Opinion
2759/2005.
Decided on March 1, 2007.
Robert Morgenthau, District Attorney, New York County (Matthew Singer of counsel), for the People.
Robert C. Gottlieb, Esq. for defendants, Abraham Pustilnik and AAA Empire Medical Management, Inc.; Roland Riopelle, Esq. for defendant Isabella Pustilnik; Scott E. Leemon, Esq. for defendant Inna Pustilnik and University Psychological, P.C.; Francisco Napolitano, Esq. for defendant Gerardo Yanayaco; Alan Trachtman, Esq. for defendant Victor Basbus; and Isabella Kirschner, Esq. for defendant Paul Selinger.
A New York County Grand Jury returned Indictment 1063/05, charging fifteen individuals, a medical management company and five professional corporations with various crimes. This was superceded by Indictment 2759/05, a forty-four count indictment charging ten of the fifteen individuals charged in the prior indictment, the medical management company and the five professional corporations with Enterprise Corruption and related crimes, including Insurance Fraud, Grand Larceny, Money Laundering, Scheme to Defraud, Offering a False Instrument for Filing and Falsifying Business Records. The defendants jointly move to: (1) dismiss the Enterprise Corruption count pursuant to Criminal Procedure Law §§ 210.20(1)(i) and 210.40(2); (2) dismiss the Enterprise Corruption count, as to defendants Isabella Pustilnik, Inna Pustilnik, and Doctors Gerardo Yanayaco, Victor Basbus and Paul Selinger (hereinafter "Yanayaco," "Basbus" and "Selinger"), on the additional ground that the interest of justice requires dismissal pursuant to CPL § 210.40(2) and Penal Law 460.00; and (3) Abraham and Isabella Pustilnik move to strike language from the Enterprise Corruption count related to the Money Laundering charge as well as to dismiss the Money Laundering charge on the grounds the language is inflammatory, highly prejudicial, and refers to statutes which violate the Equal Protection Clause of the Federal and New York State Constitutions. All defendants also move to: (4) dismiss the Insurance Fraud and Grand Larceny counts on the ground the counts are duplicitous pursuant to CPL §§ 210.20, 210.25 and 200.30; (5) dismiss the entire indictment on the ground the People failed to present legally sufficient evidence to the Grand Jury pursuant to CPL § 210.20(b); (6) dismiss the indictment on the ground the People provided inadequate legal instructions to the Grand Jury pursuant to CPL §§ 210.20(c) and 210.35(5); (7) dismiss the indictment on the ground the Grand Jury lacked a quorum pursuant to CPL §§ 210.20(c) and 210.35; and (8) have the Court inspect and release the Grand Jury minutes to the defense pursuant to CPL §§ 210.20, 210.30 and 210.35. Individual defendants seek to: (9) sever the trials of defendants Abraham Pustilnik, Isabella Pustilnik, Inna Pustilnik and AAA Empire Medical Management, Inc. (hereinafter "AAA") from the trials of Yanayaco, Basbus and Selinger pursuant to CPL § 200.40; and all defendants seek to (10) preclude the People from introducing evidence of pretrial identifications, pursuant to CPL § 710.30(1)(b), or in the alternative, suppressing such evidence, or granting a hearing thereon; and (11) grant such other and further relief as the Court deems proper. The People oppose defendants' motions.
Some co-defendants pled guilty before the superceding indictment was filed and additional co-defendants pled guilty since it was filed.
I. ANALYSIS OF INDICTMENT
This factual statement is taken almost verbatim from Defendants' Memorandum of Law in Support of Their Omnibus Motion pages 3-5 (internal citations omitted).
The People have charged individual defendants Abraham Pustilnik, Isabella Pustilnik, Inna Pustilnik, Michael Conrad, Gerardo Yanayaco, Victor Basbus, Paul Selinger and corporate defendants AAA Empire Medical Management, Inc., Premier Medical Care, P.C., Omni Medical Care, P.C. and University Psychological Care, P.C. in an indictment with various criminal counts, including a count of Enterprise Corruption which includes allegations of numerous criminal acts. The indictment charges Abraham, Isabella, Conrad, Inna, Yanayaco, Basbus and Selinger, the medical clinic professional corporations, and the billing management company with a scheme to defraud no-fault insurance carriers that allegedly existed from October of 2002 until January of 2005.
Michael Conrad, Premier Medical Care, P.C., and Omni Medical Care, P.C. pled guilty.
In sum, the indictment charges the defendants with submitting fraudulent bills to insurance carriers to obtain reimbursement, in that the bills included claims for reimbursement for treatment and testing that was not performed; that was performed and was not medically necessary; and that was performed but was exaggerated. Many of the allegations in the indictment are based on undercover "sting" operations in which law enforcement personnel, posing as patients, came to the medical clinics and sought medical and clinical treatment; it is the People's contention that various defendants' alleged preparation and submission of records and billing materials to insurance carriers in connection with the treatment of these undercover officers was fraudulent and constituted acts of larceny, insurance fraud, offering a false instrument for filing and falsifying business records. Other allegations are based on the treatment of actual, as yet unidentified, patients and the submissions to insurance carriers seeking reimbursement allegedly undertaken by defendants.
Furthermore, the Enterprise Corruption count alleges that the defendants formed fraudulent professional corporations in that the Pustilniks paid doctors and health care providers for the use of their licenses and professional corporations to obtain reimbursement from insurance carriers, and falsely represented to the insurance carriers that the clinics and professional corporations were operated lawfully under New York State law, thus violating New York State law prohibiting the corporate practice of medicine.
Finally, allegations that the Pustilniks committed money laundering are included in the Enterprise Corruption count, as well as in individual counts of the indictment. Specifically, one count of Money Laundering in the First Degree (and a twin pattern criminal act under the enterprise corruption count) charges Abraham, Isabella and Inna with conducting financial transactions that involved the proceeds of felonious conduct with the intent to promote the carrying on of criminal conduct. The other count of Money Laundering in the First Degree (and its twin pattern criminal act) charges the Pustilniks with conducting financial transactions that involved the proceeds of felonious conduct which were designed to conceal and disguise the nature, location, source, ownership and control of these proceeds in that they concealed the Pustilniks' de facto purportedly illegal ownership of the medical professional corporations.
II. INSPECTION AND DISCLOSURE OF GRAND JURY MINUTES
The motion for an inspection of the Grand Jury minutes is granted. The Court has reviewed the Grand Jury minutes and exhibits in camera.
Defendants have not set forth compelling reasons to justify releasing the Grand Jury minutes to them. Accordingly, the motion for pretrial disclosure of the Grand Jury minutes to defendants is denied.
III. THE GRAND JURY PROCEEDING
After inspecting the Grand Jury minutes and exhibits, the Court is satisfied the proceedings were procedurally correct. There were no irregularities in fulfilling quorum and voting requirements. The Grand Jury was properly impaneled and extended. The prosecution properly instructed the Grand Jury during the proceedings, and the instructions at the conclusion of the case were also correct. The integrity of the Grand Jury was not impaired and the motion to dismiss on the ground the Grand Jury proceeding was defective is denied.
IV. LEGAL SUFFICIENCY
On a motion to dismiss an indictment for legal insufficiency, the Court may consider only whether or not the evidence is legally sufficient. Issues regarding the adequacy of the proof are the exclusive province of the Grand Jury ( see People v. Mills, 1 NY3d 269; People v. Swamp, 84 NY2d 725, 730). CPL § 70.10 (1) defines legally sufficient evidence as "[c]ompetent evidence which, if accepted as true, would establish every element of an offense charged and the defendant's commission thereof." Under this definition, legally sufficient evidence means a prima facie case not proof beyond a reasonable doubt ( see People v. Swamp, 84 NY2d at 730, citing People v. Mayo, 36 NY2d 1002, 1004). Accordingly, this Court has considered "[w]hether the evidence, viewed most favorably to the People, if unexplained and uncontradicted and deferring all questions as to the weight or quality of the evidence would warrant conviction" ( People v. Swamp, 84 NY2d at 730, citing People v. Mikuszewski, 73 NY2d 407, 411; see also People v. Jennings, 69 NY2d 103, 114-15).
