United States v. Eureka Laboratories, Inc.
United States Court of Appeals for the Ninth Circuit
103 F.3d 908 (1996)
- Written by Sharon Feldman, JD
Facts
Eureka Laboratories, Inc. (Eureka) (defendant) was an analytical testing laboratory. Eureka had contracts with three government entities to analyze samples from hazardous waste sites. Eureka fraudulently manipulated the analytical tests and pleaded guilty to conspiracy to defraud the United States and other offenses. During the sentencing process, the court estimated the loss to the government from Eureka’s fraud to be $4.6 million and calculated the guidelines fine range as $6.4 million to $9.2 million. The presentence report recommended a fine of $4.3 million based on Eureka’s assets and deteriorating finances. The district court had an independent auditor determine whether Eureka could pay a fine of that amount. The auditor estimated Eureka’s net assets to be $1,516,000 and indicated that Eureka would lose money for three years, could make a profit by the fourth year, and likely would cease doing business within a year. The district court imposed a $1.5 million fine, payable in installments over a five-year probation period, and restitution in the amount of $322,000. Eureka appealed, arguing that the district court violated § 8C3.3 of the Sentencing Guidelines by imposing a fine that would jeopardize Eureka’s continued viability.
Rule of Law
Issue
Holding and Reasoning (Thompson, J.)
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