United States v. Devore, Marla A. ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 02-4222 & 02-4224
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
ROBERT T. MITRIONE and MARLA A. DEVORE,
Defendants-Appellants.
____________
Appeals from the United States District Court
for the Central District of Illinois.
No. 00-CR-30021—Jeanne E. Scott, Judge.
____________
ARGUED SEPTEMBER 22, 2003—DECIDED FEBRUARY 9, 2004
____________
Before ROVNER, EVANS, and WILLIAMS, Circuit Judges.
EVANS, Circuit Judge. Dr. Robert T. Mitrione, a psychia-
trist, and Marla A. DeVore, his office manager, were in-
dicted on charges of Medicaid and Medicare fraud. The
alleged fraud involved billing for services that were not
provided (ghost billing), overstating what services were
provided (upcoding), and billing for services provided by
others but declaring that Dr. Mitrione provided the service
(substitute billing). The bulky indictment charged Mitrione
and DeVore with one count of conspiracy to defraud the
United States, in violation of 18 U.S.C. § 371, eight counts
of mail fraud, in violation of 18 U.S.C. § 1341, five counts of
filing false claims, in violation of 18 U.S.C. § 287, and one
2 Nos. 02-4222 & 02-4224
count of health care fraud, in violation of 18 U.S.C. §§ 1347and 2. After one of the mail fraud counts was dismissed,
a jury, after a 3-week trial, convicted Mitrione of everything
except two of the counts and DeVore on 10 of the 14 counts
against her. After the verdict, the defendants filed a motion
for new trial based on newly discovered evidence claiming
that a government witness committed perjury during the
trial. The district court judge found that perjury indeed
occurred and that it affected all of the defendants’ counts of
conviction except the two that only involved substitute
billing. A new trial was ordered for all but these two counts,
but the government decided not to retry the case. Mitrione
was sentenced to a term of 23 months and DeVore to 15
months. Restitution for each was set at $11,255.65.
Mitrione and DeVore appeal, raising a number of issues,
but we will mention only those that have arguable merit.
Before getting to that, we begin with the facts, with an
emphasis on the “substitute billing” charges. And the facts,
as they must be at this stage of the case, are presented in
the light most favorable to the verdict.
Dr. Mitrione established a psychiatric practice in Spring-
field, Illinois, in the early 1990’s. With his wife, Cecelia,
who was his assistant at the time, he learned the billing
aspect of the business. In 1991, Mitrione applied to become
a Medicaid provider with the Illinois Department of Public
Aid (IDPA), the agency that administers the program in
Illinois. Both Mitriones received IDPA billing training,
which included the handling of forms and CPT1 codes. Dr.
Mitrione also received an IDPA provider manual for
physicians and signed an IDPA agreement which included
specific requirements for billing Medicaid. He agreed to
1
CPT refers to “Current Procedural Terminology.” CPTs are
listed in a book of codes used for medical billing which is pub-
lished by the American Medical Association.
Nos. 02-4222 & 02-4224 3
comply with all current and future policy provisions as set
forth in the applicable medical assistance handbooks. At the
time, one policy provided that physicians could not be paid
under Illinois Medicaid for psychiatric services provided by
employees under their supervision. The handbook for
physicians provided:
The provision of psychiatric services is limited . . . and
must be personally provided by the physician who
submits charges. Services provided by a psychologist,
social worker, etc. are not reimbursable.
Mitrione also enrolled as a provider with the Medicare
Part B system, which, like Medicaid, is a “fee for service”
program. Under certain circumstances, Medicare (unlike
Illinois Medicaid) allows providers to delegate certain
psychological services to others in their employ. Medicare
regulations require those services to be (1) medically nec-
essary; (2) an integral yet incidental part of a physician’s
professional service; (3) commonly provided in a physician’s
office; (4) either rendered without charge or included in the
physician’s bill; (5) representative of an expense incurred by
the physician or nonphysician in his or her professional
practice; (6) performed under the direct supervision of the
physician, nonphysician, or physician-directed center; and
(7) initiated or managed by the employing physician.
