United States v. Lyons
| Decision Date | 11 September 2012 |
| Docket Number | No. 10–2402.,10–2402. |
| Parties | UNITED STATES of America, Plaintiff–Appellant, v. Katrina LYONS, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
OPINION TEXT STARTS HERE
ARGUED:Margaret Marie Smith, United States Attorney's Office, Detroit, Michigan, for Appellant. Harold Gurewitz, Gurewitz & Raben, PLC, Detroit, Michigan, for Appellee. ON BRIEF:Margaret Marie Smith, United States Attorney's Office, Detroit, Michigan, for Appellant. Harold Gurewitz, Gurewitz & Raben, PLC, Detroit, Michigan, for Appellee.
Before: CLAY, ROGERS, and DONALD, Circuit Judges.
Defendant Katrina Lyons was charged with one count of conspiracy to distribute and possess with intent to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1); one count of possession with intent to distribute controlled substances, in violation of 21 U.S.C. § 841(a)(1); and criminal forfeiture allegations,pursuant to 18 U.S.C. § 981(a)(1)(C), 28 U.S.C. § 2461(c), and 21 U.S.C. § 853, after two Michigan state police troopers discovered narcotics in her vehicle during a traffic stop requested by federal Drug Enforcement Administration (DEA) agents. The government now appeals an order by the district court that granted Defendant's motion to suppress the evidence seized during the stop. For the reasons that follow, we REVERSE and REMAND for further proceedings consistent with this opinion.
This case stems from a DEA investigation into a large-scale prescription drug ring and Medicare fraud scheme based out of Detroit, Michigan. The investigation's prime target, George Williams, was the owner and operator of a healthcare practice called Quick Response Medical Professionals, P.C. (QRMP). QRMP recruited Medicare-eligible patients who submitted to allegedly sham physical examinations with the practice's affiliated doctor, Milagros Ebreo, M.D. Dr. Ebreo allegedly prescribed QRMP's patients a variety of controlled substances, including oxycodone, vicodin, xanax, and prescription cough syrup. QRMP then retained possession of the prescriptions, filled them at cooperating pharmacies, and distributed the drugs through various intermediaries for street sale. In exchange, QRMP paid its patients small amounts of cash (usually between $150–$250) and billed Medicare for the fraudulent medical charges.
In pursuit of its scheme, QRMP employed several individuals who recruited and transported patients, scheduled doctor's visits, filed the fraudulent Medicare billings, and provided security and accounting services. The DEA's investigation, which began in June 2007, eventually expanded to include wiretaps of Williams' and several employees' phones as well as surveillance of suspected sites of QRMP operations.
George Williams managed QRMP out of several locations, including a business office, an office in his personal residence, and a hotel room in Southfield, Michigan. One location of particular significance to the scheme was a residence located at 20226 Stratford Road, in the Green Acres neighborhood of Detroit. The DEA learned that QRMP had converted the Stratford Road house into Dr. Ebreo's medical office, where she saw patients for physical examinations and wrote out patient prescriptions. A QRMP employee, Yolando Young, acted as the site's “office manager,” scheduling appointments and managing paperwork. DEA agents also witnessed various other QRMP employees transporting patients to and from the Stratford Road house for their appointments with Dr. Ebreo and her assistant. Williams, however, had not been seen at the Stratford Road house. Additionally, the agents neither observed nor received word of any packages traveling into or out of the residence. Based on these observations, the DEA theorized that the Stratford Road house was used primarily for QRMP's medical and financial operations, but not as a storage site for the controlled substances.
By the date of Defendant's arrest in this case, the DEA's investigation was well underway. In the fifteen months since the DEA began investigating QRMP, the agency successfully linked the medical practice to at least three multi-state traffic stops that yielded narcotics. Although the traffic stops were made in different states (Michigan, Ohio, and Kentucky), all the cars were plated to Kentucky. Based on the traffic stops, in addition to other evidence gathered in its investigation, the DEA concluded that QRMP was trafficking large amounts of controlled substances to the southern region of the United States, where the market for such drugs was especially lucrative.
