Case: 6:23-cr-00060-REW-EBA Doc #: 46 Filed: 08/12/24 Page: 1 of 7 - Page ID#: 131
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
LONDON
CRIMINAL ACTION NO. 6:23-60-REW
UNITED STATES OF AMERICA PLAINTIFF
V. SENTENCING MEMORANDUM OF THE UNITED STATES
JESSE E. KIPF DEFENDANT
* * * * *
The Defendant is a serial hacker, stealing personal identifying information and infiltrating
protected computer networks of businesses and governmental entities with abandon. He caused
significant damage, both monetarily and in the form of technological responses, to his corporate
and governmental victims. By attempting to kill himself off to avoid child support obligations,
the Defendant continues to re-victimize his daughter and her mother, who are owed more than
$116,000 in child support obligations. In advance of sentencing in this matter, the United States
sets forth below its position on the appropriate sentence. Balancing the seriousness of the offense
and other factors in 18 U.S.C. § 3553(a), the government recommends a sentence of 60 months as
to Count Two, to be served consecutively with a sentence of 24 months as to Count Seven, for a
total term of 84 months. This sentence meets the objectives of 18 U.S.C. § 3553(a) in fashioning
a sentence that is adequate, but not greater than necessary, as required by law.
I. The Applicable Advisory Guidelines Range
The advisory Sentencing Guidelines range serves as the “starting point and initial
benchmark” for the Court’s sentencing analysis. United States v. Bolds, 511 F.3d 568, 579-80 (6th
Cir. 2007) (citation omitted). Accordingly, the Court “should begin all sentencing proceedings by
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correctly calculating the applicable Guidelines Range.” United States v. King, 553 F. App’x 518,
520 (6th Cir. 2014) (citing Gall v. United States, 552 U.S. 38, 49 (2007)).
The Presentence Investigative Report (“PSR”) correctly calculated a total base offense
level of six, which is increased by ten (10)-levels for a loss amount exceeding $150,000. See
U.S.S.G. §§ 2B1.1(a)(2); 2B1.1(b)(1)(F). [PSR at ¶¶ 31, 32.] The PSR also properly increased the
offense level by two (2) points, because the offense involved 10 or more victims; two (2) points
because the offense involved sophisticated means and the defendant intentionally engaged in or
caused the conduct constituting sophisticated means; two (2) points because the offense involved
trafficking in unauthorized access devices; and two (2) points because the offense involved
unauthorized public dissemination of personal information. See U.S.S.G. § 2B1.1(b)(2)(A)(i),
(b)(10)(C), (b)(11)(B)(i), (b)(18)(B). [Id. at ¶¶ 33-36.] Finally, the PSR properly awarded KIPF
with a three (3)-point reduction for acceptance of responsibility. See U.S.S.G. § 3E1.1(a). [Id. at
¶ 43.] With the PSR’s total offense level of twenty-one (21) and a criminal history falling in
Category IV, KIPF’s properly calculated, advisory Guidelines range is 57 to 71 months’
imprisonment as to Count Two. [Id. at ¶ 79.] Because the statutory maximum penalty as to Count
Two is five years, his adjusted Guidelines range is 57-60 months. [Id.]
As to Count Seven of the Indictment, the Guidelines sentence is the minimum term of
imprisonment required by statute, which is 24 months’ incarceration, consecutive to the term of
imprisonment levied for Count Two. [Id. at ¶ 78.]
II. A Guideline Sentence is Appropriate Under 18 U.S.C. § 3553(a)
While the advisory Guidelines range serves as the “starting point and initial benchmark”
for the Court’s sentencing analysis, Bolds, 511 F.3d 579-80, the Court must also consider the
factors set forth in 18 U.S.C. § 3553(a). These include the nature and circumstances of the offense,
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the history and characteristics of the defendant, the need for the sentence imposed to reflect the
seriousness of the offense, and the need to avoid unwarranted sentencing disparities between
similarly situated defendants. See 18 U.S.C. § 3553(a)(1)-(3), (6). When fashioning the appropriate
sentence, the Court endeavors to find a punishment that is “sufficient, but not greater than
necessary” to address these considerations. 18 U.S.C. § 3553(a).
In achieving this task, district courts consider the Sentencing Guidelines together with the
statutory factors set forth in § 3553(a). See United States v. Booker, 543 U.S. 220, 246 (2005).
This is because the Guidelines “reflect the fact that the Sentencing Commission examined tens of
thousands of sentences and worked with the help of many others in the law enforcement
community over a long period of time in an effort to fulfill [its] statutory mandate.” Rita v. United
States, 551 U.S. 338, 349 (2007). The Guidelines therefore “seek to embody the § 3553(a)
considerations, both in principal and in practice.” United States v. Haj-Hamed, 549 F.3d 1020,
1027 (6th Cir. 2008) (quoting Rita, 552 U.S. at 350).
Turning first to the nature and circumstances of the offense, the Defendant’s online exploits
displayed an unusual breadth, recklessness, and disregard for victims. The Defendant identified
vulnerabilities in state Death Registry Systems, including those for Hawaii, and logged into
legitimate accounts on those systems using personally identifying information he stole from real,
practicing physicians, in order to abuse the accounts to create fake death certificates for himself.
