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Operation Brace Yourself, Part Two: Defending DME Clients
Operation Brace Yourself, a massive 2019 Department of Justice operation involving the durable medical equipment (DME) industry, was one of the largest health fraud enforcement actions in history and had major legal and compliance repercussions for DME companies. In this two-part series, Stephen Lee, Solo Practitioner, Law Office of Stephen Chahn Lee, recounts the true story of two DME owners who unwittingly found themselves in the crosshairs of this massive government enforcement action.
In part two, Stephen speaks with Jonathan Meltz, Senior Attorney, Chapman Law Group, who, along with Stephen, represented the owners after the government indicted them on charges related to violating the Anti-Kickback Statute and committing health care fraud. They discuss the proffer interview process, the concept of “willfulness,” the government’s case, issues related to attorney/client privilege, trial strategies, and the jury deliberations and verdict.
Watch the episode: https://www.youtube.com/watch?v=eEm85ExPXVQ
Listen to part one: https://ahlapodcasts.buzzsprout.com/221709/episodes/17308135-operation-brace-yourself-part-one-advising-dme-clients
Watch part one: https://www.youtube.com/watch?v=TPgVnbVQhpc
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SPEAKER_01:My name is Stephen Lee, and I am an attorney in Chicago who previously was a federal prosecutor and the senior counsel to the Chicago U.S. Attorney's Office's Healthcare Fraud Unit. And I'm very happy to be here today for part two of a two-part podcast looking at Operation Brace Yourself in a real-life case of how lawyers can help their clients through some very difficult circumstances. Now, in part one, we talked about Operation Brace Yourself. how companies responded, and two business owners, owner one and owner two, who decided to shut down their durable medical equipment businesses in 2020 after talking with a biller and a lawyer. Unfortunately, unbeknownst to owner one and owner two, the Federal Bureau of Investigation had already opened a criminal investigation targeting them. Now, I ultimately represented owner one, And I have with me today on the podcast, a great attorney, Jonathan Meltz, who represented Owner 2. Jonathan, can you introduce yourself?
SPEAKER_02:I sure can, Stephen. Good to see you today. I represented Owner 2. And when I'm not representing Owner 2, I'm a senior attorney with the Chapman Law Group. We have three officers across the country in Florida, Michigan, and California. And I represent... folks mostly in healthcare investigations, doctors who are charged with violations of the Controlled Substance Act, and other white-collar crimes.
SPEAKER_01:All right, so we'll get through what Jonathan and I ended up doing to help owner one and owner two through this very difficult situation. But we wanna start, by going through some of the things that happen in a lot of these typical kind of investigations and some things so that people who are out there listening can kind of know how to navigate through some of these things maybe a little bit better. So basically the first thing that happened as far as owner one and owner two were concerned, well, first of all, a lot happened, they had no idea. A lot of stuff was going on where the government was building up their investigation and clearly had ideas and thoughts about them and they had no clue what was going on. The first time they heard anything about a criminal investigation to them was in the summer of 2021, when the FBI approached owner two and asked him some questions and served him a subpoena. He then got another lawyer, not us, who arranged for a proffer interview. Proffers come up a lot, and it's something that Jonathan and I dealt with in various capacities, and we want to talk a little bit about that for the general audience. Jonathan, can you explain what a proffer is.
SPEAKER_02:Sure, Steven. Absolutely. So, You're right, proffers do come up a lot and I think they're some of the most important parts of any white collar or fraud investigation. And it's basically to define it, it's a meeting or an interview between somebody who's under investigation and federal agents and prosecutors. So what people have to understand though, as you said, this investigation has been going on for a while. So the federal agents and the prosecutors have a ton of information. By the time they approach somebody and they say, we'd like you to give a proffer interview, it's like almost the exam where they know all the answers, right? And they're asking somebody to come in and answer questions. And the deck is already stacked against that person, meaning the person's going in not realizing how much information or how much investigation has been done. So here are some of the basic factors of it. The person has to be under oath to tell the truth. and therefore anything they say which could be a lie or a false statement could be held against them. The person may get a small amount or a limited amount of what we call immunity, but it doesn't give them full immunity to avoid prosecution for any crime. So I also often call it the most important audition of somebody's life, right? mean we're not talking a play we're not talking an actor but but it's an audition because there's a couple reasons that the proffer may happen that the government is trying to determine if somebody's being truthful whether they know information about a possible crime or whether there are they are truly innocent or on the other hand if the person could be a good witness right, for the government. So it's an audition for that person's future. That's why it's so important, Stephen.
