Petition for Writ of Certiorari — Smith v. United States

Supreme Court, U.8.

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/ 96 121 JUL 22 19%,

No. OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1995

JAMES E. SMITH,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

PETITION FOR WRIT OF CERTIORARI

Mark J. ROCHON

ROCHON AND RoseErTS

504 Seventh Street, S.E.

Washington, D.C. 20003

(202) 546-1500

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

I. Whether the District of Columbia Circuit violated this

Court’s ruling in Broce v. United States by affirming the

denial of Petitioner’s 28 U.S.C. § 2255 motion despite the

fact that Petitioner’s plea facially revealed that it violated

the Double Jeopardy prohibition and petitioner’s sen-

tence was illegally imposed.

II. Whether the District of Columbia Circuit’s affirmance

of the denial of Petitioner’s 28 U.S.C. § 2255 motion

conflicts with rulings of this Court and other circuit

courts because it allows for conviction and sentencing on

a crime other than that which is charged in an informa-

tion.

il

TABLE OF CONTENTS

Page

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Reasons for Granting the Writ..................... 5

CN TS AERA TES VERE eos 13

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iii

TABLE OF CITATIONS

Page

Albernez v. United States, 450 U.S. 333 (1981) ......... 7

Blackledge v. Perry, 417 U.S. 21 (1974) ................ 6

Boykin v. Alabama, 395 U.S. 238 (1969)............... 12

Brady v. United States, 397 U.S. 742 (1970)........... 12

Broce v. United States, 488 U.S. 563, 102 L.Ed.2d

eB RE Be) a, 6, 7

eo BOR CRUST) cic cet cee vec ec anes 7

Menna v. New York, 423 U.S. 61 (1975)................ 6

Tollett v. Henderson, 411 U.S. 258 (1973) .............. 6

United States v. Alvarez, 735 F.2d 461 (11th Cir.

eae eps hake as as seen esses ccees 12

United States v. Crockett, 812 F.2d 626 (10th Cir.

A ina dk ee bee kecc shoes 12

United States v. Harris, 959 F.2d 246 (D.C. Cir 1992)..... 7

United States v. Patrick, 959 F.2d 991 (D.C. Cir.

TCE wc twa is hi biwbbitecescrns 10, 3%, 32

United States v. Shorter, 809 F.2d 54 (D.C.Cir. 1987) ...8, 9

United States v. Shorter, 608 F.Supp. 871 (D.C.D.C.

ene Leiba reer hat aca nseevsccens 8

United States v. Ursery, 518 U.S. __, 1996 WL

EG LC rb k Sb vba es csv see cece cce 7

iv

TABLE OF CITATIONS —- Continued

Page

STATUTES

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2S Ris te eto os ha oats aoe 00h cE 12

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rok ee Seer ee ee ee 2

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CONSTITUTION

Fifth Amendment of the United States Constitu- |

Gs wWahie KOK TR ewk kaos Borne bl oes ee .

OTHER AUTHORITY

Federal Rule of Criminal Procedure 35(a) ............ 3

OPINIONS BELOW

The opinions and orders at issue in this Petition for

certiorari are listed below. Copies of each document are

being submitted in the Appendix accompanying this Peti-

tion.

1. Final Order and Memorandum Opinion Filed on

March 1, 1994.

This Order, issued by the Honorable June L.

Green, United States District Judge for the Dis-

trict of Columbia, denied Petitioner’s 28 U.S.C.

§ 2255 Motion.

See Appendix B.

2. United States v. James E. Smith, judgment, 94-3024

(April 4, 1996, D.C. Cir.).

This was an unpublished judgment in Appeal

No. 94-3024, issued on April 4, 1996 by a panel

of the D.C. Circuit, which affirmed the District

Court’s denial of Petitioner’s 28 U.S.C. § 2255

Motion.

See Appendix A.

STATEMENT OF JURISDICTION

On April 4, 1996, a panel of the United States Court

of Appeals for the District of Columbia Circuit affirmed

the Final Order of the United States District Court for the

District of Columbia which was issued on March 1, 1994,

and which denied Petitioner’s 28 U.S.C. § 2255 Motion.

This Petition for a Writ of Certiorari is timely filed.

4

STATEMENT OF THE CASE

This case is presently before the Court on Petition for

Certiorari following the District of Columbia Circuit's

affirmance of the District Court’s denial of Petitioner

James E. Smith’s Motion to Vacate Sentence under 28

U.S.C. § 2255. With regards to his conviction and sentence

on three counts, Petitioner’s Motion alleged that the

Court had illegally sentenced him to multiple terms of

incarceration based on activity which constituted a single,

continuing offense, rather than distinct and separate

offenses. With regards to another count, petitioner’s

motion alleged that the Court had sentenced him to a

term commensurate with a charge not alleged in the

charging document.

Petitioner’s convictions and sentences originated

from an information filed in the United States District

Court for the District of Columbia on March 7, 1988

which charged petitioner with the following five counts:

conspiracy to distribute heroin in violation of 21 U.S.C.

§ 846 and § 841; three counts of tax evasion in violation of

26 U.S.C. § 7201 (counts two through four); and one count

of criminal forfeiture, pursuant to 21 U.S.C § 853(a)(1).

Though the information alleged that Petitioner distrib-

uted heroin, the government did not specify any particu-

lar amount of heroin that was allegedly distributed.

On March 16, 1988, petitioner pleaded guilty to all

counts of the information and the trial court accepted the

plea, the Honorable Barrington D. Parker presiding. Peti-

tioner was sentencec or. June 3, 1988. At the time of the

sentencing, the Governy.ent presented a detailed Factual

Proffer to the Court, setting out the allegations of crimi-

nal activity by the Petitioner. See Appendix C. Petitioner

ee eS

also made statements to the Court regarding his actions.

The trial court found that the alleged conspiracy distrib-

uted an amount of heroin in excess of 100 grams, and

applied the provision for sentence enhancement pursuant

to 21 U.S.C. § 841(b)(1)(A), which at the time of sentenc-

ing required a twenty-year sentence for amounts of her-

oin exceeding 100 grams. Consequently, petitioner was

sentenced to twenty (20) years of imprisonment on the

conspiracy count. Had the court not so enhanced the

sentence, petitioner would have faced a maximum of

fifteen (15) years. The court also imposed a five-year

sentence of imprisonment for tax evasion under count

two, a five-year sentence of imprisonment for tax evasion

under count three, and a five-year sentence of imprison-

ment for tax evasion under count four. The court ordered

that all sentences were to run consecutively.

On March 3, 1993, petitioner moved the trial court to

correct his illegal sentence pursuant to Federal Rule of

Criminal Procedure 35(a), or to vacate his conviction

pursuant to 28 U.S.C. § 2255. His motion raised two

issues:

1. Whether consecutive sentences imposed for

income tax evasion constituted impermissible

multiple punishments for a single offense, since

the tax evasion charges were based upon a con-

tinuous course of conduct.

2. Whether the trial court incorrectly imposed

an enhanced sentence under 21 U.S.C.

841(b)(1)(A), since the information did not

allege an offense punishable under that provi-

sion.

On March 1, 1994, the trial court denied this motion,

the Honorable June L. Green presiding. See, Appendix B.!

A timely notice of appeal was filed.

A panel of the United States Court of Appeals for the

District of Columbia Circuit affirmed the district court’s

denial of both of Petitioner’s motions in a per curiam

opinion on April 4, 1996. See Appendix A. The mandate

was issued, and judgment was accordingly entered on

May 29, 1996.

' On August 17, 1994, petitioner filed a second motion to

vacate sentence pursuant to 28 U.S.C. § 2255. Petitioner also

requested, and was granted, a stay of his appeal of the denial of

his first § 2255 motion. A motion for leave to supplement the

August 17th motion was filed on August 29, 1994, adding three

new issues to petitioner’s previously filed § 2255 motion. None

of the issues raised in petitioner’s second § 2255 motion is

raised in the instant Petition. The district court denied all of the

issues in petitioner’s second § 2255 motion on June 20, 1995. A

timely notice of appeal was filed upon the Court’s denial of the

second motion. The District of Columbia Circuit then

consolidated the two appeals.

<9 e.

REASONS FOR GRANTING THE WRIT

I. THE DISTRICT OF COLUMBIA CIRCUIT VIO-

LATED THIS COURT’S RULING IN BROCE v.

UNITED STATES BY AFFIRMING THE DENIAL OF

PETITIONER’S § 2255 MOTION DESPITE THE

FACT THAT PETITIONER’S PLEA WAS FACIALLY

INVALID AND PETITIONER’S SENTENCE WAS

ILLEGALLY IMPOSED.

A. Petitioner’s challenge of his facially invalid

plea is not precluded by this Court’s decision

in Broce v. United States.

Broce v. United States, 488 U.S. 563, 102 L.Ed.2d 927,

109 S.Ct. 757 (1989), stands for the general proposition

that a guilty plea constitutes a waiver of all claimed

defects in a prosecution except challenges to the jurisdic-

tion of the court. Specifically, in Broce, this Court held

that the defendant corporation’s guilty plea waived any

subsequent double jeopardy claim. However, the Broce

Court left open an exception to the general rule - an

exception never further developed by this Court, but

worthy of exploration in this case:

There are exceptions where on the face of the

record the court had no power to enter the

conviction or impose the sentence. Broce, 488

U.S. at 569.

The instant case involves the Court of Appeals for the

District of Columbia Circuit misapplying Broce to pre-

clude, rather than permit, petitioner’s double jeopardy

claim.

