USA v. Randy Kincaid

Filing

OPINION: the District Court's judgment is AFFIRMED, decision not for publication. Ralph B. Guy , Jr., Circuit Judge; Karen Nelson Moore, Circuit Judge and Raymond M. Kethledge, AUTHORING Circuit Judge. [14-5596, 14-5706, 14-6034, 14-6151]

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0714n.06
Nos. 14-5596, 14-5706, 14-6034, and 14-6151
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellee,
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v.
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RANDY KINCAID; DUSTIN MORGAN; SANDRA )
KINCAID; WENDI HENRY,
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Defendants-Appellants.
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FILED
Oct 26, 2015
DEBORAH S. HUNT, Clerk

UNITED STATES OF AMERICA,

ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF TENNESSEE

Before: GUY, MOORE, and KETHLEDGE, Circuit Judges.
KETHLEDGE, Circuit Judge. A jury convicted Sandra Kincaid, Randy Kincaid, Dustin
Morgan, and Wendi Henry of conspiring to distribute controlled substances in violation of
21 U.S.C. §§ 846 and 841(a)(1), and several related charges. The four defendants, in various
combinations, challenge on appeal nearly every stage of this criminal proceeding, including
allegations in the indictment, rulings on pre-trial motions, sufficiency of the trial evidence, and
reasonableness of the sentences. We affirm.
I.
In July 2009, Sandra Kincaid and her husband Randy opened the Breakthrough Pain
Therapy Center in Maryville, Tennessee. Sandra managed the daily operations while Randy
handled the financial side of the business. Sandra’s two children, Dustin Morgan and Wendi
Henry, worked at the clinic as well. Dustin started as a security guard but eventually collected
payments and tracked accounts receivable. Wendi worked in the back office, maintaining patient

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records and occasionally helping customers. Dustin’s wife, Heather, worked at the reception
desk. Wendi’s two daughters worked for the Center as well.
For a time the business was wildly successful. Just 17 months after it opened, however,
federal agents raided the Center. Sandra, Randy, Dustin, and Wendi were arrested and charged
with conspiring to distribute drugs.

Randy and Sandra were charged with laundering the

Center’s revenue, and Randy and Dustin were charged with possessing a firearm in furtherance
of a drug conspiracy. Before trial, Sandra, Dustin, and Wendi challenged their indictments, and
Dustin moved to exclude evidence that was seized from his house and safe-deposit box. The
district court denied their motions.
At trial, the government presented evidence that the Center was actually a pill mill—a
pain clinic known for freely distributing controlled substances. Witness after witness described
each defendant’s contribution to the conspiracy: Sandra signed and handed out prescriptions
before patients saw a doctor; Randy ensured that the Center’s banking practices avoided red
flags; Dustin collected cash-only payments; and Wendi made sure that drug-seekers with forged
MRIs still got their prescriptions.

The jury convicted the defendants on all counts.

The

defendants then filed motions for acquittal or for a new trial. The district court denied the
motions.
At sentencing, Sandra, Dustin, and Wendi challenged the methodology that federal agents
used to calculate the quantity of drugs distributed by the Center. The district court denied the
motions and sentenced Sandra to 470 months imprisonment, Dustin to 204 months, Wendi to 216
months, and Randy to 830 months. This appeal followed.

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II.
A.
1.
Wendi and Sandra argue that the district court should have dismissed the indictment
because it failed to charge an essential element of the crime. Specifically, they point out that
“dispense” refers to when a medical practitioner, or someone acting under a practitioner’s
authority, delivers controlled substances to a user. See 21 U.S.C. § 802(10), (11). Wendi and
Sandra thus assert that an indictment may charge laypeople with conspiracy to dispense narcotics
only if the indictment also charges a medical practitioner in the conspiracy. The indictment here
did not charge a medical practitioner.
As an initial matter, our circuit has not adopted such a rule. See United States v. Johnson,
831 F.2d 124, 128 n.8 (6th Cir. 1987). Moreover, Wendi and Sandra’s argument fails because
the indictment charged them with conspiring to distribute a controlled substance—not dispense.
21 U.S.C. § 841(a)(1). Conspiring to distribute a controlled substance does not require a medical
practitioner. See Johnson, 831 F.2d at 127-28.
2.
Dustin and Sandra argue that the indictment lacks sufficient factual allegations for the
conspiracy charge. An indictment must include “facts and circumstances” sufficient to “inform
the accused of the specific offense” so the accused can prepare a defense and avoid double
jeopardy. See United States v. Landham, 251 F.3d 1072, 1079 (6th Cir. 2001) (internal quotation
marks and emphasis omitted). An indictment sufficiently alleges the duration of a conspiracy by
“fix[ing] the end of the conspiracy and provid[ing] an approximate start date[.]” See United
States v. Vassar, 346 F. App’x 17, 19-20 (6th Cir. 2009).

