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COURT REPORTER: APPEARANCES:

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION UNITED STATES OF AMERICA VS. MOHAMMAD KHAN () () () () () CRIMINAL ACTION NO. H-12-64 HOUSTON, TEXAS FEBRUARY 22, 2012 11:34 A.M.

TRANSCRIPT OF REARRAIGNMENT BEFORE THE HONORABLE SIM LAKE

FOR THE GOVERNMENT:

Ms. Laura Cordova Assistant United States Attorney 1400 New York Avenue, NW Washington, DC 20005 Mr. Wayman L. Prince Attorney at Law 9111 Katy Fwy. Suite 207 Houston, Texas 77024 Anita G. Manley Official Court Reporter 515 Rusk, Rm. 8016 Houston, Texas 77002

FOR THE DEFENDANT:

Proceedings recorded by stenographic means, transcript produced by computer.

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States.

P R O C E E D I N G S THE COURT: We're here this morning for rearraignment in Criminal Action H-12-64, United States versus Mohammad Khan. Will the defendant and counsel please come forward and identify themselves? MS. CORDOVA: Laura Cordova on behalf of the United

MR. PRINCE: Attorney Wayman Prince for the defendant, Mohammad Khan. THE COURT: Would you state your name, please, sir? THE DEFENDANT: Mohammad Khan. THE COURT: Mr. Khan, I understand that you wish to plead guilty to Count 1, which charges you with conspiracy to commit health care fraud, in violation of Title 18 United States Code, Section 1349; and to Count 2, which charges you with conspiracy to defraud the United States and to pay health care kickbacks, in violation of Title 18 United States Code, Section 371; and to Counts 3 through 7, which charge you with paying and offering to pay health care kickbacks, in violation of Title 42 United States Code, Section 1320a-7b(b)(2) and Title 18 United States Code, Section 2. Is that correct? MR. PRINCE: Your Honor, may I interrupt for just one moment? Because of one recent development, can I have a word with my client before he responds to your -THE COURT: We can continue the hearing if you want,

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but let me tell you something. When I address the defendant, it's very important that no one else interrupt me. Rule 11 makes it very clear that his responses must be in direct response to my questions. You can certainly confer with him, but I would assume that would have occurred before now. Is there some problem that we need to adjourn or reconvene this? MR. PRINCE: No, Your Honor. THE COURT: Well, go ahead and talk to him. How much time do you need? MR. PRINCE: Less than five minutes, Your Honor. THE COURT: All right. Well, let me know when you're ready. MR. PRINCE: Thank you very much, Your Honor. (Concluding at 11:37 a.m. Reconvening at 3:04 p.m.) THE COURT: We're here for a continuation of the rearraignment in Criminal Action H-12-64, United States of America versus Mohammad Khan. Will counsel and the defendant please come forward and identify themselves? MS. CORDOVA: Laura Cordova on behalf of the United States. MR. PRINCE: Wayman Prince on behalf of the defendant, Mohammad Khan. THE COURT: Would you state your name, please? THE DEFENDANT: Mohammad Khan.

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THE COURT: Counsel, have you had adequate time to talk to your lawyer (sic)? MR. PRINCE: Yes, I have. THE COURT: Talk to the defendant. MR. PRINCE: Yes, I have, Your Honor. THE COURT: Mr. Khan, I understand that you wish to plead guilty to Count 1, which charges you with conspiracy to commit health care fraud, in violation of Title 18 United States Code, Section 1349; and to Count 2, which charges you with conspiracy to defraud the United States and to pay health care kickbacks, in violation of Title 18 United States Code, Section 371; and also to Counts 3 through 7, which charge you with paying and offering to pay health care kickbacks, in violation of Title 42 United States Code, Section 1320a-7(b), and Title 18 United States Code, Section 2. Is that correct? THE DEFENDANT: Yes. THE COURT: Would you please raise your right hand and be sworn? THE CASE MANAGER: Do you solemnly swear the testimony you will give in the case now before the Court will be the truth, the whole truth, and nothing but the truth, so help you God? THE DEFENDANT: Yes. THE COURT: Mr. Khan, before I can accept your guilty plea, I must ask you a number of questions. It is very

