7th Circuit Criminal Law Alert

Phone Tap Surveillance - Have Other Investigative Procedures Been Exhausted?

USA v. Victor Goodwin, et al., 06-3057.  A jury convicted Victor Goodwin, Leo Brown, Jr., Timothy Doerr, and Jermal Phillips of multiple counts of drug trafficking and other related offenses stemming from a multi-state conspiracy. Following their convictions, the four defendants filed a consolidated appeal challenging various aspects of their respective convictions and sentences. We affirm.

On April 29 and May 27, 2004, the district court authorized the electronic wire surveillance of two telephones used by Michael Hardiman and a second individual. During the course of the electronic telephone wire surveillance, law enforcement authorities intercepted numerous conversations involving the Appellants, which detailed their distribution of cocaine base and cocaine.

On appeal, the Appellants first collectively challenge the district court's orders of April 29, 2004, and May 27, 2004, that authorized and then re-authorized electronic telephone wire surveillance on certain members of the conspiracy.

Specifically, the Appellants argue that it was unnecessary for the government to use electronic telephone wire surveillance in its investigation of the conspiracy because the continued use of confidential informants would have been more than sufficient to expose the entirety of the criminal activity and enterprise.

This court reviews a district court's decision regarding the necessity of electronic telephone wire surveillance for abuse of discretion, "giving substantial deference to the determination of the issuing judge." United States v. Zambrana, 841 F.2d 1320, 1329-30 (7th Cir. 1988).

While probable cause is all that is needed for the government to obtain a search warrant, to obtain a warrant for electronic telephone wire surveillance under 18 U.S.C. § 2518(1)(c), the government must demonstrate a factual basis for its " 'statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous.' " Zambrana, 841 F.2d at 1329 (quoting 18 U.S.C. § 2518(1)(c)). "In this circuit, we will affirm a district court's finding that normal investigative procedures [were] unlikely to be successful . . . [as long as] there exist[ed] a factual predicate in the affidavit." Id. at 1330

Here, the government's original forty-two-page affidavit in support of its application, and its sixty-four-page affidavit in support of its re-application, reasonably explained why the continued use of confidential informants would not accomplish the goals of the investigation and why a new method of surveillance was necessary. The government's affidavits also stated that, while the government initially had success using confidential informants, that technique likely would yield limited future results because of the informants' reluctance to testify, their inability to identify suppliers within the organization outside of Evansville, their inability to identify all of the local distributors within the organization, and their lack of information concerning locations used by the organization to store drugs outside of Evansville. Finally, the govern-government's affidavits stated that information gleaned from the electronic telephone wire surveillance could be used to recruit future confidential informants who subsequently could be used instead of relying on future electronic surveillance.

Based upon the information contained in the government's affidavit-the validity of which the Appellants have not challenged-we find that the district court did not abuse its discretion in authorizing the electronic telephone wire surveillance, which was necessary for the government's investigation.

AFFIRMED

For the full opinions visit the 7th Circuit Court of Appeals Web Site.

For more about attorney Michael J. Petro, visit www.mjpetro.com .

Drug Conspiracy - Boilerplate Rules Regarding Sufficiency and Variance

USA v.MIGUEL BUSTAMANTE, RAPHAEL PENA, ABRAHAM ESTREMERA AND STEVE LISCANO, Nos. 03-3388, 04-1469, 05-4798 & 05-4799.  On November 20, 2002, a grand jury indicted Miguel Bustamante, Raphael Pena, Abraham Estremera, and Steve Liscano for a number of crimes related to a drug conspiracy in Aurora, Illinois.

For the following reasons, we affirm Liscano's, Estremera's, and Pena's convictions and Liscano's and Estremera's sentences. We also affirm the district court's ruling on Bustamante's motion to suppress. We vacate Pena's sentence, however, and remand for resentencing.

Between June 2000 and July 2002, members of the Latin Kings street gang operated a drug conspiracy in Aurora, Illinois. The conspiracy's primary drug distributor was a man named Juan Corral, whose ultimate downfall was a penchant for discussing drug deals over the phone.

Between September 2001 and June 2002, Corral fronted Liscano at least sixteen kilograms of cocaine during monthly drug deals. From February 2002 to June 2002, Corral fronted Estremera cocaine once every three weeks in an amount totaling approximately seven kilograms.  Between February 2002 and June 2002, Corral fronted Pena cocaine approximately once a month, in amounts totaling six to eight kilograms.

On July 24, 2002, police arrested Pena at 958 Oliver in Aurora, where, according to Corral, Pena lived with his girlfriend. FBI agents recovered a handgun inside a man's black jacket on a shelf in a first-floor closet, a police scanner, a scale, more than $10,000 in cash, and a gang ledger.

