Opinion ID: 3054298
Heading Depth: 2
Heading Rank: 3

Heading: Jury Instructions Regarding Willfulness

Text: We review de novo whether jury instructions accurately define the elements of a statutory offense. United States v. Hicks, 217 F.3d 1038, 1045 (9th Cir. 2000). If a jury instruction misstates an element of a statutory crime, the error is harmless if it is “clear beyond a reasonable doubt that a rational jury would have found the defendant guilty absent the error.” Neder v. United States, 527 U.S. 1, 18 (1999); see also United States v. Henderson, 243 F.3d 1168, 1171 (9th Cir. 2001). Defendant argues that the jury instructions were erroneous because they stated that the government did not have to prove that Defendant knew his conduct was unlawful. Because the district court’s instructions told the jury exactly the opposite of the Supreme Court’s definition of “willfully,” the instruc372 UNITED STATES v. AWAD tions were erroneous. For the reasons explained below, however, the error was harmless beyond a reasonable doubt. The jury was instructed in part: Defendants are charged in Counts 1 through 24 of the Indictment with health care fraud in violation of Section 1347 of Title 18 of the United States Code. .... In order for a defendant to be found guilty of health care fraud based upon a scheme to defraud, the government must prove four elements beyond a reasonable doubt: First, the defendant knowingly and willfully devised or participated in a scheme to defraud a health care benefit program; Second, the statements made or facts omitted as part of the scheme were material; Third, the defendant acted with intent to defraud; and Fourth, the scheme involved the delivery of or payment for health care benefits, items or services. .... For purposes of proving health care fraud, an act is done knowingly if the defendant is aware of the act and does not act through ignorance, mistake, or accident. The government is not required to prove that the defendant knew that his acts or omissions were unlawful. UNITED STATES v. AWAD 373 .... For purposes of health care fraud, a person acts “willfully,” as that term is used in these instructions, when that person acts deliberately, voluntarily, and intentionally. (Emphasis added.) Defendant argues that the emphasized portion of the instructions is wrong because it contradicts the statutory requirement that he had to have acted “willfully.” The Supreme Court has recognized that “willfully” is a “word of many meanings” whose construction often depends on the context in which it appears. Bryan, 524 U.S. at 191. Generally, in the criminal context, a “willful” act is one undertaken with a “bad purpose.” Id. The Bryan Court went on to state that, “in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’ ” Id. at 191-92 (emphasis added) (quoting Ratzlaf v. United States, 510 U.S. 135, 137 (1994)). The Court noted that one part of the jury instructions given in Bryan, which is identical in meaning to an instruction given in this case, misstated the law. In that part of the instructions, the judge had stated that the government was not “required to prove that [the defendant] had knowledge that he was breaking the law.” Id. at 199. That statement, standing alone, “contained a misstatement of the law,” id., given the rule that in order to establish a willful act the government must prove that the defendant knew that his or her conduct was unlawful, id. at 191-92. [14] Relying on Bryan, we held in Henderson that the district court’s failure to give a “general instruction that ‘willfully’ means that [a defendant] knew his [or her] conduct was unlawful” was in error. Henderson, 243 F.3d at 1173 (emphasis omitted). In Henderson, the defendant was convicted of violating a regulation governing the occupancy of public lands. Id. at 1170. The statute enforcing the regulation pro374 UNITED STATES v. AWAD vided that “[a]ny person who knowingly and willfully” violates the regulation would be punished. Id. at 1171. The magistrate judge rejected the defendant’s request to instruct the jury that willfulness requires “the specific intent to do or fail to do what [the defendant] knows is unlawful.” Id. at 1170. Instead, the judge instructed the jury only that “[t]he word ‘willfully’ means that a person knowingly and intentionally committed the acts which constitute the offenses charged.” Id. We held that the instructions were erroneous, noting that Bryan required the prosecution to establish that the defendant was aware that the conduct in question was unlawful. Id. at 1171-73. But we went on to hold that the error in the judge’s instruc- tions was harmless beyond a reasonable doubt. Id. at 1173. The defendant had received a “Notice of Immediate Suspension” informing him that he was in violation of the regulation and that he had five days to comply. Id. We held that, once the defendant received the notice informing him that he was violating the regulation, he was aware that his conduct was unlawful. Id. at 1174. Therefore, even if the jury had been instructed that it had to find that the defendant knew his conduct was unlawful, that element undoubtedly would have been met. Id. In our view, “[n]o reasonable jury could have found that [the d]efendant lacked knowledge that his conduct was unlawful after the date he received the written Notice.” Id. As a result, the magistrate judge’s failure to give the defendant’s requested instruction was harmless error. Id. [15] We reach the same conclusion here. There was an error in the district judge’s willfulness instructions. The instruction that “[t]he government is not required to prove that the defendant knew that his acts or omissions were unlawful” was erroneous under Bryan, 524 U.S. at 199. [16] Nonetheless, the error was harmless beyond a reasonable doubt for three reasons. First, the certification on each claim that Defendant submitted to Medicare informed him UNITED STATES v. AWAD 375 that submitting “any