Opinion
S3 98 Cr. 1238 (SAS)
November 3, 2000
Robert R. Strang, Jonathan Halpern, Assistant United States Attorneys New York, NY, Attorneys for the United States of America.
Valerie S. Amsterdam, Esq., Amsterdam Branden, New York, N.Y. Attorney for Jose Hernandez.
Jeremy F. Orden, Esq., Bernard V. Kleinman, Esq., New York, N.Y. Attorney for Lydia Martinez.
OPINION AND ORDER
On August 2, 2000, following a seven-week trial, Alan Barton Nachamie, Edwin Tunick, Lydia Martinez and Jose Hernandez were convicted of various offenses relating to their participation in a health care fraud conspiracy. Hernandez now moves for a judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29, while Martinez moves for a new trial pursuant to Federal Rule of Criminal Procedure 33 or to arrest judgment pursuant to Fed.R.Crim.P. 34. For the reasons set forth below, defendants' motions are denied.
I. BACKGROUND
The indictment charged each defendant with one count of conspiring to violate federal law, in violation of 18 U.S.C. § 371. The indictment alleged that the conspiracy had the following six objects: (1) executing a scheme to defraud the Medicare program; (2) mailing various documents in furtherance of the scheme; (3) making false statements in connection with the delivery of and payment for health care benefits; (4) making false statements in order to obtain payments from private insurance carriers that administered the Medicare Program; (5) presenting false claims to the Medicare program; and (6) soliciting or receiving kickbacks for ordering and arranging for a medical laboratory to perform tests that were to be billed to Medicare. In addition, the indictment charged each defendant with one count of health care fraud, in violation of 18 U.S.C. § 1347 and 2, and one count of covering up a material fact or making false statements, in violation of 18 U.S.C. § 1035(a)(2) and 2. Finally, the indictment charged Nachamie, Tunick and Martinez with twenty counts — and Hernandez with eighteen counts — of making false claims for physicians' services, in violation of 42 U.S.C. § 1320a-7b(a)(5) and 18 U.S.C. § 2.
The indictment actually charged each defendant with four counts of covering up a material fact or making false statements — one for each doctor indicted in the case. Because the doctors had been convicted or pled guilty by the time of these defendants' trial, the Government submitted to the jury a redacted indictment containing a single count of covering up a material fact or making false statements. This redaction changed the numbering of all subsequent counts.
Nachamie was convicted of all twenty-three counts. Tunick and Martinez were convicted of conspiring to violate federal law, health care fraud, covering up a material fact or making false statements, and eighteen counts of making false claims for physicians' services. Hernandez was convicted of conspiring to violate federal law. On the verdict sheet, the jury was directed to indicate the object or objects of the conspiracy found with respect to each defendant. For Nachamie and Martinez, the jury found all six objects. For Tunick, the jury found the first, second and sixth objects. For Hernandez, the jury found only the sixth object.
The jury acquitted Tunick and Martinez of two counts of making false claims for physicians' services.
The jury acquitted Hernandez of the other twenty-two counts.
II. JOSE HERNANDEZ
Hernandez moves for a judgment of acquittal pursuant to Fed.R.Crim.P. 29. Under Rule 29, a court "shall order the entry of judgment of acquittal . . . if the evidence is insufficient to sustain a conviction . . ." Fed.R.Crim.P. 29(a). "`[A] defendant seeking to overturn a conviction based upon insufficiency of the evidence bears a heavy burden. Not only must the evidence be viewed in the light most favorable to the government and all permissible inferences drawn in its favor, but if the evidence, thus construed, suffices to convince any rational trier of fact of the defendant's guilt beyond a reasonable doubt, then [the defendant's] conviction must stand.'"United States v. Livoti, 25 F. Supp.2d 390, 391-92 (S.D.N.Y. 1998) (quoting United States v. Martinez, 54 F.3d 1040, 1042-43 (2d Cir. 1995)), aff'd, 196 F.3d 322 (2d Cir. 1999), cert. denied, 120 S.Ct. 1961 (2000).
