Justia Government Contracts Opinion Summaries

The Medocks’ company, MAS, transported patients to kidney dialysis for Medicare reimbursement. Reimbursement of non-emergency ambulance transport is allowed only if medically necessary for bedridden patients; both a driver and an EMT must accompany any such passenger. Certification of medical necessity (CMN) must be signed by a doctor. A “run sheet” is reviewed by a Medicare contractor other than the ambulance company, such as AdvanceMed, to reduce fraud. AdvanceMed identified MAS as a high biller in Tennessee for dialysis ambulance transport and audited MAS. MAS’s records were missing some CMNs. Covert surveillance resulted in videotapes of patients walking, riding in the front seat, being double-loaded, being driven by single-staffed ambulances, or being transported by wheelchair. MAS had billed the transports as single-passenger and “stretcher required.” Executing a search warrant at the Medlocks’ home, agents seized CMNs and run tickets; some had been altered or forged. The Sixth Circuit reversed a conviction for aggravated identity theft, 18 U.S.C. 1028A, agreeing that misrepresentations that certain beneficiaries were transported by stretcher did not constitute a “use” of identification, but affirmed health-care fraud convictions, rejecting arguments that the court should have instructed the jury that Medicare, not merely a prudent person, was the relevant decision-maker; that Medicare would have reimbursed MAS without their misrepresentations; and that refusal to sever a defendant was prejudicial. View "United States v. Medlock" on Justia Law

DiFoggio worked as an FBI cooperating witness and introduced Medrano to a man purporting to be Castro, a health care consultant. Castro told Medrano that by bribing a corrupt official he could obtain contract approval from Los Angeles County for the purchase of bandages for its hospital system. Castro was an undercover FBI agent. There was no corrupt official. When the medical bandages deal was concluded, Medrano approached Castro about making another deal to involve his friend, Buenrostro. Buenrostro and Castro brought Barta into the discussions; A bribe would be paid to the corrupt official by Castro to obtain a county contract for Sav‐Rx, a company founded by Barta, to provide pharmaceutical dispensing services. Sav‐Rx would service the contract through a business started by Buenrostro and Medrano. Barta wrote a check for $6,500 to Castro. Buenrostro and Medrano were to pay their 35 percent share after that last meeting. Before that happened, they were arrested. In a separate opinion, the Seventh Circuit held that Barta was entrapped as a matter of law. Neither Buenrostro nor Medrano argued entrapment. The Seventh Circuit affirmed their convictions for conspiracy to commit bribery, rejecting challenges to the sufficiency of the evidence and the sentences. View "United States v. Buenrostro" on Justia Law

In 2006, Robinson opened Paideia Academy, a non-profit charter St. Louis charter school. State and federal monies, disbursed through the Missouri Department of Elementary and Secondary Education, exclusively funded the school, and were restricted to operating kindergarten through eighth grade. Robinson directed $242,533 from Paideia to develop a pre-kindergarten child care center. Robinson also worked, beginning in 1990, purporting to inspect parking meters. On weekly timesheets, he always recorded 40 hours, regardless of holidays, and even after parking meter services were outsourced. In 2009, the FBI investigated his “employment,” interviewing former Parking Division employees and watching Robinson’s car. They reasonably suspected that Robinson did not inspect meters. The agents installed, without a warrant, a GPS device on his car while parked on a public street. Tracking confirmed that Robinson did not inspect meters. The government charged Robinson with Paideia-related wire fraud, 18 U.S.C. 1343; two Paideia-related counts of federal program theft, 18 U.S.C. 666(a)(1)(A); and five parking-related counts of federal program theft. The district court denied Robinson’s motion to suppress the GPS evidence, motion to sever counts 1-3 from counts 4-8, and Batson objection to the jury’s composition. At trial, the court rejected his challenges to certain testimony and parking-related jury instructions. The court sentenced him to 24 months’ imprisonment and awarded $419,333 in restitution. The Eighth Circuit affirmed View "United States v. Robinson" on Justia Law

Chicago’s Minority and Women-owned Procurement Program requires companies contracting with the city to hire or subcontract with minority-owned businesses (MBEs). An MBE must be at least 51 percent owned by members of a minority group, and its management and operations must be controlled by those members. RCN, a cable provider, participates in the MBE program. RCN seeks out MBE subcontractors using the city’s directory, where it found defendants in 2003. Defendants, white men, held out their cable installation business, ICS, as an MBE, but used false documentation and hired a black front-man to pose as ICS’s president. ICS fired defendant Giovenco before the fraud was discovered, but he continued to receive checks. In total, RCN paid ICS $8,303,562 before the city investigated. Its members dissolved ICS, trying to avoid detection. Convicted of mail fraud, 18 U.S.C. 1341, Potter was sentenced to 54 months’ imprisonment, and Giovenco was sentenced to 36 months. The Seventh Circuit affirmed, rejecting Giovenco’s claim that, because he no longer worked for ICS at the time of the mailings underlying the charges, he could not be held legally accountable for the scheme, and Potter’s challenge to his sentence, arguing that RCN did not actually suffer a loss. View "United States v. Potter" on Justia Law

