Court Opinion

ID: 1027751
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:29:05.675502+00
Date Added: 2024-06-11T12:39:16.468034
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                            No. 07-4146

UNITED STATES OF AMERICA,

               Plaintiff – Appellee,

          v.

DAVID L. HOWARD,

               Defendant – Appellant.

                            No. 07-4147

UNITED STATES OF AMERICA,

               Plaintiff – Appellee,

          v.

NICHOLAS RAGIN,

               Defendant – Appellant.

                            No. 07-4168

UNITED STATES OF AMERICA,

               Plaintiff – Appellee,
           v.

TRACY HOWARD,

                Defendant – Appellant.

Appeals from the United States District Court for the Western
District of North Carolina, at Charlotte.   Robert J. Conrad,
Jr., Chief District Judge. (3:04-cr-00271)

Argued:   December 5, 2008               Decided:   January 29, 2009

Before TRAXLER and AGEE, Circuit Judges, and Rebecca Beach
SMITH, United States District Judge for the Eastern District of
Virginia, sitting by designation.

Affirmed in part, vacated in part,       and   remanded   in   part   by
unpublished per curiam opinion.

ARGUED: Ann Loraine Hester, FEDERAL DEFENDERS OF WESTERN NORTH
CAROLINA, INC., Charlotte, North Carolina; Richard A. Culler,
CULLER & CULLER, Charlotte, North Carolina; Sue Genrich Berry,
BOWEN AND BERRY, P.L.L.C., Wilmington, North Carolina, for
Appellants.   Amy Elizabeth Ray, OFFICE OF THE UNITED STATES
ATTORNEY, Asheville, North Carolina, for Appellee.    ON BRIEF:
Claire J. Rauscher, Executive Director, Matthew R. Segal, Peter
S. Adolf, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC.,
Charlotte, North Carolina, for Appellant David L. Howard.
Gretchen C. F. Shappert, United States Attorney, Charlotte,
North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit

                                2
PER CURIAM:

        David       L.    Howard     (“David”),        Tracy      Howard    (“Tracy”),          and

Nicholas Ragin (“Ragin”) (collectively “the Defendants”) appeal

their    convictions           and   sentences        on    various    charges         primarily

related        to     prostitution        and    illegal       drug       sales.       (JA    65).

Relevant to this appeal for all the Defendants are convictions

for conspiracy to promote prostitution in violation of 18 U.S.C.

§§    2422,     2423,       1952     (2008),     (JA       66-68),    and    conspiracy          to

possess    with          intent    to    distribute        more    than     fifty      grams     of

cocaine base in violation of 21 U.S.C. § 846. (JA 70).                                       David

and     Tracy        were    also       convicted      for     conspiracy         to     launder

prostitution proceeds in violation of 18 U.S.C. § 1956. (JA 69).

        David contends that he was deprived of his Fifth and Sixth

Amendment rights to present a defense and that he was sentenced

based on an incorrect advisory guideline range.                                Tracy argues

that     the        district      court    erroneously         denied       his     motion      to

suppress certain evidence.                 David and Tracy jointly assert that

the    district          court    gave    incorrect        jury    instructions         for    the

money    laundering          count.        The       Defendants      collectively            appeal

their sentences, arguing that the district court gave incorrect

jury instructions and that the sentences violate their Fifth and

Sixth Amendment rights.                   For the following reasons, we affirm

the judgment of the district court in part, vacate in part, and

remand as to David for resentencing.

                                                 3
                          I. Tracy’s Motion to Suppress

        In reviewing a denial of a motion to suppress, this Court

reviews the district court’s factual findings for clear error

and its legal conclusions de novo. United States v. Johnson, 114

F.3d 435, 439 (4th Cir. 1997).

                                   A. Relevant Facts

      In       September        2004,      Vice        Detective       M.J.       Grimsley

(“Grimsley”) received information from David, who was acting as

a   confidential         informant,     that      Tracy    was   selling      drugs      and

prostituting       underage       girls.         On    September    16,    2004,    David

informed Grimsley that Tracy had rented a hotel room and was

staying     in     the     room    with      his       girlfriend,     Keshia       Burris

(“Burris”) who was listed as a guest at the hotel.                            David also

reported that Tracy and Burris had a fourteen year old girl in

the room.        Grimsley was unable to confirm whether the alleged

minor    was     staying    in    the   room      but     determined      there    was   an

outstanding warrant for Tracy’s arrest.