The Court of Appeals erred when it found, pursuant

to Broce, that petitioner had waived his Fifth Amendment

taken a plea. Petitioner’s conviction and sentence on

three separate counts which should properly have been

joined violated Petitioner’s Fifth Amendment’s right to

be protected from Double Jeopardy. This violation is

facially apparent from the information and the govern-

ment’s factual proffer at the time of the plea. Neverthe-

less, the District of Columbia Circuit held that

Petitioner’s claim was precluded by Broce. This holding

conflicts with this Court’s express exception carved out

by the Broce decision: that a guilty plea does not automat-

ically extinguish a double jeopardy claim which is appar-

ent on the face of the available information and does not

require the Court to create an evidentiary record. Broce,

488 U.S. at 569, 575.

;

right to be protected from Double Jeopardy by having |

t

This Court clearly held in Broce that it was not chang-

ing the general exception to the rule barring collateral

attack on a guilty plea. Broce, 488 U.S. at 574. This excep-

tion applies to a plea of guilty to a charge which the State

may not constitutionally prosecute. Menna v. New York,

423 U.S. 61, 63, n.2 (1975)(per curiam)(guilty plea does

not waive claim that, judged on its face, the court lacks

power to proceed). This Court has placed great weight in

the conclusive effect of guilty pleas on factual guilt. Tollett

v. Henderson, 411 U.S. 258 (1973). However, that reasoning

does not apply with regards to claims of Constitutional

violation where “the State may not convict [a] petitioner

no matter how validly his factual guilt is established.”

Menna, 423 U.S. at 63.

SAM aT? «

TEE.

A prosecution in violation of Double Jeopardy, which

is apparent on the face of the information, is just such a

conviction. Blackledge v. Perry, 417 U.S. 21 (1974). Thus, in

a case such as Petitioner’s, a challenge of a plea to a

facially duplicative information is not precluded by Broce.

In holding that Petitioner’s claim was so precluded, the

District of Columbia Circuit violated the prior holdings of

this Court.

B. Petitioner’s plea to charges in an information

which contained facially duplicative counts

violates his Fifth Amendment protection

against Double Jeopardy.

The Fifth Amendment protects against multiple pun-

ishments for a single offense. U.S. CONST. amend. V.;

United States v. Ursery, 518 U.S. __, 1996 WL 340815, 4

(U.S.)(1996); Albernaz v. United States, 450 U.S. 333, 343 n.

16 (1981). The government violates this protection when

it impermissibly divides a single criminal action into

separate counts of an information or indictment, and then

convicts and punishes for conviction on each of the

counts. United States v. Harris, 959 F.2d 246, 250 (D.C.Cir.

1992). Where consecutive sentences are imposed in a

single criminal trial, the role of the constitutional guaran-

tee of the double jeopardy clause “is limited to assuring

that the court does not exceed its legislative authorization

by imposing multiple punishments for the same offense.”

Brown v. Ohio, 432 U.S. 161, 165 (1977). In the instant case,

the plea arrangement facially violated these protections.

By affirming the lower Court’s conviction and sentence

on three separate counts of tax evasion in counts two

through four of the information, the Court of Appeals

upheld the government's decision to divide the continu-

ing course of conduct of Petitioner into three separate

counts. The result, upon his plea, was conviction and

sentence on three different counts — leading to a total

sentence on those portions of the indictment of fifteen

years, whereas Petitioner should have received a maxi-

mum penalty of five years for his actions which constitu-

ted criminal tax evasion.

Conduct constituting a single course of criminal

activity may properly be joined as one count in an indict- |

ment or information. United States v. Shorter, 809 F.2d 54

(D.C.Cir. 1987). In Shorter, the defendant was charged

with twelve separate years of tax evasion under a single

count of an indictment. Upon defendant’s claim that the

one count should have actually been prosecuted as

twelve separate counts, the Court held that the crime of

tax evasion in a case such as that was actually a single

criminal offense constituting a continuous criminal

motivation and merely covering a span of years. Shorter,

809 F.2d at 57. The nature of the conduct charged was

central to the determination of whether the acts constitu-

ted a continuing offense. Shorter, 809 F.2d at 56. Thus,

activities demonstrating a “cash lifestyle” were indica-

tions that the offense was single and continuing: appel-

lant had conducted all of his personal and professional

business in cash; maintained no bank accounts or office

records; never filed estimated tax returns. The arbitrary

calendar divisions did not affect the continuous nature of

the defendant’s behavior, and therefore the charge was

properly brought under one count. United States v.

Shorter, 608 F.Supp. 871, 878, n. 28 (D.C.D.C. 1985).

Accordingly, the Court of Appeals held that in a prosecu-

tion for tax evasion involving long-term criminal activity,

it was proper for the government to indict the entire

activity under one count. Shorter, 809 F.2d at 58.

ow

In the instant case, the government's Factual Proffer

at the time of the plea, combined with the defendant’s

statements to the Court, clearly details a continuous and

long-term pattern of activity. Appendix C. The Proffer

sets out in detail the criminal activity of petitioner, start-

ing in or around 1983 and running through the early part

of 1988. There is no significance assigned to any specific

year of criminal activity, save for a chart on page 17 of the

Proffer which attempts to break down Petitioner’s income

through estimates from the government’s evidence. The

Factual Proffer contains no evidence that Petitioner’s

actions were affected by the tax year, or that the dates of

the conduct had any effect on the investigations by the

government. Rather, the Factual Proffer, which the trial

court received and reviewed in approving the plea offer

and sentencing Petitioner, clearly establishes that Peti-

tioner’s actions were a continuous and long-term pattern,

consistent with the type of “cash lifestyle” that the Shorter

Court found to merit the joinder of charges under one

count. For example, the Proffer details purchases of auto-

mobiles and real property through “straw purchasers”

and purchases of jewelry “which is easily secreted and

difficult to trace.” Appendix C, 19. Thus, it is apparent

that the government should have, consistent with their

own stated policy, and the Court of Appeals’ analysis in

Shorter, charged Mr. Smith with one count of tax evasion

as a continuing offense. This charging error is readily

apparent from the face of the information and review of

the government’s Factual Proffer which was submitted to

the Court in support of the plea.

10

The information supported by the Government’s own

allegations in the factual proffer establishes that Peti-

tioner was charged and sentenced in three separate

counts for a continuous activity. Petitioner’s convictions

on Counts Three and Four should be vacated and his

sentence reduced accordingly.

Il. THE DISTRICT OF COLUMBIA CIRCUIT’S

AFFIRMANCE OF THE DENIAL OF PETI-

TIONER’S § 2255 MOTION CONFLICTS WITH

RULINGS OF THIS COURT AND OTHER CIR-

CUIT COURTS BECAUSE IT ALLOWS FOR CON-

VICTION AND SENTENCING ON A CRIME

OTHER THAN THAT WHICH IS CHARGED IN

AN INFORMATION.

The District of Columbia Circuit erred when it

affirmed the District Court’s denial of Petitioner’s 28

U.S.C. § 2255 Motion despite the fact that petitioner was

convicted and sentenced for a crime different than that

with which he was charged in the information. The Court

of Appeals, in its Memorandum, Appendix A, states that

“[Petitioner’s] claim is not supported by circuit prece-

dent. See United States v. Patrick, 959 F.2d 991, 996 n.5

(D.C. Cir. 1992).” In United States v. Patrick, the District of

Columbia Circuit held that the quantity of drugs pos-

sessed is not a constituent element of the offense of

possession with intent to distribute under 21 U.S.C.

§ 841(a). Patrick, 959 F.2d at 996, n.5. Accordingly, the

District of Columbia Circuit held that in the instant case,

the trial court could sentence Petitioner to an enhanced

period of incarceration without provision for such an

enhancement in the information. This conclusion fails to

ee

11

address the true fault with the District Court’s decision:

namely that Petitioner was convicted and sentenced for a

crime with which he was not charged in the information.

Petitioner was not sentenced under the Federal Sen-

tencing Guidelines. Thus, cases such as Patrick, which

deal with permitted enhancements under the Guidelines

are not on point. Rather, the inquiry must focus on the

charge as presented in the information versus the sen-

tence as declared by the lower Court. Petitioner was

charged in Count One of the information with distribu-

tion of unspecified amounts of heroin under Title 21

United States Code, Section 841(a). There is no mention in

the information of the weight of the drugs. Under

§ 841(b)(1)(A), an offense involving one hundred grams

or more of heroin is punishable by up to twenty years

imprisonment, a fine of up to $250,000.00 or both. Under

§ 841(b)(1)(B), an offense other than described in sub-

paragraphs (A) and (C) is punishable by up to fifteen

years imprisonment, a fine of not more than $125,000.00

or both. In the instant case, the information charged a

conspiracy to ‘distribute and possession with intent to

distribute “quantities of heroin” in violation of 21 U.S.C.

§ 846. Despite the absence of any allegation of quantity,

the District Court imposed a twenty year sentence and

$150,000.00 fine under § 841(b)(1)(A). Clearly, the infor-

mation could not, as a matter of law, support such an

enhanced penalty. Therefore, the sentence is illegal, and

the District of Columbia Circuit erred in upholding it

based on Patrick.

By allowing Petitioner’s conviction to stand, the Dis-

trict of Columbia Circuit contradicted holdings reached

12

by other circuits. Different circuits have held that allega-

tion of the quantity of drugs is a critical element under 21

U.S.C. § 841 and that absent specific allegation of weight,

the enhancemerit provisions of § 841(b)(1)(A) are inopera-

tive. See, United States v. Crockett, 812 F.2d 626, 629 (10th

Cir. 1987)(enhanced penalty on guilty plea to marijuana

charge illegal where no quantity alleged); United States v.

Alvarez, 735 F.2d 461, 467-68 (11th Cir., 1984)(striking

enhanced sentence for over 1000 pounds of marijuana

due to lack of allegation of quantity in the indictment.)

