FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,  No. 06-30489

Plaintiff-Appellee, D.C. No.

v.  CR-05-00152-004-

RSL LAM THANH PHAM,

Defendant-Appellant. OPINION 

Appeal from the United States District Court

for the Western District of Washington

Robert S. Lasnik, District Judge, Presiding

Argued and Submitted

February 4, 2008—Seattle, Washington

Filed September 23, 2008

Before: Raymond C. Fisher, Ronald M. Gould, and

Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Gould;

Concurrence by Judge Fisher

13383
COUNSEL

Jonathan S. Solovy, Esq., Law Office of Jonathan S. Solovy,

PLLC, Seattle, Washington, for appellant Lam Thanh Pham.

Jeffrey C. Sullivan and Patricia C. Lally, U.S. Attorney’s

Office, Seattle, Washington, for appellee United States of

America. 

13386 UNITED STATES v. PHAM
OPINION

GOULD, Circuit Judge: 

This case illustrates the dangers of an identity theft scheme

whereby many persons and financial institutions are impacted

when criminals steal identities. Lam Thanh Pham (“Pham”)

appeals the 78-month sentence and $1 million restitution

order imposed on him after he pled guilty to one count of

bank fraud in violation of 18 U.S.C. § 1344.1 Pham and five

other individuals were indicted on forty-four counts of bank

fraud in connection with a massive identity theft scheme that

compromised the bank accounts of ninety-five people held by

fourteen different financial institutions and resulted in more

than $1.6 million in loss. Pham’s guilty plea followed. Pham

contends that it was error for the district court to apply a fourlevel enhancement to his sentence for a property crime

involving fifty or more victims where the shortfalls in the

accounts of the ninety-five individuals whose identities were

stolen were fully reimbursed by their banks. We have jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742, and

we vacate Pham’s sentence and remand for resentencing on

an open record. 

I

Officials of the Starbucks Coffee Company alerted the FBI

that numerous Starbucks employees had had their identities

stolen and that counterfeit checks had been cashed on these

employees’ bank accounts. The ensuing investigation led to

the indictments of eight individuals, including six people

jointly indicted by a grand jury in the Western District of

1The remaining issues presented in Pham’s appeal, as well as all issues

presented on appeal by My Thi Tran, who was indicted as a participant in

the same identity theft/bank fraud scheme and whose appeal, # 06-30529,

was consolidated with that of Pham, are addressed in a memorandum disposition filed concurrently with this opinion. 

UNITED STATES v. PHAM 13387
Washington on April 14, 2005 on forty-four counts of bank

fraud in violation of 18 U.S.C. § 1344. One of those indicted

was Lam Thanh Pham, who other participants described as a

“boss” or “mastermind” of the scheme. According to these coconspirators, Pham created fraudulent driver’s licenses and

other identifying documents and orchestrated counterfeit

check cashing activities, the proceeds of which were then

deposited in his bank account or the account of another

scheme leader’s girlfriend. 

Charging documents alleged the following facts about the

fraud scheme in which Pham was involved: Members of the

scheme’s group of identity thieves obtained personal information, including bank account information, for individuals or

“targets” and used that information to create fraudulent identification documents and counterfeit checks made out to those

individuals. Participants in the scheme visited banks posing as

the targets, deposited the counterfeit checks and withdrew the

entire amount of the checks in cash. When the checks were

later determined not to be valid, the banks debited the targets’

accounts by the amount of the check. Because many checks

were written for large sums, this resulted in diminished and

even negative balances in the affected accounts. Once targets

discovered that their identities had been stolen and notified

their banks of the problem, their accounts were restored and

the banks absorbed the losses, which the FBI estimated to

total $1,662,873.95. 

Pham entered a guilty plea to one count of bank fraud on

May 1, 2006. The plea agreement stipulated that the amount

of loss attributable to Pham would be determined at sentencing but would not exceed $1 million. The agreement further

stated that the government would seek an “upward adjustment” under United States Sentencing Guidelines (“USSG”)

§ 2B1.1(b)(2) because Pham’s offense involved at least ten

victims. 

In its presentence report on Pham, the United States Probation Office recommended a fourteen-level enhancement under

13388 UNITED STATES v. PHAM
USSG § 2B1.1(b)(1)(H) for actual losses of between

$400,000 and $1 million and a four-level enhancement under

USSG § 2B1.1(b)(2)(B) for an offense involving fifty or more

victims. The government agreed with both of these recommendations in its sentencing memorandum, stressing, with

respect to the number of victims, the ninety-five individuals

whose bank accounts were compromised in addition to the

fourteen banks that were affected. As evidence to support

these enhancements, the government provided a spreadsheet

prepared by the FBI detailing the withdrawals made by the

check cashers and the bank accounts from which those funds

were taken. The government also offered a Victim Impact

Statement from one married couple who had been targeted by

the scheme. This statement itemized financial losses the couple had suffered as a result of having their identities stolen,

such as $1,003 for three vacation days spent resolving the

problems with their account, $336.85 in insufficient funds and

collection agency fees (some of which were ultimately

refunded by their bank), $13.49 for certified letters to credit

reporting agencies, $96 for replacement checks, and $10 for

printer ink and paper to write letters. This statement also

described the “month of sleepless nights” the couple had

spent before the situation with their bank was resolved. Pham

argued in his sentencing memorandum that only a two-level

enhancement under USSG § 2B1.1(b)(2)(A)(i) was warranted

because only the fourteen financial institutions had sustained

actual monetary loss as documented in the government’s

spreadsheet. 

