United States v. Joseph Carozza , 608 F. App'x 532 ( 2015 )


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  •                                                                  FILED
    UNITED STATES COURT OF APPEALS                     JUL 24 2015
    MOLLY C. DWYER, CLERK
    FOR THE NINTH CIRCUIT                   U.S. COURT OF APPEALS
    UNITED STATES OF AMERICA,            No. 13-10172
    Plaintiff - Appellee,       D.C. No. 3:10-cr-00642-CRB-6
    Northern District of California,
    v.                                   San Francisco
    JOSEPH CAROZZA,
    ORDER
    Defendant - Appellant.
    UNITED STATES OF AMERICA,            No. 13-10179
    Plaintiff - Appellee,       D.C. No. 3:10-cr-00642-CRB-2
    Northern District of California,
    v.                                   San Francisco
    DANIEL JOHNSON,
    Defendant - Appellant.
    UNITED STATES OF AMERICA,            No. 13-10198
    Plaintiff - Appellee,       D.C. No. 3:10-cr-00642-CRB-1
    Northern District of California,
    v.                                   San Francisco
    CHRISTOPHER NAPOLI,
    Defendant - Appellant.
    Before: BYBEE, CALLAHAN, and OWENS, Circuit Judges.
    The memorandum disposition filed on April 14, 2015, is hereby amended
    and replaced by the amended memorandum disposition filed concurrently with this
    order. With these amendments, the panel has voted to deny the petition for panel
    rehearing and to deny the petition for rehearing en banc.
    The full court has been advised of the petition for rehearing en banc, and no
    judge of the court has requested a vote on the petition. Fed. R. App. P. 35.
    The petition for panel rehearing and petition for rehearing en banc are
    DENIED. No further petitions for rehearing or rehearing en banc shall be
    permitted.
    FILED
    NOT FOR PUBLICATION                                 JUL 24 2015
    MOLLY C. DWYER, CLERK
    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    UNITED STATES OF AMERICA,                        No. 13-10172
    Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-6
    v.                                             AMENDED
    MEMORANDUM*
    JOSEPH CAROZZA,
    Defendant - Appellant.
    UNITED STATES OF AMERICA,                        No. 13-10179
    Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-2
    v.
    DANIEL JOHNSON,
    Defendant - Appellant.
    UNITED STATES OF AMERICA,                        No. 13-10198
    Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-1
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by 9th Cir. R. 36-3.
    v.
    CHRISTOPHER NAPOLI,
    Defendant - Appellant.
    Appeal from the United States District Court
    for the Northern District of California
    Charles R. Breyer, Senior District Judge, Presiding
    Argued and Submitted March 10, 2015
    San Francisco, California
    Before: BYBEE, CALLAHAN, and OWENS, Circuit Judges.
    Defendants-Appellants Chris Napoli, Daniel Johnson, and Joseph Carozza
    (“Defendants”) appeal their convictions for conspiracy to distribute and possess
    with intent to distribute Schedule III and IV controlled substances in violation of
    
    21 U.S.C. § 846
    , and possession with intent to distribute a Schedule IV controlled
    substance in violation of 
    21 U.S.C. § 841
    (a)(1), (b)(2), arising out of the operation
    of an internet pharmacy. Napoli and Johnson also appeal their convictions for
    conspiracy to launder money in violation of 
    18 U.S.C. § 1956
    (a)(2)(A), (h).
    Defendants argue that the district court abused its discretion by excluding certain
    evidence at trial: the testimony of a DEA Administrator, a Congressional Research
    Service Report, and portions of a civil complaint filed by Defendants Napoli and
    Carozza seeking declaratory relief. Defendants also contend that the district court
    2
    erred in its formulation of jury instructions. Defendants further assert that the
    district court should have dismissed the indictment because DEA witnesses
    testified inaccurately before the grand jury. We have jurisdiction under 
    28 U.S.C. § 1291
    , and we affirm.
    1.       The district court did not abuse its discretion by excluding
    Defendants’ proffered evidence at trial. Both the Fifth Amendment right to due
    process and the Sixth Amendment right to compulsory process “guarantee[]
    criminal defendants a meaningful opportunity to present a complete defense.”
    United States v. Stever, 
    603 F.3d 747
    , 755 (9th Cir. 2010) (internal quotation
    marks omitted). The admissibility of proffered evidence is reviewed under an
    abuse of discretion standard. United States v. Orm Hieng, 
    679 F.3d 1131
    , 1141
    (9th Cir. 2012). “‘We may affirm the district court’s evidentiary ruling on any
    grounds supported by the record.’” 
