United States v. McHan ( 1996 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 94-5464
CHARLES WILLIAM MCHAN,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v. No. 94-5657
CHARLES WILLIAM MCHAN,
Defendant-Appellee.
Appeals from the United States District Court
for the Western District of North Carolina, at Bryson City.
Richard L. Voorhees, Chief District Judge.
(CR-90-41-B)
Argued: January 29, 1996
Decided: December 4, 1996
Before HALL, NIEMEYER, and LUTTIG, Circuit Judges.
_________________________________________________________________
Affirmed in part, vacated in part, and remanded by published opinion.
Judge Niemeyer wrote the opinion, in which Judge Luttig joined.
Judge Hall wrote an opinion concurring in part and dissenting in part.
_________________________________________________________________
COUNSEL
ARGUED: Sean Patrick Devereux, WHALEN, HAY, PITTS,
HUGENSCHMIDT, MASTER, DEVEREUX & BELSER, P.A.,
Asheville, North Carolina, for Appellant. B. Frederic Williams, Jr.,
Assistant United States Attorney, Kenneth Davis Bell, OFFICE OF
THE UNITED STATES ATTORNEY, Charlotte, North Carolina, for
Appellee. ON BRIEF: Mark T. Calloway, United States Attorney,
Charlotte, North Carolina, for Appellee.
_________________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
After pleading guilty in 1988 to conspiring to distribute marijuana,
Charles William McHan was convicted again in 1992 of participating
in another marijuana distribution conspiracy, operating a continuing
criminal enterprise, and committing various narcotics and tax
offenses. The district court sentenced McHan to 150 months impris-
onment and ordered him to forfeit $395,670 in proceeds from his drug
operations.
On appeal from his 1992 conviction, McHan contends that the dis-
trict court committed reversible error (1) in denying his motions to
quash his indictment on transactional and use immunity grounds; (2)
in denying his motion to dismiss various counts of his indictment on
double jeopardy grounds; and (3) in admitting at his trial the grand
jury testimony of a cooperating co-conspirator who had died before
trial. On its cross-appeal of McHan's sentence, the government con-
tends that the district court erred (1) in departing downward under
U.S.S.G. § 5G1.3 on the basis of McHan's 1988 sentence even though
McHan had completed serving that sentence by the time of his sen-
tencing in this case, and (2) in deducting from McHan's forfeitable
drug proceeds the costs of his drug operations as well as one-half of
the proceeds received by a drug joint venture of which McHan was
a one-half partner.
Finding no error in McHan's 1992 prosecution, we affirm his con-
viction. But because we conclude that the district court abused its dis-
2
cretion in departing downward to credit McHan for his discharged
sentence and erred in deducting from the amount of McHan's crimi-
nal forfeiture both the costs of his drug operations and one-half of his
drug partnership's revenues, we vacate McHan's sentence and
remand this case for resentencing.
I
On May 3, 1988, Charles McHan was arrested while attempting to
purchase 200 pounds of marijuana from an undercover government
agent, and he and others were indicted for conspiring to possess with
the intent to distribute 200 pounds of marijuana, in violation of 21
U.S.C. § 846. McHan pled guilty, and the court sentenced him to 52
months imprisonment.
Contemporaneously with McHan's guilty plea, Paul Cunningham,
an indicted co-conspirator, entered into a plea agreement with the
government, promising to testify truthfully in any proceedings later
designated by the United States. At that time, the government knew
that Cunningham was suffering from advanced emphysema and was
not expected to live more than two years. To preserve Cunningham's
testimony, the government brought him before a federal grand jury in
October 1988, where he testified about, inter alia, McHan's involve-
ment in both the 1988 conspiracy and earlier marijuana dealings.
Cunningham died less than five months later.
When McHan later learned that the government was considering
using his conspiracy plea as a predicate offense for a continuing crim-
inal enterprise (CCE) charge against him, he attempted to withdraw
his 1988 guilty plea. The district court, however, denied McHan's
motion. On appeal of his 1988 conviction, we affirmed the district
court's refusal to allow McHan to withdraw his guilty plea, but we
remanded the case for resentencing because the court had erroneously
granted McHan a downward departure "in recognition of his strong
community ties and substantial charitable contributions." United
States v. McHan, 920 F.2d 244, 245 (4th Cir. 1990) (McHan I). The
district court resentenced McHan in March 1991 to 63 months impris-
onment.
Following resentencing, the government obtained in rem civil for-
feitures of two of McHan's automobiles and McHan's interest in a
3
35-acre property. And we affirmed those forfeitures with an unpub-
lished, per curiam opinion. United States v. 35 Acres, No. 90-7376,
940 F.2d 654 (4th Cir. Aug. 15, 1991) (Table) (McHan II).
Beginning in September 1989, during litigation over his attempt to
withdraw his 1988 plea, McHan began negotiating a cooperation
agreement with the government. When McHan and his attorney, Mark
Kadish, met with Assistant United States Attorney (AUSA) Max Cog-
burn on January 16, 1990, to discuss McHan's potential cooperation,
Cogburn questioned McHan about his and others' drug-related activi-
ties. Then, on February 2, 1990, two weeks after his initial meeting
with Cogburn, McHan submitted to an interview without his counsel
by State Bureau of Investigation (SBI) Agent Tom Frye and Federal
Bureau of Investigation (FBI) Agent Joe Gilson. No transcript was
made of either the January or February interviews.
In March 1990, McHan was indicted in this case for distributing
and conspiring to distribute marijuana. Following indictment, his new
attorney, Sean Devereux, not only wrote to AUSA Cogburn maintain-
ing that McHan had reached an oral agreement with the government
in January 1990 that precluded McHan's indictment, but also filed
two motions to quash the indictment, one asserting transactional
immunity and the other, use immunity. Nevertheless, Devereux also
notified the government of McHan's continued availability for ques-
tioning and a polygraph examination.
While the parties "agreed to disagree" about the existence of a non-
prosecution agreement, the United States further availed itself of
McHan's cooperation in July 1990. FBI Agent Frye and an Internal
Revenue Service (IRS) agent questioned McHan on July 17, 1990,
and two IRS agents questioned him on July 25, 1990. Sean Devereux
attended both debriefing sessions, and a court reporter transcribed the
proceedings.
