THE CASE OF WILLIAM TANNER

THE APPEAL

In the United States Court of Appeals

For the Fourth Circuit

United States of America

vs.

William Bennett Tanner

Brief of Appellant, filed by attorney Marvin Miller on Jan. 15, 1995

Statement of the Case

In January 1988, complaints were lodged against William Tanner regarding the manner in which he conducted himself as the pharmacist at T-Mart Drug Corp., located in Staunton, Virginia. By the end of February 1989, investigators had conducted an undercover operation which established for them that Mr. Tanner, the sole pharmacist at T-Mart Drug Corp., was improperly dispensing Schedule III and Schedule IV medications. Nine months later, on 15 November 1989, two search warrants were executed at the T-Mart Drug Corp. pharmacy.

On 21 June 1991, a 25 count indictment was returned. It alleged that Mr. Tanner had unlawfully dispensed various schedule III and Schedule IV controlled substances and had failed to maintain the records required of pharmacists. It also sought the forfeiture of eight separate lots of real estate owned by Mr. Tanner under a theory that they were used to facilitate the dispensing violations; and the forfeiture of an alleged sole proprietorship named T-Mart Drug Store under the theory that it too was used to facilitate the unlawful dispensing of controlled substances. Various pretrial motions were filed and determined including motions for discovery and inspection and advance notice of the prosecution's intent to use evidence under Rule 404(b) of the Federal Rules of Evidence. These motions were generally filed on or about 7 October 1991. A Motion to Continue was filed under seal on 15 January 1992 because of Mr. Tanner's physical condition and ill health.

Motion hearings were held on 22 July 1992 and 20 August 1992. On 5 January 1993, a jury trial began. The jury entered a verdict of guilty on 12 January 1993 on the alleged violations regarding the unlawful dispensing of controlled medications and the improper maintenance of the required records. Special verdicts were entered as to the forfeitures.

A motion for judgment of acquittal was filed on 19 January 1993. On 26 January 1993, orders of forfeiture of a sole proprietorship and of the eight separate lots, which had been prepared by the prosecution, were entered by the court. Additional conditions of release for Mr. Tanner were also set. On 22 February 1993, a return was entered of publication of the Order of Forfeiture to various tenants of the building which contained the pharmacy.

The case came on for sentencing on 6 January 1994. Mr. Tanner was sentenced to 27 months on each count. The sentences all ran concurrently. Three years supervised release on each count also ran concurrently. A $1,200 special assessment was also levied.

On 14 March 1994, a post verdict forfeiture hearing was held involving Mr. Tanner and the fact that the T-Mart Drug Store was not a sole proprietorship. The pharmacy was operated by a duly licensed corporation which had not been the subject of any forfeiture proceedings. Another shareholder in the corporation, Mrs. Ruth Tanner, the separated spouse of Mr. William Tanner, also appeared with her counsel since it had become apparent that the prosecution now wanted to forfeit the corporation even though it had not previously been named, noticed, indicted or tried.

After the filing of various memoranda and after hearings on the forfeiture issues, the court, in an order and opinion of 3 May 1994, ruled that Mrs. Tanner appeared too late to defend the forfeiture of the corporation despite the lack of notice to her, that the corporation would be forfeited even though it had not been indicted, was not the subject of trial and was not the subject of the jury's verdict. The court also permitted forfeiture of all eight lots of real estate despite the lack of any evidence establishing that each separate parcel had been used to facilitate an offense. After a Motion to Reconsider, this appeal was duly noted.

STATEMENT OF FACTS

In January 1988, Barbara Puffenbarger complained to an investigator that William Tanner was improperly dispensing pain relieving medication (Schedule III and IV drugs, primarily Wygesic). The investigator, Agent Lam, received similar information in November 1988 from another source. By February 1989, the agents had organized and implemented an undercover operation to confirm whether or not the information they had received was valid.

Employing an undercover agent named Lucas, the prosecution had three prescriptions refilled in February 1989. Each refill represented an improper dispensing of Schedule III and Schedule IV medications. By the time of the last undercover refill on February 24, 1989, the agents had the complaint of January 1988, the complaint of November 1988, three improper dispensings of controlled substances and the fact that William Tanner was the sole pharmacist at T-Mart Drug Corp.

