United States v. Martin J. Bradley, Jr.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED

________________________ U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

No. 06-14934 JUNE 29, 2011

________________________ JOHN LEY

CLERK

D. C. Docket No. 05-00059-CR-4

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

MARTIN J. BRADLEY, JR.,

BIO-MED PLUS, INC.,

ALBERT L. TELLECHEA,

MARTIN J. BRADLEY, III.,

Defendants-Appellants.

________________________

No. 06-15555

________________________

D. C. Docket No. 05-00059-CR-BAE-4

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

MARTIN J. BRADLEY, JR.,

Defendant-Appellant.

________________________

No. 06-15557

________________________

D. C. Docket No. 05-00059-CR-BAE-4

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

MARTIN J. BRADLEY, III.,

Defendant,

NORMA BRADLEY,

Interested Party-Appellant.

________________________

No. 06-15676

________________________

D. C. Docket No. 05-00059-CR-BAE-4

UNITED STATES OF AMERICA,

2

Plaintiff-Appellee,

versus

ALBERT L. TELLECHEA,

Defendant-Appellant.

________________________

No. 06-15677

________________________

D. C. Docket No. 05-00059-CR-BAE-4

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

MARTIN J. BRADLEY, III.,

Defendant-Appellant.

________________________

No. 07-12370

________________________

D. C. Docket No. 05-00059-CR-4

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

3

versus

NORMA BRADLEY,

MARTIN J. BRADLEY, JR.,

MARTIN J. BRADLEY, III,

Defendants-Appellants,

MARIA BRADLEY,

Defendant.

________________________

Appeals from the United States District Court

for the Southern District of Georgia

_________________________

(June 29, 2011)

Before TJOFLAT and CARNES, Circuit Judges, and HOOD,* District Judge.

TJOFLAT, Circuit Judge:

This case involves multiple schemes to defraud the Florida and California

Medicaid programs by causing them to pay for blood-derivative medications

(“blood-derivatives”)1 more than once. Martin J. Bradley III and his father, Martin

J. Bradley, Jr., (collectively “the Bradleys”) owned Bio-Med Plus, Inc. (“Bio-

*

Honorable Joseph M. Hood, United States District Judge for the Eastern District of

Kentucky, sitting by designation.

1

Blood-derivatives are derived from whole blood, plasma, and genetically engineered

cell lines and used to treat viral diseases, immune deficiencies, and clotting disorders.

4

Med”)2, a Miami-based pharmaceutical wholesaler that purchased and sold blood-

derivatives. Beginning in 1996, in addition to purchasing blood-derivatives from

drug manufacturers, the Bradleys had Bio-Med purchase blood-derivatives that had

not been administered to the patients for whom they had been prescribed and place

those blood-derivatives in its inventory. Most of these patients were eligible for

Medicaid—that is, Florida Medicaid, California Medicaid (“Medi-Cal”), or the

Genetically Handicapped Persons Program (“GHPP”)3—and Medicaid had paid for

their prescriptions. Bio-Med thereafter sold the unused blood-derivatives to

pharmacies in Florida and California. The pharmacies, in turn, used them to fill

prescriptions and then, in most cases, obtained reimbursement from the states’

Medicaid programs.

Although these recycled blood-derivatives accounted for less than two and a

half percent of Bio-Med’s overall sales, they accounted for a much larger portion

of Bio-Med’s profits, yielding in excess of $39 million over a five-year span from

1998 through 2002.

The Government chose to prosecute the Bradleys’ schemes under the anti-

racketeering, conspiracy, mail fraud, wire fraud, and money laundering statutes, 18

2

The Bradleys incorporated Bio-Med under Florida law and owned all of its shares.

3

GHPP is a California agency.

5

U.S.C. §§ 1962, 371, 1341, 1343, and 1956, respectively, and the statutes

criminalizing the failure to disclose an interest in a financial account in a foreign

country while engaging in a pattern of illegal activity, i.e., mail fraud, wire fraud,

or money laundering, 31 U.S.C. §§ 5314 and 5322(b). The grand jury indicted

eight individuals, Bio-Med, and Interland Associates, Inc.4 All ten defendants

4

A Southern District of Georgia grand jury returned two indictments in this case. The

first indictment was returned on March 22, 2005, the second, i.e., the superceding indictment,

was returned on September 20, 2005. The initial indictment contained 288 counts. The

superceding indictment contained 286 counts. The superceding indictment charged ten named

defendants—Martin J. Bradley III, Martin J. Bradley, Jr., Jose A. Trespalacios, Edwin Rivera,

Jr., Albert L. Tellechea, Marlene C. Caceres, Stephen B. Getz, Sara E. Griffin, Bio-Med Plus,

Inc., and Interland Associates, Inc.—as follows. Count 1 charged all ten defendants under 18

U.S.C. § 1962©) with conducting the affairs of an “enterprise” (consisting of the defendants)

through a pattern of racketeering activity, namely violations of 18 U.S.C. §§ 1341, 1343, 2314,

and 1956(a)(1)(A)(i) and (B)(i), and 31 U.S.C. §§ 5314, 5322(b), 5324(a)(3), and 5324(d). The

alleged purpose of the racketeering enterprise was to “obtain money for [the defendants] through

mail fraud, wire fraud, interstate transportation of stolen goods and money laundering, in

violation of [18 U.S.C. §§] 1341, 1343, 1956, and 2314.” Count 2 charged all ten defendants

under 18 U.S.C. § 1962(d) with conspiring to commit the substantive Count 1 offense. Count 3

charged the Bradleys, Bio-Med, Tellechea, Trespalacios, and Rivera under 18 U.S.C. § 371 with

conspiring to defraud Florida Medicaid, in violation of 18 U.S.C. § 1343, and to pay physicians

kickbacks to induce them to refer prescriptions for intravenous immune globulin and other

prescription drugs to specific pharmacies, in violation of 42 U.S.C. § 1320a-7b(b)(2)(B). Counts

4 through 32 charged the Count 3 defendants with defrauding Florida Medicaid, in violation of

18 U.S.C. § 1343. Count 33 charged the Bradleys and Bio-Med under 18 U.S.C. § 371 with

conspiracy to defraud Medi-Cal and GHPP, in violation of 18 U.S.C. § 1343. Counts 34 through

53 charged the Bradleys and Bio-Med with defrauding Medi-Cal and GHPP, in violation of 18

U.S.C. § 1343. Count 54 charged the Bradleys with conspiracy to commit money laundering, in

violation 18 U.S.C. § 1956(h). Counts 55 through 82 charged the Bradleys with money

laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) and (B)(i). Counts 83 through 283

charged the Bradleys with money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) and

(B)(i). Count 284 charged Bradley III and Counts 285 and 286 charged Bradley, Jr., with

violating 31 U.S.C. §§ 5314 and 5322(b) by failing to file a report of foreign financial

transactions while committing mail fraud, wire fraud, and money laundering.

In addition to the foregoing, the indictment sought the forfeiture of: (1) interests any

defendant “acquired or maintained” in violation of 18 U.S.C. §§ 1962©) and (d) (anti-

racketeering); (2) interests a defendant obtained in any “property involved in” the violation of 18

6

stood trial before a jury. The jury exonerated five defendants5 and returned

verdicts of guilty against four, Bradley III, Bradley, Jr., Bio-Med, and Albert L.

Tellechea.6 It found against Bradley III on Counts 1 through 54 and 83 through

284, Bradley, Jr., on Counts 1, 54, 285, and 286, Bio-Med on Counts 1 through 53,

and Tellechea on Count 3.7

The district court sentenced the Bradleys and Tellechea to terms of

imprisonment, imposed fines, and ordered them to make restitution. Bio-Med was

placed on probation, fined, and also ordered to make restitution. As part of the

Bradleys’ sentences the district court ordered forfeiture to the United States of the

Bradleys’ interests in Bio-Med. The court also ordered the Bradleys and Bio-Med

to pay to the United States jointly and severally, as forfeiture, the sum of $39.5

million. All four defendants appealed their convictions and sentences.8

U.S.C. §§ 1956 or 1957 (money laundering) and any “property traceable to such property”; and

(3) interests in “any property constituting, or derived from proceeds [a defendant] obtained . . .,

as the result of” the violation of 18 U.S.C. § 1343 (wire fraud).

5

The jury found Trespalacios, Rivera, Caceres, Getz, and Griffin not guilty on the

counts brought against them.

6

The district court dismissed the case against Interland Associates, Inc. on its motion for

judgment of acquittal made at the close of the Government’s case in chief. See Fed. R. Crim. P.

29(a). The court also granted the Bradleys’ motion for judgment of acquittal on Counts 55

through 82. See id.

7

The jury returned a special verdict on Count 1. As part of that special verdict, the jury

listed, for each of the three convicted defendants, the specific numbers of the racketeering acts it

found the defendants had committed beyond a reasonable doubt.

8

We have jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).

7

Twenty-three days after the imposition of the four defendants’ sentences,

and while their convictions and sentences were on appeal, the district court, to aid

the Government in realizing the above forfeiture and the fines and special

assessments imposed on the defendants, entered an order appointing a receiver and

instructed her to marshal the defendants’ assets. The Bradleys, Bradley, Jr.’s wife,

Norma Bradley, and Tellechea appealed that order,9 and it is now before us along

with the appeals of the convictions and sentences.10

The Bradleys, Bio-Med, and Tellechea seek the reversal of their convictions

and the entry of judgments of acquittal on the ground that the jury’s verdicts lack

evidentiary support.11 Alternatively, they seek the vacation of their convictions

and remand for a new trial on the ground that adverse rulings the district court

9

We have jurisdiction under 28 U.S.C. § 1292(a)(2), which grants us jurisdiction over

interlocutory orders appointing receivers.

10

No. 06-14934 is the appeal of the defendants’ convictions and sentences. The appeals

of the order appointing the receiver are: No. 06-15555 (Bradley, Jr.); No. 06-15557 (Norma

Bradley); No. 06-15676 (Bradley III); No. 06-15677 (Tellechea). No. 07-12370 is an appeal the

Bradleys and Norma Bradley took from the district court’s order of May 17, 2007. All of these

appeals have been consolidated. We previously dismissed three appeals taken by Maria Bradley,

Bradley III’s wife, challenging the receivership order and orders relating to the receivership,

Nos. 06-15021, 06-15022, and 06-15675.

11

All four convicted defendants moved the district court for judgments of acquittal at the

close of the Government’s case in chief and at the close of all the evidence, both pursuant to Fed.

R. Crim. P. 29(a), and again following the return of the jury’s verdicts, pursuant to Fed. R. Crim.

P. 29©).

8

made pretrial and at trial deprived them of a fair trial.12 If neither form of relief is

forthcoming, the defendants seek resentencing on the ground that the district court

erred in applying the Sentencing Guidelines. The Bradleys, Norma Bradley, and

Tellechea challenge the order creating the receivership on the ground that the

Government does not need a receiver to collect the fines and special assessments

the defendants are required to pay because the legal remedies the law provides are

sufficient for that purpose. Nor, they argue, is a receiver needed to ensure that the

defendants satisfy their restitution obligations to the victims of their crimes.

We begin our consideration of these appeals by setting out, in part I, the

facts the Government established in its case in chief.13 In part II, we explain why,

in the light of those facts, the jury’s verdicts rest on solid ground. Part III

determines that there is no basis in the district court’s adverse rulings—both

pretrial and at trial—for granting a new trial. Part IV considers the challenges to

the defendants’ sentences, affirms Bradley III’s and Bio-Med’s sentences, vacates

12

Along with their Rule 29©) motions for judgment of acquittal, these defendants

moved the district court for a new trial pursuant to Fed. R. Civ. P. 33 based on the same grounds

they advance in this appeal.

13

Because we must determine whether the evidence presented at trial is sufficient to

sustain the defendants’ convictions, we present the facts in part I in the light most favorable to

the United States. United States v. Tampas, 493 F.3d 1291, 1297–98 (11th Cir. 2007). These

facts do not need to “exclude every reasonable hypothesis of innocence or be wholly inconsistent

with every conclusion except that of guilt.” Id. at 1298 (citation omitted). Rather, the question

is whether those facts would enable a reasonable jury to find guilt beyond a reasonable doubt.

Id.

9

Bradley, Jr.’s and Tellechea’s sentences, and remands their cases for resentencing.

Part V addresses the challenges to the receivership. Part VI concludes.

I.

The schemes to defraud the Florida and California Medicaid programs were

of varying levels of complexity. All involved the “recycling”14 of blood-

derivatives,15 numerous individuals and corporate entities, and multiple

transactions. The “Florida Medicaid Scheme” encompassed several smaller

14

The process of recycling prescription medication, as that term is colloquially

understood, involves the repurchase or reacquisition and restocking of medication. It is entirely

possible for this process to be legal, and in some cases it is quite beneficial. For example, a

prescription drug wholesaler might obtain unused medication from a pharmacy, restock that

medication, and resell it to another pharmacy or patient. Such is an example of the legitimate

“secondary market” for prescription blood-derivatives. The term “recycling,” however, does

include the process complained of here, where medication is dispensed to patients, repurchased

from those patients after an undetermined time and in an undetermined state, and then resold.

15

In this opinion, we omit discussion of other fraudulent schemes alleged in the

indictment, all involving the “diversion” of various medications, because such schemes are not

relevant to the issues the defendants have raised on appeal. Though certainly related, diversion

schemes differ slightly from recycling schemes. A diversion scheme involves the improper

purchase or acquisition of medications, as opposed to a recycling scheme, which involves

repurchase or reacquisition. The difference lies in the fact that, in a recycling scheme, the

medications have been previously distributed by the manufacturer or the wholesaler, and the

schemer is purchasing them on the “open” market in order to sell them for a profit; if there is a

wrong, it depends on whether the medications have been properly cared for by the original

purchaser and whether the secondary purchaser fully discloses and accounts for the medications’

condition. See supra note 14. In a diversion scheme, by way of contrast, the wrong is

committed upon the initial purchase or acquisition. The market for diverted medications is not

“open”; the market has been restricted by the manufacturer or wholesaler to certain individuals

or entities, and the schemer has misrepresented himself or itself to gain access to that market. It

is only after the schemer has wrongfully gained access to the medications that he or it is able to

take them to a different market and sell them for a profit in a process similar to arbitrage—the

practice of taking advantage of price differences in two different markets, that is, buying a

product at a lower price in one (here, restricted) market and selling at a higher price in another

(here, open) one.

10

schemes named for the various individuals and entities with whom the Bradleys

and Bio-Med were conducting business, including the “Infustat & Seratech

Scheme,” the “Sentry/Castro Scheme,” and the “Liz Pascual/IV Solutions

Scheme.” The “California Medicaid Scheme,” involving Medi-Cal and GHPP,

included no sub-schemes. We begin in Florida and then move to California.

A.

The Florida Medicaid Scheme was executed in this way. Physicians who

were working at AIDS clinics in the Miami area and prescribing intravenous

immune globulin (“IVIG”)16 for AIDS patients were recruited by Bradley III

confederates Harry Castro, Jose A. Trespalacios, and Tellechea17 to do two things:

(1) to have their prescriptions filled at Infustat, Inc. (“Infustat”)18 and Seratech, Inc.

16

IVIG is the general acronym for intravenous immune globulin, a blood-derivative used

to treat patients with a compromised immune system. The medication is sold under a variety of

names; some varieties are more expensive than others. As the acronym suggests, IVIG is

infused into a patient’s body intravenously. Physicians at HIV treatment centers diagnose

patients in need of IVIG infusions and clinical employees conduct the infusions.

17

Castro began recruiting the physicians while working with Tellechea and Trespalacios

at Infustat, Inc.; Tellechea and Trespalacios dealt with the physicians after Castro recruited them.

At some point, Castro left Infustat, purchased Sentry Drugs (the genesis of the Sentry/Castro

Scheme), and started working the same scam with three of the physicians he had originally

recruited for Infustat. Tellechea and Trespalacios continued to work with remaining physicians,

including Dr. Patrick Cadigan and Dr. Jose Arocha. Tellechea was also linked through evidence

seized from his office to two additional physicians, Dr. Karen Raben and Dr. Lawrence Feldman.

