*After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of this appeal. SeeFed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The cause therefore is ordered submitted without oral argument. 

## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 29 1997 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ARMONDO VALDEZ-ARIETA, Defendant-Appellant. No. 97-8014 (D.C. No. 96-CR-0026-D) (District of Wyoming)

Submitted on the briefs : * Patrick J. Crank, Assistant United States Attorney, Casper, Wyoming (David D. Freudenthal, United States Attorney, District of Wy oming, with him on the brief), for Plaintiff-Appellee. Maynard D. Grant, Grant & Newcomb, Seattle, Washing ton, for DefendantAppellant.

Before BRORBY , EBEL and KELLY , Circuit Judges.

EBEL , Circuit Judge.- 2 -

Defendant-Appellant Armando Valdez-Arieta ("Valdez ") pled guilty to conspiracy to possess with intent to distribute and distribution of illegal drugs. The district court enhanced Valdez's offense level by two levels pursuant to U.S.S.G. § 3B1.1(c) (1995) for his role as an organ izer of a criminal enterprise. Valdez now appeals. We affirm.
BACKGROUND In June, 1995, Valdez agreed to join Deborah Lynn N eary ("Neary") in a criminal venture to supply cocaine, methamphetamine , and marijuana to users in the Rock Springs, Wyoming, area. Neary and Valdez worked as team, running the enterprise as joint partners. Neary had been distr ibuting drugs prior to her association with Valdez, but Valdez's participation in the operation allowed Neary to expand the business significantly. Specifically , Valdez recruited the services of additional individuals to act as suppliers for t he conspiracy -- none of whom would have worked with Neary without Valdez's invol vement in the scheme -- and was able to acquire a much larger amount of dru gs than Neary had been able to distribute alone. These suppliers were of Hispa nic origin and only trusted Valdez because of his Hispanic background and becau se he could converse with them in Spanish. Where Neary previously had been d ealing relatively small amounts of drugs, i.e. regularly only eighths of an ounce of cocaine, Neary and Valdez together entered into deals involving much l arger quantities. Neary and1 The district court did not include the unpurchased kilogram of methamphetamine

in calculating the amount of drugs involved in the offense at sentencing. - 3 - Valdez were on the verge of purchasing a kilogram o f methamphetamine for distribution, and their plans were forestalled only because of their timely arrest. 1 Valdez had eight ounces of cocaine in his possessio n for distribution at the time of his arrest. Valdez also coordinated the activit ies of the new suppliers, instructed at least one of the suppliers on how to cut and weigh the drugs, determined the financial terms for many of the sale s, and shared responsibilities with Neary for overseeing the operation. Valdez eventually pled guilty to conspiracy to poss ess with intent to distribute and distribution of cocaine and methamph etamine in violation of 21 U.S.C. § 846(a)(1). As part of the plea agreement, the government dismissed a second charge against Valdez for distributing metha mphetamine and aiding and abetting the distribution of methamphetamine. The government also agreed that Valdez was entitled to a three-level reduction unde r the Sentencing Guidelines (the "Guidelines") for his acceptance of responsibi lity pursuant to U.S.S.G. § 3E1.1(a) (1995). However, the district court impos ed a sentence of 144 months of imprisonment and 5 years of supervised release a fter assessing a two-level enhancement under U.S.S.G. § 3B1.1(c) (1995) for Va ldez's role in organizing the drug distribution operation. Valdez now appeals th e sentence enhancement.2U.S.S.G. § 3B1.1 (1995) states:

Based on the defendant's role in the offense, increase the offense level as follows: (a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels. (b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels. (c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels. - 4 - DISCUSSION Section 3B1.1 of the Guidelines allows a court to enhance a sentence for the defendant's aggravating role in the underlying offense. Section 3B1.1(c) states that two offense levels should be added to t he sentencing calculation if the "defendant was an organizer, leader, manager, or supervisor in any criminal activity" involving less than five participants. 2 A district court "must make specific findings" and advance a factual basis to s upport an enhancement under § 3B1.1. United States v. Ivy , 83 F.3d 1266, 1292 (10th Cir. 1996) (quoting Unit ed States v. Wacker , 72 F.3d 1453, 1477 (10th Cir. 1995)). "[E]ven if the record overwhelmingly supports the enhancement, appellate fact-finding cannot substitute for the district court's duty to articul ate clearly the reasons for the enhancement." Id

