United States v. Cooper, 38 F.4th 428

Background

John Paul Cooper co-owned CMGRX, which recruited TRICARE beneficiaries to sign up for a sham “study,” paid them $250 per prescription, obtained doctor-signed pre-filled prescriptions, and routed prescriptions to pharmacies that billed TRICARE and kicked back money to CMGRX.
Cooper participated in recruiting doctors, pharmacies, setting kickback amounts, funding a nonprofit that paid participants, overseeing formulas, and sharing profits.
A grand jury indicted Cooper on multiple counts: Count 1 (conspiracy to commit health-care fraud), Count 18 (receiving illegal kickbacks), and Counts 35–40 (paying illegal kickbacks to beneficiaries), among others; he was convicted on Count 1, Count 18, and Counts 35–40 and sentenced to 240 months.
On appeal Cooper challenged statutory construction (meaning of “refer”), sufficiency of evidence for paying kickbacks to beneficiaries, jury instruction responses, whether an LLC qualifies as a “person,” and forfeiture procedure compliance.
The Fifth Circuit reversed Counts 35–40 (payments to beneficiaries), affirmed Count 1 (conspiracy) and Count 18 (receiving kickbacks from Dandy Drug, an LLC), and remanded for resentencing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether payments to beneficiaries convicted under 42 U.S.C. §1320a-7b(b)(2)(A) (paying to induce “refer”)	Government: payments induced beneficiaries to self-refer to doctors/pharmacies; statute covers self-referrals	Cooper: “refer” requires inducing a person to refer another person (not self-referral); evidence insufficient	Reversed Counts 35–40. Court held §1320a-7b(b)(2)(A) does not, as applied, cover these payments; beneficiaries did not refer others and had no control; ambiguous reading resolved for defendant by rule of lenity.
Whether conspiracy conviction (Count 1) depends on the flawed kickback convictions	Government: conspiracy proved by agreement to defraud TRICARE independent of kickback statutory proofs	Cooper: conspiracy was predicated on illegal-kickback violations so reversal of those requires reversing conspiracy	Affirmed conviction for conspiracy. Conspiracy charged and proved under health-care fraud statutes, independent of substantive kickback offenses.
Whether Count 18 convicting Cooper of receiving kickbacks from Dandy (an LLC) is valid	Government: LLCs are covered as “person” under anti-kickback statute (broad reading)	Cooper: statutory definition does not enumerate LLCs, so not a covered “person”	Affirmed Count 18. Court held “person” and “corporation” may be read broadly to encompass LLCs.
Whether district court abused discretion in answering jury notes about whether a prescription sent to a pharmacy could be a “referral”	Government: court’s answers were accurate and left ultimate factfinding to jury	Cooper: court’s responses improperly suggested referrals existed or biased jury	No abuse of discretion. Court correctly told jury scenarios could be referrals and that jury must decide based on evidence and instructions.
Whether Cooper can challenge civil forfeiture compliance under 18 U.S.C. §983	Government: Cooper waived challenges by stipulation; alternatively plain-error review fails	Cooper: government failed statutory forfeiture procedures	Waived. Cooper expressly stipulated and waived rights to contest forfeiture; appellate challenge barred.

Key Cases Cited

United States v. Miles, 360 F.3d 472 (5th Cir. 2004) (interpreting anti‑kickback provision as targeting payments to induce an individual to refer another party)
United States v. Ricard, 922 F.3d 639 (5th Cir. 2019) (treating referral language in anti‑kickback context consistently with Miles)
United States v. Ceasar, 30 F.4th 497 (5th Cir. 2022) (refusing to interpret one statutory part in a way that renders another part ineffective)
United States v. Patel, 778 F.3d 607 (7th Cir. 2015) (discussing expansive medical meaning of “referral”)
United States v. Kaluza, 780 F.3d 647 (5th Cir. 2015) (applying the rule of lenity where a criminal statute is ambiguous)
Puckett v. United States, 556 U.S. 129 (2009) (articulating the plain‑error standard for unpreserved claims)
Blockburger v. United States, 284 U.S. 299 (1932) (same‑elements test for double jeopardy analysis)
United States v. Olano, 507 U.S. 725 (1993) (waiver and intentional relinquishment of known rights)
United States v. Daniels, 930 F.3d 393 (5th Cir. 2019) (standard for reviewing sufficiency‑of‑the‑evidence challenges)
United States v. Williams, 602 F.3d 313 (5th Cir. 2010) (statutory interpretation reviewed de novo)