UNITED STATES OF AMERICA, v. JARED WHEAT and HI-TECH PHARMACEUTICALS, INC., Defendants.
CRIMINAL ACTION NO. 1:17-cr-00229-AT-CMS
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION
April 15, 2019
CATHERINE M. SALINAS, United States Magistrate Judge
Three motions to dismiss filed by Defendant Jared Wheat and Defendant Hi-Tech Pharmaceuticals, Inc. (“Hi-Tech“) are presently before the Court. [Docs. 189, 192, 193].
On September 28, 2017, a Grand Jury sitting in the Northern District of Georgia returned an eighteen-count First Superseding Criminal Indictment (the “Indictment“) against Mr. Wheat, Hi-Tech, and John Brandon Schopp, alleging a variety of crimes relating to certain dietary supplements manufactured and sold by Hi-Tech. [Doc. 7]. The first nine counts of the Indictment allege wire fraud and money-laundering offenses, which are not at issue in the pending motions to dismiss.
Defendants are charged in Counts Ten and Eleven with crimes related to the Hi-Tech product Choledrene, which Defendants allegedly marketed and sold without disclosing the presence of the substance lovastatin on the product labels. [Doc. 7 ¶¶ 19-35]. Specifically, Defendants are charged with a conspiracy to violate the Federal Food, Drug, and Cosmetic Act,
The remaining counts target five Hi-Tech products—Superdrol, Equibolin, 1-AD, 1-Testosterone, and Androdiol (the “Prohormone Products“)—that the Government contends contained anabolic steroids. [Doc. 7 ¶¶ 36-43]. Specifically, Defendants are charged in Count Twelve with being part of a conspiracy to violate
Defendants have filed a motion to dismiss the FDCA and CSA counts (Counts Ten through Eighteen) for selective prosecution based on the argument that other (unnamed) supplement manufacturers are doing the same thing that Mr. Wheat and Hi-Tech are doing but are not being prosecuted. [Doc. 193]. Defendants have also filed a motion to dismiss the anabolic steroid counts (Counts Twelve through Eighteen) for failure to allege a criminal quantity of any anabolic steroid, arguing that the lab results show only trace amounts of the anabolic steroids, which Defendants contend is insufficient to support a criminal conviction. [Doc. 189]. Finally, Defendants also move to dismiss Count Ten, the lovastatin conspiracy count, for failure to allege a criminal conspiracy consisting of at least two human actors. [Doc. 192].
I. Motion to Dismiss for Selective Prosecution [Doc. 193]
Defendants first move the Court to dismiss Counts Ten through Eighteen of the Indictment, contending that the Government has impermissibly targeted them for prosecution. [Doc. 193]. Arguing that this criminal action was brought in retaliation for Defendants’ exercise of their rights under the First and Fifth Amendments to the United States Constitution, Defendants claim that they are now being prosecuted because they have refused to acquiesce to the legally unsupported demands of the Food and Drug Administration (“FDA“). [Id. at 1-2].
Defendants assert that there are legitimate, not-unlawful reasons why lovastatin might be found in Hi-Tech‘s Choledrene product and why trace amounts of anabolic steroids might be found in Hi-Tech‘s Prohormone Products. According to Defendants, Choledrene is made from red yeast rice, and lovastatin naturally occurs in red yeast rice.2 As for the Prohormone Products, Defendants explain that
A. Legal Standard for Selective Prosecution
Prosecutors are given broad discretion in deciding who to prosecute and how to enforce federal law. See United States v. Armstrong, 517 U.S. 456, 464 (1996). “As a result, the presumption of regularity supports their prosecutorial decisions and, in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties.” Id. (citations, brackets, and quotation marks omitted). “It is axiomatic that with limited law enforcement resources, the Government is unable to prosecute every crime that is committed.” United States v. Brantley, 803 F.3d 1265, 1271 (11th Cir. 2015).
Thus, every prosecution is in some way “selective,” in that the prosecutors must select which suspected crimes to prosecute and which to let go. The
Prosecutors’ charging discretion, i.e., its power to “select” which persons or entities to prosecute, however, is constrained by the Constitution, specifically the equal protection component of the Due Process Clause of the Fifth Amendment. See Armstrong, 517 U.S. at 464; see also Wayte v. United States, 470 U.S. 598, 608 (1985) (“[A]lthough prosecutorial discretion is broad, it is not unfettered. Selectivity in the enforcement of criminal laws is . . . subject to constitutional constraints.“) (internal quotations omitted). The decision whether to prosecute may not be based on an unjustifiable standard such as race, religion, or other arbitrary classification; the exercise of protected statutory and constitutional rights is one such protected classification. See Wayte, 470 U.S. at 608.
