Friday, May 31, 2019

Did Someone Call a Doctor? Court Upholds Conviction and Sentence for Fraudulent Medicare House Call Conspiracy.

Medicare reimburses doctors for house calls only under limited circumstances.  Specifically, it reimburses them only where the where the patient is "home bound" as defined under federal regulations.  

In United States v. Daneshvar, the Government secured an indictment charging Daneshvar with, among other things, participating in an elaborate conspiracy with other physicians -- through a company named Mobile Doctors -- to commit health care fraud by providing services to patients who were not, in fact, home bound and in "upcoding" many of their services in order to receive greater Medicare reimbursements to which they were not entitled. After lengthy deliberations, the jury ultimately found him guilty of the conspiracy charge but acquitted him of two counts of Medicare fraud.

Daneshvar raised numerous objections during his trial and sentencing, and he raised numerous issues on appeal.  The Court responded in kind with a lengthy opinion affirming his conviction and sentence.

The Court's opinion addresses each of Daneshvar's issues in great detail.  Several issues are, however, particularly interesting and worthy of discussion here.  In particular, Daneshvar claimed the District Court erred in excluding an e-mail chain he sought to introduce between Mobile Doctors employees in order to establish he was ignorant of the fraud occurring at the company.  The Court disagreed, however, holding that, while the e-mail was relevant under FRE 401, it was not admissible under the business records exception to the hearsay rule, FRE 803(6), simply because it was a communication between Mobile Doctors employees.  Additionally, the Court held the District Court did not abuse its discretion in finding that the e-mail chain was not admissible under the residual hearsay exception, FRE 807, because Daneshvar was able to present more probative evidence during the trial through testimony of other physicians that they were ignorant of Mobile Doctors' billing practises.

Daneshvar also raised a new, and particularly novel, argument on appeal that the District Court should have admitted the e-mail as a statement by his co-conspirators pursuant to FRE 801(d)(2)(E).  In other words, he argued the District Court should have permitted him to introduce his co-conspirators statements on his own behalf, instead of against him.  Unfortunately for Daneshvar, however, the Court disagreed and held the rule did not apply since it only permitted the introduction of co-conspirator statements against another conspirator, not in their favor.

During trial, Daneshvar also sought to introduce "reverse rule 404(b) evidence" by eliciting testimony that, after leaving Mobile Doctors, he began scrutinizing his bills to ensure they were accurate.  This evidence, he argued, was relevant as to his lack of intent to commit health care fraud.  The District Court, however, sustained the United States' objection and excluded the evidence as irrelevant.  On appeal, the Court held that since the evidence only spoke to Daneshvar's  actions after he left Mobile Doctors, it was neither relevant to his intent to engage in the scheme under FRE 401 nor a prior good act pursuant to FRE 404(b). 

The Court's opinion makes clear that Daneshvar's attorneys thoroughly litigated his defense, both during trial and after.  Although he was ultimately unsuccessful in his appeal, Daneshvar's attorneys provide a good example of diligent advocacy for their clients. 

Wednesday, May 29, 2019

Two to Tango? Sixth Circuit Holds Police Can Stop Vehicle Driving "In Tandem" With Suspected Drug Courier

Two vehicles are driving down the interstate.  The police were looking for one of the vehicles as a suspected drug courier but had no prior knowledge about the other vehicle.  Can they stop that vehicle if they believe it is driving "in tandem" with the suspected drug courier?  According to the Court in United States v. Belakhdhar, they can.

In Belakhdhar, Drug Enforcement Administration (DEA) agents, utilizing a confidential informant, made arrangements to purchase heroin from a supplier named Henry Soto, who agreed to drive the shipment from Chicago to Detroit.  With this information, DEA agents waited to intercept Soto's vehicle the next day on Interstate 94.  The agents confirmed the identity of Soto's vehicle through information provided by the confidential informant, which they verified through information they obtained using a "ping" warrant for his car.

When Soto's vehicle approached the DEA agents, they noticed another vehicle driving behind it at approximately the same speed and changing lanes at the same time.  Concluding the cars were driving "in tandem," the agents believed both vehicles were involved in the drug transaction and asked the Michigan State Police to stop both of them.

