United States v. Iggy Santisteban ( 2007 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 06-3409
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United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
Iggy Santisteban, *
*
Appellant. *
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Submitted: May 17, 2007
Filed: September 7, 2007 (Corrected 9/17/07)
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Before MURPHY, HANSEN, and COLLOTON, Circuit Judges.
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COLLOTON, Circuit Judge.
After a four-day trial, a jury convicted Iggy Santisteban of conspiracy to
defraud the United States, in violation of 18 U.S.C. § 371. The district court1
sentenced Santisteban to a prison term of thirty-seven months. Santisteban appeals
several of the district court’s rulings at trial, and we affirm.
1
The Honorable Ortrie D. Smith, United States District Judge for the Western
District of Missouri.
I.
Santisteban was involved in an international conspiracy to manufacture and
distribute counterfeit prescription drugs. The conspiracy involved importing,
manufacturing, and misbranding prescription drugs. Santisteban’s printing business
produced labels for the counterfeit drugs, and accepted payment from the other
conspirators for the fraudulent labels.
Santisteban’s defense at trial was that his participation was unwitting. The
central figure of the conspiracy was Julio Cruz, a former cocaine dealer, whose
cooperation with the government in an unrelated case had enabled him to leave prison
early. After securing his release, Cruz, with the assistance of two men he had met in
prison, began smuggling prescription drugs into the United States from Central and
South America. The conspiracy also involved the theft and unauthorized manufacture
of prescription drugs.
Before meeting Cruz, Santisteban owned a struggling printing business in South
Florida, known as Iggyprints. A mutual friend introduced Cruz to Santisteban, and
at this meeting, Cruz asked Santisteban if he could reproduce a label for Pfizer’s anti-
cholesterol drug Lipitor. After stating that he could re-print the label, Santisteban
quoted a price for printing labels, at about 50% above what he typically would have
charged. Cruz immediately agreed. Cruz testified that Santisteban requested a
purchase order, or some other documentation, to authorize his reproduction of the
labels. When FDA agents initially questioned Santisteban, he told them that he had
received a letter on Pfizer stationery authorizing him to go ahead with the print job,
but he could not retrieve this document for the agents. Later, he produced a letter
written on Pfizer letterhead, although the heading indicated that it was from Pfizer in
Brazil, and the text of the letter merely requested “a competitive quote,” not the
printing of labels. Santisteban eventually printed over forty different drug labels at
Cruz’s direction, including labels for non-Pfizer drugs. Santisteban came to the
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attention of law enforcement during the course of an investigation into counterfeit
Lipitor and Lipitor labels.
The jury convicted Santisteban of conspiring to defraud the United States. The
theory of the prosecution was that the conspiracy evaded the Food and Drug
Administration’s regulatory control and thus defrauded the United States. The district
court sentenced Santisteban to a term of thirty-seven months’ imprisonment, and
ordered restitution of $1,806,905 to Pfizer.
II.
A.
Santisteban’s first contention is that the government violated his rights under
the Due Process Clause by failing to disclose certain impeachment evidence. Before
trial, the government disclosed to the defense a prosecution memorandum, which
outlined the government’s case. Santisteban argues that the government violated his
rights by refusing to disclose certain investigative reports that provided the basis for
portions of the memorandum.
Santisteban’s defense was that he believed Cruz to be a legitimate businessman,
and that he relied on the Pfizer letter as authorization for the reproduction of labels for
Pfizer drugs. At trial, however, Cruz testified that Santisteban had requested the letter
merely to “cover his ass,” and not because he believed it actually authorized the
reproduction of labels. Cruz testified that he gave Santisteban the letterhead, which
included a signature, but that the body of the letter was blank when he gave the
letterhead to Santisteban. On cross-examination, Cruz testified that Santisteban had
forged and backdated the body of the letter.
