United States v. Fuhai Li ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 19-1875
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UNITED STATES OF AMERICA
v.
FUHAI LI,
Appellant
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Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal Action No. 3-16-cr-00194-001)
District Judge: Honorable A. Richard Caputo
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Submitted Under Third Circuit L.A.R. 34.1(a)
April 14, 2020
Before: AMBRO, JORDAN and SHWARTZ, Circuit Judges
(Opinion filed: July 9, 2020)
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OPINION*
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AMBRO, Circuit Judge
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
A jury convicted Fuhai Li, a doctor, for the unlawful distribution and dispensing of
controlled substances, distribution to a pregnant woman, distribution resulting in death,
maintaining drug-involved premises, money laundering, and tax evasion. Li appealed,
alleging insufficiency of the evidence, improperly admitted evidence and expert
testimony, and errors in the jury instructions and the calculation of forfeiture. As all the
claims fail, we affirm Li’s convictions.
I. Factual and Procedural Background
Li ran Neurology and Pain Management, a medical practice in Milford,
Pennsylvania. He made prescription Schedule II narcotics easily available to those who
sought them—persons in severe pain (who ultimately developed addictions), ongoing
addicts, and those involved in the illegal resale of the controlled substances. By 2013 Li
was one of the highest prescribers of oxycodone and other controlled substances in the
Commonwealth.
Li generally required immediate cash payments for his visits. His patients paid
$250 to $350 for an initial visit, and $150 for monthly visits thereafter. These visits were
often brief and Li’s medical examinations superficial. Some patients testified that they
received prescriptions for high dosages of oxycodone or other opioids without sharing
their prior medical records or even their medical history. At follow-up visits, Li’s
patients often simply asked for higher doses of narcotics, and he would write the
prescription accordingly. He also continued to write scripts for patients who admitted to
taking more pills than prescribed, and increased dosages even though patients reported
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stable conditions. Li falsified his patients’ medical records, including medical exams that
were never performed and billing health insurers for these tests.
Li’s conduct ultimately did not go unnoticed. His patients called his practice to
complain when pharmacies stopped filling their prescriptions. Li’s receptionists directed
them to specific pharmacies where Li had pre-existing relationships. At trial, Robert
Welsh, a pharmacist, explained that Li’s patients exhibited “all [the] textbook flags
that . . . you should not fill the prescription.” S.A. 272. Thus, abiding by his professional
obligation not to fill what appeared to be unlawful prescriptions, he turned Li’s patients
away. The testimony of other pharmacists corroborated his view. They noted that Li’s
patients tended to present prescriptions for large quantities of pills at the maximum
dosage, were unwilling to present photo identification, often traveled long distances to
obtain the drugs, and preferred to pay in cash. Further, when these pharmacists attempted
to verify prescriptions with Li’s office, they often faced roadblocks, such as the office’s
refusal to provide a diagnosis for the prescription, reliance on the same diagnosis for
many patients, or even being told “if you don’t want to fill it, don’t fill it.” S.A. 274.
Two of Li’s patients were key to the charges in this case: Rachel Scarpa and
Suzanne Maack. Li began treating Ms. Scarpa for neck pain in January 2013. In March
2014 he wrote her a prescription for 120 30-milligram oxycodone pills after being
warned twice by his staff that she was visibly pregnant. Per Li’s records, she had gained
40 pounds over eight months. At trial, Li testified that he just thought Ms. Scarpa had
gotten fat. Eleven days later, she gave birth to a full-term, opioid-dependent baby.
3
Li treated Suzanne Maack for the first time two days before she died from an
overdose of Oxycodone. Ms. Maack’s husband testified that Li’s initial exam of his wife
was cursory and ignored all signs of her psychiatric disorders, drug addiction, and
suicidal history. At the end of the appointment, Li wrote Ms. Maack a prescription for
120 15-milligram oxycodone pills. She overdosed and died after taking approximately
42 pills the next evening.
At trial, the jury also heard from Dr. Stephen Thomas, the Government’s expert.
He discussed the medical standards for pain management and the evidence of medically
illegitimate prescribing practices found in each of the thirty-seven patient files he
reviewed. He noted that Li failed to collect adequately new patients’ medical history,
regularly prescribed the highest dosage of highly addictive opioid medication at the very
first visit, failed to establish that there were medically legitimate reasons for those
prescriptions, wrote prescriptions when faced with evidence of drug abuse and addiction
disorders, and engaged in sexual activity and other sexually inappropriate conduct with at
least three patients for whom he wrote prescriptions.
