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Judge orders Dr. Paulus Released; Conviction Reversed

On March 5, 2020, the U.S. Court of Appeals for the Sixth Circuit vacated the conviction of Doctor Richard Paulus and released him from prison where he was serving a draconian five-year sentence because the federal prosecutor withheld key exculpatory evidence the jury should have considered  in deciding whether to convict him.  The court ruled this was a clear violation of the doctor’s due process rights. 

Doctor Paulus was convicted of medicare fraud because of a dispute with the government over whether his use of stents in patients with narrowing arteries was warranted in a few of his hundreds of patients. 

This case is a clear example of the government second-guessing decisions by professionals and executives over reasonable medical and business decisions where non-criminal remedies are more appropriate.  Similar unjust prosecutions were brought against CEO Todd Farha in the WellCare case and Howard Root of Vascular Solutions, both featured on the Cases section of this website.

Here is a news article describing the Paulus case in more detail.

Originally published at The Daily Independent by Mike James | March 6, 2020

Former Ashland cardiologist Richard Paulus was poised to be released from prison Friday following the reversal of his conviction for health care fraud.

U.S. District Court Judge David L. Bunning ordered his release earlier in the day, court records show.

An appeals court voided his conviction Thursday, court records show.

A three-judge panel of the U.S. Sixth Circuit Court of Appeals issued the ruling, according to court records.

The ruling sends the case back to a lower court for retrial.

Bunning’s order calls for Paulus to be released immediately but to remain on the same bond conditions as before he went to prison, with one exception.

Bunning removed a requirement for electronic monitoring, according to court records.

The appeals court judges ruled that government attorneys withheld evidence and so violated Paulus’ due process constitutional rights. They ruled that the government case was based largely on angiograms — images showing the degree of blockage in blood vessels — showing Paulus overstated the degree of blockage.

But evidence withheld from Paulus and his attorneys showed government experts based their findings on too few samples to make accurate conclusions, and that the angiograms they examined may have been “cherry-picked” by government attorneys, the panel said.

Prosecutors improperly withheld a key piece of evidence, a letter outlining an independent review by King’s Daughters Medical Center of Paulus’ work referred to as the “Shields Letter.”

The letter, from KDMC’s attorneys to government attorneys, was intended to protect the hospital at a time when it was under government scrutiny. The letter outlined a review of more than 1,000 of Paulus’ procedures, of which 75 were flagged as unnecessary.

That number came to about 7%, far lower than the amount government witnesses had testified to during the trial.

“This lower percentage was less consistent with systemic and purposeful fraud and more consistent with occasional mistakes or diagnostic differences of opinion between cardiologists,” judges wrote.

Paulus could have used the review and the letter in his defense, but Bunning “inexplicably” ordered KDMC and government attorneys not to disclose information about the review, judges wrote.

That order was issued in a hearing that included KDMC and the government but did not include Paulus or his legal team.

The judges found indications that not having the letter hampered Paulus’ defense enough to affect the verdict. The indications included a twice-deadlocked jury and Bunning’s reversal of the conviction in 2017.

Paulus’ legal troubles date back to 2015, when he was indicted on 27 counts related to accusations he had performed unnecessary cardiac stent procedures on hundreds of patients as part of a scheme to defraud Medicare, Medicaid and other insurers.

A federal court jury convicted him after a seven-week trial in 2016 of health care fraud and making false statements relating to health care matters.

He sought a new trial, but before the request was decided, Bunning reversed the conviction and acquitted Paulus.

The government appealed and an appeals court reinstated the conviction in 2018.

Bunning denied him a new trial and sentenced him to five years in May 2019.

Paulus reported to the Beckley Federal Correctional Institution in June 2019.

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