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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA, Case No. 09-20215

Plaintiff, HONORABLE SEAN F. COX

United States District Judge

v.

D-2 JOSE CASTRO-RAMIREZ,

Defendant.

___________________________________/

OPINION & ORDER DENYING DEFENDANT’S 

MOTION TO DISMISS FOR PRE-INDICTMENT DELAY [Doc. No. 174]

On June 24, 2009, the grand jury returned an indictment charging Defendant Dr. Jose

Castro-Ramirez with one count of conspiracy to commit health care fraud, eleven counts of

health care fraud, and one count of conspiracy to commit money laundering. [See Doc. No. 4]. 

The case is before the Court on Dr. Castro-Ramirez’s “Motion to Dismiss the Indictment Due to

Pre-Indictment Delay” [Doc. No. 174]. Both parties have fully briefed the issues, and a hearing

was held on December 9, 2009. For the reasons that follow, the Court DENIES the Defendant’s

motion [Doc. No. 174]. 

BACKGROUND

On June 24, 2009, the grand jury returned an indictment charging Dr. Castro-Ramirez

with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349,

eleven counts of health care fraud, in violation of 18 U.S.C. § 1347, and one count of conspiracy

to commit money laundering, in violation of 18 U.S.C. § 1956(h). [See June 24, 2009 Indictment,

Doc. No. 4]. The indictment states that Dr. Castro-Ramirez was a physician licensed in the state

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of Michigan, and who ordered physical and occupational therapy for patients purportedly treated

at rehabilitation clinics owned by several co-defendants. [Doc. No. 4, ¶17].

The June 24, 2009 indictment alleges that, from approximately January of 2003 until

approximately March of 2007, the defendants conspired as follows: 

It was the purpose of the conspiracy for [the] defendants. . . and others to

unlawfully enrich themselves by, among other things, (a) submitting false and

fraudulent claims to Medicare; (b) offering and paying kickbacks and bribes to

Medicare beneficiaries for the purpose of such beneficiaries arranging for the use

of their Medicare beneficiary numbers by the conspirators as the bases of claims

filed for physical therapy, occupational therapy and other services; (c) soliciting

and receiving kickbacks and in return for arranging for the furnishing of services

for which payment may be made by Medicare by providing their Medicare

beneficiary numbers, which formed the basis of claims filed for physical therapy,

occupational therapy, and other services; (d) concealing the submission of false

and fraudulent claims to Medicare, the receipt and transfer of the proceeds from

the fraud, and the payment of kickbacks; and (e) diverting proceeds of the fraud

for the personal use and benefit of the defendants and their co-conspirators. 

[Doc. No. 4, ¶26]. Specifically, Dr. Castro-Ramirez is alleged to have signed medical

documentation ordering physical and/or occupational therapy services which were medically

unnecessary and not provided to patients, submitted reimbursement claims to the Medicare

program for those referrals, and fabricated medical and billing documents in support of those

referrals. Id. at ¶¶37-39. The aggregate amount allegedly procured over the course of the fouryear conspiracy is approximately $15.2 million. Id. at ¶¶43-45. 

On October 29, 2009, Dr. Castro-Ramirez filed his “Motion to Dismiss the Indictment

Due to Pre-Indictment Delay” [Doc. No. 174]. In his motion, the Defendant argues as follows: 

Dr. Castro submits that the pre-indictment delay in this matter has caused him

actual substantial prejudice and that the delay was the product of a deliberate act

by the government designed to gain a tactical advantage. The government knew

that it was investigating a matter involving aged and infirm potential witnesses

with failing memories, yet chose to delay indicting Dr. Castro knowing that his

inability to confront these witnesses would be prejudicial to his defense. 

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[Def.’s Br., Doc. No. 174, p.14]. 

ANALYSIS

In United States v. Lovasco, 431 U.S. 783 (1977), the Supreme Court recognized that,

while statutes of limitations provide the primary guarantee against the prosecution of overly stale

criminal charges, the Due Process Clause of the Fifth Amendment also plays a “limited role” in

protecting against excessive pre-indictment delay. Lovasco, 342 U.S. at 789. In Lovasco,

however, the Court emphasized that “fundamental conceptions of justice,” Id. at 791, embodied

in the concept of due process “are not impinged simply upon a showing that the government

failed to secure an indictment immediately upon a determination of probable guilt.” United

States v. Brown, 959 F.2d 63, 65 (6th Cir. 1992), citing Lovasco at 791. 

