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United States v. Chalhoub

United States District Court, E.D. Kentucky, Southern Division, London

August 1, 2018

ANIS CHALHOUB, M.D., Defendant.


         Following a lengthy healthcare fraud criminal trial, Dr. Chalhoub has filed a Motion for Acquittal [R. 150] and a Motion for New Trial [R. 152]. The Court DENIES both motions. This result is informed by new precedent decided by the Sixth Circuit in United States v. Paulus, 894 F.3d 267, 276 (6th Cir. 2018). Contrary to Dr. Chalhoub's arguments, falsity in the practice of medicine does exist and to hold otherwise would “be an insult to common sense.” Paulus, 894 at 276.


         Dr. Chalhoub was charged in June 2016 with one count of health care fraud pursuant to 18 U.S.C. § 1347. [R. 1.] According to the indictment, from March 2007 until July 13, 2011, Chalhoub executed a scheme to defraud health care benefit programs. See id.

         Over the course of the trial, the Government presented evidence seeking to prove that Chalhoub “implanted single chamber and dual chamber permanent pacemakers in patients without sufficient medical need or justification.” [R. 1 at 3.] They called several cardiologists, who either reviewed the Government's files or treated Chalhoub's patients. [R. 161 at 2.] They also called witnesses from Medicare, Medicaid, and several private insurers, who testified on medical necessity as “an absolute precondition to payment.” [R. 161 at 3.] Further, twelve of Chalhoub's former patients testified about their experiences as Chalhoub's patients. [R. 161 at 4.] The jury found Dr. Chalhoub guilty of the one count indictment. [R. 134.]

         Following the jury's verdict, the Defendant filed post-trial motions for a judgment of acquittal pursuant to Rule 29 and a motion for a new trial pursuant to Federal Rule of Criminal Procedure 33. After considering the Defendant's arguments and the evidence presented during trial, the Court upholds the jury's verdict and denies the requests for post-trial relief.



         At the conclusion of the Government's case, the Defendant moved for acquittal and now, following the verdict, he has supplemented his motions in support of acquittal pursuant to Federal Rule of Criminal Procedure 29. [R. 150.] Rule 29 requires this Court to enter a judgment of acquittal on “any offense for which the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a).

         When considering a Rule 29 motion based on an alleged insufficiency of the evidence, the Court may not reweigh the evidence, reevaluate the credibility of witnesses, or substitute its judgment for that of the jury. See United States v. Callahan, 801 F.3d 606, 616 (6th Cir. 2015). Instead, the Court views all of the evidence in the light most favorable to the Government, and then it considers whether any rational trier of fact could find the elements of the counts of conviction beyond a reasonable doubt. See, e.g., United States v. Vichitvongsa, 819 F.3d 260, 270 (6th Cir. 2016); United States v. Villarce, 323 F.3d 435, 438 (6th Cir. 2003). “In sum, a defendant claiming insufficiency of the evidence bears a very heavy burden.” Callahan, 801 F.3d at 616 (quoting United States v. Jackson, 473 F.3d 660, 669 (6th Cir. 2007)). Because the Defendant has failed to sustain this burden, the Rule 29 motion is properly denied.

         A review of the trial evidence demonstrates that a rational trier of fact could conclude the Defendant was guilty beyond a reasonable doubt of the single healthcare fraud conviction. In order to convict Dr. Chalhoub, the jury was required to find that he “knowingly devised a scheme or artifice to defraud a health-care benefit program in connection with delivery of or payment for health-care benefits, that [he] executed the same, and that [he] did so with an intent to defraud.” United States v. Medlock, 792 F.3d 700, 711 (6th Cir. 2015). “The government need not offer direct evidence; instead, ‘a jury may consider circumstantial evidence and infer intent from evidence of efforts to conceal the unlawful activity, from misrepresentations, from proof of knowledge, and from profits.'” Paulus, 894 at 277 (quoting Persaud, 866 F.3d at 380). The circumstantial evidence presented by the United States sufficiently allowed the jury to reach this conclusion.

