United States v. Fishman
| Docket Number | 20-cr-160-7 (MKV) |
| Decision Date | 07 July 2023 |
| Parties | UNITED STATES OF AMERICA, v. SETH FISHMAN, Defendant. |
| Court | U.S. District Court — Southern District of New York |
OPINION & ORDER ON FORFEITURE
The defendant, Seth Fishman, was a licensed veterinarian, but he did not practice veterinary medicine for many years before his arrest. Instead, Dr. Fishman made and sold drugs designed to enhance the performance of racehorses and to evade regulatory scrutiny. After a jury trial, he was convicted of two counts of conspiracy to commit drug adulteration and misbranding with the intent to defraud or mislead, in violation of 18 U.S.C. § 371 and 21 U.S.C. §§ 331 and 333.
At Dr Fishman's sentencing, on the consent of both parties, the Court issued a Preliminary Order of Forfeiture/Money Judgment in the amount of $13,503,176.20 [ECF No. 887 (“POF”)], representing the value of the adulterated and misbranded drugs that were sold or otherwise dissipated during the course of the two conspiracies. The Indictment contained forfeiture allegations, and the defense never objected to the forfeiture proposed by the government and contemplated by the Presentence Investigation Report at any point in advance of Dr. Fishman's sentencing. However, after the Court sua sponte raised questions about the amount of forfeiture, the defense requested an opportunity to revisit “the addition that leads to the number of $13.5 million in total” [No. 901 (“Sentencing Tr.”) at 18:14-17].
As such, the Court, on the consent of both parties, gave the parties time to confer about the amount of the preliminary order of forfeiture and either “consent to the calculation of that amount,” or request an amended money judgment or a hearing on the correct amount of the forfeiture in this case. Sentencing Tr. at 92:7-16; 97:22-98:4. Thereafter, Dr Fishman hired new counsel (for the second time), who instead filed a brief arguing that the statutes of conviction do not authorize forfeiture, without addressing the correct amount of any forfeiture. Following significant delays to accommodate the defense, the Court held a forfeiture hearing. The Court heard arguments on whether any forfeiture is permissible and, if so, the appropriate amount of the forfeiture in this case. After the hearing, the government submitted additional evidence in response to voluminous data that the defense first shared with the government shortly before the hearing.
The Court has painstakingly reviewed the governing law, the trial record, and the evidence presented in connection with the forfeiture hearing, including line-by-line review of various drugs and non-drug items Dr. Fishman's company sold during the relevant period. For the reasons set forth below, the Court rules that: (1) adulterated and misbranded drugs are “forfeitable pursuant to 21 U.S.C. § 334(a),”[1] and two other statutes, 28 U.S.C. § 2461(c) and 21 U.S.C. § 853, authorize the Court to impose a money judgment representing the approximate value of adulterated and misbranded drugs that Dr. Fishman caused to be sold or otherwise dissipated; and (2) in this case, the government has carried its burden to show that Dr. Fishman sold or dissipated approximately $10,312,627.40 worth of adulterated and misbranded drugs.
The defendant, Seth Fishman, was convicted at trial of two counts of conspiracy to commit drug adulteration and misbranding with the intent to defraud or mislead, in violation of Title 18, United States Code, Section 371 and Title 21, United States Code, Sections 331 and 333. Dr. Fishman was also convicted of the continued commission of one of the conspiracies while he was on pretrial release in violation of Title 18, United States Code, Section 3147. The evidence at trial demonstrated that Dr. Fishman was a licensed veterinarian but he did not practice veterinary medicine during the relevant period. Rather, Dr. Fishman led a conspiracy, with his co-defendant Lisa Giannelli and others, to use his company Equestology to make and sell custom drugs that he had designed to enhance the performance of racehorses and to evade detection by racing-industry tests for performance enhancing drugs (“PEDs”). Dr. Fishman and Ms. Giannelli also used Dr. Fishman's veterinary license to sell prescription animal drugs that trainers administered to horses that Dr. Fishman had never medically evaluated.
The evidence at trial further demonstrated that, in addition to leading his own conspiracy, Dr. Fishman participated in a conspiracy led by Jorge Navarro, a successful thoroughbred trainer who was notorious for “doping” the horses in his care with PEDs. Dr. Fishman sold adulterated and misbranded PEDs to Mr. Navarro. Indeed, when a horse Mr. Navarro trained won a $2 million purse, Mr. Navarro credited Dr. Fishman as “a big part of it” [GX 401].
