Opinion ID: 749850
Heading Depth: 2
Heading Rank: 4

Heading: The Sizemore Security Mail Fraud Allegations (Counts 110-111)

Text: Suba claims that he was not involved in wording the invoice for the $125,000 certificate of deposit for Sizemore Security as an additional premium instead of a loan but that Kelly's initials and jottings were on the invoice and the request form. Kelly claims that no fraud was proven because the loan was repaid. The Government claims that the evidence clearly indicates Kelly's intent to defraud when he mailed a request for $125,000 check/invoice from the Augusta WC fund to the Trust Company Bank. Trust Company Bank in turn mailed a $125,000 check to Managed Risk and Managed Risk used these funds for its purchase of a $125,000 certificate of deposit for Sizemore Security. Repayment was made only after the investigation was ending, three months before the indictment was issued. Repayment in the face of litigation does not show a lack of fraudulent intent. United States v. Sirang, 70 F.3d 588, 595 (11th Cir.1995). Trust Company Bank mailed the Augusta WC check comprised of Medicare funds to Managed Risk's Atlanta post office box over which Kelly and Suba had control. The jury was entitled to conclude that Kelly and Suba used the United States mails to manipulate Medicare funds in the Augusta WC account for the benefit of themselves and their company. There is no error on this issue. E. The False Statement Allegations--(River Valley (Counts 11-26) and the Concealment of Related Company Managed Risk Allegations (Counts 30-32)) Kelly contends that the Government failed to prove the essential elements of these counts based upon alleged false statements in the cost reports, i.e., treating the money paid to the Galloways for the purchase of River Valley as a salary expense, and failing to disclose that Healthmaster and Managed Risk were related companies on 1991, 1992, and 1993 cost reports. He bases his contention on the premise that he did not prepare the cost reports and that [i]t is beyond dispute that the Medicare regulations are a complicated morass of compliance rules. The Government counters that Kelly, himself, is a certified public accountant, was chief financial officer and second-in-command of Healthmaster and that he was warned by a Healthmaster employee that the River Valley scheme would constitute Medicare fraud because Medicare would in essence be illegally reimbursing Healthmaster for the cost of its purchase of River Valley. In addition, the evidence clearly shows that Kelly concealed the relationship between Healthmaster and Managed Risk by using an Atlanta post office box address and an Atlanta answering service telephone number. In order to prove that Kelly made false statements in violation of 18 U.S.C. § 1001, the Government need only show that Kelly knowingly and willfully concealed a material fact by any trick, scheme, or device, or made or used a false document knowing that it contained any false, fictitious, or fraudulent statement or entry. 18 U.S.C. § 1001. A reasonable jury could conclude from the substantial evidence presented on these counts that Kelly violated the false statements statute.