Case: 15-11780      Date Filed: 10/12/2016     Page: 1 of 41


                                                                    [DO NOT PUBLISH]



                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT
                            _________________________

                                   No. 15-11780
                            _________________________

                        D.C. Docket No. 1:13-cr-00268-WS-C-1


UNITED STATES OF AMERICA,

                                                                        Plaintiff-Appellee,


                                           versus


TRAVIS EDWARD GROSS,


                                                                    Defendant-Appellant.

                             _________________________

                      Appeal from the United States District Court
                         for the Southern District of Alabama
                             ________________________

                                   (October 12, 2016)

Before WILSON and MARTIN, Circuit Judges, and RODGERS, * District Judge.
PER CURIAM:



       *
         Honorable Margaret C. Rodgers, Chief United States District Judge, Northern District
of Florida, sitting by designation.
               Case: 15-11780       Date Filed: 10/12/2016      Page: 2 of 41


       Travis Gross was charged, tried, and convicted of conspiracy to smuggle a

drug known as XLR11 into the United States and to introduce that drug into

interstate commerce as misbranded, in violation of 18 U.S.C. §§ 371, 542, 545, and

21 U.S.C. §§ 331, 333(a)(2) (Count One); as well as three counts of money

laundering, in violation of 18 U.S.C. § 1957 (Counts Four, Five, and Six); and

conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h)

(Count Seven). 1 Gross was sentenced to 156 months’ imprisonment. He now

appeals his convictions and sentence. Having carefully reviewed the matter and

with the benefit of oral argument, we affirm.

                                               I.

       ZenBio, LLC (“ZenBio”) produced and sold smokable “designer” drugs

commonly known as “spice,” which were manufactured with the synthetic drug

XLR11. Travis Gross was responsible for ordering ZenBio’s supply of XLR11.

The indictment charged Gross and others with a conspiracy to smuggle and

misbrand XLR11 from November 20, 2012, through June 25, 2013. Although

XLR11 was not a federally controlled substance until May 16, 2013, the record

establishes that at all relevant times, XLR11 was a “drug” subject to FDA labeling



       1
         Additionally, Gross was charged in Counts Two and Three with conspiracy to import
and to distribute “controlled substance analogues,” 21 U.S.C. §§ 802(32)(A), 846, 963, but these
charges were dismissed before trial.

                                               2
                Case: 15-11780       Date Filed: 10/12/2016       Page: 3 of 41


and branding laws, 2 that it became a controlled substance in Florida in December

2012, and that law enforcement was seizing XLR11 during the entire period.3

       ZenBio followed the ordinary “industry” model used by designer drug

businesses, which was described at trial by Special Agent Scott Albrecht of the

Drug Enforcement Administration (“DEA”). Agent Albrecht explained that

“synthetic cannabinoids” are “designer drugs” developed from a nonorganic source

and intended to produce effects similar to THC, the active ingredient in marijuana.4

By 2008, synthetic cannabinoids had become part of a designer drug market in the

United States for smokable products intended to circumvent existing drug laws.

According to Agent Albrecht, a cycle developed in which new drugs emerged

quickly whenever an existing synthetic cannabinoid was added to the list of

controlled substances under state or federal law, making it difficult for the laws to

keep up. The newest drugs on the market could be sold for a huge profit. Thus,

there was an industry incentive to develop and market the next “legal” smokable



       2
         Under the Federal Food Drug and Cosmetic Act, a “drug” means an “article[] (other
than food) intended to affect the structure or any function of the body of man or other animals.”
21 U.S.C. § 321(g)(1)(C). The Federal Food Drug and Cosmetic Act prohibits delivering or
introducing any misbranded drug into interstate commerce. 21 U.S.C. § 331(a).
       3
         The parties stipulated that the imported packages and products seized in this case
contained XLR11.
       4
          Agent Albrecht explained that synthetic designer drugs are designed to imitate the
effects of other substances and said that LSD and MDMA, also known as ecstasy, are among the
list of well-known and now-illegal synthetic drugs.

                                                3
               Case: 15-11780      Date Filed: 10/12/2016      Page: 4 of 41


product before the drug was listed as a controlled substance. In the months

preceding the July 9, 2012 effective date of the Synthetic Drug Abuse Prevention

Act, which banned several synthetic drugs, the industry was already beginning to

produce XLR11 and its close “chemical sister,” UR 144, to replace a drug called

AM2201 in an anticipation of the new law. 5 XLR11 was temporarily listed as a

Schedule I federally controlled substance on May 16, 2013, and was permanently

scheduled on May 11, 2016.6

       Agent Albrecht explained that the industry’s shift to XLR11 as the newest

synthetic designer drug did not escape the attention of law enforcement. Some

states had already begun to ban the substance; in Florida, for instance, XLR11

became a listed controlled substance in December 2012. Albrecht testified that 99

percent of the time, XLR11 and all other synthetic cannabinoids were imported

from China, and often ordered online. He stated, however, that as legislation

       5
         Agent Albrecht explained that after the first synthetic cannabinoid, JWH 018, was
temporarily scheduled, which occurred in March 2011, the industry began producing AM2201.
Both of these drugs became permanently scheduled controlled substances with the enactment of
the Synthetic Drug Abuse Prevention Act on July 9, 2012.
       6
         On May 16, 2013, the DEA published a notice stating that XLR11 was being
temporarily paced on Schedule I as an illegal substance as of that date. See Schedules of
Controlled Substances: Temporary Placement of Three Synthetic Cannabinoids in Schedule I, 78
Fed. Reg. 28735-01, 

(May 16, 2013) (also providing 30 days for
manufacturers who register with the DEA to comply with federal regulations). The temporary
placement was effective for three years, and XLR11 was recently permanently added as a
Schedule I controlled substance on May 11, 2016. See Schedules of Controlled Substances:
Placement of UR-144, XLR11, and AKB48 into Schedule I, 81 Fed. Reg. 29142-01, 

(May 11, 2016) (Final Rule permanently placing XLR11 in Schedule 1); see also 21
C.F.R. 1308.11(d)(49) (2016).

                                              4
                Case: 15-11780       Date Filed: 10/12/2016       Page: 5 of 41


designed to preclude the use of synthetic drugs increased, online ordering ceased,

and the majority of the orders were placed by telephone and email instead, with

payment sent by wire transfer.

       In an effort to avoid detection and possible seizure at ports of entry,

importers divided XLR11 into smaller packages, which were shipped to busy ports

of entry with hopes of the substance having a better chance of passing through

customs. Agent Albrecht also testified that XLR11 shipments were often

mislabeled as detergent or research chemicals. Special Agent Christopher

Marshall, with the United States Customs and Border Protection agency, testified

that customs officers often inspected and seized packages of chemicals or drugs

from China labeled with suspicious names such as pearl powder, clean powder,

sodium dioxide, bora nitro, or other very generic chemical descriptions, knowing

that illicit drugs were regularly being imported from China, usually with a false

declaration or bill of lading. Marshall had seen these names repeatedly on

packages from China and said that when inspected, the packages were found to

contain XLR11 instead of the chemical or product listed. Neither Albrecht nor

Marshall had seen any packages with XLR11 listed on the bill of lading, despite

federal law requiring an accurate description of a package’s contents.7


       7
         Federal law prohibits smuggling goods into the United States by means of a false or
fraudulent invoice or document with the intent to defraud the United States and contrary to law.
See 18 U.S.C. §§ 542, 545.
                                                5
               Case: 15-11780       Date Filed: 10/12/2016      Page: 6 of 41


