United States District Court, S.D. New York
June 10, 2004.
UNITED STATES OF AMERICA,
ANDRE CELESTIN, Defendant.
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.
The Offense Conduct
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 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
According to the government, the defendant derived a total of
approximately $6,000 in kickbacks from the CS during the course
of the offense.
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.
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 §
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
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.
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