United States v. Robert Sharp ( 2018 )

United States Court of Appeals
For the Eighth Circuit
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No. 16-4008
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Robert Carl Sharp
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the Northern District of Iowa - Cedar Rapids
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Submitted: September 21, 2017
Filed: January 5, 2018
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Before SMITH, Chief Judge, WOLLMAN and GRUENDER, Circuit Judges.
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GRUENDER, Circuit Judge.
Robert Carl Sharp pleaded guilty after a grand jury returned a three-count
superseding indictment charging him with (1) conspiracy to manufacture and
distribute a controlled substance, in violation of 21 U.S.C. § 846; (2) possession with
intent to distribute a controlled substance, in violation of 21 U.S.C. § 841(a)(1); and
(3) possession with intent to distribute, and aiding and abetting the possession with
intent to distribute, a controlled substance, in violation of 21 U.S.C. § 841(a)(1).
Sharp subsequently filed a motion to withdraw his guilty plea. The district court1
denied the motion and sentenced Sharp to thirty years’ imprisonment. He now
appeals the judgment, arguing that the district court abused its discretion in denying
the motion and that it plainly erred in failing to reconsider the motion sua sponte in
light of evidence presented at the sentencing hearing. For the reasons that follow, we
affirm.
I.
In 2012, Sharp was released from federal prison after serving a sentence for
possession with intent to distribute cocaine base. While on supervised release, he
began manufacturing and selling synthetic cannabinoids in Illinois and then Iowa.
Sharp purchased synthetic-cannabinoid chemicals in bulk from various
suppliers, and he and his employee would apply them to leafy substances. They
would then package and label these “herbal incense” products for sale. The
packaging included a warning that the products were not fit for human consumption,
even though Sharp knew that customers would smoke them. Sharp admitted to
knowing that his products caused “disorientation” and had “no other good use,”
although he added that they did not produce “a euphoric high” like marijuana.
Notably, Sharp paid his employee in cash, and his emails ordering a chemical he
called “THJ-011” included the heading “AB-FUBINACA.”
According to Sharp, he and another incense dealer named Hadi Sharairi hired
attorney Joel Schwartz for advice about what products were legal to sell and to ensure
1
The Honorable Linda R. Reade, United States District Judge for the Northern
District of Iowa, adopting the report and recommendation of the Honorable Jon Stuart
Scoles, United States Magistrate Judge for the Northern District of Iowa, now retired.
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that they complied with all federal and state laws. Sharp also stated that Schwartz
failed to warn him that the government had scheduled AB-FUBINACA as a
controlled substance. Sharp said that he informed Schwartz of this oversight and
complied with Schwartz’s instruction to dispose of all products that contained the
chemical. Sharp also claimed that he sent Schwartz a sample of a substance that he
believed was THJ-011 for testing along with a $900 money order. Sharp maintained
that when he asked for the results, Schwartz responded “that he could no longer have
products tested.”
Schwartz’s recollection of the attorney-client relationship differed. During the
hearing on Sharp’s motion to withdraw his guilty plea, Schwartz testified that Sharp
sought representation “for a potential future criminal case” after a previous encounter
with law enforcement—not advice about how to sell synthetic drugs legally.
Schwartz explained that he warned Sharp “that everything synthetically that causes
impairment of the brain either was listed or was an analog or would be soon
thereafter.” As a result, he informed Sharp that “if he were charged with something,
he would be a career offender and this was too dangerous a game for him to play and
he should stop.”
Nonetheless, Schwartz acknowledged that he did offer Sharp advice on
whether certain substances were legal. In particular, in response to a query from
Sharp, Schwartz searched for THJ-011 on the website of the Drug Enforcement
Agency and on Google. Although he did not find anything indicating that it was
illegal, he did not inform Sharp that the substance was therefore legal. And though
Schwartz could not recall specifically advising Sharp that it was illegal, he
nevertheless warned him that “everything that’s selling as synthetics either is now or
will soon be illegal once the Government finds that you have it.” Schwartz also
advised Sharp that he was violating FDA regulations by selling misbranded products.
