Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-01430/USCOURTS-ca10-91-01430-0/pdf.json

Parties Involved:
Lee R. Hubbard
Appellant
United States of America
Appellee

Document Text:

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UNITED STATES COURT OF APPEALS -Jstii.t~}~_,()~m A.p;~f;b 

FOR THE TENTH CIRCUIT Um 'J'P.!'\1.~ -(-1 .. eul'; 

UNITED STATES OF AMERICA, ) 

) 

Plaintiff-Appellee, ) 

) 

V • ) 

) 

LEE R. HUBBARD, ) 

) 

Defendant-Appellant. ) 

AUG 041992 

ROJsEU ·L.~ ~ 

No . 91-1430 

(D.C. No. 91-CR-272) 

(D. Colorado) 

ORDER AND JUDGMENT* 

Before MOORE, .McWILLIAMS, and BARRETT, Circuit Judges. 

The only issue in this appeal is whether the district court 

erroneously enhanced defendant's sentence on the ground he abused 

a trust. Following United States v. Williams, F.2d __ , 

(10th Cir. 1992), 1992 WL 115327, we affirm. 

Mr. Hubbard was the owner of an insurance company which did 

business with three professional teams, the Los Angeles Raiders, 

the Denver Broncos, and the Denver Nuggets. The teams sent Mr. 

Hubbard payments for insurance premiums which Mr. Hubbard retained 

instead of forwarding them to the appropriate insuring entities. 

He plead guilty to various counts of wire and mail fraud. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 91-1430 Document: 010110259036 Date Filed: 08/04/1992 Page: 1
The district court applied a two level upward adjustment to 

Mr. Hubbard's sentence in accordance with Guideline§ 3Bl.3 which 

appertains "[i]f the defendant abused a position of ... private 

trust in a manner that significantly facilitated the 

commission or concealment of the offense." A "position of trust" 

is not defined by the guidelines, but the commentary to S 3Bl.3 

suggests: 

The position of trust must have contributed in some 

substantial way to facilitating the crime and not merely 

have provided an opportunity which could as easily have 

been afforded to other persons. This adjustment, for 

example, would not apply to an embezzlement by an 

ordinary bank teller. 

u.s.s.G. § 3Bl.3, Comment, n.1. Factors such as the extent to 

which the position provides the freedom to commit a surreptitious 

crime; whether an abuse could be simply or readily noticed; the 

duties of the defendant compared to those of other employees; the 

level of a defendant's specialized knowledge or authority; and the 

level of public trust have all been considered by courts in 

determining whether a defendant was in a position of trust, 

Williams, 1992 WL 115327, at *l. 

Whether a person abused a position of trust is "a 

sophisticated factual determination that will be affirmed unless 

clearly erroneous." 

commented: 

In this case, the district court 

This is a gentleman who, by virtue of the fact that he 

was entrusted with funds personally -- not on behalf of 

a bank -- for use pursuant to a trust agreement with the 

[teams] ..• instead of putting the funds into a trust 

account as would be appropriate under the circumstances 

and using them for the purpose intended . . diverted 

them for his own purposes. 

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Appellate Case: 91-1430 Document: 010110259036 Date Filed: 08/04/1992 Page: 2
The defendant argues the enhancement was erroneous, this finding 

notwithstanding. 

He contends the enhancement was inappropriate because the 

teams could have "readily noticed" his defalcations as soon as the 

insuring entities advised the teams that the premiums had not been 

received. He also argues there is no support for the district 

court's finding that a "trust agreement" existed between him and 

his clients. He also suggests his position was no greater than 

the now proverbial bank teller. 

The government points out, however, that Mr. Hubbard's 

arrangements with the teams enabled him to escape easy detection. 

For example, he arranged with the underwriter for the Raiders to 

pay their disability insurance premiums directly to him, and not 

the underwriter. A similar agreement was adopted with the Denver 

Nuggets. These arrangements gave Mr. Hubbard a three month period 

in which his scheme could escape detection. 

Defendant's dealings with the Denver Broncos resulted in his 

receiving a power of attorney from the team to deal with its 

worker's compensation matters. As a result, the State 

Compensation Insurance Authority recognized Mr. Hubbard as agent 

and attorney for the Broncos in all matters before the agency. 

Because of this arrangement, the Broncos had no way of knowing 

their worker's compensation insurance premiums had been misapplied 

because the delinquency notices were sent to Mr. Hubbard and not 

the Broncos. 

These circumstances provide an ample basis for the imposition 

of the enhancement without consideration of whether a "trust 

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Appellate Case: 91-1430 Document: 010110259036 Date Filed: 08/04/1992 Page: 3
agreement" legally existed between defendant and his clients. We 

cannot, therefore, conclude the district court's findings were 

clearly erroneous. Moreover, even though a formal indenture may 

not have been executed by the parties, the aura of confidence and 

dependence attendant to the actual arrangements they made provided 

the district court with grounds upon which to conclude a "trust" 

had been established within the context of§ 3Bl.3. 

AFFIRMED. 

Entered for the Court 

John P. Moore 

Circuit Judge 

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