United States v. Fuchs, 2011 U.S. App. LEXIS 5298

Fuchs brokered subprime mortgages by submitting falsified loan applications and documents; he used aliases and doctored incomes, employers, and credit reports to mislead lenders.
Lenders relied on broker information often without verification, enabling ongoing fraudulent loans.
Fuchs was convicted of mail and wire fraud after trial; the district court sentenced within a range but then imposed 144 months.
The government sought a two-point § 3B1.3 abuse-of-trust enhancement based on Fuchs’s role as a broker.
The district court accepted the enhancement, but on appeal the Seventh Circuit vacated and remanded for resentencing without § 3B1.3.
The court did not decide whether the borrowers’ relationship could support § 3B1.3, noting the government had waived that ground

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 3B1.3 applies to a mortgage broker’s relationship with lenders	Fuchs argues no special trust exists with lenders	Government contends lenders relied on broker’s information, creating trust	§ 3B1.3 not warranted for lenders; vacate and remand for resentencing

United States v. Mabrook, 301 F.3d 503 (7th Cir.2002) (fiduciary duties can support § 3B1.3 when applicable)
United States v. Bhagavan, 116 F.3d 189 (7th Cir.1997) (fiduciary relationship supports § 3B1.3)
United States v. Castellano, 349 F.3d 483 (7th Cir.2003) (relationship can evolve from arm's-length to trust)
United States v. Pappert, 112 F.3d 1073 (10th Cir.1997) (trust relationship can justify § 3B1.3)
United States v. Day, 524 F.3d 1361 (D.C.Cir.2008) (fiduciary relationship basis for § 3B1.3)
United States v. Snook, 366 F.3d 439 (7th Cir.2004) (upheld § 3B1.3 where fiduciary-like duties existed)
United States v. Vivit, 214 F.3d 908 (7th Cir.2000) (§ 3B1.3 applied to provider with discretion over treatment)
United States v. Dorsey, 27 F.3d 285 (7th Cir.1994) (rejects § 3B1.3 where no reliance evidence beyond ordinary relationship)
United States v. Kosth, 943 F.2d 798 (7th Cir.1991) (limits on 3B1.3 where no insider trust)
United States v. Andrews, 484 F.3d 476 (7th Cir.2007) (case-specific inquiry; job title not controlling)
United States v. Wright, 496 F.3d 371 (5th Cir.2007) (mortgage broker reliance structure not per se trust)
United States v. Septon, 557 F.3d 934 (8th Cir.2009) (mortgage-broker defendants; reliance argument)
Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (U.S. 2008) (premiums of reliance in fraud)
Hayes, 574 F.3d 460 (8th Cir.2009) (trust-based reasoning in 3B1.3)