Applying this standard, there was insufficient evidence to support any charge against Selinger. With regard to each remaining defendant, the evidence was factually and legally sufficient to support each count in the indictment with the exception of Counts Two and Three which improperly aggregate crimes against different victims. Therefore, defendants' motion to dismiss the indictment on the ground of legal insufficiency is denied except as to Counts Two and Three which are duplicitous, and accordingly, are dismissed, and with respect to Selinger, as to whom all charges are dismissed.
As to Selinger the evidence shows there was only a single visit by an undercover detective pretending to be a patient on a single date, August 25, 2004. The evidence reflects Selinger asked him questions, examined his jaw and prescribed physical therapy. The evidence shows Selinger never again met with him and there was no evidence in the Grand Jury he ever saw the patient's file which contained inaccurate descriptions of the patient's complaints, the type and duration of the examination Selinger performed on him and the evaluation of his condition. As distinguished from Yanayaco and Basbus, there is no evidence, direct or circumstantial, Selinger made, approved or became aware of inaccurate or exaggerated entries for this patient, nor that he had any knowledge other members of the Pustilnik Group would do so. While there was evidence crimes were committed with regard to this patient, the evidence is simply insufficient to support a charge that Selinger knowingly participated in these crimes. Accordingly, since all the charges against him are based on this event, all charges as to him are dismissed.
V. COUNT ONE — ENTERPRISE CORRUPTION
All defendants seek dismissal of the first count, charging Enterprise Corruption, on numerous grounds including that the evidence presented to the Grand Jury was legally insufficient and the interest of justice requires dismissal because the prosecution is inconsistent with the legislative findings accompanying the enactment of the statute. In addition, defendants Isabella Pustilnik, Inna Pustilnik, Yanayaco and Basbus contend the interest of justice requires dismissal of this charge as to them because their roles, even if consistent with the People's contentions, were minor, isolated acts of criminality. Abraham and Isabella Pustilnik also move to strike inflammatory language from the Enterprise Corruption count which refers to Money Laundering on the grounds the language is inflammatory and highly prejudicial and refers to statutes which violate the Equal Protection Clause of the Federal and New York State Constitutions.
Enterprise Corruption is defined as follows under Penal Law § 460.20 (1) (a). "A person is guilty of enterprise corruption when, having knowledge of the existence of a criminal enterprise and the nature of its activities, and being employed by or associated with such enterprise, he intentionally conducts or participates in the affairs of an enterprise by participating in a pattern of criminal activity."
A. Does a Criminal Enterprise exist?
Criminal enterprise means "a group of persons sharing a common purpose of engaging in criminal conduct, associated in an ascertainable structure distinct from a pattern of criminal activity, and with a continuity of existence, structure and criminal purpose beyond the scope of individual criminal incidents" (PL § 460.10; People v. Besser, 96 NY2d 136). Thus, a criminal enterprise consists of three elements: (i) a common purpose, (ii) an ascertainable structure distinct from a pattern of criminal activity, and (iii) continuity of existence, structure, and criminal purpose.
1. Common Purpose
The instant indictment accuses defendants of conducting and participating in the affairs of a criminal enterprise, referred to as the "Pustilnik Group," by participating in a pattern of criminal activity including the sixty (60) criminal acts set forth therein. The enterprise is described as including the named defendants and "others known and unknown to the Grand Jury," who shared defendants' common criminal purpose of making money. Realizing an economic benefit qualifies as a "common purpose" under the Enterprise Corruption statute ( see e.g. People v. Salzarulo, 168 Misc 2d 408 [Sup Ct, New York County 1996]; People v. Wakefield Financial Corporation, 155 Misc 2d 775 [Sup Ct, New York County 1992]). The evidence sufficiently established defendants used AAA Empire Medical Management Inc. and the five professional corporations Premier Medical Care, P.C. (hereinafter "Premier"), Omni Medical Care, P.C. (hereinafter "Omni"), Focus Acupuncture, P.C. (hereinafter "Focus"), University Psychological, P.C. (hereinafter "University") and Optimal to realize their common purpose by submitting fraudulent "no-fault" claims to several insurance carriers and the New York City Transit Authority (hereinafter "NYCTA") and obtaining reimbursements from these insurance carriers based on the fraudulent representations that the clinics were operating lawfully under New York State law; the billed services were actually provided to the patients; and the billed services were medically necessary. Various witnesses' testimony, video and audio recorded conversations, and documentary evidence established this common purpose and that it was shared by the members of the Pustilnik Group. The evidence allowed the Grand Jury to conclude each member of the Pustilnik Group engaged in a pattern of criminal activity with the common purpose of profiting by defrauding no-fault insurance companies and the NYCTA under the guise of operating legitimate medical offices. They used a variety of techniques overstating the extent of examinations, the extent of injuries, the need for treatment, billing for services not delivered, falsifying records, hiding the true ownership of medical offices and money laundering to accomplish the goal of making money. This evidence was legally sufficient to establish that all defendants shared the common purpose of engaging in criminal conduct for an economic benefit.
The Court is indebted to the Honorable Martin Marcus, one of the leading experts on the Enterprise Corruption statute for his clear, exhaustive, and compelling analysis of this area of the law in 6 Greenberg, New York Criminal Law § 36 (West's NY Prac Series 2002).
2. Ascertainable Structure Distinct From a Pattern of Criminal Activity
In order to substantiate the existence of a criminal enterprise within the meaning of PL § 460.10, it must also be proven that a group of persons was associated in an ascertainable structure distinct from a pattern of criminal activity. The evidence must show "[a] cognizable criminal enterprise that extend[s] beyond the common plan or scheme encompassing the alleged pattern acts" ( see People v. Besser, 96 NY2d at 143). The criminal enterprise must be something more than and "[d]istinct from any ad hoc association entered into for the purpose of carrying out one or more of the criminal incidents relied upon to establish its existence" ( People v. Cantarella, 160 Misc 2d 8, 14 [Sup Ct, New York County 1993]). Thus, the evidence must demonstrate "[a] system of authority beyond what is minimally necessary to effectuate individual substantive criminal offenses" ( People v. Wakefield, 155 Misc 2d at 785).
The evidence established defendants conducted the criminal activities alleged in the indictment based on the ascertainable structure of the Pustilnik Group. The Pustilnik Group had a hierarchal structure. It was comprised of Abraham and Isabella Pustilnik, who were son and mother, respectively, and the principals of AAA; Inna Pustilnik, the wife of Abraham Pustilnik and daughter-in-law of Isabella Pustilnik, who incorporated University, Doctor Michael Conrad, Doctor Stuart Press and Doctor Jonathan Liebell (hereinafter "Conrad," "Press" and "Liebell" respectively), the doctors who incorporated the four other medical clinics; other doctors and licensed healthcare providers responsible for the care and treatment of patients at the defendant clinics; and clinic managers and employees in charge of the administrative tasks and billing submissions to the insurance carriers. This structure enabled the members of the Pustilnik Group to commit the pattern of criminal activities alleged in the indictment. There were principals, managers, doctors, licensed healthcare providers and administrative members of the group with different roles, responsibilities and authority.
