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Court Must Allow Evidence of Scheme in Healthcare Fraud Case

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By Casey C. Sullivan, Esq. on May 14, 2015 3:57 PM

Medieval scholars, or fans of A Confederacy of Dunces, may be familiar with the concept of the rota Fortunae, the wheel of fortune which raises men up to prosperity and rapidly back down again, over and over. Amir Bajoghli should be familiar with the concept, in experience if not in name. A dermatologist, Bajoghli allegedly made millions off healthcare benefit programs -- the wheel spins up towards fortune! -- only to be indicted for fraud -- and down again!

Fate's wheel brought him back to good fortune when a sympathetic judge allowed his motions to exclude much of the evidence against him, two days before trial. It spun back down again this week, when the Fourth Circuit ruled that those exclusions unduly restricted the government's "latitude reasonably necessary" to meet its burden of proof.

The Alleged Fraud

Bajoghli was accused of healthcare fraud for falsely diagnosing patients with skin cancer then performing medically unnecessary, but highly lucrative, surgeries on benign tissue. He was also accused of billing for procedures he never performed.

Before trial, Bajoghli moved to strike as unduly prejudicial certain financial details, evidence of post-scheme conduct, and all evidence not directly related to the 53 instances of fraud. The court granted each motion. Two days before trial, it ruled that all evidence not directly related to specific instances could not be used, greatly undermining the prosecution's ability to show that Bajoghli had been operating a fraudulent scheme and had known he was violating the law.

Healthcare Fraud Requires Evidence of a Scheme

The law requires the government to show not just that Bajoghli made fraudulent billings, but that there was an entire scheme to do so, with intentional and willful conduct. According to the government, evidence about the whole scheme, not just particular instances charged, must be introduced to meet this burden. Under the district court's ruling, that evidence was unduly prejudicial.

That's incorrect, the Fourth held. Since a scheme is an element of the offense, evidence of the entire scheme is relevant to proving each execution. Not all overt acts in a conspiracy or scheme need to be charged in an indictment, the Fourth wrote, nor must each execution of fraud be charged. While the district court has discretion to limit evidence, it must do so in a way that gives the government enough latitude that it can prove its case. That balance wasn't met here, the court found.

It's a fateful turn of luck for the prosecutors, but much less so for Bajoghli who now must go to trial with much more evidence against him.

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