United States Court of Appeals
For the First Circuit
No. 07-1040
UNITED STATES OF AMERICA,
Appellee,
v.
ROSARIO MARTÍ-LÓN,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge]
Before
Torruella and Lynch, Circuit Judges,
and Keenan,* Senior District Judge.
Carlos E. Géigel for appellant.
Mariana E. Bauzá-Almonte, Assistant United States Attorney,
with whom Nelson Pérez-Sosa, Assistant United States Attorney,
Chief, Appellate Division, and Rosa Emilia Rodríguez-Vélez,
United States Attorney, were on brief for appellee.
April 29, 2008
*
Of the Southern District of New York, sitting by
designation.
LYNCH, Circuit Judge. Rosario Martí-Lón was convicted on
eight counts of an eleven-count indictment, arising from her
unlawful distribution of prescription drugs, 21 U.S.C. §§ 331(b)
and 333(b)(1)(D); monetary transactions from unlawful activity, 18
U.S.C. § 1957(a); and false statements, id. § 1001(a)(3). She was
sentenced to a total of ninety-six months' imprisonment. She
appeals, alleging errors in her jury trial and sentencing errors in
the determination of the amount of loss and the denial of a
substantial assistance departure.
Pharmaceutical drugs from American drug companies may be
purchased by resellers at different prices depending on the
geographic market of the intended resale. This differential
provided the opportunity for most of Martí-Lón's crimes. A drug
company, SmithKline Beecham, provided Martí-Lón with drugs through
two wholesalers, Medivax Services Corporation and DeVictoria
Medical. The drug wholesalers represented to SmithKline Beecham
that the drugs were to be sold to physicians or clinics in Puerto
Rico, which, under their contracts, allowed them to receive a
twenty-percent discount. The drug wholesalers then sold the drugs
to Martí-Lón at a lower cost because Martí-Lón represented that the
drugs were meant to be resold in Brazil. Neither representation
was true. Martí-Lón did not resell the drugs in Brazil nor to
physicians or clinics in Puerto Rico. Rather, she sent the drugs
back for resale at higher prices to a drug wholesaler in New York,
-2-
over a three-year period, grossing about $21 million and profiting
from her share of the subverted discount. She falsely represented
herself as a licensed wholesaler of drugs to the New York drug
reseller, when in fact she was neither a licensed wholesaler nor
even a licensed pharmacist in good standing throughout the relevant
time period.
In addition, Martí-Lón increased her profits by another
illegal device: reselling approximately $1.5 million of
prescription drugs she knew were stolen. She tried to hide these
illegal sales by using multiple cashier's checks for each
transaction so that each check would be in an amount under $10,000.
In her appeal, Martí-Lón concedes there was substantial
evidence to support the verdict. However, she argues there were
trial errors, primarily prosecutorial misconduct and error by the
court as to its treatment of two jurors. The asserted juror errors
were in the court's dismissal of a juror who tried to get the
business card of defense counsel to handle a personal matter and
the court's retention of a juror who had read a newspaper article
on the case and, on questioning by the trial judge, was held to be
impartial. She also attacks her sentence, arguing (a) that she was
wrongly denied credit when the prosecution declined to move under
U.S.S.G. § 5K1.1 for a departure based on substantial assistance,
and (b) that the loss calculation was too high. None of the claims
have merit. We affirm.
-3-
II.
A. Claims of Trial Error
1. Alleged Prosecutorial Misconduct
Martí-Lón's argument that the prosecutor engaged in
misconduct is entirely misconceived.
Martí-Lón primarily complains that the prosecution,
throughout the trial and at closing, argued that the fact that
Martí-Lón reported on her tax returns less than five percent of the
income she received demonstrated her knowledge that she was engaged
in illegal business transactions. We bypass whether Martí-Lón
properly preserved her objections. There was more than adequate
evidence admitted to support the government's argument, which was
a fair inference from the facts. That defendant had a different
view of her tax obligations1 does not make the government's
argument improper.
