09-1611 U.S. v. Fuchs

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Sentencing
Position of trust enhancement

Where a mortgage broker only defrauded lenders, not borrowers, the sentencing court should not have enhanced the sentence under U.S.S.G. 3B1.3 for abusing a position of trust.

“During the sentencing proceeding, the government did not establish that the lenders in this case had a relationship of trust with Fuchs in particular. That is, the government introduced no evidence explaining the nature of the relationship between Fuchs or his employers and the victim lenders. In fact, the government did not even disclose the actual written agreements the lenders had with these brokers. What the evidence does tell us is that the victim lenders sometimes verified Fuchs’s work but more often than not they didn’t. On this record, an inference that the lenders operated this way based on their trust in Fuchs is no stronger than the inference that they simply failed to do their own due diligence. All we can do is speculate because aside from the general evidence of the industry of which Fuchs was a part—in which there is a statutory agency relationship between Fuchs and the borrowers, 205 ILL. COMP. STAT. 635/5-7—there is nothing pointing to a special relationship of trust outside of the ordinary arm’s-length, commercial relationship between him and the lenders.”

Vacated and Remanded.

09-1611 U.S. v. Fuchs

Appeal from the United States District Court for the Northern District of Illinois, Kapala, J., Sykes, J.

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