United States v. Jones

• Citation: 664 F.3d 966
• Decision Date: 15 December 2011
• Docket Number: 11–60159.,Nos. 10–60944,s. 10–60944
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Telandra Gail JONES; Theddis Marcel Pearson, Defendants–Appellants.United States of America, Plaintiff–Appellee, v. Theddis Marcel Pearson, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

664 F.3d 966

UNITED STATES of America, Plaintiff–Appellee,

v.Telandra Gail JONES; Theddis Marcel Pearson, Defendants–Appellants.United States of America, Plaintiff–Appellee,

v.Theddis Marcel Pearson, Defendant–Appellant.

Nos. 10–60944

11–60159.

United States Court of Appeals, Fifth Circuit.

Dec. 15, 2011.

Gaines H. Cleveland, Asst. U.S. Atty., Gulfport, MS, David M. Blank, U.S. Dept. of Justice, Office of Counsel to the Inspector Gen., Washington, DC, Jason Scott Gilbert, Asst. U.S. Atty. (argued), Jackson, MS, for Plaintiff–Appellee.

John Michael Helms, Jr. (argued), Helms, Roberts & Diaz, L.L.P., Michael J. Todd, Law Office of Michael J. Todd, P.C., Dallas, TX, John Keith Perry, Jr., Sparkman, Zummach & Perry, P.C., Southaven, MS, Merrida P. Coxwell, Jr., Charles Richard Mullins (argued), Coxwell & Associates, P.L.L.C., Jackson, MS, for Defendants–Appellants.

Appeals from the United States District Court for the Southern District of Mississippi.

Before SMITH, PRADO and ELROD, Circuit Judges.

PRADO, Circuit Judge:

This appeal arises out of the nearly month-long trial of Telandra Jones, Theddis Pearson, and five other defendants for Medicare fraud and related crimes stemming from the practices of their business, Statewide Physical Medicine Group. The Appellants used unauthorized personnel to perform physical rehabilitation on Medicare patients and then billed Medicare at an inflated rate for those treatments. The jury convicted Pearson of five counts of health care false statements and one count each of theft of government funds and money laundering. Jones was convicted only of theft of government funds and money laundering. Because we find that the verdict form used by the district court lowered the level of mens rea required to convict Pearson of health care false statements, we REVERSE his convictions on those counts. On all other claims raised by the Appellants, we find no reversible error and therefore AFFIRM Jones's and Pearson's convictions for theft of government funds and money laundering.

I. BACKGROUND

A. Factual Background

In June 2000, Telandra Jones and Theddis Pearson (collectively, the “Appellants”) along with Jones's brother, Alonzo Williams, opened Statewide Physical Medicine Group (“Statewide”) in Mississippi. Pearson became the chief executive officer and was in charge of setting up the business and overseeing the day-to-day operations. Jones, who worked out of Dallas, Texas, became the chief financial officer and was in charge of billing. Statewide operated as a physical rehabilitation provider for Medicare patients. Since Statewide operated in Mississippi, Cahaba, Medicare's regional fiscal carrier for Mississippi, oversaw the claims submitted by Statewide.

Statewide's business model was to have doctors evaluate patients to see whether they had a need for therapeutic exercise. If such treatment was ordered by the doctor, then Statewide would have its personnel go into the patient's home and provide the treatment. The treatment was administered generally by kinesiotherapists (“KTs”) hired by Statewide. KTs typically have four-year college degrees but there were at least three Statewide employees who provided treatment who did not have a four-year degree. The physicians who ordered the treatment were not physically present when Statewide's employees went into patients' homes and provided the treatment.

In providing treatment in this way, the Appellants sought to rely on Medicare's general supervision exception. Section 410.26 of Title 42 of the Code of Federal Regulations requires that, in order to bill Medicare, either a physician must render the service provided or the service provided must be performed under a physician's direct supervision. According to section 410.32, direct supervision does not mean that the physician must be present in the same room with the rendering personnel, but the physician must be present in the building and immediately available to provide assistance and direction throughout the time the rendering personnel is performing services. There is one relevant exception to this requirement of direct supervision. Where either (1) the provider is serving homebound patients in medically underserved areas where there are no available home health services or (2) the service is an individual or intermittent service performed by personnel meeting pertinent state requirements and the service is an integral part of the physician's service to the patient, only “general supervision” is required. That is, the physician need not be physically present at the patient's residence when the service is performed; however, the service must be performed under his/her overall supervision and control. Though there were home health services available in the areas that Statewide served, the Appellants claim that they were permitted to provide general supervision treatment under another exception that allowed treatment in spite of the existence of home health services where the patient has exhausted home health benefits under Medicare.

