16 -30 73 -cr

Uni ted Sta tes v . S cul ly UNITED STATES COURTOF APPEAL S F O R T H E S E C O N D C IR C U IT August Term, 2017 (Argued: August 24, 2017 Dec ided: Dece mber 13, 2017)

Docket No. 16-3073- cr

U N I T E D S T A T E S O F A M E R I C A , Appellee,

— v. — W I L L I A M S C U L L Y , AKA Li am Scull y Defendant-Appellant, S H A H R A D R O D I L A M E H ,

Defendant

.

B e f o r e : P O O L E R and L Y N C H , Circuit Judges , and C O G A N , District Judge. *

Judge Brian M. Cogan, of the United States District Court for the Eastern D istrict * of New Yor k, sitting by designation.Wil li am Scull y appeals from a conviction in the United States D istrict

Court for the EasternDistrict of New York (Ar thur D. S patt, Judge ) for mail and wire fraud and cons piracy to commi t the same; conspiracy to defr aud the United States through the introduction of m isbranded d rugs into interstate commerce; introduction of m isbranded d rugs into interstate commerce; re ceipt of misbranded drugs into i nterstate commerce and delivery there of for pay; introduction of unapproved drugs into interstate commerce; and unlicense d wholesale distributi on of pre scription drugs. The principal issue on appeal is whether the district court erre d in excluding evidence related to Scully’s advi ceof-counsel defe nse. Be cause we find that it was error to exclude that evidence, the judgment of the district court is VACATED and REMAND ED for further procee dings consistent with thi s opinion.

K E N N E T H M. A B E L L , Assistant United States Attorney (Amy Busa and Char les P. Kell y, Assistant United States Attorneys, on the brief

), forBridget M. Rohde, Acting Unit ed States Attorney for the Eastern D istrict of New York, for Appellee

. S C O T T A. R E S N I K (Michael M. R osens aft, on the brief ), Katten Muchin Rosenman LLP, New York, NY, for DefendantAppellant.

G E R A R D E. L Y N C H , Circuit Judge : Wil li am Scull y appeals from a judgment of convicti on enter ed following a five-week jury trial i n the United States D istrict Court for the Easter n District of New York (Ar thur D. S patt, Judge ). The jury found Scully gui lty of m ailand wire fraud and con spiracy to commi t the same in viol ation of 18 U.S.C. §§ 1341, 1343, and 1349; cons piracy to

2defraud the Un ited States through the introduction of mi sbran ded drugs into

interstate commerce in violat ion of 18 U.S.C. § 371; introduction of mi sbran ded drugs into interstate commerce in violat ion of 21 U.S.C. §§ 331(a) and 333(a)( 2);

rece ipt of m isbranded d rugs into interstate commerce and delivery ther eof for pay in viol ation of 21 U.S.C. §§ 331(c) and 333(a)(2); introduction of unapprove d drugs into interstate commerce in violat ion of 21 U.S.C. §§ 331(d) and 333(a)( 2); and unlicensed wholesale distribution of prescription drugs in violat ion of 21 U.S.C. §§ 331(t), 333(b )(1)(D), and 355. H e was se ntenced pr incipal ly to 60 m onths in prison. The main i ssue on app eal is whether the district court prope rly excluded evidence r elating t o Scully’s advi ce-of-counse l defense. Be cause we find that the evidence was admissible and its exclusion was not harmless err or, we VAC ATE the district court’s judgm ent and REMAND for further p rocee dings consistent with thi s decision. 1

We nee d not address Scully’s cl aim that the govern ment’s pres entation of two 1 later-dismi ssed counts unf airly prejudiced the jury against Scully because a new trial on remand wil l not i nclude these counts. 3BACKGROUND

The jury found Scully gui lty of al l charges r elevant to this appeal, so we consider the e vidence in the light m ost favorable to the gover nment. See United States v. Bouchard, 828 F.3d 116, 120 (2d Cir. 2016). I. The Rise and Fall of Pharmalogical Scully and Shahrad Rodi Lameh founded Pharmalogical, Inc., in 2002 or 2003 as equal owners, Scully running the company’s day-to-day operations and Lameh managing paym ents and pr oviding m ost of the capital. They i niti all y planned to acqui re ph armaceuticalproducts from manufacturers and sell those products to retail customers (such as doctor s, hospitals, and clini cs) as a wholesale distributor. To that end, Pharmalogi cal received a license fro m New York State authorizing it t o act as a wholesale distributor of pharmaceutical products. Pharmalogicalstruggled to turn a profit for seve ral years, and eventually Scull y decided to set the company on a ne w course: par all el importi ng. That is, rather than b uying prescription drugs and medical devices approved b y the U.S. Food and D rug Admini stration from the drug manufacturers, the co mpany would i mport foreign vers ions of FDA-appr oved products into the United States from Europe an distributors. Pharmalogicalcould

