Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Help support the publication of case reports on MoreLaw
Date: 08-30-2021
Case Style:
United States of America v. Ernesto Sandoval Martinez
Case Number: 20-11016
Judge: Gregg Costa
Court: United States Court of Appeals
for the Fifth Circuit
Plaintiff's Attorney: Not Listed
Defendant's Attorney:
Description:
New Orleans, LA- Criminal defense lawyer represented defendant with a drug conspiracy
charge.
Sandoval Martinez owned E.T.’s Tobacco Shop in Dallas. The shop
sold more than just tobacco. After undercover agents conducted five
controlled buys of cocaine from the shop, authorities obtained a warrant to
search the premises. Inside, they found drugs, cash, and firearms. They then
arrested Sandoval Martinez and his coconspirators.
Although Sandoval Martinez pleaded guilty to a cocaine offense,
under relevant conduct principles he could be held responsible at sentencing
for the various types of drugs he was dealing. U.S.S.G. § 1B1.3. When
different drugs are involved, Sentencing Guidelines tables convert the weight
of different drugs to a common metric—called “converted drug weight.” See
U.S.S.G. § 2D1.1 cmt. nn.7 & 8(B). The conversion rate differs depending
on the type of drug, with marijuana essentially serving as the base. See id. at
n.8(D). One gram of marijuana thus equates to one gram of converted drug
weight. Id. One gram of cocaine, however, converts to 200 grams of
converted drug weight. Id.
At first, the presentence report (PSR) treated the seized $12,424 as
marijuana proceeds. After some objections and revisions, it ended up
treating the cash as cocaine proceeds instead, which resulted in a much
higher converted drug weight. The probation officer justified this by noting
that “the main source of the controlled purchases” was cocaine, even though
those purchases amounted to no more than a few hundred dollars in total.
The PSR’s final total converted drug weight, including the cash as cocaine
Case: 20-11016 Document: 00515998074 Page: 2 Date Filed: 08/27/2021
No. 20-11016
3
proceeds, was 103.10 kilograms. That amount is just above the 100-kilogram
threshold for a base offense level of 24. See U.S.S.G. § 2D1.1(c)(8).
Attributing all the seized cash to cocaine sales thus made Sandoval
Martinez’s offense level higher than it otherwise would have been.
At sentencing, Sandoval Martinez objected to the cash-to-cocaine
conversion, arguing that the PSR arbitrarily failed to consider other possible
sources of the money. Without providing reasons, the district court
overruled the objection and adopted the PSR. But the court varied below the
Guidelines range for two reasons: one relating to calculating the weight of the
THC edibles1 and another concerning the leadership enhancement because
of the small scope of the enterprise. With these variances, the court
calculated Sandoval Martinez’s total offense level to be 20, which when
combined with his Criminal History Category of I, resulted in a sentencing
range of 33 to 41 months.2 The court sentenced him to 37 months in prison
and three years of supervised release.
II.
Sandoval Martinez renews his argument that the district court erred
in treating all the cash found in his shop as proceeds from cocaine sales. The
1 Before his sentencing hearing, Sandoval Martinez filed a motion for a downward
variance arguing that the THC quantity attributed to him should consist only of the amount
stated on the packaging, instead of the (much higher) weight of the edible gummies and
their packaging. Because of the significant discrepancy, the government indicated that it
would not object to a downward variance. This does not affect our analysis, however.
2 The court characterized these as variances, rather than actual departures, so it is
unclear how this resulted in a new Guidelines range. See United States v. Jacobs, 635 F.3d
778, 782 (5th Cir. 2011) (describing a “departure” as a change in the Guidelines range that
still results in a sentence “imposed under the framework set out in the Guidelines” and a
“variance” as “a sentence that is outside the [G]uidelines framework” altogether).
Indeed, the post-sentencing Statement of Reasons states that the Guidelines range
accepted by the court is 87 to 108 months, not the reduced variance “range” of 33 to 41
months.
