Petition for Writ of Certiorari — Alerre v. United States (No. 05-1250)

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General under this subchapter to

manufacture, distribute, or dispense

controlled substances or list I chemicals are

_ authorized to possess, manufacture,

distribute, or dispense such substances or

chemicals (including any such activity in

the conduct of research) to the extent

authorized by their registration and in

conformity with the other provisions of this

subchapter.

"(c) Exceptions

"The following persons shall not be

required to register and may lawfully

possess any controlled substance or list I

chemical under this subchapter:

"(1) An agent or employee of any

registered manufacturer, distributor, or

dispenser of any controlled substance or list

I chemical if such agent or employee is

acting in the usual course of his business or

employment.

"(2) A common or contract carrier or

warehouseman, or an employee thereof,

whose possession of the controlled

substance or list I chemical is in the usual

course of his business or employment.

"(3) An ultimate user who possesses such

substance for a purpose specified in section

802(25) of this title.

"(d) Waiver

“The Attorney General may, by

regulation, waive the requirement for

registration of certain manufacturers,

distributor’, or dispensers if he finds it

consistent with the public health and

safety.

"(e) Separate registration

"A separate registration shall be required

at each principal place of business or

professional practice where the applicant

manufactures, distributes, or dispenses

controlled substances or list I chemicals."

"(f) Inspection

“The Attorney General is authorized to

inspect the establishment of a registrant or

applicant for registration in accordance

with the rules and regulations promulgated

by him."

STATEMENT OF THE CASE

A. Trial in the District of South Carolina

This is a criminal case arising out of the District of

South Carolina. The district court had jurisdiction

pursuant to 18 U.S.C. §3231.

Petitioners worked as physicians at the

Comprehensive Care and Pain Management Center ("the

Center") in Myrtle Beach, South Carolina. Based on

allegations that the Center was a "pill mill" (that is, that

the medical practice was a sham and the physicians

simply sold prescriptions), petitioners were charged with

unlawful distribution of controlled substances, conspiracy

to unlawfully distribute controlled substances, and

conspiracy to launder money (the physicians' salaries) to

promote the operation.

# Evidence of a crime

Dr. David Woodward established the Center as a

neurology and sleep disorder clinic. Over time; Dr.

Woodward began prescribing narcotics aggressively.

Eventually, Dr. Woodward began selling prescriptions

through the Center with no medical pretense. However,

Dr. Woodward continued to conduct sham examinations

and order other tests, both to conceal the unlawful drug

distribution and to collect additional money from

insurers. mane

Following a DEA investigation, the Government

indicted eleven employees of the Center, including nine

physicians, for crimes including illegal drug distribution,

conspiracy to illegally distribute drugs, conspiracy to

launder money, money laundering, and health care fraud.

Six of the physicians entered into plea agreements with

the Government and pleaded guilty to criminal activity.

One of those physicians committed suicide after his plea;

the other five testified at petitioners’ trial. Petitioners

tried their cases to a jury in a consolidated trial. The

question at trial was whether petitioners participated in

Dr. Woodward's scheme.

The court of appeals summarized Dr. Woodward's

testimony as follows:

"According to Dr. Woodward's

testimony, CCPMC was simply a front for

an illegal prescription-selling operation and

a health-care-fraud scheme. * * *.

"Dr. Woodward hired Dr. Jackson in

February 1998, and hired Dr. Bordeaux two

years later, in February 2000. The

evidence revealed that Bordeaux and

Jackson, along with other CCPMC

physicians, developed a practice known as

‘fast tracking,’ which they used to expedite

the issuance of illegitimate prescriptions

for controlled substances. Under the fast-

tracking practice, a CCPMC physician

would enter an examination room where

five or six patients waited, sign

prescriptions for each, and promptly exit

without asking any medical questions or

performing any medical examinations.

“After Drs. Bordcaux and Jackson

left CCPMC in the summer of 2000, Dr.

Woodward hired Dr. Alerre. According to

Woodward, he needed Alerre to 'shadow'

him and issue prescriptions because

Woodward's license to prescribe controlled

substances had been suspended by the

DEA. Woodward further testified that

Alerre understood his role before he

accepted a position with CCPMC. When

Alerre began his work at CCPMC, he would

- accompany Woodward while superficial

patient examinations were conducted. At

the conclusion of such examinations, Alerre

would issue illegitimate prescriptions to the

patients.

"ok ok K OK

"Importantly, Dr. Woodward also

testified that he confronted each defendant

and inquired whether they understood the

illicit nature of CCPMC's activities. The

defendants assured Woodward that they

were willing to participate in CCPMC's

overall scheme. Woodward approached Dr.

Jackson, asked if he was ‘able to do this,'

and Jackson assured him 'I got your back.’

In answering a similar inquiry, Dr.

Bordeaux replied ‘if I go along with this and

do this, can I have your father's pickup

truck?’ When Woodward asked Dr. Alerre

if he was comfortable with 'what we were

doing,’ Alerre paused and responded ‘[olh, :

to hell with it.' Woodward understood

Alerre's response to confirm that Alerre

was 'part of our team’; that is, Alerre was

agreeing to join in Woodward's illicit

operations."

United States v. Alerre, 430 F.3d 681, 684-86 (CA4 2005);

Pet. App. 5a-8a (internal footnotes and citations to record

omitted).

Dr. Bordeaux worked at the Center for three

months, Dr. Alerre worked at the Center for eight

months, and Dr. Jackson worked at the Center for two

years.

2. Evidence of no "legitimate medical

purpose"

The Government also presented expert testimony

regarding petitioners' medical practices that it claimed

proved petitioners’ guilt. On the second day of an 11-day

trial, the issue of “legitimate medical purpose" arose. The

Government argued that "part of the charge is, if

medicine is prescribed * * * for other than legitimate

medical purposes." J.A. 282.’ When the district court

asked if that was part of the statute, the Government

answered: "Yes, sir, that is an issue, it's part of the

statute." From that point on, the Government's

presentation of evidence and legal arguments to the jury

focused on the Government's interpretation that a lack of

a "legitimate medical purpose" proved the crime.

For example, on the third day of trial the

Government elicited evidence that certain prescriptions

were not "medically necessary." J.A. 359-60. When the

district court questioned whether medical necessity

proved whether a prescription was issued outside the

course of professional practice, the Government

answered:

"Prosecutor: [The expert witnesses]

‘References to the Joint Appendix (J.A.) in this petition

refer to the Joint Appendix filed in the Fourth Circuit.

are going to say [the defendants] did not

follow the proper procedure. * * *. They

are allowed to write these prescriptions if

they are medically necessary. If it's not

medically necessary —

“The Court: Does the statute say

medically necessary? -

"Prosecutor: Yes, sir. We tracked

the statute in the indictment. If it's

medically necessary, they haven't done

anything wrong. If it's not medically

necessary, they are drug dealing. So that's

a huge issue, Your Honor. It could be the

whole issue."

J.A. 361-62.

The prosecutor subsequently called an expert

witness who testified in accordance with the

Government's view on legitimate medical purposes. The

witness testified for two days, reviewing medical charts of

the Center's patients and offering an opinion based on

"the quality of care." J.A. 900. The Government's expert

witness understood “outside the course of professional

practice" to mean not "legitimate medical practice," which

he defined on one occasion as "the dosages that a prudent

physician in the state of South Carolina would give, as

what we call the standard of care" (J.A. 815-16, emphasis

added), and on another occasion as "a case wherein an

understanding exists between the physician and the

patient to provide the best possible medical services, and

that those prescriptions and services be based upon a

documented logical disease process, which requires that

medication" (J.A. 818, emphasis added). Based on that

understanding of "legitimate medical purpose," the

witness offered two days of expert testimony that

petitioners' actions were "outside the scope of professional

practice" and thus criminal, based on his conclusion that

petitioners’ practices deviated from the civil standard of

care or were not the "best possible" services and therefore

did not have a "legitimate medical purpose" as he defined

that term. See J.A. 726-76, 789-970 (Dr. Jordan's expert

testimony).

Similarly, petitioners’ trial attorneys defended

their cases as though the quality of medical practices

controlled. Petitioners' defense attorneys focused on

guidelines for treatment and dosing, standards of

practice, and the quality of petitioners’ treatment

practices. See, e.g., J.A. 830-97, 898-927, 937-59 (cross-

examination of Government's expert witness by

petitioners’ defense attorneys, illustrating focus on

adequacy of medical practices). Petitioners’ defense

attorneys did not frame the evidence or their legal

arguments to emphasize that petitioners were guilty of

unlawful drug distribution only if they abandoned their

roles as physicians and acted as drug dealers; rather, the

defense attorneys tried the case on the adequacy of

petitioners' medical practices.

At the conclusion of the trial, petitioners were

convicted of unlawful drug distribution (in three counts

against Dr. Bordeaux, seven counts against Dr. Alerre,

and five counts against Dr. Jackson), conspiracy to

unlawfully distribute controlled substances, and

conspiracy to launder money.

B. Origin of the "legitimate medical purpose"

interpretation of 21 U.S.C. §841(a)

As detailed above, the Government argued that

the regulatory language "legitimate medical purpose"

equated with the statutory language "outside the course

of professional practice." The Government defined a

"legitimate medical purpose” not in terms of conventional

drug dealing, but in terms related to the adequacy,

propriety, or necessity of the medical practices employed.

Therefore, the Government argued, "the whole issue"

under the statute could be resolved by whether the

prescription was issued "for other than legitimate medical

purposes.” E.g., J.A. 282, 362.

Similar arguments have been made in drug

prosecutions against physicians across the country, as

discussed later in this petition. The origin of the

interpretation underlying that argument, and its

recurrence in prosecutions in different circuits

throughout the country, may be explained by the

Department of Justice's publication of a single national

source document

In 2002, as petitioners were indicted and trial

preparation was conducted in this case, DOJ published on

its website a Quick Reference Card intended to "serve as

a basic guide to prosecuting prescription drug diversion

cases." Quick Reference Card, J.A. 1300, Pet. App. 38a-

50a. The Quick Reference Card cites 21 C.F.R. §1306.04

for the legitimate medical purpose rule, then provides:

"Any individual practitioner who issues or fills a

prescription knowing that the prescription was not issued

for a legitimate medical purpose in the usual course of

professional treatment (or for legitimate and authorized

research), shall be subject to penalties provided for

violations of the controlled substances law." Pet. App.

41a. Having thus defined the crime to include a

"legitimate medical purpose" element, the Quick

Reference Card further defines that element as follows:

"What is a legitimate medical purpose?

“A physician is acting with a legitimate

medical purpose when he or she prescribes

medical treatments that are in strict

compliance with well-established and

generally accepted medical guidelines,

and administers medical treatments

that appropriately and correctly

address and relieve the present

medical condition."

Pet. App. 42a (bold print in original).’

By this logic, the Government interprets 21 U.S.C.

"The Quick Reference Card has been removed from

DOJ's website.

§841(a) to include its interpretation of the language

"legitimate medical purpose" in 21 C.F.R. §1306.04, and

thus to criminalize any deviation from "strict compliance

with well-established and generally accepted medical

guidelines."®

C. Appeal in the Fourth Circuit Court of

Appeals

Petitioners appealed, arguing that prosecutorial

misconduct and ineffective assistance of counsel--each

committed when the prosecutor and the defense attorneys

applied the Government's interpretation of 21 C.F.R.

§1306.04, instead of the statutory language, as the

criminal standard--denied them a fair trial. Petitioners

argued that, in fact, unlawful drug distribution under 21

U.S.C. §841(a) does not have a legitimate medical

purpose element. Petitioners likened the Government's

interpretation to criminalizing malpractice and argued

that the Government committed prosecutorial misconduct

under Berger v. United States, 295 U.S. 78 (1935)*, by

improperly casting malpractice as a crime throughout the

trial. Petitioners further argued that their defense

attorneys were ineffective for failing to identify and object

to the Government's erroneous interpretation and for

improperly defending them under that interpretation.°

*In South Carolina, where petitioners were licensed to

practice medicine, malpractice is defined as a deviation from

“recognized and generally accepted standards, practices, and

procedures” in the physician's field of medicine. Gooding v. St.

Francis Xavier Hosp., 326 S.C. 248, 254, 487 S.E.2d 596 (1997).

“Berger was overruled on other grounds by Stirone v.

United States, 361 U.S. 212 (1960).

