UNITED STATES of America, Plaintiff-Appellee v. Robert Earl READ; Claudette Read, Defendants-Appellants.
No. 11-40643.
United States Court of Appeals, Fifth Circuit.
Nov. 2, 2012.
Margaret Loraine Schmucker, Austin, TX, James R. Makin, Beaumont, TX, for Defendants-Appellants.
Before KING, SMITH, and BARKSDALE, Circuit Judges.
PER CURIAM:
Defendants-Appellants Robert Earl Read and Claudette Read were convicted on one count of conspiracy to commit health care fraud and twenty counts of mail fraud. They appeal their convictions, sentences, and restitution orders. For the reasons that follow, we AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
The grand jury charged Defendants-Appellants Claudette Read and her husband, Robert Earl Read, with mail fraud, health care fraud, and conspiracy to commit health care fraud, alleging that the Reads had submitted fraudulent Medicare, Medicaid, and Blue Cross Blue Shield (“BCBS“) claims through their ambulance business. The grand jury later returned a superseding indictment, charging the Reads with one count of conspiracy to commit health care fraud, thirty-two counts of health care fraud and aiding and abetting, forty-two counts of mail fraud and aiding and abetting, and eight counts of aggravated identity theft and aiding and abetting.
The Reads owned Priority One—a Jasper, Texas-based company that provided, inter alia, non-emergency ambulance transport services to dialysis patients. The government alleged that between 2004 and 2007, the Reads fraudulently represented to Medicare, Medicaid, and BCBS that patients Priority One had taken to dialysis appointments required ambulance transport.
At trial, several witnesses testified as to Medicare, Medicaid, and BCBS reimbursement policies. Medicare covers non-emergency ambulance transport if a “medical necessity” exists: (1) The beneficiary is bed-confined, and his or her medical condition precludes other means of transport; or (2) the beneficiary‘s medical condition, regardless of bed confinement, necessitates ambulance transport.
Medicare covers non-emergency, scheduled, repetitive ambulance transport—the type of transport at issue here—if the ambulance provider obtains a certificate of
The jury found the Reads guilty on the conspiracy charge and twenty of the mail fraud charges. The mail fraud convictions involved fraud on Medicare and Medicaid, but not BCBS, and related to only four of the fifteen patients identified in the superseding indictment: Cleveland L. Casey, Mattie Lewis, Patsy R. Hogg, and Mary A. Pool. At the nine-day trial, the government offered evidence and testimony respecting Priority One‘s general business practices, as well as its practices as to specific patients.
Tina Welch, a Medicare claims processor employee, testified as to Medicare regulations governing ambulance service providers, including the requirement not knowingly or recklessly to submit false claims. The government offered into evidence Priority One‘s Medicare provider application form, by which Claudette Read certified on Priority One‘s behalf that it would abide by Medicare laws and regulations. Welch and others testified that government health care programs rely on service providers to submit truthful claims because these programs do not have the resources to verify every claim.
Former Priority One emergency medical technicians (EMTs) testified that they were required to fill out “run sheets“—forms submitted to Medicare that provide information on ambulance transportees. Claudette Read instructed the EMTs to omit certain information from the run sheets, including whether transportees could sit in a wheelchair or walk, and she returned to EMTs any run sheet that included the word “wheelchair” so that it could be rewritten. Multiple supervisors in Priority One directed EMTs to omit information that would cause Medicare to deny payment. After Robert Read took over one supervisor‘s responsibilities, he did not instruct EMTs to change how they completed run sheets. At one point, Robert Read told an EMT that “it did not matter how [a patient] got to the stretcher [ (e.g., walking, in a wheelchair, or carried)] . . . . Medicare didn‘t care.” Two witnesses testified that Claudette had learned at a seminar that any claim that included the word “wheelchair” would not be paid. The EMTs routinely picked up patients who could walk or use wheelchairs.