At Pham’s sentencing hearing, the government contended

that the ninety-five account holders targeted by the scheme

had suffered “actual loss” in the form of “making phone calls

. . . to their banks, taking off work, driving to their banks, . . .

[and] [b]orrowing money to make ends meet.” Pham’s attorney responded that the Guidelines define “victims” as those

who have suffered some pecuniary harm and that this term

cannot include “people who have to go through a lot of upset,

hassle and non-pecuniary suffering.” The district court sided

UNITED STATES v. PHAM 13389
with the government and applied a four-level enhancement for

fifty or more victims, concluding that “the evidence that I’ve

heard of people whose lives were disrupted, who had to make

extraordinary efforts to get banks to take their complaints

seriously, to deal with bills that weren’t paid, problems that

came up with their credit, was much more than a short-lived

monetary loss that was immediately covered by a third party”

and so was sufficient to qualify the ninety-five account holders as “victims” for purposes of the sentence enhancement.

The district court then sentenced Pham to seventy-eight

months in prison and five years of supervised release, as well

as ordering him to pay restitution in the amount of $1 million.

This timely appeal of Pham’s sentence followed.

II

We review a district court’s interpretations of the federal

Sentencing Guidelines de novo, its factual determinations for

clear error, and its application of the Sentencing Guidelines to

the facts as it has found them for abuse of discretion. United

States v. Kimbrew, 406 F.3d 1149, 1151 (9th Cir. 2005). If

upon review we conclude that the district court committed a

“significant procedural error,” see Gall v. United States, 128

S. Ct. 586, 597 (2007), such as a “material error in the Guidelines calculation that serves as the starting point for the district court’s sentencing decision, we will remand for

resentencing pursuant to 18 U.S.C. § 3742(f).” United States

v. Cantrell, 433 F.3d 1269, 1280 (9th Cir. 2006). If no such

material error in applying the Guidelines is found, however,

we may go on to evaluate the sentence for its substantive reasonableness under an abuse of discretion standard. See Gall,

128 S. Ct. at 597; United States v. Carty, 520 F.3d 984, 993

(9th Cir. 2008) (en banc).

III

[1] Section 2B1.1(b)(2) of the U.S. Sentencing Guidelines

provides for a four-level enhancement where the offense

13390 UNITED STATES v. PHAM
involved at least fifty but fewer than 250 victims. The commentary to § 2B1.1 further provides that a “victim” is any person who either (a) “sustained any part of the actual loss

determined under subsection (b)(1)”; or (b) “sustained bodily

injury as a result of the offense.” USSG § 2B1.1 cmt. n.1.

“Actual loss” is in turn defined as “the reasonably foreseeable

pecuniary harm that resulted from the offense.” Id. n.3(A)(i).

“Pecuniary harm” means “harm that is monetary or that otherwise is readily measurable in money” and “does not include

emotional distress, harm to reputation, or other non-economic

harm.” Id. n.3(A)(iii). For such pecuniary harm to be “reasonably foreseeable,” the defendant must have known, or under

the circumstances reasonably should have known, that such

harm was a potential result of the offense. See id. n.3(A)(iv).

Finally, the Guidelines provide that loss “shall not include

[either] [i]nterest of any kind, finance charges, late fees, penalties, amounts based on an agreed-upon return or rate of

return, or other similar costs[,]” or “[c]osts to the government

of, and costs incurred by victims primarily to aid the government in, the prosecution and criminal investigation of an

offense.” Id. n.3(D). 

The government has advanced two distinct theories that

would support counting the individual bank account holder

“targets” as “victims” of Pham’s fraud for purposes of

§ 2B1.1(b)(2). Each of these theories presents issues of first

impression in our circuit.

A

One government theory posits that because the amounts

covered by the counterfeit checks were debited from these

individuals’ accounts, they suffered “actual loss” when those

checks were rejected and their accounts were depleted. Pham

responds that to count the same financial losses ultimately

absorbed by the banks as having been suffered by the account

holders as well would constitute an impermissible double

counting. We reject Pham’s double-counting contention. 

UNITED STATES v. PHAM 13391
[2] “Impermissible double counting occurs when one part

of the Guidelines is applied to increase a defendant’s punishment on account of a kind of harm that has already been fully

accounted for by application of another part of the Guidelines.” United States v. Stoterau, 524 F.3d 988, 1001 (9th Cir.

2008) (internal quotation marks omitted). However, we have

held that “[t]here is nothing wrong with ‘double counting’

when it is necessary to make the defendant’s sentence reflect

the full extent of the wrongfulness of his conduct.” United

States v. Thornton, 511 F.3d 1221, 1228 (9th Cir. 2008)

(internal quotation marks omitted); see also United States v.

Holt, 510 F.3d 1007, 1012 (9th Cir. 2007) (“Because the two

enhancements account for . . . distinct wrongs, it was proper,

and no abuse of discretion, for the district court to apply both

to the challenged criminal conduct.”). 

