United States of America v. Keith Berman, Also Known As Matthew Steinmann

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 1, 2025 Decided July 25, 2025
No. 24-3044
UNITED STATES OF AMERICA,
APPELLEE
v.
KEITH BERMAN, ALSO KNOWN AS MATTHEW STEINMANN,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-cr-00278-1)
José F. Girón argued the cause for appellant. With him
on the briefs were Kevin B. Collins and Jonah Panikar. A. J.
Kramer, Federal Public Defender, entered an appearance.
Ethan A. Sachs, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief was
Jeremy R. Sanders, Assistant Chief and Appellate Counsel.
Before: KATSAS and GARCIA, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge GARCIA.

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GARCIA, Circuit Judge: Keith Berman pleaded guilty to
securities fraud, wire fraud, and obstruction of proceedings in
connection with a scheme to fraudulently increase the share
price of his company, Decision Diagnostics Corp. The district
court sentenced Berman to 84 months’ imprisonment. On
appeal, he challenges the district court’s calculation of the
amount of loss caused by his fraud. We affirm.
I
A
At the onset of the coronavirus pandemic in early 2020,
Keith Berman saw a business opportunity for his struggling
publicly traded medical device company (which we, like the
parties, refer to using its stock ticker, DECN).
In late February, he asked DECN’s South Korean supplier
whether the company’s existing blood glucose monitor sticks
might be used to detect the presence of coronavirus. The
supplier responded that although that capability was
“theoretically possible,” the supplier was “not sure” and
“further study” would be required. App. 250.
On March 3, without further investigation or confirmation
that such a blood test could detect coronavirus, Berman began
issuing press releases claiming that DECN had the “technology
perfected” and that its finger-stick blood test would “be
commercial ready in the summer of 2020.” App. 239.
Through the following months, further press releases claimed
that the blood test could detect the presence of coronavirus in
less than a minute, that DECN had received positive signals of
forthcoming approval from the FDA, and that the company was
projected to sell as many as 525 million test kits in its first year
of production. Following the announcements, the price of
DECN’s stock (which sold over the counter as a penny stock)
rose sharply.

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The Securities and Exchange Commission took notice of
DECN’s announcements and the spikes in its stock price. On
April 23, 2020, the SEC suspended trading of the stock for ten
days pending an investigation. An accompanying one-page
announcement noted “questions regarding the accuracy and
adequacy of information in the marketplace since at least
March 3, 2020,” and highlighted several of the claims in
Berman’s press releases. App. 260. Berman denied all
wrongdoing in a sworn statement, and trading of DECN
resumed. On May 20, the SEC publicly released a document
laying out the basis for the April trading suspension. That
document contained the SEC’s conclusion that while issuing
his earlier press releases, Berman knew the company had no
working prototypes and no FDA approval, and did not know
how many kits DECN could produce.
On July 10, Berman nevertheless released another
statement touting that the finger-stick tests were “currently
producing results,” and stating that the company was also
testing a saliva test for coronavirus. App. 244. In light of
questions over the veracity of DECN’s claims, by at least July
20, the penny-stock trading platform otcmarkets.com added a
caveat emptor (buyer-beware) warning on DECN’s purchase
page.
Throughout that summer, Berman also used an alias to
post more than a thousand messages in an online investor
forum, continuing to promote the blood test and downplaying
the SEC investigation as improper and misinformed. He also
secretly orchestrated three purportedly independent
shareholder letters to the SEC that again called the
investigation into question; an illustrative passage accused the
agency of trying to “destroy Mr. Berman, DECN, and by
extension its shareholders.” Suppl. App. 211.

