THE TRIAL
In the United States District Court
For the Western District of Virginia
Harrisonburg Division
United States of America
vs.
William Bennett Tanner
NOTE: The jury trial began Jan. 5, 1993. Ray B. Fitzgerald, Assistant U.S. Attorney, was counsel for the Government. Thomas J. Wilson was counsel for the defendant, William Tanner. James H. Michael, Jr., United States District Judge, presided. (Following are edited excerpts from the trial:)
Prosecution's Case:
(Testimony from Special Agent J.W. Lucas of the Virginia State Police, who was assigned to the Bureau of Criminal Investigations, the Pharmaceutical Drug Diversion Unit:)
Fitzgerald: What is a pharmaceutical drug diversion, as distinguished from some other kind of thing that you might investigate?
Lucas: Our sole purpose of the Department of State Police is to investigate all pharmaceutical drug diversion complaints, whether it be through doctors, pharmacies, wholesale distributors, or people on the streets diverting drugs from these locations.
Fitzgerald: And you exclude only, I suppose, ordinary street drugs from your investigations...?
Lucas: Yes, sir. I do not work illicit drugs....I was asked by the investigative case agent to assist in an undercover capacity, in which I would go into the T-Mart Pharmacy located in Staunton, Virginia, and attempt to prove or disprove allegations that had been brought forward to the Department of State Police involving pharmaceutical drug diversions. On January 24th of 1989, I did go into the pharmacy at that location in Staunton and present certain investigative prescriptions...An investigative prescription is a prescription that is legitimately obtained by an investigator, or police officer, through a physician, with the knowledge of the fact that those drugs will not be used as a normal course... They would basically be used for investigative purposes...
Fitzgerald: Basically, is it a pretend prescription that a real doctor writes knowing that it's for an investigation?
Lucas: Yes, sir...
Fitzgerald: Did you have one or more prescriptions in January of '89?
Lucas: At that time I had three investigative prescriptions.
Fitzgerald: What kind of drugs did you have an investigative prescription for?
Lucas: The three drugs that I presented to the pharmacist were for Percodan Darvocet-N 100 and Tylenol No. 3. These are Schedule II, III and IV drugs, which basically are directed to for from severe to minor pain.
Fitzgerald: Which one of those medications is a Schedule II, that is, a more stringently regulated drug?
Lucas: The Percodan prescription...
Fitzgerald: Did those prescriptions have your true name, Special Agent Lucas, on them or was there a pretend name?
Lucas: ... In this investigation, I took on the role as J.E. Williams, a construction worker.
Fitzgerald: And the prescriptions were written to J.E. Williams?
Lucas: Yes, sir.
Fitzgerald: What did you do with the three prescriptions...?
Lucas: At the briefing and direction of Special Agent Greg Lam, I did enter the pharmacy with these prescriptions and presented them to Pharmacist Tanner...
Fitzgerald: What, if anything, did you and he discuss about the prescriptions?
Lucas: Basically, I think there was an address discussion at the first visit into the pharmacy.... where I was residing at. And I think there was some work questions, such as, who I was working for, what area I was living in....
Fitzgerald: Were you able to get all three prescriptions filled on that same day?
Lucas: Yes, sir. On the initial visit, January 24th of '89, I did get the prescriptions filled.
Fitzgerald: Now, did those prescriptions bear any identification of whether they might be refilled? That is, were refills authorized on the prescription?
Lucas: At the time that we received the investigative prescriptions, there were no indications of refills on any of the prescriptions...They were just left blank...
Fitzgerald: Did there come a time, sir, when you went back to try to get refills, even though the prescription was silent on the subject of refills?
Lucas: Yes, I did... My next visit to T-Mart in Staunton, Virginia, was on February 1, 1989. At that time, I took an empty Darvocet-N 100 bottle, which I had obtained on the 24th, and I went into the pharmacy. I took the vile and I placed it in a bag, along with the Percodan vile, and both of these viles were empty and bearing the name of J.E. Williams. And I placed them on the counter...After removing the bag from the counter, Pharmacist Tanner took the viles and appeared to be checking them. At that time he advised me that due to the fact that the Percodan prescription was a Schedule II, I would have to have another prescription from the doctor. He stated if I got another prescription that he would fill it. (NOTE: This indicates Tanner's unwillingness to engage in more unlawful activity than the allegations in the case. Schedule II drugs are more stringently controlled.) He went on and filled the Darvocet-N 100 without any questions or any kind of confirmation that I saw while I was in his presence, such as phone calls, questions, any kind of conversation with, anyone else in the store, due to the fact that he wanted to confirm whether or not there was a refill for that prescription.
Fitzgerald: Special Agent Lucas, when he filled the prescription the first time, or any time in the refills, did he indicate on the label of the bottle whether refills were authorized?
Lucas: No, sir, he did not.
Fitzgerald: It was just silent as to refills?
Lucas: Yes, sir.
Fitzgerald: But, nevertheless, when you brought the bottle back, he was willing to refill it?
Lucas: Yes, sir, that's correct... (Lucas goes on to testify about several other similar refills granted by Tanner)
Fitzgerald: When you were making this series of purchases, did you engage Tanner in conversation?
Lucas: Yes, sir. On several occasions we did discuss such things as gardens, fishing, the Galax Fiddlers Convention, basically how hard I worked, who I worked for, where I was living, such things as that....
(Cross-examination by Wilson)
Would you characterize the T-Mart Pharmacy from the times that you went in there as a busy place?... Was music playing every time?
Lucas: Usually the radio was on, yes, sir.
Wilson: Were you charged consistent for the same amount of money each time for each prescription to the best of your recollection?
Lucas: Yes, sir.
Wilson: Was there any indication... that you were overcharged?
Lucas: Based on my experience, no, sir. (NOTE: This indicates the sloppy atmosphere at T-Mart Pharmacy and that Tanner's dealings with the undercover agent, aside from the unauthorized refills, were entirely legal and appropriate.)
(Testimony from Special Agent Greg Lam of the Virginia State Police, also of the Bureau of Criminal Investigation in the Drug Diversion Investigation Unit.)
Fitzgerald: Were you part of the investigative team at the time the decision was made to vary Special Agent Lucas' undercover name (on some of the prescriptions on his return visits?
Lam: Yes, sir, I was.
Fitzgerald: What was the reason for varying it? And what was the reason for selecting Wilson as the variation?
Lam: I wanted to present something that was close and sounds and looks as J.E. Williams' name..."
Fitzgerald: After the undercover phase of the investigation, did you and other members of the investigation apply for search warrants for the location of T-Mart?
Lam: Yes, sir, I did... These were executed on November 15th of 1989.... to recover the investigative prescriptions in the name of J.E. Williams and J.E. Wilson, respectively, and also in the five categories of similar drugs, analgesic drugs, pain killers, that our investigation was encompassing...
Fitzgerald: What drugs were you authorized to look for?
Lam: We were looking for Tylenol with Codeine, Tylenol No. 3, Acetaminophen with Codeine, Empirin, aspirin with Codeine, Diazepam, which is Valium, generic for Valium, Propoxyphene and Wygesic, which is a name for Propoxyphene hydrochloride.
Fitzgerald: Is it fair to say, sir, you had four varieties, for want of a better word, of pain killers?
Lam: Yes, sir.
Fitzgerald: Plus Valium, which is sort of a nerve pill, relaxant?
Lam: That would be my characterization, yes, sir...
Fitzgerald: How do you execute a search warrant?
Lam: Well, I introduced myself to Mr. Tanner and my intentions and provided him a copy of the affidavit and warrant as to my purpose for my visit. He was very cooperative and straightforward with us...afterwards, what we set out to do was try to determine the validity of the prescriptions that were seized to see, in effect, if a doctor, the doctor enumerated on the prescription, had authorized the dispensing of the medicine, and if, in fact, the patient enumerated on a particular prescription was, in fact, the patient that was the patient to that physician, and if, in fact, they did receive the medication as indicated.
Fitzgerald: Can you estimate for the jury roughly how many doctors there were represented on all the prescriptions combined?
