Filed: Apr. 07, 2016
Latest Update: Mar. 02, 2020
Summary: Case: 15-10270 Date Filed: 04/07/2016 Page: 1 of 54 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 15-10270 _ D.C. Docket No. 2:12-cr-00005-JES-CM-1 UNITED STATES OF AMERICA, Plaintiff-Appellee Cross-Appellant, versus JEFFREY R. GREEN, Defendant-Appellant Cross-Appellee, KAREN S. HEBBLE, Defendant-Appellant. _ Appeals from the United States District Court for the Middle District of Florida _ (April 7, 2016) Case: 15-10270 Date Filed: 04/07/2016 Page: 2 of 54 Bef
Summary: Case: 15-10270 Date Filed: 04/07/2016 Page: 1 of 54 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 15-10270 _ D.C. Docket No. 2:12-cr-00005-JES-CM-1 UNITED STATES OF AMERICA, Plaintiff-Appellee Cross-Appellant, versus JEFFREY R. GREEN, Defendant-Appellant Cross-Appellee, KAREN S. HEBBLE, Defendant-Appellant. _ Appeals from the United States District Court for the Middle District of Florida _ (April 7, 2016) Case: 15-10270 Date Filed: 04/07/2016 Page: 2 of 54 Befo..
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Case: 15-10270 Date Filed: 04/07/2016 Page: 1 of 54
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-10270
________________________
D.C. Docket No. 2:12-cr-00005-JES-CM-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee
Cross-Appellant,
versus
JEFFREY R. GREEN,
Defendant-Appellant
Cross-Appellee,
KAREN S. HEBBLE,
Defendant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
________________________
(April 7, 2016)
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Before HULL, JULIE CARNES and BARKSDALE,* Circuit Judges.
HULL, Circuit Judge:
After a jury trial, defendants Jeffrey Green and Karen Hebble were each
convicted of one count of conspiracy to distribute controlled substances, in
violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(C), and 846; and one count of
conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). As
objects of the latter conspiracy, defendants Green and Hebble together were
convicted of two counts of money laundering and defendant Green was separately
convicted of four additional counts of money laundering, all in violation of
18 U.S.C. §§ 1957 and 2. After review and with the benefit of oral argument, we
affirm.
I. PROCEDURAL HISTORY
On July 24, 2013, a grand jury returned a superseding indictment against the
defendants charging them with (1) conspiracy to distribute controlled substances,
(2) conspiracy to commit money laundering of the proceeds of that illegal
distribution, and (3) multiple money laundering counts for individual monetary
transactions involving those drug distribution proceeds. The indictment also
sought forfeiture of various assets.
_________________________
*Honorable Rhesa H. Barksdale, United States Circuit Judge for the Fifth Circuit, sitting
by designation.
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Before trial, the defendants filed a joint motion to sever with each offering
independent reasons for severance. Specifically, defendant Hebble argued that if
the court severed their trials and if Green were tried first, then Green would
provide exculpatory testimony on Hebble’s behalf at her trial. The district court
denied the defendants’ motion, rejecting both defendants’ independent arguments.
Defendant Hebble renewed her motion to sever at the close of the government’s
case, and the district court again denied her motion.
The jury’s verdict convicted the defendants on all counts. Post-trial, the
defendants renewed their motion for judgment of acquittal, which they had timely
made at the close of the government’s case. The district court denied the motion.
The defendants subsequently moved for a new trial or alternatively for
dismissal on the basis that the government had engaged in “selective prosecution,”
in violation of their Fifth Amendment Due Process Rights. The district court
denied the motion and rejected the selective prosecution claim as improperly raised
and untimely.
On appeal, the defendants challenge the sufficiency of the evidence
supporting their convictions as well as the district court’s rulings denying their
selective prosecution claim and defendant Hebble’s motion for severance. Because
the defendants challenge the sufficiency of the evidence, we first review the
evidence presented at trial.
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II. TRIAL EVIDENCE
Defendants Green and Hebble ran two businesses, the Gulf Coast Medical
Pharmacy and the Gulf Coast Infusion Center (collectively “Gulf Coast”), out of a
small suite in a medical building near the Gulf Coast Medical Hospital in Lee
County, Florida.1 Defendant Green owned and operated Gulf Coast. Green was
also registered as a pharmacist technician under Florida law, but he was not a
pharmacist himself. Green’s then-fiancée, defendant Hebble, functioned as the
store manager for the two businesses.
The lion’s share of Gulf Coast’s business consisted of oxycodone sales, a
Schedule II narcotic and controlled substance with a high degree of addiction and
abuse potential. In 2009, Gulf Coast purchased 475,900 pills of oxycodone from
pharmaceutical distributors for retail sale. In 2010, that figure rose to 1,486,200
pills. By 2011, Gulf Coast purchased 2,059,700 pills.2 By comparison, from 2009
through 2011, all other independent pharmacies within Gulf Coast’s 33912 zip
code area (about ten total) collectively purchased one-third the volume of
1
The infusion center part of Gulf Coast was used for compounding special order
medications for doctors’ offices or other such purposes. The infusion center, which lacked a
controlled substances license, generated very little income percent-wise compared to the retail
pharmacy side of Gulf Coast, which was licensed for controlled substances.
2
These numbers include 15 mg and 30 mg dosages of oxycodone, for which the
defendants required cash payment. Gulf Coast also bought other dosages of oxycodone, which
are not included in these numbers.
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oxycodone as Gulf Coast purchased. The average purchase volume of oxycodone
for pharmacies nationwide in 2010 was approximately 69,000 pills.
Gulf Coast proved to be very lucrative. Gulf Coast’s policy was that, while
customers could purchase other medications using insurance, customers could not
use insurance to purchase oxycodone; they had to pay in full with cash, credit card,
or debit card. Most paid in cash. Gulf Coast charged between $250 and $500 for a
typical oxycodone prescription. For Roxicodone, a more expensive name-brand
version of oxycodone, Gulf Coast charged between $800 and $900 per
prescription. In 2011 alone, the pharmacy filled 15,400 oxycodone prescriptions.
The result: Gulf Coast frequently brought in $15,000 to $28,000 per day per
register in cash-only sales.
Gulf Coast maintained multiple bank accounts over which defendants Green
and Hebble were co-owners and co-signers. From January 2010 through October
2011, over $3,500,000 in cash was deposited into just one of those accounts alone.
Among other things, Green and Hebble used this money to pay their mortgage and
later to fully pay off their home, pay off student loans, pay for a $25,000 diamond
ring, and pay Green a $100,000 “getting married bonus.”
But on November 4, 2011, all this came to a halt when the Drug
Enforcement Agency (“DEA”) raided Gulf Coast and seized evidence related to
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the defendants’ illegal drug distribution conspiracy. We recount the details of that
conspiracy.
A. Central Florida’s Underground Oxycodone Market
At trial, the government presented numerous witnesses who described how
the Central Florida underground oxycodone market worked. The system operated
through the participation of a number of players including drug dealers, fake
patients, and cooperating doctors and clinics. One other key participant in the
market was pharmacies, which ultimately supplied the controlled substances that
would later be sold on the streets.
First, drug dealers, known as “sponsors,” recruited and paid drug addicts or
people otherwise desperate for money, called “spuds” or “skidoodies,” to pose as
fake patients. Having recruited a group of fake patients, drug dealers would then
shuttle them to and from several clinics a day with the goal of obtaining multiple
oxycodone prescriptions for each fake patient.
Drug dealers targeted clinics that were willing to write numerous
prescriptions for controlled substances for patients who had no medical need for
these drugs. Participating doctors frequently performed superficial examinations
on fake patients, sometimes only lasting a few minutes. Some clinics had
superficial drug screening procedures in place. Often, if a fake patient were likely
to fail a drug test while at the clinic, a drug dealer or fake patient could pay extra to
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avoid a failed drug test. Some clinics required that the fake patients have MRIs
before they would write prescriptions; in such cases, the drug dealers would first
take the fake patients to radiology clinics that were willing to create MRIs falsely
showing back injuries before taking the fake patients to get their prescriptions.
Drug dealers could also pay extra for “VIP treatment,” which allowed their
fake patients to skip ahead in line—a thousand dollars, for example, could “put
them right in the doctor’s lap.” Routinely doctors at these clinics wrote dozens of
nearly-identical prescriptions for fake patients. These “cocktail” prescriptions
typically were for oxycodone in two different strengths and another accompanying
drug. With prescriptions in hand, the drug dealers would take their fake patients to
pharmacies like Gulf Coast to have those prescriptions filled. Finally, drug dealers
would then sell these controlled substances on the street.
As a controlled substance, oxycodone cannot be obtained without a
prescription. And due to increasing scrutiny on the part of the DEA and other
regulators between 2009 and 2011, many pharmacies became less willing to fill
oxycodone prescriptions or would do so only with careful dispensing procedures in
place.
