United States v. Daniel T. Sherman , 262 F.3d 784 ( 2001 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 00-2184
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United States of America, *
*
Appellee, *
*
v. *
*
Daniel T. Sherman, also known as *
Mike Wilson, also known as Mike *
Willson, also known as Mark Willson, *
*
Appellant. *
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Appeals from the United States
No. 00-2188 District Court for the
___________ District of Minnesota.
United States of America, *
*
Appellee, *
*
v. *
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Fortino E. Diaz, *
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Appellant. *
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No. 00-2317
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United States of America, *
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Appellee, *
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v. *
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Robert R. Lohr, *
*
Appellant. *
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No. 01-1271
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United States of America, *
*
Appellee, *
*
v. *
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Vanessa R. Lohr, *
*
Appellant. *
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Submitted: June 12, 2001
Filed: August 21, 2001
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Before WOLLMAN, Chief Judge, HAMILTON,1 MURPHY, Circuit Judges.
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WOLLMAN, Chief Judge.
Daniel Sherman, Fortino Diaz, Robert Lohr, and Vanessa Lohr appeal their
convictions and sentences stemming from a conspiracy to distribute cocaine and
methamphetamine. We affirm.
I.
The defendants were convicted after a lengthy trial in district court2 on charges
stemming from their participation in a large drug conspiracy. All four defendants were
convicted of conspiracy to distribute cocaine and methamphetamine in violation of 21
U.S.C. §§ 841(b)(1)(A-B) and 846 and aiding and abetting money laundering in
violation of 18 U.S.C. §§ 1956(a)(1)(A) and 2. Three other co-defendants entered
guilty pleas prior to the trial. Diaz was also convicted of one count of distributing
cocaine in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C), and Sherman was
additionally convicted of one count of attempting to possess with intent to distribute
cocaine in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C). Sherman was
sentenced to imprisonment for a term of 108 months, Diaz to 360 months, Robert Lohr
to 262 months, and Vanessa Lohr to 24 months. In addition, the jury determined that
the Lohrs’ home was subject to forfeiture under 21 U.S.C. § 853 because it was used
to facilitate the Lohrs’ drug conspiracy.
1
The Honorable Clyde H. Hamilton, United States Circuit Judge for the Fourth
Circuit, sitting by designation.
2
The Honorable Michael J. Davis, United States District Judge for the District
of Minnesota.
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Viewed in the light most favorable to the verdict, the evidence presented at trial
showed that between 1992 and 1998, Fortino Diaz ran a drug operation based in
California that supplied cocaine, methamphetamine, and marijuana to distributors in
Minnesota. Sherman and Robert and Vanessa Lohr were three of those distributors,
as was Linda Bay, who cooperated with the government and testified at trial as a
government witness.
Although drugs were sometimes delivered in person, they were ordinarily
shipped by Federal Express from California to Minnesota. Payments were made either
by sending large sums of cash by Federal Express or by wiring smaller amounts via
Western Union. At various points, Bay purchased cocaine for resale and for her own
use directly from Diaz, from Sherman, and from Robert Lohr. She also sold drugs to
Robert Lohr. The evidence also showed that Sherman, Bay and Vanessa Lohr were
addicted to cocaine during the course of the conspiracy. Sherman, both Lohrs, and Bay
sent or wired money to Diaz using their own names and aliases. In the course of the
conspiracy, the defendants drew numerous friends and family members into their illegal
activities.
At trial, the government’s evidence traced hundreds of thousands of dollars that
changed hands in the course of the conspiracy. More than $100,000 in drug proceeds
were traceable to Sherman, and a total of $278,000 in cash was traceable to the Lohrs
despite their efforts to camouflage the cash as proceeds from legitimate business
enterprises. Robert Lohr was a major distributor for Diaz, and Vanessa Lohr assisted
him in the drug operation. Vanessa Lohr arranged for drugs to be sent to a gas station
managed by her friend for Robert Lohr to pick up, and she sent and picked up Federal
Express packages containing cash and drugs. A search of the Lohr home recovered
$25,000 of drug proceeds in cash, along with Federal Express packages with tracking
numbers from the same sequence as those used to ship intercepted drugs. Bay testified
that Robert Lohr kept a “stash” of drugs at the home.
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Count 1 of the indictment charged all four defendants with conspiracy to
distribute more than five kilograms of methamphetamine and more than one kilogram
of cocaine. The jury, however, was instructed that it could convict the defendants if
it found beyond a reasonable doubt that they were engaged in a conspiracy to distribute
the substances even though it did not find the charged drug quantities beyond a
reasonable doubt. The verdict did not specify the drug quantity.
