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Medicare fraud — specific intent

United States Court of Appeals For the Seventh Circuit


Medicare fraud — specific intent

A Medicare fraud conviction under 18 U.S.C. 1035 does not require specific intent.

“Placing § 1035 within the context of the entire statutory scheme that Congress enacted only confirms our reading of the plain text. Congress enacted § 1035 as part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Along with the provisions of § 1035, HIPAA criminalized health care fraud (among other health care specific criminal offenses). See, e.g., 18 U.S.C. § 1347(a)(1) (making it illegal to ‘knowingly and willfully execute[], or attempt[] to execute, a scheme or artifice to defraud any health care benefit program’). And intent to defraud itself requires a specific intent to deceive or mislead. United States v. Awad, 551 F.3d 930, 940 (9th Cir. 2009) (noting jury was instructed in § 1347 prosecution that ‘“intent to defraud” [is] defined as “an intent to deceive or cheat”’); United States v. Choiniere, 517 F.3d 967, 972 (7th Cir. 2008) (noting jury instruction in § 1347 case defined ‘“intent to defraud” to mean “that the acts charged were done knowingly with the intent to deceive or cheat the victims”’); United States v. White, 492 F.3d 380, 393-94 (6th Cir. 2007) (to convict under § 1347 ‘the government must prove the defendant’s “specific intent to deceive or defraud”’); see also United States v. Vallone, 698 F.3d 416, 483 (7th Cir. 2012) (citing United States v. Howard, 619 F.3d 723, 727 (7th Cir. 2010)); United States ex rel. Baltazar v. Warden, 635 F.3d 866, 868 (7th Cir. 2011) (citing Merck & Co. v. Reynolds, 130 S. Ct. 1784, 1796 (2010)). If health care fraud and health care false statements both required specific intent to deceive, the two statutes would criminalize essentially the same conduct. Especially because conviction for health care fraud carries twice the maximum penalty as the false statements statute, compare § 1035(a) (five-year maximum prison term), with § 1347(a) (ten-year maximum prison term (twenty if the crime results in bodily injury)), an interpretation of the two statutes that covers substantially the same conduct makes no sense. Something must warrant the harsher penalty for the fraud charges. That something is the enhanced culpability attendant in a person’s specific intent to deceive or mislead. Fraud requires that proof; false statements do not. Admittedly, ‘[t]he mere fact that two federal criminal statutes criminalize similar conduct says little about the scope of either.’ Pasquantino v. United States, 544 U.S. 349, 359 n.4 (2005). But an interpretation of § 1035 that required intent to deceive would not merely criminalize conduct similar to that prohibited by § 1347, it would result in nearly complete overlap: any false statement made with intent to deceive would necessarily qualify as a scheme to defraud under § 1347. We find it odd that Congress would intend such a result from two statutes enacted in the same piece of legislation. In short, the text of § 1035, courts’ interpretations of similar text in other false statements statutes, and the context in which Congress enacted § 1035 all require the conclusion that § 1035 does not require proof of specific intent to deceive. The district court thus properly instructed the jury on the statute’s willfulness requirement.”


12-3231 U.S. v. Natale

Appeal from the United States District Court for the Northern District of Illinois, Pallmeyer, J., Flaum, J.

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