United States v. Grow
| Decision Date | 21 October 2020 |
| Docket Number | No. 18-11809,18-11809 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Monty Ray GROW, Defendant-Appellant |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Jonathan Colan, Aileen Cannon, Emily M. Smachetti, U.S. Attorney Service-Southern District of Florida, U.S. Attorney Service-SFL, Miami, FL, Phillip Drew DiRosa, U.S. Attorney's Office, for Plaintiff-Appellee.
David Oscar Markus, Markus/Moss, PLLC, MIAMI, FL, for Defendant-Appellant.
Before LUCK, ED CARNES, and MARCUS, Circuit Judges.
A jury convicted Monty Grow of conspiring to commit healthcare and wire fraud, committing healthcare fraud, conspiring to receive and pay kickbacks, receiving kickbacks, and money laundering. The district court sentenced him to 262 months’ imprisonment. Grow argues on appeal that his convictions must be reversed because the evidence was insufficient on all counts, the district court's instruction to the jury on the third day of deliberations was coercive and prejudicial, and the district court plainly erred in failing to instruct the jury on the elements of wire fraud. Grow also argues that his twenty-year sentence for conspiracy to commit healthcare and wire fraud must be reversed because it was more than the maximum sentence allowed by the jury's general verdict. After reviewing the record and the briefs, and considering the parties’ oral arguments, we affirm Grow's convictions but vacate his twenty-year sentence for conspiracy to commit healthcare and wire fraud and remand for further proceedings consistent with this opinion.
Grow played football in college and the National Football League. But his football career was short-lived. He suffered a career-ending knee injury and retired after playing professional football for only two years. Life then took Grow in a different direction—he invested in real estate and a durable medical equipment company—before he found himself marketing medical products for a variety of companies.
In early 2014, Grow started working for InforMD Solutions, a company that marketed compounded medications to doctors for a pharmacy. Compounded medications are made by blending medically active and inactive ingredients into a mixture. They are designed to serve the particular needs of a patient that would otherwise be unmet by commercially available medications.
Grow worked for InforMD as an independent contractor and was paid only commissions. Whenever a doctor prescribed a medication that Grow had recommended, the doctor would fax the prescription to InforMD, which would then credit the prescription to Grow's account and forward it to the pharmacy to be filled. Grow's commissions were calculated using a "tiered multilevel structure," which meant that he was paid for his own referrals and any referrals made by representatives he brought in, any representatives brought in by those representatives, and so on down the pyramid. Grow found it difficult to market compounded medications for InforMD because the doctors he approached often had existing relationships with other marketers.
By October 2014, Grow left InforMD and formed his own marketing company using a similar business model. He teamed up with a pharmacy, Patient Care America, to market three of its compounded medications: a pain cream; a scar cream; and a metabolic vitamin. He also brought over two sales representatives and paid them using the same tiered commission structure. Unlike InforMD, however, Grow's company recruited patients instead of doctors and used telemedicine companies to prescribe the creams and vitamins to patients.
As the head of operations, Grow "typically did not talk to patients." Grow was primarily responsible for helping and recruiting sales representatives, and his representatives were responsible for soliciting recruits.1 After speaking with a recruit, Grow's representatives would fill out an intake form with basic information about the recruit, including their name, the location of any scars and pain on their body, and whether they wanted the metabolic vitamin. Depending on the telemedicine company Grow used, representatives would also include either a "suggestion" of what the doctor should prescribe or a prefilled prescription for the doctor to do nothing more than sign.
Grow told his representatives to "always" use the prescription codes p-01 for the pain cream and sc-01 for the scar cream because they "paid the highest reimbursement from the insurance company."2 Grow also told his representatives to pick the largest size for each cream—360 grams—because it "paid the highest insurance payment" and would give them "the highest commission."3 And he said to mark as many refills as possible (either three or six, depending on the telemedicine company) because he and his representatives got "commissions on all the refills."
After everything had been filled out, Grow would forward the materials to a telemedicine company, which would arrange for a doctor to call the recruit. If the telemedicine doctor couldn't reach the recruit, the recruit's file would be "cancelled." If the doctor got ahold of the recruit, the doctor would conduct a brief consult—typically between five and seven minutes, but sometimes as short as three minutes—and prescribe Patient Care's creams and vitamins. Recruits would "rarely" be rejected. For one of the two telemedicine companies Grow used, doctors issued prescriptions to ninety-seven percent of recruits they spoke with. The telemedicine companies charged Grow a "consult fee" each time one of their doctors spoke with a recruit.
