Mikkel H. Stavig appeals his sixty-month sentence imposed after he pleaded guilty to possession of cocaine with intent to distribute in violation of 21 U.S.C. § 841(a)(1) (1994). *1243 He argues that the district court 1 should have departed downward because government agents engaged in sentencing entrapment during the reverse-sting operation leading to his arrest. He argues that he was willing to accept only 10 ounces, or approximately 280 grams, but by providing an artificially low repayment schedule and insisting on a one-kilogram purchase, the government caused him to purchase the one-kilogram quantity. He contends that the district court should have used a ten-ounce quantity as the basis for his sentence under section 2D 1.1 of the Sentencing Guidelines. We affirm.
In 1986, Stavig received two concurrent four-year sentences for drug convictions in South Dakota state court. Stavig sold marijuana to Cl, 2 who lived in Miami, Florida. Stavig also received cocaine from Cl. Following his 1987 release from prison, Stavig was discharged from parole in 1989.
Stavig renewed his association with Cl in 1990 or 1991. Through 1992, he engaged in six transactions, three with Cl and three with another person, where he received cocaine and then later wired money in payment for the drugs. In total, Stavig wired аpproximately $23,500 in payments for an estimated twenty or twenty-five ounces of cocaine.
In 1994, Stavig was living with his wife and children in Sioux Falls, South Dakota. At sentencing, Stavig testified that he received a call at his home from Cl on a Wednesday night in December 1994. Unbeknownst to Stavig, Cl had become a confidential informant for the government in Florida. According to Stavig, Cl stated that he was trying to get rid of a kilogram of сocaine. Stavig testified that he told Cl he would be interested in a couple of ounces sent through the mail. He stated that he couldn’t handle a whole kilogram, but he would check around. He testified that Cl responded that he had to get rid of the entire kilogram at one time.
According to Stavig, he spoke with Cl again two days later. Stavig suggested that Cl send him four ounces of cocaine in the mail, and Cl rеsponded that he could not do that. After discussing a price of $900 per ounce, the conversation ended. Stavig testified that Cl called his home about a week later, but he could not talk because his family was home at the time.
The government contends that these conversations did not occur as Stavig says. It states that Cl made only one brief call on January 1, 1995 to Stavig before agents begаn monitoring and recording the conversations. Because of technical problems, calls on January 2 and January 13 were not recorded. Conversations on January 4, 5, 16, and 19 were successfully recorded by the government. A South Dakota DEA agent testified that Cl’s long distance phone bill showed no calls to South Dakota in December. No evidence was presented showing if Cl might have called Stаvig from another phone.
During the recorded January 4 conversation, Stavig and Cl discussed that a courier was charging $5,000 to transport the kilogram of cocaine from Florida to South Dakota. Cl stated that the high courier fee was why he had to take the entire kilogram. Stavig informed Cl that he was planning a family vacation in Florida, and could get by with ten ounces until then. Cl replied that he would not do ten оunces at $900 an ounce, and he did not want to risk sending cocaine through the mail. Cl told Stavig that he would talk with the courier that afternoon, but to do it for anything less than a kilogram was not worth it.
Cl called Stavig again the next day, January 5. Stavig informed Cl that he was concerned about the large quantity of drugs. He said that he had talked to some of the guys and was scared of the big number. One of the guys said that he could get rid оf a couple of eight balls a week, and Stavig figured he could come up with $500 a week himself. He indicated it might take him six months to sell that much cocaine. However, he was willing to take a kilogram, as long as he could get enough time to pay.
*1244 While the January 13 conversation was not recorded, Stavig testified that he told Cl that he could not make a $2,000 a week payment for the cocainе, and they should forget the deal. Stavig testified that Cl talked him back into the deal by lowering the payment amount to $1,000 a week.
Cl had fronted cocaine to Stavig before. In a similar arrangement, Stavig had sent more than $23,000 in money orders to CL Thus, Cl agreed that Stavig could pay over time, as long as he was taken care of in three months, Stavig made a $1,000 weekly payment to Cl, and paid the cornier $2,500 upоn delivery. Concerned about the courier fee, Stavig suggested that they wait until he went to Florida on vacation, and asked how much cocaine would still be available in two months. However, after further discussion, they agreed that delivery would take place in Sioux Falls.
Cl placed the next recorded call to Stavig on January 16. The parties discussed plans for the delivery of the cocaine. Cl reiterated that Stavig must have $2,500 to pay the courier upon delivery.
