Opinion ID: 4511971
Heading Depth: 1
Heading Rank: 2

Heading: sufficiency of the evidence

Text: Defendants contend that there wasn’t enough evidence to convict them on any count. When a defendant timely moves for a judgment of acquittal, as Rose and Sanders did, “we review challenges to the sufficiency of evidence de novo, but view the evidence in the light most favorable to the verdict.” United States v. Gonzalez, 907 F.3d 869, 873 (5th Cir. 2018) (per curiam) (cleaned up). “[A] defendant seeking reversal on the basis of insufficient evidence swims upstream.” United States v. Mulderig, 120 F.3d 534, 546 (5th Cir. 1997). We must affirm if a “rational jury, viewing the evidence in the light most favorable to the prosecution, could have found the essential elements of the offense to be satisfied beyond a reasonable doubt.” United States v. Bowen, 818 F.3d 179, 186 (5th Cir. 2016) (per curiam) (emphasis added). One definition of “rational” is that which is “not absurd, preposterous, foolish, or fanciful.” Rational, BLACK’S LAW DICTIONARY (11th ed. 2019). In so doing, we ask whether the verdict was reasonable, not whether it was correct. United States v. Alaniz, 726 F.3d 586, 601 (5th Cir. 2013). We accept any reasonable inferences that support the verdict and resolve any conflict in the evidence in favor of it. 5 The jury can “choose among reasonable constructions of the evidence.” United States v. Lugo-Lopez, 833 F.3d 453, 457 (5th Cir. 2016) (per curiam). Nonetheless, “a verdict may not rest on mere suspicion, speculation, or conjecture, or on an overly attenuated piling of inference on inference.” United States v. Pettigrew, 77 F.3d 1500, 1521 (5th Cir. 1996). 5United States v. Velasquez, 881 F.3d 314, 328–29 (5th Cir.) (per curiam), cert. denied, 139 S. Ct. 138 (2018). 9 Case: 17-20492 Document: 00515327502 Page: 10 Date Filed: 03/02/2020 No. 17-20492
Defendants first challenge their Count 1 conviction of conspiracy to commit health care and wire fraud in violation of 18 U.S.C. § 1349.
To prove a conspiracy to commit health care fraud, the government must show “beyond a reasonable doubt that: (1) two or more persons made an agreement to commit health care fraud[ 6]; (2) that the defendant knew the unlawful purpose of the agreement; and (3) that the defendant joined in the agreement with the intent to further the unlawful purpose.” United States v. Ganji, 880 F.3d 760, 767 (5th Cir. 2018) (cleaned up); see 18 U.S.C. § 1349. The same elements apply to a conspiracy to commit wire fraud, except that the participants must agree to execute wire fraud. See United States v. Kuhrt, 788 F.3d 403, 414 (5th Cir. 2015). Criminal conspiracies can be established on circumstantial evidence alone. United States v. Sutherland, 656 F.2d 1181, 1188 (5th Cir. Unit A Sept. 1981). Indeed, a jury can infer from the surrounding circumstances whether a defendant participated in and knew of the conspiracy. See United States v. Eghobor, 812 F.3d 352, 362 (5th Cir. 2015). “What people do is . . . evidence of what lies in their mind.” Ganji, 880 F.3d at 768. The central feature of a conspiracy is the agreement, 7 but it doesn’t need to be formal or even spoken. See id. at 767. It can “be inferred from concert of action.” United States v. Frydenlund, 990 F.2d 822, 825 (5th Cir. 1993). Even so, the agreement “cannot be lightly inferred.” Ganji, 880 F.3d at 768. “Mere 6The crime of health care fraud generally applies to a defendant who schemes to defraud a health care benefit program. See 18 U.S.C. § 1347. 7 See United States v. Alvarez, 610 F.2d 1250, 1255 (5th Cir.), on reh’g, 625 F.2d 1196 (5th Cir. 1980) (en banc). 10 Case: 17-20492 Document: 00515327502 Page: 11 Date Filed: 03/02/2020 No. 17-20492 similarity of conduct among various persons and the fact that they have associated with or are related to each other is insufficient,” standing alone, “to prove an agreement.” Id. at 767–68 (quotation marks removed).
