Mailyan $45M Botox Fraud Conviction: Defense Analysis
On May 18, 2026, a federal jury in the Central District of California convicted Dr. Violetta Mailyan, the owner of Healthy Way Medical Center in Glendale, of nine counts of wire fraud and three counts of attempted obstruction of a criminal investigation of a health care offense in a $45 million Botox billing scheme targeting Medicare. The prosecution originated from a referral by the DOJ Fraud Section's Data Analytics Team. The FBI described the case as the largest Botox fraud scheme in the United States.
The Mailyan Conviction: A Defense Lawyer's Reading of the Verdict
The verdict in United States v. Mailyan, No. 2:25-cr-00837-HDV (C.D. Cal.), combines three current federal healthcare fraud enforcement trends. The case originated from a data analytics referral. The charges were wire fraud rather than healthcare fraud. And the indictment paired the fraud counts with a separate obstruction theory under 18 U.S.C. section 1518 based on fabricated records produced in response to a grand jury subpoena. The DOJ press release emphasizes the data analytics origin. The Department's stated objective is to replicate the model.
The Indictment: How DOJ Framed the Charges
The First Superseding Indictment, filed December 17, 2025, and later the operative Amended First Superseding Indictment, filed April 20, 2026, charged Dr. Mailyan with nine counts of wire fraud under 18 U.S.C. section 1343 and three counts of attempted obstruction under 18 U.S.C. section 1518, along with a forfeiture allegation under 18 U.S.C. section 981(a)(1)(C) and 28 U.S.C. section 2461(c). DOJ did not charge healthcare fraud under 18 U.S.C. section 1347. Instead it used wire fraud to capture each electronic Medicare claim transmission from Healthy Way in California to the CMS server in North Dakota. Each wire fraud count carries a 20-year maximum. Each obstruction count carries a 5-year maximum.
The Billing Codes at Issue: CPT J0585 and CPT 64615
The indictment identifies the two Current Procedural Terminology codes at the center of the scheme. CPT Code J0585 is the code for one unit of Botox medication. CPT Code 64615 is the code for the service of injecting Botox. Medicare Part B covers Botox under specific medical necessity rules. For chronic migraines (defined as fifteen or more headache days per month with episodes lasting four hours or longer), the patient must have been unresponsive to conventional methods such as medication and physical therapy, and the medical record must contain documentation that fully supports medical necessity. Exceptions exist for focal dystonia, hemifacial spasm, orofacial dyskinesia, blepharospasm, severe writer's cramp, laryngeal spasm, and dysphonia, where Botox can be an initial mode of therapy. Local Coverage Determinations set the diagnostic, frequency, and documentation requirements. Botox to treat skin wrinkles is cosmetic and is not covered by Medicare.
The Charged Conduct
The indictment alleges that Mailyan caused Healthy Way to submit claims under CPT J0585 and CPT 64615 listing her as the rendering provider for Botox injections that the government alleged were either medically unnecessary or never provided. The specific factual examples charged in the indictment included claims for injections allegedly provided to beneficiaries who were traveling outside the United States on the date of service, on dates when Mailyan was outside the United States or outside California, to a beneficiary in federal Bureau of Prisons custody, on dates when Healthy Way was closed, and on dates before the beneficiary had even contacted the clinic. The indictment also alleges that Mailyan fabricated patient medical records to falsely document chronic migraines.
The Obstruction Counts
The three obstruction counts under 18 U.S.C. section 1518 charge that Mailyan provided fabricated medical records of purported chronic migraine treatment for three specific beneficiaries (initials E.T.O., S.Y., and L.B.) to HHS-OIG criminal investigators. Section 1518 reaches "the willful prevention, obstruction, misleading, or delay" of the communication of information to a criminal investigator about a federal healthcare offense. The statute is narrower than the omnibus obstruction provision under 18 U.S.C. section 1503 but specifically tailored to healthcare fraud investigations.
The Wire Fraud Elements the Jury Was Instructed to Find
The parties' Joint Proposed Jury Instructions, filed May 17, 2026, set out the elements the jury was required to find beyond a reasonable doubt. The wire fraud instruction tracks the Ninth Circuit Model Criminal Jury Instruction for 18 U.S.C. section 1343.
The fourth element explains why DOJ structures Medicare cases as wire fraud cases. Each electronic claim submission from Healthy Way to the Medicare contractor's North Dakota server supported a separate count. That is how a single scheme produced nine wire fraud counts in this indictment.
