U.S. v. Nelson

• Decision Date: 20 September 2004
• Docket Number: No. 02-6183.,02-6183.
• Citation: 383 F.3d 1227
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ricky Joe NELSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

383 F.3d 1227

UNITED STATES of America, Plaintiff-Appellee, v. Ricky Joe NELSON, Defendant-Appellant.

No. 02-6183.

United States Court of Appeals, Tenth Circuit.

September 20, 2004.

Randal A. Sengel, Assistant United States Attorney, (Robert G. McCampbell, United States Attorney, with him on the briefs) Oklahoma City, OK, Attorneys for Plaintiff-Appellee.

Thomas D. McCormick, Oklahoma City, OK, Attorney for Defendant-Appellant.

Before KELLY, HOLLOWAY and McCONNELL, Circuit Judges.

HOLLOWAY, Circuit Judge.

This is an appeal from a criminal conviction for conspiracy to distribute controlled prescription drugs outside the usual course of professional practice (sale of prescription drugs over the internet) and conspiracy to engage in a monetary transaction with criminally derived property (money laundering). Defendant/appellant Ricky Joe Nelson (Nelson) is a physician who, with co-conspirators Fuchs and Shadid, operated an internet pharmacy that sold hydrocodone (a barbiturate and a Schedule III controlled substance) over the internet. Nelson appeals his conviction, arguing that there was insufficient evidence to support conviction on either count as there was no evidence of a conspiracy. Nelson also argues that the trial judge committed reversible error in improperly instructing the jury as to the illegal distribution charge.

For the reasons detailed below, we conclude that the government has presented sufficient evidence to support Nelson's conspiracy conviction. We also conclude that there was no error in the jury instructions given at trial. Accordingly, we AFFIRM Nelson's conviction.

I Background

Clayton Fuchs (Fuchs), an unindicted co-conspirator, operated an internet pharmacy called "NationPharmacy.com." where customers could obtain prescription and non-prescription drugs. In accord with federal law, all requests for prescription drugs were first reviewed by a physician, defendant Nelson, who either approved or denied the request. Nelson, however, approved 90-95% of all prescription drug requests and did so without ever examining his purported patient. Moreover, the vast majority of filled prescriptions were for hydrocodone, a powerful and addictive pain-killer and a Schedule III controlled substance.

Customers who used Fuchs's internet pharmacy would have their orders routed through a brick and mortar pharmacy called Main Street Pharmacy. Nelson would physically visit Main Street Pharmacy to sign the prescription requests, and the customer would receive his or her prescription by mail and pay Fuchs directly. Nelson, the prescribing physician, was never paid by any customer. Instead, Nelson received a total of $175,000, which was wired directly from Fuchs into an offshore account.

Nelson was charged and convicted of both conspiracy to distribute controlled prescription drugs outside the usual course of professional practice, in violation of 21 U.S.C. § 846, and conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). Nelson now appeals, arguing that there was insufficient evidence at trial to show a conspiracy existed. Nelson also argues that the district court erred in instructing the jury that it could convict for violation of 21 U.S.C. § 846 (conspiracy to illegally distribute controlled prescription drugs) if it found the prescriptions were either without a legitimate purpose or outside the course of professional practice when it instead should have instructed the jury that conviction was appropriate only if it found that the prescriptions were both for no legitimate purpose and outside the course of professional practice.

II Discussion

A

Sufficiency of the evidence

We review the record for sufficiency of the evidence de novo. Evidence is sufficient to support a conviction if a reasonable jury could find the defendant guilty beyond a reasonable doubt, given the direct and circumstantial evidence, along with reasonable inferences therefrom, taken in a light most favorable to the government. Rather than examining the evidence in "bits and pieces," we evaluate the sufficiency of the evidence by "considering the collective inferences to be drawn from the evidence as a whole."

United States v. Wilson, 107 F.3d 774, 778 (10th Cir.1997) (citations omitted) (quotation marks in original). "A conspiracy conviction requires the Government to prove, [1] that two or more persons agreed to violate the law, [2] that the defendant knew at least the essential objectives of the conspiracy, [3] that the defendant knowingly and voluntarily became a part of it, and [4] that the alleged coconspirators were interdependent." United States v. Torres, 53 F.3d 1129, 1134 (10th Cir.1995).

