Unpublished Disposition, 924 F.2d 1063 (9th Cir. 1990)

MEMORANDUM^* 

Carlos Misael Ramos-Mendez appeals from the judgment imposing a sentence of 16 months following his plea of guilty for possession of false identification documents in violation of 18 U.S.C. § 1028(a) (3). Mendez contends that the district court improperly granted upward adjustments of the offense level on the basis of "criminal livelihood" and "more than minimal planning." We affirm.

PERTINENT FACTS

On December 4, 1989, INS agents executed a search warrant for an apartment located at 1801 1/2 12th Place, Los Angeles, California. Evidence seized during the search included numerous false and counterfeit documents and related paraphernalia. Mendez was in the apartment when the officers arrived. He was arrested. On January 29, 1990, Mendez pleaded guilty to knowingly possessing "533 false identification documents, namely 502 blank and counterfeit Social Security Cards and 31 vehicle ownership cards, with intent to use or transfer these documents unlawfully," as charged in Count Two of the indictment.

In the presentence report (PSR), the probation officer determined that the base offense level for Mendez's violation of 18 U.S.C. § 1028(a) (3) is 6. United States Sentencing Commission, Guidelines Manual, Sec. 2F1.1 (Nov. 1990). The probation officer concluded that there was sufficient evidence of "more than minimal planning" to raise the offense level by two points, from 6 to 8. She further recommended that the offense level be increased to 13 based upon evidence of criminal livelihood, pursuant to section 4B1.3.

On April 5, 1990, Mendez's counsel filed a document entitled "Position of Defendant With Respect to Sentencing Factors Filed Under Seal" in which he set forth his disagreement with the conclusions reached by the probation officer. An evidentiary hearing was held on May 7, 1990. The Government and defense counsel stipulated as the areas of dispute concerning the probation officer's findings and conclusions.

Pursuant to this stipulation, it was agreed that if INS officer Jesus Quintanar and Agent Frank Cabibi were called and sworn as witnesses they would testify that the following items were found during the search of the 12th Place apartment on December 4, 1989:

a. A $6,000 cash exchange receipt bearing Mendez's name, dated August 19, 1988, made payable to Miriam Ramos, in El Salvador (Exhibit 1);

b. Nineteen money orders signed by Mendez, each in the amount of $1,000 purchased from El Cairo (Exhibit 3);

c. Twenty-five express mail receipts bearing Mendez's name obtained from a company named El Cairo for items sent to El Salvador (Exhibit 4);

d. Several hundred receipts for money orders dated from February 1988 to December 1989 totaling $90,940. (Exhibit 5);

e. An express mail package addressed to Mendez at 1801 1/2 12th Place, Los Angeles, California, containing hundreds of blank California Department of Motor Vehicles automobile registration forms (Exhibit 6);

f. Rental receipts for 1801 1/2 12th Place, Los Angeles, California, signed by Mendez, dated March 15, 1989, April 15, 1989, and July 15, 1989 (Exhibits 7A-7C); and

g. A box containing personal papers belonging to Mendez. (Exhibit 9).

These items were admitted as evidence.

The Government also stated that Officer Quintanar and Agent Cabibi would testify that $19,793 in cash was found in various locations in the residence and that thousands of false social security, alien registration, and Department of Motor Vehicle cards were found throughout the residence. Furthermore, Agent Cabibi would testify that he has investigated more than one hundred alien-document production cases. Based on his experience, the alien-document facility located at the 12th Place residence was the largest he had ever seen.

Pursuant to the stipulation, the facts recited by the prosecutor were received as the Government's direct evidence, subject to the right of the defendant to cross-examine Officer Quintanar and Agent Cabibi. Mendez's counsel cross-examined each officer.

Mendez testified on his own behalf. He explained that the money for the $6,000 cash exchange receipt came from an insurance settlement for a truck which was stolen from him. Mendez stated further that he purchased the other money orders with earnings from his automobile repair work and compensation for a work-related injury. Mendez also testified that he sent only about $30,000 of his own money to El Salvador. The rest of the money was sent by him on behalf of other people. Mendez admitted receiving the express mail package while he lived at the 12th Place apartment, but claimed that it only contained a letter, not the DMV automobile registration forms.

Mendez also submitted the declarations of his girlfriend and Armando Castenada, a coworker. Both declarations alleged that Mendez resided with them in Inglewood, California, from sometime in September 1989 until December 4, 1989. They also alleged that Mendez traveled to El Salvador from October 19, 1989, to November 22, 1989. Mendez's passport contains entries confirming his absence from the United States between these dates.

