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UNITED STATES v. SANCHEZ

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK


March 15, 1996

UNITED STATES OF AMERICA
v.
PEDRO SANCHEZ and MARIO CHALARCA, Defendants.

The opinion of the court was delivered by: SCHEINDLIN

OPINION

 Shira A. Scheindlin, U.S.D.J.

 On May 16, 1995, pursuant to a duly executed plea agreement, Pedro Sanchez ("Sanchez") pled guilty to conspiring to possess with intent to distribute cocaine. On February 13, 1996, prior to sentencing, a hearing was held with respect to two disputed issues, of which the parties received notice by this Court's Opinion of February 12, 1996 ("February 12 Opinion"). The purpose of this Opinion is to resolve each of the disputed issues.

 I. The Applicability of U.S.S.G. § 5C1.2

 U.S.S.G. § 5C1.2 provides what has come to be known as a "safety valve." This provision allows defendants in narcotics cases to escape the required statutory minimum sentences if they meet certain criteria set forth in 18 U.S.C. § 3553(f)(1)-(5). In the case of specified narcotics offenses, "the court shall impose a sentence in accordance with the applicable guidelines without regard to any statutory minimum sentence, if the court finds that the defendant meets the criteria in 18 U.S.C. § 3553(f)(1)-(5) . . . ." U.S.S.G. § 5C1.2 (emphasis added). Here, the Government concedes that Sanchez has met the first four criteria. There is a dispute, however, as to whether Sanchez has met the fifth criterion which requires that "not later than the time of the sentencing hearing, the defendant has truthfully provided to the Government all information and evidence the defendant has concerning the offense." Id. The parties also disagree as to whether the Government or the defendant bears the burden of proving that the defendant meets the criteria set forth in 18 U.S.C. § 3553(f).

 A. Burden of Proof

 Sanchez argues that the "safety valve" is not to be treated as a downward departure or mitigating factor in which the defendant bears the burden of proof. Rather, defendant argues that the "safety valve" is unique in that it requires that courts impose a Guidelines sentence rather than that required by statute, if certain conditions are met. Sanchez further argues that a defendant has the burden of going forward, namely demonstrating that he has met each of the five criteria. If he has presented evidence that he has met each of the criteria, then the burden shifts to the Government to prove that the defendant has failed to meet one or more of the relevant criteria.

 Because this section is relatively new, having been promulgated in September 1994, there is little case law on point and none in this Circuit. Several courts have, in fact, described the safety valve as a downward departure. See United States v. Rodriguez, 69 F.3d 136, 144 (7th Cir. 1995); United States v. Edwards, 65 F.3d 430 (5th Cir. 1995); United States v. Hart, 876 F. Supp. 4 (D.D.C. 1995). None of these opinions, however, discusses the question of burden of proof. Two other courts touched on the burden of proof without directly addressing the issue. See United States v. Blackwell, 897 F. Supp. 586, 589 (D.D.C. 1995) ("Defendant has not carried her burden of showing that she complied with the fifth criterion"); United States v. Buffington, 879 F. Supp. 1220, 1221 (N.D. Ga. 1994) ("the government contends that defendant cannot meet the burden under 18 U.S.C. § 3553(f)(5) (as amended) to overcome the imposition of a mandatory minimum sentence").

 I conclude that defendant has the burden of demonstrating that he meets the criteria set forth in 18 U.S.C. § 3553(f). However, once he has carried his burden of going forward, the burden shifts to the Government to prove that he has not met his burden. The ultimate burden of persuasion remains on the defendant. Ultimately, the Court must determine whether the defendant has met the criteria set forth in the statute. See United States v. Aristizabal, 93 Cr. 1091, 1994 U.S. Dist. LEXIS 17441, *1, 1994 WL 689089, at *1 (S.D.N.Y. Dec. 8, 1994). I turn now to the facts presented here.

 B. Has Sanchez Met the Requirement of § 3553(f)(5)?

 At his plea, Sanchez allocuted to the elements of a conspiracy to possess and distribute narcotics, but stated that his cousin and co-defendant, Mario Chalarca, was not involved in the transaction. Nonetheless, the Government accepted his plea, gave him the benefit of a plea agreement, and concedes that he has demonstrated acceptance of responsibility. Sanchez then spoke to the Probation Department and admitted his participation and role in the offense, continuing to deny that Mario Chalarca was involved in the transaction. Finally, on February 1, 1996, Sanchez met with the Government in a so-called "safety valve interview" in which he again described his participation, identified the source of the money as best he could, but denied Mario Chalarca's involvement. Based on this interview, the Government takes the position that Sanchez has not been truthful and has not met the fifth criterion of 18 U.S.C. § 3553(f).

