Court Opinion

ID: 205137
Source: CourtListenerOpinion
Date Created: 2011-02-19 01:04:40+00
Date Added: 2024-06-11T17:27:46.942090
License: Public Domain

UNPUBLISHED

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT

                            No. 10-4142

UNITED STATES OF AMERICA,

               Plaintiff - Appellee,

          v.

PRADEEP SRIVASTAVA,

               Defendant - Appellant.

                            No. 10-4600

UNITED STATES OF AMERICA,

               Plaintiff - Appellee,

          v.

PRADEEP SRIVASTAVA,

               Defendant - Appellant.

                            No. 10-4720

UNITED STATES OF AMERICA,

               Plaintiff - Appellee,

          v.
PRADEEP SRIVASTAVA,

                Defendant - Appellant.

Appeals from the United States District Court for the District
of Maryland, at Greenbelt.    Roger W. Titus, District Judge.
(8:05-cr-00482-RWT-1)

Argued:   December 10, 2010              Decided:   February 18, 2011

Before NIEMEYER and KING, Circuit Judges, and Patrick Michael
DUFFY, Senior United States District Judge for the District of
South Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Kannon Kumar Shanmugam, WILLIAMS & CONNOLLY, LLP,
Washington, D.C., for Appellant.    Stuart A. Berman, OFFICE OF
THE UNITED STATES ATTORNEY, Greenbelt, Maryland, for Appellee.
ON BRIEF: Paula M. Junghans, ZUCKERMAN SPAEDER LLP, Washington,
D.C.; James A. Bruton, Amy R. Davis, WILLIAMS & CONNOLLY, LLP,
Washington, D.C., for Appellant.      Rod J. Rosenstein, United
States Attorney, Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                 2
PER CURIAM:

     This     appeal     raises     the        question       of     whether     Pradeep

Srivastava    (“Srivastava”)        made       the     “substantial          preliminary

showing” under Franks v. Delaware, 438 U.S. 154 (1978), that is

required    for   him    to   be    entitled      to    an     evidentiary      hearing

challenging the integrity of an affidavit submitted to support

the issuance of a search warrant.                 This appeal also raises the

question     of   whether     the    district          court       properly    excluded

testimony of Srivastava as hearsay.

     We    hold   that   Srivastava        did    not     make      the   “substantial

preliminary showing” required by Franks and, therefore, affirm

the district court’s ruling on the Franks issue.                          Furthermore,

we hold that the district court properly excluded Srivastava’s

hearsay testimony.       Finally, we find that any issues Srivastava

raises as to the interpretation and execution of the March 2003

search warrants will not be revisited by this Court as we have

already analyzed these issues in United States v. Srivastava,

540 F.3d 277 (4th Cir. 2008)(“Srivastava I”), cert. denied, 129

S. Ct. 2826 (2009).

                                          I.

     In early 2003, a criminal investigation was initiated by

the Department of Health and Human Services (the “DHHS”), the

Federal     Bureau      of    Investigation            (the        “FBI”),     and   the

                                          3
government's Office of Personnel Management (the “OPM”), into an

alleged        health       care       fraud     scheme       involving          Srivastava,         a

licensed        cardiologist            practicing          with     two        associates           in

Maryland. The federal authorities suspected that Srivastava and

his associates were involved in the submission of false claims

to   various      health       care      benefit      programs,       in       violation        of   18

U.S.C.     §    1347.       As     a    result,       the     authorities         commenced          an

investigation into Srivastava's billing practices.

       On March 20, 2003, Special Agent Jason Marrero (“Marrero”

or   “Agent      Marrero”)         of    the    DHHS    Office       of    Inspector        General

applied to the United States District Court for the District of

Maryland       for     three       search      warrants       for    evidence         of    federal

health    care        fraud.           United    States       Magistrate         Judge      William

Connelly approved the warrants, which covered Srivastava’s two

medical offices and his residence.                          In support of its warrant

application,          the    government         submitted       an    affidavit            by   Agent

Marrero    that        summarized         evidence      obtained          by    the    Office        of

Inspector General, the FBI, and the OPM concerning “allegations

that Srivastava’s medical group . . . submits false claims to

health    care        benefit      programs.”           The    Affidavit         asserted        that

there was probable cause to believe that criminal fraud had been

committed        by     Srivastava’s            medical       group        based      upon       five

categories of “[t]he evidence gathered to date [which] shows

that   Srivastava’s            medical         office    has    defrauded          health        care

                                                  4
benefit programs. . . .”                  The warrants authorized agents to

search for “the following records, including, but not limited

to, financial, business, patient, insurance, and other records

related to the business of Dr. Pradeep Srivastava . . . which

may constitute evidence of violations of [medical fraud].”                          The

warrants proceeded to authorize the seizure of various specific

categories of records, including, “financial records, including

but not limited to accounting records, tax records, accounts

receivable logs and ledgers, banking records, and other records

reflecting the income and expenditures of the business.”

       On March 21, 2003, agents executed the search warrants.                       In

the wake of the searches, the government abandoned its pursuit

of   any      criminal        charges    against      Srivastava      for   health-care

fraud.        Without conceding any wrongdoing, however, Srivastava

did enter into a civil settlement with the government involving

similar allegations.               Based on records seized that indicated

that Srivastava had conducted financial transactions with the

Bank    of    India,      the    government        suspected   that    Srivastava    had

failed       to   file    a     report   on    a    foreign    bank    account.      The

government         then       launched     a       two-year    investigation        into

Srivastava’s tax returns, which uncovered evidence that, in tax

years    1998     and     1999,    Srivastava        had   omitted    certain   capital

gains from personal stock-trading activity from his tax returns.

                                               5
       On October 12, 2005, the government obtained an indictment

from     a    grand        jury     in    the     District          of    Maryland       charging

Srivastava with two counts of attempting to evade taxes and one

count of making false statements on a tax return.

