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Law360 (March 13, 2020, 1:57 PM EDT ) Insys Therapeutics Inc. founder John Kapoor and five other executives of the opioid company won a short postponement of their prison sentences Friday and said they might seek a further delay due to the coronavirus pandemic.
In a court filing on Thursday, Kapoor, Insys CEO Michael Babich, and fellow defendants Alec Burlakoff, Joseph Rowan, Richard Simon and Sunrise Lee asked to delay their self-surrender dates until May 19 because the court has not yet entered final judgments regarding restitution. Because that hasn't happened, the group said the federal Bureau of Prisons hasn't started to place them in appropriate prison facilities.
The motion also cited the coronavirus as a potential reason to further delay the sentences.
"Depending on the course of the coronavirus pandemic and individualized circumstances, some of the defendants may seek additional continuances to self-surrender," lawyers for the group wrote. "But that is an issue for another day."
U.S. District Judge Allison D. Burroughs on Friday granted the request to push the self-surrender dates out to May 19.
In a separate ruling on Friday, Judge Burroughs found that Kapoor, Babich and Burlakoff should share responsibility for the nearly $60 million in restitution owed to victims of the racketeering scheme to bribe doctors to prescribe opioids. The other executives will have their liability capped at $5 million, the judge found.
The judge denied Kapoor's request to carve out a chunk of the restitution amount for Insys itself. The company entered into a $225 million settlement with the government, pled guilty in federal court, and filed for Chapter 11 protection last year.
"Today, Judge Burroughs entered an order holding John Kapoor and others responsible for restitution to the many victims of their widespread racketeering scheme," the government said in a statement. "The United States Attorney's Office will continue to aggressively pursue restitution from those who seek to benefit at the expense of others."
The defendants' prison terms range from 5½ years for Kapoor to a year and a day for former Insys sales manager Lee. Former executive Simon received 33 months behind bars, and Babich got 30 months. Rowan, another former executive, was sentenced to 27 months, while Burlakoff received a sentence of 26 months.
Last month, the group won its first delay, pushing the varying self-surrender dates from late February or early March into mid-April.
This time around, the group argued if they start their sentences before the prison bureau can determine the best places for them to serve, they risk winding up in higher-security facilities, according to their motion.
"Continuing the self-surrender dates to May 19, 2020, should allow sufficient time between final judgments and self-surrender for BOP designations, and will allow the court and the parties to obtain much more information on the course of the pandemic," the group said.
Five in the group also indicated they intend to appeal U.S. District Judge Allison D. Burroughs' decision not to stay their sentencing pending their appeals.
A spokeswoman for the government declined to comment on the motion and counsel for the executives either declined to comment or were not immediately available to comment on Friday.
The government is represented by Fred M. Wyshak Jr., K. Nathaniel Yeager and David G. Lazarus of the U.S. Attorney's Office for the District of Massachusetts.
Babich is represented by J. Sedwick Sollers III, Mark A. Jensen, Daniel C. Sale, and Lucas M. Fields of King & Spalding LLP, as well as William H. Kettlewell of Hogan Lovells.
Burlakoff is represented by Peter Gelhaar, George W. Vien, and Joshua N. Ruby of Donnelly Conroy & Gelhaar LLP.
Kapoor is represented by Kosta S. Stojilkovic, Beth A. Wilkinson, and Chanakya A. Sethi of Wilkinson Walsh LLP, as well as Brien T. O'Connor and Aaron M. Katz of Ropes & Gray 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.
Simon is represented by William W. Fick and Daniel N. Marx of Fick & Marx LLP.
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.
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