Case: 15-13966 Date Filed: 11/17/2016 Page: 1 of 28

[Pages:28]Case: 15-13966 Date Filed: 11/17/2016 Page: 1 of 28

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ No. 15-13966 Non-Argument Calendar ________________________

D.C. Docket No. 0:15-cr-60029-WJZ-1

UNITED STATES OF AMERICA, Plaintiff-Appellee,

versus ANDREW BEUSCHEL,

Defendant-Appellant. ________________________ Appeal from the United States District Court for the Southern District of Florida ________________________

(November 17, 2016) Before MARTIN, ROSENBAUM, and ANDERSON, Circuit Judges. PER CURIAM:

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After a jury trial, Andrew Beuschel was convicted of conspiring to traffic and trafficking in counterfeit Viagra tablets. On appeal, he challenges the sufficiency of the evidence to support his convictions, the district court's admission of evidence under Rule 404(b), Fed. R. Evid., and the court's calculation of his guideline range--specifically the part of that range based on the number of counterfeit tablets for which he was held responsible and the value of the tablets. The government confesses error on a related sentencing issue. After careful review, we affirm Beuschel's convictions and his sentencing challenges, but we vacate and remand for resentencing pursuant to the government's confession of error.

I. BACKGROUND A. Procedural History

A federal grand jury returned an indictment charging Beuschel with conspiracy to traffic in a counterfeit drug in or around April or May 2014, and trafficking in a counterfeit drug in June 2014, all in violation of 18 U.S.C. ? 2320(a)(4) and (b)(3). Beuschel pled not guilty and proceeded to trial.

Before trial, the government noticed its intent to admit evidence under Rule 404(b) of the Federal Rules of Evidence. This evidence consisted of a chain of emails from January and February 2013 between Beuschel and another person regarding a prior sale of purported Viagra. In the government's view, the emails

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were relevant to show Beuschel's knowledge of the counterfeit nature of the Viagra. Over Beuschel's objections, the district court found the evidence admissible to show knowledge.

At trial, the district court denied Beuschel's motions for judgment of acquittal at the close of the government's case and at the close of the evidence. A jury returned a verdict finding Beuschel guilty on both counts charged.

The district court sentenced Beuschel to concurrent terms of 63 months of imprisonment, to be followed by concurrent three-year terms of supervised release. B. Trial Evidence1

This case is about a package of counterfeit Viagra that Beuschel shipped from New Jersey to a cooperating source ("CS") in South Florida in June 2014. The CS was working with the United States Food and Drug Administration ("FDA"). Beuschel never disputed that he sent the package, but he claimed to believe that the Viagra was authentic and that he was simply returning what had been mistakenly sent to him by Frank Fiore, a former business partner.

The June 2014 shipment developed out of meeting a couple of months earlier between the CS, an undercover agent, and Fiore, who was under investigation for trafficking in counterfeit drugs. At this April 2014 meeting, the CS asked for and received Fiore's blessing to do business with Beuschel. Fiore

1 We present the evidence in the light most favorable to the jury's verdict. United States v. Rutgerson, 822 F.3d 1223, 1232 (11th Cir. 2016).

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and Beuschel had done business together before, but things had turned bad between them. Fiore believed that Beuschel had once cheated him out of money, and Beuschel claimed that Fiore and the CS still owed him over $100,000.

On May 7, 2014, about two weeks after the April meeting, Beuschel sent an email to Fiore with the subject line, "candy: skittles 2710 boxes $6775 if more is needed i'm sure we can accommodate your request." Beuschel later confirmed to law enforcement that "skittles" was a reference to Viagra. Fiore forwarded the email to the CS, who, in turn, forwarded the email to Maximillian Trimm, a Special Agent with the FDA. At Agent Trimm's direction, the CS wired about half the funds, which the CS received from the government, to Beuschel.

Once he received the money from the CS, Beuschel notified Fiore by email on May 26 that he would be coming down from New Jersey, where he lived, to meet them in South Florida. Fiore, who forwarded the email to the CS, told Beuschel that Fiore was not necessary for the meeting. Beuschel responded that he wanted Fiore there to discuss "payments received and when we are getting the balance."

Beuschel traveled to South Florida and met with the CS on May 30, 2014. Before the meeting, the CS notified the FDA, which provided him a recording device to use during the meeting. The jury heard the recording at trial.

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During the recorded conversation, Beuschel explained to the CS that he did not bring the "stuff that I have for you" because he did not think he could carry it on the plane, and he also did not mail it because he was not sure if he could. He indicated that he planned to drive down the next week with some equipment, so he was "gonna stick it in with the tools." Beuschel stated that he had 2,800 "pieces," or boxes, that each box contained four tablets, and that he paid $2 per tablet.

