COVID concerns delay Medicaid fraud trial
POWELL — Citing the threat posed by the ongoing COVID-19 pandemic, a federal judge has delayed the trial of three local men who are accused of defrauding Medicaid out of millions of dollars.
Federal prosecutors allege that Matthew “Ty” Barrus, Greg Bennett and Devin Dutson — who all were involved with the former Northwest Wyoming Treatment Center — submitted $8.5 million worth of fraudulent claims to Wyoming Medicaid between 2009 and 2015. The U.S. Attorney’s Office alleges that they and the Powell center billed Medicaid for services they knew could not be covered by Medicaid and made false statements to get payment.
Barrus, Bennett and Dutson, who have been free on bond for the past year-and-a-half, have denied the allegations.
Federal prosecutors obtained an indictment against the three men in September 2019. After a yearlong delay due to the novel coronavirus, the case had been scheduled to go to trial in early June. However, at a recent hearing, presiding U.S. District Court Judge Alan Johnson decided to push the trial back further, to Nov. 1.
“I think we will be much better positioned after the vaccination has gone forward in this nation,” Johnson said, referring to immunizations against COVID-19.
The judge also added his belief that the case may very well go to trial.
“This is a case that certainly does not appear to be one that is well-suited for a plea agreement of any kind,” he said.
Federal prosecutors sought to keep the June trial date, noting that COVID-19 activity has dropped significantly in recent months. Attorneys for Bennett, Barrus and Dutson, however, argued the pandemic was still making it too dangerous and difficult to prepare for trial.
For instance, the defense attorneys said it’s been effectively impossible to conduct face-to-face interviews with potential witnesses and said they’re still combing through a mountain of information related to the case.
“Of course, our clients would like to be done with this matter. They’ve been living with this hanging over their head,” said Casper attorney Ian Sandefer, who represents Bennett. “But their concern for fairness — to get a full, adequate and strong defense — overrides their concern for expediency in this case.”
Cheyenne attorney Terry Harris, who represents Barrus, said the three defendants “hope to salvage whatever fairness they can” through a trial.
“We are quite confident that our clients will be found not guilty following any fair trial that takes place,” Harris said.
During the time period in question, from April 2009 to August 2016, all three men worked for Northwest Wyoming Treatment Center. Barrus served as executive director, Bennett was clinical director and Dutson worked as a counselor, according to organization records and charging documents.
The now-dissolved nonprofit organization began in Powell as a group home, but later expanded to provide substance abuse treatment for teens. That program is the subject of the criminal case.
In investigating Northwest Wyoming Treatment Center, federal prosecutors amassed some 110,000 documents, ranging from patients’ records and treatment logs to emails and financial records, with 30 interview reports and 19 recorded interviews. Together they comprise upwards of 44 gigabytes of data. That doesn’t include 30 bankers’ boxes of documents and the data on eight computers that the defense team retrieved from the center’s former facility on Julie Lane. The government had deemed those materials to be irrelevant, but Harris said they actually contain exculpatory evidence, including “documents generated by the State of Wyoming, Medicaid, the Department of Health.”
Assistant U.S. Attorney Eric Heimann has described the case as complex, given the volume of evidence, the number of witnesses the government and defendants may call and the details of how Wyoming Medicaid operates and how bills are submitted. However, in arguing against a delay in a filing last month, he said trial preparations would not be overly long or complex.
“The charged fraud will not be difficult for the jury to understand,” Heimann wrote. “The defendants billed Wyoming Medicaid all day every day for activities that are not covered by Medicaid (including sleeping, eating, playing video games, weightlifting and traveling the state for recreational activities) as if those activities were covered substance abuse treatment.”
At the hearing, Heimann said the request for a delay suggests the defendants “think they have a better chance of acquittal if they get the continuance.” He argued that delaying a trial — the defendants had suggested pushing the date as far back to early 2022 — would create problems with witnesses’ testimony and availability.
“The public has an interest in a resolution in this case with witnesses who still remember what happened,” he said.
