Opinion ID: 724923
Heading Depth: 1
Heading Rank: 2

Heading: The Medicare Anti-Kickback Convictions.

Text: 18 Defendants argue that the district court's instructions incorrectly defined the term willfully in the Medicare anti-kickback statute. 1 We will uphold an instruction on the mens rea element of a federal crime if it fairly and adequately sets forth the statutory requirement. United States v. Otto, 64 F.3d 367, 370 (8th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 956, 133 L.Ed.2d 879 (1996). 19 The parties assert radically different positions on this issue of statutory construction. Based upon the traditional principle that ignorance of the law is no defense, the government urges us to apply the general rule that willfully in a criminal statute refers to consciousness of the act but not to consciousness that the act is unlawful. Cheek v. United States, 498 U.S. 192, 209, 111 S.Ct. 604, 614, 112 L.Ed.2d 617 (1991) (Scalia, J., concurring). Defendants urge us to adopt the exception to that general rule that has long been applied in criminal tax cases--willfulness in a criminal tax statute means the voluntary, intentional violation of a known legal duty. Cheek, 498 U.S. at 201, 111 S.Ct. at 610. Defendants rely most heavily upon Ratzlaf v. United States, 510 U.S. 135, 148, 114 S.Ct. 655, 663, 126 L.Ed.2d 615 (1994), which extended the standard applied in tax cases to criminal prosecutions for willfully violating the anti-structuring provisions of the Money Laundering Control Act of 1986, 31 U.S.C. § 5322(a) (1993). 20 The district court adopted a middle ground. The court declined to instruct the jury that Jain must have intentionally violated a known legal duty because the anti-kickback statute prohibits willful conduct--receiving remuneration for referring patients to a Medicare provider--rather than the willful violation of a statute, as in Ratzlaf. But the court also concluded that a mens rea instruction more rigorous than the traditional rule was appropriate because the literal language of this statute might otherwise encompass some types of innocent conduct. Accordingly, modifying language found in 2 Edward J. Devitt, Charles B. Blackmar & Kevin F. O'Malley, Federal Jury Practice and Instructions p 30.05 (4th ed.1990), the court instructed the jury that the word 'willfully' means unjustifiably and wrongfully, known to be such by the defendant Swaran Jain. It also instructed that good faith was a defense to this charge, explaining that Dr. Jain acted in good faith if he believed he was being paid for promoting North Hills, not for referring patients. 21 We agree with the district court's resolution of this issue. The word willful has many meanings and must be construed in light of its statutory context. Ratzlaf, 510 U.S. at 140-141, 114 S.Ct. at 659. Here, the elements knowingly and willfully were added to the statute in 1980 2 to reflect congressional concern that criminal penalties may be imposed under current law to an individual whose conduct, while improper, was inadvertent. H.R.Rep. No. 1167, 96th Cong., 2d Sess. 59 (1980), reprinted in 1980 U.S.C.C.A.N. 5526, 5572. The reference to inadvertent is rather ambiguous in this context, since the traditional definition of willfully--consciousness of the act--might be sufficient to weed out inadvertent violators. But the statute also has elaborate safe harbor provisions, see § 1320a-7b(b)(3), provisions which have prompted pages of administrative agency explication, see 42 C.F.R. § 1001.952. This confirms that a broad illegal remunerations statute is like the statute at issue in Ratzlaf in that it potentially includes conduct that is not inevitably nefarious. Only conduct that is inevitably nefarious, that is, obviously 'evil' or inherently 'bad,'  warrants the traditional presumption that anyone consciously engaging in it has fair warning of a criminal violation. Ratzlaf, 510 U.S. at 146-148, 114 S.Ct. at 661-62. Thus, we agree with the district court's decision to instruct the jury that the government must meet a heightened mens rea burden. See Liparota v. United States, 471 U.S. 419, 423-33, 105 S.Ct. 2084, 2086-92, 85 L.Ed.2d 434 (1985) (knowingly using food stamp cards in an unauthorized manner requires proof that defendant knew his conduct was unauthorized); United States v. Curran, 20 F.3d 560, 569 (3d Cir.1994); United States v. Hern, 926 F.2d 764, 767 & n. 6 (8th Cir.1991). 22 But that does not mean that the specific instruction adopted in Ratzlaf and the criminal tax cases is appropriate in this case. The statute at issue in Ratzlaf made criminal a willful violation of another anti-structuring statute. Because one cannot willfully violate a statute without knowing what the statute prohibits, the Supreme Court required proof that defendant intentionally violated a known legal duty. See 510 U.S. at 140-141, 114 S.Ct. at 658-59. By contrast, in the Medicare anti-kickback statute, the word willfully modifies a series of prohibited acts. Both the plain language of that statute, and respect for the traditional principle that ignorance of the law is no defense, suggest that a heightened mens rea standard should only require proof that Dr. Jain knew that his conduct was wrongful, rather than proof that he knew it violated a known legal duty. Therefore, the district court's definition of willfully correctly construed the 1980 amendment to § 1320a-7b. Hanlester Network v. Shalala, 51 F.3d 1390, 1399-1400 (9th Cir.1995), does not persuade us to adopt defendants' position. That case is distinguishable because it involved an administrative debarment proceeding. In addition, the court adopted Ratzlaf 's heightened mens rea standard without considering other alternatives to the general rule. Accord United States v. Neufeld, 908 F.Supp. 491, 497 (S.D.Ohio 1995). 23 Alternatively, we conclude that the district court's refusal to give an instruction using the Ratzlaf definition of willfully was harmless error. Dr. Jain's defense was that he did not take money from North Hills for referring patients. On direct examination, he testified that payments for patient referrals are not only unethical and wrong, they are illegal. That testimony effectively took mens rea out of the case, for Dr. Jain acknowledged that, if the jury disbelieved his denials, he would be guilty under his own requested instruction as well as the instruction given by the district court. 24