Court Opinion

ID: 9962039
Source: CourtListenerOpinion
Date Created: 2024-04-22 16:02:01.72173+00
Date Added: 2024-06-11T08:19:43.011321
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 22-3015
UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,
                                 v.

RANDY SHANE CRAFT,
                                               Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
                     Central District of Illinois.
           No. 2:19-cr-20027 — Michael M. Mihm, Judge.
                     ____________________

    ARGUED DECEMBER 1, 2023 — DECIDED APRIL 22, 2024
                ____________________

   Before WOOD, ST. EVE, and LEE, Circuit Judges.
    LEE, Circuit Judge. In October of 2019, Randall Craft
pleaded guilty to one count of conspiracy to distribute over
ﬁfty grams of methamphetamine in violation of 21 U.S.C.
§ 846, 21 U.S.C. § 841(a)(1), and 21 U.S.C. § 841(b)(1)(A). Craft
was sentenced to 150 months in prison followed by ﬁve years
of supervised release. When calculating the guidelines range,
the district court applied two sentencing enhancements. First,
it applied a two-level enhancement for maintaining a
2                                                  No. 22-3015

premises for the purpose of manufacturing or distributing a
controlled substance under § 2D1.1(b)(12) of the United States
Sentencing Guidelines. Second, it applied a two-level en-
hancement for Craft’s role as a manager or supervisor of the
scheme under § 3B1.1 of the Guidelines. Because the record
does not support the conclusion that Craft used his home for
the primary or principal purpose of manufacturing or distrib-
uting drugs, we conclude that the district court erred in ap-
plying the premises enhancement. On the other hand, given
Craft’s extensive role in the conspiracy, we agree with the dis-
trict court’s application of the two-level role enhancement.
Thus, we vacate Craft’s sentence and remand his case to the
district court for resentencing.
    I.    Background
    Craft and his girlfriend, Tracy Christian, lived together in
Balch Springs, Texas, a suburb of Dallas. In late 2015, Craft
met Frank Shaﬀer and started selling him methamphetamine
that Shaﬀer would transport to Illinois and sell. At ﬁrst, Craft
sold Shaﬀer two ounces of methamphetamine at a time, but
the quantity quickly increased to a half pound or full pound
per transaction. During this period, Shaﬀer was also in and
out of prison and house arrest. Thus, to carry on the opera-
tion, Shaﬀer enlisted others to help him obtain and transport
the drugs, including two individuals named Jacob Burns and
Austin Carey.
    In late May 2018, Shaﬀer was released on parole, and he
moved into Craft’s home in Balch Springs, where he lived
with Craft, Christian, and Craft’s son. While Shaﬀer lived
there, Craft supplied him with methamphetamine around
thirty times, and each time Shaﬀer would transport the drugs
to Illinois for distribution. Most of the time, Craft handed the
No. 22-3015                                                    3

drugs to Shaﬀer at a nearby gas station, but on several occa-
sions, Craft gave the drugs to Shaﬀer when they were both at
Craft’s house. Once Shaﬀer received the drugs from Craft, he
usually stored them at Craft’s house until he left for Illinois,
typically less than twenty-four hours later.
    After distributing the drugs in Illinois, Shaﬀer returned
the proceeds from the sales to Craft and Christian, either di-
rectly or via wire service. Craft paid the rent and utilities for
his home with the proceeds, then he split the remainder
evenly with Shaﬀer. Craft did not store his supply of drugs at
the house, nor did he regularly sell to customers from the
house.
    Shaﬀer left Craft’s house in October 2018 and spent a few
weeks in Illinois. While in Illinois, Shaﬀer was arrested for
possessing a loaded ﬁrearm and one ounce of methampheta-
mine. After waiving his Miranda rights, he admitted to the po-
lice that he was distributing drugs and that Craft was his sup-
plier. Burns and Carey also had been arrested in the preceding
months, and investigations following their arrests revealed to
law enforcement that Craft and Christian had been supplying
them methamphetamine as well.
    In April 2019, a grand jury indicted Craft and Christian on
one count of conspiracy to distribute over ﬁfty grams of meth-
amphetamine in violation of 21 U.S.C. § 846, 21 U.S.C.
§ 841(a)(1), and 21 U.S.C. § 841(b)(1)(A). Craft pleaded guilty
in October 2019 without a plea agreement. Shaﬀer, Burns, and
Carey were all indicted on the same charge, but in separate
cases.
  In anticipation of Craft’s sentencing hearing, the probation
oﬃcer issued a presentence report (PSR). The PSR placed
4                                                   No. 22-3015

