United States v. Daniel Stanford , 823 F.3d 814 ( 2016 )

Case: 15-30127 Document: 00513511555 Page: 1 Date Filed: 05/18/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-30127 FILED
May 18, 2016
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff–Appellee,
versus
DANIEL JAMES STANFORD,
Defendant–Appellant.
Appeal from the United States District Court
for the Western District of Louisiana
Before DAVIS, SMITH, and HIGGINSON, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Daniel Stanford, one of the defendants in a series of cases involving a
synthetic-marihuana distribution ring, appeals, on numerous grounds, his con-
viction and sentence on charges of conspiracy to distribute and to possess with
intent to distribute a controlled substance analogue (“CSA”) (in violation of
21 U.S.C. §§ 846, 841(b)(1)(C), 813, and 802(32)(A)); conspiracy to introduce
and cause to be introduced misbranded drugs into interstate commerce (in
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violation of 18 U.S.C. § 371 and 21 U.S.C. §§ 331, 333(a)(2), and 352(a), (b),
and (f)); conspiracy to engage in money laundering (in violation of 18 U.S.C.
§ 1956(h)); and money laundering (in violation of 18 U.S.C. § 1957). Based on
the intervening decision in McFadden v. United States, 135 S. Ct. 2298 (2015),
announced after this trial, we reverse the conviction of conspiracy to distribute
a CSA because the district court’s error, in ruling that the government was not
required to prove that Stanford knew the synthetic marihuana compound dis-
tributed by the conspirators was a CSA, was not harmless, despite the decision
to send the issue to the jury via a special interrogatory. We affirm the con-
viction and sentence on all other counts and remand for proceedings as needed.
I.
In 2011, Richard Buswell, the owner of a chain of smoke shops in the
Lafayette, Louisiana, area, became involved with a group of persons selling
and producing synthetic marihuana, a lab-created product designed to mimic
organic marihuana. Manufacturers hoped to skirt drug laws because, at least
initially, lawmakers and law enforcement officials were not well informed
regarding synthetic cannabinoids, and the chemicals used to create the prod-
ucts had not yet been universally banned.
Originally, many makers of synthetic marihuana used a chemical known
as JWH-018, but as public awareness grew, the federal government announced
a ban on JWH-018, forcing producers to switch to a chemical known as
AM-2201. Structurally, JWH-018 is similar to AM-2201, except that AM-2201
replaces a hydrogen atom in JWH-018 with a fluorine atom. Both JWH-018
and AM-2201 are naphthoylindoles that activate the cannabinoid receptors in
the human body, producing a “high.”
Buswell met with Thomas Malone, Drew Green, and Boyd Barrow in
March 2011 seeking to stock a synthetic cannabinoid in Buswell’s smoke
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stores, Curious Goods. Malone and Green owned a Georgia-based company
called NutraGenomics that had formulated a line of synthetic marihuana they
called “Mr. Miyagi.” Barrow owned Pinnacle Products (“Pinnacle”), a company
that distributed Mr. Miyagi to retailers in a number of states. Over time,
Pinnacle also began manufacturing Mr. Migayi for NutraGenomics with
Joshua Espinoza, a Pinnacle salesman, personally mixing batches. In an effort
to skirt the law, Mr. Miyagi was sold as “potpourri,” and its label stated that it
was “not for human consumption.” As of March 2011, Pinnacle used only
AM-2201 to make Mr. Miyagi.
Shortly thereafter, Mr. Miyagi arrived in Curious Goods’ stores in Lafay-
ette. In July 2011, a Louisiana law went into effect that banned napthoylin-
doles. Although Barrow and others were initially concerned, Buswell assured
Barrow that there would be no problem selling Mr. Miyagi in Louisiana. To
help provide those assurances, Buswell brought in Barry Domingue, a local
attorney who served as the corporate attorney for Curious Goods.
That summer, Barrow traveled to Lafayette and met with Buswell and
Domingue, who told him that they had talked with law enforcement regarding
Mr. Miyagi, and there would be no issues. Further, Barrow testified that about
a week after his trip to Lafayette, Buswell called and told him that he had
hired a “constitutional lawyer,” Stanford, “who would lead our fight into . . .
challenging the feds and challenging states with the ultimate goal of
regulation.”
Stanford had first become connected with Buswell by serving as his
defense counsel in a securities-fraud prosecution. After Buswell’s call, Barrow
flew to Lafayette to meet with Stanford and Buswell. Buswell instructed him
to tell Stanford “everything about the business,” and Barrow complied,
describing Mr. Miyagi, how it was manufactured, and how it was labeled
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(specifically the “not for human consumption” warning). Stanford even opened
and smelled a package of Mr. Miyagi. Barrow claimed that the meeting lasted
one-and-a-half to two hours.
Barrow testified that at some point after that meeting, he received a call
from Buswell saying that Stanford was onboard—they had “the big stick.”
Buswell also claimed that Stanford had secured an agreement with the Loui-
siana attorney general that Mr. Miyagi was the only “potpourri” that could be
“sold in the state” and that Buswell had a letter to that effect from the attorney
general’s office.
The first physically documented interaction Stanford had with the drug
scheme occurred on August 22, 2011, when he received an email from Daniel
Francis. Francis, who had a personal penchant for cannabinoids, had
formed―at the suggestion of Malone and Green―a political action committee
for the synthetic marihuana industry—the Coalition for Cognitive Liberty—to
lobby and recommend manufacturing guidelines. Similarly, working with
manufacturers such as NutraGenomics, Francis formed the Retail Compliance
Association (“RCA”), incorporated under California law, to keep retailers
abreast of the latest regulatory developments and to track legislation affecting
cannabinoids.
Francis’s email was entitled “RCA membership related documents” and
contained nothing but attachments related to the RCA, including documents
describing the organization, guidelines for how to display synthetic marihuana
products, and advice on interactions with police. Francis claimed the email
was a follow-up to an introductory phone call he had with Stanford, although
Stanford contends that his phone records show no evidence of such a call. On
August 26, Francis sent a follow-up email asking whether Stanford had
“received the documents.” Francis also mentioned a possible
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misunderstanding “on the call” and provided clarification that the RCA was
“available as a plaintiff.” The same day, Stanford replied that he “did receive
the documents” and was “currently reviewing” them and would contact Francis
“sometime next week.”
Espinoza testified that he went to Lafayette in August (“either the sec-
ond or third week”) and met with Buswell, Domingue, Barrow, and Stanford
at a restaurant. Domingue was introduced as “Curious Goods’ attorney,” Stan-
ford as Buswell’s “corporate attorney.” Domingue told Espinoza, who still had
concerns about the legality of Mr. Miyagi in Louisiana, that they had gotten
the product “approved by the AG . . . the District Attorney . . . all the local
authorities.” Stanford and Domingue were sitting on either side of Buswell,
yet Stanford said nothing in regard to Domingue’s statement about approval
from the authorities.
Francis testified that he traveled to Lafayette in September. 1 He gave a
presentation at a meeting at Buswell’s house, where he went through his
“standard spiel” for attorneys, covering “the cannabinoid receptor, why these
products work, why they’re on the market, why they’re being sold,” as well as
the “Analogue Act.” Present were Barrow, Buswell, Espinoza, Stanford, and
Domingue; nevertheless, other witnesses testified that “Stanford showed up
later” and “came in at the end of the meeting.”
Francis described the meeting “as a dynamic conversation,” not just a
solo presentation. He covered “the exact chemical that was being used in this,
which was AM-2201” and its relation to the DEA ban. Francis claimed he
1 Other witnesses indicated the meeting may have been later, maybe at the end of
October. Barrow testified that he brought Francis to Louisiana after his confrontation with
Stanford regarding the claimed arrangement with the attorney general agreement. Espinoza
testified that Barrow’s confrontation with Stanford took place in October.
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“tried to represent it in a way that was legal.” He also stated that they “didn’t
feel threatened by the Analogue Act,” because they “didn’t think the science
[presumably, demonstrating the similarity of AM-2201 to JWH-018] existed at
the time.” Nevertheless, Francis talked about how AM-2201 and JWH-028
were “visually similar.” Francis testified that he told Stanford specifically
about the industry’s shift from JWH-018 to AM-2201. The group “handled,”
“displayed,” and “opened” a package of Mr. Miyagi at the meeting. Barrow and
Buswell suggested forming a Louisiana branch of the RCA.
Barrow testified that at some time in October, he and Espinoza traveled
to Lafayette with the primary purpose of getting Buswell, Domingue, and
Stanford to show them the purported letter from the attorney general. After
Buswell declined to talk about the letter over dinner, Barrow showed up at
Stanford’s law office and demanded to see it. Stanford confessed that there
was no letter but insisted he had “a gentleman’s handshake agreement” with
the attorney general allowing them to sell Mr. Miyagi in the state.
On October 27, Domingue forwarded Stanford an email that purported
to have, as attachments, lab reports on Mr. Miyagi, although the reports were
not actually attached. Domingue specifically noted the presence of AM-2201.
On November 2, Francis emailed Stanford several documents for a meeting
that day, including a budget and business plan for the RCA. On November 3,
at Barrow’s request, Stanford emailed a reporter a response to a story about a
teenage boy who had died after smoking synthetic marihuana.
Stanford and Francis continued to communicate throughout November
about forming a Louisiana RCA. On November 8, Stanford sent Francis an
email asking to discuss “orginizing [sic] the RCA into a real powerhouse and
discuss what it would take to make you a full time executive director.” The
same day, Don Wirtshafter, a lawyer who specialized in cannabinoids, told
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Francis that AM-2201 was included in Louisiana’s ban of naphthoylindoles.
Francis testified that, before the call with Wirtshafter, he had not been aware
that AM-2201 was covered by the Louisiana law. Francis decided to tell Stan-
ford about that development in person and claimed that he did so on his next
trip to Lafayette (although he provided no date). He told Stanford, who re-
assured him that he (Stanford) would have lunch with the attorney general.
Around the middle of November, one of the Curious Goods franchisees
had a run-in with law enforcement after an off-duty state trooper noticed a sign
out front promoting Mr. Miyagi. Stanford then met with the store’s owner,
along with Domingue, Francis, and Buswell, at his law office. The owner testi-
fied that either Francis or Domingue told him that Mr. Miyagi had been sent
to the “DEA’s own lab” and found not to contain “any banned substances.” On
the table at the meeting was a lab report that said “DEA Registered Analytical
Laboratory” at the top.
Stanford followed up with the trooper via phone on November 22. Fran-
cis testified that Stanford told the trooper that the products were legal and
offered samples to prove it, although he never actually did so. According to
Francis, that conversation occurred after Francis had told Stanford about the
Louisiana ban on AM-2201. In late November, the chief of police testified that
he also met with Stanford, who told him that “everything that was inside the
store was DEA cleared.” Stanford agreed to produce a sample of Mr. Miyagi to
the police lab for testing, though he never did.
On November 28, the Louisiana-based RCA was incorporated in Louisi-
ana with Stanford as “Director” and Francis as “President.” Barrow explained
that he and Buswell agreed that Pinnacle and Curious Goods would pay for
the initial costs of getting the Louisiana RCA up and running; they settled on
paying Stanford a combined total of $12,500 a week. Rather than splitting
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those costs each week, sometimes Barrow, and at other times Buswell, made a
“bulk payment.” The following chart summarizes payments to Stanford. 2
Date Remitter Amount Description
10/28/11 Barrow/Pinnacle $12,500.00 Memo line says “Retainer”
Products
11/03/11 Barrow/Pinnacle $ 6,250.00 Memo line says “RCA dues”
Products
11/21/11 Barrow $13,000.00 Memo line says “Legal”
11/30/11 Buswell/Curious $19,000.00 Memo line says “Boyd’s RCA
Goods dues to be deducted from
Miyagi bill”
12/06/11 Barrow (cashier’s $ 7,421.69 Barrow claimed the check was
check) intended to cover $6,250 in
RCA dues plus $1,171.59 for
damage he caused to a city
light pole
On December 7, Buswell, Stanford, Domingue, Francis, Espinoza, and
Barrows―all of whom were involved with Curious Goods―met at Buswell’s
house. One of the purposes was to educate Curious Goods employees and fran-
chisees on selling Mr. Miyagi and how to handle law-enforcement inquiries.
