State of Minnesota, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-1141

State of Minnesota,
Respondent,

vs.

Lillian Carletta Richardson,
Appellant.

Filed September 8, 2020
Affirmed in part, reversed in part, and remanded
Ross, Judge

Hennepin County District Court
File No. 27-CR-17-16856

Keith Ellison, Attorney General, Kirsi Poupore, Krista Barrie, Assistant Attorneys General,
St. Paul, Minnesota (for respondent)

Cathryn Middlebrook, Chief Appellate Public Defender, Benjamin J. Butler, Assistant
Public Defender, St. Paul, Minnesota (for appellant)

Considered and decided by Slieter, Presiding Judge; Ross, Judge; and Reyes, Judge.
U N P U B L I S H E D O P I N I O N
ROSS, Judge
After a stipulated-evidence trial, the district court found that appellant Lillian
Richardson led a complex, $7 million Medicaid-fraud scheme in which her family and
friends improperly submitted reimbursement claims. Appealing from her convictions of
racketeering and aiding and abetting theft by swindle, Richardson argues that the evidence
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is insufficient to sustain her convictions and that the district court miscalculated her
sentence by assigning an erroneous severity level to her racketeering conviction. We affirm
in part because the evidence supports the convictions. But we reverse in part and remand
for resentencing because the district court failed to make the requisite findings supporting
its severity-level determination.
FACTS
Medicaid Program Background
The Minnesota Department of Human Services (DHS) administers the federal
Medicaid program, which is funded by federal and state tax revenue. DHS enrolls
healthcare providers who directly serve Medicaid recipients. One arm of Medicaid is the
Personal Care Assistance (PCA) program, which serves patients in their homes. The patient
hires a provider agency for PCA services, and the agency serves as an intermediary
between the patient and DHS, contracting with individuals to provide the services directly
and also contracting with DHS. Personal-care assistants document their services on
timesheets, and the agency uses the timesheet data as a basis to be reimbursed by DHS.
A provider agency enrolls in the PCA program by submitting the necessary
enrollment documents. The agency owners, managers, and other personnel must attend
training sessions advising them how to complete the enrollment documents and informing
them of the rules and laws governing PCA agencies. The Medicaid program and DHS
can exclude individuals and entities from participating, and each maintains an
excluded-provider list. Agencies may not employ or contract with anyone on the list, and
DHS will not reimburse an agency for any services provided either by an excluded person
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or by a provider that employs an excluded person. DHS informs all agency personnel of
this strict excluded-person policy.
Richardson’s 2013 Medicaid Exclusion
Before 2008, Lillian Richardson owned and operated PCA agency Best of Care Inc.
But in 2008, DHS began withholding payments to Best of Care, suspecting that the agency
had fraudulently submitted billing claims for services not perform ed. The state charged
Richardson criminally with theft by false representation under Minnesota Statutes section
609.52, subdivision 2(3)(iii) (2008). Richardson pleaded guilty in 2012, and the district
court stayed imposition of a sentence on probationary conditions. The conviction
disqualified Richardson from participating in providing service in the Medicaid program
in any capacity. The program placed her on the exclusion list and notified her of the
five-year exclusion beginning July 18, 2013. The district court later executed a 21- month
prison sentence after Richardson violated the terms of her probation, and she was released
in July 2018.
Richardson’s Medicaid Activities Despite Her Exclusion
Richardson flouted the exclusion by continuing to affiliate with agencies that
provided Medicaid services. She assisted family members and friends to manage a bevy of
PCA agencies: Abundant Hands PCA LLC, owned by sister Cherise Henry; Bridging
Together L LC, owned by sister Bridgett Burrell; Caring for Angels LLC, owned by
daughter Lasania Oda; Healing Hands Ho me Care LLC, owned by sister-in-law Deanna
Williams; and Universal Home Health Care LLC, owned by relative Tonette Brackins.
Each agency submitted document s to enroll in the Medicaid program. Despite their
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affiliation with Richardson as both a de facto manager and excluded person, the agency
owners signed a provider agreement representing that none of their respective age ncy’s
owners, managers, or employees were excluded from the Medicaid program . And when
the agencies submitted written disclosures requiring them to nam e all manag ers and
persons with ownership or contractual relationships with the agencies, they consistently
failed to list Richardson. During this period , Richardson routinely spoke with agency
owners and personnel by telephone and email, and she accepted Medicaid money that the
agency owners funneled through the agencies and laundered through various bank
accounts.
Charges, Convictions, and Sentence
The state charged Richardson in July 2017 with racketeering and eight counts of
aiding and abetting theft by swindle. The theft-by -swindle counts fell into six- month
periods between July 2013 and March 2017. The complaint alleged that Richardson, along
with her agency-owning family and friends, engaged in a criminal enterprise in which the
agencies defrauded Medicaid. Richardson and her codefendants allegedly swindled the
Medicaid program of more than $7.7 million in funds that, because of Richardson’s
exclusion, the agencies were prohibited from receiving. The complaint also alleged that
Richardson helped the agencies commit other fraudulent activities, including billing for
medical services not performed and paying recipients illegal kickbacks. Richardson waived
her right to a jury trial and agreed to a trial on stipulated evidence that detailed the
circumstances just summarized.
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The district court found Richardson guilty of racketeering and of all eight counts of
aiding and abetting theft by swindle. It found that she was associated with an “enterprise”
as defined by the antiracketeering statute and that she actively participated in the
enterprise’s criminal activities in multiple ways: by coordinating with her codefendants to
submit fraudulent Medicaid claims; by shuffling recipients and personnel to new agencies
whenever the state began investigating one agency for fraud; and by concealing her
unlawful involvement with the agencies. The district court also found Richardson guilty of
aiding and abetting theft by swindle because the agencies, which she assisted in managing,
submitted enrollment documents falsely representing that no excluded person was involved
with the agencies. The district court determined that the relevant “swindle” was not merely
the agencies’ submissions of claims for medical services that did not occur, but also the
false representations in the enrollment documents regarding Richardson’s status as an
excluded person. This me ant that none of the funds the agencies received during the
relevant period were lawfully procured, because no agency may receive a ny Medicaid
funds while the agency is affiliated with an excluded person.
Richardson agreed to have her racketeering conviction ranked at a severity level of
nine for sentencing in exchange for the state not seeking an upward sentencing departure.
The district court accepted the agreed-upon severity level and sentenced Richardson to
110 months in prison on the racketeering conviction—the presumptive sentence for a
severity-level-nine conviction.
Richardson appeals.

