United States v. Jeffrey Rothbard ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16-3996
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JEFFREY ROTHBARD,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:14-cr-00089-RLY-DML — Richard L. Young, Judge.
____________________
ARGUED FEBRUARY 17, 2017 — DECIDED MARCH 17, 2017
____________________
Before WOOD, Chief Judge, and BAUER and POSNER, Circuit
Judges.
WOOD, Chief Judge. Jeffrey Rothbard pleaded guilty to one
count of wire fraud in connection with his participation in a
scheme to defraud companies that were interested in obtain-
ing loans for environmentally friendly upgrades to their facil-
ities. He committed this offense, which yielded more than
$200,000 for him, while he was on probation for a felony for-
gery conviction in Indiana. The district court sentenced him
2 No. 16-3996
to 24 months’ imprisonment, despite the fact that Rothbard is
an older man with serious health problems and the Probation
Office thought that incarceration was not necessary. On ap-
peal, Rothbard urges us to find that his sentence is substan-
tively unreasonable, both because he has stayed out of trouble
for nearly three years and because he fears that the Bureau of
Prisons (BOP) may be unable to furnish the medication on
which his health critically depends.
Perhaps, had we been the sentencing judges, we would
have accepted his arguments. But the district court here gave
sound reasons for its chosen sentence. In addition, both the
evidence in the record before the district court, and supple-
mental information that we requested about BOP’s ability to
provide appropriate care, satisfy us that the nominal 24-
month sentence will not, in reality, spell doom for Rothbard.
We therefore affirm the district court’s judgment.
I
Rothbard’s offenses date back to at least 2010, when he in-
stalled some check designer programs on an office computer
and used them to forge two checks, amounting to $7,700, to
his wife. He was convicted in state court for that offense and
placed on probation. While on probation, he launched the
scheme that underlies his present conviction. When all was
said and done, he had defrauded 17 victims of $211,658.53,
acting as the registered agent of “GreenCity Finance.” The
scheme was relatively simple: GreenCity would purport to ar-
range for financing for energy savings upgrades, but it would
require a deposit to process the loan. The clients paid the de-
posits, but the money went straight to Rothbard’s pocket. He
used it on personal items, including to attend a PGA golf tour-
nament and to buy his son a vehicle. Ultimately he was caught
No. 16-3996 3
and charged with wire fraud in violation of 18 U.S.C. § 1343;
he waived indictment and pleaded guilty. His appeal pertains
exclusively to his sentence.
II
The key fact behind Rothbard’s sentencing challenge re-
lates to his health. In 2005, well before the time he instituted
the GreenCity scheme, he was diagnosed with imatinib-re-
sistent chronic myeloid leukemia—a particularly virulent
form of that cancer. His doctor, Larry Cripe, prescribed the
drug nilotinib, which is one of three possible drugs recog-
nized for the treatment of Rothbard’s type of leukemia. All
three are extremely expensive: the Journal of Clinical Oncol-
ogy reported in 2013 that the annual price of nilotinib is
$115,000 to $124,000; the price of the other two drugs, da-
satinib and ponatinib, appears to be comparable. Hagop M.
Kantarjian et al., Cancer Drugs in the United States: Justum Pre-
tium – The Just Price, 31 J. Clinical Oncology 3600, 3601 (2013).
Before sentencing, the Probation office prepared its usual
Presentence Investigation Report (PSR), in which it calculated
an adjusted offense level of 16 and a criminal history of II,
which translates into a range of 24 to 30 months’ imprison-
ment. Because of Rothbard’s health, however, Probation rec-
ommended a more lenient sentence: 12 months’ detention at
a halfway house and another 12 months’ home confinement,
in lieu of prison. It suggested that this would offer adequate
deterrence and would assure that Rothbard’s medical needs
were properly met. Probation then revised the recommenda-
tion to three years’ probation, noting that although Rothbard
seemed to need a harsher penalty to deter future criminal be-
4 No. 16-3996
havior (because he had committed the fraud while on proba-
tion), it seemed unfair to burden the taxpayers with the exor-
bitant cost of Rothbard’s medication in prison.
