Opinion ID: 29550
Heading Depth: 2
Heading Rank: 2

Heading: sufficiency of the evidence

Text: Both Lopez and Goldberg challenge the sufficiency of the 14 evidence to sustain their convictions. We address both Lopez’s and Goldberg’s arguments in turn. Lopez was convicted on two counts of mail fraud for submitting HCFA Forms that reflected the use of a physical-therapy device known as a Hubbard Tank.9 Although Lopez concedes that none of Dr. Bieganowski’s clinics ever contained a Hubbard Tank, he maintains that the evidence failed to show either that billing for a Hubbard Tank was a material misstatement or that he possessed the requisite intent to commit mail fraud. “The standard of review in assessing a challenge to the sufficiency of the evidence in a criminal case is whether a ‘reasonable trier of fact could have found that the evidence established guilt beyond a reasonable doubt.’” United States v. Smith, 296 F.3d 344, 346 (5th Cir. 2002). In evaluating the evidence, we view “all evidence and all reasonable inferences drawn from it in the light most favorable to the government.” Id. (quoting United States v. Mergerson, 4 F.3d 337, 341 (5th Cir. 1993)). “It is not necessary that the evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt.” United States v. Henry, 849 F.2d 1534, 1536 (5th Cir. 1988); United States v. Lechuga, 888 9 Stedman’s Medical Dictionary defines a Hubbard Tank as a large tank, usually filled with warm water, used for therapeutic exercises in a program of physiotherapy. See STEDMAN’S MEDICAL DICTIONARY 1785 (27th ed. 2002). 15 F.2d 1472, 1476 (5th Cir. 1989). However, in a case depending on circumstantial evidence if the evidence viewed in the light most favorable to the prosecution gives equal or nearly equal circumstantial support to a theory of guilt and a theory of innocence, a defendant is entitled to a judgment of acquittal. United States v. Brown, 186 F.3d 661, 664 (5th Cir. 1999) (quoting United States v. Schuchmann, 84 F.3d 752, 754 (5th Cir. 1996)). Lopez was ultimately convicted on two counts of mail fraud in violation of 18 U.S.C. § 1341. To prove mail fraud under 18 U.S.C. § 1341, the government must show: (1) a scheme to defraud; (2) the use of the mails to execute the scheme; and (3) the specific intent to defraud. United States v. Peterson, 244 F.3d 385, 389 (5th Cir. 2001). In addition, the Supreme Court has interpreted section 1341 to require that the misstatement made in the course of the scheme to defraud be a material one. See Neder v. United States, 119 S.Ct. 1827, 1841 (1999). Lopez argues that billing for Hubbard Tank treatment could not have been a material misstatement since the billing rate for the use of a Hubbard Tank was lower than the rate at which Lopez could have billed for the treatment that he actually delivered. Specifically, Lopez maintains that although he submitted bills with CPT code 97220, the code for Hubbard Tank treatment, he could have billed under the more expensive CPT code 97420, the code used for 16 supervised pool therapy or Hubbard Tank therapy with exercises.10 On closer examination, however, Lopez’s argument fails. First, the evidence indicates that billing for Hubbard Tank therapy includes not only a representation that the clinic possessed a Hubbard Tank, but also the implicit representation that the Tank was used to deliver certain professional services. The evidence further indicated that a physical therapist may only bill for pool therapy under CPT code 97420 where the therapy is supervised. Ample evidence, however, was introduced to establish that such supervision was lacking in Lopez’s clinic, and that no professional services were being provided to Lopez’s patients while they were in the clinic’s pools.11 Lopez’s defense that he could have billed for the services he 10 In 1994, Lopez did cease billing for Hubbard Tank treatments and began billing instead, under CPT code 97420, for pool therapy at the same $35 per-half-hour rate that he had previously billed for Hubbard Tank therapy. Simply because Lopez could have billed for the services at the same rate, however, does not mean that the misstatement was immaterial or that the insurance companies reimbursed for the services at the same rate or at the same frequency. The record, for example, contains conflicting evidence regarding whether the insurance companies, at the time Lopez was billing for Hubbard Tank treatments, actually reimbursed at a higher rate for pool therapy than they did for Hubbard Tank therapy. In any event, it is unnecessary to reconcile this conflicting evidence as the evidence also showed that Lopez could not have billed for pool therapy without making a further misstatement, and that billing for Hubbard Tank therapy was itself a material misstatement. 