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w . v i l l a no v a . e du/thir dc ir c uit_2013/1337NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

________________ No s . 1 1

- 4511, 11

- 4512 & 11

- 4513

________________ UNITED STATES OF AMERICA

v. QUALITY FORMULATION LABORATORIES, INC; AMERICAN SPORT S NUTRITION INC; MOHAMED S. DESOK Y, Appellants (No. 11

- 4511) OMAR DESOKY,

Appellant (No. 11

- 4512) AHMAD DESOKY,

Appellant (No. 11

- 4513)

________________ Appeal from the United States District Court for the District of New Jersey (D.C. Civi l Action No s . 2

- 10

- c r - 0 0 699

- 001/2/4/5/6 ) District Judge: Honorable Garrett E. Brown, Jr.

________________ Argued January 8 , 2013 Before: SCIRICA , AMBRO , and FUENTES , Circuit Judges

(Opinion filed: January 25, 2013 ) Eric R. Breslin, Esquire Marco A. Gonzalez, Jr., Esquire (Argued) Duane Morris2

1037 Raymond Boulevard One Riverfront Plaza, Suite 1800 Newark, NJ 07102 Counsel for Appellants Quality Formulation Labs, American Sports Nutrition Inc., Mohamed S. Desoky Lisa Van Hoeck, Esquire (A rgued) Office of Federal Public Defender 220 South Clinton Avenue Station Plaza #4, 4 th Floor Trenton, NJ 08609 Counsel for Omar Desoky, Appellant Ricardo Solano, Jr., Esquire (Argued) Friedman, Kaplan, Seiler & Adelman One Gateway Center, 25 th Floor Newark, NJ 07102 Counsel for Ahmad Desoky, Appellant Mark E. Coyne, Esquire David E. Dauenheimer, Esquire Office of United States Attorney 970 Broad Street, Room 700 Newark, NJ 07102 Paul J. Fishman United States Attorney Stuart F. Delery A cting Assistant Attorney General Patrick R. Runkle, Esquire (Argued) United States Department of Justice Office of Consumer Litigation P.O. Box 386 Washington, DC 20044 Counsel for Appellee3 ________________ OPINION

________________ AMBRO, Circuit Ju dge Appellants

— three companies and three individuals

— jointly appeal their convictions for criminal contempt and Appellants Omar and Ahmad Desoky appeal their

sentences. We affirm the convictions but vacate and remand Omar and Ahmad Desoky’s
sentences fo r further findings.
I. Background In 2010, following a civil suit, Mohamed Desoky and the three dietary supplement companies he r an

— Quality Formulations Laboratories (QFL), American Sports Nutrition (ASN) , and Sports Nutrition International (SNI)

— entered into a court

- approved Consent Decree with the federal Food and Drug Administration ( FDA ) halting production at the companies’ Paterson, New Jersey manufacturing facility. T he Consent Decree provided that [ QFL , ASN, SNI and Mohamed Desoky ] and each and a ll of their officers, agents, employees, successors, and assigns, and any persons in active concert or participation with any of them who receive notice of this Decree, are permanently restrained and enjoined

. . . from directly or indirectly receiving, ma nufacturing, preparing, packing, labeling, and distributing at their plant located [in] . . . Paterson, New Jersey

. . . or any new location(s) at which the Defendants receive, manufacture, prepare, pack, label, hold, or distribute articles of food , any ar ticle of food unless and until [described] conditions have been met[.] App. at 78, Consent Decree, para. VII. It also required that [QFL , ASN, SNI and Mohamed Desoky ] shall notify FDA in writing at least thirty (30) calendar days before any change [in] ownership, name, or character of their business, including reorganization, relocation, dissolution, assignment, or lease or4

sale of the business or any asset of the business, such as buildings, equipment, or inventory, that may affect compliance with the obligations arising from this Decree. Id. at 92, Consent Decree, para. XV. Pursuant to the Consent Decree, the Paterson facility was shut down. Subsequently , manufacture of Appellants’ products began at a facility in Congers, New York owned by ADH Hea lth Products (―ADH‖)

. On d iscover ing this manufacturing, the FDA filed an order to show cause all eging criminal contempt by Moha med, the three companies, and Mohamed’s two sons and company employees , Ahmad and Omar. The Government alleged that Appellants willfully violated the Consent Decree by manufacturing products at the Congers facility. Appellants asserted a good faith defense, arguing that they contracted with ADH to manufacture QFL products, and they believed
this third