According to Francis, Barrow, and Espinoza, various topics were discussed,
including accounting, warehouse distribution, merchandising, and how to use
the cash-register system. Buswell announced that all franchisees would have
to pay the RCA weekly dues of $1000 to $5000. Membership in the RCA was
mandatory, and Stanford would serve as its head. Francis testified that he, in
addition to Stanford, spoke on behalf of the RCA. Stanford was introduced as
the “big stick” and again claimed to have an agreement with the attorney
2 Stanford disputes that these payments were all for the RCA. See infra part IV.
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general. At the end of his presentation, Stanford allegedly admonished,
“remember, nobody talks, everybody walks” and then left.
On December 8, local narcotics agents raided Curious Goods stores, exe-
cuting warrants and seizing Mr. Miyagi, computers, and other items. Buswell
was arrested the same day, and Stanford initially served as his counsel until
he was disqualified in light of mounting evidence against himself. Meanwhile
at least some of the conspirators and franchisees wanted to keep doing busi-
ness with a different product that had not yet been banned. Barrow testified
that Stanford met with them and formulated new operational guidelines.
Those plans never went anywhere, however, and the distribution scheme came
to an end.
II.
In September 2012, Stanford was charged in a joint indictment with
Green, Malone, Barrow, Espinoza, Buswell, Francis, Domingue, and others as
follows: Count One: conspiracy to distribute and to possess with intent to dis-
tribute a Schedule I controlled dangerous substance (in violation of 21 U.S.C.
§§ 846, 841(b)(1)(C), 813, and 802(32)(A)); Count Two: conspiracy to introduce
and cause to be introduced misbranded drugs into interstate commerce (in
violation of 18 U.S.C. § 371 and 21 U.S.C. §§ 331, 333(a)(2), and 352(a), (b), and
(f)); Count Three: money-laundering conspiracy (in violation of 18 U.S.C.
§ 1956(h)); Counts Four through Thirteen: money laundering (in violation of
18 U.S.C. §1957). Trial began in March 2014 for Stanford and Domingue after
other defendants had pled out. After Domingue committed suicide the third
day of trial, the district court granted Stanford’s motion for a mistrial.
A new trial for Stanford began in August 2014. Before both trials, in
light of a circuit split, Stanford contended that for the government to prove him
guilty of conspiracy to distribute or possess with intent to distribute a
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controlled substance (Count One), it must demonstrate that he knew AM-2201
was a CSA. The district court rejected that theory, concluding that the Fifth
Circuit did not require such knowledge and that it was enough to show that
Stanford knew the substance was AM-2201 and that AM-2201 was in fact a
CSA. Nevertheless, to preserve the issue, the court ruled that Stanford could
put on evidence regarding his lack of knowledge that AM-2201 was a CSA, and
the court determined to send the issue to the jury via a special interrogatory.
Stanford represented himself but chose not to testify. After ten days, the
jury returned a guilty verdict on Counts One, Two, Three, Four, Five, Ten,
Eleven, and Thirteen and not-guilty verdicts on the remaining counts. It also
answered “yes” to the special interrogatory regarding Stanford’s knowledge
that AM-2201 was a CSA. Stanford unsuccessfully moved for a new trial,
asserting, among other claims Brady, Jencks Act, and Napue violations.
The district court held an evidentiary sentencing hearing in December
and sentenced Stanford in January 2015. The court determined that the
adjusted offense level on the drug group (Count One) was 30, and the adjusted
offense level on the money-laundering group (Count Three) was 32, and it
selected the higher offense level as the overall basis as required by U.S. Sen-
tencing Guidelines (“U.S.S.G.”) § 3D1.3(b). The advisory range for that offense
level was 121–151 months. The court rejected Stanford’s request for a below-
guidelines sentence and chose the low end of the advisory range—121 months
for Counts One and Three. The court also sentenced Stanford to 60 months on
Counts Two, Four, Five, Ten, Eleven, and Thirteen, to be served concurrently
with the other sentence. The sentence included six years of supervised release
on Count One and three years on the other counts.
III.
Stanford contends that the district court erred by determining that
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knowledge that AM-2201 was a CSA was not a required element under Count
One. In McFadden, 135 S. Ct. at 2303–05, the Court held that to be convicted
under the Analogue Act, 21 U.S.C. § 813, and the Controlled Substances Act,
21 U.S.C. § 841(a)(1), which the Analogue Act incorporates by reference, “the
Government must prove that a defendant knew that the substance with which
he was dealing” was a CSA. Thus, jury instructions that fail to incorporate
that element of knowledge are error, subject to harmlessness analysis.
McFadden, 135 S. Ct. at 2307.
McFadden was decided while this case was on appeal. Stanford claims
that because the district court similarly failed to instruct the jury regarding
knowledge in relation to Count One—conspiracy to distribute and possess with
intent to distribute a CSA—it erred, and the error was not harmless. Stanford
also contends that as a result of the court’s determination that such knowledge
was not a required element, he was denied the opportunity to present a com-
plete defense. In turn, the government concedes that the court’s ruling about
proof of knowledge and its failure to instruct the jury on that element were
likely error but maintains that any error was harmless. We conclude that the
error was not harmless.
A.
In regard to Count One, the district court instructed the jury that it must
be convinced that the government had proved the following elements beyond a
reasonable doubt:
First, that two or more persons, directly or indirectly, reached an
agreement to distribute and/or possess with the intent to distribute a
particular substance;
Second, that the defendant knew what the substance was, in this case
AM-2201;
Third, that AM-2201 was a [CSA];
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Fourth, that the defendant knew the substance was intended for human
consumption;
Fifth, that the defendant knew of the unlawful purpose of the
agreement;
Sixth, that the defendant joined in the agreement willfully, that is, with
the intent to further its unlawful purpose.
After instructing the jury on all the elements for the thirteen counts, the court
added “one last question,” which it told the jury was “unrelated to [its] answers
to the other charges in the indictment.” The court explained that “[t]his ques-
tion is separate and apart from the other questions listed above on the jury
verdict form.” The “sole purpose,” of the “last question is to assist the Court,”
and the jury’s answer “must be unanimous just as it is on the other questions
on the verdict form.” The question was, “During the [relevant] time period . . .
do you find that the defendant, Daniel James Stanford, knew that AM-2201
was a controlled substance analogue?”
Notably, before listing the elements for each count, the court explained
that the government would have to prove each element “beyond a reasonable
doubt.” During its explanation of the final special interrogatory, however, the
court did not mention the standard of proof or direct that the government was
required to prove anything at all in this regard.
1.
Although we typically review jury instructions for abuse of discretion,
when the objection is based on statutory interpretation, review is de novo. See
United States v. Garcia-Gonzalez, 714 F.3d 306, 312 (5th Cir. 2013) (quoting
United States v. Wright, 634 F.3d 770, 774 (5th Cir. 2011)). “Generally, failure
to instruct the jury on every essential element of the offense is error.” United
States v. Williams, 985 F.2d 749, 755 (5th Cir. 1993).
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2.
As the government acknowledges, under McFadden, the failure to
instruct on knowledge in Count One was error. The critical issue is whether it
was harmless. “Erroneous jury instructions are harmless if a court, ‘after a
“thorough examination of the record,” is able to “conclude beyond a reasonable
doubt that the jury verdict would have been the same absent the error.”’” 3
The government contends that the special interrogatory made the error
harmless. Initially, that theory appears strong. In a similar case, United
States v. Dvorak, 617 F.3d 1017, 1026 (8th Cir. 2010), the court concluded that
the presence of a special interrogatory made the failure to instruct on a
required element harmless. Dvorak involved identity theft. At the time of
trial, proof that the defendant knew he was stealing the identities of real
people was not a required element under circuit law; after trial, the Supreme
Court ruled that it was required. Much like the district court a quo, the court
in that case recognized that the issue might later be contested and thus sub-
mitted the question of knowledge via a special interrogatory. Id. at 1025–26.
The Eighth Circuit said that was enough to alleviate any error, reason-
ing that “there [wa]s no need to guess as to whether a rational jury would have
found Dvorak guilty if the proper instructions were given because a rational
jury did find that he met the additional element of the statute—that is, that
he knew the means of identification belonged to another person.” Id. at 1026. 4
Likewise, the government here contends that because the jury made a finding
on the missing element of knowledge, any error in failing to include it as one
3 United States v. Cessa, 785 F.3d 165, 186 (5th Cir. 2015) (quoting United States v.
Skilling, 638 F.3d 480, 482 (5th Cir. 2011)).
4 The court observed that “[c]ommon sense also supports this outcome.” Dvorak,
617 F.3d at 1026. The scheme could work only if Dvorak knew he was stealing the identities
of real children. Id. See infra part III.A.2.a.ii.
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of the elements of Count One was harmless.
There are notable differences between this case and Dvorak. First, there
is nothing to indicate that the court in Dvorak told the jury that the special
interrogatory was only “to assist the Court.” By culling the interrogatory in
this manner, the district court here indicated to the jury that the special inter-
rogatory did not require the same level of attention as did the various counts
of the indictment.
a.
More significantly, in Dvorak, the court instructed the jury on the burden
of proof for the special interrogatory—it had to find “beyond a reasonable
doubt” that the defendant had knowledge. Id. at 1025. Here, the court gave
no instruction on the burden of proof for the interrogatory. Stanford points to
this circuit’s pattern jury instructions, which note that when special interrog-
atories are used to establish additional fact issues, the jury should be asked
what “was proved beyond a reasonable doubt.” 5 The pattern instructions state
generally that the jury “must be convinced that the government has proved
each of the following [elements] beyond a reasonable doubt” and then include
the special interrogatory as one of the elements for the crime at issue. 6 In other
words, the burden of proof precedes the list of elements, and any special inter-
rogatories directly follow that list, appearing to the jury as another element.
The district court employed that format (burden of proof followed by the ele-
ments) for each of the thirteen counts but not in regard to the interrogatory
5 FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS (CRIMINAL CASES) §§ 2.93, 2.95, 2.98
advisory notes (2015) (stating, in the context of controlled-substance convictions, that courts
can employ “a special interrogatory asking the jury to indicate the total amount of the con-
trolled substance it believes was proved beyond a reasonable doubt”); see also United States
v. Arnold, 416 F.3d 349, 356 (5th Cir. 2005) (approving the use of special interrogatories).
6 See, e.g., FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS (CRIMINAL CASES) § 2.93.
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(neither treating it as its own count nor making it appear as an additional
element under Count One).
Thus, Stanford reasons that, because the court separated the special
interrogatory from Count One, as well as from all of the other counts, and told
the jury it was “separate and apart” from the other issues, the jury could not
have known what standard of proof to employ. 7 In response, the government
points to various other places in the instructions where the court said that the
government had the burden of proof beyond a reasonable doubt. 8
For example, before delving into any of the specific counts, the court told
the jury that “it is your job to decide whether the government has proved the
guilt of the defendant beyond a reasonable doubt.” Indeed, the court men-
tioned the reasonable-doubt standard at least eight times in the overview por-
tion of the instructions, apart from its recitation of the burden of proof before
each count. The government claims that because it was the only standard of
proof mentioned, the jury must have known to apply the reasonable-doubt
standard to the special interrogatory. Therefore, to decide the overall issue of
whether the interrogatory made the failure to instruct the jury on knowledge
harmless, we must determine whether the failure to specify the burden of proof
for the interrogatory was itself harmless.
7 The verdict form itself did not list any burden of proof—this was contained only in
the jury instructions.