       Before trial, Srivastava moved for an evidentiary hearing

pursuant       to     Franks,       438     U.S.          154,     contending         that    Agent

Marrero’s          affidavit       contained          several        omissions        that      were

intentionally         and     materially          misleading         and     that      had   Agent

Marrero included the material information on the affidavit, the

affidavit          would    not     sufficiently            establish       probable         cause.

Srivastava         also     moved    to     suppress         the    tax-related         documents

seized during the searches on the grounds that they fell outside

the scope of the warrants and that, even assuming they fell

within       the    scope    of    the     warrants,        they     should      be    suppressed

under the “flagrant disregard” doctrine, which mandates blanket

suppression         when    officers       act     with      flagrant       disregard        for    a

warrant’s terms.

       United States District Judge Roger W. Titus held hearings

on Srivastava’s motion to suppress evidence on March 27, 2006

and June 9, 2006.                 At the first hearing, the district court

denied Srivastava’s               motion    for       a    hearing       under   Franks.         The

district court took evidence at the second hearing.

       On August 4, 2006, the district court issued a memorandum

opinion       and    order        suppressing         evidence.            United      States      v.

                                                  6
Srivastava, 444 F. Supp. 2d 385 (D. Md. 2006), reconsideration

denied, 476 F. Supp. 2d 509 (D. Md. 2007).                     The United States

appealed pursuant to 18 U.S.C. § 3731.                  On September 3, 2008,

this   Court    reversed      the    district    court’s      order,   finding   no

Fourth Amendment violation and no grounds to suppress any of the

government’s evidence.         Srivastava I, 540 F.3d 277.

       When   the   case    returned    to    the   district     court   in   2009,

Srivastava moved for reconsideration of the March 2006 order

denying his motion for a Franks hearing.                      The district court

denied the motion.          A jury convicted Srivastava of all three

charged crimes.      In a post-trial motion, Srivastava again sought

a Franks hearing.          The district court denied the motion.                 The

court imposed concurrent sentences of 46 months of imprisonment

on counts one and two and 36 months on count three; three years

supervised     release,     including     a   special   condition      of    release

requiring payment of $16,110,160 in restitution to the IRS; and

a $300 special assessment.           This appeal followed.

                                        II.

                                         A.

       We   first   address    the    district      court’s    refusal   to    grant

Srivastava a Franks hearing.            In Franks, the Supreme Court held

that    Srivastava    may     challenge       affidavits      upon   which    search

warrants are based under the Fourth and Fourteenth Amendments,

                                          7
and that properly challenged warrants may be voided.                            438 U.S.

154.     To entitle a Srivastava to a Franks hearing, he must make

a substantial preliminary showing that a warrant was procured

through false statements intentionally or recklessly made, and

that such statements were necessary for establishing probable

cause.       In    other      words,   in     regards    to    an   alleged   omission,

Srivastava        has    to   make     a    preliminary       showing   (1)   that     the

affiant omitted facts with the intent to make, or in reckless

disregard of whether they thereby made, the affidavit misleading

and    (2)   that       the   affidavit       if    supplemented     by   the    omitted

information would not have been sufficient to support a finding

of probable cause.             Because other pre-trial mechanisms exist to

protect innocent citizens, Srivastava’s burden in establishing

the need for a Franks hearing, based on either false statements

or material omissions, is a heavy one.                         See United States v.

Jeffus, 22 F.3d 554, 558 (4th Cir. 1994)(citing Franks, 438 U.S.

at 171-72).         Srivastava’s showing must be more than conclusory

and    requires     a    “detailed         offer   of   proof,”     United    States    v.

Colkey, 899 F.2d 297, 300 (4th Cir. 1990), and “allegations of

negligence or innocent mistake are insufficient,” Franks, 438

U.S. at 171.

       False      statements         include       information      intentionally       or

recklessly omitted; however, “the affirmative inclusion of false

information in an affidavit is more likely to present a question

                                               8
of impermissible official conduct than a failure to include a

matter that might be construed as exculpatory.”                                Colkey, 899

F.2d at 301-02. Failure to include a matter “potentially opens

officers     to     endless        conjecture       about       investigative         leads,

fragments     of     information,        or       other   matter        that      might,    if

included, have redounded to Srivastava’s benefit.                            The potential

for    endless      rounds    of    Franks        hearings      to     contest      facially

sufficient warrants is readily apparent.”                             Id.      Accordingly,

merely showing an intentional omission of a fact from a warrant

affidavit does not fulfill Franks’ requirements.                             United States

v. Tate, 524 F.3d 449, 455 (4th Cir. 2008).                             “To satisfy the

Franks     intentional       or     reckless        falsity      requirement        for     an

omission, Srivastava must show that facts were omitted “with the

intent to make, or in reckless disregard of whether they thereby

made, the affidavit misleading.”                    Id.        “Stated otherwise, the

omission     must    be   “designed      to       mislead”      or    must   be    made    “in

reckless disregard of whether [it] would mislead.”                           Id.

       In order to show that the omitted material was “necessary

to the finding of probable cause,” id., Srivastava must show

that   the   inclusion       in    the   affidavit        of    the    omitted      material

would defeat probable cause.              Colkey, 899 F.2d at 301.                   Omitted

information that is potentially relevant but not dispositive is

not enough to warrant a Franks hearings.                        Id.     For an omission

to serve as the basis for a hearing under Franks, it must be

                                              9
such that its inclusion in the affidavit would defeat probable

cause.      Id.          Upon     making       this     two-part         preliminary         showing,

Srivastava       is      entitled      to      a   hearing,        at    which     he    bears      the

burden    of     proving        the    allegations           by    a    preponderance          of   the

evidence.        See Franks, 438 U.S. at 156. If a Franks hearing is

appropriate and an affiant’s material perjury or recklessness is

established         by    a   preponderance             of   the       evidence,       the     warrant

“must be voided” and evidence or testimony gathered pursuant to

it must be excluded.                Id.       A warrant that violated Franks is not

subject to the good-faith exception to the exclusionary rule.

