Monday, April 29, 2013

California Medical Board Under Attack

The California Medical Board is under siege. In a strongly worded article, Michael Hiltzik of the Los Angeles Times on 4/26/13 in an article entitled "Legislature Should Pull Plug On Inept Medical Board of California" urged Sacramento law makers to "sunset" the Board, fire the executive director and start fresh.  Mr. Hilltzik has reported extensively on surgical centers, especially Lap Band surgery centers. 

However, Mr. Hilltzik does not address where the funds will come for the investigations he recommends be initiated on their own without any patient or other complaints. There is an allegation that the accrediting agencies such as Joint Commission which regulates hospitals are in the pockets of the surgery centers. The article is inflammatory in my opinion and does not suggest how a "new" agency would operate or be funded. The Medical Board is self-funded from physician dues and fees. 


As an attorney who represents physicians on a regular basis, I find the proposal of just starting over or turning the agency over to the Attorney General's Office to be simplistic. There are many tasks performed by the Medical Board of an administrative nature. When there are criminal investigations, those should be addressed on a case by case basis as to which agency should handle the criminal side of the investigation. Should it be the DEA, county District Attorney Offices, city attorney's offices and local law enforcement? Each case is different and requires different skills and resources. The U.S. Drug Enforcement Agency is the one that issues physicians a certificate to prescribe medications, including Schedule II drugs.

I have seen the Board over the past 5 years become very aggressive where physicians did not document medical exams or demonstrate sufficient medical necessity when they prescribed pain medications. In one case I handled last year, the physican's state criminal case of prescribing to undercover officers was dismissed but the Board insisted on revocation of the license. 

Saturday, April 20, 2013

Chicago Physician Facing Federal Charges For Illegally Prescribing Hydrocodone To A Hospital Patient Using Another Physician's DEA Number


A Chicago physician Dr. Kenneth S. Nave associated with Sacred Heart Hospital on the city’s west side was arrested on April 17, 2013 and is facing federal charges for allegedly illegally prescribing hydrocodone to a hospital patient without having a valid license and registration to prescribe controlled substances.  Dr. Nave allegedly illegally used the Drug Enforcement Administration registration number of another physician when he prescribed the hydrocodone last December. There is no allegation that the prescription was not medically necessary.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

According to the federal complaint against Dr. Nave, the investigation has revealed that between at least November 2012 and February 25, 2013, he issued approximately 101 prescriptions for controlled substances to approximately 33 patients at Sacred Heart  using the DEA registration issued to another physician. It is specifically alleged that on December 7, 2012, Dr. Nave allegedly prescribed a particular patient 90 pills containing hydrocodone, a narcotic controlled substance, using this other physician registration number.

The illegal prescription count carries a maximum penalty of four years in prison and a $250,000 fine.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.  

Dr. Nave’s licensing status appears to have been a role in this case according to the affidavit. Dr. Nave’s Illinois license to practice medicine was suspended between 2002 and 2008.  It was restored to probationary status on Dec. 20, 2012, but his state license to prescribe controlled substances was not restored until February 26, 2013, according to the complaint affidavit.  Separately, Nave was not registered with the DEA to prescribe controlled substances but an application for DEA registration that was submitted on March 6, 2013 is pending, the affidavit adds.

On April 18, 2013, the Illinois Department of Financial and Professional Regulation issued an order suspending Nave’s license to practice medicine.

This case is related to an investigation of Sacred Heart Hospital overall.  On April 16, 2013, the owner and chief executive officer of Sacred Heart was arrested, along with the hospital’s chief financial officer and four physicians affiliated with the hospital on federal charges alleging a conspiracy to pay and receive kickbacks in exchange for referral of Medicare and Medicaid patients to the hospital.  Federal agents also executed search and seizure warrants as part of an ongoing investigation of Medicare fraud allegations involving medically unnecessary emergency room admissions and in-patient tracheotomy procedures.

Any questions or comments  should be directed to Tracy Green, a very experienced physican attorneywhite collar criminal defense attorney and DEA attorney at tgreen@greenassoc.com

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers in criminal matters in California and throughout the country. You can contact Ms. Green at 213-233-2260

Thursday, April 4, 2013

Mandatory Victim Restitution Act - Is Your Spouse Liable For Restitution Judgments?