Lam: Roughly, there was forty-three physicians.
Fitzgerald: And how many patients named?
Lam: I believe I spoke with approximately a hundred and fifty patients....
(Cross-examination by Wilson)
Wilson: So there was one other buy that Agent Lucas - or attempted buy, that Agent Lucas didn't testify to; is that correct?
Lam: That's correct.
Wilson: As I understand it, on that particular day, Mr. Tanner refused to fill any of the prescriptions; is that correct?
Lam: Yes, sir, that's correct.
Wilson: Stating that they were now out of date?
Lam: ... he refused to fill any. (NOTE: This indicates Tanner's unwillingness to give refills beyond the six month period that refills could be allowed without a new prescription being written.)
Wilson: Now, with the addition of that September 6th transaction, does that now cover all of the undercover buys or attempted buys?
Lam: ... it does not.... There were two other attempts that come to mind, and the second of those two were unsuccessful.
Wilson: Is that the one where he (Tanner) called the police to say he was concerned to say that there was a fraudulent prescription in the area?
Lam: Someone called the police....(NOTE: It is later revealed that Tanner called the police to report this attempted buy that Tanner suspected to be fraudulent. Lam and the prosecution did not admit that they Tanner himself made the call to police.)
Wilson: Did he have any computerized records that he gave you?
Lam: No, sir, I don't believe he did. I didn't recover any. There was a computer at the pharmacy, but, as I believe Mr. Tanner related to me, that it was not in effect yet....
Wilson: They hadn't yet computerized?
Lam: I don't believe so. (NOTE: Without a computer, record-keeping with complete accuracy was extremely difficult.)
Wilson: The inventory information that you took and the invoices, where were they kept; do you recall?
Lam: Yes. They were on metal, I call them binders, metal rings, where a two-hole punch would be required on the top of the prescription in order that the prescriptions be stacked under that ring binder....
Fitzgerald: Mr. Wilson asked you about unsuccessful attempts to purchase drugs. What was your answer?
Lam: The second of the two events was unsuccessful.
Fitzgerald: What happened in the successful event?
Lam: There was a young lady that came up from the Richmond area with then special agent Kim Bolla. She was a person who had been convicted in another jurisdiction of a related matter, had knowledge of how, for example, in her situation, addicts or people that attempt to obtain pharmaceuticals illegally, this was what she had been convicted of earlier, she was attempting to help us in that in a cooperative venture that she hoped, and her counsel hoped, would lessen her sentence in the state court matter. In any event, that young woman came up and presented in the pharmacy to Mr. Tanner, the pharmacist on duty, a prescription for Tylox with no number enumerated.
Fitzgerald: What schedule is Tylox?
Lam: That's a Schedule II narcotic... Schedule II narcotics cannot be refilled in any event legally. What had happened, she was able to obtain ten Tylox capsules... pay for them and leave the store.
Fitzgerald: What happened the next time she tried?
Lam: It appears that someone in the store, I don't know whom, called the local police to the effect that this person was back...(NOTE: Lam later admits that he did know that Tanner had called the police.)
(Special Agent Lucas is recalled)
Fitzgerald: What happened that day (Sept. 6, 1989)?
Lucas: Basically, after my prescriptions were presented to Mr. Tanner he stated that he could not fill them due to the fact that they were not authorized. They had no refill value...
Wilson: ... was the word expired used in relation to his refusal to fill those prescriptions?
Lucas: ... I believe that word was used at one time...
(Testimony from Elizabeth Scott Milley, executive director of the Virginia Board of Pharmacy.)
Fitzgerald: Can you tell the members of the jury, please, and members of counsel, what a consent order is?
Milley: A consent order is an agreement, pursuant to the Administrative Process Act, which is the Act by which all state regulatory agencies operate in a disciplinary matter by which the Board and both parties agree to certain findings and certain sanctions regarding disciplinary action against a licensee.
Fitzgerald: Does one of those orders relate to 1986?
Milley: The actions took place in 1986. The first order was actually entered April 25, 1987.
Fitzgerald: Does that order reflect an agreement by the Board of Pharmacy and by Mr. Tanner that there some irregularities in his pharmacy in that interval of time?
Milley: Yes, it does.
Fitzgerald: Generally speaking, and in layman's terms, what kind of irregularities were discovered in '86 and reflected in that order?
Milley: Generally speaking, Mr. Tanner failed to maintain complete and accurate records of the drugs he dispensed. He has certain requirements in the law to keep particular records on drugs received and dispensed, and he did not do that completely...
Fitzgerald: Can you tell the members of the jury what a schedule is within the meaning of Drug Control Act, federal and the state counterpart to it? How does a drug get into a schedule, and what's the significance of Schedule II, III, IV and like that?
Milley: Drugs are scheduled based on basically how dangerous they are and their potential for abuse...Schedule I drugs being drugs that are highly addictive, create a high degree of both psychological and physical dependence, and that have no medical purpose, like, for example, LSD. Schedule II drugs are drugs that are very similar to Schedule I drugs, have a very high degree of physical dependence, create high degree of physical dependence, high degree of psychological dependence, and have a high potential for abuse, but do have a legitimate medical purpose, like the drug you may know as Morphine, Demerol, your hard narcotics that you would imagine someone just recovering from surgery or maybe cancer patients would be taking... Schedule III drugs are drugs that, relative to Schedule II drugs, have a lesser potential for abuse, but still create a high degree of physical and psychological dependence.Schedule IV drugs - each one of the schedules go little bit relative to each other. Schedule IV drugs have still a moderate level potential for abuse and lower potential for physical dependence, still a moderate level, moderate to high level of psychological dependence...
Fitzgerald: The medicines... in evidence here.. are any of these Schedule I?
Milley: No.
Fitzgerald: Are any Schedule II?
Milley: No...
(Milley's testimony confirms that the evidence relates only to Schedule III and IV drugs.)
Fitzgerald: Is it fair to say that a real prescription for these things ought to have some oversight by the doctors, some follow on to assure that they're being used according to the prescription?
Milley: ... A Schedule III through V prescription may only be refilled within a six month window and a maximum of five times. And then the doctor has to see the patient again, or has to at least authorize a new prescription before it can be dispensed anymore..
(Cross-examination by Wilson)
Wilson: Based on your experience in looking at pharmacies, would you characterize the T-Mart pharmacy as a modern, up-to-date pharmacy, or an older type pharmacy or what?
Milley: An older type pharmacy...
Wilson: Are most pharmacies computerized now so far as record keeping?
Milley: The majority of pharmacies at this time are computerized. I would estimate, and have estimated, approximately 95 percent or greater are currently computerized...
Wilson: And in 1989 were the great majority computerized also?
Milley: ...maybe between 75 and 80 percent back then...(NOTE: This again shows that Tanner's pharmacy was not modernized and not well-equipped for accurate record-keeping.)
Wilson: ... the file cabinets where the invoices and things like this were kept, were they kept in a haphazard manner...?
Milley: ...There was, obviously, missing information that was documented on some of them, and because we had discrepancies in audit results, something was wrong with the record...
Wilson: I'm talking about just the way the office was maintained and things like this, it was a pretty slipshod operation or sloppy operation, based on your experience?
Milley: ... It did not appear to be a tightly run ship.
Wilson: Now, the audit numbers that you gave us showing percentages of overages and underages (of drugs on hand and dispensed), in arriving at those figures, of course, you utilized figures that have come from the records that were at that location, right?
Milley: That's correct.
Wilson: And sloppiness or inaccuracies in record keeping are going to be reflected in your result; is that correct?
Milley: It could have been, yes...
Wilson: ... if you are using the pharmacist's count and his records to arrive at those end results, aren't you depending on his accuracy?
Milley: Absolutely...
Wilson: If he's negligent or sloppy or what have you, it affects those results, doesn't it?
Milley: That's one thing that definitely could affect the results, yes.
Wilson: And combined with human error or what have you. So the foundation of any statistics are the accuracy of the information?
Milley: Yes....
Wilson: Why didn't you shut him down?... Why didn't you suspend his ability to practice? Did you not think it was that serious?...
