Court Opinion

ID: 615933
Source: CourtListenerOpinion
Date Created: 2011-10-24 16:13:47+00
Date Added: 2024-06-11T17:50:35.419276
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[DO NOT PUBLISH]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
                                                         OCTOBER 21, 2011
                               No. 10-13578
                                                            JOHN LEY
                           Non-Argument Calendar              CLERK
                         ________________________

               D. C. Docket No. 4:09-CR-00142-WTM-CRS-1

UNITED STATES OF AMERICA,
                                                               Plaintiff-Appellee,

                                   versus

HANNES ROBINSON,
a.k.a. John Robinson,
a.k.a. John Marsden,

                                                         Defendant-Appellant.

                         ________________________

                Appeal from the United States District Court
                   for the Southern District of Georgia
                     _________________________

                              (October 21, 2011)

Before BARKETT, HULL and MARCUS, Circuit Judges.

PER CURIAM:
      After pleading guilty, Defendant Hannes Robinson (“Robinson”) appeals

his sentence of 24 months’ imprisonment for conspiring to defraud Bayer

Healthcare (“Bayer”) of money and property, in violation of 18 U.S.C. § 371.

After review of the briefs and record, we affirm.

                               I. BACKGROUND

A.    “Blood Derivatives” for Developing Countries

      Bayer manufactured and sold “blood derivatives,” which are prescription

drugs used to treat illnesses such as cancer, hemophilia, hepatitis, and AIDS.

Bayer utilized domestic exporters to sell blood derivatives to developing countries

at substantially lower prices than Bayer offered to domestic customers.

      In the 1990s, a domestic exporter, American Medical Link, Inc. (“AML”),

purchased blood derivatives from Bayer. AML received steep discounts because

AML’s owner, Nisar Khokhar, represented that the derivatives would be exported

to developing countries. AML, however, sold the pharmaceuticals within the

United States at a profit. Bayer discovered this fraudulent scheme and severed its

relationship with AML and Khokhar.

B.    Defendant Robinson’s Offense Conduct

      Subsequently, Khokhar contacted Defendant Robinson, who agreed to

continue the scheme. Defendant Robinson (a lawyer) contacted John Perez, the

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owner and operator of Excim Trading Corporation (“Excim”), a domestic exporter

of pharmaceuticals. Perez allowed Robinson to use Excim to purchase blood

derivatives from Bayer.

      Defendant Robinson, acting as an Excim representative, contacted John

Cutter, Bayer’s Director of International Business Management. Robinson told

Cutter that Excim wanted to sell Bayer’s blood derivatives to Africa and the

Middle East. Robinson signed a written certification stating that

“Excim . . . declares that all product[s] purchased from Bayer . . . are intended for

export from the United States.” From 2000 to 2005, Excim purchased

$27,252,930.75 in blood derivatives from Bayer. Excim, despite the promise to

export, sold Bayer’s products in the United States at a substantial profit.

      Bayer’s Cutter learned of Excim’s scheme during this period, but instead of

terminating sales to Excim, Cutter joined the conspiracy. Cutter received

kickbacks in exchange for concealing his knowledge of Excim’s domestic sales of

export-only pharmaceuticals and for allowing Excim’s sales of Bayer products to

continue.

      In 2002, the Florida Department of Health (“DOH”) inspected Excim’s

business records, which indicated Excim was selling pharmaceuticals intended for

                                          3
export on the domestic market. The DOH sent a letter to Bayer asking whether

Bayer was aware of Excim’s practices.

      Without advising any of his supervisors, Cutter responded in a letter stating

that Bayer was aware of the domestic sales and that there were no restrictions on

domestic wholesale distribution of products intended for export. Subsequently,

before the grand jury, Cutter’s then-supervisor, Chris Smith, testified that (1)

Cutter did not inform him of the DOH letter or the Bayer response and (2) had

Smith known of the allegations, sales to Excim would have been terminated.

