A former Billings neurosurgeon has been sentenced to two years in federal prison for trying to hide assets during bankruptcy proceedings after he was sued for medical malpractice.
John Henry Schneider was also sentenced to three years of supervised release and $308,945 in restitution by Judge Susan Watters in U.S. District Court in Billings on Wednesday.
Schneider pleaded guilty earlier this year to a single count of concealing bankruptcy assets after he hid a bank account containing $309,686 from the U.S. trustee in the case. Under the plea agreement, prosecutors dropped four other charges against the doctor.
The bankruptcy proceedings stemmed from nearly $12 million in claims that had been filed against Schneider. In addition to former patients alleging medical malpractice, claimants included former business partners.
One of the claims was filed by the family of Russell Monaco, a Billings man who died at age 47 in 2011 from an overdose of painkillers after Schneider had performed back surgery on him in Cody, Wyoming. Monaco’s family had filed a $2 million claim against Schneider.
The sentence followed the recommendation of assistant U.S. Attorney Colin Rubich. Schneider's attorney had requested only supervised release, with no prison time.
"Harm in this case is greater than the harm might be in a typical bankruptcy case where the assets are concealed," Watters said.
Russell Monaco's mother, Judy Monaco, initiated the family's malpractice lawsuit against Schneider and spoke at his sentencing. Afterward, she said she was glad the judge had accepted the prosecution's recommendation, but would have still liked to see him serve more time.
"It's better than nothing," Judy Monaco said. "I'm disappointed that this was all about the money and my son's life basically meant nothing in there. He was a good boy."
Russell Monaco's daughter, Mallory Monaco, also spoke before the sentence was pronounced. Shaking with sobs as she spoke, she expressed her fear that as time elapses after her father's death, she will "forget the little memories I cherish."
Schneider told Watters his financial crimes were in the midst of a difficult time for him and his family, and that he had since begun working toward a new career in conflict resolution, drawing from his personal experiences.
"I can't undo the harm that I've caused the people that I care about," he said. "If anything, your honor, my life is a cautionary tale and I share it openly."
Schneider had sought to bolster the argument that he was a changed man by offering an initial payment of $35,000 toward the restitution. As she explained her sentence, Watters took issue with that sum and noted that he had transferred his $2 million home out of his possession, making it unavailable to Monaco's family through the bankruptcy proceedings.
"You could have the means by which to come in here and pay your restitution in full and really demonstrate, in good faith, how remorseful you are," Watters said. Referring to more routine criminals she has previously sentenced, she added, "They seem to understand what they've done and how they've negatively impacted their community. I don't really get that feeling from you, Dr. Schneider."
Until late last year, Schneider was working at the Veterans Affairs Medical Center in Iowa City, Iowa, despite disclosing on his application that he’d had medical malpractice problems in the past.
USA Today reported on Schneider’s professional history and the history of others at the facility, including some with felony convictions.
Facing termination, he resigned from the VA Nov. 29, 2017.