Saturday, March 26, 2022
Many accused of crimes do not take the risk of going to trial - they take a plea agreement. Our legal system has become more and more a system of pleas, with fewer trials, especially in the white collar area. But occasionally someone takes that risk, and is found not guilty. That happened this week in the case of a former Boeing pilot accused of four counts of wire fraud. Hats off to attorneys David Gerger and Jeff Kearney. See WSJ, here, NYTimes here
Friday, March 18, 2022
AG Garland announced a new policy this week in a press release titled, Attorney General Merrick B. Garland Issues New FOIA Guidelines to Favor Disclosure and Transparency . The actual policy that favors transparency in FOIA requests is located here. The new guidance says that there is a presumption of openness.
Years back the National Association of Criminal Defense Lawyers (NACDL) filed a FOIA request for DOJ's Blue Book on the discovery protocols used by the government. The DOJ argued the book was work-product and only a small portion was released following a lawsuit. See Louis Virelli & Ellen S. Podgor, Secret Policies, 2019 Illinois Law Rev. 463 (2019). Perhaps now is a good time for the government to think about transparency in discovery practices so that fewer discovery violations occur in criminal cases.
Wednesday, March 16, 2022
Here is a transcript of the March 1, 2022, U.S. Supreme Court Argument in Ruan and Kahn. Ruan v. United States and Kahn v. United States are consolidated cases involving the kind of good faith instruction, if any, required when physicians are indicted and tried for illegally dispensing controlled substances. We have previously posted about these cases here, here, and here. More to come soon on these cases and the issues surrounding them.
Thursday, March 3, 2022
Monday, February 21, 2022
We have posted previously, here and here, about the anticipated U.S. Supreme Court decision in the consolidated cases of Ruan v. United States and Kahn v. United States. The Supreme Court granted certiorari and consolidated the two cases last November. Oral argument is set for March 1, 2022. The cases involve the appropriate jury instruction to be given, and the required proof of scienter, when the government prosecutes pain management physicians for illegal distribution of Schedule II controlled substances under 21 U.S.C. § 841(a)(1). More precisely, as pointed out in the Joint Motion of Petitioners Ruan and Kahn for Divided Argument, the case "presents the question whether, and to what extent, a physician may assert a good faith defense to charges under the Controlled Substances Act (CSA)." There is a longstanding circuit split regarding the type of good faith instruction a defendant is entitled to in this type of case. Is the defendant entitled to the traditional subjective good faith instruction or can the government impose an objective component to good faith, such that the charged physician must act in accordance with what "a reasonable physician should believe" to be proper medical practice? The Petitioners wisely sought to divide their arguments, because the respective good faith instructions given in their trials differed and because they have different views on whether the two prongs of 21 C.F.R. § 1306.04(a) should be read and proven in the conjunctive or disjunctive--that is, whether the government must prove both that a physician lacked a legitimate medical purpose and was acting outside the usual course of professional practice, or whether the government must prove just one of those prongs.
The larger issue lurking behind theses cases, which may or not be fully addressed by the Supreme Court's anticipated decision, is that pain management physicians are routinely convicted, at least in objective good faith circuits, under what amounts to a malpractice standard. Government experts testify that defendant physicians failed to meet the standard of care and missed/ignored various red flags. The "usual course of professional practice" is confused with the "standard of care" and an "objective" good faith instruction often operates as the coup de grace against the charged physician.
Here is the Ruan v. U.S. and Kahn v. United States--Brief For the United States, filed on January 19.
Here is the Xiulu Ruan Reply Brief, filed last week.
Here is the Shakeel Kahn Reply Brief, also filed last week.
