United States v. Salomon E. Melgen ( 2020 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-10991
________________________
D.C. Docket No. 9:15-cr-80049-KAM-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
SALOMON E. MELGEN,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 31, 2020)
Before MARTIN, GRANT, and LAGOA, Circuit Judges.
GRANT, Circuit Judge:
Salomon Melgen, an ophthalmologist practicing in Palm Beach County, was
charged in a 76-count indictment broadly alleging that he operated a multi-year
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scheme to defraud Medicare. At trial, the government argued that Melgen had
systematically diagnosed his patients incorrectly and prescribed medically
unnecessary treatments. After nine counts were dismissed for multiplicity, the jury
found Melgen guilty on each of the other 67 counts. The district court sentenced
Melgen to 204 months of imprisonment (below the Guidelines range of 235–293
months) and also ordered restitution.
Melgen filed a notice of appeal. He also filed a motion for a new trial
alleging newly discovered evidence, along with a motion for bond pending appeal.
The court denied both of Melgen’s motions, and this appeal followed. On appeal,
Melgen brings us a laundry list of perceived bases for reversal—including
challenges to a jury instruction about materiality, the introduction of summary
charts at trial (alongside a host of other miscellaneous evidentiary issues), the
sufficiency of the evidence, the court’s denial of a new trial, and the
reasonableness of his sentence. We affirm the district court’s judgment in all
respects.
I.
Salomon Melgen operated a high-volume practice as an eye doctor. A
significant portion of his practice focused on age-related macular degeneration, or
ARMD. There are two varieties of ARMD—“wet” and “dry.” Typically, only 10
to 15% of those diagnosed with ARMD have the wet version of the disease. But
Melgen’s treatment records told a different story. Of the rather remarkable 97.8%
of his patients that he diagnosed with ARMD, he also diagnosed 75.5% with wet
ARMD in at least one eye. That included almost all of his African-American
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patients, even though expert testimony at trial indicated that wet ARMD is “nearly
exclusively a disease of Caucasians,” and thus almost never present in the African-
American population.
Dry ARMD is basically untreatable, but wet ARMD may be slowed or
stopped by so called anti-VEGF drugs.1 One recognized anti-VEGF treatment for
wet ARMD is a drug called Lucentis. A single vial of Lucentis costs
approximately $2,000. Between 2008 and 2013, Melgen’s practice collected
nearly $57 million from Medicare for administering Lucentis. By contrast, Melgen
only rarely prescribed Avastin, another drug recognized as a treatment for wet
ARMD that costs only $50.
Long before this criminal case began, Melgen was involved in litigation
regarding his preferred method for prescribing and administering Lucentis—a
method known as “multi-dosing.” See Vitreo Retinal Consultants of the Palm
Beaches, P.A. v. U.S. Dep’t of Health & Human Servs., 649 F. App’x 684, 687
(11th Cir. 2016). Medicare’s reimbursement rate to medical providers for Lucentis
is based on the fact that each vial of Lucentis is intended to provide a single dose
of solution for a single eye. See id. But Melgen argued that each vial held enough
of the drug to safely administer multiple doses to separate patients from one vial—
and indeed, this was how he administered the drug. This created a billing-and-
compensation issue with Medicare. On the one hand, Melgen could argue that
Medicare’s total costs were the same regardless of whether he multi-dosed or
single-dosed, because Medicare paid Melgen the ordinary per-patient rate for
1
VEGF stands for “Vascular endothelial growth factor.”
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Lucentis either way. On the other hand, Medicare’s rate of payment was based in
part on the expected cost to the provider, so Melgen received a windfall relative to
his expenditures by multi-dosing. And this windfall was substantial—by
extracting up to three doses from a single vial, Melgen’s practice “was
‘reimbursed’ for approximately $6,075 per single Lucentis vial, three times the
average cost of the vial and three times the amount it would have received had it
administered the drug according to the label.” Id. at 688.
Melgen was instructed to repay Medicare millions of dollars for this practice
in June of 2009 after Medicare notified Melgen that multi-dosing misrepresented
his expenses and was medically unreasonable. Id. He then filed a suit seeking the
return of those funds, arguing that Medicare’s interpretation of its regulations was
unreasonable. In 2016, we ruled against Melgen and affirmed Medicare’s
interpretations as not arbitrary or capricious. See id. at 687. As relevant to this
appeal, the government suggested at trial that Melgen continued multi-dosing
Lucentis until 2013.
