Opinion
Civil Action No. 3:13-CV-00023-M
2019-08-14
The UNITED STATES of America, EX REL. Gordon Grant BACHMAN, Plaintiffs, v. HEALTHCARE LIAISON PROFESSIONALS, INC., d/b/a US Physician Home Visits, et al., Defendants.
Glenn A. Harrison, J. Scott Hogan, Lindsey E. Beran, Sean Robert McKenna, U.S. Attorney's Office, James R. Tucker, Dallas, TX, for Plaintiffs. Ben P Gaines, III, Texarkana, TX, pro se. Noble Ezukanma MD PA, Texarkana, TX, pro se. Camille M Knight, Burleson Pate & Gibson, Mark S. Kennedy, Calvin Trey Scott, Joanna H. Martin, Lurese A Terrell, Kennedy Attorneys & Counselors at Law, Dallas, TX, for Defendants. UNEC Group Inc, Texarkana, TX, pro se.
Glenn A. Harrison, J. Scott Hogan, Lindsey E. Beran, Sean Robert McKenna, U.S. Attorney's Office, James R. Tucker, Dallas, TX, for Plaintiffs.
Ben P Gaines, III, Texarkana, TX, pro se.
Noble Ezukanma MD PA, Texarkana, TX, pro se.
Camille M Knight, Burleson Pate & Gibson, Mark S. Kennedy, Calvin Trey Scott, Joanna H. Martin, Lurese A Terrell, Kennedy Attorneys & Counselors at Law, Dallas, TX, for Defendants.
UNEC Group Inc, Texarkana, TX, pro se.
ORDER
BARBARA M. G. LYNN, CHIEF JUDGE
Before the Court is Relator's Motion for Partial Summary Judgment (ECF No. 230) and Motion for Entry of Judgment Against Defendants Noble Ezukanma, Myrna Parcon, and Ransome Etindi (ECF No. 249). For the reasons stated below, the Motions are GRANTED.
I. Background
Relator brings this qui tam action on behalf of the United States under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729, et seq. , alleging that Defendants engaged in a scheme to defraud Medicare. Under Count 1 of Relator's Fourth Amended Complaint (ECF No. 253), Relator alleges that Ezukanma violated § 3729(a)(1)(A) of the FCA, which prohibits "knowingly present[ing], or caus[ing] to be presented, a false or fraudulent claim for payment or approval." 31 U.S.C. § 3729(a)(1)(A). Under Count 2, Relator alleges that Ezukanma, Parcon, Etindi, and Ben Gaines violated § 3729(a)(1)(C), which imposes liability on a party who "conspires to commit [violations]" of the FCA, including the proscriptions against submitting false claims and making false statements.
Although Relator's Motion for Summary Judgment and Motion for Judgment were filed before the Court granted Relator leave to amend his Third Amended Complaint, the Court finds that the Third Amended Complaint and the Fourth Amended Complaint are substantially similar as to Defendants Ezukanma, Parcon, Etindi, and Gaines. Thus, the Court considers Relator's Motions as if they were asserted against the Fourth Amended Complaint.
On June 10, 2015, Ezukanma, Parcon, Etindi, and Gaines were indicted for one count of conspiracy to commit health care fraud in violation of 18 U.S.C. §§ 1349 and 1347. (United States v. Ezukanma, et al. , Case No. 3:15-cr-0254-B, at ECF No. 3). On November 4, 2016, the Government brought a superseding information against Gaines, charging him with one count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 371. (Id. at ECF No. 146). On February 7, 2017, a superseding indictment charged Ezukanma with seven counts of conspiracy to commit health care fraud in violation of 18 U.S.C. §§ 1349, 1347, and 2. (Id. at ECF No. 203). Parcon, Etindi, and Gaines pled guilty. (Id. at ECF Nos. 90, 143, 149). The Court entered Judgments against (1) Parcon, sentencing her to 120 months of incarceration and 2 years of supervised release, and requiring her to pay restitution in the amount of $51,497,930.87; (2) Etindi, sentencing him to 30 months of incarceration and 1 year of supervised release, and requiring him to pay restitution in the amount of $18,309,171.21; and (3) Gaines, sentencing him to 60 months of incarceration and 1 year of supervised release, and requiring him to pay restitution in the amount of $9,323,957.60. (Id. at ECF Nos. 331, 333, 464).
