The new health care law, Pub. L. No. 111-148 (Mar. 21, 2010) has controversial criminal justice ramifications apart from those provisions of the massive bill making health care policy changes. It vitiates foundational principles of criminal law with respect to trial and sentencing by: (1) diminishing the mens rea requirement under 18 U.S.C. §1347; and (2) requiring the Sentencing Commission to enact substantive Guidelines with Congressionally-mandated specific offense characteristics. For pre-publication copy of new article I wrote, leave comment.
Thursday, May 20, 2010
Sunday, May 16, 2010
OPEN SOURCE SENTENCING
Welcome to the blog. This is an experiment in open source access to white collar sentencing pleadings, including appellate briefs, PSI objections, motions for downward departure or variance, 2255s, etc. We are seeking and posting innovative pleadings, novel theories of sentencing, and sentencing solutions to recurring issues such as the elusive meaning of loss.
If you have work product addressing frequently arising white collar defense issues, please post or comment with a description of the item and a means through which you can exchange documents with our group.
Technical kinks and limitations are inevitable. Thus, to contribute a document it may be easier to send it to me directly for posting: bensonweintraub@msn.com (message line Re: BLOG).
Corporate Death Penalty
As part of the plea agreement, defendant was required to dissolve the corporations convicted of health care fraud. In lieu of dissolution, the parties and court concurred that USSG §8C1.1 would be equally effective.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Case No. 3:05-CR-240-1-SOLIS
----------------------------------------------------------------X
UNITED STATES OF AMERICA,
Plaintiff,
Vs.
ALLIANCE PHARMACY SERVICES, Inc;
AMS PHARMACEUTICAL GROUP, Inc;
CARRINGTON HEALTH CARE SYSTEM, Inc;
DALAMAR SERVICES, Inc;
EAST POINTE PHARMACY SERVICES, Inc;
EVEREST SERVICES, Inc;
INFINITI SERVICES GROUP, Inc;
MED-CARE INFUSION SERVICES, Inc;
NATIONAL EXECUTIVE MGT, Inc;
ORION PHARMACY SERVICES, Inc;
PRECISION PHARMACY SERVICE, Inc;
PREMIUM PHARMACY SERVICES, Inc;
QUANTUM INFUSION, Inc;
RELIANCE PHARMACEUTICAL, Inc;
SOUTHWEST INFUSION, Inc;
SWS PHARMACY SERVICES, Inc;
TEXAS HOME INFUSION, Inc;
TRI-PHASIC PHARMACY, Inc;
TRINITY INFUSION SERVICES, Inc; and,
TRINITY PHARMACY SERVICES, Inc.
Defendants.
---------------------------------------------------------------X
O R D E R
THIS MATTER AROSE UPON the Joint Motion to Divest All Net Assets [of the above-captioned corporations] and for Agreed Permanent Injunction Prohibiting the Defendants From Transacting Business pursuant to USSG§8C1.1 and 28 U.S.C. §§2201-2202, Rule 65, Fed. R. Civ. P. Upon consideration of the motion and all pleadings and proceedings had herein, it is hereby
ORDERED and ADJUDGED that the motion is GRANTED. It is further
ORDERED and ADJUDGED that a fine in the amount $ 1000 is hereby imposed upon each of the above-captioned corporations upon each count of conviction and the Court finds that said fine is sufficient to divest the corporate defendants of all their net assets. It is further
ORDERED and ADJUDGED that a federal lien shall be imposed upon said corporations in the amount of the fines imposed. It is further
ORDERED and ADJUDGED that the corporate defendants are permanently enjoined from transacting business. It is further
ORDERED and ADJUDGED that to the extent permitted by state law, the corporations are herewith dissolved.
DONE and ORDERED in chambers this ___ day of ____________, 2009.
____________________________
HON. JORGE A. SOLIS
United States District Judge
Copies Furnished:
Texas Secretary of State
Counsel of Record
US Marshal Service
Appellants Initial Brief in Internet Pharmacy Case
The issues on appeal in this internet pharmacy case are published in the TOC below. At sentencing, the government argued for loss of $211M. However, defense objection was granted, in part, resulting in advisory Guideline based on $68M. If you would like a copy of the 80-page brief--largely relating to the impact of market conditions on loss (Olis, Rutkoske), please request and it will be sent offline (80 pages):
LEGAL ARGUMENT
Point 1.