8The government claims that Stanford never objected to the language of the special
interrogatory but only to its placement. Yet, by objecting to the exclusion of the scienter
requirement from Count One, Stanford preserved the beyond-a-reasonable-doubt issue; there
was no need for the interrogatory to state the burden of proof if it was one of the elements in
Count One. Additionally, Stanford requested that the interrogatory be placed immediately
below Count One, and he specifically proposed that the instruction include the “beyond a
reasonable doubt” language.
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i.
A threshold question is whether harmless-error analysis applies at all
where the district court does not state the burden of proof. Under McFadden,
135 S. Ct. at 2307, there is little doubt that failure to instruct on the element
of knowledge is subject to review for harmlessness and does not require auto-
matic reversal. There the Court remanded for consideration of harmless error.
There is, however, no case directly on point for how to review failure to provide
the standard of proof for a special interrogatory.
In Sullivan v. Louisiana, 508 U.S. 275, 277 (1993), the trial judge gave
the wrong definition of reasonable doubt (nearly identical to another jury
instruction that had been held unconstitutional), and the Court held that it
was error, not subject to harmless-error analysis. Id. at 277–81. Without the
proper standard of proof, there was “no jury verdict of guilty-beyond-a-
reasonable-doubt,” making “the question whether the same verdict of guilty-
beyond-a-reasonable-doubt would have been rendered absent the constitu-
tional error . . . utterly meaningless.” Id. at 280.
The inquiry, in other words, is not whether, in a trial that occurred
without the error, a guilty verdict would surely have been rendered, but
whether the guilty verdict actually rendered in this trial was surely un-
attributable to the error. That must be so, because to hypothesize a
guilty verdict that was never in fact rendered—no matter how in-
escapable the findings to support that verdict might be—would violate
the jury-trial guarantee.
Id. at 279. Here, one could reach a similar conclusion—because the jury was
not given a standard of proof for the special interrogatory, it issued no actual
verdict on the knowledge question; thus, there is no jury determination to
review for harmlessness.
Nevertheless, in Neder v. United States, 527 U.S. 1, 15, 19–20 (1999), the
Court held that where a court failed to instruct on an entire element of the
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crime, the error was subject to harmlessness analysis, and the Court in fact
found it harmless. The trial court had erroneously decided not to submit the
issue of materiality to the jury as one of the elements of filing a false tax return;
instead the court determined that it was an issue for the judge, not the jury.
Id. at 6. Concluding that such a mistake did not require automatic reversal,
the Court distinguished “structural” errors, which are “subject to automatic
reversal,” from the “traditional harmless-error inquiry.” Id. at 8, 14. Struc-
tural errors are limited to a narrow class of cases that “infect the entire trial
process,” necessarily rendering “a trial fundamentally unfair.” Id. at 8 (quoting
Brecht v. Abrahamson, 507 U.S. 619, 630 (1993); Rose v. Clark, 478 U.S. 570,
577 (1986)). In contrast, typical harmless-error inquiries involve errors with
far more limited effects.
The Neder Court observed that “[i]t would not be illogical to extend the
reasoning of Sullivan from a defective ‘reasonable doubt’ instruction to a fail-
ure to instruct on an element of the crime.” Id. at 15. Nevertheless, the Court
noted other cases in which the jury was instructed on the wrong legal test (or
not instructed at all), yet the Court had found the error subject to harmlessness
analysis. 9 Considering that precedent, as well as the fact that reversal would
send the case back for retrial on other contested issues, while the defendant
had not contested the evidence of materiality, the Court concluded that the
9 Neder, 527 U.S. at 11–12, 15 (citing Pope v. Illinois, 481 U.S. 497, 499–503 (1987)
(holding that error in instructing on the wrong First Amendment standard for obscenity was
subject to harmless-error analysis); California v. Roy, 519 U.S. 3, 5 (1996) (per curiam) (hold-
ing that an instruction for conviction of first degree murder that failed to inform the jury that
it must find that the defendant had the “intent or purpose” of aiding the confederate’s crime
was subject to harmless-error analysis); Carella v. California, 491 U.S. 263, 264, 266 (1989)
(per curiam) (holding that an instruction containing an unconstitutional conclusive presump-
tion was subject to harmless-error analysis)). See also Rose v. Clark, 478 U.S. 570, 576–77,
579–80 (1986) (holding that an unconstitutional instruction regarding malice in a murder
case was subject to harmless-error analysis).
17
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failure to instruct on materiality also was subject to harmless-error analysis.
Id. Therefore, at least in Neder, the Court rejected the formal, categorical
approach in favor of a functional, case-by-case determination regarding
whether an instruction error can be considered harmless.
Thus, on one side, Sullivan holds that an instruction stating the wrong
standard of proof can never be harmless, and, on the other, Neder holds that
omitting an entire element is subject to harmless-error analysis. In the wake
of Sullivan, it may be tempting to place all errors regarding the standard of
proof in the same box—automatic reversal—but that is hard to reconcile with
Neder. Notably, Sullivan involved an instruction stating the wrong standard
of proof; that is different from providing no standard at all, or stating the
correct standard but discussing it only in relation to other charges.
Omission of the standard of proof appears closer to the omission of an
entire element in Neder than to instruction on the wrong standard in Sullivan.
We can assume that in Sullivan the jury must have applied the wrong stan-
dard, because the only instruction on the burden of proof was erroneous 10; here,
however, it is certainly possible that the jury applied the correct standard—it
was properly instructed on beyond-a-reasonable-doubt in the overview portion
of the instructions. Additionally, though Neder did not overrule Sullivan, the
Court retreated from a formalistic approach to questions of error in jury
instructions, following the case-by-case determination of harmlessness that it
had applied previously. 11 All of these considerations lead us to conclude that
10Cf. Yates v. Evatt, 500 U.S. 391, 403 (1991) (explaining that when a “trial court has
instructed a jury to apply an unconstitutional presumption, a reviewing court can hardly
infer that the jurors failed to consider it”), disapproved of on other grounds by Estelle v.
McGuire, 502 U.S. 62, 72 n.4 (1991).
11Before Neder, we also had conflicting decisions regarding whether failure to instruct
on an element of the crime was subject to harmless-error analysis. See United States v.
18
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omission of the standard of proof in a special interrogatory is subject to
harmless-error analysis.
ii.
Neder is instructive on whether omission of the standard of review is
harmless. The Court explained that “no jury could reasonably find that
Neder’s failure to report substantial amounts of income on his tax returns was
not ‘a material matter.’” Id. at 16. If the missing income was not material,
there was no reason for Neder to exclude it from his tax returns. Therefore,
“[t]he failure to report such substantial income incontrovertibly establishe[d]
that Neder’s false statements were material to a determination of his income
tax liability.” Id. Indeed, the “evidence supporting materiality was so over-
whelming, in fact, that Neder did not argue to the jury—and d[id] not argue
[before the Court]—that his false statements of income could be found im-
material.” Id. In sum, the missing element was logically encompassed by a
guilty verdict and was not in fact contested. 12
Similarly, in Dvorak, 617 F.3d at 1026, the court, when considering
whether the failure to instruct the jury on knowledge was harmless, observed,
in addition to its analysis on the special interrogatory, that it would have been
impossible for the defendant to conduct his identity-theft scheme without
Oreira, 29 F.3d 185, 189 n.6 (5th Cir. 1994) (collecting cases). Yet, foreshadowing Neder, in
Oreira we employed a harmless-error analysis. Id.
12Nevertheless, the Court was careful to avoid saying that the jury actually made a
finding on materiality, merely stating, instead, that no jury could have reached the opposite
conclusion. Justice Stevens contended that the verdict “necessarily included” a determina-
tion on materiality. Neder, 527 U.S. at 27 (Stevens, J. concurring). In response, the majority
explained that that was “incorrect” because “the [district] court explicitly directed the jury
not to consider the materiality of any false statements.” Id. at 16 n.1. Nonetheless, even if
the jury made no actual finding, the best reading of the opinion is that the verdict was “the
functional equivalent” of a materiality finding, given that there was no reason for the defen-
dant to exclude the missing income from his tax returns if it was not material. Id. at 26
(Stevens, J. concurring).
19
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knowledge that he was stealing the identities of real children—the “scheme
could only work if the children actually existed.” Thus, a finding of knowledge
was logically implicit in the guilty verdict on identity theft. Therefore, in both
Neder and Dvorak the error was considered harmless where proof of the ele-
ment missing from the instruction was inherent in proof of the overall convic-
tion, so the jury could not have failed to find the element.
Here, on the other hand, the missing standard of proof was not intrinsi-
cally linked to the answer to the special interrogatory. The jury could have
found that Stanford knew AM-2201 was a CSA, with or without assurance
beyond a reasonable doubt. It may very well be that the jury imported the
reasonable-doubt standard into the interrogatory, given the fact that the court
mentioned that standard multiple times in its overview of the case. 13 Yet, it is
also entirely plausible that, after finding Stanford guilty, the jury hastily
answered the extra question without considering any degree of certainty,
because it was told that the interrogatory was only for the benefit of the court
and was “separate and apart” from the indictment.
Without a recital of the burden of proof, we, in addition to being unaware
of the level of certainty for the jury’s determination that Stanford had knowl-
edge, also do not know whether the jury thought the government had met the
burden to prove such knowledge. Before listing the elements for each of the
counts, the court told the jury that it must be convinced that the government
had proved guilt beyond a reasonable doubt. For the special interrogatory, the
13 Indeed, one could aver (as the government does) that the multiple mentions of the
standard of proof in the overview portion of the instructions means that the jury almost cer-
tainly applied the reasonable-doubt standard to the special interrogatory. If the court had
merely provided that standard in the overview and had not repeated it before each count,
this would be a persuasive presumption. Instead, the repetition of the standard before each
count is contrasted with its notable absence before the interrogatory.
20
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court merely asked the jury to determine whether Stanford “knew that
AM-2201 was a controlled substance analogue.” The government’s burden of
proof was not mentioned at all (presumably because the court had ruled that
the government did not need to prove knowledge). It is one thing to think that
Stanford had knowledge (regardless of what has been proved) and another to
decide that the government actually has demonstrated such knowledge.
These uncertainties indicate that the failure to specify the burden of
proof was not harmless. The cases cited by the government do not counsel the
opposite holding. To support its claim that omitting the reasonable-doubt stan-
dard was harmless, the government points to a decision that the failure to
include the “beyond a reasonable doubt” language in one portion of the jury
instruction was harmless where “the trial judge advised the jury at seven dif-
ferent points in the instructions that they must find the defendant guilty
beyond a reasonable doubt.” United States v. Brown, 522 F.2d 10, 11 (9th Cir.
1975) (per curiam). Nevertheless, in Brown, the omission of the burden of proof
did not occur in relation to a specific count or element of a crime but, instead,
in a preamble to the instruction to be careful of bias or prejudice that “might
affect a juror’s verdict.” Id. at 12. 14 The court had used the “beyond a reason-
able doubt” phrase in “its instruction on the presumption of innocence,” “its
instructions on the quantum of proof necessary for a verdict of guilty,” “in stat-
ing the burden of the Government to prove ‘every essential element’ of the
crime charged,” “in stating the rule for finding guilt by circumstantial
14 The erroneous instruction read,
If you find that the law has not been violated as charged, you should not hesitate for
any reason to return a verdict of not guilty. If, however, you find that the law has
been violated as charged, you shouldn’t hesitate for any reason to return a verdict of
guilty because of some emotional problem like one of sympathy or bias or prejudice.
Brown, 522 F.2d at 11. “Beyond a reasonable doubt” should have been included after “find’
in the first sentence. Id. at 11 n.1.
21
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evidence,” and, perhaps most importantly, before its charge “on proof of the
elements.” Id. at 11–12. Additionally, because the defendant had failed to
object to the instruction at trial, the court’s review was only for plain error. Id.
at 11. Brown involved no special interrogatory and is easily distinguishable.
