## Facts

- Dr. Roland Borrasi owned Integrated Health Centers, S.C., a group of healthcare providers in Illinois, and interacted with Rock Creek Center, a psychiatric hospital whose revenues primarily came from Medicare reimbursements.
- Between roughly 1999 and 2002, Borrasi and Rock Creek executives conspired to pay Borrasi and other Integrated clinicians money in exchange for an increasing flow of Medicare patient referrals to Rock Creek.
- Rock Creek paid approximately $647,204 in potential bribes to Borrasi and Integrated physicians; in 2001, Borrasi referred about 484 Medicare patients to Rock Creek.
- To conceal the payments, Rock Creek put Borrasi and other Integrated personnel on its payroll under false titles and job descriptions and required false time sheets; Borrasi was designated “Service Medical Director” but was not expected to perform listed duties.
- Rock Creek also paid expenses tied to Integrated (including lease-related expenses), further linking compensation to the referral relationship.
- A federal grand jury charged Borrasi with conspiracy (18 U.S.C. § 371) and six counts of Anti-Kickback violations (42 U.S.C. § 1320a-7b(b)); a co-defendant pled guilty, while Borrasi proceeded to trial and was convicted on all counts.
- The district court denied post-trial motions, sentenced Borrasi to 72 months’ imprisonment (plus supervised release), and imposed a substantial fine; Borrasi appealed his conviction and sentence.

## Issues

1. Whether the district court improperly admitted hospital committee minutes to prove attendance while excluding related report materials as hearsay.
2. Whether the jury instructions misstated the Anti-Kickback Statute by using the “one purpose” test (i.e., a payment is unlawful if one purpose is to induce referrals).
3. Whether the Anti-Kickback Statute’s employee exception shields compensation paid under an asserted employment relationship when inducing referrals is a purpose of the payments.
4. Whether the sentence was procedurally or substantively unreasonable, including loss calculation, leadership enhancement, and claimed disparity with a co-defendant who pled guilty.

## Decision

- The Seventh Circuit affirmed the convictions and sentence.
- The court upheld admission of meeting minutes to establish attendance records while approving exclusion of referenced report content as inadmissible hearsay.
- The court approved the “one purpose” jury instruction for Anti-Kickback liability.
- The court rejected an expansive reading of the employee exception that would immunize sham employment compensation tied to referrals.
- The court held the district court reasonably estimated loss, properly applied a leadership enhancement, and adequately explained a higher sentence than a co-defendant’s.

## Legal Principles

- Evidence may be admitted for a limited, non-hearsay purpose (e.g., to show recorded attendance) even if related materials offered for their truth are properly excluded as hearsay.
- The federal Anti-Kickback Statute is violated if one purpose of remuneration is to induce or reward referrals reimbursable by a federal healthcare program, even if the payment also has other asserted legitimate purposes.
- The employee exception in 42 U.S.C. § 1320a-7b(b) protects only bona fide employment compensation for the provision of covered items or services; it does not shield sham arrangements or payments functioning as referral inducements.
- Sentencing courts may reasonably estimate loss based on the record; leadership enhancements apply where a defendant organizes, directs, or leads others in the criminal conduct; disparity arguments fail where differences are explained by role and plea posture.

## Conclusion

The Seventh Circuit upheld Anti-Kickback convictions and a 72-month sentence where a physician received disguised remuneration through sham payroll arrangements tied to Medicare referrals, confirming that liability attaches when inducing referrals is a purpose of the payments and that the employee exception does not protect non-bona fide employment used to mask kickbacks.


United States v. Borrasi, 639 F.3d 774 (7th Cir. 2011)