United States v. Tariq Omar
24a0178p.06 (Recommended for Publication) (2024)
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Rule of Law:
A healthcare fraud conviction can be upheld based on sufficient circumstantial evidence of knowing participation in a fraudulent scheme, including false billing, kickbacks, and falsified records. Appellate courts review claims of prosecutorial misconduct for flagrance and prejudice, evidentiary rulings for abuse of discretion, and sentencing determinations for procedural and substantive reasonableness, including loss calculation based on intended loss for pervasive fraud and application of sentencing enhancements.
Facts:
- Mashiyat Rashid headed a healthcare fraud scheme at his clinic, Tri-County, which employed Joseph Betro, Mohammed Zahoor, Tariq Omar, and Spilios Pappas.
- The doctors at Tri-County subjected Medicare recipients to medically unnecessary back injections using short needles and only Marcaine, a temporary numbing agent.
- They fraudulently billed these injections to Medicare as more expensive 'facet injections,' which require longer needles and involve steroids and anesthetic, to maximize reimbursements.
- The scheme lured patients with opioid prescriptions, and the doctors received kickbacks as a percentage of the amounts they billed.
- Despite Medicare guidelines specifying facet injections no more than 4-5 times a year, the doctors billed them monthly, and also ordered unnecessary urine tests and referred patients to ancillary services in exchange for kickbacks.
- The defendants deliberately limited their working hours to conceal the volume of their opioid prescriptions from the DEA and falsified patient charts to report an '80 percent reduction in pain' or 'instant relief' even when patients complained of pain and ineffectiveness.
- After Medicare suspended Tri-County for medically unnecessary injections, the clinic reopened as 'Tri-State' and continued the same fraudulent practices.
- The Tri-County scheme fraudulently billed over $132 million to Medicare.
Procedural Posture:
- Mashiyat Rashid, the head of the scheme, and several other co-conspirators pleaded guilty.
- Joseph Betro, Mohammed Zahoor, Tariq Omar, and Spilios Pappas went to a 15-day trial in the United States District Court for the Eastern District of Michigan at Detroit.
- The jury convicted Betro, Zahoor, Omar, and Pappas on all counts of conspiracy to commit healthcare fraud and wire fraud under 18 U.S.C. § 1349 and healthcare fraud under 18 U.S.C. § 1347.
- Zahoor, Omar, and Pappas filed motions for new trial, which Betro joined, in the district court.
- The district court denied the defendants' motions for a new trial.
- Betro, Zahoor, Omar, and Pappas (Defendants-Appellants) appealed their convictions and sentences to the United States Court of Appeals for the Sixth Circuit (Plaintiff-Appellee).
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Issue:
Did the district court err in denying motions for new trial and upholding the convictions and sentences of defendants involved in a healthcare fraud scheme, despite challenges concerning the sufficiency of evidence, prosecutorial misconduct, evidentiary rulings regarding lay vs. expert testimony, jury instructions, and sentencing calculations?
Opinions:
Majority - Nalbandian, J.
No, the district court did not err in upholding the convictions and sentences, as sufficient evidence supported the jury's findings, and the procedural and sentencing challenges lacked merit. A rational jury could find the defendants guilty beyond a reasonable doubt for conspiracy and healthcare fraud. Rashid's testimony detailed the 'predetermined protocol' involving opioid inducements, kickbacks, and false billing for facet injections. Evidence showed defendants knew Medicare guidelines but billed monthly, and deliberately cut shifts to avoid DEA scrutiny. They continued the scheme after Medicare suspension by reopening as 'Tri-State' and falsified patient charts. Pappas himself admitted knowing he could be criminally prosecuted for fraud, Zahoor admitted violating Medicare rules, and Betro resisted alternative treatments that would decrease revenue. Most allegations of prosecutorial misconduct were not improper, or any improprieties were not 'flagrant' enough to warrant reversal, especially given clear jury instructions to consider each defendant separately and that arguments are not evidence. The court found that comments like 'unrepentant fraudsters' were responses to defense counsel's similar attacks on government witnesses, and references to other patients were permissible responses to defense arguments about witness numbers. The admission of Omar's spending evidence was proper to show motive under Federal Rule of Evidence 404(b)(2), and its probative value was not substantially outweighed by unfair prejudice under Rule 403. The testimony of Drs. Taqi, Thakur, and Bolina was properly admitted as lay testimony under Fed. R. Evid. 701 because it was based on their first-hand observations and treatment and did not require specialized knowledge or hypothesizing beyond their ordinary medical training or personal experience. Any instances that approached the line between lay and expert testimony were swiftly addressed by the district court. The exclusion of Angela Vann's testimony, a non-Medicare patient, was not an abuse of discretion because her testimony was irrelevant to the charge of defrauding Medicare and would have been cumulative, thus not violating Pappas's right to present a complete defense. The deliberate-ignorance jury instruction was appropriate because the facts supported an inference that defendants, despite claiming lack of guilty knowledge, were informed of the fraudulent nature of the clinic's practices and Medicare rules. The district court's sentencing calculations were procedurally and substantively reasonable. The intended loss amount was correctly calculated based on a finding of 'pervasive fraud' stemming from the 'shots-for-pills protocol,' shifting the burden to the defense to prove reductions, which they failed to do. The 'sophisticated means' enhancement for Zahoor was justified by his participation in the scheme's concealment tactics, such as limiting shifts to avoid DEA detection and reopening under a new name. Zahoor's below-Guidelines sentence was substantively reasonable, and his 'trial tax' argument lacked merit as sentencing disparity with co-defendants is a discretionary factor.
Concurring - White, J.
Yes, I agree with the outcome to uphold the convictions and sentences, but I disagree with the majority's conclusion regarding the admission of some of the treating physicians' testimony in Section II.D. In my view, some of the testimony of Drs. Taqi, Thakur, and Bolina did cross the line into expert opinion testimony and should have been subject to Federal Rule of Evidence 702 requirements. Opinions like Taqi's that injections were ineffective because Lidocaine is diagnostic, not therapeutic, Thakur's characterization of opioid levels as 'excessive' based on his medical judgment, and Bolina's detailed technical explanation of proper facet-joint injection technique, all relied on specialized medical knowledge. This type of opinion testimony, even from a treating physician, must meet the reliability requirements of Rule 702 and Daubert, especially after the 2000 amendment to Rule 701 clarified that lay opinions cannot be based on scientific, technical, or other specialized knowledge. Previous cases like United States v. Wells predated this amendment, and Fielden v. CSX Transportation, Inc. focused on expert report requirements under Federal Rule of Civil Procedure 26(a)(2), not whether the testimony itself constituted expert opinion. However, the error in admitting this testimony without Rule 702 qualification was harmless because substantially equivalent evidence was admitted through other witnesses, and the overall evidence of the defendants' guilt was overwhelming.
Analysis:
This case reinforces the Sixth Circuit's robust standards for reviewing various challenges in complex white-collar criminal cases, particularly those involving healthcare fraud. It highlights the high bar for overturning convictions based on sufficiency of evidence or allegations of prosecutorial misconduct, especially when curative jury instructions are provided. Critically, the concurrence provides a vital clarification on the distinction between lay and expert testimony for treating physicians, emphasizing that opinions relying on specialized medical knowledge—even if based on first-hand observations—may require Rule 702 qualification post-Rule 701 amendment. The decision also solidifies the 'intended loss' and 'pervasive fraud' standards for sentencing calculations, placing a significant burden on defendants to disprove the full amount of billed services in such schemes.
