Court Opinion

ID: 2962371
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:56:57.589043+00
Date Added: 2024-06-11T11:21:29.644282
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 93-1832                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  KEVIN F. O'BRIEN,                                Defendant, Appellant.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS               [Hon. Richard L. Williams,* Senior U.S. District Judge]                                           __________________________                              _________________________                                        Before                        Selya, Cyr and Boudin, Circuit Judges.                                               ______________                              _________________________               Alan Chapman, with whom Chapman  & Chapman was on brief, for               ____________            __________________          appellant.               Timothy  Q. Feeley, Assistant  United States  Attorney, with               __________________          whom A. John  Pappalardo, United States  Attorney, was on  brief,               ___________________          for the United States.                              _________________________                                   February 7, 1994                              _________________________          _________________________          *Of the Eastern District of Virginia, sitting by designation.                    SELYA,  Circuit  Judge.   A  jury  convicted defendant-                    SELYA,  Circuit  Judge.                            ______________          appellant Kevin  F.  O'Brien  on  two hundred  ninety  counts  of          making, or  causing  to  be made,  false  statements  related  to          applications for Medicare benefits, and one hundred thirty counts          of converting  federal funds to  his own behoof.1   After combing          the record, we uphold the verdict.          I. BACKGROUND          I. BACKGROUND                    We  examine the relevant events as a whole, marshalling          the  evidence in  the light most  congenial to  the prosecution's          theory of the  case.  See United  States v. Ortiz, 966  F.2d 707,                                ___ ______________    _____          711 (1st Cir. 1992), cert. denied, 113 S. Ct. 1005 (1993); United                               _____ ______                          ______          States v. Maraj, 947 F.2d 520, 522 (1st Cir. 1991).          ______    _____                    Appellant  was the  president  and sole  shareholder of          O'Brien  Ambulance,  Inc.  and  its  lineal  descendant,  O'Brien          Ambulance,  Ltd.2   As president  of  the corporation,  appellant          served  as its chief  executive and principal  operating officer.                                        ____________________               1The  statutes of  conviction can be  succinctly summarized.          One such statute, now repealed and replaced, at the time provided          in  pertinent part  that any  Medicare vendor who  "knowingly and          willfully  makes or  causes to  be  made any  false statement  or          representation  of  a material  fact in  any application  for any          benefit  or payment [under the Medicare program]" thereby commits          a  felony.   42 U.S.C.     1395nn (1987)  (repealed).   A  second          statute, still in  force, provides in pertinent part that whoever          "knowingly  converts to his own  use or the use of  another . . .          any voucher, money, or thing of value of the United States  or of          any department  or agency  thereof" is guilty  of a  felony.   18          U.S.C.    641 (1988).  The indictment with which we are concerned          invokes these statutes and also charges appellant as an aider and          abettor, see 18 U.S.C.   2 (1988).                   ___               2Notwithstanding  the  shifting   nomenclature,  the  entity          remained  the  same.     Consequently,  we  refer  to  the  firm,          regardless  of which appellation claimed preeminence at any given          time, as "the corporation."                                          2          He,  and he  alone, possessed  authority to  sign company  checks          during  the period covered by the  instant indictment, i.e., from                                                                 ____          March  to August  of 1987.   During  that period,  appellant also          acted as the corporation's sole director.                    The corporation ran  a licensed ambulance service.   It          regularly  billed Medicare  for  ambulance services  provided  to          Medicare  recipients, with the  result that the  federal Medicare          program  accounted  for  a   significant  portion  of   corporate          revenues.   Many  of the  corporation's  payment requests  sought          reimbursement for  the transportation  of Medicare  recipients to          and from approved kidney dialysis treatments.  