United States v. Roth, Gary R. ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-2004
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
GARY R. ROTH,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 98-CR-116-C-01--Barbara B. Crabb, Judge.
Argued November 9, 1999--Decided January 7, 2000
Before Bauer, Easterbrook and Kanne, Circuit Judges.
Bauer, Circuit Judge. On December 9, 1998, a
grand jury in the Western District of Wisconsin
returned a three count indictment against
appellant Gary R. Roth ("Roth"), charging him
with conspiracy to manufacture and distribute
marijuana, possession with intent to manufacture
marijuana, and criminal forfeiture, in violation
of 21 U.S.C. sec.846 and 21 U.S.C. sec.841(a)(1).
Pursuant to a plea agreement in which he
preserved his right to appeal the denial of his
Motion to Suppress, Roth pled guilty to
conspiring to manufacture and distribute
marijuana, structuring currency transactions, and
criminal forfeiture and was sentenced to a ten
year prison term on the conspiracy charge and a
concurrent five year prison term on the
structuring charge. He was also sentenced to a
term of supervised release. Because he was found
to be the leader in the offense, his sentence was
enhanced two levels under U.S.S.G. sec.3B1.1.
Roth appeals, claiming that the search warrant
was not supported by probable cause. He also
appeals the two level enhancement and the
District Court’s finding that he was the leader
of the marijuana growing operation. We affirm.
I. BACKGROUND
Gary Roth and his wife, Dawn, owned a farm in
rural Vernon County, Wisconsin. On the farm they
raised hogs and grew a cash crop. In September,
1998, the authorities learned that the Roths were
also growing marijuana in their pig barn.
According to informant Robert Rhoda ("Rhoda"),
he and Gary Roth began growing marijuana in the
pig barn in 1993. Using 200 plants they obtained
in Amsterdam, Rhoda and Roth became equal
partners in the marijuana operation. The two made
substantial amounts of money from the operation
and within three years were up to 6,000 plants.
In September, 1996, however, they had a falling
out over profits and dissolved the partnership.
Roth then took over the entire operation.
In September, 1998, after he had sneaked back
onto the farm to verify that the marijuana
growing operation was still functioning, Rhoda
went to the Wisconsin Department of Justice,
Division of Narcotics Enforcement ("DNE") and
informed on Gary and Dawn Roth. In exchange for
use immunity, Rhoda described the entire
operation. His statements became the cornerstone
of the warrant affidavit which Roth now
challenges.
Rhoda described for the agents how the pig barn
was actually three buildings arranged in the
shape of a "T," with the middle barn being used
as the grow site, and explained the layout of the
middle barn, which included two flowering rooms,
a vegetation room and a cloning room, each
containing 1800 to 2000 plants. He detailed the
type and amount of equipment contained in each
room, down to the regulated room temperature, the
timing of the grow lights, the color of the walls
and the brand name of the mulch used.
Rhoda further provided information as to the
places on the farm where he believed Gary Roth
hid his money and how he and Roth deposited money
in structured deposits in banks in DeSoto, Genoa,
LaCrosse, Chicago and St. Paul. As to Dawn Roth,
Rhoda reported that she had known about the
marijuana operation before the dissolution of his
partnership with Gary and that she had
participated in the negotiation of his severance
payment.
To corroborate Rhoda’s statements, the DNE
agents verified the existence of the Roth farm.
Then, on October 27, 1998, Rhoda contacted the
DNE agents again, saying that Dawn Roth had
called and asked him to take care of the farm for
five days in December while she and Gary were
gone for the holidays. Rhoda said he understood
Dawn Roth’s request to mean that she wanted him
to take care of the marijuana plants as well as
the hogs. In return for his services he reported
that he had been offered $100 a day.
On November 24, 1998, agents monitored a
telephone call Rhoda made to Dawn Roth to discuss
the arrangements for taking care of the "hog
operation."/1 Rhoda asked Dawn to mail him the
instructions, but Mrs. Roth declined, saying that
was not a good idea and questioning what would
happen if the mail got lost. She invited Rhoda
out to the farm instead. The meeting was
scheduled for four days later.
The day after the telephone conversation, DNE
agents sneaked onto the farm to conduct
surveillance and take a thermal imaging scan of
the middle barn. While doing so, the agents
claimed they were able to smell marijuana when
they were 100 feet from the barn. One must assume
either very clean pigs or very strong marijuana.
During this four day period between the
telephone call and Rhoda’s meeting with Dawn Roth
the agents also obtained records of the farm’s
electrical usage. Around the time Rhoda and Roth
were beginning to grow the marijuana, the records
showed a spike in usage. Indeed, in December,
1992, the power company had to install a 37.5 KVA
transformer at the Roth’s farm to handle the
increased electrical consumption./2 The general
manager of the power company, when interviewed by
the DNE agents, was unable to explain why such a
large transformer was needed for the Roth’s farm.
