United States v. Rose EssienUnited States v. Rose Essien
Thomas S. Berg, Esq., Houston, TX, for Defendant-Appellant.
PER CURIAM:*
Rose Essien appeals her conviction for healthcare fraud and identity theft. Specifically, she claims first that there was insufficient evidence at trial to convict her, and second, that she should not be responsible for the entire restitution amount because the jury acquitted her on three counts of the fourteen brought against her. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Factual Background
Medicaid covers the cost of providing beneficiaries medically-necessary durablе equipment, including diapers and incontinence supplies. If a company meets Medicaid’s conditions, it can apply to become an approved Medicaid provider of equipment. One required condition for becoming an approved provider is certifying that all information submitted will be true and accurate. Once a company is approved,
1. The First Company: Logic World Medical
Benjamin Essien started a health care business in Houston, Texas called Logic World Medical (“Logic World”) around 2003. Logic World, a licensed provider of durable medical equipment (“DME”) under Medicare, supplied a variety of DME, such as lifts, wheelchairs, and beds. Presumably due to a series of crack-downs on companies fraudulently billing Medicare for power wheelchairs, Logic World shifted its focus to incontinence supplies—such as diapers—that Medicaid, but not Medicare, would cover. Another possible reason for Logic World’s changed business strategy may have been that supplying diapеrs provided a thirty-percent profit margin. In September 2003, Logic World became an approved Medicaid provider.
Because Medicaid covers only the cost of medically-necessary equipment, a doctor must first fill out a “Title 19” form, which serves as a prescription verifying the patient’s need for the equipment. The Title 19 form must include the equipment provider’s name and Texas Provider Identifier number, as well as the printed name of the doctor’s representative certifying that the services being supplied are consistent with the physician’s directive. Then, after the equipment is delivered to the patient, the provider (here, Logic Wоrld) bills Medicaid through either billing software or Medicaid’s own website.
Benjamin hired Andatrica Howard (“Howard”) to handle his billings. Howard secured the Title 19 forms for Logic World, and then billed Medicaid based on the information in those forms. Initially, Benjamin compensated Howard for managing Logic World’s Medicaid billing with a four percent commission. After Howard threatened to send business to Logic World’s competitors if her compensation was not increased, Benjamin increased her commission to twelve percent of Logic World’s gross income. Howard, not satisfied for long, ended her relationship with Logic World in 2005.
In 2004, before Howard stopped billing for Logic World, the Essien family decided that Benjamin’s sister, Rose, and father, Bassey, would assist with Logic World, enabling Benjamin to go to school. Bassey began writing checks on Logic World’s business account, and Rose became Logic World’s office administrator. By virtue of her position, Rose became intimately involved in the business operations of the company.
Rose maintained Logic World’s office, sent and received faxes, did clerical work, and “update[d] patient records based on information from the field, calls made into the office, and the like.” Rose also began calling Medicaid’s support hotline on Logic World’s behalf. From October 26, 2004 to January 2, 2006, Rose cаlled Texas Medicaid at least forty-nine times. Eventually, she was listed as Logic World’s contact
Benjamin reported that Rose “had a lot to do with the billing process” at Logic World, but also stated that he was the one who sent the final information to Medicaid. After Howard stopped managing Logic World’s billing, “not only was [Rose] analyzing what’s coming from the field, but now when things came from the doctor into [the] fax machine, she would analyze it through the [Texas Medicaid] Web site for [Benjamin], update the list, do the deliveries.” Further, because they all came through Rose, “she saw the delivery tickets that showed 300 extra-large diapers time after time after time,” including multiple delivery tickets without dates.
Moreover, on Rose’s application to pharmacy school, she stated that she began billing for Logic World in March 2005. Specifically, she stated that she “bill[ed] medical services rendered by [the] company.” Despite this statement, she later told investigators that she began billing for Logic World only in September 2005.
Rose received regular payments from Logic World’s account. In July 2003, Benjamin wrote Rose a $1,000 check, the memo line of which indicated it was for office supplies. In December 2004, Benjamin paid Rose $2,000 for “payroll.” Benjamin stated he tried to pay her about $2,000 a month. In total, Rose received over $23,000 from Logic World’s accounts.
