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Fifth Circuit: District Court Miscalculated Sentencing Guidelines Range by Implausibly Finding Defendant Would Use All Cash Proceeds of Drug Sales Seized to Purchase More Meth to Resell

by Douglas Ankney

The U.S. Court of Appeals for the Fifth Circuit held that the U.S. District Court for the Western District of Texas erred in its drug quantity attribution by implausibly finding that Zaira Valenzuela Lujan would have used all of the $10,694 seized from her to purchase additional methamphetamine (“meth”) for resale pursuant to U.S. Sentencing Guidelines Manual § 2D1.1.

Police seized meth and $10,694 in cash from Lujan. She also admitted to police she had sold three ounces of meth. Without a plea agreement, Lujan pleaded guilty to conspiracy to distribute and conspiracy to possess with intent to distribute 50 grams or more of meth.

At sentencing, the district court relied on a statement from the Presentence Investigation Report that “$10,694 can purchase 1,600 grams of actual methamphetamine.” Combining that amount with the meth seized and the three ounces Lujan admitted to selling, the district court determined she was accountable for 1.85 kilograms of meth.

Lujan objected, arguing that the district court used the  “wholesale” price of meth rather than the U.S. Justice Department’s figure of $20 to $105 per-gram a user would pay (i.e., the “retail” price). On those figures, Lujan would be accountable for 353.135 to 786.465 grams of meth with a Sentencing Guidelines range of 108–to–135 months’ imprisonment. The district court rejected Lujan’s argument, calculated her Sentencing Guidelines range at 168–to–210 months based on the 1.85 kilograms, and sentenced her to 168 months in prison. Lujan appealed.

The Fifth Circuit observed that “[w]hen a defendant is convicted of a drug offense, his or her base offense level under the Sentencing Guidelines depends in part on the quantity and type of drugs involved in the offense.” United States v. Rhine, 583 F.3d 878 (5th Cir. 2009). At sentencing, the Government must prove by a preponderance of the evidence the drug quantity attributable to the defendant. United States v. Turner, 319 F.3d 716 (5th Cir. 2003).

The Fifth Circuit, along with the First, Second, Fourth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits recognize that district courts may rely on cash-to-drug conversions when approximating the quantity of the controlled substance(s) involved. United States v. Johnston, 127 F.3d 380 (5th Cir. 1997). (See opinion for supporting citations from the other circuits.) Performing the cash-to-drug conversion requires a court to first determine the amount of cash that is attributable to drug dealing. United States v. Perez, 785 F. App’x 207 (5th Cir. 2019). A court then determines an appropriate price per unit of the drug. Id. Finally, a court then divides the amount of cash by the price-per-unit to arrive at the drug quantity attributable to the defendant. Id.

Generally, when converting cash to drug quantities, courts estimate the amount of drugs the defendant sold at the retail price to account for the amount of cash seized. Johnston. But in United States v. Hicks, 948 F.2d 877 (4th Cir. 1991), the district court applied the wholesale price based on the defendant’s admission to police that the seized cash would be used to purchase more cocaine.

But in the instant case, there isn’t any evidence to support a finding that Lujan would have used all of the seized cash to purchase more meth for resale, stating it’s “purely speculative here” and “implausible on the facts presented to the district court.” The Court observed that Lujan was not otherwise employed and did not have any source of income other than the drug-dealing enterprise. It’s inescapable that some of the seized cash would have been devoted to living expenses such as housing, food, and medical needs, the Court reasoned.

The Court determined error was not harmless because it resulted in an incorrect Guidelines calculation. United States v. Richardson, 676 F.3d 491 (5th Cir. 2012).

Accordingly, the Court vacated Lujan’s sentence and remanded for the district court to reconsider the amount of meth attributable to Lujan. See: United States v. Valenzuela Lujan, 25 F.4th 324 (5th Cir. 2022). 

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Related legal case

United States v. Valenzuela Lujan

 

 

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