SPEAKER_01:Yeah, and I think that's what lawyers and clients need to take it as seriously as that because this is not something you just walk into. It's not something you just show up for one day and hope it'll go as well. Before I bring a client in for a proffer, I spend a lot of time going through the material beforehand as much as I can to iron out things and make sure the interview, the proffer is as helpful for both sides as possible because there's no point in doing a proffer if the government ends up thinking that you're lying to them.
SPEAKER_02:Right. And I think, Stephen, I think it's important for people to note that we look at like three levels of involvement for somebody that the government wants to talk to, right? At the bottom, it's somebody who's just a witness, somebody who may have documents or may have some knowledge. They may know about the crime, but they don't have any criminal liability, right? They're just a witness. They're a puzzle piece in the government's overall puzzle, right? So those folks most times would benefit from counsel, but they're not within the scope of the government right now. It's the other two levels which are important. The next one being somebody who's a subject of an investigation. The government's not quite sure where they fit in yet. And that those folks could say something that puts them over the edge in a real, real negative light or a big problem. So they would benefit from having counsel. And then of course, the most significant role is somebody who's in a target, right? They received a target letter or the government has told them or their attorneys, you're the target. of the investigation, and those are the people who really, really have to be concerned about moving forward. I'm sure you're the same way, but sometimes we just say no, right? We're not going to bring our clients in for a proffer, because as their attorney, we don't feel it's in their best interest. So there's certain situations where you have the right to say no, and based on what you and your attorney believe, that the proffer isn't something that's going to help you get the best possible result.
SPEAKER_01:Yeah. An extremely important part of a criminal investigation, a lot can hinge on what happens in a proffer. I've seen proffers go well and actually help clear up things. I mean, look, I was a prosecutor myself, and sometimes proffers actually did convince the government, we got something wrong. And so it's like, okay, all right. Okay, we were very glad to know that. But proffers, if they go badly, can actually be disastrous and make a person's situation worse. I've seen people who even considered pleading guilty to crimes they didn't commit because that got said in a proffer or got misinterpreted in a proffer. So move very carefully. Extremely powerful and helpful if done right. Extremely dangerous if done wrong. So in this case, owner two went in for a proffer. Unfortunately, it did not really help. Ultimately, the government basically heard owner two out, and they went ahead and indicted both guys the very next week on extensive charges. Owner one and owner two did not know about this. In fact, the people who were representing them at the time actually continued to provide information to the government for several weeks while owner two and owner two were already indicted because the lawyers at the time thought the government was still keeping an open mind and actually continuing their investigation. The government then went ahead and the indictment was under seal and they then went ahead and arrested or basically arrested or ordered them to surrender both owner and owner two right before Christmas of 2021. They then hired Jonathan and me.
SPEAKER_02:And that's what I was going to say, Stephen. It's important to note that you and I didn't represent owner one, owner two at that point. And, you know, a lot of times you talk about Monday morning quarterbacking and what would we have done. But, you know, you and I both think alike. We would prepare our clients as much as possible, hours, whatever it would take. But sometimes the government's already locked in. right and it's almost um i hate to say it but i will it's almost a trap sometimes right the proffer can be um that you no matter what you say or do you're not going to move them away from filing charges so that goes into the consideration and the equation when you're deciding whether or not to go in um for that for that interview for that meeting but um you know i I think there's some general advice for doing a proffer, right? That I think we can kind of agree upon across the board is that one, you have to carefully consider and think about it. I look at almost two different tracks for a proffer. If you and your attorneys have already decided it's in your best interest to plead guilty, then a proffer is a lot of times a very, very important, significant factor meeting to attend and something could help your case because the government may want to use you as a witness and they need to gauge your credibility and see how you are and that could help you in the end to get a better sentence. So ordinarily, I don't have a problem if you've already done all the work with your lawyer and you've decided that this is the right route. You already know you're going to plead guilty. But if you haven't decided that, that's where you have to proceed with the most caution as possible. So if you already are thinking about taking a case to trial, then I'm really hesitant about bringing somebody in because if I don't have a good sense the government may back down and dismiss charges, I don't want to give the government a free look at our case and our defense and have the next six, eight, 10 months to try and diminish know our defense for a case and and this is something i think that happened in our trial with owner one and two the proffer right i've never seen a proffer interview statement recorded right so what happened there is that since there's no recording of what owner two said then the government brings in the agents who write a report based on their best recollection of what was said and you know you can a lot of times people hear something and interpret it differently or they're physically writing down on a notebook in the interview and that's not you know ai that's not a transcription that's not a recording and six months a year two years later all of a sudden that interview may come extremely important and there's two, if not more versions of what was really said. And that can be really problematic in a case. So some of the other things you gotta be careful about with a proffer is I would keep it limited. I would make sure that your attorney is in there taking notes. So to have a witness as to what was said and maybe sometimes you insist on a recording or a transcript. And then no side can claim something was or was not said.
