Question: The District of Columbia Lottery Board licensed Soo Young Bae, a Washington, D.C., merchant, to operate a terminal that prints and dispenses lottery tickets for sale. Bae used the terminal to generate tickets with a face value of $525,586, for which he did not pay. The winning tickets among these had a total redemption value of $296,153, of which Bae successfully obtained all but $72,000. Bae pleaded guilty to computer fraud, and the court sentenced him to eighteen months in prison. In sentencing a defendant for fraud, a federal court must make a reasonable estimate of the victim's loss.
The court determined that the value of the loss due to the fraud was $503,650-the market value of the tickets less the commission Bae would have received from the lottery board had he sold those tickets. Bae appealed, arguing that "[a]t the instant any lottery ticket is printed," it is worth whatever value the lottery drawing later assigns to it; that is, losing tickets have no value. Bae thus calculated the loss at $296,153, the value of his winning tickets. Should the U.S. Court of Appeals for the District of Columbia Circuit affirm or reverse Bae's sentence? Why? [United States v. Bae, 250 F.3d 774 (C.A.D.C. 2001)] After you have answered this problem, compare your answer with the sample answer given on the Web site that accompanies this text. Go to www.thomsonedu.com/westbuslaw/ele, select "Chapter 7," and click on "Case Problem with Sample Answer."