United States v. Nora
(2021)
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Rule of Law:
To establish willfulness in health care fraud or anti-kickback offenses, the government must prove that the defendant acted with knowledge that their specific conduct was unlawful, and mere proximity to or general awareness of a fraudulent scheme without such specific knowledge is insufficient for conviction.
Facts:
- Abide Home Health Care Services, Inc. (Abide), owned by Lisa Crinel, engaged in a large home health care fraud and kickback scheme.
- Abide's fraud involved billing Medicare for medically unnecessary home health services by using 'house doctors' to approve improper plans of care and by manipulating diagnoses for higher reimbursements.
- Abide's kickback scheme involved paying doctors and other individuals, directly or indirectly, for patient referrals, often disguised as compensation for other services.
- Jonathon Nora was hired by Abide in 2009 as a data entry clerk and was promoted to office manager in 2012, earning an annual salary.
- In his role, Nora coordinated new patient intake, verified insurance, assigned nurses for evaluations, scheduled home nursing visits, helped with data entry of forms like OASIS and 485s, and tracked patient recertifications.
- Nora was involved in Abide’s practices of assigning patients to house doctors, processing referral payments (kickbacks), and implementing a 'ghosting' system where patients were discharged from Medicare records but continued to receive informal home visits to avoid suspicion.
- Verinese Sutton, owner of a group home, referred patients to Abide, sometimes contacting Nora, and Nora sometimes handed her referral payment checks.
- EvLa, a patient referred by Sutton, received home health care services from an Abide house doctor but was not actually homebound, making her ineligible for Medicare services.
Procedural Posture:
- The government indicted Jonathon Nora and several codefendants for conspiracy to commit health care fraud (18 U.S.C. § 1349), conspiracy to pay or receive illegal health care kickbacks (18 U.S.C. § 371 and 42 U.S.C. § 1320a-7b(b)(2)), and aiding and abetting health care fraud (18 U.S.C. §§ 1347 and 2) in the United States District Court for the Eastern District of Louisiana.
- Nora was tried and convicted alongside five codefendants, whose convictions were later affirmed by a separate panel of the Fifth Circuit in United States v. Barnes, 979 F.3d 283 (5th Cir. 2020).
- At the conclusion of the government’s case-in-chief, Nora moved for a judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29, which the district court denied.
- The jury returned a verdict convicting Nora on all three counts.
- Following the verdict, Nora renewed his motion for judgment of acquittal and, in the alternative, moved for a new trial, both of which the district court denied.
- The district court sentenced Nora to a concurrent sentence of 40 months’ imprisonment on each count, followed by one year of supervised release, and ordered him to pay restitution to Medicare.
- Nora filed a timely notice of appeal to the United States Court of Appeals for the Fifth Circuit.
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Issue:
Does evidence of an employee's involvement in administrative tasks related to a large-scale health care fraud and kickback scheme, without direct proof that the employee knew their actions were unlawful, sufficiently establish the 'willfulness' required for convictions under health care fraud and anti-kickback statutes?
Opinions:
Majority - Stephen A. Higginson
No, the evidence presented by the government was insufficient to prove beyond a reasonable doubt that Jonathon Nora acted 'willfully' with knowledge that his conduct was unlawful under health care fraud and anti-kickback statutes. The court explained that 'willfully' requires proof that the defendant acted with knowledge that their conduct was unlawful, or with a 'bad purpose,' and neither conspiracy nor aider and abettor liability lowers this mens rea. While Nora worked at Abide during ongoing fraudulent schemes and his role entangled him in practices such as using house doctors, processing pay-for-referral payments, and 'ghosting' patients, the government failed to prove he understood these practices to be fraudulent or unlawful. Evidence of Nora's general compliance training and attendance at staff meetings was too vague and speculative to infer knowledge of unlawfulness. Critically, neither Lisa Crinel (Abide's owner and orchestrator of the fraud) nor Gaynell Leal (a case manager), both of whom cooperated with the government, testified that Nora understood the unlawful purpose behind Abide’s practices or that he acted as a co-conspirator. The court distinguished Nora's case from United States v. Murthil, where a similarly positioned office manager's convictions were affirmed due to specific evidence of her extensive experience, understanding of regulations, knowledge that patients were not homebound, direct conversations about illegal kickbacks, and a unique trusted role in the scheme. Nora, by contrast, was young, lacked billing experience, and there was no evidence he knew patients were not homebound or had specific conversations about the illegality of the schemes. The court also rejected the government's argument that Nora's 'proximity' to the fraud was sufficient, noting that in prior cases, 'proximity' involved direct observation of overtly dishonest behavior or was coupled with other strong evidence of specific knowledge, which was absent in Nora's case. Furthermore, there was no specific evidence of Nora's involvement with patient EvLa's treatment or knowledge that she was not homebound.
Analysis:
This case significantly clarifies the mens rea requirement for 'willfulness' in health care fraud and anti-kickback prosecutions, particularly concerning lower-level employees. It reinforces that prosecutors must present specific, particularized evidence that a defendant knew their conduct was unlawful, moving beyond mere involvement in suspicious activities or general awareness of a fraudulent enterprise. The ruling creates a higher bar for convicting individuals performing administrative or logistical tasks within a fraudulent organization, protecting those who might unknowingly facilitate illegal schemes without the requisite 'bad purpose.' This decision will likely compel future government prosecutions to focus on more direct evidence of a defendant's knowledge and intent to defraud or violate anti-kickback laws, rather than relying on circumstantial evidence of proximity or general organizational culture.
