Guilty Pleas Result From Charges of Fraud and Money Laundering

FACTS OF THE CASE

The principal defendant in this case operated 16 pharmacies in a large metropolitan area of a mid-Atlantic state. He and a relative were indicted in an alleged $30 million health care fraud and money-laundering scheme. The defendants were accused of exploiting Medicare reimbursement adjustments due to the COVID-19 pandemic, allowing them to submit claims that were unsubstantiated. Additionally, they were alleged to have directed $18 million of the proceeds from these activities through a sham wholesaler designed to resemble a legitimate drug distributor.

Both defendants entered guilty pleas in federal court. Facing the possibility of a substantial period of incarceration, the defendants decided to enter a guilty plea to the charges of mail and wire fraud, with the hope of securing a reduced period of incarceration. The defendants negotiated with the US attorneys representing the Department of Justice, reaching an agreement that was presented to the judge for approval. Each defendant entered a plea of guilty to 1 count of conspiracy to commit money laundering.

THE COURT’S RULING

The US District Court judge presiding over the matter approved the negotiated agreement regarding penalties—51 months in federal prison, 3 years of supervised release upon completion of the period of incarceration, forfeiture of $489,000 in proceeds from the criminal activities, and payment of restitution in the amount of $7.2 million.

THE COURT’S REASONING

The decision whether to accept a negotiated plea can be quite complex and is reached after thorough confidential discussions between defendant and counsel. First, when arrested and arraigned, the individual has several choices regarding entering a plea in a criminal case: They can plead guilty, not guilty, or no contest.

Accepting a plea bargain can have several advantages. Firstly, it gives the defendant a degree of control over the outcome. It can also help avoid unwanted publicity, save substantial time in trial preparation and conduct of the trial, and lead to a reduced sentence or a charge of a lesser crime.

A plea bargain can also have some notable disadvantages, however. Importantly, the individual accepting the bargain waives the right to pursue an appeal; it can result in a criminal record; there is no opportunity to challenge the prosecution’s case; and, crucially, a plea of not guilty is no longer a possible outcome.

Going to trial can also have some advantages and disadvantages. A conclusion of not guilty is possible in a trial, and defendants may see advantages appear as the prosecutor presents the other side’s case. The right to appeal an adverse decision exists, and a trial does allow the defendant time to fully prepare their defense.

However, going to trial can lead to a harsher outcome for the defendant than a plea deal would have. Similarly, it gives the prosecution more time to prepare their case, it is open to the public and the media, and the decisions of judges and juries can be highly unpredictable.

These lists underscore the importance of working with an attorney who is experienced in these matters. Thorough discussion and rigorous consideration of all possibilities will work to serve the defendant well.

About the Author

Joseph L. Fink III, JD, DSC (HON), BSPHARM, FAPHA, is an emeritus professor of pharmacy law and policy and former Kentucky Pharmacists Association Professor of Leadership at the University of Kentucky College of Pharmacy in Lexington.