During  the period          covered by the  indictment, the corporation, in order to maximize          the  remuneration   associated  with  such   services,  regularly          represented various  Medicare recipients  as  bedridden when,  in          fact, they  were ambulatory;  and it  also regularly  represented          trips   for  dialysis  treatments  to  have  been  undertaken  by          ambulance when, in fact, the patients had been transported by van          or   wheelchair  car.3    Corporate  records  were  falsified  to          camouflage  these untruths.   Subsequent  investigation uncovered          the   scheme,  revealing   that,   in  numerous   instances,  the          corporation's billing  practices  bore  little  relation  to  the          reality  of  events,  and  that the  corporation  had  bilked the                                        ____________________               3Carriage  by  ambulance   costs  substantially  more   than          carriage  by van  or wheelchair  car.   Thus, the  Medicare rules          restricted   reimbursable  ambulance   transportation  to   cases          involving approved treatments  for non-ambulatory patients,  and,          even then, only if no  alternate means of transportation could be          employed without endangering the patient's condition.                                          3          government out of well over $300,000.                    Based on this, and other, evidence   including evidence          that,  in late  1986 and  early  1987, the  corporation had  been          teetering  on the  brink of  insolvency    a  federal grand  jury          returned  an indictment against  appellant.4   Evidence presented          at trial showed  that, during the  six-month period in  question,          the   corporation  routinely   transported  ambulatory   dialysis          patients  in vans  or wheelchair  cars  (often as  a group),  but          nonetheless  misrepresented  these   services  in  applying   for          Medicare  stipends, saying  that they  related to  individualized          transportation of non-ambulatory patients via ambulance.                    Anticipating appellant's eventual line  of defense, the          government presented  both live testimony  and corporate  records          (in  the  form, inter  alia,  of  run  slips, run  logbooks,  and                          _____  ____          documents related to Medicare  benefit applications) illustrating          the  pervasiveness of  the  criminal  conduct.    The  government          showed, through  the testimony  of corporate  employees (some  of          whom  were  appellant's kith  and  kin), that  appellant,  in his          management  role, exercised substantial  control over the day-to-          day  operations of the corporation; that,  on occasion, he filled          in  for the dispatcher and assumed other "line" responsibilities;          and that, in late 1986, the corporation altered its recordkeeping          practices in  two significant respects,  the net effect  of which          was to make  detection of the  forthcoming fraud more  difficult.                                        ____________________               4The indictment was later superseded.   The final version of          the indictment contained some 435 counts.                                          4          Finally,  the  prosecution  presented   an  expert  witness   who          identified appellant's  handwriting in connection  with ambulance          logbook entries, some  of which involved the  Medicare recipients          at issue.                    As the prosecution had anticipated, appellant   offered          little  contradiction  to  charges  that  the  corporation   made          fraudulent  representations in seeking Medicare payments and that          it  unlawfully  converted  federal  funds.    Instead,  appellant          pitched his  defense on a relatively narrow  ground, denying that          he, himself,  knew of,  or could  be held  criminally accountable          for, the corporation's peccadilloes.                    At  the  close  of the  evidence,  appellant  moved for          judgment of acquittal,  Fed. R. Crim. P. 29,  principally on this          ground.   The  district  court  rejected the  motion.   The  jury          convicted  appellant on  four hundred  twenty  counts (the  other          fifteen  counts in the superseding indictment having been dropped          before trial).  This proceeding followed.          II.  THE MERITS          II.  THE MERITS                    This is a rifle-shot appeal.  Appellant advances only a          single  assignment  of  error,  claiming  insufficiency  of   the          evidence.   In  reality,  he aims  his fire  at  an even  smaller          target,  for he effectively  concedes that the  government proved          the commission of the crimes.  Refined to bare essence, then, his          appeal  stands  or  falls  on  the simple  proposition  that  the          government  failed to  prove his  complicity in  the scheme.   We          consider his plaint.                                          5                               A.  Standard of Review.                               