The government also cites Gorin v. United States, 313 F.2d 641, 654 (1st
Cir. 1963), for the proposition that when only one standard is given, we should
presume that the jury applied it to all questions. There the court vacated a
conviction where the only burden of proof mentioned in the jury instructions
was “beyond a reasonable doubt,” yet the defendant’s actual burden for a cer-
tain defense was only a “preponderance of the evidence.” Id. That decision
surely does not establish that the instant district court’s failure to specify the
burden of proof in relation to the special interrogatory was harmless. If any-
thing, one could claim under Gorin that failure to specify a standard of proof
in relation to a specific issue is not harmless. The government cites no other
cases to support its position.
We ordinarily presume that jurors “follow the instructions they are
given.” Yates, 500 U.S. at 403 (citing Richardson v. Marsh, 481 U.S. 200, 211
(1987)). Conversely, absent an appropriate instruction, we cannot presume
that the jurors applied the correct standard of proof. Yet, a defendant is “indis-
putably entitle[d]” to “a jury determination that [he] is guilty of every element
of the crime with which he is charged, beyond a reasonable doubt.” 15 Where,
as here, the court gives a separate, special interrogatory, instructs the jurors
that it is only for the benefit of the court, and does not recite the burden of
proof before the interrogatory (but does recite the burden of proof before each
of the actual counts), we cannot conclude beyond a reasonable doubt that the
15 Apprendi v. New Jersey, 530 U.S. 466, 477 (2000) (quoting United States v. Gaudin,
515 U.S. 506, 510 (1995)).
22
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jury applied the reasonable-doubt standard to the interrogatory. 16 The error
was not harmless.
b.
This case differs from Dvorak and Neder in another respect. As dis-
cussed, in both of those cases a finding on the missing element was inherent in
the other elements that the jury actually found. In contrast to the knowledge
at issue in Dvorak or the materiality at issue in Neder, here a finding that
Stanford knew that AM-2201 was a CSA was not logically inherent in proof of
Count One. Indeed, concluding that he knew that his co-conspirators were
distributing AM-2201 and that AM-2201 is in fact a CSA is different from find-
ing that he knew that AM-2201 was a CSA. That is especially true given the
conspirators’ attempts to stay one step ahead of the law by selling drugs that
had not yet been scientifically proven to be similar to marihuana or JWH-018.
Although the government posits that the issue was actually before the
jury in the form of the special interrogatory (and putting aside any concerns
about the burden of proof), that is not the end of the relevant analysis. The
jury was merely asked whether Stanford “knew that AM-2201 was a controlled
substance analogue?” There was no instruction on what knowledge meant or
how proof of knowledge could be demonstrated.
In McFadden, the Court outlined two ways to prove knowledge that a
substance is a CSA. First, knowledge “can be established by evidence that a
defendant knew that the substance with which he was dealing is some
16This conclusion might appear remarkably like a rule that failure to specify the bur-
den of proof in relation to a special interrogatory is automatically subject to reversal, so no
harmless-error analysis is required (following Sullivan rather than Neder). Nevertheless,
there could be some situations in which the failure to specify the standard of proof might be
harmless (for example if the court listed the standard of proof only in the overview and did
not repeat it for each of the various counts). We express no view on such hypotheticals.
23
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controlled substance—that is, one actually listed on the federal drug schedules
or treated as such by operation of the Analogue Act—regardless of whether he
knew the particular identity of the substance.” McFadden, 135 S. Ct. at 2305.
In other words, if a defendant “know[s] that the white powder [he is distribut-
ing] is listed on the schedules even if he does not know precisely what sub-
stance it is,” he is “guilty of knowingly distributing ‘a controlled substance.’”
Id. at 2304. Because there is little doubt that Stanford knew that the conspir-
acy was dealing AM-2201, this method of proof appears inapt.
The second method of proof of knowledge “can be established by evidence
that the defendant knew the specific analogue he was dealing with, even if he
did not know its legal status as an analogue.” Id. at 2305.
The Analogue Act defines a controlled substance analogue by its fea-
tures, as a substance “the chemical structure of which is substantially
similar to the chemical structure of a controlled substance in sched-
ule I or II”; “which has a stimulant, depressant, or hallucinogenic effect
on the central nervous system that is substantially similar to or greater
than” the effect of a controlled substance in schedule I or II; or which is
represented or intended to have that effect with respect to a particular
person.
Id. (quoting 21 U.S.C. § 802(32)(A)). Thus, “[a] defendant who possesses a sub-
stance with knowledge of those features knows all of the facts that make his
conduct illegal . . . .” Id. He “need not know of the existence of the Analogue
Act to know that he was dealing with ‘a controlled substance.’” Id. In other
words, if Stanford knew that AM-2201 was substantially similar to JWH-018
in its chemical structure and produced a substantially similar “high,” he had
the requisite knowledge that AM-2201 was a CSA. There is little doubt that
this is a significantly greater burden of proof than just demonstrating that he
knew the conspirators were distributing AM-2201 and that AM-2201 was in
fact a CSA.
Yet at the time of trial, the Supreme Court’s explication on the two ways
24
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to prove knowledge had not yet been announced, so the jury was not instructed
on those tests. Though it is theoretically possible that the jury divined the
second method of proof based on the instruction in Count One on how to deter-
mine whether AM-2201 was a CSA (it had to have both a similar chemical
structure and similar stimulant effect to JWH-018), that is a significant pre-
sumption, especially given that the interrogatory was discussed at the end of
the instructions, with twelve other counts between it and Count One.
The government claims that there was, nonetheless, ample proof that
Stanford knew AM-2201 was a CSA, pointing to evidence that he was present
for discussions of the similarity of AM-2201 to JWH-018 both structurally and
in its physical effects on users. 17 Yet, it is one thing for the government to look
back now that the Court has provided the proper framework and pick out evi-
dence that fits into that framework; it is another to assume that the jury
focused on the same evidence, without the benefit of that framework, when it
answered the special interrogatory. We do not know whether, in answering it,
the jury credited the testimony to which the government directs us.
Therefore, because the jury was not aware of the Supreme Court’s test
for proof of knowledge, the special interrogatory did not render harmless the
failure to instruct on proof of knowledge, even apart from the missing specifi-
cation of the burden of proof. The attempt to avoid retrial by submitting the
special interrogatory was laudable but ultimately unsuccessful.
B.
Stanford maintains that the district court’s determination that knowl-
edge was not a required element under Count One prevented him from
17Stanford attempts to rebut that evidence by pointing to testimony that he was pres-
ent for only part of those discussions, and he also claims that he did not have the scientific
training to assess the chemical similarity of the two drugs.
25
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presenting a complete defense. Without unambiguously identifying a consti-
tutional source, the Supreme Court has repeatedly recognized that the “Consti-
tution guarantees criminal defendants ‘a meaningful opportunity to present a
complete defense.’” 18 “The right to present a complete defense under the Sixth
Amendment ‘is an essential attribute of the adversary system.’” 19 Violations
of a right to present a complete defense “are reviewed for harmless error.” 20
1.
Because they focus on a missing element, Neder and Dvorak are the
decisions most on point, despite that they are focused on harmlessness from
the perspective of a jury’s not being instructed on an element rather than on a
defendant’s being unable to make a complete defense. 21 Cases involving a
claim that the defendant was denied the right to present an adequate defense
typically involve the court’s excluding certain testimony or evidence rather
than a contention that the defendant would have changed his trial strategy if
18 Nevada v. Jackson, 133 S. Ct. 1990, 1992 (2013) (quoting Crane v. Kentucky,
476 U.S. 683, 690 (1986)). See also Holmes v. South Carolina, 547 U.S. 319, 324 (2006) (not-
ing that this right could be rooted in the Due Process Clause or in the Compulsory Process or
Confrontation Clause of the Sixth Amendment).
19 United States v. Ramos, 537 F.3d 439, 448 (5th Cir. 2008) (quoting United States v.
Mizell, 88 F.3d 288, 294 (5th Cir. 1996)).
20 Id.; see also Crane, 476 U.S. at 691. Cf. Neder, 527 U.S. at 15; McFadden, 135 S. Ct.
at 2307, both holding that a district court’s omission of a required element (albeit in the con-
text of jury instructions) is reviewed for harmless error.
21 Where a district court rules that proof of a required element is not necessary, a
claim that a defendant was denied the ability to present a complete defense is essentially the
inverse of a claim that the jury instructions were inadequate. We have observed the close
relationship between these two claims in the context of the refusal to deliver a defense-
requested jury instruction. The third prong of our test for error in this regard is whether the
requested instruction “concerns an important point in the trial so that the failure to give it
seriously impaired the defendant’s ability to effectively present a given defense.” United
States v. John, 309 F.3d 298, 304 (5th Cir. 2002) (quoting United States v. Grissom, 645 F.2d
461, 464 (5th Cir. Unit A May 1981)).
26
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he had known a particular element was required. 22
As we have noted, to evaluate harmlessness, the courts in Neder and
Dvorak asked whether proof of the missing element was an inherent part of
the proof at trial. See supra part III.A.2.a.ii. Thus, in Neder, 527 U.S. at 16–
17, the Court noted that evidence of materiality was logically inherent in
Neder’s failure to report his actual income. Indeed, the government’s evidence
of materiality was so significant that Neder did not even try to dispute it. Id.
at 16. And in Dvorak, 617 F.3d at 1026, the court noted that evidence of the
missing element of knowledge that the defendant was stealing the identities of
real people was inherent in the overall proof regarding the identity-theft
scheme. Applying the reasoning of those cases, the critical question is whether
proof rebutting the missing element of knowledge was inherent in Stanford’s
defense of other elements.
The government misses the point in focusing only on the evidence actu-
ally presented at trial. Cobbling together evidence that the prosecution offered
for other issues to demonstrate that Stanford likely had the requisite knowl-
edge ignores the possibility that he might have done more to counter that evi-
dence if he had known that it mattered for the verdict. As we have said, proof
that he knew that AM-2201 was a CSA is quite different from proof that he
knew his coconspirators were selling AM-2201 and proof that it is in fact
a CSA.
Assuming arguendo that the government presented sufficient evidence
of knowledge to convict, if Stanford was not on notice that he needed to combat
such proof, we cannot conclude that he had the chance to present a complete
22See, e.g., United States v. Skelton, 514 F.3d 433, 445 n.7 (5th Cir. 2008) (determining
that a district court’s limitations on cross-examination violated the right to present a com-
plete defense).
27
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defense. Just as the jury did not know of the two methods for proof of knowl-
edge outlined in McFadden, Stanford also was oblivious of them. Without
awareness of the relevant legal standards, he could not have determined the
best way to defend against proof of knowledge.
Stanford contends that if he had known that knowledge was a required
element of the conspiracy charge, he “would have focused his defense on that
element because it was the weak link in the government’s case.” Specifically,
he claims that he would have called a forensic chemist, Lindsay Reinhold, to
testify that in “late 2011 there were no generally accepted scientific criteria for
determining whether a substance satisfied the statutory definition of a con-
trolled substance analogue.” Instead, Stanford argues that the “court’s ruling
that knowledge was not an element of the drug conspiracy required [him] to
adopt a different trial strategy.”
The government, citing United States v. Clements, 73 F.3d 1330, 1336
(5th Cir. 1996), responds that absent a proffer of truth at trial, there is no way
to assess the “potential admissibility, value, and effectiveness” of this testi-
mony. 23 The government is correct that we cannot determine the potential
added value of Reinhold’s testimony. Without further information, we do not
know whether it would have been admissible, and if it was, we do not know
whether the jury would have credited it. See, e.g., Apprendi, 530 U.S. at 490.
The fact that we cannot assess the potential value of this evidence does
not mean that Stanford should be denied the opportunity to present it. It could
23 The government also claims that at least one district court has “rejected” Reinhold’s
testimony in a case involving AM-2201 case, although that is not entirely accurate. In United
States v. Bays, No. 3:13-CR-0357-B, 2014 WL 3764876, at *8 (N.D. Tex. July 31, 2014), the
court distinguished the defendant’s interpretation of a statement, made by Reinhold, that
was used in an evidentiary exhibit submitted by the government. It did not “reject” Rein-
hold’s testimony but noted that “substantial similarity is not a scientific question and there
is no requirement that experts agree on its exact definition.” Id.