The Materiality Element in a Botox Billing Case
Materiality is a key defense focus in any Medicare Botox billing case. A misrepresentation is material only if it had a natural tendency to influence Medicare's payment decision. CMS coverage of CPT 64615 for chronic migraine depends on the diagnosis. A claim that misrepresents the diagnosis as chronic migraine when the injection was cosmetic is plainly material because it converts a non-covered service into a covered one. A claim that has an internal documentation gap but reflects a real injection provided to a real patient with a real qualifying diagnosis is different. The government must prove that the misrepresentation actually had a tendency to influence Medicare's payment decision, not merely that the documentation was imperfect.
The Mens Rea Instructions: How the Government Was Required to Prove Intent
The mens rea instructions given in Mailyan reflect both the Ninth Circuit Model Criminal Jury Instructions and the specific rulings Judge Hernán D. Vera issued in a three-page in-chambers order on May 17, 2026, the day before closing arguments. The order resolved the only two contested jury instructions in the case. Both went to the defendant's mental state. The court ruled in favor of the government on a deliberate ignorance instruction and in favor of the defendant on a good-faith instruction. Both rulings rested on Ninth Circuit precedent. The sections below set out each instruction as the jury received it.
Wire Fraud — Intent to Defraud
The wire fraud counts under 18 U.S.C. section 1343 required the government to prove that Mailyan "acted with the intent to defraud, that is, the intent to deceive and cheat." That is the mens rea element of wire fraud as charged. It is distinct from the willfulness standard that governs the obstruction counts. It requires proof, beyond a reasonable doubt, of a specific intent to deceive and to obtain money or property as a result.
"Deceive and cheat" is conjunctive. The government must prove both. Deception alone, without an intent to deprive the victim of money or property, is not wire fraud. An intent to obtain money or property, without deceptive means, is not wire fraud. The defense focus in any healthcare billing case is whether the government's evidence supports both prongs simultaneously, claim by claim.
Instruction 18 — Knowingly
The knowingly instruction reads: "An act is done knowingly if the defendant is aware of the act and does not act through ignorance, mistake, or accident. The government is not required to prove that the defendant knew that his or her acts or omissions were unlawful."
The knowingly element underwrites the wire fraud requirement that the defendant "knowingly participated in, devised, or intended to devise a scheme or plan to defraud." It is a lower bar than willfulness. The government must prove only that the defendant was aware of what she was doing.
The carve-out for "ignorance, mistake, or accident" is the defense entry point. A physician who relied on a billing administrator, who delegated coding decisions to staff, or who reasonably understood a billing practice to be customary can argue that the conduct was not knowing within the meaning of the statute.
In a Botox or injection fraud case where the government's theory rests on templated claims and high volume, the defense focus is on what the physician actually knew about each charged claim.
Instruction 19 — Deliberate Ignorance (the Jewell Instruction)
The deliberate ignorance instruction was the central contested instruction in Mailyan. Judge Vera gave it over the defense's objection. The May 17, 2026 order explaining the ruling sets out the analysis below.
The instruction reads, in its operative terms:
"You may find that the defendant acted knowingly if you find beyond a reasonable doubt that: First, the defendant was aware of a high probability that wire fraud was occurring, and Second, the defendant deliberately avoided learning the truth. You may not find such knowledge, however, if you find that the defendant actually believed that there was no wire fraud, or if you find that the defendant was simply negligent, careless, or foolish."
Ninth Circuit Model Criminal Jury Instruction on Deliberate Ignorance, as given by the court in United States v. Mailyan, Dkt. 83 (May 17, 2026)The instruction has two elements and one carve-out. The government must prove (1) awareness of a high probability that wire fraud was occurring, and (2) deliberate avoidance of the truth. The carve-out blocks conviction where the defendant actually believed no fraud was occurring, or where the defendant was simply negligent, careless, or foolish. The instruction is sometimes called the Jewell instruction after United States v. Jewell, 532 F.2d 697 (9th Cir. 1976) (en banc).
Why the Court Gave the Instruction
Judge Vera applied the controlling Ninth Circuit standard from United States v. Heredia, 483 F.3d 913 (9th Cir. 2007) (en banc). Under Heredia, a deliberate ignorance instruction is appropriate when "the jury could rationally find willful blindness even though it has rejected the government's evidence of actual knowledge." The same standard governs Medicare fraud cases. United States v. Hong, 938 F.3d 1040, 1046 (9th Cir. 2019).
The factual predicate was satisfied on both prongs of the government's case: the chronic-migraine eligibility theory and the dates-of-service theory.
