Sentencing; “Loss calculation”; USSG § 2B1.1; Application of USSG Application Note 3(E)(v) to calculate the “street price” for counterfeit pills; § 2B1.1, cmt n3(E); Whether Loper Bright Enters v Raimondo prohibited the district court from relying on § 2B1.1’s commentary; United States v Prather; Auer v Robbins; Whether (II) & (III) of 3(E)(v) properly applied to defendant’s conduct; The “rule of lenity”; Application of the “10 or more victims or mass-marketing” enhancement under § 2B1.1(b)(2)(A); Application of the two-level enhancement for an offense involving “the conscious or reckless risk of death or serious bodily injury”; § 2B1.1(b)(16)(A)

The court held that the district court properly applied USSG Application Note 3(E)(v) to calculate loss when sentencing defendant-Wala for drug counterfeiting and conspiracy where the “relevant market” for calculating loss was the street market price the end-user paid and not the estimated loss to the drug manufacturers. It also upheld the application of the enhancements under §§ 2B1.1(b)(2)(A) and (b)(16)(A). Wala pled guilty to conspiracy and substantive counterfeiting for manufacturing and selling “16.1 million counterfeit alprazolam pills on the dark web over a five-year period.” At sentencing, the parties disputed the method for calculating loss. The district court agreed with the government that the relevant market was the “‘illicit market, the street market,’” and that the price the end-user paid was the “appropriate measure” for calculating loss. It applied the definition of “loss” from Application Note 3(E)(v), estimating the street price at $2 per pill. Wala challenged the calculation and the enhancements for 10 or more victims or mass-marketing and the conscious or reckless risk of death or serious bodily injury. He claimed the district court erred by applying Application Note 3(E)(v) instead of the Guidelines’ general definition for loss. The court explained that 3(E) instructs a court to apply “special rules” when assessing loss “in certain cases, including when the defendant’s offense involved an ‘[u]nlawful [m]isrepresentation [s]cheme[].’” The district court “found that Wala triggered subsections (II) and (III)” of Note 3(E)(v). The court rejected Wala’s argument that the Supreme Court’s decision in Loper cast doubt on deference to the Guidelines Commentary, citing Prather, where the court held that Loper had not overruled Auer deference. As to his “zone of ambiguity” argument, it noted there was a lack of “binding case law” supporting Wala’s argument, precluding him from establishing plain error. His argument that (II) and (III) of Application Note 3(E)(v) did not apply to his conduct likewise failed, as did his invocation of the rule of lenity. The court affirmed the district court’s loss amount calculation. It also affirmed the enhancement under § 2B1.1(b)(2)(A), holding that “a victim includes any person who bought Wala’s counterfeit pills under the wrongful impression that they were purchasing legitimate alprazolam pills.” As to the § 2B1.1(b)(16)(A) enhancement, “the district court correctly concluded that Wala’s offense involved a risk of death or seriously bodily injury, and that Wala was aware of and consciously or recklessly disregarded these risks.”