Nelson argues the government failed to present sufficient evidence establishing an agreement between Nelson and any other person to either distribute controlled prescription drugs outside the usual course of professional practice or to launder money. In support, Nelson relies upon the fact that there was no witness who testified at trial as to the existence of any agreement. We are not persuaded.

"[A]n agreement constituting a conspiracy may be inferred from the acts of the parties and other circumstantial evidence indicating concert of action for the accomplishment of a common purpose." United States v. Johnson, 42 F.3d 1312, 1319 (10th Cir.1994). Thus, "the absence of any direct evidence of a conspiracy is immaterial so long as there is sufficient circumstantial evidence of a conspiracy to support a finding of guilt beyond a reasonable doubt." Torres, 53 F.3d at 1135.

At trial, the government presented more than sufficient circumstantial evidence of an agreement between Nelson and Fuchs to render the lack of direct evidence immaterial. This evidence consisted of the testimony of fifteen different witnesses and established the existence of an operation, which Nelson willingly participated in, to distribute controlled prescription drugs over the internet and to hide the proceeds of those sales. The most significant evidence was the testimony of Alexander Weeks (Weeks), the person who set up the website, Jerry Shadid (Shadid), the resident pharmacist at Main Street Pharmacy, Myron Thompson (Thompson), another pharmacist at Main Street Pharmacy, and Misty Dupes (Dupes), the office manager for Fuchs.

Weeks's testimony described the general workings of the Fuchs website called "NationPharmacy.com." He testified he established this website at Fuchs's behest as a means of providing prescription and non-prescription drugs over the internet. I Trial Transcript at 20-21. Weeks also testified that only those orders for prescription drugs that were specifically approved by Nelson were processed. Id. at 33. And he testified that he provided Nelson the means to review and approve prescription drug requests by means of a unique user name and password that enabled Nelson to access the medical history questionnaires required to be filled out by all customers who requested prescription drugs. Id. at 30.

Shadid and Thompson testified at trial as to Nelson's personal participation in this scheme. Both men were pharmacists at Main Street Pharmacy, which processed all orders taken through the "NationPharmacy.com." Id. at 55, 100. And both testified that on numerous occasions, Nelson would personally come to Main Street Pharmacy to sign prescriptions authorizing the dispensing of hydrocodone. Id. at 62-63, 105. Both also testified that Nelson signed "thousands" of prescriptions for "NationPharmacy.com." Id. at 66, 105. Finally, Dupes testified that she transferred money, a total of $175,000, from an account controlled by Fuchs to an offshore account controlled by Nelson. II Trial Transcript at 345.

This evidence describes a scheme that depended upon the participation of Nelson. Without his approval, requests for controlled prescription drugs taken on the website would not even be processed. Without his signature, those requests that were processed would not have been filled. And, in return for his efforts, Nelson was paid a total of $175,000 that was wired to an offshore account. Given the "concert of action" between Nelson and Fuchs in the "common purpose" of operating NationPharmacy.com, a reasonable jury could infer the existence of "an agreement constituting a conspiracy." Johnson, 42 F.3d at 1319. Therefore, the government did present sufficient circumstantial evidence of conspiracy to render the lack of direct evidence immaterial.

Accordingly, we hold that a rational jury could find beyond a reasonable doubt that Nelson participated in a conspiracy to distribute controlled prescription drugs outside the usual course of professional practice and to launder the proceeds of that distribution.

B

The jury instruction

We review the district court's refusal to give a particular jury instruction for abuse of discretion. In assessing whether the court properly exercised that discretion, a reviewing court must examine the instructions as a whole to determine if they sufficiently cover the issues in the case and focus on the facts presented by the evidence. The question of whether the jury was properly instructed is a question of law, and thus, our review is de novo.

We consider all the jury heard and, from [the] standpoint of the jury, decide not whether the charge was faultless in every particular but whether the jury was misled in any way and whether it had understanding of the issues and its duty to determine these issues. We will reverse a conviction due to an erroneous instruction only if the error was prejudicial when viewed in light of the entire record.

United States v. Voss, 82 F.3d 1521, 1529 (10th Cir.1996) (quotation marks and citations omitted) (alterations in original).

At trial, the district court instructed the jury that it could convict Nelson for conspiracy to distribute controlled prescription drugs outside the usual course of professional practice if it found Nelson had agreed with another to distribute...