U.S. v. Gerante, 89-1235

• Decision Date: 04 October 1989
• Docket Number: No. 89-1235,89-1235
• Citation: 891 F.2d 364
• Parties: UNITED STATES, Appellee, v. Joseph GERANTE, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 364

891 F.2d 364

UNITED STATES, Appellee, v. Joseph GERANTE, Defendant, Appellant.

No. 89-1235.

United States Court of Appeals First Circuit.

Heard Oct. 4, 1989.

Decided Dec. 8, 1989.

As Amended Dec. 21, 1989.

Constance L. Rudnick, with whom Richard A. Gargiulo and Gargiulo, Rudnick & Gargiulo, Boston, Mass., were on brief for defendant, appellant.

R.J. Cinquegrana, Asst. U.S. Atty., with whom Wayne A. Budd, U.S. Atty., Boston, Mass., was on brief for appellee.

Before CAMPBELL, Chief Judge, and TIMBERS, ^* Senior Circuit Judge, and TORRUELLA, Circuit Judge.

LEVIN H. CAMPBELL, Chief Judge.

A district court sentenced defendant Joseph Gerante to 97 months in prison for possessing and intending to distribute five hundred grams or more of cocaine. On appeal from the sentence, Gerante alleges various errors, including the district court's basing of its estimate of the quantity of cocaine for sentencing purposes in part upon the discovery of $68,000 in cash at Gerante's residence. We affirm the district court's sentence, but remand so that the court may append its findings and determinations, as to any controverted material, to the presentence investigation report as required by Fed.R.Crim.P. 32(c)(3)(D).

I.

On July 29, 1988, Drug Enforcement Administration (DEA) officers arrested Gerante while he was in possession of 4.98 kilograms of cocaine. Later that day Gerante agreed to a search of his residence, where the officers found, among other things, small quantities of illegal narcotics, five loaded firearms, and $68,000 in United States currency.

At the Arlington, Massachusetts police station, DEA agents questioned Gerante about his drug activities and the origin of the $68,000. A DEA Report of Investigation (DEA report) indicated that in response to these questions, Gerante admitted to the following: (1) for the past six months he had been dealing multi-kilogram quantities of cocaine; (2) during this period of time he had delivered anywhere from two to seven kilograms of cocaine to a certain individual every two to four weeks; (3) on the morning of his arrest he had been in the process of delivering five kilograms to this person; and (4) earlier that week he had received the $68,000 from this person as a payment for a prior cocaine delivery.

A grand jury indicted Gerante on August 18, 1988, charging him with possession with intent to distribute five kilograms or more of cocaine in violation of 21 U.S.C. § 841(a)(1). Pursuant to a plea agreement, on December 19, 1988, Gerante withdrew a pretrial motion to suppress the DEA Report and other items and entered a plea of guilty on a criminal information charging him with possession with intent to distribute 500 grams or more of cocaine.

The probation department (department) then completed a presentence investigation report (PSI), which included the following findings and recommendations. Based in part on the facts contained in the DEA report, the relevant quantity of cocaine for sentencing purposes was 7.98 kilograms. This figure equaled the sum of 4.98 kilograms which was the amount of cocaine found on Gerante, and three kilograms, which was the estimated amount of cocaine Gerante had sold in exchange for the $68,000 found in his residence. According to the Drug Quantity Table, this quantity of cocaine produced a base offense level of 32. Subtracting two points for Gerante's acceptance of responsibility, his total offense level equaled 30. Given Gerante's criminal history category of I, this provided for a sentencing range of 97 to 121 months.

The district court conducted a sentencing hearing on February 23, 1989. At the hearing, the court asked the department representative a series of questions in order to understand exactly how the department had calculated the base offense level of 32. The representative explained that because a kilogram of cocaine had a street value of $16,000 to $20,000, Gerante had sold at least three kilograms in exchange for the $68,000. The representative further explained that the three kilograms were added to the original 4.98 kilograms found on Gerante to ensure that Gerante would be held fully accountable for his relevant conduct in accordance with Guideline § 1B1.3(a)(2) (base offense level for applicable drug offenses should be determined on the basis of "all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction.").

