United States v. Miguel Pagan, Sr. And Francisco Herrera-Ruiz

Citations: 196 F.3d 884; 1999 U.S. App. LEXIS 30015; 1999 WL 1044507Docket: 98-1228, 98-3906

Court: Court of Appeals for the Seventh Circuit; November 18, 1999; Federal Appellate Court

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Miguel Pagan and Francisco Herrera-Ruiz were found guilty of drug conspiracy, specifically involving cocaine, heroin, and marijuana, using Pagan's auto dealership, Pagan Auto Sales, as a distribution center. Pagan was additionally convicted of possession of cocaine and heroin with intent to distribute and income tax evasion for failing to file tax returns for 1993 and 1994. The investigation by the IRS and DEA revealed that drug orders were placed through the dealership, which facilitated drug trafficking from Mexico to the Chicago area. A federal grand jury indicted them alongside another dealer, Carlos Santiago, in a 24-count indictment. The government relied on circumstantial evidence, including monitored phone calls and drug purchases made by DEA agents from Santiago, which linked the dealership to the drug operations. Ultimately, while the convictions stood, Herrera-Ruiz was granted a remand for re-sentencing.

DEA Task Force Officer Matthew Argadine coordinated an undercover operation utilizing informant Manuel Aleman, who had connections with Pagan and frequented Pagan Auto Sales. Aleman received $10,500 for participating in controlled drug purchases, which were primarily videotaped without audio. He bought cocaine from Herrera-Ruiz on multiple occasions in 1996, including outside Las Brisas Restaurant and at Pagan Auto Sales. Although a meeting between Aleman and Pagan on February 14 was recorded, the drug transaction was not captured. Aleman's testimony, corroborated by pen register data showing 66 calls between Herrera-Ruiz and the dealership, detailed the drug operation's inner workings involving Pagan, Herrera-Ruiz, and the Diaz brothers, who transported drugs from Mexico. A truck containing significant quantities of cocaine and marijuana was seized by authorities, prompting a warning from Herrera-Ruiz to Aleman about increased scrutiny.

Upon his arrest on August 29, 1996, Pagan waived his Miranda rights and admitted to knowing the truck's driver, Victor Quinones, and facilitating drug distribution. Pagan identified the Diaz brothers as key distributors and recognized "Tito" (Santos Torres, Jr.) as his supplier, with pen register evidence linking Torres to the dealership. Further connections were established through numerous calls and financial transactions involving Quinones. This evidence led to guilty verdicts against Pagan and Herrera-Ruiz on April 24, 1997. Pagan received a 360-month prison sentence and a $25,000 fine, while Herrera-Ruiz was sentenced to 324 months and a $10,000 fine, with both sentences reflecting their respective roles in the drug operation as determined by the Sentencing Guidelines.

Defendants Pagan and Herrera-Ruiz challenge their convictions for conspiracy to distribute drugs, arguing that the evidence presented at trial was insufficient to support the verdicts. To succeed, they must demonstrate a complete lack of evidence from which a jury could find the essential elements of the charges beyond a reasonable doubt. The government must establish both the existence of a conspiracy and the defendants' knowing agreement to join it, which can be proven through circumstantial evidence.

For Herrera-Ruiz, the evidence included 66 phone calls to Pagan Auto Sales, Aleman's testimony regarding his collaboration with Pagan and the Diaz brothers, and his drug sales on the dealership's premises. Herrera-Ruiz claims Aleman's reliability is questionable since he is a drug dealer who was compensated for his testimony. However, despite these concerns, Aleman's testimony was not deemed legally unreliable, and the jury had the discretion to assess its credibility.

The circumstantial evidence, combined with Aleman's testimony, was sufficient to support the jury's inference of a conspiracy involving Herrera-Ruiz. Similarly, Pagan's argument regarding insufficient evidence for his conviction of possession with intent to distribute also relies on Aleman's testimony, which the jury could reasonably believe despite the absence of direct evidence such as a videotaped transaction. Thus, both convictions were upheld based on the available evidence.

The conspiracy case against Pagan relied on multiple pieces of evidence, including pen register entries, Aleman's testimony, and Pagan's confession at arrest. Pagan contested the sufficiency of the pen register evidence, arguing it did not definitively link him to the calls made, noting that Pagan Auto Sales was a public location. However, DEA Task Force Officer Peter Hojnicki testified that Pagan confessed to facilitating connections between drug distributors and customers, acknowledging his supplier, Torres, and awareness of a drug seizure. Aleman's detailed testimony further supported the conspiracy charge, outlining the operational structure that tied back to Pagan, making attempts to discredit him ineffective.

