Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-18-10026/USCOURTS-ca9-18-10026-0/pdf.json

Parties Involved:
Karen Gagarin
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

KAREN GAGARIN,

Defendant-Appellant.

No. 18-10026

D.C. No.

3:14-cr-00627-SI-4

OPINION

Appeal from the United States District Court

for the Northern District of California

Susan Illston, District Judge, Presiding

Argued and Submitted September 9, 2019

San Francisco, California

Filed February 13, 2020

Before: Ronald M. Gould, Carlos T. Bea, and

Michelle T. Friedland, Circuit Judges.

Opinion by Judge Gould;

Concurrence by Judge Friedland

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2 UNITED STATES V. GAGARIN

SUMMARY*

Criminal Law

The panel affirmed a conviction for aggravated identity 

theft under 18 U.S.C. § 1028A(a)(1), a three-level sentence 

enhancement, and the restitution order in a case in which the 

defendant and her co-conspirators participated in a scheme 

to defraud a life insurance company by submitting fraudulent 

insurance applications on behalf of individuals who, in 

general, did not intend to apply for life insurance or know 

that their identifying information was being used. 

The panel rejected the defendant’s challenges to the 

district court’s denial of her motion for judgment of acquittal 

on the aggravated identity theft count.

The panel held that the defendant “used” a means of 

identification under the meaning of § 1028A(a)(1), where 

her forgery of her cousin’s signature on a fraudulent 

application was central to the fraud and “furthered and 

facilitated” its commission.

The panel rejected the defendant’s contention that in 

order to show that she acted “without lawful authority” as 

required by the statute, the Government must show that her 

use of the means of identification was “itself illegal.” The 

panel explained that the defendant’s use of her cousin’s 

identity during and in relation to the wire fraud was 

sufficient.

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

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

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UNITED STATES V. GAGARIN 3

The panel wrote that the Seventh Circuit’s interpretation 

of “another person” in United States v. Spears, 729 F.3d 753 

(7th Cir. 2013) (en banc), to mean “a person who did not 

consent to the use of the means of identification” contradicts 

this court’s holding in United States v. Osuna-Alvarez, 788 

F.3d 1183, 1185-86 (9th Cir. 2015) (per curiam). The panel 

thus held that even if the defendant had her cousin’s consent 

to file an insurance application for her, the panel would 

follow this circuit’s precedent to hold that the defendant used 

the means of identification of “another person” by using the 

identification of another “actual person.”

The panel held that the district court did not abuse its 

discretion and commit significant procedural error by 

imposing a three-level “manager or supervisor” 

enhancement under U.S.S.G. § 3B1.1(b).

Upholding the restitution order, the panel wrote that 

there is no indication that the district court employed an 

erroneous valuation methodology that focused on a criterion 

other than the actual losses of the victim, and held that the 

district court did not abuse its discretion by declining to 

deduct the purported value of “back-end” accounts from the 

restitution award. The panel declined to second-guess the 

district court’s imposition of joint and several liability, and 

rejected as unavailing the defendant’s contention that the 

restitution schedule is internally inconsistent.

Concurring except as to the penultimate paragraph of 

Part II.C, Judge Friedland wrote that she is disinclined to 

criticize the analysis of the unanimous en banc Seventh 

Circuit decision in Spears “on its own terms,” as the majority 

does.

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4 UNITED STATES V. GAGARIN

COUNSEL

Carmen A. Smarandoiu (argued), Chief, Appellate Unit; 

Candis Mitchell, Assistant Federal Public Defender; Steven 

G. Kalar, Federal Public Defender; Office of the Federal 

Public Defender, San Francisco, California; for DefendantAppellant.

Kirstin M. Ault (argued), Assistant United States Attorney; 

Merry Jean Chan, Chief, Appellate Section, Criminal 

Division; David L. Anderson, United States Attorney; 

United States Attorney’s Office, San Francisco, California;

for Plaintiff-Appellee.

OPINION

GOULD, Circuit Judge:

Defendant Karen Gagarin was convicted of conspiracy 

to commit wire fraud, wire fraud, and aggravated identity 

theft. The district court sentenced her to a total of 36 months 

in prison, after concluding that a three-level “manager or 

supervisor” sentencing enhancement applied to Gagarin’s 

role in the scheme to defraud the American Income Life 

Insurance Company (AIL). It also imposed a restitution 

order, which held Gagarin jointly and severally liable with 

her convicted co-conspirators for the full loss suffered by 

AIL. On appeal, Gagarin challenges the district court’s 

denial of her post-trial motion for a judgment of acquittal on 

the aggravated identity theft count, its imposition of the 

three-level sentencing enhancement, and the restitution 

order. We affirm.

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UNITED STATES V. GAGARIN 5

I.

