United States v. Kathleen Kelly-Tuorila

Case: 17-50512 Document: 00514781255 Page: 1 Date Filed: 01/03/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 17-50512 January 3, 2019
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff–Appellee,
v.
KATHLEEN MARINA KELLY-TUORILA,
Defendant–Appellant.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 6:16-CR-39-2
Before STEWART, Chief Judge, and KING and OWEN, Circuit Judges.
PER CURIAM:*
Kathleen Marina Kelly-Tuorila was indicted on one count of conspiracy
to commit health care fraud, one count of aiding and abetting health care fraud,
eleven counts of aiding and abetting aggravated identity theft, and eight
counts of aiding and abetting in making false statements related to healthcare.
A jury convicted her on all twenty-one counts, and she appeals the sufficiency
of the evidence as to each. We affirm the district court’s judgment.
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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I
Daniel Smith owned DTS Medical Supply Company (DTS), a provider of
durable medical equipment (DME), such as power scooters and wheelchairs.
Kathleen Marina Kelly-Tuorila was the office manager and operations
manager of DTS. She performed the billing and coding requirements to file
claims with Medicare and Medicaid. Robin Haigler, another DTS employee,
recruited and solicited individuals to be recipients of equipment that DTS
provided.
In 2009, Haigler approached Michelle Cleavelin and her husband, Keith
Cleavelin, while at a sports bar. Haigler told Mr. Cleavelin that he could obtain
a power wheelchair from DTS at no cost if he provided his Medicare number.
As a previous billing manager for a DME provider, Mrs. Cleavelin knew
Haigler’s offer was inappropriate. Her suspicions aroused, Mrs. Cleavelin gave
Haigler Mr. Cleavelin’s Medicare number. In October 2009, DTS delivered a
power wheelchair to the Cleavelins’ house. Mrs. Cleavelin filed a complaint
with Health Integrity, a government contractor that investigates fraud.
Health Integrity sent a letter to DTS asking it to provide documentation to
support its claim. DTS did not comply with this request. The FBI also began
investigating DTS.
Medicare regulations required DTS to have documents on file prior to
submitting a claim for DME reimbursement, including: a physician’s
prescription; the prescribing physician’s face-to-face evaluation of the patient;
the delivery ticket, showing delivery and receipt of the DME to the beneficiary;
documentation showing that a home was fit for the DME; and other additional
progress notes on the beneficiary’s status. However, DTS was not required to
send the documentation to Medicare when it made a claim. DTS would submit
claims on an HCFA-1500 form (1500 form). The 1500 form requires, in
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relevant part, the name of the prescribing physician and the physician’s
National Provider Identifier (NPI) number, which is unique to every physician.
The form requires a provider to include the code for the particular equipment
delivered to the beneficiary. The 1500 form also includes a block for the
provider to insert a modifier, which provides Medicare information about the
claim. For example, the “KX” modifier indicates that the provider has all of
the required documentation for a claim on file.
The Government’s investigation revealed two fraudulent schemes. First,
DTS used physicians’ NPI numbers on claim forms even though the physicians
did not prescribe a DME. Second, DTS billed Medicare and Medicaid for power
wheelchairs but provided its customers with power scooters. Power
wheelchairs provided DTS a larger reimbursement than power scooters. Based
on the investigation, the Government indicted Smith, Haigler, and
Kelly-Tuorila. The indictment alleged: (1) conspiracy to commit health care
fraud in violation of 18 U.S.C. § 1349 (count one); (2) health care fraud in
violation of 18 U.S.C. §§ 1347 & 2 (count two); (3) aggravated identity theft in
violation of 18 U.S.C. §§ 1028A(a)(1) & 2 (counts three through thirteen); and
(4) false statements related to health care matters in violation of 18
U.S.C. §§ 1035 & 2 (counts fourteen through twenty-one). Haigler pleaded
guilty. Smith and Kelly-Tuorila were tried before a jury. The jury found both
defendants guilty on all counts. Kelly-Tuorila filed a motion for post-verdict
acquittal, which the district court denied. She now appeals.