In January 2015 the Government seized approximately $1,030,960 in cash from
Li’s townhouse in Milford and home in East Stroudsburg, PA, and $1,073,446 from his
bank accounts. The IRS determined that his medical practice failed to report $832,980.45
in income between 2011 and 2013. Evidence showed Li, who was responsible for all
aspects of his pain management business, provided his accountant with records of his
patients’ medical histories, lab results, appointments, and payment histories that differed
significantly from those in his “eClinical” software. Further, after the Government
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conducted search warrants for Li’s records, he adjusted his 2014 taxes to reflect this
additional income and asked his accountant to amend his returns from prior years.
After the Government concluded its case at trial, Li made an oral motion for a
Judgment of Acquittal pursuant to Federal Rule of Criminal Procedure 29(a), asserting
that there was insufficient evidence to show he committed any of the charged crimes,
which the District Court denied. At the conclusion of the nineteen-day trial, the jury
convicted Li of twenty-three counts of federal violations for unlawful distribution and
dispensing of a controlled substance, unlawful distribution and dispensing of a controlled
substance resulting in death, unlawful distribution and dispensing of a controlled
substance to a pregnant individual, maintaining a drug-involved premises, money
laundering, and tax evasion.1 After forfeiture proceedings before the jury, it returned a
special verdict form finding that the cash seized from Li’s bank accounts and his home,
totaling over $2 million, was forfeitable because the monies had a nexus to his drug-
distribution convictions, drug premises convictions, and/or money laundering
convictions.
The District Court sentenced Li to 330 months’ imprisonment, to be followed by a
six-year term of supervised release, $3,000 in special assessments, and $5,177.80 in
restitution. United States v. Li, No. 3:16-cr-00194-ARC, 2019 WL 1877561, at *1–2, 4
(M.D. Pa. Apr. 4, 2019). He appeals his convictions.
1
Before resting its case, the Government moved to withdraw Counts 18 and 21
(related to two of Li’s patients), which the District Court granted.
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II. Discussion2
Li raises five issues on appeal. We consider each in turn.
i.
Li prescribed Ms. Maack oxycodone two days before she died of an overdose from
taking 42 pills. Based on testimony regarding this event, the jury convicted Li of
unlawful distribution and dispensing of a controlled substance under 21 U.S.C. § 841 and
applied the “death enhancement” pursuant to § 841(b)(1)(C), which imposes a 20-year
mandatory-minimum sentence. Li asserts that the trial evidence was insufficient to prove
Ms. Maack’s prescription was outside the course of professional conduct. We disagree.
We review sufficiency-of-the-evidence challenges under a “particularly deferential
standard” and “must sustain the jury’s verdict ‘if there is substantial evidence, viewed in
the light most favorable to the government, to uphold the jury’s decision.’” United States
v. Caraballo-Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (en banc) (quoting United
States v. Gambone, 314 F.3d 163, 170 (3d Cir. 2003)). The evidence submitted at trial
was sufficient for a “rational trier of fact” to find “proof of guilt beyond a reasonable
doubt.” Id. (alteration and citations omitted). Ms. Maack’s husband, who accompanied
her in the examination room, testified to the cursory nature of her first and only
appointment with Li. He did not review Ms. Maack’s medical history, even though she
provided her medical records prior to her visit, nor did he discuss the nature of the
prescribed narcotics with her. Further, Li ignored that her urine screen was positive for
2
The District Court had jurisdiction over this case pursuant to 18 U.S.C. § 3231.
We have appellate jurisdiction under 28 U.S.C. § 1291.
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oxycodone, though she did not report taking that drug. S.A. 2301–02. Dr. Thomas
carefully examined Ms. Maack’s medical records from her visit with Li and testified that
in his expert opinion Li’s prescription was outside of the scope of professional practice in
light of her urine screen, psychiatric history, and suicidal ideation. S.A. 2308. A rational
jury could have credited this testimony and found that she was prescribed opioids outside
the course of professional conduct.3
ii.
Next, Li claims that the District Court improperly admitted evidence of his prior
bad acts in the form of testimony of pharmacists and patients not specifically identified
and charged in the superseding indictment, violating Federal Rule of Procedure 404(b).
