United States v. Podhorn, Paul E. ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 06-2139
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
P AUL E. P ODHORN, JR.,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Illinois.
No. 03 CR 30140—Michael J. Reagan, Judge.
A RGUED S EPTEMBER 17, 2007—D ECIDED D ECEMBER 8, 2008
Before F LAUM, R IPPLE, and W OOD , Circuit Judges.
W OOD , Circuit Judge. Permission to sell firearms is not
open to all comers; people wanting to engage in that
business must obtain a Federal Firearms License from the
Department of Treasury’s Bureau of Alcohol, Tobacco,
Firearms and Explosives. See 18 U.S.C. § 923; see generally
http://www.atf.gov/firearms/faq/faq2.htm#a1 (last visited
2 No. 06-2139
November 12, 2008). Paul Edward Podhorn had such a
license, but he misused it. A grand jury accordingly
charged him with two counts of making false statements,
in violation of 18 U.S.C. § 1001(a)(2), two counts of selling
stolen firearms, in violation of 18 U.S.C. § 922(j), 22 counts
of selling firearms without maintaining proper records, in
violation of 18 U.S.C. § 922(b)(5), and one count of failing
to maintain proper firearm records, in violation of 18
U.S.C. § 922(m). The Government dismissed one of the 22
counts of selling firearms without maintaining proper
records (count 26SS), and a jury convicted Podhorn of all
remaining charges.
On appeal, Podhorn’s central claim is that evidence
critical to his conviction should have been suppressed.
Additionally, he argues that the district court erred in its
calculations under the Sentencing Guidelines when it
imposed several sentencing enhancements, that the court
should have instructed the jury on a lesser included
offense, and that the court abused its discretion when it
allowed the prosecution to display a particularly menacing
firearm throughout the trial even though the prosecution
ended up dropping that weapon from the case.
I
Podhorn and the Government gave rather different
accounts of the facts relating to the motion to sup-
press—indeed, the district court described the two versions
as “diametrically oppose[d] . . . in many ways.” In the end,
however, the court decided that the Government’s wit-
nesses were more credible. It specifically stated that
No. 06-2139 3
“Defendant Podhorn at times was vague, nonresponsive,
argumentative, inconsistent in his answers, had selective
recollection, and was coy.” For the record, the court also
presented Podhorn’s version of the facts, based on what it
could “glean as best as possible” from his contentions. We
review the district court’s findings of historical fact under
the deferential clear error standard. United States v. Tyler,
512 F.3d 405, 409 (7th Cir. 2008); United States v. Groves, 470
F.3d 311, 317-18 (7th Cir. 2006). Because Podhorn has
offered no persuasive reason why we should reject the
district court’s findings, we accept that court’s findings for
purposes of this appeal.
After Podhorn’s business contacts complained of im-
proper dealing, Special Agent Robert Nosbisch of the
Bureau of Alcohol, Tobacco, Firearms and Explosives
(“ATF”) obtained a federal search warrant for Podhorn’s
business premises. The complaints also resulted in state
warrants for Podhorn’s arrest. While the search warrant
was being executed, ATF Investigator Lisa Storey tele-
phoned Podhorn at his brother’s house and asked if she
could come speak with him about his federal firearms
license. He agreed. Storey soon arrived with two ATF
Special Agents, Nosbisch and Jeffrey Matthews, and they
spoke with Podhorn on the front lawn for about ten
minutes. They then asked if he would accompany them to
his business premises. Once again, he agreed. After
spending ten to twenty minutes at Podhorn’s store,
Nosbisch asked Podhorn if he would go to the Jersey
County Sheriff’s Department for an interview. Yet again,
he agreed.
4 No. 06-2139
Upon Podhorn’s arrival at the Sheriff’s Department,
Jersey County officers arrested him on the state warrants
and advised him of his Miranda rights. He signed an ATF
Miranda acknowledgment and waiver form. He was then
interviewed, and during the course of the interview,
Nosbisch asked Podhorn if he was willing to consent to a
search of his car and his personal effects located at his
brother’s house and at his daughter’s house in Virginia. At
that point, rather than consenting right away, Podhorn
asked to speak with an attorney. The officers gave him
contact information for three attorneys. Podhorn spoke
with two of them by telephone; one actually came and
talked with him in person. After speaking with the third
attorney, Podhorn told the officers that he wanted to
cooperate, and he signed the search consent forms. The
statements Podhorn made to Nosbisch and the items found
in Podhorn’s place of business, his car, and among his
personal effects gave rise to the charges in the second
superseding indictment.
