Court: Court of Appeals for the Eleventh Circuit; October 17, 1995; Federal Appellate Court
Co-defendants Michael Knowles, James Squires, and Daniel Wright have appealed their convictions for participation in a large-scale drug conspiracy involving the importation and distribution of marijuana, cocaine, and hash oil. All three convictions are affirmed; however, their sentences are vacated, and the case is remanded for resentencing under pre-Guidelines law.
The conspiracy began in the mid-1970s, involving key figures like the Rodriguez brothers and the Contoneo brothers, who coordinated the acquisition of significant quantities of drugs from the Caribbean for distribution in the U.S. and Canada. They employed various personnel, including boat crews and truck drivers, to facilitate smuggling operations. Initially, operations were based in Southeastern Florida, but a second base was established on the Western coast, particularly in Ft. Myers and Destín.
The organization successfully imported and distributed around 100,000 pounds of marijuana, 10,000 pounds of cocaine, and several hundred pounds of hash oil over several years without detection. In the mid-1980s, Tico Rodriguez enlisted Daniel Hamm to captain smuggling vessels, which included the boat Becky Ann. After a successful initial venture, Hamm was provided with a replacement boat, the Suntimes, to transport additional loads of marijuana. Concurrently, Squires and Wright were involved with the Becky Ann, which was transported to Ft. Myers. The operations were characterized by significant logistical planning and coordination among the conspirators.
The boat was equipped with hidden compartments for smuggling, capable of carrying about 3,000 pounds of drugs. Rodriguez and Fitzwater conducted multiple successful smuggling operations using the vessel Freeflight. They also acquired a larger motorboat, the Olives, which could conceal 6,000 to 8,000 pounds of contraband. Archie Jones and Wolfgang Petrasko were enlisted to captain smuggling trips on the Olives. In May 1986, Jones made a trip to Puerto Rico and Jamaica, where he loaded 7,000 to 8,000 pounds of marijuana, which was off-loaded in Ft. Myers. Later, in late 1987, Jones returned to South Florida with around 600 pounds of cocaine on the Olives.
In early 1987, the group faced a setback when their sailboats, Freeflight, Mad Dog II, and Suntimes, were involved in simultaneous smuggling operations. While all three boats traveled from Florida to Jamaica without incident, the Mad Dog II was seized in the Cayman Islands for carrying marijuana, leading to the arrest of its crew and the targeting of the other vessels.
Michael Knowles' involvement in criminal activities began shortly after the seizure of the Suntimes. The Suntimes, after learning about the Mad Dog II's seizure, traveled to Cozumel to disguise its trip. Captain Charles Davis, not wanting to proceed to Florida, arranged for a new crew, including Hamm and Mike Sudar, recruited by Fitzwater. Hamm was promised $150,000 for this trip. Upon arrival in Destín on February 3, 1987, the Suntimes was seized, and Hamm and Sudar were arrested.
Fitzwater arranged for local lawyers to represent the arrested crew. Hamm contacted his girlfriend, who reached out to Knowles for legal help. Knowles then sought funds from Fitzwater for Hamm’s representation and traveled to assist at Hamm's detention hearing. During this process, Hamm disclosed his and Fitzwater's involvement in drug smuggling and sought Knowles' help in recovering the $150,000 owed to him. Additionally, Hamm spoke with attorney Leo Thomas, hired by Fitzwater under an alias, revealing his knowledge of not only the charges related to the Suntimes' seizure but also a broader conspiracy to import and distribute controlled substances.
Hamm informed Thomas that he had previously captained four smuggling operations for the Rodriguez brothers. Following Hamm's debriefing, Thomas met with Knowles to relay this information. Knowles then coordinated with Fitzwater regarding Hamm's payment of $150,000 for delivering a drug-laden vessel. In a subsequent meeting with Fitzwater and his girlfriend, Kristine Osterman, they discussed Hamm's payment and agreed that Knowles would receive a $38,000 fee for representing Hamm. However, Fitzwater later delivered $185,000 in cash to Knowles—$150,000 for Hamm and $35,000 for himself—without explaining the discrepancy in the fee.
After Hamm's arrest, charges against him were dismissed within three weeks to protect the ongoing investigation. Once released, Hamm approached Knowles about his payment. Knowles provided Hamm with $2,500 and advised him to leave Miami, arranging for him to stay at the Omni Hotel. Hamm later chose to go to Las Vegas, where Knowles met him and gave him $50,000 cash. Hamm returned $10,000 to Knowles for expenses and a will preparation.