Enough evidence supported Rose’s and Sanders’s Count 1 convictions.
Start with Sanders. The government was permitted to establish the conspiracy on circumstantial evidence alone. See Sutherland, 656 F.2d at 1188. It did. First, there’s enough evidence that Sanders was party to an agreement to commit health care and wire fraud. An agreement can “be inferred from concert of action,” Frydenlund, 990 F.2d at 825, and repeatedly Sanders was shown teaming up with others as he participated in the company’s culture of fraudulent billing, see United States v. Anderson, 558 F. App’x 454, 459 (5th Cir. 2014) (per curiam) (noting that the conspirators “worked in tandem”). Take several examples. Sanders attended both of the anguished postsearch-warrant meetings with his fellow executives, in which the team debriefed the startling events and rejoiced upon learning that listening devices hadn’t been found in the executive office. At the later meeting, he strategized with Mr. Rose about how to get the clinic that wasn’t following federal regulations into compliance. He went with Mr. Rose several times a day to the billing department, and he participated in the weekly meetings that saw frequent discussion of how to increase billings. And his evaluation of Dr. Smith, which emphasized that she needed to order more therapy for patients, was done with Mr. and Mrs. Rose in tow. A rational juror could have inferred that Sanders acted in concert with others only because he’d agreed to do so. Cf. Frydenlund, 11 Case: 17-20492 Document: 00515327502 Page: 12 Date Filed: 03/02/2020 No. 17-20492 990 F.2d at 825. There’s also enough evidence that Sanders knew the unlawful purpose of the agreement and wanted to further it. The fraudulent scheme at FWR involved, among other things, overbilling and misrepresenting what services were performed, charging for unnecessary care, and delegating PT to untrained technicians. And “the government produced evidence that [Sanders was] not only aware of the fraud, but actually helped perpetrate [it].” Kuhrt, 788 F.3d at 416. Indeed, Sanders was excessively focused on maximizing billings. He fired one employee for refusing to lie on documents. He admonished Dr. Smith for failing to bill extra time for patients who Smith said didn’t need it. He overruled another doctor’s objection to how much therapy was being ordered. At the post-warrant executive meeting, he spearheaded the effort to get Dr. Key to the noncomplying clinic so that DOL couldn’t “say that he wasn’t there.” He was very involved in the clinical side of the business, and he was the company’s expert on DOL and the FECA rules. And, of course, he was in executive leadership. All of that evidence shows his knowledge and intent.
There’s also enough evidence that Rose was part of a conspiracy to commit health care and wire fraud. She too participated in the company’s culture of questionable billing practices. “She was very involved” in discussions about billings. During Dr. Smith’s evaluation, she told Smith that Smith needed to bring in more money and that her salary would be tied to profits. She signed the written evaluation that criticized Smith for failing to pad billings. 8 And 8Rose points out that focusing on profit isn’t illegal. But the fraudulent scheme at FWR was predicated on overbilling and billing for services that weren’t compliant or necessary. So, the jury could have interpreted Rose’s focus on maximizing billing as evidence she 12 Case: 17-20492 Document: 00515327502 Page: 13 Date Filed: 03/02/2020 No. 17-20492 she attended the weekly meetings where maximizing billings was regularly discussed and where her husband frequently became upset about their paucity. Then, of course, there is her revealing behavior after the search warrants were served. Instead of asking why agents were snooping around, Rose ran to the bank and shifted money between accounts, all in the name of “hid[ing it] from the federal government.” At the executive meeting that followed, she thanked the powers above when Cruise reported that no listening devices had been found in the office. That is not behavior we’d expect of an executive who was unaware of and didn’t participate in the fraud. Rose’s “efforts to assist in the concealment of a conspiracy may help support an inference that [she] had joined [it].” 