18

Infustat, a Florida corporation, was originally formed by Tellechea, Castro, and

Rivera. Bradley III purchased Castro’s share after Castro left Infustat.

11

(“Seratech”),19 both “closed door pharmacies”20 in which the Bradleys possessed an

ownership interest or otherwise controlled;21 and (2) to resell back to the Bradleys

and Bio-Med the IVIG that went unused when a patient failed to appear at the

clinic for the IVIG infusion.22 For that unused IVIG, the Bradleys paid

approximately one-third the price at which Florida Medicaid had reimbursed the

pharmacies. In addition to the sale price of the IVIG, the physicians received

kickbacks for having their patients’ prescriptions filled at Infustat and Seratech; for

example, Dr. Jose Arocha and Dr. Patrick Cadigan received kickbacks of $10,000

and $5,000, respectively, each month for continuing the arrangement.

19

Seratech was incorporated under Florida law.

20

In the context of the Florida Medicaid Scheme, a “closed door pharmacy” purchased

blood-derivatives from manufacturers and wholesalers for distribution, sold the medication to a

limited patient population, and delivered it to the patients or the patients’ physicians for

administration.

21

After filling the prescriptions, Infustat and Seratech submitted, at the beginning of

each month, a mass-reimbursement request to Florida Medicaid to obtain payment for the

prescriptions they filled the previous month. Like any pharmacy seeking Florida Medicaid

reimbursement, these pharmacies had to provide Florida Medicaid with the patients’ Medicaid

numbers to be reimbursed. The pharmacies were given the Medicaid numbers by the physicians

when they prescribed IVIG for their patients. Armed with these Medicaid numbers, the

pharmacies obtained reimbursement from Florida Medicaid; every month, the physicians would

renew the patients’ prescriptions, and the pharmacy would submit a new reimbursement request

to Florida Medicaid. Pharmacies often submitted their reimbursement requests for a group of

prescriptions rather than for individual prescriptions. Although expressly permitted under—and

even directed by—Florida Medicaid rules, the practice of submitting such massive requests

made it highly unlikely that Florida Medicaid would closely scrutinize an individual

prescription.

22

After filling an IVIG prescription, the pharmacy delivered the medication straight to

the clinic for infusion by the prescribing physician.

12

About twice a month, Tellechea or Trespalacios, or both, came to the clinics,

picked up the unused IVIG, and took it to Michael Bossey, who owned MedPoint,

Inc. (“MedPoint”), a closed door pharmacy operating in the Miami area. Bossey,

in turn, delivered the IVIG to Bio-Med’s warehouse in Miami.23

Bossey provided Tellechea with the money to pay the physicians who sold

the IVIG.24 Bossey obtained the necessary funds by having MedPoint invoice Bio-

Med for the illictly-procured IVIG at the going wholesale price pharmacies were

paying wholesalers for the medication. This created the impression that MedPoint,

a pharmacy, was returning to Bio-Med the IVIG it did not need, or was swapping

IVIG for other blood-derivatives that it needed more than IVIG, and that Bio-Med,

a wholesaler, was willing to purchase the IVIG or accept it as payment.

Bio-Med subsequently sold the unused IVIG to pharmacies, both those

owned by the Bradleys and unsuspecting third party pharmacies, which used the

medications to fill prescriptions for other patients.25 Using the other patients’

23

Bossey obtained the majority of MedPoint’s blood-derivatives from legitimate

sources, but, as with Bio-Med, earned a larger profit with recycled IVIG. Bossey was not

indicted for his role in the Florida Medicaid Scheme and testified for the prosecution at trial.

24

Tellechea paid the physicians in cash. Bossey paid Tellechea in cash or by a check

drawn on MedPoint’s bank account. Bio-Med provided Bossey with the funds needed to cover

the checks.

25

Bossey, on behalf of the Bradleys and Bio-Med, sometimes forged or altered drug

labels and expiration dates and affixed them to the recycled IVIG vials along with forged

“pedigree” papers. A pedigree is a document designed to track the supply chain of medication,

memorializing each transaction as the drugs move from manufacturer to the ultimate recipient.

13

Medicaid numbers, these pharmacies billed Florida Medicaid for the unused IVIG.

Over time, the Florida Medicaid Scheme grew to involve a second

prescription drug wholesaler owned by the Bradleys, Intermed Pharmaceutical,

Inc., d/b/a Intermed Marketing of Savannah (“Intermed”).26 Intermed ostensibly

operated as Bio-Med’s purchasing agent, but was largely used to conceal payments

made to Bossey and Tellechea and, through them, to the physicians who were

providing the unused IVIG. Bossey, on behalf of MedPoint, billed Intermed for

the unused IVIG he delivered to Bio-Med.27 Intermed, in turn, paid Bossey at

MedPoint. This gave the appearance that MedPoint was selling Intermed excess

inventory of traditionally-acquired IVIG instead of the unused IVIG Bossey was

delivering to Bio-Med’s Miami warehouse. Bio-Med provided Intermed the funds

See 21 U.S.C. § 353(e)(1)(A) (codifying the “pedigree” requirement of the Prescription Drug

Marketing Act of 1987, Pub. L. No. 100-293, 102 Stat. 95, and the Prescription Drug

Amendments of 1992, Pub. L. 102-353, 106 Stat. 941). A pedigree enables a person to trace the

movement of a medication from its sale by the manufacturer, through its acquisition and resale

by the wholesaler or repackager, to the final sale to a pharmacy. It helps in confirming that

medication has been properly shipped and stored, and is useful in determining which patients to

alert in the case of a recall.

26

Bradley III and Bradley, Jr., incorporated Intermed in Georgia in 1998. Bradley, Jr.,

served as the company’s Chief Executive Officer and Chief Financial Officer.

27

Bossey, at Bradley III’s request, frequently misstated the quantity and price of the

IVIG MedPoint purportedly sold to Intermed. Bradley III worried that industry regulators would

become suspicious if Intermed purchased drugs well below the industry average price, so he had

Bossey increase the listed price for the IVIG and decrease the stated quantity on the invoices he

sent to Intermed. Copies of these invoices found at Bio-Med included hand-written notations

confirming the actual quantity of IVIG Bossey delivered to Bio-Med.

14

it needed to complete the transactions.

The amount of recycled IVIG Florida Medicaid paid for varied based on the

number of patients who had prescriptions for IVIG, but failed to appear for their

infusions. According to an assistant of Dr. Arocha,28 only a small percentage of

Dr. Arocha’s patients regularly kept their appointments at the clinic. One of Dr.

Cadigan’s assistants said that only twenty to thirty percent of Dr. Cadigan’s

patients appeared at the clinic when scheduled for an infusion;29 Dr. Cadigan

estimated that figure to be fifty percent.30 By one estimate, Bio-Med paid

approximately $200,000 every month for recycled IVIG purchased from these two

physicians. Bio-Med paid nearly the same amount for IVIG from Sentry Drugs,

the closed door pharmacy Harry Castro acquired in 2000 after leaving Infustat.31

28

Some of the IVIG Infustat sent to Dr. Arocha’s clinic came in irregular

packaging—indicating that the IVIG had been recycled. Infustat billed Florida Medicaid for the

medication.

29

During Dr. Cadigan’s leave of absence from the clinic, one of his assistants began

supplying Tellechea with unused IVIG. When Dr. Cadigan returned, he continued the

relationship. He shared the $5,000 kickback he received each month with the clinical employees

who forged patient signatures certifying infusions that were never performed. Dr. Cadigan

ceased providing IVIG to Tellechea in December 2001.

30

Between February 2000 and February 2001, Dr. Cadigan was the most active

physician prescribing IVIG in Florida.

31

See supra note 17. Castro was not indicted for his role in the Florida Medicaid

scheme; he testified as a prosecution witness at the trial.

Upon leaving Infustat, Castro took with him a large quantity of IVIG from Infustat’s

inventory. Castro then resold that IVIG to Bradley III; the purchase price was included in the

price Bradley III paid for Castro’s interest in Infustat. Bradley III and Bio-Med continued doing

business with Castro after he purchased Sentry.

15

Sentry, like MedPoint, invoiced Intermed for the unused IVIG, but delivered it to

Bio-Med’s warehouse.

The Bradleys and Bio-Med made substantial profits on every gram of

recycled IVIG resold. It purchased the medications at approximately $40 per

gram; $20 went to the physician, $10 to Bossey, and $10 to Tellechea and

Trespalacios. During the same time period, Florida Medicaid reimbursed

pharmacies for IVIG at $54 per gram. The Bradleys thereby earned a profit

somewhere in the range of $14 per gram on IVIG it acquired from the physicians.32

Another Bio-Med source of IVIG was Elizabeth (“Liz”) Pascual, who owned

the closed door pharmacy, IV Solutions, Inc (“IV Solutions”),33 and who carried

out the so-called Liz Pascual/IV Solutions Scheme.34 Bradley III contacted Pascual

in 1998 in search of IVIG.35 When Pascual informed him that IV Solutions had

none in stock, Bradley III urged her to get on a manufacturer’s waiting list for the

32

This figure assumes that the Bradleys had Bio-Med sell the recycled IVIG to

pharmacies they controlled. It is possible, however, that the Bradleys might have had Bio-Med

sell the IVIG to third-party pharmacies at wholesale rates, which, depending upon the

circumstances, could have been higher or lower than $54.

33

IV Solutions was a privately owned Florida corporation.

34

Pascual was not indicted for her role in the scheme; she testified as a prosecution

witness at the trial.

35

During 1999 and 2000, the Food and Drug Administration closed two of the five major

producers of blood-derivatives, causing a major shortage of IVIG.

16

blood-derivative.36 Pascual did so, falsely indicating that she had patients in need

of IVIG; in reality, IV Solutions had no patients at all.37 In the meantime, Pascual

purchased unused IVIG from a source she developed. Pascual sold the recycled

IVIG to Bio-Med under invoices issued to Intermed. This medication often came

in irregular packaging and always without pedigree. To obscure the fact that the

IVIG was being recycled, Bradley III instructed Pascual to note on her invoices

“direct account with manufacturer,” a phrase which implied that pedigree had been

established.38 Pascual received payment for the IVIG in cashier’s checks

purchased by Intermed and delivered to her in person or by mail.

The Bradleys profited heavily from the IVIG Bio-Med obtained from

Pascual. Pascual purchased the IVIG for approximately $42 per gram and invoiced

it to Intermed at $54 per gram. Intermed invoiced it to Bio-Med at $58 per gram,

approximately the manufacturers’ price for IVIG during that period, so that the

transfer would look legitimate. Florida Medicaid reimbursed the Bradleys’

36

Pharmaceutical wholesalers, such as Bio-Med, were ineligible for the waiting list.

Due to the IVIG shortage, manufacturers would distribute IVIG only to closed door pharmacies

and doctors’ offices so that individual patients would be certain to get the dosage they needed.

37

This is an example of the unlawful diversion not at issue in this appeal; Pascual used

false pretenses to acquire medication the manufacturer would not have sold to her absent any

misdirection.

38

If Pascual failed to make the requested notation, a Bio-Med secretary would contact

her on behalf of Bradley III to remind her to note the “direct account” language on her invoices

to Intermed.

17

pharmacies, Infustat and Seratech, for the same IVIG at $72.89 per gram.39 On

every sale, the Bradleys and Bio-Med, through these pharmacies, effectively

retained the difference between the $54 per gram purchase price and the $72.89

reimbursement price, or $18.89 per gram.

B.

The Bradleys and Bio-Med began running the Medi-Cal/GHPP Scheme in

1998. Prior to that time, Actsys Medical, Inc. (“Actsys”), a prescription drug

wholesale business, supplied Recombinate,40 a hemophilia medication, to

pharmacies, which, in turn, obtained reimbursement from Medi-Cal or GHPP.

Actsys’ two principal owners, Jon Tamiyasu and Kelly Smith, and another

individual, Jim Williams, owned one of the closed door pharmacies, Apex

Therapeutic Care, Inc. (“Apex”), purchasing Recombinate from Actsys. As sales

representative for Apex, Williams then developed a network of hemophiliac

patients—all of whom subscribed to either Medi-Cal or GHPP—who were willing

to sell their excess Recombinate after receiving reimbursement for the medication

39

Though not explicit from the record, we assume that this was a different variety of

IVIG than was involved in the Infustat & Seratech and Sentry/Castro Schemes.

40

Recombinate is a blood factor medication used to aid clotting in hemophiliacs. Apex

supplied pharmacies with other medications that were similar to, and served the same purpose

as, Recombinate. For simplicity, we refer to all of these medications as Recombinate.

18

from Medi-Cal or GHPP.41 After negotiating with these patients, Williams

worked out a deal whereby he, Tamiyasu, and Smith (collectively, the “Apex

Partners”) would purchase that unused Recombinate and recycle it to be resold.42

In 1998, Tamiyasu approached Bradley III with an opportunity to purchase

this unused Recombinate at discounted rate, and Bradley III agreed. Thereafter,

once Williams obtained the Recombinate from his network of patients, Smith

would remove all identifying papers from the vials and ship the vials (off the

books) to Bio-Med in Miami. Bio-Med kept the majority of the recycled

Recombinate for its own stock and sold the remainder back to Apex, which, to

accommodate its arrangement with Bio-Med, had commenced operating as a

wholesaler as well as a closed door pharmacy. Eventually the Apex Partners

stopped shipping the unused Recombinate they intended to repurchase from Bio-

Med to Miami and instead held that Recombinate in California pending the

outcome of the transaction; that Recombinate was bought and sold, then, solely on

41

Unlike patients receiving IVIG, hemophiliac patients obtained their physician-

prescribed Recombinate directly from their pharmacy and performed their own infusions. The

Apex Partners knew that most patients were prescribed a monthly allotment of Recombinate

sufficient to allow them both daily prophylactic doses—i.e., to ensure that, at all times, they had

clotting factors in their blood—and a buffer amount for emergencies. Williams asked the

patients to either reduce their prophylactic dosages or stockpile the buffer amount to ensure that

a sizable supply of unused Recombinate was always on hand.

42

Tamiyasu, Williams, and Smith—the Apex Partners—were not indicted; they testified

for the Government at trial.

19

paper. This had the effect of washing the Recombinate clean of any taint—to an

outside observer, the Recombinate appeared to have been purchased legitimately

by Apex from Bio-Med and shipped to California from Miami even though it had

never once left the Apex Partners’ possession.

Both Bio-Med and Apex distributed the Recombinate to pharmacies, which,

unaware of how the Recombinate had been acquired, dispensed it to patients.

Apex also distributed the unused Recombinate to its patients. Medi-Cal and GHPP

reimbursed the pharmacies, including Apex, for the Recombinate at $1.28 per unit

(the rate for unused Recombinate).

Bio-Med paid the Apex Partners nearly $2.3 million for the Recombinate.

The payments were made in cash or by check written on a Bio-Med bank account.

After the Bradleys incorporated Intermed, Intermed paid the Apex Partners

approximately $2.1 million on its bank account in Savannah, Georgia. About

$300,000 more came from an account in Puerto Rico for which the Bradleys were

signatories. Finally, the Apex Partners charged another $1 million on an off-shore

credit card the Bradleys gave them. The credit card company was paid with funds

drawn on bank accounts in Nassau, Miami, and Savannah that were controlled by

the Bradleys.43

43

We discuss the circumstances of the Bradleys’ payments to the Apex Partners in more

detail in subpart C, infra.

20

C.

The Bradleys and their associates attempted to camouflage the profits they

realized from the schemes. In February 1998, the Bradleys incorporated Intermed

Pharmaceutical Supply, Corp. (“IPS”)44 as a trading company headquartered in

Nassau, the Bahamas. In May and December of that year, Bradley, Jr., opened two

accounts in IPS’s name at the Nassau location of Barclays Bank PLC. A

corresponding account was opened at a SunTrust Bank in Savannah. The Bradleys

then arranged for money to be transferred from their domestic accounts, including

the SunTrust account, into the Barclays accounts. In 1998, almost $2 million was

transferred. In 1999, that figure was nearly $3 million, dropping to a little more

than $800,000 in 2000.

