U.S. v. Stavig

• Decision Date: 10 April 1996
• Docket Number: No. 95-2793,95-2793
• Citation: 80 F.3d 1241
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Mikkel H. STAVIG, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1241

80 F.3d 1241

UNITED STATES of America, Plaintiff-Appellee, v. Mikkel H. STAVIG, Defendant-Appellant.

No. 95-2793.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 12, 1995.

Decided April 10, 1996.

Appeal from the United States District Court for the District of South Dakota; Lawrence L. Piersol, Judge.

Steven R. Binger, Sioux Falls, SD, argued, for appellant.

Dennis R. Holmes, Asst. U.S. Atty., Sioux Falls, SD, argued, for appellee.

Before McMILLIAN, JOHN R. GIBSON, and BEAM, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Mikkel H. Stavig appeals his sixty-month sentence imposed after he pleaded guilty to possession of cocaine with intent to distribute in violation of 21 U.S.C. § 841(a)(1) (1994). He argues that the district court ¹ should have departed downward because government agents engaged in sentencing entrapment during the reverse-sting operation leading to his arrest. He argues that he was willing to accept only 10 ounces, or approximately 280 grams, but by providing an artificially low repayment schedule and insisting on a one-kilogram purchase, the government caused him to purchase the one-kilogram quantity. He contends that the district court should have used a ten-ounce quantity as the basis for his sentence under section 2D1.1 of the Sentencing Guidelines. We affirm.

In 1986, Stavig received two concurrent four-year sentences for drug convictions in South Dakota state court. Stavig sold marijuana to CI, ² who lived in Miami, Florida. Stavig also received cocaine from CI. Following his 1987 release from prison, Stavig was discharged from parole in 1989.

Stavig renewed his association with CI in 1990 or 1991. Through 1992, he engaged in six transactions, three with CI and three with another person, where he received cocaine and then later wired money in payment for the drugs. In total, Stavig wired approximately $23,500 in payments for an estimated twenty or twenty-five ounces of cocaine.

In 1994, Stavig was living with his wife and children in Sioux Falls, South Dakota. At sentencing, Stavig testified that he received a call at his home from CI on a Wednesday night in December 1994. Unbeknownst to Stavig, CI had become a confidential informant for the government in Florida. According to Stavig, CI stated that he was trying to get rid of a kilogram of cocaine. Stavig testified that he told CI he would be interested in a couple of ounces sent through the mail. He stated that he couldn't handle a whole kilogram, but he would check around. He testified that CI responded that he had to get rid of the entire kilogram at one time.

According to Stavig, he spoke with CI again two days later. Stavig suggested that CI send him four ounces of cocaine in the mail, and CI responded that he could not do that. After discussing a price of $900 per ounce, the conversation ended. Stavig testified that CI called his home about a week later, but he could not talk because his family was home at the time.

The government contends that these conversations did not occur as Stavig says. It states that CI made only one brief call on January 1, 1995 to Stavig before agents began monitoring and recording the conversations. Because of technical problems, calls on January 2 and January 13 were not recorded. Conversations on January 4, 5, 16, and 19 were successfully recorded by the government. A South Dakota DEA agent testified that CI's long distance phone bill showed no calls to South Dakota in December. No evidence was presented showing if CI might have called Stavig from another phone.

During the recorded January 4 conversation, Stavig and CI discussed that a courier was charging $5,000 to transport the kilogram of cocaine from Florida to South Dakota. CI stated that the high courier fee was why he had to take the entire kilogram. Stavig informed CI that he was planning a family vacation in Florida, and could get by with ten ounces until then. CI replied that he would not do ten ounces at $900 an ounce, and he did not want to risk sending cocaine through the mail. CI told Stavig that he would talk with the courier that afternoon, but to do it for anything less than a kilogram was not worth it.

CI called Stavig again the next day, January 5. Stavig informed CI that he was concerned about the large quantity of drugs. He said that he had talked to some of the guys and was scared of the big number. One of the guys said that he could get rid of a couple of eight balls a week, and Stavig figured he could come up with $500 a week himself. He indicated it might take him six months to sell that much cocaine. However, he was willing to take a kilogram, as long as he could get enough time to pay.

While the January 13 conversation was not recorded, Stavig testified that he told CI that he could not make a $2,000 a week payment for the cocaine, and they should forget the deal. Stavig testified that CI talked him back into the deal by lowering the payment amount to $1,000 a week.

