Health Law Daily Wrap Up, ANTI-KICKBACK PROHIBITION—E.D. Mich.: Acquittal motion denied in Medicare kickback scheme, court rejects vagueness challenge to AKS, (Nov 17, 2025)

By Wendy Biddle, J.D.

The court found sufficient evidence of illegal referrals and willfulness under the Anti-Kickback Statute.

The federal district court in Detroit, Michigan denied a criminal defendant's motion for judgment of acquittal following her conviction on health care fraud charges, rejecting her arguments that the term "referral" in the Anti-Kickback Statute (AKS) is unconstitutionally vague and that insufficient evidence supported her conviction. The defendant, a home health aide who received approximately $200,000 for referring Medicare beneficiaries to health care agencies, worked for the Detroit Area Agency for Aging (DAAA), a nonprofit organization that assisted elderly and disabled Medicare beneficiaries. A jury previously found the defendant guilty of conspiracy to defraud the United States and to pay and receive health care kickbacks, as well as receipt of kickbacks in connection with a federal health care program (U.S. v. Smelter-Bolton, No. 23-cr-20062 (E.D. Mich. Nov. 12, 2025)).

Background. The defendant worked as a provider for DAAA, where she cleaned, cooked, grocery shopped, and provided other living support and chore services for DAAA clients. The case against her stemmed from her relationship with several home health care agencies owned or controlled by a co-defendant, including Community First Homecare LLC and Reflex Home Care, LLC.

According to evidence presented at trial, the defendant provided Medicare beneficiary information, largely obtained from her work with DAAA, to the health care agencies. Those agencies then billed Medicare for services provided to the referred beneficiaries. In exchange for each referral, the defendant or her company, Heart 2 Heart Home Aide Services, LLC, received approximately $500 per Medicare beneficiary.

Between May 16, 2016, and April 9, 2019, the defendant received approximately 178 payments totaling around $200,000. Rather than depositing these checks into her personal or business bank accounts, she endorsed and cashed them at a business called Eight Mile Party Shop, making the payments more difficult to trace.

Sufficiency of evidence challenge. The defendant challenged her conviction by arguing that the government failed to present sufficient evidence that she made a "referral" under the AKS. She contended that proving a referral by a layperson required the government to show she was the relevant decisionmaker, had authority over those providing medical services, or exercised undue influence over formal decisionmakers.

The court rejected this argument, finding that the term "referral" is not technical and that standard dictionary definitions provide adequate notice of prohibited conduct. Citing Black's Law Dictionary, the court noted that "refer" means "to send or direct (someone) for purposes of information, treatment, or help to refer a patient to a specialist physician."

The court found ample evidence supporting the jury's verdict. An employee of the agencies, testified that the defendant "would send patients to us that we would in turn pay her for." An agency employee tracked the defendant's referrals in a spreadsheet and confirmed she was paid for patient referrals. Significantly, the defendant herself characterized her work for Community First as making "referrals," and another agency employee testified that one payment was specifically for "referring one patient to Reflex."

The court distinguished cases the defendant cited involving bona fide advertising or marketing activities. In United States v. Miles, 360 F.3d 472 (5th Cir. 2004), defendants were paid by a public relations firm to distribute information about home health services to doctors, which the court found constituted advertising rather than referrals. By contrast, the defendant did not advertise services to patients but directly steered them to the agency's network by supplying their confidential information.

Willfulness requirement. The defendant also argued she could not have acted willfully because, as a layperson, she did not know what the AKS prohibits. The court rejected this argument, explaining that "willful" under the statute means only that a defendant knew she was receiving kickbacks unlawfully. The statute explicitly states that "a person need not have actual knowledge of this section or specific intent to commit a violation of this section."

The court found substantial evidence of willfulness. On June 7, 2019, the defendant attended a DAAA training that included a slide presentation covering the AKS. One slide specifically stated that the statute "prohibits knowingly and willfully offering, paying, soliciting, or receiving any remuneration in exchange for referrals of Federal health care program business." The defendant cashed 17 checks after this training and had referred a patient and received payment the day before the training.

Additionally, the defendant signed a "Long Term Support Service Agreement" with DAAA that required her to keep patient information confidential, informed her of criminal penalties for bribery, required disclosure of conflicts of interest, and specified she would look solely to DAAA for payment. She placed her initials next to each paragraph, indicating she understood and agreed to its contents.

The court also found that the defendant's efforts to conceal her conduct supported the willfulness finding. She cashed checks at a party store rather than depositing them in traceable accounts, and more than 160 checks falsely indicated payment for hourly work rather than per-patient referral fees.

Constitutional challenges. The court rejected the defendant's arguments that the term "referral" is unconstitutionally vague, that the rule of lenity should apply, and that the statute violates separation of powers and due process principles. The court found no ambiguity in the term "referral," noting it is defined in standard dictionaries and was a term the defendant herself used.

The court observed that several other courts have rejected vagueness challenges to the AKS, and that even if any ambiguity existed, the statute's scienter requirement mitigates potential vagueness concerns. The Supreme Court has recognized that scienter requirements may mitigate vagueness, particularly regarding notice that conduct is prohibited.

Finally, the court rejected the defendant's First Amendment challenge, agreeing with other courts that have found the AKS regulates the conduct of paying or receiving remuneration for referrals rather than protected speech.

The court denied the defendant's motion for judgment of acquittal in its entirety, finding that viewing the evidence in the light most favorable to the prosecution, a rational jury could have found all essential elements of the crimes beyond a reasonable doubt.

The case is No. 23-cr-20062.

Judge: Goldsmith, M.

Attorneys: Shankar Ramamurthy, U.S. Department of Justice, for the U.S. Elliott S. Hall (Elliott S. Hall PLLC) for Mary Smelter-Bolton.

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