Federal Criminal Lawyer Blog

A decision from an Atlanta case that was issued last Friday once again demonstrates that sentencing hearings in federal criminal cases are amazingly complex, and can lead to surprises. In the case from last week, US v. Kuhlman, the Sentencing Guidelines called for a range of 57-71 months in custody. Prosecutors asked for 36 months. The Defendant paid almost $3 million in full restitution. The Judge continue the case for 6 more months, during which time the Defendant performed almost 400 hours of community service. At the next sentencing hearing, the Judge decided it made no sense to put the Defendant in prison, so he imposed a "time served" sentence. The prosecutors appealed, and the Court of Appeals agreed with them, reversing the probationary sentence and remanding for another sentencing hearing.

The Defendant was a local Atlanta area chiropractor who owned and operated a series of clinics. Beginning in January 2005, he began a five-year scheme, falsely billing health insurance companies for services he knew were not rendered to his patients. The Defendant was charged in a criminal information with one count of health care fraud in violation of 18 U.S.C. §§ 1347 and 2. He pleaded guilty pursuant to a plea agreement. At the plea hearing, the chiropractor admitted that he did not steal out of need—he was not in financial trouble and he did not have creditors breathing down his neck asking for money. Instead, he conceded that he simply pushed the envelope of billing practices.

A few days before sentencing, the doctor paid $2,944,883 in full restitution. The Judge was obviously impressed and remarked that the chiropractor was the first Defendant that the Judge could recall who made such a large restitution payment prior to sentencing.

The very experienced Judge proceeded to discuss the rising costs of incarceration, citing a recent Georgia state commission formed to explore alternatives to prison for nonviolent criminals. The Judge alluded to the fact that the chiropractor would need time to pay off his fine and support his family. The Judge also hinted that if given extra time before sentencing, perhaps the doctor should perform public service. The Judge continued to express concerns over the rising costs of prison and suggested that a continuance would save “the court . . . at least $10,000 by not incarcerating the Defendant during this period." The Judge, who has been on the bench since the early 1980's, also noted that he had ordered a similar sentencing continuance for a “budding rock star,” which had yielded positive results. The Judge explained that when given the extra six months, the “budding rock star” made “hundreds of visits to young people” and had a positive impact on the community.

Over the following six months, the doctor made good on the opportunity given to him by the Judge. The Defendant performed 391 hours of community service. He visited various medical, nursing, and chiropractic schools and gave presentations on health care insurance fraud. He also provided 18 days of free chiropractic services at homeless shelters across Atlanta and painted a gym at an elementary school. At the second sentencing hearing, the Judge commended the doctor's work during his six-month continuance. In light of the full restitution payment, the community service, and the rising costs of incarceration, the Judge sentenced the chiropractor to probation for the “time served” while awaiting his sentence.

The Court of Appeals decided that the sentence was simply too lenient. The opinion goes on for pages railing against the idea that "white collar" criminals somehow get a break by paying full restitution.

This case is highly disappointing. As kids we are taught that a person stealing something should pay back that which was taken. Then, when showing remorse, we are told that the person should say they are sorry, and demonstrate to others the wrongfulness of their conduct. Here, the three judges felt they knew better than the highly experienced Senior District Judge. These judges believed that it's better to put a productive man in prison and spend tens of thousands of taxpayer dollars, even though the chiropractor paid back every penny. We sincerely hope this case does not show a trend of appellate judges reversing what they perceive to be unduly "lenient" sentences.

My law partner, Carl Lietz, has previously had good results when we represented medical doctors accused of over-prescribing pain medication. He has written earlier posts on this subject. We are seeing more and more of these cases, as shown by recent press releases and news reports. Today, the United States Court of Appeals for the Eleventh Circuit, just a few blocks away here in Atlanta, affirmed the conviction of a doctor, a pharmacist, and a physician's assistant for conspiracy and dozens of counts of over-prescribing pain medications. The case is United States v. Joseph.

