United States v. Jorge Cabrera , 284 F. App'x 674 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JUNE 30, 2008
No. 06-16003
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 06-20218-CR-PAS
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JORGE CABRERA,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(June 30, 2008)
Before ANDERSON, HULL and SILER,* Circuit Judges.
PER CURIAM:
*
Honorable Eugene Siler, Jr., United States Circuit Judge for the Sixth Circuit, sitting by
designation.
After a jury trial, Jorge Cabrera appeals his two convictions and twenty-
seven-month sentences for criminal offenses involving the unlawful wholesale
distribution and transportation of prescription drugs in interstate commerce. After
oral argument and review, we affirm Cabrera’s convictions and sentences except
for the restitution ordered to Medicaid.
I. BACKGROUND
A. Two-Count Superseding Indictment
Count One of the indictment charged that Cabrera and his codefendants
Omar Maceira and Victor Antonio Ramallo “willfully, that is, with the specific
intent to further the objects of the conspiracy, and knowingly” conspired, in
violation of 18 U.S.C. § 371, to commit two offenses: (1) violating the Food, Drug,
and Cosmetic Act (“FDCA”) by engaging in the wholesale distribution of
prescription drugs in interstate commerce without a Florida license, with the intent
to defraud or mislead, 21 U.S.C. §§ 331(t), 333(a)(2), 353(e)(2)(A); and (2)
transporting goods stolen and taken by fraud in interstate commerce, 18 U.S.C.
§ 2314. Count Two charged them with the substantive FDCA offense that was the
first object of the conspiracy count, i.e., the unlawful wholesale distribution of
prescription drugs in interstate commerce without a Florida license, with the intent
to defraud or mislead, in violation of 21 U.S.C. §§ 331(t), 333(a)(2), and
2
353(e)(2)(A), and 18 U.S.C. § 2.
Codefendant Ramallo pled guilty before trial and was sentenced to thirty-
five months’ imprisonment. Codefendant Maceira proceeded to trial with Cabrera.
Because Cabrera challenges the sufficiency of the evidence, we review certain trial
evidence about (1) the regulation, manufacturing, and diversion of prescription
drugs, and (2) Cabrera’s specific conduct.1
B. Prescription Drug Labeling, Pricing, and Diversion
At trial, Cesar Arias, a registered pharmacist and former drug inspector with
the Florida Department of Health, described how prescription drugs are packaged
and distributed. According to Arias, prescription drugs travel from manufacturers
to wholesalers, who in turn distribute the drugs to pharmacies, hospitals, and
physicians’ offices. Wholesalers can buy prescription drugs from either the
manufacturer or another licensed wholesaler. The pharmaceutical industry is
heavily regulated.
For example, Florida law requires that “pedigree papers” accompany the
drugs in almost every prescription drug transaction between wholesalers. Pedigree
papers are documents that list each entity that has touched the drug with the date of
1
We review the sufficiency of the evidence de novo, recounting the evidence in the light
most favorable to the government and accepting all reasonable inferences in favor of the verdict.
United States v. Klopf, 423 F.3d 1228, 1236 (11th Cir. 2005).
3
sale, the name and strength of the drug, and the lot number of the batch. Pedigree
papers are intended to protect the public’s health by ensuring that prescription
drugs travel through the proper channels of distribution.
Arias testified that every box or bottle of prescription drugs sold by a
manufacturer has a manufacturer’s label attached and either an “outsert” on the
outside of the package or an “insert” inside the packaging. The outsert or insert
explain, inter alia, how the product is meant to be used by medical professionals.
The manufacturer’s label lists, inter alia, the manufacturer’s name and address, as
well as the lot number, which allows for the tracking of the product and is used if
the product is recalled. The bottles also have safety seals that prevent tampering.
When a prescription drug is given to a patient by a pharmacy, the pharmacy
typically transfers the drugs to a separate bottle with a patient label.
Arias also testified that the “diversion” of prescription drugs refers to the
removing, and later returning, of prescription drugs from the ordinary chain of
distribution. Sometimes drugs are stolen in shipment. Other times, “Medicaid
diversion” involves acquiring drugs directly from a patient that are already paid for
by Medicaid. The diverter typically pays ten to fifteen cents on the dollar for the
Medicaid patient’s drugs. The label containing the Medicaid patient’s information
is removed from the packaging with solvents such as lighter fluid. If the original
4
manufacturer’s label is damaged during this process, counterfeit labels are made.
Diverters either obtain replacement outserts from pharmacies or make counterfeits.
After this process is completed, the drugs are reintroduced into the channels of
distribution through profitable transactions with middlemen and wholesalers. This
diversion allows for the prescriptions to be sold illegally below the average price
charged by the manufacturer.
