The case at issue revolves around the events of 2001 when two defendants, Celestine Okwilagwe and Loveth Isidaehomen, being a husband and wife, set up a business to provide home care for older adults. Their organization was named Elder Care Home Health Services, LLC and was in demand in the healthcare market. The reason for the initiation of the criminal case was the disclosure of the fact that the founders used the name of the dummy on whom their company was registered. This person was Gloria Ogabi, a mutual acquaintance of Isidaehomen and Okwilagwe, and her name was used in all official documents of the organization.
Subsequently, in 2007, Ogabi asked the founders of the business to exclude her from the firm and remove any references in official documents. Nevertheless, the actual founders of the organization did not attempt to satisfy her demands, which was the first reason for going to court. As a result, despite the agreement among the parties, Isidaehomen and Okwilagwe did not fulfill their obligations, which led to legal action by Ogabi against Elder Care Home Health Services, LLC.
During the trial, the name of a third party to the business was revealed, Paul Emordi, who was also represented as a defendant. Based on the decision by the Texas Department of Health and Human Services Office of Inspector General, an order was issued that prohibited all healthcare activities related to federal projects for Emordi and Okwilagwe. An additional reason for this was the revelation of the fact that during its tenure and prior to the ban, Elder Care Home Health Services, LLC received approximately $3.5 million under the national healthcare Medicaid and Medicare programs. This amount was regarded as a particularly large fraud, which entailed accompanying checks on the organization’s work. Thus, the fraudulent scheme with a dummy manager served as an impetus for a detailed analysis of the financial transactions of the firm.
Despite the ban, Okwilagwe continued his management activities without removing Ogabi’s name from the organization’s records. Subsequent investigations revealed the name of a fourth member of the fraudulent scheme, Adetutu Etti, who served as director of medical services. According to her testimony, the expelled practitioners did not work in the organization. Nevertheless, the investigation revealed that this claim was false, and the aforementioned individuals continued to manage Elder Care Home Health Services, LLC, thereby violating the court’s decision. In addition, no action was taken to justify the illicit proceeds, and all reports submitted to the FBI and supervisory authorities were found to be false. Thus, fraud with documentation and material payments received as a result of the violations of business registration became the reason for bringing the aforementioned parties to justice.
The key legal issues associated with the case in question were fraud related to receiving financial payments from federal healthcare programs and false statements by the defendants. The statements of claim related to these two points, but they were not filed simultaneously due to the step-by-step disclosure of violations. The payments received under Medicaid and Medicare insurance programs were significant losses to the federal budget.
Healthcare financial fraud is a violation in which a healthcare professional intentionally and willfully engages in fraudulent activities aimed at increasing profits, personal credibility, or other benefits. This rule of law falls under 18 US Code Title 18, §1347 and §1349 in Count 1. False statements are concealments or misrepresentations of facts aimed at obtaining material or other forms of profit. This rule of law falls under the same 18 US Code Title 18 under and §1350.
As a result of the proceedings, it was proven that Gloria Ogabi’s name was deliberately used by Elder Care Home Health Services, LLC to hide the true business managers. According to the plaintiff, Okwilagwe and his associates received financial benefits under the federal health insurance programs. Despite the defendants’ assertions that the suspended persons did not work in the organization, the court proved the opposite. The false statements presented to the supervisory authorities, the court, and the FBI became the basis for bringing the defendants to justice and suspending the firm’s work due to the disclosed facts of fraud.
The economic damage caused to the federal budget as a result of the defendants’ fraudulent activities was proven by the court. The false statements on the part of the defendants were also recognized as such, and the plaintiff’s claims were satisfied. All defendants were found guilty on the basis of existing legislation and the aforementioned charges. The appeals filed by Emordi and Okwilagwe were rejected by the court, although they did not complain about their sentencing. The conspiracy of the four accomplices was proven, although none of them pleaded guilty.
Based on the court’s conclusion, all four defendants in the criminal case received prison terms. Okwilagwe, who was considered the main one in the entire criminal scheme, received a sentence of 188 months in custody. In addition, the decision was made to order the return of more than $3.5 million to federal health insurance programs. Etti was sentenced to 85 months in prison, and for Isidaehomen and Emordi, the sentences were 97 months and 60 months, respectively. All defendants expressed their disagreement with the sentences handed down; however, the court dismissed their appeals and upheld the decision.
