Title: The People v. Tatyana Kisina

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 25  
The People &c.,
            Respondent,
        v.
Tatyana Kisina,
            Appellant.
Nathaniel Z. Marmur, for appellant.
Hannah Stith Long, for respondent.
CIPARICK, J.:
The principal question presented in this appeal is
whether a physician can be found guilty of falsifying business
records in the first degree (Penal Law § 175.10), for submitting
fraudulent medical documentation to a no-fault insurance carrier
for the purpose of receiving payments for treatments that were
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No. 25
*  The indictment contained 100 counts, charging the owners
of IK Medical, several licensed doctors who reportedly practiced
at the clinic, three personal injury lawyers, and a steerer.  The
charges included engaging in a scheme to defraud in the first
degree, attempted grand larceny in the third degree, insurance
fraud in the third degree, falsifying business records in the
first degree, and other related crimes. 
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unnecessary or unperformed.  We hold that the submitted documents
are "business records" for the purpose of this statute. 
In 2002, defendant, a specialist in physical medicine
and rehabilitation, treated accident victims at IK Medical P.C.,
a clinic in Queens.  The facility reportedly provided
comprehensive medical care to motor vehicle accident victims
eligible for no-fault insurance coverage.  In 2003, the Attorney
General investigated the clinic for insurance fraud and other
related crimes, and subsequently procured an indictment against
defendant for engaging in a scheme to defraud in the first degree
(Penal Law § 190.65 [1] [b]), two counts of insurance fraud in
the third degree (Penal Law § 176.20) and two counts of
falsifying business records in the first degree.*  The falsifying
business records charges were based upon false consultation
reports that defendant submitted to State Farm Mutual Automobile
Insurance Company (State Farm), along with verification of
treatment forms seeking recompense for procedures she purportedly
performed on two motor vehicle accident victims.  
Supreme Court denied defendant's pre-trial motion to
dismiss the falsifying business records counts, stating that
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No. 25
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"false records resulting from false information submitted to
support a fraudulent claim is a sufficient basis for an
indictment charging Falsifying Business Records."   
At trial, the People introduced as evidence two
$3,823.24 insurance claims for nerve testing purportedly
performed on two accident victims.  Defendant signed the claim
forms -- entitled New York Motor Vehicle No-Fault Law
Certification of Treatment by Attending Physician -- and
submitted them to State Farm.  Along with these forms, defendant
sent the insurance carrier "consultative reports," indicating
that defendant had conducted electrodiagnostic testing on 26
nerves and muscles for each patient.   
Defendant stipulated as to testimony from a
representative from State Farm that, if called, she would testify
that the company is a provider of no-fault insurance in New York,
and that she was a custodian of records, familiar with its record
keeping practices and obligations.  The stipulation agreement
explained that the "Verification of Treatment Forms" and
accompanying medical reports defendant submitted to State Farm
are intended to evidence its "obligation to pay the attending
physician or other provider of health service for treatment or
healthcare services rendered," and that State Farm relies on the
accuracy of such statements.  The stipulation agreement further
noted that such documents became part of State Farm's permanent
business records. 
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No. 25
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The People presented an expert witness who described
the electrodiagnostic tests for which defendant billed, including
electromyography (EMG) and nerve conduction velocity (NCV).  The
expert testified that one of the tests involves placing a needle
into the muscle and causing pain, and that the "F-wave" test that
defendant claimed to have performed on one of the two patients 16
times was not a standard test and is "rarely done."   
The two accident victims that defendant allegedly
treated testified for the People.  One testified that she had not
received any of the EMG tests reportedly performed by defendant
and only 2 of the 26 NCV tests billed by defendant; the other
stated that he received just 2 of 4 EMG tests and just 6 of 26
NCV tests that defendant billed. 
In addition to evidence specifically relating to
defendant's conduct, the People offered evidence of a pattern of
fraud by the clinic in which, they claimed, defendant was
involved.  Two of the owners of IK Medical testified for the
prosecution under cooperation agreements that the clinic existed
from 2001 to 2003 for the sole purpose of improperly billing no-
fault insurance companies for medical treatment reportedly
performed on accident victims.  The clinic allegedly recruited
motor vehicle accident victims by paying "runners" or "steerers"
to locate and usher them to the clinic for treatment. 
Irrespective of a particular patient's medical needs, the clinic
administered treatment from a general practitioner, a
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No. 25
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neurologist, a psychologist, a physical therapist and other
medical professionals, and then billed no-fault insurance
carriers.  The two owners stated that the clinic sought to
exhaust the $50,000 no-fault coverage allotted to each motor
vehicle accident victim for medical treatment, even if the
patients did not require such extensive care.  The owners further
noted that defendant worked at the facility from June 2002 until
June 2003, for two to three days per week.  
Defendant presented three character witnesses, a
private investigator who interviewed one of the two patients, and
a medical expert of her own.  Defendant then requested that the
court permit her to present evidence that the Attorney General's
Office sent an undercover investigator to the clinic and that
defendant provided proper medical treatment and did not inflate
her bill for such services.  Supreme Court precluded the
evidence, stating "[t]here is no requirement that the People
prove that defendant's treatment of all of her patients was
fraudulent in order to prove this scheme to defraud."
The jury found defendant guilty of two counts of
insurance fraud in the third degree and two counts of falsifying
business records in the first degree.  The jury acquitted
defendant of scheme to defraud in the first degree.  The
Appellate Division affirmed (60 AD3D 695, 696 [2d Dept 2009]).  A
Judge of this Court granted defendant leave to appeal, and we now
affirm.
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No. 25
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Defendant primarily contests her conviction of two
counts of falsifying business records in the first degree.  She
raises two arguments that the false business records submitted to
State Farm fall outside of the purview of Penal Law § 175.10. 