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important that you listen carefully to all of my questions and that you answer all of my questions truthfully and completely for several reasons. First, since you are now under oath, if you gave an untrue answer to a question, you could be charged with the separate crime of perjury. Do you understand that? THE DEFENDANT: Yes. THE COURT: Also, before I can accept your guilty plea, I must make a number of findings. My findings are based on your answers to my questions. In order for my findings to be correct, it is, therefore, necessary that all of your answers be truthful and complete. Do you understand that? THE DEFENDANT: Yes. THE COURT: If you do not understand anything that I say this afternoon, will you ask me to repeat or explain whatever you do not understand? Would you agree to do that? THE DEFENDANT: Yes. THE COURT: Also, you may stop at any time and speak with your attorney. You do not need anyone's permission to speak with your attorney. Let me emphasize to you the importance of providing truthful and complete answers to my questions this afternoon. Sometimes after a defendant has been sentenced, he will file a motion or will write the Court a letter saying that the answers he gave at his rearraignment were not truthful or

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were not complete. You need to understand that I'm going to rely, both today and at all times in the future, on the answers that you give me today. If you should ever in the future say anything that is different from what you have told me today, I will disregard that future statement and rely only on what you have told me today. Do you understand that? THE DEFENDANT: Yes. THE COURT: How old are you? THE DEFENDANT: 61.2. THE COURT: Where were you born? THE DEFENDANT: I was born in Bareilly (phonetic), India. THE COURT: Are you a United States citizen? THE DEFENDANT: Yes. THE COURT: Did you attend school in India? THE DEFENDANT: I was born in India but then migrated to Pakistan. THE COURT: Did you attend school in Pakistan? THE DEFENDANT: Yes. Yes. THE COURT: Did you graduate from the equivalent of high school there? THE DEFENDANT: BS. THE COURT: Pardon me? THE DEFENDANT: BS, bachelor of science.

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States?

THE COURT: In Pakistan? THE DEFENDANT: Yes. THE COURT: When did you migrate to the United States? THE DEFENDANT: '7 -- 1973. THE COURT: Did you attend school in the United

THE DEFENDANT: Yes. THE COURT: Can you briefly describe your education in this country? THE DEFENDANT: I went to University of Houston Downtown and did some courses there, some at San Jac but never graduated from there. Then I went to, in '83, to Dominican Republic and did MD. I attend MD program there and did three years, '83 to '86. I attained MD degree, then came back to the United States. THE COURT: You obtained an MD degree? THE DEFENDANT: In Republic -- but I never had a license here, though. THE COURT: All right. Have you ever been -- what is the last job you held? THE DEFENDANT: The last job I have, at the Riverside General Hospital until February 6th, probably. I am assistant administrator of the hospital. THE COURT: How long did you have that job? THE DEFENDANT: This position I have since 2006, but

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I've been working with the hospital since 1992 as a director of the laboratory. THE COURT: Thank you. Have you ever been diagnosed or treated for any type of mental problem? THE DEFENDANT: No. THE COURT: Have you ever been diagnosed or treated for addiction to drugs or alcohol? THE DEFENDANT: No. THE COURT: Has anyone ever told you that you should be treated for any type of mental problem or for any type of addiction? THE DEFENDANT: No. THE COURT: Have you taken any type of drug or medicine within the last 24 hours? THE DEFENDANT: Hypertension medicine. THE COURT: Does that medication interfere with your ability to communicated with people? THE DEFENDANT: No, never. THE COURT: Does it interfere with your ability to understand what's happening? THE DEFENDANT: No. THE COURT: How many times have you spoken with your attorney about this case? THE DEFENDANT: Six or seven times. Two visits.