[3] This case differs from Thornton and Holt, and from all

other cases in our circuit in which double counting arguments

have been raised, in that here only one Guidelines provision,

USSG § 2B1.1(b)(2), is at issue, and the question is the proper

size of the enhancement for number of victims under that provision. Despite this difference, the principles that have guided

our other double counting cases remain applicable here. If the

account holders and the banks suffered “distinct wrongs” as

a result of Pham’s conduct and if accounting for those distinct

wrongs is necessary “to make the defendant’s sentence reflect

the full extent of the wrongfulness of his conduct,” then we

hold that it is not impermissible double counting to consider

both groups as victims even if their losses are ultimately

traceable to the same fraudulently obtained funds. 

[4] Here, Pham and his co-conspirators stole confidential

identifying information from fifty or more individuals to use

that personal information to commit bank fraud. The theft of

this personal information and the subsequent withdrawal of

money from the identity theft victims’ accounts resulted in

“reasonably foreseeable pecuniary harm” to those account

holders when their accounts were debited, thus causing them

13392 UNITED STATES v. PHAM
to suffer “actual loss” within the meaning of the Guidelines.

See USSG § 2B1.1 cmt. n.3(A)(i). At the same time, the participants in the scheme committed their fraud by presenting

counterfeit checks to banks, and it was also reasonably foreseeable that the banks would ultimately cover the account

holders’ losses and thus suffer pecuniary harm as well. See id.

The fact that the same funds were involved in both losses

does not preclude both the account holders and the banks

from suffering harm or mean that the harms they suffered

were identical. Just as a single gunshot would have two victims suffering two distinct injuries if the bullet passed through

one person before striking a second, here Pham’s criminal

acts could have two groups of victims suffering distinct pecuniary harms where the debits to the account balances first suffered by the account holders were later absorbed by the banks.

That the losses sustained by the account holders turned out to

be temporary does not necessarily disqualify the account

holders as victims either, because, to illustrate, an individual

who “sustained bodily injury as a result of the offense” would

still be considered a victim under part B of the definition

found in application note 1 to USSG § 2B1.1 even if he subsequently recovered from that injury. We therefore hold that

where a bank fraud offense results in initial losses by bank

account holders of the funds in their accounts and a more permanent loss of those same funds by banks or other financial

institutions when those institutions reimburse the account

holders, both the account holders and the banks have suffered

harms that are “pecuniary” and “reasonably foreseeable” for

purposes of the Guidelines’ definition of “actual loss” and

that are sufficiently distinct from one another to avoid a double counting problem. See Thornton, 511 F.3d at 1228; Holt,

510 F.3d at 1012. 

Some of our sister circuits have encountered a different

type of “double counting” problem in cases that involve calculations of loss under § 2B1.1(b)(1). This version of “double

counting” occurs where the same fraudulent check or stolen

credit card is erroneously counted twice in estimating the total

UNITED STATES v. PHAM 13393
loss attributable to a defendant. Reviewing courts have found

such errors to be material only where they bring the amount

of loss into a different category for Guidelines purposes, such

as from $900,000, which would carry a fourteen-level

enhancement under § 2B1.1(b)(1)(H), to $1.1 million, which

would carry a sixteen-level enhancement under § 2B1.1(b)

(1)(I). See, e.g., United States v. Mickens, 453 F.3d 668, 671-

72 (6th Cir. 2006) (holding that even if one of the government’s calculation methods impermissibly counted funds

obtained from the same stolen credit card towards both actual

and intended loss, any error was harmless because an alternate

calculation method, which was free of any double counting,

also resulted in a loss amount of between $120,000 and

$400,000 and thus application of the same enhancement);

United States v. Lee, 427 F.3d 881, 896 (11th Cir. 2005)

(describing a defendant’s argument that two invalid checks

intended to cause a single loss were both erroneously included

in her total loss amount but not that of her codefendant and

explaining that this “double-counting” resulted in a total loss

amount of more than $1 million and a sixteen-level enhancement for the appealing defendant as compared to a fourteenlevel enhancement for the codefendant). 

[5] No such boundary between loss categories under

§ 2B1.1(b)(1) is implicated here, for while the method of

counting victims discussed above does attribute losses of the

same funds to the banks and to the account holders, the total

amount of loss for which Pham was held responsible did not

correspondingly increase. Instead, the government stipulated

as part of Pham’s plea agreement that the amount of loss

would not exceed $1 million, despite the FBI’s finding that

more than $1.6 million was involved. Consistent with this

stipulation, Pham was given a fourteen-level enhancement

under USSG § 2B1.1(b)(1)(H) for losses of between $400,000

and $1 million. Accordingly, any double counting of losses

had no effect on the total amount of loss attributed to Pham

and was only relevant to the victim-related enhancement at

§ 2B1.1(b)(2), a purpose for which double counting is war13394 UNITED STATES v. PHAM
ranted, as discussed above, because of the distinct harms that

Pham’s conduct caused to these two groups of victims. See

Thornton, 511 F.3d at 1228. 

[6] Despite the lack of a double-counting problem, the individual account holders can still be counted as “victims” of

Pham’s bank fraud offense only if they “sustained any part of

the actual loss determined under” § 2B1.1(b)(1). See § 2B1.1

cmt. n.1. The Sixth Circuit, interpreting this language in a

case with similar facts to this one, has held that where bank

account holders’ “monetary loss is short-lived and immediately covered by a third-party,” the bank, those account holders have not suffered any “ ‘actual loss’ or ‘pecuniary

harm.’ ” United States v. Yagar, 404 F.3d 967, 971 (6th Cir.

