United States v. Paula Whitfield , 485 F. App'x 667 ( 2012 )


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  •      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 R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
    Case: 10-20505   Document: 00511950962     Page: 2   Date Filed: 08/09/2012
    No. 10-20505
    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
    2
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    No. 10-20505
    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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    No. 10-20505
    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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    No. 10-20505
    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....
    5
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    No. 10-20505
    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.
    6
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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”
    7
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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.
    8
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    No. 10-20505
    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.
    9
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    No. 10-20505
    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