9 The same evidence also supports that Mrs. Rose was a party to an agreement. She acted with others in hiding funds from the government, attending the post-warrant meetings, and admonishing employees for failing to maximize billings, among other events. See Frydenlund, 990 F.2d at 825 (recognizing that agreements can be inferred from concerted action). All of that evidence, combined with her marriage to Mr. Rose, the ringleader, and her number three position in a company permeated with fraud, 10 is enough to sustain the conviction. participated in the scheme. See Lugo-Lopez, 833 F.3d at 457 (stating that the jury can pick among reasonable constructions of the evidence). 9United States v. Robertson, 659 F.2d 652, 657 (5th Cir. Unit A Oct. 1981); see also United States v. Martinez, 921 F.3d 452, 470 (5th Cir.) (“[Defendant] also closed the bank account he had opened two days after a search warrant was executed . . . . [T]he jury could have viewed this as evidence of knowledge.”), cert. denied, 140 S. Ct. 571 (2019). 10See United States v. Willett, 751 F.3d 335, 340 (5th Cir. 2014) (characterizing as circumstantial evidence the existence of a family relationship and the defendant’s position of authority within the organization). 13 Case: 17-20492 Document: 00515327502 Page: 14 Date Filed: 03/02/2020 No. 17-20492
To the extent any objections remain to Sanders’s and Rose’s Count 1 convictions, they lack merit. Defendants posit that we should set aside their convictions because no witness directly implicated them in the conspiracy. Yet the government was permitted to (and did) establish the conspiracy on circumstantial evidence alone. See Sutherland, 656 F.2d at 1188. “[T]he defendants cannot obtain an acquittal simply by ignoring inferences that can logically be drawn from the totality of the evidence.” Martinez, 921 F.3d at 466. Rose and Sanders proffer some indicia of innocence and conclude that reversal should follow. 11 But we must “view the evidence in the light most favorable to the verdict,” 12 and “[t]he evidence need not exclude every reasonable hypothesis of innocence,” Lugo-Lopez, 833 F.3d at 457. In light of the evidence reviewed above, defendants’ apparent exculpating evidence could have failed to create doubt in the mind of a rational juror. Defendants suggest that Ganji, 880 F.3d at 773, requires reversal. It does not. In that case, we vacated the convictions of two defendants for conspiracy to commit health care fraud. Id. at 778. For one defendant, Davis, all the government could muster was evidence that Davis “should have known” that her employees were executing a fraudulent scheme—not that she did know. Id. at 776 (emphasis removed). And, for the other defendant, Ganji, there was no evidence whatsoever that she had participated in any unlawful agreement. Id. at 773. The confessed ringleaders of the scheme testified that 11 Sanders notes testimony that he told employees not to do anything unlawful. He points out that Dr. Jaime testified that Sanders never ordered him to falsify medical records, billing hours, or DTNs. Rose urges that she wasn’t involved with clinical matters and frequently was at work for only a few hours and that Jaime testified he didn’t see her do anything fraudulent. 12 Gonzalez, 907 F.3d at 873 (quotation marks removed). 14 Case: 17-20492 Document: 00515327502 Page: 15 Date Filed: 03/02/2020 No. 17-20492 they didn’t know Ganji and hadn’t worked with her. Id. at 770. Ganji involved quite a different story. There’s evidence of Rose’s and Sanders’s participation that goes far beyond a theory that they should’ve known what was going on. They knew. Key players, such as Cruise, provided testimony showing both of them working in concert with others to accomplish the illicit goals. Ganji is inapt. Sanders contends that Dr. Jaime’s acquittal was inconsistent with Sanders’s conviction. But even if that questionable premise were true, it wouldn’t require reversal. “[I]nconsistent verdicts are not a bar to conviction so long as there is sufficient evidence to support the jury’s determination of guilt,” United States v. Gieger, 190 F.3d 661, 664 (5th Cir. 1999), 13 and there was “ample” evidence of Sanders’s guilt, as the district court correctly observed. Relying on United States v. White, 569 F.2d 263, 268 (5th Cir. 1978), Rose conte4nds that her conviction cannot stand merely because she was married to the chief miscreant. But the evidence of Mrs. Rose’s conspiratorial activity goes much further than the fact of her marriage to Mr. Rose. And regardless, the jury was permitted to consider the marriage as circumstantial evidence of knowledge. See Willett, 751 F.3d at 340. The convictions of conspiracy to commit health care and wire fraud were adequately supported.
