### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 17

‐ 1714

U NITED S TATES OF A MERICA

, Plaintiff

‐ Appellee

,

v.

J ENETTE G EORGE

, also known as J IYE

, Defendant

‐ Appellant

.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:12

‐ cr

‐ 00559

‐ 7

— Sara L. Ellis

, Judge

.

____________________

A RGUED D ECEMBER 5, 2017

— D ECIDED A UGUST 14, 2018

____________________

Before W OOD

, Chief Judge

, and R OVNER and H AMILTON

,

Circuit Judges

.

R OVNER

, Circuit Judge

. The defendant Jenette George was

charged along with three co

‐ defendants in an indictment al

‐ leging violations related to a Medicare

‐ fraud scheme. The

indictment alleged a scheme whereby George received pay

‐

ments from Rosner Home Health Care, Inc. (“Rosner”), for

each Medicare patient that she referred to it. George was

tried on two counts of receiving kickbacks for Medicare re

‐2 No. 17

‐ 1714

ferrals on April 12, 2012, and May 17, 2012, in violation of 42

U.S.C. § 1320a

‐ 7b(b)(1)(A) of the Anti

‐ Kickback Statute, and

with conspiracy to offer kickbacks beginning on or about

November 2010 to July 2012, in violation of 18 U.S.C. § 371

and 42 U.S.C. § 1320a

‐ 7b(b)(2)(A). Two owners and an em

‐ ployee of Rosner—Ana Tolentino, Frederick Magsino, and

Edgardo “Gary” Hernal—were also indicted on charges of

conspiracy and pled guilty prior to trial.

The district court found her guilty on the conspiracy

count and the counts alleging specific violations of the Anti

‐

Kickback Statute Act after a bench trial, and also denied the

subsequent motion seeking a judgment of acquittal or a new

trial. The court sentenced George to six months of impris

‐

onment with the substitution of imprisonment day for day at

the Salvation Army Community Confinement Center in Chi

‐

cago, Illinois. George now appeals her conviction to this

court, arguing that there was insufficient evidence to sup

‐

port the conviction, that the court erred in failing to limit the

cross

‐ examination of George to matters within her

knowledge as a layperson, and that the court erred in failing

to designate Gary Hernal as a missing witness.

The following facts were found by the court after a

bench trial, and set forth in its Memorandum Opinion and

Order at the conclusion of the trial. Dist. Ct. Mem. Op. and

Order of 3

‐ 22

‐ 16 at 2–6. George worked for a home health

‐

care agency from around 2007, and in 2010 started her own

referral agency the Ttenej Senior Referral Agency, which ap

‐

pears to be a variant of her first name, Jenette, spelled back

‐

wards. George expressed an interest to Gary Hernal, who

worked for Rosner Home Health Care, Inc., in providing

marketing referrals for Rosner. Hernal and George signed aNo. 17

‐ 1714 3

“Work for Hire Agreement” on November 17, 2010. That

agreement provided that Ttenej would organize and prepare

health fairs and visit doctors, hospital case managers, dis

‐ charge planners, or social workers and convince them to re

‐

fer patients to Rosner. The agreement provided for payment

to George in an amount equal to services rendered, and

specified that she would provide an independent referral

service and would not be an employee of Rosner. At one

point in March 2011, George sent an email to Hernal indicat

‐ ing that she was concerned that their arrangement might not

be within the law, but George maintained that Hernal as

‐

sured her at the time that the payments were allowed.

George began referring patients to Rosner and the evi

‐

dence at trial, including George’s own admission, estab

‐

lished that she was paid $500 for each person referred to

Rosner who was subsequently certified for admission. Her

‐

nal began cooperating in an investigation of Rosner, and the

government obtained evidence including recordings made

in the course of that investigation, establishing those refer

‐

rals and the payments made to George—in cash or check—

on a per person basis. In a conversation with Hernal on July

13, 2012, Hernal and George discussed George’s preference

as to payments. Hernal asked her why she preferred pay

‐

ments by check, but George indicated that her referrals

could be all in cash. Hernal and George then discussed the

legality of the payments:

Hernal informed Defendant that two home

health agencies were “busted for exactly what

we’re doing here, you know, getting paid for,

for patients.” Defendant responded, “Right.”

Hernal informed Defendant that paying her4 No. 17

‐ 1714

per patient was illegal and told her to be care

‐

ful. Defendant asked Hernal, “Okay, careful

how?” Defendant asked if she could be put on

payroll, but Hernal said that she could not be

‐

cause she is a contractor. Defendant said that

was sending “mixed signals” because it was il

‐ legal for her to be paid for doing referrals but

for other services people are paid from the

agency. Hernal again reiterated that being paid

per patient is illegal. Defendant responded,

“As long as it’s just between the two parties, it

shouldn’t be no [ sic ] problem.”

