White Collar Crime Prof Blog

Stetson Law Symposium - Elon Musk and the Law

Elon Musk and the Law

Stetson Law Review Symposium

March 24th

8:30 a.m. -4:30 p.m.

Virtual or In-Person at Stetson's Gulfport Campus

Admission - $50 - Legal Practitioners & Others; $40 Stetson Alumni; Free- Stetson Law Students and Faculty

For More Information and to register - here

 

(esp) 

"Telemedicine Scams"

Check out Katrice Bridges Copeland's Article titled Telemedicine Scams, 108 Iowa L. Rev. 69 (2022).  The abstract from SSRN (here), which links to the Article states:

Telemedicine emerged as a lifeline during the COVID-10 pandemic. Although the technology existed long before the pandemic, its use was limited due to strict government regulations that limited reimbursement for telemedicine visits. In response to the pandemic, the Government waiver many of its restrictions for the duration of the Public Health Emergency. These changes fueled the growth of telemedicine.

The problem, however, is that telemedicine makes it easier to conduct fraud on a larger scale because without in-person visits, medical providers can reach many more beneficiaries in a short period of time. Thus, the size and scale of typical health care fraud schemes, such as sending medically unnecessary durable medical equipment, is magnified. This type of fraud has been on the rise since 2016, and, with the relaxed rules for telemedicine reimbursement during the pandemic, there is a serious concern that there will be a sharp increase in telemedicine fraud.

This Article examines the fraudulent practices in the telemedicine industry and the conditions that permit them to flourish. This Article critically assesses the changes to telemedicine coverage and their relationship to fraud. It examines the fraudulent practices through the lens of the fraud triangle to determine why telemedicine fraud occurs. After assessing the cause of telemedicine fraud, this Article argues that there is no need for additional criminal statutes to address telemedicine fraud. As the typical telemedicine scam involves the payment of kickbacks and bulling for medically unnecessary treatment and services, the existing fraud laws such as the Anti-Kickback statute and the False Claims Act are sufficiently capacious to address the criminality involved in these cases. This Article also argues that in lieu of the additional criminal statutes, the Government should focus on additional measures to prevent or detect telemedicine fraud because preventative measures are the best way to safeguard the integrity of federal health care programs.

(esp)

New Corporate Policy & De-confliction

The new DOJ Corporate Prosecution Policy Revisions of January 17, 2023 discussed here, makes the point of noting that the policy "is not in any way predicated upon waiver of the attorney-client privilege or work product protection, and none of the requirements above require such waiver." This is a wonderful statement to be included in this policy where there is a discussion of cooperation, as it emphasizes the importance of the respect for the attorney-client privilege.  (9-47.120 - Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy - here).  In defining self-disclosure it notes the following requirements:

The Criminal Division will require the following items for a company to receive credit for voluntary self-disclosure of wrongdoing (beyond the credit available under the U.S.S.G.):

• The voluntary disclosure must be to the Criminal Division;
• The company had no preexisting obligation to disclose the misconduct;
• The voluntary disclosure qualifies under U.S.S.G. § 8C2.5(g)(1) as occurring “prior to an
imminent threat of disclosure or government investigation”;
• The company discloses the conduct to the Criminal Division within a reasonably prompt
time after becoming aware of the misconduct, with the burden being on the company to
demonstrate timeliness; and
• The company discloses all relevant, non-privileged facts known to it, including all relevant
facts and evidence about all individuals involved in or responsible for the misconduct at
issue, including individuals inside and outside of the company regardless of their position,
status, or seniority.

But the paragraph that caught my eye is this one about de-confliction which states: 

    “De-confliction” is one factor that the Criminal Division may consider in appropriate cases in
evaluating whether and how much credit that a company will receive for cooperation. When the
Criminal Division makes a request to a company to defer investigative steps, such as the interview
of company employees or third parties, such a request will be made for a limited period of time and
be narrowly tailored to a legitimate investigative purpose (e.g., to prevent the impeding of a
specified aspect of the Criminal Division’s investigation). Once the justification dissipates, the
Criminal Division will notify the company that the Criminal Division is lifting its request.
Although the Criminal Division may, where appropriate, request that a company refrain from
taking a specific action for a limited period of time for de-confliction purposes, the Criminal
Division will not take any steps to affirmatively direct a company’s internal investigation efforts.

