Federal Sentencing Guidelines for Wire Fraud (18 USC 1343)

The federal sentencing guidelines for wire fraud don't punish what you actually did. They punish what the government can mathematically construct. That distinction will determine whether you serve two years or twenty, and most people don't understand it until they're sitting in a federal courtroom watching a prosecutor stack numbers that have nothing to do with reality. Welcome to Spodek Law Group. Our goal is to explain how wire fraud sentencing actually works - not the sanitized version you'll find on government websites, but the version that defense attorneys see destroy lives every single day.

Here's what nobody tells you about federal wire fraud sentencing: the "loss amount" that determines your prison time includes money you never received, victims you never harmed, and conduct from crimes you were never even charged with. The guidelines don't measure your crime. They measure a theoretical projection of harm that prosecutors are incentivized to maximize. Todd Spodek has watched this play out hundreds of times, and the pattern is always the same - defendants walk into sentencing expecting their punishment to match what they actually did, and they walk out facing years of prison time for a mathematical abstraction.

This isn't hyperbole. In 2022, the Third Circuit threw out a 104-month sentence in United States v. Banks because the defendant was sentenced based on $324,000 in "intended loss" when the victim lost exactly zero dollars. The court called the Sentencing Commission's definition of loss worthy of "no weight." But that ruling only applies in one circuit. Everywhere else, prosecutors can still build sentences from money that was never stolen, from harm that never occurred, from fraud that was structurally impossible to complete. That's the system. That's what you're walking into.

The 7-Point Starting Line That Means Nothing

Every wire fraud case starts at base offense level 7. Thats were everyone begins, and if you stopped there, your looking at maybe zero to six months for a first-time offender. Sounds almost reasonable. But nobody stops there. The base level is basicly just the foundation for a mathematical construction project that can add thirty or more levels before your criminal history even enters the calculation. Most defendants dont realize this untill there sitting in that courtroom.

The guidelines manual runs over 600 pages. Section 2B1.1 covers fraud, and it contains a loss table that looks almost scientific - loss amounts in one column, level increases in the other. But the science is an illusion. The numbers in that table dont represent what victims actualy lost. They represent what prosecutors can argue you intended to take, what co-conspirators you never met might have caused, what uncharged conduct a judge decides is "relevant" to your case. The table creates an apperance of objectivity while allowing enormous prosecutorial discretion in how the numbers get calculated. Its completly differnet from what most people expect.

Heres the kicker. Loss between $6,500 and $15,000 adds 2 levels. Loss between $250,000 and $550,000 adds 12 levels. Loss over $550 million adds 30 levels. That base of 7 plus 30 for loss puts you at offense level 37 before any other enhancements. At criminal history category I, thats 210 to 262 months. Seventeen to twenty-two years. For fraud. The statutory maximum for wire fraud under 18 USC 1343 is 20 years per count - but with the guidelines, prosecutors dont need to charge multiple counts to get there. They just need to calculate the right number.

The Number They Build Against You

Loss calculation is were the system reveals itself. Under the federal sentencing guidelines, "loss" is defined as the greater of actual loss or intended loss. Read that again. The greater of. Your sentence isnt based on what victims actually lost - its based on whichever number is higher, actual harm or theoretical projection.

Intended loss means "the pecuniary harm that the defendant purposely sought to inflict." But heres the part that makes defense attorneys loose sleep: the guidelines explicitely state that intended loss "includes intended pecuniary harm that would have been impossible or unlikely to occur." Impossible. The guidelines literaly say your sentence can be based on harm that was impossible. A sting operation were no real victim existed? Counts as intended loss. A scheme that structuraly couldnt have produced the projected harm? Counts as intended loss. The number dosent have to match reality. This isnt some obscure technicality - its the core of how federal fraud sentencing works.

Frederick Banks learned this the hard way. He ran a scheme involving fraudulent deposits totaling $324,000 and attempted 70 withdrawals that all failed. The victim - Gain Capital Group - lost nothing. Zero dollars. But the district court calculated his intended loss at over $250,000, added 12 levels to his offense, and sentenced him to 104 months in federal prison. Eight and a half years for a scheme were nobody lost a dime. The Third Circuit eventually vacated that sentence, holding that the ordinary meaning of "loss" is actual loss. But that ruling only binds courts in Pennsylvania, New Jersey, and Delaware. In the other circuits, Frederick Banks would still be serving that sentence.

Think about what this means for your case. Prosecutors dont have to prove actual harm to the same standard they proved guilt. At trial, guilt must be proven beyond a reasonable doubt. At sentencing, loss only needs to be proven by a preponderance of the evidence - basically 51%. The burden drops, the discretion expands, and the numbers get bigger. Thats the system design. Thats what your walking into.

Crimes You Were Never Charged With

If intended loss wasnt enough, the guidelines have another mecanism that makes sentences diverge even futher from actual conduct: relevant conduct. Under Section 1B1.3, your sentence isnt limited to the crimes you were convicted of. It can include uncharged conduct, dismissed counts, and - untill a 2024 amendment - even conduct you were aquitted of.