‘That is, petitioners’ defense attorneys accepted the

Government's interpretation of 21 U.S.C. §841(a) and framed

their evidence and arguments to defend against the claims of

The Government responded that unlawful drug

distribution does criminalize malpractice, and properly

so. In the Government's view, "[t]he ‘course of

professional practice’ element corresponds generally to

the standard of care in civil malpractice actions."

Appellee's Brief 15, 26. That is so, the Government

argued, because "[t)he regulatory term ‘legitimate

medical purpose’ and the statutory term ‘course of

professional practice’ are virtually identical." Appellee's

Brief 22-23. The Government reasoned that physicians

are protected against the risk of a criminal conviction

based on a civil standard of liability by the requirement

that criminal cases be proved beyond a reasonable doubt.

Appellee's Brief 15, 27. That is, according to the

Government, when malpractice by a prescribing

physician is proved beyond a reasonable doubt, it is

criminal drug dealing.

The court of appeals affirmed petitioners'

convictions.® The court held that, because there was

sufficient evidence of a crime and the district court

properly instructed the jury on the elements of the crime,

petitioners’ challenge to the parties' conduct at trial "does

not pass muster." 430 F.3d at 691 (Pet. App. 22a). The

court "decline[d] to reach and address the defendants'

deficient medical practices. Petitioners’ defense attorneys never

argued to the jury that it should acquit unless it found that

petitioners had abandoned the practice of medicine in favor of

drug dealing; instead, petitioners' defense attorneys argued that

the jury should acquit if it found that petitioners adhered to the

general standards of medical practice. However, the jury did

not need to find so much to acquit petitioners of drug dealing.

The defense attorneys defended only against the allegations of

malpractice (1.e., deviating from the standard of care); they were

ineffective in failing to present a defense against the actual

crime of drug dealing.

°The court remanded for resentencing in light of United

States v. Booker, 543 U.S. 220 (2005).

ineffective assistance claims, and * * * reject{ed] their

prosecutorial misconduct claims on the merits." Id. at

692 (Pet. App. 24a).

The court of appeals denied petitioners’ petition

for rehearing or rehearing en banc. Pet. App. 34a-35a..

REASONS FOR GRANTING THE PETITION

This case presents an important question of

federal law that has not been, but should be, settled by

this court. As explained below, the issues have national

significance and national implications. The issue is

unlikely to be resolved by the circuit courts. The question

is deserving of an answer from this Court.

I. The Government is enforcing an invalid

interpretation of 21 U.S.C. §841(a), based on

its interpretation of 21 C.F.R. §1306.04, in

prosecutions of physicians.

A. The Government interprets 21 U.S.C.

§841(a) to include deviations from

generally accepted medical practices

(i.e., malpractice).

This case is a counterpart to Gonzales v. Oregon,

546 U.S. _, 126 S.Ct. 904 (2006).’ Like Gonzales, it

involves the interplay between the Controlled Substances

Act ("CSA") and 21 C.F.R. §1306.04(a) (the "legitimate

medical purpose regulation" or "the regulation"), and like

Gonzales, its resolution requires "interpreting a federal

statute to determine whether Executive action is

authorized by, or otherwise consistent with, the

enactment." 126S.Ct. at 911. Here, however, the

problem arises in a different context.

Where Gonzales involved the Attorney General's

’Petitioners' counsel also served as counsel of record for

the physician and the pharmacist in Gonzales v. Oregon.

15°

Interpretive Rule, which interpreted the regulation to

criminalize physician-assisted suicide, here the Executive

action at issue is the Department of Justice's

interpretation of the regulation, which purports to

criminalize malpractice by defining the crime of unlawful

drug distribution as a violation of the civil standard of

care. Gonzales involved a federal rule; here the

interpretation serves as a guide to the prosecution of

individual cases nationwide.

Where Gonzales had a clean and simple factual

context--the state of Oregon authorized physicians to

prescribe controlled substances to assist a terminal

patient in hastening his or her death, and the Attorney

General issued a Rule declaring such action a crime--in

this case, and others like it, the factual context is more

complex. In these cases, the physicians are accused of

unlawful drug distribution, which Congress has defined

as a crime, and there is some evidence of the activity

Congress sought to criminalize. (Here, for example, Dr.

Woodward testified that the Center was a sham and that

the Center's physicians, including petitioners, sold

prescriptions with no pretense of medical practice.)

However, the prosecutor and, in many cases, the defense

attorneys, do not force the jury to judge that evidence.

Rather, the parties present a substantial amount of

evidence on the quality of the physician's medical

practices, and tell the jury that the physician may be

found guilty of the crime if his or her medical practices

did not conform to the standard of care.’ That, however,

is not the activity that Congress criminalized. The result

is a general verdict of guilt that does not identify whether

the jury found that the physician was a drug dealer or

‘In this case, for example, the Government's expert

witness so informed the jury in plain terms. The expert

testified that "outside the course of professional practice" meant

without a “legitimate medical purpose," which in turn meant

that the physician did not conform to the "standard of care”

applicable in civil actions.

that the physician committed malpractice.

Despite the Government's argument that either is

acceptable, the latter is not. Congress did not criminalize

malpractice. The Department of Justice did not have the

authority to criminalize malpractice, as it attempted to do

through the interpretation published in the Quick

Reference Card and applied in this and other

prosecutions. Petitioners' verdicts cannot stand.

However, because there is some evidence of a crime, the

court of appeals let the verdict stand, despite the

Government's reliance on its "legitimate medical purpose"

theory of conviction. An announcement from this Court,

enforcing only Congress' definition of drug dealing, is

required to afford petitioners and other similarly situated

physicians a fair trial on the charge of unlawful drug

distribution.

B. Evolution of reliance on the phrase

“legitimate medical purpose"

The CSA was enacted by Congress in 1970 "with

the main objectives of combating drug abuse and

controlling the legitimate and illegitimate traffic in

controlled substances." Gonzales v. Oregon, 126 S.Ct. at

911, citing Gonzales v. Raich, 545 U.S. __, 125 S.Ct. 2195,

2203 (2005). Congress, through the CSA, "regulates

medical practice insofar as it bars doctors from using

their prescription-writing powers as a means to engage in

illicit drug dealing and trafficking as conventionally _

understood. Beyond this, however, the statute manifests

no intent to regulate the practice of medicine generally."

Gonzales v. Oregon, 126 S.Ct. at 923.

In United States v. Moore, 423 U.S. 122 (1975),

this Court considered whether a physician is per se

exempted from prosecution under 21 U.S.C. §841(a)

because of his status as a registrant. Jd. at 131. The

Court answered no: "only the lawful acts of registrants

are exempted." Jd. The Court explained that the

legislative history of the CSA revealed that a violation of

the CSA "was intended to turn on whether the

‘transaction’ falls within or without legitimate channels.”

Id. at 135. The Court observed that "severe criminal

penalties' were imposed on those, like [Moore], who sold

drugs, not for legitimate purposes, but ‘primarily for the

profits to be derived therefrom.” Id., quoting

H.R.Rep.No.91-1444, p. 10, U.S.Code Cong. &

Admin.News 1970, p. 4569. Therefore, a physician may

prescribe drugs:"only to act 'as a physician." Id. at 141.

Where, as in Moore, the physician "acted as a large-scale

‘pusher' not as a physician," criminal liability follows. Id.

at 143.

Moore is often cited for its holding that the CSA

prohibits a physician from acting as a drug pusher. See,

e.g., Gonzales v. Oregon, 126 S.Ct. at 922 ("It comes as

little surprise, then, that we have not considered the

extent to which the CSA regulates medical practice

beyond prohibiting a doctor from acting as a drug 'pusher'

instead of a physician. Moore, 423 U.S., at 143." Moore

also engendered, however, reliance on the phrase

"legitimate purposes."

In United States v. Daniel, 3 F.3d 775 (CA4 1993),

a physician was indicted for attempting to violate 21

U.S.C. §841(a). The indictment recited that the physician

"did knowingly and intentionally unlawfully attempt to

dispense or distribute a quantity of a Schedule II

Controlled Substance * * *; said attempt not being for a

legitimate medical purpose." Jd .at 777-78. The

defendant challenged the indictment, arguing that it

failed to charge three essential elements: "(1) action

outside the usual course of medical practice, (2) action not

in good faith and proper accordance with a standard of

medical practice generally recognized and accepted in the

United States, and (3) action by a practicing physician."

Id. at 778.

The Fourth Circuit rejected the challenge to the

indictment. The court of appeals noted that registered

physicians may dispense controlled substances "to the

extent authorized by their registration and in conformity

with the other provisions of this subchapter." Jd., quoting

21 U.S.C. §822(b). The court observed: "In United States

uv. Moore, the Supreme Court limited this authority to

distributions and dispensations in the lawful course of

approved professional practice." Jd. (citation omitted).

The court held:

"As we interpret the statute, its

elements are (1) a knowing or intentional

attempt to distribute or dispense (2) a

substance known to be controlled (3) in a

way not authorized by this subchapter. All

{defendant's} complaints relate to the third

element recited. With respect to

physicians, demonstrating that element

requires proof that the charged conduct

falls outside the boundaries of the

registrant's professional practice. Moore,

423 U.S. at 140, 96 S.Ct. at 344. The

indictment's allegations that the attempted

distributions or dispensations were 'not ...

for a legitimate medical purpose' satisfy

that requirement. No more is necessary.

The first two of [defendant's] 'missing

elements’ simply repeat this requirement in

other, less concise, terms. The third, that

Daniel was a physician, need not be proven

by the government. On the contrary, it is

the source of the requirement that the

government show a lack of legitimate

medical purpose at all. Accordingly, we

find the indictment sufficient."

Id. (emphasis added). Thus, the court held that “not for

a legitimate medical purpose" was a more precise way of

saying “outside the course of professional practice." As

demonstrated below, however, substituting another

phrase for the statutory language did not lead to more

precision, but rather led the courts and prosecutors alike

away from Congress’ intent.

In United States v. Tran Trong Cuong, 18 F.3d

1132 (CA4 1994), the defendant argued that the district

court and the prosecution had used a medical malpractice

standard rather than the criminal standard to judge his

actions. Jd. at 1137. The court of appeals acknowledged

that-the two standards were confused at times, citing — -

references to what "a reasonably prudent physician would

do" and to the "standard of care of a family practitioner."

Id. The court stated:

"A criminal prosecution requires more--that

is, proof beyond a reasonable doubt that the

doctor was acting outside the bounds of

professivnal medical practice, as his

authority to prescribe controlled substances

was being used not for treatment of a

patient, but for the purpose of assisting

another in the maintenance of a drug habit

or of dispensing controlled substances for

other than a legitimate medical purpose,

i.e. the personal profit of the physician."

Id. Thus, the court of appeals defined the criminal

element "outside the course of professional practice" as

“assisting another in the maintenance of a drug habit" or

“dispensing controlled substances for other than a

legitimate medical purpose." /d.

The court of appeals noted that the district court

had instructed the jury on the "third element, no

legitimate medical purpose." Jd. The court of appeals

held that the jury was properly instructed:

"The instructions given the jury

include a satisfactory definition of the

actions of a physician which are outside the

course of professional medical practice.

The standard used by the court ‘without a

legitimate medical purpose’ does appear to

be more strict than that required by Moore

and therefore was to defendant's benefit."

Id. at 1138.

The following year, in United States v. Singh, 54

F.3d 1182 (CA4 1995), the Fourth Circuit quoted Tran

Trong Cuong with approval for the proposition that,

"$841(a) was violated when the doctor's 'authority to

prescribe controlled substances was being used not for

treatment of a patient, but for the purpose of assisting

another in the maintenance of a drug habit or of

dispensing controlled substances for other than a

legitimate medical purpose." Singh, 54 F.3d at 1188-89,

quoting Tran Trong Cuong, 18 F.3d at 1137.

Recently, in United States v. Hitzig, 63 Fed.Appx.

83 (CA4 2003) (unpublished), the Fourth Circuit held that

the Government may prove that a physician unlawfully

distributed drugs by establishing either that the

physician's actions were not for a legitimate medical

purpose, or that they were beyond the bounds of

professional medical practice. Jd. at 86, citing Singh,

Tran Trong Cuong, and Daniel.

These cases demonstrate that the Fourth Circuit

has permitted the substitution of the phrase "not for a

legitimate medical purpose" for the element “outside the

course of professional practice," reasoning that the former

is more precise or offers more protection to the defendant

than the statutory language.