       Agent Albrecht was also familiar with the industry-wide manner of

processing XLR11 into a smokable retail product. He testified that after importing

the XLR11, the designer drug manufacturers would dilute the XLR11 in acetone

and mix it with an organic carrier, most often herbs or plant leaves, to make a final

smokable product, which was then falsely marketed as herbal incense, potpourri, or

“spice.” The final product would routinely be labeled “not for human

consumption” in an effort to circumvent federal Food and Drug Administration

(“FDA”) regulations and evade law enforcement. Lay witnesses testified that they

had purchased the products to smoke and attested to their personal experiences

with XLR11’s harmful effects.8

       Consistent with this industry model, the evidence at trial showed that

ZenBio obtained XLR11 from China by importing it with false labels to avoid

detection and seizure at the port of entry, and then manufactured smokable

products by mixing the XLR11 with acetone and botanicals (organic material

consisting of ground or shredded leaves of certain exotic plants, which are lawful




       8
          Although not a chemist, Agent Albrecht testified on cross examination that he
understood XLR11 was in fact not substantially similar to marijuana chemically but that it was
similar to other drugs. He was not asked to name what other drugs it was similar to. Other lay
witnesses discussed the effects of XLR11 and stated that it caused severe paranoia, among other
adverse effects.
                                              6
                Case: 15-11780       Date Filed: 10/12/2016       Page: 7 of 41


to possess, import, and sell). 9 The designer drugs were then packaged for resale in

Ziploc plastic baggies, disguised as herbal incense or potpourri, and shipped to

convenience stores and smokeshops throughout the United States for retail sale.10

ZenBio’s product labels included ZenBio’s name and logo, the brand name of the

product, and a caution, “not for human consumption.” The labeling listed the

botanical material and also sometimes listed chemicals that were not in the packet,

but none of the labels listed XLR11 or indicated that the packet contained a

smokable product. Witnesses at trial testified that despite the label, the product

was understood to be smokable and in fact was purchased for smoking, not as

incense or potpourri.

       Prior to November 2012, ZenBio was known as Zencense Incense Works

(“Zencense”). Zencense was based in Pensacola, Florida, and owned by Burton

Ritchie. Zencense manufactured and distributed smokable synthetic cannabinoid

products using XLR11 under the brand names Avalanche, Bizarro, Neutronium,

Orgazmo, Posh, Shock Wave, and Sonic Zero. Crystal Henry was in charge of

       9
         ZenBio also followed the standard industry-wide manufacturing process of making a
solution of XLR11 (a sandy, crystalline powder) and acetone. The solution was introduced to a
botanical “carrier” by spraying the botanical with the solution and mixing them together. The
treated botanicals were then spread out on drying tables for 12 to 24 hours before a flavoring was
added.
       10
          ZenBio products were found in smokeshops in Missouri, Tennessee, Illinois,
Minnesota, and Maryland. Special Agent Craig Underwood calculated that if an ordinary bag of
potpourri were offered for sale at the prices being charged for ZenBio products, it would cost
around $700.

                                                7
               Case: 15-11780       Date Filed: 10/12/2016      Page: 8 of 41


accounting for Zensence; Robert Biggerstaff was responsible for sales and

production management; and Jason Way was described as the ultimate decision

maker for the business. Ben Galecki initially coordinated Zensence’s supply of

XLR11, which he ordered through a middleman, either Jason Fox 11 or Adam

Libby. 12 Gross supplied Zencense with botanicals through his company, Sanctuary

Traders.

       In August 2012, Anthony Nottoli, a smokeshop entrepreneur from California

who was interested in purchasing Zencense, met with Ritchie, Henry, and Gross in

Pensacola. Ritchie introduced Gross to Nottoli as Zencense’s botanical supplier.

By mid-November 2012, Nottoli had purchased Zencense and changed the

company name to ZenBio, LLC, but he retained Zencense’s key employees.

ZenBio continued to manufacture the same product line as Zencense but moved the

raw-materials storage and bulk manufacturing operations to a warehouse in

Millbrae, California, where Tim Ortiz became head of production.                    ZenBio’s

administrative functions remained in Pensacola until December 2012, when


       11
         Fox was a smokeshop owner in Arizona who was trying to start an XLR11 importing
business when he began filling Galecki’s XLR11 orders from China. Fox’s first contact with the
Zencense/ZenBio operation was meeting Galecki at a trade show in August 2012.
       12
           Libby was a chemist and chemical supplier from Virginia. His company, AI Biotech,
provided ZenBio purity reports regarding its product. There were two types of reports: one
listing the chemicals or substances that the product sample did not contain, which was produced
to smokeshop owners, and another listing what the sample did contain, including XLR11, which
was provided to ZenBio but not its customers.

                                              8
                 Case: 15-11780       Date Filed: 10/12/2016       Page: 9 of 41


XLR11 was named as a scheduled controlled substance under Florida law (codified

at Fla. Stat. § 893.03(1)(c)(152)), at which point ZenBio immediately left Florida

and moved its administrative office to Robertsdale, Alabama.

      When the administrative operations moved to Alabama in December 2012,

Gross took over responsibility for obtaining and maintaining an adequate supply of

XLR11 for ZenBio, and the record shows that he also purchased plastic Ziploc

baggies from a company in China that were used to package ZenBio’s products.

Nottoli testified at trial that he was told that the chemicals were coming directly

from China. According to Nottoli, Gross was paid two percent of ZenBio’s profits,

in addition to being reimbursed for the botanicals he supplied through Sanctuary

Traders. 13 Henry testified consistent with Nottoli that Gross was paid two percent

for his work of “finding the materials and management.” (Doc. 125, at 119–20).

Similarly, Biggerstaff, head of sales, testified that although Gross never visited the

Alabama office, he continued to order the necessary supply of XLR11 after the

office moved to Alabama. He described Gross as “head of procurement” and knew

him as the man who “we were buying the botanicals from to actually make the

product, and that he was in charge [of] getting and securing the active ingredient

for us as well.” (Doc. 124, at 88–89). Biggerstaff had seen the packages that the



      13
           Nottoli characterized this two-percent stake as an “ownership interest.”

                                                 9
              Case: 15-11780       Date Filed: 10/12/2016      Page: 10 of 41


chemicals arrived in and knew the writing to be Chinese or oriental, so he assumed

they were coming from China.

       Fox, a middleman supplier, also testified that Gross was responsible for

ordering all of ZenBio’s chemicals. He said Gross told him that he had taken over

the job from Galecki. Although Gross and Fox never met in person, they talked,

emailed, and texted frequently. Fox said he and Gross used several “throwaway”

telephones to avoid law enforcement monitoring, and Fox said Gross would use the

name “Arturo” in emails using his ZenBio email address, zenbiotravis@gmail.

Fox testified that Gross would instruct him as to the quantity of XLR needed and

would provide the addresses for shipping the goods, which consisted of several

post office boxes, UPS or Copy/Com store accounts in New York, usually listed

under the name Adam Libby, who was another supplier for Gross, but never in

Gross’s name. 14 Fox testified that Gross asked how fast he could get the product

and, based on the quantity Gross was ordering (50–100 kilograms of XLR11

weekly), Fox advised him to arrange for several different mail or UPS boxes to

receive the shipments. Fox explained at trial that it was necessary to break the

large orders into smaller 2-kilogram packages to avoid customs scrutiny and

minimize the impact of any seizure on ZenBio’s chemical supply, even though this

       14
         Fox explained that New York was preferred as a port of entry over Los Angeles
because New York had a higher volume of import traffic, which made it more likely that the
XLR11 shipments would be overlooked by customs enforcement.