As Li did not object to the introduction of this evidence in front of the District Court, we
review his claim for plain error. United States v. Christie, 624 F.3d 558, 567 (3d Cir.
2010). Thus, we will only reverse if there was an error that was obvious, it affected Li’s
substantial rights, and if not addressed, “it would seriously affect the fairness, integrity or
public reputation of judicial proceedings.” Id. (internal citation omitted).
Federal Rule of Evidence 404(b) prohibits district courts from admitting
“[e]vidence of a crime, wrong, or other act . . . to prove a person’s character in order to
show that on a particular occasion the person acted in accordance with the character.”
3
Li also argues, for the first time on appeal, that Ms. Maack’s death could have
been a suicide. This assertion is not relevant to our inquiry. “The Government was not
required to prove . . . that oxycodone was [Maack’s] only cause of death. On the
contrary, but-for causation exists where a particular controlled substance—here,
oxycodone—‘combines with other factors’ . . . to result in death.” United States v.
Volkman, 797 F.3d 377, 395 (6th Cir. 2015) (citation omitted).
7
“Rule 404(b) ‘does not extend to evidence of acts which are ‘intrinsic’ to the charged
offense.’” United States v. Cross, 308 F.3d 308, 320 (3d Cir. 2002) (quoting Fed. R.
Evid. 404(b) advisory committee's note). “[A]cts are intrinsic when they directly prove
the charged” offense. See id. In United States v. Gibbs we explained that such proof
“may be extremely prejudicial to the defendant but the court would have no discretion to
exclude it because it is proof of the ultimate issue in the case.” 190 F.3d 188, 218 (3d
Cir. 1999) (citation omitted).
There is no question that testimony was introduced for a non-propensity purpose.
The Government used the pharmacists’ testimony that they had repeatedly called Li to
question his prescriptions to show he knew he was prescribing pills outside the course of
professional practice.
Further, testimony from former patients was offered to prove that Li maintained
drug-involved premises in violation 21 U.S.C. § 856(a) (Counts 26 and 27), which
requires the Government to show that he “knowingly open[ed], lease[d], rent[ed], use[d],
or maintain[ed] any place . . . for the purpose of . . . distributing . . . any controlled
substance.” Take as an example Brian Gilson’s testimony. He stated that Li increased
his dosage of oxycodone without his asking, and when he admitted to taking more pills
than prescribed, Li increased the dosage again. Li saw Gilson and his mother at the same
time in the same examination room, writing oxycodone prescriptions for both of them.
By his third visit to Li’s office, Gilson was addicted to opioids, and after he was
discharged as a patient, he turned to injecting heroin and spent a few months in prison.
Gilson’s testimony demonstrates that Li acted more like a drug dealer—creating and
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feeding addictions—than a pain management doctor. This was not Rule 404(b) evidence,
and the District Court properly admitted it.
Nor was evidence of Li’s patients’ addictions, withdrawal symptoms, and criminal
actions unfairly prejudicial, and thus inadmissible under Federal Rule of Evidence 403.
Testimony from patients like Gilson revealed that Li’s prescriptions were subject to
abuse. Given the charges in this case and Li’s testimony that he prescribed controlled
substances for a lawful medical purpose, this evidence was relevant to show that his
treatment was outside the course of professional practice. See United States v. Kirk, 584
F.2d 773, 778 (6th Cir. 1978) (affirming the admission of allegedly “prejudicial”
evidence of “drug use and sales” when relevant to the crimes charged). Thus, any
prejudice this evidence caused was due to its inherent relevance and did not “cloud[]” the
jury’s “impartial scrutiny and reasoned evaluation of the facts,” as Rule 403 requires for
exclusion. See United States v. Starnes, 583 F.3d 196, 215 (3d Cir. 2009) (citation
omitted).
iii.
Li also questions the reliability of Dr. Thomas’s expert testimony, arguing it was
based on subjective belief and questionable methodology. We review the District Court’s
evidentiary decisions for an abuse of discretion. In re Paoli R.R. Yard PCB Litig., 35
F.3d 717, 738 (3d Cir. 1994). The Court held a Daubert hearing on May 1, 2018, and
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determined that Dr. Thomas’s testimony, which heavily referenced medical guidelines,
met Federal Rule of Evidence 702’s requirements.4 We agree.
