United States v. Waldner (564 F. Supp. 2d 911, 2008)

SENTENCING MEMORANDUM

LINDA R. READE, Chief Judge.

TABLE OF CONTENTS

I. INTRODUCTION........................................................917

II. RELEVANT PROCEDURAL BACKGROUND...............................917

A. Indictment..........................................................917

B. “Eleventh Hour” Plea Agreement.....................................918

C. Sentencing..........................................................919

III. SENTENCING FRAMEWORK............................................920

TV. FINDINGS OF FACT.....................................................921

A. Outline of Defendant’s Fraudulent Scheme.............................921

1. H&W..............................................•............921

2. Defendant’s fraudulent scheme....................................921

3. Baron’s role .....................................................922

B. Ongoing Efforts: Lex, Schueller & Eide................................923

1. Lex.............................................................923

2. Schueller........................................................926

3. Eide ............................................................926

V. PRIMARY LEGAL ISSUES...............................................928

VI. PRE-DEPARTURE ADVISORY SENTENCING GUIDELINES RANGE .....928

A. Amount of Loss — USSG § 2Bl.l(b)(l)(I)................................928

1. Law.............................................................929

2. Arguments.......................................................929

3. Analysis.........................................................931

4. Conclusion.......................................................933

B. Number of Victims — § 2Bl.l(b)(2)(B).................................933

C. “Sophisticated Means” — USSG § 2Bl.l(b)(8)(C)........................934

D. Abuse of a Position of Private Trust — USSG § 3B1.3....................935

E. Obstruction of Justice — USSG § 3C1.1.................................937

1. Thompson Motors ................................................937

2. Post-Plea Proffer................................................938

3. Disposition......................................................938

F. Acceptance of Responsibility-USSG § 3E1.1............................938

G. Pre-Departure Advisory Sentencing Guidelines Range..................939

VII. TRADITIONAL DEPARTURES...........................................939

A. General Principles...................................................940

B. Downward Departure-USSG § 5K2.0 ..................................940

C. Upward Departures..................................................941

1. USSG § 5K2.3 — Extreme Psychological Injurg......................941

2. USSG § 5K2.5 — Property Damage or Loss ..........................942

3. USSG § 5K2.9 — Criminal Purpose .................................943

4. USSG § 5K2.21 — Dismissed and Uncharged Conduct 943

D. Final Advisory Sentencing Guidelines Range.......... 944

VIII. SENTENCE AND RESTITUTION .. 944

A. 18 U.S.C. § 3553(a)............ 944

B. Restitution................... 945

IX. CONCLUSION.................... 945

I. INTRODUCTION

The matter before the court is the sentencing of Defendant Roger Waldner.

II. RELEVANT PROCEDURAL BACKGROUND

A. Indictment

On May 10, 2006, a grand jury returned a twelve-count Indictment (docket no. 2) against Defendant. Each count charged Defendant with knowingly and fraudulently making a false statement under penalty of perjury in relation to a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3).

Count 1 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in In re H & W Motor Express Co., No. 02-2017 (Bankr.N.D.Iowa Jun. 12, 2002) (“II & W Motor Express ”) under penalty of perjury that there were no “payments made within one year immediately preceding the commencement of the bankruptcy case to or for the benefit of creditors who are or were insiders.” In truth, H & W Motor Express Co. (“H & W”) paid over $1.8 million to or for the benefit of creditors who were or had been insiders.

Count 2 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in II & W Motor Express under penalty of perjury that there were “no inventories taken of the property of H & W.” In truth, Defendant had ordered others to take an inventory of H & W’s property in 2001.

Count 3 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in II & W Motor Express under penalty of perjury that there were no “distributions credited or given to an insider, including compensation in any form,” in the one year immediately preceding the commencement of II & W Motor Express. In truth, H & W had paid Defendant in the form of stock positions with Nationwide Cartage (“Nationwide”) and Solace Transfer (“Solace”), as compensation in lieu of a salary.

Count 4 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that H & W had no office equipment, furnishings or supplies. In truth, H & W had office equipment, furnishings and other supplies in its various offices and terminals.

Count 5 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that H & W had no machinery, fixtures, equipment or supplies used in its business. In truth, H & W had machinery, fixtures, equipment and supplies used in its business at its various offices and terminals.

Count 6 charged that, on or about June 27, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that H & W had no inventory. In truth, H & W had an inventory of parts and equipment, which it used to maintain its fleet of trucks and trailers.

Count 7 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that H & W “didn’t own any equipment.” In truth, H & W had an inventory of parts and equipment, which it used to maintain its fleet of trucks and trailers.

Count 8 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that he “never took any wages or salaries or anything else from the day [he] walked in the door there [at H & W].” In truth, Defendant received compensation from H & W in the form of stock positions with Nationwide and Solace in lieu of a salary.

Count 9 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that Solace had “no relation at all” with H & W. In truth, H & W and Solace had some common officers and directors. Further, Defendant was the CEO and owner of both H & W and Solace.

Count 10 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the following false statement in H & W Motor Express under penalty of perjury: “I don’t know [what STRAC was].” In truth, Defendant formed STRAC on June 15, 2001. He also signed a resolution by the Board of Directors of H & W regarding paying $100,000 for a feasibility study for STRAC to acquire Midland Transportation Co. (“Midland”).

Count 11 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the following false statement in II & W Motor Express under penalty of perjury: “I have no ownership or affiliation with Nationwide.” In truth, Defendant formed Nationwide on August 10, 2001, Nationwide and H & W shared the same office address and Defendant was CEO of Nationwide.

Count 12 charged that, on or about July 18, 2002, Defendant knowingly and fraudulently made the false statement in H & W Motor Express under penalty of perjury that he was “not aware” of any common officers between Solace, Nationwide and H & W. In truth, Defendant was an officer and director of Solace, Nationwide and H & W, and “G.S.” was an officer of Solace, Nationwide and H & W.

