Opinion
No. 01 Cr. 410 (RWS).
April 14, 2005
SENTENCING OPINION
On November 30, 2004, defendant Michael Toback ("Toback") appeared before this Court and allocuted to one count of distribution and possession with intent to distribute 1,4-butanediol in violation of 21 U.S.C. §§ 812, 841(a)(1), 841(b)(1)(C), and 802(32)(A), a Class C Felony. Toback's plea was accepted on that date, and he will be sentenced to time served (one day) and three years of supervised release, subject to the further conditions set forth herein, including but not limited to ten months of home confinement.
Prior Proceedings
The factual and procedural histories of this case are detailed in a prior opinion. United States v. Roberts, No. 01 Cr. 410 (RWS), 2002 WL 31014884 (S.D.N.Y. Sept. 9, 2002), familiarity with which is assumed, and will only partly be repeated here.
On April 26, 2001, Roberts and Toback were indicted for conspiracy to distribute and to possess with the intent to distribute 1,4-butanediol, and for distributing and possessing with the intent to distribute 1,4-butanediol, which the government alleges is, under 21 U.S.C. § 802(32)(A), (the "Analogue Statute"), an analogue of the Schedule I controlled substance gamma hydroxybutyric acid ("GHB"). Subsequently, both defendants filed various pretrial motions, including a motion to dismiss the indictment on grounds that the Analogue Statute is unconstitutionally vague and the indictment is based on procedures which violate the Administrative Procedures Act ("APA").
On December 14, 2001, this Court issued an opinion denying each of the pretrial motions except the motion to dismiss on grounds of vagueness. As to that issue, this Court held a hearing on June 17, 2002, to determine whether the statutory definition of the term "controlled substance analogue" as applied to 1, 4-butanediol was unconstitutionally vague. On September 9, 2002, this Court granted Toback's motion to dismiss on vagueness; however, subsequently, on April 1, 2004, the Second Circuit vacated and remanded for further proceedings, finding the statute constitutional and not unlawfully vague. See United States v. Roberts, 363 F.3d 118 (2d Cir. 2004). Toback pled guilty in this Court on November 30, 2004, and he is scheduled to be sentenced on April 19, 2003. The Sentencing Framework
In accordance with the Supreme Court's decision in United States v. Booker, 125 S. Ct. 738 (2005), and the Second Circuit's decision in United States v. Crosby, 397 F.3d 103 (2d Cir. 2005), the sentence to be imposed was reached through consideration of all of the factors identified in is U.S.C. § 3553(a), including the advisory Sentencing Guidelines (the "Guidelines") established by the United States Sentencing Commission. Thus, the sentence to be imposed here is the result of a consideration of:
(1) the nature and circumstances of the offense and the history and characteristics of the defendant;
(2) the need for the sentence imposed —
(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;
(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range established for —
(A) the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines . . .;
(5) any pertinent policy statement . . . [issued by the Sentencing Commission];
(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense.18 U.S.C. § 3553(a). A sentencing judge is permitted to find all the facts appropriate for determining a sentence, whether that sentence is a so-called Guidelines sentence or not. See Crosby, 397 F.3d at 114-15.
The Defendant
Toback was born on January 18, 1966, the second of three children, and grew up in a tight-knit family, living at home until the age of twenty-five. He married in December 1991 but separated in February 2004, and currently maintains a close relationship with his nine-year old daughter, whom he sees every day. Following his separation, Toback returned to his parents' home, where he presently resides.
Toback graduated from South High School in Great Neck, New York in 1984, and afterwards spent varying amounts of time studying at different local colleges and universities in the pursuit of a pharmaceutical degree. Although he attempted to complete his degree for approximately seven years, Toback never attained it and eventually began working full-time at his father's pharmacy and surgical supply store.
In 1998, Toback's father sold the pharmacy portion of the store, and Toback became the sole proprietor of the remainder of the store, which he transformed into a health food store named Westerly Natural Market ("Westerly Market"). Since Toback took ownership of Westerly Market, he has developed the business into a thriving company with significant sales, a substantial workforce of 80-90 employees, and a strong positive reputation within the community and among its customers. Since his arrest, Toback has continued to work at Westerly Market, and the store has continued to succeed under his single-handed leadership.