In late 2011, Benham Halali devised a scheme to defraud 

AIL of millions of dollars. Halali ran the San Jose, Fresno, 

Roseville, and Concord offices of the Jatoft-Foti Agency 

(JFA), the exclusive California sales agent of AIL. Between 

September 2011 and Spring 2012, Halali and coconspirators in those offices, all independent contractors of 

AIL, submitted hundreds of fraudulent insurance 

applications to AIL on behalf of individuals who, in general, 

did not intend to apply for life insurance or know that their 

identifying information was being used. Karen Gagarin was 

a General Agent with sales and managerial responsibility in 

JFA’s San Jose office, and she ran the office when Halali 

was away. It is undisputed that she knowingly participated 

in the fraudulent scheme.

The conspiracy took advantage of AIL’s system of 

compensating agents for insurance policy sales. For each 

policy an agent purportedly sold, the agent received 

advanced commissions and bonuses from AIL according to 

a specified percentage of the premiums that the policy would 

be expected to generate during the year. The conspirators 

then paid about four months of premiums on the fraudulent 

policies, from hundreds of different bank accounts opened 

for that purpose, before defaulting. According to AIL’s 

compensation structure, policies that lapsed before the end 

of four months resulted in the agents being “charged back” 

for their unearned advances, but policies that lapsed after 

four months would result in only a debit of the unearned 

value against the agents’ “back-end” accounts. These backend accounts served as a retirement account of sorts, 

representing the net earnings an agent could anticipate 

collecting after leaving the agency, subject to certain 

conditions. By keeping the fraudulent policies active for 

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6 UNITED STATES V. GAGARIN

four months, conspiring agents were able to pocket the 

difference between their advanced compensation and the 

premiums they paid on the policies. During the course of 

this conspiracy, the conspirators submitted about 

700 fraudulent applications, although not all applications 

resulted in issued policies.

To convince AIL of the legitimacy of the fraudulent 

policies, the conspirators forged electronic signatures on the 

insurance applications and gave other identifying 

information of the purported applicants. The conspirators 

also misrepresented information about the applicants on the 

insurance applications to increase the likelihood that AIL 

would grant a policy. When AIL made phone calls to verify 

the applicant’s identity, the conspirators, including Gagarin, 

would impersonate the purported applicant from dozens of 

cell phones purchased for that purpose. When AIL requested 

a medical examination to determine eligibility for insurance, 

the conspirators engaged in a variety of tactics to accomplish 

the medical examination, including creating fake drivers’ 

licenses to impersonate applicants during the medical 

examinations. Halali also encouraged agents to sign up 

friends and family members for fraudulent policies by 

offering them the opportunity to get a free medical exam.

When Gagarin was not managing JFA’s San Jose office 

in Halali’s absence, her day-to-day responsibilities included 

selling policies for AIL and supervising certain agents within 

the office. On several occasions, Gagarin submitted 

insurance applications that falsely listed these agents as the 

“writing agent”—the agent who had executed the policy. 

Because the policy would then be registered officially in 

those agents’ names, Gagarin would ask them to reimburse 

her for the advanced commissions and bonuses they were 

paid on those policies.

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UNITED STATES V. GAGARIN 7

In September 2011, AIL received an electronic insurance 

application from Melissa Gilroy, Gagarin’s cousin. 

Although not listed as the writing agent, by all accounts 

Gagarin was the agent who executed and submitted the 

application. The application contained false information 

about Gilroy’s employment status, salary, and the nature of 

her relationship with the intended beneficiary. Although the 

application contained Gilroy’s electronic signature 

indicating that she was the payor of the policy, the bank 

account connected to the policy actually belonged to Steven 

Nguyen—the brother of an admitted co-conspirator in the 

scheme—and was later replaced by a bank account held in 

Gagarin’s name. Elsewhere, the application contained 

Gilroy’s electronic signature, purportedly certifying that all 

information in the application was true and correct to the best 

of her knowledge. The requested policy coverage was for 

more than $300,000, at a monthly premium of $236.

Pursuant to a grant of immunity, Gilroy testified at trial 

that she had asked her cousin Gagarin to “sign [her] up for a 

policy” after experiencing a health scare. Gilroy further 

testified that she had asked Gagarin to state falsely that 

Metro PCS was her place of employment because she 

worried she would be denied insurance if AIL knew she was 

unemployed. At the same time, Gilroy testified that she had 

intended to pay for the policy herself and never asked 

Gagarin to pay for it through anyone else’s bank account. 

Nor had she asked Gagarin to lie about the nature of her 

relationship to the named beneficiary. Gilroy also stated that 

she never discussed the type of coverage, the coverage 

amount, or the premium amount with Gagarin. Although she 

had previously worked for AIL for a few months, she stated 

that she was not familiar with AIL’s new electronic 

application process and that she had never seen the 

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8 UNITED STATES V. GAGARIN

application in question, let alone typed or otherwise 

electronically signed her name on it.

