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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNITED STATES OF AMERICA
Plaintiff,
v.
No. 13-cr-20600
Hon. Paul D. Borman
FARID FATA, M.D.,
Defendant.
________________________________/
The United States’ Response
To Defendant’s Sentencing Memorandum
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Table of Contents
Table of Authorities ................................................................................................. iii
I.
Summary of Argument ....................................................................................1
II.
Sentencing Guidelines .....................................................................................1
A.
B.
III.
Amount of Loss .....................................................................................1
1.
Parties’ Stipulation ......................................................................1
2.
MHO Billed and Was Paid by Patients and Coinsurers,
and Fata Supervised the Efforts ..................................................6
3.
The Scope of the Stipulated Mistreatments Is Misstated
by Fata’s Sentencing Memorandum ...........................................9
Leadership Role...................................................................................10
Section 3553(a) Issues ...................................................................................11
A.
Fata’s “Estimate” of Mistreatments Based on Victim Impact
Statements ...........................................................................................11
1.
553 Confirmed Victims .......................................................................11
2.
Fata Expert File Review ......................................................................12
a.
Fata Mistreated Solid Tumor Patients ......................................13
b.
Fata Mistreated Patients His Expert Felt Were
“Appropriately” Treated ...........................................................18
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c.
3.
IV.
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Fata’s Expert Previously Defended Medically
Inappropriate Treatments ..........................................................20
Victim Impact Statements: Confirmed Victims vs. Unconfirmed
Victims ................................................................................................21
Comparative Sentences..................................................................................23
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Table of Authorities
Cases
B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587 (6th Cir. 2001) .....................4
Gall v. United States, 552 U.S. 38, 54 (2007) .........................................................25
Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52 (1995). ..............................4
United States v. Ana Alvarez, No. 08-20270 (S.D. Fla) ..........................................26
United States v. Antonio Macli, No. 11-20587 (S.D. Fla) .......................................28
United States v. Cannon, 552 Fed. App’x. 512 (6th Cir. 2014) ..............................25
United States v. Conatser, 514 F.3d 508 (6th Cir. 2008) ........................................25
United States v. Courtney, 240 F. Supp. 2d 1052 (W.D. Mo. 2002) .......................27
United States v. Duran, No. 10-20767 (S.D. Fla.)...................................................29
United States v. Kushner, No. 11-20587 (S.D. Fla.) ...............................................28
United States v. Madoff, No. 09-00213 (S.D.N.Y. 2009) ........................................30
United States v. Marianella Valera, No. 10-20767 (S.D. Fla.) ...............................29
United States v. Moon, 05-cr-00003 (M.D. Tenn) ...................................................27
United States v. Norman Schmidt, No. 04-00103 (D. Colo 2008) (330 years) .......30
United States v. Roger Charles Day, No. 07-00154 (E.D. Va. 2011) .....................30
United States v. Sabit, No. 14-20779 (E.D. Mich.) .................................................24
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United States v. Stanford, No. 09-00342 (S.D. Tex. 2012) .....................................30
United States v. Stokes, 392 Fed. Appx. 362 (6th Cir. 2010) ..............................7, 23
United States v. Tisdale, 239 F. App’x 962 (6th Cir. 2007) ....................................25
United States v. Williams, No. 09-00213 (D. Md. 2012).........................................30
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Summary of Argument
The government addresses several matters of dispute in the defendant’s
sentencing memorandum (under seal due to private patient information), first with
respect to Guidelines disputes over the amount of loss and leadership role, and then
with respect to several non-Guidelines issues that are relevant to consideration of
the 3553(a) factors. Finally, the government addresses some of the comparative
sentences offered by the defendant.
II.
Sentencing Guidelines
A.
Amount of Loss
1.
Parties’ Stipulation
Fata pleaded guilty to 16 counts of the indictment (13 health care fraud,
two promotional money laundering and one conspiracy to pay or receive
kickbacks) without a plea agreement or any promises from the government. The
government and defendant entered into a stipulation regarding a number of
issues, one of which now is in dispute.
The defense now claims the stipulation negotiated by the parties reflects a
“core intent” of billed versus paid loss amounts only and prohibits the Court
from considering the “allowed amount” for purposes of determining loss. See
Defendant Farid Fata’s (Under Seal) Sentencing Memorandum (Fata Memo) at
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9-11. Neither the government’s argument nor the Court’s application of the
allowed amount (should it choose to apply that amount) violates the letter or the
spirit of the stipulation entered into by the parties.
The part of the stipulation in dispute relates to the scope of Fata’s
unnecessary treatments – specifically which of those would be considered part of
relevant conduct and accordingly be counted toward his amount of loss and
number of victims. Given that Fata did not plead to an agreement, the
government is required, and was prepared, to prove by a preponderance of the
evidence each category of unnecessary treatment that should contribute to his
Guidelines range with respect to amount of loss and number of victims. Indeed,
this is the reason the parties originally requested two weeks to complete the
sentencing hearing.
Defense counsel approached the government about entering into a
stipulation delineating the scope of unnecessary treatments so that a protracted
evidentiary hearing would not be required. Certain concessions were made by
each side – for instance, the government’s experts took the position that Aloxi
(an anti-nausea medication) should be given no more than once every five days.
