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Law360 (April 27, 2020, 2:35 PM EDT) -- Insys Therapeutics Inc. founder John Kapoor will not have to report to prison until July 21, a judge ruled Monday after defense attorneys and prosecutors sparred over whether the onetime billionaire could attempt to flee during the pandemic.
The one-sentence order from U.S. District Judge Allison D. Burroughs came shortly after Kapoor's legal team argued it would be "baseless and cruel" to have him report to prison during the COVID-19 pandemic to begin serving his 66-month sentence, pushing back on the government's claim that he is a flight risk and should face house arrest or an ankle bracelet if his prison term is delayed.
Prosecutors previously agreed to delay the surrender dates for four other former Insys executives who were convicted alongside Kapoor of a scheme to bribe doctors to prescribe the company's fentanyl spray. But the government argued, most recently in a filing late Friday, that Kapoor should have to report to prison May 19 because of his wealth and overseas ties, or at least submit to additional conditions of release if he stays free during the pandemic.
"John Kapoor has unusual resources that are substantially unlike the resources of any of the other defendants convicted after trial in this case," prosecutors wrote. "While the United States does not seek to penalize defendant Kapoor for being wealthy, it is clear that, given his resources, his flight from this country is much easier to accomplish. Likewise, his ability to live a comparable lifestyle out of the United States is sustainable."
Prosecutors cited the case of TelexFree Inc. co-founder Carlos Wanzeler, who fled after helping to orchestrate a $3 billion Ponzi scheme and was on the run in South America for years before being arrested again last year.
But Wanzeler, Kapoor's attorneys said in a Monday filing, is a Brazilian citizen who never appeared in court.
"Dr. Kapoor, in contrast, is an American citizen who has complied with every court-imposed requirement and appeared at every required hearing in the two and a half years since his arrest," the response states. "That includes his sentencing, when he knew he would face the government's request for a 15-year prison term, the emotional statements of patients, and the possibility of remand on the spot."
Kapoor's attorneys said his age, 76, and a relevant preexisting medical condition would pose "a substantial risk of death were he infected" with the virus while behind bars.
They also argued the government's worries are far-fetched. To flee to his native India, Kapoor would need to somehow get a new passport and take multiple long flights to land in a crowded country where he would not be able to practice the kind of social distancing that he could at home in Arizona.
"The government's fallback position — conditioning delayed surrender on electronic monitoring or house arrest — unfairly singles out Dr. Kapoor for worse treatment than his co-defendants," his legal team argued Monday. "Social distancing imposes practical restrictions on us all, but the government has not used that common fact to seek more restrictive conditions for anyone in this case other than Dr. Kapoor."
Kapoor argued there is no justification for treating him differently than the others convicted along with him, and noted that the government has tried, and failed, four times to have harsher conditions imposed on him.
Prosecutors have said Kapoor was the major player behind Insys' scheme to use a sham speaker program as a way to funnel cash and perks to doctors so they would write more prescriptions and higher doses of the company's fentanyl spray, Subsys. As the government noted in its filing Friday, he is facing the longest prison term of the Insys executives.
Judge Burroughs, who presided over the trial, shot down a government motion to have Kapoor taken into custody immediately after he was sentenced in January. She said he had been cooperative with his conditions of release since his arrest and had done nothing to suggest he would flee if given the chance.
A magistrate judge who initially presided over Kapoor's case also deemed he was not a flight risk.
Counsel for Kapoor and a government representative declined to comment Monday.
The government is represented by Fred M. Wyshak Jr., K. Nathaniel Yeager, David G. Lazarus and Mark T. Quinlivan of the U.S. Attorney's Office for the District of Massachusetts.
Kapoor is represented by Kosta S. Stojilkovic, Beth A. Wilkinson and Chanakya A. Sethi of Wilkinson Walsh LLP, Brien T. O'Connor and Aaron M. Katz of Ropes & Gray LLP and Martin G. Weinberg of Martin Weinberg Law PC.
The case is U.S. v. Babich et al., case number 1:16-cr-10343, in the U.S. District Court for the District of Massachusetts.
--Editing by Orlando Lorenzo.
For a reprint of this article, please contact reprints@law360.com.
