United States v. Evans, CRIMINAL NO. 4:15-CR-15-2

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
Writing for the CourtKenneth M. Hoyt United States District Judge
Decision Date13 February 2017
Docket NumberCRIMINAL NO. 4:15-CR-15-2


CRIMINAL NO. 4:15-CR-15-2


February 13, 2017



Before the Court are the government's motion for a preliminary order of forfeiture, together with related exhibits (Dkt. No. 270), and Dr. Evans' response and exhibits (Dkt. No. 265, 275). (See Government Ex. Nos.1 - 9; the Dr. Evans' Ex. Nos. 1-15 with subparts, excluding Ex. Nos. 2, 10 and 12). After having considered the motion, response, related briefs and exhibits, together with the oral arguments of counsel concerning the forfeiture issue, the Court determines that the government's motion for forfeiture should be granted in part.


From July 12, 2016, to and including July 25, 2016, this Court presided over a criminal jury trial wherein the defendant, Richard A. Evans, M.D. ("Dr. Evans"), was charged with conspiracy to distribute controlled substances and commit mail fraud, in violation of Title 18 U.S.C. § 371, (Count 1); distributing controlled substances, in violation of Title 21 U.S.C. § 841, (Counts 3 - 7); mail fraud, in violation of Title 18 U.S.C. § 1341, (Counts 8 - 15); and money laundering, in violation of Title 18 U.S.C. § 1957, (Counts 20 - 24). Because Dr. Evans was a medical physician and David DeVido1 was a pharmacist at the time of the criminal acts alleged,

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they were both charged in their professional capacities for distributing schedule II controlled substances outside the course of their professional practices and not for a legitimate medical purpose. See 21 U.S.C. § 841(a); 18 U.S.C. § 2; 21 C.F.R. § 1306.04(a). On July 26, 2016, an empaneled jury returned a guilty verdict against Dr. Evans on all counts of the indictment, save those withdrawn by the government.

The matter is now before the Court for forfeiture proceedings. Rule 32.2(b)(1)(A) of the Federal Rules of Criminal Procedure provides that after a guilty verdict on any count in an indictment for which criminal forfeiture is sought, the Court must determine what property is subject to forfeiture. See Fed. R. Crim. P. 32.2(b)(1)(A). The Court must also determine whether the government "has established the requisite nexus between the property and the offense." Id. With respect to any money judgment that the government seeks, "the Court must determine the amount of money that the defendant will be ordered to pay." Id. "Unless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant under Rule 32.2(b)(4)." Fed. R. Crim. P. 32.2(b)(2)(B).


The standard for forfeiture determinations is by a preponderance of the evidence. See United States v. Gasanova, 332 F.3d 297, 300 - 01 (5th Cir. 2003) ("conclud[ing] that [a] statutorily-prescribed forfeiture is warranted upon a showing of a preponderance of the evidence") (internal citations omitted). The Court's determination "may be based on evidence already in the record . . . and on any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable." Fed. R. Crim. P. 32.2(b)(1)(B). Since forfeiture is a part of the sentencing process, the Federal Rules of Evidence do not apply, and

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hearsay is admissible. See United States v. Capoccia, 503 F.3d 103, 109 - 110 (2d Cir. 2007) (Fed. R. Crim. P. 32.2(b)(1) allows the court to consider "evidence or information," making it clear that the court may consider hearsay).

In this case, the government seeks both a money judgment in the amount of approximately $2.5 million and seized cash and money orders in the amount of $ 17,234.42 (the government contends that the seized cash and money orders constitute proceeds of the conspiracy and mail fraud scheme for which Dr. Evans was convicted). See Dkt. No. 270.

Dr. Evans disputes that the government is entitled to forfeiture of these items in the amounts alleged. First, Evans contends that the government cannot extrapolate from the testimony of Dr. Graves Owen, the government's expert witness, that all the payments made to Dr. Evans by his patients who were prescribed Schedule II controlled substances are forfeitable. This argument is based on the fact that Dr. Owen only reviewed portions of 17 - 18 of the 879 Schedule II patient charts. Dr. Evans maintains that the reviewed charts equate to less than 2% of the 879 Schedule II patients seen by him from January 2010 - December 2012. He also contends that the patient charts reviewed by Dr. Owen as the underlying basis for his expert opinion were pre-selected by the government. He asserts that there is no evidence as to how these files were selected, i.e, whether the selection was randomly-made or were "cherry-picked" by the government because it believed the selected files to provide support for its position. Dr. Evans also disputes the government's $2.5 million figure as over-inclusive in that it seeks to have payments forfeited that were made by patients who received non-oxycodone Schedule II substances.

As support for his argument against the government's attempts at extrapolation in this case, Dr. Evans cites to the Seventh Circuit's decision in United States v. Chube II, 538 F.3d

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693, 702 - 03 (7th Cir. 2008). See Dkt. No. 309. In Chube, the government charged two doctors, brothers Randy and David, with 33 counts each of conspiracy to distribute oxycodone. The jury, however, convicted Randy of only one count and David of only six counts, rejecting both the conspiracy charges. Chube, 538 F.3d at 694. At the sentencing hearing, during which relevant conduct findings were critical and dramatically enhanced each defendant's guidelines range, the district court discussed only 10 of the 98 patient files and essentially declared all of the prescriptions unlawful. Id. at 703 - 04.

On appeal, the Seventh Circuit found no explanation as to "why the prescriptions in the 98 files were not merely unnecessary, but indicative of illegal drug pushing," and concluded that "[t]he court's assumption of a lack of legitimate medical purpose for every prescription in 98 files after discussing only 10 files with any specificity was not enough to support its findings." Id. at 704. The Seventh Circuit upheld the convictions, but remanded for resentencing, explaining that: "[w]hen the district court revisits relevant conduct on remand, it must explain its findings with respect to each patient and make a reasoned determination whether or not the government has carried its burden of establishing that each prescription was dispensed outside the scope of medical practice and without a legitimate medical purpose." Chube, 538 F.3d at 705 - 06.

The Court further noted that in a case where "a defined set of concrete data form[s] the sole basis for determining the quantity of illegally prescribed drugs[, in order] [f]or a prescription to be included in relevant conduct, the court must evaluate the facts surrounding that particular...

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