Funds were paid out of the Barclays accounts to several individuals and

entities involved in the schemes. The payment methods were not consistent; the

Bradleys altered their methods after realizing that certain transactions were more

easily tracked by law enforcement. The Bradleys first transferred funds out of the

IPS accounts to a Barclays account in the name of Global Biologics, a corporation

the Apex Partners created.45 The Apex Partners obtained credit cards linked to the

44

IPS and Intermed are separate and distinct corporate entities.

45

The transfers from the IPS account to the Global Biologics account were made in

payment for Recombinate Apex collected and sold to Bio-Med as part of the California

Medicaid Scheme.

21

Global Biologics account, which they used to purchase luxury goods and other

personal items or services. The Bradleys also withdrew funds for their own use

from the IPS accounts by arranging for credit/debit cards to be issued in their

names and funding those cards with payments from the IPS accounts at Barclays.

Later, the Bradleys ceased using the cards and instead made direct transfers from

the Barclays accounts to Infustat’s and Bio-Med’s corporate accounts and to

Tellechea’s personal bank account. These transfers totaled over $1.5 million in

1998, over $3.1 million in 1999, and just north of $845,000 in 2000.46

Neither Bradley disclosed the existence of the Barclays accounts to the

Internal Revenue Service (“IRS”) in 1999 or 2000, both failing to check the

appropriate box on Form 1040’s Schedule B acknowledging “an interest in or a

signature authority or other authority over a financial account in a foreign

country.” The Bradleys also failed to file the corresponding Treasury Department

Form 90-22.1, which is used to report income from a foreign bank account.

II.

The Bradleys and Bio-Med argue that the facts as depicted above were

insufficient to establish that they committed the crimes alleged in the

46

These transfers, ranging anywhere from tens to multiple thousands of dollars were

ostensibly for pharmaceutical purchases made by IPS. However, IPS lacked the overhead costs

usually associated with a business engaging in such large transactions. For example, in 1998,

IPS’s telephone bill was only $26.

22

indictment—specifically, violations of the RICO, mail fraud, wire fraud, and

money laundering statutes. The Bradleys also contend that the Government failed

to make out a case under the statute requiring the reporting of foreign financial

transactions. Tellechea argues that the Government failed to prove that he

conspired to defraud Florida Medicaid or to pay physicians kickbacks for having

blood-derivative prescriptions filled at the Bradleys’ closed-door pharmacies.

We turn first, in subpart A, to the Bradleys’ and Bio-Med’s arguments, then,

in subpart B, to Tellechea’s. Finally, in subpart C, we consider Bradley III and

Tellechea’s argument that the district court erred in denying their motions for

judgment of acquittal on venue grounds.

A.

In assessing the Bradleys’ and Bio-Med’s challenges to the sufficiency of

the evidence, we focus on the arguments they have not advanced in their briefs in

addition to those they have made. For example, they do not dispute that Bio-Med

was recycling blood-derivatives as the Government contended. Rather, they argue

that their recycling scheme did not operate to defraud Florida Medicaid, Medi-Cal,

or GHPP—that is, neither those programs nor the patients to whom the recycled

medications were administered were the victims of a fraud they perpetrated. If

they are correct, none of their convictions can stand, as each is predicated on the

23

alleged fraud perpetrated against Florida Medicaid and Medi-Cal or GHPP.

1.

Bradley III was convicted on Counts 1 through 54 and 83 through 284,

Bradley, Jr., on Counts 1, 54, 285 and 286, Bio-Med on Counts 1 through 53.47 To

make their point that the evidence failed to show fraud, these defendants direct

their argument to Count 1, which influences—if not directly controls—our

decision on the remaining counts.

Count 1 was brought under the Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. § 1962©).48 Count 1 alleged that the

Bradleys, Bio-Med, Tellechea, and others constituted an “enterprise” engaged in

interstate commerce and that they conducted that enterprise “through a pattern of

47

The offenses charged in those counts are set out in note 4, supra.

48

Section 1962©) states,

It shall be unlawful for any person employed by or associated with any enterprise

engaged in, or the activities of which affect, interstate or foreign commerce, to

conduct or participate, directly or indirectly, in the conduct of such enterprise’s

affairs through a pattern of racketeering activity or collection of unlawful debt.

18 U.S.C. § 1962©).

An “enterprise includes any individual, partnership, corporation, association, or other

legal entity, and any . . . group of individuals associated in fact although not a legal entity.” 18

U.S.C. § 1961.

“Racketeering activity” includes “any act which is indictable under . . . [18 U.S.C.

§§] 1341 (relating to mail fraud), . . . 1343 (relating to wire fraud), . . . 1956 (relating to the

laundering of monetary instruments), 2314 and 2315 (relating to interstate transportation of

stolen property, . . . [or] any act which is indictable under the Currency and Foreign Transactions

Reporting Act, [31 U.S.C. §§ 5311–30 and 31 C.F.R. Part 301].” 18 U.S.C. § 1961(1).

24

racketeering activity.”49 All of the acts that made up the pattern of racketeering

alleged in Count 1, i.e., the acts the Bradleys and Bio-Med were found to have

committed in carrying out the recycling scheme, were based on fraud—mail

49

To be found guilty of conducting an enterprise’s affairs through a “pattern of

racketeering activity,” the defendant must have committed, or aided and abetted the commission

of, at least two acts of racketeering activity . . . the last of which occurred within ten years . . .

after the commission of a prior act of racketeering activity.” 18 U.S.C. § 1961(5). Specifically,

the Government must prove two components: the predicate acts [of racketeering]

must relate to the enterprise charged, which we have referred to as the

“relationship component,” . . . and the predicate acts must actually form a pattern,

i.e., relate to each other and have continuity . . . which we have called the “pattern

component.”

United States v. Browne, 505 F.3d 1229, 1257–58 (11th Cir. 2007) (internal quotation and

citation omitted). Regarding

the pattern component, the predicate acts must relate to each other (as

distinguished from the relationship component), meaning that the predicate acts

must have the same or similar purposes, results, participants, victims, or methods

of commission, or otherwise [be] interrelated by distinguishing characteristics and

. . . not [be] isolated events.

Id. at 1258 (internal quotations omitted) (emphasis in original); see also H.J., Inc. v. Nw. Bell

Tele. Co., 492 U.S. 229, 241, 109 S. Ct. 2893, 2902, 106 L. Ed. 2d 195 (1989) (“What a . . .

prosecutor must prove is continuity of racketeering activity, or its threat, simpliciter.” (emphasis

in original)). The pattern component, requiring that the predicate acts relate to each other and

have continuity, may be established by demonstrating a series of related predicate acts

committed over a specific period of time, i.e., a “closed-ended theory,” or by demonstrating that

certain related predicate acts are either likely to be repeated in the future or are part of an entity’s

regular way of doing business, i.e., an “open-ended theory.” Browne, 505 F.3d at 1259–60.

“[B]ecause any combination of two factually sufficient predicate acts can support a

finding of continuity, that finding—and thus the substantive RICO conviction—may stand ‘if the

evidence is sufficient with respect to any [two] of the acts charged.’” Id. at 1261 (quoting

Griffin v. United States, 502 U.S. 46, 56–57, 112 S. Ct. 466, 473, 116 L. Ed. 2d 371 (1991)).

25

fraud;50 wire fraud;51 transportation of blood-derivatives acquired by fraud;52

laundering money obtained by mail fraud and wire fraud;53 failure to disclose an

interest in a financial account in a foreign country while engaged in mail fraud,

wire fraud, and laundering money obtained by mail or wire fraud.54 The Bradleys

and Bio-Med do not dispute that they and the others constituted, and operated as,

an “enterprise.” Nor do they dispute that the mailings, wire communications,

transportation of blood-derivatives, monetary transactions, and failure to disclose

an interest in a foreign financial account took place as alleged in the superceding

indictment. They dispute, instead, that the jury had evidence of fraud sufficient to

50

Bradley III and Bio-Med were found to have committed mail fraud involving Med-Cal

and/or GHPP in racketeering acts 65 through 82, and mail fraud involving a diversion scheme

targeting the “Group Purchasing Organization” in racketeering acts 116 through 122 and 126

through 131. Bio-Med committed mail fraud involving a diversion scheme targeting “NABI” in

racketeering acts 255 and 256.

51

Bradley III and Bio-Med committed wire fraud involving Florida Medicaid in

racketeering acts 1 through 29, and wire fraud involving Medi-Cal and/or GHPP in racketeering

acts 65 through 82.

52

In racketeering acts 30 through 34 and 83 through 87, Bradley III and Bio-Med

transported IGIV (acts 30 through 34) and Recombinate (acts 83 through 87) in interstate

commerce, in violation of 18 U.S.C. § 2314, “in the execution or concealment of a scheme or

artifice to defraud.” Bio-Med committed this § 2314 offense, involving blood-derivatives, in

racketeering acts 185 through 202.

53

Bradley, Jr., engaged in money laundering involving mail and/or wire fraud in

racketeering acts 223 through 245.

54

Bradley III was found to have failed to disclose an interest in a financial account in a

foreign country while engaging in a pattern of illegal conduct, i.e., mail fraud, wire fraud, and

money laundering, in racketeering acts 251 and 253 (although he was only charged with acts 251

and 252). Bradley, Jr., committed the same offense in acts 253 and 254.

26

convict them on Count 1.

Bradley III and Bio-Med make the same argument with respect to their

convictions on Counts 2 through 53. Count 2 alleged a RICO conspiracy, 18

U.S.C. § 1962(d), to commit the Count 1 offense. Count 3 alleged that Bradley III

and Bio-Med conspired to defraud Florida Medicaid by wire. Counts 4 through 32

alleged that they defrauded Florida Medicaid by wire. Count 33 alleged that they

conspired to defraud Medi-Cal and GHPP by wire. Counts 34 through 53 alleged

that they defrauded Medi-Cal and GHPP by wire.

The Bradleys again make the same argument with respect to the remaining

counts of conviction. They were convicted on Count 54, which alleged that they

conspired to launder money obtained by mail fraud and/or wire fraud. Bradley III

was convicted on Counts 83 through 283 for laundering money obtained by mail

fraud and/or wire fraud. Bradley III was convicted on Count 284 and Bradley, Jr.,

was convicted on Counts 285 and 286 for failing to disclose an interest in a

financial account in a foreign country while engaging in a pattern of illegal

conduct, i.e., mail fraud, wire fraud, and money laundering.

Because the outcome of the Bradleys’ and Bio-Med’s sufficiency-of-the-

evidence arguments turn on the absence of fraud, we start with what constitutes

mail fraud and wire fraud, and how those offenses serve as elements of money

27

laundering, transportation of stolen goods, and failure to disclose foreign financial

transactions.

a.

Mail55 and wire56 fraud are analytically identical save for the method of

execution. “Both offenses require that a person (1) intentionally participates in a

scheme or artifice to defraud another of money or property, and (2) uses or

‘causes’ the use of the mails or wires for the purpose of executing the scheme or

artifice.” United States v. Ward, 486 F.3d 1212, 1222 (11th Cir. 2007) (citing

United States v. Hewes, 729 F.2d 1302, 1320 (11th Cir. 1984) (mail fraud), and

United States v. Hasson, 333 F.3d 1264, 1270 (11th Cir. 2003) (wire fraud)). The

55

In relevant part, the mail fraud statute, 18 U.S.C. § 1341, provides that:

Whoever, having devised or intending to devise any scheme or artifice to defraud,

or for obtaining money or property by means of false or fraudulent pretenses,

representations, or promises, . . . places in any post office or authorized

depository for mail matter, any matter or thing whatever to be sent or delivered by

the Postal Service, or deposits or causes to be deposited any matter or thing

whatever to be sent or delivered by any private or commercial interstate carrier,

or takes or receives therefrom, any such matter or thing, or knowingly causes to

be delivered by mail or such carrier according to the direction thereon, . . . shall

be fined under this title or imprisoned not more than 20 years, or both.

56

In relevant part, the wire fraud statute, 18 U.S.C. § 1343, provides that:

Whoever, having devised or intending to devise any scheme or artifice to defraud,

or for obtaining money or property by means of false or fraudulent pretenses,

representations, or promises, transmits or causes to be transmitted by means of

wire, radio, or television communication in interstate or foreign commerce, any

writings, signs, signals, pictures, or sounds for the purpose of executing such

scheme or artifice, shall be fined under this title or imprisoned not more than 20

years, or both.

28

first element, a scheme or artifice to defraud, “requires proof of a material

misrepresentation, or the omission or concealment of a material fact calculated to

deceive another out of money or property.”57 United States v. Maxwell, 579 F.3d

1282, 1299 (11th Cir. 2009) (emphasis added). “A misrepresentation is material if

it has a natural tendency to influence, or is capable of influencing, the decision

maker to whom it is addressed.” Id. (internal quotations and alteration omitted).

The second element is self-explanatory.

[A] person “causes” the mails to be used within the meaning of 18

U.S.C. § 1341, or the wires to be used within the meaning of 18

U.S.C. § 1343, when he acts “with knowledge that the use of the mails

[or wires] will follow in the ordinary course of business, or where

such use can reasonably be foreseen, even though not actually

intended.”

Ward, 486 F.3d at 1222 (quoting Pereira v. United States, 347 U.S. 1, 8–9, 74 S.

Ct. 358, 363, 98 L. Ed. 435 (1954) (alteration in original).

Proof of intent to defraud is necessary to support convictions for mail and

57

At the time of the trial in this case, Eleventh Circuit precedent dictated that a scheme

to defraud necessitated the making of a misrepresentation reasonably calculated to deceive

persons of ordinary prudence and comprehension. United States v. Brown, 79 F.3d 1550,

1558–60 (11th Cir. 1996) (reversing a mail fraud conviction where the deception was easily

discovered from “readily available external sources”). We have since overruled Brown and held

that the mail fraud statute—and hence the wire fraud statute—prohibits “any scheme or artifice

to defraud,” no matter how fanciful. United States v. Svete, 556 F.3d 1157, 1169 (11th Cir.

2009) (en banc) (emphasis in original). Because the schemes at issue in this appeal meet both

standards, the change in law from one standard to another does not affect these defendants.

29

wire fraud. United States v. Jennings, 599 F.3d 1241, 1250 (11th Cir. 2010).58 “A

jury may infer an intent to defraud from the defendant’s conduct.” Maxwell, 579

F.3d at 1301. “Evidence that a defendant personally profited from a fraud may

provide circumstantial evidence of an intent to participate in that fraud.” United

States v. Naranjo, 634 F.3d 1198, 1207 (11th Cir. 2011) (citing United States v.

Navarro-Ordas, 770 F.2d 959, 966–67 (11th Cir. 1985)).

Significantly, the mail and wire fraud statutes “punish unexecuted as well as

executed schemes.” Pelletier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir. 1991). It

is therefore unnecessary that the victim actually relies on the misrepresentation or

omission; proof of intent to defraud is sufficient. See id. All that is necessary is

that the scheme be reasonably calculated to deceive; the intent element of the crime

is shown by the existence of the scheme. United States v. Bruce, 488 F.2d 1224,

1229 (5th Cir. 1973).59

58

In Pelletier v. Zweifel, 921 F.2d 1465 (11th Cir. 1991), we described the required

mens rea element thusly:

[T]he defendant must have had a conscious knowing intent to defraud. This mens

rea element dictates, in practice, that the perpetrator of the scheme anticipate

reliance. A defendant cannot possibly intend to deceive someone if he does not

believe that his intended “victim” will act on his deception. Mail and wire fraud,

just like common law fraud, thus entail an intention to induce the victim to act or

to refrain from action in reliance upon the misrepresentation.

Id. at 1499 (internal quotation marks, citations, and alterations omitted) (emphasis in original).

59

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this

court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to

30

The mail and wire fraud statutes, 18 U.S.C. §§ 1341, 1343, do not define

what constitutes a scheme to defraud. In the absence of a statutory definition, the

courts have provided a judicial framework for conceptualizing a fraudulent

scheme. See United States v. Pendergraft, 297 F.3d 1198, 1208 (11th Cir. 2002)

(“[T]he meaning of ‘scheme to defraud’ has been judicially defined.” (citing

United States v. Lemire, 720 F.2d 1327, 1335 (D.C. Cir. 1983)).

