Good-Faith Reliance Requires Full Disclosure; Willful Blindness Can Prove Knowledge (Not Agreement) in Healthcare-Fraud Conspiracies

Commentary on United States v. Sherry-Ann Jenkins, Nos. 23-3820/3821 (6th Cir. Oct. 17, 2025)

Introduction

The Sixth Circuit affirmed the convictions of Oliver and Sherry‑Ann Jenkins for mail fraud, wire fraud, healthcare fraud, and conspiracy arising from a “Cognitive Center” operated within the Toledo Clinic. Sherry‑Ann, a Ph.D. neuroscientist with no clinical license, conducted cognitive testing, ordered PET scans, and diagnosed patients—often with Alzheimer’s—while billing under Oliver’s National Provider Identifier (NPI). Patients and clinic physicians raised alarms about misdiagnoses, billing practices, and the scope of services performed by an unlicensed individual. The clinic eventually closed the Center and terminated Sherry‑Ann.

On appeal, the defendants challenged the sufficiency of the evidence (including their asserted “good‑faith reliance” on internal clinic advice), the district court’s jury instructions (particularly on deliberate ignorance and unindicted co‑conspirators), and the exclusion of a 544‑page compliance research file under Rule 403. The panel affirmed across the board, providing a detailed roadmap on:

What suffices to show an agreement to join a fraud conspiracy under 18 U.S.C. § 1349;
Why “good‑faith reliance” fails without full disclosure of material facts to advisors;
How courts should cabin “willful blindness” instructions in conspiracy cases (knowledge vs. agreement) and deploy them in specific‑intent fraud offenses;
When standard “unindicted co‑conspirator” instructions are appropriate; and
How Rule 403 supports limiting voluminous, cumulative compliance documentation without violating the right to present a defense.

Summary of the Opinion

The Sixth Circuit (Judge Helene N. White) held that the government presented sufficient circumstantial evidence for a rational juror to find that Oliver and Sherry‑Ann knowingly joined a conspiracy to commit mail, wire, and healthcare fraud, and that they possessed the specific intent to defraud. The court emphasized evidence that:

Sherry‑Ann routinely operated as if licensed—diagnosing, ordering PET scans, and directing treatment—while billing through Oliver’s NPI;
Patients were led to believe she was a physician, were scheduled for repeated visits and phone consultations (with inflated durations), and would not have paid had they known she was unlicensed;
Oliver misrepresented the Center’s status to an insurer (inventing a “neuro‑otology” division) and challenged the insurer’s authority rather than reassessing legality;
The clinic’s compliance staff never advised that an unlicensed person could diagnose patients or order PET scans “incident to” a physician’s services; and
Complaints from patients and physicians triggered peer‑review warnings that were not meaningfully heeded until the Center was shut down.

The panel rejected the defendants’ good‑faith reliance defense because the record indicated incomplete disclosure to internal advisors and reliance extending beyond the advice actually given. It upheld deliberate‑ignorance instructions as properly confined: in conspiracy, to knowledge of the conspiracy’s aims (not the element of agreement); and in the substantive fraud counts, to knowledge of falsity (not specific intent to defraud), leaving the jury to find specific intent separately. The court also approved a standard “unindicted co‑conspirator” instruction given the defense’s effort to shift blame to clinic personnel, and it affirmed the Rule 403 exclusion of the 544‑page compliance research file as cumulative, while allowing selected excerpts and demonstrative use of the file’s bulk. The convictions and sentences were affirmed.

