The U.S. Court of Appeals for the Third Circuit affirmed the conviction and sentence of Diego Castillo-Pedraza for methamphetamine possession with intent to distribute, rejecting his challenges to cooperating witness testimony and sentencing in a non-precedential opinion filed January 14, 2026.
Castillo-Pedraza was convicted on one count of possession and aiding and abetting possession of methamphetamine with intent to distribute following an FBI investigation that began in 2019. The defendant challenged both the admission of testimony from cooperating witnesses at trial and his below-Guidelines sentence, but the Third Circuit found no merit in either argument.
The case originated from a 2019 FBI investigation into methamphetamine trafficking that led to the interception of a drug shipment and the arrest of Mario Ceballos. After his arrest, Ceballos entered into a cooperation agreement with the government and provided testimony crucial to the prosecution's case against Castillo-Pedraza.
According to court records, Ceballos told federal authorities that Castillo-Pedraza had orchestrated the methamphetamine shipment and directed him to pick up the parcel. The cooperating witness also testified that the two men intended to divide and sell the methamphetamine together, and that Castillo-Pedraza regularly sold drugs to the owner of the house where the parcel was scheduled to be delivered.
The investigation expanded in March 2021 when local law enforcement searched the residence where the drug shipment was intended to be delivered. The homeowner, Donald Schwambach, told police during the search that he had drugs stored in a safe, including some substances he was holding for someone else. Officers seized packages of methamphetamine from the safe during the search.
Forensic analysis of one of the seized packages revealed evidence that linked it to the broader trafficking operation. The evidence gathered from both the cooperating witness testimony and the physical seizure of drugs formed the basis for the charges against Castillo-Pedraza.
At trial, Castillo-Pedraza's defense team challenged the admission of the cooperating witness testimony, arguing that it should not have been allowed as evidence. Cooperating witness testimony often faces scrutiny in federal drug cases because such witnesses may have incentives to provide information favorable to the prosecution in exchange for reduced sentences or other benefits.
The defendant also contested his sentence, which fell below the federal sentencing Guidelines range. In federal criminal cases, judges have discretion to impose sentences below the Guidelines range in certain circumstances, but defendants sometimes challenge such sentences on various grounds.
The Third Circuit Court of Appeals, in a panel consisting of Circuit Judges Matey, Chung, and Ambro, reviewed both challenges and found them without merit. Circuit Judge Ambro authored the opinion for the panel, which was submitted under Third Circuit Local Appellate Rule 34.1(a) on January 12, 2026.
The court's opinion was designated as "NOT PRECEDENTIAL," meaning it does not constitute binding precedent for future cases. Such designations are common for routine appeals that do not establish new legal principles or interpret law in novel ways.
The case was appealed from the U.S. District Court for the Eastern District of Pennsylvania, where it was originally tried before District Judge Joseph F. Leeson Jr. The district court case number was 5:23-cr-00169-001, indicating the criminal case was filed in 2023.
Federal drug trafficking cases often rely heavily on cooperating witness testimony, particularly in cases involving complex distribution networks. The admission of such testimony requires courts to balance the probative value of the evidence against potential prejudice to the defendant.
The affirmance of Castillo-Pedraza's conviction demonstrates the Third Circuit's acceptance of the district court's handling of both the evidentiary issues and the sentencing decision. The appeals court's rejection of the defendant's challenges suggests that the trial court properly admitted the cooperating witness testimony and appropriately exercised its sentencing discretion.
This case reflects ongoing federal efforts to combat methamphetamine trafficking, which remains a significant concern for law enforcement agencies. The FBI's 2019 investigation that led to this prosecution shows the multi-year commitment often required to build cases against drug trafficking organizations.
The cooperation agreement with Ceballos illustrates how federal prosecutors often use testimony from lower-level participants to build cases against those they believe to be higher up in trafficking operations. Such agreements are standard tools in federal drug prosecutions.
With the Third Circuit's affirmance, Castillo-Pedraza's conviction and sentence stand. The defendant could potentially seek further review by filing a petition for certiorari with the Supreme Court, though the high court accepts only a small percentage of such petitions for review.
The case demonstrates the challenges defendants face in appealing federal drug convictions, particularly when the prosecution's case includes both cooperating witness testimony and physical evidence seized during law enforcement operations.