When Agent Lucas sought to confirm the information from two civilian sources, the only information he had concerned Schedule III and Schedule IV controlled medications. That is what he was to confirm. He nonetheless tried, as he testified, to get Mr. Tanner to improperly dispense a Schedule II controlled substance (Percodan). The first effort to get him to dispense a Schedule II controlled substance occurred on 1 February 1989. It failed. Numerous subsequent efforts to get him to improperly dispense this Schedule II drug also failed. The information provided by the civilians had been corroborated by February 1989. There was no evidence from any source indicating that Mr. Tanner would improperly dispense Schedule II substances. The agents had an easily indictable case by February 1989. They continued, however, in their efforts to get him to dispense a Schedule II substance for five additional months, a six month total effort. He repeatedly refused. Finally, in July 1989, using a prescription on a cooperating doctor's pad, they induced him to dispense a few units of a Schedule II substance, Tylox.

Schedule II drugs carry significantly higher penalties than any Schedule III or IV substance. In order to accomplish this improper Schedule II dispensing, they had used various individuals (a police officer and an addict) in an undercover capacity and had tried various methods. Each had failed. Mr. Tanner had persistently refused. This improper dispensing of the Tylox was ultimately accomplished with the cooperation of a convicted addict who presented a prescription on a legitimate prescription pad for the Tylox. On the face of it, the prescription was valid but for the omission of the number of tablets. Mr. Tanner dispensed ten pills. Apparently not satisfied with that small number, the government sent the informant to try to get a refill. Mr. Tanner refused and called the police to report it.

Once they had finally gotten to dispense a Schedule II drug, the government stopped their undercover investigation. They did not, however, suspend Mr. Tanner's pharmacy license nor stop T-Mart Drug Corp., from continuing its business and dispensing schedule medications including the pain pills that were the subject of the indictment. In fact, T-Mart Drug Corp., and Mr. Tanner, were left alone for the next several months.

Two search warrants were executed on 15 November 1989. The first search warrant was to recover the prescriptions that the agents had prepared to give Mr. Tanner for their undercover operations. A second search warrant was for the recovery of medications, pain pills, inventory records, other prescriptions and the like.

In June 1991, the prosecution sought an indictment charging Mr. Tanner with various distributions that occurred during their six month undercover activities; distributions uncovered by their later search in November 1989; and various records violations also uncovered by their searches in November 1989. For forfeiture purposes the prosecution presented an indictment to the grand jury which named T-Mart Drug Store as a sole proprietorship even though the government clearly knew that it was a duly licensed corporation. The government sought this forfeiture under the claim that it was used to "facilitate" the violations by Mr. Tanner. They chose to act as though this separate legal entity, T-Mart Drug Corp., simply did not exist. Why they decided to ignore the corporation is not known. Additionally, the indictment named for forfeiture eight separate real estate lots owned by Mr. Tanner under the theory that they too had been used to "facilitate" his violations.

The pharmacy itself was located in a building in Staunton, Virginia, which was situated, at least in part, on at least one of these eight separate lots which were individually named in Count 25 of the indictment. These separate and individual lots had been conveyed to Mr. Tanner in 1965. Each lot was separately named in Count 25, paragraph 2.

Because so many documents had been seized in this case, the defense sought, prior to trial, to have the trial court require the prosecution to let them know what prescriptions were going to be used at trial, what physical exhibits the prosecution was going to introduce and what evidence the prosecution might seek to introduce Rule 404(b) of the Federal Rules of Evidence. The prosecution was ordered by the court to produce and identify these items and claimed it had complied. During the course of the trial, however, it became clear the prosecution had not complied with the discovery requirements imposed by the court. The prosecution sought to introduce a prescription which had not been named in pretrial discovery, a pill bottle which they bandied about the courtroom frequently during the trial, and 404(b) evidence, none of which had been revealed to or identified for the defense during pretrial discovery. The government clearly knew about the prescription and the pill bottle long before the trial. The 404(b) witness they used had been known to the government for four years. Not one piece of evidence presented in violation of the court's discovery orders was newly discovered. All of these violations severely prejudiced the defense and hindered the ability of Mr. Tanner and his counsel to meet this evidence. He did not have a fair chance to deal with it because he was blindsided.

