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United States v. Ricard

United States Court of Appeals, Fifth Circuit

April 26, 2019

UNITED STATES OF AMERICA, Plaintiff - Appellee
KIM RICARD, Defendant-Appellant

          Appeal from the United States District Court for the Eastern District of Louisiana

          Before JOLLY, DENNIS, and HIGGINSON, Circuit Judges.

          E. GRADY JOLLY, Circuit Judge.

         Kim Ricard was convicted by a jury of one count of conspiracy to pay and receive kickbacks for referring Medicare patients to a particular health care provider, three counts of receiving such kickbacks for such referrals, three counts of identity theft, and one count of making false statements to a federal agent. The district court sentenced Ricard to a fifty-one-month term of imprisonment as to each count, to be served concurrently, and ordered her to pay $1, 958, 000 in restitution to Medicare. On appeal, Ricard challenges her convictions and her sentence. We affirm Ricard's convictions but vacate her sentence, reverse and vacate the restitution order, and remand for resentencing and dismissal of the restitution order.


         Kim Ricard was hired by Progressive Home Care in 2008. Progressive was a home health agency owned by Milton Diaz that primarily served Medicare patients. As a home health agency, Progressive provided nursing services to homebound patients who require continuing care after being discharged from a hospital. Medicare provides coverage for home health care when a physician certifies home care is necessary. Patients must then be given a list of home health agencies to choose from. Medicare requires that the patient, not the doctor, choose the home health agency. Once patients choose a particular agency to provide the home care services, they are discharged and receive such home health care for sixty days. That home health agency may recertify the patient for additional sixty-day treatment periods until home health care is no longer required. To bill for treatment, a home health agency provides Medicare with the patient's information, including a Medicare Health Insurance Claim Number ("HIC number"), which is a unique number identifying the patient.

         Ricard's role at Progressive was to recruit and refer Medicare patients to Progressive for home care psychiatric treatment. Instead of a traditional salary, Diaz paid Ricard $250 on each occasion that she referred a patient. He later increased that amount to $300 per patient after Ricard requested more money. Unlike other employees at Progressive, Ricard's checks were always in round dollar amounts. The memo line on Ricard's checks often referenced the number of new admissions or recertifications for which Ricard was being paid.[1] She was the highest paid employee at Progressive from 2008 through 2013, earning $331, 389 during that period.

         All of Ricard's referrals to Progressive for home care came from the outpatient psychiatric program provided at Seaside Behavioral Center. It is not incidental that Ricard was in a romantic relationship with Joe Haynes, an administrative person at Seaside. Haynes instructed two psychiatrists employed by Seaside to refer patients to Progressive. Ricard and Haynes demanded that Diaz also pay Seaside's psychiatrists in exchange for such referrals.

         Ricard and Haynes told Diaz that if he stopped paying Ricard per patient referral she would stop referring Progressive patients and move Seaside's patients, whom she had previously referred, to another home health provider. Haynes also threatened to transfer Seaside's patients to other home health agencies if Ricard was not paid more per referral. On March 8, 2013, a Seaside psychiatrist ordered Progressive to "mass discharge all of her patients." According to a Progressive employee, "money issues" between Ricard and Diaz caused Ricard to stop referring patients to Progressive; none of the referred patients had complained to Progressive or asked to be discharged from Progressive's care. On March 12, 2013, Haynes called Progressive three times demanding money owed to Ricard. Haynes and Ricard also called patients they had referred to Progressive and told them to refuse treatment from Progressive or else they would be kicked out of Seaside's day program. Most of these patients ultimately refused treatment from Progressive and were accordingly discharged from Progressive's care.

