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United States v. Crabtree

United States Court of Appeals, Eleventh Circuit

January 3, 2018

UNITED STATES OF AMERICA, Plaintiff - Appellee,

         Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:13-cr-20505-RNS-2

          Before WILSON and ROSENBAUM, Circuit Judges, and ROBRENO, [*] District Judge.

          WILSON, Circuit Judge:

         This appeal involves multiple defendants convicted in an extensive Medicare fraud scheme. From 2004 to 2011, Health Care Solutions Network, Inc. (HCSN), an operator of mental health centers in Miami and North Carolina, billed Medicare for over $63M in fraudulent claims. Defendants Dr. Roger Rousseau, Doris Crabtree, Liliana Marks, and Angela Salafia are former employees of HCSN who were charged and convicted in connection with that fraud.

         A jury convicted all the defendants of conspiracy to commit healthcare fraud, in violation of 18 U.S.C. § 1349, and also convicted Dr. Rousseau of two counts of healthcare fraud, in violation of 18 U.S.C. §§ 1347 and 2. They now appeal on multiple grounds, including double jeopardy, sufficiency of the evidence, and numerous procedural and evidentiary decisions made by the district court which they claim rendered the trial fundamentally unfair. Rousseau also appeals his Guidelines sentencing enhancements.

         Upon thorough review and with the benefit of oral argument, we affirm on all issues.


         A. Background

         HCSN was set up as a "partial hospitalization program" (PHP), which are designed to provide intensive psychiatric therapy to patients with "serious and acutely symptomatic mental illnesses." United States v. Willner, 795 F.3d 1297, 1302 (11th Cir. 2015). These programs serve as a bridge between restrictive inpatient care, such as a psychiatric hospital, and routine outpatient care. A PHP that complies with federal law and state coverage requirements may seek Medicare reimbursement for its services.

         In accordance with Medicare standards, patients should be referred to a PHP by a psychiatrist or mental health specialist. Incentivizing such referrals through kickbacks violates federal law. 42 U.S.C. § 1320a-7b(b)(2)(A). Qualifying PHP patients must be admitted "under the supervision of a physician pursuant to an individualized, written plan of treatment." 42 U.S.C. § 1395x(ff). Treatment involves intensive, all-day individual and group therapy, which must not be "primarily recreational or diversionary." Id. The attending physician is responsible for managing each patient's treatment, which must be "reasonable and necessary for the diagnosis or active treatment of the individual's condition." Id.

         While Medicare does not prescribe a fixed amount of time that patients should remain at a PHP, stays in excess of three months indicate that treatment is ineffective and no longer appropriate. Decisions to admit and discharge patients must be closely monitored by the attending physician.

         A PHP seeking Medicare reimbursement must also comply with strict documentation requirements. At intake, medical personnel record patients' history, symptoms, and medications. Once enrolled, a patient's progress must be thoroughly charted, from the types of treatment provided to details of participation in specific therapy sessions. This both provides a medical record justifying the patient's continued treatment and ensures that each patient is discharged-or readmitted-consistent with her medical needs.

         B. The Fraud at HCSN

         Such were not the practices at HCSN. From intake to discharge, HCSN organized its business around procuring, retaining, and readmitting patients to maximize billing potential, without respect to patients' health needs. It then ensured patient files complied with Medicare coverage requirements by editing intake information, fabricating treatment plans, and falsifying therapy and treatment notes.

         HCSN's owner, Armando Gonzalez, orchestrated this fraud scheme, which involved coconspirators at every level of the company. Rousseau, the medical director at HCSN's Miami locations, was the attending physician for over $30M of fraudulent billing to Medicare at HCSN-East. Crabtree, Marks, and Salafia were in charge of day-to-day therapy at HCSN-East, where they were also responsible for patient therapy notes.

         The fraud began with patient recruitment. HCSN solicited patients from hospital employees and owners of assisted living facilities in exchange for cash kickbacks. Many of these patients did not qualify for PHP treatment. Upon intake, HCSN employees altered patient profiles in order to conceal disqualifying information, such as evidence that patients suffered from Alzheimer's disease or dementia. HCSN treated patients for inordinately long periods of time-generally at least four months-and then "recycled" patients by discharging them and immediately admitting them to another HCSN location.

         Patient notes and billing sheets were systematically altered to support Medicare claims and to survive Medicare audits. Therapists fabricated therapy notes for absent patients, falsified details from therapy sessions, and "cloned" notes by copy and pasting therapy notes, verbatim, from one patient's file to another's. "Ghost lists" of non-existent patients helped HCSN employees organize "ghost billing" of services that never took place.

         This scheme spanned seven years, involved three HCSN locations, and amounted to over $63M in fraudulent claims.