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D E C I S I O N
Richardson challenges her convictions on the notion that the evidence is
insufficient, arguing that the arrangement did not constitute a racketeering “enterprise” and
that the state did not prove that she intended to aid and abet theft by swindle. She argues
alternatively that the district court improperly sentenced her based on a severity level of
nine without making necessary findings. Only the sentencing argument prevails.
I
We reject Richardson’s contention that her racketeering conviction fails for lack of
evidence that she was associated with an enterprise. We review convictions facing
evidence-insufficiency contentions by examining the record to see if the direct evidence,
when considered in a light most favorable to the verdict, would allow a fact-finder to reach
its verdict. State v. Ferguson, 742 N.W.2d 651, 658 (Minn. 2007). And when the direct
evidence does not establish a particular element, we apply a heightened two-step review of
the circumstantial evidence. Loving v. State, 891 N.W.2d 638, 643 (Minn. 2017). That is,
first we identify the circumstances proved, deferring to the fact-finder’s acceptance of
proof of these circumstances and its rejection of conflicting evidence, and second we
consider whether the circumstances proved are consistent with guilt and inconsistent with
any rational hypothesis other than guilt. State v. Anderson, 789 N.W.2d 227, 241–42
(Minn. 2010). Applying this standard here, we are satisfied that the evidence supports the
verdict.
To convict Richardson of racketeering, the state had to prove that she was
“employed by or associated with an enterprise” and intentionally conducted or participated
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in the affairs of the enterprise “by participating in a pattern of criminal activity.”
Minn. Stat. § 609.903, subd. 1(1) (2016). We address the only element that Richardson
challenges—the existence of an enterprise.
Richardson argues unconvincingly that the evidence was insufficient to show that
she was involved with an “enterprise.” An “enterprise” may be “a sole proprietorship,
partnership, corporation, trust, or other legal entity, or a union, governmental entity,
association, or group of persons, associated in fact although not a legal entity, and includes
illicit as well as legitimate enterprises.” Minn. Stat. § 609.902, subd. 3 (2016). It must have
three characteristics: (1) a “common purpose” among the people associated with the
enterprise; (2) an “ongoing and continuing” organization that functions “under some sort
of decision[-]making arrangement or structure”; and (3) the extension of the organization’s
activities beyond the underlying criminal acts “either to coordinate the underlying criminal
acts into a pattern of criminal activity or to engage in other activities.” State v. Huynh,
519 N.W.2d 191, 196 (Minn. 1994). Richardson argues that the district court found her
guilty based on an incorrect definition.
Richardson particularly objects to the district court’s reasoning that an enterprise
“does not require an authoritarian or formal structure” but may be shown through the
existence of “a loosely affiliated set of agencies carrying out a scheme with a common
purpose.” The district court laid out the three-part Huynh test, implicitly determining that
the “loosely affiliated set of agencies” satisfied the three-part test for an enterprise. The
Huynh court recognized that, although the racketeering statute regards organized crime, it
applies to various entities that have an “organizational set-up, whether formal or informal.”
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Id. at 195–96. We therefore are unpersuaded by Richardson’s urging that Huynh requires
proof of a hierarchy . It is true that the Huynh court mentions “hierarchy,” but it does so
only in a footnote discussing the legislative history of the statute, referencing a
subcommittee meeting where one witness testified as to his understanding of what an
enterprise requires. Id. at 195 n.4. The Huynh holding does not require a hierarchy,
however, but just “some sort” of arrangement or structure for decision-making. Id. at 196.
A hierarchy is only one sort of arrangement for decision-making.
We are mindful that a hierarchical structure might constitute the most obvious
type of enterprise. See, e.g., State v. Longo, 909 N.W.2d 599, 606 (Minn. App. 2018)
(characterizing an association having a principal operating with a “right-hand man” and
other drug runners as a “clear organizational structure”). But the statutory definition also
contemplates entities that are not hierarchical in nature, like, for example, partnerships.
See Minn. Stat. § 609.902, subd. 3. Notwithstanding Longo’s example of one enterprise