Saturday, February 19, 2022
The conference will include topics such as white collar crime investigations, insider trading, prosecution and punishment of offenders, discovery issues, and ethical considerations that surround the white collar criminal practice. See the full program and speakers at these links -
Anticipated Academic Panelists:
- Professor Katrice Bridges Copeland
- Professor Lucian Dervan
- Professor Mihailis Diamantis
- Professor W. Robert Thomas
- Professor Joan Heminway
- Professor David Kwok
- Professor Tracey Maclin
- Professor Jennifer Taub
- Professor Pedro Gerson
- Professor Joseph Morrissey
- Professor Karen Woody
Anticipated Practitioner Panelists:
- Hank Asbill
- Simon A. Latcovich
- Drew Findling
- Marissa Goldberg
- Ian Friedman
- Erik Matheney
- Jason Mehta
- Amy Richardson
- Addy Schmitt
- Ellen Brotman
- Katherine Yanes
Friday, February 18, 2022
Here is the Sussman Motion to Dismiss for Failure to State an Offense, filed in Special Counsel John Durham's 18 U.S.C. Section 1001 false statement prosecution against former Perkins Coie attorney Michael Sussman. Sussman's argument is that even if the facts laid out in Durham's Indictment are true, they fail, as a matter of law, to allege/establish the essential Section 1001 element of materiality or to establish a sufficient nexus between Sussman's alleged falsehood and the agency (FBI) decision purportedly capable of being affected. Keep in mind that Sussman's alleged false statement to FBI General Counsel James Baker was that he was not acting on behalf of any client in reporting the Alfa Bank tip to Baker, when, in truth and in fact, Sussman was there representing and acting on behalf of Tech-Executive 1 and the Clinton Campaign. The materiality portion of the Sussman Indictment has always struck me as weak, but very little is required of the government in order for it to prove materiality in a Section 1001 prosecution. Sussman's real problem in winning on this motion is decades of case law holding that an indictment setting out the statutory elements of the offense, along with minimal factual allegations, is sufficient to allege an offense as a matter of law. In other words, the defendant is not allowed to go beyond the indictment's allegations in litigating whether it alleges an offense. There appears to be no recognition of this case law in the Sussman brief. Durham was not required to put much meat on the skeletal elements of the offense. But he chose to do so, presenting a 27-page speaking indictment to the grand jury. There is some scattered authority for the proposition that an indictment setting out in detail what appear to be the full and undisputed facts behind the offense, in addition to the statutory elements, can be defeated by accepting those facts as true and arguing that the do not constitute the purported offense being charged. See for example, U.S. v. Ali, 557 F.3d 715, 719-20 (6th Cir. 2009). That's what Sussman is up to here. Durham's response will surely be that he has set out the required statutory elements plus additional contextual detail and that the Government must be allowed to show its full factual case to the jury in order to prove why, under said factual particulars, Sussman's alleged lie was material.
Monday, February 7, 2022
What’s in a name? Several of the individuals indicted in connection with the January 6, 2021, assault on the U.S. Capitol have been charged under Title 18, United States Code, Section 1512(c)(2). Subsection (c) of 18 U.S.C. §1512 seeks to punish: “Whoever corruptly--(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or (2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so.” 18 U.S.C. §1515 supplies definitions for some of the terms used in §1512 and defines “official proceeding” to include, among other things, “a proceeding before the Congress.” Many of the motions to dismiss filed by January 6 defendants, and judicial opinions denying these motions, center around whether §1512(c)(2) was meant to be confined to proceedings that are quasi-judicial or evidentiary in nature, even if the proceedings take place in Congress. I previously posted three of these judicial opinions. That is not my focus here.
18 U.S.C §1512, a lengthy statute with several subsections, has a title as well. The official title is: “Tampering with a witness, victim, or an informant.” That is the only title the statute has. None of the subsections of §1512 contains an additional or separate subtitle. Note, however, that none of the persons charged under 18 U.S.C. §1512(c)(2) has been literally charged in his or her Indictment, or in any press coverage that I have seen, with, “tampering with a witness, victim, or an informant,’ which, again, is the only title of §1512. To take one example, in U.S. v. Nordean et al., the defendants are charged in the First Superseding Indictment with “Obstruction of an Official Proceeding and Aiding and Abetting.” This makes sense. The facts alleged against the defendants appear to align with the literal language of §1512(c)(2) and do not involve witness tampering.