         In late 2013, after leaving Progressive, Ricard was hired by Abide Home Services, another home health agency. When Ricard first met with Abide's owner, Lisa Crinel, she asked to be paid per patient referral. Crinel told Ricard that Abide did not pay by referral; instead she would receive an annual salary of $50, 000 plus a bonus if she referred over six patients per month. According to Crinel, Ricard was "a little shocked" by this payment structure and told Crinel that she was used to being paid up to $1, 000 per patient. As at Progressive, the only work Ricard did at Abide was soliciting and referring patients. Unlike other marketers employed by Abide, Ricard did not attend orientation or weekly marketing meetings. She also did not go out into the field to market for Abide. Crinel and Ricard would exchange text messages about patient referrals. In one text message, Ricard wrote "I'm sending five face sheets. Let me know if their numbers are good." Crinel testified that "numbers" referred to patient's HIC numbers. A number was "good" if the patient was not connected to another home health agency, allowing Abide to bill Medicare for that patient.

         As when Ricard was with Progressive, all the patients she referred to Abide were from Seaside. Haynes, still at Seaside, continued his practice of calling Ricard's employer to complain, "in a very stern manner," that Ricard should receive more money for referring patients. During Haynes's last phone call with Abide, he yelled and swore at Crinel and threatened to tear up admitting forms that Abide used to bill Medicare because Ricard's paycheck was less than he expected. Ricard ultimately transferred her recruited patients away from Abide.

         In 2014, the Office of the Inspector General of the United States Department of Health and Human Services (OIG-HHS) received a tip from Progressive's bank that Progressive was paying Ricard kickbacks. Special Agent Brian Reel reviewed Ricard's checks and, based on the round number amounts and reference to the number of "admits" and "recerts" in the checks' memo lines, believed Ricard was being paid kickbacks. Agent Reel proceeded to interview Diaz in May 2015. According to Agent Reel, Diaz became visibly nervous when asked about Ricard. Agent Reel also found red flags when examining Medicare data for Progressive. For instance, he discovered that Progressive and Seaside shared nearly fifty patient-beneficiaries, even though Progressive's homebound patients should have been unable to travel to Seaside for outpatient treatment. Additionally, he found it significant that twenty patients referred from Seaside were discharged in February and March 2013. All twenty of those patients were referred by the two Seaside psychiatrists who were receiving kickbacks from Progressive.[2] Agent Reel also obtained a certification from the IRS that Ricard had failed to file federal income tax returns between 2008 and 2014. And Agent Reel discovered that Ricard had lied in a credit application, reporting her monthly income as $3, 500 when, at the time, she was earning approximately $8, 000 per month.

         Accompanied by Special Agent Artie DeLaneuville, Agent Reel arranged a meeting with Ricard at a coffee shop on July 29, 2015. The interview was not recorded or transcribed. Instead, Agent Reel memorialized the interview in a written report. It is unclear when the report was prepared.[3] The report was not admitted into evidence. According to Agent Reel's testimony, he asked Ricard twice whether she was paid per patient referral at Progressive and she denied it each time, saying "there's no way she was paid per patient referral at Progressive." Upon being asked about referral payments, Ricard became "nervous, agitated and jumpy." After her second denial, Agent Reel showed Ricard checks written to her by Progressive and drew her attention to the memo lines referencing referrals, admissions, or recertifications. After looking at the checks, Ricard told Agent Reel that she "had no idea about kickbacks and referrals at Progressive" and that she could not recall the financial agreement that she had with Diaz. She then asked Agent Reel how much he thought she was paid per referral. He responded $250 per referral. Agent DeLaneuville then asked Ricard whether she was paid $250 per referral by Progressive. She did not respond.


         Ricard was indicted on one count of conspiracy to pay and receive health care kickbacks, in violation of 18 U.S.C. § 371 (Count One); three counts of receiving health care kickbacks, in violation of 42 U.S.C. § 1320a-7b(b)(1)(A) (Counts Two-Four); three counts of unlawful possession, transfer, or use of a means of identification, in violation of 18 U.S.C. § 1028(a)(7) (Counts Eight- Ten); and one count of making false statements, in violation of 18 U.S.C. § 1001 (Count Eleven).