The reasoning behind these decisions is grounded in

the concept that in order for a plea to be “knowing and

voluntary”, Boykin v. Alabama, 395 U.S. 238 (1969), a

defendant must receive proper and complete notice of the

charges which he faces. Brady v. United States, 397 US.

742 (1970). In the instant case, Petitioner was charged in

Count One of the information with distribution of

unspecified amounts of heroin under Title 21 United

States Code, Section 841(a). He was sentenced under the

enhancement provisions of § 841(b). It is clear from the

record that Petitioner was sentenced for a crime which

the information did not charge. Such a conviction and

sentence violates Petitioner’s right to Due Process.

In following the Patrick decision and thus affirming

the district court’s denial of Petitioner’s motion under 28

U.S.C. § 2255, the District of Columbia Circuit contra-

dicted the findings of other Federal Circuits regarding the

ability of the District Court to impose a sentence which

corresponds to a charge which the information does not

allege. More importantly, the District of Columbia Circuit

ignored this Court’s holdings with regards to required

notice and Due Process considerations. For these reasons,

7 SOONERS OE p+

;

eee Uren rte —

13

this Court should grant certiorari and resolve this con-

flict.

CONCLUSION

For the reasons stated herein, Petitioner respectfully

requests that this Court grant certiorari and vacate the

ruling of the District of Columbia Circuit with orders for

the district court to resentence petitioner accordingly.

Mark J. ROCHON

ROCHON AND RoseErTs

504 Seventh Street, S.E.

Washington, D.C. 20003

(202) 546-1500

ia

APPENDIX TABLE OF CONTENTS

APPENDIX A - DECISION OF THE UNITED

STATES COURT OF APPEALS FOR THE DIS-

TRICT OF COLUMBIA CIRCUIT, DATED

ge Sg. MRE RAR - ApRSge Retire Ep ge onan la

APPENDIX B - MEMORANDUM AND ORDER

OF THE HONORABLE JUNE L. GREEN,

DENYING PETITIONER’S FIRST MOTION TO

VACATE SENTENCE UNDER § 2255, DATED

et MEO SORES Oe rey PSE ran a See 4a

APPENDIX C - FACTUAL PROFFER OF THE

UNITED STATES OF AMERICA IN SUPPORT

OF PETITIONER’S PLEA, DATED MARCH 16,

aa aaa a

la

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

| No. 94-3024 September Term, 1995

United States of America,

Appellee

v.

James E. Smith,

Appellant

Consolidated with 95-3091

Appeals from the United States District Court

for the District of Columbia

(No. 88cr00073)

(No. 88cr00073-01)

Before: Wittiams, RANDOLPH and TATEL, Circuit Judges.

JUDGMENT

(Filed Apr. 04, 1996)

This appeal was heard on the record from the United

States District Court for the District of.Columbia and on

the briefs and arguments of counsel. The court has

accorded the arguments full consideration and has deter-

mined that the issues presented occasion no need for a

published opinion. See D.C. Cir. Rule 36(b).

2a

Smith’s double jeopardy claim fails because any such

defense would require evidence outside the record and,

thus, was waived by his yuilty plea. See United States v.

Broce, 488 U.S. 563, 574-78 (1989). Smith’s argument that

the district court erred when it sentenced him under an

enhancement provision based on the quantity of drugs he

distributed fails as well. His assertion that the district

court failed to inform him at his plea hearing of his

exposure to a 20-year sentence under the enhancement

provision is simply incorrect as a factual matter. See

Defendant’s Appendix 67 (transcript of plea hearing). His

claim that the sentence enhancement was error because

the information did not contain any specification of drug

quantity is not supported by circuit precedent. See United

States v. Patrick, 959 F.2d 991, 996 n.5 (D.C. Cir. 1992).

Finally, Smith’s argument that his counsel was ineffective

in failing to appeal his sentence fails because Smith has

raised no argument that would have succeeded on direct

appeal and has not contested application of the direct

appeal standard to the arguments he raised.

For these reasons, it is ORDERED that the judgments

from which this appeal was taken be affirmed.

The Clerk is directed to withhold issuance of the

mandate herein until seven days after disposition of any

timely petition for rehearing. See D.C. Cir. Rule 41(a)(1).

FOR THE COURT:

Mark J. Langer, Clerk

BY: /s/ Eva Brown

Deputy Clerk

3a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff, Criminal. No.

‘i 88-0073

(JLG)

JAMES E. SMITH,

Defendant.

i

ORDER

(Filed Mar. 1, 1994)

The Court has considered Defendant’s Motion to

Correct Illegal Sentences or Alternatively to Vacate Judg-

ments pursuant to former Fed. R. Crim. P. 35(a) and 28

U.S.C. §2255, the Government’s Opposition, Defendant's

reply thereto, and the oral arguments presented at the

Hearing on the motion. For the reasons set forth in the

accompanying Memorandum, it is by the Court this 28th

day of February, 1994 hereby

ORDERED that Defendant’s motion is denied.

/s/ June L. Green

June L. Green

U.S. District Judge

4a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF

)

) Criminal

AMERICA, ) No. 88-0073

Plaintiff, (JLG)

V. )

JAMES E. SMITH,

Defendant. )

)

MEMORANDUM

(Filed Mar. 1, 1994)

On March 3, 1993 the Defendant, James E. Smith,

filed a Motion to Correct Illegal Sentences or Alter-

natively to Vacate Judgments [hereinafter “Def. Mot.”],

pursuant to former Fed. R. Crim. P. 35(a) and 28 U.S.C.

§ 2255 (1988). With this motion, the Defendant filed

excerpted copies of the Information of March 3, 1988, the

Government’s Factual Proffer [hereinafter “Proffer’] of

March 3, 1988, and the transcript from the March 16, 1988

plea hearing [hereinafter “Trans.”].

Mr. Smith asserts that two circumstances entitle him

to relief under 28 U.S.C. § 2255 (1988): first, designation of

consecutive sentences under 26 U.S.C. § 7201 (1988) vio-

lated the Constitution’s Fifth Amendment Double Jeop-

ardy and Due Process clauses, and second, his sentence for

violation of 21 U.S.C. §§ 841(a) (1982), amended by 21

U.S.C. 841(b) (Supp.II 1984), 846 (1988), was excessive

because the Government failed to allege that the offense

5a

charged in the Information involved 100 grams of heroin.

Def. Mot. at 1-3. The Court will address each assertion in

turn.

FACTS

On March 7, 1988 the United States filed an Informa-

tion charging the Defendant with conspiracy to distribute

and to possess with intent to distribute heroin under 21

U.S.C. § 841 (1982), amended by 21 U.S.C. § 841(b) (Supp. II

1984)! and 21 U.S.C. § 846 (1988) (Count One); income tax

evasion in 1984, 1985, and 1986 under 26 U.S.C. § 7201

(1988) (Counts Two, Three and Four).? In conjunction

with the Information, the Government filed a detailed

factual proffer.

The Government did not specify the amount of her-

oin involved in the conspiracy offense (Count One) in the

Information. The Government alleged in its factual prof-

fer that the Defendant sold quantities of heroin in excess

of 100 grams and also alleged that the defendant secreted

funds, bought properties through straw purchasers and

nominees, and did not pay federal income taxes in 1984,

1985, and 1986. Proffer at 17.

‘ The 1986 Amendment to this statute went into effect on

Nov. 1, 1987 as part of the Federal Sentencing Guidelines.

Pursuant to a plea agreement, Defendant was sentenced under

the pre-Guidelines version of the statute, 21 U.S.C. § 841 (1982),

amended by 21 U.S.C. § 841(b) (Supp.II 1984). This statute will be

referred to as 21 U.S.C. § 841 (1984).

2 The fifth count involved criminal forfeiture.

6a

In a plea agreement of February 6, 1988, Defendant

agreed to waive indictment and enter a guilty plea to the

five-part Information. Presentence Report [hereinafter

“Pres. Rept.”] at 5. Defendant stated in his March 16,

1988 plea hearing that his narcotics conspiracy continued

to operate subsequent to November 1, 1987, the date the

Federal Sentencing Guidelines and the revised version of

21 U.S.C. § 841 (1988) went into effect. Trans. at 34, 41.

However, the plea agreement stipulated that Defendant

would be sentenced under pre-Guidelines law. Pres. Rept.

at 5.

On June 3, 1988, the trial court sentenced the Defen-

dant to 20 years imprisonment and a $150,000 fine for

Count One, and five years imprisonment on each of the

three tax evasion Counts, for a total of 35 years. Upon

Defendant’s Motion, this Court reduced the Defendant's

sentence on Count One from 20 to 15 years in a July 30,

1992 Order.

DISCUSSION

To prevail on a collateral challenge to a sentence

under 28 U.S.C. § 2255 (1988), a defendant must sur-

mount a hurdle considerably higher than on direct

appeal. United States v. Pollard, 959 F.2d 1011, 1020

(D.C.Cir. 1992) 113 S.Ct. 322 (1992). Relief will issue only

if the Court determines that the challenged sentence

resulted from “a fundamental defect which inherently

results in a complete miscarriage of justice.” Id. (quoting

Hill v. United States, 368 U.S. 424, 428 (1962)).

a

7a

I. Defendant’s Challenge to his Sentence on Conspir-

acy Count

A. Introduction

In Count One of the Information, the Government

charged the Defendant with conspiracy to distribute and

to possess heroin with intent to distribute under 21 U.S.C.

§ 841 (1984) and 21 U.S.C. § 846 (1988). Information at 1.

He received an indeterminate sentence of 20 years and a

fine of $150,000 pursuant to 21 U.S.C. § 841(b)(1)(A)

(1984).

