determining that the Government presented sufficient evidence to support its charge of money-laundering concealment when it showed that the “transactions were in cash so that they were not easily tracked” and that “[m]ost deposits were below ten thousand dollars so as to avoid setting off any reporting requirements that might then lead to unwanted attention concerning the funds’ nature”
How later courts described this case
- determining that the Government presented sufficient evidence to support its charge of money-laundering concealment when it showed that the “transactions were in cash so that they were not easily tracked” and that “[m]ost deposits were below ten thousand dollars so as to avoid setting off any reporting requirements that might then lead to unwanted attention concerning the funds’ nature”
- holding that the district court did not abuse, its discretion in admitting evidence of other prescriptions because “[t]he critical issue at trial was whether the appellants filled [one doctor’s] prescriptions knowing they were illegitimate, and appellants’ experiences in filling piles of similar false prescriptions from a different doctor would speak directly to that issue”
- explaining that although the expert witness had undisputed knowledge and expertise with respect to the business’s computer program, the expert was not a qualified witness under Rule 803(6) because he had no knowledge of the business’s record keeping procedures or practices
- holding, post- Cuellar , that "the government must demonstrate that the charged transactions had the purpose -- not merely the effect -- of 'mak[ing] it more difficult for the government to trace and demonstrate the nature of th[e] funds' "
Written by the judges who cited it.
The opinion
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 18, 2008
No. 05-20997 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff-Appellee
v.
ANDRE DION BROWN; OTUKAYODE ADELEKE OTUFALE;
CHICHA KAZEMBE COMBS; JOHN DAVID WILEY, III;
ANTHONY DWAYNE ESSETT
Defendants-Appellants
Appeal from the United States District Court
for the Southern District of Texas
Before HIGGINBOTHAM, DAVIS, and BARKSDALE, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
The appellants were pharmacists who were convicted of illegally
conspiring with doctors to distribute large quantities of medicines under cover
of false prescriptions written by the doctors.
A hung jury ended their first trial. In a second trial the appellants were
convicted of the charged crimes. All defendants timely appealed.
No. 05-20997
I. BACKGROUND AND FACTS
In 2002, a Texas doctor, Dr. Callie Herpin, then working at a pediatrics
clinic, met Isaac Achobe, who owned and operated a pharmacy in her building.
Herpin had grown tired of the rigors of practice, and Achobe suggested that
Herpin open a “pain management” clinic. Such clinics are enterprises
specializing in the distribution of powerful pain killers and related drugs. Some
clinics operate within the bounds of the law and serve a valuable medical
purpose, but others flood the streets with dangerous, addictive narcotics while
preserving some trappings of lawful medical practice. Hydrocodone, one of the
drugs at issue in this case, is one such narcotic.1 The other drug at issue,
promethazine with codeine, is a strong medicinal syrup, often consumed in
combination with alcohol and other substances.2 The Houston area is a hot-spot
for the distribution and consumption of these narcotics.
In his conversation with Herpin, Achobe referred her to Drs. Peters and
Gbanaador, who ran “pain management” clinics. Achobe gave other advice about
running a pain management practice and assured her that he could send
“patients” to her. Herpin opened her practice, C.H. Medical Consultants, in
Houston, in September 2002. Many of Herpin’s “patients” were drug dealers and
1
Hydrocodone is the generic name for a common, widely distributed, opioid narcotic
analgesic, which is produced in various combinations under brand names such as Lorcet,
Lortab, and Vicodin.
2
Street users often combine promethazine with codeine with opioids such as
hydrocodone for intensified, and yet more toxic, effect. They also mix it with sugary candy or
drinks, such as Jolly Ranchers or Sprite. Street names of promethazine with codeine and
similar syrups include “purple,” “purple drank,” or simply “syrup.”
2
No. 05-20997
addicts who would purchase non-medically-indicated prescriptions3 from her and
have them filled at pharmacies such as those run by appellants. They could then
consume the drugs or resell them on the streets for significant mark-ups.
Herpin soon went from writing a couple of fraudulent prescriptions (“scripts”) for
each of her patients to selling long lists of fictitious patient names with
corresponding prescriptions. In short, Herpin ran what is referred to as a “script
mill.”
Herpin testified as a government witness, having pled to drug violations
as well as to large-scale, unrelated Medicare fraud. Etta Williams, who also
testified for the government pursuant to a plea agreement,4 started as a
“patient” of Herpin’s, buying illicit prescriptions in her own name and in the
names of family members. She was eventually hired by Herpin and played a
large role in developing the script mill at C.H. Medical Consultants, beginning
in early 2003. Another government witness, Tresy Eze, also started as a drug
dealing “patient” of Herpin but then came to work at Herpin’s front desk, and to
take care of Herpin’s baby. At the height of their activities, Herpin and her staff
used phone books and computer data manipulation to generate lists of names for
3
Often either the individuals named on the prescription would not be present at all, or
if they were, only the most cursory of exams would suffice for Herpin to write an individual a
prescription as per their request.
4
Williams pled to conspiracy to commit health care fraud, conspiracy to unlawfully
dispense and distribute the controlled substances hydrocodone and promethazine with codeine,
and money laundering.
3
No. 05-20997
prescriptions.5 Records suggest that Herpin’s clinic generated up to twenty-five
thousand dollars a day, in cash, in revenue from prescriptions.
In January 2003, Herpin came to the attention of the Drug Enforcement
Agency’s diversion unit, which investigates the diversion of licit substances into
illicit markets. Undercover law enforcement officers purchased illegitimate
prescriptions from Herpin over a three month period and had the prescriptions
filled at the pharmacy of appellant Otukayode Otufale. Based on these
controlled purchases, DEA obtained search warrants for Herpin’s office and Etta
Williams’ residence. In an August 23, 2003, raid, DEA agents seized lists of
fictitious patients, cash, promethazine with codeine, computers, pre-printed
prescriptions, and doctor dispensing reports.6 The investigation brought
appellants’ and others’ pharmacies to DEA’s attention. DEA agents served
notices of inspection on the pharmacies, visited the pharmacies, questioned the
pharmacists, and obtained copies of dispensing reports.
On September 29, 2004, a federal grand jury sitting in the Houston
Division of the Southern District of Texas returned a 121 count indictment
against the appellants and others. A 190 count superceding indictment issued
on November 24, 2004, and the case went to trial. On May 17, 2005, after
thirteen days of trial proceedings, and five days of jury deliberation without a
verdict, Judge Hittner of the United States District Court for the Southern
District of Texas declared a mistrial due to the hung jury.
5
Williams would on occasion instruct the clinic’s customers where to fill certain
prescription lists, based on which pharmacies had filled lists with those names before and
would be able to expedite the process of filling prescriptions because the personal information
of those “patients” would already be on record.
6
Dispensing reports are maintained by pharmacists to track the prescriptions they fill.
Herpin had requested that some of the pharmacies provide copies of their reports to her.
4
No. 05-20997
On June 9, 2005, the grand jury handed down an 82 count second
superceding indictment charging the appellants as well as four other defendants
with numerous crimes related to their drug conspiracy.7 The indictment
included notices of criminal forfeiture pursuant to 18 U.S.C. § 982 and 21 U.S.C.
§ 853. The second jury trial began on August 16, 2005, and on October 4, 2005
the jury convicted the appellants of all offenses charged under the indictment.
All were convicted of one count of conspiracy to unlawfully distribute two
controlled substances, hydrocodone (a Schedule III controlled substance) and
promethazine with codeine (a Schedule V controlled substance), from October
2002 to December 2003.8 Otufale was also convicted of actual distribution from
December 2002 to August 2003.9 Combs and Brown were convicted of
distribution from January to November 2003.10 Wiley and Esset were convicted
7
The additional defendants were Omar Fahie, Will Bailey, Eric Craft, and Isaac
Achobe. Fahie plead guilty to two counts on August 4, 2005. Bailey’s case was severed and
he pled guilty to two counts on October 18, 2005. Craft’s case was severed and at trial he was
convicted, on October 19, 2005, of all charges; his appeal was affirmed by this court in United
States v. Craft, No. 06-20396, 220 F. App’x 304, 307 (5th Cir. 2007) (noting that at his trial the
government “constructed a case against Craft that is only trivialized by referring to it as
overwhelming.”). Achobe was tried and convicted alongside the appellants, but his appeal was
severed from his co-defendants’ appeals and is before this court in United States v. Achobe, No.
06-20229, the opinion in which is filed simultaneously with this opinion.
8
According to Count One of the indictment, the defendants “each aided and abetted by
the other and by others known and unknown to the grand jury, did knowingly and
intentionally combine, conspire, confederate and agree to unlawfully dispense and distribute,
outside the scope of professional practice and not for a legitimate medical purpose,” the two
drugs, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(D), and 846. See also 21 C.F.R. §
1306.04(a) (providing regulatory interpretation of the statutory provisions forming the basis
of the charges).
9
Under Count Two, for hydrocodone, and Count Three, for promethazine with codeine.
These counts omit charges under 21 U.S.C. § 846 but add charges under 18 U.S.C. § 2.
10
Under Counts Six (hydrocodone) and Seven (promethazine with codeine).
5
No. 05-20997
of distribution from December 2002 to December 2003.11 Otufale was convicted
of seven counts of Money Laundering Promotion.12 Combs and Brown were
convicted of ten counts of Money Laundering Promotion13 and seven counts of
Money Laundering Concealment.14 Wiley and Essett were convicted of ten
counts of Money Laundering Promotion,15 for fourteen counts of Money
Laundering Concealment,16 and for six counts of Engaging in Monetary
Transactions in Property Derived from Specified Unlawful Activity.17 Wiley was
11
Under Counts Eight (hydrocodone) and Nine (promethazine with codeine).
12
Under Counts Twelve through Nineteen, in violation of 18 U.S.C. § 1956(a)(1)(A)(i).
For checks written to Anda, Inc., VIP Pharmaceuticals, Harvard Drug Co., and Top RX from
March 9 to June 28, 2003. Here as elsewhere the underlying specified unlawful activity was
distribution in violation of 21 U.S.C. § 841(a)(1). Also, here as elsewhere defendants who aided
and abetted were charged as principals pursuant to 18 U.S.C. § 2.
13
Counts Twenty-Six through Thirty-Five. For checks written to Anda, Top RX,
Harvard, and Cardinal Health, from February 19 to June 11, 2003.
14
Counts Thirty-Six through Forty-Two, in violation of 18 U.S.C. 1956(a)(1)(B)(i). For
cash deposits into certain accounts and a check made out to the pharmacy, from March 31 to
April 14, 2003.
15
Counts Forty-Three through Fifty-Two. For automatic debit payments to Walsh
Southwest, Top RX, VIP, and Amerisource Bergan, from January 8 to November 10, 2003.
16
Counts Fifty-Three to Sixty-Six. For cash deposits made to personal and pharmacy
accounts from April 7 to November 20, 2003.
17
Counts Sixty-Seven to Seventy-Two, in violation of 18 U.S.C. 1957. For checks and
transfers (ranging from $26,140 to $96,433) from their pharmacy to their personal accounts
from January 9 to August 7, 2003.