Fast forward to the recent indictment of Oath Keeper Elmer Steward Rhodes III and others for “Seditious conspiracy,” pursuant to 18 U.S.C. § 2384. The defendants are also charged with violating several other statutes, including 18 U.S.C. §1512(c)(2). While 18 U.S.C. § 2384, unlike §1512(c)(2), does not have separately numbered subsections, it clearly sets out several different ways in which the crime can be committed. For example, one cannot “conspire to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them.” I believe something like this formulation is what most people think of when they think of sedition. But Rhodes and his Oath Keepers were not charged under that "overthrow the Government" portion of the statute. They were charged with conspiring “by force to prevent, hinder, and delay the execution of any law of the United States.” (The laws allegedly being hindered were the Electoral Count Act and the Twelfth and Twentieth Amendments to the U.S. Constitution.) The caption in the Indictment could have set the charge out in this fashion, as a “conspiracy to by force prevent, hinder, and delay” particular laws of the United States, with a citation to 18 U.S.C. §2384. That is not what Department of Justice officials decided to do, however. They captioned the charge as “seditious conspiracy.” There was nothing improper about their decision, just as there was nothing improper about their decision to list §1512(c)(2) in the caption of Nordean as “obstruction of an official proceeding” rather than “witness-tampering.”
But the effect in the wider media culture was predictable. Several pro-Trump television commentators had been making the point that none of the January 6 defendants were seditionists, because none had been charged with seditious conspiracy. They could not say this anymore in light of the Rhodes Indictment and their prior comments were thrown back in their faces by progressive commentators. So be it. That’s politics. But, at least with respect to the indicted January 6 rioters, conspiring by force to prevent, hinder, and delay the execution of the Electoral Count Act (“seditious conspiracy”) is not substantially different than corruptly obstructing or conspiring to corruptly obstruct the very Congressional proceeding in which the Electoral Count Act is being executed. They are both serious charges that should be prosecuted vigorously if the facts so warrant. And if any Congressperson, Executive Branch official, or podcast host aided and abetted or joined a conspiracy to violate either statute, under traditional criminal law principles, he or she should be prosecuted as well.
Sloppy language, however, invites sloppy thinking and prosecuting someone for aiding and abetting a violent mob intent on forcefully stopping a critical Congressional proceeding or the execution of a statute, is quite different than prosecuting someone for seditious conspiracy because he told a crowd that the election was stolen, invited them to peacefully protest the vote count, or tried to convince Mike Pence that he had the power to refuse to certify certain slates of electors. (I wrote about John Eastman's potential criminal exposure, in the context of the Fifth Amendment's Privilege Against Self-Incrimination, here.) Likewise, prosecuting anyone for delaying the vote count by using the procedures set out in the Electoral Count Act, is without more, doomed to fail under rather basic constitutional and criminal law tests. The devil is always in the details of the purportedly criminal acts under examination.
The people intent on federally prosecuting Trump and his cohorts for the events on and surrounding January 6, 2021, need to think small and in terms of traditional criminal law principles. We witnessed a riot. We witnessed criminal assaults. We witnessed people invading Congressional offices and threatening to “Hang Mike Pence.” Some of the people who committed these acts were attempting to prevent the peaceful transfer of power to Joe Biden. There are statutes in place that appear to criminalize this conduct. The quest to use the criminal law to “go after the higher-ups” should focus on who, if anybody, aided, abetted, counseled, commanded, induced or procured the commission of these specific criminal offenses--not on people engaged in protected First Amendment political activity. In the words of the standard pattern aiding and abetting instruction, “whoever intentionally associated himself in some way with the crime and intentionally participated in it as he would in something he wished to bring about,” is punishable as a principal. My guess is that some pretty well-known people are sleeping uneasily these days. My further guess, and it is no more than a guess, is that the DOJ has been looking at these people for some time. But I seriously doubt, based on currently known information, it will go much beyond these folks.
Thursday, January 27, 2022
Stetson Business Law Review Symposium: White Collar Crime: A Look into The Past, Present, and Future
The conference will include topics such as white collar crime investigations, insider trading, prosecution and punishment of offenders, discovery issues, and ethical considerations that surround the white collar criminal practice. See the full program and speakers at these links -
Tuesday, January 18, 2022
Peter Henning was an incredible writer, scholar, and teacher. Most of all to me - he was a good friend.
In November of 2004, Peter Henning and I started this WhiteCollarCrimeProfBlog. He moved on to later write the White Collar Watch for the NYTimes, but we continued to co-author many a book on criminal law, criminal procedure, and white collar crime. Whether it was a criminal law casebook, a criminal procedure treatise, or the hornbook on white collar crime, Peter was amazing. He understood the nuances in cases, the rationales of the prosecutors, and had a gift of writing quickly in highly complex areas of the law.