The evidence reveals Abraham and Isabella Pustilnik established and operated AAA to manage the affairs of the five professional corporations incorporated by Inna Pustilnik, Conrad, Press and Liebell. Abraham and Isabella Pustilnik created a sophisticated and elaborate structure to conceal their control of the clinics and to commit the criminal schemes of the Pustilnik Group. They were at the top of the structure and established, planned and directed the accomplishments of its illegal goals. Abraham and Isabella Pustilnik managed the bank accounts of each of the five professional corporations. They were the only individuals authorized to make deposits, withdrawals and transfers from each account, with the exception of University which also authorized Inna Pustilnik to make such transactions. They used AAA and multiple bank accounts to conceal their control of the clinics by funneling revenue generated from the clinics into a single account over which they had exclusive control. Of course, the Pustilniks' close family relationships helped support the structure of the Pustilnik Group. Other defendants at the middle and bottom levels of the structure furthered the Pustilnik Group's criminal purpose by carrying out the criminal plan of Abraham and Isabella Pustilnik. They falsified medical records, i.e. comprehensive medical reports, treatment notes, patient sign-in sheets and medical claims, which were submitted to insurance carriers and the NYCTA for reimbursement for "no-fault" claims. Abraham was the overall manager he ran the business and hired and fired professional employees including those who protested the illegal activities of the group. Isabella Pustilnik was the office manager at Omni and Inna Pustilnik was the manager of University. The remaining defendants, Yanayaco and Basbus were licensed doctors who were employed part-time in the professional corporations. They were the middle level the gatekeepers. Without their participation, the corrupt activities could not have occurred. Other defendants fulfilled various other roles in this structure enabling it to fulfill its illegal goals.
The Pustilnik Group engaged in a pattern of criminal activity for over two years from October 2002 to January 2005. The framework, length and continuity of the group's criminal activity further demonstrated the requisite ascertainable structure with a system of authority beyond what was minimally necessary to effectuate the individual crimes ( see People v. Cantarella, 160 Misc 2d at 14; People v. Wakefield, 155 Misc 2d at 785).
The evidence demonstrated the Pustilnik Group maintained a structure that enabled its members to repeatedly commit the pattern of criminal activity alleged in the indictment. The Pustilnik Group did not exist simply for the purpose of committing one or more of the alleged criminal acts. Nor did its existence depend on the commission of any particular criminal act or acts ( see People v. Moscatiello, 149 Misc 2d 752 [Sup Ct, New York County 1990]). The evidence established defendants formed an organization which associated in an ascertainable structure distinct from a pattern of criminal activity ( see People v. D.H. Blair Co., 2002 NY Slip OP 50152 [U] [Sup Ct, New York County, Jan. 29, 2002]).
3. Continuity of Existence, Structure, and Criminal Purpose
A criminal enterprise exists when its purpose is larger in scope than any one of the particular criminal transactions, and the continuation of the criminal enterprise does not depend for its existence upon the continuation of any particular criminal transaction ( see People v. Cantarella, 160 Misc 2d at 20). A criminal enterprise continues to exist beyond the time required to commit any individual criminal incident and is distinct from any ad hoc association entered into for the purpose of carrying out one or more of the criminal incidents ( id. at 14; see People v. Yarmy, 171 Misc 2d 13, 20 [Sup Ct, New York County 1996]). Thus, the requirement of continuity demands that the enterprise maintain an organizational pattern or system of authority that provides a mechanism for directing the group's affairs on a continuing, rather than ad hoc basis ( see People v. D.H. Blair, 2002 NY Slip OP 50152 [U]).
The criminal enterprise here did not depend for its existence upon the continuation of any particular criminal transaction, single project or defrauding of a particular insurance carrier. Defendants accomplished their goal by submitting as many fraudulent claims as possible to several different insurance carriers for reimbursement, covering numerous patients over a long time period and thus maintained the continuity of their enterprise. The evidence reflected that defendants carried out the crimes alleged in the indictment for a period of over two years and engaged in scores of criminal acts during that time. These crimes were neither ad hoc nor occasional. Rather, they were continuous, ongoing, and systematic. Defendants' frauds, larcenies and related schemes had no obvious preplanned termination date and if undetected by law enforcement would have probably continued indefinitely.
Although not all defendants were involved in every criminal act, there was a continuing structure and purpose ( see People v. Wakefield, 155 Misc 2d at 785-86). The evidence showed that the Pustilnik Group maintained an organizational pattern and system of authority that provided a mechanism for directing the group's affairs on a continuing basis. There were principals, managers, professional employees and administrative workers who were part of the corrupt organization. The structure of the criminal enterprise, including its system of authority, remained virtually unchanged over an approximately two-year period. There were no changes in managerial responsibility as Abraham Pustilnik and Isabella Pustilnik continued to manage the affairs of the five professional corporations, assisted by Inna Pustilnik at University. Moreover, many of the same doctors and licensed healthcare providers continued to be responsible for the care and treatment of patients at the clinics and the same clinic managers and many employees continued to be responsible for the administrative tasks and billing submissions to the insurance carriers, although there were some who left when they became aware of the criminal nature of what was transpiring. Nonetheless, the continuity of AAA and the five professional corporations did not depend on the participation of any specific defendant ( cf. People v. Yarmy, 171 Misc 2d at 20-21). Sufficient evidence in the Grand Jury demonstrated the continuity of the criminal enterprise even if a different member were to have replaced one of the defendants. Under these circumstances, the continuity of existence of the criminal enterprise went beyond the scope of the individual criminal incidents or its particular members.
Selinger was employed at Optimal for approximately one year.
In addition, certain crimes such as, Money Laundering, were not directly profit-making activities, but were nonetheless necessary to sustain the existence of the Pustilnik Group. These acts helped facilitate defendants' money-making criminal activity and helped conceal the criminal enterprise from outside scrutiny and thus were carried out with a criminal purpose beyond the scope of the individual criminal incidents ( see People v. D.H. Blair, 2002 NY Slip OP 50152 [U]; People v. Cantarella, 160 Misc 2d at 14). Accordingly, the evidence established the element of continuity of existence, structure and criminal purpose of the Pustilnik Group. The Court concludes therefore that the Pustilnik Group was a criminal enterprise.
B. Was there a pattern of criminal activity and did each defendant participate in a pattern of criminal activity?
PL § 460.10(4) defines a pattern of criminal activity as "conduct engaged in by persons charged in an enterprise corruption count constituting three or more criminal acts that: (a) were committed within ten years of the commencement of the criminal action; (b) are neither isolated incidents, nor so closely related and connected in point of time or circumstance of commission as to constitute a criminal offense or criminal transaction, as those terms are defined in section 40.10 of the CPL; and are either: (i) related to one another through a common scheme or plan or (ii) were committed, solicited, requested, importuned or intentionally aided by persons acting with the mental culpability required for the commission thereof and associated with or in the criminal enterprise ( see People v. Cantarella, 160 Misc 2d at 16). The statutes explicitly specifies the conduct is engaged in "by persons" charged in an enterprise corruption count. Thus, the pattern is defined by criminal conduct engaged in by the group not by the individual defendant ( id. at 14).