However, Harris noted the high stakes in the case for Barrus, Bennett and Dutson, who are facing 15 felony charges between them and the possibility of prison time, if they’re convicted.
Salt Lake attorney Ed Wall, who represents Dutson, added that prosecutors “took their time” in bringing the case; Heimann reportedly notified center officials of the pending criminal investigation in so-called target letters sent back in May 2018.
Heimann acknowledged that “the government did spend considerable time investigating this case.” However, he said investigators were unable to get into the facility to collect evidence until March 2019.
“That was because NWTC’s [former] counsel, for at least a year-and-a-half, refused to let us in to get those materials,” Heimann said, and he described those items as representing the bulk of the evidence in the case.
Judge Johnson’s decision to delay the case ultimately hinged on COVID-19 and the risks and challenges it would present for the attorneys, defendants, court staff and jurors.
Harris spent roughly 40 minutes going over facts and figures related to the disease — from the percentage of Wyoming cases attributed to community spread to one projection suggesting 164,500 more deaths across the country by June — to make the case to delay the trial. He even read a recent statement from Democratic Rep. James Clyburn of South Carolina, who said the Trump administration’s response to the novel coronavirus “failed across the board” while the Biden administration has offered a “strong national response.”
However, Heimann argued to Judge Johnson that “the aggregate pain and suffering of the pandemic is not the determining factor for your decision today.” He noted that the situation in Wyoming has dramatically improved since November and December, attributing it to people wearing masks and social distancing.
“Is it 100%? No. Could it all go south because a critical mass of people decide they don’t need to wear their mask anymore? Yes. But we’re not there now,” he said, suggesting the trial could be delayed later on, if necessary.
However, the defendants said COVID-19 continues to “plague” the nation and Wyoming.
Sandefer spoke of a Casper attorney who recently died from the disease; he said the lawyer had been careful, but was infected at a deposition that his opposing attorneys had insisted upon holding in-person.
“That is a very real risk here,” Sandefer said. “We sometimes look at these big abstract numbers, and we don’t bring it down to a human level.”
Johnson noted the attorney’s death and also spoke about the nature of viruses and Americans’ susceptibility to COVID-19 as “fat people.” The judge also said he feels sorry for those who “foolishly refuse” the vaccines and wondered whether the shots and masks will become part of everyday life.
“... at this point,” he said, “you don’t know if we will ever be totally able to return to life as we knew it in February of 2020 and all the years before.”
Beyond the pandemic, Johnson also noted the seriousness of the case for Barrus, Bennett and Dutson.
“All of us cannot imagine our own situation if confronted with a federal prosecution and a possibility of a prison sentence,” Johnson said.
The judge noted a related case that the U.S. Attorney’s Office pressed against Northwest Wyoming’s Treatment Center’s founder, former psychologist Gib Condie of Powell, back in 2017. Prosecutors said Condie defrauded Medicaid out of more than $2.28 million between 2012 and 2016 through his for-profit business, Big Horn Basin Mental Health Group.
Condie ultimately pleaded guilty to a felony count of health care fraud, agreed to pay millions of dollars in restitution and served more than two-and-a-half years in prison.
Although Condie turned Northwest Wyoming Treatment Center’s operations over to Barrus in mid-2011, an attorney involved with the case has said the center’s legal issues stemmed from “leadership and advice” Condie provided to the organization.
In 2019, the treatment center’s board of directors agreed to forfeit the organization’s real estate and other assets — easily worth $750,000 — to the federal government; Heimann has said that center officials agreed the government was going to be able to prove the organization “submitted false and fraudulent substance-abuse treatment bills to Wyoming Medicaid.”
At last month’s hearing for Dutson, Bennett and Barrus, Judge Johnson remarked that Condie “literally lost everything” in his case, when the federal government seized “the illegal proceeds and gain from his unlawful scheme.”
Barrus, Bennett and Dutson’s trial is expected to run for the full month of November in Cheyenne.