US v. Bolden, 040203 FED4, 994814

Docket Nº:994814
Party Name:US v. Bolden
Case Date:April 02, 2003
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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US v. Bolden

994814

FED4

4/2/2003

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

üU NITED STATES OF AMERICA,

Plaintiff-Appellee,

v. No. 99-4814

GLENNIS L. BOLDEN,

Defendant-Appellant.

&Thorn;

üU NITED STATES OF AMERICA,

Plaintiff-Appellee,

v. No. 99-4873

CLIFFORD E. BOLDEN,

Defendant-Appellant.

&Thorn;

Appeals from the United States District Court for the Western District of North Carolina, at Asheville. Lacy H. Thornburg, District Judge.

(CR-97-329)

Argued: October 31, 2002

Decided: April 3, 2003

Before TRAXLER, KING, and GREGORY, Circuit Judges.

Affirmed in part, reversed in part, vacated in part, and remanded by published opinion. Judge King wrote the opinion, in which Judge Traxler and Judge Gregory joined.

2 UNITED STATES v. BOLDEN

COUNSEL

ARGUED: Jefferson McClure Gray, ARENT, FOX, KINTNER, PLOTKIN & KAHN, P.L.L.C., Washington, D.C., for Appellants. David Alan Brown, OFFICE OF THE UNITED STATES ATTOR- NEY, Charlotte, North Carolina, for Appellee.

ON BRIEF: A. James Siemens, SIEMENS LAW OFFICE, P.A., Asheville, North Carolina, for Appellant Clifford Bolden. Robert J. Conrad, Jr., United States Attorney, Brian Lee Whisler, Assistant United States Attorney, Karen Elise Eady, Assistant United States Attorney, Charlotte, North Caro- lina, for Appellee.

OPINION

KING, Circuit Judge:

Glennis and Clifford Bolden appeal their multiple convictions and separate sentences in the Western District of North Carolina, resulting from charges arising out of a complex Medicaid fraud scheme. In their appeals, the Boldens challenge their 1998 convictions for money laundering and a related money laundering conspiracy, and Ms. Bol- den challenges several of her convictions for the submission of false claims to the Government. They also challenge their sentences in sev- eral respects. As explained below, we affirm their convictions, but we reverse in part and vacate and remand their sentences in part.

I.

A.

The Boldens were indicted in December of 1997 by a grand jury in Asheville, North Carolina, and a superseding indictment was returned in October of 1998.1 The indictment alleged that, from 1989 until 1995, the Boldens planned and perpetrated an elaborate fraud scheme, improperly obtaining tens of thousands of dollars from North

1In referring to the "indictment," we mean the 43-count superseding indictment, on which the Boldens were tried, convicted, and sentenced.

UNITED STATES v. BOLDEN

3

Carolina’s Medicaid program ("Medicaid"). This fraud scheme was carried out through their operation of Emerald Health Care- Taylorsville ("Emerald Health"), a nursing facility owned by Henry Lane, Ms. Bolden’s father.2 The fraud scheme had numerous compo- nents, but the object of each was the same: the illegal extraction of monies from Medicaid for the benefit of one or both of the Boldens.

In November of 1998, after a nine-day jury trial in Asheville, the Boldens were convicted of multiple offenses. In particular, each was convicted of conspiracy to commit mail and wire fraud (in contraven- tion of 18 U.S.C. § 371); two counts of submitting false claims to the Government (in violation of 18 U.S.C. § 287); six counts of filing false income tax returns (in violation of 26 U.S.C. § 7206(1)); six substantive counts of money laundering (in violation of 18 U.S.C. § 1956(a)(1)); and a separate count of money laundering conspiracy (in contravention of 18 U.S.C. § 1956(h)). Ms. Bolden was also con- victed on eighteen separate false claims charges.

On August 30, 1999, a probation officer submitted pre-sentence reports (the "PSRs") to the district court on the Boldens. The parties then submitted objections to the PSRs and, on October 7, 1999, the court conducted sentencing hearings. Ms. Bolden received 140 months in prison, and Mr. Bolden was sentenced to a term of fifty- seven months. In addition, Ms. Bolden was fined $1,700, and Mr. Bolden was fined $800. The Boldens were each required to make $146,719 in restitution to the Internal Revenue Service.3

Following sentencing, the Boldens filed timely notices of appeal, and we possess jurisdiction pursuant to 28 U.S.C. § 1291.

2Mr. Lane was also charged in the indictment. He entered into a deferred prosecution agreement with the Government, however, and con- sented to pay $1,000,000 in restitution and penalties to Medicaid.

3Because Mr. Lane, as part of his deferred prosecution agreement, paid $1,000,000 in restitution and penalties to Medicaid, the Government stip- ulated, for purposes of the Boldens’ sentencing, that full restitution had been made to Medicaid.

