Fifth Circuit dismisses appeal from plaintiff convicted of healthcare fraud

By Galia Binder | May 19, 2014

NEW ORLEANS – A federal appeals court has dismissed an appeal filed by a man who was sentenced to 41 months in prison following his conviction on healthcare fraud charges.

The U.S. Court of Appeals for the Fifth Circuit affirmed the District Court for the Northern District of Texas’ in the federal government's case against Hugh Willett. 

Willett represented himself as a co-owner in JS&H Orthopedic, a medical equipment supplier company owned by his wife Jean Willett. In February 2011, a federal grand jury indicted the couple on charges of conspiracy to commit healthcare fraud. Jean Willett pleaded guilty to her charges and in June 2012, Hugh Willett was indicted with a second count of conspiracy.

Companies such as JS&H provide items to patients with prescriptions, submit claims to Medicare and private insurance companies and reimburse suppliers directly for their items based on the claims’ billing codes. The government claimed JS&H billed for more expensive items than it provided, submitted claims for items that had never been provided, forged physicians’ names on letters of medical necessity, and manipulated these letters to reflect the fraudulent items.

The government accused Willett of abusing his position in order to submit faulty claims and silence any employee who confronted him about billing discrepancies. Hugh Willett denied knowing about Jean Willett’s practices and objected to his sentence, which was based on this abuse of trust and position. He appealed, arguing that the verdict made inferences that were not justified with adequate proof and requested a new trial to reconsider a portion of the polygraph evidence.

The Fifth Circuit held that Willett knew about and collaborated in JS&H’s fraudulent activities. Hugh Willett delivered the company’s medical items to hospitals and picked up the tickets showing which items patient had received. He delivered these tickets to Jean Willett and allegedly was often present in her office when she ripped off old codes and wrote in new ones, doctoring tickets to exploit a greater profit. The Fifth Circuit held that Hugh Willett directly benefited from this profit, as he and his wife had equal access to and power over business and personal accounts. Hugh Willett was also responsible for depositing reimburesment checks to the bank and interacting with the company’s accountant, giving him full knowledge of JS&H’s profit margins.

The Fifth Circuit determined Willett occupied a greater position of authority in the company than his testimony indicated, and abused his power by knowingly and improperly administering Medicare and coercing employees into silence. The Fifth Circuit affirmed the district court’s sentencing predicated on Willett’s abuse of trust to facilitate and conceal fraud.

Case no. 13-10425.

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