In addition, Schwartz testified that he had no recollection of Sharp giving him a
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sample for testing and that, if Sharp had, he would have destroyed it because “I’m not
going to have something that might be an illegal narcotic in my office.”
In early 2014, law enforcement began investigating Sharp’s activities.
Investigators sent a confidential source to make purchases at Sharp’s store. An
employee told the source that Sharp was not in and “probably took [the herbal
incense] with him.” The employee said that, with “raids happening everywhere,”
Sharp was “just being smart.” A subsequent controlled purchase provided probable
cause that Sharp was selling controlled substances, and law enforcement officers
executed search warrants on his residence, his vehicle, a storage unit that he acquired
under a false name, and his employee’s residence. They found products containing
AB-FUBINACA, which is a Schedule I controlled substance, as well as $88,663 in
cash proceeds from the cannabinoids. The grand jury then returned the three-count
superseding indictment.
Just before trial was to begin, Sharp pleaded guilty to all three counts without
a plea agreement. During the plea colloquy, Sharp admitted his involvement in and
knowledge of a conspiracy to manufacture and distribute AB-FUBINACA (Count 1).
For the possession with intent to distribute counts (Counts 2 and 3), however, Sharp
insisted that he thought that he was distributing THJ-011 rather than AB-
FUBINACA. Nevertheless, he pleaded guilty to Counts 2 and 3 under a theory of
willful blindness. See Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769
(2011).
In December 2015, Sharp retained new counsel and moved to withdraw his
guilty plea. Following an evidentiary hearing at which both Sharp and Schwartz
testified, the magistrate judge issued a report and recommendation concluding that
Sharp’s motion should be denied. The district court overruled Sharp’s objections,
adopted the magistrate judge’s report and recommendation, and denied Sharp’s
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motion to withdraw his guilty plea. Following an evidentiary hearing,2 Sharp was
sentenced to thirty years’ imprisonment.
II.
We review the denial of a motion to withdraw a guilty plea for an abuse of
discretion. United States v. Van Doren, 800 F.3d 998, 1001 (8th Cir. 2015). A
defendant may withdraw a plea of guilty before the court imposes a sentence if “the
defendant can show a fair and just reason for requesting the withdrawal.” Fed. R.
Crim. P. 11(d)(2)(B). “While the standard is liberal, the defendant has no automatic
right to withdraw a plea.” United States v. Heid, 651 F.3d 850, 853 (8th Cir. 2011).
A defendant bears the burden of establishing a fair and just reason. United States v.
Cruz, 643 F.3d 639, 642 (8th Cir. 2011). We conclude that the district court did not
abuse its discretion in denying Sharp’s motion to withdraw his guilty plea.
A. Conflict of interest and ineffective assistance of counsel
Sharp first argues that the district court abused its discretion in refusing to
allow him to withdraw his guilty plea because his lawyer had a conflict of interest and
provided him ineffective assistance of counsel. In particular, Sharp argues that
Schwartz had a conflict of interest because he was a vital fact witness as to Sharp’s
mens rea. See United States v. Merlino, 349 F.3d 144, 152 (3rd Cir. 2003)
(explaining that the possibility of counsel’s “being called as a witness was a . . .
source of potential conflict, as it is often impermissible for an attorney to be both an
advocate and a witness”). In this circuit, it is unclear whether this sort of alleged
conflict of interest requires a defendant to show deficient performance and prejudice
2
At the hearing, Hadi Sharairi testified about a letter Sharp wrote urging him
to make false statements. In addition, Sharp introduced recordings of several
conversations he had with Schwartz when Sharp was in jail awaiting trial.
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under Strickland v. Washington, 466 U.S. 668, 687 (1984), or whether it is sufficient
for a defendant to show that a conflict of interest “adversely affected his lawyer’s
performance,” see Caban v. United States, 281 F.3d 778, 781-84 (8th Cir. 2002)
(quoting Cuyler v. Sullivan, 446 U.S. 335, 348 (1980)). We need not choose between
the Strickland and Cuyler standards because Sharp’s claim fails under both.