One drug dealer, David Massey, admitted that he recruited 60 to 70 fake
patients to illegally obtain oxycodone. First, Massey would take fake patients to
doctors at “east coast” clinics to have them write prescriptions. Then, he would
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have those prescriptions filled at one of several pharmacies, including Gulf Coast.
When filling prescriptions at Gulf Coast, Massey typically took two to four fake
patients at a time, and he would give defendant Hebble identification and cash for
the whole group. Massey would never hand any money to his fake patients until
all transactions were fully complete because he was “just using their bod[ies] and
their identification.”3 Massey purchased both oxycodone 30 mg and oxycodone
15 mg from Gulf Coast, and he could easily spend over $400 for each prescription.
With drugs in hand, Massey could then sell in bulk, perhaps $700 to $1,000 per
100 pills, and make “a quick $9,000” in total profit from a full day’s work. At
trial, Massey explained: “I like to quick flip. That’s why I got into the oxycodone
business. I ain’t selling in singles.”
Another drug dealer, Willie Hayden, testified that he used Gulf Coast and
another pharmacy because they were the only ones that accepted prescriptions
from east coast doctors. Hayden learned from defendant Hebble of a more
expensive brand of oxycodone, called “real Roxicodone,” that he could in turn sell
for more money. Hayden went ahead and purchased a supply from Gulf Coast.
3
On appeal, the defendants assert the trial record shows that “Massey’s testimony went
from bringing someone to the pharmacy ‘every other day’ on direct examination to ‘once or
twice’ in total on cross.” The context of Massey’s answers on cross-examination make clear that
there were only a few dates when Massey both took fake patients to Gulf Coast and filled a
prescription for himself. However, Massey explained there were many dates when he took fake
patients to Gulf Coast but did not fill prescriptions for himself.
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Sometimes defendants Green and Hebble would wait after hours for
customers upon special request, even without a pharmacist present. That was true
in Hayden’s case. Defendant Hebble, along with defendant Green, would wait for
Hayden after hours to fill his prescriptions if Hayden called ahead of time. Hayden
would ask, “Do you have any pills?” and defendant Hebble would answer, “Yeah
. . . . Hurry up and get [here].”
Terrence Taylor, yet another drug dealer, typically took between 50 and 65
people per month to doctors to get oxycodone prescriptions. Taylor first met
defendant Green at Gulf Coast in 2009 while having an oxycodone prescription
filled. He frequented Gulf Coast regularly, often seeing Hebble. Taylor would
always call ahead to make sure that Gulf Coast had enough drugs, and he would
notify defendant Hebble, or whomever answered the phone, that he had “six or
seven people” with him who had carpooled.
Another drug dealer, Christopher McNaughton, explained about Gulf Coast
that “[i]f you didn’t get there early enough, you probably weren’t going to get your
script filled.” This was because there could be 75 people waiting in line.
McNaughton, however, said that he “got to know Karen [Hebble]” and received
his “pills faster than everybody.” On two occasions, McNaughton asked defendant
Hebble whether he could get extra oxycodone pills, known as “recyclables”
(prescriptions for others that had not been picked up). Defendant Hebble obliged.
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Hebble even gave McNaughton pills in a white envelope “in advance” before he
had his prescription.
Kimberly Moore described her experience shuttling carloads of people to
east coast doctors to have prescriptions written, and then to pharmacies to have
them filled. Moore took about two carloads per day to Gulf Coast about three
times a week for about a year-and-a-half period. Moore mostly interacted with
defendant Green. Green told her that while the DEA was cracking down on east-
coast prescriptions, he would nevertheless “grandfather” Moore in.
One time, David Massey was caught with drugs at a hotel and was found
with a “whole bunch of Gulf Coast pill bottles,” after which he was arrested and
appeared in the news for days. Later Massey came to Gulf Coast with “east coast
prescriptions” to be filled. Defendant Hebble told Massey that she had seen him in
the news and asked if he was alright. When Massey presented the “east coast
prescriptions,” Hebble declined; she explained that because the “east coast
prescriptions” were now “hot,” they were no longer taking them. However,
defendant Hebble explained to Massey that he could “keep doing the same thing
but [he had to] bring west coast prescription[s].”
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At trial, several Gulf Coast employees described the red flags that marked
Gulf Coast’s clientele. One former intern 4 used such descriptors as “drug abusers,”
“strung out,” “high,” “real anxious or nervous,” and “abnormal” to describe many
of Gulf Coast’s customers. These customers often pulled cash right out of their
pockets to pay for their drugs. In the words of another former employee, “[i]t was
crazy” how long the lines of customers were that frequently formed in front of the
pharmacy before it opened in the morning. Gulf Coast could run out of oxycodone
before they even started dispensing it depending on how many prescriptions were
already dropped off. An employee recalled that one day, Gulf Coast’s supply of
oxycodone ran out. In response, Gulf Coast’s customers were “[v]ery hostile . . .
and aggravated and upset.” Whenever oxycodone ever ran out, business would be
slow, if there was any business at all.
Another Gulf Coast employee told of how one customer thought he was in a
movie theater and tried to buy a ticket. The customer also had a prescription of
oxycodone 30 mg and oxycodone 15 mg waiting to be picked up. The employee
shared with defendant Green that she “didn’t feel comfortable ringing [the
customer] out” and “giving him his meds.” Nevertheless, Green completed the
sale. Another employee similarly told of how a visibly impaired customer spoke to
Green, and Green then ordered the employee to fill the customer’s prescription.
4
This intern worked at Gulf Coast for only two weeks before quitting and contacting the
DEA.
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Yet another Gulf Coast employee said she would sometimes feel nervous
around Gulf Coast’s customers because of “the way the people looked, the way
they would come in, how they would act.” She observed, “They would be high. I
would have people falling asleep at my counter . . . not remembering if they picked
up their pills yesterday or today.” The employee shared her concerns with
defendant Hebble. In the employee’s words, Hebble’s response was to say: “[W]e
don’t judge our customers; even if they’re high . . . they are acceptable to take their
medication.”
One fake patient, Jason Dudley, further corroborated others’ descriptions
about the overtly suspicious nature of Gulf Coast’s customers. Dudley reported
that Gulf Coast “had lines out the door,” sometimes with 50 people in line, with
“people on the phones . . . pretty much out in the open, saying: Hey, where can I
meet you . . . I’m getting them now[?]” These customers did not appear to Dudley
to be injured; rather, they “looked like a lot of gangbangers.” That observation
dovetailed with drug dealer Willie Hayden’s description of the customers. Hayden
noticed they had “track marks on their hand[s],” and would “slur when they
talk[ed].” Dudley also reported that in the nearby bathroom, “there would be
people doing pills right there on the countertop.”
Sara Cogdill, an office manager at Commercial Medical Group (“CMG”),
shared about the clinic/doctor side of the conspiracy. Cogdill was formerly a drug
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dealer herself. Cogdill explained that she hired doctors who were willing to
increase pain medication for customers; she fired doctors who were not. Cogdill
explained to her physician staff why CMG needed to write prescriptions liberally:
if patients did not get their prescriptions from CMG, then they would go to nearby
clinics, and CMG would risk losing their customers’ business. As an incentive,
Cogdill’s clinic paid its doctors cash bonuses for writing more than 200
prescriptions in a day. CMG was known for writing a lot of prescriptions for “240
Roxicodone 30 [mg], 90 Xanax, and 90 15 [mg].” It always had “lines wrapped
around the door,” and most of its patients were “sponsored by somebody.”
Cogdill told how defendants Green and Hebble came to CMG one day,
bringing business cards and brownies. Green and Hebble told Cogdill that Gulf
Coast always had Roxicodone in stock. CMG then made Gulf Coast one of its
listed pharmacies for the benefit of CMG’s customers, which meant that CMG
would call Gulf Coast each morning to confirm that there were pills in stock and
then disclose this fact to its customers. Gulf Coast was “always pretty good about
carrying the drugs that [CMG] needed.”
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Sometimes Cogdill called over to Gulf Coast and asked to speak with
defendant Hebble, and sometimes Hebble would call CMG. 5 At trial, Cogdill
explained the importance of keeping a business like Gulf Coast “at the top of
[CMG’s] list.” Cogdill put it this way: “[W]hen your patients come in, you know
where to send them. Because if they can’t get the drugs, there’s no need for us
[CMG]. And we want them to get their drugs because we want to make the
money.”
One time defendant Hebble called Cogdill to let CMG know that Gulf Coast
was out of 30 mg pills and requested that CMG instead write prescriptions for
15 mg. But Gulf Coast rarely called CMG to verify the validity of prescriptions
despite the number of patients CMG sent Gulf Coast’s way. Cogdill would call
Hebble “[i]f there was an issue.” One time Cogdill called Hebble because a
customer, accompanied by a “big sponsor,” came in with an expired license. CMG
sent the drug dealer to Gulf Coast, which filled the prescription.
