Bank Fraud · Sentencing

How Is Bank Fraud Loss Calculated at Sentencing?

A sound estimate separates actual loss, intended loss, credits and relevant conduct under the guideline manual that applies to the case.

By Heath Hyde · East Texas and statewide

Mr. Heath Enix ‘Heath’ Hyde
Eligible to Practice in Texas
Attorney at Law
Bar Card Number: 00796807
TX License Date: 11/01/1996

Primary Practice Location: Sulphur Springs, TX and Dallas, TX
214 Connally St Ste A
Sulphur Spgs, TX 75482-2612

The loan balance is a starting number, not necessarily the sentencing loss. Counsel first needs to select the Guidelines Manual under § 1B1.11. In the 2025 Manual, § 2B1.1 generally uses whichever is greater: actual loss or intended loss. Actual loss concerns reasonably foreseeable financial harm caused by the offense. Intended loss concerns the financial harm the defendant purposely sought to cause.

How does the loss amount affect sentencing?

The loss bracket adds levels to the advisory offense-level calculation. Under the 2025 loss table, $250,000 adds 10 levels, $300,000 adds 12 and $600,000 adds 14. The thresholds say “more than”: exactly $250,000 does not cross the next bracket. These examples do not determine a prison sentence. The base level, other adjustments, criminal history, statutory limits and the court’s sentencing analysis still matter. Use the Manual that applies to the case.

A loan-file example

Suppose a hypothetical file shows a $500,000 advance, $50,000 in qualifying payments before detection and $200,000 recovered from pledged collateral by sentencing. With those assumptions, and no overlapping credits or other losses, the proposed actual-loss calculation is $500,000 minus $50,000 minus $200,000: $250,000. Keep the payment dates and sale records beside the calculation.

That is an illustration, not a universal loan formula. Counsel must establish that each credit qualifies. A separately supported intended loss of $500,000 could still control instead of the $250,000 actual loss. An unpaid principal balance alone does not resolve what harm the defendant purposely sought.

See § 2B1.1 Application Notes 3(C)–(D) for exclusions and credits. Interest, finance charges, late fees and the other listed costs are excluded from guideline loss. Identify them separately rather than accepting the total balance printed on a bank statement.

Start with the loan records

Put the advances and outstanding balances in date order. Beside them, list payments, collateral, recoveries, guarantees, insurance and charge-offs. Keep the supporting document for every entry. A bank’s decision to write off a loan does not settle the guideline calculation, and money recovered later does not automatically qualify for a credit.

For a proposed credit, first identify what came back to the victim and when. The 2025 Manual treats these situations differently:

These are starting checks. Counsel must apply the full rule to the evidence supporting the requested credit.

Show where the calculations differ

A useful working schedule puts the government’s figure beside the defense figure. For each difference, identify the disputed transaction, the record supporting the objection and the rule allowing an exclusion or credit. Include entries that hurt the defense as well as those that help it.

For multiple borrowers, keep these entries separate:

• Transactions attributed to this defendant: identify the relevant-conduct basis under § 1B1.3 for including each one.
• A proposed victim adjustment: check its requirements separately from the loss total.
• Restitution and forfeiture: calculate each under its own governing law.

An objection to the sentencing amount can accept facts underlying the conviction while challenging how the government used them in its calculation.

Check the edition before using its rules

Before using a definition or claiming a credit, make an edition check under § 1B1.11:

• Start with the Manual effective on the sentencing date.
• If that edition would violate the Ex Post Facto Clause, use the edition effective when the offense of conviction was committed.
• Apply the selected edition as a whole. Check the policy statement’s instructions for later clarifying amendments and offenses spanning editions.

Keep the editions being compared in the file. Choosing a definition from one year and a credit rule from another is not the whole-Manual approach the policy statement requires.

Finally, identify what is being disputed. A borrower’s expectation of repayment and an allegation that the borrower purposely sought to cause a larger loss require careful examination of the evidence. Neither should be substituted for the guideline’s intent requirement. A dispute about foreseeable harm raises a different question from a dispute about harm purposely sought. The schedule should explain how every payment, recovery, collateral valuation and contested transaction fits the applicable rule.

What changed in 2024?

Amendment 827, effective November 1, 2024, moved the actual/intended-loss rule and related definitions from commentary into notes to the guideline’s loss table. The 2025 text therefore matters directly; an argument about an older commentary provision is not a substitute for reading the selected Manual.

For older Manuals, United States v. Kasali, No. 21-20681, at 16–17 (5th Cir. Aug. 2, 2024), applied United States v. Vargas, 74 F.4th 673 (5th Cir. 2023) (en banc), when addressing an intended-loss commentary challenge. Under plain-error review, Kasali upheld the use of intended loss; its footnote explains that Vargas preserved the Stinson standard for Guidelines commentary. The Fifth Circuit also rejected a Kisor-based challenge in United States v. Osemwengie, No. 23-20511, at 3 (May 2, 2024), an unpublished decision. Do not assume an interpretation accepted in another circuit governs a Texas federal case.

Loss, restitution and forfeiture answer different questions

• Guideline loss affects the advisory offense level under § 2B1.1. Its rules may include intended harm that never occurred.
• Restitution compensates qualifying victims for actual harm with the required causal connection. 18 U.S.C. § 3663A defines the covered offenses and victims. Intended loss alone is not a restitution amount.
• Forfeiture concerns property reached by the governing forfeiture statute. For bank fraud affecting a financial institution, § 982(a)(2) addresses proceeds obtained from the violation. It is not simply another name for the victim’s unpaid balance.

The Fifth Circuit distinguished restitution’s compensatory function from forfeiture’s punitive function in United States v. Sanjar, 876 F.3d 725, 751 (5th Cir. 2017). Keep three calculations with their own sources and supporting records; the amounts can differ.

Common questions

Is sentencing loss the unpaid loan balance?

Not necessarily. Check the applicable loss definition, relevant conduct, exclusions and qualifying credits.

Does repayment after discovery reduce guideline loss?

The ordinary returned-money credit requires return before detection as the Manual defines it. Pledged-collateral rules differ. A later payment may matter elsewhere without qualifying for that credit.

Can intended loss exceed actual loss?

Yes. The larger intended amount must be supported by evidence of the harm purposely sought, not inferred solely from what remained unpaid.

Is sentencing loss the same as restitution?

No. Guideline loss may include intended harm; restitution requires its own victim, causation and actual-loss analysis.