The wholesale acquisition cost (“WAC”) is the average price a drug
manufacturer charges wholesalers who buy the particular prescription drug. The
average wholesale price (“AWP”) is the average price a wholesaler in turn sells a
particular drug, typically to pharmacies, and is usually twenty-five to thirty-five
percent higher than the wholesaler’s WAC. When wholesalers buy prescription
drugs from other wholesalers, they typically pay one or two percent above WAC,
but less than the AWP. Arias explained that it is a “red flag” and “highly
suspicious” to regulators if prescription drugs are sold between wholesalers below
WAC or below eighty percent of the AWP.
C. Conspiracy Investigation and March 22 Drug Transaction
Marc Reiche, a detective with the Miami-Dade County Sheriff’s Department
and a special task force agent with the Food and Drug Administration (“FDA”),
was the undercover agent who posed as a buyer of prescription drugs from
5
Maceira, Ramallo, and Cabrera.2
On March 13, 2006, Reiche and Maceira met in a Publix grocery store
parking lot. Reiche told Maceira that he was interested in purchasing large
quantities of prescription drugs to ship to New York to sell. Maceira told Reiche
that he could sell him drugs with a license and pedigree papers, but it would cost
more, and that Reiche would have invoices for the drugs in case he encountered the
police. Maceira assured Reiche that he checked all of the drugs and that they were
clean with safety seals. Maceira told Reiche, “I get all the illegal stuff and I make
it legal.”
On March 14, 2006, Maceira and Reiche again met in the same Publix
parking lot. Maceira showed Reiche a list of liquid prescription drugs that he had
available. Maceira stated that he bought the drugs for approximately twenty-eight
percent of the WAC and would sell them to Reiche at fifty-five percent of the
WAC. Maceira gave Reiche a fax number to send his order. After this meeting,
law enforcement agents faxed to Maceira an order to purchase five units each of
the prescription drugs Procrit, Combivir, and Crixivan. In subsequent telephone
conversations, Maceira set up a meeting between Reiche and codefendant Ramallo.
2
A confidential informant advised law enforcement that a group of individuals was
selling diverted prescription drugs and arranged a meeting between Reiche and codefendant
Maceira.
6
On March 22, 2006, two meetings occurred. First, Reiche and Maceira met
in a cafeteria parking lot and discussed the drug transaction. Later, Ramallo joined
them, and Maceira left. Ramallo told Reiche that he was a doctor3 and had a
pharmaceutical business. Ramallo and Reiche further discussed the details of their
transaction. Ramallo indicated that he could provide prescription drugs with or
without papers, but that they would be more expensive with papers. After the
meeting, Ramallo and Reiche spoke by phone and arranged a meeting to conduct a
prescription drug sale.
Ramallo and Reiche met again later that day in a parking lot behind a
Hooters restaurant. Ramallo arrived at the meeting in a car driven by Cabrera, and
they parked beside Reiche’s car.4 Ramallo exited the car, walked around the back
of the car, and met Cabrera on the driver’s side. Cabrera removed a box from the
back seat of the car, gave it to Ramallo, and returned to his car. Ramallo entered
Reiche’s car and handed him the box, which contained the requested quantities of
the prescription drugs Procrit, Combivir, and Viracept, but not any invoices or
pedigree papers for the drugs.5 Reiche gave Ramallo an envelope with $9,800 in
3
Reiche testified that Ramallo was not, in fact, a licensed physician in the United States.
4
Cabrera’s grandfather was also in the car with Cabrera and Ramallo.
5
Ramallo substituted Viracept for the requested quantity of the drug Crixivan.
7
cash as payment, which was approximately sixty-two percent of the WAC and
fifty-one percent of the AWP for the drugs. Detective Luis Hernandez, an FDA
criminal investigator who observed this March 22 meeting, testified that Maceira
arrived separately and that Ramallo and Maceira high-fived in celebration after the
transaction.
Reiche also gave Ramallo a large order of drugs. From Reiche’s car,
Ramallo called over to Cabrera and requested a drug inventory list from a laptop
computer bag. Cabrera exited his car and brought Ramallo the drug inventory list
from a computer bag. Ramallo later walked over to Cabrera’s vehicle, obtained the
laptop computer bag from Cabrera, and produced another drug inventory list.
Ramallo and Reiche had subsequent telephone conversations regarding the
new order. Reiche indicated to Ramallo that he wanted to see “the products.” In
one telephone conversation, Ramallo told Reiche that he would send Cabrera,
whom Ramallo described as “my partner,” to show Reiche what they had. During
another phone call on March 28, 2006, Ramallo instructed Reiche on a meeting
location. Reiche could hear Cabrera in the background assisting Ramallo with
instructions.
