U.S. v. Babaria (Summary)

FRAUD & ABUSE/ANTI-KICKBACK

U.S. v. Babaria, No. 14-2694 (3rd Cir. Dec. 31, 2014)

The federal Third Circuit Court of Appeals affirmed a court’s upward adjustment in a medical director’s sentencing, holding that the medical director was in a position of trust when he committed the wrongdoings. Plaintiff, a medical director, pleaded guilty to violating the anti-kickback statute. At sentencing, the court ruled that the medical director abused his position of trust and adjusted his sentencing guidelines upward. Facing a sentence of 70 to 87 months in prison, the medical director appealed the upward adjustment, arguing that he did not use his position of trust when making illegal payments for referrals.

The Third Circuit held that the medical director used his position of trust to supervise and conceal the payments of kickbacks, thus the upward adjustment was appropriate. The court explained that the medical director lacked supervision because his decisions were given considerable deference; therefore, he was in a position of trust. This lack of supervision helped the medical director facilitate his illegal payments because they were extremely difficult to detect.