Melgen also billed Medicare for numerous applications of focal laser
photocoagulation, a procedure to treat wet ARMD where a high-intensity laser
light is aimed at the eye. The government presented evidence at trial that the
procedure is now almost never medically necessary given the effectiveness of anti-
VEGF drugs.
Melgen was charged with Medicare fraud in a 76-count indictment. The
charges generally outlined a scheme in which Melgen systematically over-
diagnosed wet ARMD. The government alleged that Melgen billed Medicare for
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treatments to patients that did not need them—whether because they were
completely healthy, because they had dry ARMD, or because the particular eye he
claimed to treat in his records was either fully blind or a prosthetic. In one case,
for example, Melgen billed Medicare 96 times for treatment on a single patient’s
prosthetic eye. The government also alleged that the scheme involved “pre-filling”
some patient files so that ARMD was a default diagnosis even before Melgen met
with a patient—including pre-drawing depictions of the patient’s retina, even
though those drawings purported to depict the condition of the eye as seen on a
particular (and necessarily later) day.
Counts 1–46 of the indictment alleged that Melgen knowingly and willfully
executed a scheme to defraud Medicare and to obtain, by means of materially false
and fraudulent representations, money controlled by Medicare. Counts 47–65
alleged that Melgen knowingly made or caused to be made false and fraudulent
Medicare reimbursement claims that were medically unreasonable and
unnecessary. Counts 66–76 alleged that Melgen knowingly and willfully made
and used materially false documents while knowing that they contained materially
false and fraudulent statements and entries in connection with the delivery of and
payment for healthcare benefits. These counts covered particular entries in
Medicare charts wherein Melgen falsely diagnosed patients with wet ARMD.
Melgen’s case proceeded to trial. We will briefly recount those parts of the
eight-week trial that are most relevant to the issues raised on appeal. As part of its
case, the prosecution introduced summary charts of Medicare records under Rule
1006 to demonstrate that Melgen’s practices were markedly different from
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similarly situated physicians. See Fed. R. Evid. 1006. Those records were
compiled by drawing out particular doctors’ data from raw Medicare data. In order
to make the summaries relevant, the government pulled the data for only those
self-identified ophthalmologists who (1) billed Medicare for over 500 injections of
Lucentis from 2008–2013, (2) had at least 2,000 Medicare patients during that
time, and (3) billed at least one claim each of those years.
Melgen, who had sought to exclude the charts in limine, renewed his
objection, arguing that the charts were prejudicial, that they were barred as
testimonial hearsay, and that no evidence supported the comparison criteria. For
its part, the government argued that it had explained its comparator criteria through
the testimony of Dr. Stuart Fine, a retina specialist from Colorado. Dr. Fine
endorsed the 500-injection cutoff—which would equal roughly 83 injections per
year over a six-year time span—but he rephrased it as “a hundred a year,
basically.” The government also introduced testimony regarding that criterion
from Dr. Julia Haller, an expert ophthalmologist based in Philadelphia. She
testified that 500 injections of Lucentis over a six-year period would be a
conservative estimate for identifying other retinal specialists. The district court
admitted the charts. The witness who had prepared the charts then testified that the
requirement that the comparators had treated 2,000 patients per year was based on
Melgen’s own patient population of slightly more than 2,000 patients during the
relevant period, and that the requirement of treating one patient per year during the
period ensured that the sample did not include doctors that had not practiced
throughout the relevant period.
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As part of the evidence indicating that Melgen had falsely treated patients,
the government called two witnesses, Delores Griffith and her daughter Susanne
Perry, who insisted that Griffith had never received a particular eye surgery from
Melgen on a particular date. Melgen correctly countered that records from an
anesthetist corroborated that the surgery occurred, and argued that the testimony
was undisclosed extrinsic bad act evidence prohibited by Rule 404(b) in any event.
In response, the district court issued a curative instruction:
On Thursday of last week, the prosecution introduced testimony from
Delores Griffith and Susanne Perry in which both witnesses claimed
that a surgical procedure performed by Dr. Melgen on May 21st of
2009, known as a vitrectomy, had not occurred. Evidence in Ms.
Griffith’s patient file indicates that the procedure was performed on that
date, and billing records show that both Dr. Melgen and the separate
surgical center had billed Medicare for the procedure. So you, as the
jury, are to disregard the witnesses’ testimony about that procedure and
you should strike it from your minds and give it no weight. So I ask
you to follow that instruction.
Other evidence at trial included patient records taken from a sample of
Melgen’s bills. The parties contested whether that sample was statistically
representative. The district court eventually instructed the jury that the sample
was random, although not statistically guaranteed to be representative (later,
at sentencing, the district court did conclude that the sample was
representative to a 95% confidence interval).