D. March 28 Meeting at Cabrera’s Warehouse
On March 28, 2006, Reiche met Ramallo and Cabrera at a warehouse in
8
Hialeah, Florida. Cabrera had signed a lease contract for the warehouse on behalf
of Courier JC Corp.6 The parties stipulated that Courier JC Corp. was one of the
five registered corporations for which Cabrera was an officer or registered agent,
along with MCJF Corporation, Medi Medical Corporation, Shilo Corporation, and
E & J Trading Corporation.7
Cabrera greeted Reiche when he first arrived at the warehouse, but acted
nervous. Cabrera walked behind Reiche, told him where to sit, and watched him
the entire time. Cabrera brought Reiche into the warehouse office, where Ramallo
was talking on the phone. Cabrera, Ramallo, and Reiche went to the bay area of
the warehouse where the prescription drugs were kept. Some drugs were displayed
on a table and a hospital bed and others were stored in a refrigerator.
During the meeting, a man named Jorge Perez arrived at the warehouse with
five more boxes of prescription drugs. Cabrera told Reiche that Perez was the guy
who was bringing the drug Procrit. Cabrera said that Perez had twenty units of the
Procrit, but Cabrera had told him to bring six of them.
6
The lease contract was recovered from the warehouse.
7
The stipulation indicated that Maceira was an officer or registered agent for three active
corporations (Maceira Pet Shop, Inc.; O & N Medical and Diagnostic Center, Inc.; and Omnix
Medical Center, Inc.) and that Ramallo was an officer or registered agent for seven active
corporations (Health Research Services, Inc.; Mavic Quality Health, Inc.; Real Triana Bakery
Corporation; Mavic Medical Center; Griffin Health Institute, LLC; All Technical Repairs, Inc.;
and Professional Medical Lab, Inc.).
9
Ramallo and Cabrera began taking inventory of the drugs brought by Perez.
Ramallo noted that some of the drug labels were scratched. Cabrera was standing
only five or six feet away when Ramallo said this. Ramallo also asked Reiche in
Cabrera’s presence if Reiche wanted to buy the drugs with or without papers.
Reiche questioned Ramallo and Cabrera as to the drug quantities available and, on
multiple occasions, Cabrera answered Reiche’s questions. Specifically, when
Reiche asked about the availability of the prescription drug Kaletra, Cabrera told
Reiche that, “I had exactly thirty-six (36), and I gave them to somebody”8 and later
said, “We have ways of ordering it.”
While Cabrera was taking inventory of the newly arrived drugs, Reiche
commented, in reference to those drugs, “Well, that’s stolen.” Ramallo responded,
“Yes, it comes like that. I don’t really care how they bring it, anyway.” Reiche
testified that he noticed that the drugs that were unloaded had Federal Express
shipping labels indicating that they were shipped from Pfizer to a Cardinal
distributor in Greensboro, North Carolina. Ramallo removed the shipping labels
from the boxes and told someone to throw them outside. Cabrera was taking
inventory of the drugs in the boxes when Ramallo said this. Ramallo indicated that
he would set aside the five new boxes of drugs for Reiche.
8
Reiche indicated that Cabrera’s statement, which was in Spanish, could have been
interpreted as either “I” or “we.”
10
With Cabrera present, Reiche later asked Ramallo, “[W]here do those come
from? Stolen?” Ramallo responded, “I don’t know. . . . I have never asked them,
pal. You know what I’m saying?” Later, when Cabrera was apparently no longer
present, Reiche asked how much it would cost for all of the drugs he wanted.
Ramallo responded that he and Cabrera would “both sit for a bit” and then Ramallo
would give Reiche a total. Ramallo gave Reiche a copy of a new drug inventory
list that Cabrera had made reflecting the drugs that had just arrived.
E. March 29 Meetings, Drug Transaction, and Arrests
On March 29, 2006, Reiche met with Ramallo again in the same parking lot
behind a Hooter’s restaurant. Ramallo was driving Cabrera’s car, but Cabrera was
not present. In the course of telling Reiche a story regarding another prescription
drug transaction, Ramallo admitted to Reiche that he dealt in stolen drugs.
Ramallo and Reiche discussed the deal for the drugs Reiche had previously
requested, and Ramallo told him the price would be $223,411.47.
After the March 29 meeting, Reiche called Ramallo, but Cabrera answered
Ramallo’s phone. Cabrera told Reiche that he was heading towards where Ramallo
was and would be there in fifteen minutes. Cabrera also said that Ramallo told him
to tell Reiche that the other drugs that he wanted would be ready that afternoon.
When Reiche asked about the final price, Cabrera said he did not know so he
11
would talk to Ramallo and call him back in fifteen minutes.
