Court Opinion

ID: 626203
Source: CourtListenerOpinion
Date Created: 2012-03-28 13:48:04+00
Date Added: 2024-06-11T17:51:14.723601
License: Public Domain

[DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                                                            FILED
                    ________________________       U.S. COURT OF APPEALS
                                                     ELEVENTH CIRCUIT
                                                        MARCH 28, 2012
                          No. 10-14228
                                                          JOHN LEY
                    ________________________
                                                           CLERK

                D. C. Docket No. 1:08-cr-00327-CG-B-1

UNITED STATES OF AMERICA,

                                           Plaintiff-Appellee,

                               versus

A. SAMUEL KELLEY, II,

                                           Defendant-Appellant.

                    ________________________

                          No. 10-14560
                    ________________________

                D.C. Docket No. 1:08-cr-00327-CG-B-2

UNITED STATES OF AMERICA,

                                           Plaintiff-Appellee,

                               versus

JASON R. KELLEY,

                                           Defendant-Appellant.
                              ________________________

                                    No. 10-14791
                              ________________________

                        D.C. Docket No. 1:08-cr-00327-CG-B-3

UNITED STATES OF AMERICA,

                                                           Plaintiff-Appellee,

                                            versus

JODI C. SILVIO,

                                                           Defendant-Appellant.

                              ________________________

                     Appeals from the United States District Court
                        for the Southern District of Alabama
                            ________________________

                                     (March 28, 2012)

Before DUBINA, Chief Judge, COX, Circuit Judge and GOLDBERG,* Judge.

       *
        Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting
by designation.

                                               2
PER CURIAM:

      Samuel Kelley, Jason Kelley, and Jodi Silvio (collectively “Appellants”)

were convicted by a jury for conspiring to distribute and dispense anabolic

steroids—a controlled substance—outside the usual course of professional

practice and without a legitimate medical purpose, in violation of 21 U.S.C. § 846;

illegally distributing anabolic steroids to both adults and persons under the age of

21, in violation of 18 U.S.C. § 2 and 21 U.S.C. §§ 841(a) and 859(a); money

laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i); and money laundering

conspiracy, in violation of 18 U.S.C. § 1956(h). Sam Kelley and Jason Kelley

were sentenced to 120 months’ imprisonment, followed by four years of

supervised release, while Silvio was sentenced to 78 months’ imprisonment,

followed by three years of supervised release. Appellants urge reversal of their

convictions because they contend (1) there was insufficient evidence to support

their convictions on each charge; (2) the district court improperly denied Samuel

Kelley’s motion for severance; (3) the district court incorrectly ruled on various

evidentiary issues; (4) the district court improperly rejected their requested jury

instructions; (5) the prosecutor’s remarks during the opening and closing

statements were improper; and (6) the district court abused its discretion in

                                          3
denying their motion for a mistrial or a new trial. For the foregoing reasons, we

reject the Appellants’ arguments and affirm their convictions.

                                         I.

      Sam Kelley was the President and Chief Executive Officer of Applied

Pharmacy Services (“Applied”), Jason Kelley was the Chief Operating Officer and

Treasurer, and Silvio was a part-time pharmacist, part-owner, and Secretary.

Applied was a compounding pharmacy that combined drug ingredients to create

patient-specific medications that were not commercially available. At trial, the

Government presented evidence that Applied filled steroid prescriptions for clients

who wished to become more muscular. Evidence was also presented that Sam and

Jason Kelley facilitated those transactions by cultivating relationships with doctors

who were willing to prescribe steroids for no legitimate medical purpose and with

salesmen who pursued high volume sales without regard to actual medical need.

Between March 2003 and August 2006, Applied illegally dispensed a significant

amount of anabolic steroids from its base in Mobile, Alabama, to recipients across

the country. As a result of these relationships and sales, Applied became very

profitable, and Appellants were compensated with monthly dividends of

approximately $500,000 for Jason Kelley and Silvio and approximately

$1,000,000 for Sam Kelley. The Government presented evidence that Applied

                                          4
continued its suspect steroid dispensing practices despite warnings from the

Alabama Board of Pharmacy and the United States Drug Enforcement Agency.

