Steal from Government Go to Jail

Criminals Take Advantage of Government Health Care

New Statute Requires Sentencing Review

In The People v. Howard Oliver, B317368, California Court of Appeals, Second District, Third Division (May 12, 2023) Howard Oliver appealed from the judgment entered after a jury convicted him of conspiracy to cheat and defraud Medi-Cal, Medi-Cal fraud; grand theft, false and fraudulent claims, insurance fraud, and four counts of tax evasion for 2012 through 2015.  Oliver was sentenced to an aggregate sentence of seven years eight months in prison and ordered to pay over $2.85 million in restitution.

BACKGROUND

In 1997, Oliver hired accountant Lou Cannon to assist with taxes and bookkeeping for his business, Central Desert Industrial Medical Group (Central Desert), an Apple Valley medical clinic which provided medical care to injured workers. Cannon eventually learned that Oliver was also the director of lucrative alcohol and drug counseling centers and became interested in operating one. Oliver counseled her on starting a facility, providing her information and documentation to submit with the relevant applications, and loaned her funds to start the facility.

In 2008, Cannon opened West Coast Counseling Center (West Coast) in Long Beach, designating herself as the executive director and Oliver the medical director. Oliver provided his medical license and advised Cannon as to which office to rent, informing her an examination room was not necessary.

West Coast's Falsification Of Patient Records

West Coast's business was based on billing Medi-Cal. Cannon handled the billing, payroll, and accounting. Oliver served as medical director, signing off on files, plans, and billing. He received a salary of $1,500 per month, which later increased to $2,500 per month.

Cannon directed counselors to fill in incomplete intake forms with false information and input progress notes in files of patients who the counselors never counseled. To accomplish this, approximately twice per month, Bailey gave counselors patient names and dates so they could prepare false progress notes in the files.

Oliver visited the office once or twice per month to review files, sign them, and return them to counselors. Oliver signed a physical examination waiver for clients.

Bailey also instructed the counselors to list group sessions as lasting three hours, even though no sessions went that long. If counselors failed to do so, their pay checks would be withheld until "necessary corrections" to the entries were made.

Counselors complained about the falsification of records during a staff meeting with Cannon, Bailey, Oliver, and Moreno. Oliver said to Bailey, "You need to stop doing that with the staff." The counselors were asked to leave the meeting room. After the meeting, Oliver continued to sign off on patient visits that had not occurred.

West Coast was doing well financially. West Coast also began offering incentives to encourage Medi-Cal recipients to come into their office and provide their Medi-Cal card in exchange for vouchers for food, clothes, and transportation.

Department Of Justice Investigation

The Department of Justice investigative auditor assigned to investigate West Coast determined that Medi-Cal paid West Coast approximately $2.8 million between January 2010 and September 2013, approximately half of which was for one-on-one counseling for three hours per day three days per week. The investigation revealed that Oliver had deposited several hundred thousand dollars’ worth of checks into the Central Desert and/or Grove Medical accounts that went unreported on Central Desert's tax returns. Central Desert failed to pay $203,744 in taxes over four years.

DISCUSSION
The Trial Court's Denial Of Oliver's Mistrial Request Was Not Erroneous

The evidence of Oliver's knowledge that the documents he was signing contained false information was overwhelming, and Oliver's contrary arguments are unavailing. The Court concluded that the trial court did not err in denying a mistrial.

Assembly Bill No. 518 Requires Re-sentencing

Assembly Bill No. 518, which took effect on January 1, 2022 (days after Oliver's December 7, 2021 sentencing), amended section 654 to provide, in pertinent part: "An act or omission that is punishable in different ways by different provisions of law may be punished under either of such provisions, but in no case shall the act or omission be punished under more than one provision." A trial court must exercise its informed discretion when sentencing a defendant.

Oliver was convicted of five counts related to Medi-Cal fraud and four counts related to tax evasion. Under the former statute, the trial court was required to impose the longer sentence for count 2 and to stay the sentences for counts 1, 3, 4, and 6 because, as the trial court recognized, those five counts arose out of "essentially all the same course of action."

Under the amended statute, the trial court had discretion to sentence Oliver under one of the less severe provisions  and stay sentences on the other counts arising out of the same acts and omissions.

Howard Oliver's sentence was vacated and the case was remanded to the trial court for re-sentencing. In all other respects, the judgment was affirmed.

ZALMA OPINION

Defrauding the state and federal governments is a serious crime. Oliver did so with impunity for a payment of $2500 a month plus whatever he could steal from the business and by lying on his tax returns. He was properly convicted of the crimes and sentenced appropriately. Hopefully, although I hold out little hope, when the sentence is looked at again the trial court will exercise its discretion and keep or make longer the sentence Oliver must serve.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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