Ninth Circuit Blog: Case o' The Week: Gov't Be-"Holden" to Ninth for New Rule - Holden, Health Care Fraud, and Continuing Offense

Hon. Judge Ronald M. Gould

SOL hook means doc is cooked.

United States v. Holden, 2015 WL 7769350 (9thCir. Dec. 3, 2015), decision available here.

Players: Decision by Judge Gould, joined by Judges Hawkins and Ikuta.

Facts: Dr. Holden, a podiatrist, was charged in a 59 count indictment, with 56 counts of health care fraud in violation of 18 U.S.C. § 1347. Id. at *1. Holden successfully moved to dismiss many of the counts as being outside the five year statute of limitations. Id. The government superseded, alleging in a count (“revised Count 41”) one act that was within the statute of limitations. The government consolidated the other (outside-of-statute-of-limitations) offenses into this revised Count 41, and dubbed it a “continuing scheme to defraud.” Id. The district court denied Holden’s challenge to revised Count 41.

Issue(s): “We focus on Holden's challenges to the original and superseding indictments . . . .. We must decide: (1) whether revised Count 41 was barred by the statute of limitations; (2) whether revised Count 41 improperly broadened the charges against Holden; (3) whether revised Count 41 alleged an execution of a fraudulent scheme; and (4) whether the inclusion of two counts in the superseding indictment resulted in a constructive amendment to the original indictment.” Id. at *1 (footnote omitted).

“On appeal, Holden challenges the Second Superseding Indictment on several grounds. He contends that revised Count 41 should have been dismissed because it violated the statute of limitations under 18 U.S.C. § 3282(a), broadened the charges against him, and failed to allege an execution of a fraudulent scheme.” Id. at *2.

Held: “We have not previously considered whether health care fraud in violation of 18 U.S.C. § 1347 is a continuing offense.”. . . . .

“Like the Fifth Circuit, we have already held that § 1344 is a continuing offense. See United States v. Najjor, 255 F.3d 979, 983–84 (9th Cir.2001); United States v. Nash, 115 F.3d 1431, 1441 (9th Cir.1997). We have also held that § 1344 is to be used as an interpretive model for § 1347. See United States v. Awad, 551 F.3d 930, 937–38 (9th Cir.2009). We agree with the Fifth Circuit and hold that health care fraud in violation of 18 U.S.C. § 1347 is a continuing offense.” . . . .

“So long as the “indictment was written so as to allege only one execution of an ongoing scheme,” id., we hold that the government may charge a single health care fraud scheme in violation of 18 U.S.C. § 1347 even when several acts in furtherance of the scheme fall outside the statute of limitations.” Id. at *3.

Of Note: You win the dismissal of an indictment or of charges. How long does the government have to re-indict, if you are now outside of the statute of limitations? Holden recounts the rule, found in 18 U.S.C. § 3288: six months from dismissal. Id. at *4 (if no grand jury is sitting - otherwise, it is sixty days). Query, however, whether a new indictment under this rule “impermissibly broaden[s] the charges”– Section 3288 isn’t a blank check for a fresh start before the grand jury.

How to Use: The result of this decision of first impression is that (presumably) the jury heard a great deal of evidence about offense conduct that was clearly outside of the statute of limitations. Reading between the lines of this brief opinion, it appears that the majority of the fraudulent billing was outside of the five year statute of limitations– but the conduct was all imported into the trial through the “hook” of a within-statute transaction. With health care fraud prosecutions on the rise, Holden is a decision worth the read: it can easily broaden your client’s worries over imprudent billing decisions well beyond the statute of limitations.

For Further Reading: “What is the role of the federal government in ending mass incarceration?” That, and other questions, are tackled in a very interesting report by the PRISON Policy Initiative. Take a look at the “whole pie” representation of who incarcerates whom in the U.S.. It is a fascinating graphic of the breakdown of offenses, local, state, and federal incarceration.

For a narrative of the incarceration report, and the pie chart “How many people are locked up in the United States?,” [A: 2.3 million on any given day!] visit the entry here.