28
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No. 15-30127
be that Reinhold’s testimony would have been excludable or unhelpful; indeed,
if Stanford were retried and given the opportunity to present Reinhold’s testi-
mony, it might make no difference to the outcome. But we should not prejudge
a defendant’s trial strategy. The error is not harmless unless proof of the miss-
ing element was inherent in proof of one of the others.
There is a further wrinkle. The district court ruled that knowledge was
not required, but before trial it also informed Stanford that it would send this
issue to the jury via a special interrogatory. The court said it would allow him
“to put on evidence” regarding his “lack of knowledge that AM-2201 was a
controlled substance analogue.” Thus, Stanford was not without notice that
the issue would go to the jury, and in theory he was given the opportunity to
rebut evidence of such knowledge.
In fact, the government claims that Stanford did attempt to establish a
defense to knowledge that AM-2201 was a CSA, for example, “by cross exam-
ining the government’s expert chemists and other witnesses on the difficulty a
layperson might have in discerning the similarities between two chemical com-
pounds.” According to the government, Stanford “made good use of any favor-
able testimony on these points.” Indeed, in his closing statement, he claimed
he was unaware AM-2201 was illegal. 24
Thus, if Stanford was on notice that the issue would be going to the jury,
24Nonetheless, Stanford also contends that the court denied him the ability to rebut
a finding of knowledge by sustaining an objection to his question of when Francis “kn[e]w
that AM-2201 was an analogue.” Stanford claims that if Francis did not know AM-2201 was
an analogue, there was no way he could have informed Stanford that it was an analogue.
The court ruled that this question went to the ultimate issue of whether AM-2201 was an
analogue, so it barred Francis from answering. Even assuming that this testimony would
have made a difference in Stanford’s ability to rebut a finding of knowledge, the ruling
appears correct. A significant part of the case was a determination that AM-2201 was an
analogue, and Federal Rule of Evidence 704 was not “intended to allow a witness to give legal
conclusions.” Owen v. Kerr-McGee Corp., 698 F.2d 236, 240 (5th Cir. 1983).
29
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and did in fact attempt to defend himself from a finding of knowledge, it is
harder to conclude that he was denied the ability to make a complete defense.
We are left with his claim that he would have structured his defense differently
if he were aware that knowledge was a required element. That is not an unrea-
sonable assertion. Even though Stanford was aware that the jury would be
ruling on whether he knew AM-2201 was a CSA, if the government did not
have to prove such knowledge to convict him, it makes sense that Stanford
would expend less energy on this issue. Additionally, as discussed, he could
not have been aware of the two Supreme Court-sanctioned methods for proving
such knowledge, so he lacked the notice needed to prepare an appropriate
defense. It follows that the error was not harmless. 25
IV.
Stanford maintains that a new trial is called for because the government
solicited (or failed to correct) false testimony in violation of Napue v. Illinois,
360 U.S. 264 (1959). We review an order denying a new trial for abuse of dis-
cretion. United States v. Wall, 389 F.3d 457, 465 (5th Cir. 2004). “This stan-
dard is necessarily deferential to the trial court because we have only read the
record, and have not seen the impact of the witnesses on the jury or observed
the demeanor of the witnesses ourselves, as has the trial judge.” United States
v. O’Keefe, 128 F.3d 885, 893 (5th Cir. 1997). Where there are mixed questions
of law and fact, as in Napue-based claims, we review “the underlying facts for
abuse of discretion, but the conclusions to be drawn from those facts de novo.”
Wall, 389 F.3d at 465.
25 This does not mean that all of Stanford’s attempts to rebut a finding of knowledge
must be allowed in the event of a retrial on remand. The court should apply the normal rules
of evidence to the admission of testimony. See Ramos, 537 F.3d at 448 (explaining that the
right to present a complete defense “is limited and must be weighed against the countervail-
ing interests in the integrity of the adversary process”).
30
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“[A] new trial based upon a Napue violation is proper only if (1) the state-
ments in question are shown to be actually false; (2) the prosecution knew that
they were false; and (3) the statements were material.” O’Keefe, 128 F.3d
at 893. Even assuming that the prosecution presented (or failed to correct)
false testimony, the critical factor is materiality. “It is axiomatic that not every
lie is material.” Id. at 894. The Supreme Court has “defined materiality in
terms of a ‘reasonable probability’ of a different outcome,” id. (quoting Kyles v.
Whitley, 514 U.S. 419, 434 (1995)), which “results when nondisclosure places
the case in a different light so as to undermine confidence in the verdict,” id.
This is determined by examining “the challenged evidence collectively, not on
an item-by-item basis.” Id. “To say that an error did not contribute to the
verdict is, rather, to find that error unimportant in relation to everything else
the jury considered on the issue in question, as revealed by the record.” Id.
(quoting Yates, 500 U.S. at 403).
Stanford claims that there were three main presentations of false testi-
mony. First, he posits that Francis lied by testifying to phone conversations
he had with Stanford between September and November 2011. Stanford points
to records from his cell phone, subpoenaed by the government, that do not show
any calls to him from Francis’s cell phone or landline until November 8. 26 That
26 Stanford claims that, after trial, he obtained “his own telephone records” that, he
says, prove that Francis’s “calls to Stanford in late August 2011” were “lies.” The government
contends that this evidence was “newly discovered.” Under the “Berry rule,” see Berry v.
Georgia, 10 Ga. 511 (1851), if the basis for the motion requesting a new trial is newly dis-
covered evidence, the defendant must show
(1) that the evidence is newly discovered and was unknown to him at the time of
trial; (2) that the failure to discover the evidence was not due to his lack of diligence;
(3) that the evidence is not merely cumulative, but is material; and (4) that the evi-
dence would probably produce an acquittal.
United States v. Turner, 674 F.3d 420, 429 (5th Cir. 2012) (quoting United States v. Black-
thorne, 378 F.3d 449, 452 (5th Cir. 2004)). In Napue cases, the fourth factor is relaxed from
31
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theory, however, overlooks the possibility that Francis called Stanford from
another phone—at a hotel, or perhaps on a burner phone. Additionally, Fran-
cis’s emails to Stanford in August 2011 imply that they spoke via the phone;
one dated August 26 specifically mentions a “call.” Yet even if no call occurred,
Francis’s emails to Stanford make it obvious that he was communicating with
Stanford as early as August, which undermines Stanford’s contention that he
did not become involved in the conspiracy until later. Thus, Stanford’s claim
about the phone records—even if true—does not rise to the level of materiality.
Next, Stanford maintains that the prosecution solicited false testimony
from Francis implying that Stanford was listed on the agenda to present about
the RCA at the December 7 meeting. That agenda showed “Dan” as discussing
the RCA, and both Francis and Stanford have a first name of Daniel. Francis
testified that he presented on the RCA, and Stanford also spoke “on behalf of”
the RCA at the meeting. The prosecutor immediately followed up: “Okay. So
here you have an explanation in this as Dan generically in the RCA. Regard-
less of who that is, is that an accurate reflection of the RCA’s presentation and
who was going to participate?” Francis agreed: “Yes.”
That testimony, which did not definitively state that “Dan” referred to
Stanford, hardly seems false. Stanford does not deny that he spoke, and it was
requiring evidence that “would probably produce an acquittal” to creating “any reasonable
likelihood that the false testimony affected the judgment of the jury.” Wall, 389 F.3d at 473.
Because his phone records were already in the government’s possession at the time of
trial (and presumably because he had access to them as well), Stanford urges that they cannot
be “newly discovered.” Yet, he misapprehends the Berry rule. The fact that he could have
obtained his phone records merely demonstrates that he fails the Berry test, and there was
no justification for a new trial. See United States v. Riley, 544 F.2d 237, 240 (5th Cir. 1976).
Stanford’s claim also appears disingenuous. His reply brief to the government’s oppo-
sition to his request for a new trial referred to “newly discovered information” and attached
the telephone records. Thus, apart from the materiality problems discussed above, there is
an additional reason to deny Stanford’s Napue claim based on the telephone calls.
32
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his discussion of the RCA at the meeting that mattered for purposes of assess-
ing his involvement with the conspiracy, regardless of whether he was origin-
ally scheduled to speak. The testimony is not material.
The most objectionable testimony regarding the agenda came during
Stanford’s cross-examination of Espinoza, who testified that “Dan” on the
agenda referred both to Dan Francis and Dan Stanford. Yet, “when the defense
elicits the alleged perjury on cross-examination, no material falsehood has
occurred because the government has not itself knowingly presented false tes-
timony.” O’Keefe, 128 F.3d at 894. If Espinoza’s testimony was wrong, as Stan-
ford contends, it was Stanford’s duty to correct him. There were no material
falsehoods regarding the agenda.
Stanford avers that payments made to him “were falsely represented as
RCA dues.” He claims that the government elicited false testimony that checks
made out to him by Buswell and Barrow that had “RCA dues,” “retainer,” and
“legal services” written in the memo line were in fact RCA dues. Stanford’s
claim regarding the checks that had “RCA dues” written on them does not pass
the straight-face test. Similarly, Stanford presents scant evidence that checks
with the memo lines of “retainer” or “legal services” were for something other
than his RCA work.
As an example, Stanford points to a check of $12,500 written by Barrow
on October 28, 2011, noting “retainer” in the memo line. Barrow testified that
the check was “to get the RCA off and funded.” Yet, Stanford contends that his
own business records indicate he was hired by Barrow “out of concern that his
association with Buswell, then under indictment for securities fraud, might
draw law enforcement scrutiny on him.” 27 Even if Barrow was lying about the
27 Nevertheless, Stanford was not given a chance to impeach Barrow with these
33
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reason for that check, there was enough other evidence connecting Stanford to
the conspiracy financially—the checks that explicitly said “RCA dues.”
Even if some of the checks for legal fees were not related to the RCA, at
least two (for $16,250 and $19,000) included the words “RCA dues,” linking
Stanford to the conspiracy. Stanford tries to come up with an alternate explan-
ation for one of those checks, pointing to alleged inconsistencies in testimony
about the check. 28 Yet, considering the plain language—“RCA dues”—the jury
was entitled to draw its own conclusions about the purpose. Any inconsisten-
cies in testimony are not material. In sum, although the falsehoods that Stan-
ford alleges are based on apparent evidentiary inconsistencies, it is question-
able whether one could describe the inconsistencies as false, let alone material.
Stanford posits that the government erred by evaluating each piece of
evidence individually and contends that we should follow the Ninth Circuit and
consider the materiality of Napue violations cumulatively. 29 Those decisions
are not binding on this circuit, but even if we were to analyze Stanford’s Napue
claims cumulatively, combining the alleged falsehoods does not amount to a
violation, because the whole is the sum of the parts. As the district court
observed, “[t]he alleged peripheral inconsistencies upon which the Defendant
focuses . . . were immaterial to the trial’s outcome.” Stanford’s Napue claims
have no merit.
business records, because the court ruled that they were inadmissible for lack of notice by
Stanford under Federal Rule of Evidence 902(11). Even if that ruling was error, as Stanford
contends, the conflict between Barrow’s testimony and Stanford’s business records is not
material, as we have said.
28 The $19,000 check written by Buswell/Curious Goods stated “Boyd’s RCA dues to
be deducted from Miyagi bill,” implying, without directly saying so, that that check was for
both of their RCA dues. Stanford claims that Barrow never gave Curious Goods the refer-
enced deduction.
29See Phillips v. Ornoski, 673 F.3d 1168, 1188–89 (9th Cir. 2012); Jackson v. Brown,
513 F.3d 1057, 1076 (9th Cir. 2008).
34
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V.
