Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 04-cr-00317). District Judge: The Honorable Alan N. Bloch.
The opinion of the court was delivered by: Restani, Judge.
Argued on September 27, 2006
Before: MCKEE and AMBRO, Circuit Judges, and RESTANI*fn1, Judge
Aimee Jones ("Jones") appeals her conviction for health care fraud in violation of 18 U.S.C. § 1347(2), arguing that the Government did not establish the essential elements of the crime. Jones also contests her sentence, including the requirement to make restitution to her former employer, Progressive Medical Specialists, Inc. ("Progressive"). We hold that the Government did not establish the elements of health care fraud in violation of § 1347(2) and we will reverse Jones' conviction and vacate her sentence.
I. Procedural and Factual Background
In February 2001, Jones began working at a methadone clinic operated by Progressive and located on Smallman Street in Pittsburgh, Pennsylvania. The clinic provided methadone treatments to clients in exchange for a fee. The clinic did not accept insurance and on Mondays clients generally paid cash for a week's worth of services.
At the clinic, Jones worked as one of the front counter clerks, performing light clerical tasks. She was stationed at the front of the clinic, signing in clients as they arrived and collecting payments from them. After signing them in, she would indicate on the sign-in sheet and the computer records whether the client had paid and the method of payment.*fn2 During Monday mornings, Jones or another front counter clerk would count the cash received alone in the back office of Annamarie Roberto, project director of the clinic. A clerk would then go to the bank to make a deposit. Later in the afternoon, a clerk would make a second bank deposit.*fn3 At the end of the day, Jones and the other clerks would reconcile the amount indicated as received on the sign-in sheets with the amount indicated as received in the computer. They did not reconcile the amount received with the amount deposited.
In March 2004, Roberto noticed that there was a discrepancy between the amount indicated as received on the sign-in sheets and the computer records and the amount listed as deposited on the deposit slips. She then analyzed the financial records from February 2000 to March 2004 and discovered a discrepancy of $451,000 between the amount received and the amount deposited. After checking the dates on which the discrepancies occurred, she found that they occurred on the majority of the days on which Jones worked alone and did not occur when Jones was absent from work.
Subsequent investigations revealed that from August 23, 2001 to August 20, 2004, Jones had deposited $144,680 in cash into her and her husband's bank account, despite the fact that their joint gross income from 2001 to 2003 was less than $40,000 each year.*fn4 Investigations also revealed that they had made several large cash purchases in 2003 and 2004 totaling $55,036.25.
After the investigations, Jones was indicted on one count of health care fraud in violation of 18 U.S.C. § 1347(2). A jury found her guilty and the District Court sentenced her to twenty-four months of imprisonment. The Court also imposed three years of supervised release, ordered restitution to Progressive for $240,076.33, and ordered forfeiture of $199,716.25 and a 2003 Honda motorcycle.
On appeal, Jones argues that the Government did not establish the elements of health care fraud in violation of § 1347(2) because the purported theft was not committed in connection with the delivery or payment of health care benefits, and because Progressive was not a health care benefit provider. Jones also challenges her sentence, arguing that the District Court did not give meaningful consideration to factors set forth in 18 U.S.C. § 3553(a). Jones further claims that the Court committed multiple errors when it ordered Jones to pay restitution to Progressive. ...