Shapiro Arato Bach Wins Appeal Of 144-Month Sentence And More Than $300 Million In Financial Penalties In Fraud Case
On August 29, 2025, the United States Court of Appeals for the Second Circuit vacated the 144-month sentence of our client Mathew James along with a forfeiture order of $63,382,049.02 and a restitution order of $336,966,416.85. Mr. James was the owner of a medical billing business who was charged and convicted in a scheme to defraud insurance companies. On his appeal, we argued that during his sentencing proceeding—which resulted in a gargantuan sentence and financial penalties—the district court committed multiple errors. The Second Circuit agreed. Addressing an issue of “first impression among the Courts of Appeals,” the Court held that the district court committed error by using the potential availability of First Step Act credits as a stand-alone factor to lengthen Mr. James’s sentence. The Court also held that the district court improperly relied on the possibility of a reduced sentence for participating in a rehabilitation program to lengthen Mr. James’s sentence and made critical errors in calculating the Sentencing Guidelines. The Court held that the district court had failed to offer “adequate justification for the forfeiture amount … in light of the evidence justifying a much lower amount of gain traceable to [the] fraud.” Finally, the Court held that the government’s restitution “methodology appears marred by serious flaws that undermine our confidence in the causal connection between James’s conduct and the … final restitution amount.” The Court remanded for resentencing.
Partner Julian Brod argued the appeal and authored the briefs along with Alexandra Shapiro and Eric Hintz. The opinion in United States v. James can be found here, and the Second Circuit briefs and oral argument audio can be found here, here, and here. Media coverage of the decision can be found here.