UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-40245
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RANDY D. SALTER,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Texas
February 2, 2001
Before POLITZ, SMITH, and PARKER, Circuit Judges.
POLITZ, Circuit Judge:
Randy D. Salter appeals his two concurrent sentences of 130 months for money
laundering and conspiracy to possess with intent to distribute more than 100 kg of
marihuana. Concluding that the district court erred in not grouping these two counts
under U.S.S.G. § 3D1.2 and not combining Salter’s prior conviction for tax evasion
with his prior federal conviction for drug trafficking under § 4A1.2, we vacate the
sentence and remand for re-sentencing.
BACKGROUND
Between March 1997 and May 1998, Salter and two others were involved in a
drug conspiracy. They laundered proceeds through the purchase of a house in Corpus
Christi, Texas, which subsequently was used for their illegal activities. An undercover
investigation culminated in the negotiation for the sale of approximately 90 kg of
marihuana. Once the sale was agreed to, Salter and his co-conspirators were arrested.
The conspiracy involved a total of 135 kg of marihuana, the 90 kg involved in the
negotiations, and an additional 45 kg discovered in the home. The total money
laundered was determined to be $91,046.90 which included $500 in earnest money for
the purchase of the home, $15,546.90 paid toward that purchase, $15,000 paid for the
purchase of a boat, and $60,000 which was to be used to pay the undercover agent for
the 90 kg of marihuana.
Salter pleaded guilty to conspiracy to possess with intent to distribute and
money laundering. The PSI prepared for sentencing did not group the two offenses.
The base offense level for the conspiracy charge was 26, with an adjusted offense level
of 30. The base offense level for the money laundering charge was 23, with an
adjusted level of 28. The multiple count adjustment under § 3D1.4 resulted in a
2
combined adjusted offense level of 32. Three levels were subtracted for acceptance of
responsibility, resulting in a total offense level of 29.
Salter received three criminal history points for a prior drug related conviction
and three criminal history points for a conviction for tax evasion, giving him six total
points and a history category of III.
Salter objected at sentencing to the money laundering count not being grouped
with the conspiracy count under § 3D1.2. He also objected to the PSI’s criminal
history category, claiming that it should have combined the tax evasion with the prior
drug related conviction, thereby assessing a total of only three criminal history points.
The court overruled the objections, adopted the PSI offense level and history category,
sentenced Salter to two concurrent 130 month terms of imprisonment, to be followed
by concurrent 8 year terms of supervised release, and imposed a fine of $2,500. This
appeal followed.
ANALYSIS
We review the trial court’s application of the Sentencing Guidelines de novo and
its findings of fact under the clearly erroneous standard.1 Arguments raised for the first
1
United States v. Rice, 185 F.3d 326 (5th Cir. 1999).
3
time on appeal are reviewed for plain error.2
Salter contends that the district court erred in refusing to group his drug
trafficking count with his money laundering count under U.S.S.G. § 3D1.2 which
provides:
All counts involving substantially the same harm shall be grouped
together into a single Group. Counts involve substantially the same harm
within the meaning of this rule:
(a) When counts involve the same victim and the same act or
transaction.
(b) When counts involve the same victim and two or more acts
or transactions connected by a common criminal objective
or constituting part of a common scheme or plan.
(c) When one of the counts embodies conduct that is treated as
a specific offense characteristic in, or other adjustment to,
the guideline applicable to another of the counts.
(d) When the offense level is determined largely on the basis of
the total amount of harm or loss, the quantity of a substance
involved, or some other measure of aggregate harm, or if the
offense behavior is ongoing or continuous in nature and the
offense guideline is written to cover such behavior.
In United States v. Gallo,3 we determined that Section 3D1.2 divided offenses
into three categories regarding grouping: (1) those to which the section specifically
applies; (2) those to which the section specifically does not apply; and (3) those for
2
United States v. Dabeit, 231 F.3d 979 (5th Cir. 2000). At sentencing, Salter
relied solely on § 3D1.2(b). On appeal he challenges the failure to group under
subsections (b), (c), and (d). The challenges to subsections (c) and (d) are evaluated
under the plain error standard.
3
927 F.2d 815 (5th Cir. 1991).
4
which grouping may be appropriate on a case-by-case basis. As we noted in United
States v. Rice,4 grouping of money laundering counts with drug trafficking counts falls
into the third category. Gallo found that “the offense level determination for offenses
in this third category ‘is in some parts legal rather than factual, and so is not shielded
by the clearly erroneous standard.’”5
We previously have addressed this issue. In Gallo, we held that, under
3D1.2(b), distinct societal interests were invaded by the offenses of drug trafficking and
money laundering, thus prohibiting grouping of the offenses under this subsection.
However, when presented with the same issue in Rice, we recognized that the Gallo
decision failed to address the issue under subsection (c).6 Subsection (c) requires
grouping where one of the counts embodied conduct that was treated as a specific
offense characteristic in the guideline applicable to another of the counts.7 I n
United States v. Haltom8 we had held that, when a two point increase was applied to
4
185 F.3d 326 (5th Cir. 1999).
5
Gallo, 927 F.2d at 823 (quoting United States v. Pope, 871 F.2d 506, 509 (5th
Cir. 1989)).
6
Rice, 185 F.3d at 329.
