Court Opinion

ID: 4684769
Source: CourtListenerOpinion
Date Created: 2021-05-07 00:00:33.572172+00
Date Added: 2024-06-11T08:04:23.888786
License: Public Domain

Case: 19-11145     Document: 00515852421          Page: 1   Date Filed: 05/06/2021

           United States Court of Appeals
                for the Fifth Circuit                              United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                       May 6, 2021
                                   No. 19-11145
                                                                     Lyle W. Cayce
                                                                          Clerk
   United States of America,

                                                            Plaintiff—Appellee,

                                      versus

   Gas Pipe, Incorporated; Amy Lynn, Incorporated;
   Gerald Shults; Amy Herrig,

                                                       Defendants—Appellants.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                           USDC No. 3:14-CR-298-7

   Before Haynes, Higginson, and Oldham, Circuit Judges.
   Stephen A. Higginson, Circuit Judge:
          Appellants Gerald Shults and Amy Herrig, along with two corporate
   entities that they owned and controlled, owned and operated a chain of smoke
   shops in Texas and New Mexico. The stores sold synthetic cannabinoids
   branded as “herbal incense,” “potpourri,” or “aroma therapy products.”
   These products, commonly known as “spice,” were labeled “not for human
   consumption” even though the appellants intended them for exactly that. In
   late 2013, the Drug Enforcement Administration initiated an undercover
   investigation into the appellants’ spice sales, eventually resulting in their
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   arrest and prosecution.      After a three-week trial, a jury convicted the
   appellants of one count of conspiracy to defraud the United States, based on
   their efforts to defraud the Food and Drug Administration and to misbrand
   drugs.
            On appeal, the appellants argue that the district court erred by failing
   to strike the fraud theory of the indictment, by incorrectly instructing the
   jury, and by denying their motion for acquittal due to insufficient evidence.
   Shults and Herrig also challenge the substantive reasonableness of their 36-
   month sentences. For the reasons articulated below, we AFFIRM.
                                           I.
            Appellants Gas Pipe, Inc., Amy Lynn, Inc., Gerald Shults, and Amy
   Herrig owned and operated a chain of smoke shops in Texas and New
   Mexico. 1 Among the products on offer at Gas Pipe stores were synthetic-
   cannabinoid products branded as “herbal incense,” “potpourri,” or “aroma
   therapy products,” commonly known as “spice.” Spice, when smoked,
   produces a stimulant, depressant, or hallucinogenic effect on the central
   nervous system.
            For the past decade, the federal government has scheduled various
   synthetic cannabinoids as illegal controlled substances. Given that there are
   more than 700 known synthetic cannabinoids, the process of scheduling is
   iterative, with more synthetic cannabinoids being scheduled as the Drug
   Enforcement Agency (“DEA”) and Food and Drug Administration
   (“FDA”) analyze them and their effects. But regardless of whether a

            1
            Shults owned Gas Pipe, Inc. and Amy Lynn, Inc. Herrig, Shults’s daughter,
   helped run the companies.

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   synthetic cannabinoid has been scheduled, it may not be sold for human
   consumption absent FDA approval and proper labeling.
           The appellants labeled their products as “not for human
   consumption.” But, as the appellants stipulated at trial, they knew that the
   spice products sold by Gas Pipe stores were mislabeled because they were
   intended for human consumption. Indeed, Gas Pipe’s spice products were
   sometimes rated based on their “strength,” meaning how “high” it would
   get the user. Between 2011 and 2014, the appellants sold more than two
   million units of spice totaling more than $40 million in revenue.
           In late 2013, the DEA started an undercover investigation into the
   appellants’ spice sales. DEA agents posed as customers and made 34
   “controlled buys” to determine whether the appellants were selling spice for
   human consumption. The agents had the spice analyzed by a lab, and results
   revealed that the spice contained various synthetic cannabinoids. On June 4,
   2014, DEA agents executed search warrants at all of the appellants’ stores
   and warehouses and seized spice containing synthetic cannabinoids, some of
   which had already been scheduled as controlled substances.
           A grand jury returned a Third Superseding Indictment in September
   2016. The indictment charged the appellants and six of their employees with
   11 counts. 2 Count One charged the appellants with violating 18 U.S.C. § 371,
   which, inter alia, prohibits conspiracies to “defraud the United States.”
   Specifically, this Count alleged that the appellants (1) conspired to defraud
   the FDA and (2) conspired to commit felony misbranding under 21 U.S.C.
   §§ 331, 333(a)(2), and 352 “by introducing or delivering an adulterated or