In addition, Mendez submitted the declaration of Maria Morelia Ramos, the wife of Mendez's cousin. Ramos alleges that Mendez moved from the apartment at 1801 12th Place in September, 1989, and has not lived there since. Ramos' declaration also alleges that she observed Mendez repair cars. She further alleges that her husband occasionally gave money to Mendez to send to relatives in El Salvador.

The court concluded that the evidence demonstrated that Mendez was deeply involved in the production of forged documents and that he derived his criminal livelihood from this illegal activity. The court found Mendez's testimony that he earned the money that he shipped out of the country "simply unbelievable." The court also found that the evidence of the rent receipts established that Mendez had access to the apartment. The presence of a box of Mendez's personal papers demonstrated that he was more than a casual visitor. The district court calculated that, based on the totality of evidence, "the defendant was using the apartment as a hub for his criminal activity."

The court further determined that Mendez's conduct involved more than minimal planning based upon the extent of the forged document operation conducted at the 12th Place residence. The court relied upon the amount of money that was generated from the operation and the thousands of forged documents found during the search.

After making these findings, the court stated to counsel: "So given all that where does this leave us in regard to sentencing"? The prosecutor replied: "Your honor, I believe that by applying the minimum planning standard, we have a basic offense level of 13 and from that we deduct the two points for acceptance of responsibility that the court has indicated it would give, which brings us to 11. And I believe the defendant is in the criminal category of two, which would leave a range of between 10 and 16 months for purposes of sentence." The court imposed a sentence of 16 months. It did not expressly indicate the basis for its calculation of 16 months.

DISCUSSION

Mendez asserts that the district court erred in enhancing his sentence pursuant to section 4B1.3 of the Sentencing Guidelines for "criminal livelihood." In determining whether the district court properly applied the Sentencing Guidelines, Congress has directed that the Courts of Appeal "shall accept the findings of fact of the district court unless they are clearly erroneous and shall give due deference to the district court's application of the guidelines to the facts." 18 U.S.C. § 3742(e) (4). We have interpreted section 3742(e) (4) to mean that a district court's determination of criminal livelihood should be reviewed under the clearly erroneous standard. United States v. Munster-Ramirez, 888 F.2d 1267, 1269 (9th Cir. 1989), cert. denied, --- U.S. ----, 110 S. Ct. 1951 (1990).

Section 4B1.3 of the Sentencing Guidelines provides: "If the defendant committed an offense as part of a pattern of criminal conduct engaged in as a livelihood, his offense level shall be not less than 13, unless Sec. 3E1.1 (Acceptance of Responsibility) applies, in which event his offense level shall be not less than 11."

The Application Notes to section 4B1.3 provide the following definitions:

1. 'Pattern of criminal conduct' means planned criminal acts occurring over a substantial period of time. Such acts may involve a single course of conduct or independent offenses.

2. 'Engaged in criminal livelihood' means that (1) the defendant derived income from the pattern of criminal conduct that in any twelve-month period exceeded 2,000 times the then existing hourly minimum wage under federal law; and (2) the totality of circumstances shows that such criminal conduct was the defendant's primary occupation in that twelve-month period (e.g., the defendant engaged in criminal conduct rather than regular, legitimate employment; or the defendant's legitimate employment was merely a front for his criminal conduct).

The Government bears the burden of proof when it seeks to increase a defendant's offense level. United States v. Howard, 894 F.2d 1085, 1090 (9th Cir. 1990). The Government must meet the preponderance of the evidence standard. Id.

Mendez concedes that the evidence seized from the 12th Place apartment indicates that a significant false document production operation existed at the time of the search. Mendez contends, however, that the Government failed to prove facts by a preponderance of the evidence connecting him to this operation for a substantial period of time.

The evidence presented by the Government provided a sufficient nexus between Mendez and the counterfeiting activities that occurred at the apartment to support the district court's findings. The evidence shows that his participation spanned a substantial period of time.

"Substantial period of time" is not defined in the Sentencing Guidelines. We have not previously established how much time is considered to be "substantial." However, the Eighth and Tenth Circuits have addressed this issue. In United States v. Hearrin, 892 F.2d 756 (8th Cir. 1990), the Eighth Circuit held that an extensive mail fraud operation which continued for eight months occurred over a substantial period of time. Id. at 760. In United States v. Irvin, 906 F.2d 1424 (10th Cir. 1990), the Tenth Circuit interpreted a "substantial period of time" to mean "more than a short, quick, one-time offense." Id. at 1426. The Irvin court held that the criminal defendant's fraudulent use of credit cards for five to seven months constituted criminal acts occurring over a substantial period of time. Id.