7
United States v. Haltom, 113 F.3d 43, 45 (5th Cir. 1997).
8
Id.
5
Haltom’s offense level for tax evasion because his unreported income was derived from
criminal activity, in essence, the mail fraud conviction was being counted twice: once
as a basis for the mail fraud conviction, and again as a specific offense characteristic
of the tax evasion count. We there found that the purpose of subsection (c) was to
prevent this type of double counting. The two offenses were required to be grouped
under (c).
The panel in Rice found that the reasoning of Haltom applied to the facts
presented in Rice. Specifically, we there held that:
Rice’s drug offenses were counted twice toward his sentence; once as the
basis for his conviction on his drug counts, and again as a specific offense
characteristic of the money laundering count. This had the effect of
increasing Rice’s money laundering offense level by three pursuant to §
2S1.1(b) because he knew or believed the funds he was receiving were
the proceed of the unlawful distribution of marijuana. Thus, it is apparent
that the drug offenses were used to enhance the money laundering offense
level just as the mail fraud offense in Haltom was used to enhance the tax
offense level.9
Rice is identical to the circumstances at bar. Although the prosecution attempts
to distinguish the cases by maintaining that more money was involved in the money
laundering conviction than in the drug trafficking conviction, this distinction fails. The
holding in Rice is not based on the fact that there was a dollar for dollar accounting
9
Rice, 185 F.3d 326, 329 (5th Cir. 1999).
6
between the transactions, nor should it be limited to those facts. Rather, it was based
on the fact that the PSI had added additional points to the money laundering conviction
because Rice knew that the funds were the proceeds of drug activity. This is precisely
the factual scenario in the case at bar. The PSI added three points to the money
laundering offense level because Salter knew that the funds were the proceeds of an
unlawful activity involving the distribution of narcotics or other controlled substance.
This is the exact conduct embodied by the drug trafficking count of the conviction.
Therefore, grouping of these charges is required.
Accordingly, we hold that the district court erred when it failed to group counts
one and three under U.S.S.G. § 3D1.2(c). Grouping of these counts would have
resulted in an adjusted offense level of 30 (the higher adjusted offense level of the two
counts). After the three level adjustment for acceptance of responsibility, the total
offense level should have been 27, giving Salter a sentencing range of 87-108 months
(Offense level 27, Criminal History category III). The minimum sentence for this
offense is 120 months under 21 U.S.C. 841(b)(1)(B), which is above the maximum
sentence under the guidelines. U.S.S.G. § 5G1.1(b) provides that, “Where a statutorily
required minimum sentence is greater than the maximum of the applicable guideline
range, the statutorily required minimum sentence shall be the guideline sentence.” This
would result in a required sentence of 120 months, unless there is cause for an upward
7
departure from the guidelines.10 The prosecution did not present any evidence at the
sentencing hearing which would demonstrate that an upward departure would be
appropriate in this case.11 To the contrary, the prosecution recommended 120 months.
Therefore the appropriate sentence herein is 120 months.
Salter additionally contends that his prior conviction for tax evasion should have
been combined with his prior federal conviction for possession with intent to distribute
because the money he failed to report was the $75,000 profit he received from the drug
trafficking involved in the possession conviction. U.S.S.G. § 4A1.2 provides that,
“Prior sentences imposed in related cases are to be treated as one sentence for purposes
of § 4A.1.1 (a), (b), and (c).” The commentary to this subsection states that prior
sentences are related “if they resulted from offenses that (A) occurred on the same
occasion, (B) were part of a single common scheme or plan, or (C) were consolidated
for trial or sentencing.” It is clear that the $75,000 which Salter failed to report on his
taxes was the profit from the drug trafficking venture. In United States v. Robinson,
we held that offenses are part of a common scheme or plan where “commission of one
crime entailed the commission of the other,” i.e., the second offense could not have
10
See U.S.S.G. § 5G1.1 Commentary.
11
The prosecution presented no evidence at the sentencing hearing beyond the
PSI.
8
occurred but for the first offense.12 But for the drug trafficking Salter would not have
had the $75,000. Therefore, he would not have been subject to conviction for tax
evasion. Accordingly, these offenses should have been considered part of a common
scheme or plan.
The prosecution contends that this proposition is a no longer an issue because
the PSI was amended to combine the federal drug trafficking conviction with his other
prior state drug trafficking conviction, thus resulting in zero criminal history points for
the federal conviction. This submission, however, misses the point. Combination of
the two drug offenses did not remove the points assessed against Salter for the tax
evasion conviction. The two drug trafficking offenses were combined as a result of the
plea agreement, not as a result of removing points for the relation of the drug trafficking
to the tax evasion. The fact that the government voluntarily agreed to combine the drug
offenses does not negate the requirement that the tax evasion offense must be combined
with the drug trafficking offense under § 4A1.1. Therefore, the three criminal history
points assessed against Salter for the tax evasion conviction should be removed,
resulting in a total criminal history calculation of three. This reduces Salter’s criminal
history category from III to II. However, this change has no effective impact because
12
187 F.3d 516, 520 (5th Cir. 1999).
9
the required sentence remains at 120 months. The sentence imposed is
VACATED and the matter is REMANDED for re-sentencing consistent herewith.
10