In the following weeks, Hamm contacted Knowles for the remaining funds, leading Knowles to wire several payments to third parties on Hamm's behalf and directly to an RV dealer for Hamm's RV purchase. Despite these payments, Hamm only received approximately $100,000 of the owed $150,000. During the investigation, Knowles met with high-ranking members of the organization to update them on Hamm's status. Knowles also acknowledged receiving about $30,000 in cash from an unknown individual but failed to report this as required by law.
Squires, a former Miami police officer, operated one of the organization’s smuggling boats, the Becky Ann, and took over for John Miller as Tico Rodriguez’s right-hand man during drug smuggling operations. Squires and another former officer, Danny Wright, later managed the Becky Ann and established an off-load organization in Ft. Myers, allowing the Rodriguez brothers and Controneo to off-load various boats there.
Squires and Wright attempted three smuggling operations using the vessel Becky Ann, beginning with a trip to Belize that resulted in the recovery of about 380 pounds of marijuana. After this, John Rock, who participated in the first attempt, left due to dissatisfaction with the boat. Squires and Wright then enlisted Williams Adams and Gary Powers for two additional ventures. Witnesses identified Squires as a marijuana supplier for Tico Rodriguez, with Miller testifying about Squires arranging for approximately 1,000 pounds of marijuana to be stored in a South Florida warehouse.
On July 24, 1991, a grand jury issued a 41-count Fourth Superseding Indictment against 23 defendants, charging Knowles, Wright, and Squires with conspiracy to import and distribute controlled substances under 21 U.S.C. §§ 846 and 963. Knowles also faced charges for obstruction of justice and being an accessory after the fact under 18 U.S.C. §§ 1510 and 3. Initially, the trial included Knowles, Squires, Wright, and co-defendants Fitzwater and Newman, but Fitzwater and Newman pleaded guilty before the trial began on September 17, 1991. Knowles represented himself, and while all three were convicted of conspiracy, Knowles was acquitted of the substantive charges. Sentences were 324 months for Knowles and 262 months for Wright and Squires.
Knowles argued that the conspiracy had ended with the seizure of the Suntimes on February 3, 1987, prior to his involvement, and claimed insufficient evidence supported his conspiracy convictions. The review of evidence is conducted de novo, favoring the government, and evidence need not eliminate every reasonable hypothesis of innocence. A conspiracy's existence can be inferred from circumstances and does not require direct evidence. Even if a defendant joins a conspiracy after its initiation or plays a minor role, knowledge of its essential features suffices for conviction. The jury's verdict must be supported by reasonable inferences rather than speculation, especially when the government's case is based largely on circumstantial evidence.
A conspiracy's duration lasts until its goals are either achieved or abandoned. Knowles' involvement is atypical as he did not participate in the actual importation or distribution of drugs, nor is there evidence he bought, sold, or transported narcotics. His only connection to the conspiracy arises from representing Hamm. The key issue is whether the jury could reasonably infer that Knowles' actions in this representation furthered the conspiracy. Knowles argues this inference is unreasonable, claiming the evidence merely indicates attempts to conceal the conspiracy. The Supreme Court has determined that concealment does not constitute part of the original conspiracy, which concludes when its central objectives are met. If Knowles’ actions suggest only concealment, his conviction would require reversal.
Two relevant cases provide context. In United States v. Walker, the Ninth Circuit ruled that acts of contract performance and profit division were part of the conspiracy, as they were aimed at achieving its aims, not merely concealing it. United States v. Davis also indicated that distributing conspiracy proceeds occurs during the conspiracy's duration. Knowles contends that the $150,000 he received from Fitzwater does not represent conspiracy proceeds, missing the broader point that it is tied to Hamm's proceeds.
Additionally, evidence indicates Knowles was aware of and participated in the conspiracy. His meetings with high-ranking conspirators and receipt of $185,000 from Fitzwater suggest he was involved. The Fifth Circuit has noted that possession of a large sum of money can imply knowledge of the conspiracy's objectives, particularly as drug traffickers are unlikely to share substantial proceeds with outsiders.
