On Appeal From the United States District Court For the District of Delaware; D.C. Criminal Nos. 89-9-1, 89-29, and 89-36.
Stapleton and Alito, Circuit Judges, and Edward N. Cahn,*fn* District Judge.
This is an appeal from an order of judgment including sentence entered in the United States District Court for the District of Delaware. At issue is the decision to increase the appellant's sentencing level under the United States Sentencing Guidelines ("Sentencing Guidelines" or "U.S.S.G.") to take into account all relevant criminal activity he engaged in beyond the elements of his offense of conviction. We reverse the district court's decision and remand for resentencing.
This case arose out of a lengthy investigation by the Drug Enforcement Agency ("DEA"), in conjunction with local law enforcement officials, into the activities of a group of suspected cocaine and marijuana traffickers in the Wilmington, Delaware area. Indictments were brought against the appellant and a number of co-defendants, including Milton Diaz, Vincent Spina, Denia Murillo, and Timothy Anderson, on various drug trafficking and related charges. The Government alleged that Murillo was the organizer of this group.
After a number of co-defendants agreed to provide the Government with trial testimony, the appellant pleaded guilty on October 17, 1989 to four offenses: possession with intent to distribute more than 500 grams of cocaine (21 U.S.C. § 841(a)(1) and (b)(1)(B)), illegal structuring of a financial transaction (31 U.S.C. §§ 5324(3) and 5322 and 18 U.S.C. § 2), tax evasion (26 U.S.C. § 7201), and possession of a firearm by a drug user (18 U.S.C. §§ 922(g)(3) and 924(a)(2)). Frank J. Larry of the United States Probation Office conducted a presentence investigation. Pursuant to the Rules of Criminal Procedure, the Government submitted the prosecution's version of the offenses. After Mr. Larry prepared a Presentence Report ("Report"), Murillo interposed objections to the contents of the Report. Prior to sentencing, Murillo submitted a sentencing memorandum summarizing legal arguments to be made at the sentencing hearing, which occurred on September 5, 1990.
One of the issues raised by the presentence report, and which was the subject of a dispute between the Government and Murillo, was whether the defendant's guideline calculation should be enhanced by four levels pursuant to § 3B1.1(a) of the Sentencing Guidelines by categorizing Murillo as ". . . an organizer or leader of a criminal activity that involved five or more participants . . . ." The Government argued that when making a determination as to whether the defendant was an organizer of criminal activity involving five or more participants, the court should focus on all relevant aggravating conduct. Murillo argued that only his role in the offense of conviction was relevant to the court's determination under § 3B1.1(a).
The Relevant Conduct section of the Presentence Report focused on all members of the loose organization which was the subject of the DEA investigation. The Report noted that Murillo utilized a telephone pager with code numbers for more than fourteen individuals who played various roles in the organization. In addition, the Report made reference to a diary, discovered in Murillo's possession at the time of his arrest, which contained the names of various individuals indebted to him. Finally, the Report described the cooperation between the appellant and many individuals in obtaining and distributing marijuana and cocaine, transferring money to avoid Internal Revenue Service detection, and concealing assets acquired by the appellant. Paragraph 35 of the Report increased Murillo's base offense level "by four (4) levels as the defendant was an organizer of criminal activity that involved five or more participants. (3B1.1(a))."
Paragraphs six through fourteen of the Presentence Report described the offense conduct for the charges to which Murillo pleaded guilty. On the structuring count, the Report described the cooperation of Murillo and Milton Diaz in attempting to wire money from local Florida banks to a Florida law firm in an effort to circumvent currency transaction reporting requirements. On the tax evasion count, the Report compared the annual income set forth on Murillo's income tax return for the calendar year 1987, with the far greater expenditures Murillo registered that same year. On the firearm possession count, the Report described the purchase, possession, and discovery of a small pistol found in close proximity to certain drugs later attributed to Murillo. Finally, on the charge of possession with intent to distribute more than 500 grams of cocaine, the Report related the discovery of 715 grams of cocaine in a filing cabinet and metal tool box owned by Murillo but located in Vincent Spina's house. The Report also explained how the police found 275 pounds of marijuana in a Chevy Blazer owned by Murillo and parked at the house of an individual named Eddie Brooks.
At the September 5, 1990 sentencing hearing, the district court stated that "it [was] necessary, in making [the] determination [whether to enhance Murillo's offense level by four points], to look at the entire activity, to look at all of the relevant conduct, rather than one particular offense to which there is a guilty plea." After reviewing all relevant conduct in the case, the court found that Murillo was the leader of a drug distribution network involving at least seventeen people. Accordingly, the court sentenced Murillo, pursuant to the Sentencing Guidelines, to a 195-month prison term and five years of supervised release, plus a $200 special assessment.
In rendering its decision the district court found persuasive various commentaries to § 3B1.1, which it felt suggested that the proper focus at sentencing should be on the defendant's overall criminal network, rather than simply the number of participants in the offense of conviction. The district court also relied on proposed amendments to the Sentencing Guidelines which purport to clarify the language and the United States Sentencing Commission's intent in drafting § 3B1.1. Accordingly, the court deemed it appropriate to increase the appellant's offense level by four, finding "that the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." The district court determined that the total offense level for the appellant was 36, with a criminal history category of I.
On September 14, 1990, the appellant filed a Notice of Appeal. This court has appellate jurisdiction of this appeal from a final judgment and sentence in a criminal case ...