United States v. McGill, CRIMINAL ACTION No. 12–112–01

• Decision Date: 11 September 2015
• Docket Number: CRIMINAL ACTION No. 12–112–01
• Citation: 128 F.Supp.3d 863
• Parties: United States of America v. Patricia McGill
• Court: U.S. District Court — Eastern District of Pennsylvania

128 F.Supp.3d 863

United States of America

v.Patricia McGill

CRIMINAL ACTION No. 12–112–01

United States District Court, E.D. Pennsylvania.

Signed September 11, 2015

Suzanne B. Ercole, Margaret M. Vierbuchen, U.S. Attorney's Office, Philadelphia, PA, for United States of America.

Robert N. Deluca, Devon, PA, for Patricia McGill.

MEMORANDUM

EDUARDO C. ROBRENO

, District Judge

Before the Court is Defendant McGill's motion to plead nolo contendere or make an Alford

plea as to Count One of the indictment charging conspiracy to commit healthcare fraud pursuant to 18 U.S.C. § 1349. For the reasons that follow, the Court will reject the proffer of such plea.

I. BACKGROUND

On March 21, 2012, Defendant Patricia McGill was charged by indictment with conspiring to commit healthcare fraud under 18 U.S.C. § 1349

(Count One) and substantive counts of healthcare fraud in violation of 18 U.S.C. § 1347 (Counts Two through Fourteen) in connection with her role at a Philadelphia hospice provider, Health Care Hospice, Inc. ("HCH"). ECF No. 1. Fifteen other defendants charged with various levels of involvement in the same healthcare fraud scheme previously entered guilty pleas or have been convicted at trial.¹ Defendant McGill is one of the few remaining defendants.²

Trial of this matter was previously scheduled to begin on September 1, 2015. However, immediately prior to the start of jury selection, Defendant's counsel made an oral motion for the Court to accept a nolo contendere plea or Alford

plea. See Scheduling Order (ECF No. 323). Specifically, defense counsel explained that Defendant McGill was willing to admit that she aided and abetted the commission of the healthcare fraud charges set forth in Counts Two through Fourteen of the indictment, but she refused to admit that she conspired to commit healthcare fraud as charged in Count One. Based on this turn of events, this Court continued the trial until September 9, 2015, and ordered the parties to submit written briefs as to whether the Court should accept a nolo contendere plea or Alford plea under the circumstances of this case. See Scheduling Order (ECF No. 323). Both Defendant McGill and the Government have submitted such briefs, and a hearing on this motion was held on September 9, 2015.

If this case proceeds to trial, the Government contends it would prove the following facts:³

HCH, a for-profit hospice provider, was incorporated in 1999 under the laws of the Commonwealth of Pennsylvania. HCH was in the business of providing hospice services for patients at nursing homes, hospitals, and private residences. HCH received Medicare, Medicaid, and private insurance reimbursement for providing home care and in-facility care to purportedly terminally ill patients with life expectancy prognoses of six months or less.

Defendant McGill, a registered nurse, was employed at HCH and served as the Director of Nursing and Clinical Services commencing in or about 2005. In that capacity, she was responsible for the planning, implementation, and evaluation of HCH's hospice services in accordance with local, state, and federal regulations. Defendant McGill also supervised clinical nursing staff, which included reviewing staff documentation and patient charts to assure quality and appropriateness for hospice service and maintaining records of patient visits. Defendant McGill was supervised by the Director and owner of HCH, Alex Pugman,⁴ who conceived and orchestrated a plan to defraud Medicare of approximately $16 million dollars from about January 2005 through December 2008. The scheme involved falsification of nursing notes and home health aide documentation and other records, which were reviewed by Defendant McGill.

With the above-mentioned indictment, Defendant McGill was charged with knowingly authorizing the admission and maintenance of ineligible patients for hospice services, resulting in fraudulent healthcare insurance claims submitted by HCH totaling approximately $9,328,000, and authorizing HCH staff to falsely document more costly levels of hospice services resulting in fraudulent claims totaling approximately $325,000. ECF No. 1.

II. LEGAL STANDARD

A. Nolo Contendere Pleas

1. Federal Rule of Criminal Procedure 11

and Nolo Contendere Pleas Generally

Under Federal Rule of Criminal Procedure 11

, a defendant may plead not guilty, guilty, or nolo contendere. Fed.R.Crim.P. 11(a)(1). A plea of nolo contendere, however, requires consent of the court. Id. Before accepting a plea of nolo contendere, Rule 11 instructs that "the court must consider the parties' views and the public interest in the effective administration of justice." Fed.R.Crim.P. 11(a)(3). "[T]he reason for considering these factors is that nolo pleas come with various costs and benefits, and the court must ensure that in the case before it the benefits outweigh the costs." United States v. Mancinas–Flores, 588 F.3d 677, 682 (9th Cir.2009). Rule 11 is silent with respect to what, if anything, the court must consider before rejecting a nolo plea.

