United States v. Starks

157 F.3d 833 (11th Cir. 1998)

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Nature of the Case

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Facts

Siegel (D) was the president and the sole shareholder of Future Steps, Inc., a corporation that developed and operated treatment programs for drug addiction. Future Steps contracted with Florida CHS, Inc. to run a chemical dependency unit for pregnant women. Florida CHS promised to pay Future Steps a share of the Hospital's profits from the program. As a Medicaid provider, the Hospital performed medical services for indigent and disabled persons and received payment from the Florida Medicaid program. Before executing the Future Steps-Florida CHS contract, Siegel (D) initialed each page of the agreement. The agreement included a provision forbidding Future Steps from making any payment for patient referrals in violation of the Anti-Kickback Statute. Starks (D) and Henry (D) were community health aides in the employ of the State (HRS). They both worked in a federally-funded project known as 'Project Support.' They advised pregnant women about possible treatment for drug abuse. Starks (D) and Henry (D) learned from their supervisor that they could not accept any outside employment that might pose a conflict of interest with their work and that they were obligated to report any outside employment. Future Steps had difficulty attracting patients. One of Future Steps' salaried 'liaison workers,' Robin Doud-Lacher identified Project Support as a potential source of referrals. Doud-Lacher failed to establish a referral relationship. Siegel (D) suggested to Doud-Lacher that she spend more time at Project Support, give diapers to Project Support, take Project Support workers to lunch, and otherwise build a relationship with Project Support's employees. Doud-Lacher learned from Starks (D) and Henry (D) that cuts in federal spending threatened to reduce their work hours. Doud-Loucher promised to inquire about jobs for them at Future Steps. Siegel (D) told Doud-Loucher that he would pay them $250 for each patient they referred. They accepted the deal and did not report their referral arrangement to anyone at Project Support or HRS. Between June 1992 and January 1993, Future Steps wrote checks payable to Starks (D) totaling $2,750 and to Henry (D) totaling $1,975. Project Support first paid in checks under false billing codes but eventually, Siegel (D) paid them in cash. Several of Future Steps' clients testified that Starks (D) and Henry (D) threatened that HRS would take away their babies if they did not receive treatment for their drug addictions; in some instances, they threatened women with the loss of their babies if they did not go specifically to Future Steps. From their referrals, the Hospital received $323,023.04 in Medicaid payments. A federal grand jury indicted Ds and Doud-Lacher on five counts related to the referrals. The jury returned guilty verdicts as to all Ds on all five counts. On appeal Starks (D) and Siegel (D) claim that the district court committed reversible error when it refused to instruct the jury that, because of the Anti-Kickback statute's mens rea requirement, Ds had to have known that their referral arrangement violated the Anti-Kickback statute in order to be convicted and that the statute was unconstitutionally vague.