United States v. Ruslan Kirilyuk

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 19-10447

Plaintiff-Appellee,

D.C. No.

v. 2:14-cr-00083-JAM-4

RUSLAN KIRILYUK, OPINION

Defendant-Appellant.

Appeal from the United States District Court

for the Eastern District of California

John A. Mendez, District Judge, Presiding

Argued and Submitted June 18, 2021

San Francisco, California

Filed April 1, 2022

Before: Daniel A. Bress and Patrick J. Bumatay, Circuit

Judges, and Douglas L. Rayes, * District Judge.

Opinion by Judge Bumatay;

Dissent by Judge Bress

*

The Honorable Douglas L. Rayes, United States District Judge for

the District of Arizona, sitting by designation.

2 UNITED STATES V. KIRILYUK

SUMMARY **

Criminal Law

The panel vacated a sentence and remanded for

resentencing in a case in which a jury convicted the

defendant of 28 felonies, the bulk of which were wire and

mail fraud counts, in connection with a complex fraud

conspiracy involving over 120,000 stolen American Express

cards.

The defendant contended that the district court erred in

calculating loss based on Application Note 3(F)(i) to

U.S.S.G. § 2B1.1, which mandates that “loss” for use of

counterfeit credit cards must be calculated at not less than

$500 per credit card used. Although the defendant’s offense

only caused an actual loss of $1.4 million and had an

intended loss of only $3.4 million, the Application Note’s

multiplier skyrocketed the “loss” to nearly $60 million and

led to a 22-level enhancement. While the conspiracy in this

case was designed to charge only $15 to $30 per credit card,

the Application Note deems each loss to be $500. The

defendant contended that Application Note 3(F)(i)’s

mandatory $500-per-card minimum conflicts with the plain

meaning of “loss” under § 2B1.1, and asked this court to find

it non-binding under Stinson v. United States, 508 U.S. 36

(1993). The panel concluded that no Ninth Circuit precedent

forecloses this challenge, that the defendant’s sentencing

objection was enough to preserve de novo review of the

challenge, and that he properly raised the argument on

appeal. On the merits, the panel held that Application Note

**

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

UNITED STATES V. KIRILYUK 3

3(F)(i)’s expansion of the meaning of “loss” is clearly

inconsistent with the language of the Guideline, and operates

as an enhanced punishment rather than an assessment of

“loss” tied to the facts of the case. The panel concluded that

Application Note 3(F)(i) is therefore not binding under

Stinson, which makes clear that the role of the Application

Notes is to explain the Sentencing Guidelines, not enact

policy changes to them; and that the defendant’s 22-level

enhancement therefore cannot stand.

The panel also held that the district court erred in

applying an enhancement for use of an “authentication

feature” under U.S.S.G. § 2B1.1(b)(11)(A)(ii) because the

purported authentication features used here—credit card

numbers, passwords, and bank account numbers—were

issued by American Express or a bank, not an “issuing

authority,” which the Guidelines define as “any government

entity or agency that is authorized to issue identification

documents, means of identification, or authentication

features.”

Although not raised by the defendant, the government

conceded that the district court imposed an illegal sentence,

and committed error that was plain, by imposing a 264-

month sentence on each of the defendant’s wire and mail

fraud counts, where wire and mail fraud carry a maximum

penalty of 240 months’ imprisonment for each count. The

panel wrote that because the district court would have been

free to hand down a shorter sentence had it realized the error,

it would be a miscarriage of justice to give the defendant an

illegal sentence in this case.

The panel remanded for resentencing on an open record.

4 UNITED STATES V. KIRILYUK

In a concurrently filed memorandum disposition, the

panel addressed the defendant’s remaining objections to his

sentence.

Judge Bress dissented from the part of the decision

invalidating the pre-card multiplier. He wrote that the

majority opinion vastly exceeds the powers of a three-judge

panel in overturning circuit precedent—namely, United

States v. Yellowe, 24 F.3d 1110 (9th Cir. 1994), in which this

court rejected a challenge to Sentencing Guidelines

commentary allowing district courts to impose a

presumptive dollar-per-credit-card multiplier for calculating

“loss” enhancements under the Guidelines for certain fraud

offenses.

COUNSEL

Gene D.Vorobyov (argued), San Francisco, California, for

Defendant-Appellant.

Matthew G. Morris (argued), Assistant United States

Attorney; Camil A. Skipper, Appellate Chief; Phillip A.

Talbert, Acting United States Attorney; United States

Attorney’s Office, Sacramento, California; for Plaintiff-

Appellee.

UNITED STATES V. KIRILYUK 5

OPINION

BUMATAY, Circuit Judge:

Ruslan Kirilyuk was sentenced to 27 years’

imprisonment for his part in a complex fraud conspiracy

spanning multiple countries and involving over 120,000

stolen American Express cards. Kirilyuk was charged and

convicted of 28 felonies, the bulk of which were wire and

mail fraud counts. To reach the 27-year sentence, the district

court relied on multiple sentencing enhancements under the

U.S. Sentencing Guidelines (“U.S.S.G.”).

In this opinion, we turn our attention to two of these

enhancements: (1) the calculation of “loss” as $500 per

stolen credit card under U.S.S.G. § 2B1.1(b)(1)(L) and

Application Note 3(F)(i); and (2) the two-level enhancement

for use of an “authentication feature” under U.S.S.G.

§ 2B1.1(b)(11)(A)(ii). We conclude that the district court

erred in applying the enhancements. We also hold that the

district court erred when it imposed a prison term of

264 months for each of the fraud counts—two years above

their 240-month statutory maximum. See 18 U.S.C.

§§ 1341, 1343. We therefore vacate Kirilyuk’s sentence and

remand for resentencing. 1

I.

For three years, Kirilyuk and his associates engaged in a

massive, international fraud scheme. The operation

involved layers of sophistication.

1

In a concurrently filed memorandum disposition, we reject

Kirilyuk’s remaining objections to his sentence.

6 UNITED STATES V. KIRILYUK

First, the conspirators stole account information from

nearly 120,000 American Express credit and debit cards.

Second, the group created dozens of fake online

businesses using stolen identities and opened merchant

accounts for the sham businesses. In setting up these

businesses, the enterprise used identities pilfered from three

Russian nationals who traveled to the United States on

student visas and 220 California high school students whose

transcripts had been stolen.

Third, one of Kirilyuk’s Russian partners used the false

merchant accounts to make fraudulent charges on the stolen

AMEX cards. Typically, the charges were in small amounts,

between $15 and $30, to avoid detection by the

accountholders. The schemers even set up phone lines for

the fake businesses to field complaints from AMEX

customers seeking refunds for the illicit charges. By

refunding the fraudulent charges, they would deter the

customers from notifying AMEX.

Next, after being credited for fraudulent charges, the

conspirators would transfer the funds from the merchant

accounts to nominee bank accounts. They would then

withdraw the money from ATMs, wire the funds overseas,

or make purchases from other companies.

In total, Kirilyuk’s fraud scheme involved more than five

conspirators, over 70 shell companies, over 220 stolen

identities, almost 120,000 fraud victims, and over 190,000

fraudulent transactions, including 84,000 transfers of funds

to fake merchant accounts. Altogether, according to the

Probation Office, Kirilyuk and his associates stole over

$1.4 million and the intended loss was found to be more than

$3.4 million.

UNITED STATES V. KIRILYUK 7

By Fall 2015, the FBI unraveled the fraud scheme and

arrested Kirilyuk and his co-conspirators. Kirilyuk was

indicted on 24 counts of wire fraud, two counts of mail fraud,

and one count of aggravated identity theft. See 18 U.S.C.

§§ 1028(a)(1), 1341, 1343. Following his arrest and release

on bond, Kirilyuk failed to appear for his February 2017 trial

and the government added a failure-to-appear charge after he

was apprehended in Mexico City, Mexico. See 18 U.S.C.

§ 3146(a)(1), (b)(1)(A)(i). A jury convicted Kirilyuk on all

28 counts.

The presentence investigation report (“PSR”)

determined that Kirilyuk’s offense level reached the

maximum of 43. As part of its calculations, the Probation

Office recommended several sentencing enhancements and

adjustments, including:

• +22 levels for the 119,913 AMEX credit card

numbers used, multiplied by $500 each, resulting in

a loss of $59,956,500, U.S.S.G. § 2B1.1(b)(1)(L) &

cmt. n.3(F)(i).

• +2 levels for ten or more victims, U.S.S.G.

§ 2B1.1(b)(2)(A)(i);

• +2 levels for sophisticated means, U.S.S.G.

§ 2B1.1(b)(10)(C);

• +2 levels for the use of an authentication feature,

U.S.S.G. § 2B1.1(b)(11)(A)(ii);

• +4 levels for aggravated role, U.S.S.G. § 3B1.1(a);

• +2 levels for obstruction of justice, U.S.S.G.

§ 3C1.1; and

8 UNITED STATES V. KIRILYUK

• +3 levels for commission of an offense while on

pretrial release, U.S.S.G. § 3C1.3.

The resulting Guideline range for Kirilyuk’s offense level

was life, limited by the charges’ maximum terms of

imprisonment. The maximum term of imprisonment for

both wire and mail fraud is 20 years for each count. The

identify theft and failure-to-appear counts have maximum

terms of two years and ten years, respectively. The district

court accepted the PSR’s offense level recommendations

and sentenced Kirilyuk to 324 months’ total imprisonment.

The district court’s sentence was based on a 264-month,

concurrent sentence on each of the wire and mail fraud

counts, and consecutive terms of 24 months on the

aggravated identity theft count and 36 months on the failure-

to-appear count.

On appeal, Kirilyuk only challenges his sentence. We

review the district court’s interpretation of the Sentencing

Guidelines de novo, its application of the Guidelines to the

facts of the case for abuse of discretion, and its factual

findings for clear error. United States v. Gasca-Ruiz,

852 F.3d 1167, 1170 (9th Cir. 2017) (en banc). We review

whether a sentence exceeds the maximum term of

imprisonment de novo. United States v. Gementera,

379 F.3d 596, 612 n.5 (9th Cir. 2004).

II.

Kirilyuk appeals his sentence on several grounds. In this

opinion, we tackle three issues: (1) whether the district court

erred in calculating loss based on a $500-per-card multiplier

under Application Note 3(F)(i) to § 2B1.1; (2) whether the

district court properly applied the “authentication feature”

enhancement under § 2B1.1(b)(11)(A)(ii); and (3) whether

the district court imposed an illegal sentence.

UNITED STATES V. KIRILYUK 9

We find merit in all three claims, vacate the sentence,

and remand for resentencing.

A. Section 2B1.1’s $500-Per-Card Multiplier

We first address Kirilyuk’s challenge to the district

court’s application of Application Note 3(F)(i) of § 2B1.1.

The Application Note mandates that “loss” for use of

“[c]ounterfeit [c]redit [c]ards” must be calculated at “not less

than $500” per credit card used. See U.S.S.G. § 2B1.1 cmt.

n.3(F)(i). The effect of the Application Note was enormous.

Although Kirilyuk’s offense only caused an actual loss of

$1.4 million and had an intended loss of only $3.4 million,

the Application Note’s multiplier skyrocketed the “loss” to

nearly $60 million and led to a 22-level enhancement. See

U.S.S.G. § 2B1.1(b)(1)(L).

Kirilyuk contends that Application Note 3(F)(i)’s

mandatory $500-per-card minimum conflicts with the plain

meaning of “loss” under § 2B1.1, and he asks us to find it

non-binding under Stinson v. United States, 508 U.S. 36, 38

(1993). We agree and do not consider the Application Note

authoritative.

1.

Before turning to the merits of Kirilyuk’s claim, we

address two important housekeeping issues. First, we look

to see whether our prior precedent forecloses Kirilyuk’s

challenge to Application Note 3(F)(i). Second, we

determine whether Kirilyuk properly raised this argument on

appeal.

On the question of precedent, we conclude that no Ninth

Circuit case has considered whether Application Note

3(F)(i)’s $500-per-card multiplier conflicts with the

10 UNITED STATES V. KIRILYUK

meaning of “loss” in § 2B1.1. So it remains an open

question in our circuit. To be sure, in two published cases,

we interpreted and applied Application Note 3(F)(i) or its

predecessor. See United States v. Yellowe, 24 F.3d 1110 (9th

Cir. 1994); United States v. Gainza, 982 F.3d 762 (9th Cir.

