United States of America v. Paul Harmon

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 24-2057
UNITED STATES OF AMERICA
v.
PAUL HARMON,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(District Court No. 2:20-cr-00382-001)
District Judge: Honorable J. Nicholas Ranjan
Argued on June 24, 2025
Before: MONTGOMERY-REEVES, ROTH, and AMBRO,
Circuit Judges
(Opinion filed August 14, 2025)

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Stacie M. Fahsel (Argued)
Office of Federal Public Defender
1001 Liberty Avenue
1500 Liberty Center
Pittsburgh, PA 15222
Counsel for Appellant
Laura S. Irwin
Matthew S. McHale (Argued)
Office of United States Attorney
700 Grant Street
Suite 4000
Pittsburgh, PA 15219
Counsel for Appellee
OPINION OF THE COURT
AMBRO, Circuit Judge
Paul Harmon pled guilty in 2021 to one count of wire
fraud. In 2024, he moved under 18 U.S.C. § 3582(c)(2) for a
sentence reduction because of a new, retroactive section of the
Sentencing Guidelines, U.S.S.G. § 4C1.1. The District Court,
relying on a victim impact statement from the initial
sentencing, denied the motion on the ground that Harmon’s
crimes had caused substantial financial hardship to his victims.
It offered Harmon no opportunity to challenge the facts in the
statement at the motion-for-sentence-reduction stage. He

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appeals, contending the Court’s reliance on that statement
violated his due-process rights.
We hold that U.S.S.G. § 6A1.3(a), which outlines due-
process protections for sentencing, applies to the consideration
of motions for sentence reduction under 18 U.S.C.
§ 3582(c)(2). Put simply, defendants must be “given notice of
and an opportunity to contest new information relied on by the
district court in a § 3582(c)(2) proceeding.” United States v.
Jules, 595 F.3d 1239, 1245 (11th Cir. 2010). Applying this rule
here, we affirm Harmon’s sentence because the information he
seeks to contest is not new.
I
For more than 40 years, Harmon worked as an
accountant for a family-owned electrical engineering firm, the
Fuellgraf Electric Company, eventually becoming controller of
the firm. Following a scheme through which he embezzled
more than a million dollars, he was charged in 2020 with one
count of wire fraud, 18 U.S.C. §§ 2, 1343, and he pled guilty
in 2021.
With no prior criminal history and a total offense level
of 20, Harmon’s Guideline range of imprisonment was 33–41
months. Neither the presentence report (PSR) nor the
Government recommended an enhancement under U.S.S.G.
§ 2B1.1(b)(2)(A)(iii), which adds two offense levels if the
crime underlying a fraud conviction “resulted in substantial
financial hardship to one or more victims.”
Before sentencing, the president of Fuellgraf Electric,
Charles “Chud” Fuellgraf III, submitted a victim impact letter.

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He then shared a victim impact statement during the sentencing
hearing. He described the betrayal and financial difficulty his
family experienced. He noted that the family spent almost
$400,000 on lawyers and accountants to address the damage
done by Harmon and that the business overpaid taxes by more
than $800,000 because of the fraud. Fuellgraf added that
Harmon embezzled almost $30,000 from employees via
benefit programs, gambled more than $3.3 million, and faked
having cancer to explain his absences from work. Fuellgraf
used his retirement accounts, personal property, and family
money and real estate to try to save the company, but Fuellgraf
Electric shut down in 2021 after 75 years of business. He
expressed that he will no longer be able to retire or to leave
anything for his children.
Though the Government did not move for any upward
departure or variance, the District Court observed:
I know the [G]overnment here is arguing for a
[G]uideline sentence but this is a case where the
[G]uidelines actually understate the severity of
what you have done here. It doesn’t account for
the multiple victims here, it doesn’t account for
what I tally [as] an additional million dollars at
least of additional financial loss and it doesn’t
account for the ruin of a family business here. So
in my estimation, the [G]uidelines here, they
don’t go far enough.
So in considering all these factors and weighing
some differently than others here, I think a
[G]uideline sentence is not sufficient enough. I
think what I see before me is somebody who