II
Despite the strong evidence of consent, Podhorn main-
tains on appeal that all of this evidence should have been
suppressed, and that his conviction must be reversed
because it was not. He begins by asserting that the district
court erred in admitting evidence obtained in violation of
Miranda v. Arizona, 384 U.S. 436 (1966), and Edwards v.
Arizona, 451 U.S. 477 (1981). In his view, the Miranda
warnings he received came too late, after the damage was
already done. The correct time, he asserts, would have
No. 06-2139 5
been at the start of the encounter at his brother’s house,
because from that moment on he was under de facto arrest
and was being interrogated. He also claims that, once
arrested, the search consent forms he signed were tainted
because they were obtained through further interrogation
initiated by the government after he had requested but
before he had received the advice of counsel, in violation
of Edwards.
Under Miranda, warnings are required only when a
suspect is undergoing custodial interrogation. In deciding
whether a suspect was in custody during an interrogation,
we must ascertain whether the suspect’s freedom of action
was curtailed to a degree associated with formal arrest.
United States v. Smith, 3 F.3d 1088, 1097 (7th Cir. 1993). As
the district court noted, this determination must be made
in light of the totality of the circumstances surrounding the
encounter. United States v. Jones, 21 F.3d 165, 170 (7th Cir.
1994). We look to see how “a reasonable man in the sus-
pect’s position would have understood his situation”;
relevant factors to consider include the “freedom to leave
the scene and the purpose, place and length of interroga-
tion.” Id.Applying this standard, the district court was “unable to
conclude that Podhorn was in custody during his encoun-
ter with ATF personnel until he was formally arrested as it
appears he was free to leave.” Podhorn was never told he
could not leave, nor did he ask or attempt to leave; he was
never physically restrained; no threatening gestures or
statements were made to him; the agents did not display
weapons; and Podhorn was able to walk by himself back
6 No. 06-2139
into his brother’s house to drop off his car keys before
returning to accompany Nosbisch in Nosbisch’s minivan.
Although the minivan was used for ATF purposes, it was
unmarked, had no separation between the front and back
seats, and did not otherwise resemble a police car. The fact
that Podhorn was not free to leave the car once it was in
motion (as is always true of any rider in any car driven by
any party) is not relevant because the evidence indicates
that he voluntarily agreed to ride in Nosbisch’s car. The
district court also noted the brevity of the encounter (“five
to ten minutes” at Podhorn’s brother’s house and “ten to
twenty minutes” at Podhorn’s business premises) and
Podhorn’s subjective awareness of his rights (“at the
suppression hearing, Podhorn testified that he knew he
could refuse to answer Nosbisch’s questions or requests,
and did in fact not answer some questions”).
Podhorn’s contention that the officers acted wrongfully
in seeking his consent to search after he requested an
attorney is unfounded. As noted above, when Podhorn
asked to speak with a lawyer, “Nosbisch assisted Podhorn
in contacting two private attorneys via telephone, and then
arranged for Podhorn to speak privately with a state public
defender. After speaking with the state public defender,
Podhorn consented to [the] searches” at issue.
Having found that “there was no custodial interrogation
of Podhorn prior to the time he was placed under arrest
and read his Miranda rights,” the district court, citing
United States v. Ienco, 182 F.3d 517 (7th Cir. 1999), ruled that
“subsequent statements and consents given could not have
been tainted.” We have no reason to second-guess the
No. 06-2139 7
district court’s credibility determinations, under which it
accepted Agent Nosbisch’s testimony and rejected
Podhorn’s. The court’s findings easily support its conclu-
sion that, apart from the Miranda question, Podhorn’s
statements and waivers were voluntary. The court added
that, “while in no way outcome dispositive,” its conclusion
on voluntariness was reinforced by the facts that Podhorn
“had attended law school for two years and briefly worked
in the legal field” and that the encounter had no indicia of
compulsion or government overreaching, such as violence,
threats, promises, or unduly protracted interrogation.
III
Podhorn next argues that the district court erred in
allowing Government Exhibit 37 (a firearm with a
bipod—the subject of Count 27SS) to be displayed during
the trial, because it was menacing and not probative. A
district court’s evidentiary rulings are reviewed for an
abuse of discretion. United States v. Gougis, 432 F.3d 735,
742 (7th Cir. 2005).
