Court Opinion

ID: 2994678
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:16:01.260274+00
Date Added: 2024-06-11T11:45:21.970592
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 00-1013

United States of America,

Plaintiff-Appellee,

v.

Georgia R. Freitag,

Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern
Division.
No. 99 CR 218--Rebecca R. Pallmeyer, Judge.

Argued May 18, 2000--Decided October 31, 2000

  Before Posner, Diane P. Wood, and Williams,
Circuit Judges.

  Williams, Circuit Judge. A jury
convicted Defendant Georgia R. Freitag of
several crimes relating to her alleged
scheme to defraud the federal government
by submitting false Medicare
reimbursement claims on behalf of an
ambulance company she operated. Based in
part on findings regarding the amount of
money involved in her fraud and Freitag’s
truthfulness at trial, the district court
sentenced Freitag to 41 months’
imprisonment. On appeal, Freitag
challenges her convictions and sentence.
Concerning her convictions, Freitag
contends that the district court
committed reversible error by refusing to
excuse a sleeping juror and by allowing
the government to elicit comments on her
credibility and the credibility of other
witnesses during her cross-examination.
As to her sentence, Freitag asserts that
the district court erred in making its
fraud loss calculation and by imposing an
obstruction of justice enhancement under
the Sentencing Guidelines. For the
reasons stated below, we affirm Freitag’s
convictions and sentence.

I
  In 1979, Freitag began operating a small
ambulance service out of a funeral home
that she and her husband had purchased in
Wilmington, Illinois. Over the years, her
ambulance service grew, and in 1995, she
incorporated the business as Freitag
Ambulance Corporation (FAC) and opened
offices in Joliet, Illinois, and
Wilmington. The vast majority of FAC’s
business involved pre-arranged, non-
emergency ambulance transportation for
elderly individuals. Freitag’s alleged
fraudulent activity arose out of her
efforts to obtain Medicare reimbursement
for ambulance transportation to Medicare
beneficiaries. At trial, the government
attempted to show that Freitag engaged in
a scheme to defraud the Medicare program
by submitting false reimbursement
claims./1

  Under the Medicare program, which
provides federally-funded health
insurance benefits to individuals age 65
and older, ambulance service providers,
like FAC, are entitled to Medicare
reimbursement if the ambulance
transportation is "medically necessary."
Ambulance transportation is deemed
medically necessary when other means of
transportation would jeopardize a
patient’s health. To obtain a
reimbursement, an ambulance service
provider must submit a claim to the
insurance carrier that processes Medicare
claims in the state in which the provider
does business. During the relevant time
period in this case, the insurance
carrier that processed Medicare claims in
Illinois was Blue Cross/Blue Shield of
Illinois ("Blue Cross").

  FAC office employees Lisa Watson and
Janet McLaughlin testified that Freitag
instructed them to bill Blue Cross for
any ambulance transportation involving
Medicare beneficiaries./2 Watson
testified that she submitted Medicare
claims electronically, using the "WA"
medical necessity modifier (or billing
code),/3 as instructed by Freitag.
According to Watson, Freitag was present
during conversations in which FAC
emergency medical technicians indicated
that certain Medicare beneficiaries did
not need ambulance transportation. Watson
testified that she spoke to Freitag about
Medicare bulletins that pertained to
ambulance billing, but Freitag never made
any changes to FAC’s billing practices.
Watson further stated that she told
Freitag that FAC’s billing practices "had
to stop" after they attended a seminar
dealing with Medicare fraud.

  In May 1996, Blue Cross received two
anonymous calls indicating that FAC may
have been submitting false Medicare
reimbursement claims. Blue Cross
initiated a fraud investigation by
sending FAC a document request seeking
ambulance "run sheets" for certain
Medicare beneficiaries./4 Upon receiving
the document request, Freitag instructed
Watson and McLaughlin to retrieve and
alter approximately 300 run sheets. In
accordance with her instructions, Watson
and McLaughlin blotted out "WC" or
"wheelchair" from the run sheets and
indicated that the patients could be
moved by stretcher only.

  McLauglin subsequently called a fraud
hotline at Blue Cross to report that the
run sheets had been falsified. Blue Cross
referred the case to the U.S. Department
of Health and Human Services ("HHS"),
Office of Inspector General, to initiate
a criminal investigation. After a HHS
agent obtained duplicates of the run
sheets from the Riverside Medical Center
in Kankakee, Illinois, the agent
discovered alterations in the set that
FAC had sent to Blue Cross. Two federal
agents then went to FAC to interview
Freitag.