Is there a stronger link being developed between the government and the company, and is asking the company to defer an investigation furthering the company as an "agent" of the government? What happens if the company does not defer its internal investigation? 

One final note - the policy states that "Declinations under this Policy will be made public."  This acknowledgement of  transparency on the part of the government should be applauded.  But will a company want it known that they had been under investigation?

There are many questions yet to be answered, stay tuned.  

(esp)

Revisions to Corporate Crime Policy - Will the New Carrot Incentivize Companies to Cooperate?

On January 17, 2023, Assistant Attorney General Kenneth A. Polite, Jr. Delivered Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy, in which he stated, "The policy is sending an undeniable message: come forward, cooperate, and remediate." The new guidance provides:

Accordingly, the Criminal Division is issuing this revised Policy, effective on a prospective basis as of January 2023, which provides, inter alia, that when a company has voluntarily self-disclosed misconduct to the Criminal Division, fully cooperated, and timely and appropriately remediated, all in accordance with the standards set forth below, there will be a presumption that the company will receive a declination absent aggravating circumstances involving the seriousness of the offense or the nature of the offender. (emphasis added)

In delivering remarks on the new policy, Assistant Attorney General Kenneth A. Polite noted that the presumption will not apply when aggravating circumstances exist.  He stated -

Namely, even if aggravating circumstances are present, although a company will not qualify for a presumption of a declination, under the revised CEP I am announcing today, prosecutors may nonetheless determine that a declination is the appropriate outcome, if the company can demonstrate that it has met each of the following three factors:

• The voluntary self-disclosure was made immediately upon the company becoming aware of the allegation of misconduct;
• At the time of the misconduct and the disclosure, the company had an effective compliance program and system of internal accounting controls that enabled the identification of the misconduct and led to the company’s voluntary self-disclosure; and
• The company provided extraordinary cooperation with the Department’s investigation and undertook extraordinary remediation.

Each of these factors is familiar. That is by design. We are requiring companies seeking the possibility of a declination—even in the face of aggravating factors—to take extraordinary measures before, during, and after a Criminal Division investigation to earn such an outcome. This possibility is directed squarely at companies that take compliance and good corporate citizenship seriously.

Although the DOJ has moved to individual accountability years back, this new policy offers more of a carrot to companies who provide the evidence or assist the government is obtaining the evidence against individuals. AAG Polite stated: 

Our number one goal in this area – as we have repeatedly emphasized – is individual accountability. And we can hold accountable those who are criminally culpable—no matter their seniority—when companies come forward and cooperate with our investigation.

It will be interesting to follow whether this new incentive to companies will provide for more prosecutions of individuals, and in turn result in more deterence with respect to corporate criminality. 

More tomorrow on other interesting aspects of this new policy. 

(esp)

Another Post-Ruan Acquittal: Dr. Lesly Pompy Found Not Guilty On All Counts in E.D. Michigan

Congratulations to Dr. Lesly Pompy, acquitted on all counts (illegal distribution and health care fraud) on January 4, 2023, in the Eastern District of Michigan.  Kudos as well to his outstanding team of defense lawyers, Ronald Chapman II (Chapman Law Group), Joe Richotte (Butzel Long), and George Donnini (Butzel Long). Here is a recap from Ron's Federal Defense Blog. Attached below is Defendant's Proposed Jury Instruction. The proposed illegal distribution charge should serve as a model for other defense attorneys practicing in this area.

U.S. v. Lesly Pompy M.D. Defendant's Proposed Jury Instructions.

I don't yet have a copy of the district court's final jury instruction, but will post it as soon as it becomes available on PACER.

This is one of several post-Ruan acquittals that have come down in the last six months. In each of these cases the government's evidence was weak and the strengthened scienter requirement established in Ruan v. United States no doubt played a major role in facilitating the not guilty verdicts.