2020). But neither case analyzed the Note’s validity under

Stinson, so neither case binds us on this question.

Prior precedent that does not “squarely address” a

particular issue does not bind later panels on the question.

Brecht v. Abrahamson, 507 U.S. 619, 631 (1993). As we

have repeatedly stated, “[q]uestions which merely lurk in the

record, neither brought to the attention of the court nor ruled

upon, are not to be considered as having been so decided as

to constitute precedents.” United States v. Ped, 943 F.3d

427, 434 (9th Cir. 2019) (simplified). Thus, cases are “not

precedential for propositions not considered,” United States

v. Pepe, 895 F.3d 679, 688 (9th Cir. 2018), or for matters

that are “simply assumed,” Sonner v. Premier Nutrition

Corp., 971 F.3d 834, 842 n.5 (9th Cir. 2020). Indeed, if a

prior case does not “raise or consider the implications” of a

legal argument, it does “not constrain our analysis.” United

States v. Cassel, 408 F.3d 622, 633 n.9 (9th Cir. 2005).

In Yellowe, we considered the applicability of

Application Note 3(F)(i)’s $500-per-card multiplier’s

predecessor, former Application Note 4’s $100-per-card

multiplier, in a particular context. 2 In his briefing, Yellowe

2

Former Application Note 4 provided that “loss includes any

unauthorized charges made with stolen credit cards, but in no event less

than $100 per card.” U.S.S.G. § 2B1.1 cmt. n.4 (1993). See United

States v. King, 861 F.3d 692, 694 n.1 (7th Cir. 2017) (noting that in 2000,

the Sentencing Commission moved Application Note 4 to Application

Note 3(F)(i) and changed the minimum loss amount from $100 to $500

per card).

UNITED STATES V. KIRILYUK 11

argued that the Application Note’s multiplier only applied to

offenses involving stolen credit cards, not to cases merely

using credit card numbers. When only credit card numbers

are used, Yellowe asserted that another Application Note—

former Application Note 7—required the court to determine

“loss” using “intended loss.” See U.S.S.G. § 2F1.1 cmt. n.7

(1993). Yellowe contended that the multiplier’s use of a

“presumed loss” figure conflicted with the plain meaning of

Note 7’s “intended loss” requirement. Yellowe also argued

that, even if the multiplier applied to credit card numbers,

the focus should be on his “knowledge and intentions” since

“intended loss” was the goal of the Guidelines and the

district court should have applied his estimate of the likely

return on the fraud. We rejected each contention in Yellowe.

Right off the bat, the first sentence of Yellowe

acknowledged that the central question in that case was

narrow: “This appeal requires us to decide whether

Application Note 4 to U.S.S.G. § 2B1.1 . . . applies to

unauthorized use of credit card numbers as well as the card

itself.” 24 F.3d at 1111. We held that the $100-per-card

multiplier applied equally to credit card numbers and to

“unauthorized charges made with the plastic itself.” Id. at

1113. Thus, “loss under Application Note 4 to § 2B1.1

includes any unauthorized charges made with stolen credit

card numbers or with physical credit cards.” Id. Second, we

observed that the multiplier set a “presumed loss” for credit

card fraud, “setting a floor beneath which neither ‘actual’ nor

‘intended’ loss may fall.” Id. Given this floor, we concluded

that Yellowe’s “subjective intent” in the offense was

“immaterial.” Id. Finally, we noted that former Application

Note 4 said “nothing about probabilities” of success of the

fraud and so it wasn’t clearly erroneous for the district court

to disregard Yellowe’s “estimate of the likely return” of his

fraud. Id. Those were the precise holdings of Yellowe.

12 UNITED STATES V. KIRILYUK

Yellowe never argued that—and we never analyzed

whether—the $100-per-card multiplier was consistent with

the plain meaning of “loss” under Stinson. That is the

question we face today. 3

Gainza is even further afield from the issue in this case.

There, we reviewed “[t]he pivotal question” of how to

determine “how many account numbers [were] obtained” for

Application Note 3(F)(i) purposes. 982 F.3d at 765. We

found the district court’s finding on the quantity of account

numbers clearly erroneous. Id. In doing so, we considered

the various types of proof permissible to make the numerical

determination and observed such a calculation didn’t require

“mathematical precision.” Id. Nowhere in that decision did

we address whether the $500-per-card multiplier aligned

with the text of § 2B1.1. 4

3

Our fine dissenting colleague misunderstands Kirilyuk’s argument

on appeal to conclude that Yellowe governs the matter. Contrary to the

dissent’s characterization, Kirilyuk is not arguing that “the focus” of the

loss inquiry “should be on his knowledge and intentions” since “intended

loss” is the “goal of the guideline.” Dissent 29–30. Rather, Kirilyuk

argues that the Application Note’s use of a $500-per-card multiplier to

determine his offense level conflicts with the plain meaning of “loss” in

§ 2B1.1. Under Stinson, if an Application Note “is inconsistent with”

the Guidelines, we must follow the Guidelines. 508 U.S. at 38.

4

The government cites no other published Ninth Circuit decision

that purports to bind us on Kirilyuk’s argument. We note that several

unpublished decisions of this court, including that of Kirilyuk’s co-

conspirator, Mihran Melkonyan, have also applied the $500 multiplier.

But none of these cases analyzed whether the multiplier conflicts with

the plain meaning of “loss.” See, e.g., United States v. Melkonyan,

831 F. App’x 319, 319–20 & n.1 (9th Cir. 2020) (unpublished); United

States v. Chew, 804 F. App’x 492, 494–95 (9th Cir. 2020) (unpublished);

United States v. Gaussiran, 787 F. App’x 458, 460 (9th Cir. 2019)

(unpublished); United States v. Nguyen, 543 F. App’x 715, 716 (9th Cir.

UNITED STATES V. KIRILYUK 13

So the Stinson issue was neither “brought to the attention

of the court nor ruled upon” in Yellowe, Gainza, or any other

published Ninth Circuit opinion. Ped, 943 F.3d at 434

(simplified). As no prior panel has “squarely addressed” the

issue, we may address its merits. Brecht, 507 U.S. at 631.

Even if precedent doesn’t foreclose reaching the merits,

the government still contends that Kirilyuk forfeited his

Stinson challenge by not raising it in the district court. This

is inaccurate. “[I]t is claims that are deemed waived or

forfeited, not arguments.” United States v. Lloyd, 807 F.3d

1128, 1174–75 (9th Cir. 2015) (simplified). Before the

district court, Kirilyuk specifically objected to the

applicability of Application Note 3(F)(1) as “arbitrary,”

“artificially high,” and “contrary to relevant case law and

concepts of justice.” “Once a federal claim is properly

presented, a party can make any argument in support of that

claim; parties are not limited to the precise arguments they

made below.” Id. at 1175 (simplified). Thus, Kirilyuk’s

sentencing objection was enough to preserve our de novo

review of his Stinson challenge.

Finally, the government argues we should not reach the

Stinson issue because Kirilyuk didn’t raise it until his reply

brief. It is true that an appellant generally waives any

argument not raised in the opening brief. See Friends of

Yosemite Valley v. Kempthorne, 520 F.3d 1024, 1033 (9th

Cir. 2008). But we’ve recognized two exceptions to that

2013) (unpublished); United States v. Levine, 87 F. App’x 44, 45 (9th

Cir. 2004) (unpublished). Contrary to the dissent’s suggestion,

Melkonyan did not frame his Stinson challenge as Kirilyuk did.

Dissent 37. The only mention of Stinson in Melkonyan’s briefing was

to note that the $500-per-card multiplier conflicted with Application

Notes 3(A) and (C)—not that the multiplier is inconsistent with the

meaning of “loss.”

14 UNITED STATES V. KIRILYUK

rule: (1) when failure to consider the argument would lead

to “manifest injustice,” and (2) when the “opposing party

will not suffer prejudice.” Hall v. City of Los Angeles,

697 F.3d 1059, 1071 (9th Cir. 2012). Both exceptions apply

here. First, Application Note 3(F)(1) boosted Kirilyuk’s

base offense level—from +16 to +22, see U.S.S.G.

§ 2B1.1(b)(1)(I), (L), significantly increasing his sentencing

range and raising a concern for a manifest injustice. Second,

both parties had ample opportunity to address this question

in supplemental briefing and so we see no prejudice to the

government. We thus exercise our discretion to consider

Kirilyuk’s Stinson argument and turn to the merits.

2.

As we’ve recently observed, “Application Notes are not

formally part of the Guidelines, but serve to ‘interpret[]’ and

‘explain[]’ the Guidelines for district courts.” United States

v. Prien-Pinto, 917 F.3d 1155, 1157 (9th Cir. 2019) (quoting

Stinson, 508 U.S. at 38). The U.S. Sentencing Commission

drafts both the Guidelines and Application Notes. Id. As

Application Notes are based on the Commission’s

“particular area of concern and expertise” and “represent the

most accurate indications of how the Commission deems

that the guidelines should be applied,” they are generally

binding on federal courts. Stinson, 508 U.S. at 45.

But that is not the end of the story. There’s an important

distinction between the Guidelines and Application Notes.

That’s because Congress too has a role over the Guidelines.

Id. at 44. Congress charged the Commission with

promulgating the Guidelines and retains the right to review

the Guidelines. Id. at 44–45. So any amendment to the

Guidelines must be submitted to Congress for a six-month

period of review, during which time Congress can “modify

or disapprove them.” Id. at 41. By contrast, “Congress lacks

UNITED STATES V. KIRILYUK 15

the power to modify or disapprove of Application Notes,”

which the Commission has unbridled discretion to issue.

Prien-Pinto, 917 F.3d at 1157.

Given this difference, the Supreme Court has told us that

there is a limit to the binding nature of the Application Notes.

Stinson says that an Application Note “that interprets or

explains a guideline is authoritative unless it . . . is

inconsistent with, or a plainly erroneous reading of, that

guideline.” Id. (quoting Stinson, 508 U.S. at 40). So, “we

ascribe somewhat less legal weight to the Application Notes

than to the Guidelines proper: if the Guideline and

Application Note are inconsistent, the Guideline prevails.”

Id.

We’ve been “troubled” by the Commission’s prior

attempts to use its interpretive authority to improperly

change the scope of a Guideline provision. See, e.g., United

States v. Crum, 934 F.3d 963, 966 (9th Cir. 2019). And

multiple times, we’ve found Application Notes non-binding

for conflicting with the Guidelines. For example, we’ve

applied Stinson to reject an Application Note that altered the

“temporal restriction” imposed by the “language of the

Guideline.” United States v. Rising Sun, 522 F.3d 989, 996

(9th Cir. 2008) (holding that an Application Note can’t

expand an enhancement for obstruction of justice “during”

an investigation to include conduct taking place before an

investigation). We’ve also ruled that the Guidelines

commentary need not be followed when it establishes a

“narrowing” construction not “found in the Guideline text.”

United States v. Lambert, 498 F.3d 963, 971 (9th Cir. 2007).

Lastly, we’ve determined that an Application Note can’t

render a part of the Guidelines “meaningless.” United States

v. Powell, 6 F.3d 611, 614 (9th Cir. 1993).

16 UNITED STATES V. KIRILYUK

With this legal background, we turn to Application Note

3(F)(i)’s $500-per-card multiplier. Section 2B1.1 generally

applies to crimes involving theft, stolen property, fraud, and

counterfeiting. U.S.S.G. § 2B1.1. The offense level of

§ 2B1.1 is determined in large part by the crime’s “loss”

amount. As we’ve explained, the Guideline “provide[s] for

graduated increases to the base offense level depending on

the amount of loss caused by the crime.” Gainza, 982 F.3d

at 764. Subsection (b)(1) of § 2B1.1 establishes a table that

increases the base offense by commensurate levels of loss

“[i]f the loss exceed[s] $6,500[.]” U.S.S.G. § 2B1.1(b)(1).

