FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

FEB 27, 2009

THOMAS K. KAHN

CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 08-10916

________________________

D. C. Docket No. 07-00162-CR-ORL-19-KRS

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

JACQUELIN LOUIS,

Defendant-Appellant.

________________________

Appeal from the United States District Court

for the Middle District of Florida

_________________________

(February 27, 2009)

Before BARKETT, PRYOR and FARRIS, Circuit Judges.

*

PRYOR, Circuit Judge:

Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by *

designation.
This appeal presents a question of first impression in this circuit: whether a

federally licensed firearms dealer who sells a firearm to a convicted felon is subject

to a sentence enhancement for abusing a position of public trust. United States

Sentencing Guidelines § 3B1.3 (Nov. 2008). Jacquelin Louis appeals the two-level

enhancement of his sentence for abusing a position of public trust when he sold

firearms to straw purchasers for convicted felons. The district court erroneously

applied the enhancement on the ground that firearms dealers occupy positions of

public trust as “the first line of defense in preventing criminals from accessing

dangerous weapons.” Because we conclude that firearms dealers are closely

regulated and do not exercise the substantial discretion necessary for a position of

public trust, we hold that those licensees are not subject to the abuse-of-trust

enhancement. We affirm Louis’s conviction, vacate his sentence, and remand for

resentencing.

I. BACKGROUND

In 2004, Jacquelin Louis obtained a federal firearms license. Louis operated

a dealership, Southeast Atlantic Services, Inc., in Orlando, Florida. After a routine

meeting with Louis in June 2006 to assess his compliance with federal regulations

that restrict the sale of firearms to purchasers who are not convicted felons and

who state on a required form that they are the actual purchasers of the firearm, 18

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U.S.C. § 922(d)(1); 27 C.F.R. § 478.124, the Bureau of Alcohol, Tobacco and

Firearms commenced an investigation.

In October 2006, the Bureau arranged for a paid informant who was also a

convicted felon, Stanley Domino, to attempt to purchase a firearm from Louis.

Louis and Domino met at a used car lot, and Domino selected a firearm from the

trunk of Louis’s car. Domino told Louis that he was a convicted felon. Louis

asked if someone else could complete the required form on Domino’s behalf, and

Domino stated that he would locate someone. Domino paid Louis, and Louis gave

Domino a receipt. A few days later, Domino returned with an undercover agent,

Anna-Kim Hedden, who completed the required form on Domino’s behalf, and

Louis gave Domino the firearm.

In November 2006, the Bureau arranged for a second paid informant who

was also a convicted felon, Michael Cleary, to attempt to purchase a firearm from

Louis. Like Domino, Cleary selected a firearm and told Louis that he could not

complete the required form because he was a convicted felon. Cleary was

accompanied by an undercover agent, Matt Wilson, and Louis asked whether

Wilson could complete the form. Cleary responded affirmatively, and Wilson

completed the form. Wilson left blank the question that asked whether he was the

actual purchaser of the firearm and told Louis that he was not the actual purchaser.

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Louis instructed him to answer the question affirmatively. Louis gave Cleary the

firearm.

In December 2006, Louis and Domino met again at the used car lot.

Domino and an officer from the Brevard County Sheriff’s Office, Brian Guildford,

had asked Louis to order five firearms for Domino in early November, and Louis

had received the firearms. Domino was accompanied at the December meeting by

Hedden. Louis asked Domino whether the firearms should be placed in

Guildford’s name or Hedden’s name.

During the transaction, agent Scott Perala approached Louis and informed

him of the criminal investigation into his sales. Perala advised Louis of his rights

to remain silent and to an attorney. Louis stated that he knew that Domino was a

convicted felon when he sold the firearm and that he did not sell a firearm to

Cleary, but to Wilson.

Louis was indicted for two counts of selling a firearm to a convicted felon.

18 U.S.C. §§ 922(d)(1), 924(a)(2). The December transaction was not charged in

the indictment. At the close of the evidence at trial, Louis requested a jury

instruction about entrapment. The district court denied Louis’s request on the

ground Louis failed to present sufficient evidence that the government had induced

him to commit a crime. The jury convicted Louis of both counts of the indictment.