The Medicare manual states that to fulfill the “direct
supervision” requirement, a physician—not a proxy—must
be present in the same office so he can intervene in case an
emergency arises. The Medicare rules did not allow pay-
ment for the services of unlicensed mental health providers,
even if a physician was in the area when the service was
provided.
In 1992, Mitrione expanded his practice to include patient
care at the Mental Health Center of Central Illinois (MHC),
a state-funded, nonprofit mental health clinic in Spring-
4 Nos. 02-4222 & 02-4224
field. Mental health clinics funded by the State of Illinois
differ from private physician practices. Specifically, these
clinics are permitted to bill Medicaid for nonphysician
services.
In September 1994, the Mitriones fell behind in their
billing. It was at that time that Mitrione brought Marla
DeVore, a counselor whom he met at MHC, into his practice
as a new office manager. He also moved his office to another
site and renamed it Mitrione and Associates (M&A).
Mitrione and DeVore apparently got along well— they were
married in 2001 (Mitrione and Cecelia were divorced in
1997) after the indictment in this case was returned.
When she came on board, DeVore recruited Shari
McGowan, a nurse at the MHC, to help her set up a billing
system. DeVore taught McGowan how to enter billing in-
formation on M&A’s computer.
DeVore and Mitrione designed a “superbill” which
contained the five codes primarily used in the practice.
Typically, the doctor or a therapist who provided the service
placed his name on the superbill and added a checkmark
next to the code to indicate the service provided. The
superbills, therefore, provided essential information that
M&A employees used to prepare claim forms. The evidence
at trial disclosed that soon after Mitrione and DeVore
became aware of official inquiries into their billing prac-
tices, they ordered the destruction of several years worth of
superbills.
Mitrione and DeVore instituted a policy to bill IDPA
for the services of nonphysicians and caused their billing
clerks to substitute Mitrione’s name for that of a non-
physician on the claim forms sent to IDPA. To do this, the
clerks changed the name of the service provider when
manually filling out the IDPA billing forms.
Nos. 02-4222 & 02-4224 5
DeVore reviewed the claims before they were sent to
Medicare, IDPA, or various insurance companies. She also
reviewed rejected claims and instructed McGowan how to
rebill. If McGowan had a problem with a CPT code or with
a billing issue that DeVore could not resolve, she asked
Mitrione what to do.
In 1995, Mitrione hired a few nonphysicians to provide
services to M&A’s clientele. For example, he hired a social
worker, Dana Ingram, and counselors Ron Havens and
Cathy Walters. When those employees quit, he hired Terry
Kuethe Goff, an unlicensed intern who was working to
complete requirements for an advanced psychology degree,
and Walter Woods, a drug and alcohol counselor.
Woods had been a director of Gibralter, Ltd., a failing
drug and alcohol rehabilitation center in Springfield. Cer-
tain drug and alcohol centers qualify for a special certifi-
cation from the State of Illinois similar to the provision
for mental health facilities. Through this certification, a
center may submit billings for nonphysician counselors
working under the supervision of a physician. During this
time, however, there was a moratorium that precluded ad-
ditional drug and alcohol certifications of this type in
Sangamon County, where Springfield is located.
Over the next several months, Mitrione, DeVore, and
Woods made several unsuccessful attempts to secure the
drug and alcohol counseling licenses and billing privileges
that belonged to Gibralter and to obtain similar licenses
and billing privileges for their own practice. The Gibralter
Medicaid certificate was ultimately terminated, and M&A
was unable to obtain authority to bill Medicaid for nonphy-
sician drug and alcohol services.
