[Ed. note -- Jon asked me to step in for a few days while he's out of the office.]

United States v. Morris, No. 12-50302 (Reinhardt with Kozinski and Clifton)

In fraud cases, the Guidelines' sentencing recommendation is driven by the "amount of loss" occasioned by the defendant's conduct.  The defendant obtained three fraudulent mortgages in 2007, for which he was charged in 2011, after the housing bubble burst.  He argued that the amount of loss should have been computed based on the "reasonably foreseeable pecuniary harm," U.S.S.G. § 2B1.1 note 3(A)(i), and it was not reasonably foreseeable that the properties secured by the mortgages would have so drastically reduced in value in light of the drastic downturn in the housing market in 2008 and 2009.  But, the Ninth Circuit said, the Guidelines' instruction is clear -- the credit against the amount of loss is measured by either the amount the victim actually recovers (here, by selling the properties at a particular time) or the fair market value at the time of conviction.  Reasonable foreseeability with respect to the future depreciation of an asset does not come into play.  Thus the district court correctly calculated the amount of loss based on the value of the secured properties at the time the victim banks sold them.

The opinion is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2014/03/13/12-50302.pdf