(wisenberg)

New White Collar Books

Two new white collar crime books were recently published -

Understanding White Collar Crime, Fifth Edition,  by J. Kelly Strader, Todd Haugh  (here)

White Collar Crime in a Nutshell, Sixth Edition, by Ellen S. Podgor, Jerold H. Israel, Miriam H. Baer, and Gregory M. Gilchrist (here)

(esp)

 

A Pre-Ruan Dispute That Appears To Have Fizzled

Back in October, I noted that several legal questions remained open in the wake of the Supreme Court's historic consolidated decision in Ruan v. United States and Kahn v. United States. I wrote that one such question was whether the government must prove that a physician-Defendant had no legitimate medical purpose for his/her prescription and that he/she was operating outside the usual course of his/her medical  practice or whether it only need prove one of these two factors. It appears that I was wrong on that score. I'm aware of only one district court jury instruction in the post-Ruan world that allows the government to meet its burden by proving "no legitimate medical purpose" or "operating outside the course/scope of a medical practice." The issue was of paramount importance pre-Ruan, because several circuits had long held that the "outside the course/scope" prong was based on an objective standard of what a reasonable practitioner was required to do, irrespective of intent. If the government only had to prove one of two prongs, "no legitimate medical purpose" or "outside the course/scope," and one of those two prongs did not require proof of intent, it placed defendants at an enormous disadvantage and allowed the government to secure convictions without proving scienter. Those days are gone now, since the Court made it crystal clear that the Constitution requires the government to prove knowledge or intent on the part of the doctor that he or she was prescribing/dispensing drugs in an unauthorized manner. The formulation being most often used, taken from a passage in Ruan/Kahn which parroted the appropriate federal regulation, is that a health care professional acts in an authorized manner when he or she acts in the "usual course of professional practice for a legitimate medical purpose." Juries are not being told, except in one case, that proof of either/or will suffice. And that case resulted in an acquittal. Of course there is ample time for one of the circuits to screw things up.

(wisenberg)

U.S. v. Jessica Joyce Spayd: Another Faulty Post-Ruan Jury Instruction.

What is particularly galling about the offense instructions given to the jury in United States v. Spayd, a case tried in the United States District Court for the District of Alaska in October 2022, is not merely that the judge equated the terms "legitimate medical purpose" and "usual course of medical practice" with "a standard of medical practice generally recognized and accepted in the country." It is that he did so in violation of clear 9th Circuit precedent. The Ninth Circuit has long held that a physician defendant cannot be convicted of unlawful distribution merely by showing that he or she intentionally violated a standard of care or intentionally committed malpractice. The case was  United States v. Feingold, 494 F.3d 1001 (9th Cir. 2006), in which the court stated that, "our holding is consistent with the law in several of our sister circuits, which have emphasized that the standard for criminal liability under §841(a) requires more than proof of a doctor's intentional failure to adhere to the standard of care." I will have more to say on this issue in future posts. Attached below are the full jury instructions and the separate offense instructions in Spayd.

Jessica Spayd Jury Instructions Jessica Spayd Offense Instructions  

(wisenberg)

Ruan and Kahn on Remand: Supplemental Briefs and Reply Briefs

Last June, in the consolidated cases of Ruan v. United States and Kahn v. United States, the U.S. Supreme Court considered the mens rea required to convict a physician charged with illegal distribution of narcotics under the Controlled Substances Act. The Court held that: "After a defendant produces evidence that he or she was authorized to dispense controlled substances, the Government must prove beyond a reasonable doubt that the defendant knew that he or she was acting in an unauthorized manner, or intended to do so."  A health care professional acts in an authorized manner under statute's controlling regulation when he or she acts in the "usual course of professional practice for a legitimate medical purpose." The vote was 9-0 on the need to reverse the judgments of the 11th Circuit (in Ruan) and the 10th Circuit (in Kahn), because both courts "evaluated the jury instructions under an incorrect understanding of [Title 18 U.S. Code] §841's scienter requirements," but the vote was 6-3 on the majority's specific holding. Justice Alito, joined by Justice Thomas and, far the most part, Justice Barrett, concurred in the result only. They did not join the majority's holding that, once the defendant meets the burden of producing any evidence that he or she was authorized to write prescriptions, the burden of proving beyond a reasonable doubt that the defendant intended to act, or knew he or she was acting, "in an unauthorized manner" falls on the government. But all nine Justices agreed that at least a portion of the jury instructions in each trial were defective because they injected objective reasonableness requirements into their good faith definitions. The Court sent the cases back to their respective circuits to determine, under the correct scienter requirements, whether: 1) the offense instructions as a whole were correct as a matter of law, and 2) whether any error in the instructions was harmless.