The evidence at trial demonstrated that Dr. Fishman sold and distributed drugs that were adulterated and misbranded in several ways. See, e.g., 21 U.S.C. §§ 321(g)(1)(B)-(C), 321(k), 321(m), 321(n), 331(a), 351(a)(5), 352(a)-(c), 352(f), 352(o), 353(b)(1), 353(b)(4)(A), 353(f), 360b. First, testimony from expert witnesses demonstrated that Dr. Fishman's custom PEDs were “new animal drugs” that were neither approved by the Food and Drug Administration (“FDA”), nor “generally recognized as safe and effective” for any intended use. Fishman Trial Tr. [ECF No. 749] at 393:11-19, 395:5-16, 396:6-12, 400:2-5, 437:3-439:22; see Fishman Trial Tr. [ECF No. 751] at 605-621; see also 21 U.S.C. §§ 351(a)(5), 360b.
In addition, the evidence at trial demonstrated that Dr. Fishman's custom PEDs were not labeled in accordance with FDA requirements. See 21 U.S.C. §§ 352(a)-(c), 352(f). For example, instead of disclosing the ingredients of the drug, the label for Dr. Fishman's “HP Bleeder” drug stated: “This product contains no known testable ingredients” and described the ingredients only vaguely as a “[p]roprietary blend of complex amino acid structures.” Fishman Trial Tr. [ECF No. 749] at 438:11-14 [GX 1018]. Other products bore similar labels. Moreover, Dr. Fishman's custom PEDs were adulterated and misbranded because they were made in facilities that were not registered with the FDA. See 21 U.S.C. § 352(o).
The evidence at trial further demonstrated that Dr. Fishman distributed adulterated and misbranded drugs when he dispensed prescription animal drugs, either personally or through Ms. Gianelli. See 21 U.S.C. § 353(f). As the Court instructed the jury, a prescription animal drug must be either administered by a veterinarian, or dispensed pursuant to a valid prescription, meaning it is prescribed “in the usual course of professional practice by a licensed veterinarian for a legitimate medical purpose [and] based upon a bona fide veterinarian-client/patient relationship.” Fishman Trial Tr. [ECF No. 759] at 1306:16-1307:13. Furthermore, it was established at the trial that any drug that must be administered via injection or nasogastric tube requires a prescription. See Fishman Trial Tr. [ECF No. 749] at 419:8-420:22.
The evidence at trial clearly demonstrated that Dr. Fishman did not have any bona fide veterinarian-client/patient relationships during the relevant period. He was not in the practice of examining or treating animals at that point in his career. For example, the government introduced a recording of an intercepted phone call in which Dr. Fishman boasted that he “doesn't . . . touch horses” [GX 912-T]. Similarly, a witness at the trial, Adrienne Hall, testified that she sought to have Dr. Fishman examine one of her horses but she was informed that “he doesn't do that type of work anymore.” Fishman Trial Tr. [ECF No. 753] at 793:10-19.
Another witness at Dr. Fishman's trial, a former standardbred racehorse trainer named Ross Cohen, testified that he purchased from Ms. Giannelli a variety of injectable prescription drugs- including injectable vitamins, phenylbutazone, flunixin, and banamine-in addition to some of Dr. Fishman's custom PEDs. Fishman Trial Tr. [ECF No. 751] at 669:3-13 (), 669-676. Mr. Cohen also testified that Dr. Fishman came to his barn once but did not examine any horses. Fishman Trial Tr. [ECF No. 751] at 673:9-15. Mr. Cohen testified that he did not have prescriptions for the drugs Ms. Giannelli sold him and that the bottles listed Dr. Fishman as the prescribing doctor. Fishman Trial Tr. [ECF No. 751] at 670:1-3, 676:25-677:1, 677:4-6. Mr. Cohen testified that he administered the prescription drugs himself. Fishman Trial Tr. [ECF No. 751] at 672:2-3.
Notably for purposes of calculating the forfeiture, Equestology also distributed products other than adulterated and misbranded drugs, including, for example, needles and syringes. There was little, if any, evidence about such products at Dr. Fishman's trial. However, at Ms. Giannelli's trial, her attorney adduced evidence about the full range of products she sold for Equestology. Ms. Giannelli's attorney offered evidence that Ms. Giannelli used a database called the Avimark system to keep track of the orders she placed on behalf of Equestology clients (predominantly trainers of racehorses) from several pharmacies and from Dr. Fishman personally, along with the prices of the products she ordered. See Giannelli Trial Tr. at 904:7-907:7. Ms. Gianelli sold not only Dr. Fishman's custom PEDs, but also numerous prescription drugs that she ordered from pharmacies using Dr. Fishman's veterinary licenses, as well as non-drug items such as syringes. See Giannelli Trial Tr. at 964:15-22; Giannelli Trial Tr. at 256:18 (...
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