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United States v. Rothbard

United States Court of Appeals, Seventh Circuit

March 17, 2017

United States of America, Plaintiff-Appellee,
Jeffrey Rothbard, Defendant-Appellant.

          Argued February 17, 2017

         Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. l:14-cr-00089-RLY-DML - Richard L. Young, Judge.

          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 obtaining loans for environmentally friendly upgrades to their facilities. He committed this offense, which yielded more than $200, 000 for him, while he was on probation for a felony forgery conviction in Indiana. The district court sentenced him 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 appeal, Rothbard urges us to find that his sentence is substantively 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 supplemental 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.


         Rothbard's offenses date back to at least 2010, when he installed 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 arrange for financing for energy savings upgrades, but it would require a deposit to process the loan. The clients paid the deposits, but the money went straight to Rothbard's pocket. He used it on personal items, including to attend a PGA golf tournament and to buy his son a vehicle. Ultimately he was caught 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.


         The key fact behind Rothbard's sentencing challenge relates to his health. In 2005, well before the time he instituted the GreenCity scheme, he was diagnosed with imatinib-resistent 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 recognized for the treatment of Rothbard's type of leukemia. All three are extremely expensive: the Journal of Clinical Oncology reported in 2013 that the annual price of nilotinib is $115, 000 to $124, 000; the price of the other two drugs, dasatinib and ponatinib, appears to be comparable. Hagop M. Kantarjian et al., Cancer Drugs in the United States: Justum Pretium - 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' imprisonment. Because of Rothbard's health, however, Probation recommended 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 recommendation to three years' probation, noting that although Rothbard seemed to need a harsher penalty to deter future criminal behavior (because he had committed the fraud while on probation), it seemed unfair to burden the taxpayers with the exorbitant cost of Rothbard's medication in prison.

         Rothbard filed a pre-sentencing memorandum in which he urged that a custodial sentence would be unreasonable, because (he asserted) BOP could not guarantee that he would receive 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-formulary 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 Guidelines 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 Regional 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 review and/or care, if clinically necessary. ...

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