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United States v. Counts

August 23, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
LLOYD JOSEPH COUNTS, III, DEFENDANT.



The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court

SENTENCING MEMORANDUM

I. BACKGROUND OF THE CASE

The defendants Lloyd Counts, Jr., and Lloyd Counts III, distributed marijuana on the Turtle Mountain Indian Reservation since approximately 2002. During that time, Lloyd Counts Jr.'s initial source of supply was Charlie Anderson of Becker County, Minnesota. See PSR ¶¶ 8-12. Anderson and Counts Jr. would acquire and transport 5-10 pounds of marijuana from the Minneapolis area. The two men paid approximately $900 per pound for the marijuana. Often Counts Jr. did not accompany Anderson but would meet him at his residence, acquire the load, and take the drugs back to the reservation for distribution. This arrangement occurred over the course of 1 1/2 years and resulted in the purchase and distribution of approximately 150 pounds of marijuana.

Anderson introduced Counts Jr. to two Mexicans in the Fargo area. From 2004 to 2008, Lloyd Counts Jr. obtained approximately 10 pounds of marijuana per month from these individuals, Gilberto Fernandez-Toscano, a/k/a "Alex," and Javier Guzman-Gonzales, a/k/a "Gordo." Counts Jr. would travel from the Belcourt area to Fargo to obtain marijuana from Alex and Gordo, then return to the reservation to sell the marijuana. Alex and Gordo provided Counts Jr. with a Tracfone cell phone. This phone was used solely for communication regarding drug transactions. The total amount of marijuana acquired by Lloyd Counts Jr. from 2004-2008 was approximately 600 pounds (272 kg).

Sometime in 2008, and largely due to his deteriorating health, Lloyd Counts Jr. turned the drug trafficking business over to his son, Lloyd Counts, III. At that time, Lloyd Counts, III was given the Tracfone (which Alex and Gordo replaced every ninety days), along with the names and numbers of the people to whom Lloyd Counts Jr. had been dealing. Lloyd Counts, III initially reported to law enforcement authorities that he and his father were "partners" in the drug trafficking business for eight years. According to statements made at his change of plea hearing, Lloyd Counts, III started running drugs for his father in March 2003. He would typically acquire and sell 50-100 pounds of marijuana every six weeks. He paid $1,300 per pound and sold it for $2,000 per pound ($1,800 per pound to family members) with an average profit margin of approximately $600 per pound.

The evidence reveals that Lloyd Counts, III transported marijuana from Fargo to the Turtle Mountain Indian Reservation for distribution and stashed it in several different old cars at the Clarence St. Claire residence since 2006. Lloyd Counts, III estimated that he acquired and sold an average of 500 pounds of marijuana per year for eight years. Specifically, he supplied marijuana to the following: Lloyd Counts Jr. - 10 pounds per month for six years (720 lbs); Clifford Counts - 10 pounds per month for two to three years (240-360 lbs); Larry Fourchaine - six pounds per month for four years (288 lbs); Peiri Delorme -three to four pounds per month for two years (72 to 96 lbs); Troy Boser - three to four pounds per month for two years (72-96 lbs); Jason Counts - three to four pounds per month for two to three years (72-144 lbs); Lonnie Nadeau - two to three pounds per month for four to five years (48-180 lbs); Lonnie Azure - three to four pounds per month for one year (36-48 lbs); Richard Morin - two pounds per month for one to two years (24-36 lbs); Kevin Wallette - one to two pounds per month for one to two years (12-48 lbs); Clifford Nadeau - one pound per month for one year (12 lbs); Jimmy Counts - four to six ounces per month for one year (4.5 lbs); and Rocky Demery - 30-40 pounds total.

Lloyd Counts, III also admitted to distributing approximately six pounds of methamphetamine on the reservation during the time frame of the conspiracy. At the change of plea hearing on May 11, 2010, Lloyd Counts, III estimated that during the last year he ran the drug trafficking operation, he sold approximately 500-600 lbs of marijuana.

II. LEGAL DISCUSSION

A. DRUG QUANTITIES

In the Presentence Investigation Report (PSR), the probation officer determined the defendant's drug trafficking activities involved at least 500 pounds of marijuana per year for at least five years (2,500 lbs) which equals a drug amount of 1,134 kg. See PSR ¶ 20. The defendant admitted by his plea that the conspiracy involved 1,000 kg or more of marijuana. The PSR reveals the defendant admitted to distributing six pounds of methamphetamine on the Turtle Mountain Indian Reservation during the time of the conspiracy. The drug equivalent table for methamphetamine is 1 gm of meth = 2 kg of marijuana. See U.S.S.G. § 2D1.1, Application Note 10(E). The 6 lbs of methamphetamine converts to 5,448 kg of marijuana. In accordance with U.S.S.G. § 2D1.1(c)(3), the base offense level is 34 (1,134 kg 5,448 kg = 6,582 kg of marijuana). The Sentencing Guidelines indicate that the base offense level is 34 if the controlled substances and quantities range from at least 3,000 kg but less than 10,000 kg of marijuana. Id.

The Court finds by a preponderance of the evidence that the drug quantity calculations as set forth in the PSR are reasonable, accurate, and conservatively reflect the quantities involved in this drug trafficking conspiracy. The defendant admitted to such drug quantities when he was first interviewed by federal law enforcement officers, namely, FBI Agent Ryan O'Neil, on February 27, 2009.

B. ADJUSTMENT FOR ROLE IN THE OFFENSE

It is well-established that the Government has the burden of proving by a preponderance of the evidence that the aggravating role enhancement is warranted. United States v. Garcia-Hernandez, 530 F.3d 657, 665 (8th Cir. 2008); United States v. Mesner, 377 F.3d 849, 851-52 (8th Cir. 2004). U.S.S.G. § 3B1.1 provides as follows:

Based on the defendant's role in the offense, increase the offense level as follows:

(a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels.

(b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.

(c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels.

U.S.S.G. § 3B1.1 (emphasis in original). The commentary and application notes to Section 3B1.1 further provide that:

1. A "participant" is a person who is criminally responsible for the commission of the offense, but need not have been convicted. A person who is not criminally responsible for the commission of the offense (e.g., an undercover law enforcement officer) is not a participant.

2. To qualify for an adjustment under this section, the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants. An upward departure may be warranted, however, in the case of a defendant who did not organize, lead, manage, or supervise another participant, but who nevertheless exercised management responsibility over the property, assets, or activities of a criminal organization.

3. In assessing whether an organization is "otherwise extensive," all persons involved during the course of the entire offense are to be considered. Thus, a fraud that involved only three participants but used the unknowing services of many outsiders could be considered extensive.

The PSR recommended that Lloyd Counts, III be considered a manager and supervisor and the criminal activity involved five or more participants, or "was otherwise extensive." See PSR ¶ 23. As a result, the offense level was increased by three levels in the PSR. The Government challenges the imposition of a three-level enhancement. Counts challenges any adjustment for a role enhancement. The Government requests the Court find that a four-level increase pursuant to U.S.S.G. § 3B1.1(a) is warranted for Counts's role as an organizer or leader of the criminal activity that involved more than five participants or "was otherwise extensive."

The Court has carefully reviewed the Sentencing Guidelines and particularly U.S.S.G. ยง 3B1.1, and the commentary and application notes to that guideline provision. The Court has also carefully considered all of the factors recommended in Section 3B1.1 which include the exercise of decision-making authority, the nature of the participation in the commission of the offense, recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or ...


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