Another clinician, Dr. John Legowik, told about a clinic he ran, Physicians
Wellness Center, that also served Gulf Coast. In running the clinic, Dr. Legowik
partnered with a man who turned out to be an “ex-con” drug dealer. Dr. Legowik
went ahead and prescribed his patients medication, primarily oxycodone and
5
On cross-examination, Cogdill admitted that at the time she first told authorities about
defendants Green and Hebble (after having been arrested herself), Cogdill could not remember
Green’s and Hebble’s names. Instead, Cogdill told authorities that she had interacted with “a
man and a woman from Gulf Coast.”
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Xanax, that his patients did not need. Dr. Legowik testified that he did it for the
money.
Defendant Green visited Dr. Legowik’s clinic several times. Green would
bring pastries and lunch, and he passed out Gulf Coast referral cards to the patients
in Dr. Legowik’s clinic. Dr. Legowik’s clinic, in turn, displayed those referral
cards for several years. After Green’s visits, Physicians Wellness Center referred
patients specifically to Gulf Coast.
At trial, some doctors whose prescriptions were filled at Gulf Coast testified
on behalf of the defendants. They explained that their prescriptions, often for a
drug combination including oxycodone 30 mg and oxycodone 15 mg, were for a
valid medical purpose and that Gulf Coast had called their offices to check their
validity.
For example, Dr. Richard Amato explained that it can be appropriate to
write a prescription that includes both oxycodone 30 mg and oxycodone 15 mg.
Dr. Amato also said that his clinician staff reported that Gulf Coast had called to
verify some of the prescriptions that Dr. Amato had written. Dr. Amato, however,
had inherited many patients who were used to receiving combination oxycodone
prescriptions and was trying to wean them off and transition them to other
medications. Often when Dr. Amato did wean patients off combination oxycodone
prescriptions, they left and stopped going back to Dr. Amato. During a five-month
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span in 2011, Dr. Amato wrote 874 prescriptions that were filled at Gulf Coast.
When Gulf Coast did call to verify that a patient had indeed been to Dr. Amato’s
clinic, Dr. Amato was not sure whether a pharmacist or someone else from Gulf
Coast called. That is because Dr. Amato’s staff always took those calls; Dr. Amato
never personally verified with Gulf Coast the validity of any of his prescriptions.
Dr. Robert Hull, a doctor at Dr. Legowik’s clinic, Physicians Wellness
Center, also wrote prescriptions that were filled at Gulf Coast. Dr. Hull explained
that he only prescribed narcotics like oxycodone when patients presented “hard
evidence” of pain or injury, like x-rays or MRIs. Dr. Hull affirmed that all of the
prescriptions he wrote were issued in the ordinary course of his medical practice
and for legitimate medical reasons. Dr. Hull, however, admitted that he never
personally spoke with anyone at Gulf Coast to verify the medical legitimacy of any
of the prescriptions he had written. Also, Dr. Hull explained that he would refuse
to write prescriptions for people who had DUIs, felonies, or otherwise sold drugs.
Consequently, he “was fired after a very short time of being at . . . Physicians
Wellness Center.”6
6
Another doctor, Dr. Emiliya Hill, also testified on behalf of the defendants. She offered
similar testimony to that of Dr. Amato and Dr. Hull that there could be a medical reason for
prescribing oxycodone and that she personally took steps to fully examine her patients before
writing oxycodone prescriptions.
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B. Gulf Coast’s Pharmacy Standards
At trial, through numerous witnesses, the government presented evidence of
Gulf Coast’s pharmacy standards including evidence about its pharmacists and
how they were used. A few of Gulf Coast’s pharmacists even shared their own
perspectives and experiences working at Gulf Coast.
Robert Mahan was Gulf Coast’s “pharmacist of record.” Mahan, an elderly
man in his mid-eighties, was described as “very ill,” confined to breathing with the
help of an oxygen tank, and reportedly it was “difficult for him to speak and
stand.” One Gulf Coast employee said she never saw Mahan fill a prescription or
give a patient medical advice. Mahan “was never really there,” and sometimes
“would just come and open the pharmacy and leave” if defendants Green or
Hebble were on vacation. Because Mahan frequently was not around, defendant
Green would typically sign Mahan’s name to prescriptions and other paperwork.
Another Gulf Coast pharmacist in his eighties, Robert Rowe, often sat or
slept in a corner while at work. One time, a Gulf Coast employee asked Rowe to
look at a prescription. Rowe responded: “I’m not to check prescriptions, I’m paid
to sit in this chair.” Rowe told one Gulf Coast employee that he “[didn]’t talk to
doctors.” Instead, Rowe had been hired “just so [Gulf Coast] had an active
license.” If a customer had questions about medications, defendant Green—not
Rowe—would answer those questions.
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At trial, Rowe himself testified. He explained that defendant Green hired
him to sit in a corner and “watch the pharmacists filling their prescriptions.”
Though his job was to watch the pharmacists, Rowe admitted that he was not sure
who were pharmacists and who were merely technicians—he “didn’t question
them.” Rowe himself “was not hired as a pharmacist,” and he “was not paid as a
pharmacist” either. Rowe said that he “never filled one prescription.” Rowe knew
Gulf Coast was distributing controlled substances, but he did not know which ones.
He “never looked at the [prescriptions].” Though pharmacy law, according to
Rowe, required that prescriptions be “cancelled when they’re filled,” they often
were not; instead, at the end of the day, he would be handed a stack of
prescriptions. He would sign them then.
Pharmacist Eddie Becker told of his experience working at Gulf Coast,
which differed markedly from his prior experience working at a Wal-Mart
pharmacy. At Wal-Mart, Becker found that the pharmacy was busy, filling lots of
prescriptions, but these tended to be for drugs other than controlled substances. At
Gulf Coast, Becker “was astonished at the amount of medications for controlled
drugs that were filled.” Ninety percent of the prescriptions for which Gulf Coast’s
customers lined up were for oxycodone and typically for a set drug combination—
“[y]ou didn’t see too much . . . regular medication coming in.” At Wal-Mart, when
controlled substance prescriptions did come through, most of the time the
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pharmacists did not fill them, and for those prescriptions that were filled, they were
done so case-by-case based on the pharmacist’s discretion. In contrast, at Gulf
Coast, Becker was surprised at how many of the controlled substance prescriptions
“were almost the same” and that they were all being filled. At Wal-Mart, Becker
recalled that the average customer’s age tended to be around 50 or 55. At Gulf
Coast, customers were typically in their twenties or thirties.
All in all, things were nothing like what Becker had expected when he took
the job at Gulf Coast. Becker said that sometimes he would arrive for work in the
morning to find the pharmacy door already opened (it was not supposed to be
without a pharmacist present). Becker was often met by long lines of customers;
he “almost had to fight [his] way through the line to get into the door.”
At one point Becker shared with defendant Green his concern for the
“humongous quantity” of controlled substances Gulf Coast was filling and that
such volume was “sending up red flags” in Becker’s mind. Defendant Green
responded to Becker: “[T]his is what our business is.” Becker shook off his
concerns because he needed a job, and Green assured Becker that “everybody”—
that is, law enforcement—“knew what [Green] was doing and they said he was
doing a great job.” That satisfied Becker.
Another time, Becker heard defendant Green talking to one of Gulf Coast’s
suppliers. As background to this conversation, the evidence showed that Gulf
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Coast was fully consuming its monthly allotment of oxycodone, causing its
supplier to cut off Gulf Coast’s supply four or five days before the end of the
month. That would cause Gulf Coast to lose sales because it would have to
redirect its customers elsewhere to get their oxycodone. Becker heard Green tell
the supplier’s representative that Gulf Coast was “an outpatient pharmacy from the
hospital” and was “filling a lot of outpatient” prescriptions from there. The
supplier soon increased Gulf Coast’s daily oxycodone supply from 5,000 pills per
day to 10,000. According to Becker’s account, though, Gulf Coast was simply a
“privately-owned retail pharmacy that happened to be located in a building close to
the hospital.” It only served outpatient hospital patients when they “wandered over
that way.” Thus, by stating that Gulf Coast was the hospital’s outpatient pharmacy
that filled many of its outpatient prescriptions, defendant Green had misled the
supplier in order to increase its oxycodone supply.
Given this backdrop at trial, the government called expert witness Robert
Parrado to testify about Gulf Coast’s standards of professional practice. Parrado
was a licensed pharmacist of 43 years who had worked extensively in both chain
and independent pharmacies and had served as Chairman of Florida’s pharmacy
licensing board. Parrado discussed both the legal and professional duties for which
a pharmacy, like Gulf Coast, is responsible and the ways in which Gulf Coast
disregarded those duties.
