                                                                                           06/28/2017
        IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
                          AT JACKSON
                                 January 4, 2017 Session

             STATE OF TENNESSEE v. ARTHUR GRAHAM and
                        MICHELLE GRAHAM

                    Appeal from the Criminal Court for Shelby County
                        No. 10-05643    Glenn Wright, Judge


                             No. W2015-02410-CCA-R3-CD



The Defendants, Arthur and Michelle Graham, were indicted on August 31, 2010, for
theft of property valued at $60,000 or more from the State of Tennessee based on their
fraudulent medical billing practices at the children’s therapy facility they owned and
operated, which resulted in overpayments in excess of $200,000. According to the
indictment, the thefts occurred between March 6, 2002, and October 31, 2003. The delay
in indicting the matter resulted from the fact that the United States Attorney’s Office had
first investigated the thefts and did not release the matter to the Shelby County District
Attorney General’s Office until the applicable federal statute of limitations had run. The
Defendants each filed a motion to dismiss the indictment, claiming their rights to a
speedy trial had been violated by the pre-indictment delay. The trial court denied the
motions. Subsequently, the Defendants filed a joint motion to reopen proof on their
earlier motions to dismiss. The court entered an order granting in part and denying in
part the motion. While the court held that the Defendants had failed to present proof of
actual prejudice between the last alleged criminal act and the return of the indictment, it
found that the eight-year statute of limitations had run as to the thefts alleged to have
occurred prior to August 31, 2002. As a result, the State could proceed only as to those
thefts occurring between August 31, 2002, and October 31, 2003. The Defendants then
filed a joint motion, asking that the court reconsider its earlier order, again asserting the
pre-indictment delay violated their rights to a speedy trial. After hearing the testimony of
witnesses, the trial court reversed its previous order, this time finding that the Defendants
had been prejudiced by the pre-indictment delay, and dismissed the indictment. The
State appeals this order. As we will explain, we reverse this order of the trial court and
reinstate the indictment.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court Reversed;
                              Indictment Reinstated
ALAN E. GLENN, J., delivered the opinion of the court, in which JOHN EVERETT
WILLIAMS and CAMILLE R. MCMULLEN, JJ., joined.

Herbert H. Slatery III, Attorney General and Reporter; Jonathan H. Wardle, Assistant
Attorney General; Amy P. Weirich, District Attorney General; and Byron Winsett, III,
Assistant District Attorney General, for the appellant, State of Tennessee.

Lance R. Chism (on appeal) and Paul Springer (at hearing), Memphis, Tennessee, for the
appellee, Arthur Graham. Jennifer J. Mitchell, Memphis, Tennessee, for the appellee,
Michelle Graham.


                                       OPINION

       In our review, we first will detail the motions made on behalf of the Defendants
regarding the delay in the indictment.

       On June 15, 2012, the Defendants filed a joint motion to dismiss the indictment,
claiming that the statute of limitations had run as to the offenses. On April 14, 2014,
counsel for Defendant Arthur Graham filed an amended motion to dismiss the
indictment, arguing that Mr. Graham had been denied his right to a speedy trial because
of the passage of time between the offenses alleged in the indictment and the date of the
indictment. Shortly thereafter, counsel for Defendant Michelle Graham filed a like
motion. Both motions asserted that this passage of time affected the Defendants’ abilities
to defend themselves. The trial court took both motions under advisement. On July 24,
2014, the trial court heard arguments from the parties and advised that a ruling would be
issued on August 21, 2014.

        On August 11, 2014, the Defendants filed a joint motion asking that the court
allow them to reopen proof on the previous motions to dismiss. On August 15, 2014, the
court heard testimony, as we will set out, from retired Tennessee Bureau of Investigation
(TBI) Special Agent Roger Turner regarding the investigation of the matter and history of
the delays. The State filed a response on October 7, 2014, opposing the motion. The
court entered an order granting in part and denying in part the motion on November 12,
2014. In that order, the court denied the Defendants’ claims regarding the violation of
their Sixth Amendment and due process rights but granted the motion as to the statute of
limitations, meaning that the State could not proceed on offenses alleged to have occurred
prior to August 31, 2002.

       On March 26, 2015, the Defendants filed a joint motion, asking that the trial court
reconsider its previous order. At a hearing on June 25, 2015, the trial court heard
                                           -2-
additional testimony from Defendant Arthur Graham and then, on July 30, 2015, from
Alonzo Chad Pendleton, Tarlene Whooper, and Myla Johnson. On November 10, 2015,
the trial court filed its order granting the Defendants’ motion to dismiss the indictment.

