Court Opinion

ID: 195190
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:35:01+00
Date Added: 2024-06-11T09:43:00.602533
License: Public Domain

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

          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

          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.
                                           

          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.
                                       

          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

          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.
        

                    

     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