In the

United States Court of Appeals

For the Seventh Circuit

No. 12-3231

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JOHN NATALE,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 11 CR 594—Rebecca R. Pallmeyer, Judge.

ARGUED APRIL 18, 2013—DECIDED JUNE 11, 2013

Before BAUER, FLAUM and SYKES, Circuit Judges.

FLAUM, Circuit Judge. When another doctor reviewed the

post-surgical CT scan from one of Dr. John Natale’s

patients, something did not seem right. Natale had previously repaired the patient’s aortic aneurysm, and the

images from the CT scan did not match the procedure

Natale described in his operative reports. An investigation culminated in Natale’s indictment for health care

fraud related to his Medicare billing, mail fraud for his
2 No. 12-3231

use of the mails in receiving the Medicare reimbursement checks, and false statements related to health care

for the inaccuracies in his operative reports and other

medical notes. The jury acquitted Natale on the fraud

counts but convicted him of making false statements

in violation of 18 U.S.C. § 1035. When charging the jury

on the false statement counts, the trial court used instructions that seemingly permitted conviction for false

statements completely unrelated to Medicare reimbursement. Natale now challenges that instruction along

with several of the district court’s evidentiary rulings.

We agree that the district court’s instruction on the false

statements charges swept too broadly and allowed conviction for conduct not covered by the statutory text.

We now clarify the meaning of § 1035 and identify

the proof required for conviction. Because the erroneous

instruction was harmless in Natale’s case, however,

and because we see no error in the district court’s evidentiary rulings, we affirm Natale’s conviction.

I. Background

A. Factual Background

Natale is a vascular surgeon who performed surgeries

out of Northwest Community Hospital in Arlington

Heights, Illinois. He specialized in the treatment of aortic
No. 12-3231 3

aneurysms, a condition involving weakened vascular walls

in the aorta, the main artery exiting the heart. Treatment

for aneurysms generally involves surgery, during which

the surgeon cuts out the weakened arterial tissue and

replaces it with a synthetic graft.

Treatment of aortic aneurysms is especially complex. The

aorta is the main conduit delivering oxygenated blood

from the heart to other body parts. It thus consists of a

wide tube that leaves the heart and extends down the

center of a person’s torso. See Figure 1. As such, it is much

like an interstate highway—large, wide, and designed to

deliver high volumes of blood (which would be like cars

on the highway) quickly to the destination body parts.

And just as an interstate highway has exits that divert
4 No. 12-3231

traffic to smaller local roads, arteries branch off from the

aorta to deliver blood to the various organ systems

throughout the body. For example, the hepatic artery

carries blood to the liver; the gastric artery delivers blood to the stomach; and the renal arteries ensure

perfusion of the kidneys. See Figure 2. The aorta ultimately

forks into two branches, becoming the left and right iliac

arteries. The iliac arteries in turn become the femoral

arteries, which carry blood to the legs and lower extremities.

Surgeons use two different types of synthetic grafts to

repair the weakened aortic walls. A tube graft performs
No. 12-3231 5

exactly as its name implies. A tube replaces the weakened

arterial wall (or is used to create a bypass around the

weakened artery). See Figures 3B and 4B. The tube graft

attaches to the aorta itself, before the vessel splits into

the iliac arteries. In contrast, a bifurcation graft splits

into two branches at its lower end, with the two

branches attaching to the iliac arteries, not the aorta. As

a result, the bifurcation graft itself has the shape of

an upside-down “Y”. See Figures 3A and 4A.

While all aortic aneurysms present complications,

aortic aneurysms above (suprarenal aneurysms) or

near (juxtarenal aneurysms) the renal arteries prove

especially difficult. Treating these aneurysms requires

the surgeon to clamp the renal arteries, sever them from

the aorta, replace the juxtarenal segment of the aorta

with a graft, and reattach the renal arteries to the graft.

As a result, post-operative renal arteries attach to and

branch off from the synthetic graft, not the natural aorta.

Medicare requires doctors to submit bills using a

five-digit “CPT” code, which determines the level of

Medicare reimbursement. Because aneurysms involving

the renal arteries require a more complex procedure,

Medicare reimburses such surgeries at higher rates than

simpler repairs. In this case, the indictment accused Natale

of performing the simpler repair surgery while submitting the CPT codes and receiving reimbursement

for treatment of the more complex suprarenal aortic

aneurysm. For the surgeries described in the indictment,

use of these billing codes netted Natale about $3,700

more, in total, than the codes for less complex aneurysms

allowed.
6 No. 12-3231

Reimplantation involves replacement of the arteries and

1

reestablishment of blood flow. See Stedman’s Medical Dictionary 1672 (28th ed. 2006) (entry for “replantation,” a synonym

of reimplantation). Thus, Natale’s use of this word suggests

he had severed the renal arteries from the aorta and

reattached them after repairing the aneurysm, a procedure

that would have justified the higher billing codes for an aneurysm involving the renal arteries.

More specifically, Natale faced two counts of health care

fraud, see 18 U.S.C. § 1347, one count of mail fraud, see id.

§ 1341, and two counts of making false statements relating

to health care matters, see id. § 1035. At the root of all five

counts sat alleged falsities contained in the operative

reports for several of Natale’s patients. According to the

government, these statements gave the impression that

Natale had performed the more complex procedure

involving the renal arteries. Among other statements, for

example, Natale dictated that he “reimplanted” or “implanted” renal arteries of several patients. His operative 1

notes also stated that a “button of the right renal artery

tissue was then cut out and sewn to a portion of the graft

with 5-0 Prolene.” Thus, he described sewing the renal

arteries directly into the synthetic graft (the 5-0 Prolene) as

if he had repaired an aneurysm involving the renal

arteries. In addition to these statements (and others)

suggesting involvement of the renal arteries, Natale’s

operative reports and other notes suggested use of bifurcation grafts rather than tube grafts. For example, one note

explains that he “extended the limbs of the bifurcation

graft down to the external iliac artery bulge.” In reality,
No. 12-3231 7

the government charged, Natale had performed a

simple repair below the renal arteries using only a tube

graft. These allegedly false statements in the operative

reports provided both the misrepresentations necessary

for the scheme to defraud and the falsities necessary

for the false statement counts.

B. Procedural History

At trial, the government offered the expert testimony

of Dr. George Anton, a surgeon with Hillcrest Hospital

in Cleveland. Anton testified that Natale supported his

use of the higher-paying billing codes through the statements in the operative reports. Operative reports generally provide a summary of the surgery—describing

what procedure was done, what the doctor noticed, what

complications, if any, occurred, etc. Northwest Community policy required completion of and submission of

operative reports following all surgeries.

Anton also identified what he believed were false

statements in Natale’s operative reports. While the

reports indicated that Natale had inserted bifurcation

grafts involving the renal arteries, Anton believed that

Natale had instead used simple tube grafts below the

renal arteries—a procedure that would not justify the

billing codes Natale had submitted. Anton reached this

conclusion by comparing post-surgical CT scans of

Natale’s patients with the procedures described in

Natale’s operative reports and other notes. Anton could

make this comparison because synthetic material

appears differently from natural tissue on the CT scans.
8 No. 12-3231

Thus, when viewing these scans, Anton could see

precisely what type of graft Natale had used and

where these grafts attached to the aorta.

According to Anton, the CT scans showed only a tube

graft, the top of which attached to the aorta below the

renal arteries and the bottom of which attached to the

aorta above the iliac arteries. See Figures 3B and 4B.

Natale’s operative reports and other notes, however,

suggested that Natale had inserted a bifurcation graft

that attached to the aorta above the renal arteries—thereby requiring that the renal arteries attach to

and branch off from the synthetic graft—and below the

end of the aorta, attaching to each iliac artery. See Figures

3A and 4A. Although the operative reports described

bifurcation grafts, Natale did not use billing codes for

bifurcation grafts. Anton also used demonstrative exhibits to help the jury visualize his opinions and testimony. 
No. 12-3231 9

Another government witness, Kelly Hartung, described

Medicare practices, policies, and procedures. Hartung

worked for the corporate contractor charged with administering the Medicare program in Illinois and several other

Midwest states. She told the jury that Natale had submitted

billing codes for aneurysm repair involving the renal

arteries, consistent with Natale’s notes but inconsistent

with Anton’s reading of the CT scans. Hartung also

testified that, when doctors enroll in the Medicare program

as an authorized biller, they receive notice of Medicare

policies, procedures, and rules, and acknowledge having

read and understood those rules. At various other points

in the claim submission process, doctors reaffirm their

knowledge of Medicare billing rules and policies, verifying
10 No. 12-3231

that the bills they have submitted were for work actually

performed and medically necessary. Finally, Hartung

told the jury about Medicare’s auditing process, explaining that during an audit, Medicare “would request

documentation. That request . . . can be for the operative report[,] . . . X-rays, lab notes, [and/or] personal

office notes that a physician may have made.”

