United States v. Sugar

• Decision Date: 03 April 1985
• Docket Number: No. SS 84 Cr. 629 (SWK).,SS 84 Cr. 629 (SWK).
• Citation: 606 F. Supp. 1134
• Parties: UNITED STATES of America, v. Leo Laszlo SUGAR, Victoria Vamos, Gloria Reinhardt, and Nandor Retek, Defendants.
• Court: U.S. District Court — Southern District of New York

606 F. Supp. 1134

UNITED STATES of America, v. Leo Laszlo SUGAR, Victoria Vamos, Gloria Reinhardt, and Nandor Retek, Defendants.

No. SS 84 Cr. 629 (SWK).

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

April 3, 1985.

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Rudolph W. Giuliani, U.S. Atty., S.D.N.Y. by David S. Hammer, Asst. U.S. Atty., New York City, for the U.S Louis R. Rosenthal, by John M. Leventhal, Brooklyn, N.Y., for defendant Sugar.

Lorraine Backal, New York City, for defendant Reinhardt.

Louis E. Diamond, Staten Island, N.Y., for defendant Vamos.

Kenneth P. Lowenthal, Brooklyn, N.Y., for defendant Retek.

MEMORANDUM OPINION AND ORDER

KRAM, Distict Judge.

The above-captioned action is before this Court upon defendants's omnibus motions for varied relief. For the reasons stated below, the motions are denied.

—BACKGROUND—

Dr. Leo Laszlo Sugar is a medical doctor licensed to practice medicine in the State of New York. He maintains medical offices at 400 East 77th Street in Manhattan. Gloria Reinhardt was Dr. Sugar's receptionist. Victoria Vamos and Nandor Retek also worked for Dr. Sugar in his medical offices.

Dr. Sugar specializes in the treatment of obesity and in weight reduction ("bariatrics"). During the course of this practice, Dr. Sugar dispensed appetite suppressant medication ("anorectics") to his patients at his medical offices. Reinhardt, Vamos, and Retek, as part of their employment duties, assisted in the distribution of these anorectics.

The anorectics dispensed in huge quantities at Dr. Sugar's offices include phendimetrazine, a Schedule III controlled substance, and phentermine, a Schedule IV controlled substance, both of which are stimulants. These drugs may lawfully be dispensed directly to patients in the course of a medical practice.

On May 25, 1983, William Hanlon, a Special Agent of the Drug Enforcement Agency ("DEA"), visited Dr. Sugar's offices, posing, under the alias Robert Connolly, as a prospective patient who wanted to lose weight. Hanlon was interviewed by a member of Sugar's staff, "Alex," and asked to fill out a medical questionnaire. He was then weighed. Alex recorded the weight on an index card with Hanlon's assumed name on it, and placed it, with others like it, in a large box on his desk. Another member of Sugar's staff, "Vicki," took Hanlon's blood pressure and then introduced him to Dr. Sugar. Dr. Sugar listened to Hanlon's heartbeat through a stethoscope for approximately five seconds and asked him to breathe deeply once. Dr. Sugar then handed Hanlon a vial, which contained 36 phendimetrazine tablets, and asked for $40, telling Hanlon that subsequent visits would cost $20.

On June 1, 1983, Hanlon returned to Sugar's offices. Alex gave Hanlon his index card and introduced him to another member of Sugar's staff, "Gloria." Gloria asked Hanlon his weight and recorded his response on the index card. She then gave him a vial containing 36 phendimetrazine tablets and asked for $20. Hanlon asked for a second vial, which Gloria gave him for another $20.

On June 3, 1983, Hanlon returned to Sugar's offices. Gloria asked him how many vials he wanted. Hanlon requested, and was given, three vials, each containing 36 phendimetrazine tablets, for $60.

On June 8, 1983, Hanlon returned to Sugar's offices. After Hanlon was weighed, Gloria gave him three vials, each containing 36 phendimetrazine tablets, in exchange for $60.

On September 19, 1983, Hanlon returned to Sugar's offices. Hanlon asked Gloria for, and was given, two vials of phendimetrazine tablets for $40. Hanlon then asked for "pink" pills. Gloria gave him 10 tablets, later identified as SBP plus CT¹ in return for $10. Hanlon asked for, and was given, an additional 10 pink pills in exchange for another $10.

Hanlon did not see or speak to Dr. Sugar during any of his four visits to Sugar's offices after the first one. Moreover, he was not examined or questioned in any way when he sought a new medication—a depressant, even though he had simultaneously been provided with stimulants.