At the post-trial forfeiture hearing, the Government
announced its intention not to pursue forfeiture of that
weapon because documentation the Government had
received from the defense prior to trial revealed that this
gun belonged to an associate of Podhorn’s and that
Podhorn was merely storing it. This meant that it was not
subject to the reporting requirements at issue in the case.
Podhorn may well have forfeited this argument, as his
brief mentions only comments that he made during the
8 No. 06-2139
forfeiture hearing and does not show where he raised this
ground at trial. It is possible, however, that he may not
have been aware of the possible objection at trial, because
he did not know that the Government would eventually
abandon its effort to pursue charges based on that firearm.
Giving Podhorn the benefit of the doubt, we will address
the issue.
The firearm labeled Exhibit 37 was among the items
seized from the Virginia residence. As a general matter,
that evidence was relevant and its probative value was not
substantially outweighed by any unfair prejudice to the
defendant. Podhorn does not claim that, at the time of trial,
the district court was aware that this particular weapon
would be dropped from the Government’s case. Thus,
given the information available to the district court at the
time of trial, it was not an abuse of discretion to allow
Exhibit 37 to be displayed. See United States v. Clark, 989
F.2d 1490, 1499 (7th Cir. 1992) (“We determine whether the
trial court abused its discretion in refusing to grant sever-
ance by viewing the record at the time the motion was
made.”).
IV
Podhorn next claims that the district court erred in
failing to instruct the jury on the lesser included charge of
knowingly failing to keep firearms records (a misdemeanor),
where Podhorn was charged with willfully failing to keep
firearms records (a felony).
If a defendant requests an instruction on a lesser in-
cluded offense, he is entitled to the instruction if he can
No. 06-2139 9
prove that “(1) the offense on which he seeks an instruction
is a lesser-included offense of the one charged, and (2) a
rational jury could find him guilty of the lesser offense but
not guilty of the greater offense.” United States v.
McCullough, 348 F.3d 620, 624 (7th Cir. 2003). Podhorn
admits that “despite earlier discussions” of the possibility
of charging on the lesser included offense, that issue “does
not appear to have been raised at the time of the jury
instruction conference.” Podhorn has thus forfeited the
claim, which means that our review is only for plain error.
To establish plain error, Podhorn must show: (1) an error;
(2) that is plain; (3) that affected his substantial rights; and
(4) that seriously affects the fairness, integrity, or public
reputation of the judicial proceedings. United States v.
Montgomery, 390 F.3d 1013, 1017 (7th Cir. 2004).
We must first determine whether the lesser included
offense instruction should have been given. As Podhorn
points out, and as the Government concedes, McCullough
held that “knowingly” selling firearms without maintain-
ing proper records, 18 U.S.C. § 922(m), is a lesser included
offense within the offense of willfully selling firearms
without maintaining proper records in violation of 18
U.S.C. § 922(b)(5). 348 F.3d at 628.
We therefore move to the question whether, from the
evidence presented at trial, a rational jury could find that
Podhorn knowingly failed to keep firearms records, but
that this failure was not willful. The only support that
Podhorn offers for this assertion sinks his claim. He cites to
his own testimony that he “never failed to complete a Form
4473 when required to do so,” “did not fail to keep proper
10 No. 06-2139
A&D logs,” and “was not guilty of failing to keep proper
records.” He concludes that “had it been offered the
opportunity to do so, the jury could have found that any
records omissions were misdemeanors, not felonies.” Id.But, on this record, we cannot agree with him. If the jury
were to credit Podhorn’s testimony, they could not find
that he knowingly failed (but did not willfully fail) to keep
proper records. In other words, if the jury found at all that
he failed to keep records, the evidence could support only
the conclusion that he did so willfully: there was no
possibility of an inadvertent failure. This is well illustrated
by the following excerpt of the Government’s cross-exami-
nation of Podhorn:
Q. Inspector Storey did sit down with you and ex-
plained all of the rules and regulations that would
pertain to your firearms business, correct?
A. Yes.
Q. You understood when she left what you were
supposed to do with regard to an Acquisition and
Disposition book?
A. Yes.
Q. With regards to 4473’s?
A. Yes.
Q. You don’t dispute in this case at all that you knew
what records you were supposed to keep as an FFL,
correct?
A. No, I don’t dispute that.
No. 06-2139 11
Q. So you would agree with me, would you not, that if
you failed to keep an Acquisition and Disposition log
that that would have been a willful failure because you
knew what you were supposed to do?