Under Cuyler, Sharp must identify “some actual and demonstrable adverse
effect on the case, not merely an abstract or theoretical one.” See Covey v. United
States, 377 F.3d 903, 908 (8th Cir. 2004). He must show that “the conflict caused the
attorney’s choice.” See id. According to Sharp, Schwartz could have testified that
Sharp thought the substance was THJ-011 and that he investigated whether it was on
the drug schedules. Sharp maintains that Schwartz’s testimony would have
established that he did not satisfy the two elements of willful blindness: “(1) the
defendant must subjectively believe that there is a high probability that a fact exists
and (2) the defendant must take deliberate actions to avoid learning of that fact.”
Global-Tech, 563 U.S. at 769; see also United States v. Hansen, 791 F.3d 863, 868
(8th Cir. 2015) (“[T]he jury may find willful blindness only if the defendant was
aware of facts that put him on notice that criminal activity was probably afoot and
deliberately failed to make further inquiries, intending to remain ignorant.”). Had he
realized that Schwartz was a potential witness, Sharp claims he would have gone to
trial instead of pleading guilty.
As the Supreme Court has explained, the Government can prove knowledge
under 21 U.S.C. § 841(a) through either direct or circumstantial evidence:
Direct evidence could include, for example, past arrests that put a
defendant on notice of the controlled status of a substance.
Circumstantial evidence could include, for example, a defendant’s
concealment of his activities, evasive behavior with respect to law
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enforcement, [and] knowledge that a particular substance produces a
“high” similar to that produced by controlled substances . . . .
McFadden v. United States, 135 S. Ct. 2298, 2304 n.1 (2015) (citation omitted).
Inasmuch as Schwartz’s testimony would have probative value under this
standard, Sharp has not shown that such a strategy would have been “objectively
reasonable under the facts of this case,” nor has he shown that Schwartz’s advice to
plead guilty “was linked to the actual conflict.” See Covey, 377 F.3d at 908.
Schwartz reasonably expected that the Government could prove beyond a reasonable
doubt that Sharp knowingly possessed a controlled substance. Indeed, in his
testimony at the plea withdrawal hearing, Schwartz mentioned the undercover
purchase attempt where Sharp’s employee stated that Sharp took the herbal incense
out of the store at night; Sharp’s emails ordering THJ-011 under the heading of AB-
FUBINACA; the alias Sharp used to purchase a storage locker for the incense; his
paying his employee in cash; and his labeling the incense as not for human
consumption even though Sharp knew his customers were smoking it. In addition,
Sharp knew that the substance had a disorienting effect, and his prior drug conviction
demonstrates some familiarity with the drug laws. Moreover, had Schwartz testified,
he would have explained that he told Sharp that synthetic drugs were either illegal or
would soon be classified as illegal. He also would have stated that he told Sharp that
this business was “too dangerous” and that Sharp should stop.3 If anything, such
3
Sharp’s failure to heed Schwartz’s instruction to stop selling synthetic
cannabinoids also precludes Schwartz’s testimony as part of an advice-of-counsel
defense strategy. To rely upon an advice-of-counsel defense, a defendant must show
that he “(i) fully disclosed all material facts to his attorney before seeking advice; and
(ii) actually relied on his counsel’s advice in the good faith belief that his conduct was
legal.” United States v. Rice, 449 F.3d 887, 897 (8th Cir. 2006). Even assuming
Sharp satisfied the first element, Schwartz’s testimony establishes that he failed to
satisfy the second element.
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testimony would burnish the Government’s case that Sharp did know that his product
was illegal. Given these facts, the alleged conflict did not adversely affect Schwartz’s
performance in advising Sharp to plead guilty. For the same reasons, Sharp also fails
to establish deficient performance and prejudice under Strickland’s more stringent
standard. See 466 U.S. at 687; see also Hill v. Lockhart, 474 U.S. 52, 59 (1985)
(explaining that there is prejudice under Strickland when, but for counsel’s errors,
defendant would not have pleaded guilty and would have insisted on going to trial).
In addition to alleging that Schwartz had a conflict of interest, Sharp further
argues that Schwartz provided ineffective assistance of counsel because Schwartz
misinformed him about willful blindness. For this second claim, Sharp must show
both deficient performance and prejudice. See Strickland, 466 U.S. at 687. He argues
that Schwartz incorrectly advised him that he was willfully blind merely because he
did not have the chemical tested. Sharp points out that testing may not have been a
realistic option because most laboratories would not accept potentially illegal
substances.
