Opinion ID: 2977503
Heading Depth: 3
Heading Rank: 1

Heading: History of Harris’s Loans

Text: Beginning in 1983, Harris attended the Ohio College of Podiatry Medicine. In order to attend Ohio College, Harris took out HEAL loans. HEAL loans are private loans backed by the government. Harris accrued $66,100 in loans during his time in school. It is unclear if Harris ever took a deferment on his loans. It is clear, however, that Harris did not make at least six loan payments. Sallie Mae, the private lender responsible for the loans, filed an insurance claim with HHS. HHS repaid Sallie Mae for Harris’s loans and Sallie Mae assigned the loans to HHS. HHS then referred the loans to the U.S. Attorney’s Office in Cleveland, Ohio for collection. -2- No. 06-3327 US v. Harris B. The First Judgment against Harris and the Loan Repayment Plan In 1989, the government initiated a civil action against Harris to collect on the HEAL loans. It obtained a judgment against Harris in the amount of $127,520.18. Based on that judgment, Harris and the government entered into a repayment agreement in 1991. The plan required regular repayment be made from the reimbursements Harris received from Medicare for services rendered.1 The government would receive the first $1,500 of the Medicare payments Harris received each month. The next $10,000 each month would be Harris’s, while anything over $11,500 in a month would be split equally between Harris and the government. C. Harris’s Attempts to Limit his Payments During the same period, Harris began attending an “asset protection class” offered by Jay Mitton. He attended this class yearly, often with other doctors he knew. One of the seminar books indicated that forming a corporation and working as the corporation’s employee would allow an individual with heavy loan payments to have better control of his finances. Harris received similar advice from his accountant, Kenneth Embry. Embry indicated that, if Harris formed a corporation and listed himself as its employee, “Medicare would discontinue intercepting his funds.” Repayment of Harris’s loans was initially made from Medicare reimbursements which he obtained using his Medicare PIN number. Creating a corporation would create a new PIN number for the corporation under which Harris could bill Medicare for reimbursements. Embry indicated that Medicare would not deduct payments for Harris’s repayment plan from Medicare reimbursements obtained using the 1 Nationwide Insurance oversaw the Medicare trust fund. Advance Med now serves that function. For ease of reference, both entities are referred to as Medicare. -3- No. 06-3327 US v. Harris corporation’s PIN number if Harris was listed as an employee of the corporation. Based on this advice, Harris formed Metropolitan Foot and Ankle (“Metropolitan”) in 1993. To incorporate under Ohio state law, Harris believed he needed to have other doctors as shareholders. He listed several other doctors as shareholders, doctors that he knew from school and who had also attended the Mitton seminars. One of these doctors was Dr. Taj Malik. Dr. Malik later testified he had never been involved with Metropolitan.2 Dr. George Ilodi was also listed as a shareholder. Dr. Ilodi later testified that he had never been involved with or had any knowledge of Metropolitan.3 After being contacted by FBI agents investigating Harris, Dr. Ilodi sent a letter to Harris inquiring why Harris had used Dr. Ilodi’s name in connection with Metropolitan. Harris sent a response, but the response was addressed to Dr. Malik rather than Dr. Ilodi: in it, Harris apologized to Dr. Malik for using Dr. Malik’s address in relation to Metropolitan and explained it away as an accident. Needless to say, the letter did nothing to assuage Dr. Ilodi’s concerns about the use of his own name. Dr. Kenneth Walker was also listed as a shareholder.4 Dr. Walker’s wife testified that Dr. Walker was not involved in any way with Metropolitan. Dr. Damon Litsey and Dr. Brenda 2 Dr. Malik had been charged with taking a kickback previously. He was found not guilty. 3 Dr. Ilodi was convicted of receiving a kickback in an unrelated case. He was found guilty, and his license to practice medicine was revoked in 2002. 