      Instead of arresting Tracy in the hotel room, detectives

waited until he left the room and drove a few blocks away from

the   hotel      where    they    conducted        a   traffic     stop.      (JA   129).

During the stop, Grimsley questioned Tracy about his activities

at the hotel, including whether he kept a minor there or had any

instrumentalities          of   crime   in     his     room.     Grimsley     asked      for

                                             4
Tracy’s consent to search the room and Tracy responded that he

“would consent to [Grimsley’s] searching for a body” but “he did

not   want   [Grimsley]     poking   around”       because     “he   had   a   little

money” in the room. (JA 132).                 Tracy was then arrested on the

outstanding       warrant   and   taken       to   the   local    law   enforcement

center for questioning.

        Officers then approached Burris at the hotel and asked her

permission to enter and search the hotel room.                    She consented to

the search and opened the door with her key.                     Upon entering the

hotel room, officers did not see a minor or any other person,

but   drug    paraphernalia,      including        packaging      for   cocaine,    a

scale, a razor blade, and a bag of crack cocaine were in plain

view.      Upon    searching   the   room      further,    officers     found   more

crack cocaine, money, and a pistol hidden at various places.

        Tracy filed a motion to suppress the evidence found in the

hotel room as well as certain statements he made to police in an

interview after his arrest.           He contended that the hotel room

search was unlawful because he did not give his consent.                           The

district court denied the motion.

                                  B. Analysis

      Tracy avers that Burris’s consent to a search of the hotel

room was not sufficient to overcome his express refusal to give

consent for a search.          In support of his position, Tracy cites

                                          5
the Supreme Court’s holding in Georgia v. Randolph, 547 U.S. 103

(2006),      which    stated      that       a    “physically          present       inhabitant’s

express refusal of consent to a police search is dispositive as

to him, regardless of the consent of a fellow occupant.” Id. at

122-23.       In that case, the defendant unequivocally refused to

consent to a warrantless police search. Id. at 107.                                      His wife

subsequently         gave    police      permission          to    search       their     marital

residence.      Id.         The   Supreme         Court    held        that    the    search   was

unreasonable and invalid as to the husband. Id. at 120.

       Tracy argues that Randolph applies here because he only

gave       limited    consent     to     a       search,     that       is,    to     verify   the

fourteen       year     old       minor          was   not        in     the     hotel     room. 1

Consequently, Tracy contends the police officers breached the

rule in Randolph, because they conducted a full search which was

beyond the limits of his consent.                      The Government responds that

Randolph does not apply because Tracy was not physically present

at the hotel when Burris consented to a full search of the room.

       1
       During the hearing on Tracy’s motion, the district court
made a factual finding that Grimsley’s testimony that Tracy gave
consent to the police officers to search his hotel room for “a
body” was credible. The court did not credit Tracy’s testimony
that he did not consent to even a limited search. This finding
was not clearly erroneous and will not be disturbed by this
Court.   United States v. Depew, 932 F.2d 324, 327 (4th Cir.
1991).

                                                  6
       It is not necessary for us to reach the Randolph question

because, under the facts of this case, the inevitable discovery

rule applies.           “[W]here it appears that evidence ‘inevitably

would    have    been    discovered      by       lawful    means,’       the   deterrence

rationale of the exclusionary rule has ‘so little basis’ that

the rule should not be applied.” United States v. Whitehorn, 813

F.2d 646, 650 (4th Cir. 1987) (quoting Nix v. Williams, 467 U.S.

431, 444 (1984)).

       The officers who entered Tracy’s hotel room, on the basis

of the limited consent to search the room for a body, discovered

the    drug    paraphernalia      in     plain      view.         Upon    observing     this

paraphernalia      in    plain     view,      officers       inevitably         would    have

arrested Burris and Tracy.                Incident to that arrest, officers

would have searched the surrounding area.                         Police may conduct a

search of the area “immediately adjoining the place of arrest

from which an attack could be immediately launched.” Maryland v.