The Eleventh Circuit’s pattern jury instruction for Melgen’s offenses says
that a fact is material “if it has the capacity or natural tendency to influence a
person’s decision. It doesn’t matter whether the decision-maker actually relied on
the statement or knew, or should have known, that the statement was false.” But
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before jury deliberations began, Melgen offered a lengthy new instruction based on
a recent Supreme Court case addressing civil qui tam actions under the False
Claims Act. See Universal Health Services, Inc. v. United States ex rel. Escobar,
136 S. Ct. 1989, 2002 (2016). The district court denied the requested alteration,
noting that no similar case had adopted the proposed instruction and that the
proposed instruction lacked a factual basis.
Melgen was convicted on all counts after an eight-week jury trial. The
district court denied Melgen’s initial motions for judgment of acquittal and for a
new trial.
Sentencing was next. Melgen had no prior convictions, and applying
§ 2B1.1 of the United States Sentencing Guidelines, the presentencing
investigation report (PSR) set Melgen’s base offense level at 6. It then found that
Melgen was responsible for a loss of between $65 and $150 million, leading to a
24-level increase. U.S.S.G. § 2B1.1(b)(1)(M). The PSR also incorporated various
adjustments and enhancements, including for the large number of victims and
abuse of trust; those raised Melgen’s total offense level to 42.
Melgen objected that the PSR applied the wrong loss calculation
methodology and that it wrongfully included Medicare funds that he had already
repaid to Medicare. The district court denied Melgen’s objection to the loss
calculation method and found that the starting point for calculating the loss amount
was the amount sought in the fraudulent bills Melgen submitted to Medicare, not
the allowed amount or amount that Medicare actually paid. The court next found
that the government had presented credible evidence establishing a statistically
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reliable basis for concluding that the government’s loss calculation was a
reasonable estimate of Melgen’s fraudulent billing. Because the record contained
no sampling of patients from 2008, 2009, and 2013, the court decided to limit the
loss calculation to the 2010 to 2012 time period. The court then found that the
total amount Melgen fraudulently billed Medicare during those three years was
$73,417,620. The court concluded that the mere fact that Melgen’s treatment
could possibly have benefitted other undiagnosed conditions his patients may (or
may not) have had was insufficient to rebut the loss calculation; those other
conditions were not specified in the patient’s records and amounted to pure
speculation in the court’s view.
At the same time, some of the sentencing decisions were in his favor. The
court sustained Melgen’s objections to the PSR’s two-level enhancement for
abusing the vulnerable and to its two-level enhancement for conduct involving a
conscious or reckless risk of death or serious bodily injury. It therefore concluded
that Melgen had an offense level of 38 and was in criminal history category I, with
a Guidelines range of 235–293 months.
The district court varied downward and imposed a 204-month sentence. It
eventually ordered $52,997,442 in restitution. The court also later denied a motion
for bond pending appeal and for a new trial due to alleged newly discovered Brady
evidence. Melgen now appeals.
II.
Melgen’s first argument on appeal is that the district court erred by giving
the Eleventh Circuit’s pattern jury instruction on materiality. We review de novo
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the legal correctness of a jury instruction, but review “questions of phrasing” and
the denial of a requested instruction for an abuse of discretion. United States v.
Dulcio, 441 F.3d 1269, 1275 (11th Cir. 2006); United States v. Prather, 205 F.3d
1265, 1270 (11th Cir. 2000) (citations omitted).
Our pattern jury instruction is based on the rule that a “false statement is
material if it has a natural tendency to influence,” or is “capable of influencing,”
the “decision of the decisionmaking body to which it was addressed.” United
States v. Henderson, 893 F.3d 1338, 1346 (11th Cir. 2018) (internal quotation
marks omitted) (quoting Kungys v. United States, 485 U.S. 759, 770 (1988)).
Melgen argues that the district court should have instead included his proposed
language from Escobar—that materiality “looks to the effect on the likely or actual
behavior of the recipient of the alleged misrepresentation.” Escobar, 136 S. Ct. at
2002 (alteration adopted and citation omitted).