The supplemental briefs and replies have now been filed in each case, and are attached below. In Ruan, the harmless error analysis is complicated by the defendant's conviction on counts other than illegal distribution. In Kahn, a key focus of the government and defense briefs is the difference, if any, between knowingly or intentionally acting in an unauthorized manner (that is, outside the usual course of professional practice without a legitimate medical purpose) and knowingly or intentionally acting outside or beneath the relevant standard of care. The government maintains that there is no difference between the two concepts, which is an extremely doubtful position in light of the language and reasoning of both the majority and concurring opinions. This issue is really the elephant in the room in the post-Ruan/Kahn world. The Supreme Court originally granted certiorari to resolve a circuit split, but a split still exists, because some circuit courts have long approved instructions equating standard of care with authorized practice, while others have held that an intentional violation of the standard of care is not the same as acting with no legitimate medical purpose outside the scope of a medical practice. Attached below are the briefs on remand in Ruan and Kahn.

Shakeel Kahn's Supplemental Brief on Remand U.S. v. Shakeel Kahn-Government's Supplemental Brief on Remand U.S. v. Shakeel Kahn-Appellant's Supplemental Reply Brief Ruan Supplemental Brief on Remand Ruan and Couch Supplemental Brief of Appellee United States  Ruan CA11 Supplemental Reply Brief on Remand (10.13 final)  

(wisenberg)

FTX Race to the Courthouse

US Attorney Damian Williams, of the US Attorneys Office for the Southern District of NY announced (via a video on  Twitter) that they had filed charges against Caroline Ellison, former CEO of Alameda Reasearch,  and Gary Wang, co-founder of FTX, and that both had pled guilty and were cooperating with the government.

Now that was quick.  And it looks like Samuel Bankman-Fried is first on his way back having agreed to extradition. The question remains as to whether he will take a quick plea and cooperate, or proceed to challenge the government's case against him, a case that may have just gotten a bit stronger. 

But there is an unknown here that also remains to be seen.  Who will everyone be cooperating against? Is this limited to FTX, or will this extend beyond this company. 

One thing is certain - Congress needs to move just as quickly in cleaning up legislation to assure that investors are properly protected. 

See also Anat Beck's piece here.

(esp)

Indictment Against Samuel Bankman-Fried

The Indictment of Samuel Bankman- Fried is straightforward using generic fraud and conspiracy statutes, as well as some more specific statutes in the charges.  (See Indictment here). 

Count One - Wire Fraud on Customers  (18 USC 1349)

Count Two - Wire Fraud on Customers (18 USC 1343)

Count Three - Conspiracy to Commit Wire Fraud on Lenders (18 USC 1349)

Count Four - Wire Fraud on Lenders (18 USC 1343)

Count Five - Conspiracy to Commit Commodities Fraud (18 USC 371)

Count Six -Conspiracy to Commit Securities Fraud (18 USC 371)

Count Seven - Conspiracy to Commit Money Laundering (18 USC 1956(h))

Count Eight - Conspiracy to Defraud the United States and Violate the Campaign Finance Laws (18 USC 371)

It is Count Eight that may offer some interesting information for the government. The DOJ Press Release states in part:

U.S. Attorney Damian Williams said: “One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors. Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”

The Press Release, of course, also notes that "[t]he allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty." 