Analysis

Precedents Cited

Conspiracy under 18 U.S.C. § 1349: The court reiterated that § 1349 requires proof that a defendant knowingly and voluntarily agreed to commit fraud; an overt act is not required (United States v. Betro; United States v. Palma; United States v. Rogers). A tacit agreement can be inferred from circumstantial evidence (United States v. Pearce; United States v. Conatser).
Sufficiency standard: Convictions stand if any rational trier of fact could find the elements beyond a reasonable doubt (United States v. Potter; United States v. Paige), with evidentiary conflicts resolved in the government’s favor (United States v. Hinojosa), and a caution against stacking inferences (United States v. Ouedraogo; United States v. Sliwo). Circumstantial evidence alone can sustain a verdict (United States v. Hughes).
Knowledge-of-illegality references: Defendants invoked Liparota v. United States and Rehaif v. United States to argue the government had to prove they knew the conduct was unlawful. The court agreed knowledge matters but found ample circumstantial evidence (misrepresentations, concealment, profit motive) from which the jury could infer knowledge of unlawful aims and voluntary participation.
Substantive fraud elements: Health-care fraud requires knowing and willful execution of a scheme to defraud a health-care benefit program (18 U.S.C. § 1347; United States v. Singh). Mail and wire fraud require a scheme to defraud, use of mail/wire, and a specific intent to deprive victims of money or property (United States v. Merklinger; United States v. Frost; United States v. Daniel).
Intent can be inferred from concealment, misrepresentations, knowledge, and profits (United States v. Davis).
Good-faith reliance defense: Requires full disclosure of all pertinent facts and actual good-faith reliance on the advice (United States v. Rozin; United States v. Duncan).
Deliberate-ignorance (willful blindness) instruction: In conspiracy cases, it may prove knowledge of the conspiracy’s unlawful aims but not the voluntary agreement element (United States v. Warshawsky; see also United States v. Matthews; United States v. Lee; United States v. Smigiel). The panel contrasted the error in United States v. Evans Landscaping Inc. (allowing willful blindness to substitute for agreement) with the proper instruction here. For substantive frauds, circuits uniformly approve willful blindness instructions for the knowledge component when carefully framed (United States v. Griffin; United States v. Alston‑Graves; Sixth Circuit examples include United States v. Bohn and United States v. Williams).
Unindicted co-conspirators: Pattern instruction approved where defendants suggest others are to blame; reversal requires instructions to be confusing, misleading, or prejudicial (United States v. Ashrafkhan; United States v. Eaton; United States v. Morrison; United States v. Lawrence).
Standards of review for jury-instruction objections and waiver: Abuse of discretion or plain error depending on preservation (United States v. Mitchell; United States v. Budd; United States v. Sloman; United States v. Gandy; United States v. Wood; United States v. Chavez; United States v. Frady).
Rule 403 and right to present a defense: Broad discretion to exclude cumulative or confusing evidence (United States v. Dixon; United States v. Wagner; Romstadt v. Allstate; Fed. R. Evid. 403). The right to present a defense does not include introducing inadmissible or cumulative evidence (Crane v. Kentucky; United States v. Blackwell; Holmes v. South Carolina; Montana v. Egelhoff).

Legal Reasoning

The court’s reasoning tracks the elements and standards with precision, and is organized around three pillars: sufficiency, instructions, and evidentiary rulings.

1) Sufficiency: Agreement to Conspire and Specific Intent to Defraud

The defendants asserted they “hid nothing” from the clinic, sought to bill properly, and engaged the compliance and legal departments throughout. The panel accepted that some evidence supported that narrative but held that a rational jury could find the opposite when viewing the full trial record in the government’s favor:

Misrepresentations and concealment: Oliver’s misstatements to an insurer about a non-existent “neuro‑otology” division, his challenge to the insurer’s authority rather than corrective action, and patients’ testimony that they believed Sherry‑Ann was a physician supported knowledge of unlawfulness and intent to defraud.
Exceeding any advice given: Clinic compliance (Lancaster) may have mistakenly thought some neuropsychological testing could be done “incident to” under general supervision, but she did not advise that an unlicensed person could diagnose or order PET scans. Defendants’ conduct went beyond anything endorsed by compliance or legal staff (Trudel’s understanding was that diagnoses would be made by Oliver or the referring physician).
Profit motive and pattern of conduct: Evidence of inflated phone consultation durations, recurring scheduling for paid visits, and bonus payments—coupled with efforts to discredit or isolate critics (e.g., radiologist Dr. Szczesniak)—allowed the jury to infer specific intent to deceive for financial gain.

