Judge determines whether fraudulent claims term should be changed based on defendant's age, health status.
ISSUE OF THE CASE
When a pharmacist enters a plea of guilty to federal fraud charges that he submitted numerous false claims for reimbursement, should the judge adjust the recommended sentence duration because of the facts of the case?
FACTS OF THE CASE
A community pharmacy owner in a midwestern state submitted numerous false claims to insurance plans, both governmental and private. He used information related to real patients who were served at the pharmacy to formulate submissions covering prescriptions that he either dispensed using counterfeit products or that he did not dispense at all. Additionally, in some instances he would submit bills claiming to have dispensed expensive OTC products, whereas he had actually dispensed products such as fish oil or vitamins. For some of the claims submitted, he had dispensed foreign-made, non—FDA-approved products in place of the medication that had been prescribed.
He also misled employees to create unknowingly false pharmacy records that supported the fraud by telling them that he had received telephoned prescriptions from prescribers. Over a 4-year period, more than 200 fraudulent claims for reimbursement were submitted.
The pharmacist ultimately entered a guilty plea of defrauding Medicaid and Medicare, as well as several private health insurance firms, of about $2.3 million.
When it came time for the US district court judge to pronounce the sentencing for the crimes, arguments were made that the duration of the incarceration should be reduced because of the defendant’s age (63) and health status. The federal prosecutors had recommended a sentence of 70 to 87 months. Should the court take those age and health factors into account when determining the criminal sentence?
The judge sentenced the pharmacist to 4 years in federal prison and ordered repayment of the $2.3 million as restitution.
THE COURT'S REASONING
When determining the duration of a sentence, including incarceration, the judge can consider a number of factors. The decision can be guided by Federal Sentencing Guidelines. These guidelines or nonbinding rules went into effect in 1987 and are recommendations based on several factors. They consider both the harm resulting from the act and the subjective guilt of the defendant. The goal is to create some degree of consistency or uniformity in sentencing decisions applicable to those who have committed federal crimes.
The guidelines are advisory, not mandatory. Nonetheless, a judge considering what sentence to impose for a crime must take them into consideration. If the presiding official decides to not follow the guidance, he or she must explain the factors that led to the difference, be it a decrease or increase in the recommended sentence.
One factor at issue in this case was what is known as the “sophisticated means enhancement.” This component of the Federal Sentencing Guidelines is an increase in the sentence imposed for a white-collar crime that displays a greater level of concealment or planning than a typical fraudulent act of that kind.
In this case, the judge concluded that the sheer volume of fraudulent claims that had been filed, along with the length of time over which the activity had occurred, was evidence of planning a concealment that supported enhancement. As one US court of appeals emphasized, the sophisticated means enhancement does not require a brilliant scheme, merely a greater level of concealment or planning. Additionally, the judge viewed as particularly egregious the conduct of the pharmacist in taking away from patients their ability to choose what they ingest. He found this especially noteworthy in the instances where the pharmacist had dispensed medications from foreign sources that were not subject to the many and varied regulatory protocols of the FDA.
Another facet of the Federal Sentencing Guidelines can lead to a reduction in time to be served if the defendant has an extraordinary physical impairment or is of an older age. Here, the judge considered both the age and health of the defendant, reducing what could have been a sentence of 70 to 87 months to just 48 months. He also ordered the defendant to repay the nearly $2.3 million in restitution.
The judge said, “Have no question about it…[the longer sentencing recommendations of the prosecutors would have been adopted except for the age and health issues] to send a message to people in your profession that this is treated as seriously as the government requests in this case.”
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.