                               RECOMMENDED FOR FULL-TEXT PUBLICATION
                                    Pursuant to Sixth Circuit Rule 206
                                           File Name: 05a0180p.06

                       UNITED STATES COURT OF APPEALS
                                       FOR THE SIXTH CIRCUIT
                                         _________________


                                                     X
                Plaintiff-Appellee/Cross-Appellant, -
 UNITED STATES OF AMERICA,
                                                      -
                                                      -
                                                      -
                                                          Nos. 04-5151/5264
          v.
                                                      ,
                                                       >
 JACQUELINE CAROL YAGAR,                              -
              Defendant-Appellant/Cross-Appellee. -
                                                     N
                        Appeal from the United States District Court
                    for the Western District of Tennessee at Memphis.
                      No. 03-20228—J. Daniel Breen, District Judge.
                                          Argued: March 8, 2005
                                   Decided and Filed: April 18, 2005
                  Before: MARTIN, GILMAN, and FRIEDMAN, Circuit Judges.*
                                           _________________
                                                 COUNSEL
ARGUED: Needum L. Germany, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Memphis,
Tennessee, for Appellant. Camille R. McMullen, ASSISTANT UNITED STATES ATTORNEY,
Memphis, Tennessee, for Appellee. ON BRIEF: Needum L. Germany, OFFICE OF THE
FEDERAL PUBLIC DEFENDER, Memphis, Tennessee, for Appellant. Tracy L. Berry,
ASSISTANT UNITED STATES ATTORNEY, Memphis, Tennessee, for Appellee.
                                           _________________
                                               OPINION
                                           _________________
        BOYCE F. MARTIN, JR., Circuit Judge. Jacqueline Carol Yagar appeals her sentence of
twenty-one months of imprisonment for theft of stolen mail in violation of 18 U.S.C. § 1708. On
appeal, Yagar claims that the district court erred by imposing two sentence enhancements in
violation of the Sixth Amendment, and in calculating one of those enhancements under the United
States Sentencing Guidelines. The United States cross-appeals, claiming that the district court erred
in applying a two-level enhancement, rather than a four-level enhancement, under the Guidelines.
For the following reasons, we VACATE Yagar’s sentence and REMAND for resentencing
consistent with the Supreme Court’s decision in United States v. Booker, __ U.S. __, 125 S. Ct. 738
(2005).

        *
           The Honorable Daniel M. Friedman, Circuit Judge of the United States Court of Appeals for the Federal
Circuit, sitting by designation.