Relying primarily upon the Supreme Court’s holding in Lovasco, the Sixth Circuit noted

that “particularly where the delay is investigative rather than intended to gain a tactical

advantage over the accused, preindictment delay does not offend the Fifth Amendment. Brown,

959 F.2d at 66, citing Lovasco at 795. 

A defendant seeking dismissal due to pre-indictment delay must show both of the

following: 1) substantial prejudice to the defendant’s right to a fair trial; and 2) that the delay

was an intentional device by the government to gain a tactical advantage. Id. Dr. CastroRamirez fails to meet either of these prongs in the instant motion, and as such, the Court

DENIES his motion to dismiss [Doc. No. 174]. 

I. Dr. Castro Has Not Suffered “Substantial Prejudice.”

Proof of actual, substantial prejudice is a necessary element of a due process claim for

pre-indictment delay. Lovasco at 431; Brown at 66. Dr. Castro-Ramirez argues that the passage

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of time has substantially prejudiced his case as follows: 

In this case, there may be no dispute that the government was aware that the

“evidence” it was collecting through the years and would rely upon at trial

principally involved aged and ill witnesses. Particularly for this group, the

passage of time was likely to result in lost and faded memories of the witnesses

still living. 

[Def.’s Br., Doc. No. 174, p.5]. Dr. Castro-Ramirez further argues that two witnesses whose

testimony he deems important to his defense have either died or fled the jurisdiction: 

In this case, the death of the former co-defendant, Raymond Farrier is a prime

example of lost testimony due to delay. It further appears that co-defendant

Shafiula Hanif has fled the jurisdiction. The Defendant is prejudiced by his

inability to confront this witness. The actual and substantial prejudice to Dr.

Castro is directly attributable to delay.

Id. at pp.5-6. 

As the Government argues, however, “Defendant has not articulated (nor could he) how

these events prejudice his ability to prepare a defense.” [Government’s Br., Doc. No. 181, p.4]. 

Indeed, the Sixth Circuit has held that “loss of memory is an insufficient reason to establish

prejudice.” 343 F.3d 849, 860 (6th Cir. 2003). Moreover, “[d]elay injures the prosecution, after

all, as memories fade. The prosecutor bears a heavy burden of persuasion, and the degradation

of evidence generally cuts against the party with the burden.” United States v. Fountain, 840

F.2d 509, 512-13 (7th Cir. 1988). As such, any evidence in this case due to faded memories, or

dead or unavailable witnesses, is just as likely - if not more likely - to prejudice the

government’s case as it is to Dr. Castro-Ramirez. 

With respect to co-defendant Raymond Farrier, who is now deceased, the Sixth Circuit

has held that “a defendant does not show actual prejudice based on the death of a potential

witness if he has not given indication of what the witness’s testimony would have been and

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whether the substance of the testimony was otherwise available.” United States v. Rogers, 118

F.3d 466, 475 (6th Cir. 1997). Dr. Castro-Ramirez has failed to allege how Mr. Farrier’s

testimony would aid his defense. Indeed, as the Government argues, Dr. Castro-Ramirez’s

defense may be aided more significantly by Mr. Farrier’s absence:

Based upon the statements of similarly situated defendants, however, it seems

likely that Farrior would have testified that he signed documents, in exchange for

cash kickbacks, to support the creation of fraudulent physical and occupational

therapy files. It also seems likely that Farrior would have further testified that he

received no services from Castro, and never even met him, despite the fact that

Castro signed therapy prescriptions and documentation reflecting alleged

oversight of Farrior’s therapy treatment plan. 

[Government’s Br., Doc. No. 181, p.5]. As such, the Court finds that Dr. Castro-Ramirez has

failed to demonstrate prejudice with respect to the death of Raymond Farrier.

Further, Dr. Castro-Ramirez has failed to demonstrate prejudice with respect to codefendant Shafiulla Hanif’s alleged flight from the jurisdiction. As argued by the Government,

“[a]s Castro knows from the discovery provided to him, Hanif gave law enforcement agents a

detailed summary of [the] fraudulent scheme that underlay the charges against Castro.”

[Government’s Br., Doc. No. 181, p.5]. 

As recently as last month, the Sixth Circuit stated that actual prejudice must be proven

and can never be presumed or satisfied by speculation in the context of a pre-indictment

dismissal motion. See United States v. Schaffer, --- F.3d. ---, 2009 WL 3763157, *9 (6th Cir.

Nov. 12, 2009). Despite this requirement, however, Dr. Castro-Ramirez relies solely upon

speculation in the instant motion, and instead asks the court to presume prejudice without

establishing a factual predicate. As such, Dr. Castro-Ramirez has failed to demonstrate “actual

prejudice” as required by the Sixth Circuit in United States v. Brown. 

