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United States v. Kudmani

United States District Court, W.D. Kentucky, Louisville Division

October 6, 2017

UNITED STATES OF AMERICA PLAINTIFF
v.
GEORGE KUDMANI DEFENDANT

          MEMORANDUM OPINION AND ORDER

          Joseph H. McKinley, Jr., Chief Judge.

         This matter is before the Court on the issue of restitution and forfeiture. The parties submitted supplemental briefs on this matter. [DN 295, DN 304, DN 306]. Fully briefed, this matter is ripe for decision.

         I. BACKGROUND

         On June 7, 2016, the United States charged Defendant, George Kudmani, in a Second Superseding Indictment with 19 counts of unlawful distribution of controlled substances, two counts of health care fraud resulting in the death of a patient, seven counts of health care fraud for unlawful billing of transvaginal ultrasounds, and one count of money laundering. On January 26, 2017, the jury found Kudmani guilty of 19 counts of unlawful distribution of controlled substances pursuant to 21 U.S.C. § 841 and seven counts of health care fraud pursuant to 18 U.S.C. § 1347. The jury returned not guilty verdicts on the remaining counts.

         Following the jury's verdict, Defendant filed a motion to set aside the guilty verdicts and enter a judgment of acquittal. The Court denied the motion. The Court conducted a sentencing hearing on June 5, 2017. After addressing various objections and issues related to the sentencing, the Court sentenced Defendant to 48 months in prison. [Sentencing Hearing, DN 293.] The United States also requested the Court order Defendant to forfeit $428, 800 and pay $97, 324.30 in restitution. The Court deferred its decision on the amount of forfeiture and restitution pending supplemental briefing by the parties.

         II. DISCUSSION

         A. Forfeiture

         The criminal-forfeiture statute provides that an individual convicted of a drug offense “punishable by imprisonment for more than one year shall forfeit to the United States . . . any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as a result of such violation.” 21 U.S.C. § 853(a)(1); United States v. Darji, 609 Fed.Appx. 320, 331-32 (6th Cir. 2015). The Court “must construe § 853 liberally in order to effectuate its remedial purpose.” Darji, 609 Fed.Appx. at 332 (citing 21 U.S.C. § 853(o)). “Criminal forfeiture is considered to be punishment and therefore is part of the sentencing process.” United States v. Smith, 770 F.3d 628, 637 (7th Cir. 2014)(citing Libretti v. United States, 516 U.S. 29, 39 (1995)). “The Government therefore has the ultimate burden of establishing the forfeitures by a preponderance of the evidence.” Id.

         In its original Sentencing Memorandum, the United States requested the Court order Defendant to forfeit: (a) $393, 750 representing the alleged illegal proceeds from the distribution of the controlled substances between January 2009 to September 2012 and (b) $35, 050 representing the cash seized at Defendant's residence and cash used by Defendant to purchase a vehicle. At the hearing, the Court declined to order forfeiture in the amount requested by the United States. The Government's calculation of Defendant's alleged gains related to the uncharged, unlawful distribution of oxycodone and hydrocodone is overly speculative. The evidence presented is insufficient to accurately calculate a forfeiture award with respect to proceeds from the uncharged prescription sales by Kudmani from 2009 to 2012.

         At the Court's direction, the United States tendered alternative forfeiture calculations. According to the United States, calculation of every controlled substance (hydrocodone or oxycodone) prescription for all listed patients in the Second Superseding Indictment during the indictment period demonstrates that Kudmani earned $8, 785 ($35.00 multiplied by 251 prescriptions) from unlawfully distributing controlled substances to those specific patients. Similarly, the record further reflects that officers seized $20, 050 in Kudmani's closet and that Kudmani purchased a 2012 Honda Accord with $15, 000 in cash and a $5, 971.63 check.

         Defendant objects to these calculations. First, Defendant maintains that the patients referred to in Counts 4 and 6 did not pay Kudmani for writing their prescriptions. Defendant contends that a review of KASPER for these two patients shows that they received 82 relevant prescriptions, thus reducing the total amount of illegal proceeds by $2, 870. The United States does not refute this statement. However, from the Court's review of the original sentencing memorandum and the exhibits tendered therewith, the Court can only find 30 prescriptions of Endocet (oxycodone) prescribed to CR (Count 4) and 21 prescriptions of Endocet prescribed to JH (Count 6) that were included in the Government's revised forfeiture amount. Therefore, the Court will reduce the amount of forfeiture by $1, 785 ($35.00 multiplied by 51 prescriptions). Defendant shall forfeit $7, 000 representing the amount earned from unlawfully distributing controlled substances to the specific patients listed in Counts 1-19 of the Second Superseding Indictment.

         Second, Defendant objects to forfeiture of $5, 971, which was the amount paid by check for the Honda. The United States offers no basis for forfeiting the amount paid from a family checking account for the Honda Accord. Defendant shall forfeit the cash seized from the residence and the cash utilized to purchase the Honda Accord in the amount of $35, 050.

         Accordingly, the Court finds that forfeiture of $42, 050 by Defendant is appropriate.

         B. ...


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