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Contrary to Cruz’s testimony, however, the prosecution memorandum suggests
that Santisteban did not forge the body of the letter from Pfizer. Instead, it states that
Pablo Fernandez, one of Cruz’s associates, “created a fake/forged authorization letter
. . . and Cruz furnished it to Santisteban.” When Santisteban sought discovery of
agent reports of Cruz’s statements, believing that these would reveal the source of the
apparent inconsistency, the government refused to provide them. The district court
rejected Santisteban’s claim that the prosecution memorandum provided a foundation
for further discovery, concluding that there was no clear inconsistency between the
prosecution memorandum and Cruz’s testimony. Cruz had testified that he had
provided the letterhead, and that Santisteban forged the body of the letter and
backdated it. The court reasoned that the prosecution memorandum may have referred
only to the creation of the letterhead, and not to the forgery of the body of the letter.
The Due Process Clause of the Fifth Amendment requires the government to
disclose to the accused favorable evidence that is material to guilt or punishment and
not otherwise available to the defendant. See United States v. Bagley, 473 U.S. 667,
678 (1985); Brady v. Maryland, 373 U.S. 83, 87 (1963). To prove a violation, the
defendant must show that the evidence was both favorable and material, and that the
government suppressed the evidence. United States v. Barraza-Cazares, 465 F.3d
327, 333 (8th Cir. 2006). The government has suppressed evidence when it was
otherwise unavailable to the defendant, and the prosecution failed to disclose the
evidence in time for the defendant to use it. Id. at 334. Thus, “[t]he government does
not suppress evidence in violation of Brady by failing to disclose evidence to which
the defendant had access through other channels.” United States v. Zuazo, 243 F.3d
428, 431 (8th Cir. 2001).
Santisteban argues that the government violated the Brady rule by refusing to
provide him with the agent reports that were the basis for the memorandum’s assertion
that Fernandez, and not Santisteban, forged the letter from Pfizer. We agree with
Santisteban that the substance of the memorandum was inconsistent with Cruz’s
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testimony on this point. Nonetheless, we conclude that Santisteban’s due process
claim fails, because he has not demonstrated that the requested information was
material to the defense or that it was unavailable to him through other channels.
We observe first that although counsel cross-examined Cruz regarding the
authorship of the letter, he never confronted Cruz with the reported inconsistent
statement set forth in the prosecution memorandum. This is significant for two
reasons. First, if Cruz had been asked whether he told the government that Fernandez
created the letter, then Cruz may have admitted the prior inconsistent statement, and
the desired impeachment would have been accomplished. Santisteban did not exhaust
this readily available avenue to present evidence of the inconsistency. Second, before
Santisteban could have offered extrinsic evidence of a prior statement by Cruz
(presumably through the agent whose identity he sought), he was required by the rules
of evidence to afford Cruz an opportunity to explain or deny the statement. Fed. R.
Evid. 613(b). Having failed to lay a proper foundation for admission of the extrinsic
evidence, Santisteban is hard pressed now to demonstrate that the unavailability of the
extrinsic evidence was prejudicial to his defense.
Santisteban also failed to pursue another readily available channel to determine
the source of the information in the prosecution memorandum. The defense presented
at trial a recording of FDA Agent Spencer Morrison questioning Cruz about the Pfizer
letter. The cross-examination of Cruz revealed that he had spoken with Morrison on
multiple occasions during the course of his cooperation. Later in the trial, the defense
even called Morrison as a witness, but failed to question him about Cruz’s prior
statements concerning the Pfizer letter. We think it is highly likely that Morrison, as
an FDA agent known to have discussed the letter with Cruz and to have
communicated with him several times during the investigation, was in a position either
to confirm that he was the source of the information in the prosecution memorandum,
or to identify another investigator who reported the statement. Yet Santisteban did not
broach the topic with Morrison. In view of the opportunity to examine this
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investigating agent on the topic, we do not believe the requested information about
Cruz’s prior statement to the government was unavailable to Santisteban. See Hoke
v. Netherland, 92 F.3d 1350, 1355 (4th Cir. 1996) (“While it cannot be known with
absolute certainty, it is quite likely that, had Hoke undertaken a reasonable
investigation, he would have learned of all three of the men in question and of their
relations with Stell.”).
In addition, even assuming the requested information was improperly
suppressed, we do not believe it was material. Evidence is material if there is a
reasonable probability that it would have altered the jury’s verdict. Bagley, 473 U.S.
at 682. At most, the revelation that Cruz made the prior inconsistent statement would
have permitted the defense to present evidence impeaching Cruz’s statement that
Santisteban forged the body of the letter. But Cruz already was heavily impeached
with evidence of his criminal history, his plea agreement, and his penchant for false
statements and manipulation of others. The effect of one more piece of impeachment
evidence on the jury’s evaluation of Cruz’s credibility likely would have been slight.
