United States v. Samirkumar Shah ( 2022 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 21-2581
______________
UNITED STATES OF AMERICA
v.
SAMIRKUMAR J. SHAH,
Appellant
______________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(No. 2-16-cr-00110)
U.S. District Judge: Honorable David S. Cercone
______________
Submitted Under Third Circuit L.A.R. 34.1(a)
July 8, 2022
______________
Before: SHWARTZ, KRAUSE, and ROTH, Circuit Judges.
(Filed: July 22, 2022)
Laura S. Irwin
Eric G. Olshan
Office of United States Attorney
700 Grant Street
Suite 4000
Pittsburgh, PA 15219
Counsel for Appellee
Joshua S. Lowther
Lowther Walker
101 Marietta Street, N.W.
Suite 3325
Atlanta, GA 30303
Counsel for Appellant
______________
OPINION
______________
SHWARTZ, Circuit Judge.
Samirkumar Shah appeals his conviction and sentence
for health care fraud. Because the District Court correctly
denied his motions to disqualify the United States Attorney’s
Office (“USAO”), for a continuance, and for a judgment of
acquittal, and because his sentence is procedurally and
substantively reasonable, we will affirm.
2
I
A
Shah practiced cardiology in multiple offices in
Pennsylvania. Among other things, Shah prescribed external
counterpulsion (ECP) treatment, which is designed to increase
blood flow to the heart using compression cuffs around the
patient’s legs while they are lying down. Shah purchased ECP
beds and billed insurers, including Medicaid and Medicare
plans, for ECP treatment.
Medicaid and Medicare have three limitations for
reimbursement of ECP treatment. First, the programs cover
ECP treatment only for patients who suffer from angina (chest
pain). Second, the programs will only reimburse for ECP
treatment that was conducted under a physician’s direct
supervision. Third, the programs restrict billing for
reimbursement. Specifically, a system of codes is used to
identify the service rendered, and each coded service is
assigned a price. ECP treatment is assigned code G0166,
which is a “bundled code” because it includes companion
treatments. 1 App. 197. As result, physicians who bill code
G0166 may not also bill the separate codes for the companion
treatments on the same day “unless they are medically
necessary and delivered in a clinical setting not involving ECP
therapy.” S. App. 6. The ECP bed supplier provided Shah with
guidelines informing him of these limitations.
1
The companion treatments bundled in G0166 include
echocardiograms, Doppler tests, pulse oximetries, and
plethysmographies.
3
Insurers audited Shah’s billing and told him that he
improperly billed ECP treatments by using both the G0166
code and codes for companion treatments and that the medical
necessity of many of his ECP treatments was unsubstantiated.
Although Shah’s agreements with insurers required that he
only seek reimbursement for medically necessary treatments,
and he told one insurer that he instructed his billing department
to remove the incorrect codes, he in fact directed his third-party
billing service to continue billing “[a]ll four codes.” App. 836.
In addition to ignoring insurers’ directives, Shah (1)
prescribed ECP for patients, including an undercover agent,
who did not suffer chest pain, telling some patients that ECP
treatment would make them “younger and smarter” and could
help with conditions including high and low blood pressure,
obesity, erectile dysfunction, and restless leg syndrome, App.
385; and (2) was “very often” not present—nor was any
doctor—to supervise patients’ ECP treatments, App. 457-58.
Shah (1) told his staff that all patients had angina; (2) instructed
staff to “beef[] up” patient files before insurance reviews, long
after treatment was provided, App. 327; and (3) used pre-
printed forms that included angina diagnoses. Notably, during
an interview with the Pennsylvania Attorney General’s Office,
Shah stated that he reported angina diagnoses for patients who
did not have that condition “[f]or reimbursement purposes.”
App. 1151.
B
A grand jury indicted Shah for two counts of health care
fraud in violation of 18 U.S.C. § 1347.
4
On the first day of jury selection, Shah moved to
disqualify the entire USAO and sought a continuance to
conduct additional discovery.
Shah’s disqualification motion arose out of his prior
representation by Tina Miller, who represented Shah until June
2017, and then, ten months later, joined the USAO as a
supervisory Assistant U.S. Attorney (“AUSA”). Shah argued
that because Miller became a supervisor in the office
prosecuting him, there was “both a conflict of interest and an
appearance of a loss of impartiality.” D. Ct. ECF No. 145 at 7.
