Opinion ID: 789574
Heading Depth: 2
Heading Rank: 4

Heading: Failure To Provide History of Transactions (Count Five): Intent To Defraud

Text: 61 Count Five charged Milstein with failing to provide his customers with the required pedigree information with the intent to defraud and mislead. The intent to defraud element converts conduct that would otherwise be a misdemeanor into a felony. See 21 U.S.C. § 333(a)(1), (2). The District Court charged the jury that intent to defraud includes intent to defraud not only the wholesale distributors who made direct purchases from Milstein but also retail consumers and government agencies. 62 Milstein argues that it is doubtful that the government or consuming public ever can be a contemplated victim of a pedigree offense under 21 U.S.C. §§ 353(e)(1)(A), 333(a)(2). Milstein also asserts that he had no notice that he could have been convicted on the basis of evidence that he intended to defraud the purchasing public and government agencies. Therefore, he contends that the jury instruction violated his due process rights under the Fifth Amendment and the notice requirements of the Sixth Amendment. 63 Although there seems to be a split in authority, we believe that the Tenth Circuit's opinion in United States v. Mitcheltree, 940 F.2d 1329, 1347-50 (10th Cir.1991), is persuasive, holding that a defendant may be convicted on evidence that government agencies were the subject of the intent to defraud. By misleading governmental agencies, and thereby frustrating their efforts to protect the public, Milstein indirectly misled and defrauded the public, thus contravening the overriding congressional purpose [of] consumer protection embodied in these provisions. Id. at 1348; see also United States v. Bradshaw, 840 F.2d 871, 874 (11th Cir.1988). But see United States v. Haga, 821 F.2d 1036, 1044 n. 17 (5th Cir.1987) (expressing doubt that government agencies could be victims of intent to defraud). Additionally, nothing in the language of the pedigree statute precludes the intent to defraud provision from applying to the purchasing public. Moreover, Milstein had adequate notice that the government agencies and the consuming public were possible subjects of his intent to defraud. 64 The very nature of the fraud as alleged in the indictment implies an intent to defraud consumers. The indictment alleges that Milstein and others sold these re-packaged drugs as if they were the original product from the licensed manufacturers, a scheme that on its face is designed to deceive all purchasers in the chain of distribution. Moreover, the documents provided by Milstein in discovery included records of his retail pharmacy customers showing patient prescriptions for Milstein's drugs. 65 Milstein received further notice of the Government's intent to prove that consumers were victims of the fraud when, in response to pre-trial motions, the Government described its contamination evidence, concluding that [t]hese were powerful and potentially dangerous drugs distributed with a callous disregard for the health and well being of the end users. Similarly, in opposing Milstein's pretrial motion to exclude the contamination evidence, the Government described the scheme as involving counterfeit prescription drugs that were intended for injection by women having difficulty with conception and that were falsely labeled as sterile and safe for injection when, in fact, they were tainted with microorganisms that could cause infection. Though Milstein claims that these assertions were unscientific melodrama, they plainly placed him on notice that the consuming public was a potential subject of his intent to defraud. 66 Likewise, the indictment placed Milstein on notice that the government charged him with intent to defraud government regulators. By charging the falsification of so-called lot numbers, tools used by the FDA for further regulatory action, the indictment suggested a fraud that was reasonably understood to have been aimed at deceiving regulators. In addition, the Government's response to pretrial motions provided Milstein with a detailed account of the government's plan to prove his efforts to obstruct the FDA investigation, including his false statements to an FDA agent. 67 Therefore, the District Court correctly charged the jury that it could consider Milstein's intent to defraud customers and regulatory agencies as well as his direct purchasers.