[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 14-14045

Non-Argument Calendar

________________________

D.C. Docket No. 2:13-cr-14039-JEM-1

UNITED STATES OF AMERICA, 

 Plaintiff-Appellee,

 versus

PAUL ELVIDGE, 

a.k.a. Paul Elvidge, Jr.,

 Defendant-Appellant.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(August 6, 2015)

Before MARTIN, JILL PRYOR, and ANDERSON, Circuit Judges.

PER CURIAM: 

Case: 14-14045 Date Filed: 08/06/2015 Page: 1 of 6 
2

Paul Elvidge appeals his 87-month sentence imposed following convictions 

for wire fraud and aggravated identity theft. The district court imposed a fourlevel increase to Mr. Elvidge’s offense level under U.S.S.G. § 2B1.1(b)(19)(A)

because he was a registered broker and his offense conduct violated securities law. 

Because this enhancement was imposed in error, we vacate the sentence and 

remand for resentencing.1

I.

Mr. Elvidge was a registered stock broker who managed and operated a 

brokerage and investment firm in Port St. Lucie, Florida. From 2010 to 2012, he 

fraudulently authorized wire transfers from client bank accounts to his own bank 

account, stealing more than $1 million. A grand jury indicted him for 36 counts of 

wire fraud in violation of 18 U.S.C. § 1343 and six counts of aggravated identity 

theft in violation of 18 U.S.C. § 1028A. Mr. Elvidge pled guilty to eight counts of 

wire fraud and one count of identity theft.

The probation office prepared a presentence report (“PSR”) in advance of 

Mr. Elvidge’s sentencing hearing. The PSR grouped the wire fraud counts and 

applied a base offense level of seven pursuant to U.S.S.G. § 2B1.1(a)(1). The PSR 

then increased the offense level: by 16 levels because the loss was between $1 

 1 We therefore need not address Mr. Elvidge’s arguments that his sentence was both 

procedurally and substantively unreasonable. See United States v. Gupta, 572 F.3d 878, 882 

(11th Cir. 2009). 

Case: 14-14045 Date Filed: 08/06/2015 Page: 2 of 6 
3

million and $2.5 million, id. § 2B1.1(b)(1)(I); by two levels because the offense 

involved between 10 and 50 victims, id. § 2B1.1(b)(2)(A)(i); and by four levels 

because the offense involved a violation of securities law and Mr. Elvidge was a 

registered broker. Id. § 2B1.1(b)(19)(A). This brought the adjusted offense level 

to 29. After a three-point reduction for acceptance of responsibility pursuant to 

U.S.S.G. § 3E1.1(a), Mr. Elvidge’s total offense level was 26. Mr. Elvidge had a 

criminal history of category I. According to the PSR, the advisory guideline range 

was 63 to 78 months’ imprisonment as to the wire fraud counts.

In his sentencing memorandum, Mr. Elvidge objected to the enhancement 

under § 2B1.1(b)(19)(A), arguing that his conduct had not violated securities law.

The probation officer responded to Mr. Elvidge’s objection by stating that the 

offense “involved stealing money from his clients’ brokerage accounts, which is 

[a] securities violation.” Third Addendum to PSR. The officer also noted that the 

Financial Industry Regulatory Authority (“FINRA”) had taken action against the 

defendant because of the offense conduct.

At the sentencing hearing, Mr. Elvidge reiterated his objection to the fourlevel sentencing enhancement. The government argued that he qualified for the 

enhancement because Mr. Elvidge “obviously was accessing his clients’ money 

that he had as a broker and embezzling from those accounts and divesting that 

Case: 14-14045 Date Filed: 08/06/2015 Page: 3 of 6 
4

money for himself.” Sentencing Tr., Doc. 113 at 7. The district court agreed with 

the government and approved the enhancement.

II.

We review a district court’s findings of fact for clear error and the 

application of the Sentencing Guidelines to those facts de novo. United States v. 

Lozano, 490 F.3d 1317, 1321 (11th Cir. 2007).

III.

Under the Guidelines, a four-level increase of the base offense level is 

applied when the offense involves “a violation of securities law and, at the time of 

the offense, the defendant was . . . a registered broker or dealer, or a person 

associated with a broker or dealer.” U.S.S.G. § 2B1.1(b)(19)(A). The Guidelines 

define “securities law” as:

18 U.S.C. §§ 1348, 1350, and the provisions of law referred to in 

section 3(a)(47) of the Securities Exchange Act of 1934 . . .

includ[ing] the rules, regulations, and orders issued by the Securities 

and Exchange Commission pursuant to the provisions of law referred 

to in such section.

Id. § 2B1.1, comment. (n.15(A)). A defendant need not be convicted under 

securities law in order for the enhancement to apply. Rather, it is sufficient for a 

defendant to be convicted under a general fraud statute if the underlying conduct 

Case: 14-14045 Date Filed: 08/06/2015 Page: 4 of 6 
5

violated securities law, as defined by the guidelines. Id. § 2B1.1, comment. 

(n.15(B)).

Because Mr. Elvidge objected to the four-level increase, the government had 

the burden of establishing that the guideline applied by a preponderance of the 

evidence. United States v. Lawrence, 47 F.3d 1559, 1566 (11th Cir. 1995). On 

appeal, the government has conceded that it failed to carry this burden. While the 

concession is not dispositive, United States v. Lee, 586 F.3d 859, 866 (11th Cir. 

2009), we agree with both Mr. Elvidge and the government that the district court 

erred in applying § 2B1.1(19)(A).

Mr. Elvidge’s conduct amounted to a basic fraud, in which he forged client 

signatures to authorize a transfer of money from their accounts to his. The 

government has not shown how this conduct violated any of the specific securities 

laws enumerated in the Guidelines. Instead, the government merely argued at the 

sentencing hearing that the enhancement applied because Mr. Elvidge was 

embezzling from client brokerage accounts. But the Supreme Court has stated that 

not every breach of fiduciary duty by a broker is a federal securities law violation, 

and in so doing, it specifically used embezzlement from a client account as an 

example of fraudulent conduct that would not violate securities law. SEC v. 

Zandford, 535 U.S. 813, 825 n.4 (2002) (“If, for example, a broker embezzles cash 

from a client’s account or takes advantage of the fiduciary relationship to induce 

Case: 14-14045 Date Filed: 08/06/2015 Page: 5 of 6 
6

his client into a fraudulent real estate transaction, then the fraud would not include 

the requisite connection to a purchase or sale of securities.”). Because the 

government failed to show by a preponderance of the evidence that Mr. Elvidge’s 

conduct violated any securities law, the four-level enhancement was inappropriate.

IV.

In light of the foregoing, we vacate the sentence in its entirety and remand 

for resentencing.

VACATED AND REMANDED.

Case: 14-14045 Date Filed: 08/06/2015 Page: 6 of 6