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U.S. v. CELESTIN

United States District Court, S.D. New York


June 10, 2004.

UNITED STATES OF AMERICA,
v.
ANDRE CELESTIN, Defendant.

The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

SENTENCING OPINION

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.

The Offense Conduct

  This statement of facts draws on the Presentence Investigation Report prepared by the U.S. Probation Office.

  Background

  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

  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 2000.

  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 home.

  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 Medicare beneficiaries.

  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 the profitability of Medicare reimbursements, and Celestin assured the CS that there would be patient referrals "this week" and that the CS should not worry.

  On January 27, 2003, the CS participated in a consensually-recorded and monitored meeting with Celestin at Celestin's home. During the meeting, the CS told Celestin that since they had last spoken he had been sick, and was going to be opening a medical practice again. The CS told Celestin that he had come to "make sure I'm gonna get support from you." The CS referred to the fact that he had been paying Celestin "per patient." Celestin confirmed that that arrangement would be "alright" and that he was glad that the CS was back.

  On February 27, 2003, the CS participated in a consensually-recorded telephone call with Celestin. During the call, the CS told Celestin that he would be starting his practice in April and confirmed that Celestin would be sending him patients. Celestin told the CS, "You have my word." The CS confirmed that the price had been fifty dollars per procedure and that Celestin should fax the CS a list of patients. The CS told Celestin that, from that list, the CS would "calculate the money like before, fifty dollars per procedure." Celestin instructed the CS to bring the money to Celestin's home, not his office. The CS told Celestin that, at some point, they could increase the price to sixty or seventy dollars per procedure.

  On April 9, 2003, the FBI case agent and HHS agent interviewed Andre Celestin at his Brooklyn, New York medical office. The agents showed Celestin a still photograph taken from the videotaped meeting with the CS on July 18, 2001. When the agents reasoned that the tape showed Celestin receiving illegal kickbacks, Celestin reported that he had done nothing illegal Celestin added that there was another Dr. Celestin in the Brooklyn area that was under investigation and in trouble. The agents ended their interview when Celestin related that he wanted the opportunity to meet with his attorney.

  On the basis of the foregoing, Complaint 02 Mag 760 was filed against Celestin in the Southern District of New York on April 14, 2003. The following day, FBI agents arrested Celestin at his residence.

  According to the government, the defendant derived a total of approximately $6,000 in kickbacks from the CS during the course of the offense.

  Offender Characteristics

  Celestin was born on December 1, 1949 in Haiti. Celestin related that he resided with his family in Port-au-Prince, Haiti until the age of 24. Celestin described his upbringing as "upper middle-class." In 1975, Celestin graduated from the University of Haiti, Faculty of Medicine and Pharmacy, in Port-au-Prince. In August 1982, Celestin completed a course of study in general surgery at the Southside Medical Center in Youngstown, Ohio. Subsequently, in August 1985, Celestin completed a course of study in general surgery at the GW Hubbard Hospital — Meharry College in Nashville, Tennessee. In 1979, the defendant and his wife immigrated to the United States. They settled in south Miami, Florida, where they lived for approximately one year. It was during this period that their only child was born, a now 24-year-old daughter named Marjorie Celestin. Celestin presently maintains permanent resident status in the U.S.

  In 1986, the Celestins moved to New York, and settled in a rented private home located in Hollis, New York. In approximately 1991, the defendant and his wife purchased their current residence, a private home located in Elmont, New York.

  Since November 1985, the defendant has been licensed to practice medicine in the State of New York. Celestin has been certified by the American Board of Surgery since February 1995. According to the New York State Education Department, Office of the Professions, Celestin has yet to report his criminal conviction in the instant case to their agency. There have not been any malpractice claims filed against Celestin.

  Since 1992, the defendant has been the sole practitioner at Katmar Medical Center, located in Brooklyn, New York. As a general practitioner, Celestin performs surgical procedures on occasion. He is affiliated with Interfaith Medical Center in Brooklyn. From 1986 through 1992, Celestin practiced medicine from an office located on Lefferts Avenue in Brooklyn. Celestin does not recall the specific name or address of the medical practice, at which he was one of several doctors.

  Financial Condition: Ability to Pay

  In a personal financial statement dated March 30, 2004, Celestin provided information indicating that his net worth is approximately $192,000 and that he has a negative net monthly cash flow of approximately $1,700.

  Adjustment for Acceptance of Responsibility

  On the advice of his attorney, who was present during the presentence interview at the U.S. Probation Office on March 2, 2004, Celestin declined to discuss his participation in the instant offense, and as of the writing of this report, no written statement has been received. However, based solely upon his plea allocution, it appears that the defendant has accepted responsibility for his actions.

  Adjustment for Obstruction of Justice

  There is no information to suggest that the defendant impeded or obstructed justice at the time of the arrest, or during the investigation or prosecution of the offense. Although during the April 9 meeting with the FBI and HHS agents Celestin denied that he was the person depicted in the photograph, and related that a different Dr. Andre Celestin was likely responsible, such statements do not rise to the level of obstruction of justice described in § 3C1.1.

  Offense Level Computation

  The November 5, 2003 edition of the Guidelines Manual has been used in this case. A violation for Solicitation and Receipt of Medicare Kickbacks in violation of 42 U.S.C. § 1320a-7b(b)(1)(A) is covered by § 2B1.1 and § 2B4.1. As the offense involved commercial bribery, § 2B4.1 is most analogous. Pursuant to § 2B4.1(a), the base offense level is eight.

