More than four years ago, I blogged about how former federal prosecutor Ken White had tracked down a con-artist who sent a fake invoice to his firm. Now, finally, the scammer has been indicted.
The indictment accuses career conman David Bell of "four counts of wire fraud and attempted wire fraud, nine counts of mail fraud, and a forfeiture allegation seeking to take everything Bell earned through his enterprise."
White breaks down the very long delay in securing this indictment and tells us what we can expect to happen next. As always, White's breakdowns are a rare, layperson-friendly peek into the goods and bads of the American justice system. Now that Bell is in a prosecutor's crosshairs, his goose is almost certainly cooked.
Because this is a fraud case, the driving force behind the length of the sentence will be the "amount of loss" attributable to Bell's actions. When it comes to the wire fraud scheme, that's fairly straightforward — it's likely the amount of money actually paid by the payroll companies. That's not necessarily limited to the transactions charged in the indictment. Under the principle of "relevant conduct," it could include uncharged transactions in the same scheme — for instance, the uncharged money described in the lawsuits detailed in Chapter Five.
But the potentially huge number is the amount of loss attributable to the mail fraud scheme, which targeted thousands of victims. The amount of loss isn't limited to the nine particular mailings listed in the indictment — the potential universe is all of the mailings over the course of the scheme. Just counting the companies that were successfully defrauded, that's likely hundreds of thousands of dollars. But that's not all. If the government wanted to be aggressive — and if the court were receptive (plausible in the case of a career con-man) — Bell could be sentenced based on a theory of intended loss. Under that theory the amount of loss for guideline purposes would be the amount he would have reaped if every single fraudulent mailer yielded money. That's a vast amount.
That provides insight into why federal prosecutors have so much power. In a case like this, they can say "plead guilty and we'll stipulate that the amount of loss is $100,000 — only the actual loss. Go to trial and we'll argue that the amount of loss is the intended loss — $1,000,000." Suddenly the delta between pleading guilty and going to trial is the difference between five months in custody and four years in custody.
Anatomy of a Scam Investigation, Chapter 14: The Indictment
[Ken White/Popehat]
(Image: Roasted Goose, Sfllaw, CC-BY-SA)