Eventually, Logic World was billing Medicaid for providing diapers to around 200 people, bringing in $20,000 in monthly profit from the billings. After receiving complaints from Medicaid beneficiaries, the Texas Health and Human Services Commission opened an investigation into Logic World. Investigator Betty Sam (“Sam”) noticed that Logic World was consistently billing Medicaid for 300 diapers per person, per month—the maximum quantity of diapers for which Medicaid will pаy. According to Sam, a person using 300 diapers per month would likely “need to be in a hospital, because the urinary incontinence would really be severe.” Sam also noted that Logic World was billing Medicaid for extra-large adult diapers for a five- or six-year-old child.
Sam decided to go to the Logic World office to request their records. She arrived during posted business hours, but after finding the office closed, decided to go to Benjamin’s house. Benjamin told her that the business records would be available by the end of the day, but when Sam returned to the Logic World office, she found Rose and other employees “trying to put records together.” Although Benjamin delegated the duty to validate the records to Rose, Logic World never produced all the requested evidence. For example, none of the receipts Logic World provided from its various suppliers indicated any purchases of extra-large adult diapers.
As part of Sam’s investigation, Rose provided a voluntary statement: “I print out invoices for [Logic World,] receive faxes from doctors’ offices or patients on patient supplies. Order supplies for the company. Return phone calls. I started billing for the company in [September] 2005.... Request ... [from] the doctor’s office, I call the delivery guy to pick up a new invoice on a patient. I bill for it.... Then the Medicaid pays the company for it.” Akpan, the delivery driver, told Sam: “Benjamin and Rose makes the call for me to pick the slips up and after that, I pick the supplies from the storage and deliver them and then return the slips to the office, to Benjamin and Rose.”
Sam ultimately determined that all of Logic World’s claims were invalid. Based on this determination, the Texas Health and Human Services Commission sought to recoup $1,109,123.10 from Logic World and to exclude Benjamin from Texas Medicaid.
2. The Second Company: General Medtronics
After the Logic World investigation, the Essien family began operating a new company called General Medtronics. Rose was put “in charge of it,” and signed letters as its president. In March 2007, Rose submitted an application for a Medicare license for General Medtronics, on which she listed herself as General Medtronics’ owner. As part of the application, Rose attached service agreements she had signed with two DME suppliers.
After she secured the Medicare license, Rose applied for a Medicaid license. Benjamin assisted with her application because he “had no payment coming in” and “wanted to have her probably continue [to sell] my diapers.” Rose signed the Medicaid application in April 2007, certifying that she was willing to follow Medicaid requirements. While Medicaid was verifying General Medtronics’ application, Medicare revoked General Mеdtronics’ status after it was unable to verify Medtronics’ supplier standards because no one knowledgeable about the company was present at any of four attempted site visits. The Medicaid application was also denied.
3. The Third Company: Roben Medical
After General Medtronics’ licenses were denied by Medicaid and revoked by Medicare, the Essien family established a third company, Roben Medical (“Roben”). Benjamin helped Bassey set up the company. Roben was ultimately approved for Medicare and Medicaid licenses.
An analyst in Sam’s office decided that Roben Medical warranted a closer investigation after noticing excessivе billing patterns. Sam reviewed Roben’s claim records in early 2009, finding “the same consistent billing patterns of the 300 maximum [diaper] quantity.” Roben had billed Medicaid $236,896.10, more than half of which was for extra-large diapers for ninety Medicaid beneficiaries. Sam noticed that Roben was billing for the same list of beneficiaries that Logic World had been.
Sam tried unsuccessfully to visit Roben’s office, finding it closed during its normal business hours. Sam later located Bassey, who was unable to produce the records Sam requested. Bassey told Sam: “I buy my supplies from Sam’s Club.... My billing is done by Imeh Akpan, except for the last month. Rose Essien billed for Roben the last month. Ms. Rose Essien does not charge me to bill. I am arranging to get another biller.” Roben’s bank records show that two checks were written from the company to Rose, totaling $9,220.
Sam then interviewed Medicaid beneficiaries who were listed as having received diapers from Roben. For one beneficiary, Roben had billed Medicaid for extra-large adult diapers, but the delivery slips noted
As with Logic World, Sam determined that all of Roben’s claims were invalid and recommended that the state seek to recoup all amounts paid. The Texas Health and Human Services Commission ordered the recoupment of $236,896.10 and assessed additional civil penalties.
