United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-3197

___________ United States of America, * * Appellee, * * v. * Appeal from the United States * District Court for the District Jerry D. Jensen, * of Nebraska. * Appellant. *

___________ Submitted: January 13, 1998 Filed: April 2, 1998

___________ Before RICHARD S. ARNOLD, Chief Judge, BRIGHT and WOLLMAN, Circui t Judges.

___________ BRIGHT, Circuit Judge.

Je rry Jensen appeals the judgment of conviction on one count of conspiracy to distribute amphetamine and his sentence of 150 months. Jensen contends tha t insufficient

evidence exists to support his conspiracy conviction. Jensen also argues that because t

he government failed to specifically prove the existence of a conspiracy between Jensen and Todd Milbo urn, the district court erred in admitting into evidence tape-recorded conversation s of Milbourn planning a drug sale to an undercover police informant. With respect to his 150-month sentence, Jensen asserts that the districtIn l ight of our ruling that sufficient evidence does not support Jensen’ s 1 conviction, we need not reach other issues raised by Jensen in this appeal. -2- court erred in imposing a two-point enhancement for possession of a firearm, and by denying his request for a downward departure because of his deteriorating health

. Bec ause sufficient evidence in the record does not support Jensen’s conviction fo r conspiracy to distribute amphetamine, we reverse. 1

I. BACKGROUND

On August 6, 1996, the Lincoln Police Department arrested Todd Milbour n when M ilbourn attempted to sell three grams of amphetamine (“crank”) to Jame s Monlyn, an

undercover police informant. Milbourn identified appellant Jensen as his
source for crank. Following the arrest of Milbourn, officers of the Lincoln/Lancaster County Narcotics Unit arrested Jensen. Subsequent searches of Jen sen’s residence and vehicles produced substantial amounts of amphetamine and mone y, drug paraphernalia, an address book, a pager, and a .22 caliber revolver with a holster and ammunition.
At Jensen’s trial, the government relied upon the testimony of several of Jensen’s allege d co-conspirators to establish the existence of a conspiracy. The alleged co

conspirators, including Milbourn, James Phipps, Michael Ern st, Melayne Danekas, and Paula Waldren, all testified on behalf of the government pursuant to plea agreements. Milbourn me t Jensen about three years before the trial of this case through a mutua l friend, Chris Muggy. Milbourn testified that he obtained crank from Jensen about three times per w eek, a half-gram to two grams at a time. Milbourn stated that Muggy had
a similar pattern of purchasing crank. According to Milbourn, he and Muggy ofte n used crank together a

nd shared drugs with each other. Milbourn admitted that he had a “pretty bad” drug habit during the three years prior to his August 6th arrest.Testimony at trial established that Fruit Fresh, a brand name for a foo d 2 preservative, serves as a substance for diluting some types of drugs, including crank. -3- Milbourn only identified one person, Monlyn (the pol ice informant), as someone to whom Milbourn sold drugs that were originally obtained from Jensen. Otherwise, Milbo urn’s testimony only indicates that he and Muggy personally used the drug s purchased from J ensen. The record shows that Milbourn sold Monlyn crank on three
se parate occasions in July and August of 1996, totaling approximately four grams

. Milbour n testified that on the day of his arrest, Monlyn drove Milbourn to Jensen' s home , where Monlyn waited outside and down the street while Milbourn went int o Jense n’s home to purchase the crank. Milbourn testified that after he made hi s purchase, he went into Jensen’s bathroom and closed the door. Milbourn then too k
some of t he crank out and replaced it with Fruit Fresh so that he could keep som e 2

cr ank for himself without Monlyn’s knowledge. On this occasion, and on previou s
oc casions, Milbourn witnessed other individuals purchasing crank from Jensen. O n previous occasions, Milbourn also witnessed Jensen in possession of a large amount of money and drugs, and a handgun.
At trial, the government introduced several t apes of phone conversations and inperso n conversations between Monlyn and Milbourn in which the two men planne d Milbourn’s three sales of crank to Monlyn. The district court allowed these tapes to go to the jury over Jensen’s hearsay objections because the district court determined that t he taped conversations constituted admissions of Jensen’s co-conspirator , Milbourn.
James Phipps met Jensen through a mu tual acquaintance, Larry Wilson. Phipps tes tified that he advanced, or fronted, one-half gram ($50.00 sale price) of crank t o Jensen. Phipps asserted that mere users of dru gs usually did not purchase drugs in this manner. Phipps also testified that Jensen had been present on several occasions when Phipps fronted crank t o Larry Wilson and on occasions when Phipps collected money-4-

fr om Wilson. Although Phipps did not have any personal knowledge of Wilson’ s relationship with Jensen, Phipps “believed” that Jensen he lped Wilson distribute drugs. However, Phipps acknowledged that Wilson never actually told him that Wilson had any persons selling drugs for him.