On the rules of law he and I seldom disagreed. On whether the prosecution or defense had the better argument, however, we often differed. When that happened, our rule was simple - let the reader hear both sides, but always make sure the representations were accurate.
I will miss Peter's humor, his writing, and his friendship. His family was his everything to him, so my heart goes out to them.
Wayne State Law School Announcement - here
Monday, January 17, 2022
Last week in United States v. Pursley, the Fifth Circuit reversed and remanded all counts of conviction against appellant Jack Pursley. Appellant had been charged with a Klein conspiracy and three tax evasion counts. The convictions were reversed because: 1) the trial court refused to give a requested instruction requiring the jury to find that the charged offenses were committed within the 6 year statute of limitations period; and 2) the trial court neglected to make a ruling as to how long the statute of limitations had been suspended pursuant to 18 U.S.C. Section 3292 (suspension of limitations to obtain foreign evidence). Under Section 3292 (b), "a period of suspension under this section shall begin on the date on which the official request is made and end on the date on which the foreign court or authority takes final action on the request." According to the Fifth Circuit, the trial court must make the factual determination as to the date on which the foreign court or authority took final action on the request for evidence, assuming that there is a dispute as to this issue, but failed to do so here. It is often not at all clear when such final actions by foreign authorities take place. Sometimes the foreign authority will state that it has taken final action, but continue to send documents after this date. Sometimes the foreign authority will not indicate whether it is taking its final action. The case has a good discussion of statute of limitations issues in tax evasion cases.
Monday, January 10, 2022
Last November, guest bloggers Eugene Gorokhov and Jonathan Knowles posted here about the Supreme Court's granting of certiorari in Ruan v. United States and Kahn v. United States, two federal Circuit Court of Appeals decisions that effectively eviscerate the scienter requirement in criminal cases charging physicians with illegal distribution of Schedule II drugs. There is a longstanding split between those federal circuits that have criminalized malpractice and those requiring the government to actually prove beyond a reasonable doubt that physician defendants had a subjective intent to prescribe drugs for no legitimate medical purpose and outside the scope of their professional practices. Other circuits fall in-between, allowing hybrid jury instructions with objective and subjective intent elements. Amicus Briefs and the Petitioners' Briefs were filed in late December. I am posting some of them here. The smart money is on the Court substantially clarifying and strengthening the government's obligation to prove knowing or intentional efforts by physicians to prescribe outside the scope of professional practice and without a legitimate medical purpose.
Tuesday, January 4, 2022
The speculation now begins about where Elizabeth Homes will serve her sentence, what her sentence will be, and how "cushy" she will find things in confinement. The Bloomberg Law story is here. Her sentence is likely to be more substantial than the three years being predicted by anonymous experts in this story. Nevertheless, as a first-time offender with no violent past and a non-violent offense of conviction, she is very likely going to a minimum security camp unless her sentence is longer than 10 years. That's the way the system works.
Monday, January 3, 2022
Here is the CNN story. The jury acquitted Holmes, the former CEO of blood-testing startup Theranos, on all 4 counts related to the alleged defrauding of patients. She was convicted on 4 counts related to defrauding of investors, including a conspiracy count. The jury hung on 3 additional investor fraud counts. There will be no retrial of the counts that the jury could not reach agreement on, because Holmes' ultimate sentence would not be affected by a guilty verdict on those counts. Moreover, under current Supreme Court case law, the trial court can (unfortunately) consider the government's evidence against Holmes on both the acquitted and hung counts in determining her sentence. The SEC long ago settled its case against Holmes without demanding an admission of wrongdoing on her part. Had she made such an admission there would have been no need for a criminal trial.