On the chronic-migraine theory, the court found that a reasonable jury could find that Mailyan had actual knowledge that her patients did not suffer from chronic migraines eligible for Botox treatment under Medicare. Several patients testified that they had headaches at a frequency and intensity below the Medicare chronic-migraine threshold of fifteen or more headache days per month with episodes lasting four hours or longer. Several primary care physicians testified that their patients did not suffer from chronic migraines at all.
From that record, the jury could infer actual knowledge. But actual knowledge was "not the only" rational inference. A jury could instead conclude that Mailyan "d[id]n't know because [she] d[id]n't want to know," meaning that she deliberately avoided asking patients diagnostic questions or performing the examination that would have surfaced the absence of chronic migraine. That alternative inference is the factual predicate for willful blindness.
The same dual-inference analysis applied to the dates-of-service theory. A jury could find that Mailyan knew she was billing for injections she did not provide. That finding "presupposes that the jury believe[s] the government's case in its entirety, and disbelieve[s] all of [Mailyan]'s exculpatory statements."
A jury was not required to do that. A jury could instead credit Mailyan's testimony that the impossible dates of service were billing mistakes, but still find that she "was aware of a high probability" that the dates were wrong and "deliberately avoided learning the truth." Under Heredia, that combination of inferences is sufficient to support the instruction.
The procedural lesson for the defense in any data-analytics-driven Medicare case: when the defendant takes the stand and offers an exculpatory narrative of carelessness, billing error, or delegation, that very testimony can supply the factual predicate for the deliberate ignorance instruction. The instruction lets the jury convict on a willful-blindness theory even after crediting the defendant's denial of actual knowledge.
The Good-Faith Instruction
The defense requested a separate good-faith instruction. The court gave it. The instruction reads, in its operative terms:
"'Good faith' is a complete defense to a charge that requires intent to defraud. A defendant isn't required to prove good faith. The Government must prove intent to defraud beyond a reasonable doubt. An honestly held opinion or an honestly formed belief cannot be fraudulent intent — even if the opinion or belief is mistaken. Similarly, evidence of a mistake in judgment, an error in management, or carelessness can't establish fraudulent intent. But an honest belief that a business venture would ultimately succeed doesn't constitute good faith if the Defendant intended to deceive others by making representations the Defendant knew to be false or fraudulent."
Eleventh Circuit Model Criminal Jury Instruction on Good Faith, as given by the court in United States v. Mailyan, Dkt. 83 (May 17, 2026)The instruction has four operative components. First, good faith is a complete defense to any charge that requires intent to defraud. Second, the defendant has no burden of proof; the government carries the burden on intent throughout. Third, an honestly held opinion or belief cannot be fraudulent intent, even if mistaken, and a mistake in judgment, an error in management, or carelessness cannot establish fraudulent intent. Fourth, the instruction draws the outer limit: an honest belief that a business venture would ultimately succeed is not good faith if the defendant intended to deceive others through representations she knew to be false.
Why the Court Gave the Instruction
The government opposed the request, citing United States v. Hickey, 580 F.3d 922, 931 (9th Cir. 2009), for the rule that a defendant is not entitled to a separate good-faith instruction when the jury has been adequately instructed on the intent element of the offense.
Judge Vera agreed on the entitlement issue. A defendant is not entitled to a separate good-faith instruction in the Ninth Circuit. But the court drew the controlling distinction. A court may still give a good-faith instruction in its discretion, even when the defendant is not entitled to one. United States v. Molinaro, 11 F.3d 853, 863 (9th Cir. 1993).
The factual predicate was met. Mailyan had testified to her own good faith, characterizing the disputed conduct as a "mistake in judgment," "error in management," or "carelessness." With that record, the court exercised its discretion to give the instruction.
The deliberate ignorance instruction and the good-faith instruction in the same jury charge ran in different directions. The deliberate ignorance instruction lowered the government's effective burden on the knowledge element by letting the jury find knowledge through willful blindness when direct evidence of actual knowledge was contested. The good-faith instruction reinforced the defense theory that an honestly held but mistaken belief cannot be fraudulent intent. The same trial record that supported the willful-blindness theory — the defendant's testimony to error and carelessness — also supplied the factual predicate for the good-faith defense.
Instruction 17 — Willfully (Obstruction Counts Only)
The willfulness instruction applies only to the three counts of attempted obstruction of a criminal investigation of a healthcare offense under 18 U.S.C. section 1518. It does not apply to the wire fraud counts. The wire fraud counts use the intent-to-defraud standard discussed above.
The willfulness instruction reads: "An act is done willfully if the defendant acts with a bad purpose, that is, with knowledge that the defendant's conduct was, in a general sense, unlawful. The government need not prove that the defendant was aware of the specific provision of the law that rendered the defendant's conduct unlawful."