A person participates in a pattern of criminal activity when, with intent to participate in or advance the affairs of the criminal enterprise with which he is associated, he engages in conduct constituting or is criminally liable as an accomplice for at least three of the criminal acts included in the pattern, two of which are felonies other than conspiracy (PL § 460.20). It is not required that a defendant engage in conduct constituting a pattern of criminal activity but only in three criminal acts included in the pattern ( People v. Cantarella, 160 Misc 2d at 17). A defendant may participate in the criminal enterprise, with knowledge of its existence and of the nature of its activities, by participating in three criminal acts which are part of the pattern of criminal activity but which are nonetheless related to one another through common scheme or plan (PL § 460.10[c][i]; see People v. Cantarella, 160 Misc 2d at 17-18). Thus, a defendant associated with the enterprise, acting with the necessary knowledge and intent, who engages in three criminal acts which are part of a single criminal transaction may nonetheless be guilty of Enterprise Corruption where the transaction is itself part of the pattern of criminal activity ( People v. Cantarella, 160 Misc 2d at 18).
Here, the criminal acts alleged in the indictment satisfied the statutory requirements of timeliness, continuity and relationship, ( see PL §§ 460.10; 460.20[2]), and formed the requisite pattern of criminal activity by the Pustilnik Group. Within this pattern of criminal activity, each defendant was charged with at least three qualifying pattern criminal acts ( see PL § 460.10[a]). Moreover, the evidence permits the conclusion that each defendant was knowledgeable of the existence of the criminal enterprise and the nature of its criminal activities, and with intent to participate in or to advance the affairs of their enterprise, committed or was otherwise criminally liable for these criminal acts. The evidence supports the conclusion each defendant did so with the required mens rea.
For the foregoing reasons, Count One, Enterprise Corruption, is factually and legally sufficient.
VI. INDIVIDUAL DEFENDANT'S MOTION TO DISMISS THE
INDICTMENT OR PARTICULAR COUNTS Abraham and Isabella Pustilnik
Abraham and Isabella Pustilnik also seek dismissal of the counts charging Insurance Fraud, Grand Larceny, Offering a False Instrument for Filing and Falsifying Business Records, and the parallel pattern acts under the Enterprise Corruption count on the grounds the Grand Jury was presented with insufficient evidence to support the charges. As discussed above, the evidence before the Grand Jury was legally sufficient to establish every charge against each defendant in the indictment, with the exceptions previously stated. Accordingly, defendants' motion to dismiss the challenged counts on the ground of insufficiency is denied.
Without access to the Grand Jury minutes, Abraham and Isabella Pustilnik also challenge the sufficiency of the evidence on the ground the testimony of accomplices before the Grand Jury was not corroborated. The People contend the corroboration requirement was fully satisfied.
CPL § 190.65 states a Grand Jury may not indict a defendant for an offense if the evidence presented requires corroboration and such corroboration is absent. There must be some corroborative evidence independent of an accomplice's testimony connecting a defendant with the commission of the crime[s] charged against him or her ( see People v. D.H. Blair, 2002 NY Slip OP 50152 [U], *74-5). In this case, there was sufficient corroboration presented to the Grand Jury to satisfy this requirement, and the Grand Jury was properly instructed regarding the requirement of corroboration of accomplice testimony. Therefore, Abraham and Isabella Pustilnik's motion to dismiss the charges on this ground is denied.
VII. DISMISSAL IN THE INTEREST OF JUSTICE
Defendants seek dismissal of Count One in the interest of justice pursuant to Criminal Procedure Law § 210.40(2). Defendants claim because they have no ties to organized crime, prosecution under this statute is not "in line with the legislative intent." They further argue their alleged conduct deals with "straightforward insurance fraud" and therefore can be adequately and fairly prosecuted using traditional criminal statutes.
The legislative findings set forth in Penal Law § 460.00 establish that a criminal enterprise should not be limited to traditional criminal syndicates or crime families and may include persons who join together in a criminal enterprise for the purpose of corrupting legitimate enterprises or infiltrating and illicitly influencing industry. This is exactly what defendants are alleged to have done and what the evidence before the Grand Jury supported. The People have not charged Enterprise Corruption to prosecute relatively minor or isolated acts of criminality which, while related to an enterprise and arguably part of a pattern, can be adequately and more fairly prosecuted using traditional criminal statutes. Rather, there is evidence defendants joined together, forming the criminal enterprise, the Pustilnik Group, for the purpose of committing systematic and sophisticated frauds and larcenies against several insurance carriers. They did so under the guise of legitimate business practices. The evidence established the Pustilnik Group repeatedly stole substantial sums from insurance companies and the NYCTA over a period of over two years. The Pustilniks operated five clinics located in both Manhattan and Kings County. They employed many people in their corrupt operations and developed sophisticated banking arrangements to protect and perpetuate their criminal organization. These crimes caused harm to the public and inevitably cost citizens and businesses substantial sums of money ( see PL § 460.00). Further, these crimes took advantage of no-fault insurance carriers and the NYCTA, who in a practical sense had no option but to rely on the documents prepared and submitted to them by doctors and healthcare providers. The testimony in the Grand Jury was the carriers have a duty to pay no-fault claims and rely on the doctors and medical professionals to accurately complete the comprehensive medical reports, treatment notes and professional evaluations. Because of this, they are vulnerable to the type of organized criminal activity alleged in this indictment. Moreover, the organization and structure of the Pustilnik Group allowed it to systematically engage in these criminal activities, on a continuing basis and these illegal activities resulted in large illicit gains to the organizers perhaps in excess of one million dollars. The criminal activities were sophisticated in that they involved not simply over billing insurance companies but the corrupting of doctors and other health care professionals and the incorporation of clinics ostensibly legal entities which were part of the illegal scheme. These activities which generated large illegal gains also involved numerous bank accounts and the employment of many people at multiple locations to commit and cover up these crimes. While some defendants had more limited gains in the form of salaries, they were nonetheless participating in the crimes of the Pustilnik Group. Without their involvement the corrupt activities could not have taken place. These crimes were neither minor nor isolated acts. Further, the skillful insulation of the group's criminal activities protected defendants from detection and prosecution and enabled the Pustilnik Group to exist for over two years. The Pustilnik Group therefore constitutes an organized, structured, and on-going criminal enterprise that the legislation was enacted to proscribe. Accordingly, dismissal of the Enterprise Corruption count is unwarranted and contrary to the interest of justice in this case.
VIII. INDIVIDUAL DEFENDANT'S MOTION TO DISMISS THE ENTERPRISE CORRUPTION COUNT IN THE INTEREST OF JUSTICE
Defendants Isabella Pustilnik, Inna Pustilnik, Yanayaco and Basbus move to dismiss the Enterprise Corruption count against them in the interest of justice, on the additional basis their roles in the purported criminal enterprise were relatively minor or isolated acts of criminality. Their claims are discussed below.
Isabella Pustilnik
Isabella Pustilnik claims there is insufficient evidence to support her involvement in the purported criminal enterprise. She argues with the exception of her tax returns and bank signature cards, nothing links her to any of the crimes with which she has been charged. She claims
she did not play any part in the clinic's billing or claims submission processes; she did not deal directly with the insurance carriers who were the purported victims of the fraud; she rarely dealt with the physicians who allegedly participated in the fraud, and never dealt with the patients whose treatment was purportedly fraudulent; she had no role in invoicing and did not prepare or review bills that were submitted to the insurance companies (Defendants' Memo at 14-15).
She alleges that her "role, if any, in the corrupt enterprise' was minor, and her connection to the alleged pattern of criminal activity in this case was, at best, intermittent and limited" (Defendants' Memo at 15).
