No Requirement of Actual Harm for Vulnerable Victim Enhancement

Circuit Court Ruling - Law Offices of Hope C. Lefeber

In United States v. Adeolu, No. 14-3610, 2016 WL 4728003, the Third Circuit held that the vulnerable victim enhancement at U.S.S.G. § 3A1.1(b)(1), does not require actual harm to the victim, only a nexus between the victim’s vulnerability and the crime’s success.

Adeolu, a tax preparer, prepared fraudulent tax returns by having his clients claim false dependents. Adeolu was ultimately convicted of conspiracy to defraud and aiding and abetting the preparation of materially false tax returns (18 U.S.C. § 371 and 26 U.S.C. § 7206(2)). At sentencing, the court applied the vulnerable victim sentencing enhancement based on the use of young children's personal information. Appellant argued that the children were not vulnerable victims because they did not experience “actual” harm.

The Third Circuit rejected the “actual harm” argument and held that any issue regarding harm is encompassed within the analysis of the nexus between a victim's vulnerability and the crime's success. This allows the court to assess whether a victim has been “taken advantage of” in a manner that facilitates the defendant's scheme. Actual harm is not relevant to this analysis.

The Court noted that the purpose of § 3A1.1 is to “acknowledge that, . . . defendants know or should know of their victim's particular vulnerability and are therefore more blameworthy for knowingly or even negligently harming them.” (citation omitted). “But a defendant is not more or less blameworthy for the purposes of this enhancement based on the amount of harm that a victim experiences. Applying the enhancement in such a manner would create a disparity in the punishments for defendants who are more successful (and cause more harm) and those who are less successful.” Thus, the Court held that there is no requirement of “actual” harm.

In this case, the finding of vulnerability was based upon the fact that the victims were the children whose identities were stolen. The Third Circuit held that since children are unable “to guard against theft of personal information,” and the defendant knew of the victims' vulnerability and that their ages were integral to qualifying as dependents on the fraudulent returns, there was a “nexus” between the victims' vulnerability and the success of the scheme.