The reliance on a "legitimate medical purpose" in

drug prosecutions of physicians in not unique to the

Fourth Circuit. See, e.g., United States v. Nelson, 383

F.3d 1227, 1231-32 (CA10 2004) ("A practitioner has

unlawfully distributed a controlled substance if she

prescribes the substance either outside the usual course

of medical practice or without a legitimate medical

purpose"; citing Moore and 21 C.F.R. §1306.04, "the

governing regulation"); United States v. Pedrick, 181 F.3d

1264, 1268 n 8(CA11 1999) ("Under 21 U.S.C. §841(a)(1)

and 21 C.F.R. §1306.04, it is illegal for a practitioner * * *

to issue a prescription for a controlled substance without

a legitimate medical purpose and outside the usual

course of his professional practice"); United States v.

Ekinci, 101 F.3d 838 (CA2 1996) (characterizing crime

under 21 U.S.C. §841(a) as distributing controlled

substances "without a legitimate medical purpose" and

upholding conviction based on indictment and jury

instructions phrased in those terms, with no challenge to

or discussion of variance from statutory language);

United States v. Kirk, 584 F.2d 773, 784 (CA6 1978), cert.

denied, 439 U.S. 1048 (stating: "It has been held that

there is no difference in the meanings of the statutory

phrase, 'In the usual course of professional practice" and

the regulations’ phrase, ‘legitimate medical purpose,"

citing United States v. Plesons, 560 F.2d 890, 897 (CA8

1977), cert. denied, 434 U.S. 966, and United States v.

Rosenberg, 515 F.2d 190, 197 (CA9 1975), cert. denied,

423 U.S. 1031; and subsequently quoting 21 U.S.C.

§841(a)(1) and 21 C.F.R. §1306.04(a) in support).

However, the Government's interpretation of a

"legitimate medical purpose," as applied in this case, as

defined in the Quick Reference Card, and as applied in

other pending cases (discussed below), does not have the

same meaning as the statutory language and does not

work to the defendant-physician's benefit. To the

contrary, the Government's interpretation lowers the

Government's burden of proof.

Under the Government's interpretation, a

physician acts without a legitimate medical purpose when

he or she acts without "proper procedures" and "medical

necessity" (as defined by the Government in this case) or

without "strict compliance with well-established and

generally accepted medical guidelines" (as defined by the

Government in the Quick Reference Card). Notably,

neither of those definitions even proves civil malpractice,

which does not require strict compliance with the

standard of care or medical necessity. More importantly,

neither of those definitions proves a crime under 21

U.S.C. §841(a).°

“There is a distinction to be made between the

Government's argument that a deviation from proper

procedures or generally accepted medical guidelines proves the

crime, and case law recognizing that deviations from general

Yet the Government defends its interpretation,

even as it acknowledges that its interpretation works to

criminalize malpractice, by asserting that a verdict on

that ground is proper so long as it is found beyond a

reasonable doubt. Appellee's Brief 15, 22-23, 26-27.

As defined by Congress and as interpreted by this

Court in Moore, 21 U.S.C. §841(a) criminalizes a

physician's distribution of controlled substances when the

physician ceases to “act 'as a physician" and acts instead

as a drug "pusher." Moore, 423 U.S. at 141, 143. Under

the Government's interpretation, however, the

Government does not need to prove that the physician

ceased to act as a physician; the Government only needs

to prove that the physician acted as a bad, or civilly

negligent, physician. But that interpretation runs

counter to Congress’ intent to "conquer drug abuse and to

control the legitimate and illegitimate traffic in controlled

substances." Raich, 125 S.Ct. at 2203. It is the

physician's specific action of ceasing to act as a physician,

instead acting as a drug seller or trafficker, that defines

the crime.

Therefore, the Government's interpretation of

“legitimate medical purpose" does not conform to the

statutory language or purpose, and permits conviction on

insufficient proof of a crime. However, because court of

appeals case law has incorporated the "legitimate medical

purpose" language into the statute, the Government has

succeeded in enforcing its definition of the crime.

This Government action is not consistent with the

CSA. As this Court recognized in Gonzales v. Oregon,

medical practices may establish that the defendant ceased to act

as a physician and instead acted as a mere drug seller, which

proves the crime. Where the jury concludes that the defendant

ceased to act as a physician and acted as a mere drug seller, a

guilty verdict for a drug crime is proper and supportable.

Where the jury concludes only that the physician failed to follow

general standards of practice, such finding is insufficient to

support a conviction for a drug crime.

Congress did not delegate to the Attorney General (or to

DOJ) the authority to define what is criminal under the

CSA. 126 S.Ct. at 918. The regulation does not change

the statutory language, or what the statute means. The

Government's enforcement of its interpretation of

"legitimate medical purpose" to criminalize malpractice is

invalid.

In sum, the question in this case is whether the

Government's action in applying its interpretation of the

legitimate medical purpose regulation in the trials of

registered physicians is consistent with the CSA and

affords a fair trial on the charge of unlawful drug

distribution. The answer is no.

Il, The error is pervasive and widespread.

As noted above, the error in supplanting the test

for criminality with the civil standard of care is systemic,

and may be traced to the Department of Justice's Quick

Reference Card. Petitioners are aware of several cases in

which the prosecution of a physician for unlawful drug

distribution focused on alleged deficiencies in the

physician's medical practices, with the argument that

medical practices that did not comply with generally

accepted practices evidenced an absence of legitimate

medical purpose, which proved the crime. The following

cases, in which petitioners’ counsel consulted or served as

counsel and challenged the Government's action in so

arguing, are illustrative.

In United States v. Bernard Rottschaefer, Third

Circuit Court of Appeals Case Nos. 04-4015 and 05-1229,

the Government responded to the physician's challenge

on appeal by asserting that Dr. Rottschaefer had

“completely ignoreld] the ‘legitimate medical purpose'

element of the offense." U.S. v. Rottschaefer, Appellee's

Brief 35. The Government relied on the regulation (21

C.F.R. §1306.04) to argue that the crime of unlawful drug

distribution under 21 U.S.C. §841(a) could be proved by

lack of a legitimate medical purpose:

"When the CSA went into effect, the

DEA's predecessor issued regulations to

implement the Act. One of those

regulations requires that a prescription

‘must be issued for a legitimate medical

purpose by an individual practitioner

acting in the usual course of his

professional practice.’ 21 C.F.R.

§1306.04(a) (emphasis added). A

prescription that is not issued for a

legitimate medical purpose is simply not a

‘prescription’ under the Act. If issued

knowingly, such a prescription will subject

the practitioner ‘to the penalties provided

for violations of law relating to controlled

substances.’ Jd. As the Supreme Court

stated in United States v. Moore, this

legitimate medical purpose requirement is —

implicit in various provisions of the CSA,

but it is made explicit. by the DEA

regulation, 21 C.F.R. §1306.04(a). United

States v. Moore, 423 U.S. 122, 137-39 &

n.13 (1975)."

U.S. v. Rottschaefer, Appellee's Brief 33-34 (emphasis in

original). The Government cited United States v. Norris,

780 F.2d 1207, 1209 (CA5 1986), United States v. Polan,

970 F.2d 1280, 1282 (CA3 1992), United States v. Vamos,

797 *.2d 1146, 1151-53 (CA2 1986), and United States v.

Nelson, 383 F.3d 1227, 1230-33 (CA10 2004), in support

of its argument that the third element of the crime is a

“legitimate medical purpose element."

Rottschaefer was argued March 3, 2006, and is

currently under advisement in the Third Circuit.

In United States v. Feingold, Ninth Circuit Court

of Appeals Case No. 05-10037, the defendant-physician

challenged the Government's reliance on "legitimate

medical purposes" and attendant arguments that

deficient medical practices proved unlawful drug

distribution. The Government responded that the

physician misrepresented the holding of Moore:

"Contrary to defendant's argument,

however, the Court did not proceed * * * to

determine that the phrase ‘outside the

course of professional practice,’ for

purposes of a conviction under the CSA,

specifically means ‘for intentional diversion

to illegitimate channels."

U.S. v. Feingold, Appellee's Brief 24. Rather, the

Government argued, the physician is subject to a

"legitimate medical purpose" requirement to avoid

criminal liability, because the Ninth Circuit's "reading of

* * * Moore suggests that the ‘usual course’ standard

itself imports considerations of medical legitimacy and

accepted medical standards." U.S. v. Feingold, Appellee's

Brief 25, quoting United States v. Boettjer, 569 F.2d 1078,

1081 (CA9 1978).

Feingold is sheduled for oral argument on April 4,

2006, before the Ninth Circuit Court of Appeals.

In United States v. McIver, Fourth Circuit Court of

Appeals Case No. 05-4884, the Government not only

argued the case to say that a deviation from generally

accepted medical practices proved the crime, it convinced

the district court to instruct the jury on that theory. On

the Government's request, the court instructed the jury:

"In determining the defendant's —

whether the defendant's conduct was

within the bounds of professional practice

you should, subject to the instructions I

give you concerning the credibility of

experts and other witnesses, consider the

testimony you have heard relating to what

has been characterized during the trial as

the norms of professional practice.

“You should also consider the extent

to which, if at all, any violation of

professional norms you find to have been

committed by the defendant interfered with

his treatment of his patients and

contributed to an over prescription and/or

excessive dispensation of controlled

substances. You should consider the

defendant's actions as a whole and the

circumstances surrounding them.”

U.S. v. McIver, Appellant's Brief 30, citing J.A. 1243-44.

The Government responded that the instruction was

proper, relying heavily on the Fourth Circuit's opinion in

petitioners' case. Appellee's Brief 20-23, citing U.S. v.

Alerre, 430 F.3d 681 (CA4 2005).

Briefing was completed in McIver on February 28,

2006. Oral argument has not yet been scheduled.

In United States v. Williams, Eleventh Circuit

Court of Appeals Case No. 04-15117G, the physician

raised the same arguments, practically verbatim, as those _

raised in the Fourth Circuit in this case (after

consultation with petitioners’ counsel and giving due

credit) in his appellant's brief. Williams was argued

January 31, 2006, and is currently under advisement in

the Eleventh Circuit Court of Appeals.

Ill. The error is unlikely to be corrected by the

circuit courts.

In this case, the court of appeals did not address

the legality of the Government interpreting 21 U.S.C.

§841(a) to include a "legitimate medical purpose" element

and applying that interpretation in its prosecution of

physicians such as petitioner. That is, the Fourth Circuit

did not squarely address whether the Government or

petitioners’ trial counsel improperly tried the case.

Rather, the court found no reversible error, owing to a

legal presumption that prevents the court from looking

beyond the jury instructions.

The court acknowledged that "[t]lo be sure, an

undue emphasis on standard-of-care evidence might, in

certain circumstances, confuse a jury." United States v.

Alerre, 430 F.3d at 691 n 10 (Pet. App. 22a). However,

the court held:

"The jury entered its deliberations armed

with ample admissible evidence and with

proper instructions on the applicable legal

principles. The defendants’ assertions that

their lawyers were confused at trial is

insufficient to rebut the presumption that

the jury used those tools properly. *“"'

"FN11. Even if the defendants could

show error with respect to their

standard-of-proof assertions, it

would be difficult to conclude that

they were thereby prejudiced.

Indeed, Dr. Woodward's testimony

alone was sufficient to convict the

defendants, and it was supported by

other evidence. And in light of its

verdict, we-assume that the jury

credited Woodward's testimony. See

United States v. Hughes, 401 F.3d

540, 544-45 (4th Cir 2005)."

Id. at 692 (Pet. App. 23a-24a). The court thus "decline{d]

to reach and address the defendants’ ineffective

assistance claims, and * * * reject[ed] their prosecutorial

misconduct claims on the merits." Jd. (Pet. App. 24a).

The court presumed that the jury followed the

district court's instructions and relied upon the proper

evidence to convict. That legal presumption obviated the

need to further analyze the prosecutor's and the defense

attorneys’ reliance on the wrong legal standard. Without

that legal presumption, reversal would have been

warranted, because when a jury is presented with two

theories of conviction, one of which is legally infirm, and

the verdict does not reveal the theory on which the jury

relied, the conviction cannot stand. Yates v. United

States, 354 U.S. 298, 312 (1957), overruled on othen

grounds by Burks v. U.S., 437 U.S. 1 (1978) ("In these

circumstances we think the proper rule to be applied is

that which requires a verdict to be set aside in cases

where the verdict is supportable on one ground, but not

on another, and it is impossible to tell which ground the

jury selected.") (citations omitted). The Sixth

Amendment does not permit an appellate court to sit in

the place of the jury and to presume a verdict which the

jury did not find. As stated in Sullivan v. Louisiana, 508

U.S. 275 (1993):

"The inquiry, in other words, is not

whether, in a trial that occurred without

the error, a guilty verdict would surely

have been rendered, but whether the guilty

verdict actually rendered in this trial was

surely unattributable to the error. That

must be so, because to hypothesize a guilty

verdict that was never in fact rendered--no

matter how inescapable the findings to

support that verdict might be--would

violate the jury-trial guarantee."

