Opinion ID: 3050183
Heading Depth: 4
Heading Rank: 2

Heading: to obtain, by means of false or fraudulent pre-

Text: tenses, representations, or promises, any of the money . . . owned by . . . any health care benefit pro- gram, in connection with the delivery of or payment for health care benefits, items or services. “As a general matter, when used in the criminal context, a ‘willful’ act is one undertaken with a ‘bad purpose.’ In other words, in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with 13134 UNITED STATES v. DEARING knowledge that his conduct was unlawful.’ ” Bryan v. United States, 524 U.S. 184, 191-92 (1998) (footnote omitted) (quoting Ratzlaf v. United States, 510 U.S. 135, 137 (1994)). To prove that the defendant acted as an aider and abetter, the government must show that the defendant knowingly provided substantial assistance to another’s violation. United States v. Kessi, 868 F.2d 1097, 1103 (9th Cir. 1989). [2] As we have acknowledged in connection with other statutes containing a willfulness requirement, “direct proof” of one’s specific wrongful intent is “rarely available.” United States v. Marabelles, 724 F.2d 1374, 1379 (9th Cir. 1984). But willfulness may be inferred from circumstantial evidence of fraudulent intent. Id. at 1379-80; see also United States v. Tucker, 133 F.3d 1208, 1218 (9th Cir. 1998). A recent Sixth Circuit opinion has applied this reasoning to a section 1347 conviction similar to this case, explaining that “[i]ntent can be inferred from efforts to conceal the unlawful activity, from misrepresentations, from proof of knowledge, and from profits.” United States v. Davis, 490 F.3d 541, 549 (6th Cir. 2007) (internal quotation marks and citation omitted). Davis held that a jury could infer willful intent to defraud where the defendant owned the company, hired and fired employees, frequently visited the offices where the fraudulent conduct occurred, was present during a session where fraudulent activity took place, and covered up evidence of the fraudulent conduct. Id. at 549-50. [3] We similarly conclude that the evidence supports a finding that Dearing willfully participated in Life Springs’ fraudulent billing scheme. Specifically, a reasonable juror could have found that Art was put on notice of Life Springs’ fraudulent billing practices by the October 2002 audit, knew that the company continued these practices after the audit, yet took no action to correct these actions and, in fact, dissuaded serious investigation into the company’s problems, all while continuing to profit from the company’s illegal conduct. Art’s knowledge of the company’s ongoing fraud was established UNITED STATES v. DEARING 13135 by the testimony of Stallings, Munson, and Reynolds, each of whom raised ongoing billing issues with Art after the audit was completed.1 In addition, the jury could have found knowledge of the company’s continuing illegal practices based upon Art’s presence at meetings in which Rodger warned Stallings that “loose lips sink ships” in response to her billing concerns. [4] The jury could also have inferred willful intent from Art’s misrepresentations and efforts to conceal the activity. Despite his knowledge of these ongoing transgressions, Art told investigator Williams that he was unaware of any ongoing fraudulent billing. Art also personally discouraged Reynolds from pursuing her billing concerns with the admonition that she was looking too much at the legal side and not enough at the business side. And although he ostensibly hired Stallings to correct the problems identified in the audit, he disregarded her repeated warnings about ongoing fraud and eventually let her quit rather than implement the changes she recommended. While Art apparently considered firing Rodger in mid-2003—a fact that itself suggests knowledge of the ongoing fraud—he ultimately declined to do so. He also did not terminate his own stake in the business, instead continuing to share the company’s profits equally with his brother. [5] When evaluating the sufficiency of the evidence, this court asks not “whether it believes that the evidence at the trial established guilt beyond a reasonable doubt,” but rather whether “any rational trier of fact” could do so. Jackson, 443 U.S. at 318-19 (emphasis in original). As in the Sixth Circuit’s Davis opinion, the evidence shows that Art had knowledge of the ongoing fraud and misrepresented or covered up inquiries into that fraud, while continuing to profit from the venture. On these facts, we conclude that a reasonable juror 1 Art’s knowledge may also be inferred from the fact that McKenney regularly provided Art with billing information. McKenney’s successor, Dana Vanderbrink, acknowledged doing the same at least once during August or September of 2003. 13136 UNITED STATES v. DEARING could have inferred that Art willfully participated in the scheme to defraud Medicare.