TOPEKA — Foreign bank accounts, multiple passports and property throughout the United States and overseas were under inspection during a detention hearing for the Manhattan physician accused of authorizing illegal prescriptions to hundreds of patients.
Assistant U.S. Attorney Jared Maag argued Tuesday that Michael Schuster, 53, who ran Manhattan Pain and Spine, is too much of a flight-risk to be released on bond prior to his trial. The prosecutor called an FBI agent who is in charge of the case and an FBI asset forfeiture investigator to the stand to testify on the resources the now-suspended physician has outside of the state and country.
Schuster, whose clinic will officially close on May 31, is accused of authorizing illegal prescriptions to 540 patients between April 2007 and August 2012 by providing pre-signed prescription pads to his unlicensed staff for their use while Schuster was out of the country. He was arrested at the Manhattan Regional Airport following an FBI raid at his clinic, at 1135 Westport Drive, on April 23.
On Tuesday, FBI asset forfeiture investigator Emily Thompson testified that Schuster and his wife, Janet Immer, held three foreign bank accounts—two in Canada and one in Switzerland—in 2011, with a combined total of more than $1.3 million.
Thompson also said that according to financial documents filed by Schuster, a Canadian account had dropped from upwards of $400,000 to less than $3,000 between the fiscal years 2010 and 2011. She said it is not known where that money went.
Immer, who was called to the stand by Schuster’s attorney, Thomas Bath, testified that the couple held foreign accounts in order to pay taxes on overseas property, and, she said, because she is afraid to have money in only one account.
The asset forfeiture investigator and Immer also testified to the couple owning land, mostly vacant plots, in six states and properties in Canada, Argentina and Paraguay. Immer said about a month prior to the FBI raid at the clinic, the Schusters bought land in Paraguay where they intended to build a home. She said the couple’s daughter is attending school in the country and they have friends nearby.
Maag estimated the couple’s property net worth at $2 million.
But Immer testified there has been no misconduct regarding their foreign accounts and properties and said the couple only became aware of an investigation into Schuster’s clinic on the day of the raid.
In court, an FBI agent in charge of the case said Schuster is in possession of two passports; he applied for one in 2005 and the second in 2007. On an application for the 2007 passport, which was admitted as evidence to the court, Schuster claimed he had never applied for one in 2005, while the agent said Schuster also filed papers with the U.S. Department of State regarding a lost or stolen passport.
The agent claimed Schuster traveled on both passports, which generally expire after 10 years.
Immer told the court that she found the lost 2005 passport in a jacket pocket after searching her Manhattan home a couple of weeks ago. She said she gave that passport to Barry Clark, who jointly represents Schuster with Bath.
Immer said the couple would be willing to hand over all of the family’s passports, including their children’s, and put up their property as collateral in exchange for bond.
Immer told the court that she came to the United States from the former Soviet Union with her husband as political refugees in 1990, moving to Manhattan from New York for a position at Mercy Regional Health Center in 1994. She said she Americanized her name to Janet Schuster while going through the naturalization process, before changing her last name to Immer, she said, to honor a grandfather.
According to court testimony, the couple’s land is owned under various names including Janet Immer, Michael Schuster, Janet Schuster and Schuster Family LLC.
Magistrate Judge Gary Sebelius did not rule on the detention matter Tuesday, continuing the hearing to Thursday at the request of Bath. Schuster has pleaded not guilty to four counts charged against him following a grand jury’s return of indictment on May 1. Those counts are conspiracy to illegally distribute controlled substances, one count of unlawful distribution of controlled substances, one count of unlawfully distributing controlled substances to a person under 21 years old and one count of maintaining a premises in furtherance of unlawful drug distribution.
The grand jury had convened after Schuster waived his right to a preliminary hearing. The not guilty plea is automatic as magistrate judges do not have the authority to accept a guilty plea.
If convicted, the penalties for conspiracy, unlawful distribution of a controlled substance and unlawful distribution to a person under 21 are a maximum of 20 years and a fine up to $1 million. The penalty for maintaining a drug-involved premises is a maximum of 20 years and a fine of up to $500,000. But, officials said, if the alleged crimes are linked to any overdose deaths, the penalty would be at least 20 years.
The indictment also seeks the forfeiture of all the proceeds from the crimes.