In a separate matter, Herrera-Ruiz claimed his conviction should be overturned because Aleman's testimony violated 18 U.S.C. § 201(c)(2) due to his paid status as a government informant. The court rejected this argument, affirming that the district court acted within its discretion in allowing Aleman's testimony. Additionally, Herrera-Ruiz sought a mistrial based on Agent Argadine's testimony, which mentioned Herrera-Ruiz's post-Miranda statements about drug locations. The court denied the mistrial but struck the testimony from the record, instructing the jury to disregard it. Herrera-Ruiz argued this was insufficient, particularly regarding potential violations of his rights under the Vienna Convention on Consular Relations. The court found no evidence that the mention of Miranda rights impacted the trial's fairness or that it would have alerted defense counsel to any issues related to consular rights, thus affirming the denial of the mistrial.

Pagan and Herrera-Ruiz challenge their sentences, specifically the drug quantities used to determine their offense levels under U.S.S.G. sections 1B1.3 and 2D1.1(c). According to U.S.S.G. sec. 1B1.3(a)(1), a defendant is accountable for all contraband they directly handled and for all reasonably foreseeable quantities involved in jointly undertaken criminal activity. The court found that both defendants were responsible for large quantities of drugs, including 810 kilograms of cocaine and 504 pounds of marijuana found in a seized truck.

They argue that the record does not support this inclusion in their offense levels. The determination of drug quantities is a factual finding reviewed for clear error, requiring a sufficient evidentiary basis to support the findings by a preponderance of the evidence. The district court assigned Pagan a base offense level of 38 based on 813.86 kilograms of cocaine, 1 ounce of heroin, and 515 pounds of marijuana, increasing it by four levels for his leadership role, leading to a total level of 42 and a sentence range of 360 months to life. Herrera-Ruiz was assigned a base level of 38 based on 812.16 kilograms of cocaine and 515 pounds of marijuana, increased by three levels for his supervisory role, resulting in an adjusted level of 41 and a sentence range of 324 to 405 months. Importantly, the drugs found in the truck significantly influenced their sentences; without including these quantities, Herrera-Ruiz's adjusted level would have been 28, yielding a range of 78 to 97 months.

Evidence supporting Pagan's accountability for the Texas shipment includes his acknowledgment of the DEA seizure, testimony indicating the drugs were destined for his business, corroborating bank records, aerial photographs of similar trucks at his dealership, and his status as a lienholder on other vehicles used by associates. Therefore, the court concluded that it was not clear error to hold Pagan accountable for the seized drugs.

Herrera-Ruiz cannot be held responsible for the total drug quantities handled by the conspiracy beyond his individual role as a street-level dealer. The court clarified that accountability is based on what a member could foresee in relation to their involvement, emphasizing that mere connections to a larger operation do not suffice for responsibility. The government failed to provide evidence that linked Herrera-Ruiz to the broader conspiracy beyond his own actions. Consequently, the court vacated his sentence and remanded for re-sentencing.

Additionally, Herrera-Ruiz received a sentencing enhancement for an alleged managerial role in a conspiracy involving five or more participants, which he did not dispute. The guidelines necessitate evidence of actual influence over other participants to support such an enhancement. Being a distributor, even a large one, is insufficient without demonstrating control or influence. The assessment of a defendant's role should consider decision-making authority, participation in the offense, recruitment of accomplices, claims to a larger share, planning involvement, the nature of the illegal activity, and the degree of control exercised over others.

Evidence is necessary to classify a defendant as a "manager" or "supervisor" in a criminal enterprise. During sentencing, the district judge requested proof of Herrera-Ruiz's managerial role. The government claimed he was a manager because he sold large quantities of high-quality drugs and had direct dealings from an auto dealership, indicating a level of trust from Pagan. In contrast, a co-defendant, Santiago, was not considered a manager due to his lack of close ties to Pagan. However, the court found the government's justification inadequate, noting a lack of evidence that Herrera-Ruiz directed others, recruited participants, or received profits beyond his own sales. Mere trust from Pagan was insufficient for managerial classification. Consequently, while the convictions of Pagan and Herrera-Ruiz were affirmed and Pagan's sentence upheld, Herrera-Ruiz's sentence was vacated due to errors in drug quantity calculations and managerial role determination, leading to a remand for re-sentencing.