Court Opinion

ID: 873684
Source: CourtListenerOpinion
Date Created: 2013-06-03 17:14:25.973334+00
Date Added: 2024-06-11T09:07:03.448953
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA ,                 No. 11-50230
                Plaintiff-Appellee,
                                              D.C. No.
                 v.                        2:08-cr-01094-
                                              WDK-5
KELECHI AJOKU , AKA Kelechi
Ajouku,
             Defendant-Appellant.            OPINION

     Appeal from the United States District Court
          for the Central District of California
   William D. Keller, Senior District Judge, Presiding

                Argued and Submitted
        January 11, 2013—Pasadena, California

                      Filed June 3, 2013

  Before: Alfred T. Goodwin, Michael Daly Hawkins,
      and Kim McLane Wardlaw, Circuit Judges.

              Opinion by Judge Hawkins
2                   UNITED STATES V . AJOKU

                           SUMMARY*

                           Criminal Law

    The panel affirmed a jury conviction of making false
statements relating to health care matters in violation of
18 U.S.C. § 1035.

    Rejecting the defendant’s sufficiency-of-the-evidence
challenge, the panel reasoned: (1) a § 1035 violation requires
a finding that the “matter” involved a health benefit program,
not that the particular “statement” falsified or covered up
involved a health benefit program; (2) it was immaterial that
the defendant’s statements were made to California
investigators (rather than directly to federal authorities) in a
matter affecting the delivery of federal Medicare payments;
(3) there was sufficient evidence of materiality to Medicare;
(4) there was sufficient evidence of the defendant’s knowing
falsehood; and (5) there was sufficient evidence to find that
the defendant was aware the certified deliveries of devices
were not occurring and deliberately avoided the truth.

    The panel held that whatever the merits of the defendant’s
contention that the jury could not return a guilty verdict under
a concealment theory without finding the defendant owed a
duty to disclose the truth, an issue that has never been decided
by this court, any error was not plain.

    Holding that the district court did not err in instructing the
jury on “willfulness,” the panel applied to § 1035 the same

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                  UNITED STATES V . AJOKU                     3

definition used for the general false statements statute,
18 U.S.C. § 1001: willful “means no more than that the
forbidden act is done ‘deliberately and with knowledge.’”
Regarding materiality, the panel held that the district court’s
instruction properly limited the jury to considering whether
the defendant’s statements were capable of influencing a
decision or activity in a matter involving a health care benefit
program.

    The panel rejected the defendant’s contention that the
district court admitted inflammatory and unduly prejudicial
evidence concerning the scope of the alleged billing fraud.

                         COUNSEL

Ethan A. Balogh (argued) and Jay A. Nelson, Coleman &
Balogh, San Francisco, California, for Defendant-Appellant.

Aaron M. May (argued), Assistant United States Attorney,
Andre Birotte Jr., United States Attorney, Robert E. Dugdale,
Assistant United States Attorney, Chief, Criminal Division,
Monica D. Mange, Assistant United States Attorney, United
States Attorney’s Office, Los Angeles, California, for
Plaintiff-Appellee.

                          OPINION

HAWKINS, Senior Circuit Judge:

   Kelechi Ajoku (“Ajoku”), convicted of four counts of
making false statements relating to health care matters
(18 U.S.C. § 1035) and sentenced to thirteen months
4                 UNITED STATES V . AJOKU

incarceration plus restitution, appeals, arguing the district
court erred by: (1) denying his motion for judgment of
acquittal on all counts because the government presented
insufficient evidence to support the convictions; (2) failing to
instruct the jury that a duty to disclose is an element of false
statements by concealment; (3) improperly instructing the
jury on the elements of willfulness and materiality; and (4)
admitting inflammatory and unduly prejudicial evidence
concerning the scope of the alleged billing fraud. He also
argues that the cumulative effect of these errors requires
reversal. We have jurisdiction pursuant to 28 U.S.C. § 1291
and affirm.

