United States District Court, N.D. Oklahoma
OPINION AND ORDER
E. DOWDELL, CHIEF JUDGE
Court has for its consideration the following motions:
Defendant Gregory Connor's various motions to dismiss the
indictment in whole or in part (Doc. 17; Doc. 19; Doc. 30;
Doc. 34; Doc. 46; Doc. 63; Doc. 71); his various motions to
suppress certain statements and other evidence (Doc. 24 Doc.
43); his motions in limine (Doc. 21; Doc. 62); and the
government's motions in limine (Doc. 40; Doc. 58; Doc.
61). The Court heard evidence and argument related to these
motions during a hearing held on October 30 and 31, 2019.
investigation giving rise to this case began with a shipment
of seven vials carrying botulinum toxin A, a compound better
known under its medicinal brand name, Botox. The package,
shipped via international mail in January 2017, was set to
enter the country via the Customs and Border Protection
facility in New York City when it caught the eye of
inspectors. Suspecting the package contained unauthorized
prescription drugs, the agency detained the shipment and
referred it to the Food and Drug Administration for further
investigation. The box did not identify the sender, but the
shipping label indicated that the parcel was bound for the
neurology clinic of Dr. Gregory Connor in Tulsa, Oklahoma.
subsequent examination of the parcel's contents confirmed
the initial suspicion of customs inspectors, according to the
testimony of the FDA officer who performed the examination.
According to the officer, information on the vials'
packaging indicated that Allergan, the manufacturer, had
boxed and labeled the Botox for distribution outside the
United States. The FDA has approved the sale of Botox in the
domestic market, but the drug is only considered to be
FDA-approved when it is packaged and labeled according to FDA
regulations. Because Allergan packages the drug differently
for different markets, the FDA considers Botox packaged for
sale abroad to be an unapproved drug when imported into the
ensuing investigation into Dr. Connor culminated with the
Second Superseding Indictment (Doc. 53), which accuses Dr.
Connor of engaging in a scheme to defraud Medicare by buying
Botox at a discount on the international market and then
billing Medicare for the full reimbursement rate. According
to the indictment, Dr. Connor was not entitled to seek
reimbursement at all because Medicare only reimburses for
FDA-approved drugs and the Botox he used did not qualify.
connection with this alleged scheme, the indictment charges
Dr. Connor with 36 counts of healthcare fraud under 18 U.S.C.
§ 1347. Each of the healthcare fraud counts, enumerated
in the indictment as Counts 1 and 7-41, relates to a specific
Botox treatment that Connor administered and subsequently
billed to Medicare.
of the indictment charges Dr. Connor with receiving a
misbranded drug with the intent to defraud in violation of 21
U.S.C. §§ 331(c) and 333(a)(2).
3-6 charge Dr. Connor with aggravated identity theft under 18
U.S.C. § 1028A(a)(1). According to the indictment, Dr.
Connor used the names and Medicare numbers of four patients
without lawful authority in connection with the alleged
healthcare fraud scheme. Each count of identity theft relates
to a patient who received one of the Botox treatments forming
the basis for the healthcare fraud counts.
Motions to Suppress Statements and other Evidence
Dr. Connor's pretrial motions seek to suppress evidence
on constitutional grounds. One seeks to exclude evidence,
direct and indirect, obtained as a result of the FDA's
search of the January 2017 Botox shipment. (See Doc.
24). The other seeks to exclude statements and other evidence
that the government obtained under allegedly false pretenses.
(See Doc. 43). “When factual issues are
involved in deciding a motion, the court must state its
essential findings on the record.” Fed. R. Crim. P.
12(d). The discussion below shall serve as the Court's
essential findings on the defendant's motions to
Summary of the Evidence
Consumer Safety Officer Cosmon Barrett testified as to the
origin of the investigation into Dr. Connor. After customs
intercepted the January 2017 shipment bound for Dr.
Connor's office, Barrett conducted a warrantless search
of the shipment's contents and determined that the Botox
was not packaged as required by the FDA for the U.S. market.
