Court Opinion

ID: 2771140
Source: CourtListenerOpinion
Date Created: 2015-01-19 14:22:53.29504+00
Date Added: 2024-06-11T10:44:57.962535
License: Public Domain

Affirmed and Opinion filed January 15, 2015.

                                      In The

                    Fourteenth Court of Appeals

                              NO. 14-13-00487-CR

                      DAVID AUSTIN PRICE, Appellant
                                        V.

                       THE STATE OF TEXAS, Appellee

                    On Appeal from the 185th District Court
                            Harris County, Texas
                        Trial Court Cause No. 1368261

                                   OPINION

      Appellant was found guilty of unlawfully appropriating at least $200,000.
The only question on appeal is whether the evidence is legally sufficient to support
the conviction. We conclude that the evidence is sufficient and we affirm the trial
court’s judgment.
                                 BACKGROUND

       This case is about a scheme of fraudulently billing Medicaid. The fraud
occurred in a small dental clinic known as Lupe’s Wonderful Smiles, which was
founded by appellant and his business partner, Wesley Simmons, neither of whom
is a dentist.

       In 2007, appellant and Simmons submitted an application to the Texas
agency responsible for administering Medicaid, requesting that their clinic be
registered as a Medicaid provider. By signing the application form, appellant and
Simmons agreed to comply with all Medicaid rules and regulations. One such rule
required that they would certify the correctness of any claims they submitted to
Medicaid. The Texas agency approved the application, even though it was
incomplete, and despite regulations prohibiting the ownership of clinics by non-
dentists.

       After registering the clinic as a Medicaid provider, appellant and Simmons
hired Dr. Joon Kim to serve as the dentist of the clinic. The parties agreed that Dr.
Kim would have complete control over the practice of dentistry while appellant
and Simmons handled the business side of the operation.

       Dr. Kim treated patients with all types of insurance, but his clients were
primarily Medicaid recipients. After recording the services he performed, Dr. Kim
would forward his charts to appellant and Simmons, who then proceeded to bill
Medicaid. Appellant was involved with the billing process when the clinic first
opened, but over time, that responsibility shifted entirely to Simmons.

       Dr. Kim eventually grew frustrated with the operation because appellant was
seldom in the office. Dr. Kim was also concerned because he lacked access to the
clinic’s bank statements. Dr. Kim devised a plan to leave the clinic and open his

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own practice, and he shared that information with one of his dental assistants.
When appellant received word of this intent, he became angry and physically
shoved Dr. Kim out the door. Dr. Kim left the clinic in June 2008.

      After Dr. Kim’s exit, appellant and Simmons hired temporary dentists to
work at the clinic. Before settling on a permanent dentist to hire, they continued to
submit bills using Dr. Kim’s Medicaid provider number, falsely representing that
Dr. Kim was the dentist who had rendered the services. Simmons approached
appellant about this continued use of Dr. Kim’s Medicaid provider number, and
appellant told Simmons to keep the business “under the radar” until a new dentist
could be hired.

      Appellant and Simmons stopped using Dr. Kim’s Medicaid provider number
in May 2010, when they hired Dr. Jennifer Molandes. By that time, the clinic had
received more than $1.6 million from Medicaid for services that had been billed
falsely under Dr. Kim’s name.

      In 2011, a woman entered the clinic, complaining that the clinic had billed
Medicaid for services that had never been provided to her children, who were
former patients. The woman was distressed because she had taken her children to
another clinic, and the dentist there was unable to provide the children with
necessary treatment because records indicated that Medicaid had already paid for
the treatment. A dental assistant referred the matter to Dr. Molandes, who collected
a sample of patient charts and their accompanying bills. When she realized that the
files did not match because the clinic was overbilling, Dr. Molandes reported the
fraud to Medicaid. She quit shortly thereafter.

      Auditors pored through the clinic’s records and confirmed the reports of
fraud. Of all the money that the clinic had received from Medicaid after Dr. Kim’s

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exit, the auditors determined that at least $1.2 million represented services that had
never been rendered.

      Appellant and Simmons were both charged with theft, but Simmons pleaded
guilty and testified during appellant’s trial. Simmons confessed that he was
responsible for the fraudulent billings and that he had used the clinic’s bank
accounts for personal purposes. Simmons’s spending was extravagant: it included
tickets to NBA basketball games and trips to Florida, New York, and California.
Simmons paid for appellant to accompany him on all of these excursions, but as
soon as the fraud was reported, appellant expected Simmons to “fall down on the
sword.”