The grand jury returned a superseding 17-count indictment against
McHan in September 1990. Count 1 charged that from November
1984 to November 1986 McHan conspired to possess with the intent
to distribute and to distribute more than 50 kilograms of marijuana,
in violation of 21 U.S.C. § 846. Counts 2-12 alleged various substan-
tive drug offenses during the summer of 1985, in violation of 21
4
U.S.C. § 841(a)(1) and 18 U.S.C. §§ 2 and 545. Counts 13-15 alleged
that McHan had filed false income tax returns from 1985 through
1987, in violation of 26 U.S.C. § 7206(1). Count 16 charged McHan
with operating a CCE by "doing, causing, facilitating, and aiding and
abetting the importation, possession with intent to distribute, and dis-
tribution of marijuana" from November 1984 to May 1988, in viola-
tion of 21 U.S.C. § 848. And Count 17 sought a forfeiture under § 853
of any property, including $1,830,870 in currency, that McHan had
either "obtained directly or indirectly as a result of" or "used or
intended to . . . use[ ] . . . in any manner or part, to commit, or to facil-
itate the commission of the felony drug violations charged in the
Superseding Indictment."
McHan refiled his motions to quash on immunity grounds. After an
evidentiary hearing before a magistrate judge, the judge made find-
ings and recommended denial of McHan's motion asserting transac-
tional immunity. The district court adopted the recommendation.
Upon McHan's request, the district court deferred ruling on McHan's
second motion, which asserted use or derivative use immunity, until
the presentation of evidence at trial. Trial commenced in March 1991.
Shortly after trial began, McHan reached a plea agreement with the
government, which the district court accepted. McHan's wife, how-
ever, refused to forfeit certain property as required by the agreement,
and the court rescheduled McHan's trial to begin again in December
1991.
As the trial began for the second time, McHan filed motions to dis-
miss his superseding indictment as violative of the Fifth Amend-
ment's Double Jeopardy Clause. The district court denied McHan's
motion, and on McHan's interlocutory appeal, we affirmed, holding
(1) that McHan's 1984-86 conspiracy constituted"a separate and dis-
tinct offense from the 1988 conspiracy" and (2) that "McHan's partic-
ipation in each of the conspiracies, even though alleged to be pred-
icate acts of a [CCE], constitute[d] separate offenses" from the CCE
offense charged. See United States v. McHan, 966 F.2d 134, 136 (4th
Cir. 1992) (McHan III).
McHan's third trial began on July 20, 1992. On the first day of
trial, McHan announced his decision to plead guilty to Counts 2-7 of
5
the superseding indictment, charging him with possessing, distribut-
ing, and aiding and abetting the possession and distribution of mari-
juana in April, July, and August, 1985. During the trial on the
remaining counts (except Count 17 seeking forfeiture), the govern-
ment read Paul Cunningham's grand jury testimony into the record
over McHan's objection. The jury convicted McHan of Counts 1 and
8-16.
In his post-trial motions for judgments of acquittal, McHan
renewed his double jeopardy challenges, asserting that his trial had
developed a fuller evidentiary record than was available to the trial
court when it denied his motions earlier. The district court denied
those motions. McHan also filed a post-trial motion in December
1993 for a hearing under Kastigar v. United States, 406 U.S. 441(1972), on the government's "direct or derivative use" of information
that McHan had provided during his February and July, 1990 debrief-
ings. Following a separate hearing on the motion, the district court
also denied it.
After McHan waived his right to a jury trial on Count 17, the for-
feiture count, the court conducted a bench trial, beginning in August
1992. At that trial, the United States sought forfeiture of the currency
McHan had received in the deals that formed the basis for the other
counts in his indictment. At the conclusion of trial, the district court
ordered McHan to forfeit $395,670. Based on the evidence presented,
the court found that from the marijuana sales McHan had conducted
either individually or together with Paul Cunningham, McHan had
received $1,489,350. The court then deducted from that sum (1)
$857,030, representing the total amount that McHan had expended to
purchase and transport the marijuana he sold, and (2) $236,650, repre-
senting Cunningham's one-half share of receipts from the McHan-
Cunningham drug partnership.
At McHan's sentencing on June 10, 1994, the district court calcu-
lated McHan's base offense level at 34 and his criminal history cate-
gory at III, calling for a sentencing range of 188-235 months
imprisonment. But because, in December 1993, McHan had com-
pleted serving the 63-month sentence on his 1988 conviction, the
court granted McHan's motion for a downward departure of 56
months to credit McHan for the time he actually served, explaining
6
that "the guidelines as drafted did not contemplate a situation where
the defendant had already served a sentence for some of the relevant
conduct." The court then sentenced McHan to 150 months imprison-
ment, a sentence towards the middle of the adjusted guideline range.
McHan has appealed to this court, challenging his conviction, and
the government has cross-appealed McHan's sentence. For the rea-
sons that follow, we affirm McHan's conviction but remand this case
for resentencing.
II
McHan contends first that the district court erred in denying his
motions to quash his indictment because the government violated the
transactional and use, or derivative use, immunity it had given him.
Because we conclude that the district court did not clearly err in find-
ing that the parties' agreement provided McHan with use and deriva-
tive use, but not transactional, immunity and that the government did
not violate the use or derivative use immunity, we affirm the court's
denial of McHan's motions.
A
In his transactional immunity argument, McHan contends that by
pursuing the instant indictment against him, the government violated
(1) the parties' express oral agreement that McHan would not be pros-
ecuted further if he cooperated with government agents; (2) the
implied non-prosecution agreement that AUSA Cogburn accepted
when he opted to debrief McHan despite his awareness that McHan's
counsel insisted on transactional immunity for his client; and (3)
McHan's "equitable immunity" that arose from his good faith, reason-
able reliance on the government's conduct indicating"that, if he kept
his part of the bargain, he would not be punished further." The gov-
ernment responds that it never offered McHan a non-prosecution
agreement and that McHan submitted to debriefing merely "in hopes
this would lead to an agreement." Alternatively, the government
maintains that even if it did accord McHan transactional immunity,
McHan forfeited that immunity by lying about his criminal conduct
during his debriefings.
7
Agreements to exchange cooperation for transactional immunity
are governed by traditional principles of contract law, United States
v. Thompson, 25 F.3d 1558, 1562 (11th Cir. 1994); United States v.
Liranzo, 944 F.2d 73, 77 (2d Cir. 1991); see also Santobello v. New
York, 404 U.S. 257, 262 (1971) (defendant entitled to enforcement of
bargained-for plea agreement), and, therefore, may be express or
implied. While a contract is made when the parties verbally express
their mutual assent to its essential terms, it may also be implied when
the parties' conduct manifests their agreement. See 1 Restatement
(Second) of Contracts § 19 (1979). Under the concept of "equitable
immunity," moreover, courts may enforce informal grants of transac-
tional immunity where:
(1) an agreement was made; (2) the defendant has per-
formed on his side; and (3) the subsequent prosecution is
directly related to offenses in which the defendant, pursuant
to the agreement, either assisted with the investigation or
testified for the government.