He then forwarded his findings to a colleague in the
FDA's Office of Criminal Investigations, which opened a
file on Dr. Connor. Several days later, on January 24th, the
agency sent a letter to Dr. Connor's office saying the
shipment had been detained because its contents “d[id]
not appear to be in compliance” with several listed
code sections, but the letter made no reference to a criminal
investigation. (Plaintiff's Exhibit (PX) 5).
the FDA received no response to the detention notice, the
agency refused to admit the package into the country.
Packages refused entry into the United States are returned to
their country of origin, according to Barrett. The FDA sent
notice of the refusal to Dr. Connor's office on February
15, 2017. (PX 6).
Agent Daniel Allgeyer testified that, after receiving the
criminal-investigation referral, he and another agent went to
Dr. Connor's Tulsa practice on February 1st. After
checking in at the front desk, they remained in the waiting
room until Connor came out. The agents introduced themselves,
and Connor led them back to his office to speak in private.
Once in Connor's office, Allgeyer testified, he informed
Connor that the FDA had reason to believe that someone had
sent him a package containing foreign unapproved medical
products. Connor said he recently received a letter saying
something to that effect.
testified that he then began to ask Connor about the Botox he
used in his practice. According to Allgeyer, Dr. Connor said
he had three to five patients who currently received Botox
treatments, which he sourced from a Canadian company called
Northwest Pharmaceuticals at a price of about $480 per vial.
then asked Dr. Connor if he had any Botox on hand. At this,
Connor went into another room where the Botox was stored in a
refrigerator and returned with a single boxed vial. After
going over the various telltale markings on the vial's
box, Allgeyer told Connor that the Botox appeared to be FDA
approved. Before ending the interview, Allgeyer asked,
“do you mind if I take a look inside your refrigerator
just for -- you know, my boss is going to want to know if I
looked around.” Connor responded, “Sure. Follow
me.” Inside the refrigerator, Allgeyer said, he found
seven vials of what he identified as “foreign
unapproved medical product.”
testified that, at about this time, Dr. Connor's business
manager, Judy Hurst, joined the interview. When Allgeyer told
her what Connor had said about the office's Botox
purchasing, Hurst confirmed that the company was Canadian but
corrected Connor as to the name. The company is called
MedicaDepot, not Northwest Pharmaceuticals, she
said. The company's price was also more like
$380, not $480, and Dr. Connor had eight to ten patients that
received the drug, not three to five. Allgeyer testified
that, when he asked why the office bought some Botox from a
U.S. supplier and some from MedicaDepot, Hurst said some
patients' private insurers required the office to buy
from a particular pharmacy. For those on Medicare, they
bought from MedicaDepot, Hurst said.
asked Hurst if anything about MedicaDepot had raised any
“red flags.” There was something that she did
find “a little bit weird, ” she said. A few days
earlier, someone from MedicaDepot had called to say that
customs had stopped the office's most recent order at the
border. In order to ensure that replacement shipment would
make it through, the person said, MedicaDepot would send it
to her personal address. The replacement shipment had just
arrived, Hurst told Allgeyer. Those were the vials he had
found in the refrigerator.
asked Hurst if the office had any receipts for the orders it
received from MedicaDepot. She said they did not, but she
kept the company's American Express statements, which she
annotated with the word “Botox” next to the
payments made to MedicaDepot. Hurst showed Allgeyer the
statements and also walked him through the office's
Medicare reimbursement paperwork. At Allgeyer's request,
she agreed to make copies of the relevant documents.
he left, Allgeyer asked Dr. Connor to sign two documents. One
form was a waiver stating that Connor “having been
advised of [his] right to refuse” granted consent to
Allgeyer and his partner to search the clinic and seize
“any and all property, materials, documents, or other
items that may be used in connection with their law
enforcement and investigative purposes, including, but not
limited to, any and all misbranded and/or adulterated medical
products.” (PX 1). Allgeyer testified during cross
examination that, even though the form's language implies
that Connor had been previously “advised of [his] right
to refuse, ” Allgeyer never actually told Connor or
Hurst that they could deny the agents' requests to
inspect the clinic's Botox stock or files.
other form, an “Acknowledgment, ” stated that
Allgeyer had “advised the interviewee” about
various federal statutes governing the purchase and
administration of prescription drugs, including the statute
defining the crime of receiving misbranded drugs. (PX 2).