Buie, 494 U.S. 325, 334 (1990).                    The district court found that

any    items    seized    that    were    not      in     plain    view    “were      readily

accessible by any inhabitant of that room.” (JA 261).                                   Thus,

while conducting a search incident to arrest, officers would

have    inevitably       discovered      the       other     incriminating           evidence

which was not in plain view.

       Accordingly,      the     district         court    did    not    err    in    denying

Tracy’s motion to suppress.

                                              7
                  II. David’s Right to Present a Defense

      This      Court   reviews      the     trial     court’s    determination    of

whether a defendant’s constitutional right to a fair trial has

been violated de novo. See United States v. Ali, 528 F.3d 210,

232 (4th Cir. 2008) (reviewing constitutional claims de novo).

Evidentiary       rulings        generally       are   reviewed     for   abuse    of

discretion. United States v. Queen, 132 F.3d 991, 995 (4th Cir.

1997).

                                  A. Relevant Facts

      The government informed David’s counsel before trial that

it possessed evidence that he had cooperated with them against

his co-conspirators prior to his arrest.                   In a taped interview,

David     gave    the     officers    information        about    Tracy’s    use   of

underage girls, and told officers he was not involved in the

prostitution of underage girls.                  He gave the officers the names

of the girls Tracy was using and said he would do his best to

help the officers find the runaway girls.

      The district court initially refused to allow into evidence

testimony about the information David had provided to police

citing Bruton v. United States, 391 U.S. 123 (1968).                         Counsel

for     David    sought     to    elicit     testimony     from    Officer    Decker

(“Decker”) about specific statements David made while acting as

an informant.       The district court excluded this testimony based

                                             8
on Bruton, although Decker was permitted to testify generically

that David had provided information about the case and Tracy’s

hotel location.          The court explained that, while David could

establish that he acted as an informant, more specific testimony

would    not   only   violate      the    hearsay    rule,    but      also     create   a

danger of unfair prejudice and confusion under Federal Rule of

Evidence 403.

     David testified in his own defense in an attempt to cure

the Bruton issue.           However, the government objected on hearsay

grounds when David sought to testify about specific statements

he had made to the police.               The court sustained the objection,

but ruled in the alternative under Rule 403 of the Federal Rules

of   Evidence      and   found     that     the     evidentiary         value    of    the

statements would be de minimis, because David’s motivation for

acting as an informant was suspect.                 Ten days into trial, David

filed a motion to admit “exculpatory impeachment evidence,” to

call government counsel as a witness, and/or for severance of

his trial from that of the other defendants.

                                    B. Analysis

     In Bruton, the Supreme Court held that the confrontation

clause    is     violated    by   the    introduction        of    a    non-testifying

defendant’s       statement       that     contains    incriminating            evidence

against    the    co-defendant.      391    U.S.    124.      As       there    were   co-

                                           9
defendants      in   this     case,    any    testimony      by     Decker       as       to   the

incriminating        statements       David    made    about      Tracy’s         activities

while he was acting as an informant was barred under Bruton.

    Although         David    eventually       did    testify       in    an     attempt       to

remove   the    Bruton       barrier,    the      district    court       held       that      the

testimony      nevertheless       remained        inadmissible.                The    district

court determined that, under Federal Rule of Evidence 403, the

statements were unduly prejudicial and potentially confusing to

the jury because they were “only offered to counter one object

of a multi-object conspiracy count which itself is but one of 17

counts   against       David    Howard.”       (JA    2703).         Furthermore,              the

proposed testimony’s probative value would be de minimis, as it

was just as likely that David cooperated with police for reasons

other    than    his     lack     of    involvement          with        the     conspiracy,

including bad blood between the brothers and in an attempt to

minimize his culpability.               We hold the district court did not

abuse its discretion in making these determinations.

     Alternatively, David argues that his requests for severance

should    have        been      granted.             However,        barring           special

circumstances,        “defendants       indicted      together       should          be    tried

together for the sake of judicial economy.”                          United States v.