On September 23, 1983, the Government requested a warrant to search Sugar's offices. In support of that application, the Government submitted an affidavit of Agent Hanlon setting forth, inter alia, his experiences at Sugar's offices. Hanlon also alleged in that affidavit that he had received information from John P. Mulvey, a DEA Diversion Investigator² regarding Dr. Sugar's purchases of the controlled substances involved. In sum, Mulvey had informed Hanlon that Sugar purchased approximately 5,114,000 dosage units of anorectics between January 1, 1979 and March, 1983, which he had calculated were dispensed, on average, at the rate of nearly 8,000 dosage units per six-hour treatment day.

Mulvey had further informed Hanlon, based upon discussions with members of the medical profession and review of related medical literature and a consent decree setting minimum standards for the practice of bariatrics,³ of the generally approved standards (e.g., duration of usage, dosage, general treatment of patients) for dispensing anorectics in a bariatric practice. Hanlon summarized the proper practice as follows: "The use of anorectic drugs in a program of weight control is thus only approved for short periods of time, in a program involving restricted and specific amounts of anorexiants, and regular and extensive medical examination." Hanlon further asserted in his affidavit that he had been informed by an unnamed Sugar patient, that the informant and his wife had been Sugar's patients at various times over several years, and that the wife had regularly obtained $200 worth of phendimetrazine weekly over long periods of time.

The Government's application for a search warrant also contained a rough sketch of a floor plan, drawn by Hanlon, of the Sugar offices. The application was granted and a search pursuant to that warrant was conducted that day. Extensive evidence, including all of Dr. Sugar's books, records, data, and patient files were seized.

On September 6, 1984, a seven count indictment was handed up charging Sugar, Reinhardt, and Vamos with one count of conspiracy to distribute the controlled anorectics, five counts of distributing phendimetrazine (one count for each calendar year 1979 through 1983), and one count of furnishing false and fraudulent material information in applications, reports, records and other documents required to be made, kept, and filed under the federal narcotics laws.

On December 13, 1984, a superseding indictment was handed up adding Retek as a defendant in all but two counts (the substantive counts relative to calendar years 1979 and 1980) and including one additional overt act regarding Retek's participation in the conspiracy, but in no other way changing the original indictment.

These motions ensued. The defendants seek a variety of relief in these motions. Defendant Sugar moves for the following relief: 1) dismissal of the indictment because it is insufficient as a matter of law, and because it is based upon insufficient evidence before the Grand Jury; 2) dismissal of the substantive counts (or consolidation into one count), because they are multiplicitous —charging one offense in several counts; 3) dismissal of the indictment because it was not returned by a fair, impartial, and informed Grand Jury (a) unless the members voting to return the indictment attended all sessions related to this case and (b) owing to allegedly prejudicial remarks made by the prosecutor; 4) suppression of all evidence seized at Sugar's offices because (a) the warrant was unconstitutionally overbroad and exploratory; (b) the warrant was invalid because Hanlon's Affidavit was insufficient to establish probable cause, (c) the warrant was invalid because it was based on stale information; 5) suppression of all evidence seized from areas beyond the scope of the search warrant; and 6) exclusion, under Fed.R.Evid. 403, of any evidence regarding the quantity of controlled substances involved. Defendant Reinhardt moves, in relevant part, for the following relief: 1) dismissal of the indictment because there was insufficient evidence presented to the Grand Jury; 2) dismissal of the substantive counts because they are (a) multiplicious—charging one offense in separate counts, and (b) duplicitous —charging two or more separate offenses in one count; 3) severance of her trial from that of the other defendants, pursuant to Fed.R.Crim.P. 14; 4) a bill of particulars as to certain items, pursuant to Fed.R.Crim.P. 7(f); and 5) access to certain information regarding the constituency of the Grand Jury, including the minutes of grand jury proceedings, pursuant to Fed.R. Crim.P. 6(e)(3)(C)(i) and (ii). Defendant Reinhardt also joins in Sugar's motion to the extent it is not inconsistent. Defendant Vamos joins in Reinhardt's motion to the extent it is not inconsistent with her defense. Defendant Retek joins in the motions of Sugar and Reinhardt to the extent they are not inconsistent with his defense.

On January 22, 1985, a second superseding indictment was handed up. This indictment, in much greater detail than the two earlier indictments, charges the defendants with the following offenses: one count of conspiracy to distribute, outside the scope of professional medical practice, the three controlled substances involved herein; five counts of distribution, outside the scope of professional medical practice, of controlled substances (one each for a specific substance distributed to a named individual, noting the dosage units distributed); six counts of distribution, outside the scope of professional medical practice, of phendimetrazine (one each for dosage units recorded as, but never actually having been distributed to six named individuals); seven counts of distribution, outside the scope of professional medical practice, of SBP Plus (one each for dosage units recorded as, but never actually having...