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Here, Sandra contends that the indictment failed both to make specific “allegations of
time and place” and to describe how Sandra knew “that prescriptions were being issued outside
the usual course of medical practice[.]” But the indictment alleged that the conspiracy was
located primarily at the Center, started “in or about May 2009, and continu[ed] through on or
about December 14, 2010[.]” And the indictment alleged that Sandra—who “is not a [medical]
practitioner”—“personally examine[d] patients” at the Center and “fill[ed] out” and “sign[ed]”
their “prescriptions for controlled substances.” The indictment did not need to specify that
Sandra’s knowledge of the improper prescriptions came from observing her own actions. The
indictment thus contained factual allegations sufficient to give Sandra notice of the charges.
Dustin contends that the indictment alleged “no facts” related to his role in the conspiracy
except that he “armed himself with a weapon.”

But the indictment alleged that Dustin

“conspire[d]” with the other defendants “to distribute, and to possess with intent to distribute”
various controlled substances; that he and the other defendants “knowingly open[ed]” and
“operate[d]” the Center “for the purpose of unlawfully distributing” controlled substances; and
that Dustin “armed” himself with a “firearm” to protect the “large amounts of cash revenue”
generated by the “cash-only” Center. These allegations provided Dustin with sufficient notice of
the charges against him.
3.
Dustin also contends that the government presented facts at trial that varied from those
alleged in the indictment. “A variance to the indictment occurs when the charging terms of the
indictment are unchanged, but the evidence at trial proves facts materially different from those
alleged in the indictment.” United States v. Caver, 470 F.3d 220, 235 (6th Cir. 2006).

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Here, the indictment alleged that Dustin possessed a firearm to further the conspiracy to
distribute drugs at the Center. At trial, the government presented evidence seized from Dustin’s
home, including pill bottles that belonged to his wife and firearms legally possessed by Dustin.
According to Dustin, this evidence “had nothing to do with the charged offenses.” But Heather
got the prescription for these pills during the time that she and Dustin were both employed by the
Center. And near the bottles investigators found the pharmacy contract—promising not to fill
the prescription at multiple pharmacies. The contract bore his wife’s signature as the customer
and Dustin’s signature as the Center representative. This evidence is relevant to Dustin’s
knowledge of the conspiracy as charged in the indictment.
As for the firearms, the indictment alleged that Dustin possessed firearms in furtherance
of the drug conspiracy—not that he possessed them illegally. Evidence that a firearm was found
in Dustin’s home was not materially different from the evidence alleged in the indictment. Thus,
this evidence did not vary impermissibly from the indictment’s allegations.
B.
Dustin also challenges the district court’s denial of his evidentiary motions in limine. We
review for an abuse of discretion the district court’s evidentiary rulings. See United States v.
Davis, 577 F.3d 660, 666 (6th Cir. 2009). Prior to Dustin’s trial, he moved to exclude, on
relevance and prejudice grounds, the gun and pill bottles seized from his home and the cash
seized from his safe-deposit box. The district court denied both motions and later admitted the
evidence during trial. Evidence is relevant if “it has any tendency to make a fact more or less
probable than it would be without the evidence” and “the fact is of consequence in determining
the action.” Fed. R. Evid. 401. A district court “may exclude relevant evidence if the probative
value is substantially outweighed by a danger” of “unfair prejudice.” Fed. R. Evid. 403.

