Opinion
Case No. 8:09-cr-352-T-33MAP.
March 16, 2010
ORDER
This matter is before the Court pursuant to Defendant Tracey Bane's Motion to Dismiss (Doc. # 49), filed on December 14, 2009, Defendant Ben Bane's Motion to Dismiss Count One of the Indictment for Duplicity (Doc. # 54) (collectively, the "Motions to Dismiss"), and the Government's Response in Opposition to the Motions to Dismiss (Doc. # 60), filed on December 31, 2009. For the reasons that follow, the Court denies the Motions to Dismiss.
I. Background
On July 29, 2009, the Government charged Defendants in a sixteen-page indictment with conspiracy pursuant to 18 U.S.C. § 371 (count one), health care fraud pursuant to 18 U.S.C. § 1347 (counts two through six), and false claims pursuant to 18 U.S.C. § 287 (counts seven through ten). (Doc. # 1).
The indictment contains a detailed background section that explains the manner in which the Centers for Medicare and Medicaid Services ("CMS") administer the Medicare health care benefit program in Florida through Palmetto Government Benefits Administrators ("Palmetto GBA"). Palmetto GBA serves as a fiscal intermediary, and it receives and processes individual Medicare claims in the state of Florida. Palmetto GBA determines the appropriate level of claim reimbursement. (Doc. # 1 at ¶ 1).
Medicare reimburses for certain oxygen related services but requires that the beneficiary first undergo pulse oximetry testing to determine whether the services are medically necessary. In order to avoid fraud and conflicts of interest, Medicare prohibits the company which supplies the oxygen related services from also conducting the pulse oximetry testing. Instead, the pulse oximetry testing must be conducted by a physician or an Independent Diagnostic Testing Facility. (Doc. # 1 at ¶ 2).
Medicare requires a Certificate of Medical Necessity ("CMN"), executed by a physician or physician's employee, in order to reimburse for oxygen related services. (Doc. # 1 at 3).
Defendant Ben Bane owned and operated Bane Medical Services, Inc. ("BMS") and Oxygen and Respiratory Therapy, Inc. ("ORT"). (Doc. # 1 at ¶ 5). Defendants Gregory Bane and Tracey Bane were employed by Ben Bane as Vice President of Operations of BMS and ORT and billing supervisor for BMS, respectively. (Doc. # 1 at ¶¶ 6-7).
The "manner and means" section of the indictment charges, among other things, that Defendants: (1) instructed BMS and ORT employees to conduct pulse oximetry testing on Medicare beneficiaries to whom they planned to supply oxygen related services; (2) falsified and fabricated pulse oximetry test results; (3) placed false and fraudulent data and "forged physician signatures" on CMNs and sent the CMNs to CMS for reimbursement through Palmetto GBA; (4) sent claims to CMS when BMS and ORT did the pulse oximetry testing, rather than Independent Diagnostic Testing Facilities; (5) sent claims to CMS for oxygen related services when such services were not medically necessary; and (6) conducted their activities in a manner calculated to conceal their fraudulent scheme. (Doc. # 1 at ¶¶ 1-19).
The "overt acts" section of the indictment charges, among other things, that: (1) in the Fall of 2002, "Ben Bane instructed BMS drivers to write the word `lab' in the `delivered by' column of the BMS log even though the testing devices were actually delivered to the beneficiaries by the BMS drivers;" (2) in November 2003, "Gregory Bane taught Theresa Veach how to change names on computerized tests in order to `qualify' medicare beneficiaries for oxygen related services wherein fact, such services were not medically necessary;" (3) on May 18, 2004, a conspirator altered the results of the pulse oximetry test of Medicare beneficiary Marilyn Dickson by changing the name on the document to Medicare beneficiary Jerry Martin; (4) on July 14, 2004, "Tracey Bane forged a physician's signature to a CMN related to Medicare beneficiary Ruth Beckett;" (5) in December 2005, "Gregory Bane fabricated `at rest' pulse oximetry test results;" and (6) in December 2004, "Gregory Bane erased copies of pulse oximetry tests from computers." (Doc. # 1 at ¶ 20).
As noted, the indictment also alleges that Defendants committed health care fraud in counts two through six. (Doc. # 1 at p. 10). The indictment names five individual patients and contends that, as to each patient, Defendants submitted "Medicare claims for reimbursement to be submitted to Palmetto GBA knowing each claim was not eligible for Medicare reimbursement." (Doc. # 1 at 10).
Finally, in counts seven through ten, the Government lists four individual patients and contends that Defendants submitted "Medicare claims for reimbursement, knowing each individual claim to be materially false, fictitious, and fraudulent in that each claim sought reimbursement for oxygen related services whereas, the defendants well knew and believed said claims were not eligible for Medicare reimbursement." (Doc. # 1 at 11).
