US v. Christian Peterson.  No. 14-3716.

Before running into legal trouble, Christian Peterson, an entrepreneur doing business in Madison, Wisconsin, owned several manufacturing and realestate development firms. He misused corporate finances, frequently making unauthorized intercompany loans and occasionally using corporate funds to pay off his personal gambling debts. Eventually all of his business ventures failed, his companies defaulted, and federal agents launched an investigation. Peterson was indicted on thirteen criminal counts—bank fraud, making false statements to banks, money laundering, and pension theft—and a jury found him guilty of eight of those crimes.

Regarding the sentence, the judge correctly calculated the gross receipts Peterson derived from his fraud; because he was the sole perpetrator, all proceeds of the fraud were properly attributed to him. But Peterson repaid in full a $300,000 wire transfer prior to detection of his fraud, so that sum should not have been included in the total loss amount.

Under U.S.S.G. § 2B1.1(b)(1)(I), a 16-level enhancement applies to a fraud that results in total loss of more than $1 million. Application note 3(E)(i) explains that “[t]he money returned . . . by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected” should be subtracted from the total loss amount. See also United States v. Hausmann, 345 F.3d 952, 960 (7th Cir. 2003).

The judge applied the 16-level enhancement based on a total loss amount of $1,116,169—again, the sum of the $300,000 loss from the M&I wire transfer and the $816,169 loss from the Greenwoods loan. Peterson argues that the $300,000 wire transfer should not have been included because he repaid that amount in full prior to detection of his fraud.

The government now concedes that this repayment occurred before Peterson’s fraud was detected. Subtracting $300,000 from the total loss calculation leaves only $816,169. A 14-level enhancement applies to this total loss amount. See U.S.S.G. § 2B1.1(b)(1)(H). Peterson is entitled to resentencing.

Accordingly, we VACATE the sentence and REMAND for resentencing.

BY:  Chicago White Collar Attorney Michael J. Petro

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