         Ricard's indictment for conspiracy, kickbacks, and identity theft stemmed from her involvement with the alleged kickback scheme at Progressive. She was not charged with any acts relating to her work at Abide. Prior to trial, the government notified Ricard that it intended to introduce evidence that Ricard received kickbacks at Abide, arguing that it was intrinsic to the charged crimes or, alternatively, admissible pursuant to Federal Rule of Evidence 404(b).[4] Ricard objected and moved to prohibit its use. The district court, however, overruled Ricard's objection and held the evidence admissible under Rule 404(b). At the close of trial, Ricard moved, pursuant to Federal Rule of Criminal Procedure 29, for a judgment of acquittal, arguing that the evidence against her was insufficient. The district court denied the motion. As part of its charge, the jury was given a deliberate ignorance instruction over Ricard's objection. The jury convicted Ricard on all eight counts.

         Prior to her sentencing, the United States Probation Office (USPO) prepared an initial Presentence Report (PSR). The initial PSR found Ricard's base offense level, pursuant to United States Sentencing Guidelines (U.S.S.G.) § 2B4.1(a), to be eight. The initial PSR also recommended a ten-level enhancement, pursuant to U.S.S.G. § 2B1.4(b)(1)(B), because the kickbacks totaled $249, 300. Based on her total offense level of eighteen and her criminal history category of I, her advisory guideline imprisonment range was twenty-seven to thirty-three months. The government objected to the initial PSR's calculation of the kickback amount, noting that the evidence at trial indicated the actual amount of kickbacks Ricard received was $331, 000. Furthermore, the government argued that the improper benefit conferred, calculated as the total amount of payments Progressive received from Medicare, should be used instead because it exceeded the amount paid in kickbacks. According to the government, that amount was $1.98 million. The USPO issued a final PSR adopting the government's arguments and concluding that $1.958 million was the improper benefit conferred. This calculation resulted in a sixteen-level enhancement. Her revised total offense level of twenty-four produced an advisory guideline imprisonment range of fifty-one to sixty-three months.

         The initial PSR also recommended that Ricard make $249, 000 in restitution to Medicare. The government similarly objected to the victim impact calculation, arguing that it should also be $1.98 million. The USPO agreed with the government's reasoning and, in its final PSR, recommended that Ricard make $1.958 million in restitution to Medicare.

         The district court overruled Ricard's objections to the final PSR and adopted its recommended finding of facts. The court then sentenced Ricard to a fifty-one-month term of imprisonment as to each count, to be served concurrently, and ordered her to pay $1.958 million in restitution to Medicare, jointly and severally with her co-defendant Diaz

         Ricard has timely appealed. She challenges the sufficiency of the evidence as to each count, the district court's evidentiary ruling admitting evidence of the similar scheme at Abide, inclusion of a deliberate ignorance jury instruction, the calculation of her advisory guideline range, and the amount of her restitution order. We consider each challenge in turn.



         We first address Ricard's challenges to the sufficiency of the evidence. In doing so, we consider Counts One-Four together. That is, Ricard's convictions for one count of conspiracy to receive and pay kickbacks and three counts of receiving kickbacks for referring Medicare patients. See 18 U.S.C. § 371; 42 U.S.C. § 1320a-7b(b)(1)(A).

         Ricard preserved her challenge to the sufficiency of the evidence as to Counts One-Four and therefore our review is de novo. See United States v. Eghobor, 812 F.3d 352, 361-62 (5th Cir. 2015). We may only reverse her conviction if no "rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Grant, 683 F.3d 639, 642 (5th Cir. 2012) (quoting United States v. Ford, 558 F.3d 371, 375 (5th Cir. 2009)). We must "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." Id. (quoting Ford, 558 F.3d at 375).

         The Medicare kickback statute "criminalizes the payment of any funds or benefits designed to encourage an individual to refer another party to a Medicare provider for services to be paid for by the Medicare program."[5]United States v. Miles, 360 F.3d 472, 479 (5th Cir. 2004). To obtain a conviction under the statute for receiving kickbacks, the government must prove beyond a reasonable doubt that the defendant (1) solicited or received renumeration, (2) in return for referring an individual for a service, (3) that may be paid under a federal health care program, and (4) that the defendant acted knowingly and willfully.[6] See United States v. St. Junius, 739 F.3d 193, 210 n.18 (5th Cir. 2013) (citing 42 U.S.C. § 1320a-7b(b)(1)(A)). To prove a conspiracy, the government must show the defendant knowingly and voluntarily entered into an agreement with another person to pursue an unlawful objective and committed an overt act in furtherance thereof.[7] See United States v. Gibson, 875 F.3d 179, 187-88 (5th Cir. 2017) (quoting United States v. Njoku, 737 F.3d 55, 64 (5th Cir. 2013)).

