United States v. Arellanes-Portillo

• Decision Date: 27 May 2022
• Docket Number: 20-3165
• Parties: UNITED STATES of America, Plaintiff - Appellee, v. Jesus ARELLANES-PORTILLO, Defendant - Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

34 F.4th 1132

UNITED STATES of America, Plaintiff - Appellee,

v.Jesus ARELLANES-PORTILLO, Defendant - Appellant.

No. 20-3165

United States Court of Appeals, Tenth Circuit.

FILED May 27, 2022

Jacob Rasch-Chabot, Assistant Federal Public Defender (Virginia L. Grady, Federal Public Defender, with him on the briefs), Denver, Colorado, for Defendant-Appellant.

Bryan C. Clark, Assistant United States Attorney (Duston J. Slinkard, Acting United States Attorney, and James A. Brown, Assistant United States Attorney, with him on the brief), Kansas City, Kansas, for Plaintiff-Appellee.

Before BACHARACH, SEYMOUR, and PHILLIPS, Circuit Judges.

PHILLIPS, Circuit Judge.

Jesus Arellanes-Portillo pleaded guilty to a collection of federal drug-trafficking, money-laundering, and immigration crimes. He now challenges the procedural reasonableness of his sentence. Arellanes-Portillo argues that the district court misapplied a three-level aggravating-role adjustment in calculating his advisory guideline range for his money-laundering offenses. We hold that the district court plainly erred by basing the aggravating-role adjustment on relevant conduct for his drug offenses and not exclusively for his money-laundering offenses. That violated U.S. Sentencing Guidelines Manual § 2S1.1 Application Note 2(C) (U.S. Sentencing Comm'n 2018).¹ So exercising jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a), we vacate and remand for resentencing.

BACKGROUND

I. The Indictment

A federal grand jury sitting in the District of Kansas indicted multiple defendants for crimes committed on behalf of a Mexican drug-trafficking organization operating in Kansas City. The indictment charged Arellanes-Portillo with twelve crimes: one count of conspiracy to distribute and to possess with intent to distribute more than five kilograms of cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1), 841(b)(1)(A)(ii), 18 U.S.C. § 2, and of conspiracy to distribute and to possess more than 100 kilograms of marijuana, in violation of §§ 846, 841(b)(1)(B)(vii), 18 U.S.C. § 2 ; three counts of possessing cocaine with intent to distribute, in violation of 21 U.S.C. § 841(a)(1), 841(b)(1)(B)(ii), 18 U.S.C. § 2 ; one count of possessing cocaine with intent to distribute, in violation of § 841(a)(1) (without designating a subsection (b) penalty provision), 18 U.S.C. § 2 ; three counts of using a telephone to facilitate the conspiracy, in violation of 21 U.S.C. § 843(b) ; two counts of money laundering for attempting to transport funds from Kansas to Mexico to promote the conspiracy, in violation of 18 U.S.C. §§ 1956(a)(2)(A), 2; and two counts of knowingly possessing false immigration documents, in violation of 18 U.S.C. § 1546(a).²

II. The Presentence Report

Arellanes-Portillo pleaded guilty to all counts without a plea agreement. In a written plea petition preceding his guilty pleas, he provided a factual basis for each of the charged offenses.

In the presentence report ("PSR"), the United States Probation Office calculated the advisory guideline range using the money-laundering guideline, § 2S1.1. Under § 2S1.1(a)(1), the PSR set the § 2S1.1 base offense level at 32. It did so by incorporating the offense level from the drug guideline, § 2D1.1(a)(5), (c)(4) for the drug weight involved in Arellanes-Portillo's offense.³ Next, the PSR added two levels under § 2S1.1(b)(2)(B), based on Arellanes-Portillo's convictions for money laundering under 18 U.S.C. § 1956. After that, the PSR added three offense levels for his aggravated role in criminal activity involving five or more participants, based on § 3B1.1(b). Finally, the PSR subtracted three offense levels for Arellanes-Portillo's timely acceptance of responsibility.

III. PSR Objections & Sentencing

Before the sentencing hearing, Arellanes-Portillo objected to the three-level role adjustment. In an Addendum to the PSR, the probation office restated Arellanes-Portillo's objection in these words: "Mr. Arellanes-Portillo was not the manager, someone named Bolo was. We do not believe that the enhancement should apply."⁴ R. vol. 3 at 38. The government defended the PSR's aggravating-role adjustment on grounds that "[t]he Tenth Circuit has consistently held that the ‘enhancement under § 3B1.1(b) applies to a defendant who exercised some degree of control or organizational authority over someone subordinate to him in the drug distribution scheme.’ " R. vol. 3 at 38–39 (quoting United States v. Cordoba , 71 F.3d 1543, 1547 (10th Cir. 1995) ). The government also cited evidence of Arellanes-Portillo's role in the drug organization.