4 Dr. Walker was diagnosed with sarcoidosis in 1992. He stopped practicing in 2000, and he died in 2002. -4- No. 06-3327 US v. Harris Casselberry also testified that, though listed as shareholders in Metropolitan, neither had any involvement with Metropolitan.5 When Metropolitan first incorporated, Medicare began deducting Harris’s payments from reimbursements to Metropolitan. In response, Harris informed Medicare he was simply a Metropolitan employee. He submitted a handwritten chart showing other doctors’ roles at Metropolitan. It listed Dr. Walker as president of Metropolitan and Dr. Casselberry as president of Metropolitan’s Podopediatrics Department, though neither doctor had any involvement with the corporation. Harris also wrote letters to Medicare–using other doctors’ names–that indicated Harris had no financial interest in Metropolitan and that Harris would be fired if Medicare continued deducting amounts Harris owed under the repayment plan from Metropolitan’s Medicare payments. Harris did not receive permission from these other doctors to use their names, but his efforts were successful: Medicare stopped deducting amounts Harris owed from reimbursements made to Metropolitan. He wrote the first of these letters in 1993, and Medicare stopped deducting amounts Harris owed from reimbursements made to Metropolitan’s Medicare reimbursements soon after. Emboldened by the success of this ruse, Harris formed another corporation, Achilles Foot and Ankle (“Achilles”), in 1994. He did not actively use the Achilles corporation until the fall of 2000, shortly after he learned that the government was going to exclude him from Medicare. He submitted requests for PIN numbers under Achilles for both himself and Dr. Walker. He admitted signing for both himself and Dr. Walker. Harris included with the application an employment 5 Many of these doctors were also falsely listed as practicing at Metropolitan in an organizational chart Harris submitted to the government at the time. -5- No. 06-3327 US v. Harris agreement and withholding form signed by Dr. Walker. As with Metropolitan, Dr. Walker’s wife denied that Dr. Walker had any involvement in Achilles. She also testified that the signatures on the forms were not from Dr. Walker. She further testified that, at the time the forms were signed, Dr. Walker could no longer hold a pen. Through his use of these corporations, Harris was able to limit the amount the government received under his repayment plan. Payments were made using his Medicare reimbursements from 1991 through 1993. In 1993, the government stopped deducting payments from Metropolitan’s Medicare reimbursements based on the letters received from Harris. In 1994, Harris made two direct payments to the government. In 1995, Harris made no payments until May. He then made regular payments for the rest of the year. Harris made no meaningful payments on his debt in 1996 or 1997.3 He made occasional, small direct payments in 1998 and 1999. For example, he made a payment of $39.45 in June of 1999. In 1999, the government resumed taking payments from Metropolitan’s Medicare reimbursements. There were no further payments after May 1, 2000.4 D. Exclusion from Medicare and Harris’s Loan Forgiveness In June 2000, the government issued a letter to Harris informing him that he had to make payments or he would be barred from Medicare and Medicaid. Harris made no further payments. He was then excluded from Medicare and Medicaid on November, 20, 2000. He continued to 3 Though the exhibits are not in the record, it appears from the phrasing of questions at trial that Harris did make payments in 1996 and 1997, but that they were so small as to have no impact on the principal of the loan. 4 On May 1, 2000, Harris made a loan payment of $20.65. -6- No. 06-3327 US v. Harris practice, though he later testified that he did not bill Medicare for any services rendered during his exclusion. In 2001, Harris applied for loan forgiveness. Harris had his accountant, Ken Embry, fill out the financial statement provided by the government.5 The financial statement form clearly stated that all statements must be true under penalty of perjury. The form listed Metropolitan as Harris’s employer. It did not list Achilles. Based on the financial statement, the government found Harris could not repay the loan. The principal and interest at the time totaled $216,492.98. The government forgave the entire loan. After the government forgave his loan, Harris applied to be readmitted to Medicare. He was readmitted to Medicare in 2002. E. Investigation into Suspicious Billing Activity During his exclusion from Medicare, multiple suspicious requests for reimbursement were made for services charged using Dr. Walker’s Achilles PIN number. Medicare referred the requests to the Office of Investigations in HHS. Special Agent Catherine Hanselman led the investigation. Hanselman contacted Medicare beneficiaries