In light of the evidence against Sharp, Schwartz’s advice concerning willful
blindness was neither deficient nor prejudicial. Sharp professed his ignorance of the
true identity of THJ-011 even though Schwartz’s reasonable assessment of the
evidence indicated that the Government would be able to prove his actual knowledge
beyond a reasonable doubt. Nonetheless, in the face of Sharp’s insistence that he
thought the chemical was THJ-011, Schwartz reasonably concluded that the
Government could also establish Sharp’s mens rea under a theory of willful
blindness. See Global-Tech, 563 U.S. at 769 (“[A] willfully blind defendant is one
who . . . can almost be said to have actually known the critical facts.”); United States
v. Galimah, 758 F.3d 928, 931 (8th Cir. 2014) (“A deliberate ignorance or a willful
blindness instruction is a mechanism for inference, not a substitute for knowledge.”
(internal quotation marks omitted)).
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Despite the Government’s strong case, Sharp might have been able to refute the
inference that he had the requisite knowledge if a reputable lab had tested the
substance. Cf. United States v. Makkar, 810 F.3d 1139, 1147-48 (10th Cir. 2015)
(explaining that evidence that defendants asked state law enforcement agents to test
the incense they were selling was relevant to mens rea). However, his failure to have
the substance tested made it almost impossible for him to rebut the Government’s
case. In other words, the mere failure to test was not enough to establish willful
blindness, but Sharp’s failure to have the substance tested in the face of such
overwhelming evidence indicated that he was, at the very least, “burying [his] head
in the sand.” See United States v. Florez, 368 F.3d 1042, 1044 (8th Cir. 2004)
(“Ignorance is deliberate if the defendant was presented with facts that put her on
notice that criminal activity was particularly likely and yet she intentionally failed to
investigate those facts.”). As a result, Schwartz’s advice concerning willful blindness
was not deficient and did not prejudice Sharp. See Evans v. Luebbers, 371 F.3d 438,
445 (8th Cir. 2004) (“[S]trategic and tactical decisions made by counsel, though they
may appear unwise in hindsight, cannot serve as the basis for an
ineffective-assistance claim under Strickland.”).
For all these reasons, the district court did not abuse its discretion in refusing
to allow him to withdraw his guilty plea.
B. Factual basis for guilty plea
Sharp also argues that the district court abused its discretion in refusing to
allow him to withdraw his guilty plea because the plea lacks an adequate factual
basis. Federal Rule of Criminal Procedure 11(b)(3) mandates that, “[b]efore entering
judgment on a guilty plea, the court must determine that there is a factual basis for the
plea.” A defendant establishes a fair and just reason for withdrawing his guilty plea
by demonstrating that his plea is not supported by an adequate factual basis. United
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States v. Heid, 651 F.3d 850, 855-56 (8th Cir. 2011). “A guilty plea is supported by
an adequate factual basis when the record contains sufficient evidence at the time of
the plea upon which a court may reasonably determine that the defendant likely
committed the offense.” United States v. Cheney, 571 F.3d 764, 769 (8th Cir. 2009)
(internal quotation marks omitted). Because there was no plea agreement or
stipulated facts, the district court relied on the Government’s Rule 11 letter and the
plea colloquy to determine whether there is a sufficient factual basis.
The Government had to establish that Sharp knowingly possessed a controlled
substance. See 21 U.S.C. § 841(a). Sharp needed to know that he possessed a
substance listed on the controlled substance schedules, even if he did not know the
particular substance. See McFadden, 135 S. Ct. at 2304. Alternatively, the
knowledge requirement would be met if Sharp knew the particular substance he
possessed, even if he did not know that it was illegal. See id.
But Sharp insisted that he thought the substance was THJ-011, which is not
listed on the federal drug schedules, and not AB-FUBINACA, which is listed. As a
result, he was unwilling to plead guilty on either of the two grounds established in
McFadden. Instead, he pleaded under the alternative theory of willful blindness.
