Case: 10-20505 Document: 00511950962 Page: 1 Date Filed: 08/09/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 9, 2012
No. 10-20505 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA
Plaintiff-Appellee
v.
PAULA WHITFIELD
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
4:09-CR-423-4
Before DAVIS, OWEN, and SOUTHWICK, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:*
After a jury trial, Appellant Paula Whitfield was convicted of one count of
aiding and abetting health care fraud, in violation of 18 U.S.C. § 1347, and one
count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349.
She appeals her convictions, claiming insufficiency of the evidence. For the
following reasons, we AFFIRM.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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I.
Whitfield and her codefendants Ezechukwu J. Ohaka ("Ohaka") and Helen
Ehi Etinfoh ("Etinfoh") were each charged with one count of conspiracy to
commit health care fraud, and, in various combinations, with substantive counts
of aiding and abetting health care fraud. Whitfield was charged in only one of
the substantive counts, Count 5, for the filing of a fraudulent Medicare claim on
behalf of Mr. Tommy Lee Reese, Jr. Whitfield and Etinfoh were convicted on all
counts. Ohaka was a fugitive at the time of trial.
Ohaka owned and operated several companies that supplied durable
medical equipment (DME) such as power wheelchairs and scooters to Medicare
and Medicaid beneficiaries. Following Hurricane Katrina, the Medicare
regulations were changed by the addition of the “CR Modifier.” The CR Modifier
allowed a DME supplier to replace DME that had been damaged or lost in a
covered hurricane without providing all of the usual documentation when, due
to the hurricane, it was unable to obtain that documentation. The CR Modifier
did not eliminate Medicare’s eligibility requirements, including that the
equipment had to be prescribed by a doctor and medically necessary. Power
wheelchairs and scooters were not considered medically necessary if the
beneficiary could participate in normal daily living activities with the use of a
walker or cane. The modifier also did not waive certain other regulations,
including that beneficiaries had to pay a 20% copay for all equipment, that it
was therefore illegal for a DME supply company to advertise free equipment,
that beneficiary recruiters could not be paid by commission, and that
beneficiaries had to sign their application forms. Moreover, even under the CR
modifier, the DME supplier had to proceed in "good faith," defined as complying
as fully as possible with Medicare guidelines and obtaining, to the extent
possible, some documentation reflecting that the beneficiary had previously had
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the medical equipment, and that the equipment and missing documentation
were destroyed in a covered hurricane.
The Government proceeded on a theory that Ohaka owned several DME
companies, including OptiMed, MedLinks Holdings, Vitacare, and, later, Luant
& Odera, Inc. (Luant), that he used to commit Medicare fraud. According to the
Government’s evidence, Ohaka would found or purchase a company and use it
to bill Medicare for DME supplies for which beneficiaries were not eligible;
generally, either beneficiaries did not receive the DME, or the amount
reimbursed was for more expensive equipment than the company actually
purchased and delivered. When one of Ohaka’s companies raised suspicions and
came under investigation, the Government argued Ohaka would found or
purchase a new company and use it to continue the fraud. Luant was Ohaka’s
most recent company, and fraudulent claims filed by Luant under the CR
Modifier underlie this indictment.
Whitfield began working for Ohaka as early as the fall of 2007. Her job
was to recruit Medicare beneficiaries. She gathered beneficiary information on
application forms she provided to Ohaka’s company. The company would use
that information to create a claim form it submitted to Medicare. Whitfield was
the sales representative for many fraudulent claims submitted by Ohaka’s
companies.
After a five day jury trial, Whitfield was convicted on both counts. She
moved for a judgment of acquittal at the close of the Government's case at the
end of the trial, which the trial judge denied. She timely appealed. She
challenges the sufficiency of the evidence to support her convictions. She does
not challenge her below-guidelines sentence.1
1
The district court varied downward from the guidelines range of 33 to 41 months to
impose a sentence of 21 months imprisonment followed by three years of supervised release,
with a restitution assessment of $807,781.21.
3
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II.
This Court’s standard of review for these charges was recently stated in
United States v. Grant, as follows:
The court will “view all evidence, whether circumstantial or direct,
in the light most favorable to the government, with all reasonable
inferences and credibility choices to be made in support of the jury's
verdict,” to determine whether “a rational trier of fact could have
found the essential elements of the crime beyond a reasonable
doubt.” United States v. Ford, 558 F.3d 371, 375 (5th Cir. 2009).
The jury “retains the sole authority to weigh any conflicting
evidence and to evaluate the credibility of the witnesses.” United
States v. Loe, 262 F.3d 427, 432 (5th Cir. 2001). “The evidence need
not exclude every reasonable hypothesis of innocence or be wholly
inconsistent with every conclusion except that of guilt,” in order to
be sufficient. United States v. Moreno, 185 F.3d 465, 471 (5th Cir.
