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Industry: Healthcare Fraud

District Court Lacks Jurisdiction to Expunge Valid Record of Conviction

In Jane Doe v. USA, 15-1967, the Second Circuit (Pooler, Livingston, Lohier) vacated the decision of the District Court (Gleeson, J.) granting the petitioner’s motion to expunge all records of her criminal conviction and holding that the District Court lacked subject matter jurisdiction to entertain the motion.

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Second Circuit Clarifies Physician Corporation Ownership Standard for Medical No-Fault Insurance Fraud Cases

In United States v. Tatyana Gabinskaya, 15-776-cr, the Court (Sack, J., Lynch, J. and Murtha, D.J., sitting by designation) affirmed the judgment entered by the United States District Court for the Southern District of New York (Oetken, D.J.), against defendant-appellant Tatyana Gabinskaya for conspiracy to commit health care fraud and mail fraud.  Gabinskaya, a licensed physician, was convicted of falsely holding herself out as the owner of a medical services professional corporation (“PC”) that provided medical treatment to car accident victims and submitted reimbursement claims to insurance companies.  The Government alleged that she did so in order for the true owners to defraud insurance companies by claiming to comply with the requirement under New York law that PCs be owned by licensed physicians. In affirming the judgment below, the Second Circuit clarified that whether an individual is an “owner” of a medical services PC in the context of the New York no-fault insurance law is defined by the economic realities of that individual’s participation in and control over the enterprise, and the possibility of their financial loss or gain, and not merely by whether the individual is the owner on paper.  This is not surprising—the law rarely accords true owner status to straw owners—and the Court found little reason to respect the corporate formalities in this context.

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Determining whether a “custodial interrogation” exists requires a heavily fact-specific analysis

How does the Government successfully “toe the line” when it comes to custodial interrogations for suppression purposes?  In United States v. Faux, 15-1282-cr, the Court (Jacobs, J., Hall, J., Restani, J., sitting by designation) answered this question after undertaking a fact-intensive inquiry and determining that the weight of the evidence balanced against suppression.  Faux underscores that there is no bright-line rule for determining whether an individual is in custody (and therefore entitled to Miranda warnings); rather, the court must engage in a fact-specific analysis that carefully weighs mitigating and aggravating factors.

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Second Circuit Reaffirms That Sentencing of Coconspirator Must Focus on Individual Culpability

In United States v. Bladimir Rigo, 15-1914, the Second Circuit remanded for resentencing by summary order, finding that the District Court plainly erred when it sentenced the defendant based on the criminal activity of coconspirators without first making certain particularized “relevant conduct” findings about that activity.  On June 2, 2015, the U.S. District Court for the Southern District of New York (Sweet, J.) sentenced Bladimir Rigo for his involvement in a conspiracy to commit healthcare fraud and unlawfully distribute prescription pills.  The District Court applied a $2.9 million loss calculation to its determination of Rigo’s sentence, some portion of which may have been based on the acts of Rigo’s coconspirators.  The District Court concluded that because Rigo “pled guilty to participating in a conspiracy, he is equally liable for the acts of his coconspirators, including others who may have written [the records found in Rigo’s home], and the plans and intentions of the conspiracy, whether consummated or not.”  United States v. Rigo, 86 F. Supp. 3d 235, 242 (S.D.N.Y. 2015). 

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