He indicated that normally a 15 to 25 KVA
transformer was sufficient for a farm like the
Roth’s. In reviewing the Roth’s electrical usage,
the general manager also said that the level of
use was consistent with a large dairy milking
operation. While on the Roth’s property, however,
the agents saw no evidence of a dairy milking
operation.
On November 28, 1998 Rhoda met with Dawn Roth
at the farm. Rhoda wore a body wire and taped the
conversation. He asked Mrs. Roth what he would
have to do to take care of the "hog operation."
She said all he needed to do was "water them and
remove the hoods." According to Rhoda, this meant
he had to water the plants and move the grow
lights around them.
A search warrant was issued by the Magistrate
Judge on December 2, 1998 and executed by the DNA
agents the following day. At the farm the agents
found an indoor marijuana growing operation with
4242 active plants in the middle pig barn. After
the plants were discovered, Gary and Dawn Roth
admitted to their involvement in the
operation./3
Following Gary Roth’s plea on February 19,
1999, the probation office prepared a presentence
report ("PSR"). In the PSR, the probation office
recommended a two-level increase to Roth’s base
offense level for his role as a leader pursuant
to U.S.S.G. sec.3B1.1. The probation office noted
that Roth employed his wife to work for him in
the business and he determined what share of the
proceeds she would receive.
At Roth’s sentencing, the District Court
enhanced Roth’s base level offense two points for
his role in the offense under U.S.S.G. sec.3B1.1.
The court found that Roth was a leader in the
offense because he directed his wife in her
duties, paid her a cash wage and he received a
much larger share of the proceeds. Roth was
sentenced to a ten year prison term on the
conspiracy charge and a concurrent five year
prison term on the structuring charge. Had his
base level not been enhanced, his sentence would
have been approximately half of what he received.
II. DISCUSSION
A. Standard of Review
Prior to entering his plea of guilty, Gary Roth
filed a variety of motions, including a motion
for a Franks hearing and a motion attacking the
warrant affidavit for lack of probable cause. The
Magistrate Judge recommended that both motions be
denied. The District Court undertook a de novo
consideration of the motions and adopted the
Magistrate’s recommendations. We review the
District Court’s denial of Roth’s request for a
Franks hearing for clear error. United States v.
Amerson, 1999 WL 424314 at *11 (7th Cir. June 23,
1999). The probable cause determination is
reviewed de novo. United States v. McKinney, 143
F.3d 325, 328 (7th Cir. 1998). As for the
District Court’s factual determination that Roth
qualified for an aggravating role adjustment
under sec.3B1.1, we review that for clear error.
United States v. Wilson, 134 F.3d 855, 869 (7th
Cir. 1998).
B. Roth’s Request For A Franks Hearing
Roth first contends that under the holding of
Franks v. Delaware, 438 U.S. 154, 98 S. Ct. 2674,
57 L. Ed. 2d 667 (1978), he was entitled to a full
evidentiary hearing on his motion to quash and
suppress evidence. In Franks, the Supreme Court
held that the Fourth Amendment requires an
evidentiary hearing into the truthfulness of an
allegation contained in an affidavit supporting
an application for a search warrant "where the
defendant makes a substantial preliminary showing
that a false statement knowingly and
intentionally, or with reckless disregard for the
truth, was included by the affiant in the warrant
affidavit, and if the allegedly false statement
is necessary to the finding of probable cause."
438 U.S. at 155-56, 98 S.Ct. at 2676.
Franks makes clear that it is the state of the
mind of the affiant that is at issue. Here, Roth
challenges the veracity of certain statements
made by Rhoda. But the affiant was DNE Special
Agent Dave Matthews, not Robert Rhoda. The
question of whether Rhoda made untrue statements
is not relevant unless Roth can show that Agent
Matthews included them in his supporting
affidavit despite his knowledge that they were
false or with reckless disregard for the truth.
United States v. Pritchard, 745 F.2d 1112, 1119
(7th Cir. 1984) (citation omitted). This Roth
cannot do and he makes no attempt to do so.
Moreover, we note in passing that Rhoda was
present during the presentment to the Magistrate
and was obviously available to answer any
judicial inquiry.
Instead, he merely argues that "[f]alse
statements can be stricken when one government
agent deliberately or recklessly misrepresents
information to a second agent, who in turn, then
includes the representation in an affidavit,"
citing United States v. McAllister, 18 F.3d 1412
(7th Cir. 1994). Roth, however, offers no
supporting authority for his belief that Rhoda
became a governmental agent once he gave his
statements to the DNE and we decline to make such
a finding.
We believe that Roth’s challenge to the
District Court’s denial of his request for a
Franks hearing is misdirected. Whether or not
Rhoda provided false information is not the issue
in deciding whether Roth is entitled to such a
hearing. The issue is whether Agent Matthews
knowingly gave false information in his sworn
affidavit or swore to information with a reckless
disregard for its truth. We do not believe the
District Court erred in deciding that Agent
Matthews did not do so and thus we affirm the
District Court’s denial of the request for a
Franks hearing.