           2
             Three of the employees pleaded guilty, one of whom testified for the Government
   at trial. The district court granted the fourth employee’s Rule 29 motion. The jury
   acquitted the two remaining employees.

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   misbranded drug into interstate commerce with the intent to defraud or
   mislead.”
           After a three-week trial, the jury found the appellants guilty on Count
   One and acquitted them on the remaining counts. 3 Subsequently, after a two-
   day hearing, the district court sentenced Shults and Herrig to 36 months’
   imprisonment, two years’ supervised release, and a $100 special assessment.
   The court sentenced each of the corporate entities, Gas Pipe and Amy Lynn,
   to a $25,000 fine.
                                               II.
           The appellants first make two arguments as to why Count One of the
   indictment was legally insufficient. Because they preserved their challenges,
   we review them de novo. United States v. Anderton, 901 F.3d 278, 282 (5th
   Cir. 2018).
           First, the appellants argue that the word “defraud,” as used in 18
   U.S.C. § 371, should be cabined to its common law meaning of cheating the
   Government out of property or money. It cannot, they say, reach agreements
   for the purpose of impeding a government agency’s functions. As the
   appellants acknowledge, however, a long line of Supreme Court and circuit
   precedent holds otherwise, and we reject this argument as foreclosed. 4

           3
               The ten other counts charged in the indictment were: conspiracy to commit mail
   and wire fraud (Count Two); assorted controlled substance–related offenses (Counts
   Three through Ten); and conspiracy to commit money laundering (Count Eleven). Prior
   to trial, the district court granted the Government’s motion to dismiss Count Two.
           4
            See Haas v. Henkel, 216 U.S. 462, 479 (1910) (“[I]t is not essential that such a
   conspiracy shall contemplate a financial loss or that one shall result. The statute is broad
   enough in its terms to include any conspiracy for the purpose of impairing, obstructing, or
   defeating the lawful function of any department of government.”); Hammerschmidt v.
   United States, 265 U.S. 182, 188 (1924) (“It is not necessary that the government shall be
   subjected to property or pecuniary loss by the fraud, but only that its legitimate official

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           Second, the appellants argue that this court should impose a “limiting
   principle” on § 371’s defraud clause in light of the Supreme Court’s recent
   construction of purportedly similar language in another federal criminal
   statute. Specifically, they ask this Court to extend a rule announced in
   Marinello v. United States, 138 S. Ct. 1101 (2018)—that to convict under 26
   U.S.C. § 7212(a)’s omnibus clause, the Government must show a “nexus”
   between the defendant’s conduct and a pending or reasonably foreseeable
   tax-related administrative proceeding, such as an investigation or audit, id. at
   1109–10—and apply it to § 371. A recent case, United States v. Herman, No.
   19-50830, --- F.3d ---- (5th Cir. May 6, 2021), controls. In Herman, we
   rejected an identical argument and declined to extend the Marinello nexus
   requirement to § 371’s defraud clause, and we reject the appellants’
   arguments as foreclosed here.
           These same two legal arguments also form the basis of the appellants’
   challenge to the district court’s conspiracy-to-defraud jury instructions, and
   thus that challenge also fails. The appellants preserved their objections to
   the conspiracy-to-defraud instructions.                We ordinarily review jury
   instructions for abuse of discretion. But when, as here, the appellants argue
   that the instruction misstates an element of the offense, that is an issue of
   statutory construction, which we review de novo subject to harmless error
   review. United States v. Garcia-Gonzalez, 714 F.3d 306, 312 (5th Cir. 2013);
   United States v. Guevara, 408 F.3d 252, 257 (5th Cir. 2005).

