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United States v. Pate

United States District Court, S.D. Georgia, Augusta Division

March 18, 2019

UNITED STATES OF AMERICA
v.
DETRA WILEY PATE

          ORDER

          J. RANDAL HALL, CHIEF JUDGE UNITED STATES DISTRICT COURT

         Before the Court are two post-trial motions by Defendant Detra Wiley Pate. First, Defendant moves for a judgment of acquittal under Federal Rule of Criminal Procedure 29. (Doc. 108.) Second, Defendant moves for a new trial pursuant to Federal Rule of Criminal Procedure 33. (Doc. 109.) For the reasons set forth in detail below, Defendant's motions are DENIED.

         I. BACKGROUND

         On December 11, 2018, after a four-day trial, the jury returned a verdict against Defendant Detra Wiley Pate finding her guilty of one count of conspiracy to commit health care fraud, twenty-four counts of health care fraud, and eight counts of aggravated identity theft. (Jury Verdict, Doc. 102.) The jury found Defendant not guilty on three counts of health care fraud. (Id.)

         A. Overview of the Scheme

          Defendant owned and operated Southern Respiratory, LLC, a company that supplied durable medical equipment ("DME") in Thomson, Georgia. In 2011, Southern Respiratory became a registered Medicare provider and eventually began providing wheelchairs and similar DME to Medicare beneficiaries. The indictment[1] alleges, and Defendant was later found guilty of, engaging in a scheme to defraud Medicare by billing for wheelchairs, wheelchair accessories, and CPAP supplies that were either not prescribed or not delivered to patients. (Indictment, ¶¶ 17-28.) Defendant also engaged in a conspiracy to commit the fraud and identity theft to cover up evidence of the scheme. (Id. ¶¶ 1-16, 29-30.) Broadly speaking, the scheme involved billing Medicare for DME that was not ordered by a physician, not medically necessary, or not delivered to the patient. (Id. ¶¶ 19, 22, 25, 28.) Specifically, Defendant used Southern Respiratory's billing software, Brightree, to bill Medicare for extra heavy duty wheelchairs ("K7 Wheelchairs") and sometimes multiple accessories, even though Southern Respiratory patient files, including prescriptions and delivery tickets, showed delivery of less expensive high strength lightweight wheelchairs ("K4 Wheelchairs") and no accessories. In three instances, Defendant billed Medicare for CPAP machines and accessories that were prescribed to patients but never delivered.

         B. Evidence Introduced at Trial

         At trial, Special Agent David Graupner of the Department of Health and Human Services testified extensively for the Government regarding the investigation into Southern Respiratory and the business records obtained that illustrated the fraudulent scheme. The jury also heard from four former Southern Respiratory employees, Tina Merkerison, Amber Townsend, and Patricia Thayer, who all worked in the billing and audit department, and Melanie O'Connor, a respiratory therapist.

         The three billing employees, all unindicted co-conspirators who cooperated pursuant to proffer agreements, [2] provided testimony that detailed the billing practices at Southern Respiratory. (Tr. Exs. D-89, D-92.) Those three former employees, Tina Merkerison in particular, testified that Defendant instructed them to forge doctor and patient signatures in response to Medicare audits requested by the Center for Medicare and Medicaid Services ("CMS") and its contractor AdvanceMed. Next, four physicians, Dr. Pamela Salazar, Dr. James Polhill, Dr. Susan Land, and Dr. Chris Shepard, testified that their names were forged on patient files without authorization. The identity theft charges were further supported by physical evidence seized from Southern Respiratory that included carbon paper with traced signatures, cut out signature lines, pre-signed forms, and forged documents all found in what Defendant referred to as the "arts and crafts box." (See Tr. Exs. IB, 1C, 1C-1, 1C-2, ID.)

         After the close of the Government's case, Defendant invoked her constitutional right to not testify and did not present any evidence. Her main defense was not that the fraud did not occur, but rather it was the unindicted co-conspirators, especially delivery technician Steve McMillan, who committed the crimes. In support, defense counsel repeatedly questioned the credibility of the unindicted co-conspirators on cross-examination and laid much of the blame at the feet of McMillan, who did not testify. Now, Defendant makes two post-trial motions to challenge her conviction. (Docs. 108, 109.)