                                              10
                 Case: 15-11780     Date Filed: 10/12/2016    Page: 11 of 41


resulted in higher shipping costs. Fox said Gross was aware of this and said he

would email or text Gross the tracking numbers corresponding to each shipped

package. Fox also explained that, although he and Gross did not directly discuss

the reason for this strategy, it was understood that this was the way it needed to

work in this industry to ensure an uninterrupted supply of XLR11 and avoid

customs seizures, which would result if the boxes were identified as XLR11. Fox

said that Libby handled the product after it arrived in New York but that he (Fox)

was responsible for replacing any product that was seized before delivery. Fox’s

payment would be wired to his company, “Hostile Investing,” and Fox, in turn,

would forward payment to China before the XLR11 would ship.15

       Henry testified that Gross would instruct her to wire payment for

“chemicals” to Hostile Investing and other suppliers, including Elite Distributing

and James Hertel. Henry testified that multiple emails she received from Gross

instructing her to wire payments to these suppliers were in fact payments for

“chemicals.” Also in evidence were bank records showing subsequent wires from

Hostile Investment and Hertel directly to China. In a December 2012 email from

Gross to Henry, he asked her to check on a wire and expressed concern because the

money had not yet been received in China, although it was unclear from the email


       15
             Fox had his own middleman or “partner” who interacted directly with the Chinese
suppliers.

                                              11
              Case: 15-11780       Date Filed: 10/12/2016     Page: 12 of 41


whether he was referencing a chemical payment or payment for plastic baggies. 16

Henry also confirmed that Gross used several different untraceable cell phones

when ordering chemicals for ZenBio and contacting her.

       Fox testified to once receiving an email inquiry from Gross about a package

from China (which he assumed was from a different supplier) that was detained by

customs at the port in New York. According to Fox, customs was asking Gross

about the product, and Gross did not know what to tell them that the chemical

would be used for. Fox said he understood that Gross needed to know what to say

“to get it through customs,” and Fox responded “delicately,” giving Gross some

general information about fragrances used in detergents and soaps that he quickly

found on the internet and that Gross could offer as an explanation. Fox said that,

to avoid detection, he never mentioned XLR11 directly in an email or text to

Gross, and he did not know what exactly was written on the import labels;

however, he acknowledged that the labels “certainly didn’t say [XLR11].”

According to Fox, it was not necessary to instruct anyone to mislabel XLR11 on

import packages because, “[i]n the industry, you just knew that it was coming in


       16
           Henry testified that Gross sometimes gave her invoices and receipts for payments
related to botanicals supplied by Sanctuary Traders and for plastic baggie purchases, which he
ordered from China. However, she said there were never invoices for the chemical purchases.
The record reflects that Gross sent emails to Alice Yip at Caiyuntian Plastic Package, Co. in
China, regarding orders of plastic baggies, but the record additionally reflects that Yip’s
company also sold chemicals, and there was evidence linking chemical shipments from Yip’s
company to Elite Distributing, which was one of Gross’s suppliers.

                                             12
               Case: 15-11780       Date Filed: 10/12/2016       Page: 13 of 41


under a different [name] –you didn’t need to tell anybody. The only way it was

getting into the country is by it coming in under whatever they want to put on it. It

could be shoe shine.”

       Gross used other XLR11 suppliers as well, including Adam Libby and

Kevin Clancy. Libby’s name was on some of the post office and UPS boxes in

New York that Gross directed Fox to send XLR11 shipments to. Clancy received

shipments in New York under the name James Hertel and also received wire

payments from Gross through a bank account in Hertel’s name, which Gross

directed Henry to wire payments to for chemicals. 17 Henry testified, and emails

confirmed, that Gross also used a chemical supplier in Nevada called Elite

Distributing, which the evidence showed also imported chemicals from China.

Although Gross used third-party suppliers and nominees for the chemical

shipments from China, he himself purchased Ziploc baggies from China and had

them shipped directly to the California facility in his own name.



       17
          Hertel testified that Clancy gave him money to open the account. Hertel knew money
was being wired to the account but did not know Henry or ZenBio. He said Clancy would give
him the numbers he used to transfer the money elsewhere but he did not know where it was
going. Hertel said the money was Clancy’s, and that in return, Clancy paid him for the use of his
name. Records showed that money was transferred from the account to China. Special Agent
Christopher Marshall, Department of Homeland Security, reviewed lists of products shipped in
Hertel’s name from China to New York (but not seized). The lists included names of items that
Marshall recognized as showing up repeatedly on shipments of powder contraband, such as
“pearl powder” and “silicone dioxide.” Agent Marshall said items bearing similar suspicious but
innocuous names had been seized in the past from Chinese companies and found to contain
XLR11.

                                               13
             Case: 15-11780    Date Filed: 10/12/2016   Page: 14 of 41


      After import, the manufacturing and labeling of ZenBio’s product for retail

sales occurred at the Milbrae, California, warehouse. Gross visited the California

production warehouse on only one or two occasions, based on testimony from

Nottoli and Biggerstaff. Biggerstaff testified that on one occasion, “[w]e were

both there at the same time just overseeing production to make sure that everything

was getting done like it was supposed to be.” He and Gross walked through the

production warehouse together and observed workers weighing the product and

packaging it into ZenBio’s black foil bags, each marked with a label containing the

name of the retail product. Biggerstaff said each bag also contained a label that

said “not for human consumption,” which he explained was intended to make it

appear as though the product was not to be consumed orally, contrary to ZenBio’s

intent in manufacturing it. There was also evidence that two emails dated

December 6, 2012, titled “ZenBio adjusted art” and containing a text stating that

the attachments included images of “Modified label art,” had been sent to Gross,

Jason Way, and Crystal Henry for comment. The images were forwarded from the

label company, and the attachments included proposed color photographs of labels,

each clearly containing the ZenBio logo and the statement, “not for human

consumption.” Two of the labels also included a list of chemicals the product did

not contain. A third email, dated January 15, 2013, sent to Gross and two others at




                                         14
              Case: 15-11780       Date Filed: 10/12/2016      Page: 15 of 41


ZenBio merely referenced an attached list of revised product labels that was being

ordered.

       ZenBio’s primary operating account was a Bank of America checking

account opened on November 29, 2012.18 Henry testified that all of the company’s

sales profits were deposited into the Bank of America account. Additionally,

Henry paid Gross through Sanctuary Traders out of the Bank of America account

and also wired payments to the chemical suppliers from that account, as directed

by Gross. However, Gross did not have signature authority on the Bank of

America account. For a time, ZenBio also had an account with Gulf Coast

Community Bank in Florida on which Gross did have co-signing authority, but this

account was closed when ZenBio moved to Alabama in December 2012, and there

was no evidence that Gross ever used the account.

       On February 11, 2013, Ortiz notified Nottoli of a ZenBio product seizure,

stating that the company was facing “impending doom.” 19 Biggerstaff and Henry

testified that they were also aware of the seizure, as well as others, because ZenBio

had a policy of replacing the product the first time it was seized and thus, product

       18
          ZenBio also had an account with Wells Fargo until the bank began to put holds on
ZenBio’s wire transfers. In early February 2013, Henry sent an email to ZenBio members and
employees (the list included Gross) stating that the Wells Fargo account was closed because the
bank was not interested in doing business any longer with their “industry.” Gross did not have
any signature authority on this account.
       19
         The email is from “Michael Fitton,” which Nottoli said was Ortiz’s “pen name.” The
message included a forwarded note from Jim Vail, Gross’s co-defendant, stressing the
importance of determining which law enforcement agency had intercepted the order.
                                              15
                Case: 15-11780       Date Filed: 10/12/2016       Page: 16 of 41


seizures cost the company money. Product seizures also threatened the company’s

existence.