Since Woods held only an alcohol and drug counseling
certificate, he was not licensed to provide mental health
services. Both defendants knew they could not bill Medicaid
for Woods’ services. Nevertheless, shortly after the
6 Nos. 02-4222 & 02-4224
Gibralter transfer was denied, Woods’ role was expanded by
assigning him Medicaid clients. Mitrione and DeVore
directed him to counsel patients with diagnoses other than
drug and alcohol addition. Goff objected to both Mitrione
and DeVore, saying that Woods was acting beyond his
certification. Mitrione and Devore also assigned Goff a full
caseload of Medicaid and Medicare clients, despite her lack
of license and private clinical experience.
The essence of the substitute billing charges was that
Mitrione and DeVore assigned Medicaid and Medicare pa-
tients to counselors and therapists for treatment and then
billed as though Mitrione either provided the service him-
self or directly supervised the service.
Shortly after she joined M&A, DeVore asked Sheryl
Walters, a billing employee with MHC, how M&A could bill
Medicaid for counselors’ or therapists’ services. Walters
explained that M&A could not bill for those services
because it was not a licensed not-for-profit mental health
clinic. Shortly thereafter, Walters told Mitrione the same
thing when he inquired about billing for therapists. During
an advanced IDPA seminar, which Mitrione attended in
October 1996, it was confirmed that Medicaid would not pay
for psychiatric services performed by non-physicians.
In the spring of 1996, M&A formed a therapy group for
the survivors of sexual abuse (SOSA). The group was made
up of women who survived sexual trauma, molestation, or
rape in their childhood. Neither DeVore nor Goff, who in-
itially ran the group, were licensed to practice in this area.
The first SOSA group meeting was held in May 1996.
Because of the abuse suffered by members of the group,
they were often fragile and volatile and, as a result, dis-
cussions during the sessions were at times personal and
painful. According to a psychiatric expert, if not handled
carefully, the group members could have been hurt further.
Nos. 02-4222 & 02-4224 7
Shortly after the program started, DeVore and Mitrione
assigned Woods to co-facilitate the SOSA group sessions
with Goff. When Goff objected that Woods was unqualified
to co-lead the group, they reminded her that she was a “su-
pervisee,” that is, an intern who needed Mitrione’s supervi-
sion for her advanced degree and eventual license. Goff
nevertheless complained weekly to Mitrione that Woods’
actions and demeanor in the group were inappropriate.
Woods, too, told both DeVore and Mitrione that certain
therapy sessions were beyond his training levels, though he
continued with them. He was even assigned to do individual
therapy with some members of the group. He also handled
several group sessions by himself. The defendants then
billed as if Mitrione had provided the service. Some of these
billings for Woods were signed and submitted by DeVore.
In addition to billing IDPA, Mitrione and DeVore billed
Medicare for Woods’ work with the SOSA group and coun-
seling of clients. Medicare would not have paid for the
service if it knew that the group was being run by a drug
and alcohol counselor with no other licensing, certification,
or education. Even if Goff had been in the group with
Woods, Medicare would not have paid because Goff was not
licensed and Mitrione was not present in the office and
available to intervene if an emergency arose.
Unlike their defense to the ghost billing and upcoding
charges—that they were simply inept billers—the defen-
dants defended the substitute billing charges by claiming
ignorance of the rules. Mitrione claimed that he did not
receive the physicians handbook, or that he tossed it away
without reading it. DeVore, on the other hand, claimed that
she was unaware the handbook existed. In addition, both
Mitrione and DeVore claimed that Gary Vaughn (who died
before the trial), an IDPA representative, told them that the
substitute billing practice was acceptable.
8 Nos. 02-4222 & 02-4224
The evidence, however, demonstrated that Mitrione re-
ceived the physicians handbook (which contained the billing
prohibition) at least three times: (1) when he first enrolled
as a provider; (2) when he was trained; and (3) when he
attended an IDPA seminar in October 1996. Additionally,
Mitrione pointed to the manual in his office when inter-
viewed by investigators.
