United States v. Kenneth Carter

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 15-2895
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UNITED STATES OF AMERICA
v.
KENNETH IRVING CARTER, a/k/a Kane
Kenneth Carter,
Appellant
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APPEAL FROM THE UNITED STATES DISTRICT
COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 3-12-cr-00020-001)
District Judge: Hon. Kim R. Gibson
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Submitted Under Third Circuit L.A.R. 34.1(a)
July 12, 2016
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Before: FUENTES, SHWARTZ, and RESTREPO, Circuit
Judges
(Filed: August 23, 2016)
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OPINION
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Ronald A. Krauss, Esq.
Office of Federal Public Defender
100 Chestnut Street, Suite 306
Harrisburg, PA 17101
Counsel for Appellant Kenneth Irving Carter
Jane M. Dattilo, Esq.
Rebecca R. Haywood, Esq.
Office of United States Attorney
700 Grant Street, Suite 4000
Pittsburgh, PA 15219
Counsel for Appellee United States of America
SHWARTZ, Circuit Judge.
Kenneth Irving Carter appeals the District Court’s
application of a two-level sentencing enhancement for
maintaining a stash house. Because the District Court
properly applied the enhancement, we will affirm.
2
I
Carter headed a Pennsylvania drug ring, which he
operated from Detroit, Michigan. Carter sent two of his
lieutenants, Jelina Montez Cook and Dewann Jamal Macon,
to Pennsylvania to oversee the business. Carter’s operation
was further supported by additional “employees,” including
Arley Earheart.
Cook was responsible for transporting drugs to
Pennsylvania and readying them for sale. Macon’s primary
responsibility was to keep detailed financial records so that he
could inform Carter about the drug ring’s cash flow. Macon
was also responsible for paying expenses, including the
salaries of various “employees.”1 All disbursements he made
were on Carter’s behalf.
Shortly after Macon moved to Pennsylvania, he told
Carter that he needed to find new living arrangements. Carter
tasked Earheart with finding a house where Macon could live
and run the drug operation. Earheart found a secluded house
at 530 Stoney Run Road in Blairsville, Pennsylvania (“Stoney
Run”), which did not require her to sign a lease or put her
name on a utility bill. Earheart obtained Carter’s approval to
rent the house. Carter later inspected the property and
ordered Macon to give Earheart the money for the security
deposit and rent. Stoney Run became a base of operations.
Macon lived at Stoney Run, overseeing the enterprise’s
1
Some members of the conspiracy, such as Earheart,
were paid in drugs as opposed to cash.
3
financial and drug operations, and Earheart retrieved drugs
from that location for delivery to distributors.2
Carter’s organization maintained a second house at
621 Bedford Street in Johnstown, Pennsylvania (“Bedford
Street”). Cook lived at Bedford Street, and processed and
prepared heroin there for delivery to Stoney Run for
distribution. As with Stoney Run, Cook paid the Bedford
Street rent with funds from Macon, directly authorized by
Carter.
Following an investigation, which included searches of
the premises and recovery of drugs at each location, a grand
jury returned an indictment against Carter and other members
of the conspiracy. Carter was charged with conspiracy to
distribute and possess with intent to distribute one kilogram
or more of heroin (Count 1), and conspiracy to distribute and
possess with intent to distribute Opana pills, an opioid pain
medication (Count 2), all in violation of 21 U.S.C. § 846.
Carter pleaded guilty to Count 1 pursuant to a written plea
agreement. The plea agreement contained a limited waiver of
appellate rights, which allowed Carter to, among other things,
challenge application of a two-level sentencing enhancement
for maintaining a residence for the purpose of manufacturing
and distributing a controlled substance under U.S.S.G. §
2D1.1(b)(12), sometimes referred to as the “stash house”
enhancement.
2
Earheart testified about Carter’s involvement in the
operation’s ongoing activities, specifically noting one
occasion when Carter threatened Earheart while she was in
the hospital, and ordered her back to the house to continue
working.
4
At sentencing, the District Court heard testimony from
Earheart and Macon, recounting the facts set forth above
concerning Carter, the stash houses, and the role the houses
played in Carter’s drug ring. Based on their testimony, the
District Court found that Carter “control[led] activities at the
residences, namely by controlling distribution of controlled
substances,” and applied § 2D1.1(b)(12)’s two-level
enhancement. App. 140. The District Court then sentenced
Carter to 180 months’ in prison. Carter appeals the
application of the enhancement.
II3
A
The Fair Sentencing Act of 2010 sought to address,
among other things, conduct “generally described” in 21
U.S.C. § 856, which criminalized the maintenance of a
premises used for drug manufacturing or distribution. See
United States v. Jones, 778 F.3d 375, 384 (1st Cir. 2015). To
this end, the Act directed the Sentencing Commission to
amend the United States Sentencing Guidelines to add an
enhancement for defendants engaged in such activity. See
United States v. Johnson, 737 F.3d 444, 446 (6th Cir. 2013).
The Commission added § 2D1.1(b)(12), which provides for a
3
The District Court had jurisdiction pursuant to 18
U.S.C. § 3231. We have jurisdiction pursuant to 18 U.S.C. §
3742(a) and 28 U.S.C. § 1291. Our review of the District
Court’s interpretation of the Sentencing Guidelines is plenary,
and we review factual findings for clear error. United States
v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en banc).