      Appellant testified in his own defense. He claimed that he never submitted a
fraudulent bill to Medicaid for services that had not been performed. Appellant
blamed Simmons for that malfeasance. Appellant admitted, however, that he knew
that the clinic had continued to use Dr. Kim’s Medicaid provider number long after
Dr. Kim had left the clinic. Appellant attempted to explain that this use was
permitted under an agreement with Dr. Kim, despite Medicaid regulations to the
contrary.

      The State produced evidence that tended to show appellant’s complicity in
the fraud. This evidence included testimony that appellant received a salary as high
as $3,000 per week, even though appellant only appeared in the clinic once every
month. The State further demonstrated that appellant had used the clinic’s bank
account for his own purposes, including to pay for a mortgage, a car, a party venue,
and various home services.

      The State also elicited testimony about appellant’s prior experience. Before
opening the clinic, appellant had served as the office manager of another dental
practice that was legally owned and operated by a licensed dentist. In this other
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job, appellant regularly created production reports that showed the amount of
billing performed by the office’s two practicing dentists. After their services were
combined, the two dentists rarely billed more than $100,000 per month, except for
during the busy summer months. Appellant’s clinic, by contrast, had the capacity
for only a single practicing dentist, yet the clinic frequently billed in excess of
$100,000 each month. At its apex in January 2011, the clinic received more than
$140,000 from Medicaid. Appellant had access to all of the billings that were
submitted by the clinic, but he never reviewed them. The State suggested that
appellant was willfully turning a blind eye because he knew the billings were
fraudulent.

      To buttress this theory, the State elicited additional evidence that, in 2010,
appellant had called a meeting with Simmons and Simmons’s parents to address
Simmons’s extreme spending habits. The meeting occurred shortly after Simmons
had returned from a trip to Europe to see a long-jump competition. Appellant knew
that Simmons had been drawing on the clinic’s bank accounts for personal
purposes, but despite his concern for Simmons’s spending habits, appellant
testified that he never reviewed the clinic’s bank statements. As before, the State
intimated that appellant had chosen to ignore the bank statements because he knew
that the clinic was receiving an inordinate amount of disbursements from
Medicaid.

              APPLICABLE LAW AND STANDARD OF REVIEW

      Cases of alleged Medicaid fraud may be prosecuted under the general theft
statute. Cf. Odelugo v. State, 443 S.W.3d 131, 133 n.4 (Tex. Crim. App. 2014)
(defendant was charged with engaging in organized criminal activity by unlawfully
appropriating at least $200,000 from Medicare and Medicaid); Turner v. State, 636
S.W.2d 189, 192 (Tex. Crim. App. 1980) (op. on reh’g) (defendant was charged

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with unlawfully appropriating at least $10,000 from Blue Cross-Blue Shield, which
was underwriting Medicaid). A person commits a theft if the person unlawfully
appropriates property with the intent to deprive the owner of the property. See Tex.
Penal Code § 31.03(a). An appropriation of property is unlawful if it is without the
owner’s effective consent or if the property is stolen and the actor appropriates the
property knowing that it was stolen by another. Id. § 31.03(b)(1)–(2). Consent is
not effective if it is induced by deception or coercion. Id. § 31.01(3). If the theft
occurs in connection with a contract, there must be proof that the appropriation
was the result of a false pretext, or fraud, and that the person intended to deprive
the owner of the property at the time the property was taken. See Taylor v. State,
No. PD-0051-14, — S.W.3d —, 2014 WL 6983938, *5 (Tex. Crim. App. Dec. 10,
2014); Wirth v. State, 361 S.W.3d 694, 697 (Tex. Crim. App. 2012).

      When determining the grade of theft, the amounts taken may be aggregated
if the amounts were unlawfully appropriated pursuant to one scheme or continuing
course of conduct. See Tex. Penal Code § 31.09. Here, appellant was charged with
the aggregate theft of at least $200,000, which is the highest grade of theft
proscribed under our penal system. Id. § 31.03(e)(7). To obtain a conviction, the
State accordingly had to prove that appellant unlawfully appropriated at least
$200,000 from Medicaid with intent to deprive Medicaid of that amount.