Like the Medicare representative, Anton also discussed

operative reports. He made no mention of their relevance

in Medicare billing, but he did explain that operative

reports help doctors make treatment decisions following

surgery. They are especially helpful—and important—for

physicians who did not perform the surgery on the

patient but are tasked with future treatment.
No. 12-3231 11

Medicare never requested, received, or reviewed the

operative reports describing the surgeries at issue in this

case. Nor did this case arise from a Medicare audit. Instead, one of Natale’s patients sought treatment from a

competing vascular surgeon at Northwest Community.

(It’s unclear, but ultimately irrelevant, whether the

patient sought treatment for the same or a different

condition.) That surgeon ordered the CT scans and

noticed the discrepancies to which Anton later testified

at trial. He reported Natale to the review committee

at Northwest Community, ultimately resulting in this

investigation and prosecution.

Natale testified in his own defense. He acknowledged

that the grafts at issue did not extend above the renal

arteries, but described the aneurysm as juxtarenal, placing

it just below the renal arteries. As a result, he explained,

“there was insufficient healthy aortic tissue below the renal

arteries with which to sew the top end of the graft.” This

situation ordinarily would require the synthetic graft to

extend beyond the aortic junction with the renal arteries,

thereby requiring the surgeon to incorporate the renal

arteries into the graft. Rather than doing so, however,

Natale told the jury he used a technique that he had

learned as a resident at Rush Presbyterian (dubbed the

“Rush Technique” at trial). According to Dr. Cyrus Serry,

who served as attending physician at Rush during Natale’s

residency, the Rush technique involves folding over the

weakened aortic wall to double its thickness. This doubled-over tissue strengthens the aortic wall, permitting

attachment of the top end of the graft where, previously,

the tissue had been too weak to support such attachment. Because the graft can attach to the doubled-over,
12 No. 12-3231

strengthened aortic wall, the renal arteries need not be

severed and sewn into the graft. This technique, Serry

testified, is more complex than the standard repair for a

suprarenal aneurysm because the surgeon must ensure

that the doubled-over flaps do not obstruct the openings to

the renal arteries. Moreover, because the technique involves a doubling-over of aortic tissue and no synthetics,

use of this technique would not appear on a later CT scan.

Medicare has not designated a billing code for the Rush

Technique. (Nothing in the medical literature has ever

described the Rush Technique.) As a result, Natale explained, he did as he was instructed at Medicare

training sessions and chose the billing code that most

approximated the procedure he had performed. Because

the Rush Technique was, in Natale’s view, the “functional

equivalent” of a procedure incorporating the renal

arteries into the synthetic graft, Natale submitted the

billing codes for that procedure, rather than the billing

codes for repair of an aortic anuerysm not involving the

renal arteries.

Natale also admitted that his operative reports and

other notes contained inaccuracies. He attempted to

explain away these errors by characterizing them as

innocent mistakes. They arose, he told the jury, from his

status as the “busiest cardiovascular thoracic surgeon

in the Northwest Suburbs” and his sloppiness in dictating

the reports—as many as eighty to one hundred records

at a time, sometimes several weeks after performing

the surgery. Finally, Natale told the jury he did not

have billing in mind when dictating the reports, noting
No. 12-3231 13

that the reports identified several procedures and

items that he should have billed to Medicare but did not.

The government’s rebuttal witness challenged Natale’s

invocation of the Rush Technique. While Dr. John

Peters—Natale’s surgical assistant at the time of the

surgeries at issue—admitted that the Rush Technique

“sounded familiar,” he testified that he did not remember Natale performing the Rush Technique during

the surgeries in this case.

After closing arguments, the parties agreed on jury

instructions—without objection from Natale on the instructions at issue—and the district court so instructed

the jury. The district court also, over Natale’s objection,

permitted the jury to take Anton’s demonstratives into

the jury room during deliberations. Importantly, the

government “stripped down” the demonstratives that the

jury used during deliberations. Unlike the two diagrams

presented in Figures 3 and 4, the demonstratives used

during deliberations did not contain the headings “Operative Report” and “Actual Operation.” Instead, it just

contained the pictures that Anton used when testifying.

The jury ultimately acquitted Natale on all three

fraud counts but found him guilty on the false statement counts. Natale moved for a new trial based on the

jury’s use of the demonstratives during deliberations,

which the district court denied. He made no other

post-trial motions and received a ten-month prison sentence on top of a $40,000 fine. Natale now appeals.
14 No. 12-3231

II. Discussion

A. The Plain Error in the District Court’s False Statement Instructions Was Harmless

Natale’s primary challenge to his conviction focuses

on the jury instructions that the trial judge issued on the

false statement counts. The government responds that

Natale has waived any challenge to these instructions

because he affirmatively approved of them at the jury

instruction conference. Moving through the proposed

instructions one by one, the district court asked, “[Proposed Instruction] No. 29 is making false statements

instruction out of 18 United States Code, Section 1001, and

18 United States Code, Section 1035. Any problem with

that?” Defense counsel’s response: “No.” Counsel engaged in a similar question-and-answer colloquy regarding

the remainder of the instructions on the false statements counts, with the trial court asking counsel if he

“had any problem with” each proposed instruction. Each

time, counsel affirmatively expressed having no problem with the proposed instruction. The government now

suggests that the defense attorney’s comments during

this exchange affirmatively approved the jury instruction, resulting in waiver.

Ordinarily, when a defendant does not object to a

jury instruction before the jury retires to deliberate, the

defendant may later attack that instruction only for plain

error. Fed. R. Crim. P. 30(d); Johnson v. United States,

520 U.S. 461, 465-66 (1997). However, a defendant who

waives—rather than forfeits—his objection cannot avail

himself of even the demanding plain error standard of
No. 12-3231 15

review. See United States v. Olano, 507 U.S. 725, 732-33

(1993) (“Deviation from a legal rule is ‘error’ unless the

rule has been waived.”); United States v. DiSantis, 565

F.3d 354, 361 (7th Cir. 2009) (“Waiver ‘extinguishes any

error’ and ‘precludes appellate review.’ ” (citing United

States v. Pree, 408 F.3d 855, 872 (7th Cir. 2005)). He has no

recourse and generally must live with his earlier decision not to press the error. Such waiver occurs only

when a defendant makes a “knowing and intentional

decision” to forgo a challenge before the district court.

United States v. Jaimes-Jaimes, 406 F.3d 845, 848 (7th Cir.

2005). In contrast, when the “defendant negligently

bypasses a valid argument,” he has merely forfeited the

claim and can raise it on appeal, subject to plain error

review. United States v. Vasquez, 673 F.3d 680, 684 (7th Cir.

2012) (citing United States v. Anderson, 604 F.3d 997, 1001

(7th Cir. 2010)). We generally construe waiver “liberally

in favor of the defendant.” Jaimes-Jaimes, 406 F.3d at 848.

Although passive silence with regard to a jury instruction permits plain error review, see Fed. R. Crim. P. 30(d);

see, e.g., United States v. Mitan, 966 F.2d 1165, 1177 (7th

Cir. 1992), a defendant’s affirmative approval of a proposed instruction results in waiver, e.g., United States

v. Courtright, 632 F.3d 363, 371 (7th Cir. 2011). Our cases

have strictly applied this rule to affirmative expressions

of approval without examining whether the statements

were a “knowing and intentional decision” or resulted
16 No. 12-3231

Other circuits have not applied this rigid rule and instead 2

have analyzed whether a deliberate, strategic reason could

have justified the attorney’s affirmative approval of a jury

instruction. United States v. Rucker, 417 F. App’x 719, 721-22 (10th

Cir. 2011) (non-precedential decision); Virgin Islands v. Rosa, 399

F.3d 283, 291 (3d Cir. 2005); United States v. Perez, 116 F.3d 840,

845-46 (9th Cir. 1997) (en banc); United States v. Drougas, 748

F.2d 8, 30 (1st Cir. 1984) (“Defense counsel explicitly approved

the reasonable doubt instruction and is thus precluded . . .

from now objecting absent plain error.”); United States v.

