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United States v. Imo

United States Court of Appeals, Fifth Circuit

January 7, 2014

UNITED STATES of America, Plaintiff-Appellee,
UMAWA OKE IMO; Christina Joy Clardy; Kenneth Ibezim Anokam, Defendants-Appellants.

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Eileen K. Wilson, Assistant U.S. Attorney, Renata Ann Gowie, Assistant U.S. Attorney, U.S. Attorney's Office, Houston, TX, for Plaintiff-Appellee.

Russell Matthew Soloway, Blue Bell, PA, George McCall Secrest, Jr., Bennett & Secrest, P.L.L.C., Houston, TX, David Adler Bellaire, TX, for Defendant-Appellant.

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Appeals from the United States District Court for the Southern District of Texas.

Before STEWART, Chief Judge, and DeMOSS and CLEMENT, Circuit Judges.

CARL E. STEWART, Chief Judge:

This appeal arises from the conviction of Defendants-Appellants Umawa Oke Imo, Christina Joy Clardy, and Kenneth Ibezim Anokam for their involvement in a health care fraud scheme. Defendants-Appellants challenge the district court's refusal to give a requested limiting instruction during trial and the final jury charge. Clardy contends that there is insufficient evidence to support her conviction for health care fraud, conspiracy to commit health care fraud, and mail fraud. Clardy also raises three evidentiary challenges. In addition, Clardy and Anokam challenge the district court's application of a sentencing enhancement based on their intended loss, and Anokam argues that the district court erroneously imposed a sentencing enhancement for mass marketing. [1] We AFFIRM Defendants-Appellants' convictions and sentences.


A. Factual Background

1. City Nursing Services of Texas ("CNS")

Imo owned CNS, an alleged physical therapy clinic in Houston, Texas. In May 2006, he submitted an application to Medicare on behalf of CNS; both Imo and Clardy signed the certification statement on the application as the administrator and medical director, respectively. Additionally, they signed the Medicare participating physician or supplier agreement, which ensured that payments for any filed claims would go to CNS rather than the patient.

Subsequently, Medicare approved CNS's application and provided it with a billing number. Medicare also sent CNS a confirmation letter, indicating that Clardy was approved and providing an individual number for billing. Claims could therefore be billed under Clardy's number beginning on July 19, 2006. In addition, Imo submitted an application to Medicaid for CNS, identifying Imo as the owner and Clardy as the doctor. CNS was approved and given the information needed to begin filing claims with Medicaid. From approximately March 2, 2006 to June 26, 2009, CNS billed Medicare and Medicaid for approximately $30 million. However, CNS was never registered to provide physical therapy services and did not have any licensed physical therapists.

Clardy, an anesthesiologist, worked at CNS along with her twin sister, Dr. Catherina Clardy ("Dr. Catherina" ). Clardy contracted with CNS to work fifteen hours a week in return for a monthly salary of $5,000; [3] this contract was also submitted

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in CNS's application to Medicare. According to her contract with CNS, Clardy's duties included supervising the physical therapy services provided and maintaining the medical records associated with those. In fact, Clardy sent CNS a letter stating that physical therapy and occupational therapy services could only be billed to Medicare when she directly supervised the therapy and the services were pursuant to a treatment plan she established. Clardy, however, was not licensed to provide physical therapy services. A report by Health Integrity, a government contractor responsible for investigating, inter alia, fraud for Medicare and Medicaid, demonstrated that claims submitted under Clardy's billing number were primarily for physical therapy services. Indeed, based on the submitted bills, Clardy supposedly supervised more than 380 patients during the course of a single day; each patient purportedly received three hours of physical therapy.

2. Overview of the Scheme

Beginning in November 2006, Imo brought patients to CNS to be treated by Latricia Smith, a physical therapy aide. CNS only accepted patients with Medicare or Medicaid. Once CNS began to expand, additional employees were hired to recruit patients to CNS. CNS paid these employees for each patient they brought to the clinic. CNS also paid patients whenever they visited the clinic for an initial assessment and any subsequent reassessment. Initially, Imo was responsible for paying the patients who came to CNS as well as the people who referred them. When he was unable to make the payments, he would assign the duties to another employee.