In December 2014, a grand jury indicted five people—

Benham Halali, Ernesto Magat, Kraig Jilge, Karen Gagarin, 

and Alomkone Soundara—on charges of conspiracy to 

commit wire fraud under 18 U.S.C. § 1349; wire fraud under 

18 U.S.C. § 1343; and aggravated identity theft under 

18 U.S.C. § 1028A. Jilge and Soundara pleaded guilty 

pursuant to a cooperation agreement, while Halali, Magat, 

and Gagarin went to trial. At trial, the jury found Halali, 

Magat, and Gagarin guilty of all charges. Gagarin was found 

guilty of fourteen counts of wire fraud, including Count 10 

in connection with the Gilroy insurance application. The 

Gilroy application also was the basis for Gagarin’s Count 24 

conviction for aggravated identity theft.

Gagarin filed a post-trial motion for a judgment of 

acquittal, pursuant to Rule 29 of the Federal Rules of 

Criminal Procedure, contending that insufficient evidence 

supported her wire fraud conviction under Count 10 and her 

aggravated identity theft conviction under Count 24. The 

district court denied the motion on both counts.

At sentencing, the district court concluded that a threelevel sentencing enhancement for having a “manager or 

supervisor” role applied to Gagarin on the underlying fraud 

counts, pursuant to § 3B1.1(b) of the United States 

Sentencing Guidelines. Finding, nonetheless, that Gagarin 

was “far less culpable than the other two,” the court 

sentenced her to only 12 months of incarceration for the 

conspiracy and fraud counts. In addition, the court 

sentenced Gagarin to the mandatory minimum 24 months for 

the aggravated identity theft conviction, to run consecutively 

with the 12-month sentence, for a total of 36 months in 

prison.

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UNITED STATES V. GAGARIN 9

The district court also held Gagarin jointly and severally 

liable with Halali and Magat for restitution to AIL for its 

losses, which the court assessed at $2,837,791.93, 

representing the total amount of advances AIL had paid out 

to the conspirators, less the money AIL had already 

recovered.

In this timely appeal, Gagarin challenges the district 

court’s denial of her post-trial motion for acquittal on the 

aggravated identity theft count, the court’s imposition of the 

three-level sentencing enhancement on the fraud claims, and 

the court’s order of restitution. We have jurisdiction 

pursuant to 28 U.S.C. § 1291.

II

We review de novo a district court’s denial of a Rule 29 

motion for a judgment of acquittal. United States v. Grovo, 

826 F.3d 1207, 1213 (9th Cir. 2016). Upon a defendant’s 

motion, the court “must enter a judgment of acquittal of any 

offense for which the evidence is insufficient to sustain a 

conviction.” Fed. R. Crim. P. 29(a). In determining whether 

evidence was insufficient to sustain a conviction, we 

consider whether, “after viewing the evidence in the light 

most favorable to the prosecution, any rational trier of fact 

could have found the essential elements of the crime beyond 

a reasonable doubt.” United States v. Nevils, 598 F.3d 1158, 

1163–64 (9th Cir. 2010) (en banc) (quoting Jackson v. 

Virginia, 443 U.S. 307, 319 (1979)).

Here, we consider whether, viewing the evidence in the 

light most favorable to the prosecution, any rational trier of 

fact could have found the essential elements of aggravated 

identity theft beyond a reasonable doubt. In relevant part, 

“[w]hoever, during and in relation to any felony violation 

enumerated in subsection (c),” including wire fraud, 

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10 UNITED STATES V. GAGARIN

“knowingly transfers, possesses, or uses, without lawful 

authority, a means of identification of another person” is 

guilty of aggravated identity theft. 18 U.S.C. § 1028A(a)(1). 

Gagarin claims that three essential elements were not 

satisfied, contending that (1) she did not “use” a means of 

identification “during and in relation to” the commission of 

wire fraud under the terms of the statute, (2) she did not act 

“without lawful authority,” and (3) she did not use the means 

of identification of “another person.” We review questions 

of statutory interpretation de novo. United States v. OsunaAlvarez, 788 F.3d 1183, 1185 (9th Cir. 2015) (per curiam). 

The parties dispute, as a threshold matter, whether a rational 

trier of fact could have concluded that, contrary to Gilroy’s 

testimony, Gilroy never requested Gagarin’s help applying 

for insurance. We do not resolve this dispute because, 

assuming arguendo that any rational trier of fact would have 

determined that Gilroy did make such a request, we conclude 

nonetheless that sufficient evidence supports each element 

of the offense.

A

After oral arguments in this appeal, another panel of our 

court addressed the meaning of “use” under the aggravated 

identity theft statute. See United States v. Hong, 938 F.3d 

1040, 1049–51 (9th Cir. 2019). Drawing on previous 

treatment of this term in the context of § 1028A by the First 

and Sixth Circuits, we held in Hong that the owner of several 

massage and acupuncture clinics did not “use” a means of 

identification when, in order to fraudulently qualify for 

Medicare reimbursement, he merely misrepresented the 

nature of treatment that actual patients of his received. Id. at 

1051. We reasoned that “[n]either Hong nor the physical 

therapists [complicit in his scheme] ‘attempt[ed] to pass 

themselves off as patients.’” Id. (quoting United States v. 