Rothbard filed a pre-sentencing memorandum in which
he urged that a custodial sentence would be unreasonable, be-
cause (he asserted) BOP could not guarantee that he would re-
ceive the medical care he needed in one of its facilities. The
reason for the lack of a guarantee relates to the way in which
BOP manages prescription drugs. It maintains a formulary of
drugs that its physicians are permitted to prescribe without
further ado. That does not mean, however, that non-formu-
lary drugs are impossible to obtain. To the contrary, if a doctor
believes that a patient needs a non-formulary drug, the doctor
may prescribe it by following certain procedures.
Based primarily on the nature of Rothbard’s crime and the
fact that he committed it while on probation, the district court
rejected Probation’s recommendations and imposed a Guide-
lines sentence of 24 months in the custody of BOP, followed
by two years’ supervised release. In so doing, it did not ignore
Rothbard’s medical situation. It took into account a letter that
the government had obtained from Dr. Paul Harvey, the Re-
gional Medical Director for BOP’s North Central Region.
Dr. Harvey reviewed Rothbard’s records and a letter from
Dr. Cripe, and offered these comments:
CARE Level 4 inmates require services available at
a Medical Referral Center (MRC) and may require
daily nursing care. The MRC facilities have clinical
staff available in-house, 24-hours per day, and have
contracts with community specialists for additional re-
view and/or care, if clinically necessary. The BOP has
No. 16-3996 5
six Medical Referral Centers [including] Butner, North
Carolina.
Rothbard was later designated to Butner, although it appears
that he will need a re-designation after this appeal is resolved.
Dr. Harvey’s answer to the question whether Rothbard
would be able to continue with his successful course of ni-
lotinib was a qualified “yes.” He conceded that nilotinib is not
on the National Drug Formulary, but he said that BOP permits
a medical provider to “submit a non-Formulary request and
prescribe the requested medication pending approval of the
request.” He also noted that an expedited approval process
exists, and when it is used, a decision on the request is gener-
ally made within 24 hours. (The need for such approval is the
reason we describe the “yes” as qualified.) Finally, Dr. Harvey
said that nilotinib had been “approved for inmates with med-
ical conditions similar to Mr. Rothbard’s.”
The district court considered Rothbard’s leukemia as it
considered what sentence to impose, but it was unpersuaded
that Rothbard’s medical condition justified a noncustodial
sentence. It relied on Dr. Harvey’s representation that BOP
could provide whatever care was necessary. Turning to the
other side of the balance, it noted several facts that pointed
toward a sentence including imprisonment. Calling Roth-
bard’s scheme a “crime of pure greed,” the court referred to
the need to protect the public and the fact that Rothbard had
brazenly committed this crime while on probation for the for-
gery offense. The judge commented that the crime was suffi-
ciently troublesome, in his view, that he “never really seri-
ously considered probation.” Instead, he opted to accommo-
date Rothbard’s medical needs by “point[ing] out to the Bu-
reau of Prisons that the defendant does have leukemia that’s
6 No. 16-3996
in remission by medication and request[ing] that the Bureau
of Prisons take special note of that medication and make sure
that he receives that medication for treatment of that condi-
tion so that it remains in remission.”
Because of the grave nature of his medical condition and
the risk that a deprivation of nilotinib might cause a serious
recurrence of his disease, Rothbard moved for a stay of his
report date pending his appeal in this court. The district court
denied the stay, but this court granted it and expedited the
appeal. In addition, because we were unsure how effectively
the procedures described by Dr. Harvey operate, we ordered
the parties to provide additional information about what
Rothbard might expect if he were to go to a BOP facility. It is
unusual, we concede, to supplement the record on appeal on
such a critical point, but the stakes are high, and so we
thought this step was justified.
When a new inmate shows up at BOP, the inmate goes
through a comprehensive medication review as part of his in-
take screening. For purposes of continuity of care, the govern-
ment represents, BOP policy allows for the continuation of
most medications—including non-formulary drugs—for a
period of time pending review and approval of anything that
is not on the Formulary. Rothbard appears to agree with that,
in part. He presents an updated affidavit from Philip Wise,
the former Assistant Director of BOP with responsibility for
health care. (This too is new on appeal; we grant Rothbard’s
February 8, 2017, motion to supplement the record with
Wise’s Declaration.) Wise states that non-formulary drugs
may be continued for four days upon arrival. After that, ac-
cording to Wise, there are no guarantees. Relying on this,
No. 16-3996 7
Rothbard argues that this means for him that there is no as-
surance that he will be able to continue with his nilotinib after
the four-day period expires. The government responds that
Wise himself concedes that BOP has the ability to process ur-
gent requests within hours, if medically necessary. It also re-
ports that there have been ten requests for nilotinib since 2010,
and all ten requests have been approved for the same condi-
tion as Rothbard has.