associated with the charges for services. All of the beneficiaries identified Harris as the doctor that provided the services for which payment was sought from Medicare using Dr. Walker’s PIN. Based on this information, Hanselman obtained a search warrant for Harris’s offices. After executing the warrant, Hanselman obtained a second search warrant in order to obtain further patient 5 Embry had previously been convicted twice of tax fraud. Harris testified that he did not know of those convictions. -7- No. 06-3327 US v. Harris files. An analysis of the patient files revealed that, in the records analyzed, almost all of the patients for which reimbursement was sought using the Achilles PIN numbers matched entries in Harris’s records. The investigation also implicated Barbara Kelley. Embry testified that Kelley had worked for Harris for years. When investigators first searched Harris’s office, Kelley identified herself as the office manager. Hanselman obtained a subpoena for Kelley’s employment records. Harris responded to the subpoena with a letter stating that, speaking “as the custodian of records” for both corporations, Barbara Kelley had never been an employee of either corporation. Multiple documents contradicted this letter, including an application for health coverage at Metropolitan that listed Kelley as an employee. F. Procedural Background The investigation ultimately led to an indictment charging Harris with ten counts of health care fraud, one count of making a false statement and one count of conspiracy. The district court appointed counsel for Harris and scheduled the original trial date for June 13, 2005. Harris’s attorney sought a continuance because it was “a complex case” and he needed “more time to thoroughly review all of the discovery.” The court granted a continuance until October 3, 2005. Trial was later reset for October 11, 2005. On October 7, 2005, Harris filed a pro se motion in paper form without his attorney’s knowledge. The motion was captioned a “Motion to Compel Effective Assistance of Counsel.” It sought a continuance because Harris felt unprepared for trial. Specifically, he claimed that his attorney’s failure to share discovery materials with him prevented him from lending his expertise to -8- No. 06-3327 US v. Harris the case. The motion noted that the “defendant is emphatically stating that he is not at odds with Court Appointed Counsel’s defense strategy.” October 7 was the Friday before Columbus Day, a federal holiday on which the federal courts were closed. Harris did not send a copy of the motion to the trial judge or to opposing counsel. On October 10, Columbus Day, Harris met with his counsel to discuss the upcoming trial. At the end of that meeting, Harris informed his counsel that he had sought a continuance. Early the next morning, Harris’s counsel called the court and informed the judge about the motion. The trial judge then met briefly with both counsel in chambers. The court addressed the motion on the record at the start of trial. The court denied the motion because defense counsel had a “stellar reputation,” defense counsel stated he had been preparing for trial for a significant amount of time, and Harris himself had missed many meetings with his counsel before trial. Finding no prejudice to Harris in denying the motion, the court also noted the prejudice to the government that a continuance would cause. The government had prepared for trial on that date, rearranged several schedules, and procured witnesses for trial. The jury trial commenced, and, after a four-day trial, the jury–not surprisingly–convicted Harris on all counts. At sentencing, the trial judge applied a number of sentencing enhancements, including enhancements for the amount of the loss, use of sophisticated means, Harris’s position of trust as a doctor in the Medicare system, his role as a leader in the offense, and obstruction of justice. Adding these enhancements to his base offense level produced an advisory Sentencing Guidelines range of seventy-eight to ninety-seven months. The court sentenced Harris to a prison term of seventy-eight months, three years of supervised release, and required restitution in the amount of -9- No. 06-3327 US v. Harris $528,074. The statutory maximum for counts 1, 11, and 12 was five years in prison; the statutory maximum for counts 2-10 was ten years imprisonment. The court made clear that Harris was sentenced to sixty months each for counts 1, 11, and 12, and seventy-eight months for each of the remaining counts. The sentences were to be served concurrently.