A. I didn’t fail to keep my A&D logs.
This shows that Podhorn was challenging the basic ques-
tion whether he failed to keep the required logs, not
whether any omissions were willful. He cannot satisfy the
second step of McCullough because no rational jury could
have found him guilty of the lesser offense but not guilty
of the greater offense. There was thus no error in failing to
give the jury instruction on the lesser included offense,
much less plain error.
V
Last, Podhorn challenges two aspects of his sentence.
First, he claims that he should not have received an
enhancement under U.S. S ENTENCING G UIDELINES
§ 2K2.1(b)(4) based on the fact that some firearms were
stolen, because the offense with which he was charged, 18
U.S.C. § 922(j), already includes as an element the fact that
the firearm is stolen. Applying the enhancement, he
argues, would thus amount to double-counting. His other
sentencing argument is directed at the district court’s
decision to enhance his Guidelines level for abusing a
position of trust or using a special skill, under § 3B1.3.
We first address the stolen firearms enhancement.
Section 2K2.1(b)(4) provides that, in calculating the offense
12 No. 06-2139
level, “if any firearm (A) was stolen, increase by two
levels.” Application Note 9 qualifies that rule, however:
If the only offense to which § 2K2.1 applies is 18 U.S.C.
§ 922(i), (j), or (u), or 18 U.S.C. § 924(l) or (m) (offenses
involving a stolen firearm or stolen ammunition) and
the base offense level is determined under subsection
(a)(7), do not apply the adjustment in subsection (b)(4)
unless the offense involved a firearm with an altered or
obliterated serial number. This is because the base
offense level takes into account that the firearm or
ammunition was stolen.
U.S.S.G. § 2K2.1, app. n.9 (2004).
According to the presentence report (“PSR”), Podhorn’s
base offense level was determined under subsection (a)(7).
PSR at ¶ 32. There was no allegation or finding that
Podhorn had altered or obliterated the serial number of
any of those weapons. Thus, at least as an initial matter, the
two-level enhancement could not be imposed for Counts 3
and 4, each of which charged that Podhorn sold stolen
firearms in violation of 18 U.S.C. § 922(j).
The Government and our dissenting colleague counter
that Application Note 9 does not apply to Podhorn because
he has not shown that the enhancement applied only to his
§ 922(j) counts. The jury found that the firearms involved
in Counts 3 and 4 were stolen, as it had to do in order to
convict. PSR at ¶ 10. An examination of the jury verdict
forms reveals, as the dissent notes, that the particular
firearm involved in Count 3 was also the one identified in
Count 5, which charges failure to keep proper records in
violation of 18 U.S.C. § 922(b)(5), and the firearm at issue
No. 06-2139 13
in Count 4 was the one identified in Count 6, which also
charges a violation of § 922(b)(5). Our dissenting colleague
takes the position that the inclusion of these firearms in
Counts 5 and 6 is enough to justify the enhancement
described in § 2K2.1(b)(4). He stresses the fact that Applica-
tion Note 9 advises against the enhancement “[i]f the only
offense to which § 2K2.1 applies is . . . § 922(j).” Here, in his
view, the indictment includes two offenses involving the
stolen weapons, and the enhancement is precluded for only
one of them.
The question for us is whether Application Note 9
applies in the situation before us, where the very same
firearm supports both the § 922(j) convictions on different
counts and the § 922(b)(5) conviction. It speaks in terms of
the “offense” to which § 2K2.1 applies, not to the precise
factual basis for any given offense. We have no doubt that
the enhancement would be permissible, following the logic
of our dissenting colleague, if in a different count the
Government had relied upon a third stolen weapon as to
which Podhorn failed to keep proper records. It would also
be permissible if Counts 3 and 4 had been dropped alto-
gether. Here, however, the only weapons that were shown
to be stolen were the ones identified in Counts 3 and 4. We
are left, therefore, with a situation similar to the one
described in United States v. Jackson, 103 F.3d 561, 569 (7th
Cir. 1996), where we noted that it would be double-count-
ing to convict a defendant for use of a firearm during and
in relation to a drug crime, in violation of 18 U.S.C.
