State v. Currin

974 N.W.2d 567

STATE of Minnesota, Respondent,

v.Barbara Ann CURRIN, Appellant.

A20-0603

Supreme Court of Minnesota.

Filed: May 25, 2022

Keith M. Ellison, Attorney General, Nicholas Wanka, Assistant Attorney General, Saint Paul, Minnesota; and John Choi, Ramsey County Attorney, Saint Paul, Minnesota, for respondent.

Cathryn Middlebrook, Chief Appellate Public Defender, Chang Y. Lau, Andrew J. Nelson, Assistant State Public Defenders, Saint Paul, Minnesota, for appellant.

OPINION

MOORE, III, Justice.

This case involves a challenge to a $2.64 million restitution award. Between 2012 and 2015, appellant Barbara Ann Currin owned and operated several agencies that billed the Minnesota Department of Human Services (DHS) as medical assistance providers of health care services. Currin has a prior fraud conviction that bars her from operating in any capacity as a medical assistance provider, and the agencies concealed Currin's role and involvement with them from DHS. Currin was convicted of racketeering for her role in this medical assistance fraud scheme. After a hearing, the district court ordered Currin to pay DHS $2,648,539.53 in restitution for fraudulently billed medical assistance claims that it had paid to Currin's agencies.

In a postconviction petition, Currin argued her restitution award should be reduced.¹ When a district court determines the amount of restitution to award a victim in a criminal case, it must consider "the amount of economic loss sustained by the victim as a result of the offense." Minn. Stat. § 611A.045, subd. 1(a)(1) (2020). Currin argued that DHS's economic loss had to account for the economic benefit it received from her offense, which she contended was the value of medical services her agencies had purportedly provided to low-income Minnesotans. The district court denied the postconviction petition, and the court of appeals affirmed.

We hold that the plain language of the phrase "amount of economic loss sustained by the victim" in Minn. Stat. § 611A.045, subd. 1(a)(1), requires a district court to consider the value of any economic benefits a defendant conferred on a victim when calculating a restitution award. We further hold, based on the facts of this case, that the district court did not abuse its discretion when it calculated DHS's economic loss. As a result, we affirm the court of appeals, but on different grounds.

FACTS

In 2010, appellant Barbara Ann Currin was convicted in state court of medical assistance fraud for submitting fraudulent Medicaid claims to DHS through a private-duty-nursing-provider company she owned and operated. As a result of this conviction, federal law excluded Currin from participating as a medical assistance provider. See 42 U.S.C. § 1320a-7(a)(1) (2018) (excluding individuals who have been convicted of a criminal offense relating to delivery of medical assistance services under state law from participating in federal healthcare programs).

Despite this exclusion, between 2012 and 2015, Currin formed, owned, and operated eight agencies and other businesses that billed DHS as medical assistance providers. Along with several codefendants, Currin set up agencies that billed DHS for nursing services while concealing Currin's involvement as owner and manager. Based on this scheme, the State charged Currin with one count of racketeering, Minn. Stat. § 609.903, subd. 1(1) (2020), and seven counts of theft by swindle, Minn. Stat. § 609.52, subd. 2(a)(4) (2020).

In June 2016, Currin pleaded guilty to racketeering in exchange for dismissal of the theft by swindle charges. At her plea hearing, Currin admitted that the agencies she set up billed DHS for nursing services purportedly provided to clients who were eligible to receive services paid for by the medical assistance program. She conceded that, while her agencies provided some services, they billed DHS for more services than were provided. Currin also agreed that her agencies gave clients kickbacks and other incentives to retain them. Currin acknowledged that, based on her 2010 conviction, DHS would not have paid any bills submitted by Currin's agencies had it known of her involvement. Finally, Currin agreed that between 2012 and 2015, DHS made medical assistance payments totaling $2,648,548.53 to her agencies.

The district court accepted Currin's plea, convicted her of racketeering, and later sentenced her to 122 months in prison. At the sentencing hearing, the State asked the court to order Currin to pay the full $2.64 million in restitution. Because Currin's attorney was having technical difficulties accessing the State's restitution evidence, the district court reserved its decision on restitution.

