US Supreme Court overturns health care fraud conviction of Maine man awaiting sentencing in pot farm case

Posted April 21, 2014, at 3:34 p.m.
Last modified April 21, 2014, at 6:43 p.m.
Rodney Russell
Kevin Bennett
Rodney Russell

BANGOR, Maine — The health care fraud conviction of a man awaiting sentencing in the Township 37 marijuana case was vacated Monday by the U.S. Supreme Court on technical grounds and sent back to the 1st U.S. Circuit Court of Appeals in Boston.

The case was considered on briefs and sent back to the lower court. Justices did not hear oral arguments, according to information posted in the court’s website. Justice Antonin Scalia was the only justice who voted not to consider the case.

Rodney Russell, 50, of South Thomaston was sentenced to five months in prison and three years of supervised released in March 2012 after he was convicted by a jury of lying when he applied for state-funded health care. He had served his sentence when he was tried on drug charges.

In January, Russell, two other men and a corporation were convicted in federal court in Bangor of conspiring to run a pot plantation in Township 37 in Washington County. All three are being held without bail while awaiting sentencing.

Russell was represented in the appeal by William Maddox of Rockland. Maddox and Steven Peterson of Rockport represent Russell in the marijuana case.

At issue in the health care fraud case was the jury instructions U.S. District Judge John Woodcock gave jurors, according to Assistant U.S. Attorney Donald Clark. When the solicitor general’s office submitted its brief in the case, it conceded that the judge had given incorrect instruction about the level of proof required for a conviction.

The question presented to the Supreme Court was whether the statute “which prohibits ‘knowingly and willfully’ making a materially false statement in a matter involving a health care benefit program, requires proof that the defendant was aware that his conduct was unlawful”?

Woodcock told jurors, and the 1st Circuit upheld, an instruction that said to find Russell guilty the government had to prove only that he knew the statement was false when he made it.

Clark said that he expects his office will argue before the appellate court that the error was harmless and Russell’s conviction should stand. Any conviction could increase his prison sentence in the marijuana case under the federal sentencing guidelines. The prosecutor also said that he did not expect the decision to affect other cases.

If the 1st Circuit were to reverse Russell’s health care fraud conviction, federal prosecutors would have to decide if they would retry the case.

Russell was indicted by a federal grand jury in September 2010 on six counts of making a false statement in connection with a health care benefit program. A jury found Russell guilty in April 2011 of four counts relating to statements made in 2008 and 2009 and not guilty of two counts covering statements allegedly made in 2007 and 2009.

He applied for Dirigo Health, a state-subsidized health care program, after he lost his job in Bangor in 2006, according to court documents. He continued to receive benefits after he began working part time.

In January, Russell, Malcolm French, 52, of Enfield and Kendall Chase, 57, of Bradford were found guilty of conspiring to produce more than 1,000 marijuana plants between 2006 and 2009 valued at $9 million. French and Russell were found guilty of manufacturing more than 1,000 marijuana plants in 2009. Chase was found not guilty on the manufacturing charge.

Russell and French face a mandatory minimum sentence of 10 years in prison and a maximum of life. Each faces a fine of up to $10 million.

Chase faces up to life in prison but no mandatory minimum sentence. He faces the same fine as French and Russell.

Haynes Timberland Inc., which owns the land where the pot was found, was found guilty of maintaining a drug-involved place. The corporation has agreed to pay a fine of up to $450,000.

CORRECTION:

A previous version of this story incorrectly said that Justice Antonin Scalia denied a request that the full court hear oral arguments in the case.

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