United States v. Miller, Jeffrey J. , 188 F. App'x 502 ( 2006 )

UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued July 11, 2006
Decided July 18, 2006
Before
Hon. WILLIAM J. BAUER, Circuit Judge
Hon. RICHARD A. POSNER, Circuit Judge
Hon. MICHAEL S. KANNE, Circuit Judge
No. 05-4390
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff-Appellee, Court for the Western District of Wisconsin.
v. No. 05-CR-091-C-01
JEFFREY J. MILLER, Barbara B. Crabb,
Defendant-Appellant. Chief Judge.
ORDER
Jeffrey Miller pleaded guilty to mail fraud, 18 U.S.C. § 1341. In calculating
his sentence, the district court applied the two-level enhancement for abuse of a
position of trust. Miller challenges this enhancement, arguing that it was
precluded because the base offense level and offense characteristics already
addressed his abuse of a position of trust. We disagree and affirm the district
court’s sentence.
In 2005 Miller pleaded guilty to using the United States Postal Service to
defraud clients of his investment firm, One Vision Financial (“OVF”). Miller’s
scheme was simple: from 2000 to 2004 he persuaded OVF’s clients to invest
substantial amounts of money in the firm’s investment network or the investment
portfolios it administered. But instead of investing the clients’ funds in either,
Miller converted them to his own personal use or used them to pay OVF’s operating
expenses. He then mailed his clients worthless promissory notes that recorded the
No. 05-4390 Page 2
amount the client “invested” with OVF and promised an imaginary annual return.
In all, Miller defrauded more than 40 clients of approximately $3.5 million.
The probation officer prepared a presentence investigation report in which
she calculated the base offense level for Miller’s conviction at 7 because the
maximum imprisonment term was 20 years. See U.S.S.G. § 2B1.1(a)(1). The
probation officer also recommended that the offense level be increased by 18 levels
because the loss amount was between $2.5 million and $7 million, U.S.S.G.
§ 2B1.1(b)(1)(J); two levels because the offense involved ten or more victims, id.
§ 2B1.1(b)(2)(A); and two more levels because Miller abused a position of trust, id.
§ 3B1.3. This placed Miller’s base offense level at 24, which, when combined with a
criminal history category of I, placed Miller’s recommended guidelines range
between 87 and 108 months.
Miller objected to the presentence investigation report, arguing that the
recommended increase for abuse of a position of trust ran afoul of § 3B1.3. That
provision provides for a two-level increase when a “defendant abused a position of
public or private trust . . . in a manner that significantly facilitated in the
concealment of the offense.” U.S.S.G. § 3B1.3. However, § 3B1.3 also states that
“[t]his adjustment may not be employed if an abuse of trust . . . is included in the
base offense level or specific offense characteristic.” Id. Seizing on this exception,
Miller argued that abuse of a position of trust is included in the base offense level
for mail fraud, thus precluding the two-level increase.
At the sentencing hearing, the district court rejected Miller’s objections and
accepted the recommended two-level increase for abuse of a position of trust. The
court stated that Miller exploited his position as a financial advisor to convince his
victims to give him their money “in reliance of [his] representations or because [he]
promised that [he] wold invest their money in [his] business.” The court then
adopted the recommended guidelines range of 87 to 108 months, sentenced Miller to
87 months’ imprisonment, and ordered him to pay assessments and restitution.
On appeal, Miller renews his argument that the district court erred by
applying the two-level increase under § 3B1.3. He asserts that, because the
charging document detailed the manner in which he abused his position as a
financial advisor to defraud his clients, his abuse of a position of trust was already
accounted for in the base offense level and specific characteristics of mail fraud. In
essence, he argues that courts must refer to the charging documents to ascertain
the base offense level and specific offense characteristics. But this position is
irreconcilable with the language of the Sentencing Guidelines: § 3B1.3 directs
courts to refer only to “the base offense level or specific offense characteristic.” See
U.S.S.G. § 3B1.3. That provision contains no instruction to refer to charging
documents, see id., and Miller points us to no authority that states otherwise.
No. 05-4390 Page 3
With that said, Miller’s base offense level does not account for an abuse of a
position of trust. Because Miller was convicted under 18 U.S.C. § 1341, his base
offense level is determined by § 2B1.1. See U.S.S.G. app. A. This guideline
addresses “basic forms of property offenses” involving numerous kinds of fraud,
including mail fraud. See U.S.S.G. § 2B1.1 introductory cmt. Miller’s counsel
conceded at oral argument that mail fraud does not require an abuse of a position of
trust. See United States v. Baldwin, 414 F.3d 791, 799 (7th Cir. 2005) (“It is true
that all frauds involve deceit, but they may or may not involve the abuse of a
position of trust.”). This concession comports with our recognition that the two-level
increase accounts for behavior separate from the predicate offense of fraud; that is,
how the defendant exploited his relationship with his victims to perpetrate the
fraud. See United States v. Arnaout, 431 F.3d 994, 1000 (7th Cir. 2005); see also
United States v. Bracciale, 374 F.3d 998, 1006-07 (11th Cir. 2004) (explaining how
commentary to § 3B1.3 “draws a distinction between those who should receive the
enhancement and those who should not without regard to the elements of the
underlying fraud offense”). And since Miller concedes that he abused his clients’
trust in him as their financial advisor when committing mail fraud, the two-level
enhancement was not precluded by the base offense level. See Baldwin, 414 F.3d at
799; see also Bracciale, 374 F.3d at 1005-06.
Likewise, Miller’s specific offense characteristics do not account for his abuse
of a position of trust. The district court increased Miller’s base offense level by 18
levels because the victims’ loss was between $2.5 million and $7 million, and added
an additional two levels because Miller’s offense involved ten or more victims. But
both of these determinations do not reflect Miller’s abuse of his position as a
financial advisor because they do not account for how Miller exploited his
relationship with his victims to defraud them. See U.S.S.G. § 3B1.3 cmt. n.1 (“For
this adjustment to apply, the position of . . . private trust must have contributed in
some significant way to facilitating the commission or concealment of the
offense . . . .”); Bracciale, 374 F.3d at 1006-07 (stating that the applicability of two-
level enhancement depends only on the relationship the defendant had with his
victims). These determinations rather address the extent and severity of his fraud,
facts unrelated to Miller’s abuse of his victims’ trust. See Bracciale, 374 F.3d at
1006-07.
AFFIRMED.