       At the evidentiary hearing, which preceded the trial court’s dismissal of the
indictment, several witnesses testified. Roger Turner said that he was a retired special
agent of the TBI and had been assigned to the Medicaid task force.1 While in that
position, he participated in a 2003 investigation of the Defendants’ business, Cuddles
Care Services, LLC. The criminal investigation resulted from a complaint filed by Blue
Cross Blue Shield that Cuddles Care was improperly billing physician codes and had
been paid more money than it was entitled to. The investigation began on August 13,
2003. According to his investigative summary, Mr. Turner received a letter on October
27, 2003, from Myla Johnson with Omnicare, stating that Omnicare had reached a
contractual agreement with Cuddles Care to recover $15,665.07 identified as
overpayments due to fraudulent billing. Mr. Turner continued with his background
investigation of the complaint, interviewed potential witnesses, investigated the business
and, on September 21, 2004, served a subpoena for the United States Attorney’s Office
on Kathy Yancey, the bookkeeper in charge of billing for Cuddles Care. On December 8,
2004, Mr. Turner met with Ms. Yancey and George Graham, the registered agent for the
business and uncle of Defendant Arthur Graham.

       On May 2, 2005, Mr. Turner received a Chapter 11 bankruptcy petition filed by
George Graham on behalf of Cuddles Care. The investigation continued, as Mr. Turner
interviewed physicians who were shown to have treated the patients in question, caused
subpoenas to be issued for financial records, and attended meetings at the United States
Attorney’s Office. On January 25, 2006, Mr. Turner was present at a meeting at the
United States Attorney’s Office when George Graham, who had been acting as
Defendant Arthur Graham’s attorney, was advised that he should end that representation
and retain an attorney because he might have liability himself. On August 11, 2006,
Defendant Arthur Graham and his new attorney, Sam Perkins, met with an Assistant
United States Attorney to discuss the matter. On May 8, 2007, the Defendants appeared
before a federal grand jury, as did Kathy Yancey. On November 13, 2007, Tonya Ruff, a
former billing clerk for Cuddles Care, appeared before the federal grand jury. Mr. Turner
interviewed Ms. Ruff on November 30, 2007. He met with a different Assistant United
States Attorney on September 11, 2008, because the attorney who previously had been
handling the matter was transferred to another position and the one to whom it was newly
assigned was becoming familiar with the investigation, which slowed it down. Within a
few weeks, the new attorney determined that the relevant federal statute of limitations
       1
          During Mr. Turner’s testimony, he referred to his narrative of the investigation, which was
dated November 14, 2007, and provides a more detailed description than Mr. Turner testified to. His
report was admitted as an exhibit and is included in the record on appeal.
                                                -3-
had run. So, on October 29, 2008, the case was presented to the State Attorney General’s
Office for a possible civil proceeding to try to recover some of the State’s funds and then
to the Shelby County District Attorney General’s Office in September 2009 after new
violations had been discovered. Mr. Turner did not know why the State waited until
August 2010 to present the case to the Shelby County Grand Jury.

       Defendant Arthur Graham testified that he had been part owner of Cuddles Care
Services, which he and his wife started in 2001 or 2002. The business was created to
provide therapy services for children with disabilities, with payments coming from state-
funded medical insurance, primarily Omnicare, Better Health Plans, Tenn-Care Select,
and Blue Cross Blue Shield. He explained that each of those companies required that his
therapists be credentialed, meaning that he had to submit paperwork showing the
therapists he would be working with, as well as his business license and certification
through Jayco, which, apparently, provided the inspection process necessary for Cuddles
Care to be accepted by the State of Tennessee to receive payments from its managed
healthcare plan. Cuddles Care employed certain employees with licenses, which
included occupational, physical, and speech therapists but no physicians.

       Immediately upon beginning Cuddles Care’s services, Mr. Graham was advised by
Better Health Plans, Omnicare, and Tenn-Care Select that the bills submitted by Cuddles
Care did not have the correct provider information and could not be approved. So, he
hired a medical coder, Tonya Ruff, to help with billing procedures. After she began
working, Mr. Graham received a notice from Omnicare, in 2004 or 2005, that they should
stop using a certain billing code that was reserved for physicians. Mr. Graham met with
representatives from Omnicare and was told that they were not authorized to use codes
that were reserved for physicians and that they could use only certain codes. Ms. Ruff
told Mr. Graham that a therapist could be considered a healthcare provider, and he
overheard her discussing this with Omnicare and Better Health Plans. They were
provided a new contract, which listed the only codes they could use and set up a
repayment plan to pay back some of the sums they had not been entitled to receive.