The District Court denied the motion, noting that it did not “see
any issue of any facts demonstrating a conflict of [interest]”
and emphasizing the need to avoid delaying the trial. App. 67. 2
2
After the Court ruled, it received declarations from
Miller and the two AUSAs handling the trial. Miller stated that
she did not discuss employment with the USAO when she
represented Shah and, once she joined the office, she had no
discussions about or involvement in any cases in which she had
played a role while in private practice. She also represented
that she divulged no confidential information learned during
her representation of Shah to any USAO employee or
investigative agency. The two AUSAs’ affidavits likewise
stated that Miller was not involved in Shah’s prosecution and
did not divulge any client confidences. One AUSA added that
her only discussion with Miller regarding Shah’s prosecution
involved her telling Miller that she was unable to assist on a
separate matter because she, unbeknownst to Miller, “would be
in . . . the trial of [Shah].” App. 90.
After trial, the District Court revisited Shah’s
disqualification motion, again held that disqualification of the
entire USAO was inappropriate “given the lack of . . . Miller’s
5
Shah also sought a continuance so he could have an
expert review 350 patient files seized from his offices. The
Government responded that the records had been available to
him for years and thus a continuance was inappropriate. The
Court denied the request for a continuance as untimely.
C
The trial commenced, and the Government presented
thirty-two witnesses, including Shah’s patients and employees,
the ECP bed supplier, insurers, his third-party billing service,
and law enforcement officers. After the government rested,
Shah moved for judgment of acquittal on Count Two, which
the District Court denied. The jury found Shah guilty on both
counts of health care fraud.
D
The District Court held a sentencing hearing to calculate
the loss to insurers from Shah’s conduct. FBI Special Agent
Brooklynn Riordan testified that, for each insurer, she
calculated (1) the average amount Shah billed and (2) the
average amount the insurer reimbursed Shah, and identified,
by dividing the average amount reimbursed by the average
amount billed, a reimbursement rate. She then multiplied that
rate by the total billing to that insurer, which, across all
insurers, yielded a total loss of $5,919,100.00. The
Government recommended reducing the total loss amount by
50%, which had the effect of treating half of Shah’s billing for
involvement in the government’s prosecution of defendant,”
and declined to hold an evidentiary hearing. App. 50.
6
ECP treatment and companion codes as legitimate, even
though there was no evidence that he ever legitimately used
those codes. The District Court accepted the loss calculation
over Shah’s objection.
The Court sentenced Shah to concurrent terms of 78
months’ imprisonment and three years’ supervised release and
ordered that he pay $1,234,983.60 in restitution.
Shah appeals.
II 3
A
We will address, in turn, Shah’s challenges to the
District Court’s orders denying his motions to disqualify the
entire USAO, for a continuance to conduct additional
discovery, and for judgment of acquittal on Count Two.
14
The District Court properly denied Shah’s motion to
disqualify the entire USAO. First, the District Court’s decision
3
The District Court had jurisdiction under 18 U.S.C.
§ 3231. We have jurisdiction under 28 U.S.C. § 1291 and 18
U.S.C. § 3742(a).
4
“Our standard of review on an attorney
disqualification issue includes both deferential and de novo
elements. To the extent that the district court made factual
findings, our review is for clear error . . . . [W]e exercise
plenary review to determine whether the district court’s
disqualification was arbitrary in the sense that the court did not
7
was not arbitrary. We have recognized that “[a]s long as the
court makes a ‘reasoned determination on the basis of a fully
prepared record,’ its decision will not be deemed arbitrary.”
United States v. Stewart, 185 F.3d 112, 120 (3d Cir. 1999)
(quoting United States v. Voigt, 89 F.3d 1050, 1075 (3d Cir.
1996)). Here, the District Court complied with its obligations,
as it heard oral argument and received written submissions
from both Shah and the Government on this issue and made its
decision based on a complete record, including declarations
from Miller and the two AUSAs handling Shah’s trial. Thus,
we review the Court’s ruling for abuse of discretion. See
Whittaker, 268 F.3d at 194.
