In U.S. v. Munoz, No. 03-16216 (Nov. 23, 2005), the Court let stand the convictions and sentences of the appellants, Munoz and Llona, who had been tried and convicted for their part of a scheme to illegally sell, through telemarketing and without the requisite prescriptions, two treatments for erectile dysfunction. Briefly, Munoz and Llona concocted a scheme involving a urologist and a pharmacist in which the urologist would write phony prescriptions, in the names of his real patients, for three prescription drugs used to treat erectile dysfunction. The pharmacist would then combine the three drugs into an urethral suppository and ship that back to the urologist. Munoz and Llona would pay for the drugs, including a nice profit for the doctor and pharmacist, and would then sell the suppository without a prescription through telemarketing, mostly over Spanish airwaves, under the name "Power-Gel." An oral form, "Vigor," was later added. The telemarketing touted "Power-Gel" and "Vigor" as all-natural, non-prescription drugs that were safe to use even by those suffering from diabetes, high blood pressure, heart problems, kidney problems, etc. The drugs were also touted as being 100% effective. Following a trial, the appellants were convicted of conspiracy, mail fraud and introducing into interstate commerce a misbranded prescription drug. They were acquitted on charges of money-laundering conspiracy, wire fraud, and misbranding drugs after shipment in interstate commerce. The district court sentenced each of them to a 51-month term of imprisonment.
The Court rejected indictment and sufficiency challenges to the charge that the appellants conspired to sell prescription drugs without a prescription. The challenges rested largely on the fact that the urologist had in fact written prescriptions for the drugs. The Court pointed out that despite the fraudulent prescriptions, Munoz and Llona knowingly sold the drugs to the eventual users without a prescription. Affirming the mail fraud convictions against a sufficiency claim, the Court held that it was "irrelevant whether or not appellants personally knew of, communicated with, or directed activities toward the six named victims."
The Court also rejected a challenge to the district court's loss calculation of $1.5M to $2.5M. The Court noted that a sentencing court may calculate loss from either the perspective of the actual loss to the victims or the actual gain by the defendants. Here, the district court used a hybrid system in which it calculated the gain by the defendants ($2.21M) and reduced it by 30% based in large part from the trial testimony that the placebo effect alone would have helped 30% of users. The Court noted that both figures were within the calculated range. Finally, reviewing for plain error, the Court held that, despite the presence of a Booker error, the appellants failed to demonstrate that the district court would have imposed a lower sentence under an advisory sentencing scheme.