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UNITED STATES V. GAGARIN 11

Berroa, 856 F.3d 141, 156 (1st Cir. 2017)). Nor did they 

“‘purport[] to take some other action on another person’s 

behalf’ through impersonation or forgery.” Id. at 1051 n.8 

(quoting United States v. Valdez-Ayala, 900 F.3d 20, 35 (1st 

Cir. 2018)). As a result, the defendant did not “use” a means 

of identification “during and in relation to” his commission 

of health insurance fraud. Id. at 1051. In reaching this 

holding, Hong relied on a line of cases from the Sixth Circuit 

which that court has summarized as establishing that “[t]he 

salient point is whether the defendant used the means of 

identification to further or facilitate” the predicate felony for 

the aggravated identity theft charge. United States v. 

Michael, 882 F.3d 624, 627–28 (6th Cir. 2018) 

(summarizing the circuit’s approach).1

Here, Gagarin purported to take action on behalf of her 

cousin Melissa Gilroy, and in so doing used Gilroy’s identity 

to further the fraudulent insurance application. As Gilroy 

testified, Gilroy never asked Gagarin to sign an insurance 

application in her name, nor did the two ever discuss 

specifics, such as the type or amount of coverage Gilroy 

wanted or the premium she would be willing to pay. Instead, 

they discussed in a general sense Gilroy’s desire that 

Gagarin help her find an insurance policy, and Gilroy never 

saw, let alone signed, the particular application that was 

submitted to AIL. Viewing the facts in the light most 

favorable to the prosecution, Nevils, 598 F.3d at 1163–64, 

the inescapable inference is that Gagarin forged Gilroy’s 

signature in two places on that application. The application 

1 In Michael, the Sixth Circuit held that the defendant “used” a 

means of identification when he “fashion[ed] a fraudulent submission 

out of whole cloth.” 882 F.3d at 629. It noted that, if he had merely 

“inflated the amount of drugs he dispensed, the means of identification 

. . . would not have facilitated the fraud.” Id.

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12 UNITED STATES V. GAGARIN

contained falsehoods and constituted the basis of Gagarin’s 

Count 10 wire fraud conviction, which is unchallenged on 

appeal. At the same time, Gagarin’s forgery of Gilroy’s 

signature falsely conveyed the impression that Gilroy herself 

certified that “the answers set forth above are full, complete 

and true to the best of my knowledge and belief.”

Unlike Hong, in which the defendant submitted 

documents about his own eligibility for certain benefits, 

938 F.3d at 1049–51, Gagarin “attempt[ed] to pass [herself] 

off” as her cousin through forgery and impersonation. Id.

at 1051; see also United States v. Blixt, 548 F.3d 882, 886 

(9th Cir. 2008) (holding “that forging another’s signature 

constitutes the use of that person’s name and thus qualifies 

as a ‘means of identification’ under 18 U.S.C. § 1028A”). 

As our sister circuits have recognized, “the use of another 

person’s means of identification makes a fraudulent claim 

for payment much harder to detect,” United States v. 

Medlock, 792 F.3d 700, 707 (6th Cir. 2015) (quoting United 

States v. Abdelshafi, 592 F.3d 602, 610 (4th Cir. 2010)), and 

Gagarin’s forgery of her cousin’s signature did just that by 

obscuring her own role in the fraudulent application. Her 

use of Gilroy’s means of identification was thus central to 

the fraud and “furthered and facilitated” its commission. For 

these reasons, we hold that Gagarin’s actions constituted 

“use” under the meaning of the aggravated identity theft 

statute.

B

Gagarin also contends that she did not act “without 

lawful authority,” a required element of aggravated identity 

theft. We disagree. We have held that “despite its title, 

§ 1028A does not require theft as an element of the offense.” 

Osuna-Alvarez, 788 F.3d at 1185. We have further held that 

§ 1028A’s prohibition of the use of another person’s means 

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UNITED STATES V. GAGARIN 13

of identification “without lawful authority” “clearly and 

unambiguously encompasses situations . . . where an 

individual grants the defendant permission to possess his or 

her means of identification, but the defendant then proceeds 

to use the identification unlawfully.” Id.

Gagarin acknowledges that, in light of Osuna-Alvarez, 

even if Gilroy consented to the submission of the insurance 

application, this would not mean that Gagarin had “lawful 

authority.” Gagarin argues that, in order to show that she 

acted “without lawful authority,” the Government must 

show that her use of the means of identification was “itself 

illegal.”

We disagree. Whether a particular use was “itself 

illegal” relates to the degree of connection between the use 

of the identity and the predicate felony. But the statute 

already contains language about the required nexus: the use 

must be “during and in relation to” specified unlawful 

activity. Here, for the reasons stated above, Gagarin used 

Gilroy’s identity during and in relation to the wire fraud that 

Gagarin does not challenge occurred here. Gagarin has not 

shown that use “without lawful authority” required more in 

this case.

