United States v. Robert Hofschulz

In the

United States Court of Appeals

for the Seventh Circuit

____________________

Nos. 21-3403 & 21-3404

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

LISA HOFSCHULZ and ROBERT HOFSCHULZ,

Defendants-Appellants.

____________________

Appeals from the United States District Court

for the Eastern District of Wisconsin.

No. 18-cr-145-PP — Pamela Pepper, Chief Judge.

____________________

ARGUED SEPTEMBER 8, 2023 — DECIDED JUNE 25, 2024

____________________

Before SYKES, Chief Judge, and ROVNER and KIRSCH, Circuit

Judges.

SYKES, Chief Judge. A jury convicted Lisa Hofschulz, a

nurse practitioner, of conspiracy and 14 counts of distrib-

uting drugs in a manner unauthorized by the Controlled

Substances Act, including one count of unlawful drug

distribution resulting in the death of a patient. See 21 U.S.C.

§ 841(a)(1), (b)(1)(C); id. § 846. The charges arose out of her

operation of a “pain clinic” as a front for a pill mill from

2 Nos. 21-3403 & 21-3404

which she dispensed opioid prescriptions for cash-only

payment. Robert Hofschulz, her then ex-husband, was also

convicted for his role in helping her run the opioid mill. (The

couple have since remarried.)

The Hofschulzes challenge their convictions on three

grounds. First, they argue that the jury instructions were

inconsistent with the Supreme Court’s decision in Ruan v.

United States, 597 U.S. 450 (2022), issued shortly after they

were sentenced. Ruan held that in a § 841 case against a

medical professional for distributing drugs in an unauthor-

ized manner, the statute’s intent requirement applies to the

act of distribution and lack of authorization. Our circuit has

long followed this rule, even before Ruan. In accordance

with our pre-Ruan caselaw, the district judge instructed the

jury that the government must prove beyond a reasonable

doubt that the Hofschulzes intended to distribute controlled

substances and intended to do so in an unauthorized man-

ner. There was no instructional error.

The Hofschulzes also argue that the judge wrongly per-

mitted the government’s medical expert to testify about the

standard of care in the usual course of professional pain

management. Circuit precedent says otherwise. Finally, the

Hofschulzes challenge the sufficiency of the evidence to

support their convictions. This argument is frivolous. We

affirm.

I. Background

In June 2018 Lisa Hofschulz, a licensed nurse practition-

er, was charged with one count of conspiracy to distribute

controlled substances in an unauthorized manner, 21 U.S.C.

§§ 841(a)(1), 846; thirteen counts of distributing controlled

Nos. 21-3403 & 21-3404 3

substances in an unauthorized manner, id. § 841(a); and one

count of unlawful distribution of controlled substances

resulting in death, id. § 841(a)(1), (b)(1)(C). The grand jury

also indicted Robert Hofschulz, Lisa’s then ex-husband and

business partner, for conspiracy and aiding and abetting

four of the drug-distribution counts.

After significant delay—some necessitated by the pan-

demic but most instigated by the defense—the case finally

proceeded to trial in August 2021. The government intro-

duced a mountain of evidence of the defendants’ guilt; a

summary will suffice for present purposes. The evidence

established that in late 2014 the Hofschulzes opened a “pain

management clinic” in Wauwatosa, Wisconsin—a suburban

community just west of Milwaukee—as a front for an opioid

mill. Over the next two years, Lisa prescribed millions of

opioid pills in exchange for cash-only payment. Robert, who

is not a medical professional, helped Lisa set up the clinic

and served as its registered agent and business manager.

For their first year in operation, the Hofschulzes ran the

clinic from a single 8x8-foot room adjacent to a chiropractic

office, leasing space from another couple and sometimes

giving their landlords large-quantity opioid prescriptions in

lieu of rent. The clinic had no exam table or medical equip-

ment. Lisa did not take patients’ vital signs, perform physi-

cal examinations, review medical records, or order imaging

or tests to diagnose illness or injury.