The case of United States v. Berger, No. 08-50415 (9th Cir., Jul. 31, 2009), reminds us of the misfortune an innocent spouse might incur due to the criminal conduct of his or her spouse.  In that case, the Ninth Circuit Court of Appeals determined that the community property, including that portion which otherwise would be awarded upon dissolution of marriage to an innocent spouse, may utilized under the Mandatory Victim Restitution Act (MVRA) (18 U.S.C. § 3663(a)) to satisfy a restitution judgment obtained against a criminally liable spouse. This was even the case where the proceeds of the fraud were not used to purchase the property that was owned by an innocent spouse.

FACTUAL AND PROCEDURAL BACKGROUND

In 1986, while Richard Berger (Richard) and Cornella Berger (Cornella) were married, Richard joined a partnership (Partnership) which he and others formed for the purpose of purchasing a 290-unit apartment complex (Property). 

During the relevant period, Richard served as President and CEO of Craig Electronics (Craig), an electronics wholesaler. A federal grand jury returned an indictment, charging Richard with 36 counts of conspiracy, loan fraud, falsifying corporate books, and other securities fraud violations committed at Craig. After a jury trial, Richard was found guilty on 12 of those counts. Cornella was not involved in any wrongdoing associated with the illegal scheme.  No proceeds from the fraud scheme were invested in the Property.

As part of his sentence, Richard was ordered, pursuant to the MVRA, to pay restitution of just over $3.14 million to the victims of his fraud.  Thereafter, Richard consented to the Partnership’s entering into a contract to sell the Property. The district court ordered that Richard’s approximately $1.5 million share of the proceeds from the sale of the Property (the Proceeds) be deposited with the court.

The government filed an application to disburse the Proceeds to the victims of Richard’s fraud who were entitled to receive restitution. Cornella opposed the application, arguing that she was entitled to one-half of the Proceeds as her community property share.

Over Cornella’s objection, the district court granted the government’s application to disburse the entire sum of the Proceeds to the victims. Cornella appealed.  Cornella claims that the district court erred by failing to award her a one-half interest in the Proceeds.

LEGAL ANALYSIS

Cornella argued that the asset distribution should have been analyzed under case law governing criminal forfeiture, citing United States v. Lester, 85 F.3d 1409 (9th Cir. 1996) (holding that wife’s one-half interest in portion of community property was not liable to criminal forfeiture imposed on her husband).  The appellate court noted that restitution and forfeiture are distinct asset collection regimes, governed by different rules. Whereas criminal forfeiture is a judgment against a person convicted of a crime (id., at 1413), a restitution order under the MVRA is “a lien in favor of the United States on all property and rights to property of the person fined.” 18 U.S.C. § 3613(c) (emphasis added).  Thus, the Ninth Circuit analyzed the allocation of restitution funds using the law governing MVRA restitution.

Under the MVRA, the government may enforce a judgment imposing a fine in accordance with the practices and procedures for the enforcement of a civil judgment under Federal law or State law.  18 U.S.C. § 3613(a).  Thus, the appellate court looked to California law to determine Richard's property rights in the Proceeds.

Cornella and the government agreed that the Proceeds were community property. In the ordinary case, “the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.” Cal. Fam. Code § 910(a).  Thus, even though Richard was the only spouse who was a party to the restitution judgment, under the MVRA and California law the Proceeds’ community property status made Cornella liable for that debt, even though she was entirely innocent with respect to Richard's misdeeds.

PLANNING AHEAD

In handling a white collar criminal case, it is critical to look at restitution early on. This can affect strategy in the case and planning for future assets and family law issues. The restitution amounts in some criminal cases can influence family decisions, financial planning, and so on.  Moreover, payment of restitution early in the case can make a huge difference in the sentence. This legal issue is just one factor

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. The firm focuses its practice on the representation of professionals and businesses in civil, business, administrative and criminal proceedings. Their website is: http://www.greenassoc.com/

800 West 6th Street, Suite 450
Los Angeles, California 90017
213-233-2260

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