Rowe v. Griffin, 676 F.2d 524, 527-28 (11th Cir. 1982); see also
United States v. Carter, 454 F.2d 426, 427-28 (4th Cir. 1972) (en
banc) (government bound by promise of immunity when defendant
incriminated himself in reliance on the promise). Accordingly, to suc-
ceed on his transactional immunity argument, however it is stated,
McHan must demonstrate at least a meeting of the minds that the gov-
ernment would refrain from further prosecuting him in exchange for
his cooperation.
At the November 1990 hearing on McHan's transactional immu-
nity claim, Max Kadish, McHan's former counsel, testified that an
agreement was reached regarding disposition of all pending litigation,
including a pending forfeiture action and a pending appeal on the
1988 conviction; cooperation by McHan; and immunity from further
prosecution. In reaching agreement he testified that he had told
AUSA Cogburn that McHan would not submit to debriefing unless
the government guaranteed that there "wouldn't be any further crimi-
nal prosecution." Kadish also stated that he and McHan had decided
on that position together and that he understood Cogburn to acquiesce
in their conditions. Kadish admitted, however, that the alleged non-
prosecution agreement was never memorialized "in any kind of docu-
8
ment," and that he could not remember essential terms of the alleged
agreement, including the length of sentence McHan would receive on
the pending 1988 prosecution, or when the government agreed to
those terms. Moreover, in response to Mr. Cogburn's inquiry on
cross-examination as to whether it "would . . . be accurate to say that
the only real agreement that occurred between [Kadish] and [Cog-
burn] at that time with regard to any specifics was that nothing that
Mr. McHan said during the debriefing would be used against him,"
(emphasis added), Kadish conceded, "[T]hat was very clear. Right."
Although AUSA Cogburn understood that use immunity would be
applied to information McHan furnished the government during
debriefings, Cogburn testified that the government did not contem-
plate a "promise not to prosecute." He explained that he told Kadish
that they could "probably come to some sort of agreement at some
point about Mr. McHan['s] . . . sentenc[e]," but insisted that he "was
unwilling to say that [the government] would not prosecute Mr.
McHan again on any other charges, although that's what Mr. Kadish
wanted."
After the hearing, the magistrate judge recommended denying
McHan's motion to quash the superseding indictment based on a
transactional immunity agreement. The judge concluded that while
the government's evidence of what had transpired was"highly per-
suasive and credible," McHan's version of events was implausible. It
"stretch[ed] the bounds of reasonableness to infer" that the
government--despite its general practice in that district of reducing
all agreements to writings signed by the parties--"would jeopardize
its interest in assets totaling over $1,000,000 and felony prosecutions"
with an oral agreement. And it was "also difficult [for the magistrate
judge] to accept as true . . . that the most experienced prosecutor in
th[e] district would jeopardize his career by compromising matters he
had no approval to compromise" and that "a seasoned criminal attor-
ney would rely on a `gentleman's agreement' where his client's lib-
erty and the security of his family [were] at stake."
Reviewing the magistrate judge's recommendation de novo, the
district court adopted his proposed findings of fact and conclusions of
law. The court believed it an "inescapable conclusion . . . that there
was no agreement between defense counsel Mark Kadish and Assis-
9
tant United States Attorney Max Cogburn." Based on the record evi-
dence, we cannot conclude that the district court committed clear
error in finding that McHan and the government did not reach agree-
ment that included a promise not to prosecute.
B
While the parties disagree about whether they reached a non-
prosecution agreement, they do agree that they had entered into an
agreement for McHan's oral cooperation in exchange for use immu-
nity. While the complete terms of that agreement are contested, it is
undisputed that McHan agreed to provide truthful information during
debriefing sessions and that the United States agreed to refrain from
using any such statements against him. McHan argues on appeal that
the district court erred in denying his motion to quash the indictment
against him because the government materially breached the agree-
ment by making both direct and indirect use of his immunized state-
ments. The government maintains that it did not use any of the
statements McHan provided pursuant to the agreement and that
McHan, in any event, breached the agreement by providing untruthful
information to government agents.
In Kastigar v. United States, the Supreme Court held that the Fifth
Amendment Self-Incrimination Clause not only requires the govern-
ment to provide use and derivative use immunity in exchange for a
defendant's compelled testimony, but also imposes upon the govern-
ment the burden of demonstrating that it did not use such testimony
either directly or indirectly against the defendant in a subsequent
prosecution. 404 U.S. at 452-53, 460. Whether the oral use-immunity
agreement at issue in this case is subject to the full Kastigar protec-
tions is doubtful because McHan voluntarily cooperated with the gov-
ernment. See United States v. Roberson, 872 F.2d 597, 611-12 (5th
Cir.) (holding Kastigar protections inapposite where cooperation was
not compelled but was voluntarily provided pursuant to immunity
agreement), cert. denied, 493 U.S. 861 (1989); United States v.
Eliason, 3 F.3d 1149, 1152-53 (7th Cir. 1993) (same); United States
v. Camp, 72 F.3d 759, 761 (9th Cir. 1995) (same), cert. denied, 116
S. Ct. 1557 (1996). We will assume arguendo, however, that the
agreement provided McHan with the full panoply of Kastigar guaran-
10
tees because we conclude that McHan has failed to demonstrate any
Kastigar violation.
According to McHan, at the December 3, 1991 hearing on his
motion to dismiss his indictment on double jeopardy grounds, AUSA
Cogburn cross-examined him with his admission, given during his
July 17, 1990 debriefing, that he had gone to Colombia, South Amer-
ica, pointing out that McHan's answers were inconsistent with state-
ments he had made at his debriefings. McHan further submits that
Cogburn again improperly cross-examined him about the Colombia
trip at his trial. Finally, McHan argues that the United States used the
written transcript from his July 17, 1990 interview to refresh "several
government memories." Specifically, he refers to the government's
use, while cross-examining him at trial, of information that Harold
Shook, an associate of McHan's, had stored marijuana on property
managed by McHan's real estate company.
The government responds that with respect to the alleged direct use
of McHan's admission that he had gone to Colombia, SBI Agent Frye
testified at the Kastigar hearing that Tom Posey had told agents that
McHan had gone to Colombia. And, with respect to the alleged indi-
rect use of McHan's statement about the marijuana incident involving
Harold Shook, Agent Frye testified that he had learned that informa-
tion in 1987 by questioning Flora Ellison, a former employee of
McHan's real estate business.
McHan rests much of his argument on the absence of written
records showing that government agents knew about the information
for which they claimed independent sources. He contends that the
interviews during which Agent Frye claims to have first learned of
McHan's Colombia trip were summarized in reports, but that there is
no record of the trip in any of those summaries. He further suggests
that Agent Frye's failure to mention the Colombia trip and the Flora
Ellison interview anywhere in his "37-page affidavit reporting, as of
April 28, 1988, every conceivable suspicion about McHan as far back
as 1978," calls his testimony into question.