Application Note 3(F) provides for “special rules” to “be

used to assist in determining loss.” Id. cmt. n.3(F). In

particular, it provides that in a case involving stolen or

counterfeit credit cards, “loss includes any unauthorized

charges made with the [credit cards] and shall be not less

than $500 per [credit card].” Id. cmt. n.3(F)(i). In other

words, Note 3(F)(i) creates a rigid, fictional $500 minimum

loss amount per credit card—no matter the facts of the

particular case.

The question here is simple: Is Note 3(F)(i)’s “special

rule” for calculating loss by using a minimum $500-per-card

multiplier consistent with the plain meaning of “loss”? We

hold that it is not.

To begin, § 2B1.1 does not define “loss.” 5 In

interpreting the Guidelines, we apply the ordinary tools of

5

Commentary to § 2B1.1, however, does define “loss.” It states that

“loss is the greater of actual loss or intended loss,” U.S.S.G. § 2B1.1 cmt.

n.3(A), with “actual loss” being “the reasonably foreseeable pecuniary

harm that resulted from the offense,” id. cmt. n.3(A)(i), and “intended

loss” consisting of “the pecuniary harm that the defendant purposely

sought to inflict,” id. cmt. n.3(A)(ii). Given our ruling under Stinson, we

UNITED STATES V. KIRILYUK 17

statutory interpretation and look to the plain meaning of its

terms. United States v. Turnipseed, 159 F.3d 383, 387 (9th

Cir. 1998). Such tools include “consult[ing] dictionary

definitions, which we trust to capture the common

contemporary understandings of the word.” United States v.

Flores, 729 F.3d 910, 914 (9th Cir. 2013).

As the Sixth Circuit recently showed, a review of

dictionaries reveals that “loss” can have a range of

meanings:

One dictionary defines the word to mean,

among other things, the “amount of

something lost” or the “harm or suffering

caused by losing or being lost.” American

Heritage Dictionary of the English Language

1063 (3d ed. 1992). Another says it can mean

“the damage, trouble, disadvantage, [or]

deprivation . . . caused by losing something”

or “the person, thing, or amount lost.”

Webster’s New World College Dictionary

799 (3d ed. 1996). A third defines it as “the

being deprived of, or the failure to keep (a

possession, appurtenance, right, quality,

faculty, or the like),” the “[d]imunition of

one’s possessions or advantages,” or the

“detriment or disadvantage involved in being

deprived of something[.]” 9 Oxford English

Dictionary 37 (2d ed. 1989).

United States v. Riccardi, 989 F.3d 476, 486 (6th Cir. 2021).

need not reach Kirilyuk’s alternative argument that Application Note

3(F)(i) conflicts with the Commentary’s definitions.

18 UNITED STATES V. KIRILYUK

Though dictionary definitions for “loss” may vary, they

make one thing clear: “No reasonable person would define

the ‘loss’ from a stolen [credit] card as an automatic $500”

rather than a fact-specific amount. Id. Instead, § 2B1.1 is

driven by “the amount of loss caused by the crime.” Gainza,

982 F.3d at 764 (emphasis added). So “loss” cannot mean a

pre-determined, contrived amount with no connection to the

crime committed, even if it is based on the Commission’s

“research and data.” See U.S.S.G. amend. 596 (Nov. 2000).

Application Note (3)(F)(i) thus doesn’t illuminate the

meaning of “loss,” but modifies it. Yet “Stinson requires that

commentary interpret the guidelines, not contradict or add to

them.” Riccardi, 989 F.3d at 493 (Nalbandian, J.,

concurring). 6

This case illustrates the egregious problem with the

Application Note’s expansion of the meaning of “loss.” As

determined by the Probation Office, Kirilyuk’s conspiracy

involved $1.4 million in actual losses or $3.4 million in

intended losses. Applying the $500-per-card multiplier

balloons the “loss” to $60 million—17 times greater than the

intended loss. While the conspiracy was designed to charge

only $15 to $30 per credit card, the Application Note asks us

to deem each loss to be $500. Application Note 3(F)(i) thus

operates as an enhanced punishment, rather than an

assessment of “loss” tied to the facts of the case. But Stinson

makes clear that the role of the Application Notes is to

explain the Guidelines, not enact policy changes to them.

6

Our dissenting colleague claims that “loss” can also mean “a

presumptive dollar amount” so long as it is “intended reasonably to

estimate the pecuniary harm resulting from a particular offense.”

Dissent 43. But as a matter of plain meaning, that is incorrect, and the

dissent provides no support for this contention. When deciding such

important matters, we should rely on more than ipse dixit.

UNITED STATES V. KIRILYUK 19

We thus hold that Application Note 3(F)(i)’s expansion of

the meaning of “loss” is “clearly inconsistent with the

language of the Guideline” and is not binding under Stinson.

Rising Sun, 522 F.3d at 996. 7

With this holding, we align ourselves with the Sixth

Circuit—the only other court to consider this issue. In

Riccardi, 989 F.3d 476, the majority of the court held that

Application Note 3(F)(i) was not binding, though by

applying the narrower deference set out in Kisor v. Wilkie,

139 S. Ct. 2400 (2019). We do not express a view on that

analysis. Instead, our reasoning tracks with Judge

Nalbandian’s Riccardi concurrence, which relied on Stinson

to conclude that “[a]scribing a certain number to ‘loss’ is not

a definition.” Id. at 493 (Nalbandian, J., concurring). We

thus follow our general path of “not creat[ing] a direct

conflict with other circuits” in resolving this issue. United

7

The government argues that we should ignore these concerns

because the Commission was only responding to a Congressional

directive in amending the Application Note. See U.S.S.G. amend. 596

(Nov. 2000) (noting that the Commission increased the multiplier to

$500 after Congress enacted § 2 of the Wireless Telephone Protection

Act, Pub. L. 105-172). But we decline to create an exception to Stinson

based on the Commission’s response to a Congressional directive. There

may be good reason for the $500-per-card multiplier, but the

Commission could put it on firmer ground by adding it to the text of

§ 2B1.1 itself (as it has with the presumed loss rules of § 2T1.1(c)(1) and

(2)). Indeed, as it stands, nothing prevents the Commission from

amending the multiplier to a low of $1 or a high of $1 million in the next

edition of the Guidelines—all with no say by Congress. Lastly,

Application Note 21(C)’s “Downward Departure” safety valve doesn’t

save the improper expansion of “loss” under Application Note 3(F)(i), as

the government argues. Just because a district court has the discretion to

lessen the sting of Note 3(F)(i)’s enhanced punishment, that does not

make it consistent with the Guidelines under Stinson.

20 UNITED STATES V. KIRILYUK

States v. Cuevas-Lopez, 934 F.3d 1056, 1067 (9th Cir. 2019)

(simplified).

Because Application Note 3(F)(i) contorts the meaning

of “loss” to equal “$500” in credit card cases, we hold that it

is not binding and that Kirilyuk’s 22-level enhancement

cannot stand. 8

B. Section 2B1.1’s Authentication Feature

Enhancement

We next turn to the enhancement for use of an

“authentication feature” under § 2B1.1(b)(11)(A)(ii). We

hold that the district court erred in imposing that

enhancement because the purported authentication features

used here were issued by American Express or a bank, not

an “issuing authority” as defined by the Guidelines.

Section 2B1.1(b)(11)(A)(ii) provides for a two-level

increase “[i]f the offense involved . . . the possession or use

of any . . . authentication feature.” The relevant application

note defines “authentication feature” as the term is used in

18 U.S.C. § 1028(d)(1). U.S.S.G. § 2B1.1 cmt. n.10(A).

That provision defines “authentication feature” as:

[A]ny hologram, watermark, certification,

symbol, code, image, sequence of numbers or

letters, or other feature that either

8

The dissent warns that our decision will be “far-reaching and

destabilizing.” Dissent 58. First, we disagree that our decision is so

earthshattering. As we’ve said, the Commission need only put the $500-

per-card multiplier in the Guidelines, rather than in the commentary, to

protect it from Stinson scrutiny. Second, even if the dissent is correct,

our duty as judges is to apply the law regardless of any disfavored

consequences.

UNITED STATES V. KIRILYUK 21

individually or in combination with another

feature is used by the issuing authority on an

identification document, document-making

implement, or means of identification to

determine if the document is counterfeit,

altered, or otherwise falsified.

18 U.S.C. § 1028(d)(1) (emphasis added). “Issuing

authority,” in turn, is defined as “any governmental entity or

agency that is authorized to issue identification documents,

means of identification, or authentication features.” Id.

§ 1028(d)(6)(A).

The district court applied the enhancement based on the

PSR’s reasoning that “credit card numbers, passwords, and

bank account[] numbers” involved in the scheme constituted

authentication features. But the issuers of these

authentication features—either American Express or another

private financial institution—do not fit within the definition

of “issuing authority.” Cf. United States v. Sardariani,

754 F.3d 1118, 1121 (9th Cir. 2014) (“issuing authority”

includes a notary public, who takes “actions . . . based upon

the authority of the state”). Here, the government does not

allege that American Express issued the credit card numbers,

passwords, and bank account numbers “based upon the

authority of the state” or any other government entity. Id.

So they do not constitute a “governmental entity or agency.”

18 U.S.C. § 1028(d)(6). It was thus improper for the district

court to apply the enhancement based on the rationale

presented in the PSR.

The government points out that Kirilyuk’s scheme also

involved stolen social security numbers, drivers’ licenses,

and material from public school transcripts. Though true,

the government’s argument does not carry the day because

it is not apparent that the district court relied on these facts

22 UNITED STATES V. KIRILYUK

to impose the enhancement. On remand, the government is

free to re-argue for the authentication feature enhancement

on these or any other grounds supported by the record. 9

C. Illegal Sentence

Although not raised by Kirilyuk, the government

commendably concedes that the district court imposed an

illegal sentence by imposing a 264-month sentence on each

of Kirilyuk’s wire and mail fraud counts. Both wire and mail

fraud carry a maximum penalty of 240 months’

imprisonment for each count. See 18 U.S.C. § 1343 (wire

fraud); 18 U.S.C. § 1341 (mail fraud). So the government is

right that the district court’s sentence of 264 months per

count was illegal. See United States v. Grimaldo, 993 F.3d

1077, 1083 (9th Cir. 2021) (“An illegal sentence is one in

excess of the permissible statutory penalty for [a] crime.”

(simplified)).

Yet since Kirilyuk failed to raise this issue himself in the

district court, we must review whether the illegal sentence

constitutes plain error. United States v. Hayat, 710 F.3d 875,

895 (9th Cir. 2013). Under the plain-error standard, relief

may be granted only when there was: (1) an error; (2) that

was plain; (3) that affected the defendant’s substantial rights;

and (4) the error seriously affects the fairness, integrity, or

public reputation of judicial proceedings. Id. (simplified).

The government admits that the illegal sentence was

plain error, satisfying the first two prongs of plain-error

9

Because we hold the district court erroneously imposed the

authentication feature enhancement, we do not address Kirilyuk’s

alternative argument that the enhancement also constituted

impermissible double-counting under Application Note 2 of § 2B1.6.

Kirilyuk may raise that argument, as appropriate, at resentencing.

UNITED STATES V. KIRILYUK 23

review. Once again, we agree with the government. We

have held that the “[i]mposition of a sentence exceeding a

statutory maximum constitutes plain error.” Grimaldo,

993 F.3d at 1083 (simplified).

The government instead counters that Kirilyuk cannot

carry his burden under the last two prongs of plain-error

review because he was convicted of multiple fraud counts

that could be stacked consecutively to impose the district

court’s total sentence of 264 months. In other words, the

district court could have sentenced Kirilyuk to the statutory

maximum of 240 months on 25 of his 26 fraud convictions

with a 24-month consecutive sentence on the 26th count—

totaling 264 months imprisonment.

We disagree. Even if the district court could restructure

Kirilyuk’s sentence to reach the same result, we decline to

decide that for the district court. Kirilyuk cogently argues

that the district court may have set a lower sentence had it

realized that the maximum sentence on the fraud counts was

240 months. This is especially true now that we are vacating

Kirilyuk’s sentence based on the error in imposing two other

enhancements. As we have said, we should “try to avoid”

ruling in a manner that leaves “everyone . . . wonder[ing]

about whether the sentencing court might have acted

differently.” United States v. Ameline, 409 F.3d 1073, 1081

(9th Cir. 2005).

