No Victim-Identity Limit for FDCA § 333(a)(2); FDCA § 334 Is Not a Civil Forfeiture Statute

Introduction

In a far-reaching decision arising from systemic doping in professional horse racing, the Second Circuit clarifies two consequential points of federal food and drug law and remedies:

• First, the felony enhancement in the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 333(a)(2), does not limit the “intent to defraud or mislead” element to particular victim categories such as consumers or the FDA; the target may include state horse-racing regulators, provided the fraudulent intent is connected to the underlying misbranding/adulteration offense under § 331.
• Second, the FDCA’s seizure-and-condemnation provision, 21 U.S.C. § 334, is not a “civil forfeiture” statute within the meaning of 28 U.S.C. § 2461(c), and thus cannot support criminal forfeiture or substitute-asset forfeiture under 21 U.S.C. § 853.

The case involves Dr. Seth Fishman, a licensed veterinarian who manufactured and sold undetectable performance-enhancing drugs (PEDs) for racehorses, and his salesperson, Lisa Giannelli. A jury convicted both of conspiracies to manufacture and distribute misbranded or adulterated drugs with intent to defraud or mislead, in violation of 21 U.S.C. §§ 331 and 333(a)(2). Fishman also challenged his sentence, restitution, and forfeiture orders.

Summary of the Opinion

• FDCA felony enhancement (§ 333(a)(2)): The statute imposes heightened penalties when a § 331 violation (misbranding/adulteration) is committed “with the intent to defraud or mislead.” The court holds the statute does not specify or limit victim identity; the relevant question is whether the fraudulent intent relates to the § 331 offense. Intent aimed at deceiving state racing regulators qualifies if it is connected in time, causation, or logic to the misbranding/adulteration.
• Evidentiary ruling: Evidence from a 2011 Delaware Division of Professional Regulation investigation fell within the conspiracy period and was intrinsic to the charged conduct; the district court properly excluded prejudicial details (the horse’s death), satisfying Rule 403.
• Sentencing: The district court reasonably found actual pecuniary loss to competitors (lost purses) attributable to doping, but the amount could not be reasonably determined; gain as a proxy under U.S.S.G. § 2B1.1(b)(1) was permissible, and the $13 million figure was not plainly erroneous.
• Restitution: The MVRA requires actual loss. Racetracks are not proper recipients on this record because they would have paid purses in any event; restitution must not create a windfall. Restitution order vacated and remanded.
• Forfeiture: Section 334’s condemnation regime is focused on public safety—removing dangerous or misbranded articles from commerce—and not on confiscating proceeds or imposing an economic penalty. It is therefore not a “civil forfeiture” statute within § 2461(c), and the substitute-asset provision in § 853(p) is inapplicable. Criminal forfeiture order vacated.

Background

The record established two conspiracies:

• Navarro Conspiracy (2016–2020): Fishman manufactured and supplied undetectable PEDs to trainer Jorge Navarro, who doped horses that ran in at least 1,480 races. Navarro credited Fishman’s PEDs for winning high-profile races and large purses.
• Fishman Conspiracy (2002–2020): Fishman and Giannelli operated Equestology, selling unapproved drugs without prescriptions or FDA-compliant labeling, and with misleading labels; Giannelli earned commissions (~$900,000). Customers touted dramatic performance improvements.

The government proved misbranding/adulteration through non-registered facilities, deficient/misleading labels, absence of veterinary prescriptions, and lack of FDA approval. The conspirators acted covertly: vetting clients, falsifying customs forms, and designing drugs to evade detection by testing regimens. Separate trials resulted in convictions; the district court imposed prison terms and substantial restitution/forfeiture against Fishman.

Detailed Analysis

I. FDCA § 333(a)(2) — “Intent to Defraud or Mislead” Need Not Target Specific Victims

A. Text and Structure

Section 333(a)(2) raises penalties when a § 331 violation is committed “with the intent to defraud or mislead.” The statute does not specify who must be defrauded. Where Congress intends to limit a fraud offense to certain victims, it says so (e.g., 18 U.S.C. § 1344 (financial institutions), § 1002 (the United States)). In the FDCA itself, Congress sometimes limits provisions to communications “directed to consumers” (21 U.S.C. § 331(tt)). The absence of such limiting language in § 333(a)(2) is telling.