After a jury trial, Ezukanma was found guilty on all counts alleged in the superseding indictment, and was sentenced to 200 months of incarceration and 3 years of supervised release on each of the seven counts, to run concurrently. (Id. at ECF No. 363). The Court ordered that Ezukanma pay restitution in the amount of $34,003,151.24. (Id. ). Ezukanma appealed his conviction and sentence (see id. at ECF No. 375) and the Fifth Circuit affirmed the Court's Judgment against Ezukanma. (Id. at ECF No. 489).
Relator moves for summary judgment against Ezukanma, Parcon, Etindi, and Gaines, arguing that the criminal proceedings against them determined, as a matter of law, the predicate facts necessary to find them liable for violating the FCA and that they are bound by those determinations in this case.
II. Legal Standard
Under Federal Rule of Civil Procedure 56, summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual issue is material "if its resolution could affect the outcome of the action." Weeks Marine, Inc. v. Fireman's Fund Ins. Co. , 340 F.3d 233, 235 (5th Cir. 2003). A factual dispute is " ‘genuine,’ if the evidence is such that a reasonable [trier of fact] could return a verdict for the non-moving party." Crowe v. Henry , 115 F.3d 294, 296 (5th Cir. 1997). The Court is required to view all facts and draw all reasonable inferences in the light most favorable to the non-moving party and to resolve all disputed factual controversies in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Boudreaux v. Swift Transp. Co., Inc. , 402 F.3d 536, 540 (5th Cir. 2005).
III. Analysis
As an initial matter, the FCA prevents a defendant from "challenging issues material and necessary to his criminal conviction in an attempt to defeat liability under the False Claims Act." United States v. Boutte , 907 F.Supp. 239, 241 (E.D. Tex. 1995). Section 3731(e) codifies the principle of collateral estoppel:
Notwithstanding any other provision of law, the Federal Rules of Criminal Procedure, or the Federal Rules of Evidence, a final judgment rendered in favor of the United States in any criminal
proceeding charging fraud or false statements, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the essential elements of the offense in any action which involves the same transaction as in the criminal proceeding and which is brought under subsection (a) or (b) of section 3730.
31 U.S.C. § 3731(e). Relator brought his claim under § 3730(b). (ECF No. 253 at 3). Because Ezukanma, Etindi, Parcon, and Gaines' convictions establish the essential elements of Relator's FCA claims, § 3731(e) precludes them from denying those elements.
To state a claim under § 3729(a)(1)(A), one must allege: "(1) a false statement or fraudulent course of conduct; (2) that was made or carried out with the requisite scienter; (3) that was material; and (4) that caused the government to pay out money (i.e., that involved a claim)." United States ex rel. Spicer v. Westbrook , 751 F.3d 354, 365 (5th Cir. 2014) (internal citation and quotation omitted). To state a claim under § 3729(a)(1)(C), "a relator must show ‘(1) the existence of an unlawful agreement between defendants to get a false or fraudulent claim allowed or paid by [the Government] and (2) at least one act performed in furtherance of that agreement.’ " United States ex rel. Grubbs v. Kanneganti , 565 F.3d 180, 193 (5th Cir. 2009) (quoting United States ex rel. Farmer v. City of Hous. , 523 F.3d 333, 343 (5th Cir. 2008) ).
In the Fourth Amended Complaint, Relator alleges that Ezukanma was billing Medicare for services rendered to patients who he had improperly certified as being "homebound," and that if Medicare had known about Ezukanma's practices, it would not have paid the submitted claims. (See, e.g., ECF No. 253 ¶¶ 36, 77–83). Relator asserts that "Defendants Ezukanma, Ezukanma, M.D., Etindi[,] UNEC, Medpro and/or Maese (sometimes hereinafter collectively referred to as ‘Doctor Billing Entities’) and USPHV and Parcon were engaged in a conspiracy, the purpose of which was to defraud Medicare by submitting False Claims, to bill Medicare for services rendered to patients of Defendant Padez Home Health, Inc. and/or other home health agencies knowing that patients for which billings were submitted had been improperly certified as being ‘homebound’ by Defendants Ezukanma, Etindi, and/or Maese." (Id. ¶¶ 101, 107). Relator also alleges that "Defendants USPHV, Padez, Gaines, Parcon, Ezukanma, Etindi, and Maese engaged in a conspiracy, the purpose of which was to defraud Medicare by submitting False Claims, to make it appear as though USPHV, AGood [sic], and Essence were three (3) separate and independent entities when they were billing Medicare when in fact they were operated as one global entity." (Id. ¶¶ 108, 110).
