United States v. Scully

Decision Date16 March 2016
Docket Number14-CR-208 (ADS)
Citation170 F.Supp.3d 439
Parties United States of America, v. William Scully, also known as “Liam Scully,” Defendant.
CourtU.S. District Court — Eastern District of New York

United States Attorney's Office, Eastern District of New York, 610 Federal Plaza, By: Charles P. Kelly, Kenneth M. Abell, Assistant United States Attorneys, Central Islip, NY 11722, Attorneys for the Government.

Katten Muchin Rosenman LLP, 575 Madison Avenue, By: Scott A. Resnik, Esq., Michael M. Rosensaft, Esq., Of Counsel, New York, NY 10022, Attorneys for the Defendant.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge

On November 12, 2015, the Defendant William Scully a/k/a Liam Scully (the Defendant or “Scully”) was convicted, after a jury trial, of 66 felony counts with which he was charged pursuant to a 75-count superseding indictment filed on July 22, 2015. Scully now moves under Federal Rule of Criminal Procedure (Fed. R. Crim. P. or the “Rule(s)) 29 for a judgment of acquittal on all counts, and under Rule 33 for a new trial in the interest of justice. For the reasons that follow, the Rule 29 motion is granted in part and denied in part, and the Rule 33 motion is denied in its entirety.

I. Procedural Background
A. The Original Indictment

On April 9, 2014, the Government filed a 73-count indictment against Scully and co-Defendant Shahrad Rodi Lameh. The charges in the indictment stemmed from their ownership and operation of Pharmalogical, Inc. (“Pharmalogical”) d/b/a Medical Device King and MDK, and Taranis Medical Corp. (“Taranis”), companies that were engaged in the business of selling prescription drugs and other pharmaceutical products. In general, the indictment alleged that Scully and Lameh, through these companies, knowingly and willfully imported foreign versions of prescription drugs and medical devices, which were not approved by the federal Food and Drug Administration (“FDA”) for use in the United States, and, using materially false and fraudulent pretenses, sold them to customers around the country.

In particular, the indictment charged Scully and Lameh with the following felony counts:

(i) Count One: Conspiracy to Commit Wire Fraud in violation of 18 U.S.C. § 1349 ;
(ii) Counts Two through Eighteen: Wire Fraud in violation of 18 U.S.C. § 1343 ;
(iii) Count Nineteen: Conspiracy to Commit Mail Fraud in violation of 18 U.S.C. § 1349 ;
(iv) Counts Twenty through Thirty-Six: Mail Fraud in violation of 18 U.S.C. § 1341 ;
(v) Count Thirty-Seven: Conspiracy to Distribute Misbranded Drugs in violation of 18 U.S.C. § 371 ;
(vi) Counts Thirty-Eight through Fifty-Four: Introduction of Misbranded Drugs into Interstate Commerce in violation of 21 U.S.C. §§ 331(a) and 333(a)(2) ;
(vii) Counts Fifty-Five through Seventy-One: Receipt of Misbranded Drugs in Interstate Commerce and Delivery Thereof for Pay in violation of 21 U.S.C. §§ 331(c) and 333(a)(2) ;
(viii) Count Seventy-Two: Fraudulent Importation and Transportation of Goods in violation of 18 U.S.C. § 545 ; and
(ix) Count Seventy-Three: Trafficking in Counterfeit Drugs in violation of 18 U.S.C. § 2320(a)(4).

On April 30, 2014, Scully and Lameh pled not guilty to all counts and were released on bond.

However, Lameh thereafter entered a plea agreement with the Government, pursuant to which he appeared before United States Magistrate Judge Steven I. Locke on October 16, 2014, and pled guilty to Counts 1 and 37 of the indictment. On October 20, 2014, this Court accepted the guilty plea, and Lameh is currently awaiting sentencing.

B. The Superseding Indictment

On July 22, 2015, the Government filed a superseding indictment against Scully, which added two substantive counts:

(i) Count Seventy-Four: Introduction of Unapproved New Drugs into Interstate Commerce in violation of 21 U.S.C. §§ 331(d) and 333(a)(2) ; and
(ii) Count Seventy-Five: Unlicensed Wholesale Distribution of Prescription Drugs in violation of 21 U.S.C. §§ 331(t) and 333(b)(1)(D).

By agreement of the parties, Scully's arraignment on the superseding indictment was postponed until October 7, 2015, the first day of jury selection. On that date, he appeared before Magistrate Judge Locke and pled not guilty to all counts.

C. The Trial

On October 8, 2015, the trial commenced. Over the course of approximately five weeks, forty witnesses, including the Defendant, testified, and the parties introduced numerous items of documentary and physical evidence. The Court notes that, as a defense to each of the charged counts, the Defendant asserted that he lacked the requisite culpable mind state because at all times he was relying in good faith upon the advice of his counsel.

On November 10, 2015, the Court submitted 71 of the 75 charged counts to the jury.

