United States v. Dynamic Visions Inc

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, Plaintiff,

v. Civil Action No. 11-695 (CKK) DYNAMIC VISIONS, INC. and ISAIAH BONGAM, Defendants.

MEMORANDUM OPINION (October 20, 2017)

This is a False Claims Act (“FCA”) suit brought by Plaintiff United States of America

against home health care provider Dynamic Visions, Inc. and its sole owner and president, Isaiah

Bongam (collectively “Defendants”). In its Complaint, Plaintiff alleged that between January

2006 and June 2009 Defendants submitted false or fraudulent claims to Medicaid for

reimbursement for home health care services. Specifically, Plaintiff claimed that many of the

patient files associated with the claims made by the Defendants did not contain “plans of care” as

required under applicable regulations, or contained plans of care that were not signed by physicians

or other qualified health care workers, did not authorize all of the services that were actually

rendered, or contained forged or untimely signatures. On December 6, 2016, the Court granted

Plaintiff’s Motion for Summary Judgment. Now pending before the Court is Plaintiff’s Motion

for Entry of Final Judgment and for Award of Damages and Civil Penalties. Upon consideration

of the pleadings, 1 the relevant legal authorities, and the record as a whole, the Court GRANTS

Plaintiff’s Motion.

1 The Court’s consideration has focused on the following documents and their attachments and/or exhibits: Pl.’s Mot. for Entry of Final Judgment and for Award of Damages and Civil

1 I. BACKGROUND

The Court has already set forth the factual background and procedural history of this case

in its October 24, 2016 and December 6, 2016 Memorandum Opinions, which are incorporated by

reference and made a part of this Memorandum Opinion. See generally United States v. Dynamic

Visions, Inc., 216 F. Supp. 3d 1 (D.D.C. 2016); United States v. Dynamic Visions, Inc., 220 F. Supp.

3d 16 (D.D.C. 2016). In those Memoranda and associated Orders, the Court held that Defendant

Dynamic Visions was liable under the FCA for submitting false Medicaid claims to the D.C.

Department of Health Care Finance (“DHCF”). The Court found that Dynamic Visions’ claims

impliedly certified compliance with D.C. Medicaid regulations that required home health care

services be rendered pursuant to signed “plans of care.” The Court additionally found that the

services for which Defendants had billed DHCF were not, in fact, rendered pursuant to such plans

of care. In its December 6, 2016 Memorandum Opinion and Order, the Court also pierced

Defendant Dynamic Visions’ corporate veil to hold Defendant Bongam individually liable. On

January 3, 2017, Defendant Bongam filed a Motion to Set Aside the Court’s December 6, 2016

Order, which the Court denied. Now pending and fully briefed is Plaintiff’s Motion for Entry of

Final Judgment and for Award of Damages and Civil Penalties.

Penalties, ECF No. 122 (“Pl.’s Mot.”); Pl.’s Suppl. to Mot. for Entry of Final Judgment and for Award of Damages and Civil Penalties, ECF No. 139 (“Pl.’s Suppl.”); Def.’ Isaiah Bongam’s Resp. to Pl.’s Suppl. to Mot. for Entry of Final Judgment and for Award of Damages and Civil Penalties, ECF No. 146 (“Bongam’s Opp’n”); Def. Dynamic Visions’ Opp’n to Pl.’s Mot. for Entry of Final Judgment, ECF No. 148-1 (“Dynamic Visions’ Opp’n”); Pl.’s Omnibus Reply in Support of Mot. for Entry of Final Judgment and for Award of Damages and Civil Penalties, ECF No. 150 (“Pl.’s Reply”). In an exercise of its discretion, the Court finds that holding oral argument in this action would not be of assistance in rendering a decision. See LCvR 7(f).

2 II. DISCUSSION

The pending motion for final judgment is not an opportunity to re-litigate Defendants’

liability. Defendants were given every opportunity to mount a timely defense as to their liability

at the appropriate stages. The Court’s only task now is to determine the amount of the final

judgment to be entered. As explained below, Defendants’ latest arguments are either irrelevant to

that task or simply meritless.