In his motion, the Defendant asserts that his sentence

was inappropriate because the Government failed to

allege in the Information that 100 grams of heroin were

involved in the narcotics conspiracy offense. Def. Mot. at

15-16. The Defendant argues that the Government was

required to allege the specific quantity of narcotics in its

indictment under the pre-Guidelines version of 21 U.S.C.

§ 841 to procure an enhanced sentence pursuant to § 841

(b)(1)(A) (1984). Id. The Defendant relies upon United

States v. Crockett, 812 F.2d 626 (10th Cir. 1987) and United

States v. Alvarez, 735 F.2d 461 (11th Cir. 1984), for this

proposition. The Defendant contends that absent such

allegation, the maximum legal sentence was 15 years and

a fine of $125,000 under 21 U.S.C. § 841(b)(1)(B) (1984).3

3 The government points out correctly that if the parties

had not stipulated to apply the pre-1987 statute, the Defend>nt

would have been subject o the 20 year indeterminate sentence

he received regardless of whether the Government proffered

evidence of quantity under 21 U.S.C. § 841(b)(1)(C) (1988).

Government’s Opposition to Defendant’s Motion to Vacate, Set

Aside, or Correct Sentence [hereinafter “Gov. Opp.”] at 11-12.

8a

Def. Mot. at 15-16. The Defendant does not illustrate that

the lack of specificity in The Information constituted a

fundamental defect resulting in a miscarriage of justice.

Therefore, the Court denies the Defendant’s motion with

respect to Count One.

B. Discussion

In the absence of case law from this jurisdiction

concerning specification of quantity under the pre-Guide-

lines statute, the Defendant relies upon Alvarez and Crock-

ett to show that the Government’s failure to identify a

specific quantity of heroin in the Information is cause to

reduce or vacate his sentence. In those cases, the defen-

dants received enhanced sentences pursuant to 21 U.S.C.

§ 841(b) because the sentencing courts determined defen-

dants’ conspiracies involved a certain quantity of illegal

drugs. Crockett, 812 F.2d at 628-29; Alvarez, 735 F.2d at

466-68. The courts did so absent the specific allegations of

quantity in the indictment required under § 841(b) to

validate tne enhanced penalty. Id. On appeal, the courts

found the indictments had not informed the defendants

that they would be subject to the enhanced penalty, and

therefore granted motions for resentencing under the

lesser penalty provisions of 21 U.S.C. § 841. Id.

The Government contends that Crockett and Alvarez

are distinguishable from the instant case because they

involved direct appeals, while the instant case involves a

collateral attack under 28 U.S.C. § 2255 (1988). Gov. Opp.

at 15. The Government argues that although lack of speci-

ficity in the Information may have been grounds for relief

on direct appeal, it does not rise to the level of a complete

9a

miscarriage of justice in Mr. Smith’s case. Id. (citing United

States v. Frady, 456 U.S. 152, 166 (1982) (defendant must

clear a significantly higher hurdle and prove a complete

miscarriage of justice to obtain collateral relief)). Thus,

the Government asserts that lack of specificity is not

grounds to invalidate a sentence on collateral appeal.

Gov. Opp. at 15.

The Government maintains that punishing the Defen-

dant for possessing 100 grams of heroin cannot amount to

a manifest injustice because the Defendant had actual

notice of the quantity of heroin known to the Govern-

ment. Id. at 15-16. The Government emphasizes that

Defendant admitted to possession of over 100 grams of

heroin on one occasion alone out of numerous admitted

occasions. Id. at 16 (quoting Proffer at 16); Trans. at 23. In

addition, the record indicates that Mr. Smith admitted in

a plea agreement to having sold over 500 grams of heroin

and therefore was fully aware that the Government had

evidence which exceeded the 100 gram requirement of 21

U.S.C. § 841 (1984). Pres. Rept. at 2-3.

The Court recognizes the need to supply the Defen-

dant with notice of the charges levied against him. This

notice requirement is one of the fundamental concerns

underlying indictment specificity criteria. See Hamling v.

United States, 418 U.S. 87, 117-18 (1984); United States v.

McDonald, 777 F.Supp. 43, 44 (D.D.C. 1991), aff'd 991. F.2d

866 (D.C.Cir. 1993). The Government argues that no mani-

fest injustice occurred when the Information did not state

a specific amount of heroin, because notice, the funda-

mental purpose underlying indictment specification, was

supplied to the Defendant in this case. Thus, the defect

that Defendant cites was only a technical deviation, and

ee

10a

did not rise to the level of a “fundamental defect” which

would entitle the Defendant to relief under 28 U.S.C.

§ 2255 (1988). See Pollard, 959 F.2d at 1011, 1028 (govern-

ment’s breach of “facts and circumstances” limitation in

plea agreement not considered a fundamental defect and

§ 2255 relief denied).

This Court also acknowledges that courts have been

willing to uphold enhanced sentences on both direct and

collateral appeal in the absence of specific allegations of

quantity in indictments when Defendants had actual

notice of chargeable quantity. United States v. Olness, 9

F.3d 716, 717 (8th Cir. 1993) (direct appeal); United States

v. Gibbs, 813 F.2d 596, 599-601 (3d Cir. 1987), cert. denied

484 U.S. 822 (1987) (collateral relief denied). In Olness the

government’s statement of quantity of narcotics was

included in the plea agreement, but was absent in the

indictment. Id. The court held that defendant received

sufficient notice of the possibility of sentencing under the

enhanced penalty provision. Id. As in Olness, the Defen-

dant in this case admitted to possession of over 100

grams of heroin in the plea agreement. Pres. Rept. at 2-3;

Proffer at 17-23. Similarly, it follows that the Defendant

had notice of quantity and of the applicability of the

enhanced penalty provision regardless of the wording of

the Information.

The Government demonstrated sufficiently that Mr.

Smith had actual knowledge that the Government had

and intended to present evidence that he possessed over

100 grams of heroin. As a result, Mr. Smith was aware at

sentencing that he was liable to be sentenced under

enhanced penalty provision of 21 U.S.C. § 841(b) (1) (A)

(1984). The Government has convinced this Court that

lla

this actual notice of chargeable quantity satisfied the

fundamental purpose behind indictment specificity.

Accordingly, this Court finds that no fundamental miscar-

riage of justice occurred when the trial court sentenced

Mr. Smith to an enhanced penalty under 21 U.S.C.

§ 841(b) (1984), despite the lack of specification of quan-

tity in the indictment.

C. Conclusion

Having considered the allegations set forth in Mr.

Smith’s claim of illegal sentencing, the Court holds that

Mr. Smith was properly sentenced under 21 U.S.C. § 841

(1984). Notwithstanding the lack of specific reference to a

quantity of heroin in the Information, the Defendant’s 15-

year prison sentence and $150,000 fine will remain undis-

turbed.

II. Defendant’s Challenge to Sentences Under 26

U.S.C. § 7201

A. Introduction

In Counts Two, Three and Four of the Information,

the Government charged the Defendant with tax evasion

under 26 U.S.C. § 7201 (1988) for 1984, 1985, and 1986

respectively. The Defendant pled guilty to each count and

received three five-year sentences.

The Defendant asserts that the Court erred by sen-

tencing him to separate sentences for Counts Two, Three,

and Four and not sentencing him to one single count of

income tax evasion. Def. Mot. at 3. He contends that the

12a

Government did not present evidence sufficient to prove

three consecutive violations of 26 U.S.C. § 7201 (1988),

but rather presented proof of only one count of tax eva-

sion based on a continuous course of conduct. Defen-

dant’s Memorandum of Points and Authorities

Supporting Motion to Correct Illegal Sentence or Alter-

natively to Vacate Judgments [hereinafter “Def. Memo.” ]

at 5, 6. He argues that § 7201 is ambiguous with respect to

whether Congress intended multiple sentences to issue

for multi-year tax evasion charged as a single continuing

offense. Def. Reply at 2. As a result of such ambiguity, he

claims the issuing of multiple sentences violated the Dou-

ble Jeopardy Clause of the Constitution’s Fifth Amend-

ment, and therefore, the Court should apply the rule of

lenity and reduce his prison sentence to one five-year

sentence. Id. The Defendant fails to show that issuance of

multiple sentences resulted in a fundamental miscarriage

of Justice. Therefore, the three five-year sentences will

remain undisturbed.

B. Discussion

Both the Defendant and the Government recognize

that the D.C. Circuit has interpreted the language of 26

U.S.C. § 7201 (1988) as authorizing the government to

charge violations taking place in consecutive years as

either separate offenses or as a continuing course of

conduct. United States v. Shorter, 608 F.Supp. 871, 876

(D.D.C. 1985), aff'd 809 F.2d 54 (D.C.Cir. 1987), cert. denied,

484 U.S. 817 (1987). In cases brought under 26 U.S.C.

13a

§ 7201 (1988), the allowable unit of prosecution is con-

trolled by the affirmative act or acts of evasion.* United

States v. Pollen, 978 F.2d 78, 85-86 (3d. Cir. 1992), cert.

denied, 124 L.Ed.2d 244 (1993). To adequately charge sepa-

rate counts, the Government must support each count

with evidence of an affirmative act of tax evasion which

occurred in that specific year. United States v. Conley, 826

F.2d 551, 557 (7th Cir. 1987), cited in, United States v.

McGill, 964 F.2d 222, 229-30 (3rd"Cir. 1992), cert. denied,

113 S.Ct. 664 (1992) (pattern of cash withdrawals from

bank held to be an affirmative act). The Government must

present and prove three elements to establish an affirma-

tive act of criminal tax evasion under 26 U.S.C. § 7201

(1988): 1) an attempt to evade or defeat a tax or payment

thereof; 2) an additional tax due or owing; and 3) willful-

ness. Sansone v. United States, 380 U.S. 343 (1965).