(esp) 

Trump v. U.S. - Special Master Not Here

The 11th Circuit issued an opinion  here in the appeal of Trump v. United States looking at the question of whether "the district court had jurisdiction to block the United States from using lawfully seized records in a criminal investigation."  It all came down to whether the district court even had jurisdiction to hear this case.  The district court had put in a special master, in a case that seemed an odd recipient of such a process.

Special masters are important when there is a need to protect attorney-client privileged material, especially when the recipient of the search is a criminal defense attorney.  (see here)  But that was not the issue here, and more importantly, selecting a court to hear this case was unusual, and attempting to use an equitable remedy argument proved even more problematic for the former president.  The 11th Circuit was not about to tolerate the use of equitable jurisdiction for a search warrant.  The court stated:

The law is clear. We cannot write a rule that allows any subject of a search warrant to block government investigations after the execution of the warrant. Nor can we write a rule that allows only former presidents to do so. Either approach would be a radical reordering of our caselaw limiting the federal courts’ involvement in criminal investigations. And both would violate bedrock separation-of-powers limitations. Accordingly, we agree with the government that the district court improperly exercised equitable jurisdiction, and that dismissal of the entire proceeding is required. 

Special masters are important when a criminal defense attorney has his or her law office searched.  But this is not that case.  More importantly, just selecting a court of your choice to hear whether a special master should be appointed is a problem. And trying to use an equitable remedy to stop a criminal investigation is not going to happen. 

(esp)

U.S. v. Cristobal: Another Imperfect Post-Ruan Jury Instruction

We are continuing to witness inconsistent jury charges in the wake of the Supreme Court's groundbreaking decision late last term in Ruan v. United States. In Ruan, the Court made it clear that a health care professional cannot be convicted of illegal distribution of narcotics unless the government proves beyond a reasonable doubt that he intended to prescribe, or knew he was prescribing, narcotic drugs without "a legitimate medical  purpose...in the usual course of his professional practice." But the Court did not define "legitimate medical purpose" or "usual course of professional practice."

In United States v. Cristobal, which went to the jury on September 7, 2022, Judge Katherine Polk Failla, United States District Court Judge for the Southern District of New York, informed the jury that, "[t]he terms 'legitimate medical purpose' and 'usual course of of professional practice' means acting in accordance with a standard of medical practice generally recognized and accepted in the State of New York." This is inconsistent with several recent post-Ruan jury instructions in other federal districts, which explicitly inform the jury that there is no accepted definition of "legitimate medical purpose" and "usual course of professional practice."  For example, in United States v. Rahbarvafaei, tried in the Central District of California, the jury was instructed that, "[t]here are no specific guidelines in the law defining what is the usual course of professional practice or defining a legitimate medical purpose." Rahbarvafaei was acquitted on all counts. Cristobal, a licensed nurse practitioner, was convicted on three of eight counts.

The Cristobal offense instruction tells the jury in effect that an intentional violation of the standard of care in the prescribing of drugs is a criminal offense. In the Ninth Circuit, however, it has long been the law that an intentional violation of the standard of care is not alone enough to convict a physician defendant in a narcotics distribution case. 

Stay tuned. Undoubtedly, more inconsistences and confusion await us and the Supreme Court will need to step in again soon to provide needed clarifiaction.

(wisenberg)

More on Post-Ruan Jury Charges: Outside the Usual Course of Professional Practice Does NOT Equal Standard of Care. It DOES Equal Drug Pusher

