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People v. Lee

Court of Appeals of Illinois, First District, Fifth Division

March 14, 2014

WON KYU LEE, Defendant-Appellee

Page 852

Appeal from the Circuit Court of Cook County. No. 11 CR 14147. Honorable Charles P. Burns, Judge Presiding.



A trial court properly granted defendant's motion to suppress the evidence obtained by way of a warrantless audit of his offices conducted as part of an investigation of his Medicare billing procedures by a company hired by a government agency to investigate allegations of fraud, waste, and abuse in Medicare programs, since the trial court's finding that the audit was a pretext for obtaining documents to further the criminal investigation of defendant's business and that a search warrant should have been obtained was not against the manifest weight of the evidence, especially when the record did not support the State's claim that defendant consented to the audit, and the Medicare statute providing for payment audits under the Medicare Integrity Program did not authorize a blanket consent for a search into criminal wrongdoing.

For Plaintiff-Appellant: Lisa Madigan, Attorney General of Illinois; Michael A. Scodro, Solicitor General; and Michael M. Glick and Stephen M. Soltanzadeh, Assistant Attorneys General.

For Defendant-Appellee: Jeffery P. Gray and Johanna J. Raimond.

JUSTICE McBRIDE delivered the judgment of the court, with opinion. Justices Palmer and Taylor concurred in the judgment and opinion.



Page 853

[¶1] Following a hearing, the trial court granted defendant Won Kyu Lee's motion to suppress evidence obtained pursuant to a warrantless search. The State appeals, arguing that the trial court erred in suppressing evidence from the administrative search of defendant's offices because defendant (1) expressly consented to the search and (2) consented to the search by entering into a contract with Medicare. The State also asserted in its opening brief

Page 854

that the search was valid under the administrative search exception to the fourth amendment set forth in New York v. Burger, 482 U.S. 691, 703, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987). However, in its reply brief, the State indicated in a footnote that " the People no longer contend that it applies on this record." Accordingly, we will not consider that issue in this appeal.

[¶2] In August 2011, defendant was charged by indictment with theft by deception, aggravated insurance fraud, computer fraud, and wire fraud. The charges stemmed from an investigation into defendant's Medicare billing at his business, Hankook Pain and Rehabilitation Clinic (Hankook).

[¶3] In June 2012, defendant filed a motion to suppress evidence obtained in a May 2007 audit of Hankook's two locations, Chicago and Mount Prospect. Defendant argued that the audit violated the fourth amendment because it was conducted without a warrant and with the purpose of aiding an ongoing criminal investigation. The trial court conducted a hearing on defendant's motion in November 2012. The following evidence was presented at the hearing.

[¶4] In August 2006, the Office of the Inspector General (OIG) of the Department of Health and Human Services (DHHS) referred a complaint about defendant to TrustSolutions " as a law enforcement request, for investigation and development." The referral stated that the OIG expected the matter to proceed " as a Law Enforcement referral and request for action."

[¶5] Daniel Poirier testified that he worked as an investigator with TrustSolutions. He explained that TrustSolutions was contracted by the Center for Medicare and Medicaid Services (CMS) to investigate allegations of fraud, waste, and abuse in Medicare programs. Poirier was assigned to investigate Hankook.

[¶6] He stated that when the complaint was received, TrustSolutions requested background information, and conducted a claims analysis of billing information. Based on the information received, the next step was an on-site audit of records for medical review. In December 2006, Poirier made initial contact with Special Agent Chuck Pawelko of the Federal Bureau of Investigation (FBI). In an exhibit outlining his activity in the Hankook investigation, Poirier indicated Pawelko " requested copies of all data and research that [he] had previously conducted and analyzed." Pawelko also " requested that no contact be made to this provider (by telephone or in person)." Also in December 2006, the FBI, in a letter, asked TrustSolutions to delay an on-site audit to allow them " to explore possible covert investigation measures. We believe that our investigation will be more fruitful if Hankook is unaware of any type of investigation at this time."

[¶7] In the interim, Poirier had frequent conversations with the FBI, including conference calls and sharing research. In January 2007, Poirier " conducted further research to find the necessary documentation related to each issue [law enforcement] inquired about." He reviewed data requests with Pawelko. In February 2007, a " conference call was held to discuss law enforcement's request for TrustSolutions to 'hold off' on this investigation." In March 2007, Poirier participated in another conference call to discuss law enforcement's status. At that time, law enforcement requested three more weeks because " they were in the final stages of their undercover operations and did not want the investigation jeopardized."

[¶8] In April 2007, Poirier requested permission to conduct an unannounced on-site

Page 855

audit of Hankook offices. The request form stated that the objective was " [t]o further substantiate the allegations against this provider and to witness firsthand the daily operations in both facilities. Ultimately, this investigation will be referred to law enforcement based on all evidence gathered on the audit." Poirier testified that after the audit request was approved, law enforcement requested that undercover law enforcement agents accompany TrustSolutions during the audit. The request was approved by CMS, but an assistant United States Attorney (AUSA) denied the request. The FBI did provide a Korean translator during the audit to help conduct interviews and read some documents.

[¶9] The on-site audit was conducted from May 7-11, 2007. On May 7, 2007, TrustSolutions investigators arrived unannounced at both Hankook locations. Poirier was with the team at the Chicago office. The investigators presented Medicare badges and a letter stating the purpose of the audit. Defendant was not present at the Chicago office, but was at the Mount Prospect location. Poirier spoke with Janice Roe, the office manager, and gave her the letter.

[¶10] The letter stated that TrustSolutions was " responsible for conducting audits to ensure that Medicare claims have been billed and paid in the appropriate manner. Per 42 CFR § 424.5(a)(6) a basic condition for Medicare payment, the provider must furnish sufficient information to justify payment." The letter provided that " [t]he audit will include at least but not limited to obtaining medical records, interviewing staff, etc." The letter explained that the ...

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