  During the interview, the agents advised
Freitag that they believed that
alterations were made to the run sheets.
Freitag initially stated that she had no
knowledge of how the alterations were
made. According to the testimony of one
agent, however, Freitag later indicated
that she did not want Watson or
McLaughlin to get in trouble and she
inquired whether the agents could
"assume" that she had instructed Watson
and McLaughlin to make changes to the run
sheets.

  Nearly a year after the interview, but
while the criminal investigation was
pending against FAC, Freitag contacted
Brenda Lalumendre, an office manager for
a doctor’s office, and asked her to
prepare letters on behalf of one of the
doctors (Dr. Gant) for whom she worked
stating that it was medically necessary
for FAC to transport certain Medicare
patients to the office by ambulance.
Freitag then faxed Lalumendre a list of
transportation dates and patients for
which she wished the letters to cover.
Over the next four months, Freitag called
Lalumendre repeatedly requesting the
letters. Lalumendre eventually contacted
Medicare to obtain a copy of the
guidelines pertaining to ambulance
billing. After she realized that Medicare
did not cover ambulance transportation
for the patients for whom Frietag was
seeking letters, Lalumendre testified
that she did not provide Freitag with any
letters.

  In further support of its case, the
government called former FAC emergency
medical technicians to testify against
Freitag. They testified that in most
instances they did not perform medical
services when transporting certain
Medicare beneficiaries to and from
doctors’ offices, dialysis centers, or
rehabilitation centers. They also
testified about occasions when certain
Medicare beneficiaries walked to and from
the ambulance without assistance. The
government further admitted into evidence
the falsified ambulance run sheets, seven
Medicare checks payable to FAC, and a
chart showing that FAC billed over
$500,000 in Medicare reimbursement claims
for seven Medicare beneficiaries, which
the government believed were
medicallyunnecessary.

  In her defense, Freitag called Dr.
Katherine Katsoyannis to testify as an
expert witness. Dr. Katsoyannis testified
that certain patients required ambulance
transportation based on their medical
records. On cross-examination, however,
Dr. Katsoyannis admitted that she had
never seen or examined any of the
patients she was testifying about, or
reviewed any interview reports of the FAC
emergency medical technicians who
transported them.

  Freitag also testified in her own
defense. She testified that she never
intended to defraud Medicare. She stated
that every claim she submitted to
Medicare was medically necessary.
According to Freitag, she instructed
Watson and McLauglin to alter the
ambulance run sheets only because she was
"petrified" by the prospect of an audit.
She testified that she was "scared as
hell" when the federal agents interviewed
her because they allegedly screamed,
yelled, and accused her of altering run
sheets. She stated that she told the
agents that she only transported Medicare
beneficiaries when medically necessary.
She also testified that she did not
request letters from Lalumendre in
response to the criminal investigation
into FAC’s billing practices.

  On the basis of the evidence introduced
at trial, a jury found Freitag guilty of
all charges brought in the indictment,
including eight counts of mail fraud, in
violation of 18 U.S.C. sec. 1341, seven
counts of submitting false claims to the
government, in violation of 18 U.S.C.
sec. 287, and one count of health care
fraud, in violation of 18 U.S.C. sec.
3231. The district court sentenced
Freitag to 41 months’ imprisonment
followed by two years’ supervised release
with a special condition of 150 hours
community service, a $1,250 special
assessment, and $506,713 in restitution.
On appeal, Freitag challenges her
convictions and sentence.

II
A. Freitag’s Challenges to Her
Convictions

  1.   The Sleeping Juror

  Freitag contends that the district court
committed reversible error by refusing to
excuse a sleeping juror. At trial, one of
the jurors apparently fell asleep, though
the parties dispute the extent of the
juror’s slumber. Late in the trial, when
a question regarding another juror was
raised, defense counsel asked the court
to remove the juror that had been
sleeping. The district judge declined,
noting that she had only twice noticed
his inattentiveness and she did not think
it was necessary to excuse the juror. The
judge then instructed counsel for both
sides to alert her if they noticed the
juror sleeping again.