4purchase these dr ugs at reduced pr ices and then se llthem to customers in the

United States for far less than the going rate on the domestic market. Around the same tim e, the company also began d oing business under the name Medical Device King or MDK. Pharmalogi cal lau nched its parallel im porting business ar ound 2009 with purchase s of Botox from a C anadian distributor. One of the company’s first potential custom ers, D r. James Avellini, expr esse d concer n that the product labels did not i nclude a National Drug Code (“N DC ”) and requested as surance s 2 of the product’s legitim acy befor e he placed an o rder . Dr. Ave ll ini’s i nqui ry prompted Scully and Lameh to approach an attorne y, Richard Gertler, then of Thaler & Gertler, LLP, to rese arch whe ther it was legal to resell the im ported products in the United States. Gertler pr oduced an opinion letter dated May 27, 2009, indicat ing that “P harmalogicalhas not re ceived any corr esponde nce or notifi cation from the FDA advising that P harmalogicalis operating in viol ation of any of the provisions of the Fe deral Food, Dr ug and Cosmetic Act,” and that

The ND C is a unique number assigned to each dr ug that al lows for easy 2 identifi cation of the labeler of the pr oduct ( i.e. , manufacturer, re packager, or distributor); the product’s active ingredients, stre ngth, and dosage for m; and the package size and type. See21 C.F.R. § 207.33 (2016). 5“Pharmalogi cal has no reas on to believe that it i s not in fullcompli ance with the

FFDCA or any other s tatute or regulation.” App’x 400. The letter satisfied Dr. Avelli ni and others that Pharmalogicalwas authorized to sell Botox. Scully and Lam eh soon lear ned that the Can adian distributor wi th which they had be en placing Botox order s simply forwarded those or ders to a Eur opean distributor, which then shipped the pr oduct to Pharmal ogical in the United States. Pharmalogicaldecided to cut out the Canadian mi ddleman and began to place order s for Botox an d a second pr oduct, Mi rena intrauter ine devices, directly wi th the Europeancompany. They also began buying Mirena IUDs at an even lower p rice from a Turkish company that sold the devices with Fi nnish- and Turkish-language labels and packaging. Around that ti me, the FDA re sponded to an inqui ry from Scully regarding the sale of the Miren a IUDs, notifying hi m that foreign-made ver sions of FDA-appr oved drugs we re cons idered unappr oved new drugs. S cull y and Lameh asked Gertler to look into the matt er and Ger tler once again produced an opinion lett er, finding that “the importati on of Mirena . . . from Finland to the United States by Phar malogi cal, Inc., for resale to the en d user, would not violat e the cr iminal laws of the United States.” App’x 417.

6As had occurr ed with Botox, when a potential customer for the Mirena

IUDs, Planned Parenthood, r equested assur ances that the pr oduct was lawfulto purchase , Scully and Lam eh pr ovided Gertler’s Mirena letter. Planned Parenthood thenplaced a smallorder for Mirena IUDs, b ut then rejected an d returne d the orde r be cause the pr oduct labels were missing NDC s. Scully and Lameh never theless re solved to continue selli ng the Mirena IUDs to doctors . As the company’s sales of Botox an d Mirena IUDs increas ed, Scully and Lameh further e xpanded the ir business into oncology products. Gertler did not issue a separ ate legal opi nion regarding Pharmalogical ’s importati on and sale of oncology drugs. The first signs of trouble for Pharmalogi cal came i n May 2012, when FDA agents ex ecuted warr ants to searchPharmalogi cal’s offices. In respon se, Gertler and other lawyers , including Peter Tomao for Scully and Geoffrey Kaiser for Lameh, arran ged meetings with prosecutors, an d Pharmalogi cal ceased se ll ing oncology products. But Scullymade at least one shipment of oncology products after the s earch thr ough Taranis Medical Corp., a company that he had incorporated in De cember 2011 and for which he e xecuted written agre ements authorizing i t to use Pharmalogi cal’s wholesale li cense to distribute prescription

7drugs, all wi thout Lameh’s knowledge. Scully di d not consult Gertler or Lameh

befor e making the Taranis shipment. II. Indictment and Pre-Trial Motions Scully and Lam eh wer e indicted and arres ted in April 2014. The indictment all eged that the two men used Phar malogi cal (doing business as Medical Device Ki ng and MDK) and Taranis, to knowingly and wi ll full y im port fore ign versions of pres cription drugs and medical devi ces not appr oved by the FD A for use in the United States, and that they sold those pr oducts to customers under materiall y false and fraudulent prete nses. Af ter initi all y pleading not gui lty, Lameh enter ed into a cooperation agree ment with the gover nment and pled guil ty to conspiracy to commi t wire fraud and consp iracy to distribute misbranded drugs

. Prior to trial, Scully m oved to strike all counts based on violati ons of FDA regulations, as well as Count 72, charging fraudulent im portation and transpor tati on of goods, and C ount 73, charging trafficking i n counterfe it drugs. The district court denied the moti ons, but orde red the gove rnment to provide a billof particulars identifying the spe cific fraud al leged in each count and the misbranding all eged in each count. The gove rnment provided s uch a bill, and

8obtained a super seding 75-count indictm ent that added two new counts char ging