C

Next, Gagarin invites us to adopt the Seventh Circuit’s 

interpretation of “another person.” The Seventh Circuit has 

construed the phrase “another person” in the aggravated 

identity theft context to mean “a person who did not consent 

to the use of the ‘means of identification.’” United States v. 

Spears, 729 F.3d 753, 758 (7th Cir. 2013) (en banc). The 

Seventh Circuit found ambiguous the question of whether 

“another person” refers to a “person other than the 

defendant” or a “person who did not consent to the 

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14 UNITED STATES V. GAGARIN

information’s use” and therefore resorted to several tools of 

statutory interpretation to resolve the perceived ambiguity. 

Id. at 756–58. It was concerned that a broad construction of 

the phrase “would convert most identity fraud into identity 

theft and add a mandatory, consecutive, two-year term to 

every conviction,” even as it acknowledged that § 1028A’s 

abbreviated list of predicate offenses “is one reason why 

§ 1028A carries a harsher sentence” than the identity fraud 

statute. Id. at 757. The Seventh Circuit further cited to the 

statutory caption—Aggravated Identity Theft—and the Rule 

of Lenity to support its conclusion that “another person” 

applies only to a person who did not consent to the 

information’s use. Id. at 756–58.

Gagarin argues that because Gilroy requested that 

Gagarin file an insurance application for her, under Spears

the “another person” element of aggravated identity theft is 

not satisfied here.2 But following Spears to so hold would 

conflict with our precedent in Osuna-Alvarez. Interpreting 

“another person” to mean “a person who did not consent to 

the use of the means of identification” contradicts our 

holding that, “regardless of whether the means of 

identification was stolen or obtained with the knowledge and 

2 In United States v. Maciel-Alcala, we considered another aspect of 

the term “another person”—specifically, whether “another person” 

“encompass[es] both living and deceased persons.” 612 F.3d 1092, 

1100–01 (9th Cir. 2010). We concluded that it applies to either “so long 

as the person is an actual person.” Id. at 1101 (citing Flores-Figueroa v. 

United States, 556 U.S. 646, 654 (2009), which referred to “another 

person” as a “real person” in determining the scope of § 1028A’s 

“knowledge” requirement); see also United States v. Doe, 842 F.3d 

1117, 1119–20 (9th Cir. 2016) (“To prove a violation of § 1028A, the 

Government must prove . . . [t]he defendant knew the means of 

identification belonged to a real person . . . .”). Gagarin does not dispute 

that Gilroy is covered by this aspect of what it means to be “another 

person.”

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UNITED STATES V. GAGARIN 15

consent of its owner, the illegal use of the means of 

identification alone violates § 1028A.” Osuna-Alvarez, 

788 F.3d at 1185–86. Under the Seventh Circuit’s 

construction, that case would have been wrongly decided, 

because it affirmed the defendant’s conviction despite the 

fact that the defendant had permission to use his brother’s 

passport. See id.3

Nor are we convinced by the interpretive analysis of 

Spears on its own terms. The phrase “another person” does 

not appear particularly ambiguous on its face, especially 

when we have already determined the phrase refers to 

another “actual person.” Maciel-Alcala, 612 F.3d at 1101. 

The plain reading of “another person” seems to us to be an 

actual “person other than the defendant.” Contra Spears, 

729 F.3d at 756 (rejecting this reading). Since “[a] statute’s 

caption . . . cannot undo or limit its text’s plain meaning,” 

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 

242 (2004), § 1028A’s caption of “Aggravated Identity 

Theft” does not alter the plain meaning of “another person.” 

Recourse to the Rule of Lenity is not necessary because 

“another person” is unambiguous.

In summary, even if Gagarin had Gilroy’s consent, we 

follow our circuit precedent to hold that Gagarin used the 

3 In Osuna-Alvarez, we cited the panel opinion in Spears, which was 

vacated by the Seventh Circuit’s en banc decision, as consistent with our 

holding regarding “without lawful authority.” See 788 F.3d at 1185. We 

did not, however, indicate that the Spears en banc opinion was consistent 

with our holding. Today we recognize that it would not be workable to 

adopt both the Spears en banc interpretation of “another person” and the 

Osuna-Alvarez interpretation of “without lawful authority.” That the 

cases interpreted different words in the statute cannot obscure that 

Spears made available a consent defense that Osuna-Alvarez squarely 

rejected.

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16 UNITED STATES V. GAGARIN

means of identification of “another person” by using the 

identification of another “actual person.”

III

Gagarin challenges the district court’s application of a 

three-level “manager or supervisor” role sentencing 

enhancement, pursuant to § 3B1.1(b) of the United States 

Sentencing Guidelines. “A mistake in calculating the 

recommended Guidelines sentencing range is a significant 

procedural error that requires us to remand for 

resentencing.” United States v. Munoz-Camarena, 631 F.3d 

1028, 1030 (9th Cir. 2011). “[A]s a general rule, a district 

court’s application of the Sentencing Guidelines to the facts 

of a given case should be reviewed for abuse of discretion.” 