B. “Eleventh Hour” Plea Agreement

On May 18, 2007, Defendant appeared before a United States Magistrate Judge for jury selection. On May 21, 2007, after the jury was selected but before opening statements, Defendant appeared before the undersigned and pled guilty to Counts 11 and 12 of the Indictment. Defendant pled guilty pursuant to a plea agreement (“Plea Agreement”) (docket no. 49-2). In the Plea Agreement, Defendant stipulated to the following facts:

A. On June 12, 2002, [¶] & W] filed a petition for bankruptcy, under Chapter 11, in the United States Bankruptcy Court for the Northern District of Iowa [ (“Bankruptcy Court”) ]. On June 27, 2002, [¶] & W] filed its Statement and Schedules [ (“Schedules”) ] in support of its bankruptcy petition. The petition and Schedules were signed by [Defendant], as owner and [CEO] of [H&W].

B. On July 18, 2002, the Bankruptcy Court convened a First Meeting of Creditors [ (“ § 341 Meeting”) ], during which [Defendant] appeared on behalf of [¶] & W] as its owner and [CEO]. The [§ 341 Meeting] took place ... in the Northern District of Iowa. [Defendant] testified under oath and penalty of perjury during [§ 341 Meeting] on July 18, 2002.

C. During the [§ 341 Meeting], on July 18, 2002, [Defendant stated under penalty of perjury: “I have no ownership or affiliation with Nationwide.” In truth and in fact, [Defendant was president and CEO of One Stop, Inc. [ (“One Stop”) ], a South Dakota corporation, which did business as and owned the assets of Nationwide. Defendant knew that his statement was false at the time he made it, and was a materially false statement. Disassociating H & W from Nationwide may have prevented creditors from seeking to satisfy H & W debts from the assets of Nationwide, and therefore [Defendant intended to defraud creditors by making the false statement.

D. During the [§ 341 Meeting], on July 18, 2002, [Defendant stated under penalty of perjury that he was not aware of any connection of officers between Solace, Nationwide and H & W. In truth and in fact, [Defendant was the CEO of H & W and president and CEO of [One Stop, which] owned the assets and did business as Nationwide and Solace. Defendant knew that his statement was false at the time he made it, and was a materially false statement. Disassociating H & W from Solace and Nationwide may have prevented creditors from seeking to satisfy H & W debts from the assets of Solace and Nationwide, and therefore [Defendant intended to defraud creditors by making the false statement.

Plea Agreement at ¶ 28. In exchange for Defendant’s guilty plea, the government agreed to move to dismiss Counts 1 through 10 at the time of sentencing.

C. Sentencing

On November 15, 2007, the United States Probation Office (“USPO”) filed the Amended and Final Copy of Defendant’s Presentence Investigation Report (“PSIR”).

On January 4, 2008, Defendant filed a Motion for Downward Departure (“Motion”) (docket no. 62). Defendant requested that the court depart downward from the advisory Sentencing Guidelines range, pursuant to USSG § 5K2.0. Construed liberally, the Motion also requested a downward variance from the advisory Sentencing Guidelines range based on consideration of all the 18 U.S.C. § 3553(a) factors.

On January 14, 2008, the court notified Defendant that it was considering whether to depart or vary upward from the advisory Sentencing Guidelines range. On March 24, 2008, the parties filed a Stipulation (docket no. 74). On April 14, 2008, the government and Defendant filed their respective sentencing memoranda. On April 21, 2008, the parties filed responsive briefs.

On February 25-27, 2008, March 24, 2008, and July 7, 2008, the court held a contested sentencing hearing (“Hearing”). Assistant United States Attorney C.J. Williams represented the government. Attorney Richard O. McConville represented Defendant, who was personally present throughout the Hearing.

At the conclusion of the Hearing, the court sentenced Defendant to 120 months of imprisonment. The instant Sentencing Memorandum is designed to explain how the court resolved the primary legal issues in the case. It is not comprehensive and should be read in conjunction with the record of the Hearing.

III. SENTENCING FRAMEWORK

The Eighth Circuit Court of Appeals states that a “district court should begin [a sentencing proceeding] with a correct calculation of the advisory Sentencing Guidelines range.” United States v. Braggs, 511 F.3d 808, 812 (8th Cir.2008). The advisory Sentencing Guidelines range “is arrived at after determining the appropriate Guidelines range and evaluating whether any traditional Guidelines departures are warranted.” United States v. Washington, 515 F.3d 861, 865 (8th Cir. 2008).

“[A]fter giving both parties a chance to argue for the sentence they deem appropriate, the court should consider all of the factors listed in 18 U.S.C. § 3553(a) to determine whether they support the sentence requested by either party.” Braggs, 511 F.3d at 812. “The district court may not assume that the Guidelines range is reasonable, but instead ‘must make an individualized assessment based on the facts presented.’ ” Id. (quoting Gall v. United States, — U.S. -, -, 128 S.Ct. 586, 597, 169 L.Ed.2d 445 (2007)). “If the court determines that a sentence outside of the Guidelines is called for, it ‘must consider the extent of the deviation and ensure that the justification is sufficiently compelling to support the degree of the variance.’ ” Id. “The sentence chosen should be adequately explained so as ‘to allow for meaningful appellate review and to promote the perception of fair sentencing.’ ” Id.

In sentencing Defendant, the court made findings of fact by a preponderance of the evidence. “[J]udicial fact-finding using a preponderance of the evidence standard is permitted provided that the [Sentencing Guidelines] are applied in an advisory manner.” United States v. Bah, 439 F.3d 423, 426 n. 1 (8th Cir.2006). Generally, the government bore the burden of proof. Compare United States v. Flores, 362 F.3d 1030, 1037 (8th Cir.2004) (stating that the government bears the burden to prove sentencing enhancements), with United States v. Lussier, 423 F.3d 838, 843 (8th Cir.2005) (holding that defendant had the burden of proving a reduction in his offense level under the advisory Sentencing Guidelines). The court considered a wide variety of evidence, including the undisputed portions of the PSIR, the stipulated facts in the Plea Agreement and the testimony and other evidence that the parties introduced at the Hearing. When relevant and “accompanied by sufficient indicia of reliability to support the conclusion that it [was] probably accurate,” the court credited hearsay. United States v. Sharpfish, 408 F.3d 507, 511 (8th Cir. 2005).

