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Patel v. United States

United States District Court, E.D. Michigan, Southern Division

July 7, 2017

Babubhai Patel, Movant,
United States of America, Respondent. Civil No. 15-13230


          Arthur J. Tarnow Senior United States District Judge.

         On August 10, 2012, Movant was found guilty by a jury of health care fraud conspiracy and conspiracy to distribute controlled substances, as well as ten substantive health care fraud counts and fourteen substantive drug distribution counts. On February 1, 2013, he was sentenced to 204 months imprisonment.

         On September 11, 2015, Movant filed a Motion to Vacate Sentence under 28 U.S.C. 2255 [1475], to which the Government responded [1506] on November 30, 2015. Movant filed a reply on December 15, 2015. On December 28, 2015, the Court entered an Order that denied several pending Motions, including, inter alia, a Motion for New Trial and a Motion to Dismiss [1517]. Movant appealed the Order on January 5, 2016 [1518]. On February 25, 2016, the Sixth Circuit dismissed the appeal as it pertained to part of the Order denying Movant's motions that related to his pending §2255 motion, and retained the appeal as it applied to the portion of the order denying Movant's other post-judgment motions. [1535]. The Sixth Circuit affirmed the Court's order on October 4, 2016 [1565], and the mandate issued on March 23, 2017. [1601]. Movant also filed a Motion for Subpoena duces tecum prior to conducting evidentiary hearing in 2255 proceedings on January 11, 2016 [1520]. A Motion for an Evidentiary Hearing was filed on December 6, 2016 [1582].

         For the reasons stated below, Movant's Motion to Vacate, Set aside, or Correct Sentence [1475] is DENIED and Movant is denied a certificate of appealability; Movant's Motion for Subpoena [1520] and Motion for an Evidentiary Hearing [1582] are DENIED as moot.

         Factual Background

         On appeal from Defendant's conviction, the Sixth Circuit summarized the background of this case, in pertinent part, as follows:

The conspiracies began in January 2006 and ended in August 2011 when Patel and his associates were arrested, effectively ending their illegal activities. The number of pharmacies controlled by Patel varied over time, and he changed their corporate structures frequently. Patel hired all of the staff and supervised the pharmacy operations.
The scheme to defraud insurers depended on the participation of physicians, pharmacists, recruiters, and patients. Patel paid cash bribes to physicians to entice them to write patient prescriptions for expensive medications and controlled substances that could be billed to Medicare, Medicaid, or private insurers through the Patel pharmacies. He paid kickbacks to managers of health-related companies so that they would send patients to his pharmacies, and he employed “marketers” to recruit “patients” directly from the streets.
Pharmacists facilitated the criminal activity by charging insurers for expensive Medications that were ordered from wholesale distributors and held in inventory but not dispensed to patients. These surplus medications were later returned to the supplier for credit or sold on the black market. Pharmacists also billed insurers for controlled substances that the pharmacists knew were illegally prescribed. These controlled medications included Hydrocodone (Vicodin, Lortab), oxycodone (Oxycontin), alprazolam (Xanax), and codeineinfused cough syrup. When filling prescriptions, the pharmacists usually “shorted” the number of dosage units placed in the medication vials for patients, billed the insurers for the full drug quantities prescribed, and then sold the excess pills on the street.
A significant portion of the prescription fraud was perpetrated through Visiting Doctors for America (VDA), a physician group that purported to provide home doctor visits to patients. Marketers recruited “patients” from homeless shelters and soup kitchens by offering them small amounts of cash or controlled substances. The marketers transported the “patients” to a VDA physician, who performed cursory examinations of the “patients” while they sat together in one room. VDA staff provided the co-conspirators with dummy patient files and blank prescription pads previously signed by a physician or physician's assistant. Mehul Patel and later Arpit Patel, neither of whom is a physician, wrote prescriptions for controlled medications and expensive non-controlled medications on these blank, pre-signed prescription pads. The prescriptions were taken to the Patel pharmacies, where the pharmacists used the dummy patient files to enter patient profiles into the computer database, billed for all of the medications prescribed, but filled only the controlled medications. The controlled substances were then distributed, or sold on the street.
Patel paid his pharmacists salaries, bonuses, and twenty percent of pharmacy profits to encourage them to engage in fraudulent practices. The pharmacies distributed nearly 500, 000 dosage units of Schedule II controlled substances (including oxycodone), approximately 4.9 million dosage units of Schedule III controlled substances (including hydrocodone), nearly 2.3 million dosage units of Schedule IV controlled substances (including alprazolam), and approximately 2.5 million dosage units of Schedule V controlled substances. Between 2006 and 2011, the Patel pharmacies billed Medicare approximately $37, 770, 557; Medicaid approximately $23, 134, 691; and Blue Cross/Blue Shield of Michigan approximately $6, 359, 872.
Babubhai Patel was convicted of health care fraud conspiracy in violation of 18 U.S.C. § 1349 (count 1), drug conspiracy in violation of 21 U.S.C. § 846 (count 15), ten counts of aiding and abetting health care fraud in violation of 18 U.S.C. § 1347 & § 2 (counts 2-5, 7-9, 12-14), and fourteen counts of aiding and abetting the unlawful distribution of controlled substances in violation of 21 U.S.C. § 841(a)(1) & 18 U.S.C. § 2 (counts 20-32, 34). He was acquitted on three counts of aiding and abetting health care fraud (counts 6, 10-11) and five counts of aiding and abetting the unlawful distribution of oxycodone and hydrocodone (counts 16-19, 33). The district court sentenced him to a total term of imprisonment of 204 months, supervised release of three years, and payment of restitution in the total amount of $18, 955, 869.

