United States v. Howard

• Decision Date: 07 March 2022
• Docket Number: No. 18-11602, No. 18-12395,18-11602
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Larry B. HOWARD, Raymond L. Stone, Defendants-Appellants. United States of America, Plaintiff-Appellee-Cross Appellant, v. Nicole R. Bramwell, Defendant-Appellant-Cross Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

28 F.4th 180

UNITED STATES of America, Plaintiff-Appellee,

v.Larry B. HOWARD, Raymond L. Stone, Defendants-Appellants.

United States of America, Plaintiff-Appellee-Cross Appellant,

v.Nicole R. Bramwell, Defendant-Appellant-Cross Appellee.

No. 18-11602

No. 18-12395

United States Court of Appeals, Eleventh Circuit.

Filed: March 7, 2022

Kirby A. Heller, U.S. Attorney General's Office, Washington, DC, John Alexander Romano, U.S. Department of Justice, Criminal Division, Washington, DC, Jeremy Raymond Sanders, U.S. Department of Justice, Criminal Division, Fraud Section, Washington, DC, U.S. Attorney Service - Middle District of Florida, U.S. Attorney's Office, Tampa, FL, for Plaintiff-Appellee.

Cassandra Snapp, Vincent Albert Citro, Mark L. Horwitz, President, Law Offices of Horwitz & Citro, PA, Orlando, FL, for Defendant-Appellant Larry B. Howard.

Rosemary Cakmis, Law Office of Rosemary Cakmis, Orlando, FL, Donna Lee Elm, Law Practice of Donna Elm, Cottonwood, AZ, Stephen John Langs, Karla Mariel Reyes, Federal Public Defender's Office, Orlando, FL, for Defendant-Appellant Raymond L. Stone.

Ellen Meltzer, John Alexander Romano, U.S. Department of Justice, Criminal Division, Washington, DC, Jeremy Raymond Sanders, John Andrew Michelich, U.S. Department of Justice, Criminal Division, Fraud Section, Washington, DC, Kirby A. Heller, U.S. Attorney General's Office, Washington, DC, U.S. Attorney Service - Middle District of Florida, U.S. Attorney's Office, Tampa, FL, for Plaintiff-Appellee-Cross Appellant.

Aaron Saleh Baghdadi, Baghdadi Law, PA, Longwood, FL, for Defendant-Appellant-Cross Appellee.

Before Branch, Luck, and Ed Carnes, Circuit Judges.

Ed Carnes, Circuit Judge:

Like bears to honey, white collar criminals are drawn to billion-dollar government programs. An example is Tricare, which provides health care insurance benefits for active and retired members of the military and their families. At last count, the Tricare program had around nine million beneficiaries and paid out to health care providers about fifty billion dollars a year.¹ Most of those providers have been honest.

Some have not been. See, e.g. , United States v. Chalker , 966 F.3d 1177, 1182 (11th Cir. 2020) (pharmacist convicted of conspiring to submit "false and fraudulent claims" to Tricare); United States v. Grow , 977 F.3d 1310, 1313 (11th Cir. 2020) (marketer convicted of "conspiring to commit healthcare and wire fraud, committing healthcare fraud, conspiring to receive and pay kickbacks, receiving kickbacks, and money laundering," all of which were related to Tricare payments for compounded prescriptions); United States v. Ruan , 966 F.3d 1101, 1120 (11th Cir. 2020) (medical doctors convicted of numerous crimes, including conspiracies to commit health care fraud and mail or wire fraud and to receive kickbacks related to the Tricare program and other medical benefit programs), cert. granted , ––– U.S. ––––, 142 S. Ct. 457, 211 L.Ed.2d 278 (2021) ; United States v. Shah , 981 F.3d 920, 922 (11th Cir. 2020) (medical doctor convicted of participating in a "kickback conspiracy that involved writing prescriptions for compounded drugs" paid for by the Tricare program).

In addition to the defendants in those cited cases, others who have violated federal law to enrich themselves off the Tricare program include the three appellants in this case. Nicole Bramwell² was a physician, Larry Howard was a pharmacist, and Raymond Stone is a veteran who retired from the Navy before the events in this case. The three were convicted of crimes involving the millions of dollars that Tricare paid Howard for filling compounded cream prescriptions for patients. Bramwell wrote the vast majority of those prescriptions, and Stone helped in recruiting some of the patients for whom Howard filled prescriptions. Federal law forbids paying or receiving kickbacks, or conspiring to do so, in connection with federal health care programs. The three of them were convicted for paying or receiving kickbacks and conspiring to do it. Howard was also convicted of laundering some of the proceeds.

