U.S. v. Pedersen

• Decision Date: 07 October 1993
• Docket Number: No. 92-2724,92-2724
• Citation: 3 F.3d 1468
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William Lawrence PEDERSEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1468

3 F.3d 1468

UNITED STATES of America, Plaintiff-Appellee, v. William Lawrence PEDERSEN, Defendant-Appellant.

No. 92-2724.

United States Court of Appeals, Eleventh Circuit.

Oct. 7, 1993.

Jeffrey B. Steinback; Genson, Steinback, Gillespie & Martin, Chicago, IL, for defendant-appellant.

Julie Tingwall, Tamra Phipps, David Rhodes, Asst. U.S. Attys., Tampa, FL, for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before EDMONDSON and BLACK, Circuit Judges, and MELTON ^*, Senior District Judge.

MELTON, Senior District Judge:

William Lawrence Pedersen (Pedersen) appeals his sentence, challenging the district court's application of the United States Sentencing Guidelines. ¹ Pedersen asserts that the court erred in enhancing his base offense level for insider trading, U.S.S.G. Sec. 2F1.2, by two levels pursuant to U.S.S.G. Sec. 3B1.3, upon finding that he abused a position of special trust. For the reasons that follow, we affirm Pedersen's sentence.

I. BACKGROUND

Pedersen was a police detective employed by the City of Chicago Police Department. He also operated a business called Professional Investigations in Chicago, Illinois. At the request of Nationwide Electronic Tracking, Inc. (NET), Pedersen unlawfully accessed, and recruited others to unlawfully access, confidential information stored in various government computer data bases.

Pedersen or his agents illegally searched and disclosed to NET the contents of hundreds of confidential government records. By virtue of his position as a police officer, Pedersen had personal access to, and could easily request others to access, the National Crime Information Center (NCIC) data base maintained by the Federal Bureau of Investigation (FBI). Pedersen also solicited the assistance of persons who gained access to Social Security Administration computer records. ²

NET was in the business of selling personal background information to employers, investigators, insurance companies, and others. The confidential criminal history, employment, and tax information provided by Pedersen was not legally available to NET or to its clients without obtaining permission of the individual whose records were to be searched or without incurring significant expense and inconvenience in searching a multitude of public records on a state by state basis. NET paid Pedersen for each search which provided information regarding a designated individual.

Pedersen was charged in two indictments with ten counts, including charges of conspiring to commit crimes against the United States, unauthorized disclosure of social security information, fraud by wire, and theft of public records or government property. The two cases were consolidated and Pedersen pled guilty to all ten counts. The United States Probation Office determined, without objection, that the base offense guideline for insider trading, U.S.S.G. Sec. 2F1.2, was the most analogous in the absence of a Sentencing Guideline provision for Pedersen's offense conduct. After several enhancements, including a two-level enhancement for abuse of a position of special trust, pursuant to Secs. 2F1.2 comment (n. 1) and 3B1.3, the district court sentenced Pedersen to fifteen months imprisonment to be followed by two years supervised release. ³

II. DISCUSSION

In this appeal, Pedersen challenges the district court's assessment of a two-level enhancement of his base offense level for abuse of a position of special trust. He contends that such enhancement constitutes impermissible double counting because abuse of a position of trust or use of a special skill is included in the base offense level for insider trading and because he did not occupy and abuse a position of special trust. ⁴

Section 3B1.3 requires a two-level increase of the base offense level "[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 guideline further provides that "[t]his adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic."

Section 2F1.2 establishes the base offense level for insider trading, and its commentary ⁵ prescribes that:

Section 3B1.3 (Abuse of Position of Trust or Use of Special Skill) should be applied only if the defendant occupied and abused a position of special trust. Examples might include a corporate president or an attorney who misused information regarding a planned but unannounced takeover attempt. It typically would not apply to an ordinary "tippee."

U.S.S.G. Sec. 2F1.2, comment (n. 1) (1991).

The district court found that the commentary to Sec. 2F1.2 contemplates that certain insiders may occupy positions of special trust such that an enhancement for abuse of a position of trust under Sec. 3B1.3 would be warranted. In other words, the court found that Sec. 3B1.3 could be applied in some instances to enhance the base offense level for insider trading where the defendant occupied a position of special trust, as opposed to a position of trust.

Evaluating Pedersen's conduct in light of its interpretation of the Sentencing Guidelines, the district court stated:

a police officer is invested by force of the special position that he occupies in our society, the special need for the services of honorable and trustworthy police, the mischief that is available potentially in injuring innocent citizens, even if the extent and even the identity of those injuries is not always readily ascertainable, and certainly by force of the oath that is solemnly sworn by a police officer to act in accordance with the law, and I find there to be in that instance, particularly involving access to information which can be potentially abused or converted, as it were, for special profit or gain in a corrupt manner, that not only is there a public trust but a special public trust sufficient to warrant the application of 3B1.3, notwithstanding the element of trust that is in fact implicit in the laws governing insider trading in the public securities markets.

The commentary to Sec. 2F1.2 unequivocally states that an enhancement for abuse of a position of trust pursuant to Sec. 3B1.3 may be assessed when the court finds that the defendant violated a position of special trust. The commentary is not inconsistent with the admonition in Sec. 3B1.3 that the adjustment for abuse of position of trust "may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic" because enhancement of the base offense level for insider trading is permitted only in circumstances where a position of special trust is violated. ⁶

The district court found that Pedersen occupied and abused a position of special trust. Accordingly, the court increased his base offense level by two levels pursuant to Sec. 3B1.3. Pedersen's sentence should be affirmed unless the district court misinterpreted or misapplied the commentary language in concluding that Pedersen occupied a position of special trust on the facts of this case. ⁷

Pedersen maintains that the determination of whether he occupied a position of special trust should have been based solely upon his position or rank within the police department. He asserts that because he was an ordinary police officer, with the same access as other police officers to the information he sold, and because he held no supervisory position, he could not be deemed to occupy a position of special trust subject to the Sec. 3B1.3 enhancement, under a fair analogy to the examples provided in the commentary to Sec. 2F1.2.

The Sentencing Commission provides little guidance as to when a position of special trust exists which would subject a defendant to the Sec. 3B1.3 enhancement. Only one...