2005). The district court in this case agreed with the Sixth

Circuit’s analysis and we, too, conclude it is persuasive. If the

account holders victimized by Pham were fully reimbursed as

soon as they notified their banks of the fraudulent activity,

then they cannot reasonably be said to have suffered or “sustained” the losses that were only temporarily and fleetingly

reflected in their accounts. As the Sixth Circuit reasoned in

Yagar: they would have “suffered no adverse effect as a practical matter from [the defendant’s] conduct.” Id.

[7] However, the Sixth Circuit in Yagar pointed out that

“there may be situations in which a person could be considered a ‘victim’ under the Guidelines even though he or she is

ultimately reimbursed . . . .” Id. This case may present just

such a situation. The government’s proffered Victim Impact

Statement made clear that, at least for some of the account

holders, the refund was not instantaneous. To the contrary,

one couple referred to their “month of sleepless nights” and

stated that it took “several weeks [and] many emails and

phone calls” until the amount of the counterfeit check was

refunded and their account was unfrozen. The district court

commented at Pham’s sentencing that 

the fact that ultimately people were restored to the

state they were in before the crime was committed,

UNITED STATES v. PHAM 13395
some after some considerable time, effort and

expense, is what the Court in Yagar said[—“]while

there may be situations in which a person could be

considered a victim under the [G]uidelines, even

though he or she is ultimately reimbursed[”]—that I

believe this case fits under that. 

(Emphasis added). 

Following similar logic, the Eleventh Circuit diverged from

the Sixth Circuit’s Yagar approach in United States v. Lee.

There, victims of a scheme involving the use of bad checks

to purchase homes and cars offset some of their losses by pursuing foreclosure, repossession and other legal proceedings.

427 F.3d at 895. The Eleventh Circuit concluded that where

the entities who sustained the bad debt had to wait “an appreciable time and . . . resort to a legal remedy” before being

compensated by the defendants, they could properly be considered “victims” for purposes of § 2B1.1 despite ultimately

recovering most or all of their initial losses. See id. (emphasis

added). 

This case differs from Lee in two key respects. First, the

Lee victims’ losses were not reimbursed by a third party but

rather were recouped from the defendants themselves after the

victims took legal action against them. Id. (“In none of these

cases was there a third party available to provide prompt

indemnification.”). By contrast, the account holders here were

fully reimbursed by their banks, and the only question is

whether that reimbursement was “immediate” as in Yagar or

whether some appreciable amount of time elapsed before the

accounts were replenished. Second, the Lee court had evidence in the record detailing what the victims had to do to

recover their losses and how long those actions took. See 427

F.3d at 885-86. But except for the one Victim Impact Statement provided by the government, no such evidence was presented to the district court in this case. 

13396 UNITED STATES v. PHAM
Although the district court referred at Pham’s sentencing to

the “considerable time” that passed before some of the

account holders were “restored to the state they were in before

the crime was committed,” the district court did not explain

the basis for its conclusion that enough time had elapsed for

these account holders to distinguish their situation from the

“short-lived” losses “immediately covered by a third-party” in

Yagar. Nor did the district court explain how this temporal

reasoning could bring the total number of victims of the

offense to fifty, where only the losses of the fourteen financial

institution victims were itemized in the government’s spreadsheet and the experiences of only one other account holder2

were recounted in the Victim Impact Statement. 

[8] The government has the burden of proving the facts

necessary to support a sentence enhancement by a preponderance of the evidence. See United States v. Allen, 434 F.3d

1166, 1173 (9th Cir. 2006). Here, the government provided

evidence that one account holder and his wife had experienced a delay of several weeks, and had to send many e-mails

and make many phone calls, before the funds in their compromised account were restored. If similar evidence, or evidence

of something more than a “short-lived [loss] immediately covered by a third-party” had been produced for enough of the

other account holders3 to bring this case outside of the situa2Although the Victim Impact Statement was signed by both husband

and wife, the FBI spreadsheet shows that the affected account was in the

husband’s name, and so the government counted this couple as a single

“victim” in reaching its figure of ninety-five account holder victims. 

3Evidence of more than immediately reimbursed loss on the part of

thirty-five account holders, in addition to the evidence already in the

record about the losses suffered by the fourteen institutions listed in the

spreadsheet and the one account holder who did provide a statement,

would bring the total number of victims to fifty. However, it may not be

necessary for the government to produce evidence along these lines for

each and every one of thirty-five or more account holders. Commentary

in the Guidelines suggests that the amount of loss and the number of victims can be approximated, so it likely would be sufficient for the governUNITED STATES v. PHAM 13397
tion covered by Yagar, then a four-level enhancement for fifty

or more victims might have been appropriate. However, the

government did not meet its evidentiary burden with respect

to all but one of the account holders, and so the government’s

first theory does not permit imposition of the

§ 2B1.1(b)(2)(B) enhancement based only on the scant evidence in the record before us. 