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betrayed trust and[,] for lack of a better term,
really acted as a parasite on this family and
family business and sucked the blood and life out
of it and now has to bear some of those
consequences.
App. 89–90. It varied upward and imposed a sentence of 72
months’ imprisonment.1 The “substantial financial hardship”
enhancement was not applied or discussed.
In 2023, the Sentencing Commission promulgated
Amendment 821, which created § 4C1.1 of the Guidelines.
That section permits a two-offense-level decrease for certain
defendants with no criminal history, and it applies
retroactively. But it excludes defendants who “personally
cause[d] substantial financial hardship.” U.S.S.G.
§ 4C1.1(a)(6).
In May 2024, Harmon moved for a sentence reduction
under § 4C1.1, and the Government did not oppose the motion.
Because Harmon’s existing sentence was about 75% greater
than the prior Guideline range, he asked the District Court for
a reduced sentence that was proportionally identical—75%
higher than his potential reduced range under § 4C1.1. The
updated Guideline range was 27–33 months, so Harmon
requested a 57-month term of imprisonment.
The District Court, relying on the victim impact
statement and letter, denied the motion. It followed the two-
1 Harmon appealed the substantive reasonableness of his
sentence, which we affirmed in an unpublished opinion.
United States v. Harmon, No. 21-2512, 2023 WL 2423471 (3d
Cir. Mar. 9, 2023).

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step inquiry for ruling on § 3582(c)(2) motions: (1) assessing
“the prisoner’s eligibility for a sentence modification”; and (2)
if he is eligible, deciding whether the modification is warranted
under the applicable sentencing factors in 18 U.S.C. § 3553(a).
Dillon v. United States, 560 U.S. 817, 827 (2010). At the first
step, it found that Harmon “personally cause[d] substantial
financial hardship,” meaning he was ineligible for the
reduction under U.S.S.G. § 4C1.1(a)(6). App. 11 (alteration in
original) (quoting § 4C1.1(a)(6)). In a footnote, the Court
reasoned that “in hindsight, [it] probably should have applied
the Section 2B1.1 ‘substantial financial hardship’ enhancement
at the time of sentencing.” App. 13 n.2. Though it did not need
to reach the second step in light of its ineligibility conclusion,
the Court also noted that the § 3553(a) factors did not favor a
reduction. Harmon timely appealed.
II
The District Court had jurisdiction over Harmon’s
federal offense under 18 U.S.C. § 3231. We have jurisdiction
under 28 U.S.C. § 1291 to review the final order denying his
sentence reduction.
Harmon preserved the issues he appeals by seeking a
reduction in his sentence before the District Court. In the
sentence-reduction context, we review legal questions about
the interpretation of the Guidelines de novo and all other
determinations for abuse of discretion. United States v.
Thompson, 825 F.3d 198, 203 (3d Cir. 2016).2
2 The Government contends that Harmon’s appeal should be
reviewed for plain error. At times, it mischaracterizes his
argument, responding as if he demands a hearing. He does not.

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As mentioned above, district courts must use a two-step
approach when evaluating a § 3582(c)(2) motion. “At step
one, § 3582(c)(2) requires the court to . . . determine the
prisoner’s eligibility for a sentence modification and the extent
of the reduction authorized.” Dillon, 560 U.S. at 827. “At step
two of the inquiry, § 3582(c)(2) instructs a court to consider
any applicable § 3553(a) factors and determine whether, in its
discretion, the reduction authorized by reference to the policies
relevant at step one is warranted in whole or in part under the
particular circumstances of the case.” Id.
In other places, the Government acknowledges that fact and
addresses instead Harmon’s argument for “a hearing or more
briefing.” Gov’t Br. 34. It contends that both requests should
be reviewed for plain error. Harmon did not make a hearing
request before the District Court or on appeal, so we need not
analyze the standard of review for a claim he does not raise.
As for the request for “more briefing,” the Government’s plain-
error argument fails. The due-process violation he alleges is
lack of notice and opportunity to respond. Without notice of
the Court’s reliance on the victim impact statement at the
motion-for-sentence-reduction stage, there was no chance to
object at that stage before it rendered its decision. Put
differently, Harmon did not know he would lack that
opportunity until after the Court resolved the motion, so he had
no chance to raise the challenge until this appeal. Regardless
whether he prevails on the merits of his argument that the
victim impact statement is new information, he could not have
raised this due-process argument any earlier. Plain-error
review thus does not apply. See Fed. R. Crim. P. 51 (“If a party
does not have an opportunity to object to a ruling or order, the
absence of an objection does not later prejudice that party.”).

