United States v. Gurry
| Decision Date | 05 March 2020 |
| Docket Number | Criminal Action No. 16-cr-10343-ADB |
| Parties | UNITED STATES OF AMERICA, v. MICHAEL J. GURRY, RICHARD M. SIMON, SUNRISE LEE, JOSEPH A. ROWAN, and JOHN KAPOOR, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
BURROUGHS, D.J.
On May 2, 2019, a jury convicted Defendants Michael Gurry, Richard Simon, Sunrise Lee, Joseph Rowan, and John Kapoor (collectively, "Defendants") of conspiring to violate the Racketeer Influenced and Corrupt Organizations ("RICO") statute, 18 U.S.C. § 1962(d). Each of the Defendants, along with cooperating defendants Alec Burlakoff and Michael Babich, was subsequently sentenced to a term of imprisonment followed by a period of supervised release. [ECF Nos. 1141, 1162, 1202, 1163, 1181, 1173, 1175 at 60-61].
Presently before the Court are the Defendants' motions to stay their sentences pending appeal. [ECF Nos. 1142, 1189, 1209, 1217, 1221]. Because the appeals do not raise a substantial question of law or fact that is likely to result in reversal, an order for a new trial, or a sentence that does not include a term of imprisonment, the Defendants' motions, [ECF Nos. 1142, 1189, 1209, 1217, 1221], are DENIED.
After a fifty-day trial, a jury convicted Defendants Gurry, Simon, Lee, Rowan, and Kapoor of conspiring to violate the RICO Act in violation of 18 U.S.C. § 1962(d). [ECF No. 841 at 2-6]. The jury found that Simon, Lee, Rowan, and Kapoor had conspired to commit each of the charged predicate acts, which included illegal distribution of a controlled substance, mail fraud, wire fraud, and honest services mail fraud and wire fraud, and that Gurry had conspired to commit the predicate acts of mail fraud and wire fraud. [Id.]. All five Defendants moved for judgment of acquittal and for a new trial. See [ECF Nos. 859-64]. On November 26, 2019, the Court granted a partial judgment of acquittal in the cases of Kapoor, Simon, Lee, and Rowan, and vacated the Controlled Substances Act and honest services fraud convictions, but otherwise denied the motions. [ECF No. 1028].
In January 2020, all of the Defendants, along with cooperating defendants Burlakoff and Babich, were sentenced. Gurry was sentenced to thirty-three months' imprisonment followed by three years of supervised release. [ECF No. 1141]. Simon was sentenced to thirty-three months' imprisonment followed by three years of supervised release. [ECF No. 1162]. Lee was sentenced to a term of imprisonment of one year and one day followed by three years of supervised release. [ECF No. 1202]. Rowan was sentenced to twenty-seven months' imprisonment followed by three years of supervised release. [ECF No. 1163]. Kapoor was sentenced to sixty-six months' imprisonment followed by three years of supervised release. [ECF No. 1175 at 60-61].1 The Defendants now argue that their sentences should be stayedpending their appeals, as there is a possibility that they could serve the entirety of their sentences before the appellate court renders a decision. See [ECF Nos. 1142, 1189, 1209, 1217, 1221].
In accordance with the Bail Reform Act of 1984, defendants that have been convicted and sentenced to a term of imprisonment are generally to be detained pending appeal. See United States v. Bayko, 774 F.2d 516, 522 (1st Cir. 1985) (citing 18 U.S.C. § 3143(b)). The First Circuit has explained that the Bail Reform Act creates "no presumption in favor of release pending appeal; on the contrary, even when the conviction does not involve a crime of violence or drug offense, detention (following conviction and sentencing) is mandatory unless the judicial officer finds" that one of the enumerated exceptions applies. United States v. Colon-Munoz, 292 F.3d 18, 20 (1st Cir. 2002). Under 18 U.S.C. § 3143(b), the Court must "order that a person who has been guilty of an offense and sentenced to a term of imprisonment, . . . be detained," unless the Court determines: (A) "by clear and convincing evidence" that the person is not a flight risk or a danger to the community; and (B) "that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in (i) reversal, (ii) an order for a new trial, (iii) a sentence that does not include a term of imprisonment," or (iv) a reduced sentence that would be less than the time already served. 18 U.S.C. § 3143(b)(1).2
The Government does not argue that Gurry, Simon, Lee, or Rowan are flight risks. See generally [ECF Nos. 1183, 1224, 1226, 1227]. Though the Government contends that Kapoorhas failed to demonstrate by clear and convincing evidence that he is not a flight risk, [ECF No. 1218 at 15], the Court has already determined that Kapoor is neither a flight risk nor a danger to the community. See [ECF No. 844, 5/2/19 Trial Tr. at 11:18-12:2; ECF No. 1175, 1/23/20 Sentencing Tr. at 62:21-63:1]. Further, it is uncontested that the Defendants' appeals were not filed merely for the purpose of delay. See generally [ECF Nos. 1183, 1218, 1224, 1226, 1227]. Therefore, the Defendants must demonstrate that their appeals raise a question of law that is likely to result in reversal, a new trial, or a sentence that does not include incarceration. 18 U.S.C. § 3143(b)(1)(B)(i)-(iii).