   action and purpose shall be defeated by misrepresentation, chicane, or the overreaching of
   those charged with carrying out the governmental intention.”); Dennis v. United States, 384
   U.S. 855, 861 (1966) (affirming Hammerschmidt); United States v. Haga, 821 F.2d 1036,
   1040 (5th Cir. 1987) (applying Hammerschmidt); United States v. Hopkins, 916 F.2d 207, 213
   (5th Cir. 1990) (same); United States v. Martin, 332 F.3d 827, 834 (5th Cir. 2003) (same);
   see also United States v. Coplan, 703 F.3d 46, 61 (2d Cir. 2012) (applying Hammerschmidt
   and its progeny despite noting “infirmities in the history and deployment of [§ 371]”).

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          Specifically, the appellants argue that the district court committed
   reversible error in its conspiracy-to-defraud jury instructions by (1) failing to
   limit the defraud theory to agreements to cheat the Government out of
   money or property and (2) refusing to provide a Marinello instruction that the
   Government must prove a nexus between the conspiracy and a particular
   administrative proceeding. Because we rejected the appellants’ two legal
   arguments above about the scope of § 371’s defraud clause and the effect of
   Marinello, we accordingly hold that the district court’s conspiracy-to-defraud
   jury instructions were correct statements of law.
                                         III.
          The appellants next challenge the district court’s jury instructions
   about felony misbranding in two respects. First, they argue that 21 U.S.C.
   § 333(a)(2)’s requirement that a violation be committed with “intent to
   defraud or mislead” incorporates a separate materiality element that was not
   included in the jury charge. Second, the appellants contest the district
   court’s refusal to instruct the jury that an “intent to defraud or mislead”
   under § 333(a)(2) requires “an intent to deceive or cheat connected with the
   misbranding.”
                                          A.
          The appellants’ first claim of instructional error—that the district
   court failed to include materiality as an element of felony misbranding—
   asserts misstatement of an element and hinges on statutory interpretation.
   The court’s review is therefore de novo, subject to harmless error analysis.
   See Garcia-Gonzalez, 714 F.3d at 312; Guevara, 408 F.3d at 257.
          Section 333 of the Food, Drug, and Cosmetic Act (“FDCA”) imposes
   felony liability for misbranding drugs with the “intent to defraud or mislead.”
   21 U.S.C. § 333(a)(2). Invoking Neder v. United States, 527 U.S. 1 (1999), and
   United States v. Watkins, 278 F.3d 961 (9th Cir. 2002), the appellants argue

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   that this FDCA provision requires proof of materiality.           In general, a
   statement is material if it has “a natural tendency to influence, or [is] capable
   of influencing, the decision of the decisionmaking body to which it was
   addressed.” Neder, 571 U.S. at 16 (alteration in original) (quoting United
   States v. Gaudin, 515 U.S. 506, 509 (1995)); see also United States v. Arlen, 947
   F.2d 139, 143 (5th Cir. 1991) (finding felony misbranding when the defendant,
   inter alia, acted with the “specific intent to defraud or mislead an identifiable
   government agency” (emphasis added)). Thus, if applicable here, proof of
   materiality would require demonstrating that the appellants’ misbranding
   had a tendency to influence, or was capable of influencing, the FDA’s
   decisionmaking.
          In Neder, the Supreme Court considered whether materiality is an
   element of a “scheme or artifice to defraud” under the federal mail fraud (18
   U.S.C. § 1341), wire fraud (id. § 1343), and bank fraud (id. § 1344) statutes.
   571 U.S. at 20. Invoking the “well-established rule of construction that
   ‘[w]here Congress uses terms that have accumulated settled meaning under
   . . . the common law, a court must infer, unless the statute otherwise dictates,
   that Congress means to incorporate the established meaning of these
   terms,’” the Court concluded that “the common law could not have
   conceived of ‘fraud’ without proof of materiality.” Id. at 21–22 (alterations
   in original) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322
   (1992)). Accordingly, the Court held that it “must presume that Congress
   intended to incorporate materiality ‘unless the statute otherwise dictates.’”
   Id. at 23 (quoting Darden, 503 U.S. at 322). In Watkins, the Ninth Circuit
   followed the logic of Neder and extended the materiality requirement to the
   “intent to defraud” and the “intent to . . . mislead” FDCA provisions at
   issue here. 278 F.3d at 966, 969.

