United States v. Hanny

509 F.3d 916, 2007 U.S. App. LEXIS 28682, 2007 WL 4322265
CourtCourt of Appeals for the Eighth Circuit
DecidedDecember 12, 2007
Docket07-1010
StatusPublished
Cited by4 cases

This text of 509 F.3d 916 (United States v. Hanny) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Hanny, 509 F.3d 916, 2007 U.S. App. LEXIS 28682, 2007 WL 4322265 (8th Cir. 2007).

Opinion

SMITH, Circuit Judge.

Dr. Thomas Hanny pleaded guilty to conspiring to distribute controlled sub *917 stances outside the course of normal medical practice and engaging in a monetary transaction over $10,000 derived from the proceeds of this activity, in violation of 21 U.S.C. § 846 and 18 U.S.C. § 1957 respectively. The district court 1 sentenced Han-ny to 33 months’ imprisonment. Hanny appeals, arguing that the district court incorrectly calculated his Guidelines range by improperly applying a sentencing enhancement for distributing controlled substances through mass-marketing by means of an interactive computer service. We affirm.

I. Background

Dr. Thomas Hanny, a physician licensed in Connecticut, ended his 30-year career as a surgeon in October 2003. Following his retirement, Hanny received an offer to work for Pharmacom, a company that sold prescription drugs over the Internet. Pharmacom wanted Hanny to authorize prescriptions to its Internet customers. Hanny questioned the business’s legality and consulted an attorney. The attorney, although disclaiming any specialized knowledge about Internet prescriptions, also expressed doubt about the business’s legitimacy. Despite his initial misgivings, and his attorney’s doubts, Hanny began working for Pharmacom in early 2004. Hanny did not seek additional advice from an attorney more familiar with the Internet prescription business.

Pharmaeom’s business model was simple. The company sponsored a website that allowed customers to order controlled substances over the Internet. The Internet customers selected and paid for the controlled substances online using credit or debit cards. Once the customers’ payments were verified, the orders were sent to participating physicians, such as Hanny, for review. To authorize the sale, the physician would add his electronic signature to the order. The physicians were not required to physically examine the patients as part of their order review. After the electronic order was approved by a physician, the order would then be sent to a participating pharmacy to fill the prescription. While working for Pharmacom, Hanny authorized over 2,400 prescriptions. Hanny kept a portion of each sale, earning approximately $14,600 for his services. During his time with Pharmacom, Hanny never examined any of the patients who sought prescriptions. Law enforcement became aware of Pharmacom’s operations and shut down the company in 2004.

After Pharmacom ceased operations, Hanny began working for Jive, 2 another company that illegally sold prescription drugs over the Internet. Hanny’s responsibilities at Jive were very similar to his responsibilities at Pharmacom; Hanny approved prescription requests based on a questionnaire completed by the customer. Hanny never reviewed the customers’ medical records. While working at Jive, Hanny authorized the dispensing of at least 110,110 dosage units of Schedule III controlled substances and at least 880,590 dosage units of Schedule IV controlled substances. For his services to Jive, Han-ny earned approximately $42,700.

In January 2005, the Missouri Board of Medicine contacted Hanny and informed him that his actions as a Jive employee, as it related to Missouri customers, constituted the illegal practice of medicine in Missouri. The letter demanded that Hanny cease and desist, but Hanny disregarded the communication and continued prescribing for Jive until April 2005.

*918 The United States charged Hanny with conspiring to distribute controlled substances outside the course of normal medical practice and engaging in a monetary transaction over $10,000 derived from the proceeds of this activity in violation of 21 U.S.C. § 846 and 18 U.S.C. § 1957 respectively. Hanny pleaded guilty to two counts of conspiracy to distribute and one count of engaging in an illegal monetary transaction. After accepting his guilty plea, the district court sentenced Hanny to 33 months’ imprisonment.

In reaching Hanny’s sentence, the court first determined Hanny’s offense level for the drug charges. The court looked to U.S.S.G. § 2D1.1 and applied a base offense level of 20. The court determined that Hanny’s drug offense involved the distribution of a controlled substance through mass-marketing by means of an interactive computer service and, therefore, applied a two-level enhancement to Hanny’s base offense level under § 2D1.1(b)(5). After adding the money laundering offense and applying several other adjustments, 3 both upward and downward, the court set Hanny’s total offense level at 19 and his criminal history classification at Category I, making Han-ny’s Guidelines range 30 to 37 months’ imprisonment. The court departed downward from the advisory range after the government filed a substantial assistance motion under U.S.S.G. § 5K1.1, resulting in a final advisory Guidelines range of 27 to 33 months. The court heard arguments regarding the appropriateness of granting a variance from the Guidelines but found that no § 3553(a) factor warranted a variance. After denying the variance, the court sentenced Hanny to 33 months’ imprisonment.

Hanny appeals the applicability of the § 2D1.1(b)(5) upward adjustment that set his initial offense level. He argues that had the adjustment not been applied his pre-departure Guidelines range would have been 27 to 33 months, and the court would have sentenced him to a shorter sentence after granting the 5K1.1 departure.

II. Discussion

The sole issue raised by this appeal is whether the record evidence supports the district court’s application of U.S.S.G. § 2D.1(b)(5). We review the district court’s interpretation and application of the Sentencing Guidelines de novo. United States v. Holthaus, 486 F.3d 451, 454 (8th Cir.2007).

In establishing a base offense level, the Guidelines require a two-level enhancement if the defendant’s crime involved the distribution of any controlled substance “through mass-marketing by means of an interactive computer service.” U.S.S.G. § 2D1.1(b)(5). 4 Neither we nor any other appellate court have had the occasion to *919 address this Guidelines section; however, the application notes to the Guidelines provide some guidance to its use. The application notes define “mass-marketing by means of interactive computer service” as “the solicitation, by means of an interactive computer service, of a large number of persons to induce those persons to purchase a controlled substance.” U.S.S.G. § 2D1.1(b)(5), cmt. n. 22.

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Bluebook (online)
509 F.3d 916, 2007 U.S. App. LEXIS 28682, 2007 WL 4322265, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-hanny-ca8-2007.