## Facts

- Jamie Olis worked as a mid-level executive at Dynegy Inc. and participated in “Project Alpha,” a transaction structured to make Dynegy’s financial condition appear stronger to the market.
- Project Alpha was designed to disguise what was economically a loan as operating cash flow or operating income, improving reported cash flow and helping support Dynegy’s stock price.
- The government alleged that the transaction’s true risk allocation and financing features were concealed or misstated so the deal could receive favorable accounting treatment and appear to generate operating cash.
- The scheme was uncovered, prompting investigations and significant market reaction; Dynegy incurred costs associated with the fallout but remained in business.
- A jury convicted Olis of multiple offenses arising from the Project Alpha conduct, including securities fraud, mail fraud, wire fraud, and conspiracy.
- The district court originally sentenced Olis under then-mandatory Federal Sentencing Guidelines to a very long prison term driven largely by a high loss figure based on investor losses reflected in Dynegy’s stock-price drop.
- While Olis’s appeal was pending, the Supreme Court decided *United States v. Booker*, which rendered the Guidelines advisory; the Fifth Circuit held *Booker* applied, affirmed the convictions, vacated the sentence, and remanded for resentencing with a corrected loss analysis.
- On remand, the parties presented testimony and economic analysis directed to separating stock-price movement attributable to the Project Alpha fraud from movement caused by other company news or market forces.

## Issues

1. For Guidelines sentencing in a securities-fraud case, what “loss” amount should be attributed to the defendant when a stock-price decline may reflect both fraud-related disclosures and other unrelated information?
2. After *Booker*, how should the court sentence under an advisory Guidelines framework while applying the 18 U.S.C. § 3553(a) factors to reach a sentence “sufficient, but not greater than necessary”?
3. Given the defendant’s role and motive (boosting the company rather than personal enrichment), what sentence appropriately reflects culpability, deterrence, and comparability with sentences in similar cases?

## Decision

- The district court conducted a renewed loss inquiry consistent with the Fifth Circuit’s remand instructions, focusing on the portion of Dynegy’s stock decline that could reasonably be linked to the fraudulent conduct rather than treating the full decline as offense-caused loss.
- Using the revised loss determination, the court recalculated the advisory Guidelines range, resulting in a substantially lower offense level than at the original sentencing.
- Treating the Guidelines as advisory, the court then weighed the § 3553(a) considerations—seriousness of the offense, deterrence, just punishment, and the defendant’s individual circumstances—and imposed a markedly reduced prison term compared to the original sentence.

## Legal Principles

- In securities-fraud sentencing, a loss figure used for U.S.S.G. § 2B1.1 must be tied to pecuniary harm caused by the fraud; sentencing should not attribute to the defendant stock-price declines driven by other company developments or general market conditions.
- When a sentencing enhancement depends on the magnitude of investor loss, courts may rely on economic analysis to isolate the fraud-related component of a price drop rather than assuming the entire market loss was caused by the charged misstatements.
- After *Booker*, the Sentencing Guidelines are advisory; the court must (1) correctly calculate the advisory Guidelines range and then (2) select a sentence by applying the § 3553(a) factors.
- A post-*Booker* sentence may vary from the advisory range when the court explains, with reference to § 3553(a), why the range does not yield a sentence that fits the defendant’s conduct and culpability.

## Conclusion

*United States v. Olis*, 2006 WL 2716048 (S.D. Tex. Sept. 22, 2006), is the district court’s resentencing decision on remand after *Booker*, in which the court reexamined the securities-fraud loss calculation for Dynegy’s Project Alpha transaction, limited loss to amounts reasonably attributable to the fraud-related disclosure and resulting price movement, recalculated the advisory Guidelines accordingly, and imposed a substantially reduced sentence after considering the statutory factors in 18 U.S.C. § 3553(a).*


United States v. Olis, 2006 WL 2716048 (2006)