Wiggins, 530 F.2d 1018, 1020 (D.C. Cir. 1976) (applying plain

error standard when defense counsel expressed satisfaction

with jury instruction).

from “negligently bypass[ing] a valid argument.” See 2

Courtright, 632 F.3d at 371; United States v. O’Connor, 656

F.3d 630, 644 (7th Cir. 2011); DiSantis, 565 F.3d at 361;

United States v. Griffin, 493 F.3d 856, 863 (7th Cir. 2007)

[hereinafter Griffin I]; United States v. Anifowoshe, 307 F.3d

643, 650 (7th Cir. 2002); United States v. Salerno, 108 F.3d

730, 742 (7th Cir. 1997); United States v. Lakich, 23 F.3d 1203,

1207-08 (7th Cir. 1994); United States v. Canino, 949 F.2d 928,

940 (7th Cir. 1991). As a result, affirmative statements as

simple as “no objection” or “no problem” when asked

about the acceptability of a proposed instruction have

resulted in waiver. See O’Connor, 656 F.3d at 644; Griffin I,

493 F.3d at 863; Anifowoshe, 307 F.3d at 650; United States

v. Griffin, 84 F.3d 912, 923-24 (7th Cir. 1996) [hereinafter

Griffin II]. But see United States v. Roglieri, 700 F.2d 883, 888

(2d Cir. 1983) (applying plain error review where defense

counsel explicitly expressed no objection to the jury
No. 12-3231 17

instruction). We have applied this rule strictly because of

the difficulty in teasing out the subjective motivations

behind the “no objection” statement—from that statement

alone, a court cannot easily discern whether the attorney

bypassed a challenge for strategic reasons (which would

result in waiver) or whether the attorney simply failed

to recognize error that he otherwise would have raised.

As Anifowoshe explained, failure to find waiver from

affirmative statements of “no objection” and the like

would “create an almost insurmountable standard to

proving waiver.” 307 F.3d at 650.

This approach can sometimes produce especially harsh

results. Just as the district court did in Natale’s case, a

thorough district court judge will almost always hold a

jury instruction conference and put up the proposed

instructions, one by one, for discussion by the attorneys.

See United States v. Hollinger, 553 F.2d 535, 542 (7th Cir.

1977) (“An on-the-record instructions conference . . . clearly

enables the trial judge, in advance of instructing the

jury, to have erroneous aspects [of the instructions]

pointed out to him.”). The result: A trial court will almost

always require of counsel some affirmative response—

such as “no objection” or “no problem”—that will operate

as waiver on appeal. Only rarely will a jury instruction conference provide the opportunity for agnostic

silence that preserves plain error review. In short, as our

cases have applied this rule, a defense attorney who has

not objected to a proposed instruction will nearly always

waive any potential objection, regardless of whether his

“no objection” resulted from a reasoned, strategic deci-
18 No. 12-3231

Such harshness is only magnified by the importance of the 3

jury instruction in a trial. Even though erroneous jury instructions are not the type of structural error that necessarily

creates harm in a criminal trial, see United States v. Griggs, 569

F.3d 341, 344 (7th Cir. 2009), the Rules of Civil Procedure

recognize the weighty role jury instructions fill: In all but the

context of jury instructions, a party who fails to preserve

an error in a civil trial has no recourse on appeal. In contrast,

a party can still challenge a jury instruction in a civil case

for plain error notwithstanding his earlier failure to object.

Fed. R. Civ. P. 51(d).

sion or from a negligent failure to recognize the error.3

An approach that might mitigate this harshness and

leave open a wider window for forfeiture than our cases

have previously done could be considered when, as in

this case, defense counsel’s affirmative approval of the

jury instruction is nothing more than a simple “no” or

“no objection” during a rote call-and-response colloquy

with the district judge. In such an instance, we could more

closely examine whether the defendant has truly waived

his challenge to the jury instruction or merely forfeited

it. Cf. United States v. Alcala, 678 F.3d 574, 579 (7th Cir.

2012) (“[N]arrative responses in a plea colloquy are

superior to inquiries from the court that elicit ‘yes’ or ‘no’

answers[.]”); United States v. Groll, 992 F.2d 755, 760 n.7

(7th Cir. 1993) (“[S]imple affirmative or negative answers

to the court’s rote interrogatories give us pause in

finding that [the defendant] entered her plea knowingly.”);

United States v. Fountain, 777 F.2d 351, 356 (7th Cir. 1985)

(“Simple affirmative or negative answers or responses
No. 12-3231 19

which merely mimic the indictment or the plea agreement cannot fully elucidate the defendant’s state of

mind as required by Rule 11.”).

Additionally, we note that waiver is not an absolute

bar on our consideration of issues not preserved below,

even if intentionally foregone for strategic reasons. When

the “interests of justice” so require, we may reach the

merits of a waived issue. See Fleishman v. Cont’l Cas. Co.,

698 F.3d 598, 608 (7th Cir. 2012) (citing Judge v. Quinn, 624

F.3d 352, 360 (7th Cir. 2010)). Perhaps erroneous jury

instructions—especially jury instructions that inaccurately state the law by minimizing or omitting elements

required for conviction—would more readily present

the circumstances that allow consideration of waived

issues: a “miscarriage of justice,” “equities heavily

preponderat[ing] in favor of correcting” the error, or

“plain error that seriously affected the fairness, integrity, or public reputation of the judicial proceedings.”

Id. at 608-09 (citing 36 C.J.S. Federal Courts § 458)); see

also Olano, 507 U.S. at 736 (noting that “conviction or

sentencing of an actually innocent defendant” qualifies

as a “miscarriage of justice”).

In any event, we need not reach any of these issues

in this case for even in applying plain error review to the

instructions in Natale’s case, we find no error requiring

a new trial. Thus, we leave open the question of whether

Griffin I, Anifowoshe, and our other waiver cases have

drawn too confining a line by viewing affirmative

approval so expansively as to include “no objection” in

response to a trial court’s inquiry. And neither do we
20 No. 12-3231

address today whether Rule 30(d) requires the more

searching analysis used by other circuits that dives into

the subjective motivations of counsel, hoping to discern

whether strategy or inadvertence motivated the affirmative approval. Finally, we express no opinion on

whether the erroneous instructions in this case present

the interests of justice that require our consideration

notwithstanding any waiver. In short, when reviewing

the jury instructions under plain error as Natale asks of

us, we see no reason to vacate his conviction.

Plain error requires “obvious” error that is “clear under

current law.” United States v. McGee, 60 F.3d 1266, 1271-72

(7th Cir. 1995). Even then, reversal is appropriate only

when the error affects the defendant’s substantial rights.

United States v. Garcia, 580 F.3d 528, 536 (7th Cir. 2009).

Natale raises four challenges to the jury instructions in his

case. First, he argues that the district court improperly

failed to instruct the jury that conviction under § 1035

requires that the false statement be made in connection

with a matter involving a health care benefit program.

Second, Natale states that the jury instruction should

have required false statements material to the health care

benefit program. Third, Natale suggests that § 1035 requires specific intent to mislead or deceive and that the

district court did not so inform the jury. Finally, Natale

argues that the jury instruction as given violates due

process by permitting arbitrary or discriminatory enforcement. Although portions of the district court’s instruction contained errors, these errors did not affect

Natale’s substantial rights.
No. 12-3231 21

At trial, the district judge provided the following instructions 4

on the false statements charges:

Counts IV and V charge the defendant with making false

statements and representations relating to healthcare

matters. To sustain the charge of making false statements

relating to healthcare matters, the government must prove

the following propositions:

First, the defendant made a false, fictitious, or fraudulent

statement or representation.

Second, the statement or representation was material.

Third, the statement or representation was made knowingly

and willfully.

And fourth, the defendant did so in connection with the

delivery of or payment for healthcare benefits, items, or

services.

If you find from your consideration of all the evidence that

each of these propositions has been proved beyond a

reasonable doubt as to a particular count, then you should

find the defendant guilty as to that count.

If, on the other hand, you find from your consideration

of all the evidence that any one of these propositions

has not been proved beyond a reasonable doubt to a

(continued...)

1. The District Court’s Plain Error in Omitting the

Health Care Benefit Program Requirement from

the Jury Instruction Was Harmless

Natale’s first challenge to the jury instruction accuses

the trial judge of omitting an essential element of the

offense from the instruction. Section 1035 prohibits, “in 4
22 No. 12-3231

(...continued) 4

particular count, then you should find the defendant not

guilty.

A statement is false or fictitious if untrue when made and

then known to be untrue by the person making it or causing

it to be made.

A statement or representation is fraudulent if known to be

untrue and made or caused to be made with intent to

deceive.

A false or fraudulent statement, pretense, or representation

is material if it had the effect of influencing the action of a

person or entity or was capable of or had the potential to do

so. It is not necessary that the statement, pretense, or

representation actually have that influence or be relied on

by the person or entity so long as it had the potential or

capacity to do so.