arrangement, applying the inclusive statutory language and the reasoning in Huynh, we are
unpersuaded by Richardson’s hierarchy argument.
The record amply supports the finding that the individuals and agencies here
operated within “some sort” of decision- making arrangement. For example, a ll agency
principals uniformly omitted Richardson’s name from enrollment documentation and
subsequent submissions that required the agencies to identify their affiliates. Given
Richardson’s prevalence and clear association with the agencies and their operations, it is
unreasonable to infer that the omission resulted from a mere coincidence rather than a
concerted (i.e., communicated) plan. Also, the agencies shared personnel, and participants
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and clients were shuffled between agencies whenever one agency came under
investigation—a remarkable coincidence absent some sort of decision-making
arrangement directing the shuffling. These circumstances lead to only one reasonable
inference, which is that the agencies operated under some form of decision- making
arrangement.
Having determined that the evidence permits only one rational hypothesis—that
Richardson’s association of agencies functioned under “some sort” of decision- making
arrangement—we easily conclude that the state presented sufficient evidence to satisfy the
other elements of the Huynh test. The obvious common purpose was to defraud the
Medicaid program , and the principals accomplished this using similar methods and
schemes of both operation and detection avoidance. The organization was “ongoing and
continuing” becaus e the member agencies repeatedly submitted unauthorized and
fraudulent claims for four years. Finally, the organization’s activities extended beyond the
primary criminal conduct of submitting unauthorized claims, extending to a pattern of
criminal conduct, including billing for medical services that were never provided, paying
recipients kickbacks, and laundering money to veil the illegal activities. Sufficient evidence
supports Richardson’s racketeering conviction.
II
The evidence also supports Richardson’s convictions of aiding and abetting theft by
swindle. A person commits the underlying crime “by swindling, whether by artifice, trick,
device, or any other means, [to] obtain[] property or services from another person.” Minn.
Stat. § 609.52, subd. 2(a)(4) (2016). To support the conviction, the evidence must prove
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three elements: (1) that the property owner “gave up possession of the property due to the
swindle”; (2) that the swindler intended to obtain possession of the property for herself or
someone else; and (3) that the action constituted a swindle. State v. Pratt, 813 N.W.2d 868,
873 (Minn. 2012). The evidence proves each element.
A swindle is an intentional misrepresentation or scheme to defraud another person.
State v. Flicek, 657 N.W.2d 592, 598 (Minn. App. 2003). The agencies’ submissions of
false claims constituted swindles in the traditional sense; the agencies represented that they
performed some services that were not actually provided, and they received unauthorized
Medicaid funds as a result. The swindles went further. Richardson was excluded from
participating in the Medicaid program and was placed on the exclusion list in July 2013
because of her fraudulent submission of claims during her previous ownership of a provider
agency. See 42 U.S.C. § 1320a-7(a)(1), (i) (2012); see also Minn. Stat. § 256B.064,
subd. 2(d) (2012) (directing the DHS commissioner to terminate a vendor’s participation
in the program based on the vendor’s exclusion from the program). The DHS policy manual
emphasizes this by indicating clearly that Richardson’s agencies were precluded from
Medicaid funds. It explains that “payment withholding applies to the excluded person and
anyone who employs or contracts with the excluded person.” (Emphasis added.) It adds
that “[t]he exclusion applies regardless of who submits the claims and applies to all
administrative and management services furnished by the excluded person.” And it
continues, “Providers must report to [the program] any [i]ndividual or entity they find on
the exclu sion list .” (Emphasis added.) Because of Richardson’s involvement with the
agencies while she was listed as an excluded person, the agencies were prohibited from
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receiving any of the Medicaid funds they received. The agencies nevertheless submitted
enrollment documentation representing that no excluded provider was associated with
them or would participate in their management. And they failed to list Richardson on the
documents purportedly disclosing all persons owning or contracting with the agencies.