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Parrado explained that a pharmacist’s role is to dispense medication for only
valid prescriptions, which are prescriptions “written by a physician in the normal
course of his professional practice” and “for a legitimate medical purpose.” To
“determine if a prescription is written for a legitimate medical purpose,” a
pharmacist must “evaluate any red flags” that arise when a customer attempts to
fill a prescription.
To investigate red flags, a pharmacist must personally call the prescribing
physician to determine if a given prescription is valid, and only a pharmacist can
do so. Parrado explained that a pharmacist “cannot dispense the prescription until
the red flags have been . . . resolved.” Aside from investigating red flags, Parrado
explained that pharmacies have various record-keeping responsibilities for the
prescriptions they fill, which include logging patient contact information; type,
strength, and quantity of medication; and physician information. Pharmacists must
verify the accuracy of this information.
Parrado explained that while pharmacy technicians may assist pharmacists
with certain routine tasks, pharmacy technicians may not themselves fill or
dispense prescriptions. Witnesses testified that at times, Green, a pharmacy
technician, and Hebble, a business manager, both personally filled prescriptions at
Gulf Coast. Parrado also testified that pharmacy technicians may not call a
prescribing physician “to check on anything of a clinical basis” for purposes of
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filling a prescription. With controlled substance prescriptions, the pharmacist must
personally sign the prescriptions.
In Gulf Coast’s case, Parrado discussed the “very large quantity of red flags”
he found when reviewing Gulf Coast’s records and the prescriptions it had filled.
Frequently in the case of Gulf Coast’s prescriptions, there was a long geographic
distance between the prescribing physician’s office and Gulf Coast. Also, law
enforcement had periodically requested information about particular patients,
which should have been a red flag to Gulf Coast that these patients or their
prescribing physicians were under investigation.
Additionally, Gulf Coast had filled numerous prescriptions that dispensed a
very high dosage of two immediate-release opioids like oxycodone 30 mg and
oxycodone 15 mg, a prescription for which “[t]here is no medical purpose.”7
There were “multiple prescriptions for large quantities of these drugs given to
people presenting at the same time, coming in together,” which, for Parrado, was
“almost a non-resolvable flag.” Parrado testified that this is because duplicitous
prescriptions written by the same physician indicate a lack of “individualization of
therapy.”
7
At trial, some witnesses disagreed with Parrado’s opinion. Pharmacist Becker of Gulf
Coast and several doctors testifying on behalf of the defendants offered reasons why it might be
medically legitimate to prescribe oxycodone 30 mg along with oxycodone 15 mg.
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One example of Gulf Coast’s filling of duplicitous prescriptions involved a
stack of prescriptions written by a Dr. Rothenberg. Dr. Rothenberg had written
over one hundred oxycodone prescriptions in a single day, which was a red flag
Parrado could not “resolve.” These were “identical prescriptions” of “very similar
dosing . . . for multiple people, some of . . . which presented at the same time.”
Gulf Coast went ahead and filled these prescriptions over a two-day span. Parrado
saw no evidence that Gulf Coast had verified the validity of each of these
prescriptions, as they were required to do.
Parrado was also asked about the testimony that one of Gulf Coast’s
pharmacists had given earlier in the trial. Pharmacist Rowe had admitted that he
never checked or filled any prescriptions. Parrado explained that for any of the
prescriptions Gulf Coast filled bearing Rowe’s signature, they would have been
“diverted” rather than “dispensed.” In other words, such prescriptions “were not
handed out to a patient who really had a valid prescription.” Parrado offered an
analogy to illustrate his point: “This is the same as a person coming in and getting
some controlled substances off the shelf, putting them in a bottle and selling them,
because there is no pharmacist intervention in there. So that’s diversion.”
The defendants countered the testimony by Parrado by pointing to evidence
of Gulf Coast’s security measures and policies they maintained were intended to
prevent diversion of controlled substances for illicit means. For example, when a
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patient would attempt to fill a controlled substance prescription, the person
working the cash register would take the patient’s prescription and collect the
patient’s identification information including name, address, driver’s license or ID
number, and date of birth. Next, the prescription would be handed to someone in
the dispensing area, and either a pharmacist or a pharmacy technician was
supposed to call the clinic or doctor’s office that wrote the controlled substance
prescription to verify that the patient’s identifying information matched and that
the doctor had indeed written that prescription for the patient. Having verified the
prescription, pharmacy staff would then print labels, count out and bottle the pills,
and finish by entering information about the transaction into a computer system. If
the computer records for a patient displayed a warning message, such as “Do not
fill per sheriff” for example, then Gulf Coast might decline to fill the prescription.
When the patient picked up the filled prescription, Gulf Coast would ask for ID
and have the patient sign a log showing the patient had picked up the medication.
There was also some testimony suggesting that Gulf Coast employees had
discretion to refuse to fill prescriptions for which they had concerns. There were
occasions where Gulf Coast had refused to fill a prescription. For example, one
technician said that eventually Gulf Coast stopped filling prescriptions written by
Dr. Rothenberg. And one time, Gulf Coast discovered that a patient had altered
her Adderall prescription, so it held the patient’s ID until law enforcement came to
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remove her. Pharmacist Becker testified that, despite his concern for the large
quantity of controlled substances being dispensed, he was not ultimately concerned
because Gulf Coast “went through a routine” to call the prescribing doctor’s office
to verify the accuracy of the prescription’s information. Defendant Green
frequently cooperated with the DEA when it was investigating customers that had
filled controlled substance prescriptions through Gulf Coast, and, for a time, Green
hired off-duty law enforcement officers to maintain an orderly environment.
However, there was plenty of evidence that undermined the defendants’
favorable evidence and instead showed that Gulf Coast either did not have
procedures in place to genuinely guard against the red flags that Parrado
highlighted or else the procedures it did have were simply a façade.
For example, fake patient Jason Dudley reported that whether Gulf Coast
actually checked for identification depended on whether a law enforcement officer
was present or not. Dudley reported that when an officer was present, “it looked
like a regular pharmacy.” But “[u]sually you’d never see [Green] unless the sheriff
was there, and then [Green] was usually standing right there like he should.”
While Green solicited the help of off-duty law enforcement officers to be present at
Gulf Coast for a time, this practice did not last long. A Gulf Coast employee
testified that once customers began to be intimidated by the presence of an officer,
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Green decided that any officers should remain outside, usually in their police
vehicles.
Drug dealer Nicholas Smith, who typically paid either Green or Hebble in
cash, said that one time he tried to hand Green money while an officer was present,
and “[Green] frowned on it, telling [Smith] not to do it in front of the police.”
Another time, Smith tried to fill some prescriptions, and Green told Smith the
prescriptions “weren’t right,” that either Smith could leave them and try again or
Green would call the police. Smith left the prescription with Gulf Coast, came
back the next day, and filled it; then “[e]verything was normal.”
As for Gulf Coast’s practice of verifying the validity of prescriptions,
evidence showed that those efforts were designed to ostensibly comply with “basic
requirement[s] of pharmacy law” without genuinely preventing the trafficking of
controlled substances for illicit purposes. One Gulf Coast intern reported that
Green instructed that for customers who had filled with Gulf Coast “a handful of
times, odds are [the doctor’s office is] going to okay it” and if Gulf Coast staff
could not get through to the doctor’s office, they should “just grandfather them in.”
Another employee reported that if a customer arrived after hours and only
defendants Green and Hebble were present, there would be no calls made to verify
prescriptions. Rarely would Gulf Coast speak with the prescribing doctor. Becker
admitted that “[i]f there was a question as to whether the prescription was to be
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filled because of some situation with the patient, . . . Mr. Green would have come
over and . . . we would refer it to him.”
C. Investigations
At trial, the government also presented evidence of numerous investigations
performed by Gulf Coast’s suppliers, culminating in the DEA’s raid of Gulf Coast
on November 4, 2011.
Around September 2010, Bill Stivers, compliance investigator at H.D.
Smith, reviewed Gulf Coast’s records. H.D. Smith is a wholesale pharmaceutical
distributor and was one of Gulf Coast’s suppliers. Stivers’s job was to ensure
compliance on the part of H.D. Smith’s customers by making sure that they had
access to a reasonable amount of pharmaceuticals and that those pharmaceuticals
were being dispensed for a legitimate medical purpose.
Since 2007, Gulf Coast had maintained an inactive account with H.D. Smith.
Then in 2010, Gulf Coast contacted H.D. Smith to open a new account.
Investigator Stivers soon noticed that over 90% of the drugs Gulf Coast purchased
were controlled substances, most of which were 30 mg or 15 mg doses of
oxycodone. That prompted Stivers to block Gulf Coast’s account around mid-
September of 2010, preventing Gulf Coast from ordering more drugs. That
discontinuance lasted until November 1, 2010, at which point Gulf Coast contacted
an H.D. Smith sales representative, who reopened the account.
