U.S. v. Leed ( 1992 )


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  •                    UNITED STATES COURT OF APPEALS
    for the Fifth Circuit
    _____________________________________
    No. 91-1434
    ____________________________________
    UNITED STATES OF AMERICA,
    Plaintiff-Appellee,
    VERSUS
    ROY LEE LEED,
    Defendant-Appellant.
    ______________________________________________________
    Appeal from the United States District Court
    for the Northern District of Texas
    ______________________________________________________
    (January 4, 1993)
    Before POLITZ, Chief Judge, GARWOOD and DAVIS, Circuit Judges.
    DAVIS, Circuit Judge.
    Roy Lee Leed (Leed) appeals his conviction and sentence on
    charges   of   possession   of   a   listed   chemical   with   intent   to
    manufacture a controlled substance and conspiracy to commit the
    same offense.    Leed argues primarily that the government produced
    insufficient evidence to support his conviction.          He also argues
    that the district court erred when it used U.S.S.G. § 2D1.1 in
    calculating the appropriate sentencing guideline range.           We find
    sufficient evidence to support the jury's verdict and find that the
    district court correctly applied the sentencing guidelines.              We
    therefore affirm Leed's conviction and sentence.
    I.
    In   August   1990,   a   confidential      informant,     Jerry   Pierce
    (Pierce), informed the DEA that John Watkins (Watkins) wished to
    purchase     a   110-pound   keg    of    phenylacetic    acid,    a   federally
    regulated chemical used in the manufacture of amphetamine and
    methamphetamine.       Pierce then worked under DEA supervision in
    attempting to negotiate a sale of the chemical to Watkins.                Pierce
    permitted DEA agents to record telephone negotiations he had with
    Watkins for this purpose.          Agents identified John Watkins as the
    subscriber of the telephone number Pierce called.
    On August 17, DEA agents recorded several conversations that
    failed to produce a definitive agreement.             In the first telephone
    call, Watkins stated that he was interested in making a deal, but
    that   he   needed   an   hour     to    obtain   assistance.      During   this
    conversation, Watkins agreed to provide an "eight ball" or a
    "quarter" of "powder" as a portion of the purchase price.                   When
    Pierce telephoned Watkins about one hour later, Watkins stated that
    he would be ready to make a deal as soon as he heard from "her."
    Two hours later, Watkins still had been unable to reach his
    contact.    In a later conversation that day, Watkins arranged to go
    forward with the purchase on Monday, August 20, 1990.
    During a conversation on August 20, Watkins expressed relief
    when Pierce stated that he could deliver a 110-pound keg of the
    chemical rather than a 55-gallon barrel.                 During a subsequent
    conversation in which Pierce and Watkins discussed a meeting place,
    Watkins stated his concern about some unusual police activity in a
    2
    parking lot near his house.         After Watkins tested his telephone
    lines and was satisfied that he was not under surveillance, he
    agreed to proceed with the deal.            In an unrecorded telephone call,
    Watkins and Pierce agreed that the transaction would take place in
    the parking lot of a boot store.            Watkins agreed to pay $5,500 and
    to provide "powder" in exchange for the 110-pound keg.                 Watkins
    told Pierce to expect an individual in a white-over-gold Cadillac
    and to wait for the individual to give the signal by wiping his
    brow.    Pierce expected that Watkins would drive the Cadillac.
    Later, on August 20, Pierce and DEA agent William Bryant
    (Bryant) drove to the meeting place in a white cargo van containing
    the unmarked keg of phenylacetic acid.            The phenylacetic acid had
    a strong, distinctive odor, so strong that it could be smelled
    outside of the cargo van.           The driver of the white-over-gold
    Cadillac, later identified as Leed, then drove near the cargo van,
    looked around the parking lot, and wiped his brow with his hand.
    Pierce and Bryant wiped their brows in reply.                 Leed exited the
    Cadillac, approached the cargo van, and handed a plastic grocery
    bag to Bryant.     Leed stated that the bag contained $5,500 and asked
    Bryant   if   he   wanted   to   load   the    phenylacetic    acid   into   the
    Cadillac.     Bryant asked Leed to get inside of the van while he
    counted the money.
    Inside the grocery bag, Bryant found a number of cracker
    packages and a package wrapped in white freezer paper. Leed stated
    that he had wrapped the money in the freezer paper to make the
    package look like a sandwich.       Bryant asked Leed if he had brought
    3
    any powder with him, but Leed stated that they didn't have any
    powder "at that time."        Also, when Bryant asked Leed if his people
    would be interested in making future purchases, Leed replied that
    "I was just sent here to pick up the package, but I'm sure my
    people would want to buy all they could get their hands on."                Leed
    provided Bryant with a knife to cut the package open, and Bryant
    counted the money.       After Bryant, Pierce, and Leed loaded the
    phenylacetic    acid   into    the   trunk   of    the   Cadillac,   Leed   was
    arrested.
