United States v. Steven Ryan Michael Sholly

Opinion

Case: 18-11823 Date Filed: 08/27/2019 Page: 1 of 13

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 18-11823 ________________________

D.C. Docket No. 3:17-cr-00074-RV-8

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

versus

STEVEN RYAN MICHAEL SHOLLY,

Defendant - Appellant.

________________________

Appeal from the United States District Court for the Northern District of Florida ________________________

(August 27, 2019)

Before MARTIN, ROSENBAUM, and BOGGS,* Circuit Judges.

PER CURIAM:

* Honorable Danny J. Boggs, United States Circuit Judge for the Sixth Circuit, sitting by designation. Case: 18-11823 Date Filed: 08/27/2019 Page: 2 of 13

Appellant Steven Sholly pled guilty to participating in a marijuana-

distribution conspiracy. See 21 U.S.C. § 841(a)(1). At sentencing, a government

witness testified that one of Sholly’s coconspirators had told him that Sholly had

received weekly shipments of six pounds of marijuana each between 2013 and April

2015, which amounted to over 100 kilograms of marijuana over the course of the

conspiracy. Based in part on that hearsay evidence, the district court sentenced

Sholly to 59 months in prison.

On appeal, Sholly argues, as he did before the district court, that the district

court clearly erred when it relied on his coconspirator’s hearsay statement and that

the court’s conclusion that he possessed over 100 kilograms of marijuana was

speculative. After careful review, we vacate his sentence and remand his case to the

district court for resentencing.

I.

A.

As part of an investigation into a marijuana-distribution conspiracy, agents of

the Drug Enforcement Administration (“DEA”) came to believe that Charles

Sindylek was shipping marijuana from California to Sholly and others in Florida for

distribution. In March and April 2015, agents made three “trash pulls” at Sholly’s

house and discovered “an empty FedEx box, numerous empty heat-sealed plastic

bags containing marijuana residue and smelling of marijuana, plus numerous dryer

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sheets.” Agents obtained a search warrant for Sholly’s house and executed it on

April 28, 2015. In Sholly’s house, they found the following:

numerous empty heat-sealed plastic bags containing marijuana residue and smelling of marijuana; three dog beds; an empty cardboard box shipped via FedEx and addressed to Lauren Rector; plastic baggies; plastic wrap; gloves; a scale; various types of smoking devices; approximately 1.282 total kilograms of marijuana; and a safe in Sholly’s bedroom that contained $18,683 in cash; Sholly’s wallet; approximately 49.9 grams of cocaine; and a .45-caliber Hi-Point pistol.

Sholly confirmed that those items belonged to him. Then he “immediately agreed

to cooperate with the DEA” and said that Sindylek had moved to California about

six months before and shipped marijuana to him, Lauren Rector, and Brett Brownell,

six pounds at a time, inside of dog beds.

Sindylek spoke with investigators and characterized himself as a “middle

man” between the marijuana source and the buyers in Florida, including Sholly.

According to Sindylek’s statement, the buyer would usually send him a text message

with “an address and the desired amount of marijuana,” and the source would pack

and ship the requested amount to the buyer’s specified address. Sindylek would then

coordinate the buyer’s payment, which he routed through various friends’ bank

accounts to avoid drawing too much attention to the scheme.

Sindylek also described to agents Sholly’s marijuana orders in particular:

Sholly’s packages of marijuana were usually sent to an address in Pace, Florida, via Fed Ex to his neighbor,

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Lauren Rector’s residence. Sindylek said Sholly paid $2,400 per pound of marijuana and would get six pounds per package. Sindylek stated Sholly received one package of marijuana per week, t[wo] packages at the most, until law enforcement kicked in his door. He further told agents that Sholly continued to buy marijuana from another

coconspirator after the DEA searched his house.