         II. DISCUSSION

         A. Motion for Judgment of Acquittal

         1. Legal Standard

         A motion for acquittal should be granted only if "the evidence is insufficient to sustain a conviction" on the offense charged. Fed. R. Crim. P. 29(a) . In considering a Rule 29 motion for judgment of acquittal, the trial court is required to determine whether, viewing all the evidence in the light most favorable to the Government and drawing all reasonable inferences and credibility choices in favor of the jury's verdict, a reasonable trier of fact could find that the evidence established guilt beyond a reasonable doubt. United States v. O'Keefe, 825 F.2d 314, 319 (11th Cir. 1987). The verdict must stand if there is substantial evidence to support it, that is, "unless no trier of fact could have found guilt beyond a reasonable doubt.7' United States v. Pineiro, 38 9 F.3d 1359, 1367 (11th Cir. 2004) (citation omitted).

         2. Counts 1-22

         Defendant argues that the evidence at trial was insufficient to prove beyond a reasonable doubt that she acted with the requisite intent to commit health care fraud as alleged in Counts 2 through 22 and conspiracy to commit health care fraud as alleged in Count 1. In support, Defendant contends the evidence at trial showed she relied on Steve McMillan's expert advice on billing and she was otherwise unaware of any issues with Medicare billing. Further, McMillan's commission reports purportedly prove seat cushions were delivered to patients for Counts 3, 4, 7-9, and 12-16. Finally, unindicted co-conspirators Tina Merkerison, Amber Townsend, and Patricia Thayer - all Southern Respiratory employees - testified that McMillan instructed them on billing, including billing for DME not provided to patients. This contradicted both the earlier testimony that Defendant directed the employees on Medicare billing and the employees' initial statements to investigators denying any wrongdoing. Thus, according to Defendant, the discrepancies in Southern Respiratory employees' testimony and the evidence of McMillan's involvement both show the Government's evidence of intent is insufficient to sustain the jury's verdict. (See Def.'s Mot. for J. of Acquittal, Doc. 108, at 3-6.)

         Viewing the evidence in the light most favorable to the Government, the Court finds there was ample evidence of Defendant's intent to support the jury's verdict. The Government needed to prove a knowing and willful execution of a scheme to defraud Medicare in connection with delivery of or payment for health care. See 18 U.S.C. § 1347; United States v. Marti, 294 Fed.Appx. 439, 444 (11th Cir. 2008). The Government was also required to prove that a conspiracy existed, that Defendant knew of it, and, with knowledge, voluntarily joined it. United States v. Crabtree, 878 F.3d 1274, 1285 (11th Cir. 2018).

         Defendant's focus on discrepancies in Southern Respiratory employees' trial testimony disregards the medical records introduced into evidence. A comparison of Southern Respiratory's patient records and the billing records from Brightree shows Defendant changed billing entries from K4 Wheelchairs to the more expensive K7 Wheelchairs and, in many instances, added wheelchair accessories that were not included in prescriptions or delivery tickets. The Brightree records show Defendant's login was used to makes these changes. (See, e.g., Tr. Ex. 3B, at 15-16; Tr. Ex. 4B, at 9; Tr. Ex. 12B, at 10-11.) This was supplemented with the testimony of Kathy Quehl, a Brightree representative, who explained that the software assigned unique login information to individual users and tracked the billing activity performed under that login. This evidence is sufficient to show Defendant knowingly and willfully executed the alleged scheme and that she, with knowledge, joined the conspiracy to execute said scheme.

         Moreover, on a Rule 29 motion, the Court must draw all reasonable inferences and credibility determinations in favor of the Government. Stated another way, the Court must assume the truth of the Government's evidence. United States v. Martinez, 763 F.2d 1297, 1312 (11th Cir. 1985). Accordingly, Defendant's arguments about the inconsistencies between Southern Respiratory employees' testimony and their initial statements to investigators are unavailing. The jury considered those differences and determined the witnesses were still credible; the Court must respect that determination.

         Defendant's argument regarding McMillan's commission reports showing delivery of seat cushions for Counts 3, 4, 7-9, and 12-16 fails for two reasons. First, while the commission reports show McMillan provided the seat cushions, his signed delivery tickets show that seat cushions were never provided. (Compare Tr. Ex. D-33A, at 3, with Tr. Ex. 3A, at 20; compare Tr. Ex. D-33A, at 28, with Tr. Ex. 12A, at 4.)[3] Further, Southern Respiratory employees testified that delivery tickets were placed on Defendant's desk for her to use when completing the billing. Commission reports were not submitted until the end of the month, many times weeks after Defendant billed the DME on the Brightree system. Thus, the commission reports were not the documents Defendant relied on to bill Medicare and do not require a judgment of acquittal on the above listed counts.