As federal trial courts and litigators struggle with how to construct jury charges in light of the U.S. Supreme Court's decision late last term in Ruan v. U.S. and Kahn v. U.S. (hereinafter Ruan), it is paramount that white collar criminal defense practitioners resist all efforts by courts and prosecutors to tie, within the jury instructions, the concept of "course [or scope] of professional practice" to the "standard of care" in the medical community.  But old habits die hard, even when the Supreme Court sends a clear signal that most lower courts have been getting things wrong for several years. So in some recent post-Ruan offense instructions, district courts have kept in references to the standard of care, but tried to limit the effect of such references. In my last post, I criticized the appalling offense instruction in United States v. Romano and praised the court's instruction in United States v. Rahbarvafaei. In the latter case, the trial court told the jury it could "consider the standards to which medical professionals generally hold themselves, including standards of care among medical professionals." But the court then added this proviso: "However, any finding of criminal liability must ultimately depend on the mental sate of the defendant herself, not what a hypothetical 'reasonable' medical practitioner would do or intend. Because of the need for the government to prove the defendant's criminal intent, this case is different from a medical malpractice case." The better practice is to eliminate all references to the standard of care in offense instructions. Courts also need to make it pellucidly clear to juries that a doctor only acts outside the scope of his or her practice when he or she in effect ceases to act as a doctor. U.S. District Court Judge Casey Rodgers, in the Northern District of Florida, recently did just this in her jury charge in United States v. Given, although Judge Rodgers also left in language that was explicitly criticized in Ruan. Judge Rodgers told the jury that, "in order for a physician to violate the Controlled Substances Act, he must knowingly issue a prescription for a controlled substance outside the course of medical practice or for other than a legitimate medical purpose, which means he abandoned his role as an authorized physician." (emphasis added). That's pretty strong stuff for the defense and is in accord with the view Judge Rodgers expressed, during the Rule 29 argument, that a doctor is only operating outside the scope of his practice when he acts as a drug pusher. Here are the U.S. v. Michael Given Offense Instructions and the GIVEN.RULE29ARGUMENTTRANSCRIPT.

(wisenberg)

A Post-Ruan Problem: Jury Instructions Tying "Usual Course of Medical Practice for a Legitimate Medical Purpose" to Standard of Care

In a recent post, I  briefly discussed the offense instruction in U.S. v. Romano--a post-Ruan illegal distribution case out of the Southern District of Ohio. I noted that the jury charge in Romano, "tied the concept of 'usual course of professional practice for a legitimate medical purpose'  to a 'standard of medical practice generally recognized and accepted in the State of Ohio.'"  I think this type of instruction, often used in the pre-Ruan era, should be considered improper in post-Ruan times. Although Ruan left many questions unsettled for now, the Supreme Court made it clear that no objective "reasonable physician" standard can constitutionally be superimposed onto the government's obligation to prove scienter beyond a reasonable doubt. Justice Breyer did say that criteria such as  "legitimate medical medical purpose" and  "usual course course of professional practice" were objective in nature and that the more unreasonable the defendant's beliefs and misunderstandings were, "especially as measured against objective criteria," the more likely it is that the jury will find that a defendant knew his conduct was unauthorized. But the Romano instruction risks having the jury equate "standard of care," a staple of civil malpractice cases, to "legitimate medical purpose" and "usual course of professional practice." Criminal defense practitioners in illegal distribution prosecutions of physicians and other medical professionals are all too familiar with government experts who are willing to testify that this or that particular practice or procedure by the defendant physician did not comport with a state or national standard of care. It is one thing to allow testimony of this type in order for the government to show how far a particular defendant deviated from the broad consensus of medical opinion and to further show how this deviation, in combination with other facts in the case, is circumstantial evidence of scienter. It is something different I believe to import this unexplained into the offense instruction.  The Ninth Circuit has long held that a physician defendant cannot be convicted of unlawful distribution merely by showing that he or she intentionally violated a standard of care. The government must also show that he or she acted without a legitimate medical purpose. I realize that the distinctions being discussed here can be extremely subtle in nature, but that is exactly why they can lead to jury confusion. For this reason, I much prefer the U.S. v. Saloumeh Rahbarvafaei Offense Instruction which referenced standards of care, but did so in the following context: "There are no specific guidelines in the law defining what is the usual course of professional practice or defining a legitimate medical purpose. Therefore, in determining whether the defendant acted outside the usual course of professional practice, you may consider the standards to which medical professionals generally hold themselves, including standards of care among medical professionals. However, any finding of criminal liability must ultimately depend on the mental sate of the defendant herself, not what a hypothetical 'reasonable' medical practitioner would do or intend. Because of the need for the government to prove the defendant's criminal intent, this case is different from a medical malpractice case."