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The presentence investigation report listed Louis’s base offense level at 14,

U.S.S.G. § 2K2.1(a)(6)(B), and increased Louis’s offense level by two points

because Louis had agreed to sell Domino five additional firearms, id. §

2K2.1(b)(1)(A), and by another two points because Louis had abused a position of

trust as a federally licensed firearms dealer, id. § 3B1.3. At the sentencing hearing,

Louis objected to both enhancements. Louis objected to the use of the December

transaction to enhance his sentence because the “charge was never brought to the

jury, was never charged.” Louis objected to the application of the abuse-of-trust

enhancement and argued that a license did not signify any special skill or public

trust. Louis also argued that the license was easy to obtain, and that if possessing it

subjected the holder to this enhancement, then speeding tickets would subject

licensed drivers to the enhancement.

The district court overruled both objections. The district court found as

follows that a firearms dealer occupies a position of public trust:

[T]he public trust, in part, is that the person who is duly licensed and

empowered by the government to sell weapons will not sell them in a

manner, because they are dangerous instrumentalities, that they will

cause or are likely to cause further harm in society, because they’re

put in the hands of people who have already shown that they cannot

comply with the rules and laws of society.

The district court sentenced Louis to twenty-seven months of imprisonment and

two years of supervised release.

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Louis appealed the denial of his request for a jury instruction on entrapment,

the use of the uncharged transaction to enhance his sentence, and the application of

the abuse-of-trust enhancement. Louis requested release pending appeal, and the

district court made further findings about the enhancements when it denied that

request. The district court stated that it was required to consider “the intended sale

of five additional firearms” because that transaction “was part of the same course

of conduct or common scheme or plan as the offenses of conviction.” The district

court stated that Louis was subject to the abuse-of-trust enhancement because he

“breached” his duty to the public as “the first line of defense in preventing

criminals from accessing dangerous weapons” when he “enable[d] a straw

purchase for two convicted felons.”

II. STANDARDS OF REVIEW

“We review a district court’s refusal to give a requested jury instruction for

abuse of discretion.” United States v. Fulford, 267 F.3d 1241, 1245 (11th Cir.

2001) (internal quotation marks omitted). We review de novo the application of

the sentencing guidelines and findings of fact for clear error. United States v.

Baker, 432 F.3d 1189, 1253 (11th Cir. 2005). We “review de novo the district

court’s determination that the facts justify an abuse-of-trust enhancement.” United

States v. Britt, 388 F.3d 1369, 1371 (11th Cir. 2004), vacated on other grounds,

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546 U.S. 930, 126 S. Ct. 411 (2005), reinstated in part, 437 F.3d 1103 (11th Cir.

2006).

III. DISCUSSION

Our discussion is divided in three parts. We first discuss the jury

instruction, we next discuss the enhancement of Louis’s sentence on the basis of

the uncharged transaction, and we then discuss the enhancement of Louis’s

sentence for abuse of public trust. Because our precedents resolve the first two

issues against Louis, our primary focus is on the enhancement for abuse of trust.

We reject Louis’s argument that the district court abused its discretion when

it declined to instruct the jury about entrapment. Entrapment is an affirmative

defense and requires a defendant to prove that, but for the “persuasion or mild

coercion” of the government, he would not have committed the crime. United

States v. Ventura, 936 F.2d 1228, 1233 (11th Cir. 1991) (internal quotation marks

omitted). Louis did not prove that the government persuaded or coerced him to

sell firearms to convicted felons. To the contrary, Louis has admitted that he

counseled the paid informants to find straw purchasers and advised an undercover

agent to provide false information to assist one of the informants with his purchase.

We also reject Louis’s argument that the district court erred when it

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enhanced Louis’s sentence on the basis of criminal conduct not charged in the

indictment or proved to the jury. We have interpreted United States v. Booker, 543

U.S. 220, 125 S. Ct. 738 (2005), to permit, under an advisory guidelines system,

the enhancement of a defendant’s sentence on the basis of facts not presented at

trial. United States v. Smith, 480 F.3d 1277, 1281 (11th Cir. 2007). “[T]he district

court’s factual findings for purposes of sentencing may be based on, among other

things, evidence heard during trial, undisputed statements in the [presentence

investigation report], or evidence presented during the sentencing hearing.” Id.