During the course of the trial, the government did not elicit any testimony regarding the Tylox (Schedule II). They knew Mr. Tanner had called the police to report it. They had not included it in the indictment since, in the event of a conviction on Schedule III and IV drugs, they could still use it to increase his sentence. During the testimony of their witnesses, the government avoided all mention of it. When the defense sought to elicit the fact that Mr. Tanner had reported this illegal prescription to the police, Agent Lam, knowing full well that it was Tanner who had made the report, admitted that a report had been made but did not tell the jury the truth; that it was Tanner who had made the report. On redirect, the prosecution elicited a false statement from Lam to the effect that he did not know who had called the police. Later, during a post trial hearing, the agent candidly admitted the truth, that the report had been made in fact by Tanner. His false statement at trial, as elicited by the prosecution, was unduly and unfairly prejudicial to the defense by denying Mr. Tanner crucial exculpatory evidence.

The criminal offense counts of the indictment were the subject of separate instructions and arguments the court since the court bifurcated that portion of the trial from the forfeiture. After the jury found Mr. Tanner guilty of the criminal offenses charged by the indictment, the prosecution then presented a witness regarding the forfeiture issues. There was no doubt that the real estate forfeitures contained in Count 25 were comprised of eight separate lots of real estate. The prosecution presented no evidence regarding the configuration of these eight lots and there was no evidence regarding what, if any, portions of them contained the building. A prosecution witness candidly admitted that they had no idea what portions of these lots were covered by the building. The defense position was that the prosecution had to establish facilitation as to each of the eight lots separately named in the indictment but the court disagreed and ruled otherwise.

Insofar as the other section of Count 25 is concerned, the effort to forfeit the "sole proprietorship," the prosecutions's evidence did not describe or establish the existence of the corporation, T- Mart Drug Corp., which was a duly licensed and validly operating corporation existent under the laws of the Commonwealth of Virginia. The prosecution identified this business to the grand jury and to the trial jury as a sole proprietorship. Although this is consistent with the indictment; there is no such sole proprietorship known to exist. They had indicted and tried an entity which did not exist.

When instructing the jury regarding the standard to apply in deciding the forfeitures under Count 25, the court erroneously informed the jury that the standard was by a preponderance of the evidence. When explaining this erroneous standard to the jury, the court instructed them that they were to weigh the prosecution's evidence against the evidence presented by the defense to determine whether or not the prosecution had met a preponderance standard. The trial court's instruction to the jury that they should look to the evidence presented by the defense when considering this issue told the jury that the defense was obligated to present evidence or lose the case. The defense objected to this shifting of the burden to the defense to present evidence or lose the case, but the court overruled the defense objection. Thus, the error of a lower standard of proof than required proof beyond a reasonable doubt was compounded by placing the burden of producing evidence on the defendant. The court never gave the jury, during this bifurcated forfeiture trial, an instruction telling them that the burden is solely on the prosecution; that the standard is beyond a reasonable doubt; and that Mr. Tanner need not produce any evidence.

At sentencing, the defense objected to the calculation as to the, pills and to the enhancement sought by the government because of their manipulation of the case through their six month effort to get Mr. Tanner to dispense Schedule II drugs. During those proceedings, the prosecution witnesses did, finally, own up to the truth that it was Mr. Tanner who had made the report to the police ,about the Tylox prescription refill effort, but that did not change the fact that they had knowingly concealed this from the jury during trial.

At sentencing, the defense objected to the probation officer's calculations as to the drug units for computing the base offense level. Objection was also raised as to the Tylox but all defense objections on these points were denied. The Guideline computations on the base offense level were erroneous and led to an erroneous sentence.

