Medicareless

United States v. Wexler, No. 06-1571-cr (2d Cir. April 3, 2008) (Miner, Raggi, CJJ, Rakoff, DJ)

David Wexler was a Manhattan dermatologist who ran a prescription mill. He would prescribe painkillers to patients whom he did not examine or treat, often with the understanding that either the prescriptions or the medications would be sold to others. The prescription mill was also the fuel for an ongoing Medicare fraud in which he would, for these same patients, bill the government for multiple procedures that he did not perform. Wexler was convicted after a jury trial of narcotics and fraud counts and was sentenced principally to 20 years’ imprisonment. On appeal, the majority of a divided panel reversed his conviction on the most serious drug count, concluding that the evidence was insufficient, and remanded the case for resentencing.

Wexler had a patient named Barry Abler, for whom he wrote numerous prescriptions for painkillers: Dilaudid, Percocet, Vicodin and Soma. Abler also introduced others to Wexler for the same purpose, and Wexler wrote them prescriptions for many of the same drugs although, according to the trial testimony, not Dilaudid. On May 19, 2001, Wexler gave Abler a prescription for Dilaudid, and Abler died nine days later of an overdose.

Count One of the indictment charged Wexler with conspiracy to distribute Dilaudid, Percocet, Vicodin and Xanax, and conspiracy to distribute Dilaudid resulting in death. Count Nine charged him with a substantive count of distributing Dilaudid resulting in death. The jury convicted him of both; with respect to Count One, it found that the conspiracy resulted in Abler’s death; with respect to Count Nine, it concluded that the distribution did not result in Abler’s death. As a result of the conviction on Count One, however, Wexler was subject to, and received, a twenty-year mandatory minimum sentence.

On appeal, the majority held that the evidence supporting the conviction of conspiracy to distribute Dilaudid causing death under Count One was legally insufficient, because there was no evidence that Wexler conspired with Abler to distribute that particular drug. Under the so-called “buyer-seller” rule, an “agreement that one member of a conspiracy supply another with a drug . . . does not comprise an agreement to distribute that drug.” The trial evidence established that Abler was the only one of the relevant patients to receive prescriptions for Dilaudid; moreover, there was no proof that “Abler agreed to, or did, distribute Dilaudid” to anyone else. Indeed, the quantities of Dilaudid that Wexler prescribed to him were consistent with personal use. Thus, Abler and Wexler were “mere buyer-and-seller” – by prescription, of course – with respect to Dilaudid. While Wexler’s illegal sale of the drug to Abler was a substantive crime, that sale agreement itself was not a conspiracy to distribute because it had “no separate criminal object.”

The court rejected the government’s theory that Abler and Wexler’s “multi-year, multi-member conspiracy” to distribute many different drugs was itself sufficient evidence. Calling this a “broad brush approach,” the majority noted that the specific charge in the indictment was to distribute “Dilaudid,” not a “variety of drugs,” causing death. “The only evidence that could bring Abler and Wexler out of the realm of buyer and seller with respect to Dilaudid was evidence suggesting an intent to redistribute Dilaudid itself.” Here, there was no such evidence.

The majority ended with bit of good old-fashioned Apprendi reasoning, noting the sentencing disparities in the drug statutes, which depend on the type of drugs involved. Where “the type of drug is a critical determinant of the length of a defendant’s sentence, the Government should be required to prove what it alleges.”

Judge Raggi, in dissent, criticized every aspect of the majority’s decision, which she deemed an “unwarranted extension of the buyer-seller rule.” To her, the evidence showed that Abler and Wexler were more than “mere” buyer and seller. She also disagreed with the majority’s insistence that the pleadings in this case required specific evidence of an agreement to distribute Dilaudid, and with its conclusion that there was insufficient evidence of a conspiratorial intent to redistribute that particular drug.