II.
All four defendants challenge the sufficiency of the evidence to sustain their
convictions on the conspiracy charge and the aiding and abetting money laundering
charge. In addition, Sherman, Diaz, and Robert Lohr challenge the district court’s
calculation of drug quantities at sentencing, Diaz challenges the district court’s
sentencing determination that he was a leader or organizer and a manager of the
conspiracy, Sherman and Diaz challenge their other convictions, and Robert and
Vanessa Lohr challenge the district court’s determination that their home was subject
to forfeiture.
A. Conspiracy Charge
All four defendants challenge the sufficiency of the evidence to support their
convictions for conspiracy to distribute cocaine and methamphetamine. They do not
contest their involvement in buyer/seller relationships. Rather, they challenge the
government’s evidence that these relationships were part of a larger conspiracy,
contending that the government did not submit adequate evidence of an agreement. In
addition, Sherman, Diaz, and Robert Lohr contend that the district court erred when it
sentenced them on the basis of its findings of drug quantities rather than submitting the
question of the quantities to the jury to be determined beyond a reasonable doubt.
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1. Sufficiency of the Evidence
We have no difficulty in concluding that the evidence adduced at trial was
sufficient to establish both the underlying conspiracy and the defendants’ participation
therein. In reviewing a defendant’s challenge to the sufficiency of the evidence, we
view the evidence in the light most favorable to the verdict and take as established all
reasonable inferences tending to support the verdict. United States v. Shoffner, 71 F.3d
1429, 1433 (8th Cir. 1995). Reversal is appropriate only if no reasonable jury could
have found the defendant guilty beyond a reasonable doubt. Id. To sustain the
conspiracy conviction, the government must prove (1) that there was a conspiracy, (2)
that the defendant knew of the conspiracy, and (3) that the defendant intentionally
joined the conspiracy. Id. In other words, the government had to establish the
existence of an agreement to engage in distributing drugs between the defendant and
at least one other person. United States v. Miller, 91 F.3d 1160, 1162 (8th Cir. 1996).
The government may prove an agreement wholly by circumstantial evidence or
by inference from the actions of the parties. Shoffner, 71 F.3d at 1433. “[A]
defendant’s mere presence, coupled with the knowledge that someone else who is
present intends to sell drugs, is insufficient to establish membership in a conspiracy.”
Id. Once the existence of a conspiracy has been established, however, “‘even slight
evidence connecting a defendant to the conspiracy may be sufficient to prove the
defendant’s involvement.’” Id. at 1434 (quoting United States v. Agofsky, 20 F.3d
866, 870 (8th Cir. 1994)). “Although ‘numerous sales of small amounts . . . for
personal use are insufficient to support a [conspiracy] conviction,’ we have held that
‘evidence of multiple sales of resale quantities of drugs is sufficient in and of itself to
make a submissible case of conspiracy to distribute.’” Miller, 91 F.3d at 1162(quoting United States v. Eneff, 79 F.3d 104, 105 (8th Cir. 1996)).
The defendants contend that despite the large quantities of drugs and cash that
changed hands, there was no conspiracy to distribute drugs because there was no
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underlying distribution agreement. Instead, they argue, their involvement with one
another was merely an unorganized series of buyer-seller relationships. We do not
agree, for the government’s evidence of multiple sales of resale quantities of drugs to
the defendants, when viewed in light of telephone records, financial information and
evidence of the defendants’ attempts to cover up their illegal activities, was more than
sufficient to support the jury’s conclusion that a conspiracy to distribute drugs existed.
See Schoffner, 71 F.3d at 1433-34.
With respect to Sherman, the evidence established that more than $100,000 was
wired to Fortino Diaz and his associates from 1993 through 1996 in Sherman’s name
or in the names of aliases that Sherman used. In addition, phone records and other
papers found at Sherman’s home demonstrated that he was in contact with Diaz, his
son and co-conspirator David Diaz, and both Lohrs. The evidence shows that the
conspiracy as a whole was involved in the distribution of cocaine and
methamphetamine, and Sherman is liable for the foreseeable conduct of his co-
conspirators in furtherance of the conspiracy even if, as he contends, he himself did not
distribute methamphetamine. See Rice, 49 F.3d 378, 382-83 (8th Cir. 1995).
Accordingly, Sherman’s challenge to the sufficiency of the evidence is without merit.