                                                       1
Nos. 04-5151/5264 United States v. Yagar                                                        Page 2


                                                   I.
        On or about May 13, 2002, law enforcement officers began an investigation into a possible
bank-fraud scheme, allegedly orchestrated by Jacqueline Carol Yagar, involving stolen checks
drawn on approximately thirteen different accounts. In her scheme, Yagar allegedly used stolen
checks to deposit more than $88,000 into the accounts of over fifty individuals using their stolen
bank information. After depositing the stolen checks, Yagar withdrew portions of the deposited
funds from forty-seven of those accounts, receiving $20,987.15 in cash.
        On June 30, 2003, Yagar was indicted by a grand jury for multiple counts of identity theft
in violation of 18 U.S.C. § 1028(a)(7) and mail theft in violation of 18 U.S.C. § 1708. Yagar pled
guilty to the mail-theft charge, with the understanding that the United States would subsequently
drop the identify-theft charges. The presentence report, using the 2002 version of the Guidelines,
indicated that Yagar’s criminal history points totaled eleven and her corresponding criminal history
category was V. The report also calculated her base offense level to be six, but the report
recommended an enhancement of four levels under section 2B1.1(b)(1) of the Guidelines because
the loss to the victims was between $10,000 and $30,000. The report did not recommend an
enhancement under section 2B1.1(b)(2)(A) of the Guidelines for a crime that involved more than
ten, but less than fifty, victims. The report also awarded Yagar a two-level reduction for acceptance
of responsibility. With a total offense level of eight, and a criminal history category of V, the
suggested sentencing range was fifteen to twenty-one months of imprisonment.
         On January 6, 2004, the United States filed a position paper, requesting the district court to
impose an additional four-level enhancement under section 2B1.1(b)(2)(B) of the Guidelines
because it alleged that there were fifty or more victims of the alleged offense. A sentencing hearing
was conducted on January 15. The court generally followed the sentencing recommendations of the
presentence report, enhancing Yagar’s offense level by four levels under section 2B1.1(b)(1) based
on the amount of loss and granting a two-level reduction for acceptance of responsibility. The court
did, however, grant an additional two-level enhancement under section 2B1.1(b)(2)(A) based upon
its determination that the number of victims—the sum of the number of banks (five) and the number
of account holders who had to purchase new checks because of Yagar’s scheme (six)—totaled more
than ten. The court thus determined that the applicable sentencing range was twenty-one to twenty-
seven months and sentenced her to twenty-one months, at the very bottom of the range, with two
years of supervised release and restitution in the amount of $20,987.15.
         On appeal, Yagar claims that the district court violated her Sixth Amendment rights by
enhancing her sentence, under sections 2B1.1(b)(1) and 2B1.1(b)(2)(A) of the Guidelines, based on
facts that were neither presented to a jury nor admitted by her. She also claims that the district court
erred in applying the enhancement under section 2B1.1(b)(2)(A) based on its finding that her offense
involved more than ten, but less than fifty, victims. The United States has cross-appealed, claiming
that the court erred by not applying a four-level enhancement under section 2B1.1(b)(2)(B) because
it alleges that fifty or more victims were involved.
                                                  II.
       We first consider whether the district court violated Yagar’s Sixth Amendment rights by
applying two sentence enhancements under sections 2B1.1(b)(2)(A) and 2B1.1(b)(1) of the
Guidelines based on facts that were neither proved to a jury nor admitted by Yagar. While this case
was pending on appeal before this Court, the Supreme Court issued its decision in United States v.
Booker. In Booker, the Supreme Court extended its Sixth Amendment holding in Blakely v.
Washington, __ U.S. __, 124 S. Ct. 2531, 2536-37 (2004), to the federal Sentencing Guidelines,
holding that “[a]ny fact (other than a prior conviction) which is necessary to support a sentence
exceeding the maximum authorized by the facts established by the plea of guilty or a jury verdict
Nos. 04-5151/5264 United States v. Yagar                                                       Page 3


