Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.S. Opposes Bail Pending Appeal in Hospital Fraud Case, (Nov 30, 2012)

By Jeffrey May, J.D.

The Department of Justice has informed the U.S. Court of Appeals in New York City that it opposes bail pending appeal for a business owner who was convicted of conspiring to defraud New York Presbyterian Hospital pending his appeal. The Department of Justice Antitrust Division filed a brief opposing Michael Yaron's motion for release pending appeal on November 29 (U.S. v. Yaron, No. 12-2940).

Following a trial lasting approximately three weeks, Yaron was convicted in February 2012 of wire fraud and conspiracy to commit wire fraud for making false representations and paying kickbacks to an employee of New York Presbyterian Hospital (NYPH) in exchange for receiving contracts for asbestos abatement, air monitoring, and construction. He was sentenced to 60 months’ imprisonment and fined $500,000. Bail was denied by the trial court. The conviction of Yaron and others resulted from a federal antitrust investigation of bid rigging, fraud, bribery, and tax-related offenses in the award of construction, maintenance, and service contracts to the facilities operations department of NYPH, according to the Department of Justice.

A New York City federal grand jury returned the original indictment in April 2010. Two superseding indictments followed. The government alleged an eight-year conspiracy involving kickbacks in excess of $2 million.

Under the bail statute, a defendant must be detained pending appeal unless a judicial officer finds “by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released” and “that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in—(i) reversal, (ii) an order for a new trial, (iii) a sentence that does not include a term of imprisonment, or (iv) a reduced sentence to a term of imprisonment less than the total of the time already served plus the expected duration of the appeal process.” 18 U.S.C. § 3143(b).

According to the government, bail should be denied because Yaron, a wealthy dual Israeli-American citizen, is a potential flight risk. While Yaron surrendered his passport and has family ties and business in Philadelphia, that is not enough to carry his “high burden” of proving by “clear and convincing evidence” that he is unlikely to flee now that he is 67 years old and facing a substantial prison sentence, the government argued.

The government also contended that Yaron’s appeal will not raise a substantial issue. On appeal, Yaron questions the admission of excerpts of audio recordings involving a cooperating witness and a co-conspirator who was unaware of the recordings. The government believes that the lower court's rulings on the evidence were correct, and that the tapes, though powerful, were cumulative of other evidence and a small fraction of the overwhelming evidence of guilt. Even if there were errors as Yaron argued, the error would have had no effect on his conviction or sentence, in the government's view.

Nickolai G. Levin for Department of Justice Antitrust Division.

News: Antitrust AntitrustDivisionNews