United States v. Russo

• Decision Date: 29 March 2021
• Docket Number: 20-cr-023(DLI)
• Parties: UNITED STATES OF AMERICA, v. DANIEL E. RUSSO, Defendant.
• Court: U.S. District Court — Eastern District of New York

UNITED STATES OF AMERICA,
v.
DANIEL E. RUSSO, Defendant.

20-cr-023(DLI)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 29, 2021

MEMORANDUM AND ORDER

DORA L. IRIZARRY, United States District Judge:

On January 11, 2021, the Government moved to revoke Defendant Daniel Russo's ("Defendant or Russo") bond and requested a permanent order of detention. See, Govt. Mot., Dkt. Entry No. 34. Russo opposed the motion. See, Def. Opp'n, Dkt. Entry No. 36. The Government replied. See, Govt. Reply, Dkt. Entry No. 38. For the reasons set forth below, the Government's motion is denied.

BACKGROUND

Russo was the sole owner of Russo's Pharmacy located in Far Rockaway, New York. See, Indictment, Dkt. Entry No. 1 at 1. The pharmacy was registered with the Attorney General of the United States, and the Drug Enforcement Agency ("DEA") assigned him a registration number. Id. at 2. An indictment returned by a Grand Jury of this district, filed on January 17, 2020, charges Defendant with Conspiracy to Distribute and Possess with Intent to Distribute Oxycodone, Distribution of and Possession with Intent to Distribute Oxycodone, Distribution of Oxycodone by Pharmacist Without a Legitimate Prescription, and nine counts of Filing False Tax Returns in violation of 21 U.S.C. §§ 846, 841(b)(1)(C), 841(a)(1) and 841(b)(1)(C), 843(a)(1) and 843(d)(1), and 26 U.S.C. §7206(1), respectively.

On January 23, 2020, Defendant was arraigned before the Honorable Cheryl L. Pollak, Chief U.S. Magistrate Judge, who set a bond of $1.5 million secured by the marital home and other

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conditions, including that Russo surrender his DEA registration solely as to Schedule II and II N controlled substances. See, Govt. Mot., Exh. 3 - Bail Hearing Transcript, Dkt. Entry No. 34-3, at 9. Defendant did not have to surrender his DEA registration as to Schedule III, IV, and V controlled substances. Id. Defendant confirmed his understanding of this condition. Id. at 9-10. On January 23, 2020, Russo signed the DEA surrender form and surrendered his DEA registration for Schedule II and II N controlled substances. See, Govt. Mot. Exh. 2, Dkt. Entry No. 34-2.

The Government now asks the Court to revoke Russo's bond and remand him on the ground that he violated the condition that he not reapply for or possess a DEA registration for Schedule II and II N controlled substances. The Government claims that, as of July 2020, Russo's Pharmacy obtained a second DEA registration in the name of DHBP Corp. d/b/a Russo's Pharmacy for Schedule II and II N controlled substances. Govt. Mot. at 3. The Government further contends that, since September 2020, the new registrations have been used to obtain thousands of Schedule II controlled substances for the pharmacy to dispense. Id. The Government asserts that Russo still owns the pharmacy and continues to act as a pharmacist there. Id.

Defendant counters that he has not violated his bond condition because he sold the pharmacy to David Jarcaig's ("Jarcaig") company, DHBP Corp., on May 6, 2020. Def. Opp'n at 2. Jarcaig obtained the new DEA registration for Schedule II and II N controlled substances in July 2020, and it was Jarcaig, not Russo, who acquired those substances in September 2020. Id. at 2-3. Russo asserts that he: (1) does not work at the pharmacy; (2) is not involved in ordering or selling Schedule II substances; and (3) does not have access to them. Id. at 2.

Based on the evidence Russo provided of the sale, the Government now concedes that Russo sold the pharmacy, is no longer employed there, and the new owner obtained the DEA

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registrations for Schedule II and II N controlled substances. Gov. Rep. at 2-3. Nevertheless, the Government maintains that Defendant violated his bond condition because Russo "attempted to circumvent th[e] condition by transferring ownership of...