Second, the District Court did not abuse its discretion.
Attorneys practicing before the United States District Court for
the Western District of Pennsylvania must adhere to the
Pennsylvania Supreme Court’s Rules of Professional Conduct.
See W.D. Pa. L. Civ. R. 83.3(A)(2); Pa. Const. art. V § 10.
Under the Pennsylvania rules, a lawyer “currently serving as a
public officer or employee . . . shall not . . . participate in any
matter in which the lawyer participated personally and
substantially while in private practice.” 204 Pa. Code R.
1.11(d). While the lawyer who switches sides “is of course
disqualified from participating in the case[,] . . . individual
rather than vicarious disqualification is the general rule.”
Commonwealth v. Miller, 422 A.2d 525, 529 (Pa. Super. Ct.
appropriately balance proper considerations of judicial
administration against the United States’ right to prosecute the
matter through counsel of its choice . . . . If the disqualification
was not arbitrary, we use an abuse of discretion standard . . . .”
United States v. Whittaker, 268 F.3d 185, 193-94 (3d Cir.
2001).
8
1980) (quotation marks and citation omitted); see also 204 Pa.
Code R. 1.11(d) cmt. (2) (“Because of the special problems
raised by imputation [of a conflict of interest] within a
government agency, [Rule 1.11(d)] does not impute the
conflicts of a [government] lawyer to other associated
government officers or employees, although ordinarily it will
be prudent to screen such lawyers.”). This is so because
disqualifying an entire prosecutor’s office, rather than just the
conflicted attorney, would impose substantial costs on
taxpayers because it would trigger the need to appoint special
prosecutors each time a member of the defense bar switches
sides. See, e.g., Miller, 422 A.2d at 529; Commonwealth v.
Harris, 460 A.2d 747, 749 (Pa. 1983) (calling such an approach
“simply not viable”). Furthermore, it would not address the
true concern: to be sure that “the acts of a public prosecutor
have [not] actually tainted the proceedings.” Harris, 460 A.2d
at 749. Because actual taint must be shown, the mere
“appearance of impropriety” is insufficient to support
disqualification of an entire office. 5 See id.
To avoid taint, USAOs use methods to wall off the
attorney from cases in which he played a role while in practice.
Disqualification of an entire USAO is required only when
screening devices, aimed at ensuring side-switching counsel is
in no way involved in the case giving rise to the conflict, were
5
Shah’s reliance on People v. Shinkle, 415 N.E.2d 909(N.Y. Ct. App. 1980), is misplaced. Shinkle disqualified the
entire District Attorney’s office because of “the unmistakable
appearance of impropriety,” id. at 920, a rationale that is not a
basis for disqualifying government counsel under
Pennsylvania’s ethics rules, see Harris, 460 A.2d at 749;
Miller, 422 A.2d at 529.
9
not used or were ineffective. United States v. Goot, 894 F.2d
231, 234-35 (7th Cir. 1990); see United States v. Caggiano,
660 F.2d 184, 191 (6th Cir. 1981) (holding that because an
attorney was separated from all participation on matters
affecting his former client, “disqualification of an entire
government department . . . would not be appropriate”).
Here, the affidavits from Miller and the two AUSAs
who tried Shah showed Miller was properly screened. Miller
stated that she had “been recused and walled off from any
involvement or oversight” in cases where she represented a
defendant, including Shah’s matter. App. 84. To implement
the ethical screen, Miller told attorneys and supervisors
assigned to cases from which she was recused that she could
have no involvement in those cases. As to Shah specifically,
Miller stated that she neither “participated . . . in the
prosecution or supervision of this case” nor “divulged any
confidential information [she] learned” about Shah. App. 84-
85. The trial AUSAs confirmed that Miller “has not
participated in the [Shah] case in any manner” nor “divulged
[to them] client confidences.” App. 87, 90. Based on these
sworn statements, the District Court did not clearly err in
finding that Miller was screened from Shah’s prosecution. Cf.
Commonwealth v. Ford, 122 A.3d 414, 418 (Pa. Super. Ct.
