Ninth Circuit finds fraud sentence can be based on 'intended loss'

(CN) — The Ninth Circuit Court of Appeals on Tuesday upheld a 10-year sentence for a man who stole $1.8 million in unclaimed property being held by the California State Controller’s Office.

California holds unclaimed property — financial assets such as uncashed cashier’s checks, stocks or utility account deposits — left inactive by its owner, usually for about three years.

Gabriel Diop, a 37-year-old French national, pleaded guilty in 2023 to nine counts of mail fraud and one count of aggravated identity theft for submitting applications with the controller’s office using a series of post office boxes, mail forwarding requests, counterfeit notary stamps and fake driver’s licenses from a number of states. His sentence of 10 years in federal prison was based on the roughly $11 million Diop had been trying to steal.

Diop appealed his sentence, arguing that it should have been based only on the roughly $1.8 million he actually received throughout the course of his fraudulent scheme.

But a three-judge panel didn’t see it that way.

Most criminal sentences are based on guidelines, which follow complicated equations based on a variety of factors, including, in the case of property crimes, “loss.” Diop was determined to a base offense level of 28, which included a 20-point enhancement for losses exceeding $9.5 million.

“Diop had submitted false claims for the additional $9 million, but his scheme was uncovered before he could receive this money,” wrote the three judges. “If ’loss’ does not include ‘intended loss,’ we would not be able to give meaningful effect to the relevant-conduct guideline.”

Using the defendant’s interpretation of loss, the judges wrote, would create “unwarranted disparities based on the happenstance of whether the defendant’s wrongdoing was discovered before he could complete his crime. For these reasons, the commission’s treatment of ’loss’ as including ‘intended loss’ is reasonable.”

Diop’s federal public defender did not respond to an email requesting a comment. The Department of Justice declined to comment.

The Ninth Circuit panel included U.S. Circuit Judge Morgan Christen, a Barack Obama appointee, as well as U.S. Circuit Judges Kenneth Kiyul Lee and Daniel Bress, both Donald Trump appointees.

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