Id. at 279 (emphasis in original).

Consequently, the question whether the

Government strikes a “foul blow" or uses "improper

methods calculated to produce a wrongful conviction"’® by

arguing that 21 U.S.C. §841(a) criminalizes a physician's

conduct in the absence of a "legitimate medical purpose"

is unlikely to be resolved by the circuit courts. The circuit

courts will continue to apply "the almost invariable

assumption of the law that jurors follow their

instructions,"'’ and the substantive question will continue

Berger, 295 USS. at 88.

"Richardson v. Marsh, 481 U.S. 200, 206-07 (1987)

(citing examples of the "many varying contexts" in which the

assumption is applied).

to evade meaningful review.

IV. Summary

In short, the Government used the regulation to

establish a new definition of the crime of unlawful drug

distribution. That it could not do. Gonzales, 126 S.Ct. at

918. Nevertheless, both the prosecution and the defense

tried petitioners' case under that erroneous definition.

Physicians throughout the country have been similarly

tried under the erroneous Government definition. The

error is entrenched.

Because petitioners and other physicians face

prosecutions and criminal drug distribution convictions

that may rest on substandard medical practices, review is

warranted. This case presents the Court an opportunity

to announce that a criminal conviction cannot be had

based on substandard medical practices claimed to violate

the regulation and thus the CSA.

‘i CONCLUSION

Petitioners respectfully urge this Court to grant

the petition for a writ of certiorari.

Respectfully submitted,

ELI D. STUTSMAN

Counsel of Record

MONICA L. FINCH

621 SW Morrison Street

Thirteenth Floor

Portland, OR 97205-3816

(503) 274-4048

March 28, 2006

APPENDIX

TABLE OF CONTENTS

Page

Appendix A (court of appeals opinion,

ioe Teemwer 1, BOO) ok oc i ieescs la

Appendix B (court of appeals order denying rehearing,

filed December 38, 2006) .... 2... ccc cece 34a

Appendix C (court of appeals judgment remanding

to District Court, filed December 1, 2005) ... 36a

Appendix D (Quick Reference Card 2002) ........ 38a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

United States of America,

Plaintiff-Appellee,

Vv. No. 03-4207

Ricardo U. Alerre,

Defendant-Appellant.

United States of America,

Plaintiff-Appellee,

Vv. No. 03-4212

Deborah Bordeaux,

Defendant-Appellant.

United States of America,

Plaintiff-Appellee,

Vv. No. 04-4161

Michael D. Jackson,

Defendant-Appellant.

Appeals from the United States District Court

for the District of South Carolina, at Florence.

C. Weston Houck, Senior District Judge.

(CR-02-673)

Argued: September 20, 2005

Decided: December 1, 2005

Before MICHAEL, MOTZ, and KING, Circuit Judges.

United States v. Alerre

Affirmed in part, vacated in part, and remanded by

published opinion. Judge King wrote the opinion, in

which Judge Michael and Judge Motz joined.

COUNSEL

ARGUED: Eli D. Stutsman, Portland, Oregon, for

Appellants. Thomas Ernest Booth, UNITED STATES

DEPARTMENT OF JUSTICE, Washington, D.C., for

Appellee. ON BRIEF: G. Wells Dickson, Jr., Charleston,

South Carolina, for Appellant Deborah Bordeaux; Lionel

S. Lofton, Charleston, South Carolina, for Appellant

Ricardo U. Alerre; David Bruce Betts, Columbia, South

Carolina, for Appellant Michael D. Jackson. Jonathan S.

Gasser, Acting United States Attorney, William E. Day,

II, Assistant United States Attorney, OFFICE OF THE

UNITED STATES ATTORNEY, Columbia, South

Carolina, for Appellee. =~

OPINION

KING, Circuit Judge:

Appellants Ricardo U. Alerre, Deborah S.

Bordeaux, and Michael D. Jackson (the “defendants”)

challenge the various convictions and sentences imposed

on them in the District of South Carolina. The defendants

— medical doctors — seek a new trial on drug distribution,

drug conspiracy, and money-laundering conspiracy

charges levied against them by the grand jury. The

multiple charges in their indictment arise from an alleged

prescription-selling operation and a health-care-fraud

scheme carried out during a four-year period in the

Myrtle Beach area of South Carolina. The defendants

contend on appeal that, in their 2003 trial, their lawyers

were constitutionally ineffective and the prosecutors

engaged in prejudicial misconduct. They also maintain

that the trial evidence was insufficient to support their

money-laundering conspiracy convictions. Finally, the

defendants challenge their sentences on the basis of the

Supreme Court’s recent decision in United States v.

Booker, and the prosecutors have confessed error on that

point. As explained below, we affirm the defendants’

convictions, vacate their sentences, and remand for

resentencing.

The Government prosecuted the defendants — who

were medical doctors licensed in South Carolina and

registered with the Drug Enforcement Administration

(the “DEA”) — for their involvement with the

Comprehensive Care and Pain Management Center

(“CCPMC”), in Myrtle Beach. During the relevant period

(1997 to 2001), CCPMC was owned and operated by Dr.

David Woodward. On August 29, 2002, the grand jury

charged the defendants, along with Woodward and four

others, in a ninety-three count indictment. J.A. 83-110.’

The defendants were each charged with conspiracy to

distribute controlled substances, in contravention of 21

U.S.C. § 846 (the “drug conspiracy charge”) (Count 1);

conspiracy to commit money laundering, in violation of 18

U.S.C. § 1956(h) (the “laundering conspiracy charge”)

(Count 93); and multiple counts of distributing controlled

substances, in violation of 21 U.S.C. § 841(a)(1) (the

“distribution charges”). More specifically, of the forty-two

distribution charges in the indictment, Dr. Jackson was

charged with five counts of distributing OxyContin, Oxy

IR, and Percocet (Counts 9 through 13); Dr. Bordeaux

with four counts of distributing OxyContin and Oxy IR

* Our citations to “J.A. _” refer to the contents of the Joint

Appendix filed by the parties in these appeals.

(Counts 30 through 33); and Dr. Alerre with eight counts

of distributing OxyContin (Counts 34 through 41).?

The defendants’ jury trial was conducted in

Florence, South Carolina, from January 27 to February

10, 2003. The jury heard the testimony of fifty-four

witnesses, thirty of whom were called by the

Government. The most important prosecution witness

was Dr. Woodward, who had earlier pleaded guilty under

a plea agreement and was cooperating with the United

States Attorney.

According to Dr. Woodward's testimony, CCPMC

was simply a front for an illegal prescription-selling

operation and a health-care-fraud scheme. Woodward

explained how he had developed a plan to conceal

CCPMC’s illegal activities from the law enforcement and

medical authorities. In carrying out his activities, he had

directed CCPMC physicians to conduct superficial

physical examinations of CCPMC patients that served no

? OxyContin, Oxy IR, and Percocet are brand names for

drugs containing oxycodone, a Schedule II controllea

substance. See 21 C.F.R. § 1308.12(b){1 )(15). Schedule IT

controlled substances have three defining characteristics:

(A) “a high potential for abuse”; (B) “a currently accepted

medical use in treatment. . . or a currently accepted

medical use with severe restrictions”; and (C) a possibility

that abuse “may lead to severe psychological or physical

dependence.” 21 U.S.C. § 812(b)(2).

medical purpose and were intended only to make the

issuance of prescriptions look like the practice of

medicine. Tr. 790.’ In so doing, Dr. Woodward developed

a medical record template with boilerplate diagnoses that

could be loaded into patients’ charts and used to deceive

insurance companies and investigators. Tr. 792. Patients

were given various diagnostic tests to justify insurance

billings, and CCPMC physicians systematically requested

outside radiologists to “over read” magnetic resonance

imaging pictures in order to justify specific prescriptions.

Tr. 798-99. If a patient was insured, the CCPMC doctors

would order additional unnecessary tests and scans. Tr.

799.* The revenue from such tests and scans constituted

about half of CCPMC’s income, with the other half being

derived from the superficial patient examinations and the

issuance of illegitimate prescriptions. Jd.

In his testimony, Dr. Woodward acknowledged

that fifteen to twenty percent of CCPMC’s patients had

legitimate medical problems, but asserted that all

3 Because the Joint Appendix does not contain portions of

the trial record relied upon by the Government, we refer

to the pertinent parts of the trial transcript, omitted from

the Joint Appendix, as "Tr..."

* The indictment did not charge the defendants with any

substantive offenses related to health care fraud. One of

the three unlawful activities specified in the laundering

conspiracy charge, however, included the submission of

false claims to health care benefit programs, in

contravention of 18 U.S.C. § 1347.

patients were “treated the same” — i.e., “[t]hey all

received the narcotic medication” — without regard to

medical necessity. Tr. 887. The testimony of former

CCPMC employees and patients corroborated

Woodward's evidence.

Dr. Woodward hired Dr. Jackson in February

1998, and hired Dr. Bordeaux two years later, in

February 2000. The evidence revealed that Bordeaux and

Jackson, along with other CCPMC physicians, developed

a practice known as “fast tracking,” which they used to

expedite the issuance of illegitimate prescriptions for

controlled substances. Tr. 399-400. Under the

fast-tracking practice, a CCPMC physician would enter

an examination room where five or six patients waited,

sign prescriptions for each, and promptly exit without

_ asking any medical questions or performing any medical

examinations. Id.

After Drs. Bordeaux and Jackson left CCPMC in

the summer of 2000, Dr. Woodward hired Dr. Alerre.

According to Woodward, he needed Alerre to “shadow”

him and issue prescriptions because Woodward's license

to prescribe controlled substances had been suspended by

the DEA. Tr. 818. Woodward further testified that Alerre

understood his role before he accepted a position with

CCPMC. Id. When Alerre began his work at CCPMC, he

would accompany Woodward while superficial patient

examinations were conducted. Tr. 819. At the conclusion

of such examinations, Alerre would issue illegitimate

prescriptions to the patients. Tr. 820.

Donald Shafer, a former CCPMC patient, testified

that, on his first visit to CCPMC, Drs. Alerre and

LONE ONE ARTE CRN

Woodward took him to an examination room, searched

him to determine if he was wired, and asked if he was

working as an undercover agent. J.A. 581-82. Once

satisfied that Shafer was not working for the authorities,

Woodward and Alerre asked Shafer if he wanted a

prescription for OxyContin or a drug called Lorcet. J.A.

584.

Importantly, Dr. Woodward also testified that he

confronted each defendant and inquired whether they

understood the illicit nature of CCPMC’s activities. The

defendants assured Woodward that they were willing to

participate in CCPMC's overall scheme. Woodward

approached Dr. Jackson, asked if he was “able to do this,”

and Jackson assured him “I got your back.” Tr. 792. In

answering a similar inquiry, Dr. Bordeaux replied “if I go

along with this and do this, can I have your father’s

pickup truck?” Tr. 815. When Woodward asked Dr. Alerre

if he was comfortable with “what we were doing,” Alerre

paused and responded “[ojh, to hell with it.” Tr. 823.

Woodward understood Alerre’s response to confirm that

Alerre was “part of our team”; that is, Alerre was

agreeing to join in Woodward’s illicit operations. Jd.

The prosecution’s expert witness, Dr. Arthur

Jordan, testified that the defendants systematically wrote

prescriptions that “were not issued for a legitimate

medical purpose.” J.A. 819. Based on his review of

eighty-eight randomly selected patient charts, Jordan

opined that the defendants had failed to adhere to

generally accepted medical standards. See J.A. 757,

789-813. Specifically, Jordan testified that many of the

prescriptions lacked appropriate documentation or had no

“follow up” treatment, that the defendants ignored “red

flags” indicative of drug abuse, and that certain

prescriptions and dosages were inappropriate. See J.A.

789-813.

Dr. Jordan then testified that the defendants had

issued prescriptions that were “totally away from and

inconsistent with the dosages that a prudent physician in

the state of South Carolina would give, as what we call

the standard of care.” J.A. 815. When the court, sua

sponte, expressed concern that such evidence might be

improper, a defense lawyer stated that he was waiting for

Jordan to finish his answer. J.A. 816. The court then

observed there was “no reason to put something in the

record which the jury may [consider] . . . that is not the

standard.” Jd. The court concluded, in the presence of the

jury, that “[w]hether the doctors are negligen/(t] or not,

whether they were guilty of malpractice, is not an issue

in this case.” Jd.