Although many EMTs admitted on cross-examination that, as non-doctors, they could not assess with absolute certainty whether a patient had a “medical necessity” for ambulance transport, doctors and nurses of Priority One patients testified that no medical necessity existed as to these patients. One EMT testified that she noticed run sheets were being altered to include “the right check boxes,” instead of attachments being appended to them. Further, the Reads had doctors pre-sign CMNs that Priority One employees later filled out.
Mattie Lewis did not require a wheelchair, and routinely rode in the front seat of the ambulance transporting her. Before Priority One began transporting her, she was taken to dialysis appointments in the dialysis center‘s van. Although there was some concern that Lewis required an ambulance because she suffered from dementia and had become violent on previous occasions, she took medication for this condition, and Priority One EMTs uniformly testified that she had never presented any difficulties in this regard. Indeed, several months after Priority One began to transport her, EMTs were directed to move her from the back of their ambulances to the front seat. The employee who evaluated Lewis so that Robert Read could decide whether to transport her testified that aggression was not his concern. Rather, his only concern was having someone present to help her in moments of confusion. On occasion, Robert Read even called on this employee to take her to appointments in a personal vehicle.
Cleveland Casey was paralyzed on his left side, but could nonetheless propel himself in a wheelchair. His nursing home took him to dialysis appointments in a wheelchair van before Priority One began transporting him. Further, several EMTs testified that Casey could have been transported by wheelchair van using an upper-body restraint to keep him secure. When Robert Read asked an employee to transport Casey in a personal vehicle, an attendant sat next to him to ensure that he stayed upright.
Like Mattie Lewis, Mary Pool often rode in the front of Priority One ambulances. She also used a wheelchair, and had been transported by wheelchair van in the past. EMTs and Pool‘s nurse testified that she could have ridden in a wheelchair van.
Patsy Hogg was also in a wheelchair when EMTs picked her up. Her doctor testified that she did not normally meet Medicare‘s requirements for ambulance transport, and could even walk on occasion. The government presented documentation confirming this assessment.
The government presented evidence that no claim set out in the superseding indictment—including those related to the eleven patients not involved in the substantive counts of conviction—qualified for reimbursement in the amounts billed. Department of Health and Human Services investigator Joel Dan McQueen testified that after reviewing eighty boxes of documents seized from Priority One, he determined that Priority One had omitted material information that would have prevented payment. Tina Welch examined each Medicare claim for which the Reads were charged, and testified that none of them qualified for reimbursement in the amounts billed. Texas Medicaid employee Patricia Cannizzaro testified that the Medicaid claims in the superseding indictment involved “crossover claims” that Medicaid paid automatically if approved by Medicare. BCBS investigator Marjorie Poche testified that the BCBS claims in the superseding indictment lacked material in-
The jury also heard testimony as to the Reads’ mental states. Government investigators seized from Priority One‘s headquarters a book of Medicare billing regulations that had been highlighted, written in, and bookmarked. Scott Zimmerman, a senior manager at Priority One, testified that Robert Read‘s “main concern” with the company‘s office in Center, Texas, was “to make sure that it made money so that it could stay in existence.” As for his management style, “it was Robert‘s way or the highway.” When one EMT raised concerns about seeking reimbursement for Mattie Lewis‘s and Cleveland Casey‘s transports, Robert Read became “pretty upset,” and told him he “could find another job.” Another EMT testified that Robert Read told her it was legal to transport a patient in an ambulance‘s front seat, even though it clearly was not. When an EMT suggested to Claudette Read that transporting one of the patients by ambulance was improper, she responded that Priority One would not be audited because the government was “after the big fish, not the little people.” She also said that if Priority One overbilled, the government would permit them to pay the money back. Tina Welch testified that Priority One had received letters on three occasions stating that it had overutilized non-emergency ambulance transport for dialysis patients. The Reads did not respond to these letters.
In his defense, Robert Read testified that his subordinates had been responsible for any illegal or apparently illegal conduct at Priority One. The Reads called a former Priority One EMT who testified that the patients she transported required ambulance service, and that any “double transports” were performed as “courtesy” runs. Other former employees testified that Priority One‘s software would not have permitted the Reads to falsify any documents unnoticed. An expert witness‘s testimony implied that the Reads had complied with applicable regulations.
