Court Opinion

ID: 1041700
Source: CourtListenerOpinion
Date Created: 2013-09-23 17:53:26.59096+00
Date Added: 2024-06-11T08:20:35.438707
License: Public Domain

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.

                                    -2-
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

                                      -3-
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

                                  -4-
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.

                                 -5-
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

                                     -6-
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.

                                    -7-
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.

                                -8-
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

                                  -9-
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

                                   -10-
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.

                                     -11-
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.

                                -12-