United States v. Leon, 468 U.S. 897, 923 (1984).

                                                   B.

     Srivastava             alleges       that        Agent        Marrero        knowingly         and

intentionally,           or     with      reckless       disregard,          omitted         material

information         from      his     affidavit,         and      that    had     the     affidavit

included such omitted information, it would not have supported a

finding     of      probable          cause.       Srivastava            accuses        Marrero      of

mischaracterizing “a harmless discrepancy in diagnostic codes,”

“shad[ing]       and      distort[ing]”            innocuous           evidence    “to       make    it

appear that it reflected nefarious conduct,” and swearing out an

affidavit       that       “was       intentionally            crafted”      to     mislead          the

magistrate       and      contained           “little    if       any”    evidence       that       “was

untainted      by     the     government’s          pervasive           omissions       and     spin.”

However,       we     find      that      a    careful       examination          of     the    facts

                                                   10
demonstrates    that   Agent       Marrero’s      affidavit      did   not   contain

knowing and intentional material omissions.                     Therefore, we find

that the district court properly denied Srivastava’s request for

a Franks hearing.

      Agent Marrero submitted a 19-page affidavit that summarized

evidence   concerning        allegations          that     Srivastava’s      medical

practice submitted false claims to health care benefit programs.

Agent Marrero established probable cause by setting forth five

categories of evidence: (1) billing for services not rendered;

(2)   billing   for    duplicative      services         through     two   different

CareFirst plans; (3) listing inappropriate diagnosis codes on

claims; (4) billing for incidental services, which is charging

for services that are already included in the primary diagnostic

or treatment procedure billed; and (5) altering medical records.

We will discuss Srivastava’s allegations in relation to the five

categories of evidence set forth in the affidavit to establish

probable cause.

           1.      Billing for Services Not Rendered.

      The affidavit outlined evidence that Srivastava was billing

for services not rendered.             To examine Srivastava’s billings,

the   government    hired    Dr.    David    A.    Rawling,      a   consultant   and

practicing cardiologist.             In June 2001, Dr. Rawling reviewed

spreadsheets    that     described       services         and    procedures       that

Srivastava’s    office      billed    for    three       CareFirst     patients   and

                                        11
three       Medicare     patients.            Dr.     Rawling       concluded      (1)   that

Srivastava’s          billing     of     combined            right     and     left      heart

catheterizations          covered        by     Current           Procedural       Technology

(“CPT”) code 93526 appeared to be excessive, because fewer than

ten percent of cases justify procedures that include a right

heart        catheterization       or     combined           left      and     right     heart

catheterizations;         (2)   that     Srivastava           consistently      billed     for

services already included in the primary diagnostic procedure;

and    (3)    that    Srivastava       appeared       to     be    adding    procedures    or

services to bills to maximize reimbursements.

       In     November    2002,    Dr.    Rawling           examined    hospital       patient

records for nine of Srivastava’s Medicare patients, including

records concerning sixteen dates of service in 2000 for which

Srivastava’s office billed Medicare using CPT 93526—the billing

code for a combined right and left heart catheterization.                                  In

fifteen of those sixteen instances, Dr. Rawling found that the

hospital records did not show any right heart catheterization

being performed, nor any change in right heart pressure that

would be associated with a right heart catheterization.                                Billing

for a combined right and left heart catheterization rather than

a     left    heart    catheterization              alone     increased      the     Medicare

payment by $141.85.             Dr. Rawling advised that he detected “a

consistent pattern of over-billing, billing for procedures not

performed, or billing inappropriate codes.”

                                               12
       Dr. Rawling’s observations were corroborated by Dr. Bruce

Lloyd, another cardiologist who reviewed the medical records for

Srivastava’s treatment of a CareFirst member.                      Srivastava billed

CareFirst for a combined right and left heart catheterization,

but Dr. Lloyd concluded that “in each situation, only a left

heart procedure was done.             No right heart study was done, but it

was billed.      This is fraud.”

       At the hearing on Srivastava’s initial motion for a Franks

hearing and on appeal, Srivastava claims that in this section,

Agent Marrero omitted information so as to make the evidence

appear more suspicious than it actually was.                       Srivastava claims

that Agent Marrero’s affidavit omitted information that in some

cases where Srivastava’s office billed for right and left heart

catheterizations, Srivastava had actually performed a left heart

catheterization       and     had   “inserted       a    venous     sheath      into    the

patient’s right heart.” Srivastava claims that Marrero failed to

tell the magistrate judge that Srivastava actually lost money by

billing   for    a    combined      right    and    left    heart      catheterization

rather    than    for     two    separate        procedures       of    a   left      heart

catheterization and right heart venous sheath. Srivastava argues

that while “it was arguably incorrect to bill for the combined

procedure   as    a     right   and    left      heart   catheterization,”            Agent

Marrero still should have included information in his affidavit

that   Srivastava       had   performed      a   right     venous      sheath    in    some

                                            13
cases. Srivastava argues that “if Agent Marrero had disclosed to

the magistrate that the alleged miscoding identified in this

section     of      the      affidavit         often     redounded          to    Srivastava’s

financial      detriment,         instead        of    his    benefit,       the       magistrate

would presumably have determined that the allegations in this

section did not support the conclusion that Dr. Srivastava was

engaging      in    health       care    fraud.”         Srivastava’s            allegation     is

based on entries in Dr. Rawling’s notes concerning his review of

Srivastava’s           claims      for     combined           right     and        left       heart

catheterization.             In two instances, Dr. Rawling wrote “no RHC

(right heart catheterization), just venous access.”                                In a third,

he   wrote:      “no     RHC.    Cath    lab     procedure      report        only     indicates

venous     sheath        placed.”          In     other       instances,          he    reviewed

laboratory         records      and     simply    wrote       that    “no     RHC”      had   been

performed.

