Opinion ID: 195935
Heading Depth: 3
Heading Rank: 1

Heading: Abuse of Private Trust

Text: 56 Newman argues that the district court erred in enhancing his sentence under U.S.S.G. Sec. 3B1.3 for abuse of a position of private trust. 9 The district court found that the insurance industry is heavily regulated and that persons in control of insurance companies occupy a position of trust which obligates them to act in the interests of their policyholders and employees. The district court found that, by diverting RPLIC's funds for his own use, Newman abused this position of trust. Newman argues, however, that the enhancement does not apply since he never legally occupied a position of trust. Newman argues that he technically never obtained legal control of RPLIC, having failed to obtain approval of the purchase from the DBR as required under Rhode Island law. At most, Newman argues, the evidence suggests that he committed an ordinary fraud. Never having occupied the position legally, Newman argues, he cannot be subject to the enhancement. 10 57 While Newman may never have legally occupied the position, he indisputably had de facto control over the company and thus in fact occupied a position of trust. The application note to the sentencing guidelines in effect at the time of sentencing provides that: [t]he position of trust must have contributed in some substantial way to facilitating the crime and not merely have provided an opportunity that could as easily have been afforded to other persons. U.S.S.G. Sec. 3B1.3 comment. (n. 1) (1991). Newman's position and his effective discretionary control over the company enabled him to transfer the funds for his own use. This is exactly the type of behavior that the enhancement was aimed at. It would be perverse to allow the lack of formal, legal control, for which Newman was responsible by failing to file the appropriate forms, to insulate him from the consequences of his breach of trust. Cf. United States v. Innamorati, 996 F.2d 456, 489-90 (1st Cir.), (former state registry police officer subject to enhancement where prior position of trust facilitated his crime), cert. denied, --- U.S. ----, 114 S.Ct. 409, 126 L.Ed.2d 356 (1993). 58 Newman also argues that the enhancement cannot apply to him since his acquisition of the position of trust was itself a part of the crime. Drawing an analogy to cases dealing with enhancements under Sec. 3B1.3 for abuse of special skills, see United States v. Young, 932 F.2d 1510, 1513-14 (D.C.Cir.1991), he argues that the enhancement applies only to the abuse of a preexisting position of trust, and therefore cannot apply to him. However, even assuming arguendo that this theory has validity, Newman misconstrues the crimes of which he was convicted. He was not convicted of the fraudulent acquisition of an insurance company. Rather, he was convicted of wire fraud and interstate transport of stolen property, crimes which were substantially facilitated by his prior acquisition of control over the insurance company. His abuse of the position was precisely the behavior targeted by the enhancement. We find no error in the application of this sentence enhancement.