THE GOVERNMENT’S MATERIAL BREACH
OF THE PLEA AGREEMENT VITIATED THE
VOLUNTARY NATURE OF DEFENDANT’S
GUILTY PLEA
A. The Plea Agreement’s Exception to the Waiver
Of Appeal Clause Mandates A Direct Appeal
From the Conviction and Sentence to Challenge
The Voluntariness Of Defendant’s Guilty Plea
B. The Government’s Breach of the Plea Agreement
Vitiated The Voluntariness of Saran’s Guilty Plea
C. The Government Impermissibly Reduced the Extent
Of Its Sentencing Recommendation Citing Benefits
To Third Party Family Members Which It Argued
Should Not Accrue to the Defendant as the Sole
Beneficiary of Their Substantial Assistance As
Well as His Own
D. The Government Withheld Relevant Information
in Mitigation of Sentence From the Lower Court
Point 2.
THE PROSECUTOR’S ILLUSORY SENTENCING RECOMMENDATION—IN VIOLATION OF THE PLEA AGREEMENT—WAS BASED UPON CONSTITUTIONALLY IMPERMISSIBLE CONSIDERATIONS
A. Saran’s Criticism of FBI and US Attorney to CongressAnd Justice Department Headquarters 45
B. Retaliation for Exercise of Constitutionally Protected Speech
Point 3.
THE SENTENCING JUDGE APPLIED THE
INCORRECT METHODOLOGY TO LOSS DETERMINATION
IN THIS MARKET-DRIVEN CASE RESULTING IN
A MATERIAL MISAPPLICATION OF THE GUIDELINES
AND A PROCEDURALLY UNREASONABLE SENTENCE
A. Introduction
B. Reliable Loss Determination Requires Application
Of The Correct Methodology
1. Improper Methodology
Taints the Resultant “Loss” Figure
C. Pharmaceutical Economics
1. Jurisprudential Analysis of Wholesale Price
Litigation
2. AWP Versus WAC
3. Lack of Transparency
4. Introduction to Causation
5. Pre-Existing Adverse Market
Circumstances Created by the “Victims”
6. Relevant Conduct and Causation
7. Impact of Extrinsic Market
Conditions and Loss
8. Olis: A Watershed Case
D. The Government Failed to Meet its Evidentiary
Burden To Substantiated a Hotly Contested
Presentence Report
Point 4.
RESTITUTION AWARDS WERE IMPERMISSIBLY BASED
UPON CLEARLY ERRONEOUS DATA AND RELIEF
WAS GRANTED TO NON-VICTIMS
Point 5.
THE GOVERNMENT WITHHELD BRADY EVIDENCE
MATERIAL TO MITIGATION OF PUNISHMENT
Point 6.
THE SENTENCE IS UNREASONABLE BASED ON
THE JUDGE’S FAILURE TO STATE THE REASON
FOR ITS IMPOSITION WHICH IS UNCLEAR
FROM THE CONTEXT AND RECORD
Point 7.
IF REMANDED, THE CASE SHOULD BE REASSIGNED TO ANOTHER JUDGE
Defendant's Response to Government Motion to Dismiss Appeal Based on Breach of Plea Agreement Despite Waiver of Appeal Clause
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Case No. 09-11211
UNITED STATES OF AMERICA,
Appellee/Plaintiff,
Vs.
RAKESH JYOTI SARAN
Appellant/Defendant.
On Direct Appeal From the United States District Court for the Northern District of Texas, Case No. 05-240-Cr-SOLIS
APPELLANT’S RESPONSE TO GOVERNMENT’S MOTION TO DISMISS
BENSON WEINTRAUB, Esq.
FL. Bar No. 0486418
Counsel for Appellant Saran
12550 Biscayne Blvd. #800-21
Miami, FL. 33181-2546
Tel. 786.431.2942
Fax 786.431.2943
CERTIFICATE OF INTERESTED PERSONS [AND ENTITIES
AND CORPORATE DISCLOSURE STATEMENT]
The following persons or entities have an interest in the outcome of this case
pursuant to Fed. R. App. P. 26.1 and 5th Circuit IOP 28.2:
Hon. Jorge A. Solis, US District Judge
Magistrate Judge Ramirez
GlaxoSmithKline, Inc.