11 Two former patients and a former assistant of Lopez’s testified that there were three to six people in the clinic whirlpools at a time and that they received no supervision or physical-therapy instruction while they were in the pool. 17 provided as pool therapy under CPT code 97420, therefore, is unsupported by the evidence. Lopez’s argument essentially amounts to the claim that his misrepresentation was not material since, by making an additional misrepresentation, he could have charged for a different service at an equal or higher rate. We find this reasoning unconvincing. Moreover, there was at least some evidence presented that insurance companies found the representation that the clinic possessed a Hubbard Tank to be material regardless of any actual charges billed. Lisa Hannusch, an expert witness from the Texas Workers Compensation Insurance Fund, testified that in order for the Fund to pay a bill for a Hubbard Tank, the clinic submitting the bill must actually have a Hubbard Tank. Hannusch also testified that had she known that there was no such tank at Lopez’s clinic, she would not have reimbursed his bills. Finally, Hannusch testified that a pool such as Lopez’s—a pool used to treat multiple individuals, with no window access, no aide present, and no physical therapist available to supervise the patients—would not be billable as a Hubbard Tank or as pool therapy. We also find that the evidence supported the jury’s finding that Lopez possessed the requisite intent to defraud. Lopez was active in selecting billing codes, he adjusted the billing codes submitted by other employees, and at least on one occasion, he received and annotated billing statements from insurance companies. When viewed in the light most favorable to the verdict, we find 18 this evidence sufficient to support the conclusion that Lopez intended to submit bills containing material misstatements to the insurance companies for reimbursement. After reviewing the record, therefore, we find that the evidence is sufficient to establish both that billing for a Hubbard Tank was a material misstatement and that Lopez possessed the requisite intent to support his conviction for mail fraud.
Goldberg also challenges the sufficiency of the evidence to support his convictions. Goldberg was convicted on one count of conspiracy to commit mail fraud and one count of conspiracy to commit money laundering in violation of 18 U.S.C. § 1956. Goldberg makes the related arguments that the evidence failed to show that he possessed the requisite intent to commit mail fraud, and that since the offense of money laundering requires knowledge that the laundered funds are the proceeds of unlawful activity, he can therefore be found guilty neither of mail fraud nor money laundering. In addition, Goldberg maintains that the Government failed to prove that the funds transferred to the Cayman Islands were the proceeds of unlawful activity. A section 371 conspiracy comprises the following elements: (1) an agreement between the defendant and a co-conspirator to violate a law of the United States; (2) an overt act by one conspirator in furtherance of the conspiracy; and (3) the specific intent to 19 further an unlawful objective of the conspiracy. United States v. Sharpe, 193 F.3d 852, 863 (5th Cir. 1999). The requirement of an agreement is the central element and the agreement, therefore, must be arrived at knowingly. United States v. Holcomb, 797 F.2d 1320, 1327 (5th Cir. 1986); United States v. Ballard, 663 F.2d 534, 543 (5th Cir. 1981). “[M]ere association with those involved in a criminal venture is insufficient to prove participation in a conspiracy.” Id.; United States v. Alvarez, 610 F.2d 1250, 1255 (5th Cir. 1980), aff’d 625 F.2d 1196 (5th Cir. 1980) (en banc). The existence of an agreement, however, may be proved by circumstantial evidence, see Holcomb, 797 F.2d at 1327, and even minor participation in the conspiracy may serve as the basis for a conviction. United States v. Prieto-Tejas, 779 F.2d 1098, 1103 (5th Cir. 1986). Moreover, in a conspiracy case: “[a]n agreement may be inferred from ‘concert of action,’” “[v]oluntary participation may be inferred from ‘a collocation of circumstances,’” and “[k]nowledge may be inferred from ‘surrounding circumstances.’” United States v. Lechuga, 888 F.2d 1472, 1476-77 (5th Cir. 1989). Inasmuch as the circumstantial evidence in this case tends to prove that Goldberg knew that Dr. Bieganowski’s clinics were engaged in fraudulent billing practices, we conclude that there was sufficient evidence to establish Goldberg’s participation in the conspiracy. Goldberg’s affiliation with Dr. Bieganowski’s practice 20 far exceeded the limits of an ordinary professional relationship, and involved him in nearly every aspect of the operation of the clinics. He spent almost every afternoon at Dr. Bieganowski’s clinic and attended