In other post-trial proceedings regarding the forfeiture, it was evident that the prosecution had known from the outset that the business was a duly licensed, separate entity operation as a corporation under the laws of the Commonwealth of Virginia. Mr. Tanner and his wife were the shareholders. Mrs. Tanner was not allowed to intervene once the prosecution claimed that they did not want to forfeit a sole proprietorship, but instead wanted to forfeit a corporation about which they had never given anyone any notice. The extent of Mr. Tanner's interest in the business was never alleged and, like which lots were used to facilitate, it was never proved by the prosecution as clearly required by law. Even though not named or noticed or allowed to defend, the corporation was forfeited as were all eight individually named parcels of real estate.

Mr. Tanner received a 27-month sentence. The court ordered forfeiture of his eight parcels of real estate and T-Mart Drug Corp. (including pre- and post-offense assets). This appeal was duly noted.

ARGUMENT

I.TRIAL ERRORS

A. The Defendant Was Denied A Fair Trial, In Violation of Due Process, Because of False Testimony Elicited by the Government

There is no doubt that Agent Greg Lam, a key witness for the prosecution, knew that Mr. Tanner had called the police to report an attempt to illegally refill Tylox, a Schedule II prescription drug. Testifying at a post-trial sentencing hearing regarding the Tylox refill, Lam stated that he had responded to a "complaint by Mr. Tanner to the local police."

Lam's testimony at trial, however, was materially different. During cross-examination by defense, Lam was asked if Tanner had called the police to report a fraudulent prescription. He answered that "someone had called the police." This was, at best, a misleading attempt to deny important evidence to Mr. Tanner. At worst, it is a falsehood, a half-truth in violation of the clear oath taken at trial. On redirect, Lam was asked what happened when the informant tried to refill the Tylox. He testified that "someone in the store, I don't know whom, called the local police. As admitted during the post-trial sentencing hearing, Lam did know whom.

In Campbell vs. Reed... this Court reversed a conviction where it found that the defendant had been denied due process of law by government silence during the false testimony of a government witness....

Where there is false testimony knowingly elicited by the government, this Court has held that a "new trial is required if the false testimony could in any reasonable likelihood have affected the judgment of the jury."

...the fact that Mr. Tanner called the police was critical exculpatory evidence. It would have established for the jury that when Tanner suspected that someone was trying to illegally refill prescription drugs, he contacted the proper authorities. He did not dispense drugs when he suspected illegality, and he did not simply ignore this illegal attempt or tell the person to go away, he called the police. As a result of Lam's falsehood, the jury never got to hear this significant fact when determining Mr. Tanner's culpability for the dispensing charges.

Second, if the government had corrected Agent Lam's testimony, as required by the due process clause of the Fifth Amendment, it would have pointed to an inconsistency and, hence, to the credibility of a key prosecution witness. Credibility issues concerning key government witnesses that go unpresented to the jury for failure to correct perjured testimony are generally considered to be grounds for reversal.... Mr. Tanner is entitled to a new trial.

B. The Defendant Was Unfairly Prejudiced by the Impermissible Introduction of Propensity Evidence

During its case-in-chief, the government called Barbara Puffenbarger. Puffenbarger testified that she had received a large number of pills through illegal refills for several years. She testified that she had been drug free since January of 1988. This was a full year before any dispensing violations alleged in the indictment.

This Court has held that "evidence of prior bad acts is not admissible if it is introduced for the sole purpose of proving criminal disposition." United States vs. Madden. This is called "propensity evidence," i.e., evidence which, contrary to the presumption of innocence, suggests that the defendant has a "propensity" to commit crimes....

...Aside from Puffenbarger, there was very little testimony from witnesses who stated that they had obtained drugs from Tanner without proper authorization. None of those witnesses testified for a period outside the indictment, certainly not for a period of dispensing of five years, as claimed by Puffenbarger... The prejudicial smear caused by such testimony outweighs any possible legitimate probative value.

C. It Was Reversible Error for the Trial Court to Allow the Government to Repeatedly Violate the Court's Discovery Order

... This Court in United States vs. Holmes, reversed a conviction where the defense was not given material to which it was entitled with sufficient time to make reasonable use of it to prepare for trial....

