United States v. Gieger ( 1999 )

REVISED, October 19, 1999
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
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No. 98-60137
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JEFFERY W. GIEGER; TRACIE L. GIEGER,
Defendants-Appellants.
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Appeals from the United States District Court
For the Southern District of Mississippi
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September 24, 1999
Before REYNALDO G. GARZA, HIGGINBOTHAM, and DAVIS, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Defendants-Appellants Jeffery W. Gieger and Tracie L. Gieger
(the “Giegers”) challenge on a number of grounds their convictions
for conspiracy to submit false claims to Medicare in violation of
18 U.S.C. § 286. For the reasons that follow, we affirm their
convictions. However, we vacate their sentences and remand this
case for resentencing.
I.
In 1992, the Giegers founded Gieger Transfer Service,
Inc./Gieger Ambulance Service (“GAS”) to transport both emergency
and non-emergency patients. GAS expanded rapidly and by the time
the company was sold in 1997, GAS operated over forty ambulances in
twelve counties in rural Southeastern Mississippi.
GAS transported a large number of Medicare patients. After
1993, GAS filed electronic reimbursement requests with Medicare.
GAS’s initial attempts to obtain reimbursement from Medicare did
not go smoothly. In response to this problem, the Giegers began
misrepresenting to Medicare that all of GAS’s non-emergency
transports were for “bed-confined” patients. Consistent with this
billing practice, the Giegers instructed their paramedics and
emergency medical technicians not to use the word “ambulatory” on
the patient transport reports.
In December 1996, the Federal Bureau of Investigations (“FBI”)
began investigating GAS’s billing practices. After FBI Special
Agent Gregory Deegan conducted an in-depth investigation, the
Giegers were charged in a fifty-seven count indictment. This
indictment included charges of Medicare fraud, conspiracy to submit
false claims, money laundering, transmitting money instruments or
funds derived from specified unlawful activities, and a number of
similar charges. In October 1997, the Giegers were tried on forty-
six counts of this indictment. The jury returned a guilty verdict
on only Count 1--conspiracy to submit false claims to Medicare in
violation of 18 U.S.C. § 286.1
At sentencing, the district court enhanced the Giegers'
sentences because the Geigers abused a position of trust and the
conspiracy involved a “vulnerable victim.” After the enhancement,
the district court sentenced the Giegers to eighty months in
1
Section 286 makes it illegal for any person to “enter into
any agreement, combination or conspiracy to defraud the United
States, or any department or agency thereof, by obtaining or
aiding to obtain the payment or allowance of any false, fictitious
or fraudulent claim.” 18 U.S.C. § 286.
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prison, three years of supervised release, a fine of $12,500, and
ordered restitution in the total amount of $228,917. In this
appeal both Jeffery and Tracie Gieger challenge their convictions
and sentences.
II.
Tracie Gieger makes a number of arguments on appeal. Jeffery
Gieger adopts these arguments and also makes arguments of his own.
We turn first to those arguments raised by Tracie Gieger.
A.
Tracie Gieger first contends that the district court erred in
denying her motion for judgment of acquittal, or in the alternative
a new trial, on Count 1, the conspiracy count, because of the
jury’s failure to convict her on any substantive counts.
In this Circuit, however, the law is clear that inconsistent
verdicts are not a bar to conviction so long as there is sufficient
evidence to support the jury’s determination of guilt. See, e.g,
United States v. Sylvester, 143 F.3d 923, 930 (5th Cir. 1998)
(inconsistent verdicts not a bar to conviction); United States v.
Scurlock, 52 F.3d 531, 537 (5th Cir. 1995) (jury can render
inconsistent verdicts, even when inconsistency is the result of
mistake or compromise). This argument is without merit.
B.
Tracie Gieger next argues that the district court made a
number of erroneous evidentiary rulings that require reversal of
her conviction. These include: improperly restricting defense
counsel’s cross-examination of key prosecution witnesses;
improperly overruling defense counsel’s objections during the
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prosecution’s direct examination of key witnesses; improperly
excluding the testimony of defense expert witness Archie Lancaster;
and imposing more stringent restrictions on the defense than on the
Government in examining witnesses. After examining the record, we
are satisfied that the district court did not abuse its discretion
in these challenged rulings.
