United States v. Devore, Marla A.

In the

United States Court of Appeals

For the Seventh Circuit

____________

Nos. 02-4222 & 02-4224

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ROBERT T. MITRIONE and MARLA A. DEVORE,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Central District of Illinois.

No. 00-CR-30021—Jeanne E. Scott, Judge.

____________

ARGUED SEPTEMBER 22, 2003—DECIDED FEBRUARY 9, 2004

____________

Before ROVNER, EVANS, and WILLIAMS, Circuit Judges.

EVANS, Circuit Judge. Dr. Robert T. Mitrione, a psychia-

trist, and Marla A. DeVore, his office manager, were in-

dicted on charges of Medicaid and Medicare fraud. The

alleged fraud involved billing for services that were not

provided (ghost billing), overstating what services were

provided (upcoding), and billing for services provided by

others but declaring that Dr. Mitrione provided the service

(substitute billing). The bulky indictment charged Mitrione

and DeVore with one count of conspiracy to defraud the

United States, in violation of 18 U.S.C. § 371, eight counts

of mail fraud, in violation of 18 U.S.C. § 1341, five counts of

filing false claims, in violation of 18 U.S.C. § 287, and one

2 Nos. 02-4222 & 02-4224

count of health care fraud, in violation of 18 U.S.C. §§ 1347

and 2. After one of the mail fraud counts was dismissed,

a jury, after a 3-week trial, convicted Mitrione of everything

except two of the counts and DeVore on 10 of the 14 counts

against her. After the verdict, the defendants filed a motion

for new trial based on newly discovered evidence claiming

that a government witness committed perjury during the

trial. The district court judge found that perjury indeed

occurred and that it affected all of the defendants’ counts of

conviction except the two that only involved substitute

billing. A new trial was ordered for all but these two counts,

but the government decided not to retry the case. Mitrione

was sentenced to a term of 23 months and DeVore to 15

months. Restitution for each was set at $11,255.65.

Mitrione and DeVore appeal, raising a number of issues,

but we will mention only those that have arguable merit.

Before getting to that, we begin with the facts, with an

emphasis on the “substitute billing” charges. And the facts,

as they must be at this stage of the case, are presented in

the light most favorable to the verdict.

Dr. Mitrione established a psychiatric practice in Spring-

field, Illinois, in the early 1990’s. With his wife, Cecelia,

who was his assistant at the time, he learned the billing

aspect of the business. In 1991, Mitrione applied to become

a Medicaid provider with the Illinois Department of Public

Aid (IDPA), the agency that administers the program in

Illinois. Both Mitriones received IDPA billing training,

which included the handling of forms and CPT1 codes. Dr.

Mitrione also received an IDPA provider manual for

physicians and signed an IDPA agreement which included

specific requirements for billing Medicaid. He agreed to

1

CPT refers to “Current Procedural Terminology.” CPTs are

listed in a book of codes used for medical billing which is pub-

lished by the American Medical Association.

Nos. 02-4222 & 02-4224 3

comply with all current and future policy provisions as set

forth in the applicable medical assistance handbooks. At the

time, one policy provided that physicians could not be paid

under Illinois Medicaid for psychiatric services provided by

employees under their supervision. The handbook for

physicians provided:

The provision of psychiatric services is limited . . . and

must be personally provided by the physician who

submits charges. Services provided by a psychologist,

social worker, etc. are not reimbursable.

Mitrione also enrolled as a provider with the Medicare

Part B system, which, like Medicaid, is a “fee for service”

program. Under certain circumstances, Medicare (unlike

Illinois Medicaid) allows providers to delegate certain

psychological services to others in their employ. Medicare

regulations require those services to be (1) medically nec-

essary; (2) an integral yet incidental part of a physician’s

professional service; (3) commonly provided in a physician’s

office; (4) either rendered without charge or included in the

physician’s bill; (5) representative of an expense incurred by

the physician or nonphysician in his or her professional

practice; (6) performed under the direct supervision of the

physician, nonphysician, or physician-directed center; and

(7) initiated or managed by the employing physician.