C. Whether The Search Warrant Affidavit
Established Probable Cause
Roth next argues that the affidavit in support
of the search warrant did not provide probable
cause to support the warrant. Roth argues that
Rhoda’s statements are insufficient by themselves
and that there is insufficient independent
evidence to corroborate Rhoda’s statements.
A search warrant affidavit establishes probable
cause when it "sets forth facts sufficient to
induce a reasonably prudent person to believe
that a search thereof will uncover evidence of a
crime." United States v. McNeese, 901 F.2d 585,
592 (7th Cir. 1990), citing Berger v. New York,
388 U.S. 41, 55, 87 S. Ct. 1873, 1881, 18 L. Ed. 2d
1040 (1967). See also Ornelas v. United States,
517 U.S. 690, 696, 116 S. Ct. 1657, 1661, 134
L. Ed. 2d 911 (1996). The Supreme Court has refused
to define probable cause, saying that whether it
has been established varies with the facts of
each case. Ornelas, 517 U.S. at 696. We have set
forth the facts of this case with considerable
detail. The fact that Roth can point out
additional things which could have been done but
were not does not in any way detract from what
was done. Rhoda gave remarkably detailed
statements about the operation to the agents
which the agents corroborated through
surveillance and other means. The agents also
obtained and reviewed power records, and
interviewed the general manager of the power
company to determine whether the Roth’s power
usage was consistent with the operation of a farm
or the operation of a marijuana growing
operation. Finally, they listened to
conversations between Rhoda and Dawn Roth which,
in context, seem to confirm that the Roths were
growing marijuana in their pig barn.
The evidence needed to obtain a search warrant
is not the same as the evidence needed to
convict. It is less. "Probable cause requires
only a probability or a substantial chance of
criminal activity not an actual showing of such
activity." Illinois v. Gates, 462 U.S. 213, 243-
44 n.13, 103 S. Ct. 2317, 2335, 76 L. Ed. 2d 527
(1983). The evidence in this case clearly
establishes probable cause. The decision of the
District Court is therefore affirmed.
D. The Enhancement Of Roth’s Sentence
Roth lastly charges that the District Court
erred by enhancing his base offense level two
points under U.S.S.G. sec.3B1.1 for his role as
the leader of his wife in the conspiracy. He
claims that his wife was his equal partner. The
evidence, however, does not bear this out.
Section 3B1.1 of the Sentencing Guidelines
provides for a two-level enhancement of a
defendant’s base offense level if "the defendant
was an organizer, leader, manager or supervisor
in any criminal activity." U.S.S.G. sec.3B1.1.
Application Note 4 to Section 3B1.1 provides some
factors for use in evaluating whether the
defendant was a leader, manager or supervisor.
Those factors include:
(1) level of decision-making authority;
(2) nature of participation;
(3) recruitment of accomplice;
(4) right to a larger share of the profits;
(5) degree of participation in planning and
organizing;
(6) nature and scope of the criminal venture; and
(7) degree of control over others.
U.S.S.G. sec.3B1.1, Application Note 4.
Noting that Dawn Roth was not a partner in the
operation when it began in 1993, that she did not
even see the plants until 1994, that she did not
start taking care of the plants until January,
1998 and that her duties consisted mainly of
watering the plants for a cash wage, while her
husband was responsible for the cloning, sales
and distribution, the District Court found that
Dawn Roth was not a partner and was directed by
her husband.
This finding is buttressed by the great
disparity in the amount of money each received
from the business. Approximately seven pounds of
marijuana were sold every other week, at a price
of $2,800 per pound. Dawn Roth received only $400
per pound sold, or $2,800 bi-weekly. Gary Roth
retained the rest, approximately $16,800. Thus,
he kept 85% of the proceeds for himself. Hardly
an equal partnership as Roth contends. By arguing
that Dawn shared equally in the luxury items he
bought with the money, Roth attempts to obfuscate
these facts.
Given the evidence, the District Court’s finding
that Gary Roth exercised a position of leadership
over his wife in the conspiracy is not clear
error. The two-level enhancement under U.S.S.G.
sec.3B1.1 was proper.
III. CONCLUSION
Gary Roth made a poor choice in selecting his
business partner. Because of Rhoda, his
profitable business has been shut down and he is
now in prison. None of the arguments Roth
presents on appeal changes these results though.
For the foregoing reasons, the judgment of the
District Court is affirmed.
AFFIRMED.
/1 According to Rhoda, "hog operation" was the code
name they always used when talking about the
marijuana growing operation over the telephone.
/2 We are aware that there is a slight discrepancy
between the power company’s records showing that
a larger transformer was installed at the Roth’s
farm in December, 1992 and Rhoda’s statement that
he and Roth did not begin growing marijuana until
1993. We believe the most logical explanation is
that Rhoda may have mistaken the date by a few
months.
/3 Although Dawn Roth was also indicted for offenses
relating to her involvement in the marijuana
growing operation, she is not part of this
appeal.