By Chris Villani

Law360 (April 7, 2020, 6:59 PM EDT) -- A former hedge fund manager behind bars for stealing $10.5 million from investors in a Ponzi-style operation should not be released from a New York prison where COVID-19 has broken out, the government argued Tuesday, warning his release could set a bad precedent during the pandemic.

Prosecutors in Boston said Yasuna Murakami, who is serving a six-year prison term after pleading guilty in the massive multiyear fraud, has not yet gone through the administrative process available to him by petitioning the warden of MDC Brooklyn and making his case to the Bureau of Prisons.

While Murakami has said his underlying condition of hypertension makes him six times more likely to die if he gets the coronavirus, prosecutors said that even if he does file such a petition, releasing him based on the mere possibility of an infection could pave the way for a full-scale release of nonviolent criminals.

"He does not allege that he has COVID-19. Nor does he allege that he has been exposed to any individuals with COVID-19," wrote Assistant U.S. Attorney Jordi de Llano. "Instead, he is seeking release based solely on the possibility of becoming infected, in part because of an underlying medical condition."

That is not sufficient to justify a compassionate release, the prosecutor argued.

"If that were enough, every non-violent prisoner with any medical condition covered by the current crisis — including any respiratory issues, immune-system deficiencies and the like — could seek to have his sentence immediately suspended and ordered released," de Llano wrote.

Murakami asked U.S. District Judge Douglas P. Woodlock on Saturday to be released from the Brooklyn prison, where he said seven inmates and four prison officials had tested positive for the novel coronavirus. He also argued his hypertension puts him at a far greater risk if he were to get the virus, citing a World Health Organization report on patients in China.

Inmates and immigration detainees across the country are increasingly filing release requests due to the pandemic. On Friday, the Massachusetts Supreme Judicial Court made it easier for judges to free inmates awaiting trial, citing the "unprecedented" crisis.

Murakami said he asked the warden at the Brooklyn prison for his release but could not wait until the deadline for BOP to respond in early May, citing the rapidly evolving health emergency and the possibility of an outbreak at the facility. He echoed arguments made by defendants in cases around the country that practicing "social distancing" and ensuring proper sanitary conditions simply is not practical or possible in a prison.

The government countered Tuesday by arguing that the prison has taken steps to mitigate the virus' chances of circulating through the facility and that cases there have ticked downwards.

Prosecutors said Judge Woodlock cannot step in and reduce a sentence until the BOP process has played out. Even if the judge could, the government said, he should "still require the defendant to pursue a full BOP review of his case, particularly whereas here the defendant seeks to rely on factual claims about his health and conditions of confinement as to which there is no fully developed record."

Murakami's lawyer declined to comment but did fire off a five-page response to the government's opposition. In it, he argued that the point of getting his client out of prison is to protect his health before an outbreak and that standing by until cases spread inside the prison would be to wait too long.

"The government does not dispute that MDC Brooklyn has woefully inadequate medical resources to treat inmates who contract COVID-19 (the facility lacks an adequate number of test kits and there are only three doctors at the facility, none of whom specializes in infectious diseases), nor does it dispute that the communal nature of prison subjects Mr. Murakami to increased risk of contracting the virus," the response states. "Instead, it asks this court to simply trust that the BOP has the pandemic under control."

The assurances that Murakami will be safe "ring hollow," his lawyers argue, as the MDC Brooklyn warden himself placed Mr. Murakami on a list of prisoners most at risk from the virus and the BOP has already failed to prevent the "exponential transmission" of COVID-19 in its facilities. In one week, the number of prisoners who tested positive for COVID-19 has increased 400%, eight inmates have died and the number of infected prison staff has shot up, Murakami argues.

A government representative declined to comment.

Murakami, who was banned from the securities industry for life, pled guilty in January 2018 to one count of wire fraud for misappropriating a $1 million investment in 2013, a fraction of a larger scheme to divert millions of investor dollars to his bank account and that of a business partner who was not charged.

Murakami took money from individual and corporate investors from May 2011 through December 2016, prosecutors have said, and promised them he would invest it with a "highly sought-after" firm. In fact, he deposited it in his own business and personal accounts and used some of it to repay earlier investors who inquired about their money, the government has alleged.

The government is represented by Jordi de Llano of the U.S. Attorney's Office for the District of Massachusetts.

Murakami is represented by Seth B. Orkand and Megan A. Siddall of Miner Orkand Siddall LLP.

The case is U.S. v. Murakami, case number 1:17-cr-10346, in the U.S. District Court for the District of Massachusetts.

--Editing by Daniel King.

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