         1. Motion to Vacate, Set Aside, or Correct Sentence

         a. Standard of Review

         To succeed on a motion to vacate, set aside, or correct a sentence, a movant must allege “(1) an error of constitutional magnitude; (2) a sentence imposed outside the statutory limits; or (3) an error of fact or law that was so fundamental as to render the entire proceeding invalid.” Pough v. United States, 442 F.3d 959, 964 (6th Cir. 2006) (quoting Mallett v. United States, 334 F.3d 491, 496-97 (6th Cir. 2003)).

         b. Analysis

         All ten of Movant's claims are based on the premise that his counsel was constitutionally ineffective in violation of his Sixth Amendment. Ineffective representation is a legitimate basis for a § 2255 claim and will not generally be considered on direct appeal. United States v. Galloway, 316 F.3d 624, 634 (6th Cir. 2003). The Court will address each claim for ineffective assistance of counsel below.

         To establish ineffective assistance of counsel, a movant must show that defense counsel rendered deficient performance and thereby prejudiced the movant's defense, so as to render the outcome of the proceedings unreliable. See Strickland v. Washington, 466 U.S. 668, 687 (1984). “Counsel's failure to object to an error at sentencing or failure to raise a viable argument that would reduce his client's sentence may constitute deficient performance.” McPhearson v. United States, 675 F.3d 553, 559 (6th Cir. 2012) (citing United States v. Thomas, 38 Fed.Appx. 198, 203 (6th Cir. Mar. 15, 2002)). However, a court owes “substantial deference to counsel's decisions not to raise an argument, even a meritorious argument, if the decision might be considered sound trial strategy.” Id. (quoting Hodge v. Hurley, 426 F.3d 368, 385 (6th Cir. 2005)) (internal quotation marks omitted). Therefore, counsel's omission of an argument for a lighter sentence constitutes deficient performance only if the omission was objectively unreasonable. See Id. If a movant establishes that counsel's performance was in fact deficient, he need not prove that an effective counsel likely would have changed the outcome; he need only show a probability of a different outcome sufficient to undermine confidence in the results of the proceedings. See Nix v. Whiteside, 475 U.S. 157, 175 (1986) (citing Strickland, 466 U.S. at 694).

         i. Failure to challenge Count One of the Indictment as being duplicitous prior to trial

         Movant alleges that Counsel was ineffective because the failure to file a Motion to Dismiss for reasons of duplicity in the indictment pursuant to Fed. Crim. R. P. 12(b)(3)(B)(i) before the start of the trial. Movant maintains that Count One of the indictment is duplicitous because the conspiracy, as provided in the indictment, had two primary purposes, (1) submitting false and fraudulent claims and (2) offering and paying kickbacks and bribes. By permitting a duplicitous count to remain, Movant alleges his constitutional rights were violated, placing him in danger of, inter alia, implicating the protections of the Sixth Amendment guarantee of jury unanimity by “preventing the jury from convicting on one offense and acquitting on another.” United States v. Campbell, 279 F.3d 392, ...

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