United States v. Sisco
| Decision Date | 06 January 2023 |
| Docket Number | 22-5202 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. EUGENE SISCO, III, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
NOT RECOMMENDED FOR PUBLICATION
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF KENTUCKY
Before: READLER, MURPHY, and MATHIS, Circuit Judges.
While operating several outpatient opioid abuse disorder clinics in southeastern Kentucky, Eugene Sisco, III devised two schemes aimed at bilking his clients and the federal government respectively. One involved charging his patients directly for services that Medicaid otherwise would have covered (and sometimes did actually cover). The other required patients irrespective of medical need, to provide weekly urine samples and have those samples undergo multiple, unnecessary tests at Sisco's urinalysis laboratory. Those services were billed to the government.
Together these schemes netted Sisco millions. They also garnered him a criminal indictment: a federal grand jury charged Sisco with one count of wire fraud (for the cash payment scheme) and one count of health care fraud (for the urinalysis scheme). After a six-day trial, a jury found Sisco guilty on both counts. We affirm.
Eugene Sisco, III owned medical clinics that treated individuals struggling with opioid addiction. Sisco's clinics provided a collection of services commonly referred to in the health care industry as Medication Assisted Treatment (MAT). Those services included outpatient physical examinations, counseling, urine drug testing (UDT), and prescriptions for Suboxone, a medication used to treat opioid dependence. UDT was a particularly critical service, as it would confirm that a patient was taking Suboxone and not using other drugs.
Following the passage of the Affordable Care Act, Kentucky expanded its Medicaid coverage to include MAT. When it did, Sisco enrolled his businesses as Medicaid providers. That same year, Kentucky's Department of Medicaid Services advised Sisco that its Medicaid rules had been amended to prohibit providers from charging a Medicaid-eligible recipient for services covered by Medicaid; if Medicaid covered a service, such as MAT, the provider could only charge Medicaid for those services.
That warning went unheeded. Sisco's businesses continued to charge their Medicaid-eligible patients for services. To cover his tracks, Sisco told the clinic's patients that the payments were required because Renew Behavioral Health, a purportedly "independent company" that supplied services to Sisco's clinics, was not a Medicaid provider. Renew, however, existed only on paper, seemingly created by Sisco for the sole purpose of obtaining patients' out-of-pocket payments. All services supposedly done by Renew were in fact performed by employees of Sisco's clinics. The clinics also billed Medicaid for many of those same services. In total, Sisco collected over five million dollars from his patients, many of whom were Medicaid-eligible.
Sisco's billing practices did not go unnoticed. His patients complained to Kentucky officials, who, in turn, issued warnings about Sisco's business practices. When Sisco's employees also took notice of patient complaints, Sisco brushed them off, characterizing them as "scare tactics" and falsely asserting that he had "spoken to multiple agencies" who had "cleared" his approach. He also gave a host of conflicting explanations as to why cash payments were needed.
Apart from abusing the Medicaid reimbursement process, Sisco's clinics also engaged in questionable practices related to UDT. Historically, upon arriving at one of Sisco's clinics, every patient underwent presumptive point-of-care UDT. If the presumptive test revealed the presence of drugs other than Suboxone, the clinic sent a sample for outside testing. Following Sisco's acquisition of Toxperts, a testing laboratory, practices changed at his clinics. Samples were sent exclusively to Toxperts for further testing. And Toxperts, in turn, began to utilize more sophisticated (and expensive) testing mechanisms.
Sisco's clinics started losing patients to clinics that did not charge cash. So Sisco stopped that practice. To make up the lost profits, Sisco required weekly attendance by clinic patients, which included weekly point-of-care tests. The evidence at trial, however, indicated that there was no medical need to test weekly patients who were compliant with their treatment. Sisco also mandated confirmation testing at Toxperts, testing that should typically be done only in instances where an initial sample tested positive for a substance the patient should not be taking. The net result was that Sisco billed Medicare and Medicaid for UDT with even greater frequency. In all, Toxperts netted more than four million dollars from the government over four years, including a spike in reimbursements after Sisco stopped seeking cash from his clients. Yet no written orders from a doctor existed for any of the UDT done at Sisco's clinics.