Sunday, January 2, 2022
Congratulations are in order for Bob Trout and Noah Cherry of DC's Schertler Onorato Mead & Sears and to Dan Goldstein on the 12-28-21 federal district court acquittal of their client, longtime Baltimore criminal defense attorney Joshua Treem. Treem had been accused of conspiracy to obstruct an official proceeding and related charges in connection with his representation of Baltimore attorney Kenneth Ravenell in a criminal case. Also acquitted of all charges was private investigator Sean Gordon who was the private investigator working with Treem on the Ravenell matter. Gordon was represented by Geremy Kamens and Rebecca LeGrand. Congratulations to them as well. Here is the Baltimore Sun's story on the acquittal. According to Trout: "The prosecution of Josh Treem was an utter failure of judgment by the U.S. Attorney’s Office in Maryland." Kamens commented that, "these people were defending a client; they were not committing a crime." Here are the respective judgments of acquittal: Joshua Treem Judgment of Acquittal and Sean Gordon Judgment of Acquittal.
Saturday, January 1, 2022
Three federal district court opinions on the meaning of "corruptly" obstructing, influencing, or impeding an official proceeding, under 18 U.S.C. Section 1512 (c)(2), have been issued in the past month. Each case is from a different federal district judge in the District of Columbia. Although each case pertains to the actions of alleged participants in the January 6, 2021 Capitol Riot, the cases also have significant implications for future white collar prosecutions--implications that should benefit white collar defendants. Here are the opinions in U.S. v. Nordean, U.S. v. Caldwell, and U.S. v. Sandlin. More to come on this issue in the next week.
Tuesday, December 7, 2021
Here is the Eastman Letter to January 6th Select Committee Chairman Bennie G. Thompson from Eastman's attorney Charles Burnham, invoking Eastman's Fifth Amendment Privilege Against Self-Incrimination and raising other issues as well. The letter is in response to a Committee subpoena for Eastman's testimony and documents. Burnham's letter leaves open the question of whether Eastman will appear at all, although that is clearly the proper course. As I noted here, in order to successfully invoke the Fifth Amendment Privilege Against Self-Incrimination the client must appear and invoke it on a question by question basis. This will be easy for Eastman to do, as Burnham's letter makes clear, because so many public figures and office-holders have expressed their belief that he has serious criminal exposure. Federal judges, most recently U.S. District Judge Amy Berman Jackson, have suggested that January 6 rally speakers have exposure as well. Chairman Thompson wants to "test" the assertions of witnesses invoking the privilege and Norm Eisen, E. Danya Perry, and Joshua Perry argue here in the Washington post that he should vigorously do so with witnesses such as Eastman and former DOJ Civil Division Chief Jeffrey Clark. But a Fifth Amendment assertion by either man is a no-brainer. All Burnham has to do is point to the public record, as he amply does in his letter. Almost any question after name, address, age, and current occupation could furnish a link in a potentially incriminatory chain. The Committee also demanded from Eastman a broad array of documents, and Burnham has invoked the Fifth Amendment "Act of Production" Privilege, a part of the Privilege Against Self-Incrimination, with respect to these documentary demands. Eastman arguably does not even have to provide a Privilege Log, because the very act of listing the documents might bring into play the "foregone conclusion" exception to the Act of Production Privilege. Of course, the Committee may be able demonstrate that the existence and possession of such documents by Eastman is a "foregone conclusion" based on testimony and documents it has received from other witnesses. Stay tuned.
Sunday, December 5, 2021
No One Will Be Prosecuted for Plausibly Invoking the Fifth Amendment Privilege Against Self-Incrimination at the January 6th Select Committee
Anyone who regularly practices white collar criminal defense knows how easy it is to successfully invoke the Fifth Amendment Privilege Against Self-Incrimination at the grand jury and trial stages of an investigation. Ohio v. Reiner, 532 U.S. 17 (2001) and a number of Supreme Court cases preceding it establish that the privilege protects the innocent as well as the guilty and applies to any statement even tending to incriminate the witness by furnishing "a link in the chain of evidence needed to prosecute the claimant for a...crime." Hoffman v. United States, 341 U.S. 479, 486-87 (1951). This is why, unless the Fifth Amendment invocation is obviously frivolous, prosecutors very rarely seek to challenge such an invocation in court.