Milley: You say you. I am not the Board of Pharmacy... I can't answer that. They are an independent body. They act independently...
(From testimony of Doctor Quintin Carr of Staunton)
Fitzgerald: How long have you been in the practice of medicine?
Carr: Thirty-eight years...
Fitzgerald: Do you know (Tanner) as a pharmacist, or do you know him socially in town?
Carr: Both....(NOTE: Most doctors who testified had been practicing in Staunton for several years and knew Tanner socially as well as professionally. Tanner asserts that through these relationships he had understandings with the doctors that refills for pain killers within the covered six-month period did not necessarily require their formal permission.)
Fitzgerald: What would be your practice with pain pills?
Carr: ... it depends on the individual and their medical problem because, if it's a chronic ailment or long range arthritis, you might continue to refill it where you know it's not going to cure them...
(Cross-examination by Wilson)
Wilson: Doctor, were the people that were named in those prescriptions (in evidence) patients of yours?
Carr: Yes, sir, they were.
Wilson: Were they patients for whom at one time or another, you hadprescribed pain killers?
Carr: There are two different patients here, and both of them I had prescribed some pain medications.
Wilson: No further questions...
(Testimony from Richard Fauver, a T-Mart Pharmacy customer)
Fitzgerald: Mr. Fauver, did there come a time when Mr. Tanner began to refill your bottle with pain killers when you came around even though the prescription was too old or it didn't authorize refills or you hadn't been to the doctor?
Fauver: Yes...
Fitzgerald: Special Agent Lam caught you in another kind of a prescription crime; did he not?
Fauver: Yes...
Fitzgerald: What was your routine when you came into T-Mart?...
Fauver: I'd just come in, set the bottle up on the counter and wait.
Fitzgerald: Did you have to say anything or just set it up there?
Fauver: I set it up on the counter.
Fitzgerald: And he'd fill it?
Fauver: Uh-huh...
Fitzgerald: ... What, if anything, did the state police tell you to encourage you to come to court today and testify about this series of dispositions?
Fauver: I guess it would be taken into consideration if I came down here...(NOTE: This witness, like most of the customers who testified, had been caught by police trying to fill prescriptions illegally. Clearly, their own legal status with the police impacted their testimony.)
(Cross-examination by Wilson)
Wilson: Do you have a herniated disc or anything like this?
Fauver: Supposedly, the vertebrae in my neck, the spaces between those are gone, and the vertebrae is going on top of each other and pressing....
Wilson: When did you eliminate the problems that were causing your back and neck pain?
Fauver: They have not been totally eliminated. I don't guess I ever will eliminate them.
Wilson: So the pain just flares up?
Fauver: From time to time, yes....
(Testimony from Steve Hall, a T-Mart customer)
Fitzgerald: Did there come a time, sir, when Special Agent Lam caught you, for want of a better word, trying something else (other than obtaining illegal refills from Tanner)?
Hall: Yes.
Fitzgerald: What were you trying to do to get medicine then?
Hall: I was writing my own prescriptions....
Fitzgerald: Did you and Special Agent Lam on that evening, when he stopped you and talked to you about going to the hospital or whatever, get you some help, did you talk about being prosecuted for trying to write those prescriptions?
Hall: ... he told me, I'm not going to take you in right now... He was very nice..(NOTE: Again, this is indication of the prosecution influencing testimony of these customers.)
(Testimony from Doctor Howard H. Hanna, Jr.)
Wilson: Do you know (Tanner) socially or professionally or both?
Hanna: I know him as a pharmacist, and I have known him as a friend and acquaintance in the past...
(Testimony from Doctor William C. Branscome)
Fitzgerald: How long have you been practicing as a physician?
Branscome: Twenty-seven and a half years in Staunton..
Fitzgerald: Do you know (Tanner) socially or professionally or -
Branscome: Both...
(Testimony from Doctor Eugene Nolley. Like most doctors, he testified that he did not remember authorizing specific prescriptions and refills that had his name on it, that were dispensed by Tanner.)
(Cross-examination by Wilson)
Wilson: Sir, can you estimate for the court how many patient contacts you would have in any given year?
Nolley: In a year?
Wilson: In any year, 1989 specifically.
Nolley: Only by giving you multiple, I suppose. It's probably about twenty-five a day, a hundred patients a week.
Wilson: Five thousand a year?
Nolley: It would probably be more than that, more like six.
Wilson: So when you testified about one of the five or six thousand transactions from 1989, you testified not based on your present recollection. You just looked at your records and testified as towhat the records indicate... So your testimony isn't from present recollection of 1989. It's from a review of the records, right?
Nolley: Yes, sir...
(Testimony from Ronald Dixon, a T-Mart customer)
Fitzgerald: ... Did you have a medical condition for which you initially had a prescription for?
Dixon: Yes.
Fitzgerald: What was your prescription for?
Dixon: Darvon...
Fitzgerald: How long was it, let's say, after you saw the doctor, how much longer were you able to get medicine just by calling Mr. Tanner and going over to see him?
Dixon: It was several months, and then I changed doctors.
Fitzgerald: Did that doctor insist on seeing you more regularly?
Dixon: I would go to him about every six months, I believe it was.
Fitzgerald: And he was writing a new prescription for you?
Dixon: Yes, uh-huh. I assumed that he was authorizing that, too, you know.
Fitzgerald: Were you filling them at T-Mart?
Dixon: Yes...
(Cross-examination by Wilson)
Wilson: Sir, I understand that you would visit your doctor every six months or so?
Dixon: Yes, sir.
Wilson: And when you would visit with your doctor, you would review your medication and things of this nature?
Dixon: Yes, sir.
Wilson: He was aware that you were on this medication?
Dixon: Yes, sir...
Wilson: You never went more than six months without seeing your physician?
Dixon: No, sir...(NOTE: Further indication that Tanner refused refills beyond the six-month limit.)
(Testimony from Doctor Mary O'Brien)
Fitzgerald: What, if anything, ma'am, do you conclude about the fact that none of those (prescriptions filled by Tanner) bear your original signature? Is that consistent with your practice or inconsistent?
O'Brien: It's inconsistent...
(Cross-examination by Wilson)
Wilson: Now, you note that your signature was not on those prescriptions. Now, they're not purported to be prescriptions that were signed by you. They are purported to be phone-in prescriptions.
O'Brien: That's correct.
Wilson: Your signature wouldn't appear on a phone-in prescription under any circumstances, would it?
O'Brien: No, sir....
(Testimony of Doctor Harry L. Moore)
Fitzgerald: How long have you been a medical doctor practicing in Virginia?
Moore: I began practice in 1959...
Fitzgerald: Do you know (Tanner) socially or professionally or both, perhaps?
Moore: Both.
Fitzgerald: Do you know whether some of your patients have through the years had their prescriptions filled at his pharmacy?
Moore: Yes, sir, they have.
Fitzgerald: Will you tell us in general, sir, and then we will get into some specifics, what your practice has been with respect to telephone authorizations of prescriptions for pain killers and nerve pills.
Moore: I will. On my patients and people that I know, I will call in prescriptions in limited quantity for both pain killers and nerve pills...
Moore: (examining prescriptions in question that were refilled by Tanner) ... The Tylenol with codeine for Mary Collins... is for a number that I would have called in, number thirty. But again, it was for five refills and that would not be.
Fitzgerald: Was Mary Collins a patient of yours from time to time?
Moore: Mary Collins was a patient of mine, yes, sir.
Fitzgerald: Up into '89 there or before that?
Moore: I was her doctor before that, and I have seen her some, but not much since.
Fitzgerald: Certainly not for five refills of Tylenol 3?
Moore: Not for that, no sir...
(Cross-examination by Wilson)
Wilson: Mary Collins was a patient of yours.. in 1989 she would have been a patient?
Moore: Would have been, yes, sir.
Wilson: And in 1989 you were prescribing pain pills for her, weren't you?
Moore: I was, yes, sir.
Wilson: And you had been prescribing in 1989 pain pills for several years for her on a regular basis?
Moore: I had been prescribing for her, yes, sir, on a regular basis.
