United States v. King

In United States v. King, —- F.4th —-, No. 22-20620 (5th Cir. Feb. 21, 2024), the Fifth Circuit affirmed the defendants’ convictions, sentences, and restitution awards. Both defendants had been convicted of healthcare fraud and receiving Medicare kickbacks.

This case involved a five-defendant conspiracy to pay and receive kickbacks for referring Medicare beneficiaries for treatment that was unnecessary and sometimes not even provided. The two defendants who appealed were a married couple that “owned and operated group homes for vulnerable individuals who could not care for themselves.” Over seven years, they received at least $70,000 in bribes for sending their residents to another defendant’s clinic.

Ruling 1: The Fifth Circuit rejected the defendants challenges to the admission of several recordings. Those recordings captured conversations between a confidential informant and either these two defendants or one of their co-conspirators. Admission of those recordings did not violate the Confrontation Clause for two reasons (1) the recordings involved statements of co-conspirators in furtherance of the conspiracy, which are non-testimonial so not prohibited by the Confrontation Clause; and (2) others involved conversations between these two defendants and the informant, and the informant’s portion of the conversations were offered not for the truth of the matter but to provide context for the defendants’ recorded statements.

In addition, these recordings were not impermissible hearsay. Under Fed. R. Evid. 801(d)(2), the Government may admit a defendant’s out-of-court statements as non-hearsay, and the Fifth Circuit allows admission of some “reciprocal and integrated utterance(s)” between a defendant and another party to provide context and make the defendant’s statements “intelligible to the jury and recognizable as admissions.” Separately, the recordings of conversations between the other conspirator and the informant were admissible as statements “made by the [defendants’] coconspirator during and in furtherance of the conspiracy,” which is defined as non-hearsay. Fed. R. Evid. 801(d)(2)(E).

Ruling 2: The district court did not err by accepting the PSR’s estimate of approximately $500,000 in loss according to the “benefit” conferred on the codefendant’s clinic and the loss to Medicare. Here, the Government provided evidence that this scheme was pervasive and that no legitimate medical care was provided to these defendants’ residents.

“A defendant who challenges a PSR’s loss estimate bears the burden of presenting rebuttable evidence to demonstrate that the information in the PSR is inaccurate or materially untrue.” But here, the defendants, “failed to offer rebuttal evidence of any legitimate medical expenses billed to Medicare.” The district court did not err in adopting the PSR’s loss calculation.

Ruling 3: For similar reasons, the district court did not err in ordering restitution of roughly $500,000. The defendants argued that their restitution should have been limited to the $70,000 they personally received in kickbacks, but for purposes of restitution, “members of a conspiracy may be held jointly and severally liable for all foreseeable losses within the scope of their conspiracy regardless of whether a specific loss is attributable to a particular conspirator.”