The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
On January 20, 2004, the defendant, Dr. Andre Celestin
("Celestin"), pleaded guilty to one count of Solicitation and
Receipt of Medicare Kickbacks, in violation of
42 U.S.C. § 1320a-7b(b)(1)(A), a Class D felony.
This statement of facts draws on the Presentence Investigation
Report prepared by the U.S. Probation Office.
Medicare is a federal medical insurance program funded by
federal taxes that pays for health care services for persons 65
or older and certain disabled persons. The Medicare program is
administered by the Center for Medicare and Medicaid of the U.S.
department of Health and Human Services ("HHS"). Physicians participating in the Medicare program are prohibited
from soliciting or receiving payment of any kind in return for
referring a patient to another person for medical services.
Empire Medicare Services, formerly known as Empire Blue Cross
and Blue Shield ("Empire"), is the local carrier under contract
to administer Medicare claims in Manhattan, Brooklyn, the Bronx,
and Long Island, among other places. Group Health Incorporated
("GHI") is the local carrier under contract with Medicare to
process Medicare claims arising from treatment in Queens.
Medicare claims submitted to Empire are processed in a facility
located in Yorktown Heights, New York. Medicare claims submitted
to GHI are processed in New York, New York.
Investigation in the instant case was commenced in December
2000 by the FBI and the Inspector General's Office of the HHS
after information regarding illegal kickbacks was provided by a
registered physician with a specialty in gastroenterology. The
physician agreed to act as a confidential source ("CS") and
assist the government in its investigation of other physicians
engaged in Medicare fraud. Between 1986 and 2000, the CS paid kickbacks to several dozen
doctors, in return for patient referrals. The CS advised that the
CS generally paid the doctors between 20% and 40% of the amount
the CS received from the insurance reimbursement. The CS paid
certain doctors with cash and other doctors by check. In some
instances, the CS paid doctors with postal money orders or
department store gift certificates. One doctor obtained the
referral fee (i.e., the kickback) from the CS by using the CS's
credit card to make purchases. With respect to the doctors the CS
paid by check, the CS generally wrote the term "rent" in the memo
section of the check in order to disguise the kickback as a rent
payment for the purported rental of the doctor's office space.
The CS estimated that, in total, the CS paid a total of
approximately 3500,000 in kickback payments between 1986 and
The CS further advised that the CS met Celestin, the CS met
Celestin, the defendant, through a mutual friend in 1997.
Celestin is a licensed general surgeon practicing in Brooklyn,
New York. According to the CS, the CS and Celestin agreed to a
financial relationship whereby Celestin referred patients to the
CS for gastroenterology procedures and, in exchange, the CS paid
Celestin cash in the amount of between 20 and 25% of the amount
the CS received from the referred patient's insurance company.
The CS advised that, following their initial discussion
concerning the arrangement, Celestin referred patients to the CS
and, periodically, sent a facsimile to the CS summarizing the
number of patients referred and listing each patient by name. According to the CS, the CS paid Celestin in
cash and generally made the cash payments in person at Celestin's
The CS advised that the CS used the facsimiles transmitted by
Celestin to assist the CS in keeping track of the amount of the
kickback payment owed to Celestin. All of the patients referred
by Celestin had either private or government-funded insurance. A
number of the patients referred to the CS by Celestin were
On July 11, 2001, the CS participated in a
consensually-recorded and monitored telephone call with Celestin.
The CS made the call from the FBI Office at 26 Federal Plaza in
Manhattan. During the call, the CS requested that Celestin have
his secretary send the CS a list of the patients referred by
Celestin to the CS so that the CS could "clear the account."
During the conversation, Celestin told the CS, "Don't worry," and
said that "things have been slow" but that he would send the
list. The CS told Celestin to send the CS more patients, and
Celestin responded, "Yeah I know," and added that "we will have
to meet." The CS indicated that the CS had money for Celestin and
requested a meeting on Wednesday the following week. Celestin and
the CS agreed that they would meet at Celestin's home at 10:30
A.M. Celestin then provided the CS with his home address. On Tuesday, July 17, 2001, the CS participated in a
consensually-recorded and monitored telephone call to Celestin.
During the call, the CS confirmed the appointment for the
following day and requested, again, that Celestin have his
secretary fax the list of patients who had been referred by
Celestin to the CS's home. Notwithstanding this request, the CS
did not receive such facsimile from Celestin.
On Wednesday, July 18, 2001, the CS participated in a
videotaped consensually-recorded and monitored meeting with
Celestin at Celestin's home. Prior to the meeting, the FBI case
agent provided the CS with $500 in U.S. currency, videotaping and
recording devices, and the list of patient names the CS had
previously provided to the FBI and HHS.
During the meeting, the CS and Celestin discussed the fact that
business had been slow. The CS asked Celestin if Celestin knew
the amount the CS owed. Celestin indicated that he did not know
the amount and that the CS should have an idea of how such was
owed. After the CS indicated that the CS did not remember,
Celestin told the CS to just "give me something." The CS then
provided Celestin with the list of patient names and told
Celestin that that list was the CS's list but that Celestin's
secretary should be keeping Celestin's own list. Celestin agreed
that he should be keeping his own list. The CS handed Celestin an envelope with $500 and asked Celestin
to verify that there was $500 in the envelope. Celestin looked in
the envelope and acknowledged that there was $500 in the
envelope. The CS told Celestin to keep the list of patients as a
"receipt," and told Celestin that the cash payment "should clear
the account." Celestin then told the CS that, "Hopefully, I will
do something this week," and "I'll find a way to get you some
patients this week."
Before leaving, the CS engaged Celestin in a further discussion
concerning the history of the CS's payments to Celestin. The CS
asked Celestin how much the CS had paid Celestin historically per
referral and Celestin said that sometimes the CS gave him 30%,
sometimes 20%. The CS told Celestin that, in fact, the CS paid 20
to 25%, and Celestin agreed. The CS then asked Celestin how long
they had been doing "this business" and they agreed that it had
been three years. Celestin said that he would get the CS at least
one patient that week. Celestin and the CS discussed ...