Beuschel also discussed other goods he could provide the CS, and he indicated that he could create custom labeling and packaging for drugs. He stated, "you give me a label that you want to put it under, whatever the name is that you want to put it under, we can make it whatever you want"; and "I can make a bilingual box so they could read it as both."

Beuschel went on to advise the CS that he could "get Cialis or Viagra any day." Beuschel stated, "Like if you told me, I need ten thousand boxes, that's forty thousand pills. . . . I can have them to you in probably two weeks." Beuschel asked if the CS wanted "orange" (Cialis, a mustard-yellow tablet) or "blue" (Viagra, a blue tablet), and the CS said both. Beuschel responded, "I'll make the phone call to the guy. He's in Brooklyn. I'll make the phone call to the guy that manufactures them . . . ." Beuschel said he would introduce the CS to the "guy" in Brooklyn. The CS assured Beuschel that he could send the Viagra through UPS without issue.

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On June 17, 2014, Beuschel shipped a package to the CS from a UPS store in New Jersey. Beuschel signed the shipping forms in the name of "Frank Fiore" and gave a return address in Boca Raton, Florida. In an email, Beuschel told the CS that "Frank Fiore" had sent the package. The CS received the package and delivered it to Agent Trimm.

The package contained 681 boxes that were labeled "Viagra." Each box contained a "blister pack" of four tablets that appeared to be 100-mg doses of Viagra. The word "Pfizer" and its logo were on the outside of the boxes and on the blister packs and the words "Pfizer" and "VGR" were embossed directly on the tablets. The boxes and blister packs were labeled with an April 2014 expiration date. "Pfizer," its logo, "Viagra," and "VGR" were all trademarks of Pfizer, Inc., in use at the time of Beuschel's conduct.

The tablets were tested and determined to be counterfeit. While the false tablets had the same markings, shape, and general color as real Viagra, they were larger and "noticeably darker" than real Viagra. In addition, a chemical analysis revealed that the false tablets contained sildenafil citrate, the active ingredient in Viagra, but at around half the potency of real Viagra. The packaging was likewise determined to be counterfeit. The packaging used real but outdated or inconsistent artwork and security features and an incorrect bar code, among other features. The

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wholesale price of Viagra was around $38 for a 100-mg tablet as of June 1, 2014, well above the $2 per tablet Beuschel paid.

On July 6, 2014, about two weeks after the shipment, Beuschel emailed the CS asking for payment for the "candy." He stated, "payments owed next week $10,000 past debt and $3,000 for candy, please make deposit Monday, July 7th!!" The CS responded that the "candy had all expired dates." Beuschel replied, "It's all good take them out of the box that's the only dating." In a separate email, Beuschel told the CS that he would put the CS in touch with "Anderson," the guy in Brooklyn, "directly on the candy as stated." On July 21, 2014, Beuschel again stated that the CS owed $3,000 and that he wanted to introduce the CS to Anderson "for additional inventory and stick sales."

After Beuschel's name appeared in a criminal complaint against Fiore, Beuschel, through counsel, requested a meeting with prosecutors. During the interview, Beuschel explained that he was in the business of "opportunity buys," meaning that he would purchase outdated or about-to-expire products at a discount and sell them for profit. He also stated that he manufactured dietary or nutritional supplements, including "Clavine," a natural supplement used to treat erectile dysfunction.

Beuschel explained during the interview how he came to send the package of Viagra to the CS in June 2014. According to Beuschel, he had asked Fiore at

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some point after 2012 to return some business proposals that Fiore had in his possession. Fiore sent him two boxes. Beuschel did not look in the boxes until May 2014, when Fiore called to tell him that one contained "product" by mistake. At that point, Beuschel looked in the box and saw that it contained Viagra. He agreed to send the box to the CS in exchange for approximately $6,000, as partial payment for the more than $160,000 they owed him as a result of two failed business deals. He shipped the package to the CS under Fiore's name because it belonged to Fiore.

Beuschel also claimed in the interview that he had never dealt in pharmaceuticals before. After Agent Trimm testified about that statement at trial, the government admitted, through Rule 404(b), Fed. R. Evid., a chain of emails between Beuschel and Fiore in 2013 discussing a sale of "skittles" and "m&ms." In the emails, Beuschel stated that he had "the allocation ready based on your say so," to which Fiore responded, "so far 5000 blue skittles and most likely the orange as well so I will take the full skittles order but let me get payment on thurs/fri." C. Sentencing

1. Relevant Conduct Before sentencing, a probation officer prepared Beuschel's revised presentence investigation report ("PSR"). The PSR included as "relevant conduct," see U.S.S.G. ? 1B1.3, facts from 2012 arising out of a police

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