B

The government’s second theory in support of the enhancement is that the “actual loss” the account holders suffered was

not the temporary shortfall in their accounts but rather collateral expenses that they incurred in the process of resolving

those shortfalls and related problems. With respect to the

account holder who submitted a Victim Impact Statement,

these costs included $1,003 for the value of three days taken

off from work to resolve account problems, $336.85 in insufment to produce evidence for enough of the account holders to allow the

sentencing court reasonably to infer a pattern of delayed reimbursement.

See, e.g., USSG § 2B1.1 cmt. n.3(C) (“The court need only make a reasonable estimate of the loss” and may include in that estimate “[t]he approximate number of victims multiplied by the average loss to each victim”);

cmt. n.4(C)(ii)(I) (creating a “Special Rule” that where an offense

involved the theft or attempted theft of mail from “a United States Postal

Service relay box, collection box, delivery vehicle, satchel, or cart, [the

offense] shall be considered to have involved at least 50 victims”). We

decline to specify at this time how many account holders would have to

provide evidence and what form that evidence would have to take to support such an inference, because our proper role is to review decisions on

such matters by the district court for abuse of discretion after the record

is developed. See United States v. Kimbrew, 406 F.3d 1149, 1151 (9th Cir.

2005). However, the delay in reimbursement of several weeks and perhaps

as much as a month experienced by one account holder and documented

in his Victim Impact Statement is very different from the “short-lived,”

“immediately reimbursed” loss discussed in Yagar, and qualifies this individual as a victim for purposes of USSG § 2B1.1 by virtue of the concrete,

albeit temporary, financial loss he suffered when his bank account was

depleted. 

13398 UNITED STATES v. PHAM
ficient funds and collection agency fees (some of which were

ultimately refunded by the bank), $13.49 for certified letters

to credit reporting agencies, $96 for replacement checks, and

$10 for printer ink and paper to write letters. Pham contends

that these expenses are the sort of “other . . . costs” “similar”

to interest, finance charges, and late fees that the Guidelines

have explicitly excluded from the calculation of loss under

§ 2B1.1. See USSG § 2B1.1 cmt. n.3(D)(i). With the possible

exception of insufficient funds and collection agency charges

incurred when the account was in overdraft, however, the

costs described in the Victim Impact Statement are not “similar” to the finance charges, late fees, and other penalties covered by this application note, and we conclude that they do

not fall within its reach. Moreover, the costs of forfeited vacation time spent meeting with bank personnel were not

expended “primarily to aid the government in . . . the prosecution and criminal investigation of [this] offense” but rather to

resolve the couple’s own financial situation, and so these

costs do not fit the Guidelines’ other exception for government assistance expenses. USSG § 2B1.1 cmt. n.3(D)(ii). 

[9] The sorts of costs set forth in the Victim Impact Statement and the other examples given by the government at

Pham’s sentencing and in its appellate brief, such as the cost

of gas mileage for trips to and from banks and the cost of

stamps and telephone calls, satisfy the Guidelines’ definition

of “actual loss” because they are “monetary” or “readily measurable in money.” § 2B1.1 cmt. n.3(A)(iii). These costs associated with resolving disputed account activity, canceling

credit cards and initiating fraud investigations with credit

reporting agencies are also “reasonably foreseeable” consequences of identity theft, which was an integral component of

this bank fraud scheme. See id. n.3(A)(iv). Accordingly, we

hold that financial costs to bank account holders that are

incurred in the course of resolving damage done to those

accounts by a fraud scheme may be included in the calculation of actual loss under § 2B1.1(b)(1) and may qualify the

UNITED STATES v. PHAM 13399
individuals who incurred those costs as “victims” of the

offense under § 2B1.1(b)(2). 

[10] Again, however, there is a problem of insufficient evidence. A “victim” under § 2B1.1 must have “sustained . . .

part of the actual loss determined under subsection (b)(1).”

§ 2B1.1 cmt. n.1. The actual loss in this case was determined

to be at most $1 million, based on the stipulation in the plea

agreement that the government would not seek a higher

amount and the FBI spreadsheet itemizing the banks’ losses

of more than $1.6 million. This spreadsheet did not include

any information about the costs suffered by individual bank

account holders in resolving the fraudulent activity on their

accounts. Because no evidence of any such costs was included

in the government’s calculation of actual loss, those costs cannot serve as the basis for including the account holders as victims of Pham’s scheme. 

The Tenth Circuit has confronted a similar evidentiary

problem in United States v. Leach, a case involving the theft

by a U.S. postal employee of checks mailed to a charitable

organization. 417 F.3d 1099, 1101 (10th Cir. 2005). In that

case, the government had sought a four-level enhancement for

an offense involving between fifty and 250 victims because

“over 200 people reported undelivered donations and incurred

the expense of writing and mailing a replacement check.” Id.

at 1106 (internal quotation marks omitted). The Tenth Circuit

rejected this argument, noting that “[t]here was no testimony

presented at the sentencing hearing regarding the type and

amount of loss suffered by donors” and that the court’s calculation of loss was based entirely on the amount of money the

defendant intended to steal from the charity, which did not

include the costs of replacement checks. Id. at 1106-07

(emphasis in original). The court concluded that because “the

loss suffered by these 200 donors was not part of the actual

loss determined . . . under” § 2B1.1(b)(1), the district court

erred by counting the donors as ‘victims’ for purposes of an

enhancement under U.S.S.G. § 2B1.1(b)(2).” Id. at 1107. 