Defendants bear a “demanding” burden when seeking to establish that they are being selectively prosecuted in an unconstitutional manner. See Armstrong, 517 U.S. at 463. To dispel the presumption that a prosecutor has not violated equal
Courts apply a two-pronged test when reviewing a motion to dismiss for selective prosecution. Defendants must show both a discriminatory effect and a discriminatory motive, that is: (1) that the defendant is similarly situated to another not prosecuted for the same offense; and (2) that the prosecution is motivated by a discriminatory purpose rising to the level of a constitutional violation. See United States v. Brantley, 803 F.3d 1265, 1271 (11th Cir. 2015). I will address these two prongs in turn.
B. Prong One: Discriminatory Effect/Similarly Situated
The first prong of the test requires a defendant to show that “similarly situated individuals were not prosecuted . . . .” United States v. Smith, 231 F.3d 800, 809 (11th Cir. 2000). According to the Eleventh Circuit:
[A] “similarly situated” person for selective prosecution purposes [is] one who engaged in the same type of conduct, which means that the comparator committed the same basic crime in substantially the same manner as the defendant—so that any prosecution of that individual would have the same deterrence value and would be related in the same way to the Government‘s enforcement priorities and enforcement plan—and against whom the evidence was as strong or stronger than that against the defendant.
Counts Ten and Eleven of the Indictment pertain to Defendants’ manufacturing of the product Choledrene and its introduction into interstate commerce. According to the Indictment, Hi-Tech‘s Choledrene contained lovastatin, which the Indictment describes as “the active ingredient in several FDA-approved prescription drugs.” [Doc. 7 ¶ 22]. The Indictment charges that due to the presence of lovastatin, Choledrene was not a “dietary supplement” under the FDCA, but instead was a “drug” because it was an article other than food intended to affect the structure or function of the human body. [Id.]. Defendants argue that over the past decade, the Government has routinely handled red yeast rice/lovastatin issues with civil rather than criminal proceedings, typically by issuing informal and advisory warning letters “which can serve to start a dialogue with the manufacturer or retailer about the legality of the subject product, whereas the Government here filed criminal charges against Defendants.” [Doc. 223 at 6]. Defendants complain that they did not receive such a letter nor the “opportunity for dialog” with respect to their red yeast rice product. [Id.].
In terms of evidence to support their claim of selective prosecution, Defendants have filed printouts from web pages from supplement retailers offering for sale a variety of red yeast rice supplements [Docs. 193-1 through 193-4] and DHEA supplements [Docs. 193-6, 193-7, 193-8, 193-10, 193-11], apparently to demonstrate that such products are similar to Hi-Tech‘s allegedly offending products and are readily available in the marketplace. Defendants, however, have not provided evidence to show the specific ingredients, the quantities of those ingredients, and/or whether any lovastatin or anabolic steroids were found in the comparator products. In the absence of such information, the Court cannot say that the products advertised were similar in all material respects to the Choledrene at
But even if the proposed comparator products are, in fact, similar to Hi-Tech‘s products and contain a similar amount of the offending substances, Defendants have failed to show by clear evidence that any person or entity who either manufactured or sold those products was similar to Mr. Wheat and/or Hi-Tech. Defendants have not identified any proposed comparator. There is no evidence as to who manufactured the products shown on the web page printouts, much less the criminal history or other characteristics of any such person or entity. In the absence of this kind of evidence, the Court is unable to determine whether there is any person or entity who committed the same basic conduct in substantially the same manner as the conduct in which Mr. Wheat and/or Hi-Tech are alleged to have engaged.
While the Court has no information about any person or entity whom Defendants believe is an appropriate comparator, the Court does have information about Mr. Wheat and Hi-Tech. Mr. Wheat is a twice-convicted felon, who previously served separate 24-month and 50-month prison sentences in connection with federal controlled substances charges, mail/wire fraud, and/or introduction of unapproved/adulterated drugs into interstate commerce; Hi-Tech previously pled guilty to one count of conspiracy to commit mail/wire fraud and to introduce
C. Prong Two: Discriminatory Purpose
But even if Defendants had made such a showing, their motion still fails for the second, independent reason that Defendants have not met their “heavy burden” of showing that any such difference in treatment was motivated by a discriminatory purpose rising to the level of a constitutional violation. See United States v. Smith, 231 F.3d 800, 809 (2000) (citing United States v. Armstrong, 517 U.S. 456, 465 (1996)); Owen v. Wainwright, 806 F.2d 1519, 1523 (11th Cir. 1986). Here, Defendants argue that they have been singled out, not because they are members of any particular racial, ethnic, or religious group, but rather because they have repeatedly exercised their constitutional rights to challenge the Government. [Doc. 223 at 12]. Defendants speculate that they have been prosecuted because they have been “a thorn in the FDA‘s side for close to fifteen years.” [Doc. 193 at 6, 9]. Defendants blame their prosecution on the fact that unlike “most or all other dietary supplement manufacturers” who have acquiesced to the demands of the FDA, Defendants have chosen to fight the FDA by challenging the FDA‘s rule-making, by engaging in litigation, by filing statements of interest in civil forfeiture cases, and by
As noted previously, the exercise of protected statutory and constitutional rights is a prohibited basis for selecting a defendant for prosecution. See Wayte v. United States, 470 U.S. 598, 610 (1985). Defendants have no evidence, however, to support their claim. While it may be true that Defendants are unique in their uncompromising willingness to challenge the FDA at every turn (even though such efforts, more often than not, have been unsuccessful), Defendants have presented no actual evidence that the Government chose to prosecute them (and refrained from prosecuting others) based on Defendants’ exercise of their constitutional rights.