Diaz and Robert Lohr challenge the sufficiency of the evidence to show the
underlying conspiracy and to support the conclusion that methamphetamine, as well as
cocaine, was distributed through that conspiracy. The record, however, is replete with
evidence that a conspiracy to distribute both cocaine and methamphetamine existed and
that Diaz and Robert Lohr were deeply involved in it. For example, Linda Bay testified
that she sent Diaz up to $11,000 in cash at a time in exchange for drugs, that she sold
drugs that she had purchased directly from Diaz and indirectly from him through Robert
Lohr, and that the drugs she received included cocaine, marijuana and
methamphetamine.
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Vanessa Lohr challenges the sufficiency of the evidence to support the
conclusion that she was involved in the conspiracy. She maintains that the evidence,
as it relates to her, demonstrates merely that she was a buyer and user of cocaine, rather
than a member of the conspiracy. Granted that the record establishes that Vanessa
Lohr was using large quantities of cocaine during her involvement in the conspiracy,
it also demonstrates that she was responsible for sending packages of money to Diaz
through Federal Express, for retrieving drugs that Diaz had shipped to the Lohrs, and
for arranging for packages of drugs to be delivered to Robert Lohr through the gas
station. The jury could reasonably infer that Vanessa Lohr was a part of the conspiracy
from this evidence that she acted to advance its purposes.
In light of the foregoing, we conclude that the jury’s verdicts with respect to the
drug charges were amply supported by the evidence.
2. Sentencing Considerations
Sherman, Diaz, and Robert Lohr contend that, because the district court relied
on drug quantities it determined using a preponderance of the evidence standard, they
were sentenced in violation of the Supreme Court’s holding in Apprendi v. New Jersey,
530 U.S. 466 (2000). Diaz also challenges the district court’s determination that his
sentence was subject to a role enhancement as an organizer or leader of a conspiracy
involving more than five people.
a. Apprendi Claims
Under Apprendi, “any fact that increases the penalty for a crime beyond the
statutory maximum must be submitted to a jury, and proved beyond a reasonable
doubt.” 530 U.S. at 490; see United States v. Chavez, 230 F.3d 1089, 1091 (8th Cir.
2000). The use of a judicially determined drug quantity as a basis for sentencing,
however, is permissible so long as the defendant’s sentence does not exceed the
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statutory maximum sentence available for an indeterminate quantity of the drug, the
offense simpliciter. United States v. Aguayo-Delgado, 220 F.3d 926, 933-34 (8th Cir.),
cert. denied, 121 S. Ct. 600 (2000). None of the defendants raised an Apprendi
argument before the district court, and therefore we review their claims for plain error.
United States v. Brown, 203 F.3d 557, 568 (8th Cir. 2000) (per curiam). When a
defendant is convicted of multiple counts, however, a sentence assessed in violation of
Apprendi does not necessarily constitute plain error because “[t]he [Federal
Sentencing] Guidelines require a district court to run sentences from multiple counts
consecutively, rather than concurrently, if the Guideline sentence exceeds the statutory
maximum sentence for each count.” United States v. Sturgis, 238 F.3d 956, 960 (8th
Cir. 2001) petition for cert. filed, ___ U.S.L.W. ___ (U.S. June 19, 2001) (No. 00-
2584); see United States v. Bradford, 246 F.3d 1107, 1114 (8th Cir. 2001) (explaining
proper use of concurrent and consecutive sentencing according to U.S.S.G. § 5G1.2(c)
and (d)).
Sherman was sentenced to a term of imprisonment of 108 months. Because the
statutory maximum for an indeterminate quantity of cocaine is 240 months, 21 U.S.C.
§ 841, his sentence does not violate Apprendi. See Chavez, 230 F.3d at 1091. Diaz
was sentenced to 360 months for conspiracy, 240 months for distribution of cocaine,
and 240 months for money laundering. Although Diaz’s 360-month sentence does
exceed the 240-month statutory maximum, the sentence does not amount to plain error
because under U.S.S.G. § 5G1.2(d), the district court would have been required to run
a portion of the drug sentences and the money laundering sentence consecutively to
reach the guideline sentence of 360 months. See Sturgis, 238 F.3d at 960.