4. Indictment and Trial
On April 30, 2009, a grand jury in the Southern District of Texas indicted Benjamin and Rose Essien on one count of conspiracy to commit health care fraud, eight counts of health care fraud, and two counts of aggravated identity theft. On February 25, 2010, Benjamin pleaded guilty, but the details of the plea agreement are outside this record. After his plea, the grand jury returned a superseding indictment. The indictment added Bassey Essien and Ebong Akpan (a delivery driver) as defendants and added additional counts of health care fraud and aggravated identity theft against the group. Ultimately, the grand jury indicted the group, including Rose, with one count of conspiracy to commit health care fraud, in violation of
A jury trial began on March 29, 2011, against Rose, Bassey, and Ebong Akpan. Sam testified about her investigation, described above, and Sergeant Gordon Lunsford of the Texas Attorney General’s Medicaid Fraud Unit described the investigation his office conducted. Specifically, he identified records indicating that either Logic World or Roben had billed Medicaid for 300 diapers for an individual—the maximum permissible per person. He also demonstrated for the jury that many of the Title 19 forms related to the Logic World charges bore the same photocopied physician’s signature.
Lunsford said that Logic World had purchased only 7,300 diapers, but had billed Medicaid for 960,459 diapers, costing $1,187,994.58. Roben had purchased only 69,148 diapers, but billed Medicaid for 266,400 diapers at a cost of $320,706.14. Rose Essien received compensation of $37,609 from the companies. Mary Ann Wallace from the Texas Medicaid Partnership testified. She identified forty-nine calls that Rose made to Medicaid on behalf of Logic World, the content of which illustrated Rose’s significant administrative role in the company. For example, on February 2, 2005, Rose called Medicaid concerning the computer software that Logic World used to submit claims to Medicaid, indicating to Wallace that Rose was in the process of enabling Logic World to process claims to Medicaid. Another time, Rose called Medicaid for “TDH Connect training.” The notes from the call made it sound “like the agent handling the call was advising [Rose,] here is some information you need to gather and when you get ready for your processing or your training, you’re going to need to have your user name and password ready.” In June 2005, Rose called concerning a “portal account issue,” and notes from that call indicate that Rose was “trying to log in as an administrator” on the account. On anoth-
For each health care count charged in the indictment, at least one witness testified that the beneficiary did not receive the diapers that Logic World or Roben claimed to have delivered. As to the aggravated identity theft counts, beneficiaries testified that they never authorized the defendants to use their personal identifiers to bill Medicaid.
Dr. Ramachandra Mayla, a physician whose signature appears on many of the Title 19 forms used, testified that although he occasionally prescribed diapers, very few times in his career had he prescribed 300 diapers a month. Further, Dr. Mayla reviewed the Title 19 forms from Logic World that bore his signature. Among them, he found one containing a prescription for a woman he believed to be deceased as of the date of the prescription. Dr. Mayla said that someone had forged his signature, as he would never sign a blank Title 19 form and would not have prescribed for someone who was not presently his patient.
Benjamin Essien, after pleading guilty in his own case, testified in Rose’s defense. Benjamin claimed that once Howard stopped billing for him, he realized she had been billing incorrectly. Benjamin testified that he did not correct Howard’s errors and did nоt process refunds as he should have. He acknowledged that doing so violated the law. Benjamin stated that Rose would provide him with patient updates, but that he chose to ignore them. Benjamin testified that Rose never billed Medicaid directly. Instead, she prepared the information for him, and he submitted it to Medicaid. He also stated that her phone calls to Medicaid were done at his direction. Rose, according to Benjamin, was never told what he was “doing with the billing.”
Benjamin testified that he tried to pay his sister $2,000 a month. Also, he wrote some checks to Rose, which she was supposed to use to pay his rent after his landlord refused to take his cheсks. When Benjamin and his wife missed their flight to Nigeria, Benjamin wrote a $9,000 check from Roben’s account to Rose, which she was supposed to use to buy the couple another set of airline tickets. According to Benjamin, Rose did not have “anything to do with the operation of” Roben Medical.
Following the eight-day trial, Rose was convicted of eleven counts of health care fraud and five counts of aggravated identity theft. She was acquitted of conspiracy and two counts of health care fraud. The judge sentenced her to sixty months’ incarceration, to be followed by a two-year term of supervised release. The court also ordеred that Rose, jointly and severally with Benjamin and Bassey, pay the United States restitution in the amount of $1,455,837.91. Bassey was convicted on all counts while Akpan was acquitted on all.