Apart from handing him the form, which was dense with
legalese, Allgeyer did explain to Connor that he could be
criminally prosecuted for his Botox-purchasing practices.
testified that he gave Dr. Connor enough time to read the
statements and that Connor appeared to do so before signing
them and handing them back. Allgeyer did not leave Connor
copies of the forms.
next day, February 2nd, Allgeyer and his partner returned to
Dr. Connor's office briefly to get the copies Hurst
promised to make and to ask some follow up questions. Noting
that MedicaDepot charged only $380 per unit, Allgeyer asked
Connor why his office requested a $600 reimbursement from
Medicare. Dr. Connor's response, according to Allgeyer:
“Allergan vials cost $600, so we just went with the
returned to Dr. Connor's office for a third and final
time on June 1. On that day, Allgeyer told Connor and Hurst
that they could ask him to leave at any time and that they
did not have to answer any questions if they did not want to.
It appears that the primary purpose of the visit was to
obtain a written statement summarizing the information Connor
and Hurst had given during the prior interviews. Although
Connor and Hurst signed the statement, it was written by
Allgeyer. The form stated, in pertinent part, as follows:
This information is given by me to let the facts be known. I
have not been forced into providing this information, nor
have I been promised anything in relation to this
On this date, Special Agent(s) Daniel Allgeyer and Ana
Richardson [and] Randall House [Health and
Human Services Office of the Inspector General] of the
FDA-OCI interviewed me.
This interview concerned my knowledge of:
MedicaDepot.com, Debby [last name unknown] and Dr.
Gregory Connor / Neurological Center of Oklahoma's
purchase of Botox from MedicaDepot from 2012 until February
2017. Dr. Connor administered Botox received from MedicaDepot
via online and over-the-phone orders for patients of
neurological disorders. MedicaDepot charged between $360 -
$385 per vial and all orders were received at 6585 S. Yale,
Tulsa, OK, with exception of one time when an order was
received at Judy Hurst's residence in early Feb. 2017. A
blast-fax was received by MedicaDepot on or about 09/18/12
and ordering began via online account. Within the last year,
MedicaDepot designated us as a “Gold” Customer,
and phone orders only were allowed. When requesting the
reimbursement from Medicare, we requested the allowable
amount. MedicaDepot provided no invoices for orders; we
always verified the purchase via our American Express Credit
Card. It does not appear that MedicaDepot ever overcharged
the price that was discussed.
(emphasis added to indicate the portions of the form filled
in by Allgeyer). Dr. Connor and Ms. Hurst signed their
initials next to each line.
20th, Allgeyer and two other investigators went to Ms.
Hurst's residence to interview her alone. After she
invited them in, they sat down to talk in her kitchen. They
asked many of the same questions they had asked before.
“Most of the answers didn't change, ”
Allgeyer testified. Before the agents left, “We told
Ms. Hurst she was not a target of the investigation at this
time, but we did not want that to become - we didn't want
that to change.”
testified that neither he nor his fellow agents ever
threatened or intentionally misled Dr. Connor or Ms. Hurst,
and that he never made any promises in order to obtain their
cooperation. He denies ever telling Connor or any other
suspect, “Things will go better for you if you
cooperate with us.”
Dr. Connor and Ms. Hurst took the stand, they painted a
decidedly different picture regarding their interactions with
investigators. Although they testified that they cooperated
with the investigators voluntarily, Connor and Hurst said
they had done so under false pretenses. They testified that
Allgeyer initially told them that FDA was investigating
illegal Canadian Pharmacies and wanted their help to run a
“sting” operation on MedicaDepot.