The court situates the enhancement in the FDCA’s architecture: § 333(a)(1) creates a classic public-welfare misdemeanor (strict liability, modest penalties) for distributing misbranded/adulterated articles, consistent with United States v. Dotterweich, 320 U.S. 277 (1943), and Morissette v. United States, 342 U.S. 246 (1952). By contrast, § 333(a)(2) targets aggravated conduct—misbranding/adulteration accompanied by culpable intent to deceive—warranting felony punishment. Reading § 333(a)(2) to hinge on victim identity would distort this graded scheme and oddly collapse deliberate, deceptive misbranding into misdemeanor treatment unless a narrow class of victims was deceived.

B. Precedents and Their Influence

• United States v. Mitcheltree, 940 F.2d 1329 (10th Cir. 1991): The Tenth Circuit held a § 333(a)(2) conviction can rest on intent to mislead government regulators if there is a demonstrable link between the § 331 violation and intent to mislead a drug regulatory agency. It rejected a theory that any deliberate evasion equals felony fraud; the specific-intent connection must be proved. The Second Circuit embraces this “linkage” concept.
• United States v. Milstein, 401 F.3d 53 (2d Cir. 2005): This Court upheld § 333(a)(2) convictions where the defendant misled the FDA and public via forged labels and repackaging. Milstein confirms that misleading government agencies can satisfy the statute and that nothing in § 333(a)(2) precludes application where the deceived party is the public or an agency.
• Dotterweich, 320 U.S. at 280–81: Establishes the strict-liability character of the misdemeanor and supports the enhancement as marking out more culpable, deceptive conduct for felony treatment.

C. Application and Record Support

The jury was correctly instructed that the requisite intent may be to mislead “consumers, state racing and drug regulators, the [FDA], or other federal drug enforcement authorities” so long as it is “connected—related in time, causation or logic—to” the misbranding/adulteration. That connection was amply supported:

• State racing commissions regulate administration of drugs to racehorses, including prohibiting non–FDA-approved products (e.g., 9 N.Y.C.R.R. §§ 4012.1(a)(2), 4120.6; testimony regarding Florida rules).
• Fishman designed products to evade testing and used misleading labels—classic indicia of an intent to deceive regulators whose rules would have barred the products’ administration.

D. Rejected Counterarguments

• Rule of lenity: Not applicable; there is no grievous ambiguity. The statutory silence on victim identity is properly read as silence—not a limitation.
• HISA (Horseracing Integrity and Safety Act of 2020): HISA post-dates the conduct and does not displace the FDA’s drug-approval and labeling regime; the offense here is an FDCA misbranding/adulteration violation committed in a racing context, not a free-standing “doping” offense.

II. Evidence of Delaware’s 2011 Investigation — Properly Admitted

The court affirms admission of evidence concerning a 2011 Delaware Division of Professional Regulation investigation into Fishman and Giannelli following a horse’s death (with the death itself excluded under Rule 403). The investigation fell squarely within the 2002–2020 conspiracy period and concerned the same alleged practices (unapproved drugs, improper dispensing). Such evidence was intrinsic to the charged conspiracy and therefore outside Rule 404(b). See United States v. Hsu, 669 F.3d 112, 118 (2d Cir. 2012); United States v. Concepcion, 983 F.2d 369, 392 (2d Cir. 1992).

The district court reasonably balanced probative value against prejudice under Rule 403: it allowed evidence bearing on Giannelli’s notice, knowledge, and intent (including her prior statements about her role) but excluded the fact of the horse’s death as unduly prejudicial.

III. Sentencing — Loss Enhancement and Use of Gain

Under U.S.S.G. § 2B1.1(b)(1), loss is the greater of actual or intended loss; gain may be used only where there is loss but it cannot be reasonably determined. Application Note 3(B). See United States v. Romano, 794 F.3d 317, 339 (2d Cir. 2015).