At its core, therefore, McHan's argument is predicated on the cred-
ibility of Agent Frye's testimony. But the district court found Agent
Frye credible, and we are given no reason to challenge that finding.
11
Because we do not believe that the district court clearly erred in con-
cluding that the government derived the evidence that McHan chal-
lenges from independent sources, we affirm its denial of McHan's
motion to quash his indictment on use immunity grounds. See State
v. Jones, 542 F.2d 186, 199 (4th Cir.) (findings of fact related to inde-
pendence of evidence from immunized testimony will be upset only
if clearly erroneous), cert. denied, 426 U.S. 922 (1976).
In light of our conclusions that McHan never had transactional
immunity and that the government did not violate his use immunity,
we need not reach the government's alternative argument that McHan
breached the agreements by lying to government agents during his
debriefings.
III
McHan next argues that the district court violated his rights secured
by the Sixth Amendment's Confrontation Clause by admitting into
evidence the grand jury testimony of Paul Cunningham, a co-
conspirator who had died before trial. The district court admitted
Cunningham's testimony under Federal Rule of Evidence 804(b)(5),
the residual exception to the hearsay rule. Because we find that Cun-
ningham was unavailable to testify at trial because of his death and
that his statements possessed the "requisite indicia of reliability," we
conclude that the admission of the Cunningham grand jury testimony
did not violate McHan's Sixth Amendment rights.
The Sixth Amendment provides that "[i]n all criminal prosecutions,
the accused shall enjoy the right . . . to be confronted with the wit-
nesses against him." Despite its absolute language, the Confrontation
Clause "permits, where necessary, the admission of certain hearsay
statements against a defendant despite the defendant's inability to
confront the declarant at trial." Maryland v. Craig, 497 U.S. 836, 847-
48 (1990). But in Ohio v. Roberts, 448 U.S. 56, 65-66 (1980), the
Supreme Court established that before introducing a declarant's prior
testimony, the Confrontation Clause requires the prosecution to show
(1) that the use of the hearsay is necessary because the declarant is
unavailable and (2) that the hearsay bears "indicia of reliability" suffi-
cient to enable the factfinder to evaluate the truth of the hearsay. See
also White v. Illinois, 502 U.S. 346, 353-57 (1992) (confining
12
unavailability requirement to statements from prior judicial proceed-
ings and finding indicia of reliability); Idaho v. Wright, 497 U.S. 805,
814-15 (1990) (holding that reliability may be shown by reference to
established hearsay exception or particularized guarantees of trust-
worthiness); United States v. Inadi, 475 U.S. 387, 394-96 (1986)
(holding unavailability requirement inapplicable to co-conspirator's
statements and finding indicia of reliability). We have applied
Roberts' two-prong test to out-of-court statements admitted under
Federal Rule of Evidence 804(b)(5) so long as a"particularized"
showing of trustworthiness is made. See United States v. Shaw, 69
F.3d 1249, 1253 (4th Cir. 1995); United States v. Workman, 860 F.2d
140, 144 (4th Cir. 1988) cert. denied , 489 U.S. 1078 (1989).
A
While a deceased declarant is indisputably "unavailable" to testify
at trial, McHan contends in this case that the government cannot sat-
isfy the unavailability requirement because it "stage-managed" Cun-
ningham's unavailability by failing to depose him pursuant to Federal
Rule of Criminal Procedure 15 when it knew he would die before
trial. Rule 15 provides that "[w]henever due to exceptional circum-
stances of the case it is in the interest of justice that the [witness'] tes-
timony . . . be taken and preserved for use at trial," a court may allow
"a party" to depose a "prospective witness of a party," Fed. R. Crim.
P. 15(d), so long as the opposing party is given notice of the deposi-
tion and an opportunity to engage in cross-examination of the same
"scope and manner . . . as would be allowed in the trial itself," Fed.
R. Crim. P. 15(d). Because "Cunningham was `available' to tell his
story" in a way "by which [his] testimony and McHan's right to con-
front its source could have both been preserved," McHan insists that
the Confrontation Clause does not countenance "the government's
choice to extract Cunningham's statement in the secrecy of the grand
jury chambers."
Underlying McHan's argument on the first prong of the Roberts
test is a premise, for which he provides no authority, that where the
government knows in advance that a potential witness may become
unavailable to testify at trial, the Confrontation Clause requires it to
secure the witness' testimony in a manner that reasonably preserves
the potential defendant's ability to confront and cross-examine the
13
witness. We have found no authority for that proposition. As long as
the government did not create or contribute to the declarant's
unavailability at trial, we do not read Roberts and its progeny to hold
that the necessity created by the witness' unavailability is somehow
lessened simply because the government knew in advance that the
witness would be unavailable. When the government knows that a
witness will be unavailable, it has the choice of seeking to preserve
the witness' testimony under Federal Rule of Criminal Procedure 15,
or relying at its own risk on its ability to introduce hearsay (such as
the witness' grand jury testimony), or losing the benefit of the wit-
ness' testimony altogether. The election it makes, however, does not
bear on the Roberts test of whether, at the time of trial, the witness
is unavailable. See Roberts, 448 U.S. at 65-66. Absent any suggestion
that the government intentionally procured a declarant's unavaila-
bility for trial, we reject McHan's attempt to read the Confrontation
Clause's "rule of necessity" differently from the hearsay rule's simple
"unavailability" requirement and, thereby, to inject a best evidence
requirement into the Confrontation Clause jurisprudence.
We add, as further reason to reject McHan's argument, that Federal
Rule of Criminal Procedure 15(a) speaks only of depositions by "a
party" of "a prospective witness of a party." Because, in this case,
McHan had not yet been indicted or charged when Cunningham testi-
fied before the grand jury, Rule 15 was not an available avenue for
preserving Cunningham's testimony.
B
McHan argues further that the district court erred in finding ade-
quate indicia of reliability to justify the admission of Cunningham's
grand jury testimony, a finding we review for clear error. See
Workman, 860 F.2d at 144. Grand jury testimony is given in the sol-
emn setting of the grand jury, under oath and the danger of perjury,
and in the presence of jurors who are free to question witnesses and
assess their credibility and a court reporter who prepares an official
transcript of the testimony. The nature of grand jury testimony thus
provides some indicia of trustworthiness. See United States v.
Murphy, 696 F.2d 282, 286 (4th Cir. 1982), cert. denied, 461 U.S.
945 (1983); United States v. Garner, 574 F.2d 1141, 1144 (4th Cir.),
cert. denied sub nom. McKethan v. United States, 439 U.S. 93614
(1978); United States v. West, 574 F.2d 1131, 1136 (4th Cir. 1978).