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B
In December 2020, a federal grand jury in the District of
Columbia indicted Berman. Three years later, he pleaded
guilty to three counts in a superseding indictment: securities
fraud under 15 U.S.C. §§ 78j & 78ff, wire fraud under 18
U.S.C. §§ 1343 & 1342, and obstruction of proceedings under
18 U.S.C. §§ 1505 & 1502. The parties failed to reach a plea
agreement because they did not agree on the value of the loss
caused by Berman’s fraud. The district court held an
adversarial sentencing proceeding on that issue.
In cases concerning fraudulent inflation of securities, the
Sentencing Guidelines instruct courts to determine the “loss”
that “resulted from the offense,” and to use that value to
determine the corresponding Guidelines range. U.S.S.G.
§ 2B1.1(b)(1)(C). Although the Guidelines permit a court to
use “any method” that is “appropriate and practicable” to
calculate loss, they recommend “calculating the difference
between the average price of the security . . . during the period
that the fraud occurred” and the average price “during the 90-
day period after the fraud was disclosed to the market,” and
then “multiplying the difference in average share price by the
number of shares outstanding”—a method commonly called
the modified rescissory method. Id. § 2B1.1 cmt. n.3(E)(ix).
To assure that amount “is a reasonable estimate of the actual
loss attributable” to the fraud, the Guidelines note that a court
“may” subtract from that amount any “significant changes in
value not resulting from the offense,” such as “changes caused
by external market forces.” Id.
The parties here agreed to calculate loss for sentencing
using the modified rescissory method.
After hearing from the parties’ experts, the district court
defined the “period that the fraud occurred” as beginning with
Berman’s first press release about the blood test on March 3,

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2020, and ending on December 17, 2020, the day before the
indictment was unsealed. The average stock price during that
period was 19.54 cents per share. The 90-day period “after the
fraud was disclosed to the market” began the next day
(December 18, when his indictment was unsealed) and ended
on March 17, 2021. The average price during that period was
2.13 cents per share. The difference in those average prices,
17.41 cents per share, multiplied by the 160 million
outstanding shares, yielded a loss amount of $27.8 million.
The district court credited the government expert’s testimony,
based on econometric analysis, that the change in price was not
attributable to any external market conditions. Based on that
loss value, the district court applied a 22-level sentence
enhancement. See id. § 2B1.1(b)(1).
The district court also added a two-level enhancement for
offenses that “involved sophisticated means,” and a four-level
enhancement for offenses that “resulted in substantial financial
hardship to five or more individuals.” Id. § 2B1.1(b)(10),
(b)(2)(B).
The resulting Guidelines range was 168 to 210 months’
imprisonment. After considering the mitigating and
aggravating factors outlined in 18 U.S.C. § 3553, the district
court granted a downward variance and imposed a sentence of
84 months.
II
Berman raises several challenges to the district court’s
calculation of the applicable Sentencing Guidelines range and
his sentence. We have jurisdiction under 18 U.S.C. § 3742(a),
which provides that defendants may seek review of a sentence
if they claim an “incorrect application of the sentencing
guidelines.”

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A
Berman first challenges the district court’s determination
that his fraudulent scheme was “disclosed to the market” when
his indictment was unsealed on December 18, 2020.
The district court concluded that Berman’s fraud was
disclosed by the indictment because it was not until that point
that “the full scope of the Defendant’s misconduct became
known to the public.” App. 510. In particular, the court
found that “a core component” of the charged criminal scheme
was Berman’s ongoing (and not-yet-public) effort throughout
the summer of 2020 “to persuade prospective investors to
ignore the SEC, doubt its credibility and keep investing in
DECN.” App. 511. We review those factual findings for
“clear error” and will “affirm unless we are ‘left with the
definite and firm conviction that a mistake has been
committed.’” United States v. Brockenborrugh, 575 F.3d 726,
737–38 (D.C. Cir. 2009) (quoting United States v. U.S. Gypsum
Co., 333 U.S. 364, 395 (1948)).
The record amply supports the district court’s finding. As
detailed above, through at least August 2020 Berman used
aliases to post more than a thousand comments on investor
message boards seeking to discredit the SEC’s investigation
and encourage further investment. He also used an alias to
orchestrate shareholder letters with similar content to the SEC
in June, July, and August. None of those facts were public
until the indictment was unsealed in December 2020. It was
plainly appropriate for the district court to find that the fraud
had not been “disclosed” until that key part of the ongoing
fraud was made public.
The district court further explained that the “objective
evidence” also supported its determination that the fraud was
disclosed only by the indictment. App. 514. DECN’s stock
price in 2020 roughly followed a bell-curve shape, increasing

