Forensic Accountants in White Collar Criminal Defense

A forensic accountant on a white collar defense team reconstructs the money: what moved, when, to whom, and whether the government’s version of that story survives contact with the underlying records. In a federal case most of that work funnels into one number, the loss figure, because loss moves the federal sentencing guidelines range further than almost anything else in the file.

That number does not arrive at trial. It arrives in discovery, and again in the presentence report, where a figure that goes uncontested can become the figure the court adopts.

What a forensic accountant does on a defense team, and what they cannot say

The work divides into a few recognizable jobs: reconstructing books and bank activity from raw records rather than from government summaries, testing the method behind the loss calculation, quantifying the credits and exclusions the guidelines allow, translating financial structure for counsel and later for a judge, preparing exhibits, and testifying if it comes to that. The people doing it are usually CPAs, many of them also Certified Fraud Examiners.

There is a line they cannot cross. Under the AICPA Statement on Standards for Forensic Services No. 1, effective for engagements accepted on or after January 1, 2020, a member performing forensic services “is prohibited from opining regarding the ultimate conclusion of fraud,” because that decision belongs to the trier of fact. They may opine on whether evidence is consistent with certain elements. The same standard bars an expert witness in a litigation engagement from giving opinions under a contingent fee arrangement unless the AICPA’s Contingent Fees Rule expressly permits it, and directs that a member not subordinate an opinion to that of any other party. If the expert testifies, Federal Rule of Evidence 702, amended December 1, 2023, puts the burden on the side offering the opinion to show it is more likely than not that the testimony rests on sufficient facts and a reliable application of reliable methods.

Why the loss figure sets your guidelines range

Fraud, theft and embezzlement offenses are sentenced under USSG §2B1.1. The base offense level is 7 if the offense of conviction carries a statutory maximum of 20 years or more, which covers wire fraud under 18 U.S.C. § 1343, and 6 otherwise. The loss table at §2B1.1(b)(1) then adds between 2 and 30 levels.

The Notes to that table define the terms. Loss is the greater of actual loss or intended loss. Actual loss is the reasonably foreseeable pecuniary harm that resulted from the offense. Intended loss is the pecuniary harm the defendant purposely sought to inflict, including harm that was impossible or unlikely to occur, such as a government sting or an insurance claim exceeding the insured value. Pecuniary harm must be monetary or readily measurable in money, so emotional distress and reputational harm fall outside it. Gain substitutes for loss only when a loss exists but reasonably cannot be determined.

Two provisions do most of the defense work. Loss is reduced by money and property returned to the victim before the offense was detected, and by collateral the victim has recovered or still holds. It also excludes interest of any kind, finance charges, late fees, penalties, and the government’s own investigation costs. On a lending or investment case, the gap between the money that went out the door and the figure that survives those adjustments can be very large.

The government carries the burden by a preponderance of the evidence, and the court “need only make a reasonable estimate of the loss,” which gets appellate deference. The Commission’s 2026 primer notes the practical consequence: courts have upheld loss findings taken from a presentence report where the figure “went entirely unchallenged.”

Here is what a few levels are worth, on a wire fraud count in Criminal History Category I with a three-level reduction for acceptance of responsibility under §3E1.1. Two levels of that reduction come from §3E1.1(a); the third comes from §3E1.1(b), which applies only on a government motion and only where the offense level before the reduction is 16 or greater. The loss figures below use the table in effect through October 31, 2026, which the next section covers.

Step	Levels
Base offense level, statutory maximum of 20 years	7
Loss found at $600,000 (more than $550,000)	+14
Acceptance of responsibility	-3
Total offense level	18

Level 18 in Category I is 27 to 33 months. Move the same case to a loss of $500,000 and the enhancement drops to 12 levels, the total is 16, and the range is 21 to 27 months. A $100,000 disagreement crossed one line in a table and took six months off the bottom of the range.

Whether intended loss counts at all has itself been contested. Until November 1, 2024 that instruction sat in the commentary rather than the guideline, and the Third Circuit held in United States v. Banks that “loss” meant actual loss only, while the other circuits to reach the question applied the commentary. Amendment 827 moved it into the guideline, which the Commission described as an effort to ensure consistent loss calculation across circuits.

The dollar thresholds change on November 1, 2026

On April 30, 2026 the Sentencing Commission submitted amendments to Congress with a specified effective date of November 1, 2026, published at 91 Fed. Reg. 24088. Absent action by Congress to the contrary, they take effect by operation of law on that date.

One of them adjusts the §2B1.1 loss table for inflation, the first such adjustment since 2015, using a multiplier drawn from the Bureau of Labor Statistics Consumer Price Index. The Commission’s stated basis is that $1.00 in 2014 equals $1.36 in 2025. The tax table at §2T4.1 and the fine tables move in the same amendment.