Defendant Ben Bane seeks dismissal of count one of the indictment, arguing: "count one must be dismissed because it is duplicitous — it charges two separate criminal offenses in the same count." (Doc. # 54 at 2). Defendant Tracey Bane seeks dismissal of each of the ten indictment counts. She contends that the indictment counts are "so vague, ambiguous and indefinite as to deprive this defendant of the rights guaranteed her by the Fifth and Sixth Amendments to the Constitution of the United States." (Doc. # 49 at 2).
In addition to her vagueness contentions, Tracey Bane argues that count one charges her with an impermissible "wheel conspiracy" in violation of the Court's holding in Kotteakos v. United States, 328 U.S. 750 (1946). (Doc. # 49 at 2). Tracey Bane also mirrors Ben Bane's duplicitous conspiracy count arguments. The Court will address each argument presented.
II. Analysis
A. Count One: Conspiracy
Defendants seeks dismissal of count one of the indictment arguing that it is (1) duplicitous; (2) a rimless wheel conspiracy; and (3) unconstitutionally vague.
1. Duplicity
Defendants are charged with conspiracy in count one pursuant to 18 U.S.C. § 371, which reads in pertinent part:
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years or both.18 U.S.C. § 371.
Both Tracey and Ben Bane challenge the indictment as duplicitous because it charges Defendants with conspiring to defraud the United States and conspiring to commit offenses against the United States. The Court has evaluated the duplicitous indictment arguments carefully and determines that they are unavailing. The Eleventh Circuit noted in United States v. Ramos, 666 F.2d 469, 473 (11th Cir. 1982) that "the error of duplicity is present where more than a single crime is charged in one count of an indictment." The defendants in Ramos were indicted (and later convicted by a jury) on drug-related conspiracy charges. On appeal, the defendants argued that count one of the indictment was duplicitous because it "charges them with conspiring to possess and to distribute" narcotics. Id. The Eleventh Circuit affirmed the convictions, ruling:
The allegation in a single count of a conspiracy to commit several crimes is not duplicitous, for the conspiracy is the crime, and that is one, however diverse its objects. The single agreement is the prohibited conspiracy, and however diverse its objects it violates but a single statute . . . For such a violation, only the single penalty prescribed by the statute can be imposed.Ramos, 666 F.2d at 473 (citing Braverman v. United States, 317 U.S. 49, 54 (1942) (internal citation omitted)).
Additionally, in States v. Harmas, 974 F.2d 1262, 1266 (11th Cir. 1992), the court held that Section 371 "should be interpreted as establishing two alternative means of committing a violation" rather than setting forth two separate crimes. Therefore, a single count charging violations of both prongs of the statute is not duplicitous.
The case law Defendants cite (United States v. Schlei, 122 F.3d 944 (11th Cir. 1997) and United States v. Burton, 871 F.2d 1566 (11th Cir. 1989)) does not lead the Court to a finding that count one of the indictment in this case is duplicitous. Schlei concerned multiple securities fraud violations wrongfully alleged in a single indictment count, and its holding is inapplicable to this Section 371 conspiracy case. 122 F.3d at 979. Burton, on the other hand, involved Section 371 charges as well as Section 641 charges, and its duplicity analysis, which follows, is relevant here:
18 U.S.C. § 641 states in pertinent part: "whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof . . .; or whoever receives, conceals, or retains the same with intent to convert it . . . shall be fined under this title or imprisoned . . ."
A duplicitous indictment charges two or more separate and distinct crimes in a single count. Where a penal statute . . . prescribes several alternative ways in which the statute may be violated and each is subject to the same punishment, however, the indictment may charge any or all of the acts conjunctively, in a single count, as constituting the same offense, and the government may satisfy its burden by proving the defendant, by committing any one of the acts alleged, violated the statute. The conjunctive allegations do not render the indictment duplicitous.Burton, 871 F.2d at 1573 (internal citations omitted). Thus, theBurton case actually supports the Government's position on duplicity. Upon due consideration, the Court determines that count one is not subject to dismissal on grounds of impermissible duplicity.
2. Rimless Wheel Conspiracy
The Court has also considered the argument that count one is subject to dismissal because it "is nothing more than an allegation charging a classical `wheel' conspiracy" in violation of the Kotteakos case." (Doc. # 49 at 2) (citing Kotteakos, 328 U.S. 750). In Kotteakos, and more recently in United States v. Chandler, 388 F.3d 796, 807 (11th Cir. 2004), conspiracy convictions were reversed because there was a material variance between the indictment and the government's proof at trial.