(citations omitted) Dist. Ct. Mem. Op. and Order of 3

‐ 22

‐ 16

at 4.

When George was questioned upon her arrest, she initial

‐ ly stated that she received biweekly payments from Rosner

in the amount of $1,000, and that those payments were only

made by check. She further stated that the payments were

not for per

‐ patient referrals and that she knew it was illegal

to be paid per patient for referrals to home health agencies.

After the agent showed George the recordings that had been

made, George acknowledged that she had lied and that she

was paid $500, both by check and in cash, per patient that

enrolled at Rosner. She admitted that when she began re

‐ ceiving payments in cash sometime around November 2011,

she realized that it was illegal to be paid per patient. Bank

records of cash and checks deposited in George’s bank ac

‐

counts, as well as referral logs, corroborated those state

‐

ments.

George first argues that insufficient evidence supported

the convictions. In considering a challenge to the sufficiencyNo. 17

‐ 1714 5

of the evidence, we examine the evidence “’in the light most

favorable to the government, drawing all reasonable infer

‐

ences in the government ʹ s favor.’” United States v. Patel

, 778

F.3d 607, 619 (7th Cir. 2015), quoting United States v. Lee, 558

F.3d 638, 641 (7th Cir. 2009). We will uphold the conviction

unless, after thus viewing the evidence in favor of the gov

‐

ernment, no rational trier of fact could have found the essen

‐

tial elements of the offense beyond a reasonable doubt. Id .;

Jackson v. Virginia

, 443 U.S. 307, 319 (1979). The factual find

‐ ings by the district court are sufficient to support the convic

‐

tions in this case.

Under the Anti

‐ Kickback Statute, the government had to

demonstrate that George knowingly and willfully solicited

or received any remuneration in return for referring an indi

‐

vidual to Rosner to provide services or arrange services, and

that those services may be paid at least in part under Medi

‐

care. See 42 U.S.C. § 1320a

‐ 7b(b)(1)(A). George argues that

the government failed to present sufficient evidence as to the

conspiracy count as well as the individual substantive

counts under that Anti

‐ Kickback Statute.

As to the conspiracy conviction, George argues that re

‐ gardless of the legality of her referrals, the government

failed to introduce sufficient evidence that she joined the

Rosner conspiracy. Citing two of our cases relating to drug

conspiracy charges, United States v. Townsend

, 924 F.2d 1385,

1394 (7th Cir. 1991) and United States v. Pulgar

, 789 F.3d 807,

811–12 (7th Cir. 2015), she analogizes her actions with re

‐

spect to Rosner as similar to the buyer

‐ seller relationship in

drug deals which we have found insufficient to constitute a

conspiracy. She maintains that her “marketing activities”

failed to place her within the general conspiracy alleged as6 No. 17

‐ 1714

she lacked any stake in the benefits which were billed to

Medicare.

“Proof of conspiracy may come from direct evidence or

circumstantial evidence, United States v. Hightower, 96 F.3d

211, 214 (7th Cir.1996), as well as ‘the reasonable inferences

... concerning the parties ʹ relationships, their overt acts, and

their overall conduct,’ United States v. Miller, 405 F.3d 551,

555 (7th Cir.2005) (quoting United States v. Navarrete, 125

F.3d 559, 562 (7th Cir.1997)).” United States v. Lomax

, 816 F.3d

468, 474 (7th Cir. 2016) (citations in original). A jury could

properly conclude that the direct and circumstantial evi

‐

dence in this case established beyond a reasonable doubt

that George was a participant in the Rosner conspiracy.

George had a written agreement with Rosner, she provided

referrals to Rosner on an ongoing basis, she was paid on a

per

‐ patient basis for those referrals, and her ability to obtain

payments for those referrals was dependent on the success

of the overall scheme. George did not get paid unless the

persons that she referred were admitted or readmitted to

Rosner. She had a stake in the success of the scheme because

the continuation of her business depended on it. The district

court properly held that there was sufficient evidence to

support the conspiracy conviction.

