Rule 404(b) Cooperator-Relationship Evidence and “Common Scheme” Relevant Conduct in Drug Cases

1. Introduction

In United States v. Diego Castillo-Pedraza (3d Cir. Jan. 14, 2026) (non-precedential), the Third Circuit affirmed both a methamphetamine trafficking conviction and a below-Guidelines sentence. The appeal raised two recurring federal criminal issues: (1) when testimony from cooperating witnesses about prior drug activity and relationships is admissible under Federal Rule of Evidence 404(b); and (2) when an earlier drug episode may be included as “relevant conduct” in the Guidelines drug-quantity calculation under U.S.S.G. § 1B1.3.

The Government’s case depended heavily on cooperating witnesses Mario Ceballos and Donald Schwambach, whose accounts tied Castillo-Pedraza to a thwarted 2019 meth shipment and to meth seized in 2021 from Schwambach’s safe (including a package bearing Castillo-Pedraza’s fingerprint). The District Court admitted the cooperators’ testimony with a limiting instruction and, at sentencing, counted the 2019 shipment in the drug weight as part of a “common scheme or plan,” producing a high advisory range (324–405 months) but ultimately imposing a 240-month downward-variant sentence.

2. Summary of the Opinion

  • Conviction affirmed: The Third Circuit held the District Court did not abuse its discretion in admitting cooperator testimony under Rule 404(b) for the non-propensity purposes of proving knowledge and intent, and it emphasized the presence of a proper limiting instruction.
  • Sentence affirmed: The Court found no clear error in treating the 2019 shipment as relevant conduct because it was part of a common scheme or plan with the 2021 offense (common location, accomplice(s), modus operandi, and purpose), and it rejected procedural/substantive unreasonableness challenges under deferential review.

3. Analysis

3.1. Precedents Cited

A. Rule 404(b): Non-propensity purpose, relevance, Rule 403 balancing, limiting instruction

  • United States v. Garner, 961 F.3d 264 (3d Cir. 2020): Cited for abuse-of-discretion review of Rule 404(b) rulings and for the proposition that prior drug trafficking evidence can be admissible to prove knowledge and intent (especially in distribution cases where the defense contests mental state or connection to contraband).
  • United States v. Caldwell, 760 F.3d 267 (3d Cir. 2014) (citing United States v. Davis, 726 F.3d 434 (3d Cir. 2013)): Supplies the Third Circuit’s familiar four-part admissibility framework: (1) proper non-propensity purpose at issue; (2) relevance; (3) probative value not substantially outweighed by unfair prejudice (Rule 403); and (4) limiting instruction if requested—plus the admonition that the district court’s reasoning should be “detailed and on the record.”
  • United States v. Butch, 256 F.3d 171 (3d Cir. 2001): Supports admitting testimony about a witness’s prior criminal relationship with the defendant to contextualize the relationship and to prove contested elements (rather than character), particularly where the relationship explains access, trust, storage, or distribution arrangements.

B. Guidelines drug quantity and “relevant conduct”

  • United States v. Self, 681 F.3d 190 (3d Cir. 2012): Establishes that at sentencing the Government must prove drug quantities by a preponderance of the evidence.
  • United States v. Yeung, 241 F.3d 321 (3d Cir. 2001): Confirms clear error review for factual findings such as drug quantity and relatedness of conduct.
  • United States v. Boone, 279 F.3d 163 (3d Cir. 2002): Provides factors indicating a “common scheme or plan”: common locations, accomplices, criminal methods, or purposes. The panel applied these “Boone” characteristics to uphold inclusion of the 2019 shipment.
  • United States v. Brothers, 75 F.3d 845 (3d Cir. 1996): Cited for the appellate deference afforded to trial-court credibility determinations at sentencing.

C. Sentencing review: procedural and substantive reasonableness

  • Gall v. United States, 552 U.S. 38 (2007): Sets abuse-of-discretion review for both procedural and substantive reasonableness.
  • United States v. Wise, 515 F.3d 207 (3d Cir. 2008): Articulates the “broad range of possible sentences” that can be reasonable, limiting appellate second-guessing.
  • United States v. Seibert, 971 F.3d 396 (3d Cir. 2020) (quoting United States v. Bungar, 478 F.3d 540 (3d Cir. 2007)): Reinforces that a district court’s decision not to give mitigating factors the weight a defendant prefers does not itself render a sentence substantively unreasonable.

3.2. Legal Reasoning

A. Why the cooperator testimony fit Rule 404(b)

The central trial dispute was not merely whether meth was present (it was), but whether Castillo-Pedraza knowingly possessed it and intended to distribute it—especially because it was found in another person’s home and safe. The panel accepted the District Court’s reasoning that testimony about Castillo-Pedraza’s relationships with Ceballos and Schwambach, and about prior trafficking activity connected to Schwambach’s house, served legitimate, non-character purposes: it explained how Castillo-Pedraza was linked to the storage location and why meth would be kept there pending distribution.

