United States v. Aaron Hymas, 780 F.3d 1285

Background

Aaron and Tiffany Hymas pled guilty to one count of wire fraud each (Count Four: a March 28, 2007 loan for $295,600); other related counts were dismissed under plea agreements.
The Presentence Report (PSR) attributed losses from many other alleged fraudulent loan applications (not charged or admitted) to Aaron as relevant conduct, producing a total loss of about $3.4 million and a Guidelines range of 41–51 months.
Aaron objected to the loss calculation and requested a higher burden of proof (clear and convincing) for loss findings that drastically increased his sentence; the district court applied the preponderance standard after a 3-day evidentiary hearing and found relevant-conduct losses for 19 other loans.
The district court calculated a $162,758.79 loss for Count Four (a 10-level enhancement) and attributed additional losses from other loans that raised the total offense level by 8 more levels; the court sentenced Aaron to 24 months (below Guidelines).
Both defendants were ordered to pay restitution (Aaron: $1,520,296.77; Tiffany: $667,505.42); the district court treated successor lenders and certain servicers as victims for restitution purposes.

Issues

Issue	Hymas's Argument	Government's Argument	Held
Appropriate burden of proof for sentencing facts that increase sentence based on losses	Clear and convincing evidence required because the enhancements had a disproportionate effect on the sentence	Preponderance of the evidence is the usual standard for sentencing findings	Mixed: preponderance OK for losses attributable to Count Four (conduct of conviction); clear and convincing required for losses from other loans (uncharged/unchallenged conduct)
Whether loss from Count Four required heightened proof	Count Four loss enhancement (10 levels) more than doubled Guidelines absent loss; Hymas argued heightened standard applies	Government: loss stems from the convicted conduct; preponderance sufficient	Held: preponderance sufficient for Count Four loss (defendant admitted fraudulent transaction and loan size was known)
Whether losses from other loans (relevant conduct) required heightened proof	These losses were based on conduct for which Hymas was not convicted or did not admit; clear and convincing needed because they more than doubled the Guidelines range	Government: losses reflected the scope of a conspiracy-like scheme; preponderance acceptable	Held: clear and convincing standard should have been applied to losses from other loans; sentence vacated and remanded for resentencing under that standard
Restitution — who qualifies and proper valuation method	Hymas: successor lenders/servicers not necessarily victims; market decline caused losses	Government: successor lenders who bought loans without knowledge of fraud suffered proximately caused losses; loss measured by principal minus credits from sale/deficiency	Held: restitution orders affirmed; district court permissibly used amount realized from deficiency sales and treated successor lenders as victims; market decline does not sever causation

Key Cases Cited

United States v. Treadwell, 593 F.3d 990 (9th Cir.) (preponderance generally governs sentencing loss findings)
United States v. Mezas de Jesus, 217 F.3d 638 (9th Cir.) (heightened standard may be required when sentencing factor is disproportionately impactful)
United States v. Restrepo, 946 F.2d 654 (9th Cir.) (due process concerns when severe enhancements rest on uncharged or acquitted conduct)
United States v. Berger, 587 F.3d 1038 (9th Cir.) (no bright-line rule; totality test for disproportionate effect)
United States v. Valensia, 222 F.3d 1173 (9th Cir.) (articulated six-factor totality test used in disproportionate-effect analysis)
United States v. Harrison-Philpot, 978 F.2d 1520 (9th Cir.) (preponderance sufficient when enhancement is based on offense of conviction)
United States v. Munoz, 233 F.3d 1117 (9th Cir.) (clear and convincing required for loss calculation based on uncharged conduct that disproportionately increased sentence)
United States v. Morris, 744 F.3d 1373 (9th Cir.) (loss may be measured by principal minus credits from subsequent deficiency sales)
United States v. Yeung, 672 F.3d 594 (9th Cir.) (successor lenders who buy loans without knowledge of fraud are victims for restitution)
Robers v. United States, 134 S. Ct. 1854 (Sup. Ct.) (market declines do not break causal chain between fraud and lenders' losses)