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United States v. Gupta

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

August 23, 2017

UNITED STATES OF AMERICA, Plaintiff-Respondent,
v.
CHIRADEEP GUPTA D-14, Defendant-Petitioner. Civil No. 15-12475

          ORDER DENYING MOTION UNDER 28 U.S.C. § 2255 TO VACATE, SETASIDE OR CORRECT SENTENCE [#751]; ORDER DISMISSING CIVIL CASE NO. 15-12475; AND ORDER DENYING CERTIFICATE OF APPEALABILITY

          DENISE PAGE HOOD CHIEF, U.S. DISTRICT COURT

         I. BACKGROUND

         A. Procedural Background

         On October 26, 2012, a jury found Defendant Chiradeep Gupta (“Gupta”) guilty on five counts: one count of Health Care Fraud Conspiracy in violation of 18 U.S.C. § 1349; one count of Money Laundering Conspiracy in violation of 18 U.S.C. § 1956(h); and three counts of Money Laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i). (Doc # 506) Gupta was sentenced to concurrent terms of 120 months of imprisonment, followed by concurrent terms of 36 months of supervised release on each count. (Doc # 664) Gupta was ordered to pay restitution in the amount of $10, 164, 553.00 (jointly and severally). Id. Gupta filed a Notice of Appeal on March 21, 2014. (Doc # 665) The appeal was voluntarily dismissed on July 11, 2014. (Doc # 703) On July 13, 2015, Gupta filed the instant Motion to Vacate, Set Aside, or Correct Sentence under 28 U.S.C. § 2255. (Doc # 751) A Response and Reply were filed. (Doc # 773; Doc # 783) The Court held an evidentiary hearing on April 17, 2017.

         B. Factual Background

         Gupta engaged in a Medicare fraud scheme from August 2007 through September 2009. Gupta and his co-conspirators opened up sham home health care companies; recruited patients, many of them vulnerable members of the community, by paying cash kickbacks and bribes; used physical therapists to create fictitious files to make it appear as if the patients needed and received physical therapy; and billed Medicare for physical therapy that was unnecessary or not provided. Gupta also laundered proceeds from one of the home health care companies through shell companies that Gupta owned and controlled through others.

         On July 16, 2010, the Government charged Gupta in a first superseding indictment with one count of healthcare fraud conspiracy. (Doc # 176) On December 7, 2010, the Government charged Gupta with the same single count of healthcare fraud conspiracy in a second superseding indictment. (Doc # 255) On January 5, 2011, Gupta signed an acknowledgment of the second superseding indictment, in which he certified: “I know that if I am convicted or plead guilty, I may be sentenced as follows: Count 1: 10 years and/or $250, 000 fine.” (Doc # 308)

         According to a Declaration of Gupta, Gupta and his attorney, Mark Kriger (“Kriger”), attended the Government's reverse proffer during which the Government set out its case against Gupta. (Doc # 751-2, Pg ID 8912) A week later, in late February 2012, Kriger informed Gupta that the Government had offered a five-year deal if he pled guilty. Id. Gupta asked Kriger what he thought Gupta should do. Kriger told him that the decision was his to make, but that he did not think the case against Gupta was strong. Id. at 8912-13. Gupta asserts that Kriger did not discuss the plea offer with him again. Id. at 8913.

         According to Gupta, he received the Government's discovery on CDs from August 2010 through February 2012, but he could not access thirty percent of the files because they were corrupted. Id. at 8912. Gupta also asserts that no one reviewed the discovery material with him. Id. at 8913.

         The Government asserts that during and after the reverse proffer, the Government provided notice that it had developed evidence of money laundering that Gupta had not yet been charged with. The Government points to an e-mail exchange between Kriger and the AUSA. (Doc # 773-1) The Government asserts that it did not offer “a five-year plea” in return for Gupta's cooperation, as described by Gupta. Rather, the Government offered a 63-78 months guideline range, and the offer did not require cooperation.

         On March 27, 2012, the Government charged Gupta in a third superseding indictment with one count of healthcare fraud conspiracy, one count of money laundering conspiracy, and three counts of money laundering. (Doc # 451) Gupta did not accept the plea offer by the expiration date, and the Government did not give him additional plea offers.

         Gupta asserts that Kriger did not explain the possibility that he could be charged with additional crimes, did not explain the charges against him, did not review the evidence against him, did not explain the different sentence exposure he faced by pleading guilty or going to trial, did not inform him that he could have pled guilty while maintaining his innocence or that he could have pled guilty without a plea agreement, did not inform him of the high probability that others charged in the case would testify against him, and did not explain that the Government could seek a deliberate ignorance instruction at trial. (Doc # 751-2, Pg ID 8913) According to Gupta, he was not told about the third superseding indictment until months after it was filed, after the Government's plea offer had expired. Id. at 8914. Gupta now asserts that he would have accepted the Government's plea offer had he been informed. Id.

         Gupta went to trial in October 2012 and maintained his innocence throughout. On October 26, 2012, a jury found Gupta guilty on all counts charged. (Doc # 506) During trial, Gupta provided testimony while under oath that this Court found at sentencing to be impeached regarding his activities in the fraud. (Doc # 749, Pg ID 8865) This Court also found at sentencing that Gupta “obstructed this investigation and prosecution by suggesting to at least one other person [to] lie or mislead investigating agents and also by destroying and causing others to destroy documents that would connect him to the fraud. And not only connect them to the fraud but that they covered up the fraud in some manner or other.” Id. at 8864-65. Gupta was sentenced to concurrent terms of 120 months of imprisonment, followed by concurrent terms of 36 months of supervised release on each count. (Doc # 664) After sentencing, but before his report date of February 4, 2015, Gupta attempted to flee the country. On January 21, 2015, he was arrested at an airport in Newark attempting to board a flight departing for Mumbai, India. (Doc # 742) He subsequently pled guilty to contempt of court.

         II. FINDINGS OF FACT

         The Court held an evidentiary hearing on April 17, 2017 regarding whether Defense Counsel Kriger advised Gupta that if Gupta did not accept the plea offered by the Government, a third superseding indictment or further charges would be filed against Gupta.

         Gupta testified that Kriger was his chief attorney in the criminal case, and that their main mode of communication was via e-mail. Kriger would forward him most of the e-mails that Kriger received from the Government regarding the case, and Kriger would also blind carbon copy Gupta on many of Kriger's emails to the Government.

         Gupta testified that he attended the reverse proffer on February 22, 2012 with attorneys Kriger, DeDay LaRene (“LaRene”), and Raj Sutariya. He was very nervous because there were three prosecutors and seven to ten FBI agents there. Gupta testified that Kriger received a phone call regarding another matter and left the reverse proffer right as it was about to begin. At the reverse proffer, the Government showed Gupta evidence against him, much of it in the form of checks. Gupta testified that he recalled profit-sharing checks. However, Gupta testified that he did not know that the Government was considering bringing money laundering charges against him because he received so many bank records that it was not clear to him.

         In late February 2012, shortly after the reverse proffer, Gupta received several emails from the Government discussing money laundering evidence against him. A February 28, 2012 e-mail from the Government, which Kriger forwarded to Gupta the next day, states as follows.

We now have the bank records for Anthem Management and Investment company analyzed. The only checks going in are the two from All American, which our witnesses will testify were Gupta's share of the fraud proceeds at ...

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