United States v. Gasca-Ruiz, 852 F.3d 1167, 1170 (9th Cir. 

2017) (en banc), cert. denied, 138 S. Ct. 229 (2017). 

Although “[i]t is not necessary that the district court make 

specific findings of fact to justify the imposition of the role 

enhancement,” there must be evidence in the record to 

support the enhancement. United States v. Holden, 908 F.3d 

395, 401 (9th Cir. 2018) (quoting United States v. Whitney, 

673 F.3d 965, 975 (9th Cir. 2012)), cert. denied, 139 S. Ct. 

1645 (2019).

To qualify for a three-level sentencing enhancement 

under § 3B1.1(b), a defendant must have managed or 

supervised one or more other “participants” in an extensive 

criminal activity.4 United States v. Gadson, 763 F.3d 1189, 

1222 (9th Cir. 2014). A participant is a person “who [is] 

criminally responsible for the commission of the offense, but 

4 Gagarin does not dispute that the conspiracy to defraud AIL 

involved five or more participants or was otherwise extensive, as 

required for § 3B1.1 to apply.

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UNITED STATES V. GAGARIN 17

[who] need not have been convicted.” Id. (internal quotation 

marks and citation omitted). In determining by a 

preponderance of the evidence whether the enhancement 

applies, the district court considers factors such as:

the exercise of decision making authority, the 

nature of participation in the commission of 

the offense, the recruitment of accomplices, 

the claimed right to a larger share of the fruits 

of the crime, the degree of participation in 

planning or organizing the offense, the nature 

and scope of the illegal activity, and the 

degree of control and authority exercised 

over others.

U.S.S.G. § 3B1.1 cmt. n.4; Gadson, 763 F.3d at 1222. In 

particular, “there must be evidence that the defendant 

exercised some control over others involved in commission 

of the offense [or was] responsible for organizing others for 

the purpose of carrying out the crime.” Gadson, 763 F.3d at 

1222 (quoting United States v. Riley, 335 F.3d 919, 929 (9th 

Cir. 2003)). The role enhancement cannot apply if the 

defendant and the other participant are merely “co-equal 

conspirators.” Holden, 908 F.3d at 402.

The district court did not abuse its discretion because 

“evidence in the record supports an inference that [Gagarin] 

exercised the requisite degree of control” over at least one 

criminally responsible participant, Reza Zabihi. Gadson, 

763 F.3d at 1222. There is no dispute that Zabihi, who joined 

the San Jose office of JFA as an intern a few months before 

the initiation of the conspiracy, was a criminally responsible 

participant in the fraudulent scheme. At the time of the 

offenses, Zabihi served as a sales agent of AIL policies and 

as an unofficial personal assistant to Halali, even as Zabihi 

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held the “joke” title of HR manager. On many occasions, 

Zabihi complied with Halali’s instructions to “Go get me 

two free accounts,” which Zabihi knew meant unused bank 

accounts that could be used to pay fraudulent policies.

Although Zabihi principally answered to Halali, Gagarin 

ran the San Jose office when Halali was absent and was thus 

in charge of Zabihi during those times. That both Gagarin 

and Zabihi took instructions from Halali does not mean that 

they were “co-equal conspirators.” See U.S.S.G. § 3B1.1 

cmt. n.4 (“There can, of course, be more than one person 

who qualifies as a leader or organizer of a criminal 

association or conspiracy.”); see also Holden, 908 F.3d 

at 402–03 (overturning the imposition of a sentencing 

enhancement where the district court expressly determined 

that the only two conspirators were “co-equal” but 

nonetheless impermissibly imposed a role enhancement). In 

addition to running the office in Halali’s place, Gagarin also 

guided Zabihi through actions to further the conspiracy. On 

at least one occasion, she instructed Zabihi to “give [her] two 

bank accounts” for use in paying premiums on fraudulent 

policies. Zabihi also testified that he gave Gagarin Google 

Voice phone numbers for her to use on applications as the 

numbers for fake insurance applications. Cross-examination 

of Zabihi, which showed that he had neglected to inform 

investigators of Gagarin’s role in the conspiracy on multiple 

occasions, also may have created a reasonable inference that 

Zabihi’s testimony was less than forthcoming about the 

extent of Gagarin’s involvement. On these bases, enough 

evidence in the record existed for the district court to infer, 

by a preponderance of the evidence, that Gagarin exercised 

control over Zabihi, a criminally responsible participant in 

the conspiracy. Gadson, 763 F.3d at 1222. We hold that the 

district court did not abuse its discretion and commit 

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UNITED STATES V. GAGARIN 19

significant procedural error by imposing a three-level 

“manager or supervisor” enhancement.

IV

The legality of a restitution order is reviewed de novo, 

United States v. Galan, 804 F.3d 1287, 1289 (9th Cir. 2015), 

as is the district court’s “valuation methodology,” United 

States v. Berger, 473 F.3d 1080, 1104 (9th Cir. 2007). If 

“the order is within statutory bounds,” then the restitution 

calculation is reviewed for abuse of discretion, with any 

underlying factual findings reviewed for clear error. Galan, 

804 F.3d at 1289. We also review a district court’s decision 

to impose joint and several liability for abuse of discretion. 