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II
When a defendant moves for acquittal in the district court, this court
reviews challenges to the sufficiency of the evidence de novo. 1 “Appellate
review is highly deferential to the jury’s verdict,” 2 so the “jury’s verdict will be
affirmed unless no rational jury, viewing the evidence in the light most
favorable to the prosecution, could have found the essential elements of the
offense to be satisfied beyond a reasonable doubt.” 3 The jury may make
factually-based inferences, 4 but “a verdict may not rest on mere suspicion,
speculation, or conjecture, or on an overly attenuated piling of inference on
inference.” 5
III
To establish conspiracy to commit health care fraud, the Government
must prove beyond a reasonable doubt “that (1) two or more persons made an
agreement to commit health care fraud; (2) that the defendant knew the
unlawful purpose of the agreement; and (3) that the defendant joined in the
agreement willfully, that is, with the intent to further the unlawful purpose.” 6
“The agreement may be silent and informal,” 7 and “may be inferred from
concert of action.” 8 “The Government may establish any element through
1 United States v. Danhach, 815 F.3d 228, 235 (5th Cir. 2016) (citing United States v.
Grant, 683 F.3d 639, 642 (5th Cir. 2012)).
2 United States v. Ganji, 880 F.3d 760, 767 (5th Cir. 2018).
3 United States v. Bowen, 818 F.3d 179, 186 (5th Cir. 2016) (quoting United States v.
Roetcisoender, 792 F.3d 547, 550 (5th Cir. 2015)).
4 Ganji, 880 F.3d at 767.
5 United States v. Pettigrew, 77 F.3d 1500, 1521 (5th Cir. 1996).
6 Grant, 683 F.3d at 643 (citing 18 U.S.C. §§ 1347, 1349; United States v. Delgado, 668
F.3d 219, 226 (5th Cir. 2012)).
7 United States v. Barson, 845 F.3d 159, 163 (5th Cir. 2016) (citing Grant, 683 F.3d at
643).
8 United States v. Stephens, 571 F.3d 401, 404 (5th Cir. 2009) (quoting United States
v. Bieganowski, 313 F.3d 264, 276 (5th Cir. 2002)).
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circumstantial evidence,” 9 but “[p]roof of an agreement to enter a conspiracy is
not to be lightly inferred.” 10 Proving that “the defendant knew something
criminal was afoot” is insufficient evidence of conspiracy, 11 as is piling
“inference upon inference.” 12 Also, “‘[m]ere similarity of conduct among
various persons and the fact that they have associated with or are related to
each other’ is insufficient to prove an agreement.” 13
Kelly-Tuorila argues that the Government did not present sufficient
evidence that, through her actions, she entered into an unlawful agreement
with Smith or Haigler. She asserts that she trusted DTS’s recruiters and
accepted the documentation they provided to her. She maintains that she
treated all claims the same not knowing that some were illegitimate. She also
argues that she did not know of the unlawful purpose of any alleged conspiracy
and she did not intend to further it.
The Government presented evidence from Kelly-Tuorila herself that she
knew about DTS’s fraudulent activity. FBI Agent Robert Gutierrez was to
have conducted a polygraph examination of Kelly-Tuorila on January 5, 2012.
But before he began the examination, Kelly-Tuorila informed him that “she
submitted approximately 1,000 fraudulent claims knowingly to Medicare.”
Because of her admission, Agent Gutierrez did not conduct the polygraph exam
and took a written statement from Kelly-Tuorila. The statement provided:
9 Ganji, 880 F.3d at 767 (citing United States v. Willett, 751 F.3d 335, 339 (5th Cir.
2014)).
Id. (alteration in original) (quoting United States v. Johnson, 439 F.2d 885, 888 (5th
10
Cir. 1971)).
11 Id. at 776 (citing United States v. Alvarez, 610 F.2d 1250, 1257 (5th Cir. 1980)).
12 United States v. Imo, 739 F.3d 226, 235 (5th Cir. 2014) (quoting Grant, 683 F.3d at
642).