SPEAKER_01:Yeah. And I've seen problems like that too, where people, there's so much disagreement about what was said in a proffer. But yeah, it is really important. If you're going to do it, prep and take really good notes during the proffer. It's really, really important for both sides. Okay. So unfortunately, the proffer here, owner two's proffer, It clearly did not change the government's view of these guys. And they went ahead and charged owner one and owner two. Jonathan, can you describe the charges and what owner one and owner two were looking at here? Sure, sure.
SPEAKER_02:So there was basically, in the end, there was four charges I believe we were dealing with. There was a fifth one. They were originally indicted on aggravated identity theft. And I think, Stephen, I think to our credit for being diligent and researching, we were able to convince the government to drop that charge before trial. So I don't remember exactly when it was, but at least then that was an important aspect of the case that we didn't have to worry about trial preparation for that particular charge. But the four charges that were still part of the indictment as we went towards trial was conspiracy to pay and receive healthcare kickbacks. And that's also known as the anti-kickback statute, AKS. So that's a conspiracy, so it's an agreement two or more people to commit that crime. And then they also charged the crime itself, which was payment of illegal healthcare kickbacks. So the actual violation of the anti-kickback statute. And then the second set of charges was a conspiracy again, so the agreement to commit healthcare fraud. And then the fraud itself, there were individual charges of healthcare fraud. So those are the four charges. So it's really two different buckets that we were dealing with.
SPEAKER_01:Yeah. And each of these charges carried their own various penalties and that which, you know, in order to face. But also the key thing is each of these charges have specific elements that the government has to prove beyond a reasonable doubt in order to get a conviction. And that's really important because When you're dealing with federal crimes, especially crimes like this, you have to know exactly what the government has to prove, and you have to know exactly what you're defending against. And the key thing for both the healthcare fraud charges and the kickback charges is this concept called willfulness. I think this element actually gets overlooked a lot, but I think it's actually the key to criminal cases like this. Because Basically, look, we all know, I think everyone listening to this podcast knows, there are lots of times where people make mistakes in terms of interpreting regulations, in terms of billing, plenty of times where people make mistakes. Mistakes aren't crimes. What is a crime is when the government can prove willfulness, meaning that the person actually knew that what they were doing was illegal and did it anyway. Not with the benefit of hindsight, not second-guessing themselves years later at the time they knew it was illegal and did it anyway. That, I think, is the key thing that often gets overlooked because it really does go, and it really goes to what the individual person was thinking at the time. So, wolfeness is kind of this concept that comes up a lot in the kind of cases that Jonathan and I end up doing. And so, we will talk a little bit more about that. So, Jonathan, can you give some examples of like what Like what really, what are some good examples of willfulness that you've seen?
SPEAKER_02:Sure, sure. So the most common one I see in a lot of the doctor cases where I represent folks, you know, they're investigated, maybe their records were lacking, incomplete, or sometimes no records altogether. Somebody may go back into their electronic health record system or go into their computer and create records. fake records. For instance, that you, Stephen Lee, went to the doctor last week and was evaluated, you were tested, etc. It never happened. But the individual may put an entry in the electronic health record system, which is troublesome because they're all date stamped and you know when the records were entered, and that creates a big problem for our purposes. Or If it's a computer going in and just creating a document, one of the first things the FBI may do is search somebody's computer and the forensic search will show creation of all documents and there's a date stamp and there's a trail. So those sorts of things, that shows willfulness, right? Somebody's creating fake records. In the area of, say, kickbacks, where there is billing if there is the creation of fake invoices. right without a doubt something was fake showing that services were delivered or you know that there were tests done and now there's going to be billing or some sort of invoicing uh is an absolute example of something which was done with a willfulness to to break the law i mean it's it's pretty much right the specific intent to do something the law forbids right you're doing it with a bad purpose or to disregard the law so if you're going to create fake documents that's that's that's a tough order to overcome on our end.