The district court then heard from the government and Gerante. The government agreed with the department's calculations, but Gerante argued for lower base and total offense levels. On the issue of the proper base offense level, Gerante insisted that the Guidelines did not permit the department to convert drug money into an estimated quantity of cocaine. Gerante argued in the alternative that even if such a conversion were appropriate under certain circumstances, such circumstances did not exist in the present case. Contrary to the admissions described in the DEA report, Gerante denied telling DEA agents that the $68,000 had originated from a prior drug transaction. Rather, Gerante said the $68,000 constituted a cash advance for the drugs he possessed when arrested. Accordingly, the only relevant amount of cocaine for sentencing purposes was the amount discovered at the time of his arrest (4.98 kilograms), which corresponded to a base offense level of 30.

With regard to the appropriate total offense level, Gerante contended that the department had failed to reduce the base offense level by two points based on Gerante's "role in the offense," which was that of a minor participant. Starting with a base offense level of 30 (rather than 32) and subtracting four points (rather than two) for his minor role and for his acceptance of responsibility, Gerante argued that his total offense level should equal 26.

After hearing further argument on the relevant issues, the district court held that it would accept the government's recommended base offense level of 32 and its recommended total offense level of 30. The court then sentenced Gerante to 97 months in prison, three years supervised release, and a $15,000 fine. This sentence was at the bottom of the applicable Guidelines range for a total offense level of 30 (and at the top of the range for a total offense level of 28).

II.

Gerante now complains that the district court failed to make a required finding, refused to conduct an evidentiary hearing, relied on insubstantial evidence, and presumed incorrectly that it could convert money from a prior drug sale into an estimated quantity of cocaine. In addition, Gerante argues that the court failed to determine whether his role in the offense was sufficiently minor to require the court to lower his base offense level by two points. We address each contention.

A. The Finding

Under Rule 32(c)(3)(D) of the Federal Rules of Criminal Procedure, if the defendant alleges a factual inaccuracy in the PSI, the district court is required, among other things, to make "(i) a finding as to the allegation, or (ii) a determination that no such finding is necessary because the matter controverted will not be taken into account in sentencing." Fed.R.Crim.P. 32(c)(3)(D). This requirement serves the dual purpose of protecting the defendant's due process rights and providing a clear record for appellate review. See United States v. Bruckman, 874 F.2d 57, 63-64 (1st Cir.1989).

At the sentencing hearing, Gerante argued that the PSI was factually inaccurate in stating that the $68,000 constituted income from a prior drug sale. According to Gerante, the money was merely a prepayment for the 4.98 kilograms seized from him on the 29th of July. Gerante's allegation of a material factual inaccuracy in the PSI required the district court to make a finding on this issue. See id.

We are satisfied that the district court made such a finding. At the hearing, each side presented arguments regarding its view of the proper base offense level. The arguments focused in part on the issue of whether the PSI's conclusion that the $68,000 constituted income from a prior drug sale was factually accurate. After questioning each side, the court accepted the government's recommended base offense level of 30. In doing so, the court implicitly made the required finding that the $68,000 originated from a prior drug transaction. See id. at 64 ("The required finding in Bruckman's case was impliedly made in the denial of his motion to correct the presentence report or to delete the contested material.").

B. Evidentiary Hearing

Guideline § 6A1.3(a) provides in part that "[w]hen any factor important to the sentencing determination is reasonably in dispute, the parties shall be given an adequate opportunity to present information to the court regarding that factor." In resolving such a dispute, the court may sometimes need to conduct an evidentiary hearing. See Guideline § 6A1.3, Commentary.

In the present case, the district court decided against conducting an evidentiary hearing regarding the origin of the $68,000. We review this decision for abuse of discretion. See United States v. Monaco, 852 F.2d 1143, 1148 (9th Cir.1988); United States v. Fatico, 603 F.2d 1053, 1057 n. 9 (2d Cir.1979).

At the sentencing hearing, the government offered to call the author of the DEA report as a witness in order to establish that Gerante had told him that the $68,000 constituted income from a prior drug transaction. Gerante made no specific response to this offer, though he did challenge the accuracy of the DEA agent's statement. Later, the prosecutor attempted to summarize the factual dispute before the court:

[T]here is a factual dispute as to whether or not this court wants to believe that the first and only time this guy delivered five kilograms of coke was this time, ... or whether you believe the statements of the DEA agent that this person at the time of his arrest said he was in the business....

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