Escobar, however, does not lend him any aid. First, some background on
that case. Under the False Claims Act the government (and often an employee or
other knowledgeable person who reveals misdeeds) can recover for fraudulent
claims against the government. One theory under which these suits sometimes
proceed is known as “implied false certification.” Escobar addressed the ins and
outs of that theory, which is grounded in the idea that, “when a defendant submits a
claim, it impliedly certifies compliance with all conditions of payment.” Id. at
1995. “But if that claim fails to disclose the defendant’s violation of a material
statutory, regulatory, or contractual requirement, so the theory goes, the defendant
has made a misrepresentation that renders the claim ‘false or fraudulent’”—thereby
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triggering liability under the Act. Id. In that context, the Supreme Court noted that
materiality looks to “the effect on the likely or actual behavior of the recipient of
the alleged misrepresentation.” Id. at 2002. That is the statement on which
Melgen relies.
But it does not help him. To begin, we are not at all sure that Escobar didn’t
approve of the objective standard that our current materiality standard is based on.
“Capable of influencing” is not so very different than looking to the “effect on the
likely or actual behavior” of the actor. Moreover, the Escobar standard for
materiality is not made out of whole cloth. Following the statement that Melgen
relies on, the Supreme Court tied the concept to our understanding of materiality in
tort and contract. See id. at 2002–03. As part of that discussion, it explicitly
referenced the—objective—“reasonable man” standards in both tort and contract.
Id. The Court explained, for instance, that in tort the materiality of a statement
may be shown where “a reasonable man would attach importance to [it] in
determining his choice of action” and that materiality “in contract law is
substantially similar.” Id.
Even if that were not sufficient—which we doubt—Escobar was addressing
quite a different question than the one we face here. One of the key issues in that
case was whether a misrepresentation or omission that technically qualified as a
“condition of payment” would lead to liability even where the government would
never actually refuse to pay on that basis. The answer was no, and the discussion
of materiality was geared toward addressing that issue.
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Which is, of course, a far cry from the criminal fraud statutes that Melgen
faces. We are not the first to notice this distinction. In two cases since Escobar,
the Fourth Circuit has examined whether the precise statement from Escobar that
Melgen latches onto actually alters the long-standing objective materiality standard
in criminal fraud cases. See United States v. Raza, 876 F.3d 604, 619–20 (4th Cir.
2017); United States v. Palin, 874 F.3d 418, 423 (4th Cir. 2017). According to that
court? Doubtful. Like the Fourth Circuit, we think it unlikely that “the Court’s
examination of how materiality applies under ‘implied false certification’ FCA
cases transfers to all cases charging fraud, or even all cases charging health care
fraud.” Palin, 874 F.3d at 423. And we have continued to rely on the standard
articulated in our pattern jury instruction for materiality in criminal cases post-
Escobar without requiring an alteration. See Henderson, 893 F.3d at 1346.
Moreover, Melgen cannot show a factual basis for his requested instruction
even under his proposed interpretation of Escobar’s standard. Melgen billed for
certain services, and Medicare paid for certain services in reliance on those bills.
Melgen did not put forward evidence that Medicare routinely pays for treatment
based on an incorrect diagnosis, if only it is possible that the patient had some
other condition that the treatment would have aided—far from it. And that is
enough to conclude that Escobar does not help him deal with the materiality, or
lack thereof, of his false statements. For these reasons, we conclude both that the
district court did not err in refusing to give Melgen’s proposed instruction and that
any alleged error would have been harmless.
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III.
Melgen next argues that the district court erred by allowing the introduction
of summary charts comparing Melgen’s billing to peer physicians. He sets out
several potential rationales: the charts were not covered by Rule 1006, the evidence
was testimonial hearsay in violation of the Confrontation Clause (or at least
otherwise inadmissible hearsay), and the charts should have required expert
evaluation under Rule 702. Evidentiary rulings are reviewed for both abuse of
discretion and harmless error. See United States v. Maxwell, 579 F.3d 1282, 1295–
96, 1298 (11th Cir. 2009). We review the admission of evidence for plain error
where a defendant failed to make a particular objection at trial. United States v.
Hoffman-Vaile, 568 F.3d 1335, 1341 (11th Cir. 2009). Confrontation Clause
rulings are reviewed de novo and subject to constitutional harmless error analysis.
United States v. Curbelo, 726 F.3d 1260, 1271–72 (11th Cir. 2013); United States
v. Jones, 601 F.3d 1247, 1264 (11th Cir. 2010).
Where, as here, the underlying evidence is made up of voluminous Medicare
claims, a district court has good reason to apply Rule 1006 to allow a summary
chart. “Summary charts are permitted generally by Federal Rule of Evidence 1006
and the decision whether to use them lies within the district court’s discretion.”