Increase in level	Threshold through October 31, 2026	Threshold from November 1, 2026
add 8	more than $95,000	more than $150,000
add 10	more than $150,000	more than $200,000
add 12	more than $250,000	more than $350,000
add 14	more than $550,000	more than $750,000
add 16	more than $1,500,000	more than $2,000,000
add 20	more than $9,500,000	more than $15,000,000

Which table applies turns on the sentencing date, not the conduct date. Under §1B1.11 the court uses the Guidelines Manual in effect the day the defendant is sentenced, unless that would violate the ex post facto clause, in which case it uses the manual in effect when the offense was committed. A manual is applied in its entirety, not mixed across editions.

Relevant conduct is why the loss figure covers more than the counts

The loss number is not confined to the counts of conviction. Under §1B1.3 it takes in the acts of others in a jointly undertaken criminal activity, but only those within the scope of that activity, in furtherance of it, and reasonably foreseeable. All three conditions have to hold. Section 2B1.1 is also listed at §3D1.2(d), which switches on a wider rule at §1B1.3(a)(2): for those offenses, relevant conduct includes acts that were part of the same course of conduct or common scheme or plan as the offense of conviction. That is what pulls uncharged transactions and dismissed counts into the total, and why a plea covering two wire transfers can produce a loss figure assembled from four years of them. Sorting which of them belong to the scheme is an accounting exercise before it is a legal argument.

One category it no longer reaches is acquitted conduct. Amendment 826, effective November 1, 2024, added §1B1.3(c): relevant conduct excludes conduct the defendant was charged with and acquitted of in federal court, unless that conduct also establishes, in whole or in part, the offense of conviction.

The other §2B1.1 findings a financial reconstruction moves

Loss is the largest single input, not the only one. The offense enhancements around it turn on the same records, and the Commission publishes how often each is applied here.

Finding	Guideline	Effect	Applied in FY 2025
Victims, or extent of harm to victims	§2B1.1(b)(2)	+2, +4 or +6	33%
Sophisticated means	§2B1.1(b)(10)(C)	+2, floor of level 12	20%
Abuse of trust or use of a special skill	§3B1.3	+2	16%
Leadership or supervisory role	§3B1.1	+2, +3 or +4	11%
Obstruction of justice	§3C1.1	+2	4%

Two are close to pure accounting questions. The victim enhancement adds 2 levels for 10 or more victims, mass-marketing, or substantial financial hardship to one victim, 4 for hardship to five or more, and 6 for 25 or more, and the commentary measures “substantial financial hardship” against a list: a victim becoming insolvent, filing for bankruptcy, losing a substantial part of a retirement or education fund, or suffering substantial harm to their ability to obtain credit. “Sophisticated means” is especially complex or intricate conduct in executing or concealing an offense, and the commentary names fictitious entities, corporate shells and offshore accounts as conduct that ordinarily qualifies.

The hardship finding costs twice. Under §4C1.1 a defendant with no criminal history points receives a 2-level decrease if eleven conditions are met, one being that the defendant did not personally cause substantial financial hardship, so a §2B1.1(b)(2) finding can both add levels and take two away. In fiscal year 2025, 74 percent of people sentenced here were in Criminal History Category I and 52 percent received that adjustment. Seventy percent were men, leaving close to a third as women’s federal cases on the same table. Professor Doug Berman covered both with this group in 2023.

How privilege works when the accountant is hired through your lawyer

There is no general accountant-client privilege in a federal criminal case. The tax practitioner privilege at 26 U.S.C. § 7525 exists, but by its own terms it “may only be asserted in” a noncriminal tax matter before the IRS and a noncriminal tax proceeding in federal court brought by or against the United States. It does nothing once the matter is criminal.

What protects the work is the attorney-client privilege, extended over the accountant. That rule comes from United States v. Kovel, decided by the Second Circuit in 1961, on the reasoning that accounting concepts are “a foreign language to some lawyers in almost all cases, and to almost all lawyers in some cases.” The court’s limit is the part worth reading twice. “What is vital to the privilege is that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer.” And: “If what is sought is not legal advice but only accounting service, or if the advice sought is the accountant’s rather than the lawyer’s, no privilege exists.” Communications made first to your own accountant are not protected.

That is why these engagements run through counsel, and why the person on the other end of the call is usually described as a consulting expert. When Anthony Bracco and Brian Sanvidge of Anchin spoke to this group in February 2026, Sanvidge described the arrangement as “a co-counsel agreement where we’re brought in as a consulting expert.”

The structure tracks a real line in the discovery rules. Rule 16(b)(2) does not authorize the government to discover reports or memoranda made by the defendant or defense counsel during the investigation or defense of the case, apart from scientific and medical reports. Designating that expert to testify changes it: Rule 16(b)(1)(C) then requires a written disclosure of every opinion to be elicited in the defense case-in-chief, the bases and reasons for them, the witness’s qualifications and publications from the previous 10 years, and every case in which the witness testified as an expert in the previous 4 years, signed by the witness.

The deadlines that set the clock

Every step in a federal case has a date attached, and the ones that govern financial analysis come early.