Moreover, neither defendant mentioned to the investiga-
tors that Vaughn had sanctioned their substitute billing
practices. In December 1999, Mitrione phoned the IDPA
Office of Inspector General to inquire about the investiga-
tion and to try to convince investigators that any billing
issues were the work of a former employee. Mitrione never
suggested at that time that Vaughn sanctioned the im-
proper billing methods that were used. Nor could Mitrione
explain why the issue even came up with Vaughn, since
DeVore and he claimed that they did not know about the
prohibition against billing for nonphysician services.
We turn now to the defendants’ claim that the perjury
at trial tainted their convictions on the substitute billing
counts. During the rebuttal phase of the trial, the govern-
ment offered the testimony of Deanna Statler, an IDPA
auditor. She presented a summary which included informa-
tion about the frequency of ghost billing and upcoding.
Mitrione (DeVore, unless otherwise noted, joins all of these
arguments, and our references from now on to “Mitrione”
apply to both defendants), in defense, claimed that the
ghost billing and upcoding were just mistakes, but Statler
testified that these “mistakes” were almost always in the
defendants’ favor. The implication of this testimony was
that the defendants were lying because if they had just been
mistaken, there would have been as many mistakes against
their interests as there were in their favor.
Nos. 02-4222 & 02-4224 9
Statler’s testimony, however, was not the truth, the whole
truth, and nothing but the truth. She claimed she counted
certain things herself when doing her audit, but she
actually had others do much of it for her. She said she
excluded some numbers from her calculations but hadn’t,
which made the numbers look worse for the defendants
than they really were. This perjury, reasoned Judge Scott
in the district court, entitled the defendants to a new trial
on most, but not all the counts upon which they were con-
victed. We review the decision to deny the new trial motion
on two of these counts for an abuse of discretion. United
States v. Westmoreland, 240 F.3d 618, 637 (7th Cir. 2001).
In determining whether a new trial is warranted when a
witness presented by the government has lied, we have
traditionally used a test adopted 75 years ago in Larrison
v. United States, 24 F.2d 82 (7th Cir. 1928). Under the
Larrison test, new trials are granted when (1) the witness
is material and the testimony false; (2) the jury might
have reached a different verdict if it knew the testimony
was false or if it hadn’t heard the testimony; and (3) the
defense was taken by surprise by the false testimony or
didn’t learn of its falsity until after trial.
This old test puts our circuit at odds with other circuits
which, absent a finding that the government knowingly
sponsored the false testimony, require a defendant seeking
a new trial to show that the jury would probably have
reached a different verdict had the perjury not occurred.
See, e.g., United States v. Williams, 233 F.3d 592 (D.C. Cir.
2000); United States v. Huddleston, 194 F.3d 214, 217-21
(1st Cir. 1999); United States v. Provost, 969 F.2d 617, 622
(8th Cir. 1992); United States v. Petrillo, 237 F.3d 119, 123
(2nd Cir. 2000); United States v. Krasny, 607 F.2d 840, 844-
45 (9th Cir. 1979); United States v. Sinclair, 109 F.3d 1527,
1532 (10th Cir. 1997). But see United States v. Lofton, 233
F.3d 313 (4th Cir. 2000); Gordon v. United States, 178 F.2d
10 Nos. 02-4222 & 02-4224
896, 900 (6th Cir. 1949). We even criticized the Larrison
test a dozen years ago. See United States v. Mazzanti, 925
F.2d 1026, 1029 (7th Cir. 1991).
Today, we overrule Larrison and adopt the reasonable
probability test.2 In order to win a new trial based on a
claim that a government witness committed perjury, as-
suming as in this case that the government did not know-
ingly present the false testimony, defendants will have to
prove the same things they are required to prove when
moving for a new trial for other reasons. Defendants will
have to show that the existence of the perjured testimony
(1) came to their knowledge only after trial; (2) could not
have been discovered sooner with due diligence; (3) was
material; and (4) would probably have led to an acquittal
had it not been heard by the jury. See United States v.