In a case such as this where there are enormous amounts of paper, it was appropriate for the trial court to require the prosecution to inform the defense as to what exhibits they intended to use as provided by Rules 16 and 12(d) of the Federal Rules of Criminal Procedure. The Court entered such an order. The prosecution did not obey the court's order, however. During trial, the prosecution wanted to introduce a prescription which they had in their possession, custody and control for over three years. It had not been listed pursuant to the court order as an item that they were going to present as evidence... The court did not enforce its order. This obviously prejudiced the defense. The defense was not able to address this issue in opening statement, could not factor it into whether or not they wanted a doctor, who would have been a direct eyewitness, available and had no chance to consider how this evidence could have been used in trial... Pretrial motions, witnesses, and countervailing evidence was denied the defense by this last minute blindsiding that occurred in the midst of trial.

Similarly, in relation to another exhibit, a pill container, the prosecution again violated the court's pretrial order in the same fashion... Had they listed it, as they were obligated to do by the court's order, then, the defense would have been able to file an appropriate motion in limine and keep this impermissible evidence from being presented to the jury.

This is not a case where the prosecution discovered evidence at the last minute. This is a case where the prosecution had years to prepare for trial. Even with all of that time, the prosecution still engaged in sandbag tactics which denied the defense the benefit of the rules...

II. FORFEITURE ERRORS

Procedural safeguards embodied within forfeiture statutes stem from the harshly inequitable nature of forfeiture procedures. Forfeitures are a drastic remedy and are not favored in the law... Forfeiture statutes must, therefore, be strictly construed against the government.

A. Forfeiture of T-Mart Drug Corporation Must Be Vacated Because the Corporation Was Never Indicted and Was Not the Subject of the Jury Verdict

It is axiomatic that a corporation is a distinct legal entity. In the forfeiture context, it has been specifically noted that courts "treat corporations as separate legal entities and enable them to own property and enter contracts." United States vs. One Parcel of Land Located at 7326 Highway....

In sharp contrast, a sole proprietorship is a business that is not a separate legal entity. The sole proprietorship and its owner, the sole proprietor, are one and the same. The property and contracts of the business are the property and contracts of the owner... Corporations such as T-Mart Drug Corp., are separate entities and are considered by the law to have a distinct, individual existence. They are not the same as their shareholders....

The government indicted a T-Mart sole proprietorship. The jury charge and jury verdicts were the same. The jury verdict forfeited a nonexistent business indicted as T-Mart, a sole proprietorship. T-Mart Drug Corp., the corporation, a separate legal entity, was never indicted by the grand jury and there was never a jury verdict rendered with respect to it. It was never legally forfeited. See Caplin & Drysdale, Chartered vs. United States (stating that "forfeiture is a substantive charge in the indictment against the defendant"; United States vs. Nichols (noting that the "government must prove a forfeiture allegation in an indictment in the same manner in which it must prove any other allegation in an indictment")... One certainly can never make any amendment to an indictment after the jury has rendered its verdict.

B. Forfeiture of the Corporation Must Be Vacated Due To Defective Notice

In the instant case, the government did not notify Mr. Tanner of the forfeiture of the corporation. Their notice was constitutionally defective. In Mullane vs. Central Hanover Bank & Trust Co., the Supreme Court held that the prosecution, in a forfeiture case, is required to give actual notice to interested parties of what it intends to forfeit so these parties can come forward and defend their interests...

The prosecution's claim of notice by publication is not sufficient to satisfy due process. First, the publication was incorrect as to the property subject to forfeiture. The notice referred to a sole proprietorship. It did not refer to T-Mart Drug Corp.... Second, the Supreme Court has held that "notice by publication is not sufficient with respect to an individual whose name and address are known or easily ascertainable." Robinson vs. Hanrahan (1972). Only Mr. Tanner was personally served with notice and it did not name the corporation. Mrs. Tanner, another shareholder in the corporation, was not given notice regarding the corporation...

This Court has also found that the law will brook nothing but strict compliance by the prosecution with not only the letter but the spirit of the law in forfeiture cases. In Boas vs. Smith (1986), the government wanted to forfeit an automobile. They gave notice to the registered owner, but not to everyone who had an identifiable interest in the vehicle. The government knew individuals with identifiable interest but chose not to provide the required notice. This Court held that failure to strictly comply with the law defeated the forfeiture....

