Anti-Kickback Statute: “May Be Made” Satisfied by Potential Federal Coverage; Employee Safe Harbor Is an Affirmative Defense Waived if Not Raised

Case: United States v. Steven Chun (with Daniel Tondre)  |  Court: U.S. Court of Appeals for the Eleventh Circuit  |  Date: 2026-08-18

I. Introduction

This Eleventh Circuit decision arises from the nationwide prosecution of a bribery scheme built around Insys Therapeutics, Inc.’s fentanyl spray product, Subsys. After the First Circuit affirmed RICO conspiracy convictions of Insys’s founder and executives in United States v. Simon, the government tried this Florida case as a “local” slice of the same scheme—focused not on corporate leadership but on one prescribing physician, Dr. Steven Chun, and one Insys sales representative, Daniel Tondre.

The superseding indictment charged (1) a conspiracy (18 U.S.C. § 371) to violate the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), (2) substantive Anti-Kickback counts for paying/receiving speaker-program “honoraria” tied to prescribing, and (3) identification fraud counts (18 U.S.C. § 1028(a)(7)). Following convictions and prison sentences (42 months for Chun; 48 months for Tondre), the appeal presented three clusters of issues:

• whether the evidence was sufficient (Rule 29) to prove the conspiracy and substantive Anti-Kickback violations;
• whether the trial judge’s responses to two jury notes improperly invaded the jury’s role;
• whether Chun’s Guidelines calculation overstated the “improper benefit,” and if so, whether any error was harmless.

II. Summary of the Opinion

The Eleventh Circuit affirmed across the board. It held that the evidence supported the conspiracy and substantive Anti-Kickback convictions, rejected challenges to the district court’s responses to jury questions, and declined to reach the disputed Sentencing Guidelines calculation because any potential error was harmless: the district court stated it would impose the same sentence regardless, and the sentence was substantively reasonable.

III. Analysis

A. New/Clarified Rule: The Anti-Kickback Statute’s Federal Healthcare “May Be Made” Element

The court expressly adopted the Fifth Circuit’s reading in United States v. Shah, grounding its interpretation in the statutory text (“may be made”) and reinforcing it with 42 U.S.C. § 1320a-7b(h), which states that “a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” In practical terms, proof that the physician participated in Medicare and had Medicare patients was sufficient for the element.

Why it matters: This materially lowers the government’s evidentiary burden in Anti-Kickback prosecutions in the Eleventh Circuit—especially for practices with mixed payor populations—by avoiding claim-by-claim tracing to federal reimbursement.

B. Conspiracy and Substantive Anti-Kickback Counts: Sufficiency and Intent

1. Conspiracy proof (18 U.S.C. § 371)

Applying the classic three-element test from United States v. Hasson (agreement, knowing/voluntary participation, overt act), and emphasizing that agreements are usually proved circumstantially (United States v. Pulido; United States v. Chandler), the court found “overwhelming” evidence that Chun conspired with Insys, Babich, Burlakoff, and Tondre to exchange speaker fees for Subsys prescriptions.

The opinion’s narrative leans heavily on insider testimony from Babich and Burlakoff (also central in United States v. Simon), including: (i) the “whales” concept, (ii) the “2-to-1 return on investment” metric, (iii) sham dinners with little attendance, and (iv) documentation designed to create “an aura of legitimacy.”

2. Substantive Anti-Kickback counts: federal nexus and willfulness

After adopting United States v. Shah on the federal-program element, the court rejected Chun’s “no specific intent” theory. It relied on Eleventh Circuit willfulness definitions from United States v. Nerey (quoting United States v. Vernon): the act must be voluntary and purposeful with “specific intent to do something the law forbids.”

Notably, the court treated forged sign-in sheets as corroboration of the sham nature of events and Chun’s knowledge, but clarified the core illegality: the crime was being paid to prescribe, not merely falsifying attendance records.

The court also dismissed as “frivolous” an “impermissible stacking of inferences” argument, underscoring the deference given to jury verdicts under the sufficiency framework (United States v. Trujillo; United States v. Starr citing Cavazos v. Smith; United States v. Browne).

