U.S. v. Centracchio, s. 91-1742

• Decision Date: 02 October 1992
• Docket Number: Nos. 91-1742,91-1750,s. 91-1742
• Citation: 977 F.2d 1061
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Henry J. CENTRACCHIO and Thomas E. Guth, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1061

977 F.2d 1061

UNITED STATES of America, Plaintiff-Appellee, v. Henry J. CENTRACCHIO and Thomas E. Guth, Defendants-Appellants.

Nos. 91-1742, 91-1750.

United States Court of Appeals Seventh Circuit.

Argued June 4, 1992.

Decided Oct. 2, 1992.

Barry R. Elden, Ross O. Silverman, Asst. U.S. Attys. (argued), Office of the U.S. Atty., Criminal Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee in No. 91-1742.

Kathleen T. Zellner, Daniel F. DeLay (argued), Zellner & Associates, Naperville, Ill., for defendants-appellants in No. 91-1742.

Luis F. Sanchez, Kenneth J. Lowrie, Ross O. Silverman, Asst. U.S. Attys., Office of the U.S. Atty., Criminal Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee in No. 91-1750.

George C. Pontikes, Pontikes & Associates, Sheldon Nagelberg (argued), Chicago, Ill., for defendants-appellants in No. 91-1750.

Before BAUER, Chief Judge, RIPPLE, Circuit Judge, and WOOD, Jr., Senior Circuit Judge.

HARLINGTON WOOD, Jr., Senior Circuit Judge.

Defendants Henry Centracchio and Thomas Guth directly appeal sentences entered against them after a jury found Centracchio and Guth guilty of membership in a narcotics conspiracy and possession with intent to distribute ten kilograms of cocaine. The jury also found Centracchio guilty on other counts of the indictment, but those counts are not relevant to this appeal. The district judge sentenced both men under the United States Sentencing Guidelines. Centracchio was sentenced to concurrent terms of 120 months imprisonment on each count of conviction. Guth was sentenced to concurrent terms of 189 months of incarceration for each count of conviction. Both Centracchio's and Guth's prison sentences are to be followed by five years of supervised release. We affirm the sentences entered against Centracchio, but we remand Guth's sentence on Count Two of the superseding indictment, charging possession of ten kilograms of cocaine with intent to distribute, for a determination of whether Guth's conduct continued beyond the effective date of the Guidelines, November 1, 1987.

Background Facts

In 1983 Thomas Guth was serving a prison sentence at Sandstone Correctional Facility. While he was there he met another inmate, Gary Lewellyn. In October 1986 Guth was released, but he maintained regular contact with Lewellyn by phone. Meantime, Lewellyn was transferred to a federal prison camp at Maxwell Air Force Base in Montgomery, Alabama. Lewellyn was transferred after testifying as a government witness with regard to a murder of a fellow inmate at Sandstone. In February 1985 Lewellyn began to work for the government as a confidential informant.

Guth visited Lewellyn at Maxwell in late June of 1987. Guth told Lewellyn he had developed a narcotics operation in Chicago. Guth also said that a man named Henry Centracchio was involved in the operation and would be able to distribute large quantities of cocaine provided that the quality and price were right. Guth then asked Lewellyn if he knew anyone who could supply Guth's operation with large quantities of cocaine for distribution in Chicago.

Shortly after Guth's visit, Jose Martinez, one of Lewellyn's fellow inmates, told Lewellyn that he would be interested in acting as Guth's supplier once he was released from Maxwell. Lewellyn then arranged a meeting between Guth and Martinez at Maxwell during the summer of 1987. After the meeting, Martinez told Lewellyn that he and Guth had discussed the price and quantity of cocaine that Martinez could supply to Guth after Martinez's release from Maxwell.

Martinez was released to a halfway house in Miami, Florida, in August of 1987. Martinez remained in contact with Guth and Lewellyn, and the three men discussed possible drug transactions. On August 29, 1987, Guth met with Martinez and Robert Valido in Miami. At the meeting, Martinez told Guth to purchase an El Camino with Illinois plates. Martinez testified that all of the men threw in suggestions concerning the cocaine transaction and that Valido indicated he knew how to have a secret compartment installed in an El Camino. The cocaine was to be placed in the compartment in Florida and then the car would be driven to Guth in Chicago.

Guth had trouble locating an El Camino quickly. He was in a hurry to obtain cocaine because he promised to sell some to several buyers. Martinez convinced Jorge Silva, another former Maxwell inmate, to supply Guth with seven kilograms of cocaine. Silva arranged for the seven kilograms to be delivered to Guth in September of 1987. About this same time Guth found and purchased an El Camino and sent it to Florida. The car needed many repairs before it could be driven to Chicago loaded with cocaine.