§ 924(c), and at the same time to enhance a drug sentence
under 21 U.S.C. §§ 841(a)(1) and 846 for possession of a
firearm in connection with the same drug offense, using
14 No. 06-2139
U.S.S.G. § 2D1.1(b)(1). The problem is that “the same
conduct cannot be described in two different ways to
justify two different enhancements when each leads to a
separate upward adjustment.” United States v. Schmeilski,
408 F.3d 917, 919 (7th Cir. 2005). By the same token,
“although premising multiple enhancements on ‘identical
facts’ constitutes impermissible double counting, the
presence of some overlap in the factual basis for two or
more upward adjustments does not automatically qualify
as double counting.” Id. (emphasis added) (internal citation
omitted).
The fact that the Hess Arms Model 47 rifles, serial
numbers 991068107 and 991067293, were stolen is the only
thing that makes the sales charged in Counts 3 and 4
illegal. The fact that Podhorn failed to keep proper records
of those sales is certainly independently criminal and
independently punishable, but, by analogy to Jackson, we
conclude that it would be double-counting to use the fact
that the same weapons were stolen to enhance the advisory
guideline range for the records offense. This is more than
the presence of some overlap in the factual basis; the
district court “really drew from the same well.” United
States v. Kopshever, 6 F.3d 1218, 1224 (7th Cir. 1993). If the
district judge believes that the advisory guidelines, prop-
erly computed, do not yield a reasonable sentence, it is free
to select a higher sentence, or to order that the sentences
run consecutively, in whole or in part. See Kimbrough v.
United States, 128 S.Ct. 558, 574 (2007) (“district courts must
treat the Guidelines as the ‘starting point and the initial
benchmark’ ”), citing Gall v. United States, 128 S.Ct. 586, 596
(2007). See U.S.S.G. § 5G1.2 (outlining advisory rules for
No. 06-2139 15
concurrent and consecutive sentences). The district court
in this case erroneously applied the § 2K2.1(b)(4) stolen
weapons enhancement, which entitles Podhorn to a
remand for resentencing.
Podhorn’s challenge to the application of the “special
skill” enhancement is not so persuasive. The provision
reads, in relevant part, as follows: “If 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, increase by 2 levels.” U.S.S.G.
§ 3B1.3. The PSR recommended application of this en-
hancement based on Podhorn’s violation of the terms of his
Federal Firearms License. We therefore do not find useful
the nonprecedential disposition from the Tenth Circuit to
which he referred, United States v. Hinshaw, No. 98-3165,
1999 U.S. App. LEXIS 378, at *13 (10th Cir. Jan. 12, 1999),
because it addressed only the special skill portion of
§ 3B1.3 and explicitly declined to address the “abuse of
trust” portion. Id. at *8-9.
Podhorn argues nevertheless that the jury instructions in
his case were flawed in that they referred disjunctively to
a position of trust or a special skill, and it was impossible
to tell from the jury’s special verdict which of these two
possible findings the jury made. Whether either of these
grounds for enhancement is satisfied is a question of fact,
and so Podhorn is really arguing that there was insufficient
evidence to support a finding of special skill. As this court
has said before,
It is one thing to negate a verdict that, while supported
by evidence, may have been based on an erroneous
16 No. 06-2139
view of the law; it is another to do so merely on the
chance—remote, it seems to us—that the jury convicted
on a ground that was not supported by adequate
evidence when there existed alternative grounds for
which the evidence was sufficient.
Griffin v. United States, 502 U.S. 46, 59-60 (1991) (quoting
United States v. Townsend, 924 F.2d 1385, 1414 (7th Cir.
1991)). The refusal to give an instruction removing an
insufficiently supported theory from the jury’s consider-
ation “does not provide an independent basis for reversing
an otherwise valid conviction.” Id. at 60. In Podhorn’s case,
each and every charge in the second superseding indict-
ment that invokes § 3B1.3 (Counts 3-25, 27) refers only to a
position of trust and not to special skill, so there is no
reason to suppose that the jury based its special verdict on
the special skill component. Thus, the § 3B1.3 enhancement
was properly applied.
* * *
For these reasons, we A FFIRM the court’s judgment of
conviction, but we V ACATE the sentence and R EMAND for
resentencing in accordance with this opinion.
No. 06-2139 17
R IPPLE, Circuit Judge, concurring in part and dissenting in
part. I join my colleagues in affirming the judgment of the
district court with respect to all issues except those ad-
dressed in part V of the opinion, which considers Mr.
Podhorn’s challenges to two aspects of his sentence. I
believe that the sentencing enhancement under U.S.S.G.
