By Nate Raymond
Aug 27 (Reuters) - A federal judge has recused herself from a criminal case involving a scheme to sell counterfeit HIV drugs on the black market after her financial advisor bought more than $1,000 in shares of one of the victims, Gilead Sciences GILD.O, without her knowledge.
Manhattan-based U.S. District Judge Mary Kay Vyskocil in a Tuesday order said she had been impartially presiding over the 11-defendant criminal case for more than two years when she learned in June that her financial advisor had bought Gilead stock for her brokerage account.
Congress toughened financial disclosure requirements for judges in 2022 through the Courthouse Ethics and Transparency Act after the Wall Street Journal reported that more than 130 judges had failed to recuse themselves from cases involving companies in which they or their family members owned stock.
Vyskocil said that when she got to know of the trading, she immediately instructed her advisor to void the stock purchases, knowing Gilead had been seeking to have her award it restitution by some of the defendants.
The judge then disclosed the trades worth $1,103 to the parties, prompting a call by one of the defendants, Juan Hernandez, for her to step aside from the case. Hernandez has been asking Vyskocil to reconsider her initial decision to order him to pay Gilead $2.38 million in restitution.
Hernandez was sentenced to two years in prison in April after pleading guilty to his role in a scheme that defrauded Medicaid, Medicare, and private insurers out of at least $20 million through trafficking in black-market HIV medication.
Gilead, whose drugs include the HIV medications Truvada and Descovy, in court papers said a significant portion of the HIV medications that became a focal point of the scheme were Gilead-branded ones, jeopardizing patient safety and causing it to lose sales of authentic pharmaceutical products.
"The Court is firmly of the view that my impartiality cannot be questioned," Vyskocil said.
But while the judge said she acted quickly to divest herself of the shares and disclosed what occurred, she was cognizant that a federal law requiring judges to step aside when their impartiality might reasonably be questioned "is not about the reality, but any possible appearance of impartiality."
"I am concerned that the confidence in the fair administration of justice not be undermined," she said.
Steve Zissou, Herndandez's lawyer, did not have an immediate comment. Representatives for Gilead and Manhattan U.S. Attorney Jay Clayton did not immediately respond to requests for comment.
The 2022 financial disclosure law requires judges to report any stock trades of more than $1,000 within 45 days, rather than just in their annual disclosure reports.
Reports, including the annual financial disclosures judges already were required to submit, were also required to be posted publicly on an online database.
The case is U.S. v. Hernandez, U.S. District Court for the Southern District of New York, No. 23-cr-00110.
For the United States: Jackie Delligatti and Jeffrey Coyle of the U.S. Attorney's Office for the Southern District of New York
For Hernandez: Steve Zissou
Read more:
Delays plague US judiciary's financial disclosure database
U.S. judiciary launches online database of judges' financial disclosures
Congress approves tougher financial disclosure rules for U.S. judges