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United States v. Dillon

United States District Court, D. Idaho

June 28, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
CHERIE R. DILLON and DENTAL HEALTHCARE WITH HEART, P.C., successor in interest to DENTAL HEALTHCARE WITH HEART, PLLC,, Defendants.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL U.S. DISTRICT COURT JUDGE

         INTRODUCTION

         The Court has before it a motion for partial summary judgment filed by the Government. The motion is fully briefed and at issue. For the reasons explained below, the Court will grant in part and deny in part the motion.

         ANALYSIS

         The Government has brought this lawsuit against Cherie Dillon and Dental Health Care with Heart, P.C. under the False Claims Act (FCA) alleging that the defendants committed health care fraud and seeking civil penalties. In a separate criminal proceeding in this Court, Dillon pled guilty to 24 counts of health care fraud. Dillon's plea, the Government argues, estops her from contesting civil liability in this FCA action.

         The Government's motion is directed only against Cherie Dillon and only seeks summary judgment on one of the fraud theories alleged in the complaint, i.e., false claims for dentist-only procedures that were not performed by a dentist. More specifically, the Government asks the Court to (1) find that Dillon submitted 492 false and fraudulent claims for Medicaid payment for dentist-only procedures that were not performed by a dentist and (2) impose a civil penalty of $550, 000 on Dillon for that conduct. The Government argues that Dillon is collaterally estopped from challenging this motion because she admitted to this conduct when she entered her plea of guilty in the criminal case.

         In the criminal case, Dillon was charged with 24 counts of health care fraud and 24 counts of aggravated identity theft. See U.S. v Dillon, 1:16-cr-037-BLW. The case went to trial, and after the Government rested its case, Dillon pled guilty to all counts, and she was later sentenced to 60 months incarceration. Following a hearing, the Court imposed forfeiture of $847, 016, and ordered restitution in the sum of $139, 769.80. On appeal, the Ninth Circuit held that (1) Dillon's plea was “knowing and voluntary”; and (2) the Court, in calculating the restitution amount, should not have deducted billings for hygiene services Dillon performed. See U.S. v. Dillon, 749 Fed.Appx. 541 (9th Cir. 2018). On remand, the Court held a hearing and increased the restitution amount to $316, 778.25. See Order (Dkt No. 168 in U.S. v. Dillon, 1:16-cr-037-BLW).

         During her guilty plea hearing, Dillon stipulated that the evidence at trial and the allegations in the Superseding Indictment constituted the factual basis of her guilty plea. See Transcript (Dkt. No. 53) at pp. 23-24. Thus, Dillon has admitted the following:

1. That she violated 18 U.S.C. § 1347 by “knowingly and willfully . . . execut[ing] a scheme and artifice to defraud health care benefit programs as to material matters, and to obtain by means of materially false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program.” See 18 U.S.C. § 1347.
2. That she “submit[ed], or caus[ed] to be submitted, claims for payment to health care benefit programs for various Dental Services, falsely and fraudulently representing that the treatments were performed by a qualified dentist, when in truth and in fact treatments were performed by CHERIE R. DILLON, a dental hygienist, or not performed at all.” See Superseding Indictment (Dkt. No. 16) at ¶ 7.
3. That she “performed Dental Services and received payment for those services from health care benefit programs while fraudulently misrepresenting that the services had been performed by a dentist, and while fraudulently billing health care benefit plans under [the dentist's] credentials for such services.” Id. at ¶ 19.
4. That she defrauded Medicaid. Id. at ¶ 22.

         Dillon's conduct, as admitted to in her guilty plea hearing, constitute violations of the FCA, as alleged in the complaint in this case. More specifically, Dillon has admitted violating 31 U.S.C. § 3729(a)(1)(A) of the FCA by knowingly submitting, or causing to be submitted, false Medicaid claims for payment. She has also admitted violating 31 U.S.C. § 3729(a)(1)(B) of the FCA by knowingly making or using, or causing to be made or used, a false statement or record material to a false or fraudulent claim.

         Because these admissions establish all the elements required for the FCA claims in this case, Dillon is collaterally estopped from denying civil liability for those particular claims. The ...


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