C. Employee Safe Harbor: Treated as an Affirmative Defense and Waived if Not Raised

Tondre argued on appeal that, as an Insys employee, he was categorically outside the statute. The court rejected that framing, citing Vernon for the proposition that § 1320a-7b(3)(B) is an affirmative defense, and United States v. Najjar for the rule that affirmative defenses not raised at trial are waived. This is doctrinally significant because it places the procedural burden on defendants to timely assert and litigate safe harbor protection rather than treating it as an element-negating limitation the government must disprove.

D. Jury Questions: Limits of Judicial Responses During Deliberations

1. Standards governing responses

The court reiterated that judges must make reasonable efforts to answer jury questions (United States v. Rodriguez), have discretion so long as they do not misstate law or confuse the jury (United States v. Lopez), and should answer with “concrete accuracy” within the question’s limits (United States v. Joyner). Review is for abuse of discretion (Lopez; United States v. Frazier).

2. The “per unit cost” request and directing jurors to evidence

The jury asked for data to compare per-unit costs by dosage strength. The district court pointed the jury to Government Exhibits 600 and 600-A (large prescription spreadsheets), adding the caveat that the jury “may or may not find these exhibits helpful.”

Chun argued this improperly highlighted evidence, relying on United States v. Rivera-Santiago. The Eleventh Circuit distinguished that case because the district court here did not “cull” or selectively read testimony; it provided exhibits in full and explicitly avoided suggesting they were dispositive. The court’s reasoning also invoked the general concern that a judge’s influence is “of great weight” (Quercia v. United States) and becomes problematic when the judge selects particular snippets to answer a factual question.

The court also rejected an argument that the jury’s parenthetical “(not PDE)” barred sending an exhibit containing PDE data; it read the note as seeking per-unit cost rather than rejecting any exhibit that included PDE fields.

3. The “forwarded text” exhibit identification request

The jury asked for an exhibit number for a 2013 text in which Tondre “forwards” part of a purported Chun message, the original of which was not in evidence. The judge responded by identifying exhibits (212B, 213B, 213D) and instructed: “Please consider all the evidence as a whole.”

Chun claimed this validated the government’s “forwarded” characterization. The Eleventh Circuit treated the issue as simple identification, noting the jury used “forwarded” in quotes and described a “purported” message; the court did not adopt or amplify that characterization.

E. Sentencing: “Improper Benefit,” Gross Revenue vs. Profit, and Harmless Error

Chun contested the Guidelines enhancement under U.S.S.G. § 2B4.1(b)(1)(B), arguing the “improper benefit to be conferred” should not be Medicare’s total payments tied to his prescriptions. On appeal he refined the point: benefit should be net profit (after direct costs), and if impracticable to calculate, § 2B4.1 should default to the bribe amount.

The Eleventh Circuit did not resolve the interpretive dispute, invoking the harmless-error framework from United States v. Goldman (citing United States v. Keene): appellate courts need not decide a Guidelines issue when the district judge states the same sentence would be imposed regardless and the sentence is substantively reasonable. It evaluated substantive reasonableness against the hypothetical lower range and held the defendants failed to show unreasonableness.

The opinion also flagged a preservation problem: at sentencing Chun argued “no improper benefit” because prescriptions were medically necessary, not that profit must be used instead of revenue—narrowing the live issue on appeal.

IV. Precedents Cited (and Their Role)

• United States v. Simon: Provides the factual and procedural backdrop for the Insys bribery “speaker program” model; informs the narrative architecture of the case as part of a broader national scheme.
• United States v. Trujillo; United States v. Starr (citing Cavazos v. Smith); United States v. Browne: Set the sufficiency-of-the-evidence lens (de novo, view evidence favorably to verdict; verdict must be reasonable, not inevitable).
• United States v. Hasson; United States v. Pulido; United States v. Chandler: Provide conspiracy elements and proof principles (circumstantial agreement evidence is typical).
• United States v. Shah: Adopted to define the federal-program (“may be made”) element of Anti-Kickback offenses.
• United States v. Nerey (quoting United States v. Vernon): Supplies the Eleventh Circuit’s definition of “willfully” under the Anti-Kickback Statute.
• Vernon; United States v. Najjar: Anchor the holding that § 1320a-7b(3)(B) safe harbor is an affirmative defense and waived if not raised.
• United States v. Rodriguez; United States v. Lopez; United States v. Joyner; United States v. Frazier: Define the duty, discretion, and standard of review for responses to jury questions.
• United States v. Rivera-Santiago; Quercia v. United States: Used to frame the risk that judicial selection of evidence can usurp the jury’s fact-finding; distinguished on the facts.
• Access Now, Inc. v. Sw. Airlines Co.: Cited for waiver/forfeiture principles in appellate briefing (issues not properly presented are not considered).
• United States v. DeVegter: States typical standard of review for Guidelines interpretation (de novo) and factual findings (clear error), though not ultimately applied due to harmlessness.
• United States v. Goldman; United States v. Keene: Provide the harmless-error “same sentence + substantive reasonableness” doctrine.