A. Plaintiff’s Request for Damages

The Court must first determine the amount of damages to which Plaintiff is entitled. The

FCA provides that, in addition to civil penalties, any person who violates the statute shall be liable

to the government for “3 times the amount of damages which the government sustains because of

the act of that person.” 31 U.S.C. § 3729(a). Plaintiff has submitted several declarations and

exhibits establishing the damages it has sustained. Of primary importance, Plaintiff has submitted

the declaration of Federal Bureau of Investigation (“FBI”) Special Agent Heidi Turner (nee Heidi

Hansberry). See Decl. of Heidi Turner, ECF No. 103-4. That declaration explains in detail the

nature of the fraudulent claims submitted by Defendants and the resulting amounts of money the

government outlaid. Agent Turner explains that the FBI, the Department of Health and Human

Services—Office of the Inspector General, and the United States Attorney’s Office for the District

of Columbia conducted a review of Defendants’ records, and that Agent Turner participated in that

review. Based on the results of this review, Agent Turner’s declaration lists the plans of care that

were on file for each patient at issue in this case, the time periods that were not covered by any

legitimate plans of care on file, how many invoices were submitted for the patients during the time

periods where no legitimate plan of care was on file, and how much the government paid out for

those unauthorized invoices. In total, Agent Turner states that the government has paid Defendants

3 $489,983.90 based on such fraudulent invoices. In a later-filed supplemental declaration, Agent

Turner stated that she had discovered minor errors in her calculations and that the actual amount

of damages was $489,744.02. 2

Defendants have previously attacked Agent Turner’s declaration on various evidentiary

grounds and the Court has already rejected Defendants’ arguments. The Court has found, and

reiterates now, that the declaration is competent, reliable, non-hearsay evidence from a witness

who was personally involved in reviewing Defendant’s own business records, all of which were

produced to Defendants during discovery. The Court did originally hold Plaintiff’s motion for

summary judgment in abeyance in part to allow it to provide additional evidence on certain discrete

issues discussed in Agent Turner’s declaration, but Plaintiff subsequently supplemented the record

on those points to the Court’s satisfaction. Beyond these evidentiary issues, Defendants have not

presented contrary evidence to, or otherwise meaningfully rebutted, Agent Turner’s findings and

calculations.

Plaintiff has also buttressed Agent Turner’s declaration by submitting a declaration from

the Director of Health Care Operations Administration of the DHCF, Donald Shearer. See Decl.

of Donald Shearer, ECF No. 122-1. In his declaration, Mr. Shearer explains the information system

DHCF uses to keep track of all of the claims filed with the DHCF by providers and the moneys

the DHCF pays out. He states that he provided Agent Turner with DHCF’s official reports and

records from that system regarding claims paid for Defendants’ patients for Agent Turner’s review.

2 Defendants argue that these errors, which Agent Turner discovered on her own and have been resolved, show that Plaintiff’s evidence is too unreliable to warrant entry of final judgment. The Court disagrees. Contrary to Defendants’ argument, there is nothing about the particular errors Agent Turner discovered that suggest any wide-scale problem with her calculations. If anything, the government’s forthcoming response to its discovery of minor errors in Agent Turner’s calculations indicate the trustworthiness of its evidence.

4 The Court is satisfied that the evidence submitted by Plaintiff demonstrates that the government

sustained $489,744.02 in damages.

Defendants raise various arguments regarding Plaintiff’s evidence and calculation of

damages, but all are without merit. First, Defendants challenge the time frame used to calculate

damages—January 2006 to June 2009. 3 Defendants argue that the time period for damages should

not extend all the way to June 2009, but should instead stop after December 2008—the outside

date of the DHCF’s original administrative review of Defendants’ Medicaid claims and after a

search and seizure was executed in Defendants’ home and offices. This argument is unpersuasive.

As an initial matter, Defendants themselves represented in their summary judgment filings that the

relevant time period extended to June 2009. See Defs.’ Stmt. of Material Facts in Dispute, ECF

No. 110, ¶¶ 16-17. More importantly, there is simply no reason why the time period of Defendants

liability would stop in 2008. The Complaint clearly alleges instances of fraudulent billing by the

Defendants beyond that date, extending up to June 2009. Compl., ECF No. 1, ¶ 18. Accordingly,

there is nothing improper about calculating damages suffered up to that date.

Second, Defendant Dynamic Visions argues that it cannot effectively challenge the

government’s evidence of damages without access to the voluminous underlying DHCF payment

3 In a previous Order, the Court noted that the Turner declaration appeared to discuss certain instances of false claims submitted or paid outside of the January 2006 to June 2009 time period alleged in the Complaint. The Court ordered the Plaintiff to supplement the record with a “break[ ] down” of the dates associated with the false claims for which Plaintiff is seeking actual damages to ensure the Court that the requested award of damages was based only on false claims within that time period. The government has done so, by submitting a supplemental declaration from Agent Turner explaining that instances discussed in her original declaration that fell outside of the time period set forth in the Complaint were included only to provide the Court with a “complete picture of the contents of the patient files” and that Agent Turner’s actual calculation of damages “remained at all times within the time-frame set forth in the Complaint.” See Suppl. Decl. of Heidi Turner, ECF No. 139-1. Agent Turner attached to her supplemental declaration a chart that indicates the time frames for the claims considered for each patient at issue, and none fall outside of the January 2006 to June 2009 time frame. ECF No. 139-2.