13 Ganji, 880 F.3d at 767-68 (quoting United States v. White, 569 F.2d 263, 268 (5th
Cir. 1978)).
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1) I knew approximately 1000 claims submitted to be fraudulent.
2) I approximate those claims to be valued at $4,000,000.
3) Robin Haigler determined which patients received a scooter vs.
motorized wheelchair.
4) It is my understanding that she (Robin Haigler) was fully aware
that the claims being submitted were fraudulent.
5) I know that she was being paid cash via wire transfers.
6) I average a salary of $4,000 per month . . . . Robin’s salary
averaged $8,000-10,000 due to being wired from DTS account to
my personal account, to Robin’s personal account.
7) I’m sorry that things progressed the way they did and that I was
not more vigilant in bringing a stop to it. The above statements
were made by me.
Kelly-Tuorila argues that the written statement was made with the
benefit of hindsight. This contradicts Agent Gutierrez’s testimony at trial.
Agent Gutierrez was specifically asked, “So she indicated to you that she knew
at the time that she was submitting them that they were fraudulent?” and he
responded, “That is correct.” Agent Gutierrez reiterated this point on
cross-examination when asked why he never performed the polygraph exam.
He stated that she admitted the relevant issue which negated the need for the
polygraph. Viewing this evidence in the light most favorable to the
prosecution, a rational jury could have determined that Kelly-Tuorila knew of
the unlawful purpose of the conspiracy.
The written and oral confessions also support the jury’s conclusion that
Kelly-Tuorila was a part of the agreement and intended to further it. They are
evidence that Kelly-Tuorila submitted claims that she knew to be fraudulent.
It is reasonable for a jury to infer that Kelly-Tuorila intended to be a part of
the agreement and to further it by knowingly submitting false claims.
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The Government also presented circumstantial evidence that supports
the conspiracy conviction. For example, a week after Kelly-Tuorila confessed
to Agent Gutierrez, FBI Agent Lee McLoy asked Kelly-Tuorila to call Smith
and record the conversation. During the call, Kelly-Tuorila indicated to Smith
that she “had knowledge that DTS was billing for power wheelchairs to
Medicare and Medicaid, though DTS was providing its customers scooters.”
She told him that the process needed to stop. According to Agent McLoy, the
FBI did not know about that scheme (providing power scooters while billing for
power wheelchairs) until this call. The FBI had been investigating only the
fraudulent use of physicians’ identifications to support unprescribed claims.
The evidence is unrefuted that Kelly-Tuorila ordered scooters from
Heartway USA, a scooter provider, and she was responsible for submitting
claims to Medicare and Medicaid for such medical devices. On several
occasions, Kelly-Tuorila submitted claims to Medicare for power wheelchairs
before she ordered power scooters from Heartway. Moreover, neither
Kelly-Tuorila nor any other DTS employee submitted a single claim for a power
scooter. Only claims for power wheelchairs were submitted. A rational jury
could infer that when Kelly-Tuorila ordered a scooter, she knew that DTS had
billed or intended to bill Medicare or Medicaid for a power chair.
Additionally, the Government presented evidence that Smith
transferred reimbursement funds from Medicare and Medicaid to
Kelly-Tuorila. Smith received $3,748,392.04 in payments from Medicare and
Medicaid that went into DTS’s business account. Smith transferred $163,050
from that account to Kelly-Tuorila over the course of eighteen months.
Kelly-Tuorila then made wire transfers totaling over $30,000 to other DTS
employees or their relatives. Kelly-Tuorila argues that she received a
consistent salary, and that the Government failed to prove that the money
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transferred to her account was not her salary. However, Kelly-Tuorila has no
explanation for the transfers of more than $30,000 from her personal account
to other DTS employees or their relatives.
Kelly-Tuorila relies upon United States v. Ganji, arguing that she did
nothing that an innocent person would not do, and therefore that her
conviction cannot stand. This case is unlike Ganji, in which witnesses who had
admitted to fraudulent behavior testified that they did not know the
defendant. 14 In the present case, there is evidence that Kelly-Tuorila knew
that she was engaged in a fraudulent scheme, including her admissions that
she submitted false claims.
