Opinion ID: 1085312
Heading Depth: 2
Heading Rank: 3

Heading: Sufficiency of the Evidence against Mr. Rufai

Text: Mr. Rufai does not challenge the Government’s contentions that Mr. Ohaka committed health care fraud through First Century, that he was associated with First Century, or that his acts contributed to the health care fraud. He challenges only whether the Government presented sufficient evidence for a rational jury to conclude beyond a reasonable doubt that he knowingly and willfully aided the fraudulent scheme. 1. Assistance in Committing the Fraud at First Century—Actus Reus of Aiding and Abetting Although Mr. Rufai does not challenge that fraud occurred at First Century or that his actions aided the fraud, we briefly review the evidence of his and Mr. Adegboye’s actions to provide foundation for our discussion of whether the Government proved his knowledge of and intent to aid the fraud. By the time Messrs. Ohaka, Rufai, and Adegboye agreed to form First Century in September 2007, Medicare had begun suspending Mr. Ohaka’s right to bill Medicare at his other businesses. Such suspensions normally trigger review of related businesses that bill Medicare. Mr. Ohaka had already set up straw owner schemes at Vitacare and Luant when he approached Messrs. Rufai and Adegboye to set up First Century.8 Messrs. Adegboye and Rufai provided the legal front for the business. Mr. Rufai incorporated First Century, listing only himself as an incorporator and only himself and 8 There is no direct evidence in the record that Messrs. Rufai and Adegboye knew of the other straw owner schemes or of the suspensions of Mr. Ohaka’s other businesses. -29- Mr. Adegboye as directors on the incorporation forms. Mr. Adegboye applied for a Medicare billing number and for authorization to bill Medicare, listing only himself as owner and managing employee. Mr. Adegboye and Mr. Rufai also opened bank accounts in October 2007 and May 2008 for First Century and indicated that Mr. Adegboye was president and that Mr. Rufai was vice-president of the company. They were the only people with authority to transfer or withdraw money from the accounts. Between Medicare approval in May 2008 and early September 2008, the record does not indicate that Mr. Adegboye or Mr. Rufai visited First Century or even that an employee was working there. During that time, Mr. Ohaka submitted fraudulent Medicare claims using First Century’s billing number, including the claims charged in this case. The First Century bank accounts received the Medicare reimbursements for the fraudulent claims Mr. Ohaka submitted. From New York, Mr. Adegboye used this money to pay for the rent, employee salaries, and other expenses for Mr. Ohaka’s companies, including First Century. In short, the Government proved that Mr. Rufai and Mr. Adegboye “aided the [criminal] venture through affirmative action,” Summers, 414 F.3d at 1295, the actus reus element of aiding and abetting. We now turn to the mens rea element, whether they “willfully associated with the charged criminal venture.” Id. 2. Knowingly and Willfully Aiding the Fraud—Mens Rea of Aiding and Abetting Short of incriminating statements from a defendant, proof of knowledge and intent must be based on drawing inferences from the defendant’s actions, the testimony and -30- actions of others, and documentary evidence. That is what the Government attempted to do in this case. Largely through testimony from First Century employees, Medicare investigators, and documents, the Government tried to present Mr. Rufai’s and Mr. Adegboye’s activities on behalf of First Century against the backdrop of Mr. Ohaka’s and First Century’s fraudulent Medicare billing. The Government urged the jury to infer the Defendants’ knowledge and intent to defraud Medicare from the totality of the evidence. Mr. Rufai concedes that Mr. Ohaka executed a fraudulent Medicare billing scheme at First Century, and he does not dispute that his actions contributed to health care fraud. He argues there was insufficient evidence to establish beyond a reasonable doubt that he knowingly involved himself in the scheme to defraud Medicare. We already have reviewed the evidence of the fraud at First Century and of Mr. Adegboye’s and Mr. Rufai’s actions that assisted the fraudulent scheme. We therefore turn to the evidence of Mr. Rufai’s knowledge of the Medicare fraud at First Century and his intent to participate in it. There is no direct evidence of Mr. Rufai’s knowledge of the fraudulent scheme or of his intent to participate, but a jury may make reasonable inferences of knowledge and intent from circumstantial evidence. See Rahseparian, 231 F.3d at 1262. Nevertheless, “inferences may become so attenuated from underlying evidence as to cast doubt on the trier of fact’s ultimate conclusion.” Michel, 446 F.3d at 1128 (quotations omitted). In such a case, a guilty verdict indicates that the jury has impermissibly “engage[d] in a degree of speculation and conjecture that renders its finding a guess or mere possibility.” Jones, 44 F.3d at 865 (quotations omitted). -31-