The government relies on two cases with limited

applicability here. See United States v. Buckland, 289 F.3d

558 (9th Cir. 2002) (en banc); United States v. Kentz,

251 F.3d 835 (9th Cir. 2001). In those cases, we affirmed

illegal sentences because “the court could have imposed the

sentences on certain counts to run consecutive to one

another, there can’t possibly be plain error that requires

resentencing.” Kentz, 251 F.3d at 843; see also Buckland,

24 UNITED STATES V. KIRILYUK

289 F.3d at 569–70. But both cases were decided before

United States v. Booker, 543 U.S. 220 (2005), when it was

mandatory that district courts apply the Guidelines. Pre-

Booker, the Guidelines would have required the district court

to impose consecutive sentences to reach the total proper

punishment under the Guidelines if it exceeded the statutory

maximum on a single count. See Buckland, 289 F.3d at 572

(citing U.S.S.G. § 5G1.2(d)). 10

Today, however, the district court would have been free

to hand down a shorter sentence had it realized the error in

the imposed sentence. Thus, it would be “a miscarriage of

justice to give [Kirilyuk] an illegal sentence” in this case,

United States v. Schopp, 938 F.3d 1053, 1069 (9th Cir.

2019), and we vacate and remand.

III.

The district court erred when it imposed a 22-level

enhancement based on the $500-per-card multiplier, applied

the two-level enhancement for use of an authentication

feature, and handed down an illegal sentence. We vacate

Kirilyuk’s sentence and remand for resentencing on an open

record.

VACATED and REMANDED.

10

At the time of Buckland, § 5G1.2(d) provided, “[i]f the sentence

imposed on the count carrying the highest statutory maximum is less than

the total punishment, then the sentence imposed on one or more of the

other counts shall run consecutively, but only to the extent necessary to

produce a combined sentence equal to the total punishment.” U.S.S.G.

§ 5G1.2(d) (2001).

UNITED STATES V. KIRILYUK 25

BRESS, Circuit Judge, dissenting:

I respectfully dissent because the majority opinion vastly

exceeds the powers of a three-judge panel in overturning

circuit precedent that has been the established law of our

western states for nearly three decades. In United States v.

Yellowe, 24 F.3d 1110 (9th Cir. 1994), we rejected a

challenge to Sentencing Guidelines commentary allowing

district courts to impose a presumptive dollar-per-credit-

card multiplier (then $100, now $500) for calculating “loss”

enhancements under the Guidelines for certain fraud

offenses. In doing so, we held that courts could impose this

loss amount even if a defendant’s “actual” or “intended” loss

was lower. Since Yellowe, we have repeatedly upheld

district courts’ application of the per-card multiplier. We

recently did so in the case of this defendant’s own co-

defendant, for his role in the very same credit-card fraud

scheme.

Yet today the majority invalidates the per-card

multiplier, even though there has been no intervening change

in the law since Yellowe. Instead, the majority effectively

concludes that our past cases were all wrongly decided and

credits what is merely a re-stated version of the same

argument we rejected in Yellowe. Under today’s decision,

Yellowe and many other cases should have come out the

other way. Through this serious over-extension, the majority

contravenes the fundamental principle that if we think circuit

precedent should be revisited, we must engage the en banc

process, not take matters into our own hands at the panel

level.

Even if three decades of circuit precedent and practice

were not enough, the majority’s decision is still wrong on its

own terms. The Sentencing Commission’s per-card

multiplier is not inconsistent with or a plainly erroneous

26 UNITED STATES V. KIRILYUK

reading of “loss” under the Guidelines, and the

Commission’s interpretation is therefore binding under

Stinson v. United States, 508 U.S. 36 (1993). That position

is not novel: courts across the country have routinely applied

the per-card multiplier, just as we did before today. In siding

with an outlier concurring opinion in a Sixth Circuit case

involving materially different facts, the majority puts our

circuit at odds with the others, to say nothing of our own

prior precedent. In the process, the majority disrupts long-

established sentencing practices in our district courts—

practices we had long approved.

While the majority professes that the defendant’s

sentence here is “egregious,” it is easy to understand why the

Sentencing Commission disagreed with the majority’s

theory of penology. Ruslan Kirilyuk and his co-conspirators

stole more than 220 identities, many of them high school

students whose confidential information the conspirators

lifted from stolen school transcripts. They opened sham

bank and merchant accounts in the names of these

unsuspecting victims and then used stolen account

information for 120,000 American Express cards to make

more than 190,000 fraudulent transactions. The Sentencing

Commission and district court (which declined to exercise

its discretion to impose a lower loss enhancement) could

easily conclude that the $1.4 million in completed charges

resulting from Kirilyuk’s scheme—halted only because

authorities discovered it—nowhere near reflects the true

scope of his criminality. That, of course, is the judgment

Yellowe held the Sentencing Commission and district courts

were permitted to reach.

While I join the remainder of the majority opinion, I

dissent from that part of the decision invalidating the per-

card multiplier.

UNITED STATES V. KIRILYUK 27

I

A

I begin where this issue should have ended: the binding

force of circuit precedent. Adherence to circuit precedent is

not a mere “housekeeping” matter, as the majority would

have it. Maj. Op. 9. Three-judge panels must follow circuit

precedent except “where the reasoning or theory of our prior

circuit authority is clearly irreconcilable with the reasoning

or theory of intervening higher authority.” Miller v.

Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc). “This

venerable principle commands our utmost respect and is

central to the rule of law in appellate decision-making.”

Lambert v. Saul, 980 F.3d 1266, 1274 (9th Cir. 2020). En

banc review, not panel re-review, is the required mechanism

for addressing prior decisions that we believe are wrongly

decided. Miller, 335 F.3d at 900. The majority violates

these fundamental precepts.

The Sentencing Guidelines provide that, for certain

crimes, if “the loss exceeded $6,500,” the defendant’s

offense level should be increased based on the amount of

loss. U.S.S.G. § 2B1.1(b)(1). The Guidelines do not

themselves define “loss.” But in the Guidelines

commentary, “loss” is generally defined as “the greater of

actual loss or intended loss.” Id. § 2B1.1 cmt. n.3(A).

“Actual loss” is “the reasonably foreseeable pecuniary harm

that resulted from the offense,” while “intended loss”

generally consists of “the pecuniary harm that the defendant

purposely sought to inflict,” including harm “that would

have been impossible or unlikely to occur.” Id. cmt.

n.3(A)(ii). Regardless of the method of measurement, “[t]he

court need only make a reasonable estimate of the loss.” Id.

cmt. n.3(C).

28 UNITED STATES V. KIRILYUK

The Guidelines commentary provides some special rules

“to assist in determining loss” for certain offenses. Id. cmt.

n.3(F). In cases involving credit cards, among other

“unauthorized access devices,” “loss includes any

unauthorized charges made with the unauthorized access

device and shall not be less than $500 per access device.”

Id. cmt. n.3(F)(i). The Sentencing Commission originally

determined that the loss would presumptively be at least

$100 per credit card. Id. cmt. n.4 (1987). The Commission

then increased the amount to $500 more than twenty years

ago, after Congress directed it to review whether the amount

was sufficiently punitive. U.S.S.G. app. C, vol. II, at 57–63.

But the commentary makes clear that “[t]here may be cases

in which the offense level determined under this guideline

substantially overstates the seriousness of the offense,” and

that “[i]n such cases, a downward departure may be

warranted.” U.S.S.G. § 2B1.1, cmt. n.21(C).

In United States v. Yellowe, 24 F.3d 1110 (9th Cir. 1994),

the defendant pleaded guilty to conspiring to possess and use

unauthorized access devices. Id. at 1111. Through a scheme

that bears eerie similarity to Kirilyuk’s, Yellowe conspired

to use thousands of credit card numbers to make fraudulent

purchases, routed the charges into fake merchant accounts,

and then transferred the funds to his company. Id. at 1111–

12.

The district court found Yellowe had misused at least

7,000 credit card numbers and multiplied that number “by

the presumed minimum loss of $100 per card” that was then

set out in Application Note 4 (now Application Note 3(F)(i))

to U.S.S.G. § 2B1.1. Id. at 1112. The district court thus

concluded that Yellowe was responsible for over $700,000

in loss, setting his offense level and Guidelines range

accordingly. Id.

UNITED STATES V. KIRILYUK 29

We affirmed the district court’s application of the $100-

per-card multiplier. In doing so, we specifically rejected

Yellowe’s argument that “the district court misapplied the

Guidelines by using the $100 minimum loss mandated when

a credit card is used rather than determining the intended

loss based on what Yellowe believed the scheme would

produce.” Id. at 1112 (emphasis added). The majority here

nonetheless adopts the position we rejected in Yellowe,

holding that Kirilyuk can be responsible only for the

$1.4 million in losses his scheme actually caused (or

possibly the $3.4 million in losses he intended to cause,

although the majority’s reasoning makes even that doubtful,

as I explain below). Maj. Op. 18. In so holding, the majority

opinion directly contradicts Yellowe, which confirmed that

the “loss” need not be actual or intended loss and may

instead be the $100-per-card (now $500-per-card)

presumptive loss that Kirilyuk challenges. See 24 F.3d

at 1113.

Yellowe also explained why the $100-per-card multiplier

was valid. Specifically, because “the value of the

unauthorized use exceeds the intrinsic value of the device,”

“to determine loss based on the value of the card or the

number alone would understate the severity of the offense.”

Id. at 1113. Yellowe’s holding was clear: “We now explicitly

hold that loss under Application Note 4 to § 2B1.1 includes

any unauthorized charges made with stolen credit card

numbers, as well as cards. This loss is a presumed loss,

setting a floor beneath which neither ‘actual’ nor ‘intended’

loss may fall.” Id. (emphasis in original). Once the per-card

multiplier applies and “there is no dispute about the number

of stolen numbers,” Yellowe held, the defendant’s

“subjective intent is immaterial.” Id. (emphasis added). We

thus rejected Yellowe’s argument—which is Kirilyuk’s

same argument—that “because determining ‘intended loss’

30 UNITED STATES V. KIRILYUK

is the goal of the guideline, the focus should be on his

knowledge and intentions.”

The majority claims that Kirilyuk is not making this

same argument as Yellowe, Maj. Op. 12 n.3, but in

substance, this is Kirilyuk’s entire point. Throughout his

briefing, Kirilyuk maintains that the multiplier wrongly

imposes a $500 per-card loss “regardless of the actual or

intended pecuniary harm, even when (as here) all available

evidence is that actual and intended losses are far lower.”

Kirilyuk Opening Br. 54; see also id. at 57 (“mandatory use

of the application note 3, regardless of whether it is

consistent with the evidence of actual or intended loss,

creates an artificially high loss amount in cases like this one,

which does not accurately reflect the seriousness of the

crime”). As Kirilyuk informed us, the problem with the per-

card multiplier is that it “artificially inflates the amount of

the intended loss and, by logical implication, overstates the

seriousness of the offense.” Id. at 56. There are numerous

similar statements throughout Kirilyuk’s briefing, 1

1

See, e.g., id. at 23 (arguing that “the loss amount is grossly

disproportionate to the actual or intended loss or Kirilyuk’s role in the

crime”); id. at 52–53 (arguing that “the district court had to take a

realistic, economic approach to determine what losses [Kirilyuk] truly

caused or intended to cause” (alteration in original) (quotations

omitted)); id. at 53 (“the district court should not have ascribed to

Kirilyuk a larger loss tha[n] he inflicted or intended to inflict”); id. at 55

(“Presumed loss completely divorced from the evidence of actual or

intended loss would greatly overstate the seriousness of the crime.”);

Kirilyuk Reply Br. 2 (“there is no evidence that actual or intended loss

here can be reasonably estimated as $500 per card”); id. at 3 n.2 (“One

of the arguments we made to the $500-per-card multiplier is that it

conflicts with § 2B1.1 because it requires imposition of $500-per-card

loss, regardless of the losses Kirilyuk did or intended to cause.”); id. at 36

(challenging the use of the multiplier “despite lack of evidence of the

actual or intended loss being anywhere close to that amount”); Kirilyuk

UNITED STATES V. KIRILYUK 31

confirming that at its core, the argument Kirilyuk makes here

is the same one Yellowe made many years ago.

