Saturday, November 19, 2016

Dallas fraud defendants win freedom but must fund 24-hour armed guard privateofficer.com

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Dallas TX Nov 19 2016 In a first for Dallas, a federal judge has ordered the release of two men accused of health care fraud, provided they remain in a high-rise condo until trial and pay for around-the-clock armed security guards.
In a previous detention hearing last month, the government's lead prosecutor successfully argued that Jeffrey Eugene Fuller, 51, and Andrew Joseph Baumiller, 37, posed a flight risk and should therefore remain behind bars until their trial.
The Dallas men were arrested last month along with eight others, including doctors, pharmacy owners and marketers, and charged in an updated 35-count indictment. In all, 12 defendants are accused of conspiring to sell to soldiers expensive compounded products like pain and scar creams, which bilked the government out of $100 million.
Prosecutors say Fuller and Baumiller are responsible for about half that amount. Fuller is the owner of Trilogy Pharmacy in Dallas, which is accused of paying kickbacks for unnecessary pain creams and other items billed to Tricare, the military health care system. Baumiller is president of the company. They have pleaded not guilty to the charges.
Hiring private security details as a condition of pretrial release is rarely granted. Federal judges have rejected such proposals in other high-profile white-collar fraud cases, such as the one involving Allen Stanford, who is serving 110 years in federal prison for a massive investment fraud.
But attorneys for Fuller and Baumiller said Friday that the defendants in those cases posed substantial risks of flight that weren't present in this case. And they noted that Bernie Madoff, one of the worst con men in U.S. history, was released on conditions that included the hiring of armed security guards.
U.S. Magistrate Judge Irma Ramirez ruled on Oct. 22 that the government met its burden to show that Fuller and Baumiller were flight risks.
She based that on the following government testimony: that the men travel outside the U.S. extensively; they told people they'd flee to avoid arrest; they applied for permanent residence in Mexico and bought a condo there; they quickly got married around the time of the indictment; and they were about to leave for Mexico when they were arrested.
Ramirez also cited in her order a person close to the defendants who told investigators that the men planned to move money to Dubai. In recorded conversations, Fuller and Baumiller displayed gold and jewelry and called it "portable wealth," court records show. And Fuller was quoted saying the government was a "battleship" while his company was a "speedboat."
But U.S. District Judge David C. Godbey said Friday that the new private security condition of release, which was not proposed in the earlier hearing, was enough to reasonably ensure that the defendants will appear in court before trial. It's not meant to be a guarantee, he added.
Joe Kendall, a former federal judge who represents Baumiller, said the men plan to hire a security firm owned by Danny Defenbaugh, who served 33 years in the FBI and supervised its Dallas office.
Defenbaugh testified that he will hire a constable and deputy constable from Kaufman County as well as an Ellis County sheriff's deputy and a game warden to provide the security. All are licensed peace officers who will carry weapons, he said.
The officers will guard Fuller and Baumiller on a contract basis after working a full shift at their regular jobs, Kendall said, unless they are able to use accrued time off. They have never worked on such a security detail before, but they do have experience protecting company executives and international dignitaries, Defenbaugh said.
Godbey said the defendants must remain inside an apartment or condo that is high enough to prevent them from jumping out. It must have only one way in and out, and it must be guarded around the clock by an armed officer. Fuller and Baumiller will also be required to wear electronic ankle monitors.
Kendall said the defendants' families have already given him $40,000, which he is holding in a trust account, to pay for the security service. It will cost them $10,000 a week, but Kendall said the family members assured him they will continue to finance the security detail as much as they can.
He and Fuller's attorney, Jeff Kearney, argued that their clients have strong family ties to the Dallas area and that they fully cooperated with investigators, even disclosing millions of dollars in a bank account.
"They weren't acting like they were doing anything to run," Kearney said.
He said the men have been in a relationship for 17 years and have traveled together to Puerto Vallarta on Mexico's west coast for 15 of those years. They have since put their $300,000 Mexican condo up for sale, he said.
"It's not like they could hide there," Kearney said. "I don't think these guys have anywhere to go."
Kendall said the "last place" the defendants would flee to is Dubai, which makes it a crime punishable by death to be gay.
Assistant U.S. Attorney Douglas Brasher said Fuller and Baumiller are facing more than 30 years behind bars if convicted and have the resources to flee. He said a large amount of money earned in the fraud is unaccounted for, and there's evidence the defendants were wiring money to different accounts.
Brasher also said allowing them to pay for their own armed guards would pose a danger to the community if they tried to escape. And it would set a dangerous precedent in the Northern District of Texas, he added.
"This is a case of wealthy people buying their way out of detention," Brasher told the judge. "These are defendants who think they can throw money at anyone to get their way."
Brasher also questioned how the guards would be able to stay awake after working a full shift in their full-time jobs.
Godbey said he believed the new conditions will be adequate.

"If the defendants skip, I will be as disappointed as anyone in this room," Godbey said.
Dallas News

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