A.  Standard of Review.                                   __________________                    The well-settled standard applicable to sufficiency-of-          the-evidence  challenges  requires  that   this  court  determine          whether,  after  assaying  all  the evidence  in  the  light most          amiable to the  government, and taking all  reasonable inferences          in  its  favor,  a  rational  factfinder  could  find,  beyond  a          reasonable  doubt, that  the prosecution successfully  proved the          essential  elements of the  crime.  See  Ortiz, 966  F.2d at 711;                                              ___  _____          Maraj, 947 F.2d at 522.  In  this process, a reviewing court must          _____          defer all credibility  judgments to the jury.   See United States                                                          ___ _____________          v. David, 940 F.2d 722, 730 (1st Cir. 1991), cert. denied, 112 S.             _____                                     _____ ______          Ct. 2301  (1992); United States  v. Echeverri, 982 F.2d  675, 677                            _____________     _________          (1st Cir.  1993); United States  v. Serrano,  870 F.2d 1,  5 (1st                            _____________     _______          Cir. 1989).                    Contrary to appellant's  insinuation, the criminal  law          does  not  place a  special  premium on  direct evidence.    As a          general   matter,  the  prosecution's  burden  of  proof  can  be          satisfied by either direct or circumstantial evidence, or by  any          combination  thereof.   See Echeverri,  982 F.2d  at 677;  United                                  ___ _________                      ______          States v. Victoria-Peguero, 920 F.2d 77, 86-87 (1st  Cir.), cert.          ______    ________________                                  _____          denied, 111 S. Ct. 2053 (1991).  As long as the evidence taken in          ______          its entirety supports a judgment  of conviction, it need not rule          out   every  other  reasonable  hypothesis  of  innocence.    See                                                                        ___          Victoria-Peguero, 920 F.2d at 86-87.          ________________                                   B.  Discussion.                                   B.  Discussion.                                       __________                    Appellant submits  that the  prosecution introduced  no                                          6          direct  evidence  that  he, himself,  committed  fraud,  aided or          abetted  another's fraud, or induced some  third person to commit          fraud.  We agree:  the government  produced nothing in the way of          a confession or any other single piece of evidence that, standing          alone, might irrefutably prove appellant's guilty knowledge.  But          a court  will not  automatically invalidate  a conviction  merely          because the jury  based its finding of scienter,  and, hence, its          verdict,  on circumstantial  evidence alone.    Guilty knowledge,          like specific intent, see, e.g., United States v. Desmarais,  938                                ___  ____  _____________    _________          F.2d 347, 352  (1st Cir. 1991); United States v.  Campa, 679 F.2d                                          _____________     _____          1006, 1010 (1st  Cir. 1982), seldom can be  established by direct          evidence.  This principle has particular pertinence in respect to          fraud crimes which,  by their very nature, often  yield little in          the way of direct proof.  Unless an accomplice turns, a miscreant          confesses,  or  a  suspect  is  snared by  his  own  rodomontade,          prosecutions for fraud must routinely  be mounted on the basis of          indirect evidence.                    This approach to  proving guilty  knowledge is  neither          legally  problematic nor  even controversial.   The  law is  long          since settled  that the prosecution  may prove  its case  without          direct evidence of a defendant's  guilty knowledge so long as the          array of circumstantial  evidence possesses sufficient persuasive          power.  See  Maraj, 947 F.2d at 523; United States v. Boylan, 898                  ___  _____                   _____________    ______          F.2d  230, 242  (1st Cir.),  cert. denied,  498 U.S.  849 (1990);                                       _____ ______          United States v. Mount, 896 F.2d 612, 615 (1st Cir. 1990); United          _____________    _____                                     ______          States v. Thornley, 707 F.2d 622, 625 (1st Cir. 1983).  Moreover,          ______    ________                                          7          "[c]ircumstantial evidence  tending to show guilty knowledge need          not compel  a finding  of such  knowledge in  order to  sustain a          conviction; all that is necessary is that reasonable jurors could          be  convinced beyond a  reasonable doubt that  the defendants had          guilty knowledge."  