  During the offense, Celestin received approximately $6,000 in kickbacks from the CS. Consequently, as the value of the improper benefit exceeded $5,000, pursuant to § 2B4.1(b)(1)(B) and § 2B1.1(b)(1)(B), there is a two-level increase in the offense level, to 10.

  As a participating physician in the Medicare program, Celestin was subject to the written provisions regarding the prohibition against willful solicitation or receipt of kickbacks. Celestin referred his patients to the CS with the expectation of receiving monetary compensation. Consequently, as Celestin abused a position or trust that significantly facilitated the commission and concealment of the offense, pursuant to § 3B1.3, there is a two-level increase in the offense level, to 12.

  Based solely upon the defendant's plea allocution, we believe that the defendant has shown recognition of responsibility for the offense. Pursuant to § 3E1.1(a), the offense level is reduced two levels, for an adjusted offense level of 10.

  Criminal History

  According to the FBI and the New York State Division of Criminal Justice Services, Bureau of Identification, Celestin has no prior criminal convictions. Therefore, Celestin has zero criminal history points and a Criminal History Category of I.

  Applicable Guidelines Range

  The maximum term of imprisonment is five years, pursuant to 42 U.S.C. § 1320a-7b(b)(1)(A) and (B). Based on a total offense level of 10 and a Criminal History Category of I, the applicable guideline range of imprisonment is 6 to 12 months.

  The minimum term of imprisonment may be satisfied by (1) a sentence of imprisonment; or (2) a sentence of imprisonment that includes a term of supervised release with a condition that substitutes community confinement or home detention, provided that at least one month is satisfied by imprisonment, pursuant to § 5C1.1(c); or (3) a sentence of probation that includes a condition or combination of conditions that substitute intermittent confinement, community confinement, or home detention for imprisonment.

  If a term of imprisonment is imposed, the Court may impose a term of supervised release of not more than three years, pursuant to 18 U.S.C. § 3583(b)(2). The guideline range for a term of supervised release is at least two years but not more than three years, pursuant to § 5D1.2(a)(2). If a sentence of imprisonment of one year or less is imposed, a term of supervised release is not required but is optional, pursuant to § 5D1.1(b).

  Celestin is eligible for not less than one nor more than five years' probation by statute, pursuant to 18 U.S.C. § 3561(c)(1). Because the offense is a felony, one of the following must be imposed as a condition of probation unless extraordinary circumstances exist: a fine, restitution, or community service, pursuant to 18 U.S.C. § 3563(a)(2).

  Because the applicable guideline range is in Zone B of the Sentencing Table, the defendant is eligible for probation provided that the court imposes a condition that substitutes intermittent confinement, community confinement, or home detention for at least six months, pursuant to § 5B1.1(a)(2). If the court imposes probation, the term must be at least one year but not more than five years because the offense level for the instant offense is ten, pursuant to § 5B1.2(a)(1).

  The maximum fine is $250,000 (or twice the pecuniary gain or loss), pursuant to 18 U.S.C. § 3571. A special assessment of $100 is mandatory, pursuant to 18 U.S.C. § 3013. The fine range for this offense is from $2,000 to $20,000, pursuant to § 5E1.2(c)(3).

  The Sentence

  In light of the foregoing, Celestin will be sentenced to six months home confinement, to be followed by three years probation. There is no compelling reason to recommend a custodial term. Home confinement followed by probation will permit the probation department to adequately monitor the defendant in the community. Additionally, as restitution is not an issue, a fine in the amount of the Celestin's pecuniary gain ($6,000) is appropriate.

  The following conditions are mandatory: 1) the defendant shall not commit another federal, state, or local crime; 2) the defendant shall not illegally possess a controlled substance; 3) the defendant shall not possess a firearm or destructive device. The mandatory drug testing condition is suspended based on the court's determination that the defendant poses a low risk of future substance abuse.

  The standard conditions of supervision (1-13) are imposed with the following special conditions:

a) the defendant shall comply with the conditions of home confinement for a period of six months. During this time the defendant must remain at his place of residence except for employment and other activities approved by the probation officer. Celestin shall maintain a telephone at his place of residence without call forwarding, a modem, caller ID, call waiting, or portable cordless telephones for the above period. At the direction of the probation officer, Celestin shall wear an electronic monitoring device and follow electronic monitoring procedures specified by his probation officer. Home confinement shall commence on a date to be determined by the probation officer. If so directed, the defendant shall pay the cost of electronic monitoring.
b) the defendant shall pay a fine of $6,000 in monthly installments of $375, until the fine is paid in full. Such payments shall be made over a period of supervision to commence 30 days after the date of the judgment. c) the defendant shall provide the probation officer with access to any requested financial information.
d) the defendant shall not incur new credit charges or open additional lines of credit without the approval of the probation officer unless the defendant has made full payment of the fine.
e) The defendant shall obey the immigration laws and comply with the directives of immigration authorities.
Celestin shall be supervised from his district of residence.
  Celestin shall pay a mandatory special assessment of $100, which shall be due immediately.

  This sentence is subject to further hearing on June 15, 2004, at 4:00 PM.

  It is so ordered.

20040610

© 1992-2004 VersusLaw Inc.



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