Gonzalez, 93 F.3d 311 (7th Cir. 1996).
The defendants argue that Statler’s false testimony was
material and that it tainted their convictions on the sub-
stitute billing counts because it “tipped the scales” against
them. However, Statler did not testify about the propriety
of substitute billing or the defendants’ knowledge that such
claims were prohibited. Rather, she testified about the
frequency of ghost billing and upcoding. Statler’s summary
included services rendered by therapists other than
Mitrione, but it did not comment on whether those services
were reimbursable. So Statler was really not a material
witness with respect to the substitute billing counts.
Nevertheless, the defendants claim that Statler’s tes-
timony demolished their credibility, and without it the jury
might have reached a different verdict. We disagree. For
2
Pursuant to Circuit Rule 40(e), this opinion has been circulated
among all the judges of this court in regular active service. No
judge favored a rehearing en banc on the question of overruling
Larrison v. United States.
Nos. 02-4222 & 02-4224 11
one thing, the evidence against Mitrione and DeVore on
all counts, without Statler’s testimony, was strong. The
government also presented substantial evidence that the
defendants knew they were engaging in impermissible
substitute billing. Having reviewed this record, we do not
believe that the jury would have probably reached a dif-
ferent verdict on the substitute billing counts had Statler’s
testimony not been presented. And, we add, our review of
the record would not lead us to conclude that the jury would
have probably reached a result other than guilty on the
upcoding and ghost billing counts had it not heard Statler’s
rebuttal testimony.
We turn next to the defendants’ claim that the district
court erred in not granting a new trial because the prosecu-
tor referred to the September 11 terrorist attacks in his
closing remarks. Closing arguments were supposed to begin
on September 11, 2001, but they were delayed a day
because of the attacks. On September 12, the prosecutor
began his closing argument with this statement:
Ladies and gentlemen. Good morning. Our job just got
harder in the last 24 hours. We’re already facing an
incredibly difficult task as we’ve done for the last three
and a half weeks trying to sort this out. It’s now made
more difficult by the events of yesterday, the devasta-
tion that terrorism has brought to our country. But
that’s why we need to do this today. That’s why we got
out of bed today and came here. The very institutions
that these people seek to undermine must continue.
The district court overruled a defense objection to this
remark, saying the defendants would also have a chance to
comment briefly on the events of the day before. The pros-
ecutor then continued:
One of those systems is the system of justice. And that’s
one of our most important systems in the country, and
that’s something that we’ve all been a part of the last
12 Nos. 02-4222 & 02-4224
three and a half weeks. Every one of us. And that’s why
we need to redouble our efforts today to concentrate, to
stay on task, to get back to pay attention to the evi-
dence, no matter how hard it is after yesterday. What
we do today is important. It is important certainly to
Dr. Mitrione and Ms. DeVore. But it’s important to the
fiscal integrity of the Medicare program and Medicaid
program and the medical assistance programs. It is
important to our system of justice.
Mitrione’s attorney began his closing with the following
remarks:
Now, [the prosecutor] this morning tried to draw some
analogy or some connection between the events of yes-
terday and this case. I think he has lost all sense of
proportion and prospective [sic]. And I don’t want to
minimalize or trivialize the destruction of yesterday by
drawing any connection with this case. There’s no con-
nection.
DeVore’s attorney also commented on the prosecutor’s
remarks, saying “[o]ther counsel have commented there are
a lot of things going on in the world right now, but the most
important thing in the world going on as far as Marla
DeVore is your deliberations and what you think about her
conduct.”
We consider claims that a prosecutor has tainted a trial
with improper remarks under a two-step inquiry. See
United States v. Renteria, 106 F.3d 765, 766 (7th Cir. 1997).
We first consider the remarks in isolation. If they are
improper in the abstract, we then consider them in the
context of the entire record and ask whether they denied
the defendant a fair trial. Only if the remarks undermined
the fairness of the proceedings will we overturn a convic-
tion.