The Offense Conduct
On March 13, 2000, GHB was added as a Schedule I controlled substance to the Controlled Substances Act. The substance 1, 4-butanediol is a controlled substance analogue of GHB pursuant to 21 U.S.C. § 802(32)(A) because it has a chemical structure which is substantially similar to the chemical structure of GHB, and it has a stimulant, depressant or hallucinogenic effect on the central nervous system that is substantially similar to or greater than the stimulant, depressant or hallucinogenic effect on the central nervous system of GHB. Thus, as a controlled substance analogue of a Schedule of controlled substance, pursuant to 21 U.S.C. § 813, to the extent it is intended for human consumption, 1,4-butanediol is treated, for the purposes of any federal narcotics laws, as a controlled substance in schedule I.
In November 2000, agents from the Drug Enforcement Administration ("DEA") learned from a confidential source that "Rejoov," a product containing 1,4-butanediol, was being sold at Westerly Market. DEA agents arranged several purchases of "Rejoov" from Westerly Market in January, February and March 2001, occasionally making purchases from employees of Westerly Market and other times buying directly from Toback.
All of the bottles of "Rejoov" purchased from Westerly Market bore labels identifying the manufacturer as Barin Corporation ("Barin") and some of those labels identified Barin's Internet address, "www.barincorp.com." The investigation revealed that the Chief Executive Officer of Barin and the administrative, technical and billing contact for the Barin Website was Todd Kelly Roberts, Toback's co-defendant in this case.
A review of shipping records of the United Parcel Service ("UPS") revealed that Barin shipped approximately seventy boxes to Westerly Market from December 2000 through March 2001. Those shipments were addressed to a "Michael" at Westerly Market and a number of them were signed for by a "Mike" at Westerly Market. Michael Toback was arrested on April 11, 2001.
At his allocution, Toback acknowledged that he was selling a product that was illegal at the time of sale, although Toback maintained that he had no actual knowledge of the product's illegality. In entering his guilty plea, Toback assumed responsibility for the sale of the 1,4-butanediol, asserting conscious avoidance of determining whether the product was in fact legal, which, under the Second Circuit's decision in United States v. Roberts, 363 F.3d 118 (2d Cir. 2004), is sufficient to violate the statute at issue.
The Relevant Statutory Provisions
The statutory maximum term of imprisonment is twenty years, pursuant to 21 U.S.C. § 841(b)(1)(C). If a term of imprisonment is imposed, the Court subsequently shall impose a term of supervised release of at least three years. Id. Toback is not eligible for probation. The maximum fine authorized by statute is $1,000,000. Id. A special assessment of $100 is required. See 18 U.S.C. § 3013. Since this is Toback's first conviction for distribution of a controlled substance, he may be declared ineligible for any or all federal benefits for up to a period of five years. See 21 U.S.C. § 862(a)(1)(A).
Pursuant to the Violent Crime Control and Law Enforcement Act of 1994, all offenders on probation, parole or supervised release for offenses committed after September 13, 1994, are required to submit to one drug test within fifteen days of commencement of probation, parole or supervised release and at least two drug tests thereafter for use of a controlled substance, unless ameliorated or suspended by the court due to its determination that the defendant poses a low risk of future substance abuse as provided in 18 U.S.C. §§ 3563(a)(5) and 3583(d).
The Guidelines
The November 1, 2000 edition of the United States Sentencing Commission Guidelines Manual ("the Guidelines") has been used in this case for calculation purposes. See § 1B1.11.
The guideline for violation of 21 U.S.C. § 841(a)(1) is found in § 2D1.1(c)(13), which provides for an offense level of 14 for a defendant found culpable of distributing at least 5,000 but less than 10,000 units of a controlled substance.
Based on his plea allocution, Toback has shown recognition of responsibility for his offense. Thus, the offense is reduced 2 levels. See § 3E1.1(a).
The resulting adjusted offense level is 12.
The defendant has one prior arrest in October 1998 that resulted in a commotion for disorderly conduct, which under New York State Penal Law is a violation and not a crime and does not result in a criminal conviction or a criminal record. Under the Guidelines, Toback gathers no criminal history points for this conviction. See § 4A1.2(c)(1). Therefore, Toback has zero criminal history points and a Criminal History Category of I.