Once a doctor issued a prescription, the telemedicine company would fax it to Grow. If the most expensive options had not been prescribed, Grow "would get upset and get [the prescription] changed" by complaining to the telemedicine company's owner. When Grow was satisfied with a prescription, he would forward it to Patient Care. Patient Care would then fill the prescription, mail the creams and vitamins to the recruit, and submit a claim for reimbursement to the recruit's insurance company. Patient Care would also charge recruits a copay, but Grow told recruits (and told his representatives to tell their recruits) that they didn't need to pay their copays because Patient Care would never collect on them. Grow and his representatives usually were correct about that, but sometimes Patient Care would send follow-up bills to recruits. When that happened, Grow told his representatives that they could pay the copays for the recruits.
Grow's company marketed exclusively to recruits insured by Tricare, the government's health insurance program for military personnel and their families. From his time at InforMD, Grow knew that Tricare was "the best payer" because it would always approve claims for compounded medications. And Tricare paid for Patient Care's creams and vitamins at exorbitant rates. A single bottle of the metabolic vitamins cost Patient Care only $76.90 to produce but was reimbursed by Tricare at a rate of $6,164.31—a profit of $6,087.41. The profit on 360-gram jars of pain and scar cream was $5,329.15 (for a jar of pain cream) and $15,729.82 (for a jar of scar cream). Grow split the profits with Patient Care evenly, which meant that he earned approximately $13,500 for each recruit that ordered the creams and vitamins. Grow received the same percentage commission on any refills, too.
If one of Grow's sales representatives referred a recruit who got prescribed creams and vitamins, Grow would share a cut of his commission with that representative and any other representatives in their "upline." The payout differed depending on the representative and their position in the hierarchy. Some, at the bottom, received only a two-percent cut of the profits. Grow's most successful sales representative—Ginger Lay—received a forty-percent cut, minus the cost for the telemedicine consults.
Grow's representatives weren't the only ones getting paid. Some recruits got paid commissions just for ordering their own creams and vitamins. Grow also helped Lay set up a survey program where recruits were paid $1,000 a month to try the creams and vitamins and write about their experiences. Lay did nothing with the results of the survey; its purpose was simply "[t]o refer more Tricare beneficiaries and get paid commissions."
Aside from earning commissions, Grow also made money by selling Patient Care a wetting agent to use in its creams. Specifically, Grow sold ethoxydiglycol under the brand "Ethoxy Gold" for $12.50 per milliliter, which Tricare would reimburse at somewhere between $55 to $60 per milliliter.
Grow told Patient Care that the reimbursement rate for Ethoxy Gold was "advantageous" and it could use Ethoxy Gold to fill up to twenty percent of the total volume of a cream.
At its peak, Grow's company was making $2 million every two weeks and had approximately 130 sales representatives covering as many as 650 recruits. Grow did not let his earnings go to waste—he bought two jet skis for $24,521.36, a Range Rover for $90,478.45, a Porsche 911 for $105,544.94, and a waterfront mansion for $1,539,815.42. However, sometime in May 2015 Tricare caught on and stopped paying for Patient Care's creams and vitamins, so Grow's business "ceased to exist."
In November 2016, a grand jury indicted Grow in the Southern District of Florida. Grow was later charged in a superseding indictment with the following counts:
| Count 1: | conspiracy to commit healthcare fraud and wire fraud, in violation of 18 U.S.C. section 1349 ; |
| Counts 2–8: | healthcare fraud, in violation of 18 U.S.C. section 1347 ; |
| Count 9: | conspiracy to pay and receive healthcare kickbacks, in violation of 18 U.S.C. section 371 ;4 |
| Counts 10–14, 17–18, 20, 22–26, 28–33 5: | receipt of kickbacks in connection with federal healthcare program, in violation of 42 U.S.C. section 1320a-7b(b)(1)(A) ; |
| Counts 36–41, 43–44: | payment of kickbacks in connection with a federal healthcare program, in violation of 42 |
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