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THE COURT: Has your attorney discussed with you the charges against you and what the Government would have to prove to establish your guilt to those charges? THE DEFENDANT: Yes. THE COURT: Has your attorney discussed with you the evidence that the Government has against you? THE DEFENDANT: Yes. THE COURT: Has your attorney discussed with you how the Federal Advisory Sentencing Guidelines might apply in this case? THE DEFENDANT: Yes. THE COURT: Has your attorney answered all of your questions? THE DEFENDANT: Yes. THE COURT: Has he done everything that you have asked him to do? THE DEFENDANT: Yes. THE COURT: Are you fully satisfied with the advice and counsel that your attorney has provided you? THE DEFENDANT: Yes. THE COURT: You do not have to plead guilty. You have the right to go to trial. If you went to trial, you would have to right to the assistance of an attorney. And if you could not afford an attorney, in certain situations the Court could appoint an attorney for you.

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You would have the right to see and hear the Government's witnesses and have your attorney question them. You would have the right to compel other people to come into court and provide evidence. You would not be required to testify. And you could not be convicted unless the jury unanimously found beyond a reasonable doubt that you were guilty. If you plead guilty today, however, there will not be a trial and you will give up the right to a trial and all the protections that are associated with a trial. Do you understand that? THE DEFENDANT: Yes. THE COURT: The offense that you are pleading guilty to is a felony. That means you will lose the right to vote, to hold public office, to serve on a jury, and to possess a firearm. As to Count 1, the maximum sentence that you face if you plead guilty is ten years in prison and a fine of $250,000 and three years of supervised release and a $100 special assessment and restitution. As to Count 2, the maximum sentence you face is five years in prison and a fine of $250,000 and three years of supervised release and a $100 special assessment and restitution. As to Counts 3 through 7, the maximum sentence

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that you face is five years in prison and a fine of $25,000 and three years of supervised release and a $100 special assessment for each count and restitution. Do you understand that those are the potential consequences of a guilty plea? THE DEFENDANT: Yes. THE COURT: There is no parole in federal court. That means any sentence of imprisonment will actually have to be served in prison. Your term of supervised release will be subject to a number of conditions which will be monitored by a probation officer. If I found that you violated the conditions of supervised release, I could revoke your supervision and send you back to prison without any credit for the time you had already served on supervised release. Do you understand that? THE DEFENDANT: Yes. THE COURT: No determination has been made about what your sentence will be. If I accept your guilty plea, a probation officer will interview you, investigate the facts of the case, and prepare a presentence investigation report. You will have a chance to read the report and to discuss it with your attorney before your sentencing. You may file objections to the presentence report if you wish. At the time of your sentencing, I will rule on any objections that you or the Government may have to the presentence report. I will then determine your advisory guideline range and your sentence.

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What you need to understand today about this process of determining your sentence is that this process has not yet begun. That means no knows what advisory guideline range the probation officer will recommend or what advisory guideline range I will find applicable or what sentence I will impose. Do you understand that? THE DEFENDANT: Yes. THE COURT: If the sentence that I should impose is greater than what you now expect or greater than the sentence that your lawyer or anyone else may have predicted, you will be bound by your guilty plea today regardless of your sentence. You will not be allowed to change your mind and withdraw your guilty plea because you are not satisfied with your sentence. Do you understand that? THE DEFENDANT: Yes. THE COURT: The Government has provided me with a copy of a written plea agreement. Have you read the agreement? THE DEFENDANT: Yes. THE COURT: Have you discussed it with your attorney? THE DEFENDANT: Yes. THE COURT: How many times have you discussed it with your attorney? THE DEFENDANT: Twice. THE COURT: All right. Do you have a copy there before you?

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THE DEFENDANT: Yes. THE COURT: Have there been any changes to this agreement since it was provided to me yesterday? MS. CORDOVA: No, Your Honor. THE COURT: I thought there was a change with respect to 11(c)(1)(A) and (B) in the introductory paragraph. MS. CORDOVA: There was just a change in the sentence data sheet but not to the plea agreement. THE COURT: The sentence data sheet is not binding on anyone. Is this a (c)(1)(A) and (B) plea? MS. CORDOVA: No, Your Honor. It's just an 11(c)(1)(B) plea. THE COURT: Well, then, I guess we need to change the reference to (A) in the plea agreement, in the first page. MS. CORDOVA: You are correct, Your Honor. MR. PRINCE: Says (A) and (B). THE COURT: If that is the agreement of the parties, then make that change and initial it. Mr. Khan, I want to go over the essential elements of the agreement with you now just to be sure that you understand all of it, the elements of the plea agreement. In Paragraph 1, you agree to plead guilty to Counts 1 through 7, which I described earlier. In Paragraph 2, the parties have a number of agreements. It's my understanding that these are merely