Wilson: What was that pain for?
Moore: She had significant arthritis.
Wilson: Is it pretty common to treat arthritis with Schedule III or IV pain pills?
Moore: Darvocet, yes, sir.
Wilson: And Tylenol 3...
Moore: Yes, sir.
Wilson: Can you recall off the top of your head how many years she had been taking pain pills of that sort?
Moore: No, sir, I cannot...
Wilson: Was she on any other medication that you can recall?
Moore: I did have her on other medication, yes, sir...
Wilson: And can you recall when would you have met with her, you were aware that she was on the pain pills on a pretty much constantm basis for her arthritis; is that right, for arthritis? Is arthritis... something with older people with chronic arthritis, is that a constant pain sort of thing?
Moore: It can be, yes, sir.
Wilson: If someone has pain like that with arthritis, how many Schedule III or IV pills would a person like that take in a day, someone like Miss Collins?
Moore: Usually, with the schedule drugs, both the Darvocet and the Tylenol with Codeine, we try to limit those to flare-ups so that she does not take those drugs regularly...
Wilson: So are they prescribed on a - to be taken on a PRN basis? You ask the people to try not to take them any more than they have to. The patient pretty much controls when he or she takes them as needed?
Moore: This is basically true, yes, sir...
The Court: Members of the jury, the Government calls as its witness Mrs. Barbara Puffenbarger to testify about certain events which occurred before the date alleged for the beginning of these offenses in the indictment.
This testimony is for a limited purpose. The testimony does not refer to any offense for which Mr. Tanner is presently on trial and cannot be considered by you as evidence of such an offense.
It is admitted to show, if you conclude that it is proper, to show motive or intent or purpose or knowledge on the part of the defendant of the transactions which took place there. And, presumably, it will be argued that this knowledge is carried forward into the offenses for which Mr. Tanner is on trial...
All right. With that cautionary instruction, please remember now that none of this testimony can be considered by you as proof of an offense. It lies outside the scope of the indictment...
Fitzgerald: Were you in an accident, or did you have an illness that a doctor prescribed medicine for you?
Puffenbarger: I had an accident where I work.
Fitzgerald: What kind of medicine did you have a prescription for?
Puffenbarger: Darvocet.
Fitzgerald: That's a pain killer?
Puffenbarger: Yes, sir.
Fitzgerald: Did there come a time when you found you didn't need to go back to the doctor to get your prescription filled?
Puffenbarger: Yes.
Fitzgerald: What could you do instead of going to the doctor to get a prescription?
Puffenbarger: Just go to Mr. Tanner.
Fitzgerald: Did you talk with him about what you proposed to do to get him to agree to do it, or did you just sort of fall into it?
Puffenbarger: No, just sort of fell into it.
Fitzgerald: Did you develop a routine or practice about how it happened?
Puffenbarger: Uh-huh, yes.
Fitzgerald: Tell the members of the jury how it went. Suppose you had an empty bottle and you wanted it filled, what would you do?
Puffenbarger: I usually would just call mine in and go in each week and get it. Sometimes I'd take the bottle in and get it.
Fitzgerald: You'd phone Tanner?
Puffenbarger: Or whoever was working there.
Fitzgerald: Give them your name?
Puffenbarger: And the number on the bottle.
Fitzgerald: And tell them you wanted a refill?
Puffenbarger: Yes....
(Cross-examination by Wilson)
Wilson: Ma'am, when did you first have contact with any members of the state police force or any investigators concerning Mr. Tanner?
Puffenbarger: I talked with Mr. Lam in '88 when I first got out of the hospital.
Wilson: In 1988?
Puffenbarger: Yes, sir.
Wilson: And you told your whole story to Agent Lam in 1988, the whole story that you told us today?
Puffenbarger: Yes, sir....
(The prosecution concluded its case. The Court asked for any motions.)
Wilson: Your Honor, at this point I would like to make a motion with regard to Counts One through Twenty-four for a judgment of acquittal. I would like to first address Counts Ten through Fourteen.
The case has been presented by the Government in this case, so far as these counts, relies primarily upon the testimony of physicians, all of whom, I would estimate, the testimony shows, see at least five thousand patients per year.
They relied on their records, and none of them has a present recollection. I remember several of the physicians testified that they may very well have authorized the dispensations for the prescriptions that had been placed into evidence.
So in regard to those counts, we have a mixture where, by the Government's own evidence, they show testimony or exhibits that may very well be valid and some they claim are invalid. Therefore, they have used that evidence for both guilt and innocence and created, if you will, a reasonable doubt in regard to those counts.
In regard to Counts 15 through 24, which are basically the record keeping counts, I would submit that there has been a shotgun approach, but I cannot recall, off the top of my head, evidence as to any of those individual counts that have been pointed out as such.
I would submit that the evidence that has been produced, instead, goes to Counts Ten through Fourteen. And I would ask if the court, of its own memory, were to review the evidence, I would submit the court would have a difficult time finding evidence of guilt on Counts Fifteen through Twenty-four.
Then I have one last motion that goes to Counts One through Twenty- four. There is the testimony of one witness that I submit was shocking today, and that was the testimony, I believe her name was Barbara Puffenbarger, the girl that testified and was putting in the evidence activity that occurred prior to 1988 I believe.... the uncontradicted testimony before the court today is that all of the information that Miss Puffenbarger had concerning the activities of Mr. Tanner was in the hands of the Virginia State Police, and the case agent in this case, prior to January 1, 1989.
That means for every minute of every day covered by the indictment in this case, the defendant, Mr. Tanner, was operating when they already had that information as to what had happened through that lady.
The State Board of Pharmacy had him on probation...and that was for sloppy practice of pharmacy, poor record keeping, both as to dispensations and as to inventory, and as to receipt of drugs. And, yes, with all that knowledge, they sat back and observed.
When they sent an undercover agent into the T-Mart Pharmacy to make these purchases, they didn't go in for one purchase. They went in for one, two, three, four individual purchases that indictments arose out of, and a fifth one being the first time that they were in there. This covered five to six months.
In every instance, they also attempted to have the defendant dispense Percodan. They never gave him the benefit of the doubt on the fact that he kept refusing to do that. Then they also failed to introduce into evidence the fact that he, when approached with the prescriptions that were six months old, he refused to fill those...(NOTE: This gets to the essence of the defense's assertion that evidence against Tanner was deliberately enhanced over time to increase his sentence and increase the chances for forfeiture.)
Every single piece of activity that took place during that ten month period, took part literally under the nose, with the complete knowledge of the case agent, with the Virginia State Police, all of it. They allowed it to happen. They sat there. They observed it.
There is such a thing as, I believe the case law calls it outrageous conduct. And outrageous conduct can be sufficient to defeat a prosecution, and I believe that it comes about when the conduct of the Government is such that it rises also to a level of culpability where they share in the responsibility for what is taking place...
If they believed in good faith that there was a dangerous situation there, there was nothing stopping them from having Mr. Tanner arrested and prosecuted on state charges after the first controlled buy, or the second, or the third in January or February of 1989....
The Court: The doctors' testimony, generally speaking, was very firm in terms of the initial amounts of the prescribed drugs, usually Wygesic, and very definite about the repeat or refill proposals, which appeared on the forms as not being what the physician would do...the motion for judgment of acquittal as to all Counts is overruled....
The defense presents its case.
(Testimony from Ruth Tanner, William Tanner's wife)
Wilson: How long have you been married?
Mrs. Tanner: This is our thirty-sixth year. We were married in 1957.
Wilson: How long have you lived in the Staunton area?
Mrs. Tanner: Since 1963, June of 1963.
Wilson: Now, you don't work in the pharmacy business, do you?
Mrs. Tanner: No, no, I do not. I helped him with his bookkeeping when he first got started years ago, and I have, you know, relieved the bookkeeper once when she had to have a heart valve put in...
Wilson: Now, Mrs. Tanner, you had an opportunity to observe Mr. Tanner for a good many years. During the Eighties, 1980s, were there any changes in Mr. Tanner? Did he become forgetful or anything like this?