Later that day on March 29, 2006, Reiche again met with Ramallo and
Cabrera at Cabrera’s warehouse. Reiche noted that the drugs that were previously
on the table and hospital bed were not there. Cabrera exited the warehouse,
removed a box containing prescription drugs from his vehicle parked outside, and
brought it into the warehouse. Cabrera started to take inventory of the prescription
drugs in the box in the bay area of the warehouse. Ramallo and Reiche exited the
warehouse and walked to Reiche’s car to retrieve the checks to pay for the drugs.
Reiche then gave the takedown signal and law enforcement moved in and
apprehended Ramallo and Cabrera. Cabrera was inside the warehouse when he
was arrested.9
Following the arrests, law enforcement searched the warehouse and
recovered prescription drugs, patient records, and medical equipment. The box
Cabrera retrieved from the car contained a variety of prescription drugs. Jacinta
Batson, a forensic chemist with the FDA Forensic Chemistry Center, testified that
she tested samples of drugs seized in this case and that they revealed signs of
9
Gabriel Rodriguez, a detective with the Miami-Dade Police Department who provided
security for Reiche at the warehouse on March 29, 2006, testified that the “subjects,” one of
whom was Cabrera, arrived a few minutes after Reiche. They were inside the warehouse for
approximately 15 to 20 minutes. Cabrera then went outside, removed a box from the back of his
car, and returned to the warehouse with the box. A few minutes later, Reiche and Ramallo
exited the warehouse, and Reiche gave the arrest signal.
12
counterfeiting and diversion. Specifically, Batson testified that the tests revealed
that the drugs were authentic, but that the adhesive used to attach the outserts on
some containers was different from that used by the manufacturer, the outserts and
labels on many of the containers were not authentic, and the bottles and boxes of
some drugs contained blotches that were consistent with diverted products.
The parties stipulated that a November 10, 2005 Federal Express shipment
of thirteen pallets of prescription drugs from Pfizer in New Jersey to a Cardinal
health facility in Greensboro, North Carolina was stolen near Harrisburg,
Pennsylvania. The drugs recovered in Cabrera’s warehouse that were brought by
Perez on March 22 had the same lot numbers as the stolen drugs. The stipulation
listed nineteen drugs involved in the case that had traveled in interstate commerce.
The government also presented testimony from Valeria Williams from the
Florida Department of Health that there were no Florida licenses to engage in
wholesale distribution of prescription drugs issued to Cabrera, Maceira, or Ramallo
or any of the corporations for which they were officers or registered agents.
Williams further testified that no one had a license for wholesale distribution of
prescription drugs at the address of Cabrera’s warehouse.
Cabrera did not testify, but introduced one exhibit in his defense that showed
that Ramallo’s driver’s license was suspended on March 7, 2006.
13
F. Jury Instructions
Before trial, the government submitted proposed jury instructions and a
supporting memorandum that argued, inter alia, that the district court should depart
from the Eleventh Circuit Pattern Jury Instruction defining “willfully” because it
required the jury to find that the defendant acted “with bad purpose either to
disobey or disregard the law.” The government’s memorandum argued that the
pattern instruction erred in making knowledge of the law an element of all
conspiracy prosecutions, regardless of whether such knowledge would be required
to prove the charged object as a substantive offense. The government contended
that neither of the charged object offenses in this case required the government to
prove willfulness or knowledge of the law as an element.
The district court rejected the government’s proposed change to the pattern
jury instruction because the case involved a specific intent crime as an object of the
conspiracy. However, the district court agreed with the government that lack of
knowledge of the law was not a defense and informed the parties that it would add
language from United States v. Starks, 157 F.3d 833 (11th Cir. 1998), to the
pattern jury instruction stating that a person need not be aware of the specific law
or rule that his conduct may be violating, but he must act with the intent to do
something that is unlawful.
14
Cabrera and codefendant Maceira objected to this change to the jury
instruction and requested to reserve argument on the instruction because the
evidence in this case was materially different from Starks. They contended that
Starks involved kickbacks, which are malum per se because everyone knows they
are illegal, whereas this case involved a malum prohibitum offense in a
complicated regulatory field where it was not common knowledge that the
defendants were acting unlawfully.
Cabrera renewed this objection when the district court returned to the
discussion of the jury instruction at trial. The government responded that Starks
concerned a conspiracy to violate an anti-kickback statute that had a willfulness
requirement, whereas the underlying statute here did not.