Although the jury found the Reads guilty on twenty-one charges, it returned no verdict on the remaining sixty-two counts. On the government‘s motion, the district court dismissed the hung counts. In a special verdict, the jury found by a preponderance that the forfeitable proceeds of the offenses of conviction amounted to $93,535.95.
The district court determined that the Reads’ criminal history category was I, and that their offense level was 29, rendering an advisory sentencing range of 87 to 108 months. The court applied a two-level enhancement for abusing a “position of trust” under
II. DISCUSSION
On appeal, the Reads argue that: (1) there was insufficient evidence to sustain their convictions; (2) the district court used the incorrect “loss” amount to calculate their advisory sentencing range; (3) the district court incorrectly determined the amount they owed in restitution; and (4) the district court incorrectly applied the “abuse of position of trust” enhancement. We disagree.
By moving for judgments of acquittal following the government‘s case-in-chief and again at the close of evidence, the Reads have preserved the de novo standard of review as to their evidentiary sufficiency argument. United States v. Frye, 489 F.3d 201, 207 (5th Cir. 2007). “When reviewing the sufficiency of the evidence, this Court views all evidence, whether circumstantial or direct, in the light most favorable to the Government with all reasonable inferences to be made in support of the jury‘s verdict.” United States v. Moser, 123 F.3d 813, 819 (5th Cir. 1997). “[W]e consider whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.‘” United States v. Jara-Favela, 686 F.3d 289, 301 (5th Cir. 2012) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). “We do not consider whether the jury correctly determined guilt or innocence, [only] whether the jury made a rational decision.” United States v. Lopez-Urbina, 434 F.3d 750, 757 (5th Cir. 2005) (alteration in original) (citation omitted).
1. Conspiracy
The Reads were charged with conspiring to commit health care fraud under
The government offered sufficient evidence to sustain the Reads’ conspiracy convictions. There was ample proof of a voluntary agreement to defraud Medicare, Medicaid, and BCBS. As the sole owners of Priority One, the Reads made all important decisions relating to their business: They determined which patients’ ambulance runs were billable, devised the policies governing run sheets, and told EMTs to omit material information from the run sheets. The evidence showed that the Reads knew their billing practices were illegal: They were familiar with regulations governing reimbursement, and had also been informed three times that they were overutilizing reimbursement for non-emergency ambulance transport. Finally, each satisfied the “overt act” requirement by, inter alia, instructing EMTs not to disclose that patients could walk or use wheelchairs.
The Reads argue that their conspiracy convictions are void because the government failed to show that their “overt acts” were independently forbidden. They incorrectly rely on United States v. Ragsdale, 426 F.3d 765, 778 (5th Cir. 2005), in which an independently criminal act was sufficient for a conspiracy conviction, not necessary. An “overt act” is “any act” in furtherance of the conspiracy‘s criminal objective, whether independently forbidden or not.
The Reads further argue that
2. Mail Fraud
In the remaining twenty counts of conviction, the Reads were charged with mail fraud and aiding and abetting. A mail fraud conviction under
The grand jury charged the Reads with “caus[ing] requests for payments to be filed [through the mails] with Medicare [and] Medicaid . . . knowing that the claims were false because the patients did not meet the qualification for ambulance transportation.” Accordingly, the government was required to prove that the Reads devised a scheme to submit claims that did not qualify for reimbursement under Medicare/Medicaid regulations.
Each element of mail fraud was satisfied here. As we have discussed, the government offered evidence that the Reads sought to obtain payment from Medicare and Medicaid by transporting non-qualifying patients. The “use of mails” element was satisfied because Medicare mailed the checks used to pay claims as to these beneficiaries. See United States v. Ingles, 445 F.3d 830, 835 (5th Cir. 2006) (“One ‘causes’ the mails to be used [w]here one does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen.“) (quoting Pereira v. United States, 347 U.S. 1, 8-9 (1954)). Finally, the Reads instructed EMTs not to disclose if patients were in wheelchairs or could walk—information the Reads knew would have caused these claims to go unpaid.