Defendant contends that the Government has not met

the evidentiary burden of proving separate affirmative

acts for each year. Def. Mot. at 5-7; Def. Memo. at 3-6. He

argues that the Government proved only one course of

conduct. Id. The Defendant urges the Court to apply the

reasoning of United States v. Shorter, 608 F.Supp. at 875-78.

In that case, the D.C. Circuit held that the indictment of

the defendant on one count of tax evasion for a contin-

uous course of conduct was proper for offenses spanning

multiple consecutive years. Id. Mr. Smith argues that the

4 Because the court concludes that § 7201 is not ambiguous

with regard to the allowable unit of prosecution, the court will

not address Defendants arguments with regard to the rule of

lenity. Def. Memo. at 8-9.

14a

proof the Government presented in his case was indis-

tinguishable from that offered in Shorter, Def. Mot. at 5-7.

Therefore, he argues, it must also be proper in this case to

charge and sentence him to one offense based on a con-

tinuous course of conduct. Id.

The Government points out correctly that the Defen-

dant’s reliance on Shorter in this context is misplaced.

Gov. Opp. at 7-10. The Shorter court ruled on the issue of

duplicity: whether it was permissible for the Government

to charge tax evasion spanning multiple years as one

offense. Shorter 608 F.Supp at 875-78. The Shorter ruling

did not relate to the issue of multiplicity: whether the

government may charge continuing tax evasion in con-

secutive years as separate offenses, which is the disputed

issue in the instant case.°

In his motion, Defendant dissects the evidence

presented attempting to show that the Government did

not link these affirmative acts of tax evasion, including a

cash lifestyle and purchases of automobiles and real

property through straw purchasers or nominees, to each

specific year. Def. Memo. at 4-6. The Government main-

tains that it presented sufficient evidence linking an affir-

mative act with each specific tax year, and therefore

asserts that the sentences ordered pursuant to each count

were legal and appropriate. Gov. Opp. at 8-10.

The Government presents plentiful evidence of

attempts to evade taxes in each of the three years. The

5 In Shorter the government was barred from charging in

more than one count due to statute of limitations restrictions.

Shorter, 608 F. Supp. at 873-74.

15a

Government's Factual Proffer contains evidence of the

“increase in defendant’s net worth in each tax year

[including] . . . records of (1) cash deposits by defendant

in numerous bank accounts; and (2) payments to acquire

numerous residential properties.” (emphasis added) Prof-

fer at 18. The Government also presented evidence that

.. . expenditures in each tax year would include

records and testimony reflecting (1) expendi-

tures for the purchase of more than twenty-five

automobiles during the period 1984 though

1986; (2) expenditures to insure and maintain

defendant’s numerous residential properties,

two apartments and his fleet of automobiles; (3)

expenditures to acquire numerous pieces of gold

jewelry. .. . Id. at 18, 19. (emph. added)

In addition, the Government's proffer contains evidence

of taxes due after the Defendant earned the following

amounts and failed to file a federal income tax return in

each of the three tax years: 1984 — $101,084.74 ($36,170.65

taxable), 1985 — $93,020.10 ($31,797.35 taxable), and 1986 -

$411,392.11 ($147,256.06 taxable). Id. at 17.

Finally, the Government met the willfulness element

of the test put forth in Sansone v. United States because the

Factual Proffer contains evidence of the Defendant's prior

conviction for evasion of federal income taxes as proof of

Defendant’s knowledge of the legal duty to pay taxes and

willful evasion of that duty in each of the three years.

Proffer at 20.

The record reflects that the Government presented

sufficient evidence of affirmative willful acts of tax eva-

sion in each of the 1984, 1985 and 1986 tax years in its

Information and accompanying Factual Proffer to justify

l6a

charging consecutive counts of tax evasion. Thus, this

Court finds that the Government’s Information was not

impermissibly multiplicitous and Mr. Smith’s claim

advanced under the Double Jeopardy Clause fails.

C. Conclusion

Having considered the allegations in Defendant’s

motion with respect to Counts Two, Three and Four of the

Information, this Court holds that the Defendant was

sentenced properly to three consecutive five-year sen-

tences under 26 U.S.C. § 7201 (1988). Therefore, the

Defendant’s sentences under Counts Two, Three, and

Four will remain undisturbed.

CONCLUSION

The Court has considered Mr. Smith’s arguments in

favor of correcting his sentence or vacating the judgments

of the sentencing court pursuant to 28 U.S.C. § 2255

(1988). Based on the filings, oral argument, and the con-

trolling legal authority, the court rejects Mr. Smith’s

claims of failure to specify the amount of narcotics in

Count One and multiplicity with regard to Counts Two,

Three and Four.® Therefore, the Defendant’s motion shall

6 As the Court has rejected both of Defendant’s claims on

their merits, this Court will not address the Government’s

argument that the Defendant’s claims are barred by his failure

to directly appeal his sentences.

17a

be denied. An appropriate Order accompanies this mem-

orandum.

/s/ June L. Green

June L. Green

U.S. District Judge

Dated:

Feb. 28, 1994

18a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES Criminal No.

)

OF AMERICA ) 88-0073BDP

)

se ) (Filed Mar. 16, 1988)

JAMES E. SMITH )

Defendant )

)

GOVERNMENT’S FACTUAL PROFFER

The United States of America, by its attorney, the

United States Attorney for the District of Columbia, pur-

suant to Rule 11(f) of the Federal Rules of Criminai Pro-

cedure, submits the following proffer of its evidence in

support of defendant James E. Smith’s proffered plea of

guilty to the Information filed on March 7, 1988. That

Information charged the defendant with one count of

conspiracy to distribute and possess with intent to dis-

tribute a controlled substance, that is, heroin, in violation

of 21 U.S.C. § 846. The Information also charged defen-

dant with three counts of tax evasion for calendar years

1984, 1985 and 1986 in violation of 26 U.S.C. § 7201.

Finally, in the fifth count of the Information the United

States charged the criminal forfeiture of defendant’s

right, title and interest in certain real and personal prop-

erty pursuant to 21 U.S.C. § 853(a)(1). The following is a

proffer of the Government's evidence as it relates to each

Count of the Information.

19a

Count One - Narcotics Conspiracy

1. If this case were to proceed to trial, the govern-

ment’s evidence would include post-arrest admissions

made by SMITH regarding his involvement in a narcotics

distribution conspiracy, as well as the testimony of wit-

nesses, including an undercover Drug Enforcement

Administration (DEA) agent, who have purchased heroin

directly from SMITH. Following his arrest, and after

being advised of his constitutional rights, SMITH admit-

ted that he had sold substantial quantities of heroin to

Undercover Agent (U/A) Veronica Baker, as well as to

one DeVoyce Gaye Caviness, the cooperating witness

who first introduced Agent Baker to SMITH. SMITH

admitted that he had been selling heroin to DeVoyce

Gaye Caviness, and her associates, since 1979.1

2. In addition to the testimony of Agent Baker and

DeVoyce Gaye Caviness, the government would call sev-

eral other witnesses at trial who would testify regarding

purchases of heroin made from SMITH. Among those

witnesses would be Everett Bagley.?

3. Everett Bagley will testify that he first met

SMITH, referred to as SMITTY or HEAD, in the early part

' DeVoyce Gaye Caviness, who is identified in Count One

of the information as a co-conspirator of SMITH, would be

called as a government witness if this case were to proceed to

trial. Caviness has been recently admitted to the Witness

Security Program. Caviness’ expected testimony is described in

paragraphs 8-28, infra.

2 Everett Bagley. who was known to defendant JAMES E.

SMITH as “Fair Play” or “Rabbit”, assumed a new identity upon

his admission to the Witness Security Program.

20a

of 1960. Bagley purchased heroin from SMITH in the

summer of 1983, when Bagley made trips from Richmond

to Washington to buy SMITH’s heroin. Bagley will testify

that he purchased “spoon” quantities of heroin three to

four times every week from the summer of 1983 until

June of 1984, when Bagley was arrested. Bagley will

testify that on one occasion in 1983 he obtained one half

kilogram of heroin from SMITH for $75,000 and delivered

it to a person in Richmond for SMITH. Bagley will further

testify he had personal knowledge that one of SMITH’s

lieutenants was also receiving SMITH’s heroin during

this same time. Both SMITH and the lieutenant were

identified by Bagley from an array of photographs.

4. After Bailey began cooperating with DEA investi-

gators, he made a series of controlled purchases of heroin

from SMITH through the lieutenant. Government testi-

mony would show that during these purchases, as

explained below, the lieutenant maintained contact with

SMITH. For example, on September 13, 1984, the lieuten-

ant delivered Exhibit #1, 3.57 grams of brown powder,

which was later analyzed as 40.8% heroin, to Bagley for

$1600 in advanced official government funds. The lieu-

tenant’s delivery of Exhibit #1 to Bagley was conducted

under the controlled supervision of members of the Orga-

nized Crime Drug Enforcement Task Force (OCDETF) in

the following manner. Bagley first personally contacted

3 In a heroin distribution organization a “lieutenant” is a

trusted individual who has supervisory authority over others in

the organization and ready access to the head of the

organization. The individual through whom Bagley purchased

heroin from SMITH will be hereinafter referred to as “the

lieutenant.”

2la

the lieutenant for the purpose of obtaining heroin. The

meeting between the lieutenant and Bagley was surveil-

led. Surveillance units subsequently observed the lieuten-

ant go to a pay station telephone and dial a number and

then hang up the phone. Detective Barbara Hampton then

observed that a “clone” of the digital pager utilized by

SMITH was activated and displayed the telephone

number of the same pay station where the lieutenant was

now waiting for a call. Approximately two minutes later

the lieutenant was observed to answer the pay telephone.

