United States v. Joseph Carozza ( 2015 )

FILED
NOT FOR PUBLICATION APR 14 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 13-10172
Plaintiff - Appellee, D.C. No. 3:10-cr-00642-CRB-6
v.
MEMORANDUM*
JOSEPH CAROZZA,
Defendant - Appellant.
UNITED STATES OF AMERICA, No. 13-10179
Plaintiff - Appellee, D.C. No. 3:10-cr-00642-CRB-2
v.
DANIEL JOHNSON,
Defendant - Appellant.
UNITED STATES OF AMERICA, No. 13-10198
Plaintiff - Appellee, D.C. No. 3:10-cr-00642-CRB-1
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
v.
CHRISTOPHER NAPOLI,
Defendant - Appellant.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, Senior District Judge, Presiding
Argued and Submitted March 10, 2015
San Francisco, California
Before: BYBEE, CALLAHAN, and OWENS, Circuit Judges.
Defendants-Appellants Chris Napoli, Daniel Johnson, and Joseph Carozza
(“Defendants”) appeal their convictions for conspiracy to distribute and possess
with intent to distribute Schedule III and IV controlled substances in violation of
21 U.S.C. § 846, and possession with intent to distribute a Schedule IV controlled
substance in violation of 21 U.S.C. § 841(a)(1), (b)(2), arising out of the operation
of an internet pharmacy. Napoli and Johnson also appeal their convictions for
conspiracy to launder money in violation of 18 U.S.C. § 1956(a)(2)(A), (h).
Defendants argue that the district court abused its discretion by excluding certain
evidence at trial: the testimony of a DEA Administrator, a Congressional Research
Service Report, and portions of a civil complaint filed by Defendants Napoli and
Carozza seeking declaratory relief. Defendants also contend that the district court
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erred in its formulation of jury instructions. Defendants further assert that the
district court should have dismissed the indictment because DEA witnesses
testified inaccurately before the grand jury. We have jurisdiction under 28 U.S.C.
§ 1291, and we affirm.
1. The district court did not abuse its discretion by excluding
Defendants’ proffered evidence at trial. Both the Fifth Amendment right to due
process and the Sixth Amendment right to compulsory process “guarantee[]
criminal defendants a meaningful opportunity to present a complete defense.”
United States v. Stever, 603 F.3d 747, 755 (9th Cir. 2010) (internal quotation
marks omitted). The admissibility of proffered evidence is reviewed under an
abuse of discretion standard. United States v. Orm Hieng, 679 F.3d 1131, 1141
(9th Cir. 2012). “‘We may affirm the district court’s evidentiary ruling on any
grounds supported by the record.’” Id. (quoting United States v. Ibarra-Pino, 657
F.3d 1000, 1005 (9th Cir. 2011)). Even “where the district court did not explicitly
exclude the evidence under Rule 403, the appellate court may affirm the district
court based on Rule 403.” United States v. Blaylock, 20 F.3d 1458, 1464 (9th Cir.
1994).
The district court could have concluded that the probative value of the
excluded evidence was “substantially outweighed by a danger of . . . unfair
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prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.” Fed. R. Evid. 403. Defendants assert
that the proffered evidence had a tendency to demonstrate the reasonableness of
their subjective belief that their conduct complied with the statute. However, the
precise issue for the jury’s consideration was not Defendants’ belief about the law,
but rather Defendants’ good faith belief that a physician was issuing prescriptions
in the usual course of professional practice and for a legitimate medical purpose.
See United States v. Feingold, 454 F.3d 1001, 1007–08 (9th Cir. 2006). Thus, the
evidence had limited probative value. Furthermore, the district court could have
concluded that government officials’ statements about the law and Defendants’
self-serving statements in the civil complaint would obfuscate the issues for the
jury. Given these circumstances, we cannot say that the exclusion of evidence was
an abuse of discretion.
Defendants’ reliance on United States v. James, 169 F.3d 1210 (9th Cir.
1999) (en banc), is misplaced. James did not hold that all corroborating
documentary evidence must be admitted in every case. Nor did James displace the
general rule that the district court may exclude evidence under Federal Rule of
Evidence 403.
But even if the district court erred by excluding this evidence, any error was
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harmless beyond a reasonable doubt. See United States v. Pineda-Doval, 614 F.3d
1019, 1033–34 (9th Cir. 2010). First, upon review of the proffered testimony by
the DEA Administrator and the Congressional Research Service Report, this
evidence appears largely unfavorable to Defendants. Moreover, there was
overwhelming evidence at trial disproving Defendants’ good faith belief that their
physicians acted with a legitimate medical purpose and within the usual bounds of
medical practice. Defendant Carozza approved hundreds of prescriptions daily.
Carozza continued to prescribe medications in this manner even after being
interviewed by the DEA. Furthermore, the online questionnaire had no mechanism
to confirm the accuracy of the information being provided; did not ask for any
medical records; did not provide for follow-up contact; did not permit customer
consultation with a doctor; and did not require customers to submit a valid form of
identification. Each Defendant, aware of the preceding facts, stood to gain
hundreds of thousands of dollars. Thus, there was overwhelming evidence that
Defendants lacked a good faith belief that their physicians’ conduct was for a
legitimate medical purpose or was within the scope of professional standards.
