Which means the statute of limitations won’t matter if the government can characterize your conduct as one, continuous scheme that extended into the limitations period.
So held a decision last week by the U.S. Court of Appeals for the Ninth Circuit, which covers California and eight other states.
The decision affirmed a podiatrist’s conviction for violating the federal healthcare fraud statute, 18 U.S.C. § 1347. That statute punishes you for knowingly executing, or attempting to execute, a scheme to defraud a federal healthcare benefit program like Medicare. If convicted, you face up to ten years in prison, a $250,000 fine, or both. That maximum sentence rises to twenty years if your conduct results in serious bodily injury, and it rises to life in prison if your conduct results in death. This doctor saw his patients through Medicare and Medicaid as well as workers’ compensation and private insurance programs.
After he was indicted, he moved to dismiss sixteen of the counts against him because they were based on allegedly false bills from a single date of service (at a nursing home) that fell outside the five-year statute of limitations.
The court agreed that all but one of the counts fell outside the five-year statute, so it dismissed those counts, but it preserved the one count because the doctor hadn’t submitted and received payment on that bill until a year later, on dates within the five-year period.
The government then returned to the grand jury and got a new indictment—called a superseding indictment—that combined the one surviving count and the several dismissed counts into one count alleging a continuous scheme that extended into the five-year period.
The doctor moved to dismiss this superseding indictment on the same ground, but the court denied his motion this time, and after a seven-day trial, a jury convicted him on multiple counts, including that one.
So can the government do that? Can it simply rewrite an indictment like that to avoid the statute of limitations? Can it simply re-file multiple counts as one continuing offense when it charged them the first time as separate counts?
In this case, the answer was yes.
The court of appeals held that healthcare fraud under section 1347 is a “continuing offense” that punishes each fraudulent scheme as a whole, rather than each act in furtherance of the scheme. The court reasoned that section 1347 was modeled after the federal bank-fraud statute, which is section 1344, so it should be interpreted the same way.
The court did note that, in a prior case, it had permitted the government to charge each bill as a separate execution of a fraudulent scheme on the ground that, with each bill, the defendant owed the insurer an independent obligation to be truthful.
But just because the government could’ve charged the case that way—and even did so, initially—didn’t mean that it had to do it that way. As long as the new indictment alleged one execution of a single, ongoing scheme, the government could charge it that way even though several acts in furtherance of the scheme fell outside the statute of limitations.
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