MEMORANDUM & ORDER On March 16, 2023, Vladislav Kotlyar (“Defendant”) waived indictment and pled guilty to the sole count of an Information, charging him with mail fraud, in violation of 18 U.S.C. §§1341 and 2. Plea Agreement 1, ECF No. 12; Information, ECF No. 7. The Court now sentences Defendant and provides a complete statement of reasons pursuant to 18 U.S.C. §3553(c)(2) of those factors set forth by Congress in 18 U.S.C. §3553(a). For the reasons set forth below, Defendant is hereby sentenced to 33 months of custody, to be followed by two years of supervised release with standard and special conditions, forfeiture in the amount of $932,789.00 as set forth in the Order of Forfeiture, ECF No. 14, restitution in the amount of $738,724.30 as set forth in the Order of Restitution, ECF No. 32, and payment of the mandatory special assessment of $100.00. I. BACKGROUND On March 16, 2023, the United States filed an Information alleging Defendant, together with others, submitted and caused to be submitted forged prescriptions and medical records for specialty baby formula to a pharmacy and national distributor of medical supplies between March 2019 and October 2022. Information 10; Presentence Investigation Report (“PSR”) 4, ECF No. 15. To effectuate the scheme, Defendant obtained the medical records and prescriptions of infants requiring specialty formula due to allergies and food sensitives, and used that information to forge signatures and other prescription information. PSR 5. Once Defendant submitted these forged prescriptions and medical records, pharmacies and distributors then shipped specialty baby formula to Defendant and others involved in the offense via private and commercial interstate carriers. Id.
4-6. After the baby formula was delivered, Defendant contacted the distributors to report various fabricated issues with the shipments. Id. 8. Defendant represented himself as the father of the infants and used their names. Id. The distributors would then ship replacement formula at no cost, after which Defendant sold the fraudulently obtained formula for personal profit. Id. As the Government notes, Defendant undertook this scheme at time when the “United States experienced a national shortage on baby formula, leading to the President invoking the Defense Production Act to increase national supply.” Government Sentencing Memorandum (“Gov’t Mem.”) at 2, ECF Nos. 30, 31. Using this scheme, Defendant caused a private health insurance provider to be billed $1,500,000.00 in fraudulently obtained claims for specialty baby formula between March 2019 and April 2022. PSR 9. As part of the plea agreement, Defendant stipulated to an intended loss amount of more than $1,500,00.00. Id.; Plea Agreement 2. Between December 2019 and October 2022, Defendant caused one medical supply distributor to bill insurers approximately $434,000.00, and another to ship $175,000.00 worth of formula at no cost. PSR 10. Defendant also stipulated in the plea agreement to an actual loss of more than $550,000.00, although the actual loss is unknown. Id.; Plea Agreement 2. On March 16, 2023, Defendant self-surrendered to plead guilty to the Information. PSR 11. As part of his plea agreement, Defendant agreed not to appeal or otherwise challenge his sentence or conviction if the Court imposes a sentence at or below 46 months of imprisonment. Plea Agreement 4. II. LEGAL STANDARD 18 U.S.C. §3553 outlines the procedures for imposing sentence in a criminal case. The “starting point and the initial benchmark” in evaluating a criminal sentence is the Guidelines sentencing range. Gall v. United States, 552 U.S. 38, 49 (2007). If and when a district court chooses to impose a sentence outside of the Sentencing Guidelines range, the court “shall state in open court the reasons for its imposition of the particular sentence, and…the specific reason for the imposition of a sentence different from that described” in the Guidelines. 18 U.S.C. §3553(c)(2). The court must also “state[] with specificity” its reasons for so departing “in a statement of reasons form.” Id. “The sentencing court’s written statement of reasons shall be a simple, fact-specific statement explaining why the guidelines range did not account for a specific factor or factors under §3553(a).” United States v. Davis, 08-CR-0332, 2010 WL 1221709, at *1 (E.D.N.Y. Mar. 29, 2010) (Weinstein, J.). Section 3553(a) provides a set of seven factors for the Court to consider in determining what sentence to impose on a criminal defendant. The Court addresses each in turn. III. ANALYSIS A. The Nature and Circumstances of the Offense and the History and Characteristics of Defendant The first §3553(a) factor requires the Court to evaluate “the nature and circumstances of the offense and the history and characteristics of the defendant.” 18 U.S.C. §3553(a)(1). 1. Family and Personal Background Defendant was born on February 14, 1979 in Kyiv, Ukraine to Arkaidy and Alia Kotlyar. PSR 34. Defendant’s parents divorced when he was three years old and Defendant has had no contact with his father since childhood. Id.