Nonetheless, it should not be concluded that simply because the hear-
say is grand jury testimony it automatically satisfies the second prong
of the Roberts test. See United States v. Clarke, 2 F.3d 81, 83-84 (4th
Cir. 1993), cert. denied, 510 U.S. 1166 (1994); Garner, 574 F.2d at
1144. Rather, we must "examine the `totality of the circumstances
that surround the making of [a proffered hearsay] statement' for `par-
ticularized guarantees of trustworthiness.'" Clarke, 2 F.3d at 84 (quot-
ing Wright, 497 U.S. at 822); see also Shaw, 69 F.3d at 1253 ("The
issue . . . is whether . . . statements were made under circumstances
that guaranteed their trustworthiness such that cross-examination
would have been of marginal utility in testing their accuracy").
While there is no "mechanical test for determining `particularized
guarantees of trustworthiness' under the [Confrontation] Clause,"
Wright, 497 U.S. at 822, we believe that Cunningham's grand jury
testimony in this case is supported by numerous guarantees which,
taken together, justify the district court's decision to admit it. First,
Cunningham testified before the grand jury voluntarily. See United
States v. Ellis, 951 F.2d 580, 583 (4th Cir. 1991), cert. denied, 505
U.S. 1220 (1992). Second, because Cunningham had participated with
McHan in the narcotics offenses, he testified from personal knowl-
edge. See Dutton v. Evans, 400 U.S. 74, 88-89 (1970); Siegfriedt v.
Fair, 982 F.2d 14, 20 n.6 (1st Cir. 1992). Third, when Cunningham
gave his grand jury testimony, he had already been sentenced pursu-
ant to a plea bargain that granted him immunity. See Curro v. United
States, 4 F.3d 436, 437 (6th Cir. 1993); Ellis, 951 F.2d at 583. Fourth,
Cunningham was gravely ill, and expected to die within two years.
See Barker v. Morris, 761 F.2d 1396, 1401 (9th Cir. 1985), cert.
denied, 474 U.S. 1063 (1986); see also Mattox v. United States, 156
U.S. 237, 244 (1895) ("[T]he sense of impending death is presumed
to remove all temptation to falsehood, and to enforce [a] strict . . .
adherence to the truth . . ."). Finally, and perhaps most importantly,
McHan acknowledged that Cunningham's grand jury testimony, with
a few exceptions mostly pertaining to dates, was"fairly accurate" and
"close enough." Cf. Fed. R. Evid. 801(d)(2)(B) (excluding from the
definition of "hearsay" statements which are offered against a party
where the party has manifested an adoption or belief in their truth).
15
IV
To support McHan's contention that his superseding indictment
violated the Fifth Amendment Double Jeopardy Clause, he advances
three independent arguments. We find none persuasive.
First, reiterating the position that we rejected on interlocutory
appeal, McHan argues that his prosecution for the conspiracy and
CCE counts in his 1990 superseding indictment were barred by his
1988 conspiracy conviction. In McHan III, we held that McHan's
guilty plea to the 1988 drug conspiracy did not bar his prosecution for
the 1984-86 conspiracy charged in Count 1 of his superseding indict-
ment. 966 F.2d at 139. While recognizing that McHan had raised a
"non-frivolous question about whether there was only one continuous
conspiracy," we concluded that the district court was not clearly erro-
neous in finding from the testimony presented that McHan's "original
conspiracy, which was active in 1985 and 1986, had withered by the
end of 1987 at the latest." Id. at 138-39. Because we do not agree with
McHan that the evidence adduced at his trial demonstrates that his
"criminal activities from 1984 through 1988 constitute one continu-
ous, on-going conspiracy," we see no reason to revisit our decision in
McHan III.
McHan further contends that the earlier in rem civil forfeitures of
his automobiles and his interest in his 35-acre property preclude his
prosecution on the 1990 conspiracy and CCE counts. His argument,
however, is directly foreclosed by United States v. Ursery, 116 S. Ct.
2135 (1996), in which the Supreme Court recently held that a criminal
prosecution following a civil forfeiture does not implicate the Double
Jeopardy Clause because civil forfeitures "do not constitute `punish-
ment' for purposes of the Double Jeopardy Clause." Id. at 2138.
Because the forfeitures of McHan's automobiles and his interest in
the 35-acre property were not "punishment," McHan's contention that
his subsequent criminal prosecution represented a second jeopardy is
untenable.
Finally McHan argues that a two-level increase in his offense level
that he received for his 1988 conspiracy conviction as an organizer,
leader, manager or supervisor under § 3B1.1(c) bars his CCE convic-
tion because the CCE statute requires the same element, that he be an
16
organizer, supervisor, or manager of five or more other individuals.
See 21 U.S.C. § 848(c)(2)(A). But this argument fails to recognize
that sentencing enhancements are not the crime for which McHan was
charged. The Supreme Court held in Witte v. United States, 115 S. Ct.
2199, 2206 (1995), that the "use of evidence of related criminal con-
duct to enhance a defendant's sentence for a separate crime within the
authorized statutory limits does not constitute punishment for that
conduct within the meaning of the Double Jeopardy Clause" because
the Sentencing Guidelines punish for only the defendant's offense of
conviction. Sentence-enhancing conduct, accordingly, does not pre-
clude later prosecution for that conduct.
V
We now turn to the government's cross-appeal of McHan's sen-
tence, considering first the government's contention that the district
court erred as a matter of law in deciding to depart downward and
reduce McHan's sentence by 56 months based on the fact that McHan
had just finished serving 56 months for his 1988 conviction, which
conviction served as predicate conduct for the conviction in this case.
The government argues that the Sentencing Guidelines address that
issue at U.S.S.G § 5G1.3 and do not permit the downward departure
for that reason. We agree.
Section 3553(b) of Title 18 requires a court to impose a sentence
within the applicable sentencing guidelines range"unless the court
finds that there exists an aggravating or mitigating circumstance of a
kind, or to a degree, not adequately taken into consideration by the
Sentencing Commission in formulating the guidelines that should
result in a sentence different from that described." We have repeat-
edly explained that § 3553(b) envisions a two-prong test for evaluat-
ing the propriety of a departure. First, the departure must be based on
circumstances that were not adequately considered by the Sentencing
Commission. Second, the special mitigating or aggravating circum-
stances present in the case must be of sufficient importance and mag-
nitude to justify a departure. See McHan I, 920 F.2d at 247-48; United
States v. Van Dyke, 895 F.2d 984, 986 (4th Cir.), cert. denied, 498
U.S. 838 (1990); United States v. Summers, 893 F.2d 63, 66 (4th Cir.
