Response in Opposition to Motion to Strike Allegations from Count 1 — United States v. Sanchez Chocron

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Government's Response in Opposition to Motion to Strike Allegations from Count 1, dated March 24, 2025, in United States of America v. Diego Sanudo Sanchez Chocron and Gregory Charles Milo Caskey, Case No. 24-CR-20155-RAR, Southern District of Florida. It responds to Defendants' Motion to Strike Allegations in Count 1 that Were Dismissed in Count 8 [D.E. 333]. It states that Count 1 charges conspiring to commit health care fraud and wire fraud, and argues that the Court's ruling on Count 8 does not warrant revising Count 1. It argues that the Government should be able to reference evidence of payments to doctors and patient recruiters as evidence of each Defendant's knowledge and intent. It asks the Court to deny the Motion and is signed /s/ James V. Hayes.

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Case 1:24-cr-20155-RAR Document 338 Entered on FLSD Docket 03/24/2025 Page 1 of 5




                              UNITED STATES DISTRICT COURT
                              SOUTHERN DISTRICT OF FLORIDA

                                     Case No. 24-CR-20155-RAR

  UNITED STATES OF AMERICA

  vs.

  DIEGO SANUDO SANCHEZ CHOCRON, and
  GREGORY CHARLES MILO CASKEY,

                 Defendants.
                                               __________/

         GOVERNMENT’S RESPONSE IN OPPOSITION TO MOTION TO STRIKE
                       ALLEGATIONS FROM COUNT 1

         The United States, through undersigned counsel, hereby files this response in opposition

  to Defendants’ Motion to Strike Allegations in Count 1 that Were Dismissed in Count 8 and to

  Prohibit Arguments Related to the Dismissed Counts [D.E. 333 (the “Motion”)]. The Defendants

  are charged in Count 1 with conspiring to commit health care fraud and wire fraud. The manner

  and means section of Count 1 alleges that the fraud was carried out through, among other things,

  kickbacks paid to doctors to refer orders for genetic testing and to patient recruiters for genetic and

  COVID-19 testing.      [See D.E. 46, Superseding Indictment, Count 1, ¶¶ 5, 6, 8-10].             The

  Government should be permitted to reference money paid to doctors and patient recruiters, as

  alleged, as part of the health care fraud.

         First, the Court’s ruling on Count 8 does not warrant revisions to the allegations in Count

  1. Each count in the Superseding Indictment stands on its own. Count 1 does not require that the

  jury find a knowing and willful violation of the Anti-Kickback Statute, as Count 8 would have

  required. Instead, Count 1 “requires proof of a fact that” Count 8 does not: that the defendants

  conspired to submit fraudulent claims. See Blockburger v. United States, 284 U.S. 299 (1932).



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         Second, the Government has proven that Milo Caskey paid doctors who were referring

  genetic tests to IGX through his MSOs, and that Sanchez knew this, and further that IGX paid

  patient recruiters to generate COVID-19 referrals. The Government is not seeking to relitigate the

  Court’s prior ruling on Count 8. But even if the Government has not proven a knowing and willful

  violation of the Anti-Kickback Statute, it should be able to reference the evidence that has been

  elicited regarding payments to doctors, payments to patient recruiters, and each Defendant’s

  knowledge of or involvement in those payments as evidence of each Defendant’s knowledge and

  intent with respect to the submission of false and fraudulent claims, as alleged in Count 1. While

  kickbacks are not tantamount to fraud, payments to doctors and patient recruiters are relevant to

  establish fraud counts, and such payments are one way that fraudulent claims are procured. See

  United States v. Medina, 485 F.3d 1291, 198-99 (11th Cir. 2007)(defendant convicted of kickback

  conspiracy but such evidence could also be used to prove health care fraud); see also United States

  v. Grow, 977 F.3d 1310, 1326-28 (11th Cir. 2020) (affirming defendant’s health care fraud

  conviction in case where defendant bribed recruiters for medically unnecessary referrals;

  defendant also convicted of kickbacks charges).1



  1
    While the Government has not found any case directly on point, nor has the Defendant, and the
  Second Circuit addressed a similar issue in a racketeering prosecution, United States v.
  Zemlyansky, in which the defendant was acquitted of certain crimes and argued that he could not
  be convicted of racketeering using those crimes as a predicate. 908 F.3d 1 (2d Cir. 2018). The
  Zemlyansky court held that the defendant could still be convicted of racketeering based on his
  involvement in a scheme that contemplated others committing those crimes. Id. at 10. In the same
  way, the Government should be entitled to argue at trial that the claims Caskey and Sanchez
  conspired to submit to Medicare for genetic testing were fraudulent and medically unnecessary
  because they were tainted by kickbacks. Similarly, the Eleventh Circuit has held that because the
  predicate acts in a RICO conspiracy count mirror crimes charged in the indictment, unlike the
  substantive RICO count, “the acquitted counts do not necessitate the finding that the issue of
  ultimate fact, i.e., agreement to commit two or more predicate acts or agreement to the overall
  objective of the enterprise, was necessarily determined. This is because the actual commission of
  the underlying crime does not constitute ‘an essential element” of RICO conspiracy.’” United
  States v. Shenberg, 89 F.3d 1461, 1479 (11th Cir. 1996)(quoting United States v. Eley, 968 F.2d
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         For example, the Government presented financial records including checks from Caskey’s