C.
Mrs. Gieger also makes two challenges to her sentence. She
first contends that the district court erred in enhancing her
sentence and that of her former husband based on the “vulnerable
victim” and “position of trust” provisions in the Sentencing
Guidelines.
Section 3A1.1(b) of the Sentencing Guidelines permits a two
level enhancement of a defendant’s base offense level where “the
defendant knew or should have known that a victim of the offense
was unusually vulnerable due to age, physical or mental condition,
or that a victim was otherwise particularly susceptible to the
criminal conduct.” U.S. Sentencing Guidelines § 3A1.1(b). In this
case, the district court enhanced the Giegers’ sentences because
“the victims of this offense were unusually vulnerable due to age,
physical or mental condition and that the government as a victim
was otherwise particularly susceptible to the criminal conduct
committed by the defendant.” The Giegers contend that this
enhancement was not warranted because the patients were not victims
and the victim (the United States Government) was not vulnerable.
We agree.
First, the patients were not victims of the Giegers’ fraud
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scheme. In contrast to other medical fraud cases within this
Circuit in which patients suffered harm or at least potential harm
from the fraudulent scheme,2 the patients here suffered no harm.
Instead the patients benefitted from the scheme--they received a
free ride to the hospital.
If the patients had paid money through a deductible,
copayment or similar charge, they might be considered victims of
the fraud. See United States v. Bachynsky, 949 F.2d 722, 735 (5th
Cir. 1991) (patients were victims in part because they paid
personally for bogus treatment through copayments and deductibles).
The Government, however, points to no evidence that the GAS
patients ever made such payments. In fact, as part of the
fraudulent scheme, GAS promised patients that they would not be
required to make any payment. At oral argument, the Government
conceded that the patients were probably not victims of the scheme.
Because they suffered no medical harm and no financial harm, the
patients cannot be considered victims of the Giegers’ fraudulent
scheme.
We turn now to whether the vulnerable victim enhancement can
be applied to the government. Section 3A1.1 of the Sentencing
Guidelines is leveled at criminals who take advantage of
individuals who are more vulnerable than the average members of
society, such as the elderly, the young, or the sick. See, e.g.,
2
See United States v. Burgos, 137 F.3d 841, 844 (5th Cir.
1998) (Patients “were often admitted to the hospital needlessly or
their stays in the hospital were extended beyond what was necessary
. . . .”); United States v. Bachynsky, 949 F.2d 722, 735 (5th Cir.
1991) (Unnecessary treatment was frequently ineffective and in some
case actually harmful to the patients).
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United States v. Moree, 897 F.2d 1329, 1336 (5th Cir. 1990). The
United States government simply does not fall in the same category
as these more vulnerable members of society. If the United States
government is a vulnerable victim, it is hard to imagine a victim
who would not be considered vulnerable.
The prosecution relies almost entirely on a footnote in United
States v. Bachynsky, 949 F.2d 722 (5th Cir. 1991), in support of
this enhancement. In that opinion, a panel of this Court stated,
in dicta, “we note that in this particular case the insurance
companies and the Department of Defense may themselves be deemed
‘vulnerable’ victims because of their ‘particular susceptibility’
to this type of fraud.” Id. at 736 n.10. We find this dicta
unpersuasive and contrary to section 3A1.1’s text and we choose not
to follow it. Instead, we are guided by the rationale underlying
this Court’s opinions in Moree, 897 F.2d at 1335-36 (Section 3A1.1
would be triggered by the robbery of a blind, elderly, or
physically disabled shopkeeper but not by theft from a bank, even
if the thief was aware of a security breach that rendered the bank
especially vulnerable), and in United States v. Burgos, 137 F.3d
841, 844 (5th Cir. 1998), in which we stated that insurance
companies “are not, and could not have been found to be, vulnerable
victims.” Both the text of section 3A1.1 and these cases persuade
us that the United States government cannot be considered a
vulnerable victim. The district court therefore erred in enhancing
the Giegers' sentences on this basis.