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           Assuming without deciding that materiality is an element of
   § 333(a)(2)’s felony misbranding offense, 5 under the facts of this case, any
   error was harmless. See Neder, 527 U.S. at 8–15.
           To the extent that the district court erred in omitting materiality as an
   element of § 333(a)(2), the error was harmless if, “after a ‘thorough
   examination of the record,’ [we are] able to ‘conclude beyond a reasonable
   doubt that the jury verdict would have been the same absent the error.’”
   United States v. Cessa, 785 F.3d 165, 186 (5th Cir. 2015) (quoting United
   States v. Skilling, 638 F.3d 480, 482 (5th Cir. 2011)); see also Neder, 527 U.S.
   at 19. Here, we must determine whether the jury would have found that the
   appellants’ misbranding was material—that is, had “a natural tendency to

           5
              The text and structure of the FDCA cast doubt as to whether Neder extends to
   § 333(a)(2)’s felony misbranding offense. Although § 333(a)(2) itself does not specifically
   reference materiality, it is interpretively significant that other sections of the FCDA do.
   E.g., 21 U.S.C. §§ 331(q)(2), 331(y)(1), 334(a)(1)(B), 335a(g)(1)(A)(ii), 335b(a)(1),
   335c(a)(1), 343(a)(2) (expressly prohibiting misleading representations or omissions that
   are “material”). This suggests choice, and a choice to not employ a term in one provision
   but to use it in neighboring provisions suggests a meaning through the absence of that term.
   See Pereira v. Sessions, 138 S. Ct. 2105, 2114 (2018) (looking to a “neighboring statutory
   provision” for “contextual support”); Russello v. United States, 464 U.S. 16, 23 (1983)
   (“[W]here Congress includes particular language in one section of a statute but omits it in
   another section of the same Act, it is generally presumed that Congress acts intentionally
   and purposely in the disparate inclusion or exclusion. . . . We would not presume to ascribe
   this difference to a simple mistake in draftsmanship.” (first alteration in original) (internal
   quotation marks and citation omitted)). Another provision of the FDCA, however, cuts in
   the opposite direction. The statute’s definitions section indicates that materiality must be
   considered in evaluating misbranding offenses. See 21 U.S.C. § 321(n) (“If an article is
   alleged to be misbranded because the labeling or advertising is misleading, then in
   determining whether the labeling or advertising is misleading there shall be taken into
   account . . . the extent to which the labeling or advertising fails to reveal facts material in
   the light of such representations or material with respect to consequences which may result
   from the use of the article . . . .” (emphasis added)). But we pretermit this debate because,
   under the facts of this case, any error the district court made in omitting materiality as an
   element of § 333(a)(2) was harmless.