      Intent may be inferred from the surrounding circumstances. See Smith v.
State, 965 S.W.2d 509, 518 (Tex. Crim. App. 1998). Where, as here, a person is
also charged as a party to an offense, the person may be criminally responsible for
an offense even if the unlawful act was performed by another. See Tex. Penal Code
§ 7.01(a). A person is criminally responsible for an offense committed by another
if, while acting with intent to promote or assist the commission of the offense, he
solicits, encourages, directs, aids, or attempts to aid the other person to commit the

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offense. Id. § 7.02(a)(2). A person also bears criminal responsibility for an offense
committed by the conduct of another if, while having a legal duty to prevent
commission of the offense and acting with intent to promote or assist its
commission, he fails to make a reasonable effort to prevent commission of the
offense. Id. § 7.02(a)(3).

      When reviewing the legal sufficiency of the evidence, we examine all of the
evidence in the light most favorable to the verdict and determine whether a rational
trier of fact could have found the essential elements of the offense beyond a
reasonable doubt. See Temple v. State, 390 S.W.3d 341, 360 (Tex. Crim. App.
2013). The evidence is insufficient when the record contains no evidence, or
merely a “modicum” of evidence, probative of an element of the offense. See
Garcia v. State, 367 S.W.3d 683, 687 (Tex. Crim. App. 2012).

      Although we consider everything presented at trial, we do not reevaluate the
weight and credibility of the evidence or substitute our judgment for that of the fact
finder. See Williams v. State, 235 S.W.3d 742, 750 (Tex. Crim. App. 2007).
Because the jury is the sole judge of the credibility of witnesses and of the weight
given to their testimony, any conflicts or inconsistencies in the evidence are
resolved in favor of the verdict. See Wesbrook v. State, 29 S.W.3d 103, 111 (Tex.
Crim. App. 2000). Our review includes both properly and improperly admitted
evidence. See Clayton v. State, 235 S.W.3d 772, 778 (Tex. Crim. App. 2007). We
also consider both direct and circumstantial evidence, as well as any reasonable
inferences that may be drawn from the evidence. Id. Circumstantial evidence is as
probative as direct evidence in establishing the guilt of an actor, and circumstantial
evidence alone can be sufficient to establish guilt. See Hooper v. State, 214 S.W.3d
9, 13 (Tex. Crim. App. 2007).

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                                     ANALYSIS

      The parties do not dispute that Simmons committed an aggregate theft of
$200,000 or more. The question we consider is whether there is legally sufficient
evidence that appellant acted as a party to that theft. The State asserts that appellant
may be criminally responsible under two separate theories of culpability. The first
theory focuses on appellant’s knowledge of the fraudulent use of Dr. Kim’s
Medicaid provider number, and the second theory focuses on his failure to prevent
the fraudulent billing of services never rendered. We examine each of these
theories in turn.

A.    Fraudulent Provider Number

      Appellant agreed to follow all Medicaid rules and regulations when he
submitted an application to register his clinic as a Medicaid provider. One of these
rules required him to certify that any claim submitted by the clinic was “true,
accurate, and complete,” and that the services reported on the claim “were
personally rendered by the billing provider or under the personal supervision of the
billing provider.” See 2008 Texas Medicaid Provider Procedures Manual § 1.2.7;
see also 1 Tex. Admin. Code § 354.1001.

      In this case, the clinic submitted claims for more than $1.6 million in
services that were falsely billed under Dr. Kim’s Medicaid provider number.
Appellant testified that he knew the clinic had been using Dr. Kim’s Medicaid
provider number even though Dr. Kim no longer worked there. However, appellant
insisted that this practice was authorized under an agreement with Dr. Kim.

      A reasonable juror could determine that appellant knew that the practice was
unauthorized. Simmons testified that he approached appellant about the continued
use of Dr. Kim’s Medicaid provider number during the interim period in which the

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clinic lacked a permanent dentist. Instead of instructing Simmons to stop the
prohibited practice, appellant advised him to keep the business “under the radar.”
From this statement, a juror could reasonably infer that appellant knew his
operation was illegal. See Wirth, 361 S.W.3d at 697 (fraud may be demonstrated
by evidence that the defendant acted with “an understanding and common design
to do the prohibited act”). There would have been no need for furtive action if, as
appellant suggested at trial, the clinic was acting within the scope of Medicaid
rules and regulations by submitting claims under Dr. Kim’s name.

