Former Insys Execs Win Another COVID-19 Prison Delay

By Chris Villani
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Law360 (November 18, 2020, 2:23 PM EST) -- A federal judge on Wednesday allowed six former Insys Therapeutics Inc. executives who were convicted of bribing doctors to prescribe opioids to delay reporting to prison until at least February due to the ongoing COVID-19 pandemic.

Insys founder John Kapoor, 77, and former underlings Michael Gurry, Joe Rowan, Rich Simon, Michael Babich and Sunrise Lee all filed motions this month seeking to delay the starts of their respective prison terms until Feb. 2. Federal prosecutors opposed the requests.

In a brief docket entry Wednesday, U.S. District Judge Allison D. Burroughs wrote that "under any other circumstances, these motions would be denied."

"Although the court fully understands the government's position and its interest in having defendants serve their sentences in a timely manner, the court must balance this interest against the need to keep prison populations low enough such that the facilities can safely house those who must be there," Judge Burroughs wrote. "Here, none of the defendants poses an unmanageable danger to the community or an unacceptably high risk of flight."

The delay is the sixth the defendants have received since Judge Burroughs issued prison terms in January ranging from 66 months for Kapoor to a year and a day for Lee.

Prosecutors had agreed to many of the extensions before pushing back in a filing Monday. The government wrote that the Insys executives were trying "to circumvent the administrative process in place for [Bureau of Prisons] inmates, while ignoring their burden of proof."

"While the risks associated with COVID-19 are real and worthy of considered action, those risks do not require the criminal justice system to remain static," prosecutors wrote.

Lee's attorney, Peter Horstmann, said Wednesday that his client is "grateful for the compassion that the court and the government have shown during this uniquely difficult time."

A government representative declined to comment and attorneys for the other executives either declined to comment or did not immediately respond to requests for comment Wednesday.

Following a blockbuster three-month trial in early 2019, a jury convicted Kapoor, Gurry, Rowan, Simon and Lee of orchestrating a scheme to use a speaker program to funnel cash and perks to doctors so they would prescribe Subsys, an expensive Insys fentanyl spray.

Prosecutors allege the defendants then lied to insurance companies about patients' diagnoses in order to get the insurers to pay for the drug.

Within moments of convicting Kapoor in May 2019, federal prosecutors asked that the onetime billionaire be placed on house arrest pending sentencing due to his wealth and overseas assets. Judge Burroughs denied the request.

Kapoor and the other convicted executives are appealing the jury's verdicts to the First Circuit. Babich, the former Insys CEO, pled guilty on the eve of trial and testified against his old colleagues.

The government is represented by David G. Lazarus, Fred M. Wyshak Jr., K. Nathaniel Yeager, Alexandra W. Amrhein Elysa Q. Wan and Mark T. Quinlivan of the U.S. Attorney's Office for the District of Massachusetts.

Kapoor is represented by Beth Wilkinson, Chanakya Sethi and Kosta S. Stojilkovic of Wilkinson Stekloff LLP and Martin G. Weinberg of the Law Offices of Martin G. Weinberg PC.

Gurry is represented by Megan A. Siddall and Tracy A. Miner of Miner Orkand Siddall LLP.

Simon is represented by William W. Fick and Daniel N. Marx of Fick & Marx LLP.

Lee is represented by Peter C. Horstmann of the Law Offices of Peter Charles Horstmann.

Rowan is represented by Michael Kendall and Alexandra I. Gliga of White & Case LLP.

Babich is represented by Daniel C. Sale, Joseph Sedwick Sollers III, Lucas M. Fields and Mark A. Jensen of King & Spalding LLP and Alexandra G. Watson and William H. Kettlewell of Hogan Lovells.

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 Stephen Berg.

For a reprint of this article, please contact reprints@law360.com.

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