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   influence, or [was] capable of influencing” the FDA’s decisionmaking.
   Neder, 527 U.S. at 16; accord Arlen, 947 F.2d at 143.
          Our review of the record shows, beyond a reasonable doubt, that the
   jury would have concluded that the appellants’ misbranding tended to
   influence, or was capable of influencing, the FDA’s decisionmaking based on
   evidence presented at trial.
          First, Lawrence Shahwan, who supplied spice to the appellants,
   testified that the reason he labeled his product “Not for Human
   Consumption” was because that was “the only way that we could sell it to
   the public. If it was stated for human consumption, it would be subject to FDA
   regulations. And obviously we wouldn’t be able to sell these products for
   human consumption.” Second, Joshua Campbell, a former manager of a Gas
   Pipe store, testified that the appellants sold spice packaged as if it were
   “herbal incense” or “potpourri” even though “[i]t really wasn’t.” He
   testified that this terminology was “important” to Shults and Herrig
   “[b]ecause of the legality of what spice was.” Directly connecting this
   practice to the appellants’ intent, Campbell testified that Shults and Herrig
   “didn’t want to sell [spice] as a consumable because it would have to go through the
   FDA . . . .” Campbell was not simply guessing as to the appellants’ intent;
   he testified that they were “very strict on terminology” and that he
   participated in weekly conference calls with Shults and Herrig in which spice
   sales were their “primary concern.”
          Although the Government highlights other evidence—including
   emails and contemporaneous notes that show the appellants were monitoring
   FDA actions regarding spice and additional witness testimony about the
   appellants’ knowledge of the regulatory landscape—Shahwan’s and
   Campbell’s testimony are sufficient to show that the appellants sold spice
   labeled “Not for Human Consumption” to evade the FDA’s regulatory

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   scrutiny and that, if the appellants’ products had been correctly labeled as
   intended for human consumption, they would have been subject to FDA
   regulation. The mislabeling therefore had “a natural tendency to influence,
   or [was] capable of influencing” the FDA’s decisionmaking and thus was
   “material.” Neder, 527 U.S. at 16.
                                          B.
          The appellants’ second claim is that the district court should have
   specifically defined § 333(a)(2)’s use of “intent to defraud or mislead” as
   “an intent to deceive or cheat connected with the misbranding.”
          This argument presents a “framing” issue reviewed for abuse of
   discretion. Eastman Chem. Co. v. Plastipure, Inc., 775 F.3d 230, 240 (5th Cir.
   2014); see also United States v. Jones, 664 F.3d 966, 978 (5th Cir. 2011). Under
   that standard, “[w]e will reverse the district court’s decision only if the
   requested instruction (1) was a substantially correct statement of the law,
   (2) was not substantially covered in the charge as a whole, and (3) concerned
   an important point in the trial such that the failure to instruct the jury on the
   issue seriously impaired the defendant’s ability to present a given defense.”
   United States v. Wright, 634 F.3d 770, 775 (5th Cir. 2011) (internal quotation
   marks omitted) (quoting Cooper Indus., Inc. v. Tarmac Roofing Sys., Inc., 276
   F.3d 704, 714 (5th Cir. 2002)). We “afford the trial court great latitude in
   the framing and structure of jury instructions.” Eastman, 775 F.3d at 240.
          Count One of the indictment charged the appellants with conspiring
   to defraud the United States by (1) conspiring to defraud the FDA and
   (2) conspiring to introduce misbranded drugs into interstate commerce with
   the intent to defraud or mislead. When instructing the jury about the
   conspiracy to defraud the FDA, the district court separately defined
   “defraud”: “The word ‘defraud’ here is not limited to its ordinary meaning
   of cheating the government out of money or property; it also includes