(wisenberg)

Another Post-Ruan Acquittal: United States v. Saloumeh Rahbarvafaei

Congratulations are in order for Licensed Physician's Assistant Saloumeh Rahbarvafaei and her defense attorneys, Federal Public Defenders Erin Murphy and Michael Driscoll, Jr. Rahbarvafaei was acquitted in late August on all eight charged counts of illegal distribution of a narcotic controlled substance. The case was out of the Central District of California. Michael Fitzgerald was the judge. This is the third total victory for a defendant health care professional that I am aware of since Ruan v. United States was handed down by the U.S. Supreme Court on June 27, 2022. Here is the U.S. v. Saloumeh Rahbarvafaei Offense Instruction on the elements of illegal distribution. It is the best one I have seen so far in the post-Ruan era. Keep in mind that 9th Circuit jury instructions in this area were already among the most defense friendly in the country. More to come on jury instruction permutations, post-Ruan, in future installments.

(wisenberg)

Post-Ruan Jury Instructions: A Mixed Bag

Three recent post-Ruan cases, two resulting in acquittals and one in a guilty verdict, yielded three different offense instructions for illegal distribution of a controlled substance by a physician.

In United States v. Bothra, et al., which went to the jury on the morning that the consolidated cases of Ruan v. United States and Kahn v. United States (hereinafter Ruan) were handed down by the U.S. Supreme Court, the trial judge used a simple one page instruction, closely hewing to the bare bones holding of the Supreme Court. There was no good faith defense instruction (over defense objection) and no deliberate ignorance instruction. Here is the United States v. Bothra et al. Jury Instruction on Illegal Distribution. All Defendants were acquitted on all charges.

In United States v. Given, the trial court gave a lengthier and more traditional instruction, requested by the defense and agreed to by the government. The lone Defendant was acquitted on all counts. Although the Given jury instructions were obviously influenced by Ruan, the trial court surprisingly included some of the very language invalidated criticized and questioned by the U.S. Supreme Court in Ruan. Here is the U.S. v. Michael Given Offense Instructions. The trial court declined the government's request to give a deliberate ignorance instruction.

In United States v. Romano, the trial court tied the concept of "usual course of professional practice for a legitimate medical purpose"  to a "standard of medical practice generally recognized and accepted in the State of Ohio." The court gave a deliberate ignorance instruction in tandem with a broad instruction on inferring intent. The Defendant was convicted on several counts. Here is the U.S. v. Romano Jury Instruction--Definition of the Crime. Here are the U.S. v. Romano Jury Instructions--Inferring Required Mental State and Deliberate Ignorance.

Clearly there will be quite a few kinks to work out in post-Ruan  jury instructions until a coherent pattern emerges.

(wisenberg)

Post-Ruan Acquittals and Dismissals

Last June, in the consolidated cases of Ruan v. United States and Kahn v. United States (hereinafter Ruan) the U.S. Supreme Court considered the mens rea required to convict a physician charged with illegal distribution of narcotics under the Controlled Substances Act. The Court held as follows: "After a defendant produces evidence that he or she was authorized to dispense controlled substances, the Government must prove beyond a reasonable doubt that the defendant knew that he or she was acting in an unauthorized manner, or intended to do so." The stunningly broad ruling was 9-0 on the final outcome, but 6-3 on the majority's reasoning. Justice Alito, joined by Justice Thomas and, far the most part, Justice Barrett, concurred in the result only. They did not join the majority's holding that, once the defendant meets the burden of producing any evidence that he or she was authorized to write prescriptions, the burden of proving beyond a reasonable doubt that the defendant intended to act, or knew he or she was acting, "in an unauthorized manner" falls on the government. But all nine Justices agreed that at least a portion of the jury instructions in each trial were defective because they injected objective reasonableness requirements into their good faith definitions. It is too early to predict with any certainty how the case law will develop in the post-Ruan world. Never underestimate the willingness of individual U.S. Attorney offices to find ways around inconvenient Supreme Court opinions. The convictions of Dr. Ruan and Dr. Kahn were not even overturned. Instead, the appellate judgments were vacated and the cases were sent back to their respective Courts of Appeals to determine whether the faulty instructions were harmless.