Nos. 02-4222 & 02-4224 13
There is nothing in the remarks by the prosecutor here
that would warrant a move to the second step of our in-
quiry. Even viewed in isolation, the prosecutor’s remarks
were not improper. In fact, given the horrific events of
September 11, we think it would have been strange indeed
if anyone connected with this trial and allowed to speak to
the jury on September 12—judge, prosecutor, or defense
counsel—failed to briefly comment on the attacks. The
prosecutor’s words were about terrorists and the need to get
back to business despite the devastating attacks. They were
not improper.
The defendants also argue that the Illinois statutes
underlying their convictions for Medicaid and Medicare
fraud are in conflict with, and therefore preempted by,
federal law. Judge Scott rejected this argument when it was
raised in the context of a motion to dismiss the substitute
billing counts of the indictment, finding that it ignores basic
rules of statutory construction and the State of Illinois’
discretion to adopt standards for its medical assistance
programs. We agree with Judge Scott’s treatment of this
issue and have nothing to add to it. See United States v.
Mitrione, 160 F. Supp. 2d 993 (C.D. Ill. 2001).
We now turn to two sentencing issues—one an enhance-
ment and the second a challenge to the restitution order.
Judge Scott imposed a 2-level obstruction of justice en-
hancement under U.S.S.G. § 3C1.1 on both defendants after
finding that they testified falsely at the trial. DeVore
contends that she did not testify falsely and that the district
court clearly erred in imposing the enhancement. Mitrione
says, in his main brief, that he adopts the arguments in
DeVore’s brief; DeVore’s brief, however, neither mentions
Mitrione’s obstruction enhancement nor argues that it was
improper. The government’s brief pointed this out, and
Mitrione’s reply brief ignores the point. So, as to him, this
argument is waived or, more charitably, rejected as not
developed.
14 Nos. 02-4222 & 02-4224
Our review of obstruction of justice enhancements is “very
limited.” United States v. Ramunno, 133 F.3d 476, 480 (7th
Cir. 1998). The determination that DeVore obstructed
justice is a factual finding which we will not disturb unless
it is clearly erroneous. To meet this standard, DeVore must
convince us “to a certainty that the district court’s factual
findings were incorrect; merely suggesting the possibility of
error is not enough.” Id. at 480-81 (citing Anderson v. City
of Bessemer City, 470 U.S. 564, 573 (1985)). This is an
especially daunting task here as the district court’s factual
finding is based on an assessment of credibility, and we give
special deference to the trial judge’s unique opportunity to
follow the case up close, here for more than 3 weeks.
DeVore repeatedly testified that she was not the biller for
M&A. Judge Scott found that DeVore testified that, prior to
1997, she played no role in billing except to fold, mail, and
sign the bills. The judge found that DeVore’s testimony was
contradicted by several witnesses at trial, implicitly found
those witnesses to be more credible, and concluded that
DeVore testified falsely. Now, rather than argue that her
statements at trial were mistaken or the result of confusion,
she maintains that her testimony was truthful and claims
that the government presented no contrary testimony. We
reject this claim.
As the district court found, several witnesses, including
McGowan, Goff, Woods and others, established through
their testimony that DeVore “orchestrated the billing pro-
cesses throughout that office.” These witnesses testified
that DeVore instructed them on how to: (1) bill; (2) inter-
pret codes; (3) resubmit bills that had been rejected; and (4)
change the listed service date on a bill to avoid rejection of
a bill for a second service on one date.
So, while DeVore maintains that her testimony was true,
her claim simply cannot be squared with the evidence. In
Nos. 02-4222 & 02-4224 15
light of the testimony, the district court properly found that
DeVore’s statements that prior to 1997 she played no
significant role in billing were false.
The district court also properly found that the testimony
was material to the counts of conviction because its purpose
was to mislead the jury into thinking DeVore had no
decisionmaking authority in billing when clearly she did.
See United States v. Freitag, 230 F.3d 1019, 1025 (7th Cir.
