senator applying for both appearing for both defendant guy steve and st luke's hospital this is obviously not a case in which the defendant of claim that the evidence is insufficient under jackson versus virginia to support conviction on any of the six charges on which the defendants were convicted properly instructed jury at a trial without error obviously had sufficient evidence to convict on these charges at the same time it bears emphasis that the defense had a theory and presented evidence that a properly instructed jury could have concluded either failed issue is here is was the jury correctly instructed was all of the evidence permitted that would allow the defense a full and fair opportunity to dissent and let me quickly the answer i think to those questions is no let me quickly break the counts down into two groups obviously the first critical one is the two eighty seven four claim charge is the defense theory essentially here was twofold one was that they had presented on these three forms a reasonable and equitable statement of nursing costs whether it was wholly accurate whether they knew it to be exactly what had been proven by supporting documentation obviously the documentation was not adequate in this case it was reasonable and adequate and secondly that in a stand the statement that they made didn't matter because they were going to be entitled to do routine court limit that's all they were going to be entitled to and therefore the statement on there was both reasonable and equitable and furthermore would have made a difference as to the amount of money they were going to be paid by the government that was their theory and i submit that the jury could have rejected it they could have listened to the evidence and said we don't believe it we don't think that was what was going on but they didn't have the tools to consider this event and the reason is that they didn't have the instructions that the statement on the a c o r at the annual cost report had to be material that had to be one that could influence the government and secondly they didn't have the instruction that said look if these regulations are around big us then the government is going to have to prove that the statement is for under any reasonable interpretation of them and let me give you a perfect example of why the instructions were so critical the government's position was you have to put down actual nursing corps there and if you put down a figure that you know isn't borne out by document that's a crime but these regulations are mentally complex and they say that the government will will reimburse for reasonable and equitable costs under those regulations somebody could have a hypothetical somebody comes in and says you know the account it turns out has been drunk all this year the documents are met we can't come up with a document that give a precise figure or a nurse in court and somebody could say well under the right let's just make our best effort in good faith and give them a reasonable allocation of nursing costs and where we're acting within the law the government may say no that that is not what the regulations require you have to have precise documentation but it during that was told that if there's an ambiguity and if somebody could fairly conclude that a reasonable and an acquittal statement of cost is adequate then a jury could find there's not a crime here there may be civil liability there's not a crime and every jury is told that there has to be materiality and they say and there was plenty of testimony in this record that it is very difficult and often impossible to get beyond routine caught limits and therefore the statement of nursing course that was above that was not material so we are confronted there is if that's the defense position that they were entitled to these two instructions we need to reality yes that's where we it absolutely did your honor and there is no question that as a result of that we have to labor under the plan arafat but the government is saying that we can't raise it at all because it's invited error and they're clearly wrong on that because what the record reveals is that they wanted this instruction the defense wanted the instructions the government came in and said taylor stone to the ninth circuit it's all over the the file instructional conference said hey i already knew that materiality is not an issue that's the end of it the defense expiated in that so they did not but maintain their request but if that is correct that materiality is an materiality is an element nothing in taylor one hundred ninety five decision which preceded neither can help the government in the face of the united states supreme court opinion in either you look at the history of the statute we've laid it out in our brief it's a civil war statute in which the united states government said essentially we were ripped off shamelessly during the civil war we are going to pass an anti fraud that you need or says that it doesn't have to have the word materiality if it if it's an anti fraud statute it's got a materiality element right this record quite frankly one reason that a lot of our brief is drawn from case law is that in order to understand what medicaid is about we had to go to case law which describes it quite clearly because the record is a mess and doesn't describe one thing though that doesn't come through it's true in the case law is that that you don't get what's going on routine costs limit and furthermore i would submit to the court that there was a lot of evidence in here and the defense presented substantial evidence of st luke's enters into these agreements that all of the testimony and all of the witnesses who testified that this was