         The Defendant brings a variety of arguments, most under the theory that because implanting pacemakers “is an area of medical judgment fraught with diagnostic ambiguity, ” Dr. Chalhoub could not have committed fraud. [R. 150-1 at 17.] These arguments can be addressed together, as the underlying premise, that there was no falsity, has been recently addressed by the Sixth Circuit.

         The Defendant argues that the Government did not provide separate evidence to prove falsity. In fact, Chalhoub suggests, “[t]he records may or may not have documented the medical reasoning supporting the pacemaker procedures to the satisfaction of the government's witnesses, but they weren't false.” [R. 150-1 at 20.] Essentially, he argues that, because his medical documentation was so “thin”, there is not a way for a jury to determine if there was falsity. [R. 150-1 at 21.] Dr. Chalhoub further argues that “criminalizing” “medical judgment” is an “overbroad application of the health care fraud statutes” [R. 150-1 at 26]; that the “plain language” of the healthcare fraud statute does not support the conviction of Dr. Chalhoub [R. 150-1 at 30]; this application of Section 1347 is not consistent with the intent of Congress [R. 150-1 at 34]; the application of Section 1347 readjusts the balance of federal and state powers [R. 150-1 at 35]; the rule of lenity requires rejecting an expansive application of Section 1347 [R. 150-1 at 37]; and the application of Section 1347 violates Dr. Chalhoub's due process rights [R. 150-1 at 38.]

         Many of the above arguments made by the Defendant were based on the reasoning in United States v. Paulus, 2017 U.S. Dist. LEXIS 32097 (E.D. Ky. Mar. 7, 2017). Dr. Paulus was convicted by a jury for healthcare fraud. Subsequently, the District Court judge granted a motion of acquittal. Since Dr. Chalhoub's initial filings for a new trial and for judgement of acquittal, the Sixth Circuit reversed the District Court judge. Paulus, 894 at 276. The Sixth Circuit confirmed in Paulus that upholding a healthcare fraud conviction is appropriate in cases of “diagnostic ambiguity.” Id.

         Though a simple mistake would not result in a fraud conviction, that is not the government's case here. In Paulus, the Government proved that, “Paulus repeatedly and systematically saw one thing on the angiogram and consciously wrote down another, and then used that misinformation to perform and bill unnecessary procedures. The difficulty of interpreting angiograms has no bearing on the capacity of these statements to be false.” Paulus, 894 at 276. Similarly, here, the Government's case is that Dr. Chalhoub saw one thing in his patients but consciously decided to implant a pacemaker when he knew it was not necessary. The difficulty of correlating heart rates and Holter monitors has no bearing on the fact that Dr. Chalhoub committed fraud. In fact, the jury could have concluded that Dr. Chalhoub “was acting in good faith and that the government's experts were ‘unfairly second-guessing his reasonable decisions' and making incorrect assumptions about the medical science.” Paulus, 894 at 276 (quoting Persaud, 866 F.3d at 384).

         The Government provided evidence that there are guidelines according to the American College of Cardiology (ACC) as to when pacemakers should be installed. Dr. John Gurley testified that the ACC Guidelines are “good standards; they're guideposts. We try to practice evidence-based medicine. We try to adhere by the guidelines when we teach our trainees, our Fellows.” [R. 144 at 33; see also Testimony of Doctor Aaron Hesselson, R. 142 at 6; Testimony of Dr. Gery Tomassoni, R. 142 at 7; Testimony of Dr. Oluwole John Abe, R. 140 at 17.] The Government also offered evidence that additional guidelines existed outside of the ACC guidelines. They admitted the Centers for Medicare and Medicaid Services issued National Coverage Determination (NCD) 20.8 for the insertion of pacemakers. Gov. Ex. 1. Dr. Berman explained that the NCD explains “conditions where a pacemaker would be covered and payable in the Medicare population.” [R. 139 at 139.]