§ 2K2.1(b)(4), based on the fact that two of the firearms
were stolen, was applied properly to Mr. Podhorn. Addi-
tionally, I write separately to emphasize that this circuit
never has held that the sentencing enhancement under
U.S.S.G. § 3B1.3, for abusing a position of trust or using a
special skill, may be applied on the ground that the
defendant was the holder of a federal firearms license
(“FFL”); indeed, there is reason to believe it may not be so
applied. Therefore, I respectfully dissent.
I
The majority’s thoughtful and comprehensive opinion
sets forth the facts of this case in detail; I shall not belabor
them here. Section 2K2.1(b)(4) provides that, in calculating
the offense level, “[i]f any firearm (A) was stolen, increase
by 2 levels; or (B) had an altered or obliterated serial
number, increase by 4 levels.” The application note quali-
fies that rule, stating:
If the only offense to which § 2K2.1 applies is 18 U.S.C.
§ 922(i), (j), or (u), or 18 U.S.C. § 924(l) or (m) (offenses
involving a stolen firearm or stolen ammunition) and
the base offense level is determined under subsection
(a)(7), do not apply the enhancement in subsection
(b)(4)(A). This is because the base offense level takes
18 No. 06-2139
into account that the firearm or ammunition was
stolen. . . .
U.S.S.G. § 2K2.1 app. n.8(A) (2004).
Mr. Podhorn was charged with offenses under section
922(j), an offense which takes into account that the firearm
was stolen. Id. Additionally, his “base offense level [was]
determined under subsection (a)(7).” Id. Thus, if section
922(j) were “the only offense to which § 2K2.1 applie[d],”
the application of the section 2K2.1 enhancement would be
improper. See id.
Here, however, section 2K2.1 also applies to two counts
of conviction for failure to keep records in violation of 18
U.S.C. § 922(b)(5); the application therefore was proper. See
id. The PSR, which was adopted by the district court, found
that two weapons—Hess Arms Model 47 rifles bearing
serial numbers 991068107 and 991067293—were stolen.
This finding was supported by the jury’s special verdict in
Counts 3 and 4, which found that Mr. Podhorn had
disposed of those weapons knowing them to have been
stolen. See Tr. Vol. 18 at 142-43. Counts 3 and 4 alleged
violations of section 922(j), and, as discussed above, if
these offenses were the only ones to which the enhance-
ment could be applied, its application would be improper.
Those same firearms were involved as well, however, in
Counts 5 and 6. Id. at 217-20 (second superceding indict-
ment). Counts 5 and 6 alleged violations of 18 U.S.C.
§ 922(b)(5), failure to keep records required to be kept by
18 U.S.C. § 923. Violations of section 922(b)(5) are not
within the limitation expressed in section 2K2.1(b)(4) that
prohibits application of the stolen weapon enhance-
No. 06-2139 19
ment; that is, the enhancement in section 2K2.1 may be
applied to violations of the record-keeping requirement.
Because section 2K2.1(b)(4) may be applied to those
offenses, it may be applied to Mr. Podhorn. See U.S.S.G.
§ 2K2.1 app. n.8(A) (“If the only offense to which § 2K2.1
applies is 18 U.S.C. § 922(i), (j), or (u) . . . do not apply
the adjustment in subsection (b)(4).” (emphasis added)).
Here, where the section 2K2.1 enhancement could be
applied properly to Counts 5 and 6, the district court
did not err in applying it to Mr. Podhorn.1
II
I also write separately in order to address the application
of U.S.S.G. § 3B1.3, a sentencing enhancement for abusing
a position of trust or using a special skill. I concur with the
1
There is no double counting here. Indeed, the majority’s view
gives the defendant a free ride with respect to the fact that the
weapons were stolen. Given the grouping rules governing these
counts, Counts 3 and 4 add no additional punishment to the
defendant’s sentence. More fundamentally, the majority’s
analysis fails to recognize the substantial and salutary public
policy of distinguishing, for purposes of punishment, between
failing to keep accurate records and failing to keep accurate
records for stolen weapons. This is a far cry from the double
punishment meted out in United States v. Jackson, 103 F.3d 561,
569 (7th Cir. 1996), on which my colleagues rely, for committing
a drug offense with a firearm. Here, the defendant kept his
records in such a way that he concealed the presence of the
weapons in his inventory. He then sold the stolen weapons.
Consequently, reliance on Jackson is simply misplaced.
