United States v. Young

108 F.4th 1307

UNITED STATES of America, Plaintiff-Appellee, v. Elizabeth Peters YOUNG, Defendant-Appellant.

No. 20-13091

No. 20-14377

United States Court of Appeals, Eleventh Circuit

Filed: July 22, 2024

Appeals from the United States District Court for the Southern District of Florida, D.C. Docket No. 0:19-cr-60157-RAR-1

Scott Dion, Emily M. Smachetti, DOJ-USAO, Southern District of Florida, Miami, FL, Brandy Brentari Galler, DOJ-USAO, West Palm Beach, FL, Andrea G. Hoffman, DOJ-USAO, Charleston, SC, Lisa Tobin Rubio, Jason Wu, U.S. Attorney Service - SFL, Miami, FL, U.S. Attorney Service - Southern District of Florida, U.S. Attorney Service - SFL, Miami, FL, for Plaintiff-Appellee.

Andrew Feldman, Feldman Firm, PLLC, Miami, FL, Marissel Descalzo, Tache Bronis and Descalzo, PA, Miami, FL, for Defendant-Appellant.

Before Jordan, Rosenbaum, Circuit Judges, and Manasco,^* District Judge.

Rosenbaum, Circuit Judge:

Under the federal Anti-Kickback statute, it's illegal to make or accept payments for referring business that a federal program will reimburse. Among other functions, this law helps ensure that medicine-related decision-makers do not make decisions for financial-enrichment reasons but rather for the patient's benefit.

Here, a jury convicted Defendant Elizabeth Peters Young of conspiring to pay and receive kickbacks from federal reimbursements for medical creams and lotions that the pharmacies she worked with dispensed. As part of Young's sentence, the district court ordered Young to make restitution in the amount of $1.5 million to the federal government, based on the amount of kickbacks Young received. The court also entered a forfeiture judgment against Young in that same amount because it represented the gross proceeds Young controlled during the conspiracy.

Young now challenges her conspiracy conviction, the restitution order, and the forfeiture judgment. She asserts that insufficient evidence supported her conspiracy conviction, that the government did not meet its burden to support the restitution amount, and that the district court erred in calculating the forfeiture amount.

After careful review of the record and with the benefit of oral argument, we affirm Young's conspiracy conviction. We also affirm the district court's forfeiture judgment as consistent with controlling precedent. But we agree with Young that the district court erred in crafting the restitution order. Because the government did not establish that the amount of loss it experienced as a result of Young's conduct equaled the total amount of kickbacks Young possessed during the conspiracy, we vacate the restitution order and remand for further proceedings consistent with this opinion.

I. BACKGROUND

A. Factual Background

Young had a career marketing medical products to surgeons. She often spent time in the operating room during surgery in case her surgeon clients needed assistance with the products she sold them, and she developed relationships with her clients.

Around 2012, Young started her own distributorship, Young Surgical, LLC. Young Surgical initially sold devices related to spinal surgeries, as that was Young's area of expertise.

But in early 2015, Young decided to start marketing over-the-counter pain-relieving patches and creams to doctors who treated workers' compensation patients. The patches went by the brand name Terocin, and the creams went by the brand name LidoPro. Terocin and LidoPro were expensive. So only a few healthcare programs, including the Federal Employees' Compensation Act ("FECA") program, administered by the Department of Labor's Office of Workers' Compensation Programs, would pay for them. Those programs applied an extremely high rate in reimbursing the pharmacies that provided Terocin and LidoPro. For instance, a program paid one providing pharmacy $802 for Terocin, even though the product cost the pharmacy only $200, plus $16 in shipping.

Young decided that she would try to sell the patches and creams to Dr. Plas James, one of Young Surgical's clients who owned and operated a practice in Georgia. So she approached Dr. James's medical assistant and office manager, Desiree de la Cruz.¹ Young and de la Cruz had been friends for more than fifteen years. Over the years, Young had helped de la Cruz by buying her food and, on one occasion, even giving her a car. In February 2015, Young asked de la Cruz to tell Dr. James about Young's new venture selling Terocin and LidoPro.

After meeting with de la Cruz, Young looked for a pharmacy that could provide Terocin and LidoPro. A Google search led her to a pharmacy in Pompano Beach, Florida, called Drugs4Less. Drugs4Less had a surplus of Terocin and LidoPro and had experienced trouble offloading them because of their expense.