must be admitted by the defendant or proved to a jury beyond a reasonable doubt.” Booker, 125 S.
Ct. at 756. In so holding, the Court expressly stated that its decision in Booker must be applied “to
all cases on direct review.” Id. Because this case was pending on direct review when Booker was
decided, the holdings of Booker are applicable in the present case.
         Given the Supreme Court’s opinion in Booker, and this Circuit’s case law applying that
decision, we are compelled to vacate Yagar’s sentence and remand for resentencing. The district
court relied on judge-found facts to apply two sentence enhancements in the present case, a two-
level enhancement under section 2B1.1(b)(2)(A) based upon its determination that the number of
victims totaled more than ten, and a four-level enhancement under section 2B1.1(b)(1) because it
found that the loss to the victims was between $10,000 and $30,000. The record indicates that
Yagar’s admissions were insufficient to justify either of these enhancements. Thus, based on facts
that were neither presented to a jury nor admitted by Yagar, the applicable sentencing range was
increased from four to ten months (offense level of four) to twenty-one to twenty-seven months
(offense level of ten). The district court’s reliance on judge-found facts to increase her sentence was
a violation of the Supreme Court’s Sixth Amendment holding in Booker. Regardless of whether
Yagar objected to her sentence on Sixth Amendment grounds in the district court, we are convinced
that the proper course of action is to vacate Yagar’s sentence and remand for resentencing. See, e.g.,
United States v. McDaniel, 398 F.3d 540, 547-51 (6th Cir. 2005) (holding that resentencing was
required, under plain-error inquiry, where defendant was sentenced under mandatory Guidelines
framework and received amount-of-loss enhancement pursuant to U.S.S.G. § 2B1.1(b)(1) based
solely on judge-found facts).
                                                 III.
         While resentencing is required under Booker, we consider the remaining claims because the
district court will need to consider the correct Guidelines-recommended sentence in fashioning its
own post-Booker sentence on remand. See McDaniel, 398 F.3d at 551 (“[B]ecause the district court
will need to consider the Guidelines-recommended sentences on remand, we take this opportunity
to provide some guidance as to the proper interpretation of the Guidelines provisions whose
application was challenged on appeal.”).
        The remaining issue is whether the district court was correct to apply a two-level sentence
enhancement under section 2B1.1(b)(2)(A) of the Guidelines based on its finding that the offense
involved more than ten, but less than fifty, victims. The district court concluded that a two-level
enhancement was appropriate because it found that there were at least eleven victims of the crime
under the Guidelines (the five banks defrauded in the scheme and the six account holders who had
to open new accounts and buy new checks as a result of Yagar’s actions). Both parties appeal this
decision. On the one hand, the United States claims that a four-level enhancement is appropriate
under section 2B1.1(b)(2)(B) of the Guidelines because it alleges that the crime involved more than
fifty victims—namely, the more than sixty account holders who temporarily lost funds resulting
from Yagar’s illegal conduct. On the other hand, Yagar claims that no enhancement was appropriate
under section 2B1.1(b)(2)(B) because the evidence in the record is insufficient to support the district
court’s finding that six account holders were not reimbursed for their costs of purchasing new
checks. Thus, she alleges there were only five true victims—namely, the five banks that suffered
actual losses due to Yagar’s scheme. Yagar also claims that even if the district court was correct
to conclude that at least six account holders were not reimbursed for their costs of purchasing new
checks, these six individuals are not “victims” under the Guidelines because the costs they incurred
are similar to minimal damages that the Application Notes exclude from the enhancement’s
coverage.
        A proper resolution of this issue largely depends on the scope of the word “victim” as it is
used in section 2B1.1 of the Guidelines. Unfortunately, the Application Notes to the 2002 version
Nos. 04-5151/5264 United States v. Yagar                                                         Page 4


of the Guidelines do not offer much clarity. Application Note 3(A)(ii) defines a “victim” as “any
person who sustained any part of the actual loss determined under subsection (b)(1).” The term
“actual loss” is defined as “the reasonably foreseeable pecuniary harm that resulted from the
offense.” Application Note 2(A)(i). Furthermore, “pecuniary harm” is defined as “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.” Application Note 2(A)(iii). “Reasonably
foreseeable pecuniary harm” is defined as “pecuniary harm that the defendant knew or, under the
circumstances, reasonably should have known, was a potential result of the offense.” Application
Note 2(A)(iv). Under Application Note 2(D)(i), certain damages are excluded from “actual loss,”
such as “interest of any kind, finance charges, late fees, penalties, amounts based on an agreed-upon
return or rate of return, or other similar costs.”
        In addressing the issues presented on appeal, we consider each group of potential “victims”
under the Guidelines. First, neither party contests the district court’s finding that at least five banks
lost funds because of Yagar’s scheme. Thus, there are at least five “victims” in the present case.
         The second group of potential victims consists of those account holders who only
temporarily lost funds resulting from Yagar’s conduct because their banks reimbursed them for their
losses. Counsel for the United States claims that the fact that the account holders were subsequently
reimbursed for their expenses should not matter because under the Guidelines “[t]here is no
limitation as to when the actual loss must exist.” Because the account holders temporarily lost funds
from their account, the United States claims that they should be considered victims despite the fact
that they were reimbursed. We disagree. In our view, these account holders are not “victims” under
the Guidelines because they were fully reimbursed for their temporary financial losses. While there
may be situations in which a person could be considered a “victim” under the Guidelines even
though he or she is ultimately reimbursed, in situations such as this, where the monetary loss is
short-lived and immediately covered by a third-party, we do not think that there has been “actual
loss” or “pecuniary harm.” In sum, the account holders here suffered no adverse effect as a practical
matter from Yagar’s conduct. Although our research produced no circuit court opinion on this issue,
at least one district court seems to have taken a similar view. Cf. United States v. Mohammed, 315
F. Supp. 2d 354, 361-63 (S.D.N.Y. 2003) (concluding, with the government’s concession, that
enhancement under section 2B1.1(b)(2) was not proper where the defendant used stolen credit card
information to make purchases and the victimized cardholders were reimbursed by the “merchants
or financial institutions that ultimately bore the losses from these charges”). Thus, we hold that the
district court did not err in excluding account holders who temporarily lost money from Yagar’s
conduct because, as the court correctly noted, under the Guidelines “the loss . . . has to be defined
by what . . . resulted from the offense.”
        The final group of potential victims consists of the six account holders who were allegedly
not fully reimbursed by their banks for the damages incurred when they had to order new checks.
The district court concluded that these individuals did suffer reasonably foreseeable actual loss
because there was, in its view, sufficient evidence to conclude that at least six account holders were
required to pay for new checks as a result of Yagar’s scheme. In making this finding, the district
court relied on the testimony of two individuals, Kimi Johnson, a check-fraud investigator at First
Tennessee Bank, and Eddie Ellis, Jr., a postal inspector who interviewed the account holders
impacted by Yagar’s scheme. The court explained its ruling:
        I think there were at least six individuals . . . who had to go out and close accounts
        and repurchase checks and things of that nature, and I believe Ms. Johnson testified,
        I mean, that based on what I heard from First Tennessee, they reimbursed these
        people for the checks that were, the moneys that were taken from their account to
        cover the checks but not for these other incidental expenses that they incurred as a
Nos. 04-5151/5264 United States v. Yagar                                                                  Page 5