II. JURISDICTION
The district court had jurisdiction under
III. DISCUSSION
A. Insufficiency of the Evidence
First, Rose contends that there was insufficient evidence to convict her. The
1. Standard of review
In reviewing a challenge to the sufficiency of the evidence, this Court affirms where “a reasonable jury could find that the evidence establishes the guilt of the defendant beyond a reasonable doubt” when the evidence is “reviewed in the light most favorable to the government, drawing all reasonable inferences in support of the verdict.” United States v. Pennington, 20 F.3d 593, 597 (5th Cir. 1994).
2. Counts 2-9 (Logic World Medicaid Fraud)
A defendant commits healthcare fraud when he knowingly and willfully executes, or attempts to execute, a scheme or artifice (1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services.
Rose’s main point of argument is that there is “no suggestion that [she] was involved at any stage of the billing process” until after fraudulent billing had ceased, in October 2005. Rose concedes that she made some calls before October 2005, but insists that it is “pure speculation” to infer that she was billing or involved in preparing falsified billing documents. She also notes that the dates of the fraudulent Logic World charges range from December 1, 2004 to August 4, 2005—all of which fall within the period during which Howard was responsible for billing for Logic World. Rose’s final piece of evidence is that when Sam first interviewed Benjamin, he told her that Rose began billing in September 2005.
Rose’s argument fails for at least two reasons. Mainly, the act of billing is not an element of Medicaid fraud. Rose does not contest that Logic World fraudulently billed Medicaid. The Government can use circumstantial evidence to prove that a defendant’s knоwing involvement in a scheme to defraud Medicaid. See United States v. Ismoila, 100 F.3d 380, 387 (5th Cir. 1996) (citing United States v. Keller, 14 F.3d 1051, 1056 (5th Cir. 1994) (stating that intent can be inferred from facts and circumstances)). Reviewing all the evidence in the light most favorable to the Government, there was sufficient evidence to support a verdict that Rose committed eight counts of Medicaid fraud through Logic World.
Rose began working for Logic World in 2004, which was before the date of the first charged fraud, July 21, 2005. According to Benjamin, Rose was extensively involved in the company. She maintained the office, updated patient records, and printed and accepted delivery tickets that purported to prove that a delivery had been made. She was supposed to adjust the “patient roster and take people off that shouldn’t be there or add ... the new name if somebody was found.”
Even if Rose were correct that billing was a required element for Medicaid fraud, taking all evidence in favor of the Government, there was evidence that Rose was a biller as of March 2005. Indeed, Rose listed on her application to pharmacy school that she was a “biller” for Logic World beginning March 2005.
3. Counts 11-13 (Roben Medical Medicaid Fraud)
Rose’s position as to Counts 11-13, which relate to Medicaid fraud through Roben, is that the Government’s exhibits do not demonstrate that she was involved in the transactions giving rise to Count 11, effectively conceding Counts 12 and 13. The fraudulent conduct giving rise to Count 11, 12, and 13 occurred on February 6, 2009, March 6, 2009, and March 6, 2009, respectively. She states that the February 6 delivery ticket seems to have been personally delivered by Bassey, that the bank account lists only Bassey and Benjamin, and that there is no evidence that she was involved with Roben at the time. Rose concedes that Sam testified that Bassey, when interviewed on March 16, 2009, stated that Rose had billed for him “the last month.” Rose contends that it is not clear from Bassey’s statement whether he meant February 2009 or the thirty-day period immediately preceding the interview.3 Nonetheless, Rose seems to contend that there is insufficient evidence only as to Count 11, effectively conceding Counts 12 and 13.
As discussed above, the evidence need not establish that Rose herself “billed” Medicaid on behalf of Roben to prove her knowing involvement in the scheme, as required for conviction. Just as with Logic World, Rose was receiving checks from Rоben. The circumstances surrounding the creation of the three companies also support the jury’s verdict. Rose had been involved in Logic World, which had been investigated before losing its Medicaid licensing in 2006. Then, Rose tried to ob-
4. Counts 15-19 (Aggravated Identity Theft)
Aggravated identity theft,
Counts 15-17 allege that Ebong Akpan and Rose aided and abetted one another by unlawfully possessing and using the names and beneficiary numbers of specific beneficiaries to commit health care fraud for Logic World on August 4, 2005 (Counts 15 and 16) and June 26, 2006 (Count 17). For Counts 15 and 16, as above, Rose points out that Howard was Logic World’s biller at that time. Rose contends that because she was not the official biller for Logic World, “there is simply no evidence that Rose Essien committed these acts.” Although billing is not a requirement for conviсtion, ironically, billing activity would likely be evidence of knowingly involvement in the scheme sufficient to support a verdict. As discussed above, Rose represented on her application to pharmacy school that she was a biller for Logic World as of March 2005, before the date of either count. That admission, along with the evidence discussed above, would support a reasonable juror’s guilty verdict.