Contrary to Isabella Pustilnik's argument, the Grand jury was presented with evidence that she was a leader of, and essential participant in, the management of the Pustilnik Group, and that she benefitted from the proceeds of the criminal schemes of the Pustilnik Group for years. In particular, there was evidence Abraham and Isabella Pustilnik owned, operated and controlled all of the professional corporations. Isabella Pustilnik claimed to be the clinic manager of Omni and 50% owner of AAA on financial documents. She was at Omni approximately four days a week and served as the manager. Moreover, the evidence established Abraham and Isabella Pustilnik used AAA to conceal their control of the clinics and to launder proceeds of their criminal schemes into a single bank account controlled exclusively by them. Isabella Pustilnik's name appeared on the bank signatory card and incorporation papers for AAA. Her name also appeared on the bank signatory cards for Omni and Optimal. In addition, not only was she authorized to sign checks and make deposits for AAA, she possessed and used corporate credit cards on a regular basis to make both business and personal purchases. She received bi-weekly pay checks and regular cash advances and bonuses from the corporations. Isabella Pustilnik was an integral participant in the ongoing, systematic criminal schemes of the Pustilnik Group. In this regard, it can not be said that Isabella Pustilnik played such a minor role in the criminal enterprise that dismissal in the interest of justice is warranted.
Inna Pustilnik
Inna Pustilnik alleges her role in the Pustilnik Group was relatively minor and the charge should be dismissed in the interest of justice. To support her claim, she emphasizes she is only charged with seven criminal acts in a forty-four count indictment and that these charges narrowly involve her practice as a licensed psychologist and her ownership of University. Further she says that the focal point of the alleged scheme involves one of the other professional entities charged in the indictment, in which she has no ownership interest. While Inna Pustilnik asserts her role in the criminal enterprise was relatively minor, the evidence in the Grand Jury established she was also an essential participant in the criminal enterprise and benefitted from the proceeds of its schemes for years. Inna Pustilnik, through University and those working for her, regularly prepared and submitted fraudulent bills to various insurance carriers and obtained reimbursement from the insurance carriers based on the fraudulent representations that the medical services were actually provided and medically necessary when they were not. Moreover, she received a bi-weekly check and regular cash advances and bonuses from the corporations and used corporate credit cards to make business and personal purchases. Such activity is neither minor nor isolated. Additionally, the fact she is charged in only seven criminal acts does not render her role minor or isolated. The evidence reflects that Inna Pustilnik was aware of and actively participated in the ongoing, systematic frauds and larcenies of the Pustilnik Group. For example, there was evidence presented to the Grand Jury, she submitted or caused to be submitted fraudulent bills for psychological testing of an undercover officer on several different dates when no such testing or treatment occurred. There was evidence of her similar conduct regarding "Allstate Claimant No. 2." Accordingly, this Court is not persuaded that a dismissal of the Enterprise Corruption count against her is warranted in the interest of justice.
Yanayaco and Basbus
Yanayaco and Basbus also argue their role in the Pustilnik Group was relatively minor and the charges against them should be dismissed in the interest of justice. Each of these defendants, makes essentially the same argument. In substance they claim that as part-time employees of the medical clinics, they had no ownership or proprietary interest in any of the clinics; they had no supervisory authority over the staff in the clinics; they had no involvement in the administrative duties of the clinics including the preparation and submission of bills to the insurance carriers; and they each followed traditional acceptable practices in the treatment of patients.
The evidence belies these claims. It established these defendants knowingly participated in and advanced the fraudulent schemes of the Pustilnik Group while also benefitting from the proceeds of its criminal schemes. The evidence in the Grand Jury supports the conclusion these defendants each falsified or knowingly let other participants falsify on their behalf, comprehensive medical reports, treatment notes and professional evaluations and recommended unnecessary treatment with the intent to assist other members of the Pustilnik Group to prepare and submit fraudulent claims to various insurance carriers and thus enable the Pustilnik Group to obtain reimbursement from the insurance carriers based on the fraudulent representations that the services were actually provided and medically necessary. Without the active participation of these doctors, the schemes could not have succeeded. While there can be legitimate professional differences about whether or not a particular diagnostic test or course of treatment was appropriate or necessary, there can not be any debate it is illegal to falsify patient records for the purpose of enabling the criminal enterprise to make illegal profits that is to state a patient complained of a particular symptom when no such claim was made, or if a complaint was made to greatly exaggerate the complaint and the symptoms. This is what these defendants did. Further, it was clear that in many instances there was simply no basis to direct the treatment done by the defendants because no medical problems existed. While as defendants contend expert testimony might be required to prove certain medical conditions did not exist, or whether or not a particular test or treatment was appropriate, there was sufficient evidence presented in the Grand Jury to substantiate the claims that in many instances there was simply no basis for the treatment ordered by the defendants. In effect, they were the gatekeepers for this scheme. It was their false evaluation and exaggeration of the patients' complaints, medical conditions, histories and the extent of their physical examinations which enabled other defendants to perpetuate multiple crimes over a multi-year period. The evidence in the Grand Jury showed that other health care professionals in the Pustilnik's employ refused to go along with these illegal activities and either resigned or were terminated. These defendants did not have the same reservations about participating in these crimes.
For example, Yanayaco prepared a comprehensive medical report, dated December 12, 2003, in which he exaggerates and falsely details the symptomology, physical examination and medical evaluation of Nathaniel Lewis (hereinafter "Lewis"), an undercover investigator posing as a patient, he evaluated on November 26, 2003. In pertinent part, his report reads:
Complaints and Symptomology: The patient is complaining of severe lower back pain 2-4/10. Pain is reported to be constant and walking or movement sharpens the pain sensation. The patient indicates present complaints interfere with his ability to perform daily functions: walking, bending, reaching, turning, etc. The patient denies any previous complaints prior to this accident.
Physical Medicine Evaluation: Examination of the lumbar spine reveals tender deep paraspinals musculature on the left with tenderness in the midline overlying the entire range. Pain was severely aggravated during muscle testing of the lumbar spine upon flexion and extension. Additional spasm overlying the sacroiliac joints is noted. Straight leg raising is positive for local back pain at 60 degrees on the right. Straight leg raising is positive for local back pain at 60 degrees on the left. There is pain radiating into the lower extremities.
Although Yanayaco said in his comprehensive medical report he examined Lewis and his lumbar spine, Lewis testified Yanayaco never physically examined him on that date. A video and audiotape of the alleged examination establishes Yanayaco did not physically examine Lewis. The evidence further shows Yanayaco billed the NYCTA $80.02 for this examination which did not occur. He did examine Lewis on another date for which he also billed. Even then, he greatly exaggerated Lewis' complaints. He said Lewis was experiencing severe back pain. However Lewis testified, and the video and audiotape confirm, he never told Yanayaco he had severe back pain or that the pain interfered with his ability to perform daily functions. The evidence establishes Lewis told Yanayaco, among other things, his shoulder was sore from exercising and that since the accident, perhaps his back hurt a little bit certainly not the severe pain described by Yanayaco.
Another example involved Basbus, who prepared a neurological medical report dated January 19, 2004, in which he claimed to have examined Geico Claimant #1 on January 12, 2004. In pertinent part, the report reads as follows:
Clinical Findings and Diagnostic Recommendations:
During neurological evaluation, it was found that muscle strength testing reveals weakness during shoulder abduction which is 3/5 on the left. Examination of the left shoulder also revealed tenderness and pain on palpation. The biceps, deltoids and triceps muscles are 3/5 on the left. There is trapezius muscle tenderness and weakness which is 3/5 on the left. Weakness during hip flexion. Weakness during leg extension. The hamstrings and quadriceps demonstrate weakness. There is pain on palpation and decreased range of motion of the paravertebral muscles of the cervical and lumbosacral regions. Reflexes are 3/5 bilaterally in the biceps, brachioradialis and triceps. Knee jerks are 3/5 bilaterally and ankle jerks were 3/5 bilaterally with bilateral flexor Babinskis. There is pain radiating into the upper and lower extremities. There is apparent sensory deficit in the upper and lower extremities. There are trigger points located in the cervical and lumbosacral region. There was a limitation in the range of motion due to pain mainly for flexion which was limited at 60 degrees. There was lumbar spine tenderness. There is a positive (Lasegue) straight leg raising on the right at 40 degrees.
