Monday, April 11, 2016

A Huge Win for the Defense: US v. Fowler, et al.

In the Eastern District of Michigan, Dr. Carl Fowler ran a pain clinic.  Babubhai Patel opened a pharmacy in the same building as the clinic.  Patel hired Kartik Shah to manage the pharmacy.  Shah paid Fowler to refer patients to the pharmacy, and Patel introduced Fowler to pill dealers, known as ‘marketers,’ including Michael Thoran.  

Fowler  and Thoran were convicted by a jury of conspiracy to commit health care fraud, conspiracy to distribute controlled substances, and conspiracy to pay or receive healthcare kickbacks.   

At Fowler’s sentencing hearing, none of the parties, including the district court, were able to determine an appropriate Guidelines range for imprisonment and the district judge decided to start at 108 months.   Without calculating the Guidelines range or make any factual findings regarding this “appropriate” starting point, the district court discussed the 18 U.S.C. § 3553 factors and sentenced Fowler to 72 months imprisonment with two years’ supervised release.  In addition, restitution was an issue at sentencing and defense argued that the jury did not determine the amount of loss and the evidence supported only twenty percent of the prescriptions being fraudulent.  The United States disagreed and argued that $1,752,957 was actually a conservative estimate.  The district court ordered restitution for $1,752,957. 

In Thoran’s sentencing, the United States and defense stipulated to a range of imprisonment of 168-210 months.  The Court addressed the § 3553 factors and sentenced him to 108 months of imprisonment with three years of supervised release and restitution of $2,632,854. 

Both appealed their sentences and Thoran also appealed his conviction.  See United States v. Carl Fowler (14-2412); Michael Thoran (15-1073).

In Fowler’s appeal, he argued that his sentence was procedurally and substantively unreasonable because the district court failed to calculate the Guidelines range or make factual findings in imposing his sentence.  The Government argued that Fowler essentially waived his right to have the Guidelines range calculated because he agreed that 108 months was an appropriate starting point. 

The Sixth Circuit took great issue with the district court’s failure to calculate or make a factual finding about the Guidelines range.  Failure of district courts to make these calculations or factual findings “renders it impossible for the Court to conduct any meaningful appellate review of the reasonableness of a defendant’s sentence. “ Based on this analysis, the Sixth Circuit found Fowler’s sentence procedurally unreasonable.   The Sixth Circuit completely disregarded the Government’s waiver argument. The Court also addressed the restitution amount and concluded that the district court’s restitution order was based on clearly erroneous findings. 

The Court applied the same reasoning to Thoran’s sentencing and held that “for a sentence to be procedurally reasonable, the district court must calculate the Guidelines range and make factual findings regarding that range.”  Furthermore, the  Court held that the district court abused its discretion by failing to make specific findings regarding why Thoran should be held accountable for the entire loss of $2.6 million. 

The sentences for both defendants were remanded for resentencing but Thoran’s convictions were affirmed. 

This was certainly a job well done by Kevin M. Schad, Office of the Federal Public Defender and Kellie Kulka, University of Cincinnati College of Law.   The oral argument for these defendants is available online and provides further insight into these issues.  

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