Judge’s Use of Red Pen to Note Humorous Points During Health Care Fraud Trial Not Plain Error; Restitution Orders Vacated for Erroneous Calculation

United States v. St. Junius, No. 11-20805 (5th Cir. Dec. 18, 2013) (Stewart, King, Prado)

Three defendants were convicted by a jury of various crimes related to their involvement in a health care fraud conspiracy.  The panel affirms their convictions.  At one point during trial, the district judge commented to the jury that he will make notes about things he finds humorous with a red pen so that he can visit with the jury after the case in the jury room about those things; all other notes he will take in black ink.  None of the defendants objected contemporaneously to these remarks.  The panel rejects the argument that the jury could look to see what color of pen the judge was using to help them determine how to interpret the evidence.  No plain error.

Ramos objected to the introduction of her personnel file on the first day of trial on the grounds that her counsel had not seen the records before and did not have sufficient time to review them.  She challenges the admission of the documents as a violation of the court’s order requiring parties to exchange exhibits seven days prior to the start of trial.  Ramos did not request discovery pursuant to Rule 16, and could not therefore challenge the admission under Rule 16.  The panel finds that the admission of the personnel file did not prejudice Ramos’s substantial rights because the Government would have sustained its burden of proof without it, noting that Ramos had equal access to it prior to trial.

The panel finds that the district court properly allowed rebuttal testimony that was relevant, was not hearsay (because not offered for the truth of the matter but rather to impeach the defendant’s credibility), and was not offered as character evidence.  The panel also defers to the district court’s decision to limit the deliberate ignorance instruction to one of the defendants whose defense at trial focused on her alleged lack of guilty knowledge. 

The panel rejects Ramos’s argument that she could not have willfully violated the Anti-Kickback Statute because she did not know that engaging in a commission-based pay arrangement with a Medicare provider violated the law.  The panel finds that the Government need only “prove that the defendant willfully committed an act that violated the Anti-Kickback Statute,” not that the defendant knew of the statute or acted with a specific intent to violate it.

The panel affirms St. Junius’s sentence, finding that it is plausible that she held a managerial role in the offense since she led others to believe she owned the business and “signed Medicare documents, signed and issued paychecks, and sent correspondence as the owner” of the business.  St. Junius also held a position of trust since she had a license to provide medical equipment for Medicare, and she abused that trust by signing documents and engaging in other activities that helped facilitate the health care fraud conspiracy.  The panel finds that Ramos and Spicer also abused positions of trust even though they did not have a fiduciary relationship with Medicare; they both transferred patients’ “means of identification” to facilitate the crime.  

The panel vacates Spicer’s and Ramos’s restitution orders, however, because they were improperly based on conduct outside of the offense for which they were convicted.  The restitution amount was based on the total amount Medicare/Medicaid paid the business based on Spicer’s and Ramos’s referrals ($794,434.08); “a figure that grossly exceeded the amount Medicare/Medicaid paid with respect to the crimes for which” they were convicted. 

Circuit Split Over Whether "Abuse of Trust" Determination Under USSG §3B1.3 Is Reviewed De Novo or Only for Clear Error

United States v. Dial, No. 07-30696 (5th Cir. Sept. 11, 2008) (per curiam) (Jones, Garwood, Smith)

The court's discussion of the issue is brief, so let's just cut-n-paste:

We review for clear error the district court’s application of § 3B1.3 to the facts, including its factual determination that Dial held a position of trust. See United States v. Smith, 203 F.3d 884, 893 (5th Cir. 2000); United States v. Ehrlich, 902 F.2d 327, 330 (5th Cir. 1990). This court recently applied de novo review to whether the defendant held a position of trust. See United States v. Kay, 513 F.3d 432, 460 (5th Cir. 2007), petition for cert. filed (Apr. 9, 2008) (No. 07-1281). The panel in Kay, 513 F.3d at 460 & n.125, relied on United States v. Sudeen, 434 F.3d 384, 391 n.19 (5th Cir. 2005), which based its statement on United States v. Hussey, 254 F.3d 428, 431 (2d Cir. 2001), after observing that the standard of review would not affect its decision.

De novo review appears foreclosed, however, by this circuit’s earlier ruling that a “district court’s application of § 3B1.3 is a sophisticated factual determination that will be affirmed unless clearly erroneous.” Despite whatever persuasiveness Kay and Sudeen may have, our rule of orderliness directs that “‘one panel of this court cannot overrule the decision of another panel.’”

The court went on to find no clear error in the application of the enhancement in Dial's case. It's unclear whether the result would have been any different under de novo review, as the opinion doesn't recount the facts of the case in great detail. In any event, it now looks like we clearly have a circuit split over the issue.