United States District Court, E.D. Kentucky, Southern Division, London
MEMORANDUM OPINION & ORDER
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.
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.
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.]
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
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).
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.
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.
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.
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
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.
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).
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.]
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.
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.]
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
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
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.
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.
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” ...