(quoting United States v. Polar, 369 F.3d 1248, 1255 (11th Cir. 2004)). The

district court did not err when it enhanced Louis’s sentence under the advisory

guidelines, U.S.S.G. § 2K2.1(b)(1)(A), because Louis planned to sell five

additional firearms to Domino.

As to the main question, we agree with Louis that the district court erred

when it applied the abuse-of-trust enhancement to Louis’s sentence. A defendant

is subject to a two-level enhancement of his sentence if he “abused a position of

public or private trust, or used a special skill, in a manner that significantly

facilitated the commission or concealment of the offense.” U.S.S.G. § 3B1.3.

“The determination of whether a defendant occupied a position of trust is

extremely fact sensitive.” Britt, 388 F.3d at 1372.

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The guidelines define “positions of public or private trust” narrowly based

on the professional discretion, if any, of the defendant:

“Public or private trust” refers to a position of public or private trust

characterized by professional or managerial discretion (i.e., substantial

discretionary judgment that is ordinarily given considerable

deference). Persons holding such positions ordinarily are subject to

significantly less supervision than employees whose responsibilities

are primarily non-discretionary in nature.

U.S.S.G. § 3B1.3 cmt. n.1. The guidelines illustrate the importance of discretion

by stating that the enhancement would apply to a bank executive’s fraudulent loan

scheme, but not embezzlement by an ordinary bank teller, because the teller does

not exercise the discretion described in the comment. Id.

We have not addressed whether a firearms dealer occupies a position of

public trust or even whether any federal licensee occupies such a position, but our

precedents provide some guidance. We have upheld the enhancement for a state

legislator who embezzled money from a charity he administered with “no

oversight,” United States v. Walker, 490 F.3d 1282, 1300–01 (11th Cir. 2007); a

doctor who committed Medicare fraud, United States v. Liss, 265 F.3d 1220,

1229–30 (11th Cir. 2001); an accountant employed by the Red Cross who illegally

diverted federal funds intended to benefit needy individuals facing eviction from

their homes, United States v. Harness, 180 F.3d 1232, 1236–37 (11th Cir. 1999);

law enforcement officers who misused their patrol cars or abused their access to

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private information, United States v. Terry, 60 F.3d 1541, 1545 (11th Cir. 1995),

United States v. Pederson, 3 F.3d 1468, 1469–72 (11th Cir. 1993); a clerk of the

Social Security Administration who processed applications for Social Security

cards and “was so loosely supervised that she was able, over a period spanning

more than four years,” to commit fraud without detection, Britt, 388 F.3d at 1372;

a deputy county registrar who processed voter registrations and fraudulently

registered voters for absentee ballots, United States v. Smith, 231 F.3d 800,

819–20 (11th Cir. 2000); a grand juror entrusted to hear and weigh evidence

impartially who revealed confidential information to the target of an investigation,

United States v. Brenson, 104 F.3d 1267, 1287–88 (11th Cir. 1997); union officials

who participated in a bribe to influence the operation of employee benefit plans,

United States v. Kummer, 89 F.3d 1536, 1546–47 (11th Cir. 1996); and a post

office clerk who was not closely supervised and embezzled postal funds, United

States v. Milligan, 958 F.2d 345, 345–47 (11th Cir. 1992). We have ruled that a

doctor who abused his prescription privileges to distribute controlled substances

was ineligible for a downward departure because his sentence had been enhanced

for abuse of a position of trust. United States v. Hoffer, 129 F.3d 1196, 1204–06

(11th Cir. 1997). We have reversed the enhancement of the sentence of a childcare

center director who misused federal grants for two nonprofit programs but did not

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have a fiduciary relationship with the agency that awarded the grants, United States

v. Williams, 527 F.3d 1235, 1249–50 (11th Cir. 2008); an attorney who

participated in a conspiracy to launder money from persons who were not his

clients, United States v. Morris, 286 F.3d 1291, 1295–1300 (11th Cir. 2002); a

closely-supervised security guard who stole money from the armored vehicle he

was hired to protect, United States v. Ward, 222 F.3d 909, 911–13 (11th Cir.

