Howard Thomas Douglas v. State
03-14-00605-CR
| Tex. App. | Aug 28, 2015Background
- Appellant Howard Douglas was indicted and convicted for securing execution of a document by deception (Tex. Penal Code §32.46) based on billing for Functional Capacity Evaluations (FCEs) and submission of Form 1500s to Texas Mutual Insurance Company (TMIC).
- Douglas ran North Texas Medical Evaluators (NTME) and created Marconi Physical Performance Testing; employees testified Douglas required FCEs for every patient and directed billing each FCE at 16 units (four hours) regardless of actual time.
- Technicians and patients uniformly testified actual FCEs lasted roughly 10–40 minutes (undercover FCE lasted ~18 minutes), yet NTME/Marconi submitted CMS/HCFA 1500 claim forms reporting 16 units; some billings overlapped and were for facilities rented far shorter than four hours.
- TMIC’s data‑mining and undercover investigation produced documentary and recorded evidence; TMIC computed overpayments ranging roughly $61k–$81k depending on credit assumptions and denied the bills; a jury convicted and the trial court assessed five years’ confinement.
- On appeal Douglas challenged (1) legal sufficiency as to intent, deception, and pecuniary‑value threshold and (2) exclusion of evidence that TMIC funded the DA’s Workers’ Comp Fraud Unit.
Issues
| Issue | Plaintiff's Argument (State) | Defendant's Argument (Douglas) | Held |
|---|---|---|---|
| Legal sufficiency — intent to defraud/harm | Evidence of systematic billing practices, directives to staff, creation of Marconi after denials, and undercover/employee testimony supports inference of intent to defraud TMIC | Douglas argued he believed he legitimately billed compensable time and thus lacked criminal intent | Court: Evidence legally sufficient; jury reasonably inferred intent from acts and circumstances |
| Legal sufficiency — deception (causing execution of document) | Claim forms (CMS/HCFA 1500) contained false facts about services/time; submission caused TMIC to pay — satisfies deception and causation elements | Douglas contested that State failed to show TMIC would not have executed payments but for his conduct | Court: Submission of false claim forms and resulting payments support finding of deception and causation |
| Jurisdictional pecuniary‑value threshold | TMIC’s calculated overpayments (full 16‑unit billing or after credits) exceed $20,000; segregation not required because each claim contained false information | Douglas urged segregation of legitimate vs fraudulent portions to reduce aggregate value below felony range | Court: Even with credits, pecuniary loss fell within third‑degree felony range; sufficiency on value upheld |
| Exclusion of evidence re: TMIC funding DA fraud unit (relevance/bias) | State: Funding irrelevant to defendant’s guilt; trial court didn’t abuse discretion excluding it; appellant failed to preserve alternative grounds | Douglas argued funding was relevant/exculpatory (conflict of interest, motive) and disclosure timeliness | Court: Error not preserved for some appellate arguments; trial court did not abuse discretion — funding was not sufficiently relevant and exclusion was proper under Rule 403 grounds |
Key Cases Cited
- Jackson v. Virginia, 443 U.S. 307 (1979) (standard for reviewing sufficiency of the evidence)
- McCain v. State, 22 S.W.3d 497 (Tex. Crim. App. 2000) (evidence reviewed in light most favorable to verdict)
- Hooper v. State, 214 S.W.3d 9 (Tex. Crim. App. 2007) (cumulative force of circumstances can support conviction)
- Goldstein v. State, 803 S.W.2d 771 (Tex. App.—Dallas 1991) (intent to defraud/harm is inferred from facts and circumstances in §32.46 cases)
- Gollihar v. State, 46 S.W.3d 243 (Tex. Crim. App. 2001) (variance doctrine between indictment and proof)
- Mills v. State, 722 S.W.2d 411 (Tex. Crim. App. 1986) (§32.46 intended to proscribe deceptive conduct)