U.S. v. Dorsey, 93-3148

• Decision Date: 17 June 1994
• Docket Number: No. 93-3148,93-3148
• Citation: 27 F.3d 285
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert DORSEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 285

27 F.3d 285

UNITED STATES of America, Plaintiff-Appellee, v. Robert DORSEY, Defendant-Appellant.

No. 93-3148.

United States Court of Appeals Seventh Circuit.

Argued March 30, 1994.

Decided June 17, 1994.

Thomas Edward Leggans (argued), Office of U.S. Atty., Crim. Div., Fairview Heights, IL, for plaintiff-appellee.

Renee E. Schooley, Federal Public Defender, Andrea L. Smith, East St. Louis, IL, for defendant-appellant.

Before BAUER, FLAUM, and RIPPLE, Circuit Judges.

BAUER, Circuit Judge.

Car dealer Robert Dorsey was convicted of nine counts of bank fraud in violation of 18 U.S.C. Sec. 1344 and one count of arson in violation of 18 U.S.C. Sec. 844(i). The district court sentenced Dorsey to a prison term of 28 months. The court also ordered him to pay, in $100 monthly installments, $109,477.62 as restitution to one of his victims, the First National Bank of Highland in Highland, Illinois. Dorsey appeals.

I.

All of this started in 1986, when Robert Dorsey opened Bob's Highland Chrysler in Highland, Illinois. Dorsey purchased cars directly from Chrysler, then re-sold the cars to the consuming public. To purchase the cars from Chrysler, Dorsey obtained a "floor-plan" loan from the First National Bank of Highland. Dorsey ordered cars from a Chrysler plant in Dearborn, Michigan, and First National paid Chrysler for the cars on Dorsey's behalf. Chrysler then sent invoices and certificates of origin for the cars to First National, which First National held as security for the loan. Dorsey sold the cars and held the proceeds of the sales in trust for First National. Dorsey then would pay First National for a particular car and First National would give Dorsey the certificate of origin for that car. Once Dorsey obtained a car's certificate of origin, he could apply for the car's title on behalf of its purchaser.

About once a month, First National would conduct surprise "floor plan checks." First National employees would visit the dealership and check the cars that were supposed to be on the lot against the certificates of origin held by First National. Each certificate of origin listed the vehicle identification number for each car.

In the Spring of 1989, First National discovered that Dorsey had sold cars that First National thought were unsold. First National also learned that Dorsey had ordered duplicate certificates of origin from Chrysler. Eventually, First National held nine certificates of origin to cars for which it had never been paid. Dorsey sold those nine cars, but lied to First National employees about that fact during the floor plan checks; he never paid First National. Further, on at least three occasions, Dorsey tried to circumvent First National by ordering duplicate certificates of origin from Chrysler. Dorsey also failed to apply properly for the titles to the nine cars and did not give the titles to the buyers.

Dorsey renegotiated the terms of his ongoing relationship with First National numerous times. It was no use. He continued to have business and financial problems. Dorsey tried to solve these problems by selling his personal property, and he even gave First National a second mortgage on his home.

Not surprisingly, the relationship between Dorsey and First National soured as First National officials became concerned about their missing collateral. First National's fears increased when Chrysler mistakenly sent First National one of the duplicate certificates of origin which Dorsey ordered. Eventually, in 1990, First National stopped negotiating with Dorsey and decided to take another approach--civil litigation. First National sued Dorsey.

In March of 1989, the Illinois Secretary of State began an investigation into Dorsey's dealership. On June 27, 1990, Illinois Secretary of State Investigator John Herndon wrote Dorsey a letter which explained that Herndon planned to review all of Dorsey's dealership records. A week later, on July 4, 1990, a fire engulfed Bob's Highland Chrysler. After a valiant effort, Highland firemen eventually extinguished the blaze.

Larry Gilbert, a detective in Highland's "cause and origin" team, was assigned to the case. The "cause and origin" team is a squad of local police and fire officials that investigates fires. Gilbert and other squad members investigated the scene. They discovered that an electric iron had been connected to a timer, plugged into an electrical outlet, and placed over a pile of papers and files that concerned Bob's Highland Chrysler. The files and iron also were doused with an accelerant. Gilbert suspected that Dorsey had torched his business and instructed his officers to watch Dorsey closely when he arrived at the scene.