Mr. Rufai had a longer history with Mr. Ohaka than Mr. Adegboye. Mr. Rufai introduced Mr. Adegboye to Mr. Ohaka. He had other business dealings with Mr. Ohaka and spent time at Mr. Ohaka’s home. One example of their multiple business relationships was evidence that when Mr. Ohaka’s company, Med-Links, acted as guarantor for First Century’s rent, Mr. Rufai acted as the authorized official for MedLinks by signing the guaranty on its behalf. The Government argues that, based on their business dealings and the time that Mr. Rufai and Mr. Ohaka spent together, a reasonable jury could have inferred that Mr. Rufai had knowledge of the health care fraud scheme. The Government attempts to push the evidence too far. In the conspiracy context, we “have warned that courts must be careful to guard against guilt by association.” United States v. Fleming, 667 F.3d 1098, 1105 (10th Cir. 2011) (quotations omitted). Similarly, in the aiding and abetting context, we have held that “[t]he government must prove . . . more than mere presence at the scene of the crime even if coupled with knowledge that the crime is being committed.” Jones, 44 F.3d at 869. The Government has failed to demonstrate that Mr. Rufai was exposed to any criminal activity during his interactions with Mr. Ohaka, much less that he knew illegal activity was taking place at First Century. Although his association with someone who is unquestionably guilty might suggest that Mr. Rufai knew of the fraudulent scheme, that evidence alone would not be sufficient. See United States v. Austin, 786 F.2d 986, 988 (10th Cir. 1986) (“evidence that only places the defendant in a climate of activity that -32- reeks of something foul” is insufficient to demonstrate criminal knowledge (quotations omitted)).
Mr. Rufai assisted in setting up the straw owner scheme. He filled out the articles of incorporation and insurance paperwork, opened bank accounts, and assisted in leasing First Century’s storefront. At no point did he indicate in these documents that Mr. Ohaka had a role in running First Century. Mr. Rufai’s actions in setting up the straw owner operation were consistent with setting up a legitimate business without mentioning a partner who wishes to remain anonymous and silent. The Government presented no evidence that Mr. Rufai interacted with Medicare, such as Mr. Adegboye’s preparation of the Medicare application. The straw owner evidence does not show that Mr. Rufai knew that Mr. Ohaka was planning to or did submit false bills for Medicare reimbursement. The Government conceded at oral argument that Mr. Rufai’s last trip to Oklahoma for which there is evidence in the record was in November 2007. He was never on site when First Century was billing Medicare.
The Government relies on Ms. Pratcher’s testimony that she expressed suspicion about Mr. Ohaka to Mr. Rufai several months before First Century was approved to bill Medicare. It argues that this testimony shows that Mr. Rufai was on notice about the fraudulent billing scheme. But this stretches Ms. Pratcher’s testimony too far. When Ms. Pratcher was at Vitacare and at First Century, she received calls from Vitacare customers -33- saying they had not received their equipment. She told Mr. Rufai about the calls, and he said he would speak with Mr. Ohaka about it and instructed her to apologize to the customers. The Government contends that this supports an inference that Mr. Rufai knew of a scheme that involved Medicare fraud. Although the evidence showed that Mr. Rufai knew that First Century’s billing was dependent on Medicare,9 Ms. Pratcher’s testimony shows only that he knew Mr. Ohaka’s Vitacare customers were complaining about not receiving their orders. For Ms. Pratcher’s statements about Vitacare customer complaints to have put Mr. Rufai on notice of Medicare fraud at First Century would require the following. He would have had to conclude that the Vitacare customers’ equipment was not just delayed but was not being delivered at all; that failure to deliver the equipment was deliberate rather than inadvertent or a result of incompetence; that Medicare had been billed for the equipment; and that the customer calls were not isolated incidents. He would then need to have concluded that the same occurrences would happen at First Century. Factfinder inferences that Mr. Rufai knew (1) that Medicare fraud was occurring at Vitacare and (2) that it would occur later at First Century are attenuated, speculative, and pile inference upon inference. Ms. Pratcher’s testimony that she told Mr. Rufai about her concerns that Mr. 9 Mr. Rufai was calling nearly every day to see if Medicare had called about First Century’s application, and he and Mr. Adegboye did not bother to maintain a bank account for billings until First Century was approved by Medicare. -34- Ohaka had asked her to put her name on some tax forms similarly fails to support an inference that Mr. Rufai knew of Medicare fraud. The conversation may have put Mr. Rufai on notice of tax misconduct, but that is not a link to knowledge of health care fraud. The Government also pointed to inventory issues to argue that Mr. Rufai was on notice of the fraud. To pass the initial Medicare inspection, site inspectors have to find adequate inventory in the store. Ms. Pratcher testified that she called and