C. Forfeiture of the Corporation Must Be Vacated Because the Indictment Failed to Allege the Extent of Mr. Tanner's Interest in the Property Subject to Forfeiture

Since the business subject to forfeiture in the instant case is a corporation, only Mr. Tanner's interest in the corporation, and not the interests of the other shareholders, is subject to forfeiture. Federal Rules of Criminal Procedure 7(c)(2) states that "no judgment of forfeiture may be entered in a criminal proceeding unless the indictment or the information shall allege the extent of the interest or property subject to forfeiture." The Supreme Court has found that this rule creates a "requirement that any assets which the Government wishes to have forfeited must be specified in the indictment." Caplin & Drysadle. That clearly did not happen here. The indictment did not name the corporation nor Mr. Tanner's interest in it... The government cannot indict one thing and, after the verdict, take something else as though it had been indicted and tried instead.

D. Forfeiture of the Corporation Must Be Vacated Because the Special Verdict Form Failed to State the Extent of Mr. Tanner's Interest in the Property Subject to Forfeiture

Federal Rule of Criminal procedure 31(e) requires that, with respect to criminal forfeiture cases, "a special verdict shall be returned as to the extent of the interest or property subject to forfeiture." The drafters of this rule assumed that "the amount of the interest or property subject to forfeiture is an element of the offense to be alleged and proved." Fed. R. Crim. Pro. 31(e), Advisory Committee Note to 1972 Amendment.

Notwithstanding this critical requirement in the law the amount of Mr. Tanner's interest in the property was not alleged and it was not proved. The jury was told about a sole proprietorship named T- Mart, that certain properties may be held in the name of T-Mart, but that they should "simply disregard any such title or formal claim of ownership." This statement is not the law. It is contrary to the law...

E. Forfeiture of the Property Must Be Vacated Since the Government Failed to Prove That the Eight Separate Parcels of Real Estate That Were Indicted Were Instrumentalities of Illegal Conduct

In Count 25 of the Indictment, the grand jury indicted eight separate parcels or lots of real estate for allegedly facilitating the illegal dispensing of controlled medications... There was no allegation at any time during the trial of this case that this property represented the proceeds of criminal activity. It certainly was not stated in the indictment nor in any effort to amend the indictment nor was it contained in any instructions. The trial court itself noted that there was "no basis... to argue that on the evidence that the proceeds of the illegal activities is one of the basis for forfeiture." The question in this "facilitation" case then becomes whether or not the prosecution proved beyond a reasonable doubt that each of these separate parcels of real estate was used to facilitate as alleged by the indictment.

The prosecution utterly failed to meet their burden of proving beyond a reasonable doubt that those eight separate lots or parcels of real estate had been used to facilitate the illegal dispensing of controlled medications. The prosecution presented evidence upon which the jury found Mr. Tanner guilty of illegally dispensing controlled medications at the pharmacy operated by T-Mart Drug Corp. The prosecution also presented evidence that Mr. Tanner owned eight separate individual lots in Staunton, Virginia which he purchased in 1965. The agent called to testify by the prosecution regarding the forfeiture was asked on which of the eight lots the building site was located. His answer was: "That I don't know, Sir." Neither the agent nor any other witness, nor, for that matter, any other evidence, established in any way on which lot or lots or which portion of a lot contained the building site which housed the pharmacy. All the agent knew, or, for that matter, all the government knew was there were eight contiguous lots of real property located in Staunton and owned by William Tanner. That is not enough.

Absent proof beyond a reasonable doubt that each of these eight parcels of real estate were used to facilitate, the government was not entitled to any one parcel, let alone eight....all that the prosecution showed was that Mr. Tanner owned the real estate and the pharmacy might be on at least one of the lots, therefore, let's take it all...

