United States v. Ihenacho

• Decision Date: 17 June 2013
• Docket Number: Nos. 12–1278,12–1661.,s. 12–1278
• Citation: 716 F.3d 266
• Parties: UNITED STATES, Appellee, v. Baldwin IHENACHO, Defendant, Appellant. United States, Appellee, v. Gladys Ihenacho, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

716 F.3d 266

UNITED STATES, Appellee,

v.Baldwin IHENACHO, Defendant, Appellant.

United States, Appellee,

v.Gladys Ihenacho, Defendant, Appellant.

Nos. 12–1278, 12–1661.

United States Court of Appeals, First Circuit.

June 17, 2013.

Michelle L. Dineen Jerrett, Assistant United States Attorney, with whom Carmen M. Ortiz, United States Attorney, and Shelbey D. Wright, Assistant United States Attorney, were on brief, for appellee in No. 12–1278.

David M. Lieberman, Attorney, U.S. Department of Justice, with whom Carmen M. Ortiz, United States Attorney, Shelbey D. Wright, Assistant United States Attorney, Michelle L. Dineen Jerrett, Assistant United States Attorney, Mythili Raman, Acting Assistant Attorney General, U.S. Department of Justice, and Denis J. McInerney, Acting Deputy Assistant Attorney General, U.S. Department of Justice, were on brief, for appellee in No. 12–1661.

Brian M. LaMacchia, with whom David J. Apfel and Goodwin Procter LLP were on brief, for appellant Baldwin Ihenacho.

Daniel J. Cloherty, with whom Victoria L. Steinberg and Collora LLP were on brief, for appellant Gladys Ihenacho.

Before LYNCH, Chief Judge, SELYA and HOWARD, Circuit Judges.

LYNCH, Chief Judge.

Baldwin and Gladys Ihenacho are husband and wife, and were the owners and operators of a neighborhood pharmacy in Dorchester, Massachusetts. Baldwin and Gladys were convicted of dispensing and shipping drugs to customers pursuant to invalid online prescriptions for Internet pharmacy operations over a period from 2006 to 2008. Those operations were headquartered in the Dominican Republic.

Baldwin pled guilty to nearly all of the charges against him (the remaining charge was dismissed) and was sentenced to 63 months in prison. On appeal, he challenges the application of the fraud sentencing guideline to him. The most serious challenge, which we ultimately reject, is to the district court's calculation of the loss caused by his offenses. That calculation goes to the applicable guideline sentencing range and increased the length of his sentence.

Gladys went to trial and a jury convicted her of eight counts, including for distributing controlled substances, international money laundering, and conspiracy. She was then sentenced to thirty days' imprisonment. On appeal, she challenges the sufficiency of the evidence supporting her convictions, particularly disputing whether the government proved that she knew her pharmacy was dispensing drugs pursuant to invalid prescriptions. The evidence was ample.

We affirm Baldwin's sentence and Gladys's convictions.

I.

In considering a sentencing appeal that follows after a guilty plea, we take the relevant facts from the plea agreement, the change-of-plea colloquy, the presentence investigation report (PSR), and the transcript of the sentencing hearing. United States v. Fernández–Cabrera, 625 F.3d 48, 50 (1st Cir.2010). In contrast, in evaluating a claim that the evidence was insufficient to support a conviction after trial, we consider “the facts in the light most favorable to the verdict.” United States v. Poulin, 631 F.3d 17, 18 (1st Cir.2011). We describe the facts relevant to Baldwin's guilty plea and sentence. We recount the relevant facts from Gladys's trial in the light most favorable to the jury's verdict.

A. Facts Relevant to Baldwin's Guilty Plea and Sentence

Baldwin was born in Nigeria in 1953 and immigrated to the United States, became a U.S. citizen, and obtained his pharmacist's license in Massachusetts. He owned and operated Meetinghouse Community Pharmacy (“Meetinghouse”), a building containing a pharmacy in Dorchester, from 1994 to 2008.

1. Baldwin's Agreements with Global Access Group and Golden Island Investment

Between September 2006 and November 2008, Meetinghouse filled thousands of online drug orders for several Internet pharmacy operations, including two located in the Dominican Republic: Global Access Group (“Global Access”) and Golden Island Investment (“Golden Island”). Baldwin conspired with Jack Palasy and Tony Reyes as to Global Access, and Reyes and others as to Golden Island, to distribute controlled and non-controlled substances to persons who ordered them online by filling out questionnaires via these Internet pharmacies. The pharmacies provided drugs without valid prescriptions.