The defendant maintained that because Aloxi has a half-life of 40 hours, in
certain cases, every three days could be appropriate. The government does not
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have the resources for a file-by-file review of Aloxi, and agreed to use a figure
obtained from the data of Aloxi given more than once every three days. The
negotiations eventually led to the universe of stipulated relevant conduct that
includes the loss amounts and number of confirmed victims.
The stipulation defined the scope of known unnecessary treatments that
the defendant administered. Fata benefitted from the bargain insofar as the
government could undoubtedly engage (with some limitation on resources) in an
endless review of files to increase the loss amount.1 The parties have finality on
the scope of the treatments from which to argue their positions as to the legally
correct analysis of loss. Here, the government offers that the billed amount is
most appropriate, given that the loss is necessarily undercounted, (United States’
Sentencing Memo (U.S. Memo) at 59-64) or, in the alternative, the allowed
amount is appropriate as it captures both what Fata was paid and what he sought
from co-insurers and from patients through co-pays. Id. at 55-58.
To support its current position, the defense portrays the nature and
background of the stipulation in a manner suggesting it was the weaker party and
1
By way of example, the government’s expert Dr. Dan Longo recently
reviewed the patient files of Jessica Arsenault and Jack Fields who were not
included in the amount of loss or number of “confirmed” victims after they
submitted Victim Impact Statements. His opinion is that both were mistreated.
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unable to clarify or bargain with the government when the facts are quite to the
contrary. During all phases of the negotiation process, the defense was an equal
partner in the drafting process and the government made it patently clear
throughout the negotiations that it would rebut the defense amount paid
argument, because $17,601,233 grossly understates the amount Fata intended to
collect during his scheme. Now, the defense labels the figure “in direct conflict”
with the stipulation even though that amount is substantially lower than the
highest figure ($34,704,392) permitted by the stipulation. See Fata Memo at 11.
The defense urges the Court to apply the contract law principle of contra
proferentem and conclude that each party could submit only one figure regarding
the amount of loss and no others. See Fata Memo at 11 n.1. The Supreme Court
has explained that the rationale for applying contra proferentem “is to protect the
party who did not choose the language . . . from an unintended or unfair result.”
Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52, 63 (1995). However,
contra proferentem applies only where the complaining party signs an adhesion or
form contract drafted by the opposing side containing an ambiguity and when the
complaining party engaged in no actual bargaining and had no bargaining power.
See, e.g., B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 597 (6th Cir. 2001)
(“[t]he rule is ‘often invoked in cases of standardized contracts,’ or where ‘the
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drafting party has the stronger bargaining position,’ such that the rule is ‘hard to
distinguish from a denial of effect to an unconscionable clause.’”) (quoting
Restatement (Second) of Contracts § 206 cmt. a (1981)); Northbrook Excess and
Surplus Ins. Co. v. Proctor & Gamble Co., 924 F.2d 633, 639 (7th Cir. 1991)
(contra proferentem not applied where complaining party was the co-drafter of a
contract, given customized language at its insistence, and not “simply a party given
a take-it-or-leave-it option”).
In this case, the stipulation was negotiated by the two parties equally and
with drafting and editing by both sides. There was no standardized form and the
government was not in any stronger bargaining position than the defense. As the
defense acknowledges, “after numerous meetings and discussions counsel entered
into a stipulation.” See Fata Memo at 9. More specifically, the defense fails to fully
disclose to the Court these crucial facts: while the government composed the first
draft and submitted the final stipulation to the Probation Department, the parties
engaged in numerous e-mail and telephone exchanges reviewing, commenting, and
changing the wording of the stipulation in between the first draft and the final
submission.
Furthermore, after the government filed its sentencing brief, defense counsel
communicated to the government their opinion that the allowed amount figure
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conflicted with the stipulation. Their concern was reviewed by trial counsel and by
United States Attorney’s Office management, who met with defense counsel. Each
reviewer agreed that the allowed amount figure was properly proposed to the Court
to rebut the amount paid argument. Each reviewer further agreed that the
government’s right to make such an argument was not negotiated away by the
government, and that the government communicated to the defense at every
opportunity that it could and would make any arguments within the scope of the
confirmed/stipulated mistreatments.
Nevertheless, given the defendant’s position, the government repeatedly
offered the defense the opportunity to withdraw from the stipulation as a remedy.
The defense has repeatedly declined to do so.
Accordingly, the stipulation does not in any way prohibit the Court from
considering or concluding that that a 22-level adjustment applies based upon the
allowed amount figure of $20,189,563.
2.
MHO Billed and Was Paid by Patients and Coinsurers, and
Fata Supervised the Efforts
Fata argues that if the government had evidence of his efforts to “capture”
copays from the patients, it would have “included more than a couple of emails.”
