USA. v. Hoogenboom, s. 98-3961

• Decision Date: 04 April 2000
• Docket Number: Nos. 98-3961,s. 98-3961
• Citation: 209 F.3d 665
• Parties: (7th Cir. 2000) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. Carol HOOGENBOOM, Defendant-Appellant. & 98-4139
• Court: U.S. Court of Appeals — Seventh Circuit

Page 665

209 F.3d 665 (7th Cir. 2000)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. Carol HOOGENBOOM, Defendant-Appellant.

Nos. 98-3961 & 98-4139

In the United States Court of Appeals For the Seventh Circuit

Argued February 24, 2000

Decided April 4, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 CR 123--Milton I. Shadur, Judge.

Before POSNER, Chief Judge, and CUDAHY and EVANS, Circuit Judges.

EVANS, Circuit Judge.

Dr. Carol Hoogenboom's scheme to swindle Medicare by filing bills for services she did not provide to elderly mental patients hinged on her assumption that "no one will believe a crazy lady." But the FBI did. More importantly, so did a federal judge who found Hoogenboom guilty on a bevy of charges after a week-long bench trial. In all, Hoogenboom's shenanigans led to convictions on 15 counts: 5 for mail fraud, 3 for filing false claims with Medicare, 6 for money laundering, and 1 for obstruction of justice. These earned her concurrent sentences, the top being for 70 months.

Hoogenboom isn't your typical chiseler. After earning undergraduate and master's degrees in psychology from Western Michigan University, she completed a PhD at the Forrest Institute of Professional Psychology. She then spent 2 years interning, passed the Illinois state licensing exam, and received her state psychologist's license. With that, after nearly 15 years of hard work, Hoogenboom founded her own practice.

When she set up shop, Hoogenboom contracted with Medicare to become a part B provider. This meant she could submit reimbursement claims to Medicare for any medically necessary services she provided to Medicare beneficiaries. As it turned out, she preferred submitting claims to providing services.

Beginning in June 1995 Hoogenboom filed claims stating that she frequently visited her "patients"--a group of elderly, mentally ill Medicare beneficiaries living in three Chicago retirement homes--to conduct 45- to 50-minute individual therapy sessions. To receive payment for the purported sessions Hoogenboom would fax "activity sheets" to her sister, Carrie Weldy, containing the patients' names, medicare numbers, the alleged dates of service, and the type of services allegedly provided. Weldy, who served as a salaried bookkeeper, would then phone in the claims to Medicare for reimbursement. Unbeknownst to Weldy, the services she billed for were either not performed, or not performed as billed.

In January 1996 Hoogenboom hired Hanan Shaktah to help expand her operation. Hanan¹ had an undergraduate degree in psychology which she hoped she might put to use in her new job. Instead, Hoogenboom gave her a list of about 70 patients and told her to visit them once or twice a week to make sure they were still "alive and breathing." When Hanan mastered the routine, Hoogenboom added another 53 patients to her rounds. The visits lasted only a minute or two, but on Hoogenboom's orders Hanan submitted activity sheets stating that she provided 45- to 50-minute counseling sessions to each of her patients at least three times a week. In exchange for her efforts, Hoogenboom gave Hanan a taste of the Medicare reimbursement money.

Hoogenboom was so impressed with Hanan's work that by June she decided to bring Hanan's brother Thaer onto the workforce. Thaer did not have a degree in psychology, but he had been arrested for assault and battery on numerous occasions. So Hoogenboom thought he'd make a fine "therapist," and soon enough he, too, was submitting activity sheets recapping lengthy counseling sessions. In reality, Thaer performed the same job as his sister--moving door-to-door within the retirement homes making sure that the Medicare recipients were still alive.

With the Shaktahs taking care of her clients, Hoogenboom stopped visiting the facilities. And once Thaer came on board, Hanan also ceased her visits. Nevertheless, the billing continued on pace. In all, from June 1995 until October 1996 Hoogenboom submitted approximately 11,000 claims to Medicare for reimbursement. Based on these claims, she received $480,617.54, which she deposited into two accounts at First National Bank in Chicago.

Despite the fact that she was bilking the federal government out of nearly $50,000 a month, and frequently billed for more than 24 hours in a day, Hoogenboom confidently predicted that she would never get caught. She told Hanan that when it came to filing false Medicare claims "the sky's the limit." She further explained to Thaer that even if some of the patients became aware of the scam it would never put her in jeopardy, since no one would take the word of a "crazy lady" over that of her psychologist.

