Opinion ID: 177322
Heading Depth: 2
Heading Rank: 3

Heading: Abuse of Trust Sentencing Enhancement

Text: Johnson’s final contention is that the district court erred by imposing a twolevel upward adjustment because Johnson “abused a position of . . . private trust.” U.S.S.G. § 3B1.3. The district court concluded that “there’s no question in this case with this scheme that there was a position of trust that [Johnson was] involved [in] with this victim.” -5- The abuse of trust enhancement is “characterized by professional or managerial discretion” and applies if the defendant purports to “legitimately hold[] a position of . . . trust when, in fact, the defendant does not.” U.S.S.G. § 3B1.3, cmt. n.1, 3. We have explained that “[b]y the test’s plain text, the element of discretion . . . is the ‘decisive factor’ in the enhancement.” United States v. Contreras, 581 F.3d 1163, 1166 (9th Cir. 2009) (citation omitted), adopted in relevant part and vacated in part on other grounds, United States v. Contreras, 593 F.3d 1135, 1136 (9th Cir. 2010) (en banc) (per curiam). Notably, the Sentencing Commission uses “a defendant who . . . perpetrates a financial fraud by leading an investor to believe the defendant is a legitimate investment broker” as an example of when the enhancement applies. Id. § 3B1.3, cmt. n. 3. The record is replete with evidence establishing that Johnson committed his fraud by claiming to exercise “professional or managerial discretion” over the victim’s funds. Johnson persuaded the victim (Britt) that he was an experienced bond trader. Britt entered an agreement with Johnson under which “the deposited funds shall be in an account controlled by [Johnson] and may be transferred, withdrawn, hypothecated, liened or encumbered in any manner at the discretion of [Johnson] and approval of [Britt].” (Emphasis added.) Although Britt nominally had final approval authority over Johnson’s transactions, Johnson retained ultimate -6- discretion to invest the funds in the account. Pursuant to this agreement, Britt transferred $5.75 million into an account controlled by Johnson. Britt testified that he “did not consider” himself to “ha[ve] authority” over the account. Britt represented to a third party that the account was “at the discretion of Mr. Johnson.” Johnson himself noted in an email to Britt that Britt had trusted Johnson with Britt’s money. In light of this evidence, it is clear that Johnson committed the fraud by purporting to exercise investment discretion over the victim’s funds. See United States v. Davuluri, 239 F.3d 902, 909 (7th Cir. 2001) (holding that abuse of trust enhancement applied where defendant had discretion to engage in commodities transactions on victim’s behalf without victim’s supervision). The district court properly applied the abuse of trust enhancement. AFFIRMED. -7-