Articles Posted in White Collar Criminal Defense

Prosecutors and investigators for the United States Department of Justice and the State of New York announced last week an indictment on federal health care fraud charges on a licensed pharmacist and business owner in New York. The basic allegations are that the pharmacy owner paid off customers (in other words, provided kickbacks) to fill fake prescriptions at his pharmacy. The pharmacy would then bill the prescriptions to Medicaid and Medicare. However, the government alleges that either prescriptions drugs were never actually given to the customers or that drugs of lesser value were given, and that it was a scheme to fraudulently get reimbursed by Medicaid and Medicare.

What is a kickback under federal law?

The prescription fraud lawyers at the Barone Defense Firm have provided a detailed discussion about the Federal Anti-Kickbacks Statute previously.  The statute refers to a kickback payment as “remuneration.” Remuneration basically means cash or anything else in value. For example, in this case, the government alleges that the pharmacy owner gave customers coupons valued up to $5,000.00 in exchange for customers submitting fraudulent prescriptions.

Once you have been arrested on a Federal Complaint and Warrant, the government must hold a preliminary exam with 14-21 days unless you consent, and good cause is shown. Otherwise, the rules require that you be released. However, you can only be held on a complaint. You cannot be prosecuted further on a complaint and warrant.  To prosecute you further, the government must either file an information or obtain an indictment.

To better understand this, it is helpful to consider that when the government believes that you have committed a felony over which the federal courts have jurisdiction, the prosecution for this crime may be initiated by the government in one of three ways. The most common of the three is the criminal indictment. However, in certain circumstances, the government may determine that there is a need to forgo the grand jury and instead will prepare and file a complaint. This procedure is governed by Rules 3-5.1 of the Federal Rules of Criminal Procedure.

A compliant, and the necessary probable cause to support it, may be based in whole or in part on hearsay. According to Rule 3 of the Federal Rules of Criminal Procedure, a complaint must contain the essential facts of the crime alleged, and must be presented to a magistrate judge, under oath. Rule 4 of the Federal Rules of Criminal Procedure provides that, in reviewing the warrant and deciding whether to issue an arrest warrant, the magistrate judge must determine whether the complaint establishes probable cause to believe 2 things; first that the crime alleged has been committed and that second that the defendant committed it.

US News and World Report has once again included the Barone Defense Firm as among the region’s Best Law Firms for DUI/DWI Defense. The Firm has been so listed since 2010.

US News and World Report ranks lawyers based on a variety of criteria. While the award is granted by the publication, it is essentially based on peer review. For a law firm to be ranked by US News and World Report a lawyer in the subject firm must first be among those lawyers who have previously received a “Best Lawyers” award by US News and World Report. These lawyers have passed peer review, meaning that other lawyers in the region, or nationally if applicable, have indicated that the lawyer possesses sufficient subject matter expertise, is known to possess and execute a high level of responsiveness to the rigors and demands of the profession, including things such as decorum with the courts, timely filing of pleadings and papers, responding to clients and opposing counsel, and many other professional demands. Peers are also asked whether they would refer a matter to a firm and whether they consider a firm a worthy competitor. On this basis, the Barone Defense Firm has a tier one regional ranking for the area of DUI/DWI.

For more than 20 years the Barone Defense Firm has developed its pristine reputation for DUI/DWI defense and distinguished itself among its peers for excellence in this challenging area of criminal law. However, for the later portion of the past 20-year period the Barone Defense Firm has expanded its practice to include other areas of criminal defense at both the State and Federal level and has developed expertise in such disparate areas as firearms law, criminal sexual conduct including the possession manufacture and distribution of child pornography (at the Federal level) and CSAM (child sexually abuse material) and other CSC cases at the state level, and many areas of white collar criminal including health care fraud, prescription fraud, complex financial crimes and RICO.

Dealing with any criminal charge can be a daunting task. This is especially true when facing Federal criminal charges because most people feel more frightened and intimidated when the criminal charges are brought in the Federal courts as opposed to the State courts.  If you are facing Federal charges you may wonder why you are not in State court. Or, in the worst-case scenario, you may wonder why you are being prosecuted in both courts. There are many reasons for this decision, and these are discussed below.

Being Prosecuted in Both State and Federal Court

To begin with, all courts handling criminal cases are in either the Federal or the State court system, but the criminal cases they are empowered to hear, also called their “jurisdiction” differs significantly. Federal court judges have the power to preside over matters involving the U.S. Constitution and over all Federal Laws, which are those passed by the U.S. Congress. State court judges are empowered to preside over cases involving the State Constitution, and over all State laws, meaning those passed by a State or Municipal governing body. State courts can therefore preside over traffic tickets and state misdemeanor and felony cases. The court of primary jurisdiction in the Federal system is called the “district court” whereas the court of primary jurisdiction in the State system is the circuit court.  In the State system, the district court is a lower court, below the circuit court, and is the place all state criminal charges begin.  State felonies must be handled in the circuit court however.

