U.S. v. Morrow

• Citation: 914 F.2d 608
• Decision Date: 24 September 1990
• Docket Number: No. 90-6013,90-6013
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. George Richard MORROW, Jr., a/k/a Richard Morrow, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 608

914 F.2d 608

UNITED STATES of America, Plaintiff-Appellee, v. George Richard MORROW, Jr., a/k/a Richard Morrow, Defendant-Appellant.

No. 90-6013.

United States Court of Appeals Fourth Circuit.

Argued July 17, 1990.

Decided Sept. 24, 1990.

James Elliot Ferguson, II, Anita S. Hodgkiss, on brief, Ferguson, Stein, Watt, Wallas, Adkins & Gresham, Charlotte, N.C., for defendant-appellant.

Max Oliver Cogburn, Jr., Asst. U.S. Atty., Thomas J. Ashcraft, U.S. Atty., on brief, Asheville, N.C., for plaintiff-appellee.

Before ERVIN, Chief Judge, and PHILLIPS and MURNAGHAN, Circuit Judges.

MURNAGHAN, Circuit Judge:

George Richard Morrow, Jr. was accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Secs. 1962(a) & (d), by participating in a conspiracy to manufacture, possess, and distribute methamphetamine and then to invest the proceeds of the operation in real estate acquisitions. On February 2, 1987, Morrow entered a guilty plea pursuant to North Carolina v. Alford, 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed.2d 162 (1970), pleading guilty though maintaining his innocence. Morrow pled guilty to Count I of a forty-three count indictment in return for the government's agreement to dismiss the remaining counts. The district court sentenced Morrow to a term of twelve years in prison and fined him $10,000. Thereafter, Morrow filed an ultimately unsuccessful motion under Fed.R.Crim.P. 35 for a reduction of his sentence. On August 3, 1988, Morrow filed a motion pursuant to 28 U.S.C. Sec. 2255 to vacate his sentence. United States District Court Judge Robert Potter affirmed the magistrate's denial of Morrow's motion and accepted the magistrate's memorandum and recommendation in its entirety. Morrow has appealed charging that there were insufficient facts before the district court from which it could find a factual basis for entering judgment on his guilty plea. Morrow further charges that, because the government did not inform the court that his plea was linked to that of another codefendant in the conspiracy, his father, George Richard Morrow, Sr., the trial court could not make a proper inquiry into the voluntariness of his plea.

I.

At the same Rule 11 proceeding at which Morrow pled guilty, codefendants George Richard Morrow, Sr. (hereinafter Morrow, Sr.), John Ernest Dean, and Harold Hugh Dean also entered guilty pleas. Both the Morrows maintained their innocence despite their pleas.

At the hearing Dallas McKnight, a special agent with the Internal Revenue Service (IRS), testified that his investigation had revealed the existence of nine methamphetamine laboratories operating in both North and South Carolina between 1979 and 1984. During the course of the investigation, McKnight interviewed at least six of the people who worked in the labs. McKnight testified that "almost all" of the people interviewed reported that the operation involved three parts: manufacture of the drug, distribution of the drug, and laundering of the proceeds. The people McKnight interviewed identified the Deans as being in charge of the manufacturing end of the operation and the Morrows as being the money launderers. ¹ Another special agent with the Criminal Investigation Division of the IRS, James E. Stephens, Jr., testified that only one of the witnesses interviewed, Billy Ray Thackston, outlined what interests each member of the conspiracy had in the money from the operation. ²

During the course of the conspiracy, the labs produced approximately 300 pounds of methamphetamine. Government investigators traced almost a million dollars in drug proceeds to Morrow, which Morrow had invested. Morrow has admitted that he invested the proceeds, but has denied knowing that the money was from the distribution of drugs.

Using the legal services and offices of Morrow, Sr., a lawyer, Morrow, Jr. set up more than twelve dummy corporations to hold some of the assets. The names listed on the state forms as the incorporators of those organizations included George R. Morrow, Sr.'s secretaries, Richard Morrow's girlfriend Karen Storm, who was also the niece of John and Harold Dean, and Sonny Cole, the alleged distributor. Listed as directors of the corporations, in addition to Richard Morrow and Sonny Cole, were employees and employees' relatives of George Morrow, Sr.

The corporations purchased real estate for investment purposes. Several of the investment properties were used as methamphetamine lab sites. When questioned by government investigators about a 95-acre site her corporation, Upfront Corporation, had bought, Karen Storm stated that, prior to her appearance before the grand jury investigating the conspiracy, Morrow instructed her to lie, ³ and to state that she had bought the property for investment purposes. Another witness and worker at one of the lab sites, Larry Doyle Campbell, testified that the 95-acre site was to be a permanent, underground, bunker-type drug laboratory.