The SSEP of the lower extremities was ordered to evaluate the patient's symptoms of lower back pain radiating into the right leg with pain in both legs and to rule out peripheral nerve entrapment or peripheral neuropathy.
While Basbus claimed he evaluated Geico Claimant #1, the evidence before the Grand Jury contradicts this claim. Geico Claimant #1 testified she never saw and was never treated by Basbus. The witness also testified she only received neurological testing on a single date and the testing was not done by Basbus. Nevertheless, Basbus submitted the neurological report to Geico Insurance Company claiming reimbursements for neurological services rendered during the examination. In addition, Babus submitted bills dated January 29, 2004, February 2, 2004, February 12, 2004 and February 16, 2004 with supporting documentation from Premier to Geico claiming reimbursements for further neurological services, which were not provided.
Assuming the allegations are true, the allegations against these defendants are serious. They involve their participating in systematic, ongoing crimes against no-fault insurance carriers and the NYCTA. If true, these defendants took advantage of their professional status to enable others to help perpetuate crimes against the no-fault insurance providers. In this regard, it can not be said that they played such a minor role in the criminal enterprise that dismissal in the interest of justice is warranted. Indeed, the evidence supports the conclusion these defendants were essential participants in the enterprise and dismissal of the Enterprise Corruption count against them is unwarranted and contrary to the interests of justice.
IX. ABRAHAM AND ISABELLA PUSTILNIK'S MOTION TO STRIKE LANGUAGE FROM THE ENTERPRISE CORRUPTION COUNT AND TO DISMISS THE CHARGE OF MONEY LAUNDERING IN THE FIRST DEGREEAbraham and Isabella Pustilnik move to strike language from the Enterprise Corruption count which alleges they unlawfully operated, controlled and owned the professional corporations and attempted to conceal their ownership and control by paying doctors and other healthcare providers for use of their medical licenses and professional corporations to facilitate the Pustilnik Group's crimes. These defendants challenge the indictment language on two separate grounds. First, that the language serves no purpose other than to inflame and unduly prejudice the jury, and is unnecessary to establish the alleged criminal enterprise. Second, on constitutional grounds, that "the laws which make unlawful the ownership of professional corporation [sic] by individuals without professional licenses to practice the profession in which the corporation is engaged violate the rights of such non-licensed individuals under the Equal Protection Clauses of the United States and New York State Constitutions" and are therefore unconstitutional (Defendants' Memo at 23). For the same reasons, Abraham, Isabella and Inna Pustilnik move to dismiss the related money laundering charges and pattern acts.
Defendants fail to identify any controlling New York case law which supports this motion to strike surplusage, and they acknowledge there is no expressed authority to do so. The People contend the challenged language is relevant to identify and describe the criminal enterprise involved and the context in which defendants organized and operated the Pustilnik Group.
In reviewing federal law discussing this issue, it is apparent the standard to strike language as surplusage is exacting and rarely is alleged surplusage stricken from indictments ( U.S. v. DePalma, 461 F.Supp. 778, 797 [SDNY 1978]). Federal courts only grant a motion to strike surplusage "where it is clear that the allegations are not relevant to the crime charged and are inflammatory and prejudicial" in nature ( id. at 797; see also U.S. v. Sciandra, 529 F.Supp. 320, 322 [SDNY 1982]; U.S. v. Napolitano, 552 F.Supp. 465, 480 [SDNY 1982]). The determinative question however, is not the potential prejudice that may arise but rather the relevance of the allegation to the crime charged in the indictment ( see U.S. v. Napolitano, 552 F.Supp. at 480). Therefore, "if the evidence of the allegation is admissible and relevant to the charge, then regardless of how prejudicial the language is, it may not be stricken" ( U.S. v. DePalma, 461 F.Supp. 778, 797 [SDNY 1978]).
While not controlling, the Federal cases are instructive. It appears the challenged language can scarcely be considered surplusage ( see id.). The Enterprise Corruption count in the indictment requires the People to prove a criminal enterprise existed and that defendants participated in or advanced its affairs. References to the Pustilniks' ownership and control of the professional corporations serve to identify the enterprise and the means by which its members and associates conducted various criminal activities. Moreover, rather than mislead or confuse a jury, this information clarifies defendants' involvement in the criminal enterprise. This evidence is relevant to prove the charges in the indictment, and defendants' motion based on this ground is denied.
Equal Protection
Abraham and Isabella Pustilnik further claim the language alleging they unlawfully owned, operated and controlled the medical professional corporations in contravention of New York State statutes should be stricken from the indictment on both Federal and State constitutional grounds. Specifically, they challenge the constitutionality of the New York State statutes governing the corporate practice of medicine, arguing the statutes violate their equal protection rights under the Federal and State constitutions (US Const Amend XIV; NY Const, art I § 11). The statutes challenged by these defendants require professional health service corporations to be owned and controlled by individuals who are licensed to practice medicine ( see New York Business Corporations Law §§ 1503-1509, 1511). The rationale behind this prohibition is "when a professional health services corporation is owned by an unlicensed individual, there is a danger that a doctor, knowing that he [or she] had to split his [or her] fees with one who did not render medical services, might be hesitant to provide proper services to a patient. Conversely, unneeded treatment might be rendered" ( State Farm Mutual Automobile Insurance Co. v. Mallela, 175 F.Supp.2d 401, 414 [EDNY 2001] [internal citations omitted]).
There is no doubt the state has a strong interest in protecting the health and safety of its citizens. Moreover, defendants concede there is a legitimate state interest in protecting consumers of health care services and discouraging abuse and fraud in medical billing. They assert, however, these statutes violate the Equal Protection Clause by creating a distinction between doctors and non-doctors. Defendants claim this distinction is arbitrary and bears no rational relationship to the state's legitimate interests.
"The Equal Protection Clause does not mandate absolute equality of treatment but merely prescribes that, absent a fundamental interest or suspect classification, a legislative classification be rationally related to a legitimate state purpose" ( People v. Walker, 81 NY2d 661, 668; quoting People v. Parker, 41 NY2d 21, 25. "As there is neither a suspect class nor a fundamental right at issue here, the statute need only be supported by some rational basis to survive constitutional scrutiny" ( People v. Walker, 81 NY2d 668)."In applying the rational basis test, [courts often] defer to the legislature, which is presumed to know all the facts supporting a statute's constitutionality a presumption which must be rebutted beyond a reasonable doubt" ( id. at 668). A statute is constitutional if rationally related to any conceivable legitimate state purpose ( id.). "Moreover, the Equal Protection Clause does not prevent state legislatures from drawing lines that treat one class of individuals or entities different from others unless the difference in treatment is palpably arbitrary' or amounts to an invidious discrimination'" ( Port Jefferson Health Care Facility v. Wing, 94 NY2d 284, 290; quoting Lehnhausen v. Lake Shore Auto Parts Co., 410 US 356, 360).
Defendants' argument fails because the distinction between doctors and non-doctors is rational. It is not "palpably arbitrary" or amounting to an "invidious discrimination." There is a rational relationship between the disparity and a legitimate governmental purpose in protecting the public from the commercial exploitation of the practice of medicine. Abraham and Isabella Pustilnik fail to establish a violation of the Equal Protection Clause of the Federal or New York State Constitutions. Accordingly, defendants' motion to strike language referring to their alleged unlawful ownership, operation and control of the medical professional corporations on this ground is denied.