George also asserts that there was insufficient evidence to

support the convictions for violating the Anti

‐ Kickback Stat

‐

ute. As to those convictions, she asserts that she cannot be

held liable because the statute applies only to “relevant deci

‐

sionmakers” or persons in a position to influence the deci

‐

sions, and she was not in that position. She also contends

that she did not act knowingly and willfully, and that she

had a reasonable basis to believe that she fell within the safeNo. 17

‐ 1714 7

harbor provision of the statute. George points to evidence

that could cast doubt on the elements of the offense. In order

to succeed on her claims of insufficiency of the evidence,

however, George must do more than merely demonstrate

that evidence could have supported a finding of innocence;

she must demonstrate that evidence could not have allowed

a reasonable trier of fact to find her guilty. Jackson

, 443 U.S.

at 319; Patel

, 778 F.3d at 619.

George argues that the government failed to prove that

she fell within the terms of the statute. The statute provides

in relevant part:

(b) Illegal remunerations

(1) whoever knowingly and willfully solicits or

receives any remuneration (including any

kickback, bribe, or rebate) directly or indirect

‐ ly, overtly or covertly, in cash or in kind—

(A) in return for referring an individual to a

person for the furnishing or arranging for the

furnishing of any item or service for which

payment may be made in whole or in part un

‐

der a Federal health care program,

...

shall be guilty of a felony

... .

42 U.S.C.A. § 1320a

‐ 7b(b)(1)(A). George’s conduct falls with

‐

in the plain language of that provision. The evidence

demonstrated that she received remuneration for referring

individuals to Rosner for the provision of home health ser

‐

vices that would be covered under Medicare.

George, however, argues that the statute is limited in its

application to persons who are the “relevant decisionmak

‐8 No. 17

‐ 1714

ers” or who are at least persons in a similar position as the

relevant decisionmaker. She asserts that she did not fall

within that definition because the persons she referred had

to be certified by a physician before they could be admitted

to Rosner, and that she did not attempt to influence the doc

‐

tors who certified the patients she referred. She relies for that

argument on the Fifth Circuit’s decision in United States v.

Miles

, 360 F.3d 472 (5th Cir. 2004), in which the court held

that payments to a marketing firm which distributed adver

‐

tisement brochures of the home health service provider to

physicians did not fall within the statute because they were

not payments made to the relevant decisionmaker as a kick

‐

back for sending patients to the service provider.

The Fifth Circuit in a subsequent case, however, explicit

‐ ly rejected a reading of Miles which would limit criminal lia

‐ bility to persons who could be deemed “relevant deci

‐

sionmakers:”

The district court

... read United States v. Miles,

360 F.3d 472 (5th Cir. 2004), to limit drastically

the meaning of “any person,” such that liability

cannot attach unless the “person” who receives

remuneration is a “relevant decisionmaker”

with formal authority to effect the desired re

‐

ferral or recommendation.

... But as explained

below, Miles imposed no such limitation on the

meaning of “any person” and is wholly inap

‐ plicable to this case.

... , Miles drew a distinc

‐

tion not between types of payees —“relevant de

‐

cisionmakers” and others—but between a pay

‐

er ʹ s intent to induce “referrals,” which is ille

‐No. 17

‐ 1714 9

gal, and the intent to compensate advertisers,

which is permissible.

United States v. Shoemaker

, 746 F.3d 614, 627–28 (5th Cir.

2014). The court held in Shoemaker that intent, and speci fi cal

‐ ly whether the evidence demonstrated an intent to induce

referrals, was the focus of the inquiry in Miles

, and that such

a focus accords with Congress’ concerns in the statute with

imposing liability on operatives who “leverage fl uid, infor

‐

mal power and in fl uence.” Id

. at 629–30. Therefore, Miles

cannot be read in the manner that George suggests, and in

fact George’s conduct falls squarely within the statute as in

‐ terpreted by those cases in that her conduct represented an

intent to induce referrals to Rosner.

Our case law is consistent with that interpretation of the

statute as well. For instance, in United States v. Polin

, 194 F.3d

863 (7th Cir. 1999), we upheld a conviction in a factually

analogous case in which payments were made to a pace

‐

maker sales representative for each Medicare patient that he

referred to the Center for Vascular Studies for pacemaker

monitoring services. The defendants were the ones who paid

the pacemaker representative, and they argued that the rep

‐

resentative could not make a referral under the statute be

‐

cause only a physician is capable of making a referral, rea

‐ soning that the physician’s—not the sales representative’s—

permission was needed for services. Id

. at 865. We held that

the conduct in that case was a classic case of an illegal kick

‐

back under the statute. Id

. at 867. Although in Polin the de

‐

fendants were the ones paying for the referral rather than

making the referral and therefore convicted under subsec

‐

tion (b)(2)(A) rather than (b)(1)(A) of § 1320a

‐ 7b, there is no

basis whatsoever for de fi ning the term “referral” di ff erently10 No. 17

‐ 1714

in the two sub

‐ provisions. As in Polin

, payments were made

in this case to refer a Medicare patient to a service provider,

and such conduct is prohibited under the plain language of

the statute. See also Patel

, 778 F.3d at 618 (holding that the

concept of “referring” under the statute is broad and in

‐

cludes conduct in which the defendant directed a person to a

particular provider or even where a physician through recer

‐

ti fi cation allowed a patient to receive care from that provider

and was paid in return for those e ff orts). The district court

did not err in determining that the actions in this case fell

within the statute.

