United States v. Riccio

• Citation: 43 F.Supp.3d 301
• Decision Date: 21 August 2014
• Docket Number: No. 12 CR 868(NRB).,12 CR 868(NRB).
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Parties: UNITED STATES of America, v. Peter J. RICCIO, Lena Lasher a/k/a Lena Contang, John Nicholas Burling, Robert P. Imbernino, Edmond S. Kaplan, Timothy Kear, Christopher Riley, Adam Risolia, Gergana Chervenkova, and Paul Gryszkiewicz, Defendants.

43 F.Supp.3d 301

UNITED STATES of America,
v.
Peter J. RICCIO, Lena Lasher a/k/a Lena Contang, John Nicholas Burling, Robert P. Imbernino, Edmond S. Kaplan, Timothy Kear, Christopher Riley, Adam Risolia, Gergana Chervenkova, and Paul Gryszkiewicz, Defendants.

No. 12 CR 868(NRB).

United States District Court, S.D. New York.

Signed Aug. 20, 2014
Filed Aug. 21, 2014

Motion denied.

[43 F.Supp.3d 303]

Timothy Donald Sini, United States Attorney Office, New York, NY, for United States of America.

MEMORANDUM AND ORDER
NAOMI REICE BUCHWALD, District Judge.
BACKGROUND

On November 20, 2012, ten defendants were charged in a seven-count indictment (the “Indictment”) for crimes in connection with their alleged participation in an internet pharmacy scheme. According to the Indictment, the allegations of which we accept as true for purposes of the present motion, United States v. Goldberg, 756 F.2d 949, 950 (2d Cir.1985), the defendants acted in concert to dispense prescription drugs over the Internet to customers who had never seen or spoken to a physician or medical practitioner. Indictment ¶ 5.

Specifically, the internet pharmacy scheme enabled customers to visit one of several prescription websites operated by certain co-defendants and select the prescription drugs they wished to visit one of several prescription websites operated by certain co-defendants and select the prescription drugs they wished to order. Id. Customers would then be prompted to complete an online questionnaire regarding medical history, often with answers prepopulated such that the customers would not be disqualified from receiving the prescription drugs they had selected. Id. The website operators electronically sent completed questionnaires to doctors, who issued prescriptions for the drugs requested by the customers without first conducting an in-person medical examination or telephonic consultation with the customers, or otherwise verifying any of the information provided by the customers. Id. The website operators then electronically sent those prescriptions to pharmacists, who filled the prescriptions and mailed the orders to the customers. Id.

The Indictment charges the following crimes arising from this scheme: (1) narcotics conspiracy in violation of 21 U.S.C. § 846, (2) distribution of narcotics in violation of 21 U.S.C. § 841, (3) conspiracy to misbrand in violation of 18 U.S.C. § 371, (4) substantive misbranding in violation of 21 U.S.C. § 331(a), 333(a)(2), and 353(b), (5) conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 1349, (6) conspiracy to commit international money laundering in violation of 18 U.S.C. § 1956(h), and (7) conspiracy to commit domestic money laundering in violation of 18 U.S.C. § 1956(h).¹

To date, eight of the ten defendants have entered pleas of guilty, and one defendant, Gergana Chervenkova, is living abroad beyond the scope of U.S. jurisdiction. The remaining defendant, Lena Lasher (“defendant”), has entered a plea of not guilty. The Indictment charges that defendant Lasher, while employed as a pharmacist in an establishment owned and operated by codefendant Peter Riccio, participated in the internet pharmacy scheme, and thereby committed each of the seven counts charged.

Defendant Lasher now brings the pending motion to dismiss the Indictment on the grounds that each of the counts charged therein fails to state an offense. She also moves to strike surplusage from the Indictment. For the reasons set forth below, we deny defendant's motion to dismiss the Indictment and reserve on her motion to strike surplusage from the Indictment.

[43 F.Supp.3d 304]

DISCUSSION

I. Legal Standard

The issue of whether the Indictment is legally sufficient is addressed in a well-established context. An indictment “need do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime.” United States v. Stringer, 730 F.3d 120, 124 (2d Cir.2013) (internal citation and quotation marks omitted). “[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and second, enables him to plead an acquittal or conviction in bar of future prosecutions.” Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974) (citations omitted). Indeed, Federal Rule of Criminal Procedure 7(c) merely requires that an Indictment contain “a plain, concise, and definite written statement of the essential facts constituting the offense charged.”