Even if Kelly-Tuorila could offer an alternative explanation for all of the
Government’s evidence, we are tasked with viewing the evidence in the light
most favorable to the prosecution. 15 Viewed in that light, the evidence is
sufficient for a rational jury to determine that each element of the conspiracy
was met beyond a reasonable doubt.
IV
Kelly-Tuorila was convicted on other counts of aiding and abetting:
(1) health care fraud; (2) aggravated identity theft; and (3) false statements
related to health care. To obtain a conviction for aiding and abetting, “the
Government must prove (1) that the defendant associated with the criminal
venture, (2) participated in the venture, and (3) sought by action to make the
venture succeed.” 16 “Association means that the defendant shared in the
14 Id. at 770.
15 United States v. Bowen, 818 F.3d 179, 186 (5th Cir. 2016) (quoting United States v.
Roetcisoender, 792 F.3d 547, 550 (5th Cir. 2015)).
16 United States v. Sorrells, 145 F.3d 744, 753 (5th Cir. 1998) (quoting United States
v. Gallo, 927 F.2d 815, 822 (5th Cir. 1991)).
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criminal intent of the principal.” 17 “Participation means that the defendant
engaged in some affirmative conduct designed to aid the venture. Although
relevant, mere presence and association are insufficient to sustain a conviction
of aiding and abetting.” 18
A
With regard to aiding and abetting health care fraud, the Government
must prove beyond a reasonable doubt that the
defendant “knowingly and willfully execute[d], or attempt[ed] 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, 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.” 19
Kelly-Tuorila does not dispute that Smith or Haigler engaged in health care
fraud. Rather, she argues that she did not aid and abet them.
Kelly-Tuorila asserts that “[t]he government did not present sufficient
evidence to prove . . . that [she] acted with the specific intent required to
support a conviction for Count 2,” i.e. that “she knew the claim was fraudulent
but . . . process[ed] and submitt[ed] the claim . . . with intent to further the
fraud.” She asserts that she “simply act[ed] as a biller.” However, the evidence
supporting Kelly-Tuorila’s conspiracy conviction is also sufficient to support
her substantive health care fraud conviction. 20 Specifically, that evidence
17 Id. (quoting United States v. Salazar, 66 F.3d 723, 729 (5th Cir. 1995)).
18 Id. (quoting Salazar, 66 F.3d at 729).
19 United States v. Willett, 751 F.3d 335, 339 (5th Cir. 2014) (alterations in original)
(quoting United States v. Imo, 739 F.3d 226, 235-36 (5th Cir. 2014)).
20 See Imo, 739 F.3d at 237 (the health care fraud convictions against the defendant
were affirmed based on the evidence of conspiracy); see also Willett, 751 F.3d at 340-43
(analyzing the sufficiency of the evidence for health care fraud and conspiracy to commit
health care fraud together).
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includes: (1) Kelly-Tuorila’s confession; (2) Agent McLoy’s and Agent
Gutierrez’s testimony; (3) evidence that Kelly-Tuorila ordered scooters but did
not submit a single claim for scooters; and (4) evidence that Kelly-Tuorila
submitted claims for power wheelchairs when she knew DTS was providing
scooters. This evidence was sufficient for the jury to convict Kelly-Tuorila of
aiding and abetting health care fraud.
B
Kelly-Tuorila was convicted under counts three through thirteen of
aiding and abetting aggravated identity theft. The underlying crime requires
the Government to prove that the defendant “(1) knowingly used (2) the means
of identification of another person (3) without lawful authority (4) during and
in relation to a felony enumerated in 18 U.S.C. § 1028A(c).” 21 The
Government’s theory is that DTS would use, “without lawful authority, the
names, NPI numbers, and signatures of physicians to fraudulently claim that
doctors had prescribed the power wheelchairs.” More specifically, the
Government argues that by submitting the claims (with a prescribing
physician’s NPI number) and by using the “KX” modifier, Kelly-Tuorila verified
that (1) the services on the form were medically necessary according to an
identified doctor and (2) the medically necessary information from that doctor
was on file.