During a patient's first visit to CNS, an employee would collect basic medical information from the patient. Before patients received treatment, CNS had them sign treatment forms, although the forms were intended to serve as a record of the treatment each patient received during his or her visit to CNS. Indeed, CNS often had patients sign multiple blank treatment forms when they visited the clinic. CNS employees, including Imo, would then fill in these blank treatment forms as if the patient received certain services, regardless of whether the patient actually received any treatment. As more patients began to come to CNS, patients would either not undergo any physical therapy or receive treatment from employees not licensed to provide such services.

Initially, Imo handled the billing for CNS; however, as time progressed, Pam Ise and other employees became responsible for billing. Ise instructed employees to bill for certain services regardless of what therapy the patient actually received. In fact, CNS billed Medicare and Medicaid for deceased patients. At one point, CNS billed Medicare for 382 patients in one day. Some patients began to complain to CNS concerning their bills.

Beginning in 2008, Anokam began working at CNS. Witnesses testified that Anokam was in charge of the clinic when Imo was not present, assisted in falsifying data on the forms submitted to Medicare and Medicaid, handled problems that arose, and paid people who came to the clinic complaining that CNS had overcharged them.

In August 2008, Clardy notified Medicare that she wished to terminate the reassignment of her benefits to CNS. Because of a mistake in her termination application, however, the reassignment was not immediately terminated. Clardy waited almost two months before rectifying the problem; once Medicare received a correct termination application, CNS could no longer bill under Clardy's number. In the notification, Clardy expressed concern about potential

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legal liability. When Clardy and Dr. Catherina left CNS, they were replaced by two other doctors— Dr. Theresa Rice and Dr. Thaddeus Hume. In March 2009, CNS and the doctors associated with the clinic were placed on prepay review— that is, all claims submitted had to have corroborating documentation before the claims would be paid. Notably, none of CNS's claims were paid once the clinic was placed on prepay review.

B. Procedural History

Defendants-Appellants were indicted for conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349 (count one), health care fraud in violation of 18 U.S.C. §§ 1347 and 2 (counts two through forty),[4] and mail fraud in violation of 18 U.S.C. § 1341 (counts forty-one through forty-three). Imo was indicted for money laundering in violation of 18 U.S.C. § 1957 (counts forty-four through forty-eight), and Anokam was indicted for structuring to avoid reporting in violation of 31 U.S.C. § 5324(a)(3). [5] A jury found Imo, Clardy, and Anokam guilty on multiple counts of health care fraud, conspiracy to commit health care fraud, mail fraud, money laundering, and structuring to avoid reporting requirements. Subsequently, Imo was sentenced to 327 months' imprisonment and ordered to pay $30,216,592.15 in restitution as well as a $4,800 special assessment. Imo objected to the loss calculation and the mass marketing enhancement applied by the district court, but the court overruled the objections. The court also approved a two-level enhancement for willful obstruction or the attempt to obstruct justice.

The court sentenced Clardy to a total of 135 months' imprisonment with three years of supervised release. In addition, Clardy was ordered to pay $15,626,084.01 in restitution and a $1,800 special assessment. Clardy raised a number of objections, including that she was not the medical director for CNS, the 22-level enhancement for intended loss was improper, and the two-level enhancement for mass marketing was not applicable. The district court overruled each of her objections. Clardy also moved for an acquittal or a new trial, which the court denied.

Anokam was sentenced to a total of 151 months' imprisonment. He challenged the amount of loss he was held accountable for, the two-level enhancement for his managerial role in the health care fraud scheme, and the enhancement for mass marketing. He was ordered to pay $19,047,546.88 for restitution and a $2,900 special assessment. Defendants-Appellants timely appealed.


A. Limiting Instruction

For the most part, Defendants-Appellants raise similar, if not identical, arguments on this issue. They contend that, because there was no limiting instruction, there was a risk the jury improperly found violations of Medicare and Medicaid regulations as sufficient proof of their criminal guilt. Moreover, they argue that the court failed to provide the jury with instructions limiting the evidence of Medicare and Medicaid violations to intent, knowledge, and ...

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