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shortly after Berman’s first fraudulent statements and returning
to its original level only after the indictment was unsealed.
See Suppl. App. 362 (government exhibit depicting DECN’s
stock price over time). Before the fraud began, the “stock was
around two cents a share.” App. 514. During the period in
which Berman conducted the charged fraud, the stock traded
“significantly above that true fair market value.” Id. And
after the indictment disclosed the fraud, “the price returned to
that true fair market value of two cents per share.” Id. That
bell-curve, the district court reasoned, provides “further
support” for the December 18 fraud-disclosure date. Id. And
the court reinforced that finding by crediting the government
expert’s econometric analysis, which compared DECN’s price
movements to those of a biotechnology stock index to show
that the price freefall in December was not attributable to
general market conditions. App. 512; see App. 303–07.
Berman responds that the relevant disclosure date was one
of three earlier days: April 23 (when the SEC temporarily
suspended trading), May 20 (when it publicly described the key
information underlying that suspension), or July 20 (when
otcmarkets.com added the buyer-beware warning). Using any
of those dates, Berman argues, would make the loss amount
zero. Appellant’s Brief 19.
Berman fails to show that the district court committed
clear error in identifying December 18 as the date the fraud was
disclosed. Most importantly, Berman barely acknowledges
the district court’s focus on his ongoing, post-May fraudulent
statements aimed at discrediting the SEC’s notices. He offers
no explanation of why the district court erred as a factual matter
in deeming his post-May fraudulent statements a “core
component” of the fraud. Nor can he explain how his
proposed disclosure dates—none of which prompted the
DECN stock price to return to its pre-fraud baseline the way
disclosure of the indictment did—correlate with the evidence

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of stock-price fluctuation. Indeed, his expert’s only attempt to
explain the failure of DECN’s stock price to drop after the SEC
announcements was to guess that investors are “irrational,”
App. 355, which the district court “d[id] not find . . . to be a
credible answer to the Government’s evidence,” App. 513.
For support, Berman relies on cases finding securities
fraud adequately disclosed by SEC announcements similar to
the May 20 announcement here. See Appellant’s Brief 29 n.9
(citing In re Merrill Lynch Auction Rate Sec. Litig., 851 F.
Supp. 2d 512, 527 (S.D.N.Y. 2012); United States v. Peppel,
2011 WL 3608139, at *9 (S.D. Ohio Aug. 16, 2011); United
States v. Ferguson, 584 F. Supp. 2d 447, 450, 454 (D. Conn.
2008)). But given the record in this case, the attempted
comparison falls flat. None of those cases involved ongoing
fraud that continued to discredit the SEC and inflate the stock
price even after the SEC announcements. Indeed, the district
court here explicitly acknowledged that “in the normal case,”
an SEC notice like the May 20 notice here likely would have
sufficed. App. 511. But, the court explained, this was the
“unusual” case because “Berman’s own conduct undercut the
value that [the SEC] announcements might otherwise have
had.” App. 510–11.
Berman also argues that the district court committed two
legal errors in choosing the December date. First, he claims
that the district court erred by starting the disclosure period
only after the fraud was “fully” disclosed, App. 510, even
though the Guidelines do not use the word “fully,” see U.S.S.G.
§ 2B1.1 cmt. n.3(E)(ix) (starting the disclosure period “after
the fraud was disclosed to the market”). The suggestion is that
the crux of Berman’s fraud was “disclosed” well before
December and that the indictment added only minor details.
As the foregoing demonstrates, that is not a fair
characterization of the district court’s detailed ruling. Rather,
the court determined with ample record support that in this case

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a “core component” of the fraud was not disclosed until
December. App. 511.
Second, Berman argues that the district court proceeded as
if the Guidelines require the 90-day disclosure period to begin
immediately upon the conclusion of the fraud. Had it not
made that legal error, Berman contends, it might have
determined that the disclosure period began before the fraud
ended. But the court did no such thing. As discussed above,
the court’s ruling rested on its factual finding that a key portion
of the fraud was not disclosed until December. We therefore
do not agree that the court’s analysis turned on the legal issue
Berman seeks to tee up for our review.
B
Berman’s second challenge is that the district court did not
have sufficient evidence to conclude that his fraud caused the
calculated loss. We review the district court’s application of
the Guidelines’ loss calculation method to the facts with “due
deference,” 18 U.S.C. § 3742(e), which “presumably falls
somewhere between de novo and clearly erroneous” review,
United States v. McCants, 554 F.3d 155, 160 (D.C. Cir. 2009)
(citation modified)). 1 We find no reversible error in the
district court’s loss-causation analysis.
The parties agreed to use the modified rescissory method
suggested by the Guidelines to calculate the “reasonably
foreseeable pecuniary harm that resulted from the offense.”
1 As this court recognized in McCants, although the Supreme
Court has held that the statutory origin of the due deference standard,
18 U.S.C. § 3742(e), is unconstitutional “insofar as it required courts
to reverse sentences falling outside the applicable Sentencing
Guidelines range, we have since held that this section continues to
provide the standard by which we review a district court’s
application of the Sentencing Guidelines.” 554 F.3d at 160 n.3.