Martí-Lón makes a secondary argument that the government
acted improperly when it made a reference in open court to a
document not admitted into evidence. Because there was no
objection by defense counsel, we review this claim for plain error.
United States v. Dickerson, 514 F.3d 60, 63 (1st Cir. 2008). The
1
The defendant's view was that she needed to report as
taxable income only her net profits, that is, the amount for which
she bought the drugs subtracted from the amount for which she sold
the drugs. The prosecutor argued that she should have reported her
gross sales as her taxable income and her cost of the drugs as a
deductible expense.
-4-
prosecutor stated to the judge that the document showed defendant
had obtained a municipal vendor tax license by pretending to be an
attorney.
The mention of the document, as Martí-Lón concedes, was
made at a sidebar and there is nothing in the record which
establishes or even suggests that the jury heard the reference.
That alone disposes of the claim. See Harris v. United States, 367
F.2d 633, 636 (1st Cir. 1966) (finding no prejudice because there
was no showing that alleged disparaging remarks were heard by
jury); see also Deary v. City of Gloucester, 9 F.3d 191, 195 (1st
Cir. 1993) (noting that "incidents occurr[ing] outside of the
hearing of the jury . . . could not have influenced the jury
decision"). Nor does the record suggest there would have been any
prejudice, even if any juror overheard. See Deary, 9 F.3d at 195
(recognizing that a juror overhearing a single comment does not
create a per se presumption of prejudice).
There is no plausible claim of prosecutorial misconduct.
2. Evidentiary Issues
We bypass the question of whether Martí-Lón has waived
her evidentiary argument.2 Martí-Lón argues the district court
2
Other than the caption, and a mention in the summary of
argument, no argument was presented in the defendant's primary
brief. Issues "advanced for the first time in an appellant's reply
brief are deemed to have been waived." United States v. Eirby, 515
F.3d 31, 36 n.4 (1st Cir. 2008); see also, e.g., United States v.
Alfano, No. 07-1624, 2008 WL 867387, at *1 n.5 (1st Cir. Apr. 2,
2008); United States v. Page, Nos. 06-2006, 06-2007, ___ F.3d ___,
-5-
erred in denying defense counsel further time to uncover
impeachment evidence. The defendant wished to impeach a government
witness on whether he had reported income paid to him by defendant
to the tax authorities by using the witness's tax returns. But
defense counsel did not have the tax returns on hand in order to
impeach the witness.
The district court ruled that counsel could easily have
obtained the evidence earlier and the request was untimely. Based
on the record, that ruling was well within the court's discretion.
3. Juror Issues
Defendant's appellate claims as to juror error are about
one juror who was not removed from the jury and one juror who was.
On the twelfth day of trial, a local newspaper carried a
front-page article about the trial. At the request of defense
counsel, the court asked each juror if he or she had read the
article. One ("juror X") said he had. The court interviewed juror
X in chambers. The juror stated he had read at most the first two
paragraphs, which stated that defendant had reported on her tax
returns only $1 million of her alleged $21 million in income. That
2008 WL 820741, at *6 n.4 (1st Cir. Mar. 28, 2008) (finding waiver
when defendant "elaborates on [an] argument only in his reply
brief"). We choose to address the issue on the merits.
We need not address the government's additional argument
that the tax returns were inadmissible under Federal Rule of
Evidence 608(b).
-6-
newspaper article statement reported what had already been admitted
into evidence by the prosecution.
The juror said, in essence, the article was the truth;
the article described what the prosecutor said and what happened in
the case. Juror X said the story did not affect him and that he
had no outside information about the case that affected him as a
juror. The court reminded juror X about his oath to decide the
case based only on evidence presented in court, told him not to
search for additional information, and reminded him to be extra
careful not to read anything else. The juror agreed. Neither
counsel asked the juror any questions.3
Regardless of whether this claim of error was preserved
by defendant, it cannot prevail. Procedurally, the judge's
approach to the problem of the juror having read the news article
cannot be faulted. "Our usual standard of review once the trial
judge has made an appropriate inquiry . . . is an abuse of
discretion standard, which recognizes that the district court 'has
wide discretion in deciding how to handle and how to respond to
allegations of juror bias and misconduct that arise during a
3
Separately, counsel and the court reviewed the article
and recognized that the second paragraph of the article also said
that defendant was under a local indictment for tax evasion. The
juror did not say he had seen this information. The defense
counsel asked the court to explain to the juror that this part of
the article referred only to allegations in a local proceeding and
not to federal tax evasion charges or any charges in the current
proceeding. The court did so. Neither party objected to juror X
continuing as a juror.