Mrs. Rose and Sanders maintain that there was insufficient evidence supporting their convictions for health care fraud and aiding and abetting (Counts 2–18) in violation of 18 U.S.C. §§ 1347 and 2, and wire fraud and aiding and abetting (Counts 19–23) in violation of 18 U.S.C. §§ 1343 and 2. The health care fraud counts referenced individual OWCP billings that were 13 To his credit, Sanders conceded this point. 15 Case: 17-20492 Document: 00515327502 Page: 16 Date Filed: 03/02/2020 No. 17-20492 allegedly inaccurate. 14 The wire fraud counts were tied to payments from DOL Treasury to a bank account held in FWR’s name. As above, there was sufficient evidence.
To prove health care fraud, the government had to show that the defendants either (1) “knowingly and willfully execute[d], or attempt[ed] to execute, a scheme or artifice . . . to defraud any health care benefit program;” or (2) “knowingly and willfully execute[d], or attempt[ed] to execute, a scheme or artifice . . . to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program . . . .” 18 U.S.C. § 1347(a); see also United States v. Mahmood, 820 F.3d 177, 185–86 (5th Cir. 2016). “[T]he government must show [that the defendant] participated in the scheme to defraud, not that he took part in every aspect of that scheme.” United States v. Tencer, 107 F.3d 1120, 1127 (5th Cir. 1997) (mail fraud case). Next, “[i]n a wire fraud prosecution, the government must prove that (1) a scheme to defraud exists, (2) the defendant used wire communications in interstate or foreign commerce to further that scheme, and (3) the defendant had specific intent to defraud.” 15 “[O]nce membership in a scheme to defraud is established, a knowing participant is liable for any wire communication which subsequently takes place or which previously took place in connection with the scheme.” United States v. Stalnaker, 571 F.3d 428, 436 (5th Cir. 2009) (brackets removed). 14As one example, Count 2 charged that a bill had been submitted for services rendered to patient “Bryan B.” that were “not provided as billed.” 15United States v. del Carpio Frescas, 932 F.3d 324, 329 (5th Cir.) (per curiam), cert. denied, 140 S. Ct. 620 (2019). 16 Case: 17-20492 Document: 00515327502 Page: 17 Date Filed: 03/02/2020 No. 17-20492 Finally, consider aiding and abetting. It “is not a separate offense, but it is an alternative charge in every indictment, whether explicit or implicit.” United States v. Neal, 951 F.2d 630, 633 (5th Cir. 1992). To prove it, the government needed to show, in the context of this case, that (1) health care and wire fraud were “committed by someone,” 16 and “(2) the defendant associated with the criminal activity, participated in it, and acted to help it succeed.” 17 “It is not necessary . . . that one charged as an aider or abettor commit the overt acts that . . . accomplish the offense or that he have knowledge of the particular means his principals . . . employ to carry out the criminal activity.” United States v. Austin, 585 F.2d 1271, 1277 (5th Cir. 1978). Similarly, there needn’t be proof “that the defendant was present when the crime was committed or that he actively participated therein.” United States v. James, 528 F.2d 999, 1015 (5th Cir. 1976). Instead, liability under 18 U.S.C. § 2 “results from the existence of a community of unlawful intent between the aider or abettor and the principal.” Austin, 585 F.2d at 1277 (cleaned up). Neither Sanders nor Rose contests the first element of aiding and abetting—namely, that, someone committed health care or wire fraud with respect to each count. 18 Instead, they plead that they didn’t know about or help the fraud. We follow their lead and evaluate whether the evidence was sufficient to show that they associated with, participated in, and acted to help 16 United States v. Collins, 774 F.3d 256, 263 (5th Cir. 2014). 17 United States v. Barnes, 803 F.3d 209, 216 (5th Cir. 2015). 18 See Collins, 774 F.3d at 263. Rose concedes that “the evidence in this case might allow a juror to infer that there were some violations of FECA rules.” Sanders spends one page in his seventy-page brief contending that FWR’s practices were generally lawful. But he fails to cite any authority or even the record, and he neglects to examine the evidence underlying each individual count. His contention is therefore waived as inadequately briefed. E.g., United States v. Ballard, 779 F.2d 287, 295 (5th Cir. 1986). 17 Case: 17-20492 Document: 00515327502 Page: 18 Date Filed: 03/02/2020 No. 17-20492 the health care and wire fraud succeed. 19