We were also interested in the qualifications of the people
who are responsible for these approvals. The government in-
forms us that approval authority resides with a Central Office
Physician, and that the final decision over non-formulary
drug requests is made by either a pharmacist or a physician.
Wise wrote that when he was in charge, denials were based
on one of two possible reasons: either the requested drug was
not medically necessary, or that there was a therapeutic equiv-
alent medication available on the formulary. In this case, the
government does not argue that either of those reasons would
apply.
One might worry that BOP would have an incentive to be
sparing with its orders for particularly expensive non-formu-
lary drugs, such as nilotinib. There is no evidence, however,
that it has done so, and in Rothbard’s case, there is less reason
to fear a secret economic motive. Rothbard’s health care is al-
ready being billed to the public, because he is using govern-
ment-provided health insurance. More importantly, the rec-
ord shows that BOP has ordered nilotinib itself on ten other
occasions, evidently in recognition of the fact that it might be
essential (as it apparently is for Rothbard). Indeed, the high
price of nilotinib suggests that it has no adequate substitutes:
whether it is being used for prisoners or the public at large, a
8 No. 16-3996
drug that faces several therapeutic alternatives in the market
will not command as high a price.
In the final analysis, this case boils down to the fact that
BOP is not willing or able to pre-commit to nilotinib for Roth-
bard, before he has gone through the intake examination at
the prison medical center. Although it might be sensible in
cases such as this one for BOP to have some way of examining
people before they report, that is not its practice and we are
not persuaded that the lack of a pre-report examination is in-
dependently actionable. In addition, we cannot find fault with
BOP’s reservation of the right to conduct its own medical ex-
amination. While Rothbard’s case might be an easy one, there
will be other entering inmates who are subjectively convinced
that they need one particular medication, but for whom an
alternative or more conservative treatment may be medically
acceptable. BOP would be acting irresponsibly if it did not
make an independent decision, based on a thorough and pro-
fessional examination of the new inmate and his medical his-
tory.
III
We conclude that this is not a case in which the only sub-
stantively reasonable sentence would have been one that kept
Rothbard out of prison. The district court was faced with evi-
dence supporting a noncustodial punishment—Rothbard’s
trouble-free record for the last several years, and the assur-
ance of continuity of his successful treatment at the hands of
Dr. Cripe—as well as evidence supporting some time in
prison—the nature of his crime, the fact that he committed it
while on probation, and the factual finding that BOP would
be able to serve his medical needs. We find no clear error in
any of those findings of fact. And with this much established,
No. 16-3996 9
we have no reason to find Rothbard’s sentence of 24 months
(which fell within the recommended Guidelines range) sub-
stantively unreasonable.
We close, however, with a caveat. If Rothbard shows up at
a BOP facility and discovers that the responsible people are
dragging their feet in a way that deprives him for any signifi-
cant time of his nilotinib, or if the BOP evaluator (contrary to
all of the evidence we have seen) takes the position that a
medically suitable alternative from the formulary exists,
Rothbard is free to use the BOP’s grievance procedures to
complain about any such problem. On that understanding,
we AFFIRM the judgment of the district court.
10 No. 16-3996
POSNER, Circuit Judge, dissenting. The defendant pleaded
guilty to wire fraud in violation of 18 U.S.C. § 1343. The
district judge sentenced him to 24 months in federal prison
and also ordered him to pay restitution to the victims of the
fraud—but that aspect of the sentence is not involved in his
appeal. Because of the defendant’s very poor health—he
suffers from a rare form of leukemia (called imatinib-
resistant chronic myelogenous leukemia), compounded by
bipolar disorder with manic episodes, chronic arthritis,
hypertension, and asthma—the probation service had
recommended that the judge impose in lieu of a prison
sentence a sentence of 3 years’ probation, including 12
months of home confinement and 12 months of confinement
in a halfway house, because it would be easier to provide for
his medical needs in such locations. He is not violent; he was
on pretrial release for two and a half years after his arrest
and committed no crimes during that period.