The court did not “put on blinders” and only consider the evidence directly underlying Defendant’s two offenses of conviction. In calculating Defendant’s advisory Sentencing Guidelines range, for example, the court applied the familiar doctrine of relevant conduct. See USSG § 1B1.3 (2001). The Eighth Circuit Court of Appeals has repeatedly held that a district court may consider uncharged, dismissed and even acquitted conduct at sentencing. See, e.g., United States v. Whiting, 522 F.3d 845, 850 (8th Cir.2008) (“The sentencing court is not prohibited from considering uncharged or acquitted conduct.”); United States v. Bradford, 499 F.3d 910, 922 (8th Cir.2007), cert. denied, — U.S. -, 128 S.Ct. 1446, 170 L.Ed.2d 278 (2008) (upholding upward departure based on relevant conduct that formed the basis for a dismissed indictment); see also United States v. Jimenez, 513 F.3d 62, 88 (3d Cir.2008) (“The counts of conviction determined [the defendant’s] sentencing exposure, and the district court was free to consider relevant conduct, including conduct resulting in acquittal, that was proved by a preponderance of the evidence in determining [the defendant’s] sentence within the original statutory sentencing range.”).

IV. FINDINGS OF FACT

The evidentiary record in this sentencing is literally voluminous. It is unnecessary to detail every possible subsidiary factual finding or explain how the court resolved each and every inconsistency. Rather, it suffices to (1) outline Defendant’s fraudulent scheme and (2) discuss with particularity the testimony of Defendant’s three key witnesses: Lois Lex, Linda Schueller and Larry Eide. See Rita v. United States, — U.S. -, -, 127 S.Ct. 2456, 2468, 168 L.Ed.2d 203 (2007) (“The appropriateness of brevity or length, conciseness or detail, when to write, what to say, depends upon the circumstances. ... The law leaves much, in this respect, to the judge’s own professional judgment.”). The court makes further factual findings in Parts VI-VIII, infra.

A. Outline of Defendant’s Fraudulent Scheme

1. H&W

H & W was a private, family-owned, union trucking company. H&W was headquartered in Dubuque, Iowa. It operated terminals throughout the Midwest.

At the end of 2000, H&W was viable but struggling. Although H&W had significant assets, including trucks, trailers, equipment and office furniture, it had a large unfunded pension liability. It was also losing money each year: expenses exceeded revenues.

2. Defendant’s fraudulent scheme

Defendant learned of H & W’s problems and devised a complex scheme to assume control of H & W. He wanted to run H & W into the ground for his own personal benefit and at the expense of H & W’s creditors.

Defendant falsely represented himself to H & W’s owners as a successful and experienced corporate executive who was ready, willing and able to reinvigorate H & W and return it to profitability. In truth, Defendant intended to liquidate and funnel H & W’s assets to four other corporations that he controlled or otherwise had a close relationship with: Solace, Nationwide, EHI and STRAC (“the insider corporations”). Defendant then planned to plunge H&W into bankruptcy-leaving its creditors and employees with nothing.

In January of 2001, Defendant assumed control of H & W. From June of 2001 through June of 2002, Defendant funneled approximately $1.8 million worth of assets from H & W to the insider corporations.

On June 12, 2002, H&W filed a Voluntary Petition under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court. Defendant signed the Voluntary Petition as CEO and owner of H & W. H & W listed approximately $4.4 million in assets and $5.6 million in debts.

In furtherance of his intent to defraud H & W’s creditors out of approximately $1.8 million, Defendant repeatedly perjured himself throughout H &W Motor Express. On June 27, 2002, Defendant submitted the Schedules. Defendant knowingly and fraudulently made a number of false statements in the Schedules under penalty of perjury in furtherance of his scheme to defraud H & W’s creditors. Defendant lied and represented to the Bankruptcy Court that (1) there were no “payments made within one year immediately preceding the commencement of the bankruptcy case to or for the benefit of creditors who are or were insiders”; (2) there were “no inventories taken of the property of H & W”; (3) there were no “distributions credited or given to an insider, including compensation in any form,” in the one year immediately preceding the commencement of H & W Motor Express; (4) H & W had no office equipment, furnishings or supplies; (5) H & W had no machinery, fixtures, equipment or supplies used in its business; and (6) H & W had no inventory.

On July 18 and August 15, 2002, the United States Trustee convened the § 341 Meeting. Defendant testified at the § 341 Meeting under oath and faced questions from a raucous group of creditors. Defendant lied and represented to those assembled at the § 341 Meeting that (1) H & W “didn’t own any equipment”; (2) Defendant “never took any wages or salaries or anything else from the day [he] walked in the door there [at H & W]”; (3) Solace had “no relation at all” with H & W; (4) “I don’t know [what STRAC is]”; (5) “I have no ownership or affiliation with Nationwide”; and (6) he was “not aware” of any common officers between Solace, Nationwide and H & W.

3. Baron’s role

Attorney A. Frank Baron represented H & W in H & W Motor Express. Baron also controlled a number of trust accounts for H & W and Midland, a company Galley Smith had hired Baron to represent in December of 2001. The government presented evidence to show that Baron (1) used the trust accounts to help Defendant and his associates channel funds from H & W into the insider corporations; (2) knew Defendant was lying in the Bankruptcy Court and helped to keep Defendant’s lies hidden; and (3) lied to the Bankruptcy Court.

First, Baron helped Defendant and his associates channel funds from H & W into the insider corporations. In May of 2002, Baron accepted a $50,000.00 wire transfer from Solace as a retainer for filing H & W’s bankruptcy. Baron placed the $50,000.00 in H & W’s trust account. On June 12, 2002, the date H & W’s bankruptcy was filed, Baron transferred $14,229.47 from H & W’s trust account to a trust account for Midland. Baron broke up the transfer of $14,229.47 into three smaller payments of $9,735.66, $1,993.81 and $2,500.00 without adequate explanation. Further, without adequate explanation, the third transaction did not post in Midland’s trust account until two days after it left H & W’s trust account.

Second, Baron knew Defendant was lying in the Bankruptcy Court and helped to keep Defendant’s lies hidden. For example, H & W’s bankruptcy filings required H & W to disclose any payments by H & W for the filing of the bankruptcy. The filings state that H & W paid Baron’s law firm $50,000 in May of 2002. Baron knew this was a false statement. Not only did Baron know that Solace had paid the $50,000 to his law firm, Baron also transferred $14,229.27 of the $50,000 in H & W funds to Midland.