United States v. Booth, 309 F.3d 566, 576 (9th Cir. 2002).

A

Under the Mandatory Victims Restitution Act (MVRA), 

which applies “in all sentencing proceedings for convictions 

of . . . an offense against property under this title . . .

including any offense committed by fraud or deceit,” 

18 U.S.C. § 3663A(c)(1)(A)(ii), a court must order 

restitution to each victim in the full amount of the victim’s 

losses, 18 U.S.C. § 3664(f)(1)(A). Because “[t]he purpose 

of restitution is to put the victim back in the position he or 

she would have been but for the defendant’s criminal 

conduct,” United States v. Gossi, 608 F.3d 574, 581 (9th Cir. 

2010), the “amount of restitution is limited to the victim’s 

‘actual losses’ that are a direct and proximate result of the 

defendant’s offense,” United States v. Thomsen, 830 F.3d 

1049, 1065 (9th Cir. 2016) (quoting United States v. Eyraud, 

809 F.3d 462, 467 (9th Cir. 2015)). Actual loss represents 

the difference between “(1) the loss [the victim] incurred 

because of the unlawful conduct, [and] (2) the loss the 

[victim] would have incurred had [defendant] acted 

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lawfully.” United States v. Bussell, 504 F.3d 956, 965 (9th 

Cir. 2007).

A district court is to resolve disputes as to the proper 

amount of restitution by a preponderance of the evidence. 

18 U.S.C. § 3664(e). Although the Government bears the 

initial burden of proving the loss amount, “[t]he question of 

who bears the burden for establishing a right to statutory 

offset is . . . left to the court’s determination of what ‘justice 

requires.’” United States v. Crawford, 169 F.3d 590, 593 n.2 

(9th Cir. 1999); see 18 U.S.C. § 3664(e) (for matters other 

than proving the loss amount or the defendant’s financial 

resources, the burden “shall be upon the party designated by 

the court as justice requires”). For that reason, we have 

upheld a restitution order where “it appears that the district 

court placed this burden on the defendant.” Crawford, 

169 F.3d at 593 n.2; accord United States v. Serawop, 

505 F.3d 1112, 1127 (10th Cir. 2007).

Gagarin asserts that the district court employed an 

unlawful valuation methodology or at least abused its 

discretion by choosing not to deduct the value of 

Defendants’ “back-end” accounts from the restitution award. 

As described earlier, these accounts contained the ongoing 

earnings from commissions not yet paid through advances, 

minus the value of any advances that exceeded the agents’ 

actual earnings, e.g., because the policyholder stopped 

paying premiums before the end of the period for which the 

advance was made. Agents were permitted to collect from 

these back-end accounts upon leaving the company, so long 

as they were not fired for cause, their interest had vested, and 

payments continued to be made on the policies that the 

agents had sold. Gagarin contends that these back-end 

accounts were real, vested assets, to which Defendants 

would have been entitled had they acted lawfully, and 

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UNITED STATES V. GAGARIN 21

therefore that the value of the accounts should be deducted 

from the restitution amount in accordance with Bussell, 

504 F.3d at 965.

There is no indication, however, that the district court 

employed an erroneous valuation methodology that focused 

on a criterion other than the actual losses of the victim. 

Rather, the court chose not to deduct the value of the backend accounts because of its conclusion that the accounts 

were only “estimates which do not affect the calculation of 

the loss here,” relying in part on the conclusions of the 

Presentence Report. Since the district court applied the 

proper standard, we review its determination of the amount 

of loss for only clear error. Galan, 804 F.3d at 1289.

Because “it appears that the district court placed [the] 

burden [of establishing the right to a deduction] on the 

defendant,” Crawford, 169 F.3d at 593 n.2, Defendants had 

to prove by a preponderance of the evidence that they would 

have been entitled to the value of the back-end accounts had 

they acted lawfully. See Bussell, 504 F.3d at 965. Although 

Defendants’ counsel elicited an isolated acknowledgment 

that an agent could be paid the value of the back-end 

accounts upon termination if “customers continue to pay 

premiums” and “if the agent was vested,” the weight of the 

evidence characterized the back-end accounts not as actual, 

vested entitlements, but rather as projections of the present 

value of future commissions, “if all necessary criteria were 

met.” Defendants did not show that all necessary criteria 

were met. For example, it is far from clear that, had 

Defendants not committed the crimes that caused them to be 

fired for cause, they would have eventually left AIL in good 

standing and would have met the necessary criteria to be paid 

from the back-end accounts. See Serawop, 505 F.3d at 1127 

(holding that a defendant could not prove entitlement to a 

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22 UNITED STATES V. GAGARIN

deduction based on speculative assumptions). The district 

court did not commit clear error by finding that Defendants 

had not met their burden and that the back-end accounts were 

“estimates which do not affect the calculation of the loss 

here.” As a result, we hold that the district court did not 

abuse its discretion by declining to deduct the purported 

value of the back-end accounts from the restitution award.