Based on a total offense level of 12 and a Criminal History Category of I, the Guidelines' range for imprisonment is 10 to 16 months.
The Guidelines' range for a term of supervised release is 2 to 3 years. See § 5D1.2(a) (2).
Because Toback's adjusted offense level and criminal history category place him in Zone C of the Guidelines sentencing table, he is not recommended for probation under the Guidelines. See § 5B1.1, application note 2.
The Guidelines recommend a fine range of $3,000 to $1,000,000 for the instant offense. See §§ 5E1.2(c)(3), (c)(4).
The Guidelines suggest that subject to the defendant's ability to pay, in imposing a fine, the court should consider the expected costs to the government of any imprisonment, probation, or supervised release. See § 5E1.2(d)(7). The most recent advisory from the Administrative Office of the United States Courts suggests a monthly cost of $1,931.97 to be used for imprisonment, a monthly cost of $292.21 for supervision, and a monthly cost of $1,590.66 for community confinement.
The Guidelines state that a court may deny eligibility for certain federal benefits of any individual convicted of distribution or possession of a controlled substance. See § 5F1.6.
The Remaining Factors of 18 U.S.C. § 3553(a)
Having engaged in the Guideline analysis, this Court also gives due consideration to the remaining factors identified in 18 U.S.C. § 3553(a) in order to impose a sentence "sufficient, but not greater than necessary" as is required in accordance with the Supreme Court's decision in United States v. Booker, 125 S.Ct. 738 (2005), and the Second Circuit's decision in United States v. Crosby, 397 F.3d 103 (2d Cir. 2005). In particular, section 3553(a)(2)(A) asks that the sentence imposed provide "just punishment for the offense," while section 3553(a) (2) (C) demands that the ultimate punishment "protect the public from further crimes of the defendant."
The instant offense is Toback's first criminal conviction. He entered a guilty plea in a timely manner without the benefit of a plea agreement and has accepted responsibility for his conduct. A violation of the law has occurred, irrespective of Toback's actual intent to distribute unlawfully a controlled substance under the Analogue Statute. Therefore, to further the purposes of general deterrence, an appropriate punishment must be meted out.
At age 39, with a family to support and a business to maintain, Toback presents low risk for future criminal conduct, as the current situation seems to be an aberration in his normally law-abiding life. An abundance of letters from Toback's family, colleagues and friends speak to his outstanding and reliable character, his devotion to his family and his dedication to his business. In addition, the criminal conduct at hand spanned a short period of time, involved minimal planning, and defendant has invested significant effort to ameliorate the effects of the offense by further building Westerly Market's success since his arrest. See United States v. Myers, 353 F. Supp. 2d 1026 (S.D. Iowa Jan. 26, 2005) (citing the applicability of the aberrant behavior rationale post-Booker in sentencing an individual with no prior criminal history, a stellar reputation in the community as a reliable family man, the financial dependence of defendant's family on defendant's continued employment, and defendant's "almost innocent" circumstances surrounding the offense conduct). See also United States v. Castellanos, 163 F.3d 731, 734-35 (2d Cir. 1998) (noting the standard for aberrant behavior downward departure under § 5K2.20 of the Guidelines lists several benchmarks with which to assess the likelihood of future criminal conduct, including, among other factors, existence of significant planning, duration of conduct, defendant's employment record, defendant's prior good works, and defendant's effort to mitigate the effects of the offense.
The Court is not departing downward under the aberrant behavior rationale. Instead, the Court is imposing a non-Guideline sentence, relying, in part, on the aberration of the instant offense in defendant's typically law-abiding life.
Furthermore, Toback's position as sole owner and operator of Westerly Market, a business that employs upwards of 80 people, demands his daily personal involvement to secure the continued success of the business and the continued job security currently provided its many employees. In United States v. Milikowsky, 65 F.3d 4 (2d Cir. 1995), the Second Circuit held "[downward] departure may be warranted where, as here, imprisonment would impose extraordinary hardship on employees." Id. at 9. The Second Circuit relied on the unrebutted letters and testimony from family members, employees, and colleagues in the district court's record to reason "[the defendant] is the only individual with the knowledge, skill, experience and relationship to run [the business]" and ultimately to conclude "the companies' continuing livelihood depends entirely on [defendant's] personal involvement, and that, [his absence may lead] to both companies' immediate bankruptcy and the loss of employment for [the companies' respective] employees." Id. at 8-9.