6
No. 05-20997
convicted of an additional three counts of this latter offense,18 and Essett of a
separate seven counts of the same offense as well.19
Pursuant to the court’s findings and order, the appellants were subject to
monetary penalties and to forfeiture of property.20 They were also ordered to be
imprisoned: Essett for 151 months,21 and Wiley,22 Combs,23 Otufale,24 and
Brown25 each for 120 months. Each sentence is to be followed by three years of
supervised release. The sentences reflect upward departures based on the
excessive quantities and the toxicity of the combination of drugs involved.
18
Counts Seventy-Three through Seventy-Five. For three checks, written on April 30,
August 25, and October 28, 2003, totaling $275,000, to pay for a personal residence in Cypress,
Texas.
19
Counts Seventy-Six through Eighty-Two. For checks and bill payments dating from
March 31 to August 8, 2003, and totaling over $230,000.
20
In addition to forfeitures, the court ordered Combs and Brown each to pay a special
assessment of $1925, Otufale to pay a special assessment of $1025, Wiley to pay a special
assessment of $3525, and Essett to pay a fine of $312,000 and a special assessment of $3925.
21
60 months each for Counts 1 and 8, 12 months for Count 9, 120 months each for
Counts 67 to 72 and 76 to 82, and 151 months each for Counts 43 through 66, all concurrent.
22
60 months each for Counts 1 and 8, 12 months for Count 9, 120 months each for
Counts 43 through 75, all concurrent.
23
60 months each for Counts 1 and 6, 12 months for Count 7, 120 months each for
Counts 26 through 42, all concurrent.
24
60 months each for Counts 1 and 2, 12 months for Count 3, 120 months each for
Counts 12 through 19, all concurrent.
25
60 months each for Counts 1 and 6, 12 months for Count 7, 120 months each for
Counts 26 through 42, all concurrent.
7
No. 05-20997
The appellants owned and operated independent pharmacies.26 At trial,
evidence established that all of these pharmacists filled large numbers of Herpin
prescriptions.27 The government introduced additional evidence of each
pharmacist’s individual involvement in the drug distribution conspiracy:
(1) Otufale. According to Herpin’s testimony, she met
Otufale in late 2002, when he dropped off Med-Stop coupons at her
office; noticing her empty office, Otufale offered to send her patients.
He also informed her that their mutual acquaintance (and
unindicted co-conspirator) Dr. Peters was “hot,” apparently meaning
that he was under investigation by law enforcement officials.28
Their relationship blossomed. Dispensing records show that
over the charged time period, Otufale filled many thousands of
Herpin prescriptions, including from lists of fictitious names. May
2003 alone saw him fill 4,529 of her prescriptions. For much of
2003, Otufale filled one to two hundred Herpin prescriptions per
week for Williams (who was still dealing drugs while she was also
working at Herpin’s office), and occasionally he even sold her pint
bottles of promethazine with codeine without labels. The going
26
Otukayode Otufale owned Med-Stop Pharmacy, which was in the same building as
C.H. Medical Consultants; John Wiley and Anthony Essett owned I-10 East Pharmacy; and
Andre Brown and Chicha Combs, through their jointly owned B&X RX, Inc., owned Mason
Road Pharmacy in Katy, Texas.
27
We refer to the appellants as pharmacists because they were licensed for the relevant
period; they are apparently no longer so licensed, and are in any case incarcerated.
28
Peters has pled to one count of money laundering.
8
No. 05-20997
price per bottle of promethazine with codeine between Williams and
Otufale was seventy-five dollars.
A traffic stop of a man named Charlie Johnson uncovered
bottles of hydrocodone and promethazine with codeine that had been
dispensed by Med-Stop, bore labels of names other than that of
Johnson, and listed Herpin as the prescribing physician. Many
were dated to the same day that they were discovered. Johnson
himself was apparently abusing the syrup while driving.
The drug dealer Omar Fahie, one of Otufale’s original co-
defendants, testified that Otufale filled Herpin scripts for him once
every week or two, off lists of up to one hundred names. Otufale
filled many prescriptions of unindicted co-conspirators as well,
including Drs. Gbaanador and Peters, as attested by Sharon Boutte
(a drug dealer who acted as intermediary between Peters and
Otufale), and by Med-Stop’s dispensing records. Here as throughout,
drug purchases were made almost exclusively in cash and without
any health insurance involvement.
(2) Wiley and Essett. After her husband had a dispute with
Otufale, Tresy Eze, an employee of Herpin, along with her husband,
began to fill prescriptions at Wiley and Essett’s pharmacy, I-10
East. Eze set up a meeting between Essett and Herpin, at which
Essett sought to establish that Herpin was in fact a doctor by
examining her office and asking her questions. Essett then
volunteered to send her more “patients” and intimated that he
understood the nature of her script business. Omar Fahie testified
that he took Herpin prescriptions in his name and in the names of
9
No. 05-20997
people he knew to I-10 East beginning in December 2002. While he
first brought with him the individuals in whose names the
prescriptions were written, he later brought only their identification
with him, and finally just brought in lists of names (up to four lists
of twenty-five names each, all in one visit, at the height of the
conspiracy). He paid exclusively in cash, up to twelve thousand
dollars per visit, and no claims to insurance were made. He picked
up the drugs in an area not generally open to the public, in boxes
with approximately twenty-five bags of drugs packed in each box.
Sharon Boutte testified that she too filled prescriptions, for up to
five or six people at a time, at I-10 East, after Dr. Peters called the
prescriptions in. She testified that she dealt with both Wiley and
Essett and was eventually allowed to pick up the prescriptions
without bringing in the individuals in whose name they were made
out, and even without identification.
Etta Williams identified lists and scripts in evidence as
Herpin prescriptions filled at I-10 East. These include scripts
bearing fictitious names. All told, in the course of the charged
conspiracy, I-10 East filled Herpin prescriptions for over three
thousand pints of promethazine with codeine and over twenty-seven
hundred 100-count bottles of hydrocodone. Records demonstrate
that I-10 East filled massive quantities of prescriptions of these
drugs for other doctors as well, including unindicted co-conspirators
Drs. Peters and McClellan. I-10 East’s revenue from non-suspicious
drug sales was a small fraction of its total revenue.
10
No. 05-20997
(3) Brown and Combs. Brown and Combs opened Mason
Road in January 2003. Their first month of business, they ordered
sixty-three gallons of promethazine with codeine from a
pharmaceutical supplier. Although at a considerable distance from
Herpin’s office, Mason Road filled many Herpin prescriptions, as
well as many hundreds of prescriptions from other doctors including
Dr. Peters. Sharon Boutte testified that she filled both Herpin and
Peters prescriptions at Mason Road; the prescriptions, paid for in
cash and conveniently packed into grocery bags before she arrived,
were in her name and the names of others, identification for whom
she was not required to provide. Both Combs and Brown filled her
prescriptions. Eventually, she testified, because Brown was
uncomfortable with her filling prescriptions at Mason Road every
day, she decreased the frequency of her visits. Lists and scripts,
from Herpin’s office reveal that Mason Road filled prescriptions for
many transparently fictitious individuals. Some lists, for instance,
repeat last names and identifying information and merely change
the first names of the individuals in whose names the prescriptions
were issued. Other government evidence suggests patterns of
prescription filling that are highly suspicious and suggest that
Combs and Brown attempted to fit a thin veneer of legitimacy and
legality on their large and profitable illegal activities. Combs and
Brown also worked second jobs at the chain pharmacy Walgreens
during the time of the conspiracy, and they conceded that not once
had they filled a prescription for promethazine with codeine in the
pint amount that was the norm for the many hundreds of Herpin
11
No. 05-20997
prescriptions they filled for promethazine with codeine from their
own pharmacy.
As to the money laundering allegations, the government provided
evidence from pharmaceutical distributors and pharmacy accounts,
demonstrating that the appellants were spending some of their ill-gotten
gains to buy more drugs and thus to “promote” further illegal distribution
(money laundering promotion); evidence from accounts and other records
of transactions designed to avoid reporting requirements and otherwise to
disguise the nature of pharmacy monies (money laundering concealment);
and evidence from other receipts and records demonstrating some uses to
which profits were put (money laundering spending).
The government’s case included testimony from Darryl Armstrong
as well. Armstrong – who pled, pursuant to an agreement, to three of the
twenty-one counts for which he was indicted29 – was a co-owner of Stella
Link Pharmacy in Houston. Armstrong, a pharmacist since 1990 who
worked at Walgreens until 2003, when he opened his own pharmacy,
testified that after filling a certain number of Herpin prescriptions and
visiting her office, he realized that her “pain management” practice was
in fact engaged in illegitimate drug distribution. Armstrong, a close friend
of Wiley, also testified that he and Wiley discussed the activities of dealer
Eric Craft. Wiley told Armstrong that if Craft was bringing him
prescriptions he would be busy because “Eric was big.” In a later
conversation, Wiley assured Armstrong that as long as Craft provided a
29
He pled to conspiracy to unlawfully distribute hydrocodone and promethazine with
codeine, unlawful distribution of hydrocodone, and money laundering promotion.
12
No. 05-20997
prescription for each bottle of promethazine with codeine or each set of
hydrocodone tables, “it would be okay.” Wiley also told Armstrong, who
asked him what to do with his influx of cash profits, not to make deposits
for amounts in excess of ten thousand dollars in the course of a day.
Armstrong’s testimony supported the prosecution’s evidence concerning
the operation of the other pharmacies and of Herpin’s office. Armstrong
himself filled illicit prescriptions for Drs. Herpin, Peter, and Gbanaador.
Armstrong reported on conversations with both Wiley and Essett
concerning Herpin’s lax prescription policies. Finally, he testified that
Wiley said that his pharmacy was getting out of the syrup business
because, with a legitimate medical clinic next door, the pharmacy could
survive without being involved in the “pain management” business.
Both the government and the defendants introduced expert
testimony to bolster their case. A government expert, and a practitioner
in the “pain management” arena, Dr. Martin Grabois testified that he
would not prescribe promethazine with codeine because its low codeine
level made it unsuitable as a pain killer (it is usually prescribed as a cough
suppressant). He testified that he had never heard of any doctors
prescribing a hydrocodone-promethazine with codeine combination for
pain. He opined that the Herpin prescriptions he was shown were clearly
not prescribed legitimately, judging by both the content of the
prescriptions and the fact that so many of them, near identical, were
issued at once.
Dr. Everton Edmundson, another “pain management” specialist,
testified for the defense that there was nothing “medically inappropriate”
on the face of a Herpin prescription for promethazine with codeine and
13
No. 05-20997
hydrocodone, although he conceded that this was probably not an optimum
regime for pain treatment. A Texas pharmacist, Walter Lemmons, who
personally knew appellants Combs and Brown, reviewed numerous scripts
that formed part of the case against the appellants. Providing a variety
of explanations concerning how the scripts could be legitimate, he testified
that the scripts were not on their face suspicious and that he would fill
them, even many of them on the same day. He did concede, however, that
these drugs had high potential for abuse and lists of scripts brought in day
after day might raise his suspicions.