MONEY LAUNDERING AND RELATED PATTERN ACTS
On the same grounds, Abraham, Isabella and Inna Pustilnik also move to dismiss the related money laundering charges and pattern acts against them. They argue the New York State statues making unlawful their alleged ownership, operation and control of the professional corporations are unconstitutional because they create a distinction between doctors and non-doctors. As discussed supra, there is a rational relationship between the disparity and a legitimate governmental purpose in protecting the public from the commercial exploitation of the practice of medicine. The Pustilniks fail to establish a violation of the Equal Protection Clause of the Federal or New York State Constitutions. For the reasons set forth above, these defendants' motion to dismiss the money laundering charges and related acts is denied.
X. MOTION TO PRECLUDE IDENTIFICATION EVIDENCE
Defendants seek preclusion of identification evidence on the ground the People provided insufficient notice pursuant to CPL § 710.30(1)(b). Defendants claim the People omitted the names of the identifying witnesses and the manner in which the identification procedure was conducted, and therefore failed to comply with the statute. The Court disagrees.
CPL § 710.30 requires the People to serve the defense with notice of the People's intent to offer at trial, identification evidence of a witness who has previously identified the defendant. The failure of the People to comply with this statute requires preclusion of the witness' identification unless the People demonstrate good cause for their failure or the defense moves for suppression despite the lack of proper notice (see CPL § 710.30, [3]; see People v. O'Doherty, 70 NY2d 479).
The "central purpose" of the notice provisions of CPL § 710.30 is to provide a defendant with an adequate opportunity to challenge the admissibility of any pre-trial identifications of the defendant ( see People v. O'Doherty, 70 NY2d at 488). Here, the People have provided defendants with the date, location, number of witnesses involved in the procedure and which defendants were identified. In examining the notice provided to defendants, the Court finds it was sufficient to permit defendants to adequately challenge the admissibility of the pre-trial identifications. Accordingly, defendants' motion to preclude such evidence is denied.
XI. MOTION TO SUPPRESS IDENTIFICATION EVIDENCE
In the alternative, defendants move to suppress identification evidence on the ground the identification procedures were unduly suggestive or to have a Wade hearing ( United States v. Wade, 388 US 218). The People oppose the request for a hearing, and assert the identifications of defendants were confirmatory and were not the product of any police-arranged procedures because photographs of defendants were simply shown to the witnesses to assist them in testifying before the Grand Jury.
The People further contend there is no possibility the identifications could have been unduly suggestive as the identifying witnesses had prior relationships with defendants. However, defendants do not concede they are familiar with or have had any prior relationships with any of the identifying witnesses. Therefore, a hearing is granted to determine whether the witnesses knew defendants prior to the identification in this case ( see People v. Rodriguez, 79 NY2d 445). If at that hearing it is determined the witnesses had insufficient familiarity with defendants prior to the identification, the hearing will be expanded to determine the propriety of the identification made ( see People v. Rodriguez, 79 NY2d 445; People v. Williamson, 79 NY2d 799), and whether the display of the photograph book was investigatory or used in preparation for the Grand Jury ( see People v. Herner, 85 NY2d 877; People v. Williams, 8 AD3d 74 [1st Dept 2004]; People v. Hopkins, 284 AD2d 223 [1st Dept 2001]).
XII. DUPLICITY
Defendants move to dismiss Count Two, charging Insurance Fraud in the First Degree and Counts Six, Twenty and Thirty-Four, charging Insurance Fraud in the Third Degree, and Count Three, charging Grand Larceny in the First Degree and Counts Seven, Twenty-One and Thirty-Five, charging Grand Larceny in the Third Degree, on the ground that the counts are duplicitous, pursuant to CPL §§ 210.20, 210.25 and 200.30. Defendants claim "Counts Two and Three are duplicitous because they each impermissibly charge in a single count a multitude of offenses that purport to inflict harm on a number of different victims" (Defendants' Memo at 42). Defendants further assert the remaining Insurance Fraud and Larceny Counts are duplicitous because they impermissibly aggregate multiple takings into a single count of fraud or larceny. Each of these challenged counts relates to crimes against a specific victim, but aggregates multiple takings into a single count.
A count is duplicitous when more than one offense is contained in a single count ( People v. First Meridian Planning Corporations et. al., 86 NY2d 608; see also People v. Keindl, 68 NY2d 410). CPL § 200.30 prohibits duplicitous counts in an indictment because of the danger that a jury may vote to convict on a count without having reached a unanimous verdict on the charges pleaded therein, and because it may undermine a subsequent double jeopardy defense ( see People v. First Meridian Planning Corporations et. al., 86 NY2d 608; see also People v. Keindl, 68 NY2d 410). Therefore, where an offense is made out by the commission of one act, that act must be the only offense alleged in that count of the indictment ( People v. Keindl, 68 NY2d at 417). Where, however, a crime by its nature as defined in the Penal Law may be committed either by one act or by multiple acts and can be characterized as a continuing offense over time, the indictment may charge the continuing offense in a single count ( People v. First Meridian Planning Corporations et. al., 86 NY2d at 615-6).
The crime of Insurance Fraud, charged in Counts Two, Six, Twenty and Thirty-Four of the indictment, by its very nature requires proof of multiple acts and requires characterization as a continuing offense committed over time (see id.). As defined in PL § 176.05, a person commits Insurance Fraud upon the filing of a false "written statement as part of, or in support of, . . . a [fraudulent insurance] claim for payment" ( see also People v. Aksoy, 84 NY2d 912, 914). "A written statement within the meaning of the statute may consist of one materially false or misleading document or multiple documents collectively submitted to the insurer to advance a single fraudulent claim" (see PL § 176.00; People v. Aksoy, 84 NY2d at 914). Thus, the plain language of the statute does not necessarily contemplate the performance of a single act to advance the fraudulent scheme but rather contemplates the continuity of the conduct through multiple acts. Here, the evidence reflects there were multiple acts committed over time in furtherance of the commission of an overall criminal plan, the essence of which was submitting fraudulent claims to as many insurance carriers as possible ( People v. Aksoy, 84 NY2d at 915; see also First Meridian Planning Corporations et. al., 86 NY2d 608). Just as in the analysis of multiple larcenies, infra., multiple acts of insurance fraud against the same victim, committed as part of a common scheme or plan can also be aggregated, even if committed over time. However, just as in the larceny analysis, if there are different victims, the charge can not be aggregated without also being duplicitous. Therefore, Count Two and its corresponding predicate act are dismissed, while the motion to dismiss Counts Six, Twenty and Thirty-Four are denied.
Regarding the counts charging Larceny, Count Three must be dismissed along with its corresponding predicate act because it improperly aggregates thefts from multiple victims and is duplicitous. Counts Seven, Twenty-One and Thirty-Five, charging various degrees of Grand Larceny each against the same victim, are not duplicitous and as to them, the motion to dismiss is denied. Separate and unrelated thefts from different persons cannot be combined to form Grand Larceny ( see People v. Thiel, 26 AD2d 897 [4th Dept. 1966]). However, if the larceny is committed pursuant to a single intent and common plan ( see People v. Cox, 286 NY 137), successive takings from the same victim can be considered one offense and the value of the takings aggregated to constitute a single charge of Grand Larceny ( see People v. Rossi, 5 NY2d 396). People v. Buckley, 75 NY2d 843, which the People cite as authority for aggregating separate larcenies from different victims if done pursuant to a common scheme or plan, does not stand for this proposition. It dealt with a different crime, Criminal Possession of Stolen Property, a crime which the Court stated differs from larceny because it is committed at the time of the possession not at the time of taking, as in larceny. Rather, larcenies from different victims can not be aggregated into a single count ( see People v. Perlstein, 97 AD2d 482 [2nd Dept 1983]) unless the takings occurred at the same time or place, which did not occur here.