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When investigator Stivers learned that Gulf Coast had been granted access to
oxycodone again, he called Gulf Coast to schedule an on-site visit. He requested a
copy of Gulf Coast’s dispensing report, which ordinarily would provide a detailed
accounting of every prescription filled at Gulf Coast for a certain time period,
including the drug, quantity, prescribing doctor, and payment method.
Prior to the visit, investigator Stivers reviewed Gulf Coast’s customer
profile, which defendant Green had previously completed and signed. In that
profile form, Green indicated that he understood that “[p]rescriptions can only be
issued by a doctor acting in the usual course of their professional practice,” and
“[d]rugs dispensed pursuant to invalid prescriptions are deemed not for legitimate
medical purpose, therefore, ILLEGAL.” Green also stated in the profile that 20%
of its purchases from H.D. Smith as well as all other suppliers were for controlled
substances. The profile further stated that Gulf Coast’s controlled-substance
business was 10% cash.
On November 9, 2010, investigator Stivers visited Gulf Coast. During his
visit, Stivers saw defendants Green and Hebble. He also noticed several Gulf
Coast customers standing in line with cash in hand. They appeared impaired and
lethargic with glassy eyes.
Investigator Stivers spoke with defendant Green. In response to Stivers’s
questions, Green shared that Gulf Coast filled about 300 prescriptions a day, that
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40-50% of those prescriptions were for controlled substances, and that customers
paid for those substances with cash about 20% of the time. Stivers found Gulf
Coast’s high volume of controlled substance prescriptions concerning—he testified
that anything over 20% is reason for H.D. Smith to ask questions. During his visit,
he counselled Green about guarding against fraudulent prescriptions.
After investigator Stivers left, Gulf Coast faxed him a “utilization record,”
not a dispensing report, which is what Stivers had specifically requested of
defendant Green during the visit. The utilization record disclosed less information,
omitting such details as the names of prescribing physicians or how the drugs were
purchased. The report did show the number and types of prescriptions filled, but
only for October 2010. Gulf Coast had filled over 900 oxycodone 30 mg
prescriptions, totaling over 160,000 pills, and 585 prescriptions for oxycodone
15 mg, totaling over 52,000 pills.
Concerned with what he saw, investigator Stivers recommended to H.D.
Smith that they stop supplying Gulf Coast. H.D. Smith then closed Gulf Coast’s
account.
In February 2011, investigator Donald Morse of Cardinal Health, Gulf
Coast’s biggest oxycodone supplier from 2009-2011, visited Gulf Coast to follow
up on a prior visit and to investigate the reasons for Gulf Coast’s increased
purchases of controlled substances. In 2008, defendant Green filled out a
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questionnaire for Cardinal Health. That questionnaire stated that 10% of Gulf
Coast’s revenue consisted of cash transactions (90% was Medicare, Medicaid, and
insurance) and 20% of Gulf Coast’s prescription sales were for controlled
substances. The questionnaire also stated that Gulf Coast was the “outpatient
pharmacy at Gulf Coast Hospital Lee Memorial.” Since 2008, based on requests
by defendant Green, Cardinal Health had increased Gulf Coast’s supply of
controlled substances multiple times.
On February 17, 2011, investigator Morse met with defendant Green to
inquire into the reasons for Gulf Coast’s increased controlled substance supply
requests. Morse wanted to make sure that Gulf Coast was vetting its prescribing
physicians and customers to ensure that the prescriptions were for legitimate
medical needs. Defendant Green offered several reasons for why Gulf Coast’s
controlled substance demands had increased.
One reason was that a palliative care doctor named Andrew Esch had
recently opened a clinic nearby, and defendant Green told investigator Morse that
Dr. Esch planned to direct most of his patients to Gulf Coast. Green produced a
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letter from Dr. Esch stating as much. But those plans never came to fruition, and
Dr. Esch testified that he stopped sending patients to Gulf Coast. 8
Defendant Green also explained that Gulf Coast filled prescriptions for
nearby hospitals, and one such hospital increased in size from 110 beds to 480
beds. As a final reason, Green told investigator Morse that Gulf Coast had a
relationship with the sheriff’s department. Green explained that Gulf Coast filled
prescriptions for the jail, and that Gulf Coast also filled prescriptions for all the
palliative care and pain management programs at the nearby hospitals, which Dr.
Esch oversaw. Green explained that the sheriff’s department supported the Gulf
Coast-hospital partnership because it allowed for greater centralization for where
controlled substance prescriptions were filled.
During the February 17 meeting, investigator Morse asked Green for
documentation about the sheriff department’s support for Gulf Coast’s controlled
substance business. Such documentation, however, “was not forthcoming.”9
A few months later, Cardinal Health’s national pain-medication supplier,
Covidien, began to investigate. Floyd Ratliff was Covidien’s chief security officer
8
While Dr. Esch had intended to partner with Gulf Coast, he soon stopped directing his
patients there. Many of Dr. Esch’s patients were Medicare or Medicaid patients, and defendant
Green told Dr. Esch that Gulf Coast did not accept Medicaid patients. Dr. Esch was also misled
into thinking that defendant Green was actually a pharmacist. Green had told Esch that he was,
and even wore a lab coat with “Pharmacist, Jeff” embroidered on the jacket.
9
After the defendants were arrested, in 2012 Cardinal Health was fined by the DEA for
failure to sufficiently monitor certain pharmacies as to the distribution of controlled substances.
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and a former FBI agent who had cross-trained with the DEA. Ratliff examined
Cardinal Health’s records and learned that Gulf Coast was Covidien’s largest
oxycodone consumer nationally. In the first nine months of 2011, Gulf Coast had
received over 1.2 million 30 mg oxycodone tablets manufactured by Covidien.
Equipped with this information, Ratliff visited Gulf Coast on September 13,
2011. When Ratliff arrived, he did not see a sign or anything indicating that there
was a pharmacy inside the building.10 Then he drove through the parking lot to get
a sense of the size of the complex and how many cars were present. As he drove,
Ratliff encountered a number of young people crossing the road to the parking lot.
Ratliff observed that these people appeared to know one another because they were
talking to each other. One “very obvious” thing Ratliff noticed was that “a number
of people [were] kneeling down beside cars, talking to the people inside.” It
appeared to Ratliff they were “transacting some type of business.” Ratliff did not
see any elderly people, people with walkers, or people that appeared to be in pain.
Ratliff parked his car. As he walked up to Gulf Coast, he noticed three
young people standing in the lobby talking to one another. As he approached,
“they stood absolutely still and quit talking. And they started watching [Ratliff].”
Ratliff observed Gulf Coast and the surrounding area for about 30 minutes. His
10
There may have been a nearby billboard advertising Gulf Coast, though the record is
unclear.
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visit was unannounced though, and he did not speak with anyone inside Gulf
Coast.
Following his visit, Ratliff promptly recommended to Covidien that it stop
supplying Cardinal Health with pills so as to cut off Gulf Coast’s supply. Covidien
also notified its other distributors via letter that they were to no longer supply Gulf
Coast with Covidien’s medications.
On November 4, 2011, DEA agents raided Gulf Coast pursuant to a search
warrant. Defendants Green and Hebble were both present. The pharmacist present
that day was Charles Krueger, someone one DEA agent described as appearing
“very ill.” During the search, between 20 and 40 customers arrived. Their
prescriptions were typically for oxycodone 30 mg tablets, oxycodone 15 mg
tablets, and another controlled substance. Such “cocktail” prescriptions were “red
flags” for the DEA investigators. Gulf Coast had also posted a price list by the
register listing that day’s price for oxycodone: $1.50 per 15 mg pill, $2.00 per 30
mg pill, and prices for bulk quantities of these pills. The investigators, however,
were not able to find any oxycodone 30 mg or oxycodone 15 mg in stock at Gulf
Coast that particular day.
III. SUFFICIENCY OF THE EVIDENCE
On appeal, defendants Green and Hebble challenge the sufficiency of the
evidence supporting their convictions, arguing they lacked mens rea. Specifically,
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they argue that the evidence did not show that they knowingly filled invalid
oxycodone prescriptions outside the usual course of professional practice and for
other than legitimate medical purposes, or that they deliberately closed their eyes
to circumstances that would have made them aware they were doing so.
A. Standard of Review
We review de novo a challenge to the sufficiency of the evidence to support
a conviction, “viewing the evidence in the light most favorable to the government
and drawing all reasonable inferences and credibility choices in favor of the jury’s
verdict.” United States v. Taylor, 480 F.3d 1025, 1026 (11th Cir. 2007). “We will
uphold a district court’s denial of a motion for a judgment of acquittal if a
reasonable trier of fact could conclude the evidence established the defendant’s
guilt beyond a reasonable doubt.”