Tracie Gieger also argues that the district court erred by
enhancing the Giegers’ sentences under section 3B.1.3 of the
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Guidelines for abusing a position of trust. This section provides
a two-level enhancement for defendants who have “abused a position
of public or private trust . . . in a manner that significantly
facilitated the commission or concealment of the offense.”
U.S.S.G. § 3B1.3. We agree with the Government that this argument
is barred by United States v. Iloani, 143 F.3d 921, 922-23 (5th
Cir. 1998). In Iloani we applied the enhancement to a chiropractor
convicted of defrauding insurers. Id. at 923. We held that a
chiropractor maintains a position of trust with the insurance
companies that he billed. Id. at 923. In the instant case, the
defendants carried out their fraud by abusing a similar position of
trust with medical insurers. Therefore, under Iloani, the district
court did not err in enhancing the Giegers’ sentences under section
3B1.3.
D.
Tracie Gieger’s final argument challenges the district court’s
order requiring that the Giegers pay $228,917 in restitution to
Medicare. She contends that because she was acquitted on all the
substantive counts, she cannot be required to pay restitution on
the conspiracy count. She also argues that because the district
court did not provide a specific factual basis for the restitution
order, the order must be vacated.
We find her arguments unpersuasive. The conspiracy count is
an adequate basis for the restitution order. The court based the
amount of the restitution order on the amount that Medicare paid on
the fraudulent billings. The restitution order has sufficient
support.
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III.
We now turn to the additional arguments raised by Jeffery
Gieger.
A.
Jeffery Gieger contends that his conviction cannot be upheld
because the evidence is legally insufficient. He argues first that
the Medicare guidelines are vague, confusing and conflicting and
the district court erred in rejecting his argument that as a matter
of law he did not knowingly submit false claims. We are not
persuaded. The words “bed confined” were not so vague or confusing
that Gieger was unable to discern their meaning.
We also reject Jeffery Gieger’s argument that he did not have
the state of mind necessary for conviction because he was merely
following the instructions provided by United Healthcare and
relying on the advice of his lawyer. The jury was entitled to find
that the Giegers had the requisite state of mind to commit the
offense.
Jeffery Gieger’s final argument on this issue is that his
claims were not “false” within the meaning of 18 U.S.C. § 286
because the two patients that the Government used at trial to
demonstrate the fraud were entitled to reimbursement of their
transportation charges by Medicare even if they were not bed-
confined. Gieger argues that both patients the government
presented as witnesses, Henry Bush and Annie Scott, were entitled
to reimbursement for their ambulance transportation on the
alternative ground that the transportation was medically necessary.
He further contends that the district court erred in refusing to
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permit the Giegers to submit evidence demonstrating their
eligibility on this alternative ground.
According to Mr. Gieger’s theory, a defendant cannot violate
section 286 so long as he transports patients whose transportation
is covered by Medicare because it is medically necessary, even if
he bases his reimbursement claim on another reason -- even a false
or fraudulent one.
We have found a number of cases rejecting arguments seeking a
similar construction of the companion statute to section 286 -- 18
U.S.C. § 287, the substantive federal false claims statute. Courts
have explained that because the language of section 287 (like 286)
covers not only those who submit “fraudulent” claims, but also
those who submit “false” or “fictitious” claims, a defendant may
not escape the reach of the statute by arguing that the government
was not actually defrauded. While a claim may not be fraudulent
under this section unless the defendant intends to obtain funds by
fraud from the federal government, a claim is false whenever it is
“known to be untrue by the person making it or causing it to be
made.” United States v. Milton, 602 F.2d 231,233 (9th Cir. 1979).