Another pharmacist, Fred Emmite, testified for the government
about pharmacists’ “corresponding responsibility” to insure the dispensing
of drugs pursuant to valid medical purposes and that the prescriptions
would have raised red flags and cause any pharmacist to be suspicious.
He commented on a book that the prosecution entered into evidence, the
Texas Pharmacy Laws and Regulations (2003), which every pharmacist is
required to have on hand and which includes discussion of pharmacists’
responsibilities, including a number of indicators (many of them present
in this case) that should make pharmacists suspicious and tip them off to
possible illegal activity.
In sum, the government conceded the circumstantial nature of its
case, but it urged conviction on the basis of the overwhelming evidence of
guilt discussed above. It argued that at a minimum, the appellants’
behavior suggests that any ignorance of the illegitimacy of the
prescriptions they filled was deliberate, and that it proved beyond a
reasonable doubt each appellant had the requisite mental state for each
crime for which he was convicted.
14
No. 05-20997
Throughout, the appellants’ defense centered on their lack of
necessary mental state. They insisted that they did not know the
prescriptions they filled were illegitimate. For the most part, they abided
by the formal requirements for pharmacies filling controlled substance
prescriptions. Some appellants had on occasion called to confirm
prescriptions with Herpin, had reacted negatively to Herpin’s practices
by either partially or altogether refusing to fulfill her prescriptions, and
had otherwise insisted on observing the legal niceties required for
pharmacists in their position. They attacked the government witnesses
who testified pursuant to agreements, arguing that the jury should not
credit the self-serving testimony of admitted criminals. At worst, they
argued, they were negligent in failing to investigate suspicious behavior,
require identification, and so on; but negligence, they noted, was not a
sufficient mental state to support conviction.
The jury agreed with the government and convicted the appellants
on all counts. The appellants raise a number of issues on appeal,
regarding their trial, convictions, and sentences. We now turn to their
arguments.
II. SUFFICIENCY CHALLENGES
The appellants challenge the sufficiency of the evidence against
them.30 The standard for such claims is high. The question is one of the
30
For the moment, we assume that all issues raised on appeal were preserved below
by all appellants who raise them now. As noted infra, this assumption may not be supported
in all cases and might provide alternative grounds for rejecting some of the arguments
addressed herein or heighten the standard of review applicable to those claims. Our judgment
as to the merits of the appellants’s claims, even under the standards applied to properly
15
No. 05-20997
sufficiency of the evidence, not its credibility. “In reviewing the sufficiency
of the evidence, we view the evidence and the inferences drawn therefrom
in the light most favorable to the verdict, and we determine whether a
rational jury could have found the defendant guilty beyond a reasonable
doubt.”31 Relevant for the instant case, “our standard of review does not
change if the evidence that sustains the conviction is circumstantial rather
than direct.”32 We discuss each sufficiency challenge in order.
A. Substantive Drug Counts
The appellants challenge the sufficiency of the government’s
evidence as to their distribution of hydrocondone (a felony) and
promethazine with codeine (a misdemeanor) under 21 U.S.C. § 841(a)(1).
To convict on these substantive counts, “the government was required to
prove ‘(1) that [each appellant] distributed or dispensed a controlled
substance, (2) that he acted knowingly and intentionally, and (3) that he
did so other than for a legitimate medical purpose and in the usual course
of his professional practice.’”33
Appellants claim that they did not know the prescriptions were not
issued “in the usual course” of medical treatment. But aside from two
preserved claims, allows us to avoid sorting out which issues have been preserved and raised
by each appellant.
31
United States v. Mitchell, 484 F.3d 762, 768 (5th Cir. 2007) (citations omitted).
32
Id.(quoting United States v. Anderson, 174 F.3d 515, 522 (5th Cir. 1999) (citations
omitted)).
33
United States v. Norris, 780 F.2d 1207, 1209 (5th Cir. 1986) (quoting United States
v. Rosen, 582 F.2d 1032, 1033 (5th Cir. 1978)).
16
No. 05-20997
counts, counts 28 and 32,34 that the government concedes it failed to
support, nothing suggests that the government failed to adduce sufficient
evidence to secure the conviction of the appellants. As the background
section above demonstrates, the government amassed overwhelming
testimonial and documentary evidence of guilt against each and every
appellant. The appellants cite some evidence that would support a not
guilty verdict, but in light of the evidence against them, this evidence in
their favor utterly fails to render the jury verdict unreasonable.
The convictions for distribution therefore stand, except as to counts
28 and 32. The convictions of Brown and Combs under counts 28 and 32
must be and now are reversed.
B. Conspiracy to Distribute
The appellants also challenge their convictions for conspiracy to
distribute hydrocodone and promethazine with codeine. In order to
convict the appellants of conspiracy, the prosecution had to “show (1) an
agreement between two or more people to violate federal drug laws, (2)
defendant’s knowledge of the agreement, and (3) defendant’s voluntary
participation in the agreement.”35 As on the substantive drug counts, the
evidence of conspiracy was largely circumstantial36 but unquestionably
34
The government concedes that counts 28 and 32 must be reversed because the
relevant receipts do not reflect that hydrocodone was purchased, and thus the threshold for
charges under this statute were not reached.
35
United States v. Aguilar, 503 F.3d 431, 435 (5th Cir. 2007).
36
See United States v. Mitchell, 484 F.3d 762 (5th Cir. 2007) (allowing for elements of
conspiracy to be proven by circumstantial evidence).
17
No. 05-20997
compelling. The government has demonstrated, as it must, not that every
conspirator knew every other conspirator but that every defendant knew
at least one co-conspirator drug dealer and one co-conspirator pharmacist.
“To be convicted of engaging in a criminal conspiracy, an individual ‘need
not know all the details of the unlawful enterprise or know the exact
number or identity of all the co-conspirators, so long as he knowingly
participates in some fashion in the larger objectives of the conspiracy.’”37
It is clear that there was an illegal agreement among Herpin, her staff, the
“patients” who bought and filled prescriptions, the appellants, and other
doctors who advised and aided Herpin and the other co-conspirators.
The appellants argue that they did not knowingly participate in the
conspiracy. But while the appellants ran different operations, and the
specific types of involvement and knowledge demonstrated by the evidence
differ, circumstantial evidence more than amply demonstrates that they
each shared and advanced the goal of the conspiracy by knowingly filling
illegal prescriptions, an activity that was a crucial link in the chain of this
drug conspiracy.
The prosecution bore a heavy burden of proof in its attempt to
demonstrate the requisite criminal behavior and state of mind as to each
appellant, and it convinced the jury. Our review of the record reveals no
insufficiency. The appellants have failed to point to any reason this
verdict should not be upheld, and so it is.
37
United States v. Garcia Abrego, 141 F.3d 142, 155 (5th Cir. 1998) (quoting United
States v. Westbrook, 119 F.3d 1176, 1189 (5th Cir. 1997)).
18
No. 05-20997
C. Money Laundering
1. Money Laundering Promotion
The money laundering promotion statute, 18 U.S.C. §
1956(a)(1)(A)(i), prohibits involving the “proceeds” of specified criminal
activities in transactions intended to “promote” the carrying on of further
unlawful activity. “To sustain a conviction under the money laundering
promotion statute, the Government must show that the defendant: (1)
conducted or attempted to conduct a financial transaction, (2) which the
defendant then knew involved the proceeds of unlawful activity, (3) with
the intent to promote or further unlawful activity.”38 The statute provides
that the “unlawful activity” generating the proceeds must be a felony.39
Appellants challenge the government’s evidence supporting their money
laundering promotion convictions on three grounds. They argue that (a)
the government failed to prove the requisite involvement of funds from
felonious activities, (b) the recent Supreme Court ruling in United States
v. Santos renders the government’s evidence of “proceeds” insufficient, and
(c) Fifth Circuit precedent dictates that the requisite “promotion” activity
under this statute does not include the behavior targeted by the
government’s evidence.
a. Felony
38
United States v. Miles, 360 F.3d 472, 477 (5th Cir. 2004).
39
See 18 U.S.C. § 1956(c)(1) (requiring that the defendant know “property involved in
the transaction represented proceeds from some form, though not necessarily which form, of
activity that constitutes a felony under State, Federal, or foreign law . . . .”).
19
No. 05-20997
The district court instructed the jury that in order to convict for
money laundering, it must find beyond a reasonable doubt that the
transactions charged in the indictment “involved the proceeds of a
specified unlawful activity, namely, unlawfully dispensing and
distributing a controlled substance, hydrocodone, knowing the prescription
was written outside the scope of a medical doctor’s professional practice
and not for a legitimate purpose.” This is a qualifying felony under the
statute.
The appellants nevertheless challenge the sufficiency of the evidence
on this score, in essence contending that the money involved in the
charged transactions must derive exclusively from distribution of
hydrocodone. Under the appellants’s theory, if the charged transactions
involved any funds from unlawful sales of promethazine with codeine
(which is only a misdemeanor) or from other sources, then they cannot
serve as the predicate for money laundering charges. But this is contrary
to the plain language of the statute as well as to the relevant case law.40
Evidence shows that, as the jury found, significant amounts of illegal
hydrocodone money were involved in the charged transactions and thus
provide sufficient evidence of an underlying felony.
b. Proceeds
The recent decision by the Supreme Court in United States v.
Santos41 bears directly on the appellants’ challenge to the “proceeds”
40
See United States v. Bieganowski, 313 F.3d 264, 279-80 (5th Cir. 2002).
41
128 S. Ct. 2020 (2008).
20
No. 05-20997
element of the charges. In Santos, a deeply conflicted Supreme Court
ruled on the definition of “proceeds” in certain money laundering contexts.
The justices split 4-1-4, with Justice Stevens writing a concurrence in the
judgment that provided the decisive fifth vote for the plurality. The
precedential value of Santos is unclear outside of the narrow factual
setting of that case, and the decision raises as many issues as it resolves
for the lower courts.
Santos, who operated an illegal lottery, was convicted of illegal
gambling and money laundering promotion. The latter crime carries a
much steeper penalty than the gambling. The transactions that formed
the proceeds element of the money laundering charge were payments
made by Santos to lottery winners and to his “runners.” Santos
challenged the money laundering conviction on the theory that these were
not proceeds (in the sense of profits) but rather were simply receipts or
revenue used to cover his operating expenses, and therefore they were not
sufficient to support a money laundering conviction. The question before
the Court amounted to whether “proceeds” under the statute means only
profits of the specified criminal activities, or whether it includes all
receipts.
Invoking the rule of lenity in light of statutory ambiguity, the four-
justice plurality, led by Justice Scalia, held that the money laundering
conviction was invalid because “proceeds” includes only the profits of
unlawful activity, not all receipts. Santos’ payments to his employees and
the lottery winners could not serve as the basis for money laundering
charges, because the monies involved in those payments were not profits
21
No. 05-20997
but merely receipts necessary to paying his expenses. The plurality noted
that the alternative position, the position that “proceeds” means receipts,
runs into a significant “merger problem,” because many crimes, such as
the one at issue in Santos, would almost always support money laundering
charges without requiring proof of any distinct laundering activities. This
would give prosecutors an extremely powerful and probably unintended
tool to bring much more severe charges than would otherwise be available
for the underlying offenses.
