Defendant-Appellant Charles Huggins (“Huggins”) was convicted on May 14, 2015, after a two-week jury trial in the United States District Court for the Southern District of New York (Sidney H. Stein, Judge) for wire fraud and conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1343 and 1349. The district court sentenced him to 120 months in prison, entered an order of forfeiture in the amount of $2.4 million, and ordered restitution in the amount of $2.4 million.
On appeal, Huggins argues that his conviction was improper because the indictment lacked specificity and failed to inform him of the nature and cause of the accusations against him in violation of the Fifth and Sixth Amendments of the United States Constitution. Huggins also argues that the district court incorrectly applied sentencing enhancements based on a loss figure of $8.1 million, gross receipts from a financial institution in excess of $1 million, and abuse of a position of trust. In addition, he brings an ineffective assistance of counsel claim.
In a summary order published contemporaneously with this opinion, we affirm the district court’s judgments on the indictment and sentencing enhancement for a loss figure of $8.1 million, and decline to resolve Huggins’s ineffective assistance of counsel claim at this time. For the reasons set forth below, we conclude that the district court erred in applying the two sentencing enhancements for receiving gross receipts in excess of $1 million from a financial institution pursuant to U.S.S.G. § 2Bl.l(b)(16)(A) and for abuse of a position of trust pursuant to U.S.S.G. § 3B1.3.
BACKGROUND
In the early 2000s, Huggins ran sham oil companies—he promised investors he would use their money to make a profit in West African oil, but in fact simply pocketed the money. (See Trial Tr. 352)
On May 14, 2015, after a two-week jury trial, Huggins was found guilty on both counts. At sentencing, the district court found Huggins’s base offense level to be 7. (Sentencing Tr. 24, DE 358) The government recommended that all of the relevant sentencing enhancements be applied to Huggins. The district court applied these enhancements to calculate the Guidelines range,
The district court determined that the range “is greater than necessary to meet the ends of the criminal justice system” and considered Huggins’s age of sixty-nine years old at the time of sentencing. (Id. at 33) Accordingly, it sentenced Huggins to 120 months on each count to run concurrently. (Id. at 27, 33)
JURISDICTION
The district court had original jurisdiction over this case under 18 U.S.C. § 3231. We have appellate jurisdiction under 28 U.S.C. § 1291. Both parties agree that our Court has jurisdiction over this appeal.
DISCUSSION
I. Financial Institution Enhancement
We review the district court’s application of the enhancement under U.S.S.G. § 2B1.1(b)(16)(A) de novo. See, e.g., United States v. Conca,
Our analysis begins with the text of the enhancement. United States v. Young,
Our precedents focus on whether the financial institution suffers some type of loss or liability in providing the requisite funds. Indeed, no case in this Circuit has applied this enhancement where a financial institution did not suffer some type of loss or liability. See, e.g., United States v.
Focusing on whether the financial institution suffers a loss or incurs liability comes from the enhancement’s requirement that the gross receipts be “derived ... from” a financial institution “as a result of the offense”, i.e., that the financial institution must suffer a loss or liability, (emphasis added)
Here, Huggins derived the funds for his fraudulent companies from individual investors, not Bank of America. The bank did not incur a meaningful loss or liability when Huggins withdrew money from his companies’ accounts because investors had deposited this money in his companies’ accounts. Applying the enhancement to all cases where a defendant merely withdraws money from his own bank account at a financial institution cuts too broadly and is inconsistent with the primary purpose of the enhancement, i.e., to penalize an indi
Accordingly, we conclude that Huggins did not derive more than $1,000,000 in gross receipts from a financial institution as a result of his offense within the meaning of § 2Bl.l(b)(16)(A).
II. Abuse of Private Trust Enhancement
Whether Huggins occupied and abused a position of private trust is a legal question that we review de novo. United States v. Jolly,
U.S.S.G. § 3B1.3 applies a two-level sentencing enhancement “[i]f the defendant 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[.]” The Guidelines Commentary explains that:
“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. For this adjustment to apply, the position of public or private trust must have contributed in some significant way to facilitating the commission or concealment of the offense (e.g., by making the detection of the offense or the defendant’s responsibility for the offense more difficult).
U.S.S.G. § 3B1.3 cmt. n.3. Under United States v. Thorn, this abuse of trust enhancement involves a two-prong analysis: (1) whether the defendant occupied a position of trust from the victim’s perspective and (2) whether that abuse of trust “significantly facilitated the commission or concealment of the offense.”
We have repeatedly held that a “position of trust” is held by one who was accorded discretion by the victim and abused a position of fiduciary or quasi-fiduciary status. “Whether a position is one of ‘trust’ within the meaning of § 3B1.3 is to be viewed from the perspective of the offense victims[.]” United States v. Wright,
The government does not direct us to any evidence that Huggins held a fiduciary-like relationship with his victims. Unlike other cases where the defendant served as a financial adviser or had discretionary authority for the victim’s financial portfolio, Huggins was merely a salesman for an investment scheme. See United States v. Rivernider,
Our holding in Jolly is precisely on point. In that case, the defendant was president of a company formed to sell computer hardware and software. He raised loans .from investors and sent false statements to them, but the company existed only on paper and the money was used to pay for the defendant’s personal expenses. Jolly,
This case is distinguished from Hirsch, where the defendant “developed ‘personal relationships with his clients wherein they relied on and trusted him,’” supporting the conclusion that the defendant occupied a position of trust.