That framework defies measure by a technical standard, Bruce, 448 F.2d at

1229, but gives us a handy measure to articulate what constitutes a “scheme to

defraud,” Pendergraft, 297 F.3d at 1208. Pursuant to the judicial definition, a

“scheme to defraud” is broader than the common law conception of fraud. Id.

(citing Hammerschmidt v. United States, 265 U.S. 182, 188, 44 S. Ct. 511, 512, 68

L. Ed. 968 (1924)). Our definition “is a reflection of moral uprightness, of

fundamental honesty, fair play and right dealing in the general and business life of

members of society.” Gregory v. United States, 253 F.2d 104, 109 (5th Cir. 1958).

But despite its breadth, the judicial definition does not lack teeth; “the word still

signifies ‘the deprivation of something of value by trick, deceit, chicane, or

overreaching.’” Pendergraft, 297 F.3d at 1208–09 (quoting Hammerschmidt, 265

U.S. at 188, 44 S. Ct. at 512). To gauge a defendant’s intent to commit a

October 1, 1981.

31

fraudulent scheme, then, we must determine whether the defendant attempted to

obtain, by deceptive means, something to which he was not entitled.

b.

In the present case, proof of an intent to engage in mail and wire fraud was

necessary for the Government to obtain convictions on the counts alleging

transportation of stolen goods in interstate commerce, 18 U.S.C. § 2314,60 and

money laundering, 18 U.S.C. §§ 1956(a)(1)(A)(i)61 (concerning so-called

60

In relevant part, the transportation of stolen goods statute, 18 U.S.C. § 2314, provides

that:

Whoever, having devised or intending to devise any scheme or artifice to defraud,

or for obtaining money or property by means of false or fraudulent pretenses,

representations, or promises, transports or causes to be transported, or induces

any person or persons to travel in, or to be transported in interstate or foreign

commerce in the execution or concealment of a scheme or artifice to defraud that

person or those persons of money or property having a value of $5,000 or more

...

....

Shall be fined under this title or imprisoned not more than ten years, or both.

61

In relevant part, the promotional money laundering statute, 18 U.S.C.

§ 1956(a)(1)(A)(i), provides that:

(a)

(1) Whoever, knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity, conducts or

attempts to conduct such a financial transaction which in fact involves the

proceeds of specified unlawful activity—

(A)

(i) with the intent to promote the carrying on of specified

unlawful activity . . .

....

....

shall be sentenced to a fine of not more than $500,000 or twice the value

of the property involved in the transaction, whichever is greater, or

32

“promotional money laundering”) and 1956(a)(1)(B)(i)62 (concerning so-called

“concealment money laundering”). Proof of mail or wire fraud was necessary to

obtain a conviction for the transportation of stolen goods in interstate commerce

because that offense, as charged in this case, requires that the transported goods be

moved in connection with a scheme or artifice to defraud. 18 U.S.C. § 2314.

Proof of mail or wire fraud was also necessary to obtain a conviction for money

imprisonment for not more than twenty years, or both. For purposes of

this paragraph, a financial transaction shall be considered to be one

involving the proceeds of specified unlawful activity if it is part of a set of

parallel or dependent transactions, any one of which involves the proceeds

of specified unlawful activity, and all of which are part of a single plan or

arrangement.

62

In relevant part, the concealment money laundering statute, 18 U.S.C.

§ 1956(a)(1)(B)(i), provides that:

(a)

(1) Whoever, knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity, conducts or

attempts to conduct such a financial transaction which in fact involves the

proceeds of specified unlawful activity—

....

(B) knowing that the transaction is designed in whole or in part—

(i) to conceal or disguise the nature, the location, the

source, the ownership, or the control of the proceeds of

specified unlawful activity . . .

....

shall be sentenced to a fine of not more than $500,000 or twice the value

of the property involved in the transaction, whichever is greater, or

imprisonment for not more than twenty years, or both. For purposes of

this paragraph, a financial transaction shall be considered to be one

involving the proceeds of specified unlawful activity if it is part of a set of

parallel or dependent transactions, any one of which involves the proceeds

of specified unlawful activity, and all of which are part of a single plan or

arrangement.

33

laundering because that offense—whether promotional money laundering or

concealment money laundering—prohibits financial transactions involving the

proceeds of “unlawful activity,” a defined term that includes both mail and wire

fraud, 18 U.S.C. §§ 1956(c)(7)(A) and 1961(1)(B).63

c.

As charged, proof of mail or wire fraud was likewise necessary to sustain the

convictions for failure to disclose a foreign financial interest, 31 U.S.C. §§ 5314,

5322(b). Section 5314 charges the United States Secretary of the Treasury with

requiring United States taxpayers to keep records pertaining to financial

transactions with foreign agencies, 31 U.S.C. § 5314(a), and with prescribing

regulations pertaining to the keeping of those records, 31 U.S.C. § 5314(b), and

their disclosure, 31 U.S.C. § 5314©). Section 5322(b) imposes criminal penalties

on any individual who willfully violates the Secretary’s regulations “while [also]

violating another law of the United States or as part of a pattern of illegal activity

involving more than $100,000 in a 12-month period.” At trial, the Government

argued that the Bradleys had failed to disclose their interests in a foreign financial

institution in violation of regulations prescribed pursuant to § 5314 while also

63

The money laundering statute’s definition of “unlawful activity,” 18 U.S.C.

§ 1956(c)(7)(A), expressly incorporates the RICO statute’s list of predicate acts, 18 U.S.C.

§ 1961(1)(B), which includes both mail and wire fraud.

34

committing mail and wire fraud and as a part of a pattern of illegal, racketeering

activity, which, as stated supra, consisted solely of mail and wire fraud and other

acts predicated on a scheme to defraud. Without proof of mail or wire fraud, then,

the Government could not prove its case, as alleged in the indictment, under

§ 5322(b).

2.

The evidence against the Bradleys and Bio-Med was sufficient to prove that

they engaged in a scheme to defraud Florida Medicaid, Medi-Cal, and GHPP. As

such, we affirm the jury’s verdicts and the district court’s denial of the defendants’

motions for judgments of acquittal on both schemes.

In sum, we hold that a reasonable jury could have found the following.

Florida Medicaid, Medi-Cal, and GHPP never intended to reimburse for recycled

blood-derivatives that had been previously dispensed. For that reason, the

programs had policies that indicated as much to any reasonable observer.

The Bradleys and Bio-Med knew of these policies. Despite knowing that the

programs would not knowingly pay for recycled blood-derivatives—and that

Medicaid patients would eventually receive the lion’s share of the IVIG and

Recombinate sold by Bio-Med—the Bradleys and Bio-Med, with the help of

several compatriots, purchased recycled medications at discount prices from

35

complicit physicians and patients with the intent to resell them for a significant

profit. To ensure that they were not found out, these defendants went to great

lengths to disguise the fact that those drugs had been recycled. And once in

possession of blood-derivatives they knew to be recycled, the defendants

intentionally sold them off, at full wholesale prices, to pharmacies—including

Infustat and Seratech, which dealt almost exclusively with Medicaid patients—that

billed the Medicaid programs as if the blood-derivatives had never been recycled.

The Bradleys’ and Bio-Med’s practice thus induced Florida Medicaid, Medi-Cal,

and GHPP to reimburse for drugs, often for a second time, when the programs

otherwise would have refused.

The evidence presented at trial is far too expansive to catalogue in any detail,

so the following is but a brief and incomplete summary of the relevant testimony.

We begin with the evidence concerning the Florida Medicaid Scheme and the

evidence regarding Medi-Cal and GHPP. We then confront the defendants’ legal

arguments as to the sufficiency of that evidence.

a.

Jerry Wells, the Bureau Chief of Pharmacy Services for Florida Medicaid,

testified that the program’s “policies”64 require medication to have been dispensed

64

We refer in this opinion to certain “policies” of the Medicaid programs. These

policies can be, in some cases, express—written and promulgated—and, in others,

36

to a patient before the dispensing pharmacy is reimbursed. Wells explained that

Florida Medicaid does allow pharmacies to deliver blood-derivatives directly to a

doctor’s office or to the patient for home-infusion, but that the patient must receive

the medication before the pharmacy can submit a reimbursement request—in other

words, that the patient should be at the doctor’s office when the pharmacy delivers

the medication. If the patient is not at the doctor’s office to receive the blood-

derivative, the pharmacy is supposed to put the medication back in stock and

“reverse” the charges to Florida Medicaid—that is, to credit Florida Medicaid with

the value of the blood-derivatives. According to Wells, Medicaid would not

knowingly pay for a blood-derivative that had been “dropped-off” at a doctor’s

office without some showing that the medication had actually been given to the

patient for whom it had been prescribed.65

What we take, and what the jury presumably took, from Wells’s testimony is

that once a medication is marked as dispensed and reimbursement is paid for it,

Medicaid considers the medication administered to the patient for whom it was

implied—known to those in the health-care industry—but are nonetheless clearly established.

As such, we do not distinguish between promulgated and non-promulgated policies.

It is for this reason that we disagree with Bio-Med’s contention that it was permitted to

resell recycled blood-derivatives in the absence of an express written regulation forbidding it. If

Bio-Med knew that its conduct would cause the Medicaid programs to reimburse for medication

they did not intend to cover, that was enough.

65

This is an example of so-called “drop-off dispensing.” Wells testified that “drop-off

dispensing” is not permitted pursuant to Medicaid rules.

37

dispensed and would not reimburse for it a second time. It was therefore

reasonable for the jury to draw from Wells’s testimony that Florida Medicaid

intended to pay for blood-derivatives once, and only once, and that causing Florida

Medicaid to reimburse twice for medications that had been marked as dispensed,

and for which reimbursement had already been paid, was nothing other than

fraudulent. Wells himself stated as much, if not in those exact words:

Q. Does Florida Medicaid pay for the same drug twice?

A. Only in fraudulent situations.

Q. Unknowingly?

A. Unknowingly.

Q. Does Florida Medicaid pay for a drug that has never been

administered to a patient?

A. Only unknowingly.

It was also reasonable for the jury to find, based on the testimony of several

witnesses, that the Bradleys, Bio-Med employees, and related associates for whom

the Bradleys and Bio-Med were responsible knew Florida Medicaid would not,

absent misdirection, reimburse a second time for a blood-derivative that had not

actually been administered to the patient the first time around. Several of the

participants in the Florida Medicaid scheme, namely Dr. Cadigan and his nurse,

testified that they were told by Tellechea that he would purchase IVIG from them

if they stockpiled the medication whenever a patient did not appear. Most, but not

all, of those patients, Tellechea knew, were covered by Florida Medicaid. As a

38

prerequisite to stockpiling those blood-derivatives, Dr. Cadigan and his nurse

forged patient signatures on documents provided to them by Tellechea, and which

Tellechea required them to have completed. From that testimony, the jury could

have inferred that Tellechea knew Florida Medicaid intended that all dispensed

medication be used by patients and not recycled for resale; otherwise, why would

Florida Medicaid require patient signatures, and why would Tellechea have Dr.

Cadigan’s associate forge those signatures?

Once it found that Tellechea knew that Florida Medicaid would not

reimburse a second time for blood-derivatives the program considered used by

patients, a reasonable jury could have taken the next step and inferred that the

Bradleys, and thus Bio-Med, knew as well. First, the evidence established that

Bio-Med was a leader in the prescription pharmaceutical industry. Bradley III, as

CEO of Bio-Med, consequently had reason to know how Medicaid reimbursed the

pharmacies he supplied. Moreover, Bradley III and Tellechea were business

partners, and Tellechea sold Bio-Med the IVIG he collected from Dr. Cadigan. It

seems reasonable to believe that, even if he did not know of the Medicaid policy on

his own, Bradley III would have learned of it through Tellechea.

The defendants’ attempts to forge and obscure the drugs’ pedigree provides

additional circumstantial evidence that Bradley III and Bio-Med knew that Florida

39

Medicaid would not pay for recycled drugs. Witness testimony established that

Bradley III and his associates worked out a means of obscuring the pedigree

associated with the IVIG they obtained from Dr. Cadigan and others. For example,

Bossey testified that he received IVIG from Tellechea and others that was

supposed to be “administered to patients but . . . never received [by] them. They

were [instead] given to me.”66 Worried that inspectors might ask him where he

obtained the medication, Bossey approached Bradley III about his concerns.

Bradley III responded by having Bossey invoice IVIG to Intermed in Savannah

instead of directly to Bio-Med in Miami; Bossey understood that Bradley III

structured the transactions in this way because inspectors from Georgia would not

be able to trace the pedigree back to Bossey once Bio-Med purchased the IVIG

from Intermed.

Bossey also testified to Bradley III’s desire to directly mislead Florida

pharmaceutical inspectors. According to Bossey, Bradley III asked him to halve

the amount of IVIG listed on the invoices and double the price; this, said Bossey,

made the transaction look legitimate, as the abnormally low price might have

drawn the inspector’s “attention.” Moreover, Bossey testified that Bradley III told

66

Bossey testified that he and Bradley III shared a joke about the source of the IVIG.

Bossey told the jury that he invoiced the medication to “BM,” which stood for both Bio-Med

and, in the joke, “black market.” Larry Pinkoff, another prosecution witness, testified that

Bradley III was aware that the blood-derivatives Bio-Med was buying were “street” drugs.

40

him to be on the lookout for control numbers written with invisible ink that would

allow inspectors to trace IVIG originating at Bio-Med back to Bio-Med.

Marty Bradley warned me, he said, “listen, if you get any boxes of

IVIG from your sources, make sure that you look at the bottom of the

box to see with a black light or if you -- shift the box in light, you’ll

be able to see the indentations from the pen that there are control

numbers. If there are control numbers on the product, that means that

I cannot take them back, so be careful.”

Bossey’s testimony was largely corroborated by Castro67 and Pascual,68 both

of whom testified that Bradley III instructed them to structure transactions of

recycled medication to confuse the pedigree.69 Also, Susan Bryan, a former Bio-

Med employee, testified that the IVIG Bio-Med obtained was known as “ASS”

67

Castro testified that he recruited doctors who primarily served patients covered by

Florida Medicaid. He also testified that specific IVIG sold by Bio-Med to Infustat was

repurchased by Bio-Med after it was supposedly distributed to a patient; he personally sold IVIG

matching that description to Bradley III. Finally, Castro testified that Florida Medicaid, to his

knowledge, actually paid twice for the same IVIG.

68

In relevant part, Pascual testified that she obtained IVIG from an individual who sold

the medication out of the bed of his truck without pedigree and who never provided her an

account of where he had obtained the IVIG. As related supra, Bradley III instructed her to

falsely indicate that pedigree had been established as to that IVIG. A reasonable jury could have

found that Bradley III’s instruction, repeated by his secretary, demonstrated his knowledge that

he was not permitted to resell Pascual’s recycled IVIG to pharmacies pursuant to Florida

Medicaid policy.

69

Unlike Bio-Med, we do not find it legally significant that the pedigree requirements

were not being enforced at the time Bradley III instructed Pascual and possibly Bossey to

include statements on invoices they submitted to Bio-Med implying pedigree had been

established. Whether or not the Bradleys’ failure to maintain acceptable pedigree papers under

the PDMA, 21 U.S.C. § 353(e)(1)(A), was grounds for punitive regulatory action, the false

invoices still constitute evidence that Bradley III and Bio-Med knew of Florida Medicaid’s

policies and were attempting to subvert them.

41

product because “it was [Bradley III’s] ASS if he got caught selling it.”

Moreover, the Government presented evidence from which a reasonable jury

could have inferred that Bradley, Jr., was aware that some portion of Bio-Med

products was obtained by, in his words, “fraud.” Smith, one of the Apex Partners,

testified that, at a meeting in California between the Apex Partners and the

Bradleys to discuss payment methods—the Apex Partners had trouble cashing

“that many checks”—Bradley, Jr., “kind of yelled out, you guys are talking about

insurance fraud, you’re all going to end up in the big house and this has to stop

right now.” The jury could have inferred from this statement that Bradley, Jr.,

understood that Bio-Med’s recycling business violated Medicaid rules.

Finally, the evidence was sufficient to show that the Bradleys, Bio-Med, and

their associates knew the IVIG they had received, or a portion of that IVIG, would

again be distributed to Medicaid patients and billed to the state program. Bio-Med

sold IVIG to its related pharmacies, Infustat and Seratech, both of which Bio-Med

knew primarily catered to Florida Medicaid patients. And, even when Bio-Med

sold to outside pharmacies, the nature of the blood-derivative business made it

inevitable that Bio-Med’s recycled IVIG would be dispensed to patients covered

by the program.