Mrs. Tanner: Yes, he really has. His mother passed away in 1984, and that was kind of the break-up of his family. A lot of animosity in selling their estate. They settled that finally in 1986. He was very angry about the whole thing, and since then I have seen a gradual decline.
Wilson: Did there ever come a time when you were concerned as to whether your husband was losing his facilities to practice pharmacy accurately?
Mrs. Tanner: Yes, yes. His eyesight is not good. His hearing - he's lost 50 percent of the hearing in one of his ears. He probably does not hear half of what you're saying in the courtroom.
Wilson: Did you and other family members have a powwow, get concerned about his ability to practice pharmacy?
Wilson: Yes. My daughter, who was a third year medical student in Richmond, after being at the store for lunch, or the afternoon, commented that she didn't think he was quite up to it, that the three-party prescriptions, you know, being, I assume, the doctors, the patient and the insurance company, and all the fine print and figures, plus the computer - he's not mechanical, never has been.
Wilson: So you were concerned as to whether he was on top of everything?
Mrs. Tanner: Right, right, certainly was, have been.
Wilson: But my question to you, though, has this been a gradual thing during the Eighties?
Mrs. Tanner: Yes. I think the depression has increased. It certainly has, the anxiety.
Wilson: Does he have the memory or the retention that he did now, or in 1989, that he did in 1980?
Mrs. Tanner: No, no. We can be leaving town for a trip, and he'll be going out the wrong side, in the wrong direction.
(Cross-examination by Fitzgerald)
Fitzgerald: Apart from what you describe as his diminished alertness and ability to remember, and so forth, did he have other medical problems that you knew of... particularly in June of 1989?
Mrs. Tanner: Well, he has had some chest pains, yes, sir.
Fitzgerald: Did you go up to the emergency room with him one day.
Mrs. Tanner: I did, five o'clock one morning...
Fitzgerald: Did Doctor Evans give him a prescription?
Mrs. Tanner: Yes. He wrote something. He had a prescription pad in his hand. And he told Bill that.. since we are associate professions... I don't need to write out all these, because I think it was more than one, and he says, you can write them out when you get to the store. I drove him to the drug store and he went in and filled the prescriptions, and we went back home...
Fitzgerald: When you say chest pain, you mean like a heart attack kind of pain?
Mrs. Tanner: That's what he thought it was...
Fitzgerald: Out of your admiration, your affection for your husband, what were you going to do, you and your daughter, finding out that he couldn't see or hear as well as he once did, couldn't remember?
Mrs. Tanner: What I did, my concern for him, maybe I encouraged him to go have his checkup...
Fitzgerald: My question though, ma'am, was whether you ever talked it through?
Mrs. Tanner: Oh, well, yes. I was constantly trying to get him out of that drug store.
Fitzgerald: Trying to get him to spend more time at home, rest more?
Mrs. Tanner: Yes.
Fitzgerald: Take some trips?
Mrs. Tanner: Yes.
Fitzgerald: Did you know about these consent orders the court has admitted as Exhibit 11?... This is an order about your husband in '86, and another in '88, about his practices. Did you know that he had been in a little trouble about his record keeping in '86 and '88?
Mrs. Tanner: Oh, I had heard something about it, yes, yes, sir.
Fitzgerald: And did that suggest to you, or to him, if you know what it suggested to him, that he ought to consider winding down the practice or bringing in someone to help him, or being more careful, or doing fewer prescriptions, or anything like that, any precautions he could take?
Mrs. Tanner: Well, as with most men and women, they're very proud, and so I'm sure he thought about it...
(Testimony of Rebecca Tanner, M.D., Mr. Tanner's daughter)
Wilson: Do you work in Houston?
Ms. Tanner: I do. I'm a resident in training in rehabilitation medicine at Baylor....
Wilson: Now, prior to 1990, did you ever work part-time in your dad's pharmacy?
Ms. Tanner: I did. I would work occasionally in the early Eighties, before I graduated from high school, and would help him out over Christmas vacations at times when I came home from college up until '86.
Wilson: Did you work there, or have occasion to work there, for an afternoon or two during the Christmas vacation 1988, also?
Ms. Tanner: Yes, I did.
Wilson: And after you worked there for your Christmas vacation or during your Christmas vacation in 1988, did you ever have occasion to have a conversation with your mom concerning your concerns about your dada's ability to practice pharmacy?
Ms. Tanner: Yes, I did. We discussed many times the fact that we thought the business was getting to be too much for my father to handle.
With the advent of third-party payer and having to shuffle paperwork for Medicare and insurance companies, without a computer and with really just one person helping with the bookkeeping, that this was getting to be quite a stress on him emotionally, and it was starting to show physically.
We discussed the physical problems more so in '88 and the fact that he was really starting to very forgetful and would not remember things that we had talked about the night before, and just very irritable, more so than he used to be...I am in rehabilitation medicine, and through my internship at M.C.V., I had the opportunity to work with many patients that had suffered some of the consequences of alcoholism, and I came to see a lot of similarities between my father's actions and problems and some of the patients that I actually treated and recommended therapy and counseling for..
Wilson: ... as to the way the pharmacy business was actuallyconducted, do you know anything about that or were you just -
Ms. Tanner: Mostly, my role was as a cashier, helping him check out prescriptions with the customers. I never saw any of the book work, behind the counter type of things. I never really was behind the counter much at all, just out front of the prescription counter.
I can say though, that I felt the volume of paperwork and just the work load in general was such that he was not able to keep up. And I never saw records specifically of anything, but I often times remember hearing him say, oh, I have got to get these files on the computer, and I really got to take care of that, and he was not of the computer generation, basically. And I felt that this was a big task for him to actually think about putting all the paperwork on the computer. And he made an attempt, I think, in the late Eighties, he eventually got a computer. But it never was fully functional...
Wilson: Were you aware that he had been placed on probation or had been reprimanded by the Board of Pharmacy?
Ms. Tanner: Yes, I was...
(Cross-examination by Fitzgerald)
Fitzgerald: In light of your observations and your informed opinion about what your observations might mean, what, if any, steps did you take to protect the public from a potentially disastrous mistake your father might have made had he continued the practice of medicine after you observed his decline?
Ms. Tanner: The practice of pharmacy.
Fitzgerald: Pharmacy, excuse me.
Ms. Tanner: I discussed several times with my father, and with my family, that I felt that he should seek professional help, counseling, or therapy of some sort, to relieve the stresses that he was encountering to deal with his alcoholism.
His father was also an alcoholic, and I felt that that had - it is a hereditary problem, does run in families, and I felt like growing up in a household with an alcoholic father, and being an alcoholic himself, that he should have sought help long before the Eighties.
Fitzgerald: Do you happen to know whether he did seek help?
Ms. Tanner: I know that he is under counseling now. I'm positive that he didn't seek any help, that I know of, that we discussed before this year.
Fitzgerald: Did you discuss what you saw about his condition with him before 1989, would you say?
Ms. Tanner: Oh, I did, yes....
(Testimony of Virginia Miller, Tanner's bookkeeper at T-Mart)
Wilson: Can you hear me okay? I know you wear a hearing aid?
Miller: Yes, sir....
Wilson: How long have you worked as his bookkeeper?
Miller: About eighteen years...
Wilson: Did you all maintain a neat, modern office, or was it sort of messy or what?
Miller: No, it wasn't a modern office...
Wilson: Would you describe Mr. Tanner was being absentminded or flustered or anything like this? Was he a good businessman?
Miller: I would say he's absentminded.
Wilson: What were the things that made you think that?
Miller: Well, he would start to do something and not finish it. He'd have different things he was working on at one time...
(Cross-examination by Fitzgerald)
Fitzgerald: Miss Miller, do you know when T-mart Pharmacy opened there in Staunton on Churchville Avenue? Do you know when it opened?
Miller: When it opened, I'm not real sure.
Fitzgerald: In the Sixties?
Miller: I would say so.
Fitzgerald: Was it a large and varied store in those days?
Miller: Yes, sir.
Fitzgerald: Like a K-Mart now days?
Miller: Yes, sir...