spoke with Mr. Rufai about the lack of inventory and that he told her to speak with Mr. Ohaka. Ms. Pratcher’s grandfather had recently moved to Georgia, and Mr. Ohaka had asked her to put her grandfather’s used wheelchair and toilet in the store. The problem with the Government’s inventory theory is that the evidence did not show that Ms. Pratcher told Mr. Rufai about the used inventory. Moreover, even if Mr. Rufai had known about the used inventory, and thus about Mr. Ohaka’s willingness to deceive Medicare to get Medicare billing approval, a jury would still need to infer that Mr. Rufai knew that Mr. Ohaka would begin submitting false Medicare claims several months later. Ms. Pratcher’s testimony about her conversations with Mr. Rufai may have been enough to suggest to him that something was amiss with Mr. Ohaka and First Century, but they predated and did not forecast fraudulent billing. Her testimony does not support the string of inferences the Government urges in this case. -35-
“[S]ufficiency of the evidence determinations are made by assessing the totality of the circumstances in the individual case.” Torres v. Mullin, 317 F.3d 1145, 1164 (10th Cir. 2003). Reliance on evidence of Mr. Rufai’s relationship with Mr. Ohaka runs the risk of impermissible guilt by association. The straw owner and notice arguments pile inference upon inference to the point that “the evidence raises no more than a mere suspicion of guilt.” Rahseparian, 231 F.3d at 1262 (quotations omitted). The evidence here cannot sustain beyond a reasonable doubt the conclusion that Mr. Rufai had knowledge of the health care fraud scheme and therefore intended to participate in it. The Supreme Court has recognized “the imperative duty of a court to see that all the elements of [a defendant’s] crime are proved, or at least that testimony is offered which justifies a jury in finding those elements.” Clyatt v. United States, 197 U.S. 207, 222 (1905); see also United States v. Delgado, 672 F.3d 320, 351 (5th Cir. 2012), cert. denied, 133 S. Ct. 525 (2012). Mr. Rufai argues that the district court’s failure to recognize the insufficient evidence of health care fraud at First Century was plain error. As discussed above, “a conviction in the absence of sufficient evidence” almost always satisfies the first three factors of plain error review. Kaufman, 546 F.3d at 1263. Moreover, although the standard for the fourth factor is “formidable,” United States v. Trujillo-Terrazas, 405 F.3d 814, 820 (10th Cir. 2005), it is only in the rare case that insufficient evidence for a conviction will not meet that requirement, see Goode, 483 F.3d at 682. -36- This case is not one of those rare cases like Goode. Mr. Goode was charged with being a felon in possession of a firearm, id. at 678, which requires proof of “possess[ing] in or affecting commerce[] any firearm,” 18 U.S.C. 922(g)(9). The weapon was discovered in Mr. Goode’s possession in New Mexico. Goode, 483 F.3d at 678. It had been made in Spain. Id. The district court instructed the jury that the government had to prove that the firearm had moved from one state to another. Id. at 679. On appeal, Mr. Goode argued that the district court had narrowed the “in or affecting commerce” requirement to movement from one state to another and that there was no evidence of such movement—the weapon could have crossed the international border into New Mexico and never traveled from another state. Id. at 680; see United States v. Williams, 376 F.3d 1048, 1051 (10th Cir. 2004) (“The law of the case is applied to hold the government to the burden of proving each element of a crime as set out in a jury instruction to which it failed to object, even if the unchallenged jury instruction goes beyond the criminal statute’s requirements.”). We held that, had the objection been properly made at trial, the district court could have altered the jury instruction to include traveling in foreign commerce. Goode, 483 F.3d at 682. Because the weapon had come from Spain, “it [was] a certainty that the firearm had traveled in foreign commerce,” which would meet the statutory requirement “that Mr. Goode’s possession was ‘in or affecting commerce,’ as charged in the indictment.” Id. There was, therefore, “no basis for concluding that the error seriously affected the fairness, integrity or public reputation of judicial proceedings.” Id. -37- Unlike in Goode, the evidence in this case was insufficient to demonstrate beyond a reasonable doubt one of the essential elements of the crime with which Mr. Rufai was charged. Thus, under “the facts of [this] particular case,” Mr. Rufai’s conviction in the absence of sufficient evidence is “particularly egregious” and the “failure to notice the error would result in a miscarriage of justice.” United States v. Gonzalez-Huerta, 403 F.3d 727, 736 (10th Cir. 2005) (quotations omitted). We therefore conclude that Mr. Rufai’s convictions in the absence of sufficient evidence was plain error, and we reverse.
Because we reverse based on insufficiency of the evidence, we need not reach Mr. Rufai’s argument that the jury could only have found him guilty because it was confused by the jury instructions as to conspiracy and fraud.