After an in-home treatment was provided, the Statewide employee who provided the treatment would prepare a “treatment sheet,” which the doctor who ordered the treatment would later review and approve. Secretaries in the individual Statewide offices—Laurel, Jackson, Moss Point, Meridian, and Hattiesburg, Mississippi and York, Alabama—would enter the treatment data from the treatment sheets into a billing sheet by adding up the number of checkmarks, each of which indicated a treatment administered. The billing sheet was sent to Jones in Dallas, where she reviewed it and sent it on to Cahaba. Jones billed Medicare for the treatments provided based on the area of the body treated and not by time intervals.

B. Proceedings Below

The Government indicted the Appellants in the Jackson Division of the Southern District of Mississippi in February 2009. On October 15, 2009, the Government obtained a Rule 48(a) dismissal from the Jackson Division. Five days later, the Government obtained an indictment against the Appellants, Williams, and four doctors associated with Statewide in the Hattiesburg Division. Appellants were charged with conspiracy to commit Medicare fraud (Count 1), Medicare fraud (Counts 2–6), healthcare false statements (Counts 7–11), theft of government funds (Count 12), and money laundering (Count 13). The prosecution focused primarily on two issues. First, the Government alleged that Statewide had billed for services to patients in their homes by persons who were not sufficiently licensed or qualified to provide services at a time when a doctor was not physically present. And second, the Government alleged that it was impermissible for Statewide to bill certain services by area of the body, as opposed to by time unit.

After the Government rested, the Appellants moved for a judgment of acquittal, which the district court denied. Appellants renewed their motions after the close of their evidence, and the district court again denied them. The jury found Pearson guilty of making health care false statements (Counts 7–11) and Jones and Pearson guilty of theft of government funds (Count 12) and money laundering (Count 13). Both Jones and Pearson were acquitted of the remaining counts, as were the other defendants. Jones was sentenced to 120 months of imprisonment for each of Counts 12 and 13, to run concurrently, to be followed by three years of supervised release. Jones was ordered to pay $18,064,447.73 in restitution and a $200.00 special assessment. Pearson also was sentenced to a total of 120 months of imprisonment: 60 months for Counts 7–11, 120 months for each of Counts 12 and 13, to run concurrently, to be followed by three years of supervised release. Pearson was ordered to pay $18,064,447.73 in restitution and a $700.00 special assessment. The district court also entered a forfeiture order as to both defendants. The Appellants timely appealed, invoking our jurisdiction under 28 U.S.C. § 1291.

II. DISCUSSION

A. Dismissal of the First Indictment

The Appellants argue that it was error for the district court to have permitted the Government to dismiss the First Indictment against them because they claim the Government sought the dismissal in bad faith. Additionally, they claim it was erroneous for the district court to have dismissed the First Indictment without giving the Appellants notice and an opportunity to be heard. Rule 48(a) of the Federal Rules of Criminal Procedure allows the government to dismiss an indictment “with leave of court.” This “leave of court” requirement “has been interpreted ‘to allow the courts to exercise discretion over the propriety of a prosecutorial motion to dismiss.’ ” United States v. Welborn, 849 F.2d 980, 983 (5th Cir.1988) (quoting United States v. Salinas, 693 F.2d 348, 351 (5th Cir.1982)). The primary intent of the “leave of court” requirement is to “protect the defendant against prosecutorial harassment.” United States v. Hamm, 659 F.2d 624, 628 (5th Cir.1981) (en banc). We review the district court's decision to grant the Government's request for a dismissal under Rule 48(a) for abuse of discretion. United States v. Salinas, 701 F.2d 41, 42 (5th Cir.1983). But, we have noted that “[t]he exercise of [the Executive's] discretion with respect to the termination of pending prosecutions should not be judicially disturbed unless clearly contrary to manifest public interest.” United States v. Cowan, 524 F.2d 504, 513 (5th Cir.1975).

1. Bad Faith

Appellants allege that the Government acted in bad faith when, instead of seeking a superseding indictment in the Jackson Division of the Southern District of Mississippi, it filed a Second Indictment in the Hattiesburg Division. Appellants contend that this was done to obtain a whiter jury pool; Pearson is African–American. “Bad faith arises when the prosecution is motivated by considerations clearly contrary to the public interest and the public interest is not...