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United States v. Hofstetter

United States District Court, E.D. Tennessee, Knoxville

February 9, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
SYLVIA HOFSTETTER, THEODORE McCRARY, COURTNEY NEWMAN, and CYNTHIA CLEMONS, Defendants.

          MEMORANDUM AND ORDER

          C. CLIFFORD SHIRLEY, JR. UNITED STATES MAGISTRATE JUDGE

         All pretrial motions in this case have been referred to the Magistrate Judge pursuant to 28 U.S.C. § 636(b) for disposition or report and recommendation regarding disposition by the District Court as may be appropriate. This case is before the Court on the following pretrial motions:

(1) Defendant's Motion for Change of Venue and Motion for Pre-Voir Dire Jury Questionnaire [Doc. 52], filed by Defendant Hofstetter on March 14, 2016;
(2) Motion for Bill of Particulars [Doc. 115], filed by Defendant Newman on May 19, 2017;
(3) Defendant Sylvia Hofstetter, Cynthia Clemons, and Courtney Newman's Motion in Limine to Compel the Government to Produce Original Patient Files Pursuant to Federal Rule of Evidence 1002 [Doc. 151], filed on May 5, 2017;
(4) Defendant Courtney Newman's Motion to Join in Previously Filed Motion to Change Venue [Doc. 52] and Motion in the Alternative to Select a Jury Panel Outside of the Eastern District of Tennessee [Doc. 152], filed on May 5, 2017;
(5) Defendant's Joint Motion to Suppress Statements of Alleged Co-Conspirator or in Alternative Motion for a[n] Enright Hearing [Doc. 156], filed on May 5, 2017;
(6) Defendant's Joint Motion to Distribute Juror Questionnaire [Doc. 158], filed on May 5, 2017;
(7) Defendant's Motion to Correct the Record [Doc. 173], filed by Defendant Newman on May 19, 2017;
(8) Joint Motion for a Witness List [Doc. 175], filed on May 19, 2017;
(9) Joint Motion for Designation of Specific Evidence the Government Intends to Use in its Case-in-Chief [Doc. 177], filed on May 19, 2017;
(10) Motion for Severance of Defendants [Doc. 178], filed by Defendant Clemons on May 19, 2017;
(11) Defendant Cynthia Clemons' Motion for F.R.Cr.P. Rule 7(f) Bill of Particulars [Doc. 182], filed on May 19, 2017;
(12) Defendant's First Specific Brady Motion for Disclosure of Specific Items of Impeaching Information [Doc. 184], filed by Defendant Clemons on May 19, 2017;
(13) Defendant Courtney Newman's Motion to Join in Co-Defendant Cynthia Clemons['] Motion to Sever [Doc. 252], filed on August 21, 2017; and
(14) Motion of Defendant McCrary to Adopt Co-Defendant Cynthia Clemons' Motion to Sever [Doc. 255], filed on August 21, 2017.

         The parties appeared on June 7, 2017, for a hearing on all pending pretrial motions. Assistant United States Attorney Tracy L. Stone appeared on behalf of the Government. Attorneys Charles C. Burks, Jr., and Michael P. McGovern[1] represented Defendant Hofstetter. Attorneys Donald A. Bosch and Ann C. Short, represented Defendant McCrary. Attorney Christopher J. Oldham represented Defendant Newman. Attorney Randall E. Reagan represented Defendant Clemons. Defendants Hofstetter, McCrary, and Clemons were also present for the hearing.[2]

         For the reasons discussed below, the Court finds that the Third Superseding Indictment provides sufficient notice of the charges, a change in venue and a pretrial hearing on the existence of the alleged drug conspiracy is not warranted in this case, the motion for a juror questionnaire is premature, and that the Defendants have access to the patient files. Due to the filing of two superseding indictments and the addition of six new codefendants, the Court finds that the requests for a witness list, specific designation of the Government's proof, and severance should be deferred and reargued at the motion hearing scheduled for May 2, 2018, at 9:30 a.m. Finally, the Court finds the motion to correct the record regard to the timing of the filing of the expert report of Dr. Blake is moot.

