UNITED STATES COURT OF APPEALS
                                      For the Fifth Circuit



                                                 No. 01-20712



                                     UNITED STATES OF AMERICA

                                                                                             Plaintiff- Appellee,

                                                        v.

                ARMANDO RESENDEZ, also known as Armando Resendez Barrera

                                                                                         Defendant - Appellant.



                              Appeal from the United States District Court
                          For the Southern District of Texas, Houston Division

                                               (H-01-CR-164-1)
                                                 June 28, 2002


Before REAVLEY, SMITH, and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:*

        Armando Resendez pleaded guilty to conspiracy to possess with intent to distribute 500 grams

or more of cocaine in violation of 21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(B)(ii), and possession with

intent to distribute 500 grams or more of cocaine in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B)(ii),



        *
         Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not
precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.



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and 18 U.S.C. § 2 and was sentenced to 87 months imprisonment on each count to be served

concurrently. The district court adopt ed the Presentence Report and Addendum in which the

probation officer attributed a large amount of cocaine to Resendez after calculating that bundles of

currency found in his apartment were the proceeds of cocaine sales. Resendez appeals his sentence

alleging that the district court erred in failing to make a finding that the amount of cocaine seized did

not adequately reflect the scale of the offense. We affirm.

        According to the presentence repo rt, Special Agent Ron Shelkey of the United States

Customs Service received information that Resendez’s apartment in Houston, Texas was being used

to store narcotics. On June 12, 2000, Agent Shelkey observed Resendez carry a beanbag chair from

his apartment and place it in the bed of a pickup truck. Resendez then transported the beanbag chair

to a Houston gift shop, where he was seen in the company of a man, later identified as Francisco

Ortiz. When a pickup truck arrived in front of the gift shop, Ortiz approached the truck and grabbed

a black nylon bag from the truck, then placed the bag in his own truck behind the driver’s seat. Later,

Ortiz and Resendez left the gift shop carrying the beanbag chair. They put the chair in the bed of

Ortiz’s truck and drove away.

        Houston police conducted a traffic stop of Ortiz’s truck. Ortiz, who was driving, consented

to a search of the vehicle. The black nylon bag contained numerous bundles of U.S. currency with

a total value of $428,665. A police dog alerted to the odor of narcotics on the currency, the black

nylon bag, and the beanbag chair. Resendez then consented to a search of his apartment where agents

found bundles of U.S. currency totaling $278, 239 hidden in dresser drawers, shopping bags, and a

closet. Agents also seized what appeared to be a drug ledger. Written on several small self-sticking




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yellow notes was the figure $15,300. The agents inferred that $15,300 was the price Resendez

charged for a kilogram of cocaine.

       After obtaining a search warrant, the agents searched the gift shop and found three bricks of

cocaine weighing approximately 2.6 kilograms. The fingerprints of both Ortiz and Resendez were

found on the cocaine packages.

       Having outlined the scope of Resendez’s relevant conduct, the probation officer who wrote

the report then determined the amount of drug quantity attributable to him. She wrote:


       The 2.6 kilograms of cocaine seized from the gift shop can be attributed to both of the
       defendants. . . . Ron Shelkey provided the probation officer with DEA intelligence
       information indicating that the price per kilogram of cocaine in the Houston area during the
       second quarter of fiscal year 2000 was $13,500 to $18,000. This would place the figure of
       $15,300 identified on documents seized from Resendez’ apartment in the middle of this range.
       Based upon this intelligence information and the records of Resendez, a figure of $15,300 will
       be utilized to calculat e the quantity of cocaine attributable to this money seizure. The
       $278,239 seized from Resendez’ apart ment . . . equate[s] to 18.2 kilograms of cocaine.
       Therefore, Armando Resendez will beheld accountable for 20.8 kilograms of cocaine for
       guideline computation purposes.


       Resendez objected to the figure of $15,300 as an unrealistically low price for a kilogram of

cocaine. In response, an addendum to the presentence report was prepared in which the probation

officer maintained that the price per kilogram was correct and stated:

       The evidence seized from the defendant’s apartment on June 12, 2000, contained papers
       reflecting the figure $15,300, coupled with other numbers, when calculated out would
       support the use of the $15,300 figure. The probation officer, utilizing the instructions at
       U.S.S.G. § 2D1.1, Application Note 12, converted the seized money to a drug equivalent
       utilizing the $15,300 figure.