      In early April 2013, Gross told Henry he was leaving the business. He

placed Henry in charge of purchasing the chemicals and instructed Fox to contact

her. The record reflects, however, that although Gross was no longer ordering the

chemicals, he continued to advise Henry because she was unfamiliar with the

ordering process. For instance, on one occasion, Henry asked Gross whether she

should follow Fox’s advice to arrange for a UPS postal address in Alabama to

receive the imports in small packages and then send them on to California,

repackaged. He advised her to follow that procedure, and she did. She also asked

him to teach her about ordering the chemicals. Gross, however, would not do this

over the telephone—Henry said Gross was very particular about what he discussed

by telephone or text—so according to Henry, Gross agreed to meet her in the

Atlanta airport to discuss the ordering process, which, again, was after he

supposedly was no longer involved in the operation.20

      On April 11, 2013, Adam Libby was arrested on federal charges. When

Nottoli learned this, he and other ZenBio members decided to disband the

company. At this time, five months into its existence, ZenBio had grossed over

$29.5 million from its sales. Additionally, bank records showed that ZenBio had


      20
           At the time, Henry lived in Pensacola, Florida, and Gross lived in Chicago.
                                                16
             Case: 15-11780     Date Filed: 10/12/2016   Page: 17 of 41


transferred over $1.4 million to Gross through payments to his company, Sanctuary

Traders.

      Later in April 2013, Bruce Allen, a United States Postal Inspector in

Daphne, Alabama, seized several UPS packages containing a large quantity of

product that had been imported from China and shipped to Crystal Henry. The

product had been separated for shipping into 47, 2-kilogram shipments. Each was

tested and found to contain XLR 11, although XLR11 was not listed on any of the

import labels. Also, between March and May 2013, Special Agent Marshall, then

working for the Department of Homeland Security, purchased ZenBio products

undercover to be tested. Marshall testified that he ordered several ZenBio

products, including Bizarro, which came in black packages with a content label

that included only the product name and the name of plant materials. Some labels

also listed chemicals that the product did not contain, but none of the product

labels referenced XLR11. All of the product, however, contained XLR11.

      In July 2013, during the federal investigation of ZenBio, Special Agent

Jason Gordon interviewed Gross. According to Gordon, Gross admitted selling

botanicals to ZenBio and estimated that since November 2012, he had sold in the

range of 36,000 pounds of botanicals to ZenBio at a price of $15 to $17 per pound.

Gross also told Nottoli that he had a supplier for Ziploc baggies in China through

which ZenBio purchased baggies for packaging its product. Gross admitted using

                                         17
              Case: 15-11780      Date Filed: 10/12/2016      Page: 18 of 41


an email address of zenbiotravis@gmail for communicating with Nottoli about the

supply of botanicals.21 Gross told Special Agent Gordon that he visited the

Millbrae production facility once or twice, toured the production floor, and

admitted he suspected they were making “spice.” Gross also admitted he had been

an authorized signer on one ZenBio bank account. He explained that Nottoli told

him he would receive $12,000 a week for opening an account in his name as an

employee of ZenBio, which he decided not to do, but he also said in vague terms

that he had been employed to review “orders” for Nottoli, compare them with

“invoices,” and send out payments if they matched. He did not tell Special Agent

Gordon that he ordered chemicals for ZenBio or that he was paid a percentage of

the company’s profits.

       The jury returned guilty verdicts against Gross on all counts. After the close

of the Government’s evidence, the district court denied Gross’s Rule 29 motion for

judgment of acquittal. Gross also moved for judgment of acquittal and a new trial

after the verdict, renewing his arguments on the sufficiency of the evidence and

challenging the district court’s evidentiary rulings admitting Special Agent

Albrecht’s testimony about the industry, lay witness testimony about the effects of

smoking ZenBio’s products, and two incidents where agents had referenced


       21
          According to Henry, Fox, and email exhibits, Gross also used the name Arturo Fuente
in the zenbiotravis@gmail emails, although he did not use the name in person.

                                             18
              Case: 15-11780       Date Filed: 10/12/2016      Page: 19 of 41


XLR11 as “a controlled substance analogue.” 22 By a written order, the district

court denied the renewed motion for judgment of acquittal and the motion for a

new trial.

       At sentencing, the district court calculated Gross’s offense level pursuant to

the money laundering guideline, United States Sentencing Commission, Guidelines

Manual (“USSG”), § 2S1.1(a)(2), which directed a base offense level of 8 plus the

number of offense levels corresponding to the value of the laundered funds as

shown in the table under USSG § 2B1.1(b)(1)(L). Because the district court found

that the value of the laundered funds was $23,566,000, 22 levels were added, for a

Base Offense Level of 30. To this, the district court added 1 level because Gross

was found guilty of 18 U.S.C. § 1957, and an additional 3 levels for his

supervisory role in the offense, for a Total Offense Level of 34. See USSG

§§ 2S1.1(b)(2)(A) (specific offense characteristics), 3B1.1(b) (aggravating role in

the offense as manager or supervisor). Considering a Criminal History Category of

I, Gross’s guidelines range was 151–188 months. The district court overruled

Gross’s objections to the guidelines calculation and, after considering the factors in

18 U.S.C. § 3553(a), sentenced him to 156 months of imprisonment, which was at



       22
           A controlled substance analogue is a category of substances substantially similar to
those listed as federal controlled substances that are to be treated as Schedule I controlled
substances if intended for human consumption. 21 U.S.C. §§ 802(32)(A) & 813. The analogue
counts were dismissed prior to trial.

                                              19
             Case: 15-11780      Date Filed: 10/12/2016    Page: 20 of 41


the lower end of the range. The district judge said that he would have imposed the

same sentence regardless of the guidelines calculation, given the compelling

evidence of Gross’s guilt and the trial record showing the dangerous nature of

XLR11, the “staggering” amount of money made by smuggling the drug from

China, and the lay witness testimony regarding the dangerous effects of the drug

when consumed.

                                           II.

      Gross challenges the sufficiency of the evidence to support his convictions.

“We review the sufficiency of the evidence to support a conviction de novo,

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, 

, 1026 (11th Cir. 2007). In doing so, we consider

whether there is evidence from which a reasonable trier of fact could find guilt

beyond a reasonable doubt. See United States v. Green, 

, 1274 (11th

Cir. 2016). A conviction may be based on direct or circumstantial evidence.

United States v. Martin, 

, 587 (11th Cir. 2015). Where credibility

calls are at issue, this court “will not disturb the jury’s verdict ‘unless the testimony

is incredible as a matter of law.’” 

(quoting United States

v. Flores, 

, 1263 (11th Cir. 2009)). Additionally, the evidence need

not “exclude every reasonable hypothesis of innocence;” the “jury is free to choose

                                           20
               Case: 15-11780        Date Filed: 10/12/2016       Page: 21 of 41


among reasonable constructions of the evidence.” United States v. Peters, 

, 1268 (11th Cir. 2005) (quoting United States v. Montes-Cardenas, 

, 778 (11th Cir. 1984)).