2000); a home healthcare provider who committed Medicare fraud despite an

intermediary’s review and approval of her requests for reimbursement, United

States v. Garrison, 133 F.3d 831, 837–43 (11th Cir. 1998); the officers of a

healthcare provider who committed Medicare fraud but did not owe trust directly

to the government, United States v. Mills, 138 F.3d 928, 941 (11th Cir. 1998); an

employee of a county housing authority who committed tax evasion, United States

v. Barakat, 130 F.3d 1448, 1454–56 (11th Cir. 1997); and a prison employee who

smuggled drugs into the prison where he worked as a food service foreman, United

States v. Long, 122 F.3d 1360, 1365–66 (11th Cir. 1997).

These precedents are consistent with the commentary to the guidelines.

Fiduciaries and employees of a public or private agency who exercise considerable

discretion are subject to the enhancement. Lower-level, closely supervised

employees who exercise little discretion are not. The enhancement also requires

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that the offender occupy a position of trust in relation to the victim, not another

party.

The only reported decision of a sister circuit that considers the application of

the enhancement to a firearms dealer comes from the Seventh Circuit. United

States v. Podhorn, 549 F.3d 552, 560–61 (7th Cir. 2008). Podhorn was convicted

of making false statements, 18 U.S.C. § 1001(a)(2), selling stolen firearms, id. §

922(j), selling firearms without maintaining proper records, id. § 922(b)(5), and

failing to maintain proper firearm records, id. § 922(m). 549 F.3d at 555. The jury

returned a special verdict finding that Podhorn violated section 3B1.3, and the

presentence investigation report applied the enhancement. Id. at 560–61.

Podhorn did not argue that a federally licensed firearms dealer does not

occupy a position of public trust; Podhorn instead argued that the jury instructions

“referred disjunctively to a position of trust or a special skill, and it was impossible

to tell from the jury’s special verdict which of these two possible findings the jury

made.” Id. at 561. The court concluded that the indictment charged Podhorn with

abusing a position of trust and that “there [was] no reason to suppose that the jury

based its special verdict on the special skill component.” Id. The court stated that

“the § 3B1.3 enhancement was properly applied.” Id.

In a separate opinion, Judge Ripple concurred with the application of the

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enhancement because Podhorn did not argue that he did not occupy a position of

public trust, id. at 562, but Judge Ripple disagreed with a general rule that an

abuse-of-trust enhancement “may be applied on the ground that the defendant was

the holder of a federal firearms license.” Id. at 561. Judge Ripple stated that “no

court has held that a[ federal firearms license] itself creates a position of trust,” id.

at 564, and opined that a license creates no such position because the “perfunctory”

licensing qualifications, id. at 563 n.2, and strict recordkeeping and reporting

requirements, id. at 564, make it “difficult to determine from [the] face [of the

license] how [it] bestows on its holder the type of substantial discretion and

responsibility necessary to apply [the enhancement].” Id. The license requires the

licensee to comply with all sales and firearms requirements of federal, state, and

local law, 18 U.S.C. §§ 923(d)(1)(F)(ii)(II), (e); to maintain records and report the

disposition of firearms, id. §§ 923(g)(1)(A), (3)(A); to submit to periodic

warrantless inspection, id. §§ 923(g)(1)(B), (C); to give prompt notice of theft to

local authorities, id. § 923(g)(6); and to post his license at his business, id. §

923(h). Podhorn, 549 F.3d at 564. A licensee also is prohibited from transacting

in a motor or towed vehicle, 18 U.S.C. § 923(j). Podhorn, 549 F.3d at 564.

