United States v. Schaul, No. 19-1632 (7th Cir. 2020)
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Schaul's business, ChildRite, provided incontinence supplies for special-needs individuals. In 2009-2013, Schaul submitted claims for Medicaid reimbursement for four million units; approximately one million of those units did not exist. He obtained $582,844.10 from Medicaid for those nonexistent items. Charged with health care fraud, 18 U.S.C. 1347, Schaul entered into a plea agreement that described a scheme to defraud Medicaid, substantially identical to that described in the indictment. It stated that Schaul’s counsel had “fully explained” the indictment and the charges and that Schaul fully understood the nature and elements of the crimes. The agreement erroneously stated that the government needed to prove that the defendant “knowingly or willfully" executed the scheme.” The statute requires proof that the defendant acted “knowingly and willfully.” At his hearing, Schaul agreed with the government’s factual allegations and stated that he had discussed the charges with counsel; that he understood the charge; that he had no questions; and that he was satisfied with his counsel’s representation.
When the prosecutor explained the elements of the offense, he read from the plea agreement, which incorrectly stated the mens rea element. The court imposed a 24-month sentence plus $582,844.10 in restitution. After his attorney moved to withdraw, Schaul filed an unsuccessful motion to delay the date of his reporting to the Bureau of Prisons. Schaul filed a motion to reconsider, stating, for the first time, that he could “prove … there was no intent to commit fraud.” The Seventh Circuit affirmed the denial of the motion. The misrepresentation of the elements of the offense constituted plain error but did not affect Schaul’s substantial rights. The record affirmatively demonstrates that he knowingly and willfully violated the law.
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