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A. Defendants must receive notice of and an
opportunity to contest new information relied
upon by district courts in § 3582(c)(2)
proceedings.
U.S.S.G. § 6A1.3(a) requires the informational basis for
a sentence to have “sufficient indicia of reliability to support
its probable accuracy.” United States v. Miele, 989 F.2d 659,
663 (3d Cir. 1993) (quoting § 6A1.3(a)). It also provides that
“[w]hen any factor important to the sentencing determination
is reasonably in dispute, the parties shall be given an adequate
opportunity to present information to the court regarding that
factor.” U.S.S.G. § 6A1.3(a). We apply the indicia-of-
reliability standard “rigorously.” Miele, 989 F.2d at 664.
Several other circuit courts have held that the same
principles apply to motions for sentence reduction under
§ 3582(c)(2). See, e.g., United States v. Mueller, 168 F.3d 186,
189 (5th Cir. 1999) (“[I]n the context of a motion to modify
sentence filed pursuant to § 3582(c)(2), the defendant is
entitled to review any new evidence that is considered by the
district court.”); United States v. Neal, 611 F.3d 399, 402 (7th
Cir. 2010) (applying U.S.S.G. § 6A1.3(a) to § 3582(c)(2)
proceedings and noting that “a defendant is entitled to an
opportunity to dispute contestable factual propositions that
affect the sentence”); United States v. Foster, 575 F.3d 861,
863 (8th Cir. 2009) (“[A]lthough [Federal] Rule [of Criminal
Procedure] 32 does not by its terms apply to
a § 3582(c) proceeding, the basic right to be apprised of
information on which the court will rest its decision should be
incorporated into the procedures employed by a district court
under § 3582(c).”); Jules, 595 F.3d at 1245 (11th Cir.) (“[E]ach
party must be given notice of and an opportunity to contest new

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information relied on by the district court in
a § 3582(c)(2) proceeding.”).
But there is a circuit split on this issue. The Ninth
Circuit went the other way:
Section 6A1.3 applies only in original sentencing
proceedings, and not in § 3582(c)(2)
proceedings. Section 6A1.3 provides that
“[w]hen any factor important to the sentencing
determination is reasonably in dispute, ... the
court shall resolve [it] at a sentencing hearing in
accordance with [Federal Rule of Criminal
Procedure 32(i)].” USSG § 6A1.3(a)–(b) (2016)
(emphasis added). Rule 32 governs the
procedures for a defendant’s original sentencing,
and Rule 32(i) sets forth the procedures that a
sentencing judge must follow before imposing
the defendant’s original sentence. See Fed. R.
Crim. P. 32(i)(4)(B), (C).
United States v. Mercado-Moreno, 869 F.3d 942, 956 (9th Cir.
2017) (alterations and emphases in original).
Our Court has not weighed in on this issue. Harmon
asks us to take the same position as the Fifth, Seventh, Eighth,
and Eleventh Circuits. The Government urges us to adopt the
Ninth Circuit’s view.
We agree with Harmon: the due-process rights
safeguarded by U.S.S.G. § 6A1.3(a) apply to motions for
sentence reduction under 18 U.S.C. § 3582(c)(2). As the
circuits adopting that rule have acknowledged, defendants