13400 UNITED STATES v. PHAM
[11] The Tenth Circuit’s reasoning in Leach was sound and

applies with equal force to the government’s arguments in this

case based on collateral costs to bank account holders that

were not included in the actual loss amount. Because the

enhancement for fifty or more victims cannot be supported on

this second theory, and for the reasons set forth in part A

above with respect to the government’s first theory of victim

counting, we conclude that the district court erred in imposing

a four-level enhancement to Pham’s sentence under

§ 2B1.1(b)(2)(B) for an offense involving fifty or more victims.

C

It should be obvious to any thoughtful observer of modern

economic life that identity theft has the potential to cause

those whose identities are stolen the gravest of concerns about

lost funds, impaired credit, and impaired reputation. It is also

obvious that the individual victims of Pham’s scheme, though

they were reimbursed by their banks, undoubtedly suffered

personal anguish, anxiety and concern about the identity theft

until it was satisfactorily resolved. It might be rational to say

that the anxiety of persons whose identities and personal

finances are compromised by identity theft justifies, in proportion to the number of anguished persons, heightened punishment. We, however, deal with statutes and statutory

penalties as enacted by Congress and sentencing guidelines as

specified by the United States Sentencing Commission. At the

pertinent times for Pham’s crime, these guidelines recognized

and permitted weight to be given to pecuniary loss, but not to

mental anxiety, distress, lost reputation, or other noneconomic harm. 

Although the Guidelines are now discretionary, the

Supreme Court has continued to indicate that a correct initial

assessment of the Guidelines range is a starting point before

the discretionary judgment is made on a reasonable sentence

in the light of the 18 U.S.C. § 3553(a) factors. See, e.g., Gall,

UNITED STATES v. PHAM 13401
128 S. Ct. at 596-97; Carty, 520 F.3d at 991; Cantrell, 433

F.3d at 1279-80. The government’s case for imposing an

enhancement for an offense involving fifty or more victims

was not supported by a preponderance of the evidence showing that fifty or more victims suffered actual loss in the form

of pecuniary harm. Because of that evidentiary deficiency, we

cannot sustain the enhancement for the number of victims on

the current record. 

IV

[12] Because we have identified a significant error4 in the

Guidelines calculation that provided the starting point for the

district court’s sentencing decision, we vacate Pham’s sentence and remand this case for resentencing pursuant to 18

U.S.C. § 3742(f)(1). Cantrell, 433 F.3d at 1280; see also Gall,

128 S. Ct. at 597 (requiring that an appellate court “first

ensure that the district court committed no significant procedural error, such as . . . improperly calculating . . . the Guidelines range”). In remanding, we do not limit the evidence that

the district court may consider in resentencing to the evidence

that was before it during Pham’s initial sentencing hearing.

See United States v. Matthews, 278 F.3d 880, 885-86 (9th Cir.

2002) (en banc) (“On remand, the district court generally

should be free to consider any matters relevant to sentencing,

even those that may not have been raised at the first sentencing hearing, as if it were sentencing de novo.”) (citations

omitted). Rather, we remand this matter on an open record so

4This error is “significant,” Gall, 128 S. Ct. at 597, because it raised

Pham’s Guidelines range from 57-71 months (which would have been his

range if only a two-level enhancement for ten or more victims had been

applied) to 70-87 months. The 78-month sentence he received was in the

middle of his Guidelines range as calculated but would have constituted

an above-Guidelines sentence if he had been given only the two-point

enhancement for between ten and forty-nine victims. Such an outsideGuidelines sentence would have required the district court to “consider the

extent of the deviation and ensure that the justification [was] sufficiently

compelling to support the degree of the variance.” Id.

13402 UNITED STATES v. PHAM
that both parties can present evidence relevant to the proper

number of victims in light of this opinion’s guidance on a

matter of first impression in our circuit. 

SENTENCE VACATED AND REMANDED FOR

RESENTENCING. 

FISHER, Circuit Judge, concurring in part and concurring in

the judgment: 

I agree fully with all but Part III.A of the majority’s opinion. If, as the majority holds in Part III.B, the government

demonstrates that the account holders whose accounts were

targeted by Pham’s scheme incurred actual collateral

expenses while convincing the banks to restore their account

balances and correct errors in their credit histories, these

expenses constitute reasonably foreseeable pecuniary harm

arising from Pham’s conduct. These individuals could therefore be counted as the “victims” of Pham’s conduct for the

purpose of a sentencing enhancement under U.S. Sentencing

Guideline § 2B1.1(b)(2). I part ways with the majority, however, with regard to Part III.A, where the majority holds, in

the alternative, that both the financial institution and the

account holder could be counted as a “victim” based on the

same actual theft of funds, which was temporarily reflected in

the account holder’s account balance but ultimately sustained

by the bank. Although I agree that the temporary deprivation

of access to one’s account funds is some kind of harm, it is

not a pecuniary harm, and thus it is not a kind of harm

accounted for under the Guidelines. 

As the majority explains, the Guidelines allow an individual to be counted as a “victim” for the purpose of a sentencing

enhancement under § 2B1.1(b)(2) only if he or she “sustained

any part of the actual loss” from the fraudulent scheme.

