United States v. Franklin Brown, Case No. 12-2743 (J. Kanne, joined by J. Manion and J. Tinder)
Pedro Flores and Margarita Flores are infamously known as “the Twins” in the Northern District of Illinois, where they are the drug source in multiple large-scale cocaine conspiracy cases and are cooperating with the government- but never testify. Franklin Brown was charged in a conspiracy with the Twins to possess with intent to distribute cocaine.
With Brown and their other approximate 15 other customers in their massive drug trafficking operation in Chicago, the Twins used couriers to handle physical transactions- but reserved all power to negotiate for themselves. Between 2003 and 2008, Brown bought millions of dollars worth of cocaine from the Twins. One courier testified he delivered on over 40 occasions between 21 to 100 kilograms of cocaine to Brown. Another courier said between 30 to 40 occasions he delivered to Brown at least 10 kilograms each time. Two other couriers made deliveries to Brown for the Twins. Brown rarely paid full cash payment at the time of delivery, and at some meetings merely gave couriers money for drugs previously received. There was evidence of an accounting ledger which tracked Brown’s dealings with the Twins. The Twins also provided Brown, through the couriers, prepaid cell phones to facilitate communication with the Twins. The Twins provided Brown with a vehicle with a secret compartment for concealing drugs and money. From Brown’s garbage was recovered title documents from another trap compartment vehicle which was known to be operated by one of the Twins couriers that never delivered drugs to Brown.
Brown proceeded to trial on the defense that he was nothing more than a customer of the Twins, and not a co-conspirator. He and the government disagreed on the instruction given to the jury about the difference between his buyer-seller defense and the crime of conspiracy. After the district court combined the parties proposed instructions, Brown was convicted and sentenced to 25-years in prison by Judge James Zagel. He appealed on the basis that the court’s relevant jury instruction misstated the law and misled the jury, and the government did not present sufficient evidence to convict him of conspiracy. He lost on both counts in the Seventh Circuit.
Buyer-Seller Jury Instruction
The appeal court reviews de novo whether a particular jury instruction “accurately summarizes the law.” If so, the Court then must “examine the district court’s particular phrasing of the instruction for abuse of discretion” to determine whether “the jury was misled and that the instruction prejudiced the defendant.” United States v. Dickerson, 705 F.3d 683, 688 (7th Cir. 2013). Here, the Seventh Circuit efforts to “harmonize” the “many dissonant voices” in the case law on buyer-seller relationships into a “well-blended choir.” That takes some work, and the length of this case summary.
Conspiracy is a separate offense from the underlying crime. It is the extra act of agreeing to commit a crime, punishable separately and regardless whether that crime comes to fruition. Conspiracy is a distinct evil because a group of criminals will pose a greater danger than an individual, capitalizing on economies of scale, which facilitates planning and executing, thus making more likely success at an unlawful aim.
Drug sales are also agreements, but though substantive trafficking is an agreement, it cannot also count as the agreement needed to find conspiracy. Rather, conspiracy to traffic drugs requires an agreement to advance further distribution. Mere knowledge of further illegal use is not enough. A co-conspirator has “a stake in the venture” and therefore exhibits “informed and interested cooperation.” Direct Sales Co. v. United States, 319 U.S. 703, 713 (1943).
Often, the government only has circumstantial evidence whether someone has a stake in the venture. The previous version of the Seventh Circuit pattern jury instructions provided a list of non-dispositive factors to consider, to include large quantities; standardized way of doing business over time; sales on credit or consignment; continuing relationship; seller with financial stake in resale; and understanding about resale. Case law added the factor “mutual level of trust between buyer and seller.” United States v. Contreras, 249 F.3d 595, 599 (7th Cir. 2001).
In United States v. Johnson, 592 F.3d 749, 754-55 (7th Cir. 2010), the Seventh Circuit became concerned most of those factors did not actually distinguish conspiracies from buyer-seller relationships beyond a reasonable doubt. The Court identified a new, non-exhaustive lists of factors to pinpoint the distinction, adding to sale on credit or consignment, an agreement to look for other customers; payment of commission on sales; indication one party advised the other on conduct of business; or agreement to warn of threats from competitors or law enforcement.
As for the factor about sales on consignment or credit, the Court here clarified that consignment means the seller permits the buyer to return unsold drugs, and credit means the seller (though I believe the Court here mistakenly indicates “buyer”) fronts the drugs but expects payment for the entire shipment at a later date. Since in each arrangement the seller has chosen terms favorable to the buyer, there appears to be “informed and interested cooperation” that amounts to conspiracy. However, only consignment sales- where sellers and buyers have enmeshed their interests and are “actively pursuing course of sales,” are “quintessential evidence of conspiracy.” Credit sales do not necessarily permit an inference of conspiracy. Since a buyer could purchase a quantity consistent with personal consumption, credit sales are not always premised on further distribution. To prove conspiracy, more evidence is required than a single sale on credit in a quantity consistent with personal consumption. More evidence can be found in the factors listed in the old pattern instruction and the new list from Johnson.
