United States v. Ihenacho
716 F.3d 266
| 1st Cir. | 2013Background
- Baldwin and Gladys Ihenacho owned Meetinghouse Community Pharmacy in Dorchester, MA, and ran Internet pharmacies Global Access and Golden Island that dispensed drugs based on online questionnaires.
- Baldwin pled guilty to most charges and was sentenced to 63 months; the government challenged the fraud guideline application and the loss calculation.
- Gladys was tried and convicted on eight counts related to Golden Island operations, including distribution, money laundering, and conspiracy, with a 30-day sentence.
- Meetinghouse dispensed drugs for online orders without valid prescriptions; the operations were headquartered in the Dominican Republic and involved wire payments to Meetinghouse accounts.
- The district court applied an 18-level fraud enhancement based on gross receipts, and the appeals court judgments affirm both Baldwin’s sentence and Gladys’s convictions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fraud guideline applies to Baldwin’s offenses | Baldwin argues fraud guideline should not apply to his case | State and court treated offenses as governed by fraud guideline based on indictment | Yes, fraud guideline applies based on charges in the indictment |
| How to measure loss under U.S.S.G. 2B1.1(b)(1) | Loss should be measured by the gross receipts from Internet pharmacies | Loss should reflect net profits or other permissible measure | Loss figure based on gross receipts reasonable; use of loss as greater of actual or intended loss upheld |
| Sufficiency of evidence for Gladys’s convictions | Government proved Gladys knowingly participated in issuing/receiving invalid prescriptions | Defendant contends insufficient knowledge of invalid prescriptions | Evidence sufficient to support Gladys’s distributions, conspiracy, and money-laundering convictions |
Key Cases Cited
- United States v. Almeida, 710 F.3d 437 (1st Cir. 2013) (selecting guideline based on indictment conduct when multiple offenses apply)
- United States v. Innarelli, 524 F.3d 286 (1st Cir. 2008) (de novo review of guidelines interpretation; factual findings reviewed for clear error)
- United States v. Fernández-Cabrera, 625 F.3d 48 (1st Cir. 2010) (claims involving sentencing following guilty plea procedure)
- United States v. Bhutani, 266 F.3d 661 (7th Cir. 2001) (loss due to misrepresented drugs where consumers believed they were properly prescribed)
- United States v. Chatterji, 46 F.3d 1336 (4th Cir. 1995) (economic loss where drugs dispensed under fraudulently prescribed)
- United States v. Gonzalez-Alvarez, 277 F.3d 73 (1st Cir. 2002) (loss calculation is the price paid for the misrepresented product where it has little or no value)
- United States v. Munoz, 430 F.3d 1357 (11th Cir. 2005) (loss need not be reduced by proportion of satisfied customers when determining loss)
- United States v. Byors, 586 F.3d 222 (2d Cir. 2009) (value of goods is zero where legitimate value is destroyed by fraud)
- United States v. Milstein, 401 F.3d 53 (2d Cir. 2005) (contaminated or worthless goods yield appropriate loss calculations)
- United States v. Schaefer, 291 F.3d 932 (7th Cir. 2002) (valuation of misrepresented goods where value is effectively zero)
- United States v. Marcus, 82 F.3d 606 (4th Cir. 1996) (drug worthlessness affects loss calculation when safety/efficacy is compromised)