Craft’s base oﬀense level at 32, to which it added a two-level
enhancement for maintaining a premises for the purpose of
distributing methamphetamine under U.S.S.G. § 2D1.1(b)(12)
and a four-level enhancement under U.S.S.G. § 3B1.1(a) for
Craft’s role in the oﬀense as an organizer or leader of a crimi-
nal activity involving ﬁve or more participants. After a three-
level reduction for acceptance of responsibility, Craft’s total
oﬀense level was 35. With a criminal history score of four, the
PSR recommended a guidelines range of 210 to 262 months of
imprisonment.
    Craft initially only objected to the application of the prem-
ises enhancement, but he added an objection to the organizer
or leader enhancement during his initial sentencing hearing.
The district court gave Craft an opportunity to ﬁle a written
objection regarding that enhancement. Meanwhile, the dis-
trict court heard evidence as to the premises enhancement,
and the government called Shaﬀer to testify about his involve-
ment with Craft and Craft’s role within the conspiracy.
    After this initial hearing, the parties briefed the applica-
tion of the leadership enhancement, then they reconvened
and resumed the sentencing hearing. At the hearing, the dis-
trict court adopted the factual ﬁndings of the PSR. Although
the court considered it a “very close question,” it overruled
Craft’s objection to the application of the premises enhance-
ment. In reaching this conclusion, the court credited the fact
that Craft had used the proceeds of the drug sales to pay for
his rent and utilities. The district court also noted that Craft
had no other income and that, on several occasions, Craft had
delivered methamphetamine to Shaﬀer at the house.
   As for the leadership enhancement, the district court
found that the record did not support the PSR’s
No. 22-3015                                                    5

recommendation to apply a four-level enhancement for
Craft’s role as an organizer or leader. Nonetheless, the court
found that the record supported a ﬁnding that Craft was a
manager or supervisor and applied a two-level enhancement
for Craft’s role in the oﬀense. To support this ﬁnding, the
court observed that Craft played a “critical role” in the con-
spiracy. The court further noted that Craft had supplied the
drugs to Shaﬀer and that Craft knew Shaﬀer would later sell
them.
   The district court’s ﬁndings placed Craft at an oﬀense level
of 33, which resulted in a guidelines range of 168 to 210
months of imprisonment. In the end, the district court sen-
tenced Craft to a below-guideline sentence of 150 months to
be followed by a ﬁve-year term of supervised release. Craft
appeals.
   II.        Analysis
    Craft raises two challenges to his sentence. First, he argues
that the district court erred when it applied a two-level prem-
ises enhancement under U.S.S.G. § 2D1.1(b)(12). Second,
Craft maintains that the district court erred by applying a
two-level enhancement for his role in the oﬀense under
U.S.S.G. § 3B1.1. We address each of Craft’s arguments in
turn.
         A.     Premises Enhancement
   Craft ﬁrst challenges the district court’s application of the
premises enhancement under U.S.S.G. § 2D1.1(b)(12). When
considering a challenge to U.S.S.G. § 2D1.1(b)(12)’s premises
enhancement, we review the district court’s application of the
enhancement de novo and its underlying factual ﬁndings for
6                                                     No. 22-3015

