United States v. Daniel T. Sherman, Also Known as Mike Wilson, Also Known as Mike Willson, Also Known as Mark Willson, United States of America v. Fortino E. Diaz, United States of America v. Robert R. Lohr, United States of America v. Vanessa R. Lohr

Citations: 262 F.3d 784; 2001 U.S. App. LEXIS 18775Docket: 01-1271

Court: Court of Appeals for the Eighth Circuit; August 21, 2001; Federal Appellate Court

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Daniel Sherman, Fortino Diaz, Robert Lohr, and Vanessa Lohr appealed their convictions for conspiracy to distribute cocaine and methamphetamine, along with aiding and abetting money laundering. The Eighth Circuit Court of Appeals affirmed the convictions and sentences, which included prison terms of 108 months for Sherman, 360 months for Diaz, 262 months for Robert Lohr, and 24 months for Vanessa Lohr. The jury also ordered the forfeiture of the Lohr home, as it was used in the drug conspiracy. 

The evidence indicated that between 1992 and 1998, Diaz operated a California-based drug supply network for distributors in Minnesota, including Sherman and the Lohrs. Drugs were typically shipped via Federal Express, and payments were made through cash sent by Federal Express or smaller amounts wired through Western Union. Linda Bay, a co-conspirator who testified for the government, purchased drugs from both Diaz and the Lohrs and was involved in the distribution network. 

The trial revealed extensive money laundering activities, with over $100,000 traceable to Sherman and $278,000 to the Lohrs, despite their attempts to disguise the cash as legitimate business income. Vanessa Lohr played a significant role in logistics, facilitating drug pickups and shipments. Law enforcement discovered $25,000 in cash and drug-related Federal Express packages at the Lohr residence, alongside Bay's testimony about a drug stash kept by Robert Lohr.

Count 1 of the indictment charged the four defendants with conspiracy to distribute over five kilograms of methamphetamine and more than one kilogram of cocaine, but the jury was instructed that a conviction could occur even without finding the specific drug quantities beyond a reasonable doubt. The verdict did not specify the drug amount. All defendants contested the sufficiency of evidence supporting their conspiracy and aiding and abetting money laundering convictions. Sherman, Diaz, and Robert Lohr challenged the drug quantity calculations during sentencing, while Diaz contested his designation as a leader or organizer of the conspiracy. Sherman and Diaz also disputed other convictions, and Robert and Vanessa Lohr contested the forfeiture of their home.

Despite the challenges, the evidence at trial was deemed sufficient to establish both the conspiracy and the defendants' participation. The legal standard requires proof of (1) the existence of a conspiracy, (2) the defendant's knowledge of it, and (3) intentional participation. The government may demonstrate a conspiracy through circumstantial evidence or inferences from the defendants' actions. Mere presence at a drug sale is inadequate for conspiracy membership, but slight evidence linking a defendant to the conspiracy can suffice once the conspiracy is established. Evidence of multiple sales of resale quantities of drugs can support a conspiracy conviction, distinguishing it from cases involving sales of small amounts for personal use.

Defendants argue that the absence of a formal distribution agreement negates the existence of a drug distribution conspiracy, claiming their interactions were merely informal buyer-seller relationships. However, the court disagrees, finding sufficient evidence of a conspiracy based on multiple drug transactions, telephone records, financial data, and attempts to conceal illegal activities. Specifically, over $100,000 was wired under Sherman's name to Fortino Diaz and associates between 1993 and 1996, with evidence of Sherman's communications with key conspirators. Sherman's liability extends to the actions of his co-conspirators, even if he did not directly distribute methamphetamine. 

Diaz and Robert Lohr challenge the sufficiency of evidence for the conspiracy involving methamphetamine and cocaine. However, testimony from Linda Bay and other evidence confirm the existence of a conspiracy and their active roles within it. Vanessa Lohr contends she was merely a cocaine user, not a conspirator, but evidence of her actions in sending money and retrieving drugs supports the jury's finding of her involvement in the conspiracy.

The court concludes that the jury's verdicts on drug charges are well-supported. Regarding sentencing, Sherman, Diaz, and Robert Lohr assert that their sentences violated the Apprendi v. New Jersey ruling due to reliance on a preponderance of evidence for drug quantities. Diaz also disputes the role enhancement in his sentence as a leader of a conspiracy involving more than five individuals.