multiple meetings with the clinic staff, including meetings addressing such mundane administrative matters as employee dress codes. The evidence supports the conclusion that he was the de facto business manager of Dr. Bieganowski’s practice, with day to day supervision of and extensive familiarity with it. The fraudulent billing practices were widespread, pervasive and virtually continuous throughout the clinics. From an internal perspective, they were neither concealed nor secret. A portion of the Government’s conspiracy case also involved allegations that Dr. Bieganowski’s clinics knowingly obtained authorization for, provided, and billed for unnecessary services, including an expensive procedure known as a facet block injection. Although Goldberg maintains on appeal that he was not involved in the mechanics of creating bills or demanding payment, the record indicates that Goldberg was involved with efforts to obtain certification from insurance companies for these treatments. For example, he closely monitored those employees who were responsible for obtaining precertification for facet block injections, and he directed that the precertification quota for injections be increased, first from ten to fifteen patients per day, and later to twenty patients per day. An employee responsible for the 21 precertification of injections, Rene Moreno, testified that when she told Goldberg that patients were reluctant to receive the injections, Goldberg instructed her to do whatever was necessary to get the patients to the hospital. Although this evidence does not prove that Goldberg knew that any particular, single injection was not medically necessary, or that a particular precertification request contained fraudulent representations, it illustrates the extent to which Goldberg was involved in the preparation and submission of bills. More important, it, together with the other evidence, tends to support an inference that Goldberg knew that some bills contained fraudulent representations. The record also indicates that Goldberg was closely involved with Dr. Bieganowski’s solicitation efforts. He not only attended meetings with Robert Griego, Bieganowski’s telemarketer, but also reviewed the script that Griego used to solicit new patients. Goldberg knew that Griego told reluctant patients that they could increase their automobile-insurance settlements by generating higher medical bills, and he knew that Griego advised patients to obtain medical examinations even when those same patients told Griego that they were not injured. More important, when Griego suggested to Goldberg that Griego might have to begin staging accidents in order to meet his quota, Goldberg simply responded: “Well, you know, whatever you have to do.” Also damaging to Goldberg’s protestations of ignorance was the testimony of Rosa Cordova and Lucy Campos. Campos testified that 22 she had given Goldberg a copy of the Medical Fee Guidelines, a manual that contained the various CPT billing codes, further undermining Goldberg’s claim that he was not involved with creating bills. Cordova, an employee in the precertification department, testified that Dr. Bieganowski had directed her to generate false fee tickets and to submit fee tickets even when patients had left without being treated. When asked about how much Goldberg knew about her activities, Cordova replied, “[Goldberg] knew exactly what my job was and he wanted to make sure that I was doing it.” Further, Goldberg’s extensive efforts in setting up and overseeing an elaborate virtual labyrinth of bank accounts for Dr. Bieganowski’s clinics, which concealed both the clinics’ and Dr. Bieganowski’s relationship to the accounts and the ultimate disposition of the funds, is plainly suggestive of guilty knowledge. Goldberg correctly points out that each piece of evidence against him, viewed separately, may admit of an innocent explanation. That, however, is not determinative. As we observed in Lechuga, 888 F.2d at 1476: “the United States Supreme Court remarked long ago, ‘[c]ircumstances altogether inconclusive, if separately considered, may, by their number and joint operation, especially when corroborated by moral coincidences, be sufficient to constitute conclusive proof.’ Coggeshall v. United States (the Slavers, Reindeer), 69 U.S. (2 Wall.) 383, 17 L.Ed. 911, 914-15 (1865).” Thus, although no individual piece of evidence against 23 Goldberg is dispositive, taken together the evidence as a whole suffices to establish an adequately clear picture of Goldberg’s role in the conspiracy. The cumulative effect of this evidence is sufficient to support the inference that Goldberg was aware of the fraudulent billing practices, and we therefore decline to hold that the evidence was insufficient to support Goldberg’s conviction for conspiracy to commit mail fraud.