Knowles benefitted from his involvement in the conspiracy by receiving a $35,000 attorney's fee and retaining $50,000 from a total of $150,000 meant for Hamm. Unlike cases where conspiracy convictions were reversed due to insufficient evidence, Knowles' situation involved clear facilitation of the conspiracy through cash transactions that obscured a paper trail. In contrast to Ah Ming Cheng v. United States, where insufficient evidence led to a reversal, Knowles' conviction was upheld due to sufficient circumstantial evidence supporting his active participation in the conspiracy to import and distribute controlled substances.
Knowles contended that the district court erred by not instructing the jury on the potential termination of the conspiracy prior to his involvement, but this argument was reviewed for plain error due to his failure to request such an instruction at trial. The evidence supported the jury's conclusion that Knowles’ actions occurred while the conspiracy was ongoing, and the absence of a sua sponte instruction was not deemed plain error.
Additionally, Knowles challenged the admission of evidence regarding his failure to report cash receipts over $10,000, claiming it constituted impermissible "other crimes" evidence under Fed. R. Evid. 404(b). However, the court found no abuse of discretion in admitting this evidence, as it was integral to understanding the conspiracy and demonstrated Knowles' overt omission related to the charged offenses.
Defendants Squires and Wright claimed the district court erred in denying their motions for severance from co-defendant Knowles during their trial. They argued severance was necessary because their criminal acts were not connected to Knowles, he was not part of their conspiracy, his defense contradicted theirs, and his pro se representation was confusing and prejudicial. The court emphasized that it is reluctant to reverse a severance denial in conspiracy cases, as co-defendants are generally tried together. The decision for severance lies within the district court's discretion and can only be reversed if there is an abuse of discretion, which requires evidence of compelling prejudice against the defendant. The court must consider the potential prejudice of a joint trial versus the public interest in judicial efficiency and whether the jury can make individual guilt determinations for each defendant.
After reviewing the case, the court concluded that the district court did not abuse its discretion. Although Squires and Wright’s actions were distinct from Knowles', they did not demonstrate compelling prejudice. The presence of evidence applicable only to co-defendants does not necessitate severance. Significant portions of the trial focused on each defendant, and the jury was able to differentiate between their actions. Moreover, Squires and Wright failed to prove that Knowles was part of a separate conspiracy. The existence of a single conspiracy is determined by the overall agreement among parties, and a conspirator does not need to know all members to be implicated. Lastly, the argument regarding mutually antagonistic defenses was rejected; for severance to be warranted, defenses must be antagonistic to the point of being mutually exclusive, which was not the case here.
Defenses are deemed antagonistic when a jury must disbelieve a co-defendant's testimony to accept another defendant's claims. Squires and Wright did not present any evidence, and as established in prior rulings, they cannot claim prejudice solely due to their co-defendants' defenses implicating their guilt. Knowles’ self-representation did not compromise the fairness of Squires and Wright's trial. Although the court acknowledged potential prejudice in trials with pro se defendants, it found that most recommended safeguards were implemented, except for standby counsel, which was deemed unnecessary since Knowles was an attorney. Squires and Wright were not significantly prejudiced by the joint trial, as sufficient evidence supported their convictions.
Regarding jury selection, the trial court denied Squires and Wright's request to postpone after co-defendant Fitzwater entered a guilty plea, despite Newman’s potential plea. The appellants argued they were prejudiced by Newman’s absence, but the court provided them a chance to propose curative measures, which they declined, believing it would draw more attention to the issue. The appellate court emphasized that decisions on continuances are at the trial court's discretion and will only be overturned for clear abuse of that discretion, with consideration given to the circumstances surrounding the request.
The district court did not abuse its discretion by denying the appellants' request for a continuance, as there was no assurance that the defendant Newman would plead guilty at that time. After Newman entered the plea, the appellants declined the opportunity to propose a curative instruction and failed to demonstrate any prejudice from the denial of the continuance.
Regarding the introduction of co-defendant witnesses' plea agreements into evidence, Wright contends the court erred by allowing these agreements, which included truth-telling requirements, as they allegedly vouched for the witnesses' credibility. Wright also claims the government improperly vouched for the witnesses during closing arguments and that a witness's testimony about a polygraph requirement was impermissible.