Agents “analyzed FedEx and UPS records” for packages shipped to addresses

“known to be used by defendants to accept packages of marijuana from addresses in

California that were multiple pounds in weight.” Of the 266 packages that met that

criteria, 12 were sent to “addresses controlled by Sholly.” And, agents said,

“[a]ccording to multiple interviews, these packages contained at least 6 pounds of

marijuana each.”

On July 18, 2017, a grand jury charged Sholly and seven coconspirators with

conspiracy to possess marijuana with the intent to distribute it between January 1,

2014, and June 20, 2017, in violation of 21 U.S.C. §§ 841(a)(1) and 846. Sholly’s

coconspirators were also charged with money-laundering offenses.

B.

On October 4, 2017, Sholly pled guilty to the conspiracy charge. The pre-

sentence investigation (“PSI”) recounted the agents’ investigation into the

marijuana-distribution conspiracy, including the trash pulls at Sholly’s residence,

the results of the search warrant executed there, Sindylek’s statement to the agents

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about the frequency of Sholly’s orders, and the FedEx records of shipments to

Sholly. Based on the investigation, the PSI reported that Sholly had received 68

packages containing six pounds of marijuana each, and had possessed 185.06

kilograms of marijuana in total.

That corresponded to a base offense level of 24, since the offense as

represented in the PSI involved at least 100 kilograms of marijuana, U.S.S.G.

§2D1.1(a)(5). The PSI also recommended a two-level enhancement for Sholly’s

possession of a firearm, U.S.S.G. § 2D1.1(b)(1), and a two-level reduction for his

acceptance of responsibility, U.S.S.G. § 3E1.1(a). In combination with Sholly’s

criminal-history category of II, the resulting recommended sentencing guidelines

range was 57 to 71 months.

Sholly objected to the PSI’s calculation of the total weight of marijuana he

had possessed. On April 18, 2018, the parties appeared before Judge Vinson to

resolve that objection, among others, and for sentencing. As evidence of the weight

of drugs attributable to Sholly, the Government presented the testimony of Agent

Benjamin Murphy. Murphy described the agents’ investigation, including the trash

pulls at Sholly’s home, the execution of the search warrant there, the FedEx records,

and Sindylek’s statement to the agents that Sholly had received one six-pound

package of marijuana each week, “sometimes two,” until April 2015. Murphy

conceded that he did not know exactly when Sholly began receiving packages of

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marijuana and that he did not have evidence of Sholly’s text messages with Sindylek

or bank records showing transfers of money in exchange for the shipments.

Defense counsel argued that Sindylek’s hearsay statement was not reliable.

Counsel pointed out that the shipping records relating to Johnson and other

coconspirators closely corroborated the government’s estimation of drugs

attributable to them. By contrast, counsel argued, the records relating to Sholly did

not “mesh” with the Government’s estimation of drugs attributable to him. Those

records, which the DEA received from FedEx on May 7, 2015, reflected only 12

total shipments, including deliveries on April 3, 17, and 23, 2015, shortly before

agents executed the search warrant. Instead, the government based its numbers on

Sindylek’s “very vague statements” about shipments to Sholly. Defense counsel

also pointed to how the government could not pinpoint when the shipments began

and said that Sholly had had fewer contacts with Sindylek than the coconspirators

had. Counsel asked the court to use the FedEx records alone in calculating the

weight of drugs attributable to Sholly.

For the government’s part, the prosecutor asked the court to credit Murphy’s

recitation of Sindylek’s hearsay statement and find that Sholly had received weekly

shipments of six-pound packages of marijuana between some time in 2013 and

continuing until agents executed the search warrant in March 2017. The prosecutor

argued that the FedEx records were incomplete because the government did not have

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all of the addresses associated with Sholly and because FedEx records, which the

government received on May 7, 2015, typically included only two years’ worth of

information. And, the prosecutor urged, Sindylek’s statement was reliable in light

of the other evidence of the extent of Sholly’s involvement, such as how the agents

had found evidence of marijuana distribution in their trash pulls and had found three

dog beds, which were used to ship marijuana, in Sholly’s house when they executed

the search warrant. That evidence, the prosecutor said, did not “jive” with Sholly’s

contention that the FedEx records must have been complete.