2015) (remanding where trial court disqualified the entire
district attorney’s office because the record did not indicate
whether confidential information was disclosed or a “sufficient
fire wall ha[d] been . . . erected” and thus did not “support an
exception to the general rule, i.e., [did not support]
disqualification of the entire [District Attorney’s] Office”).
10
Moreover, Shah has not shown that the ethical screen
was ineffective. 6 In fact, he concedes that he has no evidence
that the denial of the disqualification motion prejudiced him in
any way. See Caggiano, 660 F.2d at 191 (reversing order
disqualifying entire USAO because, in part, “no prejudice has
resulted to anyone in this case”). Instead, Shah simply
suggests that Miller was inevitably involved in his prosecution
because of her supervisory duties. In support, he cites the
decision not to assign one of the trial AUSAs additional cases
to allow her to work on Shah’s case and the absence, in the
AUSAs’ affidavits, of information about who supervised them.
Shah also relies on State v. Tippecanoe County Court, 432
N.E.2d 1377, 1379 (Ind. 1982), in which the Indiana Supreme
Court concluded an entire district attorney’s office was
properly disqualified because the prosecutor had
“administrative control over the entire staff.” Here, however,
there is no evidence that Miller exercised any control over the
attorneys prosecuting Shah. To the contrary, she swore that
she did not “participate[] or cooperate[] in the prosecution or
supervision of [his] case,” App. 84, was never the direct
6
Shah asserts that the ethical screen was ineffective
because the trial AUSAs “found out” about Miller’s recusal
from the docket, Appellant’s Br. at 16, but the attorneys’
subjective understanding does not indicate that Miller did not
satisfy her ethical obligations to notify attorneys in the office.
In addition, United States v. Schell, 775 F.2d 559 (4th Cir.
1985), does not help Shah. Unlike this case, in Schell, there
was some evidence suggesting that the side-switching AUSA
disclosed his former client’s confidences, and this led the court
to question the effectiveness of the ethical screen there. Id. at
566. There is no indication here that Miller had any
discussions about Shah with anyone.
11
supervisor of the trial AUSAs, and would “not be involved in
evaluating their performance in prosecuting the Shah matter,”
App. 85. Any decision Miller made regarding the AUSA’s
other cases has no bearing on Shah’s prosecution.
Furthermore, Shah points to no requirement that the USAO
identify those who supervised the Shah prosecution in her
stead, and he did not rebut her sworn statement that someone
else handled the supervisory duties in Shah’s case.
Thus, the District Court did not abuse its discretion in
denying Shah’s disqualification motion. 7
2
The District Court also acted within its discretion in
denying Shah’s motion for a continuance on the first day of
jury selection so that he could have an expert examine his
patient files. Denial of a continuance “constitutes an abuse of
discretion only when it is ‘so arbitrary as to violate due
process.’” United States v. Kikumura, 947 F.2d 72, 78 (3d Cir.
1991) (quoting Ungar v. Sarafite, 376 U.S. 575, 589 (1964)).
In this case, a continuance was not warranted. First,
Shah had access to the files since his 2016 indictment pursuant
7
The District Court also acted within its discretion in
declining to hold an evidentiary hearing. While such a hearing
may be useful in some cases, it is not required. Goot, 894 F.2d
at 237. Here, the Court had affidavits from Miller and the trial
AUSAs demonstrating an effective ethical screen was in place,
and Shah presented nothing to show that Miller played any role
in his case or disclosed any information she learned while
representing him. See id.12
to Federal Rule of Criminal Procedure 16(a)(1)(E), and his
prior counsel acknowledged receipt of a notice providing that
he could inspect and copy all seized records. Moreover, Shah
does not dispute that his counsel received at least four letters
in 2018 and 2019 reflecting that “[e]vidence gathered during
the course of the searches . . . is available for your inspection,
upon request,” S. App. 101, and he concedes that he did not
ask for access before trial. 8 Second, Shah requested the
continuance at the start of trial without providing any
explanation for the late request and despite receiving other
continuances. Cf. United States v. Irizarry, 341 F.3d 273, 305-
06 (3d Cir. 2003) (denying continuance for discovery
requested two weeks before trial despite recent superseding
indictment). Therefore, the District Court did not abuse its
discretion by denying the requested continuance. 9
8
To the extent Shah argues his counsel was ineffective
in not requesting his patient files earlier, such a claim is
generally not cognizable on direct appeal. United States v.
