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Media Alerts - United States of America v. Ashokkumar Babaria - Third Circuit
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January 27, 2015
  United States of America v. Ashokkumar Babaria - Third Circuit
Headline: Third Circuit rules a two-level upward adjustment for abuse of a position of trust is warranted when relating to Medicare and Medicaid.

Area of Law: Federal sentencing guidelines

Issues Presented: Whether a director of a medical company who provided kickbacks to physicians for referrals and took payments from Medicare and Medicaid is in a position of trust under the sentencing guidelines.

Brief Summary: Dr. Ashokkumar R. Babaria ("Babaria") was a licensed radiologist and the medical director and manager of Orange Community MRI, LLC ("Orange"), an authorized Medicare and Medicaid provider. In 2012, Babaria pled guilty to one count of making illegal payments in violation of a federal anti-kickback statute. At sentencing, Barbaria objected to a report which recommended that he receive a two-level adjustment for abuse of a position of trust pursuant to § 3B1.3 of the U.S. sentencing guidelines. The district court granted the adjustment. Babaria appealed on the grounds he neither occupied nor abused a position of public or private trust.
The Third Circuit Court of Appeals first determined Babaria did indeed occupy a position of trust vis-à-vis Medicare and Medicaid as a medical director and manager of Orange and an authorized provider. Since on behalf of Orange he certified compliance with the anti-kickback statute, the Third Circuit determined Babaria abused his position of trust by paying kickbacks and the upward adjustment was proper.


Significance (if any):

Extended Summary: Babaria was a licensed radiologist and the medical director and manager of Orange Community MRI, LLC. Orange was an authorized Medicare and Medicaid provider. In 2012, Babaria pled guilty to one count of making illegal payments, kickbacks, in violation of a federal anti-kickback statute. Babaria paid kickbacks to physicians for referrals, and then charged Medicare and/or Medicaid for procedures performed for qualifying patients. At sentencing, Barbaria objected to a report that recommended that he receive a two-level adjustment for abuse of a position of trust pursuant to § 3B1.3 of the U.S. sentencing guidelines. The district court granted the adjustment. Babaria appealed on the grounds he neither occupied nor abused a position of public or private trust.
The Third Circuit Court of Appeals first determined Babaria did indeed occupy a position of trust in a ruling that adopted reasoning of the Fourth and Eleventh Circuits. The Third Circuit concluded Babaria occupied a position of trust vis-à-vis Medicare and Medicaid as a medical director and manager of Orange and an authorized provider. Since, on behalf of Orange, he certified compliance with the anti-kickback statute, the Third Circuit determined Babaria abused his position of trust and that the district court did not err by granting the upward adjustment. The Court concluded by noting it may be relevant for district courts to consider status of licensing when dealing with activities related to Medicare and Medicaid.

To read the full opinion, please visit http://www2.ca3.uscourts.gov/opinarch/142694p.pdf.

Panel (if known): Smith, Hardiman, and Barry, Circuit Judges.

Argument Date: November 18, 2014

Argument Location: Philadelphia, PA

Date of Issued Opinion: December 31, 2014

Docket Number: No. 14-2694

Decided: Affirmed.

Case Alert Author: Ilya Gomelsky

Counsel: Joseph D. Mancano, Esq. for Appellant; Mark. E. Coyne, Esq. and Glenn J. Moramarco, Esq. for Appellee.

Author of Opinion: Barry, Circuit Judge

Circuit: 3rd Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 01/27/2015 11:24 AM     3rd Circuit  

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