Fitzgerald: Did T-Mart own some vacant lots in the name of T-Mart?
Miller: Yes....
Fitzgerald: And Mr. Tanner owned a lot more real estate in his own name, didn't he?
Miller: Yes...
Fitzgerald: Did he have rental property, tenants?
Miller: Yes, he does...
The defense ended its case.
(The Judge's charge to the jury:)
The Court: ... Now, in Counts One through Thirteen of the indictment, the defendant, Mr. Tanner, is charged with violating Title 21, United States Code, Section 841(a)(1). That statute provides in pertinent part, except as authorized by this subchapter, subchapter 1 of Chapter 13 of Title 21, United Sates Code, it shall be unlawful for any person, knowingly or intentionally, to manufacture, distribute or dispense, or to posses with intent to manufacture, distribute or dispense a controlled substance.
Two essential elements are required to prove the offenses charged in Counts One through Thirteen of the indictment. First, that William Bennett Tanner distributed or dispensed Schedule III and IV controlled substances without the authority of a valid prescription issued for legitimate medical purpose by a licensed practitioner in the course of his professional practice. Second, that William Bennett Tanner acted knowingly and intentionally in these respects...
Then Title 21, United States Code, Section 829(b) provides as follows: Except when dispensed directly by a practitioner, other than a pharmacist, or to an ultimate user, no controlled substance in Schedule III or IV, which is a prescription drug as determined by the Federal Food, Drug and Cosmetic, may be dispensed without a written or oral prescription in accordance with Section 503(b) of that Act.
Such prescriptions may not be filled or refilled more than six months after the day thereof, or be refilled more than five times after the date of the prescription, unless the same is renewed by the medical doctor who prescribed the medication...
NOTE: William Tanner was found guilty on all Twenty-four counts by the jury in a verdict entered on January 12, 1993. He was later sentenced to 27 months in prison and a $1,200 fine. The forfeiture issue, Count 25, was considered separately.
The Court: Members of the jury, I told you that I would have to ask you to resolve one further question in this case. Under the law, property which is used to commit or to facilitate the commission of an offense, or offenses, such as those charged in the indictment, requires the United States Government to move for the forfeiture of the property so used. That is the issue which will now be put before you...
Fitzgerald: Having decided that William Tanner committed at least one drug violation, you decided twenty-four, on this property, or excuse me, having decided he committed twenty-four violations, the, next question to you is, did he use T-mart Pharmacy, the business and the building that it's located in, to facilitate those transactions...
I suggest to you that all the evidence in the case is that whatever he did, he did in T-Mart.... So, strictly speaking, I suggest, you've already decided that what he did, he did in T-mart, did inside the store. So the location is probably already resolved.
The only question is whether the building and the business facilitated, aided in any way... These offenses that you have found he committed could not have been committed by you or I out of the trunk of the car. He would have been caught sooner. He would have attracted attention to him much easier if he was selling under a street light somewhere.
The Government theory, and what I suggest is proven to you by all this evidence, is that the only reason he was able to accomplish the crimes that you found that he committed was that he had T-Mart, the pharmacy, as a cover, as a legitimate business in which he could commit his offense, and that he had a building in which to do it....
... if you find by a preponderance of the evidence, a lower standard of proof than you used up until now, and preponderance of the evidence, the court will tell you it's more likely than not, not that reasonable doubt standard.
If you decide it's more likely than not that the existence of the building and the existence of T-Mart aided him in any way in accomplishing the violations you already decided he committed, then you mark, yes, forfeit the building in question, forfeit the interest in the building, and, yes, forfeit his interest in the business...
Wilson: ... let's make sure we understand, that I understand, that we all understand what the Government, your Government, is asking you to do.
What they're asking you to do is to take eight lots of real property, eight parcels of real property. And the only way that the Government would be entitled to ask you to take this property away from Mr. Tanner is if they prove, it's their burden of proof, that the property was used to facilitate a drug transaction. Now, that's their burden. If they fail to prove that the property was used to facilitate a drug transaction, they have not sustained their burden.
Now, the Government's only evidence on this, and their asking you to make determination based on the evidence that they have presented, is that there are eight lots up there and there is a building on some of them, that they're asking you to speculate and take it all. They will ask you to take it all, and that's not right because you have eight lots there. And it's up to them to prove, you know, what is used and what is not used in this business. They chose not to do so.
So I submit to you that if you follow your instructions on that and insist that the Government prove to you which of this property is used for that building, they have failed to carry their burden on that because they haven't shown you. They simply ask you to take it all, just like they asked you to take in the other, they also asked you to take the inventory that's left over there at Mr. Tanner's store.
We're not talking about pills or anything like that, because none of that is there. There is no pharmacy inventory. The Government asks you to take any light bulbs that may be there, any general store inventory that may be there, when the Government's own evidence admits that, as far as they know, this evidence was acquired after 1990. So, obviously, that could not be used to facilitate a crime that occurred prior to that. That's just not. proper.
So I submit to you that those two counts - first of all, they have failed to prove that this property in block was used to facilitate the drug transaction. When I say in block, I mean the whole eight lots. That's just not in evidence. And they have also made it clear that, as far as they know, the inventory that is present at the store today, that's what we're talking about, what's present at the store today, they made it clear that they don't know whether that was, or was not, used or was even in existence at that time.
And it's not up to us. I mean that's up to them to tell you what they feel like they have a right to take. And it's up to you to determine whether they have proven that they have a right to do that...
Fitzgerald: ... The court will instruct you that there are multiple parcels of real estate, or multiple parts of one parcel, and the defendant who owns an interest in any of them, or all of them, and commits violations on them, then the entire tract is subject to forfeiture.
In federal law we don't have to get into the silliness of - in drug dealing, if you sell your cocaine on the front porch, he doesn't just forfeit the front porch, he forfeits the whole house. If an owner uses property to commit a drug trafficking offense, he forfeits the rest of the parcel altogether...
The Court's charge to the jury on the forfeiture count.
The Court: ... All of my previous instructions regarding the credibility of witnesses, duty to deliberate, and so on, apply with respect to these special verdicts. You should consider all of my previous instructions when deliberating as to forfeiture.
There is a difference, however, the difference is in the burden of proof required for you to make your findings. On the charges on which you have returned your verdicts, the burden of proof was proof beyond a reasonable doubt. That is not the burden of proof in a forfeiture case. The burden of proof in a forfeiture case is proof by a preponderance of the evidence.
Now, beyond a reasonable doubt is a high standard. By a preponderance of evidence is a lesser standard. You might look at it this way, that to establish a fact by a preponderance of the evidence means to prove that the fact is more likely true than not true. (NOTE: This instruction to the jury, using the lesser burden of proof, is at issue in later appeals.)
A way we use to describe it to the jury in a civil case is to say when you've got the scales level, and you put the plaintiff's evidence on one side and the defendant's evidence on the other, if the plaintiff's evidence causes the scales to tip slightly in his favor, then that proof has been made by a preponderance of the evidence.
It's that balancing process. It's a lesser burden than the proof beyond a reasonable doubt. In brief, preponderance of the evidence means which has the great weight of the evidence.
While deliberating, you may consider any of the evidence that has come into the trial during the first procedure, or such evidence as came in this procedure.
Now, under the federal drug laws, any person who is convicted of the offenses for which William Bennett Tanner has been found guilty is required to forfeit to the United States the properties an
instrumentalities of his illegal conduct. Specifically, the laws of the United States provide that the following interest, among others, are subject to forfeiture.
Any of the defendant's property used, or intended to be used, in any manner or part to commit or to facilitate the commission of the violations of federal drug laws. The United States Code, Section 21, United States Code, Section 853(b) defines the meaning of the term property as including, One, real property, including the things growing thereon, affixed thereto and found in the land. Two, tangible and intangible personal property, including rights, privileges, interests, claims and securities.
Now, the term facilitate the commission of a federal drug offense means simply that the property need only make the prohibited conduct less difficult, or more or less free from obstruction or hindrance. It does not mean that the property's role in the offense must be integral or essential or indispensable.
