In U.S. v. Bradley, No. 06-14934 (June 29, 2011), in a 195-page opinion the Court reserved some convictions and upheld others in a prosecution involving medicaid fraud in excess of $30 million.
The Court rejected sufficiency of the evidence challenges to the fraud charges. The Court found that there was sufficient evidence that the defendants knew that Medicaid had a policy not to reimburse twice for medications that had been dispensed, and went to great lengths to conceal the fact that the medications for which they obtained reimbursements had been recycled.
The Court also rejected a challenge to venue. The Court found that when a defendant is charged with failure to file a form, venue lies in a district where the form should have been filed, so long as the government’s choice of venue does not create a constitutional hardship. The Court denied another challenge to venue by noting that a defendant is vicariously responsible for the acts of any co-conspirator, and because some acts occurred in the Southern District of Georgia, venue was proper there.
The Court rejected the argument that the seizure of large numbers of computers and hard drives violated the Fourth Amendment, because the warrant that authorized seizure of “all business records” lacked the requisite particularity. The Court held that the “pervasive fraud” doctrine applied, even though the fraud involved a small percentage of the defendants’ business, because the fraud “infected” numerous individuals and businesses, spread amongst a “myriad of records.”
The Court also rejected the argument that the Fourth Amendment was violated when a law enforcement agent ordered employees to shut down the computer servers while a warrant was being obtained, to prevent the employees from erasing data during the period the warrant was obtained. The Court found that the concern about erasure of date created an exigent circumstance that warranted shutting down the servers without a warrant.
The Court rejected the argument that the admission of evidence of defendants’ wealth was unduly prejudicial, in violation of Fed. R. Evid. 403. The Court found the evidence probative of the defendants’ motive, “even if only slightly so.”
The Court recognized that the admission of extrinsic acts as impeachment evidence violated Fed. R. Evid. 404(b), because the government gave no prior notice of its intent to use this evidence. However, the error was harmless.
The Court rejected one defendant’s challenge to the trial court’s exclusion, on hearsay grounds, of the statements of interlocutors in conversations. The Court found that this defendant sought to introduce these statements to show their truth, in violation of the hearsay rule.
The Court found no abuse of discretion in the trial court’s failure to investigate a juror’s report that two other jurors on the fourth day of trial had prejudged the defendants guilty. The Court found that the trial court’s admonition to the jurors to refrain from premature deliberations sufficed, in light of one juror’s subsequent statement about juror impartiality, and the jury’s eventual conviction on some counts and acquittal on others.
The Court found no error in the dismissal of a juror who had taken painkillers to get through back pain during the trial. The Court found that the dismissal was based on the juror’s poor health, not, as the defense contended, because the juror was the “one holdout” in the defendant’s favor.
Turning to sentencing, the Court found that the district court erred in including patients among the number of victims of the defendants’ medicaid fraud. The district court also erred in enhancing the sentence pursuant to U.S.S.G. § 2B1.1(b)(4) because a defendant was a “fence,” when the defendant was “a thief and not a fence.” However, the enhancement errors did not affect one defendant’s sentence, because the Guideline range remained above the statutory maximum sentence the defendant received. The errors did affect another defendant’s sentence, and the Court vacated this sentence because this defendant might have received a lesser sentence.
The Court found that the district court failed, for purposes of determining the applicable guideline to find, beyond a reasonable doubt, which offense two defendants conspired to commit. The Court therefore vacated these sentences.
Finally, the Court reversed the district court’s appointment of a receiver to marshal the assets of the defendant corporations in order to collect restitution. The Court noted that the government’s authority to seize and garnish property, and ability to obtain discovery under the Rules of Civil Procedure, made the extraordinary remedy of appointment of a receiver “inappropriate.”