         I. BACKGROUND

         On March 4, 2015, Defendant Sylvia Hofstetter was indicted [Doc. 3] with conspiracy to distribute oxycodone, conspiracy to commit money laundering, and seven counts of money laundering. On October 4, 2016, the Grand Jury returned a Superseding Indictment [Doc. 70] charging Defendant Hofstetter and five codefendants, Richard Larson, [3] Alan Pecorella, Theodore McCrary, Courtney Newman, and Cynthia Clemons, with conspiring to distribute and dispense controlled substances outside of the scope of professional practice and without a legitimate medical purpose from January 2009 to March 2015. Defendant Hofstetter is also charged with conspiring to commit money laundering and several[4] substantive counts of money laundering. Defendant Hofstetter is charged with three counts and the other codefendants are charged in two counts of maintaining a drug-involved premises. Defendants Hofstetter and Cynthia Clemons are charged with one count each of distributing controlled substances outside the scope of professional practice and without a legitimate medical purpose. Defendants Hofstetter and Clemons are also subject to a potential enhanced penalty for the alleged death of a patient with regard to two counts, which increases the punishment for those counts from a statutory maximum of twenty years to a statutory mandatory minimum of twenty years and a maximum of life imprisonment.

         Approximately one month after the June 7 motion hearing, the Grand Jury returned a Second Superseding Indictment [Doc. 224], that removed Defendant Larson and added Defendants Holli Womack, Clyde Tipton, and Maynard Alvarez. The Second Superseding Indictment retained the same charges for the instant Defendants, [5] with the exception of removing two of the substantive money laundering charges (former Counts Three and Four) for Defendant Hofstetter. The Second Superseding Indictment also changed the start date for the drug conspiracy in Count One (from January 2009 to November 2010) and the money laundering conspiracy in Count Two (from January 2011 to March 2011). Following the filing of the Second Superseding Indictment, the undersigned continued the trial to October 16, 2018, and gave the parties a new motion deadline of March 5, 2018, to file motions in light of the new charges. The Court also gave the new codefendants time to join in the existing, pending pretrial motions, but none did so.

         On January 4, 2018, the Grand Jury returned a Third Superseding Indictment [Doc. 278] in this case. This Indictment added three new codefendants: Luca Sartini, Luigi Palma, and Benjamin Rodriguez. The Indictment also no longer charges Defendants Pecorella, McCrary, Tipton, and Alvarez, [6] although they still named therein. The Third Superseding Indictment charges Defendant Hofstetter with participating in a RICO conspiracy (new Count One) with Defendants Sartini, Palma, and Rodriguez. Defendants Hofstetter, Newman, and Clemons remain charged with conspiring to distribute and dispense controlled substances, outside the scope of professional practice and without legitimate medical purpose (new Count Two). However, the drug conspiracy is alleged to have begun in April 2009, and Codefendants Sartini and Palma are added to this count. Moreover, the drug conspiracy now alleges an enhanced penalty for Defendant Hofstetter for the deaths of five people, rather than one person, as was alleged in the prior Indictment. Other than renumbering the counts, changes to some dates, [7] and the addition of the new codefendants, the remaining charges against Defendants Hofstetter, Newman, and Clemons are the same crimes alleged in the Second Superseding Indictment.

         On January 19, 2018, the Government filed the signed plea agreement [Doc. 289] of Defendant McCrary. In his plea agreement, Defendant McCrary acknowledges that he is giving up his right to a jury trial and the right to have the Government prove his guilt beyond a reasonable doubt. Thus, the Court finds that the Motion of Defendant Theodore McCrary to Adopt Co-defendant Cynthia Clemons' Motion to Sever [Doc. 255] is DENIED as moot and the other pending pretrial motions, in which Defendant McCrary has joined, are MOOT as to him.