-7-
trial.'" United States v. Tejeda, 481 F.3d 44, 52 (1st Cir. 2007)
(quoting United States v. Rodríguez-Ortiz, 455 F.3d 18, 23 (1st
Cir. 2006)). The district court having made the proper inquiry, we
give "great weight" to the "judgment of the trial judge, who can
appraise the jurors face to face," as to whether the juror can be
impartial. United States v. Walsh, 75 F.3d 1, 7 (1st Cir. 1996);
see also United States v. Nazzaro, 889 F.2d 1158, 1167 (1st Cir.
1989) (noting that "the law wisely affords the trier -- who is on
the front lines, sensitive to the nuances of the case before him --
substantial discretion in determining" possible prejudicial
influence). Here, there is no claim the information to which the
juror was exposed was totally outside of the record: the article
repeated what the prosecution had already put into evidence. The
harm from the exposure, if any, was minimal. The juror was
instructed not to read outside sources again and he said he
understood. See Tejeda, 481 F.3d at 53 (recognizing that jurors'
understanding of a court's remedial instruction is normally
credited). At no point did defense counsel object. There was no
abuse of discretion in not dismissing the juror.
Martí-Lón also argues the court erred in removing another
juror ("juror Y"), whom defendant feels was favorable to the
defense.4 The parties do not dispute the facts. Juror Y asked the
4
The court also dismissed a juror who actually contacted
the prosecutor and wanted the prosecutor to take action on a matter
personal to the juror. The defendant does not challenge that
-8-
court security officer, just before deliberations, if he could get
the business card of defense counsel because juror Y had an ongoing
personal legal matter.
Here, too, the court conducted an appropriate inquiry,
following all procedural prerequisites. See id. at 52. The juror
initially denied he made the request and the court supportably
found his testimony to be less than candid. Over the objection of
the defendant, the court concluded, with full support in the
record, that juror Y could not be impartial; indeed, he was so
emotionally involved in his own personal problems he could not
focus on the evidence in the case. These conclusions are
unassailable and are not challenged, much less refuted, by
defendant's argument that no harm was done because juror Y never
was able to make contact with defense counsel. There was no error.
B. Alleged Sentencing Error Claims
1. Denial of § 5K1.1 Substantial Assistance Downward
Departure
The district judge declined to grant a substantial
assistance downward departure under U.S.S.G. § 5K1.1 for two
reasons: (a) the government had not requested one, and (b) in the
court's view, Martí-Lón was not a viable candidate for one and so
the prosecutor's lack of a request was not inappropriate. A motion
by the government is required in order for the court to grant a
juror's dismissal.
-9-
substantial assistance reduction. U.S.S.G. § 5K1.1; see Wade v.
United States, 504 U.S. 181, 184 (1992).
Martí-Lón does not directly allege that the prosecution
had impermissible reasons for its decision not to move for a
substantial assistance reduction, a contention we would review.
United States v. Nelson-Rodriguez, 319 F.3d 12, 51-52 (1st Cir.
2003) (reviewing claim that government's reasons for failing to
seek such a departure were impermissible). Instead, she simply
argues that she did provide substantial assistance.
The evidence plainly shows why there was no bad faith or
impermissible motive in the prosecution's decision not to request
a departure. Defendant did not fully cooperate with the government
nor did she cooperate with the goal of assisting the government.