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recommendations and not binding on the Court. Is that correct? MS. CORDOVA: That is correct, Your Honor. THE COURT: Is that the defense counsel's understanding? MR. PRINCE: That's correct, Your Honor. THE COURT: The parties recommend in Paragraph 2 that the defendant receive a 26-level enhancement for relevant conduct based on the loss of $116 million. In Paragraph 3, the parties agree that there's a four-level enhancement because of a loss to a Government health program of more than $20 million. In Paragraph 4, the parties agree to a two-level enhancement because sophisticated means were used. In Paragraph 5, the parties agree to a four-level enhancement because of the defendant's role in an offense in which he was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. In Paragraph 6, the defendant agrees that he will be jointly and severally liable with other defendants to pay restitution in the amount of $31,324,243. Mr. Khan, that's the agreement of the parties, but it's not binding on the Court. I will make my own independent evaluation of all of these sentencing factors. And if I should differ with this agreement, you will still be bound by this plea agreement. Do you understand that?

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THE DEFENDANT: Yes. THE COURT: In Paragraph 15, the parties state that the agreement carries with it the potential of a motion for downward departure under Section 5K1.1 of the Sentencing Guidelines. However, the defendant understands and agrees that whether such a motion is filed will be determined solely by the United States Government based on its judgment about whether the Government (sic) has provided substantial assistance. Mr. Khan, what you need to understand about this provision of the plea agreement is, if the Government should decide not to file a motion for downward departure, there is nothing that you can do about it. Do you understand that? THE DEFENDANT: Yes. THE COURT: Pardon? THE DEFENDANT: Yes. THE COURT: Paragraph 16 provides that by fully cooperating, you will testify truthfully as a witness before any grand jury or trial jury, you will voluntarily attend interviews and conferences, you will provide truthful, complete, and accurate information, you will provide the Government all documents in your possession or subject to your control, you will make a full and complete disclosure of all of your assets. In Paragraph 17, you acknowledge that normally, even though you're pleading guilty, you would have the right to

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appeal the sentence imposed or the manner in which it was determined and you would normally have a right to collaterally attack your conviction or sentence. In this agreement, however, you waive or give up both of those rights. Have you talked to your lawyer about whether you should give up those rights? THE DEFENDANT: Yes. THE COURT: As part of this plea agreement, do you wish to waive your right to appeal the sentence imposed and the manner in which it was determined? THE DEFENDANT: Yes. THE COURT: As a part of this plea agreement, do you wish to waive your right to collaterally attack your conviction or sentence by means of any post-conviction proceeding? THE DEFENDANT: Yes. THE COURT: In Paragraph 20, the Government agrees that you're entitled to a two-level downward adjustment for acceptance of responsibility and that the Government will move for an additional one-level downward adjustment based on the timeliness of your plea and that the Government agrees that the loss is between 100 and $200 million. Finally, the Government agrees that it will recommend a sentence at the low end of the guideline range. I will certainly listen to the Government's recommendation, but I'm not bound by the Government's recommendation that you

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should be sentenced at the low end of the guideline range. Do you understand that? THE DEFENDANT: Yes. THE COURT: I will make my own independent determination of what your sentence will be. And if my sentence should differ with the Government's recommendation, you will nevertheless be bound by this plea agreement. Do you understand that? THE DEFENDANT: Yes. THE COURT: Now, other than the factual basis for your guilty plea, which I will discuss in a minute, have I correctly described your plea agreement with the Government as you understand it? THE DEFENDANT: Yes. THE COURT: Other than what is stated in this plea agreement, has the United States Government made any promises to you in connection with your guilty plea? THE DEFENDANT: No. THE COURT: Has anyone threatened you or forced you to plead guilty? THE DEFENDANT: No. THE COURT: Has anyone promised you what sentence you will receive if you plead guilty? THE DEFENDANT: No. THE COURT: In order for the Government to prove your

