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United States v. Singleton

United States District Court, E.D. Kentucky, Central Division

April 29, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
ERNEST WILLIAM SINGLETON, DOUBLE D HOLDINGS, LLC, S& R MEDICAL ENTERPRISES, LLC, CENTRAL KENTUCKY FAMILY PHARMACY, and GRANT COUNTY WELLNESS CENTER, LLC, Defendants

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For Ernest William Singleton, also known as Will Singleton, Defendant: Benjamin Gerald Dusing, The Law Offices of Benjamin G. Dusing, PLLC, Covington, KY.

For Charles D. Raley, Patricia V. Raley, Claimants: Mark L. Moseley, LEAD ATTORNEY, Landrum & Shouse LLP - LEXINGTON, Lexington, KY.

For Pat Clements, Jr., Claimant: William G. Fowler, II, LEAD ATTORNEY, William G. Fowler II PLLC, Lebanon, KY.

For Randall Sims, Margie Coulter, Joe Coulter, Karen A. Winders, William Troy Winders, Betty D. Sims, Claimants: John Martin Simms, LEAD ATTORNEY, Atkinson, Simms & Kermode PLLC, Lexington, KY.

For Central Kentucky Agricultural Credit Association, Claimant: Benjamin D. Allen, Guy Graves, LEAD ATTORNEYS, Gess, Mattingly & Atchison, P.S.C., Lexington, KY.

For USA, Plaintiff: Ron L. Walker, Jr., LEAD ATTORNEY, David Y. Olinger, Jr., Patrick H. Molloy, U.S. Attorney's Office, EDKY, Lexington, KY; Shawna Kincer, Commonwealth Attorney's Office - Lexington, Lexington, KY.

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OPINION & ORDER

KAREN K. CALDWELL, CHIEF UNITED STATES DISTRICT JUDGE.

In June, 2013, the defendants were convicted of number of drug related offenses including conspiracy to knowingly and intentionally distribute and dispense controlled substances outside the scope of professional practice and not for a legitimate medical purpose. These charges stem from the distribution of pain pills, namely oxycodone, through two pain clinics in Georgetown and Grant County, Kentucky. Both clinics were owned and operated by Ernest Singleton.

At the close of the government's evidence and again after the close of all evidence, the defense sought a judgment of acquittal on all counts of the indictment. The Court denied the motions as to all counts except Count 11, on which ruling was reserved. (DE 198, 210). This matter is now before the court on Defendant Ernest William Singleton's post-verdict

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motion for judgment of acquittal (DE 215) and motion for a new trial (DE 216) brought pursuant to Rules 29 and 33 of the Federal Rules of Criminal Procedure. For the following reasons, the Court will grant in part and deny in part the defendant's motion for acquittal, and deny his motion for a new trial.

I.

In 2010, Defendant Ernest William Singleton, a former nurse, opened two pain management clinics, Central Kentucky Bariatric and Pain Management (the " Georgetown clinic" ) and Grant County Wellness Center (the " Dry Ridge clinic" ). Singleton hired and managed the medical, clerical and nursing staff at both clinics, which operated strictly on a cash basis. Initially, Singleton acquired the services of physicians through a locum tenens agency. Later, however, Singleton purchased the locum tenens contracts of two of these doctors, Gregory White and Lea Ann Marlow, who continued to work at the Georgetown and Dry Ridge clinics. Ultimately, both physicians testified against Singleton after pleading guilty to charges of dispensing narcotic pain medication outside the scope of professional practice and not for a legitimate medical purpose.

The government's investigation of the clinics, the physicians and Singleton began in 2011 after law enforcement received complaints about the Georgetown clinic from local pharmacies regarding the nature and quantity of narcotic pain medication being prescribed. In March, 2013, Singleton and four of his related business entities were indicted on charges of conspiracy to distribute and dispense controlled substances in violation of 21 U.S.C. § 841(a)(1) and § 846; aiding and abetting in distributing and dispensing controlled substances in violation of 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2; opening and maintaining a business for the purpose of distributing and dispensing controlled substances in violation of 21 U.S.C. § 856(a)(1); and money laundering and conspiracy to commit money laundering in violation of 18 U.S.C. § § 1956 and 1957. See Second Superseding Indictment dated March 7, 2013 (DE 73).