The district court overruled Cabrera’s objection to the jury instruction. The
district court stated that Cabrera’s argument “defies common sense” because it
would not make sense for the manufacturing and distribution of prescription drugs
from a manufacturer to be controlled, but for there not to be any regulation of the
chain of custody from the manufacturer to the pharmacy. The district court stated
that it would follow Starks, because, like kickbacks, everyone knows that
prescription drugs are highly regulated and can be dispensed only with a
prescription. The district court stated that prescription drugs were an industry
15
where “it’s common sense that before anyone gets engaged in it, that you go and
find out the terms of what you’re dealing with” and that you “make sure that
you’ve crossed your T’s and dotted your I’s before you engage in this type of
business.” The district court clarified that “[y]ou don’t have to know the specifics
of the statute” at issue.
At the end of the trial, the district court instructed the jury on the four
elements that the government had to prove to establish a conspiracy violation,
which included “that the defendant, knowing the unlawful purpose of the plan,
willfully joined in it.” The district court further explained to the jury that:
The word “willfully,” as that term is used in the Indictment or
in these instructions, means that the act was done voluntarily and
purposefully, and with the intent to do something the law forbids; that
is, with the bad purpose to disobey or to disregard the law. A person
need not be aware of the specific law or rule that his conduct may be
violating. But he must act with the intent to do something that is
unlawful.
The district court also instructed the jury that the FDCA violation that was charged
as an object of the conspiracy and as a separate substantive offense required the
government to prove “that the defendant acted knowingly and with the intent to
defraud or mislead.” The district court explained to the jury that “‘[t]o act with
intent to defraud’ means to act knowingly with the specific intent to deceive or
cheat one, ordinarily for the purpose of causing some financial loss to another or
16
bringing about some financial gain to oneself.”
G. Jury Verdict
The district court denied Cabrera’s motions for a judgment of acquittal at the
close of the government’s case and at the end of the trial. The jury convicted
Cabrera on both counts of the indictment and specifically found that Cabrera had
conspired to achieve both objects of the conspiracy charged in Count One.
H. Sentencing
The Presentence Investigation Report (“PSI”) assigned a base offense level
of six, pursuant to U.S.S.G. § 2B1.1(a)(2), and applied a fourteen-level
enhancement, pursuant to § 2B1.1(b)(1)(H), based on the loss amount of
$403,248.51.10 This loss amount included: (1) a WAC of $15,220.32 for the stolen
drug shipment from Pfizer; and (2) $388,028.19 for the remaining drugs involved
in the conspiracy, which represented the amount Medicaid would have paid for the
drugs because they were likely purchased from Medicaid recipients.11 The PSI did
not recommend a role reduction because Cabrera worked closely with Ramallo and
10
The PSI also initially applied a two-level enhancement, pursuant to § 2B1.1(b)(4),
because Cabrera was a person in the business of receiving and selling stolen property, but later
eliminated this enhancement.
11
On appeal, Cabrera does not challenge the calculation of the loss amount under the
guidelines. Rather, as noted later, Cabrera contends only that the loss amount overstated the
seriousness of the offense and thus warranted a downward departure or a downward variance
from the advisory guidelines range.
17
was more familiar with the drug inventory than Ramallo. Based on a total offense
level of twenty and a criminal history category of I, Cabrera’s advisory guidelines
range was thirty-three to forty-one months’ imprisonment. The PSI also indicated
that Cabrera owed $15,220.32 in restitution to Pfizer and $388,028.19 in restitution
to the Center for Medicare/Medicaid Services.
Cabrera objected to the PSI’s failure to recommend a role reduction and to
its loss amount calculation on several grounds. He also requested a downward
departure or sentence variance because the offense was non-violent and aberrant
behavior for him, his involvement was minimal, and the loss amount overstated his
culpability.
At sentencing, the district court used solely the WAC (and not what
Medicaid likely would have paid) to calculate the loss amount for all of the drugs
involved in the conspiracy, which changed the loss amount to $379,085.16 and
thus decreased the loss-amount enhancement from fourteen to twelve levels. This
changed Cabrera’s offense level to eighteen and his advisory guidelines range to
twenty-seven to thirty-three months’ imprisonment.
The district court denied Cabrera’s requests for a role reduction or a
downward departure. The district court explained that Cabrera knew what he was
doing because he had been in the business world and in the Medicare field, that he
18
had provided important infrastructure to the conspiracy, and that the circumstances
were not extraordinary because there was no indication of remorse or acceptance of
responsibility. The district court found that Cabrera was more than just a landlord
of the warehouse because Cabrera (1) was more familiar with the drug inventory
than Ramallo, (2) took careful inventory of the drugs in the warehouse, (3) handled
deliveries, (4) was involved in setting prices, and (5) participated in the aborted
March 29 sale by bringing prescription drugs worth nearly $400,000 from his car
into the warehouse.