McKesson Corporation
Cardinal Health, Inc.
AmerisourceBergen, Inc.
Morris & Dickson Co., L.L.L.
Novartis
Benson Weintraub, Esq. (Defense and Appellate Counsel)
Jeff Kearney, Esq. (Defense Counsel)
William McMurrey, Esq. (Former AUSA)
Matthew Kacsmaryk, AUSA (Appellate Counsel)
Chad Meacham, AUSA
Christopher Stokes, AUSA
Rakesh Jyoti Saran, Defendant
By: /s/__Benson Weintraub__
TABLE OF CONTENTS
I. INTRODUCTION
A. Puckett Does Not Apply Due to a Timely Objection
Made at Sentencing
B. Defendant Objected to the Government’s Breach
C. Sentencing Judge’s Failure to Rule on Defendant’s Objection
Concerning the Government’s Breach of the Plea Agreement
D. Defendant Was Palpably Prejudiced By the Prosecutor’s Breach Reducing the Extent of the Government’s Sentencing Recommendation to Account for Benefits to Third Parties Rather than the Defendant
E. The Government Invited Error By Reducing Saran’s Sentencing Recommendation Based on an Uninformed Appreciation of the Law Governing USSG §5K1.1 and Surrogate Cooperation
F. The Defendant Relied to his Detriment on the Integrity of the Government to “Urge Sentencing Consideration” for Substantial Assistance That He Provided
II. PUCKETT IS NEITHER CONTROLLING
NOR APPLICABLE TO THIS CASE
A. Preserved Error
B. The District Judge Failed to Resolve Defendant’s
Objection to Breach
C. The Court’s Failure to Rule Exacerbated the Breach
D. Third Party or Surrogate Cooperation is Solely for the Benefit
Of the Defendant
E. The Government’s Sentencing Recommendation Ignored Saran’s Status as the Sole Beneficiary of Surrogate Cooperation
III. CONCLUSION
I.
INTRODUCTION
A. Puckett Does Not Apply Due to a Timely Objection
Made at Sentencing
Fundamentally, Puckett v. United States, 129 S.Ct. 1423 (2009) is wholly inapplicable to the facts of this case. The government’s reliance upon it reflects a broad and conclusory response to the defendant’s arguments because defendant clearly objected to the government’s breach of the plea agreement in the court below. Defendant also addressed this issue as a threshold matter in his merits brief at Point I.[1]
Assertion of the Puckett “forfeiture” of defendant’s right to appeal is a ruse because at sentencing Saran—in marked contrast to the defendant in Puckett—did object to the government’s breach of the plea agreement.
B. Defendant Objected to the Government’s Breach
Critically, Puckett is limited to those cases like it where the defendant registered no objection to breach of the plea agreement in the lower court. The entire premise of Puckett is inapplicable in light of defendant’s clear and specific record preservation before the district judge. The objection met the criteria of Rule 51(b), Fed. R. Crim. P.[2]
C. Sentencing Judge’s Failure to Rule on Defendant’s Objection
Concerning the Government’s Breach of the Plea Agreement
The remedy for a breach of the plea agreement lies within the discretion of the court, either to grant specific performance of the plea agreement or permit withdrawal or rescission of the plea. As such, it was incumbent upon the district judge to either rule on the objection or take evidence to determine whether the defendant should be granted specific performance or granted an opportunity to withdraw the plea. The court below erred reversibly in failing to address and rule upon defendant’s objection to the government’s sentencing recommendation.
Faced with a defense objection that the government breached the plea agreement, the district judge in United States v. Dicus, 579 F.Supp.2d 1142, 1155-56 (N.D.Iowa 2008) addressed the dispute rather than ignoring it, noting that “the choice of remedy rests with the court rather than the defendant.” Id. (citation omitted). The district judge noted that “the determination of the appropriate remedy is typically left to the discretion of the court,” and that “enforcement of the agreement and withdrawal of the plea are among the options available to the court.” Id. (original emphasis)(internal citation omitted).