“Typically, the same evidence will support both a conspiracy and an aiding and abetting conviction. This is such a case.” United States v. Scott, 892 F.3d 791, 799 (5th Cir. 2018) (footnote and quotation marks removed). Reviewing what is now familiar, Sanders, among other acts, pressured employees to maximize billings even when treatment was unnecessary. He fired an employee for refusing to lie on documents. He schemed with Mr. Rose to put Dr. Key at a noncomplying clinic to ensure that DOL would send payments. Those actions, among many others, show that there was “a community of unlawful intent between [Sanders] and the principal[s]” of the fraud. Austin, 585 F.2d at 1277 (brackets removed). Sanders’s main response is to point to evidence that he told employees not to do anything illegal. But that doesn’t prove that the jury acted irrationally in convicting. Cf. Bowen, 818 F.3d at 186. For one, the evidence needn’t “exclude every reasonable hypothesis of innocence.” Lugo-Lopez, 833 F.3d at 457. And a jury could have inferred that Sanders knew he was crossing lines, because he felt a need to tell employees not to break the law. Sanders also contends that the wire-fraud convictions should be set aside because there was “no evidence indicating Sanders played any role whatsoever in the actual process of submitting bills for payment.” But, as an aider and abettor, there was no requirement that Sanders himself submit the fraudulent claims sent by wire. See United States v. Rivera, 295 F.3d 461, 466 (5th Cir. 19 See Barnes, 803 F.3d at 216; see, e.g., United States v. Ismoila, 100 F.3d 380, 387 (5th Cir. 1996) (assuming substantive prong of fraud count was satisfied because defendant conceded as much). Defendants in other health care fraud cases have proven capable of examining the evidence of substantive fraud underlying each count. See, e.g., Martinez, 921 F.3d at 472–73. 18 Case: 17-20492 Document: 00515327502 Page: 19 Date Filed: 03/02/2020 No. 17-20492 2002). Instead, the government needed only to show that he “assisted the actual perpetrator of the wire fraud crimes while sharing the requisite criminal intent.” Id. For reasons already described, the government met that burden. The evidence is also sufficient as to Mrs. Rose. As seen above, she was very involved in company discussions about maximizing billings. And she played a role in that company culture: She informed Dr. Smith that Smith needed to do more to increase revenues and informed her that her pay would be tied to her clinic’s numbers. Mrs. Rose also helped to conceal the fraud by transferring FWR’s money around various bank accounts once she’d learned that search warrants had been served. She was relieved to hear that listening devices hadn’t been discovered in the executive office. All of that evidence supports that she knew about, participated in, and wanted to see the health care and wire fraud succeed. Accordingly, there is sufficient evidence supporting Rose’s and Sanders’s Counts 2–23 convictions for health care and wire fraud and aiding and abetting.
Mrs. Rose challenges the sufficiency of the evidence for her Count 24 conviction of conspiracy to launder money in violation of 18 U.S.C. § 1956(h). We affirm.
Mrs. Rose’s efforts to hide money from the government not only proved unsuccessful. They also put her in further legal trouble: namely, a charge of conspiracy to launder money. Count 24 accused Rose, along with her husband, of conspiring to “conduct financial transactions . . . with the proceeds of specified unlawful activity”—namely, the health care and wire fraud discussed above. The Roses’ alleged objective was to conceal and disguise the nature, 19 Case: 17-20492 Document: 00515327502 Page: 20 Date Filed: 03/02/2020 No. 17-20492 location, and ownership of the criminal proceeds. The indictment alleged that, soon after the search warrants were executed, the Roses transferred at least $190,000 in DOL payments out of various FWR bank accounts. The same day (July 11, 2013), they deposited that sum into a bank account held by “Reaching Out 2 Youth Corporation” (“RO2Y”), an account the Roses controlled. The Roses then met at a bank in Houston and withdrew the $190,000 from the RO2Y account via a cashier’s check for $700,000. Mrs. Rose signed the withdrawal slip. The payee was Pure Vanity, and the remitter was “Glamor by Design, Inc.” Mrs. Rose owned both of those corporations. The next day, July 12, the Roses allegedly opened a new bank account in Pure Vanity’s name and deposited the $700,000 check into it. Finally, three days later, the Roses transferred at least $130,000 out of the Pure Vanity account back into various FWR accounts. John Cruise testified that Mrs. Rose told him that she moved the funds around to hide them from the government.