See Fata Memo at 12. The government has already submitted ample evidence that
Fata was highly concerned with collecting from his patients. Compare United
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States v. Stokes, 392 Fed. Appx. 362, 369 (6th Cir. 2010) (no error in district court
finding that 250 patients were victims of fraud because “no evidence suggested
that [physician] excused his patients” from making required copays to Medicare
and Blue Cross). Nevertheless, it includes the following additional information
regarding his collection from both patients and co-insurance:
Fata’s billing records were maintained in the electronic medical records and
in a billing department that employed numerous people by the time he was
arrested. Fata himself assigned the billers to their various roles in the department in
September 2011. The government was only recently able to access the patient
billing portion of Fata’s electronic medical records due to technology compatibility
issues, and was only able to access the information by printing out paper copies of
the billing records. Printouts of the patient information for the 553 identified
victims alone fill up multiple banker’s boxes. Billing records reflect that copayments were most certainly collected from patients and co-insurance from Blue
Cross Blue Shield, as well as any number of other co-insurers. Fata’s account
receivable records show that over 100 insurers were being billed by and paying
MHO.
As part of their duties, the billers were required not only to submit billing,
but also to deal with problems in collecting accounts receivable, sometimes leading
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to write-offs. The write-off of any type of debt owed to MHO – insurance, coinsurance or co-pay – had to be personally approved by Fata. A standard form was
created for write off requests that Fata reviewed and then initialed with an “F.”
This was true of not only insurer write offs, but also secondary co-insurance write
offs. It was true of tertiary insurance write offs. It was true of co-pay write offs,
including the accounts of dead patients that sometimes totaled as little as $22.
Furthermore, multiple write offs that Fata approved stated that payments were
capped by the allowed amount. In other words, Fata fully understood that the
allowed amount – what the primary insurer paid plus co-insurance and patient copays– was the actual sum he could expect to receive through all parties he billed.
Fata also approved write off requests for confirmed victims, sums that he
had billed but was unable to collect on because of billing issues. These rejected
claims are yet another reason that the billed (or allowed) amount is most
appropriate, as the paid amount does not reflect instances where Fata sought
payment from insurers and the charges were rejected and had to be written off. A
huge number of write off requests were generated at MHO, all for Fata’s review.
Every one of them represents money that Fata sought through MHO and
demonstrates his full understanding of the total sums he could expect from all
parties – insurer, co-insurers and patient.
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Fata knew every aspect of MHO’s business, controlled every aspect, and
sought every dime he could from insurers, co-insurers, patients and charitable
foundations. It is only appropriate that he be held to the amount he sought from all
of these parties (undercounted though it may be).
3.
The Scope of the Stipulated Mistreatments Is Misstated by
Fata’s Sentencing Memorandum
Fata’s sentencing memorandum misstates the scope of the mistreatments that
were the subject of the parties’ stipulation. For example, the memorandum states
that “the stipulation submitted to probation on the loss amount does not include
any unnecessary Neulasta treatments.” See Fata Memo at 37. This is flatly wrong.
The stipulation includes not only the unnecessary Neulasta injection to which Fata
pled guilty to administering to Wayne D’Autremont [Count 3], but also those
injections that he gave as part of all of the mistreated MDS patients’ care. See U.S.
Memo at 18-22. The mistreated MDS patients (who number in the dozens) were
regularly dosed not only with inappropriate chemotherapy, but also a host of other
supportive medications that were not necessary. All of the unnecessary
medications, including Neulasta, Aranesp (a red blood growth factor), the antinausea medications and any other treatments given to the MDS patients were
included in the amount of loss. This was conveyed repeatedly to counsel in the
stipulation discussions and included in the data and spreadsheets that they
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reviewed prior to entering into the stipulation, contrary to their current assertion
that the government “failed to identify” any patients other than D’Autremont. Fata
Memo at 37-38.
The memorandum lists a host of reasons why Neulasta can be appropriately
administered, but fails to address the fact that Fata did not administer it in these
settings. See Fata Memo at 38-39. The inappropriate administration of Neulasta is
a part of both Fata’s guilty plea and his stipulated relevant conduct.
Fata’s memorandum defends his treatment of acute myeloid leukemia
(AML) patients. See Fata Memo at 39-40. Once again, Fata stipulated to his
mistreatment of these patients as part of the parties’ agreement. See U.S. Memo at
29-30. Given Fata’s insistence that the government has violated the “spirit” of the
parties’ stipulation with respect to its argument on the legal analysis of loss
amount, it is puzzling that he seeks now to refute the core factual issues to which
he stipulated. Nevertheless, for all of the reasons set forth by the government and
its expert in its prior Sentencing Memorandum, the AML patients are and were
victims of inappropriate treatments that benefitted Fata. See id.
B.
Leadership Role
Fata disputes the importance of unwitting employees to his kickback
conspiracy. See Fata Memo at 15. As was set forth in the prior Sentencing
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Memorandum, Fata did not evaluate and treat any patients alone. Nurse
practitioners saw his new patients, unlicensed physicians saw the existing patients,
and Swan for Life social workers counseled the patients throughout their care.
These employees took Fata’s orders to send the patients to Guardian Angel; they
had to field the complaints, and manage their treatment in conjunction with
Guardian Angel. Fata’s value to Guardian Angel’s owner, Sam Kassab, was only
insofar as he could keep sending patients to Kassab’s businesses in exchange for
kickbacks. Keeping the patients at MHO and going to Guardian Angel could only
be accomplished with the assistance of MHO’s staff, particularly the medical staff.
III.
Section 3553(a) Issues
A.
Fata’s “Estimate” of Mistreatments Based on Victim Impact
Statements
1.