    Id.
     (quoting United States v. Ibarra-Pino, 
    657 F.3d 1000
    , 1005 (9th Cir. 2011)). Even “where the district court did not explicitly
    exclude the evidence under Rule 403, the appellate court may affirm the district
    court based on Rule 403.” United States v. Blaylock, 
    20 F.3d 1458
    , 1464 (9th Cir.
    1994).
    The district court could have concluded that the probative value of the
    excluded evidence was “substantially outweighed by a danger of . . . unfair
    3
    prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
    needlessly presenting cumulative evidence.” Fed. R. Evid. 403. Defendants assert
    that the proffered evidence had a tendency to demonstrate the reasonableness of
    their subjective belief that their conduct complied with the statute. However, the
    precise issue for the jury’s consideration was not Defendants’ belief about the law,
    but rather Defendants’ good faith belief that a physician was issuing prescriptions
    in the usual course of professional practice and for a legitimate medical purpose.
    See United States v. Feingold, 
    454 F.3d 1001
    , 1007–08 (9th Cir. 2006). Thus, the
    evidence had limited probative value. Furthermore, the district court could have
    concluded that government officials’ statements about the law and Defendants’
    self-serving statements in the civil complaint would obfuscate the issues for the
    jury. Given these circumstances, we cannot say that the exclusion of evidence was
    an abuse of discretion.
    Defendants’ reliance on United States v. James, 
    169 F.3d 1210
     (9th Cir.
    1999) (en banc), is misplaced. James did not hold that all corroborating
    documentary evidence must be admitted in every case. Nor did James displace the
    general rule that the district court may exclude evidence under Federal Rule of
    Evidence 403.
    But even if the district court erred by excluding this evidence, any error was
    4
    harmless beyond a reasonable doubt. See United States v. Pineda-Doval, 
    614 F.3d 1019
    , 1033–34 (9th Cir. 2010). First, upon review of the proffered testimony by
    the DEA Administrator and the Congressional Research Service Report, this
    evidence appears largely unfavorable to Defendants. Moreover, there was
    overwhelming evidence at trial disproving Defendants’ good faith belief that their
    physicians acted with a legitimate medical purpose and within the usual bounds of
    medical practice. Defendant Carozza approved hundreds of prescriptions daily.
    Carozza continued to prescribe medications in this manner even after being
    interviewed by the DEA. Furthermore, the online questionnaire had no mechanism
    to confirm the accuracy of the information being provided; did not ask for any
    medical records; did not provide for follow-up contact; did not permit customer
    consultation with a doctor; and did not require customers to submit a valid form of
    identification. Each Defendant, aware of the preceding facts, stood to gain
    hundreds of thousands of dollars. Thus, there was overwhelming evidence that
    Defendants lacked a good faith belief that their physicians’ conduct was for a
    legitimate medical purpose or was within the scope of professional standards.
    2.    The district court did not err in its formulation of the jury instructions.
    Whether jury instructions omit or misstate elements of a statutory crime or
    adequately cover a defendant’s proffered defense are questions of law reviewed de
    5
    novo. See United States v. Hofus, 
    598 F.3d 1171
    , 1174 (9th Cir. 2010); United
    States v. Morsette, 
    622 F.3d 1200
    , 1201 (9th Cir. 2010) (per curiam). A district
    court’s formulation of jury instructions is reviewed for an abuse of discretion. See
    Hofus, 
    598 F.3d at 1174
    . “The adequacy of jury instructions is determined by
    examining them as a whole.” United States v. Ibarra-Alcarez, 
    830 F.2d 968
    , 973
    (9th Cir. 1987) (citing United States v. Hayes, 
    794 F.2d 1348
    , 1351 (9th Cir.
    1986)). “It is not error to refuse a proposed instruction if the other instructions,
    when viewed in their entirety, cover that theory.” 
    Id.
     “[S]o long as the instructions
    fairly and adequately cover the issues presented, the judge’s formulation of those
    instructions or choice of language is a matter of discretion.” United States v.
    Melvin, 
    91 F.3d 1218
    , 1224 (9th Cir. 1996) (internal quotation marks omitted).
    The district court did not err by instructing the jury that the government was
    not required to prove that Defendants knew they were violating the law. None of
    the underlying crimes charged required that Defendants know that they were
    violating the law. See 
    21 U.S.C. §§ 841
    (a)(1), (b)(2), 846; 18 U.S.C.
    6
    § 1956(a)(2)(A), (h).2 A conspiracy charge does not require that the defendant
    know that she is violating the law unless the underlying crime so requires. United
    States v. Baker, 
    63 F.3d 1478
    , 1493 (9th Cir. 1995); see also United States v.
    Hubbard, 
    96 F.3d 1223
    , 1229 (9th Cir. 1996) (“[A] federal conspiracy conviction
    does not require a greater level of criminal intent than a conviction on the
    substantive count.”). Nor is an aider and abettor required to have specific
    knowledge that her assistance is illegal. United States v. Delgado, 
    357 F.3d 1061
    ,
    1068 (9th Cir. 2004); cf. United States v. McDaniel, 
    545 F.2d 642
    , 644 (9th Cir.
    1976).
    The district court did not err by instructing the jury that Defendants’ belief
    that they were in compliance with the law or that the government lacked the
    authority to enforce the law in a particular way was not, standing alone, a defense.
    Defendants’ beliefs about the law as written were irrelevant, as the precise issue for
    the jury’s consideration was whether Defendants believed that their physicians
    2
    Unlike other sections of the federal money laundering statute,
    § 1956(a)(2)(A) does not require the defendant know that the property involved
    constitutes the proceeds of unlawful activity. Compare 
    18 U.S.C. § 1956
    (a)(2)(A),
    with 
    id.
     § 1957(a); see also United States v. Turman, 
    122 F.3d 1167
    , 1169 (9th Cir.
    1997) (holding that under a different statute, 
    18 U.S.C. § 1957
    , the government
    was required to prove the defendant knew the laundered funds were derived from
    illegal activity), abrogated on other grounds by Henderson v. United States,
    — U.S. —, 
    133 S. Ct. 1121
     (2013).
    7
    were issuing prescriptions in the usual course of professional practice and for a
    legitimate medical purpose. See Feingold, 
    454 F.3d at
    1007–08. Likewise,
    Defendants’ purported belief that the DEA lacked authority to enforce the law in a
    particular way would be irrelevant and not a defense to the crimes charged. See
    Cheek v. United States, 
    498 U.S. 192
    , 204–06 (1991) (district court properly
    instructed jury to disregard the defendant’s assertion that tax laws were
    unconstitutional).
    The district court’s jury instructions did not permit the jury to convict
    Defendants based on a physician’s mere malpractice. The district court was
    acutely aware of this risk, and added the express instruction: “It is not enough for
    the United States to prove that a practitioner committed malpractice, intentional or
    otherwise.”
    The district court did not err by refusing to instruct the jury regarding
    in-person examinations, the Ryan Haight Act, or the distinction between lay
    people, and professional physicians and pharmacists. Rather, the district court
    properly instructed the jury to consider all of the evidence in determining whether
    Defendants acted in good faith. See Hofus, 
    598 F.3d at 1174
    .
    The district court also had a sufficient basis to instruct the jury that it could
    find Defendants acted knowingly if the jury found that Defendants were
    8
    deliberately ignorant. See United States v. Heredia, 
    483 F.3d 913
    , 918 (9th Cir.
    2007) (en banc).
    3.     Finally, any misstatements by the DEA agents before the grand jury
    were rendered harmless by the petit jury’s guilty verdict. “[A] petit jury’s verdict
    of guilty beyond a reasonable doubt demonstrates a fortiori that there was probable
    cause to charge the defendants with the offenses for which they were convicted.”
    United States v. Mechanik, 
    475 U.S. 66
    , 67 (1986); see also United States v.
    Bingham, 
    653 F.3d 983
    , 998–99 (9th Cir. 2011). Defendants contend that under
    Bank of Nova Scotia v. United States, we may reverse their convictions if we find
    “[a] violation substantially influenced the grand jury’s decision to indict or if there
    is grave doubt that the decision to indict was free from the substantial influence of
    such violations.” 
    487 U.S. 250
    , 256 (1988) (internal quotation marks omitted).
    But where, as here, a district court denies a defendant's motion (whether before or
    after trial) to dismiss the indictment, and the defendant is subsequently convicted
    beyond a reasonable doubt, the Bank of Nova Scotia standard does not apply on
    appeal; rather, “Mechanik controls and the conviction establishes that the error was
    harmless.” United States v. Navarro, 
    608 F.3d 529
    , 540 (9th Cir. 2010). Thus, any
    errors in the grand jury proceedings were harmless.
    AFFIRMED.
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