Unfortunately for Hoogenboom, the FBI did not operate on the same assumption. Thus, when a few of Hoogenboom's more nimble-witted patients reported to Medicare that they were receiving statements detailing counseling services that had not been performed, the FBI launched an investigation and quickly began to uncover evidence of Hoogenboom's scheme.

Bureau agents confronted Hoogenboom about her billing discrepancies on October 2. She told them that she and her assistants had in fact performed the services claimed, that they had provided mostly psych testing services and very little therapy, that she was always present when her assistants conducted the testing, that she visited all the facilities three to four times per week, and that her assistants both had undergraduate degrees in psychology.

When the interview ended, the cover-up began. Hoogenboom immediately met with Hanan and instructed her not to speak to the FBI. She then called Weldy and told her to tell the FBI that the two didn't know each other. The next day, Hoogenboom withdrew $101,000 from First National, explaining to Thaer that she feared the Bureau would "freeze her accounts."

By October 21 Hoogenboom had become desperate. She sent the following fax to Weldy, written in print so small Weldy had to blow it up on her copier to read it:

Ner,² immediately burn all logs, time sheets of everyone. Make sure only ashes are left. Burn this page, too. I will explain later. Tell Mommo and Conco³ to talk to no one about me. If the FBI visits them they are to say nothing. Even that they don't know me.⁴ Tell them the same thing. . . . You guys are to talk to no family or relatives about me, no neighbors, and no new friends.

Weldy, the hero of our story, not only refused to comply, but immediately gave the FBI the fax and all the materials she was supposed to burn.

The Shaktahs, who flipped following their arrest (they pled guilty to charges and received probation), also reported that Hoogenboom attempted to thwart the FBI. At trial they testified that during the investigation Hoogenboom tried to persuade Hanan not to cooperate, instructed Hanan to prepare fake progress notes for the services covered in the indictment, attempted to convince a real psychologist to falsely testify that she treated the patients, and threatened Thaer that if he ever testified against her she would press charges against him for forging her checks.

Hoogenboom told a markedly different story. She testified that she performed all the work she billed up until she hired Hanan, but that from then on she assumed a purely supervisory role. She said that, after initially supervising Hanan's activities quite closely, she was fooled into believing that Hanan was still treating the patients. She also said that Hanan convinced her to hire Thaer and that Hanan was responsible for supervising his work. Finally, she reported that once she became aware that the two were conning her, she immediately fired them both.

The judge was underwhelmed by this defense. He said Hoogenboom's "preposterous effort to rationalize" her conduct and "prevail on the balance of her own perjury" could hardly "avoid the crushing impact . . . [of] the overwhelming evidence that the government provided with respect to her guilt."

On appeal, Hoogenboom attacks three of her four convictions and argues that the judge erroneously applied a couple of 2-point adjustments to his calculus of her sentence under the guidelines. Interestingly, she does not contest her conviction for obstruction of justice--the crime for which she drew the longest concurrent sentence. This means that even if Hoogenboom prevails--gets her money laundering, false claims, and mail fraud convictions overturned and both 2-point adjustments set aside--she stands to gain only mild relief. But she is entitled to seek what she can, so with the limited prospects for a real major victory in mind, we turn to her contentions.

We begin with Hoogenboom's first challenge to her money laundering conviction. To violate the federal money laundering statute the government must prove, inter alia, that a defendant engaged in or attempted to engage in "a monetary transaction." 18 U.S.C. sec.1957. As defined by the statute, a monetary transaction "does not include any transaction necessary to preserve a person's right to representation as guaranteed by the Sixth Amendment to the Constitution." 18 U.S.C. sec.1957(f)(1).⁵ Hoogenboom argues that since she testified that she eventually used the money she removed from her bank accounts to pay her attorneys, the withdrawals were not "monetary transactions."

To the extent Hoogenboom challenges the sufficiency of the evidence supporting her conviction, we review to determine whether the fact finder's take on the evidence was wholly irrational when viewed in the light most favorable to the government. See United States v. Thornton, 197 F.3d 241, 253-254 (7th Cir. 1999), cert. denied sub nom. Reynolds v. United States, 120 S. Ct. 1282, 2000 WL 190036 (Mar. 6, 2000). To the extent that she asks us to interpret the federal money laundering statute, we review the district court's determinations de novo. See United States v. Shriver, ...