C.    The Indictment and Plea Agreement

      In June 2009, a thirteen-count indictment charged Defendant Robinson with

multiple charges, including conspiracy to commit wire fraud, mail fraud, and

transportation of goods obtained by fraud, in violation of 18 U.S.C. § 371. In a

written plea agreement, Robinson pled guilty to the § 371 conspiracy offense

(Count 1). His co-conspirator Cutter also pled guilty to the § 371 conspiracy in a

separate proceeding. Robinson’s plea agreement provided for forfeiture of

$400,000, which represented the proceeds obtained directly or indirectly from

Robinson’s conspiracy offense.

                                          4
D.      The Initial Presentence Investigation Report

        On January 11, 2010, the probation officer issued the initial presentence

investigation report (“initial PSI”). On February 16, 2010, Defendant Robinson

objected to three paragraphs in the initial PSI’s loss calculation: (1) the

assumption that Bayer suffered a loss; (2) the statement that intangible harms were

relevant to the loss calculation; and (3) the calculation of Robinson’s personal

gain.

E.      Robinson’s Motion for a Rule 17(c) Subpoena

        Shortly after objecting to the initial PSI, Robinson moved for a Rule 17(c)

subpoena to issue to Bayer, requesting disclosure of redacted material concerning

Bayer’s alleged knowledge of Excim’s domestic sales. Specifically, Robinson

requested unredacted communications concerning: (1) the 1998 revelation of

domestic sales by AML and Bayer’s decision to terminate that sales relationship;

(2) the 2003 revelation of domestic sales by Excim, and Bayer’s decision to permit

that sales relationship to continue; and (3) whether Bayer sustained any profit or

loss from Excim’s domestic sales.

        The government responded that Robinson’s motion was a “fishing

expedition” and “misleading, at best.” The government contended that whether

Bayer was defrauded or not was irrelevant because Robinson pled guilty to the

                                           5
conspiracy offense. In a supplemental response, the government alleged that

Robinson’s motion was moot because Robinson had subsequently “withdrawn his

objection to [the PSI’s] loss calculation.”

      On April 2, 2010, the district court denied Robinson’s motion, deeming it a

“fishing expedition.” The court stated that Robinson had no evidence of Bayer’s

complicity with Excim’s scheme, but “simply hope[d] that his preferred

explanation [was] true.” Robinson’s explanation was “nonsensical” because

“profit motive makes little sense as the reason why Bayer would follow the law in

1998 . . . but ignore it in 2003 because in both cases the profit motive would have

been roughly the same.” Further, the court noted that Robinson ignored evidence,

including an internal e-mail from Cutter and grand jury testimony from Lamb,

which plausibly showed that the Bayer-Excim relationship continued because

Cutter, a co-conspirator, convinced his supervisors at Bayer that the fraud

allegations about Excim were unsubstantiated.

F.    The Revised PSI and Addendum

      Robinson’s revised PSI, dated April 12, 2010, assigned a base offense level

of 6 under U.S.S.G. § 2B1.1(a)(2). The revised PSI applied (1) a two-level

enhancement, pursuant to § 2B1.1(b)(9)(A) and (C), because Robinson

participated in relocating the fraudulent scheme to evade law enforcement, and the

                                          6
offense involved sophisticated means, and (2) a three-level reduction, under §

3E1.1(a) and (b), for acceptance of responsibility. The revised PSI also added

sixteen levels under § 2B1.1(b)(1)(I), based on a loss amount of $1,747,038.50,

representing Robinson’s personal gain.

      As to the loss amount calculation, the revised PSI noted that “Bayer suffered

an actual loss,” because the co-conspirators purchased export-only blood

derivatives at a significantly reduced cost of $40,000,000, when Bayer could have

sold the pharmaceuticals domestically at a higher price. Nonetheless, the revised

PSI determined “the loss to Bayer . . . cannot reasonably be determined” because

Bayer could not calculate the domestic sale prices for each individual blood

product diverted over an extended period. “Such prices could vary widely”

depending on a variety of factors. Additionally, the revised PSI found that any

such loss calculation failed to account for non-economic harms caused by the

domestic diversion of export-only pharmaceuticals, such as not helping patients in

developing markets. Because Bayer’s actual loss could not be reasonably

determined, the revised PSI determined that “gain should be used as an alternative

measure of loss,” pursuant to U.S.S.G. § 2B1.1 cmt. n.3(B).