The clinic collected a cash-only fee of $200 to $300 per

visit from each patient, even though a majority were on

Medicaid and thus were entitled to free medical care. Nearly

all patients who visited the clinic—99 percent of them—left

with a prescription for an opioid drug (sometimes more than

4 Nos. 21-3403 & 21-3404

one). Few had conditions that justified treatment with

opioids; most patients were suffering from addiction or

untreated mental illness rather than seeking legitimate

medical care for a confirmed injury or illness.

By late 2015 the Hofschulzes had too many “patients”

(and a growing waiting list) for the one-room “clinic,” so

they moved to a somewhat larger temporary location in a

nearby office building. They also began to bring on addi-

tional nurse practitioners, hiring only newly minted nurses

who lacked work experience. Most lasted no more than a

few months. Several of these short-term nurses testified at

trial, explaining that they raised concerns with the Hofschul-

zes that the clinic’s operations did not conform to standard

medical practice. Their efforts to sound the alarm were

rebuffed, and many of the nurses either resigned within a

few months or were fired after expressing concerns about

Lisa’s prescribing practices and the clinic’s lack of standard

medical care.

One patient fatally overdosed on opioids Lisa had pre-

scribed for him. Frank Eberl came to the clinic repeatedly for

more than a year, leaving each time with opioid prescrip-

tions in amounts appropriate for end-of-life cancer patients

(he was not a cancer patient). Eberl overdosed and died four

days after receiving a high-dose opioid prescription from

Lisa.

For the two-year period from 2015 through 2016, Lisa

wrote prescriptions for more than 2 million opioid pills,

collecting over $2 million in cash from patients, many of

whom were repeat customers and obviously addicted.

Indeed, during this period Lisa Hofschulz was the leading

Nos. 21-3403 & 21-3404 5

prescriber of oxycodone and methadone among all Medicaid

prescribers in Wisconsin.

In July 2016 Lisa was called away from Wisconsin to tend

to a family matter, so she prewrote and presigned numerous

opioid prescriptions and directed two newly hired nurses—

just out of nursing school—to dispense them to patients

while she was gone. They refused, objecting that they had

not yet completed their licensing and that dispensing pre-

written prescriptions was unsafe and illegal. Robert fired

one of the nurses for her refusal to comply with Lisa’s

instructions, replacing her with a registered nurse from a

temporary agency who was willing to distribute the prewrit-

ten prescriptions. The temp-agency nurse distributed more

than 550 presigned opioid prescriptions while Lisa was

away.

The government also presented opinion testimony from

Dr. Timothy King, a medical expert who explained the

standard of care for legitimate medical practice in pain

management. Finally, the government called several of the

clinic’s patients as witnesses; they confirmed the facts we’ve

just described about the clinic’s operations. There was more

to the government’s case, but further elaboration is unneces-

sary.

As we’ve noted, the Hofschulzes were charged with vio-

lating the Controlled Substances Act, which makes it a crime

to “knowingly or intentionally … manufacture, distribute, or

dispense … a controlled substance” “[e]xcept as authorized”

by the Act. § 841(a). As relevant here, registered medical

professionals may prescribe controlled substances to their

patients, but a prescription is “authorized” and thus except-

ed under the Act only when a registered medical profession-

6 Nos. 21-3403 & 21-3404

al issues it “for a legitimate medical purpose … acting in the

usual course of his professional practice.” 21 C.F.R.

§ 1306.04(a).

Accordingly, the judge instructed the jury on the drug-

distribution counts as follows:

For you to find a defendant guilty of distrib-

uting and dispensing a controlled substance,

the government must prove the following ele-

ments beyond a reasonable doubt as to the de-

fendant and the charge that you are

considering:

First, that that defendant knowingly caused to

be distributed or dispensed the controlled sub-

stance alleged in the charge you are consider-

ing;

Second, that that defendant did so by intention-

ally distributing or dispensing the controlled sub-

stance outside the usual course of professional

medical practice, and not for legitimate medical

purpose; and

Third, that that defendant knew that the sub-

stance was some kind of a controlled sub-

stance. (Emphasis added.)