V. Legal Reasoning (How the Court Reached Its Results)

The decision is best read as combining (1) a fact-heavy sufficiency affirmance with (2) two clarifying legal rulings that streamline future Anti-Kickback litigation: the federal-program element is satisfied by potential federal coverage, and the employee safe harbor is a waivable affirmative defense.

On sufficiency, the court emphasized the “business model” evidence: explicit quid pro quo testimony (“I needed him to write Subsys”), ROI metrics, volume-based speaker scheduling, and sham event features (lack of education, inappropriate attendees, forged sign-ins). It treated these as mutually reinforcing proof of both agreement and willful participation.

On jury notes, the court focused on a functional distinction: identifying or providing existing exhibits—without selective excerpting and with neutral caveats— does not cross the line into judicial fact-finding.

On sentencing, the court avoided a merits decision by relying on the district judge’s explicit alternative sentence and by finding the imposed sentences reasonable even under defendants’ proposed ranges.

VI. Impact

• Broader prosecutorial reach for Anti-Kickback cases: By adopting United States v. Shah, the Eleventh Circuit reduces the need to prove actual federal payment on particular claims—likely simplifying trials and insulating convictions from evidentiary attacks where Medicare participation is shown.
• Defense strategy and preservation: Treating the employee safe harbor as an affirmative defense heightens the importance of timely assertion, targeted jury instructions, and record development at trial; failure to raise it is fatal on appeal.
• Trial management guidance: The decision signals that courts may respond to deliberation questions by directing juries to complete exhibits with neutral language, while cautioning against curated excerpts that might implicitly resolve factual disputes.
• Sentencing appeals constrained by “same sentence” findings: The application of Goldman/Keene reinforces that a clearly stated alternative sentence can render Guidelines disputes practically non-dispositive unless a defendant can show substantive unreasonableness.

VII. Complex Concepts Simplified

• Anti-Kickback Statute (AKS): A federal law that makes it a felony to pay or receive anything of value (money, fees, perks) in exchange for referrals or for ordering/recommending items or services paid for by federal healthcare programs (like Medicare).
• “Speaker program” kickbacks: Payments labeled as education/marketing honoraria that, in reality, function as rewards for prescribing a drug.
• “May be made” element: Under this opinion, the government does not need to prove Medicare actually paid for a particular prescription; it is enough that the prescriptions could be federally reimbursed (e.g., the doctor treats Medicare patients).
• Willfulness (in this context): Acting deliberately to do what the law forbids—here, accepting/paying money in exchange for prescribing decisions.
• Affirmative defense (safe harbor): A protection a defendant must raise and prove (or at least properly put in issue); if not raised at trial, it is generally lost on appeal.
• Rule 29 motion for judgment of acquittal: A request that the judge overturn the case because no reasonable jury could find guilt beyond a reasonable doubt.
• Harmless Guidelines error (“same sentence” doctrine): Even if the Guidelines were miscalculated, an appellate court may affirm if the judge would impose the same sentence anyway and that sentence is reasonable.

VIII. Conclusion

United States v. Steven Chun affirms convictions stemming from the Insys Subsys bribery scheme and, more importantly, announces two practical rules for Anti-Kickback litigation in the Eleventh Circuit: (1) the AKS federal-program nexus is satisfied by the possibility of federal reimbursement (adopting United States v. Shah), and (2) the AKS employee safe harbor is an affirmative defense that is waived if not raised at trial (following Vernon and United States v. Najjar). Coupled with a deferential approach to sufficiency review and the Goldman/Keene harmless-error framework at sentencing, the opinion strengthens the durability of AKS prosecutions and clarifies the procedural burdens defendants must meet to preserve key defenses.