          C. Procedural History

         HCSN's owner, numerous employees, and beneficiaries of the illegal kickbacks were charged in connection with the healthcare fraud at HCSN. The defendants' indictment charged them with the following: (1) all defendants with conspiracy to commit health care fraud, 18 U.S.C. § 1349; (2) Rousseau with two substantive counts of health care fraud, 18 U.S.C. §§ 1347 and 2; and (3) Crabtree, Marks, and Salafia with two counts of making false statements related to health care matters, 18 U.S.C. § 1035. Two trials ensued.

         At the conclusion of the first trial, the jury acquitted Crabtree, Marks, and Salafia of the false statements counts but failed to reach a verdict on all other counts. At trial, the district court had granted the government's request to deliver an instruction for Pinkerton liability with the false statements jury instruction.[1]Once acquitted of the false statements charges, Crabtree, Marks, and Salafia moved for acquittal on the conspiracy count; they argued that the jury's false statements acquittal necessarily entailed a finding that they were not a part of a conspiracy. The district court denied the motion for acquittal, holding that acquittal on the false statements counts did not foreclose retrial for conspiracy.

         At the defendants' second trial, a jury found all defendants guilty of conspiracy to commit healthcare fraud and found Rousseau guilty of both substantive counts of health care fraud. The district court applied a six-level enhancement to Rousseau's guideline range-a two-level vulnerable victims enhancement and a four-level enhancement for organizing criminal activity involving more than five people. See U.S.S.G. §§ 3A1.1, 3B1.1. The district court sentenced Rousseau to 192 months in prison (100 months below the 292-365 month guideline range) and ordered him to pay $23M in restitution. It sentenced Crabtree, Marks, and Salafia to between five and six years' imprisonment and ordered each to pay over $16M in restitution.


         The defendants now make multiple claims on appeal. We address them in four parts. First, we discuss Crabtree, Marks, and Salafia's double jeopardy argument. Second, we determine whether there was sufficient evidence at trial to uphold the defendants' convictions. Third, we tackle the trial-related claims: whether the district court erred (1) by admitting testimony and evidence about Medicare local coverage determinations, Medicare rules and regulations, PHP standard practices, and testimony regarding illegal kickbacks; (2) by dismissing a tardy juror; and (3) by instructing the jury on deliberate ignorance and aiding and abetting liability. Fourth, and finally, we determine whether the district court properly applied the two Guidelines enhancements to Rousseau's sentence.

         A. Double Jeopardy

         Crabtree, Marks, and Salafia renew their collateral estoppel argument rejected at the first trial. They claim that because the jury acquitted them of the false statements counts-after the district court issued a Pinkerton liability instruction-the jury necessarily concluded as a factual matter that they were not a part of the healthcare fraud conspiracy at HCSN. And because that fact was essential to the conspiracy count, the Fifth Amendment barred the government from retrying them for conspiracy.

         We review a district court's collateral estoppel ruling de novo, and the "party asserting estoppel bears the burden of persuasion that the jury found the facts on which the defense of estoppel rests and that those facts bar another trial about them." United States v. Ohayon, 483 F.3d 1281, 1286 (11th Cir. 2007).

         The Double Jeopardy Clause of the Fifth Amendment does not generally preclude the government from reprosecuting defendants on mistried counts. United States v. Shenberg, 89 F.3d 1461, 1478 (11th Cir. 1996). But the doctrine of collateral estoppel creates an exception to this rule "when an issue of ultimate fact has once been determined by a valid and final judgment, " and when that issue constitutes an essential element of the mistried charge. Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 1194 (1970). In such cases, the Fifth Amendment guarantee against double jeopardy prohibits the government from reprosecuting the defendant for the mistried charge. Id. at 445-46, 90 S.Ct. at 1195.

         Thus, our collateral estoppel double jeopardy analysis involves two steps. "First, [the] court[] must examine the verdict and the record to see what facts, if any, were necessarily determined in the acquittal at the first trial. Second, the court must determine whether the previously determined facts constituted an essential element of the second offense." Ohayon, 483 F.3d at 1286 (internal quotation marks and citation omitted). An "essential element" is a factual, not legal, component of an offense. Id. at 1293. This is an objective inquiry which asks "whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from consideration." Id. at 1286.

         Here, the defendants' double jeopardy argument falls short, because acquittal on the false statements charges did not necessarily determine any factual issue essential to the healthcare fraud conspiracy charge. A rational jury could have acquitted without foreclosing the issue of whether the defendants were part of the healthcare fraud conspiracy at HCSN; therefore, retrial did not violate the Double Jeopardy Clause of the Fifth Amendment.

         We begin with our first task: determining what facts were necessarily decided by the jury at the first trial. Id. Upon thorough review of the indictment, the arguments and evidence put forth at trial, and the jury instructions, we find that an acquittal on the false statements charges necessarily determined that Crabtree, Marks, and Salafia did not knowingly and willfully make materially false statements on six particular patient notes.[2] Nor are they vicariously liable for that crime. But beyond that, "it is far from clear what facts the jury decided when it acquitted" the defendants on the false statements counts, and "[w]e will not ...

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