D. Defendant Was Palpably Prejudiced By the Prosecutor’s Breach Reducing the Extent of the Government’s Sentencing Recommendation to Account for Benefits to Third Parties Rather than the Defendant
Defendant was prejudiced by the prosecutor’s abrogation of the plea agreement, especially by withholding credit from the defendant while purporting to grant “more weight” to consideration afforded defendant’s family members who rendered third party cooperation. TR. Sentencing at 58.
E. The Government Invited Error By Reducing Saran’s Sentencing Recommendation Based on an Uninformed Appreciation of the Law Governing USSG §5K1.1 and Surrogate Cooperation
Thus, the full measure of the government’s obligation under the plea agreement was compromised. While surrogate cooperation is a recognized form of substantial assistance, the benefits must flow to the defendant only. On this record, the government admitted that Saran was entitled only to “some credit”[3]—a portion of the three-levels recommended by the government.
The court gave substantial weight to the government’s sentencing recommendation[4] but concurred with the defense that it underrepresented the nature and scope of defendant’s substantial assistance.[5]
The judge made determination of the extent of his departure on the basis of invalid premises,[6] i.e., that third party cooperation diminished the number of levels the government would have recommended for defendant. Had the court appreciated that defendant was the sole lawful beneficiary of surrogate cooperation, a greater reduction would have been warranted.
F. The Defendant Relied to his Detriment on the Integrity of the Government to “Urge Sentencing Consideration” for Substantial Assistance That He Provided
It’s clear that the defendant was induced to enter a plea agreement incentivized by the government’s representation that cooperation rising to the level of substantial assistance would result in the government urging [favorable] sentencing consideration for him, undiminished by levels clearly and specifically deducted from the recommendation on account of surrogate cooperation intended to benefit putative defendants, not the defendant on whose behalf the government filed its motion.
The United States Attorney is “the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done.” Berger v. United States, 295 U.S. 78, 88, 55 S.Ct. 629, 79 L.Ed. 1314 (1935).
II.
PUCKETT IS NEITHER CONTROLLING
NOR APPLICABLE TO THIS CASE
A. Preserved Error
Puckett, supra, which was cited by the defendant in his initial brief,[7] is critically distinguishable for its core lies in the petitioner’s failure to object to violation of the plea agreement in the court below.
The Court’s analysis began with the axiomatic proposition that:
[i]f a litigant believes that an error has occurred (to his detriment), during a judicial proceeding, he must object in order to preserve the issue. If he fails to do so in a timely manner, his claim for the relief from error is forfeited.
Id. at 1428. In the case at bar, defendant objected with clarity and specificity to the government’s myriad violations of the plea agreement.
Importantly, at no time during the exchange did Puckett’s counsel object that the Government was violating its obligations under the plea agreement. . .
Puckett, 129 S.Ct. at 1427. This failure to object—central to the Court’s holding—is what triggered plain error scrutiny under United States v. Olano, 507 U.S. 725, 113 S.Ct 1770 (1993). In the case sub judice, the Court does not reach the plain error analysis based on a fully preserved record where the defense timely objected to the government’s breach.[8]
B. The District Judge Failed to Resolve Defendant’s
Objection to Breach
Notwithstanding clear record preservation, the district judge failed to rule—tor even respond— to the defendant’s objection based on breach of the plea agreement. Defendant discharged his duty to object which triggered the district court’s obligation to consider and resolve it. “That [district] court is ordinarily in the best position to determine the relevant facts and adjudicate the dispute.” Puckett at 1428. Once the objection was made, it was the court’s obligation to exercise discretion in resolving the disputed matter.
C. The Court’s Failure to Rule Exacerbated the Breach
When the government breaches a plea agreement, "the defendant is typically given the option of withdrawing his guilty plea or demanding specific performance." United States v. E.V., 500 F.3d 747, 754 (8th Cir. 2007). Here, the court below countenanced the government’s breach and severely exacerbated it by failing to rule on the objection or make further inquiry. The following colloquy is illustrative:
Defense Counsel: … And with regard to the Government’s 5K position, I believe it represented a breach of the plea agreement, Your Honor. The government is required to urge sentencing consideration, and urging implies that it would provide full and complete information with regard to the nature and extent of his cooperation, which it demeans, but by the same token recognizes as substantial. So to that extent I believe that the plea agreement was breached.