      The revised PSI stated that “gain” could be calculated in three ways: (1) by

subtracting Bayer’s sales price from another involved company’s sales price to the

                                         7
end user, which yielded $31,218,000 in gain; (2) by subtracting Bayer’s sales price

from all the involved companies’ sales prices to wholesalers, which yielded

$9,460,000 gain; or (3) by calculating on an individual basis how much each

conspirator personally gained, which yielded $1,747,038.50 for Robinson. The

revised PSI used the latter gain method.

      Robinson’s total adjusted offense level was 21. Based on Robinson’s

criminal history category of I, the PSI calculated Robinson’s advisory guidelines

range as 37 to 46 months.

      This time, Robinson did not object to any aspect of the revised PSI’s loss

calculations, including the computation of his gain amount of $1,747,038.50. The

Addendum to the revised PSI, also dated April 12, 2010, stated that Robinson

submitted several objections to the revised PSI which were now resolved.

Robinson’s only objection pertaining to the loss calculation argued that the revised

PSI improperly found that certain non-economic harms bolstered its conclusion

that Bayer’s actual loss was not reasonably determinable.

      Aside from that objection, Robinson objected to the revised PSI’s

statements in paragraph 37 that no one at Bayer except for Cutter was aware of the

Florida DOH inquiry. Robinson asserted that Bayer’s upper management, namely

Mary Ann Lamb, received the DOH letter stating they had discovered Bayer’s

                                           8
invoices for Excim’s domestic sales of Bayer’s export-only products. According

to Robinson, Bayer’s Lamb and Cutter drafted together the response letter stating

there were no restrictions for the wholesale domestic distribution of export-only

blood derivatives in the United States.

      Although the DOH inquiry letter was addressed to and received by Lamb,

the revised PSI noted that Lamb testified before the grand jury that (1) she had no

responsibilities in the area of sales or distribution of Bayer products, and

(2) because the DOH inquiry pertained to product distribution and pricing, Lamb

had relied upon Cutter to provide the information. The PSI further noted that

Defendant Robinson had conceded that Cutter, in consultation with Robinson,

actually drafted the response to the DOH inquiry. Accordingly, the response letter

was not “any sort of ‘certification’ from Bayer that export-only products could be

sold domestically.”

      The April 12, 2010 Addendum to the revised PSI contained numerous

attachments, including a summary of Cutter’s May 2009 proffer interview with the

government.

G.    The Sentencing

      On July 14, 2010, the day of Robinson’s scheduled sentencing, Robinson

moved to continue his sentencing hearing. To his motion, Robinson attached a

                                          9
copy of Cutter’s sentencing memorandum (the “Cutter memo”), dated July 9,

2010, and written by Cutter’s counsel. Robinson asserted he did not learn about

the Cutter memo until two days before the hearing. According to Robinson, it was

the first time any Bayer employee had disclosed that Bayer’s actual loss could be

much less than the government represented, contradicting the PSI’s conclusion

that Bayer’s loss was not reasonably determinable. The Cutter memo stated,

among other things, “[Cutter] genuinely believed [Bayer] . . . financially

benefit[ted] from being able to sell at least some [p]roduct which it otherwise

would have been forced to write off at a loss.” Robinson requested a continuance

in order to have time to investigate Bayer’s potential loss amount based on the

information in the Cutter memo.

      At the beginning of the sentencing hearing, the district court denied

Robinson’s motion for a continuance. Robinson objected to the denial in light of

what he argued was “new evidence” contained in the Cutter memo. The court

found that the Cutter memo was not “new evidence,” because Cutter had not

verified it and the memo contained only his counsel’s arguments. The court stated

Robinson had “plenty of time to file any objections” to the PSI since the final,

revised PSI was issued on April 12, 2010, several months before his July 14

sentencing.

