Hess and her mother, Koch, pleaded guilty in 2022 to mail fraud in what the United States Attorney’s Office called a long-running scheme to secure human remains through Hess’ Montrose businesses, Sunset Mesa Funeral Directors and Donor Services, Inc., a non-transplant tissue bank.

The government said Hess would offer lower-rate cremation services to the bereaved and collect payment, but instead, with her mother, harvested and sold the bodies or body parts of the deceased without the permission of next of kin, or with limited permission upon the promise the bodies would be returned and cremated. Instead, the funeral home returned random cremains to dozens of families on the Western Slope and beyond, who only learned what happened after the FBI raided Sunset Mesa and Donor Services in 2018.

Hess and Koch were originally sentenced in 2023 to 20 years and 15 years, respectively. They successfully argued for a new sentence, however, upon the U.S. Court of Appeals finding procedural errors by the sentencing court. The lower court improperly calculated offense levels, as well as losses associated with the case, resulting in lengthy prison terms, the appeals court found, remanding the matter for new sentences.

The defense teams and prosecutors are still at odds over the offense levels that are used to determine sentences in the federal system, and what underpins those offense levels.

Hess’ attorney in a December filing moved for a non-guideline sentence of 78 months (6.5 years), arguing the applicable guidelines called for between 78 - 97 months — far less than the original guideline determination, which she had successfully appealed. Federal prosecutors, however, are seeking a 188-month term, or 15.6 years.

Koch’s attorney argued she should be sentenced to 63 months, while federal prosecutors are seeking the top of the guideline range, 78 months.

The crux of the defense arguments is that an enhancement for fraud targeting “vulnerable victims” does not apply. Hess did not target victims who were “unusually vulnerable” or “particularly susceptible” to crime, as the government has contended, attorney Ashley Petrey said. Rather, the attorney said, Hess targeted her customers regardless of their age, mental condition, ability to protect themselves and income level. She targeted those who consented to donating remains, but who were misled as to the quantity, and those who did not consent to donation at all.

“In this world, nothing is certain except death and taxes. Losing a loved one or, in some cases, an estranged relative, is one of the most fundamental parts of our shared human existence. There is nothing unusual about it,” Petrey wrote.

During the original sentencing hearing, the government did not provide enough evidence to prove the vulnerable victim enhancement, and prosecutors cannot introduce new evidence at the new hearing, she argued. The enhancement level sought on this basis should not be applied, Petrey said.

Another factor that drives offense levels is loss amount. Petrey’s filing notes the government has stipulated that it cannot prove a greater than $550,000 loss. That means the 14-level enhancement applied at original sentencing is wrong, the attorney said.

'Never a wealthy kingpin'

In a separate filing, Petrey sought a non-guideline sentence, pointing to Hess as a “model inmate,” who had created educational classes in cross-stitching and embroidery, has become a suicide watch companion, and who volunteers in the prison library, while having completed Bible study courses. Hess “outlined several ideas for prison reform” at the women’s prison in Illinois where she and Koch are both held, created programs and initiatives, and is a “positive influence” on other inmates, several of whom have written letters of support, the filing says.

Far from reaping financial gain from Sunset Mesa, Hess lived a lower-middle class existence and from Donor Services, only took home between $20,000 and $30,000 a year, the filing states.

“Ms. Hess was never the wealthy kingpin she was always made out to be,” Petrey said, reiterating information from the 2023 sentencing about Hess’ traumatic brain injury a postpartum issues. “Ms. Hess suffered the delusion her fraud was a necessary means to a scientific end, delusional beliefs exacerbated by the combination of her TBI and postpartum struggles,” Petrey said.

Nor is her client fame-hungry. Hess has not spoken publicly about the case, except one time at the start, and despite intense media interest, the attorney said.

Of 327 “white collar crime” cases in fiscal year 2023, Hess’ was one of only two to receive an upward variance at sentencing, Petrey concluded.