The Medicare manual states that to fulfill the “direct

supervision” requirement, a physician—not a proxy—must

be present in the same office so he can intervene in case an

emergency arises. The Medicare rules did not allow pay-

ment for the services of unlicensed mental health providers,

even if a physician was in the area when the service was

provided.

In 1992, Mitrione expanded his practice to include patient

care at the Mental Health Center of Central Illinois (MHC),

a state-funded, nonprofit mental health clinic in Spring-

4 Nos. 02-4222 & 02-4224

field. Mental health clinics funded by the State of Illinois

differ from private physician practices. Specifically, these

clinics are permitted to bill Medicaid for nonphysician

services.

In September 1994, the Mitriones fell behind in their

billing. It was at that time that Mitrione brought Marla

DeVore, a counselor whom he met at MHC, into his practice

as a new office manager. He also moved his office to another

site and renamed it Mitrione and Associates (M&A).

Mitrione and DeVore apparently got along well— they were

married in 2001 (Mitrione and Cecelia were divorced in

1997) after the indictment in this case was returned.

When she came on board, DeVore recruited Shari

McGowan, a nurse at the MHC, to help her set up a billing

system. DeVore taught McGowan how to enter billing in-

formation on M&A’s computer.

DeVore and Mitrione designed a “superbill” which

contained the five codes primarily used in the practice.

Typically, the doctor or a therapist who provided the service

placed his name on the superbill and added a checkmark

next to the code to indicate the service provided. The

superbills, therefore, provided essential information that

M&A employees used to prepare claim forms. The evidence

at trial disclosed that soon after Mitrione and DeVore

became aware of official inquiries into their billing prac-

tices, they ordered the destruction of several years worth of

superbills.

Mitrione and DeVore instituted a policy to bill IDPA

for the services of nonphysicians and caused their billing

clerks to substitute Mitrione’s name for that of a non-

physician on the claim forms sent to IDPA. To do this, the

clerks changed the name of the service provider when

manually filling out the IDPA billing forms.

Nos. 02-4222 & 02-4224 5

DeVore reviewed the claims before they were sent to

Medicare, IDPA, or various insurance companies. She also

reviewed rejected claims and instructed McGowan how to

rebill. If McGowan had a problem with a CPT code or with

a billing issue that DeVore could not resolve, she asked

Mitrione what to do.

In 1995, Mitrione hired a few nonphysicians to provide

services to M&A’s clientele. For example, he hired a social

worker, Dana Ingram, and counselors Ron Havens and

Cathy Walters. When those employees quit, he hired Terry

Kuethe Goff, an unlicensed intern who was working to

complete requirements for an advanced psychology degree,

and Walter Woods, a drug and alcohol counselor.

Woods had been a director of Gibralter, Ltd., a failing

drug and alcohol rehabilitation center in Springfield. Cer-

tain drug and alcohol centers qualify for a special certifi-

cation from the State of Illinois similar to the provision

for mental health facilities. Through this certification, a

center may submit billings for nonphysician counselors

working under the supervision of a physician. During this

time, however, there was a moratorium that precluded ad-

ditional drug and alcohol certifications of this type in

Sangamon County, where Springfield is located.

Over the next several months, Mitrione, DeVore, and

Woods made several unsuccessful attempts to secure the

drug and alcohol counseling licenses and billing privileges

that belonged to Gibralter and to obtain similar licenses

and billing privileges for their own practice. The Gibralter

Medicaid certificate was ultimately terminated, and M&A

was unable to obtain authority to bill Medicaid for nonphy-

sician drug and alcohol services.