Stanford says that the government failed to disclose Brady material. 30
Though we generally review the denial of a motion for a new trial for abuse of
discretion, we “consider alleged Brady violations de novo.” Turner, 674 F.3d
at 428. Brady requires the government to disclose any exculpatory material in
its possession. “When a defendant seeks a new trial on the basis of withheld
information, he must show that: ‘(1) the prosecution did not disclose the evi-
dence; (2) the evidence was favorable to the defense; and (3) the evidence was
material.’” United States v. Barraza, 655 F.3d 375, 380 (5th Cir. 2011) (quoting
United States v. Davis, 609 F.3d 663, 696 (5th Cir. 2010)). “Favorable evidence”
is evidence that “is exculpatory or impeaching,” but evidence is material only
“if there is a reasonable probability that the result of the proceeding would
have differed had the prosecution disclosed the evidence.” Id.
Stanford urges us to adopt the approach of three other circuits and hold
that a defendant need only be able to raise “a colorable claim” that the un-
disclosed material contained favorable evidence. 31 Stanford implies that the
government should have disclosed any notes from its interviews with wit-
nesses, reasoning that “[i]t seems too plain for argument that rough notes from
any witness interview could prove to be Brady material.” 32 Yet, putting aside
that the “colorable claim” standard is not the law in this circuit, Stanford
misreads the cases from other courts. In the same breath that it quoted the
30 See Brady v. Maryland, 373 U.S. 83 (1963). In his briefing, Stanford also argued
that the government failed to disclose material required by the Jencks Act, but he abandoned
that claim at oral argument.
31See United States v. Williams-Davis, 90 F.3d 490, 514 (D.C. Cir. 1996) (quoting
United States v. Ramos, 27 F.3d 65, 71 (3d Cir. 1994)); see also United States v. Griffin, 659
F.2d 932, 939 (9th Cir. 1981).
32Ramos, 27 F.3d at 70 (quoting United States v. Harrison, 524 F.2d 421, 427 (D.C.
Cir. 1975)).
35
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colorable-claim standard, the court in Williams-Davis stated that it was
“unwise to infer the existence of Brady material based upon speculation alone.”
Williams-Davis, 90 F.3d at 514 (quoting Ramos, 27 F.3d at 71). Indeed, the
court went hold to hold that the Brady claim was meritless because it was
based on “bare speculation.” Id. Likewise, in Ramos, 27 F.3d at 71, the court
rejected, on the basis of “mere possibility,” the claim that destroyed notes of
witness interviews “might have included Brady material.”
Similarly, Stanford’s argument is pure conjecture. He contends that the
government’s case shifted over time—focusing on him only after other conspir-
ators had become cooperating witnesses—and he surmises that this must mean
that the witnesses’ stories changed. 33 According to Stanford, “the sheer num-
ber of times the prosecution interviewed the cooperating co-defendants sug-
gests that the disclosures either changed or grew.” Next, Stanford claims that
the government must have made notes or reports of these witness interviews,
which must have contained exculpatory material, requiring the government to
disclose them.
Stanford has no evidence to support any of these allegations. It is hardly
surprising that the government’s case grew as it further investigated the con-
spiracy. The fact of multiple interviews of witnesses (which hardly seems
abnormal in a case as complicated as this) does not mean that the witnesses
were changing their stories. Indeed, the more likely explanation is that, as the
government built its case, it had new questions for the co-conspirators. Thus,
33 For example, Stanford claims that at the second trial the government placed state-
ments that he allegedly made about his supposed agreement with the attorney general much
earlier in the conspiracy than it had at the first trial. Stanford argues that the government’s
case increased notably after Buswell’s guilty plea, but the government failed to call Buswell
at trial, “likely because he lacked credibility.” In other words, Stanford implies that Buswell
was lying and that those lies were passed on to the other witnesses who testified against
Stanford.
36
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Stanford’s conjectures cannot rise to the level of even a “colorable claim” of
Brady material.
Similarly, Stanford’s notions about the existence of reports or notes from
the witness interviews are also speculative. Although the government may
have notes from its witness interviews (and the government implicitly ac-
knowledged that at oral argument), Stanford has not pointed to particular doc-
uments that he believes contain Brady material. Nor does he appear to have
requested in camera review of specific documents for Brady purposes. 34
“[R]eliance on the government’s assurance that it is not in possession of any
Brady material may be sufficient when the defense makes a blanket request
for favorable material in the government files.” United States v. Diaz-Munoz,
632 F.2d 1330, 1334 (5th Cir. Unit B 1980). Stanford’s Brady argument is
unavailing.
VI.
Stanford contends that even if they are insufficient to constitute error
individually, cumulatively the government’s failures to provide Brady material
and correct falsehoods in violation of Napue amount to reversible error. “We
have repeatedly emphasized that the cumulative error doctrine necessitates
reversal only in rare instances and have previously stated en banc that ‘the
possibility of cumulative error is often acknowledged but practically never
found persuasive.’” United States v. Delgado, 672 F.3d 320, 344 (5th Cir. 2012)
(en banc) (quoting Derden v. McNeel, 978 F.2d 1453, 1456 (5th Cir. 1992)
(en banc)). More importantly, “non-errors have no weight in a cumulative error
analysis.” Id. Because we have rejected Stanford’s claims of error under both
34Cf. United States v. McKinney, 758 F.2d 1036, 1052 (5th Cir. 1985) (“McKinney does
not point to specific documents that may contain exculpatory evidence.”).
37
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Napue and Brady, together they cannot constitute cumulative error. “[T]here
is nothing to accumulate.” Id.
VII.
Stanford claims that the district court erred in sentencing by (1) equat-
ing AM-2201 to THC; (2) employing a 1:167 ratio to equate AM-2201 to mari-
huana; (3) using a starting date of August 22 for Stanford’s participation in the
conspiracy; (4) changing the method for calculating the base offense level for
money laundering; (5) adding two levels to the base offense level for money
laundering; and (6) not giving a two-level credit for a minor role. There is no
error. 35
We employ a two-step process to review a sentence. “First, we must
‘ensure that the district court committed no significant procedural error, such
as failing to calculate (or improperly calculating) the Guidelines range, treat-
ing the Guidelines as mandatory, [or] failing to consider the § 3553(a) fac-
tors.’” 36 “Second, if the sentence is procedurally sound or if the procedural error
is harmless, this Court ‘consider[s] the substantive reasonableness of the sen-
tence imposed.’” 37 Both steps use an abuse-of-discretion standard 38 under
which “[w]e review the district court’s legal interpretation of the Sentencing
35At oral argument, Stanford’s counsel agreed that any McFadden error affects only
Count One. Thus, the reversal on that court has no effect on the sentence related to any
other counts.
36United States v. Robinson, 741 F.3d 588, 598 (5th Cir. 2014) (quoting United States
v. Cisneros–Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008)).
37 Id. (quoting United States v. Neal, 578 F.3d 270, 273 (5th Cir. 2009)).
38United States v. Fuentes, 775 F.3d 213, 218 (5th Cir. 2014) (per curiam); see also
United States v. Alaniz, 726 F.3d 586, 618 (5th Cir. 2013). But see Robinson, 741 F.3d at 598
(holding that harmless-error review applies to step one (procedural reasonableness) and
abuse-of-discretion review to step two (substantive reasonableness)).
38
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Guidelines de novo and factual findings for clear error.” 39 “A factual finding is
clearly erroneous only if, based on the entirety of the evidence, the reviewing
court is left with the definite and firm conviction that a mistake has been
made.” Brooks, 681 F.3d at 712. “A factual finding is not clearly erroneous if
it is plausible in light of the entire record.” Id. If an objection is “not properly
preserved, we review only for plain error.” Alaniz, 726 F.3d at 618.
A.
Stanford assigns error to the district court’s equation of AM-2201 to syn-
thetic tetrahydrocannabinol (“THC”). Generally, U.S.S.G. § 2D1.1 supplies the
offense levels for controlled-substance violations by relying on 21 U.S.C.
§ 841(b)(1) for the sentences and equivalency levels. See U.S.S.G. § 2D1.1,
application note 8(A). Nevertheless, because § 841(b)(1) only “provides direc-
tion for the more common controlled substances,” where a substance is not
listed in the statute, the application notes say to identify the base offense level
using the following method:
(i) Use the Drug Equivalency Tables to convert the quantity of the con-
trolled substance involved in the offense to its equivalent quantity of
marihuana.
(ii) Find the equivalent quantity of marihuana in the Drug Quantity
Table.
(iii) Use the offense level that corresponds to the equivalent quantity of
marihuana as the base offense level for the controlled substance
involved in the offense.
U.S.S.G. § 2D1.1, application note 8(A). If, however, a controlled substance is
listed in neither the Drug Equivalency Table nor the Drug Quantity Table, the
court is to “determine the base offense level using the marihuana equivalency
39 United States v. Brooks, 681 F.3d 678, 712 (5th Cir. 2012); see also Robinson,
741 F.3d at 598; Fuentes, 775 F.3d at 218.
39
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of the most closely related controlled substance referenced in this guideline.”
U.S.S.G. § 2D1.1, application note 6.
JWH-018, the controlled substance for which AM-2201 is an analogue,
does not appear in the tables. The district court therefore had to determine
which controlled substance listed in the tables was closest to JWH-018. The
court decided that the closest was THC, which Stanford claims was error. But
as he recognizes, that was the issue in United States v. Malone, 809 F.3d 251
(5th Cir. 2015). Indeed, Stanford adopted the portion of Malone’s brief dealing
with that issue. In Malone, we upheld the determination that THC was the
closest controlled substance to JWH-018 and thus to AM-2201. Id. at 256–58.
Malone forecloses Stanford’s claim.
B.
Stanford contends that the district court erred by applying a 1:167 ratio
to JWH-018 and, by extension, to AM-2201. That ratio was a direct result of
finding that THC is the closest controlled substance to JWH-018 listed in the
guidelines. The Drug Equivalency Tables list 1 gram of THC as equal to 167
grams of marihuana. See U.S.S.G. § 2D1.1, application note 8(D).
1.
We make the same decision here as in Malone. Stanford points to testi-
mony from Dr. Nicholas Cozzi contending that there is no scientific basis for
the 1:167 ratio. Yet, that testimony is actually from Malone’s trial, so we are
foreclosed from reevaluating it under our rule of orderliness. 40 Notwithstand-
ing expert testimony “that the 1:167 ratio has no scientific basis, this Court
40 See Teague v. City of Flower Mound, 179 F.3d 377, 383 (5th Cir. 1999). Likewise,
we are foreclosed from evaluating United States v. Hossain, No. 15-cr-14034, 2016 WL 70583
(S.D. Fla. Jan. 5, 2016), which Stanford cites, in which the district court chose to vary from
the 1:167 ratio based on Cozzi’s testimony.
40
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has squarely held that district courts are not required to engage in ‘a piece-by-
piece analysis of the empirical grounding behind each part of the sentencing
guidelines’ and ignore those parts that do not pass empirical muster.” Malone,
809 F.3d at 258 (quoting United States v. Duarte, 569 F.3d 528, 530 (5th Cir.
2009). Stanford’s second allegation of sentencing error also is foreclosed.
2.
In a related argument, Stanford contends that the district court erred by
failing to recognize its authority, conferred by Kimbrough v. United States,
552 U.S. 85 (2007), to vary from the 1:167 ratio for converting THC to mari-
huana. We also considered Kimbrough in Malone, 809 F.3d at 258–60, and
determined that it was “unclear whether the district court properly understood
its discretion under Kimbrough”; nevertheless, we held that any error was
harmless. The same statement from the district court regarding its authority
to deviate from the guidelines calculation that we found ambiguous in Malone
is at issue here, because the defendants in the conspiracy had a joint hearing
on the matter. Thus, in regard to the ambiguity of the statement, we are bound
by Malone. 41
As in Malone, any error was harmless. In United States v. Groce,
784 F.3d 291 (5th Cir. 2015), we explained that “[a]n erroneous guidelines
range calculation is harmless if ‘(1) [ ] the district court would have imposed
the same sentence had it not made the error, and (2) [ ] it would have done so
41The government urges that Stanford failed to preserve his Kimbrough claim because
“he never specifically objected on the ground that the district court misunderstood the nature
and extent of its discretion in that regard.” The government made the same argument in
Malone. See United States v. Malone, No. 14-31426, Brief of Appellee at 20–21. There, we
did not consider whether this claim called for plain-error review, nor did we discuss the
appropriate standard of review. See Malone, 809 F.3d at 258–60. It would not be proper here
to apply a plain-error standard to the Kimbrough claim to reach a different conclusion (i.e.
that the district court’s statement was not ambiguous).