The prosecution presented other evidence that the

defendants’ prescription practices constituted

“illegitimate medicine,” and that their practices

_ consistently failed to meet the ordinary “standard of

care.” Though the defense lawyers did not object to such

evidence, the court expressed its concern that

standard-of-care evidence might be irrelevant and

confusing, in that it appeared to relate to civil negligence

issues and not necessarily to whether the defendants had

contravened the applicable criminal statutes. The

prosecutors, as well as the defense lawyers, repeatedly

assured the court that such evidence was relevant and

appropriate.

After the prosecution rested its case-in-chief, the

defendants presented their own evidence. Dr. Alerre

testified personally and called eight other witnesses to

testify. Alerre asserted that he had only prescribed

medicine to patients he believed to be in pain, and he

denied having agreed to participate in CCPMC’s illegal

activities. Dr. Jackson testified that he had always

prescribed medicine in good faith, and he called a

corroborating witness. Dr. Bordeaux did not testify, but

called thirteen witnesses of her own.

At the close of trial, the court instructed the jury

without objection. The instructions included the elements

of the various offenses charged, the legal propriety of a

physician's actions concerning prescriptions, and the

availability of a good faith defense on the distribution and

drug conspiracy charges. Tr. 2393; J.A. 1297-99. In

particular, the court instructed the jury that it could not

convict on the distribution and drug conspiracy charges if

it found only that the defendants' practices fell “below

that line of what a reasonable physician would have

done.” J.A. 1299.° The instructions were that, in order to

°More specifically, on the standard of care issue, the

instructions provided by the trial court were as follows:

There has been some mention. . . of the standard of care.

I'm not so sure the word| |] malpractice ha[s] not been

used. Those words relate to civil actions. When you see a

doctor, as a patient, that doctor must treat you in a way

10a

convict on the distribution and drug conspiracy charges,

the jury was obliged to find beyond a reasonable doubt

that the defendants were selling drugs, or conspiring to

do so, and not practicing medicine. Id. By its verdict, the

jury found each defendant guilty as charged, except that

Dr. Alerre was found not guilty on one distribution

charge (Count 37) and the Government dismissed a

distribution charge against Dr. Bordeaux (Count 33).

The laundering conspiracy charge alleged that the

defendants conspired with Dr. Woodward and others “to

knowingly and willfully conduct and attempt to conduct

financial transactions affecting interstate and foreign

commerce with the intent to promote the carrying on of

specific unlawful activities.” J.A. 103. It further alleged

that in excess of $5,000,000 was received through

CCPMC's heath-care-fraud scheme (i.e., ordering

so as to meet the standard of care that physicians of

similar training would have given you under the same or

similar circumstances... .

That's not what we're talking about. We're not talking

about these physicians acting better or worse than other

physicians. We're talking about whether or not these

physicians prescribed a controlled substance outside the

bounds of their professional medical practice.

J.A. 1299.

lla

unnecessary tests to collect insurance) and its

prescription-selling operation, and that such monies were

deposited into accounts held and controlled by Woodward

and his companies. J.A. 103-04. It alleged that these

monies were expended to continue CCPMC’s

health-care-fraud scheme and prescription-selling

operation, and that, “[i]n furtherance of the conspiracy,

and to achieve the objectives thereof,” payments were

made from the illicitly obtained funds, held by Woodward

and his companies, to the defendants, Woodward, other

CCPMC employees, and other institutions. J.A. 101-06.°

® More specifically, the laundering conspiracy charge, a

violation of 18 U.S.C. § 1956(h), alleged in part:

From about June 1997, and continuing

until... July 2001... [the defendants and

others] did... knowingly ... conspire...

to knowingly and willfully conduct and

attempt to conduct financial transactions

affecting interstate. . . commerce with the

intent to promote the carrying on of specific

unlawful activities, that is: causing

controlled substances to be dispensed

outside the usual course of medical practice

and for other than legitimate medical

purposes, in violation of [21 U.S.C. § 841];

to defraud health care benefits programs by

submitting false claims, in violation of [18

U.S.C. § 1347]; and laundering money with

the intent to promote the carrying on of

these unlawful activities, in violation of [18

U.S.C. § 1956(a)(1 )(ADG)).

12a

At trial, the parties stipulated that “the checks drawn on

the business accounts of [Woodward and his companies],

which are referred to in [the laundering conspiracy

charge], were cashed, and were financial transactions

affecting interstate commerce.” J.A. 672-a to 673. As

explained above, Woodward's testimony was that each of

the defendants had knowingly agreed to participate in

CCPMC’s illegal activities relating to illegitimate

prescriptions and health care fraud.

_ At the close of the prosecution’s case-in-chief, and

again at the conclusion of the evidence, the defendants

each moved under Rule 29 of the Federal Rules of

Criminal Procedure for judgment of acquittal on the

laundering conspiracy charge. J.A. 982-84; Tr. 2256-57.’

Their Rule 29 motions were denied and the jury found

each of them guilty on that charge.

On February 17, 2004, prior to the Supreme

Court's decisions in Blakely v. Washington, 542 U.S. 296

J.A. 103. In its paragraphs 3 and 4, the laundering

conspiracy charge identified more than eighty

transactions as specific overt acts that were performed in

furtherance thereof. See J .A. 101-06.

' The defendants moved at trial for judgment of acquittal

on all counts, but on appeal assert only that they were

entitled to such an acquittal on the laundering conspiracy

charge.

13a

(2004), and United States v. Booker, 125 S. Ct. 738 (2005),

the defendants’ sentencing hearings were conducted and

their sentences were imposed. On appeal, the

Government concedes that — because the challenged

sentences were premised on drug quantities neither

found by the jury nor admitted by the defendants, and

because the sentences were imposed under a mandatory

Sentencing Guidelines regime — the defendants are

entitled to be resentenced. See Booker, 125 S. Ct. 738;

United States v. Hughes, 401 F.3d 540, 555-56 (4th Cir.

2005) (concluding error was plain and warranted reversal

where court imposed sentence under mandatory

Guidelines based on judicial factfinding, increasing

sentencing range beyond that which could have been

imposed on the basis of facts found by jury or admitted by

defendant).

The defendants have filed timely notices of appeal,

and we possess jurisdiction pursuant to 28 U.S.C. § 1291.

Their consolidated appeals present three issues:

« First, whether a civil liability standard was

erroneously injected into the trial by the

prosecutors and the defense lawyers, and, if so,

whether the defendants are entitled to relief from

their convictions either because their lawyers were

constitutionally ineffective, or because the

prosecutors engaged in prejudicial prosecutorial

misconduct;

° Second, whether the evidence was sufficient to

support their convictions on the laundering

conspiracy charge; and

l4a

° Third, whether the defendants — as the

prosecution concedes — are entitled to

resentencing because Booker was contravened.

As explained below, we reject the defendants’ challenges

to their convictions, but we vacate their sentences and

remand.

II.

First, the defendants contend that they are

entitled to a new trial because their lawyers were

constitutionally ineffective and because the prosecutors

engaged in prejudicial prosecutorial misconduct. These

claims derive from their assertion that the lawyers on

both sides of the case erroneously and unconstitutionally

misunderstood and misapplied the pertinent standard for

criminal liability.

We may consider an ineffective assistance claim in

the first instance on direct appeal only if it conclusively

appears from the record that vounsel was constitutionally

ineffective. United States v. Vinyard, 266 F.3d 230, 333

(4th Cir. 2001); see also United States v. Russell, 221 F.3d

615, 619 (4th Cir. 2000) (“A defendant . . . may raise an

ineffective assistance claim in the first instance on direct

appeal only where the ineffectiveness ‘conclusively

appears’ from the record.”). In order to show such

1Sa

ineffectiveness, a defendant is obliged to demonstrate

that (1) the performance of his lawyers “was deficient in

that it fell below an objective standard of reasonableness

and outside the wide range of professionally competent

assistance,” and (2) he was actually prejudiced “in that

but for counsel’s unprofessional errors, the result-of the

proceeding would have been different.” Swisher v. True,

325 F.3d 225, 232 (4th Cir. 2003) (internal quotation

marks omitted); accord Strickland v. Washington, 466

U.S. 668, 691 (1984).

When asserting a prosecutorial misconduct claim,

a defendant bears the burden of showing (1) that the

prosecutors engaged in improper conduct, and (2) that

such conduct prejudiced the defendant's substantial

rights so as to deny the defendant a fair trial. See United

States v. Mitchell, 1 F.3d 235, 240 (4th Cir. 1993). And we

review for plain error a prosecutorial misconduct claim

that was not raised or presented to the trial court. Fed. R.

Crim. P. 52(b); see also Vinyard, 266 F.3d at 324

(applying plain error review to prosecutorial misconduct

claim first raised on appeal). In reviewing for plain error,

we must affirm unless an appellant can show that (1) an

error was made, (2) it was plain, and (3) it affected the

appellant’s substantial rights. Vinyard, 266 F.3d at 324.

Moreover, the correction of plain error lies within our

discretion, which we do not exercise “unless the error

seriously affects the fairness, integrity, or public

reputation of judicial proceedings.” Jd. at 324-25

(alteration and internal quotation marks omitted).

l6a

In order to resolve the ineffective assistance and

prosecutorial misconduct claims raised here, we must

first assess the proper relationship between the civil and

criminal standards of liability for a physician who has

prescribed drugs. The distribution charges against the

defendants involve violations of 21 U.S.C. § 84](a)(1),

while the drug conspiracy charge involves a violation of

21 U.S.C. § 846, having as its object the contravention of

§ 841(a)(1).° In relevant part, § 841(a)(1) provides that

“(e]xcept as authorized by [law], it shall be unlawful for

any person [to] knowingly or intentionally . . . distribute

... acontrolled substance.” Generally, in order to convict

under § 841(a)(1), the prosecution is obliged to prove

“that (1) [the] defendant knowingly or intentionally

distributed the controlled substance alleged in the

indictment, and (2) at the time of such distribution the

defendant knew that the substance distributed was a

controlled substance under the law.” United States v.

Tran Trong Cuong, 18 F.3d 1132, 1137 (4th Cir. 1994). An

enhanced analysis applies, however, to persons who are

8 Section 846 of Title 21 provides, in pertinent part, that

“{ajny person who... conspires to commit any offense

defined in this subchapter shall be subject to the same -

penalties as those prescribed for the offense, the

commission of which was the object of the . . . conspiracy.”

17a -

properly registered with the DEA. Pursuant to 21 U.S.C.

§ 822, such persons — including doctors — are authorized

to distribute controlled substances to the extent

authorized by their registrations. See § 822(a) (requiring

persons who distribute controlled substances to obtain

annual registration from Attorney General); § 822(b)

(authorizing registrant to distribute controlled substances

“to the extent authorized by the[ ] registration and in

conformity with .. . other provisions of [law]”); 28 C.F.R.

§ 0.100 (delegating, inter alia, Attorney General’s

authority under § 822 to DEA Administrator).

The seminal decision explaining the liability of

such registered distributors is United States v. Moore,

where the Supreme Court held that a DEA registration

under § 822 grants only “a qualified authorization of

certain activities, [and] not a blanket authorization” to

dispense controlled substances. See 423 U.S. 122, 131

(1975). The defendants in Moore — physicians who,

although registered with the DEA pursuant to § 822,

were convicted under § 841(a)(1) for illegally distributing

controlled substances — contended on appeal that, as §

822 registrants, they were immune from liability under §

841. The Court disagreed, affirming their drug

distribution convictions and holding “that registered

physicians can be prosecuted under § 841 when their

activities fall outside the usual course of professional

practice.” Jd. at 124 (the “criminal standard”). In

discussing the proper application of the criminal

standard, we heve observed that “a licensed physician

who prescribes controlled substances outside the bounds

of his professional medical practice is subject to

18a

prosecution and is no different than a large-scale pusher.”

Tran Trong Cuong, 18 F.3d at 1137 (internal quotation

marks omitted). In contrast to the criminal standard, a

medical malpractice plaintiff in South Carolina must

show in a civil case (1) “the generally recognized practices

and procedures that would be exercised by competent

practitioners in a defendant doctor's field of medicine

under the same or similar circumstances,” and (2) “that

the defendant doctor departed from the recognized and

generally accepted standards, practices, and procedures.”