United States v. Richardson, 233 F.3d 1285, 1293 (11th Cir. 2000). Under that
rule, “the essential requirement is not that the charts be free from reliance on any
assumptions, but rather that these assumptions be supported by evidence in the
record.” Id. at 1294 (quoting United States v. Diez, 515 F.2d 892, 905 (5th Cir.
1975)). Here, the 500-injections-over-six-years criterion was supported by the
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opinion of Dr. Haller (whom, we note, Melgen was able to cross-examine). The
2,000-patient cutoff reflected Melgen’s own patient load. And the one-patient-
each-year criterion matched Melgen’s own consistent practice during the relevant
period. We therefore find no abuse of discretion in the district court’s decision to
admit the charts under Rule 1006. Permitting the introduction of the underlying
data under the business records exception to hearsay was also well within the
district court’s discretion.
The Confrontation Clause did not apply to Melgen’s ability to cross-examine
decisionmakers regarding the criteria that were used to make the summary charts.
To begin with, the summaries were drawn from non-testimonial Medicare records
that do not implicate the Confrontation Clause under Crawford v. Washington, 541
U.S. 36, 51 (2004).2 Melgen, however, argues that the mere act of choosing
selection criteria to decide which doctors’ data to include in the summary
comparisons was a testimonial act. He argues that he has the right to cross-
examine whoever selected the criteria. Here, that would be the members of the
prosecution team that directed the creation of the exhibit.
That approach has no basis in our law. Attorneys routinely make decisions
about which evidence they believe is relevant to establishing a particular point—
decisions that may include, for example, which witnesses to call, or as here, which
2
For this reason, we also reject Melgen’s general hearsay argument raised in his initial brief—
one which, as the government points out, was never made at trial, and so is reviewed for plain
error. Melgen is correct that “Rule 1006 is not a back-door vehicle for the introduction of
evidence which is otherwise inadmissible.” Peat, Inc. v. Vanguard Research, Inc., 378 F.3d
1154, 1160 (11th Cir. 2004). But here the underlying Medicare data is admissible—so there is
no concern that otherwise inadmissible testimony was snuck in as a summary.
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summaries to enter into evidence. The Confrontation Clause “guarantees a
criminal defendant ‘the right . . . to be confronted with the witnesses against him.’”
Al-Amin v. Warden, 932 F.3d 1291, 1302 (11th Cir. 2019) (quoting U.S. Const.
amend. VI). It does not reach back a step further to demand the opportunity to
cross-examine an attorney over why they decided to call a particular witness—or,
as in this case, about why they chose specific selection criteria in compiling the
summary.
We note that Melgen did cross-examine the FBI analyst who presented the
evidence, and questioned whether any errors might have been made in applying the
chosen comparison criteria. The district court’s application of Rule 1006 therefore
introduced no Confrontation Clause issue.
Melgen also argues that a sufficiently qualified expert under Rule 702
should have been required as a basis for entering the comparison charts. His
argument on this point relies mainly on an unpublished district court decision from
the Northern District of Illinois that declined to recognize two statisticians as
experts because they were not experts in so-called medical statistics. See United
States v. Chhibber, 741 F.3d 852, 854 (7th Cir. 2014) (describing the procedural
history in the trial court but affirming the defendant’s conviction without
addressing this issue). Whatever persuasive value that decision does or does not
hold, we do not see the present case—where the district court had the testimony of
medical experts on the rate of Lucentis injections that would indicate retinal
practice specialty—as analogous. And as previously mentioned, the other
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comparison criteria were reasonably supported by the evidence. We therefore
affirm the district court’s admission of the summary charts.
IV.
We next address several of Melgen’s miscellaneous arguments concerning
his trial. First, Melgen claims that the district court should have excluded any
evidence of Melgen’s multi-dosing of Lucentis because the prosecution had ample
other means for establishing Melgen’s profit motive. But we have already
explained that through multi-dosing, Melgen could get reimbursed by Medicare at
a rate of incredible profit, receiving up to three times the cost of obtaining the drug.
That fact was probative of his profit motive for falsely diagnosing patients with
wet ARMD and then prescribing Lucentis—whether or not his creativity in
administering multiple doses of Lucentis from one vial was lawful. The district
court did not err in admitting the evidence of multi-dosing.
Second, Melgen asks that we reverse the district court’s judgment because
testimony from Delores Griffith (and her daughter) that Melgen never performed a
particular surgery was later shown to be false. The district court denied Melgen’s
motion for a mistrial on that basis.
Denial of a defendant’s request for a mistrial or new trial is reviewed for
abuse of discretion. United States v. Vallejo, 297 F.3d 1154, 1163 (11th Cir.