1990); Cf. United States v. Rybicki, No. 94-5360, ___ F.3d ___, slip
op. at 3 (4th Cir. Sept. 26, 1996).
17
The Sentencing Guidelines expressly permit district courts to give
sentencing credit only for terms of imprisonment"result[ing] from
offense(s) that have been fully taken into account in the determination
of the offense level for the instant offense" if the previous term of
imprisonment is "undischarged." U.S.S.G. § 5G1.3. The Application
Notes and Background Statement to § 5G1.3 similarly limit its appli-
cation to undischarged terms of imprisonment. And, despite several
amendments to the Sentencing Guidelines, the Sentencing Commis-
sion has not altered § 5G1.3 to include credit for discharged sen-
tences. See U.S.S.G. App. C, amendments 289, 385, 465, 494, 535.
Applying the interpretive maxim expressio unius est exclusio alterius,
we conclude that the Sentencing Commission did not leave unad-
dressed the question of whether a sentencing judge can give credit for
discharged sentences, but rather consciously denied that authority.
Accord Prewitt v. United States, 83 F.3d 812, 817-18 (7th Cir. 1996);
United States v. Bernard, 48 F.3d 427, 431-32 (9th Cir. 1995); United
States v. Ogg, 992 F.2d 265, 266 (10th Cir. 1993).
Our decision in United States v. Rogers, 897 F.2d 134 (4th Cir.
1990), on which the district court relied to support its decision to
depart downward, does not compel a different conclusion. In Rogers,
we held that the district court erred in concluding that it retained no
discretion to depart from the mandatory imposition of consecutive
sentences under U.S.S.G. § 5G1.3 in sentencing for an offense that
the defendant committed while serving an unexpired sentence for an
unrelated offense. Id. at 136. But we never even intimated in Rogers
that downward departures may be appropriate to credit defendants for
previously discharged sentences. Because the district court's down-
ward departure was based on an error of law, we conclude per se that
it abused its discretion. See Koon v. United States, 116 S. Ct. 2035,
2047 (1996) ("whether a factor is a permissible basis for departure
under any circumstance is a question of law" and a "district court by
definition abuses its discretion when it makes an error of law").
On appeal, McHan also contends for the first time that the 22-
month delay between his conviction and sentencing justified the dis-
trict court's downward departure in this case because his previous
sentence only became discharged during the 22-month period. The
Sentencing Guidelines, however, direct district courts to determine
credit for prior sentences at the time of sentencing and provide no
18
exceptions for cases in which the defendant's sentencing has been
delayed. Moreover, it was McHan who is principally responsible for
bringing about delays in his trial and sentencing by engaging in
proactive negotiation and sometimes dilatory litigation. At least
where there is no indication that the government intentionally delayed
the defendant's processing for the purpose of rendering § 5G1.3(c)
inapplicable, we decline to undermine the Sentencing Guidelines'
general preference for repose and specific preference for denying sen-
tencing credit for previously discharged sentences. Cf. Prewitt, 83
F.3d at 817 (rejecting ineffective assistance argument based on coun-
sel's failure to argue that § 5G1.3(c) applied to defendant's sentence
where defendant had already been discharged from previous sentence
and record contained no evidence that government had intentionally
delayed defendant's indictment for the purpose of rendering
§ 5G1.3(c) inapplicable).
Because we conclude that the Sentencing Commission adequately
considered--and rejected--credit for previously discharged sen-
tences, the district court's downward departure was based on an error
of law, constituting per se an abuse of discretion. See Koon, 116 S.
Ct. at 2047. For the same reason, we need not decide whether the dis-
trict court abused its discretion in concluding that a departure was rea-
sonably justified in McHan's case or whether § 5G1.3(a) denies
McHan the benefit of concurrent sentences because he committed part
of the conduct underlying his 1992 conviction after he was sentenced
on his 1988 conviction.
VI
Finally, the government contends that the district court, in forfeit-
ing $395,670 under 21 U.S.C. § 853 as proceeds from McHan's con-
tinuing criminal enterprise, improperly deducted McHan's cost of the
drugs sold and included only one-half of the proceeds of one transac-
tion because a partner received the other half. After holding a bench
trial, the court determined that McHan had received $1,252,700 from
marijuana transactions including $236,650 as a one-half share from a
transaction in which he had participated jointly with Paul Cunning-
ham. The total proceeds received, including the partnership transac-
tion were $1,489,350. To compute the amount forfeitable, the district
court deducted $857,030 representing the cost of marijuana sold and
19
$236,650 representing the one-half share that Cunningham received,
leaving $395,670, which is the amount it ordered forfeited. The gov-
ernment maintains that both deductions were improper. We agree.
A
The government first argues that 21 U.S.C. § 853 reaches gross
proceeds from illegal transactions, and not net profits. The district
court concluded, however, that in using the term"proceeds" in § 853,
Congress intended to give the district court "factual discretion" on
what "proceeds" should include. Reasoning that by forfeiting gross
proceeds, the court would be twice forfeiting the same property -- the
cost paid as well as gross proceeds which includes the cost paid --
the court forfeited only net profits. In doing so, we believe it erred.
The CCE statute originally limited criminal forfeitures for a person
convicted of engaging in a continuing criminal enterprise to "profits
obtained . . . in such enterprise," 21 U.S.C.§ 848(a)(2) (1982)
(emphasis added). But that provision was replaced in 1984 by 21
U.S.C. § 853 which is applicable to this case because McHan's con-
tinuing criminal enterprise continued after Congress' amendments to
the CCE forfeiture provisions in the Comprehensive Forfeiture Act,
Chapter 3 of the Comprehensive Crime Control Act of 1984, became
law. See P.L. 98-473, Tit. II, § 235 (a)(1), 98 Stat. 2031-32 (1984);
see also United States v. Johnson, 537 F.2d 1170, 1175 (4th Cir.
1976) (holding that application of statute providing penalties for those
engaged in CCE did not constitute ex post facto application of statute
even though CCE was in operation before effective date of statute).
Section 853(a)(1) now authorizes the forfeiture of"any property con-
stituting, or derived from, any proceeds . .. obtained, directly or indi-
rectly, as the result of" a CCE offense. (Emphasis added). In using the
term "proceeds," as distinguished from "profits," we believe Congress
intended the distinction plainly made.
Webster's preferred definition of "proceeds" reads "what is pro-
duced by or derived from something . . . by way of total revenue: the
total amount brought in." Webster's Third New International
Dictionary 1807 (1961); see also Black's Law Dictionary 1204 (6th
ed. 1990) (defining proceeds as "the sum, amount, or value of prop-
erty sold or converted into money or into other property"). "Profit,"
20
by contrast, is defined as "the excess of returns over expenditure in
a transaction or series of transactions," Webster's Third New Interna-
tional Dictionary 1811, or "the gross proceeds of a business transac-
tion less the costs of the transaction," Black's Law Dictionary 1211.
