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Matched Legal Cases: ['§ 3553', '§ 3553', '§ 3553', '§ 3553', '§2', '§ 3552']

News Archives | Monmouth County Criminal Lawyers Monmouth County Criminal Lawyers
Posted by Donna Krstec on April 24, 2014 | No Comments »
By NJ Criminal Lawyer, David A. Schwartz, Esq.
Continuing the trend which began with U.S. v. Rita, U.S. v. Gall and U.S. v. Kimbrough, on January 21, 2009, the Supreme Court decided Spears v. United States,129 S.Ct. 840, which further diminished the impact of the Federal Sentencing Guidelines on sentencing. In another very significant sentencing decision, on April 17, 2009, the Third Circuit Court of Appeals decided United States v. Tomko, 562 F.3d 558 which continued the trend.
Enacted in 1987 as part of the Sentencing Reform Act, the Federal Sentencing Guidelines were intended to fix various aspects of the then existing sentencing system, most notably, disparity between and among sentences meted out to defendants convicted of the same type of offense. White collar defendants were perceived as receiving more lenient sentences than their “bluecollar” counterparts. In applying the mandatory guideline system, a sentencing court had very limited discretion in departing from the guideline sentence range.
In 2005, the Supreme Court decided United States v. Booker, 543 U.S. 220, and held that the mandatory guideline system violated the Sixth Amendment because it required sentencing courts to impose sentencing enhancements based on facts which were not found by a jury or without an admission of those fact by the defendant. To remedy the Sixth Amendment the Supreme Court removed the language from the Sentencing Reform Act that made the Guidelines mandatory.
Since Booker was decided, a number of Supreme Court decisions (Rita, Gall, and Kimbrough) have been handed down which clarified the truly advisory nature of the Guidelines, and which instructed sentencing courts that sentences must be determined only after considering all of the factors in the Sentencing Reform Act (18 U.S.C. § 3553(a)).
The Supreme Court Decides Rita, Gall and Kimbrough
In light of the Supreme Court’s decisions in Rita, Gall, and Kimbrough, it is clear that a sentencing court cannot presume that a guidelines sentence is reasonable. Further, a court may not require extraordinary circumstances before imposing a sentence that constitutes a substantial variance from the Guidelines sentence range. Finally, the Supreme Court rejected the concept of a mathematical formula that uses the percentage of a departure (now deemed a “variance”) from the Guidelines range for determining the strength of the required justification. Although the sentencing court must consider the Guidelines in determining the sentence, the court may impose a sentence that varies from the Guidelines based on policy reasons, particularly where the Sentencing Commission did not rely on empirical data or studies before deciding on a particular offense level.
Current Sentencing Procedures
Courts must follow a three step procedure in determining the appropriate sentence:
1. The court must begin by calculating the correct advisory Guideline sentence range;
2. In doing so, the court must formally rule on the motions of both parties for adjustments and departures; and
3. Finally, the court must exercise its discretion by giving meaningful consideration to all of the factors in 18 U.S.C. § 3553(a), in determining a sentence that is sufficient, but not greater than necessary to accomplish the traditional goals of sentencing.
The traditional sentencing factors are retribution, deterrence, incapacitation and rehabilitation. 18 U.S.C. § 3553(a) generally tracks these purposes. The specific statutory factors are described as follows:
· The nature and circumstances of the offense and the history and characteristics of the defendant
· The need for the sentence imposed –
· To reflect the seriousness of the offense, and to promote respect for the law, and to provide just punishment for the offense;
· To afford adequate deterrence to criminal conduct;
· To protect the public from further crimes of the defendant;
· To provide the defendant with needed educational or vocational training or medical care
· The kinds of sentences available (including probation)
· The Sentencing Guidelines range including any pertinent policy statements issued by the Sentencing Commission
· The need to avoid unwarranted disparity
· The need to provide restitution to the victims
18 U.S.C.§ 3553(a)(1) – (7)
The Supreme Court Decides Spears; The Third Circuit Decides Tomko
In Spears, the sentencing court rejected the Guidelines crack – powder ratio (which would have required imposition of a much longer sentence: 324 – 405 months) and imposed its own, more lenient crack – powder ratio, thereby reducing the defendant’s sentence to the statutory mandatory minimum sentence ( 240 months). The Eighth Circuit Court of Appeals revered the district court, and held that a sentencing court may not categorically reject the Guidelines quantity ratio, and impose its own quantity ratio.
