Court Opinion

ID: 770928
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:41:43+00
Date Added: 2024-06-11T17:55:53.979776
License: Public Domain

230 F.3d 1019 (7th Cir. 2000)
United States of America, Plaintiff-Appellee,v.Georgia R. Freitag, Defendant-Appellant.
No. 00-1013
In the  United States Court of Appeals  For the Seventh Circuit
Argued May 18, 2000Decided October 31, 2000

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

1
* 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

2
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").

3
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.

4
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.

5
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.

6
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.

7
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.

8
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  medically unnecessary.

9
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.

10
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.

11
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

12
A.  Freitag's Challenges to Her  Convictions

1.  The Sleeping Juror

13
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.

14
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.

15
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.

16
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.

17
2.  Questions Concerning Credibility of  Witnesses

18
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

19
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.

20
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.

21
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.

22
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

23
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.

24
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.

25
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).

26
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

27
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).

28
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.

29
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

30
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

31
For the foregoing reasons, we AFFIRM  Freitag's convictions and sentence.

Notes:

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.