Rusher, 966 F.2d 868, 877 (4th Cir. 1992).                               David made his

request for severance after nearly two weeks of trial.                                         The

district court determined that it would be unduly burdensome to

                                             10
force vulnerable witnesses to again go through the trauma of

testifying. Further, the district court found severance of the

defendants at such a late date would impair the efficiency and

fairness of the judicial system.                    The court did not abuse its

discretion in refusing to sever David’s trial from that of the

other defendants.

                         III. Jury Instructions and Collins

        Because    the    Defendants         did    not   object    to   the     district

court’s jury instruction, this Court reviews for plain error.

United States v. Hastings, 134 F.3d 235, 239 (4th Cir. 1998).

If plain error is shown the Court may correct the error if it

“seriously        affect[s]       the        fairness,     integrity        or     public

reputation of judicial proceedings.” Id. (quoting United States

v. Olano, 507 U.S. 725, 732 (1993)).

                               A. Relevant Facts

     The      Defendants    were    each       charged     with    and   convicted      of

conspiring to possess with intent to distribute more than fifty

grams    of   cocaine     base.     While          instructing     the   jury    on   this

count,     the    court    stated       in    relevant     part:     “you   must      then

determine the quantity of cocaine base involved. You will be

provided with a special verdict form that specifically addresses

the drug and the quantity to be considered.” (JA 3702).                               The

                                              11
relevant portion of the special verdict form for each individual

defendant    provided        this    inquiry         for   the    jury     to    answer:    “if

guilty,   was       more    than    50    grams       of   a     mixture    and       substance

containing      a    detectable          amount      of    cocaine       base        reasonably

foreseeable to [individual defendant]?” (JA 3756, 3761, 3764).

                                         B. Analysis

       The Defendants argue that the jury instructions given on

the drug conspiracy count violate this Court’s holding in United

States v. Collins, 415 F.3d 304 (4th Cir. 2005).                                 They contend

the    district      court     erred       by     not      charging        the       jury   with

determining     the        exact    amount      of    drugs       attributable         to   each

individual defendant, rather than to the conspiracy as a whole.

       The issue in Collins was whether “an individual defendant .

. . [should] be sentenced . . . by considering the amount of

narcotics distributed by the entire conspiracy? Or should that

defendant’s sentence be more individualized, subjecting him to

punishment    only     for     distribution           of    the    amount       of    narcotics

attributable to him?”               Id. at 312.            This Court held that “the

most    reasonable          interpretation           of     the     relevant          statutory

provisions requires a sentencing court to assess the quantity of

narcotics     attributable          to    each       coconspirator.”            Id.    (quoting

United States v. Irvin, 2 F.3d 72, 77 (4th Cir. 1993)).                                     This

Court held that the district court must instruct the jury to

                                             12
“determine          what    amount       of    cocaine    base          was    attributable       to

Collins using Pinkerton principles.” 2 Id. at 314.                                  Thus, we must

determine whether the court properly instructed the jury to make

an     individualized          finding          of    reasonably              foreseeable       drug

quantities as to each of the Defendants. See United States v.

Brooks, 524 F.3d 549, 553 n.5 (4th Cir. 2008).

        In     this    case,       the     court’s     bench        instructions          did    not

specifically          instruct       the      jury    that    it        must    find      the   drug

amounts attributable to each individual defendant.                                   However, the

special verdict form, referred to and incorporated by the jury

instructions, did specifically require the jury to find whether

more        than    fifty    grams       of     the   cocaine           base    was    reasonably

foreseeable           to    each     defendant.              We     believe         the    Collins

requirement is satisfied in this case by the special verdict

form.

       The Ninth Circuit has held that “[v]erdict forms are, in

essence, instructions to the jury.” United States v. Reed, 147

F.3d        1178,    1180    (9th     Cir.       1998).           The    Ninth       Circuit    was

“unwilling to conclude that the district court committed plain

error        in     omitting   this           information         from        the   formal      jury

        2
       “Pinkerton principles” refers to the concept that a member
of a conspiracy is guilty of his own overt acts, as well as acts
by coconspirators that are reasonably foreseeable and a natural
consequence of the unlawful agreement. Pinkerton v. United
States, 328 U.S. 640, 646-48 (1946).