Robert Lohr was sentenced to two concurrent 262-month terms of imprisonment
on the conspiracy and money laundering charges. The conspiracy sentence exceeds the
statutory maximum of 240 months. The money laundering sentence also exceeds the
240-month statutory maximum sentence for that offense. There is no plain error,
however, because the district court would be required to run 22 months of the money
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laundering sentence consecutively with the conspiracy sentence, resulting in the 262-
month sentence that Robert Lohr received. See id.We have reviewed the defendants’ arguments that the district court’s
determinations of drug quantities were erroneous, and conclude that the determinations
are supported by the record. Likewise, we conclude that the government introduced
evidence sufficient to support the individual counts of the indictment against Sherman
and Diaz. We therefore find no reversible error in the court’s sentencing
determinations.
b. Leader/Organizer Role Enhancement
Diaz challenges the court’s determination that he was subject to a sentencing
enhancement for his role as a leader or organizer of the conspiracy under U.S.S.G. §
3B1.1(a). “Typically, this enhancement applies to a defendant who employs or
otherwise arranges for intermediaries to sell his drugs.” Miller, 91 F.3d at 1163.
Although the defendant need not directly control his intermediaries in order to be a
leader or organizer of the conspiracy, he must do more than sell for resale. See id. at
1164. The government’s evidence established that Diaz had ultimate control over the
supply of drugs and the way in which they were distributed. For instance, following
Linda Bay’s arrest, Diaz determined that he would not deal directly with her and
instead sold her drugs through Robert Lohr for a time before reestablishing their direct
relationship. In addition, Diaz directed the actions of individuals in California and
Minnesota, controlling their drug supply and directing the manner of exchange of drugs
and money. Accordingly, the district court’s conclusion that Diaz was an organizer or
leader was not clearly erroneous. See Rice, 49 F.3d 378, 385 (8th Cir. 1995).
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B. Aiding and Abetting Money Laundering Charge
All four defendants also challenge their convictions for aiding and abetting
money laundering in violation of 18 U.S.C. §§ 1956(a)(1)(A) and 2. They contend that
the indictment violated our holding in United States v. Prescott, 42 F.3d 1165, 1166-67
(8th Cir. 1994), because it duplicitously charged them with multiple acts of money
laundering in a single count. In addition, they challenge the sufficiency of the
government’s evidence to prove 1) that the money in question was actually drug
proceeds, 2) that the purpose of its transfer was laundering rather than a simple
exchange of cash for drugs, and 3) that the individual defendants were involved in a
scheme to launder money.3
1. Sufficiency of the Indictment
Sherman argues that the money laundering charge should have been dismissed
as duplicitous because it charged approximately one hundred fifty separate acts as one
count of the indictment. He argues that Prescott stands for the proposition that each
instance of money laundering must be alleged in a separate count of the indictment.
Prescott, however, also holds that failure to object to a defect in the indictment before
trial is a waiver of the objection. 42 F.3d at 1167. In this case, the objection was
waived before the trial and then waived, and therefore may not be raised on appeal.
Id.3
Sherman and Lohr also contend that, under Apprendi, the amount of money
laundered ought to have been determined by the jury because the district court’s finding
increased their sentences under the sentencing guidelines. Because the amount of
money laundered does not increase the statutory maximum for the underlying offense,
this argument fails. See Aguayo-Delgado, 220 F.3d at 933.
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2. Sufficiency of the Evidence
Robert and Vanessa Lohr contend that the government’s evidence was
insufficient to support their convictions on the money laundering count. They contend
that there was insufficient evidence to demonstrate that the money they transferred to
Diaz was the proceeds of drug trafficking. Vanessa Lohr also argues that the evidence
was insufficient to show that she knew that the money she wired to Diaz and others via
Western Union was the proceeds of illegal drug activity or that the money was intended
to promote further drug trafficking.
The defendants were charged under 18 U.S.C. §§ 1956(a)(1)(A) and 2. To
prove its case under § 1956(a)(1)(A), the government has the burden of proving beyond
a reasonable doubt that the defendants knowingly conducted financial transactions
which involved the proceeds of drug distribution and that they did so either with the
intent to promote their drug business or with knowledge that the transaction was
designed to disguise the nature or source of those proceeds. United States v.
Blackman, 904 F.2d 1250, 1256 (8th Cir. 1990). Under § 2, anyone who aids and
abets money laundering is criminally liable as a principal, and the government’s burden
to show aiding and abetting requires that the defendants “associated [themselves] with
the venture, participated in it as in something they wished to bring about, and sought
by [their] actions to make it succeed.” United States v. Alvarez, 987 F.2d 77, 83 (1st
Cir. 1993). The government must prove that the defendants took affirmative actions
that facilitated the violation of § 1956(a)(1)(A) to support an aiding and abetting
conviction. See id. The government may prove its case by circumstantial evidence.
Blackman, 904 F.3d at 1257.