clear error. United States v. Flores-Olague, 717 F.3d 526, 530 (7th
Cir. 2013).
   The Guidelines provide for a two-level enhancement if
“the defendant maintained a premises for the purpose of
manufacturing or distributing a controlled substance.”
U.S.S.G. § 2D1.1(b)(12). The application notes to
§ 2D1.1(b)(12) provide that, for the enhancement to apply,
manufacturing or distributing drugs need not be the “sole
purpose” for which the premises was maintained. U.S.S.G.
§ 2D1.1 cmt. n.17. At the same time, manufacturing or distrib-
uting drugs must at least be “one of the defendant’s primary
or principal uses for the premises, rather than one of the de-
fendant’s incidental or collateral uses for the premises.” Id.
    The application notes further provide that, to determine
whether distributing a controlled substance was a primary
versus collateral use of the premises, sentencing courts should
ask “how frequently the premises was used by the defendant
for manufacturing or distributing a controlled substance and
how frequently the premises was used by the defendant for
lawful purposes.” Id. However, courts are not required to em-
ploy a “simple balancing test” that compares the frequency of
lawful and unlawful activities. United States v. Contreras, 874
F.3d 280, 284 (7th Cir. 2017). This is because “such a test would
immunize every family home that is also used for drug distri-
bution.” Id. (citing Flores-Olague, 717 F.3d at 533). Instead, the
sentencing court is to consider “both the frequency and sig-
niﬁcance of the illicit activities, including factors such as
quantities dealt, customer interactions, keeping ‘tools of the
trade’ and business records, and accepting payment.” Id.
(quoting Flores-Olague, 717 F.3d at 533).
No. 22-3015                                                    7

    As an initial matter, the government does not argue (nor
is there evidence in the record to suggest) that Craft ever man-
ufactured methamphetamine in the home. Thus, because the
Guideline requires a defendant to have “maintained a prem-
ises for the purpose of manufacturing or distributing a con-
trolled substance,” the district court’s application of the prem-
ises enhancement must rest on Craft’s use of the home to dis-
tribute methamphetamine. U.S.S.G. § 2D1.1(b)(12) (emphasis
added).
   Here, the record is insuﬃcient to support a ﬁnding that
Craft maintained the premises for the “primary or principal”
purpose of distributing controlled substances. The govern-
ment has presented no evidence that Craft received or stored
methamphetamine at his home for later distribution. And be-
sides the “several” occasions when Craft transferred the
methamphetamine to Shaﬀer at the home, there is no evi-
dence that Craft sold methamphetamine to anyone else at or
from the home. Nor did law enforcement oﬃcers discover any
other evidence in the home, such as drug traﬃcking para-
phernalia, that might otherwise indicate that Craft primarily
used the premises for drug distribution.
    We also ﬁnd it signiﬁcant that, besides the few occasions
when Craft handed the drugs to Shaﬀer when they were both
at the home, Craft most often transferred the drugs to Shaﬀer
at a local gas station. The fact that Craft went out of his way
to deliver the drugs to Shaﬀer away from his house (despite
the fact that they both lived there) strongly indicates that dis-
tributing drugs was not a “primary or principal” use of the
premises. And to the extent that Craft gave Shaﬀer the drugs
on only “several occasions” when they were both home, these
8                                                   No. 22-3015

transfers were merely incidental to Craft’s (and Shaﬀer’s) res-
idence there.
    Consider our recent decisions in this area. In Flores-Olague,
the defendant sold and stored drugs at his home on a daily
basis over a three-year period and did not attempt to demon-
strate to the court that there were any limitations on these ac-
tivities. 717 F.3d at 533. And, unlike the present case, “no
other locations for drug dealing” appeared in the record. Id.
Based on these facts, we found that application of the two-
point premises enhancement was “clearly warranted.” Id. We
similarly aﬃrmed the district court’s application of the prem-
ises enhancement in Contreras, 874 F.3d at 284. In that case, the
defendant’s activities were less frequent than in Flores-
Olague—rather than distributing drugs from the home on a
daily basis, the defendant distributed drugs at his home on
eight occasions, most occurring within a two-month period.
Id. Still, we found that other facts made up for the relative in-
frequency of the defendant’s sales from the home. For exam-
ple, the “government also presented evidence that drugs were
shipped to and stored at Contreras’s home, that Contreras ac-
cepted payment for drugs at his home, and that other code-
fendants met at Contreras’s home to settle a narcotics debt.”
Id. We also pointed to the large quantities dealt each time in
upholding the enhancement. Id.
    By contrast, the evidence that Craft maintained the home
for the primary or principal purpose of distributing drugs is
scant. Craft handed the drugs to Shaﬀer at the home as few as
three times over the ﬁve-month period Shaﬀer lived there—
even less frequently than the eight transactions in two months
in Contreras. And unlike in Contreras, here we lack other evi-
dence that might otherwise make up for the relative
No. 22-3015                                                     9