Under Apprendi, any fact that increases a crime's penalty beyond the statutory maximum must be proven to a jury beyond a reasonable doubt. Judicial determination of drug quantity is permissible if the sentence does not exceed the statutory maximum for an indeterminate quantity of the drug. Defendants did not raise Apprendi arguments before the district court; thus, their claims are reviewed for plain error. For multiple counts, a sentence exceeding the statutory maximum does not constitute plain error if the Federal Sentencing Guidelines necessitate consecutive sentences.

Sherman was sentenced to 108 months, which is within the 240-month statutory maximum for cocaine. Diaz received a 360-month sentence for conspiracy, which exceeds the maximum, but does not constitute plain error as consecutive sentencing was required under the Guidelines. Lohr was sentenced to concurrent 262-month terms for conspiracy and money laundering, both exceeding the statutory maximum, yet the district court's requirement for consecutive sentencing negates plain error. The court found no reversible error in the sentencing determinations or in the government's evidence supporting the charges against Sherman and Diaz.

Additionally, Diaz contested the enhancement of his sentence based on his role as a leader or organizer in the conspiracy. The enhancement typically applies to those who arrange for intermediaries to sell drugs. Evidence showed Diaz had ultimate control over drug supply and distribution, including directing actions in multiple states. Therefore, the district court's finding that Diaz was a leader or organizer was not clearly erroneous.

The defendants challenge their convictions for aiding and abetting money laundering under 18 U.S.C. 1956(a)(1)(A) and 2, arguing that the indictment improperly charged them with multiple acts of money laundering in one count, violating the precedent set in United States v. Prescott, which mandates separate counts for each act. However, the objection to the indictment was waived prior to trial, thus precluding it from being raised on appeal.

The defendants, Robert and Vanessa Lohr, further argue that the government's evidence was insufficient to prove that the funds in question were drug proceeds or that they knowingly participated in laundering activities. Under 18 U.S.C. 1956(a)(1)(A), the government must prove that the defendants knowingly engaged in financial transactions involving drug proceeds with the intent to promote drug distribution or with knowledge of the intent to disguise the source of those proceeds. Aiding and abetting under Section 2 requires proof that the defendants actively engaged in and sought to further the money laundering scheme.

The Lohrs presented expert testimony suggesting the cash transfers could originate from legitimate income sources, potentially creating reasonable doubt. However, the government effectively discredited this testimony, presenting evidence that over $278,000 passed through the Lohrs in connection with the conspiracy. They demonstrated efforts to conceal cash transactions through gambling and purchasing items with cash, alongside substantial evidence of drug transactions involving Robert Lohr and Diaz. Thus, the jury could reasonably conclude that the Lohrs were involved in converting cash from drug sales to further the conspiracy.

Vanessa Lohr argued that the government did not prove her awareness of the source of transferred funds, even if they were drug proceeds. However, evidence indicated that she was aware of the drug trafficking operation and profited from it, suggesting she knew the cash transfers were unrelated to legitimate business activities. Consequently, the government provided sufficient evidence to support the convictions.

Regarding the forfeiture of the Lohr home under 21 U.S.C. § 853(a)(2), Vanessa Lohr contended that the surrounding property should not be included since it was not used in the drug conspiracy. However, established case law permits the forfeiture of an entire parcel if any part facilitated drug offenses. Additionally, she claimed the forfeiture constituted an excessive fine under the Eighth Amendment, but the value of the forfeited property was within acceptable limits relative to potential fines, indicating it was not excessive.

Robert Lohr argued that the forfeiture proceeding was invalid due to his absence, which resulted from an administrative error. Although his attorney waived his presence, Robert contended this waiver violated his rights under Federal Rule of Criminal Procedure 43. Nevertheless, the court found any potential error to be harmless, noting that the jury's separate verdicts for forfeiture and Robert's conviction on conspiracy charges undermined his claim of innocence regarding the property. Therefore, the determination of forfeiture remained valid, regardless of the potential procedural violation. The judgment was ultimately affirmed.