Yellowe also held that the per-card multiplier applied to

credit card numbers in addition to credit cards. The majority

seizes on that point to claim that “the central question in

[Yellowe] was narrow.” Maj. Op. 11. The majority’s

reading of Yellowe is unduly narrow. Yellowe did hold that

the multiplier applies to credit card numbers in addition to

cards. But that was not the full extent of Yellowe’s holding.

Instead, Yellowe squarely and necessarily held that the per-

card multiplier is a permissible application of “loss” under

§ 2B1.1. 24 F.3d at 1113. The defendant wanted a lower

loss amount based on actual or intended loss, and we said

“no.” This holding had nothing to do with any distinction

between credit card numbers and physical credit cards. And

in any event, Kirilyuk himself misused credit card numbers

and not the card themselves; he is squarely within Yellowe,

factually and legally.

The majority is not free to ignore Yellowe simply

because Yellowe did not cite Stinson v. United States,

508 U.S. 36 (1993), or perform an analysis specifically

tailored to that case. The Stinson argument that Kirilyuk

makes now, and that the majority credits, is simply a

refreshed version of the argument we rejected in Yellowe.

Substantively, the two arguments are the same. Stinson

requires us to ask whether the per-card multiplier is

“inconsistent with, or a plainly erroneous reading of” the

2d Suppl. Br. 1–2 (“at least when, as here, the actual or intended loss is

known to be far lower than $500 per access device, reliance on that

commentary violates Stinson”); id. at 19 (arguing that the Stinson

argument was preserved because “Kirilyuk objected to the use of the

$500-per-access-device rule because it is not based on pecuniary harm

(whether actual or intended)”).

32 UNITED STATES V. KIRILYUK

Guidelines. 508 U.S. at 38. When interpreting the

Guidelines, we “will most often begin and end with the

structure of the Guidelines,” and “may also look to the

provision’s history and purpose, such as by consulting the

Commission’s statements of reason for a particular

amendment.” United States v. Martinez, 870 F.3d 1163,

1166 (9th Cir. 2017) (quotations omitted).

Yellowe undertook that inquiry. Yellowe reviewed the

relationship of the per-card multiplier to the Guidelines and

to other commentary, as well as the multiplier’s purpose—

to more closely approximate “the severity of the offense.”

See 24 F.3d at 1112–13. Yellowe also acknowledged the

Guidelines’ references to “intended” loss and how “‘loss

need not be determined with precision, and may be inferred

from any reasonably reliable information available,

including the scope of the operation.’” Id. at 1112 & n.1

(quoting U.S.S.G. § 2B1.1, cmt. n.3). Yellowe then held that

the multiplier was a proper application of “loss,” and not a

“misappli[cation] [of] the Guidelines,” as Yellowe had

argued. Id. at 1113. We thus allowed the multiplier

notwithstanding Yellowe’s argument that “because

determining ‘intended loss’ is the goal of the guideline, the

focus should be on his knowledge and intentions.” Id.

The majority’s suggestion that the validity of the per-

card multiplier was merely “lurk[ing] in the record” in

Yellowe, or “not considered” or merely “assumed” there, is

simply inaccurate. Maj. Op. 10. At issue in Yellowe was

whether the multiplier was a permissible application of the

Guidelines in a case like this one, where the multiplier

resulted in a higher loss amount than the defendant’s actual

or intended loss. Yellowe upheld the use of the multiplier

against that challenge. And contrary to the majority, Yellowe

very much “consider[ed] the implications” of this

UNITED STATES V. KIRILYUK 33

determination, which was to result in a longer sentence for

Yellowe and those like him. Maj. Op. 10. 2

Circuit precedent must be read for its holdings and its

reasoning, in tandem. “In determining whether we are

bound by an earlier decision, we consider not only the rule

announced, but also the facts giving rise to the dispute, [and]

other rules considered and rejected.” In re NCAA Athletic

Grant-in-Aid Cap Antitrust Litig., 958 F.3d 1239, 1253 (9th

Cir. 2020) (quotations and alterations omitted). Judicial

decisions, conceptual in nature, are not statutes; the omission

of a particular word (or here, a case citation) in a judicial

opinion does not establish that the case did not hold what it

clearly did. Today’s decision is directly opposed to Yellowe

in its result and reasoning. Under the majority opinion,

Yellowe was wrongly decided.

The majority has exceeded its authority. Three-judge

panels are “not free to disregard the decision of another panel

of our court simply because we think the arguments have

been characterized differently or more persuasively by a new

litigant.” United States v. Ramos-Medina, 706 F.3d 932, 939

(9th Cir. 2013); see also Cnty. of San Mateo v. Chevron

Corp., 960 F.3d 586, 597 (9th Cir. 2020), vacated on other

grounds, 141 S. Ct. 2666 (2021) (“Precedents . . . do not

cease to be authoritative merely because counsel in a later

case advances new arguments.”). When we have “found a

similar argument insufficient” in a prior case, “we are bound

2

Perhaps ironically, the majority concludes that Kirilyuk preserved

his Stinson argument in the district court, even though he did not couch

it in terms of Stinson. Maj. Op. 13. But for the majority, that same

reasoning is not sufficient when it comes to interpreting our own circuit

precedent. If Stinson is truly a different argument than the one we

addressed in Yellowe, the majority should find Kirilyuk’s argument

forfeited.

34 UNITED STATES V. KIRILYUK

by that holding to reach the same conclusion here.”

Pensinger v. Chappell, 787 F.3d 1014, 1028 (9th Cir. 2015).

As one of our colleagues has written, “[t]he fact that a prior

panel may not have considered a particular argument, or line

of thought, in reaching its bottom line does not provide a

valid basis for distinguishing otherwise controlling

precedent.” United States v. Davis, 428 F.3d 802, 809 (9th

Cir. 2005) (Callahan, J., dissenting in part).

Because Yellowe is not “clearly irreconcilable with the

reasoning or theory of intervening higher authority,” Miller,

335 F.3d at 893, we must follow it. The majority seriously

errs in concluding otherwise.

B

Further confirming that Yellowe supplies our rule of

decision, numerous cases from this court have upheld

applications of the per-card multiplier or have otherwise

acknowledged the multiplier as the governing rule.

Although the majority gestures in a footnote to a handful of

these cases, there are far more than the majority

acknowledges. This lengthy set of decisions—which

includes that of Kirilyuk’s own co-defendant—shows that

we certainly have not regarded the validity of the multiplier

as the “open question” the majority posits:

• United States v. Chew, 804 F. App’x 492, 494–95

(9th Cir. 2020), relying on Yellowe, affirmed the

district court’s use of the multiplier. We cited

Yellowe as “holding that it was not clearly erroneous

for a district court to calculate loss by multiplying the

minimum loss calculation by the amount of useable

credit cards in the defendant’s possession.” Id.

• United States v. Gaussiran, 787 F. App’x 458, 460

UNITED STATES V. KIRILYUK 35

(9th Cir. 2019), affirmed that the defendant had

possessed sufficient useable unauthorized access

devices to support the district court’s loss

calculation, which employed the per-card multiplier.

We cited the multiplier rule and concluded that “the

district court did not abuse its discretion in including

$500 for each card in its calculation.” Id.

• United States v. Jackson, 721 F. App’x 631, 633 (9th

Cir. 2018), explained that the “plain language of the

guidelines indicates there is a floor on each device:

the greater of the loss resulting from the unauthorized

charges or $500,” and affirmed the district court’s

application of the multiplier.

• United States v. Dobadzhyan, 677 F. App’x 454, 455

(9th Cir. 2017), relied on Yellowe to conclude that

courts “may impose a charge of $500 per counterfeit

access device number,” and held “that the district

court did not err by adding $643,500 to the total

amount of loss based on the 1,287 access device

numbers.”

• United States v. Wilburn, 627 F. App’x 659, 659–60

(9th Cir. 2015), affirmed the defendant’s sentence

where he received a 12-level increase because

“calculating loss at $500 per access device,” he

“possessed at least 471 unique stolen account

numbers resulting in an intended loss of $235,000.”

• United States v. Masters, 613 F. App’x 618, 621 (9th

Cir. 2015), affirmed application of the multiplier and

resulting 14-level loss enhancement.

• United States v. Nguyen, 543 F. App’x 715, 716 (9th

Cir. 2013), explained that “[f]or crimes involving

36 UNITED STATES V. KIRILYUK

stolen or counterfeit credits cards and access devices,

loss may be calculated at $500 per access device.”

Citing Yellowe, we noted that the district court “was

not required to take into account Nguyen’s

anticipated likelihood of success using access

devices he obtained.” Id. We thus affirmed the

defendant’s 20-level loss enhancement.

• United States v. Karapetian, 473 F. App’x 603 (9th

Cir. 2012), affirmed the defendant’s sentence, which

was based on the district court’s $500-per-card loss

calculation.

• United States v. Truong, 587 F.3d 1049, 1051–52

(9th Cir. 2009) (per curiam), rejected the defendant’s

argument that gift cards did not qualify as access

devices, and thus affirmed the district court’s

sentence, which was based on the per-card

multiplier.

• United States v. Camper, 337 F. App’x 631, 632–33

(9th Cir. 2009), relied on Yellowe to conclude that the

“district court correctly calculated the total loss by

applying the Sentencing Guidelines’ $500 presumed

loss to each of the 1,531 stolen credit cards.” We

explained that Yellowe held “that the district court

did not clearly err when it calculated loss by

multiplying the Sentencing Guidelines’ minimum

loss figure by the number of workable credit card

numbers in Yellowe’s possession, even though none

of the numbers had been used to purchase items

fraudulently.” Id. at 633.

• United States v. Levine, 87 F. App’x 44, 45 (9th Cir.

2004), held that the district court did not err “in

UNITED STATES V. KIRILYUK 37

calculating the total loss by multiplying 2,071 by the

$500 minimum loss calculation.” We emphasized,

citing Yellowe, that the “minimum loss calculation

applies regardless of whether the unauthorized credit

card was actually used to make fraudulent purchases

or not.” Id.

• United States v. Nguyen, 81 F.3d 912, 913–15 (9th

Cir. 1996), held that blank credit cards qualify as

access devices, so the district court had not erred in

applying the $100-per-card multiplier. “Because

there was no actual loss in this case, each access

device was assigned a loss of $100.” Id. at 914

(citing U.S.S.G. § 2B1.1, cmt. n.4).

These cases confirm that we have consistently

recognized and applied Yellowe’s rule for decades. Under

today’s decision, however, these cases should have come out

differently. And that is to say nothing of the many instances

in which district courts applied the multiplier but where the

defendant did not appeal that issue, or the case did not reach

us at all, because a challenge to the multiplier was so clearly

foreclosed by precedent.

But there is more. Remarkably, and though it buries the

point in a footnote, the majority invalidates the per-card

multiplier even though we recently upheld its application to

Kirilyuk’s own co-defendant, Mihran Melkonyan. See

United States v. Melkonyan, 831 F. App’x 319 (9th Cir.

2020). And we did so even though Melkonyan relied on

Stinson’s test.

Melkonyan, like Kirilyuk, received the same 22-level

enhancement based on the $500-per-card multiplier for his

role in Kirilyuk’s same fraudulent scheme. Id. at 319. In his

opening brief on appeal, Melkonyan argued that the per-card

38 UNITED STATES V. KIRILYUK

multiplier “conflicts with the court’s role of determining a

reasonable estimate of the loss,” and that “the court should

not be forced to follow the $500 per credit card rule.”

Melkonyan Opening Brief at 30–31, No. 19-10026, Dkt.

No. 12. Just like today’s majority opinion, Melkonyan relied

on United States v. Rising Sun, 522 F.3d 989, 996 (9th Cir.