       Resendez then filed an objection to the conversion of the $278,239 into 18.2 kilograms of

cocaine arguing that 2.6 kilograms of cocaine properly reflected the scale of the offense conduct. At



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the sentencing hearing, the judge overruled Resendez’s objection. The judge found the conversion

“adequately warranted under the facts in the presentence report.” Defense counsel then stated, “I just

want the record to be clear that I’m objecting to any conversion of cash into drugs at any value in this

particular case under these facts as proven to the court. . . . I am objecting not on the specific issue

of the conversion price, but on the whole idea of converting the cash into drugs in this case.” The

court noted that Resendez did not present any rebuttal evidence contradicting the basis for the

probation officer finding that the amount of money was drug proceeds and could be converted to

cocaine. The judge again stated that the objection was overruled and adopted the presentence report

and addendum.

        We review the trial court’s legal interpretation and applicat ion of sentencing guidelines de

novo and it s factual findings for clear error.2 A district court may adopt facts contained in a

presentence report without further inquiry if the facts have an adequate evidentiary basis and the

defendant does not present rebuttal evidence.3              We will uphold a sentence imposed under the

sentencing guidelines unless such sentence is imposed in violation of the law, results from an incorrect

application of the guidelines, or is an unreasonable departure from the applicable guideline range.4

        The sole issue raised by Resendez on appeal is whether the district court must make an

explicit finding that the quantity of the drugs seized did not adequately reflect the scale of the offense




        2
        United States v. Parker, 

, 329 (5th Cir. 1998).

        3
        United States v. Peters, 

, 314 (5th Cir. 2002).

        4
        United States v. Vital, 

, 117 (5th Cir. 1995).


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before converting money into drug quantity.5 The U.S. Sentencing Guidelines Manual § 2D1.1,

Application Note 12, provides, in pertinent part:

        Types and quantities of drugs not specified in the count of conviction may be considered in
        determining the offense level. . . . Where there is no drug seizure or the amount seized does
        not reflect the scale of the offense, the court shall approximate the quantity of the controlled
        substance.

        Resendez bases his argument on a concurring opinion in United States v. Henderson in which

Judge Emilio Garza wrote separately to emphasize the lack of authority for the conversion of cash

into drugs to increase a defendant’s offense level independent of Application Note 12.6 Because

“[t]he Sentencing Guidelines make no other provision for the conversion of cash to drug quantity,”

Judge Garza stated, “the district court must make a finding that one of these two situations [‘Where

there is no drug seizure or the amount seized does not reflect scale of offense’] is present.”7 A review

of the record in Henderson revealed no finding by the district court that the drugs seized failed to

reflect the scale of Henderson’s offense.8 Because Henderson did not challenge the court’s failure

to comply with the Sentencing Guidelines, Judge Garza stated that the panel was compelled to follow

United States v. Fitzgerald9 and United States v. Johnston,10 two cases in which district courts

converted cash to drugs for sentencing purposes without explicitly making a finding that the amount



        5
         Resendez does not challenge the district court’s factual findings regarding whether the cash was drug
proceeds or the market value of the cocaine.

        6
         

, 544 (5th Cir. 2001) (Emilio Garza, J. concurring).

        7
         

        9
         

(5th Cir. 1996).

        10
            

, 403 (5th Cir. 1997).


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seized did not reflect the scale of the offense.

        While it is true that the court is required to make a finding on every controverted matter, the

sentencing court may satisfy this requirement by rejecting a defendant’s objections and orally adopting

the factual findings of the presentence report,11 which the court did in this case. Upon review of the

sentencing hearing transcript, we agree that the district court did not explicitly state that the amount

seized did not reflect the scale of the offense. The presentence report, however, reflects that the

probation officer used the instructions of Application Note 12 to convert the seized money to a drug

equivalent on the premise that the 2.6 kilograms seized did not reflect the scope of the relevant

conduct for the defendant. Resendez did not challenge the probation officer’s inference that the

$278,239 found in Resendez’s apartment was the proceeds o f illegal trafficking in narcotics.

Accepting the district court’s finding that $15,300 was the going rate for a kilogram of cocaine in

Houston during 2000, the 2.6 kilograms found at the gift shop obviously does not reflect the scale

of Resendez’s drug trade, considering the source of the $278,239 found in his apartment. Because

the district court clearly considered these circumstances in responding to Resendez’s objection to the

conversion and adopted the factual findings of the presentence report, the district court satisfied the

requirement that it find that the amount of contraband seized did not reflect the scale of Resendez’s

offense.

        We reject Resendez’s suggestion that we vacate his sentence so that the district court can

make a finding on the record that the amount of contraband seized did not reflect the scale of the




        11
           United States v. Brown, 

, 958 (5th Cir. 1994).


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offense where it is clear that the district court knew the applicable law and applied it correctly.12

       The sentence of the district court is AFFIRMED.




       12
         See United States v. Gonzalez, 

, 930 (5th Cir. 2001).


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