United States v. Stanley Bates

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 18-50785

UNITED STATES OF AMERICA,

Plaintiff - Appellee

v.

STANLEY P. BATES,

Defendant - Appellant

Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:17-CR-381-2

Before KING, JONES, and COSTA, Circuit Judges.
PER CURIAM:*
Stanley P. Bates pled guilty to conspiracy to commit wire fraud, wire
fraud, conspiracy to commit money laundering, three substantive counts of
money laundering, and two counts of aiding and abetting securities fraud. He
was sentenced within the guidelines range to 180 total months in prison.
Bates asserts that the district court erroneously assessed him a two-level
enhancement under U.S.S.G. § 3B1.3 for abuse of a position of trust. He argues
that he did not qualify for the enhancement because he held no fiduciary-like

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5
TH
CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
FILED
March 3, 2020

Lyle W. Cayce
Clerk
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or personal trust relationship vis-à-vis any victim and that the acts allegedly
justifying the enhancement were indicative only of an arm’s length contractual
relationship. Because Bates substantially raised this argument in the district
court, we review for clear error. See United States v. Miller, 607 F.3d 144, 147–
48 (5th Cir. 2010); United States v. Dial, 542 F.3d 1059, 1060 (5th Cir. 2008).
Under § 3B1.3, a two-level enhancement applies if the defendant (1) held
a position of trust and (2) abused that position in a manner that significantly
facilitated the commission or concealment of the crime. § 3B1.3; United States
v. Ollison, 555 F.3d 152, 166 (5th Cir. 2009). Bates challenges only the first
prong of this analysis, asserting he did not hold a position of trust.
“A position of trust is characterized by (1) professional or managerial
discretion (i.e., substantial discretionary judgment that is ordinarily given
considerable deference), and (2) minimal supervision.” Id. at 166 (citing
U.S.S.G. § 3B1.3 cmt. n.1). Finding a person held a position of trust is
warranted “if a defendant’s job places the defendant in a superior position to
commit a crime and the defendant takes advantage of that superior position to
facilitate a crime.” United States v. Dahlstrom, 180 F.3d 677, 685 (5th Cir.
1999) (internal citation omitted). Neither our precedent nor the guidelines
require this determination “be assessed from the perspective of the victim.”
United States v. Buck, 324 F.3d 786, 794 (5th Cir. 2003); see also United States
v. Kay, 513 F.3d 432, 460 (5th Cir. 2007) (holding the enhancement applies
even when the defendant does not abuse “a position of trust vis-à-vis the victim
of the crime”). We also do not require the existence of a legally recognized
relationship of trust in order to apply the enhancement. United States v.
Wright, 496 F.3d 371, 377 (5th Cir. 2007).
This court has repeatedly held that individuals occupying high
managerial offices within a company may hold a position of trust. In Kay, we
upheld the enhancement because the defendant, “as the president and CEO of
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ARI, maintained a position of trust with respect to . . . ARI’s shareholders.”
Kay, 513 F.3d at 461; see also United States v. Pruett, 681 F.3d 232 (5th Cir.
2012) (upholding the adjustment for the president/CEO of a wastewater
management company convicted of Clean Water Act violations). In another
case, Sudeen, we held that the defendant occupied a position of trust because
he lured investors by creating “bogus . . . ‘Joint Venture Agreements’” and
claiming he would place investors’ money in high-yield investment programs
that were really frauds in an elaborate Ponzi scheme. United States v. Sudeen,
434 F.3d 384, 387, 392 (5th Cir. 2005). We have also affirmed an abuse of trust
enhancement where the defendants posed as financial planners in a mail fraud
scheme that targeted the elderly. United States v. Reeves, 255 F.3d 208, 209,
212–13 (5th Cir. 2001).
The facts contained in the presentence report (“PSR”), which Bates has
failed to rebut, warrant the adjustment. See United States v. Gomez-Alvarez,
781 F.3d 787, 796 (5th Cir. 2015). As majority owner and CEO of the company,
Bates’s position superlatively situated him to perpetrate and conceal his
fraudulent scheme. Like the defendant in Kay, Bates “maintained a position
superior to that of all other individuals with a similar ability to commit or
conceal offenses.” Kay, 513 F.3d at 461. And similarly to Sudeen and Reeves,
Bates presented himself to his victims as operating a valid business that
fraudulently acquired investors’ money for the purposes of his own enrichment.
The PSR includes numerous instances in which Bates—and employees acting
on his orders—falsified records, doctored promotional materials, and made
material misrepresentations in order to secure investments in his company.
With complete managerial discretion and no oversight, it was nearly
impossible for investors to detect his scheme.
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Given the nature of Bates’s involvement in the fraudulent conduct, the
district court did not clearly err by finding that he abused a position of trust.
See Miller, 607 F.3d at 146–50; Sudeen, 434 F.3d at 386–87, 391–92.
AFFIRMED.
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