Eventually, the federal government became wise to Sisco's practices. A grand jury indicted Sisco on two separate counts. The first, wire fraud in violation of 18 U.S.C. § 1343, resulted from him charging patients for MAT services that were otherwise billable to Medicaid. The other, health care fraud in violation of 18 U.S.C. § 1347, concerned his seeking payments for medically unnecessary UDT. During the ensuing trial, the jury heard from nearly 30 witnesses-including Sisco's former employees and business partners, various investigators, and expert witnesses-and received dozens of exhibits documenting Sisco's business practices. After a full week of trial, the jury returned guilty verdicts on both counts. The district court sentenced Sisco to 125 months' imprisonment on the wire fraud count and 120 months on the bank fraud count, to run concurrently. Without aid of the jury, the district court also ordered restitution in the amount of $5,699,795.70. Sisco's timely appeal followed.
Sisco's main argument is that there was insufficient evidence to support the jury's verdict as to each count. Overturning a jury verdict on appeal is a tall order. At this stage, we simply consider whether, after construing all of the evidence in favor of the jury verdict, the jury "behaved irrationally in concluding beyond a reasonable doubt that" Sisco committed wire and health care fraud. See United States v. Miller, 982 F.3d 412, 440 (6th Cir. 2020). The hurdle Sisco faces is particularly daunting due to the fact that his challenges implicate the jury's findings with respect to his criminal intent, which "should not be lightly overturned." See United States v. Winkle, 477 F.3d 407, 413 (6th Cir. 2007) (citations and quotations omitted). With this understanding of the task facing Sisco, we turn first to the wire fraud conviction.
To prove wire fraud, the government had to show that Sisco (1) devised or participated in a scheme to defraud; (2) used interstate wire communications to further the scheme; and (3) intended to deprive the victim of money or property. See United States v. Mazumder, 800 Fed.Appx. 392, 394 (6th Cir. 2020) (citing United States v. Daniel, 329 F.3d 480, 485 (6th Cir. 2003)). Sisco takes issue with the third element, which requires a showing that Sisco acted willfully-that is, for the "purpose of inducing" his victims to "part with [money or] property" that they would "not otherwise [part with] absent the misrepresentation." Daniel, 329 F.3d at 487 (quoting United States v. DeSantis, 134 F.3d 760, 764 (6th Cir. 1998)). Direct evidence of an intent to commit fraud is unnecessary; fraudulent intent can be "inferred from efforts to conceal the unlawful activity, from misrepresentations, from proof of knowledge, and from profits." United States v. Davis, 490 F.3d 541, 549 (6th Cir. 2007) (citations omitted).
The jury was presented with sufficient evidence to demonstrate Sisco's willful intent. First, consider his knowledge. There is no dispute that Sisco knew that he could not charge Medicaid-eligible patients for Medicaid-covered services. Indeed, state officials told him as much. Yet Sisco persisted in doing so, supporting an inference of willfulness. See United States v. Skouteris, 51 F.4th 658, 669 (6th Cir. 2022) (); United States v. Ellefsen, 655 F.3d 769, 782 (8th Cir. 2011) (). Next, consider Sisco's conduct. He gave his employees conflicting stories as to why he was charging patients, and then falsely told the employees that the government had blessed his decision. Those repeated misrepresentations further buttress the jury's conclusion. See United States v. McLean, 715 F.3d 129, 139 (4th Cir. 2013) (); United States v. Strickland, 509 F.2d 273, 276 (5th Cir. 1974) (). And then there is the money. Sisco accumulated millions of dollars over the years through this scheme, facts that likewise support an inference as to his intent. See United States v. Bryant, 849 Fed.Appx. 565, 570 (6th Cir. 2021) ().
Any doubt as to Sisco's intent is put to rest by his use of Renew Behavioral Health. Recall that Renew was functionally a shell...
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