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United States v. Anieze-Smith

United States Court of Appeals, Ninth Circuit

May 2, 2019

United States of America, Plaintiff-Appellee,
Queen Anieze-Smith, Defendant-Appellant.

          Argued and Submitted February 4, 2019 Pasadena, California

          Appeal from the United States District Court for the Central District of California D.C. No. 2:13-cr-00220-DMG-1 Dolly M. Gee, District Judge, Presiding

          Kathryn Ann Young (argued), Deputy Federal Public Defender; Hilary Potashner, Federal Public Defender; Office of the Federal Public Defender, Los Angeles, California; Richard Wayne Raynor (argued), Law Office of Richard W. Raynor, Redondo Beach, California; for Defendants-Appellants.

          Joseph D. Axelrad (argued) and Cathy J. Ostiller, Assistant United States Attorneys; Lawrence S. Middleton, Chief, Criminal Division; Nicola T. Hanna, United States Attorney; United States Attorney's Office, Los Angeles, California; for Plaintiff-Appellee.

          Before: Ronald M. Gould and Jacqueline H. Nguyen, Circuit Judges, and Roger T. Benitez, [*] District Judge.


         Criminal Law

         The panel affirmed a restitution order in a case in which the defendant was convicted on five counts of health care fraud.

         Rejecting the defendant's challenges to the sufficiency of the evidence supporting the restitution order, the panel held that the district court did not clearly err by finding that each of the power wheelchair claims that the defendant and her co-defendant filed to Medicare was fraudulent, or by finding that the defendant directly harmed the victim.

         The panel rejected as foreclosed by case law the defendant's contention that the restitution order must be limited to the losses traceable to the five executions of the fraudulent scheme on which she was indicted and convicted. The panel explained that because an element of health care fraud is a scheme or pattern of criminal conduct (18 U.S.C. § 1347(a)), the Mandatory Victims Restitution Act of 1996 (MVRA) permits the district court to base restitution on related but uncharged conduct that was part of the defendant's fraud scheme.

         On an issue of first impression in this circuit, the panel held that the MVRA authorizes district courts to impose restitution to all victims for the losses they suffered from the defendant's conduct throughout the course of the fraudulent scheme, even where such losses were in part caused by conduct outside the statute of limitations. Applying that rule to this case, the panel concluded there was no plain error in the district court's restitution order.

         The panel addressed other issues raised by the defendant and her co-defendant in a simultaneously filed memorandum disposition.



         Defendant-Appellant Queen Anieze-Smith was tried and convicted on five counts of health care fraud in violation of 18 U.S.C. § 1347. The district court sentenced Anieze-Smith to five years' probation and ordered her to pay in restitution $814, 445.95, the full amount of Medicare's losses from the fraudulent healthcare scheme. Anieze-Smith appeals, claiming, among other things, that the restitution order unlawfully includes losses resulting from conduct occurring outside the statute of limitations. We affirm.[1]


         Anieze-Smith and her co-defendant, Abdul King Garba, owned and operated International Trade & Consulting, LLC ("ITC"), a durable medical equipment ("DME") supply company located in Van Nuys, California. ITC was a registered Medicare provider, which allowed the company to provide durable medical equipment to Medicare beneficiaries and submit claims to Medicare for reimbursement. Between 2006 and 2009, Anieze-Smith and Garba submitted $1, 890, 433.82 in reimbursement claims to Medicare, and Medicare paid $897, 726.91 on the claims. The claims submitted to Medicare were almost exclusively for power wheelchairs.

         On April 5, 2013, a federal grand jury returned an indictment charging Anieze-Smith and Garba with seven counts of health care fraud. The gravamen of the indictment alleged that Anieze-Smith and Garba fraudulently billed Medicare for medically unnecessary power wheelchairs. DME suppliers may only submit claims for equipment that a physician has certified to be medically necessary and for which requisite paperwork is on file documenting the necessity. A power wheelchair is not medically necessary unless the patient cannot complete activities of daily living without the use of the power wheelchair. If a lesser device, such as a walker or manual wheelchair, will suffice, then the power wheelchair is not medically necessary. This limitation helps to ensure that Medicare's limited funds are not used absent medical necessity. DME suppliers must also conduct a home assessment before delivering the power wheelchair to the beneficiary to ensure that the power wheelchair can be used effectively within the home. The indictment alleged that, between January 10, 2006, and September 15, 2009, ITC submitted to Medicare fraudulent claims totaling approximately $1, 890, 433 for DME that was not medically necessary, and that was sometimes never provided. Before trial, the government moved to dismiss counts six and seven, and the district court granted the motion.

         At trial, the government introduced expert testimony to explain how fraudulent schemes operate. A government expert testified that fraudulent Medicare billing schemes usually originate with "recruiters," who approach vulnerable beneficiaries and convince them to obtain DME, such as power wheelchairs, through Medicare. The recruiters then bring the beneficiaries to "compromised clinics" where doctors or physician assistants prescribe medically unnecessary equipment. Finally, fraudulent DME suppliers may even obtain the prescription without the beneficiary's involvement-often by paying cash for the prescription to the clinic or the recruiter. The DME supplier then bills Medicare for a "blue ribbon package" of a power wheelchair and accessories to maximize reimbursement. Fraudulent DME suppliers may bill Medicare before delivery of the power wheelchair or deliver the power wheelchair without the proper home assessment.

         The special agent who investigated the case testified about the strong indications of fraud in ITC's operations. He explained that the bulk of ITC's patient referrals came from compromised clinics, that kickbacks are usually paid in cash, and that ITC's bank account showed large cash withdrawals that were not attributable to legitimate business expenses. Many of ITC's patient files were missing prescriptions or other documentation of medical necessity, and many others contained identical physician progress notes accompanying prescriptions for power wheelchairs, including some patient files with the same progress notes written by the same doctor on the same day. Twenty-two of the claims submitted to Medicare for reimbursement represented instances where the same power wheelchair was prescribed to both a husband and a wife, often by the same doctor on the same day.

         Of the 229 power wheelchairs ITC billed to Medicare during the course of the scheme, nearly all of them included a full package of accessories. ITC's patient records showed that two power wheelchairs were billed to Medicare and three were delivered to the beneficiary before the power wheelchair was prescribed. An additional 46 claims were billed before the power wheelchair was ...

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