1999). However, the government “must do more than pile inference
upon inference upon which to base a conspiracy charge.” United
States v. Mackay, 33 F.3d 489, 493 (5th Cir. 1994) (internal
quotation marks omitted).
— F.3d —, 2012 WL 2054936, at *2 (5th Cir. 2012).
III.
On the substantive count, Whitfield was charged with aiding and abetting
health care fraud. To prove health care fraud, the Government had to show that
(1) Whitfield knowingly and willfully executed, or attempted to execute, a
scheme or artifice (a) to defraud any health care benefit program or (b) to obtain
by false or fraudulent pretenses, representations, or promises any money or
property owned by or under the custody or control of a health care benefit
program; and (2) the scheme or artifice was in connection with the delivery of or
payment for health care benefits, items, or services. 18 U.S.C. § 1347(a);2 see
2
In pertinent part, 18 U.S.C. § 1347 reads as follows:
Whoever knowingly and willfully executes, or attempts to execute, a scheme or
artifice-
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations,
4
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also United States v. Arthur, 432 Fed.Appx. 414, 418 (5th Cir. 2011); United
States v. Hickman, 331 F.3d 439, 445 (5th Cir. 2003). The Government can
establish an intent to defraud by direct or circumstantial evidence. United
States v. Ismoila, 100 F.3d 380, 387 (5th Cir. 1996) (conspiracy to commit wire
fraud); United States v. Garcia, 432 Fed.Appx. 318, 322 (5th Cir. 2011). A
defendant need not have actual knowledge of the health care fraud statute or
specific intent to commit a violation of it. § 1347(b).
To prove a conspiracy to commit health care fraud, the government had to
show that (1) two or more persons made an agreement to commit health care
fraud; (2) that Whitfield knew the unlawful purpose of the agreement; and (3)
that Whitfield joined in the agreement willfully, that is, with the intent to
further the unlawful purpose. 18 U.S.C. §§ 1347, 1349; United States v. Delgado,
668 F.3d 219, 226 (5th Cir. 2012). The agreement between conspirators may be
silent and need not be formal or spoken. United States v. Williams-Hendricks,
805 F.2d 496, 502 (5th Cir. 1986). “An agreement may be inferred from concert
of action, voluntary participation may be inferred from a collection of
circumstances, and knowledge may be inferred from surrounding
circumstances.” United States v. Stephens, 571 F.3d 401, 404 (5th Cir. 2009)
(internal citations and quotation marks omitted); see also Grant, 2012 WL
2054936, at *2.
Whitfield does not dispute that the Government proved that Ohaka,
through his companies, was engaged in a scheme to defraud Medicare. The
Government also clearly established that Whitfield furthered this scheme by
soliciting potential beneficiaries and gathering information from them which she
or promises, any of the money or property owned by, or under the
custody or control of, any health care benefit program,
in connection with the delivery of or payment for health care benefits, items, or
services, shall be fined under this title or imprisoned....
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provided to Ohaka’s companies to demonstrate their entitlement to
reimbursement from Medicare, and that Ohaka’s companies used this
information to submit fraudulent Medicare claims.
Whitfield challenges her convictions based on a claim of ignorance of a
scheme to commit Medicare fraud. Both counts required the Government to
prove that Whitfield acted with knowledge and intent; it had to show that
Whitfield knew Ohaka’s companies were engaged in Medicare fraud, and that
she knew and intended to further this fraud through her actions. She argues the
Government’s evidence was insufficient to sustain its burden on this element.
She claims she did not know about the fraud, because the fraud was confined to
the back office and she had no involvement with submitting Medicare claims or
billing. She claims she gathered beneficiary information and submitted
application forms in good faith, and she neither knew nor intended that this
information would be used to create fraudulent claims.
The Government charged Whitfield with one substantive count, for aiding
and abetting the fraudulent submission of a claim for reimbursement for a power
wheelchair purchased for Mr. Reese.
The main evidence on this point was the testimony of Mr. Reese. Reese
walked into court unaided. He said he is ambulatory, though he usually uses a
walking stick. Reese testified that Whitfield came to his home and asked
whether he would like a new, free scooter. Reese said that he had a scooter at
the time that Whitfield judged to be "about wore out" and which she offered to
replace. He said the old scooter had been prescribed to him by his former doctor
five or six years before when he almost lost his leg due to diabetes. However, he
said his new doctor – his doctor at the time Whitfield visited him – refused to
prescribe him a new one, and he informed Whitfield of this. Reese testified that
Whitfield told him she had contacted his doctor who had agreed he could have
a new scooter, and that she had informed his doctor she was getting him one.
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When the new scooter did not arrive, Reese said he checked with his doctor, and
his doctor told him he never authorized a new chair for Reese. Reese also
testified that his old wheelchair and scooter had been damaged in a hurricane,
but that he is a retired mechanic and had successfully repaired them on his own.
