Liver4you Health Care Fraud Leads To ‘Mass-Marketing’ Sentencing Enhancement

Jerome H. Feldman, once a practicing psychiatrist, defrauded Medicare by receiving funds he was not entitled to receive and then fled the U.S. to live as a fugitive in the Philippines. There, Feldman created the website www.liver4you.org, fraudulently promising to provide critically ill patients liver or kidney transplants for $65,000 to $130,000. After Feldman was located in the Philippines and deported to the US, Feldman pleaded guilty to one count of health care fraud and five counts of wire fraud. Feldman was sentenced to 188 months in prison and three years of supervised release, and appealed. Among other things, he argued that his liver4you.org Web site was not mass-marketing pursuant to the Sentencing Guildelines, U.S.S.G. §2B1.1(b)(2)(A)(ii), because he did not initiate contact with his victims; they found his Web site – publicly available online – and emailed him at an address listed on the Web site. 

The U.S. Court of Appeals for the Second Circuit has rejected Feldman's argument. According to the circuit court, Feldman committed fraud by using the internet to solicit a large number of persons to buy his organ transplant services. The Second Circuit concluded that the mass-marketing enhancement applied “even if Feldman did not use the most active marketing method possible.”
 
The case is U.S. v. Feldman, 10-2275 (L) (2d Cir. Aug. 1, 2011).