Rather, in her dealings with the purveyors of the stolen drugs, she
came to the government for protection when she was threatened by
one of the participants in the drug theft ring. That participant
had not been paid his share, turned to defendant for it, and when
she declined, threatened her. At that point, she worked with
authorities to capture the criminal who made the extortion demands
and threatened her. This came after she had earlier obstructed
justice by denying any knowledge of the drug theft ring. Further,
she never cooperated with the prosecution with information on her
-10-
primary scheme, the illegal resale of the legitimate drugs
purchased from the drug companies. Her claim is without merit.5
2. Loss Calculation
The defendant claims that the district court erred in
calculating the amount of loss attributable to her conduct. The
district court calculated the loss separately for the two
components of Martí-Lón's criminal conduct. With respect to the
illegal resale of the discounted drugs, the district court
multiplied the total amount of revenue Martí-Lón had received from
selling the drugs by the twenty-percent discount wrongfully
obtained from SmithKline Beecham. The defendant argues that this
was inappropriate because there was no indication that the drug
manufacturer sold its products at a loss when it gave a twenty-
percent discount and that the two wholesalers from which she
purchased the products may have received some of the discount. The
defendant misunderstands the meaning of "loss" in the Guidelines,
which requires the court to apply the greater of "actual loss,"
defined as the "reasonably foreseeable pecuniary harm that resulted
from the offense," and "intended loss," defined as "the pecuniary
5
Although in agreement with the outcome, Judge Torruella
would have liked to see the government act in a more benevolent
manner. In his view, irrespective of the motivations which
compelled Martí-Lón to provide assistance, the government
benefitted from her actions.
-11-
harm that was intended to result from the offense."6 U.S.S.G.
§ 2B1.1 cmt. n.3(A)(i)-(ii). The district court found that the
wrongfully obtained twenty-percent discount constituted pecuniary
harm to the drug manufacturer; had the drug manufacturer sold the
products to the drug wholesaler directly, it would have sold the
products at the full wholesale price. It also correctly found that
this harm was "a direct result of the offenses for which defendant
was convicted . . ." and that the wholesalers' wrongful acquisition
of the discount was "an integral part of defendant's illegal
scheme."
If, alternatively, the court engaged in an intended loss
calculation, U.S.S.G. § 2B1.1 cmt. n.3(A)(ii), the evidence clearly
establishes that Martí-Lón was aware of and benefitted from the
discounted prices given to Medivax and De Victoria. In reselling
the discount vaccines to the New York drug wholesaler, it was
entirely foreseeable to defendant that SmithKline Beecham was being
deprived of the opportunity to sell those same vaccines at a non-
discounted price. The loss amount found by the court was entirely
commensurate with the degree of loss that Martí-Lón reasonably
6
While termed "intended loss," the "focus [of the] loss
inquiry . . . [is] on the objectively reasonable expectation of a
person in [her] position at the time [she] perpetrated the fraud,
not on [her] subjective intentions or hopes." United States v.
Innarelli, No. 06-2400, ___ F.3d ___, slip op. at 9 (lst Cir. Apr.
29, 2008).
-12-
expected to occur. See United States v. Innarelli, No. 06-2400,
___ F.3d ___, slip op. at 9-10, (lst Cir. Apr. 29, 2008).
With respect to the stolen drugs, the court used the
amount that Martí-Lón paid for those drugs, calculated based on the
cashier's checks used for payment. The court recognized that this
was, in fact, a conservative estimate of the amount of loss, since
stolen goods are usually sold at a markdown. This was supported by
evidence presented at trial, which showed that the prices for the
stolen drugs were almost half the price of the legitimate drugs
Martí-Lón had illegally obtained. There was no error.
Martí-Lón also makes a cursory argument that including
the stolen drugs in the loss calculation was improper because she
was acquitted on the conspiracy charge. First, as the district
court noted, she was convicted of distributing prescription drugs
without a license and many of the drugs she distributed were
stolen. More importantly, it was entirely proper for the district
court to use acquitted conduct for the purposes of sentencing so
long as that conduct had been proved by a preponderance of the
evidence. See United States v. Woodward, 277 F.3d 87, 91 (1st Cir.
2002). The court made an explicit preponderance of the evidence
ruling here, which is supported by overwhelming evidence.
Defendant's conviction and sentence are affirmed.
-13-