      Steroids are a regulated Schedule III controlled substance under federal

law—they have some accepted medical uses with a moderate potential for abuse.

Some types of steroids are approved only for use in animals and must be

prescribed by a licensed veterinarian. Because steroids are a controlled substance,

pharmacists bear a responsibility to ensure the drugs are properly prescribed and

dispensed. A pharmacist can legally dispense steroids only if a physician acting in

the usual course of professional practice issues a prescription for a legitimate

medical purpose. A pharmacist who fills a prescription knowing it is invalid is in

violation of the controlled substance laws.

                                         II.

      Challenges as to the sufficiency of the evidence are reviewed de novo, with

this court viewing the evidence “in the light most favorable to the government,

with all inferences and credibility choices drawn in the government’s favor.”

United States v. Garcia-Bercovich, 582 F.3d 1234, 1237 (11th Cir. 2009) (internal

quotation marks omitted) cert. denied, 130 S. Ct. 1562 (2010). A district court’s

denial of a motion to sever will not be reversed absent a “clear abuse of

                                          5
discretion.” United States v. Chavez, 584 F.3d 1354, 1360 (11th Cir. 2009) cert.

denied, 131 S. Ct. 436 (2010).

      This court reviews a district court’s evidentiary rulings for abuse of

discretion. United States v. Perez-Oliveros, 479 F.3d 779, 783 (11th Cir. 2007).

However, where Appellants fail to contemporaneously object to an evidentiary

ruling, this court will review the ruling for plain error. United States v. Turner,

474 F.3d 1265, 1275 (11th Cir. 2007). Finally, this court will review de novo

whether an evidentiary ruling violated a constitutional guarantee. United States v.

Sarras, 575 F.3d 1191, 1210 n.24 (11th Cir. 2009).

      This court reviews the district court’s denial of a requested jury instruction

for abuse of discretion. United States v. Morris, 20 F.3d 1111, 1114 (11th Cir.

1994). Appellants timely objected to the prosecutor’s remarks during closing

argument; therefore, the propriety of those remarks will be reviewed de novo. See

United States v. Schmitz, 634 F.3d 1247, 1259 (11th Cir. 2011). Because

Appellants did not timely object to the prosecutor’s remarks during the opening

statement, we will review the propriety of those remarks for plain error. Id. This

court reviews a district court’s denial of motions for a mistrial and for a new trial

for abuse of discretion. See Chavez, 584 F.3d at 1362; United States v. Hunt, 526

F.3d 739, 744 n.1 (11th Cir. 2008).

                                           6
       Lastly, this court reviews the district court’s denial of a requested jury

instruction for abuse of discretion. United States v. Morris, 20 F.3d 1111, 1114

(11th Cir. 1994). The refusal to give a certain jury instruction is reversible error

only if “(1) the requested instruction was a correct statement of law, (2) its subject

matter was not substantially covered by other instructions, and (3) its subject

matter dealt with an issue in the trial that was so important that failure to give it

seriously impaired [Appellants’] ability to defend [themselves].” United States v.

Dean, 487 F.3d 840, 847 (11th Cir. 2007) (per curiam).

                                                III.

      A. Sufficiency of the Evidence1

      i. Distributing and Conspiring to Distribute Anabolic Steroids

      In order to establish the Appellants engaged in a conspiracy to distribute

steroids, the Government must have presented sufficient evidence that there was an

agreement between two or more people to unlawfully dispense steroids outside the

       1
         Jason Kelley attempts to adopt Sam Kelly’s sufficiency of the evidence argument with
regard to the distributing and conspiracy to distribute a controlled substance counts; however, this
court has stated that “[s]ufficiency arguments . . . are too individualized to be generally adopted.”
United States v. Cooper, 203 F.3d 1279, 1285 n.4 (11th Cir. 2000). Therefore, we will not consider
any sufficiency argument on these counts as to Jason Kelley because he did not properly raise this
issue on appeal. See id. With regard to the money laundering and conspiracy to commit money
laundering counts, Sam Kelley and Jodi Silvio adopted Jason Kelley’s arguments on the sufficiency
of the evidence. The Government conceded that Sam Kelley and Silvio could adopt Jason Kelley’s
arguments on the sufficiency issue. See, e.g., United States v. Garcia, 405 F.3d 1260, 1269 n.7 (11th
Cir. 2005).

