Eleventh Circuit Court of Appeals - Published Opinions

Friday, August 02, 2013

Vernon: Anti-Kickback convictions stand

In U.S. v. Vernon, No. 12-12767 (July 26, 2013), in an 84-page opinion, the Court reversed the district court’s granting of a judgment of acquittal on violation of the Anti-Kickback statute, 42 U.S.C. § 1320a-7b(b), and affirmed convictions of health care fraud and violations of the Anti-Kickback statute. The scheme involved an Alabama specialty pharmacy’s payment of kick-backs for referrals of hemophilia Medicaid patients to receive highly profitable hemophilia “factor medication.” The Anti-Kickback statute specifically prohibits such payments. The Court rejected the argument that the Anti-Kickback statute was limited to improper doctor referrals, finding that it encompassed persons who received kickbacks even though they themselves could not prescribe medicine. The Court rejected the argument that the evidence did not such that the defendants acted “willfully,” pointing out that their own corporate compliance plan advised them to comply with federal anti-kickback laws. The Court rejected a duplicitous indictment argument, pointing out that the district court found it was untimely raised in the district court, and the argument was therefore waived. The Court also rejected challenges to jury instructions, finding, on “plain error” review, that the indictment and the trial evidence made a incorrect jury verdict “highly unlikely.” Again applying “plain error” review, the Court rejected a constructive amendment argument, finding that if anything the jury instructions “narrowed” the range of conduct that could be the basis for conviction. The Court also rejected a “good faith reliance on counsel’s advice” defense, finding that the jury could have relied on the fact that a defendant continued to pay kickbacks even after an attorney specialized in health care regulation advised him that he could not fit his payment relationship with a person referring patients under a kickback “safe harbor.” The Court also rejected a defendant’s challenge to a conspiracy conviction, pointing out that he joined the conspiracy to buy himself a 2008 Chevrolet Silverado 1500 pickup truck.