An act is done willfully if done voluntarily and intentionally

and with intent to do something the law forbids.

A health care benefit program is “any public or private plan 5

or contract, affecting commerce, under which any medical

benefit, item, or service is provided to any individual and

includes any individual or entity who is providing a medical

benefit, item, or service for which payment may be made

under the plan or contract.” 18 U.S.C. § 24(b). Courts have

interpreted “affecting commerce” to mean affecting interstate

commerce. See United States v. Klein, 543 F.3d 206, 211 (5th

Cir. 2008).

any matter involving a health care benefit program,5

knowingly and willfully . . . mak[ing] any materially false,

fictitious, or fraudulent statement[] or representation[] . . .
No. 12-3231 23

in connection with the delivery of or payment for

health care benefits, items, or services[.]” 18 U.S.C.

§ 1035(a)(2). Natale argues that the jury instruction erred

in omitting the health care benefit program requirement. We agree but find that error harmless.

a. Conviction Under § 1035 Requires as an Essential

Element of Proof that the Defendant Made the

False Statement in a Matter Involving a Health

Care Benefit Program

We cannot find any case in our circuit clearly laying

out the essential elements for § 1035. Nor has our circuit

yet adopted a pattern jury instruction for this offense.

In crafting the jury instruction, though, the district court

appeared to rely on the pattern jury instruction for 18

U.S.C. § 1001 and identified four elements required for

conviction under § 1035: (1) making a false, fictitious,

or fraudulent statement or representation (2) that is

material, (3) knowingly and willfully made, and (4) done

in connection with the delivery of or payment for

healthcare benefits, items, or services. A quick comparison

of § 1035 with this jury instruction reveals that the trial

court never instructed the jury that the false statement

must arise in a “matter involving a health care benefit

program.”

Omission from the jury instruction of an essential

element of the offense is erroneous. See Neder v. United

States, 527 U.S. 1, 9-10 (1999); United States v. Griggs, 569

F.3d 341, 344 (7th Cir. 2009). We conclude that “any matter
24 No. 12-3231

involving a health care benefit program” forms an essential

element of the offense. Other circuits have agreed, explaining that the government must prove a link to a health care

benefit program to secure conviction under § 1035 and

other health care offenses. In reviewing a challenge to the

sufficiency of the evidence, for example, the Sixth Circuit

noted that “[t]o establish guilt under [§ 1035] . . . the

Government must prove that the defendant knowingly

and willfully made false statements or representations

in connection with the delivery of or payment for

health care benefits, items, or services and in a matter

involving a health care benefit program.” United States

v. Hunt, 521 F.3d 636, 647-48 (6th Cir. 2007) (internal

punctuation omitted); see also United States v. Klein, 543

F.3d 206, 211 (5th Cir. 2008) (holding health care benefit

program requirement is essential element of 18 U.S.C.

§ 1347); United States v. Whited, 311 F.3d 259, 261-62

(3d Cir. 2002) (analyzing health care benefit program requirement of 18 U.S.C. § 669 (embezzlement in connection with health care) as essential element of crime).

The language of 18 U.S.C. § 1001(a) also supports this

conclusion. The health care benefit program requirement is the jurisdictional element of § 1035. It largely

tracks, both in words used and placement within the

statute, the jurisdictional element of § 1001(a). Compare

§ 1035(a) (“[w]hoever, in any matter involving a health

care benefit program . . .”), with § 1001(a) (“whoever, in

any matter within the jurisdiction of . . . [a] branch of the

Government of the United States . . .”). The jurisdictional

element of § 1001 is an essential element of that offense, see
No. 12-3231 25

United States v. Moore, 446 F.3d 671, 677 (7th Cir. 2006),

supporting our conclusion that the health care benefit

program requirement likewise qualifies as an essential

element of § 1035. Cf. United States v. Ranum, 96 F.3d 1020,

1027 (7th Cir. 1996) (finding analogy to § 1001 a “useful

avenue of exploration, in light of the dearth of case law

interpreting” the false statement statute at issue). Indeed,

the legislative history makes clear that, in creating health

care fraud and related crimes, Congress worried most

about fraud perpetrated on insurance companies that

drove up the cost of health insurance and, more generally,

health care. See Health Care Fraud: All Public & Private

Payers Need Federal Criminal Anti-Fraud Protections,

H.R. Rep. No. 104-747, at 2, 12 (1996). Labeling a “matter

involving a health care benefit program” anything other

than an essential element of the crime would seem incongruent with the concerns that motivated the law.

The government does not dispute the district court’s

failure to instruct the jury on the statute’s health care

benefit program language. Instead, it argues that the

court’s instruction on the fourth element “came freighted”

with the health care benefit program requirement because that instruction required a connection to “the

delivery of or payment for health care benefits, items or

services.” Additionally, the government continues, the

judge had instructed the jury on the meaning of “health

care benefit program” several minutes earlier when

describing the health care fraud counts. Bridging the

analytical gap between these two instructions and the

statute’s jurisdictional element, however, is a distance

too wide for the jury to cross on its own: Neither of these
26 No. 12-3231

instructions explicitly requires for conviction under § 1035

finding a matter involving a health care benefit corporation. And the trial judge gave no indication that any of the

fraud instructions also applied to the false statements

counts. What is more, the instruction on the fourth element

of the false statements charge presented “health care

benefits” alongside “items” and “services,” phrased in the

disjunctive. Thus, the fourth instruction, standing alone,

suggests to the jury that the absence of health care benefits

is irrelevant if the facts demonstrate a false statement

made in connection with health care items or health care

services. But under the statutory text, even conviction

for false statements made in connection with items or

services still must relate to a “matter involving a health

care benefit program.” The district court’s jury instructions did not convey that requirement.

b. Although this Error Was Plain, Omitting the

Health Care Benefit Program Requirement from

the Jury Instruction Did Not Affect Natale’s

Substantial Rights

The government asserts that even if error occurred, the

error was not “plain” or “clear” because no pattern jury

instruction existed for § 1035 and no case affirmatively

delineated the elements of the offense. See Olano, 507

U.S. at 734. The government ignores the text of the

statute, however, which quite clearly imposes the health

care benefit program requirement. Moreover, other

circuits have found this requirement an essential element of § 1035 and other related offenses. See Klein,
No. 12-3231 27

The government correctly characterizes Natale’s argument

6

as relying solely upon the “purpose, context, and legislative

history” of the statute. While true that Natale could have

provided more expansive textual analysis, Natale’s failure to

mine the statutory text for favorable arguments does not

require us to close our eyes to the language of Congress.

543 F.3d at 211; Hunt, 521 F.3d at 647-48; Whited, 311

F.3d at 261-62. Thus, the error was “clear under

current law.” United States v. Eberhart, 467 F.3d 659, 668

(7th Cir. 2006).6

Nevertheless, we see no harm in the district court’s

failure to instruct the jury on the health care benefit

program requirement. See, e.g., Neder, 527 U.S. at 9-10

(harmless error analysis applies to jury instructions

omitting element); Griggs, 569 F.3d at 344-45 (same). No

one disputes that Medicare qualifies as a health care

benefit program. See United States v. Redcorn, 528 F.3d 727,

734 (10th Cir. 2008) (noting Medicare and Medicaid are

“unquestionably” health care benefit programs). And

all agree that the surgeries at issue involved Medicare:

Natale admits billing Medicare for the surgeries and

admits to falsities in his operative reports, which—as we

explain below—are material to Medicare’s payment for

the surgeries. Because “[t]here was never doubt” that the

surgeries “involved” a health care benefit program, no

harm resulted from the district court’s failure to instruct

on this issue. See Griggs, 569 F.3d at 345 (“There was

never doubt that the conspiracy had involved the use

of interstate communications by wire, which may be
28 No. 12-3231

Natale also argues that criminalizing false statements un- 7

hinged from the health care benefit program requirement

would punish a broad swath of innocent conduct that Congress

never intended to reach. For example, a patient who lies on

the new patient questionnaire regarding his lifestyle habits

(e.g., alcohol or tobacco use), past diseases, etc. may violate

the law because such false statements would be made in

connection with the delivery of health care services. Natale is

correct, but these concerns are assuaged by our holding that

§ 1035 requires a matter involving a health care benefit

program and false statements material to that health care

benefit program. As we explain, these erroneous jury instructions were harmless in Natale’s case, a result he cannot avoid

by postulating how the government might abusively apply

§ 1035 on a different set of facts.

why the lawyers and the district judge didn’t notice

the omission from the instructions.”).7

2. The District Court’s Plain Error in Failing to Instruct the Jury that the False Statements Must

Be Material to the Health Care Benefit Program

Was Harmless

Natale’s next challenge attacks the district court’s

materiality instruction. As given, the instruction permitted the jury to convict as long as the false statement

“had the effect of influencing the action of a person or

entity or was capable of or had the potential to do

so.” (Emphasis added.) He posits that, by requiring

materiality only as to a “person or entity,” the jury instruction impermissibly broadened the scope of the statute
No. 12-3231 29

to include prosecution for false statements that relate to

the delivery of health care benefits, items, or services

but that have no effect on a health care benefit program.