infrequency of the transactions. Craft did not ship drugs to his
home, nor did he personally store his supply there. And most
of his transactions with Shaﬀer occurred outside of his home
at a gas station. Unlike in Flores-Olague and Contreras, there is
no evidence that Craft used his home for the primary or prin-
cipal purpose of distributing drugs.
    Pressing its point, the government argues that the district
court properly applied the enhancement because Craft had no
other job and made his entire livelihood selling methamphet-
amine. It is true that, in the past, we have looked to whether a
defendant makes their livelihood selling drugs when deter-
mining whether the premises enhancement should apply. See,
e.g., United States v. Sanchez, 710 F.3d 724, 732 (7th Cir. 2013),
vacated on other grounds, 571 U.S. 801 (2013); Flores-Olague, 717
F.3d at 534; United States v. Winﬁeld, 846 F.3d 241, 243 (7th Cir.
2017); United States v. Hopper, 934 F.3d 740, 765 (7th Cir. 2019).
But, while this fact can move the needle somewhat by placing
a defendant’s home-centered drug traﬃcking activity in con-
text, we have never relied on it as the primary driver of the
premises enhancement.
    This issue ﬁrst came up in Sanchez, 710 F.3d at 731–32.
There, we pointed to evidence that the defendant “regularly
sold and stored drugs in his home” over a two-year period.
Id. at 731. Then, to evaluate whether the activities were signif-
icant or frequent enough to consider them a principal use of
the home, we noted that the defendant “was the largest
wholesaler in a conspiracy responsible for nearly $2.5 million
in drug traﬃcking” and that he “had no legitimate job and no
source of income beyond his drug sales.” Id. at 732. As a re-
sult, we concluded that the activities must have been signiﬁ-
cant, in part because of the sheer volume of sales and the
10                                                No. 22-3015

defendant’s complete reliance on drug sales for his livelihood.
And from this, we reasoned that the defendant’s distribution
must have been a principal use of the premises, thus warrant-
ing application of the enhancement.
    Our later cases have largely followed the same approach,
using a defendant’s reliance on drug sale proceeds as one of
many factors to suss out whether he had used his home for
the primary or principal purpose of distributing drugs. In
Winﬁeld, for example, the defendant sold drugs to a conﬁden-
tial informant at his apartment on four diﬀerent occasions
over a twelve-week period. 846 F.3d at 241. When law enforce-
ment oﬃcers searched his home pursuant to a warrant, they
found a signiﬁcant amount of cash, drug paraphernalia, her-
oin, and methamphetamine. Id. at 242. Later, Winﬁeld admit-
ted that he had ﬂushed any drugs he had down the toilet
when he realized that police oﬃcers were coming to search
his home. Id. It was against this backdrop that we observed
that Winﬁeld had made his livelihood selling drugs and, as a
result, that we thought it reasonable for the district court to
conclude that Winﬁeld “must have stored or sold additional
quantities of drugs at his apartment than the relatively mod-
est amounts recovered by police.” Id. at 243. Together, these
facts supported the conclusion that “Winﬁeld’s drug-related
uses for his apartment were not merely ‘incidental’ to his res-
idence there.” Id.; see also Flores-Olague, 717 F.3d at 533–34
(considering a defendant’s partial livelihood selling drugs
only to determine the “frequency and signiﬁcance of illicit ac-
tivities at the premises”).
    These opinions teach that whether a defendant makes his
livelihood selling drugs is not suﬃcient, by itself, to support
the application of the premises enhancement. After all, the
No. 22-3015                                                             11

