Opinion ID: 3046946
Heading Depth: 3
Heading Rank: 2

Heading: The Cocaine Conspiracy Was Properly

Text: Incorporated as Relevant Conduct Under § 2S1.1(a)(1) Blackmon also argues that, should we determine he is a direct money launderer under Guidelines § 2S1.1(a)(1), the District Court, by adopting the PSR, improperly calculated the base offense level because it included the cocaine conspiracy 6 Indeed, Count Four of the Indictment lists the “distribution of cocaine,” in violation of 21 U.S.C. § 841, as the “unlawful activity” underlying the money laundering offense. 16 from Count One in the “underlying offense” as relevant conduct under Guidelines § 1B1.3. See Appellant’s Br. 20 (arguing the PSR “carr[ied] over the offense level for the drug conspiracy to the money laundering [G]uideline[], regardless of the fact that the government had failed to offer any evidence that the drug conspiracy involved any actual acts of money laundering”). The incorporation of the drug amount from the cocaine conspiracy added significantly to the base offense level. He contends that only the $15,000 from the sting transaction should control the base offense level. The Government responds to this argument by explaining that Blackmon distorts the issue. It asserts that the question of incorporating relevant conduct into the “underlying offense” under § 2S1.1(a)(1) is not whether there was relevant money laundering conduct during the course of the cocaine conspiracy. Instead, it is whether the cocaine conspiracy was relevant conduct to the cocaine distribution, which we have already determined is the “underlying offense” for purposes of sentencing Blackmon as a direct money launderer under subsection (a)(1). Blackmon’s argument mistakenly focuses on the laundered funds, which is the method subsection (a)(2) uses to calculate the base level by determining the “value of the laundered funds,” rather than on the nature of the offense, which is the method subsection (a)(1) uses to calculate the base level by considering the “underlying offense.” For drug offenses, such as the cocaine distribution and the overarching cocaine 17 conspiracy, the Guidelines direct that the base offense level is set by the quantity of drugs involved. See U.S.S.G. § 2D1.1(c)(2) (“Drug Quantity Table”). Here we examine two questions: (1) whether, in calculating the base offense level under § 2S1.1(a)(1), a district court can incorporate any relevant conduct under Guidelines § 1B1.3 into the “underlying offense”; and (2) if relevant conduct can be incorporated, whether the District Court properly treated the cocaine conspiracy as such. We answer yes to both questions. Accordingly, we hold that, in calculating Blackmon’s base offense level, the District Court properly considered not only the single kilogram of cocaine directly related to the money laundering offense, but also his involvement in the cocaine conspiracy, as relevant conduct. Although we have not addressed the more general question whether relevant conduct under Guidelines § 1B1.3 can be incorporated into § 2S1.1(a)(1), other appellate courts have considered this issue and have uniformly concluded that relevant conduct is applicable. See, e.g., United States v. CruzandoLaureano, 440 F.3d 44, 48 (1st Cir. 2006) (directing “the sentencing court to take as the base offense level for purposes of § 2S1.1 the full calculated offense level that applies to the offense which produced the laundered funds” by “calculat[ing] the sentence as it would have applied to the extortion counts standing alone, [including all relevant conduct,] . . . then . . . return to § 2S1.1”); United States v. Charon, 442 F.3d 881, 887–88 (5th Cir. 2006) (explaining the “underlying offense” 18 includes all relevant conduct); see also United States v. Anderson, 526 F.3d 319 (6th Cir. 2008) (determining defendant’s involvement in the drug conspiracy and the amount of drugs she “could have reasonably foreseen” for setting her base offense level on her money laundering charge). We agree with our sister courts. Under § 2S1.1(a)(1), we take the view of the First Circuit Court that, to calculate correctly the base offense level of the “underlying offense,” the sentencing judge must consider that offense a stand-alone crime. Cruzado-Laureano, 440 F.3d at 48. Here, the underlying offense for the money laundering count is the cocaine distribution. If the cocaine distribution were a stand-alone crime, there would be no question that the relevant conduct rules of § 1B1.3 would apply to determine the appropriate Guidelines range. U.S.S.G. §§ 