The case was prosecuted in the Middle District of Georgia where Dr. Green ran a clinic. His Physician's Assistant was Ms. Mack, and most of the prescriptions were filled by a local pharmacist, Mr. Joseph. The Court of Appeals' opinion recounts the usual evidence we see in such cases involving "pill mills", hundreds of patients paying in cash or credit cards, no insurance, patients traveling long distances just to go this particular clinic, and limited or non-existent medical exams prior to writing or re-filling prescriptions for addictive pain medications.

There are several notable features of this case. One is that both sides called expert witnesses on the "standard of care" to be used by doctors and pharmacists. This is a crucial aspect when defending such cases. Many lawyers fail to recognize they need to prepare for a government "expert" who routinely tells juries the same thing: "I would never do what this doctor did." However, these government experts often fail to recognize the true need many patients have for pain medicines. My partner Carl has previously used a well-recognized defense expert witness who was able to at least counter what the government doctor was prepared to say.

Another important aspect of the case is that most of the defense arguments were rejected by the Court of Appeals under the "plain error" standard, because the trial lawyers failed to properly object to a mistake by the trial judge. Even very good lawyers often fail to preserve objections, which makes it very hard to win a case on appeal. Our firm does lots of appeals, and while we are far from perfect, we believe our appellate cases helps us do a better job in trial when trying to preserve an issue for appeal.

Finally, the case is instructive in that the doctor was given a sentence of 30 years in prison, because patients died or suffered serious bodily injury stemming from their use of the excessive pain medications. Such a sentence demonstrates the serious nature of these cases, and why medical practitioners need to find lawyers who are skilled in federal court when defending such matters.

In a federal white collar criminal case originating out of the Northern District of Florida (Pensacola Division), the Eleventh Circuit recently affirmed life sentences for a pain management physician convicted of various federal offenses. Among other things, the federal indictment against Dr. David Webb alleged that he unlawfully dispensed controlled substances in violation of federal law (21 U.S.C. § 841), and engaged in health care fraud in violation of § 1347 by issuing prescriptions that were not medically necessary. In connection with both the unlawful dispensing charge, as well as the health care fraud charge, the indictment alleged that Dr. Webb's prescriptions resulted in the death of three of his patients.

At trial, both the Government and Dr. Webb presented expert testimony concerning the legitimacy of the controlled substance prescriptions at issue. According to the Government's expert, Dr. Webb: (1) gave inadequate initial evaluations, including failing to obtain prior medical records and sub-standard physical exams; and (2) failed to refer patients to specialists to help manage their pain. In addition, the Government's expert also testified that Dr. Webb also ignored signs of drug dependency in his patients and continued to prescribe drugs even when patients were “out of control with their self-taking of the medicine.” Accordingly, based on these and other factors, the Government's expert opined that Dr. Webb’s prescribing practices were “dangerous, absolutely incredible,” and “clearly inconsistent with the usual course of medical practice and for other than legitimate medical purposes.” At the conclusion of the trial, the jury returned guilty verdicts on all counts but one.

On appeal, Dr. Webb raised a number of arguments, seeking to vacate his three life sentences on the resulting in death counts, as well as the other counts for which he stood convicted. Most notably, Dr. Webb argued that the trial court erred in the instructions that it provided to the jury on the three death related counts.

In essence, Dr. Webb argued that the district court should have provided an instruction that would have required the jury to find that Dr. Webb's conduct proximately caused the deaths or, at a minimum, that the deaths were reasonably forseeable to Dr. Webb. The Eleventh Circuit, however, disagreed.

With respect to the § 841 charges, the court held that § 841's enhanced penalty requires only proof that the death resulted from the victim’s use of a controlled substance dispensed by the defendant. Likewise, with respect to the death charge pertaining to the health care fraud count, the Eleventh Circuit reached a similar conclusion; according to the Eleventh Circuit, the results in death language in each statute requires nothing more than a causal connection factually. In other words, under both statutes, the Government is not required to prove proximate cause or reasonable forseeability.