20 No. 06-2139
majority opinion’s holding on this issue, which affirms the
district court’s application of the enhancement. I do so
because, on appeal, Mr. Podhorn has not contended that an
FFL is not a position of either public or private trust. An
argument not made on appeal is abandoned, and we need
not consider it. See United States v. Venters, 539 F.3d 801, 809
(7th Cir. 2008); United States v. Cochran, 534 F.3d 631, 634
n.3 (7th Cir. 2008).
I wish to express concern, however, regarding whether
section 3B1.3 may be applied merely because the holder of
an FFL “violat[ed] the terms of his Federal Firearms
License.” See PSR ¶ 36. This court never has held that
section 3B1.3 may be applied in this circumstance.
Section 3B1.3 states:
If the defendant abused a position of public or private
trust, or used a special skill, in a manner that signifi-
cantly facilitated the commission or concealment of the
offense, increase by 2 levels. This adjustment may not
be employed if an abuse of trust or skill is included in
the base offense level or specific offense characteristic.
...
U.S.S.G. § 3B1.3. The majority opinion holds, and I concur,
that an FFL does not constitute a special skill under section
3B1.3. See id. § 3B1.3 app. n.4 (“ ’Special skill’ refers to a
skill not possessed by members of the general public and
usually requiring substantial education, training or licens-
ing. Examples would include pilots, lawyers, doctors,
No. 06-2139 21
accountants, chemists, and demolition experts.”).2 In order
to apply the enhancement to Mr. Podhorn, then, an FFL
must qualify as a position of either public or private trust.
There is reason to doubt this conclusion.
The application notes explain further what qualifies as
a position of trust, stating:
“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 defer-
ence). Persons holding such positions ordinarily are
subject to significantly less supervision than employees
whose responsibilities are primarily non-discretionary
in nature. For this enhancement 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 detec-
tion of the offense or the defendant’s responsibility for
2
The licensing qualifications to receive an FFL are perfunctory.
One must be at least twenty-one years old; not be prohibited
from transporting, shipping, or receiving firearms; not have
willfully violated any federal provisions or regulations concern-
ing firearms; not have willfully failed to disclose any material
information on the application; have a location in a state from
which the license business is conducted; and certify the business
will be conducted pursuant to state or local law. See 18 U.S.C.
§ 923(d)(1)(A)-(F); see also United States v. Hinshaw, 166 F.3d 1222(10th Cir. 1999) (unpublished disposition). Any application
“shall be approved” if those conditions are met and the appli-
cant pays the fee. 18 U.S.C. § 923(d)(1).
22 No. 06-2139
the offense more difficult). This adjustment, for exam-
ple, applies in the case of an embezzlement of a client’s
funds by an attorney serving as a guardian, a bank
executive’s fraudulent loan scheme, or the criminal
sexual abuse of a patient by a physician under the
guise of an examination. This adjustment does not
apply in the case of an embezzlement or theft by an
ordinary bank teller or hotel clerk because such posi-
tions are not characterized by the above-described
factors.
Id. app. n.1.3
As a general matter, we have held that the application of
section 3B1.3 is appropriate only if the victim puts the
offender in a position characterized by professional or
managerial discretion—that is, a position with the type of
substantial discretionary judgment that is ordinarily given
considerable deference—and that discretion then signifi-
cantly facilitates the execution and detection of the crime.
United States v. Hathcoat, 30 F.3d 913, 919 (7th Cir. 1994). We
must analyze the situation from the perspective of the
victim—the person or entity who trusted the offender with
discretion. Id.; see United States v. Ellis, 440 F.3d 434, 437
(7th Cir. 2006). The focus is not on formal labels; instead,
we “look to the relationship between the defendant and the
victim and the level of responsibility the defendant was
given.” United States v. Snook, 366 F.3d 439, 445 (7th Cir.
2004) (emphasis added).
3
Application Note 2 provides certain exceptions from the
qualification in Application Note 1, none of which apply here.
No. 06-2139 23
To date, no court has held that an FFL itself creates a
position of trust. This may be because it is difficult to
determine from its face how an FFL bestows on its holder
the type of substantial discretion and responsibility
necessary to apply section 3B1.3. See 18 U.S.C. §§ 923 & 924
(describing the qualifications for and requirements placed
on FFL holders). If the FFL itself forms the basis of the
position of trust, then the victim, whose perspective we
must consider, is the Government.4 See Ellis, 440 F.3d at
437; Snook, 366 F.3d at 445. The Government, which is the
licensing authority, provides an FFL holder with almost no
discretion as a result of his license. An FFL holder must
comply with all sales and firearms requirements of federal,
state and local law. Id. §§ 923(d)(1)(F)(ii)(II), (e). He must
maintain records of every disposition in any form of every
firearm that he handles. Id. § 923(g)(1)(A). An FFL holder
is subject to inspection at his licensed premises by the
Secretary without reasonable cause or warrant. Id.