. We review a district court's factual findings suppo rting a sentence enhancement for clear error. United States v. Pell iere , 57 F.3d 936, 940 (10th- 5 -

Cir. 1995). The district court's application of th ose facts to the sentencing guidelines is reviewed de novo. Id . Under the clearly erroneous standard, we will not reverse the district court's findings unle ss they are "without factual support in the record, or unless after reviewing al l the evidence, we are left with the definite and firm conviction that a mistake has been made." United States v. Mandilakis , 23 F.3d 278, 280 (10th Cir. 1994) (quoting United States v. Brown , 995 F.2d 1493, 1500 (10th Cir. 1993)). Valdez contends both that the district court did no t make the proper factual findings necessary to support a sentence enhancemen t calculation under § 3B1.1(c) and that the record reveals no evidentiary basis for the enhancement. We disagree. The district court found that: [A] role adjustment of two more accurately reflects the defendant's 50/50 partnership with Deborah Neary. Clearly the defend ant, because of his contacts, played an instrumental role in obtaining the drugs which he and Miss Neary then distributed. Defendant also played a substantial role in organizing the acquiring of these drugs on a numberof occasions. The district court concluded that Valdez significan tly enhanced the drug dealing operation by providing a much larger supply of drug s from sources to which Neary did not have access and by increasing the vol ume of drugs supplied by Neary's prior sources. Although the district courtdid not use the exact words of § 3B1.1(c) to describe Valdez's role in the endeavor, it did find that he played "a substantial role in organizing" the criminal activi ty. We hold that the district- 6 -

court's statement constituted a sufficiently clear and articulated reason for the enhancement under the Guidelines. We also conclude that the district court properly f ound that Valdez was an organizer of the conspiracy. Valdez argues that th e district court never found that he exercised any control over other parties involve d in the conspiracy and adds that the record yields no evidence that he exercise d any control over subordinates or underlings in the conspiracy. While we agree wi th Valdez on both points, we nevertheless conclude that the district court did n ot err by applying § 3B1.1(c). Section 3B1.1(c) allows an enhancement for leaders, supervisors, managers and organizers. Valdez complains that he could nothave controlled or directed Neary because they acted together as joint partners and because one can only direct underlings or subordinates, not an equal partner. Valdez, however, misreads this court's prior cases interpreting § 3B 1.1(c). While control over others is required for a finding that a defendant w as a leader, supervisor, or manager, we hold that no such finding is necessary to support an enhancement for acting as an organizerunder § 3B1.1(c). A defendant can organize an ill egal activity without exercising control over the other participants in the activity. Thus, the fact that Neary was a co-partner instead of a subordinate does not preclude an enhancement in Valdez's offense level f or acting as an organizer pursuant to § 3B1.1(c). Cf. United States v. Hutching , 75 F.3d 1453, 1458 (10th- 7 -

Cir.) (in applying 21 U.S.C. § 848(c)(2)(A), we dif ferentiated between an organizer "who arranges a number of people engaged in separate activities into an essentially orderly operation" and a supervisor who "gives orders or directions to another person who carries them out."), cert. denie d , 116 S. Ct. 2502 (1996). A defendant satisfies § 3B1.1 by controlling ororganizing others in a criminal activity. United States v. Reid , 911 F.2d 1456, 1464 (10th Cir. 1990) (the key "determinants of the applicability of sect ion 3B1.1 are control or organization.") (emphasis added). In order for § 3 B1.1 to apply, "the defendant must have exercised some degree of control over oth ers involved in the commission of the offense or he must have been resp onsible for organizing others for the purpose of carrying out the crime." Id . (emphasis added); see also United States v. Edwards , 69 F.3d 419, 439 (10th Cir. 1995), cert. denied , 116 S. Ct. 2497 (1996); United States v. Bernaugh , 969 F.2d 858, 862-63 (10th Cir. 1992). It is true that the "leader," "manager," and "super visor" prongs of § 3B1.1(c) do suggest an element of control over othe rs. See United States v. Cordoba , 71 F.3d 1543, 1547 (10th Cir. 1995) ("Enhancementunder section 3B1.1(b) [regarding management and supervision] app lies to a defendant who 'exercised some degree of control or organizational authority over someone subordinate to him in the drug distribution scheme. '") (quoting Pelliere , 57 F.3d at 939-40, and United States v. Roberts , 14 F.3d 502, 524 (10th Cir. 1993)).- 8 -