    DEA agents searched the Cadillac and found a notebook in a
    briefcase. The notebook contained the name John and the same phone
    number that Pierce had used to make telephone calls to John
    Watkins.    The agents also found a spiral notebook in the briefcase
    containing a list of things to do, one of which was to call "Pappy"
    at Watkins' telephone number.
    In an attempt to also arrest Watkins, Pierce telephoned
    Watkins and informed him that no one had come to pick up the
    phenylacetic acid. Watkins told Pierce that he would come himself.
    When Watkins arrived, he drove alongside the cargo van and stated
    that he was hunting for a lost sheep.             Bryant stated that he was
    tired of sitting on the "drum."            Watkins complained that police
    were all over his neighborhood and suggested that they relocate to
    a nearby K-Mart store.         Bryant insisted that they complete the
    transaction in the parking lot.        Bryant asked Watkins if he had any
    powder, but Watkins said no.         Watkins was then arrested.
    4
    At the time of his arrest, Watkins possessed a slip of paper
    reading "73 cad. four door gold-over white" on one side and "Jerry
    Pierce, white van, BLM30" on the other side.           Agents also found a
    packet containing 1.72 grams of amphetamine with a potency of 93
    percent.      A strength of 93 percent indicates that the amphetamine
    came directly from a laboratory.
    A grand jury indicted Leed on one count of possession of
    phenylacetic acid, a listed chemical, with intent to manufacture
    amphetamine, in violation of 
    21 U.S.C. § 841
    (d)(1), and on one
    count of conspiring to commit the same offense, in violation of 
    21 U.S.C. § 846
    .       Following trial, the jury found Leed guilty on both
    counts. Watkins was charged solely with conspiracy, and in a joint
    trial with Leed, he was found guilty.           Leed's motion for judgment
    of acquittal was denied.
    The district court sentenced Leed under U.S.S.G. § 2D1.1 to
    imprisonment for consecutive terms of 120 months on the conspiracy
    count   and    60   months   on   the    substantive   count,   three   years
    supervised release, and $100 in special assessments.            Leed timely
    appealed.
    II.
    A.
    Leed contends first that the district court erred in denying
    his motion for judgment of acquittal, and argues that the evidence
    is insufficient to support his conviction on either the conspiracy
    or   the substantive offense.           To establish a conspiracy under 
    21 U.S.C. § 846
    , the government must prove beyond a reasonable doubt
    5
    (1) an agreement between two or more persons to violate the
    narcotics laws, (2) that each alleged conspirator knew of the
    conspiracy and intended to join it, and (3) that each alleged
    conspirator did participate in the conspiracy.                   United States v.
    Carter, 
    953 F.2d 1449
    , 1454 (5th Cir. 1992), cert. denied, 
    112 S. Ct. 2980
       (1992).       Although     presence     at   the   scene    and   close
    association with those involved in a conspiracy are insufficient
    factors alone, they are nevertheless relevant factors for the jury.
    United States v. Simmons, 
    918 F.2d 476
    , 484 (5th Cir. 1990).                      To
    establish a violation of § 841(d)(1), the government was required
    to prove that Leed knowingly possessed the listed chemical with the
    intent to manufacture amphetamine.
    Leed contends first that the government produced insufficient
    evidence that he had an agreement with Watkins or others to violate
    the narcotics laws.         He argues that the government's failure to
    produce this evidence is fatal to his conviction on the conspiracy
    count.
    Leed also contends that the record evidence is insufficient to
    support either a finding that he knowingly possessed phenylacetic
    acid    or    a   finding    that   he    had   any    intent     to     manufacture
    amphetamine.      We agree with Leed that his conviction cannot stand
    on either count unless the government's proof is sufficient to
    support both of these implicit findings.
    We review the district court's denial of a motion for
    judgment of acquittal de novo.           United States v. Sanchez, 
    961 F.2d 1169
     (5th Cir. 1992), cert. denied, 
    113 S. Ct. 330
     (1992).                        In
    6
    deciding whether the evidence is sufficient to support Leed's
    convictions,
    it is not necessary that the evidence exclude every
    reasonable hypothesis of innocence; we review the
    evidence in the light most favorable to the government,
    drawing all reasonable inferences in support of the
    verdict, and will affirm the conviction if a rational
    trier of fact could have found that the evidence
    established each essential element of the offense beyond
    a reasonable doubt.
    United States v. Stone, 
    960 F.2d 426
    , 430-31 (5th Cir. 1992).
    B.
    We first turn to Leed's argument that the government failed to
    produce sufficient evidence that he had an agreement with Watkins
    to violate the narcotics laws.    We find no merit to this argument.