Once stopped, Belakhdhar provided the police with his identification and consented to a search of his vehicle.  The search, however, failed to reveal any evidence of contraband, and the officer allowed him to leave the scene.

The officer's negative search, however, did not satisfy the DEA agents.  Now armed with Belakhdhar's personal information, the agents discovered that he was not in the United States lawfully and asked border control officers to stop his vehicle.  During the second stop, this time at the United States border with Canada, a drug dog alerted to Belakhdhar's vehicle, and an ensuing search resulted in the discovery of two kilograms of heroin hidden in his vehicle.

Belakhdhar subsequently moved to suppress the evidence seized from his vehicle, arguing that the Michigan state troopers lacked reasonable suspicion to conduct the first traffic stop.  The District Court agreed and held that tandem driving with another vehicle suspected of drug activity did not, by itself, provide reasonable suspicion to stop the vehicle.   The Government appealed.

Noting that the parties had only presented legal issues, the Court noted it was limiting its opinion to the legal question of whether driving in tandem with another vehicle suspected of drug activity can provide reasonable suspicion supporting a stop.  It noted it was not deciding how much proof was necessary to establish that two cars were driving "in tandem. " Explaining that reasonable suspicion "does not present a particularly high bar," the Court held that evidence a car was driving in tandem with another car suspected of drug activity could provide reasonable suspicion to stop the vehicle.

As it noted in its opinion, the Court left open the question as to what evidence is sufficient to establish that a car is driving "in tandem" with a car law enforcement suspects is involved in drug activity.  How closely to the cars have to follow each other?  Does a particular driving pattern suggest the cars are driving in tandem?  These are questions the Court may ultimately have to answer in light of its decision in Belakhdhar.

Friday, May 24, 2019

Sixth Circuit addresses: child victim’s trial testimony via closed circuit television; and mandatory $5,000 assessment under 18 U.S.C. § 3014 

            A jury convicted Patrick Wandahsega of abusive sexual contact with his six-year-old son. He was acquitted of aggravated abuse of a child under twelve-years-old. After a hearing on the government’s motion to allow the child to testify by closed circuit television (CCTV), a magistrate judge filed a Report and Recommendation (R&R) that the testimony be admitted. Defense counsel did not object and the district court adopted the R&R.

            On appeal, the Sixth Circuit considered the defense’s failure to object to the R&R. United States v. Wandahsega. The opinion reiterates that the failure to object to the R&R constitutes a waiver of the issue on appeal if the parties are informed of the potential waiver by the magistrate judge. The default can be excused “in the interest of justice” but the defense did not meet that standard here in spite of its argument that testimony by CCTV violated Mr. Wandahsega’s Sixth Amendment confrontation rights.

            The Sixth Circuit nevertheless addressed the merits and held that there was no clear error in the district court’s findings that the child feared testifying in front of his father and there was a substantial likelihood that he would suffer emotional trauma by doing so. Moreover, the government made an adequate showing of necessity for the CCTV testimony and thus complied with the requirements of Maryland v. Craig, 497 U.S. 836 (1990) and 18 U.S.C. § 3509. Although bound by Craig, the Sixth Circuit noted that “courts and scholars have struggled to reconcile Craig” with Crawford v. Washington, 541 U.S. 36 (2004). Wandahsega, Op. at 10. The Supreme Court may ultimately have to reconcile the two cases.

            The Wandahsega opinion addressed several other issues. In response to an emergency room nurse’s question why he was there, the child said his father twice did something bad to him. The statement was admissible under Fed.R.Evid. 803(4) because it was made for medical diagnosis or treatment. That exception also applied to a doctor’s testimony about what the child said when the doctor asked to examine him. The child declined to be examined and the doctor determined that an examination was unnecessary because the child was not then in pain. The doctor asked questions to determine the urgency of a physical examination and his conversation with the child was admissible as medical diagnosis or treatment.

            The child also made statements to his grandmother and to the mother of Mr. Wandahsega’s other children accusing his father of sexual abuse. Those statements were admissible under the “residual exception” (Fed.R.Evid. 807(a)) because they were trustworthy in light of their spontaneity; consistent repetition; the child’s mental state; “the use of terminology unexpected of a child of similar age;” and the lack of a motive to fabricate. Wandahsega, Op. at 14.

