United States District Court, E.D. Kentucky, Central Division, Frankfort
MEMORANDUM OPINION & ORDER
Gregory F. Van Tatenhove United States District Judge.
matter is before the Court on the Defendants' various
motions for release pending appeal. [R. 422; R. 423; R. 426;
R. 427.] Because they have not adequately raised a
substantial question of law or fact likely to result in
reversal, these motions must be DENIED.
See 18 U.S.C. § 3143(b).
facts have been recited several times over the course of
litigation, but a brief summary is helpful here. [See,
e.g., R. 1; R. 82; R. 178.] In November 2015, the United
States indicted these five men, Dr. Robert Bertram, Jr., Mr.
Wes Bottom, Dr. Robin Peavler, Mr. Brian Walters, and Dr.
Bryan Wood, for ninety-nine counts of health care fraud and
one count of conspiracy to commit health care fraud. [R. 1.]
Dr. Peavler and Dr. Wood co-owned SelfRefind, a chain of
substance abuse treatment clinics headquartered in Danville,
Kentucky. As part of the prescribed treatment for substance
abuse, physicians at SelfRefind tested for the presence or
absence of illicit substances in a patient by conducting a
urine drug test. SelfRefind conducted initial qualitative
drug screens, which could then be submitted to another lab
for a quanititative confirmation test if the doctor believed
this was necessary. Dr. Peavler and Dr. Wood later joined Dr.
Bertram, Mr. Bottom, and Mr. Walters as co-owners of
PremierTox, Inc. in Russell Springs, Kentucky. PremierTox was
a clinical laboratory that conducted quantitative
confirmation urine drug tests for places like SelfRefind.
Indictment alleged that Dr. Peavler and Dr. Wood referred all
urine samples from SelfRefind to PremierTox for testing, even
if the initial drug screen did not indicate a need for
quantitative confirmation tests. Furthermore, the Indictment
alleged that PremierTox accepted these samples even though
PremierTox did not yet have the proper equipment to test the
samples. Thus, the urine samples from SelfRefind were frozen
at PremierTox and tested later. PremierTox prioritized the
testing of fresh urine samples, but continued testing frozen
samples and billing insurance providers for the tests on
frozen samples, even if many months had passed since the
ninety-nine counts of health care fraud charged in the
indictment, thirty-six involved claims submitted to Medicaid
and/or Medicare, fifteen stemmed from claims submitted to
Bluegrass Family Health, and forty-eight resulted from claims
submitted to Anthem BlueCross BlueShield. After two and a
half weeks of trial, the jury acquitted all five defendants
of the conspiracy charge and of eighty-two of the ninety-nine
counts of health care fraud. The jury only convicted Dr.
Bertram, Mr. Bottom, Dr. Peavler, Mr. Walters, and Dr. Wood
of seventeen counts of knowingly and willingly executing a
scheme to defraud a health care benefit program in violation
of 18 U.S.C. § 1347. All seventeen counts of conviction
were derived from the forty-eight total counts relating to
and after trial, all five Defendants filed various motions
for acquittal under Federal Rule of Criminal Procedure 29 and
for a new trial pursuant to Federal Rule of Criminal
Procedure 33, asserting claims of insufficient evidence,
insufficient weight of evidence, reversible legal error, and
improper criminalization of opinions of medical necessity,
among others. [R. 267; R. 270; R. 300; R. 301; R. 302; R.
303; R. 304; R. 305; R. 306.] This Court denied these
motions. [R. 350.] On December 11, 2017, Dr. Bertram was
sentenced to twenty-one months imprisonment [R. 385], Mr.
Bottom was sentenced to thirteen months imprisonment [R.
387], Dr. Peavler was sentenced to eighteen months
imprisonment [R. 389], Mr. Walters was sentenced to eighteen
months imprisonment [R. 391], and Dr. Wood was sentenced to
twenty-one months imprisonment [R. 393]. All filed notices of
appeal. [R. 394; R. 395; R. 398; R. 401; R. 402.]
Defendant now requests release pending appeal pursuant to 18
U.S.C. § 3143(b)(1), citing substantial questions of
law. Mr. Bottom and Mr. Walters filed a joint motion,
claiming the Sixth Circuit would likely find an absence of
evidence for conviction, error as to the enhancements applied
at sentencing, and error as to the loss amount determined at
sentencing. [R. 422 at 8-16.] Dr. Wood also asserted an
absence of evidence as a substantial question, but also
raised issue with the representation of “medical
necessity, ” asserting a substantial question as to
whether he could be convicted when qualified medical experts
disagree as to what was “medically necessary.”
[R. 423-1 at 3-13.] Dr. Bertram adopts the arguments
presented by Mr. Bottom, Mr. Walters, and Dr. Wood,
reiterating questions as to sufficient evidence and
conviction when experts disagree as to medical necessity. [R.
436 at 6-7.] Dr. Peavler also adopts these arguments. [R.
427-1.] Alternatively, Dr. Wood requests this Court delay
their report date until the Sixth Circuit issues a decision
in United States v. Paulus, No. 0:15-cr-00015-DLB,
2017 WL 908409 (E.D. Ky. March 7, 2017). [R. 423-1 at 13.]
from the issues related to sentencing, Defendants raise
essentially the same claims as their post-conviction motions,
with the added concern that this Court erred in denying those
motions. First, Defendants maintain that the Government did
not present sufficient evidence to result in a conviction,
and next, that medical necessity is a matter of opinion that
cannot be relied upon to determine criminal culpability for
fraud. The Court has already addressed these issues in a
previous order. [R. 350.] However, the Defendants ask this
Court to grant release pending appeal because a favorable
Sixth Circuit decision would result in reversal or a reduced
Bail Reform Act, 18 U.S.C. § 3143(b), creates a
presumption against release pending appeal. United States
v. Vance, 851 F.2d 166, 168 (6th Cir. 1988), cert.
denied, 488 U.S. 893 (1988). In order to be released
pending appeal, a defendant must establish two things: first,
he must show, by clear and convincing evidence, that he is
not likely to flee or pose a danger to the safety of another
person or the community; and second, that the appeal is not
for delay and raises a substantial question of law or fact
likely to result in reversal, an order for new trial, a
sentence that does not include a term of imprisonment, or a
reduced sentence to a term of imprisonment less than the
total of the time already served plus the expected duration
of the appeal process. 18 U.S.C. § 3143(b); United
States v. Chilingirian, 280 F.3d 704, 709 (6th Cir.
2002); Vance, 851 F.2d at 167 (noting that defendant
bears the burden of overcoming statutory presumption of
detention). The United States concedes that the Defendants
are neither dangers to the community nor flight risk,
satisfying the first part of the § 3143(b) test. [R. 432
at 2, n. 1.] Furthermore, the United States does not argue
that the Defendants' appeal is for purposes of delay.
Thus, the Court will focus on whether the appeal raises a
substantial question of law or fact.
determining whether a question on appeal raises “a
substantial question of law or fact, ” a Court does not
need to find that it committed reversible error. United
States v. Pollard, 778 F.2d 1177, 1181 (6th Cir. 1985).
To determine whether the question is, in fact, substantial,
“a judge must essentially evaluate the difficulty of
the question he previously decided.” United States
v. Sutherlin, 84 F. App'x 630, 631 (6th Cir. 2003)
(quoting United States v. Shoffner, 791 F.2d 586,
589 (7th Cir. 1986)). It must be a “close
question” that can “go either ...