Opinion ID: 496776
Heading Depth: 2
Heading Rank: 9

Heading: The Internal Medical Files and the Coconspirator Exception

Text: 57 The government introduced at trial the records of Drs. Rosenthal and Hershenow and Dr. Strauss' patient cards to prove the magnitude of the fraud and to corroborate the testimony about falsification of bills. Over defendant's general hearsay objection, the court admitted the files as part of its Petrozziello ruling discussed before. 1 Kaplan focuses this appeal on specific portions of the Rosenthal/Hershenow files to argue against their admissibility. Appellant divides those files into two parts--first the dictated notes (containing accurate treatment dates) and second the patient file cover sheets (containing information used to generate false bills). 58 Assuming those statements were hearsay (and the government concedes as much with respect to the dictated notes), we find no clear error in the court's ruling they were admissible as coconspirator statements under Rule 801(d)(2)(E). The record supports that (1) defendant knowingly participated in a fraudulent scheme, and (2) the statements were made during the course of the scheme. See ante at 685. 59 The more difficult question is whether the statements were made in furtherance of the scheme. Relying on Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790 (1949), appellant maintains that the internal medical files (allegedly never seen by Kaplan) were kept to conceal any wrongdoing and thus were not in furtherance of the scheme. Krulewitch held that, once the objectives of the conspiracy have been accomplished, any declarations regarding efforts to conceal the conspiracy are inadmissible. Id. at 442, 69 S.Ct. at 717-18; see also United States v. Palow, 777 F.2d 52, 57 (1st Cir.1985), cert. denied, 475 U.S. 1052, 106 S.Ct. 1277, 89 L.Ed.2d 585 (1986) (post-arrest statements not in furtherance of the conspiracy). Such is not the case before us however. Even if the doctors maintained accurate medical records to avoid getting caught, their actions clearly furthered the main objectives of the conspiracy. United States v. Davis, 623 F.2d 188, 192 (1st Cir.1980). 60 The main objective of the scheme here was to trick insurance companies into paying what appeared to be legitimate claims. And its success depended on whether the bills appeared truthful. In fact, Kaplan argued to the jury that the bills looked so reliable that they fooled fellow attorneys--himself included--and a few insurance companies. The following excerpt from the government's direct examination of Rosenthal underscores the importance of the internal records for insuring the legitimacy of the bills: 61 Q ... First of all, maybe we ought to go through several documents in the file. 62 This is what's known as the front sheet or the cover to your file; is that correct? 63 A That's correct. 64 Q All right. And at least certainly for the initial date of visit, that would be filled out by one of your staff? 65 A In most cases, yes, sir. 66 Q All right. And then, in addition, that file would be kept in your office; and when patients came in, the date of the visit would be recorded on the form; is that correct?A That's also correct. 67 Q Now, in addition, did you on occasion just put dates of visit on those forms? 68 A Yes. 69 Q Now, in connection with the preparation of your bills and reports, what use would be made of this form? 70 A It served a multi-purpose. The first use, obviously, is to try to keep track of the patient visits. The second use was to give the secretaries some indication of the billing procedure. Obviously, there is some financial information; also where I referred the people. It's sort of an all in one type sheet. 71 Q In the course of preparing your reports and the attached bills, how did you typically get the information from you to your secretaries for the actual typing? 72 A For the billing? 73 Q Yes. 74 A It was--that's--what they saw on here is what they typed the bill off of [sic]. 75 Q In other words, you would give them instructions that they were to show as dates of visits of the information recorded on the front of the form? 76 A That's correct. 77 Q And if you falsely inflated a file, you would make a notation on the front of the file of the date of visit? 78 A That's correct. 79 The records were essential for keeping accurately false bills. And it was through the collection of these bills, after all, that the conspirators realized the fruits of their fraudulent endeavors. These statements contributed to the objectives and ultimate success of the scheme, and were admissible evidence against Kaplan. See Fahey, 769 F.2d at 839. 2 80 VI. The Evidence Regarding the Flood at the Defendant's Home and the Search of his Law Office Storage Area 81 The court admitted a stipulation that certain documents from Kaplan's client files subpoenaed by the government were destroyed in a 1983 flood occurring at defendant's vacation cottage. The government tried to show at trial this was a false exculpatory statement. As far as the record shows, Kaplan objected below only for lack of relevance. Fed.R.Evid. 401. We agree with the court's ruling. False exculpatory declarations are relevant to show a guilty state of mind. Wilson v. United States, 162 U.S. 613, 620-21, 16 S.Ct. 895, 898-99, 40 L.Ed. 1090 (1896). Whether the stipulation was false or not was strictly for the jury to decide, and had no bearing upon its admissibility under Rule 401. 82 As to the removal of files and search evidence, Kaplan objected for lack of probative value. Fed.R.Evid. 403. Kaplan's principal claim is that the removal of the files permitted only an inference that Kaplan intended to protect attorney-client confidences. The district court concluded that since the jury could have inferred some ulterior motive besides protecting client confidences, the evidence was probative and not unfairly prejudicial to appellant. We find no abuse of discretion to upset this finding. See Jarabek, 726 F.2d at 903.