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United States v. Michael

United States District Court, W.D. Kentucky, Louisville

May 2, 2017



          Charles R. Simpson III, United States District Court Senior Judge

         This matter is before the court on motion of the defendants, Philip E. Michael, II (“Michael”), to dismiss Counts 2 and 3 of the Second Superseding Indictment (“SSI”).[1], [2]

         The SSI charges Michael, Meds 2 Go, and Euton Laing, [3] with Conspiracy to Violate the Federal Food, Drug, and Cosmetic Act by misbranding drugs (Count 2), and Conspiracy to Distribute Misbranded Drugs (Count 3). The defendant has moved to dismiss these counts for insufficiency of the indictment, citing Hamling v. United States, 418 U.S. 87, 177 (1974) and United States v. Superior Growers Supply, Inc., 982 F.2d 173, 176 (6th Cir. 1992).

         An indictment must provide a “plain, concise, and definite written statement of the essential facts constituting the offense charged.” Fed.R.Crim.P. 7(c). The purpose of an indictment is “to inform the defendant of the nature of the accusation against him.” Russell, 369 U.S. at 767 (quoting United States v. Hess, 124 U.S. 483, 487 (1888)). “The Federal Rules of Criminal Procedure, 18 U.S.C.A., were designed to eliminate technicalities in criminal pleading and are to be construed to secure simplicity in procedure. Rule 2, F.R.Crim.Proc.” United States v. Debrow, 346 U.S. 374, 376 (1953). As explained by the Supreme Court as early as 1895, an indictment need not be a literary work of art:

T]he true test is, not whether it might possibly have been made more certain, but whether it contains every element of the offense intended to be charged, and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction. Evans v. U.S., 153 U.S. 584, 587, 588, 14 Sup. Ct. 934; Batchelor v. U.S., 156 U.S. 426, 15 Sup. Ct. 446.

Cochran v. United States, 157 U.S. 286, 290, 15 S.Ct. 628, 630, 39 L.Ed. 704 (1895).

         The indictment must be read as a whole, accepting the factual allegations as true, and construing those allegations in a practical sense with all the necessary implications. United States v. Reed, 77 F.3d 139, 140 n. 1 (6th Cir.1996) (en banc). An indictment is to be construed liberally in favor of its sufficiency. United States v. Davis, 306 F.3d 398, 411 (6th Cir.2002). United States v. McAuliffe, 490 F.3d 526, 531 (6th Cir. 2007). The Sixth Circuit further discussed challenges similar to those made by the defendants in this case:

Here, defendant contends that Counts One and Two of the indictment, which allege violations of the mail fraud statute, 18 U.S.C. § 1341, do not adequately set forth two of the requisite elements of that offense: (1) that defendant acted willfully with an intent to defraud, and (2) that a “material” misrepresentation was made. The mail fraud statute prohibits the use of the mails by any person “having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises....” 18 U.S.C. § 1341. “Mail fraud consists of (1) a scheme or artifice to defraud; (2) use of mails in furtherance of the scheme; and (3) intent to deprive the victim of money or property.” United States v. Turner, 465 F.3d 667, 680 (6th Cir.2006). Materiality of falsehood is a requisite element of mail fraud. Neder v. United States, 527 U.S. 1, 25, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999). The misrepresentation “must have the purpose of inducing the victim of the fraud to part with the property or undertake some action that he would not otherwise do absent the misrepresentation or omission.” United States v. Daniel, 329 F.3d 480, 487 (6th Cir.2003). A misrepresentation “is material if it has a natural tendency to influence, or is capable of influencing, the decision of the decision-making body to which it was addressed.” Neder, 527 U.S. at 16, 119 S.Ct. 1827 (internal citation and quotation marks omitted).
The requisite intent to defraud requires “an intent to deceive or cheat for the purpose of either causing a financial loss to another or bringing about a financial gain to oneself.” Sixth Circuit Pattern Jury Instruction 10.01(2)(E); see also United States v. Frost, 125 F.3d 346, 371 (6th Cir.1997). With regard to both elements *532 at issue, an indictment is not fatally insufficient for its failure to allege these elements in haec verba, if the facts alleged in the indictment warrant the inference of such elements, i.e., materiality and intent to defraud. United States v. McGough, 510 F.2d 598, 602 (5th Cir.1975) (materiality); United States v. Hoag, 823 F.2d 1123, 1126 (7th Cir.1987) (intent to defraud).

United States v. McAuliffe, 490 F.3d at 531-32.

         Michael challenges the sufficiency of Counts 2 and 3 on the ground that these counts fail to allege that the defendants intended to defraud anyone, and fail to allege that any prescription drug was “misbranded.” He also urges that Counts 2 and 3 are multiplicious.

         First, on its face, it does not appear that Counts 2 and 3 are multiplicious, as they purport to charge 2 separate conspiracies, one involving business conducted through Meds 2 Go, Inc. from 2010 to 2012 (Count 2) and one involving business conducted through Aracoma Pharmacy beginning in June 2009 and continuing to May 2012 (Count 3). Whether the United States proves two separate conspiracies remains to be seen. However, for purposes of assessing the SSI's sufficiency, we find that it meets the standard for notice to the defendant and avoidance of double jeopardy. Hamling, supra.

         As to the defendants challenges that these counts fail to allege that Michael intended to defraud anyone and fail to allege that any prescription drug was “misbranded, ” we first reiterate that the indictment must be read as a whole.

         Various prescription drugs are identified in the SSI, such as Soma, Ultram, and Fioricet. SSI, ¶¶ 34-36. Counts 2 and 3 allege that prescription drugs dispensed by Michael without a valid prescription ...

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