If the enhancement were to apply here, the enhancement would apply in virtually all fraud cases where a fraud victim relies on a defendant’s false statements. Jolly,
CONCLUSION
The financial institution and abuse of trust sentencing enhancements under U.S.S.G. §§ 2Bl.l(b)(16)(A) and 3B1.3 were. intended as additional penalties for particularly reckless behavior. They should not be read so broadly as to apply to every instance in which a fraud offense is committed, Nor should prosecutors recommend the maximum possible sentencing enhancements without reference to the defendant’s particular conduct. In particular, prosecutors should acknowledge in their briefs when no caselaw supports their position, as in the financial institution enhancement, or where considerable caselaw weighs against it, as in the abuse of trust enhancement. For the reasons stated above, we hold that the sentencing court erred in applying the sentencing enhancements under U.S.S.G. §§ 2Bl.1(b)(16)(A) and 3B1.3 in a manner that was plainly inconsistent with our precedents. We VACATE the district court’s sentence and REMAND to the district court for resentencing. Huggins’s judgment of conviction and the district court’s application of other sentencing enhancements, as discussed in the summary order filed contemporaneously with this opinion, however, are AFFIRMED.
Notes
. "Trial Tr.” can be found at the trial court docket entry ("DE") numbers 283-301. The pagination refers to the original numbering found on the top right hand of the page.
. All references to the Guidelines refer to the 2014 version, as those are the provisions governing Huggins’s May 2015 sentence.
. The government argued at oral argument that “plain error” review should apply because, although Huggins objected to the financial institution enhancement before the district court, he did not raise a specific rationale for the objection. The government did not cite legal authority for this proposition, and, indeed, our precedent is to the contrary. United States v. Sprei,
Rule 51 of the Federal Rules of Criminal Procedure governs objections made to sentencing orders. ... In interpreting Rule 51, we have emphasized that "[a]n objection is adequate which fairly alerts the court and opposing counsel to the nature of the claim." United States v. Rodriguez-Gonzalez,899 F.2d 177 , 180 (2d Cir. 1990). Our precedents demonstrate that to communicate the "nature” of a claim, a party doesnot have to present precise or detailed legal arguments. See, e.g., United States v. Shumard, 120 F.3d 339 , 340 n.1 (2d Cir. 1997) (finding that the government’s request that the district court "consider” a two-level adjustment for defrauding more than one victim was sufficient to preserve argument on appeal that the district court had erred in calculating the number of victims without regard for "relevant conduct” in addition to the actual offense of conviction)[.] (second alteration in original).
Given the facts of this case, the objection adequately conveyed the nature of the issue.
. Both parties agree that Bank of America falls within the definition of a "financial institution.” Indeed, the definition is broadly defined to capture virtually all regulated entities and could be applied in a wide range of cases:
[A]ny institution described in 18 U.S.C. § 20; § 656, § 657, § 1005, § 1006, § 1007, or § 1014; any state or' foreign bank, trust company, credit union,' insur-anee company, investment company, mutual fund, savings (building and loan) association, union or employee pension fund; any health, medical, or hospital insurance association; brokers and dealers registered, or required to be registered, with the Securities and Exchange Commission; futures commodity merchants and commodity pool operators registered, or required to be registered, with the Commodity Futures Trading Commission; and any similar entity, whether or not insured by the federal government. ‘Union or employee pension fund’ and ‘any ’health, medical, or hospital insurance association,’ primarily include large pension funds that serve many persons (e.g., pension funds of large national and international organizations, unions, and corporations doing substantial interstate business), and associations that undertake to provide pension, disability, or other benefits (e.g., medical or hospitalization insurance) to large numbers of persons. U.S.S.G. § 2B1.1 app. n.l.
. Prior to 2001, .U.S.S.G. § 2F1.1(b)(8)(B) provided a four-level enhancement if the offense “affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense.”
. The only other circuit to consider how to determine whether funds are derived from a financial institution concluded that the enhancement applies when a financial institution "was the source of the $1 million in gross receipts." United States v. Stinson,
The Supreme Court considered a.related situation in Shaw, where it concluded that a defendant “defraud[s] a financial institution” under 18 U.S.C. § 1344(1) by stealing money in which a bank has property rights, even if the bank ultimately does not suffer a monetary loss. Id. at 466-67,
. At oral argument, the government requested the court to review the district court's application of this enhancement for clear error. However, Huggins is not arguing that the district court applied the enhancement based on erroneous facts, but that the facts are legally insufficient to constitute a position of private trust. (See Huggins Br. at 34-36) Thus, we apply de novo review.