553 Confirmed Victims
There are 553 individual patient victims (“confirmed” victims) in this case
that were identified through patient file review and analysis of the data based on
known mistreatment. The mistreatment of the patients included in that figure was
all stipulated to by the defendant. Although Fata now claims that the government
“fails to state how it arrived at this figure” (Fata Memo at 17), the government
clearly stated how it arrived at the 553 in its sentencing memorandum’s section on
Amount of Loss. The government set forth, in detail, through both a chart and
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summaries the stipulated mistreatment billing and paid amounts based on (1)
patient file review and (2) data analysis of known/agreed-upon mistreatments. See
U.S. Sentencing Memo at 51-52. “Based on this analysis, 553 patient victims
have been identified.” Id. at 52 (emphasis added). The 553 “confirmed” patient
victims are not based on the number of victim impact statements or even
information contained in them, contrary to Fata’s “assumption” that the number
includes the statements. See Fata Memo at 17. The 553 are based solely on the
government’s investigation and parties’ stipulation.
There are certainly more victims of Fata’s crimes, some of whom can be
identified in the victim impact statements, and some of whom may never be
identified for purposes of the criminal case. Accordingly, the Court should
consider the statements of unconfirmed victims who present information regarding
their own mistreatment.
2.
Fata Expert File Review
Fata’s expert has reviewed the files of 20 patients who submitted victim
impact statements or whose family members submitted statements, in an effort to
show that his mistreatment was not as widespread as his patients report. 2 Fata’s
2
Fata is also now splitting hairs about what he did to Robert Sobieray. See
Fata Memo at 34-36. According to Fata’s expert, it is Sobieray’s fault, and not
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expert Dr. Jack Goldberg defends 17 of the 20; he could not defend 3 of 20 files.
Counsel goes on to assert that because solid tumor patients did not form counts of
the indictment and his expert’s review justifies treatment of the 17 who wrote
victim impact statements, the Court can presume that the vast majority of his
patients were treated properly for their solid tumor cancers. See Fata Memo at 19.
The assumptions and presumptions Fata argues the Court should consider
are patently untrue. Fata mistreated cancer patients, non-cancer patients, solid and
non-solid tumor patients alike. His greed did not differentiate. Fata also mistreated
patients in the group that his expert now defends, although his lies to them are not
reflected in the files he maintained.
a. Fata Mistreated Solid Tumor Patients
Contrary to Fata’s assertion, the government has gathered significant
evidence that Fata mistreated solid tumor cancer patients in a variety of ways. And
Fata’s, that all of his teeth fell out or had to be extracted in less than a year. See id.
at Ex. E ¶¶ 9-12 (Report of Earl Bogrow, D.D.S.). Out of 32 teeth, Dr. Bogrow
identifies nine that were broken or had cavities. Id. ¶ 9. From this, he extrapolates
that Sobieray’s dental hygiene is at fault for all but two of his teeth having to be
extracted. Id. But even Dr. Bogrow admits that Fata’s administration of Zometa
caused the hole from Sobieray’s jaw to his sinuses. See id. at 25; Ex. E ¶ 13.
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in fact the indictment did contain instances of solid tumor patients who were
mistreated with unnecessary treatments.
First, Fata added unnecessary treatments such as iron and IV/IG to any
patients he could, without regard for whether they were solid tumor patients or not.
Second, whether or not Fata gave correctly indicated chemotherapy to particular
solid tumor patients, he manipulated end-of-life patients into taking the
chemotherapy not through considered discussion of palliative vs. non-palliative
care, but by promising them non-existent cures and a 70% chance of survival. See
id. at 30-34 (False Prognoses and Mistreatment of End-of-Life-Patients). Examples
of these false promises and false hopes abound, not just from the government’s
investigations, but also from news reports about Fata. See Ex. A (8/13/13 Detroit
Free Press article) (describing lung cancer patient who died four months after Fata
told her she had 70% chance of cure).
In one particularly horrific example, Fata told Sidney Centilli Jr., an 87-year
old WWII veteran with Stage IV pancreatic cancer that had spread to his liver, that
he could be cured. See Ex. B (8/13/13 Fox News article). According to Centilli’s
daughter, at some point during the treatment Fata told Centilli that the cancer had
been cleared from his liver and he was “basically cured.” Id. Centilli bought
balloons and a cake to celebrate. Id. Fata subjected Centilli to additional
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treatments, causing chest pain and fluid in his lungs. Id. After Centilli was
admitted to the hospital to drain the fluid, Fata told him he had three days to live.
Id. Centilli died a few days later, eleven months into his treatment with Fata,
having had no time to prepare for his death or to settle his affairs. Id. There is no
way to describe what Fata did to him as anything other than deliberate
mistreatment.