                       A. Smuggling and Misbranding Conspiracy

       The jury convicted Gross of a conspiracy to defraud the United States, on

finding that the Government had proven two separate objects of the conspiracy,

including smuggling XLR11 into the United States by means of a false statement

contrary to law and in violation of 18 U.S.C. §§ 545, 542, 23 and (2) misbranding

the XLR11 and causing it to be introduced into interstate commerce, in violation of

21 U.S.C. §§ 331(a), 333(a)(2),24 all with intent to defraud the United States. See

18 U.S.C. § 371. To prove a conspiracy to defraud the United States under § 371,

the government must prove: (1) “an agreement among two or more persons to

achieve an unlawful objective;” (2) knowledge of and voluntary participation in the

agreement; and (3) a conspirator’s overt act in furtherance of that agreement. See


       23
           Federal law prohibits knowingly smuggling goods into the United States that should
have been invoiced or that passed through customs by a fraudulent invoice or other document or
paper, with intent to defraud the United States, and prohibits “knowingly receiv[ing],
conceal[ing], buy[ing], sell[ing], or in any manner facilitat[ing] the transportation, concealment,
or sale of such merchandise after importation, knowing” it was clandestinely imported, contrary
to law. 18 U.S.C. § 545. Section 542 provides that introducing goods or imported merchandise
into the commerce of the United States by means of a false statement is a criminal offense. 18
U.S.C. § 542.
       24
          The Federal Food Drug and Cosmetic Act prohibits “[t]he introduction or delivery for
introduction into interstate commerce of any food, drug, device, tobacco product, or cosmetic
that is adulterated or misbranded.” 21 U.S.C. § 331(a). Section 333 provides the criminal
penalty for violating § 331 with intent to defraud or mislead. 21 U.S.C. § 333(a)(2).
                                                21
             Case: 15-11780     Date Filed: 10/12/2016    Page: 22 of 41


United States v. Hasson, 

, 1270 (11th Cir. 2003). The government

need only prove that the defendant knew the essential nature of the conspiracy, not

every detail. See United States v. Vernon, 

, 1273 (11th Cir. 2013).

And knowledge of a conspiracy is sufficient “when the circumstances surrounding

a person’s presence at the scene of conspiratorial activity are so obvious that

knowledge of its character can be fairly attributable to him.” 

(quoting United States v. Molina, 

, 828 (11th Cir. 2006)). Voluntary

participation is shown by evidence of “surrounding circumstances such as acts

committed by the defendant which furthered the purpose of the conspiracy.” 

States v. Parrado, 

, 1570 (11th Cir. 1990)). Finally,

we have said that “[b]ecause conspiracies are secretive by nature, the existence of

an agreement and [the defendant’s] participation in the conspiracy may be proven

entirely from circumstantial evidence.” United States v. Flanders, 

,

1329 (11th Cir. 2014) (quoting United States v. White, 

, 1214 (11th

Cir. 2011)), cert. denied, 

(2015).

      Gross argues the government failed to prove he had knowledge of the

conspiracy by simply showing an industry practice or that others knew of the

unlawful objective the conspiracy, citing United States v. Kaplan, 

,

121 (2d Cir. 2007) (finding little relevance in proving that others in the office had

knowledge of insurance fraud). The court agrees that generally, evidence of the

                                          22
             Case: 15-11780    Date Filed: 10/12/2016   Page: 23 of 41


knowledge of others, without more, is insufficient to demonstrate a defendant’s

knowledge of the unlawful object of a conspiracy. See United States v. Willner,

, 1309–10 (11th Cir. 2015) (reversing a conspiracy conviction for

lack of proof of knowledge). It is well settled, however, that a defendant’s

knowledge of an unlawful agreement and knowing participation can be proven by

circumstantial evidence. See, e.g., United States v. Pierre, 

, 1193

(11th Cir. 2016); 

. On careful review of the record in

this case, the court finds that Gross’s own actions provide ample circumstantial

evidence of his knowledge of the conspiracy and intent to join it. The record

reflects that Gross not only attended the initial organizational meeting for ZenBio

in November 2012, but also was one of three or four people who played a central

role in the company from the outset, and he was solely responsible for ordering the

XLR11. Gross spoke directly with the suppliers, always using one of multiple

untraceable cell phones to place the XLR11 orders and to direct Henry to wire

payments for XLR11 shipments. He also used a different name in emails and was

careful to discuss XLR11 only as “units,” without ever referencing its name in

writing. Gross knew the product was being shipped in multiple containers; he

instructed suppliers to send it to mailboxes in the name of others; and he knew the

shipments were sent to a busy port of entry and were making their way to

numerous post office and UPS boxes without seizure. These actions are

                                         23
             Case: 15-11780     Date Filed: 10/12/2016    Page: 24 of 41


compellingly inconsistent with what would be expected of a person attempting to

honestly obtain a legal product. Also, because Fox was responsible for replacing

the chemical if seized at the port of entry and Gross did not get paid unless there

was a profit from the final product, Fox and Gross both had a strong incentive to

avoid detection and seizure of the XLR11 at the port of entry. The jury was also

free to believe Fox’s testimony that Gross once asked him what to say about the

product’s use in order to get a shipment through customs. Gross had ordered the

product, so if he believed it was legitimate and properly labeled, he would not have

needed to ask Fox for a plausible explanation regarding its use. See 

–74 (noting that “when the circumstances surrounding a person’s

presence at the scene of conspiratorial activity are so obvious . . . knowledge of its

character can fairly be attributed to him” (internal quotations omitted)). The jury

could also infer knowledge from the fact that when questioned by law

enforcement, Gross admitted he suspected ZenBio was producing spice, but he did

not disclose his role of ordering the chemicals or his profits. He also falsely stated

to an investigator that he used the zenbiotravis email only for the purpose of

discussing botanicals with Nottoli, and he offered a false explanation as to how he

earned $12,000 per week from ZenBio.

      For those reasons, Gross’s reliance on Kaplan and Willner is unavailing. In

Kaplan, although the Second Circuit found that evidence of others’ knowledge had

                                          24
             Case: 15-11780     Date Filed: 10/12/2016    Page: 25 of 41


little relevance in proving the defendant’s knowledge, the court also recognized

that the knowledge of others would be “highly relevant” if supplemented by

evidence that the information was communicated to the defendant or that “[the

defendant] had been exposed to the same sources from which the[ ] others derived

their 

. The court in Kaplan also found it significant

that the insurance office where the fraud took place was not the type of office

where the illegal nature of the business was necessarily visible to everyone who

worked there. See 

contrast, the sole purpose of the business was to

import XLR11 and sell XLR11 products before the law caught up with the scheme,

and there was ample evidence that Gross was exposed to the same sources of

information as others with knowledge because he was the one ordering chemicals

for the business and communicating with the suppliers.

      In Willner, we reversed a Medicare fraud conspiracy conviction against one

defendant, Dr. Vanya Abreu, who was the Medicare compliance program director

in a clinic where other doctors were engaged in Medicare 

–

10. Despite her position in the clinic and some evidence at trial that Dr. Abreu

should have known about the fraud based on what others were doing, we found no

evidence, direct or circumstantial, sufficient to raise an inference that she actually

knew of the fraud or that she knowingly joined in the conspiracy. See 

10. We also noted that Dr. Abreu had not benefitted in any way from the fraud.

                                          25
               Case: 15-11780       Date Filed: 10/12/2016       Page: 26 of 41


See 

circumstantial evidence of Gross’s knowledge is not based solely

on his position in ZenBio or the knowledge of others, as Gross contends.