 In order to make a factual determination as to whether Sanchez had met the fifth criterion, this Court held a hearing on February 16, 1996. The Government offered the testimony of one of the arresting agents who testified that Sanchez implicated Chalarca in a statement made immediately after the arrest. *fn1" Based on this statement, as well as Sanchez' recorded statements during the course of the conspiracy, the Government concludes that Sanchez has not been truthful. In response, Sanchez testified under oath and denied making the alleged post-arrest statement. He testified that he was in a state of shock, exhausted, confused and unsure of what he said or did not say. Transcript of Hearing, February 16, 1996 ("Tr.") at 55-58. Moreover, the post-arrest questions and answers involved both Spanish and English. Tr. at 116. In explaining the recorded statements made in the course of the conspiracy, Sanchez explained that he was continually "puffing" to impress the seller. Tr. at 53, 108-109. He also disputed the Government's interpretation of his statements regarding Chalarca's participation in the transaction. Tr. at 91, 96.

 Based on all of the evidence submitted at that hearing, together with the record of the plea allocution, the Presentence Report ("PSR"), and the description of the safety valve interview, I find that Sanchez has truthfully provided "all information and evidence the defendant has concerning the offense." *fn2" I do not believe that Sanchez implicated Chalarca in any unsworn post-arrest statement. *fn3" By contrast, I credit Sanchez' testimony that Chalarca had no knowledge of the transaction. He has consistently taken this position before this Court and with the Government. In May 1995, at his plea allocution, Sanchez stated under oath that Chalarca was not involved. He repeated that statement at his "safety valve interview" and at the sentencing hearing. He has done this with full knowledge that he risks ten years in jail if the Court finds that this statement is untrue. This goes a long way toward convincing me that Sanchez is being truthful. It would be easy for Sanchez to say that Chalarca was involved, especially since Sanchez knows that a jury has already found that Chalarca was involved. Sanchez' statements regarding Chalarca have the ring of truth.

 The Government also argues that Sanchez is untruthful because he has failed to name the source of the money or the person to whom the drugs would be distributed. Sanchez, however, states that the person providing the money was a person known to him as Jerry (LNU) whom he met as a customer in his bar. *fn4" He also testified that he was to provide the drugs to the same person after purchasing them. At the hearing, Sanchez described Jerry and his contacts and conversations with Jerry. While conceding that this information is not particularly useful to the Government, usefulness is not the standard governing U.S.S.G. § 5C1.2. The sole question is truthfulness, as demonstrated by the final sentence of § 3553(f)(5): "the fact that . . . the Government is already aware of the information shall not preclude a determination by the court that the defendant has complied with this requirement." Sanchez appears to be a novice in the business of drugs. He lacks any prior criminal record, no proof was offered of any prior involvement with drugs, he is a legitimate businessman and he has no unexplained wealth. In addition, Sanchez acted like a novice in handling this transaction by speaking and meeting with a total stranger, neither viewing nor tasting the drugs, and never discussing the quality (purity) of the drugs. It is therefore not surprising that Sanchez would know only the first name of the man who supplied him with the funds and to whom he intended to turn over the drugs.

 For all of these reasons, I find that defendant has met his burden of persuading the Court that he is entitled to the benefit of U.S.S.G § 5C1.2. Therefore he will be sentenced in accordance with the Guidelines, without regard to the statutory minimum set forth in 21 U.S.C. § 841(b)(1)(A).

 II. The Quantity of Drugs

 The second question addressed at the hearing was the appropriate quantity of drugs for which Sanchez should be held accountable at sentencing. Sanchez argues that because he lacked the intent or capability to purchase the entire 12 kilograms for which he negotiated, he should be sentenced only for the amount of drugs that he was able to purchase, namely 3.5 kilograms. By contrast, the Government argues that Sanchez must be sentenced based on the entire 12 kilograms that he negotiated for and intended to purchase.

 At the hearing, the Government offered the tape recordings made during the course of the conspiracy as well as the testimony of one of the arresting agents. The Government also relies on the plea agreement, the plea allocution and the PSR. Sanchez offers only his own testimony to the effect that he never had the ability to purchase 12 kilograms of cocaine.

