U.S. v. Gonzales

• Decision Date: 21 February 1991
• Docket Number: Nos. 90-5577,90-5620,s. 90-5577
• Citation: 927 F.2d 139
• Parties: UNITED STATES of America v. Jose GONZALES, a/k/a Jose Menas, Appellant. UNITED STATES of America v. RUIZ, Wilson, Appellant. . Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 139

927 F.2d 139

UNITED STATES of America v. Jose GONZALES, a/k/a Jose Menas, Appellant.

UNITED STATES of America v. RUIZ, Wilson, Appellant.

Nos. 90-5577, 90-5620.

United States Court of Appeals Third Circuit.

Submitted Under Third Circuit Rule 12(6)

Feb. 21, 1991.

Decided March 8, 1991.

Peter J. Scuderi, Philadelphia, Pa., for appellant Jose Gonzales.

Joseph C. Santaguida, Broad & Chestnut Streets, Philadelphia, Pa., for appellant Wilson Ruiz.

Edna B. Axelrod, Chief, Appeals Div., Leslie F. Schwartz, Asst. U.S. Atty., Michael Chertoff, U.S. Atty., Newark, N.J. for appellee.

Before GREENBERG and COWEN, Circuit Judges, and BUCKWALTER, District Judge ^*.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This matter is before the court on appeals by Jose Gonzales and Wilson Ruiz from judgments of conviction and sentence entered in this narcotics case. Appellants were caught in a reverse sting, an operation in which the government agents pretend to be selling rather, than as is the more usual case, buying narcotics from the soon-to-be defendants. From the point of view of the government a reverse sting includes the helpful aspect that it can produce a large amount of money available for a reward to the middle man as the criminals are buyers rather than sellers of the narcotics and their funds can be forfeited.

This is what happened. In the spring of 1989, the United States Customs Service had approximately three tons of marijuana subject to destruction, an inventory available for a large scale reverse sting. While a reverse sting could be set up without a controlled substance on hand, it was useful to have it for cases in which the purchaser wants to see the drugs before the money is produced. The Customs Service was interested in setting up the reverse sting to flush out major drug traffickers and to seize large amounts of assets. Accordingly, agent Julio Velez of the Customs Service advised Mark Vollmer, who had worked for the government before in such matters, to put the word out that there was a large amount of marijuana available for purchase. Vollmer's incentive for cooperating was the opportunity to obtain a reward of up to 25% of the value of any forfeiture.

During the summer of 1989, Vollmer's long-term acquaintance Carmelo Lopez came into a pizzeria where Vollmer was employed. When Vollmer saw him he concluded that Lopez had been using cocaine, an observation Lopez confirmed. Vollmer asked Lopez if he knew anyone who might be interested in purchasing a large quantity of marijuana, a suggestion not offensive to Lopez, as he indicated that he would check out the possibility. Thereafter the proposed sale was switched from marijuana to cocaine.

While there were some initial difficulties in moving ahead with a transaction, eventually, with Lopez's help as an intermediary, Vollmer met with Ruiz, Gonzales and James Hernandez on September 27, 1989. While the circumstances of the meeting are somewhat confusing there is no question but that the discussion involved controlled substances. Furthermore, there were telephone calls from the meeting to Velez who, in an undercover capacity, pretended to be the potential vendor. Thus, this was no innocent gathering.

Thereafter the pace of events quickened. On September 29, 1989, Vollmer drove Ruiz from Philadelphia to Pennsauken, New Jersey, to meet Velez who agreed to sell Ruiz and a partner 57 kilograms of cocaine for $780,000. Ruiz, obviously not a small-time dealer, indicated that he could later make further purchases. The $780,000 purchase, however, was not completed as Ruiz's associates, displaying considerable prescience, were distrustful of Velez, fearing that he might be a police officer. Ruiz, however, was not personally so circumspect as he asked Velez to sell him 25 kilograms for $350,000, a suggestion to which Velez had no difficulty agreeing, as there was not going to be a sale of anything at any price. The sale was to be completed on October 4, 1989.

On October 4, 1989, Lopez and Vollmer first met each other and then they met Ruiz, Hernandez, and Gonzales in Philadelphia at a van parked on a street. Hernandez opened the back of the van so that Ruiz could show the money for the purchase to Vollmer. The five men then drove to Hammonton, New Jersey, in the van, Gonzales driving. During the trip they discussed germane topics such as, ironically, whether Velez thought Ruiz was a police officer, the importance of not speeding, the type of cocaine involved, and the business nature of the trip.