Dorsey did not disappoint. When he arrived, Dorsey looked immediately to where the iron had been located. Later, squad members received Dorsey's written consent to enter the business and continue their investigation.

On July 10, 1990, Dan Connington, an investigator for the insurance company that insured the burned building, contacted Gilbert. Dorsey agreed to allow Connington to search the building on the condition that Highland police officers accompany him. Additionally, Connington provided another consent to search form, which Dorsey signed. Gilbert then assigned Highland police officer Scott Manville to accompany Connington to the burned building.

Connington and Manville went to the burned building and looked around. They noticed that some gas cans were still in the building and told Gilbert about them. Gilbert returned and removed the gas cans.

On July 19, 1990, William Pierce, Highland's Director of Public Safety, went to Bob's Highland Chrysler to inspect the burned building. When Pierce arrived, he saw that a gas can was sitting in the middle of the floor. Pierce assumed that his officers had been careless and returned to the Highland police headquarters to question Gilbert. Gilbert assured Pierce that he and other officers had removed all the gas cans from the burned building.

Pierce and Gilbert returned to Bob's Highland Chrysler to investigate further. When they arrived, Gilbert stepped through an open door, saw the gas can and additional burn damage, and realized that there had been a second fire. Gilbert also saw an auto dealer "police book" lying on top of a desk and smelling of accelerant. (The police book is a book which car dealers maintain to record purchaser information about the cars they sell.)

The cover of the police book was charred, but its pages were intact. Gilbert noticed the police book because he knew that the Federal Bureau of Investigation and the Illinois Secretary of State were investigating Dorsey for fraud related to his automobile sales. Gilbert also knew that Herndon had requested the book and that Dorsey had failed to produce it.

Gilbert decided to act. He seized all of the records in the building. Later that day, Gilbert spoke with Dorsey. Dorsey explained that the only people who had permission to be in the building were Highland police officers and insurance investigators.

Dorsey was indicted and convicted.

II.

Dorsey raises several issues on appeal. We discuss three of them.

A. Abuse of Position of Trust

The district court enhanced Dorsey's sentence two levels pursuant to U.S.S.G. Sec. 3B1.3 because it concluded that Dorsey abused a position of trust. Section 3B1.3 directs the district court to increase a criminal defendant's sentence by two levels "[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." U.S.S.G. Sec. 3B1.3. Section 3B1.3 requires the court to determine (1) whether a defendant occupies a position of trust; and, if so, (2) whether the defendant abused that position in a manner that significantly facilitated the commission or concealment of the offense. United States v. Boyle, 10 F.3d 485, 488 (7th Cir.1993); United States v. Lamb, 6 F.3d 415, 421 (7th Cir.1993).

The interpretation of the term "position of trust" is a legal question that we review de novo. Boyle, 10 F.3d at 489. Whether a particular defendant, like Dorsey, occupied such a position is a question of fact that we review under the clearly erroneous standard. Id.

Dorsey contends that his position vis a vis First National was not a position of trust. Instead, Dorsey argues that his was nothing more than a standard commercial relationship with First National to finance the purchase of cars for resale by his car dealership.

As a general matter, a position of trust is characterized by "access or authority over valuable things." Boyle, 10 F.3d at 489; Lamb, 6 F.3d at 421. Of course, access or authority alone is not sufficient. A bank teller, for example, has access or authority over valuable things-money-but the abuse of a position of trust "would not apply to an embezzlement by an ordinary bank teller." U.S.S.G. Sec. 3B1.3, comment. (n. 1).

The district court found that the agreement between Dorsey and First National was a "standard commercial agreement." The court concluded that, although it was a close question, the agreement set up a "form of a trust" which Dorsey abused.

The caselaw in this area is instructive. In United States v. Kosth, 943 F.2d 798, 800 (7th Cir.1991), the defendant operated a credit bureau and sold credit reporting equipment. Id. He obtained an account with a bank which entitled him to process his company's credit card transactions through the bank. The defendant used fraudulent and altered credit cards to receive payment from the bank for phantom purchases of merchandise. Id. We reversed the district court's enhancement for abuse of a position of trust because the defendant in Kosth was involved in a standard commercial relationship. Id. We noted that the defendant's arrangement with the bank was the same as that of any other merchant; there was no special element of private trust involved. The defendant in Kosth was "an...