Defendants-Appellants David Banks, Kendrick Barnes, Demetrius Harper, Clinton Stewart, Gary Walker, and David Zirpolo were convicted following a jury trial on multiple counts of mail fraud and wire fraud, and conspiracy to commit mail fraud and wire fraud. Defendants contacted numerous staffing agencies to “assist in providing temporary services. Witnesses from multiple staffing companies testified that a Defendant (or someone acting as Defendants’ agent) approached them and expressed the desire for "payrolling" services. The staffing-company witnesses testified that they were induced into believing that Defendants’ companies were either doing business with major law-enforcement agencies or were on the verge of selling a specialized software to these agencies. These witnesses testified that Defendants (or Defendants’ agents) assured them that this alleged law-enforcement business would enable Defendants’ companies to pay the staffing companies’ invoices, and, critically, that they relied on these representations in choosing to do business with Defendants. Trial testimony from representatives of the law-enforcement agencies with whom Defendants claimed to be doing business revealed the falsity of Defendants’ representations to the staffing companies. When questioned about their failure to pay the staffing companies’ invoices, Defendants gave false assurances that payment would be forthcoming, and they continued to imply that they were doing business with large government law enforcement agencies. In the end, forty-two different staffing companies were left with outstanding invoices totaling in excess of $5,000,000, which could not be submitted to the government agencies, which had no business relationship with Defendants’ companies. Defendants were sentenced to terms of imprisonment ranging from 87 to 135 months. Defendants argued on appeal to the Tenth Circuit: (1) their right to a speedy trial was violated when the district court granted multiple continuances of the trial date (at Defendants’ request); (2) the district court compelled co-Defendant Barnes to testify in violation of his Fifth Amendment privilege against self-incrimination and failed to give a proper curative instruction; (3) the district court abused its discretion in excluding the testimony of two witnesses Defendants sought to call at trial; and (4) the cumulative effect of the district court’s otherwise harmless errors prejudiced them and required reversal. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Banks" on Justia Law

Orillo, her husband (a doctor), and another owned Chalice, a home health care provider. Chalice was an enrolled provider with Medicare and could seek reimbursement of home health care through that program. Orillo falsified forms by altering the codes and information that had been completed by the Chalice nurses to make the patient’s condition appear worse and the health care needs greater than the actuality. Those alterations caused Medicare software to generate different reimbursement rates Orillo also aided her husband in paying kickbacks to a Chicago doctor in return for referrals of Medicare patients. Orillo pled guilty to healthcare fraud, 18 U.S.C. 1347 and paying kickbacks to physicians for patient referrals under a federal health care program, 42 U.S.C. 1320a-7b and 18 U.S.C. 2, and was sentenced to 20 months’ imprisonment. Orillo conceded that her scheme caused a loss, to Medicare, in excess of $400,000, and agreed to entry of a $500,000 forfeiture judgment.The district court determined that the loss amount for the healthcare fraud count was $744,481 and ordered her to pay that amount in restitution. The Seventh Circuit affirmed, rejecting Orillo’s argument that the loss and restitution amount should be limited to only those stemming from visible alterations.View "United States v. Orillo" on Justia Law

Greco worked at MetroHealth, a county-owned health-care provider in Cleveland, from 1997 until 2009, supervising independent contractors who worked on MetroHealth construction projects, selecting contractors for small-scale no-bid maintenance projects, and authorizing payment for their work. Greco used his authority to facilitate a bribery scheme set up by his boss and Patel, the vice-president of a construction company. The participants became nervous and Greco took action to hide his involvement in the scheme, but Patel contacted the government and confessed; in exchange for a reduced sentence, Patel provided detailed information about the scheme. Greco was convicted of bribery and conspiracy to commit bribery involving programs receiving federal funds (18 U.S.C. 666(a)(1)(B) and 371), violation of and conspiracy to violate the Hobbs Act (18 U.S.C. 1951), making false tax returns (26 U.S.C. 7206(1)), and conspiracy to commit mail fraud (18 U.S.C. 1349) and was sentenced to 112 months’ imprisonment and required to pay $994,734.84 in restitution to MetroHealth. The Sixth Circuit affirmed, rejecting arguments that the court improperly applied a 12-level enhancement based on an erroneous loss calculation; improperly applied a two-level enhancement for obstruction of justice; and imposed a substantively unreasonable sentence. View "United States v. Greco" on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law

Natale,a vascular surgeon, was compensated by Medicare for repairing a patient’s aortic aneurysm. Another doctor reviewed the post-surgical CT scan, which did not match the procedure Natale described in his operative reports. After an investigation, Natale was indicted for health care fraud related to his Medicare billing, mail fraud, and false statements related to health care. A jury acquitted Natale on the fraud counts but convicted him of making false statements, 18 U.S.C. 1035. The trial court used jury instructions that seemingly permitted conviction for false statements completely unrelated to Medicare reimbursement. The Seventh Circuit affirmed, finding the error harmless, but clarified that under the statute, even conviction for false statements made in connection with items or services still must relate to a “matter involving a health care benefit program.” View "United States v. Natale" on Justia Law

Hill, Director of Risk Management for Detroit Public Schools invited Washington to submit a proposal for a wellness program for DPS employees. Washington and others joined Associates for Learning (A4L) and submitted a proposal quoting $150,000 for a pilot study. Contrary to DPS policy, Hill did not open competitive bidding or execute a written contract, and made payments by wire transfer, rather than by check. Hill, who later left DPS testified that he met with Washington to discuss larger amounts. Washington paid Hill five percent of the invoice amount for assistance in getting the invoices paid. Invoices totaling more than a million dollars for “future work” were paid. The partners met in public places to distribute cash. Washington was convicted of conspiracy to commit program fraud, 18 U.S.C. 371 and 666, and conspiracy to commit money laundering, 18 U.S.C. 1956. The district court enhanced Washington’s base offense level by 22 levels, finding that Washington was an “organizer or leader” and that the amount of loss to DPS was more than $2.5 million, and sentenced her to 84 months. The Sixth Circuit affirmed, finding that Washington was not prejudiced by errors made by counsel and that the evidence was sufficient. View "United States v. Washington" on Justia Law