First, Hernandez argues that the evidence was insufficient to support the jury's conclusion that he knowingly participated in a conspiracy to solicit or receive kickbacks for ordering and arranging for a medical laboratory to perform tests that were to be billed to Medicare. Although Hernandez admits that the evidence, viewed in the light most favorable to the Government, supports the conclusion that he received money from Edgar Damos-Estaco, a cooperating witness who testified at trial, Hernandez contends that the Government proffered no evidence to prove that the money constituted a kickback rather than a consulting fee.
Hernandez's argument is unavailing. The Government presented more than enough evidence to permit the jury to reject his "consulting fee" defense. Viewed in the light most favorable to the Government, the evidence demonstrated that Hernandez introduced Damos-Estaco to Nachamie in order to set up a kickback scheme, attended several meetings where both the kickback fee and the logistical arrangements were discussed, and received money from Damos-Estaco for his role in this scheme. See Trial Transcript ("Tr.") at 1660-1703; see also 9/29/2000 Letter from Assistant United States Attorney Robert R. Strang to the Court, at 3-4 (detailing evidence). Hernandez's conviction cannot be overturned for insufficiency of the evidence.
Second, Hernandez argues that the jury improperly convicted him of a different conspiracy than the conspiracy charged in the indictment. The Second Circuit recently discussed the relevant standard:
Whether the government's proof shows a single conspiracy or multiple conspiracies is a question of fact for a properly instructed jury. . . . Their verdict must be upheld if the evidence, viewed in the light most favorable to the government, could have led a reasonable juror to conclude beyond a reasonable doubt (1) that the scope of the criminal enterprise proven fits the pattern of the single conspiracy alleged in the indictment, and (2) that [each] defendant participated in the alleged enterprise with a consciousness of its general nature and extent. In order to prove a single conspiracy, the government must show that each alleged member agreed to participate in what he knew to be a collective venture directed toward a common goal. The coconspirators need not have agreed on the details of the conspiracy, so long as they agreed on the essential nature of the plan. Moreover, a single conspiracy is not transformed into multiple conspiracies merely by virtue of the fact that it may involve two or more phases or spheres of operation, so long as there is sufficient proof of mutual dependence and assistance.United States v. Berger, 224 F.3d 107, 114 (2d Cir. 2000) (quotation marks and citations omitted)
Viewed in the light most favorable to the Government, the evidence supports the jury's conclusion that Hernandez knowingly participated in the single, overall conspiracy charged in Count One. First, the verdict sheet demonstrates the jury's clear determination that Hernandez conspired with Nachamie, Tunick and Martinez, each of whom furthered this and other objects of the conspiracy. Second, the kickback scheme involved some of the same organizers, doctors, Medicare beneficiaries, and office staff as the other objects of the conspiracy. Third, the Government submitted evidence suggesting that Hernandez had knowledge of the other objects of the conspiracy. See Tr. at 1137-46, 1940-48, 2072-76.
On March 15, 2000, I denied defendants' pre-trial motion to sever the kickback object of the conspiracy. See United States v. Nachamie, 101 F. Supp.2d 134, 152-57 (S.D.N.Y. 2000). In that opinion, I acknowledged defendant Edwin Tunick's concern that the jury could convict him of the charged conspiracy, "even if it finds that he did not knowingly participate in a conspiracy to defraud the Medicare program, so long as it finds that he knowingly participated in a scheme to obtain kickbacks from a medical laboratory." Nachamie, 101 F. Supp.2d at 155. In his post-trial motion, Hernandez renews Tunick's objection by noting that he "was acquitted of the `intent to defraud' object of the conspiracy, which was the core of the government's case. Thus, a finding that defendant solicited or received a kickback, which did not involve an intent to defraud Medicare, establishes that his conduct constituted a separate legal conspiracy." 9/18/2000 Letter from Valerie S. Amsterdam, counsel for Jose Hernandez, to the Court, at 3.
Hernandez's objection fails to provide a basis for overturning the jury's verdict. On the one hand, the record contains evidence from which a reasonable jury could have determined that the tests involved in the kickback scheme were not medically necessary. See Tr. at 1566-73, 1678-79, 2612-13. That conclusion is not inconsistent with the jury's acquittal on the other counts, because the jury might not have viewed the unnecessary medical tests as essential to the Government's case on the other counts. On the other hand, even if the jury concluded that the medical tests for which Hernandez received kickbacks were legitimate, it nevertheless determined that Hernandez was a knowing participant in the single, overall conspiracy charged in the indictment. See Nachamie, 101 F. Supp.2d at 155 (noting that "the jury may well conclude that the conspiracy to solicit kickbacks for legitimate medical procedures was not part of the single conspiracy charged in Count One.") (emphasis added). The jury was properly instructed and the evidence, viewed in the light most favorable to the Government, supports its verdict.