These false representations facilitated the agencies’ defrauding of Medicaid and constitute
a swindle. We reject Richardson ’s assertion that the payments did not result from the
misrepresentations and that the misrepresentations were merely a but-for cause too distant
to prove liability. The misrepresentations caused the disbursement of money the agencies
were ineligible to receive.
Richardson maintains that the misleading enrollment documents do not establish
that Medicaid property was given up “due to the swindle.” See Pratt, 813 N.W.2d at 873.
We do not read Pratt to mean that the property transfer must result directly from the act
that constitutes the swindle. The Pratt defendant submitted a purchase agreement and loan
applications that contained false information, and mortgage lenders relied on those
documents when deciding whether to extend loans. Id. at 871, 874. The Pratt court held
that the false representations sufficiently supported the defendant’s theft-by -swindle
convictions even though the loan funds were not disbursed until the later signing of the
financing documents at closing. Id. at 875. Similarly here, the false representations in the
enrollment documents can form the basis for Richardson’s aiding-and-abetting-theft
convictions even though the actual transfer of Medicaid funds did not occur until the
agencies later submitted claims for reimbursement. As in Pratt, reliance on the earlier
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misrepresentations led to the eventual transfer of funds, forming an adequate basis for the
aiding-and-abetting-theft convictions.
For the state to establish Richardson’s guilt as an accomplice based on the
underlying swindles, it had to introduce evidence that she intentionally aided, advised,
hired, counseled, or conspired with the others to commit the crime s. See Minn. Stat.
§ 609.05, subd. 1 (2016). A defendant intentionally aids accomplices if she knows that the
accomplices are going to commit a crime and she intends her actions to further the
commission of that crime. State v. McAllister, 862 N.W.2d 49, 52 (Minn. 2015).
Because proof of Richardson’s mens rea rested on circumstantial evidence, we will
review her sufficiency challenge based on the following circumstances proved as implied
by the verdict . Richardson frequently and continually communicated with the agency
owners and personnel throughout the enterprise. Her browser history revealed multiple
searches of the DHS website and multiple emails sent to the agencies’ email accounts. She
exchanged text messages almost daily between June 2016 and January 2017 with one of
the agency’s managers, informing the manager of the agency account’s username and
password, instructing her to mail an insurance check, asking her about mailing timesheets,
and instructing her about conducting background checks of agency personnel. Richardson
attempted to destroy many documents during the 45 minutes while investigators were
preparing to enter the home to execute a search warrant, and once they entered they seized
numerous documents, including enrollment information, payroll spreadsheets, tax
documents, forms for claim reimbursement, and a notebook with the agencies’ login and
password information. She possessed the agencies’ enrollment documents that had omitted
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her involvement. Medicaid funds that had been disbursed to the agencies were transferred
to various bank accounts in Richardson’s name. The circumstances proved readily imply
that Richardson intentionally aided, advised, hired, counseled, or conspired with others to
commit the swindle, and they allow for no other reasonable inference.
We likewise reject Richardson’s argument that the evidence was insufficient to
support the value element of her theft-by -swindle convictions. For each of the eight
charged six-month periods, the state had to prove that the value of the property stolen was
greater than $35,000. See Minn. Stat. § 609.52, subd. 3(1) (2016). Because the agencies
involved in Richardson’s scheme were not entitled to any of the Medicaid funds they
received, the convictions arose from all funds improperly disbursed. The state submitted
evidence showing that the value of the swindled funds was considerably more than $35,000
during each time period, and Richardson does not dispute that fact . Richardson maintains
instead that the evidence did not show that she knew that the amount her codefendants were
going to swindle would exceed $35,000. Richardson cites no authority supporting her
assertion that the state was required to prove she knew her accomplices would swindle a
specific amount. Caselaw clarifies that the requisite intent concerns the intent to merely