Connor testified that the agents began the interview with an
aggressive posture, saying they “came in and basically
said, ‘We're investigating Canadian companies and
we want to inspect your Botox.'” The way Allgeyer
said it, Connor testified, “implied that he had the
right because he was coming from the FDA.” Instead of
demanding to see the Botox immediately, however, Allgeyer
went with Connor back to his office and spent the next
several minutes talking to him about Canadian pharmacies that
were shipping unapproved prescription drugs into the United
States, going into great detail about their business model,
including how the pharmacies were really fronts for Middle
Eastern money interests.
this process, Connor testified, he had no reason to think
that he was the subject of the investigation. He testified
that he never received the detention notice that the FDA sent
after it intercepted the January 2017 shipment of Botox, and
he denied saying that he had received it when asked by
and Hurst also provided a materially different account of how
Allgeyer came to know of the allegedly unapproved Botox in
the refrigerator. Connor and Hurst testified that, when Hurst
joined the conversation, the only vial of Botox that Allgeyer
had was the one Connor had brought to him. Hurst said that
Allgeyer asked her if there was any other Botox, and she told
him about the shipment MedicaDepot sent to her house. She
then retrieved the Botox from the freezer and gave it to the
agents. Asked whether Dr. Connor knew that this lot of Botox
was in the freezer, Hurst said, “Probably not. I mean,
it was back up in the freezer, so he couldn't see
it.” Hurst testified that Dr. Connor did not
participate in the Botox ordering process or regularly handle
end of the first meeting with investigators, Connor said, he
signed the waiver and acknowledgment forms without reading
them because he had patients waiting. In any case, he said,
he did not think it mattered because the agents already had
the Botox they were looking for and the target of the
investigation was the Canadian pharmacy, not him. Allgeyer
never explained what they meant and did not leave him a copy.
On cross-examination, Connor said he was given an opportunity
to read the forms but had chosen not to.
the February and June meetings with investigators, Hurst and
Connor testified, they were still under the impression that
they were cooperating with an FDA investigation into Canadian
pharmacies. That began to change, they said, when the agents
returned in June and asked them to sign the formal statement
described above. Connor said that he did not pay much
attention to the content of the statement at the time because
he did not know its purpose. He was still operating under the
assumption that he was cooperating with an investigation into
the pharmacy. Nevertheless, he said, after the agents left,
he and Hurst had misgivings, so they decided to include an
addendum to their statement in the package of documents that
the agents had requested. The note, written by Hurst, read as
follows: “Here is all the records you requested. We
were wanting to add to the form we filled out yesterday. That
since MedicaDepot packing was in Allergan box we were not
aware this was not FDA approved.” (DX 6).
Hurst testified that she and Dr. Connor agreed to write the
note together, Allgeyer testified that he specifically asked
Hurst about the note when the agents interviewed her alone at
her house. During that interview, he testified, she said that
she alone decided to write the note and had not conferred
with Dr. Connor about it beforehand.
testified that the agents were generally polite and reported
only one occasion where she felt that they were trying to
coerce her. As the agents were wrapping up the June 20th
interview in her kitchen, she said, they made a veiled
threat. “They told me that I had a beautiful home and I
had a nice car sitting out there, and they would hate to have
- for me to lose what I had. So if I had anything additional
to say about Dr. Connor, this was the time to do it.”
Allgeyer denied making the remark.
Motion to Suppress Evidence from the January 2017 Search
motion seeks to suppress any evidence obtained, directly or
indirectly, from the search of the January 2017 shipment of
Botox. Dr. Connor argues that the evidence should be
suppressed because the FDA searched the package without a
Fourth Amendment protects against unreasonable searches, and
courts determine whether a search was reasonable by weighing
the degree to which the intrusion was necessary to promote
legitimate government interests. United States v.
Pacheco, 884 F.3d 1031, 1041 (10th Cir. 2018).
Warrantless searches are generally unreasonable unless an
exception applies. Id. at 1041-42.
case, the government executed its search as the package
entered the country via international mail. When a search is
conducted at the border rather than the interior, “the
Fourth Amendment's balance of reasonableness is
qualitatively different . . . .” United States v.
Uribe-Galindo, 990 F.2d 522, 525 (10th Cir. 1993)
(quoting United States v. Montoa de Hernandez, 473
U.S. 531, 538 (1985)). In United States v. Ramsey,
the Supreme Court said that border searches are effectively
reasonable per se:
That searches made at the border, pursuant to the
long-standing right of the sovereign to protect itself by
stopping and examining persons and property crossing into
this country, are reasonable simply by virtue of the fact
that they occur at the ...