Subsequent observations made by OCDETF agents dur-

ing the evening hours of September 12, 1984, showed the

lieutenant contacted SMITH through the use of SMITH’s

digital pager two additional times. Bagley told Detective

Hampton that the lieutenant told him the lieutenant had

ordered and received the heroin (Exhibit #1) from

SMITH.

5. On September 20, 1984, the lieutenant delivered

Exhibit #2, 4.96 grams of white powder, which was later

analyzed as 32.8% heroin, to Bagley for $3200 in

advanced official government funds while Bagley was

under the controlled supervision of members of the

OCDETF. Surveillance of this purchase by members of the

OCDETF and the monitoring of the “clone” of SMITH’s

digital pager, revealed the lieutenant contacted SMITH on

three occasions prior to the purchase of exhibit #2, and

that Exhibit #2 was brought to the lieutenant by two

unidentified Black male subjects who arrived in a 1974

Audi which was occupied by SMITH. Bagley told Detec-

tive Barbara Hampton that the lieutenant had telephoned

SMITH to arrange for the delivery of Exhibit #2 to Bagley.

22a

6. On October 5, 1984, SMITH and the lieutenant

delivered to Bagley Exhibit #3, 5.43 grams of brown

powder, later analyzed as 31.9% heroin, for $3,200 in

advanced official government funds. Again Bagley was

under the controlled supervision of OCDETF agents. Sur-

veillance of the purchase of Exhibit #3 and monitoring of

the “clone” of SMITH’s digital pager by OCDETF agents

revealed that the lieutenant utilized the pager on

numerous occasions during the evening hours of October

4 and 5 to contact SMITH. SMITH subsequently delivered

the heroin to the lieutenant, who delivered it to Bagley.

Bagley saw SMITH bring the heroin to the lieutenant.

Additionally the lieutenant told Bagley that he (the lieu-

tenant) contacted SMITH through SMITH’s pager,

ordered the heroin from SMITH, and that SMITH brought

the heroin to him (the lieutenant).

7. Another witness who would testify on behalf of

the government if this case were to proceed to trial will

be hereafter referred to as W-2. Within the past two years,

W-2 was convicted of Felony narcotics charges for distri-

bution of heroin. W-2 will testify that it was first intro-

duced to JAMES E. SMITH in 1983 or 1984 and that the

purpose of the introduction was to obtain narcotics from

SMITH. W-2 began obtaining heroin from SMITH shortly

after the introduction and continued doing so until 1985.

W-2 will testify that during this period it purchased her-

oin from SMITH on as many as ten separate occasions.

On each such occasion, W-2 purchased twenty to forty

“spoons” of heroin from SMITH. W-2 will testify that it

would pay SMITH $500 per spoon and was told by

SMITH that the heroin would take a “ten or eleven cut”,

meaning the heroin could be substantially diluted before

23a

it was packaged for street sale. W-2 will further testify it

could make 35 to 40 quarters of heroin from one spoon of

heroin provided by SMITH. W-2 will testify that SMITH

made the heroin deliveries directly to W-2 and picked up

the money directly from W-2, at a location in the District

of Columbia.

8. Another government witness would be DeVoyce

Gaye Caviness, who first began cooperating in this inves-

tigation after being contacted on October 19, 1987, by

Detective Barbara Hampton and other agents of the

DEA/MPD Narcotics Task Force (NTF). Ms. Caviness had

been the subject of an NTF investigation during which

she had made a number of heroin sales to an undercover

police officer known to Caviness as “CC.” During a

debriefing, on October 19, 1987, following advice of her

Constitutional rights, Caviness disclosed that all the her-

oin she sold she obtained from James E. SMITH, also

known to her as “SMITTY.”

9. Caviness will testify that she had become

acquainted with SMITH in 1979 through an old boyfriend

with whom she lived. Caviness’ boyfriend was receiving

regular and frequent visits from SMITH who entered

their residence with paper bags which he gave to the

boyfriend. Each time SMITH delivered a paper bag to the

boyfriend SMITH received a quantity of money in

exchange. On one occasion Caviness knocked over one of

the paper bags on a shelf in the closet and inside the

paper bag observed sandwich bags containing little bags

of white powder. Caviness, believing the powder was

cocaine, inquired of her boyfriend who told her the pow-

der was heroin. On other occasions Caviness observed

her boyfriend remove packages of powder from the paper

24a

bags delivered by SMITH, packages which Caviness’ boy-

friend would sell for $25 each. Caviness stated that

SMITH continued to make regular deliveries to her boy-

friend until 1984.

10. Caviness will testify that in June, 1984, she left

the apartment where her boyfriend was selling heroin

ard moved to 202 Elmira Street, S.W., Apartment 413,

Washington, D.C., where she lived until recently with her

three children. Due to her separation from her boyfriend

and his subsequent arrest, Caviness needed money. Her

cousin gave Caviness a telephone number for SMITH.

Caviness called SMITH and he came to see her. SMITH

told Caviness he had no money but said he could give her

“a few shoes to work with.” (“Shoes” is a code word used

by narcotics traffickers to refer to heroin.) Shortly thereaf-

ter, SMITH gave Caviness twenty-five (25) “quarters” (a

term for a package Containing an individual street dos-

age unit of heroin). SMITH told Caviness that she owed

him $13.50 for each quarter. Caviness sold all the quarters

to one individual for five hundred dollars ($500.00) from

which she paid SMITH and kept the remainder. Thereaf-

ter Caviness continued to receive heroin from SMITH on

a weekly basis. By June of 1987, Ms. Caviness was receiv-

ing one thousand quarters a month from SMITH. On

several occasions she had helped SMITH package his

heroin into quarters for sale on the streets

11. In March, 1987, an undercover DEA Agent

began purchasing heroin from Caviness. Caviness and

the undercover agent would testify to the following facts

regarding these sales of heroin which was provided to

Caviness by SMITH. On March 9, 1987, Caviness deliv-

ered a quantity of heroin to an undercover DEA agent

25a

known to Caviness as “CC”. Caviness received the heroin

from SMITH earlier that day. After delivering the heroin

to “CC”, Caviness received one thousand dollars

($1,000.00) from “CC” of which she gave SMITH six hun-

dred fifty dollars ($650.00) on March 11, 1987. The fifty

(50) “quarters” received from Caviness were later

analyzed as 16.897 grams of white powder which was

2.8% heroin.

12. On March 23, 1987, Caviness again delivered a

quantity of heroin to “CC” in exchange for one thousand

dollars ($1,000.00). SMITH had earlier brought this heroin

to Caviness. Once again Caviness subsequently paid

SMITH six hundred fifty dollars ($650.00) for the heroin

she received from him. The fifty (50) “quarters” pur-

chased by “CC” from Caviness were later analyzed as

12.01 grams of white powder which was 4.0% heroin.

13. On May 11, 1987, Caviness delivered a quantity

of heroin to “CC” and was paid one thousand dollars

($1,000). SMITH had previously delivered this heroin to

Caviness in a paper bag at the front of her apartment

building. After being paid on delivery by “CC”, Caviness

paid SMITH six hundred fifty dollars ($650.00) for the

heroin. The fifty (50) “quarters” purchased from Caviness

were later analyzed as containing 7.96 grams of white

powder which was 5.0% heroin.*

14. On June 1, 1987, Caviness delivered fifty (50)

“quarters” of heroin to “CC” and was paid one thousand

dollars ($1,000.00). Earlier that day SMITH had come to

4 There was an “extra” quarter which contained .211 grams

of white powder which was 5.0% heroin.

26a

her residence to deliver the heroin. Caviness saw SMITH

drive into the block and leave. SMITH later called Cavi-

ness with instructions to come to meet him. When she

met him,SMITH gave Caviness the heroin and explained

that something did not “look right as he drove through

her block so he changed the site of the delivery. Caviness

was paid on delivery by “CC” and subsequently, paid

SMITH six hundred fifty dollars ($650.00). The fifty (50)

“quarters” were later analyzed as 6.036 grams of white

powder which was 5.7% heroin.

15. On September 25, 1987, Caviness delivered

forty-six (46) “quarters” of heroin to “CC”. She charged

him fifteen dollars ($15.00) a “quarter” instead of her

normal charge of twenty dollars ($20.00) per “quarter.”

She had discovered the heroin in a bag in her closet while

cleaning the closet. It was part of an earlier delivery from

SMITH which had been misplaced. She kept the entire six

hundred ninety dollars ($690.00) that “CC” paid her. The

forty-six (46) quarters contained 5.322 grams of white

powder which was 5.9% heroin and .862 grams which

was 2.7% heroin according to the laboratory report.

16. Early in October, 1987, “CC” telephoned Cavi-

ness and ordered one thousand (1,000) “quarters” of her-

oin. Using her telephone Caviness relayed this order to

SMITH and on October 7, 1987 SMITH delivered two

hundred fifty (250) “quarters” to Caviness at the front

door of her apartment building. SMITH explained that

this was all he had on hand and that Caviness should

give it to “CC” and see how “CC” liked it. On October 8,

1987, Caviness delivered the two hundred fifty (250)

“quarters” to “CC” and again charged him fifteen dollars

($15.00) per “quarter.” “CC” paid her three thousand

27a

eight hundred fifty dollars ($3,850.00) and Caviness sub-

sequently paid SMITH three thousand dollars ($3,000.00).

The two hundred fifty quarters were later analyzed as

78.22 grams of white powder which was approximately

6.0% heroin.