During the plea colloquy, the magistrate judge therefore inquired whether he
“believed there was a high probability that the substance in [his] possession was
subject to federal drug laws and [if he] took deliberate action to avoid learning the
true identity of the substances.” Though Sharp answered affirmatively, he now
argues that the record lacks a factual basis for either prong of willful blindness. See
Global-Tech, 563 U.S. at 769.
First, Sharp argues that there is an insufficient factual basis that he believed
that there was a high probability that the substance in his possession was a controlled
substance. In McFadden, the Supreme Court rejected the Government’s proposed
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jury instruction stating that the knowledge requirement would be met if the
“defendant knew he was dealing with an illegal or regulated substance under some
law.” McFadden, 135. S. Ct. at 2306 (emphasis added and internal quotation marks
omitted). The Court explained that Section 841(a) instead “requires that a defendant
knew he was dealing with ‘a controlled substance.’ That term includes only those
drugs listed on the federal drug schedules or treated as such by operation of the
Analogue Act. It is not broad enough to include all substances regulated by any law.”
Id. (citation omitted).
During the plea colloquy, the magistrate judge did not use the phrase
“controlled substance” or refer specifically to the Controlled Substances Act
(“CSA”), the federal drug schedules, or the Analogue Act. Instead, he asked, “Did
you believe there was a high probability that those—that substance or substances
were subject to federal drug laws?” Sharp answered, “Under some federal drug law,
yes.” Because there are federal drug laws besides the CSA and the Analogue Act,
including federal labeling regulations, Sharp argues that his response was too broad
and that his conviction violates McFadden.
Furthermore, Sharp maintains that, because he was prosecuted for possessing
a controlled substance under 21 U.S.C. § 841(a)—and not under the Analogue
Act—the Government must meet a stricter mens rea requirement. Specifically, Sharp
contends that the Government must establish that he knew (or was willfully blind to)
the identity of the substance he possessed—which Sharp has denied knowing—or that
he knew (or was willfully blind to the fact) that the substance was on the controlled
substance schedules. Sharp therefore argues that the Government cannot rely on
evidence that he believed (or was willfully blind to the fact) that the substance was
treated as a controlled substance by operation of the Analogue Act because it was
“substantially similar” to a substance on the drug schedules. See 21 U.S.C.
§ 802(32)(A). In effect, Sharp maintains that the plea colloquy would have been
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insufficient even if the magistrate judge had specifically asked whether Sharp
believed there was a high probability that the substance in his possession was “listed
on the federal drug schedules or treated as such by operation of the Analogue Act,”
the very language proposed by McFadden. Instead, Sharp claims that the plea
colloquy must provide specific evidence for his belief that there was a high
probability that the substance in his possession was on the federal drug schedules.
We disagree and find an adequate factual basis for the plea. First, the
magistrate judge’s reference to “federal drug laws” avoids the overbreadth concern
identified in McFadden. The magistrate judge did not ask Sharp if he thought there
was a high probability that the substances were regulated by “any law.” Instead, he
referred to “federal drug laws.” The meaning of this phrase was sufficiently clear in
the context of the proceeding. Indeed, in denying Sharp’s motion to withdraw his
plea, the district court explained that the words “can be understood in context to refer
to the Controlled Substances Act or the Controlled Substance Analogue Enforcement
Act of 1986.” Moreover, the Supreme Court itself used the shorthand “federal drug
schedules.” See McFadden, 135 S. Ct. at 2306.
We also disagree that the district court needed to find that Sharp knew that
there was a high probability that the substance was specifically on the controlled
substance schedules. Evidence in the record that Sharp believed that there was a high
probability that the substance was an analogue is sufficient for establishing willful
blindness. Under federal law, analogues are themselves treated as controlled
substances. See 21 U.S.C. § 813 (“A controlled substance analogue shall, to the
extent intended for human consumption, be treated, for the purposes of any Federal
law as a controlled substance in schedule I.”). Moreover, the Government needs to
establish only general criminal intent to obtain a conviction under Section 841(a). As
we have explained, “The Government is not required to prove that the defendant
actually knew the exact nature of the substance with which he was dealing. The
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‘knowingly’ element of the offense refers to a general criminal intent, i.e., awareness
that the substance possessed was a controlled substance of some kind.” United States
v. Ramos, 814 F.3d 910, 915 (8th Cir. 2016) (internal quotation marks and alterations
omitted), cert. denied, 137 S. Ct. 177 (2016). In other words, when the Government
proves beyond a reasonable doubt that a defendant believed that a substance was an
analogue intended for human consumption, that defendant cannot escape liability
because the substance turned out to have been on the controlled substance schedules.