Gooding v. St. Francis Xavier Hosp., 487 S.E.2d 596, 599

(S.C. 1997) (the “civil standard”).

In our 1994 Tran Trong Cuong decision, we

spelled out the proper relationship between the criminal

standard, on the one hand, and the civil standard, on the

other. Tran, a registered physician, had been convicted on

several distribution charges under § 841(a)(1). See Tran

Trong Cuong, 18 F.3d at 1133. He sought relief from his

convictions by, inter alia, contending that the

prosecution's evidence was insufficient. /d. at 1137. As

part of his contention, Tran asserted that the trial court

had, in conducting his trial, mistakenly and erroneously

applied the civil standard instead of the criminal

standard. /d.

We responded to Tran’s appeal by explaining the

pertinent distinctions between the criminal standard and

the civil standard. In particular, Judge Chapman’s

opinion observed that a criminal prosecution requires

“proof beyond a reasonable doubt that the doctor was

acting outside the bounds of professional medical

practice.” Tran Trong Cuong, 18 F .3d at 1137. It

19a

elaborated that, in such a situation, a physician’s

authority to prescribe drugs is being used “not for

treatment of a patient, but for the purpose of assisting

another in the maintenance of a drug habit or of

dispensing controlled substances for other than a

legitimate medical purpose, i.e. the personal profit of the

physician.” Jd. We concluded that the instructions in

Tran’s trial not only comported with the criminal

standard, but also required the prosecution to prove that

the physician had written prescriptions “without a

legitimate medical purpose,” arguably a more stringent

requirement than the criminal standard announced in

Moore, inuring “to [the] defendant's benefit.” /d. at

1137-38.

Importantly, as Judge Chapman explained in Tran

Trang Cuong, we found sufficient evidence to sustain

Tran’ s distribution convictions by relying in part on

expert testimony that Tran had deviated drastically from

accepted medical standards. /d. at 1138-40. As Tran

Trong Cuong thus demonstrates, evidence that a

physician's performance has consistently departed from

accepted professional standards supports the proposition

that the physician was not practicing medicine, but was

instead cloaking drug deals under the guise of a

professional medical practice. As a result, such evidence

may properly be relevant to establish that the physician

contravened the criminal standard of liability. See id.

20a

The defendants contend that the lawyers on both

sides of this case erroneously conflated the criminal

standard with the civil standard and that, as a result,

they were tried and convicted for civil malpractice rather

than for the criminal] distribution of drugs. Importantly,

however, the defendants have neither challenged the

sufficiency of the trial evidence nor the propriety of the

jury instructions of the trial court.’ Indeed, the

defendants do not point to any specific trial error that

° The instructions in this case are only distinguishable

from those we approved in Tran Trang Cuong in that the

trial court here more clearly articulated the distinction

between the civil standard and the criminal standard. See

Tran Trong Cuong, 18 F.3d at 1137-38. In addition to

reciting the Tran Trong Cuong instructions nearly

verbatim, the court cautioned the jury about the

standard-of-care evidence, J.A. 1299, and explained the

degree of proof (i.e., proof beyond a reasonable doubt)

necessary for a criminal conviction, Tr. 2390. The court

further instructed the jury that "[i]f you find that a

defendant acted in good faith in dispensing the drugs

charged ..., then you must find that defendant not

guilty." J.A. 1298. The court then addressed the

standard-of-care evidence and instructed the jury that

the critical issue on the distribution and drug conspiracy

charges was not whether the defendants had acted

negligently, but "whether or not these physicians

prescribed a controlled substance outside the bounds of

their professional medical practice." J.A. 1299.

2la

prejudiced them. Rather, they contend that their entire

trial was infected with an erroneous standard of proof

and that the verdict must thus be set aside,

notwithstanding the sufficiercy of the evidence and the

propriety of the jury instructions. As explained below,

this position does not pass muster.

First, the defendants have not directed us to any

evidence that was improperly introduced. In contending

that they were erroneously tried, the defendants appear

to be asserting that, because standard-of-care evidence

might show that a physician contravened the civil

standard, it_must categorically be excluded from a

criminal proceeding. As our analysis in Tran Trang

Cuong demonstrates, however, evidence that a physician

consistently failed to follow generally recognized

procedures tends to show that in prescribing drugs he

was not acting as a healer but as a seller of wares. See 18

F .3d at 1138-40; see also Fed. R. Evid. 401 (“Relevant

evidence’ means evidence having any tendency to make

the existence of any fact that is of consequence . . . more

probable or less probable than it would be without the

evidence.”); Fed. R. Evid. 402 (providing that relevant

evidence is generally admissible).*°

)

‘© To be sure, an undue emphasis on standard-of-care

evidence might, in certain circumstances, confuse a jury.

See Fed. R. Evid. 403 (“Although relevant, evidence may

be excluded if its probative value is substantially

outweighed by the danger of unfair prejudice, confusion of

the issues, or misleading the jury... .”).

22a

Second, as the defendants concede, the jury was

correctly instructed on the applicable legal principles.

The trial court was careful to spell out the differences

between the criminal standard and the civil standard.

Indeed, it admonished the jury that the defendants could

only be convicted under the criminal standard, and it

emphasized that they could not be convicted if they had

dispensed the controlled substances at issue “in good

faith.” Ordinarily, of course, we presume that a properly

instructed jury has acted in a manner consistent with the

instructions. See Jones v. United States, 527 U.S. 373,

394 (1999). Nonetheless, the defendants maintain that,

on this record, an overwhelming probability exists that

the jury ignored the instructions and convicted the

defendants of civil malpractice. See Goldsmith v.

Witkowski, 981 F.2d 697, 703 (4th Cir. 1992) (“The

presumption of cure by a court's instructions is overcome

when there is an overwhelming probability that the jury

will be unable to follow the court’s instructions, and a

strong likelihood that the effect of the [trial error] would

be devastating to the defendant.” (internal quotation

marks omitted)). In these circumstances, we are unable

to agree with the defendants. The jury entered its

deliberations armed with ample admissible evidence and

with proper instructions on the applicable legal

principles. The defendants’ assertions that their lawyers

were confused at trial is insufficient to rebut the

presumption that the jury used these tools properly."

"' Even if the defendants could show error with respect to

their standard-of-proof assertions, it would be difficult to

23a

In these circumstances, the defendants have not

established any trial error caused by a misapprehension

of the criminal standard on the part of the lawyers. They

are unable to show that a substandard performance by

their lawyers conclusively appears from the record, and

they have also failed to demonstrate that the prosecutors

engaged in any improper conduct relating to the standard

of proof or their use of evidence. Accordingly, we decline

to reach and address the defendants’ ineffective

assistance claims, and we reject their prosecutorial

misconduct claims on the merits.

Next, the defendants contend that the evidence

was insufficient to support their convictions on the

laundering conspiracy charge and that the district court

therefore erred in denying their motions, pursuant to

Rule 29 of the Federal Rules of Criminal Procedure, for

judgment of acquittal on that charge. The defendants’

contention on this point is premised on their view that, as

a matter of law, a defendant must have committed the

substantive offense of promotion money laundering in

conclude that they were thereby prejudiced. Indeed, Dr.

Woodward’s testimony alone was sufficient to convict the

defendants, and it was supported by other evidence. And

in light of its verdict, we assume that the jury credited

Woodward’s testimony. See United States v. Hughes, 401

F.3d 540, 544-45 (4th Cir. 2005).

24a

order to be convicted on the laundering conspiracy

charge. As explained below, that proposition is legally

incorrect. Moreover, the jury was properly instructed —

without objection — on the laundering conspiracy charge,

supported by substantial evidence.”

We review de novo a district court’s denial of a

Rule 29 motion for judgment of acquittal. United States v.

Ryan-Webster, 353 F.3d 353, 359 (4th Cir. 2003).'* In so

The defendants also maintain on appeal that, as a

predicate to convicting them on the laundering conspiracy

charge, the jury was obliged to find that they had

contravened the criminal standard in prescribing

controlled substances. In so doing, they reassert their

ineffective assistance and prosecutorial misconduct

claims in attacking their convictions on the laundering

conspiracy charge. As explained above, see supra Part

II.A, we are unable to grant relief on either of those

claims, and we thus need not address whether they might

have entitled the defendants to relief on the laundering

conspiracy charge.

8 Pursuant to Rule 29(a), "[a]fter the government closes

its evidence or after the close of all the evidence, the court

on the defendant's motion must enter a judgment of

acquittal of any offense for which the evidence is

insufficient to sustain a conviction.” A Rule 29

determination thus focuses on both the elements of the

offense charged and on the tactual sufficiency of the

25a

doing, we are obliged to sustain a guilty verdict if,

viewing the evidence in the light most favorable to the

Government, it is supported by “substantial evidence.”

United States v. Burgos, 94 F.3d 849, 862 (4th Cir. 1996)

(en banc) (citing Glasser v. United States, 315 U.S. 60, 80

(1942)). We have defined “substantial evidence” as

“evidence that a reasonable finder of fact could accept as

adequate and sufficient to support a conclusion of a

defendant's guilt beyond a reasonable doubt.” /d.

Moreover, in conducting such a review, we must “remain

cognizant .. . that the jury, not the reviewing court,

weighs the credibility of the evidence and resolves any

conflicts in the evidence presented.” /d. (internal

quotation marks omitted).

The laundering conspiracy charge is, in substance,

that the defendants contravened 18 U.S.C. § 1956(h) by

conspiring with Dr. Woodward and others to commit

promotion money laundering, as defined in 18 U.S.C. §

1956(a)(1)(A)G). By its terms, the promotion money

laundering provision — the violation of which was the

object of the laundering conspiracy charge ~ requires the

prosecution to (1) trace the money at issue to an

underlying unlawful activity, and (2) prove that the

money was transferred in order to promote a specified

evidence.

26a

unlawful activity. See § 1956(a)(1)(A)(i).* In previously

addressing a promotion money laundering issue, we

found the promotion element satisfied when a defendant

paid his subordinate employee for being involved in an

unlawful scheme, because such payments compensated

the employee for his illegal activities and encouraged his

continued participation. United States v. Bolden, 325 F.3d

471, 489 (4th Cir. 2003).

Pursuant to § 1956(h), the laundering conspiracy

statute, “[a]ny person who conspires to commit any

offense defined in [§ 1956] . . . shall be subject to the same

penalties as those prescribed for the offense the

commission of which was the object of the conspiracy.”

Thus, in order for the jury to convict on the laundering

conspiracy charge, the prosecution was obliged to prove

that (1) a conspiracy to commit promotion money

laundering was in existence, and (2) that during the

conspiracy, the defendant knew that the proceeds used to

The offense of promotion money laundering stands in

contrast to the offense of "concealment money

laundering," as defined and prohibiied by §

1956(a)(1)(B)(i). While both offenses require the

prosecution to trace the funds at issue to a specified

unlawful activity, a defendant commits promotion money

laundering by transferring the funds “to promote the

carrying on of specified unlawful activity,” see §

1956(a)(1)(A)(i), whereas concealment money laundering

is committed by transferring such funds “to conceal or

disguise” their illegal origins, see § 1956(a)(1)(B)(1).

further CCPMC’s illicit operations had been derived from

an illegal activity, and knowingly joined in the

conspiracy. See United States v. Diamond, 378 F.3d 720,

727 (7th Cir. 2004) (“To convict a defendant of conspiracy

to commit money laundering, the government must show

the defendant was involved with two or more people to

launder money and that the defendant knew the proceeds

used to further the scheme were derived from an illegal

activity.”). As explained below, substantial evidence

supports each of these elements, and the district court

properly denied the defendants’ requests for judgments of

acquittal on the laundering conspiracy charge.

First, the defendants challenge their convictions

on the laundering conspiracy charge by contending that

the evidence was insufficient to find them guilty of

promotion money laundering. This contention misses the

point: As a factual matter, the defendants were neither

charged with nor convicted of promotion money

laundering. Rather, they were charged with and

convicted of conspiring to commit promotion money

laundering. As a legal matter, the prosecution was not

required to prove that the defendants had committed

promotion money laundering in order to convict them of

conspiring to do so. See Diamond, 378 F.3d at 727.

Accordingly, we need not — and do not — reach the issue of

whether the evidence in this case would have supported

their convictions on the substantive offense of promotion

money laundering. Cf. United States v. Heaps, 39 F.3d

28a

479, 486 (4th Cir. 1994) (concluding that simple drug

transaction did not constitute promotion money

laundering where no evidence showed that proceeds from

transaction were subsequently used to promote unlawful

activity), recognized as abrogated on other grounds by

United States v. Villarin:, 238 F.3d 530, 534-35 (4th Cir.