5
two-level increase for a defendant who “maintained a
premises for the purpose of manufacturing or distributing a
controlled substance.” For the enhancement to apply, the
Government must prove by a preponderance of the evidence
that the defendant “(1) knowingly (2) open[ed] or
maintain[ed] any place (3) for the purpose of manufacturing
or distributing a controlled substance.” Johnson, 737 F.3d at
447; United States v. Flores-Olague, 717 F.3d 526, 531 (7th
Cir. 2013); United States v. Miller, 698 F.3d 699, 706 (8th
Cir. 2012).
Carter does not dispute that the first and third elements
are met here. The record shows that Carter knew about the
activities at the properties, as he was intimately involved in
the operation of the enterprise, directing both the flow of
money throughout the organization and controlling his
employees’ actions in connection with their drug distribution
activities.
Similarly, it is undisputed that both properties were
kept primarily to advance the drug enterprise. See Johnson,
737 F.3d at 449 (enhancement does not apply where storage
at the location was an “incidental or collateral use” for the
premises). At both locations, law enforcement found, among
other things, drugs and drug paraphernalia. In addition, both
Macon and Earheart testified that Stoney Run was regularly
used to store drugs prior to distribution, and the reason for
renting the property was to provide Macon a place to live and
work while he was “on assignment” at Carter’s behest. It is
also undisputed that Bedford Street was a drug factory where
Cook prepared product for delivery to Stoney Run and
eventual sale. Thus, the only question before us is whether
Carter “maintained” the premises.
6
Although the word “maintained” is not defined in
either § 2D1.1(b)(12) or § 856, two sources provide insight
into the term’s definition. See Jones, 778 F.3d at 384. The
Guidelines commentary instructs that, in determining whether
the defendant “maintained” the property, we should consider,
among other things, (a) whether the defendant “held a
possessory interest” such as owning or renting the premises,
and (b) “the extent to which the defendant controlled access
to, or activities at, the premises.”4 U.S.S.G. § 2D1.1 cmt.
n.17. Case law examining § 856, which makes it unlawful to
“knowingly open, lease, rent, use, or maintain any place . . .
for the purpose of manufacturing, distributing, or using any
controlled substance,” also provides guidance. Courts
interpreting the term “maintain[ing]” in § 856 have looked to
a variety of factors such as “control, curation, acquisition of
the site, renting or furnishing the site, repairing the site,
supervising, protecting, supplying food to those at the site,
and continuity.” Jones, 778 F.3d at 384 (quoting United
States v. Clavis, 956 F.2d 1079, 1091 (11th Cir. 1992)).
Neither the Guidelines commentary nor the case law
interpreting § 856 requires that the defendant be physically
present or involved on a daily basis to “maintain” a premises
for the purpose of the enhancement. Rather, the enhancement
is flexible and adaptable to a “variety of factual scenarios.”
Flores-Olague, 717 F.3d at 532. A court may consider,
4
We are bound by “Guidelines commentary []
interpreting or explaining the application of a guideline.”
United States v. Nagle, 803 F.3d 167, 179 (3d Cir. 2015)
(quoting United States v. Savani, 733 F.3d 56, 62 (3d Cir.
2013)).
7
among other things, whether a defendant “exercise[d] control
over” the property, id., or supervised or directed others to
engage in certain activities at the premises, see United States
v. Morgan, 117 F.3d 849, 857 (5th Cir. 1997).
Applying these factors, we discern no error in the
District Court’s application of the stash house enhancement,
and reject Carter’s arguments to the contrary. Carter’s
argument that he lacked the possessory interest necessary to
have “maintained” the properties because he was not the
owner or renter is meritless. Carter appropriately concedes
that the absence of his name on a deed or lease is insufficient
to preclude the enhancement’s application. As the Court of
Appeals for the First Circuit observed, “[t]he enhancement
does not require either ownership or a leasehold,” because “it
would defy reason for a drug dealer to be able to evade
application of the enhancement by the simple expedient of
maintaining his stash house under someone else’s name.”
Jones, 778 F.3d at 385 (internal citations omitted); see also
Flores-Olague, 717 F.3d at 532 (“ownership is not dispositive
of whether [one] ‘maintains’ a stash house”).
Carter’s argument that he did not maintain the stash
house because any money used to operate it came from the
organization’s funds and not his own profits is also
unavailing. Undisputed testimony demonstrates that Carter
maintained a direct interest in every dollar that came into the
organization, and that Macon, in managing the day-to-day
business, had to account to Carter for all revenue and
expenditures.
In addition to controlling the funds used to rent the
properties, Carter played a major role in overseeing the
8
acquisition and operations of the stash houses, despite the fact
he lived in Detroit. Macon, who was in Pennsylvania only on
orders from Carter, needed Carter’s approval to rent the
location at which Macon resided and carried out his business
for Carter’s organization. Carter tasked Earheart with finding
Stoney Run, personally approved its acquisition, inspected it
after it was secured, and told Earheart to get the necessary
funds from Macon to pay the rent. In addition, Carter
oversaw the financial management of both Stoney Road and
Bedford Street, as he directed Macon to pay the rent and any
other expenses, and demanded details about such transactions.
Carter also controlled the activities at each location.
At his direction, Bedford Street was used to prepare drugs for
distribution. In addition, Carter ensured that his employees
were at the house working, going so far as to threaten
Earheart while she was in the hospital to ensure she returned
to work. Thus, the evidence showed that Carter controlled
the activities of his employees and the places where essential
parts of the operation were conducted. With such a high level
of control, and “[w]here the evidence shows that over a
period of time the defendant . . . direct[ed] the activities of
and the people in a place,” Morgan, 117 F.3d at 858, we
cannot say that the District Court erred in finding that Carter
“maintained” the stash houses for purposes of applying the
enhancement.
III
For the foregoing reasons, we will affirm the judgment
of sentence.
9