US v. Gray

• Decision Date: 23 May 2005
• Docket Number: 03-3370,03-3428,No. 03-3238,03-3347,03-3467,03-3617,03-3532.,03-3238
• Citation: 410 F.3d 338
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William C. GRAY, Frederick H. Lenover, Tonya F. Wolfe, Oscar McGraw, Walter DuRegger, Jr., and Tony P. McMillin, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

410 F.3d 338

UNITED STATES of America, Plaintiff-Appellee, v. William C. GRAY, Frederick H. Lenover, Tonya F. Wolfe, Oscar McGraw, Walter DuRegger, Jr., and Tony P. McMillin, Defendants-Appellants.

Nos. 03-3238, 03-3347, 03-3370, 03-3428, 03-3467, 03-3617, 03-3532.

United States Court of Appeals, Seventh Circuit.

Argued February 24, 2005.

Decided May 23, 2005.

COPYRIGHT MATERIAL OMITTED

Bradley Blackington (argued), Office of the United States Attorney, Indianapolis, IN, for Plaintiff-Appellee.

Joseph M. Cleary, Hammerle & Allen, Richard L. Ford, Jack F. Crawford (argued), Crawford & Devane, Mark D. Stuaan, Barnes & Thornburg, Indianapolis, IN, Michael J. Gonring, Quarles & Brady, Milwaukee, WI, Jessie A. Cook (argued), Terre Haute, IN, for Defendants-Appellants.

Before FLAUM, Chief Judge, and MANION and EVANS, Circuit Judges.

TERENCE T. EVANS, Circuit Judge.

Before us in this appeal are 6 of 15 defendants, many high-ranking members of the Diablos Motorcycle Club (DMC), who were charged with and convicted of being members of a methamphetamine conspiracy in the Southern District of Indiana. William Gray, Frederick Lenover, Tonya Wolfe, Oscar McGraw, and Tony McMillin (he was also convicted on several related charges, two involving firearms) were convicted by a jury; Walter DuRegger entered a guilty plea to the conspiracy charge. They appeal, raising a bevy of trial and sentencing issues.

A very brief overview of the evidence, viewed in the light most favorable to the government, shows that a conspiracy to distribute methamphetamine¹ was formed in 2001 when Sam Hargrove and Gray, who were Californians, met McGraw at a DMC meeting in Indiana. McGraw asked Hargrove to supply him with methamphetamine. After the meeting, Hargrove and Gray returned to California, where Hargrove contacted a methamphetamine source who fronted him five pounds of the drug. Hargrove and Gray concealed the methamphetamine in a trailer hitch and shipped it to Indiana. At some point, the volume of methamphetamine increased, sometimes to 20 pounds per shipment, which required a different (and bigger) hiding place. Hargrove and Gray turned to concealing the methamphetamine in nerf bars, which are running boards that attach to pickup trucks. What ordinarily happened was that codefendant John Durnin and Gray bought nerf bars, which they took to Hargrove's residence. Hargrove obtained the methamphetamine and Hargrove, Durnin, and Gray cut it with dimethylsulfone, creating 20 pounds of product, which they vacuum-sealed into one-pound packages. These packages were placed in the nerf bars, which Durnin welded shut. The nerf bars then were placed into a package for mailing to either County Line Auto in Center Point, Indiana, or to an address in Vincennes, Indiana. The shipments were made by this method approximately twice a month — that is, until law enforcement agents intercepted a shipment in May 2002.

After that setback, Hargrove and McGraw met in Las Vegas, Nevada, to discuss alternate methods for shipment. They decided that Hargrove would conceal the methamphetamine in air compressors and ship them to Indiana via heavy freight. They also decided to begin communicating more by e-mail than by telephone.

In Indiana, once the drugs arrived, Daniel Cheshire recovered the methamphetamine from its hiding place. McGraw, who directed the operation in Indiana, established the price for the methamphetamine and directed Cheshire to deliver specific quantities to specific individuals, who in turn sold the drugs.

Throughout the conspiracy, the DMC had a chapter in Terre Haute, Indiana. McGraw was the national president of the club. Hargrove and Gray joined the San Fernando, California, chapter in 1993. They became acquainted with McGraw through the club. McGraw and Lenover, who was president of the Indiana chapter, sponsored Donald Osborn for membership in May 2001. McMillin was treasurer of the Indiana chapter and he, McGraw, and Lenover obtained money to pay their dues through selling methamphetamine.