Id.
To the extent the defendants’ argument “depends upon challenges to the
credibility of witnesses, the jury has exclusive province over that determination
and we may not revisit the question.” United States v. Hernandez,
743 F.3d 812,
814 (11th Cir. 2014) (quotation marks and alterations omitted). We will not
disturb the jury’s verdict “unless the testimony is incredible as a matter of law.”
United States v. Flores,
572 F.3d 1254, 1263 (11th Cir. 2009) (quotation marks
omitted). Testimony is not considered incredible as a matter of law unless it is
“unbelievable on its face,” that is, “testimony as to facts that the witness could not
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have possibly observed or events that could not have occurred under the laws of
nature.” United States v. Thompson, 422 F.3d 1285, 1291 (11th Cir. 2005)
(quotation marks and alterations omitted).
B. Conspiracy to Distribute Controlled Substances
To prove a conspiracy to distribute controlled substances in violation of
21 U.S.C. § 846, the government was required to prove: “(1) a conspiracy (or
agreement) existed between Defendants or between Defendants and others;
(2) Defendants knew the essential objects of the conspiracy, which are to do either
an unlawful act or a lawful act by unlawful means; and (3) Defendants knowingly
and voluntarily participated in the conspiracy.” United States v. Westry, 524 F.3d
1198, 1212 (11th Cir. 2008).
In this case, the illegal objects of the conspiracy consisted of violations of
21 U.S.C. § 841(a)(1), which provides that “[e]xcept as authorized by this
subchapter, it shall be unlawful for any person knowingly or intentionally . . . to
manufacture, distribute, or dispense, or possess with intent to manufacture,
distribute, or dispense, a controlled substance.”11 21 U.S.C. § 841(a)(1). Some
individuals and entities are “authorized by this subchapter” to distribute controlled
substances. See, e.g., 21 U.S.C. § 822 (addressing registration and conditions
governing the authorized distribution of controlled substances). Accordingly, the
11
Also cited in the conspiracy charge was 21 U.S.C. § 841(b)(1)(C), the penalty provision
for violations of § 841(a)(1).
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defendants were charged with conspiracy to distribute controlled substances
outside the usual course of professional practice and for other than legitimate
medical purposes.
The government asserts that the conspiracy charge included three objects:
(1) possession with intent to distribute, (2) distribution, and (3) distribution outside
the usual course of professional practice and for other than legitimate medical
purposes. The jury verdict form shows that the jury found both defendants
conspired to achieve all three objects of the conspiracy.
The government presented more than sufficient evidence to prove that
defendants Green and Hebble conspired to achieve these objects, distributing
controlled substances illegally by filling prescriptions of oxycodone for the benefit
of numerous drug dealers and fake patients operating within an illegal controlled
substances underground market.12 The indictment charged that the defendants
conspired with others and with each other to distribute controlled substances for an
illegitimate purpose. The government needed to prove either that the defendants
conspired directly with illegal controlled substance underground market
participants, such as drug dealers or doctors, or that the defendants conspired with
12
The government argues that in the defendants’ brief, they challenge only the evidence
supporting the jury’s finding as to the “distribution outside the usual course” object of the
conspiracy, otherwise conceding they possessed and distributed controlled substances. The
government concludes that the defendants have thus abandoned any challenge to their conspiracy
conviction predicated on the first two objects. We disagree and consider evidence of all three
objects.
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each other to avail themselves of that illegal market. Here, sufficient evidence
supported all conspiracy objects.13
As for conspiring with others, a number of drug dealers testified that they
used Gulf Coast to fill their fake patients’ bogus prescriptions, and defendants
Green and Hebble frequently served them. For example, Willie Hayden knew he
could call Gulf Coast if he were running late, and the defendants would hold the
pharmacy open for him. Hayden would double check that Gulf Coast had pills in
stock, and Hebble would confirm that it did. Christopher McNaughton testified
that he “got to know” Hebble, and he received his “pills faster than anybody.”
The jury also heard from prescribing doctors and managers of clinics, who
were the players responsible for churning out the prescriptions that fueled the
underground market. They testified that Green and Hebble actively solicited
business from Sara Cogdill’s and Dr. John Legowik’s clinics, both of which
referred patients to Gulf Coast, which willingly accommodated their requests. The
jury could have reasonably inferred that the defendants conspired with drug
13
The government also argues that the jury’s verdict should be affirmed because the
defendants failed to prove that they were authorized to distribute controlled substances in the
first instance. The government argues that 21 U.S.C. § 841(a)(1) by default criminalizes the
distribution of controlled substances and that the statute’s “[e]xcept as authorized by this
subchapter” language makes available an affirmative defense that a defendant has the burden of
proving at trial (for example, that the defendant is a proper DEA registrant or that he fits within
another safe harbor provision). 21 U.S.C. § 841(a)(1).
We need not decide whether and what all a defendant must prove to establish that he was
authorized to distribute controlled substances because the evidence here is overwhelming that
both defendants conspired to distribute controlled substances outside the usual course of
professional practice and for other than legitimate medical purposes.
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dealers, clinic staff, or both to distribute controlled substances outside the course of
professional practice and for other than legitimate medical purposes.
There was also plenty of evidence showing that defendants Green and
Hebble conspired with each other to distribute controlled substances, knowing that
many of their customers were drug dealers or illicit users of drugs. Numerous
government witnesses, including employees, customers, investigators, and the
government’s expert, described the many red flags the defendants should have
easily noticed. They described the long lines of customers who flocked to Gulf
Coast for oxycodone, many of whom plainly exhibited tell-tale signs of drug
abuse. These customers usually paid in cash, and with drugs in hand, would often
start transacting business right away with others on the phone or in the vicinity.
In addition to the readily observable characteristics and behaviors of Gulf
Coast’s clientele, a reasonable juror could conclude that the prescriptions
themselves readily put defendants Green and Hebble on clear notice that many
customers were filling their prescriptions for illicit use. Green and Hebble knew
many customers were traveling long distances from the prescribing physician to fill
prescriptions at Gulf Coast, and the defendants knew that a number of these “east
coast” doctors were under the investigatory eye of the DEA. Green and Hebble’s
pharmacy routinely filled multiple cocktail prescriptions, sometimes written by the
same doctor, for groups of people presenting at the same time at Gulf Coast. These
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cocktail prescriptions were typically nearly identical, containing both 30 mg and
15 mg dosages of oxycodone.
There was also plenty of evidence from which the jury could infer that even
a lay person, let alone someone with some amount of pharmaceutical expertise,
could readily discern multiple red flags signaling illicit activity. The government’s
expert, Robert Parrado, explained that pharmacies faced with the kind of red flags
springing up at Gulf Coast have a duty to investigate and resolve those red flags
before dispensing controlled substances. But instead of diligently investigating
those red flags, defendant Hebble instructed Gulf Coast’s employees not to “judge
[Gulf Coast’s] customers; even if they’re high,” adding, “they are acceptable to
take their medication.”
While the defendants point to selected examples where Gulf Coast declined
to fill a given customer’s prescription, began turning away prescriptions from
doctors who had developed a notorious reputation with law enforcement, or even
cooperated with law enforcement in their investigations of select individuals, these
instances are not conclusive proof of an innocent mind. Faced with abundant mens
rea evidence, the jury was free to infer from these examples that the defendants
were trying to execute their conspiracy shrewdly so that they would not easily be
caught themselves.
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On appeal, the defendants also argue that the policies and procedures they
implemented at Gulf Coast, particularly their policy of verifying prescriptions,
functioned as “fail safes” that prevented the defendants from knowing that a
portion of the prescriptions Gulf Coast filled were derived from an illegal scheme
perpetuated by drug dealers and participating doctors. The jury, however, was free
to find these measures to be nothing more than a façade simply designed to convey
the appearance of legitimacy. The jury heard examples where these measures were
not enforced, such as when Gulf Coast would fill prescriptions for customers after
hours with no pharmacist on duty or when defendant Green would sign pharmacist
Mahan’s name to prescriptions when Mahan was not around. One customer
testified that whether Gulf Coast actually checked for identification depended on
whether a law enforcement officer was present or not.
Even where Gulf Coast did follow its procedures though, including its
prescription-verification procedure, the defendants do not explain how these
procedures guarded against their dispensing controlled substances for an illicit
purpose, which by definition is outside the usual course of professional practice.