F. Forfeitures of Both the Corporation and the Property Must Be Vacated Since the Court Failed to Instruct the Jury as to the Proper Burden of Proof and Instead Erroneously Instructed the Jury About A Lower Standard of Proof

... with respect to criminal forfeitures, the government "must allege forfeiture in the indictment and must carry the burden of proof beyond a reasonable doubt." United States vs. Real Property Located at 1808 Diamond Springs Road (1993). See accord, United States vs. Pryba (1987) stating that "the reasonable doubt standard is and should be applicable in RICO forfeiture proceedings")... United States vs. Dunn (1986) (stating that "criminal forfeiture requires proof beyond a reasonable doubt as opposed to preponderance standard which applies in civil cases")....

In the instant case, the trial court instructed the jury that the burden of proof for the forfeiture verdict was proof by a preponderance of the evidence. The trial went on to specifically note that this was a lesser burden of proof than proof beyond a reasonable doubt. This impermissibly lowered the standard of proof required for criminal trials and criminal verdicts and reversal is, therefore, mandated...

Forfeitures of Both the Corporation and the Property Must Be Vacated Since the Court Impermissibly Shifted the Burden of Proof to the Defendant

... Describing the burden of proof applicable to the forfeiture proceeding, the trial court talked to the jury about comparing the evidence submitted by the defense with that submitted by the prosecution, thereby, implicitly placing on the defense a burden to present evidence or lose the case. A defendant in a criminal trial has no obligation to produce evidence. Yet, under this instruction, if Mr. Tanner failed to present evidence, the government prevails... The jury rendered its decision using the wrong standard and with the wrong burden on the wrong party.

III. SENTENCING ERRORS

A. The Drug Equivalency Amount For Guidelines Sentencing Was Erroneously Calculated

In its Presentence Report, the total converted marihuana weight was erroneously calculated to equal 14.662 kilograms. Even the most liberal conversion total - one that takes the full number of units listed in the Presentence Report, for all drugs listed, and base conversion on gross weight of the tablets - equals 11.238 kilograms... The court accepted the erroneous calculation without correction.

Mr. Tanner was prejudiced by this mistake. At sentencing, Tanner objected to the inclusion of Tylox in calculating the base offense level... The court accepted the probation officer's calculations and found that the base offense level of 16 would apply "even if we disregard the question of Tylox." The court erroneously thought that the Tylox was essentially irrelevant.... The Tylox was not essentially irrelevant.

Had the erroneous calculation been corrected, the base offense level would be 14, not 16. With a correct total weight of 11.238 kilograms, the subtraction of Tylox results in a total weight of 8.713 kilograms. This would be a base offense level of 14. A lower base offense level would have resulted in a lower sentencing range....

B. The Government Violated Due Process By Engaging in Activity Aimed Solely at Enhancing the Guidelines Sentence

On 1 February 1989, Agent Lucas, acting undercover, brought two empty pill bottles to Mr. Tanner for refills. The bottles, which were for Darvocet (a Schedule IV drug) and Percodan (Schedule II) were silent as to refills. Mr. Tanner refused to fill the Percodan bottle. On 24 February, Lucas returned with empty bottles for Darvocet, Tylenol #3 (Schedule III) and Percodan. Mr. Tanner again refused to fill the Percodan bottle. On 10 March, Lucas again brought in the Darvocet, Tylenol and Percodan empties. Mr. Tanner continued to refuse to fill the Percodan. On 13 April, Lucas again tried to get Tanner to refill the Percodan bottle. Tanner again refused. On 15 May, Agent Lucas tried yet again to get Mr. Tanner to refill the Percodan bottle. Tanner again refused.

Still trying to get Mr. Tanner to dispense a Schedule II drug, the government sent in a convicted addict on 7 July 1989 with a prescription for Tylox on a legitimate prescription pad. The prescription had no quantity indicated. Mr. Tanner dispensed 10 Tylox pills... Apparently not satisfied with the small number of pills, the government sent the informant back, on 13 July, to try to get a refill. Tanner refused and called the police to report it.

The facts of the instant case are strikingly similar to the facts in United States vs. Shepard (1994). In Shepard, the government repeatedly induced the defendant, who had cocaine powder, to convert it to crack cocaine prior to sale. Under the Sentencing Guidelines, as the court noted, the sale of crack is treated far more serious than identical violations involving cocaine powder. For example, a base offense level of 18 can be reached with 10 grams of cocaine powder, but only 1 gram of crack reaches the same level, a difference of 100-fold. The differences in the instant case are even more dramatic.

