U.S. v. Bauer, 93-1165

• Decision Date: 18 March 1994
• Docket Number: No. 93-1165,93-1165
• Citation: 19 F.3d 409
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William John BAUER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 409

19 F.3d 409

UNITED STATES of America, Plaintiff-Appellee, v. William John BAUER, Defendant-Appellant.

No. 93-1165.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 14, 1993.

Decided March 18, 1994.

Counsel who presented argument on behalf of the appellant was Pamela A. Wilk, Philadelphia, PA. Additional attorneys appearing on the brief were Peter Goldberger, James H. Feldman, Jr. and Alan Ellis.

Counsel who presented argument on behalf of the appellee was Nathan P. Petterson, Minneapolis, MN.

Before RICHARD S. ARNOLD, Chief Judge, CAMPBELL, ^* Senior Circuit Judge, and LOKEN, Circuit Judge.

LOKEN, Circuit Judge.

William John Bauer pleaded guilty to cocaine distribution offenses. The presentence report (PSR) charged him with conspiring to distribute forty kilograms of cocaine found hidden in his brother's car after they were arrested. Bauer objected, contending that his reasonably foreseeable involvement in the conspiracy was limited to the two kilograms he had agreed to distribute. After an evidentiary hearing, the district court ¹ found that Bauer had conspired to distribute more than fifteen kilograms of cocaine and sentenced him to 170 months in prison plus a $2,500,000 fine. Bauer appeals this sentence. We vacate only the fine and remand.

I. The Prison Term--A Foreseeable Drug Quantity Issue.

On July 7, 1992, Bauer and his brother James were suspected of drug trafficking. Surveilling agents saw the Bauers leave a garage that James had rented from his cousin, a confidential informant, to store drugs. After the brothers drove away in Bauer's rented car, agents went in the garage and viewed the videotape from a hidden motion-sensitive camera. The tape showed James removing two one-kilogram packages of cocaine from a hidden compartment in his car. Bauer picked up the two packages and took them to another part of the garage, where the cocaine was weighed and repackaged before the brothers departed.

The agents arrested the Bauers a short time after viewing the tape. When arrested, Bauer had 2.6 grams of cocaine, $1,000 cash, and a pager in his possession; his rental car yielded one-quarter kilogram of cocaine, $5,000 cash, and wrapping paper from at least two one-kilogram packages. Bauer admitted selling one kilogram of cocaine after leaving the garage but before his arrest. The agents then searched the informant's garage, where they found electronic scales, cocaine packaging materials, and James's car. A search of the car uncovered forty kilograms of cocaine in the hidden compartment from which James had earlier removed the cocaine that Bauer admitted agreeing to distribute. The principal issue at sentencing was whether Bauer's relevant conduct for sentencing purposes should include these additional forty kilograms.

At the sentencing hearing, Bauer testified that he had been a drug dealer in the 1970's but quit the business in 1981. In June 1992, James visited Bauer's home in San Francisco and asked him to help sell two kilograms of cocaine while attending a family reunion in Minneapolis. Bauer agreed and James left for Los Angeles. When the brothers reunited in Minneapolis on July 7, James revealed for the first time that he had picked up a total of forty-two kilograms in Los Angeles and had been unable to deliver the other forty kilograms to his contacts in Pennsylvania. Based upon this testimony, Bauer argued that, for conspiracy sentencing purposes, the forty kilograms were not "reasonably foreseeable acts ... of others in furtherance of the jointly undertaken criminal activity." U.S.S.G. Sec. 1B1.3(a)(1)(B).

The district court rejected Bauer's testimony as "wholly incredible." It found that the government had proved "well beyond a simple preponderance of the evidence" that Bauer conspired to possess and distribute in excess of fifteen kilograms of cocaine. This quantity determination resulted in a base offense level of 34, see U.S.S.G. Sec. 2D1.1(c)(5), and a Guidelines sentencing range of 151 to 188 months in prison.

On appeal, Bauer argues that the district court's quantity determination is erroneous as a matter of law. Bauer concedes that he knew before picking up the two kilograms of cocaine that James had forty-two kilograms in his possession. Bauer also concedes, as he must, that we will not overturn the district court's finding that Bauer's testimony was not credible. Nevertheless, Bauer argues, the government failed to prove that the additional forty kilograms were part of his "jointly undertaken criminal activity," and therefore the sentencing record does not support the district court's conclusion that Bauer knowingly and intentionally entered into a conspiracy to possess and distribute in excess of fifteen kilograms of cocaine. We disagree.