Let that sink in. A jury could find you not guilty on three counts and guilty on one count, and the judge could still consider those three acquittals when calculating your sentence. The Supreme Court sanctioned this in United States v. Watts (1997), reasoning that acquittal just means the prosecution didnt prove guilt beyond reasonable doubt - but at sentencing, the 51% preponderance standard applies. You can be sentenced for crimes a jury said you didnt commit.

The 2024 amendment finaly limited the use of acquitted conduct. But uncharged conduct - crimes the prosecution chose not to charge, or couldnt prove, or decided to hold in reserve - thats still fair game. If the judge finds by preponderance that uncharged conduct was "part of the same course of conduct or common scheme or plan," it gets included in your relevant conduct. Your sentence reflects crimes that never went to trial, crimes that were never subjected to cross-examination, crimes were you never had the chance to present a defense. Its extremly difficult to fight this at sentencing becuase the burden of proof is so low.

Heres were it gets even worse for fraud cases. The guidelines use something called "expanded relevant conduct" for offenses were quantity determines culpability. Drug trafficking, fraud, theft - these are aggregation offenses. That means the guidelines calculate total quantity across the entire scheme, including acts of co-conspirators, even if you never met them, even if you didnt know what they were doing. Your sentence can include losses caused by people you never worked with directly, as long as prosecutors can connect you to the "common scheme."

At Spodek Law Group, weve seen cases were a defendants loss calculation tripled because of co-conspirator conduct. Weve seen cases were uncharged conduct from years earlier suddenly appeared in the presentence report. The guidelines create a trap were your sentence is determined not by what you did, but by everything prosecutors can connect to you through the "relevant conduct" mechanism. This is why you need federal defense counsel before sentencing - the loss calculation battle happens in the weeks before you step into that courtroom, and if you lose it, the judge has limited ability to fix it.

The Enhancement Stack: How +30 Levels Happens

Loss is just the beginning. The guidelines contain a series of specific offense characteristics that can add levels on top of the loss enhancement. And they stack. Each one compounds the mathematical construction that determines your sentence.

More then 10 victims? Add 2 levels. More then 50 victims? Add 4 levels. More then 250 victims? Add 6 levels. Prosecutors count victims aggressivly - sometimes argueing that each wire transfer represents a seperate victim, even if its the same person recieving multiple fraudulent communications. Mass marketing gets you 2 levels automaticaly, plus the victim enhancement, with a floor of offense level 12 irregardless of loss.

Used sophisticated means to execute or conceal the fraud? Add 2 levels, with a floor of level 12. Sophisticated means can include using tecnology, creating shell companies, moving funds through multiple accounts, or operating from overseas. Almost any white collar scheme complex enough to attract federal attention qualifys. Prosecutors apply this enhancement generously.

Abused a position of trust? Add 2 levels. This enhancement applys if you had professional or managerial discretion and that position significently facilitated the fraud. Bank executives, attorneys, accountants, financial advisors - anyone with fiduciary dutys is vulnurable to this enhancement. The catch? It works differantly by circuit. The 2nd, 4th, and 5th Circuits generaly dont apply it to basic employer-employee relationships. The 9th Circuit has an "institutional trust" test thats much broader. Same guidelines, differant results depending on geography.

Targeted vulnerable victims? Add 2 levels, potentially more. If your fraud targeted elderly victims through telemarketing or email, prosecutors can add 10 years to whatever sentence the judge imposes. Thats on top of the guideline calculation, not part of it.

Relocated the scheme to evade law enforcement? Add 2 levels. Operated from outside the United States? Add 2 levels. Derived more than $1 million in gross receipts from a financial institution? Thats potentially 30 years statutory maximum instead of 20, plus guideline enhancements.

Now add them up:

• Base level 7
• Loss over $550,000: add 14 levels
• More then 50 victims: add 4 levels
• Sophisticated means: add 2 levels
• Position of trust: add 2 levels

Your at offense level 29 before criminal history - 87 to 108 months for a first-time offender. Seven to nine years. And thats a moderate-sized fraud. Scale it up, and the numbers get much worse. The guidelines cap cumulative victim-related enhancements at 8 levels, but everthing else stacks without limit. The math is relentless.

This is how Elizabeth Holmes ended up facing a potential 80 years. She was convicted on four counts of wire fraud - three wire fraud counts and one conspiracy count. 20 years per count, potentially consecutive. The actual sentence was 135 months, about 11 years. The defense asked for 18 months or home confinement. The prosecution asked for 15 years. The mathematical construction landed somewhere in between, but it was still over a decade in federal prison.

104 Months for Zero Actual Loss

Frederick Banks case deserves more attention becuase it exposes exactaly how arbitrary the guidelines can be. Banks ran a scheme targeting Gain Capital Group. He made fraudulent deposits totaling $324,000 and attempted 70 withdrawals. Every single withdrawal failed. The victim company lost nothing. Zero. The scheme was structurally incapable of producing the intended loss because the company's systems caught every attempted transfer.