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Here, Dustin contends that the gun seized in his home “did not make any fact of
consequence more probable” because the gun was not the one “used to support the
[i]ndictment[.]” Dustin might well be right about that. But we do not see how this evidence
caused much prejudice either and given the other evidence of Dustin’s guilt we think the
evidence was harmless.
Dustin next argues that, because the pill bottles “belonged to his wife” and “were
properly prescribed by a medical provider at” the Center, the bottles were irrelevant. But the rest
of the record suggests otherwise. That Dustin signed the contract for his wife’s prescription—
while she was also an employee of the Center—makes Dustin’s knowledge of the distribution
conspiracy more likely.
Dustin also argues that the cash in his safe-deposit box was irrelevant because he shared
the box with his wife. Whether the cash was the result of Dustin’s or his wife’s work for the
Center does not determine its relevance. In either case, the presence of $23,000 in Dustin’s safedeposit box makes more likely that Dustin knew about and agreed to join a conspiracy to
distribute drugs for the purpose of making money.
Dustin further argues that, even if relevant, evidence of the cash was unfairly prejudicial
because the jury could infer that the cash “was proceeds from illegal activity” at the Center. But
Dustin never explained how the inference was unfair and we see no reason why it was. See In re
Air Crash Disaster, 86 F.3d 498, 538 (6th Cir. 1996). Thus, the district court did not abuse its
discretion by admitting evidence of the firearm and pill bottles found in Dustin’s home or the
cash found in his safe-deposit box.

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C.
Next, all four defendants contend that the evidence at trial was insufficient to sustain their
convictions for conspiring to possess controlled substances with the intent to distribute. For all
of these convictions, we ask merely if, “after viewing the evidence in the light most favorable to
the prosecution, any rational trier of fact could have found the essential elements of the crime
beyond a reasonable doubt.” United States v. Wright, 774 F.3d 1085, 1088 (6th Cir. 2014).
A drug conspiracy has three essential elements:

“(1) an agreement to violate drug laws,

(2) knowledge and intent to join the conspiracy, and (3) participation in the conspiracy.” United
States v. Welch, 97 F.3d 142, 148 (6th Cir. 1996).
1.
Sandra contends that the government “failed to prove the existence of an agreement to
violate federal drug laws.” But the government need not prove a formal agreement between the
members of a conspiracy; a tacit understanding will suffice. United States v. Deitz, 577 F.3d
672, 677 (6th Cir. 2009). This understanding “may be inferred from circumstantial evidence
[that] may reasonably be interpreted as participation in a common plan.” United States v.
Hughes, 505 F.3d 578, 593 (6th Cir. 2007).
Sandra argues that her actions were consistent with lawful employment at the center and
thus fail to suggest participation in a common plan to distribute drugs. Specifically, she contends
that the government lacked sufficient evidence that she signed prescriptions, examined patients,
or exchanged medication without a valid prescription. But the testimony of numerous patients
shows otherwise. Tonya Overholt, for example, testified that on one visit she paid the cash fee to
Dustin and filled out paperwork describing her pain symptoms. Sandra then sat down with
Overholt, reviewed the paperwork, “went over all the pain problems” that Overholt had listed,

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and suggested a medication.

Sandra then filled out and signed multiple prescriptions for

Overholt. At no point during this visit did either Overholt or Sandra consult with a medical
professional.
Similarly, Shawn Crawford testified that Sandra would come into the waiting room and
ask if he “was okay with [his] script.” When Crawford answered “yes,” Sandra “would sign my
script and I would be gone.” Another patient, Robin O’Gorman, said that Sandra would come
into the waiting room and ask the patients to raise their hand if they wanted to see a doctor.
Sandra would then go back to her office—not to see a doctor—and return with prescriptions for
all the patients who did not raise their hand. On one occasion, when O’Gorman ran out of pills
early due to her increasing tolerance, she came into the Center for a new prescription. Sandra
put two pills directly in O’Gorman’s mouth when she saw that O’Gorman was suffering from
withdrawal. Douglas Thacker testified that Sandra gave him a new prescription when he claimed
one had been stolen. And Keith Atkins testified that he failed every drug test at the Center
because he had cocaine in his system—but Sandra told him “that was not a problem.”
Nor did Sandra act in isolation, without a “tacit understanding” of a common plan. She
and Randy shared an office at the Center. While Sandra handled the daily medical operations,
Randy handled most of the finances—but not all. Sandra set up two different safe-deposit boxes
at the Center’s bank. Together, Sandra and Randy regularly visited the bank to make deposits.
As a result of their combined efforts, they made over $2 million. A rational trier of fact could
have thus found beyond a reasonable doubt that Sandra formed at least a tacit understanding to
participate in a common plan to violate drug laws.
Sandra also contends that the money-laundering charge fails because insufficient
evidence supported the underlying conspiracy charge and because investigators raided the Center

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before its 2010 tax returns were due. But a money-laundering conspiracy requires only that a
defendant knowingly and voluntarily joins at least one other person in a conspiracy to launder
money. United States v. Prince, 618 F.3d 551, 553-54 (6th Cir. 2010). The Center’s 2010 tax
returns were not necessary to the government’s case.