SPEAKER_01:Yeah, and I think the tricky thing in a lot of the cases that Jonathan and I end up doing is kind of like seeing where is that lie? Is it really enough to show willfulness or is it not? Fake documents, fake documents that are impossible to believe, things like that, I think that is very powerful evidence of willfulness in a lot of cases. When I was a prosecutor, I did have a case once where a doctor was told by a colleague, I think what you're doing is fraud. And he kept doing it. That was pretty good too. Wait a minute, you
SPEAKER_02:couldn't defend that one?
SPEAKER_01:Well, I prosecuted that one and we won. That was pretty good. But it really depends. And so that's a very fact-specific thing. And it really is about the individual person. Because the big thing is that it has to be willfulness for that person at that time. Not what Jonathan or I or what the prosecutor might have thought if we had been the person at that moment in that time, what the individual defendant or business owner or person was thinking. So, and that gets tricky. And basically, look, Jonathan and I, we thought, looked at this case and we both of us thought the government didn't really have the clear evidence of willfulness that the government thought they had. And we think that they rested pretty heavily on some assumptions which we had to deal with at trial. So one big assumption was that the government, I think, thought that owner one and owner two actually understood every nuance of the anti-kickback statute and every nuance of the Medicare regulations involving DME. They didn't. As you may have heard from part one, they thought they knew things, but they were getting a lot of bad advice from the first biller they were working with. And so they believed a lot of things were actually being done correctly when they weren't. That was one big thing. The government also thought that there was just so much money involved, they must have known that this was improper. That's really in the eye of the beholder. Okay, I think. And they did not think that. They did not think that based on their life experience and based on what they were hearing from the biller. Another big thing the government tried doing was talking about customer complaints because there were customers who complained. But that really, to be honest, that was taken a lot out of context. And we'll talk about that a bit later on when we talk about the trial. And another big thing the government relied upon, I think, in thinking they had willfulness is they had this one particular complaint. audit letter that was sent by the auditor. That was a huge part, we think, of the government's case and why they thought they had a strong case. It wasn't. It was not what the government thought it was. And we'll come back to that in a little bit. But basically, when you talk about willfulness, one of the big issues really is distinguishing between what's actual knowledge and should have known, right? Because you should have known better. That's not the same thing as actually knowing, and it really should be actually knowing in order for it to be a criminal case. One of the big things I think about a lot is there's this idea out there called truth default theory. And if you haven't heard about it, I highly recommend reading Malcolm Gladwell's Talking to Strangers, because that really does talk a lot about this concept. And I think it really helps explain this whole idea, because I think what happens to owner one and order two is, They trusted the people they were working with. They trusted the biller that they were originally working with. They trusted the marketer whom the biller had recommended. And they didn't see the red flags that were so obvious to the government with the benefit of hindsight. And because... Truth default theory predicts, and I think this largely holds, that when you're working with people, you generally assume people are telling you the truth. You default to truth. You don't second guess every single thing everyone tells you because we just don't go through life that way. That's a big problem, I think, because they kind of assumed that they were being told the truth and they weren't. And the government comes in later on and the government thinks that they knew everything and they actually knew that everything was a sham when it wasn't. So anyway. So look, Jonathan and I get involved. We try having some talks with the government. We try to see if there's any way to resolve this case without a trial. And unfortunately, we go to trial. There's no other way around it. So it was a long trial. It was three weeks stretching into the fourth. There was a lot going on. But there's a few things that we wanted to talk about here. So the first, because again, this can apply in a lot of other cases, is There was a lot of issues involving attorney-client privilege. So that's something where we don't get into all the details, but both owner one and owner two had basically, they did consult lawyers during the course of running their businesses. And basically, one of the issues that comes up a lot of times in criminal cases is whether people will waive attorney-client privilege. And so this is something that we had to consider and figure out how to navigate. And so, Jonathan, can you talk about how we did it without getting talking about what the substance of those communications, how we navigate the privilege issue?