At sentencing, the district court found that Pena was responsible for more than 150 kilograms of cocaine be- cause he knew that other people were involved with Corral in the distribution of drugs. The court said that the phone call in which Pena asked Corral if there was anyone else in the car who could sell him drugs demonstrated that "Pena knew that others were involved, others could be trusted, others were in the business of distributing drugs pursuant to the conspiracy."

Liscano, Estremera, and Pena argue that the government offered insufficient evidence to prove that they were part of a conspiracy to distribute drugs. They also argue, alternatively, that the government offered insufficient evidence to prove that they were part of the conspiracy alleged in the indictment and that a there was a fatal variance between the indictment and the proof at trial. See United States v. Stigler, 413 F.3d 588, 593 (7th Cir. 2005).

1. Sufficiency of the Evidence

When reviewing the sufficiency of the evidence, the Court views the evidence in the light most favorable to the government and upholds the verdict if a jury reasonably could find the essential elements of the crime beyond a reasonable doubt. See United States v. Hicks, 368 F.3d 801, 804-05 (7th Cir. 2004).

To prove a drug conspiracy, the government must show more than a series of spot sales because buying and selling drugs, without more, does not constitute a conspiracy. See United States v. Thomas, 284 F.3d 746, 752 (7th Cir. 2002). Rather, the government has to prove "an under-standing-explicit or implicit-among co-conspirators to work together to commit the offense." United States v. Curtis, 324 F.3d 501, 505 (7th Cir. 2003). Factors indicat- ing a drug conspiracy include transactions that involve large quantities of drugs, prolonged cooperation between parties, standardized dealings, a level of mutual trust, and sales on credit. See United States v. Johnson, 437 F.3d 665, 676 (7th Cir. 2006).

In this case, the government offered sufficient evidence to prove that Liscano, Estremera, and Pena engaged in a conspiracy to distribute drugs. Corral fronted each of them large quantities of drugs on multiple occasions, so Corral's investment return depended on the defendants' success in reselling the drugs. The government offered little evidence of prolonged cooperation or standardized dealings, but that type of evidence-though relevant-is not necessary to sustain a conviction. As in Johnson and Medina, the jury reasonably could have found, given the large sales of drugs on credit, that the defendants agreed to help Corral ply his trade.

2. Variance

Having resolved that the government's evidence was sufficient to prove that Liscano, Estremera, and Pena engaged in a drug conspiracy with Corral, the next question is whether there was evidence that they agreed to participate in the single, larger conspiracy alleged in the indictment. If not, then there was a variance between the indictment and the proof at trial. See United States v. Townsend, 924 F.2d 1385, 1389 (7th Cir. 1991).

Even if there was a variance, however, it would not necessarily affect the validity of the defendants' convictions or sentences, because "a prosecutor may elect to proceed on a subset of the allegations in the indictment, proving a conspiracy smaller than the one alleged." United States v. Duff, 76 F.3d 122, 126 (7th Cir. 1996). We will reverse only when a defendant is prejudiced by evidence that relates to other conspiracies or when the district court increases a defendant's sentence based on conduct unrelated to the conspiracy in which he participated. See Townsend, 924 F.2d at 1388-89.

In this case, the larger, single conspiracy was a "hub and spoke" conspiracy, an arrangement in which a core conspirator (in this case, Corral) moves from "spoke to spoke, directing the functions of the conspiracy." United States v. Chandler, 388 F.3d 796, 807 (11th Cir. 2004). For a hub and spoke conspiracy to function as a single unit, a rim must connect the spokes together, for otherwise the conspiracy is not one but many. Id. In other words, for such a conspiracy to exist, "those people who form the wheel's spokes must have been aware of each other and must do something in furtherance of some single, illegal enterprise." United States v. Levine, 546 F.2d 658, 663 (5th Cir. 1977); see also United States v. Whaley, 830 F.2d 1469, 1474 (7th Cir. 1987).

In this case, there was no variance with respect to the proof against Liscano.  There also was no variance with respect to the proof against Estremera because the government offered evidence that he allowed Corral to use his garage to store drugs.

By contrast, the evidence against Pena was insufficient to prove that he participated in the hub and spoke conspiracy. The government contends that Pena knew the full extent of the conspiracy because he asked Corral if anyone in Corral's car could sell him drugs, but a defendant's knowledge of a conspiracy is not enough to prove that the defendant participated in it. See Townsend, 924 F.2d at 1397.