        FACTS AND PROCEDURAL HISTORY

    In 2005, Ajoku, a licensed vocational nurse, was offered
a job to serve as the “exemptee” for the Santos Medical
Supply Company (“Santos”) at a salary of $400 per month.
Under California regulations, an exemptee, acting like a
pharmacist, is responsible for maintaining and distributing
prescription medical devices for retailers like Santos. Cal.
Health & Safety Code §§ 111656.4–111656.5. Santos did not
require Ajoku, who was working 70–80 hours a week at two
other jobs, to actually perform the functions of exemptee as
a condition of compensation. Rather, Ajoku was required
only to complete paperwork and remain on call to come into
the business and answer questions if government inspectors
visited the facility.

   Ajoku agreed to the arrangement and prepared an
application for his exemptee license. When his first exemptee
application was rejected due to insufficient information,
Ajoku supplemented the application by signing a backdated
employment contract and an affidavit that stated he would be
                 UNITED STATES V . AJOKU                    5

present whenever prescription devices were dispensed and he
would have exclusive control over the items—facts Ajoku
knew to be false. After Ajoku received his license, he was
paid a $300 bonus, and put on the Santos payroll. Santos
immediately began to bill Medicare for device sales—
something it could not lawfully do without a state licensed
exemptee.

    Although Ajoku was unaware that Santos was entirely
organized and executed to defraud Medicare by billing the
program for medical devices never delivered, Santos’s sham
transactions would not have been possible with a real
exemptee ensuring the prescription devices were distributed
in accordance with state regulations. Santos ultimately billed
Medicare for $2.9 million in fraudulent claims, for which it
was paid approximately $1.8 million.

    Ajoku never performed the duties of an exemptee but
would visit Santos from time-to-time to complete paperwork
for the group. In 2005, Ajoku completed and signed multiple
training forms certifying to Medicare that he had delivered
and trained patients to use motorized wheelchairs even
though he had not done so. Ajoku renewed his exemptee
license annually from 2006 through 2008, each year
certifying to California that he was working as a proper
exemptee for Santos.

     On April 16, 2008, a California Department of Public
Health inspector visited Santos and Ajoku was summoned to
answer his questions. Though Santos passed the inspection,
the investigator tipped off Medicare officials of possible
fraud at the company. On May 2, 2008, two agents of the
U.S. Department of Health and Human Services visited
Santos wearing hidden video and audio recorders. Ajoku was
6                UNITED STATES V . AJOKU

again called in to pose as an active exemptee for Santos.
Answering the agents’ questions, Ajoku asserted that he had
responsibility for storing and distributing the prescription
goods and training patients on their use. After a few minutes,
Ajoku ended the line of questioning by telling the agents he
had to go.

    A federal grand jury subsequently returned an indictment
against Ajoku and other members of the Santos operation, the
final version of which alleged health care fraud, conspiracy
to commit health care fraud, and false statements. By the time
of trial, everyone but Ajoku had entered guilty pleas. The
government proceeded to trial on the false statement counts
(18 U.S.C. § 1035) and Ajoku was convicted on each count.

                       DISCUSSION

    I. Sufficiency Challenges

    We review de novo claims of insufficient evidence,
asking whether the evidence, viewed in the light most
favorable to the prosecutor, could allow “any rational trier of
fact” to find the essential elements of the crime beyond a
reasonable doubt. United States v. Nevils, 598 F.3d 1158,
1163–64 (9th Cir. 2010) (quoting Jackson v. Virginia,
443 U.S. 307, 319 (1979)) (emphasis omitted).

       A. The Jurisdictional Element

    There was sufficient evidence to convict Ajoku of making
a false statement relating to a health care benefit program for
his communication with California officials under 18 U.S.C.
§ 1035(a). That section provides:
                 UNITED STATES V . AJOKU                    7

       Whoever, in any matter involving a health
       care benefit program, knowingly and
       willfully—

           (1) falsifies, conceals, or covers up by any
       trick, scheme, or device a material fact; or

           (2) makes any materially false, fictitious,
       or fraudulent statements or representations, or
       makes or uses any materially false writing or
       document knowing the same to contain any
       materially false, fictitious, or fraudulent
       statement or entry,

       in connection with the delivery of or
       payment for health care [shall be punished
       accordingly].