The facts in Ohio v. Reiner, and how the Supreme Court applied them, show how broad the Privilege Against Self-Incrimination is. Matthew Reiner was charged with involuntary manslaughter for the death of his two-month old son Alex. Evidence established that the infant died from “shaken baby syndrome” resulting from child abuse and that the injury occurred minutes before Alex stopped breathing. Reiner was with the child during that time frame. (Evidence established that Alex’s twin brother Derek suffered injuries as well.) Reiner maintained that Alex died earlier while in the care of babysitter Susan Batt. Reiner’s experts testified that Alex may have been injured during the period that he was under Batt’s care. At trial, the State called Batt to the stand. Batt invoked her Fifth Amendment privilege against self-incrimination and refused to testify, whereupon she was given transactional immunity and ordered to testify pursuant to Ohio Rev. Code Ann. § 2945.44. Batt testified that she had only demanded immunity on the advice of counsel and had in fact done nothing wrong. She denied any involvement in Alex’s death and denied shaking him. She denied causing any of the injuries suffered by Alex or Derek. Reiner was convicted and appealed his conviction. The Supreme Court of Ohio reversed Reiner’s conviction on the ground that Batt had no valid Fifth Amendment privilege against self-incrimination. The court held that Batt’s testimony could not have incriminated her because she “denied any involvement in the abuse.” The wrongful grant of immunity “prejudiced [Reiner] because it effectively told the jury that Batt did not cause Alex’s injuries.” The United States Supreme Court reversed, reaffirming that the Fifth Amendment privilege against self-incrimination “protects the innocent as well as the guilty,” and that “the facts here are sufficient to sustain a claim of privilege.” Reiner, 121 S. Ct. at 1253.
In its per curiam opinion, the Court noted its longstanding precedent that the privilege extends not only “to answers that would in themselves support a conviction” but also to “those which would furnish a link in the chain of evidence needed to prosecute the claimant.” Quoting Hoffman, the Court stressed that a potential witness need only show “from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result.” Although the privilege extends to those witnesses who have “reasonable cause to apprehend danger from a direct answer,” rather than to those who fear a danger of “imaginary and insubstantial character,” and the inquiry on that issue is for the court, “we have never held, as the Supreme Court of Ohio did, that the privilege is unavailable to those who claim innocence. To the contrary, we have emphasized that one of the Fifth Amendment’s ‘basic functions . . . is to protect innocent men . . . who otherwise might be ensnared by ambiguous circumstances.’ Grunewald v. United States , 353 U.S. 391, 421.” (internal quotations omitted). Reiner, at 1254.
According to the Court, Batt had reasonable cause to fear danger from her truthful answers since she spent extended periods of time with Alex and his brother in the weeks prior to the discovery of their injuries and she was with Alex within one potential time frame of his death. The defense theory was that she caused the injuries and death. “In this setting it was reasonable for Batt to fear that answers to possible questions might tend to incriminate her.” Reiner, at 1255.
The January 6th Select Committee of the U.S. House of Representatives is poised to refer at least two "recalcitrant" witnesses to the Department of Justice for criminal contempt charges based in part on Fifth Amendment invocations that appear to be far from frivolous. Both former DOJ Acting Civil Division Chief Jeffrey Clark and unofficial Trump advisor John Eastman have indicated their intent to invoke the privilege. They have also raised other grounds other for refusing to appear or testify, but those grounds are not the subject of this post.
Neither Clark nor Eastman appear to have any criminal exposure connected to the January 6 assault on the U.S. Capitol. They were reportedly involved, however, in plans or efforts to convince various state and/or federal officials to take official actions with a view toward changing the results of the 2020 Presidential election. Clark reportedly pushed a plan to convince certain state officials to invalidate election results. Eastman wrote two memos explaining various scenarios under which Vice President Pence might refuse to certify the Presidential Electors from key states. He also met with Pence to discuss this topic. Numerous public commentators and/or Democratic Representatives suggested that these actions of Clark and Eastman might be violative of federal criminal law. I have seen very little information to suggest that anything approaching a crime was committed by either man, however reprehensible one believes their actions were. But my views are irrelevant for Fifth Amendment purposes. When multiple Democratic House Members are suggesting that you may have committed crimes in connection with the January 6, 2021 certification of Electoral College votes, and a House Select Committee charged with investigating January 6 demands that you testify about those acts, your decision to invoke the Fifth Amendment can hardly be described as frivolous. To make a criminal referral to DOJ under these circumstances would be appalling, and I don't see any way that AG Garland would go to the grand jury to seek an indictment. The case would be thrown out of court. Again, I am speaking only of the Fifth Amendment issue. For purposes of invoking the Fifth Amendment the witness must appear before the questioning body and cannot make a blanket invocation. The privilege must be invoked on a question by question basis.