The Reads first argue that the government failed to prove that they intentionally overbilled for courtesy and double transports. The evidence showed, however, that 576 double transports were billed as single transports, and that Robert Read sometimes drove on these runs. This and other evidence we have discussed permitted the jury to infer that the Reads’ overbilling was intentional.
The Reads further contend that the government did not prove that they intentionally filed fraudulent claims because Priority One EMTs sought to determine in good faith whether patients required ambulance transport. As we have explained, the government offered abundant evidence showing that the Reads devised a fraudulent scheme that they knew involved false representations. See Phipps, 595 F.3d at 245-46; Ratcliff, 488 F.3d at 643-44.
The Reads incorrectly argue that the government failed to prove that Priority One employees made materially false representations as to Casey‘s, Lewis‘s, Pool‘s, or Hogg‘s medical condition. Witnesses testified that none of these patients required ambulance transport. For in-
Finally, the Reads argue that their convictions must be reversed because Priority One was not required independently to assess each patient‘s medical necessity for ambulance transport once the patient‘s physician furnished a CMN. The jury found them guilty, they argue, because transportees’ physicians misunderstood Medicare regulations. The Reads ignore that they had doctors sign blank CMNs on many occasions, thus completely removing the doctors from the medical necessity determination. Moreover, assuming, arguendo, that the Reads’ summation of Medicare regulations is correct, it does not affect the mail fraud convictions. Multiple EMTs, doctors, and nurses testified that the four patients at issue plainly did not qualify for ambulance transport. At the Reads’ direction, however, EMTs misrepresented the patients’ eligibility to ensure payment. Possession of a CMN—even one that is legitimately obtained—does not permit a provider to seek reimbursement for ambulance runs that are obviously not medically necessary. See
In sum, because the government offered sufficient evidence to sustain the Reads’ convictions, we will not disturb the jury‘s verdict.
B. “Loss” Amount
The Reads argue that the district court incorrectly determined the “loss” amount for Sentencing Guidelines purposes. They have preserved this claim of error by specifically objecting before being sentenced. United States v. Neal, 578 F.3d 270, 272 (5th Cir. 2009). Accordingly, we review the district court‘s legal interpretation of the Guidelines de novo, and its factual findings for clear error. United States v. Torres, 601 F.3d 303, 305 (5th Cir. 2010) (per curiam).
Under the Guidelines, the offense level of a defendant convicted of fraud is adjusted according to the amount of “loss” involved in the fraud.
Although the government urged that the loss amount was $7,639,279.74—the full amount billed to the victims—the district court determined this could not be the “intended loss” because the Reads knew that some claims would be rejected. Instead, the district court used the “actual loss” of $1,766,681.31—the amount that Medicare, Medicaid, and BCBS paid on the claims that Priority One submitted. This amount increased the base offense level by sixteen.
The Reads ask us to remand for redetermination of the loss amount, arguing that: (1) the district court committed Booker error; and (2) the loss amount was not proven by a preponderance. We disagree.
1. Booker Error
The Reads argue that the district court committed Booker error by applying the Guidelines as mandatory instead of advisory, and consequently refusing to consider rebuttal evidence respecting the loss amount. See United States v. Booker, 543 U.S. 220 (2005).
The Booker argument is based on an exchange between Claudette Read‘s attorney and the district court at the sentencing hearing:
MR. MAKIN: We feel that the correct amount should be the 93,000-dollar amount that the jury found. We disagree with the higher seven-point-whatever million-dollar amount. And I think it‘s interesting that the new [2011] guidelines that are going into effect deal more with the Reads than the guidelines in effect now. In just a straight reading of the guidelines as they are now, the government is correct. You know, I may not agree with that; but that is the law. But I think that law was aimed at people who had post office boxes and never performed any services or anything. Here—
THE COURT: Well, I‘m applying the law that applies now, the law that applied at the time that the defendants—so, whatever the law may be in the future is really not—it‘s interesting, but it‘s not what I‘m going to use today.