SPEAKER_02:Sure, so when you talk about attorney-client privilege, it's discussed a lot pre-trial with a lot of defendants and a lot of lawyers. Maybe we could use this in trial, but it's not actually used very much, Stephen, right? I mean, over the years, I mean, I've practiced over 25 years, a handful of times have I ever seen it really used. And it's a very, very difficult concept But it's a very powerful defense for somebody charged in a trial because if you truly relied upon what a lawyer told you, then there's no willfulness. You didn't try to break the law. You relied upon a lawyer. So it's something that if there's some evidence of it existing, you wanna really do your due diligence and try and use it. But it gets dicey. in a trial or pretrial because the government's demanding to see your evidence. We have the rules of discovery in trials in federal court where the government has to give the defense all the evidence which shows that a crime was committed or shows that somebody may be innocent of a crime, right? For years, Steven, you always turned over all your discovery, even if it hurt your case. That was your obligation as a government lawyer, and you totally abided by that obligation. The defense has a little bit of a different obligation, right? If you intend to use something in trial, you do have to turn it over. It's part of discovery. It gets a little different when something is privileged, right? What we talk about with our clients, attorney client privilege confidentiality everybody's heard those terms for quite a while and and there's a lot of information whether it be emails whether it be documents and things that go back and forth so in our case with owner one and owner two with regard to those lawyers you told the audience that our client said hired there was a lot of information that that was passed back and forth. And we thought a lot of that information showed our clients were not guilty or innocent. But when you're preparing for a trial, you don't have the obligation to turn that over a year in advance or two years, because you're not quite sure if you're gonna use that defense. You don't have to use that defense. If the government's case is so weak, Or if you're still trying to convince the government to drop a case, you may not want to turn over what's really the gold standard of it all, your attorney-client communications, right? You don't want to turn that over unnecessarily. So in our case here, the government was demanding, saying, if you're going to use this defense, we want to see the evidence. So then the judge has to balance both sides. The defendant's constitutional rights communications between them and their attorneys versus the government's right to know the evidence that's going to be used in a trial. So we did so much research, Stephen, all the legal research of how all the courts in the country have dealt with this issue. And it was wide ranging. Some judges said, no, the defense doesn't have to turn it over to the day of trial. Whereas some other judges said, no, you have to turn it over four months in advance of trial. So you and I were trying to obviously do what's best for our clients, and we were fighting each step of the way to make sure their rights were protected. So I think we struck a balance and were able to have the judge understand the delicate nature of it. And so what we did, we crafted more or less an agreement where we would turn over certain documents, which were privileged, so the government had the opportunity to prepare so they weren't unnecessarily surprised at trial or something that could delay the trial, but it was not considered a formal declaration that we waived the privilege. So we sort of got it both ways, right? We turned over the information, but we still reserved the right to decide later at the trial if we were going to use that defense. So that was the balance I think that we struck very nicely.
SPEAKER_01:Yeah, and I will say we had a lot of conversations with the government, and the government actually ended up agreeing with us on some of this. So I give them credit for that. True. Because they're right. It was trying to find the right balance, and I think we struck it. And then we did actually– or Jonathan, you did something very interesting in terms of the actual trial. So I'll set it up. So when it comes to the actual trial– You know, this is a very complicated subject matter. Lots of things going on. And so the government goes first and gives this opening statement. And then I got up and I gave an opening statement on behalf of owner one. And I said in my opening statement that owner one is going to testify and he's going to explain to you everything that happened. But. was very careful to not get into the details of that i did not mention attorneys because at that point we still had not waived and i still was we still we still want to see what the government actually put in before we made a final decision about waiver you what did you do when it came to owner
SPEAKER_02:two so traditionally in every trial tv movies or in person government goes gives their opening statement and if there's more than one defendant like we had the first defendant's lawyer gets up there gives the opening statement and the second one gets up there and gives you an opening statement and a lot of times especially when there's a joint or unified defense theory like we had the second lawyer will get up and say almost like what he said right it's it's you're not really adding much anything different. So it's almost just repetitive and there's not a lot of a strategic or tactical difference or advantage by doing that. So what we decided to do was to reserve our opening statement. So the way that would work is we would hold it and then we would present it after the government was done with all their witnesses, all their evidence, the weeks later. So weeks later, and then we would have the opportunity, if we wanted to, is to give our opening statement before the defense would put on its witnesses and evidence in a defense case. I can tell you that most lawyers, even if they've tried hundreds of cases, right, Stephen, probably have never used it and never seen it, right, that you would reserve your opening.