2002). If the district court issued a curative instruction, this Court will reverse
only if “the evidence is so highly prejudicial as to be incurable.” United States v.
Dodd, 111 F.3d 867, 870 (11th Cir. 1997). At the time that the court became
aware that the witness had testified incorrectly, the district court immediately
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issued a thorough curative instruction. The objected-to witnesses’ testimony was
not incurable—in fact, the district court ably explained to the jury that the
witnesses had remembered falsely. Reversal is plainly not warranted.
Third, Melgen argues that the district court erred by declining to instruct the
jury that the sample of patient files entered into evidence was not statistically
random. As with the testimony from Delores Griffith, however, the court issued a
curative instruction that avoided any prejudice on this point, telling the jury to
disregard any statements concerning statistical confidence in the representative
nature of the sample. That instruction was sufficient to avoid a mistrial.
Fourth, Melgen argues that the district court erred by providing the jury with
twelve unredacted copies of the indictment—in particular, he argues that the court
violated Federal Rule of Criminal Procedure 30(b). But that Rule only requires the
court to notify the parties before closing arguments of “how it intends to rule on
the requested instructions.” Fed. R. Crim. P. 30(b). Allowing the jury to receive
twelve copies (rather than one) does not concern any ruling on the requested jury
instructions—and thus does not implicate Rule 30(b).
Melgen does cite cases in which courts have warned that providing a copy of
the indictment outlining the prosecution’s theory of the case may be unfairly
prejudicial. But those cases are a far cry from this one. In one example, the judge
had not given the jury any “neutral written jury instructions to guide them in their
deliberations”—but did give them the indictment. United States v. Van Dyke, 14
F.3d 415, 423 (8th Cir. 1994). The potential for prejudice was obvious there;
nothing comparable existed here. Moreover, because Melgen did not object when
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he was informed that twelve copies of the indictment were sent to the jury—
instead saying “that’s fine”—any challenge to the number of copies given to the
jury would be reviewed for plain error, if at all. And Melgen identifies no
authority for concluding that the district court plainly erred by providing multiple
copies of the indictment. Nor can he establish any effect on his substantial rights,
as required to meet the standard for plain error, because the court repeatedly told
the jury that the indictment was not evidence of his guilt.
Fifth, Melgen argues that the district court erred by not asking more
questions or granting relief after learning of contact between a government witness
and two defense witnesses. Melgen asserts that the government witness
“intimidated” the defense witnesses. A district court’s decisions about whether to
grant a new trial and whether to conduct an evidentiary hearing regarding alleged
witness intimidation are reviewed for an abuse of discretion. See United States v.
Perez-Oliveros, 479 F.3d 779, 782 (11th Cir. 2007) (“We review the denial of a
motion for a new trial for abuse of discretion.”); United States v. Arbolaez, 450
F.3d 1283, 1293 (11th Cir. 2006) (“Generally, a court’s decision about whether to
hold an evidentiary hearing lies within that court’s sound discretion and will be
reviewed only for an abuse of discretion.”). After the district court learned of the
contact, the court conducted a brief hearing before deciding that the contacts had
not been prejudicial in the end because no testimony had been altered. Melgen
offers no explanation for how either witness’s testimony would have been
different, beyond the possibility that one witness’s demeanor slightly changed after
the contact. Cf. United States v. Thompson, 130 F.3d 676, 687 (5th Cir. 1997)
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(“The defendant bears the burden of showing that testimony would have been
different.”). The court did not abuse its discretion by concluding that no mistrial
was required.
V.
Melgen also briefly challenges the sufficiency of the evidence supporting his
convictions. “A jury’s verdict cannot be overturned if any reasonable construction
of the evidence would have allowed the jury to find the defendant guilty.” United
States v. Capers, 708 F.3d 1286, 1297 (11th Cir. 2013) (quoting United States v.
Herrera, 931 F.2d 761, 762 (11th Cir. 1991)). On appeal, Melgen echoes the same
argument he made to the jury—that the evidence supported a finding that any
“mistakes” in diagnosing patients were not willfully false and that he reasonably
believed the treatments were required. But the “evidence need not be inconsistent
with every reasonable hypothesis except guilt, and the jury is free to choose
between or among the reasonable conclusions to be drawn from the evidence
presented at trial.” Id. (quoting United States v. Poole, 878 F.2d 1389, 1391 (11th
Cir. 1989)).