Case: 20-11016 Document: 00515998074 Page: 3 Date Filed: 08/27/2021
No. 20-11016
4
government counters that the conversion was justified because of the agents’
cocaine purchases and a coconspirator’s admission that the shop sold
cocaine. We review the district court’s drug quantity calculation—which
relied exclusively on the PSR—for clear error. United States v. Betancourt,
422 F.3d 240, 246 (5th Cir. 2005).
A sentencing court can “extrapolate the quantity [of drugs] from any
information that has sufficient indicia of reliability to support its probable
accuracy.” United States v. Gentry, 941 F.3d 767, 788 (5th Cir. 2019) (quoting
United States v. Dinh, 920 F.3d 307, 313 (5th Cir. 2019)). Generally, PSRs do
bear “sufficient indicia of reliability” to be considered by the court in making
factual determinations like drug quantity. United States v. Harris, 702 F.3d
226, 230 (5th Cir. 2012). But “mere inclusion” in the PSR does not render
a fact reliable when it otherwise lacks an adequate evidentiary basis. Gentry,
941 F.3d at 788 (quoting Harris, 702 F.3d at 230 n.2). Sentencing courts
cannot rely on a PSR’s “speculative inference[s]” and “conclusionary
statements” when those statements find no support in the record. United
States v. Rome, 207 F.3d 251, 254, 256 (5th Cir. 2000). A court that does so
commits clear error. Gentry, 941 F.3d at 788.
It was clear error to treat all the seized cash as cocaine proceeds.
There are too many possible alternative sources for the income, including
lawful proceeds from tobacco sales and proceeds from the sale of marijuana,
THC, or Xanex, all of which authorities seized from the shop. See United
States v. Fitzgerald, 89 F.3d 218, 223–24 (5th Cir. 1996) (considering whether
the defendant had a source of legal income as a factor when determining
whether seized cash represented proceeds of drug transactions); United
States v. Harrison, 439 F. App’x 378, 381 (5th Cir. 2011) (unpublished)
(same). Tax records and monthly revenue reports from the tobacco shop
support Sandoval Martinez’s argument that at least some of the money likely
came tobacco sales. Contrast United States v. Lucio, 985 F.3d 482, 488 (2021)
Case: 20-11016 Document: 00515998074 Page: 4 Date Filed: 08/27/2021
No. 20-11016
5
(holding it was acceptable for court to treat cash seized during drug bust as
meth when defendant was unemployed and “undisputedly a meth dealer . . .
[who] regularly dealt in kilogram quantities. . . easily sufficient to account for
the amount of cash seized”).
In addition to the likelihood that some of the cash came from lawful
tobacco sales, the evidence shows that cocaine was not the only source of
illegal proceeds. Authorities found meaningful amounts of other drugs in the
shop, including marijuana and THC. See United States v. Sandridge, 385 F.3d
1032, 1037–38 (6th Cir. 2004) (holding that sentencing court erred in treating
cash found in defendant’s car solely as cocaine when evidence showed he
possessed both cocaine and marijuana). The main reason the PSR cited for
treating 100% of the money as cocaine proceeds—that all of the controlled
buys were for cocaine—ignores that the undercover agents asked to buy
cocaine. The controlled buys thus do not fully reflect the trafficking that
occurred at the shop.
We therefore conclude it was clear error to treat all the cash as cocaine
proceeds.
The government does not argue the error was harmless. That makes
sense. An error that impacts the Guidelines range is usually prejudicial even
when the defense did not identify the error at trial. See Molina-Martinez v.
United States, 136 S. Ct. 1338, 1345, 1347 (2016). When, as here, defense
urges correction in the trial court, the government must prove “(1) that the
district court would have imposed the same sentence had it not made the
error, and (2) that it would have done so for the same reasons it gave at the
prior sentencing.” United States v. Ibarra-Luna, 628 F.3d 712, 714 (5th Cir.
2010); see United States v. Richardson, 676 F.3d 491, 511 (5th Cir. 2012). The
record does not establish either of those things. Although the district court
sentenced Sandoval Martinez well below the Guidelines range calculated by
Probation, it did not indicate that it would have imposed the same sentence
Case: 20-11016 Document: 00515998074 Page: 5 Date Filed: 08/27/2021
No. 20-11016
6
even if it erred in treating all the seized cash as drug proceeds. Thus, despite
the court’s sentencing Sandoval Martinez substantially below the
prevariance Guidelines, the record does not convince us that the error was
harmless.
Outcome: We VACATE Sandoval Martinez’s sentence and REMAND for resentencing.
Plaintiff's Experts:
Defendant's Experts:
Comments: