United States v. Gracie

United States Court of Appeals
For the First Circuit
No. 12-2004
UNITED STATES OF AMERICA,
Appellee,
v.
REGINALD S. GRACIE, JR.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. John A. Woodcock Jr., U.S. District Judge]
Before
Torruella, Dyk* and Kayatta,
Circuit Judges.
Paul J. Garrity, on brief for appellant.
Renée M. Bunker, Assistant United States Attorney, and Thomas
E. Delahanty II, United States Attorney, on brief for appellee.
September 23, 2013
*
Of the Federal Circuit, sitting by designation.
KAYATTA, Circuit Judge. Reginald Gracie appeals his
sentence, arguing that the district court should have sentenced him
for accepting an illegal gratuity rather than for demanding a
bribe. We affirm.
I. Background
Reginald Gracie, Jr., was a pharmacist. In 2005, he
became Director of Operations1 for the short-lived PIN Rx, a
mail-order pharmacy that was wholly owned and operated by the
Penobscot Indian Nation and which did a substantial amount of
questionable business filling prescriptions for online pharmacies.
When PIN Rx's Pharmacist in Charge resigned from that role over
concerns that these transactions threatened her license, Gracie
took over that position. Thereafter, Gracie admits that he began
accepting payments "from Internet pharmacy sites" for whose
customers PIN Rx filled orders.
Gracie was eventually indicted on charges relating to
these payments. On February 17, 2012, Gracie pled guilty to three
counts: two tax-related counts not at issue here, and Count 22,
which charged him with "soliciting and accepting kickbacks [in
violation of] 18 U.S.C. § 666(a)(1)(B)." Specifically, Count 22
alleged that Gracie "corruptly solicit[ed], demand[ed], accept[ed]
and agree[d] to accept a thing of value, namely [$8,760] deposited
1
In the district court, Gracie's counsel referred to him as
the CEO of PIN Rx. The distinction has no bearing on our analysis.
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into his personal bank account . . . from representatives of
["Company F"] . . . intending to be influenced and rewarded in
connection with the filling of drug orders by PIN RX for the
customers of ["Company F"], which transactions . . . were valued at
$5,000 or more."
At sentencing, the parties disputed which guideline the
district court should use to determine Gracie's base offense level.
The dispute arose because the guidelines implicitly presume that
section 666(a)(1)(B) criminalizes both the receipt of bribes and
the receipt of gratuities. The Guidelines' index manifests this
presumption by directing a court sentencing for a violation of
section 666(a)(1)(B) to two different guidelines: section 2C1.1
("Offering, Giving, Soliciting, or Receiving a Bribe . . . .") and
section 2C1.2 ("Offering, Giving, Soliciting, or Receiving a
Gratuity"). U.S. Sentencing Guidelines Manual ("U.S.S.G.")
§§ 2C1.1; 2C1.2. The U.S. Sentencing Guidelines Manual provides
that when several guidelines are listed in the index for a given
statute or subsection, the sentencing court must "determine which
of the referenced guideline sections is most appropriate for the
offense conduct charged in the count of which the defendant was
convicted." U.S.S.G. § 1B1.2, cmt.n.1.
By selecting section 2C1.1, for bribery, as the most
appropriate guideline, the district court calculated a base offense
level three points higher than would have been the case had the
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court selected section 2C1.2 as the most appropriate guideline.
Compare U.S.S.G. § 2C1.1(a), with id. § 2C1.2(a). Employing that
base offense level, the district court sentenced Gracie to forty-
six months imprisonment on Count 22. Having preserved his right to
appeal any sentence in excess of eighteen months of imprisonment,
Gracie appealed. He contends that the district court erred in
selecting the bribery guideline. For the following reasons, we
disagree.
II. Standard of Review
Although we had previously treated a district court's
choice of guideline as predominantly a question of fact to be
reviewed for clear error, United States v. Mariano, 983 F.2d 1150,
1158 (1st Cir. 1993), we recently clarified that "[w]e review the
district court's choice of guidelines . . . de novo, and its
attendant factual determinations for clear error." United States
v. Almeida,710 F.3d 437, 439 (1st Cir. 2013); accord United States
v. Ihenacho, 716 F.3d 266, 276 (1st Cir. 2013).
III. Analysis
A. Gracie pled to soliciting and receiving a bribe,
not a gratuity.
When the district court sentenced Gracie, it was possible
to construe 18 U.S.C. § 666(a)(1)(B) as making it unlawful to
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solicit or to accept either bribes or gratuities.2 See United
States v. Ganim, 510 F.3d 134, 150 (2d Cir. 2007) (describing
section 666(a)(1)(B) as prohibiting the acceptance of both bribes
and gratuities); United States v. Zimmermann, 509 F.3d 920, 927
(8th Cir. 2007) (same); cf. Mariano, 983 F.2d at 1158 (noting that
section 666(a)(2) "seem[ed] to virtually mirror" the language of 18
U.S.C. § 201(b)(1), which prohibits bribing federal officials). A
decision subsequent to Gracie's sentencing and appeal, discussed
infra, has clarified that section 666(a)(1)(B) does not apply to
gratuities. See United States v. Fernandez, 722 F.3d 1 (1st Cir.
2013). In evaluating Gracie's claims, however, we first consider
whether his actions, at the time of sentencing, could reasonably be
interpreted as accepting either a gratuity or a bribe.
The essential distinction between a bribe and a gratuity
is that a bribe requires a quid pro quo, the exchange of something
of value for influence over some official conduct of the recipient.
See Mariano, 983 F.2d at 1158. The indicted offense to which
2
Section 666(a) provides in pertinent part:
Whoever . . . being an agent of an organization, or . . .
Indian tribal government, or any agency thereof [which
receives more than $10,000 in a year in federal benefits]
. . . corruptly solicits or demands for the benefit of
any person, or accepts or agrees to accept, anything of
value from any person, intending to be influenced or
rewarded in connection with any business, transaction, or
series of transactions of such organization, government,
or agency involving any thing of value of $5,000 or more
. . . shall be fined under this title, imprisoned not
more than 10 years, or both.
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Gracie pled guilty plainly charged a quid pro quo. Gracie was
indicted for "corruptly solicit[ing], demand[ing], accept[ing] and
agree[ing] to accept [payments totaling $8,760] intending to be
influenced in connection with the filling of drug orders . . . ."
When a person with the power to do or not do something demands a
payment from the beneficiary of the exercise of that power as a
condition for continuing to do so, the payment is not gratuitous.
Cf. United States v. Alfisi, 308 F.3d 144, 151 (2d Cir.
2002)(noting, in a case under 18 U.S.C. § 201, that even if
payments were to assure that an inspector carried out his duties
accurately, they were nonetheless bribes).
The circumlocutious manner in which Gracie
recharacterizes his conduct reinforces the conclusion that the
indictment charges the solicitation and receipt of bribes. Gracie
argues that he took payments "as a reward for staying in his
position" and "continuing to risk his license in a questionable
business." This description is revealing for its omission of the
actual charge that Gracie "demand[ed] and accept[ed]" the payment.
We infer from such strained avoidance that Gracie recognizes his
argument as an equally strained interpretation of the facts. It is
also revealing for its concession that he demanded and took the
funds not for a past event, but for "continuing" to do what the
payee desired (stay on the job and risk his license by filling
online drug orders). If a bus driver demands a tip from his
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passengers for "continuing" to drive the bus, the resulting
payments are hardly gratuitous. So, too, if Gracie demanded
payments from an online prescription drug seller for, as he argues,
"continuing" to perform his job of filling drug orders, the
resulting payments were the seller's "this" exchanged for Gracie's
"that."
Taking a slightly different tack, Gracie strings together
the following argument: the background notes to sections 2C1.1 and
2C1.2 discuss only those bribe and gratuity recipients who are
"public officials;"3 Gracie is not a public official; guidelines
section 2E5.1 distinguishes bribes from gratuities (in the context
of employee welfare benefit plans and labor unions) without
reference to public officials, defining bribes as payments for
3
Section 2C1.1's background note provides in part:
[t]his section applies to a person who offers or gives a
bribe for a corrupt purpose, such as inducing a public
official to participate in a fraud or to influence such
individual's official actions, or to a public official
who solicits or accepts such a bribe. The object and
nature of a bribe may vary widely from case to case
. . . . Consequently, a guideline for the offense must be
designed to cover diverse situations.
U.S.S.G. § 2C1.1 cmt. background. Section 2C1.2's note states:
"This section applies to the offering, giving, soliciting, or
receiving of a gratuity to a public official in respect to an
official act." U.S.S.G. § 2C1.2 cmt. background.
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official action, and gratuities as everything else;4 Gracie's
decision to continue working was not an official action, so under
section 2E5.1, the payment would be a gratuity; therefore the court
should have applied section 2C1.2.
Gracie does not argue that the district court should have
actually sentenced him under section 2E5.1.5 Nor does he claim
that because his scheme involved no public officials, both sections
2C1.1 and 2C1.2 (which appear under the heading "Offenses involving
Public Officials and Violations of Federal Election Campaign Laws")
were inapposite.6 (In any event, the Guidelines themselves are
specific. They cover both (1) situations where “the defendant was
a public official” and (2) “otherwise.” See U.S.S.G. §§ 2C1.1(a),
2C1.2(a).) And there is no dispute that Gracie was not sentenced as
a public official. See U.S.S.G. §§ 2C1.1(a)(1), 2C1.2(a)(1).
Rather, his argument boils down to the claim that because the
background notes to sections 2C1.1 and 2C1.2 don't fully capture
his conduct, the district court should have imported definitions of
4
The commentary to section 2E5.1 defines a bribe as "the
offer or acceptance of an unlawful payment with the specific
understanding that it will corruptly affect an official action of
the recipient," and a gratuity as "the offer or acceptance of an
unlawful payment other than a bribe." U.S.S.G. § 2E5.1 cmt. n.1,
2.
5
Section 2E5.1 focuses on giving or taking "bribes and other
unlawful gratuities involving employee welfare or pension benefit
plans, or labor organizations." U.S.S.G. § 2E5.1 cmt. background.
6
If Gracie meant to raise such an argument, he did so far
too obliquely, and far too late. Cf. Mariano, 983 F.2d at 1158 n.9.
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bribe and gratuity from a different guidelines section to select
the most appropriate guideline for his charge.
We have previously cautioned against mixing and matching
guidelines for different crimes, as each set of guidelines tends to
function as a unit with its own "tradeoffs and specifications."
United States v. Brennick, 134 F.3d 10, 15 (1st Cir. 1998); see
also U.S.S.G. § 1B1.1, cmt. n.2. There was no need for the
district court to do so here. Although sections 2C1.1 and 2C1.2 do
not define "bribe" and "gratuity" as explicitly as section 2E5.1
does, the distinction has been well defined in the case law. See
Mariano, 983 F.2d at 1159 (discussing section 666(a)(2)); see also
United States v. Sun-Diamond Growers of Cal., 526 U.S. 398, 404-05
(1999)(construing 18 U.S.C. § 201). There was no need to look to
section 2E5.1, which applies to significantly different statutes,
to discern the difference.
Even if we followed Gracie's lead, however, he is again
defeated by the indictment. Gracie was charged with taking money
while "acting as the pharmacist-in-charge and director of
operations of PIN Rx," "intending to be influenced and rewarded in
connection with the filling of drug orders by PIN RX . . . ." The
indictment explained that "the Pharmacist in Charge is responsible
legally and professionally for all activities related to the
practice of pharmacy within the retail drug outlet." Therefore,
Gracie was charged with accepting money to be influenced in and
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rewarded for his "official acts" as section 2E5.1 uses that term.
Cf., e.g., United States v. Lopreato, 83 F.3d 571, 575 (2d Cir.
1996)(pension fund trustee and co-chairman took bribes under
section 2E5.1 for agreeing and voting to invest the fund's money in
particular securities).
To be sure, the background commentary to sections 2C1.1
and 2C1.2 does not explicitly describe an individual who accepts
payments but is not a public official. However, each guideline is
written to cover multiple offenses. Cf. U.S.S.G. Ch. 1, Pt. A
Subpt. 1(4)(a)(noting that the guidelines resemble a "real offense"
system in part because "the hundreds of overlapping and duplicative
statutory provisions that make up the federal criminal law forced
the Commission to write guidelines that are descriptive of generic
conduct rather than guidelines that track purely statutory
language.") Section 666 is not the core statute for which sections
2C1.1 and 2C1.2 were written. See U.S.S.G. § 2C1.1 cmt. (stat.
provisions); U.S.S.G. § 2C1.2 cmt. (stat. provisions). Nonetheless,
the Sentencing Commission made clear in the Statutory Index that it
viewed sections 2C1.1 and 2C1.2 as the most appropriate options for
section 666(a)(1)(B), even though the statute clearly covers more
than public officials. Courts need only select the "most
appropriate" of the available guidelines. U.S.S.G. § 1B1.2 cmt.
n.1. As Gracie neither argues on appeal that sections 2C1.1 and
2C1.2 were both inapposite nor tries to resuscitate his request for
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an "outside the heartland" departure or variance,7 nothing more is
required here to conclude that the district court chose correctly.
B. Recent changes in our case law provide Gracie
with no assistance on this appeal.
In reaching our conclusion, we have also considered two
recent decisions not addressed by Gracie: United States v.
Almeida, 710 F.3d 437 (1st Cir. 2013), and United States v.
Fernandez, 722 F.3d 1 (1st Cir. 2013). We have done so because
both cases were decided after Gracie filed his brief (although we
note that the government cited Almeida, and Gracie could have
addressed it had he filed a reply). In any event, however, neither
case helps Gracie.
Almeida clarified that in determining which guideline to
apply at sentencing, sentencing courts should look only at the
conduct as charged in the indictment, not at, for example,
uncharged conduct later proved at trial. 710 F.3d 437, 441-42 (1st
Cir. 2013).8 Almeida therefore means that the district court
7
U.S.S.G. Ch. 1 Pt. A (4) explains that:
[t]he Commission intends the sentencing courts to treat
each guideline as carving out a "heartland," a set of
typical cases embodying the conduct that each guideline
describes. When a court finds an atypical case, one to
which a particular guideline linguistically applies but
where conduct significantly differs from the norm, the
court may consider whether a departure is warranted.
8
This rule does not apply where a defendant stipulates in a
plea agreement to an offense more serious than that charged in the
count of conviction, Almeida, 710 F.3d at 441, but the government
has not tried to invoke that exception.
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should not have looked, as it did, at the version of events brought
forth at Gracie's change of plea hearing in choosing the bribery
guideline. But it would equally have erred had it relied on
Gracie's strained recharacterization of what transpired. The
conduct charged in the indictment was clearly the solicitation and
acceptance of bribes. Under Almeida, the bribery guideline is
therefore still the correct choice.
In United States v. Fernandez, 722 F.3d 1, 25 (1st Cir.
2013), we held that section 666(a)(1)(B) does not criminalize
gratuities. That holding actually adds more weight to the holding
that we reach here today; under Fernandez, it is clear that Gracie
could not have been convicted under section 666(a)(1)(B) if he only
accepted gratuities. We nevertheless need not rely on Fernandez,
because, as explained above, however one reads the statute, the
indictment itself alleged only acts of bribery.
III. Conclusion
For the foregoing reasons, we affirm the judgment of
the district court.
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