From all this, a reasonable jury could have understood the evidence to prove

42

that the Bradleys and Bio-Med knew Florida Medicaid would not have reimbursed

for IVIG sold by Bio-Med had it known where Bio-Med had obtained the

medication. Thus, it was reasonable to believe that, by failing to inform the

program of the IVIG’s source and/or by concealing that source, these defendants

knowingly caused Florida Medicaid to reimburse for medication the program did

not intend to cover.70

b.

The evidence was likewise sufficient as to Medi-Cal and GHPP. Douglas

Hillbloom, a former employee in the Department of Health Services, testified that

“[t]he [California] Board of Pharmacy would not allow medication once [it] had

been dispensed to a patient to be returned.” This was, he said, because “[o]nce it

leaves the control of the pharmacy, it was not under the control of the pharmacy or

a Board of Pharmacy regulation regarding storage.” Thus, at that time in

California, once blood-derivatives such as Recombinate had been dispensed to a

patient, Medi-Cal and GHPP assumed they would be used—if unused, the

medication was to be thrown out or disposed of, but “technically” should be

70

We also do not find it legally significant that the Government failed to prove that Bio-

Med’s recycled IVIG was dangerous to patients or otherwise less effective than traditionally

obtained IVIG. If Florida Medicaid did not intend to reimburse for the recycled blood-

derivatives sold by Bio-Med, it does not matter if those blood-derivatives were otherwise

perfectly safe.

43

destroyed.71 Hillbloom went on to distinguish the recycling of dispensed

Recombinate from the legitimate market in prescription medication “secondary

sales,”72 and to explain that Medi-Cal never intended to reimburse for recycled

Recombinate.

Following Hilbloom was Harry Fry, an employee with GHPP, who testified

that, much like Medi-Cal, GHPP would not “allow payment of drugs for use by

anyone else but the person to whom it was dispensed.” In other words, just like

Medi-Cal, once blood-derivatives like Recombinate had been dispensed to a

patient, GHPP assumed they had either been used or destroyed by that patient.

Knowledge of Medi-Cal’s and GHPP’s policies was widespread. Other

industry representatives testified that it was well known that the California

programs did not expect to reimburse for previously dispensed medication. David

Roy, the Director of Client Services at American Home Care Federation, a

71

The defendants contend that no such written policy existed. Again, as we previously

stated, the existence of a promulgated policy is immaterial so long as the parties involved knew

that Medi-Cal and GHPP considered dispensed medication to have been used and would not

reimburse for that medication a second time. There is sufficient evidence in the record before us

that such a policy existed and that the Bradleys and Bio-Med were aware of that policy.

72

The secondary sales market includes, but is not limited to, swaps and sales of blood-

derivatives amongst wholesalers, repackagers, and pharmacies. See supra notes 14 (defining

recycling) and 25 (explaining the use of pedigree papers to trace medication from manufacturer

through end user).

44

specialty “home-infusion pharmacy,”73 explained that he believed it was “against

the law” to recycle dispensed medication and stated that he would not have

dispensed recycled medication had he been informed of its status. And Lawrence

Guiheen, President of Biopharmaceuticals for Baxter Healthcare, a pharmaceutical

manufacturer, similarly testified that neither his company, manufacturers generally,

or pharmacies were allowed under California pharmacy regulations to accept

returned medications once they had been dispensed to patients.

From this testimony, a reasonable jury could have found that Medi-Cal and

GHPP had policies against reimbursing for recycled medication. Furthermore, the

evidence showed that Bio-Med, through Bradley III, knew of that policy and

ignored it. Bradley III was an experienced professional in the prescription

pharmaceutical business and presumably had the same information about Medi-Cal

and GHPP’s policies as the industry insiders who testified at trial. Intermed’s

invoices also suggested this knowledge; a sentence on the invoices stated that all

sales were final—that is, that blood-derivatives could not be returned.

Furthermore, Tamiyasu and Williams, two of the Apex partners, both of whom

were involved in the California Medicaid Scheme, each testified that Bradley III

was aware that Medi-Cal and GHPP would not allow recycled Recombinate to be

73

A home-infusion pharmacy is a closed door pharmacy that provides its patients with

access to medical personnel and equipment if necessary to complete the infusion process.

45

resold if the programs ever became aware that the medication had already been

dispensed to a patient.

A reasonable jury could also have found that Medi-Cal and GHPP actually

paid a second time for medications Bio-Med purchased from patients. First, there

was testimony that, on at least one occasion, a vial of Recombinate was

repurchased from a patient and eventually dispensed a second time with the

original patient’s label still attached.74 Finally, Lawrence Guiheen testified that

Medi-Cal and his company, Baxter Healthcare, discovered that Medi-Cal had

reimbursed for more Recombinate than Baxter had produced, something Guiheen

74

Williams testified to this point, but could not be sure that the Recombinate was

purchased by Bio-Med. His testimony, in relevant part, was as follows:

Q. When you were buying product back from the patient, did the label stay

on it?

A. One time it did.

Q. Describe that.

A. Well, someone had sold factor back to me. And I had passed it on to

either Jon [Tamiyasu] or Kelly [Smith] with the label still attached. And I

passed it on to Jon and Kelly and they had apparently counted [the vial of

Recombinate] with a number of other vials.

I neglected to pull -- the customer neglected to pull the label off. I

neglected to pull the label off. Furthermore, my partners forgot to pull the

label off. And I don’t know if it went to Bio-Med and came back. At any

rate it came back, and ultimately got back to the pharmacy with that same

label.

Q. Was that product that was billed to Medicaid?

A. Yes, I believe so.

Even though Williams could not positively state that the Recombinate was purchased by Bio-

Med, given his testimony it would have been reasonable for the jury to find that Bio-Med had

caused Medi-Cal or GHPP, or both, to reimburse twice for the same medication at some time or

another.

46

originally attributed to an accounting mistake, but later understood to have been

caused by the product “being resold” or a similar “illegal” act.

It was therefore reasonable for this jury to believe that, just like Florida

Medicaid, Medi-Cal and GHPP reimbursed for blood-derivatives a second time, in

violation of their policies, and that the Bradleys, Bio-Med, and their associates

caused or participated in the offending scheme. That the Bradleys and Bio-Med

actually consummated their schemes only strengthens the inference that the

defendants intended to participate in a fraud. See Maxwell, 579 F.3d at 1301

(permitting the jury to infer an intent to defraud when a defendant completes the

fraudulent act). And the disproportionate profits the Bradleys and Bio-Med

realized from their schemes again reinforces the jury verdict. See Naranjo, 634

F.3d at 1208 (permitting the jury to infer an intent to defraud based on the amount

of profit realized from a scheme). Accordingly, under the mail and wire fraud

statutes’ definition of a scheme or artifice to defraud, the defendants’ conduct in

both cases was fraudulent.

c.

The Bradleys and Bio-Med advance two arguments against this conclusion.

First, as discussed supra, they contend that the programs had no policies against

reimbursing for recycled drugs, or, alternatively, that they were unaware of those

47

policies. The defendants claim that the trial testimony provided by Florida

Medicaid, Medi-Cal, and GHPP representatives, and the testimony of industry

experts, was merely a post-hoc attempt imply that such policies had existed. In

the absence of an applicable policy, the defendants conclude they could not have

defrauded the programs because the programs would have paid for the drugs even

if they knew the drugs were recycled.

This argument has two flaws, one factual and one theoretical. Factually, the

trial testimony established that such policies did exist and that the defendants knew

of them. Indeed, if the defendants thought that the programs would pay for

recycled drugs, why did they go to such great lengths to conceal the fact that the

medications had been recycled?75

Theoretically, even if the policies had of existed, the defendants still

committed fraud; the defendants’ belief that the programs would not pay for

recycled drugs—as evidenced by their pains to conceal their nature—is sufficient

under the mail and wire fraud statutes. These statutes “punish unexecuted, as well

as executed, schemes.” Pelletier, 921 F.2d at 1498. Here, the evidence supports

75

In this regard, it would have been reasonable for the jury to disbelieve Bradley III’s

testimony that he never knew of any policies and that he never intended for the Medicaid

programs to pay for recycled IVIG and Recombinate contrary to those policies. See United

States v. Mateos, 623 F.3d 1350, 1362 (11th Cir. 2010) (“A defendant who chooses to testify

runs the risk that the jury will disbelieve her testimony and ‘runs the risk that if disbelieved the

jury might conclude the opposite of [her] testimony is true.’” (quoting United States v. Brown,

53 F.3d 312, 314 (11th Cir. 1995))).

48

the jury’s finding that the defendants intended to take part in a scheme that had, as

its purpose, the goal of causing Medicaid programs, by way of misinformation, to

reimburse for medications for which they believed the programs did not intend to

reimburse. For our purposes, that is enough. See, e.g., Kemp v. Am. Tel. & Tel.

Co., 393 F.3d 1354, 1359–60 (11th Cir. 2004) (recognizing a duty to inform

customers of certain information where failure to do so would cause the customer

to be misled) (citing, inter alia, United States v. Townley, 665 F.2d 579, 585 (5th

Cir. 1982) (noting that “under the mail fraud statute, it is just as unlawful to speak

‘half truths’ or to omit to state facts necessary to make the statements made, in

light of the circumstances under which they were made, not misleading”)); see also

Hasson, 333 F.3d at 1270–71 (“A scheme to defraud requires proof of material

misrepresentations, or the omission or concealment of material facts, . . .,

reasonably calculated to deceive . . . .” (citing Neder v. United States, 527 U.S. 1,

25, 119 S. Ct. 1827, 1841, 144 L. Ed. 2d 35 (1999))); Langford v. Rite Aid of Ala.,

Inc., 231 F.3d 1308, 1312 (11th Cir. 2000) (“Intent to defraud need not be shown

through active misrepresentation—material omissions can be fraudulent if they are

intended to create a false impression.”).

As for their second argument, the Bradleys and Bio-Med argue that, even

assuming that their conduct was fraudulent, United States v. Medina, 485 F.3d

49

1291 (11th Cir. 2007), required the Government to precisely trace the recycled

prescriptions to show that Florida Medicaid, Medi-Cal, and GHPP paid twice for at

least one specific dose of recycled drugs. This argument fails as well.

In Medina, we reversed one defendant’s conviction under the health care

fraud statute, 18 U.S.C. § 1347,76 because the Government failed to prove that the

defendants engaged in transactions with the necessary intent to defraud. At trial,

the Government’s sole evidence proving this point consisted of testimony by a law

enforcement officer regarding the defendant’s “general practice” of billing

Medicare for traditionally manufactured medications while providing instead “a

‘compounded’ medication . . . mixed in the pharmacy.” Medina, 485 F.3d at 1299.

That officer did not, however, point to any specific transactions in which the

defendants actually sold compounded drugs, but billed for traditionally

manufactured medication. This omission was fatal to the Government’s case. We

explained that, to provide sufficient evidence of health care fraud, the Government

76

Title 18, section 1347, of the United States Code provides that:

Whoever knowingly and willfully executes, or attempts to execute, a scheme or

artifice—

(1) to defraud any health care benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or

promises, any of the money or property owned by, or under the custody or

control of, any health care benefit program,

in connection with the delivery of or payment for health care benefits, items, or

services, shall be fined under this title or imprisoned not more than 10 years, or

both.

50

had to “present some evidence that at least one specific patient received

compounded medication when [the pharmacy] billed Medicare for manufactured

medication.” Id. at 1299–1300 (emphasis added).

The Bradleys and Bio-Med stretch Medina’s holding one step further.

Combining Medina’s holding with case law interpreting a qui tam provision in the

False Claims Act (the “FCA”), 31 U.S.C. § 3729,77 they appear to argue that the

77

The Bradleys and Bio-Med quote language from several cases interpreting the FCA

for the proposition that the Government had to show exactly which medications Medicaid

purchased twice in order to prove fraud. That is incorrect.

The FCA provision they cite, 31 U.S.C. § 3729, creates a civil cause of action for any

individual who can show that another presented, or caused to be presented, a false claim to the

United States. We have held that the purpose of that provision is “to encourage private

individuals who are aware of fraud being perpetrated against the government to bring such

information forward.” Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1236 n.1 (11th Cir. 1999).

For example, in United States ex rel. Clausen v. Lab. Corp. of America, Inc., 290 F.3d 1301

(11th Cir. 2002), we interpreted the FCA to require a private plaintiff to allege that at least one

specific claim presented to the government for payment was either fraudulent or relied on a

fraudulent record or statement:

The False Claims Act does not create liability merely for a health care provider’s

disregard of Government regulations or improper internal policies unless, as a

result of such acts, the provider knowingly asks the Government to pay amounts it

does not owe. Without the presentment of such a claim, while the practices of an

entity that provides services to the Government may be unwise or improper, there

is simply no actionable damage to the public fisc as required under the False

Claims Act. The submission of a claim is thus not, as . . . argued, a “ministerial

act,” but the sine qua non of a False Claims Act violation.

290 F.3d at 1311 (citations omitted) (emphasis in original). Because the relator failed to allege

with specificity which claims were fraudulent, we affirmed the dismissal of the FCA action. Id.

at 1311–12. Put another way, we held in Clausen that the making of a claim for reimbursement

is the operative act which violates the FCA, and that, in order to survive a motion to dismiss, a

complaint must provide more than conclusory allegations that a false claim—one based on a

false representation—was made. See id. at 1311.

Construing Clausen, as well as persuasive authority from our sister circuits, the Bradleys

and Bio-Med correctly note that successful prosecution of an FCA claim requires proof that an

51

Government must prove that the same dose of the relevant medication was actually

paid for twice. This would require, for example, the Government to trace the

specific path of a specific vial of IVIG or Recombinate, including: (1) evidence of

the first transaction, when a doctor fills a prescription for a patient who never

receives or uses the drug; (2) proof of reimbursement by a Medicaid program;

(3) proof that Bio-Med obtained the unused medication from the doctor or the

patient, which requires the Government to trace the medication from its source

through any intermediary stops at MedPoint, Intermed, or Apex; (4) evidence that

Bio-Med resold that specific blood-derivative to another pharmacy; and (5) proof

that a Medicaid program reimbursed for the medication a second time.

In making this second argument, the defendants go too far. Medina merely

requires the Government to present some evidence of a fraudulent scheme; it holds

that conclusory statements regarding “general practices”—as opposed to evidence

that the defendants conducted transactions that involved recycled medications—do

individual claim was false when filed. And the Bradleys and Bio-Med are correct that the FCA

is an anti-fraud statute. However, they go too far when, comparing this case to those construing

the FCA, they claim that the Government is bound to present evidence that individual

medications were recycled.

While the FCA is an anti-fraud statute, its focus is, as the title suggests, on the actual

submission of a claim. The mail and wire fraud statutes, on the other hand, focus their attention

on the use of a misrepresentation to obtain money that is not owed. It is for that reason that

when we interpret the FCA, evidence of a false representation is not sufficient; the plaintiff must

produce evidence that the false representation was included as part of a specific claim and thus

evidence of the claim itself. See, e.g., Clausen, 290 F.3d 1311–12. In a fraud case, proof of

intent to defraud will suffice. The FCA cases, therefore, are simply not on point.

52

not suffice. As summarized above, the Government’s evidence in this case went

far beyond conclusory statements; the Government presented evidence to the jury

that the Bradleys and Bio-Med made payments for unused drugs, laundered those

drugs to make it appear as if they were new, and then resold those drugs in a

manner that made it certain that the programs would pay for recycled drugs.

3.

To summarize, a reasonable jury could find beyond a reasonable doubt that

the recycling schemes in which the Bradleys and Bio-Med engaged were

fraudulent. Having reached that finding, the jury had an evidentiary basis for the

verdicts it returned against the Bradleys and Bio-Med.78

B.