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U.S.S.G. § 2B1.1(b)(1)(C)(i). As described above, the
modified rescissory method asks the court to calculate the
difference in the average stock price between the fraud and
disclosure periods, multiply that difference by the number of
outstanding shares, and ensure that the loss attributable to the
change in value was not caused by “external market forces,
such as changed economic circumstances, changed investor
expectations, and new industry-specific or firm-specific facts,
conditions, or events.” Id. § 2B1.1 cmt. n.3(E)(ix). The
modified rescissory method does not contemplate that any
additional proof of causation is necessary to show the fraud
caused the loss; by calculating the change in price, assessing
the number of shares that price change affected, and ensuring
that the change was not caused by external factors, this method
is meant to demonstrate that the fraud satisfies the Guidelines’
causation requirement.
The district court’s application of the modified rescissory
method tracked what the Guidelines suggest. First, the district
court determined as a matter of fact that the fraud period lasted
from March 3, 2020, to December 17, 2020, and that the 90-
day disclosure period began on December 18, 2020, and ended
on March 17, 2021. Next, the district court accepted the
government expert’s calculation of the loss amount, which took
the difference in the average price during those respective
periods (17.41 cents) and multiplied that by 160 million
outstanding shares, yielding a loss value of $27.8 million.
And finally, the district court determined that the changes
in stock price did not result from “external market forces.”
The court credited the government expert’s statistical
determination that “the changes in DECN’s stock price were
not the result of industry-specific fluctuations in the market or
other financial trends.” App. 512. The expert ran a
regression comparing DECN’s price fluctuations to stocks in
the NASDAQ biotechnology index and concluded that the

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“absence of a consistent statistically significant relationship
between” the two indicated that DECN’s stock price “was not
responding to industry-specific news concerning the biotech
industry.” App. 306. The court also noted the “temporal
proximity” between Berman’s fraudulent statements and
spikes in the stock’s price. App. 515. And the court
emphasized that the defense presented no other viable theory
for the stock price’s behavior apart from Berman’s statements.
App. 514. Those factors, the court concluded, further
supported its finding that Berman’s fraudulent actions, not
some other factor, “drove investor demand and thus caused
investor losses.” App. 516.
Berman insists that the record does not support the district
court’s loss calculation. He argues that the government was
required to offer additional evidence that each investor who
was considered in the loss calculation relied specifically on his
fraudulent statements. And the government, he continues, did
not make that showing here. To support his assertion, Berman
looks primarily to the Eleventh Circuit’s decision in United
States v. Stein, 846 F.3d 1135 (11th Cir. 2017).
We are not persuaded. Most directly, Stein did not
involve an application of the modified rescissory method.
Instead, the government in Stein relied on a “buyer’s only”
method, which looked at specific customers who purchased
shares while the fraud was ongoing and compared the price at
which they did so to the value of the shares at the end of the
fraud period. Id. at 1144. Here, by contrast, Berman
specifically agreed to the application of the Guidelines’
suggested method. And as just explained, the district court
applied that method exactly as the Guidelines describe it.
In any event, the government’s evidence met the
evidentiary bar set even in the different context addressed in
Stein. There, the Eleventh Circuit concluded the government