But here are some recent developments. In United States v. Bothra, et al. an Eastern District of Michigan case that went to the jury the very day Ruan came out, all Defendants were acquitted on all counts, 54 in total. In U.S. v. Given, in the Northern District of Florida, the lone Defendant was acquitted on all 33 counts. It should be noted that the government's evidence in each case was weak.

In United States v. Kim, in the Western District of Oklahoma, the the court granted the government's motion to dismiss without prejudice. The government seemed to concede that, in light of Ruan, the Indictment was defective.

Finally, in United States v. Brian August, a case in which I represented the Defendant, the United States filed, and the trial court promptly granted, a Motion to Dismiss, conceding that, among other things, the case could not go forward under the Ruan standard.

While these are promising signs, the dust has not yet begun to settle on post-Ruan developments. As I will explain in subsequent posts, the Ruan opinion leaves many questions unanswered. Is a physician-Defendant entitled to a subjective good faith instruction or no good faith instruction? Does the Defendant meet his or her burden of presentation merely by showing that he/she is authorized to prescribe narcotics? Must the government prove that a physician-Defendant had no legitimate medical purpose for his/her prescription and that he/she was operating outside the usual course of his/her medical  practice or only one of these two factors? What should a proper jury instruction look like?

I will be posting more on these issues in the coming days, weeks, and months.

(wisenberg)

 

Cryptocurrency and Insider Trading

The DOJ issued a press release  -Tippee Pleads Guilty In First Ever Cryptocurrency Insider Trading Case

This is a particularly interesting case because it lets everyone know that insider trading prosecutions can be brought when the alleged scheme involves insider trading in cryptocurrency assets. 

(esp)

 

Appointment of a Special Master - Court Order in Trump Case

When the affidavit on the warrant was released, albeit redacted, it was clear that this was a situation where the government asked for materials for the National Archives and Records Administration (NARA) but received only some of the materials, and that a search was conducted to get the rest of the materials, although it remains to be seen whether they obtained everything initially requested. The Search Warrant referenced the Obstruction of Justice statute 18 U.S.C. 1519. (see here).  As a backdrop to this search was the fact that there exists a Presidental Records Act that controls Presidential records. (44 U.S.C. 2201 et. seq.) So irrespective of the former President's claim that he declassified these documents (a mindboggling admission), they were still subject to be returned to the National Archives. (see here).

Now we see a  court discussion as to whether these documents that he allegedly declassified are subject to executive privilege. Despite President Trump no longer being the executive, the court leaves that issue open for further legal argument (see here). 

It is one thing to find that alleged attorney-client privilege material may be interspersed with folders marked classified information and/or personal clothing, and appoint a special master to keep the attorney-client material from anyone's view. Appointing a special master for potential attorney-client privileged material, whether it be the lawyer or the client is a better way to review attorney-client privileged material than a government filter or taint team. (see here)

It is hard to imagine that someone would have classified material, and would nevertheless allow that material to be left in an unsecured location amongst other material.  We are not dealing with a teenager needing to clean their room - but rather the former top head of this country possessing what might be highly sensitive information. And it is good to see the judge allowing the classification review and/or intelligence assessment by the Office of the Director of National Intelligence to continue, not impeded by her restraint of the government using other materials. 

But the executive privilege claim discussed by the court is confusing me. On one hand the court is saying there might be  privileged material and on the other hand former President Trump has stated that he declassified the material. Clearly, these are two different concepts, but is it privileged material or has it been declassified and should it be open to the public.  If it is privileged material that was not turned over when the first request was made, then the Trump team should have been in court arguing to retain information as privileged material well before the search.  If it was all declassified than why was it not turned over to the Archives upon the government's request. Will the former president really argue that all this alleged declassified material is now material subject to an executive privilege? And irrespective of whether it was declassified or it is executive privileged material, why was it not turned over under NARA.

(esp)