         Second, even if the seat cushions were on each patient's delivery ticket, Defendant's argument does not address the other improperly billed items in each of the above-listed counts. Put differently, the Brightree billing records still show Defendant changed the billing entries from K4 Wheelchairs to the more expensive K7 Wheelchairs and added the anti-tipping devices, loop heel holders, adjustable height armrests, and back cushions[4] when none of those accessories were delivered. (Compare Tr. Ex. 3A, at 20, with Tr. Ex. 3B, at 15-16; compare Tr. Ex. 12A, at 4, 14, with Tr. Ex. 12B, at 8-11.) As such, Defendant is not entitled to a judgment of acquittal on Counts 1-22.

         3. Counts 26-28

         Defendant was charged and found guilty of healthcare fraud in Counts 26-28 for billing Medicare for CPAP supplies not ordered by a physician, not medically necessary, or not provided as billed. Defendant attacks the evidence on these counts by arguing all the items billed were prescribed by the patient's physician, as shown in Trial Exhibits D-222, D-225, and D-228. While Defendant concedes that Melanie O'Connor's testimony and related documents showed she did not deliver all the items billed, Defendant maintains that it is the prescription that matters because only physicians - not respiratory therapists like O'Connor - have the authority to determine what DME a patient needs. (See Def.'s Mot. for J. of Acquittal, at 6-7.)

         Defendant's position is unsupported by the law and the evidence produced at trial. First, healthcare fraud includes billing for DME that was not prescribed by a physician, not medically necessary, qr not provided as billed. (See, e.g., Indictment, ¶¶ 19, 22, 25, 28.) Any one of the three options can support a conviction for healthcare fraud. Further, Stephen Quindoza, the Government's Medicare expert, testified that Medicare requires equipment to be prescribed and delivered to the patient for Medicare to pay the claim. So, while the CPAP supplies billed in Counts 26-28 were prescribed, they were not provided as billed. (See Tr. Ex. 26A, at 2-5; Tr. Ex. 27A, at 2-8; Tr. Ex. 28A, at 2-4.) Therefore, the evidence was sufficient to support the jury's verdict on those counts.

         4. Counts 29-36

         The jury found Defendant guilty of aggravated identity theft in Counts 29-36 for forging or aiding and abetting others forging the signatures of four doctors and three patients in an effort to comply with CMS audits. Aggravated identity theft requires the Government to prove the defendant knowingly transferred, possessed, or used a means of identification of another without lawful authority. 18 U.S.C. § 1028A(a). The identity theft must be committed during and in relation to an underlying felony listed in the statute, which includes health care fraud and conspiracy to commit health care fraud. See id. § 1028A(c)(5).

         Defendant makes two arguments regarding the identity theft counts. First, she contends that because there is insufficient evidence to support the underlying felonies of health care fraud and conspiracy, Defendant cannot be convicted of identity theft relating to those crimes. Second, Defendant argues there is no physical evidence connecting her to the forgeries, only the unreliable testimony of Southern Respiratory employees who continuously changed their story and contradicted one another. (See Def.'s Mot. for J. of Acquittal, at 8-9.)

         Neither of Defendant's arguments provide a basis for judgment of acquittal on the identity theft counts. As shown above, there is ample evidence to sustain a conviction for the underlying felonies. Of note, although Count 30 lists Count 23 as the corresponding underlying felony and the jury found Defendant not guilty on Count 23, conspiracy to commit healthcare fraud is also a qualifying underlying felony under 18 U.S.C. § 1028A(c)(5). Because Defendant was found guilty of conspiracy to commit healthcare fraud, there is an underlying felony to support the conviction of aggravated identity theft in Count 30.

         Moreover, the evidence at trial showed that Defendant instructed Tina Merkerison, Patricia Thayer, and Amber Townsend to forge doctors' and patients' signatures after the fact to comply with CMS audits. Merkerison testified extensively that Defendant tasked her with handling the audits and doing whatever was necessary to create the requested paperwork. Thayer also testified that Defendant instructed her to forge signatures and that she saw Defendant forge a physician's signature. Further, there was a significant amount of physical evidence to prove forgery occurred, including altered patient files, carbon paper with traced signatures, signature lines cut out from paperwork, and other evidence found in the so called "arts and crafts box." While the box was found at Merkerison's desk and she admitted to committing forgeries, it was done at the direction of Defendant.

         Finally, as previously stated, in a Rule 29 motion the Court must resolve credibility determinations in favor of the Government. Thus, Defendant's position that inconsistencies in the testimony of Southern Respiratory employees requires acquittal is unavailing. Overall, viewing the evidence in the light most favorable to the Government commands the conclusion that there was sufficient evidence to support the verdict on Counts 29-36.

         B. ...


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