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The U.S. Supreme Court is poised to issue what could be a monumental decision in the Court’s Controlled Substances Act (“CSA”) jurisprudence as applied to the nation’s opioid epidemic. At issue in Ruan v. United States is the requisite intent the government must prove to convict a physician under the CSA for the unlawful distribution of controlled substances. 

The outcome in Ruan could have significant implications for prescribers, including whether their risk of criminal liability is actually higher than a narcotics trafficker distributing heroin or cocaine. More specifically, to convict a drug trafficker, federal prosecutors must prove beyond a reasonable doubt that the trafficker knowingly and intentionally manufactured, transported, or distributed narcotics. If the government prevails in Ruan, the government would de facto have to show only that a prescribing physician was negligent in misprescribing opioids.

Concerns about ever-expanding prosecutorial discretion and the erosion of the criminal law’s traditional “guilty mind” requirement have focused significant attention on the case.

A Mini Survey of the CSA’s Statutory Scheme

Per the implementing regulations of 21 U.S.C. § 841(a)(1), a physician may lawfully prescribe controlled substances only if they are prescribed for “a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” Even a first-time offender could face decades in prison for misprescribing a Schedule II controlled substance, such as oxycodone, hydrocodone, hydromorphone, methadone, or fentanyl, in violation of the CSA.

The Government’s Case Against Dr. Ruan

In 2016, a federal grand jury returned an indictment charging Dr. Xiulu Ruan, a Drug Enforcement Administration (“DEA”)-registered pain management physician, with, among other things, “knowingly and unlawfully distribut[ing] and dispens[ing] . . . Schedule II Controlled Substances . . . outside the usual course of professional medical practice and not for a legitimate medical purpose, in violation of Title 21, United States Code, Section 841(a)(1).”

The government at trial presented evidence that Dr. Ruan and his business partner issued nearly 300,000 controlled substance prescriptions in a four-year period. Some of these prescriptions allegedly were signed without Dr. Ruan even seeing the patient. The government also presented evidence that Dr. Ruan increased prescriptions of a biopharma company’s fentanyl drug a hundredfold after he and his business partner invested in it.…

Continue Reading Could It Be Easier to Convict a Doctor Than a Cartel Member? Why the Impending SCOTUS “Pill Mill” Ruling Makes Some Observers Nervous

Background on the Guidelines and FOIA

On March 15, 2022, the United States Department of Justice (“DOJ”) released new guidelines favoring the disclosure of federal agency records under the Freedom of Information Act (“FOIA”). Signed into law by President Lyndon B. Johnson in 1967, FOIA established a statutory right of public access to executive branch records. At a high-level, FOIA provides that any person has a legally enforceable right to obtain federal agency records subject to the Act to the extent that such records are not protected from public disclosure by one of FOIA’s nine exemptions. The Supreme Court has explained that “the basic purpose of FOIA is to ensure an informed citizenry,” which is “needed to check against corruption and hold the governors accountable to the governed.”

The DOJ’s new guidelines direct federal departments and agencies to apply a presumption of openness in administering FOIA and explicitly state that the DOJ will not defend nondisclosure decisions that fail to do so. Under the new guidelines, the executive branch should not withhold requested information that might fall within one of FOIA’s exemptions unless the relevant agency can identify a foreseeable harm or legal bar to disclosure. The guidelines also remind federal agencies that FOIA requires the proactive disclosure of records and emphasize that such agencies should make records more readily accessible without requiring individuals to file FOIA requests. As an example, the guidelines note that the DOJ’s Executive Office for Immigration Review will no longer require individuals to file FOIA requests to obtain copies of their own records of immigration court proceedings.…

Continue Reading New DOJ Guidelines Regarding FOIA Create Presumption of Openness

In remarks to the ABA Institute on White Collar Crime, U.S. Attorney General Merrick Garland and U.S. Assistant Attorney General Kenneth Polite Jr. delivered a wakeup call: enforcement activity by the U.S. Department of Justice (DOJ) “will only accelerate as we come out of the pandemic,” and federal prosecutors will focus more on white-collar criminal cases. The DOJ’s priority in these cases, AG Garland explained, is to hold accountable those individuals who commit and profit from corporate crime. And AAG Polite emphasized that the DOJ is committed to vindicating the rights of victims in white-collar cases who are too-often overlooked.
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Continue Reading DOJ Foreshadows Increased Prosecutions of Corporate Crime