On September 25, 2008, DEA Special Agent Kevin Graber led a team assigned to surveil the Stratford Road house. Around 2:50 p.m., the agents took up a position just south of the residence where they observed Williams' Mercedes in the driveway. Shortly after the agents arrived, the Mercedes left the house. Several minutes later, Young, the office manager, also left. Several agents tailed Young to where she stopped at a local bank branch.
Around 3:07 p.m., the DEA agents monitoring the wiretaps intercepted a telephone call in which Young asked Williams if he was waiting for someone to arrive at the Stratford Road house. The agents listening to the wiretap relayed to the surveillance team that they could expect a female driving a gray vehicle with out-of-state plates to arrive at the house. Several minutes thereafter, a gray minivan with Alabama plates pulled into the driveway.
A woman, later identified as Defendant, exited the minivan and approached the front porch of the house. A few minutes later, Williams pulled up to the Stratford Road house in the Mercedes. Defendant returned to her vehicle, and the two cars advanced up the driveway where they no longer could be viewed from the road. While the cars were parked behind the house, Agent Graber decided to have the minivan stopped after it left the residence.
Agent Graber contacted the Michigan State Police Department to organize a traffic stop by a marked cruiser. After speaking with a lieutenant through the general office line, Agent Graber was connected to on-duty Michigan State Police Troopers Marcus Wise and James Grubbs.1 Agent Graber provided the troopers with a description of the minivan, its plate number, and its driver. According to Agent Graber's suppression hearing testimony, he also gave the troopers “limited, but substantial” details regarding the DEA's investigation into QRMP and the basic facts leading the DEA to believe narcotics would be found in the minivan. However, Agent Graber asked the troopers to develop independent probable cause for the stop, because the DEA did not want its lead targets tipped off that QRMP was under federal investigation.
About an hour later, both cars departed the Stratford Road house. Using Agent Graber's description, the troopers quickly spotted the minivan. The troopers observed an air freshener and some bead necklaces hanging from the minivan's rearview mirror. Believing these objects to constitute a vision obstruction, a civil infraction under Michigan law, the troopers initiated a traffic stop. The troopers asked the driver, Defendant Katrina Lyons, for her identification, registration, and insurance information. Defendant produced an Alabama identification card and an unsigned car rental agreement, but she was unable to provide proof of insurance or a valid drivers license. The car rental agreement indicated that the minivan was rented the day before, for travel planned between Alabama and North Carolina. Trooper Wise noticed that Defendant'shands were shaking and that her breathing was deep and labored. He also smelled a distinctive odor of mothballs emanating from the vehicle, which he knew to be a method frequently used to mask the smell of narcotics.
Trooper Wise asked Defendant if she would exit the vehicle and give her consent to a search. At the suppression hearing, Trooper Wise testified that Defendant freely consented to both. Defendant, however, contested Trooper Wise's account. According to Defendant, she was first ordered to exit her vehicle and placed in handcuffs before Trooper Wise asked for her consent.
In either event, as Defendant exited her vehicle she reached for her purse. Trooper Wise testified that, out of a concern for his and his partner's safety, he also asked to look in the purse, and Defendant agreed. Trooper Wise discovered several large bundles of currency and a suspended Michigan drivers license. When asked about the source of the funds, Defendant stated that she did not know the amount of cash she was carrying, and she provided differing explanations as to how she obtained the money. When Trooper Wise advised Defendant that her stories were inconsistent, she became teary-eyed.
Meanwhile, Trooper Grubbs searched the minivan. Between the car and the purse, the troopers discovered over $11,000 in cash, 39 bottles of codeine cough syrup, and a box of mothballs. Defendant was formally arrested and transported to a Michigan state police station for processing. The troopers prepared an incident report that indicated Defendant was pulled over for a vision obstruction and that she was arrested based on the questionable status of her drivers license and the illegal narcotics recovered from her vehicle. The incident report did not mention the DEA's investigation or Agent Graber's instructions.
On May 20, 2009, a federal grand jury returned an eighteen-count indictment against Defendant and ten other individuals involved in QRMP's operations. The indictment accused the defendants of conspiring to operate a fraudulent healthcare practice and with the illegal possession and distribution of controlled prescription drugs.2 Defendant was...
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