SPEAKER_01:So... Yeah, I never saw it. I never saw it before in my time as a prosecutor and my time as a defense lawyer. I've never seen it happen before. I thought it was really effective. It
SPEAKER_02:was hard. I'll tell the folks why it's hard, right? So, I mean, you got up there, you gave a powerful, strong opening, basically telling the jury, looking them in the eyes and telling them why owner one was not guilty of a crime. And this is after the government got up there and said, why owner one and owner two are really guilty of these crimes. And then I'm sitting there next to my client and it felt like we were shrinking in our seats when we heard the government. And then when we heard you, it's like, okay, great, we're getting a little taller. But then we weren't saying anything. So it was hard. It was hard not to be able to get up there and tell the jury why the government has it wrong and why the evidence is gonna show something totally different. But we got through it, we got through it. And the thinking was this, the benefit of holding your opening statement for three weeks later, it's sort of those ideals of recency, you know, that now the jury's gonna hear from you. You're gonna tell them, in an opening statement, you're supposed to say the evidence will show A, B, C, D, you know, it's the map, if you will, of sometimes of what the case is about. So now the jury gets to hear somebody new, somebody different telling them about the case. after they've just heard the government's presentation and it refocuses and redirects or reframes the defense and the issues, right? Because you did a great job, but it was three weeks ago. It's like, what have you done for me lately? So now I'm getting up there and we're together and I'm now, and a lot of times to begin a trial, there could be 10 issues. The government presents its case and a defense attorney is like, wait a minute. No, there's only like four issues now, right? Because the government failed to put forth evidence for all the rest of it. So now we're refocused, we're reframed, and we're fired up, ready to attack the government's case. So I think, you know, all that being said, it gives you that direct connection with the jury. You're looking them in the eyes now and you're telling them, here's what you're gonna hear in our case and you get right at it. Whereas three weeks ago, they would have to be waiting and they could even forget what you had said. So it was really, I'd say invigorating at that point because it, charged us up and it's almost yes it's an opening statement but i also call it like a mini closing statement or closing argument right because you're getting right up there and you're basically telling what the evidence is going to be that that day the next day and then pretty soon after you're going to give closing arguments for the case
SPEAKER_01:yeah it really was a nice way to deal with the privilege issue because again Owner one and owner two wait as soon as Jonathan got up there and started his opening. Because that was the big piece that I couldn't talk about during my opening for owner one, but Jonathan could. At that moment, we waved and opened the doors and went into it. And we were able to thus provide a lot of context that the jury hadn't heard before in the defense case.
SPEAKER_02:Okay. Let me add one last thing on that, Stephen. Remember, strategically, too, if we had waived at the beginning of the trial for your opening statement, the government could have called our clients' lawyers, right, in their case, right? I mean, that was a big consideration, too, but we didn't waive, so they couldn't call them as the witnesses, and once we waived the privilege in the second opening or the reserved opening statement, the government had already finished their case. So we were really in more control too, of the presentation of the defense theory and the defense strategy and case itself.