The jury could find that Gulf Coast’s verification procedure was little more than a
rubber-stamp measure designed to ensure that an actual doctor had actually written
a given prescription. Given the evidence that the defendants either conspired
directly with certain doctors who wrote illegitimate prescriptions or they at least
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had reason to believe that the prescribing doctors were participants in an illegal
scheme, Gulf Coast’s verification policy did nothing to ensure that the
prescriptions it filled were validly written for legitimate medical purposes. In fact,
in some instances, verification may have confirmed that a suspect doctor had in
fact written a given prescription. The defendants’ argument that the prescriptions
Gulf Coast filled were “valid on their face” and, in effect, provide them with a safe
harbor from drug distribution conspiracy charges would necessarily shield the
varied participants in any illegal controlled substance underground market so long
as some licensed doctor signed the prescriptions. The jury was not compelled to
attribute the weight the defendants do to Gulf Coast’s procedures.
The defendants also offer many reasons why various government witnesses
who testified, especially the former drug dealers, should not have been believed.
For example, the defendants argue that Gulf Coast records undermine the
testimony different drug dealers gave regarding the frequency with which they
took fake patients to Gulf Coast to fill prescriptions. The defendants argue that
some of these drug dealers were impeached at trial for failure to recall specific
dates they went to Gulf Coast or the names of specific fake patients they took with
them. The problem for the defendants is that the jury did not have to credit Gulf
Coast’s own store records over the drug dealers’ testimony or find these drug
dealers to be unbelievable for their failure to recall at trial specific dates and
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names. Most critically, the defendants have not pointed us to any examples of
government witness testimony that were “incredible as a matter of law,” Flores,
572 F.3d at 1263, and thus we will not disturb the jury’s verdict on that basis,
Hernandez, 743 F.3d at 814.
Defendant Hebble specifically argues that the evidence against her was
comparatively weaker than the evidence against defendant Green because she was
“merely a cashier and business manager and not a pharmacy technician.” Her
argument ignores that the evidence shows that Hebble routinely worked the check-
out counter and cash register with a ready view of Gulf Coast’s customers, and she
spoke over the phone with underground market participants including drug dealers
and suspect clinics. Hebble also actively solicited business from some of the
suspect clinics, such as CMG and Physicians Wellness Center, that directed
customers toward Gulf Coast. Hebble (together with Green) also benefited
substantially from the proceeds of Gulf Coast’s business. Hebble’s separate
sufficiency arguments are unavailing.
In the face of abundant mens rea evidence, the defendants also argue that the
government was required to show and failed to show that either defendant knew
that any particular prescription was written outside the usual course of professional
practice and for other than legitimate medical purposes. That argument mistakes
the nature of the crime charged in this case. Defendants Green and Hebble were
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charged with one count of conspiracy to distribute; their indictment did not include
individual distribution counts for specific transactions. The conspiracy crime for
which they were charged was the making of an agreement and the knowing and
voluntary participation in that agreement to avail themselves of a lucrative illegal
controlled substance underground market, not for any single drug transaction in
which they engaged. See Westry, 524 F.3d at 1212. There was plenty of evidence
that the defendants knew they were dispensing and distributing controlled
substances in large quantities to a customer base that included numerous drug
dealers and consumers who used these drugs illegally. That evidence was
sufficient to sustain their convictions.
C. Conspiracy to Commit Money Laundering and Substantive Counts
The defendants challenge the sufficiency of the evidence supporting their
convictions for the remaining counts, including one count for conspiracy to
commit money laundering, in violation of 18 U.S.C. § 1956(h), and multiple
substantive counts of money laundering for individual monetary transactions, in
violation of 18 U.S.C. §§ 1957 and 2. Both defendants were co-owners and
cosigners on Gulf Coast’s bank accounts.
The defendants did not make a general challenge to the sufficiency of the
evidence supporting their money laundering convictions. Rather, they made
specific challenges, which were the same as their challenges to the drug
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distribution conspiracy convictions, primarily that they did not knowingly fill
illegal prescriptions. In turn, they assert that because they did not participate in
any unlawful prescription activity, they did not know the money they deposited
were proceeds of unlawful activity. 14 As explained above, sufficient evidence
showed the defendants knowingly participated in an illegal drug distribution
conspiracy, and thus their same arguments fail here too.
Further, for the first time on appeal, the defendants raise additional specific
challenges to their money laundering convictions on the grounds that the
government failed to prove (1) the money deposited into various bank accounts
were actually the proceeds of their illegally distributing controlled substances as
opposed to proceeds from other legitimate business of the pharmacy, and that
(2) Hebble knew this fact. “When a defendant raises specific challenges to the
sufficiency of the evidence in the district court, but not the specific challenge he
tries to raise on appeal, we review his argument for plain error.” United States v.
Baston, ___ F.3d ___, Nos. 14-14444, 15-10923, 2016 WL 1162202, at *8 (11th
14
In the district court, the defendants’ Rule 29 joint motion for judgment of acquittal
argued:
In this case, we have one conspiracy to distribute drugs, one conspiracy
for money laundering, and substantive money laundering counts. I’m not going to
spend any time on the money laundering issue because, if the Count 1 conspiracy
falls, I believe that the remaining money laundering counts would have to fall,
because they depend upon the funds that are at issue in the money laundering
counts having been generated by specified unlawful activity, that specified
unlawful activity is the Count 1 conspiracy to distribute drugs.
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Cir. Mar. 24, 2016). In this case, we readily conclude their arguments lack merit
under both plain error and de novo review.
18 U.S.C. § 1957 provides a criminal penalty when one “knowingly engages
or attempts to engage in a monetary transaction in criminally derived property of a
value greater than $10,000 and is derived from specified unlawful activity.”
18 U.S.C. § 1957(a). In turn, 18 U.S.C. § 1956(h) provides that “[a]ny person who
conspires to commit any offense defined in . . . section 1957 shall be subject to the
same penalties as those prescribed for the offense the commission of which was the
object of the conspiracy.” 18 U.S.C. § 1956(h).
At trial, overwhelming evidence showed that Gulf Coast brought in millions
of dollars from drug sales, most of which came from selling oxycodone. In 2010,
Gulf Coast purchased almost 1.5 million oxycodone pills from distributors for
retail sale. In 2011, it purchased over 2 million pills. In turn, Gulf Coast then sold
these pills either by the pill or in set quantities to its customers. Gulf Coast
employees testified that Gulf Coast charged between $250 and $500 per
oxycodone prescription, or $800 to $900 per prescription for the name brand
Roxicodone. Gulf Coast refused to take insurance for oxycodone (though it took
insurance for other medications). Notably too, most customers paid in cash.
Indeed one employee testified that Gulf Coast took in between $15,000 and
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$28,000 in cash per register per day. A jury could readily and reasonably conclude
that most of that cash income was due to the illicit oxycodone sales.
Gulf Coast’s utilization record from October 2010 illustrates one month’s
oxycodone output. That month, Gulf Coast filled over 900 oxycodone 30 mg
prescriptions and over 585 oxycodone 15 mg prescriptions for a total of 1,485
oxycodone prescriptions. Those 1,485 prescriptions accounted for 212,000
oxycodone pills. To use the most conservative of price figures presented at trial, if
Gulf Coast charged just $250 per prescription in October 2010, then Gulf Coast
would have brought in $371,250 in oxycodone sales alone for that month. That
means Gulf Coast charged on average $1.75 per pill.
That $1.75-per-pill figure is fully consistent with Gulf Coast’s prices over a
year later on the day the DEA raided the pharmacy. That day, Gulf Coast was
charging $1.50 per 15 mg pill of oxycodone and $2.00 per 30 mg pill. In 2011,
Gulf Coast purchased over 2 million oxycodone pills from distributors for sale, and
a reasonable juror could conclude that Gulf Coast apparently sold most of them
since Gulf Coast frequently experienced supply shortfalls near the end of the
month. If Gulf Coast sold those 2 million pills for an average price of $1.50-per-
pill, that easily accounts for the $3,000,000 that was deposited into one of Gulf
Coast’s bank accounts in 2011. Only defendants Green and Hebble had signing
authority over that bank account.
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And only defendants Green and Hebble had signing authority over another
bank account into which a significant portion of that money was transferred before
being spent on various items. The indictment included money laundering counts
for six transactions in 2011 totaling $402,599.18. Only $60,000 of that money or
14.9% needed to be proceeds of illegal drug distribution to sustain the money
laundering counts and the money laundering conspiracy count predicated on these
six transactions.
The jury heard one of Gulf Coast’s pharmacists admit that approximately
90% of the prescriptions Gulf Coast filled were for oxycodone. The jury could
reasonably have inferred that 90% of the $402,599.18 covered by the indictment
was due to oxycodone sales, a percentage far greater than 14.9%. And on that
basis, in combination with the overwhelming evidence of underground market
oxycodone activity presented at trial and the defendants’ participation in that
underground market activity, the jury could reasonably find that the defendants
money laundered proceeds of illegal drug distribution for the statutory dollar
amount minimum on the six occasions covered by the indictment and conspired
with each other to do so.
Defendant Hebble’s individualized sufficiency arguments are without merit.