U.S.S.G. § 2B1.1 cmt. n.1. This loss must be “pecuniary,”

UNITED STATES v. PHAM 13403
which means “harm that is monetary or that otherwise is measurable in money,” and “does not include emotional distress,

harm to reputation, or other non-economic harm.” Id.

n.3(A)(iii). In Part III.A, the majority holds that the account

holders could be shown to have suffered such “actual loss”

because “their accounts were debited,” even where “the losses

sustained by the account holders turned out to be temporary”

because these funds were later restored by the bank. Maj. Op.

at 13392, 13393. The majority concedes that some reimbursements may be so speedy that the victim could not be said to

have actually suffered or sustained the loss, but holds that a

reimbursement that is not “instantaneous” is an actual pecuniary loss under the Guidelines. Id. at 13395. The majority thus

creates a vague standard for defining “actual loss,” whereby

reimbursed account holders are “victims” if “some appreciable amount of time elapsed before the accounts were replenished,” but not if they were “fully reimbursed as soon as they

notified their banks of the fraudulent activity.” Id. at 13395,

13396. 

As the majority acknowledges, the losses to the account

holders in this case turned out to be ephemeral. Pham and his

co-defendants defrauded banks by impersonating legitimate

account holders and presenting counterfeit checks in the

account holders’ names, inducing the banks to give money to

Pham and his co-defendants while improperly lowering the

account balance of the victimized account holder. By restoring the account holders’ balances, the bank agreed that the

money had not been validly drawn from these accounts. The

reimbursement reflected the bank’s acknowledgment that it

had committed error by improperly accepting a counterfeit

check and improperly debiting an individual’s account for

funds that were, in fact, fraudulently stolen from the bank

itself. See United States v. Erpenbeck, 532 F.3d 423, 442 (6th

Cir. 2008) (“When a customer of a bank or a creditcard company is defrauded, the customer is generally protected by an

agreement that the bank or company will handle any fraud

based upon unauthorized charges against the customer’s

13404 UNITED STATES v. PHAM
account . . . . [Thus] a loss under this type of contractual

agreement is necessarily temporary, and the customers are

fully reimbursed.”). 

I agree that it was reasonably foreseeable that the bank

would mistakenly debit the holders’ accounts and that — as

a result — the holders would, for a time, lose access to their

account funds while the bank sorted out who should be the

proper party to bear the loss. Assuming the bank fully reimburses the account holders, however — including refunding

any lost interest or other charges caused by the improper debiting of funds — I do not believe it can fairly be said that the

account holders have suffered any actual pecuniary harm from

the temporary deprivation of access to their funds. Rather,

they have sustained an inconvenience and a headache, which

I do not dispute can be of serious proportions. To the extent

the account holders’ inconvenience can be monetized in the

form of lost vacation days, phone calls and letters to the bank

and credit reporting agencies, unreimbursed expenses for

replacement checks and so on, then I agree that the account

holders have sustained a reasonably foreseeable, actual pecuniary loss that is sufficient to count them as “victims” under

the Guidelines. See United States v. Abiodun, No. 06-

5335CR, ___ F.3d ___, 2008 WL 2924341 at *6 (2d Cir. July

30, 2008) (holding that reimbursed account holders may be

“victims” under § 2B1.1 based on “loss of time” that can be

measured in monetary terms). This is what I understand to be

the holding of Part III.B of the opinion, which I fully join. To

label the temporary deprivation of access to funds alone an

“actual loss,” however, goes beyond the Guidelines’ clear —

and narrow — definition of what makes someone a “victim”

under § 2B1.1(b)(2). 

Moreover, I am concerned that the majority’s definition of

“actual loss” in Part III.A risks double-counting both the number of victims and the amount of loss caused by the defendant.

“Impermissible double counting occurs where one part of the

Guidelines is applied to increase a defendant’s punishment on

UNITED STATES v. PHAM 13405
account of a kind of harm that has already been fully

accounted for by the application of another part of the Guidelines.” United States v. Thornton, 511 F.3d 1221, 1227-28

(9th Cir. 2008) (internal quotation marks omitted). The majority’s definition of “actual loss” means that both the account

holder and the bank could be counted as “victims” based on

the same harm, the pecuniary loss from the theft of funds. The

majority acknowledges that this case differs from cases such

as Thornton and United States v. Holt, 510 F.3d 1007, 1011-

12 (9th Cir. 2007), where we upheld sentencing enhancements

against double-counting challenges because the defendant’s

sentence was enhanced under different guidelines that captured different aspects of the defendant’s harm. Here the

majority proposes that a single harm — the pecuniary loss

from the funds — constitutes an “actual loss” to two different

parties under the same Guideline, simply because some time

elapsed before one party agreed to absorb the loss. The pecuniary loss from the stolen funds, however, is fully absorbed by

the bank. By also counting the account holder as a victim, the

majority would either be double-counting the victims of the

pecuniary loss, or else accounting for some other, nonpecuniary harm to the account holder, which is not permitted

by the Guidelines. 

More troubling is what this might mean in future cases for

the calculation of the loss amount for purposes of a sentencing

enhancement under § 2B1.1(b)(1). If both the bank and the

account holder, as the majority suggests, sustained an “actual

loss” as a result of the theft of funds, then it is not clear why

the amount stolen should not also be doubled for purposes of

calculating a sentencing enhancement for the loss amount.

