Eleventh Circuit Court of Appeals - Published Opinions

Tuesday, December 12, 2017

Nerey: Affirming Medicare Fraud Convictions and 60-Month Sentence Over Various Challenges

In United States v. Nerey, No. 16-13614 (Dec. 12, 2017) (Hull, Jordan, Boggs), the Court affirmed the convictions and sentence in a Medicare fraud case.

First, the Court found the evidence sufficient to support his convictions for conspiracy to defraud the US and by receiving kickbacks.  After recounting the "overwhelming" evidence against him, the Court rejected his argument that the evidence was insufficient because four co-conspirators were cooperating witnesses with the government.  Their testimony, even if not corroborated, was sufficient to support a conviction.  And, in any event, it was corroborated by a substantial paper trail and forensic analysis of bank accounts.

Second, the Court rejected the defendant's argument that the prosecutor engaged in misconduct that shifted the burden of proof.  He identified five instances of alleged misconduct, but only one incident -- where the prosecutor told the jury at closing that the defendant "can't explain" an FBI analyst's chart -- potentially shifted the burden.  However, the court sustained an objection to it, provided multiple curative instructions during closing, and the government presented overwhelming evidence of guilt.

Third, the Court concluded that the district court did not abuse its discretion by denying the defendant's motion to interview a juror.  When the jury returned its verdict, a juror wore a T-shirt stating "American Greed," which was also the name of a TV program relating to white collar crime.  The defendant argued that the shirt, which was promoted and sold on the internet with the idea that you can "show the world that you're no sucker," demonstrated his intent to make a statement and influence his fellow jurors based on an outside influence.  The Court agreed that an interview was not required because the defendant failed to lay out the questions he sought to ask or establish that the shirt was in fact linked with the TV program.  And, even if there was a connection, wearing that shirt did not prove his inability to serve as an impartial juror or follow the court's instructions.

Fourth, the Court upheld the admission of Rule 404(b) evidence.  The Court found that some evidence of the defendant's involvement with other home health care agencies was inextricably intertwined with the evidence in this case -- showing how he became involved in the agencies and why they trusted him -- and thus was not subject to Rule 404(b).  Additional evidence of the defendant's involvement as a patient recruiter was relevant to the broader conspiracy and thus relevant.  And evidence of a phone call where the defendant discussed "breaking [a man's] head" if he was a confidential informant was admissible because it went to his specific intent to engage in the conspiracy.  In any event, the Court found any error harmless in light of the overwhelming evidence of his guilt.

Finally, as to his 60-month sentence, the Court rejected his argument that the court miscalculated the Guidelines by making him responsible for the entire amount of the improper benefit conferred on the home health care agencies, which was $2.3 million.  He argued that he should be responsible only for the $250K he received in kickbacks, not for the amount fraudulently billed for the entire conspiracy.  Applying clear error, the Court rejected that argument because the defendant was significantly involved in the overall conspiracy, and his kickbacks were made possible by the conduct of his co-conspirators, which was reasonably foreseeable.