Judge Vinson overruled Sholly’s objection. He reasoned,

the [g]overnment’s estimate is based upon some assumptions, but I think those assumptions are reasonable in light of all the evidence in this case, particularly since, if you add in the deliveries that took place after April of 2015, you add another, let’s just say, 20 pounds or so to that, you’ve still got—you’ve still got more than 100 kilograms. So even if you try to get more precise, then— measuring quantities of drugs is never a precise thing that you can do. It has to be estimated, and I think the [g]overnment has come up with evidence that it shows by a preponderance of the evidence that that is an accurate estimate.

Applying the Sentencing Guidelines, the district court concluded that Sholly’s

recommended sentence range was 57-71 months. After hearing arguments on

Sholly’s sentence, the court imposed a sentence of 59 months in prison. In

pronouncing Sholly’s sentence, the court stated that a different quantity of drugs

would have affected its ultimate sentence.

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This appeal followed.

II.

We review for clear error a district court’s factual determination of the

quantity of drugs attributable to a defendant. United States v. Rodriguez, 398 F.3d

1291, 1296 (11th Cir. 2005). We will not find clear error unless we are left with a

“definite and firm conviction that a mistake has been committed.” United States v.

Rothenberg, 610 F.3d 621, 624 (11th Cir. 2010) (quotation marks omitted).

III.

Applying our precedent, we must conclude that the government did not meet

its burden to prove that Sholly had possessed at least 100 kilograms of marijuana in

the course of the conspiracy. Accordingly, we vacate Sholly’s sentence and remand

his case for resentencing.

To calculate the base offense level for drug distribution, a court must

determine “the quantity of illegal drugs properly attributable to” the defendant.

United States v. Frazier, 89 F.3d 1501, 1506 (11th Cir. 1996). “When the amount

of the drugs [actually] seized does not reflect the scale of the offense, the district

court [instead] must approximate the drug quantity attributable to the defendant.”

United States v. Dixon, 901 F.3d 1322, 1349 (11th Cir. 2018) (citation and quotation

marks omitted). The court’s approximation “may rely on evidence demonstrating

the average frequency and amount of a defendant’s drug sales over a given period

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of time.” United States v. Almedina, 686 F.3d 1312, 1316 (11th Cir. 2012) (citing

Frazier, 89 F.3d at 1506); see U.S.S.G. § 2D1.1 cmt. n.5 (2018). The court’s

approximation “‘may be based on fair, accurate, and conservative estimates of the

quantity of drugs attributable to a defendant, [but it] cannot be based on calculations

of drug quantities that are merely speculative.’” Almedina, 686 F.3d at 1316

(quoting United States v. Zapata, 139 F.3d 1355, 1359 (11th Cir. 1998)).

When a defendant challenges one of the factual bases of his sentence, the

government bears the burden of establishing the disputed fact by a preponderance of

the evidence. United States v. Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997). We

have explained that that burden must be satisfied with reliable and specific evidence.

Id. Moreover, we have emphasized that “[i]t is the district court’s duty to ensure

that the Government carries this burden by presenting reliable and specific

evidence.” United States v. Martinez, 584 F.3d 1022, 1027 (11th Cir. 2009)

(quotation marks omitted).

In determining whether the government satisfied its burden here, we consider

our precedent concerning hearsay evidence. Under that precedent, a sentencing

court may rely on hearsay evidence only if it meets certain requirements. We have

explained that, in general, the evidence must have “sufficient indicia of reliability,”

the sentencing court must make “explicit findings of fact as to credibility,” and the

defendant must have “an opportunity to rebut the evidence.” United States v.

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Ghertler, 605 F.3d 1256, 1269 (11th Cir. 2010) (quotation marks omitted).