     A plain reading of 18 U.S.C. § 1035(a) reveals that the
jury was required to find that the “matter” involved a health
benefit program, not that the particular “statement” falsified
or covered up involved a health benefit program. Id. The jury
was presented with evidence that Ajoku’s statements and
writings were made in connection with the delivery of and
Medicare payment for prescription devices because Santos
could not bill Medicare for devices without employing and
utilizing a qualified exemptee under California law.

    We need not address the outer limit of whether a
statement “involv[es]” a health care program for the purposes
of § 1035 because there was sufficient evidence to determine
that Ajoku’s statements to California authorities were made
in a matter involving Medicare. While Ajoku made his
statements to California rather than federal authorities, we
8                 UNITED STATES V . AJOKU

have held that false statements that are not made to federal
authorities but that concern matters of interest to the federal
government may fall within federal oversight. For example,
§ 1035 is substantially identical to 18 U.S.C. § 1001, which
sanctions anyone who “knowingly and willfully . . . makes
any materially false, fictitious, or fraudulent statement or
representation” concerning “any matter within the jurisdiction
of the executive, legislative, or judicial branch of the
Government of the United States . . . .” We have previously
held that § 1001 encompasses statements involving matters of
federal concern, even when those statements were made to
state investigators. See United States v. King, 660 F.3d 1071,
1081 (9th Cir. 2011), cert. denied, 132 S. Ct. 2740 (2012)
(holding that false statements made to an Idaho agricultural
inspector were sufficiently tied to federal interests to violate
§ 1001). We have also held that § 1001 encompasses false
documents that were never actually provided to any
governmental entity, so long as they were intended to be used
in a matter of federal concern. See United States v. Balk,
706 F.2d 1056, 1059 (9th Cir. 1983) (“Under section 1001,
the falsified documents did not have to be submitted to the
Navy; it is only necessary that their intended use be related to
a matter within the jurisdiction of the Navy.”). Given our
precedent, it is immaterial that Ajoku’s statements were made
to California investigators rather than directly to federal
authorities. Instead, it is sufficient for the purposes of § 1035
that the statements were made to state authorities in a matter
affecting the delivery of federal Medicare payments.

        B. Materiality to Medicare of State Regulatory
           Compliance

   Ajoku was charged in count one with falsifying,
concealing, or covering up that Santos maintained and
                  UNITED STATES V . AJOKU                      9

distributed syringes outside his presence and control. A
statement is material if it has “a natural tendency to influence,
or be capable of influencing, the decision of the
decisionmaking body to which it was addressed.” United
States v. Gaudin, 515 U.S. 506, 509 (1995) (quoting Kungys
v. United States, 485 U.S. 759, 770 (1988)). The jury heard
sufficient evidence that Ajoku’s statements and concealment
were addressed to Medicare. Among other things, Ajoku
concedes that some of his statements to investigators were
directed to Medicare. His other statements included his
application for the exemptee license, the annual renewals, and
his participation in a regulatory compliance inspection. This
license was sent to Medicare on four occasions. Further, there
was evidence that Ajoku’s statements and concealments had
the ability to influence Medicare: Medicare officials would
not have paid Santos’s billing claims had it been informed
that Ajoku was not exercising exemptee responsibility over
medical devices, like feeding syringes.

        C. Proof of Knowing Falsehood

    There was also sufficient evidence that Ajoku knowingly
provided false information to Medicare investigators in the
form of circumstantial evidence sufficient to establish both
actus reus and mens rea. See In re Khalil, 578 F.3d 1167,
1169 (9th Cir. 2009) (“Fraudulent intent may be inferred from
a pattern of behavior.”). For example, there was undisputed
evidence that: (1) Santos did not deliver enteral nutrition with
syringes; (2) Ajoku told the agents otherwise; and (3) Ajoku
was paid to take the title of exemptee without ever exercising
any of its duties. Ajoku took the position at trial that he
believed his statements to be true and that some of the
statements were true, if interpreted within the proper context.
However, required, as we are, to view the evidence in the
10                UNITED STATES V . AJOKU

light most favorable to the government, see Jackson, 443 U.S.
at 319, we cannot say that the record required “any rational
trier of fact” to choose Ajoku’s interpretation over that of the
government. Nevils, 598 F.3d at 1163–64.