2008), a Stinson case, to advance Stinson’s rule:

“Application notes like this one are treated as authoritative

interpretations of the Sentencing Guidelines unless they

violate the Constitution or a federal statute or are

inconsistent with, or [are a] plainly erroneous reading of, the

Guideline they are meant to interpret.” Melkonyan Opening

Brief at 31–32 (quoting Rising Sun, 522 F.3d at 996, and

noting that Rising Sun was “citing Stinson”). Just like

Kirilyuk, Melkonyan argued that he caused approximately

$1.5 million in actual losses, so that the multiplier’s

application resulted in an “inflated figure.” Id. at 32. 3

In its answering brief, the government responded that

Yellowe foreclosed Melkonyan’s argument. Answering

Brief at 21–27, Dkt. No. 26. The government also relied on

Stinson to argue that Application Note 3(F)(i) did not

conflict with “the Guidelines section it interprets” or any

other Guidelines commentary. Id. at 21–22. And it pointed

out that “this Court has repeatedly upheld sentencing courts’

use of the $500 valuation to calculate loss.” Id. at 24.

3

The majority claims that Melkonyan only invoked Stinson to argue

that the per-card multiplier conflicted with other portions of the

Guidelines commentary. Maj. Op. 12 n.4. But Stinson concerns

conflicts with the Guidelines themselves. Melkonyan thus argued that

his sentence should be based on his actual or intended loss, which is what

he claimed should have governed the assessment of how much “loss” he

was responsible for under the Guidelines.

UNITED STATES V. KIRILYUK 39

We rejected Melkonyan’s argument. We quoted Yellowe

and reiterated that the per-card multiplier “establishes ‘a

presumed loss, setting a floor beneath which neither “actual”

nor “intended” loss may fall.’” Melkonyan, 831 F. App’x

at 319 (quoting Yellowe, 24 F.3d at 1113). Citing Yellowe,

we continued: “Here, because the number of unauthorized

access devices is not in dispute, multiplying that number by

$500 is the correct application of the Sentencing Guidelines,

and the defendant’s subjective intent as to actual loss is

immaterial.” Id. at 319–20 (citing Yellowe, 24 F.3d at 1113)

(emphasis added). The majority here not only contradicts

Yellowe but treats differently two co-defendants who

received identical loss enhancements for the same fraudulent

scheme. It is hard to see what justice there is in that,

especially when Kirilyuk was the ringleader.

Melkonyan was an unpublished decision. But in these

circumstances, that makes the majority’s opinion here even

more troubling. That the disposition was non-precedential

confirms that Melkonyan’s Stinson argument was readily

resolved based on established law. The same can be said of

the other unpublished cases I cited above. In our

unpublished dispositions, there should be “no new legal

holdings, just applications of established law to facts.”

Grimm v. City of Portland, 971 F.3d 1060, 1067 (9th Cir.

2020). Indeed, the Melkonyan panel evidently viewed the

case as so straightforward that it submitted the matter on the

briefs without oral argument. Melkonyan, 831 F. App’x at

319 n.*.

Melkonyan is just further indication of what decades of

circuit precedent confirms: that before today, it was settled

law that the per-card multiplier is a permissible application

of the Guidelines. That the law was so settled likely explains

why we do not have even more cases involving such

40 UNITED STATES V. KIRILYUK

challenges: they would clearly fail, just as every one of them

has until now.

II

Even setting aside Yellowe, the majority’s holding is

incorrect on its own terms. In invalidating the multiplier, the

majority badly misapplies Stinson, creates a lopsided split

with our sister circuits, and embraces an anomalous

concurring opinion from a Sixth Circuit case that involved

critically different facts. In the process, the majority

converts one possible approach to sentencing policy into a

hard legal rule, preventing district courts in appropriate cases

from effectuating the Sentencing Commission’s judgment

that other measures of loss do not adequately capture the

seriousness of offenses like the one before us.

A

In 1987, the Sentencing Commission promulgated the

first version of the Guidelines Manual, which includes the

Guidelines and the Commission’s commentary. The

Guidelines state that the commentary “may interpret the

guideline or explain how it is to be applied.” U.S.S.G.

§ 1B1.7. The Guidelines further make clear that “[f]ailure

to follow such commentary could constitute an incorrect

application of the guidelines, subjecting the sentence to

possible reversal on appeal.” Id. Citing the Guidelines’

treatment of the commentary and Congress’s grant of

authority to the Commission, Stinson held that the

Guidelines commentary is “authoritative,” “controls,” and is

“binding” on courts. 508 U.S. at 40, 42–43.

Stinson also carved out narrow situations in which

Guidelines commentary is not binding. Specifically,

commentary “that interprets or explains a guideline is

UNITED STATES V. KIRILYUK 41

authoritative unless it violates the Constitution or a federal

statute, or is inconsistent with, or a plainly erroneous reading

of, that guideline.” Stinson, 508 U.S. at 40. But Stinson

clarified that “inconsistent with” means diametrically

opposed, where following either the Guidelines or the

commentary “will result in violating the dictates of the

other.” Id. at 43 (emphasis added); see also Rising Sun,

522 F.3d at 996 (same). Stinson thus disapproved of courts

“refus[ing] to follow commentary in situations falling short

of such flat inconsistency.” Id. Stinson also recognized that

“commentary explains the guidelines and provides concrete

guidance as to how even unambiguous guidelines are to be

applied in practice.” Id. at 44.

Two circuits, including the Sixth Circuit in United States

v. Riccardi, 989 F.3d 476, 483 (6th Cir. 2021), have recently

held that courts should now evaluate the validity of

Guidelines commentary under the less deferential test set

forth in Kisor v. Wilkie, 139 S. Ct. 2400 (2019). See also

United States v. Nasir, 17 F.4th 459, 471–72 (3d Cir. 2021)

(en banc). Kisor held that a court can defer to an agency’s

interpretation of a regulation only after determining that the

regulation is “genuinely ambiguous,” and only if the

agency’s interpretation falls “within the zone of ambiguity

the court has identified after employing all its interpretive

tools.” Id. at 2414, 2416.

Other courts have disagreed and have held that Stinson

continues to apply to Guidelines commentary. See United

States v. Moses, — F.4th —, 2022 WL 163960, at *1 (4th

Cir. Jan. 19, 2022); United States v. Cruz-Flores, 799 F.

App’x 245, 246 (5th Cir. 2021). The issue is a weighty one

because if Kisor were to apply, it “would negate much of the

Commission’s efforts in providing commentary to fulfill its

congressionally designated mission,” while leading to

42 UNITED STATES V. KIRILYUK

“substantial litigation and divisions of authority regarding

the extent to which each Guideline is ‘genuinely

ambiguous,’ even after ‘all the traditional tools of

construction’ have been ‘exhaust[ed].’” Moses, 2022 WL

163960, at *7 (quoting Kisor, 139 S. Ct. at 2415).

The debate over Stinson versus Kisor should be

irrelevant in this case because our circuit has continued to

apply Stinson to Guidelines commentary after Kisor. See,

e.g., United States v. Herrera, 974 F.3d 1040, 1047 (9th Cir.

2020); United States v. George, 949 F.3d 1181, 1185 (9th

Cir. 2020); United States v. Wang, 944 F.3d 1081, 1086 (9th

Cir. 2019); United States v. Cuevas-Lopez, 934 F.3d 1056,

1061 (9th Cir. 2019); United States v. Crum, 934 F.3d 963,

966 (9th Cir. 2019). In this circuit, Stinson is still the

governing law for evaluating Guidelines commentary.

The majority here thus purports to apply Stinson while

disclaiming any position on whether Kisor should be the

right test. Maj. Op. 19–20. As we will see, however, the

majority’s application of Stinson is nothing of the sort. And

its refusal to acknowledge legitimate and long-applied

commentary is just Kisor in disguise.

The $500-per-card multiplier easily satisfies Stinson. No

one suggests that the multiplier violates the Constitution or

a federal statute. See Stinson, 508 U.S. at 40. Nor is the

multiplier “inconsistent with, or a plainly erroneous reading

of” the Guidelines. See id. The Guidelines create graduated

offense level increases based on the amount of “the loss.”

U.S.S.G. § 2B1.1(b)(1). “Loss” is the only operative word

here. But the Guidelines do not define what “loss” means,

how to calculate it, or the precision by which a “loss” amount

should be assessed.

UNITED STATES V. KIRILYUK 43

“Loss” could mean “actual” out-of-pocket loss, but it

could also mean “intended” loss, even if the intended loss

“would have been impossible or unlikely to occur.” Id.

§ 2B1.1 cmt. n.3(A)(ii) (listing as an example a government

sting operation); see also United States v. Popov, 742 F.3d

911, 915 (9th Cir. 2014). “Loss” could even mean “the gain

that resulted from the offense,” provided “there is a loss but

it reasonably cannot be determined.” Id. § 2B1.1 cmt.

n.3(b); see also United States v. Martin, 796 F.3d 1101, 1111

(9th Cir. 2015) (“[D]istrict courts may use the defendant’s

gain as another way to measure the loss.”). None of these

ways of viewing “loss” is inconsistent with or a plainly

erroneous reading of the Guidelines. See Stinson, 508 U.S.

at 38. The Commentary also states that “[t]he court need

only make a reasonable estimate of the loss.” Id. cmt.

n.3(C). We have long recognized that this too is appropriate.

See, e.g., United States v. Tadios, 822 F.3d 501, 503 (9th Cir.

2016); United States v. Armstead, 552 F.3d 769, 778 (9th

Cir. 2008); United States v. Lopez, 64 F.3d 1425, 1427 (9th

Cir. 1995).

The per-card multiplier is just an offense-specific

application of “loss” under § 2B1.1, consistent with the

“reasonable estimate” requirements. See Yellowe, 24 F.3d

at 1112–13. Just as “loss” can mean actual or intended

loss—two concepts that are not specifically stated in the

Guidelines either—it can mean a presumptive dollar amount

that is intended reasonably to estimate the pecuniary harm

resulting from a particular offense. Nothing in the word

“loss” prohibits the Sentencing Commission from assigning

a presumptive monetary value to a given act of misconduct

based on the Commission’s experience with that crime. See

id. at 1113 (explaining that loss can be “a presumed loss,

setting a floor beneath which neither ‘actual’ nor ‘intended’

loss may fall”). Thus, following the per-card multiplier in

44 UNITED STATES V. KIRILYUK

the commentary does not lead the sentencer to “violate the

dictates” of the Guidelines. Stinson, 508 U.S. at 43.

The history of the multiplier supports this. The original

$100-per-card multiplier was included in the first iteration of

the Guidelines commentary. Riccardi, 989 F.3d at 482.

Prior to taking effect, the first Guidelines Manual was made

available for public comment and congressional review. See

Moses, 2022 WL 163960, at *5. The original $100-per-card

multiplier remained unchanged until 2000, when, in

response to a directive from Congress, see Identity Theft and

Assumption Deterrence Act of 1998, Pub. L. 105-318,

§ 4(a), 112 Stat. 3007, 3009 (1998); Wireless Telephone

Protection Act, Pub. L. 105-172, § 2(e)(1), 112 Stat. 53, 55

(1998), the Sentencing Commission adopted Amendment

596, which increased the multiplier to $500. U.S.S.G. app.

C, vol. II, at 57–63. In Amendment 596, the Commission

explained that Congress had directed it to “review the extent

to which the value of the loss caused by the offenses is an

adequate measure of establishing penalties.” Id. at 62

(quotations and alterations omitted). The Commission

concluded that its “research and data supported increasing

the minimum loss amount . . . from $100 to $500 per access

device.” Id.

This history shows that the Commission aimed to

approximate the loss associated with an offense like

Kirilyuk’s. Under Stinson, nothing in the word “loss”

precluded it from doing so. And using a presumptive dollar

value per card has the benefit of promoting uniformity in

sentencing, making it more likely that defendants who

commit credit-card fraud offenses will receive similar loss

enhancements.

UNITED STATES V. KIRILYUK 45

B

The majority nevertheless claims the multiplier is

“clearly inconsistent” with the Guidelines. Maj. Op. 19.

This holding is deeply flawed. It would of course be

surprising to learn that in the decades since Yellowe,

numerous judges applying the per-card multiplier at the trial

and appellate levels have unwittingly enforced a facially

improper application of “loss.” Fortunately, that is not the

case. Guidelines commentary is impermissibly inconsistent

with the Guidelines only when “following one will violate

the dictates of the other.” Stinson, 508 U.S. at 43. And there

is no such “flat inconsistency” here. Id.