The Reads contend that because the district court referred to the Guidelines as “the law,” it must have treated them as mandatory. Remarkably, they ignore that the district court referred to the Guidelines as “the law” only in response to Claudette Read‘s attorney‘s doing the same. Moreover, nothing in the record establishes that the district court considered the Guidelines mandatory. Indeed, the court expressly stated during the sentencing colloquy that it viewed them as advisory. In context, the reference to “applying the law” is most fairly construed as the court‘s recognition that it was required correctly to calculate an advisory sentencing range under the Guidelines, and to consider that range when imposing sentence. See
The Reads next argue that the district court considered the Guidelines mandatory because it prohibited them from offering evidence to rebut the $1,766,681.31 loss amount. Rebuttal evidence as to an “intended loss” amount is expressly contemplated in the 2011 Guidelines, but not in the 2009 Guidelines under which the Reads were sentenced. See
Again, the Reads misrepresent the record. First, the 2011 Guidelines permit a defendant to present rebuttal evidence showing that the total amount billed to a government health care program is
More significantly, the Reads’ argument is meritless because the district court did consider their rebuttal evidence. At the sentencing hearing, the Reads offered the argument they advance now—that they legitimately obtained most of the $1,766,681.31 amount, and thus should be penalized only for the amount overpaid. They further stated that the rebuttal evidence to this effect had been presented at trial. Although they stated that they were willing to present rebuttal testimony, they did not affirmatively seek to do so. At no point did the court prohibit the Reads from presenting evidence or argument. After hearing their arguments, the district court rejected the $93,535.95 figure as “[not] appropriate at all.” Because the court considered the Reads’ arguments and supporting evidence, their claim of Booker error is meritless.
2. Loss Amount
The Reads next argue that the district court incorrectly determined the loss amount. Again, we disagree.
A district court may find by a preponderance all facts relevant to determining the Guidelines sentencing range, including loss amount. United States v. Ollison, 555 F.3d 152, 164 (5th Cir. 2009); United States v. Johnson, 445 F.3d 793, 797-98 (5th Cir. 2006). Once again, “loss” for sentencing purposes includes “actual loss“—“the reasonably foreseeable pecuniary harm that resulted from the offense.”
As alleged, the Reads conspired “to obtain reimbursement from the Medicare and Medicaid programs for transporting by ambulance dialysis patients for whom [they] knew reimbursement was not available.” The district court determined that the actual loss resulting from the “relevant conduct” was $1,766,681.31—the combined value of the claims paid for transporting the fifteen patients identified in the superseding indictment. This finding was based on a preponderance of the evidence, including testimony by Tina Welch, Joel McQueen, Patricia Cannizzaro, and Marjorie Poche that none of the claims set out in the superseding indictment qualified for payment.
The Reads argue that the district court could not have found the $1,766,681.31 loss amount by a preponderance because the jury found them guilty of mail fraud as to only four patients’ ambulance transport claims, whereas the district court‘s figure was derived from claims related to all fifteen patients at issue. Because the jury did not return a verdict on the mail fraud counts related to the eleven remaining patients, or on any of the health care fraud counts, the Reads contend that the government‘s evidence did not support the court‘s loss determination. They ignore that the
Finally, the Reads argue that the total amount paid by the victims was not the correct loss amount because the Reads “did real work” to earn most of that money, and that they should have been penalized only to the extent they were overpaid for non-reimbursable ambulance runs. Once again, the district court did not clearly err in finding that none of the ambulance transports set out in the superseding indictment qualified for reimbursement. Accordingly, it properly held the Reads accountable for the full amount paid by the victims.
C. Restitution
The Reads argue that the district court abused its discretion in ordering them to pay $1,766,681.31 in restitution when the jury found that the “gross proceeds traceable to” the offenses of conviction amounted to only $93,535.95. We apply de novo review to a restitution award‘s legality, and clear-error review to the factual findings underlying the award. United States v. Beydoun, 469 F.3d 102, 107 (5th Cir. 2006); United States v. Cothran, 302 F.3d 279, 288 (5th Cir. 2002). If the award is legally permitted, we review it for abuse of discretion. Cothran, 302 F.3d at 288.