Since Woods held only an alcohol and drug counseling

certificate, he was not licensed to provide mental health

services. Both defendants knew they could not bill Medicaid

for Woods’ services. Nevertheless, shortly after the

6 Nos. 02-4222 & 02-4224

Gibralter transfer was denied, Woods’ role was expanded by

assigning him Medicaid clients. Mitrione and DeVore

directed him to counsel patients with diagnoses other than

drug and alcohol addition. Goff objected to both Mitrione

and DeVore, saying that Woods was acting beyond his

certification. Mitrione and Devore also assigned Goff a full

caseload of Medicaid and Medicare clients, despite her lack

of license and private clinical experience.

The essence of the substitute billing charges was that

Mitrione and DeVore assigned Medicaid and Medicare pa-

tients to counselors and therapists for treatment and then

billed as though Mitrione either provided the service him-

self or directly supervised the service.

Shortly after she joined M&A, DeVore asked Sheryl

Walters, a billing employee with MHC, how M&A could bill

Medicaid for counselors’ or therapists’ services. Walters

explained that M&A could not bill for those services

because it was not a licensed not-for-profit mental health

clinic. Shortly thereafter, Walters told Mitrione the same

thing when he inquired about billing for therapists. During

an advanced IDPA seminar, which Mitrione attended in

October 1996, it was confirmed that Medicaid would not pay

for psychiatric services performed by non-physicians.

In the spring of 1996, M&A formed a therapy group for

the survivors of sexual abuse (SOSA). The group was made

up of women who survived sexual trauma, molestation, or

rape in their childhood. Neither DeVore nor Goff, who in-

itially ran the group, were licensed to practice in this area.

The first SOSA group meeting was held in May 1996.

Because of the abuse suffered by members of the group,

they were often fragile and volatile and, as a result, dis-

cussions during the sessions were at times personal and

painful. According to a psychiatric expert, if not handled

carefully, the group members could have been hurt further.

Nos. 02-4222 & 02-4224 7

Shortly after the program started, DeVore and Mitrione

assigned Woods to co-facilitate the SOSA group sessions

with Goff. When Goff objected that Woods was unqualified

to co-lead the group, they reminded her that she was a “su-

pervisee,” that is, an intern who needed Mitrione’s supervi-

sion for her advanced degree and eventual license. Goff

nevertheless complained weekly to Mitrione that Woods’

actions and demeanor in the group were inappropriate.

Woods, too, told both DeVore and Mitrione that certain

therapy sessions were beyond his training levels, though he

continued with them. He was even assigned to do individual

therapy with some members of the group. He also handled

several group sessions by himself. The defendants then

billed as if Mitrione had provided the service. Some of these

billings for Woods were signed and submitted by DeVore.

In addition to billing IDPA, Mitrione and DeVore billed

Medicare for Woods’ work with the SOSA group and coun-

seling of clients. Medicare would not have paid for the

service if it knew that the group was being run by a drug

and alcohol counselor with no other licensing, certification,

or education. Even if Goff had been in the group with

Woods, Medicare would not have paid because Goff was not

licensed and Mitrione was not present in the office and

available to intervene if an emergency arose.

Unlike their defense to the ghost billing and upcoding

charges—that they were simply inept billers—the defen-

dants defended the substitute billing charges by claiming

ignorance of the rules. Mitrione claimed that he did not

receive the physicians handbook, or that he tossed it away

without reading it. DeVore, on the other hand, claimed that

she was unaware the handbook existed. In addition, both

Mitrione and DeVore claimed that Gary Vaughn (who died

before the trial), an IDPA representative, told them that the

substitute billing practice was acceptable.

8 Nos. 02-4222 & 02-4224

The evidence, however, demonstrated that Mitrione re-

ceived the physicians handbook (which contained the billing

prohibition) at least three times: (1) when he first enrolled

as a provider; (2) when he was trained; and (3) when he

attended an IDPA seminar in October 1996. Additionally,

Mitrione pointed to the manual in his office when inter-

viewed by investigators.

