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Fake Babe Ruth Card Leads to Extended Prison Sentence for Fraudster

michael mccann
·5 min read
3

Usually in law and in life, you can get in trouble for what you did, not what you might have done in an alternative universe or a different timeline.

A case involving the sale of counterfeit sports trading cards turns that logic on its head.

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Last year, Bryan Kennert, 58, was sentenced to two and half years in prison after selling about $43,000 worth of counterfeit cards. The U.S. Court of Appeals for the Sixth Circuit affirmed Kennert’s sentence on Aug. 3.

Kennert, who sold cards from a leased booth in the Anything and Everything Antique Mall in Muskegon, Mich., opened packs, removed valuable cards and then resealed the packs claiming they were original and unopened. His scheme involved counterfeit cards, including a fake Michael Jordan rookie card that was suspiciously large.

A married couple on the market for rare cards purchased from Kennert. They became dubious in part because Kennert’s prices were well-below market rates. The couple contacted an appraiser and, after confirming the fraud, contacted law enforcement. A grand jury indicted Kennert on eight counts of wire fraud in reflection of eight fraudulent transactions. Kennert pleaded guilty and U.S. District Judge Hala Jarbou sentenced him.

Kennert appealed to the Sixth Circuit, not to say he’s innocent—he pleaded guilty—but to say the sentence is excessive.

Under the U.S. sentencing guidelines manual, Kennert’s sentence is supposed to reflect the amount of “loss” associated with his fraud. The fraud guideline indicates that a loss of $43,000 calls for a sentence of eight to 14 months.

But Kennert’s sentence was based on a much higher loss figure, $1.09 million, which under the guideline calls for a sentence between 27 to 33 months.

There was no actual “loss” of $1.09 million. However, when law enforcement searched Kennert’s home, they found a fake 1916 Babe Ruth card and other counterfeit antique cards that, if they had been genuine, would have been worth $4.36 million. Since Kennert tended to sell his counterfeit cards at 25% the rate of what their real counterparts would be worth, the government decided he’s responsible for a loss of $1.09 million.

Kennert argued this approach doesn’t make sense since he didn’t sell those cards—which were at his home and not booth, and thus didn’t harm anyone.

A three-judge panel on the Sixth Circuit acknowledged that the fraud guideline “nowhere defines the key word, loss.” But the guideline’s official “commentary” says that “loss” means the greater of actual loss or intended loss, with “intended loss” defined as harm the defendant “purposely sought to inflict,” even if the intended harm “would have been impossible or unlikely to occur” (such as in a sting operation where the crime never actually occurs).

The Sixth Circuit stressed that because the Sentencing Commission elected to place the definition of “loss” in the comment section, rather than in the actual guideline, the court will not “automatically defer” to the definition. This is because the Commission can change the comment section largely as it sees fit. It can’t change the guideline without running it by Congress.

Kennert, the Sixth Circuit wrote, maintained that “loss” can only refer to something that occurred—“an actual loss that happened in the real world.” A loss that a person might have intended to cause but that didn’t actually happen is not a loss, Kennert insisted.

In an unfortunate twist of real-world timing for Kennert, the Sixth Circuit last month rejected that same argument in U.S. v. You.

In You, a chemist working for the Coca-Cola Company stole trade secrets to set up a company in China that was financially backed by the Chinese government. Dr. Xiaorong “Shannon” You was sentenced to 14 years in prison for wire fraud, economic conspiracy and other charges stemming from a plot to further the interests of the Chinese Communist Party. You unsuccessfully challenged the severity of the sentence, which was predicated on her “intending” to cause a $122 million loss, as illogically relying on unproven and speculative assumptions about economics and China.

Although the three-judge panel concluded they must follow their own court’s precedent, they hinted the result isn’t terribly fair to Kennert.

“It may well be a stretch to think that someone perusing the Anything and Everything Antique Mall would shell out $1 million for a Babe Ruth card without any due diligence,” the judges tellingly wrote, while swiftly adding “the commentary requires courts to include even intended harms that were unlikely to occur.”

Sixth Circuit Judge Eric Murphy wrote a concurring opinion. He acknowledged his court had no choice but to follow precedent, yet asserted interpreting “loss” as inclusive of losses that didn’t actually occur generates an “implausible” result.

“No speaker versed in the English language would say that ‘the loss’ from a fraudster’s conduct ‘exceeded $6,500’ if the speaker really meant to convey that the fraudster intended—but failed—to cause that loss,” Murphy wrote.

Murphy also rhetorically asked, “Is Bryan Kennert (who merely possessed a fake Babe Ruth card) equally culpable to a defendant who used the same fake card to successfully swindle victims out of $1 million?”

Murphy went on to criticize his court for “reflexively” deferring to commentary “with barely any effort to interpret the guideline.”

Kennert could petition the Sixth Circuit for an en banc appeal, where other Sixth Circuit judges would review the case. If that fails, he can petition the U.S. Supreme Court.

It would be a remarkable turn for a case centering on a fake Babe Ruth card to be heard by the Supreme Court. But U.S. v. Kennert is substantively about something far more important: How long people who commit crimes should go to prison.

Plus, as its recent decision in an IP law case involving a dog toy that parodies Jack Daniel’s whiskey illustrates, the Supreme Court isn’t adverse to answering big questions about the law in cases that involve less-than-essential facts.

Maybe the same will happen for Kennert, who could argue he’s being punished in part for what didn’t happen.

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