5 records Agent Turner reviewed and that are summarized in the evidence Plaintiff has filed. This

argument is disingenuous. Plaintiff reasonably provided its evidence in summary form pursuant

to Federal Rule of Evidence 1006, and expressly stated in its supplemental motion for final

judgment that the underlying documents were “available to the Defendants upon request.” Pl.’s

Suppl. at 3 n.1. The Court will not allow Defendants to willfully refuse to review these documents

and then rely on their purported lack of access to them as a reason for the Court to deny Plaintiff’s

motion.

Finally, Defendants argue that Plaintiff’s showing is insufficient because they have not

proven “whether the check[ ] numbers for payment provided by Plaintiff [were] in fact cashed,”

and because Plaintiff has not shown that the payments “in fact relate[ ] to the alleged unsupported

and/or unauthorized claims filed by Dynamic.” Dynamic Visions’ Opp’n at 2. Both arguments

fail. Although Plaintiff’s evidentiary showing does not speak in terms of whether checks were

“cashed,” the records provided by Mr. Shearer to Agent Turner for her calculations contained “the

amount[s] paid” in response to each of Defendants’ claims. The record therefore shows that these

amounts were “paid” by the government and accordingly constitute damages. Moreover, the

government has in fact demonstrated how the payments made by DHCF relate to Defendants’

fraudulent claims. In his declaration, Mr. Idongesit Umo, a paralegal specialist with the United

States Attorney’s Office, traces how the payment information from DHCF records matches up with

the Medicaid recipients identified in Agent Turner’s declaration. See Decl. of Idongesit Umo, ECF

No. 122-2.

6 In sum, the Court finds that the amount of actual damages sustained by the Plaintiff is

$489,744.02. Under section 3729(a), Plaintiff is entitled to an award of three times this amount,

or $1,469, 232.06. 4

B. Plaintiff’s Request for Civil Penalties

Next, the Court must determine the amount of civil penalties to award Plaintiff in addition

to its damages. The FCA states that Defendant “is liable to the United States Government for a

civil penalty of not less than $5,000 and not more than $10,000” for each false claim submitted,

and that “range has subsequently been increased to $5,500 to $11,000.” United States v. Speqtrum,

Inc., 2016 WL 5349196, *3 (D.D.C. 2016) (citing 64 Fed. Reg. 47099, 47103 (1999)). The Court’s

inquiry is accordingly twofold. It must first determine how many false “claims” Defendant

submitted, and then it must decide the amount of penalty to assess per claim.

4 There is an exception to the trebling of damages under section 3729(a)(2), but that exception is clearly not applicable here. Section 3729(a)(2) states that the Court can instead assess not less than two times the amount of damages sustained if the defendant “furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information, fully cooperated with any Government investigation of such violation, and at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation.” Defendants do not contend that these requirements are satisfied and, given Defendants’ well-documented lack of cooperation in this case, it is clear that they are not.

7 1. Number of “Claims”

The FCA defines the term “claim” as “any request or demand, whether under a contract or

otherwise, for money or property” that “is made to a contractor, grantee, or other recipient, if the

money or property is to be spent or used on the Government’s behalf or to advance a Government

program or interest, and if the United States Government . . . provides or has provided any portion

of the money or property requested or demanded; or . . . will reimburse such contractor, grantee,

or other recipient for any portion of the money or property which is requested or demanded . . .”

31 U.S.C. § 3729(b)(2). “Whether a defendant has made one false claim or many is a fact-bound

inquiry that focuses on the specific conduct of the defendant.” United States v. Krizek, 111 F.3d

934, 939 (D.C. Cir. 1997). “The Courts asks, ‘With what act did the defendant submit his demand

or request and how many such acts were there?’” Id.

Here, the answer is that Defendant Dynamic Visions submitted demands for payment with

each computerized invoice filing it submitted for reimbursement. Plaintiff suggested this

conclusion despite the fact that each invoice Dynamic Visions submitted contained a number of

individual recipient-based invoices which could also theoretically each be considered a “claim.”

Defendant did not respond to Plaintiff’s suggestion that this is a reasonable means of calculating

the “claims” at issue, and the Court finds that it is. Defendant made 47 such filings, see Pl.’s Ex.

27, ECF No. 122-4, and accordingly submitted 47 false “claims,” see Speqtrum, Inc., 2016 WL

5349196, *4 (in similar case, finding that each “separate and distinct computerized invoice[ ] for

reimbursement of services” constituted a claim for the purposes of calculating civil penalties).