         Ricard argues that the government failed to prove that she acted willfully-in other words, that she knew the payments were unlawful. Willfulness in the Medicare kickback statute "means that the act was committed voluntarily and purposely with the specific intent to do something the law forbids; that is to say, with bad purpose either to disobey or disregard the law." United States v. Davis, 132 F.3d 1092, 1094 (5th Cir. 1998) (quoting United States v. Garcia, 762 F.2d 1222, 1224 (5th Cir. 1985)). Under this definition of willfulness, "knowledge that the conduct is unlawful is all that is required."[8] Bryan v. United States, 524 U.S. 184, 196 (1998).

         The evidence here supports a finding of willfulness. We keep in mind that the evidence must be treated in favor of the verdict. The jury could infer from Ricard's suspicious conduct, misrepresentations, and method of compensation that she knew her conduct was unlawful. The jury could also conclude that Ricard shuffled psychiatric patients among home health agencies, based on a desire for profit rather than their medical needs. Cf. United States v. Sanjar, 876 F.3d 725, 746 (5th Cir. 2017) (inferring fraudulent intent when defendant saw patients cycled between services without regard to medical need). She misrepresented her monthly income in a loan application and, during the entirety of her employment at Progressive did not file income tax returns. And Ricard was Progressive's highest paid employee, earning more than the agency's medical providers. See id. (defendants' "substantial profits from the scheme" supported jury's finding of fraudulent intent).

         Ricard argues that she is not a medical professional or an owner of a health care agency and therefore was not required to sign any documentation acknowledging awareness of the Medicare kickback statute, nor did she receive training on Medicare rules and regulations. We, however, have never required that an employee be a health care professional or own a health care agency to willfully violate the Medicare kickback statute. In Njoku, we upheld the conviction of a recruiter for conspiracy to pay and receive kickbacks for patient referrals. 737 at 65-66. And in Sanjar, we found there was sufficient evidence that an office administrator willfully paid kickbacks, or conspired to do so, because she "meticulously monitored patient referrals, tracking patients, their referrers, and the billings on their claims." 876 F.3d at 747.

         Ricard is correct that our previous Medicare kickback statute cases addressing willfulness have more often dealt with medical professionals or health care company owners. See id. 733-35 (doctors, health care company owners, office administrator, and physician assistant); United States v. Gibson, 875 F.3d at 184 (health care company owner); United States v. Nowlin, 640 Fed.Appx. 337, 339 (5th Cir. 2016) (health care company owner). These opinions, however, did not primarily rest on the requirement that medical professionals and health care company owners comply with Medicare rules and regulations in finding that the defendants acted willfully. In Sanjar, we found that the health care company and group-home owners acted willfully because they tracked and monitored patient referrals, received referral fees equivalent to ten percent of the Medicare claims, the group-home owners required payments for referrals, the conspirators cut out a recruiter from the scheme to increase profits, and the payments were made in cash. 876 F.3d at 747. Sanjar did not refer to the requirement that medical professionals and health care company owners must be aware of Medicare rules and regulations when finding that the defendants acted willfully. Similarly, in Gibson, we referred to the defendant's "position of authority," but did not discuss his signing of the Medicare enrollment documents. 875 F.3d at 188. In Nowlin, we did reference this requirement. 640 Fed.Appx. at 344 ("Nowlin personally signed the . . . enrollment applications agreeing to comply with all relevant regulations."). But, in finding that the defendant acted willfully, we also relied on evidence that commissions for referring Medicare beneficiaries were paid monthly in cash at the defendant's home, the recruiters worked only in the field soliciting beneficiaries, and the recruiter did not keep an office or sign a sales contract. See id. Ricard's role as a marketer, rather than a medical professional or health care company owner, does not preclude a finding that she acted willfully.