      The evidence accordingly supports a finding that appellant encouraged
Simmons to deceive Medicaid, and therefore, that appellant acted as a knowing
party to theft. See Tex. Penal Code § 7.02(a)(2) (discussing a person’s party
liability); id. § 31.01(1)(A) (providing that a person acts by “deception” if he
creates a false impression through words or conduct that is likely to affect the
judgment of another in a transaction, and that the person does not believe to be
true); cf. Nwosoucha v. State, 325 S.W.3d 816, 840–41 (Tex. App.—Houston [14th
Dist.] 2010, pet. ref’d) (conviction for engaging in organized criminal activity was
supported by evidence that the defendant had falsified information that was
submitted to Medicaid).

B.    Services Never Performed

      Appellant also bears criminal responsibility for Simmons’s fraudulent billing
of services that were never performed, a theft valued at more than $1.2 million. As
stated above, a person is criminally responsible for an offense committed by the
conduct of another if while “having a legal duty to prevent commission of the
offense and acting with intent to promote or assist its commission, he fails to make
a reasonable effort to prevent commission of the offense.” See Tex. Penal Code
§ 7.02(a)(3).

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      In this case, it is undisputed that appellant, as an owner of the clinic, owed a
legal duty to Medicaid to verify that all claims submitted by Simmons were “true,
accurate, and complete.” See 2008 Texas Medicaid Provider Procedures Manual
§ 1.2.7; see also 1 Tex. Admin. Code § 354.1001. Despite this duty, as well as
evidence that appellant made the ultimate business decisions for the clinic,
appellant testified that he never reviewed the claims that had been submitted by
Simmons. Appellant also admitted that he implemented no safeguards that would
have prevented the submission of fraudulent claims.

      A reasonable juror could determine that appellant failed to take action
because he intended to promote or assist the commission of Simmons’s $1.2
million theft. The evidence showed that appellant knew from prior experience what
a small clinic would normally bill in a month, and that he was aware of Simmons’s
lavish spending habits from the clinic’s bank accounts. Appellant and Simmons
each had access to the clinic’s accounts, and they both drew on the accounts for
personal purposes. In some instances, with appellant’s knowledge, Simmons even
used a clinic account to pay for appellant to accompany him on trips. The jury
could have reasonably found that appellant took no action to prevent Simmons’s
theft because appellant knew that he was sharing in the fruits of the crime. See
Medrano v. State, 612 S.W.2d 576, 578 (Tex. Crim. App. [Panel Op.] 1981)
(noting that a night watchman or policeman would be criminally responsible as a
party to an offense if he purposefully neglected his duty with the intent to assist the
perpetuating party in the commission of an offense).

C.    Appellant’s Counterargument

      Appellant contends that the trial court’s judgment should be reversed
because the evidence in support of his conviction is “overwhelmingly
outweigh[ed]” by four factors. The factors are as follows: (1) Simmons, rather than

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appellant, was the person who had actually performed the fraudulent overbilling;
(2) appellant was not actively involved in the management of the clinic; (3) an
auditor testified that appellant’s salary may have been only $65,000 per year,
meaning that his weekly pay was much less than $3,000; and (4) the State was
unable to prove with certainty whether appellant or Simmons was responsible for
using the clinic’s debit card for a select group of non-business transactions.

      Appellant’s argument is misplaced. In a legal sufficiency challenge, we do
not weigh the evidence in support of the conviction against any controverting
evidence that may be in the record. Rather, we view all of the evidence in the light
most favorable to the verdict and determine whether a rational jury could have
found all elements of the offense beyond a reasonable doubt. See Gear v. State,
340 S.W.3d 743, 746 (Tex. Crim. App. 2011). For the reasons explained above, we
conclude that the jury in this case could have found every element of theft beyond
a reasonable doubt.

                                  CONCLUSION

      The trial court’s judgment is affirmed.

                                       /s/      Tracy Christopher
                                                Justice

Panel consists of Chief Justice Frost and Justices Christopher and Busby.
Publish — Tex. R. App. P. 47.2(b).

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