USA v. Dale D. Mitchell, Jr

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-3081
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United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the Eastern
v. * District of Missouri.
*
Richard Drury, also known as * [UNPUBLISHED]
Dick Drury, *
*
Appellant. *
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Submitted: April 17, 2006
Filed: April 24, 2006
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Before ARNOLD, FAGG, and COLLOTON, Circuit Judges.
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PER CURIAM.
Richard Drury was the Chief Executive Officer for Easy Returns Worldwide,
Inc. (ERW), a company that returns expired or nearly expired drugs to pharmaceutical
companies for credit on behalf of the pharmacists and wholesalers who purchased
them. After learning Drury had directed others to return drugs with undocumented
sources to the manufacturers with the false assertion that they had been purchased by
certain pharmacies, the Government charged Drury with four counts of mail fraud.
At trial, pharmacists testified Drury had approached them to return undocumented
expired drugs under their pharmacy’s name, charging a fee of 33% rather than the
normal 10%. Some of the drugs were returned to the manufacturers in this way

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*The Honorable E. Richard Webber, United States District Judge for the Eastern
District of Missouri.
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through interstate commerce, and the manufacturers credited the pharmacies. Because
Drury worked for a percentage of ERW’s profits, he benefitted financially from the
bogus transactions. After the jury convicted Drury on all counts, the district court *
sentenced him to forty-two months in prison and ordered restitution in the amount of
$726,956.50.
On appeal, Drury challenges the sufficiency of the evidence. Viewing the
evidence in the light most favorable to the Government, we conclude a reasonable jury
could have found Drury guilty beyond a reasonable doubt. United States v. Hively,
437 F.3d 752, 761 (8 th Cir. 2006). To prove Drury committed mail fraud, the
Government had to show, among other things, that Drury intended to defraud the
manufacturers, id. at 760, and that he sent material misrepresentations through the
mail, id. at 764. According to Drury, the evidence failed to establish his intent to
defraud and the materiality of his misrepresentations. We disagree.
The Government proved Drury made material misrepresentations to the
pharmaceutical manufacturers with the intent to defraud them. The evidence showed
Drury knew the manufacturers only accepted expired drugs from pharmacies that had
purchased them directly from the manufacturer or from an authorized wholesaler, and
Drury directed ERW employees to return undocumented expired drugs on behalf of
pharmacies that had not purchased them with the false assertion that the pharmacies
had bought the drugs. The misrepresentation was material because the manufacturers
would not have provided credit for the returns unless they were misled into believing
the drugs had been purchased by the returning pharmacy. The jury could infer Drury
intended to defraud the manufacturers by his intentional acts of concealment. See
United States v. Jorgensen, 144 F.3d 550, 558 (8 th Cir. 1998). The district court thus
properly denied Drury’s motion for judgment of acquittal.

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Drury also asserts the restitution order overstated the amount of loss suffered
by the pharmaceutical firms. The district court did not commit clear error in ordering
Drury to pay $726,956.50 because there was substantial, reliable evidence to support
that amount. See United States v. Fogg, 409 F.3d 1022, 1028 (8 th Cir. 2005) (standard
of review). Independent evidence showed Drury directed the submission of fraudulent
returns to the pharmaceutical manufacturers in the amount of $906,356.68. Because
ERW usually only obtained about 80% of the creditworthy amount, the district court
reduced the fraudulent returns by 20%. Contrary to Drury’s assertions, the amount
of restitution is not limited to the amount of his personal gain, or the victims’ claims
for compensation.
We thus affirm the district court.
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