The panel distinguished—and implicitly harmonized—the defendants’ Liparota/Rehaif invocation: even if the government must prove knowledge of unlawful aims, that mental state can be established circumstantially. The misrepresentations, billing practices, and responses to scrutiny permitted a rational jury to find knowledge and voluntary agreement to the conspiracy under § 1349.

2) The Good‑Faith Reliance Defense: Why It Failed Here

Good‑faith reliance requires two things: full disclosure of all pertinent facts to the advisor, and genuine reliance on the advice. The court found the record inconsistent with both:

Incomplete disclosure: Trudel did not review the full proposal and understood the diagnosing physician would be Oliver or the referring provider. Lancaster’s research file never authorized diagnosis or PET orders by an unlicensed person; her advice—already partly mistaken—was narrower than what defendants did in practice.
Overreliance beyond the advice: Billing through Oliver’s NPI may have been broached, but the “incident‑to” and supervision framework (as later clarified at trial) did not cover the conduct that most concerned the jury—diagnoses and PET orders by an unlicensed individual without direct physician evaluation and supervision.

Against this evidentiary backdrop, the jury could reasonably reject good‑faith reliance and find fraudulent intent.

3) Deliberate Ignorance (Willful Blindness) Instructions: Properly Tailored

The panel’s treatment of willful blindness is a careful guide for trial courts.

Conspiracy count: The instruction tracked the Sixth Circuit’s pattern and Warshawsky’s limit—willful blindness can prove knowledge of the conspiracy’s unlawful aims but not voluntary agreement. The court did not tell the jury that deliberate ignorance could establish agreement. That avoids the Evans Landscaping error.
Substantive fraud counts (mail, wire, healthcare): The instruction explicitly tied willful blindness to knowledge that claims were false. Separately, the court instructed that the jury still had to find specific intent to defraud—i.e., to deceive/cheat for financial loss or gain. In other words, knowledge via willful blindness did not collapse into purpose; the elements remained distinct. This comports with circuit authority approving willful blindness in specific‑intent offenses when confined to the knowledge component.

4) Unindicted Co‑Conspirator Instruction and Prosecutor’s Closing

The defense repeatedly argued that Toledo Clinic leadership and departments were aware, profited, and should share blame. Given that strategy, the standard instruction clarifying that conspirators need not all be charged, and that names need not be known, was warranted and not confusing or prejudicial. The government’s fleeting reference in closing that others (e.g., the administrator or compliance director) could, in theory, be co‑conspirators—followed by a reminder that others’ potential guilt is irrelevant—did not amount to plain error, particularly because it echoed the court’s correct charge and did not impede consideration of the good‑faith theory.

5) Rule 403 and the 544‑Page Compliance File

The district court excluded the full research file as cumulative and potentially confusing but allowed defendants to:

Introduce selected excerpts;
Elucidate the research through extensive testimony (including from Lancaster herself); and
Show the jury the physical heft of the binder to convey diligence and volume.

That balance fits Rule 403’s text (excluding needlessly cumulative evidence) and did not infringe the constitutional right to present a defense. The defense was permitted to make the precise points the file was supposed to prove—scope of research, timeline, and internal reliance—without dragging the jury through hundreds of pages that risked distraction from the controlling legal question: whether defendants’ conduct exceeded even the (mistaken) compliance interpretation and manifested fraudulent intent.

Impact

Even as an unpublished decision, the opinion offers practical and doctrinal guidance with likely persuasive force in the Sixth Circuit and beyond.

