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U.S. v. LOUTHIAN, NO. 13-4231

Decided: June 23, 2014

The Fourth Circuit affirmed the Western District of Virginia Court’s decision convicting Appellant of multiple offenses related to a healthcare fraud scheme.

Appellant was the former President and Business Manager of the Saltsville Rescue Squad, Inc., (the “Squad), which provided ambulance transport for medical emergencies, as well as non-emergency transportation for dialysis patients.  The Medicare Fraud Control Unit of the Virginia Attorney General’s began investigating the Squad in 2008, and discovered that it provided transportation to three dialysis patients on a weekly basis who could have been transported by less extraordinary means.  The Squad double billed Medicare and a private insurer approximately $1200 to $1500 per trip.  Testimony at trial revealed that Appellant encouraged staff to falsify patients’ physical conditions to ensure that Medicare paid for the Squad’s transport.  A jury convicted Appellant of health care fraud and perjury.  The district court also awarded the Government a money judgment of forfeiture against Plaintiff for $907,521.77.  Plaintiff then filed a timely appeal.

The Fourth Circuit rejected Appellant’s assertion that the prosecution presented insufficient evidence to support his conviction on the health care fraud because it failed to prove the transport of the patients to dialysis was not “medically necessary.”  The Court stated that the prosecution’s evidence at trial sufficiently displayed that the Squad’s transport patients could stand, walk, and perform manual labor, yet Appellant submitted information describing the patients as bedridden.  Further, Appellant was personally aware of the patients’ conditions since he participated in some of the transports, and even altered the Squad’s reporting practices to cover up the fraud.  The Fourth Circuit also found sufficient evidence to support Appellant’s perjury conviction.  A perjury charge requires that the prosecution prove that Appellant knowingly made a “false material declaration” while he was under oath.  At trial, the prosecution compared Appellant’s testimony that one of the clients was transported on a stretcher by the Squad for a couple of years against a video of Appellant watching that same client walk from the ambulance to her home a few months before trial.  The Fourth Circuit also rejected Appellant’s “baseless” argument that it was inconsistent for a jury to convict Appellant of the health care fraud when it acquitted the Squad.  The U.S. Supreme Court established that a defendant cannot challenge a conviction simply because the conviction is inconsistent with a jury’s acquittal on another count. The Fourth Circuit also found no abuse of discretion in Appellant’s forty-eight month sentence because he failed to show that the sentence was unreasonable or tainted by procedural flaws.  Finally, the Court found that Appellant was not prejudiced by the criminal forfeiture since 18 U.S.C. § 982(a)(7) required that the prosecution seek a court order to mandate the Appellant forfeit any property derived from the commission of his health care fraud.

Full Opinion

Alysja S. Garansi