1B1.2(b) (“After determining the appropriate offense guideline section[,] . . . determine the applicable guideline range in accordance with § 1B1.3 (Relevant Conduct).”), 1B1.3. To illustrate, relevant conduct plays a significant role in drug offenses when calculating the quantity of drugs involved in an offense to which Guidelines § 2D1.1 applies, such as this case. See id. § 2D1.1 cmt. n.12 (“Types and quantities of drugs not specified in the count of conviction may be considered in determining the offense level. See § 1B1.3(a)(2) (Relevant Conduct).”); United States v. Clark, 415 F.3d 1234, 1240–41 (10th Cir. 2005) (“Under the Guidelines, a sentencing court in calculating the quantity of drugs involved in an offense should consider all quantities stemming from a defendant’s ‘relevant conduct.’”). 19 Blackmon argues that we should not incorporate relevant conduct in this context because it is not explicitly listed in § 2S1.1(a)(1). That subsection explicitly references the relevant conduct Guideline, § 1B1.3(a)(1)(A), to make a defendant “accountable for the underlying offense,” but the text does not include a reference to § 1B1.3(a)(2). Subsection 1B1.3(a)(2) addresses the application of relevant conduct to determine the offense level when multiple counts are grouped under Guidelines § 3D1.2(d), as is the circumstance here. Essentially, Blackmon is making a textual argument based on expressio unius est exclusio alterius (to say one is to exclude the rest), that the express mention of one part of the relevant conduct Guideline in § 2S1.1(a)(1) of the money laundering Guideline excludes all others. The Fifth Circuit Court dismissed a similar argument in Charon, 442 F.3d 881, which provides a roadmap for our analysis. Like Blackmon, Charon was caught in a sting transaction involving the distribution of cocaine. He pled guilty to two counts—one count of cocaine distribution related to the sting transaction and one count of money laundering related to the purchase of property from drug proceeds one year prior to the sting transaction. Id. at 884. The Court grouped the two counts under Guidelines §§ 3D1.1 and 3D1.2(d), and, as the grouping rules require under § 3D1.3(b), used the money laundering offense to calculate his base offense level because it produced the higher offense level. Id. at 884, 888. It concluded that Charon was a direct money launderer 20 under § 2S1.1(a)(1), and that the offense underlying his money laundering was cocaine distribution. Id. at 888. Charon asserted that the calculation of his money laundering base offense level should be based only on the drugs directly connected to the money laundering offense and not expanded to any other drug dealing as relevant conduct. Id. at 886. In making this claim, he relied on a textual argument similar to Blackmon’s—“that the Sentencing Commission did not direct the courts to use relevant conduct” in the money laundering Guideline, § 2S1.1(a)(1). Id. at 886, 888. In rejecting Charon’s argument, the Court stated that because his two counts were grouped under § 3D1.2(d), incorporating “relevant conduct is inherent in the grouping rules.” Id. at 888. Thus, it concluded that relevant conduct should be included in the “underlying offense.” Id. (quoting U.S.S.G. § 1B1.3(a)(2) (Relevant Conduct) (“‘[S]olely with respect to offenses of a character for which § 3D1.2(d) would require grouping of multiple counts [as here], all acts and omissions . . . that were part of the same course of conduct or common scheme or plan as the offense of conviction’ shall be used in determining the base offense level.”)). Because Charon was involved in an overarching drug-dealing business and the drug transaction that formed the basis for the money laundering count was a small part of that common scheme, the Court held that the sentencing judge appropriately considered all relevant conduct in calculating the drug weight for purposes of setting the money laundering base offense level. Id. 888–89. 