On this point, I recite the majority’s core reasoning in

full. The majority quotes the discussion of dictionary

definitions of “loss” in Riccardi and then says:

Though dictionary definitions for “loss” may

vary, they make one thing clear: “No

reasonable person would define the ‘loss’

from a stolen [credit] card as an automatic

$500” rather than a fact-specific amount. Id.

Instead, § 2B1.1 is driven by “the amount of

loss caused by the crime.” Gainza, 982 F.3d

at 764 (emphasis added). So “loss” cannot

mean a pre-determined, contrived amount

with no connection to the crime committed,

even if it is based on the Commission’s

“research and data.” Application Note

3(F)(i) thus doesn’t illuminate the meaning of

‘loss,’ but modifies it.

Maj. Op. 18 (brackets and alterations in original; the “Id.”

citation is of Riccardi). Unpacking each piece of this is

critical for appreciating the majority’s error.

46 UNITED STATES V. KIRILYUK

First, the majority’s reliance on Riccardi raises obvious

red flags because the Sixth Circuit in that case invalidated

the $500-per-card multiplier under Kisor, not Stinson. See

Riccardi, 989 F.3d at 486. Invoking Riccardi’s Kisor-based

discussion of dictionary definitions and what a “reasonable

person” would think, the majority asserts that “loss” must be

“the amount of loss caused by the crime,” Maj. Op. 16

(quoting Gainza, 982 F.3d at 764) (emphasis in majority

opinion), by which the majority apparently means the actual

loss associated with a crime.

But this is not a Stinson analysis: the question here is not

whether the word “loss” is ambiguous in some sense but

whether the multiplier is flatly inconsistent with the

Guidelines. Stinson, 508 U.S. at 43; Rising Sun, 522 F.3d

at 996. The majority says that “‘loss’ cannot mean a pre-

determined” amount. Maj. Op. 18. But under Stinson,

where is the flat inconsistency? Nothing in the word “loss”

or the Guidelines more generally prevents the Commissioner

from ascribing a presumptive loss value to a particular

offense, much less creates a situation in which applying the

commentary “violates the dictates of” the Guidelines.

Stinson, 508 U.S. at 43; see also Yellowe, 24 F.3d at 1112–

13.

Not only does the majority fail to apply a true Stinson

analysis, the majority’s assertion that we are required to

invalidate the per-card multiplier based on the “plain

meaning” of “loss” is simply unfounded. Maj. Op. 16–18 &

n.6. The unadorned and undefined word “loss” does not

remotely demand the majority’s wooden reading, especially

in the context of the Guidelines as a whole, which are

designed to ensure punishments that reflect a defendant’s

criminality. U.S.S.G. Ch. 1, Pt. A, intro., 3.

UNITED STATES V. KIRILYUK 47

The majority’s supposed “plain meaning” approach

would also call into question many other established

measures of “loss.” As I have explained above, the

Commentary has long treated “loss” as including “intended”

loss, U.S.S.G. § 2B1.1 cmt. n.3(A)(ii), among many other

offense-specific interpretations of “loss,” id. § 2B1.1 cmt.

n.3(A), (F). “Intended” loss also does not reflect “loss

caused by the crime.” Maj. Op. 18. But we have repeatedly

treated this and other measures of “loss” as valid. See, e.g.,

Popov, 742 F.3d at 915; Martin, 796 F.3d at 1111. These

other longstanding measures of “loss” would also now

appear vulnerable under the majority’s improperly narrow

reading of “loss.”

The majority’s repeated assertions that the Commission

is “modifying” the Guidelines or making “policy” judgments

prove nothing. Maj. Op. 18. Many aspects of the Guidelines

and commentary reflect policy judgments; that does not

make them unlawful under Stinson. And here, the

commentary expressly notes that if the offense level

“substantially overstates the seriousness of the offense,” “a

downward departure may be warranted.” U.S.S.G. § 2B1.1,

cmt. n.21(C). I fail to see how the commentary squarely

violates the dictates of the Guidelines when it allows this

flexibility.

Of course, for all its reliance on Riccardi, the majority

alters its key quotation of that case by adding the word

“credit” in brackets in place of “gift” card. Quoting

Riccardi, the majority says: “‘No reasonable person would

define the “loss” from a stolen [credit] card as an automatic

$500’ rather than a fact-specific amount.” Maj. Op. 18

(quoting Riccardi, 989 F.3d at 486) (emphasis added).

Riccardi involved gift cards, not credit cards. As I will

explain further below, gift cards present a very different

48 UNITED STATES V. KIRILYUK

situation than credit cards because they have a finite face

value and their theft produces fewer collateral costs. But

suffice to say, Riccardi had no occasion to extend its Kisor

analysis to credit cards. And the Sixth Circuit has since

implied that Riccardi may not apply to credit cards. See

United States v. Nicolescu, 17 F.4th 706, 720 (6th Cir. 2021)

(“even if this court’s recent decision in United States v.

Riccardi renders invalid any loss calculation based on a

$500-per-stolen-credit-card multiplier . . . .”). By editing

the quotation, the majority implies that Riccardi sweeps

broader than the Sixth Circuit thus far has recognized.

Second, the majority purports to derive its “loss caused

by the crime” test from United States v. Gainza, 982 F.3d

762 (9th Cir. 2020). But the majority quotes a stray phrase

in that case out of context. The language the majority quotes

comes from this sentence: “For economic crimes, the

Sentencing Guidelines provide for graduated increases to the

base offense level depending on the amount of loss caused

by the crime.” Gainza, 982 F.3d at 764. Nothing in this

generic language in Gainza or the case as a whole purported

to foreclose application of the per-card multiplier or any

other established measure of “loss,” much less adopt the

majority’s unnecessarily cramped “plain meaning”

interpretation of that term.

In fact, the next sentence of Gainza states: “loss includes

any unauthorized charges made with the unauthorized access

device and shall be not less than $500 per access device.”

Id. (quoting U.S.S.G. § 2B1.1 cmt. n.3(F)(i) (alterations

omitted)). Gainza thus recognized the very rule the majority

invalidates here. We even relied on Gainza in affirming

Kirilyuk’s co-defendant’s sentence. There, we described

Gainza as a case “referring with approval to the court’s use

of the $500 minimum per access device found in Application

UNITED STATES V. KIRILYUK 49

Note 3(F)(i) to determine amount of loss.” Melkonyan,

831 F. App’x at 319 n.1 (emphasis added).

Third, the majority is improperly dismissive of the

Commission’s guidance in claiming that the commentary’s

approach to “loss” is a “contrived” one “with no connection

to the crime committed.” Maj. Op. 18. That is a severe

mischaracterization. After Congress directed the

Commission to reevaluate its penalty provisions, the

Commission’s Economic Crimes Policy Team produced two

reports, which are publicly available, discussing possible

changes to the loss amount. See Econ. Crimes Pol’y Team,

U.S. Sent’g Comm’n, Cellular Phone Cloning Final Report,

at 27 (Jan. 25, 2000); Econ. Crimes Pol’y Team, U.S. Sent’g

Comm’n, Identity Theft Final Report, at 23 (Dec. 15, 1999);

see also Riccardi, 989 F.3d at 482–83.

In one report, the Commission explained that the

Department of Treasury had recommended increasing the

presumptive loss per card to $1,000. Cellular Phone Cloning

Final Report at 27 & n.47. Treasury had “cited credit card

industry data that showed the average fraud loss in 1998 to

be $1,040.59 per credit card.” Id. at 27. The Commission

further recounted how “Treasury also cited 1999 Secret

Service statistics indicating an average fraud loss per credit

card of $2,218.” Id. These amounts were lower than the

Commission’s own estimate of $3,775, which was based on

“a sample of 109 federally sentenced credit card fraud cases

for which the exact number of credit cards and exact amount

of charges were known.” Id. at 27 & n.48. These loss figures

considered only the fraudulent charges made on credit cards,

not other pecuniary harms suffered by the cardholder or

financial institutions.

In another report, the Commission acknowledged that

the Guidelines arguably did “not provide adequate

50 UNITED STATES V. KIRILYUK

punishment” because they did “not provide for consideration

of indirect monetary harms to the individual victims, such as

the costs incurred in attempting to repair damaged credit

ratings.” Identity Theft Final Report at 23. This report cited

the egregious example of an identity theft victim who spent

nearly a year, “500 hours of her time,” and “incurred out-of-

pocket costs of approximately $10,000” as a result of the

offense. Id. at 23 n.37. The report also contemplated that

“loss,” as it stood then, might not reflect “harm to an

individual’s financial reputation, as well as the ensuing

inconvenience” of identity theft. Id. at 24. In raising the per-

card loss multiplier from $100, the Commission thus

considered not only average fraudulent charges per card, but

also other associated losses.

The Commission then solicited comments identifying

three potential alternatives: $500, $750, and $1,000.

Sentencing Guidelines for United States Courts, 65 Fed.

Reg. 2663, 2665–66 (Jan. 18, 2000). It received comments

from, among others, the Department of Justice, a federal

defender organization, and Treasury. See U.S. Sent’g

Comm’n, Public Comment from March 2000, Part I,

Amendment 6. The Commission ultimately went with the

lowest amount, explaining in Amendment 596 that its

“research and data supported increasing the minimum loss

amount . . . from $100 to $500 per access device.” U.S.S.G.

app. C, vol. II, at 62. Again, this was substantially lower

than the average loss per card from the Commission’s own

data-set, as well as the information provided by Treasury and

the Secret Service.

The Commission provided notice of the amended per-

card multiplier to Congress for its review. Sentencing

Guidelines for United States Courts, 65 Fed. Reg. 26,880,

26,895 (May 9, 2000). Congress did not take further action

UNITED STATES V. KIRILYUK 51

and the amendment went into effect later that year. All these

events belie the majority’s castigation of the multiplier as

“contrived.” And they confirm what we said in Yellowe: that

other measures of loss “would understate the severity of the

offense.” 24 F.3d at 1113. 4

In a footnote, the majority suggests that “nothing

prevents the Commission from amending the multiplier to a

low of $1 or a high of $1 million.” Maj. Op. 19 n.7. This is

pure hyperbole. In the decades since the per-card multiplier

was adopted, the Sentencing Commission has used only two

amounts: $100, and then, when prompted to revisit that

amount by Congress, $500. The Sentencing Commission

has not entertained an increase in the multiplier on anything

like the scale the majority imagines.

And there would of course be constraints on the

Commission’s ability to set the multiplier at $1 million per

card. That preposterous number—which would far exceed

any credit card spending limits of which I am aware—would

not reflect a “reasonable estimate of the loss.” U.S.S.G.

§ 2B1.1 cmt. n.3(c). It would also presumably not be

supported by any data; would not be consistent with the

18 U.S.C. § 3553(a) factors, see U.S.S.G. § 1B1.1 (directing

courts to consider § 3553(a)); and could implicate other due

4

The majority’s suggestion that Congress “lacks the power to

modify or disapprove of Application Notes,” Maj. Op. 14–15, is

incorrect. The majority relies on United States v. Prien-Pinto, 917 F.3d

1155, 1157 (9th Cir. 2019), which in turn cited Stinson’s statement that

“Congress does not review amendments to the Commentary,” 508 U.S.

at 40. That the Sentencing Commission is not required to submit

amendments to the commentary to Congress does not deprive Congress

of the power to modify or disapprove of them. And here, the

Commission did submit the amendment to Congress. 65 Fed. Reg.

at 26,895.

52 UNITED STATES V. KIRILYUK

process and statutory limits. The majority’s undeveloped

attempt to claim the Sentencing Commission could run

roughshod in this area has no basis in law or reality.

The upshot is the following: applying a presumptive

$500-per-card multiplier does not require us to “violate the

dictates of” the Guidelines. Stinson, U.S. at 43. This case

thus bears no resemblance to the few cases the majority cites

invalidating commentary under Stinson, because each

involved a direct conflict between a Guideline and

application note. In Rising Sun, for instance, the relevant

guideline provided a sentencing adjustment if the defendant

obstructed justice during an investigation or prosecution,

and we held that commentary suggesting obstruction could

occur before the start of an investigation was “clearly

inconsistent” with the guideline. Rising Sun, 522 F.3d

at 995–96. Our decision in United States v. Lambert,

498 F.3d 963, 971 (9th Cir. 2007), involved a similarly

square conflict. And the statement the majority relies on

from United States v. Powell, 6 F.3d 611, 614 (9th Cir.