41
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for the same reasons it gave at the prior sentencing.’” Id. at 296 (quoting
United States v. Ibarra–Luna, 628 F.3d 712, 714 (5th Cir. 2010)). “To satisfy
these requirements, there must be ‘evidence in the record that will convince
[this court] that the district court had a particular sentence in mind and would
have imposed it, notwithstanding the error.’” Id. (quoting Ibarra–Luna,
628 F.3d at 718). It is the government that has the “heavy burden” of “convin-
cingly demonstrat[ing] that the sentencing court actually would have followed
the very same reasoning absent the error.” Robinson, 741 F.3d at 603 (quoting
Ibarra–Luna, 628 F.3d at 717).
In Malone, 809 F.3d at 260, we recognized this “heavy burden” and held
that the government had met it because “there [wa]s nothing in the record to
indicate that the district court was inclined to vary from the 1:167 ratio or
pronounce a lesser sentence.” Instead, “the district court repeatedly com-
mented on the ‘seriousness of the offense’ and declined to accept the extent of
the Government’s recommended § 5K1.1 departures.” Id.
There is even more support for harmlessness here. In contrast to an
absence of statements indicating that the district court was likely to impose a
lower sentence, the court provided affirmative evidence that it had a particular
sentence in mind. The court stated that it had given “great thought” to the
defendant’s request “to give a variance” from the calculated guideline range of
121 to 151 months. It noted that it had “carefully examined the 3553(a) factors,
including the nature and characteristics of the offense . . . and the characteris-
tics of the defendant.” Nevertheless, “[b]ecause of the numerous convictions,”
it did “not believe that the guideline range, as calculated by the Court, over-
state[d] Mr. Stanford’s culpability in this matter.” Indeed, it was “troubled by
Mr. Stanford’s lack of remorse” and thus concluded that “a guideline sentence
[was] justified.” All of this indicates that the court would have imposed the
42
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same sentence notwithstanding any Kimbrough error. 42
Despite its finding of harmlessness, the panel in Malone remanded “for
the limited purpose of clarifying the district court’s understanding of its discre-
tion under Kimbrough and, if appropriate, its willingness to deviate from the
advisory range on such grounds.” Malone, No. 14-31426, Order Granting Lim-
ited Remand, Doc. No. 119 (Feb. 2, 2016). Because there is a stronger basis for
concluding here that any Kimbrough error would not have changed the overall
sentence, we decline to remand. The government has met its “heavy” burden
by showing, from the record, that the district court had a particular sentence
in mind.
C.
Stanford assigns error to the district court’s identification of August 22
as the beginning of his involvement in the conspiracy; Stanford says it should
be November 1. His theory is that based on bank and phone records, the
alleged meetings that various witnesses testified occurred between and among
Stanford, Barrow, and Espinoza could not have happened until mid-September
at the earliest. Even if they occurred in August, as the government contends,
Stanford claims that his knowledge of the conspiracy was limited and that
there was insufficient evidence that he knew then of the scheme’s criminal
nature. He maintains that November 1 is appropriate because that was three
days after Barrow had written the check for the alleged RCA dues and two
days before Stanford’s meeting with Francis, which resulted in his letter to a
television reporter on behalf of the “yet-to-be formed Louisiana RCA.”
42Stanford contends that the district court’s rejection in Malone of the government’s
recommendation for a downward departure under U.S.S.G. § 5K1.1 carries “more weight” in
the harmless-error analysis than does the rejection of his request for a below-guidelines sen-
tence here. Nevertheless, the court did more than reject Stanford’s request for a lower
sentence―it affirmatively explained why it thought its chosen sentence was appropriate.
43
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There is no error. The court based its August 22 date on the first email
from Francis to Stanford. Francis testified that the email was a follow-up to a
telephone call with Stanford, although Stanford claims that the phone records
indicate that that never happened. That email, which contained only attach-
ments related to the RCA, suggests that Francis had spoken to Stanford, given
that it seems improbable that he would send, to someone to whom he had never
spoken, a blank email with attachments. The follow-up email Francis sent on
August 26 specifically refers to a possible misunderstanding “on the call,” pro-
viding strong evidence that a call actually had occurred. Thus, there is good
reason to suppose that Francis and Stanford were talking on the phone by late
August. Yet, even without any phone calls, Francis’s emails to Stanford indi-
cate that they were communicating during that time.
Although the scope of Stanford’s knowledge in August is uncertain, at a
minimum, given the documents Francis emailed to him, Stanford must have
known that the RCA was attempting to skirt the law (one such document is a
guide to “Police Interaction,” while another discussed avoiding product names
“that insinuate[] a relationship to natural cannabis”). Dating Stanford’s
involvement in the conspiracy to his first-documented interaction with Francis
regarding the RCA does not rise to clear error if it is error at all.
D.
Stanford contends that the district court erred by changing the method
for calculating the base offense level for money laundering at the sentencing
hearing. The guidelines outline two ways to calculate the base offense level for
money laundering:
(1) The offense level for the underlying offense from which the laun-
dered funds were derived, if (A) the defendant committed the underly-
ing offense (or would be accountable for the underlying offense under
subsection (a)(1)(A) of § 1B1.3 (Relevant Conduct)); and (B) the offense
44
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level for that offense can be determined; or
(2) 8 plus the number of offense levels from the table in § 2B1.1 (Theft,
Property Destruction, and Fraud) corresponding to the value of the
laundered funds, otherwise.
U.S.S.G. § 2S1.1(a). The presentence report (“PSR”) used the second method.
Nevertheless, at the sentencing hearing the prosecutor contended that the first
method was the appropriate one, and the court agreed. Although Stanford does
not dispute that the court’s method was correct, he claims that its decision to
switch from the second method to the first at the hearing deprived him of the
right to notice under Federal Rule of Criminal Procedure 32(i)(1)(C) and
U.S.S.G. § 6A1.3, which require that parties are given a chance to comment on
disputed factors. 43
“[T]he touchstone of [R]ule 32 is reasonable notice to allow counsel ade-
quately to prepare a meaningful response and engage in adversary testing at
sentencing.” 44 The notice requirement applies to facts underlying the sentenc-
ing determination, not to legal rules the district court employs. Indeed, it is
“[f]actual matters not included in the presentence report” that should “be dis-
closed in advance of sentencing so that the government and the defendant are
able to contest inaccuracies.” 45 Thus, when evaluating notice in Garcia,
43 Stanford bases this argument on Burns v. United States, 501 U.S. 129, 136 (1991).
Nevertheless, Burns dealt with a district court’s determination to depart from the guidelines
sua sponte, which the Court held required notice to the parties. Burns did not deal with a
court’s decision to apply one method of calculation found in the guidelines instead of another.
In any case, in Irizarry v. United States, 553 U.S. 708, 715 (2008), the Court overruled Burns.
44 United States v. Garcia, 797 F.3d 320, 323 (5th Cir. 2015) (quoting United States v.
Angeles–Mendoza, 407 F.3d 742, 749 n.12 (5th Cir. 2005)); see also Irizarry, 553 U.S. at 715
(“Sound practice dictates that judges in all cases should make sure that the information pro-
vided to the parties in advance of the hearing, and in the hearing itself, has given them an
adequate opportunity to confront and debate the relevant issues.”).
45 3 CHARLES A. WRIGHT & SARAH N. WELLING, FEDERAL PRACTICE & PROCEDURE:
CRIMINAL § 529 (4th ed. 2011). See also Irizarry, 553 U.S. at 715 (noting the “factual basis
for a particular sentence” that can come as a surprise and create potential notice problems).
45
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797 F.3d at 323, we discussed the defendant’s “actual knowledge of the facts
on which the district court base[d] an enhancement or a denial of a
reduction.” 46
In contrast, “if the defendant has actual knowledge of the facts on which
the district court bases an enhancement or a denial of a reduction, the Sen-
tencing Guidelines themselves provide notice of the grounds relevant to the
proceeding sufficient to satisfy the requirements of Rule 32 and U.S.S.G.
§ 6A1.3.” United States v. Knight, 76 F.3d 86, 88 (5th Cir. 1996); see also
Garcia, 797 F.3d at 323. “We do not believe that the Guidelines themselves
are too complicated, or that the average defense counsel is insufficiently
skilled, to render adequate preparation unduly difficult without specific notice
of all grounds for an enhancement or for a denial of a reduction.” Knight,
76 F.3d at 88.
Stanford knew all of the underlying facts that led the court to apply the
first method of calculation under Section 2S1.1(a). He therefore had sufficient
notice that that method of calculating his base offense level might be more
appropriate than the method recommended in the PSR. Notably, in regard to
the base offense level for money-laundering, the PSR stated that the “guideline
for 18 U.S.C. § 1956(h) offenses is found in USSG § 2S1.1 of the guidelines.”
Though it went on to discuss the application of Section 2S1.1(a)(2), a careful
look at Section 2S1.1 could have indicated to Stanford that calculation under
Section 2S1.1(a)(1) was also a possibility. 47
46At issue was testimony the court considered from a different criminal trial that was
not included in the PSR. Garcia, 797 F.3d at 325.
47The PSR also stated that Stanford should be held accountable for $4,202,332 of the
conspiracy proceeds and relied on that number in calculating the base offense level for the
money-laundering group. Stanford objected at the sentencing hearing, and the court agreed,
ruling that the “base offense level should be based on the actual amount that Mr. Stanford
was found by the jury to launder of $143,000.” If Stanford had no problem with the court’s
46
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Additionally, even if the court had erred by denying him notice, Stanford
cannot demonstrate that such an error would have affected his “substantial
rights.” FED. R. CRIM. P. 52(a). Because Stanford was a part of the conspiracy
that produced the laundered funds, Section 2S1.1(a)(1), not (a)(2), was the
proper method. On appeal, Stanford does not claim otherwise or indicate how
he would have objected to the decision if he had notice of the possibility of sen-
tencing under (a)(1). The application of (a)(1) did not violate Stanford’s right
to notice, and even if it had, any error was harmless. 48
E.
Stanford contends that the district court erred by adding a two-level
enhancement under U.S.S.G. § 2S1.1(b)(2)(B), which says to increase the base
offense level by two levels “[i]f the defendant was convicted under 18 U.S.C.
§ 1956.” Stanford avers that there was insufficient evidence to show a convic-
tion under § 1956.
Because Stanford did not preserve an objection, our review is only for
plain error. See Alaniz, 726 F.3d at 618. “We find plain error when (1) there
was an error or defect; (2) the legal error was clear or obvious, rather than
subject to reasonable dispute; and (3) the error affected the defendant’s sub-
stantial rights.” United States v. Juarez, 626 F.3d 246, 254 (5th Cir. 2010).
When considering the sufficiency of the evidence, we are “highly deferential”
relying (based on his own objection) on these different facts (i.e. the different dollar amount)
to calculate the base offense level, he likewise should have no issue with the court’s decision
(based on the government’s objection) to apply a different rule to calculate the base offense
level.
48 Cf. United States v. Zelaya-Rosales, 707 F.3d 542, 545 (5th Cir. 2013) (holding that
even though the court’s lack of notice regarding its intent to depart upward from the guide-
lines was in error, it did not affect the defendant’s substantial rights when he did not dispute
the accuracy of the facts that led to the variance nor demonstrate “a reasonable probability
that the district court would have imposed a lesser sentence if it had given him notice of its
intent to depart from the Guidelines”).
47
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and “view the facts in the light most favorable to the verdict.” United States v.