The district court also declined to vary downward from the advisory
guidelines range. The court stated that it realized this was Cabrera’s first offense,
but it had to consider all of the 18 U.S.C. § 3553(a) factors, including the need to
avoid unwarranted sentencing disparities. The district court opined that diversion
of pharmaceuticals was a serious matter with serious health consequences. Stating
that it had considered the statements of the parties, the PSI, the advisory guidelines
range, and the statutory factors, the district court sentenced Cabrera to twenty-
seven months’ imprisonment on both counts, to be served concurrently. The
district court ordered Cabrera to pay $379,085.16 in restitution, which consisted of
$15,220.32 to Pfizer and the remaining $363,864.84 to Medicaid. After the
sentence was imposed, Cabrera renewed his earlier objections.
19
II. DISCUSSION
On appeal, Cabrera raises the following arguments: (1) the district court
erred in failing to instruct the jury that it had to find that Cabrera acted with
knowledge of the specific law he was violating and, by doing so, constructively
amended the indictment;12 (2) the evidence was insufficient to convict Cabrera of
the two charges; (3) the district court erred in denying Cabrera a downward
departure on the grounds that the loss amount overstated the seriousness of the
offense;13 (4) the district court erred in denying Cabrera a mitigating role
12
We review de novo the legal correctness of a jury instruction, but give the district courts
broad discretion in phrasing jury instructions, so long as the charge as a whole accurately reflects
the law and the facts. United States v. Mintmire, 507 F.3d 1273, 1292-93 (11th Cir. 2007). We
will not reverse a conviction based on a jury instruction unless “‘the issues of law were
presented inaccurately, or the charge improperly guided the jury in such a substantial way as to
violate due process.’” Id. at 1293 (quoting United States v. Prather, 205 F.3d 1265, 1270 (11th
Cir. 2000)).
A jury instruction that constructively amends an indictment is normally per se reversible
error because such an amendment violates a defendant’s Fifth Amendment right to be charged
by a grand jury indictment. United States v. Keller, 916 F.2d 628, 636 (11th Cir. 1990). “In
evaluating whether the indictment was constructively amended, we review the district court’s
jury instructions . . . ‘in context’ to determine whether an expansion of the indictment occurred
either literally or in effect.” United States v. Castro, 89 F.3d 1443, 1450 (11th Cir. 1996).
13
In reviewing loss calculations, which involve both legal and factual issues, we review a
district court’s factual findings for clear error and its application of the guidelines de novo.
United States v. Gupta, 463 F.3d 1182, 1199 (11th Cir. 2006), cert. denied, __ U.S. __, 127 S.
Ct. 2446 (2007). We lack jurisdiction to review a district court’s discretionary decision not to
apply a downward departure, but we review de novo whether a district court mistakenly believed
that it lacked the authority to depart. United States v. Pressley, 345 F.3d 1205, 1209 (11th Cir.
2003).
20
reduction;14 (5) the district court applied presumptive weight to the guidelines and
imposed a substantively unreasonable sentence;15 and (6) the district court erred in
its restitution order because the government failed to prove that anyone in fact
suffered that amount of loss and because it was imposed based on judicial fact
findings in violation of Cabrera’s Fifth and Sixth Amendment rights under United
States v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005).16 After thorough review,
we affirm Cabrera’s convictions and twenty-seven-month sentences, except for the
restitution ordered to Medicaid. Only three of these six issues–the jury
instructions, sufficiency of the evidence, and restitution award–warrant further
discussion.
A. Jury Instructions
A conviction for criminal conspiracy requires proof of at least the degree of
14
A district court’s determination of a defendant’s role in an offense is a finding of fact
that we review for clear error. United States v. De Varon, 175 F.3d 930, 937-38 (11th Cir. 1999)
(en banc).
15
We review sentences under a deferential abuse-of-discretion standard in which we
consider (1) whether the district court committed any significant procedural error at sentencing,
and (2) whether the ultimate sentence imposed is substantively reasonable in light of the totality
of the circumstances. See United States v. Pugh, 515 F.3d 1179, 1189-90 (11th Cir. 2008).
16
We review de novo the legality of a restitution order and review a factual finding
regarding the specific restitution amount for clear error. United States v. Foley, 508 F.3d 627,
632 (11th Cir. 2007).
21
criminal intent required for conviction of the underlying substantive offense.17
United States v. Simmons, 725 F.2d 641, 643 (11th Cir. 1984). The first object of
the conspiracy in Count One and the substantive offense in Count Two were the
same: that Cabrera violated 21 U.S.C. §§ 331(t), 333(a)(2), and 353(e)(2)(A) of the
FDCA.