However, we do not believe that such a conclusion i s required to find that a defendant was an "organizer" of criminal activity. While a finding that the defendant controlled or directed underlings or subo rdinates may be sufficientto justify an enhancement for organizing under § 3B1.1 (c), the presence of underlings and subordinates is not necessaryto support such an enhancement. The Guidelines list a number of factors courts shou ld consider to determine whether a defendant played an organizational role, including: the exercise of decision making authority, the natu re of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature a nd scope of the illegal activity, and the degree of control and authority e xercised over others. U.S.S.G. § 3B1.1, comment. (n. 4) (1995). Some of these factors relate to the control of other participants and other factors add ress organization. The Guidelines add, "There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or co nspiracy." Id . Nothing in the Guidelines requires that an organizer must exercise some direction or control over underlings. Indeed, "[t]he Guidelines do not requi re that each of the factors" listed in the application notes be satisfied for § 3B1.1 to apply. Bernaugh , 969 F.2d at 863.- 9 -

Commentary Note 2 to § 3B1.1 allows an upward departure for a defendant who merely manages or organizes the assets of a cri minal organization, even though the defendant did not organize, lead, manage , or supervise another participant. See U.S.S.G. § 3B1.1, comment. (n.2) (1995). Such language reveals an intent to allow an increased sentence under § 3B 1.1 even when a defendant did not control subordinates. We rely on "pertinent po licy" statements issued by the Sentencing Commission in "determining the particula r sentence to be imposed" under the Guidelines. 18 U.S.C. § 3553(a) (1997). We recognize that this court has on several occasio ns used dicta suggesting that the presence of subordinates under the defenda nt's control was required to consider a defendant an organizer under § 3B1.1. H owever, in each of these cases, either the enhancement could be upheld underthe control prongs of "leader," "manager," or "supervisor," or the enhanc ement was struck down because the court found that the defendant neither organized nor controlled others. None of these cases held that organization of, without control over, subordinates was insufficient to support an enhance ment under § 3B1.1(a) or (c).
See United States v. Litchfield , 959 F.2d 1514, 1523 (10th Cir. 1992) (finding no organization or control); United States v. Smith , 951 F.2d 1164, 1170 (10th Cir. 1991) (finding no organization or control); United States v. Reid , 911 F.2d 1456, 1464 (10th Cir. 1990) (stating that § 3B1.1(a) sugg ests the presence of underlings- 10 -

or subordinates, but then stating unequivocally that an enhancement can be predicated on either the organization orcontrol of others and upholding an enhancement upon finding that the defendant exercis ed both organization and control over an extensive criminal enterprise); Uni ted States v. Bauer , 995 F.2d 182, 183-84 (10th Cir. 1993) (citing Reid , but upholding enhancement under § 3B1.1(c) because the defendant was both an organize r and a controller). Other circuits have similarly rejected the view that an organizer must control or direct subordinates to qualify for an en hancement under § 3B1.1. United States v. Grady , 972 F.2d 889 (8th Cir. 1993) (per curiam) (uphold ing an enhancement under § 3B1.1(a) and stating, "We defin e the term 'organizer or leader' broadly . . . . [The defendant] may be an organizer or leader without having directly controlled his coconspirators."); s ee also United States v. Billingsley , 115 F.3d 458, 465 (7th Cir. 1997) (upholding an e nhancement under § 3B1.1(c) and stating, "[T]he overall focus under se ction 3B1.1 is relative responsibility within a criminal organization . . . . [E]ven if a defendant did not exercise control [over subordinates], an enhancemen t under § 3B1.1 may apply so long as the criminal activity involves more than on e participant and the defendant played a coordinating or organizing role.") (citati ons omitted); United States v. Giraldo , 111 F.3d 21, 24 (5th Cir. 1997) (finding an enhan cement under § 3B1.1(c) appropriate where the defendant simply org anized other participants by3 As support for its holding in Kelley , the D.C. Circuit cites United States v. Hoac ,