CI had fronted cocaine to Stavig before. In a similar arrangement, Stavig had sent more than $23,000 in money orders to CI. Thus, CI agreed that Stavig could pay over time, as long as he was taken care of in three months, Stavig made a $1,000 weekly payment to CI, and paid the courier $2,500 upon delivery. Concerned about the courier fee, Stavig suggested that they wait until he went to Florida on vacation, and asked how much cocaine would still be available in two months. However, after further discussion, they agreed that delivery would take place in Sioux Falls.

CI placed the next recorded call to Stavig on January 16. The parties discussed plans for the delivery of the cocaine. CI reiterated that Stavig must have $2,500 to pay the courier upon delivery.

On January 19, two government agents posing as couriers checked into a Sioux Falls motel room. They called Stavig and informed him where to meet. Stavig drove to the motel, where he met one of the agents in the lobby. The agent escorted Stavig to the room, where Stavig gave the other agent $2,500, received the kilogram of cocaine, and was promptly arrested.

Stavig pleaded guilty to possession with intent to distribute a controlled substance. At sentencing, Stavig testified that he had never dealt with kilogram-size quantities before. When asked on cross examination if he had told CI that he could "get by with ten" ounces, Stavig responded: "I was just going up each time because he kept hanging on that; [he] wouldn't do anything except a kilo." When asked why he simply did not tell CI, "No. I won't do it," Stavig answered: "I did do that. Then he drops the price on it.... How much I had to come up with a week; he dropped that $1,000, from $2,000 to $1,000, when I tried to back out of the deal."

A South Dakota DEA agent provided the only testimony regarding the reason agents selected one kilogram as the amount of cocaine to offer Stavig in the reverse sting. He testified:

The information I was given from the Agents in Florida was that [CI] had indicated that he had supplied kilogram quantities to Mr. Stavig in the past.

....

[t]he quantity was, basically, determined by the Agents in Florida before we became really involved in it. When they contacted me, they indicated that [CI] had talked to Mr. Stavig and had indicated he was interested in taking a kilogram of cocaine. So that's what I based my operational plan around was obtaining a kilogram of cocaine from our laboratory in Chicago to use in the reverse [sting].

The district court was concerned about the lack of reliable evidence regarding the reason for choosing a one-kilogram quantity. The court noted that hearsay testimony is allowed in sentencing hearings, but stated: "We don't have the informant nor the Agents that were involved down in Florida here, so [the South Dakota agent] winds up testifying on the basis of what he understands from what he was told by others and we have to rely on that."

The district court recognized that the Sentencing Commission added Application Note 17 of section 2D1.1 of the Sentencing Guidelines to address cases involving reverse-sting operations. The court noted that Application Note 17 expressly describes the situation where the price was set substantially lower than the market price, thus allowing the defendant to purchase a larger quantity. Stavig's case involved agents fronting drugs with favorable repayment terms of $1,000 a week. In the court's opinion, this situation did not fall within the boundaries of Application Note 17 of the Sentencing Guidelines. The district court concluded that, although Stavig asked for ten ounces, he was willing to take a kilogram of cocaine as long as he could get a long enough period of time to pay it off. The court refused to depart downward, holding Stavig responsible for the entire kilogram quantity, stating: "I think that you were worked over some with regard to the amount, but you could have stepped away and you didn't. You were ready for a kilo, if you could just handle the payments." Stavig received a sixty-month sentence. He appeals.

I.

The government argues that we need not reach the question of sentencing entrapment because the district court's refusal to depart downward is not reviewable on appeal. While a district court's refusal to exercise its discretion to depart downward is not reviewable on appeal, we may review the court's application of the Sentencing Guidelines. United States v. Olson, 931 F.2d 1250, 1252 (8th Cir.), cert. denied, 502 U.S. 886, 112 S.Ct. 243, 116 L.Ed.2d 198 (1991). We review application of the Sentencing Guidelines de novo. United States v. Gullickson, 981 F.2d 344, 346 (8th Cir.1992). The district court's finding of the drug quantity to be used in sentencing is reviewed under the clearly erroneous standard. United States v. Williams, 994 F.2d 1287, 1293 (8th Cir.1993). The government must prove the quantity by a preponderance of the evidence. United States v. Smiley, 997 F.2d 475, 481 (8th Cir.1...