                                                 13
instructions” when the information was included in the special

verdict form.          United States v. Alghazouli, 517 F.3d 1179, 1189

(9th Cir. 2008).          The Second Circuit also concluded that “[t]he

court’s special verdict questions must be read in conjunction

with the judge’s charge to the jury.” Vichare v. AMBAC, Inc.,

106 F.3d 457, 466 (2d Cir. 1996).                    The First Circuit has stated

that    “[w]e    examine      the    court’s       instructions     to   the       jury   and

wording on the verdict form as a whole to determine whether the

issues were fairly presented to the jury.” Sheek v. Asia Badger,

Inc.,    235     F.3d    687,       699    (1st     Cir.   2000).        As    a    general

principle, “we must assume that the jury understood and followed

the court’s instructions.” United States v. Udeozor, 515 F.3d

260, 271 (4th Cir. 2008) (quoting United States v. Hedgepeth,

434    F.3d     609,    614   n.4     (3d    Cir.     2006)   (internal        quotations

omitted)).            Based     on    these        principles,      taking     the        jury

instructions and the special verdict form as a whole, it is

reasonable       to    conclude      the    jury     understood      that     it    was    to

determine the amounts of cocaine base reasonably foreseeable to

each individual defendant in the conspiracy.

       The jury ultimately received the message that drug amounts

must be determined for each individual defendant.                           Further, the

evidence that the quantity was attributable to each individual

“was overwhelming and essentially uncontroverted,” so the error,

if any existed, would not rise to the level of plain error.

                                              14
United   States     v.   Foster,        507    F.3d     233,   252   (4th     Cir.   2007)

(stating “that disturbing [the defendant’s] sentence on the drug

conspiracy    count      .   .    .   would    seriously       affect   the    fairness,

integrity,    and    public       reputation       of    judicial       proceedings”).

Accordingly, we find no error, much less plain error, in the

district court’s jury instructions.

                                 IV. David’s Sentence

      This Court reviews sentences for reasonableness, applying

an   abuse   of   discretion          standard     of   review.      United    States   v.

Pauley, 511 F.3d 468, 473 (4th Cir. 2007).                      The district court’s

factual determinations as to a defendant’s role in an offense

are reviewed under the clearly erroneous standard. United States

v. Hyppolite, 65 F.3d 1151, 1159 (4th Cir. 1995).

                                  A. Relevant Facts

      David’s     Presentence           Investigation          Report    (“PSR”),       as

amended, calculated the base offense level for violating the

money laundering statute by using the drug conspiracy as the

underlying offense from which the laundered funds were derived.

This produced a base offense level of 36, based on 612 grams of

cocaine base.         The PSR then added one level for the use of

underage individuals in the commission of the crime, pursuant to

                                              15
§ 2D1.2(a)(2), and two more levels for possession of a firearm,

pursuant to        § 2D1.1(b)(1), resulting in a total base offense

level of 39.        The PSR then added two more levels because David

was convicted of violating 18 U.S.C. § 1956.                        Lastly, the PSR

added three levels for David’s aggravating role as a “manager or

supervisor” in the offense pursuant to § 3B1.1, resulting in a

level of 44, which exceeds the maximum offense level of 43.

David’s final criminal history category was category V, which

resulted in a guideline range of life imprisonment.

     David    objected       on    Sixth     Amendment     grounds        to    any    drug

amount attribution beyond the fifty grams found by the jury as

part of its verdict.            He also objected to using the drug offense

as the underlying offense on the money laundering charge and to

the “manager or supervisor” enhancement.                         The district court

rejected both objections and found a quantity of “more than 500

grams but less than 1.5 kilograms” of drugs was attributable to

David.      Further,      the     court    found    that   he     was   a      manager    or

supervisor of the money laundering operation within the meaning

of § 3B1.1.        The district court determined the PSR calculation

of   the    life    imprisonment          guideline      range    was       correct      and

sentenced David to life in prison.

     David contends that the district court’s calculation of his

offense    level    was    erroneous       for     two   reasons.         First,      David

argues     that    the    court    erred    by     using   the     drug      conspiracy,

                                            16
instead     of     the   prostitution        conspiracy,        as   the    underlying

offense     for    calculating      the    money       laundering    offense       level.