The items seized from the 12th Place apartment reflect a very professional and sophisticated counterfeiting operation. The court could have logically inferred from all the circumstances that it functioned for a substantial period of time. Mendez's connection with this operation over a substantial period of time is reflected in the hundreds of cash receipts in his name totaling over $90,000, which he sent to El Salvador between February 1988 and December 1989. As discussed below, Mendez's income from his legitimate employment could not account for this amount of cash. Mendez's signature on the money order receipts found in the apartment is strong circumstantial evidence that he was deriving income from the illegal counterfeiting operation for almost two years.

Furthermore, Mendez's personal papers found at the 12th Place apartment indicate that he was more than just a casual visitor on the date of the search. The officers found rental receipts signed by Mendez for the apartment for the months of March 1989, April 1989, and August 1989. This evidence shows that Mendez had paid the rent for the location of the counterfeiting paraphernalia nine months prior to the date of his arrest. Moreover, the express mail package containing hundreds of blank DMV registration forms and addressed to Mendez at the 12th Place apartment had a delivery date of June 4, 1989, six months prior to the search of the apartment. The district court judge discredited Mendez's explanation that the package only contained a letter when he received it. Instead, the court noted that the hundreds of DMV documents "fit rather neatly into this envelope."

This evidence was sufficient to support an inference that Mendez was involved in counterfeiting identification documents for a period of time between six months to almost two years prior to his arrest. This would satisfy the requirement that the counterfeiting activity occurred over a substantial period of time. The district court's finding that Mendez's involvement in the operation spanned a substantial period of time was supported by sufficient facts that would persuade a rational judge by a preponderance of the evidence.

Mendez contends that the Government did not present sufficient facts to persuade a rational judge by a preponderance of the evidence that Mendez derived income from criminal activity sufficient to sustain an upward departure from the Sentencing Guidelines for criminal livelihood. This contention lacks merit.

In order to justify an enhancement for criminal livelihood, the income derived from the operation must exceed 2,000 times the hourly minimum wage in a 12 month period. U.S.S.G. Sec. 4B1.3. The hourly minimum wage under Federal law ($3.35 per hour on the date the appeal was filed) times 2,000 is $6,700. Almost $20,000 in cash was seized during the search of the apartment. A $6,000 cash exchange receipt bearing Mendez's name was also seized. Additionally, the record reveals that over $90,000 was sent to El Salvador.

Mendez provided evidence of an insurance settlement which he claimed accounted for a portion of the funds in question. Mendez claimed that the remainder of the money was obtained by him through his legitimate automobile repair business and funds he received from other persons in the United States to be sent to relatives in El Salvador. However, the pay stubs Mendez submitted reflected only minimal payments from 1985 and 1986. This evidence impeached Mendez's explanation.

Mendez further contends that the Government did not produce any evidence to show by a preponderance that the criminal activity was his "primary occupation." This contention also lacks merit.

The evidence that Mendez had a legitimate occupation was insufficient to demonstrate that car repairing was his primary occupation, particularly in light of the proof that he transmitted over $90,000 to El Salvador within 22 months of his arrest.

There was sufficient evidence for the district court to believe that it was more likely than not that the income Mendez derived from the counterfeiting scheme exceeded the statutory minimum and that the criminal activity constituted his "primary occupation." Therefore, we conclude that the district court did not err in enhancing Mendez's sentence pursuant to section 4B1.3 of the Sentencing Guidelines for "criminal livelihood."

Since we conclude that the upward adjustment to Mendez's base offense level for criminal livelihood was not clearly erroneous, we need not reach the question whether the court's finding that Mendez's conduct demonstrated "more than minimal planning" was clearly erroneous. A two point adjustment for "more than minimal planning" would raise Mendez's base offense level from 6 to 8. As discussed above, section 4B1.3 requires a minimum offense level of 13, if the court finds criminal livelihood. The court found that the record supported a finding of criminal livelihood and "more than minimal planning," but it only raised Mendez's offense level to 13. Therefore, Mendez was not harmed by the court's finding of "more than minimal planning."

CONCLUSION

The district court's finding that Mendez possessed false identification documents as part of a pattern of criminal conduct engaged in as a livelihood was not clearly erroneous. The record reveals that Mendez was involved in the false documentation operation for a substantial period of time. It also reveals that the income he derived from the operation exceeded the statutory minimum required to fall within the purview of the criminal livelihood sentencing enhancement category. Since we affirm the district court's finding of criminal livelihood, the finding of "more than minimal planning" did not harm Mendez. Therefore, we do not reach that issue.

AFFIRMED.