fact that a defendant earns his entire livelihood selling drugs
does not necessarily mean he manufactures or sells those
drugs at his home. Any other conclusion would be divorced
from the text of the enhancement, which provides for a two-
level enhancement only if the premises is maintained for the
purpose of “manufacturing or distributing” a controlled sub-
stance. U.S.S.G. § 2D1.1(b)(12) (emphasis added).
    Here, the evidence does not leave us guessing as to
whether distribution from Craft’s home was signiﬁcant or fre-
quent. To the contrary, the evidence shows (and the govern-
ment does not dispute) that Craft’s distribution from the
home was limited in scope—he only transferred the drugs to
Shaﬀer there on “several” occasions, while he gave Shaﬀer
drugs outside the home on many more. And there is no evi-
dence that he sold drugs to anyone else from the home. In
these circumstances, Craft’s livelihood selling drugs cannot,
standing alone, serve as the basis for the district court’s appli-
cation of the premises enhancement. 1
    Finally, the government insists that Shaﬀer’s storage of the
drugs at the home for up to twenty-four hours before he left
for Illinois supports the application of the premises enhance-
ment. But we also see Shaﬀer’s ﬂeeting storage of the drugs
there as an “incidental” use of the premises—he only stored

    1 The district court also found it important that the proceeds of the

drug sales were used to pay the household expenses. But for the same rea-
sons just discussed, this evidence cannot by itself support the application
of the premises enhancement. A defendant might use the proceeds of his
drug sales to pay rent, but doing so does not suggest that drugs were man-
ufactured in or distributed from the home.
12                                                No. 22-3015

them there for less than twenty-four hours before he left for
Illinois and because he was living with Craft.
    In the end, Craft’s sales of drugs to Shaﬀer in his home
were limited to “several” occasions, while most of Craft’s
sales to Shaﬀer occurred outside of his home. Thus, the record
does not support a ﬁnding that Craft “maintained a premises
for the purpose of manufacturing or distributing a controlled
substance,” and the district court erred in applying the two-
level enhancement. U.S.S.G. § 2D1.1(b)(12).
      B.     Craft’s Role in the Oﬀense
    Craft next argues that the record does not support the ap-
plication of a two-level enhancement under U.S.S.G. § 3B1.1
for being a manager or supervisor in the drug operation.
When considering a challenge to an enhancement under
§ 3B1.1 of the Guidelines, we review de novo whether the fac-
tual ﬁndings of the district court adequately support the ap-
plication of the enhancement. United States v. House, 883 F.3d
720, 723 (7th Cir. 2018). We review the underlying factual
ﬁndings for clear error. Id.
    U.S.S.G. § 3B1.1 provides for sentencing enhancements
based on a defendant’s role in the oﬀense. If a crime involved
ﬁve or more participants or was “otherwise extensive,” a de-
fendant receives a four-level enhancement if he is an “organ-
izer or leader” of the scheme under § 3B1.1(a), and a three-
level enhancement if he is a “manager or supervisor” under
§ 3B1.1(b). If the defendant was an “organizer, leader, man-
ager, or supervisor” but the crime did not involve ﬁve or more
participants and is not “otherwise extensive,” a defendant re-
ceives a two-level enhancement under § 3B1.1(c).
No. 22-3015                                                    13