Third, while the government did not and could not pursue every line of
inquiry into Fata’s criminal behavior due to its extremely extensive nature, it
gathered evidence that strongly suggests Fata misdiagnosed and overtreated solid
tumor patients with medically unnecessary chemotherapy. A solid tumor diagnosis
is more difficult to falsify than a non-solid tumor because it is typically diagnosed
by a single pathology report (versus the liquid tumors which often require
interpretation of blood levels, bone marrow pathology reports and other conditions,
as described in the original Sentencing Memorandum). Despite this, Fata still
found ways to misdiagnose and overtreat solid tumor patients. Specifically, there is
evidence that Fata (1) misdiagnosed some patients with lung cancer, a cancer that
requires a heavy regimen of chemotherapy that he could bill through MHO, rather
than their real solid tumor cancer, (2) administered more chemotherapy than the
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solid tumor patient required, or (3) administered the incorrect chemotherapy for the
type of solid tumor the patient had.
A physician who took on several of Fata’s patients after he was arrested,
reported two occasions in which he discovered Fata misdiagnosed a patient with
lung cancer. The first time was when he was a Beaumont Hospital resident – the
doctor met a patient who had a low grade neuroendocrine tumor but had been
diagnosed by Fata with small cell lung cancer and treated with chemotherapy. The
patient was seen at Beaumont only after his insurance coverage ran out and he
could not longer pay Fata. The physicians at Beaumont put the patient on
observation, as he needed no treatment.
The physician did not know then that this was a pattern. After Fata’s arrest,
this physician saw T.S., a patient Fata diagnosed with Stage IV lung cancer, and
treated with both radiation and chemotherapy. (Fata owned Michigan Radiation
Institute, through which he also billed). The physician discovered that Fata had
purported to diagnose T.S. after a fine needle biopsy, and not a full excisional
biopsy that is actually necessary to diagnose the disease. When he did a proper
biopsy, the results showed that T.S. had a completely different cancer – a sarcoma
(cancer of connective tissue) for which the indicated treatment is surgery, not
chemotherapy, and certainly not the chemotherapy that Fata administered. T.S.’s
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tumor has been removed. But as of June 2014, his PET scan (which detects cancer
growth) was “lighting up” with signs of a possible return. With proper diagnosis
and treatment, T.S. would have had a much better chance of a positive outcome.
This physician describes Fata’s misdiagnosis and mistreatment of T.S.’s sarcoma
as “a disaster.”
The physician also began treating D.P. after Fata’s arrest. D.P. was treated
with radiation for his prostate cancer after which he should have been observed.
Nevertheless, Fata administered unnecessary prostate chemotherapy to D.P. At
some point during D.P.’s treatment, Fata inexplicably shifted to a regimen of lung
cancer chemotherapy. D.P. received 2-3 years of unnecessary chemotherapy. He is
now severely disabled with neuropathy, wheelchair bound, and convinced by
Fata’s lies that he needs chemotherapy. D.P. still asks the new physician for the
unnecessary chemotherapy.
Charles Charter, another former patient of Fata’s, reported that he was given
chemotherapy treatments for almost five years after undergoing surgery for his
pancreatic cancer. After Fata’s arrest, Charles Charter’s new treating physician
took him off chemotherapy. According to that physician, only six months of
chemotherapy should have been given. Charles Charter received over four years of
unnecessary chemotherapy from Fata. He suffers from severe neuropathy and he
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cannot work due to the effects it had on him as well as the amount of time he had
to spend at MHO to receive it. See also Charles Charter Victim Impact Statement
(VIS) (“I received an unnecessary 177 treatments of chemo.”).
Fata’s contention that he did not mistreat solid tumor patients is nonsense, a
desperate last minute attempt to distract from the reality of MHO. Every part of
Fata’s practice was tainted by his greed and fueled by financial decisions over
medical ones. Whether they were cancer or non-cancer patients, solid tumor or
liquid, Fata did not discriminate: his ultimate goal was to maximize his profit on
the backs of his patients.
b. Fata Mistreated Patients His Expert Felt Were
“Appropriately” Treated
Dr. Goldberg’s opinions with respect to the “randomly selected” 17 patients,
ironically, reveal the limited value of his patient file review without the full context
of the evidence in this case. In the case of one patient, Dr. Goldberg states that “Of
course, given that she was suffering from stage 4 [lung] cancer, death was
inevitable.” Fata Memo at 22. In the case of multiple patients with Stage IV nonsmall cell lung cancer or extensive small cell lung cancer (the functional equivalent
of Stage IV), Dr. Goldberg refers to the chemotherapy as “palliative” treatments
given the fact that these patients would necessarily die. Id. at 22, 24, 27, 28, 29. It
is highly unlikely that a patient knew that “of course” she was going to die or that
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any of these patients understood their treatment to be “palliative,” because Fata
told all his patients they had a 70% or greater chance of remission. In fact, one of
Dr. Goldberg’s “random” review patients is just such an example.
Dr. Goldberg opines that A.C., a Stage IV lung cancer patient, was given
appropriate “palliative” care. Fata Memo at 24. As his family has already
described, however, A.C. did not agree to “palliative” care, much less have any
idea that it was intended to be such. See U.S. Memo at 31-32. Fata promised him a
cure. Id. See also VIS, Stepdaughter of A.C. (Fata told A.C. with treatment, he
stood over a 75% chance of survival). Furthermore, Dr. Goldberg fails to address
whether it was necessary for Fata to administer chemotherapy to A.C. after he fell
and hit his head outside MHO before sending him to the hospital where he would
later die. See U.S. Memo at 32. The context of Fata’s treatments – the lies he told
and the information he withheld to get these patients to take them – matter as much
as the treatments themselves.
