United States v. Carlos Luna
968 F.3d 922
| 8th Cir. | 2020Background
- Minnesota No‑Fault Act requires insurers to pay up to $20,000 per person for "reasonable" and "necessary" medical expenses after auto accidents; state law also limits direct solicitation and bars use of paid "runners."
- Comprehensive Rehab Centers of Minnesota (co‑owned by Drs. Preston Forthun and Darryl Humenny) used recruiters (including Carlos Luna and Abdisalan Hussein) who identified accident victims, provided transport, and facilitated cash kickbacks to patients and recruiters.
- Clinic treatment protocols were standardized and repeated to maximize sessions and exhaust policy limits; recruiters/coaches coached patients what to tell insurers and were paid in cash to avoid records.
- Operation Backcracker investigated the scheme; Humenny cooperated as a government witness; indictments charged mail and wire fraud, conspiracy, and aiding and abetting.
- Juries convicted Forthun, Luna, and Hussein; sentences: Forthun 60 months + restitution and forfeiture, Hussein 15 months + restitution, Luna time served. Appeals raised sufficiency of evidence and sentencing/restitution/forfeiture issues.
Issues
| Issue | Government's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a scheme to defraud (mail/wire fraud) | The clinic devised a deliberate plan to conceal use of recruiters/kickbacks and to mislead insurers to obtain payments; misrepresentations and active concealment were material and done to obtain payments | No cohesive scheme proved; withheld facts not material | Affirmed: sufficient evidence of a deliberate, material scheme to defraud insurers (convictions affirmed) |
| Liability of Luna & Hussein (accomplice/conspiracy) | Each recruited patients, paid/arranged kickbacks, coached patients, and thus knowingly participated in the scheme | They were mere recruiters with no knowledge or intent to defraud | Affirmed: evidence permitted inference they knowingly participated as accomplices and conspirators |
| Sentencing loss calculations and offsets (intended vs actual loss; fair‑market‑value credit) | Court reasonably estimated intended loss by number of recruited patients × average billed amount; actual loss used reimbursement rates | District court failed to offset for legitimately compensable, medically necessary services; overinclusive patient attribution and changing runner statute not considered | Vacated and remanded: district court must determine and apply appropriate offsets (medically necessary/compensable services and distinctions among types of recruiters) for restitution and sentencing calculations |
| Forfeiture amount and procedure | Forfeiture of gross proceeds is mandatory for federal health‑care offenses; reimbursements for all recruited patients are gross proceeds of the fraud | Some services were compensable so forfeiture amount is excessive; procedural waiver/timeliness challenges | Affirmed: government timely sought forfeiture and forfeiture of gross proceeds stands (no offset required for forfeiture) |
Key Cases Cited
- Neder v. United States, 527 U.S. 1 (Supreme Court 1999) (materiality element in fraud statutes)
- United States v. Kidd, 963 F.3d 742 (8th Cir. 2020) (runner statute and impact on compensability)
- United States v. Washington, 318 F.3d 845 (8th Cir. 2003) (standard for reviewing sufficiency of evidence)
- United States v. Whitehead, 176 F.3d 1030 (8th Cir. 1999) (definition of "scheme")
- United States v. Goodman, 984 F.2d 235 (8th Cir. 1993) (planning as evidence of scheme)
- United States v. Wells, 127 F.3d 739 (8th Cir. 1997) (intended loss definition for sentencing)
- United States v. Lamoreaux, 422 F.3d 750 (8th Cir. 2005) (reasonable loss estimates under Guidelines)
- United States v. Carpenter, 841 F.3d 1057 (8th Cir. 2016) (discretion in restitution calculations)
- United States v. Liveoak, 377 F.3d 859 (8th Cir. 2004) (credit for fair market value in loss calculations)
- United States v. Frazier, 651 F.3d 899 (8th Cir. 2011) (restitution must be compensatory and avoid windfalls)