If you find that any of the real property named in Count Twenty- five of this indictment was used to facilitate the violations of federal drug laws, for which you returned guilty verdicts, then that property is properly subject to forfeiture to the United States.
You are instructed that if you find only a portion of a certain parcel of real estate facilitated controlled substance violations, then the entire tract is subject to forfeiture. Likewise, any improvements constructed or maintained on the property after the act is committed, rendering the property subject to forfeiture, are equally subject to forfeiture, along with the whole.
Three essential elements are required to prove the charges in Count Twenty-five of the indictment. First, that William Bennett Tanner had an interest in real property within the Western District of Virginia. Second, that William Bennett Tanner used, or intended to use, the real property to commit or facilitate the commission of violations of Title 21, United States Code, Section 841. And, third, that such acts were done knowingly.
Now, property subject to criminal forfeiture may include real property and tangible or intangible personal property, whether or not the property has been seized by the United States Government.
In this case, the United States Government has alleged that certain properties were used, or intended to be used, by the defendant to facilitate the various drug violations. A portion of Count Twenty- five alleging these properties to be forfeited to the United States is as follows:
All those eight certain lots or parcels of land, with all improvements thereon, and all appurtenances thereunto belonging, formerly situated in the Beverly Manor District of Augusta County, Virginia, but since having been annexed into the City of Staunton, designated as Lots Nos. 1, 2, 3, 4, 5, 6, 7 and 8 in Block Number 27 on the map of Staunton Park Addition, which is of record in the Clerk's office in the Circuit Court of the County of Augusta, in Deed Book 113, page 241, and being the same identical lots or parcels of land conveyed to William Bennett Tanner by Oscar Nebel Hosiery Corporation by deed dated 31 August 1965, and of record in the Clerk's Office for the Circuit Court of the City of Staunton in deed book 149 at page 177. All this property presently titled in the name of William Bennett Tanner.
Other property which is subject to forfeiture: William Bennett Tanner operates, and did operate, at the above-described location a pharmacy and general merchandise retailing activity called T-Mart Drug Store, a sole proprietorship. (NOTE: Again, this is proven to be false information.) That business and all business assets, including stock, stock held for sale, fixtures, furniture, business goodwill and trade are all subject to forfeiture to the extent of the defendant's interest in each of those items.
You will have noted that certain properties may be held in the name or held or described in the name of a person, or business entity, other than the defendant, as in this case the property is held in the name of Mr. Tanner. This business is known as T-Mart. I charge you that you should simply disregard any such title or formal claim of ownership of such property.
If you find that such property was used, or intended to be used, in any manner or part to commit, or to facilitate the commission of such criminal activity, the right to any such property vests in the United States at the moment the property was acquired by way of the drug trafficking activity.
Any interest another person may have, or claims to have, in such property can and will be taken into account later by this court in imposing a sentence and in disposing of the property. This is not your consideration as jurors. There will be a further proceeding at which time any persons asserting innocent ownership interest may come forward and present that interest. But stated differently, your sole task now is to decide whether this property, regardless of whose name it is now held, was intended to facilitate the defendant's drug violations...
The indictment, which will go with you to the jury room this time, has a count which you have not seen before. It's Count Twenty-five. It had to be withdrawn from the original indictment until you had passed on the first twenty-four counts. (NOTE: This information reveals that throughout the entire trial to this point, the jury did not know that forfeiture of his business and property would be part of what the Government was seeking against Tanner.) Having done that now, you would be able to inspect Count Twenty-five in the indictment itself...
From the evidence, the deed, and all the evidence in the case, not, mind you, not just what little bit you heard here this afternoon, from all of the evidence in the case, and in the light of these instructions, you find your verdict, yes or now, on the forfeiture issues...
(The charge to the jury was completed.)
The Court: Objections to the charge...?
Wilson: Yes, Your Honor. I noted that Your Honor, in describing the preponderance of the evidence, referred to the use of the scale and compared the weighing of the defendant's evidence against the evidence of the prosecution.
Of course, it implies - and I was concerned that it would imply to the jury that there is an obligation since - and I was taken by surprise by it, since it wasn't contained in the copy of the charge that I have received... it implied that he (Tanner) needed to present evidence today at this proceeding. I'm concerned that it implied to them, when it said, if you weigh the evidence presented by the defendant against the evidence presented by the prosecution. And it concerns me that it would plant a seed in their mind that since we're using a scale and no evidence was presented today, any evidence, be it believable or not, tips the scales....
The Court: ...the objection is overruled....
NOTE: On Jan. 12, 1993, the jury found Tanner's interest in the property is subject to forfeiture. On Jan. 26, 1993, an order of forfeiture was issued outlining the property as "...all that parcel of land and the improvements thereon, including all buildings, fixtures, attachments, easements, rents, leases, and other personal and real property located at 1310 Churchville Avenue, Staunton, Virginia..." The property was seized on Feb. 5, 1993.
NOTE: On March 14, 1994, a hearing was held on the forfeiture issue in the same court before the same judge. Marvin D. Miller joined Thomas Wilson as attorney for the defendant.
Wilson: ... Your Honor, first of all, I would offer as an official document issued by the State Corporation Commission of Virginia, pertaining to T-Mart Drug Corporation. What this is, this is a copy of the last annual report that was filed with the State Corporation Commission by T-Mart Drug Corporation...
The Court: Be so accepted....
Wilson: ... It is our position that, of course, the forfeiture in this case must be in line with and correspond to the indictment.
The indictment, Count Twenty-five, that deals with forfeiture sought the forfeiture of two major assets. Number One was an asset owned by William B. Tanner, individually, and that was real property located in Staunton, comprised of eight contiguous lots improved by a building.
Number two, as set forth in the indictment, and also as set forth in the forfeiture order that was entered back in January of 1993, dealt with the certain assets owned by T-Mart, the T-Mart store, a sole proprietorship. It went on to set forth that those assets might include goodwill and inventory held for resale and things of that nature.
Now, Your Honor, the evidence before you indicates, without question, that the business entity was a corporation. T-Mart Drug Corporation, which is not a party to that indictment. The evidence also indicates that the stockholders - there is more than one holder. Mr. Tanner was not the sole stockholder. The only asset owned by Tanner was the stock.
The forfeiture in this case, so far as the personal property is concerned, can only be personal property that was owned by Mr. Tanner, individually, trading as T-Mart Drug Store. It cannot be of any corporate assets because the corporation is not a party to the forfeiture, pure and simple...
Miller: ... Your Honor, I will address the next point, with the court's indulgence. The court already has received earlier during the sentencing phase the tax returns that were referenced because they were filed with the probation officer as a standard part of the regular financial information, and they also established that this was a corporation, not a sole proprietorship, as the indictment in Count Twenty-five incorrectly indicates.
Therefore, there was no proper - there is no proper notice or vehicle before the court by which the court could forfeit the corporation, or the corporation's assets, because of a lack of notice.
In the Fourth Circuit, as indicated in the recently filed memoranda, forfeitures are disfavored, and because they are disfavored - and the Fourth Circuit in its most recent case, which is U.S. vs. Proctor, a slip opinion from October of '93... talks about this disfavor of forfeitures within this circuit and elsewhere. And those who seek forfeiture must be held with strict compliance with the letter of the law...
In U.S. vs. O'Connell, decided September of '93... they refer to Fifth Amendment due process violations, the principle that's being addressed, and that the failure to give the accurate required notice is not harmless. And so, therefore, this issue is not subject to, according to that decision, and the authorities they cite, is not subject to the harmless error analysis...
It is an appropriate consideration of the proportionality issue that we are addressing today on the real estate. There were eight undelineated lots. That is, they weren't specifically divided, but they are separate pieces of property...
That real estate, on a proportionality analysis, about 15 percent, as I understand the evidence showed, was used for the pharmacy, and the pharmacy is the place at issue in this case, where all the activity occurred.
Our view is that portion of the real estate only in proportionality would be appropriate, and the remaining portion that was not involved would not be...
The Court: Now, do you draw that conclusion out of the authority you have cited for proportionality, the Alexander vs. United States?
