United States v. Dana Kidd, Jr., 963 F.3d 742

Background

Adam Burke, a licensed chiropractor in Minnesota, treated primarily auto-accident patients reimbursed under the state No‑Fault Insurance Act (medical benefits up to $20,000).
Minnesota law criminalizes employing "runners" to solicit auto‑accident patients and provides that charges for services rendered to patients procured by runners are noncompensable.
Burke paid runners (including Ibrahim, Kidd, and Omar) large sums per patient, coached them to recruit and re‑engage patients, and instructed patients not to disclose recruitment to insurers.
To conceal runner payments, Burke and the runners created sham consulting/marketing companies, bogus contracts, and fake invoices; undercover agents (posing as accident victims) received treatment and generated billings submitted to insurers.
A jury convicted Burke, Ibrahim, and Kidd of conspiracy to commit mail fraud and multiple counts of mail fraud; sentences were affirmed (Burke 90 months, Kidd 24 months, Ibrahim 300 days).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency — materiality of concealing runner payments	Concealment of runner payments was material because it tended to influence insurers to investigate or deny claims.	Concealment was immaterial because insurers still could learn facts or because services were medically necessary.	Evidence sufficient: knowledge of runners would influence insurers (investigation/denial) and runner‑procured services are noncompensable under state law.
Statutory conflict — No‑Fault benefits vs. anti‑runner noncompensability	Noncompensability in the anti‑runner statute governs; specific later statutory scheme trumps general provision.	No‑Fault "notwithstanding" clause and benefits entitlement preclude denying compensation for runner‑procured services.	Court: provisions are reconcilable; the specific anti‑runner noncompensability applies to services procured by runners.
Indictment surplusage / failure to allege conspiracy	References to the anti‑runner statute were prejudicial and could lead to conviction for state law violations; indictment failed to allege conspiracy properly.	Statute references were contextually relevant to motive and materiality; indictment adequately alleged agreement to a scheme to defraud.	Denial affirmed: references were admissible context; indictment sufficiently alleged conspiracy.
Jury instructions — materiality and omission language	Defense: court should have instructed that runner payments are immaterial if treatment was reasonable/medically necessary; omission language allowed conviction for mere nondisclosure.	Prosecution: runner use is material because it renders services noncompensable; instructions made clear concealment requires more than silence.	Court: refused proposed medical‑necessity instruction (misstated law); instruction on omissions read as whole was adequate or harmless given strong evidence of active concealment.
Prosecutorial misconduct (rebuttal)	Prosecutor’s remarks misstated shifting defenses and improperly referenced co‑defendant’s guilty plea/testimony, warranting new trial.	Remarks addressed defense inconsistency and co‑conspirator testimony; jury instructions prevented burden shifting or inference from silence.	No reversible misconduct: comments permissible, not prejudicial; no burden shift; no plain error.
Sentencing — loss calculation & obstruction	Government: intended loss includes all insurer billings for runner‑procured patients; Perjury enhancement appropriate for Burke.	Burke: court erred by including amounts for medically necessary services and by finding perjury for obstruction.	Court: included billed amounts (services noncompensable if procured by runners); perjury finding supported by record; guideline adjustments affirmed.

Key Cases Cited

United States v. Onwumere, 530 F.3d 651 (8th Cir. 2008) (scheme‑to‑defraud standard)
United States v. Steffen, 687 F.3d 1104 (8th Cir. 2012) (concealment and materiality in fraud cases)
Neder v. United States, 527 U.S. 1 (1999) (definition of materiality)
RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639 (2012) (specific statutory provision over general)
Cisneros v. Alpine Ridge Group, 508 U.S. 10 (1993) ("notwithstanding" clauses and statutory context)
Davis v. Michigan Dept. of Treasury, 489 U.S. 803 (1989) (statutory construction and reading provisos in context)
United States v. Jain, 93 F.3d 436 (8th Cir. 1996) (distinguishing honest‑services theory and intent)
United States v. McMillan, 600 F.3d 434 (5th Cir. 2010) (scheme to defraud does not require direct false statements to victim)
United States v. Kennedy, 64 F.3d 1465 (10th Cir. 1995) (mail fraud elements and scheme focus)
United States v. Dunnigan, 507 U.S. 87 (1993) (perjury standard for sentencing enhancements)
United States v. Novak, 476 F.3d 1041 (9th Cir. 2007) (reading statutory provisions in context)