Kotteakos involved a complex criminal enterprise centered on a common individual defendant. Despite the common individual, the government could not show that the other charged defendants were engaged in a single criminal enterprise. The Supreme Court agreed with the government that the evidence showed "separate spokes meeting in a common center" but noted that the theory was "without the rim of the wheel to enclose the spokes." Kotteakos, 328 U.S. at 755. Tracey Bane contends that the indictment "charges a `wheel' conspiracy, where the only common denominator is one Ben Bane, who is at the hub of this wheel where the spokes of the wheel are not even aware of one another . . . [U]nless there is some interaction between the alleged conspirators who formed the spokes of the wheel, the wheel is incomplete and thus there are multiple conspiracies rather than one." (Doc. # 49 at 4). The Court determines that these allegations are not fully developed at this point and should be addressed during the trial.
The Court is not certain that Defendant Tracey Bane is now arguing that such a variance of proof exists in this case. The Court determines that Tracey Bane's contentions are premature at this stage of the litigation. The Court agrees with the Government's argument that "a motion to dismiss is not the vehicle through which a `wheel' allegation should be litigated." (Doc. # 60 at 6). It is not possible to determine at this point whether there is any merit to Tracey Bane's rimless "wheel" contentions. Thus, at trial, should the evidence impermissibly vary from the conspiracy presented in the indictment, or should the Government fail to appropriately link the "spoke" conspirators to the "hub" of the "wheel," the defense may seek to make the appropriate motions at that time.
3. Insufficiency and Vagueness
In addition to her vagueness contentions focused on the holding in the Kotteakos case, Tracey Bane also argues that the indictment's conspiracy count should be dismissed as insufficient because it is vaguely drawn. She argues, "as this indictment is presently drawn this defendant will . . . be hampered in preparing a defense since it is not clear what she is accused of exactly." (Doc. # 49 at 4). Tracey Bane also appears to contend that the indictment does not allege her knowledge of the conspiracy with sufficient specificity.
In United States v. Bobo, 344 F.3d 1076 (11th Cir. 2003), the court held, "for an indictment to be valid it must contain the elements of the offense intended to be charged, and sufficiently apprise the defendant of what he must be prepared to meet. . . . [I]f the indictment tracks the language of the statute, it must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offense, coming under the general description, with which he is charged." Id. at 1083 (internal citation omitted).
Here, the indictment tracks the statute in question, 18 U.S.C. § 371, and contains a detailed analysis of the facts and circumstances of the alleged conspiracy. As to Tracey Bane's alleged knowledge, the Court determines that the Government need not prove that she had "knowledge of all of the details of the conspiracy or be aware of all of the participants, or participate in every stage" of the conspiracy. United States v. Reed, 980 F.2d 1568, 1582 (11th Cir. 1993). Rather, to establish a violation of Section 371, the Government must establish that two or more individuals agreed to pursue an unlawful objective, that the defendant voluntarily agreed to join, and that one or more of the conspirators knowingly committed an overt act in furtherance of the objective of the conspiracy. United States v. Cross, 928 F.2d 1030, 1042 (11th Cir. 1991).
The Court finds that the indictment is sufficient and not unconstitutionally vague.
In conclusion, the Court denies the Motions to Dismiss as to count one of the indictment and will now begin its analysis of the remaining indictment counts. B. Counts Two through Ten: Health Care Fraud and False Claims
Tracey Bane also seeks dismissal of counts two through ten on the basis of vagueness. Similar to her attack on count one, she seeks dismissal of the remaining indictment counts "because these counts fail to allege how Tracey Bane knew the claims were false or how Tracey Bane contributed to or made claims which were false." (Doc. # 49 at 5).
The indictment's allegations concerning the alleged fraudulent scheme are very detailed. In the "manner and means" section of the indictment, the Government explained how Defendants, including Tracey Bane, "did falsify and fabricate and cause to be falsified and fabricated, pulse oximetry test results in order to create the illusion that certain Medicare beneficiaries were in need of and qualified for Medicare reimbursement for oxygen therapy and oxygen related services." (Doc. # 1 at ¶ 14).
In addition, the manner and means section alleged that Defendants forged physicians' signatures and included fraudulent data on Medicare claims that were submitted to CMS through Palmetto GBA. (Doc. # 1 at ¶ 15). These specific allegations are incorporated by reference into counts two through ten of the indictment. (Doc. # 1 at 9-10). The Court agrees with the Government and finds that "the indictment sufficiently pleads [Tracey Bane's] knowledge through the manner and means section" of the indictment.
In conclusion, and after due consideration, the Court determines that the indictment is not subject to dismissal on any of the grounds asserted by Defendants, including insufficiency or vagueness. The Court therefore denies the Motions to Dismiss.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
DENIED. DENIED.
(1) Defendant Tracey Bane's Motion to Dismiss (Doc. # 49) is (2) Defendant Ben Bane's Motion to Dismiss Count One of the Indictment for Duplicity (Doc. # 54) is DONE and ORDERED in Chambers, in Tampa, Florida.