United States v. Christopher Elder , 682 F.3d 1065 ( 2012 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 11-2057
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United States of America, *
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Plaintiff - Appellee, *
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v. *
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Christopher L. Elder, *
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Defendant - Appellant. *
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Appeals from the United States
No. 11-2145 District Court for the
___________ Western District of Missouri.
United States of America, *
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Plaintiff - Appellee, *
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v. *
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Troy R. Solomon, *
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Defendant - Appellant. *
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Submitted: February 16, 2012
Filed: July 2, 2012
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Before LOKEN, BYE, and MELLOY, Circuit Judges.
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LOKEN, Circuit Judge.
After a seven-day trial, a jury found Troy Solomon and Dr. Christopher Elder
guilty of conspiring to dispense and distribute and aiding and abetting the distribution
of hydrocodone (trade names Lortab and Lorcet), alprazolam (Xanax), and
promethazine from a Missouri pharmacy to Houston, Texas. See 21 U.S.C.
§§ 841(a)(1) and 846. The jury also convicted Solomon of conspiring to commit
money laundering in violation of 18 U.S.C. § 1956(h). The district court1 varied
downward and sentenced Solomon to 24 months and Dr. Elder to 15 months in
prison.2 The court ordered both defendants to pay joint and several forfeiture
judgments of $991,114 under 21 U.S.C. § 853. On appeal, defendants challenge the
sufficiency of the evidence supporting their convictions and forfeitures, and Dr. Elder
argues the district court abused its discretion in not severing his trial from Solomon’s.
We affirm.
I. Sufficiency of the Evidence
In considering these issues, we view the evidence in the light most favorable
to the jury’s verdict. United States v. Smith, 573 F.3d 639, 657 (8th Cir. 2009).
A. The Controlled Substances Convictions. Solomon, Dr. Elder, and others
were charged with conspiring to dispense and distribute controlled substances in
violation of 21 U.S.C. § 841(a)(1), which prohibits dispensing and distribution
“[e]xcept as authorized by this subchapter.” When the alleged offense involves the
distribution of drugs prescribed by a licensed physician registered under the federal
1
The Honorable Fernando J. Gaitan, Jr., Chief Judge of the United States
District Court for the Western District of Missouri.
2
The government dismissed sentencing cross-appeals.
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Controlled Substances Act, the government must prove that the physician’s activities
“fall outside the usual course of professional practice.” United States v. Moore, 423
U.S. 122, 124 (1975); see Smith, 573 F.3d at 657.
The government’s evidence at trial established that chiropractor Pleshette
Johnson-Wiggins and her mother opened the South Texas Wellness Center (“STWC”)
in Houston in early 2004. That summer, Dr. Elder began working as its medical
director, and drug salesman Troy Solomon began “investing” in STWC by delivering
bundles of cash to cover “overhead.” In August, Solomon asked Cynthia Martin if
she knew a pharmacist who would fill mail-order prescriptions for doctors with
“high-profile customers” interested in confidentiality. Martin contacted her friend
Mary Lynn Rostie, owner and head pharmacist of The Medicine Shoppe (“TMS”)
in Belton, Missouri. Rostie and Solomon negotiated prices for medications
containing hydrocodone, a Schedule III controlled substance, alprazolam, a Schedule
IV controlled substance, and promethazine, a Schedule V controlled substance, and
discussed how to get the drugs from Missouri to Houston. Following these
conversations, between August 2004 and October 2005, TMS filled prescriptions
written by three Houston doctors, including Dr. Elder, for 2,026,666 dosage units of
hydrocodone, 336,240 dosage units of alprazolam, and 1,727,381 milliliters of
promethazine with codeine.
Between August and October 2004, Martin delivered to TMS 544 prescriptions
written by Dr. Elder at STWC. Most were for medications containing hydrocodone
and alprazolam; the rest were for a syrup containing promethazine. When the
prescriptions did not include dates or patient addresses, TMS staff requested the
missing information from Solomon by phone. From his home, Solomon faxed
handwritten lists of patient addresses and dates of birth, corresponding to Dr. Elder’s
prescriptions and sorted by medication. TMS then filled the prescriptions and sent
them to STWC, addressed to Dr. Elder. At STWC, the boxes of medications were
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signed for by clinic staff -- and by Dr. Elder on one occasion -- and then taken to the
office of Ascencia Nutritional Pharmacy (“ANP”), a pharmacy co-owned by Solomon
located on the same floor as STWC. ANP employee Delmon Johnson delivered the
boxes to Solomon or his co-owner. STWC never distributed medications to patients.