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guilt at trial as to Count 1, the Government would have to show that you and at least one other person made an agreement to commit the crime of health care fraud as charged in the indictment and that you knew the unlawful purpose of that agreement and joined in the agreement willfully, that is, with the intent to further the lawful purpose. As to Count 2, the Government would have to show that you and at least one other person made an agreement to commit the crime of soliciting, receiving, offering, or paying money in order to induce the referral of a Medicare patient and that you knew of the unlawful purpose of that agreement and joined in it willfully, that is, with the intent to further the unlawful purpose and that during the existence of the conspiracy, one or more of the conspirators knowingly committed at least one of the overt acts described in the indictment in order to accomplish some object or purpose of the conspiracy. As to Counts 3 through 7, the Government would have to show that you knowingly and willfully offered or paid money for referring a patient, that the money was offered or paid primarily to induce the referral of a patient insured by Medicare, and that the services or items for which the patient was referred were or would have been covered in whole or part by Medicare. Your plea agreement contains a lengthy factual basis for the guilty plea at Pages 9, 10, and 11 of the plea

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agreement. First of all, I have a question. At the bottom of Page 9, the agreement says: "Khan was assistant administrator of Riverside General Hospital overseeing Riverside's PHP operations." What does "PHP" mean? MS. CORDOVA: Partial hospitalization program. THE COURT: Can you speak up? MS. CORDOVA: Partial hospitalization program. THE COURT: Mr. Khan, is that what you understand PHP to mean? THE DEFENDANT: Partial hospital program. THE COURT: All right. Mr. Khan, have you carefully read the factual basis for the guilty plea contained in Paragraph 24 of the plea agreement at Pages 9, 10, and 11? THE DEFENDANT: Yes. THE COURT: Are all the facts stated there true? THE DEFENDANT: Yes. THE COURT: Did you do everything described on those pages of the plea agreement? THE DEFENDANT: Yes. THE COURT: At the top of Page 11, the factual basis states, quote: "Between January 2008 and August 2011, Riverside billed Medicare between $100 million and $200 million for PHP services that were not medically necessary and in some cases were never provided."

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manager.

Mr. Khan, when those services were billed by Riverside, were you aware that the services were not medically necessary and in some cases not provided? THE DEFENDANT: Yes. THE COURT: Pardon me? THE DEFENDANT: Yes. THE COURT: Mr. Khan, how do you plead to Counts 1, 2, 3, 4, 5, 6, and 7 of the indictment, guilty or not guilty? THE DEFENDANT: Guilty. THE COURT: Counsel, do you think any other advice of rights is required before I can accept your client's guilty plea? MR. PRINCE: None, Your Honor. THE COURT: It is the finding of the Court that the defendant is fully competent and capable of entering an informed plea and that the defendant's plea of guilty is a knowing and voluntary plea supported by an independent basis-in-fact establishing each of the essential elements of the offense. I, therefore, accept your plea and now adjudge you guilty of Counts 1 through 7. You may now sign the plea agreement if you've not already done so. MR. PRINCE: We've done so, Your Honor. THE COURT: Would you please tender it to my case

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Honor. else?

I have set your sentencing for May 25th at 3:00 p.m. I realize the defendant's cooperation might necessitate a continuance of that date. We'll operate under that schedule for the time being. MR. PRINCE: Thank you very much, Your Honor. THE COURT: Does either counsel wish to say anything

MS. CORDOVA: Nothing further, Your Honor. MR. PRINCE: I have nothing further at this time, Your

THE COURT: The defendant is remanded to the custody of the marshal. Counsel are excused. Court is adjourned. (Concluding at 3:30 p.m.)

I CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER, TO THE BEST OF MY ABILITY. ANITA G. MANLEY OFFICIAL COURT REPORTER 5/29/12