'Wicked fraud scheme'

The USAO in its December motion sought an upward variance of two levels. Prosecutors contend the number of vulnerable victim enhancements still apply and the supporting guideline range is 151 - 188 months. The government is seeking the maximum of that range.

The loss amount now stipulated to is $546,776 — just slightly less than the $550,000 threshold, the government's filing says. That figure “does not account for the extreme indifference and cruel depravity found in the nature of the defendant’s conduct,” Assistant US Attorney Rebecca S. Weber wrote. Hess showed callous disregard for the victims’ wishes and sold body parts, which loss guidelines are inadequate to measure.

The emotional damage cannot be measured by dollars, either, Weber said, referring to Hess’ “wicked fraud scheme.” Hess showed a pattern of presenting false empathy and engaging in deceit to secure the business of those who used Sunset Mesa for a loved one’s final arrangements, as well as lied repeatedly over a course of about eight years in telling people their deceased loved ones would be cremated and returned, when she knew that she and her mother were selling the bodies, Weber said.

“Such conduct was outrageous. … The defendant’s repeated trickery and callous indifference towards her victims exposed a devious character trait which is not adequately captured under the guideline calculations. This is especially true when considering the fact that hundreds of victims were harmed during the scheme and many were left with untold emotional damage and haunting memories due to Hess’ greed,” Weber wrote.

Hess is not entitled to a downward variance in her sentence, Weber also said in a Dec. 16 filing. The sentence should be 188 months. “Put simply, the defendant urges the court to substantially reduce her original 20-year sentence — by approximately 13 years — in part due to the fact that she has followed prison rules and actively engaged in prisoner rehabilitation and educational programs,” Weber said, adding that although that is commendable, it isn’t remarkable that prisoners are expected to follow rules. Hess has also served only two years, so, Weber argued, it’s too soon to say that her behavior in prison has been so exemplary that the sentence should be dramatically cut.

Weber also asked the court to reject Hess’ excuse of a traumatic brain injury: she functioned well enough to engage in “pervasive” fraud over several years. “Instead, the time-old motive of ‘greed’ concisely explains the driving force behind her fraud scheme; she needs to be sentenced accordingly.”

Hess’ decision not to speak with media interested in her case is a “non-issue” with no bearing on a sentence reduction, Weber also said. She further said the “vitriol” Petrey noted from the victims is not a reason for a lesser sentence. “Victims are entitled to exercise their anger and hurt due to the defendant’s unprecedented and horrid crime. Such continued public outrage, if anything, simply highlights the unusually cruel and heinous nature of Hess’ offense. This fact certainly does not justify a reduced sentence,” Weber wrote.

And, Weber added, Hess’ crime is not comparable to any “white collar crime.” Apart from economic harm and “gross betrayal of trust,” Hess “orchestrated an unimaginable offense, causing untold pain and suffering for her many victims. Such a fact pattern case warrants a substantial sentence and upward variance — not a reduction.”

Weber argued that Hess’ defense misread the scope of the Appeals Court decision, which directed the original sentencing court to make particularized findings with respect to both Hess and Koch concerning the enhancement for “large number of vulnerable victims.” The USAO says that gave the sentencing court full discretion to make findings about victim vulnerability, arguments it repeated in response to Koch’s sentencing statement. The 10th Circuit opinion said if the USAO is going to argue for the vulnerable victim enhancement, it should contact the next of kin to obtain statements showing their vulnerability.

'Another bite of the apple'

Petrey in a Dec. 16 filing noted the Appeals Court ruling in Hess and Koch’s appeal: it rejected the theory that people who are grieving are automatically vulnerable victims as the law defines it. Again, she said, the USAO should be precluded from introducing any new evidence supporting its vulnerable victims position, because an appeal only considers the evidence from original proceedings.