The probation office sided with the government and retained the aggravating-role adjustment in the PSR. It found that Arellanes-Portillo qualified as a manager under § 3B1.1(b) because "[h]e was the known leader of the Kansas City cell and directed CI1 and CI2 in their drug trafficking activities." R. vol. 3 at 39. So we see that the probation office and the parties evaluated the aggravating-role adjustment based on Arellanes-Portillo's drug activity, not his money-laundering activity.

At the sentencing hearing, Arellanes-Portillo renewed his objection to the three-level adjustment for his aggravating role in the offense. He contended that he had merely served as a mouthpiece for his superior in the organization, Portillo-Uranga, and that he had lacked "any autonomy in directing the way the organization runs, the way money comes in and out of the country or when drugs come in and out of the country." R. vol. 2 at 205–06. So he argued that he shouldn't qualify for an aggravated-role adjustment. In response, the government rested on its earlier written response to Arellanes-Portillo's PSR objection.

After hearing from the parties, the district court ruled that Arellanes-Portillo had acted as a manager or supervisor as provided in § 3B1.1(b). In support, the court cited testimony that Arellanes-Portillo had been Portillo-Uranga's "right hand man" and been referred to as "the head of the Kansas City cell." R. vol. 2 at 206. Among other things, the court noted that Portillo-Uranga had delegated some of his authority to Arellanes-Portillo "to contact Mike for purposes of delivering money to him to get to the suppliers[.]" R. vol. 2 at 207. It also determined that Arellanes-Portillo had been higher in the organization than some others "in terms of finding stash houses, using them, dropping them when they thought there was law enforcement heat on them." R. vol. 2 at 207. From recorded phone calls, the court found that Arellanes-Portillo "directed people to go pick up drugs or deliver money, again, at the behest of Mr. Portillo-Uranga but, nevertheless, Mr. Portillo-Uranga didn't tell them directly necessarily. He used the defendant to do that because the defendant operated as a manager or supervisor." R. vol. 2 at 207–08. The court further pointed out that Arellanes-Portillo had the authority to cut (dilute) the drugs, that he knew the identity of customers, and that he could set the drug price for some customers. From this, we see that the district court also relied on Arellanes-Portillo's drug activity in assessing the aggravated-role adjustment, though it also mentioned some of his associated involvement with transporting drug proceeds to Mexico.

In the end, the district court accepted the PSR's sentencing recommendations with one exception—it added two offense levels to § 2S1.1(a)(1) ’s base offense level for Arellanes-Portillo's maintenance of a drug premises under § 2D1.1(b)(12). Thus, the offense level for the money-laundering offenses rose to 39, minus three offense levels for the timely acceptance of responsibility, which left a total offense level of 36. That, combined with criminal-history category of I, resulted in an advisory guidelines range of 188–235 months of imprisonment. From that, the court imposed a term of 188 months.

Arellanes-Portillo appealed. He no longer argues that his drug activity failed to support an aggravated-role adjustment for his drug offenses. Instead, now alert to § 2S1.1 ’s Application Note 2(C), he challenges the district court's aggravated-role adjustment on a different basis—that it erred by basing the adjustment on relevant conduct for his drug offenses, and not exclusively on relevant conduct for his money-laundering offenses.

DISCUSSION

I. Drugs and Money-Laundering Convictions

In evaluating this appeal, it helps to review how the probation office should have structured the PSR and how its skipping steps has led to the need for a resentencing.

First, as mentioned, the PSR didn't separate the drug and money-laundering counts into two separate groups of closely related counts. Instead, citing § 3D1.2(d), the PSR immediately lumped the seven drug-related counts and the two money-laundering-related counts into a single "Count Group 1." Apparently, the probation office mistakenly believed that the drug and money-laundering offenses immediately grouped together because their separate guidelines— §§ 2S1.1 and 2D1.1 —are listed in the table at § 3D1.2(d) (though, importantly, in separate rows).⁵

Second, the PSR should have calculated a total offense level for each of the two groups of closely related counts. For the drug-conviction group, the PSR should have calculated a base offense level of 32, added two levels for maintaining a drug premises, and then added three more levels for an aggravating-role adjustment.⁶ That minus three levels for timely acceptance of responsibility would leave a total offense level of 34. As for the money-laundering group, the PSR should have calculated a base offense level of 34 (the Chapter Two calculation for the underlying drug offenses, as explained above); added two levels for the convictions under 18 U.S.C. § 1956 ; added zero, two, or three levels for an aggravating-role adjustment (after applying § 1B1.3 to isolate any acts and omissions qualifying as relevant conduct to the money-laundering offenses as then applied to § 3B1.1); and then subtracted...