For his role in the conspiracy, Goldberg was also convicted of conspiracy to money launder in violation of 18 U.S.C. § 1956(h). The substantive offense of money laundering requires that the defendant knew that the funds in question represented the proceeds of unlawful activity. See United States v. Burns, 162 F.3d 840, 847 (5th Cir. 1998). Goldberg maintains that since he did not know that Bieganowski’s clinics were submitting fraudulent claims, he could not have known that the funds deposited into the various clinic accounts represented the proceeds of unlawful activity, and that he therefore cannot be found guilty of money laundering. Because we find that the evidence supports the conclusion that Goldberg was aware that the reimbursements from the insurance companies represented the proceeds of fraudulent billing practices, see section II(B)(2), supra, we reject this argument. Finally, we address Goldberg’s claim that the Government failed to prove that the funds transferred to the Cayman Islands in 24 fact represented the proceeds of unlawful activity. In this case, the indictment charged a conspiracy to commit two types of money laundering: (1) engaging in a financial transaction designed to conceal the source or control of the proceeds of unlawful activity in violation of section 1956(a)(1)(B)(i), and (2) transporting or attempting to transport funds from a place in the United States to a place outside the United States in order to conceal the source or control of the proceeds of unlawful activity, in violation of section 1956(a)(2)(B)(i). The offense of money laundering under section 1956(a)(1)(B)(i), requires that the government prove that the defendant: (1) conducted or attempted to conduct a financial transaction, (2) that the defendant knew involved the proceeds of unlawful activity, and (3) that the defendant knew was designed to conceal or disguise the nature, location, source, ownership, or control of the proceeds of the unlawful activity. 18 U.S.C. § 1956(a)(1)(B)(i); United States v. Burns, 162 F.3d 840, 847 (5th Cir. 1998), cert. denied, August v. United States, 119 S.Ct. 1477 (1999). An offense under section 1956(a)(2)(B)(i) is almost identical, with the exception that the transaction in question must be from a place in the United Sates to a place outside the United States. See 18 U.S.C.A. § 1956(a)(2)(B)(i). 25 Agent Hivic of the IRS testified that between November, 1994,12 and January, 1997, over six million dollars of insurance company reimbursements were deposited in the various clinics’ accounts. All of that six million dollars was then transferred from the clinics’ accounts at the Bank of the West to the Servicio account, also located at the Bank of the West. Of that six million dollars, a little over two million was eventually transferred to the Cayman Islands. Goldberg’s argument proceeds from the premise that the Government failed to prove that all of Dr. Bieganowski’s billings were fraudulent. If some billings were legitimate, then at least some of the money that was deposited into the clinic accounts at the Bank of the West and then consolidated in the Servicio account was also legitimate. Consequently, Goldberg maintains that the Government never established that Bieganowski earned less than two million dollars through legitimate billing and that the Government cannot, therefore, prove that the funds transferred to the Cayman Islands were the proceeds of fraudulent activity. The government maintains that it produced sufficient evidence that all the funds deposited to the Servicio account–and certainly more than four million dollars thereof–were the product of fraudulent billings. The government also argues that if some funds in the Servicio 12 November, 1994, represents the date on which Goldberg consolidated Dr. Bieganowski’s billing operations in Servicio, a Mexican corporation located in Ciudad Juarez, Mexico. 26 account were legitimate their commingling with illegitimate funds there allows treatment of the Cayman Island funds as illegitimate. Accepting, arguendo, Goldberg’s position as valid—that the Government failed to establish that the funds transferred to the Cayman Islands were illegitimate—this failure does not undermine Goldberg’s conviction. The Government charged Goldberg with a conspiracy to violate both section 1956(a)(1)(B)(i) and (a)(2)(B)(i), and the jury charge authorized conviction upon either theory.13 Goldberg’s argument concerning the funds transferred to the Cayman Islands, if valid, would only undermines a conviction based on a conspiracy to commit money laundering under section 1956(a)(2)(B)(i), laundering by transferring illegitimate funds out of the United States. The evidence to support a conviction for section 1956(a)(1)(B)(i), on the other hand, was more than sufficient. The indictment and the jury charge include a series of overt acts tracing the entire money laundering operation, including the transfer of funds involving the proceeds of unlawful activity from the clinics’ accounts at the Bank of the West to Servicio’s bank account. That transfer to Servicio alone satisfies the requirements of section 1956(a)(1)(B)(i). The entire six million dollars deposited into the clinics’ accounts was thereafter transferred to the Servicio account. Therefore, even assuming that 13 No objection to the change on this basis has been raised on appeal. 27 the Government only proved that a portion of those six million dollars represented the proceeds of fraudulent activity, the prosecution nevertheless satisfied its burden of demonstrating that the transfer involved the proceeds of specified unlawful activity. See 18 U.S.C. § 1956(a)(1). There is also little doubt that the transfers from the clinics’ accounts to the Servicio account were designed to conceal the source of the unlawful funds. A casual observer would not have immediately linked the contents of the Servicio account to Bieganowski as neither Dr. Bieganowski nor Goldberg were listed as shareholders (or officers or directors or authorized agents or account signatories) of Servicio. See United States v. Willey, 57 F.3d 1374, 1387–89 (5th Cir. 1995) (noting that a transfer from one third party to another supports an inference of a design to conceal). Because the jury could have convicted Goldberg for conspiracy to violate 18 U.S.C. § 1956(a)(1)(B)(i), and because the evidence supports a finding that the transfers from the clinic’s accounts to Servicio involved the proceeds of unlawful activity and were designed to conceal the source of those proceeds, we hold that the evidence is adequate to sustain Goldberg’s conviction for conspiracy to money launder.