THE COURT: Mr. Saran, if you will come up. I [have] heard the arguments of counsel and already accepted the information in the presentence report to a large extent.
I will grant the Government’s 5K motion for downward departure. I am going to depart down one level extra from what the Government is arguing. . . The Guideline range will be 134-168 months.
TR. Sentencing at 62.
The failure to exercise discretion constitutes an abuse of discretion, all stemming from the sentencing judge’s failure to even inquire regarding the nature of the breach alleged by the defense. “[A] court's failure to exercise meaningful discretion constitutes an abuse of discretion.” Clyma v. Sunoco, Inc., 594 F.3d 777, 783 (10th Cir. 2010).
The government trivialized Saran’s role in the indictment of associates of the Consular General of Pakistan in Houston, pointing to his family as the primary cooperators. The government impermissibly used §5K1.1 motion for Rakesh Johar Saran to purportedly confer non-prosecution status upon the defendant’s father and sister.[9]
Defense counsel objected to the diminution of Saran’s governmental sentencing recommendation—a material term of the plea agreement—stating:
DEFENSE COUNSEL: [I]t appeared to come down to provincial lawyering and potential conflicts of interest with regard to who gets credit for what… and what amount of credit is going to be granted each person. That is not fair because Mr. Saran, Johar Saran, was the driving factor. He is the engine that drove the cooperation bus.
TR at 54. This implicates the manner in which “third party cooperation” involving a defendant’s family’s assistance to the government must be applied under USSG §5K1.1.
D. Third Party or Surrogate Cooperation is Solely for the Benefit
Of the Defendant
In United States v. Doe, 870 F.Supp. 702 (E.D.Va.1992), the court approved of surrogate cooperation where the defendant is the beneficiary of his family’s “substantial assistance.”. See also United States v. Prokos, 441 F.Supp.2d 887 (N.D. Ill. 2006) which approved the defendant as a third party beneficiary of surrogate cooperation, but the reason was based on contract law (“Under contract law, a defendant's substantial assistance facilitated through a third-party surrogate is part of the consideration supporting the agreement between the Government and the defendant.”). Id. at 893.
E. The Government’s Sentencing Recommendation Ignored Saran’s Status as the Sole Beneficiary of Surrogate Cooperation
Accordingly, the full value of the defendant’s substantial assistance may not be reduced or parceled out to third parties. The court below erred in relying upon the prosecutor’s tainted sentencing recommendation notwithstanding that reduction of the extent of both the nature and utility of Saran’s cooperation is evident.
AUSA: You know about the incident in the Embassy (sic) in Houston involving Pakistani passports. There was much more work done on that by other family members other than Saran, than what he did. His father, his sister were both involved in that. So there was substantial assistance given to them and some credit given to Mr. Saran as well.
TR. Sentencing at 58 (emphasis added).
Thus, the prosecutor—contrary to the provisions of Section 5K1.1 and 18 U.S.C. §3553(e)—may not reduce the extent of the sentencing recommendation which he was contractually bound to make on defendant’s behalf to account for consideration provided by third parties. This, in turn, materially impacted the starting point of the judge’s independent departure consideration. TR. at 62.
III.
CONCLUSION
In determining whether the government breached a plea agreement, this Court reviews the record of de novo. The record conclusively distinguishes the case at bar from Puckett in the most fundamental way. Saran objected to the government’s breach at sentencing obviating any plain error protocol. On the basis of the transcript references to the prosecutor, it’s manifestly evident that the agreement was breached. That much is clear from the transcript of sentencing.
The government expressly told the court that of the three levels recommended for a departure under §5K1.1, the prosecutor emphasized that third party family members were the primary beneficiaries of the substantial assistance (by virtue of non-prosecution) and almost as an afterthought, there was “some credit given to Mr. Saran as well.”[10]
This plainly means that had Saran been the sole intended beneficiary of the government’s Section 5K1.1 motion, the number of levels requested would have been greater to a legally significant degree.