In People v. Gbohou, 186 Misc 2d 324 (Sup Ct, Bronx County 2000, Benitez, J.), the Court denied a motion to dismiss where the People aggregated into a single count larcenies from two different victims at different but related times. The victims were husband and wife and the larcenies were committed pursuant to a common scheme or plan to steal from their respective bank accounts. Each account was held in trust for the other. The Court, recognizing the uniqueness of the factual situations, treated the two victims as a single victim. Because the defendants were acquitted at trial, Gbohou was not appealed.
XIII. SEVERANCE
Defendants Abraham and Isabella Pustilnik seek to sever their trials from defendants Yanayaco and Basbus. Defendants Yanayaco and Basbus seek a separate trial from defendants Abraham Pustilnik, Isabella Pustilnik and Inna Pustilnik. Essentially, the management defendants seeks a severance from the doctors and vice a versa. Each defendant alleges he or she will be prejudiced by a joint trial based on the antagonistic defenses of his or her co-defendants.
A motion for severance is addressed to the sound discretion of the court, and the court may exercise its discretion to sever defendants, as the interest of justice requires, to avoid undue prejudice at a joint trial (CPL § 200.40; People v. Owens, 22 NY2d 93). A defendant seeking severance, however, has the burden of overcoming a strong public policy that favors joinder, which expedites the judicial process, reduces court congestion, and avoids the necessity of recalling witnesses ( People v. Mahboubian, 74 NY2d 174, 183-184), a factor particularly compelling in a case such as this which is anticipated to take between one and two months to try. Where the same evidence constitutes the proof against the defendants, only the most cogent reasons warrant a severance ( id. at 183; People v. Bornholdt, 33 NY2d 75, 87).
Abraham and Isabella Pustilnik
Abraham and Isabella Pustilnik move to be tried separately from Yanayaco and Basbus on the ground their defense will be directly antagonistic to the defense asserted by the other defendants and will result in undue prejudice to all defendants. Their core defense involves a complete denial of any participation in submitting fraudulent claims to the insurance carriers, up coding, billing the insurance carriers for claims that were medically unnecessary and billing the insurance carriers for procedures, tests and clinic visits that did not take place. Abraham and Isabella Pustilnik further contend that "it was the medical staff and clinical personnel, including Yanayaco, Basbus and Selinger who prepared false and fraudulent medical records, bills and requests for reimbursements from insurance carriers, and that [these defendants] did so without [their] knowledge or approval" (Defendants' Memo at 91).
Yanayaco and Basbus
Yanayaco and Basbus each seek to sever their trials from Abraham, Isabella and Inna Pustilnik. Like the other defendants, they also deny any involvement in the criminal conduct alleged in the indictment. They contend they were unaware of and played no role in the fraudulent activity at the clinic. Further Yanayaco and Basbus argue their role in the alleged criminal enterprise was limited in that they did not establish or operate the clinics; they did not handle the administrative tasks of the clinics; and they did not oversee billing submissions to the insurance carriers. They further assert part of their defense will be to accuse the Pustilniks of forging their names on bills, medical reports and checks deposited into the management bank account.
Additionally, Yanayaco and Basbus claim a joint trial will unduly prejudice them because in determining each of their roles in the criminal enterprise, a jury is likely to also consider against them evidence of crimes committed solely by the managerial defendants. Antagonistic Defense
In People v. Mahboubian, 74 NY2d 174, the Court established the controlling law when a request for severance is based on anticipated antagonistic defenses. The standard for determining whether defenses are so antagonistic as to require severance is that "severance is compelled where the core of each defense is in irreconcilable conflict with the other and where there is a significant danger, as both defenses are portrayed to the trial court, that the conflict alone would lead the jury to infer defendant's guilt ( see People v. Mahboubian, 74 NY2d at 184). However, contrary to defendants' assertions, this is not the case here.
The core defenses here are not "in irreconcilable conflict." Each defendant denies committing the criminal conduct alleged in the indictment. Rather than being antagonistic, each core defense is similar each defendant seeking severance denies committing any crime. For severance to be granted, "[t]he essence or core of the defenses must be in conflict, such that the jury, in order to believe the core of one defense, must necessarily disbelieve the core of the other" ( id. at 184). Such an irreconcilable conflict does not exist here.
Defendants further argue a "melee of finger pointing" is enough to establish there is an irreconcilable conflict among the defenses. Contrary to defendants' claim, different trial strategies or theories may be objectionable to another defendant, but that alone does not outweigh the factors favoring joinder of defendants ( People v. Mahboubian, 74 NY2d at 183-184). Mere hostility between a defendant and a co-defendant, differences in trial strategies, or inconsistencies in their defenses will not, without more, require severance ( id.). Moreover, even if their allegations were sufficient to establish that one or more defendant's defense is irreconcilable with that of the co-defendants, defendants fail to establish there is a significant danger that this conflict alone would lead the jury to infer their guilt ( see People v. Cardwell, 78 NY2d 996, 997-998); People v. Mahboubian, 74 NY2d at 184-185; People v. Abreu, 219 AD2d 513 (1st Dept [1995]). Defendants claim other co-defendants are responsible for any criminality which took place. Thus, the core of each defendant's defense is a denial of their own criminality. Given this consistent core defense, defendants fail to demonstrate the alleged conflict alone would lead the jury to accept one defense and can concomitantly reject another ( see People v. Figueroa, 193 AD2d 452 [1st Dept. 1993]). Defendants' claims might have been more compelling if all the other defendants were still part of the case. However, since they are not, and those defendants who pled guilty were responsible for some of the administrative matters associated with the charges in this case, much of the blame will undoubtedly fall on them. Thus, a jury will not have to accept one group of defendants' version and concomitantly reject the other. There will be no "forced choice." Accordingly, for all these reasons, defendants' severance motion on the ground of irreconcilable conflict is denied at this time.
Undue Prejudice
Yanayaco and Basbus claim they will be prejudiced because in determining their guilt or innocence, the jury may consider the evidence of more than one criminal act alleged to have been committed by the managerial defendants but not to have been committed by them. They further allege that because their role in the alleged criminal enterprise was relatively minor, a joint trial will prejudice them and severance is required.
These defendants have not demonstrated why there is anything about a joint trial in this case which would create a likelihood that the jury would not be able to separately consider the proof as it relates to each defendant (CPL § 200.40 [d] [iii]). The Court believes a jury would have no difficulty assessing each defendant's guilt or non-guilt. Moreover, even at a separate trial evidence of the managerial defendants' criminal acts would be admissible to prove the existence and nature of the criminal enterprise and its members. This is not a situation where greater evidence against one defendant would prejudice another defendant. Indeed, much of the People's evidence will apply to all the defendants in that they are all charged with Enterprise Corruption. For all the above reasons, severance of Yanayaco and Basbus' trial from the Pustilniks' trial on the ground of undue prejudice is denied.
However, each defendant has leave to renew his or her application for severance at any time, including during the trial should the trial evidence warrant a severance.
XIV. CONCLUSION
For the foregoing reasons, defendants' motion to dismiss the indictment is denied except as to Selinger as to whom it is granted. The motion to strike language in the Enterprise Corruption count and dismiss the Money Laundering count is denied. Defendants' motion to preclude identification evidence is denied. Defendants' motion to dismiss Count Two and Count Three is granted, but denied as to the remaining Insurance Fraud and Grand Larceny counts. Defendants' motions for severance is denied with leave to renew. A Rodriguez hearing for all defendants is granted. This constitutes the decision and order of the court.