Two parts of the instruction matter for the obstruction defense. First, the government must prove a "bad purpose." A clerical error, a clinical note completed late, or a record produced in response to a subpoena under a reasonable belief that it was responsive is not a bad purpose.
Second, the government must prove the defendant knew the conduct was unlawful "in a general sense." Knowledge of the specific statute is not required. Knowledge that the act of providing fabricated records to a federal investigator was wrongful is. Negligence does not satisfy willfulness. Honest mistake does not satisfy willfulness.
The obstruction counts in Mailyan turned on the allegation that the defendant altered patient records after receiving a grand jury subpoena and provided the altered documents to HHS-OIG agents. That conduct directly satisfies the bad-purpose element if the jury credits the government's proof of fabrication.
Instruction 15 — Attempted Obstruction Elements
The section 1518 instruction breaks the obstruction offense into two elements: (1) the defendant willfully attempted to prevent, obstruct, mislead, or delay the communication of information or records to a criminal investigator, and (2) the information related to a violation of a federal healthcare offense.
The instruction adopts the willfulness definition from Instruction 17. It identifies Special Agents of the FBI and HHS-OIG as "criminal investigators" under the statute. It also defines a "federal healthcare offense" to include a wire fraud violation under 18 U.S.C. section 1343 that relates to a healthcare benefit program. That definition allowed DOJ to charge section 1518 even though the indictment did not include a section 1347 healthcare fraud count.
Data Analytics: How DOJ Found This Case
The DOJ press release identifies the origin of the investigation: a referral from the Health Care Fraud Section's Data Analytics Team. According to the release, the team's analysis showed that Mailyan was paid more by Medicare for Botox injections than any other doctor in the United States. She received more than $24 million over four years for CPT J0585 and CPT 64615 claims. That figure was six times the next-highest group of Medicare Botox-billing providers, all of whom were neurologists.
Dr. Violetta Mailyan — Peer Comparison Report
Medicare Part B Payments for onabotulinumtoxinA (Botox®)
Claims Paid: 2020–2024
Source: U.S. Department of Justice, Office of Public Affairs, Press Release No. 26-526 (May 19, 2026). Each blue point represents one Medicare-billing provider's total Botox claims and reimbursement for the period 2020 to 2024. Peer cluster positions are representative of the press release graphic.
How Outlier Status Translates Into a Criminal Referral
The chart reproduced above is the working artifact of the DOJ Fraud Section's data-driven enforcement model. The horizontal axis tracks the number of Botox claims paid by Medicare to each provider in the country between 2020 and 2024. The vertical axis tracks the dollar value of those payments. The cluster of blue dots near the origin represents the universe of physicians and clinics that billed Medicare for Botox during that period. The red dot at the upper right is Mailyan. The gap between Mailyan's data point and the next-highest provider was the analytical fact that initiated the criminal investigation.
The Data Analytics Team's peer-comparison methodology is straightforward in concept. Providers are grouped by specialty, geography, patient population, and procedure mix. Each provider's billing is plotted against the peer benchmark. A provider whose volume, reimbursement, or frequency falls outside the cluster is flagged. Most flagged providers are not prosecuted. Outlier status alone is not proof of fraud. Statistical deviation can reflect specialty concentration, geographic patient demographics, or referral patterns that produce legitimate volume. The defense in any data-analytics-driven investigation begins with that point.
What separates Mailyan from the typical outlier case was the magnitude of the deviation combined with the corroborating evidence the government developed after the referral. The press release reports that Mailyan was reimbursed six times more than the next-highest group of Botox-billing providers, all of whom were neurologists. The investigation that followed produced the specific factual proof that supported the indictment: travel records showing the defendant outside the country on billed dates of service, federal Bureau of Prisons custody records for a billed beneficiary, and clinic-closure records on dates the defendant claimed to have provided thousands of injections. The chart is the trigger. The underlying proof is the case.
The Data Analytics Team sits within the DOJ Criminal Division's Health Care Fraud Unit. Its operating model is to identify statistical outliers in CMS claims data and refer those outliers to one of the nine federal Strike Forces or to Fraud Section trial attorneys for investigation. The Health Care Fraud Data Fusion Center integrates CMS claims data with HHS-OIG investigative information, FBI intelligence, and AI-driven analytics. An extreme outlier billing pattern is not itself proof of fraud. The government still has to build the underlying case. But the analytics referral is the trigger for the investigation and the framing of the indictment.