David next argues that the court erred by enhancing that offense

level      by    three   levels     under        the    “manager     or     supervisor”

provision of § 3B1.1.

     B. The Underlying Offense to the Money Laundering Charge

        To determine the base offense level for a charge of money

laundering, the Guidelines direct courts to use “[t]he offense

level for the underlying offense from which the laundered funds

were derived . . . .”             § 2S1.1.       Application Note 2(A) provides

“[i}n cases in which . . . there is more than one underlying

offense, the offense level for the underlying offense is to be

determined under the procedures set forth in Application Note 3

of   the    Commentary      to    §1B1.5.”         §    2S1.1   cmt.      2(A).      This

commentary       directs    the    court    to    use    “the   most      serious    such

offense.”        § 1B1.5 cmt. 3.      In the case at bar, the most serious

offense is the drug charge, not the prostitution charge.                            David

argues that using the drug charge as the underlying offense was

error because the Government did not prove that any laundered

funds    were     derived    from    selling       drugs,    and     that    the    court

consistently stated that the origin of the laundered funds was

prostitution.

                                           17
        Although the court did refer to the prostitution ring as

the origin of the laundered funds, this does not bar the court

from using the drug conspiracy as the underlying offense for the

laundering      charge.        Courts    are       to    consider       the      Guidelines’

language,      and    the   relevant     conduct         provision,        broadly.        The

relevant       conduct      provision,       §    1B1.3,        is    to    be    construed

liberally,      including      applicable         conduct       not     charged     in    the

indictment. See United States v. Asch, 207 F.3d 1238, 1244 (10th

Cir. 2000); United States v. Behr, 93 F.3d 764, 765 (11th Cir.

1996); United States v. Silkowski, 32 F.3d 682, 688 (2d Cir.

1994); United States v. Davern, 970 F.2d 1490, 1494 (6th Cir.

1992).     Nonetheless, the drug conspiracy charge was incorporated

by reference at the first paragraph of the indictment.                                   Thus,

David    was    on    notice   that    the       drug    conspiracy        was   applicable

throughout to all criminal conduct charged in the indictment.

        Moreover, there is sufficient evidence that the receipts

from    the    prostitution      services         and     the    sale      of    drugs    were

commingled.          The record reflects that the drug and prostitution

rings    were    inextricably      linked.              Testimony     established         that

money received from the sale of drugs helped pay rent, bail, and

purchases of clothes, jewelry, and condoms for the prostitutes.

Moreover, the prostitutes were also directly involved in the

sale of drugs.         Burris testified that she and another prostitute

would help bag crack for Tracy if he was “in a hurry or he

                                             18
didn’t feel like doing it.” (JA 2823).                       Burris testified that

she    did    this   at   least    twice    a   week.         The    prostitutes       also

delivered the drugs to the buyers.                     Burris testified that she

would go to Little Mexico to “drop off [crack] for D or go drop

something off to David” about three times a week. (JA 2836-37).

Clearly some of the money David received from selling drugs was

used    to    purchase     additional      drugs      or    in     furtherance    of   the

expenses of the prostitution ring.                 Because the prostitution and

drug   rings     were     so   intertwined      and    the       laundered   funds     were

derived from both, it was appropriate to use the drug offense as

the base offense in calculating the guideline range on the money

laundering charge.

                C. David’s Role as a Manager or Supervisor

       David’s offense level was increased by three levels because

the district court determined that he played an aggravating role

as a “manager or supervisor” of the money laundering operation.

Section       3B1.1(b),    the    guideline      provision         applied   to    David,

provides that “[i]f 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.”             § 3B1.1(b).         Chapter Three adjustments

are “determined based on the offense covered by this guideline

(i.e., the laundering of criminally derived funds) and not on

                                           19
the   underlying         offense       from         which       the       laundered         funds           were

derived.”    §     2S1.1        cmt.      2.         David          argues      that     the      district

court’s finding that he was a manager or supervisor of the money

laundering scheme was erroneous. We agree.