deliberate on the part of mr seaton she said every one of them has lied under oath and there's a serious credibility problem with them that doesn't mean the jury wasn't titled to believe if a jury had been told that it's gotta be a material on the statement they could have said wait a minute i mean it may not be wholly accurate but in terms of influencing the government to routine course limits which make it which say looks was going to be entitled to and the fact that there was evidence that it was reasonable and equitable a jury could have said wait a minute we  find we find that seaton knew that he didn't have documentation for that number ok but we find that he went out there he said let's try and get a reasonable number he he in letter your honor if if the court is going to deem that testimony true as a matter of law the court could probably fairly find that if he didn't have a lawyer in the court room or if he didn't have a jury in the courtroom it would have made any difference anyway because the evidence was overwhelming what i would submit to the court is simply and it's in our apply brief credibility about what they say about the mutual of omaha's audit because every single one of them as wise under oath and your honor i am submitting to you properly instructed jury could say you know they are all eventual liars under oath but but i believe their testimony on balance and i'm going to convict but what i'm saying is given those problems i don't think we can say well there was a they had a defense and maybe with them into reality instruction that the pens would have mattered but but the end we're going to find that these witnesses are so credible that they they would have paid any attention to the defense cannot consider this a one sided case and if it is not one sided case if a jury had conflicting testimony on things like reasonable cost then correct instructions are what make makes a difference difference and i would say and it's appealing to argue the case in this in this tense putting aside all of the facts of this case the court is about to make a major decision whatever the outcome of the case because it has to decide the abstract question of the law of whether materiality is an element of to eighty seven in the wake of god and in the wake of needham and i think that whatever the court does with the harmless error question that the government's position that this isn't a fraud statute and there isn't a materiality element is incorrect let me let me also just point out to your honor again because i know what the problem is here you read you read some of the testimony of these witnesses and with certainly without knowing that they had perjured themselves before and said quite the opposite under oath it looks like a very very strong case for the government but i would submit that's a very  parent strength of those witnesses though they did have these credibility problems make the testimony that the court did not allow on mr grover on the grounds that which was offered on mental state  all the more important because that's the testimony that would have in a contemporary sense define mr stevens mental state as to what he was doing and thinking about the audit at the time so that issue is important i'm going to try and reserve at least three minutes but there is one issue that that i have to touch on before i go and that's simply that it is not complete my opinion i will i will turn to the district court no one reading the patel's statements again and again and said you're not making sense they use an intended lot bigger than they shifted to an actual last figure you can't possibly figure out lost because there's two things that they never ever pro one is what was st luke's play that it's not in the record and secondly is what where they really entitled to be paid and the court threw up its hands at the end i submit it's the difference between for sixty seven year old man a potential the quarter nationally said a level sixteen two year sentence later on seventy eight month sentence if we're going to have a different of five years this court that because they never a stablish what was actually paid or what should have been paid we can on this record say hey there's a discrepancy of a couple hundred thousand dollars let's cut the difference or or let's say it i'd go out of my mind we're just going to have to have a full evidentiary hearing because the other important variable and then i'll sit down with one minute left is that the court made a figure of two hundred thirty four thousand which was a level sixteen she then the government submitted briefs she then raised it to a level twenty eight without reopening the evidence rehearing and the record is clear that the defense at the end of the evidence you're hearing said we're going to call an expert to prove our case but if you use two hundred thirty four thousand dollars will rest i don't minimum we've got we've got to have a chance that they they put on all of the evidence that they would on the question of lot of about one minute left your honor and i hope to reserve that please the court i'm amber rose and representing united states in this matter i want to briefly touch on the instructional error claim by the defendants and then talk recently about lost in finally addressed the hearsay issue in terms of materiality this court need not decide here whether section two eighty seven requires materiality and that's for two reasons one defense's argument ignores the procedural posture in which this claim is being raised and also ignores that there's currently controlling authority in this case in the circuit taylor which is already decided that issue with respect to the procedural posture