SPEAKER_01:Yeah. Now the government did end up calling to the former attorneys in the rebuttal case. But by that point, the jury had heard from owner one about what had happened in full. So- Right. Let me get onto, I wanna cover a bit more from the trial. So one big thing that came up and I think is useful for people hopefully listening to this is really just kind of the complexity of the Medicare regulations at issue here. And look, I really do think the big things to keep in mind when dealing with this is like scrutinize what the government says, okay? Because it's very confusing and challenging for anyone to keep up with Medicare stuff. including the government's own people. And that came up really a lot through the trial. Basically, I think the government actually misread a lot of the regulations. I think they misread the anti-kickback statute, and that was a big part of our defense kind of pushing back on those things. And I think the most clear example of that came shortly before trial when the government sent us some charts that they plan to use at the trial, including some charts that claimed that our clients had violated certain Medicare regulations that didn't actually exist. Like the government's own people had misread the regulations. They had basically in two ways. One, they said that some things were improper based on the current regulations as of 2024, but which of course were not in effect back in 2018, back in 2019 and 2020. And second, there was something that were still not even prohibited in 2024 when the trial happened. So, We pushed back pretty hard, pretty fast on that, and I will say we filed a motion, constitutional violations, ex post facto clause, all of it. Again, to its credit, the government did back down the next day and withdraw those charts. But it was a really big thing, I think, to keep in mind because you really do gotta scrutinize this stuff for yourself. Don't just accept the government's version. In fact, even the government's own witness admitted on cross-examination that it was, quote, impossible to keep up with everything for Medicare. So, because it is, it's really hard. And again, this also goes back to why the willfulness aspect is so important. People make mistakes. It happens all the time. Even government people make mistakes. Mistakes aren't crimes. Okay, so that was one big thing we had to deal with. Another big thing that we alluded to is that owner one testified. And That was something that we had decided before trial and we're so sure of that I said it in opening statement that he was going to testify. And I thought it was really important because we really wanted the jury to understand things from his perspective, right? Because that's the thing. If you hear about it, when the jury hears during the government's case in chief, it's all how the government has packaged things or put things together with the benefit of hindsight, you know, and construct it. That's what the government found, and they did find lots of problems. They found lots of things that the marketer had done wrong. They found lots of things the biller had done wrong. But really, the core of the trial was not about that. It was about whether Order 1 and Order 2 knew that the marketer and the biller were doing all these things wrong and that some of the things they were doing were very problematic. So the best way to show that is really have Order 1 explain it for himself, and that's what he did. He testified for three days going through everything. And we are very upfront about that. Everything the government has thrown at these guys, owner one is going to talk about. And we went chronologically through everything to show what he knew, what he didn't know, the mistakes he made, things like that. We went through all of it to really explain things and put things in context. So for example, We actually had him explain his understanding of the anti-kickback statute and actually go through some of the articles that he read at the time. That was important to understand what he was thinking and to show that he did not understand some of the government's theory. Some of it was pretty aggressive. He did not understand the AKS to prohibit some of the things the government thought were illegal. Another big thing that we did was show things like those customer complaints. Because we showed, yeah, he did hear about the customer complaints. And here's what he did in response. And we show that he listened to audio recordings with the customers that actually were different from the customer complaints. And he testified about how he and owner one actually spoke with some of the customers who actually basically thought like, okay, yeah, actually, you know what, I might have had you confused with another company, things like that. So we really kind of put it in context. And we also showed that the customer complaints were actually a relatively small percentage of the overall stuff. Because if you take it out of context and you hear about 10, 15, 100 complaints, it sounds pretty bad. But not when you realize this is out of thousands, right? Then it's like, okay, it's not good, but it's also not as powerful as the government might have suggested initially. The other big thing we did was we really went chronologically. So it was kind of, so you really got to see it from his point of view and how his knowledge changed and evolved over time. And so we did that. But also the really big thing we did was we talked about that audit letter that came up. Because again, the government had made a big deal of the fact that Medicare had audited, you know, owner one and owner two's business and had sent a letter to to their business, kind of pointing out all the problems that the auditor found. The thing is, she sent it to an address that owner one and owner two had stopped using months beforehand. And so they had actually no proof that they actually ever received the letter. And that was one of the big things that we showed. And we pointed that out from the very beginning of owner one's testimony. Because the government claimed, when we first brought out the idea that the audit letter wasn't there and should have existed, the government kind of backed, well, you know, it might've happened. It's impossible to find the delivery receipt at this point in time. So when owner one testified, that's actually the first thing we covered because owner one's wife actually went online and found the receipt herself, you know, because you have to scroll further down on the webpage to pull it up. And she did. And it really showed that the government had really botched this one part of their case, and in fact, a pretty important part of the case. And so that was a big part of how we kind of went through everything to really kind of show owner one's story and really try to get the jury to see things from his point of view, which was extremely important for the willfulness aspect.
SPEAKER_02:Okay, yeah. I have two quick things on that statement. Number one is that your preparation with owner one was so thorough and so detailed, and you spent so much time together that by the time you came to court or he came to court to testify, I mean, the hard work had already been done, right? I mean, you guys really put it together nicely. So that's number one. Number two, because of his testimony was so good and so complete, and it wasn't just me or I. He included owner two because they were business partners. So the fact that owner two did not testify in a trial is partly true. Remember, because I argued, he did testify because owner one was so complete, so descriptive, and that was because of all the work that you all did together. So it was another, I guess, important strategy development by using a unified joint defense because we had one defendant, one client testified, but he really testified for both because they had done everything in this partnership together.