        result of this offense. There is no evidence, at least no indication rather, from what
        Mr. Ellis said that any of the six people he spoke with were ever reimbursed.
        Our review of the record suggests that the district court erred in finding sufficient evidence
that six account holders suffered pecuniary harm. There is testimony in the record from Mr. Ellis
that it was his understanding that at least six of the account holders he talked to were required to
pay for the new checks. However, Ellis later admitted on cross examination that the account holders
“did not tell [him whether] they were reimbursed” for their purchase of the new checks. In fact,
Ellis admitted that he never even asked the account holders whether they were reimbursed for their
expenses. While counsel for the United States claims in its briefs before this Court that the six
account holders “paid for the issuance of checks on the new accounts for which they were not
reimbursed,” the government fails to point to any substantive evidence in the record supporting this
statement. Moreover, the district court’s assessment of Johnson’s testimony also appears to be
misguided. We can find no evidentiary support in the record for the district court’s finding that First
Tennessee did not reimburse its account holders for the new check orders.
        Because a finding under the Guidelines must be based on reliable information and a
preponderance of the evidence, see U.S.S.G. § 6A1.3, commentary, we hold that the district court
did not have a proper factual basis to apply an enhancement under section 2B1.1(b)(2)(A). See, e.g.,
United States v. Lewis, 88 Fed. Appx. 898, 902, 2004 WL 376828 (6th Cir. Feb. 27, 2004)
(concluding that evidence was not sufficient to support an enhancement based on the number of
victims where the court had “no way of knowing” whether the alleged victims actually suffered
pecuniary harm); United States v. Gray, 71 Fed. Appx. 300, 301, 2003 WL 21683709 (6th Cir. July
18, 2003) (concluding that number-of-victims adjustment under section 2B1.1.1(b)(2)(A) was
wrongly applied where there was insufficient evidence to support district court’s conclusion that the
underlying offense involved more than ten victims). Thus, we hold that it would be improper for
Yagar’s sentence   to be enhanced based on this record under section 2B1.1(b)(2)(A) of the
Guidelines.1
                                                       IV.
        For the foregoing reasons, we VACATE Yagar’s sentence and REMAND for resentencing
pursuant to the Supreme Court’s decision in Booker. Furthermore, we instruct the district court that
the evidence contained in this record is insufficient to support an enhancement under section
2B1.1(b)(2)(A) given the lack of evidence establishing that six account holders were not reimbursed
for their expenses.




        1
           Because we conclude that an enhancement under section 2B1.1(b)(2)(A) is not adequately supported by the
record, we need not consider Yagar’s remaining claim that the costs of purchasing new checks are minimal damages
insufficient to justify an enhancement under this section of the Guidelines.