First, she claims that the statute is not violated when an
outsider or third party submits false information to a company to
induce it to take action in reliance upon that information;
second, she argues that the medical reports that she submitted to
State Farm are not "business records" because they do not reflect
the "condition" or "activity" of the recipient enterprise, but
rather falsely evidence her activities and the condition of her
patients.  We disagree. 
We begin by turning to the language of the statute in
order to "give effect to the intention of the Legislature"
(Consedine v Portville Cent. School Dist., 12 NY3d 286, 290
[2009]).  "Where the language of a statute is clear and
unambiguous, courts must give effect to its plain meaning"
(Matter of Tall Trees Constr. Corp. v Zoning Bd. of Appeals of
Town of Huntington, 97 NY2d 86, 91 [2001] [internal quotation
marks and citation omitted]).  Falsifying business records in the
first degree is committed when a "person," with the requisite
intent, makes or causes a false entry in the "business records"
of an enterprise (Penal Law §§ 175.05 [1], 175.10).  The "person"
must act with an "intent to defraud," which includes "an intent
to commit another crime or to aid or conceal the commission
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No. 25
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thereof" (Penal Law § 175.10; see also Donnino, Practice
Commentary, McKinney's Cons Laws of NY, Book 39, Penal Law §
175.05, at 65-66).  A "business record" is "any writing or
article . . . kept or maintained by an enterprise for the purpose
of evidencing or reflecting its condition or activity" (Penal Law
§ 175.00 [2]; cf. CPLR 4518 [admissibility of business records at
trial as an exception to the hearsay rule]). 
Regarding defendant's first claim, the Penal Law
proscribes no limitation or preconditions on the types of persons
who may fall within the ambit of this crime.  Nowhere does the
Penal Law state that "outsiders" or "third parties" not employed
by or agents of the recipient enterprise are immune from
prosecution under this statute.  Indeed, in People v Bloomfield
(6 NY3d 165, 170-172 [2006]), we rejected the "insider/outsider
distinction" for the purpose of defining a false business record
under the current business record statutes.  We sustained a
lawyer's conviction for falsifying business records of a bank of
which he was not an employee or agent, notwithstanding that he
maintained the records in an outside location (cf. People v
Cratsley, 86 NY2d 81, 88-91 [1995] [in a rape prosecution, I.Q.
tests performed by an "outsider" were properly admitted as a
business record of a social service agency pursuant to CPLR
4518]).  
Many other courts have similarly held that a third
party's submission of fraudulent records may fall within the
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No. 25
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scope of the statute (see e.g. People v Myles, 58 AD3d 889, 890-
892 [3d Dept 2009] [a consumer of electricity could be guilty of
falsifying business records for bypassing the electric meter,
causing it to falsely record the amount of electricity used];
People v Johnson, 39 AD3d 338, 339 [1st Dept 2007] [a co-
defendant of public assistance applicant could be guilty of
falsifying business records of the agency]; People v Smith, 300
AD2d 1145, 1146 [4th Dept 2002] [defendant could be convicted for
falsifying the records of the public defender's office for
erroneously stating his income]).  We agree with the
interpretation of these courts, and find that the People's
position better comports with the plain language of the statute. 
The second and most prominent component of defendant's
argument is that the records submitted to State Farm do not
reflect the "condition" or "activity" of that enterprise as
required by Penal Law § 175.00, but rather falsely evidence
defendant's own activity and the condition of her patients. 
Here, the stipulated testimony from the State Farm representative
supports the necessary elements of a "business record."  The
stipulation explains that State Farm was obligated to keep and
maintain records submitted by physicians seeking payments for
medical services rendered.  Further, the stipulation establishes
that State Farm's financial condition is affected by these false
submissions, as they give rise to liabilities under its policies. 
Defendant seeks support from People v Papatonis (243
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No. 25
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AD2d 896, 900 [3d Dept 2009]) in arguing that the false medical
reports she submitted do not reflect the "condition" of the
receiving enterprise.  In that case, the court held that
misrepresentations on an employment application, wherein the
defendant falsely denied having been convicted of a crime, did
not fall within the ambit of the statute (see id. at 900-901). 
However, the falsifications in the job application did not, as
here, relate to any rights or obligations on the part of the
recipient agency.  Here, by contrast, there exists sufficient
evidence establishing that State Farm "kept or maintained" the
consultation reports along with the claim forms, and that they
evidence or reflect "its condition" -- specifically its legal
obligation to reimburse medical providers for services.  The
falsifying business records conviction was, therefore,
sustainable under the circumstances presented.   
Finally, defendant asserts that Supreme Court 
committed reversible error by improperly precluding evidence that
an investigator from the Attorney General's Office went to IK
Medical, posing as a motor vehicle accident victim, and that
defendant did not administer any unnecessary procedures or submit
false claims.  At trial, defendant proffered this evidence to
negate fraudulent intent.  She claims that its preclusion
prejudiced her defense.   
While this proffered testimony may have been relevant
to show a lack of intent to perpetrate the scheme to defraud
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No. 25
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charge (see United States v Thomas, 32 F3d 418, 421 [9th Cir
1994] [a defendant "should be permitted to offer any evidence
which bears directly and not too remotely on his intent to
defraud"]), no possible prejudice is apparent as a result of
Supreme Court's ruling.  Defendant was acquitted of the scheme to
defraud charge, and this evidence would not have related to the
fraudulent submission of claims for unnecessary or unperformed
medical treatments regarding the two accident victims.  
Accordingly, the order of the Appellate Division should
be affirmed. 
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order affirmed.  Opinion by Judge Ciparick.  Chief Judge Lippman
and Judges Graffeo, Read, Smith, Pigott and Jones concur.
Decided February 18, 2010