false, incomplete or misleading information” could subject him to criminal liability and punishment— that is, the certifications themselves stated that such submissions were unlawful. It is undisputed that Defendant signed these certifications, either physically or electronically, when he submitted each of the fraudulent claims. By submitting claims for treatments that either were not performed at all or that ran afoul of Medicare’s supervision requirements, Defendant knew that he was committing an unlawful act that exposed him to criminal liability. He also received notification from Medi-Cal and Medicare, alerting him to problems with his claims. The fact that he stopped submitting Medi-Cal claims as soon as he was notified that his claims would be subject to heightened review, because an audit revealed billing problems, shows his guilty knowledge. [17] Second, the instructions on health care fraud informed the jury that the government was required to prove that Defendant acted with an “intent to defraud.” An “intent to defraud” was defined as “an intent to deceive or cheat.” We must presume that the jury followed those instructions. Richardson v. Marsh, 481 U.S. 200, 206 (1987). In order to have found Defendant guilty, the jury necessarily found that Defendant acted with the purpose of deceiving or cheating Medicare. No reasonable jury could have found that a physician intended to deceive or cheat the Federal Government but did not know that such conduct is unlawful, especially in light of the warnings on the claim forms. Other jury instructions also support our conclusion. The money laundering instruction informed the jury that the “government must prove that the defendant knew that the funds transferred represented the proceeds of unlawful conduct, violation of the health care fraud statute.” A guilty verdict on the money laundering counts means that the jury found that Defendant knew the actions which produced the money transferred were unlawful. Moreover, the jury was instructed that a good faith belief that the acts were lawful was a complete 376 UNITED STATES v. AWAD defense “because good faith on the part of the defendant is, simply, inconsistent with a finding of an intent to defraud.” By finding Defendant guilty, the jury necessarily rejected the argument that Defendant acted with a good faith belief that his acts were lawful. [18] Third, the fraudulent scheme was, for the most part, so bold and simple that no reasonable person could have thought it lawful. For example, Defendant billed for services not rendered—in common parlance, theft. Defendant moved from financial struggle to more than $2 million in paid claims over a period of about three years. His billings were wildly out of line with other physician’s billings: With respect to one treatment, he billed 28 times the number and 42,000 times the amount of the next highest biller in Southern California. And he and his co-schemer consciously selected a vulnerable population that was unlikely to alert authorities. [19] In short, Defendant carried out a brazen scheme to collect millions of dollars under obviously false pretenses, which no reasonable jury could have found to be lacking in willfulness. Therefore, although the district court’s jury instructions on willfulness contained an error, that error was harmless beyond a reasonable doubt. D. Sentencing Enhancement for Risk of Serious Bodily Injury or Death Finally, Defendant challenges the two-level sentencing enhancement that the district court applied for conduct involving “conscious or reckless risk of death or serious bodily injury.” U.S.S.G. § 2B1.1(b)(12)(A) (2005). The court found that Defendant’s failure to supervise treatments posed a risk of serious bodily injury to the patients. The court reasoned that “[m]ost if not all of the respiratory therapy administered was not required. The treatments included inhalation of medications. Medicare required that a treating provider be present in the facility where the treatment was given. This fact is indicaUNITED STATES v. AWAD 377 tive that the treatment carried some risk that the provider’s immediate attention might be needed. [Defendant] was present for none of the treatments, thus placing each patient in risk.” The district court’s interpretation and application of the Sentencing Guidelines are reviewed de novo. United States v. Blitz, 151 F.3d 1002, 1009 (9th Cir. 1998). But we review for clear error the court’s factual findings. Id. [20] Defendant argues that the respiratory therapies at issue were basic, non-invasive procedures that posed no risk of injury, serious or otherwise, to patients. He notes that no patients reported adverse side effects from the treatments. Nonetheless, it is only the “creation of risk, not the infliction of injury,” that is required for application of this enhancement. United States v. W. Coast Aluminum Heat Treating Co., 265 F.3d 986, 993 (9th Cir. 2001). The government argues that Defendant’s failure to supervise the treatments posed a risk because an adverse reaction to a treatment or medication could result in death or serious bodily injury. At trial, a therapist who worked with Defendant testified that she believed Defendant should have been present at all the treatments because of the risk of adverse side effects. [21] The sentencing enhancement for creating a risk of serious bodily injury or death may not be proper in every prosecution for health care fraud, which is designed to punish financial fraud, rather than to enforce standards of medical care. But, in this case, there was evidence that a consistent failure to supervise jeopardized patients. In light of our deferential standard of review, we cannot say that the district court clearly erred in finding that Defendant’s conduct posed a risk of serious bodily injury or death, even if we would not have made the same finding. We therefore reject Defendant’s challenge to the sentencing enhancement. AFFIRMED.