Miller: I would, Your Honor, because in those cases, what the court was looking at was saying that forfeiture might be too harsh a remedy, period.
The Court: Well, they were looking at an overall question, were they not?
Miller: What they were looking at is this young man in those days had committed drug transactions using his home for one thing and business for another. And they said that if you take those things in totem, it would possibly exceed the harm or the crime that he committed. And since they ruled it to be punishment in both cases, in Austin and Alexander, because they both are punishments, it might be punishment that doesn't fit the crime because it's too great... In this case, if there is a right to punishment by forfeiture, and we are not conceding that point... there is still within that context a proportionality review...
If you look at the business itself, the corporation goes back into the Sixties. The promissory notes at issue goes back to '66, '68, '74...
We are looking at, okay, what part did the wrong? The pharmacy did the wrong. It occupied a ground floor real estate space, and there is the rest of it that was used for other purposes. And the part that was involved in the criminal conduct may be appropriately apportionable to a forfeiture under proportionality because it is the offending part...
The Court: The real basis of your argument appears to be that unless the Government can prove that a particular asset was used in the commission of the crime, it's not forfeitable. Is that your position?
Miller: ... That's part of my position, Your Honor, but that's not all of it.
The Court: What's the rest?
Miller: All right. A, they have to prove that it was used because that's what their claim is. And, B, they have to give him notice of what it is they claim that was used so the he can defend on it, and failure to give notice is not harmless and is very, very strict. Bowas was clear on that, and the other cases I cited was clear on that.
So the Government has to do two things. And in one of these cases, as a matter of fact, failure to tell someone that the deadline for filing a reply, even when everything was noticed, was defective and caused a remand and vacation of the order.
The Fourth Circuit, I think, is real clear on those issues. And so there are two things now. One is, as you pointed out, the Government must prove that it was an instrumentality by which the crime was committed on a use claim.
The Court: Then you would disavow any forfeiture that flowed to assets acquired as a result of criminal activity?
Miller: ... I wouldn't avow it. There are means by which the Government might be able to go after that, but they haven't chosen to do that in this case. And those statutes and those laws are not before this court.
The Court: All right.
Miller: They might be, but they aren't. And there have been cases where the proceeds of crime have been noticed to be subject of forfeiture, and when the proceeds were, there was litigation about them.
I've had cases where that was litigated, and it turned out that some of the proceeds were not. We have notice of exactly what it is they were looking for, and we litigated it. In a couple of cases, we were able to reach an agreement as to what turned out to be actual proceeds and what appeared to be, but in truth was not.
But that's not this case. This case is use only, and use only goes to the building. And if they wanted to say something else was used, they had to give notice so he could come in and defend on it, so the issue could be presented to the jury, so he could have argued that, well, you can't say that this was used. You can't say that that was used. That's the purpose of notice...
That wasn't done here, other than to the building. And the order establishes that, that you entered, at the Government's request. Because it does not list these notes in any way, shape or form. It lists things in specifics, not in broad, general, vague categories, as you well recognize, I'm sure as Mr. Fitzgerald recognizes, forfeiture orders have to be specific. They can't be general categories of things. They have to name what it is, so that it's clear what's going on...
The final thing is that in considering proportionality, there is the old Hardy case, U.S. vs. Leon Hardy, out of the Fourth Circuit. It came out of the Eastern District of Virginia... It was not a forfeiture. But in it they talked about the factors for courts to take into account in levying financial punishments on individuals in criminal cases.
And it's applicable here in the context of this portion of this case because we are talking about a financial levy against, in essence, against Mr. Tanner. This is not an imposition of an in- custody sentence. This is an imposition of a financial consequence...
Among the factors which the court ought to take into account are needs and future impact on others... it looks to the person's future situation, their age and health, and all the things that go into a decision on a discretionary action regarding financial consequences to someone and what it's going to mean for the future for them and for others.
In that context, I'd ask the court to take those into consideration in determining, as another arm to determine the proportionality of the pharmacy portion of real estate, which is the only thing the court can proportionality have to forfeit today, should be severed from the other portion of the real estate when the court is doing its proportionality analysis, and those factors ought to be considered by the court when the court is making its determination... There is one final piece, and Mr. Wilson will do that...
Wilson: Your Honor, very briefly, I just wanted to clarify something on these promissory notes... We are talking about two sets of promissory notes. Set number one is the four promissory notes that we were referring to dated '66, '68, '74 and '74. These notes were notes evidencing money that was lent to the corporation by Mr. Tanner.
The Court: Aggregating about $560,000.
Wilson: Including the principal and interest that's accrued. And the affidavit that has been introduced by the bookkeeper indicates that down through the last five years or so, points predating the indictment, the corporation was actually paying interest on those promissory notes to Mr. Tanner, and Mr. Tanner was, in turn, reporting the income, that interest income, on his returns.
Now, the other set of notes that would be an asset of the corporation, as compared to a liability of the corporation, would be the problem when it comes to forfeiture also, because it now appears from the financial statements that have been filed by the accountant hired by the Government that the corporation owns as assets several notes payable to the corporation by Mr. Tanner... their value is in the neighborhood of a hundred thousand dollars. So the problem that we have when we look at those notes, the position that the Government is taking is that we want the hundred thousand dollars that Mr. Tanner owes us, but we don't want to pay any of the money that the business may owe him...
(Response by Fitzgerald)
Fitzgerald: ... I don't think there is any question that in the indictment, the grand jury indicted the pharmacy, the store, located at a particular address, trading as T-Mart Pharmacy. Then the next subordinate cause, a sole proprietorship, is in error. Apparently it was a corporation... But in that indictment, even though it incorrectly characterizes the business as a proprietorship, it does say, it names in the indictment the business and calls for forfeiture of the defendant's interest, whatever it turns out to be.
Now, if it were a proprietorship, the case would be simpler. When I drafted the indictment, I thought it was a proprietorship. It was clear that everything that belonged to T-Mart belonged to Bill Tanner, and that's not so, if the court finds T-Mart, Inc. is the true entity operating as the business...
In any case, I think order of entry of forfeiture for the real estate is clear, four hundred and some thousand dollars, whatever it turns out to be worth. That's clearly identified in the indictment, clearly convicted by the jury. As to the property of T- Mart, something less than that, probably in the order of a hundred, let's say, a hundred and fifty thousand, plus or minus, depending on which notes you honor and which notes you dishonor....
Miller: Mr. Fitzgerald talked about that the amount was sufficient, as large as it is, and so on, but didn't name it. As I looked at the record before you today, the Government has accumulated a hundred thousand dollars in cash paid into the coffers before we even came here on collected rents.
The value of the real estate, which everybody agrees is properly named in the indictment, is $400,000. That's a half million dollars. And that would assume the court discount our proportionality argument, which I won't belabor. But a half million dollars is a fair amount of money for this offense, operating between February and October of 1989.
The marshals indicated that they knew it was a corporation, and they did not send out notice as a corporation. They are required to give notice to anybody individually who has an apparent interest in the property to be forfeited, and they are required, not only to tell them they are seeking to forfeit something, and what it is, and why it is, and how they are required to protect their interest...
The reason nobody was addressing the notes before, if you recall last time, we wondered what they were doing, and we said, well, all it is is the goodwill and the inventory. Mr. Fitzgerald said, no. And we said, well, what is it? He hemmed and hawed, and then he said, it's these notes...
...what is clearly available is certainly a lot. It's over half a million dollars. The recommended fine in the presentence report isn't that high Proportionality is not just, as we contend, what's an appropriate part of the property relative to the offense, but it is also sort of a sense of fairness because that's the bedrock in the Eighth Amendment...
Here is enough to satisfy the legitimate interest and decomplicate the case. Sort of cut the nut with the sword and make it simple, and everybody still gets - the Government still gets what they think, or should think, is a fair amount of a hundred thousand dollars, plus the $400,000...
The Court: If there is anything in this case that is certain, it is that everything is uncertain...
NOTE: On May 3, 1994, the court permitted forfeiture of T-Mart Drug Corp., and all eight lots of real estate.