It is improper to reward a third party for cooperation undertaken in concert with the defendant, particularly where, as here, the government intended that Saran receive only “some credit.” [11] Plainly, had the government not parceled out a paltry partial share of the substantial assistance reduction to Saran, the recommendation and resultant sentence would have decreased the guidelines in a demonstrable way.
The court found the total offense level 37 indicating a range of 210-262 months imprisonment. TR. Sentencing at 45. After considering the position of the parties, albeit without resolution of the breach issue, the sentencing judge stated:
THE COURT: I will grant the government’s motion for downward departure. I am going to depart down one extra [level] from what the government is arguing. They suggested a three-level departure. I will depart down four levels to a level 33, Criminal History Category I. The Guideline range will be 134 (sic) to 168 months.
TR. Sentencing at 62.
Defendant was then sentenced to 144 months imprisonment.[12] An additional two-level reduction, for example, would render the range 108-135 months.
Without a stated reason as to the basis of the extent of departure—or any appreciation or record references to judicial reliance upon the Section 3553(a) factors in imposing sentence—it is clear that prejudice is manifest.
The net effect of the government’s breach of the plea agreement irreparably tainted the integrity of the judgment and sentence. Had the government fully accounted for Saran’s substantial assistance in its 5K recommendation, a different result would have obtained. The Court, after all, granted the government’s 5K motion despite its minimization of defendant’s cooperation. Moreover, the court concurred with the defense that a mere three-level reduction was insufficient.[13]
The government’s motion to dismiss must be denied. On this record, moreover, the government itself should have confessed error. The numerous manifestations of breach, e.g., underrepresented nature and scope of defendant’s cooperation, abuse of the third party cooperation doctrine admittedly intended to diminish the reduction given to Mr. Saran, the lawful beneficiary, and retaliation for the exercise of constitutionally protected speech, all counsel in favor of deciding this rich and significant case on the merits. Ultimately, the sentence should be vacated and remanded to a different judge to promote confidence in the administration of justice.
WHEREFORE, it is respectfully prayed that an order issue denying the motion to dismiss, directing that government’s merits brief be filed without undue delay.
Respectfully submitted,
BENSON WEINTRAUB, Esq.
FL. Bar No. 0486418
Counsel for Appellant Saran
12550 Biscayne Blvd. #800-21
Miami, FL. 33181-2546
Tel. 786.431.2942
Fax 786.431.2943
Cell 954.464.1314
bensonweintraub.com
By: /s/__Benson Weintraub__
CERTIFICATE OF SERVICE
I CERTIFY that a copy of the foregoing pleading was e-filed and served upon counsel of record this mailed, postage prepaid this 16th day of May, 2010 to: Matthew Kacsmaryk, AUSA 1100 Commerce Street, 3rd FL., Dallas, TX. 75242-1699.
By: /s/__Benson Weintraub__
[1] Appellant’s Initial Brief at pp. 35-47 (incorporated herein by reference and made a part hereof).
[2] “A party may preserve a claim of error by informing the court—when the court ruling or order is made or sought—of the action the party wishes the court to take, or the party’s objection to the court’s action and the grounds for that objection.” Id. (emphasis added).
[3] TR. Sentencing at 58.
[4] “Substantial weight should be given to the government’s evaluation of the extent of the defendant’s assistance, particularly where the extent and value of the assistance are difficult to ascertain.” USSG §5K1.1, comment. (n. 3).
[5] TR Sentencing at 62.
[6] It is axiomatic that due process prohibits defendant from being sentenced on the basis of materially inaccurate information or invalid premises. Townsend v. Burke, 334 U.S. 736, 740-451, 68 S.Ct. 1252 (1948).
[7] Appellant’s Initial Brief at 44, n. 23.
[8] The government laboriously seeks to draw tentative support from United States v. Villarreal-Rodriguez, 356 Fed. Appx. 759 (5th Cir. 2009)(unpub’d) which deconstructs Puckett by clarifying that defendant’s “appeal waiver does not affect his ability to raise a breach argument. However, notwithstanding Villarreal’s failure to object in the district court, this Court vacated his sentence under plain error.”
[9] TR. Sentencing at 58.
[10] TR. Sentencing at 58.
[11] Id.
[12] Id. at 63.
[13] TR. Sentencing at 62.
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