Justice Stevens provided the fifth vote for this position, but unlike
the majority he did not consider this definition to be this statute’s
definition of “proceeds” in all criminal contexts. Rather, he accepted the
dissent’s position that in other contexts – namely, when the sale of
contraband and the operation of organized crime syndicates are involved
– the legislative history of the statute suggests that Congress intended for
all receipts to count as “proceeds.” He would interpret “proceeds” in the
statute to mean one thing in some criminal contexts and another thing in
other criminal contexts.
The four justice dissent, per Justice Alito, argued that the term
“proceeds” in the statute includes all receipts, and not just profits, in all
contexts. Justice Alito pointed to other similar statutes, to legislative
history, and to the purpose and functioning of the statute.
Ordinarily, a Court thus divided is considered to have ruled on the
“narrower” grounds on which five justices actually agreed, but that ground
22
No. 05-20997
of agreement is not apparent in this case.42 The dissent characterizes the
“stare decisis” effect of Santos thus: “five Justices agree” that “proceeds”
includes all receipts in the contraband context.43 But Justice Scalia, for
the plurality, characterizes the ground of agreement differently:
“‘proceeds’ means ‘profits’ when there is no legislative history to the
contrary. . . . It does not hold that the outcome is different when contrary
legislative history does exist.”44 Justice Scalia allows that this leaves room
for lawyers to argue that the interpretation should change when there is
legislative history to the contrary. But Justice Scalia warns that only
Justice Stevens seems to think that the statute could be interpreted
differently in different contexts (the dissent too acknowledges that Stevens
is the only justice adhering to this view).
Thus the outcome could be that in a future case in the contraband
realm, Justice Stevens would switch his definition to receipts, but one or
more Santos dissenter would join the majority in holding that “proceeds”
means profits – not because they have changed their minds about what
Congress intended, but because principles of stare decisis and statutory
interpretation demand that “proceeds” in this statute be interpreted
consistently. The instant case is further complicated because even if
42
See United States v. Caparotta, 571 F.Supp. 2d 195, 197-200 (D.Me. 2008) (discussing
the precedential effect and interpreting 21 U.S.C. § 853 in light of Santos).
43
Santos, 128 S.Ct. at 2035 n. 1 (Alito, J., dissenting) (quoting Stevens, J.,
concurring in the judgment). In an unpublished opinion, a recent Third Circuit panel
accepted this interpretation in a drug case. United States v. Fleming, 287 Fed. App’x 150,
155 (3d Cir. 2008).
44
Santos, 128 S.Ct. at 2031; see United States v. Yusuf, 536 F.3d 178, 185-86, 189-90
(3d Cir. 2008).
23
No. 05-20997
proceeds includes all receipts in contraband cases, as the Santos
dissenters and Justice Stevens might hold, prescription drugs might form
a conceptually distinct category of contraband, since they are only
contraband when and if dispensed illegally.
We need not decide these thorny issues. We hold that even if the
Santos plurality’s more stringent reading of the statute governs in this
case, the appellants lose. Records introduced at trial demonstrate that
they were buying hydrocodone for considerably less than they were selling
it for. We view this in light of Justice Scalia’s discussion of how profits
could be proven:
The “proceeds of specified unlawful activity” are the proceeds from
the conduct sufficient to prove one predicate offense. Thus, to
establish the proceeds element under the “profits” interpretation,
the prosecution need only show that a single instance of specified
unlawful activity was profitable and gave rise to the money involved
in a charged transaction. . . . What counts is whether the receipts
from the charged unlawful act exceeded the costs fairly attributable
to it.45
In the instant case, the government introduced ample, unchallenged evidence
that the sales were profitable, even with overhead and supplies factored in as
“costs fairly attributable” to the sale. Much of the profits from these sales was
deposited into pharmacy bank accounts in cash, accounts from which the money
used in the charged transactions was drawn. Having provided evidence of this,
the government has sufficiently supported its case.46
45
Santos, at 128 S.Ct. at 2029.
46
Accord United States v. Poulsen, 568 F.Supp. 2d 885, 913-14 (S.D. Ohio 2008) (“Even
if ‘proceeds’ means ‘profits’ here, the transactions forming the basis for the Defendants’ money-
laundering convictions did indeed involve the ‘profits’ of their securities and wire fraud
24
No. 05-20997
The appellants point to other language from the plurality: “[A] criminal
who enters into a transaction paying the expenses of his illegal activity cannot
possibly violate the money-laundering statute, because by definition profits
consist of what remains after expenses are paid. Defraying an activity’s cost
with its receipts simply will not be covered.”47 Money laundering, that is, covers
the “removal of profits from criminal activity,” and not the “mere payment of
crime-related expenses.”48 But the money laundering here at issue does not
involve “mere payment”; rather, it clearly involves payments for more drugs
made out of accounts well-padded with the profits from the appellants’ criminal
enterprises.
The jury instructions below did not include a “profits” definition of
proceeds, and therefore may have been defective in this regard, but they were
not objected to below on these grounds and are therefore subject to plain error
analysis.49 “When a jury instruction omits or significantly misstates an essential
element of an offense, the error may be severe enough to meet the plain-error
standard.”50 In the case at hand, however, the error is nowhere near this
standard. As noted above, not even after Santos is the law “clear” on what the
prosecution should be required to prove as “proceeds” in this case; or, if profits
activities, not the gross receipts.”); Yusuf, 536 F.3d at 189 (“[W]e hold that unpaid taxes, which
are unlawfully disguised and retained by means of the filing of false tax returns through the
U.S. mail, constitute ‘proceeds’ of mail fraud for purposes of supporting a charge of federal
money laundering.”).
47
Id. at 2027.
48
Id. at 2026, 2028-29.
49
See FED. R. CIV. P. 30(d), 52(b).
50
United States v. Stone, 960 F.2d 426, 434 (5th Cir. 1992) (finding that a jury
instruction mistaken as to one element of the charged crime was not sufficient).
25
No. 05-20997
must be proved, how this must be done under these circumstances. And as we
have explained, the government clearly demonstrated the requisite profits in
this case; there was no “likelihood of a grave miscarriage of justice.”51
c. Promotion
Santos dealt with the “proceeds” element of money laundering, but the
money laundering promotion charge also includes a “promotion” element, which
requires distinct analysis. The appellants argue that because the money
laundering promotion charges (aside from the two counts already reversed
above) are supported by pharmacy orders to suppliers that include not only
hydrocodone but also pharmacy operating supplies such as band-aids, there is
insufficient evidence that the charged transactions were intended to promote
unlawful activity. Furthermore, they claim that there is no proven link between
the hydrocodone purchased in the charged transactions and the hydrocodone
they illegally distributed.
“In examining the question of intent necessary for a money laundering
promotion conviction, this court has held that the Government must present
either direct proof of an intent to promote such illegal activity, or proof that a
given type of transaction, on its face, indicates an intent to promote such illegal
activity.”52 This Circuit, careful not to allow the money laundering statute to
become a money spending statute, has noted that the “promotion” element of
money laundering promotion cannot be met simply by demonstrating that the
51
Id. (quoting United States v. Sellers, 926 F.2d 410, 417 (5th Cir. 1991)); Johnson v.
United States, 520 U.S. 461, 466-70 (1997).
52
United States v. Miles, 360 F.3d 472, 477 (5th Cir. 2004) (citing United States v.
Brown, 186 F.3d 661, 670-71 (5th Cir. 1999)).
26
No. 05-20997
unlawfully earned monies were used to promote the continued functioning of an
“otherwise legitimate business enterprise.”53 For instance, paying the bills
(payroll, rent, taxes) of a health care provider or a car dealership, even one
engaged in frequent acts of fraud, may not suffice to support the promotion
element. “The crime of money laundering promotion is aimed not at maintaining
the legitimate aspects of a business nor at proscribing all expenditures of ill-
gotten gains, but only at transactions which funnel ill-gotten gains directly back
into the criminal venture.”54
In the instant case, the government presented evidence of the appellants’
purchasing more of the same drugs they were illegally distributing. It is
logically possible that the hydrocodone purchased in the charged transactions
was all sold lawfully, with all the illegally sold hydrocodone obtained through
other purchases. We do not speak to other circumstances in which the
promotion element with regard to a pharmacy would require more proof. But in
the instant case it is perfectly clear that the government cannot and need not
trace every hydrocodone pill from distributor to dealer. The appellants were
illegally distributing staggering amounts of this highly addictive controlled
substance; their further purchases of that substance clearly promote their illegal
activity.
2. Money Laundering Concealment
53
Brown, 186 F.3d at 670.
54
Miles, 360 F.3d at 479.
27
No. 05-20997
Combs, Brown, Wiley, and Essett were also convicted of money laundering
concealment, in violation of 18 U.S.C. § 1956(a)(1)(B)(i).55 This crime too
requires the involvement of the “proceeds” discussed in the previous section, and
that analysis applies equally to these charges.
The concealment convictions also require the government to demonstrate
that the charged transactions be “designed . . . to conceal or disguise the nature,
the location, the source, the ownership, or the control” of the money involved.
This provision has been clarified by a recent Supreme Court decision, Cuellar v.
United States. 56 In Cuellar, the Supreme Court overturned an en banc decision
of this court.57 The Court first held that the “designed to conceal” element of this
statute does not require the government to prove that a defendant sought to
“create the appearance of legitimate wealth,” because in this provision of the
statute, “Congress used broad language that captures more than classic money
laundering.”58 However, the Court limited the statute’s breadth somewhat:
“[M]erely hiding funds during transportation is not sufficient to violate the
55
Which specifies penalties for: “(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 . . . .”
56
In the instant case, the relevant statutory provision criminalizes financial
transactions designed to conceal, whereas the part discussed in Cuellar criminalizes
transportation, transmission, or transfer to or through foreign lands designed to conceal. See
18 U.S.C. 1956(a)(2)(B)(i). But the Cuellar analysis applies with full force to the “designed to
conceal” element, which is identical in the two provisions.
57
Cuellar v. United States, 128 S.Ct. 1994 (2008) (overturning relevant portions of
United States v. Cuellar, 478 F.3d 282 (5th Cir. 2007)).
58
Cuellar, 128 S.Ct. at 2000.
28
No. 05-20997
statute, even if substantial efforts have been expended to conceal the money.”59
Under the facts of Cuellar, in which money was carefully hidden in order to
transport it over the United States-Mexico border, the Court held that no
evidence suggested the transportation was designed to conceal anything about
the money; the concealment, rather, served the goal of transporation. The
touchstone of the Cuellar Court’s construal of the statute is the “design” element.
The Court noted: “‘There is a difference between concealing something to
transport it, and transporting something to conceal it” . . . ; that is, how one
moves the money is distinct from why one moves the money. Evidence of the
former, standing alone, is not sufficient to prove the latter.”60
In the instant case, we apply the doctrine of Cuellar and hold that the
government’s evidence is sufficient to satisfy that standard.61 The very
arguments the appellants make in challenging their convictions on other counts
best demonstrate the reason that the concealment charges are valid. By their
59
Id. at 2003.
