Ex-Pharma Sales Representative Strikes Deal in Patient EMR Fraud Case

In 2017, Aegerion Pharmaceuticals agreed to plead guilty to two misdemeanor misbranding violations and paid more than US$35 million to resolve criminal and civil liability relating to patient and reimbursement support and the promotion of its cholesterol drug, Juxtapid. Mark Moffett, a former Aegerion sales representative, has now agreed to plead guilty for his role in the scheme, avoiding a second trial and marking an end to the long-running case.

According to federal prosecutors, Aegerion sales employees promoted Juxtapid as a treatment for high cholesterol generally, which was not consistent with the drug’s narrow, FDA-approved label for patients with a rare genetic condition called homozygous familial hypercholesterolemia. DOJ alleged that Aegerion sales employees falsified statements of medical necessity and prior authorization forms, as well as accessed physicians’ electronic medical record (EMR) systems to identify patients without their authorization. Federal prosecutors held Mr. Moffett responsible for the scheme and accused him of defrauding insurers and stealing doctors’ identities by signing their names on prior authorization paperwork. One physician pleaded guilty for granting an Aegerion sales representative access to his EMR system for these purposes.

In 2019, Mr. Moffett was convicted on nine counts of wire fraud and six counts of aggravated identity theft and began serving a four-year prison sentence. But the First Circuit vacated the convictions late last year when it found the trial judge had improperly highlighted the prosecution’s evidence on the verdict form.

In the lead up to his retrial, Mr. Moffett argued that the 2023 Supreme Court case Dubin v. United States meant the government could no longer support the aggravated identity theft charges. In Dubin, the Supreme Court narrowed the scope of the aggravated identity theft statute by holding that defendants only “use” another person’s means of identification “in relation to” a predicate offense when that use is at the “crux” of what makes the conduct criminal. The trial court, however, denied Mr. Moffett’s motion to dismiss the identity theft claims, holding that whether Mr. Moffett’s use of the doctors’ identifying information was the “crux” of the alleged scheme remained a question for the jury.

By entering a plea agreement, Mr. Moffett has avoided a second trial and the risk of receiving a maximum sentence of 20 years. According to the plea agreement, Mr. Moffett will plead guilty to a single count of wire fraud in exchange for prosecutors recommending the court sentence Moffett to 20 months in prison.

By settling the case, the government has avoided — for now — litigating the boundaries of the aggravated identity theft statute in a post-Dubin landscape. The case also demonstrates that DOJ will continue to aggressively pursue individual wrongdoers of corporate crime, particularly when public health and patient privacy are implicated.

* Kate Rohde contributed to this blog. Kate is a graduate of the University of Pennsylvania Carey Law School and is employed at Arnold & Porter’s Washington, D.C. office. Kate is not admitted to the practice of law.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.