The Barone Defense Firm is pleased to announce that Patrick Barone, the Firm’s founding member, has been admitted to practice before the Federal District Court for the Western District of Michigan. Mr. Barone has been admitted to practice before the Federal District Court for the Eastern District since 1993.

Mr. Barone was admitted to the State Bar of Michigan in 1991. He was admitted to the State Bar of Illinois in 1993.  However, being admitted to the state bar in one or more states does not authorize a lawyer to practice before any Federal Court.  This is because the rules applicable to Federal Courts differ from State Courts in several ways.  First, simply being admitted to a state bar is necessary but insufficient. Admission before a specific Federal Court requires that the attorney seeking admission prepare a petition to be filed with the Federal Court.  This petition must be supported by a sponsoring attorney who vouches for the attorney seeking admission.  The sponsoring attorney must already be a member of Federal Court where the petitioning lawyer is seeking admission.

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Federal Criminal Defense Team

The Payroll Protection Program was included in the CARES Act to provide small businesses with funds to pay employees when the Covid-19 pandemic hit. Like almost any government assistance program in history, there have been instances of fraud related to PPP loans. The Department of Justice and Office of The United States Attorneys have been on the lookout for businesses and people who fraudulently obtained PPP funds. If you have been contacted by law enforcement about your PPP funds, do not make any statements to law enforcement and call an experienced Federal Fraud Lawyer at the Barone Defense Firm immediately.

What are the qualifications to be eligible for the PPP?

The first requirement to be eligible for the PPP is that the business must be a small business as defined by the U.S. Small Business Administration (SBA). Your business must not have more than 500 employees or must meet the size standards set by the SBA. The SBA sets size standards in terms of revenue dollars and number of employees. For example, if you own a brewery, you’re considered a small business by the SBA if you have 1,250 employees or less

In 2013, owners and employees of Kentwood Pharmacy were indicted on federal conspiracy charges. The indictment alleged that Kentwood sold prescription drugs to customers, recaptured unused drugs, then re-sold the drugs to others. For obvious reasons, the re-sale of prescription drugs is illegal under federal law. Because this case involved federal law, this case was handled by the United States Attorney’s Office and filed in the United States District Court for the Western District of Michigan. This court is tough on these cases, and this showed in the way this case was handled. The team of federal criminal defense lawyers at the Barone Defense Firm are very familiar with this court and know firsthand how difficult and specialized these cases are to properly defend.

For example, one of the laws used to charge Kentwood Pharmacy in this case was set out under the Federal Food, Drug, and Cosmetic Act (FDCA). This law says that a drug is misbranded if its label is false or misleading in any way (21 U.S.C. §§ 301). Each prescription bottle should have a label that lists, among other things, its lot number. This lot number is a way to trace the manufacturing history of the drug. That way, if there are any issues with the drug, the lot number on the label can be used to investigate how the issue occurred. If a drug is mislabeled, then it would make it difficult or impossible to understand the manufacturing history and cause of the problem of the drug.

In this case, Kentwood had adult foster care homes and nursing homes as customers. Kentwood sold prescription drugs to these customers. Kentwood then directed employees pick up previously dispensed, unused drugs from these customers. Kentwood would then repackage these drugs and resell them, as if new. This resulted in drugs going into containers that had lot numbers and expiration dates that did not match. Sometimes, the containers that the old drugs were placed in contained no lot numbers. This practice also resulted in Medicare and Medicaid being billed more than once for the same drug.

Doctor Roger D. Beyer recently pleaded guilty to conspiracy to commit healthcare fraud in the United States District Court for the Western District of Michigan. In a complaint filed on May 8, 2020, the US Attorney assigned to the case set out several allegations.

Regarding healthcare fraud, the complaint alleged that Dr. Beyer’s office improperly coded procedures reported to Medicare. The complaint alleged that Dr. Beyer directed his staff to perform a rectal diagnostic procedure repeatedly, beyond the initial diagnostic purpose of the procedure. Dr. Beyer’s offices then continuously billed Medicare for the diagnostic service even though they weren’t medically necessary. By continuously performing the diagnostic service, Dr. Beyer’s office could bill Medicare each time for that service even though it wasn’t medically necessary.

What are CPT codes?

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