Although it may not help Dr. Webb, at least one judge on the three judge panel disagreed with the court's decision concerning the resulting in death language in the federal health care fraud statute. As the dissenting judge recognized, the majority's decision on this issue directly conflicts with the Sixth Circuit's decision in United States v. Martinez. According to the Sixth Circuit, "proximate cause is the appropriate standard to apply in determining whether a health care fraud violation ‘results in death.’"

In a previous post, we have discussed how federal prosecutors in the Atlanta area are ramping up investigations and prosecutions involving physicians that practice in the area of pain management. And as lawyers that have handled federal cases involving similar allegations before, we were disappointed by the Eleventh Circuit's decision to reject the Sixth Circuit's analysis in Martinez. Because of the conflicting decisions between the Sixth and Eleventh Circuits that we now have on the issue, however, we are hoping that the Supreme Court takes Dr. Webb's case (or a similar one) to resolve this Circuit conflict.

The Eleventh Circuit's opinion in Webb can be found here.

A seemingly overzealous prosecution team went after a medical doctor in a federal criminal prosecution regarding supposed excessive prescriptions for pain medicines. My law partner Carl recently wrote on this same topic. The defense team uncovered the possibly improper prosecution tactics. The jury found the doctor innocent, after which the trial judge ordered that the United States pay the doctor's legal fees. What really took the case to the next level is that the trial judge issued a public reprimand of the prosecutors and referred them for potential disciplinary action. Nothing is as angry as a prosecutor's office that not only loses, but is told that its people are acting improperly. The government appealed the attorney fee ruling and the reprimand of the prosecutors. Yesterday, a divided Panel from the United States Court of Appeals for the Eleventh Circuit agreed with the government. The case is United States v. Hoffman, et. al.

The majority clearly wanted to help the prosecutors, as is shown by the opening lines in the opinion. "The stakes in this appeal are high: they involve the sovereign immunity of the United States, the constitutional separation of powers, and the civil rights and professional reputations of two federal prosecutors." Rarely does the Eleventh Circuit concern itself with "the civil rights and professional reputations" of lawyers other than prosecutors.

When litigating a motion to suppress before trial, the magistrate found (and the trial judge agreed) that the agents were not being truthful about what happened when they interrogated the doctor. Then, in the middle of trial the defense team discovered that the prosecutors had been taping conversations between witnesses and the defense lawyer. It turns out that this taping was done as part of an effort to remove the very qualified defense team. The trial judge was enraged, and allowed the defense to re-call the witnesses to the stand, with an instruction that told the jury this was being done because of the improper prosecutorial tactics.

After the jury found the doctor not guilty, the trial judge used the Hyde Act to make the government reimburse Dr. Shaygan all the legal fees he had to pay to defend against this case that was "brought vexatiously, in bad faith, or so utterly without foundation in law or fact as to be frivolous." Next, the judge held a hearing concerning the prosecutors, and took testimony from 6 witnesses. New prosecutors came in to try and minimize the damage, but the trial judge nevertheless issued an order for disciplinary action against the trial prosecutors.

The government convinced two of the three judges on the Panel to reverse both the order of attorneys fees and the disciplinary rulings against the trial prosecutors. The majority ruled that a defendant who is found not guilty can get back his or her attorney fees only if the entire case was vexatious and in bad faith from the very beginning. Additionally, the majority decided that the trial judge violated the constitutional rights of the trial prosecutors by issuing his disciplinary ruling without telling them ahead of time he was considering just such a course of action. In dissent, Judge Edmonson was also troubled by the whole case, and would have found that the order for payment of attorneys fees was proper because the trial prosecutors clearly acted in "bad faith."

This case is a perfect example of how difficult it is to defend a person against zealous federal prosecutors and agents. Fortunately for Dr. Shaygan, his defense team was up to the task.

