EXHIBIT 10.8
U.S. Department of Justice
United States Attorney
District of Massachusetts
Main Reception: (617) 748-3100 United States Courthouse, Suite 9200
1 Courthouse Way
Boston, Massachusetts 02210
January 13, 2000
By Hand
- -------
Jonathan Chiel, Esquire Jeffrey E. Stone, Esquire
Choate, Hall & Stewart McDermott, Will & Emery
Exchange Place 222 West Monroe Street
Boston, MA 02109 Chicago, IL 60606-5096
Alan E. Reider, Esquire Harold Damelin, Esquire
Breckinridge L. Willcox, Esquire Powers, Pyles, Sutter &
Arent, Fox, Kintner, Plotkin & Verville
& Kahn 12th Floor
1050 Connecticut Avenue, N.W. 1875 Eye Street, NW
Washington D.C. 20036-5339 Washington, D.C. 20006-55409
Re: United States v. NMC Homecare, Inc.
-----------------------------------
Gentlemen:
This letter sets forth the agreement between the United States Department
of Justice and the United States Attorney for the District of Massachusetts
(hereinafter collectively the "United States") and your client, NMC Homecare,
Inc., a Delaware corporation ("NMC Homecare" or "the Defendant"), relating to
the U.S. Attorney's criminal investigation of NMC Homecare's IntraDialytic
Parenteral Nutrition ("IDPN") and Intraperitoneal Nutrition ("IPN") program.
The Agreement ("Plea Agreement") is as follows:
1. Guilty Plea
-----------
On or before January 19, 2000, or such other date as the Court may set, the
Defendant shall waive indictment and plead guilty to Count One of the criminal
Information attached hereto as Exhibit A, which charges the Defendant with
conspiracy to defraud the United States, in violation of 18 U.S.C. (S) 371.
2. Sentencing Guidelines
---------------------
The United States and the Defendant agree that the following provisions of
the United States Sentencing Guidelines (8U.S.S.G.") apply to the sentencing of
this Defendant on Count One of the Information:
a. The loss to the United States from this offense, for criminal
sentencing purposes, pursuant to U.S.S.G. (S)8C2.4(a), is
(1) IDPN administration kits $ 3,480,000
(2) False statements and material $25,398,103
omissions
(3) Hang fees and other inducements $ 6,368,824
Total $35,246,927
b. The culpability score, pursuant to U.S.S.G. (S)8C2.5, is seven
(7), calculated as follows:
(1) Base score is 5 ((S)8C2.5(a));
(2) Add 4 points pursuant to (S)8C2.5(b)(2)(A)(i) and (ii);
(3) Deduct 2 points pursuant to (S)8C2.5(g)(2).
c. The applicable multiplier range pursuant to U.S.S.G. (S)8C2.6 is
1.4 to 2.8 and the multiplier to be applied as to this Defendant
is 1.4.
d. There is no basis under the guidelines for a departure, either
upward or downward.
3. Agreed Disposition.
-------------------
The United States and the Defendant agree, pursuant to Fed. R. Crim. P.
11(e)(l)(C), that the following sentence is the appropriate disposition of Count
One of this case:
a. A criminal fine of $49,345,698, payable as follows:
1) $24,385,000 within 15 days of sentencing;
2) $12,480,349 on or before April 16, 2001; and
3) $12,480,349 on or before July 16, 2001; and
2
b. A special assessment of $400, pursuant to 18 U.S.C.
(S)3013(a)(2)(B), payable on or before the date of sentencing.
The Defendant acknowledges that it is aware that it is obligated, pursuant
to 18 U.S.C. (S)3612(f), to pay interest on the portion of the fine which is not
paid before the fifteenth day after the date of the judgment of the Court in
this case.
In light of the pending civil actions United States ex rel. Ven-A-Care of
-----------------------------------
the Florida Keys Inc. v. National Medical Care, Inc., et. al., Civil Action No.
- --------------------- -------------------------------------
97-10962-NG (D. Mass.) and United States ex rel. Dana R. Austin et al. v.