• Actual Loss Exists: The district court found by a preponderance that competitors of co-conspirator Jorge Navarro suffered actual, reasonably foreseeable pecuniary losses (lost purses) because Navarro’s horses won races due to illegal doping. Record evidence included Navarro’s contemporaneous crediting of Fishman’s PEDs for wins, including major international purses, and trainers’ descriptions of dramatic performance effects. This finding was not clearly erroneous.
• Amount Not Reasonably Determined: The government could not precisely identify the doped horses and quantify specific displaced purses across years and races. The court therefore used Fishman’s gain as a proxy.
• Gain Amount: Fishman did not preserve an objection to the $13 million figure at sentencing, and in any event, the figure exceeded the $9.5 million threshold for the 20-level enhancement and was far less than even one co-conspirator’s winnings (~$25.86 million). No plain error.

IV. Restitution — Racetracks Not “Victims” with Actual Loss

The MVRA authorizes restitution only to “victims” suffering direct and proximate, actual pecuniary loss. 18 U.S.C. § 3663A(a)(1)-(2). Restitution cannot exceed making the victim whole and cannot be based on a defendant’s gain. See United States v. Zangari, 677 F.3d 86, 91 (2d Cir. 2012); United States v. Boccagna, 450 F.3d 107, 117 (2d Cir. 2006).

The district court ordered Fishman to pay $25,860,514 to racetracks based on Navarro’s stipulated winnings. The Second Circuit vacates:

• No Actual Loss to Racetracks: Racetracks would have paid purses regardless—just to different winners. Ordering them restitution would be a windfall. See United States v. Maynard, 743 F.3d 374, 379–80 (2d Cir. 2014).
• “Clearinghouse” Theory Rejected: The record in Fishman’s case did not show racetracks were legally obligated or expected to distribute the funds to true victims (losing competitors). The Eleventh Circuit’s City-of-Atlanta case (United States v. Woodard, 459 F.3d 1078 (11th Cir. 2006))—where the city held funds in trust-like fashion—was inapposite.

The restitution order is vacated and remanded for reconsideration consistent with the actual-loss requirement and anti-windfall principle.

V. Forfeiture — FDCA § 334 Is Not a Civil Forfeiture Statute

The government sought a criminal forfeiture money judgment equal to the “street value” of adulterated/misbranded drugs, invoking 28 U.S.C. § 2461(c) (permitting criminal forfeiture when an offense is one “for which the civil or criminal forfeiture of property is authorized”) and 21 U.S.C. § 853(p) (substitute assets when tainted property is unavailable).

The Second Circuit vacates the forfeiture order, holding that 21 U.S.C. § 334 is not a “civil forfeiture” statute in the CAFRA sense:

• Purpose and Remedies of § 334: Section 334 provides for in rem seizure and condemnation to protect public health—removing misbranded/adulterated items from commerce. It authorizes destruction or sale, but notably also permits return to the owner to be “destroyed or brought into compliance,” or export. These remedies do not inherently disgorge illegal proceeds or impose an economic penalty; they remediate safety risks.
• Contrast with Civil Forfeiture: Civil forfeiture traditionally confiscates property used in violation of law or the fruits of illegal conduct, imposing an economic penalty that deters and deprives wrongdoers. See United States v. Ursery, 518 U.S. 267, 284 (1996); Bennis v. Michigan, 516 U.S. 442, 452 (1996); United States v. 38 Whalers Cove Drive, 954 F.2d 29, 36 (2d Cir. 1992).
• Text and History: Section 334 is captioned “Seizure,” not “forfeiture,” and in the subpart where the term “forfeiture” appears (remission/mitigation), it expressly excludes “drug” condemnation. The Government and district court cited cases colloquially referencing “forfeiture,” but those were in rem condemnation proceedings under § 334 itself—not criminal forfeiture via § 2461(c), and not invoking § 853(p) for substitute assets.
• Novelty and Overbreadth: No identified case has used § 2461(c) to bootstrap § 334 into criminal forfeiture or to reach substitute assets under § 853(p). Accepting the Government’s view would expose even inadvertent FDCA labeling violators to wholesale proceeds disgorgement—a remedy Congress did not clearly authorize.

Conclusion: § 334 is not a civil forfeiture statute within § 2461(c); therefore, § 853 procedures (including substitute-asset forfeiture) do not apply. The criminal forfeiture order is vacated.

