Opinion
Case No. 3:19 CR 490
2022-03-11
UNITED STATES of America, Plaintiff, v. William R. BAUER, Defendant.
Ava Rotell Dustin, Robert N. Melching, Office of the U.S. Attorney, Toledo, OH, Payum Doroodian, Michael A. Sullivan, Suzana Krstevski Koch, Office of the U.S. Attorney, Cleveland, OH, for Plaintiff.
Ava Rotell Dustin, Robert N. Melching, Office of the U.S. Attorney, Toledo, OH, Payum Doroodian, Michael A. Sullivan, Suzana Krstevski Koch, Office of the U.S. Attorney, Cleveland, OH, for Plaintiff.
RESTITUTION ORDER
JACK ZOUHARY, UNITED STATES DISTRICT JUDGE
INTRODUCTION
The Government seeks mandatory restitution in the amount of $464,099.14 (Doc. 185 at 10). Additionally, the Government requests at least $76,000 in "community restitution" under 18 U.S.C. § 3663(c). Defendant opposes both requests (Doc. 184).
DISCUSSION
Medicare/Medicaid
The Government seeks restitution of $253,300.55 to Medicare and $210,798.59 to Medicaid (Doc. 185 at 24). Defendant argues that, under Apprendi v. New Jersey , 530 U.S. 466, 490, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), this Court does not have discretion to calculate restitution. But the Sixth Circuit has "already squarely held that restitution orders are not affected by the Supreme Court's ruling in Apprendi v. New Jersey because the restitution statutes do not specify a statutory maximum." United States v. Churn , 800 F.3d 768, 782 (6th Cir. 2015) (cleaned up).
Defendant also takes issue with the amount of restitution requested. As the Government outlines, the Mandatory Victims Restitution Act ("MVRA") "specifically states that the amount of restitution should be equal to the ‘amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the Defendant.’ " (Doc. 185 at 11) (quoting 18 U.S.C. § 3664(f)(1)(A) ). The MVRA defines "victim" as "a person directly and proximately harmed as a result of a commission of [a qualifying] offense ... including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern."
As the Government noted at Sentencing, Bauer was convicted of "knowingly willfully execut[ing] ... a scheme and artifice to defraud healthcare benefit programs" (Tr. at 56). Therefore, in calculating restitution, this Court examines the entirety of that scheme. See United States v. Ellis , 938 F.3d 757, 763 (6th Cir. 2019) (noting restitution is calculated based on the entirety of the criminal "scheme"). See also United States v. Patel , 711 F. App'x 283, 285 (6th Cir. 2017) (upholding assessment of the entire amount a medical entity billed to Medicare during the course of a health care fraud scheme).
The citation "Tr." refers to the unofficial transcript of the Sentencing Hearing that took place March 9, 2022.
At trial, the Government's expert, Dr. King, testified as to each of the specific loss amounts above, noting that for each of the patients named in the Indictment, their treatment was inappropriate from the outset. "So every dollar figure associated with every visit, every prescription, is part of the overall scheme" (Tr. at 56). The amounts requested by the Government are further supported by the data provided at Sentencing (Exhibits 38, 39, and 42). Those exhibits, along with Dr. King's testimony, provide "sufficient indicia of reliability to support its probable accuracy" of the requested amounts. United States v. Jackson-Randolph , 282 F.3d 369, 386 (6th Cir. 2002) (citation omitted). The request for mandatory restitution under the MVRA is approved.
Community Restitution
The Government next requests at least $76,000, or $4,000 per patient, in "community restitution" (Doc. 185 at 15). Under 18 U.S.C. § 3663(c), a district court sentencing a defendant for a drug offense "in which there is no identifiable victim" may order community restitution, "based on the amount of public harm caused by the offense." See 18 U.S.C. § 3663(c)(1), (c)(2)(A), (c)(3). In doing so, this Court takes into account the public harm caused by the offense and all other relevant factors. U.S.S.G. 5E1.1(d). This restitution, which is paid to specified state entities, may not "exceed the amount of the fine which may be ordered for the offense charged in the case." 18 U.S.C. § 3663(c)(2)(B).
The Government cites to five Controlled Substances Act cases where district courts imposed community restitution. The most factually similar is United States v. Leman , 574 F. App'x 699, 701 (6th Cir. 2014), in which defendant, who operated several pain-management clinics, was convicted by a jury of distributing oxycodone and methadone without a legitimate medical purpose. Id. at 701. At sentencing, the court imposed $1 million in community restitution, to be paid to the Kentucky Crime Victims Compensation Board and the Kentucky Department of Mental Health Division of Substance Abuse (see Doc. 177-3). The defendant challenged the restitution order, arguing the district court erred in awarding community restitution without ordering a fine. Leman , 574 F. App'x at 707. The Sixth Circuit affirmed the restitution order, noting that community restitution is discretionary and permissible so long as it does not exceed the maximum fine "which may be ordered." Id.
Defendant argues "there is no evidence that would justify imposition of community restitution" because he "caused no public harm" (Doc. 184 at 15, 16). The patients who testified at trial, and their families, would undoubtedly disagree. Defendant's illegitimate prescriptions, which lead to "diverted" opioids, caused extensive harm to the community -- lost employment, family turmoil, drug dependency, overdose, and death (Doc. 185 at 16). The community bears the brunt of this harm by way of 911 calls, emergency-room visits, and the burden on drug-treatment providers. Community restitution will help offset some of this burden.
The Government has provided ample evidence of the connection between Defendant's conduct and the opioid crisis in northwest Ohio -- including patient testimony and reports from the Ohio Department of Mental Health and Addiction Services (Tr. at 36). The Government also provides data from the American Society of Addiction Medicine, which outlines the public cost associated with treating and promoting recovery of opioid-addicted patients (Doc. 185 at 19–21).
The $76,000 figure represents a rough average of the public cost of treating nineteen of Defendant's patients. That estimate is more than reasonable, in light of the scale of Defendant's illegitimate prescription writing, and well-within the $1 million maximum. But the public harm in this case expands beyond these specific patients. After taking the Government's estimates into account, and considering the additional harm caused by Defendant's ongoing conduct in the northwest Ohio communities (along with waiving the fine in this case), this Court finds that community restitution of $100,000 is appropriate.
CONCLUSION
Defendant shall pay community restitution, due and payable immediately, to the Clerk of Court in the total amount of $100,000 for pro rata distribution to the below-listed entities.
• 65% to Ohio Attorney General, Crime Victim Services Section, 30 E. Broad St. 23rd Floor, Columbus, OH 43215; and
• 35% to Ohio Dept. of Mental Health & Addiction Services, 30 East Broad Street, 36th Floor, Columbus, Ohio 43215-2556.
This Court strongly recommends 100% of this community restitution amount go to the Mental Health and Recovery Services Board of Seneca, Ottawa, Sandusky and Wyandot Counties.
Defendant shall also pay restitution, due and payable immediately, to the Clerk of Court in the amount of $464,099.14 ($253,300.55 to Medicare and $210,798.59 to Medicaid), for distribution as follows:
• $253,300.55 to CMS, Division of Accounting Operations, P.O. Box 7520, Baltimore, Maryland 21207-0520; and
• $210,798.59 to Ohio Attorney General, Attn: Health Care Fraud, 30 E. Broad St. 23rd Fl., Columbus, Ohio 43215.
This Court orders the Clerk of Court to apply the secured $250,000 bond to restitution, with community restitution being paid first. Defendant shall immediately liquidate his financial accounts or other nonexempt assets in an amount sufficient to pay all remaining restitution. This Court waives the interest requirement in this case.
IT IS SO ORDERED.