       Shortly after Cuddles Care had started making the repayments, it encountered
problems paying state and federal taxes; so, the company filed a Chapter 11 bankruptcy
petition. Soon after that, Mr. Graham was notified by the TBI that a criminal
investigation was being opened and that its agents would be seeking files and records
from the business. After later receiving the subpoena, Mr. Graham took the records to
the TBI himself. Shortly after that, Cuddles Care closed, and Mr. Graham heard nothing
from the TBI for “about another three years.” Then, he learned that the State Attorney
General’s Office wanted some records in addition to those he had provided to the United
States Attorney’s Office. Another two years passed without him hearing anything from
the State, and in 2010 he was taken into custody on the indictment. He earlier had
                                            -4-
spoken with Chad Pendleton and Tarlene Whooper at Omnicare, but he later was unable
to contact either of them.

        On cross-examination, Mr. Graham said that he had owned two businesses,
Cuddles Child Care Service and Cuddles Care, both of which he started with his wife.
His wife was a therapist, but he was not. Kathy Yancey, his cousin, worked as a medical
billing clerk. Their daycare director was Kim White. Mr. Graham said that he attended a
class, taught by Tonya Ruff, to learn “basic knowledge” of medical billing. He started
the class after Omnicare had denied several of their billings because they were not filling
out the forms properly.

       Alonzo Chad Pendleton testified that he currently was employed by Humana but
previously had worked for Omnicare. He said that he had no recollection of having met
with the Defendants regarding incorrect billing or coding practices. He said that he no
longer had access to Omnicare records and that it no longer was in business. He did not
teach healthcare providers how to bill their services, only how to submit bills to
Omnicare. He said that there was no reason for a healthcare provider, which had no
physicians associated with it, to bill for physician services. Only physicians could bill for
their services. If a healthcare provider had no physicians associated with it, he never
would have instructed the provider to bill Omnicare. He said that he was not a coding
expert and would never have told a provider to use a certain billing code. If a provider
claimed to employ physicians, he would check to if there were any exclusions or
sanctions that would prevent them from practicing or any pending malpractice suits. If
he determined that providers had been overpaid for services, he would set up a repayment
schedule. He did not remember whether he had worked with the Defendants on such a
plan.

        Tarlene Whooper testified that she was employed by Omnicare from 1997 until
2008, as best she could remember. She was a senior provider relations advocate, serving
as a liaison between the company and the providers. Ms. Whooper said that she had no
memory of meeting with the Defendants. If a provider contacted her and asked if their
company should use one billing code or another, she could not answer the question
because she was not a coder. She did not deal with specific claims, for they went to other
Omnicare personnel. She did not recall ever working with any therapy groups, but
mostly primary care and specialty physicians groups. She was not involved with claims
for payment and would not have attended a meeting regarding such claims, unless asked
to do so. Ms. Whooper did not recall attending a meeting regarding a therapy group and
did not believe it was possible that she had done so. She never provided advice to any
type of group as to which billing codes to use, for she was not a certified coder. As to
Defendant Arthur Graham, Ms. Whooper said that she did not “even know who Mr.
Graham” was.
                                             -5-
        Myla Johnson testified that she had been employed by Omnicare as vice-president
for health services from October 2002 until July 2008, leaving the business shortly before
it closed. Ms. Johnson described her duties with Omnicare: “My main focus was review
of the hospital care being provided to our members. Setting up discharge services for our
members. Doing prior authorization for outpatient services. Early and periodic screening
for children. And then I was the fraud and abuse representative.” Her duties also
included preventive screening for children with physical disabilities, who were to receive
physical therapy. It was “possible” that she came in contact with providers for these
children. If she did so, she would take notes regarding the meeting, but she did not have
access to such records.

       During cross-examination, Ms. Johnson said that she had been the fraud and abuse
representative for the plan and worked with the TBI to report any potential fraud. She
did not recall any groups that provided both therapy and physician services. If Omnicare
suspected that a provider was engaging in fraud, she would report the matter to the TBI.
As for billing questions from providers, she would refer the provider to someone who
was an expert in billing and coding. She did not recall ever being in a situation in which
Omnicare provided advice as to billing procedures. Omnicare had a contract with a
claims processing company to process claims, but she did not know if that company
provided billing advice to providers. She did not refer providers with billing questions to
that company for assistance. Her instructions were that, if she suspected fraud in a
provider’s billing practices, she should contact the TBI but not the provider.

                                         ANALYSIS

       On appeal, the State argues that the Defendants did not establish that their rights to
a speedy trial or to due process were violated and that the trial court erred in finding that
they had been. Additionally, the State argues that the trial court erred in concluding the
State could not prosecute offenses occurring prior to August 31, 2002.