990 F.2d 1099, 1110-11 (9th Cir. 1993); Litchfield , 959 F.2d at 1522-23; United States v. Rowley , 975 F.2d 1357, 1364 (8th Cir. 1992); United States v. Belletiere , 971 F.2d 961, 969-70 (3rd Cir. 1992); and United States v. DeCicco , 899 F.2d 1531, 1535 (7th Cir. 1990). However, after reviewing these cases, we find that none of them actually require control over subordinates or underlings to support an enhancement under § 3B1.1(c). - 11 - obtaining the money suppliers and recruiting the ac complices necessary to complete a large drug transaction, even though the defendant did not control or direct subordinates), cert. denied , 66 USLW 3282 (Oct. 14, 1997); butsee United States v. Kelley , 36 F.3d 1118, 1129 (D.C. Cir. 1994) (agreeing in dicta with cases it read as holding that § 3B1.1(c) applies on ly to one who exercises control over criminally responsible subordinates, but affir ming an enhancement under § 3B1.1(c) in any event because the defendant did con trol subordinates). 3 Therefore, while control over subordinates is requi red to find that a defendant played a management, supervision, or lead ership role in a criminal activity, we conclude that a sentence enhancement u nder § 3B1.1(c) for a defendant who acts as an organizer does not require the presence of underlings in the endeavor. As a result, a defendant may be puni shed as an organizer under § 3B1.1(c) for devising a criminal scheme, providing the wherewithal to accomplish the criminal objective, and coordinating and overse eing the implementation of the conspiracy even though the defendant may not have a ny hierarchical control over the other participants. Valdez cannot rely on Neary's equal culpability as a co-- 12 -

conspirator as a shield against a sentence enhancem ent for playing an aggravating role in the offense. Under this standard, the record provides sufficientevidence that Valdez acted as an organizer: he provided the sources Nea ry was unable to secure to supply the drugs necessary for the distribution sch eme; he directed those suppliers to deliver particular amounts of drugs at times and places determined by him; and he decided on the financial arrangements concerning the deliveries. See , e.g. Bernaugh , 969 F.2d at 864 (affirming a sentence enhancementunder 3B1.1(a) for defendant's role as an organizer or leader where th e defendant acted as the "moneyman" for a drug ring, recruited others to participate in the operation, provided transportation for participants to drug tr ansactions, engaged in negotiations concerning the transaction, and had po ssession of most of the drugs at some point prior to his arrest); Billingsley , 115 F.3d at 465 (devising scheme, recruiting accomplices, serving as main participantin offense, and receiving largest share of benefit of criminal enterprise qua lified defendant as an organizer under § 3B1.1(c)); Giraldo , 111 F.3d at 24 (defendant acted as an organizer u nder § 3B1.1(c) by recruiting accomplices and providing money necessary for a drug transaction); United States v. Garin , 103 F.3d 687, 690 (8th Cir. 1996) (providing drug supply for distribution qualified defendant fo r § 3B1.1 enhancement), cert. denied , 117 S. Ct. 1323 (1997).- 13 -

Because evidence in the record supports the distric t court's finding that Valdez organized the drug distribution ring, the co urt did not err in enhancing Valdez's sentence pursuant to section 3B1.1(c) of t he Guidelines. The judgment of the district court is AFFIRMED.