Natale urges that conviction under § 1035 requires false

statements material to a health care benefit program

rather than to any person or entity. Once again, Natale

provides the proper interpretation of the statute but,

because no harm flowed from this erroneous instruction,

we see no need to overturn Natale’s conviction.

a. False Statements Under § 1035 Must Be Material

to the Health Care Benefit Program

Section 1035 only criminalizes “materially false, fictitious,

or fraudulent statements or representations.” (Emphasis

added.) It does not, however, precisely describe to what

or to whom the statements must be material. The text offers

two possible answers. On one hand, “materially” could

refer backward to the prefatory clause of the statute and

require statements material to a health care benefit program. On the other, “materially” could look forward in

the statute, requiring statements material to the delivery

of or payment for health care benefits, items, or services.

Either reading seems plausible from the text.

With the text ambiguous, we turn to similarly worded

statutes and the legislative history for guidance. Analogy

to § 1001 again proves helpful but, at first glance, not

dispositive. Materiality under § 1001 requires “a natural

tendency to influence, or be capable of influencing, the

decision of the decisionmaking body to which it was

addressed.” United States v. Lupton, 620 F.3d 790, 806
30 No. 12-3231

(7th Cir. 2010); accord United States v. Turner, 551 F.3d 657,

663 (7th Cir. 2008) (quoting Kungys v. United States, 485

U.S. 759, 770 (1988)). Thus, courts have applied the materiality requirement of § 1001 to the jurisdictional element, requiring statements material to an agency within

the U.S. government. In § 1035, the corresponding jurisdictional element is the health care benefit program

requirement. Thus, applying the logic of § 1001 cases to

§ 1035 requires false statements material to the health

care benefit program. But § 1001 has no element

analogous to the “in connection with . . .” element in

§ 1035. The text of § 1001 thus contains only one point

of reference for “materially.” In contrast, § 1035 offers

two possible references, making § 1035 more complex

and minimizing the value of § 1001 as a comparator.

A close look at how the materiality requirement

became a part of the statute, however, resolves the ambiguity and solidifies the comparative relevance of § 1001.

In the beginning, the version of § 1035 passed in the

House contained no materiality requirement. It read:

Whoever, in any matter involving a health care

benefit program, knowingly makes any false, fictitious, or fraudulent statements or representations . . .

in connection with the delivery of or payment

for health care benefits, items, or services, shall

be fined . . . or imprisoned[.]

Health Insurance Portability and Accountability Act of

1996, H.R. 3103, 104th Cong., tit. II, § 244(a) (1996) (as

passed by the House on Mar. 28, 1996). The House

bill largely tracks the language of what ultimately
No. 12-3231 31

 The bills have one other difference as well. The House version 8

refers to a “health care benefit program” while the Senate

version uses the term “health care program.” Each phrase fills

the same role, however, and we use both phrases interchangeably in this discussion.

became law, with two main differences: It omits “willfully,” opting instead for only “knowingly” as the mens

rea. And the House bill also lacks the word “materially,”

which in the final enactment precedes “false, fictitious,

or fraudulent statements or representations.”

These two words are found in the Senate bill, however.

In the Senate version, someone commits a crime when he:

in any matter involving a health care program, knowingly and willfully . . . makes any materially false,

fictitious, or fraudulent statement or representation[.]

H.R. 3031, tit. V, § 544(a) (as amended and enacted by

the Senate on Apr. 23, 1996). Thus, the Senate bill con- 8

tains the “materially” language absent from the House

bill. It also much more closely tracks the language of

§ 1001, simply swapping out the federal government

jurisdictional element in § 1001 for the health care

program jurisdictional element relevant to the goals of

§ 1035. Compare H.R. 3031, tit. V, § 544(a) (as amended and

enacted by the Senate on Apr. 23, 1996), with § 1001(a)(2)

(“[W]hoever, in any matter within the jurisdiction of

the executive, legislative, or judicial branch of the Government . . ., knowingly and willfully . . . makes any

materially false, fictitious, or fraudulent statement or

representation . . . shall be fined . . . or imprisoned[.]”).
32 No. 12-3231

More importantly, in the Senate version, “materially” can

only refer to a health care program for precisely the

same reason “materially” in § 1001 refers only to an

entity in the jurisdiction of the federal government:

the Senate version lacked the “in connection with . . .”

language found in the House bill so there was nothing

else in the Senate version to which “materially” could

refer. Thus, the Senate version quite clearly required

false statements material to the health care benefit program, not false statements material to the delivery of

health care benefits, items, or services.

The ambiguous language of the final enactment resulted from the combination of the Senate and House

versions in Conference. The Conference Committee

adopted the House language—including its “in connection

with . . .” text—but inserted the “willfully” and “materially” requirements found in the Senate bill. H.R. Conf. Rep.

No. 104-736, at 259 (1996). Thus, when the Conference

Committee adopted the Senate’s “materially” language, it

also must have adopted the meaning ascribed to that

language by the Senate. See Int’l Ass’n of Bridge, Structural,

& Ornamental Ironworkers v. NLRB, 946 F.2d 1264, 1268-69

(7th Cir. 1991) (looking to Senate Report for statutory

meaning when Conference Committee adopted Senate

version of bill); Frock v. U.S. R.R. Ret. Bd., 685 F.2d 1041,

1046 n.6 (7th Cir. 1982) (looking to explanation of Senate

version of bill in Conference Report when Senate version

ultimately adopted into law); see also Valero Energy Corp.

v. United States, 569 F.3d 626, 634 (7th Cir. 2009) (“A

conference report, unlike the words of a single [legislator], is often a good record of Congress’s intent[.]”). And
No. 12-3231 33

because the Senate used “materially” to mean “material

to a health care program” so too must that be the

meaning of “materially” in the final enactment.

Finally, if statements material to the delivery of health

care benefits, items, or services were sufficient to

convict, the statute would criminalize a wide swath of

seemingly innocent “white lies” totally unconnected to

the conduct that motivated passage of the statute, see

footnote 7, supra—health care fraud that detriments

health care payers. See H.R. Rep. No. 104-747, at 2, 12

(“Congress should enact legislation to make health care

fraud against public and private payers a Federal criminal

offense.”). Unless compelled to do so by the text, we are

generally skeptical of interpretations of criminal statutes

that broadly criminalize seemingly innocent activity.

Cf. Staples v. United States, 511 U.S. 600, 610 (1994)

(noting “particular care [Supreme Court has] taken to

avoid construing a statute to dispense with mens rea

where doing so would ‘criminalize a broad range of

apparently innocent conduct’ ” (quoting Liparota v. United

States, 471 U.S. 419, 426 (1985)); United States v. Yermian,

468 U.S. 68, 71 (1984) (noting “if Congress had intended

to prohibit all intentional deceit of the Federal Government, it would have used . . . broad language . . . which

by its specific terms, extends broadly to every conspiracy

to defraud the United States . . . .” (internal punctuation

omitted)). In the end, nothing supports a reading of

the statute that would require false statements material

to the delivery of health care benefits, items, or services

when the House bill contained no such materiality requirement and the Senate bill tied the materiality require-
34 No. 12-3231

Kungys involved the meaning of materiality under a different

9

statute, but it also explained that, in the context of criminal

false statements, “material” is a “term[] that ha[s] accumulated

settled meaning under either equity or the common law.” 485

U.S. at 770. Thus, in using the word, “Congress means to

incorporate [its] established meaning[.]” Id. As with the

statute at issue in Kungys, when determining the meaning of

“materiality” in § 1035, “we see no reason not to follow what

has been done with the materiality requirement under other

statutes dealing with misrepresentations[.]” Id. at 772.

The ambiguity in the statute combined with the dearth of case 10

law specifically interpreting the materiality requirement of

(continued...)

ment to the health care benefit program.

This understanding of “materially” is notably absent

from the district court’s jury instructions, which

broadened materially to include statements influencing

or capable of influencing any person or entity. A proper

instruction on the materiality element in § 1035 would

require that false statements “ha[ve] a natural tendency

to influence, or [are] capable of influencing, the decision

of” the health care benefit program. Kungys, 485 U.S.

at 770.