In November 2004, TMS began refilling large batches of Dr. Elder’s original
prescriptions that stated no refills. Without patient contact, TMS faxed refill requests
for fifty to one hundred patients at a time to Solomon for Dr. Elder’s authorization.
Solomon’s faxed replies included Dr. Elder’s signature authorizing the refills. In
January 2005, Dr. Elder ended his employment at STWC but Solomon continued
faxing refill authorizations for Dr. Elder’s prescriptions until at least August 2005.
TMS filled many of Dr. Elder’s 544 original prescriptions at least ten times,
uniformly refilling large batches about once a month. In 2005, TMS also filled
prescriptions written by Houston physicians Peter Okose and Juan Botto (neither
charged in this indictment), using address information that Solomon faxed from his
home. Dr. Okose’s prescriptions began arriving at TMS and ANP around the time Dr.
Elder ended his employment at STWC. Dr. Okose typically submitted very large
numbers of pre-printed prescriptions -- up to 150 per day -- written for patients whose
last names started with the same letter. Dr. Botto did not write the relatively small
number of prescriptions filled in 2005 using his registration number. There was no
evidence directly linking either Dr. Okose or Dr. Botto to Dr. Elder.
After leaving STWC, Dr. Elder moved to the Westfield Medical Clinic
(“WMC”) in Houston. There, he requested copies of prescriptions he issued to
patients. While the patients filled the prescriptions at local pharmacies, the copies,
including a list of patient names and addresses in Dr. Elder’s handwriting, were faxed
from Solomon’s home to TMS in Missouri. TMS’s drug shipments were eventually
mailed directly to ANP rather than STWC. ANP also received and filled some of Dr.
Elder’s duplicative WMC prescriptions. ANP employee Lillian Zapata testified that
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she rode with Solomon in his BMW to “a part of Houston that I would consider the
ghetto,” where Solomon pulled off the road, “exchanged words” with a person who
pulled behind them, handed that person a small box from the trunk, then told her, “I
bet you didn’t know you were riding with three million dollars.”
The government’s investigation of the scheme began in October 2005. As it
progressed, the government subpoenaed patient medical records from Dr. Elder,
STWC, and WMC, without success. During DEA interviews, Dr. Elder tried to
disguise his handwriting. Later investigation revealed that Dr. Elder and Solomon
placed hundreds of phone calls to each other in 2004 and 2005, including calls the
day Solomon faxed Dr. Elder’s WMC prescriptions to TMS, and the day the DEA
conducted a warrant search of ANP’s offices.
Rostie and Martin pleaded guilty to controlled substance and money laundering
conspiracies. The owners of STWC were granted immunity, and the government
dismissed charges against Delmon Johnson. Solomon and Dr. Elder were the only
named conspirators to go to trial. Rostie, Martin, Delmon Johnson, and Pleshette
Johnson-Wiggins each testified against Solomon and Dr. Elder. Dr. Okose was
separately prosecuted in the Southern District of Texas.
At trial, Dr. Elder admitted he wrote the 544 original prescriptions but disputed
knowing they were sent to or filled by TMS and questioned whether the refill
authorization signatures were consistent with his signatures on the original
prescriptions. Rostie testified that, on one occasion, she verified the legitimacy of
prescriptions directly with Dr. Elder. The government’s handwriting expert testified
it was “highly probable” the refill authorization initials were Dr. Elder’s. Dr. Elder
claimed to examine all patients named in the prescriptions, but neither Dr. Elder nor
his employers could produce records for any patient. Dr. Elder claimed STWC staff
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were responsible for the patient files. Pleshette Johnson-Wiggins testified that Dr.
Elder told her the patient charts were lost when his truck was stolen.
On appeal, Solomon and Dr. Elder argue the evidence was insufficient because
the government failed to prove (i) the generally recognized and accepted standard of
medical practice, and (ii) that Dr. Elder’s prescriptions fell outside that standard.