As a result of an investigation into these activities, the defendants before us were indicted of conspiracy to possess with the intent to distribute and of distribution in excess of 500 grams of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 856. McMillin was also charged in a substantive distribution count and with the possession of a firearm during a drug trafficking offense, in violation of 18 U.S.C. § 924(c)(A)(I). DuRegger pled guilty to the conspiracy count and the others were convicted by a jury of all the charges. McGraw and Gray were sentenced to life imprisonment, Lenover to 350 months imprisonment, Wolfe to 324 months, and McMillin to an aggregate sentence of 295 months. DuRegger drew a term of 210 months.

The defendants raise a number of issues on appeal. They contend that the district judge abused his discretion in finding that the affidavit submitted in support of an application for wire surveillance satisfied the necessity requirement of 18 U.S.C. § 2518(1)(c) and (3)(c). They also raise a number of evidentiary errors. They contend the district court abused its discretion in admitting evidence of membership in the DMC, in admitting their photographs (and photographs of their coconspirators) and allowing them to be on continuous display, in admitting firearms into evidence and permitting them to be on continuous display, and in admitting copies of the court order authorizing wire surveillance. They also contend that the court abused its discretion in prohibiting them from attempting to impeach Hargrove's testimony (he cooperated with the government) with evidence of a perjury conviction. And they contend that it was error to allow Special Agent Douglas Freyberger to testify as an expert on the identification and interpretation of drug code language. McMillin contends that the fruits of a search warrant executed at his home on June 26, 2002, should have been suppressed. Finally, Lenover, Wolfe, McGraw, DuRegger, and McMillin raise issues relating to their sentences.

We will turn first to the challenge to the affidavit submitted in support of the application for wire surveillance. The defendants argue that the evidence obtained from the surveillance should have been suppressed because the government failed to establish the "necessity" for the wire surveillance. We review a challenge to the necessity of wire surveillance under an abuse of discretion standard, granting substantial deference to the determination made by the district court. United States v. Zambrana, 841 F.2d 1320 (7th Cir.1988).

Under 18 U.S.C. § 2518(1)(c), each application for wire surveillance must contain a "full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." The government need demonstrate only one of the three alternatives. United States v. Ceballos, 302 F.3d 679 (7th Cir. 2002). The burden of establishing necessity is "not great," and we must review the government's compliance with the necessity requirement in a "practical and common-sense fashion." Ceballos, 302 F.3d at 683 (quoting United States v. Zambrana, 841 F.2d 1320, 1329 (7th Cir.1988)).

The affidavit in this case addressed the necessity requirement and the use of alternative law enforcement techniques, including the use of confidential sources and undercover agents, grand jury investigations, search warrants, pen register and telephone records, and physical surveillance. It stated that the United States Drug Enforcement Administration (DEA) tried to use confidential informants, but they failed to provide the information needed and it appeared unlikely that they would succeed in the future. Confidential Informant # 1 (CI1) refused to testify because he was afraid that McGraw would arrange to have him killed if he did. Further, he could not provide current information because he was incarcerated in another state. These facts help establish necessity. See United States v. Anderson, 542 F.2d 428 (7th Cir.1976); United States v. Thompson, 944 F.2d 1331 (7th Cir. 1991). Confidential Informant # 2 (CI2) could not provide information concerning the full scope of McGraw's drug trafficking because he could not identify the methamphetamine source, the couriers, or the customers, again facts going to necessity. See Ceballos. Consistent with United States v. Zambrana, 841 F.2d 1320 (7th Cir.1988), the affidavit also noted that an undercover agent was unlikely to be able to infiltrate the organization because of the insular nature of motorcycle gangs in general and McGraw's organization in particular. As to grand jury testimony, the affidavit indicated that the dealers would likely invoke their Fifth Amendment rights if subpoenaed.

The affidavit also stated that the DEA and other law enforcement agencies attempted to execute search warrants but that these also failed to achieve the goals of the investigation. The DEA had not identified any locations where they could search for methamphetamine or money, and it lacked a source of information about the arrival of methamphetamine in Indiana. A search warrant would also alert the conspirators of the investigation. As in Zambrana, the inability to conduct searches helps support a finding of necessity. Pen registers merely confirmed a contact between two telephones and could not identify the persons talking or the nature of the conversations. See Ceballos. Physical surveillance was ruled out because Cheshire's residence, where the methamphetamine was distributed to the dealers, was in an isolated location and also was protected with countersurveillance equipment. The difficulty of surveillance also supports necessity. See United States v. Farmer, 924 F.2d 647 (7th Cir. 1991). Considering all these allegations, the affidavit supporting the application was more than adequate for a finding of necessity for wire...