Fata’s patients’ families have all been left with questions – hard questions –
about how their loved ones’ lives could have been different if Fata had not been
treating them. They may not always be correct in believing that their relatives
would have survived under another doctor’s care. But it is a virtual certainty that
under the care of another doctor, their relatives would have known the truth about
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their conditions and made intelligent and informed decisions about their
treatments. It is a virtual certainty that with Fata, they did not.
c. Fata’s Expert Previously Defended Medically Inappropriate
Treatments
This is not the first opinion Fata’s expert has provided. In a disclosure to the
government prior to Fata’s plea, Dr. Goldberg defended all of the treatments
alleged in the Fourth Superseding Indictment as medically appropriate. Fata has
since admitted – either through his guilty pleas or by stipulation to relevant
conduct – that none of them were.
For example, Dr. Goldberg stated W.D. received Vidaza based on his ideal
body weight, rather than his actual body weight to explain the inappropriate doses.
In fact, Fata’s calculations, as shown by government expert Dr. Steensma, were not
based on any body weight calculation – ideal or actual. See U.S. Memo at 22-24
(Underdosed Patients). The doses were based only on what Fata could bill. Dr.
Goldberg also opined that “Vitamin B12 is a commonly used vitamin to protect
against neuropathy complications of Velcade.” This is a medically unsupported
statement. Vitamin B-12 injections can protect against neuropathy caused by
Vitamin B-12 deficiency. Vitamin B-12 can do nothing to protect a patient from
Velcade-induced neuropathy.
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In another instance, Dr. Goldberg defended Dr. Fata’s ordering of iron
infusions to patient W.V., stating that “if this patient did not receive IV iron
infusions, there was a risk that he would have developed symptomatic anemia in
the setting of cancer chemotherapy.” Approximately a month and a half later, Dr.
Fata pled guilty to ordering medically unnecessary iron infusions to W.V. on three
separate occasions. These examples illustrate the significant limitations of and
contradictions inherent in Dr. Goldberg’s analyses.
3.
Victim Impact Statements: Confirmed Victims vs.
Unconfirmed Victims
The victim impact statements do not all come from patients whose file or
data have been reviewed (what the government calls “confirmed” victims). Fata
argues that the government has included these letters in an effort to “portray[] Dr.
Fata in the worst possible light.” Fata Memo at 33. In fact, it is the government’s
responsibility under the Crime Victims’ Rights Act to provide these statements to
the Court and the Court’s responsibility to decide what weight to accord each
statement. Fata’s crimes were so voluminous and overwhelming that the
government does not have the resources to uncover every instance of his fraud and
mistreatment. It would be improper for the government to preclude any of Fata’s
patients or family members of patients from speaking directly to the Court through
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these statements, given how many victims must necessarily exist outside of the
limited file review and data analysis the government was able to perform. 3
Indeed, the victim impact statements of “unconfirmed” victims contain
numerous instances of patients who (1) were told by second opinion doctors that
they were mistreated and/or overtreated; (2) report types of treatment that are
known to have no justification, e.g. six week on/six week off Rituximab
treatments; or (3) were told lies that enabled Fata to persuade them to accept
treatment, such as giving false hope of a cure for their Stage IV cancers. The
government carefully chose to highlight in its attachment to the Sentencing
Memorandum those statements that came either from the 553 “confirmed” victims
or contained those indicia of fraud and mistreatment discussed above. See U.S.
Memo, Ex. A. Their grief and anguish speak volumes.
Fata diminishes the 553 known or confirmed victims as a “mere 3%” of his
enormous practice. Fata Memo at 17. What Fata fails to comprehend, even at this
late stage, is that he was not in a volume business. Each of the 553 known victims
and the countless unknown are (or were) patients who needed and trusted him.
Each of them had their bodies and trust horribly violated to feed his singular
3
The government will address in a separate filing the issue of victims
speaking at sentencing, as raised in conferences before the Court on June 25 and
26, 2015.
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avarice.4 There is no “mere” 3% any more than there is ever “merely” one victim
or there were “merely” 553.
Fata’s victims are not a number or an abstraction. They are and were women
and men, old and young, of every race, religion, creed, profession, temperament
and understanding. W.V. was a pastor with seven children. W.W. and J.M. are
grandfathers who are raising their grandchildren, in W.W.’s case he took in his
grandchild after his son died in an accident. Sidney Centilli was a WWII veteran, a
Purple Heart recipient who was wounded at Okinawa, a grandfather and greatgrandfather of 17. Not one of them deserved what Fata doled out.
IV.
Comparative Sentences
The defendant’s request for a 25 year sentence would create an unwarranted
sentencing disparity by allowing Dr. Fata’s egregious behavior to fall within the
range of sentences given in health care fraud cases that involve far less egregious
4
Fata’s counsel suggested on a June 26, 2015 teleconference that individuals
who received the unnecessary anti-nausea drug Aloxi should not be considered
victims because they “only” suffered side effects such as nausea and headaches.