Not only did Congress make the distinction in adopting the 1984
amendments, it did so within § 853(a) where it provides that "[i]n lieu
of a fine otherwise authorized by this part, a defendant who derives
profits or other proceeds from an offense may be fined not more than
twice the gross profits or other proceeds." (Emphasis added). The
text of the CCE forfeiture statute, therefore, does not appear to sug-
gest an interpretation of "proceeds" so restrictive as to include only
the profits realized from a continuing criminal enterprise, and we are
instructed to construe the statute liberally to effectuate its remedial
purpose. See 21 U.S.C. § 853(o).
The legislative history corroborates our conclusion. In adopting the
1984 amendments, Congress intended to render forfeitable under
§ 853(a)(1) "[t]he same type of property [that was already] subject to
civil forfeiture under 21 U.S.C. § 881(a)(6)." S. Rep. No. 98-225, 98th
Cong., 2d Sess., at 211 (1984) (emphasis added). And§ 881(a)(6)
authorizes the forfeiture of "[a]ll moneys, negotiable instruments,
securities, or other things of value furnished or intended to be fur-
nished by any person in exchange for a controlled substance in viola-
tion of this subchapter, all proceeds traceable to such an exchange,
and all moneys, negotiable instruments, and securities used or
intended to be used to facilitate any violation of this subchapter." The
civil forfeiture provision has never been interpreted to permit a deduc-
tion for the costs of illicit drug transactions, as McHan urges here for
the criminal provision. See United States v. $4,255,625.39, 762 F.2d
895, 905 (11th Cir. 1985) (suggesting that cumulative forfeitures may
be permissible under § 881(a)(6)), cert. denied, 474 U.S. 1056 (1986);
see also United States v. Banco Cafetero Panama, 797 F.2d 1154,
1161 n.9 (2d Cir. 1986) (same).
Further evidence of Congress' design in § 853 to require the forfei-
ture of the gross proceeds from continuing criminal enterprises may
be gleaned from RICO's parallel criminal forfeiture provision. Con-
gress enacted the Comprehensive Forfeiture Act to amend both the
RICO and CCE forfeiture provisions, see Pub.L. 98-473, Tit. II, Ch.
III, 98 Stat. 2040, and now the language of the CCE forfeiture provi-
21
sion, 21 U.S.C. § 853, closely tracks that of the RICO forfeiture pro-
vision, 18 U.S.C. § 1963. The legislative history to § 1963(a)(3)
reveals that Congress believed "[i]t should not be necessary for the
prosecutor to prove what the defendant's overhead expenses were"
and, therefore, used the term "proceeds" rather than "profits" in the
RICO forfeiture statute "to alleviate the unreasonable burden on the
government of proving net profits." S. Rep. No. 225, 98th Cong., 2d
Sess., at 199 (1984). Because we generally construe the drug and
RICO forfeiture statutes similarly, see In re Billman, 915 F.2d 916,
921 (4th Cir. 1990), cert. denied sub nom. McKinney v. United States,
500 U.S. 952 (1992); United States v. Amend, 791 F.2d 1120, 1127
n.6 (4th Cir.), cert. denied, 479 U.S. 930 (1986), and the legislative
history to the CCE forfeiture statute specifically indicates that Con-
gress used the term "proceeds" to define the property forfeitable under
§ 853 for the same reason that it used that term in § 1963, see S. Rep.
No. 98-225, 98th Cong., 2d Sess., at 211 (1984), we believe that the
RICO forfeiture statute further reveals Congress' intent to forfeit
under § 853 all tainted revenues received by a CCE.
Finally, sound policy considerations support the forfeiture of the
gross proceeds rather than the profits of criminal enterprises under
§ 853. The proper measure of criminal responsibility generally is the
harm that the defendant caused, not the net gain that he realized from
his conduct. Otherwise we would be rewarding unsuccessful drug
dealers, or those who could adequately manipulate"their books." Cf.
United States v. Jeffers, 532 F.2d 1101, 1116-17 (7th Cir. 1976)
(holding that "substantial income" requirement of CCE statute, 21
U.S.C. § 848(b)(2)(B), can be established by substantial gross receipts
or substantial gross income), aff'd. in part and vacated in part on
other grounds, 432 U.S. 137 (1977); United States v. Sisca, 503 F.2d
1337, 1346 (2d Cir. 1974) (same), cert. denied, 419 U.S. 1008 (1974).
Were we to read proceeds in § 853 to mean only profits, moreover,
we would create perverse incentives for criminals to employ compli-
cated accounting measures to shelter the profits of their illegal enter-
prises. The purpose of forfeiture is to remove property facilitating
crime or property produced by crime -- all of which is tainted by the
illegal activity.
In any event, regardless of whether the costs of McHan's drug
operations were included in "proceeds" under§ 853(a)(1), they would
22
be forfeitable under § 853(a)(2). That section directs the forfeiture of
any "property used, or intended to be used, in any manner or part, to
commit, or to facilitate the commission of" a CCE offense. Because
the amounts McHan spent to buy and transport marijuana were used
to "facilitate" his criminal enterprise, § 853(a)(2) subjects those
amounts to forfeiture. See Autullo v. United States, Nos. 93-3713 and
95-2439, 1996 WL 149346, *4 (7th Cir. 1996) (unpublished) (relying
entirely on § 853(a)(2) in rejecting defendant's argument that "cash
forfeiture should have been based on profits rather than proceeds"
where forfeiture was "based on the cash value of the cocaine that he
distributed"); see also United States v. Harris, 903 F.2d 770, 777-78
(10th Cir. 1990) (affirming forfeiture under § 853(a)(2) of $413,493
where sufficient evidence demonstrated that defendant intended to use
currency to facilitate possession of marijuana with the intent to dis-
tribute).
B
The government also contends that the district court erred in
deducting from gross proceeds Cunningham's one-half share of the
proceeds received in a transaction in which both McHan and Cun-
ningham were involved. Section 853(a)(1) provides for the forfeiture
of tainted property "obtained, directly or indirectly" from a CCE by
any person convicted of a CCE offense. (Emphasis added). Constru-
ing that section liberally, see 21 U.S.C.§ 853(o), it is not limited to
property that the defendant acquired individually but includes all
property that the defendant derived indirectly from those who acted
in concert with him in furthering the criminal enterprise. See United
States v. Benevento, 663 F. Supp. 1115, 1118 (S.D.N.Y. 1987), aff'd,
836 F.2d 129 (2d Cir. 1988) (per curiam). As a member of the
McHan-Cunningham joint venture, McHan received all proceeds of
the partnership. Simply because the partners thereafter agreed to
divide the take does not negate the existence of the proceeds and the
taint caused by the illegal activity.