2000) (district court’s finding that Medicare fraud de-
fendant’s testimony was “a creative revision of what had
happened” sufficiently found intent required to support per-
jury-based sentence enhancement).
DeVore also claims that the district court clearly erred in
finding that she testified falsely when she said she did not
participate in the decision to have Woods lead the SOSA
group. While DeVore states that “no contrary testimony was
offered,” Judge Scott found that her testimony was contra-
dicted by Woods, Mitrione, and Goff. Applying an obstruc-
tion enhancement to DeVore’s guideline range was not
error.
Finally, the defendants argue that Judge Scott erred in
ordering them to reimburse Medicare because, according to
them, the victim of their fraud (if in fact there was a fraud)
was Medicaid. At sentencing, however, the defendants did
not object to the restitution order on the ground that they
now advance, i.e., that Medicaid—not Medicare— was the
victim of their fraud. Instead, they argued that the district
court improperly calculated the amount of restitution owed.
In fact, the defendants contended that the total loss to
Medicare was $2,144.58 and that Medicaid should be paid
nothing. So, on this record, they forfeited the issue, and our
review is only for plain error. United States v. Randle, 324
F.3d 550, 555 (7th Cir. 2003).
Since Mitrione and DeVore were convicted of fraud, Judge
Scott’s authority to impose restitution is governed by the
16 Nos. 02-4222 & 02-4224
Mandatory Victim Restitution Act (MVRA) codified at 18
U.S.C. § 3663A and 18 U.S.C. § 3664. The relevant portions
of the MVRA provide:
(a)(1) Notwithstanding any other provision of law, when
sentencing a defendant . . . the court shall order, in
addition to . . . any other penalty authorized by law,
that the defendant make restitution to the victim of the
offense . . . .
(2) For the purposes of this section, the term “victim”
means a person directly and proximately harmed as a
result of the commission of an offense for which res-
titution may be ordered including, in the case of an
offense that involves as an element a scheme, . . . any
person directly harmed by the defendant’s criminal
conduct in the course of the scheme . . . .
18 U.S.C. § 3663A(a)(1)-(2) (emphasis added). Thus, while
restitution is limited to the counts of conviction, when the
counts of conviction involve a scheme, restitution may be
ordered for all of the harm caused by the defendant’s crim-
inal conduct in the course of the scheme. See Randle, 324
F.3d at 556; United States v. Martin, 195 F.3d 961, 967 (7th
Cir. 1999).
Based upon Judge Scott’s finding that the total loss
caused by the defendants’ fraud was $11,255, she ordered
the defendants to pay restitution in that amount. We see no
plain error in this order. As the judge found, both Medicaid
and Medicare were victimized by the defendants’ fraud, and
a restitution order need not be limited to those harmed by
the conduct that formed the basis for a conviction. To the
contrary, the statute defines “victim” as any person directly
harmed by the defendant’s criminal conduct in the course
of the scheme. Martin, 195 F.3d at 967. See Randle, 324
F.3d at 556 (“restitution is authorized under the MVRA . . .
to a victim who is directly harmed by the offender’s conduct
Nos. 02-4222 & 02-4224 17
in the course of committing an offense that involves as an
element a scheme . . . .”).
Here, the defendants were convicted of one count of
mail fraud and one count of filing false claims. These counts
adopted parts of counts 1 and 2, which charged
the defendants with devising a scheme to defraud the
Medicaid and Medicare programs of the State of Illinois and
the United States. Thus, they were convicted of offenses
which triggered the broad definition of “victim” under the
MVRA quoted above. Thus, because the defendants’ crime
included a scheme, and there is evidence that the scheme
directly harmed a victim, i.e., Medicare, other than the
victim mentioned in the counts for which the defendants
were convicted, i.e., Medicaid, Judge Scott did not plainly
err in ordering restitution to Medicare.
For these reasons, the judgment of the district court is
AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-9-04