Under federal Drug Enforcement Administration regulations, prescriptions for controlled substances are not effective unless “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 C.F.R. § 1306.04(a). A pharmacist has a corresponding responsibility for the proper dispensing of controlled substances. Issuing prescriptions based solely on online questionnaires falls outside the usual course of medical practice, making such prescriptions invalid. See United States v. Lovern, 590 F.3d 1095, 1101 (10th Cir.2009) (collecting cases).

As to penalties, a “person knowingly filling such a purported prescription ... shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.” 21 C.F.R. § 1306.04(a). These provisions of law make it “unlawful for any person knowingly or intentionally ... to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.” 21 U.S.C. § 841(a)(1). For offenses, such as Baldwin's, involving “any controlled substance in schedule III, such person shall be sentenced to a term of imprisonment of not more than 10 years.” Id. § 841(b)(1)(E)(i).

Baldwin dispensed both controlled substances and non-controlled substances based on Internet orders. With respect to a drug, whether controlled or non-controlled, which is “not safe for use except under the supervision of a practitioner licensed by law to administer such drug,” the act of dispensing a drug without a valid prescription “shall be deemed to be an act which results in the drug being misbranded while held for sale” under 21 U.S.C. § 353(b)(1). Section 331(a) prohibits “[t]he introduction or delivery for introduction into interstate commerce of any ... drug ... that is adulterated or misbranded.” If any person “commits such a violation with the intent to defraud or mislead, such person shall be imprisoned for not more than three years.” Id. § 333(a)(2).

2. The Internet Pharmacies' Operations

To purchase drugs by way of Global Access or Golden Island, customers would go to Internet pharmacy websites operated by Global Access or Golden Island and enter their names, addresses, and credit card information, and answer a limited online questionnaire.¹ Each website's operator would then either (1) forward this information to doctors who would, without seeing the customer, approve the orders for a fee, or (2) use the names and electronic signatures of a doctor or doctors to indicate approval of the orders, even though the approval was without these doctors' authorization.² Customers submitting orders to Global Access and Golden Island were not seen by and had no interaction with the doctors who purportedly approved their orders.

The “approved” orders were then sent to pharmacies, including Meetinghouse, for the prescription drugs to be dispensed. For each customer, Meetinghouse would download from the Global Access and Golden Island websites: (1) a mailing label; (2) a drug information label; and (3) a drug order that would remain with the pharmacy. The drug information labels included the name of the dispensing pharmacy and of the physician who had purportedly prescribed the drug. Once the pharmacy filled the vials for an order, it would affix the drug information labels to the vials and place the vials in an express mail package along with an insert concerning the medication that was provided by Global Access or Golden Island. The pharmacy would then attach the mailing label and send the package to the customer.

Many customers of online pharmacies could not obtain these medications by valid prescriptions and so choose these pharmacies. Many of Meetinghouse's Internet customers had drug addictions that were exacerbated by the easy availability of prescription drugs that could be purchased via the Internet without valid prescriptions from a physician.

At Meetinghouse, Baldwin, three regular employees, and several temporary employees dispensed and distributed prescription drugs for Global Access and Golden Island customers. Baldwin exercised decision-making authority over how drug orders would be filled and how much Meetinghouse would accept from the Internet pharmacies for dispensing drugs. The drugs Meetinghouse shipped to customers were not adulterated or counterfeit and were chemically consistent with the substances that they purported to be. Meetinghouse purchased the drugs wholesale from manufacturers, and received both a dispensing fee from Global Access and Golden Island of between $5.25 and $30 per order, and reimbursement for the cost of the drugs prescribed.

3. The Scale of Meetinghouse's Internet Operations

At the height of Meetinghouse's Internet operations, it filled twenty-five percent of its prescriptions for walk-in customers, while seventy-five percent of its drug orders were for Internet pharmacies. According to Meetinghouse's records, it dispensed over a million pills to Global Access and Golden Island customers—including more than 900,000 pills of Schedule III or Schedule IV controlled substances—and about 3.4 million pills to Internet customers in general.

To pay the Ihenachos for dispensing drugs pursuant to online orders, Global Access wired $1,883,950 to Meetinghouse bank accounts and Golden Island wired $311,221.27 into accounts registered to Meetinghouse or to Gladys. These wire payments originated in the Dominican Republic. Three other Internet pharmacies, for whose activities the Ihenachos were not charged but which constituted relevant conduct, wired $1,039,677.63 to Baldwin, Baldwin's brother in Nigeria (upon...