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United States v. East Mental Health, LLC

United States District Court, W.D. Virginia, Roanoke Division

November 13, 2018

UNITED STATES OF AMERICA
v.
EAST MENTAL HEALTH, LLC, et al., Defendants.

          MEMORANDUM OPINION

          Michael F. Urbanski, Chief United States District Judge

         This matter comes before the court on the government's Motion to Dismiss Without Prejudice (the "Motion"), ECF No. 80, which asks the court to dismiss the Indictment, ECF No. 3, against defendants Christopher Dean East, Joann Kathleen Patterson, Alfred Lloyd Robrecht, William Barclay Allison, Ryan Thomas Greene (collectively, "Individual Defendants"), and East Mental Health ("EMH," and collectively with Individual Defendants, "Defendants") without prejudice, under Federal Rule of Criminal Procedure 48(a). Defendants oppose the Motion and ask the court to dismiss the Indictment with prejudice. See Def.'s Resp. U.S.'s Br. Supp. Mot. Dismiss Without Prejudice ("Robrecht Opp."), ECF No. 90; Def. William Barclay Allison's Resp., ECF No. 91; Def.'s Resp. U.S.'s Br. Supp. Mot Dismiss Without Prejudice ("Patterson Opp."), ECF No. 92; Br. Resp. Gov'ts Mot. Dismiss Without Prejudice & Supp. Dismissal With Prejudice ("Greene Opp."), ECF No. 93; Mot. Dismiss Pursuant Rule 48(b)(1) & (3) & Opp. Gov'ts Mot. Dismiss Pursuant Rule 48(a) ("EMH Opp."), ECF No. 94.[1] For the reasons discussed below, the court will GRANT the Motion and DISMISS the Indictment without prejudice.

         A.

         While the parties disagree over the import of the government's delay in prosecuting this case, the underlying timeline is straightforward.

         EMH was a Roanoke-based mental health care provider. EMH Opp. 2. East founded EMH, id, and Patterson, Robrecht, Allison, and Greene were high-level managers of EMH. Br. U.S. Supp. Mot. Dismiss Without Prejudice ("Mot. Br."), ECF No. 89, at 2. EMH used Allison Small Business Solutions, LLC ("ASBS") as its contract Medicaid biller. Id. at 11.

         Prior to the genesis of the government's investigation, several EMH employees (the "Whistieblowers") brought a brought a separate qui tam action. See Complaint, United States ex rel. Switzer v. E. Mental Health Servs.. LLC. Civ. No. 7:13-cv-00498 (W.D. Va. Oct. 24, 2013), ECF No. 3. The qui tam suit remains pending.

         The government's investigation of Defendants began in December 2013, after the Whistieblowers brought alleged fraudulent billing practices by EMH to the government's attention. ECF No. 89, at 11. On January 28, 2015, the government executed a search warrant at EMH's Roanoke and Rocky Mount, Virginia locations and at ASBS. Id. The government collected 400 boxes of physical materials and imaged myriad digital materials. Id.

         Shortly after execution of the search warrant, the government and former counsel for EMH began a series of communications regarding access to the materials collected in the search. See February 27, 2015 Letter, ECF 89 Ex. 1, at 1. As part of that discussion, the government offered to provide EMH with a digital copy of all of the materials taken in the search, but only if EMH agreed to share the costs with the government. Id. at 3. The government estimated that digitization would cost approximately $175, 000. Id. Apparently, no cost sharing agreement was reached.

         Between August 12, 2015 and July 21, 2016, the government shipped the physical boxes to a third-party vendor for digitization. Mot. Br. at 14. Additionally, the government avers that it spent 2, 606 hours reviewing materials in Relativity, an online document review service, and 8, 488 investigative hours. Id. at 15. The government does not detail why this case required over 11, 000 hours before the charges were brought before the grand jury.

         The investigation continued through June 26, 2018, when Defendants were indicted on health care fraud charges. Id. at 2. On July 11, 2018, the court entered a Pretrial Order, ECF No. 52, setting the case for trial beginning September 4, 2018, in accordance with speedy trial requirements. On July 20, 2018, Defendants received all grand jury transcripts, the lead investigating agent's summary of the case with exhibits, and approximately 140 memoranda of interview. Mot. Br. 3. On August 14, 2018, the government met with defense counsel and arranged to provide each Defendant with access to digital evidence.[2] Id. at 3-4.

         On August 21, 2018, two weeks before trial, the government filed a Motion to Designate Case as Complex Case, and Excludable Delay, and to Continue the Jury Trial, ECF No. 73. Initially, most, but not all, defendants consented to the designation. At an August 24, 2018 hearing, counsel for the government stated that "the government is fully aware that it has failed to comply with its discovery obligations in this case as mandated by the Court, and we have failed to comply with the scheduling order for filing pretrial motions." Aug. 24, 2018 Hrg. Tr. At 4. The government stated that if the case was not designated as complex and the trial continued, it would move to dismiss the case without prejudice as it could not try the case on schedule given that 3.5 million pages of discovery had not yet been produced. Id. at 5-7. As a result of the government's position, the defendants asked that the case be dismissed with prejudice. The court ultimately denied the motion to continue, and requested that the parties brief the issue of whether the case should be dismissed with or without prejudice. As a result, the government filed the instant Motion, which asks the court to dismiss the Indictment without prejudice under Rule 48(a). Defendants have each filed oppositions to the Motion and ask the court to dismiss the Indictment with prejudice under Rule 48(b).

         B.

         The dismissal of indictments is governed by Federal Rule of Criminal Procedure 48, which provides:

(a) By the Government. The government may, with leave of court, dismiss an indictment, information, or complaint. The government may not dismiss the prosecution during ...

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