3. Prejudice

A variance may prejudice a defendant at both trial and sentencing. See Townsend, 924 F.3d at 1388-89. An allegation of a single, multiple-person conspiracy allows the government to try several defendants together and can prejudice a defendant if the jury hears incriminating evidence (also known as "spillover" evidence) that is admissible only against other defendants. See United States v. Johnson-Dix, 54 F.3d 1295, 1308 (7th Cir. 1995). In those circumstances, a jury might convict one defendant merely because he associated with the others. Alleging a single conspiracy also allows the government to make more liberal use of the co-conspirator exception to the hearsay rule. See Townsend, 924 F.3d at 1388 (citing Federal Rule of Evidence 801(d)(2)(E)). Finally, a variance can cause a defendant to be punished for acts committed by individuals with whom he did not conspire. Id. at 1389; Glenn, 828 F.2d at 860.

To determine whether a variance prejudiced a defendant at trial, the Court considers several factors:  [the] (1) surprise to the defendant resulting from the variance, (2) possibility of subsequent prosecution for the same offense, (3) likelihood of jury confusion as measured by the number of conspirators charged and the number of separate conspiracies proven, and (4) likelihood of jury confusion in light of the instructions given the jury limiting or excluding the use of certain evidence not relating to the defendant.  Townsend, 924 F.2d at 1410-11.

The jury's drug quantity finding gives us some pause in light of the variance, because it may have based this finding-as it pertained to Pena-on cocaine sales in which Pena was not involved.

The main problem with the variance was that the district court held Pena accountable for 150 kilograms of cocaine, most of which was unrelated to his conspiracy with Corral. Section 1B1.3 of the Federal Sentencing Guidelines says that in the case of jointly undertaken criminal activity, a defendant's base offense level "shall be determined on the basis of . . . all reasonably forseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity."

As discussed above, the government's evidence was insufficient to prove that Pena furthered the larger conspiracy alleged in the indictment. Pena may have known that the larger conspiracy existed, but no reasonable fact finder could conclude that the government's evidence, in particular the ledger, proved that Pena promoted the larger endeavor's success. Accordingly, the district court should have based Pena's offense level on the cocaine that he purchased from Corral-the only jointly undertaken criminal activity that the government proved.

As such, this Court VACATES Pena's sentence and REMANDS for resentencing consistent with this opinion.

For the full opinions visit the 7th Circuit Court of Appeals Web Site.

For more about attorney Michael J. Petro, visit www.mjpetro.com .

Terry Car Stop OK: Boilerplate Rules

USA v. Ralph Wesley Riley, 06-2557.  Ralph Wesley Riley pleaded guilty to two counts of bank fraud and eleven counts of attempted bank fraud, in violation of 18 U.S.C. § 1344, and to one count of theft of mail, in violation of 18 U.S.C. § 1708; in his plea agreement, however, he reserved the right to appeal the district court's ruling on his motion to suppress evidence. In this court, Mr. Riley renews his arguments with respect to his motion to suppress and also challenges aspects of his sentence.

On the morning of July 23, 2004, Detective Pablo Reyna of the Moline, Illinois Police Department received a report of suspicious activity at the I.H. Mississippi Valley Credit Union involving two white males and two black males, all wearing baggy shorts.  Approximately one hour after the call, Detective Reyna drove through the parking lot at the Blackhawk State Bank.

Detective Reyna continued past the bank, and, in his rear view mirror, observed a man in business dress, later identified as Mr. Riley, exiting the bank. Mr. Riley was carrying something in his hands that Detective Reyna could not see clearly. Mr. Riley walked at a brisk pace to the green Lincoln and entered the passenger side of the car; the Lincoln then pulled away, and Detective Reyna followed.

After about ten blocks, the Lincoln pulled into a gas station. The car was at the station for less than a minute, during which time the driver and the passenger switched places. Detective Reyna continued to follow the Lincoln after it left the gas station. Detective Reyna also called Detective Jeff Heist to inform Detective Heist that he was following a suspicious car; specifically, Detective Reyna told Detective Heist that he believed that the individuals in the car had been involved in a bank robbery.

While the Lincoln still was stopped at the light, Detective Reyna pulled behind the car in his unmarked vehicle and turned on his emergency lights. He approached the driver's side of the car. Detective Reyna then showed his identification and asked to see the driver's license, registration and proof of insurance; Detective Reyna noted that the insurance was expired. After these documents were produced, Mr. Riley inquired why he had been stopped; Detective Reyna responded that he was investigating a possible crime and asked Mr. Riley if he had robbed the Blackhawk State Bank. Mr. Riley responded that he had not. Mr. Riley further explained that he had been to the bank on business, that he was interested in buying a building in which he desired to open a restaurant, but that the bank was too busy at the time so he had left without transacting any business.