Currin appealed her sentence, which the court of appeals affirmed. See Currin v. State , No. A17-1483, 2018 WL 2090623, at *1 (Minn. App. May 7, 2018), rev. denied (Minn. Aug. 7, 2018). While Currin's appeal was pending, her case proceeded to a restitution hearing before a different district court judge.

At the restitution hearing, the State introduced into evidence several documents detailing the medical assistance payments that DHS made to Currin's agencies. The State also called a Medicaid fraud investigator from the Minnesota Attorney General's Office to testify. The investigator testified that she calculated the total amount of medical assistance payments that DHS paid to Currin's agencies as $2,648,539.53, based on bills submitted for nursing services provided to medical-assistance-eligible clients. The investigator agreed that DHS would not have made any medical assistance payments to Currin's agencies had it known that Currin was involved in their operations and management. The investigator also testified that state regulations require agencies seeking medical assistance payments to maintain time sheets going back 5 years and prohibit them from giving kickbacks to those receiving services. The investigator added that if DHS determined that an agency had received fraudulent payments, then DHS would seek to recover the entire amount of its payment and would not seek to recover only the agency's profit on the services provided.

Nonetheless, the investigator testified she did try to estimate the profit Currin's agencies received during the medical assistance scheme. To do so, she subtracted the amount that the agencies purportedly paid their nurses—$1,156,259.36—from the total amount that DHS paid the agencies. When calculating this estimate, the investigator assumed that the agencies provided all the services billed, despite evidence that Currin's agencies had back billed, overbilled, and falsified and destroyed timesheets. Operating on this assumption, the investigator estimated that the agencies’ total profit was $1,492,280.17. Currin cross-examined the State's investigator but did not otherwise offer any evidence at the hearing. After the restitution hearing, the parties submitted memoranda and Currin submitted an affidavit about her ability to pay. Currin's affidavit did not challenge the accuracy of the State's restitution amount or offer an alternative figure.

In November 2017, the district court ordered Currin to pay restitution of the full $2.64 million and directed that $50 would be deducted monthly from her prison earnings to pay the award. The district court found unpersuasive Currin's argument that she should only have to pay the amount the State's investigator calculated as profit because, as she reasoned, DHS would have had to reimburse some other agency for the same services the nurses provided. The district court noted there was no evidence DHS would have reimbursed another agency for the same services Currin's agencies purportedly provided to clients, "no authority" supported reducing a victim's restitution request "based on expenses incurred by a defendant in obtaining or using the ill-gotten gains," and without Currin's "deceits, falsehoods, and fabrications," DHS would not have funded her enterprise at all. Since Currin was not entitled to any of the funds she received from DHS, the district court reasoned, she must return them in full.

Two years later, Currin filed a petition for postconviction relief, challenging the amount of the restitution award. Once again, she argued that because her agencies used $1.1 million of the funds to pay for nursing services provided to Medicaid beneficiaries, DHS received benefits from these payments, and therefore they were not an economic loss. The district court summarily denied Currin's petition without a hearing for reasons similar to those stated in its original restitution order. The district court agreed that if Currin "had not committed her crime, DHS would not have paid out any of the $2.6 million."

The court of appeals affirmed. State v. Currin , No. A20-0603, 2021 WL 164690, at *1 (Minn. App. Jan. 19, 2021). The court rejected Currin's assertion that DHS would have paid $1.1 million for services even if Currin had not committed her crime, and therefore the restitution award should be reduced to $1.49 million because that more accurately reflects DHS's economic loss. Id. at *6. Instead, the court of appeals reasoned that "a district court's analysis is confined to the two exclusive statutory factors" for determining restitution in Minn. Stat. § 611A.045, subd. 1(a),² and that it "may not consider Currin's proposed additional ‘factor’ " related to the benefit the victim received. Id. As a result, the court concluded, "the district court did not abuse its discretion by returning DHS to the same financial position it was in before the crime, or ordering restitution of $2.64 million because Currin's criminal activity directly caused the economic loss." Id. The court also rejected Currin's argument that the district court improperly shifted the burden of proof to her before awarding restitution, concluding instead that "the district court's decision to award restitution in the total amount paid by DHS to Currin's agencies was fully supported by record evidence...