Scully wi th the introduction of unapproved new dr ugs into i nterstate commerce and the unlicensed wholesale distribution of prescr ipti on drugs. III. The Trial At trial, the govern ment call ed dozens of witnesses to pr ove that Scully purchase d pres cription drugs and medical devi ces with labels bearing instructions in foreign languages and lacki ng NDC s from fore ign distributors, misrepres ented those products to medical professionals as FDA-appr oved products with Engli sh-language labeling, and continued selling such pharmaceuticals through Taranis after gover nment official s raided Pharmalogi cal. The witnesse s included Lameh, who detail ed Pharmalogical ’s activi ties and Scully’s knowl edge r egarding the legalityof the company’s business model throughout the company’s history; some of the medical profes sionals who purchased p roducts from Scully and testifi ed to repr esen tati ons that Scully m ade about the pr oducts; and pharmaceutical company repr esen tati ves and gove rnment officials who testi fied to the importance of FDA appr oval and NDCs

.

9At the close of the gover nment’s case, S cull y moved to dism iss allcounts of

the super seding indictm ent for insufficient evidence. The district court denied that moti on exce pt as to Counts 72 and 73, which char ged fraudulent importati on and transpor tati on of goods and traff icki ng in counterfeit drugs, on which the court res erve d decision. Scully then advance d an advice-of-counsel defe nse, con tending that he lacked the requisite i ntent for all counts all eging fraud due to his good faith reliance on advice from Gertler and Tomao regar ding the legali ty of his conduct. The defen se called Gertler as its first witness, an d both parties questioned him extens ively on the nature of his relationship with Scully. I n particular, Gertler testified to hi s legal experienc e with health care matters, the information that Scully shared with himabout Pharmalogi cal’s business and pr oducts, the advice he pr ovided to Scull y and Pharmalogi cal, and Tomao’s role on Scully ’s legal team. The govern ment’s direct examination of Lameh and cross-e xaminati on of Gertler and Scully effectively undermined Scull y’s advice-of-counsel defe nse as to Gertler. In particul ar, the gover nment pres ented evidence that Scull y and Lameh only approached Ger tler for opinion letters after the y had purchase d

10products and poten tialcustomers raised c oncern s about the legiti macy of the

products sold by Pharmalogical ; that Scull y provided Gertler with false informati on, includi ng that the products sold by Pharmalogicalwere FD Aapproved an d that Pharmalogi cal foll owed all l aws and re gulati ons for importing their products into the United States; that Scully di d not inform Gertler that Pharmalogi cal woul d advertise FDA-ap proved pr oducts on its website, but sometim es pr ovide to customers foreign equivalents of those products that were not FDA-appr oved; and that Scully di d not inform Gertler that U.S. customs official s seized, sometimes per manently, some of the presc ription drugs Pharmalogi cal purchased fr om abroad be cause they wer e misbranded. The defen se did not call T omao to testi fy. Instead, they sought to introduce evidence of Tomao’s legal advice to Scull y through Scully’s own testim ony. The government ob jected to that course of action after the following exchange dur ing defens e counse l’s direct examinati on of Scully:

Q. Did Mr. Tomao also gi ve you an oral legal opinion as to his conclusi ons about your b usiness model? A. Yes. We s at down and met at Mr. Gertler’s office. We had a meeting. It was Rodi, myself, Mr. Gertler and Peter Tomao, and Peter had given his approval and said the business was completely legal. 11App’x 279. The gove rnment moved to strike, which the district court sustained as

to “[t]he statement that Peter gave us his appr oval.” Id. As the court ex plained:

When we h ave the alternative of his state of mind and the jury hear ing hearsay, ver y im portant testimony, the answer is no. I wi llnot permit that. . . . Bring in Mr. Tomao. . . . It i s extr emely prejudicialto the Government for you to all ow [Scully] t o give that testi mony. That overtakes the state of mind i n my opini on. . . . It i s not an ex ception to this hearsay rule which is that where you have a major figure, a very important figure which you do not bring in, I’mnot going to l et the hears ay come in, state of mi nd or other wise. Id. at 280–81. The followi ng day, Scully asked the district court to reconsider that ruling, noting that the defe nse offe red e vidence of Tomao’s advice to Scull y not for the truth of the matters asse rted, but to establish Scully’s state of mi nd as part of the advice-of-counsel defen se. Accor dingly, the defe nse ar gued, that evidence fell outside of the hears ay rule. SeeFed. R. Evid. 801(c)(2). On further reflection, the district court agreed that the testimony was not technicall y hears ay, but ruled that evidence of Tomao’s advice was never theless inadmissible under the balancing inquiry of Federal Rule of Evidence 403, noting: 12This testim ony is extre mely i mportant to the defense , and as the pr osecutor said, totall y prejudicialto the government. Whe re is Mr. Peter Tomao? We allknow he is a trial l awyer re adil y avail able. Why should I permit this tot all y prejudicialevidence for a state of mind where it is outweighed by the dange r of unfair prejudice? . . . So I rule that the evidence’s probative value is substantial ly outw eighed by the dange r of unfair prejudice. App’x 302. The cour t then again pointed out thatTomao was “readily avai lable” and “in court every day.” Id. After both s ides res ted their cases , the district court dism issed Counts 72 and 73 for lack of sufficient evidence, as well as Counts 6 and 22, ch arging mail and wire fraud r elating t o a Dr. R. D aniel Jacob, on the gover nment’s motion because Dr. Jaco b was unable to testify at trial . Although the court did not provide printed copies of its pro posed char ge to the parties, it read to them its propose d jury charge, including i ts instructions on the advice-of-counsel defe nse. The defen se’s on ly requested changes to the court’s instructions on the advice-ofcounsel defen se wer e to remove the te rm “affirmati ve” from descr ipti ons of the defens e and to change r efer ences to Scully ’s “crimes” to his “acts.” App’x 333–34. The govern ment raised no objections to those p ropose d changes, an d the court accepted them both.