                                         10
      Robinson’s counsel then argued:

             I understand the Court’s ruling, and I respect the ruling on the
      continuance. We would’ve liked more time to explore that. So, having
      said that, and having not had the—being denied the opportunity to
      further explore some of these new statements in the sentencing
      memorandum and whether there is a basis of fact in those, we do not
      object to the compromise the government has—that we’ve reached with
      the government regarding loss amount. There may be evidence out there
      that shows that in fact, as Mr. Cutter contends, this was financially
      beneficial to Bayer. We don’t have that. We think it may exist based on
      Cutter’s sentencing—Mr. Cutter’s sentencing memorandum. But we’re
      not in a position right now to put forward that position without further
      evidence based on the statements that Mr. Cutter said.
             So, with that, I guess a “qualified,” we don’t object to the
      compromise we’ve reached with the government.

      The court adopted in full the factual statements and guideline calculations

contained in the revised PSI. Thus, Robinson’s advisory guidelines range was 37

to 46 months. After listening to the parties’ arguments and testimony on the 18

U.S.C. § 3553(a) factors, the court sentenced Robinson to 24 months’

imprisonment. The court varied downward from the guidelines range due to

Robinson’s serious medical condition as reported by his physician. Pursuant to

the plea agreement, the court ordered Robinson to forfeit his interest in $400,000

to the United States. Neither party objected to the 24-month sentence as

pronounced.

                                        11
                                    III. DISCUSSION

A.     Motion for a Rule 17(c) Subpoena

       Robinson argues that the district court erred by denying his Federal Rule of

Criminal Procedure 17(c) motion for a subpoena. We review for abuse of

discretion the denial of a Rule 17(c) motion. United States v. Perez-Tosta, 36 F.3d
1552, 1556 n.2 (11th Cir. 1994); see also United States v. Link, 921 F.2d 1523,

1528 (11th Cir. 1991) (Rule 17(b) motion). Rule 17(c) authorizes the issuance of

a subpoena duces tecum for the production of documentary evidence at trial. Fed.

R. Crim. P. 17(c).

       Rule 17 “leaves broad discretion in the district court by allowing the trial

judge to weigh numerous factors, including materiality, relevancy, and

competency, in deciding whether to grant the request for a subpoena.” United

States v. Johnson, 495 F.2d 1097, 1102 (5th Cir. 1974) (quotation marks omitted).1

       Here, we cannot say the district court abused its discretion in finding that

Robinson’s request was a “fishing expedition” to see if the redacted information

supported Robinson’s mere allegations about why Bayer treated AML and Excim

differently, and about Bayer’s awareness of Excim’s fraudulent domestic sales. As

       1
        In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit handed down before
October 1, 1981.

                                              12
the district court noted, Robinson ignored inconvenient evidence, such as Cutter’s

admitted role in convincing Bayer that the fraud allegations were unsubstantiated.

More importantly, Robinson had already pled guilty to the fraud. The loss amount

ultimately was based on Robinson’s personal gain, which was substantially lower

than any of the PSI’s other calculations as to gain. In this sentencing context,

Robinson has failed to show the district court abused its discretion in denying

Robinson’s Rule 17(c) motion.

B.    Motion for a Continuance

      Robinson next argues that the district court erred in denying his motion to

continue the sentencing hearing. We review for abuse of discretion a district

court’s denial of a motion to continue sentencing. United States v. Douglas, 489
F.3d 1117, 1128 (11th Cir. 2007). We focus upon the reasons for the continuance

offered to the district court when the request was denied to determine whether the

denial was proper. United States v. Edouard, 485 F.3d 1324, 1350 (11th Cir.

2007). The defendant has the burden to demonstrate that “the denial was an abuse

of discretion and that it produced specific substantial prejudice.” Douglas, 489
F.3d at 1128 (internal quotation marks omitted).

      Robinson argues that the Cutter memo provided “new evidence” previously

unavailable on the issue of Bayer’s loss. Robinson asserts he should have been

                                         13
given a continuance to investigate further whether Bayer suffered any loss and

then to effectively change his prior argument that Bayer’s loss could not be

reasonably determined. However, the Cutter memo was not evidence, much less

“new” evidence, because it was not verified and merely contained sentencing

arguments by Cutter, who had a vested interest in minimizing Bayer’s loss in the

hope of obtaining a shorter sentence.

