhancements, broadening the reach of §2B1.1(b)(2).
Reinforces expansive use of intrinsic evidence in conspiracy trials, limiting Rule 404(b) challenges where acts are contemporaneous and directly prove the conspiracy.
Clarifies the standard for forfeiture of the right to counsel: extreme, repeated obstruction by a defendant can justify requiring self-representation.
Maintains that advisory Guidelines’ fact-finding remains judge-driven under Apprendi, preserving existing sentencing practices.

Complex Concepts Simplified

Plain Error Review: A four-step test allowing appellate courts to correct clear, obvious errors that were not objected to at trial, if those errors affect substantial rights.
Actual vs. Intended Loss: Actual Loss: The money or value actually taken from victims.
Intended Loss: The total amount the defendant planned to take, whether or not the plan succeeded.
Intrinsic Evidence: Evidence that directly proves the crime charged or is part of its execution. Such evidence is exempt from Rule 404(b) character-evidence restrictions.
Forfeiture of the Right to Counsel: When a defendant’s extreme misconduct (e.g., threats, obstruction, repeated breakdowns with counsel) effectively waives the Sixth Amendment right, permitting the court to require self-representation.
Apprendi Doctrine: Requires that any fact (other than a prior conviction) increasing a statutory maximum sentence be charged in an indictment and proved to a jury beyond a reasonable doubt—but it does not apply to judge-driven advisory Guidelines enhancements.

Conclusion

United States v. Barkers-Woode and Mensah clarifies several critical points in fraud sentencing and procedural law. It mandates use of actual loss for §2B1.1(b)(1) enhancements, validates a broad definition of “victim” for identity theft cases, affirms the admission of intrinsic conspiracy evidence, delineates when a defendant forfeits the right to counsel, and confirms that advisory Guidelines remain judge-found. Together, these holdings will guide district courts in calculating fraud sentences, managing evidentiary disputes, and handling counsel changes in white-collar prosecutions.