United States  v. Flaherty, 668 F.2d 566, 579                              _____________     ________          (1st Cir. 1981); accord United States v. Kilcullen, 546 F.2d 435,                           ______ _____________    _________          443  (1st Cir. 1976)  (collecting cases), cert.  denied, 430 U.S.                                                    _____  ______          906 (1977).  In this case, then, the pivotal issue is not whether          there  is  direct  evidence   of  appellant's  guilty  knowledge.          Rather, the proper query hinges  on whether a rational factfinder          reasonably could infer  appellant's guilty knowledge and,  hence,          his participation  in the charged  crimes, from the whole  of the          evidence,  bearing in mind  the presumption of  innocence and the          government's  burden to prove essential facts beyond a reasonable          doubt.  We believe this query merits an affirmative answer.                    Here,  the government  proved  the  appellant held  the          reins of  corporate control and  had hands-on involvement  in the          operation  of the  business.  There  was testimony,  for example,          that  appellant, himself,  spent  long  hours  at  the  corporate          headquarters,  ran the  company,  conducted management  and staff          meetings,  reviewed run  logs  and  weekly  schedules  of  driver          assignments and equipment utilization, sometimes assumed the role          of dispatcher, and  enjoyed sole dominion over  the corporation's          cash flow.  Many of  the transportation services described in the          fraudulent billings required  special hours for drivers,  which a          jury  reasonably could infer  affected payroll    and appellant's                                          8          domain unquestionably included payroll.                       There was  more.  Appellant's name  invariably appeared          on Medicare  claim forms.   He was  intimately familiar  with the          method and manner  in which the corporate records  were kept, and          those records  were maintained under  his ultimate control.   The          jury  had   before  it  the   handwriting  evidence,  chronicling          appellant's  authorship of  some fraudulent logbook  entries, and          the  evidence  of  abrupt  changes  in  recordkeeping  practices,          conducive to covering  up the scheme.   Finally, the  corporation          was in dire financial straits, a  fact which made more likely the          owner's involvement in  the illegal enterprise through  which the          corporation  remained afloat.  See  United States v. McMahon, 938                                         ___  _____________    _______          F.2d 1501, 1507 (1st Cir. 1991).                    Appellant invites us  to consider each of  these pieces          of evidence in isolation; and he  claims that, taken one by  one,          each piece can  be explained away in  some innocent fashion.   We          decline the invitation.   The evidence in a  criminal case should          be viewed in its totality, see, e.g., United States v. Bourjaily,                                     ___  ____  _____________    _________          483   U.S.  171,  179-80  (1987),  for  evidence     particularly          circumstantial evidence   often has an exponential effect.  After          all, "[t]he  sum  of  an evidentiary  presentation  may  well  be          greater than its constituent parts."  Ortiz, 966 F.2d at 711.   A                                                _____          beehive near  a country lane  tells a stranger very  little about          the use to  which the  property is  devoted.  Yet,  if there  are          eighty or ninety beehives in a shed, who would doubt that  he had          stumbled upon an apiary?                                          9                    Appellant  also says  that some  witnesses contradicted          the inference hawked  by the government, offering  testimony that          tended  to show appellant  distanced himself from  the day-to-day          operation of the ambulance service, confined his  labors to sales          and payroll,  delegated  much responsibility,  and  attended  the          workplace only sporadically.   This argument lacks force,  for it          asks  us to usurp  the jury's province.   See Maraj,  947 F.2d at                                                    ___ _____          523; David, 940  F.2d at 730.  "[W]hen the jury is presented with               _____          conflicting factual  statements, the resolution of  the conflict,          and  any concomitant credibility  calls, are uniquely  within the          jury's province."   Ortiz, 966 F.2d at 713;  accord United States                              _____                    ______ _____________          v.  Rothrock, 806  F.2d 318, 321  (1st Cir. 1986).   Therefore, a              ________          jury  can  freely  choose to  credit  particular  testimony while          discounting other testimony  that arguably points in  a different          direction.  