The judge gave an additional instruction for the charge of

unlawful distribution resulting in death: “In order to estab-

lish that the oxycodone and morphine distributed by Lisa

Hofschulz resulted in the death of Frank Eberl[,] the gov-

ernment must prove that Frank Eberl died as a result of his

use of the oxycodone and morphine that Lisa Hofschulz

distributed … .” This instruction also included an explana-

Nos. 21-3403 & 21-3404 7

tion of the but-for causation standard adopted in Burrage v.

United States, 571 U.S. 204 (2014).

The jury found both defendants guilty on all counts. Lisa

moved for judgment of acquittal or alternatively, for a new

trial. She argued primarily that the evidence was insufficient

to prove that she had issued prescriptions without a legiti-

mate medical purpose. The judge denied the motion, ruling

that the evidence we’ve just recounted was easily sufficient

for a reasonable jury to find that Lisa had prescribed con-

trolled substances outside the usual course of medical

practice and not for legitimate medical purposes. As the

judge put it: “[A] reasonable jury could look at these facts

and conclude beyond a reasonable doubt that Lisa Hof-

schulz was issuing prescriptions for other than a legitimate

purpose—that she was issuing all of these prescriptions

under these circumstances for purposes of making money,

and a lot of it.”

Lisa also argued that Dr. King, the government’s expert,

provided impermissible legal conclusions in his testimony.

The judge rejected this contention, noting that Dr. King had

“offered nothing more than his expert opinion on the stand-

ard of care for medical professionals.”

Robert likewise moved for judgment of acquittal, chal-

lenging the sufficiency of the evidence to prove his guilt on

the charges against him. The judge denied his motion too,

noting that although Robert was not a medical professional,

the government had introduced ample evidence for the jury

to find beyond a reasonable doubt that he intentionally

conspired with Lisa to unlawfully distribute controlled

substances and aided and abetted the commission of the

four substantive distribution crimes. Among other data-

8 Nos. 21-3403 & 21-3404

points from the trial, the judge emphasized Robert’s obvious

awareness that the clinic lacked any accoutrements of legit-

imate medical practice and the testimony from several

nurses that they had raised concerns with him about Lisa’s

unauthorized prescribing practices and the clinic’s lack of

legitimate medical care.

With the posttrial motions resolved, the judge turned to

sentencing. The “death resulting” count against Lisa carried

a 20-year minimum prison term; the judge imposed the

minimum 20-year term on that count and concurrent sen-

tences of varying lesser lengths on the conspiracy and

remaining drug-distribution convictions. Robert was sen-

tenced to concurrent terms of 36 months in prison on each of

his five convictions.

II. Discussion

On appeal the Hofschulzes raise several claims of

instructional and evidentiary error. They also challenge the

sufficiency of the evidence to support their convictions.

A. Jury Instructions

The defendants’ primary argument is that the jury in-

structions did not comply with the Supreme Court’s decision

in Ruan, which as we’ve noted was issued after they were

sentenced. We review the accuracy of the jury instructions

de novo. United States v. Bonin, 932 F.3d 523, 537–38 (7th Cir.

2019). The trial judge has substantial discretion to formulate

the language of the instructions as long as the instructions as

a whole “represent a complete and correct statement of the

law.” Id. at 538 (quotation marks omitted). If the instructions

correctly stated the law, then we review the judge’s phrasing

of them for abuse of discretion. Id.

Nos. 21-3403 & 21-3404 9

Section 841(a) makes it unlawful to “knowingly or inten-

tionally … manufacture, distribute, or dispense … a con-

trolled substance” “[e]xcept as authorized” by the

Controlled Substances Act. In Ruan the Supreme Court held

that “§ 841’s ‘knowingly or intentionally’ mens rea applies to

the ‘except as authorized’ clause.” 597 U.S. at 457. Accord-

ingly, to convict a medical professional for violating § 841(a),

the government must “prove beyond a reasonable doubt

that the defendant knowingly or intentionally acted in an

unauthorized manner.” Id.