60
Id. at 2005 (quoting Cuellar, 478 F.3d at 296-97 (Smith, J., dissenting)).
61
Our interpretation of Cuellar accords with a number of courts that have already
interpreted it. See United States v. Warshak, 2008 WL 4059811, *2 (S.D. Ohio 2008) (finding
concealment evidence satisfied by proffered testimony that the charged transactions in effect
did conceal); United States v. Ness, 2008 WL 3842961 (S.D.N.Y. 2008) (finding concealment
element met); United States v. Spencer, 2008 WL 4104693 (D.Minn. 2008) (finding
concealment met by large cashier’s check made up of drug receipts, used as a home down
payment); United States v. Diaz, 2008 WL 4387209, *1 (S.D.N.Y. 2008) (“[T]he bank records
presented at trial permitted a reasonable jury to infer that one of Defendant’s purposes was
to conceal or disguise the nature, location, source, ownership, or control of narcotics proceeds.”);
United States v. Mercedes, 283 F. App’x 862, 864 (2d Cir. 2008) (“In contrast to Cuellar, the
evidence presented in this case indicated that the purpose of the attempted money transaction
was to conceal the sources of the narcotics proceeds.”); United States v. All Funds on Deposit
at Citigroup Smith Barney Account No. 600-00338 Held in the Name of Kobi Alexander, 2008
WL 3049895, *6 n. 6 (E.D.N.Y. 2008) (“Even straightforward transactions can violate § 1956;
the statute does not only criminalize the employment of convoluted methods to disguise one
of the listed attributes.”).
29
No. 05-20997
concealment contrivances, the defendants intended to and did make it more
difficult for the government to trace and demonstrate the nature of these funds.
While some aspects of “classic” money laundering are absent, many of them are
present. The transactions were in cash so that they were not easily tracked.
Most deposits were below ten thousand dollars so as to avoid setting off any
reporting requirements that might then lead to unwanted attention concerning
the funds’ nature. Some of this behavior could also be reached by the
“structuring” provisions of the money laundering statute, 18 U.S.C. §
1956(a)(1)(B)(ii), but the government charged concealment and has produced
sufficient evidence to support those charges.62
3. Money Laundering Spending
Wiley contends that his conviction for money laundering spending, under
18 U.S.C. § 1957, was insufficiently supported. His argument essentially is that
since there was insufficient evidence of the distribution and conspiracy counts
that represented the underlying criminal activity for the spending charges, there
must accordingly be insufficient evidence of spending ill-gotten gains. This
argument must fail, because the distribution and conspiracy convictions were
supported by ample evidence.
III. EVIDENTIARY CHALLENGES
A. Cullings Testimony
62
United States v. Stephenson, 183 F.3d 110 (2d Cir. 1999), cited by the appellants, is
inapposite. There the court held that a mere act of structuring could not support a
concealment conviction. In contrast to Stephenson, the many more numerous acts in the
instant case are more clearly designed to conceal the nature of the monies.
30
No. 05-20997
Texas Department of Public Safety Trooper Steve Cullings pulled over an
automobile driven by Charlie Johnson on July 29, 2003. Cullings determined
that Johnson was under the influence of drugs and arrested him. A search
incident to the arrest revealed unusual amounts of currency and white bags
filled with thirty-four bottles of promethazine with codeine and five bottles of
hydrocodone. Each bottle contained a label from Otufale’s pharmacy, Med-Stop
Pharmacy, and the labels also revealed that Herpin was the prescribing
physician. Most of the promethazine bottles were filled on the same day on
which Johnson was apprehended, July 29, 2003, and the hydrocodone bottles
were filled on July 3, 2003. None of the bottles bore Johnson’s name.
Over Otufale’s objection, the district court permitted Cullings to testify as
to this incident. Johnson did not testify, so there is no further evidence
connecting Johnson and his cargo to Otufale. Otufale argues that Cullings
should not have been allowed to testify because his testimony was not relevant
under FED. R. EVID. 402, and, alternatively, because under FED. R. EVID. 403,
any relevance is outweighed by prejudice to Otufale. The relevance argument
is that this evidence was not probative of Otufale’s knowledge, i.e., of whether
he was filling scripts knowing that they were not issued for a legitimate medical
purpose. The evidence, Otufale asserts, only reaffirms that there was not a
legitimate purpose, which no appellant ever challenged. He continues that
under Rule 403 balancing, even if the evidence was somehow relevant to
Otufale’s knowledge, the jury would be likely to confuse the issues of whether
there was a legitimate purpose with Otufale’s knowledge of legitimate purpose
and would thereby be incited to an irrational verdict.
The district court did not abuse its discretion by admitting the evidence.
Given the circumstances of this case and of the discovery of the evidence, this
31
No. 05-20997
was relevant circumstantial evidence as to the operations of an illegal conspiracy
that other evidence demonstrated Otufale’s knowledge of and involvement in.
The bottles, their labels, and the circumstances of their discovery speak to
Otufale’s prescription-filling practices, which were precisely at issue. Although
the relevance of this particular evidence is limited and there is some risk of
prejudice, under Rule 403 balancing the relevance outweighs the risk of
prejudice. By cross-examination, Otufale could undermine the weight of this
evidence based on the lack of proof of closer connection between himself and
Johnson. Otufale has not shown that the evidence should have been excluded
under Rule 402 or 403.
Finally, even if the lower court had abused its discretion in admitting this
evidence, the error is harmless, given the overwhelming evidence against
Otufale.
B. Peters Prescriptions
The prosecution elicited testimony at trial that the appellants filled not
only illegitimate Herpin prescriptions but similar prescriptions written by other
doctors, including Dr. Alonzo Peters. Combs argues that the district court
abused its discretion by admitting testimony from Sharon Boutte about filling
illegitimate prescriptions written by Dr. Peters and filled at Combs’ pharmacy.
Combs explains that this was uncharged conduct involving an unindicted
conspirator, and that it should have been excluded.
The indictment charged the defendants with conspiring with Herpin and
“others known and unknown,” and the government asserts that Peters and
others fell within the scope of the charged conspiracy. According to the
32
No. 05-20997
prosecution, illegitimate prescriptions filled for other, unnamed co-conspirator
doctors during the time-frame of the conspiracy are “inextricably intertwined”
with charged conduct (filling Herpin prescriptions), and therefore admissible.
At trial, while maintaining such evidence was intrinsic, the prosecution gave
notice according to FED. R. EVID. 404(b), to insure that it could in any case
introduce this and other evidence (for instance, prescriptions from outside the
time-frame of the conspiracy) as extrinsic but highly probative. The record does
not clearly establish whether the evidence was admitted as intrinsic or extrinsic,
so we look at both possibilities and find that either way there was no error.63
The challenged evidence has hallmarks of intrinsic evidence. “[E]vidence
[is] ‘intrinsic’ when the evidence of the other act and evidence of the crime
charged are ‘inextricably intertwined’ or both acts are part of a ‘single criminal
episode’ or the other acts were ‘necessary preliminaries’ to the crime charged.”64
This court has “held that, where a conspiracy is charged, acts that are not
alleged in the indictment may be admissible as part of the Government’s proof.”65
Testimony at trial suggested that a conversation with Peters, set up by a co-
conspirator pharmacist, helped set Herpin down her criminal path, and the
behavior of Peters and other non-indicted co-conspirators resembled Herpin’s.
Doctors shared know-how, wrote scripts for similar quantities of similar
controlled substances, and along with other players in this (admittedly loose)
conspiracy, profited handsomely. While in a sense they were competitors (in the
63
The government on appeal argues the evidence was all intrinsic, but the trial
transcript suggests that it may have been admitted as extrinsic.
64
United States v. Powers, 168 F.3d 741, 749 (5th Cir. 1999) (quoting United States v.
Williams, 900 F.2d 823, 825 (5th Cir. 1990)) (citations and internal quotations omitted).
65
Id.
33
No. 05-20997
same way that the co-conspirator pharmacists were competitors), in fact their
activities were mutually advantageous, as the behavior of each doctor expanded
operations for all by encouraging more dealers and pharmacists to get into the
business.
That said, the evidence is not as clearly or completely intertwined with the
central criminal conduct as in some other cases.66 The evidence might therefore
have been admitted as extrinsic evidence, as Rule 404(b) “other acts” evidence
probative of “intent, . . . plan, knowledge, . . . or absence of mistake or accident.”
The critical issue at trial was whether the appellants filled Herpin’s
prescriptions knowing they were illegitimate, and appellants’ experiences in
filling piles of similar false prescriptions from a different doctor would speak
directly to that issue.67
We hold that whether the court admitted the Peters evidence as intrinsic
or as extrinsic, the court did not abuse its discretion in doing so.
C. TPLR
66
See United States v. Maceo, 947 F.2d 1191, 1199 (5th Cir. 1991) ( finding evidence
that a conspirator received cocaine in lieu of legal fees intrinsic, explaining that “[t]he evidence
that Bauman personally used cocaine with others involved in this drug trafficking ring and
that he received cocaine as legal fees is clearly intertwined with the evidence necessary to
prove he knew about the drug trafficking conspiracy and knowingly participated in it.”)
67
In United States v. Henry, this court considered a pharmacist who filled bogus
prescriptions. On appeal, the pharmacist “complain[ed] that testimony concerning other
prescriptions than those charged in the indictment, written by one Dr. Thomas, were evidence
of extrinsic offenses, dissimilar to those charged, and highly prejudicial.” 727 F.2d 1373, 1377
(5th Cir. 1984), rev’d on other grounds by 749 F.2d 203 (5th Cir. 1984) (en banc). The evidence
was admitted under Rule 404(b), because the evidence went to intent, motive, and knowledge:
“The extrinsic evidence provides background information concerning Henry's practices in
dispensing Schedule II drugs to the same individual on a frequent basis in large quantities
under at least questionable circumstances as to legitimate medical needs, and, thus, shows
substantially identical acts. Thus, it is relevant and probative.” Id. at 1378.
34
No. 05-20997
Texas Pharmacy Laws and Regulations is a large volume of laws,
regulations, and other information, sent to every registered Texas pharmacy,
each of which is required to maintain a copy of it. The relevant portions of the
TPLR discuss the DEA’s concern about diversion of prescription drugs to illicit
uses, outline the responsibilities of pharmacists in helping to prevent this
diversion, and provide tips and guidance for spotting illegitimate prescriptions.
At trial, the government offered extensive testimony about the TPLR, had
witnesses read portions of it to the jury, and mentioned it during closing
arguments. It used the TPLR to bolster its case that the pharmacists were
either aware that many of the prescriptions they filled were illegitimate or
deliberately chose to be ignorant of this fact.
Wiley objected to the admission of the TPLR as irrelevant and as
representing hearsay, and now he appeals their admission. Additionally, in a
novel argument subject to plain error review, he argues that the government
worked a Due Process violation by transforming a violation of the regulations
and guidelines of the TPLR into a criminal offense.