-------------------------------------------
National Medical Care, Inc., Civil Action No. 94-12164-NG (D. Mass.), and the
- ---------------------------
settlement agreement between National Medical Care, Inc. et al. and the United
-- --
States relating to those civil actions which is being signed contemporaneous
with this Plea Agreement, the parties agree the complication and prolongation of
the sentencing process that would result from an attempt to fashion a proper
restitution order outweighs the need to provide restitution to the victims in
this case. See, 18 U.S.C. (S) 3663(a)(1)(B)(ii). Therefore, the United States
agrees it will not seek a restitution order as to this Defendant.
4. No Further Prosecution of Defendant
-----------------------------------
The United States agrees that, other than the charge in Count One of the
attached Information, it shall not further prosecute the Defendant for conduct
which (1) falls within the scope of the conspiracy which is charged in Count One
of the Information; (2) was within the scope of the grand jury investigation
conducted by the U.S. Attorney; or (3) was known by the U.S. Attorney prior to
the date of this letter.
The United States expressly reserves the right to prosecute any individual
with regard to the conduct encompassed by this Plea Agreement and the grand jury
investigation, including, but not limited to, present and former officers,
directors, employees and agents of the Defendant.
5. Probation Office Not Bound By Agreement
---------------------------------------
The parties acknowledge that the disposition agreed upon by the parties and
their calculations under the Sentencing Guidelines are not binding upon the
United States Probation Office.
6. Fed. R. Crim. P. 11(e)(l)(C) Agreement
--------------------------------------
Defendant's plea will be tendered pursuant to Fed. R. Crim. P. 11(e)(l)(C).
Defendant cannot withdraw its plea of guilty unless the sentencing judge rejects
the Plea Agreement. If the sentencing judge rejects the guilty plea, this Plea
Agreement shall be null and void at the option of either the United States or
the Defendant except as set forth in paragraph 8 below. If the Defendant's
guilty plea is withdrawn on Defendant's motion for any reason, this Plea
Agreement shall be null and void at the option of the U.S. Attorney, except as
set forth in paragraph 8 below.
7. Civil and Administrative Liability
----------------------------------
3
By entering into this Plea Agreement, the United States does not compromise
any civil or administrative liability, including but not limited to, any False
Claims Act, or tax liability, which Defendant may have incurred or may incur as
a result of its conduct and its plea of guilty to the charge specified in
paragraph l of this Plea Agreement.
8. Waiver of Defenses
------------------
In the event that NMC Homecare's guilty plea is not accepted by the Court
for whatever reason, or is later withdrawn for whatever reason, NMC Homecare
waives, and agrees not to interpose, any defense it would have under the Speedy
Trial Act or any applicable statute os limitations, by virtue of the passage of
time subsequent to the date of this letter, as to any criminal charges relating
to matters within the scope of the grand jury investigation conducted by the
U.S. Attorney, provided such charges are filed within 90 days of the date on
which such guilty plea is rejected or withdrawn. In addition, NMC Homecare
agrees to be bound by the waiver of the statute of limitations contained in the
January 10, 2000 letter from Breckinridge L. Willcox to Peter A. Mullin, and
that such waiver shall remain in full force and effect following execution of
this Agreement. Notwithstanding paragraph 6 above, this waiver of the defenses
shall remain in full force and effect even if Defendant's plea of guilty is not
accepted by the court, or is withdrawn for any reason.
9. Breach of Agreement
-------------------
If the United States determines that Defendant has failed to comply with
any provision of this Plea Agreement, or has committed any crime between the
date of this letter and the date of sentencing in this matter, the United States
may, at its sole option, be released from its commitments under this Plea
Agreement in their entirety by notifying Defendant, through counsel or
otherwise, in writing. The United States may also pursue all remedies available
to it under the law, irrespective of whether it elects to be released from its
commitments under this Plea Agreement. Defendant recognizes that no such breach
by it of any obligation under this Plea Agreement shall give rise to grounds for
withdrawal of its guilty plea. Defendant understands that should it breach any
provision of this Plea Agreement, the United States will have the right to use
against Defendant before any grand jury, at any trial, hearing or for sentencing
purposes, any statements made by its employees and agents, and any information,
materials, documents or objects provided by Defendant to the government pursuant
to this Plea Agreement without any limitation.