While the Third Circuit has not ruled on this issue, other courts of appeals have held that a district court has broad discretion in determining whether to accept a nolo plea and may reject the plea if it determines that accepting the nolo plea is not in the public interest. See, e.g. , Mancinas–Flores , 588 F.3d at 682

; United States v. Buonocore , 416 F.3d 1124, 1131 (10th Cir.2005) ("One of the most important characteristics of the plea of nolo contendere ... is that its acceptance by the court is not a matter of right of the defendant but is entirely within the discretion of the court." (internal quotation marks omitted)); United States v. David E. Thompson, Inc., 621 F.2d 1147, 1150 (1st Cir.1980) ("Acceptance of a nolo plea is solely a matter of grace." (internal quotation marks omitted)); United States v. Soltow, 444 F.2d 59, 60 (10th Cir.1971) ("[T]he acceptance of [a nolo] plea is a matter solely within the discretion of the court."). This is consistent with the Notes of the Advisory Committee from the 1974 amendments to Federal Rule of Criminal Procedure 11, which provide that "the balancing of the interests is left to the trial judge," so long as the judge "take[s] into account the larger public interest in the effective administration of justice." Fed.R.Crim.P. 11, Advisory Comm. Note to 1974 Amend. The Advisory Committee recognized that "[t]he defendant who asserts his innocence while pleading guilty or nolo contendere is often difficult to deal with in a correctional setting, and it may therefore be preferable to resolve the issue of guilt or innocence at the trial stage rather than leaving that issue unresolved, thus complicating subsequent correctional decisions." Id.

Accordingly, the drafters of Rule 11

"intended to make clear that a judge may reject a plea of nolo contendere and require the defendant either to plead not guilty or to plead guilty under circumstances in which the judge is able to determine that the defendant is in fact guilty of the crime to which he is pleading guilty." Id.

2. Effect of Nolo Contendere Pleas

For purposes of punishment, a plea of nolo contendere is the same as a guilty plea. Fed.R.Crim.P. 11

, Advisory Comm. Note to 1974 Amend. The nolo contendere plea is technically an admission as to every essential element of the indictment.

United States v. Bessemer & Lake Erie R.R. Co. , 717 F.2d 593, 597 (D.C.Cir.1983)

. Although its literal meaning is "I do not contest it," a nolo plea is "tantamount to ‘an admission of guilt,’ " such that all that remains for the court to do after accepting the plea is enter judgment and pass sentence. Lott v. United States, 367 U.S. 421, 426, 81 S.Ct. 1563, 6 L.Ed.2d 940 (1961) (quoting Hudson v. United States, 272 U.S. 451, 455, 47 S.Ct. 127, 71 L.Ed. 347 (1926) ). Unlike a guilty plea, however, a nolo plea cannot be used against a defendant as an admission in a subsequent criminal or civil case. See Fed.R.Evid. 410(a)(2) ; Fed.R.Crim.P. 11, Advisory Comm. Note to 1974 Amend.

By entering a nolo plea, a defendant waives any procedural rights that have a "direct connection to the determination of [the] defendant's guilt or innocence." United States v. DeCosta, 435 F.2d 630, 632 (1st Cir.1970)

. An appellate court, however, may still review it for jurisdictional defects and challenges to the sufficiency of the indictment. Bessemer, 717 F.2d at 597–98 ; United States v. Am. Serv. Corp. , 580 F.2d 823, 825 (5th Cir.1978).

With respect to sentencing, while a reduction for acceptance of responsibility under a nolo contendere is not automatically barred by the nature of the plea, such a plea may be, as a general proposition, inconsistent with the acceptance of responsibility and is a relevant factor to consider when determining the sentence. United States v. Gordon, 979 F.Supp. 337, 342 (E.D.Pa.1997)

. Several cases outside this Circuit have come to this general conclusion. See, e.g. , United States v. Haversat, 22 F.3d 790, 799 (8th Cir.1994) (holding that defendant's plea of nolo contendere, while continuing to minimize his role in price fixing conspiracy, was not acceptance of responsibility needed to justify a reduction in offense level); United States v. Boyle, 10 F.3d 485, 490 (7th Cir.1993) (affirming district court's refusal to reduce defendant's offense level under the sentencing guidelines for acceptance of responsibility after a nolo contendere plea because defendant had not demonstrated any responsibility for his criminal conduct).

3. Standard for Consideration of Nolo Contendere Pleas

Throughout the federal district courts, "factors considered relevant by particular courts in determining whether to permit the plea of nolo contendere vary." Fed.R.Crim.P. 11

, Advisory Comm. Note to 1974 Amend. This Court has no general policy as to whether to accept or reject nolo contendere pleas, instead exercising discretion depending on the circumstances.

Courts in this Circuit have identified a number of factors that may be helpful...