After a three-week trial, a jury convicted Singleton and the four business entities on all counts. Among the government's witnesses who testified regarding Singleton's role in the offense were several physicians who worked at both clinics pursuant to their contracts with the locum tenens agency. The jury also heard from Doctors Marlow and White, whose locum tenens contracts were purchased by Singleton and who continued working with Singleton as the clinics grew. Additionally, the jury heard members of both clinics' nursing and clerical staff along with former patients, all of whom testified that Singleton was in charge of both clinics, which treated an inordinately large number of patients exclusively on a " cash only" basis.

DEA Agent Lynn Thompson testified to the presences of " red flags" that led her to investigate Singleton and his clinics. The first red flag consisted of complaints from legitimate pharmacies that stopped filling prescriptions issued at the Georgetown Clinic because of the large number of prescriptions issued to patients who paid cash to the pharmacies. Agent Thompson also testified that patients/patrons of the clinic were " carpooling" to visit the clinics and that all of the individuals in the carpool would receive prescriptions for narcotic pain medications. Paula York with the Kentucky Attorney General's Office of Inspector General also testified about the clinic's practice of accepting only cash for services, which ran from $250-300 per visit. Detective Hector Alcala testified about

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the use of undercover agents and confidential informants to investigate the clinics. He provided the informants with fictitious MRIs, accompanied them to the clinics for patient visits, and then drove them to a pharmacy to fill the prescriptions issued for narcotics. Detective Alcala utilized various recording devices to capture their office visits on camera. IRS agent Jeff Sagrecy testified the clinics' financial practices and finally, Singleton's Farm Managers, Chad Monroe and David Coulter, also testified regarding their respective roles in helping Singleton to make cash purchases of real estate, vehicles, farm equipment, livestock, feed, and other costly items related to Singleton's farms throughout 2011-2012.

Singleton moved for judgment of acquittal on all counts following the close of the government's evidence and again at the close of all the evidence. The Court reserved ruling on the motion as to Count 11, which charged Singleton with violating 21 U.S.C. § 856(a)(1), and denied it as to all other counts. (DE 210). After the jury was instructed and deliberated, it returned a verdict of guilty as to all counts. Singleton now brings a renewed motion for judgment of acquittal and a motion for a new trial.

II.

The Court will turn first to Singleton's motion for acquittal under Rule 29(c). When addressing a motion for judgment of acquittal, the Court must view the evidence in the light most favorable to the prosecution and determine whether there was sufficient evidence offered at trial to convince a rational trier of fact beyond a reasonable doubt that all of the elements of the charged crimes have been established. United States v. Graham, 622 F.3d 445, 448 (6th Cir. 2010). The Court is precluded from weighing evidence, considering witness credibility, or substituting its judgment for that of the jury. United States v. Chavis, 296 F.3d 450, 455 (6th Cir. 2002). The Court gives the government " the benefit of all inferences which can reasonably be drawn from the evidence, even if the evidence is circumstantial." United States v. Carter, 355 F.3d 920, 925 (6th Cir. 2004).

As a threshold matter, the Court will grant the defendant's motion with regard to Count 10, which charged Singleton with violating 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2 by aiding and abetting in the distribution of Ultram. The United States concedes that acquittal is appropriate with regard to Count 10 of the Indictment because Ultram is not a controlled substance under federal law. The motion will therefore be granted.

Singleton and the four corporate entities were charged in Counts 1 and 2 of conspiring together and with others to knowingly and intentionally distribute and dispense controlled II and IV substances outside the scope of professional practice and not for a legitimate medical purpose in Grant and Scott counties all in violation of 21 U.S.C. ยง 846. Singleton argues he is entitled to judgment of acquittal on these counts because the only evidence presented in support of the existence of an unlawful conspiracy was the testimony of Dr. Lea ...


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