The belief that he possessed an analogue establishes the defendant’s knowledge.
Therefore, the magistrate judge’s generalized reference to the CSA and the Analogue
Act was sufficient to establish a factual basis for the plea.4
Second, after establishing that Sharp thought that there was a high probability
that the substances in his possession were controlled substances, the magistrate judge
asked if Sharp took “deliberate action to avoid learning the true identity of the
substance and whether or not, in fact, it was subject of a federal drug law?” Sharp
answered, “By not getting it tested, yes, yes, I did.” Sharp now argues that this
answer is insufficient to support willful blindness because he admitted only that he
had not had the product tested, mistakenly believing that this in itself established
willful blindness. He now maintains that this assumption was wrong because there
is not an affirmative obligation to have a product tested.
As mentioned above, a factual basis requires only that “the record contains
sufficient evidence at the time of the plea upon which a court may reasonably
determine that the defendant likely committed the offense.” Cheney, 571 F.3d at 769
4
The Government’s Rule 11 letter also contains additional information
suggesting Sharp had the requisite knowledge. It describes how Sharp’s employee
told the confidential source who visited Sharp’s store that Sharp was not in and
“probably took it with him.” The employee added that, with “raids happening
everywhere,” Sharp was “just being smart.”
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(internal quotation marks omitted). The magistrate judge explicitly asked whether
Sharp took deliberate action to avoid learning the true identity of the substance.
Sharp answered yes and provided an example of a relevant omission. As a result, the
district court’s conclusion that there is a sufficient factual basis is reasonable. See
Florez, 368 F.3d at 1044.
For these reasons, Sharp’s guilty plea rests on an adequate factual basis and the
district court did not abuse its discretion in denying his motion.
C. Court’s failure to reconsider the motion sua sponte
Finally, Sharp argues that the district court should have reconsidered his
motion to withdraw the guilty plea sua sponte at sentencing. Because he failed to
renew his motion to withdraw his guilty plea at sentencing, we review for plain error.
See United States v. Pate, 518 F.3d 972, 975 (8th Cir. 2008). Under plain error
review, Sharp must prove that (1) there was error, (2) that was plain, and (3) affected
substantial rights. See United States v. Adejumo, 772 F.3d 513, 538 (8th Cir. 2014).
If these three conditions are met, we may exercise our “discretion to correct the
forfeited error if the error seriously affects the fairness, integrity or public reputation
of judicial proceedings.” Molina-Martinez v. United States, 136 S. Ct. 1338, 1343
(2016) (internal quotation marks omitted).
Sharp maintains that the telephone recordings of his conversations with
Schwartz and the testimony of several witnesses corroborate his claims of innocence
and show that the district court was wrong to credit Schwartz’s testimony over his
own. As a result, he suggests that the district court should have reconsidered his
motion to withdraw his guilty plea even though he did not renew it. Though much
of this evidence echoes Sharp’s insistence that he believed the substance was
THJ-011, it nevertheless fails to rehabilitate his credibility. Above all, Hadi
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Sharairi’s testimony—suggesting that Sharp urged him to lie to the
police—undermines Sharp’s protestations of innocence.
Because the evidence elicited at sentencing neither rehabilitates Sharp’s
credibility nor undermines the evidence of his guilt, the district court did not plainly
err in failing to reconsider the motion to withdraw the guilty plea sua sponte.
III.
Accordingly, we affirm Sharp’s conviction because the district court did not
abuse its discretion in denying Sharp’s motion to withdraw his guilty plea or plainly
err in refusing to reconsider that motion sua sponte at sentencing.
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