Stage	Deadline
Discovery conference between counsel	no later than 14 days after arraignment (Rule 16.1(a))
Defense expert disclosure	set by the court, sufficiently before trial for the government to meet the evidence (Rule 16(b)(1)(C)(ii))
Presentence report to the parties	at least 35 days before sentencing (Rule 32(e)(2))
Written objections to the report	within 14 days of receiving it (Rule 32(f)(1))
Report plus addendum of unresolved objections to the court	at least 7 days before sentencing (Rule 32(g))
Final determination of victim losses, when not ascertainable earlier	up to 90 days after sentencing (18 U.S.C. § 3664(d)(5))

At sentencing, Rule 32(i)(3) requires the court to rule on each disputed portion of the presentence report or determine that a ruling is unnecessary. Section 6A1.3 gives the parties an adequate opportunity to present information on any factor reasonably in dispute, and lets the court consider information that would be inadmissible at trial so long as it carries sufficient indicia of reliability. The vehicle for a competing loss analysis exists. It opens on a 14-day clock.

Paying for one when you cannot afford it

Under 18 U.S.C. § 3006A(e)(1), counsel for a person financially unable to obtain investigative, expert or other services necessary for adequate representation may request them in an ex parte application, heard in camera and not revealed without the defendant’s consent. The court authorizes the services on finding they are necessary and that the person cannot pay.

The judiciary’s CJA guidelines set the amounts. For services performed on or after January 1, 2024, counsel may obtain up to $1,000 in services without prior authorization, plus expenses reasonably incurred, subject to later review. The case compensation maximum is $3,000 for each provider in a non-capital case, exclusive of expenses, and it is waivable when the court certifies the excess and the chief judge of the circuit approves it.

Loss at sentencing is not the same as the restitution you will owe

These are two calculations that happen to use overlapping records. The Commission’s primer says so directly: loss calculation is distinct from restitution, and the amounts may not be the same. Credits and exclusions that reduce guidelines loss do not automatically reduce a restitution order.

Under 18 U.S.C. § 3664(e) the burden of demonstrating the amount of the loss sustained by a victim rests on the attorney for the government, and the burden of demonstrating the defendant’s financial resources and dependents’ needs rests on the defendant. If victim losses are not ascertainable 10 days before sentencing, the court sets a date for final determination no more than 90 days after sentencing, and a victim who later discovers further losses has 60 days to petition for an amended order on a showing of good cause.

Forfeiture, the fine, and how the judgment gets collected

Restitution, fines and forfeiture look alike on a judgment sheet and do different jobs. One case can produce four separate obligations, and only the fine is cut for inability to pay.

Obligation	Authority	Paid to
Restitution	18 U.S.C. §§ 3663A, 3664	the victim
Forfeiture	18 U.S.C. § 981(a)(1)(C), 28 U.S.C. § 2461(c)	the United States
Fine	18 U.S.C. §§ 3571, 3572	the United States
Special assessment, $100 a felony count	18 U.S.C. § 3013	the United States

Forfeiture is not restitution under another name. In a fraud case it usually runs on 18 U.S.C. § 981(a)(1)(C), which reaches proceeds traceable to a listed offense or any specified unlawful activity, made available as a criminal forfeiture by 28 U.S.C. § 2461(c), which applies the procedures of 21 U.S.C. § 853. If those proceeds are gone, § 853(p) reaches other property up to their value. Tracing also decides who owes it: in Honeycutt v. United States (2017) the Supreme Court held that forfeiture under § 853(a)(1) “is limited to property the defendant himself actually acquired as the result of the crime,” which forecloses joint and several liability among co-conspirators. Whether that rule reaches § 981(a)(1)(C) has divided the circuits.

The fine ceiling is statutory. Section 3571(b) caps an individual felony fine at $250,000, but § 3571(d) allows twice the gross gain or gross loss where the offense produced either, and § 3572(b) bars a fine to the extent it would impair the ability to pay restitution.

Collection then starts inside the institution. Under 28 C.F.R. § 545.11 a Bureau of Prisons unit team builds a financial plan from the presentence report and the judgment, and payments are applied in priority order: special assessments, restitution, fines and court costs, state or local obligations, then other federal obligations. The minimum is ordinarily $25 a quarter, and declining costs an inmate UNICOR placement and any community-based program. Four women carrying federal restitution orders walked through remission in a November 2023 town hall.

For scale: 4,804 of the 66,662 federal cases reported in fiscal year 2025 involved theft, property destruction and fraud, the median loss was $239,730, and 42 percent of sentences were variances from the guideline range, with downward variances alone accounting for 40 percent of all sentences in this category. The range is a starting point, which is why the number that produces it gets fought over.

The February 2026 session with Anthony Bracco and Brian Sanvidge of Anchin is the practitioner’s version of this page, including a case where a recalculated loss met a government request for nine years and ended at a year and a day. Doug Passon covered what happens around the number at sentencing, and the Women’s White Collar Defense Association panel and David B. Smith covered restitution and forfeiture, including the statutes that let a judge revisit an order years later. On the tax side, where the guideline runs on tax loss rather than on the money that moved, the July 2026 session was with Karen Kelly of Kostelanetz LLP, a former head of the Justice Department’s Tax Division; the recording is posted.