Young contacted the owner of Drugs4Less, Dr. Amir Serri, and they entered into a contract under which Young would receive a kickback of 50% of the net profits from the prescriptions she was able to direct to Drugs4Less. Drugs4Less then sent a few samples of Terocin and LidoPro to Dr. James, who agreed to use the products with his patients.

Around the same time, Young hired Tim Mitchell as a sales representative for Young Surgical. Mitchell and de la Cruz were living together then and later married. Before Young hired him, Mitchell had been a cashier and had held some positions as a sales representative, including for Aflac. But he had never worked in the healthcare industry.

Young was not concerned about Mitchell's lack of experience, though. She hired him because of his relationship with de la Cruz, whom Young described as a "unicorn." A "unicorn," for these purposes, is someone who "worked in an office that had access to the doctor [and] had the ability to give everybody that came through a prescription," which was "very, very rare" and "unique." Whether or not it's true that de la Cruz had the ability to "give" every patient a prescription for Terocin and LidoPro, the evidence showed that de la Cruz participated in securing prescriptions for Dr. James's patients. For example, Young said de la Cruz "wr[ote]" "script[s]," and Young sent an email saying, "With all of [de la Cruz's] refills today, we're at nine thousand for the day."

With Mitchell onboard as her sales representative and de la Cruz involved in processing prescriptions for Dr. James, Young implemented her kickback scheme. It worked like this: Dr. James saw patients in Georgia who sought treatment for injuries. He often prescribed pain patches and creams to his patients. And Young made it easy for him to prescribe Terocin and LidoPro, between de la Cruz's presence in Dr. James's office and Young's provision of preprinted prescription pads with the drug names Terocin and LidoPro in large print and the generic form of the drugs in small print underneath.²

When Dr. James prescribed Terocin or LidoPro to patients who were eligible for federal workers' compensation, de la Cruz sent those prescriptions to be filled at the Drugs4Less pharmacy, even though it was located in Florida. Drugs4Less then filled the prescriptions, shipped the patches and creams for free to the patients, and sent a bill to the FECA program in the Office of Workers' Compensation Programs. That office reimbursed Drugs4Less at the extremely high rates Terocin and LidoPro supported, and Drugs4Less in turn sent half its profits to Young. Young then sent 20% of her revenue to Mitchell for de la Cruz's services.

The co-conspirators focused on Terocin and LidoPro because of their high reimbursement rates. In an email to her Drugs4Less contact, Young even called "adding [L]ido[P]ro" her "best idea EVER." And in response to an email from Drugs4Less asking about refills on Terocin patches, de la Cruz responded, "Refills for everyone!!!!!!!" But if federal programs denied prescriptions for Terocin or LidoPro, Dr. James's office would not prescribe an alternative treatment, further highlighting that the scheme relied on the high rates Terocin and LidoPro supported.

The scheme was a huge financial success. Just a few months into the venture, Young and Drugs4Less enjoyed their first month with over $100,000 in profits. By the end of August 2015, Young's monthly share of the profits reached $134,952. In total, in the roughly sixteen months between March 2015 and July 2016, Young received $1,228,404 from Drugs4Less based on reimbursements from workers' compensation programs, the vast majority of which came from the FECA program.

Of this, Young sent Mitchell $338,255 as purported compensation for his work as a sales representative. In reality, though, as we've noted, these payments were kickbacks to de la Cruz for sending the prescriptions to Drugs4Less. Indeed, Mitchell testified at trial that he did no work at all in his position as a sales representative for Young Surgical. He merely waited for the checks to come in each month as compensation for de la Cruz's work securing the prescriptions.

The arrangement continued through the summer of 2016. Around that time, Young took a few steps to try to limit the legal exposure from her scheme. First, Young had Mitchell sign a declaration stating that he didn't try to influence Dr. James and that Dr. James made all the medical decisions. Second, she sent Mitchell emails purporting to seek assurances that de la Cruz was not in a position of authority to award the referral of business (even though that was the reason Young hired Mitchell). Third, she arranged a training opportunity for Mitchell so he would appear to be a bona fide sales representative. And fourth, she asked Dr. Serri to hire Mitchell and herself as employees of Drugs4Less, which she hoped would shield her from liability under the Anti-Kickback Statute.

But Dr. Serri refused to hire Young and Mitchell. So Young terminated the relationship with Drugs4Less and found employment for herself and Mitchell at another pharmacy. Apparently unable to find a cooperating pharmacy in Georgia, where the patients were located, or Florida,...