The value of the proposed impeachment, even viewed in isolation, also strikes
us as minimal. Even if the jury questioned whether Santisteban forged the Pfizer letter
himself, Santisteban’s reliance on the letter was dubious on its face. The jury would
have been left to evaluate a contention that Santisteban relied on a letter, given to him
by Cruz, that merely requested a price quotation, as an “authorization” from a major
corporation to reproduce Pfizer labels. We are not persuaded that the inability further
to impeach Cruz’s account of how this letter was created was material to the defense.
B.
Santisteban next argues that the district court should have allowed him to
present the government’s prosecution memorandum as evidence that Fernandez had
forged the letter. He maintains that the statement in the memorandum that “Fernandez
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created a fake/forged authorization letter” is an admission by the government, and thus
is not hearsay. Fed. R. Evid. 801(d)(2). The district court rejected this argument,
concluding that the statement was not an admission and noting the “serious
implications in allowing a defense attorney to use the statement from a [prosecution]
memo as an admission.” (T. Tr. 729-30). Citing the need for parties to exchange
information freely, the court feared that admitting the statement in the memorandum
would deter the exchange of such information in the future.
We conclude that the statement in the prosecution memorandum is inadmissible
hearsay. Because the government employee who authored the memorandum could
not have had personal knowledge as to who created the letter from Pfizer, the author
was in no position to “admit” that Fernandez had forged the document. Rather, the
statement in the prosecution memorandum recounts an investigator’s report of Cruz’s
statement that Fernandez created the document. The paragraph thus appears to
contain three levels of potential hearsay: (1) the out-of-court statement of the author
recorded in the memorandum, (2) the statement of the investigator to the author (i.e.,
that Cruz made a particular statement to the investigator), and (3) the statement of
Cruz to the investigator (i.e., that Fernandez had created the document). Unless all
three levels are admissible, the statement in the prosecution memorandum cannot be
admitted for its truth. Fed. R. Evid. 805; United States v. Taylor, 462 F.3d 1023, 1026
(8th Cir. 2006). Even if the first level – the author’s out-of-court statement – is
viewed as an admission of a party opponent, and thus non-hearsay, see Fed. R. Evid.
801(d)(2), the second and third levels of hearsay are not covered by any hearsay
exception. Taylor, 462 F.3d at 1026. Therefore, the memorandum’s recounting of the
witness’s statement cannot be admitted for its truth.
C.
Santisteban next alleges a violation of his right to confront Cruz, whom the
district court described as a “key” witness, and a violation of his due process rights
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arising from non-disclosure of certain “proffer letters” between Cruz and the
government. We review these constitutional claims de novo. United States v. Kenyon,
481 F.3d 1054, 1063 (8th Cir. 2007); Mandacina v. United States, 328 F.3d 995, 1001
(8th Cir. 2003).
Santisteban argues that the district court erred in refusing to allow cross-
examination of Cruz regarding a pending state prosecution in Florida. Santisteban
argues that the district court should have permitted him to attack Cruz’s credibility
with these pending charges. In Santisteban’s view, because the Florida prosecution
was still pending, Cruz had even more reason to incriminate Santisteban in an effort
to please prosecutors. Santisteban also points out that Cruz’s federal plea agreement
explicitly requires Cruz to cooperate with state authorities.
We conclude that any error was harmless. To determine whether a
Confrontation Clause error was harmless, we look to “whether, assuming that the
damaging potential of the cross-examination were fully realized, a reviewing court
might nonetheless say that the error was harmless beyond a reasonable doubt.”
Delaware v. Van Arsdall, 475 U.S. 673, 684 (1986). In a particular case, this inquiry
depends on “the importance of the witness’ testimony in the prosecution’s case,
whether the testimony was cumulative, the presence or absence of evidence
corroborating or contradicting the testimony of the witness on material points, the
extent of cross-examination otherwise permitted, and, of course, the overall strength
of the prosecution’s case.” Id. In this case, we find it dispositive that Santisteban’s
counsel was able to show Cruz’s bias without addressing the pending prosecution in
Florida.