                                                 7
usual course of professional practice for no legitimate medical purpose and that

each person willfully joined the plan knowing its unlawful purpose. See generally

United States v. Smith, 289 F.3d 696, 706 (11th Cir. 2002). The Government

presented testimony from businessmen, salesmen, and doctors stating that they

each developed a relationship with Applied through either Sam Kelley or Jason

Kelley in order to send prescriptions for steroids to Applied for clients who had no

medical need for them. The Government was able to show that each of the

Appellants’ actions facilitated the common goal of the steroids distribution

conspiracy. See United States v. Richardson, 532 F.3d 1279, 1284–86 (11th Cir.

2008) (holding that in order to establish a single conspiracy, the government must

demonstrate a common goal, the nature of the underlying scheme, and the overlap

of participants.). The Government also presented evidence to rebut Sam Kelley’s

defense that he was simply a detached Chief Executive Officer who did not

participate in, or have knowledge of, Applied’s illegal activities. Viewing this

evidence in the light most favorable to the Government, we affirm Sam Kelley’s

conviction on this count because a rational trier of fact could have found the

essential elements of the offense established beyond a reasonable doubt. Garcia-

Bercovich, 582 F.3d at 1237.

                                          8
      The same evidence that supports a conspiracy to distribute steroids also

supports Sam Kelley’s conviction for aiding and abetting steroid distribution. In

order to determine guilt of an aiding and abetting offense, the trier of fact must

“determine whether a substantive offense was committed by someone, whether

there was an act by [Sam Kelley] which contributed to and furthered the offense,

and whether [Sam Kelley] intended to aid its commission.” United States v. Jones,

913 F.2d 1552, 1558 (11th Cir. 1990). The Government presented evidence that

Sam Kelley increased Applied’s business by providing assurances that Applied

would liberally fill steroids prescriptions, signed paychecks to salesmen who sold

steroids to many of Applied’s under age-30 customers, rewarded employees for

record sales, and made attempts to conceal from investigators Applied’s business of

dispensing large quantities of veterinary steroids that were not approved for human

use. This evidence was sufficient for a rational trier of fact to have found that the

Government established the essential elements of the offense of aiding and abetting

the distribution of steroids beyond a reasonable doubt. Garcia-Bercovich, 582 F.3d

at 1237.

      ii. Promotion Money Laundering

      In order to sustain a conviction for promotion money laundering, the

Government must have presented sufficient evidence that (1) Appellants

                                           9
“conducted or attempted to conduct a financial transaction;” (2) with the

knowledge that “the property involved in the transaction represented the proceeds

of unlawful activity; (3) the property involved was in fact the proceeds of the

specified unlawful activity;” and (4) the financial transactions were conducted

“with the intent to promote the carrying on of the specified unlawful activity.” 18

U.S.C. § 1956(a)(1)(A)(i); see also United States v. Calderon, 169 F.3d 718, 721

(11th Cir. 1999) (internal quotation marks omitted). The monthly dividend

payment to Applied shareholders—including between $500,000 and $1,000,000 to

Appellants—formed the basis for each substantive count charged under this statute.

Sam Kelley contends that the Government did not present sufficient evidence to

establish that the dividend payments were intended to promote Applied’s steroid

distribution activity, which generated the unlawful proceeds.