Wiley claims that the prosecution used the TPLR to reshape the standards
for criminal liability and to argue that the pharmacists’ failure to comply with
those standards inevitably amounted to deliberate ignorance. He argues that
the resultant prejudice was magnified by jury instructions on deliberate
ignorance and on pharmacists’ “corresponding responsibility” not to fill
suspicious prescriptions. Wiley notes there was no evidence the appellants had
seen or read the book, and he argues that the government impermissibly used
the TPLR to establish a guilty state of mind although this was mere hearsay.
Wiley’s evidentiary arguments are without merit. The TPLR was a readily
available volume designed in part to help pharmacists fulfill their
35
No. 05-20997
responsibilities without falling afoul of the criminal law. It is hardly irrelevant
to establishing the appellants’ state of mind or the fact that they may have
turned a blind eye to the illegitimacy of the many false prescriptions they filled.
We conclude that the TPLR is probative of the appellants’ states of mind,
speaking to their claims that nothing about the circumstances aroused their
suspicions as to the illegitimate prescriptions. The book described factual
circumstances under which an honest pharmacist’s suspicions should be
aroused, and many of those circumstances were present in this case. While the
entire TPLR was not relevant on this point, the admission of the entire TPLR in
fact minimizes any prejudice, since the jury could clearly see that the
government was emphasizing individual parts of a much longer work that no
pharmacist should be expected to master completely. Wiley’s counsel remained
vigilant throughout the trial, and the court took care to address his concerns
throughout. Nor did the prosecution misuse the book; in fact, the trial transcript
shows that the prosecution assiduously avoided using the book to demonstrate
any inappropriate facts or states of mind.
Wiley’s Due Process argument is also without merit. He appeals to United
States v. Christo.68 In that case, the defendant was charged with criminal
misapplication of bank funds, but the indictment and trial evidence focused upon
violations of a civil regulatory banking statute that concerned extending credit
to bank officers. Christo argued “that an indictment may not charge nor the
government prove violations of a civil regulatory statute as the sole basis for
alleged criminal misapplications of bank funds.”69 This court agreed, finding
68
614 F.2d 486 (5th Cir. 1980).
69
Id. at 489.
36
No. 05-20997
that bootstrapping a criminal violation to a civil violation was plain error
requiring reversal.70 Wiley contends that essentially the same thing happened
here: The prosecution secured a criminal conviction by proving that the
pharmacists violated TPLR standards and the standards of the regulations that
it seeks to convey. The government counters that it both charged and proved a
violation of the appropriate criminal statutes, not merely the related
regulations.71 It contrasts the irreproachable, commonplace use of duly issued
regulations in clarifying the scope and contour of criminal laws with the
inappropriate replacement of criminal laws with civil regulations. The
government’s distinction is sound. Even in Christo itself, this court explained
that although subsequent criminal prosecutions should occur “unaided by any
prejudicial reference to violations of [the civil regulation],” “this should in no way
70
The court stated:
A conviction, resulting from the government’s attempt to bootstrap a series of
checking account overdrafts, a civil regulatory violation, into an equal amount
of misapplication felonies, cannot be allowed to stand. The government’s
evidence and argument concerning violations of § 375a impermissibly infected
the very purpose for which the trial was being conducted to determine whether
Christo willfully misapplied bank funds with an intent to injure and defraud the
bank, not whether Christo violated a regulatory statute prohibiting the bank
from extending him credit in excess of $5,000. The trial court’s instructions and
emphasis on § 375a served only to compound the error by improperly focusing
the jury’s attention to the prohibitions of § 375a.
Id. at 492.
71
This court’s unpublished opinion in United States v. Ogle , 201 F. App’x 979 (5th Cir.
2006), rejected a similar argument and aptly explains why the argument must fail. In Ogle,
a physician was prosecuted under § 841(a) for writing illegitimate prescriptions and argued
that the “indictment reflects an attempt to impermissibly ‘bootstrap’ a violation of 21 C.F.R.
§ 1306.04(a) [which defines when physicians or pharmacists have impermissibly distributed
controlled substances], which he characterizes as a civil regulation, into a criminal offense.”
Id. at 980. The court found the argument without merit, explaining that the regulation was
an interpretative regulation, not a civil regulation; the indictment only charged a violation of
§ 841(a), and physicians can be prosecuted for prescribing drugs outside of professional
practice.
37
No. 05-20997
preclude pertinent testimony . . . regarding the purposes and effects of
overdrafting in the banking industry. This evidence should remain highly
relevant on the issues of whether misapplication occurred as well as intent.”72
No Due Process violation was worked, and the district court did not abuse
its discretion in admitting the TPLR.
D. Excluded Business Records
Wiley and Essett challenge the district court’s refusal to admit certain
business records from their pharmacy’s computer system, maintained and
organized by a computer program called Etreby. The excluded exhibits
purported to represent data from the pharmacy records, broken down in such a
way as to demonstrate facts favorable to Wiley and Essett’s claims of innocence.
The exhibits were intended to show that Herpin prescriptions accounted for a
relatively small portion of I-10 East’s business, supporting Wiley and Essett’s
argument that they had no economic incentive to join the drug conspiracy. The
relatively small proportion of Herpin prescriptions also undercuts the inference
that they knew of the illegitimacy of the prescriptions.
Wiley and Essett tried to use the business records exception to the hearsay
rule, FED. R. EVID. 803(6), to introduce the exhibits. The exception requires that
either the custodian of the business records or “other qualified witness” lay a
foundation before the records are admitted. “There is no requirement that the
witness who lays the foundation be the author of the record or be able to
personally attest to its accuracy.”73 “A qualified witness is one who can explain
72
Christo, 614 F.2d at 492 & n.7.
73
United States v. Duncan, 919 F.2d 981, 986 (5th Cir. 1990).
38
No. 05-20997
the record keeping system of the organization and vouch that the requirements
of Rule 803(6) are met.”74
Each of Wiley and Essett’s efforts was met with objection by the
government, and the records were ultimately excluded. First, Wiley and Essett
sought to call an expert, Celious Barner, to lay a foundation for the records.
Barner knew the Etreby program well and had statistics training that allowed
him to parse and present the large amounts of data in the records clearly. The
government objected, arguing that Barner was not qualified to establish the
foundation, as he had never worked at I-10 East and first encountered the
relevant records in April 2005, long after they were compiled (from 2002 to
2004). The court sustained the objection. Then Wiley and Essett, themselves
unwilling to testify because of Fifth Amendment concerns, suggested that
Wiley’s mother, Dorcas, who had worked at the pharmacy, could lay the
foundation. The prosecution countered by warning that she too could have Fifth
Amendment concerns, as she was still under investigation and subject to
possible criminal indictment. Finally, Wiley and Essett attempted to use a
business records affidavit pursuant to FED. R. EVID. 902(11) to lay the
foundation, but the government objected to the affidavit as untimely.
Wiley and Essett argue that the court abused its discretion because Barner
was qualified to lay the necessary foundation, or alternatively, the district court
abused its discretion by not accepting the Rule 902(11) affidavit. Taking the
situation as a whole, they argue that the district court’s refusal to admit the
records violated their Sixth Amendment right to put on a defense. (The latter
objection was not made at trial and is subject to plain error review.)
74
United States v. Iredia, 866 F.2d 114, 120 (5th Cir. 1989).
39
No. 05-20997
The district court did not err in ruling that Barner was not qualified to lay
the foundation. Barner’s expertise in statistics and in the computer program
used did not give him any knowledge about I-10 East Pharmacy’s record keeping
practices. He knew about the pharmacy computer system, how to operate the
system, and how to extract information from it, but that is not knowledge about
the pharmacy’s record keeping. The Sixth Circuit case that the appellants seek
to rely on makes this point: “In order to be considered to be an ‘otherwise
qualified witness’ under Rule 803(6), ‘[a]ll that is required of the witness is that
he or she is familiar with the record keeping procedures of the organization.’”75
Amidst all of his unquestioned expertise, Barner lacked this necessary
familiarity.
Nor did the district court abuse its discretion in refusing to give effect to
the untimely offered affidavit. The notice requirements of Rule 902(11) are in
place precisely to ensure that evidence to be accompanied by an affidavit can be
vetted for objection or impeachment in advance. In this case, while the exhibits
in question were available in advance, the way in which the evidence was to be
introduced forms part of the necessary notice and understandably gave the
government pause at trial. The government quickly discovered a few small
discrepancies amidst vast numbers of pages in the proffered exhibits, and
accordingly, it objected to their being admitted as business records via an
untimely affidavit. Contrary to Wiley and Essett’s assertions, this goes not just
to weight but to admissibility, as the lower court determined.
It is true that the government introduced computer printouts of some of
Wiley and Essett’s records, but the government’s foundation cannot provide a
75
United States v. Jenkins, 345 F.3d 928, 936 (6th Cir. 2003).
40
No. 05-20997
foundation for Wiley and Essett. The government introduced copies of records
that happened to be found in Herpin’s office in the course of investigation and
that were used for narrow purposes, as opposed to being drawn after-the-fact
from pharmacy computers and presented as reliable records over a longer period.
Any inconsistency on this score does not rise to the level of abuse of discretion.
In the end, Wiley and Essett’s arguments do not allay the hearsay
concerns that underlie business records doctrine sufficiently for us to hold that
it was an abuse of discretion for the district court to refuse to admit their
records.
Wiley and Essett’s Sixth Amendment argument is also without merit.
Most of the relevant data in Wiley’s exhibits was admitted into evidence by the
government. As far as the presentation of evidence, our review of the proffered
exhibits does not begin to suggest that their presentation could have in any way
unsettled the clear impression that emerges from the evidence otherwise arrayed
against Wiley and Essett. Their ability to make their case was not impeded by
the trial court’s rightful exclusion of evidence that was not admissible under the
applicable rules.
IV. TRIAL PROCEEDINGS
A. Batson Challenge
“[I]t is a fixed part of our constitutional landscape that ‘[t]he use of
peremptory challenges to strike venire-persons based on their race violates the
equal protection component of the Due Process clause of the Fifth
41
No. 05-20997
Amendment.’”76 The appellants claim that the jury selection in their trial was
tainted or may have been tainted by a violation of this principle, notably
announced in Batson v. Kentucky.77 They ask that their convictions be
overturned or remanded to the district court for a hearing to determine whether
there was in fact a Batson violation.
The facts relevant to the Batson claim are as follows. During jury
selection, one black venire member was challenged for cause, a second was
excused by agreement of the parties, the government used a peremptory
challenge against a third (venireman 8), and one black venire member was
selected to sit on the jury. Defendants raised a Batson objection to the
government’s strike of venire member 8, and the court asked the government to
respond. The discussion continued:78
MR. BALBONI: As to number eight, specifically, he was struck
because he reported on his jury form—
...
MR. BALBONI: – his reported criminal arrest and conviction for
resisting arrest. Actually it’s a charge on there. We double-checked
it. He was in fact convicted for resisting arrest in 1978. He failed
to disclose on his jury questionnaire that he was also convicted of
assault in July of 1992. For both of those reasons, for one for failing
to – to divulge the first one, and for both reasons the Government
finds him unacceptable as a juror in this case.
