The U.S. Supreme Court declined to review an $82 million restitution order imposed on a group of doctors convicted of participating in a large-scale fraud scheme in Texas. However, Justice Neil Gorsuch dissented, arguing that the lower court’s decision on restitution warranted further scrutiny.
The case involved Forest Park Medical Center, a physician-owned hospital in Dallas that was not part of any insurance network and did not accept Medicare or Medicaid payments. The hospital’s business model relied on securing high-reimbursement patients for out-of-network procedures. To achieve this, its owners engaged in a scheme that involved paying kickbacks to referring physicians, disguising the illegal payments as “marketing money” or consulting fees. This practice ultimately led to their criminal prosecution and conviction under the federal Anti-Kickback Statute (AKS).
Seven defendants were sentenced to a combined 74 years in prison and ordered to pay $82.9 million in restitution. Several of them challenged the restitution order, arguing that the Mandatory Victims Restitution Act (MVRA) did not apply to their case because their crimes were not offenses “against property.” They acknowledged that their actions resulted in private insurance companies being deprived of funds through fraudulent means but contended that courts should apply a strict “categorical approach” in determining whether restitution was appropriate. This approach would require courts to consider only the statutory elements of the offense, rather than the details of how the crime was committed.
The U.S. Court of Appeals for the Fifth Circuit rejected this argument. Writing for the court, the presiding judge ruled that restitution under the MVRA should be determined based on the actual conduct of the defendants rather than a strict interpretation of statutory elements. The ruling emphasized that the trial court had the authority to consider the facts and circumstances of the offense when deciding on restitution.
The Supreme Court’s refusal to hear the case left the Fifth Circuit’s ruling in place. However, Gorsuch dissented, raising concerns about the constitutional implications of the restitution order. He argued that under the Sixth Amendment, a jury not a judge should be responsible for making factual determinations that lead to increased penalties, including restitution. Citing historical precedent, he suggested that at the time of the nation’s founding, juries, rather than judges, played a central role in deciding facts necessary to justify restitution.
Gorsuch expressed skepticism about the current approach, stating, “I have my doubts” regarding whether judges should have the authority to impose restitution based on their own factual findings. He called for a more thorough review of the issue to determine whether the Fifth Circuit’s analysis aligned with constitutional principles and historical legal standards.
He concluded with a cautionary note, emphasizing the importance of courts continuing to carefully consider the Sixth Amendment’s role in criminal restitution decisions.