The Defense Posture in a Data-Driven Investigation
A provider who learns of a UPIC audit, a prepayment review, a target letter, or a grand jury subpoena often has been on the analytics team's radar for months before notice. The defense response is built on four points:
Lessons for Botox, Medspa, and Injection Practices
Cosmetic injection fraud cases share a recurring structure: a high-volume billing practice, a CPT code with narrow medical necessity rules, a clinical documentation question, and an outlier flag in CMS claims data.
The Medical Necessity Element on CPT 64615
The Medicare Botox coverage rules are narrow. Botox is covered for spasticity or excessive muscular contractions where conventional methods have failed, or for chronic migraine defined as fifteen or more headache days per month with episodes of four hours or longer. The medical record must support the diagnosis. The defense priority in any Botox investigation is the clinical record. A documentation gap is not a federal crime. A fabricated record is.
The Cosmetic Use Exclusion
Botox for skin wrinkles is cosmetic and is not covered by Medicare. A practice that bills cosmetic Botox under a covered diagnosis converts a non-covered service into a covered one. Defense counsel in a medspa or aesthetic practice case examines patient consent forms, patient-reported reasons for the visit, the practice's marketing materials, and the clinical notes to determine whether the government can prove the actual purpose of the injection was cosmetic.
The Telehealth and Locum Tenens Pattern
Several of the Mailyan counts depended on showing that the rendering provider was not physically present at the clinic on the billed date of service. The government used travel records and clinic-closure records to prove this. Aesthetic practices that use locum tenens injectors, advanced practice nurses, or telehealth-supervised injection protocols must verify that the rendering-provider field on each claim correctly identifies the practitioner who performed the procedure.
Obstruction Is a Separate Felony
The three section 1518 obstruction counts in the Mailyan indictment were an independent felony track. They depended on the allegation that Mailyan altered patient records after receiving a grand jury subpoena. Section 1518 is a stand-alone federal crime carrying five years per count. It does not depend on a conviction on the underlying fraud counts. An aesthetic practice that receives an audit letter, a UPIC inquiry, a CMS prepayment review, or a grand jury subpoena should impose a document-preservation hold and consult federal defense counsel before making any record-related decision.
Armstrong & Bradylyons PLLC: Federal Defense of Injection and Aesthetic Practices
Armstrong & Bradylyons PLLC defends physicians, medspa owners, aesthetic practice operators, nurse practitioners, and injection clinic executives in federal investigations and prosecutions involving Medicare and other federal healthcare program billing.
The firm's Medspa and Aesthetic Practice Fraud Defense and Injection and Infusion Therapy Fraud Defense practices are built on direct experience prosecuting and trying high-volume billing cases at the DOJ Fraud Section. That experience includes injection-services cases involving CPT codes for facet joint injections, transforaminal epidurals, trigger point injections, and other procedures subject to the same medical necessity scrutiny that defines Botox enforcement.
Scott Armstrong
Scott Armstrong was a leading trial attorney in the DOJ Fraud Section's Healthcare Fraud Unit, where he tried and investigated healthcare fraud cases involving over $600 million around the country.
Scott later served as an Assistant Chief in the Fraud Section's Market Integrity and Major Fraud Unit.
Scott's healthcare fraud trial experience is directly on point with the issues in Mailyan. He indicted the leading injection fraud case in the U.S. District Court for the District of Columbia and was co-lead trial counsel in a federal jury trial involving medically unnecessary facet injections in the Southern District of Texas. Both cases turned on the same medical necessity, billing, and mens rea theories at issue in Botox and aesthetic injection cases.
Scott also served as lead trial counsel in the Fraud Section's first-ever use of data analytics to convict a physician for conspiring to dispense over 2 million opioid pills. That data-driven enforcement model is the same model DOJ deployed in Mailyan.
Scott has tried sixteen complex federal cases, including nine healthcare fraud jury trials.
Drew Bradylyons
Drew Bradylyons served as Assistant Chief of the DOJ Healthcare Fraud Unit's South Florida Strike Force. He later served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney's Office for the Eastern District of Virginia.
Drew investigated and supervised cases involving more than $1 billion in fraudulent claims to Medicare, Medicaid, and TRICARE.
Combined Trial Record
Together, the firm's attorneys have tried 25 federal jury trials in complex healthcare and white-collar cases involving over $2.8 billion in alleged false claims.
The firm's broader Healthcare Fraud and AKS Defense and White-Collar Defense and Federal Trial Practice sit behind every Botox and aesthetic injection fraud matter the firm handles.
FAQs: Federal Botox and Cosmetic Injection Fraud Defense
What is a Botox fraud defense lawyer and when should a physician or medspa owner hire one?