13Later that day, however , the govern ment fil ed a letter motion objecting on

various grounds to the cour t’s propose d charge an d verdict shee t on the adviceof-counsel defe nse. S cull y’s counsel re sponded b y letter arguing that “[t]here is

no reas on or bas is for the Co urt to now rewrite the advice-of-couns el instruction it drafted and discussed to the satisfaction o[f] both parties” and ur ging the court to use the char ge “as agre ed during the Co urt’s charging confe rence .” G. App’x 56. The court denied the gove rnment’s motion as to the jury charge, and procee ded to instruct the jury on the 71 re maini ng counts in the super seding indictment. Of relevance to this appeal, the court instructed the jury on Scully’s advice-of-counsel defen se as follows:

Now I am goi ng to instruct you on the defens e of reliance on the advice of an attorne y. . . . In this regard, I instruct you that the defe ndant has the burdenof producing evidence to suppor t the defens e, but the burde n of proof in this case r emains on the government. I further instruct you that the defendan t has to satisfy the followi ng three elements to sustain the defens e of advice of counsel: First, that the defendant sought the advice of couns el honestly and in good faith prior to comm itt ing any of these cr imes;

14Second, that the de fendant fully and honestly placed all of the facts be fore his couns el, and; Third, that the defendant followed his counsel’s advice in good faith and hone stly believi ng it to be corre ct and intending that hi s actions are lawful. Each of these three r equirements must be satisfied. App’x 368–69. The court also descr ibed to the jury how it was to consider the advice-ofcounsel defen se on the verdict form:

As to each count you willbe aske d to rende r your verdict and mark the ver dict sheet. The ver dict sheet wil l l ist every count. And nex t to it . . . the words “n ot guil ty or guil ty.” . . . [I]f you find the defe ndant guil ty of that count, then you wil l be asked to deter mine if the defe nse of “advice of counsel” has be en es tablished. Next to the question on advice of counsel ther e willbe two markings, “established,” if the defense has be en established and “not es tablished” if the defense has not beenestablished. If you find the defendant guilty of the crime at issue, but also fi nd that the defens e of advice of counsel has be en es tablished, I advi se you that the defendan t wil l be acqui tted of that count. App’x 369–70.

15The jury deliberated for two days and return ed a guilty verdict on all

counts exce pt five counts of wire fraud. IV. Post-Trial Developments After the jury’s ve rdict, Scull y moved for a judgment of acqui ttalon all counts and, in the alternative, a new trial. The district court granted the motion only as to Counts 45 and 62, which concer ned the pur chase and s ale of Altu zan to the Hematology and Oncology Center o f Iowa. The court then enter ed judgment and sente nced Scully to 60 months i n prison. This appeal foll owed. 3 DISCUSSION On appeal, Scully does not ren ew his post-trial chall enge to all counts for lack of suffici ent evidence to pr ove criminalintent. Instead, Scully’s main 4 challenge on appeal focuses on two all eged impediments to the fair prese ntation and consideration of his advice-of-counse l defense, h is only defense at trial: the

In sentencing Scully, the districtcourt applied two sentencing enhance ments: 3 abuse of a pos iti on of trust under U.S.S.G. § 3B1.3 and a leaders hip role in a criminalactivi ty under U.S.S .G. § 3B1.1(c). Because we vacate S cull y’s conviction and remand for a new trial, we need not addr ess the propr iety of these enhance ments. Scully does raise legal chall enges to his convicti ons on ce rtain specific counts. 4 Those arguments ar e discussed in Part IIIbelow. 16district court’s exclusion of evidence of Tomao’s legal advi ce and the jury

instructions on the advice-of-counsel defe nse. We now turn to those issues

. I. Evidence of Tomao’s L egal Advice Scully argues that the district court abused its di scre tion when it excluded testimony and evidence relating to the legaladvice that Scull y rece ived from Tomao. The abuse of discre tion standard is “famouslyslippery” and “there has beenli ttl e conse nsus over the years as to precisely what the phr ase means.” Zervos v. Verizon New York, Inc. , 252 F.3d 163, 168 n.4 (2d Cir. 2001) (C abrane s, J. ). A district court’s evidentiary determinati ons gene rally “wi llnot be disturbe d unless they are manifestly erroneous.” Davis v. Velez, 797 F.3d 192, 201 (2d Cir. 2015) (internal quot ation marks omi tted). “Under Rule 403, so long as the district court has cons cientiously balanced the pr offere d evidence’s p robative value with the risk for pr ejudice, it s conclusion wil l be disturbed only if it is arbitrary or irrational.” United States v. Awadallah , 436 F.3d 125, 131 (2d Cir. 2006). In gener al, a district court i s said to abuse its discretion “when its decision cannot be located withi n the range of permissible decisions or is base d on a clearly err oneous factual fi nding or an er ror of law.” United States v. Rigas , 490 F.3d 208, 238 (2d Cir. 2007) (internal quot ation marks omi tted).