         II. ANALYSIS

         Defendants Newman and Clemons, joined by Defendant Hofstetter, request [Docs. 115 & 182] a bill of particulars, arguing that the instant charges are insufficient to permit them to prepare a defense, to avoid surprise at trial, and to protect against a future double jeopardy violation. Defendants Hofstetter, Newman, and Clemons ask the Court for additional discovery in the form of a witness list [Doc. 175], the specific designation of evidence that the Government intends to use at trial [Doc. 177], the disclosure of impeaching information [Doc. 184], and for a pretrial hearing to establish the existence of a conspiracy [Doc. 156]. Defendants Hofstetter, Newman, and Clemons also ask [Doc. 151] for access to the original patient files at trial. Defendants Newman and Clemons ask to be severed [Doc. 178] for a separate trial from that of the other codefendants. Defendants Hofstetter, Newman, and Clemons ask for a change of venue [Doc. 52] or, alternatively, to empanel a jury from another district [Doc. 152], due to prejudicial pretrial publicity. The Defendants also ask [Docs. 52 & 158] to submit a questionnaire to potential jurors. Finally, the Defendants move [Doc. 173] the Court to correct the record with regard to the Government's expert disclosures. The Court will examine each of these motions herein.

         A. Bill of Particulars

         Pursuant to Federal Rule of Criminal Procedure 7(f), Defendants Newman [Doc. 115] and Clemons [Doc. 182] ask the Court to order the Government to provide a bill of particulars alleging the specific conduct by which they allegedly violated the charged statutes. They contend that the Indictment merely alleges the language of the cited statutes, without relating facts about the Defendants' alleged involvement in the charged drug conspiracy. Additionally, they argue that the voluminous discovery does not “shed any direct light” on the charges. Specifically, the Defendants do not know which of the six thousand patients the Government is claiming received prescriptions for controlled substances that were outside of the scope of professional practice or not issued for a legitimate medical purpose. Defendant Newman seeks particularization of the unindicted coconspirators, the overt acts the Government claims she performed in furtherance of the conspiracy and in maintaining a business for illegal drug distribution, the standard of professional practice that the Government claims applies in this case, and the property subject to forfeiture in Count Two.[8] Defendant Clemons asks for particularization of the unindicted coconspirators, her alleged overt acts in furtherance of the conspiracy, the amounts of controlled substances for which she is directly and/or vicariously liable, the admissibility of any co-conspirator statements, and the details regarding any evidence the Government intends to offer pursuant to Federal Rule of Evidence 404(b).[9] The Defendants contend that a Bill of Particulars is necessary to allow them to prepare their defense, to avoid surprise at trial, and to avoid a future double jeopardy violation.

         At the motion hearing, Mr. Oldham argued for a more detailed explanation of the charges. He stated that the Superseding Indictment was devoid of any overt acts and the case involved six thousand patient files seized from the clinics in question. Mr. Oldham stated that it was impossible for the Defendants to be prepared to defend the treatment in all six thousand files at trial. He asked that the Government at least narrow the number of patient files at issue. Mr. Reagan said the Defendants needed to know the identities of the unindicted coconspirators in order to be prepared to face statements by these individuals at trial. He asked the Court to order the Government to identify whether the unindicted coconspirators are limited to the one hundred defendants in the related cases, who have entered into plea agreements. Mr. Burks stated that Defendant Hofstetter joined in the motions for bills of particulars by Defendants Newman and Clemons.[10]

         AUSA Stone responded that the Superseding Indictment properly notifies the Defendants of the charges. He argued that a bill of particulars is not intended to outline the Government's evidence at trial, such as which witnesses it would call. Moreover, he would not know which witnesses or patient files the Government will use at trial, until he begins intensive trial preparation in the months immediately preceding the trial. AUSA Stone clarified that the six thousand patient files were taken from the Lenoir City and Lovell Road clinics and that no files were seized from the Gallaher View Road clinic. He stated that the Defendants have access to information that narrows the number of patient files potentially at issue, such as the Government's expert reports, which discuss certain patients by name, and the identities of individuals who were indicted in the related cases.