More specifically, § 331(t) prohibits the distribution of drugs in violation of
21 U.S.C. § 353(e). 21 U.S.C. § 331(t). In turn, § 353(e)(2)(A) restricts the
wholesale distribution in interstate commerce of drugs in a state without being
licensed to do so by that state. 21 U.S.C. § 353(e)(2)(A). And § 333(a)(2) makes a
violation of § 331 a felony when a defendant acts “with the intent to defraud or
mislead.”18 21 U.S.C. § 333(a)(2); United States v. Bradshaw, 840 F.2d 871, 872
(11th Cir. 1988). Thus, to prove the first object of the conspiracy and the
substantive offense, the government had to show that Cabrera conspired to engage
in the wholesale distribution in interstate commerce of drugs without being
licensed to do so, with the intent to defraud or mislead.
Cabrera contends that the government was also required to prove that he
17
On appeal, Cabrera does not challenge the jury instructions as to the second object of
the conspiracy, violating 18 U.S.C. § 2314, or as to Count Two of the indictment.
18
Violating § 331, irrespective of any particular mens rea, is a misdemeanor. See 21
U.S.C. § 333(a)(1) (providing that any person who violates 21 U.S.C. § 331 shall be imprisoned
not more than a year); United States v. Bradshaw, 840 F.2d 871, 872 (11th Cir. 1988) (stating
that a violation of 21 U.S.C. § 331 is a “misdemeanor[] regardless of the violator’s intent.”).
22
acted with knowledge of the specific law he was violating because the charged
FDCA violation was a malum prohibitum offense in a complicated regulatory field
that would not be obviously illegal. Cabrera argues that the district court erred in
instructing the jury that the term “willfully” means that a defendant “must act with
the intent to do something that is unlawful,” but that “[a] person need not be aware
of the specific law or rule that his conduct may be violating.”
This Court addressed and rejected a similar mens rea argument in Starks.
The defendants in Starks were charged with and convicted of violating an anti-
kickback provision of the Social Security Act, which prohibited “knowingly and
willfully solicit[ing] or receiv[ing] any remuneration” for referrals for services
covered by the federal government. Starks, 157 F.3d at 837. The district court in
Starks instructed the jury that the term willfully “means the act was committed
voluntarily and purposely, with the specific intent to do something the law forbids,
that is with a bad purpose, either to disobey or disregard the law.” Id. at 838.
In affirming in Starks, this Court discussed the jury instruction in Bryan v.
United States, 524 U.S. 184, 118 S. Ct. 1939 (1998), about “willfully” dealing in
firearms without a federal license under 18 U.S.C. § 924(a)(1)(D). The Supreme
Court in Bryan concluded that “a jury may find a defendant guilty of violating a
statute employing the word ‘willfully’ if it believes ‘that the defendant acted with
23
an evil-meaning mind, that is to say, that he acted with knowledge that his conduct
was unlawful.’” Starks, 157 F.3d at 838 (quoting Bryan, 524 U.S. at 193, 118 S.
Ct. at 1946). Bryan distinguished tax or financial cases that “‘involved highly
technical statutes that presented the danger of ensnaring individuals engaged in
apparently innocent conduct.’” Id. (quoting Bryan, 524 U.S. at 194, 118 S. Ct. at
1946-47). In contrast, Bryan determined that “[t]he danger of convicting
individuals engaged in apparently innocent activity that motivated our decisions in
the tax cases . . . is not present here because the jury found that this petitioner knew
that his conduct was unlawful.” Bryan, 524 U.S. at 195, 118 S. Ct. at 1947. The
Supreme Court in Bryan concluded that “the willfulness requirement of
§ 924(a)(1)(D) does not carve out an exception to the traditional rule that ignorance
of the law is no excuse; knowledge that the conduct is unlawful is all that is
required.” Id. at 196, 118 S. Ct. at 1947.
Similarly to Bryan, this Court in Starks concluded that the anti-kickback
statute at issue “is not a highly technical tax or financial regulation that poses a
danger of ensnaring persons engaged in apparently innocent conduct.” Id. Starks
stated that “the giving or taking of kickbacks for medical referrals is hardly the sort
of activity a person might expect to be legal” and that “such kickbacks are more
clearly malum in se, rather than malum prohibitum.” Id. Thus, there was no error
24
in the district court’s instruction. Id. at 839.
In light of Starks and Bryan, we find no error in the district court’s jury
instruction here on the term “willfully.” Similar to the willful dealing in firearms
without a license discussed in Bryan, the FDCA violation charged here of
wholesale distribution of prescription drugs without a license is not the type of law
that poses a danger of ensnaring potentially innocent conduct. As the district court
here noted, it is common knowledge that prescription drugs, similar to firearms, are
highly regulated in order to ensure the public’s safety.
Furthermore, the FDCA substantive crime at issue here does not contain an
explicit requirement of a willful violation like those at issue in Starks and Bryan.