2. The district court did not err in its formulation of the jury instructions.
Whether jury instructions omit or misstate elements of a statutory crime or
adequately cover a defendant’s proffered defense are questions of law reviewed de
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novo. See United States v. Hofus, 598 F.3d 1171, 1174 (9th Cir. 2010); United
States v. Morsette, 622 F.3d 1200, 1201 (9th Cir. 2010) (per curiam). A district
court’s formulation of jury instructions is reviewed for an abuse of discretion. See
Hofus, 598 F.3d at 1174. “The adequacy of jury instructions is determined by
examining them as a whole.” United States v. Ibarra-Alcarez, 830 F.2d 968, 973
(9th Cir. 1987) (citing United States v. Hayes, 794 F.2d 1348, 1351 (9th Cir.
1986)). “It is not error to refuse a proposed instruction if the other instructions,
when viewed in their entirety, cover that theory.” Id. “[S]o long as the instructions
fairly and adequately cover the issues presented, the judge’s formulation of those
instructions or choice of language is a matter of discretion.” United States v.
Melvin, 91 F.3d 1218, 1224 (9th Cir. 1996) (internal quotation marks omitted).
The district court did not err by instructing the jury that the government was
not required to prove that Defendants knew they were violating the law. None of
the underlying crimes charged required that Defendants know that they were
violating the law. See 21 U.S.C. §§ 841(a)(1), (b)(2), 846; 18 U.S.C.
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§ 1956(a)(2)(A), (h).2 A conspiracy charge does not require that the defendant
know that she is violating the law unless the underlying crime so requires. United
States v. Baker, 63 F.3d 1478, 1493 (9th Cir. 1995); see also United States v.
Hubbard, 96 F.3d 1223, 1229 (9th Cir. 1996) (“[A] federal conspiracy conviction
does not require a greater level of criminal intent than a conviction on the
substantive count.”). Nor is an aider and abettor required to have specific
knowledge that her assistance is illegal. United States v. Delgado, 357 F.3d 1061,
1068 (9th Cir. 2004); cf. United States v. McDaniel, 545 F.2d 642, 644 (9th Cir.
1976).
The district court did not err by instructing the jury that Defendants’ belief
that they were in compliance with the law or that the government lacked the
authority to enforce the law in a particular way was not, standing alone, a defense.
Defendants’ beliefs about the law as written were irrelevant, as the precise issue for
the jury’s consideration was whether Defendants believed that their physicians
2
Unlike other sections of the federal money laundering statute,
§ 1956(a)(2)(A) does not require the defendant know that the property involved
constitutes the proceeds of unlawful activity. Compare 18 U.S.C. § 1956(a)(2)(A),
with id. § 1957(a); see also United States v. Turman, 122 F.3d 1167, 1169 (9th Cir.
1997) (holding that under a different statute, 18 U.S.C. § 1957, the government
was required to prove the defendant knew the laundered funds were derived from
illegal activity), abrogated on other grounds by Henderson v. United States,
— U.S. —, 133 S. Ct. 1121 (2013).
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were issuing prescriptions in the usual course of professional practice and for a
legitimate medical purpose. See Feingold, 454 F.3d at 1007–08. Likewise,
Defendants’ purported belief that the DEA lacked authority to enforce the law in a
particular way would be irrelevant and not a defense to the crimes charged. See
Cheek v. United States, 498 U.S. 192, 204–06 (1991) (district court properly
instructed jury to disregard the defendant’s assertion that tax laws were
unconstitutional).
The district court’s jury instructions did not permit the jury to convict
Defendants based on a physician’s mere malpractice. The district court was
acutely aware of this risk, and added the express instruction: “It is not enough for
the United States to prove that a practitioner committed malpractice, intentional or
otherwise.”
The district court did not err by refusing to instruct the jury regarding
in-person examinations, the Ryan Haight Act, or the distinction between lay
people, and professional physicians and pharmacists. Rather, the district court
properly instructed the jury to consider all of the evidence in determining whether
Defendants acted in good faith. See Hofus, 598 F.3d at 1174.
The district court also had a sufficient basis to instruct the jury that it could
find Defendants acted knowingly if the jury found that Defendants were
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deliberately ignorant. See United States v. Heredia, 483 F.3d 913, 918 (9th Cir.
2007) (en banc).
3. Finally, any misstatements by the DEA agents before the grand jury
were rendered harmless by the petit jury’s guilty verdict. “[A] petit jury’s verdict
of guilty beyond a reasonable doubt demonstrates a fortiori that there was probable
cause to charge the defendants with the offenses for which they were convicted.”
United States v. Mechanik, 475 U.S. 66, 67 (1986); see also United States v.
Bingham, 653 F.3d 983, 998–99 (9th Cir. 2011). Defendants contend that under
Bank of Nova Scotia v. United States, we may reverse their convictions if we find
“[a] violation substantially influenced the grand jury’s decision to indict or if there
is grave doubt that the decision to indict was free from the substantial influence of
such violations.” 487 U.S. 250, 256 (1988) (internal quotation marks omitted).
But Bank of Nova Scotia applies only when the district court considers a motion to
dismiss the indictment prior to the petit jury verdict. United States v. Navarro, 608
F.3d 529, 539–40 (9th Cir. 2010). Therefore, the district court did not err by
denying Defendants’ motion to dismiss the indictment after the petit jury rendered
its guilty verdict convicting Defendants.
AFFIRMED.
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