      David contends that he was not sufficiently involved in the

scheme to be characterized as a “manager or supervisor.”                                                While

the Guidelines do not define the term “manager,” this Court has

utilized    the       dictionary          definition:               “a   person        whose      work        or

profession       is      the     management              of     a     specified          thing         (as     a

business,    an       institution,             or    a    particular            phase       or    activity

within a business or institution).” United States v. Chambers,

985 F.2d 1263, 1268 (4th Cir. 1993) (quoting Webster’s Third New

International         Dictionary          1372       (1986)).             The     evidence         in        the

record     fails        to     support          a     finding            that    David           met        this

description as to the money laundering scheme itself.

      The district court found that David “created the business,”

(referring to his prostitution business), that his “[c]ell phone

number was used as a number for the business,” and that “he

drove [the prostitutes] to the johns that they were servicing,

collected    money           from    them,          [and]      split       the    money          with        his

mother.”     (JA        3992).         However,               these      facts      go      to     David’s

involvement        in     the       prostitution              ring,       and     not       to     David’s

involvement       in     the        money      laundering             scheme.            There         is     no

evidence    that        David       had     any      supervisory             role      in    the        money

                                                    20
laundering scheme, which was organized and carried out for the

most part by Ila.          Thus, the district court’s finding that David

was    a   manager    or   supervisor          of    the       money    laundering     scheme

constituted        procedural           error       rendering           David’s     sentence

unreasonable under Gall v. United States, 128 S. Ct. 586, 597-98

(2007).      See United States v. Diaz-Ibarra, 522 F.3d 343, 347

(4th Cir. 2008) (“An error in the calculation of the applicable

Guidelines        range     .     .     .     makes        a     sentence     procedurally

unreasonable.”).

       The   district      court’s          error    in        the    calculation    of    the

sentencing range in determining David’s sentence requires that

we vacate the district court’s judgment fixing David’s sentence,

and we remand the case to the district court for resentencing

without the Chapter Three adjustment.

                            V. Defendants’ Sentences

       The   Defendants         argue       that    their       sentences    were    imposed

pursuant     to   a   mandatory         crack      guideline         that   violated      their

Fifth and Sixth Amendment rights.                        They note that Kimbrough v.

United States, 552 U.S. ___, 128 S. Ct. 558, 169 L.Ed.2d 481

(2007), was decided after the sentencing hearing and that the

approach     by   the     district       court      in    sentencing        the   Defendants

contravenes Kimbrough.            The Supreme Court in Kimbrough held that

a     district    court     may       conclude       that       the    Guidelines’        crack

                                              21
cocaine/powder cocaine disparity yields a sentence greater than

necessary.        Kimbrough,        128   S.   Ct.     at   574.       This    holding

abrogated the precedent in this Circuit under United States v.

Eura, 440 F.3d 625 (4th Cir. 2006), which held that the district

court could not diverge from the advisory sentencing range under

the   Guidelines      by    substituting       its    own   crack    cocaine/powder

cocaine ratio.

      However, Kimbrough did not hold that the district court

must conclude that any sentences within the Guidelines involving

crack     cocaine    yields     a    sentence        “greater   than    necessary.”

Instead, Kimbrough permits a district court to sentence outside

the advisory sentencing range if the court deemed it appropriate

under the circumstances of that case.                  Here, the district court

clearly     was     not    sentencing     based       solely    on   the      advisory

sentencing range.          The district court specifically stated that a

sentence within the Guideline range in this case was sufficient,

but no greater than necessary, to accomplish the objectives set

forth in § 3553(a).         The court remarked

      [s]o the sentence imposed, although consistent with
      the advisory guideline range, is the sentence the
      Court would have imposed if the guidelines never
      existed.    If the Court had authority to sentence
      anywhere within the statutory maximum without respect
      to any limitation or guidelines or anything else, this
      is the sentence the Court would have imposed . . . And
      the Court concludes that that sentence is sufficient
      but not greater than necessary to meet the sentencing
      objectives of Section 3553(a).

                                          22
(JA 4035) (as to David).        As to Ragin, the court stated that

“the sentence of 360 months, though imposed with knowledge of

the severity of the sentence, is sufficient but not greater than

necessary to accomplish the goals of sentencing.” (JA 4116).              A

Kimbrough analysis does not affect the Defendants’ sentences,

because the sentencing approach taken by the district court was

not contrary to the ruling in that case.               The district court

appropriately determined sentences it felt were “sufficient but

not greater than necessary” and did not err in doing so.

