Man Asks 11th Circuit To Reduce Sentence For Medical Device Fraud

By Carolina Bolado 

Law360, Miami (January 30, 2024, 4:45 PM EST) — A businessman who received a 10-year prison sentence for buying discounted medical devices intended for Afghanistan but instead reselling them in the U.S. told the Eleventh Circuit on Tuesday that the district court overstated the loss to the medical device makers and erroneously enhanced his sentence as a result.

In oral arguments in Miami, Howard Srebnick of Black Srebnick, who represents Byramji Javat, said Javat’s deception did not financially injure the sellers, who would have liked to have sold their products at higher prices but could not find buyers.

“The government’s counsel imagines this is a case where Mr. Javat was obligated to resell goods at a particular location,” Srebnick told the three-judge panel. “Had Javat bought the goods and simply burned them, the seller would’ve gotten the benefit of the bargain.”

However, David Lieberman of the U.S. Justice Department told the judges there was little or no profit for the manufacturers and pointed to evidence presented at the trial of Javat’s co-defendant, Luis Soto. At trial, witnesses from the manufacturers said some items were given to Javat at cost and that they would go out of business if they offered those prices widely.

“The companies agreed to offer these prices because they felt it was in their companies’ best interest to support Afghan reconstruction efforts,” Lieberman said.

Javat, the chairman of Dubai-based Uniworld Group Inc., pled guilty to conspiracy to commit wire fraud and was sentenced in December 2019 to 10 years in prison after the district court found him responsible for a fraud loss of $36.5 million and increased the sentencing guidelines range by 22 levels. The court also imposed a $26 million forfeiture judgment against him.

Prosecutors said that between 2014 and 2017, Javat bought deeply discounted medical devices by telling manufacturers he was a supplier of medical and food products to U.S. troops in Afghanistan. In reality, he never intended to send the products to Afghanistan and, instead, resold them in the U.S.

To do this, prosecutors said, Javat would ship the products abroad and immediately send them back to the U.S. or falsify documentation that stated the devices were exported.

Soto, a customs broker in Miami, took his case to trial, where the government presented evidence that he knew about Javat’s fraud scheme but still helped him supply paperwork to federal agencies to facilitate the reentry of the products through the Port of Miami or Miami International Airport.

A jury convicted him of wire fraud, obtaining pre-retail medical products by fraud or deception, and conspiring to commit both offenses. He received a six-year sentence and was ordered to forfeit $100,000.

Soto’s attorney, Rhonda Anderson, told the appeals court on Tuesday that at trial, the government argued it made no sense to have a product coming back to the market as a gray-market product, but she said that’s not true.

Brokers often deal with gray market products legally, Anderson said. Simply bringing products back into the U.S. would not have tipped off Soto that Javat was operating a fraudulent scheme, she added.

“It’s not unusual for a product to come back into the United States,” Anderson said. “It would not have presented a red flag for Mr. Soto.”

Javat and Soto were two of six people charged in August 2018 in connection with the scheme. California residents Sunil Chopra and William Armando, who helped transport the products and removed export labels, pled guilty and were sentenced to two and 1½ years in prison, respectively.

Florida resident Emanuel Daskos also pled guilty and was given two years of probation. The indictment against James Sipprell, a Georgia resident, was dismissed in 2021.

U.S. Circuit Judges Robin S. Rosenbaum, Kevin C. Newsom and Robert J. Luck sat on the panel for the Eleventh Circuit.

The government is represented by David Lieberman of the U.S. Department of Justice’s Appellate Section.

Javat is represented by Howard Srebnick and Alyssa Silvaggi of Black Srebnick, Richard C. Klugh of the Law Office of Richard C. Klugh and Terrance G. Reed of Lankford & Reed.

Soto is represented by Rhonda Anderson of Rhonda A. Anderson PA.

The case is U.S. v. Javat et al., case number 19-15168, in the U.S. Court of Appeals for the Eleventh Circuit.

–Editing by Drashti Mehta.

To listen to the Oral Argument before the 11th Circuit, click here.