SPEAKER_01:Yeah. No, and that was pretty clear from the first time that Jonathan and I got hired, to be honest, that this was definitely, this was a case where the government's case, it was pretty much identical against both guys. And so it really was, it made sense. Other cases might be different, but this was a case where they definitely stood together or went down together. And it is really important to kind of go through all that. So, okay. So, owner one testifies. Three days, the government cross-exams him for about, I guess, you know, I guess about maybe about three quarters of a day. Government puts on a rebuttal case. Everyone rests. We do closing arguments. And then the jury gets the case and they start deliberating. And this was a case where they deliberated for a while. So, Jonathan, can you talk about kind of how that unfolded and how the verdict ended up?
SPEAKER_02:Sure. So whenever somebody has the unfortunate experience of being a defendant in trial, the whole experience is just so much, right? So overwhelming. But once everything is over and it's in the jury's hands, so they're in the room deliberating somebody's future, their destiny, it's unbelievable the just amount of emotion that goes on. So we hang around the courtroom, we go downstairs, we do these certain things, But we have to be accessible in case there's some issue to get back to court. And I think in this case, the jury had questions or submitted notes to the judge four or five times. So when we get a call from the court staff saying, can you come back to court? We don't know if it's a verdict or if it's a question from the jury. And I think it was, Stephen, the first four times there were questions. And of course, each question has its own you know, hermabilities and what we want the judge to say to him. But, you know, it's all just so much to endure and to absorb. So I remember the last time, I think it was number five, Our clients were going to go out and get something to eat. And then we got a call that there was another note. We thought a note, get back to the courtroom. So we got back and waiting for the clients. Everybody rushes in half the family members were there. The other weren't because if it's just a note, you know, we will figure it out. We'll come back. But then we're all in the courtroom and the court clerk said they have a verdict. And it was just like, whoo. like a drop in an elevator. It was like something so surreal. And sometimes it's worse when you have to plan for something. We had no time. The jury was coming in with a verdict. You're sitting next to our clients and you're just like, we have obviously no idea, but we didn't have a talk that we usually talk. And it's... all of a sudden it's all gonna happen. And it was something like almost out of a dream sequence, I think right there.
SPEAKER_01:Yeah, and I remember standing next to my client and basically knowing that his life hinged on what was about to happen. And standing next to him while the judge read count after count not guilty to every single count was an amazing an amazing moment for for him owner two for us i mean just to have to know that this said that basically the jury understood the jury the jury got it and to especially because there have been indications earlier in jury deliberation that they might not have reached an unanimous verdict but to know that they they did come through and see all that was amazing. And then actually, I will say that Jonathan and I and the government and the judge, we actually all went back and talked to the jurors afterwards to hear their thoughts about the case. And it was very rewarding to hear how seriously the jurors took it, how much they considered the evidence, And how much they got, ultimately, that owner one and owner two, they made a huge number of mistakes. They made some mistakes in trusting people and things like that, but that they were trying to do the right thing. And that's not willfulness. So that was really great. And really, it's an amazing moment. Yeah,
SPEAKER_02:I can tell you that. Look, we don't have to like our clients to give 110%. We've won a lot of trials. I've won a lot of trials for clients I don't particularly like. I don't care. But when you like your clients, and we liked our clients a lot. They're good people, beautiful families, little children that depended on them for their future. When you win a case like this for clients that you like, it's just even so much more rewarding. of just an achievement and something that just makes you so fired up and feel so good about what you do.
SPEAKER_01:So, yeah, we just want to hope you've enjoyed hearing about this real life example of how people got cut up in a lot of the aftermath of Brace Yourself, how people kind of got misled by people and how they kind of got through a lot of very difficult circumstances to a lawyer and a biller you heard about in part one and through the work that we did in terms of the criminal case. So I think, I really hope that you enjoyed this. Jonathan, any final takeaways for the audience?
SPEAKER_02:No, you know, Steven, I'm so excited now having gone through this again with you. I look forward to our next trial.
SPEAKER_01:All right. Well, thanks, everyone. And please reach out if you have any questions. Again, we hope that this has been helpful and best of luck to everyone.
SPEAKER_02:Take care, everybody.
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