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United States v. Crinel

United States District Court, E.D. Louisiana

June 16, 2015

UNITED STATES OF AMERICA
v.
LISA CRINEL, ET AL., SECTION:

ORDER AND REASONS

SUSIE MORGAN, District Judge.

This is a criminal action stemming from an alleged scheme to commit healthcare fraud, and to pay and receive illegal healthcare kickbacks. Four defendants have moved to dismiss the indictment.[1] The questions presented are two-fold. First, the Court must determine whether the entire indictment should be dismissed for alleged misstatements of law before the grand jury. If not, the Court must determine whether certain overt acts should be dismissed under Federal Rule of Criminal Procedure Rule 12(b)(3)(B). For the reasons that follow, the motion is DENIED in its entirety.

BACKGROUND[2]

On March 12, 2015, a federal grand jury in the Eastern of District of Louisiana returned a twenty-six count indictment. Count 1 charges Abide and seventeen codefendants with an elaborate conspiracy to commit healthcare fraud. Count 2 alleges a conspiracy involving eleven defendants to pay and receive illegal healthcare kickbacks. The allegations of Count 2 largely summarize and build upon the allegations in Count 1. Counts 3 through 22 allege substantive acts of healthcare fraud related to six individual Medicare beneficiaries.

DISCUSSION

The arguments for dismissal are predicated on alleged deficiencies in Count 2, which charges a conspiracy to violate the Medicare anti-kickback statute.[3] The statute provides in relevant part as follows:

(1) whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind-
(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or....

(2) whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person-

(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program....
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25, 000 or imprisoned for not more than five years, or both.[4]

The statute also contains a safe-harbor provision which excepts from Paragraphs (1) and (2) "any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services."[5] Defendants argue Count 2 erroneously charges certain referral fees as illegal kickbacks, [6] when, according to the indictment, those fees were paid to Abide employees[7] and therefore covered by the safe-harbor provision. According to Defendants, this error demonstrates "the Government plainly misinformed the grand jury about [the safeharbor provision] which... necessarily tainted the entire grand jury proceeding and resulted in a facially deficient indictment charging innocent conduct as crime."[8]

Because the Government's presentation to the grand jury was legally deficient, Defendants contend the entire indictment should be dismissed with prejudice. Alternatively, they argue the Court should strike from the indictment those overt acts which allege the payment of ...


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