Precedents Cited and Their Roles

• United States v. Dotterweich, 320 U.S. 277 (1943): Confirms strict-liability character of FDCA misdemeanor offenses; frames § 333(a)’s graded scheme.
• Morissette v. United States, 342 U.S. 246 (1952): Distinguishes public-welfare offenses from traditional crimes requiring mens rea; supports reading § 333(a)(2) as felony enhancement for culpable intent.
• United States v. Mitcheltree, 940 F.2d 1329 (10th Cir. 1991): Establishes “linkage” requirement between misbranding violation and intent to mislead specific regulatory agencies; embraced as persuasive.
• United States v. Milstein, 401 F.3d 53 (2d Cir. 2005): Confirms that intent to mislead the FDA and the public suffices under § 333(a)(2); no victim-identity limitation.
• United States v. Ursery, 518 U.S. 267 (1996) and Bennis v. Michigan, 516 U.S. 442 (1996): Describe the penal and disgorgement functions characteristic of civil forfeiture, which § 334 lacks.
• United States v. 38 Whalers Cove Drive, 954 F.2d 29 (2d Cir. 1992): Recognizes compensation/deterrent features of civil forfeiture; contrasts with § 334’s safety-focused remedies.
• U.S.S.G. § 2B1.1 & Application Notes; United States v. Romano, 794 F.3d 317 (2d Cir. 2015): Limit use of gain as a proxy to situations where loss exists but cannot be reasonably determined.
• MVRA line: United States v. Zangari, 677 F.3d 86 (2d Cir. 2012) (restitution tied to actual loss); United States v. Boccagna, 450 F.3d 107 (2d Cir. 2006) (no windfalls); United States v. Maynard, 743 F.3d 374 (2d Cir. 2014) (payments that would have occurred “in any event” are not actual loss).

Legal Reasoning: How the Court Reached Its Results

• Textual and contextual analysis for § 333(a)(2): Ordinary meaning, comparative drafting, and FDCA structure show no victim-identity restriction; the enhancement distinguishes culpable, deceptive violations from strict-liability misdemeanors.
• Linkage requirement: Consistent with Mitcheltree and Milstein, the intent must be connected to the misbranding/adulteration—here, deception of state racing regulators about unapproved, misbranded drugs administered to racehorses in violation of their rules.
• Evidence admissibility: Within-scope conduct is intrinsic to a charged conspiracy; 404(b) inapplicable; court tailored admission to minimize unfair prejudice under Rule 403.
• Guidelines application: The district court lawfully used gain as a proxy because actual loss existed (lost purses by competitors) but the amounts were not reasonably determinable; the gain figure supported the 20-level increase and did not constitute plain error.
• Restitution constraint: MVRA requires proof of actual loss by the specific payee; racetracks were not directly and proximately harmed in the sense the statute demands. Restitution may not serve as a general disgorgement tool nor create windfalls.
• Forfeiture limits: CAFRA’s § 2461(c) incorporates criminal forfeiture procedures only where the underlying statute authorizes “civil or criminal forfeiture.” Section 334’s condemnation/remediation focus is distinct from forfeiture’s penal/disgorgement aims; thus, § 853(p) substitute-asset forfeiture is unavailable.

Impact and Practical Implications

A. Substantive FDCA Enforcement

• Wider target for “intent to defraud”: Prosecutors may satisfy § 333(a)(2) by proving intent to deceive regulators beyond the FDA, including state-racing authorities, if the deception is tied to the misbranding/adulteration. This closes a potential defense gap in cases where customers are complicit but regulatory deception is central.
• Compliance stakes for veterinarians and compounders: Intentional mislabeling and clandestine distribution to circumvent detection by any regulatory authority exposes defendants to felony liability, even if end purchasers were not misled.

B. Evidence Strategy in Conspiracy Trials

• Intrinsic acts are admissible: Investigative episodes within the conspiracy window can come in to show knowledge, notice, and intent, so long as courts manage prejudice. Defendants should challenge only extrinsic “other acts,” and narrowly frame Rule 403 objections to exclude particularly inflammatory facts.

C. Sentencing

• Loss may be proved via competitor harm: In cheating-to-win schemes, losses to rivals (displaced prize money) are cognizable “actual loss.” Where precise quantification is impracticable, courts may permissibly use the defendant’s gain as a proxy. Defense counsel should contest both the existence and quantifiability of loss, and, if necessary, the definition of “gain.”