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   impairing, obstructing, defeating, or interfering with the lawful function of
   the government or one if its agencies by dishonest means.” When instructing
   the jury about conspiracy to commit felony misbranding, the district court
   did not separately define “defraud,” but when instructing the jury about the
   lesser included offense, conspiracy to commit simple misbranding, the
   district court referenced its earlier definition of the word “defraud”: “You
   should find the defendant you are considering guilty of conspiracy to commit
   simple misbranding if . . . the defendant made an agreement as a result of
   which the misbranding offense . . . occurred, but that the government has not
   proved that the defendant you are considering intended to defraud or
   mislead, as I have defined that phrase.”         The appellants argue that by
   instructing the jury on felony misbranding with the bare statutory language
   “intent to defraud or mislead” and then cross-referencing the “defraud”
   definition, the district court’s instructions confused the jury on the meaning
   of “defraud or mislead” as used in the felony misbranding offense.
          This court rejected a similar argument in United States v. Haas, 171
   F.3d 259 (5th Cir. 1999). Like the appellants, the defendant in that case was
   convicted of conspiracy to defraud the FDA and conspiracy to commit felony
   misbranding. Id. at 263–64. Also like the appellants, the defendant argued
   that “the district court erred when it failed to define the phrase ‘intent to
   defraud’” under § 333(a)(2) as intent “to deceive or to cheat.” Id. at 267.
   This court affirmed, holding that “this additional language, beyond the
   instruction that the court gave, would add little to the jurors’ understanding
   of the phrase ‘intent to defraud.’” Id.
          The appellants try to distinguish Haas by pointing out that the jury
   instructions in that case did at least specify that fraudulent misbranding
   requires “deceit, craft or trickery or at least . . . means that are dishonest.”
   Here, however, the district court’s instructions on the meaning of “defraud”
   included a similar gloss, referencing “cheating” and “dishonest means.”

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   The appellants do not explain why these words should be deemed
   inadequate. Moreover, courts have interpreted § 333(a)(2)’s use of “intent
   to defraud or mislead” along similar lines as § 371’s use of “defraud.”
   Compare Tanner v. United States, 483 U.S. 107, 128 (1987) (“[T]he fraud
   covered by [§ 371] reaches any conspiracy for the purpose of impairing,
   obstructing or defeating the lawful function of any department of
   Government.” (internal quotation marks and citation omitted)), with Arlen,
   947 F.2d at 143 (holding that “intent to defraud or mislead” under
   § 333(a)(2) reaches misbranding offenses “committed with the specific
   intent to defraud or mislead an identifiable government agency”). The
   district court did not err in declining to specifically equate “intent to defraud
   or mislead” with “intent to deceive or cheat.”
          The appellants also argue that the district court erred by not
   instructing the jury that an “intent to deceive or cheat” must be
   “connected” to misbranding. We disagree. Although the district court did
   not adopt the exact wording proposed by the appellants, it instructed the jury
   that a conviction for felony misbranding required a finding “[t]hat a person
   mislabeled the drug and the defendant, by such mislabeling, intended to
   defraud or mislead.”
          For these reasons, the district court’s jury instruction “substantially
   covered” the appellants’ proposed instruction and did not misstate the law.
   Wright, 634 F.3d at 775.
                                         IV.
          The appellants next challenge the sufficiency of the evidence for
   conviction under Count One.
          The parties agree that the appellants preserved their sufficiency
   challenges to their convictions by timely moving for acquittal under Rule 29
   of the Federal Rules of Criminal Procedure. See United States v. Bolton, 908

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   F.3d 75, 89 (5th Cir. 2018); Fed. R. Crim. P. 29(a), (c). This court
   “review[s] preserved challenges to the sufficiency of the evidence de novo,
   but [the court is] highly deferential to the verdict.” United States v. Scott,
   892 F.3d 791, 796 (5th Cir. 2018) (internal quotation marks and citation
   omitted).     This means that the court “view[s] all evidence, whether
   circumstantial or direct, in the light most favorable to the government, with
   all reasonable inferences and credibility choices to be made in support of the
   jury’s verdict.” Bolton, 908 F.3d at 89 (internal quotation marks and citation
   omitted). Evidence is sufficient to support a conviction so long as “any
   rational trier of fact could have found the essential elements of the crime
   beyond a reasonable doubt.” Scott, 892 F.3d at 797 (emphasis, internal
   quotation marks, and citation omitted).
                                        A.
          The appellants raise a combination of legal and factual challenges to
   the sufficiency of the evidence supporting their convictions for conspiracy to
   defraud the FDA. They assert that (1) Marinello upsets their conviction
   because there was insufficient evidence showing that the appellants agreed to
   interfere with or obstruct “a particular administrative proceeding”; (2) the
   FDA could not have been defrauded because there was no evidence of an
   ongoing FDA investigation into their spice sales before the June 2014 raid;
   and (3) the evidence was insufficient for the jury to rationally conclude that
   they intended to defraud the FDA.
          First, the appellants reprise their argument that Marinello, 138 S. Ct.
   1101, required the Government to put on evidence that they agreed to
   interfere with or obstruct a particular FDA proceeding that was then pending
   or reasonably foreseeable. For the reasons already discussed, supra section
   II, the Government was not required to make this showing.