Rule 702 has a “liberal policy of admissibility.” Under it, “the process or
technique the expert used in formulating the opinion [must be] reliable.” Id. at 741.
“[T]he standard for determining reliability is not that high.” In re TMI Litig., 193 F.3d
613, 665 (3d Cir. 1999) (internal quotation marks and citation omitted). Expert testimony
may be based on one’s personal knowledge or experience, and in those circumstances the
District Court may inquire into whether the expertise is based on generally accepted
methods and training. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150–51 (1999).
Dr. Thomas drew on his thirty years of experience as a pain management doctor to
reach his conclusions. In addition, he based his testimony on reliable and generally
accepted techniques—i.e., numerous pain management medical studies, as well as state
policies and regulations, such as the Federation of State Medical Boards Model Policy
and the Pennsylvania Code. As Dr. Thomas’s testimony met the flexible Daubert factors
for reliability and we give the District Court “considerable leeway in deciding in a
particular case how to go about determining whether particular expert testimony is
reliable,” Kumho Tire Co., 526 U.S. at 152, the Court did not abuse its discretion when it
allowed Dr. Thomas to testify as an expert witness.
iv.
4
At the conclusion of the Daubert hearing, Li conceded the relevance and fit
prongs of Daubert, so we only review whether Dr. Thomas’ testimony was reliable. See
United States v. James, 955 F.3d 336, 345 (3d Cir. 2020) (holding that when a defendant
states that he has no objection to the introduction of evidence he waives the right to any
appellate review of the admission of such evidence).
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Nor did the District Court err when it declined to instruct the jury that Li could not
be found guilty if the jury determined he acted in good faith. “We review the refusal to
give a particular instruction or the wording of instructions for abuse of discretion.”
United States v. Leahy, 445 F.3d 634, 642 (3d Cir. 2006), abrogated on other grounds by
Loughrin v. United States, 574 U.S. 351 (2014). It is settled law that “a district court
does not abuse its discretion in denying a good faith instruction where the instructions
given already contain a specific statement of the government's burden to prove the
elements of a ‘knowledge’ crime.” Id. at 651. Here the District Court instructed the jury
on the requirements to prove knowledge. Thus it acted within its discretion.
v.
Finally, Li appeals the District Court’s forfeiture order. Insofar as he contends
that the Court should have held a fact hearing to determine the amount of forfeiture, we
disagree. The Court held a bifurcated forfeiture trial. After returning a guilty verdict, the
jury heard additional evidence regarding the sources of funds in Li and his family’s
various bank accounts before being asked to determine whether these assets had a
sufficient nexus to the events giving rise to the forfeiture allegation. See Fed. R. Crim. P.
32.2(b)(5)(B) (providing that the jury may decide forfeiture by completing “a proposed
Special Verdict Form listing each property subject to forfeiture and asking the jury to
determine whether the government has established the requisite nexus between the
property and the offense committed by the defendant”). Both Li and the Government had
the opportunity to address the jury during this portion of the trial. Li does not explain
why this process was inadequate. As he had the opportunity to present his case to the
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jury, the Court did not err by entering the forfeiture order without additional process. See
Fed. R. Crim. P. 32.2(b)(2)(A) (instructing courts to “promptly enter a preliminary order
of forfeiture” after a finding that property is subject to such forfeiture).
Insofar as Li argues that the Government failed to prove that he derived all of the
forfeited funds from criminal activity, we also disagree. The jury was properly instructed
that property is subject to forfeiture if the Government proves by a preponderance of the
evidence that it was derived from proceeds Li obtained directly or indirectly from his
offenses of conviction, or the property was used in part to facilitate the commission of
those offenses. See United States v. Lacerda, 958 F.3d 196, 217 (3d Cir. 2020)
(affirming forfeiture of all a business’ proceeds when the district court found that the
business “was a fraudulent enterprise from beginning to end”); United States v. Sanders,
952 F.3d 263, 285–86 (5th Cir. 2020) (collecting circuit cases upholding “forfeiture
where there’s evidence of pervasive illegality at the institution.” (citation omitted)). As
Li was convicted of maintaining drug-involved premises and all of the forfeited funds
were tied to them, we cannot say that the jury erred in its forfeiture determination.
* * * * *
Thus we affirm.
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