I. PROCEDURAL HISTORY

Bramwell, Howard, and Stone were tried on a seven-count indictment. Count One charged all three of them with a multi-object conspiracy to defraud the United States and to offer, pay, solicit, and receive health care kickbacks to submit claims to Tricare for prescription compounded drugs, in violation of 18 U.S.C. § 371. Counts Two and Three charged Bramwell and Stone with receiving health care kickbacks, in violation of 42 U.S.C. § 1320a-7b(b)(1)(A). Counts Four and Five charged Howard with paying those kickbacks to the two of them, in violation of 42 U.S.C. § 1320a-7b(b)(2)(A). Counts Six and Seven also charged Howard with money laundering related to the funds he derived from the kickback scheme, in violation of 18 U.S.C. § 1957.

After a five-day joint trial, the jury deliberated just over four hours before finding each defendant guilty of all the charges against that defendant. The district court held separate sentence hearings for each of them. The court sentenced Howard to 160 months in prison; Stone to 24 months in prison; and Bramwell to no imprisonment at all, only 36 months of probation, with one year of it to be served in home detention. (The home detention condition allowed Bramwell to "leave, for example, for work-related needs or medical treatment, that sort of thing.")

Every party appeals. All three defendants challenge their convictions based on the sufficiency of the evidence. Howard also contends that the government constructively amended his indictment.³ And the government has cross-appealed, contending that Bramwell's sentence is unreasonably lenient.

II. THE SUFFICIENCY OF THE EVIDENCE

We review de novo the sufficiency of the evidence to support the jury verdict finding each defendant guilty of each crime with which that defendant was charged. In conducting our review, we view the evidence in the light most favorable to the verdict and draw all reasonable inferences and make all credibility choices in favor of the verdict. United States v. Iriele , 977 F.3d 1155, 1168 (11th Cir. 2020). We must affirm if "after viewing the evidence in the light most favorable to the prosecution, any rational [finder] of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Hernandez , 433 F.3d 1328, 1335 (11th Cir. 2005) (quotation marks omitted). "A guilty verdict cannot be overturned if any reasonable construction of the evidence would have allowed the jury to find the defendant guilty beyond a reasonable doubt." Iriele , 977 F.3d at 1168 (quotation marks omitted). And because a jury can freely choose among reasonable constructions of the evidence, "it is not necessary that the evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt." Id. (quotation marks omitted).

In considering the sufficiency of the evidence supporting their convictions, we keep in mind what the substantive convictions were not based on and did not involve. This is not a traditional health care fraud case in which the prescriptions were alleged to have been medically unnecessary, although there is reason to believe many may have been. And it is not a medical or pharmaceutical malpractice case. The issues are not whether the prescriptions involved were legitimate or medically necessary or good or bad for the patient.

None of that matters to the sufficiency of the evidence because the substantive kickback convictions were based entirely on whether there were kickbacks: In return for Bramwell writing prescriptions that Howard's pharmacy filled, did Howard pay and did Bramwell accept payments? And in return for Stone recruiting potential patients for whom prescriptions could be written that Howard's pharmacy would fill, did Howard pay and did Stone accept payments? The conspiracy convictions can be sustained based solely on evidence sufficient to support the kickbacks conspiracy without regard to any evidence of fraud. See United States v. Medina , 485 F.3d 1291, 1301–02 (11th Cir. 2007) (evidence sufficient to prove any one of the charged objectives of a multi-object § 371 conspiracy is sufficient to sustain the conviction). And Howard's challenge to his two money laundering convictions is based solely on his challenge to the sufficiency of the evidence to convict him of paying kickbacks.

A. Tricare, Compounded Creams, and the Investigation

We begin with the evidence providing background information about Tricare and the type of medications that led to the kickback charges in this case.

Among the benefits that Tricare provides its members and beneficiaries is a program that pays participating retail pharmacies for prescriptions they fill for Tricare members. The program's coverage includes a number of compounded drugs. Unlike a traditional prescription that is filled from a pre-made formulation already on the shelves, a prescription for a compounded drug requires a pharmacist to mix multiple ingredients together to meet a specific patient's special needs. The particular kinds of compounded drugs involved in this case are creams prescribed as treatments for pain and scarring.

Until May 2015, Tricare reimbursed pharmacies in exorbitant amounts for compounded creams, paying them thousands of dollars for filling or refilling each prescription. The large payments generated a flood of prescriptions, which resulted in huge payouts to some pharmacies. The volume of claims and the glory days of payouts for participating pharmacies peaked in April 2015. That was when, to stem the flood of claims and the tidal wave of payouts, Tricare announced policy changes that would take effect the next month. The policy changes were designed to lower Tricare's payments for compounded cream prescriptions by substantially reducing the amount it would pay for some ingredients or categories of ingredients used in the creams....