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 (9th Cir. 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 The government superseded, alleging in a count (“revised Count 41”) one act that was within the statute of limitations.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.

Image of the Hon. Ronald M. Gould from http://www.advocate.com/politics/marriage-equality/2014/09/03/ninth-circuit-panel-could-bring-more-good-news-marriage

Pie Chart image from http://www.prisonpolicy.org/reports/pie2015.html

Steven Kalar, Federal Public Defender, N.D. Cal. Website at www.ndcalfpd.org

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Case o' The Week: Better to Lose than Tie -- Flores-Perez and Interlocutory Appeal of Rule 29 After Hung Jury

Cirilio Flores-Perez had the bad luck to hang his federal jury, 9-3 for acquittal.

If he wanted review of the denial of his Rule 29 motions, explains the Ninth, he should have gone for a conviction. United States v. Flores-Perez, 2011 WL 2450984 (9th Cir. June 21, 2011), decision available here.


Players: Hard-fought and clever appeal by San Diego Assistant Defender Devin Burstein. Decision by Senior District Judge Mills (C.D. Illinois).

Facts: Flores-Perez hung a federal jury on a one-count indictment alleging an attempt to transport an undocumented alien. Id. at *1. (Nine to three in favor of acquittal, by the way). Id. The district court denied his Rule 29 motions brought at the close of the government's case and after the jury hung. Id.

The government then re-indicted with four counts, including the "attempt count." Id. Flores moved the district court to dismiss the superseding indictment on double jeopardy grounds. Id. His motion was denied, and Flores-Perez appealed. Id.

The government challenged the appeal for lack of jurisdiction. Id.

Issue(s): [Ed. note: The ‘84 Supreme Court decision Richardson v. United States, 468 U.S. 317 (1984), effectively eliminated defense double jeopardy challenges on interlocutory appeal, after a mistrial or hung jury.]

“[U]nder Richardson, double jeopardy claims asserting termination of jeopardy due to a hung jury and associated mistrial are no longer colorable.” Id. at *2. "Flores argues that Richardson and its progeny are not controlling because he is appealing the denial of his motion to dismiss the superseding indictment, not his Rule 29 acquittal motion.” Id.

Held: “We hold that the filing of a superseding indictment after mistrial does not raise a colorable double jeopardy claim.” Id. at *3. “[W]e lack jurisdiction to review the district court’s denial of the motion for acquittal.” Id. at *4.

Of Note: Senior, out-of-circuit, district Judge Mills creates a new Ninth rule in this case. The San Diego Defender cleverly argued that it wasn’t challenging the Rule 29 motion (barred on interlocutory appeal); it was challenging the superseding indictment that followed the jury hang. Id. at *3-5. Judge Mills rejects the challenge and makes a new Ninth rule along the way: “the issuance of a superseding indictment does not nullify the original indictment, and . . the issuance of a superseding indictment does not terminate the original jeopardy.” Id. at *4.

This is one of those simple new rules that has complex ramifications. Judge Mills favorably quotes authority that explains that all a superseding indictment does is create another choice for the government to proceed upon a trial – the original indictment, or the superseding. Seems the prudent move for the defense (and the district courts) is to now insist that earlier indictments be dismissed by the government when a superseding indictment is obtained, to prevent prosecutors from leap-frogging among charges before trial.

How to Use: Consider this case in the context of Allen charges. The decision on whether to ask for an Allen charge is always a tough choice for the defense. Remember than an Allen charge is that “dynamite” jury instruction designed to push a hung jury towards unanimity. Flores-Perez reminds us why this is such a hard call. If you’ve lost a truly righteous Rule 29 motion in the district court and end up with a hung jury and mistrial, you can kiss your appeal good-bye.

Is it actually better, in that setting, to get the Allen charge, risk the conviction, and preserve the right to appeal the denial of the Rule 29 motion? Flores-Perez is a good cases to tuck next to the Allen instruction tab on your trial binder, as a reminder of the appellate issues at stake.

For Further Reading: The Supreme Court’s Richardson decision created a particularly galling rule. To see the Richardson rule in action, consider James: a case out of the ND of Cal.

In the first round of this bank robbery case, the government flat-out forgot to introduce proof of FDIC insurance. The district court erroneously denied the Rule 29 motion, and the jury convicted on three out of four counts – hanging on the fourth. Jeopardy attached, the bank robber appealed, the denial of the Rule 29 was reversed by the Ninth, the defense celebrated. United States v. James, 987 F.2d 648, 652 (9th Cir. 1993).

But, as noted above, on the fourth count the jury hung. Because jeopardy didn’t attach, no interlocutory appeal was available and the bank robber never got the FDIC / Rule 29 issue from the fourth count before the Ninth. See United States v. James, 109 F.3d 597 (9th Cir. 1997). James was tried again and convicted. Id. at 598. Hence, after Richardson, the clearly-guilty – who have the good fortune of getting convicted – enjoy appellate review of their Rule 29 motion. Defendants facing weaker proof, who hang their juries, are out of luck in the Ninth.


"Hung jury" logo from http://www.hungjurytheband.com/


Steven Kalar, Senior Litigator N.D. Cal FPD. Website at www.ndcalfpd.org

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