United States District Court, D. South Carolina, Florence Division
Bryan Harwell United States District Judge.
matter is before the Court on Defendants' Joint Motion to
Dismiss the Indictment. See ECF No. 90-1. The
Government filed a response in opposition, see ECF
No. 101, and on July 23, 2018, the Court held a hearing on
the matter. See ECF Nos. 116 &
The Court denies the motion for the reasons herein.
November 28, 2017, a federal grand jury indicted Defendants
with one count of conspiracy to defraud a health care benefit
program, in violation of 18 U.S.C. §§ 1347 and
1349. See ECF No. 2. The indictment generally
alleges, inter alia, that Defendants were
chiropractors who defrauded Blue Cross Blue Shield of S.C. by
implementing a financial plan whereby patients would exhaust
their health coverage policy limits regardless of medical
necessity, “resulting in excessive billing” to
BCBSSC. See Id. The indictment generally alleges
Defendants' employees were instructed to bill for time
and procedures written on patients' “travel
cards” regardless of whether the services were rendered
or not or whether the time spent was accurate or not. The
indictment further alleges that from 2012 to 2016,
“[a]t least 20% of those billings were
fraudulent.” Id. at p. 3. Before indicting
Defendants, the grand jury heard the testimony of FBI Special
Agent Neil Power, who testified about Defendants' billing
practices and his interviews with Defendants' former
employees and patients.
move to dismiss the indictment, asserting “[t]he
Government, through the testimony of S/A Power, made
recklessly inaccurate representations to the grand jury
during the indictment presentation.” ECF No. 90-1 at
pp. 5-14. Defendants further assert, “The integrity of
the witness summaries themselves is questionable. See
Id. at pp. 15-16. Defendants request that the Court
dismiss the indictment with prejudice. See Id. at p.
22. The Government opposes Defendants' motion and contend
Defendants “fail to consider the entirety of SA
Power's testimony and the context it provided.”
See ECF No. 101.
district court can exercise its supervisory authority to
dismiss an indictment for errors in grand jury proceedings
only where an irregularity prejudicing the defendant has been
shown.” United States v. Brewer, 1 F.3d 1430,
1433 (4th Cir. 1993) (citing Bank of Nova Scotia v.
United States, 487 U.S. 250, 254 (1988)). The alleged
irregularities in the grand jury proceedings are Powers'
purported misrepresentations of (a) witness statements
regarding the method of Defendants' billing, (b) the
content of billing records, (c) witness statements regarding
the type of services received, and (d) the financial plans
used by Defendants; and as noted above, Defendants also
question the “integrity of the witness summaries
themselves.” See ECF No. 90-1 at pp. 5-16.
Specifically, Defendants challenge Power's use of the
absolute terms such as “every” and
“all” in his testimony, assert these were
reckless/inaccurate representations, and contend independent
evidence (including billing records and interview summaries
of several witnesses) does not support such testimony.
See Id. at pp. 5-11. Defendants further assert Power
provided the grand jury with factually erroneous information
concerning the billing codes for treatments and withheld
exculpatory information from the grand jury. See Id.
at pp. 12-14.
defendant is entitled to dismissal of an indictment only
where actual prejudice is established. In circumstances such
as those presently before [the Court] that prejudice must
amount either to proof that the grand jury's decision to
indict was substantially influenced, or that there is
‘grave doubt' that the decision to indict was
substantially influenced, by testimony which was
inappropriately before it.” United States v.
Feurtado, 191 F.3d 420, 424 (4th Cir. 1999) (quoting
Bank of Nova Scotia, 487 U.S. at 256); see also
Bank of Nova Scotia, 487 U.S. at 263 (“The
prejudicial inquiry must focus on whether any violations had
an effect on the grand jury's decision to
indict.”); United States v. Mills, 995 F.2d
480, 487 (4th Cir. 1993) (discussing Bank of Nova
the Court concludes Defendants have not shown any actual
prejudice. Although Power initially testified in general
terms about Defendants' billing practices and used
language such as “every time” and “all the
[employees] we interviewed” when summarizing the facts,
he subsequently resolved any ambiguity when explaining how he
arrived at the percentage listed in the indictment.
Specifically, Power explained the indictment charged 20% in
fraudulent billings and that this “low end”
figure accounted for the varying percentages given by
different witnesses. By giving this explanation, Power
clarified that not all claims were fraudulent, and the
indictment in fact alleges
“100%”-of the billings were fraudulent. Notably,
the Supreme Court in Bank of Nova Scotia rejected a
challenge similar to that made by Defendants (i.e., a
challenge to the agent's summaries to the grand jury):
The District Court found that, to the prejudice of
petitioners, IRS agents gave misleading and inaccurate
summaries to the grand jury just prior to the indictment.
Because the record does not reveal any prosecutorial
misconduct with respect to these summaries, they provide no
ground for dismissing the indictment. The District
Court's finding that the summaries offered by IRS agents
contained evidence that had not been presented to the grand
jury in prior testimony boils down to a challenge to the
reliability or competence of the evidence presented to the
grand jury. We have held that an indictment valid on its face
is not subject to such a challenge. United States v.
Calandra, 414 U.S. 338, 344-345 (1974). To
the extent that a challenge is made to the accuracy of the
summaries, the mere fact that evidence itself is unreliable
is not sufficient to require a dismissal of the
indictment. See Costello v. United
States, 350 U.S. 359, 363 (1956) (holding that a court
may not look behind the indictment to determine if the
evidence upon which it was based is sufficient).
487 U.S. at 260-61 (emphasis added).
as the Government points out, significant other portions of
Power's testimony are not challenged by Defendants and
provided a sufficient basis on which the grand jury could
return an indictment. See ECF No. 101 at pp. 13-15
(summarizing the unchallenged testimony). Finally, the Court
rejects any argument by Defendants that the Government should
have presented exculpatory evidence to the grand jury.
See United States v. Williams, 504 U.S. 36, 52
(1992) (holding the prosecutor does not have “a legal
obligation to present exculpatory evidence” to the
grand jury). In sum, the record does not show that
Power's alleged “recklessly inaccurate
representations” substantially influenced the grand
jury's decision to indict or that there is “grave
doubt” about their decision. See Bank of
Nova Scotia, 487 U.S. at 256.
foregoing reasons, the Court DENIES
Defendants'  Joint Motion to Dismiss the Indictment.