       In its supplemental order granting the Defendants’ motion to dismiss based upon
violation of their rights to a speedy trial, the trial court explained that, in first denying the
motion, the court had determined that the Defendants established three factors in their
favor: unreasonable lengthy delay, absence of a valid reason for the delay, and assertion
of speedy trial rights. However, the trial court did not find that the Defendants had been
prejudiced by the delay. Following the trial court’s later hearings, the testimony which
we have set out in this opinion, the court noted that the witnesses testified that they could
not remember conversations or written correspondence from over ten years ago and that
evidence of these communications would have established a defense to the criminal
charges. Relying upon the opinion of this court in State v. Hudgins, 188 S.W.3d 663, 668
                                               -6-
(Tenn. Crim. App. 2005), the trial court explained that because of the nearly eight-year
delay and the testimony of witnesses “that they could not remember the facts and
circumstances surrounding the events in question,” the Defendants’ speedy trial rights
had been violated.

      The State appealed this order; and, for reasons which we will explain, we reverse
the order of the trial court and direct that the indictment be reinstated as to both
Defendants.

       In our analysis, we first note that the Defendants’ specific speedy trial claim is not
that the State delayed trying the indictment against the Defendants but, rather, that the
State delayed indicting them.

       As to when the right to a speedy trial attaches, Tennessee follows the majority
rule, which is that the right does not arise until a defendant is either indicted or arrested:

       [T]his Court has determined that a warrant alone does not trigger speedy
       trial analysis; to the contrary, a formal grand jury action or the actual
       restraints of an arrest are required. Wood, 924 S.W.2d at 345; Baker, 614
       S.W.2d at 353. We have followed [United States v.] Marion’s [404 U.S.
       307, 320 (1971)] lead, reasoning that it is at this stage of arrest and grand
       jury action that the significant interests served by the right to a speedy trial
       are most directly implicated: the protection against oppressive pre-trial
       incarceration and the reduction of anxiety and concern caused by
       unresolved charges. See Marion, 404 U.S. at 321-22, 92 S. Ct. at 463-64.

State v. Utley, 956 S.W.2d 489, 493 (Tenn. 1997).

      Thus, the Defendants’ speedy trial rights did not begin to run until 2010, when
they were indicted and arrested following the return of their state grand jury indictment.
Accordingly, the Defendants’ speedy trial rights were not violated by the length of time
between the initiation of the investigation and the return of the indictment.

       As our supreme court further explained in Utley, “as we and other courts have
recognized, a defendant has other protections during delays prior to arrest, in particular,
the applicable statute of limitations and the right to due process.” Id. Additionally, our
supreme court explained the proof required to establish a pre-indictment due process
claim, saying that, as well as prejudice to a defendant, “the due process inquiry under
Marion also requires proof regarding the State’s use of the delay to gain tactical
advantage.” Utley, 956 S.W.2d at 495. At the evidentiary hearing conducted in this
matter by the trial court, the Defendants made no effort to show that the delay in
                                             -7-
returning the indictment was engineered so the State could gain a tactical advantage.
Rather, the proof showed that the matter was being reviewed by the United States
Attorney’s Office until the applicable federal statute of limitations had expired. It was
only at that that time that the Shelby County District Attorney General’s Office was
presented with the case as well as the records. Thus, since the Defendants failed to show
that the State engineered the delay, they failed to establish that their due process rights
were violated pre-indictment. Accordingly, we reverse the order of the trial court and
direct that the indictment be reinstated as to both Defendants.

                        Joinder of Offenses/Statute of Limitations

      In its initial order, the trial court held that the applicable statute of limitations had
run as to any offense occurring prior to August 31, 2002. The State appealed this
determination as well, even though the court later dismissed the indictment in its entirety.

        Pursuant to the holding of our supreme court in State v. Byrd, 968 S.W.2d 290,
291 (Tenn. 1998), the State is permitted to aggregate the thefts into a single indictment
where “separate larcenous acts are: (1) from the same owner[s]; (2) from the same
location; and (3) pursuant to a continuing criminal impulse or a single sustained
larcenous scheme.” In this matter, since the thefts all were from the same victim, the
State of Tennessee, occurred from the same location, and were done pursuant to a
continuing criminal impulse or a single sustained larcenous scheme, aggregation was
proper. This being the case, there was not a separate statute of limitations as to each act,
but, rather, the statute as to all offenses ran from the last act in the series. State v. Robert
Dewayne Criswell, No. 01C01-9804-CR-00163, 1999 WL 228795, at *2 (Tenn. Crim.
App. Apr. 21, 1999). Accordingly, the State may prosecute all of the offenses alleged in
the indictment.

                                      CONCLUSION

        Based upon the foregoing authorities and reasoning, we reverse the order of the
trial court, reinstate the indictment, and remand for further proceedings consistent with
this opinion.

                                                    _________________________________
                                                    ALAN E. GLENN, JUDGE




                                              -8-