The Supreme Court reversed the Eighth Circuit, and in appropriately strong language held:
A sentencing judge who is given the power to reject the disparity created by the crack – to – powder ratio must also possess the power to apply a different ratio, which in is judgment, corrects the disparity. Simply put, the ability to reduce a mine-run defendant’s sentence necessarily permits adoption of a replacement ratio.
. . . We now clarify that district courts are entitled to reject and vary categorically from the Crack-cocaine Guidelines based on a policy disagreement with those guidelines.
The significance of Spears in white collar cases is that a sentencing court can vary categorically from the offense level increases under the loss table pursuant to U.S.S.G. §2B1.1. Indeed, under Kimbrough and Spears there is no limit to the extent that a court may vary categorically from a guideline provision based on a policy disagreement.
In Tomko, the Third Circuit upheld a probationary sentence (with a component of house arrest) in a tax evasion case where the amount of the deficiency was $228,000. The Guidelines sentence range was twelve to eighteen months.
The district court imposed the probationary sentence because, among other reasons, the defendant’s lifetime of charitable works, his extraordinary acceptance of responsibility, his history of alcohol abuse, and because his incarceration would cause other innocent employees to lose their jobs.
In reiterating the holding in Gall, the Court of Appeals held that its substantive review of a sentence “requires us not to focus on one or two factors, but on the totality of the circumstances. . . . Indeed, we cannot presume that a sentence is unreasonable simply because it falls outside of the advisory Guidelines range.”
The Court further held that . . . “if the district court’s sentence is procedurally sound, we will affirm it unless no reasonable sentencing court would have imposed the same sentence on that particular defendant for the reasons the district court provided.”
Thus, the detailed grounds provided by the district court for the variance reflected that it did not abuse its discretion in imposing the probationary sentence.
Spears and Tomko are significant in that they reiterate a sentencing court’s power to disagree with the Guidelines on policy grounds, and because the appellate standard of review firmly leaves the sentencing court free to vary from the Guidelines sentence range, as long as the record reflects careful consideration of each of the sentencing factors under 18 U.S.C.§ 3552(a).
Earlier this year, the AHIA-1 ListServ ran a series of postings from members on the degree of independence granted to and restrictions imposed upon auditors working in large institutions. The tenor of the posted commentary varied widely, and included some clear consternation and thinly veiled mistrust directed toward attorneys representing these providers.
I agree with my attorney colleagues, that healthcare auditors are the most significant link in the chain anchoring providers to a foundation of compliance. Good attorneys are risk-adverse individuals. Conscientious attorneys will expect the highest caliber audits to be undertaken with the highest degree of ethics and professionalism. This is simply reality-based law practice. The statutory and regulatory labyrinth of healthcare law demands nothing less.
For example, auditing is perhaps the single most critical feature of a healthcare compliance program, which can impact on compliance program effectiveness. The process of initiating compliance programs should begin with performance of baseline audits, culminating in comprehensive reviews of all institution systems. Indeed, various compliance guidance programs published by Health and Human Services (HHS), specifically recommend initial comprehensive reviews.
After baseline audits are completed, regular and periodic audits are essential elements of compliance programs going forward. In baseline and periodic audits, there should be no restrictions or conditions placed on auditors by provider attorneys (with the exception that all audits be undertaken within the terms of compliance programs).
Attorneys and auditors should expect HHS-Office of Inspector General (OIG) and Department of Justices (DOJ) reviews of internal audit will be rigorous. Outside audits conducted as part of investigations or by virtue of entering into compliance agreements, as a result of a false claim(s) settlement agreement, will be expert and comprehensive. Operating on the assumption of anything less is the first step toward disastrous results for providers.