Bradley III, Bio-Med, and Tellechea were convicted on Count 3 of a duel-

object conspiracy, in violation of 18 U.S.C. § 371. The conspiracy’s first object

was the scheme to defraud Florida Medicaid by wire, by causing the program to

78

To be more specific, we find sufficient evidence to sustain Bradley III’s Count 1

conviction on racketeering acts 1 through 87, 185 through 202, 251, and 253. See Browne, 505

F.3d at 1261 (holding that only two qualifying predicate acts are necessary to sustain a RICO

conviction). We do not reach the sufficiency of the evidence as to the remaining acts found by

the jury, all of which relate to diversion schemes. We also find sufficient evidence to support the

jury’s verdict on Counts 2 through 284. See supra part II.A.1.

Likewise, we find sufficient evidence to sustain Bradley, Jr.’s Count 1 conviction on all

the acts found by the jury, his Count 54 conviction, and his Counts 285 and 286 convictions.

We further find sufficient evidence to sustain Bio-Med’s Count 1 conviction on

racketeering acts 1 through 87 and 185 through 202. We also uphold Bio-Med’s convictions on

Counts 2 through 53.

53

pay more than once for a vial of recycled, unused IVIG, in violation of 18 U.S.C. §

1343. The second object was to pay illegal kickbacks to physicians for sending

their IVIG prescriptions to Bradley-owned closed-door pharmacies, in violation of

42 U.S.C. § 1320a-7b(b)(2)(B).79 The jury’s verdict on Count 3 does not indicate

which object(s) the defendants committed. The evidence was obviously sufficient

to convict Bradley III and Bio-Med for conspiring to accomplish both objects.

Whether the evidence was sufficient to convict Tellechea of the first object,

however, is problematic, for the jury found him not guilty on Counts 1 and 4

through 32, which charged him (along with Bradley III, Bio-Med, and others) with

committing the wire fraud described in that object. We nonetheless affirm

Tellechea’s Count 3 conviction because the evidence established not only that he

conspired to pay the alleged kickbacks, but that he actually paid them. United

79

The anti-kickback provisions of 42 U.S.C. § 1302a-7b(b)(2)(B) read as follows:

b) Illegal remunerations

....

(2) Whoever knowingly and willfully offers or pays any remuneration

(including any kickback, bribe, or rebate) directly or indirectly, overtly or

covertly, in cash or in kind to any person to induce such person—

....

(B) to purchase, lease, order, or arrange for or recommend purchasing,

leasing, or ordering any good, facility, service, or item for which payment

may be made in whole or in part under a Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be fined not

more than $25,000 or imprisoned for not more than five years, or both.

42 U.S.C. § 1320a-7b(b)(2)(B).

54

States v. Hernandez, 141 F.3d 1042, 1051 (11th Cir. 1998) (citing Griffin v. United

States, 502 U.S. 46, 58, 112 S.Ct. 466, 473–74, 116 L.Ed.2d 371 (1991), and

United States v. Ross, 131 F.3d 970, 983 (11th Cir.1997) (“A guilty verdict in a

multi-object conspiracy will be upheld if the evidence is sufficient to support a

conviction of any of the alleged objects.”)).

C.

After the jury returned its verdicts, Bradley III moved the district court for a

judgment of acquittal on Count 284, and Tellechea moved the court for a judgment

of acquittal on Count 3. Both motions argued that venue had been improperly laid

in the Southern District of Georgia. The district court disagreed and denied their

motions. Bradley III and Tellechea now challenge the court’s rulings.80

Those rulings must stand if the Government established venue by a

preponderance of the evidence. United States v. Breitweiser, 357 F.3d 1249, 1253

80

The Government contends that Tellechea waived his venue challenge because it was

untimely. We disagree. Tellechea moved the district court pretrial to transfer his case to the

Southern District of Florida on the ground that venue in the Southern District of Georgia was

improper. The court denied his motion, concluding that the superceding indictment alleged facts

sufficient to establish venue in the Southern District of Georgia and that venue there was not

unduly burdensome. At the same time, the court gave him leave to move to dismiss the case

based on venue at the close of the Government’s case. Tellechea did so unsuccessfully. Then,

after the jury returned its verdicts, he moved the court for judgment of acquittal on Count 3 on

the venue ground. The motion to dismiss at the close of the Government’s case and the motion

for judgment of acquittal were timely. See United States v. Daniels, 5 F.3d 495, 496 (11th Cir.

1993) (“[W]hen an indictment contains a proper allegation of venue so that a defendant has no

notice of a defect in venue until the Government rests its case, the objection is timely if made at

the close of the evidence.” (internal quotation marks and citation removed)).

55

(11th Cir. 2004). We determine de novo whether the Government met this

standard, “viewing the evidence in the light most favorable to the government and

making all reasonable inferences and credibility choices in favor of the jury

verdict.” United States v. Stickle, 454 F.3d 1265, 1270 (11th Cir. 2006).

1.

Count 284 alleged that Bradley III failed to disclose an interest in a foreign

financial account while committing mail fraud, wire fraud, and money laundering,

in violation of 31 U.S.C. §§ 5314 and 5322(b). Section 5314 authorizes the

Secretary of the Treasury to require a taxpayer to keep records and file reports

“when th[at] resident, citizen, or person makes a transaction or maintains a relation

for any person with a foreign financial institution.” 31 U.S.C. § 5314(a). The

Secretary has exercised that authority by requiring all persons subject to the

jurisdiction of the United States to disclose whether they have “an interest in, or a

signature or other authority over, a bank, securities or other financial account in a

foreign country.” 31 C.F.R. § 103.24(a). If a person owns such an account, he is

obligated by 31 C.F.R. § 103.24 to file Form 90-22.1 with “the Commission of the

Internal Revenue.” That form instructs the person that the filing may be

accomplished “by mailing this report to the Department of the Treasury . . . or by

hand-carrying it to any local office of the Internal Revenue Service for forwarding

56

to the Department of the Treasury” in Detroit, Michigan.

Section 5322(b) prescribes criminal penalties for any person who “willfully”

violates § 5314 by failing to disclose a financial interest in a foreign financial

institution while also “violating another law of the United States or as part of a

pattern of any illegal activity involving more than $100,000 in a 12-month period.”

31 U.S.C. § 5322(b). Count 284 alleged that, during calendar year 1999, Bradley

III had such a financial interest in a bank account that had an aggregate value of

over $2,000,000 and that he willfully failed to report this while committing mail

fraud, wire fraud, and money laundering as part of a pattern of illegal activity.

Venue, in a criminal case, is constitutionally proper only in the district

where the crime was committed. U.S. Const. art. III, § 2, cl. 3; U.S. Const. amend

VI. The Federal Rules of Criminal Procedure echo that sentiment: “Unless a

statute or these rules permit otherwise, the government must prosecute an offense

in a district where the offense was committed.” Fed. R. Crim. P. 18. In the venue

context, the failure to perform a legally required act occurs where the act is

supposed to be performed. United States v. DiJames, 731 F.2d 758, 762 (11th Cir.

1984) (citing Johnston v. United States, 351 U.S. 215, 220, 76 S. Ct. 739, 742, 100

L. Ed. 1097 (1956)). Failure to file a mandatory report is therefore committed in

the district or districts where the report is to be filed. See, e.g., United States v.

57

Quimby, 636 F.2d 86, 90 (5th Cir. 1981); see also United States v. Clines, 958

F.2d 578, 583 (4th Cir. 1992) (citing United States v. Garman, 748 F.2d 218,

220–21 (4th Cir. 1984)).

Because there is no dispute that Bradley III had a qualifying interest in a

foreign financial institution under 31 U.S.C. § 5314, he was required under the

applicable regulation to disclose that interest on his tax return and file a form with

the IRS. The form in question, Form 90-22.1, could be filed either by mailing it to

the IRS in Detroit, Michigan, or by hand-delivering it to any local IRS office.

Bradley III claims that, because he never delivered the form as required, venue was

properly laid only in Detroit (the Eastern District of Michigan) or his district of

residence (the Southern District of Florida). Relying upon the Fourth Circuit’s

reasoning in Clines, the Government answers that the option of filing Form 90-

22.1 in “any local office” was sufficient to establish venue in the Southern District

of Georgia.

The Government’s reliance on Clines is not misplaced. There, facing

seemingly identical circumstances, the Fourth Circuit determined that venue was

properly laid in the district where Clines’s tax returns were prepared. Clines, 958

F.2d at 583. The court’s opinion was, as here, based on the “any local office”

provision of Form 90-22.1. Id. at 584. Dismissing Clines’s worries that its ruling

58

would create unlimited venue possibilities, the court noted that it saw “no evidence

that the Government engaged in forum shopping,” id. at 583 n.3, and reasoned that

its “conclusion is consistent with the principal concern the courts have advanced as

underlying the constitutional venue provisions,” id. at 583. As such, the Fourth

Circuit came to the conclusion that “venue in [the District of Maryland] did not

impermissibly offend Clines’s rights guaranteed by the Sixth Amendment.” Id. at

584.

Likewise, the possibility that Bradley III would have filed the form in the

Southern District of Georgia, the district where his returns were prepared and home

to a local IRS office,81 was sufficient to establish venue in that district. Form 90-

22.1 permits filing in “any local office,” meaning that there is no absolute

requirement that it be filed in any particular place; the sole requirement is that it be

filed somewhere. Thus, for purposes of venue, the form is “required” to be filed in

any and every district that houses a local IRS office. So long as its choice does not

create a constitutional hardship,82 the Government may choose, from among those

81

We take judicial notice that Savannah is home to a local IRS office. See Fed. R. Evid.

201(b) (permitting courts to take judicial notice of facts known within the court’s jurisdiction

and which are easily identifiable).

82

Presumably, the Government may choose any district that would not be unfair to the

defendant or create a hardship. See United States v. Clines, 958 F.2d 578, 583 (4th Cir. 1992)

(citing United States v. Cores, 356 U.S. 405, 407, 78 S. Ct. 875, 877, 2 L. Ed. 2d 873 (1958)).

Other considerations might include the location of witnesses and evidence. See Cores, 356 U.S.

at 407, 78 S. Ct. at 877. As Bradley III cannot establish that venue was improper in the Southern

59

districts, one where it is most convenient to pursue an indictment. See id.

Here, the district court determined that the district was not inconvenient to

Bradley III. We agree and further find that the Southern District of Georgia did not

create a constitutional hardship. As such, we hold that venue was properly laid in

the Southern District of Georgia and that the district court did not err in denying

Bradley III’s motion for a judgment of acquittal.

Finally, as a conceptual matter, Bradley III’s interpretation is far too

restrictive. He would have this court decide that, as a constitutional matter, a

defendant could dictate venue by failing to file the very form he was required to

submit. The implication of Bradley III’s position is that he could defeat

jurisdicition in any district other than the two he has previously named by

proclaiming he never would have submitted the form there. That simply cannot be

the case.

District of Georgia as to Counts 1 through 283, he cannot establish that venue on Count 284 was

constitutionally inconvenient.

Moreover, in its order denying the defendants’ pretrial joint motion to transfer venue to

the Southern District of Florida, the district court analyzed the factors set out in Platt v.

Minnesota Mining Co., 376 U.S. 240, 84 S. Ct. 769, 11 L. Ed. 2d 674 (1964), and held that

“[b]oth judicial and litigant economies” favored “venue here in the Southern District of

Georgia.” As for Bradley III, the court noted that he had “significant family ties to Savannah”

and that he could easily operate his business there. The court tempered those findings with the

realization that Bradley III lived and worked in Miami and that his wife had recently been

diagnosed with breast cancer. Nevertheless, the court satisfied itself that the Government’s

witnesses and the defendants’ lawyer could easily reach the city, that all of the Government’s

documentary evidence was stored nearby, and that the court’s docket was sufficiently clear to

handle such a “mega-trial.”

60

2.

Tellechea argues that venue for Count 3 was improperly laid in the Southern

District of Geogia. Count 3 listed two sets of overt acts the conspirators allegedly

committed in furtherance of the two objects of the conspiracy: (1) the execution of

a scheme to defraud Florida Medicaid; and (2) the payment of illegal kickbacks to

Florida physicians for having their prescriptions for IVIG filled at Bradley-owned

closed-door pharmacies. The first set of overt acts involved twenty-nine wire

transfers from Intermed in Savannah to MedPoint in Miami. The second set

included a number of cash payments Tellechea and other conspirators made to

physicians in Miami in exchange for prescription referrals. While Tellechea

concedes that venue in the Southern District of Georgia was likely appropriate as

to the first object of the conspiracy, he contends it was not as to the second object.

And since he construes the jury’s verdict on Count 3 to rest on the latter object,

which was to be accomplished in Miami, he believes the verdict cannot stand.

As we stated above, venue is constitutionally and statutorily proper only in

the district where the offense has been committed. U.S. Const. art. III, § 2, cl. 3;

U.S. Const. amend VI; Fed. R. Crim. P. 18. But in an action involving a

conspiracy, as with all continuing offenses under 18 U.S.C. § 3237(a),83 the offense

83

Pursuant to 18 U.S.C. § 3237(a), “any offense against the United States begun in one

district and completed in another, or committed in more than one district, may be inquired of and

61

has been committed in any district where any overt act was performed in

furtherance of the conspiracy. United States v. Matthews, 168 F.3d 1234, 1246

(11th Cir. 1999). “Evidence of venue need not be direct; when circumstantial

evidence as a whole reasonably supports the inference that the crime was

committed in the trial district, the government’s burden is satisfied.” United States

v. Rivamonte, 666 F.2d 515, 517 (11th Cir. 1982) (citations omitted).

Tellechea’s venue challenge is twofold. First, he argues that, because the

jury was instructed that it could find a defendant guilty of the Count 3 conspiracy if

it found that he had conspired to commit either of the conspiracy’s two objects,84

the Government had to prove venue in the Southern District of Georgia as to both.

The Government failed to do this with respect to the first object, he claims, because

the jury acquitted him, in Counts 1 and 4 through 32, of participating in a wire

fraud scheme to defraud Florida Medicaid.

prosecuted in any district in which such was begun, continued, or completed.”

84

The exact text of the relevant jury instruction was as follows:

Remember that, as to Count 3, it is not necessary for the Government to prove

that the Defendants under consideration willfully conspired to commit both of

those substantive offenses. It would be sufficient if the Government proves,

beyond a reasonable doubt, that the charged Defendants willfully conspired with

someone to commit one of those offenses; but, in that event, in order to return a

verdict of guilty, you must unanimously agree upon which of the two offenses the

charged Defendants conspired to commit.

Tellechea reasons that, because the jury instruction treats the two listed objects as “substantive

offenses,” the Constitution demands that venue be established as to both.

62

Extrapolating from the jury’s verdicts on those related counts, Tellechea

postulates that the jury could not have convicted him on Count 3 for conspiring to

commit wire fraud;85 rather, it had to have found him guilty of conspiring to pay

the doctors kickbacks. And since none of the acts in furtherance of the kickback

arrangement was committed in the Southern District of Georgia, Tellechea submits

that the Government failed to establish venue there. He supports this proposition

by pointing out that the only evidence relevant to venue in the Southern District of

Georgia and introduced by the Government at trial was a contested showing that

the monies illegally paid to the Florida physicians originated in Savannah.86

Suggesting that United States v. Cabrales, 524 U.S. 1, 8, 118 S. Ct. 1772, 1776,

141 L. Ed. 2d 1 (1998), definitively establishes that “the source of the money used

to pay the kickbacks is irrelevant to the question of whether the Constitution’s

venue requirements are met,” Tellechea argues that venue was lacking and that the

district court was bound to grant his motion for judgment of acquittal.

Even assuming that Tellechea is correct that the Government was required to

establish venue for both objects of the conspiracy and that the jury found him

85

It is not clear that such was the jury’s intent. The jury’s determination that the

Government failed to carry its burden as to those substantive charges does not foreclose the

possibility that it did carry its burden as to the conspiracy count.

86

Tellechea does not dispute that the wire transfers originated in Savannah, only that the

funds were utilized to pay kickbacks to Florida doctors.

