Opinion ID: 668225
Heading Depth: 2
Heading Rank: 2

Heading: The Sec. 2B1.2(b)(4)(A) Four-Point Enhancement

Text: 19 Former section 2B1.2(b)(4)(A) of the sentencing guidelines provided for a four-point offense level enhancement when the offense was committed by a person in the business of receiving and selling stolen property. U.S.S.G. Sec. 2B1.2(b)(4)(A). 8 The district court determined that King had engaged in three transactions with the group of stolen bonds and accordingly increased King's base offense level by four points under that section. (See App. at N.T. 16.) King contends that the district court erred when it characterized his surrender of 76 bonds to the FBI on the day of sentencing as one of the transactions upon which it based its conclusion that King was in the business of receiving and selling stolen property. (Appellant's Br. at 5.) 9 Consequently, he argues that the four-point enhancement must be vacated because the district court could not properly have concluded that he was engaged in the business of receiving and selling stolen property. (Id.) 20 We have never before addressed Sec. 2B1.2(b)(4)(A). The guidelines themselves are silent on the meaning of the pivotal phrase--in the business of. A few courts outside our circuit have, however, offered some elucidation of the provision's in the business language. The Seventh Circuit has held that the section does not apply to thieves who sell property that they have personally stolen. United States v. Braslawsky, 913 F.2d 466, 468-69 (7th Cir.1990). In United States v. Esquivel, 919 F.2d 957 (5th Cir.1990), the Fifth Circuit held that a finding that a defendant has previously engaged in fencing activities is not a prerequisite for offense level enhancement under former sentencing guideline section 2B1.2(b)(3)(A) [the predecessor to Sec. 2B1.2(b)(4)(A) ]. Id. at 961. Finally, in United States v. St. Cyr, 977 F.2d 698 (1st Cir.1992), the First Circuit undertook a thorough analysis of Sec. 2B1.2(b)(4)(A) and concluded that: 21 [I]n mulling whether to impose the [in the business] enhancement, the sentencing judge must undertake a case-by-case approach, weighing the totality of the circumstances, with particular emphasis on the regularity and sophistication of a defendant's operation, in order to determine whether a defendant is in the business of receiving and selling stolen property. 22 Id. at 703. 23 In this instance, the district court's decision to enhance King's sentence under Sec. 2B1.2(b)(4)(A) was predicated in large part upon the holding in Esquivel, supra, that an in the business enhancement under that section does not require a finding that a defendant has previously engaged in fencing activities. (See App. at N.T. 16.) That principle may indeed be sound. See St. Cyr, 977 F.2d at 702-03 (declining, like the court in Esquivel, to limit the application of Sec. 2B1.2(b)(4)(A) to so-called professional fences). The facts presented in Esquivel, however, differ markedly from those present in King's case. Therefore, although the underlying factual findings upon which the district court based its conclusion that King was in the business of receiving and selling stolen property were not clearly erroneous, those facts did not warrant such a conclusion. 10 24 In Esquivel, the defendant stored 350 cases of stolen athletic shoes in a warehouse which he leased and controlled. Esquivel, 919 F.2d at 959. He sold the stolen shoes on consignment for $15 per pair, keeping $5 per pair for himself and paying the remainder to one of the persons who had stolen the shoes and supplied them to him. Id. He was assisted in the resale of the stolen shoes by a delivery man whom he would contact by pager and provide with information regarding the customer, date, and quantity for purposes of making deliveries. Id. In upholding the sentencing judge's determination that the defendant's fencing activities amounted to a business, the Fifth Circuit noted that: 25 Esquivel in substance acted as the manager of an organized commercial enterprise engaged in making multiple sales from a stock of stolen merchandise, employing an electronic communications system to place orders with his assistant and allocating income in accordance with a consignment plan.... [Moreover,] [t]he shoes were sold out of a central storage location and were distributed to multiple customers. 26 Id. at 960. 27 Here, by contrast, all of King's transactions involved a single purchaser. Moreover, his sale of the stolen bonds involved nowhere near the level of sophistication present in Esquivel's fencing operation--unlike Esquivel, he never utilized a central storage location, never employed an electronic communications system to place orders with an assistant, and never allocated income according to a consignment plan. Furthermore, King's sales of stolen property were not even remotely as repetitive as Esquivel's--at most, he successfully completed two sales and broached the possibility of one future sale. 28 In St. Cyr, supra, the First Circuit contrasted what it termed Esquivel's elaborate fencing operation with the activities of the defendant in that case who had twice successfully and once unsuccessfully tried to return small quantities of stolen sweaters to a retailer for cash refunds. St. Cyr, 977 F.2d at 700, 704. There, the court held that the government had simply not produced a quantum of evidence sufficient to show, by any reasonable standard, that [defendant] was engaged in a business and that his casual trafficking in sweaters [was] insufficient ... to justify an enhancement under U.S.S.G. Sec. 2B1.2(b)(4)(A). Id. at 704 (footnote omitted). The same analysis holds true in King's case. There was simply not enough evidence to justify the district court's conclusion that King was engaged in the business of receiving and selling stolen property. 29 Indeed, as the court in St. Cyr noted, regularity of conduct is one universal thread in virtually all legal definitions of business. St. Cyr, 977 F.2d at 703-04 (citing cases where, in various contexts, courts have insisted that more than isolated, casual, or sporadic activity be shown before a business is found to exist) (footnote omitted). One example noted in St. Cyr involved U.S.S.G. Sec. 2T1.4 which governs persons convicted of aiding, assisting, procuring, counseling, or advising tax fraud. Currently, Sec. 2T1.4(b)(1)(B) mandates a two-point offense level enhancement for defendants in the business of preparing or assisting in the preparation of tax returns. The commentary to Sec. 2T1.4 states that this enhancement applies to persons who regularly prepare or assist in the preparation of tax returns for profit. U.S.S.G. Sec. 2T1.4, comment. (n. 2). 11 30 The background note in the commentary to former Sec. 2B1.2 explains that the enhancement for persons who receive stolen property for resale is justified because the amount of property is likely to underrepresent the scope of their criminality and the extent to which they encourage or facilitate other crimes. U.S.S.G. Sec. 2B1.2, comment. (backg'd.). In King's case, however, there was no evidence upon which to base a conclusion that King's irregular and occasional sales underrepresented the scope of his criminality or the extent to which he encouraged or facilitated other crimes. He made two sales from a single lot of stolen bonds and mentioned the possibility of a third sale--all to the same purchaser. His sales were not repetitive, nor was there an indication of a pattern of selling anything other than this one lot of bonds. The quantum of evidence before the district court at the sentencing hearing--two or three isolated incidents of selling stolen bonds from a single lot--did not warrant a conclusion that King was in the business of receiving and selling stolen property. 12 31 In view of the foregoing analysis, we conclude that the enhancement under Sec. 2B1.2(b)(4)(A) for being in the business of receiving and selling stolen property constituted legal error. Accordingly, King's sentence must be recalculated without it.