Deputy Attorney General Lisa Monaco delivered an exacting message to the white-collar defense bar at the ABA’s 36th National Institute on White Collar Crime: the DOJ is stepping up its enforcement of corporate crime through several new initiatives. Speaking to an audience of white-collar criminal defense attorneys, DAG Monaco marched through a series of initiatives that will rollback more lenient enforcement policies adopted during the prior administration. This increase in enforcement will be buoyed by a surge of resources provided to DOJ prosecutors, including a new squad of FBI agents embedded in the DOJ’s Criminal Fraud Section—placing “agents and prosecutors in the same foxhole,” as DAG Monaco described it. As discussed in further detail below, these efforts have ramifications on both the individual and corporate level, including: (1) increased individual accountability; (2) a focus on corporate recidivism; and (3) greater scrutiny of corporate resolutions with the DOJ.

Focus on Individual Accountability. First, the DOJ is renewing its focus on holding individual actors responsible for corporate wrongdoing.  As such, DAG Monaco announced that the DOJ is reviving its policy that companies will only be eligible for cooperation credit in resolutions with the DOJ if they provide prosecutors with non-privileged information about all individuals involved in or responsible for the misconduct at issue—regardless of the individual’s position, status, or seniority. This pronouncement reverses the DOJ’s prior guidance, which allowed companies to receive cooperation credit for disclosing only those individuals “substantially involved” in the misconduct.
Continue Reading Corporate Compliance Crackdown: DOJ Announces New Enforcement Policies for Business Entities

During a speech last week to a group of white collar defense attorneys, John Carlin, a senior official at the Department of Justice (DOJ) confirmed what many in the white collar and corporate compliance space have been preparing for since January: the DOJ is devoting a “surge” of resources to ramp up its white collar enforcement efforts. According to a report by The Wall Street Journal*, Carlin listed several agency actions that are either in the works or already underway:

  • Embedding Federal Bureau of Investigation agents within the DOJ, including a new “squad” of dedicated agents in the agency’s fraud section, to focus on investigations into foreign bribery, market manipulation, and healthcare fraud cases;
  • Enhancing efforts to incentivize companies to develop compliance programs to preemptively prevent legal violations by employees;
  • Developing new tools, including the use of data analytics, to identify corporate wrongdoing (and encouraging corporations to do the same); and
  • More strictly enforcing the terms of deferred- and non-prosecution agreements.

Although the increased focus on enforcement should not come as a surprise to careful (or even casual) observers, the DOJ’s emphasis on preemptive compliance suggests the agency will be receptive to organizations who are proactively improving their compliance practices.

Companies should consider reviewing their compliance policies and implementing certain best practices to minimize the risk of being swept up in any future enforcement pushes:…

Continue Reading Preparing for DOJ’s White Collar Enforcement “Surge”: Five Compliance Practices for Companies to Shore Up Now

On January 29, 2021, Acting Attorney General Monty Wilkinson rescinded the Trump administration’s charging and sentencing policy that required federal prosecutors to hold as a “core principle” that they “charge and pursue the most serious, readily provable offense.”  The Wilkinson memo, titled Interim Guidance on Prosecutorial Discretion, Charging, and Sentencing, “supersedes any conflicting Justice Manual provisions.”

Under the May 10, 2017 memo issued by former Attorney General Jeff Sessions, prosecutors were required to pursue the most serious charges or penalties.  To do otherwise required that they first get permission from their supervisors.  The Wilkinson memo reinstates the May 19, 2010 Department Policy on Charging and Sentencing issued by former Attorney General Eric Holder, which emphasized that prosecutors make an “individualized assessment of the extent to which particular charges fit the specific circumstances of the case, are consistent with the purpose of the Federal criminal code, and maximize the impact of Federal resources on crime.”