Guth was very slow in paying Martinez for the seven kilograms he received from Silva. Guth told Martinez the reason for the delay was that the cocaine was of poor quality. To appease Martinez and make him more willing to send more cocaine to Chicago, Guth told Martinez that Henry Centracchio would be in charge of the finances and distribution of any future shipments of cocaine.

On October 10, 1987, Martinez called Lewellyn and told him the El Camino had been repaired and it would be leaving Miami for Chicago with ten kilograms of cocaine secreted in the car by Valido. The ten kilograms of cocaine had been "fronted" to Valido by some of his personal sources. Martinez's family driver, Daniel Gallegos, drove the El Camino loaded with cocaine to Guth in Chicago. Gallegos was not told there was cocaine in the car for security reasons. Guth called Martinez to tell him the El Camino had arrived with the cocaine. Guth also told Martinez he would pay $14,000 per kilogram for the cocaine.

On October 20, 1987, Martinez called Lewellyn and told him that he had not yet received any payments from Guth for the cocaine shipped to Guth on October 10. At this point relations between Martinez and Guth had deteriorated so much that Lewellyn began to act as an intermediary between them. Guth also provided Lewellyn with Centracchio's phone number and explained that Centracchio had been brought in to salvage the operation. Guth told Lewellyn that he had given two or three kilograms of cocaine to Centracchio for him to sell. Finally, Guth told Lewellyn that he would be able to pay Valido's sources $100,000 soon.

Around October 30, 1987, Lewellyn called Centracchio. Centracchio told Lewellyn that Guth had completely mismanaged the operation from a financial standpoint by giving cocaine to people to whom he owed personal debts rather than collecting money for the cocaine. Centracchio also told Lewellyn that he had multiple "units" (kilograms of cocaine) that he would do his best to sell.

Guth eventually paid $100,000 to Valido's sources. This amount represented part of what was owed for the ten kilograms shipped to Guth in the El Camino. Guth still owed Valido's sources $40,000, but he did not pay. As a result, Martinez and Valido were forced to turn over their personal cars to Valido's sources in order to settle Guth's debt.

In late November or early December of 1987, Centracchio travelled in Guth's El Camino to Florida, and he met with Martinez. Centracchio tried to persuade Martinez to give him more cocaine to sell so that Guth's debts could be settled. Martinez refused to supply Centracchio with any more cocaine, and Centracchio returned to Chicago.

Lewellyn was released from Maxwell on January 4, 1988. He flew to Chicago, and Centracchio and Guth met him at the airport. At a coffee shop near the airport, Centracchio told Lewellyn that Martinez and Valido were unhappy with the way the operation had been run in Chicago. Centracchio also told Lewellyn he did not think Martinez and Valido would do any further business unless Lewellyn interceded in their behalf. During 1988 Lewellyn had further conversations with Guth and Centracchio regarding obtaining and selling large quantities of cocaine. Many of these conversations were taped by the government. The tapes were played for the jury at trial and introduced into evidence.

On April 15, 1988, Lewellyn asked Centracchio if he could obtain a half kilogram of cocaine for an alleged friend of Lewellyn's in Des Moines, Iowa. Centracchio obtained the cocaine from James Aquilla and sold it to Lewellyn for $9,000 on May 10, 1988. Centracchio testified that he did not receive any money from the sale. On October 17, 1988, Lewellyn again asked Centracchio to provide him with another half kilogram of cocaine for Lewellyn's supposed friend in Des Moines, Iowa. Centracchio sold to Lewellyn a half kilogram of cocaine for $10,000 on January 25, 1989. Centracchio again obtained the cocaine from Aquilla, and Centracchio also testified that he received no money from the transaction.

Sentencing

At sentencing, the district court considered extensive arguments by the government and the defendants regarding the cumulative weight of the cocaine charged for purposes of determining sentence under the Sentencing Guidelines. There was also argument on whether the Guidelines applied at all to Guth's conduct charged in Count Two of the indictment, but the district court never made a specific finding as to whether Guth's criminal conduct continued beyond the effective date of the Guidelines, November 1, 1987.

The district court found that the government established by a preponderance of the evidence that the cocaine secreted in the El Camino ("El Camino transaction") involved more than four kilograms but less than five kilograms. The El Camino transaction was the subject of Count Two of the indictment, charging possession with intent to distribute ten kilograms of...