Third, Baron lied to the Bankruptcy Court. For example, Baron told H & W’s creditors and the United States Trustee at the § 341 Meeting that “I have nothing to do with STRAC[ ].” Gov’t Ex. 6, at 58. On December 3, 2001, however, Baron had accepted a $1,800 wire transfer from STRAC into Midland’s trust account. Further, Baron knew that STRAC and Solace were closely related to H & W. Baron implausibly testified at the Hearing that he did not have a responsibility to ensure that they were disclosed as insiders on H & W’s bankruptcy petition because he was permitted to rely on information Defendant and his associates had provided. However, Brad Hartke brought a draft of H & W’s bankruptcy filings to Baron on the date Baron filed them with various questions about the lies therein. Baron told Hartke to leave the room, talked with Defendant and then simply signed and filed the schedules without making any changes thereto.

B. Ongoing Efforts: Lex, Schueller & Eide

In making the foregoing factual findings, the court gave little to no weight to the testimony of Defendant’s three key witnesses: Lois Lex, Linda Schueller and Larry Eide. The court found that Lex, Schueller and Eide were not credible. In what follows, the court discusses the testimony of these three witnesses at length and makes further factual findings. These further factual findings bear on a number of legal issues in this case, most notably Defendant’s request in the Motion for a downward departure or variance. Defendant argues he is entitled to a lesser sentence on account of his ongoing efforts with Lex, Schueller and Eide. See infra Part VII.B.

1. Lex

Lois Lex worked as a secretary at H & W for forty-six years. Today, Lex works full-time on Defendant’s litigation. She employs Schueller to help her.

At the Hearing, Lex testified that she has spent hundreds of thousands of dollars on Defendant’s various legal cases, including the instant criminal matter. In addition to paying Defendant’s attorneys’ fees for the last three years, Lex pays Defendant’s hotel expenses and credit card bills. She pays his rent and his cable television. She gives Defendant’s wife and children $1,000 a week in spending money.

Lex characterizes her financial support for Defendant and his family as a “loan.” Lex testified that Defendant promised to pay her back all the money she has “loaned” him. Further, Lex testified that Defendant has agreed to compensate her for all the work that she and Schueller have expended over the last three years.

In contrast to her seemingly pinpoint knowledge of H & W’s finances seven years ago, Lex was exceedingly vague and evasive when it came to describing her own finances or the nature of her “loan” to Defendant. After much prodding, Lex testified that Defendant “owes” her around $700,000. She further testified that Defendant has not made any payments on the “loan” since 2003.

Lex insisted that all of the money she spent on Defendant came from her own savings. She denied under oath that Defendant had funneled money to her from H & W or other insider corporations at some prior point in time. When asked why she was so generous to Defendant, Lex testified she “knew he wasn’t guilty” and her parents raised her to “help somebody in need.” Sentencing Hearing Transcript (“S.H.T.”) at 987, 988. She later stated caustically: “I know it would have been easier if I had taken my money and — and endowed a church or something, where I would have got my name on a plaque. I understand that that would have been a lot easier.” Id. at 1037.

The court found Lex’s testimony to be inherently incredible. Lex is one of the more untruthful and deceitful witnesses that the court has had the opportunity to observe in recent years. Lex gave careful, calculated testimony: she was very specific when she wanted but “played dumb” when it suited her. The court was not fooled.

On cross-examination, Lex admitted she has never made more than $30,000 a year and has not received any significant sums of money from legitimate sources over the course of her lifetime, other than a small inheritance from her parents decades ago and some investment income, primarily from municipal bonds. Although Lex lives in a house and does not owe any money on it, she borrowed $60,000 from her sister to buy the house fourteen years ago and has not yet paid her sister anything back. One of Lex’s former coworkers, Robert Moore, testified that Lex’s financial means were so limited around the time of the filing of H & W’s bankruptcy that she routinely “ate a half a bologna sandwich for lunch, ... was wearing very dated clothing [and] drove a very modest vehicle.... ” Id. at 402-03. Moore felt so sorry for Lex’s plight that he took it upon himself to give her hundreds of dollars each week, even though the Bankruptcy Court had fixed her salary.

Lex did not have a credible explanation for her sudden wealth or her ability to fund Defendant’s lifestyle and litigation to the tune of $700,000. As indicated, Lex was very evasive and unspecific when she testified as to the “owed” amounts and the status of her finances. Some of her answers on cross-examination completely strained all credulity. For example, Lex repeatedly stated that she did not know why she wrote a large number of checks, totaling hundreds of thousands of dollars, to attorneys who either represented Defendant or were otherwise affiliated with him.

The court does not believe that Lex was independently wealthy and, out of the goodness of her heart, suddenly decided to loan Defendant large sums of money on vague terms. Rather, the court believes there is a much simpler explanation for Lex’s sudden wealth and generosity. It is much more probable that Lex and Defendant have conspired to secret away the missing H & W funds into Lex’s possession and that Lex has been tunneling that money back to Defendant and his family. That is, the court believes Lex perjured herself when she testified: “He has not given me any money” and “It’s my money.” Id. at 990.

Lex’s demeanor and sudden wealth and generosity towards Defendant and her feeble explanations are not the only evidence .that she and Defendant have conspired to steal H & W’s funds from its creditors. On cross-examination, Lex admitted that she now owns a corporation, Women’s Investment Property Trust (“WIPT”), which owns property with strong links to Defendant and One Stop, a corporation Defendant controlled with his wife. In 2005, while Defendant and One Stop were facing the prospect of a federal criminal indictment and foreclosures, One Stop transferred over $2 million in real and personal property to Lex without a contemporaneous exchange of fair value. Although Lex characterizes the transaction between One Stop and WIPT as a means to provide security for her hefty “loans” to Defendant, the court does not believe Lex. Only one attorney brokered the “deal” — Tom Pocola, Defendant’s personal attorney and the attorney who represented Defendant at the § 341 Meeting. The court believes it is much more probable that Defendant and Lex entered into an illicit agreement to shelter and safeguard Defendant’s assets until his considerable legal troubles end. The property WIPT now controls generates a significant amount of income and can be used to fund Defendant’s litigation and support his family.

2. Schueller

Linda Schueller is a former H & W employee who now works for DOG, Incorporated (“DOG”). Lex bought DOG from Defendant for $1 in the fall of 2002. Through DOG, Lex employs Schueller and contracts for Defendant’s “services.” At one time DOG purported to sell a product called “Bizpads,” a combination business card and scratch pad. Lex now admits that the sole function of DOG is “digging,” that is, running Defendant’s litigation.