63

guilty only of conspiring to pay illegal kickbacks, the district court properly denied

Tellechea’s motion for a judgment of acquittal. Tellechea was convicted for his

involvement as a conspirator in the recycling scheme. He was therefore

vicariously responsible for the acts of any co-conspirator taken in furtherance of

that scheme. And in this instance, one of Tellechea’s co-conspirators, Bradley III,

used Intermed, a corporation headquartered in the Southern District of Georgia,

and Intermed’s bank accounts, also located in that district, as the source of funds

necessary to complete the kickback object. Bradley III’s fraudulent use of

Intermed’s bank accounts to transfer funds to Tellechea for eventual payment as

kickbacks to the Miami doctors—acts for which Bradley III was convicted at

trial—thus constituted twenty-nine overt acts in furtherance of the conspiracy.87

See United States v. Lewis, 676 F.2d 508, 511 (11th Cir. 1982) (“[W]here a

criminal conspirator commits an act in one district which is intended to further a

conspiracy by virtue of its effect in another district, the act has been committed in

both districts and venue is properly laid in either.”); accord United States v.

Strickland, 493 F.2d 182, 187 (5th Cir. 1974) (finding venue proper in the district

87

For this reason, it is immaterial that Tellechea was acquitted of the substantive wire

fraud counts. To satisfy the venue requirement, an overt act may be committed by any

conspirator, anyone who aids or abets a conspirator, or anyone a conspirator causes to act. See,

e.g., United States v. Royer, 549 F.3d 886, 896 (2d Cir. 2008) (finding overt act includes “not

just acts by co-conspirators, but also acts that the conspirators caused others to take that

materially furthered the ends of the conspiracy”).

64

in which a phone call originated as well as in the district where it was received).

Because those acts took place, in relevant part, in the Southern District of

Georgia, the district court had venue over both objects of Count 3. We therefore

uphold the district court’s denial of Tellechea’s motion for a judgment of acquittal.

III.

The defendants ask that we reverse their convictions and remand the case for

a new trial due to errors the district court purportedly made in rulings pretrial and

at trial. In subpart A, we consider the pretrial rulings, in subpart B, those made

during the trial.

A.

The most crucial ruling the district court made pretrial was the denial of the

defendants’ motions to suppress evidence seized by federal agents from Bio-Med’s

headquarters and server farm, Tellelchea’s private office, and Bradley, Jr.’s

residence. Evidence seized during these searches played a significant role in the

Government’s case in chief; without it, the Government may have been unable to

prove many of the allegations of the superceding indictment, especially the money

laundering counts and corresponding acts of racketeering. With the exception of

Bio-Med’s computer servers, the searches were conducted pursuant to search

warrants issued by federal magistrate judges. We address the merits of the district

65

court’s ruling after recounting the events that led to the issuance of the search

warrants and how they were executed.

1.

The investigation of the Bradleys’ recycling scheme began in 2001 after

agents of the IRS, the Food and Drug Administration (“FDA”), and the

Immigration and Customs Enforcement (“ICE”) obtained evidence implicating

Larry Pinkoff and the Golden Isles Pharmacy (“Golden Isles”) in a recycling

scheme similar to the Bradleys’. In exchange for leniency, Pinkoff agreed to

cooperate in an ever-widening drug probe of the recycling and diversion of

pharmaceuticals, including blood-derivatives. He told investigators that he had

sold Bradley III “street” pharmaceuticals in 1996, and that, when Bradley III was

unable to pay for them, Bradley, Jr., intervened to pay Bradley III’s debt. Pinkoff

then allowed the agents to record three telephone conversations with the Bradleys

in which the men discussed the particulars of the Bradleys’ business.

Based on Pinkoff’s representations and Bradley III’s recorded statements,

the agents asked Pinkoff to arrange a meeting with the Bradleys (the agents would

be operating undercover) to discuss the potential sale of a pharmacy the Bradleys’

owned in Puerto Rico.88 Pinkoff did so and introduced the Bradleys to the agents.

88

The Bradleys owned several pharmacies in Puerto Rico, all incorporated under Puerto

Rican law. Those pharmacies included, inter alia, Dena, Inc., Delta Med, Inc., and Delta Med

66

Statements made during several meetings held in 2002 convinced the agents that

the Bradleys were potentially engaged in illegal activity.

After obtaining additional information about the Bradleys’ recycling

scheme, the agents applied for warrants to search eight locations. On December

11, 2002, they swore out the necessary affidavits before magistrate judges in four

federal districts. The applications were substantially identical,89 each containing an

affidavit and multiple attachments. Attached to each application was an identical

list of “Items to be seized” designated as “Attachment B”90 and

Trading Corp. After Pinkoff expressed interest in founding his own internet pharmacy in Puerto

Rico, Bradley III indicated that Pinkoff might be able to use Delta Med, which was at that time a

dormant corporation, to do so.

89

In this opinion, we primarily refer to the affidavit executed by Special Agent Pamela

Chambers of the FDA filed in support of the application for a warrant to search Bio-Med offices

in Miami. Other affidavits were executed by Special Agent Michael Palmer of the IRS and

Special Agent Karl Mueller of ICE.

90

In pertinent part, “Attachment B” sought:

a. Personal and business records relating to the purchase and sale of

prescription pharmaceuticals for the period of 1997 through the present

involving MARTIN J. BRADLEY, JR., MARTIN J. BRADLEY, III,

JOSE A. TRESPALACIOS, SARA FARLEY GRIFFIN, BIO MED

PLUS, INC., SUPER DISCOUNT DRUGS, DENA, INC., INTERMED

PHARMACEUTICAL, INC., GOLDEN ISLES PHARMACEUTICALS,

INC., INTERMED PHARMACEUTICAL SUPPLY CORP., BEL

ASSOCIATES, INC., CARIBE SPECIALTY PHARMACY, DELTA

MED TRADING, CARETECH, INTERMED OF PUERTO RICO (a.k.a.

INTERMED P.R. SERVICES CORP [sic]), INTERMED GROUP,

INTERMED OF SAVANNAH, SERATECH, PRECISION

HEATHCARE INC [sic], DAMAR INVESTMENTS, INC., DELTA

ENTITIES, INC., THE MARTIN J. BRADLEY FOUNDATION, INC.,

JERMAR INVESTMENTS, INC., BRITT AIR, INC., and any other

unknown corporations and businesses controlled by the BRADLEYs, both

67

domestic and foreign, between individuals, businesses, purchasing groups,

organizations, and/or corporate entities. These records shall include, but

not be limited to books, records, receipts, notes, ledgers, letters of credit,

correspondence, memoranda, mailing envelopes, facsimiles, purchase

orders, purchase invoices, purchase agreements/contracts, sales invoices,

drug distribution records, drug pedigrees, prescription drug inventory

records, licenses, applications, agreements, memberships, shipping

records to include, bills of lading, shipping receipts, and any other related

papers.

....

d. All records of any financial/business transactions involving all individuals

and businesses listed in item (a) for the [sic] 1997 through present. These

records shall include but not be limited to regular banking records - such

as checks, bank statements, deposit tickets, saving or loan account records,

wire transfer records, both incoming and outgoing, or any other records

relating to investments or loans, assets, or other financial transactions with

individuals, partnerships or corporations including notes, memoranda, and

agreements evidencing such transactions, copies of cashier’s checks,

money orders, or documents used to effect any such type transaction.

....

g. Records relating to the operation of personal and corporate bank accounts

including checking, savings, trust or brokerage accounts for all individuals

and businesses listed in item (a) for 1997 through the present.

....

i. Other tangible items evidencing the obtaining, secreting, transfer and/or

concealment of assets for all individuals and businesses listed in item (a)

for 1997 through the present.

....

l. Computers, computer disks, and tapes used to store data. This information

includes computer hard drives, diskettes, tapes, or any other media

capable of storing information in a form readable by a computer. This

also includes all copies that may be maintained as an archive or back up. .

..

m. The agents searching for such information are authorized to search any

desktop computer, network computer, and/or portable computer in the

premises and to copy all above-described information stored on such

computer. The search of such computer will be limited to seeking

information with respect to specifically named individuals and other

information that fits within the above-described description of the items to

be seized.

n. In the event that the agents cannot, for technical reasons, obtain access to

68

naming four individuals and twenty-two known entities from which the

Government sought personal and business records. The Bradleys were specifically

named, as were Bio-Med, Intermed, Golden Isles, IPS, and Seratech. All eight

warrant applications were approved.

The next day, federal agents simultaneously executed the search warrants in

a coordinated effort. Agents raided all eight locations, including Bio-Med’s

official headquarters and warehouse in Miami, the offices of Infustat and Seratech,

Intermed’s headquarters in Savannah, Dena’s office in San Juan, and the

residencies of both Bradleys. At Bio-Med’s headquarters, 6855 Southwest 81st

Street, the agents seized all business records pertaining to “the purchase or sale of

prescription pharmaceuticals” between 1997 and 2002 involving the Bradleys and

known or unknown corporations, records of “any financial/business transactions,”

and “all receipts and invoices for expenditures made” between the named

individuals and entities during that time period. These seizures amounted to

virtually all of Bio-Med’s records over that time. Agents also seized computer

hard drives at the headquarters location.

any subject computer or cannot search for or copy information contained

on the computer, the agents are then authorized to seize such computer

and remove it to a laboratory setting for a sufficient period of time to

obtain access to, search for, and recover files and records described in

paragraphs (a) through (k) above.

Search Warrant Attach. B, at ¶¶ a, d, g, i, l–n.

69

When the agents inquired about computer servers they expected to find at

6855 Southwest 81st Street, a Bio-Med employee directed them across the street to

6860 Southwest 81st Street; the servers had recently been moved off-site. The

agents went to the off-site location and entered the premises through an unlocked

door. Recognizing they lacked a warrant for the computer servers at that location,

and fearing that data contained on the servers might be purposefully or

inadvertently destroyed before a warrant could be obtained, one agent asked the

Bio-Med employee running the facility to shut down the computers. That

employee complied. Agents then obtained a warrant for the servers. They imaged

the servers that night, either removing entire hard drives or copying individual files

from the computers.

Simultaneous searches took place at the offices of Infustat and Seratech at

6356 Manor Lane in Miami, and at Bradley, Jr.’s residence at 616 Herb River

Drive in Savannah. At Bradley, Jr.’s residence, agents seized blank checks on the

IPS bank account at Barclays Bank in Nassau, Bahama, a hand-written list of assets

relating to a “Nassau Trust,”91 and documents memorializing a loan made from that

trust to Interland Investments, Inc.,92 a real estate investment corporation owned by

91

Bradley, Jr., had earlier remarked, during a tape recorded conversation with Pinkoff,

that he had established a family trust in the Bahamas to hide certain assets from the IRS.

92

Recall that Interland was indicted and charged by the Government. After the close of

all the evidence, Interland moved for a judgment of acquittal and the district court granted its

70

the Bradleys.

At 6356 Manor Lane,93 agents discovered a building with four separate

“suites,” two of which were occupied by Seratech. One of the two remaining

suites housed Intermed P.R. Services Corp., d/b/a Intermed of Puerto Rico

(“Intermed P.R.”)94, and the other was shared by Infustat and a fourth corporation,

Red-X, which served as the purchasing arm for Seratech, Intermed P.R., and

Infustat. Although each of the suites had an exterior doorway, all but one were

connected via internal hallways. Tellechea maintained an office in the Intermed

P.R. suite. While searching Seratech, agents obtained a sketch of the building

which labeled Tellechea’s office “private.” Agents also seized documents from the

Seratech suite indicating that Intermed P.R. did the accounting for all four

corporations. Ignoring Seratech’s operations manager, who protested that the rest

of the building was occupied by companies not named in the search warrant, agents

then searched the remainder of the premises, excepting the area dedicated to Red-

X, as it was cordoned off by an internal doorway. When the on-site operations

manager failed to open Tellechea’s locked office—the manager informed agents

motion. See supra note 6.

93

At the time the search warrants were obtained, investigators were unaware that the

building at 6356 Manor Lane housed an entity other than Seratech.

94

Intermed P.R. is also separate and distinct from Intermed and IPS.

71

that only Tellechea had a key to the office—the agents had a locksmith provide

them access. Inside, agents found a computer and an external hard drive, which

they seized.95

a.

The Bradleys and Bio-Med both moved the district court to suppress the

search of Bio-Med’s headquarters on the ground that the search was conducted

pursuant to a warrant that was overbroad and lacking in particularity, in that it

allowed the agents to seize, effectively, all personal and business files relating to

Bio-Med’s wholesale business from 1997 through 2002. The district court denied

95

Collecting and analyzing the great mass of documents seized in the above searches

took three years. IRS agents were asked to analyze data taken from approximately 103

computers containing more than a terabyte of data, the equivalent of more than 250 million

pages of documents. In order to more easily analyze the data—to cull relevant information from

irrelevant information—the agents requested more advanced equipment, which they received in

September 2003. That month, the agents made a preliminary pass over the imaged data,

separating out potentially relevant documents from those that were certainly irrelevant. The

documents were first distributed in batches to case agents in 2003. Later, in the fall of 2005, the

agents were able to create a searchable database of documentary evidence, which paved the way

for the indictment in this case.

The Bradleys and Bio-Med claim that resulting searches of Bio-Med servers for data

were unconstitutional because they occurred almost three years after the servers were originally

seized. We find nothing in the record that would lead us to believe that the search procedure was

unreasonably delayed, for any reason. See, e.g., United States v. Gerber, 994 F.2d 1556,

1558–59 (11th Cir. 1993) (approving a delayed search, even after expiration of the search

warrant, because officers acted reasonably). We find no error in the district court’s rejection of

this claim.

Furthermore, we reject outright the Bradleys’ and Bio-Med’s claim that the searches

were unconstitutional because the agents failed to obtain pre-approval from the district court of a

search protocol before conducting the searches. Cf. United States v. Khanani, 502 F.3d 1281,

1290–91 (11th Cir. 2007) (finding a wide-sweeping, keyword-based computer search reasonable

where the defendants failed to “cite any binding case law that would lead us to conclude the

procedures used in this case infringed defendants’ Fourth Amendment rights”).

72

their motions under the “pervasive fraud doctrine,” see, e.g., United States v.

Martinelli, 454 F.3d 1300, 1307–08 (11th Cir. 2006) (permitting government

seizure of “all of the business records of an enterprise engaged in a ‘pervasive

scheme to defraud’” (quoting United States v. Sawyer, 799 F.2d 1494, 1508 (11th

Cir. 1986))), holding that the pervasiveness of the defendants’ fraudulent schemes

justified a warrant as broad as the one the magistrate judge issued. We review the

district court’s ruling de novo. See United States v. Dahlman, 13 F.3d 1391, 1394

(10th Cir. 1993); 5 Wayne R. LaFave, Search and Seizure § 11.7©) (3d ed. 1996);

cf. United States v. Travers, 233 F.3d 1327, 1329 (11th Cir. 2000).

The Fourth Amendment requires that all warrants “particularly describ[e] the

place to be searched, and the . . . things to be seized.” U.S. Const. amend IV. The

particularity requirement prevents “general, exploratory rummaging in a person’s

belongings,” Coolidge v. New Hampshire, 403 U.S. 443, 467, 91 S. Ct. 2022,

2038, 29 L. Ed. 2d 564 (1971), but “elaborate specificity is unnecessary,” United

States v. Betancourt, 734 F.2d 750, 754 (11th Cir. 1984). “The description is

considered sufficiently particular when it enables the searcher to reasonably

ascertain and identify the things authorized to be seized.” Id. at 754–55 (citation

and internal quotation marks omitted). This requirement does not necessitate

technical perfection; instead, it is applied with “a practical margin of flexibility.”

73

United States v. Wuagneux, 683 F.2d 1343, 1349 (11th Cir. 1982).

We have long recognized that a criminal investigation requires investigators

to piece together evidence, often circumstantial and from multiple sources, to

prove a defendant’s guilt. Sawyer, 799 F.2d at 1508. The need for evidence is

greater in complex fraud cases and justifies a more flexible reading of the

particularity requirement. Travers, 233 F.3d at 1330. Thus, in Sawyer, we upheld

a warrant authorizing a seizure of all of the business records of an enterprise where

evidence of fraudulent conduct obtained from twenty-five of the enterprise’s

customers “made it probable that [the company] used identical deceptive and

misleading sales techniques with other investors.” 799 F.2d at 1508. This

“pervasive fraud” doctrine, as it has come to be known, accordingly demands that

we uphold an “all records” search warrant where the affidavit supporting it

demonstrates a “pattern of illegal conduct” that is likely to extend beyond the

conduct already in evidence and infect the rest of the company’s business. See,

e.g., id. at 1508–09.