       D. Imputation of Knowledge to a Willfully Blind
          Defendant

    Ajoku argues that the jury was presented with insufficient
evidence to find that he falsely represented that the named
patients were supplied and trained on motorized wheelchairs
as charged in counts two through four of the trial indictment
because there was no evidence that he knew Santos did not
deliver the wheelchairs and delivered cheap motor scooters
instead.

    While there is no evidence that Ajoku actually knew
about Santos’s scam, the doctrine of willful blindness imputes
knowledge to a “defendant who all but knew the truth—a
defendant who suspects a fact, realizes its high probability,
but refrains from obtaining final confirmation in order to be
able to deny knowledge if apprehended.” United States v.
Heredia, 483 F.3d 913, 928 (9th Cir. 2007) (internal
quotation marks and citations omitted). Ajoku signed forms
stating that he was the person who had delivered motorized
wheelchairs to the three named individuals and had trained
them on the use of the wheelchairs, knowing he had never
done any such thing. Ajoku may not have been told that
Santos failed to deliver wheelchairs to the patients, but he
certainly did know that he, the responsible technician, had not
delivered the wheelchairs, and he never asked who delivered
the wheelchairs instead of him.
                 UNITED STATES V . AJOKU                    11

    The jury thus had sufficient evidence to find that Ajoku
was aware the certified deliveries were not occurring and
deliberately avoided learning the truth. See id.

   II. Duty to Disclose

    Ajoku argues for the first time on appeal that the district
court erred in failing to instruct the jury that it could not
return a guilty verdict under a concealment theory without
finding Ajoku owed a duty to disclose the truth. In the
absence of a preserved objection, we apply plain error review
for the jury instruction claim and may reverse only if any
instructional error was clearly erroneous under current law.
See United States v. Olano, 507 U.S. 725, 734 (1993). Having
no clearly established law to guide its decision, any error in
omitting an element from the instruction was not plain. See
id. Whatever the merits of this contention, the issue has never
been decided by this court. Therefore, the error, if any, was
not plain.

   III.    Jury Instruction on Willfulness

   The mens rea element of 18 U.S.C. § 1035 is “knowingly
and willfully.” The Supreme Court has described willfully as
“a word of many meanings whose construction is often
dependent on the context in which it appears.” Bryan v.
United States, 524 U.S. 184, 191 (1998) (internal quotation
marks and citation omitted).

    In the context of false statement crimes, however,
willfulness simply means “deliberately and with knowledge,”
and does not require knowledge of unlawfulness. United
States v. Tatoyan, 474 F.3d 1174, 1182 (9th Cir. 2007) (citing
Browder v. United States, 312 U.S. 335, 341 (1941))
12                    UNITED STATES V . AJOKU

(interpreting 18 U.S.C. § 1001); see also United States v.
Heuer, 4 F.3d 723, 732 (9th Cir. 1993) (same). This is
consistent with the “traditional rule,” recognized in Bryan
that ignorance of the law is no defense. 524 U.S. at 196.

     18 U.S.C. § 1035 is a false statement crime substantively
identical to 18 U.S.C. § 1001, except that § 1035 is
jurisdictionally limited to matters involving a health care
benefit program and § 1001 is jurisdictionally limited to
matters within the jurisdiction of the executive, legislative, or
judicial branch of the United States government. Both statutes
use nearly identical language. While § 1035 sanctions anyone
who “knowingly and willfully . . .makes any materially false,
fictitious or fraudulent statements or representations,” § 1001
sanctions anyone who “knowingly and willfully . . .makes
any materially false, fictitious or fraudulent statement or
representation.” If this nearly identical language were not
enough, Congressional intent behind both statutes was also
similar; both statutes are intended to protect federal interests
from the harms of knowing and willful fraud and deception.1
Where two statutes use similar language and were enacted for
the same purpose, it is appropriate to interpret the language
of the statutes pari passu. See Northcross v. Bd. of Ed. of
Memphis City Sch., 412 U.S. 427, 428 (1973). This
interpretive rule “is a reflection of practical experience in the

