United States District Court, D. Minnesota
Michael Maria and John Kokkinen, Assistant United States
Attorneys, for Plaintiff.
Scott for Defendant Huy Ngoc Nguyen.
Owens for Defendant Jerome Tarlve Doe.
Shannon R. Elkins for Defendant Napoleon Tutex Deah.
AMENDED REPORT AND RECOMMENDATION
FRANKLIN L. NOEL UNITED STATES MAGISTRATE JUDGE
MATTER came before the undersigned United States
Magistrate Judge on May 23, 2017, on Defendant Huy Ngoc
Nguyen's motion to suppress search and seizure evidence
(ECF No. 77); as well as Defendants Nguyen, Jerome Tarlve
Doe, and Napolean Tutex Deah's collective motion to
dismiss the Indictment (ECF No. 69). This matter was referred
to the undersigned for Report and Recommendation pursuant to
28 U.S.C. § 636 and Local Rule 72.1. At the hearing, the
Government entered two exhibits into evidence. See
Exhibit and Witness List, ECF No. 83. For the reasons set
forth below, Defendants' motions should be
December 20, 2016, a United States Grand Jury returned an
indictment, charging Defendant Huy Ngoc Nguyen with making
illegal kick-back payments to Defendants Jerome Tarlve Doe
and Napoleon Tutex Deah, in a scheme to defraud automobile
insurance companies by submitting claims and receiving
reimbursements through his chiropractic clinics for
chiropractic services that either were not medically
necessary or were not rendered. Indictment, ECF No. 1.
Defendants are charged with one count of conspiracy to commit
health care fraud and one count of conspiracy to commit mail
fraud, in violation of 18 U.S.C. § 1349. Id. at
18-21; see also 18 U.S.C. §§ 1341, 1347.
The Indictment alleges that Nguyen, who is a chiropractor and
the chief executive officer of Healthcare Chiropractic
Clinic, Inc. (“Healthcare Chiropractic”), paid
Doe and Deah, to recruit automobile accident victims to show
up for medical appointments and continue receiving
unnecessary chiropractic services. Id. ¶¶
2-17. Defendants are also alleged to have paid
some of these recruited patients directly to continue going
to Nguyen's clinics for chiropractic treatments.
Id. ¶ 12. Under this scheme, Defendants are
accused of causing automobile insurance companies to have
paid millions of dollars as a result of false and fraudulent
reimbursement claims. Id. ¶ 17. Trial is
scheduled to begin on October 16, 2017, before the Honorable
Judge Michael J. Davis. Order, ECF No. 85.
Motion to Suppress Search and Seizure Evidence (ECF No.
December 14, 2015, the Honorable Magistrate Judge Becky
Thorson signed two search warrants authorizing the search of
Healthcare Chiropractic offices located in Minneapolis,
Minnesota, and in Brooklyn Park, Minnesota. Gov't Exs.
1-2, ECF No. 83. Nguyen now moves to suppress any evidence
obtained during searches pursuant to these warrants,
contending that because the affidavits in support of the
warrants rely on Minnesota Statute section
609.12 (“the Runner Statute”) and
because the affiant failed to include reference to the August
19, 2014, Illinois Farmers Insurance Co. v. Mobile
Diagnostic Imaging Order, see No. 13-cv-2820
PJS/TNL, 2014 WL 4104789, at *1 (D. Minn. Aug. 19, 2014),
Magistrate Thorson did not know to disregard the allegations
related to the Runner Statute in the affidavit. See
Mot. to Suppress, ECF No. 77. If she had, Nguyen contends,
Judge Thorson would have determined that the affidavit does
not support a finding of probable cause. See Id.
Nguyen also asserts that the warrants “cannot be saved
by United States v. Leon, 468 U.S. 897, 915, 924
(1984)[, ] because no agent could have believed that his
declaration on the reach of the mail fraud law could supply
probable cause to support the issuance of a search
warrant.” See Id. The Government argues that
Illinois Farmers, “does not foreclose a
federal prosecution for mail, wire, or health care fraud
based on evidence that chiropractors made kickback payments
to runners and then omitted, failed to disclose, or concealed
that practice.” Gov't Opp'n Mem. 34, ECF No.
79. Additionally, the Government contends that the search
warrant does not rely on violations of the Runner Statute as
the basis for the fraud charges. Id. at 34-35.
reviewing the Order, the Court first observes that
Illinois Farmers does not foreclose a federal
prosecution under the facts alleged in the Indictment, nor
does it prohibit a probable cause finding that evidence of a
crime may be found based on the affidavits at issue in this
case. See 2014 WL 4104789. Here, FBI Special Agent
Jennifer Khan authored nearly identical affidavits in support
of the search warrants to the Heathcare Chiropractic offices.
ECF No. 83, Gov't Exs. 1-2. The affidavits include
approximately seven pages outlining the ongoing joint
investigation of the FBI and the Minnesota Department of
Commerce Fraud Bureau into the suspected scheme and fraud.
Id. Based on evidence collected from a confidential
informant and an FBI confidential employee posing as a
patient, Khan attested that she believed evidence of a fraud
could be found in the Heathcare Chiropractic offices.
without deciding that the search warrants lacked probable
cause, the Court concludes that the evidence is nonetheless
admissible under the good-faith exception to the exclusionary
rule as articulated in Leon. See 468 U.S. at 922;
see also United States v. Clay, 646 F.3d 1124 (8th
Cir. 2011) (“[T]he exclusionary rule should not be
applied so as to bar the admission of evidence obtained by
officers acting in reasonable reliance on a search warrant
issued by a detached and neutral magistrate, even if that
search warrant is later held to be invalid.” (citing
Leon, 468 U.S. at 900)).
Eighth Circuit has outlined four situations where an
officer's reliance on a warrant would be unreasonable:
(1) the officer included information in the affidavit that he
knew was false or would have known was false except for his
reckless disregard of the truth; (2) the affidavit is so
lacking in probable cause that it is objectively unreasonable
for the officer to rely on it; (3) the judge failed to act in
a neutral and detached manner; or (4) the warrant is so
facially deficient that the officer cannot reasonably presume
the warrant to be valid. See United States v.
Phillips, 88 F.3d 582, 586 (8th Cir. 1996) (citing
Leon, 468 U.S. at 922). None of these situations are
applicable here. This is not a situation where the supporting
affidavits were so devoid of factual support that it would be
objectively unreasonable for a law enforcement officer to
rely on it. Cf. United States v. Herron, 215 F.3d
812 (8th Cir. 2000) (concluding that the good-faith exception
did not apply where the affidavit at issue contained no facts
that the defendant was involved in marijuana activities or
that such activities were occurring on the premises
searched). The record does not support a finding that the
officers' reliance on the warrants were unreasonable.
See Leon, 468 U.S. at 922. Additionally, there is no
evidence that Khan included false information in the warrant
application, that Judge Thorson failed to act in a neutral
manner, or that the warrants were so facially deficient it
would be unreasonable for an officer to rely on them. Indeed,
Nguyen does not argue that there are factual deficiencies in
the affidavits, but only contends that Khan failed to include
what he believes to be applicable law. Therefore, the motions
to suppress evidence obtained pursuant to the search warrants
authorizing the search of the Heathcare Chiropractic offices,
must be denied. See id.
Motion to ...