There is clearly the perception among some internal health-care auditors that provider attorneys are potential adversaries of auditors. Attempts by attorneys to manipulate audits, directly, or indirectly by “finessing” the auditor, are not an uncommon refrain heard from healthcare auditors.
Auditors need to educate attorneys in processes and results of audits. It is safe for auditors to assume that attorneys know little about how audits are carried out, and even less about the art of analyzing audit results. Affirmatively advising attorneys of the benefits of thorough, “honest audits,” and pit-falls of “outcome orientated” audits will facilitate investigation processes. Credible audits are farsighted, and part of multi-elemental solutions for institutional providers with systemic problems.
In keeping with the idea of a mutually supportive role, experience teaches healthcare auditors and provider attorneys that common goals should be shared, and that these goals can be accomplished while being guided by ethical principles. Shared ultimate goals of facilitating the delivery of healthcare and ancillary services, while adhering to best practices, will not change. However, perceptions that divergence from these goals, or, indeed, that the attorney now has an “agenda,” is triggered when providers are faced with questions of potential fraud raised by internal audits, or investigations commenced by law enforcement agencies. Provider attorneys are the front-line of defense in either situation. The attorney’s role is immediately diversified, and must deal with mounting pressures leveraged from the outside.
Perhaps this perception is engendered by the fact that responsibilities of providers’ attorneys extend beyond the application of the controlling law to facts of each situation. The economics of responding to problems, and the political and social impact (particularly to the provider’s patients) underlie the attorney’s advice. Routinely, providers demand answers to these questions from their attorneys on short notice and they may expect answers that endorse their conduct.
Of course, complicated issues surrounding the timing of audits, personnel conducting audits, and what to do with audit results, occur in the context of an auditor’s discovery of “potential problems” or in the commencement of outside investigations by Healthcare Financing Authority (HCFA), or the DOJ. Discoveries of fraudulent billing practices may not always be, at the outset, understood as a “fraud.” Conversely, not every questionable billing event is going to give rise to criminal or civil liability or to administrative sanctions.
The legal landscape to be traversed by attorneys is further complicated by strategic choices, which providers must make based on advice of counsel during investigations. These choices are of considerable magnitude for reasons stemming from desire to control one’s own fate by attempting to control eventual outcomes of investigations. That is, whether cases will (1) end as administrative matters within HHS; (2) be resolved through the court system as civil matters; or at worst; (3) develop into full-blown criminal investigations where the provider-entity, and perhaps individuals in management, are indicted and face heavy fines and possible imprisonment.
Another consideration under the attorney umbrella is whether to dig in the trenches for a bloody and protracted battle. Indeed, providers may not have much of a choice in this regard. In the real world of healthcare investigations, providers are not always offered, nor can they always negotiate, resolutions that leave the entity viable or without the worst case scenario of prison. In essence, resolutions may not be palatable to providers, leaving only years of high-stakes and expensive litigation ahead.
Cooperation by means of voluntary disclosure is, in theory, another option for providers. However, voluntary disclosure is like jumping off a bridge without a bungee cord. Once you start, you cannot take it back. If providers decide to voluntarily disclose and cooperate with investigators, then make a 180 degree turn, suddenly pulling the plug and circling the wagons, you can bet that investigations of the particular institution will be comprehensive to say the least.
With increasing frequency, federal prosecutors demand that corporations waive attorney-client privilege as a prerequisite to resolving criminal cases. It was recently revealed in DOJ policy Guidelines on the Prosecution of Corporations that in determining whether to prosecute, consideration should be given to the corporation’s timely and voluntary disclosure, and willingness to waive attorney-client privileges. In gauging cooperation, prosecutors may consider whether results of internal investigations are disclosed and attorney-client privileges waived.