“While the 10th Circuit directed the district court to make ‘particularized findings as to both defendants as it relates to the sentencing enhancement for large number of vulnerable victims,’ … the 10th did not give either the government or the lower court unlimited latitude to both generate and admit a considerable amount of new evidence in support of the enhancement’s application,” the filing states.

The USAO had the chance to meet its proof burden during the original sentencing hearing and did not do so, Petrey said. “The government does not get another bite at the apple simply because they are surprised the 10th Circuit disagreed with them. The government’s argument, as well as the court’s analysis, should be limited to the existing record.”

Further, even if the USAO is allowed to admit its new evidence, it cannot sufficiently prove the vulnerability question. It provided victim questionnaire answers, but did not include much, if any, applicable legal analysis, Petrey said. “Ms. Hess pursued body/tissue donation no matter the specific circumstances of her customers … the only common thread between Ms. Hess’ victims is that they all used her funeral home’s services. Like the 10th Circuit clarified in their opinion, an ‘inference’ that grief can make one vulnerable in a general sense is not enough to support the application of the vulnerable victim enhancement.”

Also on Dec. 16, Petrey objected to the government’s attempt at an upward variance. She said the USAO “spares no hyperbole” in the way it characterized Hess, who, she said, had shown compassion for people and provided a “large swath” of legitimate services. Hess believed she was helping a rural community while Donor Services was helping train doctors and facilitate the development of medical devices by using human remains.

“She was committing fraud, yes, but her motivations for her fraud remained pure,” Petrey said, reiterating her client’s reportedly modest lifestyle. Not all victims viewed Hess as a predator, the attorney also said, citing questionnaire responses.

Petrey accused the government of using the “shock factor being embraced by the media because the case involves dead bodies,” however, she said, Hess only sent the bodies she stole to research companies, medical schools, and the like. “She did not sell them for use in Satanic rituals or witchcraft. She did not dump them in mass unmarked graves to avoid disposing of them properly,” Petrey wrote, going on to apparently make an oblique reference to a Penrose natural burial funeral home that made headlines last year: “She did not allow them to rot, stacked up in her funeral home, totally devoid of any purpose whatsoever. She did not sell them for exorbitant amounts of money.”

Sunset Mesa victims have for years contended Hess made a profit off the fraud. Some of the decedents’ bodies were sold to plastination firms. One family told the Daily Press of finding their loved one’s remains shown for sale online. Others in civil court hearings detailed horrific nightmares and anxiety.

Petrey in her filing said Hess committed a crime, pleaded guilty and received the maximum sentence that exceeded the guideline range. “She is not asking to be released from prison … she is only asking for a reasonable sentence based on the totality of the circumstances, considering the 10th Circuit’s recent opinion,” Petrey said.

Koch does not dispute the financial loss calculations, but argues the large number of vulnerable victims enhancement does not apply. Defense attorney Martha Eskesen said the USAO previously agreed the enhancement did not apply to Koch, but is now seeking it, which Eskesen also said was an attempt to take another bite at the apple after not arguing for the enhancement during the original sentencing hearing. Eskesen also pushed against the U.S. Probation Office recommendation for an upward variance, which she said is a significant departure from original stipulations between the parties.

The 10th Circuit ruling makes clear that the lower U.S. District Court miscalculated the guideline range for Koch and the probation division’s recommendation for 180 months is more than is needed to achieve the purpose of sentencing, Eskesen said.

Koch has followed all prison rules and intends to present information about her medical condition when resentencing takes place. The 63 months sought is “a profound loss of liberty for a 71-year-old defendant,” Eskesen wrote.

The USAO said, however, that it is seeking 78 months, which is not an upward variance, but rather, is just the top of the applicable guideline range for Koch’s offense level. That is not a departure from the original plea agreement, the Dec. 16 federal response said. Further, the Court of Appeals specifically directed the U.S. District Court to make detailed findings related to the number of vulnerable victims, with respect to both Koch and Hess. That ruling affords the lower court full discretion to make those findings and allows the USAO to present supporting evidence, prosecutors said.