  If sleep by a juror makes it impossible
for that juror to perform his or her
duties or would otherwise deny the
defendant a fair trial, the sleeping
juror should be removed from the jury.
See United States v. Kimberlin, 805 F.2d
210, 244 (7th Cir. 1986); United States
v. Bradley, 173 F.3d 225, 230 (3d Cir.
1999); United States v. Springfield, 829
F.2d 860, 864 (9th Cir. 1987). However, a
court is not invariably required to
remove sleeping jurors, Springfield, 829
F.2d at 864, and a court has considerable
discretion in deciding how to handle a
sleeping juror, United States v. Wilcox,
50 F.3d 600, 603 (8th Cir. 1995).
Reversal is appropriate only if the
defendant was deprived of his Fifth
Amendment due process rights or his Sixth
Amendment right to an impartial jury.
Springfield, 829 F.2d at 864. We review
the district court’s handling of this
matter for an abuse of discretion.
Bradley, 173 F.3d at 230.

  Here, there is no evidence that the
sleeping juror missed large portions of
the trial or that the portions missed
were particularly critical. As noted
earlier, the parties dispute the extent
of the juror’s slumber, and defense
counsel failed to raise the matter when
he first noticed the sleeping juror.
Indeed, he waited nearly a week before
alerting the district judge. Once he
raised the issue, the Assistant United
States Attorney (AUSA) stated that she
had only noticed the juror "closing his
eyes" on one occasion. Given that counsel
for both sides had noticed the juror’s
inattentiveness, the wiser practice would
have been to raise the issue as soon as
practicable. Then, the district judge
could have taken the necessary steps to
address the issue as she did when defense
counsel finally alerted her.
Unfortunately, defense counsel opted to
wait, and by the time he raised the
issue, the district judge found it
unnecessary to dismiss the juror because
she had not noticed an extensive sleeping
problem. Given the state of the record,
we find no basis for concluding that
Freitag was deprived of due process, an
impartial jury, or for that matter, a
fair trial.

  Freitag contends that the district judge
should have inquired further into this
matter to determine how much and which
evidence the sleeping juror might have
missed. The district judge declined to
address "memory lapses" because "[t]hat
can go on even when a juror appears
attentive." We find no abuse of
discretion by the district judge,
especially since she had not noticed an
extensive sleeping problem and she
admonished counsel on both sides to alert
her to any further sleeping episodes.

  2. Questions Concerning Credibility of
Witnesses

  During Freitag’s cross-examination,
counsel for the prosecution asked Freitag
several questions regarding whether she
was lying and whether other witnesses
were lying or telling the truth. Freitag
contends that these questions were
impermissible and that the resulting
prejudice requires that the court grant
her a new trial./5

  Because credibility questions are for
the jury, it is improper to ask one
witness to comment on the veracity of the
testimony of another witness. See United
States v. Cole, 41 F.3d 303, 308 (7th
Cir. 1994); United States v. Sullivan, 85
F.3d 743, 749-50 (1st Cir. 1996). While
conceding that under this rule it was
improper for the AUSA conducting
Freitag’s cross-examination to ask her if
other witnesses were lying, the
government contends that it was not
improper to ask Freitag whether she,
herself, was lying because it is
appropriate to ask a witness whether she
is adhering to her oath. The government
further asserts that it was not improper
to ask Freitag whether other witnesses’
testimony was true. In support of this
assertion, the government characterizes
questions about whether another witness’s
testimony is true as questions about
whether the witness’s testimony is
accurate.

  From our review of the record, the
government’s cross-examination of Freitag
was far from model. In some instances,
the government asked questions that
called on Freitag to comment essentially
on the truthfulness, not the accuracy, of
other witnesses’ testimony. The district
judge properly sustained a number of
objections because that sort of
questioning invades the province of the
jury; indeed asking if testimony is true
implies that if it is not, it is a lie,
which is a credibility question for the
jury to decide. However, we are not
troubled by the prosecutor asking a
witness to remark on the truthfulness of
her own testimony because the witness’s
reaction and response are proper fodder
for the jury’s credibility
determinations.

  Assuming arguendo that all the questions
Freitag objects to are improper, we find
the resulting error to be harmless. The
challenged questions constituted only a
small portion of the entire cross-
examination and there was no significant
impact on Freitag’s defense. More
importantly, the evidence against Freitag
was overwhelming.

