Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. LEON

April 7, 1998

UNITED STATES OF AMERICA
v.
JACK LEON



The opinion of the court was delivered by: ORLOFSKY

OPINION

 ORLOFSKY, District Judge:

 Once again, this Court is called upon to revisit the United States Sentencing Guidelines, a body of law which occasionally invites arbitrary and irrational distinctions, and where clarity and principles are in relatively short supply. Presently before the Court are the motions of Defendant, Jack Leon ("Leon"), for a downward departure based on claims of "extraordinary restitution" and extraordinary collateral consequences. The Government and Leon also dispute the method for calculating "the value of . . . the improper benefit . . . conferred," within the meaning of U.S.S.G. § 2B4.1(b)(1) in determining the specific offense characteristics of Leon's conduct. Leon contends that certain categories of expenses should be deducted from the gross amount of the benefit conferred, a claim that is opposed by the Government. For the reasons set forth below, Leon's motions for a downward departure will be denied. I also hold that only direct costs, as opposed to indirect costs, as explained below, may be deducted in calculating "the value of . . . the improper benefit . . . conferred."

 I. Factual and Procedural Background

 On September 29, 1997, after waiving indictment, Leon pleaded guilty to a one count Information charging a violation of 18 U.S.C. § 371. Specifically, the Information charged that Leon conspired to:

 
(a) offer and pay remuneration (including a kickback, bribe, and rebate), directly and indirectly, overtly and covertly, in cash and in kind, to a person to induce such person to refer an individual to a person for the furnishing and arranging for the furnishing of an item and service, for which payment was made in whole or in part under the Medicare Program, in violation of 42 [U.S.C. § ] 1320a-7b(b)(2)(2)(A); and
 
(b) defraud the United States and its agencies, to wit, [the Department of Health & Human Services], by submitting Medicare claims and receiving Medicare payments to which they [sic] were not entitled and by impairing, impeding, and obstructing the lawful and legitimate functions of [the Department of Health & Human Services] in administering health care and health insurance plans, including Medicare.

 Information P 9 (dated Sept. 29, 1997). The essence of the conspiracy charged in the Information was based upon an agreement made through George Wozunk, a salesman for Leon's company, Leon SCD Unlimited, Inc. ("Leon SCD"). The agreement was allegedly made with certain podiatrists and contemplated that, in exchange for referrals of patients and orders for durable medical equipment ("DME") and supplies to Leon SCD, certain unlawful payments would be made to these podiatrists. Id. at PP 10, 12. According to the Information, the payments to the podiatrists were disguised either as lease payments for space being rented by Leon SCD or as payments for work allegedly not performed the wife of one of the podiatrists, i.e., as payments from an employer to an employee. Id. at PP 10, 16, 20.

 In connection with a separate civil action brought pursuant to the False Claims Act, 31 U.S.C. § 3279 et seq., Leon and Leon SCD entered into a settlement agreement with the United States and the relator. See Letter from Harris M. Recht (dated Mar. 11, 1998), Exh. A (Settlement Agreement). The Government's central contention in the False Claims action was that Leon and Leon SCD "paid improper payments to certain physicians to induce Medicare referrals in violation of the Anti-Kickback Statute," 42 U.S.C. § 1320a-7b. Id., Exh. A at P 3. The Government also contended that it had claims and causes of action against Leon and Leon SCD based on Leon and Leon SCD's submission of claims for a number of lymphedema pumps. Id., Exh. A at P 2. In the Settlement Agreement, inter alia, Leon and Leon SCD waived claims for monies owed to them by the Government in the amount of $ 142,901. Id., Exh. A at P 7.

 As part of the Settlement Agreement, Leon and Leon SCD also "agree[d] that it [sic] will waive and will not assert any defense which may be based in whole or in part on the Double Jeopardy or Excessive Fine Clauses of the Constitution or the holding or principles set forth in United States v. Halper, 490 U.S. 435, 104 L. Ed. 2d 487, 109 S. Ct. 1892 (1989), and agree[d] that the amounts paid under [the Settlement Agreement] are not punitive in effect or in nature in any criminal prosecution based on conduct specified in Paragraphs 2 and 3." Id., Exh. A at P 16. In connection with the settlement of the False Claims action and after Leon entered a plea of guilty to the Information, Leon and Leon SCD also agreed to waive their rights to other claims for payment totaling $ 100,000. See, e.g., id., Exh. C (Letter from Harris M. Recht (dated Nov. 26, 1997)). These were claims for payment submitted by Leon SCD to the Medicare program and which, as a result of the Government's objection to payment of the claims, could have been adjudicated in some type of administrative hearing. These claims were unrelated to the conduct charged in the Information. See id., Exh. B (Letter from Harris M. Recht (dated Oct. 6, 1997)), Exh. D (Letter from Bruce A. Levy (dated Nov. 26, 1997)).

 II. Discussion

 A. Extraordinary Restitution

 A. Extraordinary Restitution

 Pursuant to U.S.S.G. § 3E1.1(a), the Court should, "if the defendant clearly demonstrates acceptance of responsibility for his offense, decrease the offense level by 2 levels." U.S.S.G. § 3E1.1(a). Application Note 1(c) includes as an appropriate consideration in determining whether a defendant qualifies for this adjustment, the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.