 The Government has proved, by a preponderance of the evidence, that Sanchez is responsible for the entire 12 kilograms of cocaine. First, in his plea agreement, Sanchez agreed that the applicable Sentencing Guidelines base offense level was 32, corresponding to a quantity of cocaine of at least 5 kilograms and less than 15 kilograms. In his plea agreement, Sanchez agreed that no adjustments to the Sentencing Guidelines level were appropriate. At the plea allocution, Sanchez stated that he was fully prepared to purchase 12 kilograms when he went to the "buy" location on September 22, 1994. Plea Transcript ("Pl. Tr.") at 26. Sanchez further stated that he expected to receive $ 6,000 for his participation, based on a fee of $ 500 per kilogram. Finally, Sanchez acknowledged that this was a consignment transaction. Sanchez agreed "to give [Ortiz] $ 60,000, take the 12 kilos, and then pay whatever later." Id. at 31-32. Similarly, in his Statement of Acceptance of Responsibility, Sanchez confirmed that he had "agreed to purchase 12 kilograms of cocaine from a confidential informant. For my role in this transaction, I was to receive the sum of $ 500/kilo." PSR P 27.

 The tape recorded conversations also support the conclusion that Sanchez intended to purchase 12 kilograms and agreed to pay for them on consignment. On September 20, 1994, Sanchez met with the confidential informant ("CI"). During that conversation, the CI reminded Sanchez that after he received the initial cash payment, there would be "two more payments left." GX 8A at 4. Sanchez responded that he would have the money for the balance of the purchase price two or three days after he received the drugs. Id. On September 22, 1994, Sanchez appeared at the Wendy's ready, willing and able to purchase the drugs. He brought with him $ 70,000, which was more than the $ 60,000 down payment that he had agreed to make.

 At the sentencing hearing, Sanchez tried to back away from his previous admissions. He now says that his taped statements were "lies" and that he never had a deal with Ortiz. This testimony is simply not credible in view of all of Sanchez' prior statements and the overwhelming nature of the evidence.

 Courts have regularly held that consignment customers are responsible for the full weight of the narcotics they agree to purchase. See, e.g., United States v. Alaga, 995 F.2d 380, 382-83 (2d Cir. 1993), cert. denied, 127 L. Ed. 2d 80, 114 S. Ct. 886 (1994) (conspirators accountable for purchase of full negotiated amount even where entire transaction was made possible by an extension of credit by government undercover agents); United States v. Fowler, 990 F.2d 1005 (7th Cir. 1993) (holding that the purchase of the full amount was feasible based on the consignment agreement). There is no question here that Sanchez agreed to purchase and was capable of purchasing 12 kilograms of cocaine. His agreement was made with a coconspirator (Ortiz), not a government agent; the agreement included specific terms of price and method of payment (consignment); the agreement was performed in part in that Sanchez appeared with the down payment money which he agreed to pay once he saw the drugs; *fn5" and Sanchez confirmed the quantity involved in both his guilty plea and his statement to the Probation Department.

 III. The Appropriate Offense Level

 Based on the 12 kilograms that Sanchez agreed to buy, his base offense level is 32. This level is decreased an additional 2 levels (to 30) pursuant to § 2D1.1(b)(4). I find that defendant is also entitled to an additional two-level reduction for his mitigating role (to 28). Based on all the evidence, I find that defendant was a minor participant pursuant to § 3B1.2. As explained in Application Note 3 to that Section, "a minor participant means any participant who is less culpable than most other participants, but whose role could not be described as minimal." The initial conspiracy was to distribute 212 kilograms of cocaine. Alba Ortiz was to receive 12 kilograms as a fee for her role in shipping the cocaine to New York. Ortiz agreed to sell these drugs to Sanchez, who was acting on behalf of an undisclosed principal who provided the money and agreed to take the drugs. Sanchez has testified that he was to receive $ 6,000, or $ 500 per kilogram, for his role in arranging the purchase on behalf of his principal. (The evidence demonstrated that the seller was to receive and the buyer agreed to pay between $ 16,000 and $ 20,000 per kilogram of cocaine.) The level is decreased an additional 3 levels based on defendant's acceptance of responsibility (to 25). In the scheme of this overall conspiracy, I conclude that Sanchez played a minor role. Because Sanchez has no prior record he is in Criminal History Category I. Thus, he faces a sentence of 57 to 71 months incarceration.

 IV. Downward Departure

 Pursuant to United States v. Jagmohan, 909 F.2d 61 (2d Cir. 1990), the Government is entitled to prior notice of the Court's intention to consider a downward departure. While I have not yet made a final determination, I am considering a downward departure based on (a) a single aberrant act pursuant to U.S.S.G. Ch. 1, Pt. A.4(d); and (b) mitigating circumstances of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission pursuant to § 5K2.0 such as extreme financial pressures combined with defendant's absolute lack of the sophistication usually demonstrated by those involved in large-scale narcotics transactions. Sentence is scheduled for March 28 at 4:30 p.m.

 Shira A. Scheindlin

 U.S.D.J.

 Dated: New York, New York

 March 15, 1996


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