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Medical Fraud Defense (Part 3)

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5. Initial Investigation

Interview Staff.  The FBI has likely interviewed all major staff members.  Staff members are often trained professionals and they are TERRIFIED of losing their license.  Statements to law enforcement are often a run for cover and are very hostile to your position.  Use an investigator with impeccable credentials because he/she will undoubtedly be on the witness stand explaining why the statement that he/she took from the witness is so different from that obtained by the FBI.  Credentials, credibility and integrity will be challenged.

6. Run the Sentencing Guidelines

Your big concern is the dollar bump up in penalty – which is huge.  Here is a <<Sentencing Worksheet Link>>.   This page from the <<US Attorney’s Manual>> reviews some of the factors that add sentencing points.  You can be sure that abuse of a position of trust and leadership role are going to be battle grounds in terms of whether they apply to your case.  But loss amount is the major driver at sentencing.  Here is what you need to know about federal sentencing loss amounts. <<Loss Calculation>>

7. Talk to the AUSA

You need to quickly assess the value of a plea.  You need your early acceptance of responsibility point reduction.  <<Good Summary of Law Here>>

You also need to find agreement as to loss amount (if possible).  A typical sentencing deal might include the top that the AUSA will ask for with an agreement that you can argue for a downward departure.

8. Black Friday Sale at Walmart !!!!

At the start of most federal fraud cases, there is a rush to the U.S. Attorney’s office that resembles the stampede that you see at Walmart on Black Friday.  Co-defendants, targets and potential defendants rush to be the prosecutor’s favorite cooperating defendant.  Unlike hard core violent criminals who fear retribution and the “snitch” label, white collar types want nothing more than to walk free at all costs. <<Singleton Case – Prosecutors Can “Bribe” Cooperators>>   Read U.S. Attorney Brief  justifying rewards to cooperators.  Finally, read this blog article, “The Use of Federal Rule of Criminal Procedure 35(b)” to reward cooperators after initial sentencing”.

9. Prepare Mitigation

We are fighters and assume we will win.  In state court, sentencing is often rigid and relatively inflexible.  Not true in medical fraud cases.  Put together a major mitigation packet.  This will include good things about your client from the past, charity work, overcoming adversity etc..  If should also include post offense conduct.  Hiring a professional billing outfit, reimbursing insurers, righting the alleged wrongs.

10. Superseding Indictments

Just when you think you are prepared for trial, the U.S. attorney will add, modify and complicate the case by filing a new and more onerous “superseding indictment”.  This is routine and you should expect that it will happen.  This is especially true and co-defendants drop like flies and cooperate.

In federal court, indictments are also redrawn if an indictment is dismissed because of legal defect or grand jury irregularity.  Both are rare but the government may return a new indictment within six months of the date of dismissal.  If the statute of limitations has run, you are in luck.   After the original limitation period has expired, a superseding indictment may narrow, but not broaden, the charges. See 18 U.S.C. §§ 3288-3289; United States v. Miller, 471 U.S. 130 (1985); United States v. Grady, 544 F.2d 598 (2d Cir. 1976). (This section based upon the U.S. Attorney manual)

11. If you are new to Federal Court

The federal public defender’s offices are wonderful in helping private counsel navigate their day to day world.  One caveat, medical fraud cases are not frequently defended at the public defender level so they may lack some expertise in the narrow specialty of health care fraud defense practice.  However, they are still a wonderful resource.  Check out these federal public defendant websites.

Federal Defenders of New York

Defender Services Office (Training)

12. Defenses & Jury Instructions

Unlike basic murder, battery, or drug crime cases, white collar and particularly criminal medical cases, do not have good or established jury instructions.  Your defenses will often focus on vagueness and culpable mental state.  If you have lost on the mechanics of the case, intent is a goldmine for the defense.

Health care defendants are sometimes cynical criminals but in many cases they are good people with mental and emotional problems. If you find a case where your provider is using drugs or has severe psychological issues, consider a mental state defense.   A good faith belief in the legitimacy of a practice can be a defense – even if that good faith belief is unreasonable.

We have a model special instruction on that point that you are free to use.  

In extreme cases we have used the insanity defense.  Your client need not be a lunatic and howl at the moon to qualify.  What if your client believes that his/her conduct is justified ?  The logic of the justification might be that the evil 1% run the insurance companies and your client is submitting phantom bills in order to provide necessary care to the poor.  While the cynical among you might claim that this is Bernie Sanders campaign platform, if the belief is more delusional than political, it just might sway some jurors.

Learn more about our physician defense practice.

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