2. Amount of Civil Penalty Per Claim

Next, the Court must determine how large of a penalty to assess per each of the 47 claims

at issue. The Court has discretion to determine the amount of civil penalty to assess between an

8 amount of $5,500 and $11,000. “Though there is no defined set of criteria by which to assess the

proper amount of civil penalties against the defendant, the Court finds that an approach

considering the totality of the circumstances, including such factors as the seriousness of the

misconduct, the scienter of the defendants, and the amount of damages suffered by the United

States as a result of the misconduct is the most appropriate.” United States ex rel. Miller v. Bill

Harbert Intern. Const., Inc., 501 F. Supp. 2d 51, 56 (D.D.C. 2007).

In this case, Plaintiff argues that the totality of the circumstances calls for the maximum

penalty to be assessed per false claim because employees of Defendant Dynamic Visions forged

signatures of physicians on plans of care and Defendant took money from programs intended to

service needy patients. Plaintiff also argues that the maximum penalty is warranted because using

47 as the amount of claims at issue, despite the fact that each of the 47 invoices submitted by

Dynamic Visions contained several false acts, understates the severity of Defendants’ actions.

The Court agrees that the maximum penalty is appropriate for the reasons cited by Plaintiff.

Defendants’ arguments in response are unconvincing. Both Defendants spend a considerable

amount of their briefing challenging the Court’s prior conclusion that Dynamic Visions employees

forged the signatures of physicians on certain plains of care. Defendant Dynamic Visions argues

that “although the Court entered summary judgment in favor of Plaintiff” on this issue, it erred in

9 doing so because it “failed to consider the evidence before it an draw justifiable inferences in favor

of Dynamic Visions.” Defs.’ Opp’n at 7. 5

These arguments are not well taken. The Court already determined that there was no

genuine dispute of fact with regard to whether Defendant’s employees forged signatures on plans

of care at the liability stage. The Court notes that it carefully considered this issue at that time.

The Court refused to grant summary judgment in Plaintiff’s favor on this issue initially and

required Plaintiff to file declarations from each physician at issue regarding their signatures.

Plaintiff then submitted sworn declarations from each physician, all of whom stated that the

signatures on the plans of care were not their own and also not those of anyone authorized to sign

on their behalf. In response, Defendants offered only unsubstantiated, self-serving, and conclusory

denials. Accordingly, the Court granted summary judgment for Plaintiff. The Court’s prior

Opinions addressing this issue are incorporated into this Opinion as though set forth in full.

Dynamic Visions, 216 F. Supp. 3d at 12; Dynamic Visions, 220 F. Supp. 3d at 21-22. Defendants

have offered no adequate reason for reconsidering that decision now, and the Court declines to do

so.

Moreover, even if the Court were to revisit the issue in the context of determining the

proper amount of civil penalties to assess, Defendants’ arguments are simply unpersuasive. They

5 Defendant Bongam goes further and argues that the United States Attorney’s Office has engaged in fraud and purposely submitted false information to the Court. Defendant’s accusations are completely unfounded and are accordingly rejected by the Court. In response to Defendants’ repeated complaint that Plaintiff’s evidence is simply false, the Court simply notes that Defendants had numerous opportunities to present rebutting evidence during the discovery process and did not do so. The Court also notes once again that to the extent Defendant Bongam continues to contest Defendant Dynamic Visions’ liability, he has no standing to do so. See Fed. R. Civ. P. 17(a)(1) (“an action must be prosecuted in the name of the real party in interest.”).

10 are based purely on Defendants’ speculation and cherry picked portions of the record, and are

rebutted by the actual non-hearsay evidentiary record.

Accordingly, for the reasons cited by Plaintiff, and noting Defendants’ lack of cooperation

in this matter, the Court will assess an $11,000 penalty per false claim. In sum, the Court will

assess a total of $517,000 in civil penalties.

III. CONCLUSION

For the foregoing reasons, the Court will GRANT Plaintiff’s Motion for Entry of Final

Judgment and for Award of Damages and Civil Penalties. The Court finds that an evidentiary

hearing is not needed and that Plaintiff is entitled to $1,469, 232.06 in damages and $517,000 in

civil penalties. In total, Plaintiff will be awarded $1,986,232.06. An appropriate Judgment

accompanies this Memorandum Opinion. 6

/s/ COLLEEN KOLLAR-KOTELLY United States District Judge

6 The Court is aware that Plaintiff has requested additional sanctions against Defendants for their failure to comply with discovery orders. The only particular additional sanction Plaintiff has suggested at this time is that the Court incarcerate Defendant Bongam until he provides truthful financial discovery or pays the final judgment issued by the Court. The Court previously indicated that it would revisit the issue of sanctions after it had ruled on Plaintiff’s Motion for Entry of Final Judgment, and would give Defendants an opportunity to brief the issue then. Defendants need not brief this issue because the Court will not impose the additional sanction requested at this time. The Court assumes that the Defendants will fully and promptly comply with the judgment of the Court. Plaintiff’s request for additional sanctions is accordingly denied without prejudice.