A Botox fraud defense lawyer is a federal criminal defense attorney with experience defending physicians, medspa owners, aesthetic practice operators, and injectors in Medicare and Medicaid investigations involving CPT J0585 and CPT 64615 billing. Federal Botox fraud cases typically charge wire fraud under 18 U.S.C. section 1343, healthcare fraud under 18 U.S.C. section 1347, and increasingly, attempted obstruction of a healthcare investigation under 18 U.S.C. section 1518.
A provider should retain a federal Botox fraud defense lawyer the moment any indicator of federal interest appears. Common triggers include a UPIC audit letter, a CMS prepayment review notice, a Civil Investigative Demand from DOJ, an HHS-OIG subpoena, a grand jury subpoena, an unannounced agent interview, or a target letter from an Assistant U.S. Attorney or Fraud Section trial attorney. Engagement of defense counsel before charging decisions are made can narrow the scope of any indictment, surface clinical and coding defenses, and prevent the obstruction risk that arises when a provider responds to a subpoena without counsel.
What are CPT J0585 and CPT 64615 and why are they the focus of Medicare Botox enforcement?
CPT J0585 is the HCPCS Level II code for one unit of Botox medication. CPT 64615 is the procedure code for the injection of Botox to treat chronic migraine, defined under Medicare coverage rules as fifteen or more headache days per month with episodes lasting four hours or longer. Together, the two codes capture both the supply and the service components of a covered Botox injection claim.
Medicare Part B covers Botox under narrow medical necessity rules. Coverage for chronic migraine requires documentation that the patient meets the diagnostic threshold and that conventional therapies have failed or are otherwise inappropriate. Use of Botox to treat skin wrinkles is cosmetic and is not covered by Medicare. The narrow coverage rules and the high reimbursement per claim make J0585 and 64615 a recurring focus of CMS audits, UPIC reviews, and federal fraud investigations. The Local Coverage Determinations governing chronic migraine Botox set frequency limits and documentation requirements every aesthetic practice billing these codes is expected to follow.
What did the government have to prove on the wire fraud intent element?
The wire fraud counts under 18 U.S.C. section 1343 required the government to prove that Mailyan "acted with the intent to defraud, that is, the intent to deceive and cheat." That two-part formulation is conjunctive. The government had to prove both an intent to deceive and an intent to cheat, meaning an intent to deprive the victim of money or property. Deception alone, without the intent to obtain money or property as a result, does not satisfy the element. An intent to obtain money or property, without deceptive means, does not satisfy the element either.
In a Medicare Botox case, the defense focus is claim by claim. The government must prove the intent to deceive and cheat as to each charged wire transmission. Defense counsel evaluates whether the trial record supports both prongs of the intent element on each count, and whether the asserted misrepresentation actually deprived Medicare of money it would not otherwise have paid.
Why did the court give the deliberate ignorance instruction in Mailyan?
Judge Vera gave the deliberate ignorance instruction under the controlling Ninth Circuit standard from United States v. Heredia, 483 F.3d 913 (9th Cir. 2007) (en banc), which holds that the instruction is appropriate when "the jury could rationally find willful blindness even though it has rejected the government's evidence of actual knowledge." The same standard governs Medicare fraud cases. United States v. Hong, 938 F.3d 1040, 1046 (9th Cir. 2019).
The court found the factual predicate satisfied on both prongs of the government's case. On the chronic migraine eligibility theory, patient and primary-care-physician testimony could support an actual-knowledge finding, but a jury could also rationally find that Mailyan "didn't know because she didn't want to know," meaning that she avoided the diagnostic inquiry that would have surfaced the absence of chronic migraine. On the dates-of-service theory, a jury could find actual knowledge of false billing or could credit Mailyan's "billing mistakes" explanation while still finding that she was aware of a high probability the dates were wrong and deliberately avoided learning the truth. Under Heredia, that dual-inference possibility is sufficient to support the instruction.
Why did the court also give the good-faith instruction, and what does that instruction tell the jury?
The defense requested a separate good-faith instruction. The government opposed it, citing United States v. Hickey, 580 F.3d 922, 931 (9th Cir. 2009), for the rule that a defendant is not entitled to a separate good-faith instruction when the jury has been adequately instructed on the intent element of the offense. Judge Vera agreed that the defendant was not entitled to the instruction but exercised the court's discretion to give it. A court may give a good-faith instruction even where one is not required. United States v. Molinaro, 11 F.3d 853, 863 (9th Cir. 1993). The factual predicate was met because Mailyan testified to her own good faith, characterizing the disputed conduct as a "mistake in judgment," "error in management," or "carelessness."