         AUSA Stone said that the “and elsewhere” in the Indictment refers to Florida and a medical facility in Georgia, where patients were referred for imaging tests. He stated that only Defendant Hofstetter had a connection to Florida. With regard to the timeframe of the medical providers' involvement in the conspiracy, AUSA Stone agreed that it was generally during each Defendant's employment at the pain clinics at issue. He stated that the exception to this would be 404(b) evidence for a couple of the Defendants who had previously worked at other pain clinics.

         “The indictment . . . must be a plain, concise, and definite written statement of the essential facts constituting the offense charged[.]” Fed. R. Crim. P. 7(c)(1). As a general rule, an indictment passes constitutional muster if it “contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense.” Hamling v. United States, 418 U.S. 87, 117 (1974); United States v. Landham, 251 F.3d 1072, 1079 (6th Cir. 2001) (quoting Hamling). An indictment may allege the charges using the words of the statute itself as long as it gives all the elements of the offense “fully, directly, and expressly[.]” Hamling, 418 U.S. at 117 (quoting United States v. Carll, 105 U.S. 611, 612 (1882)); Landham, 251 F.3d at 1079. Moreover, the statutory language “must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offense, coming under the general description, with which he is charged.” Hamling, 418 U.S. at 117-18 (quoting United States v. Hess, 124 U.S. 483, 487(1888)); Landham, 251 F.3d at 1079.

         Federal Rule of Criminal Procedure 7(f) states that “[t]he court may direct the government to file a bill of particulars” and that “[t]he government may amend a bill of particulars subject to such conditions as justice requires.” “A bill of particulars is meant to be used as a tool to minimize surprise and assist defendant in obtaining the information needed to prepare a defense and to preclude a second prosecution for the same crimes. It is not meant as a tool for the defense to obtain detailed disclosure of all evidence held by the government before trial.” United States v. Salisbury, 983 F.2d 1369, 1375 (6th Cir. 1993). The granting of a bill of particulars is within the court's discretion. See Id. (holding that the appellate court reviews the denial of a bill of particulars for an abuse of discretion). The level of detail in the indictment can be a basis for denying the motion for a bill of particulars. Id. Additionally, “a defendant is not entitled to a bill of particulars with respect to information which is available through other sources.” United States v. Paulino, 935 F.2d 739, 750 (6th Cir. 1991), superseded on other gnds by statute, United States v. Caseslorente, 220 F.3d 727 (6th Cir. 2000) (on sentencing issue).

         First, the Court observes that, with the exception of the request for the Government to particularize the standard of care that applies in this case, the Defendants do not allege any deficiency in the Indictment's statement of the elements of the offenses charged. Instead, the Defendants' motions primarily relate to the sufficiency of the facts alleged in the Indictment. After the Defendants filed and argued the motions for bills of particulars, the Government superseded the charges twice. Both the Second and the Third Superseding Indictments contain a “General Allegations” section that provides an additional explanation of the charges and the people involved in the alleged drug conspiracy. Moreover, the Third Superseding Indictment is a “speaking indictment” that contains twenty-seven paragraphs describing the crimes and those involved. The Defendants seek particularization of (1) the standard of professional practice to be applied in this case, (2) the identities of the unindicted coconspirators, (3) the overt acts the Government claims the Defendants performed in furtherance of the conspiracy and in maintaining a business for illegal drug distribution, (4) the amounts of controlled substances for which they are each directly and/or vicariously liable, and (5) the co-conspirator statements and 404(b) evidence that the Government intends to offer at trial. The Court examines the need for particularization as to each of these categories of information requested by the Defendants.