...
THE COURT: You’re talking prima facie, you’re talking legitimate
reason. And now it’s pretext.
76
United States v. Williamson, 533 F.3d 269, 274 (5th Cir. 2008) (quoting United States
v. Montgomery, 210 F.3d 446, 453 (5th Cir. 2000)).
77
476 U.S. 79 (1986).
78
Mr. Balboni is the prosecutor; the rest are defense attorneys.
42
No. 05-20997
MR. WASHINGTON: Yes, sir. I don’t know whether it is in terms
of a pretext or not because I don’t have access to the information
that they used. I would hope that they checked on everyone and not
just on him, but the Government has access to computers to be able
to determine –
...
MR. WASHINGTON: My question to counsel through the Court is
whether he used the same process to run a criminal history on all 53
of the people.
...
THE COURT: Well, it says down here – just down here –
MR. WASHINGTON: Yeah, resisting arrest.
THE COURT: – was resisting arrest.
MR. BALBONI: That’s correct.
THE COURT: So, I’m not going to ask them if they ran a check on
everyone else. What I’m looking for is what I believe under the law
to be a legitimate reason for making their strike. And now, it goes
back to your side to show that it’s a pretext.
MR. JONES: Right. However, under the United States versus
Miller-El, the Court has indicated that there is probably another
prong to that test to see if, in fact, the Government has used the
same process for all other jurors.
...
THE COURT: Then again, the case of Purkett versus Elam is the
seminal case on what they have to show to make a strike; and that’s
what we’re looking at because that’s a direct inline [sic] with the
Batson challenge.
...
MR. WASHINGTON: Juror number 13 who is on the jury had a
DWI in 1991 . . . .
...
MR. WASHINGTON: So, if they didn’t strike both of them, then
that’s a pretext.
COURT: Wait a second. I’m not asking for a response.
MR. BALBONI: Yes, Your Honor.
MR. WASHINGTON: I’m looking to see if there are any others
there. It appears from the sheets, Your Honor, that that’s the only
other venire person, number 13, who is similarly situated to number
43
No. 05-20997
eight; and the Government did not exercise a peremptory challenge
as to that person actually being on the jury.
THE COURT: What other grounds do you have? What other – what
else do you want to bring to my attention?
MR. WASHINGTON: Well, if they didn’t run a criminal check as to
everybody, then they singled him out.
THE COURT: All you need – all you need is a valid non-
discriminatory reason for making the challenge; and he stated,
initially, what it is. They went one extra step. So, I’m not going to
inquire as to whether they did it to everyone else because that’s the
only one being questioned under the Batson, what is it, principle.
MR. WASHINGTON: Kathleen Rubalcaba, white female, suffers
from the same disability; and they did not exercise a challenge as to
her.
THE COURT: All right. Anything else?
MR. WASHINGTON: That’s it.
THE COURT: Overruled.
The court offered no further explanation of its ruling. Having preserved their
objection at voir dire, the appellants now renew it on appeal. “We review the
district court’s conclusion on whether the peremptory strikes were racially
motivated for clear error.”79
The touchstone of the Due Process right in question is “purposeful
discrimination,” as it was even before Batson.80 The focus is and was on the
subjective intentions of the attorney responsible for dismissing venire
members.81 But Batson and its progeny changed the proof required to
79
Williamson, 533 F.3d at 274 (quoting United States v. Williams, 264 F.3d 561, 571
(5th Cir. 2001)).
80
Batson, 476 U.S. at 90.
81
“[T]he ultimate inquiry for the judge is not whether counsel’s reason is suspect, or
weak, or irrational; but whether counsel is telling the truth in his or her assertion that the
challenge is not race-based.” Montgomery, 210 F.3d at 453 (quoting United States v. Bentley-
Smith, 2 F.3d 1368, 1375 (5th Cir. 1993)).
44
No. 05-20997
demonstrate, and the methods available to discover, this forbidden purpose.82
“Batson v. Kentucky establishes a three-pronged inquiry to determine whether
a peremptory challenge was based on race: First, a defendant must make a
prima facie showing that a peremptory challenge has been exercised on the basis
of race[; s]econd, if that showing has been made, the prosecution must offer a
race-neutral basis for striking the juror in question[; and t]hird, in light of the
parties’ submissions, the trial court must determine whether the defendant has
shown purposeful discrimination.”83 “Where, as here, the prosecutor tenders a
race-neutral explanation for his peremptory strikes, the question of Defendant’s
prima facie case is rendered moot and our review is limited to the second and
third steps of the Batson analysis.”84 These second and third steps “provide[] an
opportunity to the prosecutor to give the reason for striking the juror, and . . .
require[] the judge to assess the plausibility of that reason in light of all evidence
with a bearing on it.”85 In Miller-El v. Dretke, the decision of which was
announced just over two months before the beginning of trial in the instant case,
the Supreme Court made clear that the evidence to be considered by the court
includes, among other things, a “comparative juror analysis.”86 “If a prosecutor’s
proffered reason for striking a black panelist applies just as well to an otherwise-
82
See Miller-El v. Dretke, 545 U.S. 231, 267 (2005) (Breyer, J., concurring) (noting “the
difficulty of finding a legal test that will objectively measure the inherently subjective reasons
that underlie use of a peremptory challenge” and explaining that “Batson seeks to square this
circle”).
83
Williamson, 533 F.3d at 274 (quoting Montgomery, 210 F.3d at 453 and Snyder v.
Louisiana, 128 S. Ct. 1203, 1207 (2008) (internal citations omitted) (alterations in original)).
84
United States v. Williams, 264 F.3d 561, 571 (5th Cir. 2001).
85
Miller-El, 545 U.S. at 251-52.
86
Id. at 241.
45
No. 05-20997
similar nonblack who is permitted to serve, that is evidence tending to prove
purposeful discrimination to be considered at Batson’s third step.”87
The decision in the instant case turns on the contours of “comparative
juror analysis.” While the grounds on which the district court overruled the
Batson objection are not clear, there is some indication that both the prosecution
and the court failed to take the comparative features of two venire members into
account: the white venire member 13, who had a DUI conviction on record, and
black venire member 8, who had a resisting arrest conviction on record as well
as an assault conviction that he did not report on his juror questionnaire. Both
the court and the prosecutor seem to have believed that venire member 8's
resisting arrest conviction alone provided a sufficient basis for him to be struck,
and that his additional conviction and his lack of juror-form veracity were
merely icing on the cake.88 But since there were two venire members with
criminal records, and only the black member was struck, further explanation as
to any legitimate, non-racial distinction would seem necessary under Miller-El.
The appellants’ Batson claim nevertheless fails, because the prosecution
provided a second, legitimate reason. Venire member 8’s lack of veracity on his
juror form as to a second, more recent criminal conviction provides a clearly
legitimate reason for the exercise of a peremptory challenge. The appellants
seek to undermine this legitimate reason by inquiring as to whether the
prosecution searched for additional convictions that venire member 13 might
have left unreported. That is, they argue that the lower court should have forced
the prosecution to disclose whether its search was discriminatory, on the theory
87
Id.
88
This seems to be indicted by the court’s “[t]hey went one extra step,” and the
government’s “[f]or both of those reasons.”
46
No. 05-20997
that “if they didn’t run a criminal check as to everybody, then they singled [black
venire member 8] out” impermissibly. On the basis of Miller-El, they would have
us hold that, as defense attorney Mr. Jones stated it at trial, “the Court has
indicated that there is probably another prong to that test to see if, in fact, the
Government has used the same process for all other jurors.” Such a test would
add a “discriminatory investigation” prong to Batson. While Miller-El may
represent the current high water-mark in terms of evidence called for in Batson
inquiries, we see no indication that mark reaches this high. As we noted, the
Batson hearing is ultimately intended as a way of ferreting out discriminatory
intent in the exercise of peremptory strikes – but its reach is not unbounded.
For sound, practical reasons, Batson and its progeny limit the means available
for discovering intent. Under the facts of the instant case, we do not believe that
the court was obliged to subject the prosecutors to cross-examination or require
them to turn over documents related to their investigation of venire members.
Standing alone, mere allegations of discriminatory investigations or selective
criminal background checks do not require further inquiry from a district court.
Admittedly, this might operate to hinder a comparative juror analysis in
some cases. Although in the instant case the defense could have itself
investigated other venire members’ criminal records to insure that, even if the
government’s investigation were discriminatory, there were not any truly
comparable white venire members. In other cases, the government might, as it
has in other jurisdictions, rely on investigatory information as to struck
members that is only available to the government and would thus operate to
preclude any comparative juror analysis. This question is not squarely
47
No. 05-20997
presented in this case, and we decline to comment on it.89 In this case, the
existence of another juror who had lied about his or her criminal record could
have been uncovered by the defense. It was not, and we therefore affirm the
holding of the district court.
B. Deliberate Ignorance Instruction
Contrary to the appellants’ assertion, the district court’s “deliberate
ignorance” instruction was fully justified by the overwhelming circumstantial
evidence establishing the “proper factual basis” for that instruction: “The proper
factual basis is present if the records supports inferences that (1) the defendants
were subjectively aware of a high probability of the existence of illegal conduct,
89
Numerous cases present and discuss somewhat analogous circumstances. See, e.g.,
United States v. Roan Eagle, 867 F.2d 436 (8th Cir. 1989) (discussing appropriate extent of
Batson hearings); Ex parte Thomas, 601 So. 2d 56 (Ala. 1992) (reversing and remanding
because strike was allegedly based on information only available to government); Gray v.
State, 562 A.2d 1278, 1282 (Md. 1989) (discussing need for disclosure of reasons for strikes);
Brawner v. State, 872 So. 2d 1 (Miss. 2004) (“[W]e . . . depend on the trial courts . . . to ensure
that peremptory challenges based on information from outside sources is credible and
supported . . . .”); McFarland v. State, 707 So. 2d 166, 173 (Miss. 1997) (quoting Lockett v.
State, 517 So. 2d 1346, 1353 (Miss. 1987)) (“We decline to set any limits on the prosecutor’s use
of any legitimate informational source heretofore or hereafter available as to jurors.”); State
v. King, 546 S.E. 2d 575 (N.C. 2001) (refusing to overturn Batson determination based on
rumors of reasons for venire member’s father’s dismissal from police department); State v.
Hobley, 752 So.2d 771, 785 (La. 1999) (discussing Louisiana case law); Pye v. State, 505 S.E.
2d 4 (Ga. 1998) (approving strike based on community inquiry). Most directly on point is a
contested Wisconsin case that wound its way through state and federal courts, involving a
defendant with a common name and an arguably incomplete explanation from the government.
See State v. Lamon, 664 N.W. 2d 607, 635-39 (Wis. 2003) (Abrahamson, C.J., dissenting) (“The
heart of the Batson inquiry in this case, in my opinion, is the role that race played in the
prosecutor’s decision to seek out a police report for Bell and not for any other member of the
venire. Why was Bell not treated the same as other venire members?”); State v. Lamon, 646
N.W. 2d 854 (Wis. Ct. App. 2002) (affirming lower state court on Batson issue); Lamon v.