Compliance advice is not a shield without full disclosure. Internal “green lights” lose force where material facts (e.g., who diagnoses, who orders tests, whether a physician first evaluated the patient) were not fully and accurately disclosed to advisors, or where conduct exceeds the scope of the advice.
“Incident‑to” and supervision nuances matter. The court’s recitation underscores common pitfalls:
- Psychological/neuropsychological services billed “incident to” require direct physician involvement (personal evaluation initiating treatment) and, in this record, could not be performed by an unlicensed individual for billing purposes.
- “General” vs. “direct” supervision is not semantic. Direct supervision entails on‑site presence when services are rendered; general supervision (available by phone) is insufficient for the services at issue.
Willful blindness instructions, properly cabined, remain robust. The panel reaffirms Warshawsky’s limit in conspiracy cases and exemplifies how to apply willful blindness to the knowledge component of specific‑intent fraud offenses without collapsing it into purpose.
Blame‑shifting invites the unindicted co‑conspirator instruction. Where defendants point to institutional knowledge or profit as an exculpatory theme, trial courts may neutralize jury confusion with the pattern instruction, so long as it does not name names or suggest guilt by association.
Managing voluminous compliance records under Rule 403. Courts may spare juries from paper avalanches while safeguarding the defense’s theory by allowing curated excerpts and demonstrative use of the materials’ volume—an approach especially apt where testimony already covers the substance.
Proof of fraudulent intent in healthcare settings. The opinion illustrates how patient testimony (materiality), mislabeling of departmental structures to payors, profit evidence, and efforts to marginalize medical dissenters collectively establish intent.

Complex Concepts Simplified

National Provider Identifier (NPI): A unique identifier required for billing Medicare/Medicaid and insurers. Only properly credentialed providers (or services properly billed under physician supervision consistent with federal rules) may use it.
CPT Codes: Standardized billing codes for medical procedures and services. Choosing the correct code and pairing it with a lawful provider/supervision context is essential to lawful billing.
Incident‑to Billing: Allows certain services performed by others to be billed as if performed by a physician—but only within strict conditions (e.g., physician’s initial evaluation/plan, qualifying supervision level, and provider authorization under state law). Not a mechanism to bill unlicensed diagnosis or ordering of advanced imaging.
General vs. Direct Supervision: General supervision means the physician is available (e.g., by phone) but not on‑site; direct supervision requires the physician to be present in the office suite and immediately available during the service.
Local Coverage Determinations (LCDs): Regional Medicare contractor policies that clarify when particular services are covered and what supervision/licensure conditions apply.
Specific Intent to Defraud: Acting with the purpose to deceive or cheat to cause loss to another or to secure financial gain for oneself—beyond mere mistake, negligence, or carelessness.
Willful Blindness (Deliberate Ignorance): When a defendant consciously avoids confirming a high probability of a fact (e.g., falsity of claims). It can establish knowledge, but—per Warshawsky—cannot substitute for the separate element of voluntary agreement to join a conspiracy.
Rule 403 (Cumulative Evidence): Even relevant evidence may be excluded if its marginal probative value is substantially outweighed by risks like confusing the issues or needlessly presenting cumulative evidence.

Conclusion

United States v. Sherry‑Ann Jenkins affirms four important propositions in fraud prosecutions, particularly in the healthcare context:

The government can prove conspiracy and specific intent through circumstantial evidence of misrepresentations, concealment, profit motives, and responses to scrutiny—especially when conduct extends beyond any compliance guidance received.
Good‑faith reliance requires full disclosure and congruence between the advice given and the conduct taken; incomplete disclosure or exceeding the scope of advice defeats the defense.
Willful blindness instructions are appropriate when limited to knowledge (of the conspiracy’s aims in conspiracy counts; of falsity in substantive counts) and must not be used to prove the separate element of agreement or specific intent to defraud.
Trial courts may manage sprawling compliance paperwork under Rule 403 without infringing the right to present a defense by permitting selected excerpts and demonstrative use rather than wholesale admission.

While the opinion is not designated for publication, its careful application of Sixth Circuit doctrine provides a clear template for trying healthcare-fraud cases that involve internal compliance advice, complex supervision rules, and multi‑count fraud indictments. Clinicians, compliance officers, and counsel should take particular note: reliance on internal research and informal understandings will not neutralize criminal intent where material facts are withheld, advice is exceeded, or misrepresentations to payors and patients persist in the face of mounting warnings.