         (1) Standard of Professional Practice

         The Defendants ask the Court to order the Government to state in detail the standard of professional practice to applied in this case, the alleged violation of which is the basis of the charges in the drug conspiracy and the charges of maintaining a drug-involved premises. Count Two of the Third Superseding Indictment charges that the Defendants “distributed and dispensed, or caused to be distributed and dispensed, [controlled substances] outside the scope of professional practice and not for a legitimate medical purpose[.]” Counts Nine through Eleven of the Third Superseding Indictment allege that the Defendants named therein maintained a pain clinic “for the purpose of illegally distributing and dispensing Schedule II controlled substances outside the scope of professional practice and not for a legitimate medical purpose[.]”

         The undersigned has already determined [Doc. 275, Report and Recommendation, pp.1');">p.1516] that the Superseding Indictment (which contains this same language) does not fail to state an offense:

The Court turns first to the legal standard that the Government must prove, in order to show that a medical practitioner, licensed to prescribe controlled substances, has done so in violation of the Controlled Substances Act (“CSA”). Title 21, United States Code § 841(a)(1) provides “[e]xcept as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally . . . to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance[.]” Although certain licensed medical professionals are authorized to prescribe controlled substances, a “prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 C.F.R. § 1306.04(a).[11]Thus, “[i]n order to support a violation of the CSA, the jury ha[s] to find that the [medical professionals] knowingly and intentionally acted ‘outside the course of professional practice' and without ‘a legitimate medical purpose.'” United States v. Chube II, 536 F.3d 693, 697 (7th Cir. 2008).
The Supreme Court determined, over forty years ago, that doctors could be charged with violating § 841(a)(1), despite the fact that they are authorized to prescribe controlled substances. United States v. Moore, 423 U.S. 122 (1975). In Moore, the Court unanimously held that “registered physicians can be prosecuted under § 841 when their activities fall outside the usual course of professional practice” because “only the lawful acts of registrants are exempted.” Id. at 124, 131 (emphasis added). The Supreme Court upheld the application of the CSA to Defendant Moore, who prescribed methadone to patients in large amounts without an “adequate physical examination, ” directions for use, regulating the dosage, or taking precautions to prevent misuse or resell of the drug. Id. at 124. Dr. Moore also ignored test results and charged graduated fees based upon the amounts of drugs prescribed, rather than the services performed. Id. According to the Supreme Court, “[i]n practical effect, he acted as a large scale ‘pusher' not as a physician.” Id.

         The Court noted that

“[t]he Sixth Circuit has upheld the application of § 841(a)(1) to medical professionals in the face of a vagueness challenge. United States v. DeBoer, 966 F.2d 1066, 1068-69 (6th Cir. 1992). “[T]he language in § 841(a)(1) and 21 C.F.R. § 1306.04(a) clearly defines the [medical professional's] responsibilities that give rise to conduct that constitutes an unlawful distribution of a prescription drug.” Id. at 1069. The court determined that the evidence was sufficient to show “that the defendant acted outside the scope of his profession.” Id.

[Doc. 275, p.1');">p.17 n.9] Here, the Third Superseding Indictment accurately states the elements of the offenses, as well as stating 21 C.F.R. § 1306.04(a) [see Doc. 278, ¶6]. Accordingly, the Court finds no need for additional particularization of the standard of care.

         (2) Identities of Unindicted Coconspirators

         The Defendants ask the Court to order the Government to identify all of the unindicted coconspirators to the drug conspiracy alleged in Count Two (formerly Count One). They also ask for the names and addresses of anyone present at each allegedly illegal drug transaction. It is well settled in this circuit that the Government is not required to furnish in a bill of particulars the names of coconspirators or other persons present when the defendants allegedly participated in the conspiracy. United States v. Rey, 923 F.2d 1217, 1222 (6th Cir. 1991); see also United States v. Page, 575 F. App'x 641, 643 (6th Cir. 2014) (observing that “the government is not obliged to provide the names of a defendant's alleged co-conspirators”). In this respect,