            A couple of sentencing issues are also worth noting. A 5-level “pattern of activity” enhancement was applied under U.S.S.G. § 4B1.5(b)(1). There was evidence that the sexual conduct occurred on more than one occasion and the present offense of conviction can be one of “the two required occasions of prohibited sexual conduct for § 4B1.5(b)(1)’s enhancement[.]”  Wandahsega, Op. at 20.

            Although Mr. Wandahsega was acquitted of aggravated sexual abuse (18 U.S.C. § 2241(c)), that conduct was used to enhance his sentence under U.S.S.G. § 2A3.4(c)(1) because the government proved by a preponderance of the evidence that he committed the abuse. That ruling was upheld because the district court properly relied on the child’s testimony and his statements to other witnesses and Mr. Wandahsega was not sentenced above the statutory maximum.

            Lastly, the Sixth Circuit upheld the imposition of a mandatory $5,000 assessment under the Justice for Victims of Trafficking Act (JVTA), 18 U.S.C. § 3014(a)(2). The assessment is imposed “on any non-indigent person or entity convicted of an offense” relating to sexual abuse. Defendants have “20 years after the release from imprisonment” to pay the assessment. The district court is not required to make detailed factual findings if it can be inferred that the defendant’s ability to pay and other factors required by law were considered by the court.            

            Mr. Wandahsega maintained that he was indigent when he was sentenced because he had appointed counsel and the district court determined that he was unable to pay a fine. The Sixth Circuit stated that eligibility for appointed counsel was “probative but not dispositive” of indigency. Wandahsega, Op. at 25 (citation omitted). The PSR indicated that Mr. Wandahsega had $200 in a checking account and medical bills totaling $30,000 and he thought he could be employed after he got out of prison. The PSR concluded that Mr. Wandahsega could make incremental payments on the assessment. The defense did not object to the assessment so the issue was reviewed for plain error.

            In assessing indigency, the court considers whether the defendant is presently impoverished and whether he has “the means to provide for himself so that he will not always be impoverished.”  Wandahsega, Op. at 24 (citation omitted) (emphasis original). Thus, one’s future earning potential can be considered in determining indigency. Mr. Wandahsega argued that his substance abuse, mental health issues, and sex offense conviction would hinder his earning potential. The Sixth Circuit in upholding the assessment noted that Mr. Wandahsega did not address why he could not earn money while he was in prison and even if he had a minimum wage job upon release, he had not shown that “he will be unable to pay the assessment in increments over a twenty-year period.” Wandahsega, Op. at 25. The Sixth Circuit’s ruling underscores the need for counsel to be proactive at sentencing to establish a client’s indigency.

          Is a sentence imposed by oral pronouncement or by written judgment?

          In United States v. Davis, Aundre Davis was convicted of several offenses including three counts of sex trafficking of a minor for helping to arrange prostitution acts by the minor over a three day period. At sentencing, the district court applied an undue influence enhancement and split the sex trafficking counts into three groups. The court orally pronounced a sentence of life imprisonment. The next day the court contacted counsel and indicated it was inclined to impose a different sentence because of its concern that there was an unwarranted sentencing disparity between Mr. Davis and his co-defendants. A sentence of 360 months imprisonment was imposed and judgment was entered accordingly.

            The Sixth Circuit held that the district court properly split the sex trafficking counts into three groups – one for each of the three days that the minor engaged in prostitution. The court reasoned that under the commentary to U.S.S.G. § 3D1.2 if an offender commits the same crime against the same victim on different dates, then each act is a separate instance of harm and the offenses should be grouped separately.