Moreover, Gross personally profited enormously from the smuggling. Thus,

contrary to the evidence in Willner, the record of Gross’s own actions, as outlined

fully above, is sufficient for a reasonable jury to infer that he had knowledge of an

agreement to engage in unlawful smuggling activity and that he knowingly joined

that conspiracy. 25

       We also reject Gross’s argument that because XLR11 was not a controlled

substance at the time of his offense, the rule of lenity should apply. Although we

have previously applied the rule of lenity to a conviction under § 545, see United

States v. Izurieta, 

, 1183–84 (11th Cir. 2013), the rule applied in that

case only because the smuggling violation charged was contrary to a regulation

that was ambiguous regarding criminal liability. By contrast, Gross’s conviction is

based on a criminal statute that plainly prohibits smuggling by false labeling to



       25
          Alternatively, although the jury was not instructed on deliberate ignorance, Gross could
not insulate himself from criminal liability by having the boxes shipped to others and remaining
deliberately ignorant of the falsity of the labels where he had every reason to know that the
mislabeling and smuggling were necessary for XLR11 to arrive in the United States. The
evidence could have supported a verdict on this ground as well. This court has “consistently
recognized deliberate ignorance of criminal activity as the equivalent of knowledge.” United
States v. Alvarez-Coria, 

, 1344 (11th Cir. 2006) (internal quotations omitted); see
also 

(stating deliberate ignorance may establish knowledge of the
unlawful purpose of the conspiracy); United States v. Hristov, 

, 952 (11th Cir.
2006) (noting this court has “long recognized” that deliberate ignorance may be proof of
knowledge).

                                               26
               Case: 15-11780      Date Filed: 10/12/2016       Page: 27 of 41


avoid customs detection. See 18 U.S.C. § 542 (“Entry of goods by means of false

statements”). Thus, the rule of lenity has no application here.

       There was also evidence from which the jury could infer that Gross had

knowledge of and willfully joined the conspiracy with regard to the second

objective, i.e., to misbrand drugs sold in interstate commerce. 26 Federal law

prohibits introducing any adulterated or misbranded drug into interstate commerce.

See 21 U.S.C. §§ 331(a); 331(k). The evidence at trial established that ZenBio was

mislabeling drugs and delivering them into interstate commerce purporting to be

pot-pourri. Gross’s knowledge and participation could be inferred from the fact

that he was copied on emails containing product art labels that plainly show the

product was labeled “not for human consumption,” despite the company’s clear

intent to sell smokable designer drugs. Also, the labels emailed to Gross did not

list XLR11 as an ingredient, and he knew that the product contained XLR11 (he

maintained at trial that it was a legal product). It is immaterial that Gross did not

respond to the emails. They were sent directly to his email address, he responded

to other emails at that address, and thus he was exposed to the same source of

information as others with knowledge. See, e.g., 

(stating

exposure to the same sources of knowledge as others is highly relevant).

       26
           Although “the evidence need only be sufficient for any one of the charged objects to
sustain a conviction,” United States v. Moran, 

, 963 (11th Cir.), cert. denied sub
nom. Huarte v. United States, 

(2015), the jury found Gross guilty of both objects
of the conspiracy.
                                              27
              Case: 15-11780       Date Filed: 10/12/2016      Page: 28 of 41


Additionally, the inference is bolstered by Gross’s visits to the California facility

where the manufacturing and packaging occurred and his receipt of a cut of the

profits from the misbranded products. And, because he was ordering the chemicals

for the product, the jury could reasonably infer his knowledge that marketing the

products as ordinary pot-pourri was false. In light of this evidence, it is immaterial

to the conspiracy charge that Gross did not have direct involvement in the

misbranding of the retail product.27

              B. Money Laundering and Money Laundering Conspiracy

       The jury convicted Gross on three counts of substantive money laundering

based on three wire transfers from ZenBio’s Bank of America account on February

19, 2013, and March 4 and 19, 2013, in violation of 18 U.S.C. § 1957, and one

count of conspiracy to commit money laundering, in violation of 18 U.S.C.

§ 1956(h). A conviction under § 1957 requires proof that the defendant knowingly

engaged in a monetary transaction in “criminally derived property of a greater

value than $10,000” that was “derived from specified unlawful activity.” 18

U.S.C. § 1957(a); see also United States v. Toll, 

, 1358 (11th Cir.

2015). The statute defines a “monetary transaction” as including a deposit,

withdrawal or transfer of funds. § 1957(f)(1). The term “criminally derived


       27
          Again, alternatively, Gross cannot remain willfully blind to the purpose of the
conspiracy where he had every reason to know of it. See 

; 

.
                                              28
             Case: 15-11780     Date Filed: 10/12/2016   Page: 29 of 41


property” means “any property constituting, or derived from, proceeds obtained

from a criminal offense. § 1957(f)(2). The term “proceeds” is defined broadly as

including “any property derived from or obtained or retained, directly or indirectly,

through some form of unlawful activity, including the gross receipts of such

activity.” 18 U.S.C. § 1956(c)(9); see also § 1957(f)(3). Because “[m]oney

laundering is an offense to be punished separately from the underlying criminal

offense,” it cannot occur until after “the predicate crime becomes a ‘completed

offense.’” United States v. Nolan, 

, 1315 (11th Cir. 2000) (quoting

United States v. Christo, 

, 579 (11th Cir. 1997)).

      Regarding the substantive money laundering counts, Gross first argues there

is insufficient evidence that he knew the funds were proceeds of criminal activity

because he lacked knowledge of the underlying unlawful smuggling. This

argument fails for the reasons recited above. We have already determined that

there was sufficient evidence from which a jury could infer that Gross, who

ordered the XLR11 from China through middlemen and received profits from the

sales, knew of the smuggling and that it resulted in proceeds in ZenBio’s account.

Special Agent Underwood testified that all of the receipts from the retail sales of

the XLR11 products were deposited into ZenBio’s Bank of America account, and

there is sufficient evidence that Gross directed Henry to wire the three payments

(over $10,000 each) to Hertel’s account from ZenBio’s Bank of America account

                                         29
             Case: 15-11780     Date Filed: 10/12/2016   Page: 30 of 41


for more chemicals. Henry wired the money. It is immaterial that Gross did not

have signature authority on the account because his ability to direct Henry to make

the payment shows he had control. See 

(defendant

demonstrated control over an account as if it was his own).

      Gross argues that there were no proceeds from the smuggling because the

profits derived from the retail sale of ZenBio’s products were too attenuated to be

considered proceeds of smuggling XLR11, relying on United States v. Khanani,

, 1296 (11th Cir. 2007). We disagree. In Khanani, we found that

the connection between profits realized from the sale of jeans (goods sold) and the

specified unlawful activity of employing undocumented aliens (labor), although

causally plausible, was too indirect to be considered proceeds derived from the

unlawful employment activity. 

of Khanani are distinguishable from

this case where the proceeds were derived from the sale of a product that included

the unlawfully smuggled XLR11 as the vital ingredient. Moreover, after we

decided Khanani, Congress amended the definition of proceeds to include any

property obtained “directly or indirectly” from the unlawful activity. 18 U.S.C.

§ 1956(c)(9); see also 18 U.S.C. § 1957(f)(3). Because the smuggled XLR11 was

a necessary part of the goods sold and was the sole reason the product generated

extraordinarily high profits, the proceeds at issue were obtained at a minimum

indirectly, if not directly, from the unlawful smuggling activity.

                                          30
             Case: 15-11780     Date Filed: 10/12/2016    Page: 31 of 41


      We also reject Gross’s argument that the three wire transfers providing the

basis for the substantive money laundering counts, which occurred in February and

March 2013, could not have included “proceeds” because the only XLR11

shipments in evidence were seized in April 2013, which was after the wire

transfers. This argument lacks merit and deserves little discussion. For reasons

already stated, a reasonable jury could find from the evidence at trial that all

shipments of XLR11 to ZenBio, which Gross had been ordering from Fox since at

least December 2012, originated from China, were labeled incorrectly in order to

pass through customs, and produced the proceeds that were deposited into

ZenBio’s account.