       VI. Jury Instructions on the Money Laundering Count

     Count Twelve of the indictment charged David and Tracy with

conspiracy to violate the money laundering statute, 18 U.S.C. §

1956(h)    (2008).    The   court   instructed   the   jury   (in   relevant

part), that “you must find beyond a reasonable doubt . . . that

the funds or property involved in the financial transaction did,

in fact, represent the proceeds of specified unlawful activity,

in this case the proceeds of the use of interstate facilities to

promote prostitution.” (JA 3693-94).         The jury was to use the

“ordinary, everyday meaning” for the term “proceeds,” as the the

term was not explicitly defined by the district court in the

jury instructions.     Because the Defendants did not object to the

district    court’s   instruction,    this   Court     reviews   for   plain

                                     23
error. United States v. Hastings, 134 F.3d 235, 239 (4th Cir.

1998).

      David    and     Tracy    posit     that    the     common    definition     of

“proceeds” could be either “profits” or “receipts.”                       They argue

that the Supreme Court, in a case decided subsequent to their

opening brief, held that “proceeds” should be defined to mean

“profits” and not “receipts.”              Consequently, they contend that

the     Government     failed      to     prove    that      operation       of   the

prostitution ring resulted in any profits, as opposed to merely

receipts.       They     contend    all     of    the     money    earned    by   the

prostitutes was put back into the business in the form of new

clothes and room and board and therefore they had no profits and

could not be found guilty under Count Twelve as a matter of law.

      A plurality of the Court in United States v. Santos, 128 S.

Ct. 2020 (2008), held the term “proceeds” to mean “profits” and

stated that “a criminal who enters into a transaction paying the

expenses of his illegal activity cannot possibly violate the

money-laundering statute, because by definition profits consist

of what remains after expenses are paid.” Id. at 2027.                       However,

because Santos was a plurality opinion, the holding of the Court

for precedential purposes is the narrowest holding that garnered

five votes. Marks v. United States, 430 U.S. 188, 193 (1977).

Here,    Justice     Stevens’s     concurrence          provides    the     narrowest

holding.      Santos, 128 S. Ct. at 2031.                Justice Stevens writes

                                          24
that the “profits” definition of “proceeds” is limited to money

laundering cases involving a gambling operation like the one in

that case.        He explains that, “[i]n other applications of the

statute not involving such a perverse result [as in this case],

I   would      presume    that    the     legislative         history      summarized      by

Justice Alito [that “proceeds” means “receipts”] reflects the

intent of the enacting Congress.” Id. at 2034 n. 7.                                Justice

Stevens thus carves out an exception for gambling operations in

which    “proceeds”       means    “profits,”          although      the   rule    is    that

“proceeds” means “receipts.”

      Because Santos does not establish a binding precedent that

the term “proceeds” means “profits,” except regarding an illegal

gambling       charge,     we     are     bound       by    this     Court’s      precedent

establishing       that    “proceeds”          means       “receipts.”         See,     e.g.,

United    States    v.     Singh,       518    F.3d    236,    247    (4th     Cir.     2005)

(recognizing that funds used by prostitutes to pay the cost of a

hotel room for purpose of prostitution constituted “proceeds”);

United States v. Caplinger, 339 F.3d 226, 233 (4th Cir. 2003)

(holding that the element of use of unlawful proceeds can be

proven    by    circumstantial          evidence      that    the    defendant     applied

unlawful proceeds to promote and perpetuate his scheme); United

States v. Stewart, 256 F.3d 231, 250 (4th Cir. 2001) (affirming

a money-laundering conviction where proceeds from the sale of

drugs    were    used     to    further       the   drug     operation).        Thus,     the

                                               25
district court did not err in instructing the jury to use the

common dictionary definition of “proceeds.”

                              VII.

     For the foregoing reasons, the judgment of the district

court is affirmed in all respects except as to David’s sentence.

The judgment as to David’s sentence is vacated and his case

remanded for resentencing.

                                                 AFFIRMED IN PART,
                                                  VACATED IN PART,
                                              AND REMANDED IN PART

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