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          Second, the appellants claim that the FDA could not have been
   defrauded within the meaning of § 371 because there was no evidence of the
   FDA’s involvement prior to the June 2014 raids and therefore they could not
   have intentionally or with knowledge defeated the FDA’s mission. This
   argument misstates the law: the Government is not required to establish the
   FDA’s participation in the underlying criminal investigation or the
   appellants’ knowledge of any such participation. “The defraud clause of
   § 371 reaches . . . any conspiracy designed to impair, obstruct, or defeat the
   lawful function of any department of the government”—in this case, a
   conspiracy to avoid contact with the FDA to avoid regulation. United
   States v. Clark, 139 F.3d 485, 488–89 (5th Cir. 1998); see also United States v.
   Dessart, 823 F.3d 395, 403 (7th Cir. 2016) (“§ 333(a)(2) applies if the
   defendant intended to deceive either consumers or the FDA or both.”). At
   bottom, this argument repackages the appellants’ incorrect Marinello
   rationale.
          Third, the appellants assert that the Government did not present
   evidence from which the jury could conclude that they intended to defraud
   the FDA. We disagree. As discussed, supra section III.A, the appellants’
   supplier, Lawrence Shahwan, and their employee, Joshua Campbell, both
   testified that the appellants labeled these products “not for human
   consumption” to avoid scrutiny or regulation by the FDA. Shahwan also
   testified that it was obvious that the products could not have been sold if
   intended for human consumption. Viewing the evidence in the light most
   favorable to the Government and all reasonable inferences in support of the
   jury’s verdict, Bolton, 908 F.3d at 89, we conclude that a rational jury could
   find that the evidence was sufficient to convict the appellants of conspiracy
   to defraud the FDA. See Haas, 171 F.3d at 266 (“We need not list all of the
   evidence a jury could have considered in concluding that [the appellants]

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   intended to defraud the FDA—we will only consider a few examples.”);
   Dessart, 823 F.3d at 403.
                                         B.
          The appellants also argue that the evidence was insufficient to prove
   the felony misbranding offense because the Government did not establish
   beyond a reasonable doubt that the public was misled by the labeling or that
   the appellants intended to defraud or mislead the Government. We need not
   reach this question. The district court gave a unanimity instruction, and the
   jury convicted the appellants on Count One after separately concluding that
   the appellants conspired to defraud the FDA and also that they conspired to
   commit felony misbranding. The appellants’ convictions on Count One can
   be sustained by our conclusion that the evidence was sufficient to convict the
   appellants of conspiring to defraud the FDA. See United States v. Mauskar,
   557 F.3d 219, 229 (5th Cir. 2009) (“[A] general guilty verdict on a multiple-
   object conspiracy may stand even if the evidence is insufficient to sustain a
   conviction on one of the charged objects.” (alteration in original) (quoting
   United States v. Mann, 493 F.3d 484, 492 (5th Cir.2007))).
                                         V.
          Finally, Shults and Herrig appeal the substantive reasonableness of
   their 36-month sentences, which we review for abuse of discretion. United
   States v. Sifuentes, 945 F.3d 865, 868 (5th Cir. 2019).
          “This court recognizes three types of sentences: (1) a sentence within
   a properly calculated Guidelines range; (2) a sentence that includes an
   upward or downward departure as allowed by the Guidelines; and (3) a non-
   Guideline sentence or a variance that is outside of the relevant Guidelines
   range.” United States v. Brantley, 537 F.3d 347, 349 (5th Cir. 2008) (internal
   quotation marks omitted) (quoting United States v. Smith, 440 F.3d 704, 706–
   08 (5th Cir. 2006)). If “the district court imposes a sentence that is outside