    Although the Guidelines do not expressly deﬁne manager
or supervisor, we have said that “a manager or supervisor
should be straightforwardly understood as simply someone
who helps manage or supervise a criminal scheme.” House,
883 F.3d at 724 (quoting United States v. Grigsby, 692 F.3d 778,
790 (7th Cir. 2012)). In other words, our primary goal is to
make a “commonsense judgment about the defendant’s rela-
tive culpability given his status in the criminal hierarchy.” Id.
(quoting United States v. Dade, 787 F.3d 1165, 1167 (7th Cir.
2015)).
    We think there is enough evidence in the record to support
application of the manager or supervisor enhancement here.
Several facts indicate that Craft managed or supervised others
in carrying out the operation and, therefore, is more culpable
than other members of the conspiracy. For example, once the
distributors sold the methamphetamine they received from
Craft, Craft managed the proﬁts, paid the household bills, and
split the proceeds evenly among himself and Shaﬀer. See
Grigsby, 692 F.3d at 791 (aﬃrming application of the manager
or supervisor enhancement where the defendant took cus-
tody of the proceeds and divided them among coconspira-
tors); see also House, 883 F.3d at 724 (same). Craft also enlisted
Shaﬀer and Burns to the conspiracy. See United States v. Watts,
535 F.3d 650, 660 (7th Cir. 2008) (upholding the application of
§ 3B1.1(c) because the defendant recruited his wife into a bank
fraud scheme). In addition, Carey reported to law enforce-
ment agents that Craft and Shaﬀer had closed-door meetings
to discuss their drug business, suggesting that Craft and Shaf-
fer were higher on the hierarchy relative to Carey and the oth-
ers. See United States v. Hawkins, 796 F.3d 843, 872 (8th Cir.
2015) (citing defendant’s participation in closed-door
14                                                   No. 22-3015

meetings as evidence supporting the district court’s applica-
tion of the manager or supervisor enhancement).
    Craft retorts that the enhancement should not apply be-
cause he did not direct Shaﬀer or anyone else where to sell
drugs. But the district court adopted the PSR’s factual ﬁnd-
ings without objection, and the PSR found that Craft directed
Christian, demonstrating that Craft had exercised at least
some level of control over other participants in the operation.
We have said that, “[t]o apply the enhancement, a court need
only ﬁnd that the defendant directed at least one other per-
son.” United States v. Beechler, 68 F.4th 358, 369 (7th Cir. 2023)
(citing United States v. Hernandez, 309 F.3d 458, 463 (7th Cir.
2002)).
   In any event, a defendant may still be eligible for the en-
hancement even without evidence that they controlled others.
See Dade, 787 F.3d at 1167 (stating that control is “just one
measure”). Even if we were to disregard the PSR’s ﬁnding
that Craft had directed Christian, we have other evidence suf-
ﬁcient to support a ﬁnding that Craft was a manager or super-
visor—namely, that Craft managed the proceeds, recruited
others to the conspiracy, and participated in closed-door
meetings without other members of the conspiracy.
    Finally, Craft insists that his role in the operation was lim-
ited to sourcing the methamphetamine, which he says indi-
cates he was not higher on the criminal hierarchy than other
members of the operation. There is no doubt that, under our
precedent, “[s]upplying drugs and negotiating the terms of
their sale do not by themselves justify a Section 3B1.1 in-
crease.” United States v. Weaver, 716 F.3d 439, 444 (7th Cir.
2013) (quoting United States v. Vargas, 16 F.3d 155, 160 (7th Cir.
1994)). But, as discussed, here we have additional evidence
No. 22-3015                                                              15

that Craft was higher on the criminal hierarchy compared to
the others. Our ﬁnding that Shaﬀer was a manager or super-
visor does not solely rest on Craft’s role in supplying the
drugs.
   Accordingly, we ﬁnd that the district court did not err in
applying the manager or supervisor enhancement to Craft’s
sentence. 2
    III.    Conclusion
   For the foregoing reasons, we VACATE the judgment of
the district court and REMAND for resentencing consistent
with this opinion.

    2 We note that the district court applied a two-level enhancement in-

stead of the three-level enhancement provided for in § 3B1.1(b) for man-
agers or supervisors of crimes that involve five or more participants. Since
the government did not file a cross-appeal, we do not reach this issue on
appeal. Greenlaw v. United States, 554 U.S. 237, 244–45 (2008).