In May 2019, a Boston jury convicted five Insys Therapeutics executives on federal racketeering charges for bribing doctors to prescribe opioid painkillers to patients who did not need them and defrauding Medicare, private insurance and patients, under conspiracy to commit mail fraud, wire fraud and anti-kickback statutes. However, there have been some recent, favorable developments for the defense.
In November 2019, the court found that the government failed to present sufficient evidence, vacating the convictions based on honest services fraud and the controlled substance act. The order did not affect the other charges on which the defendants were convicted. In the order, the court went on to say that “The Government could have easily proved bribery, but it elected not to charge bribes or kickbacks and now must live with that decision.”
The defendants were sentenced in January 2020. Overall, while the defendants were sentenced above their own requests, their punishment was less than what the government argued for. The sentences were as follows. Founder John Kapoor was sentenced to 66 months. Victims described him as a “mobster” and “murderer” who was responsible for the death of opioid addicted family members. The other defendants’ sentences were shorter. Michael Gurry, the former Insys vice president of managed markets, was sentenced to 33 months in prison. Joseph Rowan, a former regional sales director, was sentenced to 27 months in prison. Richard Simon, the former national director of sales was sentenced to 33 months in prison. Sunrise Lee, a former regional sales director, was sentenced to a year and a day. Alec Burlakoff, former VP of sales, plead guilty and was sentenced to 26 months. Michael Babich, former president and CEO, also plead guilty and was sentenced to 30 months. Some defendants were also ordered to forfeit several million dollars.
Any felony conviction has dire consequences for a white-collar criminal defendant. Being branded a felon and likely losing professional licenses and the opportunity to work in one’s field are life altering. Often personal relationships dissolve, and a convicted white-collar criminal defendant frequently loses most of their assets under a restitution or forfeiture order. But the most significant variable for most defendants is the length of the prison sentence. Here, while the sentences were certainly substantial, they appeared to be reasonable based upon the jury verdict and individual conduct.
Interestingly, the arguably more culpable defendants who plead guilty were sentenced to similar or only slightly shorter terms than all but one defendant who went to trial. A defendant who pleads guilty and provides “substantial assistance” to the government is entitled to some reduction of sentence under the United States Sentencing Guidelines. However, as in this case, courts and the government should not overlook the defendant’s individual role and culpability.
A logical result is a lower level defendant who cooperates being sentenced to substantially less time than other defendants. However, there are sometimes unjust results where the mastermind of a criminal scheme is sentenced to less than a minor defendant merely because he or she plead guilty and testified at trial. This issue can be addressed if less culpable individuals are offered plea deals that truly limit their exposure with (1) low statutory exposure including misdemeanors, (2) agreed loss amounts limited to their role, or (3) agreed sentences under Federal Rule of Criminal Procedure Rule 11(c)(1)(C).
Because the dollar amount of the fraud is usually the primary factor in calculating a white-collar criminal defendant’s sentence under the Sentencing Guidelines, sentences should truly be based on a foreseeable loss or gain limited to that defendant rather than include the loss amount from the entire scheme or amounts that the defendant did not benefit. Hopefully there will be more cases that defense attorneys can use to argue that this methodology would not result in a disparity with other defendants under the 18 U.S.C. §3553 factors.
Sources: https://www.usatoday.com/story/news/nation/2020/01/23/insys-therapeutics-founder-john-kapoor-serve-66-months-prison-opioid-scheme/4552871002/?utm_source=native&utm_medium=capi_retrofit&utm_content=inapp&build=native-web_i_p A helpful resource with national sentencing data to assert such an argument is the U.S. Sentencing Commission’s Sourcebook of Federal Sentencing Statistics.