Etindi and Parcon's factual resumes state that they pled guilty to conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349 ( 18 U.S.C. § 1347 ), which has the following elements: (1) the defendant and at least one other person made an agreement to commit the crimes of health care fraud as charged in the indictment; (2) the defendant knew the unlawful purpose of the agreement, and (3) the defendant joined in it willfully, that is, with the intent to further the unlawful purpose. (Case No. 3:15-cr-254 at ECF Nos. 89, 144). Gaines' factual resume states that he pled guilty to conspiracy to commit health care fraud in violation of 18 U.S.C. § 371 ( 18 U.S.C. § 1347 ), which has the following elements: (1) the defendant and at least one other person made an agreement to commit the crime of health care as charged in the superseding information; (2) the defendant knew the unlawful purpose of the agreement and joined in it willfully, that is, with the intent to further the unlawful purpose; and (3) one of the conspirators during the existence of the conspiracy knowingly committed at least one of the overt acts described in the superseding information, in order to accomplish some object or purpose of the conspiracy. (Id. at ECF No. 148).
Etindi, Parcon, and Gaines' factual resumes state the following stipulated fact, among others:
Beginning on or about January 1, 2009, and continuing through on or about June 9, 2013, in the Dallas Division of the Northern District of Texas, and elsewhere, the defendants, Noble Ezukanma, Myrna Parcon, Olivia [sic] Padilla, Ransome Etindi, Lita Dejesus, Ben Gaines, and others, did knowingly, intentionally, and willfully combine, conspire, confederate, and agree with each other, to commit certain offenses against the United States, that is, to knowingly and willfully execute, and attempt to execute, a scheme and artifice: (a) to defraud Medicare, a health care benefit program as defined in 18 U.S.C. § 24(b) ; and (b) to obtain money and property owned by and under the custody and control of Medicare, a health care benefit program as defined in 18 U.S.C. § 24(b), by means of materially false and fraudulent pretenses representations, and promises, in connection with payments for health care services, namely physician house call visits and home health care ....
(Id. at ECF Nos. 89, 144, 148). The superseding indictment, the counts of which the jury found Ezukanma guilty, includes the same paragraph. (Id. at ECF No. 203; see also id. ("As part of the fraudulent business model, Noble Ezukanma and Ransome Etindi certified 94% of the Medicare beneficiaries receiving home health services from A Good, and 65% of the Medicare beneficiaries receiving home health services from Essence.")).
The Court finds that the conduct for which Etindi, Parcon, and Gaines pled guilty and for which Ezukanma was convicted is the same as that alleged by Relator in the Fourth Amended Complaint. Thus, Etindi, Parcon, Gaines, and Ezukanma are estopped from denying the essential elements of Relator's claims under the FCA. Accordingly, the Court finds that no genuine dispute exists as to any material fact with regard to whether Ezukanma violated §§ 3729(a)(1)(A) and 3729(a)(1)(C) of the FCA and whether Parcon, Etindi, and Gaines violated § 3729(a)(1)(C).
Parcon, Gaines, and Ezukanma did not respond to Relator's Motion for Summary Judgment (ECF No. 230) or Motion for Entry of Judgment Against Ezukanma, Parcon, and Etindi (ECF No. 249). Etindi sent a letter to the Court "request[ing] that no summary judgement [sic] be made" and stating that "[t]here are at least three issues that I request be heard in open court before you, that might lead to me being dropped from this case." Because § 3731(e) prevents Etindi from challenging essential elements of Relator's claims under the FCA, the Court will not consider Etindi's letter.