And as discussed above, sufficient

evidence supported Sandra’s conviction of a conspiracy to distribute drugs.
2.
Randy contends that no evidence at trial proved that he knew the essential object of the
conspiracy or that he agreed with anyone to distribute drugs. A defendant’s “knowledge of and
participation in a conspiracy may be inferred from his conduct and established by circumstantial
evidence.” United States v. Conatser, 514 F.3d 508, 518 (6th Cir. 2008).
Here, Randy asserts that he founded a legitimate business and that the government failed
to show that he knew anything about the Center’s prescription practices. But Randy shared an
office with Sandra—the same office where Sandra filled out prescriptions for patients who had
not seen a doctor. O’Gorman testified that Randy was present in that office when Sandra put two
pills directly in O’Gorman’s mouth. Randy himself exchanged pills for sexual favors in that
office with two of the Center’s patients. And according to a bank employee, Randy retrieved
prescription pads from a safe-deposit box almost every day. When federal agents raided the
Center, they found an assortment of controlled substances in Randy’s desk. In the filing cabinet
behind his desk, the agents found pill bottles that contained oxycodone and morphine and were
labeled with other people’s names.

Nevertheless, Randy accompanied Sandra to a local

pharmacy to assure the pharmacist that the Center used all the proper safeguards before
prescribing controlled substances.

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The evidence also showed that Randy designed his financial practices to conceal the
conspiracy. The Center accepted only cash from its customers. A bank employee testified that
Randy asked how much cash he could deposit at a time without triggering the scrutiny of law
enforcement. Randy’s cash deposits were almost always below the $10,000 threshold for that
scrutiny. The record as a whole thus allowed the jury to convict Randy of conspiracy.
3.
Dustin contends that the evidence at trial was insufficient to establish that he had the
knowledge and intent to join or participate in the conspiracy. “Once a conspiracy is shown
beyond a reasonable doubt[,] however, a defendant’s connection to the conspiracy need only be
slight.” United States v. Martinez, 430 F.3d 317, 330 (6th Cir. 2005) (internal quotation marks
omitted).
Dustin argues that he worked at the Center as only a security guard. But numerous
witnesses testified that Dustin collected cash payments before the patients received a prescription
or any actual medical care.

O’Gorman testified that Dustin issued receipts for the cash

payments. Another witness testified that he saw Sandra give a green pill to Dustin; the witness
thought the pill was Oxycontin but could not be sure. IRS Special Agent Meredith Louden
testified that Dustin maintained a book of accounts receivable to track who owed money to the
Center. And a bank employee testified that Dustin suggested that Sandra open a safe-deposit box
there because the bank provided private closets where depositors could move items in and out of
the boxes without anyone seeing.
When investigators searched Dustin’s house, they found three pharmacy contracts and
multiple pill bottles containing narcotics.

Two of the pharmacy contracts were blank, but

Dustin’s wife had signed the third contract as a customer of the Center and Dustin had signed it

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as the Center’s representative. Investigators also seized $23,000 in cash from a safe-deposit box
that Dustin and his wife both accessed regularly. This record allowed the jury to find beyond a
reasonable doubt that Dustin knew of and participated in the conspiracy to distribute drugs.
4.
Wendi contends that the evidence failed to demonstrate that she agreed to conspire or
participated in a conspiracy to distribute drugs.

But Douglas Thacker testified that he

“sponsored” between 15 and 20 of the Center’s patients, meaning that he paid for their
appointments and prescriptions in exchange for half their pills. Then he would sell his half on
the street. When Thacker asked Wendi whether the people he sponsored could just bring in
forged MRIs, Wendi responded, “Yes, [the forged MRIs] will go through. I’ll be the one looking
over [them]. You don’t have to worry about it. I’ll take care of it.” And she did. For each
person that Wendi shepherded through the Center, Thacker would give her between 10 and 20
pills from his half of the resulting prescription. According to Tonya Overholt, Wendi later “had
the MRIs destroyed or shredded” so that the DEA or other investigators would not find forged
MRIs in the patient files. Thus, a rational trier of fact could find that Wendi knew about the
conspiracy, intended to join it, and actually participated in it.
D.
Next, Randy and Dustin both contend that they armed themselves to provide security for
the Center’s employees, rather than “in furtherance of” a conspiracy to distribute drugs.
Possession of a firearm is “in furtherance of” a crime when there is “a specific nexus between the
gun and the crime charged.” United States v. Mackey, 265 F.3d 457, 462 (6th Cir. 2001).
Possessing a firearm “on the same premises as a drug transaction”—without some connection
between the two—is insufficient to sustain a conviction. Id. If the firearm is “strategically

