USA. v. Pagan Sr., and Ruiz, s. 98-1228

• Decision Date: 18 November 1999
• Docket Number: Nos. 98-1228,s. 98-1228
• Citation: 196 F.3d 884
• Parties: (7th Cir. 1999) United States of America, Plaintiff-Appellee, v. Miguel Pagan, Sr. and Francisco Herrera-Ruiz, Defendants-Appellants. & 98-3906
• Court: U.S. Court of Appeals — Seventh Circuit

Page 884

196 F.3d 884 (7th Cir. 1999)

United States of America, Plaintiff-Appellee, v. Miguel Pagan, Sr. and Francisco Herrera-Ruiz, Defendants-Appellants.

Nos. 98-1228 & 98-3906

United States Court of Appeals, Seventh Circuit

Argued April 20, 1999

Decided November 18, 1999

Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 2:96 CR 71--James T. Moody, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Cudahy, Diane P. Wood, and Evans, Circuit Judges.

Diane P. Wood, Circuit Judge.

Automobiles were not the only thing that Miguel Pagan was selling at the dealership he owned in Hammond, Indiana. A jury concluded that Pagan and his cohort, Francisco Herrera-Ruiz, were involved in a drug conspiracy that used the facilities of Pagan Auto Sales, and it found both men guilty of conspiring to possess with intent to distribute cocaine, heroin, and marijuana, in violation of 21 U.S.C. sec. 846. It also convicted Pagan of possession of cocaine and heroin with intent to distribute those substances, in violation of 21 U.S.C. sec. 841(a)(1), and of income tax evasion, in violation of 26 U.S.C. sec. 7203. For his part, Herrera-Ruiz was also found guilty of possessing with intent to distribute cocaine and marijuana, in violation of 21 U.S.C. sec. 841(a)(1). None of their challenges to the convictions has any merit, but we conclude that Herrera-Ruiz is entitled to a remand for re-sentencing.

I

Pagan's troubles began after he failed to file income tax returns for 1993 and 1994, an omission that attracted the attention of both the Internal Revenue Service ("IRS") and the Drug Enforcement Administration ("DEA"). Over the course of the ensuing investigation, federal agents collected evidence revealing that Pagan Auto Sales served as a distribution center for drugs transported to the Chicago area from Mexico. Dealers who worked for Pagan typically filled their drug orders by placing a telephone call or sending a fax to Pagan Auto Sales to arrange for a delivery or pick up. Herrera-Ruiz and Pagan himself also dealt directly from the premises of the dealership. On December 18, 1996, a federal grand jury returned a 24-count indictment against Pagan, Herrera-Ruiz, and another dealer, Carlos Santiago.

At trial, the government depicted an extensive drug network coordinated through Pagan Auto Sales, relying heavily on circumstantial evidence (as it commonly does in this kind of case). We mention only the highlights here. Between September 1995 and August 1996, DEA Task Force Officer Raymundo Vasquez staged several drug buys involving Santiago. For the first of these buys, Vasquez enlisted the aid of a confidential informant; thereafter, both the informant and Vasquez himself purchased cocaine from Santiago, most often at Santiago's house but sometimes at the Puerto Rican Social Club. Pagan Auto Sales had a pay telephone that the government had outfitted with a pen register, on which all incoming and outgoing phone calls and faxes were recorded. On four of the eight days when Vasquez or his informant purchased cocaine from Santiago, the pen register indicated phone calls, faxes, or both, between Santiago's home and the dealership.

The last of Vasquez's buys occurred on August 21, 1996. That day, Vasquez went to Santiago's house to purchase cocaine, but Santiago said he did not have any. Santiago then left the room to make a phone call. When he returned, Santiago told Vasquez that his source was "the number one car dealer at Pagan Auto Sales," and the two men arranged to meet at the dealership later that day to complete the deal. When Vasquez arrived at Pagan Auto Sales, Santiago told him that they would have to wait a little while for his source to arrive and that there were other customers on the lot as well. "The source" arrived at the lot in a grey Lincoln and, after he left, Santiago sold Vasquez cocaine.

DEA Task Force Officer Matthew Argadine coordinated another undercover effort with the aid of an informant named Manuel Aleman. Aleman was a personal acquaintance of Pagan who regularly socialized at Pagan Auto Sales. Argadine paid Aleman a total of $10,500 in exchange for his participation in a series of controlled drug buys. Aleman's transactions were often videotaped, though without audio. On January 6, January 31, February 12, and March 4, 1996, Aleman purchased cocaine from Herrera-Ruiz outside of Las Brisas Restaurant. On August 15, 1996, he purchased cocaine from Herrera-Ruiz at Pagan Auto Sales. Once, on February 14, 1996, DEA agents videotaped Aleman meeting with Pagan at Pagan Auto Sales. Aleman testified that he purchased cocaine during this meeting, but the transaction was not captured on-camera. The government supported Aleman's testimony about the relationship between Pagan and Herrera-Ruiz with entries from the pen register showing a total of 66 phone calls between Herrera-Ruiz and the dealership.