The case law is clear that if a person buys drugs too big for personal consumption, i.e. large quantities, frequently, and on credit, an inference of conspiracy follows. Less clear is what combination of those three characteristics are sufficient. While Johnson implied all three are necessary, other cases debate the sufficiency of lesser combinations.
In October 2012, the Seventh Circuit pattern jury instructions for criminal cases was revised. One notable revision was Instruction 5.10(A), which distinguishes buyer-seller relationships from conspiracies, and was made to address the confusion stemming from the Court’s failure to “state the legal standard (on the issue) in precisely the same way.” It reads as follows:
A conspiracy requires more than just a buyer-seller relationship between the defendant and another person. In addition, a buyer and seller of cocaine do not enter into a conspiracy to possess cocaine with intent to distribute simply because the buyer resells cocaine to others, even if the seller knows that the buyer intends to resell the cocaine.
To establish that a buyer knowingly became a member of a conspiracy with a seller to possess cocaine with intent to distribute, the government must prove that the buyer and seller had the joint criminal objective of distributing cocaine to others.
The committee comment encourages a totality of the circumstances approach and case-specific analysis versus bright-line approach. The instruction itself deliberately uses open-ended phrasing such as “the government must prove that the buyer and seller had [a] joint criminal objective.” In this holding, the Seventh Circuit tries to provide a clearer statement of methodology concerning determining the distinction between buyer-seller relationship versus conspiracy.
People in a buyer-seller relationships have not agreed to advance further distribution of drugs. People in conspiracies agree to do so. However, agreements come in infinite varieties, just like contracts. The totality of the circumstances in a case must be considered. The Court will “take into account all the evidence surrounding the alleged conspiracy and make a holistic assessment of whether the jury reached a reasonable verdict.” Indeed, there are a few factors that are widely accepted as sufficient proof- consignment or credit arrangement, multiple purchases, large-quantity purchases- and a reasonable jury can make the inference of conspiracy. But since those situations repeatedly show themselves, the totality of the circumstances approach leads to the same conclusion. What the Court wants to make clear in this case is that a “checking off boxes” approach is not advised. Any list is merely a starting point and other informative evidence should be considered to determine if “the jury reasonably discerned an agreement to further trafficking of drugs.”
In light of this analysis, there was an immense challenge here for the district court to craft a jury instruction when the new pattern instruction had not yet been adopted. In combining both parties requests, the instruction used by the Court accurately summarizes the law and spoke to the spirit of what the Seventh Circuit is looking for, which is a “shared stake in the illegal venture” along with an “actively pursued course of sales.” The language used allowed for case-specific analysis. Furthermore, the district court used phrases that the jury would find meaningful and not cause confusion.
The Court concluded by holding that while a multi-factor approach is not prohibited, district courts are cautioned to be mindful that certain factors do not truly distinguish conspiracies from buyer-seller relationships.
Sufficiency of the Evidence
The Seventh Circuit accords “great deference” to jury verdicts. United States v. Love, 706 F.3d 832, 837 (7th Cir. 2013). The Court reviews the evidence in the light most favorable to the government” and will reverse only if no “rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Id.
Brown argued that the government did not introduce any evidence of what he did with the drugs after he purchased them from the Twins. The government relied on credit sales and other bits of circumstantial evidence to show further distribution. The Court found that based upon the payment arrangements testified to by the couriers and the ledgers, a rational jury could have concluded Brown purchased drugs on credit and further distributed them.
Brown argued the payment he made could have been prepayments for future shipments of drugs rather than post-payments for shipments received on credit. But even if Brown prepaid for the drugs, his interests would still be enmeshed with the Twins in the same way as with a credit arrangement, only with the roles reversed.
In addition to the credit arrangement, the government provided evidence of repeated transactions in large quantities. This evidence- credit, repeated transactions, and in wholesale quantities- represent the factors that are widely accepted as sufficient proof of conspiracy, In addition, the delivery of the prepaid cell phones to Brown from the Twins, the provision by the Twins to Brown of the trap compartment vehicle, and the recovery in Brown’s trash of the title documents to another of the Twins’ trap compartment vehicles are situation-specific circumstances that show just how integral a part Brown played in the Twins’ venture.
The evidence was sufficient that Brown and the Twins had a shared stake in the illegal venture, along with an actively pursued course of sales.