by David M. Reutter

The United States Court of Appeals for the Fifth Circuit held that the U.S. District Court for the Eastern District of Louisiana erred in applying an offense-level enhancement for maintaining a premises for the purposes of manufacturing or distributing a controlled substance based solely on the defendant’s ambiguous admission. The Court found the factual basis statement to support the guilty plea contained insufficient facts to support the enhancement.

A New Orleans motorcycle shop “co-rented” by Ryan Negrotto became the focus of an investigation by undercover officers (“UC”) with the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives after receiving a tip that drugs were being sold out of the shop. From March through June of 2021, UCs and a confidential informant (“CI”) made purchases of or arranged to make purchases of methamphetamine at the shop.

In July 2021, Nghia Le, Negrotto, and a third co-conspirator were indicted on multiple charges of distributing methamphetamine, conspiring to distribute methamphetamine, and using or maintaining a drug premises. A superseding indictment added marijuana and gun charges stemming from Le’s prior arrest for selling marijuana. Law enforcement officers subsequently found 34 pounds of marijuana in a storage unit rented by Le. They also found guns and 45 pounds of marijuana in Le’s apartment.

Le pleaded guilty in May 2023 to all charges. Count 8 charged the three co-conspirators “unlawfully and knowingly use(d) and maintain(ed)” the motorcycle shop as a drug premises in violation of 21 U.S.C. § 856 (a)(1) and 18 U.S.C. § 2. At Le’s arraignment, the District Court explained twice that in order to prove Le guilty, the Government must prove that he “knowingly and intentionally maintained a place for the purpose of using or distributing a controlled substance” and that “the drug activity was a significant reason why (he) maintained the place.” That is, the District Court explained Count 8 only with reference to “maintaining” the premises, not using them.

However, the written factual basis statement supporting Le’s guilty plea, which he read and signed, centered on his “use” of the motorcycle shop. It read: “[Le] admits that he and [Negrotto] did unlawfully and knowingly use and maintain [the] motorcycle shop … for the purpose of distributing and using methamphetamine…. [Le] and his co-conspirators … used the shop as a location where [they] would knowingly partake in possession and distribution of methamphetamine. Although the premises may have served other purposes, the distribution of methamphetamine was a significant reason why [Le] used the shop.”

The Presentence Investigation Report recommended a two-level enhancement under United States Sentencing Guidelines (“Guidelines”) § 2D1.1(b)(12) on the basis that the three co-conspirators maintained the motorcycle shop for the purpose of distributing and using methamphetamine.

When the use versus maintenance distinction became apparent, Le objected, “arguing that he did not maintain the shop because he did not ‘own or lease’ it, ‘store anything’ at it, ‘have unimpeded access’ to it, have any ‘level of access, dominion[,] or control’ over the shop, ‘direct any of the activities’ of it, or ‘have any control over the people associated with’ it.” The Government responded by noting that Le admitted to the factual basis of the shop being “maintained” as a drug premises. 

The District Court overruled Le’s objection, applied the enhancement, and imposed a total sentence of 195 months. Le timely appealed.

The Court began its analysis by noting that § 2D1.1(b)(12) calls for a two-level increase to the defendant’s offense level if “the defendant maintained a premises for the purposes of manufacturing or distributing a controlled substance.” The Guidelines’ application note states in relevant part: “Among the factors the court should consider in determining whether the defendant ‘maintained’ the premises are (A) whether the defendant held a possessory interest in (e.g., owned or rented) the premises and (B) the extent to which the defendant controlled access to, or activities at, the premises.” § 2D1.1 cmt. n. 17. The note further explains the enhancement applies to “storage of a controlled substance for the purpose of distribution.”

The Government acknowledged that “Le did not have an individual possessory interest in the shop.” Additionally, the Court found the Government failed to prove that Le controlled “access to, or activities at, the premises” to any significant extent. What the record showed was that Le was occasionally invited by Negrotto to be a supplier for drug deals at the shop. Le required Negrotto’s “express permission and physical assistance” to access the shop, the Court noted. See United States v. Lord, 915 F.3d 1009 (5th Cir. 2019).

While on one occasion Le asked the UCs to step outside while he sold methamphetamine to a CI inside the shop, the Court determined that “lone incident” failed to show Le “exercised sufficient dominion and control over the premises” to have “maintained” the shop. United States v. Guzman-Reyes, 853 F.3d 260 (5th Cir. 2017).

The Court further determined that the narrative in the factual basis statement was insufficient “to render the district court’s maintenance finding plausible.” The Court stated that “it is not even clear what Le admitted” because the words “use” and “maintained” were used interchangeably—or at least without clearly and consistently differentiating between them—by both the Government and the District Court. Consequently, the Court reasoned that “when Le admitted the factual basis, he may have ‘admitted’ one of a number of possible ‘and/or’ permutations—including that Negrotto maintained, while Le only used, the shop as a drug premises.” Additionally, relying only on Le’s admission to conclude that he “maintained” the shop for purposes of the sentencing enhancement ignores most of the factual narrative and the evidentiary record, according to the Court.

Thus, the Court held that “it was reversible error for the district court to apply § 2D1.1(b)(12)’s offense-level enhancement based solely on a single, conclusory statement in the factual basis that Le and Negrotto used and maintained the shop.”

Accordingly, the Court reversed and remanded for resentencing on Counts 1, 3, 4, and 8. The sentences on all other counts were affirmed. On remand, the District Court may reconsider whether to apply § 2D1.1(b)(12) upon resentencing in accordance with the Court’s opinion. See: United States v. Nghia Le, 126 F.4th 373 (5th Cir. 2025).  

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