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have fewer rights in the sentence-reduction context than at their
initial sentencings. See Jules, 595 F.3d at 1242 (“A defendant
in a § 3582(c)(2) proceeding . . . is not afforded all of the
protections he was afforded at the original sentencing.”); Neal,
611 F.3d at 401 (“[N]either the statute nor the Constitution
requires the judge to conduct a full resentencing in response to
a [§ 3582(c)(2)] motion.”). But we “require[] district courts to
apply [the] § 3553 factors in § 3582(c)(2) proceedings,” and
the “§ 3553(a) factors include the Guidelines’ policy
statements,” such as § 6A1.3(a). Jules, 595 F.3d at 1242; see
18 U.S.C. § 3553(a)(5). This reflects the broader “due process
right not to be sentenced on the basis of invalid premises or
inaccurate information,” Jules, 595 F.3d at 1243 (quoting
United States v. Satterfield, 743 F.2d 827, 840 (11th Cir.
1984)), which our Court has also recognized, United States v.
Norton, 48 F.4th 124, 131 (3d Cir. 2022) (“[I]t is well settled
that a defendant has a due process right to be sentenced based
upon accurate information.” (alternation in original) (internal
quotation marks omitted)). To hold otherwise would
undermine that important right.
The Ninth Circuit’s contrary ruling focuses on
“reject[ing] Defendant’s contention that the district court was
required to hold a hearing pursuant to USSG § 6A1.3.”
Mercado-Moreno, 869 F.3d at 956. The hearing requirement
comes from § 6A1.3(b), while our case focuses on the less
burdensome protections of § 6A1.3(a). And as explained
above, Harmon makes clear that he does not request a hearing;
he would be satisfied with a written opportunity to be heard.
We do not reach today the issue of hearings under § 6A1.3(b).
See United States v. Styer, 573 F.3d 151, 153–54 (3d Cir. 2009)
(holding on an abuse-of-discretion standard that a defendant
“was not entitled to an evidentiary hearing on his § 3582(c)(2)

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motion”); see also United States v. Townsend, 55 F.3d 168, 172
(5th Cir. 1995) (“[W]e do not reach the question of whether
§ 3582(c)(2) requires a hearing.”); Jules, 595 F.3d at 1245
(“[A]lthough a hearing is a permissible vehicle for contesting
any new information, the district court may instead allow the
parties to contest new information in writing.”).
In sum, we hold that § 6A1.3(a)’s requirements—
“sufficient indicia of reliability to support [the] probable
accuracy” of information underlying a district court’s decision
and “an adequate opportunity to present information to the
court”—apply to § 3582(c)(2) proceedings. Defendants must
be “given notice of and an opportunity to contest new
information relied on by the district court.”3 Jules, 595 F.3d at
1245.
B. Information is new when it is relied on for the
first time to find material facts.
Harmon asks us to impose the following rule: whenever
“information is relied on for the first time to find facts material
to a determination under the Sentencing Guidelines,” that
“information is ‘new’ in the relevant sense because, had it been
cited for that purpose at the original sentencing, that shift
would have altered the defense calculus for objecting and
challenging the evidence.” Reply Br. 11; see also Mathis v.
3 Our holding does not concern the ultimate source of the due-
process rights embodied in U.S.S.G. § 6A1.3, a matter we
leave for another day. We hold only that § 6A1.3(a)’s
requirements apply to motions for sentence reduction under 18
U.S.C. § 3582(c)(2) just as they apply to plenary sentencing
proceedings.

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United States, 579 U.S. 500, 512 (2016) (“[A] defendant may
have no incentive to contest what does not matter under the
law.”); Descamps v. United States, 570 U.S. 254, 270 (2013)
(“[D]uring plea hearings, the defendant may not wish to irk the
prosecutor or court by squabbling about superfluous factual
allegations.”).
Two rationales are at play in Harmon’s definition, only
one of which we find persuasive. The first is ensuring that
parties are not surprised by information they have not had an
opportunity to contest. This principle aligns with our
procedural-due-process precedent and that of other circuits.
See Norton, 48 F.4th at 131 (“[I]t is well settled that a
defendant has a due process right to be sentenced based upon
accurate information.” (alternation in original) (internal
quotation marks omitted)); Jules, 595 F.3d at 1243 (discussing
the “due process right not to be sentenced on the basis of
invalid premises or inaccurate information”). Even the
Government acknowledges that, in some cases, “a defendant
could make an argument of the ‘how was I to know?’ variety.”
Gov’t Br. 31.
The second rationale is giving parties the chance to
choose whether to contest information with full strategic
knowledge of the benefits and drawbacks. This rationale is less
persuasive. Mathis says only that a fact must “matter under the
law” for the opportunity to contest it to be meaningful. 579
U.S. at 512. Put differently, the Supreme Court drew the line
at whether the fact is legally material at the time it arises, not
at whether the defendant has full strategic insight. Descamps
is similar, noting only that “superfluous facts cannot license a
later sentencing court to impose extra punishment.” 570 U.S.
at 270 (emphasis added).