         Dr. Chalhoub next argues that no jury could find that he knew that his conduct was unlawful. [R. 150-1 at 21.] However, the Government provided adequate evidence that: (1) medical guidelines exist as to when pacemakers should be installed; (2) Dr. Chalhoub knew of those guidelines; and (3) Dr. Chalhoub did not follow those guidelines. Falsity does exist in this situation, contrary to the Defendant's arguments. Quoting Paulus, “[i]ndeed, it would be an insult to common sense and the practice of medicine to say that [Chalhoub] was not measuring facts (or attempting to do so) when he [installed the pacemakers] at issue here.” Paulus, 894 at 276. Accordingly, the above-referenced arguments are denied as overturned in United States v. Paulus, 894 F.3d 267, 276 (6th Cir. 2018).

         The Defendant argues next that not all the pacemaker evidence presented by the Government demonstrated fraud. He argued that, “[t]he proof established that the pacemakers were appropriate in at least 13 of the 31 procedures. That is to say, the government could not establish a lack of medical necessity for at least 13 of the selected 31 procedures.” [R. 150-1 at 15.] However, the Court does not evaluate Rule 29 motions in this way. The Defendant would have the Court find that, even though there may have been a small number of procedures that were at issue (if not fraudulent), the vast majority were not, and therefore, the small percentage “counters any notions of an intent to defraud.” [R. 150-1 at 15.]

         Turning to the substantive healthcare fraud count, the Government presented adequate proof that Dr. Chalhoub “knowingly devised a scheme or artifice to defraud a health-care benefit program in connection with delivery of or payment for health-care benefits, that [he] executed the same, and that [he] did so with an intent to defraud.” United States v. Medlock, 792 F.3d 700, 711 (6th Cir. 2015). However, this Court finds the Government presented sufficient evidence of Chalhoub's intent and motive to commit healthcare fraud.

         The Government presented evidence that Dr. Chalhoub benefited financially from the unnecessary procedures. [See. Gov. Ex. 18b; R. 147 at 115.] Dr. Chalhoub argues that “very little of [his] income was derived from implanting pacemakers.” [R. 152-1 at 22.] Chalhoub noted that his “average annual reimbursement from pacemaker procedures was roughly $17, 720 during that time period. The government's evidence of Dr. Chalhoub's after tax income during a similar period (2008 to 2013) ranged from a low of $528, 586 to a high of $825, 412 and averaged $622, 103.” [R. 152-1 at 22.] But Dr. Chalhoub provided no authority, and this Court knows of none, that requires criminal activity to be exceptionally lucrative in order to gain a conviction. The jury may or may not have used this as evidence of Dr. Chalhoub's motive to commit fraud, but to use this evidence was not unreasonable and could be circumstantial evidence of his motive to commit a crime.

         The Government also contended at trial that, due to Dr. Chalhoub's fraudulent productivity, he was offered more for his practice when it was bought by St. Joseph. [See Transcript of Carmel Jones, R. 145 at 38 (“Q. I think you told us a moment ago, does that productivity level above that 90th percentile, was that part of your consideration for whether Dr. Chalhoub was an attractive candidate? A. Yes.”).] The jury could have inferred Chalhoub's criminal intent from this as well.

         The Government provided evidence of multiple patients who testified that they were pressured by Dr. Chalhoub to let him install a pacemaker. [See R. 139 at 4; R. 139 at 93.] Patient B.C. testified that Dr. Chalhoub told her she would die, either while “driving and pass out and wreck and get killed, or . . . go to sleep and not wake up.” [Testimony of B.C., R. 139 at 93.] Patient H.C. testified that Dr. Chalhoub told him his pacemaker was not intended to make him feel better, but to “save [his] life.” [Transcript of H.C., R. 143 at 233.] A reasonable jury could have had suspicions as to why a doctor would pressure his patients to have procedures if there was no financial motive.

         The Government also proved that Dr. Chalhoub made false statements, or misrepresentations, in the medical record. Dr. Jones recorded that a patient, K.W., had 10% blockage when Dr. Chalhoub had recorded K.W. had 50-60% blockage. Joint Exhibit 220. Further, the Government showed several instances where Dr. Chalhoub recorded “pauses” ...

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