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How Not to Respond to a Grand Jury Subpoena

The Eleventh Circuit recently decided a case that highlights why responding to a grand jury subpoena needs to be taken seriously. The case is United States v. Hoffman-Vaile. As a teaser, a doctor is going to prison for longer than she should because of how she handled a grand jury subpoena.

In the case, a doctor, Dr. Hoffman-Vaile, was being investigated for upcoding a series of dermatological procedures. Basically, the doctor was billing Medicare for a surgical procedure called “an adjacent tissue transfer or rearrangement that measures more than 30 square centimeters and is unusual or complicated.” This procedure was billed under code 14300.

The government’s suspicion was that Dr. Hoffman-Vaile using the billing code 14300, but, in fact, she was do a simpler dermatological procedure, with a different billing code. Telling Medicare that you’re doing a procedure that pays better than the one you’re actually doing is called “upcoding,” and it’s one form of medical billing fraud.

Health and Human Services began investigating Dr. Hoffman-Vaile when it noticed that she used billing code 14300 more times than any other code, and that she used billing code 14300 more than any other doctor in Florida in 1998 or 1999.

These are bad facts. The way Dr. Hoffman-Vaile responded, though, made them much worse. The Inspector General of Health and Human Services raided the doctor’s offices with a search warrant. They found files were missing. They then issued a grand jury subpoena asking for those missing files and any accompanying photographs.

Unfortunately, it appears from the opinion that Dr. Hoffman-Vaile directed her employees to strip the files of the photographs before she sent them to the government to satisfy the grand jury subpoena. Since one of the issues about whether code 14300 is proper is the size of the affected area in the procedure, it matters what the photos show.

Dr. Hoffman-Vaile was then indicted for both health care fraud and obstructing justice for stripping the files. She was convicted and sentenced to five years in prison.

I have represented many clients in fraud cases. Basically, the issue is whether your client is a liar. It is really hard to argue that your client is not a liar if the government has evidence that your client tried to lie to the prosecutors, agents, or grand jury during the investigation. That is why a grand jury subpoena has to be looked at very carefully and responded to with the same amount of care.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.