D. Restitution

• MVRA victim selection matters: Payees must be those who suffered direct, proximate, actual pecuniary loss. Entities who would have made the same payments regardless (like racetracks paying purses) are not proper restitution recipients on such records. Prosecutors should identify and substantiate losses of direct victims (e.g., specific losing owners/trainers).

E. Forfeiture and Remedies Architecture

• Limits on using FDCA for disgorgement: The Government cannot rely on § 334 to pursue criminal forfeiture or substitute-asset forfeiture via § 2461(c)/§ 853(p). Alternative theories (e.g., mail/wire fraud or money laundering, where present) may be necessary to access forfeiture; otherwise, remedies are fines, imprisonment, and civil condemnation under § 334 itself.
• Policy significance: The decision curbs expansive forfeiture theories tied to public-safety remediation statutes and emphasizes statutory precision before depriving defendants of substitute assets.

Complex Concepts Simplified

• Misbranding vs. adulteration (FDCA § 331): Misbranding involves false or misleading labeling, missing information, or sale without required prescriptions; adulteration concerns unsafe composition, contamination, or manufacturing outside regulatory standards.
• Public-welfare misdemeanor vs. felony enhancement: The basic FDCA offense is strict liability (no mens rea needed). The felony enhancement under § 333(a)(2) applies if the defendant acted with intent to deceive or cheat in connection with the violation.
• “Intent to defraud or mislead” link: The deception must be connected to the misbranding/adulteration—e.g., using a fake label to avoid a regulator’s detection of an unapproved drug administered to racehorses.
• Intrinsic vs. extrinsic evidence: Intrinsic acts are part of the charged conduct and are admissible to tell the story of the crime; extrinsic “other acts” trigger Rule 404(b) limits and must be justified for non-propensity purposes (like intent or knowledge).
• Guidelines loss and gain: “Actual loss” equals reasonably foreseeable pecuniary harm caused by the offense. If actual loss exists but cannot be calculated, courts may use the defendant’s gain as a substitute measure.
• MVRA restitution: Compensatory only; must restore actual losses to direct victims without windfalls. A defendant’s profit is not a proxy for a victim’s loss.
• Civil forfeiture vs. condemnation: Civil forfeiture confiscates property used in or derived from crime to penalize and deter; condemnation under § 334 removes unsafe/misbranded items from commerce and may return items for compliance or export, reflecting a safety—not penal—objective.
• CAFRA and substitute assets: 28 U.S.C. § 2461(c) allows criminal forfeiture only if some statute authorizes forfeiture of property; 21 U.S.C. § 853(p) permits substitute-asset forfeiture when covered. If the underlying statute (here, § 334) is not a forfeiture statute, these routes are closed.

Unresolved Questions and Future Litigation

• Quantifying competitor losses: On remand and in future cases, how best to identify and apportion displaced purses to particular losing competitors for MVRA purposes remains practically challenging.
• Scope of “connected” intent: Future cases may refine how close the nexus must be between the deception and the misbranding/adulteration to satisfy § 333(a)(2)—especially where multiple regulators are in play.
• Alternative forfeiture pathways: Where FDCA violations accompany mail/wire fraud, money laundering, or other offenses with forfeiture provisions, the Government may retool charging decisions to secure forfeiture remedies.
• HISA interplay: As HISA’s rules continue to evolve, the boundary between FDCA misbranding enforcement and racing-specific anti-doping regulations may generate additional coordination and litigation.

Conclusion

United States v. Fishman, Giannelli sets two significant markers in FDCA and remedies jurisprudence. First, it confirms that § 333(a)(2)’s felony enhancement is about culpable deception tied to misbranding/adulteration—not about who the deceived party is. That reading aligns with the FDCA’s graded offense structure and with precedent allowing intent to deceive regulators to satisfy the statute. Second, it squarely holds that § 334 is not a CAFRA “civil forfeiture” statute and cannot be used to obtain criminal forfeiture or substitute assets under § 853, reinforcing the remedial—rather than punitive—nature of FDCA condemnation.

The court also issues practical guidance on evidence admission in conspiracy trials, on loss calculations in doping-related frauds, and on the strict limits of restitution under the MVRA. The decision will influence prosecutorial charging strategies, defense approaches to loss and restitution, and regulatory enforcement where FDCA violations intersect with competitive sports and beyond.