      At    the      district          court     hearing,      Srivastava          offered      no

evidence that Agent Marrero knew Srivastava had placed a “venous

sheath”    in       or    near    the     right       heart    or     knew,      believed,      or

deliberately         omitted          information       that     such       an     action      was

medically equivalent to performing a right heart catheterization

or could be billed as such.                       As a result the district court

rejected Srivastava’s argument.

      We   agree         with    the    district       court    that     while         Srivastava

claims that Agent Marrero should have disclosed that Srivastava

                                                 14
could have billed separately for the venous sheath procedure and

that had he done so he would have actually billed more for the

procedure, the record is devoid of any evidence (1) that Marrero

knew that Srivastava had conducted any venous sheath procedures,

(2) that he was aware that Srivastava could have billed more for

a left heart catheterization and a right venous sheath than for

a combined right and left heart catheterization, or (3) that he

intentionally omitted such information from his affidavit.

       Srivastava points to Dr. Rawlings notes and Dr. Rawling’s

memorandum     summarizing         his     findings   as    evidence    that   Agent

Marrero knew that Srivastava conducted venous sheath insertions

for which he did not bill.                However, a review of Dr. Rawling’s

notes and memorandum indicates that Agent Marrero could not have

inferred from Dr. Rawlings findings that Srivastava performed a

venous sheath, which could have been billed for separately, and

that    billing      for     a    right     and    left    heart    catheterization

together, while erroneous, actually resulted in a lower amount

paid    to    Srivastava.            Additionally,         Dr.     Rawling’s   notes

indicating that a venous sheath was performed in some of the

instances     does     not       explain     the   remaining       instances   where

Srivastava billed for a right and left heart catheterization and

did not perform a right catheterization or a venous sheath. The

district     court   correctly       concluded      that   Srivastava    failed   to

make a preliminary showing that Agent Marrero omitted facts with

                                            15
the intent to make, or in reckless disregard of whether they

thereby    made,    the   affidavit   misleading    with   respect       to   this

section on Billing for Services Not Rendered.                 The information

that Agent Marrero included in his affidavit accurately depicted

the overall findings of Dr. Rawling’s as to Srivastava’s billing

for services that he did not render.

             2.     Billing for Duplicate Services.

     The     affidavit     also   outlined     evidence    that        Srivastava

submitted duplicate bills for the same services to two different

CareFirst entities. As background, Agent Marrero described how,

in   May    1997,     BlueCross   BlueShield       National     Capital       Area

(“BCBSNCA”) placed Srivastava on “pre-payment review” because of

concern about possibly fraudulent or inappropriate benefits, and

required Srivastava to submit supporting medical documentation

for it to examine prior to deciding whether to pay or reject

Srivastava’s claims.

     The    affidavit     described   that    in   the   case   of     CareFirst

subscriber G.B., Srivastava submitted claims to BCBSNCA, dated

February 26, 1999, for eight procedures or services allegedly

performed on January 14, 1999.             Payment for five of the eight

procedures was rejected for lack of documentation.                   Srivastava

then submitted claims dated December 8, 1999 to Blue Cross Blue

Shield     Maryland   (“BCBSM”)   for      seven   procedures     or    services

                                      16
performed on January 14, 1999.            All seven procedures or services

had been part of the previously billed February 26, 1999 claims.

      In the case of subscriber S.B., Srivastava submitted claims

to   BCBSNCA   and    BCBSM,    respectively,      on    August    20,   1998   and

November    23,      1999,   which      both    billed     for    six    identical

procedures or services that were allegedly provided on August

18, 1998.

      In the case of patient, A.F., Srivastava submitted claims

to BCBSNCA and BCBSM, respectively, dated March 3, 1999, and

December 7, 1999, for four identical procedures or services that

were allegedly provided on March 2, 1999.

      At the March 27, 2006 hearing, Srivastava barely challenged

this section of the affidavit.                 Srivastava suggested innocent

explanations for sending the same bill to two separate CareFirst

entities and contended that the affidavit should have included

exculpatory information that a longtime employee of his medical

office had told investigators that she was not aware of any

billing fraud.

      The   district    court    made    short    shrift    of    this   argument,

pointing out that Franks and this Court’s Franks cases did not

require that every conceivable thing that is said by a person

being interviewed must find its way into the affidavit if it’s

exculpatory in nature.         See Colkley, 899 F.2d at 301.

                                         17
       On Appeal, Srivastava claims that the heading, “Billing for

Duplicate    Services,”          is    misleading.             Srivastava          claims      that

Agent     Marrero       described       Srivastava’s           resubmission         of    denied

claims     from     CareFirst’s         National         Capital      Area      plan     to    its

Maryland    counterpart          and    implied—via        the     section       heading—that

the     resubmission       was     duplicative           and     therefore         fraudulent.

Srivastava argues that this implication was misleading because

Dr. Srivastava did not attempt to be paid twice for the same

procedures        but    instead       merely         resubmitted       denied        claims    in

accordance with CareFirst’s written procedures.

       We find that the district court properly concluded that

Srivastava    failed       to     make      a     preliminary         showing      that       Agent

Marrero    omitted       “with        the       intent    to    make,      or    in    reckless

disregard     of        whether        they       thereby       made,        the       affidavit

misleading”       with    respect          to    this    section      of     the      affidavit.

Srivastava has failed to make a preliminary showing that the

omission    was     “designed         to    mislead”      or    was    made     “in      reckless

disregard of whether [it] would mislead.”                              Tate, 524 F.3d at

455.     Rather, in this section of the affidavit, Agent Marrero

recounts the exact facts of how Srivastava billed two separate

providers for the same service.                         While Srivastava argues that

the heading is misleading, when we read the entire affidavit,

including a summary of the headings which says “(2) billing for

duplicate services through two different CareFirst plans,” we

                                                 18
find   that     the       district    court        was    correct          in    finding       that

Srivastava has failed to make a preliminary showing that Agent

Marrero      intended       to     mislead     the       Magistrate          Judge       in    this

section.