         Ricard further argues that the evidence tends to show that she believed her payment structure was both lawful and the industry norm. A psychiatric nurse at Progressive, who pleaded guilty to receiving an illegal kickback, testified that when she, the nurse, was arrested she was unclear that receiving referral compensation was wrong. Diaz, who owned Progressive and also pled guilty to the scheme, testified that he learned at seminars that marketers could be paid per patient referral. And Ricard characterizes testimony that she was "a little shocked" that Abide would not pay her per patient referral as showing she believed such payments were standard practice in the home health care industry. A rational juror, however, could temper this evidence with Ricard's cycling of patients, concealment of her income, and disproportionate profits. Thus, we hold that the evidence supports Ricard's convictions on the kickback and conspiracy counts.


         We turn now to Ricard's conviction under the identity theft statute. 18 U.S.C. § 1028(a)(7). A person violates § 1028(a)(7) if he or she (1) "knowingly transfers, possesses, or uses," (2) "without lawful authority," (3) "a means of identification of another person," (4) "with the intent to commit, or to aid or abet, or in connection with, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law." Id. Ricard challenges the sufficiency of the evidence as to the first and fourth elements.

         When Ricard moved for a judgment of acquittal, she did not specifically reference her identity theft counts. Instead she only argued that there was "no evidence that [she] knew that receiving money for patient referrals was wrong." This argument constituted a challenge to the sufficiency of the evidence as to the fourth element-whether her unlawful use of another's identification was in connection with another violation of federal law. Ricard has thus waived all other arguments. See United States v. Phillips, 477 F.3d 215, 219 (5th Cir. 2007). We therefore review her challenge to the fourth element de novo and her challenge to the first element under the manifest miscarriage of justice standard. Id. Under that heightened standard, "a claim of evidentiary insufficiency will be rejected unless 'the record is devoid of evidence pointing to guilt' or if the evidence is 'so tenuous that a conviction is shocking.'" Id. (quoting United States v. Avants, 367 F.3d 433, 449 (5th Cir. 2004)).

         We begin with § 1028(a)(7)'s first element: whether Ricard "knowingly transfer[red], possesse[d], or use[d]" a means of identification of another person. Ricard's identity theft conviction was premised on her possession and transfer of the HIC numbers of three Progressive patients, T.M., S.M., and B.H., in connection with her violation of the Medicare kickback statute; that is, the government contends that Ricard gained unlawful possession of the HIC numbers of these Seaside patients in order to transfer the information to Progressive for its purposes of billing the Medicare program. Ricard argues, however, that the evidence was insufficient to find that she ever transferred, possessed, or used the HIC numbers of T.M., S.M., or B.H. We cannot agree. Although there was no direct evidence presented at trial that Ricard possessed or transferred the HIC numbers of these patients to Progressive, there was sufficient circumstantial evidence from which the jury could reasonably make this inference. Testimony was introduced that, to bill Medicare, a home health agency must provide to Medicare a patient's HIC number. T.M., S.M., and B.H.'s patient files, which contained the referral forms with their HIC numbers, were also introduced as evidence. A Progressive nurse, who treated T.M., testified that if she needed information about a patient she could contact Ricard, who had access to their history, evaluation, and other information. As we have noted above, absent an objection below, our review of Ricard's challenge to this element is under the highly deferential manifest miscarriage of justice standard. The jury could infer that Ricard's access to patient information included their HIC numbers. Because the record is not devoid of evidence pointing to guilt nor is the evidence so tenuous that a conviction is shocking, we reject Ricard's challenge to the first element.

         Now the fourth element: whether Ricard's use, possession, or transfer of the identifications was done with "the intent to commit, or to aid or abet, or in connection with, any unlawful activity that constitutes a violation of Federal law." 18 U.S.C. § 1028(a)(7). Ricard contends that the evidence was insufficient for the jury to find that her use of the HIC numbers was done with the intent to commit a violation of the Medicare kickback statute. Ricard, however, merely reasserts her argument that she did not willfully violate the kickback statute. Because we have already determined that ...

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