When Fraud Victims Count as Vulnerable: Tenth Circuit

A fraud victim's money troubles can support a higher guideline range, but only if the scheme actually used that weakness. On October 27, 2026, in a published opinion, the Tenth Circuit upheld a 2-level increase for "a large number of vulnerable victims" because the sentencing judge made victim-by-victim findings tying each person's situation to the fraud (United States v. Hess, Nos. 25-1191 and others).

What happened

Megan Hess ran a Colorado funeral home. Her mother, Shirley Koch, worked there. Each pleaded guilty to one count of mail fraud and aiding and abetting (18 U.S.C. § 1341) for a scheme in which families paid for cremations, while the bodies of their loved ones were sold to body brokers without proper consent.

In a first appeal in 2024, the Tenth Circuit sent the case back for resentencing. One reason: the district court had treated every grieving family member as vulnerable without explaining how grief made the fraud easier.

On remand, the district court heard new victim statements and expert testimony. It found 21 specific victims vulnerable, mostly families with little money who chose the funeral home because of low-price or no-cost cremation offers, and families referred by hospice providers. It applied the increase again and imposed the same sentences: 240 months for Ms. Hess, the statutory maximum, and 180 months for Ms. Koch.

What the court decided

The test is a link between the weakness and the fraud. Under the guideline commentary, a vulnerable victim is someone "unusually vulnerable due to age, physical or mental condition," or "otherwise particularly susceptible to the criminal conduct" (USSG §3A1.1, comment. (n.2)). Being vulnerable in a general sense is not enough. The victim's condition must have "enabled or facilitated commission of the fraud."

The court rejected a "detect and thwart" test. Ms. Hess relied on a First Circuit case to argue the question is whether a victim was less able to spot or stop the fraud. The Tenth Circuit declined to adopt that test. It held the key question is whether the defendant exploited the victim's vulnerability to carry out the fraud.

Shared traits are fine if the findings are specific. The court said the district court did not make a forbidden "class" presumption. It explained, victim by victim, how the low-price offers used each person's financial situation to get the bodies into the defendants' hands. Several victims sharing the same weakness did not turn that into a presumption.

Fifteen victims was a "large number." The court affirmed the findings for 15 victims and held that 15 is enough in a mail fraud case. It did not decide the minimum.

No knowledge requirement for the extra 2 levels. The first 2-level increase, §3A1.1(b)(1), requires that the defendant "knew or should have known" a victim was vulnerable. The added increase in §3A1.1(b)(2) has no such requirement. It covers all victims of the defendant's relevant conduct under USSG §1B1.3, including conduct she aided and abetted. So it applied to Ms. Koch even though she did not deal with most of those victims herself.

The government's position did not bind the court. Under its plea agreement, the government told the district court the increase should not apply to Ms. Koch. The court of appeals held that a judge is not bound by the parties' view of a legal question.

The court also rejected Ms. Hess's argument about her rehabilitation in prison. Under Pepper v. United States, 562 U.S. 476 (2011), a resentencing court "may consider" that evidence, but it does not have to reduce the sentence. Because she did not object at the hearing, review was only for plain error, and she lost.

What it means if you are charged with fraud

• Make the government prove the link. The question is not whether victims were elderly, sick, grieving or poor. It is whether the scheme used that condition. Ask the court for findings about each victim it counts.
• Know what you are responsible for. Under the relevant conduct rules, the large-number increase can reach victims you never met.
• A plea deal does not control the guideline math. If the government agrees not to seek an increase, the judge can still apply it.
• Object at sentencing. Arguments not raised at the hearing get plain-error review on appeal, which is hard to win.

Our page on mail and wire fraud explains the charges, and our sentencing guide covers how the guidelines work.