George also asserts that there was insufficient evidence

that she acted knowingly and willfully under the statute, but

this claim cannot withstand scrutiny. Her own words are

sufficient to demonstrate that she acted knowingly or will

‐ fully. In her interview upon her arrest, George first stated

that she received only biweekly payments of $1,000 from

Rosner—made only by check—and that the payments were

not per

‐ patient. She admitted that she knew that it was ille

‐ gal to be paid per patient for referrals to home health agen

‐

cies. When confronted with the tape recordings demonstrat

‐ ing that her characterization of the payments was a lie, she

acknowledged that she had lied and that she was paid $500,

both by check and in cash, per patient that she referred who

was admitted at Rosner. She had acknowledged that she re

‐

ceived cash payments at least as of November 2011—at other

times indicating it began as early as March 2011—and admit

‐

ted that, when she began receiving payments in cash, she

realized that it was illegal to be paid per patient. That is suf

‐

ficient evidence to establish that she acted knowingly and

willfully in accepting the two payments on April 12, 2012,

and May 17, 2012. Her initial efforts to hide the nature andNo. 17

‐ 1714 11

manner of the payments would alone constitute such evi

‐

dence, but here we also have her outright admission that she

realized the payments were illegal when she began receiving

cash, and the cash payments began at a time period before

the payments that are the basis for the two substantive

charges here.

Although that evidence alone would be enough, other

evidence corroborates those incriminating statements, in

‐ cluding bank records of cash and checks deposited in

George’s bank accounts, as well as referral logs. In addition,

that evidence as to her knowledge and willfulness was fur

‐

ther bolstered by other testimony, including testimony as to

a book she claimed to have read in early 2011 called the Ul

‐

timate Guide to Home Health Marketing which explained the

illegality of referral payments.

George brings a separate challenge as to the govern

‐

ment’s questioning of her regarding this book, arguing that

the district court erred in allowing the government to ques

‐

tion her as to whether she had read certain paragraphs in the

book, but that argument is without merit. First, George ad

‐

mitted the book into evidence in her direct examination, and

testified that in early 2011 after reading the book she devel

‐ oped concerns about how she and Rosner were doing busi

‐

ness and sent an email to Hernal expressing her concerns.

She acknowledged reading enough of the book to have con

‐

cerns about the legality of her arrangement with Rosner, but

denied reading sections that specifically discussed kick

‐

backs. The government on cross

‐ examination first ques

‐

tioned her as to the first page of the first chapter of that

book, which was an article entitled “Marketing Within the

Four Corners of the Law” and quite clearly stated that it was12 No. 17

‐ 1714

unlawful to receive payment for referrals of patients to such

providers. That was a legitimate area of cross

‐ examination

given that George had testified that she read parts of the

book that caused her to question the legality of the pay

‐

ments, and given the location and subject matter of that par

‐ agraph in the book. The subsequent questioning was also

limited to parts of the book that a person would be likely to

read if seeking information as to the legality of the arrange

‐

ment. The district court did not abuse its discretion in allow

‐ ing cross

‐ examination as to the book that George herself

raised in her direct examination and which she introduced

into evidence.

George’s only other challenge to cross

‐ examination is her

claim that the government improperly sought a legal opin

‐

ion from her, a layperson, when it questioned her as to her

knowledge of the illegality of referral payments. George has

no authority for the proposition that a defendant cannot be

asked about her own knowledge or state of mind—a ques

‐

tion which she is uniquely positioned to answer—and which

seeks factual information not a conclusion as to its legal sig

‐

nificance.

Accordingly, the district court properly determined that

sufficient evidence supported all of the elements of the of

‐

fense under the Anti

‐ Kickback Statute, and did not err in its

decision as to cross

‐ examination. George nevertheless con

‐

tends that she established a good faith belief that the safe

harbor provisions of the statute applied.

Once the government establishes the elements of a viola

‐

tion of the Anti

‐ Kickback Statute, the burden shifts to a de

‐

fendant to demonstrate by a preponderance of the evidence

that her conduct fell within the safe harbor provision of theNo. 17

‐ 1714 13

statute. United States v. Jumah

, 493 F.3d 868, 873 (7th Cir.