Under the Mandatory Victims Restitution Act of 1996, a court sentencing a defendant for an offense involving property loss must order the defendant to pay restitution to the victim.
The district court ordered restitution of $1,766,681.31—the combined value of the claims paid in the course of the charged conspiracy. The Reads argue that the district court abused its discretion by ordering restitution in this amount because the jury‘s forfeiture determination precluded a finding of loss greater than $93,535.95. We disagree.
The Reads first argue that “the victims’ cumulative losses [ (the restitution amount)] cannot exceed the ‘gross proceeds traceable to the commission of the offenses of conviction’ [ (the forfeiture amount)].” They fail, however, to provide any apposite authority supporting this argument. They erroneously rely on Apprendi v. New Jersey, 530 U.S. 466, 490 (2000), in which the Supreme Court held that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Apprendi is inapposite because no statutory maximum applies to restitution; the restitution amount is equal to the victims’ loss, whatever this may be. See
To the extent the Reads argue that the restitution amount could not, as a factual matter, exceed the forfeiture amount in this case, and that the district court‘s resti-
The Reads next argue that ordering restitution in the full amount of the “double transport” payments grants the victims an “unlawful windfall” because these transports would have been reimbursable if billed correctly. This argument is moot because the district court permissibly found that none of the claims for which the Reads were charged was eligible for payment, regardless of single or double transporting. In any event, we are not convinced that the “windfall” argument is correct. See United States v. Crawley, 533 F.3d 349, 358-59 (5th Cir. 2008) (corrupt union president must return his full salary even though union would have paid the same amount to an honest president).
The Reads further contend that for restitution purposes, they cannot be held responsible for acts that occurred after the charged conspiracy ended. They base this argument on the erroneous belief that the conspiracy ended in 2004. As charged, and as the trial evidence showed, the conspiracy lasted from 2004 until November 2007. The district court thus properly ordered the Reads to make restitution for claims paid during this period.
Finally, the Reads incorrectly suggest that the restitution order as to BCBS was improper because none of the substantive counts of conviction relates to BCBS. Because the Reads were convicted of conspiracy, and the trial evidence supported the district court‘s finding that all claims set out in the superseding indictment were fraudulent, the district court properly ordered restitution to BCBS. See
D. “Position of Trust” Enhancement
The district court applied a two-level enhancement to the Reads’ offense levels pursuant to
1. Vagueness
Based on the trial evidence, the district court found that Priority One‘s enrollment
The district court applied
The Reads do not argue that the district court violated our precedent in applying the position of trust enhancement. Rather, they argue that under our precedent, the enhancement is applied so broadly that “literally anyone charged with theft under the federal system will necessarily also have abused a position of private trust.” In the Reads’ view, the position of trust enhancement should apply only when “recognized legal and fiduciary duties” create the trust relationship contemplated under
By challenging our position of trust jurisprudence on vagueness grounds, the Reads obliquely argue that prior panels of this circuit have incorrectly interpreted
The Reads contend that Skilling supersedes our jurisprudence respecting the position of trust enhancement as applied to Medicare and Medicaid providers. We disagree. “[F]or a Supreme Court decision to change our Circuit‘s law, it must be more than merely illuminating with respect to the case before the court and must unequivocally overrule prior precedent.” Id. The criminal statute addressed in Skilling has no material relation to the position of trust Guidelines enhancement at issue here, and we may not use the void for vagueness doctrine to ride roughshod over prior panel decisions merely because the Supreme Court has recently elaborated on that doctrine in a different context. See United States v. Zuniga-Salinas, 945 F.2d 1302, 1306-07 (5th Cir. 1991).
2. “Billing Error”
Finally, the Reads argue that the district court erroneously applied
III. CONCLUSION
For the foregoing reasons, the district court‘s judgment is AFFIRM ED.
Gary W. KLEIN, Plaintiff-Appellee v. NABORS DRILLING USA L.P., Defendant-Appellant.
No. 11-30824.
United States Court of Appeals, Fifth Circuit.
Feb. 26, 2013.