Schueller takes direction from Lex, who pays her bills and tells her to obey Defendant’s orders. Schueller has spent the better part of the last three years reconstructing financial records for use in Defendant’s legal cases, including the instant criminal matter.

Schueller does not hold an accounting degree and lacks any training in forensic accounting. Her attempts to summarize H & W’s finances over the years are wholly unreliable if not farcical. The court did not find her testimony or exhibits to be competent, trustworthy or reliable. In contrast, the court found that Special Agent Jeff McGuire’s forensic analysis to be more credible. Special Agent McGuire has a degree in accounting and fourteen years of experience with the Investigation Division of the Internal Revenue Service.

3. Eide

Larry Eide is a lawyer from Mason City, Iowa. Since September 17, 2002, he has worked as the bankruptcy trustee in H & W Motor Express. Eide testified that his role as the bankruptcy trustee is to “look out for the unsecured creditors” by “corralling] all the property, determining] whether or not there’s any equity, converting] it to cash, and then paying] creditors.” S.H.T. at 765-66. Eide has spent hundreds of hours looking for H & W’s assets.

During the last six years, Eide has instituted a number of civil actions against persons or entities that he believed held assets that H & W’s creditors should recover. In 2004, Eide brought an adversary action (“Adversary Action”) against’ Defendant and others, including Defendant’s wife, Dawn Waldner, and One Stop. Eide alleged that Defendant transferred “in excess of [$] 1.5 million” out of H & W “without a contemporaneous exchange of good value.” Gov’t Ex. 814. Eide alleged that the defendants in the Adversary Action were still in possession of such funds.

At the Hearing, Eide retreated from his allegations in the Adversary Action. He testified that he now believes that “a bunch of that money did come back” into H & W. S.H.T. at 777. Eide testified that he bases his newfound conclusion upon bank records, documents and other information that Defendant, Lex and Schueller provided to him. Eide also testified that he believes “there [are] a lot of people picking on” Defendant. Id. On January 3, 2008, Eide filed a proposed settlement in the Bankruptcy Court. See Gov’t Ex. 814, passim (“Proposal for Approval of Compromise or Settement of Controversy; and Application to Employ Special Counsel”) (“Proposal”).

Under the terms of the Proposal, Lex would pay the bankruptcy estate $5,000.00. In return, the bankruptcy estate would (1) hire one of Defendant’s law firms, the Dut-ton Firm, to recover all claims of the bankruptcy estate and (2) give 80 % of all recovered sums to Lex and the Dutton Firm. The compromise is not limited to settlement of claims against the Waldners and One Stop; it would settle “numerous causes of actions and claims” that could be worth “millions of dollars.”

Eide’s support for the Proposal betrays a fundamental lack of judgment. Eide has proposed a settlement that is extremely favorable to Lex and unfavorable to H & W’s creditors. Further, Lex is not a forensic accountant or even a disinterested party; she is an insider and a former employee of H & W who retains strong ties to Defendant-a man who has admitted to two counts of bankruptcy fraud in this very bankruptcy proceeding. There is no evidence that Eide solicited proposals from other persons or entities that might afford the creditors a better return or consideration. Eide’s decision to include Lois Lex in the Proposal is nothing more than a thinly veiled attempt to compensate Lex for her reconstruction of the financial records in this and Defendant’s other cases. Indeed, he testified at the Hearing that he has conducted little to no investigation of Lex and her corporations; rather, he has simply proceeded on an assumption that Lex’s newfound wealth is wholly unrelated to H & W’s poverty. Eide has wholly foresaken his charge to look after the best interests of the creditors. Instead of blindly accepting the representations of Lex and Defendant, Eide should target them as the ultimate recipients of H & W’s assets.

As a consequence of his fundamental lack of judgment, the court does not credit Eide’s testimony, including his vague assertion that “a bunch of that money did come back” into H & W. S.H.T. at 777. The court also does not credit Eide’s testimony that Defendant “delegated a lot of duties to others [and] relied upon them.” Id. at 789. This testimony, which Lex and Schueller reiterated, is patently false; it is abundantly clear that Defendant largely micromanaged H & W’s affairs. Defendant, not Galley Smith or anyone else, orchestrated this scheme and controlled H & W. Eide’s bald observation that others “took advantage” of Defendant is beyond the pale. Id. at 790.

V. PRIMARY LEGAL ISSUES

The primary legal issues in this sentencing fell into three broad categories. The first category of issues concerned Defendant’s pre-departure advisory Sentencing Guidelines range. The second category of issues concerned Defendant’s final advisory Sentencing Guidelines range. The third category of issues were not concerned in the first instance with the advisory Sentencing Guidelines.

The court decided six legal issues when calculating Defendant’s pre-departure advisory Sentencing Guidelines range. First, the court decided whether Defendant should receive a sixteen-level increase, pursuant to USSG § 2Bl.1(b)(1)(I), because he is responsible for more than $1,000,000 in loss. Second, the court decided whether Defendant should receive a four-level increase, pursuant to USSG § 2Bl.1(b)(2)(B), because he is responsible for at least fifty victims. Third, the court decided whether Defendant should receive a two-level increase, pursuant to USSG § 2B1.1(b)(8)(C), because he used “sophisticated means.” Fourth, the court decided whether Defendant should receive a two-level increase, pursuant to USSG § 3B1.3, because he abused a position of private trust. Fifth, the court decided whether Defendant should receive a two-level increase, pursuant to USSG § 3C1.1, because Defendant obstructed justice. Sixth, the court decided whether Defendant should receive a two- or three-level reduction, pursuant to USSG § 3E1.1, because he accepted responsibility.

The court decided five legal issues when calculating Defendant’s final advisory sentencing guidelines range. First, the court decided whether it should depart downward, pursuant to USSG § 5K2.0 (Grounds for Departure). Second, the court decided whether to depart upward, pursuant to USSG § 5K2.3 (Extreme Psychological Injury). Third, the court decided whether to depart upward, pursuant to § 5K2.5 (Property Damage or Loss); Fourth, the court decided whether to depart upward, pursuant to § 5K2.9 (Criminal Purpose). Fifth, the court decided whether it should depart upward, pursuant to § 5K2.21 (Dismissed and Uncharged Conduct).

