United States v. George D. Houser
754 F.3d 1335
11th Cir.2014Background
- George D. Houser controlled three Medicare/Medicaid-certified nursing homes (Mount Berry, Moran Lake, Wildwood) from 2003–2007 through Forum Healthcare Group; his then-girlfriend (later wife) Rhonda Washington Houser was nominally involved.
- The facilities experienced pervasive, documented deficits: unpaid vendors, leaking roofs, infestation, lack of medications, missed dialysis and lab services, inadequate food, understaffing, and failure to maintain resident records.
- Medicare/Medicaid paid FHG about $32.9 million; the district court found millions were diverted to Houser and related entities/personal purchases.
- Houser withheld payroll taxes and failed to timely file personal tax returns for 2004 and 2005; IRS investigations and a search warrant followed.
- Indictment: Count 1—conspiracy to commit health care fraud (18 U.S.C. § 1349/§ 1347); Counts 2–9—willful failure to pay withheld payroll taxes (26 U.S.C. § 7202); Counts 10–11—failure to file income tax returns (26 U.S.C. § 7203).
- After a four-week bench trial the district court convicted Houser on all counts, sentenced him to 240 months total, ordered roughly $6.74 million restitution to Medicare/Medicaid and ~$872,000 to the IRS, and entered forfeiture; the Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Houser) | Held |
|---|---|---|---|
| Whether submission of claims for "worthless services" supports conviction under §1347/§1349 | Government: claims submitted for services not provided or so deficient they were worthless; defendant knowingly caused false claims | Houser: "worthless services" concept is vague / inapplicable; billing is "bundled" per diem so single missing services cannot make claims false | District court and Eleventh Circuit: upheld conviction—claims covered both services not provided and entirely worthless services; timeliness and mens rea avoid vagueness problems |
| Whether sufficient evidence showed Houser conspired with Washington to defraud Medicare/Medicaid | Government: circumstantial evidence (communications, control over funds, actions to hide conditions, checks, deposit instructions) proves agreement and participation | Houser: Washington lacked control; no proof of agreement | Court: conspiracy proven by circumstantial evidence; dismissal of charge against Washington did not preclude proving Houser conspired with her |
| Whether evidence established willfulness for failure to pay over payroll taxes (§7202) | Government: Houser knew duty, made misrepresentations, spent available funds on personal purchases, remedial payments came only after search warrant—shows intentional nonpayment | Houser: interactions with IRS, payments, and representations show lack of willful intent; not evasion | Court: willfulness established—Houser knowingly and intentionally prioritized other expenditures over turning over withheld taxes |
| Whether failure to file returns (2004 & 2005) satisfied elements and willfulness (§7203) | Government: returns were due April 15, 2005 (2004 return filed in 2008), 2005 return not filed; late/no filing plus conduct shows willfulness | Houser: he did eventually file 2004 return; contest willfulness for 2004 and 2005 (invokes Edwards re: intent) | Court: timeliness is essential; late filing does not negate §7203 violation; counsel conceded guilt as to 2005; willfulness proven; convictions affirmed |
Key Cases Cited
- United States v. Hoffman‑Vaile, 568 F.3d 1335 (11th Cir.) (cited regarding claims for services never provided)
- United States v. Mateos, 623 F.3d 1350 (11th Cir.) (discusses unnecessary services under health‑care fraud)
- United States v. Medina, 485 F.3d 1291 (11th Cir.) (coverage/eligibility issues under fraud statutes)
- Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir.) (distinguishes poor‑quality services from nondiagnostic/valueless services)
- United States v. Semrau, 693 F.3d 510 (6th Cir.) (quoting that billing for services not rendered is a clear health‑care fraud)
- United States v. McNair, 605 F.3d 1152 (11th Cir.) (circumstantial proof suffices to show conspiracy)
- United States v. Goetz, 746 F.2d 705 (11th Cir.) (discussed elements of §7203; context on filing requirements)
- Cheek v. United States, 498 U.S. 192 (1991) (defines statutory willfulness standard in tax law)