As in Milikowsky, Toback is essential to the successful operations of Westerly Market. His daily guidance and input keep the business thriving; conversely, his removal would cause extraordinary hardship on those who are employed by him. As Westerly Market's longtime accountant, Daniel Boyarksky, CPA, writes to the Court:
The initiative for all [business development] was solely by Michael Toback . . . The store is open almost 18 hours a day, seven days a week. Westerly being a small closely held business has several inherent problems. There must always be a watchful eye in a business which deals in a product that is readily marketable and in which a large percentage of sales is done in cash. Also, a small operation does not have the internal controls that a large business does . . . In my opinion because of all the above I believe that any absence of Michael Toback from the operations of Westerly Health Food would be extremely detrimental to its ability to prosper and even survive.See Defendant's Sentencing Memorandum, April 8, 2005, Boyarksy Ltr., Appendix A.
Toback's devotion to Westerly Market is the source of the business's growth and development. In 2004, Westerly Market had an annual payroll of $1.9 million, and it offered its employees health insurance, worker's compensation, disability and unemployment insurance. Id. Should Toback be imprisoned, A vacuum in leadership would result, significantly threatening the business's continued prosperity and endangering the future employment of its 80 plus employees. The Sentence
In order to avert this undue hardship on innocent third parties, namely Westerly Market's employees, and in light of Toback's aberrant behavior in this instance, it is determined that a non-Guideline sentence is warranted. Therefore, a sentence of time served is imposed, followed by a three-year term of supervised release, ten months of which are to be served through home confinement. The terms of home confinement will be established to allow for the necessary monitoring at home and at work, thereby permitting Toback to continue providing for the long-term success of Westerly Market and its employees.
As Toback has kept all court appearances, has been in compliance with all terms and conditions of his pretrial release, and is not viewed as a flight risk or a danger to the community, he is deemed a good candidate for voluntary surrender. Toback is therefore directed to report to the nearest United States Probation Office within 72 hours of imposition of sentence to commence a three year term of supervised release. It is recommended that Toback be supervised by the district of his residence.
As mandatory conditions of this supervised release, Toback shall: (1) not commit another federal, state, or local crime; (2) not illegally possess a controlled substance; (3) not possess a firearm or destructive device; (4) submit himself to a special condition requiring drug treatment and testing; and (5) cooperate in the collection of DNA as directed by the probation officer. Furthermore, the standard conditions of supervision (1-13) shall be imposed with the following special conditions:
(1) Toback will participate in a program approved by the United States Probation Office, which program may include testing to determine whether Toback has begun using drugs or alcohol. The Court authorizes the release of available drug treatment evaluations and reports to the substance abuse treatment provider, as approved by the probation officer. Toback will be required to contribute to the costs of services rendered (co-payment), in an amount determined by the probation officer, based on ability to pay or availability of the third-party payment.
(2) Toback shall submit his person, residence, place of business, vehicle, or any other premises under his control to a search on the basis that the probation officer has reasonable belief that contraband or evidence of a violation of the conditions of the release may be found. The search must be conducted at a reasonable time and in reasonable manner. Failure to submit to a search may be grounds for revocation. Toback shall inform any other residents that the premises may be subject to search pursuant to this condition.
(3) Toback shall provide the probation officer with access to any requested financial information.
(4) Toback shall comply with the conditions of home confinement for a period of ten months. During this time the defendant will remain at his place of residence except for employment and other activities approved by the probation officer. The defendant will maintain a telephone at his place of residence without call forwarding, a modem, caller ID, call waiting, or portable cordless telephones for the above period. At the direction of the probation officer, the defendant shall wear an electronic monitoring device and follow electronic monitoring procedures specified by the probation officer. Home confinement shall commence on a date to be determined by the probation officer. Should home confinement be imposed, the defendant shall pay the costs of home confinement on a self payment or copayment basis as directed by the probation officer.
No fine shall be imposed in this case. However, Toback shall pay to the United States a mandatory special assessment of $100, which shall be due immediately.
The terms of this sentence are subject to modification at the sentencing hearing set for April 19, 2005.
It is so ordered.