Can the judge add to their penalty of imprisonment a substantial monetary fine to recover ill-gotten gains from drug diversion?
ISSUE OF THE CASE
If a husband-and-wife pharmacy pair owned and operated a pharmacy that was very actively involved in drug diversion that resulted in their criminal convictions under the relevant federal statutes, can the judge add to their penalty of imprisonment a substantial monetary fine to recover their ill-gotten gains?
FACTS OF THE CASE
Using a corporate name, an individual in a southern state operated a network of 8 clinics. The aforementioned couple operated a pharmacy across the street from 1 of the clinics. It was established at trial that the pair worked with the 2 physicians practicing across the street to prescribe and dispense oxycodone and other opiates to drug addicts and dealers.
“Patients” would wait hours to be seen at the clinic, paying cash for prescriptions. They then brought them to the pharmacy where they paid inflated prices for the drugs, usually in cash. The buyers were from the state where the pharmacy was located and other states, some not contiguous.
Over 1 year, the pharmacy bought 11 times more oxycodone tablets than the average pharmacy in the state. During a separate 3-year period, the pharmacy bought nearly 1.4 million tablets. Prescriptions from the clinic accounted for more than 90% of cash flow at the pharmacy, where revenue exceeded $5 million.
Activity at the pharmacy attracted the attention of the state board of pharmacy. The husband’s license to practice had previously been revoked, and the wife’s license had been subject to a temporary suspension several years before the criminal case made it to court. The criminal charges in the matter discussed here were drug diversion/trafficking and money laundering.
Following a 3-week jury trial, the couple were convicted of the federal charges, with the wife sentenced to 19 years and the husband sentenced to 20 years. The US Attorney made a motion for the judge to add a financial payback to their penalties.
The federal trial court judge approved the motion for a payment of $5 million in addition to the prison time.
THE COURT’S REASONING
The convictions led to forfeiture of $16,767 in cash from the pharmacy; $133,892 from the pharmacy’s bank account: and 3 automobiles: 2 BMWs and 1 Mercedes-Benz. The judge also applied a section of the federal statutes that addresses sentencing guidelines for individuals convicted of violating certain provisions of the federal Controlled Substances Act.
The relevant statute used by the adjudicator authorizes the judge to use an order of restitution to reimburse the victim of a crime for the amount of loss or damages resulting from the criminal activity. However, when putting that rule in place, Congress anticipated that there may well be situations where identifying the victim or victims who suffered financial loss as a result of criminal acts might be quite challenging. As a result, Congress added a provision to the statute stating that in situations “in which there is no identifiable victim, the court may order that the defendant make restitution in accordance with this subsection.”
It continues, “An order of restitution under this sub- section shall be based on the amount of public harm caused by the offense, as determined by the court in accordance with guidelines promulgated by the United States Sentencing Commission.”
The judge ordered the payment of $5 million as a community restitution award. Restitution is court-ordered monetary compensation for crime victims, with the amount and manner of payment determined by the judge. The funds were to be divided between the state’s Criminal Justice Coordinating Council for Victim’s Assistance and the state’s Department of Behavioral Health and Developmental Disabilities.
This order of community restitution was the first of its kind in the United States against pharmacists. It was based on recognition of the public harm resulting from the diversion of opiates and the resulting harm to all citizens of the state.
The special agent in charge of the Drug Enforcement Administration field office in the area of the criminal activity was quoted as saying, “It is a sad commentary when trusted individuals in the medical community hide behind the veil of legitimacy to commit criminal acts.”
Joseph L. Fink III, BSPharm, JD, DSc (Hon), FAPhA, is a professor of pharmacy law and policy and the Kentucky Pharmacists Association Endowed Professor of Leadership at the University of Kentucky College of Pharmacy in Lexington.