      Similarly unavailing is Gross’s argument that the substantive money

laundering transactions were nothing more than payment for XLR11, which was

part of the underlying smuggling activity, citing United States v. Harris, 

(5th Cir. 2012). While Harris stands for the proposition that a mere payment

in exchange for controlled substances cannot be considered money laundering, the

payment in Harris did not involve proceeds because the drug transaction was not

completed until after the money exchanged hands. Here, as we have already

determined, the money previously deposited into ZenBio’s Bank of America

account and used in the wire transactions in February and March for the purpose of




                                          31
             Case: 15-11780     Date Filed: 10/12/2016   Page: 32 of 41


purchasing more chemicals was proceeds from prior completed smuggling

activity.

       Gross relies for his merger argument on the concurrence in United States v.

Santos, in which Justice Stevens stated that “[a]llowing the Government to treat the

mere payment of the expense of operating an illegal gambling business as a

separate offense is in practical effect tantamount to double jeopardy.” 

, 527, 

, 2033 (2008) (Stevens, J., concurring). We have noted

that the precedential value of Santos, where no rationale was supported by a

majority of the Justices, is limited by the concurrence to cases in which the

underlying criminal conduct is operating an unlicensed gambling business. See

United States v. Demarest, 

, 1242 (11th Cir. 2009).

       Gross also quotes part of a sentence from our opinion in United States v.

Esquenazi, 

(11th Cir.), cert. denied, 

(2014), for

support. The full quote from Esquenazi is: “Conducting a criminal enterprise

necessarily requires paying its essential expenses—doing so should not also be

separately punishable as money-laundering, at least when the rule of lenity comes

into play.” 

(emphasis added). But the rule of lenity is no longer in

play. After Santos applied the rule of lenity to interpret the ambiguous term

“proceeds” in the money laundering statutes, 

, 

,

Congress amended the language of sections 1956 and 1957 by defining the term

                                         32
             Case: 15-11780     Date Filed: 10/12/2016   Page: 33 of 41


“proceeds” to include gross receipts. See, e.g., United States v. Abdulwahab, 

, 531 n.8 (4th Cir. 2013) (“After the Supreme Court decided Santos,

Congress amended the money-laundering statute to specifically define ‘proceeds’

as ‘any property derived from or obtained or retained, directly or indirectly,

through some form of unlawful activity, including the gross receipts of such

activity.’” (quoting Fraud Enforcement and Regulatory Act of 2009, Pub. L. No.

111–21, § 2(f)(1), 123 Stat. 1617, 1618 (codified at 18 U.S.C. § 1956(c)(9))).

Esquenazi and 

, on which Gross also relies, both addressed pre-

amendment conduct.

      Also, contrary to Gross’s argument, the money laundering counts did not

charge transactions that were merely payment for the essential expenses of the

underlying conduct such that they were indistinct criminal offenses. Instead, the

money laundering counts charged transactions made using gross receipts of past,

completed criminal conduct for the purpose of financing new criminal conduct.

Even considering that the smuggling conspiracy was ongoing criminal activity, it is

sufficient that a portion or phase of the scheme had been completed and had

produced the proceeds used in the subsequent transaction. See United States v.

Richards, 

, 770 (1st Cir. 2000) (finding that money laundering can

occur with proceeds derived from “a completed phase of an ongoing offense”)

(quoting United States v. Conley, 

, 980 (3rd Cir. 1994)).

                                          33
             Case: 15-11780    Date Filed: 10/12/2016    Page: 34 of 41


      The money laundering conspiracy conviction is also supported by the record.

To prove a money laundering conspiracy, the government must establish “(1) an

agreement between two or more persons to commit a money-laundering offense;

and (2) knowing and voluntary participation in that agreement by the defendant.”

United States v. Moran, 

, 962 (11th Cir.) (quoting United States v.

Broughton, 

, 1280 (11th Cir. 2012)), cert. denied, 

(2015). Proof of a “formal agreement” is not required and instead, the government

may demonstrate the existence of “a meeting of the minds to commit an unlawful

act” by circumstantial evidence. United States v. Arias–Izquierdo, 

,

1182 (11th Cir. 2006); see also 

(noting circumstantial

evidence can establish the existence of an agreement). Additionally, “conspirators

are liable for all of the acts and foreseeable consequences of the conspiracy.”

United States v. Silvestri, 

, 1335 (11th Cir. 2005) (quoting United

States v. Alas, 

, 1251 (11th Cir. 1999)). An agreement and Gross’s

willing participation can be reasonably inferred from his knowledge that the

smuggling activity was generating large receipts on the retail end, his acceptance

of profits of over $1 million, which were transferred from ZenBio’s account and

deposited into Gross’s Sanctuary Traders account, and his repeated acts of

directing Henry to make payments to Hertel and other suppliers out of ZenBio’s

account. See United States v. Castronuovo, 649 F. App’x 904 (11th Cir. 2016)

                                         34
               Case: 15-11780        Date Filed: 10/12/2016       Page: 35 of 41


(finding an agreement to engage in “monetary transactions in criminally derived

property valued greater than $10,000 by [defendants] accepting their paychecks

with knowledge that the funds were derived from the clinics’ unlawful activity”)

(unpublished), cert denied, 

(Oct. 3, 2016). Also, it was

reasonably foreseeable that all of ZenBio’s profits would be deposited into its bank

account. Thus, there was sufficient evidence from which a jury could find that

Gross participated in a money laundering conspiracy.

                                               III.

       Gross also argues he is entitled to a new trial based on certain evidentiary

rulings and references in the record to XLR11 having been an analogue drug at the

time of the investigations. He contends this was highly prejudicial because the

analogue counts were dismissed prior to trial. Specifically, Gross objected to

Special Agent Albrecht’s testimony about synthetic drugs in general as lacking a

scientific foundation; the testimony of laypersons on the physical effects of XLR11

and ZenBio’s products in particular also as lacking a scientific foundation; and two

statements by government witnesses to the effect that XLR11 was a controlled

substance analogue.28 We review for an abuse of discretion the district court’s


       28
          During the Government’s examination of Special Agent Gordon, he answered one
question with the unsolicited statement that XLR11 was a controlled substance analogue.
Defense counsel declined the judge’s offer to give a cautionary instruction to the jury, finding it
best not to emphasize the matter. Also, in response to a question by defense counsel as to
whether XLR11 was a controlled substance at the time, Special Agent Randy Hoffman stated
that XLR11 was listed as a controlled substance analogue. Hoffman also acknowledged in his
                                                35
              Case: 15-11780       Date Filed: 10/12/2016     Page: 36 of 41


ruling on a motion for new trial, as well as its evidentiary rulings. See 

(scope of lay testimony); United States v. Sweat, 

, 1367

(11th Cir. 2009) (motion for new trial); United States v. Edouard, 

,

1343 (11th Cir. 2007) (evidentiary rulings). Even if an abuse of discretion is

shown, we will not reverse for a non-constitutional evidentiary error “absent a

reasonable likelihood that the defendant’s substantial rights were affected.” United

States v. Malol, 

, 1291 (11th Cir. 2007) (quoting United States v.

Sellers, 

, 601 (11th Cir. 1990)).

