United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER REGARDING THE GOVERNMENT'S
NOTICES OF INTENT TO OFFER 404(B) EVIDENCE (DOC.
CARAM STEEH UNITED STATES DISTRICT JUDGE
John Trotter, II, M.D., and Elaine Lovett are charged with
health care fraud conspiracy and three counts of health care
fraud. This matter is before the Court on the
Government's notice of intent to offer Rule 404(b)
evidence at trial against Elaine Lovett. (Doc. 103). Lovett
responded to this notice, to which the Government replied.
The Court heard arguments on January 9, 2017. For the reasons
stated below, the Court will permit this evidence.
One of the superseding indictment charges Lovett and Trotter
with conspiring with each other, Michelle Freeman, and Andrew
Hardy, Jr., M.D., to knowingly and willfully execute a scheme
to defraud Medicare and to obtain money by making materially
false and fraudulent representations to Medicare while
knowing them to be false. The conspiracy is alleged to have
occurred from May 2008 to May 2014. The indictment specifies
that the defendants conspired to unlawfully enrich themselves
by submitting false claims to Medicare for physician visits
that were not medically necessary, not provided, and/or not
eligible for reimbursement; concealing the submission of
false and fraudulent claims; and diverting proceeds of this
fraud for their personal use and benefit. (Doc. 90 at ¶
achieve this end, the defendants and Freeman allegedly used
and/or purchased existing Medicare providers numbers,
submitted false claims using provider numbers without the
permission of those providers, submitted false statements for
services not provided as billed, submitted claims for
services provided by an unlicensed doctor, and submitted
false enrollment materials that did not disclose
Trotter's ownership interest.
Two, Three, and Four allege that Trotter, Lovett, and Freeman
executed a scheme to defraud Medicare by submitting false
claims for services that were not rendered and were not
government alleges the following facts regarding the proposed
other act evidence. Lovett was involved in a false billing
scheme with Beth Jenkins, the owner of an adult day care
center. Jenkins purchased Medicare beneficiary information
from Glenn English and agreed to use Abix, LLC to process
reimbursement claims. Abix was co-owned and controlled by
Lovett and Freeman. Lovett instructed Jenkins to code
Medicare claims in ways that resulted in larger payments,
regardless of whether the claims were truthful or accurate.
Knowing certain claims to be false and fraudulent, Lovett
billed Medicare and retained a percentage of the
also allegedly submitted Jenkin's claims to Medicare with
the knowledge that Jenkins had failed to disclose her
ownership of the adult day care center purportedly providing
the claimed services. After Medicare determined that it had
overpaid Quality Recreation and Rehab (QRR), Abix advised
Jenkins to change WRR's name and to use a straw owner.
Jenkins followed this advice, renaming QRR to Procare
Rehabilitation (Procare) and falsely identifying her mother
as the owner. Following the execution of a search warrant at
Procare and on Abix's request, Jenkins opened another
adult day care center, 2nd to None, and falsely listed her
daughter as the owner. Lovett knew that Jenkins had
fraudulently concealed her ownership of Procare and 2nd to
None. Lovett nonetheless submitted claims to Medicare for
services purportedly provided at these adult day care
is relevant “if it has any tendency to make a fact more
or less probable than it would be without the evidence; and
the fact is of consequence in determining the action.”
Fed.R.Evid. 401. Even if evidence is relevant, it may be
inadmissible under another Federal Rule of Evidence.
of a crime, wrong, or other act” is prohibited at trial
when used “to prove a person's character in order
to show that on a particular occasion the person acted in
accordance with the character.” Fed.R.Evid.
404(b)(1). But such “evidence may be
admissible for another purpose, such as proving motive,
opportunity, intent, preparation, plan, knowledge, identity,
absence of mistake, or lack of accident.” Fed.R.Evid.
Court “must apply a three-step analysis to evaluate the
admissibility of evidence under Rule 404(b).”
United States v. Hardy, 228 F.3d 745, 750 (6th Cir.
2000). First, the party seeking to admit 404(b) evidence must
demonstrate that the other bad acts occurred. Id.
(citing United States v. Johnson, 27 F.3d 1186, 1190
(6th Cir. 1994)). Second, the offering party must cite a
specific purpose for which the evidence is offered.
Id. “[T]he government's purpose in
introducing the evidence must be to prove a fact that the
defendant has placed, or conceivably will place, in issue, or
a fact that the statutory elements obligate the government to
prove.” United States v. Bell, 516 F.3d 432,
442 (6th Cir. 2008). Essentially, the offering party
“must show the evidence is probative of a material
issue other than character.” Hardy, 228 F.3d
at 750. Finally, the Court must find that the evidence's
probative value is not substantially outweighed by the damage
of unfair prejudice. Id.; see also Fed. R.