Deppisch, 2005 WL 2077337 (E.D. Wis. 2005) (denying federal habeas remedy and further
Batson hearing); Lamon v. Boatwright, 467 F.3d 1097 (7th Cir. 2006) (affirming denial of
habeas and Batson hearing, over a dissent).
48
No. 05-20997
or (2) the defendant purposefully contrived to avoid learning of the illegal
conduct.”90 It was therefore not given in error and is affirmed.
C. Corresponding Responsibility Instruction
The judge issued a jury instruction regarding the “corresponding
responsibility” of pharmacists to insure that substances are dispensed only for
legitimate medical purposes. The “corresponding responsibility” of pharmacists
derives from 21 C.F.R. § 1306.04, and the district court’s instruction largely
mirrors this regulation. This instruction does not, as appellants argue,
constructively amend the complaint. It clarifies the indictment’s charges to help
enable the jury to come to an accurate judgment. Giving this instruction was not
error.
D. Otufale’s Proposed Instructions
Otufale’s argument that the court’s failure to adopt his proposed jury
instructions is reversible error is offered in barely a page of his brief. The cases
and the portions of the record he cites do not support a finding that the lower
court abused its discretion in refusing his instructions.
E. Combs’s Motion to Dismiss Indictment
Combs argues that the indictment was constitutionally defective because
it is based in part on regulatory implementations of the statute. As he
recognizes, this argument is foreclosed by Fifth Circuit precedent. His attempt
90
United States v. Fuchs, 467 F.3d 889, 901-02 (5th Cir. 2006) (quoting United States
v. Freeman, 434 F.3d 369, 378 (5th Cir. 2005))). See also United States v. Bieganowski, 313
F.3d 263, 288-91 (5th Cir. 2002).
49
No. 05-20997
to overcome this foreclosure by reference to Gonzales v. Oregon91 is unavailing;
in fact, in that case, the Supreme Court relied in part on this and similar
regulations for its ruling, tacitly endorsing them as valid exercises of regulatory
power.
V. SENTENCING CHALLENGES
A. Conflict of Interest
On March 29, 2006, the day he was sentenced, after allocution but before
sentence was pronounced, Essett filed a pro se motion asking, under FED. R.
CRIM. P. 33, for a new trial. He alleged that his attorney had a conflict of
interest because he had represented Dr. Alonzo Peters, an unindicted co-
conspirator.92 The motion noted that Dr. Peters’ “prescriptions are being used
to enhance the defendant’s sentence on his PSR. This makes Dr. Peters an
adverse witness against Defendant Essett. Defendant Essett could not confront
the adverse witness Dr. Peters because they are represented by the same counsel
. . . .” Essett’s attorney neither confirmed nor denied that he represented Peters
during the sentencing hearing. Without further inquiry, the district court
91
546 U.S. 243 (2006).
92
In addition to supplying the written motion, he said: “And before I’m finished, I
would also like to submit a motion for ineffective assistance of counsel based on my attorney
having a disqualifying conflict of interest. My person represented me and Dr. Peters . . . My
attorney Mr. Jones. Me and Dr. Peters and is being used – Dr. Peters is being used as an
adverse witness against me. And I have a motion here I would like to file for the record.”
50
No. 05-20997
denied Essett’s motion for a new trial as untimely under Rule 33(b)(2), a ruling
that we affirm.93
On appeal, Essett seeks to construe the motion as a request for new
counsel at sentencing, or as notice of a conflict that should have triggered an
inquiry into the possible conflict by the court. He also advances a request for an
entirely new trial, or at least a remand for development of facts, on the basis of
ineffective assistance of counsel.
The latter claim must be denied because in this case as in most other
cases, the record is not sufficiently developed for this court to rule on the
inadequate assistance of counsel claim on direct appeal,94 and a remand is not
the appropriate remedy for Essett if there was a constitutional deficiency on this
score. If he can make out an inadequate assistance of counsel claim, Essett must
pursue it in a 28 U.S.C. § 2255 habeas corpus motion.
As to his other claim: he argues that the district court erred by not holding
a Garcia hearing immediately upon being informed of the alleged conflict,
instead of going on to pronounce sentence.95 Garcia hearings provide a means
for a court to vindicate a defendant’s constitutional right to counsel. “The Sixth
Amendment right to counsel includes the ‘right to representation that is free
93
Nor would an argument that this falls under Rule 33(b)(1) avail him. United States
v. Medina, 118 F.3d 371, 372 (5th Cir. 1997) (“In this circuit, a Rule 33 motion, filed more than
seven days after the verdict and premised on ‘newly discovered evidence,’ is an improper
vehicle for raising a claim of ineffective assistance of counsel.”).
94
See United States v. Rivas, 157 F.3d 364, 369 (5th Cir. 1998).
95
See United States v. Garcia, 517 F.2d 272, 278 (5th Cir.1975), abrogated on other
grounds by Flanagan v. United States, 465 U.S. 259, 263 & n. 2 (1984); FED. R. CRIM. P. 44(c).
51
No. 05-20997
from any conflict of interest.’”96 “If a defendant chooses to proceed with
representation by counsel who has a conflict of interest, a district court must
conduct what is commonly known as a ‘Garcia hearing’ to ensure a valid waiver
by the defendant of his Sixth Amendment right.”97 This court has explained that
the district court “remains under a continuing obligation during the course of
trial to remedy an actual conflict if it emerges.”98
Essett made his motion on the very day of sentencing, but he argues that
because this conflict was particularly relevant to his sentencing, a hearing was
warranted even this late in the process. Even assuming that the timing of
Essett’s notice would not have doomed it, and construing it as liberally as
possible since it was first made pro se, Essett’s argument founders on the facts.
Even if a court fails to hold a hearing, Essett must demonstrate an actual
conflict of interest to merit relief.99 “An actual conflict of interest exists if
counsel’s introduction of probative evidence or plausible arguments that would
significantly benefit one defendant would damage the defense of another
defendant whom the same counsel is representing.”100 The existence of an actual
conflict is far from clear (even assuming that Essett’s counsel did represent
Peters on such matters and at such times as could provide the foundation for an
actual conflict in this case). After all, five other defendants stood alongside
96
United States v. Garcia-Jasso, 472 F.3d 239, 243 (5th Cir. 2006) (quoting United
States v. Vaquero, 997 F.2d 78, 89 (5th Cir. 1993)).
97
Id.
98
United States v. Newell, 315 F.3d 510, 520 (5th Cir. 2002).
99
United States v. Salado, 339 F.3d 285, 291 (5th Cir. 2003).
100
Id. (quoting United States v. Rico, 51 F.3d 495, 509 (5th Cir. 1995)).
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No. 05-20997
Essett; none of their lawyers suffered under a conflict, yet none called Peters to
the stand or challenged the PSR evidence concerning Peters in any materially
different way than did Essett’s counsel. Although Essett vehemently asserts
that his counsel’s interests must have been conflicted, he offers no concrete
explanation of the actual conflict. No doubt the possibility of a conflict existed,
but we take note only of actual conflicts, and the record is devoid of a showing
necessary to unseat either Essett’s conviction or sentence, or even sufficient
allegations to convince us that a remand for an after-the-fact hearing is
necessary.101
B. Upward Departures
The appellants challenge their sentences on a number of grounds, many
raised for the first time on appeal and therefore subject to plain error analysis.
The upward departures of their sentences do not, as they allege, violate the
United States Constitution’s provision for Separation of Powers, nor were they
improper on any other ground raised on appeal. In light of the crimes for which
they were convicted, the evidence produced at his trial, and the reasons stated
by the district judge for his sentence, we affirm their sentences as to all but the
reversed counts, 28 and 32.
101
See Garcia-Jasso, 472 F.3d at 243-44 (finding insufficient evidence of an actual
conflict and holding that the district court did not err by not holding a Garcia hearing). United
States v. Infante, 404 F.3d 376, 393 (5th Cir. 2005) (determining that a conflict of interest
existed but remanding on issue of whether “conflict of interest adversely affected his
performance” at trial); Salado, 339 F.3d at 292 (5th Cir. 2003) (holding that the defendant
adequately alleged a conflict but the court could not determine if there was in fact an actual
conflict and whether the conflict adversely affected the lawyer’s performance, and thus
remanding for “after-the fact” Rule 44(c) hearing).
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No. 05-20997
C. Criminal Forfeiture
Although the lower court’s order of forfeiture must be adjusted as
necessary to reflect the two reversed counts, appellants have failed to show any
other error in this order.
VI. ADOPTION, WAIVER, AND PRESERVATION
Our review of the record reveals that the district court appears at several
points to have made statements indicating that defendants would be
automatically deemed to have joined their co-defendants’ objections.102 This
expedited the trial but may have misled counsel into thinking they did not need
to preserve certain objections individually. For instance, several defendants
appear not to have timely renewed their motions for judgment of acquittal,
which would mean our review on sufficiency would be only for manifest
miscarriage of justice.103 Such failures raise significant waiver and preservation
complications on appeal, and they represent alternative grounds for affirmance
on many claims. Mercifully, we need not delve into the details of these problems,
102
See, for instance, on November 28, 2005:
THE COURT: Without objection, everybody adopts each others’ objections and
comments to the Court. I assume that’s clear.
Or on September 27, 2005:
THE COURT: Everybody joins in each other’s objections unless otherwise noted.
Okay?
Or on August 9, 2005:
MR. GLADDEN: Your honor, just for clarification of the record, since we’re kind
of starting over, you earlier ruled that all defendants could join in, basically,
defense motions. I just wanted to put that in the record.
THE COURT: Absolutely.
MR. COGDELL: We don’t need to opt in on each one?
THE COURT: No, you do not. You do not.
103
See United States v. Salazar, 542 F.3d 139, 142-43 (5th Cir. 2008).
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No. 05-20997
because our holdings as to the merits of the claims presented above allow us to
assume that all appellants properly raised all issues, since the arguments were,
with two small exceptions, rejected.
We note as well that some appellants seek to adopt the arguments on
appeal advanced by their co-appellants and by their original co-defendant Isaac
Achobe, whose case is before another panel of this court, in United States v.
Achobe, No. 06-20229. Adoption of co-appellants’ arguments is not without
limits,104 but again, we need not rule as to the success of this venture, because
Achobe’s claims are equally without merit, as to any issues relevant to any
appellants in the instant case.
VII. EFFECT OF REVERSED COUNTS
We reverse the convictions of Brown and Combs for counts 28 and 32. We
remand the case to the district court for any further sentencing proceedings
made necessary by the judgment of this court.
VIII. CONCLUSION
For the reasons stated above, we AFFIRM as to all convictions but those
related to counts 28 and 32, which are REVERSED. The sentences and any
monetary penalties affected by those counts are VACATED and REMANDED
to the district court for appropriate adjustments consistent with this opinion.
104
FED. R. APP. P. 28(i); United States v. Harris, 932 F.2d 1529, 1533-34 (5th Cir. 1991).
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