Earlier this year, the United States Attorney's Office for the Northern District of Georgia announced that federal prosecutors and federal agents are ramping up criminal investigations and prosecutions of so-called "pill-mills" in metro Atlanta. The statement (which was reported in the Atlanta Journal Constitution) was made during a "summit" on prescription drug abuse held here in Atlanta back in March.

Since that "summit", federal prosecutors in Atlanta have secured indictments against doctors and others, claiming that these individuals have violated federal controlled substance laws. Indeed, as recently as last month, federal prosecutors indicted doctors, managers, and owners of "Atlanta Medical Group", charging these individuals with a number of federal offenses. According to the press release issued in connection with the federal indictment, these individuals operated a "pill-mill", illegally distributing oxycodone in violation of federal law.

There is no doubt that prescription drug abuse is a serious problem that needs to be addressed. However, it is equally true that chronic pain is also a serious problem in the United States. Indeed, just last week, the New York Times published an article discussing a sweeping review on this issue that was recently released by the Institute of Medicine — the medical branch of the National Academy of Sciences. According to that review, it is "estimated that chronic pain afflicts 116 million Americans, far more than previously believed." The article goes on to describe that "[t]he toll documented in the report is staggering[,]" leading the chief of pain management at the Stanford School of Medicine (Dr. Sean Mackey) to conclude that number of people suffering from chronic pain "is more than diabetes, heart disease and cancer combined.”

The article goes on to note that "[f]or patients, acknowledgment of the problem from the prestigious Institute of Medicine is a seminal event. Chronic pain often goes untreated because most doctors haven’t been trained to understand it. And it is isolating: Family members and friends may lose patience with the constant complaints of pain sufferers. Doctors tend to throw up their hands, referring patients for psychotherapy or dismissing them as drug seekers trying to get opioids."

As I mentioned in an earlier post, we have represented a number of doctors in alleged over-prescribing cases, and in those cases, we learned a lot about this unique area of the law. Typically, the federal government prosecutes doctors under the same federal statute that it uses to prosecute cocaine dealers and other alleged drug offenders. In federal cases against doctors, however, the government has to prove that the prescriptions at issue were written “outside the usual course of professional practice and without legitimate medical purpose." Not surprisingly, the resolution of this important issue often depends upon expert testimony and the experts that the Government uses, quite often, take a very conservative view of what legitimate pain management physicians should be permitted to prescribe. That view, however, is not the only view. As the New York Times article quoted above recognized, the "proper use of the drugs early in a pain cycle can resolve pain problems sooner, and . . . opioids are also particularly useful for pain management near the end of life."

We will continue to follow developments in this interesting area of federal law. For those of you that may be interested, the full New York Times article can be found here.

Last week the Eleventh Circuit Court of Appeals issued its decision in United States v. Mateos, a Medicare fraud case in which the Court held that exclusion of an exculpatory videotape was harmless error. This case is an important reminder to all trial lawyers to remain as well-versed as possible in the law of evidence to best represent our clients.

The defendants were employees of a clinic that purported to treat HIV patients. The clinic’s two doctors saw 70 patients per week, each of which was paid to complain about bleeding disorders. Every patient received either saline or a diluted dose of an expensive and medically unnecessary drug, and then the clinic billed Medicare for full treatments. The clinic received more than $8 million from Medicare during the five months that it was open.

Doctor Alvarez’s defense at trial was that she had not known about the fraud. She tried to introduce a video in which a member of the conspiracy assured her that the clinic was not involved in fraud to show that she had not been aware, but the video was excluded as inadmissible hearsay. The Eleventh Circuit held that the video was not hearsay because it was offered for a purpose other than the truth of the matter asserted. However, the Court held that the error was harmless because the defense had elicited the exculpatory content of the video through testimony.

The Court also upheld an upward departure in sentencing, noting that, under the new healthcare laws, the sentence would have been within the guidelines range had the fraud been committed today. Because sentences within the guidelines are presumptively reasonable and because the sentencing judge named numerous reasons for its upward departure, the Court held that a 30-year sentence was not an abuse of discretion, despite sentencing disparities.

The full opinion is available here.