In appealing the judge’s sentence he argues that the
Bureau of Prisons can’t guarantee that he will receive
adequate medical attention in a prison. He is right. The drug
that he’s been receiving for his leukemia is called nilotinib
(trade name Tasigna). It is very expensive—more than
$100,000 for a year of treatment. Perhaps because of its cost,
it is not currently listed on the National Drug Formulary of
the Bureau of Prisons. (A drug formulary is a list of
prescription drugs that is used by practitioners to identify
drugs that offer the greatest overall value.) The Bureau has
sometimes provided nilotinib for prisoners suffering from
ailments such as the kind of leukemia that the defendant
suffers from, but it has refused to commit to providing it to
this defendant. A letter sent by a doctor employed by the
No. 16-3996 11
Bureau to one of the prosecutors in the case states that
“while nilotinib is not included in the National Formulary,
this medication has been approved for inmates with medical
conditions similar to Mr. Rothbard’s.” But how similar the
other inmates’ conditions are to Rothbard’s—whether for
example they require as frequent dosages of nilotinib as he
does—is nowhere indicated. In addition the Bureau has
refused to allow the defendant’s need for the drug to be
determined by a medical examination prior to his
imprisonment, even though the results of such an
examination might both vindicate the probation service’s
recommendation for nonprison confinement and resolve the
question of his need to continue taking nilotinib.
The defendant’s bipolar disorder with manic episodes
(bipolar disorder used to be called manic depression) should
also be examined before he’s imprisoned, because it’s a
disorder that might be difficult to treat effectively in a prison
without placing the defendant in a cell by himself (perhaps
even solitary confinement), as manic episodes might upset
and alarm cellmates and even prison staff, though it is now
believed that solitary confinement is detrimental to a
prisoner’s mental health. See, e.g., PBS Frontline, “What Does
Solitary Confinement Do To Your Mind?,” www.pbs.org/
wgbh/frontline/article/what-does-solitary-confinement-do-
to-your-mind/ (visited March 17, 2017, as were the other
websites cited in this opinion).
Essentially the prosecution, the district court, and now
my colleagues, ask that the Bureau of Prisons be trusted to
give the defendant, in a federal prison, the medical
treatment that he needs for his ailments. Yet it is apparent
from the extensive literature on the medical staff and
12 No. 16-3996
procedures of the Bureau of Prisons (a literature ignored by
my colleagues) that the Bureau cannot be trusted to provide
adequate care to the defendant. The defendant’s expert,
Phillip Wise, who has extensive experience with the medical
care provided to federal prisoners—he has served as the
Assistant Director of the Federal Bureau of Prisons, with
responsibility for health care, as the Warden of the Federal
Medical Center (a Bureau of Prisons facility) in Rochester,
Minnesota, and as the vice president of a company that
provides medical care to federal prisoners—tells us “there is
no assurance that nilotinib will, in fact, be provided for Mr.
Rothbard,” and the fact “that nilotinib has been approved
for some inmates in the past is not an assurance that it will
be provided for Mr. Rothbard without some delay as the
request is evaluated or some other medication is tried first.”
Wise also points to “the very real difficulty the BOP has in
recruiting and maintaining medical staff for its facilities,”
which he says “may lead to delays in care as well as
provision of essential medical care by lower level medical
staff.”
A national survey of inmates in federal, state, and local
prisons found that “among inmates with a persistent
medical problem, 13.9% of federal inmates, 20.1% of state
inmates, and 68.4% of local jail inmates had received no
medical examination since incarceration. More than [20
percent of] inmates were taking a prescription medication …
when they entered prison or jail; of these, 7232 federal
inmates (26.3%), 80,971 state inmates (28.9%), and 58,991
local jail inmates (41.8%) stopped the medication following
incarceration. Prior to incarceration slightly more than [14
percent of] inmates were taking a prescription medication
for an active medical problem routinely requiring
No. 16-3996 13
medication … . Of these, 20.9% of federal inmates, 24.3% of
state inmates, and 36.5% of local jail inmates stopped the
medication following incarceration. Andrew P. Wilper, et al.,
“The Health and Health Care of US Prisoners: Results of a
Nationwide Survey,” 99 Am. J. Public Health 666, 669 (2009),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2661478/.
The authors conclude that “many inmates with a serious
chronic physical illness fail to receive care while
incarcerated.” Id. at 666.