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located so that it is quickly and easily available for use[,]” however, the nexus between the
firearm and the crime is satisfied. Id.
Here, numerous witnesses testified that, during the Center’s operating hours, both Randy
and Dustin regularly and openly carried loaded handguns. A rational trier of fact could find that
Randy and Dustin carried firearms that were “quickly and easily available for use” to protect the
large amount of cash generated by a cash-only drug conspiracy. Even accepting Randy and
Dustin’s explanation—that they carried firearms to protect the Center’s employees—a trier of
fact could rationally find that, by protecting other members of the conspiracy, Randy and Dustin
furthered the conspiracy itself.
E.
Next, Dustin, Wendi, and Sandra each challenge their sentences, arguing that the
government unreasonably calculated the quantity of drugs that they distributed. “A drug quantity
need only be established by a preponderance of the evidence, and an estimate will suffice so long
as it errs on the side of caution and likely underestimates the quantity of drugs actually
attributable to the defendant.” United States v. Anderson, 526 F.3d 319, 326 (6th Cir. 2008).
Here, the estimated quantity of drugs resulted in a base offense level of 38—the highest
offense level in the U.S. Sentencing Guidelines. The district court accepted the government’s
calculations based on trial testimony (and corroborating receipts) showing that customers visited
the Center 14,131 times during the conspiracy. To determine how many pills were prescribed
during each visit, Agent Louden examined a sample of patient files. Initially, only 52 patient
files were available. After the trial, however, investigators found another 54 boxes of patient
files in the house of Sandra’s brother. Agent Louden selected 54 files—one at random from each
of the 54 boxes—to supplement the 52 files from the trial. Every one of the 106 files showed

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that, on each visit to the Center, the customer received a monthly prescription for 30-milligram
tablets of either oxycodone or hydrocodone. Although some prescriptions were for four tablets
per day (120 per month), “many” or “most” were for six tablets per day (180 per month). Agent
Louden took the smaller amount (120 pills per month) and multiplied it by the number of
customer visits to reach a total of 1,695,720 tablets. This total carried a marijuana equivalence
of 340,839 kilograms—more than 11 times the marijuana equivalence necessary to apply a base
offense level of 38. If the actual average prescription was only 12 pills—instead of 120 or 180—
the defendants would still qualify for a base offense level of 38. This calculation “err[ed] on the
side of caution and likely underestimate[d] the quantity of drugs actually attributable to the
defendant.” Anderson, 526 F.3d at 326. The district court therefore did not err in sentencing the
defendants within the guidelines resulting from that quantity.
F.
Sandra also challenges her sentence as unreasonable because it created “unwarranted
sentence disparities among defendants with similar records who have been found guilty of
similar conduct.” 18 U.S.C. § 3553(a)(6). In particular, Sandra points to United States v.
Guzman, 571 F. App’x 356 (6th Cir. 2014). There, Guzman operated a pain clinic for the
purpose of distributing controlled substances much like the Center here. And like Sandra,
Guzman started with a base offense level of 38 and ended with a total offense level that
suggested life in prison—a sentence that the Guidelines caps at 470 months. See United States
Sentencing Commission, 2014 Sourcebook of Federal Sentencing Statistics, Appendix A:
Description of Datafiles, Variables, and Endnotes at 7. The same district judge sentenced
Guzman to 240 months on the primary offenses. Sandra argues that because the cases are
similar—involving “similar offense conduct and a similar drug quantity”—she “should not be

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required to endure a far more significant sentence” than Guzman endured. That argument
misconstrues the meaning of “unwarranted sentence disparities” under § 3553(a)(6). “[T]his
factor concerns national disparities between defendants with similar criminal histories convicted
of similar criminal conduct.” United States v. Conatser, 514 F.3d 508, 521 (6th Cir. 2008).
Although Sandra does cite several cases from other jurisdictions in support of her disparity
argument, only one appears to have involved a drug quantity substantial enough to merit a
comparable Guidelines sentence.

Thus, Sandra has failed to demonstrate that her within-

Guidelines sentence creates an unwarranted sentence disparity on a national scale. Under these
circumstances, we cannot say that Sandra’s sentence is unreasonable.
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*

The district court’s judgment is affirmed.

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