2001). Our inquiry is thus limited to whether the trial

evidence was sufficient to sustain the defendants’

convictions for conspiracy to commit promotion money

laundering.

Second, the defendants have not assigned error to

the court’s instructions on the laundering conspiracy

charge, and they interposed no objection to those

instructions at trial. The court instructed the jury that, in

order to convict on that charge, it was obliged to find

beyond a reasonable doubt as to each defendant: (1) that

the conspiracy alleged existed; (2) that “at some time

during the .. . life of the conspiracy . . . the defendant

knew the purpose of the agreement and then deliberately

joined the conspiracy”; and (3) that “[a]t some point

during the . . . life of the conspiracy . . . one of its alleged

members knowingly performed one of the overt acts

charged in order to further or advance the purpose of the

conspiracy.” Tr. 2413. The court also explained to the jury

the essential elements of the offense of promotion money

laundering, which was the object of the laundering

conspiracy charge. Tr. 2413-15.

Not only have the defendants failed to assign error

to the instructions, the trial court arguably added an

unnecessary element to the § 1956(h) offense, favoring

the defendants. The court instructed the jury that it could

not convict on the laundering conspiracy charge without

finding that a conspirator had committed an overt act in

furtherance of the conspiracy. Compare Tr. 2413

(instructing on overt act requirement for § 1956(h)) with

Whitfield v. United States, 125 S. Ct. 687, 691 (2005)

(holding that § 1956(h) has no overt act element), and

Bolden, 325 F.3d at 491 (same). In sum, there were no

objections to the relevant instructions, and the only

possible error in those instructions was to the benefit of

the defendants.”®

'S Although not an issue on appeal, the instructions on

the unlawful activity aspect of the object of the

laundering conspiracy charge varied from the indictment.

As explained above, the object of the conspiracy in that

charge was promotien money laundering. The laundering

conspiracy charge identified three specific unlawful

activities that the conspiracy sought to promote: (1) the

unlawful distribution of controlled substances (21 U.S.C.

§ 841); (2) health care fraud (18 U.S.C. § 1347); and (3)

promotion money laundering (18 D.S.C. §

1956(a)(1)(A)(i)). J.A. 103. The court instructed, however,

that the “specified unlawful activity is the conspiracy to

distribute or dispense controlled substances.” Tr. 2416

(emphasis added). There was no objection to this

instruction, perhaps because the defendants believed it to

be advantageous to them. In any event, it would plainly

appear to be a non-fatal variance. See United States v.

Davis, 202 F.3d 212, 216 n.3 (4th Cir. 2000) (“[A] non-

30a

Finally, there was substantial evidence presented

to the jury supporting the defendants’ convictions on the

laundering conspiracy charge. According to Dr.

Woodward's evidence, the defendants agreed to

participate with him and others in carrying on CCPMC’s

unlawful operations (the prescription-selling and

health-care-fraud schemes). The conspiracy the

defendants joined called for Woodward and his companies

to acquire funds through CCPMC’s illegal activities and

then distribute those funds to CCPMC’s physicians,

employees, and owners (including the defendants), as

compensation for their efforts; that is, the scheme called

for Woodward to commit promotion money laundering.

Cf. Bolden, 325 F.3d at 489 (concluding that promotion

money laundering conviction was supported by evidence

that defendant paid subordinate for participation in

illegal scheme because such payment compensated

subordinate for past illegal activities and encouraged his

future participation).’* Unfortunately for the defendants,

prejudicial variance between the indictment and the proof

that does not modify the elements of the charged offense

is no basis to invalidate a conviction.”).

6 1n their Reply Brief, the defendants concede that the

Bolden principles "might support a promotion [money

laundering] claim against Dr. Woodward," but

nonetheless contend that it cannot "support| ] a

promotion [money laundering] claim against Drs. Alerre,

3la

they cannot, as a legal proposition, divorce themselves

from the reasonably foreseeable acts which Woodward

committed in furtherance of the conspiracy while they

were members thereof. See United States v. Newsome,

322 F.3d 328, 338 (4th Cir. 2003) (“[U]nder conspiracy

law, [a conspirator] is liable for the conduct of all co-

conspirators that was in furtherance of the conspiracy

and reasonably foreseeable.”) (citing Pinkerton v. United

States, 328 U.S. 640, 646-47 (1946)).

Dr. Woodward’s evidence, if credited by the jury,

thus established the essential elements, as spelled out in

the instructions, for conviction of the defendants on the

laundering conspiracy charge: (1) that there was a

conspiracy to commit promotion money laundering; (2)

that during the life of the conspiracy, each defendant

knew the purpose thereof and then deliberately joined in

it; and (3) that during the conspiracy, a conspirator

performed at least one of the overt acts alleged in

furtherance thereof. Crediting Woodward’s testimony, as

we must, the convictions on the laundering conspiracy

charge are supported by substantial evidence.

. In their third and final appellate contention, the

defendants maintain they are entitled to resentencing

under United States v. Booker, 125 S. Ct. 738 (2005), and

Bordeaux, and Jackson." Reply Br. at 15. As related

above, this contention is beside the point.

32a

its progeny. In its brief, in its supplemental letter of April

15, 2005 to this Court, and again at oral argument, the

prosecution has conceded error on this issue and agreed |

that Booker mandates resentencing of the defendants.

The prosecution’s position is valid, and we therefore

vacate the defendants' sentences and remand for such

resentencing proceedings as may be appropriate.’”

II.

Pursuant to the foregoing, we affirm the

defendants’ convictions, vacate their sentences, and

remand.

AFFIRMED IN PART,

VACATED IN PART, AND REMANDED

” As in United States v. Hughes, "[wle of course offer no

criticism of the district judge, who followed the law and

procedure in effect at the time of [the defendants']

sentencing.” See 401 F.3d 540, 545 n.4 (4th Cir. 2005).

33a

APPENDIX, B

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 03-4207

CR-02-673

UNITED STATES OF AMERICA

Plaintiff - Appellee

RICARDO U. ALERRE

Defendant - Appellant

No. 03-4212

CR-02-673

UNITED STATES OF AMERICA

Plaintiff - Appellee

DEBORAH BORDEAUX

Defendant - Appellant

34a

FILED

December 28, 2005

No. 04-4161

CR-02-673

UNITED STATES OF AMERICA

Plaintiff - Appellee

MICHAEL D. JACKSON

Defendant - Appellant

On Petition for Rehearing and Rehearing En Banc

The appellants’ petition for rehearing and

rehearing en banc was submitted to this Court. As no

member of this Court or the panel requested a poll on the

petition for rehearing en banc, and

As the panel considered the petition for rehearing

and is of the opinion that it should be denied,

IT IS ORDERED that the petition for rehearing

and rehearing en banc is denied.

Entered for a panel composed of Judge Michael,

Judge Motz, and Judge King.

For the Court,

/s/ Patricia S. Connor

CLERK

35a

APPENDIX C

JUDGMENT

FILED: December 1, 2005

UNITED STATES COURT OF APPEALS

for the

Fourth Circuit

No. 03-4207

CR-02-673

UNITED STATES OF AMERICA

Plaintiff - Appellee

RICARDO U. ALERRE

Defendant - Appellant

No. 03-4212

CR-02-673

UNITED STATES OF AMERICA

Plainiiff - Appellee

DEBORAH BORDEAUX

Defendant - Appellant

36a

No. 04-4161

CR-02-673

UNITED STATES OF AMERICA

Plaintiff - Appellee

MICHAEL D. JACKSON

Defendant - Appellant

Appeal from the United States District Court for the

District of South Carolina at Florence

In accordance with the written opinion of this

Court filed this day, the Court affirms in part and vacates

in part the judgment of the District Court. This case is

remanded to the District Court for further proceedings

consistent with the Court’s opinion.

A certified copy of this judgment will be provided

to the District Court upon issuance of the mandate. The

judgment will take effect upon issuance of the mandate.

/s/ Patricia S. Connor

CLERK

37a

APPENDIX D

Prescription Drug Diversion Prosecutions

Quick Reference Card 2002

We intend this card to serve as a basic guide to

prosecuting prescription drug diversion cases. Users

should check recent cases and, where necessary, consult

with their supervisors before making a final decision

regarding charging strategies. For space purposes, we left

the “U.S.” out of all of our citations. If the cite involves a

civil case, we noted the same.

Why Drug Diversion Prosecutions - Civil and

Criminal?

® The Controlled Substances Act, 21/801 et seq., states

that “except as provided by this subchapter, it shall be

unlawful for any person knowingly or intentionally...

to distribute, or dispense a controlled substance.

21/841(a)(1). Section 842(c)(1) authorizes civil penalties

for a violation of the act. "In order to enable physicians

and certain others (e.g., manufacturers, nurses, and

pharmacists) lawfully to distribute or dispense drugs

within the course of their professional practice, Congress

provided that ‘[persons registered . . . under this

subchapter . . . to the extent authorized by their

registration and in conformity with the other provisions

of this subchapter.” 21/822(b). “This exemption from the

Act granted to medical practitioners engaged in

distribution of controlled substances ts a limited one

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since practitioners possess increased access to

controlled substances and therefore greater

opportunities for diversion. ALN Corp., 1993 WL

402803, *2 (D. Conn.) (Civil case), quoting Vamos, 797

F.2d 1146, 1152-53 (2d Cir. 1986); see also Moore, 423

U.S. 122, 135 (1975); Clinical Leasing Service, Inc., 759 F.

Supp. 310, 316-17 (E.D. La. 1990) (civil case). & Congress

provides an exemption to physicians and other medical

practitioners who use their ability to issue controlled

substances to heal patients, but allows prosecution of

those unscrupulous medical professionals who use these

privileges to deal and steal. See Singh, 54 F.3d 1182,

1188-89 (4 Cir. 1995) (“Congress gave doctors the power

to authorize the distribution of dangerous addictive

drugs, and with that power, Congress also places upon

[the doctor] the responsibility to distribute them wisely

within the course of [the doctor’s] medical practice”).

Relevant Definitions

® Practitioner means a physician, dentist, veterinarian,

scientific investigator, pharmacy, hospital, or other

person licensed, registered, or otherwise permitted, by

the United States or the jurisdiction in which he practices

or does research, to distribute, dispense, conduct research

with respect to, administer, or use in teaching or

chemical analysis, a controlled substance in the course of

professional practice or research.21/802(21). &

Controlled Substance means a drug or other

substance, or immediate precursor, included in Schedule

I, II, III, IV, or V of 21/812. 21/802(6). & Deliver means

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the actual, constructive, or attempted transfer of a

controlled substance or a listed chemical, whether or not

there exists an agency relationship.21/802(8). =

Dispense means to deliver a controlled substance to an

ultimate user or research subject, by, or pursuant to the

lawful order of, a practitioner, including the prescribing

and administering of a controlled substance and the

packaging, labeling or compounding necessary to prepare

the substance for such delivery. The term “dispenser”

means a practitioner who so delivers a controlled

substance to an ultimate user or research subject.

21/802(10). & Distribute means to deliver (other than by

administering or dispensing) a controlled substance or a

listed chemical. The term “distributor” means a person

who so delivers a controlled substance or a listed

chemical.21/802(11). ® Ultimate User means a person

who has lawfully obtained, and who possess|es], a

controlled substance for his own use or fur the use of a

member of his household or for an animal owned by him

or by a member of his household.21/802(27). See Bartee,

479 F.2d 484 (10 Cir. 1973) (various definitions).

Basic Element of § 841 Offense

® The basic elements are: (1) the defendant knowingly or

intentionally, (2) distributed or dispensed, (3) a controlled

substance. The statutory language of 21/841 does not

contain any other elements. However, to prove: that the

distribution or dispensation via prescription was illegal,

the government must show that there was no legitimate

medica! purpose for the prescription and the same was

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not issued/filled in the usual course of professional

practice or was beyond the bounds of medical practice.

Singh.

When is a Prescription for a Controlled Substance

Effective?

# A prescription for a controlled substance is effective if

issued (1) for a legitimate medical purpose (2) by an

individual practitioner (3) acting in the usual

course of h is professional practice, 21 C.F.R.

