§ 2S1.1(a)(1) Applies When Laundered Funds Derive from a Drug-Conspiracy and the Drug Offense Level Can Be Approximated by Converting Cash to Drug Quantity Using Reliable, Wholesale Pricing

I. Introduction

In United States v. Garcia, the Fifth Circuit affirmed a money-laundering sentence where the key dispute was how to set the defendant’s base offense level under U.S.S.G. § 2S1.1(a). Liza Garcia pleaded guilty to concealment money laundering under 18 U.S.C. § 1956(a)(1)(B)(i), (2), admitting she transmitted at least $3,961 to Mexico knowing at least some of the money came from unlawful activity. The sentencing record, however, described broader conduct: Garcia and her boyfriend recruited a courier, David Apaseo, to import multi-drug loads from Mexico, and then used money service businesses to send proceeds to Mexico.

The central issues were (1) whether § 2S1.1(a)(1) applied (which keys the money laundering base offense level to the “underlying offense” producing the laundered funds), or whether § 2S1.1(a)(2) applied (which instead uses the value of the laundered funds), and (2) if § 2S1.1(a)(1) applied, whether the district court permissibly determined the underlying drug offense level by converting laundered cash into drug quantities using agent testimony about drug prices.

II. Summary of the Opinion

The Fifth Circuit affirmed. It held that § 2S1.1(a)(1) was properly applied because:

• Garcia was accountable for the underlying offense, which the district court treated as the drug trafficking conspiracy (not merely the April 2021 intercepted load); and
• The underlying offense level was determinable, since the court could approximate drug quantity by converting known laundered funds into drug quantity using reliable price evidence.

The court also rejected challenges to the amount laundered ($10,300), the use of wholesale (not street) prices, and the district court’s approximation methodology (including its use of the April 2021 load as representative of the conspiracy’s drug types). Finally, alleged errors raised for the first time on appeal—omitting cocaine and not using “converted drug weight”—failed under plain-error review.

III. Analysis

A. Precedents Cited

The opinion is a guidelines-methodology decision built on a line of Fifth Circuit cases distinguishing § 2S1.1(a)(1) from § 2S1.1(a)(2) and approving cash-to-drug conversions when drug quantity is not directly established.