4 UNITED STATES v. BOLDEN

B.

In their appeals, the Boldens raise multiple challenges to their con- victions and sentences. In seeking reversal of their convictions, they assert the following (the "Conviction Issues"):

(1) that the evidence was insufficient to support their con- victions on the money laundering counts;

(2) that their convictions for money laundering conspiracy are flawed because:

a. the charge of money laundering conspiracy, in Count Thirty-Seven of the indictment, was legally deficient;

b. the court committed reversible error in its instructions by constructively amending the money laundering conspiracy charge; and

c. the evidence was insufficient to support their convictions for money laundering conspiracy; and

(3) with respect to Ms. Bolden, that the evidence was insufficient to sustain her convictions on the eighteen sepa- rate false claims charges.

The Boldens also raise assertions of error with regard to their sen- tences (the "Sentencing Issues"), specifically maintaining that:

(1) the court erred in grouping their fraud and money laun- dering convictions;

(2) the court failed to make adequate factual findings on the sentencing issues in dispute; and

(3) to the extent the court’s factual findings were ade- quate, they were clearly erroneous.4

4If the sentencing court’s factual findings are adequate, the Boldens assert that the court clearly erred by (a) improperly calculating fraud

UNITED STATES v. BOLDEN

5

Before turning to their contentions, we review the factual underpin- nings for the Boldens’ convictions and sentences.5

II.

Between 1989 and 1995, Ms. Bolden served as Emerald Health’s Director of Operations and as Supervisor of its Ventilator Unit. As Director of Operations, she approved Emerald Health’s payments to vendors, authorized its capital purchases, transferred funds between its bank accounts, and directed its efforts to obtain reimbursements from Medicaid. In sum, she was responsible for most of the adminis- trative and financial decisions of Emerald Health. Beginning in 1990, and until his resignation in early 1993, Mr. Bolden worked as Emer- ald Health’s Director of Maintenance. In that capacity, he ordered supplies and supervised Emerald Health’s housekeeping and mainte- nance staff.

A.

The Boldens utilized their relationships with Emerald Health to manipulate North Carolina’s Medicaid reimbursement system.6 The

loss; (b) finding that Ms. Bolden occupied a position of trust; and (c) finding that Emerald Health’s residents were vulnerable victims of Ms. Bolden’s fraudulent activity.

5The Boldens challenge the sufficiency of the evidence on several of their convictions, as well as the sufficiency of the evidence underlying the court’s sentencing rulings. On the Conviction Issues, we review the facts in the light most favorable to the Government; with respect to the Sentencing Issues, we review the facts in the light most favorable to the district court’s determinations. United States v. Wilkinson, 137 F.3d 214, 217-18 (4th Cir. 1998) ("Because the Defendants challenge the suffi- ciency of the evidence . . . we present the facts in the light most favorable to the government."); United States v. Brown, 314 F.3d 1216, 1221 (10th Cir. 2003) ("Evidence underlying a district court’s sentence is reviewed by viewing the evidence, and inferences drawn therefrom, in the light most favorable to the district court’s determination.").

6Approximately 80% of Emerald Health’s residents were covered by Medicaid.

6 UNITED STATES v. BOLDEN

North Carolina Division of Medical Assistance (the "DMA")7 admin- isters Medicaid, a healthcare program for low-income individuals par- tially funded by the federal government. Pursuant to its mandate, Medicaid reimburses nursing facilities, such as Emerald Health, for their treatment and care of Medicaid patients.

In making such reimbursements, Medicaid initially disburses "pro- spective payments" to nursing facilities that treat and care for Medic- aid patients. N.C. Admin. Code tit. 10, r. 26H.0101. The "prospective payment rate" on which such payments are based is an estimate of the costs a nursing facility likely incurred in treating a Medicaid patient for one day. Medicaid has established three separate prospective pay- ment rates, corresponding to the three levels of care provided by nurs- ing facilities — intermediate nursing care, skilled nursing care, and ventilator care.8Id. r. 26H.0102. Each prospective payment rate con- sists of two components, called "direct" and "indirect" components. The direct component consists of those nursing facility costs attribut- able specifically to patient care, such as nursing, food service, house- keeping, and laundry. Id. The indirect component consists of nursing facility costs related to property ownership, administration, and main- tenance. Id. In order to receive its prospective payments, a nursing facility periodically submits bills to Medicaid (the "Medicaid Bills"). The Medicaid Bills specify the number of days each Medicaid patient resided in the nursing facility and the level of care each received. After receiving and approving a nursing facility’s Medicaid Bills, Medicaid makes the prospective payments.9

At the end of each fiscal year, in order to ensure that the prospec- tive payments were proper, Medicaid requires each nursing facility to file an annual cost...

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