The trial court questioned each defendant individually as to the voluntariness of his plea, as well as his understanding of the nature of the charges against him. The court found that all defendants had entered their pleas voluntarily with the understanding of the nature of the charges and the consequences of their pleas. Although the court was not so advised, the Morrows' pleas were linked together. Morrow, Jr.'s guilty plea to only one of 43 counts would not be accepted by the government unless his father also pleaded guilty. ⁴

Morrow, Jr. signed a "Stipulation of Factual Basis" which stated that:

The parties hereto agree that the following shall constitute a factual basis for the plea of guilty of the Defendant Richard Morrow to Count I in the Bill of Indictment:

It is stipulated that the Government's evidence would tend to show that Richard Morrow invested money derived from proceeds of a methamphetamine operation in land acquisitions. However, the evidence will show that Richard Morrow at no time manufactured or sold methamphetamine and was never in the presence of a methamphetamine laboratory. The Governments [sic] evidence will further tend to show that the enterprise had substantial income, but the Government has no knowledge as to whom this income should be attributed.

Morrow acknowledges that the primary purpose of the stipulation was to protect him at the sentencing stage of the proceeding by getting the government on record that Morrow did not participate in the manufacturing and distribution activities of the enterprise. The stipulation, however, establishes that he did invest the proceeds.

II.

As noted above, Morrow pleaded guilty pursuant to North Carolina v. Alford, supra. In Alford, the Supreme Court held that a defendant "may voluntarily, knowingly, and understandingly consent to the imposition of a prison sentence even if he is unwilling or unable to admit his participation in the acts constituting the crime." 400 U.S. at 37, 91 S.Ct. at 167. Acceptance of such pleas is within the discretion of the trial judge. Id. at 38, n. 11, 91 S.Ct. at 168, n. 11. Because an Alford plea is a variation of a guilty plea, a court accepting such a plea must comply with the basic requirements outlined in Fed.R.Crim.P. 11. At issue here is the amount of evidence necessary to establish the factual basis for the plea pursuant to Fed.R.Crim.P. 11(f). Morrow charges error in the trial court's acceptance of his plea, alleging the strong factual basis for the plea was lacking.

The trial court has wide discretion in determining whether a factual basis exists. See United States v. Lumpkins, 845 F.2d 1444, 1451 (7th Cir.1988) (it was within the judge's discretion to determine whether letters were written by the defendant within the statute of limitations period and could form the factual basis of an Alford plea); United States v. Pinto, 838 F.2d 1566, 1569 (11th Cir.1988) (per curiam) (within district court's discretion to deny defendant's motion to withdraw plea when facts in indictment satisfied district judge that defendant had defrauded government); see also United States v. Dayton, 604 F.2d 931, 938 (5th Cir.1979) (en banc) (district court need only be subjectively satisfied that there was a factual basis for acceptance of the plea; decision reviewed for an abuse of discretion), cert. denied, 445 U.S. 904, 100 S.Ct. 1080, 63 L.Ed.2d 320 (1980).

Rule 11(f) "requires an adequate factual basis for a guilty plea; it does not require the judge to replicate the trial that the prosecutor and defendant entered a plea agreement to avoid." Lumpkins, 845 F.2d at 1451. At the Rule 11 hearing, the trial court identified the elements that must be established to prove the violation of the RICO conspiracy statute. ⁵ The court articulated that the government must prove that "each defendant knowingly became a member of the conspiracy." In response to the court's question, Morrow stated that he understood the charge. Morrow now argues that both the stipulation he entered with the government and the information presented at the hearing are insufficient to establish a factual basis for the crime because both fail to indicate that he invested the money knowing that it came from the illegal proceeds of drug manufacturing and distribution activities. Additionally, he charges that the stipulation does not demonstrate the existence of an agreement that affected interstate commerce.

The factual basis required in the context of proving that Morrow was a member of the conspiracy involves a two step process. United States v. Truglio, 731 F.2d 1123, 1133-34 (4th Cir.) (citing United States v. Morado, 454 F.2d 167, 174 (5th Cir.), cert. denied, 406 U.S. 917, 92 S.Ct. 1767, 32 L.Ed.2d 116 (1972)), cert. denied, 469 U.S. 862, 105 S.Ct. 197, 83 L.Ed.2d 130 (1984). First, and undisputed here, is the determination that a conspiracy existed. Second to prove that Morrow was a member of the conspiracy, "the government need only show 'slight evidence.' " Id. ...