However, the court found these arguments unpersuasive. Generally, truthfulness statements in plea agreements should not be used during direct examination unless the defense has attacked the witness's credibility. Since Wright's counsel did so in the opening statement, the prosecution was permitted to reference the plea agreements. The government's closing argument did not improperly bolster the witnesses' credibility, as it did not indicate a personal belief in their veracity. The statements made by the government, while acknowledging the witnesses' criminal backgrounds, advised the jury to exercise caution in evaluating their testimonies, thus maintaining compliance with the legal standards regarding witness credibility.
The government advocated for a careful analysis of witness testimony, asserting that the prosecutor did not improperly guarantee the witnesses’ credibility. Wright's challenge regarding testimony from a polygraph examination was rejected, as it originated from his own counsel. Concerning Wright's motion for mistrial based on the prosecutor's alleged reference to his Fifth Amendment right, the court found no error. The prosecutor's comments during rebuttal closing did not directly or implicitly reference Wright's decision not to testify. The court clarified that the remarks were more about the defense's failure to address certain evidence rather than a comment on Wright's silence. As such, the court upheld the denial of the mistrial motion, determining that the jury would not necessarily interpret the comments as related to Wright's failure to testify.
In terms of sentencing, Knowles and Squires argued against the application of the sentencing guidelines, claiming a lack of evidence that the conspiracy persisted past their effective date of November 1, 1987. The government countered with testimony indicating drug importation activities continued until at least December 1987, and cited a prior decision affirming the guidelines' application in a related case. However, the court found these arguments unconvincing, particularly as the evidence cited stemmed from testimony that did not definitively support the continued applicability of the guidelines.
Archie Jones was implicated in smuggling cocaine using the boat "OLIVES," which he purchased from Kenny Rodriguez and Jose Sepulveda. He operated from Gilbert Duguay’s house and made two trips in December 1987. However, testimony indicated that Jones was acting independently rather than as part of a wider conspiracy, as there was no evidence supporting that pilots typically purchased their boats or that Duguay's house was used for other organization operations. Furthermore, the primary witness, Govea, clarified that Jones, not the organization, used the house. The court noted that while the Rodriguez organization previously smuggled cocaine, it had shifted to marijuana and hash oil before Jones's activities. The government failed to establish that the conspiracy continued past November 1, 1987, as required. Consequently, the court vacated the defendants' sentences and remanded for resentencing under pre-Guidelines law while affirming their convictions. Other named defendants included various individuals associated with the case.
In United States v. Spradlen, the court references several key precedents regarding conspiracy law, including the necessity for conspirators to actively promote the venture and have a stake in its outcome. The case emphasizes that for a conspiracy to exist, the substantive offense must be committed in furtherance of the conspiracy and within the scope of the unlawful project. If a conspirator's actions do not align with this principle, they may not be guilty of conspiracy. The court also notes that once the main objectives of a conspiracy are fulfilled, subsequent actions, like concealment, do not constitute conspiracy unless they are inherently tied to the conspiracy itself. The excerpt discusses the roles of various members within a drug conspiracy, highlighting that different individuals profit in distinct ways, and underscores the importance of successful contraband importation as a critical element of the conspiracy. The text concludes with an overview of individuals involved in the conspiracy and their fates following law enforcement actions.
In the context of the Eleventh Circuit, a general rule mandates that defendants who are jointly indicted should be tried together, particularly in conspiracy cases. This principle is supported by several case law precedents, including *United States v. Cross* and *United States v. Watchmaker*. The excerpt references multiple cases and legal standards, emphasizing the importance of joint trials to ensure fairness and avoid prejudice. Specific citations highlight the consistent application of this rule across different cases, reinforcing the notion that separate trials may only be justified under exceptional circumstances. Notably, the excerpt also discusses the implications of procedural rules, such as those articulated in *Fed. R. Crim. P. 52(b)*, regarding the handling of errors during trial and the need for a thorough understanding of case law to navigate such issues effectively.
Wright's counsel indicated in the opening statement that witness testimonies against Wright would come from individuals who had entered plea bargains with the government, implying that these witnesses were not credible because they were compensated in some way, such as saving their liberty. The Fifth Amendment protects individuals from being compelled to testify against themselves. Various case citations support the argument regarding the credibility of witnesses with plea deals, including references to the Eleventh Circuit's rulings. Additionally, while Wright did not raise the issue of sentencing guidelines on appeal, the court identified a plain error in their application, leading to the decision to vacate his sentence and remand the case for re-sentencing.