   1
     T he current version of 18 U.S.C. § 1001 was enacted to “protect the
authorized functions of governmental departments and agencies from the
perversion which might result from . . . deceptive practices,” United States
v. Rodgers, 466 U.S. 475, 480 (1984) (quoting United States v. Gilliland,
312 U.S. 86, 93 (1941)). 18 U.S.C. § 1035 was enacted as part of Health
Insurance Portability and Accountability Act of 1996, legislation that was
intended in part to “combat waste, fraud and abuse in health insurance and
health care delivery . . . .” Pub. L. No. 104-91, tit. II, § 244(a), 110 Stat.
2017 (1996).
                  UNITED STATES V . AJOKU                    13

interpretation of statutes: a legislative body generally uses a
particular word with a consistent meaning in a given context.”
Erlenbaugh v. United States, 409 U.S. 239, 243 (1972). We
therefore apply the same definition of willful used for the
general false statements statute to interpret willful in
18 U.S.C. § 1035: willful “means no more than that the
forbidden act is done ‘deliberately and with knowledge.’”
United States v. Carrier, 654 F.2d 559, 561 (9th Cir. 1981)
(quoting Hirsch v. INS, 308 F.2d 562, 567 (9th Cir. 1962))
(defining “willful” for purposes of 18 U.S.C. § 1001).
Accordingly, the prosecution was required only to show that
Ajoku’s statements were made deliberately and with
knowledge that the statements were untrue or the document
was false. Because the district court so instructed the jury, it
did not err.

   IV.     Jury Instruction on Materiality

    Because Ajoku did object to the instructions on
materiality, we review de novo to determine whether the
instructions omitted or misstated an element of the crime. See
United States v. Knapp, 120 F.3d 928, 930 (9th Cir. 1997).
Ajoku contends that the jury instructions were vague and
overbroad because the district court failed to add the phrase
“involving a health care benefit program” to the jury
instruction on materiality. However, the same instruction
told the jurors that they could not convict Ajoku unless they
found that his statements were made in a matter “involving a
health care benefit program.” Though the court did not use
the “precise words” preferred by Ajoku, the instruction
properly limited the jury to considering whether Ajoku’s
statements were capable of influencing a decision or activity
in a matter involving a health care benefit program. See
United States v. Frega, 179 F.3d 793, 807 (9th Cir. 1999).
14               UNITED STATES V . AJOKU

     V. Admission of Evidence Regarding the Scope of the
        Fraud

    Non-constitutional evidentiary decisions are reviewed for
abuse of discretion and reversal is appropriate only if the
error “more likely than not affected the verdict.” United
States v. Decoud, 456 F.3d 996, 1010 (9th Cir. 2006) (internal
quotation marks and citations omitted). The probative value
of the details of the Santos operation in determining whether
Ajoku’s statements involved and were material to Medicare
outweighed any prejudice. See Fed. R. Evid. 402. Ajoku
suggests no evidence that the government could have
presented to establish the elements absent the financial effect
of the fraud. See Old Chief v. United States, 519 U.S. 172,
186 (1997). While Ajoku was personally unaware of the
scope of the fraud, the details of the scheme were not so
viscerally abhorrent to the jurors as to preclude them from
viewing the rest of the case fairly. See United States v.
Merino-Balderrama, 146 F.3d 758, 762–63 (9th Cir. 1998)
(district court admission of child pornography with “graphic
sexual conduct” was error because of unduly prejudicial
effect of “inflammatory”evidence).

     VI.   Cumulative Error

    There was sufficient evidence to support Ajoku’s
convictions, and no plain error or abuse of discretion in the
jury instructions or the admission of evidence. Because we
determine no error occurred, there is no cause to conduct a
review under the cumulative error doctrine. United States v.
Jeremiah, 493 F.3d 1042, 1047 (9th Cir. 2007).

     AFFIRMED.