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II. Dr. Castro Has Not Shown Intentional Delay By the Government.

Even assuming, arguendo, that Dr. Castro-Ramirez could demonstrate actual prejudice to

his defense due to pre-indictment delay, Dr. Castro-Ramirez cannot demonstrate that the delay

was an intentional device by the government to gain a tactical advantage. As such, the Court

DENIES Dr. Castro-Ramirez’s motion to dismiss [Doc. No. 174]. 

Much of Dr. Castro-Ramirez’s briefing on this issue is spent discussing two cases from

district courts in other circuits: 1) United States v. Gross, 165 F. Supp. 2d 372 (E.D.N.Y. 2001);

and United States v. Sabath, 990 F. Supp. 1007 (N.D. Ill. 1998). Each of these district courts

granted a defendant’s motion to dismiss due to pre-indictment delay without requiring a showing

of actual intent on the part of the government - rather, a showing akin to negligence was

sufficient in those holdings. 

As noted by the Sabath court, however, there is a circuit split on the issue of whether

intent by the government is required to be explicitly proven, and the Sixth Circuit requires such

a showing of intent. See Sabath, 990 F.Supp. at 1017 (noting that the Sixth Circuit, and six other

circuits, adopt the bright-line rule that pre-indictment delay can never violate due process

without a showing of bad faith). Dr. Castro-Ramirez’s reliance on Gross and Sabath to the

contrary is, therefore, without merit. 

The Government argues that the delay in the instant case - approximately twenty-eight

months spanning from the end of the alleged conspiracy in March 2007 to the indictment in late

June 2009 - was due to the size and scope of the investigation:

The Indictment was the product of several years of investigative activity, a

function of the complex and interrelated nature of the various fraudulent schemes

in which Castro played a role. Multiple search warrants issued, pursuant to which

thousands of records were seized in both electronic and paper form.

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1 See, e.g., United States v. DeClue, 899 F.2d 1465, 1469 (6th Cir. 1990) (upholding delay of at

least thirty-three months); United States v. Atisha, 804 F.2d 920, 927-28 (6th Cir. 1986) (upholding delay

of at least twenty-nine months); United States v. Brown, 667 F.2d 566, 568 (6th Cir. 1982) (upholding

delay of approximately five years). 

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[Government’s Br., Doc. No. 181, p.7]. As the Supreme Court explained in Lovasco,

“investigative delay is fundamentally unlike delay undertaken by the Government solely to gain

tactical advantage over the accused.” Lovasco, 431 U.S. at 795. The Lovasco Court elaborated

as follows: 

Rather than deviating from elementary standards of fair play and decency, a

prosecutor abides by them if he refuses to seek indictments until he is completely

satisfied that he should prosecute and will be able promptly to establish guilt

beyond a reasonable doubt. Penalizing prosecutors who defer action for these

reasons would subordinate the goal of orderly expedition to that of mere speed. . .

. This the Due Process Clause does not require. We therefore hold that to

prosecute a defendant following investigative delay does not deprive him of due

process, even if his defense might have been somewhat prejudiced by the lapse of

time. 

Id. at 795-96 (internal quotations and citations omitted) (emphasis added).

In the instant case, Dr. Castro-Ramirez has brought forth no evidence tending to show

that the twenty-eight month delay between the end of the alleged conspiracy and the securing of

an indictment was due to anything other than investigative delay. Further, the Court notes that

the length of the delay in this case is in line with other periods of delay held not to be

unreasonable by the Sixth Circuit.1

 For these reasons, the Court holds that, even assuming

arguendo that Dr. Castro-Ramirez can demonstrate “substantial prejudice” to his case due to the

government’s preindictment delay, Dr. Castro-Ramirez has not shown that the Government’s

delay in this case was intended as a tactical advantage. Therefore, the Court DENIES Dr.

Castro-Ramirez’s Motion to Dismiss [Doc. No. 174]. 

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CONCLUSION 

For the reasons explained above, the Court DENIES the Defendant’s Motion to Dismiss

for Pre-Indictment Delay [Doc. No. 174].

IT IS SO ORDERED.

Dated: December 15, 2009 S/ Sean F. Cox 

Sean F. Cox

United States District Court Judge

 

PROOF OF SERVICE

The undersigned certifies that the foregoing order was served upon counsel of record via the Court’s

ECF System and/or U. S. Mail on December 15, 2009.

s/Jennifer Hernandez 

Case Manager to

District Judge Sean F. Cox

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