Ruan involved two consolidated cases from the Tenth

and Eleventh Circuits raising the same question about the

statute’s state-of-mind requirement as applied in cases

against registered medical prescribers. As noted above, the

Controlled Substances Act authorizes certain licensed and

registered medical professionals to prescribe controlled

substances to patients. See 21 U.S.C. §§ 822(a)(2), 829(a). The

prescribed drug must have “a currently accepted medical

use,” id. § 812(b), and the prescription must be “for a medical

purpose,” id. § 829(c). The Act defines a “valid prescription”

as one “issued for a legitimate medical purpose by an indi-

vidual practitioner,” id. § 830(b)(3)(A)(ii); the term “practi-

tioner” includes physicians and other licensed medical

professionals who are permitted by their licensing authori-

ties to dispense controlled substances “in the course of

professional practice,” id. § 802(21).

A regulation pulls these statutory requirements together:

A prescription for a controlled substance is “authorized”

under the Act when it is “issued for a legitimate medical

purpose by an individual practitioner acting in the usual

course of his professional practice.” 21 C.F.R. § 1306.04(a).

10 Nos. 21-3403 & 21-3404

See also Gonzales v. Oregon, 546 U.S. 243, 257 (2006) (explain-

ing that this regulation “restate[s] the terms of the statute

itself”). We therefore assume, as Ruan did, “that a prescrip-

tion is ‘authorized’ and therefore lawful if it satisfies [the

§ 1306.04(a)] standard.” 597 U.S. at 455.

Here the district judge carefully crafted the relevant jury

instruction to apply the statutory state-of-mind standard to

the § 1306.04(a) requirements, as had been the practice in our

circuit even prior to Ruan. See, e.g., United States v. Kohli, 847

F.3d 483, 489–90 (7th Cir. 2017); United States v. Chube II, 538

F.3d 693, 697–98 (7th Cir. 2008). The instruction explained

that the government had the burden to prove beyond a

reasonable doubt that the defendants “knowingly caused [a

controlled substance] to be distributed or dispensed” and

that they “did so by intentionally distributing or dispensing

the controlled substance outside the usual course of profes-

sional medical practice, and not for legitimate medical

purpose.” (Emphases added.) This is an accurate statement

of the law and fully compliant with Ruan.

The Hofschulzes resist this conclusion, arguing that the

judge was required to instruct the jury that a prescriber’s

good-faith belief in the legitimacy of his actions negates

intent. Ruan does not suggest—much less mandate—that

judges give such an instruction. The jury instruction here

clearly explained that the government needed to prove

beyond a reasonable doubt that the defendants intentionally

distributed drugs outside the usual course of medical prac-

tice and not for a legitimate medical purpose. Ruan requires

nothing more. Indeed, the judge went further than necessary

by using the word “intentionally” alone—rather than the

statutory phrase “knowingly or intentionally”—with respect

Nos. 21-3403 & 21-3404 11

to the authorization requirement. In that sense, the instruc-

tion was subtly more favorable to the defense than it needed

to be.

Taking a different tack, the Hofschulzes also suggest that

Ruan adopted a criminal willfulness standard, which if true

would require the government to prove that the prescriber

knew that his conduct was illegal. But nothing in Ruan even

hints at a criminal willfulness standard. The Court reasoned

by analogy to several cases in which it had interpreted other

criminal statutes to contain, at least implicitly, a “knowledge

of status” or “knowledge of nonauthorization” mens rea. Id.

at 461, 467. The Court did not mention a “knowledge-of-

law” requirement (i.e., knowledge that conduct was illegal).

The difference between the two standards “is so important

… that the Supreme Court would not have adopted the

broader [knowledge-of-law] reading without saying so with

unmistakable clarity.” United States v. Maez, 960 F.3d 949,

954–55 (7th Cir. 2020).