    Ample evidence demonstrates an agreement between Leed and Watkins
    to procure the phenylacetic acid.      First, Leed obviously obtained
    all the details of the transaction from Watkins.          Leed knew the
    location of the proposed exchange; he knew which vehicle to look
    for; he knew the signal; and he knew the purchase price.
    Second,    agents   found   evidence     in   the   Cadillac    that
    affirmatively linked Leed to Watkins.       This included a notebook in
    a briefcase containing the name "John" and Watkins' phone number.
    The agents also found a spiral notebook in the briefcase.           One of
    the things to do listed in the notebook was to call "Pappy" at
    Watkins' phone number.
    Finally, Leed also knew that the transaction was a covert
    operation.     He looked around the parking lot before identifying
    himself with the pre-arranged signal.       He also wrapped the $5,500
    cash in freezer paper to disguise its appearance.
    7
    The evidence strongly supports the jury's implicit finding
    that Leed agreed to assist Watkins in purchasing a listed chemical
    for an illicit purpose.
    C.
    After a careful review of the record, we also conclude that
    the record evidence supports the jury's implicit finding beyond a
    reasonable doubt that Leed knowingly possessed the phenylacetic
    acid with the intent to manufacture amphetamine.
    Leed asserts first that during his meeting with Bryant and
    Pierce in the parking lot, no one mentioned anything about the
    contents of the keg.      He argues that the keg was not labeled and
    that it resembled a barrel containing pool chemicals.         Leed points
    also to the lack of evidence that he had any training which would
    have enabled him to recognize the pungent odor of phenylacetic
    acid.
    Ample    evidence   supports   the   finding   that   Leed   knew   the
    contents of the keg.      As indicated above, Leed knew that this was
    a covert operation.      When he arrived in the parking lot to pick up
    the chemical, Leed carefully looked around and signalled his
    identity by wiping his brow.        He personally wrapped the $5,500
    purchase price in freezer paper so that it would look like a
    sandwich. Leed's secret signals and his delivery of cash disguised
    as a sandwich in a lunch bag belie any intent by him to purchase
    pool chemicals.    Also, Leed made no remark about the overpowering
    odor of the phenylacetic acid when he entered the van with Bryant
    and Pierce.    Then, when asked about "powder," Leed responded that
    8
    they had none at that time.           Leed's behavior in the parking lot,
    his delivery of $5,500 cash to Pierre and the agents, and his
    response to questions about "powder," support an inference that he
    knew that the keg contained phenylacetic acid.
    Leed's final sufficiency argument is his strongest.                     He
    challenges the sufficiency of the evidence to support a finding
    that he had any intent to manufacture amphetamine.                 Leed argues
    that this Court has required some evidence of a laboratory or
    specific statements by the defendant to show intent to manufacture
    amphetamine.       See, e.g., United States v. Stone, 
    960 F.2d 426
     (5th
    Cir. 1992).        Citing United States v. Berkery, 
    919 F.2d 817
    , 821
    (2nd Cir. 1990), he argues that one instance of possession of
    phenylacetic acid is insufficient to support an inference that he
    specifically intended to manufacture amphetamine.                 He reads the
    Second Circuit's opinion in Berkery as holding that possession of
    a   large    quantity    of   phenyl-2-propanone      (P2P)     leads   just   as
    naturally     to   the   conclusion    that   the   defendants    intended     to
    distribute that chemical, rather than use it in a manufacturing
    scheme.      See 
    id.
    Our   analysis    of   this   record   leads   us   to   conclude   that
    sufficient evidence exists to support an inference that Leed knew
    of and intended to further the goals of a manufacturing operation.
    As we discussed above, Leed's conduct demonstrates his knowledge
    that the keg of phenylacetic acid was destined for some illegal
    use.    The covert nature of the meeting to exchange the purchase
    price for the chemicals and the amount of the purchase price
    9
    adequately demonstrate Leed's knowledge of the illegality of the
    transaction.
    As to the purpose of the transaction, Leed's co-conspirator,
    Watkins, led Pierce to believe that he was planning to use the acid
    to manufacture amphetamine;      Watkins originally agreed to exchange
    "powder" in addition to cash for the phenylacetic acid.              Indeed,
    Leed himself implied that their inability to produce "powder" in
    exchange for the phenylacetic acid was temporary; he told Pierce
    and agent Bryant that they had no powder "at that time."        Also when
    Bryant asked him whether his people would be interested in making
    future purchases, Leed replied that "I was just sent here to pick
    up the package, but I'm sure my people would want to buy all they
    could get their hands on."       His certainty about his accomplices'
    plans supports a jury inference that he knew the details of the
    operation and that he was more than an errand boy.        His statements
    also support an inference that he and his accomplices were involved
    in a pattern of purchasing activity, and that the purpose in
    purchasing the chemical was to manufacture amphetamine.