Santisteban’s counsel subjected Cruz to a withering cross-examination. Cruz
admitted to being a convicted felon and former cocaine dealer. He also stated that,
when conducting his affairs, it was common for him to lie under oath. Cruz further
admitted that he had entered into prior cooperation agreements, which enabled him to
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leave prison early and mastermind this conspiracy. Cruz conceded that he had
received a “pretty good deal” by pleading guilty and agreeing to testify in this case,
that his sentence could be reduced as a result of his testimony for the prosecution, and
that he hoped the government might even release him on bond. Cruz admitted that he
often “use[d] people” when doing so would benefit him.
Based on this cross-examination, we conclude that Santisteban had little to gain
from cross-examining Cruz about the pending prosecution in Florida. By this point,
the jury surely understood that Cruz hoped to benefit from incriminating Santisteban,
and that Cruz had a long history of deceit. Even if Cruz’s cooperation were expected
to secure the dismissal of the charges in Florida, this marginal difference in benefit
would not have cast further doubt on Cruz’s testimony. With or without the pending
prosecution in Florida, there was abundant evidence that Cruz had a strong incentive
to satisfy law enforcement with his testimony. Therefore, any error in excluding this
evidence was harmless beyond a reasonable doubt.
Santisteban also complains that the government did not disclose the proffer
letters from the government to Cruz that preceded Cruz’s plea agreement. The
government acknowledges that these letters provided use immunity for statements
made by Cruz during his initial cooperation, before he reached a formal plea
agreement with the United States Attorney. See United States v. Lopez, 219 F.3d 343,
345 n.1 (4th Cir. 2000). Once the plea agreement was signed, the terms of that
agreement superseded the terms of the preliminary proffer letters concerning the use
of Cruz’s statements.
Santisteban alleges that the non-disclosure of the proffer letters violated his due
process right to receive exculpatory or impeachment evidence. He contends that these
letters would have cast further doubt on Cruz’s veracity. At trial, Cruz testified that
he had cooperated with prosecutors out of a genuine desire to help the investigation,
and not solely for his own benefit. Santisteban asserts that this testimony was
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misleading, because the jury did not know that before cooperating with investigators,
Cruz had been arrested in Florida on charges related to this conspiracy. Had the jurors
known about the proffer letters governing this initial cooperation, Santisteban
contends, they would have recognized that Cruz cooperated not out of the goodness
of his heart, but to receive a reduced sentence for his role in the conspiracy. The
district court declined to compel the production of these letters, because the
government had already provided Cruz’s plea agreement, and the terms of the letters
were “subsumed within the final agreements between the Government and witnesses.”
Because the final plea agreement superseded the antecedent proffer letters, see
United States v. Davis, 393 F.3d 540, 546 (5th Cir. 2004), we believe the government
satisfied its obligations under the Due Process Clause by providing Cruz’s plea
agreement to Santisteban. Regardless of any preliminary proffer agreements, the
formal plea agreement governed Cruz’s cooperation, and it provided the jury with a
sufficient basis for judging the credibility of Cruz’s testimony at trial. The
government disclosed the plea agreement, and Santisteban was able to cross-examine
Cruz vigorously about it. Santisteban also was free to elicit from Cruz that he
received use immunity for statements made during his proffer sessions with the
government. Santisteban argues that the proffer letters themselves would have cast
doubt on Cruz’s testimony that his cooperation was purely altruistic, but even if this
information was not otherwise readily available through cross-examining Cruz, the
government’s agreement to grant preliminary use immunity is a collateral issue.
Whether Cruz’s initial cooperation was altruistic or self-interested is relevant only to
the extent that it casts doubt on his testimony at trial. The terms of Cruz’s plea
agreement provided Santisteban with sufficient basis to show Cruz’s potential bias
and to question his credibility at trial. The terms of the proffer letters were not
material to the defense.
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D.