The day's events culminated in the late morning when they met Velez near an exit of the Atlantic City Expressway. After Ruiz displayed a box of cash to Velez, Velez said that there was a great deal of cocaine where they were going so "don't do anything stupid," advice which the five men acknowledged that they understood. At that point surveillance teams moved in and everyone in the van was arrested.

A search revealed that Gonzales was in possession of false identification and sales tax and registration papers which showed that the van was owned by a female residing at his address. The police also found $346,220 in cash in a box in the van and a fully loaded semi-automatic submachine gun in an overhead compartment.

As a result of these events Ruiz, Gonzales, Lopez and Hernandez were indicted for conspiracy to possess and distribute approximately 25 grams of cocaine, 21 U.S.C. Sec. 846, the indictment including a provision noticing that a forfeiture of the van and the cash would be sought under 21 U.S.C. Sec. 853. Thereafter, Ruiz, without the benefit of a plea agreement, decided to cooperate with the government by supplying information regarding his knowledge of the narcotics business and, on November 20, 1989, he pleaded guilty to the original indictment. Ruiz did, in fact, meet with government agents but they rejected his information as they considered it incredible.

On November 21, 1989, a superseding indictment was returned against Gonzales, Lopez, and Hernandez, again charging them with conspiracy to possess and distribute 25 grams of cocaine, and adding a count for carrying a firearm during a drug trafficking offense, 18 U.S.C. Sec. 924(c)(1). Gonzales, Lopez and Hernandez all pleaded not guilty but at an ensuing jury trial were found guilty on the conspiracy count and not guilty on the weapons count.

Ruiz and Gonzales were sentenced on June 28, 1990. Under the Sentencing Guidelines their base offense level was 34. See guidelines Secs. 2D1.4 and 2D1.1. There was a 2-level increase in Ruiz's offense level due to his leadership role in the criminal scheme, id. Sec. 3B1.1(c) but he received a 2-level reduction for acceptance of responsibility. Id. Sec. 3E1.1. While Ruiz sought a further reduction in his offense level predicated on his cooperation with the government, the district court would not allow it as the government had not filed a motion under guidelines Sec. 5K1.1. Predicated on his criminal history category of II and an offense level of 34, Ruiz's guideline range of imprisonment was 168 to 210 months. He was sentenced to 210 months followed by five years of supervised release. Gonzales sought a 4-level reduction as a minimal participant under guidelines Sec. 3B1.2(a) but the court rejected that request, though it did award him a 2-level reduction as a minor participant under guidelines Sec. 3B1.2(b). Thus, Gonzales had an adjusted base level of 32 which, with a criminal history category of IV, resulted in a guideline range of 168 to 210 months. He received the same sentence as Ruiz, 210 months imprisonment followed by five years of supervised release. Gonzales and Ruiz have appealed from the judgments of conviction and sentence thereafter entered on July 5, 1990, and we have consolidated their appeals for disposition. We have jurisdiction under 28 U.S.C. Sec. 1291 and 18 U.S.C. Sec. 3742(a)(2).

Gonzales raises an issue going to the validity of his conviction. He asserts that the government's use of Vollmer who he characterizes as "a contingent fee operative" violated due process of law. ¹ Disposition of this issue requires a detailed description of Vollmer's arrangement with the government. Over a period of several years Vollmer had been providing information to the Drug Enforcement Agency and the Customs Service. While he was otherwise gainfully employed during that period in jobs not related to law enforcement, he was also paid by the government agencies, receiving advances against rewards and expense money. Vollmer explained at trial that "with drug dealers, there is a lot of money. There is a lot of assets seized. When this is seized, there is a forfeiture act. It's turned over to the government and I'm eligible for a percentage."

Vollmer could expect to be paid a maximum percentage of 25% of the assets recovered depending on the actual work in a case and the number of people working on it. The case agent in charge of a case makes the recommendation as to the amount of the reward but the final decision is made by the senior officer in charge. Vollmer typically deals with the case agent and never deals with the senior officer. Vollmer testified that his reward was not dependent on the defendant's conviction, but he could not be paid unless there was a forfeiture to create the fund.

In harmony with his general understanding of his undercover work, Vollmer testified at trial that in this particular case it was not necessary for the defendants to be convicted for him to obtain a reward. But as he did have to appear at the trial and testify to obtain the reward, he understood that if he did not cooperate with the government he would not get paid. Furthermore, he recognized that the amount of the reward depended on the degree of his cooperation.

The government makes a procedural objection to Gonzales's due process argument, as it contends that under Fed.R.Crim.P. 12(b)(1) he was obliged to raise the due process contention prior to...