            With respect to the undue influence enhancement (U.S.S.G. § 2G1.3(b)(2)(B)), there is a rebuttable presumption that the enhancement applies where, as here, the defendant is at least ten years older than the minor. (U.S.S.G. § 2G1.3, comment.(n.3(B)). The district court committed error because it “relied almost exclusively” on the presumption to impose the enhancement and the Guidelines required it to “closely consider the facts of the case.” Davis, Op. at 7. As the Sixth Circuit saw it, the evidence “undercuts this presumption” because the minor testified that “she had previously engaged in prostitution, willingly engaged in prostitution during the events of this case, contacted the defendants to have them procure her clients, and refused a client procured for her by Davis.” Davis, Op. at 7. Since the district court did not provide an adequate explanation for imposing the enhancement, the Sixth Circuit vacated the sentence and remanded for the district court to make factual findings on the enhancement and resentence Mr. Davis.

            In a cross-appeal, the government argued that Mr. Davis’ sentence was imposed when it was orally pronounced and the district court did not have authority to modify it after the pronouncement. Mr. Davis argued that reconsideration was permissible because a sentence is imposed when the written judgment is entered. The Sixth Circuit agreed with the government’s position. Fortunately for Mr. Davis, the issue was moot because the court was vacating and remanding the case for resentencing on the undue influence enhancement. At the resentencing, “the district court is free to impose a sentence of thirty years’ imprisonment—or another sentence.” Davis, Opp. at 9.  

            In footnote 4 of the Davis opinion, the Sixth Circuit noted that subject to certain specified circumstances 18 U.S.C. § 3582(c) prohibits modification of “a term of imprisonment once it has been imposed.” In addition, Fed.R.Crim.Proc. 35 allows a sentence reduction for substantial assistance or to correct a clerical error. Since none of the specified circumstances existed here, “the district court could change its mind after orally pronouncing sentence in this case only if the term of imprisonment had not yet been imposed.” Davis, Opp. at 9, n.4. Although the Sixth Circuit has “not squarely addressed” the issue of whether a sentence is imposed when it is orally pronounced or when the written judgment is entered, it has “strongly implied that a sentence is imposed when it is orally pronounced.” Davis, Op. at 9, n.4. Indeed, the court observed that Rule 35(c) states that ‘“sentencing’ means the oral announcement of the sentence.” Davis gives us a good idea where the court is going when it is squarely faced with the issue of when is a sentence imposed.


Friday, May 10, 2019

Two takes on “substantive reasonableness” sentencing review

The Sixth Circuit issued two decisions this week that show both the promise and limits of appellate review of sentencing decisions.

1. The standard outcome
The first decision, United States v. Muchow, shows the usual limits that apply in a sentencing appeal.

Wesley Muchow pleaded guilty to child-pornography charges (he had 129 images and 4 videos) and faced a sentencing range of 135 to 168 months. He received 135 months. He argued on appeal that this sentence was substantively unreasonable, noting his other law-abiding conduct and that the district court held against him uncharged viewing of child pornography in the past.

In affirming, as is typical, the Sixth Circuit emphasized the “significant latitude” afforded to sentencing courts. It explained: "Where a district court acted reasonably in imposing a sentence, this Court must affirm its decision."

As an aside, two notables: (1) This is Judge Readler’s first authored opinion. (2) It is unusual to see this type of sentencing-review decision published.

2. When substantive-reasonableness review has teeth
In contrast, the second decision, United States v. Warren, shows when appellate review can make a difference. 

In the district court, the parties both agreed that a guidelines sentence of 51 to 63 months was appropriate for Davian Warren’s possession of a firearm. But N.D. Ohio Judge Adams varied upward to 120 months, the statutory maximum.

The Sixth Circuit reversed the sentence as substantively unreasonable.

In doing so, the court explained that sentences above the guidelines range are not given a presumption of reasonableness, and a sentencing court must adequately justify its variance from the range. The court then noted that Judge Adams had recognized his disparately harsh treatment of Warren but cited only Warren's criminal history as a reason for the disparity. The Sixth Circuit found this justification not "sufficiently compelling" to justify "the greatest possible upward variance under the statute." It explained:
"[B]ecause the Guidelines already account for a defendant's criminal history, imposing an extreme variance based on that same criminal history is inconsistent with 'the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct' under 18 U.S.C. § 3553(a)(6)."
Unfortunately, this decision is unpublished (at least for now). But it shows that there is still some hope of appellate courts reining in unusually harsh sentencing decisions.