Givan, 320 F.3d 452, 464 (3d Cir. 2003).
9
Moreover, Shah has not shown that he suffered any
prejudice from the lack of further discovery. Although he
asserts that his patient files would reveal other symptoms that
could support angina diagnoses, trial testimony showed that his
files contained false information, he revised patient files before
insurance reviews to “make them . . . sound better,” App. 327,
and he regularly recorded angina diagnoses regardless of
whether the patient expressed chest pain—the defining
characteristic of angina.
13
3 10
The District Court properly denied Shah’s motion for a
judgment of acquittal on Count Two. Count Two charged Shah
with health care fraud by knowingly billing insurers for ECP
treatments using both the G0166 code and companion
treatment codes already encompassed by G0166. To convict
Shah of health care fraud, the Government was required to
prove, among other things, that Shah acted with the intent to
defraud the insurers who provided medical benefits. United
States ex rel. Doe v. Heart Solution, P.C., 923 F.3d 308, 319
(3d Cir. 2019); 18 U.S.C. § 1347.
Viewing the record in the light most favorable to the
Government, a reasonable jury could have found Shah acted
with intent to defraud. First, the evidence showed that Shah
knew that the G0166 code was not to be billed with codes for
component treatments on the same day. Second, the evidence
demonstrated that Shah disregarded the billing rules. Over his
third-party billing service’s objection, Shah directed the
service to continue billing “[a]ll four codes.” App. 836.
Although Shah argues that he eventually stopped billing
multiple codes—and told one insurer in 2011 that he instructed
his billing department to bill only G0166—a reasonable jury
could find that, by instructing the third-party billing service to
continue billing using both code G0166 and the codes for the
10
We exercise plenary review over an order denying a
motion for judgment of acquittal, United States v. Smith, 294
F.3d 473, 477 (3d Cir. 2002), and view the record “in the light
most favorable to the prosecution,” United States v. Garner,
961 F.3d 264, 274 (3d Cir.), cert. denied, 141 S. Ct. 932 (2020).
14
companion treatments despite being told he should not, Shah
acted with intent to defraud insurers.
Because a reasonable jury could have found Shah knew
the billing requirements for ECP treatment and deliberately
ignored them, the District Court properly denied his motion for
judgment of acquittal on Count Two.
B 11
Shah also argues that his sentence is both procedurally
and substantively unreasonable.
1 12
In reviewing the procedural reasonableness of a district
court’s sentence, we focus on, among other things, whether the
district court correctly calculated the applicable Guidelines
range. United States v. Merced, 603 F.3d 203, 215 (3d Cir.
11
“We review the factual determinations underlying a
sentence for clear error.” United States v. Douglas, 885 F.3d
145, 150 n.3 (3d Cir. 2018); see also United States v. Brennan,
326 F.3d 176, 194 (3d Cir. 2003) (reviewing loss calculation
for clear error).
12
A district court “need only make a reasonable estimate
of the loss,” based on available information in the record,
United States v. Ali, 508 F.3d 136, 145 (3d Cir. 2007) (quoting
U.S.S.G. § 2B1.1 cmt. 3(C)), and it “need not reach a precise
figure,” United States v. Tupone, 442 F.3d 145, 156 (3d Cir.
2006). “[T]he government bears the burden of establishing, by
a preponderance of the evidence, the amount of loss.” United
States v. Fumo, 655 F.3d 288, 310 (3d Cir. 2011).
15
2010). Shah disputes the District Court’s loss calculation,
which triggered a sixteen-level increase to his base offense
level under U.S.S.G. § 2B1.1(b)(1)(I).
At the sentencing hearing, Special Agent Riordan
testified that she examined insurers’ data for claims involving
ECP code G0166 together with the codes for the companion
treatments on the same day. Riordan totaled the average
amounts reimbursed by each insurer and endorsed a 50%
reduction of that amount. Given evidence suggesting that no
ECP charges were legitimate, 13 Riordan testified that the 50%
reduction yielded a “conservative” estimate. App. 1469-70.