    Also, when Leed's co-conspirator Watkins was arrested, he
    possessed a small quantity of almost pure amphetamine.          The jury
    was   entitled   to   conclude   that    Watkins   obtained   such    uncut
    amphetamine directly from a laboratory.
    Despite this affirmative evidence indicating that Leed knew
    the acid was to be used to manufacture amphetamine, Leed presented
    no contradictory evidence that he and Watson intended to use the
    acid for any other purpose.      Leed did not produce evidence that he
    10
    and Watson acted as brokers of phenylacetic acid or that such a
    brokerage   business   is   one   that    rational   individuals   consider
    profitable enough to offset the obvious risks.               To obtain a
    conviction, the government need not exclude every hypothesis of
    innocence to withstand an attack on sufficiency grounds.           The jury
    was entitled to conclude that the most likely use Leed and Watkins
    planned for this chemical was to manufacture amphetamine.           "What a
    jury is permitted to infer from the evidence in a particular case
    is governed by a rule of reason, and juries may properly use their
    common sense in evaluating that evidence."              United States v.
    Villasenor, 
    894 F.2d 1422
    , 1425 (5th Cir. 1990) (quoting United
    States v. Henry, 
    849 F.2d 1534
    , 1536 (5th Cir. 1988).         We find that
    the evidence supports an inference that Leed intended to possess
    the phenylacetic acid to further the manufacture of amphetamine.
    For the reasons stated above, we conclude that the evidence is
    sufficient to support Leed's conviction.
    III.
    Leed argues next that the district court incorrectly applied
    the Sentencing Guidelines.1       We review challenges to the district
    court's application of the Sentencing Guidelines de novo.            United
    States v. Shell, 
    972 F.2d 548
     (5th Cir. 1992).
    Leed argues that the district court erred when it applied
    U.S.S.G. § 2D1.1 in calculating his guideline range and determining
    his sentence.    We disagree.        Section 2D1.1 has the following
    1
    All citations to the Guidelines are to the 1990 Guidelines
    Manual, in effect when Leed was sentenced in April 1991.
    11
    heading:   "Unlawful   Manufacturing,    Importing,    Exporting,     or
    Trafficking (Including Possession with Intent to Commit These
    Offenses)."   We agree with the Ninth Circuit in United States v.
    Cook, 
    938 F.2d 149
    , 152 (9th Cir. 1991) that this guideline
    specifically applies to the offenses for which Leed was convicted.
    In other words, the parenthetical in the heading modifies all of
    the activities that precede it, including manufacturing.             See
    United States v. Voss, 
    956 F.2d 1007
    , 1014 (10th Cir. 1992) (Abel,
    J., dissenting).   As Judge Abel observed in his Voss dissent,
    "'[p]ossession with [i]ntent' must also refer to possession of
    chemicals with intent to manufacture."     
    Id.
        Any doubt about the
    application of § 2D1.1 to Mr. Leed's § 84l(d)(1) conviction is
    dispelled by the statutory index to the Guidelines.        That index
    matches a conviction for § 841(d) with § 2D1.1.       See also United
    States v. Kingston, 
    922 F.2d 1234
    , 1238 (6th Cir. 1990), cert.
    denied, 
    111 S. Ct. 2054
     (1991) (applying § 2D1.1 to § 841(d)
    offenses in light of federal effort to block drug distribution
    efforts at the earliest possible moment).
    Relying on the panel majority in United States v. Voss, 
    956 F.2d at 1009-13
    , Leed makes two arguments in an attempt to avoid
    the application of U.S.S.G. § 2D1.1.     We are unconvinced.        Leed
    argues first that § 2D1.1 does not apply because the statutory
    index cross-referencing § 841(d) to § 2D1.1 was written before the
    current version of § 841(d) was enacted.         But when the current
    version of § 841(d) was enacted, the cross-reference to § 2D1.1 in
    the statutory index remained in place.    The Sentencing Commission
    12
    certainly knew how to change the statutory index if it wished to do
    so.
    Leed also points out that recent amendments to the Guidelines,
    effective November 1991, have added § 2D1.11 to expressly address
    possession of listed chemicals.              He argues that this amendment
    demonstrates that the Commission never intended § 2D1.1 to apply to
    violations of § 841(d).      As we explain above, we are persuaded that
    §   2D1.1   directly    applies    to   §    841(d)'s   prohibited   conduct--
    possession    of    a   listed    chemical    with   intent   to   manufacture
    amphetamine.       But, even if it does not, it was certainly the most
    analogous guideline when Leed was sentenced.              As the majority in
    United States v. Voss acknowledges, § 2D1.11 is a substantive,
    rather than a clarifying, amendment and does not apply to conduct
    committed before its adoption.          Voss, 
    956 F.2d at 1011
    .
    The district court did not err in applying § 2D1.1 to Leed's
    offenses.
    AFFIRMED.
    13