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   the guidelines framework, such a sentence is considered a variance.” United
   States v. Jacobs, 635 F.3d 778, 782 (5th Cir. 2011) (internal quotation marks
   omitted). The district court must explain its reasons for imposing any
   variance under the § 3553(a) factors. Id. “A non-Guideline sentence
   unreasonably fails to reflect the statutory sentencing factors where it
   (1) does not account for a factor that should have received significant weight,
   (2) gives significant weight to an irrelevant or improper factor, or
   (3) represents a clear error of judgment in balancing the sentencing factors.”
   Smith, 440 F.3d at 708.
          Contrary to Shults and Herrig’s assertion, the district court imposed
   their sentences as upward variances after carefully considering the § 3553(a)
   factors. The court highlighted that Shults and Herrig engaged in “very
   serious” conduct because they sold a product that “is dangerous and
   addictive”; discussed Shults’s and Herrig’s histories and characteristics;
   and confirmed that the sentences imposed were necessary “to promote
   respect for the law, while justly punishing” Shults and Herrig and “hopefully
   deterring others from engaging in similar conduct.” The court recognized
   that the 36-month sentences exceeded the Guidelines range for Shults and
   Herrig but confirmed its view that the § 3553(a) factors required those
   sentences.
          In their opening brief, Shults and Herrig incorrectly argue that the
   variance rested “on the same ground” as the departure, and they do not
   argue that the district court misapplied the § 3553(a) factors. Only in their
   reply brief do they assert an error as to the § 3553(a) factors, but arguments
   raised for the first time in a reply brief are waived. United States v. Jackson,
   426 F.3d 301, 304 n.2 (5th Cir. 2005). Shults and Herrig have not shown that
   the district court abused its discretion in imposing the upward variances.

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                                     No. 19-11145

          Because the district court justified Shults’s and Herrig’s sentences as
   both variances and departures, we need not consider the propriety of their
   sentences as an upward departure. Instead, we affirm the sentences on the
   district court’s basis as an upward variance justified by the § 3553(a) factors.
   See United States v. Hebert, 813 F.3d 551, 561 (5th Cir. 2015) (declining to
   reach an “issue of first impression” whether a particular sentencing
   departure was impermissible “because [defendant’s] sentence may be
   affirmed on the district court’s alternate basis for the sentence—that the
   sentence is appropriate as an upward variance”); Brantley, 537 F.3d at 349
   (“The district court stated that based on the § 3553(a) factors, the sentence
   was outside of the Guidelines range both as an upward departure and as a
   variance. For present purposes, however, the specific characterization is
   irrelevant because . . . the sentence imposed was reasonable under the
   totality of the relevant statutory factors.” (internal quotation marks and
   citation omitted)).
                                         VI.
          We AFFIRM the district court on all issues, holding that the
   allegations in Count One of the indictment charging the appellants with
   conspiracy to defraud the FDA in violation of 18 U.S.C. § 371 were legally
   sufficient, the district court correctly instructed the jury on the charge of
   conspiracy to defraud the Government, the district court correctly instructed
   the jury on the charge of conspiracy to commit felony misbranding, the
   evidence was sufficient for the jury to convict the appellants on Count One,
   and Shults’s and Herrig’s 36-month prison sentences were substantively
   reasonable.

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