To prove an 18 U.S.C. § 1956(h) conspiracy to launder money, the government must show that (1) “there was an agreement between two or more persons to commit money laundering[,]” 20 and (2) “that the defendant joined the agreement knowing its purpose and with the intent to further the illegal purpose.” Alaniz, 726 F.3d at 601. Rose stresses that there was no evidence that she had the intent to further the unlawful purpose of any agreement. But she does not contest the evidence that the money transfers described above occurred. Nor does she contest that the money was proceeds of unlawful 20 Money laundering generally requires that the defendant have engaged in a transaction with property he knew was derived from illegal proceeds. See 18 U.S.C. § 1957(a). 20 Case: 17-20492 Document: 00515327502 Page: 21 Date Filed: 03/02/2020 No. 17-20492 activity. And she acknowledges Cruise’s testimony that her goal was to hide the money from the government. Yet that testimony is powerful indication that she knew about, and intended to further, an agreement to launder criminally derived property. Rose also urges that there was no evidence that she was party to an illicit agreement with her husband to launder money. But again, plenty of evidence suggests otherwise. The grand jury alleged that Mrs. and Mr. Rose acted together in transferring the funds around, and John Cruise testified to the same. “[Mrs. Rose] told me to meet them, her and [Mr.] Rose, at the . . . bank where we did our business,” he stated, and “I was told that they were going to pull the money out of the business banking accounts.” That testimony was more than enough to establish that Mr. and Mrs. Rose had agreed with each other to launder money. See Frydenlund, 990 F.2d at 825 (noting that agreements may be inferred from concert of action).
Mrs. Rose’s final sufficiency challenge is to her Count 25 conviction of substantive money laundering and aiding and abetting in violation of 18 U.S.C. §§ 1957(a) and 2. We affirm. Mrs. Rose’s money-laundering troubles followed her even after the initial bank transfers. The grand jury alleged that almost a year later, the Roses withdrew about $27,000 from the Pure Vanity account to buy a cashier’s check payable to Fort Bend Title. The Pure Vanity account, of course, had been opened around the time of the Roses’ post-warrant flurry of money transfers. The cashier’s check was then used to purchase a plot of land in Texas. The check’s acquisition was the basis for the Count 25 money-laundering charge. To convict of money laundering under 18 U.S.C. § 1957(a), the 21 Case: 17-20492 Document: 00515327502 Page: 22 Date Filed: 03/02/2020 No. 17-20492 government must prove that “(1) property valued at more than $10,000 that was derived from a specified unlawful activity, (2) the defendant’s engagement in a financial transaction with the property, and (3) the defendant’s knowledge that the property was derived from unlawful activity.” Martinez, 921 F.3d at 476. Rose challenges only the third element, maintaining that she didn’t know the funds used to buy the cashier’s check were criminally derived. She relies on United States v. French, 748 F.3d 922 (9th Cir. 2014). The conviction was sound. There is more than enough evidence that Mrs. Rose knew the funds were derived from unlawful activity. She opened the Pure Vanity account around the time of the search warrants and deposited the $700,000 in laundered funds into it, all as part of her scheme to “hide” the money from the government. The withdrawal described in this count came from that tainted Pure Vanity account. French is unavailing. There, the Ninth Circuit reversed the defendant’s two-count conviction of money laundering. See French, 748 F.3d at 936–37. The first count was reversed because there was no evidence that the defendant had purchased the relevant vehicle—instead, the defendant’s husband had done so without her knowledge. Id. at 936. The second count met a similar fate, because the illicit money had been transferred into a bank account over which the defendant had no control, and there was no evidence that the defendant knew of the transfer. Id. at 936–37. Unlike the situation in French, however, there is plenty of evidence that Mrs. Rose knew the money used to purchase the check was derived from unlawful activity, and she controlled all the accounts involved in this scheme.