10. Corporate Authorization
-----------------------
NMC Homecare shall provide to the United States and the Court a certified
copy of a resolution of the Board of Directors of Defendant, affirming that the
Board of Directors has authority to enter into this Plea Agreement and has (1)
reviewed the Information in this case and this Plea Agreement; (2) consulted
with legal counsel in connection with this matter; (3) voted to enter into this
Plea Agreement; (4) voted to authorized NMC Homecare to plead guilty to the
charge specified in this Plea Agreement; and (5) voted to authorize the
corporate officer identified below to execute the Plea Agreement and all other
documents necessary to carry out the provisions of the Plea Agreement. NMC
Homecare agrees that the counsel identified below
4
will appear on behalf of NMC Homecare and enter the guilty plea and will also
appear for the imposition of sentence.
11. Who Is Bound By Agreement
-------------------------
This Plea Agreement binds NMC Homecare and the United States Department of
Justice, including each of its United States Attorney's Offices, but cannot and
does not bind the Tax Division of the U.S. Department of Justice, the Internal
Revenue Service of the United States Department of the Treasury or any other
federal, state or local prosecutive authority.
12. Complete Agreement
------------------
This letter contains the complete agreement between the parties relating to
the disposition of this case as to this Defendant. No promises, agreements or
conditions have been entered into other than those set forth in this letter.
This Plea Agreement supersedes prior understandings, if any, of the parties,
whether written or oral, relating to the disposition of Count One of the
Information in this case. This Plea Agreement cannot be modified other than in
a written memorandum signed by the parties or on the record in court.
If this letter accurately reflects the agreement between the United States
and Defendant, please sign the Acknowledgment of Plea Agreement below, provide
evidence of the requisite authorization to enter into this Plea Agreement, and
return the original of this letter to Assistant U.S. Attorney Peter A. Mullin or
Joshua S. Levy.
Sincerely yours,
/s/ Mark W. Pearlstein
------------------------------
MARK W. PEARLSTEIN
Acting U.S. Attorney
District of Massachusetts
/s/ John Keeney (mwp)
-------------------------------
JOHN C. KEENEY
Deputy Assistant Attorney General
Criminal Division
U.S. Department of Justice
5
Corporate Acknowledgment of Plea Agreement
------------------------------------------
The Directors of NMC Homecare, Inc. have read this Plea Agreement and the
attached criminal Information in their entirety, and have discussed this matter
with legal counsel of the corporation's choosing, including the undersigned
counsel. As set forth in the attached resolution, the Board of Directors has
authorized me, as-an officer of the corporation, to enter into this Plea
Agreement on behalf of the corporation. I hereby acknowledge, on behalf of NMC
Homecare, Inc., that this Plea Agreement fully sets forth the agreement between
NMC Homecare, Inc. and the United States relating to the disposition of Count
One of the Information in this case and that no additional promises or
representations have been made to the corporation, by any official of the United
States, relating to the disposition o' that count. NMC Homecare, Inc. is
entering into this Plea Agreement freely, voluntarily and knowingly because it
is guilty of the offense set forth in Count One of the Information and it
believes this Plea Agreement is in its best interest.
Dated: 1/18/00 /s/ Ben J. Lipps
---------------------------------
BEN J. LIPPS
President
NMC Homecare, Inc.
Dated: January 18, 2000 /s/ Jonathan Chiel
--------------------------------
Jonathan Chiel
Choate, Hall & Stewart
Dated: 1/18/00 /s/ Alan E. Reider
--------------------------------
Alan E. Reider
Arent, Fox, Kintner, Plotkin & Kahn
Dated: 1/18/00 /s/ Breckinridge L. Wilox
-------------------------------
Breckinridge L. Willcox
Arent, Fox, Kintner, Plotkin & Kahn
Dated: January 18, 2000 /s/ Jeffrey Stone
---------------------------------
Jeffrey E. Stone
McDermott, Will & Emery
Dated: 1/18/2000 /s/ Harold Damelin
---------------------------------
Harold Damelin
Powers, Pyles, Sutter & Verville
Attorneys for NMC Homecare, Inc.
6
EXHIBIT A
(Information)
The Information dated January 19, 2000 is incorporated by reference to Exhibit A
of Exhibit 10.6 to this Current Report on Form 8-K.