III. LYDIA MARTINEZ
Martinez moves for a new trial pursuant to Fed.R.Crim.P. 33. A motion for a new trial pursuant to Rule 33 may be granted "if the interests of justice so require." Fed.R.Crim.P. 33. Whether to grant a motion for a new trial pursuant to Rule 33 rests within the broad discretion of the trial judge. See Livoti, 25 F. Supp.2d at 392-93. However, such motions are not favored and should be granted only with great caution "in the most extraordinary circumstances." United States v. Locascio, 6 F.3d 924, 949 (2d Cir. 1993).
Martinez also moves to arrest judgment pursuant to Fed.R.Crim.P. 34. "`Under Rule 34, motions in arrest of judgment are allowed only (1) where the indictment charges no offense and (2) where the court had no jurisdiction over the offense charged.'"United States v. Carbonell-Iznaga, No. 87 Cr. 0518, 1988 WL 3666, at *3 (S.D.N.Y. Jan. 4, 1988) (quoting United States v. Rosenberg, 195 F.2d 583, 603 (2d Cir. 1952)), aff'd, 923 F.2d 842 (2d Cir. 1990). Martinez contends that there was insufficient evidence to support the underlying indictment upon which she was convicted. Putting aside the question of whether a claim of insufficient evidence properly can be brought under Rule 34, Martinez's argument is meritless.
Martinez makes three arguments in support of her motion. The first two, which address the Court's refusal to admit certain character evidence and the Government's alleged mischaracterizations of evidence in its summation, do not require further discussion. Both issues were addressed on the record and Martinez has provided no reason for this Court to revisit those rulings. See Tr. at 2795-2810, 3603-05. The third, which contends that the evidence presented at trial does not support her conviction on thirteen counts of making false claims for physicians' services, warrants brief discussion but ultimately proves no more fruitful.
The jury convicted Martinez of making false claims for physicians' services from April 1997 through February 1998. Martinez argues that the evidence is insufficient to support her conviction on the claims made prior to September 1997 because the Government failed to prove that she became a member of the conspiracy before that date. The Government argues that the evidence allowed the jury to infer that Martinez knew about the fraudulent nature of Nachamie's clinic when she began working there in March 1997.
Indeed, the jury acquitted Martinez of the two counts that charged false claims made prior to March 1997.
"Unlike a Rule 29 motion, in deciding whether to grant a Rule 33 motion, a judge may weigh the evidence and determine the credibility of witnesses. The Court is not required to view the evidence in the light most favorable to the Government." United States v. Ferguson, 49 F. Supp.2d 321, 323 (S.D.N.Y. 1999) (citations omitted). On the other hand, a court should grant a new trial only "when it concludes that, despite the abstract sufficiency of the evidence to sustain the verdict, the evidence preponderates sufficiently heavily against the verdict such that a serious miscarriage of justice may have occurred." Id. (quotation marks and citations omitted)
Based upon my review of the evidence, the jury's verdict must stand. The Government introduced sufficient evidence to allow the jury to infer that Martinez knew about the fraudulent nature of the claims either when she started working for Nachamie or very soon thereafter. Martinez herself testified that she supervised the telemarketers from March 1997 and the foreign medical graduates from May 1997. See Tr. at 2871-80. Those activities, combined with the permissible inference about her knowledge of the fraudulent nature of the scheme, supports each of her convictions. Any lingering doubt is allayed by the fact that Martinez also was charged with aiding and abetting the crimes for which she was convicted. See Ferguson, 49 F. Supp.2d at 323-24 ("It is only where an injustice has been done such that an innocent person may have been convicted that there is a need for a new trial.").
IV. CONCLUSION
For the foregoing reasons, Jose Hernandez's motion for a judgment of acquittal and Lydia Martinez's motion for a new trial or to arrest judgment are DENIED.
SO ORDERED: