[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
FEB 27, 2009
No. 08-10916 THOMAS K. KAHN
________________________ CLERK
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
15
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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