11th Circuit Reverses Healthcare Fraud, Money Laundering Convictions

On May 11, the US 11th Circuit Court of Appeals, issued an opinion reversing the of convictions, all convictions of one defendant for Medicare Health Care Fraud and money laundering, and vacated the sentence for incorrect loss calculations.
The scheme involved transporting patients to the defendants’ pharmacies in exchange for illegal kickbacks for patients and doctors. However, no evidence indicated that Medicare was billed for unnecessary medical procedures. A confidential informant met with the defendants to exchange, for a fee, their checks for cash, admitted on cross-examination that one defendant, Medina, a secretary, was always sent out of the room to avoid her hearing them talk about the kickback scheme.
The Court also vacated the money laundering counts which related to the fraud counts it had set aside, since money laundering involves the proceeds of activity known by the defendants to be illegal.
The Court upheld the convictions of two defendants as to the general conspiracy charge, under 18 U.S.C. § 371, but vacated the secretary’s conviction, finding that her lack of awareness of the kickback conspiracy, and of the conspiracy’s other objectives, left insufficient evidence to
convict.
The Court remanded the case for resentencing and noted that the district court failed to make a sufficient loss calculation, and instead sentenced the defendants for the entire amount Medicare was billed in the period, without explanation. However, in the absence of evidence of Medicare’s payment of unnecessary medical claims, or that the patient kickback scheme resulted in any actual loss to Medicare, this calculation was inadequate.