Unlike many cases involving distribution based on illegitimate prescriptions, the
government did not elicit expert testimony that specific patients were given
medications at odds with the applicable standard of care for their symptoms and
medical history. See, e.g., United States v. Katz, 445 F.3d 1023, 1028 (8th Cir.), cert.
denied, 549 U.S. 956 (2006); United States v. Tran Trong Cuong, 18 F.3d 1132,
1141-43 (4th Cir. 1994). “While expert testimony may be both permissible and
useful, a jury can reasonably find that a doctor prescribed controlled substances not
in the usual course of professional practice or for other than a legitimate medical
purpose from adequate lay witness evidence surrounding the facts and circumstances
of the prescriptions.” United States v. Armstrong, 550 F.3d 382, 389 (5th Cir. 2008),
quoted in United States v. Pellmann 668 F.3d 918, 924 (7th Cir. 2012).
In this case, the government charged a multi-state conspiracy to distribute large
quantities of controlled substances based on prescriptions for lists of patients for
whom there was no credible evidence of patient-doctor relationships. Like the district
court, we conclude that substantial evidence supported the government’s theory. The
government’s expert, Dr. Morgan, opined that repeatedly prescribing hydrocodone
and alprazolam in combination was “extremely unusual.” Government subpoenas
failed to uncover patient files or charts for the patients named in Dr. Elder’s
prescriptions filled by TMS. STWC records showed that Dr. Elder rarely saw patients
and worked only five hours a day, two or three days a week, yet he claimed to
examine and prescribe medications for 544 patients during his five months at STWC.
The original STWC prescriptions -- not copies -- were found in a small-town
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Missouri pharmacy with corresponding personal information sent from Solomon’s
home, yet Dr. Elder testified that he gave the prescriptions directly to patients in
Texas. While he worked at WMC, a clinic with no apparent ties to Solomon, Dr.
Elder requested copies of patient prescriptions which Solomon then faxed to TMS
along with Dr. Elder’s handwritten list of patient addresses; the copied prescriptions
were filled without the patients’ knowledge. Finally, the evidence showed that Dr.
Elder had hundreds of phone contacts with Solomon, including on the day
investigators searched ANP, and that Dr. Elder initially tried to disguise his
handwriting to the DEA investigators. There was substantial evidence that Solomon
and Dr. Elder knowingly conspired to illegally dispense and distribute controlled
substances prescribed by Dr. Elder outside the usual course of professional practice
and without a legitimate medical purpose.
Dr. Elder and Solomon argue the evidence was insufficient on eight substantive
distribution counts because the patients did not testify and Dr. Morgan could not
“second guess” what Dr. Elder did in those cases without reviewing the patient files.
The evidence that no patient files were found or produced cast serious doubt on
whether any legitimate doctor-patient relationships existed. To further refute Dr.
Elder’s testimony that he examined the six patients named in the eight substantive
counts, the government introduced Dr. Elder’s post-indictment letter to the Texas
Medical Board stating, “To the best of my knowledge, I have never served as a
physician for the six individuals listed in the board subpoena.” The government also
presented evidence that two of these patients died before the dates of Dr. Elder’s
prescriptions, and invalid addresses were faxed by Solomon to TMS for the other
four. When combined with the evidence previously discussed, the jury could find
beyond a reasonable doubt that Dr. Elder unlawfully issued prescriptions for these
medications outside the usual course of professional practice and without a legitimate
medical purpose, and that Solomon aided and abetted those violations.
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B. Solomon’s Money Laundering Conviction. Solomon argues on appeal that
the evidence was insufficient to convict him of conspiring to commit money
laundering. We disagree. This count required proof that Solomon knew of and
intentionally joined a conspiracy to conduct financial transactions involving drug
proceeds intending either to promote the conspirators’ illegal activity, or to conceal
the nature, location, source, ownership, or control of the proceeds. 18 U.S.C.
§§ 1956(a)(1)(A) and (B). Having found Solomon guilty of the controlled substance
offenses, a reasonable jury could find that the many thousands of dollars that
Solomon mailed to Rostie to pay for prescriptions filled by TMS were the proceeds
of unlawful activity intended to promote additional drug trafficking. See United
States v. Eastman, 149 F.3d 802, 804 (8th Cir. 1998).3 Alternatively, the jury could
reasonably find that Solomon intended to conceal the nature and source of the
proceeds of unlawful activity by paying TMS with used, small denomination currency
mailed to Rostie, rather than by check or STWC invoice as she expected; and by
instructing his intermediary, Martin, to limit bank deposits to amounts less than
$10,000 in taking her “finder’s fee” of $5 per prescription. See United States v.