Finally, he testified that Whitfield asked him to go with her around his
neighborhood to introduce her to potential customers. He testified that on more
than one of these trips he confronted her about why his scooter had not yet
arrived. He said she repeatedly reassured him it was on its way. Reese never
indicated that he spoke with any representative of Luant other than Whitfield.
Though Luant billed Medicare $5,000 for a wheelchair for Reese and
received $3,218.96 in reimbursement, Reese never received a chair from Luant.
Reese's testimony about his old scooter still being operational was
corroborated by state Medicaid fraud investigator Russell Bliese, who testified
that he visited Reese twice at his home in April of 2009, approximately 6 months
after Whitfield visited him. Bliese testified that he saw an old electric scooter
outside the home that he estimated to be between 5 and 10 years old. He said
he tested the scooter and it was still operational, and it did not appear to have
suffered any water damage. He also observed a manual wheelchair inside
Reese's home. Bliese testified that Reese told him Whitfield had approached him
and offered him a free wheelchair or scooter, but that he had never received it.
In her own testimony, Whitfield acknowledged that she knew about many
of Medicare’s eligibility requirements, including that DME supplies had to be
“medically necessary,” that they had to be prescribed by beneficiaries’ current
physicians, and that, in the case of Mr. Reese, the CR Modifier required that his
previous chair be inoperable because it had been damaged by a covered
hurricane.
Whitfield’s educational background and experience in the healthcare
industry also support the jury’s implicit rejection of Whitfield’s “ignorance”
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defense. The prosecution established through Whitfield’s testimony the facts
pertinent to her education and experience. Whitfield studied biology for two
years at Texas A&M and received her B.S. in information systems technology
from the University of Houston. In 2006, prior to working for Ohaka, she sold
Medicare advantage plans, a form of health insurance. In her testimony, she
agreed that “to sell the plan, [she] had to be familiar with the regulations or
what the plan provided to explain it to the people that [she was] selling it to.”
She also had worked in the home health care industry, marketing home health
services to doctors’ offices and nursing homes. She agreed that “to market the
services, [she had] to understand who was eligible” to receive Medicare benefits.
Whitfield had also worked for two other DME supply companies. First, in 2006,
Whitfield contracted to work with the Reese Group3 to recruit Medicare
beneficiaries, essentially the same work she would later perform for Ohaka's
companies. Second, on April 3, 2007 – about a year prior to most of the events
here – Whitfield founded her own medical supply company. She denied that this
company ever became active.
Based on Whitfield’s admissions, the jury was entitled to find that
Whitfield knew Medicare’s eligibility requirements and the requirements of the
CR Modifier. Based on Reese’s testimony, the jury was entitled to conclude that
Reese did not meet these requirements, and that Whitfield knew this when she
submitted his application for the equipment. Despite this knowledge, Whitfield
did not include any of this disqualifying information on the application form she
submitted for Reese’s equipment.
The Government also introduced Rule 404(b) evidence reflecting
Whitfield’s knowledge and intent. This evidence included the testimony of two
other beneficiaries, Filma Jean Fagan and James Davis, whom Whitfield had
3
There is no connection between this company and the Reese on whose behalf the
fraudulent claim was filed here.
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recruited and on whose behalf Luant had filed fraudulent claims.4 These
individuals told essentially the same story as Mr. Reese. They said Whitfield
approached them uninvited and offered them a free scooter. Neither was
medically eligible for a scooter because they were both ambulatory, and they
both testified that they never told Whitfield their present doctors had prescribed
the equipment. They also testified that they had previously had scooters that
had been lost or damaged, but not in a hurricane, and that they never
represented to Whitfield that their scooters had been damaged in a hurricane.
They also never indicated they talked to anybody other than Whitfield once their
application was submitted.
Finally, the Government submitted bank records for Ohaka's companies
showing that Whitfield received checks totaling $43,064.20 from them.5 The
checks indicated they were for “medical services,” “delivery services,” or “medical
equipment delivery,” all activities Whitfield admitted she was not engaged in.
While Whitfield claimed she thought she was only working for one of Ohaka's
companies – Vitacare – and had never heard of Luant, her last two paychecks
were issued by Luant.
From this evidence, the jury was entitled to conclude that Whitfield’s
claims of ignorance of the fraudulent scheme were implausible, and that she
acted to further this scheme with the necessary knowledge and intent.
4
For each, Luant billed the Government $5,000 for replacement of a power wheelchair
under the CR Modifier, claiming their previous equipment had been destroyed in Hurricane
Ike. Luant was ultimately paid $3,218.96 by Medicare for each chair and delivered to each a
power scooter costing ~$1,040. Luant charged neither individual the required co-pay. Their
files contained no medical documentation showing their eligibility, nor any documents showing
Luant made any effort to acquire this documentation or confirm their eligibility.
5
One of the checks Whitfield was issued bounced, so the total amount she received was
slightly under $40,000.
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IV.
The evidence outlined above, when viewed in the light most favorable to
the verdict, is more than adequate to sustain the jury’s verdict.
AFFIRMED
10