June 29, 2016
Principal Frank Rudewicz, Partner Ricardo Zayas and Manager Nitasha Giardina from Marcum's Advisory Services group collaborated on an article for Business Law Today, about calculating losses in white collar crime.
By Frank Rudewicz, Ricardo Zayas & Nitasha Giardina
Forensic accountants are routinely hired to assist in calculation of lost profits and economic damages in various types of litigation. One such engagement is assisting attorneys in calculating losses and/or reviewing such calculations to determine the length of sentence for a defendant in white-collar crime litigation. In most other matters, accountants have a free hand in determining the method appropriate to calculate damages incurred. However, Part 2B1.1 of the U.S. Sentencing Guidelines Manual provides certain parameters for accountants in calculating losses for the purpose of determining length of sentence for white-collar crime defendants. This article illustrates the use of a combination of damage theory and U.S. Sentencing Guidelines (Guidelines) to calculate losses related to white-collar crime and how changes to the Guidelines could change the approach to such calculations, thereby impacting a defendant's length of sentence. This article does not address offenses involving taxation or corporate defendants.