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could show the relevant purchasers relied on the defendant’s
fraudulent statements through circumstantial evidence. The
court observed that “requiring individualized proof of reliance
for each investor is often infeasible or impossible.” Id. at
1153. But it still found the government’s indirect evidence
“far too limited,” because it consisted of only one investor’s
testimony and a handful of general victim impact statements.
Id. at 1154. The government also did not account for
“extrinsic market factors.” Id. at 1145 (citation omitted).
As detailed above, however, the record here is more
extensive. Indeed, following remand, the Eleventh Circuit
upheld a renewed loss calculation that relied on evidence quite
like the evidence the government offered here. That evidence
included expert testimony showing that the stock-price
fluctuations coincided with the fraudulent statements and the
disclosure of the fraud, and a “statistical analysis” showing no
correlation between general market movements and the stock
at issue. See United States v. Stein, 964 F.3d 1313, 1320–21
(11th Cir. 2020).
Berman raises one more attack on the district court’s
causation analysis. He argues that the district court should
have altered the loss amount to account for the possibility that
some investors purchased DECN stock solely because of his
claim that it was developing a distinct saliva-based test in
addition to the blood-based test. Berman’s statements about
the saliva-based test were not charged as fraudulent. So, the
argument goes, any purchases based on claims about the saliva
test should have been excluded from the loss calculation. As
support, Berman points to the July 10, 2020, press release
claiming DECN would provide the new “saliva testing kit
option,” App. 244, and to two victim impact statements that
reference the saliva test as motivating, at least in part, the
victims’ investment decisions.

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The district court rejected that argument on the basis that
any impact on the stock price attributable to the saliva test
could not be disentangled from the charged fraud—it was part
and parcel of the “overall fraud scheme.” App. 519. Berman
fails to show reversible error in that determination. Recall
that, under the Guidelines, “the ‘loss need not be determined
with precision,’ and ‘the court need only make a reasonable
estimate of the loss, given the available information.’” United
States v. Bras, 483 F.3d 103, 112 (D.C. Cir. 2007) (quoting
U.S.S.G. § 2B1.1 cmt. n.3). With that standard in mind, the
district court’s finding that there was no need to adjust the loss
amount to account for the saliva test was reasonable. The only
saliva-test reference that Berman identifies in the record—the
July 10 announcement of that test—illustrates the district
court’s point, because it was embedded in a press release again
proclaiming, falsely, that DECN’s “finger stick kits are
currently producing results.” App. 244. The district court’s
approach also accords with the data recounted above, which
showed the stock price plummeting when the blood-test fraud
was disclosed. Moreover, Berman did not provide the district
court with any reasonable method for deducting investor losses
based on his single saliva-test reference from the losses caused
by Berman’s voluminous blood-test statements. Nor has he
reasonably explained his failure to do so on appeal.2 Against
that backdrop, the possibility that some small portion of
investors relied on the saliva test in making their decision to
invest in DECN does not warrant remand.
2 Berman argues that he cannot be faulted for his failure to
introduce such evidence because the district court excluded evidence
related to the saliva test on relevance grounds. But Berman did not
argue that the saliva test was relevant to any loss calculation or
investor reliance; he argued only that his efforts to develop the saliva
test might speak to whether he had engaged in a “good faith” or
“genuine” effort to develop a functional product. App. 106.

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C
Berman next challenges the district court’s application of
an enhancement for causing “substantial financial hardship to
five or more victims.” U.S.S.G. § 2B1.1(b)(2); see also id.
cmt. n.4(F). The district court found that the victim impact
statements “leave[] no room for serious argument that the
standard [for substantial financial hardship] is not met.” App.
517.
Berman’s argument on this front mirrors his last challenge
to the loss finding: Because some investors may have relied
on the saliva test, the government was required to elicit more
evidence that five or more investors relied specifically on the
charged fraudulent statements. That argument fails for a more
straightforward reason in this context. True, two victims
mentioned the saliva test. But more than five explained that
they had invested in DECN based on Berman’s fraudulent
statements without ever mentioning the saliva test. App. 517–
18. Those facts suffice to support the district court’s
application of the substantial-hardship enhancement.
D
Finally, Berman argues that his sentence was substantively
unreasonable. This claim, however, expressly turns on his
argument that the district court miscalculated the loss caused
by his fraud. Because we find no reversible error in the district
court’s loss-causation analysis, Berman’s substantive
reasonableness challenge fails.
III
For the foregoing reasons, we affirm the district court’s
judgment.
So ordered.

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