      In any event, Robinson wholly fails to show how the contentions in the

Cutter memo materially differ from information already in the record at the time of

Robinson’s sentencing hearing. More particularly, the Addendum in Robinson’s

revised PSI contained Cutter’s proffer interview, which provided essentially the

same information on Bayer’s loss. In his proffer, Cutter stated that Bayer sold

“short-dated” pharmaceuticals to domestic exporters, as opposed to writing them

off, which helped boost its overall sales. In comparison, the Cutter memo stated

that Cutter believed Bayer “financially benefit[ted] from being able to sell at least

some [p]roduct which it otherwise would have been forced to write off at a loss.”

As the district court explained, Robinson knew of the same basic information as

was contained in his co-conspirator’s sentencing memo through the course of

discovery.

                                          14
      Alternatively, the Cutter memo was not relevant given the uncontested loss

amount based on Robinson’s personal gain in the revised PSI and Addendum

thereto. By failing to object to the revised PSI’s loss calculation, Robinson

admitted to the accuracy of the loss calculation for sentencing purposes. See

United States v. Beckles, 565 F.3d 832, 844 (11th Cir. 2009) (“[A] failure to

object to allegations of fact in a PSI admits those facts for sentencing purposes and

precludes the argument that there was error in them.” (quotation marks omitted)).

For each of these reasons, the district court did not abuse its discretion in denying

Robinson’s motion for a continuance.

C.    The Revised PSI’s Loss Calculation

      Robinson argues the district court erred in relying on Robinson’s gain as the

measure of loss because the government “failed to carry its burden” of establishing

Bayer’s actual loss. We ordinarily review for clear error the district court’s loss

determination. United States v. Cabrera, 172 F.3d 1287, 1292 (11th Cir. 1999).

However, where, as here, the defendant raises an objection for the first time on

appeal, we review for plain error. United States v. Bradley, 644 F.3d 1213, 1293

(11th Cir. 2011). “To establish plain error, a defendant must show that there is (1)

error, (2) that is plain, and (3) that affects substantial rights.” United States v.

Moriarty, 429 F.3d 1012, 1019 (11th Cir. 2005). If that showing is met, we must

                                           15
then determine whether the error seriously affected the fairness, integrity, or

public reputation of the district court proceedings. Bradley, 644 F.3d at 1293. If

so, only then will we consider whether the defendant entitled to relief. Id.

      There was no error, much less plain error, here. “It is the law of this circuit

that a failure to object to allegations of fact in a PSI admits those facts for

sentencing purposes.” United States v. Wade, 458 F.3d 1273, 1277 (11th Cir.

2006). Only if the defendant challenges the PSI’s factual statements must the

government establish the disputed fact by a preponderance of the evidence.

United States v. Martinez, 584 F.3d 1022, 1027 (11th Cir. 2009). As Robinson

raised no objection to the revised PSI’s statements, the district court was entitled

to rely on the PSI’s undisputed statements. See United States v. Hedges, 175 F.3d
1312, 1315 (11th Cir. 1999).

      In the revised PSI’s loss calculation, paragraph 52 stated that “Bayer

suffered an actual loss”; paragraph 53 stated that “the loss to Bayer . . . cannot

reasonably be determined”; paragraph 54 noted that actual loss could not account

for non-economic harm; paragraph 55 stated that “gain should be used as an

alternative measure of the loss”; paragraphs 56 through 59 laid out three possible

methods for determining gain, including Robinson’s individual gain of

$1,747,038.50; and paragraph 60 recommended that the loss amount be

                                           16
$1,747,038.50. Of the entire loss calculation, Robinson’s only objection was to

paragraph 54, the intangible-harm factor. This paragraph did not even address

Bayer’s loss, but merely asserted that non-economic harm contributed to the

difficulty of calculating actual loss. Robinson questioned neither the PSI’s use of

gain as an alternate measure of loss nor its calculation of his individual gain.

      Again, at the sentencing hearing, Robinson raised no objection to the

revised PSI’s loss calculation (and in fact conceded that he had reached a

“compromise” with the government regarding the loss amount). Robinson

objected only to the denial of the continuance, which, as we have stated, was not

an abuse of discretion by the district court. Because the district court properly

relied on the revised PSI’s undisputed factual statements in making the loss

determination, there was no error.

      For all of the foregoing reasons, we affirm.

      AFFIRMED.

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