At that point, Detective Reyna asked for permission to search the car. Mr. Riley politely refused.  After consulting with another detective on scene, Detective Reyna decided to place the driver under arrest for operating a vehicle without insurance and to place the passenger under arrest for operating a vehicle without a license.

After arresting Mr. Riley and the car's passenger, Detective Reyna searched the front compartment of the car. Items uncovered during the search included eleven personal checks made payable to individuals other than Mr. Riley, his alias or his passenger, a black planner and a notebook with the names and addresses of five local banks written in it. At the time of the arrest, Mr. Riley possessed $1,956.95 in cash.

Mr. Riley first challenges the district court's denial of his motion to suppress. We review a district court's legal conclusions on a motion to suppress, including the question whether reasonable suspicion existed to justify a stop, de novo. United States v. Lenoir, 318 F.3d 725, 728 (7th Cir. 2003). The district court's underlying findings of fact, however, are reviewed for clear error. Id.

"[A] brief investigatory stop that demands only a limited intrusion into an individual's privacy is permitted under the Constitution when it is based upon 'specific and articulable facts which, taken together with rational inferences from those facts reasonably warrant that intrusion.' " United States v. Baskin, 401 F.3d 788, 791 (7th Cir. 2005) (quoting Terry v. Ohio, 392 U.S. 1, 21 (1968)). Officers, therefore, "may conduct an investigatory stop of a person when they have a reasonable, articulable suspicion that criminal activity is afoot." United States v. Lawshea, 461 F.3d 857, 859 (7th Cir. 2006). "Reasonable suspicion amounts to something less than probable cause but more than a hunch." Baskin, 401 F.3d at 791.

"When determining whether an officer had reasonable suspicion, courts examine the totality of the circumstances known to the officer at the time of the stop, including the experience of the officer and the behavior and characteristics of the suspect." Lawshea, 461 F.3d at 859. "Ultimately, a court's determination of reasonable suspicion 'must be based on common-sensical judgments and inferences about human behavior.' " Baskin, 401 F.3d at 791 (quoting Illinois v. Wardlow, 528 U.S. 119, 125 (2000)).

Given these standards, we believe that Detective Reyna had a reasonable, articulable suspicion to justify the stop of Mr. Riley's car. 

Detective Reyna testified that, in his experience investigating bank robberies, it was common for perpetrators to park in lots close to banks, but not in the bank parking lots. Furthermore, the fact that the Lincoln was backed into the parking space and that the driver was focused on the bank indicated to him that the Lincoln was a "getaway" car.

Case law from this court notes similar behavior by individuals involved in criminal activity at banking institutions. See, e.g., United States v. Jocic, 207 F.3d 889, 890 (7th Cir. 2000) ("Upon leaving the bank, Bradach entered the passenger side of his black Jeep Cherokee, which was being driven by Jocic. The jeep was backed into a parking space facing an alley about 115 feet from the doors of the bank . . . . Once Bradach got in, the jeep immediately took off through the alley."); United States v. Arrington, 159 F.3d 1069, 1071 (7th Cir. 1998) (noting that, with respect to two different robberies, a "black Blazer (or Jimmy) [had been] backed into a parking space in the parking lot near the bank").

Although, as noted by the district court, all of these taken separately might not justify a stop, we do not evaluate the circumstances in isolation. See Lawshea, 461 F.3d at 859 ("[W]e recognize that certain behavior in isolation may have an innocent explanation yet that same behavior may give rise to reasonable suspicion when viewed in the context of other factors at play.").

Furthermore, these circumstances must be viewed through the lens of Detective Reyna, an experienced officer. The Supreme Court has explained that, in determining whether particular circumstances rise to the level of a reasonable suspicion, courts must take into "consideration . . . the modes or patterns of operations of certain kinds of lawbreakers," which allow "trained officer[s] [to] draw[ ] inferences and make[ ] deductions . . . that might well elude an untrained person." United States v. Cortez, 449 U.S. 411, 419 (1981).

Taken together, all of these circumstances, when observed by an officer familiar with individuals involved in robbery and fraud, would lead a reasonable officer to suspect that the individuals traveling in the Lincoln had engaged in criminal activity in the bank, and, therefore, a short detention of the parties for further inquiry was justified.

AFFIRMED

For the full opinions visit the 7th Circuit Court of Appeals Web Site.

For more about attorney Michael J. Petro, visit www.mjpetro.com .