The court decided two non-advisory Sentencing Guidelines range issues. First, the court considered all of the factors at 18 U.S.C. § 3553(a) and determined Defendant’s sentence. Second, the court decided whether Defendant must pay restitution.

The court considers these three categories of issues, in turn.

VI. PRE-DEPARTURE ADVISORY SENTENCING GUIDELINES RANGE

The parties agreed that the applicable sentencing guideline for Defendant’s violations of 18 U.S.C. § 152(3) is § 2B1.1. See USSG App. A (Statutory Index). The parties also agreed that Defendant’s base offense level is 6. USSG § 2B1.1(a). Finally, the parties agreed that Defendant is subject to a two-level increase, pursuant to USSG § 2B1.1(b)(7)(B), because the offense involved misrepresentation or other fraudulent action in a bankruptcy proceeding. Thus, it was stipulated that Defendant’s adjusted offense level is at least 8. The parties disagreed as to whether six other adjustments under Chapters 2 or 3 of the advisory Sentencing Guidelines applied. The court considers these six adjustments, in turn.

A. Amount of Loss — USSG § 2Bl.l(b)(l)(I)

The first primary legal issue the court decided in this sentencing was whether Defendant should receive a sixteen-level increase, pursuant to USSG § 2Bl.l(b)(l)(I), because he is responsible more than $1,000,000 in loss.

1. Law

In pertinent part, § 2Bl.l(b)(l) states:

§ 2B1.1. Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States

(b) Specific Offense Characteristics (1) If the loss exceeded $5,000, increase the offense level as follows:

Increase in Loss (Apply the Greatest) Level

(A) $5,000 or less no increase

(B) More than $5,000 add 2

(C) More than $10,000 add 4

(D) More than $30,000 add 6

(E) More than $70,000 add 8

(F) More than $120,000 add 10

(G) More than $200,000 add 12

(H) More than $400,000 add 14

(I) More than $1,000,000 ' add 16

(J) More than $2,500,000 add 18

USSG § 2B1.1(b)(1) (emphasis in original).

Generally, “loss is the greater of actual loss or intended loss.” USSG § 2B1.1 cmt. (n. 2); United States v. Porter, 417 F.3d 914, 917 (8th Cir.2005). “Actual loss” is defined as “the reasonably forseeable pecuniary harm that resulted from the offense.” USSG § 2B1.1, cmt. (n. 2). “Intended loss” is defined as “the pecuniary harm that was intended to result from the offense.” Id.

The government bears the burden to prove “loss” by a preponderance of the evidence. United States v. Staples, 410 F.3d 484, 490 (8th Cir.2005). The amount of the loss, however, need not be determined with precision. See, e.g., United States v. French, 46 F.3d 710, 715 (8th Cir.1995). Indeed, there is no precise rubric for determining the amount of loss under § 2B1.1. See, e.g., United States v. Holthaus, 486 F.3d 451, 455 (8th Cir.2007), cert. denied, — U.S.-, 128 S.Ct. 343, 169 L.Ed.2d 241 (2007) (“There is no blanket rule defining intended loss as the lesser of the value of assets concealed or the value of the debtor’s liabilities. Indeed, some factual scenarios may require an intended loss calculation based on the greater of the value of the assets concealed or debt sought to be discharged.” (Emphasis added.)) “The court need only make a reasonable estimate of the loss.” USSG § 2B1.1, cmt. (n. 2). Further, intended loss “includes intended pecuniary harm that would have been impossible or unlikely to occur....” Id.

2. Arguments

The government argued that Defendant intended that the creditors of H & W lose more than $1,000,000, and thus the court should impose a sixteen-level increase to Defendant’s base offense level. The government argues that the intended loss is the amount that Defendant and his subordinates “bled out” of H & W and into the insider corporations in the year preceding the filing of H & W Motor Express on June 12, 2002. That is, the government alleges that Solace, Nationwide, STRAC and EHI were “insiders,” viz., corporations with sufficiently close relationships to Defendant and H & W that the bankruptcy trustee and the creditors of H & W were entitled to attempt to recoup any payments thereto. The government points out that, in his Plea Agreement, Defendant admitted he lied about the connections between H & W and Nationwide and Solace, in order to prevent the bankruptcy trustee and creditors from recouping such payments. Specifically, Defendant knew that “[disassociating H & W from Solace and Nationwide may have prevented creditors from seeking to satisfy H & W debts from the assets of Solace and Nationwide, and therefore [Defendant intended to defraud creditors by making the false statement.” Plea Agreement at ¶ 28. The government contends that the transfers to EHI and STRAC are relevant conduct, because they are part of the same course of conduct or common scheme or plan as the offense of conviction. The government summarizes:

Defendant was asked to [disclose payments to Nationwide and Solace] because under bankruptcy law the trustee can rescind such payments made to insiders, regardless of whether they were legitimate payments. Defendant made these fraudulent statements with the intent to defraud his creditors by preventing the trustee and creditors from seeking to satisfy H & W debts from the assets of Solace and Nationwide. By lying about the connections between H & W, the defendant, and the other companies, it prevented the trustees and the creditors from being able to take any action to rescind the payments. Before the true facts were known, Defendant sold Solace and Nationwide for $1.1 million.

[T]he legitimacy of such payments is irrelevant. Transactions with insiders may be rescindable, even if for legitimate purposes. The perjury and fraud committed by defendant prevented creditors from investigating whether the transactions were legitimate and, even if there were, whether they could be rescinded as preferential payments. Because creditors may have been able to recover the funds transferred to the insider companies if not for defendant’s false statements, the loss of the ability to recover those funds is a harm that directly resulted from [the] offense of which defendant was convicted and should be considered as relevant conduct in calculating the specific offense characteristic.

The intended loss here, of course, was the amount of funds bled out of H & W by defendant and those working for him into his other corporations. He lied about his connection to these insider companies, and the connection between them, because he wanted to prevent the trustee and the creditors from attempting to latch onto the assets of defendant’s other companies to satisfy the debts of H & W. Whether the trustee or creditors would have ultimately been successful in rescinding these payments or whether they could have ever recovered any assets from these other corporations, does not matter. Defendant intended to prevent them from even trying by lying and obfuscating the relationships between the companies. It is based on the loss defendant intended to cause that this Court should determine the appropriate loss amount.