§1306.04(a). ® The responsibility for the proper

prescribing and dispensing of controlled substances is

upon the prescribing practitioner, but a corresponding

responsibility rests with the pharmacist who fills the

prescription. See Milicia, 769 F. Supp. 877, 878-80 &

n.8 (E.D. Pa.1991), citing § 1306.04(a). @ Any

individual practitioner who issues or fills a prescription

knowing that the prescription was not issued for a

legitimate medical purpose in the usual course of

professional treatment (or for legitimate and authorized

research), shall be subject to penalties provided for

violations of the controlled substances law. A conviction

will be upheld even if the government does not present

compelling evidence that the doctor prescribed with

malicious motive or the desire to make a profit. Singh, at

1188.

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What is a Legitimate Medical Purpose?

® A physician is acting with a legitimate medical purpose

when he or she prescribes medical treatments that are in

strict compliance with well-established and

generally accepted medical guidelines, and

administers medical treatments .hat appropriately

and correctly address and relieve the present

medical condition. Tran Trong Coung, 18 F.3d 1132 (4”

Cir. 1994) (reversed and remanded). ® To decide whether

a physician acted without a legitimate medical purpose,

you must examine all of the defendant's actions and the

circumstances surrounding them. ® Abbreviated or no

medical history or physical examination is probative on

the question of whether a legitimate medical purpose

exists. Chin, 795 F.2d 496, 500 (5" Cir. 1986). @ Evidence

that a doctor tells patients where to get their

prescriptions filled, prescribes drugs even after learning

of a patient’s addiction to them, or asks patients about

the amount or type or type of drugs they want, is

probative of whether a legitimate medical purpose exists

for the dispensed controlled substances. Singh, 54 F.3d

1182; Coung, 18 F.3d 1132.

What is the Usual Course of Professional Practice?

w “There are no specific guidelines concerning what is

required to support a conclusion that an accused acted

outside the usual course of professional practice. Rather,

the courts must engage in a case-by-case analysis of

evidence to determine whether a reasonable inference of

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guilt may be drawn from specific facts.” Singh, at 1187,

quoting August, 984 F.2d 705, 713 (6" Cir. 1992), and

Cuong, at 1137-38, ® A physician must act in a good faith

manner that is in direct accordance with the

reasonableness standard set forth in the medical

community. Boettjer, 569 F.2d 1078, 1080-82 (9" Cir.

1978). ® A physician must use reasonableness and sound

medical discretion in following generally accepted medical

guidelines in the administration of correct-medical

treatment throughout the physician/patient relationship.

Moore, 423 U.S. at 139. @ Licensed physicians who

prescribe controlled substances outside bounds of their

professional medical practice are subject to prosecution

and are no different from large scale drug dealers.

Comprehensive Drug Abuse Prevention Act of 1974,

§ 401(a), 21 U.S.C.A. § 841(a). @ The indictment need

not charge that the dispensation was done outside the

course of professional practice, Steele, 147 F.3d 1316 (11™

Cir. 1998) (en banc), citing 21/885(a)(1), because the

government does not have to negate any exemption or

exception set forth in Title 21 in the indictment). ® The

better practice, however, is to include this language to

familiarize the jury with the concept and make clear your

basis for the illegal dispensation and distribution

charges. Roya, 574 F.2d 386 (7" Cir. 1978).

Deliberate Ignorance/Willful Blindness

® The government may show knowledge by proof that the

physician or pharmacist deliberately closed his or her

eyes to the true nature of a prescription. Lawson, 682

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F.2d 480 (4" Cir. 1982) (pharmacist charged with illegal

distribution of controlled substances); Neville, 82 F.3d

750, 759-60 (7 Cir. 1996). & “When a pharmacist is faced

with a large number of prescriptions all written by one

doctor and all presented by one person, this constitutes

evidence that the prescriptions are not legitimate.”

Lawson, at 482, citing Hayes, 595 F.2d 258, 260 (5" Cir.

1979); see also Milicia, 769 F. Supp. at 884. # “(U)niform

dosages and quantities belied any conclusion that the

prescriptions . . . were ordered for individual patients.”

682 F.2d at 482-83 & n6 (discussing expert testimony

that uniformity of prescriptions should signal to a

pharmacist that the prescriptions were not legitimate).

@The nature of the physician's practice does not match

the nature of the prescriptions (proving outside the

course of professional practice and lack of legitimate

medical-purpose). 682 F.2d at 482-83 (giving the example

of Dilaudid being used only for those people with

excruciating pain, such as with a doctor operating a clinic

that treats terminally ill cancer patients). # The Lawson

court held that the evidence proved the defendant

pharmacist “willingly ignored every signal that he should

question the volume of controlled substances being

dispensed from his pharmacies.” Id. & n.17, citing Seelig,

622 F.2d 207, 213 (6 Cir. 1980) (jury instructions). ®

Others: Prescriptions written on a large-scale basis (i.e.,

over 90% of the prescriptions written by the physician

were for controlled substances, a, figure expert testimony —

will show is outrageously high and dramatically out of

line with professional medical practices of other

similarly-situated physicians). Hammond, 781 F.2d 1536

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(11" Cir. 1986). # Consider a pharmacist expert

witness, and have them testify that “pharmacists are not

allowed to fill every prescription issued by a licensed

physician and they must screen their patients for

‘drug-seeking’ behaviors.” Sims-Robertson, 16 F.3d 1223,

1994 WL 12212 (6" Cir. (Mich.) (Unpublished). # See the

DEA Pharmacist's Manual (on their web-site). See also

Leal, 75 F.3d 219 (6" Cir. 1996) (pill mill case, defendant

pharmacist, and “ostrich” instruction approved); Veal,

985 (6" Cir. 1994).

Dispense or Distribute or Both?

® The case law is not always clear about whether

the act of prescribing or filling controlled

substances without a legitimate medical purpose

and outside the course of professional practice is

Illegal Dispensing or Distribution or Both. 8 Here

are a few cases illustrating different charging theories.

#=PRESCRIBING: “Improperly issuing a prescription for

a controlled substance is sufficient to warrant a

conviction under the [CSA] even though the doctor

does not himself actually distribute the drugs and

even though the prescription is not subsequently

filled. The sheer number of prescriptions written to any

individual is proof that the defendant knew he was

prescribing drugs improperly. Cuong, 18 F.3d at 1139,

quoting Stump, 735 F.2d 273, 275-76 (7™ Cir. 1984). &

DISPENSING: “A doctor's authority to prescribe

controlled substances is violated when he uses that

authority to assist another in maintaining a drug habit

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or when he dispenses controlled substances for other

than a legitimate medical purpose. Singh. ®

DISTRIBUTION: The indictment was not defective

because the government charged the defendant with

illegal distribution instead of illegal dispensation. Elizey,

527 F.2d 1306 (6" Cir. 1976). # BOTH: In Green, 511

F.2d 1062 (7" Cir. 1975), a physician was charged and

convicted of illegal dispensation and a pharmacist was

charged and ccnvicted of illegal distribution. In Hoffman,

129 F.3d 1196(11" Cir. 1997), the plea agreement

charged both illegal dispensing and distribution. In

Sutherland, 2(01 WL 1502913 (W.D. Va.), the jury

convicted the cefendant of 427 counts of unlawfully

dispensing and distributing controlled substances.

In Dunbar, 614 F.2d 39, 41 (5 Cir. 1980), the court said

“a licensed medical doctor can be prosecuted for the

distribution or dispensation of Schedule II controlled

substances outside the usual course of professional

practice, citing Moore, 423 U.S.122. & The “Go-Figure”

Winners are: “|t]o convict a physician of distributing a

controlled substance . . ., the government must prove

... that the defendant ‘distributed or dispensed a

controlled substance.” Singh, 54 F.3d at 1186-87, quoting

Cuong, 18 F.3c at 1141; see also Chin, 795 F.2d at 499

(diet pill doc). “REAL DISTINCTION?: Read Harrison,

651, F.2d 353 (5" Cir. 1981); Thompson, 624 F.2d 740 (5"

Cir. 1980); and Leigh, 487 F.2d 206 (5" Cir. 1976). #

SOLUTION?: Read Moore, 423 U.S. 122. You cannot

create a hyper-technical distinction between dispense and

distribute as both involve delivery. Fellman, 549 F.2d

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181, 182 (10™ Cir. 1977); see also Badia, 490 F.2d 296 (1*

Cir. 1973); Rosenburg, 515 F.2d 190 (9" Cir. 1975).

Unit of Prosecution

® The unit of prosecution is each act of dispensation or

distribution (each prescription written or filled). Sugar,

606 F. Supp. 1134 (S.D.N.Y. 1985); Elliott, 849 F.2d 886

(4" Cir. 1988).

Death or Serious Bodily Injury

@ if you have evidence of patient overdoses resulting from

the physician’s prescribing pattern, consider charging the

enhances penalty provisions under 21/841(b). There are

Apprendi issues here.

Expert Witness Issues

® “Neither the government nor the defendant is required

to provide expert testimony on the issue of whether the

actions taken by the defendant were or were not for a

legitimate medical purpose or in the usual course of

professional practice.” Polito, 111 F.3d 132, 1997 WL

178879, *5 (6" Cir. (Ohio)), quoting Word, 806 F.2d 658,

663 (6" Cir. 1993). # “There are cases in which the lay

testimony is so clear that no expert testimony is required

to determine that the defendsnt's actions were not for a

legitimate medical purpose nor in the usual course of

professional practice.” Polito quoting Word. ® Many cases

are not that clear cut because the target physician or

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pharmacist may also have legitimate patients or fill

legitimate prescriptions. ® Potential Areas of Expert

Testimony: Signs of addiction and how a physician

discovers them. The effects of all of the drugs prescribed,

and their proper uses overall, the legal requirements for

issuing a prescription, and the inappropriateness of the

prescriptions in each § 841 count. The danger of

long-term use of narcotic analgesics, which contain

acetaminophen, and their toxic nature to the human

body. The process of titrating narcotic dosages upward as

the body adjusts and develops tolerance to them, and why

you do not prescribe high dosages to a patient that is not

opioid-tolerant. The distinctions in treating acute,

malignant, and chronic, non-malignant pain patients, and

the distinctions between abuse, addiction, dependance,

and tolerance. Poly-pharmacy or prescribing specific drug

combinations — when to and when not to. This is

important because meny pi!! docs prescribe in cocktail

fashion, i.e., hydrocodone, soma, oxycodone, and Xanax.

Note: pain is subjective and requires a specific treatment

plan for each patient. This is important because the bad

doctors prescribe the same drugs in the same amounts to

all or most of their patients, including patients within the

same family. Use. a pain specialist to review medical files

and provide opinion testimony concerning legitimate

medical use of opioid therapy without other non-invasive

or invasive therapies. Make sure your expert has

reviewed pharmaceutical literature re: drugs at issue and

prescribes these drugs in !:is/her practice. Determine

whether your expert-has served on the drug

manufacturer’s speakers’ bureau.

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Sample Count Table

® Consider using the following table to set out each

substantive dispensation or distribution count in your

- indictment:

Count | Date Controlled Num | Stre

Substance, Schedule | ber ngth

& Form of

Pills

1 7/8/01 | Amphetamine (S-II) | 90 30mg

Adderall®

2 7/10/01 | Oxycodone (S-IT) 90 40mg

OxyContin®

3 7/11/01 | Hydrocodone (S-III) {| 180 10mg

Norco®

Sentencing Issues for Pill Cases

® Equivalency ratios are used in determining drug

weight for sentencing purposes in pill cases. Thus,

“to determine the base offense level, the probation officer

[will use] the drug equivalency tables to convert

oxycodone, [amphetamine, and hydrocodone] into an

equivalent marihuana weight.” Sutherland, 2001 WL

1502913, *3, discussing sentencing on Schedule II

oxycodone and amphetamine. See OxyContin

Sentencing Table. ® The “guidelines do not

differentiate between oxycodone and its salts,” so the

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whole weight of the pill counts. Sutherland, citing the

guidelines and Soto, 1 F.3d 920, 922-23 (9® Cir. 1993).

A defendant’s special training as a doctor

constitutes a special skill used in the commission of

[drug diversion] offenses. Same with a pharmacist.

Sutherland.

Further Guidance

= For further guidance on these issues contact the

authors:

Jennifer Golen, AUSA-EDTN, jennifer.bolen@usdoj.gov

Randy Ramseyer, AUSA-WDVA,

randy.ramseyer@usdoj.gov

AUTHORS: BOLEN & RAMSEYER

PRESCRIPTION DRUG DIVERSION PROSECUTIONS -

QUICK REFERENCE CARD

OCTOBER 2002

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.