9

b. The District Court’s Erroneous Materiality Instruction Was Harmless

Although the district court gave an erroneous

materiality instruction, given the proof and arguments

at trial, that error was harmless. During closing argu- 10
No. 12-3231 35

(...continued) 10

§ 1035 also suggests that such error was not plain. See Olano,

507 U.S. at 734 (plain error requires “error [that] is clear

under current law”).

ments, the government told the jury that the false statements must “have the effect of influencing the action

of Medicare or [were] capable of or had the potential to

do so.” Thus, the government never presented at trial

the argument over which Natale now frets—that he

violated the statute because his false statements in the

operative reports were material to future treatment

decisions made by other doctors. Instead, it argued and

presented proof of materiality under the meaning

Natale now advances, that the false statements contained in the operative reports and other notes were

material to Medicare.

To that end, the government offered evidence that,

when Medicare audits claims, it sometimes requests

operative reports as well as other physician notes and

documentation. Admittedly, Medicare never performed

an audit in this case and never actually viewed the operative reports containing the false statements. But materiality requires only a potentiality of influencing the

decisionmaker; it does not require actual reliance. United

States v. Gulley, 992 F.2d 108, 112-13 (7th Cir. 1993). Notwithstanding Natale’s assertions on appeal, he never

argued to the jury that the false statements in the operative reports were not material to Medicare and never

challenged the evidence that Medicare would rely on
36 No. 12-3231

operative reports during an audit. Instead, Natale

argued intent. He admitted mistakes in the operative

reports but told the jury those errors resulted from carelessness and an aversion to paperwork, not knowing

and willful lies. And neither did the government ever

argue that other doctors’, rather than Medicare’s, reliance

on the operative reports satisfied the materiality requirement. True, the government did at times characterize

these reports as important documents for a patient’s

future treatment. But it did so only to attack Natale’s

defense of carelessness: according to the government, a

surgeon who highly valued and deeply cared for his

patients—as Natale told the jury he did—would not

haphazardly prepare documents so important for and

critical to a patient’s future care. Thus, the government

told the jury, he must have knowingly and willfully lied.

In short, Natale’s defense in this court differs from

the defense he presented to the jury. The materiality of

the statements in the operative reports simply was not in

issue at trial. The government conceded that conviction

required materiality as to Medicare and presented proof

that Medicare would look to the operative reports in

the event of an audit. Natale left that evidence unchallenged.

Natale suggests that his acquittal of health care fraud

shows otherwise. “[T]he jury,” he argues, “did not believe

a relationship between the alleged ‘false statements’ and

Medicare was proved beyond a reasonable doubt” or it

would have convicted him of fraud. This conclusion,

however, assumes congruence between all elements of
No. 12-3231 37

health care fraud and false statements. In truth (and

perhaps unsurprisingly), the statutes differ. As explained

more fully below, the health care fraud statute requires

proof of specific intent to defraud while the false statement statute requires only knowing and willful false

statements. Given Natale’s defense focusing heavily on

his innocent state of mind, the jury could have concluded

that Natale lacked the specific intent to deceive required

for a fraud conviction but nevertheless willfully filled

his operative reports with statements he knew were

false. As such, the jury’s verdict is consistent with our

own interpretation of the statute.

Finally, both Natale and amicus lament the possibility

that misstatements in operative reports and other

medical records may lead to federal indictment. Amicus

especially worries about the chilling effect cases such as

Natale’s may have on medical record-keeping and its

consequences on patient care. This concern is not completely misguided, but it does ignore the knowing and

willful requirement in § 1035. The truly innocent

mistakes over which amicus worries are not the deliberate falsehoods that federal law criminalizes. Natale

was not convicted because he made innocent mistakes

arising from carelessness in the preparation of his operative reports. He was convicted because the jury did not

believe Natale when he told them he made innocent

mistakes. In any event, to the extent § 1035 produces

“unduly harsh result[s] on those who intentionally

make false statements to [health care benefit providers],

it is for Congress and not this [c]ourt to amend the

criminal statute.” Yermian, 468 U.S. at 75.
38 No. 12-3231

For these reasons, no harm accrued from the district

court’s inadequate jury instruction on materiality. That

element held a secondary role to the real focus of the

trial—Natale’s state of mind. Natale cannot now argue

harm from this error by putting forth a new defense on

appeal simply because the jury disbelieved the one he

proffered at trial.

3. The District Court Did Not Err in Omitting a

Specific Intent Instruction 

Natale argues that conviction under § 1035 requires

proof of a specific intent to deceive. Neither the text nor

context of the statute suggests § 1035 requires a specific

intent to deceive.

To begin, nothing in the text of § 1035 explicitly

requires that the defendant make a false statement with

intent to deceive. As the Supreme Court explained when

reviewing similar language in § 1001, nothing in the text

“suggest[s] any additional element of intent, such as

a requirement that false statements be [made] . . . ‘with

intent to deceive the Federal Government.’ ” Yermian,

468 U.S. at 69.

Indeed, when Congress has included intent to deceive

as an element of a false statements crime, it has done

so explicitly. See 18 U.S.C. § 513(a) (criminalizing

“mak[ing], utter[ing], or possess[ing] a counterfeited

security of a State . . . with intent to deceive another

person . . .”); id. § 1033(a)(1) (criminalizing certain false

statements made with “intent to deceive” by persons
No. 12-3231 39

Explicit “intent to deceive” language was not even the only 11

way Congress could have achieved this goal. For example,

Congress could have criminalized false statements made for

the purpose of influencing a health care benefit program, language

it has used in other statutes, too. See 15 U.S.C. § 714m(a)

(criminalizing some false statements made “for the purpose

of influencing in any way the action of the Corporation”); 18

U.S.C. § 1014 (criminalizing false statements made “for the

purpose of influencing in any way the action” of various

federal agencies); id. § 1026 (criminalizing false statements

made “for the purpose of influencing in any way the action of

the Secretary of Agriculture”). But Congress did not even

require this somewhat lesser purpose requirement in § 1035.

“engaged in the business of insurance whose activities

affect interstate commerce”); id. § 1861 (criminalizing

false statements labeling property a public land if made

with “intent to deceive the person to whom such representation is made”); id. § 2073 (criminalizing false

entries of official records made with “intent to deceive”).

Each of these statutes predated the enactment of § 1035.

Thus, had Congress wanted to require specific intent in

prosecutions for false statements related to health care

services, it could easily have used the “intent to deceive”

language found in these statutes. See Yermian, 468 U.S. 11

at 73. But Congress did not. Instead, it required false

statements made in connection with the delivery of or

payment for health care in a matter involving a health

care benefit program and nothing more.

Given the absence of such statutory language, Natale

looks to the “willfully” requirement as the textual anchor
40 No. 12-3231

for an intent to deceive requirement. “[W]illfully,” however, is “a notoriously plastic word.” United States v.

Pulungan, 569 F.3d 326, 329 (7th Cir. 2009). And we

have previously refused to find an intent to deceive

requirement in “willfulness” language from other, similarly worded false statement statutes. United States v.

Ranum, for example, found no intent to deceive requirement in the “willful” mens rea required for conviction

under the statute criminalizing false statements used to

“obtain” federally-guaranteed student loans. 96 F.3d

at 1027 (analyzing 20 U.S.C. § 1097(a)). In reaching

that conclusion, Ranum strongly suggested conviction

under § 1001 also required no specific intent to deceive.

It specifically approved of the § 1001 pattern jury instruction on willfulness—used in Natale’s case as well—that

made no mention of intent to deceive. Id. at 1027-29. We do

not stand alone in our suggestion that § 1001 has no

specific intent requirement: the Supreme Court has suggested the same. Dicta in Yermian found language supporting a specific intent to deceive “[n]oticeably lacking” from § 1001. 468 U.S. at 73. Given the absence of

explicit “intent to deceive” language in § 1035, we now

follow the lead of Ranum and “refuse[] to supply, by

judicial interpretation, an additional element of specific

intent to deceive.” Ranum, 96 F.3d at 1027.