  companies to multiple doctors who, in sum, referred approximately $4 million in genetic testing

  that IGX billed to Medicare. See GX 28-30 (checks); GX 113 (summary slide showing IGX’s

  billing to Medicare for Caskey’s doctors’ referrals). Caskey also received a legal opinion before

  the scheme in Count 1 that stated flatly and unequivocally that Caskey’s plan to enter corporate

  arrangements wherein physicians are compensated “up to 40%” of the company’s revenue was

  lawful only if the “laboratories do not provide any services which are reimbursed by Medicare …

  or any other government program.” GX 1319 at 2. And here, the genetic testing was billed

  virtually exclusively to Medicare. See GX 100. The legal opinion went on to explain that “[t]he

  best way to make sure you do not violate federal law, is to never process federal payor claims

  which are generated under these facts.” Id. at 6. But Caskey did just that, and Sanchez knew it.

         In addition, Enrique Perez-Paris testified that Caskey had “MSOs, the managed service

  organizations,” which were “basically a way to induce referrals, to pay doctors and get them to

  send test orders to us.” Tr. 3/17/25 at 76:9-15. Perez-Paris further testified that “we got [orders]

  from the doctors that Milo was paying,” and specifically identified four doctors from GX 113 as

  from Milo Caskey and his business partnerships.” Id. at 75:19-76:7. Perez-Paris also testified that

  Sanchez was aware that Caskey would bring in the doctors and that Sanchez left Perez-Paris an

  audio message stating that “it was great that Milo said he was going to bring the clean doctors first

  and, if need be, we could trash it up later with the MSO doctors.” Id. at 206:17-24. And a recording




  1143, 1146 (11th Cir.1992)). The Government is therefore not barred from using “predicate acts
  that mirror acquitted substantive offenses” to prove the charged RICO conspiracy. Shenberg, 989
  F.3d at 1481.

  .

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  was introduced in which Diego Sanchez commented on Caskey’s doctors that he was paying as

  (depending on the translation) as “garbage,” “trash,” or “dirty.” GX 813.

         The Government has submitted enough evidence at trial before this jury to argue that one

  way in which Caskey and Sanchez knew they were committing the fraud alleged in Count 1 is that

  Caskey was paying doctors in this manner whom he and Sanchez knew were referring Medicare

  claims for which IGX billed. The payment to these doctors explained why they may have been

  willing to order medically unnecessary tests. Even a witness called by Caskey, Nurse Practitioner

  Torres, stated she could see how paying doctors could lead to medically unnecessary referrals as

  charged in Count 1. In other words, one way in which Caskey and Sanchez knew the genetic tests

  were medically unnecessary is because the doctors referred those tests at Caskey’s request because

  they were getting paid. Likewise, Caskey and Sanchez knew that they could get the doctors to

  revise requisition forms because they were being paid to do so, and they commanded such doctors

  to follow the “Nikita Method” or “Nikita Protocol.” See GXs 1322, 1345-46.

         The Government has proven that the genetic tests in this case were largely medically

  unnecessary. Caskey’s payments to the doctors who referred these tests reflect his knowledge of

  that fraud, and Sanchez’s, because Sanchez also knew that these doctors were paid by Caskey

  because Caskey and Enrique Perez-Paris both told him this. Similarly, even if Sanchez did not

  conspire to violate the Anti-Kickback Statute, he knew that Caskey had relationships with doctors

  and, when asked what Perez-Paris told Sanchez about Milo Caskey when the business was starting

  out, Perez-Paris responded that “I said, look, Milo has MSOs, which meant paying them, and has

  a lot of doctor relationships.” Tr. 3/17/25 at 61:13-20. Accordingly, the allegations and evidence

  about Caskey paying doctors, and about IGX through Sanchez and others paying marketers like

  Omar Palacios and Nadir Perez – as reflected in their volume-based invoices to IGX (GXs 604



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  and 605) and their kickback ledgers (GXs 318 and 319) – is relevant and permissible evidence to

  prove the health care fraud and wire fraud conspiracy alleged by the Government. The fact that

  Defendants were acquitted of a separate kickback conspiracy count is immaterial; they have been

  on notice since the Superseding Indictment was returned of the allegations in it.

                                          CONCLUSION

         The Government respectfully requests that the Court deny Defendants’ Motion.

  Dated: March 24, 2025                        Respectfully submitted,

                                               LORINDA LOREYA, ACTING CHIEF
                                               U.S. DEPARTMENT OF JUSTICE
                                               CRIMINAL DIVISION, FRAUD SECTION

                                        By:     /s/ James V. Hayes
                                               James V. Hayes, Assistant Chief
                                               Florida Special Bar No. A5501717
                                               Reginald Cuyler Jr.
                                               Florida Bar No. 0114062
                                               Matthew R. Belz
                                               Florida Special Bar No. A5503303
                                               Trial Attorneys
                                               United States Department of Justice
                                               Criminal Division, Fraud Section
                                               1400 New York Avenue NW
                                               Washington, D.C. 20005
                                               (202)-774-4276 (Hayes)
                                               james.hayes@usdoj.gov
                                               reginald.cuyler.jr@usdoj.gov
                                               matthew.belz@usdoj.gov

                                  CERTIFICATE OF SERVICE

         I hereby certify that, on March 24, 2025, I served and filed the forgoing document with the
  Clerk of the Court via ECF.
                                 By:    /s/ James V. Hayes




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