Saturday, December 4, 2021
Man Bites Dog. Hell Freezes Over. Third Circuit Reverses Section 1001 Conviction Based on Government's Failure to Prove Materiality.
Need I say more? It is a truism that materiality is an exceedingly easy element to prove in a prosecution brought under 18 U.S.C. Section 1001. It is even easier to sustain on appeal. But in U.S. v. Joseph Johnson, the Third Circuit held that the government failed to prove materiality under 18 U.S.C. Section 1001 (a) (2), which prohibits “knowingly and willfully... mak[ing] any materially false, fictitious, or fraudulent statement or representation” in a matter within the jurisdiction of the federal government. Joseph R. Johnson was a Bill Cosby supporter who filed a fraudulent pleading in a federal civil action brought by one of Cosby's alleged victims. Specifically, Johnson filed a praecipe that used the signature of the alleged victim's actual attorney, but which was filed without the attorney's knowledge and which contained unsupported allegations that Cosby's alleged victim had failed to report income. Almost immediately after the false pleading was discovered it was stricken from the record by the civil trial judge. Johnson was then indicted under Section 1001 for making a false material representation to the civil trial judge. Materiality requires evidence that the false statements were of the kind "capable of influencing the decisionmaker" and that "could have bearing on an actual decision entrusted to the decisionmaker." In Johnson, the only decisionmaker identified by the prosecution was the civil trial judge, who testified in general that he extracted information whenever he looked at the docket and then took action based on that information. But, according to the Third Circuit, "given the subject matter of the underlying litigation and posture of the case, there is no evidence that this false statement, even if considered by the Judge, could have been relevant, much less material, to any decision." In other words, the stricken meshugannah pleading would not have been relevant or admissible in the alleged victim's case. The only thing it was relevant to was the judge's decision to strike it from the docket, which was not enough. The Third Circuit, without explicitly saying so, seemed to believe that no proof the government might have offered would have sufficed to show materiality in this instance. Assistant Federal Defender Abigail Horn successfully argued the appeal for Johnson and congratulations are in order. I doubt there have been very many successful federal criminal defense appeals on the materiality issue.
Tuesday, November 30, 2021
The Supreme Court recently granted certiorari in two cases addressing criminal liability for doctors who prescribe controlled substances in good faith. It is also considering a similar petition from the Fourth Circuit, which includes Maryland and Virginia. The Court last addressed this issue nearly 50 years ago. United States v. Moore, 423 U.S. 122 (1975). Since then, the federal courts have drawn very different conclusions as to the level of wrongdoing required for prosecution. These cases present an opportunity for the Supreme Court to clarify whether physicians can become criminals for a simple mistake.
As two professors of health law point out, the potential for injustice goes far beyond those who are imprisoned. Fear of prosecution may inhibit other doctors from prescribing medicine, to the detriment of patients with legitimate medical needs. The easier it is to convict a medic, the more cautious one will be with medicine that many patients find necessary.
Too low a bar also risks interfering with traditional regulation of the medical profession. One of the defendants, Dr. Saheel Kahn, was twice investigated—and cleared—by the Arizona Medical Board. Nevertheless, he was found guilty of violating federal law.
Just the Facts
Saheel Kahn, who practiced in Arizona and Wyoming, failed to realize that some of his patients were selling their medication. Xiulu Ruan owned a pain clinic and pharmacy in Alabama, where he prescribed unusually large numbers of pain-killers. George Naum worked at an addiction clinic in West Virginia, where he signed prescriptions based on his nurse’s evaluations and reports. All were charged with distributing controlled substances.
Dr. Kahn, Dr. Ruan, and Dr. Naum maintained that they had their patients’ best interests at heart. The courts said, in effect, that it didn’t matter. All of the doctors were convicted. Two of them were sentenced to decades of imprisonment.
Is Legitimate Medical Purpose A Defense?
A physician violates the law when by distributing controlled substances “outside the usual course of professional practice.” Moore, 423 U.S. at 124. Thus, physicians can be prosecuted when they prescribed drugs “not for legitimate purposes” or their “conduct exceeded the bounds of ‘professional practice.’” Id. at 135, 142.
