11th Circuit Upholds Doctor’s Massive Fraud Conviction

Dr. Salomon Melgen arrives at the federal courthouse in West Palm Beach, Fla., on April 28, 2017. (Lannis Water/Palm Beach Post via AP)

(CN) — A Florida eye doctor and one-time friend of New Jersey Senator Robert Menendez will remain behind bars in light of the 11th Circuit’s Friday decision to uphold his conviction and sentence for a historic Medicare fraud.  

A three-judge panel rejected an appeal in which former ophthalmologist Salomon Melgen cried foul over the handling of his 2017 criminal trial. Melgen and his attorneys had tried to convince the appellate court that the trial was marred by witness-on-witness intimidation and admission of prejudicial evidence. 

The panel upheld Melgen’s conviction on all 67 counts. It deemed his 17-year-sentence to be even-handed, noting that the trial judge factored in Melgen’s advanced age and lack of criminal history. 

A jury in the Southern District of Florida convicted Melgen in April 2017 of carrying out a systemic billing fraud at his South Florida medical offices. Melgen stood accused of routinely administering unnecessary, invasive treatments and profiteering off the macular-degeneration drug Lucentis.

He was also charged with running millions of dollars’ worth of dubious diagnostic tests, often using old technology that allowed him to bill higher rates.

On appeal, the Dominican doctor’s high-profile attorney Kirk Ogrosky argued that an expert witness for the prosecution unforgivably harangued defense expert witnesses during breaks in the trial. In a West Palm Beach court parking lot, the prosecution witness allegedly intimidated one of the defense witnesses by saying his reputation would be ruined for testifying in favor of Melgen.

The appellate panel was not persuaded.

Writing for the panel, U.S. Circuit Judge Britt Grant on Friday found that Melgen failed to show that the witness interactions affected testimony. The trial court “did not abuse its discretion” by continuing the trial after the witness-tussling came to light, Grant wrote.  

Judge Grant further shot down Melgen’s claims that the trial court improperly admitted faulty billing comparisons between Melgen and other doctors. According to Melgen’s legal team, the comparisons were presented by an FBI agent unqualified to handle statistics. 

Grant found that prosecutors’ method of picking out the doctors whose billing practices would be used for comparison was “reasonably supported by the evidence.” Melgen moreover was free to expose any faults in the billing comparison when his legal team cross-examined the FBI agent and a retinal expert who testified in support of the comparison criteria, the judge found.

A key sticking point in the appeal was whether the government was out of line for focusing the jury’s attention on Melgen’s multi-dosing of Lucentis. The practice, which involved drawing multiple doses from the excess contents of single-use vials of the drug, allowed Melgen to vastly reduce his costs. 

Several patients ended up suing him over the practice, claiming it resulted in microbially contaminated doses being injected into their eyes. 

Melgen maintained — throughout the trial and on appeal — that prosecutors were trying to frame an administrative Lucentis-billing dispute as a criminal matter. He pointed out that Medicare would have paid the same amount to him for his Lucentis treatments regardless of whether he multi-dosed the vials.

The 11th Circuit panel found Friday that the evidence was fair game.

“We have already explained that through multi-dosing, Melgen could get reimbursed by Medicare at a rate of incredible profit, receiving up to three times the cost of obtaining the drug. That fact was probative of his profit motive for falsely diagnosing patients… whether or not his creativity in administering multiple doses of Lucentis from one vial was lawful,” Judge Grant wrote.

Grant went on to reject Melgen’s gripes that the jury was provided with copies of an indictment that showed the total sum his offices received from Medicare during the 2008-to-2013 period at issue. That sum, more than $100 million, included invoices that were not part of the fraud allegations, Melgen’s counsel says. 

Grant, a Donald Trump appointee, was joined by Circuit Judges Beverly Martin, a Barack Obama appointee, and Barbara Lagoa, a Trump appointee.

For the purpose of sentencing, the trial judge pegged Melgen’s fraud at $73 million, limiting his estimate to a time period from 2010 to 2012. He handed down Melgen’s 17-year sentence in February 2018.

Prosecutors had sought a 30-year sentence.

According to the Federal Bureau of Prisons’ web site, the doctor, now in his mid-60s, is assigned to a low-security prison with a scheduled release date in 2031.

Apart from the Florida fraud trial, Melgen made headlines for a New Jersey criminal case in which federal prosecutors claimed he bribed Senator Robert Menendez to help him in his long-running billing dispute with Medicare over his practice of multi-dosing Lucentis. 

That case against Melgen and Menendez culminated in a mistrial due to a hung jury. The Department of Justice abandoned a planned retrial on the bribery charges in 2018 after a judge threw out several counts.

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