United States v. Christopher Perry

Citations: 757 F.3d 166; 2014 U.S. App. LEXIS 12405; 2014 WL 2937086Docket: 13-4012

Court: Court of Appeals for the Fourth Circuit; July 1, 2014; Federal Appellate Court

Original Court Document: View Document

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Christopher Perry was convicted by a federal jury on three counts of fraud concerning his receipt of Social Security and healthcare benefits. On appeal, he argued that the indictment was deficient in essential elements of the fraud charges and was barred by the statute of limitations. Additionally, he contended that the government did not prove he engaged in any scheme to defraud. The appellate court, led by Judge Wynn, affirmed the district court’s judgment.

Perry applied for Social Security disability benefits in December 1995, agreeing to report any changes in his medical condition or employment status. He began receiving benefits in 1996, despite having worked at various jobs, including at Macy’s and Hertz Corporation, from 1996 to 2007. Notably, the Social Security Administration (SSA) requested employment information from Perry in 1999, to which there was no response, and his reported earnings exceeded allowable limits in 1997 and 1998.

In January 2006, he started receiving subsidized Medicare Part D prescription drug benefits, based on the SSA’s belief that his only income was from disability benefits. Perry did not respond to inquiries from Medicare regarding additional income. In April 2007, while employed by Hertz, he applied for the Low Income Subsidy (LIS) program, falsely claiming to expect no earnings that year and reporting no income other than Social Security disability. In June 2007, he began a paid training program with the SSA, where he continued to submit claims for Medicare benefits until 2009.

In July 2007, the Social Security Administration (SSA) identified income received by Defendant through a review of IRS records and subsequently requested employment history via a work activity report in March 2008. Defendant submitted the report in July 2008, disclosing some, but not all, past employment. In 2009, SSA followed up twice to verify any work-related expenses or subsidies but ultimately sent a letter notifying Defendant of the impending termination of benefits, allowing him ten days to provide further evidence regarding his employment status. Defendant did not respond, leading to the termination of his benefits.

In March 2012, the government charged Defendant with Social Security fraud, federal health benefit program fraud, and health care fraud in a three-count indictment. After Defendant's motion to dismiss was denied, the district court required the government to detail the employment not reported by Defendant. The government complied by listing his employers during the benefit period. At trial in September 2013, Defendant's motion for acquittal based on the statute of limitations was denied, and the jury found him guilty on all counts. He received concurrent sentences of 24 months for Counts One and Three, and 12 months for Count Two.

On appeal, Defendant argued that Counts One and Two were unconstitutionally defective due to a lack of specificity regarding the obligation to disclose employment, that the indictment did not allege specific intent for all counts, that Count Three lacked a defined scheme or artifice to defraud, and that the indictment was barred by the statute of limitations. Additionally, he challenged the sufficiency of evidence for Count Three. The appellate review of the district court’s denial of the motion to dismiss follows a standard of clear error for factual findings and de novo for legal conclusions. An indictment must include all essential elements of an offense, inform the defendant adequately, and allow for a double jeopardy defense in future prosecutions. The indictment must clearly state the offense using statutory language without ambiguity, ensuring it encompasses all elements necessary for the offense.

A valid indictment requires a general description of the offense to be accompanied by specific facts that inform the accused of the particular charges, as established in legal precedent (Hamling and Russell). In this case, the indictment against the Defendant includes two counts: Count One for Social Security fraud under 42 U.S.C. § 408(a)(4) and Count Two for fraud related to federal health benefit programs under 42 U.S.C. § 1320a-7b. Both statutes address fraudulent concealment of information that affects benefit eligibility.

Count One alleges the Defendant concealed his employment and earnings from the Social Security Administration from approximately 1996 to September 2009, intending to secure greater benefits than entitled. Count Two similarly claims he concealed employment related to Medicare benefits from April 1998 to September 2009. The indictment specifies that Defendant’s employment history triggered his obligation to disclose relevant information, and his failure to do so constituted criminal conduct.

The indictment was deemed sufficient by the district court, as it provided enough detail to inform the Defendant of the charges and the essential elements of the crimes. It effectively tracked statutory language and identified the triggering event for disclosure obligations. Additionally, the government addressed any ambiguities by issuing a bill of particulars that clarified the specific jobs involved, eliminating the need for a detailed listing of each position held by the Defendant. Consequently, the indictment passed constitutional scrutiny for specificity.