As noted earlier, scheduled drugs are converted into an "equivalent" amount of marihuana. Each gram of a Schedule III or Schedule IV substance converts into, respectively, 2 grams of 0.125 grams of marihuana. Each gram of Oxycodone, the Schedule II component of both Percodan and Tylox, converts into 500 grams of marihuana. Thus, the conversion rate for this Schedule II drug is 250 times the rate for Schedule III drugs and 4,000 times the rate for Schedule IV drugs. In addition, Schedule II drugs, regardless of amount, carry a mandatory minimum Guideline offense level. Thus, by inducing a Schedule II sale, the government guaranteed it would get a base offense level of 12, regardless of what the investigation might show the target was actually doing. The government also guarantees a converted weight with respect to the Schedule II units up to 4,000 times higher than that which would occur based on what their investigation showed that Tanner was allegedly dispensing.

The Shepard Court found that:

"The ability of a low enforcement officer to enhance a defendant's sentence through his own actions to an enormous degree strikes at the very heart of our system of justice. It is entirely at odds with our constitutional system that police should be given the discretion to vastly increase a defendant's sentence.... this practice shocks the conscience of the Court."

...In the instant case, the government's repeated attempts to induce Mr. Tanner into dispensing a Schedule II drug were not justified by legitimate investigation needs. The government had complaints that Mr. Tanner was improperly dispensing Schedule III and IV drugs only. There were no allegations that he was improperly dispensing any Schedule II drugs. Yet, the government tried over and over again to induce such a dispensing. Mr. Tanner refused to improperly dispense a Schedule II drug on 1 February 1989, 24 February, 10 March, 13 April, and 25 May. On 7 July, five months after the government had confirmation of the complaints it had received, and after six months of trying to get Mr. Tanner to commit a crime involving a Schedule II drug, the government was finally able to induce a very small amount of Tylox. When they tried to get more, Tanner called the police to report it.

The sole purpose of inducing a Schedule II dispensing was to dramatically increase Mr. Tanner's sentence.... the government, despite their repeated attempts, were unable to induce more than a very small Schedule II dispensing. Even this small amount, however, impacts on the sentence.... Mr. Tanner should be resentenced appropriately for what he did without including the one sale it took six months to obtain which required the use of a regular doctor's prescription pad to accomplish and which he reported to the police when a refill was attempted. This six-month effort was solely intended to up his sentence. Such conduct should not be encouraged or condoned.

CONCLUSION

The government engaged in a six-month effort to induce Mr. Tanner into improperly dispensing a Schedule II medication. They persisted in this effort even though he persistently refused and they had no evidence that he had committed this offense in the past. A key government witness then perjured himself at trial with regard to Mr. Tanner's responses to these efforts. In addition, the prosecution violated the trial court's clear discovery order and presented impermissible propensity evidence.

As a result, Mr. Tanner was unfairly prejudiced in his attempt to defend himself against numerous criminal charges. At sentencing, he was further prejudiced by an erroneous sentencing guideline calculation that went uncorrected. The trial court then failed to exclude the improper Tylox dispensing that was solely attributable to improper governmental conduct which served no purpose but to increase Mr. Tanner's sentence.

The government then sought to forfeit T-Mart Drug Corp., a corporation it had never indicted and on which a jury had never rendered a verdict. The government also sought to forfeit separate tracts of property under a facilitation theory when it presented evidence that each tract was used as an instrumentality of the crimes charged. The forfeiture verdict was based on an incorrect standard of proof and on faulty special verdict forms.

In sum, the government violated Due Process with conduct unjustified by any legitimate investigation needs. Mr. Tanner was then denied a fair trial when the government suborned perjury and sandbagged evidence. His sentence following conviction was based on erroneous calculations. Finally, the government forfeited a corporation that was never the subject of forfeiture and "facilitation" property which the prosecution never proved was used to facilitate any violations.

NOTE: The appeal was denied by the U.S. Court of Appeals For the Fourth Circuit.