- party manufacturing was per mitted by the Consent Decree. Evidence presented at trial showed that the Congers facility manufactured QFL products, that Appellants sent raw material and equipment from Paterson to Congers, that former and current QFL employees worked on the products in Congers, and that QFL paid those employees in cash. Appellants did not disclose the activities at Congers to the
FDA , including during two FDA inspections of the Paterson facility. In addition to the activities at Congers, some raw ingredients were shipped to the Paterson facility, Ahmad brought some products manufactured at ADH to the Paterson facility to be shipped to customers, and Ahmad loaded two pallets of product from the Paterson facility to a truck owned by Performance Food Centers. The Gov ernment5

alleged that these actions also violat ed the Consent Decree , and Appellants asserted a good faith defense to these charges as well. Appellants were convicted of criminal contempt. Mohamed was sentenc ed to 40 months’ imprisonment. Ahmad and Omar were each sente nced to 34 months’ imprisonment, and t he companies were fined. All appeal. 1
II. Discussion Appellants rais e four challenges to their convictions and one to a sentencing enhancement applied to Omar and Ahmad Desoky. A. Exclusion of Mary Richardson ’s Testimony The District Court excluded Appellants ’ offered testimony of Mary Richardson, an expert consultant they hired to help them comply with the FDA’s requirements in order to avoid and then lift the production shut

- down

. Richar dson would not have testified about the charged conduct. Instead, her testimony related solely to Appellants’ efforts to remediate the issues identified at the Paterson facility. We review a district court’s decision to admit evidence for abuse of disc retion. United States v. Givan , 32 0 F.3d 452, 460 (3d Cir. 2003). Some evidence of earlier

― good acts ‖ evidence may be admissible to show a defendant lacked wrongful intent in later behavior. See United States v. Garvin , 565 F.2d 519, 522 (8th Cir. 1977 ) (evidence
of correctly submitted applications for approximately 18 insurance policies admissible to show lack of intent to commit a scheme to defraud); United States v. Shavin , 287 F.2d

1 T he District Court had jurisdiction pursuant to 18 U.S.C. § 3231 , and we have appellate jurisdiction under 28 U.S.C. § 1291.6

647, 654 (7th Cir. 1961) (evidence of properly submitted medical bil ls admissible to show lack of intent to defraud with later medical bills). But Richardson’s testimony is not of this sort. Evidence that Appellants undertook ameliorative efforts at Paterson does not negate the Government’s theory

— apparently adopted by the jury

— that Appellants engaged in simultaneous efforts to improve the Paterson plant and to continu e manufacturing elsewhere , with the latter actions violating the Consent Decree

. In addition, Richardson’s testimony would have raised ancillary issues a bout the initial problems at Paterson and the Appellants’ ameliorative efforts . The District Court concluded this outweighed any potentially probative value of the testimony. We agree , and , moreover , discern no harm in excluding Richardson’s testimony. United States v.
Berrios , 676 F.3d 118, 131 (3d Cir. 2012)

. Appellants provided uncontradicted evidence at trial about their efforts at Paterson , and their counsel were able to argue to the jury that these efforts demonstrated their lack of willfulness to violate the decree. In this context,

t he District Court did not err in excluding the testimony.
B. Jury Instruction on a Good Faith Defense Appellants also challenge two aspects of the jury charge on their good faith defense . They argue that the Co urt improperly instructed the jury: ( 1) that an honest misunderstanding of the order must be plausible; and ( 2) that a defendant does not act in good faith if he also knowingly made false statements, representations, or purposeful omissions. The first par t we review de novo because Appellants objected to the language at trial. United States v. Berrios , 676 F.3d at 136. Appellants contend that we should7

review the false statements instruction s de novo because they omit key language in their requested char ge . While we doubt that merely requesting an instruction contrary to the one given sufficiently informs the Court of the specific objection, thus preserving the issue for appeal , Fed. R. Crim. P. 30(d); United States v. Russell , 134 F.3d 171, 178

– 79 (3d C ir. 1998), we discern no error under either a de novo or plain error review. The language used by the District Court on plausibility comes from our analysis of a good faith defense in Taberer v. Armstrong World Industries, Inc. , 954 F.2d 888, 909 (3d Cir . 1992)

. Although Appellants allege error in this instruction, we consider jury instructions as a whole, and here find that t he jury was properly instructed that a defendant did not commit criminal contempt if he acted under an honest, although incorrect, misunderstanding of the court order. United States v. Gross , 961 F.2d 1097, 1103 (3d Cir. 1992) (―[T]he good faith instruction [i]s simply a reiteration that the government must carry its burden in demonstrating that the accused acted knowingly and willf ully . . . .‖)

