A grand jury indicted Dr. Harcharan Singh Narang, Dayakar Moparty, and Dr. Gurnaib Singh Sindhu for conspiracy to commit healthcare fraud and several counts of healthcare fraud. Sindhu pleaded guilty, but Narang and Moparty proceeded to trial.

The indictment alleged that Narang, Sidhu, and Moparty conspired to execute a scheme where Narang and Sidhu ordered unnecessary medical tests for patients and then authorized Moparty to bill for these tests through a co-owned hospital at the higher hospital rate even though the patients were seen and treated at Narang’s medical office. Further, when insurers denied claims originating from the hospital, Moparty would resubmit them from another entity associated with the three defendants. The Government claimed this resulted in fraudulent billings of over $20 million.

The crux of the Government’s theory at trial was that Narang and Moparty executed a “pass-through billing scheme” where services were rendered at one location, but the bills were submitted from a different location and at a higher rate.

Moparty’s billing director testified that when he met with the defendants, Moparty explained that they were going to be billing for Narang’s office which would function as “an extension of the hospital.” The purpose of the scheme was to bill at a hospital rate. Another reason was because the hospital was out of network and thus could command higher billing rates.

The jury convicted Narang and Moparty on all counts.

One issue on appeal was the Government’s references to Sidhu as “a co-conspirator in this case,” and that he was “not in this trial because he already pled guilty.” A Government witness also testified that Sidhu had pleaded guilty. The defense also argued that one of the Government’s experts had impermissibly referenced a conviction of one of the specialists Narang had used to evaluate diagnostic tests. The district court had ruled that the admissible evidence presented to the jury “overwhelmingly eclipse[d] the two [brief] mentions of Sidhu’s plea.” The court had also determined that the Government’s expert’s reference was harmless.

The Fifth Circuit reviewed the four factors announced in United States v. Fleetwood, 528 F.2d 528, 532 (5th Cir. 1976) in considering the affect of the Government’s references to Sidhu’s guilty plea: (1) the presence or absence of a limiting instruction; (2) whether there was a proper evidentiary purpose for the introduction of the guilty plea; (3) whether the plea was improperly emphasized or used as substantive evidence of guilt; and (4) whether the introduction of the plea was invited by defense counsel." The district court had given the jury a limiting instruction. Balancing the other factors, the Fifth Circuit held that that the district court did not abuse its discretion in denying the defendants’ motion for a mistrial.

The court also held that the Government’s expert’s reference to an unrelated conviction was harmless because the district court gave the jury a curative instruction.

United States v. Moparty