For example, in United States v. Belcker, 657 F.2d 629 (4th
Cir. 1981), the defendant contended that the trial court erred both
in excluding evidence that the government “got it’s money’s worth”
for consulting services performed by the defendant and in failing
to instruct the jury that to convict it must find that the
government did not receive adequate value for the work performed by
the defendant. Id. at 634. The Fourth Circuit rejected these
arguments, explaining that section 287, like 286, “is phrased in
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the disjunctive, and a conviction under that statute may therefore
be based on proof that a claim submitted to the government is
either false, fictitious or fraudulent.” Id.. Accordingly, the
court held that regardless of whether the government was actually
defrauded, the defendant had violated section 287 by knowingly
submitting inaccurate claim forms. Id. at 635. Accord United
States v. Milton, 602 F.2d 231, 233 (9th Cir. 1979)(statement need
only be false in order to violate section 287); cf. United States
v. Leahy, 82 F.3d 624, 634 n.11 (5th Cir. 1996)(holding that
defendant contractor violated section 286 even though the false
claims were irrelevant to the total amount paid by the government
to the contractor).
Furthermore, as a number of courts have recognized, Congress
fashioned the federal false claim statutes to punish not only those
who would cheat the federal government, but also those who would
“mislead it in the administration of its programs.” United States
v. White, 27 F.3d 1531, 1535 (11th Cir. 1994)(quoting United States
v. Johnson, 284 F. Supp. 273, 278 (W.D. Mo. 1968),discussing
section 287). See also United States v. Maher, 582 F.2d 842, 847-8
(4th Cir. 1978) (“The plain purpose of § 287 is to assure the
integrity of claims and vouchers submitted to the government.”);
Pina v. United States, 165 F.2d 890, 893 (9th Cir. 1948)(“the
contemplated infliction of monetary loss is not a necessary
ingredient of an intent to defraud the United States”). If we
accepted Gieger’s argument on this point, Medicare’s task of
determining which claims are covered and reimbursable would be an
impossible one. The reimbursement form would be useless for this
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purpose because the agency could not rely on the form to determine
coverage. We decline to endorse such an interpretation of sections
286 and 287.
Accordingly, we conclude that the evidence is legally
sufficient to support the Giegers’ convictions. We also conclude
that the district court did not abuse its discretion in excluding
the Giegers’ evidence related to this argument.
B.
Jeffery Gieger also contends that his conviction must be
overturned due to the inadequacy of the record. In support of his
claim, he observes that the district court failed to place on the
record seventy-two bench conferences, most of the bench conferences
from the trial.
Clearly many of these bench conferences should have been
placed on the record. Whether this error mandates reversal,
however, is a separate issue. The law relating to incomplete
records in this Circuit is set forth in United States v. Selva, 559
F.2d 1303 (5th Cir. 1977). Under Selva, an appellant must
generally show prejudice from omissions or errors in the record
before such lapses require reversal. Id. at 1305. If the
appellant, however, is represented on appeal by an attorney other
than the one who represented him at trial, no showing of prejudice
is required. Id. All that is required is that the appellant
demonstrate that the missing record portions are “significant and
substantial.” Id. at 1306.
The Government contends that Jeffery Gieger’s trial counsel,
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Sam Wilkins, is still his counsel because the court has not
released him from that position. But Wilkins did not file the
Notice of Appeal or make any other appearance in this court. Nor
does his name appear on any of the briefs. We must therefore
conclude that Jeffery Gieger is represented by new counsel on
appeal. For that reason, we examine the record and attempt to
decipher what took place at the missing bench conferences to
determine if they are “significant and substantial.” While the
entire context of all the bench conferences is not entirely clear,
we can determine the following. Many of the bench conferences were
administrative in nature. These conferences are not important to
the record on appeal. Some of the conferences were permitted to
allow further argument on evidentiary objections. Objections to
the court’s rulings following these bench conferences makes the
arguments leading up to the rulings unimportant to the record on
appeal. Other missing bench conferences concern counts on which the
Giegers were acquitted. In sum, while we agree with Jeffery Gieger
that many of these bench conferences should have been placed on the
record, we are not convinced that these bench conferences are
substantial and significant. We therefore decline to reverse the
Giegers’ convictions on this ground.
Conclusion
For the reasons stated above, we affirm Appellants’
convictions. We affirm Appellants’ sentence with one exception.
We agree with Appellants that their sentences should not have been
enhanced under the “vulnerable victim” provision of the Sentencing
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Guidelines. Therefore, we vacate Appellants’ sentences and remand
this case to the district court for resentencing.
AFFIRMED in part, VACATED in part, and REMANDED.
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