Nevertheless, where a district court does not make an explicit finding about the

reliability of hearsay evidence, “the absence of such findings does not necessarily

require reversal or remand where the reliability of the statements is apparent from

the record.” United States v. Gordon, 231 F.3d 750, 761 (11th Cir. 2000).

Reliability of hearsay evidence “must be determined on a case by case basis.” United

States v. Lee, 68 F.3d 1267, 1275 (11th Cir. 1995).

In Lee, the sentencing court attributed a large amount of drugs to the defendant

based on the testimony of a DEA agent, who recounted the statements of the

defendant’s coconspirator during an interview. Lee 68 F.3d at 1275. The court did

not make an explicit finding about the reliability of the hearsay statement. Id. On

appeal, the government argued that the record contained sufficient indicia of the

hearsay statement’s reliability because the statement had been against the

coconspirator’s penal interest. Id. at 1275-76. We rejected that argument, vacated

the defendant’s sentence, and remanded his case for resentencing. Id. at 1276.

Here, the district court clearly erred when it relied on Murphy’s recitation of

Sindylek’s hearsay statement without making an explicit finding about the reliability

of Sindylek’s statement and without its reliability being “apparent from the record.”

Gordon, 231 F.3d at 761. Also, as in Lee, this record does not contain sufficient

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indicia of the hearsay statement’s reliability, so we must vacate Sholly’s sentence

and remand his case to the district court for resentencing.

In support of the reliability of Sindylek’s statement, the government points to

several aspects of the investigation that it says corroborate its content. It points to

the March and April 2015 trash pulls, during which the DEA found numerous empty

heat-sealed plastic bags. It further relies on the April 28, 2015, search of Sholly’s

home, when agents found three dog beds used to ship marijuana and 1.28 kilograms

of the drug. That evidence, the government asserts, in combination with Sholly’s

admission to agents that he had ordered marijuana from Sindylek as early as six

months before the search of his house, corroborated Sindylek’s statement that Sholly

ordered one six-pound package of marijuana every week. On its own, of course,

evidence of Sholly’s drug possession at one point in time in 2015 and admission of

some prior orders does not corroborate Sindylek’s hearsay statement that Sholly

received weekly shipments of marijuana.

So the government argues that the volume of drugs and evidence of drug

shipments found during the investigation as a whole demonstrate that the FedEx

records must have been incomplete. The government suggests that complete records

would corroborate Sindylek’s claim of weekly shipments. But in fact, the FedEx

records are perfectly consistent with the volume of drugs and evidence of drug

shipment found during the investigation. The FedEx records showed that Sholly

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received deliveries on March 27, April 3, April 17, and April 23, 2015, among other

dates. Those four shipments arrived during the same time frame as the DEA’s March

and April trash pulls, and occurred shortly before the search of Sholly’s home on

April 28, 2015, during which agents found three dog beds used to ship marijuana.

The volume of drugs and drug-shipment materials found during the search, then,

does not contradict the accuracy of the FedEx records: those records reflected three

shipments in April 2015, and a search of Sholly’s home at the end of that month

revealed three empty dog beds (one per shipment) used to ship the drugs. So the

volume of drugs and drug-shipment materials do not corroborate Sindylek’s hearsay

statement alleging shipments in excess of those documented in the FedEx records.

Next, the government contends that the records were incomplete because it

believed that it did not know all of Sholly’s addresses, so it was unable to request

records relating to those other addresses. But the problem for the government is that

it bears the burden of proof here, and it identifies no evidence that suggested that

Sholly received shipments of marijuana at other addresses, so its argument is purely

speculative.

In sum, the reliability of Sindylek’s hearsay statement is not apparent on this

record, so it was clear error for the district court to rely on it in calculating the weight

of marijuana that Sholly possessed during the course of the conspiracy.

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IV.

For the foregoing reasons, we VACATE Sholly’s sentence and REMAND

his case to the sentencing court for resentencing.

VACATED AND REMANDED.