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We therefore define “new information” as information
relied on for the first time to find material facts. This rule
accounts for the importance of (1) giving defendants an
opportunity to contest information when it matters under the
law and (2) sentencing them based on reliable factual findings.
But it does not define “new information” based on the stage of
the inquiry at which it arises—Guideline calculation versus
analysis of § 3553(a) factors—or on defense counsel’s
strategic calculus. Harmon’s proposed rule would do both
those things, burdening district courts with requirements
disconnected from the core protection: notice and opportunity
to contest information.
C. The victim impact statement and letter were
not new information for purposes of
Harmon’s motion for sentence reduction.
For the initial sentencing hearing, Harmon argues that
he had no reason to contest the victim impact statement and
letter and that it would have been unwise to do so given the
downward variances he sought for remorse and acceptance of
responsibility. The Government requested a within-Guideline
sentence and did not seek a “substantial financial hardship”
enhancement, nor did the PSR indicate it, and the District
Court did not apply it. In Harmon’s view, there was no reason
for him to address the factual accuracy of the statement. He
urges us to examine “the reasoning behind the notice-and-
opportunity rule” and to consider how and why the victim
impact statement and letter had been used previously. Reply
Br. 2.

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The Government contends that, even at the sentencing,
the statement and letter played a significant role in the District
Court’s weighing of the § 3553(a) factors. As a result, it argues
Harmon had a chance and a reason to challenge them if he had
concerns about their reliability. It acknowledges that “[t]here
could be a hypothetical case where some information played a
trivial role at a defendant’s original sentencing, only later to
take on a surprisingly outsize significance in the context of a
§ 3582(c)(2) motion . . . . But this is not that case.” Gov’t Br.
31.
We agree with the Government. Harmon is right that
no one asked for the § 2B1.1(b)(2) enhancement,4 and he could
not have anticipated the future § 4C1.1(a)(6) exception issue.
But he had both reason and opportunity to dispute the victim
impact statement and letter at the initial sentencing. The
District Court emphasized that it “considered . . . Mr.
Fuellgraf’s statement,” App. 88, and referred to it in discussing
the “serious[ness]” and “multiple victims” of the offense, App.
89. The Court tied those considerations to the § 3553(a)
factors, including “a need for just punishment . . . and a need
to promote a respect for the law.” App. 89. It also noted
“significant monetary loss that goes well beyond the $1.4
million” calculated by the PSR, amounting to “an additional
million dollars at least of additional financial loss” as well as
“the ruin of a family business.” App. 89. That information
seems to be from the victim impact statement; the PSR and the
Government’s sentencing memorandum focused on the $1.4
million of restitution, not the additional losses and effects on
the family. If Harmon thought that statement of the family’s
loss was inaccurate, he had an opportunity and a reason to
4 More on this enhancement in Section II.E below.

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object at the time of the sentencing. Those losses were highly
relevant to the § 3553(a) factors, as explained above. The
victim impact statement and letter therefore do not qualify as
“new information” under our definition—information relied on
for the first time to find material facts.
At the motion-for-reduction stage, Harmon contends he
had no reason to address the “substantial financial hardship”
exception because the Government did not oppose his motion.
In his view, the exception cannot be considered obvious from
the text of § 4C1.1 because it was “not obvious to the
Government.” Reply Br. 13.
The Government responds that Harmon had the burden
of proving his entitlement to a reduction, including under the
exception in § 4C1.1(a)(6). See United States v. Muhammad,
146 F.3d 161, 167 (3d Cir. 1998) (“The defendant bears the
burden of establishing by a preponderance of the evidence that
he is entitled to the sentence reduction.”). That the motion was
unopposed does not change Harmon’s burden. And the
District Court merely considered a requirement from the
Guideline under which Harmon sought a reduction. In the
Government’s view, the criteria in § 4C1.1 served as notice,
and the opportunity to comment was the written submission in
support of the reduction.
The Government again has the better argument.
Whether the “substantial financial hardship” exception in
(a)(6) was obvious to either side does not affect Harmon’s
burden to prove his eligibility, and his counsel should have
addressed any potentially applicable exceptions in its written
submission. Moreover, Harmon’s argument conflates two
types of notice: (1) that the District Court would rely on the

