In a significant ruling for sentencing in fraud cases, the Fifth Circuit Court of Appeals vacated Ethan Sturgis Day's sentence and remanded for resentencing in United States v. Day (No. 23-50636, decided Sep 16, 2024).
Key Points:
1. The court found that the district court erred in applying a six-point enhancement under U.S.S.G § 2B1.1(b)(2)(C) for causing substantial financial hardship to 25 or more victims.
2. The Fifth Circuit held that the district court failed to properly assess whether the loss "significantly impacted the victim's resources" for each of the 25+ victims required for the enhancement.
3. The court emphasized that the substantial hardship enhancement is distinct from the total loss amount and requires a more individualized assessment of victim impact.
Substantial financial hardship is a relatively recent addition to the Sentencing Guidelines. Added in 2015, it "advises sentencing courts to consider the extent of the harm rather than merely the total number of victims of the offense (as its predecessor did) in an effort to 'place greater emphasis on the extent of harm that particular victims suffer as a result of the offense.'"
United States v. Day, No. 23-50636, at *4 (5th Cir. Sep. 16, 2024)
4. The court upheld the two-point enhancement under U.S.S.G. § 3B1.1(c) for Day's role as an organizer, leader, manager, or supervisor in the criminal activity.
Implications:
When challenging substantial hardship enhancements, it is important to emphasize the need for individualized assessment of victim impact beyond mere loss amounts and argue against inferring patterns of substantial hardship without specific evidence for the required number of victims.