Moreover, neither defendant mentioned to the investiga-

tors that Vaughn had sanctioned their substitute billing

practices. In December 1999, Mitrione phoned the IDPA

Office of Inspector General to inquire about the investiga-

tion and to try to convince investigators that any billing

issues were the work of a former employee. Mitrione never

suggested at that time that Vaughn sanctioned the im-

proper billing methods that were used. Nor could Mitrione

explain why the issue even came up with Vaughn, since

DeVore and he claimed that they did not know about the

prohibition against billing for nonphysician services.

We turn now to the defendants’ claim that the perjury

at trial tainted their convictions on the substitute billing

counts. During the rebuttal phase of the trial, the govern-

ment offered the testimony of Deanna Statler, an IDPA

auditor. She presented a summary which included informa-

tion about the frequency of ghost billing and upcoding.

Mitrione (DeVore, unless otherwise noted, joins all of these

arguments, and our references from now on to “Mitrione”

apply to both defendants), in defense, claimed that the

ghost billing and upcoding were just mistakes, but Statler

testified that these “mistakes” were almost always in the

defendants’ favor. The implication of this testimony was

that the defendants were lying because if they had just been

mistaken, there would have been as many mistakes against

their interests as there were in their favor.

Nos. 02-4222 & 02-4224 9

Statler’s testimony, however, was not the truth, the whole

truth, and nothing but the truth. She claimed she counted

certain things herself when doing her audit, but she

actually had others do much of it for her. She said she

excluded some numbers from her calculations but hadn’t,

which made the numbers look worse for the defendants

than they really were. This perjury, reasoned Judge Scott

in the district court, entitled the defendants to a new trial

on most, but not all the counts upon which they were con-

victed. We review the decision to deny the new trial motion

on two of these counts for an abuse of discretion. United

States v. Westmoreland, 240 F.3d 618, 637 (7th Cir. 2001).

In determining whether a new trial is warranted when a

witness presented by the government has lied, we have

traditionally used a test adopted 75 years ago in Larrison

v. United States, 24 F.2d 82 (7th Cir. 1928). Under the

Larrison test, new trials are granted when (1) the witness

is material and the testimony false; (2) the jury might

have reached a different verdict if it knew the testimony

was false or if it hadn’t heard the testimony; and (3) the

defense was taken by surprise by the false testimony or

didn’t learn of its falsity until after trial.

This old test puts our circuit at odds with other circuits

which, absent a finding that the government knowingly

sponsored the false testimony, require a defendant seeking

a new trial to show that the jury would probably have

reached a different verdict had the perjury not occurred.

See, e.g., United States v. Williams, 233 F.3d 592 (D.C. Cir.

2000); United States v. Huddleston, 194 F.3d 214, 217-21

(1st Cir. 1999); United States v. Provost, 969 F.2d 617, 622

(8th Cir. 1992); United States v. Petrillo, 237 F.3d 119, 123

(2nd Cir. 2000); United States v. Krasny, 607 F.2d 840, 844-

45 (9th Cir. 1979); United States v. Sinclair, 109 F.3d 1527,

1532 (10th Cir. 1997). But see United States v. Lofton, 233

F.3d 313 (4th Cir. 2000); Gordon v. United States, 178 F.2d

10 Nos. 02-4222 & 02-4224

896, 900 (6th Cir. 1949). We even criticized the Larrison

test a dozen years ago. See United States v. Mazzanti, 925

F.2d 1026, 1029 (7th Cir. 1991).

Today, we overrule Larrison and adopt the reasonable

probability test.2 In order to win a new trial based on a

claim that a government witness committed perjury, as-

suming as in this case that the government did not know-

ingly present the false testimony, defendants will have to

prove the same things they are required to prove when

moving for a new trial for other reasons. Defendants will

have to show that the existence of the perjured testimony

(1) came to their knowledge only after trial; (2) could not

have been discovered sooner with due diligence; (3) was

material; and (4) would probably have led to an acquittal

had it not been heard by the jury. See United States v.

Gonzalez, 93 F.3d 311 (7th Cir. 1996).