Santisteban challenges the district court’s failure to instruct the jury as to any
lesser-included offenses. He cites two potential lesser-included offenses: misusing
a label required by federal regulations, 21 U.S.C. § 331(i)(1), and “[t]he doing of any
act which causes a drug to be a counterfeit drug,” as prohibited by § 331(i)(3). The
government maintains that these offenses require proof of an additional element not
needed to prove a conspiracy to defraud the United States.
A defendant is entitled to a jury instruction if the request is timely, the evidence
supports the instruction, and the proffered instruction correctly states the law. United
States v. Sanders, 834 F.2d 717, 719 (8th Cir. 1987). In this case, the proffered
instructions correctly state the law only if violations of §§ 331(i)(1) and (3) are indeed
lesser-included offenses of 18 U.S.C. § 371. “To be a lesser-included offense, a crime
must not require the government to prove any additional elements.” United States v.
Hatcher, 323 F.3d 666, 672 (8th Cir. 2003). Thus, where the lesser offense “requires
an element not required for the greater offense, no instruction is to be given.”
Schmuck v. United States, 489 U.S. 705, 716 (1989).
The jury convicted Santisteban of conspiring to defraud the United States under
18 U.S.C. § 371, and this was the only offense submitted to the jury. The elements
of this offense required the jury to find that Santisteban knowingly entered into an
agreement or understanding to defraud the FDA by taking steps, through means that
involved dishonesty, deceit, craft, or trickery, to impede, impair, obstruct, or defeat
a lawful function of the FDA. (Appellant’s App. 129). Each of the offenses that
Santisteban claims to be lesser-included required an additional element of proof. To
prove a violation of 21 U.S.C. § 331(i)(1), the government must show that the
defendant fraudulently used a “label . . . authorized or required by [federal
regulations].” Id. Section 331(i)(3) requires proof that the defendant’s act caused a
drug to be a counterfeit drug. Santisteban could be convicted under § 371 without
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proof of these additional elements. Accordingly, neither of the offenses found in
§ 331(i) is a lesser-included offense of conspiring to defraud the United States, and
the district court properly declined to give the requested instructions.
Santisteban’s final argument is that the district court erred by refusing to give
a multiple conspiracy instruction. He maintains that the criminal conspiracy in this
case involved multiple criminal purposes, some of which were not known to him. See
United States v. Zimmerman, 832 F.2d 454, 458 (8th Cir. 1987) (a conviction for
conspiracy requires proof that the defendant was “aware of the general nature and
scope of the conspiracy”). The government contends that the evidence in this case
sufficed to prove a single conspiracy.
“If the evidence supports a single conspiracy, the failure to give a multiple
conspiracy instruction is not reversible error.” United States v. Roach, 164 F.3d 403,
412 (8th Cir. 1998). “Whether a given case involves single or multiple conspiracies
depends on whether there was one overall agreement to perform various functions to
achieve the objectives of the conspiracy.” United States v. Radtke, 415 F.3d 826, 838
(8th Cir. 2005) (internal quotations omitted). That the conspirators entered the
conspiracy at different times and played discrete roles does not compel a finding of
multiple conspiracies. United States v. Maza, 93 F.3d 1390, 1398 (8th Cir. 1996).
Because this is a factual issue, we draw all reasonable inferences in favor of the
verdict. Radtke, 415 F.3d at 838.
The evidence at trial established that Santisteban played a small, but essential,
role in a single conspiracy. Cruz identified Santisteban as the person he “hired to print
the labels that were used and distributed as part” of the criminal conspiracy. (T. Tr.
287-88). Throughout Cruz’s testimony, he referred to a single conspiracy centered
around Cruz’s illicit dealings. Santisteban argues that the conspiracy had several
purposes, citing “importing drugs, manufacturing drugs, misbranding drugs, and
defrauding the FDA.” Santisteban’s involvement, however, touched on each aspect
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of the conspiracy. Cruz testified that Santisteban printed labels for over forty different
drugs, suggesting that Santisteban was well aware of the scope of the conspiracy.
Moreover, “a conspiracy with multiple objectives is not the same thing as multiple
conspiracies.” Radtke, 415 F.3d at 839. Cruz’s testimony that Santisteban agreed to
print labels for the conspiracy provides sufficient evidence for a jury to conclude that
there was a single conspiracy.
* * *
For the foregoing reasons, the judgment of the district court is affirmed.
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