Sentencing Memorandum (docket no. 82), at 8-9,12 (citations omitted).

The government has provided the court with varying estimates of the amount of money Defendant transferred from H & W to the insider corporations in the year preceding the filing of H & W Motor Express on June 12, 2002. In its brief, the government states that H & W transferred as much as $1,927,717.01 to the insider corporations during the relevant time-frame. Sentencing Memorandum (docket no. 82), at 13 (citing Gov’t Exs. 100, 120, 124, 135 and 152). Accordingly, the government concludes that a sixteen-level increase is appropriate, because Defendant intended that his creditors lose more than $1 million.

Defendant argues that he did not intend any loss to his creditors. As a threshold matter, Defendant argues that the court should not consider any payments to STRAC or EHI, because Defendant did not plead guilty to any counts involving those corporations. With respect to the transactions to Solace and Nationwide, Defendant attempts to shift blame to Galley Smith, whom Defendant alleges transferred funds back and forth between H & W and Solace even though he was not authorized to do so. Defendant contends he did not take part in or even know of many of the transactions between H & W and the insider corporations and thus did not intend any loss from such transactions. Further, Defendant states that he personally guaranteed the debts of H & W, Solace and the prior shareholders of H & W, the Haas and Wissel families. Defendant points out that, after several years of litigation, Eide believes that others have taken advantage of Defendant and Eide has decided to work with Defendant to find H & W’s missing assets. Defendant affirmatively states that the lies that form the basis for his convictions on Counts 11 and 12 “were intended to allow [¶] & W] to continue operating under chapter 11 in hopes of bringing the company out of its’ [sic] money problems and trying to avoid a chapter 7 which would result in a greater loss and possible discharge or loss to creditors.” Sentencing Memorandum (docket no. 79), at 29.

3. Analysis

As the court’s factual findings in Part IV supra make clear, the court finds that Defendant intended a loss of approximately $1.8 million to H & Ws creditors. Put simply, Defendant devised a complex scheme to liquidate and transfer H & W’s assets to a number of other corporations that he and his cronies controlled. Once Defendant bled H & W dry, he filed bankruptcy for H & W. In H & W Motor Express, Defendant repeatedly lied about his relationships with the other corporations and individuals. Defendant’s intent was plain: to enrich himself at the expense of H & W’s creditors.

The $1.8 million figure is the court’s best estimate of intended loss. The estimate is based upon Special Agent Jeff McGuire’s testimony about the amounts of money Defendant bled out of H & W in the year preceding the filing of the bankruptcy. The court credits Special Agent McGuire’s testimony that H & W made more than $1.8 million in payments to the insider corporations during such time. See Gov’t Exs. 100, 120, 124, 135, 152 and 902.

The court’s intended loss calculation includes amounts that Defendant tunneled to EHI and STRAC, even though Defendant only pled guilty to lying about Nationwide and Solace. Defendant’s actions with respect to all four corporations were part of a single course of conduct or common scheme or plan, and thus he is liable for his actions under the familiar doctrine of relevant conduct. USSG § 1B1.3. Defendant used EHI and STRAC to defraud his creditors in the same manner that he admitted in his Plea Agreement that he used Nationwide and Solace.

It does not matter that Defendant may have successfully hidden some of H & W’s assets so that neither his creditors nor the trustee can find them. See, e.g., Holthaus, 486 F.3d at 455 (holding that intended loss included amounts that the government and the bankruptcy trustee could not find after a diligent search). Likewise, it does not matter that Defendant may have transferred such sums in a manner in which H & W’s creditors would not be able to recover them all as payments to insiders. See USSG § 2B1.1, cmt. (n. 3(A)(2)) (stating that intended loss includes pecuniary harm that would be impossible or unlikely to occur). Further, it does not matter that Defendant used or directed others to make many of the transfers. The vagaries of federal bankruptcy law are not at issue here; the ultimate enquiry is Defendant’s intent. The court finds that, in the present case, the large amounts of money that Defendant transferred from H & W to the insider corporations, coupled with his admissions in the Plea Agreement that he made some of the transfers to defraud H & W’s creditors, is the best evidence of Defendant’s intent as to loss. Cf. Holthaus, 486 F.3d at 455. There is simply no credible evidence in the record that Defendant intended to defraud his creditors of anything less. Cf. id. As indicated in Part IV.B supra, the court did not find the testimony of Lex, Eide or Sehueller to be credible or the documentary evidence Defendant introduced through these witnesses to be competent. Even if the court were to assume that Defendant made guarantees to repay funds to H & W, the court does not believe that he intended to follow through on his promises.

Defendant’s bald representation to the court in his Sentencing Memorandum that his lies “were intended to allow [¶] & W] to continue operating under chapter 11 in hopes of bringing the company out of its’ [sic] money problems and trying to avoid a chapter 7 which would result in a greater loss and possible discharge or loss to creditors” is not evidence. In any event, it is wholly self-serving and the court disregarded it. Defendant’s statement amounts to a denial of criminal intent as to Counts 11 and 12 and thus contradicts Defendant’s admissions in his Plea Agreement that he knew that “[disassociating H & W from Solace and Nationwide may have prevented creditors from seeking to satisfy H & W debts from the assets of Solace and Nationwide, and therefore defendant intended to defraud creditors by making the false statement.” Plea Agreement at ¶ 28. Through his attorney, Defendant is dissembling because he wants to minimize his advisory Sentencing Guidelines range.

4. Conclusion

Accordingly, the court held that Defendant should receive a sixteen-level increase, pursuant to USSG § 2Bl.l(b)(l)(I), because he intended more than $1,000,000 in loss. This brought Defendant’s adjusted offense level to 24.

B. Number of Victims— § 2Bl.l(b)(2)(B)

Second, the court decided whether Defendant should receive a four-level increase, pursuant to USSG § 2B 1. 1(b)(2)(B), because he is responsible for at least fifty victims. The government bore the burden to prove this enhancement applied.