Moreover, while Defendants characterize their own conduct as the “exercise of constitutional [First and Fifth Amendment] rights . . . to challenge the Government in the courts of law and public opinion” [Doc. 223 at 12], the Government paints a different picture—that of “criminal recidivists” and repeat violators of the FDCA and other federal statutes [Doc. 213 at 9]. Indeed, it appears that Defendants have a long history of refusing to comply with Government warnings and with Court orders. While they may wish to characterize such conduct as the exercise of their constitutional rights, there is no corresponding constitutional right to manufacture and distribute misbranded or adulterated dietary supplements
Defendants’ claim of selective prosecution is based on the fact that they are being prosecuted, while others are not. This is an insufficient basis for establishing a selective prosecution claim. See United States v. Hill, No. 1:16-cr-051-TWT-JSA, 2016 WL 6246887, at *5 (N.D. Ga. Sept. 16, 2016), report and recommendation adopted by 2016 WL 6217122 (N.D. Ga. Oct. 26, 2016) (denying motion to dismiss for selective prosecution where defendant relied entirely upon the fact that he was being prosecuted for bid rigging while others who committed the same violation were not). Defendants have failed to present clear evidence that the reason they were charged (and others were not charged) is that the Government “want[s] to punish Defendants for exercising their constitutional right to challenge the Government.” [Doc. 223 at 12]. See United States v. Johnson, 577 F.2d 1304, 1309 (5th Cir. 1978) (recognizing that “[s]election . . . is not impermissible solely because it focuses upon those most vocal in their opposition to the law which they are accused of violating“).
In the end, Defendants’ assertions about an improper motive on the part of the prosecution are based on speculation and do not satisfy the evidentiary threshold necessary to establish the discriminatory purpose prong of the selective prosecution test. See Hill, 2016 WL 6246887, at *6.
Because Defendants have not presented clear evidence of both elements for establishing a claim of selective prosecution, i.e., discriminatory effect and discriminatory purpose, I recommend that Defendants’ motion to dismiss for selective prosecution [Doc. 193] be denied.4
II. Motion to Dismiss Counts Twelve Through Eighteen [Doc. 189]
In their next motion to dismiss, Defendants argue that the counts related to anabolic steroids (Counts Twelve through Eighteen) should be dismissed because the Government has failed to allege that Defendants possessed, distributed, or failed to disclose a “criminal quantity” of an anabolic steroid. [Doc. 189 at 2]. For purposes of this motion to dismiss, Defendants do not dispute that trace quantities of anabolic steroids were found in the Prohormone Products, but they argue that only “trace” and “infinitesimal” quantities of anabolic steroids were found in the
Defendants bring this motion pursuant to
The Federal Rules of Criminal Procedure require that an indictment “be a plain, concise, and definite written statement of the essential facts constituting the offense charged.”
Defendants first argue that drug quantities are elements of the offense that must be charged in the indictment and submitted to the jury. They claim that Counts Twelve through Eighteen of the Indictment should be dismissed because they fail to allege the drug quantity. [Doc. 189 at 2]. In support of this argument, they cite to Alleyne v. United States, 570 U.S. 99 (2013), United States v. Curbelo, 726 F.3d 1260 (11th Cir. 2013), and United States v. Flores-Villareal, No. 4:15-cr-883-TUC-JAS, 2016 WL 232428 (D. Ariz. Jan. 20, 2016). [Id. at 4]. These cases, however, are distinguishable from the instant case because they address crimes charged under statutes where the drug quantity increases the maximum penalty for a crime. When
Here, Defendants are charged with crimes that do not potentially carry a mandatory minimum nor are the penalties tied to drug quantity. The penalty provisions for the CSA counts [
Apparently recognizing the utter lack of support for their position, Defendants move to their second argument, asking the Court to accept their assertion that the drug quantity at issue in this case is too small to be criminalized. [Doc. 189 at 5-7].
In making their arguments, Defendants are inviting error by asking the Court to do two things that the Eleventh Circuit expressly prohibits: (1) review the sufficiency of the evidence in advance of trial; and (2) dismiss an indictment based on facts that should have been developed at trial. See United States v. Critzer, 951 F.2d 306, 307 (11th Cir. 1992); United States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006). As noted above, the Court is constrained to review the sufficiency of the Indictment from its face. See Critzer, 951 F.2d at 307.
Counts Twelve through Eighteen of the Indictment track the language of the relevant statutes and set forth more than sufficient detail to place Defendants on notice of the allegations against them and to defend against double jeopardy. This