U.S. v. Patel, 96-3331

• Decision Date: 10 December 1997
• Docket Number: No. 96-3331,96-3331
• Citation: 131 F.3d 1195
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Nilesh PATEL, also known as Nick Patel, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1195

131 F.3d 1195

UNITED STATES of America, Plaintiff-Appellee, v. Nilesh PATEL, also known as Nick Patel, Defendant-Appellant.

No. 96-3331.

United States Court of Appeals Seventh Circuit.

Argued May 15, 1997.

Decided Dec. 10, 1997.

Barry Rand Elden, Chief of Appeals, Duane J. Deskins (argued), Office of the United States Attorney, Criminal Appellate Division, Chicago, IL, for Plaintiff-Appellee.

Nathan Z. Dershowitz (argued), Dershowitz & Eiger, New York City, for Defendant-Appellant.

Before CUDAHY, MANION, and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Nilesh Patel pled guilty to count three of a four-court superseding indictment, which charged him with conspiring to possess with the intent to distribute approximately 39 kilograms of cocaine. Patel and the government then presented evidence over three days addressed to certain disputed issues under the United States Sentencing Guidelines. After hearing the evidence and argument of the parties, the district court found that Patel was responsible for between 50 and 150 kilograms of cocaine, that he should receive a three-level enhancement for his aggravating role in the offense, and that he was not entitled to a two-level reduction for acceptance of responsibility. On the basis of those findings, the district court sentenced Patel to a prison term of 262 months. The court also ordered the forfeiture under 21 U.S.C. § 853 of a Nissan Quest minivan and of $120,505 in cash discovered during a search of Patel's home. In this appeal, Patel argues that the district court's factual findings are insufficient to support its sentencing determinations and that the forfeiture of the cash was erroneous. Although we affirm the district court's forfeiture order, we agree with Patel that the district court's findings are insufficient to support the sentence imposed. We therefore vacate Patel's sentence and remand for resentencing.

I.

Patel was arrested on April 5, 1995, as he and Charles Lezine were delivering a red vinyl bag that contained six kilograms of cocaine to the trunk of a red Nissan Sentra. The Sentra had been designated for the delivery by Philip Bruno, who unbeknownst to Patel was cooperating with the government. DEA agents subsequently found an additional thirty-four kilograms of cocaine in a room of the Hilton Hotel where surveillance agents had seen Patel and Lezine emerge shortly before their arrests. Moreover, in executing a search warrant at Patel's Skokie, Illinois residence, agents found $120,505 in cash in a brown paper bag under Patel's bed. The agents also recovered from the residence a money counter and a shotgun.

In December 1995, a four-count superseding indictment was returned against Patel. Counts III and IV addressed the six kilograms of cocaine found in the red vinyl bag at the time of Patel's arrest, as well as the thirty-four kilograms recovered from the hotel room. ¹ Count III charged Patel with conspiring to possess with the intent to distribute that cocaine, and count IV charged possession with the intent to distribute. Counts I and II addressed another cocaine transaction between Patel and Bruno on January 25, 1995. The government alleged that Patel had sold five kilograms of cocaine to Bruno on that date, and again, the indictment included both a conspiracy and a possession count. Finally, the indictment included forfeiture allegations under 21 U.S.C. § 853. In particular, the government sought forfeiture of approximately $2 million in cash that was alleged to be connected with the January 25 and April 5 transactions, as well as of the Nissan Quest minivan that Patel had been driving at the time of his arrest.

Shortly before a scheduled trial on these charges, Patel pled guilty to count III of the superseding indictment. During the change of plea hearing, Patel acknowledged that he had conspired to possess with the intent to distribute approximately thirty-nine kilograms of cocaine on April 5. He also agreed to waive a jury trial on the government's forfeiture allegations and to allow the district court to resolve those issues. Pursuant to Patel's plea, the government dismissed the remaining counts of the superseding indictment.