17. On October 30, 1987, DeVoyce Gaye Caviness,

after being approached by law enforcement authorities

and with the advice of her attorney, entered into a plea

agreement with the United States. That agreement

required that Caviness plead guilty to three felony counts

and cooperate fully with federal law enforcement author-

ities in investigating the narcotics conspiracy in which

she was involved. This cooperation includes testimony

before the Grand Jury and at trial. Ms. Caviness also

consented to the monitoring of all incoming and outgoing

telephone calls on the telephone number (202) 562-2778 at

202 Elmira Street, S.W., Apartment 413, Washington, D.C.,

subscribed to by her in her maiden name of Gaye Hanc-

ock. Thereafter, Caviness made additional purchases of

heroin from SMITH while under the supervision of DEA

agents. Caviness also introduced to SMITH Special Agent

Veronica Baker who also made heroin purchases from

SMITH. Caviness and Specie! Agent Baker would testify

to the following facts regarding these heroin purchases

from SMITH.

18. On November 6, 1987, Caviness telephoned

SMITH and ordered two hundred and fifty (250) quarters

of heroin. During a tape recorded conversation, SMITH

told Caviness “that’s no problem”.5 On November 8,

> In this telephone conversation between Caviness and

SMITH regarding the purchase of heroin, as well as other such

28a

1987, during the late evening hours SMITH came to the

Caviness’ residence and picked her up. SMITH drove

Caviness to one of his (SMITH’s) residences located at

12216 Parkton Street, Fort Washington, Maryland. During

the early morning hours of November 9, 1987, while

inside the Parkton Street residence, SMITH delivered

Exhibit #12, approximately eight hundred and fifty (850)

quarters of white and brown powder to Caviness. SMITH

told Caviness she owed him $13.50 for each quarter.

Caviness would testify that at about 8:00 a.m. (11-09-87)

SMITH drove her, along with the 850 quarters of heroin,

back to her residence in Southwest Washington, D.C.

Special Agent Veronica Baker, subsequently assumed pos-

session of Exhibit #12. Subsequent laboratory analysis

disclosed that Exhibit #12 was 179.42 grams of white and

brown powder which was approximately 7.0% heroin. At

a later date, Caviness paid SMITH $11,475 in advanced

official government funds for Exhibit #12.

19. On November 20, 1987, SMITH came to Cavi-

ness residence in Washington, D.C., and delivered

Exhibits #13, #14, and #15. Exhibit #13 consists of 2.53

grams of white powder analyzed as 3.6% heroin. Exhibit

#14 consists of 2.62 grams of white powder analyzed as

3.6% heroin. Exhibit #15 consists of 3.06 grams of white

powder which the laboratory found to be 81% cocaine.

SMITH delivered the exhibits to Caviness in the presence

of Special Agent Baker who was serving in an undercover

conversations described below, SMITH uses code-words to refer

to heroin. SMITH’s use of code-words to refer to heroin has been

explained by Caviness, which explanation is corroborated by

SMITH’s subsequent deliveries of heroin as described, infra.

29a

capacity. SMITH did not charge Caviness for Exhibit #13,

#14, and #15, but requested that she get the »ar i-ages

tested for him.

20. On November 26, 1987, SMITH delivered

Exhibit #16 to Caviness while in the. Southwest area of

Washington, D.C. Exhibit #16 consists of 3.147 grams of

white powder analyzed as 6.5% heroin. A DEA agent

assumed possession of Exhibit #16 from Caviness. During

conversation with Caviness, SMITH again requested that

Caviness get the heroin tested for him and did not charge

Caviness for the sample of heroin.

21. On December 3, 1987, the Honorable Louis F.

Oberdorfer signed an order authorizing the interception

of wire communications over Ms. Caviness’ telephone at

202 Elmira Street, S.W., apartment 413, Washington, D.C.

On January 2, 1988 interceptions were terminated upon

the expiration of authorization. Authorization was

renewed by Judge Oberdorfer on January 13, 1988 and

interception continued until SMITH’s arrest on February

6, 1988.

22. On December 4, 1987. Caviness again called

SMITH and ordered two hundred and fifty (250) quarters

of heroin from SMITH. This telephone conversation was

recorded. On this same date, while at Caviness’s resi-

dence, SMITH delivered to Caviness Exhibit #17, which

consists of 81.55 grams of white powder analyzed as 5.4%

heroin. Special Agent Baker, who witnessed the delivery

while serving in an undercover capacity, subsequently

assumed possession of Exhibit #17. On December 11,

1987, SMITH came to Caviness’ residence where Caviness

paid SMITH $4,050 in advanced official government

30a

funds for Exhibit #17. A surveillance conducted by Task

Force members, during the receipt of the $4,050 by

SMITH at Caviness’ residence, revealed that SMITH was

operating a 1988 Chevrolet Pick-up Truck, displaying

Maryland registration 428-327. Task Force members

observed SMITH leave Caviness’ residence, enter the

1988 Chevrolet truck and leave the area. The Maryland

Department of Motor Vehicles records show that tag

number 428-327 is registered to James Edwood SMITH at

12216 Parkton Street, Fort Washington, Maryland. The

1988 Chevrolet truck has vehicle identification number

(VIN) #1GCFK24K4JZ111370.

23. On December 13, 1987, SMITH telephoned Cavi-

ness. Caviness told SMITH her customer was ready for

two hundred and fifty (250) more quarters and would be

wanting 250 every week. SMITH told her that that would

be no problem. This conversation was recorded. On

December 16, 1987, SMITH delivered to Caviness Exhibit

#18, which consists of 68.83 grams of white powder

analyzed as 6.6% heroin, and 4.01 grams of brown pow-

der analyzed as 2.5% heroin. An investigator from the

Task Force assumed possession of Exhibit #18 from Cavi-

ness. On December 23, 1987, SMITH came to Caviness’

apartment to receive payment for Exhibit #18. Inside the

apartment, Special Agent Baker while serving in an

undercover capacity paid SMITH $3,955 in advanced offi-

cial government funds for Exhibit #18.

24. On December 28, 1987, Caviness ordered a

“spoon” of heroin from SMITH. On December 29, 1987,

SMITH delivered Exhibit #19, a quantity of white and tan

powder along with some cutting (diluting) materials to

Caviness while in Southwest Washington, D.C. Special

3la

Agent Baker assumed possession of Exhibit #19 from

Caviness, and later turned Exhibit #19 over to affiant

Detective Hampton. Exhibit #19 was analyzed as 3.56

grams of white and tan powder which was 54% heroin.

Caviness paid SMITH $550 for Exhibit #19.

25. On January 2, 1988, SMITH again telephoned

Caviness. During the conversation Caviness ordered

more heroin from SMITH. On January 4, 1988, SMITH

delivered Exhibit #20, approximately 55 grams of white

powder to Caviness. Special Agent Baker assumed pos-

session of Exhibit #20 from Caviness. Laboratory analysis

disclosed that Exhibit #20 was 52.46 grams of white pow-

der which was 8.1% heroin. SMITH did not charge Cavi-

ness for the sample of heroin.

26. On January 20, 1988, SMITH telephoned Cavi-

ness. During the recorded conversation Caviness ordered

more heroin from SMITH; however, on this occasion Cav-

iness asked SMITH if “RONNIE” (Special Agent Veronica

Baker) could meet SMITH and pick up the package.

SMITH agreed. On January 21, 1988, SMITH delivered

Exhibit #22, which consists of 75.75 grams of white pow-

der analyzed by the laboratory as 4.1% heroin, to Special

Agent Baker while in the southwest area of Washington,

D.C. SMITH delivered the heroin to Special Agent Baker

while seated in a late model red Chevrolet Camaro which

displayed District of Columbia dealer registration

D-01279. This dealer registration is listed to Champagne

Productions, Inc., at 1939 17th Street, N.W. On January 27,

1988, S/A Baker paid SMITH $4,360 in advanced official

government funds for Exhibit #22 while in the vicinity of

Caviness’ apartment in southwest Washington, D.C. A

surveillance conducted by Task Force investigators at

32a

Caviness’ residence during the receipt of the $4,360,

revealed that SMITH was operating a Chevrolet Blazer

which displayed Virginia registration PLR-974. Virginia

Department of Motor Vehicle records show that registra-

tion PLR-974 is currently listed in James E. Smith at 12216

Parkton Street Fort Washington, Maryland. This Chevro-

let Blazer has VIN #1G8CT18B6E0174334.

27. On January 27, 1988, Special Agent Baker, while

serving in an undercover capacity ordered 250 more quar-

ters of heroin from SMITH. SMITH agreed and on Febru-

ary 1, 1988, SMITH delivered Exhibit #23, approximately

89.4 grams of white powder to Special Agent Baker while

inside Caviness’ residence in southwest Washington, D.C.

Exhibit #24 was subsequently analyzed as 86.6 grams of

white powder which was 4.5% heroin. Special Agent

Baker owed SMITH $4995 for Exhibit #23. A surveillance

conducted by the Task Force members at Caviness’ resi-

dence during the receipt of Exhibit #23 from SMITH

revealed that SMITH was operating a 1987 Chevrolet

Pick-Up Truck which displayed Virginia registration

MRT-103. Information provided by the Virginia DMV

shows that on November 18, 1987, James E. SMITH of

12216 Parkton Street, Fort Washington, Maryland,

obtained a new registration for the same 1987 Chevrolet

Truck with the same VIN number. The new Virginia regis-

tration is tag number PLR-975.

28. On February 6, 1988, at 12:30 p.m. Smith tele-

phoned Caviness at her residence and told her that he

had to go get his “suit” (a code term for heroin). Smith

also asked how much money “Ronnie” (S/A Baker) had

for him and Caviness told him “Ronnie” had $7,000.00.