Kuhrt, 788 F.3d 403, 413 (5th Cir. 2015) (quoting United States v. Moreno–
Gonzalez, 662 F.3d 369, 372 (5th Cir. 2011)). The critical question “is whether,
after viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime
beyond a reasonable doubt.” Id. (quoting Jackson v. Virginia, 443 U.S. 307,
319 (1979)).
Stanford contends that there was insufficient evidence to support a con-
spiracy to violate 18 U.S.C. § 1956(a)(1)(A)(i). At issue is Count Three, which
charged Stanford with conspiring to engage in money-laundering in violation
of both 18 U.S.C. § 1956(a)(1)(A)(i) and 18 U.S.C. § 1957(a). The conspiracy
itself was a violation of 18 U.S.C. § 1956(h), which provides that “Any person
who conspires to commit any offense defined in this section or section 1957
shall be subject to the same penalties as those prescribed for the offense the
commission of which was the object of the conspiracy.” Because § 1956(h) ties
the penalty for its violation to the penalty for the crime that is the object of the
conspiracy, the question is whether the evidence was sufficient for conviction
of a conspiracy to violate § 1956(a)(1)(A)(i). 49 The penalty for a violation of
§ 1956(a) is greater than for § 1957(a). Compare 18 U.S.C. § 1956(a)(1) with
18 U.S.C. § 1957(b)(1). Similarly, U.S.S.G. § 2S1.1(b)(2)(B) directs a two-level
enhancement for convictions under § 1956, while U.S.S.G. § 2S1.1(b)(2)(A)
instructs only a one-level enhancement for convictions under § 1957. 50
49 Stanford does not dispute the conviction of a conspiracy to violate § 1957(a).
50It is only Stanford’s conviction for a conspiring to violate § 1956(a)(1)(A)(i) that could
provide the basis for the two-level enhancement. Although he was generally convicted under
Count Three for violating § 1956(h), the application notes instruct that the two-level enhance-
ment for convictions under § 1956 found in Section 2S1.1(b)(2)(B) does not apply “if the defen-
dant was convicted of a conspiracy under 18 U.S.C. § 1956(h) and the sole object of that con-
spiracy was to commit an offense set forth in 18 U.S.C. § 1957.” U.S.S.G. § 2S1.1, application
48
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“To sustain a conviction under the money laundering promotion statute
[18 U.S.C. § 1956(a)(1)(A)(i)], the Government must show that the defendant:
(1) conducted or attempted to conduct a financial transaction, (2) which the
defendant then knew involved the proceeds of unlawful activity, (3) with the
intent to promote or further unlawful activity.” 51 Stanford disputes the appli-
cation of the third element, whether he had the requisite “intent to promote or
further unlawful activity.”
To satisfy the intent requirement, “the government must show the trans-
action at issue was conducted with the intent to promote the carrying on of a
specified unlawful activity.” United States v. Trejo, 610 F.3d 308, 314 (5th Cir.
2010) (citing United States v. Brown, 186 F.3d 661, 670 (5th Cir. 1999)). “It is
not enough to show that a money launderer’s actions resulted in promoting the
carrying on of specified unlawful activity.” Id. Instead, the “the evidence must
show that the defendant’s conduct not only promoted a specified unlawful
activity but that he engaged in it with the intent to further the progress of that
activity.” Id.
Where the underlying unlawful activity is drug distribution, “courts have
often relied on proof that the defendant was aware of the inner workings of
and/or extensively involved in the drug organization responsible for the crim-
inal activity as circumstantial proof that he had the specific intent to promote
its unlawful purpose.” Id. at 315. Indeed, “in the context of a sufficiency chal-
lenge to a money-laundering conspiracy . . . direct evidence ‘is unnecessary;
each element may be inferred from circumstantial evidence.’” Cessa, 785 F.3d
at 174 (quoting United States v. Fuchs, 467 F.3d 889, 906 (5th Cir. 2006)).
note 3(C).
51United States v. Brown, 553 F.3d 768, 782 (5th Cir. 2008) (quoting United States v.
Miles, 360 F.3d 472, 477 (5th Cir. 2004)).
49
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Stanford contends that he could not have had the specific intent to promote the
conspiracy because he used the payments received from Buswell and Barrow
for legitimate personal expenditures. According to Stanford, “[t]here was no
evidence that he funneled the payments back into the distribution of Mr.
Miyagi, as did most of his co-defendants.”
Stanford’s argument focuses on what he did after he received the pay-
ments, not the transactions by which he received payment in the first place.
The statute does not require that one receive proceeds from illicit activity and
then funnel them back into the activity; it merely requires that one conduct (or
attempt to conduct) “a financial transaction which in fact involves the proceeds
of specified unlawful activity . . . with the intent to promote the carrying on of
specified unlawful activity.” § 1956(a)(1)(A)(i). In other words, if the transac-
tion by which one receives illicit funds is made with the intent to promote un-
lawful activity, the statute can be violated. Thus, by being paid to help further
the Mr. Miyagi scheme with proceeds from the sales of Mr. Miyagi, Stanford
engaged in promotional money laundering. It does not matter how he spent
the tainted funds after receiving them. 52
This is not a novel interpretation of the statute. We have evaluated
money-laundering cases in which a person was allegedly hired to provide ser-
vices to a criminal ring and paid with illicit proceeds. For example, in Cessa,
785 F.3d at 173–75, a defendant was convicted of “concealment money launder-
ing.” Concealment money laundering, which violates § 1956(a)(1)(B)(i)), is
52 This is why Stanford’s discussion of Brown, 186 F.3d at 670, is not on point. At
issue there was a downstream transaction—using funds already obtained from illicit activ-
ities to pay legitimate business expenses. We specifically noted that the government could
have prosecuted the initial act of receiving and depositing illicit funds even if it could not
prosecute for later spending those dirty funds on legitimate business activities. Id. at 668
n.12. Here, the issue is the initial receipt of illicit funds for the purposes of furthering crim-
inal activity, not how Stanford spent the funds after receiving them.
50
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identical to promotional money laundering, which violates § 1956(a)(1)(A)(i),
except that concealment money laundering requires knowledge “that the
transaction’s design was to conceal or disguise the nature or source of the ille-
gal proceeds,” while promotional money laundering requires an “intent to pro-
mote or further illegal actions.” Cessa, 785 F.3d at 174 n.6. Both concealment
and promotional money-laundering require a “financial transaction,” which
“involves the proceeds of specified unlawful activity.” § 1956(a)(1).
Cessa involved the question whether a defendant, who provided horse-
training services to a horse-race fixing, narcotics-trafficking conspiracy, had
committed concealment money laundering when he was paid with illicit funds.
Cessa, 785 F.3d at 175. We concluded that there was insufficient evidence that
the defendant had “joined the conspiracy knowing the conspiracy’s purpose
was to conceal drug money.” Id. at 179. He was merely a horse trainer and
not “aware of the inner workings of [the] criminal narcotics-trafficking organi-
zation.” Id. Nevertheless, we did not rule out the possibility that someone
with the requisite level of knowledge (or specific intent) who was hired to pro-
vide services to a criminal organization and paid in proceeds from its criminal
operations could be found to have engaged in money laundering.
Although “merely providing services to a known drug dealer and accept-
ing the proceeds of the illegal activity as payment is insufficient as a matter of
law to establish criminal liability for money laundering,” one who engages in
all of the above and voluntarily joins the conspiracy “knowing its purpose and
with the intent to further the illegal purpose” may be convicted of money laun-
dering. Id. (quoting Fuchs, 467 F.3d at 906). The critical issue is whether
Stanford “was aware of the inner workings” of the conspiracy “or extensively
involved” in it. Trejo, 610 F.3d at 315. Under our highly deferential review of
the facts underlying the conviction, there is plenty of evidence to support an
51
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affirmative answer to both questions.
Stanford was paid with illicit funds not merely to provide traditional
legal services to the conspirators, but also to assist the Mr. Miyagi scheme in
crucial ways. For example, Stanford promoted the falsehood regarding the
attorney general, sent information to the local press about Mr. Miyagi, and
handled police interactions with the conspirators. As the December 7 meeting
indicates, Stanford was an integral player who helped sell the distribution
scheme to franchisees. 53 There appears little doubt that he was both aware of
the inner workings of the drug conspiracy and extensively involved in it.
Thus, Stanford meets all three elements of a conspiracy to violate
§ 1956(a)(1)(A)(i)—he engaged in a financial transaction (he was hired by the
conspirators) that he knew involved illicit proceeds (sales of Mr. Miyagi) with
the specific intent of furthering the drug scheme (by providing integral support
to the conspiracy). See Brown, 553 F.3d at 782. There was sufficient evidence
to support the conviction of a conspiracy to violate § 1956(a)(1)(A)(i), and the
two-level enhancement was not error. 54
F.
Stanford asserts that the district court erred by not giving him a two-
level minor-role reduction in the offense level for money-laundering conspiracy
under U.S.S.G. § 3B1.2. Stanford’s theory is convoluted, but he seems to be
53 Even without the conviction under Count One, Stanford knew that he was promot-
ing illicit activities by supporting the conspiracy in such a manner. As his conviction under
Count Two (which he does not challenge) demonstrates, he was well aware that the conspir-
acy was unlawful by introducing misbranded drugs into interstate commerce.
54 Alternatively, Stanford maintains that because the verdict form for Count Three
did not allow the jury to specify whether it was finding him guilty of conspiring to engage in
money-laundering under § 1956(a)(1)(A)(i) or under § 1957, it violated his rights under
Apprendi. Stanford makes this argument for the first time in his reply brief, so it is waived.
See Flex Frac Logistics, L.L.C. v. N.L.R.B., 746 F.3d 205, 208 (5th Cir. 2014) (explaining that
“arguments raised for the first time in a reply brief are waived”); FED. R. APP. P. 28(a)(8)(A).
52
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claiming that once the offense level for money laundering was based on the
underlying offense from which the laundered funds were derived—drug distri-
bution—then his sentence was also based on laundering the total proceeds.
Apparently, Stanford believes this was the rationale for the decision to deny
the reduction. In reality, Stanford claims that he was only a minor participant
in the money-laundering scheme.
Yet, there is nothing to indicate that the district court held Stanford
responsible for laundering all of the funds from the drug-distribution scheme.
Instead, the court found that he was responsible for laundering only $143,000
and explicitly declined to hold him liable for laundering the full $4,202,332
derived from drug proceeds. Additionally, the court specifically referred to the
application notes to U.S.S.G. § 2S1.1, which explain that the decision to grant
a reduction under § 3B1.2(b) remains tied to the actual laundering of funds,
not “the underlying offense from which the laundered funds were derived.”
U.S.S.G. § 2S1.1, application note 2(C). Thus, the court understood that the
propriety of a Section 3B1.2(b) reduction should be based on the money Stan-
ford actually laundered, not the total drug proceeds. Stanford points to nothing
in the record indicating otherwise, making his claim without merit.
The fact that Stanford received a minor-role reduction for the drug dis-
tribution offense does not mean that he automatically should have received a
minor-role reduction for the money-laundering offense. Although, as the dis-
trict court found, Stanford was responsible for laundering only $143,000, he
was also fully responsible for laundering all of these funds—he was directly
involved in all of the transactions totaling $143,000. He might have looked
like a minor participant if all of the money-laundering transactions totaling
$4,202,332, were considered. But because the district court specifically deter-
mined that for sentencing purposes it could look only to the $143,000, no one
53
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could say he was a minor participant in the laundering of those funds. “[W]hen
a sentence is based on an activity in which a defendant was actually involved,
§ 3B1.2 does not require a reduction in the base offense level even though the
defendant’s activity in a larger conspiracy may have been minor or minimal.”
United States v. Atanda, 60 F.3d 196, 199 (5th Cir. 1995) (per curiam) (citations
omitted).
The judgment of conviction and sentence is REVERSED on Count One,
AFFIRMED on all other counts, and REMANDED for any other proceedings
as needed.
54