As Hebble concedes, the evidence showed that: (1) Hebble’s managerial role at
Gulf Coast made her responsible for handling the pharmacy’s financial records,
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receipts, tax returns, and other such records; (2) she regularly personally deposited
Gulf Coast’s revenues into Gulf Coast’s bank account; and (3) she in turn was one
of the principal beneficiaries of Gulf Coast’s profits along with defendant Green.
Abundant evidence inculpated her rather than exculpated her from the money
laundering scheme.
In sum, the evidence was amply sufficient to sustain the defendants’
convictions even under de novo review, much less plain error review.
IV. MOTION TO SEVER
Defendant Hebble appeals the district court’s denial of her pre-trial motion
to sever as well as her renewed motion at the close of the government’s case.
Hebble argues that had she and defendant Green been tried separately, Green
would have testified at her trial and would have exonerated her.
A. Severance Law
A defendant arguing for severance to permit a codefendant’s exculpatory
testimony must demonstrate: “(1) a bona fide need for the testimony; (2) the
substance of the desired testimony; (3) the exculpatory nature and effect of the
desired testimony; and (4) that the co-defendant would indeed have testified at a
separate trial.” United States v. Novaton, 271 F.3d 968, 989 (11th Cir. 2001). If
the defendant makes this showing, then, to determine if severance is warranted, the
district court must: “(1) examine the significance of the testimony in relation to the
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defendant’s theory of the case; (2) assess the extent of prejudice caused by the
absence of the testimony; (3) consider judicial administration and economy; and
(4) give weight to the timeliness of the motion.” Id.
We review the district court’s denial of a motion to sever for abuse of
discretion. See United States v. Liss,
265 F.3d 1220, 1227 (11th Cir. 2001).
Because “appellate courts are reluctant to second-guess trial court refusals to grant
a severance, . . . to show an abuse of discretion, a defendant must satisfy the heavy
burden of demonstrating compelling prejudice from the denial of a motion to
sever.”
Novaton, 271 F.3d at 989 (quotation marks and alterations omitted).
In reviewing the district court’s severance ruling, we “have often looked
hard at the substance of the affidavits proffered by the co-defendant who
purportedly would testify in a separate trial.” Id. “[S]tatements concerning the
testimony that would become available by severing trials must be specific and
exonerative, rather than conclusory or self-serving, in order to justify severance.”
Id. at 990. And a codefendant’s proffered testimony in favor of the moving
defendant is of “dubious credibility” when “it was in no way contrary to the
[codefendant’s] own interests.” United States v. Pepe,
747 F.2d 632, 651 (11th
Cir. 1984).
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B. Analysis
In support of her pre-trial motion to sever, defendant Hebble submitted an
affidavit by defendant Green in which he asserted that if “HEBBLE’s trial [were]
held separately and subsequently from [his], [he would] be available to take the
stand as a defense witness on Ms. HEBBLE’s behalf.” While Green stated he was
“willing to testify” for Hebble, he conditioned his willingness on his being
“allowed to proceed to trial first, so that the testimony [he would give] on Ms.
HEBBLE’s behalf [could not] be used against [him] at [his] own trial.”
Turning to the substance of his proffered testimony, Green described his
close association with Hebble, largely stressing his “unique position to provide
exculpatory testimony” for Hebble but without specifically stating what that
exculpatory testimony was. Green stated:
During this 2009 through 2011 time period, my codefendant,
Ms. HEBBLE, was employed by Gulf Coast Pharmacy as an office
manager. In addition, during the same time frame, Ms. HEBBLE and
I became engaged to be married. We resided together in a home that I
owned during this time. Because of our shared personal and
professional lives, I am in a unique position to provide exculpatory
testimony on Ms. HEBBLE’s behalf. As both Ms. HEBBLE’s
employer and her fiancé, I spent nearly all my time in her company.
In my role as her employer, I know better than anyone else what her
duties and responsibilities at Gulf Coast Pharmacy entailed; I had, in
essence, assigned those duties and responsibilities to her. Even more
crucially, as her fiancé, I am alone in a position to testify to facts that
would establish Ms. HEBBLE’s innocent state of mind; no other
potential witness could possibly testify as to many of these facts, since
those facts relate to matters that occurred when Ms. HEBBLE and I
were alone.
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In addition, based on my review with counsel of the discovery
provided by the prosecution, we are aware of the likely identities of
some of the persons the government will call as prosecution witnesses
against Ms. HEBBLE at trial. I am in a position to provide Ms.
HEBBLE’s defense with testimony that will contradict and impeach
the testimony of these witnesses. In many instances, I had a unique
vantage point to see Ms. HEBBLE’s interactions with these potential
government witnesses and, thus, to establish her innocence to the
charges brought against her in this case.
The district court ruled that neither Hebble’s severance motion nor Green’s
affidavit satisfied the legal standards that warrant severance.
At trial, Hebble renewed her severance motion at the close of the
government’s case. 15 Hebble argued that if the trials were severed at that point,
Green would be in a position to refute testimony that several government witnesses
had given. Hebble alleged that Green would testify (1) that Hebble had not given
recycled pills to drug dealer Christopher McNaughton without his having a
prescription in hand, and (2) that Hebble had not seen news reports of drug dealer
David Massey’s arrest. Regarding the McNaughton sale, Green would explain that
he had reviewed Gulf Coast’s records and this incident could not have occurred
without his knowledge. Regarding Hebble’s seeing news of Massey’s arrest,
Green would explain that he and Hebble had been “spending all their time
15
Out of caution, the government concedes that we also may consider any specific,
exonerative facts Hebble proffered at the time of her renewed severance motion that were not
included in Green’s affidavit submitted with Hebble’s pretrial severance motion. See Byrd v.
Wainwright, 428 F.2d 1017, 1019 (5th Cir. 1970).
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together” and had been watching the same news broadcasts. Since Green and
Hebble had not discussed the Massey news story together, she must not have seen
it. The district court again denied Hebble’s motion to sever.
We conclude that defendant Hebble has come nowhere close to showing that
the district court abused its discretion in denying her severance motion. As to
several aspects of Green’s proffered testimony, Hebble did not show a “bona fide
need for the testimony.” Novaton, 271 F.3d at 989. Other witnesses could readily
have provided testimony that Green could have provided. Hebble could have
explored the contents of Gulf Coast’s records through the testimony of other
employees who worked at Gulf Coast, and many of these employees could
likewise have testified regarding Hebble’s duties and responsibilities at Gulf Coast.
Hebble also failed to identify the substance of the desired testimony. Id. In
his affidavit, Green asserted that he was “in a position to testify to facts that would
establish Ms. HEBBLE’s innocent state of mind,” but he did not identify what
those facts were. Even where Green asserted that he would provide testimony that
would contradict and impeach government witnesses, he did not say what that
testimony was. At most, Green’s proposed testimony as to various government
witnesses amounted to bare conclusory assertions that the events those witnesses
described did not happen. Bare assertions that a codefendant knows substantive
facts are not themselves substantive facts.
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Hebble also did not show the “exculpatory nature and effect of the desired
testimony.” Id. Green’s assertion that he was in a “unique position” to provide
exonerating evidence given Green and Hebble’s close relationship does not
necessarily suggest his testimony would indeed be exonerating. Since Green and
Hebble were charged with conspiring together, a jury could reasonably find their
close relationship to be a fact that inculpated Hebble rather than exculpated her.
We also note that nothing Green offered to say on Hebble’s behalf was in any way
contrary to Green’s own interests. See
Pepe, 747 F.2d at 651. In essence, Green’s
proffered testimony was no different than claiming that neither he nor Hebble had
conspired to distribute controlled substances illegally. Green’s conclusory and
self-serving proffered testimony is not the kind of testimony that warrants
severance. See
Novaton, 271 F.3d at 989.
In sum, the facts of this case only reaffirm the “well-settled principle that it
is preferred that persons who are charged together should also be tried together,
particularly in conspiracy cases.” United States v. Smith, 918 F.2d 1551, 1559
(11th Cir. 1990) (quotation marks omitted). We do not find that the district court
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abused its discretion in denying Hebble’s severance motions.16
AFFIRMED.
16
The defendants also challenge the district court’s denial of their post-trial motion
requesting the court to dismiss the indictment for selective prosecution, in violation of the Fifth
Amendment’s Due Process Clause. The defendants acknowledge that they did not timely raise
this claim before trial as they were required to do, see United States v. Scrushy, 721 F.3d 1288,
1305-06 (11th Cir. 2013), but they assert their delay was excused because the evidence on which
to base their claim did not arise until mid-trial and alternatively their trial counsel was
ineffective.
Assuming without deciding that the defendants showed cause for not timely raising their
selective prosecution claim and that the issue is properly before us on the merits, we find the
defendants’ claim wholly without merit.
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