[PSR at ¶¶ 9-14.] He then posted for sale on darknet forums instructions for how to access these
same Death Registry Systems, attempting to profit from the dissemination of this harmful
information. He also infiltrated private business networks and acknowledged selling access to at
least one corporate victim’s private databases to Russians. [PSR at ¶ 16, 20.] The damage this
caused to the state Death Registry Systems was multifaceted, including nearly $80,000 in costs to
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repair and untold consequences in trying to rectify the networks and the harm to the individuals
whose personally identifying information was exposed, stolen, or misused.
To that end, the Defendant “acknowledged having databases of personal identifiable
information on his electronic devices, including social security numbers, birth dates, and medical
records,” which he sold “to international buyers, including individuals from Algeria, Russia, and
Ukraine.” [PSR at ¶ 16.] To traffic so flippantly in the personal identifying information of a
“database” worth of real people demonstrates utter disregard for everyday people he is exploiting.
The criminality of the Defendant extended beyond this greed and disrespect for society,
when the Defendant orchestrated his own fake death, in order to avoid child support obligations.
Investigators found KIPF’s research on his laptops, where he searched for topics such as,
“California child support arrears father died, “ and “Remove California child support for
deceased.” [PSR at ¶ 19.] Obviously satisfied that his death would eliminate his child support
obligations, the Defendant went so far as to obtain a social security number not issued by the Social
Security Administration, to use after the government registered his death as to his real social
security number. [PSR at ¶¶ 16, 19.]
Turning next to his history and characteristics, KIPF’s criminal history is concerning.
Beginning at the age of 21, the U.S. Army charged the Defendant for larceny of private property
and wrongful damage of government property, for which he received a nonjudicial punishment
within the military. [PSR at ¶ 50.] At the age of 25, law enforcement in Texas charged the
Defendant for fraudulent use/possession of identifying information for which he received a
deferred adjudication after a guilty plea. [Id. at ¶ 51.] The government moved to revoke this
deferred adjudication in 2010, for crimes committed in Nebraska, but the defendant was discharged
from probation for lack of due diligence of the state. [Id.]
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The Nebraska charges included criminal possession of four or more financial transaction
devices in September of 2010, for which he was found guilty and sentenced to three to five years
(ordered to serve at least 18 months), and assault by a confined person in December of 2010, for
which he was found guilty and sentenced to one to two years, consecutive to the September of
2010 conviction. [PSR at ¶¶ 52-53.] The Nebraska Department of Corrections reported several
disciplinary infractions in addition to the assault for which he was charged, during his stint in
prison. [Id.] At the age of 30, the Defendant was convicted of driving while intoxicated in
Corydon, Indiana, and received a suspended sentence, which was revoked when he failed to
complete his alcohol/drug program. [Id. at ¶ 54.]
KIPF also has pending charges against him in Pulaski County, stemming from his theft of
credit card numbers to use to pay for food delivery apps, such as Door Dash. [Id. at ¶ 59.] These
pending charges highlight KIPF’s decision to avoid ever obtaining legitimate employment, and
instead to apply his ample technical knowledge towards making a living by stealing from others.
When arrested on the Pulaski County charges, KIPF admitted “he had not held legitimate
employment for the last five years and that he was selling identities for income.” [Id. at ¶ 16.] He
confirmed this in his interview with U.S. Probation. [Id. at ¶ 71.] To his credit, the Defendant is a
decorated member of the U.S. Army, but his military record is also marred with misconduct,
including periods of being AWOL and violating military other rules. [Id. at ¶ 68-70.]
KIPF’s personal history displays a classic recidivist profile, perhaps stemming from his
mental health issues and substance abuse history. Nevertheless, military discipline and judicial
punishment at the state and local level has not served its intended purposes throughout his life, as
he continues to engage in criminal conduct in an increasingly harmful way. A Guidelines sentence
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balances the nature and circumstances of the offense with the history and characteristics of the
Defendant, as well as promotes specific deterrence as to this Defendant.
A strong sentence on these convictions will also reflect the seriousness of the offense,
promote respect for the law, and protect the public. Perhaps equally as important is the deterrent
effect of incarceration to all similarly situated individuals armed with cyber skills comparable to
the Defendant. Operating criminal enterprises online generates a distance between the perpetrator
and the victims, so much so that taking advantage of members of others can feel as illusory as
playing a video game. This detachment breeds a lack of sympathy, which encourages hackers to
continue to engage in criminal behavior. Similarly situated individuals must see the real danger
they present to victims and be deterred from engaging in online criminal conduct by the fear of
punishment. The cloak of anonymity afforded by the dark web is too alluring without the persistent
threat of being brought to justice and serving a significant sentence.
Conclusion
The offense level is correctly calculated in the PSR. Based on the factors mentioned above,
this Court should sentence KIPF to a term of 60 months on Count Two and a consecutive term of
24 months on Count Seven, for a total of 84 months’ incarceration.
Respectfully submitted,
CARLTON S. SHIER, IV
UNITED STATES ATTORNEY
By: /s/ Kathryn M. Dieruf
Kathryn M. Dieruf
Assistant United States Attorney
260 W. Vine Street, Suite 300
Lexington, Kentucky 40507-1612
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(859) 685-4885
Kathryn.Dieruf@usdoj.gov
CERTIFICATE OF SERVICE
On August 12, 2024, I electronically filed this document through the ECF system, which
will send the notice of electronic filing to counsel of record:
Thomas Paul Miceli
Attorney for Jesse Kipf
s/ Kathryn M. Dieruf
Assistant United States Attorney