defraud, not an intent to steal a specific amount. See Flicek, 657 N.W.2d at 598 (“Theft by
swindle requires the intent to defraud.”); In re Disciplinary Action Against Bonner,
896 N.W.2d 98, 111 (Minn. 2017) (“[T]heft by swindle requires the specific intent to
defraud another.”). And the statute establishing the $35,000 threshold references the mere
commission of the theft while it includes no reference to the actor’s intent to steal property
exceeding that value. But f or the sake of Richardson’s argument, we can assume the
14
validity of Richardson’s premise that the state had to prove that she knew not only of the
swindle but of the amount swindled. The state met this burden based on the same
circumstances proved in light of Richardson’s extensive communication with the agency
operatives and her own receipt of part of the illegally obtained Medicaid funds disbursed
to the agencies through various bank accounts in her name. We cannot accept as rational
the hypothesis that Richardson was unaware of the fraud’s extensive revenues, which far
exceeded the $35,000 threshold in each charging period.
III
Richardson argues alternatively that the district court failed to make the necessary
findings to sentence her based on a severity level nine for the racketeering conviction. The
argument prevails.
The prosecutor indicated at the sentencing hearing that Richardson had agreed to a
severity level of nine in exchange for the state not seeking an upward sentencing departure.
The district court sentenced Richardson to 110 months in prison based on a severity level of
nine, but it did not explain why it made the severity -level determination. We review a
district court’s determination of a severity level for an abuse of discretion. State v. Bertsch,
707 N.W.2d 660, 666 (Minn. 2006).
A district court must determine a defendant’s sentence in part based on the severity
level of the conviction offense. Minn. Sent. Guidelines 2.A, 2.C.1 (2016). The sentencing
guidelines include no severity-level designation for some offenses, including racketeering.
When the guidelines designate no severity level, the district court must assign one and
specify its reasons. Minn. Sent. Guidelines 2.A.4 (2016). The district court may consider
15
certain factors, like the gravity of the conduct, the designated severity level of a similar
offense, the severity level applied to other offenders for the same offense, and the severity
level assigned to other offenders who committed similar conduct. Id. The district court
considered none of these factors on the record, failing to meet the express requirement of
guideline 2.A.4. Because of the requirement and because, without a related finding, we
cannot determ ine whether the district court sentenced within its discretion, the district
court’s omission requires reversal. See S tate v. Kenard, 606 N.W.2d 440, 442 –43
(Minn. 2000). The reason is that, in the absence of such an explanation, it is virtually
impossible for a reviewing court to determine whether the sentencing court pro perly
exercised its discretion. See id.
We are not persuaded otherwise by the state’s contention that Richardson forfeited
her right to challenge the severity-level determination because she agreed to it and did not
object during her sentencing hearing. That a defendant’s sentencing arrangement resulted
from an agreement does not divest the defendant of the right to challenge the legality of
her sentence. In the context of a sentencing departure, for example, when the state and the
defendant have reached an agreement to depart upwards from the sentencing guidelines,
the district court cannot rely solely on the agreement without independently determining
that the circumstances warrant the departure. State v. Misquadace, 644 N.W.2d 65, 71–72
(Minn. 2002). Relying on an agreement by itself risks offending “the overriding
principle[s] in all sentencing” of “rationality, predictability, and consistency” based on the
sentencing guidelines’ framework. Id. at 71. The same rationale applies to the
determination of a severity level of an offense, and the same risks are involved by relying
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only on the parties’ agreement. The parties’ agreement as to an offense’s severity level
does not relieve the district court of its obligation to make findings explaining its reasons
for designating a severity level.
Rather than follow the state’s alternative urging that we review the record and
decide the severity level on appeal, we will follow the example of Misquadac e, id. at 72.
We therefore reverse the sentence with instructions on remand for the district court to
resentence Richardson after making requisite severity-level findings.
Affirmed in part, reversed in part, and remanded.