The imposition of vicarious liability under § 853 also resonates
with established criminal law principles. Just as conspirators are sub-
stantively liable for the foreseeable criminal conduct of a conspiracy's
other members, see Pinkerton v. United States , 328 U.S. 640 (1946),
they are responsible at sentencing for co-conspirators' "reasonably
23
foreseeable acts and omissions . . . in furtherance of the jointly
undertaken criminal activity," U.S.S.G. § 1B1.3(a)(1)(B) (Relevant
Conduct); see also United States v. Lamarr, 75 F.3d 964, 972 (4th
Cir. 1996), petition for cert. filed (June 10, 1996) (No. 95-9398);
United States v. Irvin, 2 F.3d 72, 77 (4th Cir. 1993), cert. denied sub
nom. Gonzales v. United States, 510 U.S. 1125 (1994). Because a
criminal forfeiture ordered under § 853(a) is"an element of the
[defendant's] sentence," Libretti v. United States, 116 S.Ct. 356, 363
(1995), it follows that conspirators should be liable under § 853 for
their drug partnerships' receipts.
Finally, the few courts to consider the precise question of whether
§ 853(a) imposes vicarious liability on co-conspirators have held that
it does. See Benevento, 836 F.2d 129 (2d Cir. 1988) (per curiam);
United States v. McCarroll, No. 95 CR 48, 1996 WL 355371 (N.D.
Ill. June 19, 1996) (unpublished). And in cases involving the RICO
forfeiture statute, courts have unanimously concluded that conspira-
tors are jointly and severally liable for amounts received pursuant to
their illicit agreement. See United States v. Hurley, 63 F.3d 1, 22 (1st
Cir. 1995), aff'g United States v. Saccoccia, 823 F. Supp. 994 (D.R.I.
1993); United States v. Masters, 924 F.2d 1362, 1369-70 (7th Cir.),
cert. denied, 500 U.S. 919 (1991); Fleischhauer v. Feltner, 879 F.2d
1290, 1301 (6th Cir. 1989), cert. denied, 493 U.S. 1074, and cert.
denied, 494 U.S. 1027 (1990); United States v. Caporale, 806 F.2d
1487 (11th Cir. 1986), cert. denied, 483 U.S. 1021 (1987); United
States v. Wilson, 742 F. Supp. 905, 909 (E.D. Pa. 1989), aff'd, 909
F.2d 1478 (3d Cir.) (Table), cert. denied, 498 U.S. 1016 (1990).
For the foregoing reasons, we affirm McHan's convictions, but
vacate his sentence and remand this case to the district court for
resentencing in accordance with this opinion.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED
HALL, Circuit Judge, concurring in part and dissenting in part:
I agree with almost everything Judge Niemeyer has written for the
majority. I disagree only with the reversal of the 56-month credit for
24
time served on the prior conspiracy conviction. This downward depar-
ture was within the district court's discretion, and I would affirm it.
My main concern arises from the structure of the enterprise McHan
stands convicted of directing. I concurred in our holding in McHan
III that a continuing criminal enterprise, which is itself a conspiracy,
could be composed of discontinuous smaller conspiracies.1 Though I
concede the theoretical possibility of such a conspiracy-upon-
conspiracy structure -- a theory proved by example here -- I believe
that it is far enough from "the heartland" of the guidelines as to pro-
vide enough discretion to grant the departure, especially inasmuch as
conviction and punishment for CCE and the inevitable continuing
lesser-included conspiracy is impermissible. Rutledge v. United
States, 116 S.Ct. 1241 (1996); Jeffers v. United States, 432 U.S. 137(1977).
The majority relies most heavily on U.S.S.G. §5G1.3. That guide-
line describes, in considerable detail, what role undischarged sen-
tences should play in setting the total sentence, and it recognizes an
uncommon degree of discretion in the district courts to fashion a rea-
sonable sentence in complex situations. See§ 5G1.3(c) & comment.
(nn. 3-5). Applying the hoary maxim expressio unius est exclusio
alterius, the majority concludes that no such discretion exists as to
discharged sentences.
I disagree. There are three ways the Sentencing Commission may
address a potential ground for departure: (i) it may forbid the factor's
use, (ii) encourage it, or (iii) discourage it. Koon v. United States, 116
S.Ct. 2035, 2045 (1996) (citing United States v. Rivera, 994 F.2d 942,
949 (1st Cir. 1993)). Only in the first case is the district court's dis-
cretion entirely foreclosed. The most we can say about discharged
sentences from the text of § 5G1.3, even with the help of expressio
unius . . . , is that they are not an encouraged basis for departure. To
infer that the basis is forbidden is more than the old saw can bear.
Concluding that the district court had some, if limited, discretion
to consider a departure here, I must address whether it abused that
_________________________________________________________________
1 United States v. McHan, 966 F.2d 134, 139-142 (4th Cir. 1992).
25
discretion, giving "substantial deference" to its decision. Koon, 116
S.Ct. at 2046-2047. I see no abuse, for two reasons.
First, as I stated above, it is an odd paradox that a continuing agree-
ment could be composed of discrete, discontinuous sub-agreements.
As Rutledge resolves once and for all, a CCE is simply a conspiracy
with certain aggravating characteristics, and conviction of the same
conspiracy without those characteristics is unconstitutional. The "se-
ries of violations" required by 21 U.S.C. § 848(c)(2) was clearly
intended to refer, in the overwhelming majority of cases, to substan-
tive crimes.2 Moreover, conversely to Rutledge's holding as to lesser-
included conspiracy, conviction and punishment for predicate sub-
stantive crimes and the larger CCE is generally permissible. Garrett
v. United States, 471 U.S. 773 (1985).
Within the two extremes -- Rutledge and Garrett -- lies this pecu-
liar case, where we have, for § 848(c)(2)'s purposes at least, what
amount to substantive conspiracies. I would hold that this peculiarity
places this case well outside the "heartland" of the guidelines, and the
district court's decision that credit for time served was appropriate
was not an abuse of discretion.
Second, McHan was convicted in July 1992, but not sentenced
until June 1994. Had he been sentenced any time within sixteen
months of his conviction, his prior sentence would have been undis-
charged. A delay of that length was not, in my view, envisioned by
the Commission when it drew its distinction between discharged and
undischarged sentences, and the delay thus provides an independent
basis for the departure.
To the extent stated above, I respectfully dissent. Otherwise, I join
the judgment and opinion of the court.
_________________________________________________________________
2 In dicta in Rutledge, the Supreme Court referred to the "series of vio-
lations" as the "series of substantive violations." 116 S.Ct. at 1246 n.7.
26