The defendants argue that Statler’s false testimony was

material and that it tainted their convictions on the sub-

stitute billing counts because it “tipped the scales” against

them. However, Statler did not testify about the propriety

of substitute billing or the defendants’ knowledge that such

claims were prohibited. Rather, she testified about the

frequency of ghost billing and upcoding. Statler’s summary

included services rendered by therapists other than

Mitrione, but it did not comment on whether those services

were reimbursable. So Statler was really not a material

witness with respect to the substitute billing counts.

Nevertheless, the defendants claim that Statler’s tes-

timony demolished their credibility, and without it the jury

might have reached a different verdict. We disagree. For

2

Pursuant to Circuit Rule 40(e), this opinion has been circulated

among all the judges of this court in regular active service. No

judge favored a rehearing en banc on the question of overruling

Larrison v. United States.

Nos. 02-4222 & 02-4224 11

one thing, the evidence against Mitrione and DeVore on

all counts, without Statler’s testimony, was strong. The

government also presented substantial evidence that the

defendants knew they were engaging in impermissible

substitute billing. Having reviewed this record, we do not

believe that the jury would have probably reached a dif-

ferent verdict on the substitute billing counts had Statler’s

testimony not been presented. And, we add, our review of

the record would not lead us to conclude that the jury would

have probably reached a result other than guilty on the

upcoding and ghost billing counts had it not heard Statler’s

rebuttal testimony.

We turn next to the defendants’ claim that the district

court erred in not granting a new trial because the prosecu-

tor referred to the September 11 terrorist attacks in his

closing remarks. Closing arguments were supposed to begin

on September 11, 2001, but they were delayed a day

because of the attacks. On September 12, the prosecutor

began his closing argument with this statement:

Ladies and gentlemen. Good morning. Our job just got

harder in the last 24 hours. We’re already facing an

incredibly difficult task as we’ve done for the last three

and a half weeks trying to sort this out. It’s now made

more difficult by the events of yesterday, the devasta-

tion that terrorism has brought to our country. But

that’s why we need to do this today. That’s why we got

out of bed today and came here. The very institutions

that these people seek to undermine must continue.

The district court overruled a defense objection to this

remark, saying the defendants would also have a chance to

comment briefly on the events of the day before. The pros-

ecutor then continued:

One of those systems is the system of justice. And that’s

one of our most important systems in the country, and

that’s something that we’ve all been a part of the last

12 Nos. 02-4222 & 02-4224

three and a half weeks. Every one of us. And that’s why

we need to redouble our efforts today to concentrate, to

stay on task, to get back to pay attention to the evi-

dence, no matter how hard it is after yesterday. What

we do today is important. It is important certainly to

Dr. Mitrione and Ms. DeVore. But it’s important to the

fiscal integrity of the Medicare program and Medicaid

program and the medical assistance programs. It is

important to our system of justice.

Mitrione’s attorney began his closing with the following

remarks:

Now, [the prosecutor] this morning tried to draw some

analogy or some connection between the events of yes-

terday and this case. I think he has lost all sense of

proportion and prospective [sic]. And I don’t want to

minimalize or trivialize the destruction of yesterday by

drawing any connection with this case. There’s no con-

nection.

DeVore’s attorney also commented on the prosecutor’s

remarks, saying “[o]ther counsel have commented there are

a lot of things going on in the world right now, but the most

important thing in the world going on as far as Marla

DeVore is your deliberations and what you think about her

conduct.”

We consider claims that a prosecutor has tainted a trial

with improper remarks under a two-step inquiry. See

United States v. Renteria, 106 F.3d 765, 766 (7th Cir. 1997).

We first consider the remarks in isolation. If they are

improper in the abstract, we then consider them in the

context of the entire record and ask whether they denied

the defendant a fair trial. Only if the remarks undermined

the fairness of the proceedings will we overturn a convic-

tion.