II. Counts One and Two: Narcotics Offenses Adequately Alleged

Counts One and Two of the Indictment charge Lasher with conspiracy to deliver, distribute and dispense controlled substances, and substantive delivery, distribution and dispensation of controlled substances, respectively, in violation of the Controlled Substances Act. Indictment ¶¶ 8–10, 13–14. Specifically, the Indictment alleges that Lasher dispensed Fioricet, a combination drug containing the schedule III controlled substance Butalbital, in violation of 21 U.S.C. § 841(b)(1)(E) and 21 U.S.C. § 841(h). Indictment ¶¶ 4–6, 14.

The applicable statute unambiguously defines as a controlled substance “[a]ny substance which contains any quantity of a derivative of barbituric acid, or any salt of a derivative of barbituric acid.” 21 U.S.C. § 812, Schedule III, Part (b)(1). Because Fioricet contains Butalbital, a derivative of barbituric acid, there is no dispute that Fioricet falls within the category of drugs controlled by 21 U.S.C. § 812. See Def. Mem. at 4–5; Def. Reply Mem. at 2. As a Schedule III controlled substance, Fioricet is then subject to the statute charged in Counts One and Two, 21 U.S.C. § 841(h), which criminalizes the dispensation of controlled substances by means of the internet. Specifically, section 841(h) provides as an example of such criminal activity the “offering to fill a prescription for a controlled substance based solely on a consumer's completion of an online medical questionnaire....” This is the very conduct alleged against Lasher in the Indictment.

Thus far, the parties are in agreement. See Def. Mem. at 4–5; Gov't Opp. at 5–9, Def. Reply Mem. at 2; Tr. at 10–13. The dispute arises because of a regulation promulgated by the Drug Enforcement Agency, a delegatee of the Attorney General's statutory authorization to “exempt any compound, mixture, or preparation containing a controlled substance from the application of all or any part” of Subchapter I of the Controlled Substances Act. 21 U.S.C. § 811(g). The regulation classifies Fioricet as an “exempted prescription product” which has “been exempted by the Administrator from the application of sections 302 through 305, 307 through 309, and 1002 through 1004 of the Act (21 U.S.C. 822–825, 827–829, and 952–954) and §§ 1301.13, 1301.22, and §§ 1301.71 through 1301.76 of this chapter for administrative purposes only.” 21 C.F.R. § 1308.32.

Defendant contends that the regulatory exemption renders Fioricet a non-controlled substance for the purposes of the criminal statutes charged in the Indictment.

[43 F.Supp.3d 305]

Def. Mem. at 9–12. Based on its plain language, as well as the relevant statutory and judicial precedent, we conclude that the regulation does not exempt Fioricet from the application of 21 U.S.C. § 841(b)(1)(E) and 21 U.S.C. § 841(h).

By its own terms, 21 C.F.R. § 1308.32 (the “Regulation”) provides an exemption strictly limited to the registration, labeling, packaging, record-keeping and security requirements delineated in a defined list of U.S.Code provisions. By implication, any statutory provision not expressly listed as an exemption applies with full force against Fioricet. None of those exempted provisions mentioned in the Regulation were charged in the case at bar. More to the point, the statutory provision under which Lasher was charged—§ 841—is not among those from which the Regulation exempts Fioricet. Nor, as defendant concedes, does the Regulation exempt Fioricet from the application of the Controlled Substances Act's other criminal statutes. Def. Mem. at 9; see also Gov't Opp. at 15–16. On the contrary, the Regulation expressly limits its exemptions “for administrative purposes only.”

Our holding is consistent with the only judicial precedent on point. In 2010, Judge Heaton of the Western District of Oklahoma issued a decision denying a motion to dismiss an indictment identical in large part to this one. United States v. Williams, No. 10 Cr. 216(HE), 2010 WL 4669180 (W.D.Okla. Nov. 9, 2010). In Williams, the defendant pharmacy owner was charged with the criminal distribution by means of the internet of the same drug, Fioricet, in a scheme like the one charged here, in violation of the same statute charged here, 21 U.S.C. § 841. The defendant in Williams also moved to dismiss the indictment on the same grounds as those advanced by Lasher—i.e., that the...