Notwithstanding the Supreme Court’s guidance in

Yermian, some circuits have imposed a specific intent
No. 12-3231 41

Compare United States v. Riccio, 529 F.3d 40, 46-47 (1st Cir. 2008) 12

(“willfulness” in § 1001 means “nothing more . . . than that the

defendant knew that his statement was false when he made

it or—which amounts in the law to the same thing—consciously

disregarded or averted his eyes from its likely falsity” (quoting

United States v. Gonsalves, 435 F.3d 64, 72 (1st Cir. 2006)));

United States v. Russo, No. 98-3245, 2000 WL 14298, at *5 (10th

Cir. Jan. 10, 2000) (“willful” in § 1001 “does not require proof

of evil intent but rather only that ‘the act [was] done deliberately and with knowledge’ ” (quoting Walker v. United States,

192 F.2d 47, 49 (10th Cir. 1951))); United States v. Hildebrandt, 961

F.2d 116, 118-19 (8th Cir. 1992); (“willful” in § 1001 “simply

means that the defendant did the forbidden act ‘deliberately

and with knowledge.’ It is not necessary that the defendant act

with the intent to deceive the United States” (citations omitted));

and United States v. Verduzco-Contreras, No. 88-5120, 1990 WL

34147, at *3 (9th Cir. Mar. 27, 1990) (“[T]he government need not

prove intent to deceive under 18 U.S.C. § 1001.” (citing United

States v. Vaughn, 797 F.2d 1485, 1490 (9th Cir. 1986))), with

United States v. Guzman, 781 F.2d 428, 431 (5th Cir. 1986) (§ 1001

requires a “false representation . . . that . . . is made with an

intent to deceive or mislead”); United States v. Geisen, 612 F.3d

471, 487 (6th Cir. 2010) (§ 1001 requires that the “statement

was made with knowledge of its falsity and an ‘intent to deceive’ ” (citations omitted)); and United States v. Dothard, 666

F.2d 498, 503 (11th Cir. 1982) (“Proof that the defendant has

the specific intent to deceive by making a false or fraudulent

statement is a prerequisite to conviction under 18 U.S.C. § 1001.”

(citing United States v. Lange, 528 F.2d 1280, 1286 (5th Cir. 1976))).

requirement for conviction under § 1001. Natale relies 12

heavily on these cases and also invokes Judge Eschbach’s

Ranum dissent. Neither provides Natale an escape hatch
42 No. 12-3231

from the glaring absence of this requirement in the text

of the statute, though. The circuit split on § 1001 does

nothing to undermine Ranum’s strong suggestion that, in

this circuit, § 1001 requires no intent to deceive. In fact,

Ranum considered and rejected those cases. 96 F.3d at

1029. Nor does the split call into question Ranum’s holding

that § 1097 likewise requires no specific intent. Both

statutes contain language similar to § 1035, and Natale

provides no real explanation for why Ranum erred and

the minority circuits’ interpretation is correct.

Judge Eschbach’s Ranum dissent similarly offers Natale

no support. Judge Eschbach took issue with the Ranum

majority’s comparison to § 1001, rooting his disagreement in textual differences between § 1097(a) and § 1001.

He explained that, in § 1097(a), the word “willfully”

modified the phrase “obtains by” the making of a false

statement. Ranum, 96 F.3d at 1032 (Eschbach, J., dissenting).

Willfully obtaining through a false statement, he argued,

necessarily requires intent to deceive. Id. The dissent even

admitted “agree[ment] with the majority [that § 1097

would have no intent to deceive requirement] if the

statute said ‘any person who knowingly and willfully . . .

makes a false statement . . . .” Id. That precise language is found in § 1035(a): “Whoever . . . knowingly

and willfully . . . makes any materially false, fictitious,

or fraudulent statements or representations . . . .”

Thus, Judge Eschbach’s reasoning actively undermines

Natale’s argument.

Placing § 1035 within the context of the entire statutory

scheme that Congress enacted only confirms our reading
No. 12-3231 43

of the plain text. Congress enacted § 1035 as part of the

Health Insurance Portability and Accountability Act of

1996 (HIPAA). Along with the provisions of § 1035,

HIPAA criminalized health care fraud (among other

health care specific criminal offenses). See, e.g., 18 U.S.C.

§ 1347(a)(1) (making it illegal to “knowingly and willfully

execute[], or attempt[] to execute, a scheme or artifice

to defraud any health care benefit program”). And

intent to defraud itself requires a specific intent to

deceive or mislead. United States v. Awad, 551 F.3d 930,

940 (9th Cir. 2009) (noting jury was instructed in § 1347

prosecution that “ ‘intent to defraud’ [is] defined as ‘an

intent to deceive or cheat’ ”); United States v. Choiniere,

517 F.3d 967, 972 (7th Cir. 2008) (noting jury instruction

in § 1347 case defined “ ‘intent to defraud’ to mean ‘that

the acts charged were done knowingly with the intent

to deceive or cheat the victims’ ”); United States v. White,

492 F.3d 380, 393-94 (6th Cir. 2007) (to convict under § 1347

“the government must prove the defendant’s ‘specific

intent to deceive or defraud’ ”); see also United States v.

Vallone, 698 F.3d 416, 483 (7th Cir. 2012) (citing United

States v. Howard, 619 F.3d 723, 727 (7th Cir. 2010));

United States ex rel. Baltazar v. Warden, 635 F.3d 866, 868

(7th Cir. 2011) (citing Merck & Co. v. Reynolds, 130 S. Ct.

1784, 1796 (2010)). If health care fraud and health care

false statements both required specific intent to deceive,

the two statutes would criminalize essentially the same

conduct. Especially because conviction for health care

fraud carries twice the maximum penalty as the false

statements statute, compare § 1035(a) (five-year maximum prison term), with § 1347(a) (ten-year maximum
44 No. 12-3231

And just as “willfully” creates no specific intent to deceive 13

requirement, neither does the statute’s materiality requirement.

A material statement has “ ‘a natural tendency to influence, or

[is] capable of influencing, the decision of’ the decisionmaking

(continued...)

prison term (twenty if the crime results in bodily injury)), an interpretation of the two statutes that covers

substantially the same conduct makes no sense. Something must warrant the harsher penalty for the fraud

charges. That something is the enhanced culpability

attendant in a person’s specific intent to deceive or mislead. Fraud requires that proof; false statements do not.

Admittedly, “[t]he mere fact that two federal criminal

statutes criminalize similar conduct says little about the

scope of either.” Pasquantino v. United States, 544 U.S. 349,

359 n.4 (2005). But an interpretation of § 1035 that

required intent to deceive would not merely criminalize

conduct similar to that prohibited by § 1347, it would

result in nearly complete overlap: any false statement

made with intent to deceive would necessarily qualify

as a scheme to defraud under § 1347. We find it odd

that Congress would intend such a result from two

statutes enacted in the same piece of legislation.

In short, the text of § 1035, courts’ interpretations of

similar text in other false statements statutes, and the

context in which Congress enacted § 1035 all require

the conclusion that § 1035 does not require proof of

specific intent to deceive. The district court thus properly

instructed the jury on the statute’s willfulness requirement.13
No. 12-3231 45

(...continued) 13

body to which it was addressed.” Kungys, 485 U.S. at 770. As

such, materiality objectively focuses on a hypothetical listener’s

response to the speech under the circumstances. In contrast,

intent to deceive focuses on the speaker’s motivations for the

speech. Thus, materiality and intent to deceive differ: A

speaker can make materially false statements without intending deception. A speaker can also make immaterial statements hoping to deceive. And, of course, a speaker could

make materially false statements while intending deception.

4. Application of § 1035 to Natale Did Not Violate

Due Process

Natale’s final challenge to the jury instructions asserts

a due process violation. Application of § 1035 to situations where the false statements have no connection to

Medicare, he argues, presents an unconstitutional lack

of clarity that opens the statute to arbitrary and discriminatory enforcement. Natale concedes, however, that

§ 1035 satisfies constitutional rigor when applied to

false statements material to a health care benefit plan.

As we have explained, the proof at trial places Natale’s

case squarely within this category. 

* * *

To summarize, conviction for false statements relating

to health care matters, 18 U.S.C. § 1035(a)(2), requires

proof that the defendant (1) knowingly and willfully

(2) made false, fictitious, or fraudulent statements or

representations (3) in connection with the delivery of or

payment for health care benefits, items, or services (4) in
46 No. 12-3231

any matter involving a health care benefit program, and

(5) the statements were material to the health care

benefit program. While materiality requires a natural

tendency to influence, or be capable of influencing the

health care benefit program, neither the materiality

element nor the willfulness element requires the government to prove the defendant made the false statements with intent to deceive.

The district court’s jury instructions in Natale’s case

did not reflect all of these requirements. Nevertheless,

when viewed against the backdrop of the evidence presented at trial and Natale’s defense to the jury, these

errors did not affect Natale’s substantial rights or

render his trial unfair.

B. Natale’s Conviction Was Not a Manifest Injustice

Natale attacks the sufficiency of proof on which the

jury convicted him of making false statements. He

admits, however, that trial counsel never renewed his

motion for judgment of acquittal at the close of evidence.