As to Count 17, committed June 26, 2006, Rose told Sam that she started billing for Logic World in September 2005. Thus, both her pharmacy school application and her statement to Sam support a reasonable juror’s finding that, as a biller, Rose submitted the billing claim bearing the false identification.
Rose also argues that there is insufficient evidence to support a conviction on Counts 18 and 19. Those two counts concern billings made on behalf of Roben Medical on March 6, 2008, the same billings at issue in Counts 12 and 13.4 Her argument again rests on her assertion that she did not bill or facilitate others in doing so. The false claims were submitted ten days before Bassey told Sam that “Rose Essien billed for Roben the last month.” A reasonable juror could thus have concluded that Rose submitted the fraudulent bills using the identifications of Medicaid beneficiaries without authorization.
While the Government must prove that the defendant knew that the means of identification belonged to a real person, rather than a fictitious creation, the district court gave that instruction to the jury. The purpose of submitting forms bearing the names of the beneficiaries is to obtain payment from Medicaid. For Medicaid to reimburse a supplier, the beneficiaries listed would need to be actual Medicaid recipients. It would be fruitless to submit a bill for a non-existent person, much less a person who is not Medicaid-eligible. The jury could reasonably have concluded that Rose, knowing the purpose of the fraudulent scheme, also knew that the means of identification they used belonged to other people. As to each count of conviction, a reasonable jury could find
B. Plain Error in Restitution
Rose also contests the district’s restitution order. She argues that because she was acquitted of conspiracy and two substantive counts of Medicaid fraud, she should not be responsible for the full amount of restitution sought. The presen-tence report calculated the amount of restitution at $1,455,837.91 by adding Medicaid’s payments to Logic World ($1,101,865.37) and to Roben ($353,972.54). The district court ordered that Rose, jointly and severally with Benjamin and Bassey, repay the combined amount. Because Rose did not object to the order at trial, reviеw is for plain error. Even if we assume arguendo that the restitution amount was in error, any error was far from plain. Thus, we affirm the restitution award.
1. Standard of Review
Where a defendant does not challenge a restitution order in the district court, this court reviews for plain error. United States v. Inman, 411 F.3d 591, 595 (5th Cir. 2005). Under plain error review, an appellant must show that (1) there was an error, (2) the error was plain, and (3) the error affected his substantial rights. Id. When all three requirements are met, the Court exercises its discretion to correct the error only if it “seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.” Id. (citing United States v. Olano, 507 U.S. 725, 734 (1993)). Both parties here agree that plain error review applies.
Because our holding rests on the second prong of plain error analysis, we neеd only expand on that prong. A defendant seeking reversal under plain error review must first establish that there is, in fact, an error—an unwaived deviation from a legal rule. United States v. Olano, 507 U.S. 725, 732-33 (1993). Second, not only must there be error, but the error must be “plain.” “Plain” is synonymous with “clear” or, equivalently, “obvious.” Id. at 734; see also United States v. Frady, 456 U.S. 152, 163 (1982) (stating that error must be so plain that the trial judge was derelict in countenancing it).
2. Discussion
The law on the scope of restitution for fraudulent schemes is not entirely settled. There is some case law indicating that restitution orders for guilty pleas differ from those for jury verdicts. See United States v. Adams, 363 F.3d 363, 367 (5th Cir. 2004). Adams involved determining the scope of restitution where the defendant had pleaded guilty. The Adams court observed that where a jury vеrdict is available, the indictment largely determines the scope of the underlying scheme to defraud, citing three cases in support. Id. at 366. But the court also stated, without citation, that the jury verdict defines the scope of the fraudulent scheme. Id. at 367. Adams does not provide clear guidance on the scope of restitution with a jury verdict, likely because the issue was not before it. Because the defendant accepted a plea, the court did not have occasion to fully evaluate the correct scope of restitution for a jury verdict—making its comments on the topic dicta. Id. at 364.
A later Fifth Circuit case more clearly supports the restitution award in this case. United States v. Maturin, 488 F.3d 657, 661-62 (5th Cir. 2007). Maturin, although dealing with a guilty plea, noted that
The district court here awarded restitution pursuant to
IV. CONCLUSION
For the foregoing reasons, the convictions and restitution order are AFFIRMED.