Thus, under the majority’s rationale, a defendant who

defrauded a bank of $500,000 could seemingly be punished

as if he had stolen $1,000,000 — netting a two-level enhancement — because he would have caused $500,000 in “actual

loss” to the bank and another $500,000 in “actual loss” to the

account holders. See U.S.S.G. § 2B1.1(b)(1). The majority

points out that such double-counting is not implicated in

13406 UNITED STATES v. PHAM
Pham’s case because the government stipulated to the loss

amount. See Maj. Op. at 13394-95. This will not, of course,

necessarily be so in future cases. This leads to the troubling

proposition that defendants who steal by identity theft could

be exposed to significantly higher punishments because the

“actual loss” amount would be doubled, at least in cases

where the bank understandably takes some time to verify that

fraud occurred before agreeing to absorb the loss. 

No other circuit has held that two victims can both be

counted under the Guidelines based on the same “actual loss”

of funds. In United States v. Lee, 427 F.3d 881, 894 (11th Cir.

2005), the Eleventh Circuit rejected a defendant’s argument

that the losses he caused should not be counted under the

Guidelines because the victims managed to recover their

stolen property from the defendant himself. The Lee court

properly rejected this argument, which would have rendered

a crime “victimless” if the victim recovered his stolen property. See id. at 895. Here, however, as in United States v.

Yagar, 404 F.3d 967 (6th Cir. 2005), our task is not to decide

whether there was any victim who sustained the loss, but to

choose between two possible victims. In Yagar, the Sixth Circuit suggested in dicta that there “may be situations in which

a person could be considered a ‘victim’ under the Guidelines

even though he or she is ultimately reimbursed” by the bank

for the lost funds. Id. at 971. The Sixth Circuit did not explain

how or why such a person could be considered a victim, nor

explain what actual losses would have to be shown to make

such a person a victim. The Sixth Circuit may well have simply anticipated our reasoning in Part III.B, in which I concur,

which holds that unreimbursed collateral expenses incurred

by the account holders could be sufficient to render these individuals “victims” under the Guidelines. In any event, nothing

in the Sixth Circuit’s reasoning compels the conclusion that

delay prior to reimbursement is alone sufficient to render the

account holder a “victim” under the Guidelines, absent proof

that the delay itself caused independent pecuniary harm. 

UNITED STATES v. PHAM 13407
The majority’s holding thus puts this court into tension

with other circuits that have interpreted Yagar to mean that

reimbursed victims of identity theft can be counted as “victims” under § 2B1.1(b)(2) only when the government shows

actual pecuniary losses apart from the temporary losses that

were reimbursed. In United States v. Abiodun, 2008 WL

2924341 at *6, the Second Circuit held that reimbursed victims could be counted as “victims” due to the lost time

involved in resolving shortfalls in their accounts, but only to

the extent that “this ‘loss of time’ [can] be measured in monetary terms” and the value of the lost time is reflected in the

calculation of total loss resulting from the defendants’

offenses. Similarly, the Fifth Circuit rejected the suggestion

that “account holders are victims because they suffered pecuniary harm at the moment” that stolen funds are charged

against their accounts. See United States v. Conner, No. 06-

50218, ___ F.3d ___, 2008 WL 2876564 at *7 (5th Cir. July

28, 2008). The Fifth Circuit joined the Eighth Circuit in holding that “only the party that ‘ultimately’ bore the pecuniary

harm from the offense suffered an ‘actual loss’ ” under the

Guidelines. Id. (quoting United States v. Icaza, 492 F.3d 967,

970 (8th Cir. 2007)). Consistent with the Second Circuit and

our reasoning in Part III.B, the Fifth Circuit agreed that “[i]t

is possible that with a proper evidentiary foundation . . .

unreimbursed business losses [incurred while seeking reimbursement] could be considered ‘actual losses’ for the purposes of counting ‘victims.’ ” Id. at *8 (emphasis added). No

court, however, has endorsed the broad proposition that the

majority advances here, which is that mere delay prior to

reimbursement — which has not itself been shown to have

caused a separate, actual pecuniary loss — is sufficient to

make someone a “victim” under the Guidelines. 

There is no question that identity theft schemes such as

Pham’s take a heavy toll on individual account holders, who

may spend days or weeks working with the bank to investigate the fraud and restore their account funds, and then spend

considerable time dealing with the fallout from their devas13408 UNITED STATES v. PHAM
tated credit histories. If the government can prove that such

individuals incurred real, unreimbursed expenses as a foreseeable result of Pham’s conduct — even if these pecuniary

losses are minimal, but so long as they are monetized — then

I agree that Pham’s sentence can be enhanced under the

Guidelines for his impact on these victims. Further, the district court always may “consider the large number of individual account holders affected by [Pham’s] crime as part of its

consideration of § 3553(a) factors if the court decided to issue

a non-guidelines sentence.” See Conner, 2008 WL 2876564

at *9. District judges therefore have ample tools to punish

defendants for the very real harms they inflict on those whose

identities become the vehicles for financial fraud. There is no

need for us to create difficult-to-apply rules that would make

the number of victims turn on the length of time the bank

spent investigating the fraud before reimbursing the account

holder, and that risk punishing the defendant twice for causing

a single pecuniary harm through his theft of funds. Therefore,

I respectfully cannot join the majority’s reasoning in Part

III.A.

UNITED STATES v. PHAM 13409