• United States v. Sifuentes, 945 F.3d 865 (5th Cir. 2019): The court used Sifuentes as the controlling framework for § 2S1.1(a)(1)’s two conditions—(A) defendant accountability for the underlying offense and (B) determinability of the underlying offense level. Garcia quotes Sifuentes for the standard and uses it to validate applying (a)(1) where the record supports that the defendant at least aided and abetted the drug distribution that generated the laundered funds.
• United States v. Charon, 442 F.3d 881 (5th Cir. 2006): Charon supplies two key propositions: (i) when the underlying offense is a drug crime, the offense level is determined using the drug quantity table in § 2D1.1(c); and (ii) § 2S1.1(a)(2) is reserved for cases where the underlying offense level is impossible or impracticable to determine. The panel relied on Charon to reject the claim that uncertainty about drug type/quantity necessarily forces resort to (a)(2).
• United States v. Barry, 978 F.3d 214 (5th Cir. 2020): Barry is the panel’s anchor for approximating drug quantity and converting cash to drug weight when there is no seizure (or when seizure does not resolve relevant conduct). The panel quotes the guideline commentary principle that “the court shall approximate” the quantity, and reiterates that once persuaded by a preponderance that money came from drug sales, the court may convert money to a drug quantity.
• United States v. Betancourt, 422 F.3d 240 (5th Cir. 2005): The panel invoked Betancourt to endorse conservative, carefully considered approximations and to underscore that cash-to-drug conversion can be a permissible estimating method when supported by evidence.
• United States v. Alford, 142 F.3d 825 (5th Cir. 1998): Alford supports the proposition that drug quantity findings need not be exact and may rest on imprecise but sufficiently reliable evidence—helping the panel defend estimation in a conspiracy context.
• United States v. Barfield, 941 F.3d 757 (5th Cir. 2019): Cited for the reliability standard: a district court may extrapolate from any information with “sufficient indicia of reliability to support its probable accuracy,” reinforcing the permissibility of price testimony and extrapolation from representative conduct.
• United States v. Lujan, 25 F.4th 324 (5th Cir. 2022): The opinion relies on Lujan to resolve the wholesale-versus-retail dispute: the proper price denominator depends on the typical quantity dealt. Here, the record suggested multi-kilo trafficking, supporting wholesale pricing.
• United States v. Ayala, 47 F.3d 688 (5th Cir. 1995): Ayala provides the PSR reliance rule: PSR findings generally carry sufficient indicia of reliability, and the defendant bears the burden of showing inaccuracy. This precedent undergirds affirmance of the $10,300 laundering amount.
• United States v. Rojas, 812 F.3d 382 (5th Cir. 2016), and Puckett v. United States, 556 U.S. 129 (2009): These cases govern plain-error review and the court’s discretion whether to correct forfeited error, shaping the rejection of newly raised objections about cocaine omission and “converted drug weight.”
• United States v. Mims, 992 F.3d 406 (5th Cir. 2021): Cited on the discretionary prong of plain error—whether the alleged error seriously affects the fairness, integrity, or public reputation of judicial proceedings.
• Yohey v. Collins, 985 F.2d 222 (5th Cir. 1993), and Rollins v. Home Depot USA, 8 F.4th 393 (5th Cir. 2021): These authorities support forfeiture/abandonment principles. The panel used them to note Garcia did not challenge certain points (e.g., the conspiracy finding) in a manner sufficient to preserve them on appeal.
• United States v. Mata, 409 F. App'x 740 (5th Cir. 2011) (per curiam) (unpublished), and Ballard v. Burton, 444 F.3d 391 (5th Cir. 2006): The panel referenced Mata as persuasive (not controlling) support that a drug conspiracy may function as the “underlying offense” for § 2S1.1(a)(1), and cited Ballard to explain the role of unpublished opinions as persuasive authority.
• United States v. Anderson, 526 F.3d 319 (6th Cir. 2008): Cited as persuasive out-of-circuit support for applying § 2S1.1(a)(1) even when drug quantity is unknown, where the quantity can be approximated.

B. Legal Reasoning

1. Selecting § 2S1.1(a)(1) over § 2S1.1(a)(2): accountability and determinability.

The panel treated the district court’s approach as faithful to the structure of § 2S1.1(a). Subsection (a)(1) applies if the defendant committed (or aided/abetted, etc.) the underlying offense producing the laundered funds and the underlying offense level can be determined; otherwise, (a)(2) uses a value-of-funds table. On the first condition, the panel emphasized that the “underlying offense” was the drug trafficking conspiracy, and the district court found—by a preponderance—that Garcia participated in that conspiracy (including directing proceeds transfers and prior drug transport). On the second condition, the panel rejected the premise that uncertainty about the conspiracy’s total drug quantity makes the offense level indeterminable: guidelines permit approximation.

2. Approximating drug quantity by converting laundered cash into drug amounts.

A notable feature of the case is that the district court did not simply attribute the seized April 2021 load’s drug quantity to Garcia’s laundering guideline calculation. Instead, it used the laundered amount ($10,300) and agent testimony about per-kilogram prices to calculate how much methamphetamine, fentanyl, and heroin could be purchased for $10,300, then derived base offense levels per drug under § 2D1.1(c), and finally averaged those levels. The Fifth Circuit approved this as a conservative and evidence-based approximation method, consistent with Barry, Betancourt, and Barfield, and held that using the April 2021 load as “emblematic” or representative of the conspiracy’s drug mix was not clearly erroneous on this record.