The sentencing record included the following evidence supporting the district court's quantity determination: (i) the July 7 videotape showing James and Bauer taking two kilograms of cocaine from the forty-two-kilogram stash; (ii) taped conversations with James and another brother, Loren Bauer, in which both stated that Bauer's approval was needed before the confidential informant could become a courier for the conspirators; (iii) the seizure of drug notes from a convicted drug dealer that referenced both James and Bauer; and (iv) Bauer's admission that he was a long-time drug dealer, combined with expert testimony that one could not quickly distribute two kilograms of cocaine in Minneapolis after being out of the business more than ten years. We agree with the district court that this evidence, combined with its finding that Bauer's testimony was wholly incredible, ² was more than sufficient to justify the finding that Bauer was a long-term cocaine dealer who had conspired to possess and distribute more than 15 kilograms of cocaine. Thus, the district court's quantity determination was not clearly erroneous. Compare United States v. Ortiz-Martinez, 1 F.3d 662, 675 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 355, 126 L.Ed.2d 319 (1993); United States v. Adipietro, 983 F.2d 1468, 1476-77 (8th Cir.1993).

II. The Fine.

In addition to sentencing Bauer to 170 months in prison, the district court imposed a $2,500,000 fine, explaining:

Finally, I tell you, sir, that this Court finds it appropriate to impose a dollar fine of two and a half million dollars. And that sum is a committed ³ fine, and where and when the United States finds your assets or if the United States has an opportunity to seize them either within or beyond the borders of this country, they may seize those in satisfaction of that, and that will be ordered.

The court's Judgment provides that the committed fine is payable in full immediately, but that any interest requirement, see 18 U.S.C. Sec. 3612(f), is waived because "[t]he court has determined that the defendant does not have the ability to pay interest."

The district court erred in imposing a committed fine because "the Guidelines do not provide for committed fines." Lincoln v. United States, 12 F.3d 132, 133 (8th Cir.1993). ⁴ In addition, Bauer argues that we must vacate the fine because the district court failed to make the findings required by U.S.S.G. Sec. 5E1.2 and our decisions in United States v. Walker, 900 F.2d 1201, 1207 (8th Cir.1990); United States v. Cammisano, 917 F.2d 1057, 1064 (8th Cir.1990); and United States v. Granados, 962 F.2d 767, 773-74 (8th Cir.1992). The Guidelines provide that, in determining the amount of a fine, the court "shall consider," among other factors, the defendant's ability to pay "in light of his earning capacity and financial resources," and "the burden that the fine places on the defendant and his dependents relative to alternative punishments." Sec. 5E1.2(d)(2), (3). Bauer correctly notes that the district court did not expressly find that he had the ability to pay a $2,500,000 fine--indeed, the court's decision to waive the statutory interest requirement suggests a contrary finding--nor did the court explain how it took this and the other Sec. 5E1.2 factors into account in determining the amount of the fine.

An initial question is whether this issue was properly preserved. A "claim concerning the imposition of [a] fine, which was not presented to the district court and was raised for the first time on appeal in [a] reply brief, is not properly before the court." United States v. Chippas, 942 F.2d 498, 500 (8th Cir.1991). In this case, Bauer specifically objected to the "Financial Situation" portions of his PSR, and he testified at the sentencing hearing that the PSR inflated his net worth. Although he also should have objected specifically to the district court's imposition of the fine, and to the court's failure to make supporting findings under Sec. 5E1.2, we conclude that Bauer adequately preserved the issue for appeal.

Turning to the merits of this issue, the government presented evidence at sentencing that Bauer made capital expenditures of $1,044,000 between 1981 and 1991, a period in which the total adjusted gross income on his tax returns was $304,756. There was evidence that Bauer traveled extensively abroad, maintaining drug contacts in Colombia and financial accounts with European institutions. Bauer admitted saving $500,000 from his drug trafficking by 1980, which he placed in Cromwellian Ltd., a shell corporation registered in the Isle of Man. He also admitted purchasing real estate in Argentina, Florida, and Minnesota. Bauer vigorously disputed the government's portrayal of his present net worth, but his testimony shed little light on his true financial condition. The district court was entitled to conclude, and no doubt did conclude, that Bauer warranted a larger fine because he has failed to disclose his financial condition. See Sec. 5E1.2, comment. (n. 6).

The sentencing record in this case was clearly sufficient to warrant imposition of a relatively substantial fine. ⁵ We have frequently upheld such fines based upon quite...