Williams, 605 F.3d 556, 564-66 (8th Cir. 2010).
II. Forfeiture
The indictment included an Allegation of Forfeiture. The statute provides that
each defendant “shall forfeit . . . any property constituting, or derived from, any
3
Citing United States v. Santos, 553 U.S. 507 (2008), Solomon urges us to
reconsider cases such as United States v. Spencer, 592 F.3d 866, 879-80 & n.4 (8th
Cir. 2010), where we held that “proceeds” include the gross receipts as well as the
profits from drug trafficking. As a panel, we may not do so. We note that in 2009
Congress enacted 18 U.S.C. § 1956(c)(9), which expressly includes gross receipts in
the definition of “proceeds.” Fraud Enforcement and Recovery Act of 2009, Pub. L.
111-21, § 2(f)(1)(B), 123 Stat. 1617, 1618.
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proceeds the person obtained, directly or indirectly, as the result” of the drug
conspiracy. 21 U.S.C. § 853(a)(1). Following the jury verdict, the government filed
a Motion for an Order of Forfeiture in the amount of $991,114, supported by a
Financial Analyst’s Declaration that forensic examination of TMS computers had
established that $525,621 of controlled substance prescriptions were filled and sold
using Dr. Elder’s name, $452,538 were filled and sold for Dr. Okose, and $12,955
were sold using Dr. Botto’s name. Solomon and Dr. Elder filed detailed objections
and requested an evidentiary hearing. However, at the sentencing hearings, neither
offered evidence on the issue. When the government advised it had a witness ready
to testify, Dr. Elder’s counsel stated he was satisfied to submit the issue on the briefs.
At Solomon’s separate sentencing hearing, he did not request an opportunity to cross
examine the government’s financial analyst. Thus, defendants preserved no issue of
error in the district court’s forfeiture procedures. See Fed. R. Crim. P. 32.2(b)(1)(A)-
(B). The district court issued a Final Order of Forfeiture that each defendant “shall
forfeit to the United States the sum of $991,114.00 pursuant to 21 U.S.C. § 853,” and
made that Order part of its final judgment. See Fed. R. Crim. P. 32.2(b)(4). Both
defendants appeal the final forfeiture judgment.
A. Solomon. Solomon argues there was insufficient evidence to support the
forfeiture of $911,114 because the government did not adequately support that figure
at trial and failed to show which prescriptions were illegitimate. In a drug conspiracy
case, defendants “may be held jointly and severally liable [in a money judgment] for
all of the foreseeable proceeds of the conspiracy.” United States v. Van Nguyen, 602
F.3d 886, 904 (8th Cir. 2010), cert. denied, 131 S. Ct. 897 (2011).4 The district
4
Accord United States v. Roberts, 660 F.3d 149, 165-66 (2d Cir. 2011), cert.
denied, 132 S. Ct. 1640 (2012); United States v. Pitt, 193 F.3d 751, 765 (3d Cir.
1999); United States v. Candelaria-Silva, 166 F.3d 19, 44 (1st Cir. 1999), cert.
denied, 529 U.S. 1055 (2000); United States v. McHan, 101 F.3d 1027, 1043 (4th Cir.
1996), cert. denied, 520 U.S. 1281 (1997).
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court’s determination of the amount subject to forfeiture “may be based on evidence
already in the record . . . and on any additional evidence or information submitted by
the parties and accepted by the court as relevant and reliable.” Fed. R. Crim P.
32.2(b)(1)(B); see 3 Wright & Welling, Federal Practice and Procedure § 573 (4th ed.
2011). Thus, the district court appropriately used the financial analyst’s unimpeached
Declaration to determine the proceeds of the conspiracy’s illegal dispensing activity.
We agree with the district court that the evidence at trial combined with the
Declaration were more than sufficient to support a money forfeiture judgment against
Solomon in the amount of the $991,114. The government was not required to prove
that individual prescriptions were illegitimate when the evidence created a
reasonable, indeed an overwhelmingly strong inference that all prescriptions
submitted to TMS by the Houston doctors were illegitimate.