              3.      Listing Inappropriate Codes on Claims.

       The affidavit outlined evidence obtained when the FBI sent

three male undercover agents, using fictitious names, to receive

treatment at Srivastava’s medical practice.                               Before each agent

went   to     Srivastava’s         office,    Dr.        Lloyd,       a    cardiologist         and

consultant, checked his blood pressure, checked his height and

weight, and performed an electrocardiogram.                               In each case, Dr.

Lloyd advised the agent that the blood pressure, weight, and EKG

results were normal.              After each agent visited Srivastava, Dr.

Rawling      reviewed      the     claim     forms       and     the      agents’     summaries

describing visits to Dr. Lloyd and to Srivastava’s practice,

including      information         about    the     date       they       were    seen    by    the

doctors, what services they recalled receiving and by whom, and

what if any complaints were noted.

       The     affidavit         recited     that        after     the       agents       visited

Srivastava’s         practice,        the     office           submitted          claim       forms

containing diagnostic codes for Agent Flores (hypertensive heart

disorder;      tachycardia,          unspecified;         secondary             cardiomyopathy,

unspecified;        and    other     and    unspecified          hyperlipidemia);             Agent

Yerdon       (two   diagnostic        codes,       including           hypertensive           heart

                                              19
disorder); and Agent Striebich (two diagnostic codes, including

other and unspecified hyperlipidemia).                Dr. Rawling reviewed the

available records; the claim forms and the agents’ summaries

describing visits to Dr. Lloyd and to Srivastava’s practice.

Based on this information, Dr. Rawling found no basis for the

diagnoses indicated by the billing codes used by Srivastava’s

medical practice.

       At the 2006 hearing, Srivastava contended that three active

FBI agents were not considered to be normal in any time frame

that was remotely the same as when they were being seen by

Srivastava.       This contention was based on brief passages in two

FBI form 302 memoranda relating to the agents’ visits with Dr.

Lloyd.      The memoranda indicated that Dr. Lloyd had found EKG

results, weight and blood pressure to be in the normal range and

had    so       advised     Agent        Flores,     Yerdon,     and      Striebich,

respectively.       But one memorandum indicated that after Dr. Lloyd

told   Agent     Flores     that    his   condition    was     normal,    the   agent

received    a    form     listing    services      provided    which    contained   a

diagnostic       description        of    “401.1:L    Essential        hypertension,

benign.”     A second memorandum indicated that documents given to

Agent Yerdon contained the same language.                      No such reference

appeared in the memorandum for Agent Striebich.                        The memoranda

did not indicate that Dr. Lloyd told any agent that he suffered

from   hypertension,        and    Srivastava      presented    no   evidence    that

                                           20
either Dr. Rawling or Agent Marrero was told anything about the

phrase “401.1: Essential hypertension, benign.”                      Nevertheless,

Srivastava       claims    these     brief   references     to     hypertension   on

billing    forms     demand      a   conclusion      that   Agent    Marrero   made

knowing false representations about the agents’ condition.

     The district court rejected this argument.                     The memorandum

for Agent Yerdon listed a blood pressure of 114/74, and the

district     judge      observed     that    hypertension     is    not   diagnosed

“until     you    get     to   140/90   or       more.”     The    district    court

speculated that “maybe this is a case of bad codes, but maybe

Dr. Lloyd simply coded the visit as being an evaluation of that

possible condition.”           The district court later ruled:

     Now, much is made by the defense of the fact that at
     the end of the agent’s report of his visit to see Dr.
     Lloyd, a diagnosis description was put down “essential
     hypertension   benign,”    and   it    indicates  that
     notwithstanding everything the agent was told in
     English, that this coding on a billing sheet indicates
     that these agents, or at least two of these three
     agents, had “essential hypertension benign.”

     My understanding of what “essential hypertension
     benign” means is that the cause of the hypertension is
     not known, but there is hypertension. I have no idea
     why Dr. Lloyd would have put that on his billing
     records. It may be more of the extraordinary world we
     live in with medical records that code has to be put
     down for something. And if a person comes in to see a
     physician and the physician puts down something is
     wrong, that they won’t get compensated, so they have
     to put down what the suspected diagnosis is . . . . I
     don’t see anything here that indicates to me that
     these agents reported to Agent Marrero that they had
     “Essential hypertension benign.” They simply gave him
     what the records said of the diagnosis code.

                                            21
      I would assume from the context of these, that if
      these agents really did have blood pressure readings
      taken that were within normal range, that they were in
      fact told they were normal.         So that from the
      perspective of Agent Marrero, who’s trying to portray
      accurately for Magistrate Connelly the circumstances
      of these three agents, it is that these are three
      agents who saw a cardiologist at Georgetown University
      Hospital; and all three were told they were normal,
      and they then decided to test what would happen when
      they went to see Srivastava’s medical practice.

      So I don’t find anything . . . that comes close to
      meeting the Franks standard on the basis of the
      statement allegedly made with reckless disregard of
      the truth here. The highest level I could get this to
      would be negligent.   And even there, if he put down,
      by the way the, diagnosis code when I left on a sheet
      of paper was “essential hypertension benign,” I don’t
      know that even if that had been intentionally and
      recklessly made that that would gut this affidavit of
      sufficient information to negate a finding by the
      magistrate of probable cause.

Joint Appendix at 602-04.

      On   Appeal,    Srivastava   claims     Agent   Marrero      intentionally

misled     the   magistrate    about   the    results       of   the    undercover

investigation in the way that he described the results of the

investigation.       Srivastava argues that “the government undertook

its   undercover      investigation     for    the    specific         purpose   of

catching Dr. Srivastava in the act of committing health-care

fraud. . . . However, when it became clear that Dr. Srivastava

had not committed fraud because he had performed and billed for

altogether       appropriate   procedures     for     the    three      undercover

agents, the government went to elaborate lengths to generate

                                       22
evidence suggestive of wrongdoing.”                           First, Srivastava claims

that agent Marrero entirely excluded from the affidavit the most

relevant results of the undercover investigation: “namely, that

the   investigation           produced      no    direct      evidence         of    health-care

fraud, because Dr. Srivastava billed only for procedures that he

appropriately       performed         on    the       undercover      agents.”           Second,

Srivastava      claims        that    Agent      Marrero       “drew      the       magistrate’s

attention     to    the        discrepancy        in     diagnostic        coded       that    Dr.

Rawling       eventually             identified           without          explaining          the

significance       of     the     diagnosis           codes    or    revealing        that     Dr.

Rawling was not provided with the medical records that would

have allowed him to determine if there was a basis for the

diagnosis or not.”             According to Srivastava, “the overall effect

of    Agent     Marrero’s            statements          concerning         the       undercover

investigation,          then,    was       to    leave     the      magistrate        with     the

impression that the investigation had succeeded when it had in

reality completely failed.”

      We    find        that     Srivastava’s            attack      on     the       undercover

investigation section of the affidavit presented nothing that

comes   close      to    meeting      the       Franks    standard        on    the    basis    of

statement or omissions allegedly made with reckless disregard of

the truth.         In his affidavit, Agent Marrero described how Dr.

Lloyd   checked         the    undercover        agents’      blood       pressure,      checked

their height and weight, performed an EKG, and advised them that

                                                 23
the results were normal.                      When the agents visited Srivastava’s

practice, the office submitted claim forms containing ominous

diagnostic codes for Agent Flores (hypertensive heart disorder;

tachycardia, unspecified; secondary cardiomyopathy, unspecified;

and    other   and        unspecified          hyperlipidemia),         Agent    Yerdon       (two

diagnosis      codes,       including          hypertensive         heart     disorder),      and

Agent    Striebich         (two        diagnostic       codes,      including       other     and

unspecified hyperlipidemia).                    Dr. Rawling reviewed the available

records—the       claim      forms       and     the    agents’       summaries     describing

visits to Dr. Lloyd and to Srivastava’s practice.                               Based on this

information,         Dr.    Rawling           found    no     basis    for    the    diagnoses

indicated      by    the     billing          codes    used    by     Srivastava’s      medical

practice.           This    is        exactly    what       happened    according       to    the

record,     and          Agent        Marrero        accurately       described        for    the

Magistrate Judge the results of the investigation.

       Srivastava         claims       that     Agent    Marrero       “excluded”      evidence

that    “Dr.    Srivastava              billed       only     for     procedures       that    he

appropriately        performed          on     the    undercover       agents.”        However,

Srivastava          is     making         a     conclusory          statement       that      Dr.

Srivastava’s        procedures          were     appropriate.           All    Agent    Marrero

knew when he wrote the affidavit was that Srivastava billed for

a variety of diagnostic codes that were inconsistent with Dr.

Lloyd’s     diagnoses            of     three     healthy       FBI     agents.         Second,

Srivastava claims that Agent Marrero excluded information that

                                                 24
Dr. Rawlings made his opinion without being provided with the

medical    records      that    would     have    allowed        him    to    determine     if

there was a basis for the diagnoses or not.                       However, given that

the   affidavit        was   submitted      in    support        of    applications         for

search warrants to obtain Srivastava’s medical records, Agent

Marrero hardly concealed the fact that Dr. Rawling had not been

provided     with      Srivastava’s       medical        records.            Therefore,      we

affirm the district court’s finding that nothing Agent Marrero

included or failed to include in his affidavit comes close to

meeting     the       Franks     standard        for     statements          or    omissions

“designed to mislead” or made “in reckless disregard of whether

[it] would mislead.”            Tate, 524 F.3d at 455.

            4.        Billing for Incidental Services.

      The affidavit also contained evidence of a form of double-

billing.          Agent      Marrero      explained         that       descriptions          of

procedures as defined by the CPT Code Book included all services

necessary    to       accomplish    the     primary       diagnostic          or   treatment

procedure, even if an independent CPT code covers the specific

service.      For      the     relevant    time        period,    the    CPT       Code   Book

definition       of    cardiac     catheterization          included,          among      other

things,    the     introduction,        positioning,         and       repositioning         of

catheters.

      In the case of patient A.B., however, Srivastava’s office

submitted one claim to Medicare for a combined right and left

                                            25
catheterization (CPT 93526) on March 8, 2000, and also billed

for   ten   other   procedures,     including      the    introduction       of    the

catheter into the aorta (CPT 36200).                Introducing the catheter

into the aorta is an included service in the primary diagnostic

procedure     CPT   code   93526.    The    same    form     of    double-billing

occurred with respect to service provided to patient J.W. on

July 20, 1999, and patient L.S. on September 14, 2000.

      In response to the results in these cases, Agent Marrero

recited that E.S., a former employee of Srivastava’s, told an

FBI agent that Srivastava used multiple billing codes and billed

for duplicative services, such as an electrocardiogram and its

interpretation.        E.S. reported that she had worked for another

doctor who only billed one code for an EKG.

      Srivastava’s      primary    criticism       of    this     section    of    the

affidavit    was    that   Agent    Marrero   should      not     have    relied   on

information     from    E.S.   because      her     former      employer     was    a

gynecologist, not a cardiologist.             Srivastava also claimed that

Agent   Marrero’s      affidavit    mischaracterized        E.S.’s       statements,

when in fact the affidavit closely tracked the interview memo.

The district court found no problem with this portion of the

affidavit, and Srivastava abandoned this issue in his motion for

reconsideration and in his post-trial motion.

      On appeal, Srivastava does not allege that Agent Marrero

made any misleading statements or omissions in regard to this

                                       26
section. Therefore, we adopt the district court’s finding that

the     Affidavit        did     not        contain       intentional,       material          false

statements or omissions relating to billing for services not

rendered.

              5.     Altering Medical Records.

      Finally,       the        affidavit          contained        evidence        of     altered

medical      records.            For        example,       Srivastava’s        office       billed

CareFirst        twice     for        six     laboratory          procedures      or      services

provided to patient S.H.                     The dates of service were allegedly

November     2     and   3,     1998,        but   the     affidavit       stated      that    “the

documentation        provided          for    the       November     3rd   date     of     service

appears to be altered because a ‘3’ is handwritten over where

the typewritten ‘2’ appears to be in the date ‘11/02/1998.’”                                     In

the case of patient O.B., Srivastava’s office billed CareFirst

for   four    procedures         (CPT        93307,       03320,    and    93325)        allegedly

provided on November 24, 1997, and for six procedures (including

the same three CPT codes) allegedly provided on November 26,

1997.        The    office       submitted          two    EKG     reports     as      supporting

documentation        for       both     alleged           dates    of     service,       but    the

affidavit        stated        that     “the       documentation          provided       for     the

November 24th date of service appears to be altered because a

‘4’ is handwritten over where the typewritten ‘6’ appears to be

in    the    date    ‘11/26/1997,”             The      two   Echocardiography            Reports

                                                   27
appear to be identical with the exception of the handwritten

‘4.’”

       At the 2006 hearing, Srivastava did not contend that this

section of the affidavit was false.             Instead, Srivastava claimed

that    Agent   Marrero   failed    to    include   exculpatory      information

provided by Srivastava’s longtime billing manager, who denied

any    improprieties.      The     billing     manager    insisted     that    “Dr.

Srivastava had never asked [her] to do anything improper about

the billing,” and expressed the view that the alterations were

“mistakes and corrections.”              Srivastava also claimed that at

least one set of documentation revealed that Dr. Srivastava had

in fact performed two different tests that yielded different

results.     Srivastava claimed that these omissions were intended

to mislead the magistrate into viewing these altered records as

attempts at double billing for the same procedure.

       The district court found that the affidavit was accurate

because the records were altered and found that this section of

the     affidavit   was    included       to    show     alteration,     not    to

demonstrate double-billing.           The court did not find anything

that is misleading or comes close to the reckless disregard for

the truth standard under Franks with regard to the reference to

the altered medical records.             The district court found that it

certainly appeared that these records were altered.

                                         28
         In his motion for reconsideration, Srivastava claimed that

Agent      Marrero       had    an       obligation       to     disclose     exculpatory

assertions by the billing manager.                       Srivastava further claimed

that     the    November       3,    1998    results      were       different     from    the

November 2, 1998 results, proving that two sets of tests had

been     performed.         Because       this     evidence      did    not    negate      the

essential point made by this section of the affidavit—that the

dates on records had been altered, providing additional evidence

that     the    medical    practice         was    engaged      in    fraud—the    district

court denied the motion.

         On appeal, Srivastava acknowledges that this section of the

affidavit accurately recites that his office billed CareFirst

twice     for     procedures        or   services       for    patients    S.H.    (alleged

dates of service November 2 and 3, 1998) and O.B. (alleged dates

of service November 24 and 26, 1997), and that in each instance,

the second claim contained a handwritten alteration of the date

on a medical record. The affidavit included these two paragraphs

as   a    fifth    and    final      category      of   evidence       that   Srivastava’s

medical office was engaged in fraud.                      However, Srivastava argues

that Marrero implied that the changes had been made so as to

permit submission of two claims for only one set of underlying

services, and then argues that Marrero intentionally omitted,

with the intent to mislead, records indicating that two sets of

procedures        were    conducted       with     respect      to    S.H.,   as    well    as

                                              29
exculpatory       information         provided        by      Srivastava’s          longtime

billing assistant.         Srivastava argues that without those pieces

of omitted information the Affidavit leaves a reviewing judge

with    the    misleading          impression       that      the     alterations      were

suspicious.

       We find that, with respect to this part of the affidavit,

Srivastava     failed     to       make    a    preliminary       showing      that    Agent

Marrero    omitted      information         “with   the    intent       to   make,    or   in

reckless disregard of whether they thereby made, the affidavit

misleading.”      Stated otherwise, Srivastava has failed to make a

preliminary showing that the omission was “designed to mislead”

or   was   made    “in    reckless         disregard       of    whether      [it]    would

mislead.”       Rather,       in    this       section   of     the    affidavit,      Agent

Marrero accurately recounts the facts of how Srivastava’s office

altered medical records by changing the dates on the records.

Srivastava claims that this section is misleading because it

implies       double-billing          without        providing          an     exculpatory

statement by Srivastava’s employee and without providing records

that, in fact, two procedures were performed on patient S.H.

However,      nothing    in    the        affidavit      states       that    the    altered

medical records are evidence of double-billing.                              Additionally,

this Court’s rulings in Colkley and Jeffus make clear that not

all information which might constitute Brady material at a later

                                               30
stage of the criminal process needs to be included in a search

warrant affidavit.

     Therefore, after reviewing all sections of Agent Marrero’s

affidavit, we find that the district court properly denied a

Franks   hearing.     As   explained    in   detail    above,     the    district

court correctly found Srivastava failed to make a preliminary

showing that there were false statements or omissions in the

affidavit that were made by Agent Marrero with the intent to

mislead the magistrate.       Additionally, even if we were to find

some of the various omissions mentioned above to have been made

intentionally    or   in   reckless     disregard     for   the    truth,      the

excision of one or even two of them under the circumstances of

this case would not undermine the finding of probable cause from

this affidavit, considered as a whole.

                                  III.

     The District Court initially granted Srivastava suppression

of the evidence seized pursuant to the search warrants on the

ground that the officers acted with “flagrant disregard” for the

terms of the warrants in executing them.               On the government’s

earlier interlocutory appeal, however, a panel of this Court

reversed   the   district     court’s      decision,    holding         that   the

“flagrant disregard” doctrine was inapplicable.                 Srivastava I,

540 F.3d 277. Srivastava again raises this issue in this appeal;

                                      31
however, under the law-of-the-case doctrine, we are foreclosed

from revisiting the earlier panel’s holding. See United States

v.   Aramony,     166      F.3d    655,    661    (4th    Cir.    1999)(rulings        that

constitutes law of the case “should continue to govern the same

issues in subsequent stages in the same case”).

                                            IV.

       Lastly,       we     address       Srivastava’s         contention    that      the

district      court        improperly       excluded       Srivastava’s         proffered

testimony as to the issue of intent in the tax evasion case.                             As

part of the tax evasion case presented at trial, the Government

had to show that Srivastava acted willfully when he allegedly

failed to disclose certain capital gains on his tax returns.                            As

part    of    proving       that   willfulness,          the    Government      presented

evidence      that        Srivastava      made    multiple       transfers      to    bank

accounts in India.            Specifically, on July 16 and 21, 1999, with

his broker Sohan Aggarwal’s assistance, Srivastava sent outgoing

wire transfers of $440,000 and $465,000 from Bentley-Lawrence

accounts for deposit in his accounts in India.                       In December 1999

and January 2000, Srivastava sent four wire transfers from the

U.S. to India.

       In    regard   to     the   evidence       of   wired     transfers   to      India,

Srivastava       wished      to    introduce       testimony       from   his     broker,

Aggarwal, that Srivastava told him “during the period of the

                                             32
rising market in 1998 and 1999” that he “went to India and then

he said, hey, guys, look, why—I have decided to build a charity

hospital.     Okay, fine.          Where is the money?           Well, you tell me

when you want to send the money, I’ll send the money.”                             Joint

Appendix 1961.        Srivastava wished to introduce this testimony to

controvert      the      Government’s       argument      that        Srivastava     was

transferring money to India to purposefully evade taxes.

     The district court excluded this testimony because it found

that it was hearsay not subject to an exception.                            Srivastava

argues   that     the    district        court   erred   by     not    applying    Rule

803(3), a hearsay exception, in order to allow the testimony.

     We review decisions to admit or exclude evidence for abuse

of discretion.          United States v. Forrest, 429 F.3d 73, 79 (4th

Cir. 2005).        Under that standard, we may not substitute our

judgment    for    that       of   the    district     court;    rather,     we     must

determine whether the district court’s exercise of discretion,

considering     the     law    and   facts,      was   arbitrary      or   capricious.

United States v. Mason, 52 F.3d 1286, 1289 (4th Cir. 1995).

Whether reviewed only for abuse of discretion or de novo, any

error in the admission or exclusion of evidence is subject to

the harmless error test.             See Delaware v. Van Arsdall, 475 U.S.

673, 680-84 (1983).

     Rule 803(3) provides an exception for hearsay statements

when the statement represents “a statement of the declarant’s

                                           33
then existing state of mind, emotion, sensation, or physical

condition (such as intent, plan, motive, design, mental feeling,

pain and bodily health).”              Fed. R. Evid. 803(3).            The threshold

requirements for invoking this hearsay exception are that (1)

the   statement       must    be     contemporaneous     with    the    mental    state

sought      to   be    proven;        (2)    there     must     be     no   suspicious

circumstances suggesting a motive for the declarant to fabricate

or misrepresent his or her thoughts; and (3) the declarant’s

state of mind must be relevant to an issue in the case.                          United

States v. Neely, 980 F.2d 1074, 1083 (7th Cir. 1992); United

States v. Faust, 850 F.2d 575, 585 (9th Cir. 1988).                              On the

question of relevance, “the declarant’s statement of mind must

be relevant to some issue in the case before such testimony can

be admitted under Rule 803(3).”                  United States v. Veltmann, 6

F.3d 1483 (11th Cir. 1993).                 “Where state of mind itself is in

issue [as intent was in this case], the court must determine if

the declarant’s state of mind at the time of the declaration is

relevant to the declarant’s state of mind at the time at issue.”

United States v. Ponticelli, 622 F.2d 985, 991 (9th Cir. 1980)

(emphasis added).

      The    district        court    excluded   the    proffered       testimony    on

three    grounds:      (1)     failure      to   satisfy      the    requirement     of

contemporaneousness, because Srivastava’s statement to Aggarwal

preceded the largest transfers to India and the filing of the

                                            34
1998 tax return by months and preceded the filing of the 1999

and 2000 tax returns by years; (2) irrelevance of the evidence

to the intent issues in a tax evasion case; and (3) pursuant to

the balancing test of Rule 403.

     We find that district court properly concluded that the

statement was irrelevant to the core issue in the case—whether

Srivastava     willfully     evaded    income      taxes   on    $40    million    of

capital gains.        As stated by the United States in its brief

“[t]he intended end use of the $5 million in untaxed income once

it   reached     India,     however,    had   no    bearing      on    Srivastava’s

specific intent to commit tax crimes.               A person who is required

by law to accurately declare his income and pay taxes cannot

evade that requirement by promising to use the fruits of tax

evasion   for    a   good    cause.      It   made    no     difference     whether

Srivastava transmitted funds to India with the intent to open a

hospital, build a vacation home, or finance a software company.

Srivastava’s claim that his stated intent to build a hospital

‘rebutted      the   government’s      contention     that      the    purpose    was

instead to hide the transferred funds from the IRS’ is simply

without merit.”       Because we find the statements to be irrelevant

to the intent issue in the tax evasion case, the testimony does

not meet the requirements for a hearsay exception under Rule

803(3).     Therefore, we affirm the district court’s exclusion of

this testimony.

                                        35
                               V.

     For the foregoing reasons, we affirm the district court’s

denial to conduct a Franks hearing; refuse to reconsider any

arguments about the previously appealed motion to suppress under

the law-of-the-case doctrine; and affirm the district court’s

exclusion of proffered hearsay testimony.

                                                        AFFIRMED

                               36