       Having carefully reviewed the record, we find no error that affected Gross’s

substantial rights. Even though Gross was not tried on the substantive analogue

counts, the testimony of Special Agent Albrecht regarding the synthetic drug

industry practices and testimony of lay witnesses regarding why the product was

purchased and how it affected them was intrinsic to the crime charged.

Additionally, the testimony was grounded in personal experiences and was not

offered as scientific evidence. Finally, we agree with the district court that the two

statements by agents that XLR11 was an analogue were harmless. Although the

analogue counts had been dismissed, we agree that the jury was not likely to have

understood the meaning of the term. Also, defense counsel declined a curative



testimony, however, as had other witnesses, that XLR11 was not a controlled substance and that
if someone possessed XLR11 during the month prior to May 16, 2013, they had one month to
dispose of it.
                                             36
             Case: 15-11780      Date Filed: 10/12/2016    Page: 37 of 41


instruction. On this record, we find no reasonable probability that “but for the

offending remarks, the defendant would not have been convicted.” United States

v. Snyder, 

, 1294 (11th Cir. 2002) (quoting United States v.

Calderon, 

, 1335 (11th Cir. 1997)). Because Gross’s substantial

rights were not affected, see 

, we find no error or abuse of

discretion in the district court’s evidentiary rulings, much less reversible error.

                                          IV.

      Finally, Gross challenges his sentence on several grounds. We review a

district court’s sentencing decision for procedural and substantive reasonableness

applying an abuse of discretion standard. See Gall v. United States, 

,

51, 

, 597 (2007); United States v. Barrington, 

, 1194

(11th Cir. 2011), cert. denied, 

(2012). An abuse of discretion

occurs if the district court “applies an incorrect legal standard, follows improper

procedures in making the determination, or makes findings of fact that are clearly

erroneous.” 

(quoting United States v. Ellisor, 

, 1273 n.25 (11th Cir. 2008)). We therefore review the district court’s

fact findings for clear error, and we apply de novo review to its interpretation and

application of the United States Sentencing Guidelines. See 

1197.

      We first consider whether the district court committed procedural error. A

“significant procedural error” occurs at sentencing when the district court fails to

                                           37
             Case: 15-11780      Date Filed: 10/12/2016    Page: 38 of 41


properly calculate the guidelines range, treats the guidelines as mandatory, fails to

consider the sentencing factors of 18 U.S.C. § 3553(a), or selects a sentence based

on clearly erroneous facts. 

, 128 S. Ct. at 597; see also

. If the sentence is procedurally sound, we then

consider its substantive reasonableness, taking into account the totality of the

circumstances, being mindful that “[t]he sentencing judge is in a superior position

to find facts and judge their import under § 3553(a) in the individual case.” 

, 128 S. Ct. at 597 (internal quotations omitted). Also, an error in

calculating a guidelines sentencing range may be harmless if the district court

stated on the record that it would have imposed the same sentence regardless of

any error in the calculation, and if we determine that the sentence is reasonable

even if the guidelines issue had been determined in the defendant’s favor. See

United States v. Keene, 

, 1349 (11th Cir. 2006).

      Gross argues that the district court miscalculated his sentencing range by

selecting a base offense level according to the value of the laundered funds under

USSG § 2S.1.1(a)(2) instead of under the guideline applicable to the underlying

offense from which the proceeds were derived, i.e., smuggling, pursuant to USSG

§ 2S1.1(a)(1). We find no procedural error. Guideline § 2S1.1(a)(1) directs the

district court to apply the offense level for the underlying offense if it can be

determined. The underlying offense in this case is smuggling, §§ 545, 542.

                                           38
             Case: 15-11780     Date Filed: 10/12/2016   Page: 39 of 41


Guideline § 2T3.1, which is applicable to Custom Taxes and deals with some

violations of § 545. The Introductory Commentary to USSG § 2T3.1 states that

the guideline applies even when some types of contraband are involved, such as

uncertified diamonds, but provides further that it “is not intended to deal with the

importation of other types of contraband, such as drugs . . . the importation of

which is prohibited or restricted for non-economic reasons.” USSG Ch. 2, Pt.T.3,

intro. comment. This case involves drugs that were illegal in some states at the

time of the smuggling activity and thus could be categorized as contraband,

making USSG § 2T3.1 inapplicable. As a result, the district court was required to

use the next analogous guideline, but Part 2D was inapplicable because the drugs

were not listed as controlled substances at the time of the offense, and there was no

proof that they were analogue drugs at the time. Thus, the district court correctly

applied the money laundering guideline, USSG § 2S1.1(a)(2).

      Gross argues alternatively that the district court erred in determining the

monetary value of the laundered funds, but we find no clear error in the district

court’s determination of value. The government presented evidence that the total

amount laundered through ZenBio’s bank account by checks and transfers

amounted to $23,566,000. Gross’s lack of signature authority on the Bank of

America account is immaterial because, as already discussed, Gross demonstrated

he had the authority to direct payments from the account, his Sanctuary Traders

                                          39
             Case: 15-11780     Date Filed: 10/12/2016    Page: 40 of 41


account received substantial proceeds, and the number and size of the transactions

were reasonably foreseeable to Gross because making a quick profit was the

purpose of the scheme. Gross also argues that because the government stipulated

to a money judgment of $300,000 to settle the forfeiture count, the value of the

money laundering conspiracy at sentencing was limited to that amount. We

disagree. It is clear from the record that the government had already seized over

$600,000 from Gross through Sanctuary Traders and agreed to settle the forfeiture

issue for an additional $300,000 to avoid having to try the forfeiture count to the

jury. This did not resolve Gross’s criminal liability for purposes of calculating his

sentencing guidelines range.

      Gross also challenges the three-level enhancement under USSG § 3B1.1(b)

for his role in the offense as a “manager or supervisor,” arguing that he was not a

leader with respect to any money laundering activity. See United States v.

Salgado, 

, 1140 (11th Cir. 2014) (stating “relevant conduct for

Chapter Three adjustments is limited to [the defendant’s] part in the money

laundering offense”). Because the determination of a defendant’s role in an offense

is a finding of fact, we review the decision for clear error. United States v.

Rodriguez De Varon, 

, 937 (11th Cir. 1999) (en banc). We note that

in making this fact-intensive determination, the district court has “considerable

discretion.” United States v. Boyd, 

, 1277–78 (11th Cir. 2002). The

                                          40
             Case: 15-11780     Date Filed: 10/12/2016    Page: 41 of 41


district court’s finding that Gross was a supervisor on this record where he had

either an ownership or manager interest, accepted large profits, and directed Henry

to make wire payments with proceeds is not clear error.

      Moreover, the sentence, which is at the low end of the guidelines range, is

not substantively unreasonable. “Although we do not automatically presume a

sentence within the guidelines range is reasonable, we ordinarily expect a sentence

within the [g]uidelines range to be reasonable.” United States v. Hunt, 

, 746 (11th Cir. 2008) (alteration and internal quotation marks omitted). In this

case, the district court properly considered the record and the 18 U.S.C. § 3553(a)

factors. Although in imposing sentence the district court relied in part on the

dangerous nature of XLR11, despite the fact that there was no proof that it was an

analogue drug at the time, the district court’s concerns were supported by the

record. Also, “[t]he weight to be accorded any given § 3553(a) factor is a matter

committed to the sound discretion of the district court.” See United States v. Clay,

, 743 (11th Cir. 2007) (internal quotation marks omitted). We find no

abuse of discretion.

                                         V.

      For the reasons stated above, Gross’s convictions and sentence are

AFFIRMED.




                                         41