3:23-cr-00010
W.D. Wis.Sep 3, 2024Background
- Kevin Breslin and KBWB Operations LLC (d/b/a Atrium Health and Senior Living) were indicted on 12 counts involving an alleged scheme to unlawfully extract over $37 million from 33 facilities across Wisconsin and Michigan.
- The indictment charges include health care fraud (Count 1), mail and wire fraud (Counts 2-10), a Klein conspiracy to defraud the IRS (Count 11), and a conspiracy to commit money laundering (Count 12).
- Defendants filed motions to dismiss: (1) Counts 2-10 as duplicitous; (2) Counts 11 and 12 for failing to allege a conspiracy; and (3) Count 12 separately on duplicity grounds.
- The court found that the mail and wire fraud charges, while awkwardly drafted, sufficiently allege a single scheme, but that the allegations concerning fraud on state taxing authorities (Paragraphs 54-55) only plead tax evasion, not fraud.
- The conspiracy charges (Counts 11 and 12) allege only Breslin and his wholly owned company conspired; court questioned whether a conspiracy can exist without at least one other human co-conspirator.
- The court ordered the government to identify other coconspirators or face dismissal of the conspiracy counts, and struck certain paragraphs from the fraud counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Counts 2-10 (mail/wire fraud) duplicitous? | Single overarching scheme with four intertwined objectives. | Four different fraud schemes must be separately charged; tax allegations are just tax evasion. | Not duplicitous as to first three schemes. Strikes Paragraphs 54-55 (state tax fraud) from counts. |
| Do Counts 11-12 allege a valid conspiracy? | Intracorporate conspiracy doctrine does not apply; can conspire with own company. | A person cannot conspire with himself or his own solely owned corporation; need more than one human actor. | Must be at least one other non-corporate co-conspirator; gov't must identify or counts are dismissed. |
| Is Count 12 (money laundering conspiracy) duplicitous? | Charges a single conspiracy with two intertwined objectives legit under conspiracy law. | Two different conspiracies improperly joined in one count; penalties differ for the statutes invoked. | Not duplicitous; verdict form/special questions can address penalty distinctions. |
| Should defendants get a bill of particulars? | Not necessary due to extensive discovery; Rule 7(f) 14-day limit invoked. | Needed to identify alleged coconspirators and adequately prepare a defense. | Government ordered to provide bill of particulars listing coconspirators. |
Key Cases Cited
- United States v. Lee, 77 F.4th 565 (7th Cir. 2024) (defines when multiple acts constitute a single scheme and when a count is duplicitous)
- United States v. Davis, 471 F.3d 783 (7th Cir. 2006) (an indictment may allege an ongoing, continuous fraud scheme using different methods without becoming duplicitous)
- United States v. Zeidman, 540 F.2d 314 (7th Cir. 1976) (multiple acts in a single count may be permissible when there is a close nexus)
- United States v. Braverman, 317 U.S. 49 (1942) (a single conspiracy can have multiple criminal objectives without requiring separate counts)