Applying United States v. Caldwell and United States v. Davis, the Court effectively endorsed: (1) a proper purpose (knowledge/intent); (2) relevance to that purpose (making it more likely he stored meth there with consent and for distribution); (3) a Rule 403 balance favoring admission given high probative value; and (4) a limiting instruction aligned with the Circuit’s model instruction. It also relied on United States v. Butch and United States v. Garner to underscore that relationship/context evidence and prior drug activity can be especially probative where the defendant contests mental state or connection to drugs.

B. Why the 2019 shipment counted as “relevant conduct”

The Guidelines required the sentencing court to decide whether the 2019 shipment was part of the same “common scheme or plan” as the 2021 offense of conviction, making it “relevant conduct” under U.S.S.G. § 1B1.3. Because drug trafficking offenses group under § 3D1.2(d), the key question became whether the episodes were sufficiently connected.

Following United States v. Boone, the District Court identified shared characteristics: the same address, common accomplices, similar modus operandi, and a shared purpose (storing/receiving meth for distribution). The 20-month gap did not defeat relatedness in the panel’s view, particularly because Castillo-Pedraza was incarcerated for about 12 months, reducing the meaningful temporal separation.

On the evidentiary burden, the Third Circuit cited United States v. Self (preponderance standard) and deferred under United States v. Yeung (clear error review) and United States v. Brothers (credibility deference): two witnesses involved in the 2019 shipment directly implicated Castillo-Pedraza, and the appellate court would not reweigh credibility.

C. Why the sentence was reasonable

Procedurally, Castillo-Pedraza’s challenge rose or fell with his relevant-conduct argument; once that failed, the Guidelines calculation stood. Substantively, the panel stressed the downward variance from an extremely high advisory range and the District Court’s consideration of personal factors, invoking Gall v. United States, United States v. Wise, and United States v. Seibert (quoting United States v. Bungar) to reject an argument that amounted to disagreement with the weight assigned to mitigation.

3.3. Impact

  • Rule 404(b) in “drugs found in someone else’s space” cases: The decision illustrates how the Government can use cooperator testimony about prior dealings and relationships to prove knowledge/intent and explain access and storage arrangements—so long as the court clearly articulates the non-propensity purpose and gives a limiting instruction.
  • Relevant conduct reach: The opinion reinforces that earlier drug events may be included in drug-quantity calculations when they share concrete operational links (location/accomplices/method/purpose), even with a substantial time gap, especially where incarceration accounts for much of the interval.
  • Appellate posture matters: The combination of abuse-of-discretion (evidentiary rulings), clear-error (factfinding), and Gall’s abuse-of-discretion (sentencing) standards makes reversals difficult when the district court builds a careful record (written explanation, Rule 403 assessment, limiting instruction, and explicit scheme findings).
  • Practical takeaway for litigants: Defendants challenging cooperator testimony and relevant conduct must do more than argue unfairness in the abstract; they must identify why the non-propensity chain is pretextual, why Rule 403 was misbalanced, or why “common scheme” findings lack evidentiary support under the preponderance standard.

4. Complex Concepts Simplified

  • Rule 404(b): Generally bars “other acts” evidence used to argue “he did it before, so he did it again.” It can be admitted for specific non-character reasons (like proving knowledge or intent), if the court finds it relevant and not unfairly prejudicial.
  • Rule 403 balancing: Even relevant evidence can be excluded if its unfair prejudice substantially outweighs its probative value. “Unfair prejudice” means an improper tendency to decide the case on emotion or bad character rather than proof of the charged crime.
  • Limiting instruction: A jury direction explaining the narrow purpose for which it may consider evidence (e.g., only for intent/knowledge, not character). Courts rely on such instructions to reduce the risk of misuse.
  • Relevant conduct (U.S.S.G. § 1B1.3): Allows sentencing courts to account for closely related criminal conduct beyond the count of conviction, which can increase the Guidelines range—especially in drug cases where total drug quantity drives offense levels.
  • Common scheme or plan: A practical “connectedness” test—shared participants, location, method, and purpose can show separate episodes are parts of one operation.
  • Standards of proof/review: Drug quantity at sentencing is proved by preponderance (more likely than not). On appeal, fact findings are reversed only for clear error, and credibility calls get “great deference.”

5. Conclusion

United States v. Diego Castillo-Pedraza affirms two doctrinally important, practice-driven points: (1) cooperator testimony describing prior trafficking relationships and conduct may be admissible under Rule 404(b) when tightly tied to proving knowledge and intent and accompanied by a limiting instruction; and (2) earlier drug activity may be counted as Guidelines relevant conduct when the record supports a common scheme or plan under the Boone factors. Although non-precedential, the opinion functions as a clear roadmap of how the Third Circuit expects district courts to build an on-the-record rationale and how deferential appellate standards will protect those rulings when properly explained.