Health Care Fraud Conspiracies that Overlap in Time, Place, Personnel, and Statutory Charge Don't Violate Double Jeopardy Since Government Sought to Punish Different Activity

United States v. Njoku, No. 12-20095 (5th Cir. Dec. 2, 2013) (Dennis, Clement, Southwick)

Four defendants were convicted on numerous counts related to committing health care fraud, receiving or paying healthcare kickbacks, and/or making false statements for use in determining rights Medicare benefits and payments.  The panel affirms the convictions and sentences but remands to the district court to amend Njoku’s written sentence of 63 months to conform with the oral sentence of 60 months.

The panel finds the Government presented sufficient evidence that Njoku knew of the unlawful purpose of both the health care fraud conspiracy and the kickback conspiracy and that she joined in those agreements willfully.  She also challenges the two conspiracy counts as multiplicitous.  (Since she did not object to the indictment as multiplicitous, the convictions stand but the sentences can be challenged under plain error review.)  Njoku argues that her health care fraud conspiracy conviction was based entirely on proof of the kickback conspiracy, so the kickback conspiracy is a lesser included of the health care fraud conspiracy.  The panel disagrees, noting that one conspiracy is under 18 U.S.C. § 1349 (proof of conspiracy to commit fraud and that fraud is the object of the conspiracy) and the other under 18 U.S.C. § 371 (proof of conspiracy against United States and the commission of an overt act).  Further, the indictment described the unlawful purpose of the health care conspiracy as the receipt of kickbacks in addition to the submission of fraudulent claims to Medicare.

Defendant Ellis challenges her trial on the of conspiracy to commit health care fraud as violating the Double Jeopardy Clause because she was acquitted of a conspiracy to commit health care fraud after a trial by jury prior to the instant indictment.  The first indictment focused on her activity as a recruiter and the other focused on her falsification of nursing notes and medical certifications.  Since she established a prima facie nonfrivolous double jeopardy claim, the Government bears the burden to prove by a preponderance of the evidence that she was charged in separate conspiracies.  The panel undertakes the five-prong test to determine whether there were two agreements and conspiracies.  It concludes that “the time, statutory offenses, and places involved suggest that there was one agreement.  Nevertheless, . . . two agreements and two conspiracies existed because of the separate functions that central co-conspirators provided in each scheme and the distinctive activity that the Government sought to punish in each case.” 

Ellis also argues that in her acquittal of the first charged conspiracy, the jury necessarily determined that she did not know her paid referrals were illegal, which she argues would bar any subsequent prosecution on whether she willfully received kickbacks.  The panel finds that the first jury could have based the acquittal either on Ellis not knowing that the paid referrals were illegal or on her not intending to further the unlawful purpose as charged in the indictment.  Since the jury did not have to necessarily find that she did not know the referrals were illegal, she was not twice put in jeopardy.

During trial, Ellis sought to introduce portions of testimony by a person, Clifford Ubani, who testified in the first trial that he never agreed with Ellis to do something unlawful but invoked his right against self-incrimination in the second trial.  The district court excluded this evidence finding its admission would require the admission of additional evidence in order to explain the statement in the proper context and would be more misleading or confusing than probative.  The panel also rejects Ellis’s argument that the district court’s ruling violated her Sixth Amendment right to present a complete defense.

With regard to sentencing, the panel affirms the loss amount calculated for Ellis, finding that the Government presented reliable evidence of actual loss and the district court properly considered Ellis’s contrary evidence.  The panel also affirms Ezinne Ubani’s enhancements as a manager/supervisor and abuse of trust, noting that “Medicare invests an important trust in RNs who complete OASIS questionnaires and certify plans of care for initial episodes of care and recertifications . . . .”

Each Receipt of Money Is Separate Offense Under 18 U.S.C. § 641

United States v. Reagan, No. 08-11006 (5th Cir. Feb. 4, 2010) (King, Barksdale, Elrod)

Ever wondered what the unit of prosecution is under the theft of public money statute, 18 U.S.C. § 641? Then read on.

Reagan was charged under 18 U.S.C. § 641 for improperly receiving $41,832 over five years in Section 8 program payments from the Dallas Housing Authority (DHA), which administers funding provided by the Department of Housing and Urban Development (HUD). The Section 8 program subsidizes rent for low income persons. Reagan jointly owned a residential property with his wife, Debra Kirvin, and, in 2002, leased this property to his wife’s mother, Leatha Kervin, a participant in the Section 8 program. One of the documents that Reagan signed and filed with the DHA to initiate Section 8 benefits included the disclaimer that “the owner (including a principal or other interested party) is not the parent, child, grandparent, sister, or brother of any member of the family.” In another document signed and filed with the DHA, Reagan similarly promised that he had “no blood, marital or other familial relationship” with the Section 8 recipient. Reagan received monthly checks from the DHA from March 2002 until September 2007, when his relationship to Leatha Kervin was discovered. Reagan was charged under § 641 with five counts of receipt of public funds, one count for each year that he received monthly Section 8 payments.

Reagan was convicted of all five counts. On appeal he argued "that the indictment was multiplicitous because although it charged five separate offenses, all 'stem[med] from a single fraudulent ac[t] in the first year.'" The Government, as you might imagine, argued that multiple counts were appropriate because Reagan violated § 641 each time he received a payment.

As multiplicity mavens know well, the the question boils down to the unit of prosecution for the offense, which depends on what the statute says.

Section 641 penalizes “[w]hoever embezzles, steals, purloins, or knowingly converts to his use or the use of another . . . any record, voucher, money, or thing of value of the United States.” 18 U.S.C. § 641. No case has been reported discussing the “allowable unit of prosecution” under § 641. Courts interpreting similarly-worded statutes, however, have concluded that each distinct taking of funds constitutes a separate violation under the statute.

Like those other statutes,

§ 641 punishes “[w]hoever embezzles, steals, purloins or knowingly converts to his use . . . any record, voucher, money, or thing of value of the United States.” 18 U.S.C. § 641 (emphases added). Accordingly, we hold that the “allowable unit of prosecution” under § 641 is each individual transaction in which government money is received, even if the transaction is part of an overarching scheme. Reagan violated § 641 each time he converted a HUD check. The five counts against Reagan therefore were not multiplicitous.

Reagan raised a couple of other challenges to his conviction, but the court declined to address them:

Reagan, who is represented by appointed counsel, does nothing beyond listing these points of error—he offers no further arguments or explanation. This is a failure to brief and constitutes waiver.

* * *

Reagan does not provide citations to any evidence in the record to support his claim. By failing to do so, Reagan has failed to show a “sufficient evidentiary foundation” for the requested instruction and therefore cannot establish abuse of discretion. This is also a failure to brief.

* * *

Reagan argues that “[t]he law favors cautioning jurors under such circumstances to take the testimony of the hostile, accomplice witness with a grain of salt,” but offers no further legal analysis.

Ouch.