The resulting loss calculation was $2,959,550.00, with
$1,296,502.00 coming from Medicare and Medicaid plans.
Shah’s challenge to the loss calculation method fails.
First, the average reimbursements were based on the insurance
claims data, and not Shah’s patient files as he contends.
Relying on the claims data was appropriate here given the
evidence that Shah’s patient files contained false information.
Second, witness testimony about Shah’s billing practices
support the “reasonable estimate” of loss from Shah’s health
care fraud scheme. United States v. Kolodesh, 787 F.3d 224,
239-40 (3d Cir. 2015). Shah instructed his third-party biller to
13
Indeed, as the District Court observed in its discussion
of the 50% reduction, “the vast majority of the submitted
claims under consideration were fraudulent” because any of
the following factors were present: (1) patient without a
qualifying condition; (2) records “fraudulently
created . . . after-the-fact;” (3) ECP treatment administered
when a physician was not present; or (4) billing of unbundled
codes without justification. App. 48-49.
16
continue billing “[a]ll four codes” despite insurers’ warnings
against such billing. App. 836. In addition, insurers notified
Shah that he improperly submitted unbundled bills that were
not substantiated by medical necessity. Third, treating 50% of
Shah’s ECP billing as legitimate is generous to Shah given the
“extensive and pervasive” nature of his scheme. See United
States v. Hebron, 684 F.3d 554, 563 (5th Cir. 2012). Fourth,
and relatedly, estimation was the only means to calculate the
loss. Shah’s records contained fraudulent information. Thus,
they did not provide a reliable basis to determine if any of the
ECP treatments were medically necessary. See id. (affirming
loss calculation because the defendant “should not reap the
benefits of a lower sentence because of his ability to defraud
the government to such an extent that an accurate loss
calculation is not possible”); United States v. Miell, 661 F.3d
995, 1001 (8th Cir. 2011) (affirming loss calculation that
subtracted average amount defendant returned—rather than
actual amount, due to practicality of reviewing over 2,500
files—because proceeds “were systemically tainted with
fraud” such that “it was difficult, if not impossible, to give [the
defendant] any credit for parts of his claims that might have
been legitimate”). 14
14
Shah cites United States v. Jones, 641 F.3d 706 (6th
Cir. 2011), but that case is distinguishable. Among other
things, the Jones court called the extrapolation method used
there “into question” because it appeared the district court
“[did not] even realize[] that . . . fifty-four [of over 250] files
were missing and . . . did not make a finding as to whether they
were fraudulent.” Jones, 641 F.3d at 712. Here, in contrast,
the District Court found that because Shah would “fraudulently
create [patient] files after-the-fact and solely for the benefit of
17
For these reasons, Shah’s procedural challenge fails.
2
Shah’s sentence was also substantively reasonable as
we cannot say that “no reasonable sentencing court would have
imposed the same sentence on that particular defendant for the
reasons the district court provided.” United States v. Tomko,
562 F.3d 558, 568 (3d Cir. 2009) (en banc). First, the sentence
is within the applicable Guidelines range of 78 to 97 months,
U.S.S.G. § 5A, so we may presume that it is reasonable, Rita
v. United States, 551 U.S. 338, 347 (2007).
Second, considering the totality of the circumstances,
Tomko, 562 F.3d at 567, Shah’s sentence was not greater than
necessary given the seriousness of his offense and the need for
specific deterrence, 18 U.S.C. § 3553(a)(2)(A), (B). As to
seriousness, Shah billed insurers for millions of dollars in ECP
treatments where they were either not medically necessary for
the patient or delivered without the required physician
supervision or both.
As to the need for specific deterrence, Shah twice failed
to appear for his court dates, leading the Court to issue arrest
warrants. His failure to appear as required by court order was
consistent with his flagrant disregard for his obligations to his
patients to provide only medically necessary treatment and to
follow the rules ensuring he was reimbursed for only such
receiving payment,” records that could establish which
treatments were fraudulent likely “did not exist.” App. 47-48.
18
services. His conduct reflects that he did not believe the rules
applied to him.
Because we cannot say that no reasonable sentencing
court would have imposed the same sentence, Shah’s
substantive challenge fails.
III
For the foregoing reasons, we will affirm.
19