Unpublished Disposition, 905 F.2d 1541 (9th Cir. 1990)

No. 89-50223.

United States Court of Appeals, Ninth Circuit.

Before CANBY and LEAVY, Circuit Judges, and PRICE^* , District Judge.

MEMORANDUM^** 

FACTS AND PROCEEDINGS

A three-count indictment charged Galo Naranjo with (1) conspiracy to possess and with intent to distribute cocaine; (2) possession with intent to distribute 2.6 kilograms of cocaine; and (3) possession with intent to distribute 85 pounds of marijuana. In exchange for a dismissal of the first two counts, Naranjo pleaded guilty to the third, i.e. the count relating to the possession with intent to distribute the marijuana.

The district court sentenced Naranjo to sixty months imprisonment, followed by five years of supervised release, as the presentence report recommended. The court also ordered Naranjo to pay a $12,500 fine. Naranjo appeals his sentence and the fine. We affirm.

Naranjo argues that the district court impermissibly applied the Guidelines in setting his base offense level. We review de novo the interpretation of a provision of the Guidelines. United States v. Williams, 891 F.2d 212, 214 (9th Cir. 1989), cert. denied, 110 S. Ct. 1496 (1990).

In drug trafficking cases, a defendant's base offense level is generally determined by reference to the amounts of controlled substances involved in the offense. See Guideline Sec. 2D1.1. In arriving at Naranjo's base offense level, however, the presentence report considered the cocaine amounts that were involved in the counts against Naranjo that were dismissed pursuant to a plea agreement. Relying on United States v. Restrepo, 883 F.2d 781 (9th Cir. 1989), Naranjo argues that those cocaine amounts could not be considered in calculating his offense level.

The Restrepo opinion was, however, withdrawn. United States v. Restrepo, 896 F.2d 1228 (9th Cir. 1990). The subsequent Restrepo opinion held that a district court may consider all the amounts involved in a drug distribution scheme, including amounts not involved in counts leading to conviction. United States v. Restrepo, No. 88-3207, slip op. 4491 (9th Cir. May 8, 1990). See also United States v. Turner, 898 F.2d 705, 711 (9th Cir. 1990). Thus, the presentence report properly considered the cocaine amounts involved in the dismissed counts when it calculated Naranjo's base offense level, and the district court committed no error in adopting the report's recommendation.

Assuming that the Guidelines allow the district court to consider the cocaine amounts involved in the dismissed counts, Naranjo maintains that to sentence him on the basis of those amounts deprives him of due process of law. Naranjo's theory is that the facts surrounding the cocaine amounts were the topic of counts that were dismissed, and have therefore not been shown beyond a reasonable doubt. Since those facts were not shown beyond a reasonable doubt, Naranjo contends they cannot form the basis of his sentence under the Guidelines.

All the facts relating to the cocaine amounts as well as those relating to the marijuana amounts appear in the presentence report. The report's factual basis is derived from reports by Drug Enforcement Administration ("DEA") agents.

Naranjo's view of the burden of proof required when making factual determinations at sentencing is incorrect. Once a defendant is determined to be guilty of an offense, due process "does not require a court to make factual determinations beyond a reasonable doubt" in determining a defendant's sentence. United States v. Wilson, No. 89-50236, slip op. 3423, 3430 (9th Cir. April 6, 1990). The district court's factual determinations for sentencing under the Guidelines need only meet a preponderance of the evidence standard. Id. at 3432.

There is no reason for us to believe that the information presented by the presentence report failed to meet the preponderance of the evidence standard. The DEA reports on which the presentence report relied detailed a well-planned "sting" operation, in which a confidential informant personally witnessed the drug transaction in question and also recorded conversations of the various participants, including Naranjo.

Naranjo argues that the facts contained in the report failed to meet the standard because the DEA reports might have conceivably been biased. There is simply no indication in the record that such a bias existed. Moreover, Naranjo failed to raise that issue before the district court. We will not consider an argument first raised on appeal, especially where the nature of the argument is factual. Romain v. Shear, 799 F.2d 1416 (9th Cir. 1986).

Naranjo also attacks the reliability of the presentence report because of the hearsay nature of the DEA reports. The fact that the reports may be hearsay is not dispositive, however, because the "the court may consider relevant information without regard to its admissibility under the rules of evidence applicable at trial, provided that the information has sufficient indicia of reliability to support its probable accuracy." Guideline Sec. 6A1.3(a); see also United States v. Burns, 894 F.2d 334, 336-37 (9th Cir. 1990). As previously discussed, there is no basis to doubt the reliability of the DEA reports.

The district court did not err by considering all the events related in the DEA reports when sentencing Naranjo under the Guidelines.

Naranjo contends that this case must be remanded for the district court to enter findings regarding one of his objections to the presentence report. Specifically, Naranjo wrote a letter to the court in which he objected to the presentence report's consideration of the cocaine amounts in setting his base offense level. Naranjo argues that the Guideline Sec. 6A1.3 required the district court to resolve his objection prior to sentencing. The district court admittedly did not explicitly resolve this issue at the sentencing hearing. The district court only resolved the objections filed by Naranjo's attorney, although the court indicated it had read Naranjo's letter.

Chapter Six of the Guidelines "sets forth procedures for establishing the facts upon which the sentence will be based." Introductory Commentary, Guideline Sec. 6A (emphasis added). Guideline Sec. 6A1.3 requires a court to provide opportunity for the parties to present information regarding a disputed issue, and requires that the court resolve the issues in accordance with Fed. R. Crim. P. 32(a) (1). Under Rule 32(a) (1), a court must enter a finding regarding any allegation of a factual inaccuracy in a presentence investigation report, if the court takes the allegedly inaccurate fact into consideration at sentencing.

Guideline Sec. 6A1.3 does not apply to the issue raised by Naranjo. Naranjo did not allege in his letter to the court that the facts contained in the presentence report were inaccurate as they related to the cocaine amounts. Rather, Naranjo's was purely a legal argument that those amounts could not be considered for purposes of sentencing.

The district court properly resolved all the factual matters in dispute as raised by Naranjo's attorney. Guideline Sec. 6A1.3 and Rule 32(a) (1) did not require the court to explicitly resolve the legal issue of whether it was proper for the court to consider the cocaine amounts involved in the counts that were dismissed. Since we have resolved this issue of law on appeal, a remand is unnecessary.

The Guidelines require fines to be imposed in all cases except when the defendant shows that he is unable, and is not likely to become able, to pay the fine. Guideline Sec. 5E4.2(a), (f).

Naranjo failed to meet his burden of showing that he was unable to pay a fine. At the time of the probation report, December 6, 1988, Naranjo had not produced information regarding the fair market value of his real estate properties and had not authorized a credit investigation. A week later he authorized the investigation but he only gave his personal estimate of the fair market value of the properties. The sentencing hearing was held on April 17, 1989. Naranjo never produced an independent assessment of the fair market value of the properties. The court's finding that Naranjo was able to pay the fine is not clearly erroneous.

Naranjo argues that the fine was improper because the district court never resolved the dispute regarding the value of his real estate properties. There was no dispute for the court to resolve. Since Naranjo failed in his burden to provide credible evidence regarding the value of the properties, the Government's assessment of their value was not properly controverted.

AFFIRMED.