Nos. 02-4222 & 02-4224 13

There is nothing in the remarks by the prosecutor here

that would warrant a move to the second step of our in-

quiry. Even viewed in isolation, the prosecutor’s remarks

were not improper. In fact, given the horrific events of

September 11, we think it would have been strange indeed

if anyone connected with this trial and allowed to speak to

the jury on September 12—judge, prosecutor, or defense

counsel—failed to briefly comment on the attacks. The

prosecutor’s words were about terrorists and the need to get

back to business despite the devastating attacks. They were

not improper.

The defendants also argue that the Illinois statutes

underlying their convictions for Medicaid and Medicare

fraud are in conflict with, and therefore preempted by,

federal law. Judge Scott rejected this argument when it was

raised in the context of a motion to dismiss the substitute

billing counts of the indictment, finding that it ignores basic

rules of statutory construction and the State of Illinois’

discretion to adopt standards for its medical assistance

programs. We agree with Judge Scott’s treatment of this

issue and have nothing to add to it. See United States v.

Mitrione, 160 F. Supp. 2d 993 (C.D. Ill. 2001).

We now turn to two sentencing issues—one an enhance-

ment and the second a challenge to the restitution order.

Judge Scott imposed a 2-level obstruction of justice en-

hancement under U.S.S.G. § 3C1.1 on both defendants after

finding that they testified falsely at the trial. DeVore

contends that she did not testify falsely and that the district

court clearly erred in imposing the enhancement. Mitrione

says, in his main brief, that he adopts the arguments in

DeVore’s brief; DeVore’s brief, however, neither mentions

Mitrione’s obstruction enhancement nor argues that it was

improper. The government’s brief pointed this out, and

Mitrione’s reply brief ignores the point. So, as to him, this

argument is waived or, more charitably, rejected as not

developed.

14 Nos. 02-4222 & 02-4224

Our review of obstruction of justice enhancements is “very

limited.” United States v. Ramunno, 133 F.3d 476, 480 (7th

Cir. 1998). The determination that DeVore obstructed

justice is a factual finding which we will not disturb unless

it is clearly erroneous. To meet this standard, DeVore must

convince us “to a certainty that the district court’s factual

findings were incorrect; merely suggesting the possibility of

error is not enough.” Id. at 480-81 (citing Anderson v. City

of Bessemer City, 470 U.S. 564, 573 (1985)). This is an

especially daunting task here as the district court’s factual

finding is based on an assessment of credibility, and we give

special deference to the trial judge’s unique opportunity to

follow the case up close, here for more than 3 weeks.

DeVore repeatedly testified that she was not the biller for

M&A. Judge Scott found that DeVore testified that, prior to

1997, she played no role in billing except to fold, mail, and

sign the bills. The judge found that DeVore’s testimony was

contradicted by several witnesses at trial, implicitly found

those witnesses to be more credible, and concluded that

DeVore testified falsely. Now, rather than argue that her

statements at trial were mistaken or the result of confusion,

she maintains that her testimony was truthful and claims

that the government presented no contrary testimony. We

reject this claim.

As the district court found, several witnesses, including

McGowan, Goff, Woods and others, established through

their testimony that DeVore “orchestrated the billing pro-

cesses throughout that office.” These witnesses testified

that DeVore instructed them on how to: (1) bill; (2) inter-

pret codes; (3) resubmit bills that had been rejected; and (4)

change the listed service date on a bill to avoid rejection of

a bill for a second service on one date.

So, while DeVore maintains that her testimony was true,

her claim simply cannot be squared with the evidence. In

Nos. 02-4222 & 02-4224 15

light of the testimony, the district court properly found that

DeVore’s statements that prior to 1997 she played no

significant role in billing were false.

The district court also properly found that the testimony

was material to the counts of conviction because its purpose

was to mislead the jury into thinking DeVore had no

decisionmaking authority in billing when clearly she did.

See United States v. Freitag, 230 F.3d 1019, 1025 (7th Cir.