B. Dr. Elder. Dr. Elder argues that he cannot be held jointly and severally
liable for any forfeiture because there was no evidence that he obtained any proceeds
or profited in any way from the conspiracy. This contention ignores controlling
forfeiture authority. A conspirator’s forfeiture liability is not limited to the amount
the government proves he personally obtained. He is jointly and severally liable to
forfeit the proceeds of the criminal enterprise. As we explained in United States v.
Simmons, 154 F.3d 765, 770 (8th Cir. 1998), citing Pinkerton v. United States, 328
U.S. 640, 646-47 (1946), this rule “is in accord with the traditional rules with respect
to criminal conspiracy, under which all members of a conspiracy are responsible for
the foreseeable acts of co-conspirators taken in furtherance of the conspiracy.”
Though Simmons involved a forfeiture under the RICO statute, 18 U.S.C.
§ 1963(a)(3), we applied this principle to a forfeiture under 21 U.S.C. § 853(a)(1) in
Van Nguyen, 602 F.3d at 904.
Under this principle, joint and several forfeiture liability is not unlimited -- a
conspirator is liable only for the conspiracy’s illegal proceeds that were reasonably
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foreseeable to him. Simmons, 154 F.3d at 770; accord United States v. Hurley, 63
F.3d 1, 22-23 (1st Cir. 1995), cert. denied, 517 U.S. 1105 (1996). But Dr. Elder did
not raise this issue in the district court or on appeal. The government’s forfeiture
Declaration included proceeds Rostie and TMS obtained using prescriptions written
by or in the name of Dr. Okose and Dr. Botto after Dr. Elder left STWC and made no
attempt to link Dr. Elder to the actions of these other doctors. But during this later
period, Dr. Elder continued to provide Solomon refill prescriptions and copies of
other prescriptions he wrote at WMC. Thus, the record provides no basis on which
to break out amounts of the total forfeiture judgment that were not reasonably
foreseeable proceeds of Dr. Elder’s participation in the overall conspiracy. Having
rejected the only forfeiture argument Dr. Elder raises on appeal, we must affirm the
$991,114 money judgment.5
III. Motion to Sever
Dr. Elder argues the district court abused its discretion in denying his motion
to sever his trial from Solomon’s because the jury could not be expected to
compartmentalize the evidence as it related to these separate defendants. “A district
court may sever the jointly indicted defendants’ trials if joinder appears to prejudice
a defendant or the government.” United States v. Jenkins-Watts, 574 F.3d 950, 967
(8th Cir. 2009), cert. denied, 130 S. Ct. 1915 (2010), citing Fed. R. Crim. P. 14(a).
Dr. Elder does not contend that he and Solomon presented antagonistic defenses.
Rather, he argues that the “immense, separate volume of evidence” against Solomon
5
We further note that two issues not raised on direct appeal -- whether Dr. Elder
should be jointly and severally liable for the entire forfeiture judgment, and if so,
whether the judgment violates the Eighth Amendment’s Excessive Fines Clause as
construed in United States v. Bajakajian, 524 U.S. 321 (1998) -- may not be ripe for
final disposition at this time. See United States v. Covey, 232 F.3d 641, 650 (8th Cir.
2000) (Loken, J., concurring); United States v. Van Brocklin, 115 F.3d 587, 601-02
& n.12 (8th Cir. 1997), cert. denied, 523 U.S. 1122 (1998).
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on the money laundering conspiracy charge, in which Dr. Elder was not involved, and
the “comparatively scant evidence” against him on the drug trafficking counts,
establish that he was found “guilty by association.”
“[D]enial of severance is not grounds for reversal unless clear prejudice and an
abuse of discretion are shown.” United States v. Payton, 636 F.3d 1027, 1037 (8th
Cir.), cert. denied, 132 S. Ct. 349 (2011). The prejudice must be “real,” that is,
“something more than the mere fact that he would have had a better chance for
acquittal had he been tried separately.” United States v. Mickelson, 378 F.3d 810,
817-18 (8th Cir. 2004). Dr. Elder cannot meet this heavy burden. The trial focused
primarily on a drug conspiracy in which both Dr. Elder and Solomon were major
participants. The evidence against Dr. Elder was far from “scant,” and much of the
evidence of Solomon’s money laundering also related to the drug conspiracy.
The judgments of the district court are affirmed.
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