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Credit Card Fraud Loss Erroneously Calculated

USA V. RUSLAN KIRILYUK Docket: 19-10447, Opinion Date: April 1, 2022. Defendant was convicted of 28 felony offenses in connection with a fraud conspiracy involving 120,000 American Express Cards. In sentencing Defendant to 27 years’ imprisonment, the district court relied in part on Application Note 3(F)(i) to U.S.S.G. Sec. 2B1.1 (“the Application Note”), which provides that the “loss” amount for the use of counterfeit credit cards must at least $500 per credit card used. Using this multiplier, the district court applied a 22-level enhancement. The Ninth Circuit vacated Defendant’s sentence. Under Stinson v. United States, 508 U.S. 36 (1993), an Application Note is authoritative unless it is “inconsistent with, or a plainly erroneous reading of, that guideline.” Thus, if an Application Note conflicts with the Guidelines, the Guidelines must be given effect over the Application Note. Defendant’s fraud scheme involved charging $15 to $30 per card, resulting in actual losses of $1.4 million. However, the use of the Application Note calculated the loss amount to be $60 million. Here, the Ninth Circuit found that the Application Note’s multiplier rule does not comport with the plain meaning of “loss,” and thus, Defendant’s 22-level enhancement based on the calculated $60 million loss cannot stand. The Ninth Circuit also found that the district court erred in sentencing Defendant to 264 months for each wire and mail fraud count when the maximum statutory penalty was 240 months. #creditcardfraud #conspiracy #applicationnote

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