As a matter of common sense, to avoid criminalizing medical error, conviction should require a lack of legitimate purpose and treatment beyond the bounds of medical practice. The appropriate regulation arguably supports this requirement: “A prescription . . . must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 C.F.R. § 1306.04(a). A few appellate courts have unambiguously adopted this position. U.S. v. Pellman, 668 F.3d 918, 923 (7th Cir. 2012); U.S. v. Feingold, 454 F.3d 1001, 1010 (9th Cir. 2006).
Many circuits, however, have taken the opposite approach. In the Fourth Circuit, for example, the government must prove that a doctor’s actions “were not for legitimate medical purposes in the usual course of his professional medical practice” or that they were “beyond the bounds of medical practice.” U.S. v. Singh, 54 F.3d 1182, 1187 (4th Cir. 1995). Thus, “malicious motive or the desire to make a profit” is not required to convict a physician. Id. at 1188.
This reasoning reached its logical conclusion in Dr. Naum’s trial. Dr. Naum tried to prove that his treatment was for a legitimate medical purpose. The judge did not let him. The court of appeals affirmed his conviction: because the government wasn’t required to prove the lack of any legitimate medical purpose, it wasn’t relevant whether Dr. Naum had one. U.S. v. Naum, 832 F. App’x 137, 142 (4th Cir. 2020).
Similarly, in the Tenth Circuit, a physician may be convicted “if she prescribes the substance either outside the usual course of medical practice or without a legitimate medical purpose.” U.S. v. Nelson, 383 F.3d 1227, 1232 (10th Cir. 2004). The Court of Appeals denied Dr. Kahn’s request to reconsider this rule. U.S. v. Khan [sic], 989 F.3d 806, 822 (10th Cir. 2021). Dr. Kahn then sought certiorari on this issue.
What Is “Good Faith”?
Formally, good faith is a defense throughout the nation. Its effectiveness, however, varies greatly from circuit to circuit. Practically, in some parts of the country, it is no defense at all.
A few circuits have, with varying degrees of clarity, allowed a subjective test for good faith. That is, in some parts of the country, physicians may defend themselves by demonstrating that they were sincerely attempting to treat their patients.
By contrast, some circuits employ an objective standard. The Fourth Circuit is one of them. United States v. Hurwitz, 459 F.3d 463, 478-80 (4th Cir. 2006). Confusingly, some (non-binding) decisions arguably go further, suggesting that even an objectively reasonable belief is no defense. See United States v. Purpera, 844 F. App’x 614, 626-27 (4th Cir. 2021); United States v. Orta-Rosario, 469 F. App’x 140, 145-46 (4th Cir. 2012). In other words, it might not matter that a doctor believed he was following proper medical practice, only whether he should have believed it.
The Tenth Circuit leaves no doubt on this point: if a physician acted beyond professional boundaries, whatever her reasons, she cannot claim to have acted in good faith. Khan, 989 F.3d at 825-26. In the Eleventh Circuit, a defendant might not be entitled to a good faith instruction at all. U.S. v. Joseph, 709 F.3d 1082, 1097 (11th Cir. 2013). Effectively, there is no good faith defense within these circuits. It is on this issue that Dr. Ruan sought certiorari, as did Dr. Kahn.
These cases offer the Supreme Court an opportunity to correct the appellate courts’ error. The conflation of medical standards with legitimate purpose, and the absence of a good faith defense, mean that physicians can violate the law through a well-intentioned mistake. At best, this creates a crime out of what should be dealt with through professional discipline or malpractice lawsuits. At worst, it makes outlaws out of well-meaning doctors who trust their patients or employ unorthodox forms of treatment. In some cases, like Dr. Kahn’s, it can even lead to punishment where medical boards have investigated and found no wrongdoing.
Yet, a favorable decision alone will do little good for any individual defendant. An accused physician must understand precisely what the government will prove, how to convince the jury otherwise, and the necessary legal arguments. A small error, such as the failure to request the correct jury instructions, could ensure the conviction of even an innocent defendant. Therefore, as always, it remains important for wrongly-accused doctors to secure the representation of a skilled defense lawyer.