Finally, we need to understand the unfair reality that providers can still lose, even by winning. Negative notoriety of full-scale investigations is certainly bas for business and dilutes confidence among provider patients, medical staff, and health plan administrators. Can the CFO say that the hospital was vindicated after spending untold amounts of money defending bogus investigations? It is usually true that the beginning of a case makes the biggest splash in the media. When all is said and done, and no charges are filed, or the huge fraud case ends up as an innocent overpayment issue, providers cannot buy press conferences. Depletion of resources, measured in both dollars and human effort (plus distraction, lower morale, lack of productivity, etc.), impacts decisions regarding what to do if auditors discover “problems.”
Experienced attorneys know better than to expect investigative fairness and a utopian justice system. In dealing with provider attorneys, auditors should possess the same appreciation for inherent flaws in investigative and prosecutorial processes. These processes are commenced and carried out by humans, and are subject to motivations and dynamics of prevailing political winds.
Having detailed the obstacles facing provider counsel, where does this leave auditors and lawyers in the investigative process? The practical bottom-line approach to choosing strategic options for attorneys is the process of determining the precise problem from the outset. Preservation of all viable evidentiary privilege or doctrine of confidentiality is critical to the process of developing that strategy.
Faced with potential problems, providers should conduct internal investigations. Legal precepts of maintaining evidentiary privileges are simple. If investigations are not initiated and controlled by attorneys, attorney-client privileges and qualified work-product privileges will be lost. Retention of these privileges allows attorneys and auditors to conduct investigations in a contemplative and reasonable fashion. Losing these two powerful means, by which to gather and evaluate information, forces critical strategic decisions to be made in the dark.
Auditors and attorneys should not expect refuge in “self-critical analysis” or “self-evaluative privileges.” Only a few courts, and a handful of states have recognized or adopted these privileges, and then on a limited basis. These privileges protect confidentiality of investigative audit reports and underlying processes, which are prepared inquiries that are “evaluative” and confidential in nature. Communications need not be made to attorneys. This so-called privilege has yet to be uniformly adopted, defined or understood. One possible approach toward uniform application will come with legislation, not court opinion. Uniform legislation of this privilege has been proposed, such as model privilege legislation by (Ethics Resource Center) ERC.
Auditors and attorneys are brought further together by the fact that best practices strongly suggest that in-house auditors be appointed as attorney agents for investigations. A letter to that effect should be adopted by governing bodies of providers (e.g., the Board of Directors) at the outset of investigations. Attorneys establish protocols for collecting and segregating documents to meet all requirements for maintaining attorney-client privileges, and for creation of privilege logs.
While agency relationships may make auditors uncomfortable, or cause them to feel potentials for compromise, this measure is imposed only to satisfy legal requirements, not bring influence to bear on auditor functions. Further, while attorneys have authority, as leaders of internal investigations, to direct the work performed by auditors, they do not direct what auditors may find or report.
Under what circumstances should providers self-report lack of compliance with requirements of government-funded healthcare programs? Laws in this area are unclear. Some government sources believe that failure to report overpayments creates an independent basis for liability. For example, under the Social Security Act, providers with knowledge of payment errors may be criminally liable for concealing or failing to disclose these errors.
Of course, attorneys can likewise be invaluable in providing preventive advice to “outcome oriented audits.” Federal obstructions of justice statutes are broad and encompass conduct well beyond what auditors might think would be criminal conduct. Destruction, concealment, alteration or falsification of documents called for by subpoena may constitute obstruction of justice. The concept of “anticipatory” obstruction of justice, which includes destruction or alteration in anticipation of subpoena, is actionable as well. Obstruction proscriptions are broad and apply to anyone who endeavors to corrupt or influence due administration of justice. 18 U.S.C. S 1503.
For all of these reasons, it is essential that auditors and provider attorneys look upon investigative processes as a two-way street. Mutual assistance and understanding are critical. Both auditors and attorneys can take a straight path toward reaching common ground.
Call on Schwartz & Posnock when you are in need of an NJ Criminal Lawyer.
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