  Freitag’s office employees (Watson and
McLaughlin) testified about FAC’s
improper billing practices and Freitag
even admitted to falsifying records in
response to a fraud investigation by Blue
Cross, which processed Medicare claims in
Illinois. The record also contained
testimony from former FAC emergency
medical technicians who testified that
certain Medicare beneficiaries did not
require ambulance transportation.
Moreover, Lalumendre testified that
Freitag pressured her to write doctor’s
letters stating that it was medically
necessary to transport certain Medicare
beneficiaries by ambulance. Therefore,
the improper questions do not warrant a
reversal because the government
introduced substantial evidence of
Freitag’s guilt.

B.   Freitag’s Challenges to Her Sentence

  1.   Calculation of Loss

  In fraud cases, the sentence a defendant
receives depends upon the amount of loss
involved in the defendant’s crime. See
U.S.S.G. sec. 2F1.1. In this case, the
large number of fraudulent claims (over
8,000) and the extensive period over
which the claims were submitted (seven
years) made a precise calculation of loss
impractical. Accordingly, the government
turned to a group of statistical experts
to devise a statistical survey that would
produce or generate an estimate of loss.

  The experts selected a sample of 200
claims from a 15- month period and
determined how much of the Medicare money
Freitag took in with respect to those
claims was fraudulently procured. Then,
this result was extrapolated to estimate
how much of the Medicare money Freitag
took in over the 15-month period was
fraudulently procured. The final estimate
was $506,713.

  The court accepted this figure as the
amount of fraud loss and, under U.S.S.G.
sec. 2F1.1, increased Freitag’s offense
level by 10 as the loss exceeded
$500,000. Freitag contends that admitted
errors by the nurse, who evaluated which
of the Medicare reimbursement claims were
improper, undermine the validity of the
loss determination. As this is a
challenge to the factual determinations
underlying the district court’s loss
calculation, we review the district
court’s finding of fact for clear error.
United States v. Mattison, 153 F.3d 406,
412 (7th Cir. 1998).

  Here, the amount of loss resulting from
Freitag’s fraud was calculated over only
a 15-month period even though the
fraudulent activity took place over a
seven-year period. As the government
points out, the loss determination is
quite conservative given the scope and
duration of Freitag’s fraud scheme.
Moreover, Freitag was given the benefit
of the doubt with respect to each claim
(in the 200 sampled) that for one reason
or another could not be evaluated. As the
Sentencing Guidelines only require a
"reasonable estimate of the loss," see
U.S.S.G. sec. 2F1.1 cmt. 9, we find
nothing unreasonable about the district
court’s loss determination based on the
record. Moreover, even if the district
court had taken into account the two
claims on which the evaluating nurse
admitted error, the amount of loss would
still exceed $500,000./6 Thus, a
redetermination of the fraud loss is
unjustified.

  2.   Obstruction of Justice Enhancement

  In sentencing Freitag, the district
court adjusted her offense level upward
after concluding that Freitag had
obstructed justice within the meaning of
U.S.S.G. sec. 3C1.1 by committing perjury
at trial. The district court found that
Freitag had lied in testifying about
three matters: (1) calls she made to a
doctor’s office; (2) the conduct of a
federal agent during the investigation;
and (3) whether certain (unspecified)
conversations with her employees
occurred. Freitag challenges the district
court’s obstruction of justice ruling on
the grounds that the court did not make
the necessary findings on the elements of
perjury and that at least the first two
instances of alleged perjury do not
actually qualify as perjury. This court
reviews the adequacy of a district
court’s perjury findings de novo and
reviews a district court’s factual
findings that the defendant committed
perjury for clear error./7 United
States v. Gage, 183 F.3d 711, 715 (7th
Cir. 1999).

  Under the Sentencing Guidelines, perjury
at trial constitutes obstruction of
justice and subjects a defendant to an
upward adjustment in offense level.
U.S.S.G. sec. 3C1.1 cmt. 4; United States
v. Dunnigan, 507 U.S. 87, 94 (1993). A
defendant commits perjury under this
provision if he or she "gives false
testimony concerning a material matter
with the willful intent to provide false
testimony, rather than as a result of
confusion, mistake, or faulty memory."
Dunnigan, 507 U.S. at 94. While it is
advisable for a district court to make
specific and clear findings on each
instance of perjury, all that is required
to impose the obstruction of justice
enhancement on perjury grounds is that
the court make a finding that encompasses
the factual predicates for a finding of
perjury. Id. at 95.