The district court sentenced Banks to 104 months. Eight and a half years. For a fraud that produced zero victim harm. Why? Becuase the guidelines defined loss to include "intended loss," and Banks clearly intended to steal $324,000. The fact that he failed was completly irrelevent under the Commission's interpretation. Intent was enough. Thats the system working exactly as designed.

The Third Circuit disagreed. In a 2022 decision, the court applied Kisor v. Wilkie (2019), which changed how courts interpret agency regulations. Before Kisor, courts deferred to the Sentencing Commission's interpretation of its own guidelines. After Kisor, courts must independently analyze whether the Commission's interpretation matches the text. The Third Circuit looked at the word "loss" and concluded that its ordinary meaning is actual loss - money victims actually lost. The Commission's definition of "intended loss" got "no weight."

Banks' sentence was vacated. He was resentenced. But heres the uncomfortable truth: this ruling only applies in the Third Circuit. Pennsylvania, New Jersey, Delaware. If Banks had been prosecuted in New York, California, Texas, or any of the other circuits that havent adopted this reasoning, he'd still be serving that 104-month sentence. Same guidelines, same facts, different outcomes depending on geography. The system dosent even pretend to be consistent.

If your facing wire fraud charges, where you're prosecuted matters as much as what you did. The circuits interpret loss differently, apply position of trust differently, calculate relevant conduct differently. Federal law is supposed to be uniform, but the sentencing guidelines have created a patchwork were your prison time depends partly on which federal courthouse your case lands in.

The Only Ways Out

So what can you do? The guidelines are advisory after United States v. Booker (2005), meaning judges can deviate - but they rarely deviate dramatically upward or downward without strong justification. The 2024 data shows 39.9% of fraud sentences were variances from the guidelines, with an average reduction of 57%. That sounds hopeful until you realize it means 60% of defendants got guideline sentences or worse, and even a 57% reduction from a 10-year guideline is still over four years in federal prison.

Departure and variance arguments are where defense counsel earns their fee. A departure requires finding a policy statement in the guidelines manual that supports a lower sentence. A variance comes from the courts inherent sentencing power under 18 USC 3553(a). The judge must consider factors like the nature of the offense, the defendants history, the need for deterrence, and the need to avoid unwarranted sentencing disparities. An effective sentencing memorandum weaves these factors into a narrative that justifies a below-guideline sentence.

Substantial assistance is the other major variable. Help the government prosecute others - provide information, testify, give them evidence they couldnt get elsewhere - and prosecutors can file a 5K1.1 motion asking for a sentence below the guidelines. Substantial assistance departures can cut sentences in half or more. But theres a catch: only the government can file this motion. You cant ask for it. You have to earn it, and "earning it" means becoming a cooperator, with all the ethical and practical complications that entails.

Acceptance of responsibility gives you a 2 or 3 level reduction if you plead guilty and demonstrate remorse. But it requires admitting the offense conduct, which can complicate civil litigation, regulatory consequences, and immigration status. The calculation isnt straightforward. Sometimes fighting makes sense even if it costs you the acceptance credit.

At Spodek Law Group, we start loss calculation battles early - during the investigation phase if possible, certainly before the presentence report gets written. The probation officer who drafts that report relies heavily on the government's loss calculation. If you dont challenge it with your own analysis, documented evidence, and legal arguments, the number in that report becomes the number the judge sees first. First impressions matter in sentencing. Waiting too long is one of the biggest mistakes we see.

Heres what Todd Spodek tells every client facing wire fraud charges: the guidelines are a language, and prosecutors are fluent. They know how to characterize facts to maximize loss, how to argue for enhancements, how to present relevant conduct in the worst possible light. Your defense needs someone equally fluent who can translate the same facts into a different mathematical outcome. The gap between a 5-year sentence and a 15-year sentence often comes down to how the numbers are calculated, not what actually happened.

What This Means for Your Case

Wire fraud sentencing isnt about justice in any intuitive sense. Its about mathematical construction. The guidelines create a framework that appears objective but allows enormous prosecutorial discretion. Loss amounts can include impossible harm. Relevant conduct can include uncharged crimes. Enhancements can stack until the numbers bear no relationship to actual culpability. And the burden of proof drops from beyond reasonable doubt to 51% preponderance once your convicted. Thats the reality your facing.

If your under investigation or facing charges, the sentencing phase isnt something to worry about later. The loss calculation starts forming the moment prosecutors open a case. Every document you produce, every statement you make, every witness who cooperates against you - its all building toward a number that will determine years of your life.

Call Spodek Law Group at 212-300-5196. We handle federal fraud cases nationwide from our office in the Woolworth Building in Manhattan. The consultation is free. The mistake of waiting isnt. Federal wire fraud sentencing is a trap designed to produce long sentences from theoretical harm, and the only defense is understanding how the trap works before it closes.