Our conclusion that the judge’s instructions complied

with Ruan aligns with a decision from the Third Circuit

involving a similar challenge to materially identical pre-

Ruan jury instructions. See United States v. Titus, 78 F.4th 595,

602 (3d Cir. 2023) (affirming a doctor’s conviction in a case

involving jury instructions that required the jury to find that

he “knowingly or intentionally distributed controlled sub-

stances outside ‘the usual course of professional practice and

not for a legitimate medical purpose’”). The Hofschulzes

draw our attention to decisions from the Tenth and Eleventh

Circuits on remand from the Supreme Court in Ruan. See

United States v. Kahn, 58 F.4th 1308 (10th Cir. 2023); United

States v. Ruan, 56 F.4th 1291 (11th Cir. 2023). But the pre-Ruan

12 Nos. 21-3403 & 21-3404

jury instructions in those cases lacked the intent requirement

that was clearly included in the jury instructions here.

The Hofschulzes raise two additional claims of instruc-

tional error. First, they argue that the jury instruction on the

“death-resulting” count erroneously imposed strict liability.

Second, they claim that the judge was wrong to reject their

pretrial request for an instruction explaining the difference

between the civil-malpractice liability standard and the

standard for criminal liability under § 841.

The first argument was not preserved, so we review only

for plain error. United States v. McClellan, 794 F.3d 743, 753–54

(7th Cir. 2015). Before we will consider exercising our discre-

tion to correct a forfeited error, we must first find “(1) [an]

error (2) that is plain, and (3) that affects the defendant’s

substantial rights.” Id. at 754 (quotation marks omitted). An

error is “plain” only if it is clear or obvious under current

law. United States v. Olano, 507 U.S. 725, 734 (1993).

There was no error here, let alone a plain error. The in-

struction on the death-resulting distribution count did not

impose strict liability. We’ve already explained that the jury

instructions on the § 841 counts properly applied the “know-

ingly or intentionally” requirement to the act of distribution

and lack of authorization, as Ruan requires. The steeper

penalties in § 841(b) apply “if death or serious bodily injury

results from” the use of drugs involved in the underlying

§ 841(a) violation.

The judge’s “death resulting” jury instruction correctly

explained the law for this more serious variant of the of-

fense, including the correct causation standard. The instruc-

tion also properly explained that this more serious version of

Nos. 21-3403 & 21-3404 13

the offense “is committed regardless of whether th[e] de-

fendant knew or should have known that death would

result.” That’s an accurate statement of the law for the

enhanced penalties in § 841(b). The death-resulting instruc-

tion thus imposed strict liability only insofar as the underly-

ing drug-distribution instructions imposed strict liability; in

other words, not at all.

The second argument was only partially preserved. The

Hofschulzes made a pretrial request for a jury instruction on

the difference between the civil-malpractice and criminal

liability standards. The judge denied it but left the door open

for them to renew the request at the end of trial if the evi-

dence so warranted. They did not do so.

Setting that misstep aside, the claim of error is meritless.

The Hofschulzes argue that the judge was required to in-

struct the jury on the difference between the criminal and

civil liability standards because Dr. King testified that the

two standards are identical. He did no such thing: as ex-

plained in more detail below, he did not offer an opinion

about liability standards, criminal or civil; rather, he ex-

plained the standard of care in the usual course of profes-

sional medical practice in this context. Accordingly, the

instruction was at best unnecessary and at worst potentially

confusing. The judge was well within her discretion to reject

it.

B. Expert Testimony

The Hofschulzes next argue that Dr. King, the govern-

ment’s medical expert, should not have been permitted to

offer opinion testimony about whether Lisa’s conduct was

outside the usual course of professional practice and not for

14 Nos. 21-3403 & 21-3404

a legitimate medical purpose. This argument rests on a

misunderstanding of the rules for admission of expert

testimony.