Kelly-Tuorila maintains that she did not have “the specific intent to
further the crime of identity theft.” She asserts that “[t]here was no direct
evidence that she was aware that the claims she submitted used, without
authority, the names and signatures of the doctors listed in the indictment.”
She also argues that there was no evidence that she “knew that any paperwork
21 United States v. Mahmood, 820 F.3d 177, 187 (5th Cir. 2016).
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she received with these doctor’s names and signatures were forgeries or were
otherwise unauthorized.” Instead, she “merely relied on the paperwork as
submitted.”
The Government presented evidence that “[she] knew approximately
1000 claims submitted to be fraudulent.” That would include all of DTS’s
fraudulently submitted claims. There was evidence that Kelly-Tuorila knew
DTS was submitting claims for power wheelchairs but providing customers
with power scooters. The Government presented evidence that Kelly-Tuorila
submitted claims for unprescribed power wheelchairs and used the “KX” code
on those claims, thereby representing that a physician prescribed the power
wheelchairs and that the documentation was on file. From these facts, the jury
could reasonably infer that Kelly-Tuorila knew that a physician did not
actually prescribe the power wheelchairs she billed for, but she nevertheless
submitted claims.
Kelly-Tuorila contests a specific count related to Dr. Gary Becker,
contending there was evidence that he prescribed a power wheelchair.
However, Dr. Becker testified that he prescribed a manual wheelchair, not a
power wheelchair. The prescription submitted to Medicaid, dated February
25, 2009 and containing Dr. Becker’s signature, prescribed a power wheelchair
along with several wheelchair accessories. Dr. Becker testified that he would
not have signed the second prescription for a power wheelchair. Kelly-Tuorila
signed the prescription faxed into Medicaid on the block for DTS as the DME
provider. She dated the document February 10, 2009, even though Dr. Becker
did not sign any prescription until February 25. In signing the document,
Kelly-Tuorila acknowledged that she was certifying the form. But when
questioned about the issue, she could not explain how she could certify the form
as being true on February 10, fifteen days before Dr. Becker signed it.
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Moreover, the altered prescription contained five pages of supporting
documentation from a VA therapist signed April 14, 2009. But the VA
therapist is not the prescribing physician, and even if the VA therapist did
prescribe the power wheelchair, she did not see the patient until almost two
months after the prescription was signed. Viewing that evidence in the light
most favorable to the prosecution, a rational jury could conclude beyond a
reasonable doubt that Kelly-Tuorila knew that Dr. Becker did not prescribe
the power wheelchair when she submitted the claim to Medicaid.
C
Kelly-Tuorila was convicted of counts fourteen through twenty-one of
aiding and abetting in making false statements related to health care. The
underlying crime requires the Government to prove that “(1) the defendant
made a materially false, fictitious, or fraudulent statement or
misrepresentation; (2) in connection with the delivery of [or payment for]
health care benefits; and (3) [s]he did so knowingly and wilfully.” 22
Kelly-Tuorila contends that she did not know DTS was making false
statements, asserting that she “rel[ied] in good faith on the documents she
received at face value” and “handled the administrative task of billing” like any
other biller would. The evidence contradicts this. The Government presented
evidence that: (1) Kelly-Tuorila confessed to knowing that approximately 1,000
submitted claims were fraudulent; (2) she gave Agents McLoy and Gutierrez
more information than they independently knew about the fraudulent activity;
and (3) she ordered scooters knowing that DTS did not make a claim for any of
those scooters. Viewing that evidence in the light most favorable to the
22 United States v. Dailey, 868 F.3d 322, 330 (5th Cir. 2017) (first alteration in original)
(citing 18 U.S.C. § 1035).
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prosecution, a rational jury could determine beyond a reasonable doubt that
Kelly-Tuorila shared the criminal intent of Smith and Haigler, participated in
the criminal venture, and sought to make it succeed by submitting claims that
she knew contained false information.
* * *
For the foregoing reasons, we AFFIRM the district court’s judgment.
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