Relator seeks damages based on his claims under the FCA. A person violating the FCA "is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000 ... plus 3 times the amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3729(a)(1). Relator argues that the restitution ordered by the Court in the criminal proceedings constitutes the amount of damages which the Government sustained. (ECF No. 230 at 18). The Court agrees with this approach, because 18 U.S.C. § 3664 requires the sentencing court to determine the total amount of the victim's loss when ordering restitution. See U.S. ex rel. Lamberts v. Stokes , 640 F.Supp.2d 927, 930 (W.D. Mich. 2009) (noting that "[s]everal courts have held that a sentencing court's findings of actual loss for purposes of restitution may be used to establish the amount of damages in a subsequent civil action under the FCA."); United States v. Szilvagyi , 398 F.Supp.2d 842, 849–50 (E.D. Mich. 2005) (applying the total amount of loss determined under 18 U.S.C. § 3664 on health care fraud conviction as the total amount of loss to Medicare for purposes of damages in FCA action); United States v. Davis , No. 05-393-EBA, 2008 WL 1735167, at *5 (E.D. Ky. Apr. 11, 2008) (same); United States v. Convalescent Trans., Inc. , No. 4:03-CV-32-FL, 2007 WL 2090210, at *6 (E.D.N.C. July 19, 2007) (same); United States v. Bickel , No. 02-3144, 2006 WL 1120439, at *3–4 (C.D. Ill. Feb. 22, 2006) (trebling actual damages portion of restitution amount from criminal proceeding).
Pursuant to the Mandatory Victims Restitution Act of 1996, the Court in the criminal proceedings ordered Parcon to pay restitution of "$51,497,930.87, jointly and severally with Lita S. Dejesus (03); Ransome N. Etindi (04); Oliva A. Padilla (05); and Ben P. Gaines (06)." (United States v. Ezukanma, et al. , Case No. 3:15-cr-0254-B, at ECF No. 331). Etindi was ordered to pay restitution of "$18,309,171.21, jointly and severally with Myrna S. Parcon, a.k.a. Merna Parcon (02); Lita S. Dejesus (03); Oliva A. Padilla (05); and Ben P. Gaines (06)." (Id. at ECF No. 333). Gaines was ordered to pay restitution of "$9,323,957.60, jointly and severally with Noble U. Ezukanma (01); Myrna S. Parcon, a.k.a. Merna Parcon (02); Lita S. Dejesus (03); Ransome N. Etindi (04); and Oliva A. Padilla (05)." (Id. at ECF No. 464; see also id. at ECF No. 482 (during sentencing, the Court stated that Gaines "is responsible for the loss of $9,323,957.60")). Ezukanma was ordered to pay "$34,003,151.24, jointly and severally with co-defendants Myrna S. Parcon (02); Lita S. Dejesus (03); Ransome N. Etindi (04); Oliva A. Padilla (05); and Ben P. Gaines (06)." (Id. at ECF No. 363). Thus, in the current case, Relator is entitled to treble damages of $154,493,792 against Parcon; $54,927,513 against Etindi; $27,971,872 against Gaines; and $102,009,454 against Ezukanma. Relator has waived "any claim for additional civil penalties, as well as any claim for attorneys' fees, expenses and costs incurred on his behalf." (ECF No. 230 at 18–19).
IT IS ORDERED that Relator's Motion for Partial Summary Judgment (ECF No. 230) and Motion for Entry of Judgment Against Defendants Ezukanma, Parcon, and Etindi (ECF No. 249) are GRANTED. The Court will enter a separate Final Judgment.
SO ORDERED .
FINAL JUDGMENT
In accordance with the Court's Order granting Relator's Motion for Partial Summary Judgment and Motion for Entry of Judgment Against Defendants Ezukanma, Parcon, and Etindi, it is ORDERED, ADJUDGED, and DECREED that Relator recover against Parcon in the amount of $154,493,792; against Etindi in the amount of $54,927,513; against Gaines in the amount of $27,971,872; and against Ezukanma in the amount of $102,009,454, for which let execution issue. Each party shall bear their own attorneys' fees and costs.
SO ORDERED .