On January 19, two government agents posing as couriers checked into a Sioux Falls motel room. They called Stavig and informed him where to meet. Stavig drove to the motel, where he met one of the agents in the lobby. The agent escorted Stavig to the room, where Stavig gave the other agent $2,500, received the kilogram of cocaine, and was promptly arrested.
Stavig pleaded guilty to possession with intent to distribute a controlled substance. At sentencing, Stavig testified that he had never dealt with kilogram-size quantities before. When asked on cross examination if he had told Cl that he could “get by with ten” ounces, Stavig responded: “I was just going up each time because he kept hanging on that; [he] wouldn’t do anything except a kilo.” When asked why he simply did not tell Cl, “No. I won’t do it,” Stavig answered: “I did do that. Then he drops the price on it.... How much I had to come up with a week; he dropped that $1,000, from $2,000 to $1,000, when I tried to back out of the deal.”
A South Dakota DEA agent provided the only testimony regarding the reason agents selected one kilogram as the amount of cocaine to offer Stavig in the reverse sting. He testifiеd:
The information I was given from the Agents in Florida was that [Cl] had indicated that he had supplied kilogram quantities to Mr. Stavig in the past.
[t]he quantity was, basically, determined by the Agents in Florida before we became really involved in it. When they contacted me, they indicated that [Cl] had talked to Mr. Stavig and had indicated he was interested in taking a kilogram of cocaine. So that’s what I based my operational рlan around was obtaining a kilogram of cocaine from our laboratory in Chicago to use in the reverse [sting].
The district court was concerned about the lack of reliable evidence regarding the reason for choosing a one-kilogram quantity. The court noted that hearsay testimony is allowed in sentencing hearings, but stated: “We don’t have the informant nor the Agents that were involved down in Florida here, so [the South Dakota agent] winds up testifying on the basis of what he understands from what he was told by others and we have to rely on that.”
The district court recognized that the Sentencing Commission added Application Note 17 of section 2D1.1 of the Sentencing Guidelines to address cases involving reverse-sting operations. The court noted that Application Note 17 expressly describes the situation where the price was set substantially lower than the market price, thus allowing the defendant to purchase a larger quantity. Stavig’s case involved agents fronting drugs with favorable repayment terms of $1,000 a week. In the court’s opinion, this situation did not fall within the boundaries of Application Note 17 of the Sentencing Guidelines. The district court concluded that, although Stavig asked for ten ounces, he was willing to take a kilogram of cocaine as long as he could get a long enough period of time to pay it off. The court refused to depart downward, holding Stavig responsible for the entire kilogram quantity, stating: “I think that you were *1245 worked over some with regard to the amount, but you could have stepped away and you didn’t. You were ready for a kilo, if you could just handle the payments.” Stavig recеived a sixty-month sentence. He appeals.
I.
The government argues that we need not reach the question of sentencing entrapment because the district court’s refusal to depart downward is not reviewable on appeal. While a district court’s refusal to exercise its discretion to depart downward is not reviewable on appeal, we may review the court’s application of the Sentencing Guidelines.
United States v. Olson,
“[Sentencing entrapment may occur where outrageous government conduct overcomes the will of a defendant predisposed to deal only in small quantities of drugs, for the purpose of inсreasing the amount of drugs and the resulting sentence imposed against that defendant.”
United States v. Aikens,
The Sentencing Commission has also recognized the potential for government agents to use their knowledge of the Sentencing Guidelines to manipulate the quantity of drugs sold in a reverse sting in ordеr to increase a defendant’s sentence.
See Staufer,
Thus, the guidelines require the district court to determine if the government has engaged in sentencing entrapment.
6
Naranjo,
The district court found that Application Note 17 did not apply here because Stavig did not receive a larger quantity of cocaine due to a lower price. In the court’s opinion, Stavig was willing to accept the entire kilogram, as long as he could negotiate satisfactory repayment terms. This situation did not fall within the boundaries of Application Note 17. The district court did not err in so holding.
Stavig had received cocaine from Cl before under similar financial arrangements. He testified that his six previous transactions resulted in payments of about $23,000 for approximately twenty to twenty-five ounces of cocaine, or more than half a kilogram. Regardless of how or why the one-kilogram quantity was chosen by the government in this case, it fell within the same base offense level (one-half to two kilograms) as Stavig’s former dealings with Cl and his associates. See USSG § 2Dl.l(c)(7). This transaction fails to show that the government provided Stavig with a financial arrangement so attractive that he was able to purchase a significantly larger quantity than he would have otherwise purchased.
On thesе facts, we hold that the government did not engage in sentencing entrapment. Thus, the district court did not err in refusing to depart downward under the guidelines and sentencing Stavig to a sixty-month mandatory minimum sentence under 21 U.S.C. 841(a)(1).