17During Scully’s trial, the district court ruled that Scull y could not i ntroduce

evidence of Tomao’s legal advice through Scully ’s direct examination. The court init ial ly excluded that evidence on hear say grounds, b asing that decision on it s

sense that the im portance of Tomao’s advice and the “e xtremely prejudicial” nature of that testimony to the government’s case “overt[ook] the s tate of mind”

exce ption to the hearsay r ule. App’x 281. Even after defens e counse l demonstrated that the testimony was not hears ay because it went to Scul ly’s state of mi nd and was not offer ed for the truth of the matter asser ted, the court continued to maintain that the evidence was unfairly prejudici al to the government and ther efore inadmi ssible under Fe deral Rule of CivilProcedure 403. Though the district court changed the legal basis for its ruli ng, hear say concer ns per meated the court’s re asoning. For ex ample, the court noted that Tomao was “readily avai lable” and “in court every day,” and that “all ow[ing] this defendant to testify as to what Peter Tomao t old him ” is “extre mely i mportant and prejudicialprobab ly to the gover nment.” App’x 302. The court further explained in its post-trialruling on Scully’s motion t o vacate the judgment that the pr oposed e vidence did “not shed its fundamental character as hear say,” “bore the trappings of unre li able hear say,” and was “largely

18cumul ative of his testim ony regar ding Gertler.” United States v. Scully, 170 F.

Supp. 3d 439, 475–76 (E.D.N .Y. 2016). We find that the district court erred in its balancing of the probative value and prejudici al effect of the prop osed evidence under Rule 403. As the district court noted, Scully’s efforts to bolster his only defense at trial with relevant evidence of the ad vice of a second attorne y was “extre mely i mportant to the defens e.” App’x 302. But it is di fficul t to identi fy what unfair prejudice that testimony woul d have imposed on the gove rnment. The district court’s continued concernwith the hearsay char acter of Sc ull y’s secon dhand re layi ng of Tomao’s words was misplaced. A statement is onl y hears ay if i t is offered “to prove the truth of the matter asser ted.” Fed. R. Evid. 801(c)(2). “Where , as her e, the statement is offere d as circumstantialevidence of [the defendan t’s] state of mind, i t does not fall wi thin the definiti on given by Rule 801(c)[,] because it was not offere d to prove the tr uth of the matter asser ted.” United States v. Detrich , 865 F.2d 17, 21 (2d Cir. 1988). Though “the fact that a statement falls wi thin an

exce ption to the hearsay r ule does not mean that the statement is not to be classified as hearsay,” United States v. Gupta , 747 F.3d 111, 131 (2d Cir. 2014),

19Scully’s proposed tes tim ony does not fall within a hearsay exception ; it i s, by

definiti on, not hear say at all

. Nor was it appropr iate to requi re that Scully callTomao as a witness in order to ensure the reliabili ty of Scully ’s testimony. There may be r easons to doubt the cre dibil ity and reliabi li ty of Scully ’s testimony i n that regard, an d the government may well be corre ct that the documents proffer ed by Sc ull y were unli kely to sway a jury. But such determinati ons are the province of the jury alone. See United States v. Khan , 53 F.3d 507, 514 (2d Cir. 1995). Scully is competent to testify to the advice he r eceived from counse l, even if his testim ony is one-sided and se lf-serving; we are now a long way from the common l aw rule that “excluded as witnesses . . . pers ons interes ted in the result of the trial,” Wolfson v. United States , 101 F. 430, 435 (5th Cir. 1900). It was thus error for the district court, in effect, to consider as an element of prejudice to the govern ment the increase d possibili ty that Scull y’s testimony about Tomao’s oral advi ce would be false if uncorrob orated by tes tim ony from Tomao him self. One par ty to a trialwil l frequently beli eve that testimony offered by the other side is false or misleadi ng. That, however, is not a factor to b e weighed against the rece ipt of otherwise admissibl e testimony. The opposing

