United States v. Herberto Pulgar
2015 U.S. App. LEXIS 10382
| 7th Cir. | 2015Background
- Pulgar sold large quantities of cocaine to Schmidt from 2002–2013, typically wholesale amounts, but generally received payment up front at the point of sale.
- Government charged Pulgar with conspiracy to distribute 5 kg or more (and a separate distribution count for 500 g); jury convicted on conspiracy for 500 g+ and acquitted on the distribution count.
- The government’s conspiracy theory relied primarily on Schmidt’s testimony alleging occasional ‘‘fronting’’ (credit), two–three returns of poor-quality cocaine over 11 years, and a growing personal friendship (vacations, baby shower, home renovation).
- Much of Schmidt’s account changed: he initially told agents Pulgar always required cash up front, but at trial testified about some fronting and returns; he had multiple felony convictions and cooperated with DEA in at least one staged credit transaction that led to Pulgar’s arrest.
- Pulgar disputed fronting and the existence of a systematic return/consignment arrangement; defense emphasized lack of evidence that Pulgar provided supplies, warnings, or took a cut of Schmidt’s resale profits.
- The Seventh Circuit reviewed sufficiency of the evidence de novo in the light most favorable to the government but will reverse conspiracy convictions where evidence is in equipoise with a mere buyer–seller relationship.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether evidence proved an agreement to further distribute (conspiracy distinct from buyer–seller) | Government: repeated large sales, some credit/fronting, returns, and close relationship support an inference of conspiracy | Pulgar: transactions were arm’s-length buyer–seller; fronting/returns were rare, vague, and not corroborated; no provisioning or joint role in resale | Vacated conviction — evidence insufficient; equally plausible merely buyer–seller relationship |
| Whether recorded/staged credit transaction (DEA-arranged) proves conspiratorial credit practice | Government: recorded discussion and one credit transaction show existence of fronting behavior | Pulgar: the credited transaction was arranged by cooperating witness/DEA; cannot be imputed as a coconspirator agreement | Court: discounted DEA-arranged deal for proving a conspiracy because it involved a government informant/agent |
| Whether sporadic returns established a consignment/return policy indicative of conspiracy | Government: returns demonstrate supplier’s stake in downstream sales, consistent with consignment | Pulgar: returns occurred maybe 2–3 times in 11 years with no details and no evidence of deferred payment or middleman role | Court: returns too infrequent and vague to show consignment or conspiracy |
| Whether friendship/other circumstantial facts sufficed to infer conspiracy | Government: vacations and personal ties show trust beyond arm’s-length trade | Pulgar: long-term business relationship naturally explains friendship; friendship alone insufficient | Court: friendship, without corroborating indicia (credit, provisioning, warnings, commission), does not prove conspiracy |
Key Cases Cited
- United States v. Brown, 726 F.3d 993 (7th Cir.) (multiple large-quantity purchases on credit can support conspiracy)
- United States v. Johnson, 592 F.3d 749 (7th Cir.) (consignment/returns and credit transactions as ‘‘quintessential evidence’’ of drug-distribution conspiracy)
- United States v. Pereira, 783 F.3d 700 (7th Cir.) (repeated credit transactions and provisioning support conspiracy)
- United States v. Lechuga, 994 F.2d 346 (7th Cir. en banc) (government must prove agreement distinct from underlying sales)
- United States v. Colon, 549 F.3d 565 (7th Cir.) (context required before inferring conspiracy from personal ties)
- United States v. Rivera, 273 F.3d 751 (7th Cir.) (repeat sales alone do not prove conspiracy)
- United States v. Cabello, 16 F.3d 179 (7th Cir.) (daily fronting shown to support conspiracy)
- United States v. Corson, 579 F.3d 804 (7th Cir.) (defendant not liable for conspiring solely with undercover agent/informant)