B

Gagarin’s remaining claims lack merit. The MVRA 

expressly permits the imposition of joint and several 

liability, 18 U.S.C. § 3664(h) (“the court may make each 

defendant liable for payment of the full amount of 

restitution”), and Gagarin cites no authority that reversed as 

abuse of discretion a district court’s imposition of joint and 

several liability in this context. Since the “court knew it had 

[the] option” to apportion the restitution award among the 

Defendants, “but decided not to exercise it,” we decline to 

second-guess the court’s decision. Booth, 309 F.3d at 576.

Gagarin’s contention that the restitution schedule is 

internally inconsistent is also unavailing. Gagarin relies on 

United States v. Holden, in which we vacated and remanded 

a restitution order because the restitution schedule’s 

requirement of both a “[l]ump sum payment” due 

immediately and a schedule of small payments to be made 

during the defendant’s period of incarceration was internally 

inconsistent. 908 F.3d at 403. But in Holden, the imposition 

of installment payments during incarceration was not 

contingent, by the schedule’s terms, on non-payment of the 

lump sum. The restitution schedule in this case, in contrast, 

is implicitly conditional: It specifies that a lump sum 

payment is “due immediately,” but that the “balance”—i.e., 

any portion of that single restitution amount that is not in fact 

paid “immediately”—is “due . . . in accordance with” an 

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UNITED STATES V. GAGARIN 23

installment plan. Gagarin contends that the restitution 

schedule in Holden used the same “balance due” conditional 

language as the district court used here with respect to the 

defendant’s post-incarceration payment schedule. But

Holden vacated the restitution schedule on account of the 

“unconditional schedule of payments during the period of 

incarceration.” Id. at 404 (emphasis added). And unlike in 

Holden, where the district court expressly found that the 

defendant lacked ability to pay according to the schedule, id., 

here there has been no such finding. We conclude that there 

was no error in the district court’s restitution order.

V

For the foregoing reasons, we affirm the aggravated 

identity theft conviction, the sentencing enhancement, and 

the restitution order.

AFFIRMED.

FRIEDLAND, Circuit Judge, concurring except as to the 

penultimate paragraph of Part II.C:

I concur in Judge Gould’s thoughtful opinion as to all 

issues but one: I am disinclined to criticize “on its own 

terms” the analysis of the unanimous en banc Seventh 

Circuit in United States v. Spears, 729 F.3d 753 (7th Cir. 

2013).

I agree that Spears’s holding is irreconcilable with this 

court’s holding in United States v. Osuna-Alvarez, 788 F.3d 

1183 (9th Cir. 2015). I also agree that, under a faithful 

application of our court’s precedent, Gagarin’s conviction 

must be affirmed. In my view, however, Spears adopts a 

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24 UNITED STATES V. GAGARIN

reasonable limiting interpretation of a statute that could 

otherwise be stretched to cover situations far afield from 

what its title says it is about: aggravated identity theft, not 

mere identity fraud.

Spears explains that there is a risk, in reading the 

ambiguous text of 18 U.S.C. § 1028A too broadly, of 

sweeping in conduct involving a “means of identification” 

that is hardly stolen from a victim; the identity might, under 

some interpretations of the statute, belong even to a willing 

participant in the predicate offense. See Spears, 729 F.3d 

at 756 (describing an interpretation of the statute that would 

cover “every time a tax-return preparer claims an improper 

deduction”). By holding that the term “another person” 

describes only “a person who did not consent to the use of 

the ‘means of identification,’” Spears provides one way to 

make sure courts do not “convert most identity fraud into 

identity theft and add a mandatory, consecutive, two-year 

term to every conviction, even though [the identity fraud 

statute] lacks any equivalent sentencing provision.” See id. 

at 757–58 (emphases added). Indeed, although our holding 

in Osuna-Alvarez is irreconcilable with Spears’s holding, 

our later caselaw has, relying on language in § 1028A that 

was not analyzed in either of those cases, incorporated 

limitations that flow from the same concerns that animated 

the Seventh Circuit’s decision in Spears. See United States 

v. Hong, 938 F.3d 1040, 1051 (9th Cir. 2019) (rejecting a 

broad interpretation of the term “use” based on the First 

Circuit’s analysis in United States v. Berroa, 856 F.3d 141 

(1st Cir. 2017), which in turn relied on Spears).

If this appeal had arisen on a blank slate, I would have 

given serious consideration to adopting Spears’s holding. 

And for the reasons expressed in Spears, I believe there may 

be a need in future cases to adopt interpretations of the 

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UNITED STATES V. GAGARIN 25

identity theft statute that help prevent it from being read to 

impose harsh sentences for offenses that do not actually 

involve identity theft. I therefore refrain from criticizing our 

sister circuit’s sensible attempt to interpret this puzzling 

statute.

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