The Lohrs contend that their expert financial witness, who testified that all of the
cash attributable to the Lohrs could have come from their legitimate sources of income,
created a reasonable doubt as to whether the money transferred came from those
sources. Taken in the light most favorable to the verdict, however, the evidence reveals
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that the expert’s testimony was in large part discredited by the government as based on
self-serving and inaccurate information supplied by the Lohrs. The government’s
evidence demonstrated that more than $278,000 of cash passed through the Lohrs’
hands in the course of the conspiracy and that the Lohrs attempted to obscure and
conceal the amount of cash they had by gambling, purchasing expensive items with
cash, and using friends to purchase cashier’s checks, money orders, and certified
checks. In addition, the government presented overwhelming evidence of numerous
large drug transactions between Diaz and Robert Lohr during the conspiracy. On these
facts, the jury could reasonably have concluded that the Lohrs were converting cash
proceeds from drug transactions in furtherance of the drug conspiracy.
Vanessa Lohr also contends that, even if the money she transferred by wire was
drug proceeds, the government failed to prove that she was aware of its source. The
government’s evidence demonstrated not only that Vanessa Lohr was aware of the drug
trafficking operation, but that she profited from it both financially and through access
to cocaine. In addition, Vanessa Lohr was an active participant in the Lohr’s legitimate
businesses, and the jury could permissibly draw from her participation the inference
that she was aware that the cash transfers were not a part of those businesses. We
therefore conclude that the government presented sufficient evidence to sustain the
defendants’ convictions on that count of the indictment.
C. Forfeiture of the Lohr Home
The Lohrs contest the forfeiture of their home pursuant to 21 U.S.C. § 853(a)(2).
Vanessa Lohr argues that, even if the residence was subject to forfeiture because it was
used in the course of the conspiracy to distribute drugs, the inclusion of the surrounding
property was improper because that property was not so used. Our case law, however,
makes clear that forfeiture of an entire parcel of real property is appropriate where part
of the property was used to commit or facilitate a drug offense. United States v. Bieri,
68 F.3d 232, 234 (8th Cir. 1995).
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Vanessa Lohr also argues that the forfeiture of the property constituted an
excessive fine in violation of the Eighth Amendment. A punitive forfeiture violates the
Eighth Amendment only if “the amount of the forfeiture is grossly disproportional to
the gravity of the defendant’s offense.” United States v. Bajakajian, 524 U.S. 321, 337
(1998). “[I]f the value of the property forfeited is within or near the permissible range
of fines using the sentencing guidelines, the forfeiture almost certainly is not
excessive.” United States v. 917 N.E. 29th Drive, 175 F.3d 1304, 1310 (11th Cir.
1999) cert. denied sub nom., Howerin v. United States, 528 U.S. 1083 (2000). Each
of the Lohrs was subject to a fine of up to $4,000,000. U.S.S.G. § 5E1.2(d)(7).
Assuming that the Lohrs’ $750,000 valuation of the property is accurate, we have no
difficulty concluding that the fine is not excessive.
Robert Lohr also argues that the district court erred in allowing the forfeiture
proceeding to take place despite his absence. Because of an administrative error,
Robert Lohr was not transported to the courthouse for the forfeiture hearing. The
hearing proceeded after Robert Lohr’s attorney waived his presence on his behalf.
Robert Lohr now contends that a defendant’s presence cannot be waived by his
attorney and that the forfeiture proceeding held in his absence thus violated his right to
be present conferred by Federal Rule of Criminal Procedure 43. We have held,
however, that a violation of Rule 43 is subject to harmless error analysis. United States
v. Wallingford, 82 F.3d 278, 280 (8th Cir. 1996) (quoting Rogers v. United States, 422
U.S. 35, 40 (1975)). We conclude that any error by the district court in proceeding in
Robert Lohr’s absence was harmless. The jury returned two separate verdicts for
forfeiture of the property. If we were to reverse, Robert Lohr could not retain his
property by asserting an innocent owner defense. See United States v. N. 48 Feet of
Lots 19 & 20 in Block 8 of M.J. Hammett’s Addition to the City of Pine Bluff, Ark.,
138 F.3d 1268, 1269 (8th Cir. 1998) (per curiam). His conviction on the conspiracy
charge precludes any finding that he was without knowledge of the activities occurring
on his property. Cf. United States v. 116 Emerson St., 942 F.2d 74, 80 (1st Cir. 1991)
(relating successful assertion of innocent owner defense). The independent
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determination that the property was subject to forfeiture by Vanessa Lohr thus renders
moot the question of whether the forfeiture proceeding violated Rule 43.
The judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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