Defendant contends that the indictment lacks sufficient allegations of specific intent to defraud, which is a necessary element for all counts. The court reviews this issue de novo, confirming that each essential element must be charged, including intent to defraud. The indictment explicitly charges Defendant with intent in Counts One and Two, stating that he concealed employment and earnings from the Social Security Administration and Medicare to fraudulently secure payments. Count Three further alleges that Defendant willfully executed a scheme to defraud Medicare. Despite Defendant's argument that the indictment only describes passive non-disclosure, the court finds that the allegations clearly indicate intentional concealment of material facts necessary to substantiate the fraud charges. Defendant's reliance on United States v. Phillips is deemed misplaced, as that case pertains to evidentiary sufficiency rather than indictment adequacy. The court concludes that the indictment properly alleges the required intent to defraud.

Additionally, Defendant argues that the district court erred in denying his motion to dismiss the indictment based on the statute of limitations. The applicable statute of limitations for the fraud offenses is five years. The court notes that typically, the statute begins to run when the crime is completed, but ongoing criminal acts may be considered a "continuing offense." The court emphasizes that the nature of the alleged crimes may warrant this treatment for limitations purposes, as recognized by case law.

Defendant moved to dismiss the indictment from March 2012, claiming it was time-barred due to some conduct occurring before March 2007. The district court denied this motion, stating that Counts 1 and 2 fell within the five-year statute of limitations and that the doctrine of continuing offenses applied. The court noted that the defendant's ongoing concealment constituted a "course of conduct" affecting his rights, with the failure to report being the violation. The Defendant accepted the classification of the offenses as continuing but argued that the limitations period began in 1999, when the government allegedly knew or could have discovered his non-disclosure. The court found no binding precedent supporting such a discovery rule and rejected the Defendant's reliance on a Fourth Circuit civil forfeiture case and other out-of-circuit immigration cases, emphasizing that they were distinguishable. Additionally, the Defendant challenged the sufficiency of the indictment for Count Three, which charged health care fraud under 18 U.S.C. § 1347. The parties disagreed on the standard of review, but the court concluded that the Defendant could not prevail under either standard. Count Three involved knowingly executing a fraudulent scheme against a health care benefit program.

The indictment alleges that the Defendant executed a scheme to defraud Medicare through three key claims: 1) he was employed at multiple companies while receiving Social Security Disability and Medicare benefits; 2) he profited by obtaining prescription drugs without payment or co-pay; and 3) he made false statements regarding his employment in documents. The government asserts that the Defendant concealed his employment while accepting benefits. Additionally, he applied for and received a Low Income Subsidy for prescription drugs, falsely stating in his application that he expected no earnings that year. The Defendant did not provide justification for requiring more factual allegations in the indictment and the court found no basis for this argument.

The Defendant also challenges the sufficiency of the evidence supporting his healthcare fraud conviction. The appellate standard for overturning a jury verdict is high, requiring clear evidence of failure by the prosecution. The court emphasized that its role is to assess whether the evidence could support a rational determination of guilt beyond a reasonable doubt, viewing it in the light most favorable to the government. To establish healthcare fraud, the government must demonstrate that the Defendant knowingly executed a scheme to defraud a health care benefit program or obtained funds through false pretenses. Intent to defraud can be inferred from the circumstances and does not require direct evidence. Determining whether there was a scheme to defraud involves understanding common-law fraud, which includes actions that mislead or deceive to prevent the other party from acquiring material information.

Silence regarding a material fact typically does not lead to a fraud claim unless there is intent to deceive, as established in legal precedent. In United States v. Phythian, the Eighth Circuit upheld a fraud conviction based on evidence that the defendant knowingly failed to report employment while receiving benefits, despite being informed of the obligation to report. In the current case, the defendant also had a clear duty to report his employment to the Social Security Administration (SSA), evidenced by his application for benefits and explicit communications from the SSA regarding his reporting responsibilities. The government demonstrated that the defendant's employment status was material to his benefits, which would have been affected had he disclosed it. Evidence included the defendant's training at SSA about how employment impacts benefits and documentation showing repeated requests for employment information. Despite these obligations, the defendant did not disclose his employment until July 2008, and even then, his report was incomplete. He continued to receive substantial benefits while employed, totaling over $15,000 in disability checks and more than $4,000 in assistance for Medicare prescription drugs. The court found sufficient evidence for a jury to conclude that the defendant engaged in a health care fraud scheme, affirming the district court's decisions to deny motions to dismiss the indictment and for judgment of acquittal.