  Freitag first contends that the district
court did not make sufficient findings of
specific intent with respect to any of
the three alleged instances of perjury.
However, this position cannot be
maintained in face of the following
statement made by the district judge, "I
didn’t believe Miss Freitag’s testimony
was the result of confusion, mistake, or
faulty memory. I thought it really did
function more as a creative revision of
what had happened." Similarly, Freitag
challenges the sufficiency of the
district court’s findings concerning her
testimony about whether conversations
with certain employees occurred. She
claims the district court erred by not
specifying which employees or
conversations it was referring to.
Dunnigan does not require such
specificity, however. The district court
found that her testimony was
intentionally given, false, and material;
nothing more is required under Dunnigan
in the way of findings. And, as the
government has shown, there is more than
sufficient factual support in the record
for the district court’s finding./8

  Freitag further contends that neither of
the first two alleged instances of
perjury in fact constituted perjury. The
government concedes that her testimony
about the conduct of the federal agents
does not support a perjury finding
because it was not material, but the
government does insist that her testimony
regarding the timing of calls she made to
a doctor’s office (in an effort to have a
doctor indicate that certain patients
qualified for Medicare-funded ambulance
service) was perjurious. With respect to
that testimony, Freitag claims her
testimony was literally true, even if it
was misleading. See Bronston v. United
States, 409 U.S. 352 (1973). However,
this cannot be squared with the trial
transcript where Freitag’s account of
when she asked for the doctor’s letters
is in direct conflict with the testimony
of the person she claims to have called
at the doctor’s office. The district
court did not commit clear error in
finding that Freitag perjured herself in
giving this testimony. As there are
sufficient grounds for the district
court’s obstruction of justice
determination, we affirm that
determination.

III

  For the foregoing reasons, we AFFIRM
Freitag’s convictions and sentence.

/1 The government’s fraud accusation centered on
seven Medicare beneficiaries in particular, none
of whom testified at trial.

/2 Freitag hired Watson as an office assistant in
April 1995. A year later, Freitag hired McLaughl-
in as an office manager. Before hiring Watson,
Freitag handled the billing at FAC.

/3 In submitting electronic claims, a provider is
required to use a two-character billing code,
"WA" (that is, a "medical necessity modifier"),
to convey information about the condition of the
patient. The medical necessity modifier indicates
that ambulance transportation was medically
necessary because the patient was transported
under one or more of the following conditions:
the patient was immobile because of a fracture or
possible fracture; the patient had to be re-
strained; the patient was unconscious or in
shock; the patient had sustained an acute stroke
or myocardial infarction; the patient had an
accident or acute illness; the patient had sus-
tained severe hemorrhage; the patient could be
moved only by stretcher; or the patient was bed-
confined before and after the trip.

/4 A "run sheet" is a written record of each patient
transport. The ambulance crew completes the run
sheet each time a patient is transported, docu-
menting, among other things, the location of the
pick-up and the destination, the patient’s physi-
cal condition, any medical services performed
while the patient was in the ambulance, and the
reason why an ambulance was needed.

/5 Freitag also mentions a comment by the AUSA
conducting the cross-examination about the AUSA’s
recollection of the testimony of certain govern-
ment witnesses, but she does not develop any
argument based on this comment and therefore has
waived any argument that could be made.

/6 Freitag cites two errors each in the amount of
$276.32, but she has failed to show how these
errors undermine the reasonableness of the ini-
tial loss determination given the overall scope
and duration of the fraud scheme.

/7 The government contends that this court should
review the adequacy of the district court’s
findings for plain error because Freitag did not
object to the adequacy of the district court’s
findings below. However, as Freitag points out,
when a defendant consistently disputes an issue
(as Freitag did here) and the district court does
not specifically elicit objections to the adequa-
cy of its findings (as the district court did not
here), the defendant does not have to interpose
a further objection to the adequacy of a district
court’s findings after the district court has
ruled. United States v. Patel, 131 F.3d 1195,
1201-02 (7th Cir. 1997).

/8 Freitag, for instance, completely denied having
a conversation with Watson after they attended a
seminar dealing with Medicare fraud. Watson,
however, testified that she had a conversation
with Freitag on their way home from the seminar.
During the conversation, Watson stated that she
told Freitag that FAC’s billing practices "had to
stop" and that Freitag could go to prison for
Medicare fraud.