The United States Probation Office subsequently prepared a Presentence Report ("PSR"), which calculated Patel's total offense level at thirty-nine. The PSR recommended that Patel be held responsible for 145 kilograms of cocaine. Although Patel told the Probation Officer that he had only been aware of six of the forty kilograms recovered on April 5, the PSR noted that the transcript of a recorded conversation between Patel and Bruno indicated otherwise. The PSR therefore recommended that Patel be held responsible for the entire forty kilograms. The PSR also recommended that the court attribute to Patel as relevant conduct under U.S.S.G. § 1B1.3(a)(2) the five kilograms he had distributed to Bruno on January 25, 1995. The PSR further noted that a total of approximately $2 million in cash had been seized during traffic stops on December 14, 1994 and February 16, 1995, and that the money represented drug proceeds that were being transported on Patel's behalf. The PSR therefore recommended that the cocaine equivalent of that cash amount (100 kilograms) be attributed to Patel as relevant conduct. The PSR then suggested that Patel be given a three-level enhancement under U.S.S.G. § 3B1.1(b), which applies to supervisors or managers of criminal activity involving five or more participants or that is otherwise extensive. Finally, the PSR recommended that Patel be denied a two-level reduction for acceptance of responsibility under section 3C1.1(a). On that issue, the PSR noted that Patel had failed to truthfully admit essential elements of the offense of conviction, as well as aspects of his relevant conduct. In a written submission, Patel objected to each of these recommendations.

The district court then heard extensive evidence on the disputed sentencing issues and on the forfeiture issue. The government's lead witness was Bruno, who had agreed to cooperate after his arrest in connection with the January 25 transaction. Bruno testified that he first met Patel in 1984, when Bruno had been employed by the Chicago Transit Authority. At the time, Patel was hoping to obtain a concession stand at a CTA subway station, and Bruno testified that Patel had paid him kickbacks for help with that stand. Bruno did not learn of Patel's narcotics trafficking until 1992, when Patel revealed that a bowling alley he owned was used as a "dropoff" for cocaine money due a supplier in California. Patel apparently told Bruno at the time that his cocaine operation was quite profitable and that he was looking to expand his business holdings.

Sometime around March 1994, Bruno was approached by his nephew Philip Ducato about facilitating a cocaine deal. Bruno previously had told his nephew of Patel's involvement with drugs, and Ducato now wanted to obtain five kilograms of cocaine because a friend had a buyer for it. Bruno subsequently met with Patel and learned that his asking price for a kilogram of cocaine was $23,000. That price was considered too high, so the deal was delayed until January of the following year, when the price dropped to $18,000. It was ultimately agreed that Patel would have the cocaine delivered to a restaurant in Palos Heights, Illinois, where Ducato and his cohorts would be waiting. Patel told Bruno that "a tall colored guy" would make the delivery. At approximately 5:30 p.m. on January 25, 1995, Carlton Miller, an African-American male driving a white Mercury Sable, delivered to the restaurant a brown paper bag containing five kilograms of cocaine. The ultimate buyer of the cocaine turned out to be a government informant, however, so the cocaine ended up in the hands of drug enforcement agents.

Patel and Bruno talked about the cocaine transaction the following day, and Bruno indicated that he would have Patel's money that evening. Patel told Bruno that he would be out of town but that he would call Bruno when he returned. Bruno then arranged to meet Ducato and the others on January 27 at the Palos Heights restaurant for the purpose of obtaining Patel's money. When Bruno arrived at the restaurant, however, he was arrested by drug enforcement agents.

At the time of his arrest, Bruno identified Patel as his supplier and agreed to cooperate with the agents. They asked Bruno first to delay paying Patel the $90,000 owed on the January 25 transaction, and also to arrange an additional cocaine deal. Bruno did as he was told, in the process recording a number of conversations in which he and Patel discussed the money Bruno owed, as well as the logistics of a further transaction. During one of those conversations, Patel told Bruno that he had lost $2 million in drug proceeds that he was required to make up to his supplier. First, Patel's cousin had been stopped by police with $1 million in cash in his vehicle. A couple of months later, Miller had been stopped with another $1 million in the white Mercury Sable. Yet Patel did not seem worried about these losses. He told Bruno, "Easy come, easy go." Patel said that it was easy to make money selling cocaine and that he sometimes made $50,000 to $60,000, or even $100,000 per week.

On April 4, 1995, Bruno told Patel that he finally had the money to pay for the January 25 cocaine. The amount due had risen to $100,000 as a result of the delay, and Patel reminded Bruno to make the check payable to A & J Capital, Ltd. The two arranged to meet the following day so that Patel could pick up his check and deliver to Bruno an additional five kilograms of cocaine. Patel arrived at Bruno's office shortly after noon the following day. He told Bruno that the cocaine was at the Hilton Hotel and that he would sell Bruno six, rather than five, kilograms so that he would not be required to break up the existing packaging. Bruno then showed Patel a red ...