§§ 923(g)(1)(B), (C). Such an inspection takes place at least
once per year for the purpose of inspecting the licensee’s
records, and more often than that in many circumstances.
An FFL holder is even limited in the form of his record
keeping; the records must be maintained “for such
period, and in such form, as the Secretary may by regula-
tions prescribe.” Id. § 923 (g)(1)(A). Additionally, he must
4
In this case, the PSR states that “[t]here are no identifiable
victims of the offense.” PSR ¶ 26. It states additionally that the
enhancement for abuse of a position of public or private trust
was proper because Mr. Podhorn “violat[ed] the terms of his
Federal Firearms License.” PSR ¶ 36.
24 No. 06-2139
prepare special reports whenever he sells any combination
of two or more pistols and revolvers to unlicensed persons
within a five-day period, and the report must be sent to the
Secretary and a local law enforcement agency the day of
the second sale. Id. § 923(g)(3)(A). He must report a loss or
theft to the local authorities within forty-eight hours. Id.
§ 923(g)(6). He must post his license on the premises
covered by the license, id. § 923(h), and he never may
conduct business from a motorized or towed vehicle, id.
§ 923(j). In short, a person holding an FFL is not “subject to
significantly less supervision than employees whose
responsibilities are primarily non-discretionary in nature.”
See U.S.S.G. § 3B1.3 app n.1. Thus, it is not clear, given the
nature of the FFL, how an FFL could convey upon its
holder the type of substantial discretionary judgment
necessary to apply the enhancement. See id.
Indeed, in the present case, Mr. Podhorn’s offenses were
strikingly akin to “the case of an embezzlement or theft by
an ordinary bank teller or hotel clerk”—that is, offenses
that do not qualify as positions of trust. Like the teller who
pockets a customer’s deposit instead of placing it in the till,
Mr. Podhorn stole firearms that had been sent to him for
repair.5 An ordinary teller has no discretion with regard to
5
I address specifically Mr. Podhorn’s offenses under section
922(j) because his record-keeping offenses under section
922(b)(5) include possession of an FFL as an offense characteris-
tic. See 18 U.S.C. § 922(b)(5) (“It shall be unlawful for any licensed
importer, licensed manufacturer, licensed dealer, or licensed
collector to sell or deliver . . . any firearm or armor-piercing
(continued...)
No. 06-2139 25
his dealings with the deposit; he is required by his position
to place it in the till. There is no element of discretionary
judgment in his position that would permit him to explain
properly the absence of that deposit in his till at the end of
the day. The contrast between this situation and that of
another example given by the application notes—that of
the criminal sexual abuse of a patient by a physician under
the guise of an examination—is clear. In the latter, the
physician is entrusted with significant discretion by his
patient, and, as a result of that discretion, he has substantial
opportunity to offer explanations for his criminal conduct
that would make detection of the offense significantly more
difficult. To give another example, the FFL license is akin
to a driver’s license that, although it puts one in a position
legally to be on the road, does not subject one to the
enhancement under section 3K1.3 if one drives while
intoxicated. The FFL may offer a mere opportunity to
commit offenses—for instance, the failure to keep the
records the FFL required an FFL holder to keep—but we
should take care before holding that it significantly facili-
tates the commission or concealment of an offense and that
it also affords the kind of substantial discretion that could
make more difficult the identification or detection of a
licensee’s offenses.
5
(...continued)
ammunition to any person unless the licensee notes in his
records, required to be kept pursuant to section 923 of this
chapter, the name, age, and place of residence of such person if
the person is an individual . . . .” (emphases added). Application
of section 3B1.3 to the offenses under section 922(b)(5) is
therefore improper. See U.S.S.G. § 3B1.3.
26 No. 06-2139
Conclusion
Therefore, I would affirm the judgment of the district
court. For these reasons, I respectfully dissent from the
portion of the panel’s opinion that reverses the district
court’s application of the sentence enhancement in section
2K2.1(b)(4). I concur in the judgment with regard to the
application of section 3B1.3, but would note considerable
reservation with regard to whether the section generally
should be applied to FFLs. I am pleased to join the opinion
in all other respects.
12-8-08