21 U.S.C. §§ 331(t), 333(a)(2), 353(e)(2)(A). Instead, it requires the heightened
intent that Cabrera acted “with the intent to defraud or mislead.” 21 U.S.C.
§ 333(a)(2). The district court defined the term “willfully” for the jury, in part,
because the indictment charged that Cabrera willfully entered the conspiracy, not
because the FDCA offense contains a willfulness requirement.
Cabrera also has provided no support for his argument that the district court
should have read into the FDCA a requirement that he acted with knowledge of the
specific provision of the FDCA he was violating. The cases from other circuits
cited by Cabrera acknowledge only that the “intent to defraud or mislead” required
25
for a felony violation must be connected to the charged substantive violation and
that there must be knowledge of the essential nature of the fraud. See United
States v. Geborde, 278 F.3d 926, 930 (9th Cir. 2002); United States v. Arlen, 947
F.2d 139, 143 (5th Cir. 1991); United States v. Mitcheltree, 940 F.2d 1329, 1349-
50 (10th Cir. 1991); United States v. Hiland, 909 F.2d 1114, 1128 (8th Cir. 1990).
But those cases do not state that knowledge of the specific FDCA law being
violated is required for a felony violation of the FDCA. To the contrary, the
Eighth Circuit’s decision in Hiland states that “there is nothing in § 333(a)(2), or
elsewhere in the FDCA, that evidences a congressional intent to create such an
exception to ‘the general rule that ignorance of the law is no excuse.’” Hiland, 909
F.2d at 1129 n.21 (quoting United States v. Int’l Minerals & Chem. Corp., 402
U.S. 558, 563, 91 S. Ct. 1697, 1701 (1971)).
Accordingly, the district court properly determined that the FDCA violation
at issue here did not carve out an exception to the general rule that ignorance of the
law is not an excuse and, as in Starks and Bryan, the district court properly
instructed the jury that the charged offenses required that Cabrera “need not be
aware of the specific law or rule that his conduct may be violating” but “must act
with the intent to do something that is unlawful.” Thus, we discern no error in the
26
district court’s jury instruction defining the term “willfully.” 19
B. Sufficiency of the Evidence
Cabrera also argues that the evidence was insufficient to show that he
knowingly and willfully participated in the conspiracy or that he knowingly
committed the substantive FDCA offense. Cabrera notes that Ramallo held
himself out as a doctor and contends that he only served as a chauffeur for Ramallo
on a few occasions and carried out his duties as a warehouse owner.
After thorough review of the record, we conclude there is ample evidence to
support the jury’s verdict convicting Cabrera on both counts. Viewing the
evidence in the light most favorable to the government, the evidence of Cabrera’s
active participation in both the March 22 prescription drug sale and the planned
March 29 prescription drug sale and his extensive knowledge and involvement
with the prescription drug inventory, including the sources of those drugs, is more
than sufficient to support a reasonable jury inference that Cabrera had the required
mens rea to commit both offenses.
C. Restitution
The PSI stated that, other than the stolen shipment of drugs from Pfizer,
19
Because we find no error in the district court’s jury instruction, we also reject Cabrera’s
argument that the district court’s jury instruction constituted a constructive amendment of the
indictment.
27
“[t]he remaining drugs in this conspiracy were diverted drugs, purchased from
retail pharmacies, usually by Medicaid.” The PSI calculated the price that
Medicaid would have paid for these diverted drugs and recommended that the
district court order restitution to the Center for Medicare/Medicaid Services.
At sentencing, the government stated that it knew that Pfizer was the source
of the small stolen shipment, but conceded that it did not know the source of the
other drugs involved in the conspiracy. The government admitted that as to “[t]he
remainder of the drugs, there would be no way to determine at what point that they
were either stolen or obtained by fraud, although the evidence indicated, at least for
a large portion of them, that they appeared to be diverted.” Nevertheless, the
district court ordered that Cabrera pay $363,864.84 in restitution to Medicaid.
The government bears the burden of proving the victim and the restitution
owed by a preponderance of the evidence. 18 U.S.C. § 3664(e). On appeal, the
government concedes that, other than Pfizer, it failed to meet its burden of proof of
an identifiable victim to whom restitution could be awarded. The government
admits that the evidence presented at trial that Medicaid fraud is the most common
form of prescription drug diversion was insufficient to establish that Medicaid was
the actual victim in this case. We agree and thus vacate the district court’s award
of $363,864.84 in restitution to Medicaid.
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III. CONCLUSION
We vacate the district court’s restitution award to Medicaid. However, we
affirm Cabrera’s convictions and twenty-seven-month sentences in all other
respects.
AFFIRMED IN PART; VACATED IN PART.
29