The heart of the government's case was Aleman's detailed testimony about the inner workings of the drug operation. From him, the jury heard that Pagan and Hererra-Ruiz worked with Manuel and Auriliano Diaz, two brothers who used semi- tractor trailers to transport drugs from Mexico to Chicago and northwest Indiana. Aleman stated that one of these trucks carrying 810 kilograms of cocaine and 504 pounds of marijuana had been seized by the Chicago Police while on its way to Pagan Auto Sales. After the seizure, Herrera-Ruiz had warned Aleman that they would have to be careful around the car lot because "the heat was on." In fact, the truck Aleman and Herrera-Ruiz had been discussing had been seized in Texas by the DEA. The driver escaped, but DEA agents transported the truck to Chicago as part of a sting operation in which the DEA had hoped to deliver the load and trap the buyers. This effort was unsuccessful, as no one appeared to claim the load.

When he was arrested on August 29, 1996, Pagan signed a waiver of his Miranda rights and then admitted that he knew a man named Victor Quinones who had been the driver of a truck filled with drugs that was seized by the DEA. Pagan also confessed that he had been introducing drug distributors to customers for a long time. He identified the Diaz brothers as major distributors and fingered an individual named "Tito" as his own supplier. "Tito" is the nickname of Santos Torres, Jr. According to the pen register, in September and October 1995, Torres placed two phone calls to the dealership. Additional evidence of a business connection between Pagan, the Diazes, and Quinones included pen register data at Pagan Auto Sales revealing 45 telephone calls between Pagan Auto Sales and Quinones' last known address; numerous checks payable to Quinones and endorsed in his name that had been deposited in the auto dealership's bank account; and the fact that Pagan was the lien holder for several of the Diaz brothers' trucks.

This is a representative sample of the evidence that led the jury to return guilty verdicts against Pagan and Herrera-Ruiz on all counts on April 24, 1997. The court sentenced Pagan to 360 months in prison and five years supervised release, and ordered him to pay a $25,000 fine. It based the sentence on an offense level of 42 under the Sentencing Guidelines, which incorporated the cocaine and marijuana seized in Texas by the DEA and a four-level enhancement for his "leadership role" in the offense. It sentenced Herrera-Ruiz to 324 months in prison and five years supervised release, and ordered him to pay a $10,000 fine. The district court also held Herrera-Ruiz accountable for the truckload of drugs seized in Texas and enhanced his sentence by three levels for his "managerial role" in the offense.

II

A. Sufficiency of the Evidence

The defendants raise several challenges to their convictions and sentences. We begin with their claims based on the sufficiency of the evidence. Both Pagan and Herrera-Ruiz contend that the evidence at trial was insufficient as a matter of law to support their convictions for conspiracy to distribute drugs; Pagan also claims that his conviction for possessing cocaine with intent to distribute was not supported by the evidence. In order to succeed on these arguments, the defendants must demonstrate that the record contains no evidence, regardless of how it is weighed, from which the jury could have found the essential elements of the offenses beyond a reasonable doubt. United States v. Menting, 166 F.3d 923, 928 (7th Cir. 1999); United States v. Granados, 142 F.3d 1016, 1019 (7th Cir. 1998).

In order to prove a conspiracy charge, the government must show both that a conspiracy existed and that the defendant knowingly agreed to join it. United States v. Castillo, 148 F.3d 770, 774 (7th Cir. 1998); United States v. Taylor, 116 F.3d 269, 271 (7th Cir. 1997). Conspiracy, like other crimes, may be proved entirely by circumstantial evidence. All that is necessary is "enough circumstantial evidence to support, beyond reasonable doubt, an inference that the defendants agreed among themselves to distribute drugs." United States v. Townsend, 924 F.2d 1385, 1390 (7th Cir. 1991); see also Taylor, 116 F.3d at 271; United States v. Turner, 93 F.3d 276, 281 (7th Cir. 1996). As our recitation of the facts demonstrates, there is very little direct evidence that Pagan and Herrera-Ruiz conspired together and with others to distribute drugs. Nonetheless, the circumstantial evidence together with Aleman's testimony is sufficient to support an inference that they did.

The conspiracy case against Herrera-Ruiz, while perhaps the weaker of the two, is nonetheless strong enough to support a conviction. The government's evidence included pen register entries indicating that a total of 66 telephone calls were placed between Herrera-Ruiz and Pagan Auto Sales, Aleman's testimony that Herrera-Ruiz worked with Pagan and the Diaz brothers, and the fact that Herrera-Ruiz sold drugs on the...