Thus, to successfully attack the sufficiency of the evidence, he must show his conviction resulted in a

manifest miscarriage of justice. Turner, 551 F.3d at 662.

This “most demanding standard of appellate review”

permits reversal only if “the record is devoid of evidence

pointing to guilt, or if the evidence on a key element of

the offense was so tenuous that a conviction would be

shocking.” Id. (quoting United States v. Taylor, 226 F.3d

593, 597-98 (7th Cir. 2000)). In attempting to satisfy

this high bar, Natale argues the government produced
No. 12-3231 47

no evidence of either materiality or intent. Not so. To

show materiality, the government presented testimony

that, had Medicare audited the billing codes Natale

submitted, it would have requested operative reports

and medical notes. Because Medicare would have looked

to and relied on these reports and notes in the event of

an audit, the reports and notes were “capable of influencing” the decision of the health care benefit program.

Thus, the record is not “devoid” of evidence on materiality.

And neither is the record “devoid” of evidence on

intent. Natale readily admits he “kept inaccurate and

imprecise records.” The crux of argument at trial

centered on whether that inaccuracy and imprecision

resulted from innocent carelessness or knowing and

willful misrepresentations. The Medicare representative testified that when physicians enroll as providers

under Medicare, they receive multiple notices regarding the need to accurately complete forms and truthfully represent services rendered. Moreover, at least

some of the false statements occurred during or shortly

after the surgery, casting doubt on Natale’s assertions

that he inadvertently described the incorrect procedure

because of his delay in preparing the notes. On top of

that, many of Natale’s notes proved quite detailed—not

the vague generalities that usually accompany inaccuracies resulting from carelessness, inadvertence, or

the passage of time. From all this evidence, the jury could

infer that the false statements resulted from knowing

deliberation rather than careless inadvertence. Natale

ignores this evidence and now re-litigates his carelessness defense on appeal. The jury disbelieved that story,
48 No. 12-3231

and the evidence permitted the jury to infer knowledge and willfulness. As a result, Natale cannot establish that a manifest miscarriage of justice occurred.

C. The District Court Did Not Err in Permitting the Jury

to Take Anton’s Demonstratives into the Jury Room

Natale also appeals the district court’s decision to

permit the jury to bring Anton’s demonstratives into the

jury room during deliberations. We review the district

court’s decision to send demonstratives to the jury room

for abuse of discretion. Salerno, 108 F.3d at 742.

So long as the court is “evenhanded” in ruling on the

evidence, it has “wide discretion” in determining

whether to allow the jury to take an exhibit to the jury

room. Id. at 745. The district court here showed such

fairness, offering Natale as well the opportunity to send

demonstrative exhibits to the jury room (which he ultimately accepted). Nevertheless, Natale argues that the

Anton diagrams misled the jury by “strongly suggest[ing]

to the jury that the bifurcation graft versus tube graft

issue was significant because of the gross difference in

shape, size and general appearance of the grafts in the

illustrations.” In reality, he continues, Anton’s assertions

that the operative reports described a bifurcation graft

were immaterial because the government never argued

that he billed Medicare for such grafts.

Natale is correct that the billing codes he submitted

identified procedures related to the renal arteries, not use

of bifurcation grafts. But he does not dispute that the
No. 12-3231 49

Natale does point to one inaccuracy in the demonstratives. 14

Anton admitted at trial that the demonstrative contained one

error, describing the attachment of one tube graft as “end-toend” when it should have read “end-to-side.” This minor error

has no bearing on the thrust of Natale’s operative reports. In

any event, Anton corrected himself in front of the jury so

the jury was aware of this small mistake.

operative reports contained inaccuracies and that those

inaccuracies suggested use of a bifurcation graft. The

important question is not whether the demonstratives

accurately reflected what he billed to Medicare but

whether the demonstratives accurately reflected what

they purported to show: Natale’s descriptions of the

procedures in the operative reports as compared to the

procedures depicted in the CT scans. Natale gives no

suggestion that they mislead the jury in that respect. He

admits the operative reports contained inaccuracies but

offers no evidence showing the demonstratives inaccurately depict the statements in his operative reports. In 14

that sense, the demonstratives simply portray what, as

the government points out, Natale has conceded.

Nor did the demonstratives have the impermissible

effect of “transporting” Anton into the jury room

during deliberations. The demonstratives used during

Anton’s testimony contained various labels identifying

which diagram depicted Anton’s conclusions and which

diagram depicted the procedure described in Natale’s

operative notes. The government removed these labels

from the exhibits sent to the jury room, however, requiring jurors to identify the content of the demonstra-
50 No. 12-3231

tives from their recollection of Anton’s testimony. Thus,

the demonstratives did not have the effect of sending

Anton himself into the jury room with the jurors. Contrary

to Natale’s suggestion, United States v. Ware does not

require a conclusion otherwise. That case focused on the

admissibility of the evidence, noting only that this error

in admission was “compounded” by the district court’s

decision to allow juror use of the exhibits during deliberations. United States v. Ware, 247 F.2d 698, 700-01 (7th

Cir. 1957). Natale does not contest the admission of the

demonstratives here so Ware offers no support for

his argument.

In short, Natale fully admitted discrepancies between

the procedures described in his operative reports and

the procedures he performed. He cannot now suggest

prejudice in permitting the jury during deliberations

to examine demonstrative evidence consistent with

his own admissions.

D. The District Court Did Not Abuse Its Discretion in

Excluding the Government Report

Natale’s final attempt at overturning his conviction

focuses on the district court’s exclusion of a report published by the Department of Health and Human Services

(HHS). The report showed error rates in Medicare coding

and payments as high as 46% for claims submitted by

vascular surgeons in this region. The district court excluded the evidence as irrelevant and as hearsay. We

review evidentiary rulings for abuse of discretion. United

States v. Cunningham, 462 F.3d 708, 712 (7th Cir. 2006).
No. 12-3231 51

Ultimately, we need not consider Natale’s arguments

on this front because any error in the district court’s

exclusion of the report was harmless. See United States v.

Jackson, 540 F.3d 578, 593 (7th Cir. 2008) (“Even if the

district court erred in excluding such evidence, we will

not reverse if the error was harmless.”).

Relevant evidence has the tendency to make any fact

of consequence more or less probable. Fed. R. Evid. 401.

According to Natale, a governmental report demonstrating a 46% error rate bears directly on his intent,

supporting his argument that he made a good faith

effort to find the Medicare code that most accurately

described the procedure he performed when Medicare

provided no billing code directly on point.

Regardless of the propriety of the district court’s conclusions on relevance and hearsay, Natale’s own brief

explains why, as the case stands now, the report has no

relevance and any error from its exclusion is harmless.

“That the error rate approached 50 percent,” he explained,

“strongly suggests significant caution before inferring

intent to defraud or mislead from an inaccuracy.” Thus,

the only relevance Natale offers to justify admission of

the report lies in the jury’s determination of intent to

defraud or mislead. Natale was acquitted on the fraud

charges, though, and as we have explained, § 1035

requires no specific intent to deceive. The only intent

relevant to Natale’s conviction was whether he

knowingly and willfully included false statements in

the operative reports, a question having nothing to do

with Medicare billing inaccuracies.
52 No. 12-3231

Moreover, false statements in Natale’s operative

reports and other physician notes—not his submission

of the Medicare billing codes—provided the basis for

his conviction under § 1035. Other physicians’ errors in

submitting Medicare billing codes tell us nothing about

the mistakes Natale made in his own records and reports. Because the jury acquitted Natale of the fraud

charges related to his Medicare billing, any error in

the district court’s exclusion of the reports now stands

harmless.

III. Conclusion

The instructions under which the jury convicted Natale

were erroneous. They permitted conviction for false

statements having no relation to a health care benefit

program in direct contradiction to the textual requirements of the statute. Notwithstanding these erroneous

instructions, the proof at trial was more than sufficient

to show that the surgeries described in the indictment

involved a health care benefit program, Medicare,

and that Natale’s false statements were material to

Medicare. Thus, the erroneous instructions were harmless.

Likewise, the government presented sufficient evidence

of materiality and intent so no manifest miscarriage

of justice resulted from Natale’s conviction. Finally,

neither of the challenged evidentiary decisions requires

reversal. The district court’s permission to send the

demonstratives to the jury room during deliberations

was not erroneous, and Natale’s acquittal on the fraud

counts rendered harmless any error in the district court’s
No. 12-3231 53

exclusion of the HHS report. We AFFIRM Natale’s conviction.

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