By Dan Menken

Today in United States v. Garnes, the Fourth Circuit affirmed the conviction of Charlotte Elizabeth Garnes for conspiracy to commit health care fraud, obstruction of an official proceeding, and ten counts of making a false statement relating to a health care benefit program.

Defendant Raises Three Claims Challenging the Conviction and Sentence

First, Defendant claims that the district court abused its discretion by permitting the government to cross-examine her regarding an extramarital affair with her former boss.

Second, Defendant claims that the district court erred by denying her motion for a judgment of acquittal because the evidence presented was insufficient to establish that her convictions for conspiracy to commit health care fraud and for making false statements relating to a health care benefit program were “knowing and willful.”

Finally, Defendant claims that the district court improperly held her responsible for losses caused by her co-conspirator when calculating her sentencing guidelines range.

 Defendant Involved in a Conspiracy to Commit Health Care Fraud

Defendant, along with two unlicensed counselors, entered into an agreement to defraud the North Carolina Medicaid agency. Defendant submitted numerous reimbursement claims in which she falsely represented that she had provided therapeutic services. Many of the claims were facially invalid because claimed therapy sessions exceeded 24 hours in a single day. Additionally, Defendant submitted claims for services rendered in North Carolina when she was in a different state, and she claimed services were provided to patients who testified that they never received services from Defendant.

During cross-examination, the government sought to show that Defendant had been fired from her previous employment for failure to maintain proper records. Defendant responded to this line of questioning by stating that the owner’s significant other had fraudulently used Defendant’s Medicaid number. In response, the government sought to impeach Defendant’s alternative explanation by questioning Defendant regarding her extramarital affair with the owner.

 Claim One: Evidence Impeaching Witness Testimony Allowed on Cross-Examination

Reviewing for an abuse of discretion, the Fourth Circuit held that the district court correctly overruled the objection of Defendant’s counsel because Rule 404(b) does not control evidence offered for impeachment on cross-examination. The evidence in question was probative of Defendant’s character for truthfulness.

 Claim Two: Knowledge and Intent May Be Inferred From Circumstantial Evidence

Reviewing de novo, the Court noted that in order to convict Defendant of conspiracy to commit health care fraud, the government has to show that Defendant “knowingly and willfully executed” a fraudulent health care scheme. The Court further noted that the jury may infer knowledge and intent from circumstantial evidence in conspiracy cases. In this case, there was sufficient evidence regarding Defendant’s reimbursement claims to establish that Defendant had “knowingly and willingly” agreed to participate in a fraudulent health care scheme with her co-conspirators.

Furthermore, in order to convict Defendant of making a false statement relating to a health care benefit program, the government must show that Defendant knowingly and willfully made materially false or fraudulent statements in connection with the delivery of or payment for health care benefits, items, or services. Similarly, on this charge, the Fourth Circuit ruled that there was sufficient evidence from which a jury could find that the false statements made by Defendant were made knowingly and willfully.

Claim Three: Conspirator Responsible for Foreseeable Acts of Co-Conspirators

The Fourth Circuit held that the district court was entitled to include the amount of losses caused by co-conspirators in calculating the sentencing guidelines range. Defendant’s relevant conduct includes all reasonably foreseeable acts in furtherance of the jointly undertaken criminal activity.

 Conviction and Sentence Affirmed

Holding that there was no reversible error committed by the district court regarding the three claims of the Defendant, the Fourth Circuit affirmed Defendant’s conviction and sentence.