The instruction told the jury that good faith is a complete defense to a charge requiring intent to defraud, that the defendant did not have to prove good faith, that an honestly held opinion or belief cannot constitute fraudulent intent even if mistaken, and that evidence of a mistake in judgment, an error in management, or carelessness cannot establish fraudulent intent. The instruction also drew the line: an honest belief that a business venture would succeed does not constitute good faith if the defendant intended to deceive others through representations she knew to be false.
What charges did the government bring against Dr. Mailyan and why did DOJ choose wire fraud over healthcare fraud?
The First Superseding Indictment charged nine counts of wire fraud under 18 U.S.C. section 1343 and three counts of attempted obstruction of a federal healthcare investigation under 18 U.S.C. section 1518. DOJ did not separately charge healthcare fraud under 18 U.S.C. section 1347.
DOJ's choice of wire fraud over healthcare fraud is strategic. Wire fraud carries a 20-year maximum per count, double the 10-year maximum for healthcare fraud. Wire fraud also permits the government to charge each individual interstate claim transmission to the CMS server in North Dakota as a separate count, generating multiple counts from a single underlying scheme. The wire fraud framework also expands forfeiture exposure under 18 U.S.C. section 981(a)(1)(C) and 28 U.S.C. section 2461(c). In Mailyan, the government secured forfeiture of a Tesla Model X, a Tesla Cybertruck, more than $251,000 in bank funds, brokerage accounts valued at $7.3 million, and four California properties with combined equity of more than $7.3 million.
What should a physician or medspa owner do upon receiving a UPIC audit, HHS-OIG subpoena, or federal target letter in a Botox fraud investigation?
Three steps follow any indicator of federal interest in a Medicare Botox or aesthetic injection billing pattern. First, retain federal criminal defense counsel before responding to the government, before producing documents, and before any provider interview. The choice of counsel at this stage shapes the entire investigation. Counsel with prior DOJ Fraud Section experience can read the analytics theory behind the inquiry and engage with the line attorney on the government's specific factual concerns.
Second, impose an immediate document-preservation hold across the practice. The Mailyan obstruction counts under 18 U.S.C. section 1518 turned on records altered after the grand jury subpoena issued. The risk of an independent obstruction felony begins the moment the provider learns of a federal investigation, and prosecutions are sometimes brought even where the underlying fraud theory fails. Third, do not give a voluntary interview to FBI or HHS-OIG agents, do not produce subpoenaed records, and do not communicate with patients about the investigation without counsel present.
Is being an outlier on Medicare Botox claims data, by itself, a federal crime?
No. Outlier status on CMS claims data is not a federal crime and is not by itself proof of fraud. Statistical deviation can reflect legitimate factors: specialty concentration, a high-acuity patient population, geographic referral patterns, telehealth-supervised injection protocols, or a clinical sub-specialty that produces above-peer volume. The Health Care Fraud Unit's Data Analytics Team uses outlier status as an investigative trigger, not as a substitute for proof of an underlying scheme.
The Mailyan case became a federal prosecution not because the defendant was an outlier — her data placed her on the radar — but because the government developed independent proof that the defendant billed for injections never provided, billed on dates she was outside the United States, billed for an incarcerated beneficiary, and fabricated patient records. The defense in any data-analytics-driven Medicare Botox or injection investigation begins with the point that outlier status alone does not establish wire fraud, healthcare fraud, or obstruction.
How does the DOJ Fraud Section's Data Analytics Team identify Botox and injection fraud targets?
The Health Care Fraud Unit's Data Analytics Team uses CMS claims data to identify statistical outliers. The team builds peer-comparison models that group providers by specialty, geography, patient panel, and procedure mix. A provider whose claim volume, reimbursement total, or procedure frequency falls far outside the peer benchmark is flagged for follow-up. The Mailyan investigation, according to the DOJ press release, began when analytics showed that Mailyan was paid more for Botox than any other physician in the United States, with reimbursements six times the next-highest group of Botox-billing providers, all of whom were neurologists.
The Health Care Fraud Data Fusion Center integrates CMS claims data with HHS-OIG investigative information, FBI intelligence, and AI-driven analytics. The fusion-center model lets the government identify outliers more quickly and with less warning to the provider. The first indication a flagged provider often has of an investigation is a UPIC audit, a prepayment review, a target letter, or an HHS-OIG subpoena for records.
What is attempted obstruction of a healthcare investigation under 18 U.S.C. section 1518, and how can it become a separate felony?