. W e also find no error in the Court’s instruction that a defendant does not act in good faith if he makes false statements, representati ons, or purposeful omissions. As such, t here is no support for Appellants’ argument that the jury might
have determined that they were not entitled to a good faith defense because of a false statement or omission unrelated to the charged conduct. C. Sufficiency of the Evidence on the Aiding and Abetting Charge Omar and Ahmad challenge the sufficiency of the evidence that they aided and abetted the other Appellants’ failure to notify the FDA of the companies ’ re location from Paterson to Congers

. When reviewing a jury verdict for in sufficiency of evidence, we8

consider the evidence in a light most favorable to the G overnment , and will affirm unless no reasonable jury could find the essential elements of the charged offense beyond a reasonable doubt. United States v. Gatlin , 613 F.3d 374, 380 (3d Cir. 2010). Aiding and abetting has four elements. ―First, the person who is being aided must be intentionally committing a crime; second, the aider or abettor must know that the other is committing a crime; third, the aider or abettor must have the purpose to aid that other to commit the crime; and, finally, four th, the aider must in fact render aid or assistance.‖ United States v. Nolan , 718 F.2d 589, 592 (3d Cir. 1983). Sufficient evidence was presented at trial for a reasonable jury to conclude that all four elements were met. Omar a nd Ahmad knew that Moham ed had failed to inform the FDA of the move to Congers, a violation of the Consent Decree , and they successfully assisted him and the other Appellants in concealing the relocation

. D. Closing Arguments Appellants also argue that the prosecutor s made a n umber of improper statements during closing argument. We review a district c ourt’s ruling on contemporaneous objections to the statements for abuse of discretion. United States v. Brennan , 326 F.3d 176, 182 (3d Cir. 2003). To determine whether a d istric t c ourt abused its discretion, we must consider whether the prosecutor engaged in misconduct, and , if so, whether the remarks were harmless. United States v. Rivas , 493 F.3d 131, 139

– 40 (3d Cir. 2007). We review statements to which Appellants did not obj ect for plain error. Brennan , 326 F.3d at 182. Although we are troubled by the prosecutor’s reference to defense counsels’ attack on a witness’s credibility as ―disgusting‖ and ―ridiculous , ‖ we do not think this9

statement alone, or in combination with th e other challenged comments, prejudiced Appellants. The other challenged comments do not amount to misconduct , nor have Appellants shown prejudice as a result of these statements, alone or in combination.
E. Sentencing Enhancement Applied to Omar and Ahm ad Omar and Ahmad also challenge the District Court’s application of a three

- level enhancement under section 3B1.1(b) of the United States Sentencing Guidelines . W e review the factual findings supporting a district court’s application of the Guidelines f or clear error, and exercise plenary review over a court’s interpretation of the Guidelines. United States v. Grier , 475 F.3d 556, 570 (3d Cir. 2007) ( en banc ). Section 3B1.1(b) provides for an enhancement ―[i]f the defendant was a manger or supervisor‖ and the criminal activity was extensive. U.S.S.G. § 3B1.1(b). It is applicable in two situations. First, the enhancement is proper if the defendant is a ―manager, or supervisor of one or more other participants.‖ § 3B1.1(b) cmt. 2

. A participant is def ined as someone who is ―criminally responsible for the commission of the off ense‖ even if not convicted. § 3B1.1(b) cmt. 1; United States v. Katora , 981 F.2d 1398 , 1404

– 05 (3d Cir. 1992). In addition, the defendant must have more than legal management re sponsibility over the participant ; he must have actually managed or supervised the participant’s illegal
conduct. United States v. DeGovanni , 104 F.3d 43, 44 (3d Cir. 1997) (―[O]ne is only a supervisor under U.S.S.G. § 3B1.1(c) when he is so involved in, and connected to, the illegal activity of others that he actually supervises their illegal conduct

. . . . ‖). Alternately, the role enhancement applies if the defendant ―exercised management10

responsibility over the property, assets, or activities of a cri minal organization.‖ § 3B1.1
cmt. 2. Here the District Court determined that the criminal activity was extensi ve, but did not make any factual findings regarding whether Omar or Ahmad manage d or supervis ed the unlawful activities of a criminally culpab le participant or that a criminal organization existed over which Omar and Ahmad exercised management responsibility. Moreover, the Court did not determine whether the two unindicted employees the Government asserts were managed or supervised were crimina lly culpable. To sort matters out, w e remand so the District Court can make necessary factual determination s . We thus af

firm Appellants’ convictions. However, we vacate Omar and Ahmad Desoky ’s sentences , and remand for further factual finding s .