SMITH stated that he would call again when he was in

33a

the area. At 2:28 p.m. SMITH called again and told Cavi-

ness he would be there in “two minutes”. These conver-

sations were recorded. At 2:48 p.m. SMITH was arrested

when he entered Caviness’ apartment. Seized from

SMITH’s person was Exhibit #24 consisting of 158.05

grams of white powder which was analyzed as 7.3%

heroin.

Counts Two through Four — Attempt to Evade Income

Taxes For Years 1984, 1985 and 1986)

29. The government’s evidence at trial would show

that defendant willfully attempted to evade or defeat

Federal income tax due and owing in substantial amounts

in each of the tax years 1984, 1985 and 1986. The income

tax due and owing in each tax year has been determined

on the basis of the government's evidence to be as fol-

lows:

Tax Year Taxable Income Tax Due

1984 $101,084.74 $ 36,170.65

1985 $ 93,020.10 $ 31,797.35

1986 $411,392.11 $147,256.06

Yet the evidence will show that defendant failed to file a

Federal income tax return in each of the three tax years at

issue.

30. The evidence would show that during the tax

years 1984, 1985 and 1986, defendant received substantial

income from the distribution of heroin in the District of

Columbia. Specifically, and as set forth in greater detail

supra. ({{ 1-28), government witnesses would testify that

defendant sold heroin to various individuals in quantities

ranging from a kilogram down to pre-packaged street

34a

doses (commonly referred to as quarters). The govern-

ment’s witnesses would also testify that defendant sold

quantities of cocaine to various individuals during the

years 1985 and 1986. In addition, following his arrest and

after being advised of his constitutional rights, SMITH

admitted that he had sold substantial quantities of heroin

to DeVoyce Gaye Caviness throughout the period

1984-1986, and that he had sold kilo quantities of cocaine

in 1985 and 1986.

31. The government’s financial evidence would

detail the personal expenditures of defendant, as well as

the increases in defendant’s net worth, during the tax

years 1984, 1985 and 1986. Documents and testimony

would be offered by the government to evidence the

following:

Increase in

Net Worth

Increase in Personal Plus Personal

Tax Year New Worth Expenditures Expenditures®

1984 $32,330.96 $159,849.55 $192,180.51

1985 $35,990.02 $105,251.26 $141,241.28

1986 $50,855.48 $420,836.36 $471,691.83

The government’s evidence of the increase in defen-

dant’s net worth in each tax year would include records

of (1) cash deposits by defendant in numerous bank

6 In the government's proof of the tax owed by defendant

on these amounts, testimony would be provided by an IRS

Revenue Agent as to all adjustments, deductions and

exemptions allowed. Such calculations would reduce

defendant’s taxable income to the amounts set forth at

paragraph 29, supra.

35a

accounts; and (2) payments to acquire numerous residen-

tial properties. Such evidence would show that defendant

purchased seven residential properties during the period

1980-1987, and that defendant made substantial payments

on six of these properties during the tax years 1984, 1985

and 1986. The government's evidence of defendant's per-

sonal expenditures in each tax year would include

records and testimony reflecting (1) expenditures for the

purchase of more than twenty-five automobiles during

the period 1984 through 1986; (2) expenditures to insure

and maintain defendant’s numerous residential proper-

ties, two apartments and his fleet of automobiles; (3)

expenditures to acquire numerous pieces of gold jewelry;

and (4) expenditures for the support of various adult

family members and associates.

32. The government’s evidence would show, in

addition to defendant’s failure to file an income tax

return in 1984, 1985 and 1986, various affirmative acts of

evasion. For example, records and testimony would dem-

onstrate that defendant conducted his financial affairs

almost exclusively in cash. Deposits into defendant's

bank accounts were made, almost without exception, in

cash. Although defendant maintained several checking

accounts in his name, payments which defendant made

on even major expenditures, such as down payments on

real estate and expensive automobiles, were made by

defendant with money orders, cashiers checks, or in cash.

The government’s evidence would also demonstrate that

defendant purchased numerous assets, including approx-

imately nineteen (19) automobiles during the period

1984-1986, in the names of “straw purchasers.” Moreover,

_testimony from the government’s witnesses would reveal

36a

statements by defendant reflecting his efforts to evade the

accurate assessment and calculation of his tax liability,

after learning that he was the subject of a criminal tax

investigation. Such testimony would outline defendant's

plans to conceal his assets by acquiring many of the

assets in the names of “straw purchasers,” and to convert

his narcotic distribution proceeds into other assets, such

as jewelry, which is easily secreted and difficult to trace.

Moreover, as further proof of defendant’s willful evasion

of taxes, as well as defendant’s knowledge that he was

violating a known legal duty, the government would

offer, subject to an appropriate cautionary instruction,

evidence of defendant’s taxpayer history, including his

1973 conviction for evasion of Federal income taxes. See,

e.g., United States v. Magnus, 365 F.2d 1007, 1011 92nd Cir.

1966); Matthews v. United States, 407 F.2d 1371, 1381; See

also Fed. R. Evid. 404(b).

Count Five — Forfeiture

33. Title 21 United States Code, Section 853(d) pro-

vides:

(d) There is a rebuttable presumption at trial that

any property of a person convicted of a felony

under this subchapter or subchapter II of this

chapter is subject to forfeiture under this section

if the United States establishes by a prepon-

derance of the evidence that -

(1) such property was acquired by such person

during the period of the violation of this sub-

chapter or subchapter II of this chapter or

within a reasonable time after such period; and

37a

(2) there was no likely source for such prop-

erty other than the violation of this subchapter

or subchapter II of this chapter. (Emphasis sup-

plied).

The evidence of defendant’s participation in a Conspiracy

to Distribute and Possess with Intent to Distribute Heroin

during the period 1979 to October 19, 1987, proffered in

paragraphs 1-28, supra, provides a factual basis for accep-

tance of defendant's plea of guilty to Count One of the

Information. Should the Court accept defendant’s plea to

Count One, the government need only proffer with

respect to Count Five evidence establishing probable

cause that (1) the real and personal property described in

Count Five was acquired during the period 1979 through

October 19, 1987, or within a reasonable time thereafter;

and (2) that there was no likely source of income, other

than narcotic distribution proceeds, with which defen-

dant could have acquired said property.

34. To establish, by a preponderance of the evi-

dence, that defendant acquired the property described in

Count Five during the period of the narcotics violation,

or within a reasonable time thereafter, the government

would offer property deeds, automobile registrations,

bank de sit records and purchase invoices or receipts

evidencing the acquisition of the charged real and per-

sonal property during the period 1979-1987. Furthermore,

the government would offer defendant’s post-arrest

admissions that he converted a substantial portion of his

narcotics distribution proceeds into the gold jewelry

which was seized by agents from defendant’s Parkton

Street residence on February 6, 1988, and that he used

other narcotics proceeds to acquire the automobiles

38a

which were also seized at various of defendant’s resi-

dences following his arrest. The government’s evidence

would also include defendant’s post-arrest admissions

that the cash recovered from various of his residences, as

well as the monies contained in defendant’s bank

accounts, constituted narcotics proceeds.

35. The government’s evidence would also estab-

lish, through the testimony of witnesses acquainted with

defendant, that he had no source of income during the

period 1979 to present, other than narcotics distribution

activities, with which he could have acquired the real and

personal property described in Count Five. To corrobo-

rate this testimony, the government would offer evidence

that although SMITH has from time to time, prior to his

arrest, claimed to be employed in certain legitimate busi-

nesses, these businesses were mere “fronts”, and did not

provide SMITH with a salary or income. Specifically,

testimony from former employees of the two companies

with which SMITH claimed employment during the

period 1979 to 1986, Professional Limousine Service and

Tenth Street Auto Body, would demonstrate that the com-

panies never produced income sufficient to meet basic

operating expenses. In addition, the government would

offer a detailed financial analysis of the records of Profes-

sional Limousine Service produced in response to grand

jury subpoena by defendant’s daughter, the manager of

that company. This analysis would show that the basic

operating expenses of Professional Limousine Service -—

39a

expenses for office rent, automobile insurance and auto-

mobile parking alone - far exceeded any income which

the company realized.”

Respectfully submitted,

JAY B. STEPHENS

United States Attorney

/s/ Charles S. Leeper

CHARLES S. LEEPER

Assistant United States Attorney

/s/ William J. O’Malley/CSL

WILLIAM J. O’MALLEY, JR.

Assistant United States Attorney

/s/ Darryl W. Jackson/CSL

DARRYL W. JACKSON

Assistant United States Attorney

CERTIFICATE OF SERVICE

A copy of the foregoing Government's Proffer of

Evidence has been delivered by hand, to counsel for

defendant, Brian P. Gettings, Suite 500, 1400 N. Uhle

” The government’s testimony and documentary evidence

demonstrating that SMITH had no likely source of income

during the period 1979 to present, other than narcotics

proceeds, with which he could have acquired the property

described in Count Five, is detailed in the 46 page Affidavit in

Support of Seizure Warrant, a copy of which is contained in the

Court record. On the basis of this Affidavit, Magistrate Jean F.

Dwyer, on February 4, 1988, issued a Seizure Warrant for

Smith’s real and personal property which was executed by

Federal Agents and Deputy U.S. Marshals within hours of

SMITH’s arrest.

40a

Street, Arlington, Virginia, 22201 this 15th day of March,

1988.

/s/ William J. O’Malley/CSL

WILLIAM J. O’MALLEY, Jr.

Assistant United States Attorney

United States Attorney’s Office

555 4th Street, N.W.

Washington, D.C. 20001

(202) 272-9019