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United States v. Ortmeier

United States District Court, Eighth Circuit

October 30, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
TROY M. ORTMEIER, Defendant.

TENTATIVE FINDINGS

JOHN M. GERRARD, District Judge.

The Court has received the revised presentence investigation report (RPSR) in this case. The defendant has objected to the RPSR in a sentencing statement (filing 32), and has also filed a motion for variance (filing 33).

IT IS ORDERED:

1. The Court will consult and follow the Federal Sentencing Guidelines to the extent permitted and required by United States v. Booker, 543 U.S. 220 (2005), and subsequent cases. In this regard, the Court gives notice that, unless otherwise ordered, it will:
(a) give the advisory Guidelines respectful consideration within the context of each individual case and will filter the Guidelines' advice through the 18 U.S.C. § 3553(a) factors, but will not afford the Guidelines any particular or "substantial" weight;
(b) resolve all factual disputes relevant to sentencing by the greater weight of the evidence and without the aid of a jury;
(c) impose upon the United States the burden of proof on all Guidelines enhancements;
(d) impose upon the defendant the burden of proof on all Guidelines mitigators;
(e) depart from the advisory Guidelines, if appropriate, using pre- Booker departure theory; and
(f) in cases where a departure using pre- Booker departure theory is not warranted, deviate or vary from the Guidelines when there is a principled reason justifying a sentence different than that called for by application of the advisory Guidelines, again without affording the Guidelines any particular or "substantial" weight.
2. The defendant objects to the RPSR's two-level increase in the offense level for "abus[ing] a position of public or private trust... in a manner that significantly facilitated the commission or concealment of the offense." U.S.S.G. § 3B1.3. Under this Guideline, the government must prove two elements by a preponderance of the evidence in order for the abuse of trust enhancement to apply: (1) the defendant occupied a position of private trust, and (2) the defendant used this position in a manner that significantly facilitated the commission or concealment of the offense. United States v. Miell, 661 F.3d 995, 998 (8th Cir. 2011).
The facts as set forth in the RPSR, briefly summarized, are that the victim is a real estate brokerage and that the defendant managed the business pursuant to a "broker-sales associate contract" and a "real estate broker agreement." RPSR at 3. He was entitled to receive a percentage of the commissions for transactions on which he worked, and those generated annually by the business, and permitted to draw a monthly advance against payments due to him. RPSR at 3. But the defendant began to divert funds he had not earned. RPSR at 4. To cover up what he was doing, the defendant made false entries in the bookkeeping system and sent false monthly reports to the owners of the business. RPSR at 4. And aside from the monthly reports that the defendant falsified, it "does not appear there was any direct oversight of his activities on behalf of the business." RPSR at 9.
The defendant does not (at least in his sentencing statement) seem to be disputing the facts as stated in the RPSR. Rather, he seems to be arguing about the legal significance of those facts. His argument is twofold. First, the defendant contends that his relationship with the business was "standard and contained no provisions entrusting [him] with responsibilities above and beyond those that might be given to anyone else entering into such an agreement." Filing 32 at 2.
It is true that, as a matter of law, ordinary commercial relationships do not constitute a trust relationship sufficient to invoke the position of trust enhancement. United States v. Jenkins, 578 F.3d 745, 753 (8th Cir. 2009); United States v. Baker, 200 F.3d 558, 563-64 (8th Cir. 2000). But what distinguishes frauds based on commercial relationships where § 3B1.3 should apply from those where it should not is whether the defendant has broad discretion to act on behalf of the victim and the victim believes that the defendant will act in the victim's best interest. If not, then the enhancement should not be applied solely on the basis of a commercial arrangement. United States v. Davuluri, 239 F.3d 902, 909 (7th Cir. 2001). A position of private trust is ...

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