United States of America and State of Indiana ex rel. Thomas P. Fischer v Community Health Network Inc. et al.
S.D. Ind. (2020)
The events that gave rise to the initiation of the legal proceedings under consideration took place between 2012 and 2015. Thomas P. Fischer acted as a plaintiff, who later also was marked as a relator. He was the Chief Financial Officer of Community Health Network, or CHN, and his complaints were against his own company. Fischer’s lawsuit was based on his belief that CHN was guilty of the monetary losses the organization suffered.
In particular, the relator was convinced that CHN conducted fraudulent activities in the healthcare environment and made false statements, which were reasons for a trial. CHN, as a non-profit organization, was obliged to report to the court for the allegations. Given the wide range of staff and the scale of work in its field, the potential damage from the company’s fraudulent activities could be significant. In addition, in his complaint, Fischer noted the violations committed by CHN in relation to the False Claims Act on anti-retaliation provisions, which prompted him to file a First Amended Complaint. These were his main claims against his company, which were based on the attached facts of violations.
Based on the complaints filed, eight violations by CHN were identified and determined as the arguments for initiating legal proceedings. They became key in the claims, but not all of them were assessed by the court as worthy of discussion. In 2019, based on a preliminary assessment of the case, a Notice of Election to Intervene was initiated by the government as a program that identified violations as merit indictment and those that should not be tied to proceedings. This was due to the fact that some of the plaintiff’s accusations were personal in nature and could not be assessed as an objective background for drawing up a guilty verdict. As a result, after discussing all the conventions, the court singled out two types of violations: the violations of the Stark Law and fraud carried out in the healthcare sector, which were subject to punishment.
In 2020, Fischer made the decision to File the Motion for Leave to obtain permission to File a Second Amended Complaint. This practice is unconventional, which is why the relator took this step rather than submitting a direct application. His decision was caused by the fact that after reviewing the filed claim and assessing the violations, the government excluded some of the aforementioned points from the initial claim. As a result, according to the relator, re-filing a complaint was mandatory to establish clear claims. CHN representatives were against this step and did not want to take part in the new hearings. They argued their position by the fact that the complaint was filed with a significant delay, and the amendments were unfounded. The futility of the allegations was also brought up for consideration. Based on the facts proposed, the court had to determine whether the plaintiff’s statements were objective and whether he could count on the approval of the Motion for Leave.
The main legal issue of the case was the justification for the plaintiff to File the Motion for Leave. The Motion for Leave is a special requirement that is designed to ask to file an application that is incommensurate with current regulations or is contrary to specific laws. The court is to consider this application and pass a verdict on its legality with the subsequent acceptance or rejection of the Motion for Leave.
According to the Federal Rules of Civic Procedure, under Rule 15(a), one party’s Motion for Leave may be granted if the appropriate procedures are followed. If there are no initial court decisions that contradict the filing of the application, such a party’s right should be taken into account. Any changes are made with the permission of the judicial authority engaged in the proceedings and involve the participation of both plaintiffs and defendants.
Based on the arguments of the defendant, namely CHN, the relator’s Motion for Leave could not be accepted due to the delay in filing this appeal and the futility of his amendments. Between the initial complaint and the subsequent Motion for Leave, more than six years passed, which was an argument in favor of the rejection of the plaintiff’s claims. Regarding the latter issue, CHN contested government interference in the resolution of the conflict, the statute of limitations, and the False Claims Act’s requirements. However, for the court, these objections were not enough to accept CHN’s objections.
In accordance with the court order, the Motion for Leave to File a Second Amended Complaint was upheld. Consequently, CHN’s objections were dismissed, and the plaintiff was entitled to a re-action. No violation was found in the application procedure, and Rule 15(a) of the Federal Rules of Civic Procedure was taken into account as the main legislative basis. The futility of the plaintiff’s allegations was not proven, which was also an important factor for the court in making the decision.
There was no financial or another form of recovery from the defendant because the main issue of the case was an opportunity to File a Second Amended Complaint. The plaintiff was given the possibility of doing so within ten days of the entry of the court’s order into force. Fischer also had to notify CHN of the granted Motion for Leave within fourteen days of the entry of the court’s order into force.
United States ex Rel. Fischer v. Community Health Network, Inc., no. 1: 14-cv-01215-RLY-DLP (S.D. Ind. 2020).
United States v. Emordi, 959 F.3d 644 (5th Cir. 2020).