One circuit has applied the enhancement to another kind of licensee, United

States v. Gonzalez-Alvarez, 277 F.3d 73, 81–82 (1st Cir. 2002); and another circuit

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has applied the enhancement to a mine operator, which is subject to close

regulation as a condition of doing business, United States v. Turner, 102 F.3d

1350, 1360 (4th Cir. 1996). The First Circuit applied the enhancement to a

federally licensed dairy farmer who participated in a conspiracy to adulterate milk,

18 U.S.C. § 371, and caused the delivery of adulterated milk into interstate

commerce, 21 U.S.C. § 331(a), 18 U.S.C. § 2. Gonzalez-Alvarez, 277 F.3d at 76,

81–82. The district court had not applied the enhancement, but the court of appeals

concluded that the enhancement was appropriate because “[t]he public was entitled

to have dairy farmers . . . provide milk to processing plants compliant with all . . .

regulations.” Id. at 81–82. The First Circuit did not mention whether the dairy

farmer exercised substantial professional discretion. The Fourth Circuit applied

the enhancement to mine operators who falsely certified that miners had received

safety training required by federal law. Turner, 102 F.3d at 1352, 1360. The court

held that the mine operators “regularly exercised managerial discretion at the

mine,” and that “society had to publicly trust the [operators] to follow the mine

safety laws during operation of the . . . mine.” Id. at 1360.

These decisions of our sister circuits offer sparse guidance. In the light of

the fact-sensitive nature of our inquiry, decisions about dairy farmers and mine

operators do not provide authority for a rule about firearms dealers. Even Podhorn

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offers little guidance because Podhorn did not raise the issue whether the

enhancement may be applied to a firearms dealer, and the majority opinion did not

discuss that issue.

We are persuaded by Judge Ripple’s separate opinion that a federal firearms

licensee does not occupy a “position of public trust” based on the three factors

mentioned in section 3B1.3: professional judgment, discretion, and deference. The

federal government does not review or warrant the “professional judgment” of a

prospective licensee; to receive a license, an applicant must merely submit an

application to the Bureau, supply fingerprints and a photograph, pay a fee, and pass

a background check. 18 U.S.C. § 923. If the application meets the statutory

requirements, the Bureau has no discretion to deny a license. Id. § 923(d)(1). A

licensed dealer also exercises no discretion about how to comply with federal

requirements about sales of firearms. The government requires the dealer to take

certain steps before completing a transaction, keep certain records of transactions,

and transact only in certain places and with certain people. Dealers may not sell

firearms outside any of these limitations. Dealers are also afforded little, if any,

“professional deference.” U.S.S.G. § 3B1.3 cmt. n.1. Although dealers, as private

business owners, do not have an immediate supervisor who oversees their work on

a daily basis, dealers exercise no professional judgment about their compliance

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with federal law. Firearms dealers instead must submit to periodic, indeed

surprise, inspections and investigations by the Bureau and other law enforcement

of their transactions and business practices. 18 U.S.C. § 923(g)(1)(B)(ii).

The district court used an erroneous legal standard when it applied the

enhancement. The district court did not engage in any analysis about the discretion

exercised by firearms dealers. The district court instead summarily concluded that

the public “trusted” Louis “to be the first line of defense in preventing criminals

from accessing dangerous weapons.”

The government argues that Louis received substantial deference and was

not supervised, but the record and governing regulations do not support this

argument. The Bureau observed Louis committing the crimes of which he is

convicted during an investigation that followed a periodic inspection; were it not

for this close regulation and supervision, Louis’s crime would likely have gone

undetected. We cannot say that Louis occupied a position “characterized by . . .

substantial discretionary judgment that is ordinarily given considerable deference.”

U.S.S.G. § 3B1.3 cmt. n.1. The district court erred when it enhanced Louis’s

sentence for abusing a position of trust.

IV. CONCLUSION

Louis’s conviction and the enhancement of his sentence on the basis of his

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intent to sell Domino five additional firearms, id. § 2K2.1(b)(1)(A), are

AFFIRMED. Because the district court erred when it enhanced Louis’s sentence

for abusing a position of public trust, id. § 3B1.3, Louis’s sentence is VACATED

and this case is REMANDED for resentencing.

AFFIRMED IN PART, VACATED AND REMANDED IN PART.

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