USA V. GALECKI, No. 20-10288 (9th Cir. 2023)
Annotate this CaseThe United States Court of Appeals for the Ninth Circuit upheld the drug-trafficking and money-laundering convictions of Benjamin Galecki and Charles Burton Ritchie for their distribution of "spice," a synthetic cannabinoid product. The defendants were found guilty of manufacturing and distributing spice through their company, Zencense Incenseworks, LLC. The drug-trafficking charges were based on the premise that the cannabinoid used, XLR-11, was treated as a controlled substance because it was an "analogue" of a listed substance. The court rejected the defendants' arguments that their convictions should be set aside due to Fourth Amendment violations, insufficient evidence, and vagueness of the Controlled Substance Analogue Enforcement Act of 1986. However, the court reversed their mail and wire fraud convictions due to insufficient evidence. The case was remanded for further proceedings.
Court Description: Criminal Law The panel affirmed Benjamin Galecki’s and Charles Burton Ritchie’s drug-trafficking and money-laundering convictions in connection with their distribution of “spice,” a synthetic cannabinoid product; reversed their mail and wire fraud convictions; and remanded for further proceedings.
Defendants manufactured and distributed spice through their company, Zencense Incenseworks, LLC. The drug- trafficking charges were based on the premise that, although the particular cannabinoid that Defendants used, XLR-11, had not yet been specifically listed as a prohibited controlled substance under federal law, that cannabinoid was * The Honorable Roslyn O. Silver, United States District Judge for the District of Arizona, sitting by designation. nonetheless treated as a controlled substance because it was an “analogue” of a listed substance.
Defendants contended that all of their convictions should be set aside on the ground that the district court erred in refusing to suppress evidence seized during or as a result of a raid at Zencense’s Nevada warehouse. The panel held that Defendants failed to establish that they have Fourth Amendment standing to challenge the search and that the district court therefore properly denied their motions to suppress.
Defendants argued that the evidence was insufficient to establish the scienter required in a Controlled Substances Act (CSA) prosecution resting on the Controlled Substance Analogue Enforcement Act of 1986 (the Analogue Act). Applying McFadden v. United States, 576 U.S. 186 (2015), and considering the record as a whole, the panel concluded that a rational jury could find, beyond a reasonable doubt, that both Defendants had the scienter required for an Analogue Act case.
The panel held that the district court did not abuse its discretion in concluding that its “deliberate ignorance” instruction modeled on this court’s decision in United States v. Jewell, 532 F.2d 697 (9th Cir. 1976) (en banc), had a sufficient foundation in the evidence.
The panel rejected Defendants’ as-applied vagueness challenge to the statutory definition of a “controlled substance analogue” in the Analogue Act.
Defendants argued that their due process rights were violated by the district court’s failure to compel the Government to grant use immunity to two potential defenses witnesses who would have testified as to the Defendants’ scienter concerning whether XLR-11 was covered by the Analogue Act. The panel held that Defendants failed to make the requisite showing of a direct contradiction in testimony that resulted in a fundamentally unfair distortion of the fact-finding process.
Rejecting Defendants’ contention that the evidence was insufficient to support their convictions for operating a continuing criminal enterprise in violation of the CSA, the panel held that the evidence was sufficient to permit a rational jury to conclude that Defendants acted “in concert” with five or more persons.
The panel held that the evidence at trial was insufficient to prove the mail-fraud and wire-fraud offenses charged in the indictment, and that Defendants were entitled to judgment of acquittal on these counts, because the Government presented no evidence that the specific alleged misrepresentations were materially false to anyone who bought Zencense’s products.
The panel addressed whether the jury’s general verdict on the money laundering offenses—which did not specify on which predicate offenses it relied—may stand. The panel held that any error under Yates v. United States, 354 U.S.
298 (1957), in allowing the money laundering convictions to be based on the mail and wire fraud conduct, rather than on the CSA offenses, was harmless beyond a reasonable doubt.
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