21 As Blackmon argues, the text of § 2S1.1(a)(1) does not reference the application of relevant conduct in this type of situation, nor does the Sentencing Commission in its commentary explicitly direct that a court apply it. We agree with the Charon court, however, that nothing in § 2S1.1, its sentencing commentary, or any other pertinent Guideline, indicates that the sentencing judge should apply the grouping rules under § 3D1.2 differently in the context of § 2S1.1(a)(1). See id. at 888 (stating that the “analysis under § 3D1.2(d) necessarily takes into account the ‘relevant conduct’ provisions of the Guidelines, and § 2S1.1(a)(1) does not require the court to do anything differently under that section”); United States v. Rudolph, 137 F.3d 173, 176 (3d Cir. 1998) (explaining that two uncharged bribes qualify as relevant conduct because they would have been grouped under § 3D1.2(d) with the charged offense, and relevant conduct under § 1B1.3(a)(2) includes “all acts . . . that were part of the same course of conduct or common scheme or plan as the offense of conviction”). Relevant conduct is an “important feature of the [G]uidelines,” and we know no reason to depart here from the standard practice. See Joseph E. Kennedy, Making the Crime Fit the Punishment, 51 Emory L.J. 753, 809 n.239 (2002) (citing William W. Wilkins, Jr. & John R. Steer, Relevant Conduct: The Cornerstone of the Federal Sentencing Guidelines, 41 S.C. L. Rev. 495 (1990)). The “mixing and matching of different guideline provisions” that Blackmon protests is precisely what the Guidelines require a sentencing judge to do in using the base offense level of the underlying offense to calculate a suggested 22 sentencing range for money laundering. As we stated earlier, we also agree with our First Circuit colleagues in CruzandoLaureano, 440 F.3d at 48, that perhaps the best way to think of this complex “mixing” of Guidelines provisions is to identify the “underlying offense” under § 2S1.1(a)(1), and then treat it as a stand-alone crime for purposes of calculating the base offense level. After that calculation has been set, the sentencing judge should return to the money laundering Guideline and add any specific offense characteristics under § 2S1.1(b). Accordingly, the District Court properly included relevant conduct in the “underlying offense.” Because relevant conduct can be incorporated into the “underlying offense” under Guidelines § 2S1.1(a)(1), we consider whether the cocaine conspiracy is relevant conduct to the sting transaction. To qualify as relevant, and therefore attributable to a defendant for sentencing purposes under § 1B1.3(a)(2), three conditions must be met: (1) it must be the type of conduct described in § 1B1.3(a)(1)(A) and (B) (“all acts and omissions committed . . . by the defendant”); (2) grouping would be appropriate under § 3D1.2(d); and (3) it must have been “part of the same course of conduct or common scheme or plan” under § 1B1.3(a)(2). See United States v. Wilson, 106 F.3d 1140, 1144 (3d Cir. 1997); United States v. Taylor, 97 F.3d 1360, 1363 (10th Cir. 1996). Parts one and two are clearly met. Blackmon pled guilty to the charged cocaine conspiracy and the PSR grouped the conspiracy and money laundering counts, which Blackmon does not appeal. 23 Part three requires some discussion. Under § 1B1.3(a)(2), relevant conduct for drug offenses includes “not only all controlled substances involved ‘during the commission of the offense of conviction,’ but also those substances involved as ‘part of the same course of conduct or common scheme or plan as the offense of conviction.’” United States v. Boone, 279 F.3d 163, 178 (3d Cir. 2002) (quoting U.S.S.G. § 1B1.3(a)(2)). Application Note 9 of § 1B1.3 describes what comprises a “common scheme or plan” or the “same course of conduct” for relevant conduct. Id. App. Note 9(A)–(B). Subpart (A) describes a “common scheme or plan” as being “substantially connected” by at least one common factor, including common accomplices, common purpose, or similar modus operandi. Id. Subpart (B) describes the “same course of conduct” as “sufficiently connected or related to each other,” and involves factors such as the degree of similarity in offenses, the regularity or number or repetitions, and the time interval between offenses. Id. In this case, there is no question that the cocaine distribution (which was part of the sting transaction) and the overarching cocaine conspiracy involved a common scheme or plan. Notwithstanding the five-month lag between the August 2006 sting transaction and Williams’ March 2006 arrest in Philadelphia, the former involved common accomplices and similar methods of operating (i.e., modus operandi). The Government points out that “the defendant’s one-kilogram shipment in the sting transaction involved the exact same pattern of Federal Express shipments, the same would-be customer 24 [Williams], the same $15,000 price per kilogram, and the same geographic scope as the earlier cocaine conspiracy.” Thus, we agree with the District Court’s finding that the sting transaction was connected to the drug conspiracy for purposes of calculating the Guidelines range.