That rule guides our conclusion that Melgen’s sufficiency of the evidence
challenge fails. Melgen’s arguments go to the weight of the evidence, and not its
sufficiency. The jury heard hours of evidence about Melgen’s motive and means
for fraudulently billing Medicare for an expensive drug. It’s true that Melgen
offered alternative explanations for some of the evidence against him; we are
thinking, for example, of the claim that pre-prepping diagnoses before Melgen saw
patients might have led to honest mistakes. But those explanations were for the
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jury to weigh, not us. After all, the jury also could have seen pre-prepping as a
sign of Melgen’s willful choice to treat the vast majority of his patients for ARMD,
whether or not it was medically necessary. The scope of the scheme was easily
enough for the jury to conclude that Melgen had engaged in systematic fraud,
rather than committing isolated mistakes. We find the evidence sufficient to
uphold the jury’s verdict.
And because the district court did not commit errors in its evaluation of the
evidence, those non-errors cannot lead to the application of the cumulative error
doctrine. We affirm Melgen’s conviction on all counts.
VI.
Before addressing Melgen’s sentence, we turn to his requests for a new trial
under Brady and Federal Rule of Criminal Procedure 33. First, the Brady claim.
Alleged Brady violations are reviewed de novo; it is the defendant’s burden to
show all the elements of a violation. United States v. Jones, 601 F.3d 1247, 1266
(11th Cir. 2010). To succeed on his Brady argument, Melgen must show that
(1) the government possessed evidence favorable to him; (2) he did not possess the
evidence and could not obtain the evidence with any reasonable diligence; (3) the
prosecution suppressed the favorable evidence; and (4) had the evidence been
disclosed to him, there is a reasonable probability that the outcome would have
been different. Vallejo, 297 F.3d at 1164.
In denying Melgen’s motion for a new trial on this basis, the district court
explained that the “information upon which Defendant relies was not newly
discovered, and assuming it was, it probably would not have changed the outcome
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of the trial.” We agree. The main piece of purported Brady evidence was a
statement that a witness for the government, Dr. Berger, made during sentencing.3
The content of the statement was the medical fact that the use of an anti-VEGF
drug could control leakage of wet ARMD, hiding signs of the disease. That is not
the kind of evidence that could not have been obtained before trial—it is medical
testimony that Melgen could have introduced himself with a variety of medical
witnesses. Perhaps recognizing that fact, Melgen claims that the new evidence is
not the contention itself but that one of the government’s witnesses agreed with the
contention. But this inappropriately focuses on the who, rather than the what, of
the testimony—which does not satisfy Brady’s requirement that the evidence be
unobtainable without reasonable diligence. Melgen could have asked any of the
government’s witnesses if they agreed with that point during trial, or called his
own witnesses. Really, the mere fact that a particular government witness agreed
with a fact that Melgen finds useful to his defense is not “new evidence.” Nor is it
likely, in light of all the evidence, that Berger’s opinion would have changed the
outcome at trial.
Melgen also asked for a new trial under Rule 33. But relief under that Rule
cannot be predicated on supposed new evidence that merely is impeaching. United
States v. DiBernardo, 880 F.2d 1216, 1224 (11th Cir. 1989). The district court did
not err in denying Melgen’s motion for a new trial under Rule 33 because the
3
Melgen possessed another piece of purported Brady evidence, an internal e-mail from within
CMS, before trial began—which automatically defeats his Brady claim. See Felker v. Thomas,
52 F.3d 907, 910 (11th Cir. 1995) (no Brady violation where the defendant knows or should have
known of the allegedly exculpatory information before trial).
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“new” evidence was merely evidence that might, at best, have been used as weak
impeachment evidence against the government’s witnesses.
VII.
Melgen next appeals his sentence as procedurally and substantively
unreasonable. We review the reasonableness of a sentence under an abuse-of-
discretion standard. United States v. Irey, 612 F.3d 1160, 1188–89 (11th Cir.
2010) (en banc). In reviewing a sentence for reasonableness, we first consider
whether the district court committed any significant procedural error, and next
consider whether the sentence was substantively reasonable. Gall v. United States,
552 U.S. 38, 51 (2007). The party challenging the sentence bears the burden to
show that the sentence is unreasonable considering the record and the § 3553(a)
factors. United States v. Tome, 611 F.3d 1371, 1378 (11th Cir. 2010). Those
factors include the need to reflect the seriousness of the offense, promote respect
for the law, provide just punishment for the offense, deter criminal conduct, and
protect the public from the defendant’s future criminal conduct. See 18 U.S.C.
