# United States v. Ruslan Kirilyuk

> Court of Appeals for the Ninth Circuit · April 1, 2022 · 29 F.4th 1128

URL: https://www.frixlaw.com/law-library/cases/6329541

## Case

- **Court:** Court of Appeals for the Ninth Circuit
- **Decided:** April 1, 2022
- **Citations:** 29 F.4th 1128
- **Precedential status:** Published
- **Opinion:** Opinion
- **Nature of suit:** Criminal
- **Cited by:** 37 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/6329541

## How later opinions describe it (automated extraction)

- explaining that “cases are not precedential for propositions not considered,” so “if a prior case does not raise or consider the implications of a legal argument, it does not constrain our analysis” (cleaned up)
- noting that even though “two published cases” had interpreted and applied the application note at issue, “no Ninth Circuit case ha[d] considered whether [the] Application Note . . . conflicts with the meaning of ‘loss’” in the Guidelines, and therefore the issue 20 UNITED STAT…
- applying Stinson and holding that $500 minimum 9 USCA4 Appeal: 21-4449 Doc: 39 Filed: 01/06/2023 Pg: 10 of 12 is inconsistent with word “loss” in text
- holding that we apply “the ordinary tools of statutory interpretation” when interpreting the Sentencing Guidelines

## Opinion text

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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6329541. Public record. Not legal advice.