The Bradleys’ and Bio-Med’s position is that the “pervasive fraud” doctrine

is inapplicable unless the Government alleges that the business in question is

engaged almost exclusively in fraudulent business practices. As there is no dispute

that the fraud complained of here represented only a small fraction of Bio-Med’s

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legitimate business, the Bradleys and Bio-Med claim that the district court

erroneously denied their motion to suppress and allowed the seized evidence to be

introduced in evidence at trial.

But this is too narrow a reading of the “pervasive fraud” doctrine. The

district court correctly read Sawyer and Martinelli to hold that “pervasive fraud”

does not refer to the percentage of a defendant’s business that is fraudulent. In

other words, the doctrine is not concerned with how deeply the fraud runs. Rather,

the “pervasive fraud” doctrine addresses the extent to which fraud has permeated

the scope of the defendant’s business. That is, the doctrine is concerned with the

breadth of the alleged fraud—whether evidence of fraud is likely to be found in

records related to a wide range of company business.

Here, that standard is easily met, as the alleged fraud supposedly infected

Bio-Med, its principals and officers, its suppliers, and numerous other individuals

and businesses with whom it did or had done business. As such, even though the

fraud amounted to a small percentage of Bio-Med’s overall business, traces of that

fraud were likely to be found spread out amongst the myriad of records in Bio-

Med’s possession.

This holding is entirely consistent with our precedent. Although the

defendant in Sawyer was, as we described, a “boiler room” operation engaged in

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fraud that “affected all [its] customers, not just the twenty-five specifically

described [in the affidavits],” 799 F.2d at 1508, the operative fact was that the

entire breadth of the operation was implicated in the fraud. Thus, the search

warrant gave investigators the ability to search all of the operation’s records, as

evidence of that fraud was likely to be found in every place searched. The same

was true in Martinelli; although the defendant was engaged in a single fraudulent

scheme, we held that the information in the affidavit accompanying the application

for the search warrant sufficed to show that the fraud likely played a role in a wide

range of the company’s business transactions. 454 F.3d at 1307–08.

Other circuits have similarly concluded that the Government need not show

that a company is engaged solely in fraud to justify such a wide-ranging search.

See, e.g., United States v. Humphrey, 104 F.3d 65, 69 (5th Cir. 1997) (finding an

“all records” search of a business proper “[w]here probable cause exist[ed] to

believe . . . that all the records of a business are likely to constitute evidence”

(emphasis added and internal quotation omitted)); see also United States v. Falon,

959 F.2d 1143, 1147–48 (1st Cir. 1992) (collecting cases and determining that it is

unnecessary to show that the defendant’s business is entirely fraudulent if one

office was shown to have been engaged in widespread fraud). While not directly

on point, these cases inform our decision and convince us that the “pervasive

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fraud” doctrine applies when evidence of fraud is likely to be found in a broad

spectrum of the defendant company’s business records.

This is not to say that the “pervasive fraud” doctrine permits the seizure of

all corporate documents without a substantial evidentiary showing.96 Cf. In re

Grand Jury Investigation Concerning Solid State Devices, Inc., 130 F.3d 853,

856–57 (9th Cir. 1997) (requiring “a more substantial showing of pervasive fraud”

where a company’s business is primarily legitimate and citing United States v.

Hayes, 794 F.2d 1348 (9th Cir. 1986), for a representative showing). We merely

find that, in this circumstance and applying the facts as found by the district

court,97 the Government made the required showing. Accordingly, we reject the

defendants’ argument that the documents seized from Bio-Med’s headquarters

96

We address here the “pervasive fraud” doctrine only as it applies to the seizure of

business records, that is, records contained in a business location outside of a home. An “all

records” search conducted within a home—a home business, for example, or where a defendant

is known to keep business papers within the home—could be subject to more searching scrutiny.

See, e.g., United States v. Falon, 959 F.2d 1143, 1148 (1st Cir. 1992) (“On the other hand, when

an individual’s allegedly fraudulent business activities are centered in his home . . . the ‘all

records’ doctrine must be applied with caution.”).

97

The district court explained its findings—both factual and legal—as follows:

Defendants’ fraud, even if it constituted only a fraction of Bio-Med’s total

earnings, can fairly be characterized as “pervasive.” The long-standing and

complex scheme involved Bio-Med’s owners and principals, its accountant, and

numerous other individuals and businesses. The fraud had metastasized through

Bio-Med and other corporate entities owned by the Bradleys and their associates.

. . . An expansive search was required . . . .

Report and Recommendation 34, Dec. 7, 2005 (emphasis added). We agree with the court’s

conclusions.

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should have been suppressed on particularity and overbreadth grounds.98

b.

The Bradleys and Bio-Med both moved the district court to suppress the

evidence, consisting of data, obtained from the warrantless seizure of Bio-Med’s

computer servers. The district court upheld the seizure on the ground that an

exigency existed, reasoning that the agent directing the search acted properly in

preserving the data until a warrant could be obtained for its seizure. The Bradleys

and Bio-Med argue that the district court erred in finding that an exigency existed;

thus, the seizure was unnecessary and the evidence should have been suppressed.

The district court’s denial of the motion to suppress is reviewed as a mixed

question of law and fact. United States v. Alexander, 835 F.2d 1406, 1408 (11th

Cir. 1988) (citation omitted). We accept the facts the district court found in

resolving the exigent circumstance issue unless the findings are clearly erroneous,

United States v. Morales, 868 F.2d 1562, 1575 (11th Cir. 1989). We determine de

novo whether the court erred in applying the law to those facts. United States v.

Holloway, 290 F.3d 1331, 1334 (11th Cir. 2002).

98

Because we hold that the “pervasive fraud” doctrine applies under the facts as found

by the district court, we need not address the Government’s alternative argument that the good

faith exception described in United States v. Accardo, 749 F.2d 1477, 1481 (11th Cir. 1985),

should apply. We also decline to address the Government’s argument relating to the inevitable

discovery doctrine. See generally United States v. Khoury, 901 F.2d 948, 960 (11th Cir. 1990).

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As recounted previously, the facts are these. The agents knew that Bio-Med

had computer servers, but believed they were housed in Bio-Med’s headquarters at

6855 Southwest 81st Street. When they arrived at the headquarters location, the

agents learned that the servers were not in that building, but located across the

street. The agents also observed that several desktop computers in the

headquarters were connected to the servers through a network. The agents then

crossed the street to the building at 6860 Southwest 81st Street. Upon entering that

building, the agents were approached by a Bio-Med employee. One agent asked

the employee for the password to access the servers. After that employee called his

supervisor (and was told to cooperate with the agents), the employee complied.

Worried that the data stored on the hard drives might be corrupted or erased before

he could copy them, and knowing that the servers were connected to at least one

external network, the agent had the employee shut down the servers. After a

period of time, a warrant to search the servers was obtained. The agents executed

that warrant and either seized or imaged the servers’ hard drives.

The Bradleys’ and Bio-Med’s claim is that, under these facts, the search

violated the Fourth Amendment. Specifically, they argue that the agent’s mere

suspicion that data might be lost was insufficient, as a matter of law, to establish an

exigency without some showing that the agent was aware that Bio-Med employees

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were both capable of deleting and intended to delete data from the servers without

leaving a trace. Suppression, therefore, was the proper remedy. The Government

answers that the circumstance confronted by agents meets the definition of

unforeseen exigency and that the agents acted reasonably in seizing the servers

until a warrant could be obtained.

There is no dispute that the agent’s decision to shut down the servers

temporarily was a seizure, e.g., United States v. Jacobsen, 466 U.S. 109, 113, 104

S. Ct. 1652, 1656, 80 L. Ed. 2d 85 (1984), and that it was warrantless. The

question here is whether the seizure falls within the exigent circumstances

exception to the general rule that warrantless searches and seizures are per se

unreasonable. See United States v. Place, 462 U.S. 696, 701, 103 S. Ct. 2637,

2641, 77 L. Ed. 2d 110 (1983) (describing the exigency exception to the rule).

Exigent circumstances exist “when there is danger that [] evidence will be

destroyed or removed.” United States v. Tobin, 923 F.2d 1506, 1510 (11th Cir.

1991) (en banc) (citations omitted). We have applied the exigent circumstances

exception in situations where resorting to a magistrate would be impracticable or

hazardous, holding that an exigency exists when officers can articulate a reason,

grounded in the facts of the specific case, to fear that evidence may be destroyed or

lost or that someone may be in danger. See, e.g., United States v. Burgos, 720 F.2d

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1520, 1525–26 (11th Cir. 1983) (collecting cases).

An objective test applies to the exigency determination. An exigency exists

if “the facts . . . would lead a reasonable, experienced agent to believe that

evidence might be destroyed before a warrant could be secured.” Tobin, 923 F.2d

at 1510 (emphasis added) (citations and internal quotation marks omitted). But a

mere suspicion that an exigency may exist is not enough to justify a warrantless

search and seizure; the court must be able to identify specific facts that constitute

an exigency. United States v. Rodgers, 924 F.2d 219, 223 (11th Cir. 1991)

(reviewing the facts known to the police at the time of a warrantless search and

seizure).

In this case, the district court found specific facts which led it to declare an

exigency. In particular, the court stated that the agent

determined that immediate action was needed in order to secure the

servers and preserve their important data . . . . [He] was well aware

that the servers were accessible by other computers connected to the

Bio-Med network, including systems administrators who could dial in

from home or any remote location (and likely did so as a routine

practice). He recognized that as long as the servers remained

connected to the outside world their data could be maliciously

changed or corrupted and that a person making such changes could

easily “hide their tracks.” . . . Thus, it was entirely possible that the

Bio-Med data could be deleted and overwritten . . . so that it was

beyond recovery. [He] therefore made a judgment call . . . .

That call, the district court stated, was in response to a real possibility that evidence

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would be destroyed:

Until the servers were taken off-line or shut down, the data was

vulnerable to being altered or completely erased. And given the scope

of the criminal scheme, the number of targets of the investigation, and

the scale of Bio-Med’s operations, the agents could reasonably infer

that there were a number of people with both the ability and the

incentive to access and alter that data while a warrant was being

sought.

These findings are not clearly erroneous. See United States v. Villarreal, 613 F.3d

1344, 1349 (11th Cir. 2010) (“A factual finding is clearly erroneous only if, after

we review the evidence, we are left with the definite and firm conviction that a

mistake has been committed.” (citation and internal quotation marks omitted)).

Moreover, the factual circumstance found by the district court meets our

definition of exigency. Contrary to what the Bradleys and Bio-Med claim, the

agent did have specific reason to fear that data might be lost if he did not intervene;

Bio-Med employees had the ability and incentive to, after learning of the raid,

destroy damning information contained on the computer servers. See Tobin, 923

F.2d at 1510 (requiring only that there be a “danger” that evidence will be lost, not

a certainty).

And finally, we agree with the district court that the agent’s conduct was

reasonable in light of the exigent circumstance. The agent only took those steps

necessary to ensure that data were not destroyed while he sought a warrant; he did

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no more than was reasonably required to maintain the evidence. For these reasons,

we uphold the denial of the motions to suppress the evidence seized from Bio-

Med’s servers.

c.

Bradley, Jr., contends that the district court erred in denying his motion to

suppress evidence found in his Savannah residence, claiming that the affidavit

presented with the application for the search warrant did not provide probable

cause that evidence of a crime would be found there. He does not claim that the

Government improperly seized any particular record from his office; instead,

Bradley, Jr., contends that the magistrate judge should never have issued the

warrant in the first place and that the Government’s reliance upon it was not in

good faith. In particular, Bradley, Jr., submits that the affidavit contained only

unsupported conjecture, not facts, that his home office would contain records of

“illegal diversion and distribution of prescription drugs.” The district court

disagreed, finding a sufficient nexus between the illegal conduct alleged and

Bradley, Jr.’s residence. The district court based its decision on certain statements

contained the affidavit, most notably information provided to the agents by Pinkoff

about the interior of Bradley, Jr.’s residence—Pinkoff had toured the home and

was shown a typical home office, which included a computer. The court also

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relied upon the statement of an agent, who explained that, in his experience,

individuals were likely to keep records of personal credit cards and other financial

transactions in their home, especially when mail from financial institutions is

delivered there.

“The task of the issuing magistrate [in determining whether to issue a

warrant] is simply to make a practical, common-sense decision whether, given all

the circumstances set forth in the affidavit . . . there is a fair probability that

contraband or evidence of a crime will be found in a particular place.” Illinois v.

Gates, 462 U.S. 213, 238, 103 S. Ct. 2317, 2332, 76 L. Ed. 2d 527 (1983)

(applying a totality of the circumstances test). We review the issuing magistrate

judge’s decision de novo, “tak[ing] care both to review findings of historical fact

only for clear error and to give due weight to inferences drawn from those facts by

resident judges and local law enforcement officers.” Ornelas v. United States, 517

U.S. 690, 699, 116 S. Ct. 1657, 1663, 134 L. Ed. 2d 911 (1996); see also id. at 697,

116 S. Ct. at 1662 (refusing to apply a “policy of sweeping deference” to trial

courts). “We give great deference to a lower court’s determination of probable

cause.” United States v. Brundidge, 170 F.3d 1350, 1352 (11th Cir. 1999)

(citation, internal quotation marks, and alteration omitted).

Probable cause to search a residence requires some nexus between the

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premises and the alleged crime. See United States v. Jenkins, 901 F.2d 1075,

1080–81 (11th Cir. 1990). “The nexus between the objects to be seized and the

premises searched can be established from the particular circumstances involved

and need not rest on direct observation.” Id. (citation and alteration omitted). We

have previously found that a police officer’s expectation, based on prior experience

and the specific circumstances of the alleged crime, that evidence is likely to be

found in a suspect’s residence satisfies probable cause. Compare id. (“Evidence

that a defendant has stolen material which one normally would expect him to hide

at his residence will support a search of his residence.”) (citation and alteration

omitted), with United States v. Green, 634 F.2d 222, 226 (11th Cir. Unit B 1981)

(finding no probable cause to search based on an agent’s general assumption that

evidence of a crime committed in California was likely to be found in the

defendant’s home in Florida).

As described below, the affidavit relied upon by the magistrate judge who

issued the warrant contained the following information regarding Bradley, Jr.: (1)

Bradley, Jr., and co-conspirators had engaged in fraudulent conduct “over many

years that generated enormous profits”; (2) they had taken “elaborate measures to

conceal their fraud, including the use of offshore bank accounts, foreign trusts,

deceptive accounting practices, and various other methods to launder their ill-

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gotten profits”; (3) Bradley, Jr., had used profits gained from the conduct to

purchase his residence, and he kept a personal office at that location, which

contained a desk and computer; and (4) postal records “demonstrated that [Bradley,

Jr.,] regularly received mail at his home of a financial nature, including records

from banks, investment firms, and insurance and credit card companies.” In

addition to those facts, the affidavit further stated that, in the experience of the

investigating agent, suspects commonly retained evidence of money laundering,

tax evasion, and other financially-driven crimes in their homes, and that those

records are “extremely useful” in such investigations.

Based on that information, and giving due deference to the issuing

magistrate judge, one could have reasonably concluded that Bradley, Jr., was likely

to keep evidence of financial crimes in his home. See Gates, 462 U.S. at 238–39,

103 S. Ct. at 2332. It is not necessary, as Bradley, Jr., would have us find, that the

residence be the locus of the crime, or for agents to have procured specific

evidence that relevant records would certainly be found there.99 We find that there

99

We do not believe that the district court improperly overlooked information leading to

the conclusion that innocent records were more likely to be found at Bradley, Jr.’s home than

evidence of any crime, namely that the phone bill was in Bradley, Jr.’s wife’s name and that

financial mail received at the house was sent from institutions having nothing to do with the

alleged fraud. Such information is, of course, relevant to the determination of probable cause.

Nevertheless, under the totality of the circumstances test announced in Illinois v. Gates, 462 U.S.

213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983), the court properly considered the likelihood that

other, more applicable records would be found at the home.

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was probable cause to issue the warrant and accordingly uphold the district court’s

refusal to suppress the evid

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