United States v. Osuji, 413 F. App'x 603

Paul Osuji and Tamara Varnado were charged with health care fraud conspiracies, aiding and abetting fraud, money laundering conspiracies, and aiding and abetting money laundering arising from Medicare reimbursements for motorized wheelchairs.
The scheme involved runners, First Choice Billing and Medisource soliciting beneficiary data, submitting claims, and sharing profits with Chimatex; Medisource bought scooters from a Houston supplier and delivered them to beneficiaries.
Dr. Linda Morgan signed fraudulent Certificates of Medical Necessity; she invoked Fifth Amendment privilege during trial, with the district court limiting any inferences.
The jury convicted on all counts; Osuji received 211 months and Varnado 63 months imprisonment, plus substantial restitution.
Varnado argued venue errors and several money laundering counts lacked venue support; the district court also used an incorrect base offense level for sentencing.
The court affirmed most convictions, vacated several counts for lack of venue proof, and remanded for resentencing after correcting the base offense level.

Issue	Plaintiff's Argument	Defendant's Argument	Held
New counsel necessity for Osuji	Osuji contends need for new counsel due to breakdown of communication.	Osuji asserts conflict made effective representation impossible.	No abuse of discretion; motion timely adjudicated and counsel adequately represented.
Sufficiency of evidence for fraud and money laundering	Evidence showed knowingly associated with and participated in fraud and laundered proceeds.	Insufficient proof of knowledge or agreement to commit fraud and laundering.	Substantial evidence supported convictions on fraud and laundering counts.
Admission of unindicted co-conspirator via Fifth Amendment	Morgan’s invocation did not critically bolster the government's case.	Invoking privilege risked undue prejudice and weight to the prosecution.	No reversible error; court instructed jury to disregard and cured potential prejudice.
Venue instructions and proof	Venue existed given multi-district scheme and transfer of proceeds.	Venue for several counts was not proven in Western District of North Carolina.	Convictions vacated for counts with insufficient venue proof; some counts affirmed with venue evidence found.
Sentencing base offense level	Guideline base level correctly aligned with underlying offense.	District court erred by applying an incorrect base level for money laundering.	Plain error found; Osuji must be resentenced with correct base level; Varnado also entitled to resentencing.

United States v. Foster, 507 F.3d 233 (4th Cir. 2007) (substantial evidence standard for reviewing convictions)
United States v. Burgos, 94 F.3d 849 (4th Cir. 1996) (a defendant’s knowledge of principal’s intent criminal venture)
United States v. Mullen, 32 F.3d 891 (4th Cir. 1994) (standards for substitution of counsel and conflict)
United States v. Hanley, 974 F.2d 14 (4th Cir. 1992) (vigorous defense as indicator against breakdown)
Namet v. United States, 373 U.S. 179 (Sup. Ct. 1963) (limits on inferences from testimonial privilege)
Martinez v. United States, 901 F.2d 374 (4th Cir. 1990) (venue in issue analysis in multi-district cases)
United States v. Cabrales, 524 U.S. 1 (1988) (venue for money laundering requires transport of funds)
United States v. Stewart, 256 F.3d 231 (4th Cir. 2001) (evidence of venue for money laundering insufficient when funds not moved)
Gall v. United States, 552 U.S. 38 (S. Ct. 2007) (begin sentencing with correct guideline range; plain error standard)
United States v. Llamas, 599 F.3d 381 (4th Cir. 2010) (resentencing due to guideline calculation error)