      The Government presented sufficient evidence that the monthly dividend

payments were designed to give the principal players in the steroid distribution

scheme an incentive to continue their activities despite the risks inherent in such

activity. See United States v. Williamson, 339 F.3d 1295, 1301–02 (11th Cir.

2003). Contrary to Appellants’ argument, there is no requirement that the funds

were reinvested into the illegal activity from which they came. See, e.g., United

States v. Carcione, 272 F.3d 1297, 1302–03 (11th Cir. 2001). Therefore, we

                                          10
conclude that the Government presented sufficient evidence to sustain Jason Kelly,

Jodi Silvio, and Sam Kelley’s convictions for promotion money laundering.

      iii. Money Laundering Conspiracy

      A conspiracy count charging multiple objects will not be overturned simply

“because one of the possible bases of conviction [is] . . . unsupported by sufficient

evidence.” Griffin v. United States, 502 U.S. 46, 56, 112 S. Ct. 466, 472 (1991).

The jury returned a general verdict of guilty as to the conspiracy count, which

“stands if the evidence is sufficient with respect to any one of the acts charged.”

Id. at 56–57, 112 S. Ct. at 473. The Government presented two bases for the

conspiracy charge: the dividend payments to Sam Kelley, Jason Kelley, and Silvio;

and the commission payments to a salesman, Brett Branch, and his company,

Infinite Health. Applied paid Branch a car allowance and approximately $68,000

in commissions for steroids sales between 2005 and 2006. Additionally, Sam

Kelley and Jason Kelley wrote checks to Branch, and the prospect of earning more

commissions spurred Branch to continue participating in the scheme. This is a

legally valid basis for the conspiracy conviction, and it is supported by sufficient

evidence. We affirm Appellants’ convictions on this charge.

      B. Motion for Severance

                                          11
      In order for Sam Kelley to prevail upon his request for a new trial due to the

district court’s denial of his motion to sever his trial from Jason Kelley and Silvio,

he bears “the heavy burden of demonstrating the lack of a fair trial due to actual,

compelling prejudice” that is “beyond the curative powers of a cautionary

instruction.” Chavez, 584 F.3d at 1360. Sam Kelley has not sustained his burden.

Accordingly, we conclude from the record that the district court did not abuse its

discretion in denying Sam Kelly’s motion for severance.

      C. Evidentiary Rulings

      Appellants raise numerous allegations of evidentiary error by the district

court: the refusal to allow cross-examination of Lisa Yanoff after questioning by

the court; the refusal to allow Sam Kelley to introduce portions of recorded phone

calls or related phone calls to those introduced by the Government pursuant to

Federal Rule of Criminal Procedure 106; the preclusion of references to Kelley

Tucker’s previous criminal convictions due to the overly prejudicial nature of the

evidence; the preclusion of defense witness Steve Burkow’s testimony regarding

Applied’s practices in 2008; the exclusion of defense expert David Brushwood; the

admission of Jeffrey Weiser’s testimony regarding communications between him

and Sam Kelley; the admission of evidence of Appellant Jason Kelley’s personal

use, possession, or distribution of recreational drugs, which were controlled

                                          12
substances,2 under Rule 404(b); and the admission of testimony from Government

experts Dr. Gary Wadler and Paul Doering. We see no abuse of discretion in the

district court’s disposition of these issues; therefore, we summarily affirm the

district court’s evidentiary determinations.

      Sam Kelley and Jason Kelley argue that the district court violated the

Confrontation Clause of the Constitution by allowing Agent Craig Underwood to

testify to out-of-court statements by co-defendants Robin Kelley and Mallory

Mallon—pharmacists at Applied. The Confrontation Clause “is violated when a

facially incriminating statement of a non-testifying co-defendant is offered into

evidence at a joint trial.” United States v. Taylor, 186 F.3d 1332, 1335 (11th Cir.

1999) (per curiam). The statements proffered by Agent Underwood did not directly

implicate either Sam Kelley or Jason Kelley. The statements would be

incriminating only after being linked with other evidence regarding the doctors’

prescription practices; therefore, we conclude that there was no violation of the

Confrontation Clause. See United States v. Arias, 984 F.2d 1139, 1142–43 (11th

Cir. 1993).