Section 2B 1. 1(b)(2)(B) provides: “If the offense ... involved 50 or more victims, increase by 4 levels.” USSG § 2Bl.l(b)(2)(B) (emphasis in original). The Commentary to the advisory Sentencing Guidelines defines “[v]ictim” as including “any person who sustained any part of the actual loss determined under subsection (b)(1).” Id. cmt. (n. 3(A)©). “ ‘Person’ includes individuals, corporations, companies, associations, firms, partnerships, societies, and joint stock companies.” Id.

The government provided the court with the following argument in support of a four-level increase in this case:

[T]he intended loss amount calculated under section 2Bl.l(b) consists of the insider transactions that [D]efendant’s false statements concealed. This intended loss affected all the creditors who could have benefitted from the avoidance or rescission of those contracts. There were 289 unsecured creditors of the bankruptcy estate. [PSIR ¶ 90], Therefore, [Defendant's offense level is properly increased by 4 levels, pursuant to USSG § 2Bl.l(b)(2)(B).

Sentencing Memorandum (docket no. 82), at 14.

The government’s argument entirely misses the mark. Section 2B1.1 defines “victim” to include only those persons who have suffered actual loss, not simply anyone whom a defendant intended to suffer loss. As the Eighth Circuit Court of Appeals recently stated, “a victim must be an individual, corporation or company of some type that sustained part of the actual loss determined by the district court.” United States v. Icaza, 492 F.3d 967, 969 (8th Cir.2007) (emphasis added). The government’s argument for a four-level increase thus fails, because it is premised upon the number of persons Defendant intended to harm, not the number of persons who sustained an actual loss.

In the alternative, the government states that “whether there was an actual loss or an intended loss, the number of victims remains the same.” Sentencing Memorandum (docket no. 82), at 14. The government contends that “more than $1 million left H & W and has been unaccounted for by the trustee” and concludes “[t]hat money could have been available to pay some of the debt owed the creditors.” Id. The government asserts without explanation that “[t]here were more than 50 creditors affected by [Defendants lies....” Id. at 15.

The court finds that the actual loss in this case tracks the intended loss. There can be little doubt that Defendant inflicted approximately $1.8 million in actual loss upon the bankruptcy estate, and the court shall order him to make appropriate restitution to the bankruptcy estate. The court also has no doubt that Defendant intended to inflict loss on hundreds of individuals and corporations, that is, all of H & W’s 289 creditors. That said, the government has not presented the court with any evidence or legal authority to show that the loss to the bankruptcy estate amounts to an actual loss for each, or any, creditor of the bankruptcy estate. In other words, the court is not convinced by a preponderance of the evidence that all 289 creditors have suffered actual losses as a result of Defendant’s conduct; for all the court knows, it is equally likely that only one major creditor suffered a loss. It is significant that the bankruptcy estate remains open at the present time.

Accordingly, the court held that an increase in Defendant’s adjusted offense level pursuant to USSG § 2Bl.l(b)(2)(B) was not appropriate, because the government did not meet its burden of proof. Defendant’s adjusted offense level under the advisory Sentencing Guidelines remained at 24.

C. “Sophisticated Means”— USSG § 2B1.1 (b)(8)(C)

Third, the court decided whether Defendant should receive a two-level increase, pursuant to USSG § 2Bl.l(b)(8)(C), because he used “sophisticated means.” The government bore the burden to prove this enhancement applied.

In its entirety, § 2Bl.l(b)(8) provides:

If (A) the defendant relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials; (B) a substantial part of a fraudulent scheme was committed from outside the United States; or (C) the offense otherwise involved sophisticated means, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

USSG § 2B1.1(b)(8) (emphasis in original). In the present case, the government only alleges that Defendant meets prong “(C)”, that is, his “offense otherwise involved sophisticated means.”

The Commentary defines “sophisticated means” as “especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense.” Id. cmt. (n. 6(B)). “Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates sophisticated means.” Id. The court cannot, however, use conduct that forms the basis for a “sophisticated means” enhancement that it also uses for an obstruction of justice enhancement under USSG § 3C1.1. Id. cmt. (n. 6(C)).

Defendant’s offense clearly involved “sophisticated means.” Defendant’s arguments to the contrary are wholly unpersuasive and amount to little more than a frivolous denial of relevant conduct. As the evidence the court received over four days -of sentencing attests, this is not your “garden-variety” bankruptcy fraud. Cf. United States v. Hance, 501 F.3d 900, 909 (8th Cir.2007) (“The government must show that [the defendant’s] mail fraud, when viewed as a whole, was notably more intricate than that of the garden-variety mail fraud scheme.”). Defendant established or controlled a number of corporations, the insider corporations, into which he bled H & W’s assets. Defendant took elaborate steps to conceal his involvement with these corporations. For example, Defendant incorporated STRAC in others’ names. He routinely listed others as officers and owners of these corporations. The corporations were largely if not wholly shell corporations that served no function other than to serve as repositories for assets Defendant stole from H & W’s creditors. Like the defendant in United States v. Hallaran, Defendant’s “total scheme was undoubtedly sophisticated” and “did not involve a single fraudulent act, but a complex series of fraudulent transactions.” 415 F.3d at 945 (8th Cir.2005).

Accordingly, the court held Defendant should receive a two-level increase, pursuant to USSG § 2B1.1(b)(8)(C), because he used “sophisticated means.” This brought Defendant’s adjusted offense level under the advisory Sentencing Guidelines to 26.

D. Abuse of a Position of Private Trust — USSG § 3B1.3

Fourth, the court decided whether Defendant should receive a two-level increase, pursuant to USSG § 3B1.3, because he abused a position of private trust. The government bore the burden to prove this enhancement applied.

In full, § 3B1.3 provides:

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. This adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic. If this adjustment is based upon an abuse of a position of trust, it may be employed in addition to an adjustment under § 3B1.1 (Aggravating Role); if this adjustment is based solely on the use of a special skill, it may not be employed in addition to an adjustment under § 3B1.1 (Aggravating Role).

USSG § 3B1.3. In relevant part, the Commentary to § 3B1.3 provides the following additional guidance:

Application Notes:

1. “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). This adjustment, for example, 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 positions are not characterized by the above-described factors.

Background: This adjustment applies to persons who abuse their positions of trust or their special skills to facilitate significantly the commission or concealment of a crime.... Such persons generally are viewed as more culpable.

Id. cmt. (n. 1) & bckgd.

As appl