Acting Attorney General Wilkinson echoed this sentiment in the current policy memo: “The goal of this interim step is to ensure that decisions about charging, plea agreements, and advocacy at sentencing are based on the merits of each case and reflect an individualized assessment of relevant facts while longer-term policy is formulated.”  He also noted in support of going back to the prior policy that “the reasoned exercise of prosecutorial discretion is critical to the fairness, effectiveness, and integrity of the criminal justice system.”

In essence, this change in policy will now afford defendants and their legal counsel more opportunities to seek less serious charges or the inclusion of lesser counts in any criminal indictment or information, and negotiate with the government to consider plea agreements and sentencing positions that do not include the de facto stiffest penalty.  The current Wilkinson memo comes on the heels of another recent policy shift rescinding the “zero tolerance” border policy for migrants crossing the U.S.-Mexico border illegally.  As the new administration’s appointments continue to be confirmed, it is likely that more guidance on charging and sentencing will be forthcoming.

A copy of the memo is available here:…
Continue Reading DOJ Rescinds Trump Charging and Sentencing Policy

Prosecutors have scored a win in their latest criminal spoofing trial, United States v. Vorley.  After three days of deliberation—during which time the jury repeatedly informed the court that it was deadlocked—the jury has convicted precious metals traders James Vorley and Cedric Chanu of committing wire fraud.  At the same time, the jury rejected the government’s allegations that the defendants had participated in a criminal conspiracy by allegedly coordinating spoofed trades with other market participants.

The inconsistent verdicts on wire fraud and conspiracy will almost certainly put the defendants on the path to an appeal before the Seventh Circuit Court of Appeals.  To convict Vorley and Chanu on the wire fraud counts, the government was required to prove beyond a reasonable doubt that they knowingly and intentionally participated in a scheme to defraud other market participants by making materially false representations. And at a high level, a conspiracy is an agreement between two or more persons to accomplish an unlawful purpose.  The jury’s split verdict suggests there could have been some confusion surrounding the intent requirements for the charges at issue.  This could further implicate the manner in which the government presented its evidence at trial and the instructions provided to jurors before they went into deliberations. …
Continue Reading Jury Convicts on Wire Fraud Charges in Criminal Spoofing Case

The criminal spoofing trial in United States v. Vorley kicked off in the U.S. District Court for the Northern District of Illinois on September 14, 2020.  Less than 10 days later, on the first full day of deliberations, jurors sent a note to the court indicating they had reached an impasse, with two jurors holding out against a consensus on the verdict.  Following this development, the court denied the defendants’ request to declare a mistrial and instructed the jury to continue deliberations.

The jury’s difficulty in reaching a verdict on the complicated charges may foreshadow a similar outcome that occurred last year in the criminal trial of software developer Jitesh Thakkar.  In that case, Jitesh faced spoofing charges stemming from his company’s development of software that was later used by a London-based trader to spoof E-Mini S&P 500 futures contracts, which allegedly led to the “flash crash” of 2010.  The trial judge granted Thakkar’s mid-trial motion for a judgment of acquittal on a conspiracy charge based on the lack of evidence of any agreement between Thakkar and the London trader, but the judge allowed the spoofing counts to proceed to the jury.  The jury deadlocked 10-2 in favor of Thakkar on those charges and the government eventually dropped its case.
Continue Reading Latest Criminal Spoofing Trial Hampered by Obstacles

Perkins Coie’s award-winning White Collar & Investigations practice has teamed up with the ABA’s Global Anti-Corruption Committee to launch a podcast series as an extension of our White Collar Briefly blog.

Our first five episodes, linked below, feature fascinating, candid conversations with a variety of special guests, including:

  • American “book of the year” author, editor, screenplay writer and publisher Dave Eggers
  • Joel Esquenazi (defendant in the high-profile US v. Esquenazi FCPA case)
  • Molson Coors’ Global Ethics & Compliance Chief Caroline McMichen
  • Chicago-based U.S. District Judge Virginia Kendall
  • University of Colorado COO (and former GC) Patrick O’Rourke
  • Avanos Medical Deputy GC Ross Mansbach

Note that all episodes are available on Spotify, Google Podcast, and Apple Podcast. Additionally, you can visit our blog and subscribe to receive each new podcast, including the highly-anticipated Dave Eggers podcast, in your inbox.
Continue Reading Introducing the White Collar Briefly Podcast