3. Wholesale pricing as the proper denominator.

Relying on United States v. Lujan, the panel held wholesale prices were appropriate because the record supported trafficking in multi-kilo loads (cross-border distribution), and Garcia did not show that the conspiracy consisted of street-level retail sales. This mattered because wholesale prices yield larger quantities per dollar and thus can materially affect base offense levels.

4. Standards of review drove multiple outcomes.

The opinion’s architecture is heavily procedural: preserved issues were reviewed for clear error (e.g., amount laundered; pricing; use of approximation), while unpreserved issues faced plain-error review (e.g., cocaine omission; failure to use converted drug weight). Under plain-error review, the panel also emphasized the lack of prejudice (no change to the base offense level even if cocaine were included) and the discretionary nature of correction under Puckett v. United States.

C. Impact

Although unpublished, United States v. Garcia is a useful synthesis of Fifth Circuit doctrine with practical takeaways for money laundering sentencing where drug proceeds are involved:

• Conspiracy-as-underlying-offense framing: The “underlying offense” for § 2S1.1(a)(1) can be the broader drug conspiracy rather than a single intercepted transport event, supporting (a)(1) even when a particular load did not itself yield proceeds.
• Determinability is a low bar when cash exists: If the sentencing court can find laundered funds and can receive reliable pricing evidence, the offense level typically will be deemed “determinable,” steering cases away from § 2S1.1(a)(2).
• Price evidence selection matters: The wholesale/retail choice (per Lujan) can drive offense levels. Parties should litigate “what market” the defendant operated in with concrete facts.
• Preservation remains crucial: Challenges to calculation mechanics (e.g., converted drug weight methodology, inclusion of certain substances) may be lost under plain-error review absent a clear showing of prejudice.

IV. Complex Concepts Simplified

• “Base offense level”: The starting point in the Guidelines used to compute the advisory sentencing range; adjustments are applied afterward to reach the total offense level.
• § 2S1.1(a)(1) vs. § 2S1.1(a)(2): (a)(1) ties the laundering sentence to the seriousness of the underlying crime that generated the money (here, drug trafficking) when the defendant is accountable and the offense level can be computed. (a)(2) is the fallback when you cannot reasonably determine the underlying offense level, so the guideline uses the value of the laundered funds instead.
• “Underlying offense”: The crime that produced the laundered proceeds. In drug cases, that is often a trafficking conspiracy rather than any single seizure.
• Approximating drug quantity: When the total quantity of drugs is not seized or otherwise directly proven, Guidelines allow estimation based on reliable evidence—such as converting drug proceeds into an estimated drug quantity using price testimony.
• Wholesale vs. street (retail) price: Wholesale prices apply when trafficking involves large quantities; retail prices apply to street-level dealing. The price chosen affects how much drug quantity corresponds to a given amount of money.
• PSR reliability: A Presentence Investigation Report can be relied upon unless the defendant produces evidence showing it is inaccurate (United States v. Ayala).
• Clear error vs. plain error: “Clear error” is deferential but allows reversal if a factual finding is implausible in light of the whole record. “Plain error” (for unpreserved issues) requires an obvious error that affected substantial rights, plus a discretionary decision to correct it (United States v. Rojas; Puckett v. United States).
• Converted drug weight: A Guidelines method to standardize different controlled substances into a single measure for comparison. The panel treated the complaint about not using it as forfeited and, in any event, not a basis for discretionary correction on the record presented.

V. Conclusion

United States v. Garcia reinforces a practical rule in Fifth Circuit sentencing: when laundering is tied to drug trafficking and the defendant is accountable for the trafficking conduct, § 2S1.1(a)(1) will usually govern, and courts may approximate the underlying drug offense level by converting proven laundered funds into drug quantity using reliable price evidence—often wholesale prices in large-quantity conspiracies. The decision also highlights the decisive role of standards of review: preserved objections receive clear-error scrutiny, while unpreserved guideline-method complaints will rarely succeed absent clear prejudice.