§ 3553(a)(2). After evaluating for reasonableness, we will only vacate a
defendant’s sentence if left with the firm conviction that the district court
committed clear error in weighing the § 3553(a) factors and imposing a sentence
outside the range of reasonable sentences based on the facts. Irey, 612 F.3d at
1190.
Here, the district court did not commit procedural error in determining
Melgen’s sentence. Melgen’s procedural challenge hinges on several
determinations that went into the district court’s loss calculation. We review a
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district court’s determination of the loss amount under the Sentencing Guidelines
for clear error. United States v. Baldwin, 774 F.3d 711, 727 (11th Cir. 2014). We
will conclude that a finding of fact is clearly erroneous only we are “left with a
definite and firm conviction that a mistake has been committed.” United States v.
Pierre, 825 F.3d 1183, 1191 (11th Cir. 2016) (quoting United States v.
Rothenberg, 610 F.3d 621, 624 (11th Cir. 2010)). Because the district court is in a
unique position to assess the evidence and estimate the loss based upon that
evidence, its loss determination is entitled to appropriate deference.
U.S.S.G. § 2B1.1 cmt. n.3(C). The Sentencing Guidelines define “loss” as the
greater of “actual” loss or “intended” loss. Id. § 2B1.1 cmt. n.3(A). “Actual loss”
is defined as the reasonably foreseeable pecuniary harm that resulted from the
offense, and “intended loss” is defined as the pecuniary harm that was intended to
result from the offense, including pecuniary harm that would have been impossible
or unlikely to occur. Id. Losses that insurance companies and patients sustain that
result from Medicare fraud are “relevant conduct that may be considered by the
district court when calculating the amount of loss.” Hoffman-Vaile, 568 F.3d at
1344.
Here, the district court did not clearly err in calculating the loss amount.
The government presented enough evidence that the sample patient group was
sufficiently representative of Melgen’s patient population between 2010 and 2012
for the district court to make a reasonable estimate based on that sample. And
those years are only a portion of the timeframe covering Melgen’s scheme—
suggesting that he surely obtained even more Medicare funds than the district court
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accounted for. Melgen’s expert witness conceded that, while the government was
missing the “seed” number that was used by a computer program to generate that
sample, there was no reason to question the functionality of that program. The
district court was also entitled to consider both the 80% of treatment cost that
Medicare ordinarily pays as well as the 20% that has to be covered by other
payment sources. Id. at 1343–44.
Finally, the district court did not clearly err in reaching its final loss
determination, despite Melgen’s argument that some patients in fact had diseases
that required treatments for which Medicare would have offered some degree of
reimbursement. Again, the district court need only reach a reasonable estimate of
loss. Under the commentary to the Guidelines, when a defendant is convicted of a
federal healthcare offense involving a government healthcare program, the
aggregate dollar amount of fraudulent bills constitutes prima facie evidence of the
amount of the intended loss, if not rebutted. U.S.S.G. § 2B1.1 cmt. n.3(F)(viii).
The district court did not err in concluding that Melgen had failed to rebut the
prima facie evidence of loss.4 As the court stated, the “mere fact that Defendant’s
treatment could have possibly benefitted another condition his patients may have
had, but which he did not indicate he was treating, is insufficient to rebut the
government’s proof. It is pure speculation that any of Defendant’s patients who
were improperly diagnosed and treated for conditions that they did not have
actually benefitted from the treatments they did receive.” Cf. United States v.
4
For similar reasons, we reject Melgen’s brief suggestion that the district court clearly erred by
declining to consider amounts that he may have repaid during the civil multi-dosing litigation.
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Dehaan, 896 F.3d 798, 808 (7th Cir. 2018) (treating amounts paid by Medicare to
a fraudulent provider as a loss even though some of the physician’s patients may
have qualified for treatment).
Nor was Melgen’s (below-Guidelines) sentence substantively unreasonable.
In considering the substantive reasonableness of a sentence, we consider the
totality of the circumstances and whether the sentence achieves the sentencing
purposes stated in § 3553(a) and described above. United States v. Sarras, 575
F.3d 1191, 1219 (11th Cir. 2009). “A district court’s sentence need not be the
most appropriate one, it need only be a reasonable one.” Irey, 612 F.3d at 1191.
Here, the court expressly considered Melgen’s “age,” his “lack of criminal
history,” and his “medical conditions” before concluding that Melgen deserved a
downward variance to 204 months but no further. In light of the extent of
Melgen’s fraudulent scheme, the sentence the district court imposed was more than
reasonable.
AFFIRMED.
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