Setting aside the fact that a patient billed for unnecessary treatments is a victim
because of pecuniary loss, United States v. Stokes, 392 Fed. Appx. 362, 369 (6th
Cir. 2010), this further attempt to diminish the victims’ pain is contrary to the
evidence. Indictment patient W.W. received daily Aloxi for years, as well as other
unnecessary anti-emetics, along with his unnecessary chemotherapy. He describes
agonizing pain and discomfort as a result of his constipation. From W.W.’s
statement, it also appears that Fata lied and told him the Aloxi was a weekly
treatment, when in fact his records reflect that he received it daily.
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conduct. Fata’s counsel concedes that “Dr. Fata’s conduct involves more than
simple fraud. Fata exploited patients by and administrating unnecessary treatments
– some of which carry with them the potential for serious side effects.” Fata Memo
at 54-55. Nevertheless, his memo attempts to compare him to 30 to 50-year
sentences involving conduct far less egregious. Id. at 55-63. Furthermore, no case
is analogous to the large scale harm perpetrated by Fata because: 1) Fata pled
guilty without the benefit of a negotiated plea agreement; 2) Fata’s Guideline range
is greater than all the cases cited by defense counsel; 3) Fata was the single
mastermind behind the fraud scheme, unlike some defendants cited who were
participants (and even leaders) in a broader conspiracy; 4) Fata caused a higher
loss amount and a larger number of victims than some defendants cited; and 5) the
harm perpetrated by Fata is unmatched by the cases cited by the defense.
The cases cited by Fata fall generally into two categories: physicians who
inflicted actual patient harm and defendants who did not. With respect to the first
category involving actual harm, Fata relies heavily on the Guideline range
contained in a plea bargain (with no sentence yet imposed) in United States v.
Sabit, No. 14-20779 (E.D. Mich.), without recognizing the implicit benefit to the
defendant in executing a negotiated plea agreement, rather than pleading to most of
the indictment as Fata did. As the Sixth Circuit has recognized, “[t]he whole point
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of the plea bargaining system is to treat a defendant more leniently if he pleads
guilty.” United States v. Cannon, 552 Fed. App’x. 512, 516 (6th Cir. 2014). See
also United States v. Conatser, 514 F.3d 508 (6th Cir. 2008) (recognizing that
pleading guilty and cooperating with the government could result in a lower
sentence without causing a sentencing disparity) (citing Gall v. United States, 552
U.S. 38, 54 (2007) (noting that because the guidelines take into consideration the
need to avoid unwarranted disparities, consideration of the properly calculated
guidelines range necessarily entailed consideration of the need to avoid
unwarranted disparities under § 3553(a)(6)). Defendants entering into a plea
agreement do not create a fair comparator to defendants who go to trial or who
plead guilty without an agreement or concessions from the government. See
United States v. Tisdale, 239 F. App’x 962, 969 (6th Cir. 2007) (when one codefendant executed a plea agreement, the court noted that “[t]he co-defendants’
cooperation with the government alone was a basis for the disparate sentences
imposed in this case.”). These same benefits are not conferred to a defendant who
pleads guilty to an indictment. Additionally, pursuant to the plea agreement,
Sabit’s Guideline range was 108-135 months, with fewer victims and fewer
sentencing enhancements. This highlights the second issue with Defendant’s
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comparators throughout his brief: their conduct simply is not comparable, as
reflected by the Guideline range.
The defendant also fails to highlight that the Court imposed a 30-year
sentence above the Guideline range to a physician involved in a far more common
and less egregious infusion therapy fraud. See Fata Memo at 56-57 (citing United
States v. Ana Alvarez, No. 08-20270 (S.D. Fla)). Dr. Ana Alvarez’s Guideline
range was 210-262 months based on an $11 million fraud, which included
fraudulent treatments referred by her co-conspirators for which she was held
responsible.
In fact, Alvarez’s comparatively less harmful conduct resulting in a 30-year
sentence demonstrates why Fata deserves a 175-year sentence. Alvarez was
employed for a brief five months at a fraudulent infusion clinic set up and operated
by co-conspirators who needed her merely to be a front, signing off on medically
unnecessary and often never-rendered infusions. Complicit Medicare beneficiaries
were paid kickbacks by recruiters to come to the clinic. And the loss amount
reflects billing for far more infusions than were actually administered: for example,
a single infusion might be given and one hundred infusions billed. Fata, by
contrast, mistreated patients for at least 7 years (Maggie Dorsey’s misdiagnosis of
multiple myeloma in 2006), inflicting far more harmful treatments on patients who
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had no idea they were being drawn into his scheme. And although Alvarez risked
harm to her patients, Fata inflicted deep harms on his that cannot even begin to be
compared.
With respect to other cases that involved actual harm or risk of harm to
patients, none is comparable. United States v. Moon, 05-cr-00003 (M.D. Tenn),
involved a far lower loss amount ($1.3 million) and the number of victims – “more
than 10” – created a significantly-lower Guideline range than present here, such
that 188 months was a within-Guideline range. The pharmacist in United States v.
Courtney, 240 F. Supp. 2d 1052 (W.D. Mo. 2002), who diluted chemotherapy
drugs received 30 years. In his case, however, there was a negotiated plea bargain
that included 160 incidents of dilution affecting 34 victims, not even comparable to
the scale of Fata’s harm. Nevertheless, the Court in that case departed upward from
the Guidelines to reflect the seriousness of Courtney’s conduct.