20party has ample means to challenge the cre dibil ity of a party’s testim ony, which

is to be decided by the jury. He re, for example, if Scull y had bee n per mit ted to testify to what he clai ms Tomao t old him, the govern ment could have crossexamined him about that t estimony, noted in summ ation the self-serving nature of the testimony due to Scull y’s interest in the outcome and the cons picuous lack of corro boration from Tomao him self, challenged the likelihood that a reputable attorney would have given such a significant opi nion orally, or call ed Tomao as a reb uttalwitness, as it did Lam eh’s attorne y Geoffrey Kaiser. The gove rnment’s strategic prefe rence not to take those steps do es not affect the ad missibi li ty of Scully’s evidence. The govern ment’s argument that evidence of Tomao’s advice to Scull y would have been cumulati ve is also unavail ing. Scull y’s entire def ense reste d on the advice he allegedly received from two lawyers, Gertler and Tomao. The government ef fectively cross-ex amined Gertler, raising questions as to Scully’s version of the r elevant events and Gertler’s level of expe rience with FDA matters. Evidence of the legal advice of another attorne y, and in particul ar a former feder al prosecutor with acknowledged exp erience working on FDA compliance matters, might

well have bolstered Sc ull y’s case in the e yes of the jury. Though

21the rec ord includes refe rence s to Tomao and his role on Scully’s l egal team, such

stray bits of testimony do not substitut e for S cull y’s direct account of the advice that he claim s to have re ceived from Tomao, particul arly where the case r evolved around what Scully tol d his attorneys and what they told him. Finall y, we conclude that that error was not harmless. In asse ssing whether the improper e xclusion of defense evidence was h armless, we cons ider

(1) the importance of the unre butted asser tions to the government’s cas e; (2) whethe r the ex cluded material was cumul ative; (3) the prese nce or ab sence of evidence corrob orating or contradicting the government's case on the factual questions at issue; (4) the ex tent to which the defendan t was otherwise pe rmitt ed to advance the defens e; and (5) the ove rall strength of the pro secution’s case. United States v. Oluwanisola , 605 F.3d 124, 134 (2d Cir. 2010). Scully’s defense was that he relied on the advice of counse l i n oper ating his business and ther efore lacked the requisite fraudulent i ntent that the governmen t had to prove at trial. Evidence of Tomao’s advice was neces sary to re but the govern ment’s claim . Of course, the most persuasive evidence of that advice woul d have be en testimony from Tomao him self. But Scully was not legall y required to callTomao. He was full y competent to testify about hi s own state of mind, and about how Tomao’s

22advice affected his state of mind. Itwas for the jury to deter mine whether that

testimony was credible and raised a re asonable doubt about Scully’s guil t. On that basis, Scully i s entitled to a new trial

. II. Advice-of-Counsel Jury Instructions Scully al so argues that the district court’s ju ry charge on the advice-ofcounsel defen se improper ly placed the burden on S cull y to establish the defens e, rather than on the gover nment to demonstrate that Scully had the requisi te intent. Scull y waived that argument, however, whendefens e counse l, in res ponse to the government’s letter motion objecting to the advice-of-counsel jury charge and verdict shee t, urged that “[t]here is no reasonor bas is for the Co urt to now

rewr ite the advice-of-counsel instruction i t drafted and discussed to the satisfaction o[f] both parties” and that the charge “should be re ad to the jury as agreed during the Court’s ch arging confere nce.” G. App’x 56. Such af firmati ve endors ement of the district court’s jury instructions wai ves the r ight to appell ate review. See United States v. Hertular , 562 F.3d 433, 444 (2d Cir. 2009); cf. United States v. Crowley, 318 F.3d 401, 414 (2d Cir. 2003). Accord ingly, w ere we not remanding for a ne w trial in any even t, Scully’s belated appellate objection to the district court’s jury i nstructions would not warrant vacating his convict ion. But

23because a new trial is requi red on othe r grounds , we take the oppor tunityto

provide some guidance to the district court on the issue. While “the prosecution must prove guiltbeyond a r easonab le doubt,” “the long-accepted rule was that it was constitu tional ly permissible to provide that various affirmati ve defen ses we re to be proved b y the defen dant.” Patterson v. New York

, 432 U.S. 197, 211 (1977). An affirmative defense is “[a] defendant’s

asser tion of facts and arguments that, if true, wil l defeat the plainti ff’s or prose cution’s clai m, even if allthe allegati ons in the complaint are true.” Black’s Law Dictionary 451 (8th ed. 2004); see also Saks v. Franklin Covey Co. , 316 F.3d 337, 350 (2d Cir. 2003). In a fraud case, howe ver, the advice-of-c ounsel defens e is not an affirmati ve defen se that defeats liabili ty even if the jury accepts the government’s allegations as true. Rather, the claim ed advice of counsel is evidence that, if believed, can raise a r easonab le doubt in the mi nds of the juror s about whether the govern ment has prove d the required element of the offe nse that the defendant had an“unlawfulintent.” United States v. Beech-Nut Nutrition Corp. , 871 F.2d 1181, 1194 (2d Cir. 1989). The gover nment must carry its burden to prove S cull y’s intent to defraud, and that burde n does no t dim inish because Scully raised an advice-of-counsel defens e. Accordingly, the district court mu st