18 U.S.C. section 1518 criminalizes the willful attempt to prevent, obstruct, mislead, or delay the communication of information or records relating to a federal healthcare offense to a criminal investigator. The statute is narrower than the omnibus obstruction provisions at 18 U.S.C. section 1503 and section 1512 but specifically tailored to healthcare fraud investigations. Each violation carries a maximum of five years of imprisonment. Section 1518 reaches not only completed obstruction but also attempts, and it applies once a federal investigation is reasonably foreseeable.
The Mailyan indictment charged three section 1518 counts based on the allegation that the defendant fabricated patient medical records reflecting chronic migraine treatment for three specific beneficiaries and provided those records to HHS-OIG criminal investigators. The obstruction counts proceeded on a separate track from the wire fraud counts and added fifteen years of statutory exposure. Any aesthetic practice that receives a UPIC audit letter, a CMS prepayment review notice, an HHS-OIG subpoena, or a grand jury subpoena should impose an immediate document-preservation hold and should not alter, recreate, supplement, or back-fill medical records without involvement of federal defense counsel.
What is the sentencing exposure for a Medicare Botox or injection fraud conviction?
Each count of wire fraud under 18 U.S.C. section 1343 carries a statutory maximum of twenty years of imprisonment. Each count of attempted obstruction of a healthcare investigation under 18 U.S.C. section 1518 carries a maximum of five years. In Mailyan, the nine wire fraud counts and three obstruction counts together created a theoretical statutory maximum of 195 years. Sentencing on September 10, 2026, will be governed by the U.S. Sentencing Guidelines and 18 U.S.C. section 3553(a) factors, not the statutory maxima.
The Guidelines calculation in a Medicare Botox or injection fraud case turns largely on the loss amount under USSG section 2B1.1, with enhancements for the number of victims, the use of sophisticated means, abuse of a position of trust, and obstruction of justice. Forfeiture under 18 U.S.C. section 981(a)(1)(C) and 28 U.S.C. section 2461(c) runs in parallel with sentencing. In Mailyan, the jury found over $14.9 million in cash, brokerage accounts, real property, and luxury vehicles forfeitable as proceeds of the fraud. Defense counsel evaluates loss amount, role, acceptance of responsibility, and Guidelines departure grounds from the outset of any federal Medicare Botox defense.
What experience does Armstrong & Bradylyons PLLC bring to Botox, medspa, and injection fraud defense?
Armstrong & Bradylyons PLLC was founded by two former DOJ Fraud Section healthcare fraud prosecutors. The firm's Medspa and Aesthetic Practice Fraud Defense and Injection and Infusion Therapy Fraud Defense practices cover Botox billing, dermal filler billing, IV hydration and infusion therapy, peptide injections, and the full range of CPT codes used in aesthetic and injection-based medicine.
Scott Armstrong was a leading trial attorney in the DOJ Fraud Section's Healthcare Fraud Unit, where he tried and investigated healthcare fraud cases involving over $600 million. He later served as an Assistant Chief in the Fraud Section's Market Integrity and Major Fraud Unit. Scott indicted the leading injection fraud case in the U.S. District Court for the District of Columbia and was co-lead trial counsel in a federal jury trial involving medically unnecessary facet injections in the Southern District of Texas. He also served as lead trial counsel in the Fraud Section's first-ever use of data analytics to convict a physician for conspiring to dispense over 2 million opioid pills — the same data-driven enforcement model deployed in Mailyan. Scott has tried sixteen complex federal cases, including nine healthcare fraud jury trials.
Drew Bradylyons served as Assistant Chief of the DOJ Healthcare Fraud Unit's South Florida Strike Force and later served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney's Office for the Eastern District of Virginia. He investigated and supervised cases involving more than $1 billion in fraudulent claims to Medicare, Medicaid, and TRICARE. Together, the firm's attorneys have tried 25 federal jury trials in complex healthcare and white-collar cases involving over $2.8 billion in alleged false claims.
Facing a Federal Botox, Medspa, or Injection Fraud Investigation?
Armstrong & Bradylyons PLLC defends physicians, aesthetic medicine practitioners, medspa owners, and injection clinic executives in federal Medicare and Medicaid investigations and prosecutions nationwide.
As former DOJ Fraud Section prosecutors, Scott Armstrong and Drew Bradylyons built and tried complex healthcare fraud cases involving the same data analytics models, billing theories, and CPT code scrutiny driving cases like United States v. Mailyan. The firm provides trial-ready defense across its Medspa and Aesthetic Practice, Injection and Infusion Therapy, Healthcare Fraud and AKS, and White-Collar Defense practices.