[a] defendant may be indicted and convicted despite the names of his co-conspirators remaining unknown, as long as the government presents evidence to establish an agreement between two or more persons, a prerequisite to obtaining a conspiracy conviction. As long as the indictment is valid, contains the elements of the offense, and gives notice to the defendant of the charges against him, it is not essential that a conspirator know all other conspirators. “It is the grand jury's statement of the ‘existence of the conspiracy agreement rather than the identity of those who agree' which places the defendant on notice of the charge he must be prepared to meet.”

Id. (internal citations omitted) (quoting United States v. Piccolo, 723 F.2d 1234, 1239 (6th Cir. 1983)). Thus, the Government is not required to reveal the names of unindicted coconspirators. United States v. Crayton, 357 F.3d 560, 568 (6th Cir. 2004). Nor is it obliged to reveal a list of its witnesses. See United States v. McCullah, 745 F.2d 350, 353 (6th Cir. 1984) (holding that the Sixth Circuit “has firmly established that defense counsel is not entitled to know in advance of trial who will testify for the government”).

         In the instant case, however, the Court finds that the Government has revealed the names of numerous unindicted coconspirators. The Government has stated that over one-hundred individuals, whom it indicted in the related cases, are coconspirators in this case. The Court finds that further specification of the names of unindicted coconspirators is not necessary for the Defendants to understand the charges in this case. The Court will address the Defendants' request for a list of the Government's witnesses in its analysis of the Defendants' joint motion for a witness list.

         (3) Overt Acts

         The Defendants also asks the Court to order the Government to particularize their roles in the alleged drug conspiracy and in maintaining a drug-involved premises. They ask the Government to specify the date, time, place, and persons present at any overt acts that the Government alleged they performed in furtherance of the conspiracy. They argue that they are not able to defend against the charges without this information because neither the Indictment, nor the discovery provided by the Government, reveal their role in the alleged crimes. The Government responds that it is not required to prove, much less charge, an overt act in furtherance of the drug conspiracy alleged in this case.

         The Court observes that “a defendant is not entitled to discover all the overt acts that might be proven at trial.” Salisbury, 983 F.2d at 1375. A request for a bill of particulars likewise may not be granted if the purpose “is to obtain a list of the Government's witnesses or to discover all of the overt acts that might be proven at trial.” United States v. Musick, 291 F. App'x 706, 724 (6th Cir. 2008). With respect to a conspiracy charged under 21 U.S.C. § 846, “‘an overt act need be neither charged nor proved[.]'” United States v. Dempsey, 733 F.2d 392, 396 (6th Cir. 1984) (quoting United States v. Umentum, 547 F.2d 987, 991 (7th Cir. 1976)). Accordingly, because there is no requirement that the Government charge an overt act in a drug conspiracy under § 846, there is likewise no need to particularize an indictment that fails to do so.

         However, in this case, the Second and particularly the Third Superseding Indictments allege facts regarding the Defendants' involvement in the drug conspiracy. Paragraphs 1 through 7 of the Third Superseding Indictment allege generally how the drug conspiracy worked. Paragraphs 8 through 27 describe the entities and Defendants involved in the drug conspiracy, including Defendant Hofstetter (paragraph 20), Defendant Newman (paragraph 23), and Defendant Clemons (paragraph 24). Paragraph 46 alleges that Defendant Hofstetter pressured the medical providers employed at the pain clinics to see large numbers of patients and that the medical providers did not provide individualized treatment to patients but, instead, prescribed large amounts of opioids to all patients.

         The Defendants seek particularization of which patients received prescriptions outside of the scope of professional practice and without a legitimate medical purpose. The Third Superseding Indictment lists a few patients, by their initials, in paragraphs 54, 61-66, and 85. The Government avers that further narrowing of the patients as requested by the ...


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