24advise the jury in unambiguou s terms that the gover nment at alltim es be ars the

burdenof proving beyon d a reaso nable doubt that the defen dant had the state of mind requi red for conviction on a gi ven char ge. That said, defendants are entitl ed to an advice-of-counse l i nstruction only if there are sufficient facts in the re cord to suppor t the defens e. United States v. Evangelista , 122 F.3d 112, 117 (2d Cir. 1997). Ther e must be evidence such that a

reaso nable juror could find that the defendant “hone stly and in good fai th sought the advice of counsel,” “fully and honestly l aid al l the facts before his counsel,” and “in good faith and honestly foll owed counsel’s advice.” United States v. Colasuonno , 697 F.3d 164, 181 (2d Cir. 2012) (br ackets and internal quotati on marks omitt ed). Once the evidence mee ts that threshold, it is for the government to carry its burde n of proving fraudulent intent beyond a r easonab le doubt and for the jury to decide whe ther that burde n was met. It i s there fore pote ntial ly confusing to instruct the jury that the defendant “has the burdenof producing evidence to suppor t the defens e” or must “satisfy” the elements of the defe nse, 5

The “burde n of producing evidence ,” App’x 368, simply m eans that the issue is 5 not for the jury’s con sideration at all absen t some evidence of the r equired facts. Whether that burden is met is thus, in the first instance, for the cour t to decide. See, e.g. , United States v. Bok , 156 F.3d 157, 164 (2d Cir. 1998). It is generally prefe rable, in our view, not to use the language of “bur den of pr oduction” i n jury 25or that it i s the jury’s job to deter mine whether the de fense was “established.”

App’x 368–70. In drafting a more appropr iate instructi on on the advice-of-couns el defens e, it may be tempti ng to turn to the Supre me Court’s ce ntury-old formulati on, adopted by this Cour t in Beech-Nut :

[I]f a man honestly and in good fai th seeks advice of a lawyer as to what he may lawful ly do . . . , and full y and honestly lays allthe facts bef ore his couns el, and in good faith and honestly foll ows such advice, re lying upon it and believing i t to be corr ect, and only intends that his acts shall be lawfu l, he could not be convicted of [a] crime which invol ves will ful and unlaw ful i ntent[,] even if such advice wer e an inaccurate cons truction of the law. But, on the other hand, no man can willful ly and knowingly vi olate the law and excuse himself from the conse quences ther eof by pleading that he followed the advice of counsel. 871 F.2d at 1194–95 (alt erations in original), q uoting Williamson v. United States , 207 U.S. 425, 453 (1908). But that language, l ike many excerpts f rom appellate opinions articul ating l egal principles for an audience of judges and lawyers , is unwieldy for a jury instructi on.

instructions for fear that it would confuse the jury about the all-i mportant burden of proof that re mains on the prose cution. 26More manageable conte mporary formulations are available. The treatise on

jury instructions authored by the late Leonar d B. Sand, a wise and e xper ienced trial j udge, and his colleagues, offers the followi ng template that t ranslates the Williamson / Beech-Nutformulati on into clearer language:

You have hear d evidence that the defe ndant rece ived advice from a lawyer and you may consider that evidence in deciding whether the defendan t acted wil lful ly and wit

h knowledge. The mere fact that the def endant may have re ceived legal advi ce does not, in it self, neces sarily constitu te a complete defense . Instead, you must ask yourselves whether the defen dant honestly and in good faith sought the advice of a competent lawyer as to what he may l awfull y do; whether he fully and honestly lai d all the facts bef ore his lawyer; and wh ether in good faith he honestly followed such advice, relying on it and believing it

to be corr ect. In short you should consider whether , in seeking and obtaining advice from a law yer, the defen dant intended that his acts shall be lawful . If he did so, it is the lawthat a defendant cannot b e convicted of a crime that i nvolves will ful and unlaw ful intent, even if such advice were an inaccurate construction of the law. On the other hand, no man can will full y and knowingly viol ate the law and excuse himself from the consequences of his conduct by pleading that he followed the advice of his l awyer.

27Whether the defen dant acted in good faith for the purpose of seeking guidance as to the sp ecific acts i n this case, and whethe r he made a full and complete repor t to his l awyer, and whe ther he acted substantiall y in accordance with the advice rece ived, are questions for you to determine. 1 Leonard B. S and, et al., Modern Fede ral Jury Instructions: Criminal, Instruction 8-4, at 8-19 (2017). We also refe r district courts to the model i nstructions drafted b y our sister circuits, particul arly the Seve nth Circuit’s model, whi ch reads as follows:

If the defendant r elied in good fai th on the advice of an attorney that his conduct was lawful, then he lacked the [intent to defraud; will fulness; etc.] re qui red to pr ove the offens e[s] of [identify the offens e] char ged in Count[s] __. The defen dant relied in good faith on the advice of counsel if: 1. Before taking acti on, he in good faith sought the advice of an attorney whom he cons idered competent to advise him on the matt er; and 2. He cons ulted thi s attorney for the purpos e of securing advice on the lawfulness of his poss ible future conduct; and 3. He made a full and accurate repor t to his att orney of allmaterial fact s that he knew; and