2007); United States v. Vernon

, 723 F.3d 1234, 1269–71 (11th

Cir. 2013). George argues that two safe harbor provisions are

applicable. The first provides in relevant part that the Anti

‐

Kickback Statute does not apply as to payments made be

‐

tween “a health center entity described under clause (i) or

(ii) of section 1396d(l)(2)(B) of this title” and any individual

or entity providing services to that health center pursuant to

an agreement if that agreement contributes to the ability of

the health center to “maintain or increase the availability, or

enhance the quality, of services provided to a medically un

‐

derserved population served by the health center entity.”

42 U.S.C. § 1320a

‐ 7b(b)(3)(I). The provision applies only to

Federally

‐ qualified health centers as defined in clauses (i) or

(ii) of 42 U.S.C. § 1396d(l)(2)(B), and George presented no

evidence at trial that Rosner was a health center that fell

within that definition. She therefore has failed to meet her

burden to demonstrate that applicability of that safe harbor

provision.

The only other safe harbor provision she asserts applies

only to “any amount paid by an employer to an employee

(who has a bona fide employment relationship with such

employer) for employment in the provision of covered items

or services.” 42 U.S.C. § 1320a

‐ 7b(b)(3)(B). George points to

her written agreement with Rosner, but that agreement spec

‐

ifies that George is acting as an independent referral agency

with respect to employment and not an employee. Moreo

‐

ver, George admitted that she was not an employee and that

she was an independent contractor. In addition, as the dis

‐

trict court pointed out, George was paid for referrals and not

for the provision of items or services covered by Medicare,

as required for that safe harbor provision to apply. The dis

‐14 No. 17

‐ 1714

trict court properly held that George did not establish that

her conduct fell within the safe harbor provisions of the

statute.

George’s final contention is that Hernal should have been

considered a “missing witness” because he was not called by

the government. She argues that the district court erred in

failing to accept her proposed missing witness instruction,

which would have allowed the court to infer from Hernal’s

absence that Hernal would have provided information unfa

‐

vorable to the government’s case. See United States v. Tava

‐

rez

, 626 F.3d 902, 904 (7th Cir. 2010). The missing witness in

‐

struction is disfavored in our circuit but may be given in un

‐

usual circumstances. Id .; United States v, Wright

, 722 F.3d

1064, 1068 (7th Cir. 2013). A defendant seeking such an in

‐

struction must show: “(1) that if called the witness would

have been able to provide relevant, noncumulative testimo

‐

ny on an issue in the case; and (2) that the witness was pecu

‐ liarly in the other party’s power to produce.” Tavarez

, 626

F.3d at 904–05; Wright

, 722 F.3d at 1068–69. “A witness is pe

‐ culiarly within a party’s power to produce if she either (1) is

physically available to only that party; or (2) has such a rela

‐ tionship with one party as to effectively make her unavaila

‐

ble to the opposing party, regardless of actual physical

availability.” Tavarez

, 626 F.3d at 905. The second form of

unavailability thus encompasses both physical unavailability

and what has been termed “pragmatic unavailability.” Unit

‐

ed States v. Villegas

, 655 F.3d 662, 670 (7th Cir. 2011). George

argues that Hernal was unavailable because he cooperated

with the government in his case when he pled to the con

‐ spiracy charge and the government dropped the obstruction

of justice enhancement. But George does not argue that Her

‐

nal has an interest in the outcome of her case or otherwiseNo. 17

‐ 1714 15

was unavailable from a pragmatic standpoint. Hernal was

sentenced to 9 months’ imprisonment on January 29, 2015,

well before George’s trial in October 2015, and George

makes no argument that Hernal’s sentence could be impact

‐

ed by George’s outcome. George relies instead on the evi

‐

dence that Hernal cooperated with the government, but “a

witness’s status as a confidential informant does not neces

‐ sarily give rise to a sufficient relationship with the govern

‐

ment so as to render [him] unavailable to the defense.” Tava

‐

rez

, 626 F.3d at 905; Villegas

, 655 F.3d at 670. Moreover, the

testimony that she claims Hernal would have provided at

best would have corroborated her claim that in March 2011

he told her that the arrangement was legal. But George

acknowledged that once she began receiving cash payments,

in at least November 2011, she was aware that the referrals

were unlawful, and therefore by her own admission she was

aware of the illegality when she accepted the payments in

2012. Accordingly, even if the missing witness instruction

had been appropriate, its omission here would have been

harmless error.

The judgment of the district court is AFFIRMED.