whether or not the error was invited it certainly was waived under a whether he was aware that perhaps materiality was an issue here what happened was the defendant provides proffered an instruction to the court saying instruct the materiality and then without any ruling by the court or any indication of how it was going to rule but after seeing the government's opposition voluntarily with drool the his proposed instruction and a ceded to the government's instruction the council to act all leads to their not recognising that they have pulled no right and well i don't i don't think that's true i think it shows that there was an egg knowledge meant that now that they were made aware of taylor they knew that they didn't have  well they could have not withdrawn it and argued to the court that taylor somehow wasn't controlling my point is just that they didn't do that and that means that it's waived and this court should even consider it even to the extent that the court decides to consider it clearly keep playing era would be the standard of review and because a tailor there simply can't be plainer tailor squarely addressed this issue as a defendant in that case raised this exact time of error that materiality that the jury should have been instructed on materiality in the context of a two eighty seven claim and also on a thousand and one claim and there the court said yes we agree it's an element of the thousand and one of the jury should have been instructed it shouldn't have been a judicial issue but we don't find it's an element of to eighty seven now wasn't to the extent that it went on to say whether it would be of even if it were an element whether it would be a matter for the judge or jury is a separate issue and the fact is no cases have overruled taylor the nater case was not a circuit so even whether it's a federal question that still needs to be the result by the supreme court for all intents and purposes today taylor is still the controlling authority well provides supreme  court support for the continuing viability of taylor and certainly the court not even being asked to instruct the materiality not being cited the nader case at all did not commit plain error  relying on that case in terms of i want to turn now to the ambiguity instruction i think the point to emphasize here is the fund and got what he asked for he asked for an instruction on his theory of defense that his interpretation of what he was required to report was reasonable and the court gave it lets these so really what the court here is reviewing was the discretionary decision of the district court as to how exactly to word the instruction and the case there is many cases in the circuit talking about the fact that defendants are entitled to a specific wording with an instruction so long as their theory is put forward in the overall instructions make it clear that's all they're entitled to hear what the what the defendant asked for was an instruction which read and page and this is what the defense requested you may find that ambiguity exists in the medicare provider reimbursement guidelines if you find an ambiguity exist then to prove that defendants knew their statements mutual home all were false the government must prove beyond a reasonable doubt that there was no reasonable interpretation of the situation under which the defendants could have believed they were acting lawfully unlawfully i'm sorry we're  instruction provided well the government has the burden of proving beyond a reasonable doubt not only the defendant's statements were false but that there is no reasonable interpretation of the requirements  were known to be false by the defendant at the time and i don't think there is really any basis to find that there was error that somehow the defendant didn't get his theory before the jury or wasn't adequately instructed on the reasonable interpretation that it didn't use the word ambiguity it just talked about reasonable interpretation well even whiteside the case relied on by defendant to get the instruction only talks about reasonable interpretation and does not use the word district court here munis said in those kinds of cases quote the prosecution must prove beyond a reasonable doubt that the requests were stuck to no reasonable inter interpretation that would make the defendant's responses to the agency's request factually true the audit they did i just hear from the record they audit a couple of months and they found these discrepancies in they discovered the false records and at that point it's my understanding it was referred criminally there was indications of fraud so odd at that point wasn't completed to determine what the actual numbers were to go through the administrative process it was then referred to criminally and of course for criminal purposes the loss can be calculated slightly differently or they don't rely on the civil what civil audit numbers would be i think what needs to be kept in mind is this is the kind of case i mean the medicare program is very complicated the way that the payments work are complicated what they're trying to parse out is one small section of the cost of just the nursing service cost whereas of course in the context of the payments going back and forth they're not parsed out for every single you know kind of cost as the provider last and basically the district court just assigned a range said you know it's between two hundred and three hundred fifty thousand that's a lot that's one sentence you two and this court said you know that's ok there was sufficient evidence to support that absolutely they were when the court issued that order at the end of the order it says defendant at the end of the order correcting her