Michael Ernst met Jensen through Ernst’s girlfriend, Julie Burt. Ernst testified that he received approximately one-fourth to one-half gram of crank from Jensen. Ernst further testified that he sold approximately one and one-half ounces of crank to Jensen. Withrespect to Burt, Ernst’s girlfriend, Ernst stated that although he did not see any transactions between Burt and Jensen, Ernst believed that Burt sold drugs to Jensen. Ernst, however, did not provide any detail s of Burt’s alleged sales to Jensen, including the amount of drugs involved.
Melayne Danekas met Jensen through her friend, Shelly Fetty. Da nekas testified that she sporadically u sed and sold crank for about ten years. Danekas estimated that she purchased c rank from Jensen on approximately five occasions. On one occasion, Danekas stated that she overheard a discussion between Fetty and Jensen relating to a trip Fettyand Jensen took to Grand Island in order to obtain drugs. Danekas stated that Fetty appeared angry at Jensen because Jensen had left Fetty in Grand Island

. Accord ing to Danekas, Jensen left Fetty in Grand Island because the two had no t obtai nedany drugs and Jensen wanted Fetty to remain in Grand Island to continu e looking for drugs. Danekas also testified that she witnessed numerous other peopl e buying crank from Jensen.

Paula Waldren, Jensen’s girlfriend, testified that she witnessed many people in their home buying drugs. Waldren testified that she made Jensen keep his drugs in a locked box because of their small child. Waldren also stated that the gun that police found in their search belonged to Jensen’s father and that Jensen kept it as collateral for a loan of money that Jensen made to his father.-5-

Th e jury returned a guilty verdict on one count of conspiracy to distribut e amphetamine. At the sentencing hearing, Jensen moved the district court for a downward departure under § 5K2.0 and § 5H1.4 of the Sentencing Guidelines based upon the diagnosis that Jensen has a serious health co ndition. The district court denied Jensen’s motion for downward departure, stating that “[t]he evidence is insufficien t . . . to conclude that a downward departure is justified.” The district court determined that J ensen had a criminal history category of VI and an offense level of 26, whic h included a two-point enhancement under § 2D1.1(b)(1) of the Sentencing Guidelines based upon di scovery of a .22 caliber handgun at Jensen’s home. The district cour t sentenced Jensen to 150 months imprisonment.

II. DISCUSSION

Jensen arg ues that insufficient evidence exists in the record to support hi s conviction for conspiracy to distribute amphetamine. In reviewing a challenge to the sufficiency of the evidence, we may reverse a jury’s verdict only where a reasonable fact-finder must have harbored reasonab le doubt relating to the government’s proof on at least one of the essential eleme nts of the offense. United States v. McCracken , 110 F.3d 535, 540 (8th Cir. 1997). In applying this standard, we allow the jury’s verdict the benefit of all reasonable inferences from the record. Id.

In a conspiracy prosecution, the government must prove beyond a reasonabl e doubt: (1) the existence of an agreement to achieve some illegal purpose; (2) “that the defendant knew of the a greement[;]” and (3) “the defendant knowingly became a part of the co nspiracy.” United States v. Ivey , 915 F.2d 380, 383-84 (8th Cir. 1990 ) (citation omitt

ed). In the present case, we conclude that while the government’s case may establish a series of small quantity, buyer/seller transactions, the record does not establish that Jensen participated in any conspiracy to distribute amphetamine.Milbourn testified that he purchased between one-half and two grams of crank 3 about three time a week, depending on how much money Milbourn had at the time. We do not c onsider this quantity alone as necessitating a conclusion that Milbourn resold the drugs in light of Milbourn’s acknowledgment that he had a serious drug problem during this time period. Furthermore, nothing in Milbourn’s testimony indicates that Jensen would have known about or assented to Milbourn’s reselling of the drugs.
-6- This court has previously ruled that “a mere sales agreement [between a buyer and seller] with respect to contraband does not constitute a conspiracy . . . .” United States v. West , 15 F.3d 119, 121 (8th Cir. 1994) (citing United S tates v. Prieskorn , 658 F.2d 631, 633 (8th Cir. 1981)). As stated, s everal of Jensen’s alleged co-conspirators, inc luding Milbourn, Phipps, Ernst, Danekas, and Waldren, testified on behalf of th e gover nment

pursuant to plea agreements. The government asserts that Milbourn’ s testimo ny established a drug distribution conspiracy between Milbourn and Jensen

. However, the record reflects that Milbourn testified primarily about his purchases of crank from Jensen for Milbourn’s personal use. Milbourn’s testimony does n ot indicate that Milbourn resold the amphetamine as a distribution s cheme. Milbourn’s testimony 3 reflects that his only resale of crank obtained from Jensen consisted of his sale t o Monlyn, the government info rmant, as part of a setup. However, the record lacks any evidence th at Jensen knew of or agreed with Milbourn’s plan to resell the crank t o Monly n. Moreover, Milbourn’s testimony indicates that on August 6, Milbourn kept
secre t his intentions to resell the crank by making Monlyn wait outside and down the street fro m Jensen’s home. In addition, Milbourn went into Jensen’s bathroom an d closed the door to conceal his exchange of Fruit Fresh for some of the crank so that he could perso nally use some of the crank before selling it to Monlyn. Without an y sug gestion from Milbourn that Jensen knew of and agreed with Milbourn’s plan t o resel lthe crank obtained from Jensen, Milbourn’s testimony does not support a conclusion that Jensen and Milbourn par ticipated together in a conspiracy to distribute amphetamine. See West , 15 F.3d at 121.-7-

Next, the government asserts that Phipps’ testimony established a conspirac y between Phipps and Jensen to distribute amphet amine. The record reflects that Phipps frontedone-half gram of crank to Jensen on only one occasion. Phipps testified that he “believed” that Jensen would resell the one-half gram of crank, be cause mere buyers did not usually purchase crank on a front basis. Howe ver, Phipps stated that he had no actual knowledge of whether Jensen resold or personally used the one-half ounce o f crank

. In addition, Phipps testified that he believed Jensen assisted Wilson i n distr ibuting drugs because Phipps occasionally saw Jensen with Wilson when Phipps collected money from Wilson. Phipps admitted, however, that he had no persona l knowledge to s upport this belief. In fact, Phipps testified that Wilson never informed him that anyone assisted him in his drug distribution. Accordingly, we conclude that Phipps’ testimony does not establish that Jensen participated in a conspiracy t o distrib ute amphetamine. See Ivey , 915 F.2d at 384 (“Evidence of association o r acquaint ance, though relevant, is not enough by itself to establish a conspiracy.” ) (ci tations omitted); United States v. Hernandez , 986 F.2d 234, 236 (8th Cir. 1993 ) (“Mere presence at the location of the crime alone, even when cou pled with knowledge of tha t crime, is not sufficient to establish guilt on a conspiracy charge.”) (citatio n omitted).

With re spect to Melayne Danekas, we note that Danekas testified that sh e overheard Jensen and Shelly Fetty dis cussing a trip to Grand Island to purchase drugs. Daneka s, however, did not testify that Jensen and Fetty actually obtained drugs. I n fact, according to Fetty, Jensen left Fetty at Grand Island because they could no t purchase drugs. The remaining portion of Danekas’ testi mony related to Jensen selling crank to various individuals. We conclude that this testim ony amounts to nothing more than e vidence of mere buyer/seller exchanges, which does not establish the existence of a conspiracy. See West , 15 F.3d at 121.
Finally, after reviewing Paula Waldren’s testimony, we conclude that Waldren’s testimony does not indicate that Jensen participated in any conspiracy to distribute-8-

drugs. Waldren obviously knew Jensen sold drugs to others because Jensen carried on most of his sales in their home. However, at no point during Waldren’s testimony does she describe any situation that would suggest that Jensen conspired with anyone else to distribute amphetamine.

III. CONCLUSION

In any conspiracy charge, the government possesses the burden of provin g beyo nda reasonable doubt that the defendant knowingly agreed to become part of a conspiracy to achieve an illegal purpose. While the evidence establishes that Jensen sold si gnificant amounts of drugs to numerous individuals, the government did no t charge him with any substantive offense. The government only charged Jensen with conspiracy to distribute amphetamine, which the government did not prove in this case. Accordingly, we reverse the district court’s judgment of conviction.
RICHARD S. ARNOLD, Chief Judge, dissenting.

I agree with much of what the Court says. Most of the government's evidence at this t rial showed only buyer-seller relationships. The testimony of Melayn e Danekas, however, seems to me to support a reasonable inference that Jensen was a party to a conspiracy to distribute methamphetamine. This testimony is summarize d in the Court's opinion, ante at 4. I believe the jury could reasonably infer from thi s evidence that Jensen and Fetty agreed to go to Grand Island to buy drugs for resale

. This would be sufficient evidence to support a conviction.-9-

A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.