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Media Alerts - U.S. v. Abdur Tai - Third Circuit
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May 12, 2014
  U.S. v. Abdur Tai - Third Circuit
Headline: Criminal Conviction Upheld in Fraud Case Involving Fen-Phen Settlement

Area of Law: Criminal Law

Issue(s) Presented: Whether the district court committed plain error by implicitly shifting the burden of proof in its wilful blindness jury instruction and applying upward adjustments under the advisory Sentencing Guidelines?

Brief Summary: Defendant Tai appealed his conviction and sentence for mail and wire fraud in connection with claims for payment from the Fen-Phen Settlement Trust. Tai argued that the district court committed plain error by implicitly shifting the burden of proof in its "willful blindness" jury instruction and applying upward adjustments under the advisory Sentencing Guidelines for abuse of a position of trust, use of a special skill, and aggravated role. The Third Circuit concluded that the district court's jury instruction and upward adjustments were not erroneous, but remanded the case so the district court could determine whether Tai supervised a criminally culpable subordinate, which is necessary to award an aggravated role enhancement.

Significance (if any):

Extended Summary (if applicable):
Defendant Tai appealed his conviction and sentence for mail and wire fraud in connection with claims for payment from the Fen-Phen Settlement Trust. Tai argued that the district court committed plain error by implicitly shifting the burden of proof in its "willful blindness" jury instruction and applying upward adjustments under the advisory Sentencing Guidelines for abuse of a position of trust, use of a special skill, and aggravated role. The Third Circuit concluded that the district court's jury instruction and upward adjustments were not in error, but remanded the case so the district court could determine whether Tai supervised a criminally culpable subordinate, which is necessary to award an aggravated role enhancement.

The Fen-Phen settlement trust was established due to a class-action lawsuit alleging that the diet pill Fen-Phen caused heart disease. To obtain payment from the trust, people affected by this drug had to obtain a signed affidavit from a physician. The trust relied on the integrity of physicians submitting these affidavits on behalf of claimants. In 2002, the district court determined that 100% of claims would be audited. Tai, a board-certified cardiologist, was retained by many attorneys representing claimants to prepare reports. Tai estimated that he was owed over $2 million for his reports - based on the amount of reports he wrote and a bonus fee for each successful claim. Tai admitted to having his assistant review many of the echocardiograms because he did not have time for them all. He also admitted to reporting different findings than those of technicians' reports in about 10% of cases. Tai was charged with wire and mail fraud, and sentenced to 72 months' imprisonment, fines, and three years' supervised release.

None of the issues Tai appealed were preserved for review. Thus, plain error review applied. For reversible plain error to exist, there must be (1) an error; (2) that is plain; (3) that affects substantial rights; and (4) which seriously affects the fairness, integrity, or public reputation of judicial proceedings. The Court found that the district court's willful blindness instruction did not exhibit clear error. These instructions told the jury when willful blindness does or does not exist, but did not imply in any way that Tai must present evidence concerning his own beliefs or knowledge. Thus, there was no implicit or explicit shifting of the burden of proof to Tai. The district court also told the jury that it could not find knowledge based on a willful blindness theory unless the Government proved Tai's knowledge beyond a reasonable doubt, and in fact the jury was expressly told at the beginning of the instructions that Tai never had to prove anything, and that the burden always remained on the government. This was more than sufficient to inform the jury that Tai bore no burden to prove he was not wilfully blind.

Tai next argued that the district court plainly erred by imposing a two-level increase under U.S.S.G ยง 3B1.3 for abuse of a position of trust and use of a special skill. Section 3B1.3 allows an increase of two offense levels "f the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense." Again, the Third Circuit reviewed the district court's decision for plain error. The Court found that Tai's credentials, and the deference he was accorded as a result of them, placed him in a position that facilitated his criminal conduct. His signature gave claimants the opportunity to receive, collectively, hundreds of millions of dollars in compensation, yielding more than $2 million in potential payments to him. The trust's auditing ability did not limit any doctor's authority, and only looked to whether a reasonable physician could come to such conclusion. Also, Tai's skill and credentials were the means by which he could participate in the claims process. Without them, he would not have been permitted to submit reports to support claims and collect a fee. Thus, the district court did not commit plain error in concluding that Tai abused a position of trust and use of a special skill.

The Third Circuit affirmed the judgment of conviction but vacated and remanded the judgment of sentence to address the applicability of the role enhancement. More fact-finding was required by the district court to determine whether the alleged participants were criminally liable, which would allow for application of the twofold sentencing enhancement. A copy of the Third Circuit's decision can be found here:
http://www2.ca3.uscourts.gov/opinarch/131998p.pdf

Panel (if known): Fuentes and Schwartz, Circuit Judges; Rosenthal, District Judge

Argument (if known):

Date of Issued Opinion: April 30, 2014

Docket Number: 13-1998

Decided: April 30, 2014

Case Alert Author: Alexandra Perry

Counsel (if known):
Paul G. Shapiro, Esq. [ARGUED]
Office of the United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106
Counsel for Appellee

Peter Goldberger, Esq. [ARGUED]
50 Rittenhouse Place
Ardmore, PA 19003
Counsel for Appellant

Author of Opinion: Rendell, Circuit Judge

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 05/12/2014 01:05 PM     3rd Circuit  

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