These problems have been documented by federal
agencies. A 2016 report by the Justice Department’s Office of
the Inspector General on the BOP’s medical staffing
concluded—echoing Wise’s concerns—that “recruitment of
medical professionals is one of the BOP’s greatest challenges
and staffing shortages limit inmate access to medical care,
result in an increased need to send inmates outside the
institution for medical care, and contribute to increases in
medical costs,” and that “recruitment and retention of
medical professionals is a serious challenge for the BOP, in
large part because the BOP competes with private employers
that offer higher pay and benefits. We further found that the
BOP has not proactively identified and addressed its
medical recruiting challenges in a systemic way. Rather, it
has attempted in an uncoordinated fashion to react to local
factors influencing medical recruiting at individual
institutions.” Office of the Inspector General, U.S.
Department of Justice, “Review of the Federal Bureau of
Prisons’ Medical Staffing Challenges,” pp. i–ii, March 2016,
https://oig.justice.gov/reports/2016/e1602.pdf.
A 2008 report by the same office on medical care in the
BOP concluded that “each of the BOP institutions we tested
14 No. 16-3996
did not always provide recommended preventive health
care to inmates. Our audit found that for almost half of the
preventive health services we tested, more than 10 percent of
the sampled inmates did not receive the medical service. …
The BOP (1) did not develop agency-wide guidance to
correct apparent systemic problems found during medical-
related internal reviews and external audits; (2) did not
provide health care providers with current authorization to
practice medicine on BOP inmates through privileges,
practice agreements, or protocols; (3) had not performed
required initial and renewal peer reviews for providers; and
(4) had not implemented an effective performance
measurement system related to the provision of health care
at BOP institutions.” Office of the Inspector General, U.S.
Department of Justice, “The Federal Bureau of Prisons’
Efforts to Manage Inmate Health Care,” p. iii, Feb. 2008,
https://www.oig.justice.gov/reports/BOP/a0808/final.pdf.
These are long-standing problems. A GAO report on
health care in the BOP, published in 1994, concluded that
“inmates with special needs, including women, psychiatric
patients, and patients with chronic illnesses, were not
receiving all of the health care they needed at the three
medical referral centers we visited. This situation was
occurring because there were insufficient numbers of
physician and nursing staff to perform required clinical and
other related tasks. ... As a result, some patients’ conditions
were not improving and others were at risk of serious
deterioration.” U.S. General Accounting Office, “Bureau of
Prisons Health Care: Inmates’ Access to Health Care is
Limited by Lack of Clinical Staff,” p. 2, Feb. 1994, www.gao.
gov/assets/220/219296.pdf.
No. 16-3996 15
The problems of BOP health care may soon become even
more serious, given the decision by the new Attorney
General, Jeff Sessions, to continue confining some federal
prisoners in privately owned prisons. See Eric Tucker, “U.S.
will continue use of privately run prisons, Attorney General
says,” Feb. 23, 2017, PBS Newshour, The Rundown, www.
pbs.org/newshour/rundown/u-s-will-continue-use-privately-
run-prisons-attorney-general-says/. The bad reputation of
those prisons had caused the previous Administration to
begin phasing out confinement of federal prisoners in them.
See Memorandum from Sally Q. Yates, Deputy Attorney
General, to the Acting Director, Federal Bureau of Prisons
(Aug. 18, 2016), www.justice.gov/archives/opa/file/886311/
download; Office of the Inspector General, U.S. Department
of Justice, “Review of the Federal Bureau of Prisons’
Monitoring of Contract Prisons,” Aug. 2016, https://
oig.justice.gov/reports/2016/e1606.pdf.
I am mindful that if Rothbard is denied nilotinib in
prison he can invoke the BOP’s grievance process. But how
long will that take? We’re not told, and Dr. Cripe,
Rothbard’s physician, warns that any “prolonged
interruption” in Rothbard’s access to nilotinib will endanger
his health.
To conclude, my inclination would be to reverse the
judgment of the district court with directions to impose the
sentence recommended by the probation service. But I
would be content to reverse and remand with instructions
that the district judge appoint neutral expert witnesses
drawn both from the medical profession and from academic
analysis of prison practices and conditions, with particular
emphasis on the federal prison system, and that the judge
16 No. 16-3996
reconsider his sentence in light of evidence presented by
these witnesses as well as any witnesses that the government
or the defendant may care to call.
What is clear is that Jeffrey Rothbard is entitled to a more
informed and compassionate judicial response to his
physical and mental illnesses than he has received from the
district court and this court.