Rule 704 of the Rules of Evidence expressly provides that

“[a]n opinion is not objectionable just because it embraces an

ultimate issue.” FED. R. EVID. 704(a). There is a qualifier: “In a

criminal case, an expert witness must not state an opinion

about whether the defendant did or did not have a mental

state or condition that constitutes an element of the crime

charged or of a defense.” Id. R. 704(b).

In United States v. Kohli we explained how Rule 704 ap-

plies in this specific context. 847 F.3d 483 (7th Cir. 2017).

Kohli involved a medical expert who, like Dr. King, provided

opinion testimony that the defendant’s prescribing practices

“were inconsistent with the usual course of professional

practice and lacked a legitimate medical purpose.” Id. at 491.

We explained that this testimony “falls squarely within the

parameters of Rule 704.” Id. We noted first that Rule 704(a)

explicitly permits experts to testify “about ultimate or dis-

positive issues in the case.” Id. And the expert in Kohli did

not violate the qualifier in Rule 704(b): he did not offer an

opinion about the defendant’s subjective mental state but

instead gave his opinion about the defendant’s prescribing

practices “in light of his own experience and training.” Id.

The same is true here. Dr. King’s testimony stayed well

within the bounds of Rule 704.

In a slightly different twist on the same argument, the

Hofschulzes insist that the judge wrongly permitted Dr.

King to testify about the medical standard of care in relation

to the “usual course of professional practice” and “legitimate

medical purposes.” Kohli forecloses this variant of the argu-

Nos. 21-3403 & 21-3404 15

ment too. We explained there that expert testimony on the

medical standard of care is not tantamount to an impermis-

sible expert opinion on the governing legal standard “just

because the two standards overlap.” Id. at 492. “If that were

the case, physicians could virtually never offer meaningful

expert opinions in prosecutions under § 841(a).” Id.

In their final challenge to the government’s expert, the

Hofschulzes argue that Dr. King’s testimony was at odds

with the standard for guilt under § 841 and was wrong as a

matter of law, effectively usurping the judge’s prerogative to

instruct the jury on the law. This argument is way off the

mark. Like the expert in Kohli, Dr. King did not testify about

the legal standard but instead gave expert testimony about

the “applicable standard of care among medical profession-

als.” Id. Though the medical standard of care is “no doubt

closely linked to § 841(a)’s prohibition on prescribing outside

the ‘usual course of professional medical practice,’” id., Dr.

King’s testimony did not invade the judge’s province as the

sole explainer of the law.

C. Sufficiency of the Evidence

Finally, the Hofschulzes argue that the evidence was in-

sufficient to establish their guilt. Great deference is owed to

the jury’s verdict. United States v. Beechler, 68 F.4th 358, 368

(7th Cir. 2023). “We view the evidence in the light most

favorable to the government and will overturn a conviction

only if the record contains no evidence from which a reason-

able juror could have found the defendant guilty.” United

States v. Longstreet, 567 F.3d 911, 918 (7th Cir. 2009). This

highly demanding standard is rightly characterized as

imposing “a nearly insurmountable burden.” Beechler, 68

F.4th at 368 (quotation marks omitted).

16 Nos. 21-3403 & 21-3404

The Hofschulzes have not come remotely close to satisfy-

ing this demanding standard. They continue to insist, as

they did in their posttrial motions, that the government

failed to prove that they knew their opioid prescriptions

were “unauthorized.” This argument is frivolous. As our

summary of the trial record shows, the government present-

ed plentiful evidence of their intent to prescribe opioids

outside the usual course of professional practice and not for

legitimate medical purposes. The Hofschulzes point to

evidence on the other side of the ledger—mostly their own

testimony claiming that they were operating a legitimate

pain clinic. But the jury was entitled to reject their testimony

and had ample basis to do so. In any event, we cannot

“supplant the jury’s credibility findings on appeal.” Kohli,

847 F.3d at 490. Abundant evidence supports the guilty

verdicts.

AFFIRMED