Fata underdosed cancer patients, just as Moon and Courtney did. By
contrast, however, Fata’s mistreatment was so widespread and egregious that the
underdosing is not reflected in the relevant conduct for purposes of his Guidelines
range, much less in the charges to which he pleaded. It is just one more instance
among the countless instances of fraud and mistreatment he perpetrated. Courtney
got a 30-year sentence and Moon 188 months for criminal conduct that is just one
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of a dozen or more types of mistreatment Fata engaged in. He should be punished
for all of them.
With respect to cases that did not involve medically unnecessary treatments,
Fata also fails to show any direct comparators, as there are none. For instance, in
United States v. Kushner, No. 11-20587 (S.D. Fla.), the defense fails to
acknowledge Dr. Kushner’s limited role in the scheme, or the 30-year sentence
given to one of his co-defendants who had a Guideline range of 292-365 months.
See Fata Memo at 58-60. See also United States v. Antonio Macli, No. 11-20587
(S.D. Fla) (30 years). Kushner, as compared to Fata, spent only two hours of his
time at the clinic each week, and claimed a “lack of knowledge” of the scheme.
Additionally, Kushner was 72 years old at time of sentencing, and as such, his 12year sentence equaled more than an effective life sentence. In providing a sentence
below that requested, the court considered a number of factors that are not present
in this case: the “fact that he did not receive any remuneration beyond his salary is
a reason to vary below the Guidelines. . . . I further find his honorable service in
the United States Army is a reason to consider to vary below the Guidelines. . . . I
also find his physical condition, not his age, but his physical condition, is
extraordinary enough to be given consideration to vary below the Guidelines.”
(Sentencing Tr. at 61-62). None of those factors are relevant here: Fata is 22 years
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younger than Kushner, was the organizer of the fraud, was the sole person to profit
from the fraud, did not serve in the United States Army and did not suffer any
physical ailments, such as seizures, while in custody. Thus, Kushner’s 12-year
sentence is not a relevant comparison.
Like Kushner, Fata’s comparison to United States v. Marianella Valera, No.
10-20767 (S.D. Fla.), fails to acknowledge Valera’s co-defendant, Lawrence
Duran, who was sentenced to 50 years imprisonment, or Valera’s secondary role in
the fraud. See United States v. Duran, No. 10-20767 (S.D. Fla.) (50 year sentence
for being the mastermind of the fraud). Valera and Duran were part of the ATC
healthcare fraud conspiracy, where Duran was considered by the Government,
Valera’s defense and the Court to be the chief mastermind of the scheme. As the
Government noted, “[Duran] was the idea man, he was the glad-hander, he was the
guy who made things happen. And that may warrant some disparity.” Because
Duran was sentenced to 50 years, and because Valera was the less culpable
participant, the court found her 35 years imprisonment to be reasonable. Unlike
Valera, however, Fata was the mastermind of the scheme and the “guy who made
things happen.” Furthermore, ATC is another example of a health care fraud billed
for intensive psychotherapy the patients did not receive and from which many
could not have benefitted because of their mental conditions. While some ATC
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patients were also subjected to unnecessary testing, such as sleep studies, they
were not subjected to even a fraction of what Fata’s victims suffered.
A sentence of 25 years would create a disparity by allowing the conduct
present here to fall within the range of conduct generally present in health care
fraud cases that either involve billing for services never rendered or for a far lesser
category of patient mistreatment and harm. A sentence of 175 years, however,
would not create such a disparity because, as noted in the Government’s opening
brief, and not rebutted by defendant, Fata’s conduct is most comparable to
financial crimes that ruined hundreds of individuals’ lives, and where the courts
have found fit to impose sentences of more than 100 years. See United States v.
Roger Charles Day, No. 07-00154 (E.D. Va. 2011) (105 years); United States v.
Norman Schmidt, No. 04-00103 (D. Colo 2008) (330 years); United States v.
Williams, No. 09-00213 (D. Md. 2012) (150 years); United States v. Madoff, No.
09-00213 (S.D.N.Y. 2009) (150 years); United States v. Stanford, No. 09-00342
(S.D. Tex. 2012) (110 years).
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Respectfully submitted,
BARBARA L. MCQUADE
United States Attorney
/s/ Catherine K. Dick
CATHERINE K. DICK
Assistant Chief
U.S. Department of Justice
Criminal Division, Fraud Section
/s/ Sarah Resnick Cohen
SARAH RESNICK COHEN
Assistant United States Attorney
United States Attorney’s Office
Eastern District of Michigan
/s/ John K. Neal
JOHN K. NEAL
Chief, White Collar Crime Unit
United States Attorney’s Office
Eastern District of Michigan
Dated: July 2, 2015
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Certificate of Service
I hereby certify that on July 2, 2015, I filed the foregoing document with the
Clerk of the Court with an accompanying Motion to Seal and provided a courtesy
copy to the Court as well as a copy to counsel for the Defendant.
/s/ Catherine K. Dick
Assistant Chief
U.S. Department of Justice
1400 New York Ave., N.W.
Bond Building
Washington, D.C. 20005
Phone: (202) 538-4049
E-Mail: [email protected]
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