      D. Requested Jury Instructions

       2
         The district court admitted the evidence of Jason Kelley’s personal recreational drug use
only as to Jason Kelley and gave a limiting instruction. On appeal, only Sam Kelley challenges the
admission of this evidence.

                                               13
      Appellants allege that the district court erred by not giving the requested

good faith defense jury instruction. Appellants also contend that the district court

erred by not instructing the jury pursuant to the heightened standard for willfulness.

Because they were charged with knowingly aiding and abetting the violation of the

Controlled Substances Act through invalid prescriptions, the Appellants assert that

the district court should have used the pattern instruction that requires the

defendant to have a particularized knowledge of the law being violated.

      The charge that the court gave substantially covered the good faith defense

and correctly articulated the knowledge and intent requirements for the drug

conspiracy and drug distribution counts. See United States v. Hill, 643 F.3d 807,

853 (11th Cir. 2011) (finding that the defendant’s requested instruction on good

faith was covered in the instructions on the element of the crime and the definitions

of the required state of mind). The district court’s failure to give the requested

charge did not seriously impair Appellants’ ability to present an effective defense.

Accordingly, we conclude that the district court did not abuse its discretion by

failing to give Appellants’ requested instruction that was not legally correct.

      E. Prosecutor’s Challenged Remarks

      In order for the prosecutor’s remarks during opening statement and closing

arguments to adversely affect the Kelleys’ substantial rights, her remarks must have

                                          14
suggested to the jury that “an uncalled witness would have corroborated another

witness’s testimony on an important point.” United States v. Hands, 184 F.3d 1322,

1333 (11th Cir. 1999). Because the prosecutor did not say what these witnesses

would have said in their testimony, the comments were not improper.

      Appellants also challenge the prosecutor’s remarks in her rebuttal argument.

Her remarks, in context, did not affect the Kelleys’ substantial rights. Even if they

did, the district court sufficiently instructed the jury at the outset of the trial, during

the trial, and in its final charge that the jury was to base its verdict solely on the

evidence presented and that the lawyers’ arguments were not evidence.

Accordingly, there was no error.

      F. Motions for Mistrial and a New Trial

      Appellants assert that a mistrial was warranted because the prosecutor

improperly commented on Sam Kelley’s failure to testify by asking an Applied

employee whether it would be true if Sam said that he did not know what was

going on in Applied’s business. This question would infringe Sam’s rights only if it

was manifestly intended to highlight his failure to testify or if the jury necessarily

understood it to do so. United States v. Knowles, 66 F.3d 1146, 1162–63 (11th Cir.

1995). The question did neither. Nonetheless, the district court sustained Sam

Kelley’s objection to the prosecutor’s question. Appellants further contend that the

                                            15
information the Government obtained by performing a search of Applied’s

computers was not attributed to any one defendant, so it prejudiced all of them and

should not have been admitted into evidence. The district court determined that any

failure to tie specific searches to a particular defendant went to the weight of the

evidence, not its admissibility.

      Additionally, Appellants take issue with the district court’s admission of Dr.

Levine’s testimony as it related to co-defendant Mallory Mallon. The testimony

was relevant and probative as to Mallon and as to the case as a whole given the

evidence on Levine’s steroids-dispensing practices. This court agrees that the

district court did not err by not giving a limiting instruction with respect to Dr.

Levine’s testimony; however, if it did err, it was harmless error in light of the

overwhelming evidence of guilt.

      Lastly, Appellants argue that they are entitled to a new trial based on the

cumulative effect of trial errors. A review of the record does not reveal any errors

so there can be no cumulative effect of trial errors. Accordingly, the district court

did not abuse its discretion in denying the motion for new trial.

                                          IV.

      For the foregoing reasons, we affirm the Appellants’ convictions.

      AFFIRMED.

                                           16