2000) (district court’s finding that Medicare fraud de-

fendant’s testimony was “a creative revision of what had

happened” sufficiently found intent required to support per-

jury-based sentence enhancement).

DeVore also claims that the district court clearly erred in

finding that she testified falsely when she said she did not

participate in the decision to have Woods lead the SOSA

group. While DeVore states that “no contrary testimony was

offered,” Judge Scott found that her testimony was contra-

dicted by Woods, Mitrione, and Goff. Applying an obstruc-

tion enhancement to DeVore’s guideline range was not

error.

Finally, the defendants argue that Judge Scott erred in

ordering them to reimburse Medicare because, according to

them, the victim of their fraud (if in fact there was a fraud)

was Medicaid. At sentencing, however, the defendants did

not object to the restitution order on the ground that they

now advance, i.e., that Medicaid—not Medicare— was the

victim of their fraud. Instead, they argued that the district

court improperly calculated the amount of restitution owed.

In fact, the defendants contended that the total loss to

Medicare was $2,144.58 and that Medicaid should be paid

nothing. So, on this record, they forfeited the issue, and our

review is only for plain error. United States v. Randle, 324

F.3d 550, 555 (7th Cir. 2003).

Since Mitrione and DeVore were convicted of fraud, Judge

Scott’s authority to impose restitution is governed by the

16 Nos. 02-4222 & 02-4224

Mandatory Victim Restitution Act (MVRA) codified at 18

U.S.C. § 3663A and 18 U.S.C. § 3664. The relevant portions

of the MVRA provide:

(a)(1) Notwithstanding any other provision of law, when

sentencing a defendant . . . the court shall order, in

addition to . . . any other penalty authorized by law,

that the defendant make restitution to the victim of the

offense . . . .

(2) For the purposes of this section, the term “victim”

means a person directly and proximately harmed as a

result of the commission of an offense for which res-

titution may be ordered including, in the case of an

offense that involves as an element a scheme, . . . any

person directly harmed by the defendant’s criminal

conduct in the course of the scheme . . . .

18 U.S.C. § 3663A(a)(1)-(2) (emphasis added). Thus, while

restitution is limited to the counts of conviction, when the

counts of conviction involve a scheme, restitution may be

ordered for all of the harm caused by the defendant’s crim-

inal conduct in the course of the scheme. See Randle, 324

F.3d at 556; United States v. Martin, 195 F.3d 961, 967 (7th

Cir. 1999).

Based upon Judge Scott’s finding that the total loss

caused by the defendants’ fraud was $11,255, she ordered

the defendants to pay restitution in that amount. We see no

plain error in this order. As the judge found, both Medicaid

and Medicare were victimized by the defendants’ fraud, and

a restitution order need not be limited to those harmed by

the conduct that formed the basis for a conviction. To the

contrary, the statute defines “victim” as any person directly

harmed by the defendant’s criminal conduct in the course

of the scheme. Martin, 195 F.3d at 967. See Randle, 324

F.3d at 556 (“restitution is authorized under the MVRA . . .

to a victim who is directly harmed by the offender’s conduct

Nos. 02-4222 & 02-4224 17

in the course of committing an offense that involves as an

element a scheme . . . .”).

Here, the defendants were convicted of one count of

mail fraud and one count of filing false claims. These counts

adopted parts of counts 1 and 2, which charged

the defendants with devising a scheme to defraud the

Medicaid and Medicare programs of the State of Illinois and

the United States. Thus, they were convicted of offenses

which triggered the broad definition of “victim” under the

MVRA quoted above. Thus, because the defendants’ crime

included a scheme, and there is evidence that the scheme

directly harmed a victim, i.e., Medicare, other than the

victim mentioned in the counts for which the defendants

were convicted, i.e., Medicaid, Judge Scott did not plainly

err in ordering restitution to Medicare.

For these reasons, the judgment of the district court is

AFFIRMED.

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—2-9-04