1993)—that we cannot render part of the Guidelines

“meaningless”—is inapposite. The per-card multiplier does

not render § 2B1.1 “meaningless.”

The majority identifies no case supporting its Kisor-

esque application of Stinson, which in any event directly

conflicts with the holding and reasoning of Yellowe.

C

In disregarding our own law, the majority claims it is

avoiding a circuit split. Maj. Op. 19–20. Untrue. The state

of the law is this: until now, no court has rejected the per-

card multiplier under Stinson; our sister circuits have

routinely applied it, just as we did before today; and the only

UNITED STATES V. KIRILYUK 53

circuit to have rejected it (the Sixth) did so under Kisor and

in a case involving gift cards, not credit cards.

The Seventh Circuit, for instance, has held that the $500-

per-card multiplier applies to all access devices a defendant

possesses. See United States v. Moore, 788 F.3d 693, 695

(7th Cir. 2015). Moore explained that the “commentary

following the guideline is an authoritative interpretive aid for

how the guideline should be applied,” and held that the plain

text of Application Note 3(F)(i) establishes “that the $500

per unauthorized access device amount of loss . . . applies to

all unauthorized access devices in a case.” 788 F.3d at 695.

The Eighth Circuit reached the same conclusion, holding

that a district court did not err in applying the $500-per-card

multiplier to counterfeit credit cards, regardless of whether

the defendant used the card. United States v. Thomas,

841 F.3d 760, 763–65 (8th Cir. 2016).

The First Circuit similarly rejected a challenge to the

$500-per-card multiplier, explaining that “Application Note

3(F)(i) provides that loss both (1) shall include any

unauthorized charges made with the counterfeit access

device or unauthorized access device and (2) shall be not less

than $500 per access device regardless of whether each

access device was actually charged.” United States v.

Rueda, 933 F.3d 6, 9–11 (1st Cir. 2019) (quotations and

alterations omitted). The First Circuit thus rejected the

defendant’s argument “that the loss attributable to her

offense should not be the $1,290,000 calculated by the

District Court,” but “the $24,673.60 that was reflected in the

victim impact statement,” which related to actual wrongful

charges. Id. at 10. Under the majority’s reasoning, the First,

Seventh, and Eighth Circuit decisions would have to come

out the other way.

54 UNITED STATES V. KIRILYUK

Indeed, these and many other circuits—in total, the First,

Second, Third, Fourth, Fifth, Seventh, Eighth, Tenth, and

Eleventh—have repeatedly applied the per-card multiplier

post-Stinson, recognizing it as the governing rule. See, e.g.,

United States v. Acevedo, 860 F. App’x 604, 612–13 (11th

Cir. 2021); United States v. Graveran-Palacios, 835 F.

App’x 436, 445 (11th Cir. 2020); United States v. Carver,

916 F.3d 398, 402 (4th Cir. 2019); United States v. Sosa,

773 F. App’x 140, 140–41 (4th Cir. 2019); United States v.

Fleitas, 766 F. App’x 805, 807–08 (11th Cir. 2019); United

States v. Maitre, 898 F.3d 1151, 1159–61 (11th Cir. 2018);

United States v. Delima, 886 F.3d 64, 72 (1st Cir. 2018);

United States v. Garcia, 727 F. App’x 599, 602 (11th Cir.

2018); United States v. Nelson, 724 F. App’x 814, 818–19

(11th Cir. 2018); United States v. Popovski, 872 F.3d 552,

553 (7th Cir. 2017); United States v. Wright, 862 F.3d 1268,

1274–75 (11th Cir. 2017); United States v. Bendelladj,

710 F. App’x 384, 386–87 (11th Cir. 2017); United States v.

Haywood, 681 F. App’x 290, 292 (4th Cir. 2017); United

States v. Garcia, 634 F. App’x 242, 244–45 (11th Cir. 2015);

United States v. Balde, 616 F. App’x 578, 583–84 (4th Cir.

2015); United States v. Cardenas, 598 F. App’x 264, 266–

67 (5th Cir. 2015); United States v. Nelson, 597 F. App’x 17,

18 (2d Cir. 2015); United States v. Mendez, 589 F. App’x

642, 645 (4th Cir. 2014); United States v. Torres-Bonilla,

556 F. App’x 875, 882 (11th Cir. 2014); United States v.

Bermudez, 536 F. App’x 869, 871 (11th Cir. 2013); United

States v. Miralles, 521 F. App’x 837, 839–40 (11th Cir.

2013); United States v. Volynskiy, 431 F. App’x 8, 9–10 (2d

Cir. 2011); United States v. Heath, 424 F. App’x 730, 735–

37 (10th Cir. 2011); United States v. Harris, 597 F.3d 242,

249 (5th Cir. 2010); United States v. Warthen, 390 F. App’x

977, 978 n.1, 981 n.3 (11th Cir. 2010); United States v.

Dodson, 357 F. App’x 324, 325–26 (2d Cir. 2009); United

States v. Jones, 332 F. App’x 801, 804 n.1, 807 (3d Cir.

UNITED STATES V. KIRILYUK 55

2009); United States v. Kowal, 527 F.3d 741, 748 (8th Cir.

2008); United States v. Lewis, 312 F. App’x 515, 518 (4th

Cir. 2008); United States v. Carralero, 195 F. App’x 874,

877–78 (11th Cir. 2006); United States v. Muhammed,

108 F. App’x 775, 777 (4th Cir. 2004); United States v.

Scott, 250 F.3d 550, 551–53 (7th Cir. 2001); United States

v. Sowels, 998 F.2d 249, 252 (5th Cir. 1993).

The only circuit that has taken a different approach is the

Sixth Circuit in Riccardi. But the majority here cannot

purport to “align [itself] with the Sixth Circuit,” Maj.

Op. 19–20, when that court applied Kisor, not Stinson. See

Riccardi, 989 F.3d at 484–85. And as I flagged above,

Riccardi involved a critically different set of facts: the

defendant was charged with stealing 1,505 gift cards from

the mail. Id. at 479. This included, for example, a $25

Starbucks gift card, with the gift cards having an average

face value of $35 each. Id. at 479–80.

Although the Sixth Circuit concluded that the gift cards

were “access devices” subject to the $500-per-card

multiplier, id. at 479, 482–83, there is a world of difference

between gift cards and credit cards. Charges on a gift card

max out at the value of the card, whereas much more can be

charged to a credit card than $35. The collateral damage also

differs substantially. When a gift card is stolen, there may

be some costs associated with replacing it. But those

amounts surely pale in comparison to the costs associated

with credit card fraud, which are borne by cardholders and

financial institutions alike. See United States v. Pham,

545 F.3d 712, 721 (9th Cir. 2008) (identifying some of these

costs). In purporting to associate our court with the Sixth

Circuit, the majority thus relies on a case that involved

materially different facts.

56 UNITED STATES V. KIRILYUK

Of course, when the majority says it is aligning with the

Sixth Circuit, what it means is that it is siding with a separate

opinion in Riccardi that did not command a majority there.

See Riccardi, 989 F.3d at 490–93 (Nalbandian, J.,

concurring). Judge Nalbandian believed Stinson still applied

to Guidelines commentary but would invalidate the per-card

multiplier under Stinson. Id. at 492. Until today, no court

had adopted that position. In aligning our circuit with a

novel separate writing in this area of law, the majority puts

us at odds with both our own precedent and that of every

other circuit.

D

Finally, the majority cannot justify its departure from

settled law by claiming that Kirilyuk’s sentence is an

“egregious problem” considering that the amounts he

actually charged to credit cards were much lower than the

presumptive loss amount under the per-card multiplier. Maj.

Op. 18. Here too the majority misperceives our role,

enshrining into law one possible perspective on sentencing

policy rather than respecting the judgment of the Sentencing

Commission and the experienced district court judge who

conducted Kirilyuk’s sentencing.

As the majority itself explains, “Kirilyuk and his

associates engaged in a massive, international fraud scheme”

that “involved layers of sophistication.” Maj. Op. 5.

Working with Russian partners and with Kirilyuk in the lead,

the co-conspirators created sham merchant accounts and

linked bank accounts using stolen identities, including those

of 220 Sacramento high school students through their stolen

school transcripts. The merchant accounts had names like

“Best Box,” “Chevran,” and “CVS Store,” designed to look

close enough to real companies to avoid detection.

UNITED STATES V. KIRILYUK 57

Then, using nearly 120,000 stolen credit card numbers

obtained by Russian hackers, the co-conspirators made over

190,000 fraudulent charges to the fake merchant accounts,

routed the money to the sham bank accounts, and then

withdrew it from the banks or wired it overseas. They even

set up phone numbers for the fake businesses, so that when

an American Express cardholder saw a suspicious charge

and called the number, the co-conspirators could remove the

charge and prolong their scheme. It took the combined

efforts of American Express, Wells Fargo, and the FBI to

uncover this multi-year criminal operation. Even after his

arrest, Kirilyuk skipped bail and had to be apprehended in

Mexico City. At trial, he was convicted on all charges.

The majority finds Kirilyuk’s 22-level loss enhancement

“egregious” because his fraudulent scheme “involved

$1.4 million in actual losses or $3.4 million in intended

losses.” Maj. Op. 18. But the Sentencing Commission and

district court could recognize that using those lower numbers

would create an “egregious” problem of its own: those much

lesser amounts do not nearly reflect the full magnitude of

Kirilyuk’s criminality. Indeed, this is precisely why Yellowe

held that the multiplier was appropriate: because other

metrics “would understate the severity of the offense.”

24 F.3d at 1113.

It is also important to unpack the majority’s numbers

here. The $1.4 million figure, which the majority calls

“actual losses,” is the amount of false merchant account

charges that American Express had already approved. The

$3.4 million figure, which the majority calls the “intended

loss,” includes the additional charges that Kirilyuk submitted

but which American Express declined to process.

The majority reasons that “the conspiracy was designed

to charge only $15 to $30 per credit card.” Maj. Op. 18. But

58 UNITED STATES V. KIRILYUK

all we know is that Kirilyuk’s conspiracy was stopped at this

point, before further fraudulent charges were incurred. See

Delima, 886 F.3d at 75 (“Actual losses were lower than

intended losses because federal agents seized the

conspirators’ equipment and inventory, preventing the

conspirators from profiting from the remaining numbers.”).

The Sentencing Commission and the district court were not

required to accept Kirilyuk’s self-serving attempt to put a

ceiling on the ambitions of his massive international fraud

operation. Nor were they required to blind themselves to the

many other costs that this kind of scheme necessarily

imposes beyond the bare amounts charged to the stolen card

numbers.

Of course, if the district court judge who conducted

Kirilyuk’s trial and sentencing thought that a 22-level loss

enhancement was too high, the judge had the discretion to

grant a downward departure. See U.S.S.G. § 2B1.1, cmt.

n.21(C). Kirilyuk in fact asked the district court for such a

downward departure, but the court declined. The Guidelines

themselves are also advisory in nature only. But rather than

allowing district courts the option of a downward departure

or a lower sentence, the majority is now effectively forcing

this upon them. In my respectful view, that choice is not the

majority’s to make.

III

The full implications of the majority’s opinion will likely

be far-reaching and destabilizing. The per-card multiplier

has been applied in our circuit, and in district courts across

our circuit, for decades. Now it can no longer be applied to

any defendant. In its place, district courts are left with

uncertainty as to the proper measure of loss for unauthorized

access device crimes. And it remains unclear whether other

measures of Guidelines “loss” may also now be invalid as

UNITED STATES V. KIRILYUK 59

well. Indeed, many aspects of the Guidelines commentary

may be open to challenge under the majority’s Kisor-

charged approach to Stinson—even commentary provisions

backed by thirty years of circuit precedent. On these and

many other questions, we should likely expect a wave of

post-conviction motions and requests for re-sentencing.

We should not have gone down this road. Yellowe

foreclosed it. Stinson foreclosed it. The law of nearly every

other circuit counseled against it. I respectfully dissent from

this unprecedented departure from governing law.