284. He then acte d strictly in accordance with the advice of this attorney. [You may consider the re asonablene ss of the advice provided by the attorn ey when de termining whether the defen dant acted in good faith.] The defen dant does not have to pr ove his good faith. Rather, the gove rnment must prove be yond a reaso nable doubt that the defen dant acted [with i ntent to defraud; will full y; etc.] as char ged in Count[s] __. Seven th Circuit Pat tern C rimi nal Jury Instructions, § 6.12 (2012 ed.). Neither of the se instructions muddles the question of burden of pr oof by injecti ng the conce pt of a “burdenof production” or asse rting that a defendant must “show” or “establish” or “satisfy” the jury about par ticul ar facts. The last paragraphof the Se venth Circuit instruction, whi ch explicitl y informs the jury that a defendant nee d not establish her good f aith, seems to us a valuable fi nal reminder of the burdenof proof that the pr osecution must carry and should be included i n any instruction to the jury on the advice-of-counsel defen se. 6 For simil ar re asons, we disappr ove of the for mat of the verdict sheet adopted b y 6 the district court in this case. Whe re the gove rnment must establish a defendant’s fraudulent intent, the jury should not be instructed to first decide whether a defendan t is “gui lty” and then determine separ ately “i f the defen se of ‘advice of counsel’ has be en es tablished.” App’x 370. Reliance on the advice of counse l, i n cases whe re fr audulent i ntent is a required element for guilt, i s a defen se that tends to re fute the govern ment’s proof of suchintent. If the defe ndant lacks such intent, he is not guil ty of the offense

. 29III. Scully’s Challenges to Additional Counts

In addit ion to the clai ms of trial error discusse d above, S cully also contests his guil t on sever al specific counts of which he was convicted. First, Scull y argues that the district court should have dism issed all counts premised on his distributi on of pre scription drugs not bear ing Engli sh-language labeling because those re qui rements ar e imposed by FDA r egulati on and ther efore cannot ser ve as the basis of a cr iminal charge. Se cond, Scully clai ms that there was insufficient evidence to convict him of the two remaining counts relating to Dr. Jacob b ecause Dr. Jaco b did not testify at t rial. We find no merit t o these ar guments. Scully cl aims thathe was er roneous ly convict ed of counts bas ed on the s ale of pres cription drugs with l abels in languages other than English. His argument misunderstands both the bases for his conviction and the law. A drug is misbranded if its labeling lacks “adequate directions for use,” 21 U.S.C . § 352(f), or “if at any tim e prior to dispens ing the label of the drug fails to bear, at a mini mum, the symbol ‘Rx only,’” 21 U.S.C. § 353(b)(4)(A). In the b il l of particulars fil ed by the gove rnment at court orde r, the gover nment all eged that each of the dr ugs that Scully sold “fail ed to bear the phras e ‘Rx only.’” G. App’x 13–18. Scully di d not claimotherwise at trial or on appeal. Accordingly, the

30evidence of guilt was suffici ent without regard to the fore ign-language l abel. But

in any event, we find no legal flaw in the gover nment’s alternative theory bas ed on the abs ence of En gli sh-language labels. Prescr ipti on drugs affixed with foreign-language labels do not provide adequate directions for use as required by the statute, and not merely by FDA r egulati ons. It requires no administrati ve regulation to reach the common-sense conclusion that m edical products bearing labels in langu ages other than the pre vail ing languag e in the relevant marketplace—here , English—are, in effect, not labeled at all. Scully al so argues that the recor d lacked sufficient evidence to support his conviction on Counts 40 and 57, charging introduction of Botox into i nterstate commerce and re ceipt of Botox in interstate commerce and delivery there of to Dr. R. Daniel Jacob for pay with the intent to defraud or mislead. Because D r. Jacob was unable to testify at trialdue to il lness, Scully argues that the gover nment failed to prove that Dr. Jacob relied on Scully’s repre sentations when pur chasing the misbranded Botox, the reb y defeating any finding of fraudulent intent. But reliance by a victimis not an element of felony introducti on of misbranded dr ugs into i nterstate commerce nor of fe lony receipt of misbranded dr ugs in interstate commerce and delivery ther eof for p ay, which are complete when the de fendant

31formulates a fraudulent scheme and introduces or rece ives and sells misbranded

drugs through inters tate commerce. Moreove r, “direct pro of of defen dant's fraudulent intent is not necessar y.” United States v. Guadagna , 183 F.3d 122, 129 (2d Cir. 1999). “[A] jury may bring to its analysi s of intent on indivi dual counts allthe circumstantialevidence it has re ceived on the sch eme and the pur pose of the sche me in which the defendant allegedly partici pated.” Id. at 130. There is substantial evidence in the recor d from which a jury could fi nd that Scully w as engaged in a sche me to defraud doctors, clinics, and hospitals; the whole corpor ate enter prise was b uil t on Scully’s assurances that the dr ugs sold in the name of Pharmalogi cal, MedicalDevice King, and Taranis were ap propr iate for sale in the United States. The gover nment need no t prese nt testimony from each victi m of Scull y’s fraudulent scheme to pr ove intent as to that vict im. CONCLUSION For the r easons stated above, the judgment of the district court is VACATED and REMAND ED for further p rocee dings in accordance with this opinion.

32