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information from the victim impact statement and letter and (2)
that it would consider applying the (a)(6) exception. There is
no colorable argument that the due-process protections of
§ 6A1.3(a) require the second. The exception is a legal
standard, not new information on which the District Court must
signal its reliance in advance.
D. The Government did not waive the argument
that Harmon is ineligible for the reduction.
In Harmon’s view, the Government cannot argue on
appeal for his ineligibility under § 4C1.1(a)(6) because it
waived that argument by declining to raise it before the District
Court. But the burden of proof for the sentence reduction was
on Harmon, as explained above. Muhammad, 146 F.3d at 167.
Regardless whether the Government opposed the reduction,
the District Court retained its discretion to decide whether
Harmon met his burden. We are therefore unpersuaded by his
waiver argument.
E. The District Court’s comment on the
enhancement for substantial financial
hardship under U.S.S.G. § 2B1.1(b)(2) does
not affect the disposition of the case.
Harmon contends that the District Court’s error was
compounded by its comment that “in hindsight, [it] probably
should have applied the Section 2B1.1 ‘substantial financial
hardship’ enhancement at the time of sentencing.” App. 13 n.2.
As a refresher, that enhancement applies if the offense
“resulted in substantial financial hardship to one or more
victims.” U.S.S.G. § 2B1.1(b)(2)(A)(iii).

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First, Harmon urges that if the Court relied on the
enhancement when deciding to reject the motion for sentence
reduction, that was an error independent of his due-process
contentions. See U.S.S.G. § 1B1.10(b)(1) (when considering a
motion for sentence reduction, “the court shall substitute only”
certain retroactive amendments, including the one that created
U.S.S.G. § 4C1.1, “for the corresponding [G]uideline
provisions that were applied when the defendant was sentenced
and shall leave all other [G]uideline application decisions
unaffected”). If that had occurred, Harmon would be right.
But the District Court’s stray comment that it “probably should
have applied” the enhancement at the sentencing is not enough
to show retroactive application. In fact, the phrasing suggests
the District Court realized it was too late. This argument is
thus unpersuasive.
Second, Harmon believes not applying Ҥ 2B1.1(b)(2)
. . . in [his] case reinforces that he should have been provided
an opportunity to contest that he caused ‘substantial financial
hardship’ to a victim.” Opening Br. 27 n.1. But § 4C1.1(b)(3)
instructs that, “[i]n determining whether the defendant’s acts
or omissions resulted in ‘substantial financial hardship’ to a
victim [under § 4C1.1(a)(6)], the court shall consider, among
other things, the non-exhaustive list of factors provided in
Application Note 4(F) of the Commentary to §[ ]2B1.1.”
U.S.S.G. § 4C1.1(b)(3) (emphasis added). Put differently,
§ 2B1.1(b)(2) and § 4C1.1(a)(6) are not co-extensive. The
commentary for § 4C1.1 is consistent with that instruction,
explaining that “[t]he application of [the ‘substantial financial
hardship’ exception in] subsection (a)(6) is to be determined
independently of the application of [the sentencing
enhancement in] subsection (b)(2) of § 2B1.1.” U.S.S.G.
§ 4C1.1 app. n.1. The sentence reduction exception in

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§ 4C1.1(a)(6) and the sentence enhancement in § 2B1.1(b)(2)
should be considered separately. Harmon urges us to do the
opposite, and we decline.
* * *
We hold that defendants must be “given notice of and
an opportunity to contest new information relied on by the
district court in a § 3582(c)(2) proceeding.” Jules, 595 F.3d at
1245. Information is new when relied on for the first time to
find material facts. Applying those rules here, the information
Harmon seeks to contest is not new. In fact, he had both reason
and opportunity to dispute it at the initial sentencing because it
was relevant to the District Court’s analysis of the § 3553(a)
factors. We therefore affirm the District Court’s denial of
Harmon’s sentence-reduction motion.

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