In order to justify a stay of sentencing, an appeal must present a "'close' question or one that very well could be decided the other way . . . ." Bayko, 774 F.2d at 522 (quoting United States v. Giancola, 754 F.2d 898, 901 (11th Cir. 1985)); see also United States v. Zimny, 857 F.3d 97, 100 (1st Cir. 2017) (quoting Bayko, 774 F.2d at 522). "A defendant seeking the benefit of the exception has the burden of establishing the factual predicate for the exception." United States v. Carpenter, No. 04-cr-10029, 2014 WL 2178020, at *4 (D. Mass. May 23, 2014) (citing Morison v. United States, 486 U.S. 1306, 1306-07 (1988)).
The First Circuit has interpreted 18 U.S.C. § 3143(b)(1)(B) as encompassing two distinct requirements: "(1) that the appeal raise a substantial question of law or fact and (2) that if the substantial question is determined favorably to defendant on appeal, that decision is likely to result in" acquittal, a new trial, or a reduced sentence. United States v. DiMasi, 817 F. Supp. 2d 9, 13 (D. Mass. 2011) (quoting Bayko, 774 F.2d at 522).
The Defendants raise a number of issues that they will present on appeal, "all of which have, of course, been previously addressed" by the Court. Carpenter, 2014 WL 2178020, at *4.The Defendants argue, first, that they were prejudiced by evidentiary spillover from the now-vacated Controlled Substances Act and honest services fraud charges; second, that there was insufficient proof that mailings were used to further the insurance fraud; third, that the wire fraud predicate is bared by the intracorporate conspiracy doctrine; fourth, that the Government's improper statements in rebuttal were prejudicial; and, fifth, that there was insufficient evidence to support the convictions. Additionally, Simon argues that he was prejudiced by his trial counsel's alleged conflict of interest. The Court considers these arguments collectively when possible and notes any differences in the Defendants' arguments when necessary.
The Defendants first argue that they were prejudiced by evidentiary spillover from the now-vacated Controlled Substances Act ("CSA") and honest services fraud ("HSF") violations. Kapoor, for example, argues that, "[a] substantial question exists whether the sur[v]iving insurance fraud verdict can stand given the nature and extent of the government's presentation at trial on the now-rejected CSA and HSF allegations." [ECF No. 1189 at 8]. Gurry similarly argues that emotional testimony from former Subsys patients was admitted in error, which "invited the jury to convict Mr. Gurry on an improper emotional basis . . . ." [ECF No. 1142 at 8]. The other Defendants join in the arguments. See [ECF No. 1209 at 7; ECF No. 1217 at 6-7; ECF No. 1221 at 17]. A defendant cannot succeed on a claim of prejudicial spillover unless the prejudice was "so pervasive that a miscarriage of justice looms." United States v. Paz-Alvarez, 799 F.3d 12, 30 (1st Cir. 2015) (quoting United States v. Levy-Cordero, 67 F.3d 1002, 1008 (1st Cir. 1995)). Courts have concluded that where the dismissed "and the remaining counts arise out of similar facts, and the evidence introduced would have been admissible as to both, the defendant has suffered no prejudice." United States v. Rooney, 37 F.3d 847, 855-56 (2d Cir.1994) (collecting cases). In this case, the Court found that "the patient evidence [the Defendants] object to would likely have been admissible against [them] even if the trial were only on the ordinary mail and wire fraud predicates because the Government could have used the testimony to show a patient's history of cancer or lack of dysphagia." [ECF No. 1028 at 41]. The Defendants now argue that even if the evidence would be admissible to demonstrate the patient's medical history, evidence concerning the effects of the patient's addiction would still be inadmissible. See, e.g., [ECF No. 1189 at 12; ECF No. 1217 at 11].
The Court allowed the Government to "present evidence concerning the medical care that patients received from co-conspirator physicians, or the medical status of patients to show that prescribing was not medically necessary or was in excess of what was medically necessary." [ECF No. 676 at 2]. The patient testimony was admitted, in accordance with the Court's motion in limine ruling, for the purpose of demonstrating that certain Subsys prescriptions "were not medically necessary or were excessive," and to show that the patients' medical status was different than what had been reported through the Insys...
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