II.
Stavig “has the burden of proof to demonstrate that he had neither the intent nor the resources for completing [the one]kilogram cocaine transaction.” Naranjo, 52 *1247 F.3d at 250. He failed to satisfy this burden, аnd sentencing entrapment did not exist in this case. However, we continue to be deeply concerned about the proclivity of reverse-sting operations, such as this one, to raise questions of sentencing entrapment.
Sentencing entrapment claims arise in this context largely because “sentencing discretion is delegated all the way down to the individual drug agent operating in the field.”
Staufer,
Government agents must seek approval before conducting any reverse-sting operation. Here, the South Dakota DEA agent testified that approval would only be given in cases involving a significant violator. A significant violator is a person dealing in a substantial аmount of drugs for the area. Thus, the agent’s quantity decision determines not only the defendant’s sentence, but also if the reverse sting will occur at all.
The government’s only evidence regarding why one kilogram was chosen came from the South Dakota DEA agent who stated that Florida agents told him that Cl told them that Stavig had indicated an interest in a one-kilogram quantity. There was no testimony regarding how the agents determined that Stavig was a significant violator, or if the one-kilogram quantity was necessary to receive approval for the reverse sting. In fact, the district court was quite concerned with the hearsay nature of the evidence presented by the government.
The Sentencing Guidelines state:
In determining the relevant facts, sentencing judges are not restricted to information that would be admissible at trial. Any information may be сonsidered, so long as it has sufficient indicia of reliability to support its probable accuracy. Reliable hearsay evidence may be considered. Out-of-court declarations by an unidentified informant may be considered where there is good cause for the nondisclosure of his identity and there is sufficient corroboration by other means. Unreliable allegations shall not be considеred.
USSG § 6A1.3, comment, (citations and internal quotations omitted). “The determination of whether hearsay is sufficiently reliable to warrant credence for sentencing purposes necessarily depends upon the particular circumstances of each case.”
United States v. Wise,
While we are also troubled by the reliability of the hearsay evidence offered in this case, we cannot conclude that the district court abused its discretion in allowing it. This is especially true here, because Stavig failed to meet his burden of showing sentencing entrapment had occurred. The government was required to prove the one-kilogram quantity by a preponderance of the evidence, but it was uneontested that Stavig accepted the kilogram from the officer at the hotel. Stavig failed to make a prima facie showing of sentencing entrapment, and the government was not required to produce evidence rebutting his claim.
The district court conducted a lengthy sentencing hearing. After detailed testimony regarding the transactions, it conscientiously made well-supported findings of fact. These findings were not clearly erroneous and they pinpointed the determinative issues. Thus, the district court did not err in imposing Stavig’s sentence.
We have frequently expressed discomfort with reverse-sting operations, and we confess our discomfort with this case. Because of the great potential for abuse, these cases require the most careful scrutiny and a probing examination by the district court. Such *1248 was given here, and we affirm the sentence imposed by the district court.
Notes
. The Honorable Lawrence L. Piersol, United States District Judge for the District of South Dakota.
. We use the term Cl because this person later became a confidential informant for the government.
. We recognize that some circuits refuse to acknowledge the concept of sentencing entrapment or sentencing manipulation. See,
e.g., United States v. Miller,
. USSG § 2D1.1, comment, (n.17) (Nov.1994) states:
If, in a reverse sting (an operation in which a government agent sells or negotiates to sell a controlled substance to a defendant), the court finds that the government agent set a price for the controlled substance that was substantially below the market value of the сontrolled substance, thereby leading to the defendant’s purchase of a significantly greater quantity of the controlled substance than his available resources would have allowed him to purchase except for the artificially low price set by the government agent, a downward departure may be warranted.
. The final paragraph of USSG § 2D1.1, comment. (n.12) (Nov.1994) states:
In an offense involving negotiation to traffic in a controlled substance, the weight under negotiation in an uncompleted distribution shall be used to calculate the applicable amount. However, where the court finds that the defendant did not intend to produce and was not reasonably capable of producing the negotiated amount, the court shall exclude from the guideline calculation the amount that it finds the defendant did not intend to produce and was not reasonably capable of producing.
.The significance of Application Notes 12 and 17 is that they show "that the Sentencing Commission is aware of the unfairness and arbitrariness of allowing drug enforcement agents to put unwarranted pressure on a defendant in order to increase his or her sentence without regard for his predisposition [or] his capacity to commit the crime on his own....”
Naranjo,