mistake just to tell wrote at the end of the order and the defendant has twenty days to respond and the defendant di filed another sentencing memorandum and with that memorandum they submitted the expertise of an expert kim hey they provided an affidavit and documentation from her and they able to consider that before issuing its final ruling in which it said i don't believe the defense has offered anything new or persuasive and i'm just keep staying with the last that i initially determine and i think what's important to keep in mind about that for nursing costs more than medicare patients and they couldn't just take the line sixteen with the nursing cost but they actually reduced that so that to make sure that it only accounted for medicare patients because sometimes non medicare patien would be in the medicare section although not vice versa and then said we're going to subtract from that amount claimed the average per diem cost which is what a provider that when they provide services but they don't provide records to document actual cost and we're going to give them that difference and that's what the government's figure was now this is a very conservative estimate of last let's talk for a moment what it doesn't include it doesn't include any amounts claimed under the that was very difficult to do as i say in part because the payments aren't parsed out by nursing costs versus other kinds of cost and they were getting big lump payments every month but mr potter did testify and that's part goes to part of why this estimate was so conservative the amounts that were included as the difference between the amounts claimed in the cost of court last the average per diem that were provided in the sentencing memorandum the one point five figure the one point six isn't in the indictment corporations well yes but he has to be president and c e o of the company while he may not have pocketed he benefited from st luke's profiting from this scheme i mean he was able to keep his hospital going he was able to whether the last itself was reasonable and i also would like to point out mr sheen has never himself raised the issue that he shouldn't have been ascribed the same losses of corporations so i don't think that issue is really before the court testified that damage amount the one point five or one point six million dollar figure was in fact paid out he testified that he said look it's a little bit it's a little bit difficult to look exactly what saint louis got but i can tell you that those monies were received by them it didn't include any amounts claimed for the exemption above the routine costume and it didn't include any overhead cost associated with the nurses it didn't include any relevant conduct so i think the last is harmless because it was all in the same guideline range and the defendant got the low end of that range i want to turn and look there's more and more questions on law and one term for a moment to the hearsay issue what i want to emphasize here is one of course we don't believe the district court of used its discretion in preventing rover from testifying that seaton instructed him not to turn over any documents or putting that aside for a moment i think it's clear that even if it were air it was harmless and it's harmless for four reasons the first was the defendant got into fishing got in quite a bit of evidence from which they could make the same argument and they did argue it strenuously to the jury but they did get in was that grover testified that after seen learned of the audit they had a conversation after the conversation it was grover who had the authority to decide what documents to give to the auditors three that only later after the audit when they were discussing these false schedules and what was provided to the auditors stephen was very upset they asked about the testimony of mr mouse masa i'm sorry that the defendant was very upset upon learning that the false documents were given to the auditors and demanded that mr moss find out who did this and then in the art and then they made strong use of this in their closing argument saying and this is in the record at twenty three eighty four of the transcript during the closing argument this is what they argued sixteen went on this trip or en or in grover is left with the decision making power does that not tell you that stephen has no intent to give them fraudulent documents it tells you he didn't have any intent it says or and you decide so they were able to make the argument they wanted to make to the jury the second reason it's harmless this evidence is  to tory as it is exculpatory counsel six charges the defendant was obstructing the audit not by providing false documents but by refusing to furnish true documents and this statement don't give them any document is also going to shows his intent not to provide them the true documents so the government could have made as much use of this as the defendant seems to think he could have made  true yes i mean it could have if we were offering it has to be of course offered by the party opponent and we didn't do that but had the defendant gotten it in under his hearsay theory it would've been hearsay for him to offer and we could have made use of it of course and i right think i can make this in a minute taylor as the i think the court is aware and only does not squarely hold the materiality is not an element of twenty seven it doesn't hold it all over the garden hearing it was overruled by the supreme court and ambiguity which is key and ambiguity in a regulation a law those are the two things that were completely missing from judge patel's instruction she didn't mention ambiguity and she didn't mention ambiguity in a regulation