See  United States v. Alvarez,  987 F.2d 77,  83 (1st                      ___  _____________    _______          Cir.), cert. denied, 114 S. Ct. 147 (1993).                 _____ ______                    We note, too, that the element of guilty knowledge in a          criminal case  may be supplied by inferences  drawn from evidence          suggesting  that a defendant deliberately blinded himself to what          would otherwise have  been obvious.  See, e.g.,  United States v.                                               ___  ____   _____________          Richardson, ___ F.3d ___, ___  (1st Cir. 1994) [No. 92-2307, slip          __________          op. at 10-11];  United States v. St. Michael's  Credit Union, 880                          _____________    ___________________________          F.2d  579,  584-85  (1st Cir.  1989)  (collecting  cases); United                                                                     ______          States  v.  Littlefield,  840 F.2d  143,  147  (1st Cir.),  cert.          ______      ___________                                     _____          denied, 488  U.S. 860  (1988); United States  v. Picciandra,  788          ______                         _____________     __________          F.2d 39, 46  (1st Cir.), cert. denied,  479 U.S. 847 (1986).   In                                   _____ ______                                          10          this case, the stage was appropriately set for such an inference:          although appellant claimed a lack of knowledge, the  facts, taken          in the  light most hospitable  to the government, see  Ortiz, 966                                                            ___  _____          F.2d at 711, strongly suggested that, given the widespread nature          of the fraud and  the importance to the corporation of  the extra          revenues generated by it,  only a conscious course  of calculated          ignorance  could have kept the company president from knowing the          truth.  The trial court  charged the jury on this principle,  the          record supports the  instruction, and appellant has  not assigned          error  to it.   In  itself, the  resultant inference  suffices to          validate the finding of guilty knowledge.                    We  will  not  paint  the  lily.   Here,  there  was  a          plenitude of evidence from which  the jury rationally could  have          inferred that  appellant was a  perpetrator of the crime,  not an          innocent  bystander.  Indeed, when the extensive evidence showing          appellant's involvement  in the corporation's  day-to-day affairs          is coupled  with the pervasiveness  of the fraud  and appellant's          powerful  economic  motive,  it  seems   entirely  reasonable  to          conclude  that appellant  knew of,  and  participated in  making,          false  statements  to   procure  Medicare  funds  to   which  the          corporation  had  no   entitlement.    This   conclusion  becomes          compelling  when we recall  that, in gauging  witness credibility          and choosing from among competing inferences, jurors are entitled          to take full advantage of their  collective experience and common          sense.  See United States v. Vargas, 945 F.2d 426, 429  (1st Cir.                  ___ _____________    ______          1991); United States v. Smith, 680 F.2d 255, 260 (1st Cir. 1982),                 _____________    _____                                          11          cert.  denied, 459  U.S.  1110  (1983).     There are  limits  to          _____  ______          coincidence.          III.  CONCLUSION          III.  CONCLUSION                    We  need  go  no  further.5    In  this  instance,  the          convergence  of several lines of circumstantial evidence formed a          river of  proof sufficient  to warrant the  jury's finding.   See                                                                        ___          Victoria-Peguero,  920 F.2d at  86-87.  And  because the evidence          ________________          need only support  the verdict, rather than  compel a conviction,          see  Echeverri,  982  F.2d  at  678; Boylan,  898  F.2d  at  243,          ___  _________                       ______          appellant's assignment of error founders.   In the last analysis,          courts ought not stubbornly insist that criminal juries disregard          the obvious.   See United States  v. Ingraham, 832  F.2d 229, 240                         ___ _____________     ________          (1st Cir. 1987), cert. denied, 486 U.S. 1009 (1988).                           _____ ______          Affirmed.          Affirmed.          ________                                        ____________________               5Our determination that the evidence supports the verdict on          the "false  statement" counts removes  any need  to consider  the          specifics  of the  case in  respect  to the  130 counts  charging          criminal  conversion of  public funds.   As  appellant  owned the          corporation,  the  ill-gotten  gains  necessarily  inured to  his          benefit.                                          12