On November 12, 2015, the jury returned guilty verdicts on 66 felony counts. As to each guilty count, the jury explicitly indicated on the verdict sheet that the Defendant had not established the defense of advice of counsel.

II. Discussion

For purposes of these motions, familiarity with the underlying trial record, which spans more than 3,500 transcribed pages, is presumed. The Court's discussion of the evidence adduced at the trial will be limited to the specific challenges presently raised by the Defendant. In this regard, references to the trial transcript are denoted as “Tr.”

A. The Rule 29 Motion
1. The Applicable Legal Standards

“A defendant bears a heavy burden in seeking to overturn a conviction on grounds that the evidence was insufficient.” United States v. Cruz, 363 F.3d 187, 197 (2d Cir.2004) ; United States v. Si Lu Tian, 339 F.3d 143, 150 (2d Cir.2003) (quoting United States v. McCarthy, 271 F.3d 387, 394 (2d Cir.2001) ). In particular, “a conviction will be affirmed if 'any rational trier of fact could have found the essential elements of the crime[s] beyond a reasonable doubt.' Id.(quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) ) (emphasis in original). Stated otherwise, a Rule 29 judgment of acquittal is only appropriate 'if the evidence that the defendant committed the crime is nonexistent or so meager that no reasonable jury could find guilt beyond a reasonable doubt.' United States v. Temple, 447 F.3d 130, 136 (2d Cir.2006), cert. denied, 549 U.S. 997, 127 S.Ct. 495, 166 L.Ed.2d 373 (2006) (quoting United States v. Guadagna, 183 F.3d 122, 130 (2d Cir.1999) ).

“In assessing the evidence, a court is constrained to bear in mind that Rule 29 'does not provide [it] with an opportunity to substitute its own determination of ... the weight of the evidence and the reasonable inferences to be drawn for that of the jury.' Temple, 447 F.3d at 136 (quoting Guadagna, 183 F.3d at 129 ). Rather, [w]here a jury has rendered a verdict of guilty, the duty of a court passing on a Rule 29 motion is to 'review all of the evidence presented at trial in the light most favorable to the government, crediting every inference that the jury might have drawn in favor of the government.' Id.(quoting United States v. Walker, 191 F.3d 326, 333 (2d Cir.1999) ).

Of particular relevance here, “ '[t]he proper place for a challenge to a witness's credibility is in cross-examination and in subsequent argument to the jury,' United States v. Roman, 870 F.2d 65, 71 (2d Cir.1989) (quotation marks omitted), not in a motion for a judgment of acquittal.”United States v. Truman, 688 F.3d 129, 139 (2d Cir.2012) ; seeUnited States v. Ashburn, 11–cr–303, 2015 WL 5098607, at *16, 2015 U.S. Dist. LEXIS 115629, at *44 (E.D.N.Y. Aug. 31, 2015) (“ 'Matters of competing inferences, the credibility of witnesses, and the weight of the evidence are within the province of the jury,' and the court is 'not entitled to second-guess the jury's assessments'(quoting United States v. Rea, 958 F.2d 1206, 1221–22 (2d Cir.1992) )). “It is the province of the jury and not of the court to determine whether a witness who may have been inaccurate, contradictory and even untruthful in some respects was nonetheless entirely credible in the essentials of his testimony.” United States v. O'Connor, 650 F.3d 839, 855 (2d Cir.2011).

In this regard, relevant circumstances bearing upon a witness's testimony—such as a cooperation agreement with the Government and inconsistencies in his or her testimony—are simply “factors relevant to the weight the jury should accord to the evidence, and do not [necessarily] justify the grant of a judgment of acquittal.” Truman, 688 F.3d at 140 (quoting United States v. Coté, 544 F.3d 88, 100 (2d Cir.2008) ). In this Circuit, “even the testimony of a single accomplice witness is sufficient to sustain a conviction, provided it is not 'incredible on its face,' United States v. Florez, 447 F.3d 145, 155 (2d Cir.2006), or does not 'def[y] physical realities,' Coté, 544 F.3d at 101 (quotation marks omitted).” Id. at 139.

“In short, '[w]here a court concludes after a full analysis of the evidence in connection with a Rule 29 motion that 'either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible, [the court] must let the jury decide the matter.' United States v. Martinez, 978 F.Supp.2d 177, 186–87 (E.D.N.Y.2013) (quoting Temple, 447 F.3d at 137 ).

With these principles in mind, the Court will now turn to the Defendant's specific contentions. First, the Court will address several broad arguments that the Defendant raises in an effort to overturn all 66 guilty counts. Second, the Court will address several narrower arguments that challenge the sufficiency of the evidence relating to individual guilty counts.

2. The Arguments Directed at All Guilty Counts

The Defendant asserts three related bases for overturning all of the jury's guilty verdicts, each of which attacks the sufficiency of the evidence that he acted with the requisite criminal intent.

First, Scully contends that he established the advice of counsel defense, thereby negating criminal intent, an essential element required to sustain a conviction on any of the charges against him....

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