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United States of America v. Sukhdarshan S. Bedi

October 18, 2011

UNITED STATES OF AMERICA,
PLAINTIFF,
v.
SUKHDARSHAN S. BEDI, ILLINOIS HEALTHCARE CLINIC, P.C. D/B/A MARION FAMILY HEALTH CARE, M-CFHC, INC. D/B/A HARRISBURG FAMILY HEALTHCARE, AND GALATIA MEDICAL CENTER CORP.,
DEFENDANTS.



The opinion of the court was delivered by: Stiehl, District Judge

MEMORANDUM & ORDER

This matter is before the Court on plaintiff United States of America's motion for summary judgment (Doc. 17). Defendant Sukhdarshan S. Bedi has responded (Docs. 33 & 34), but defendants Illinois Healthcare Clinic, P.C. d/b/a Marion Family Health Care; M-CFHC, Inc. d/b/a Harrisburg Family Healthcare; and Galatia Medical Center Corporation have not. In this action, plaintiff seeks civil damages from defendants under the False Claims Act (31 U.S.C. § 3729) and the Controlled Substances Act (21 U.S.C. § 829), as well as for common-law fraud, breach of contract, unjust enrichment, and payment by mistake (Doc. 2). After the complaint was filed in this action, defendants were indicted and pled guilty before this Court in United States v. Bedi et al., Case No. 9-CR-40048-JPG, for the same conduct giving rise to this action.

I. BACKGROUND

Defendant Sukhdarshan S. Bedi, M.D., owned or operated three medical clinics in Southern Illinois, including defendants Illinois Family Healthcare, P.C. d/b/a Marion Family Health Care; M-CFHC, Inc. d/b/a Harrisburg Family Healthcare; and Galatia Medical Center Corporation (the "Clinics"). The three Clinics were enrolled in the Illinois Medical Assistance Program and designated as rural health clinics by the Illinois Department of Healthcare and Family Services. Based on this designation, the Clinics were authorized to provide general medical services to Medicaid recipients in areas deemed to be medically underserved.

On or about June 24, 2007, Bedi prescribed 60 pills of Methadone to Donald Singleton in exchange for construction work at Bedi's home. Bedi was charged, in Count 6 of the Government's Superseding Indictment, with knowingly dispensing and causing to be distributed a prescription for a Schedule II controlled substance not in the usual course of professional practice (Doc. 67, Case No. 9-CR-40048-JPG). See 21 U.S.C. § 841(a)(1).*fn1 The Government dismissed Counts 4, 5, and 7--12 as to Bedi. Count 12 had accused him of healthcare fraud against the Medicaid program (Doc. 22, Case No. 9-CR-40048-JPG).

Bedi entered an open plea of guilty. His plea agreement stated: "It is further understood that this Agreement to Plead Guilty does not prohibit the United States, any agency thereof, or any third party from initiating or prosecuting any civil proceedings directly or indirectly involving the Defendant" (Doc. 66, ¶ 3, Case No. 9-CR-40048-JPG). Bedi acknowledged "that there is a parallel civil proceeding against him and that this open plea has no effect on that proceeding" (id., ¶ 8). He agreed to pay $47,784.31 in criminal restitution to Medicaid.

The Clinics were also indicted in the criminal case (Doc. 69, Case No. 9-CR-40048-JPG). They pled guilty to Count 7, conspiracy to illegally dispense controlled substances in violation of 21 U.S.C. § 846; and to Count 12, healthcare fraud against the Medicaid program in violation of 18 U.S.C. § 1347 (id.). They agreed to pay criminal restitution of $47,748.31 to Medicaid, for which they would be jointly and severally liable with Bedi.

Under Count 7, the Clinics stipulated that their two mid-level practitioners, Randy Doty and Mohamed Elsamahi, knowingly dispensed by prescription, and caused to be distributed, Schedule II controlled substances that they were not authorized to dispense using pre-signed blank prescriptions given to them by Bedi (Doc. 70, Case No. 9-CR-40048-JPG). Those prescriptions caused $47,748.31 in unauthorized prescription claims to be paid by the Illinois Department of Healthcare and Family Services, a healthcare benefit program (Medicaid) (id.).

Under Count 12, the Clinics stipulated that they had submitted claims to Medicaid for non-covered services, both for "medically unreasonable and unnecessary prescription controlled substances and for medically unreasonable and unnecessary visits claimed as rural health encounters" (id.). In addition, the Clinics agreed that their practitioners Doty and Elsamahi had "knowingly and intentionally dispensed by prescription, and caused to be distributed, Schedule II controlled substances to Medicaid eligible patients that they were not authorized to dispense" (id.).

This matter is the parallel civil proceeding against Bedi and the Clinics. Plaintiff United States of America, on behalf of the United States Department of Health and Human Services, brings seven counts pursuant to the False Claims Act (31 U.S.C. § 3729), the Controlled Substances Act (21 U.S.C. § 829(a)), and other common-law theories. Plaintiff seeks compensatory damages, civil penalties, certain equitable remedies, and attorney's fees and costs.

II. DISCUSSION

Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); accord Int'l Union v. ZF Boge Elastmetall LLC, 649 F.3d 641, 646 (7th Cir. 2011). All facts and inferences are to be drawn in favor of the nonmoving party. Timmons v. Gen. Motors Corp., 469 F.3d 1122, 1125 (7th Cir. 2006). However, this does not include "[i]nferences which are supported only by speculation or conjecture." Fischer v. Avanade, Inc., 519 F.3d 393, 401 (7th Cir. 2008). Therefore, the nonmoving party must "do more than raise some metaphysical doubt as to the material facts; he must come forward with specific facts showing that there is some genuine issue for trial." Keri v. Bd. of Trs. of Purdue Univ., 458 F.3d 620, 628 (7th Cir. 2006) (citations omitted) (quoted in Argyropoulos v. City of Alton, 539 F.3d 724, 732 (7th Cir. 2008)). A genuine issue of material fact exists "only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party." Argyropoulos, 539 F.3d at 732 (quoting Sides v. City of Champaign, 496 F.3d 820, 826 (7th Cir. 2007)).

III. ANALYSIS

Failure to Respond to the Motion for Summary Judgment

These proceedings were stayed during the pendency of the criminal case, November 2009 through September 2010, after which the stay was lifted. Plaintiff filed the instant motion for summary judgment on November 17, 2010 (Doc. 17).

To date, the Clinics have not responded, notwithstanding that they were represented in the criminal case by Gilbert C. Sison, who currently represents, and has filed a response in this case on behalf of, defendant Bedi. After the motion for summary judgment was filed, plaintiff filed a notice directed to pro se defendants to warn them of the consequences of failing to respond (Doc. 19). The Court then issued an Order on April 15, 2011, directing defendants to show cause within ten days why judgment should not be entered in plaintiff's favor (Doc. 30). Only Bedi responded to the show-cause order, and the Court granted him additional time to file a response, which he did on May 20, 2011 (Docs. 33 & 34).

On a motion for summary judgment, if a party fails to address another party's assertion of fact, the Court may:

(1) give an opportunity to properly support or ...


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