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Together or Separate? When Paying for a Client Dinner Can Mean Federal Prison

Reservations at the local steakhouse. Dirty martini. Oysters on the half shell. Wedge salad. Porterhouse steak. A bottle of red. And cheesecake. Sound improper? How about a federal offense? The U.S. Attorney’s Office for the District of Massachusetts sure thinks so. Fortunately, today in Boston, a federal jury disagreed.

The case, United States v. W. Carl Reichel, which centered on an alleged conspiracy to pay doctors kickbacks in the form of dinners and speaking fees, was yet another showdown regarding the required intent in anti-kickback cases. It centered on Mr. Reichel’s role as CEO of Warner Chilcott, a pharmaceutical company, for allegedly conspiring to pay doctors kickbacks in the form of dinners and speaking fees. The dinners were supposedly intended – at least in part – to induce doctors to prescribe medications manufactured by Warner Chilcott.

Two weeks ago, the Government asked the court to instruct the jury that “the inducement factor is met if any purpose of a payment is intended to induce an item, good, or service that is reimbursable by the federal government.” 

This is commonly referred to as the “one purpose” test, although the Government’s “any purpose” description better illustrates the reach of this standard. You most often see this issue phrased as “hope and expectation” (legal) versus “quid pro quo” (illegal). Federal courts are all over the spectrum on the AKS scienter test. The conduct in question here, at least in part, involved networking and business dinners, where, as explained the defense, “persuading and influencing the doctor to prescribe the representative’s drug is the entire point of his sales promotion effort.” The Government argued that if the dinners were at all intended to induce prescriptions, a guilty verdict was warranted.

Business dinners are just that – business. Companies like health care providers are not meeting with potential business partners for fun. How is a juror supposed to distinguish between a legitimate sales dinner versus an intent to gain influence over the judgment of a physician?

What instructions the jury ultimately received remains unclear. And although the jury got it right in this case, the battle over the “one purpose” test will continue nationwide. In the meantime, be sure to ask for separate checks at dinner.

© Polsinelli PC, Polsinelli LLP in California


About this Author

Shareholder, Practice Vice Chair

Jonathan Rosen is a highly regarded former federal and state prosecutor, having won more than 100 trials. He has argued numerous cases before the U.S. Court of Appeals for the District of Columbia. He focuses on health care fraud, consumer fraud, public corruption, the Foreign Corrupt Practices Act, corporate and securities fraud, export control violations, antitrust violations, money laundering, and government contracts. He has defended individuals in high-profile criminal cases and congressional investigations while also representing publicly traded companies in...


When a client turns to William Ezzell, they can expect an attorney keenly focused on learning who they are and what they do. He is genuinely passionate about understanding the intricacies unique to each client’s business, and how they view the world from their perspective. William combines this passion with his diverse practice history to further a collective goal: the best possible outcome. As a member of the firm’s Government Investigations and White Collar Defense Group, William devotes the majority of his practice to representing companies and individuals faced with white collar criminal matters, including the False Claims Act and the Anti-Kickback Statute.