United States v. Editha Manzano ( 2019 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0547n.06
Case No. 18-2318
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Oct 29, 2019
UNITED STATES OF AMERICA, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
EDITHA MANZANO, ) MICHIGAN
)
Defendant-Appellant. )
BEFORE: GUY, BUSH, and MURPHY, Circuit Judges.
MURPHY, Circuit Judge. Most home health agencies perform a valuable function. They
provide nursing or therapy services to homebound patients at their homes, thereby relieving the
patients of the burden to travel to medical facilities for care. In this case, however, Editha Manzano
operated her home health agency, Anointed Care Services, for a different purpose—to defraud
Medicare. She asserts various constitutional and evidentiary challenges to her fraud convictions.
We affirm.
I.
The federal Medicare program pays medical providers for “home health services,” which
include skilled nursing, physical therapy, occupational therapy, and speech and language
pathology services. These home health services are more labor-intensive than similar services
No. 18-2318, United States v. Manzano
provided in medical facilities, so the Medicare program typically reimburses them at a higher rate.
Yet Medicare allows home health agencies to provide the services only to qualifying patients who
have difficulty getting out of their homes. For a patient to receive the services, then, a physician
must certify that the patient needs them and that the patient is “homebound.”
Before 2013, Editha Manzano worked as the director of nursing at a home health agency
called Alpha. She convinced Mark Buenaflor, a physical therapist, to take a job there. Buenaflor
soon realized that Alpha was defrauding Medicare because only a few of his patients needed home
health services and most were not homebound. Dr. Roberto Quizon acted as the physician referral
source for Alpha. Alpha would identify potential “patients” for home health services, he would
“refer” those patients to Alpha, and Alpha would pay him a fee for each referred patient. Quizon
certified practically all of Alpha’s patients for home health services, but he believed that only a
tiny fraction needed them.
In 2013, Manzano told Buenaflor that she wanted to leave Alpha because she did most of
the work but did not receive enough of the money. She thus acquired Anointed Care Services with
Liberty Jaramillo (her romantic partner) and Buenaflor. Manzano was the president, Jaramillo was
the vice president, and Buenaflor managed physical-therapy services. Operations continued at
Anointed largely as they had at Alpha. Manzano and Buenaflor brought many of their former
Alpha patients to Anointed. Many of these patients did not, in fact, need home health services.
Manzano also convinced Dr. Quizon to take the title of “medical director” at Anointed and to refer
patients to that company, again in return for a per-patient fee.
To get patients to participate, Manzano paid them cash. Monica Simmons was a typical
patient. She met with Manzano on several occasions to sign blank Medicare forms in exchange
for $100. Even though Simmons signed up for home health services, she had no trouble leaving
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her home. So she refused services when Anointed staff came to provide them. Other patients told
similar stories about their interactions with Anointed. They signed blank forms in exchange for
money to obtain home health services that they did not need (and often did not receive). To help
track down new patients, Manzano also paid patient “recruiters” a per-patient fee.
From November 2013 to April 2016, Anointed received over $1.5 million in payments
from Medicare. A citizen eventually complained about Anointed, and the FBI began an
investigation. The FBI seized various pieces of incriminating evidence from Anointed’s offices,
including nursing-visit notes that were pre-signed by patients but otherwise blank.
In 2016, the United States indicted Manzano. It charged her with one count of conspiracy
to commit healthcare fraud in violation of 18 U.S.C. § 1349, one count of conspiracy to pay
healthcare kickbacks in violation of 18 U.S.C. § 371, and three counts of healthcare fraud in
violation of 18 U.S.C. § 1347. Buenaflor, Quizon, Anointed staff, patients, and patient recruiters
all testified about the fraud. A jury convicted Manzano on all counts. The court sentenced her to
a total term of 84 months’ imprisonment. She now appeals.
II.
Manzano asserts that the government committed misconduct—so much so that it violated
the Due Process Clause—through several alleged evidentiary errors: (1) eliciting improper opinion
testimony from lay witnesses; (2) using prior “bad acts” evidence; and (3) asking questions that
generated irrelevant answers.
We could make short work of this claim if it were based on the Constitution alone. The
government does not violate the Due Process Clause every time it violates a Federal Rule of
Evidence. See, e.g., Key v. Rapelje, 634 F. App’x 141, 148 (6th Cir. 2015); Wade v. White,
120 F. App’x 591, 594 (6th Cir. 2005). Those rules exist to provide protections greater than the
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constitutional floor. And it disserves defendants to highlight lofty constitutional claims at the
expense of ordinary rules-based arguments, because the former typically require a much more
demanding showing than the latter. As another court has said, “[l]awyers all too often invoke the
Constitution as if it were a panacea and bypass seemingly mundane arguments based on statutes
and regulations. Mimicking Gresham’s Law, flabby constitutional generalities drive out sound
legal points.” United States v. Vargas, 915 F.3d 417, 420 (7th Cir. 2019) (citation omitted).
This case provides an example. A claim that prosecutorial misconduct violated the Due
Process Clause generally requires flagrant improprieties that are extensive and intentional.
Compare Berger v. United States, 295 U.S. 78, 84–89 (1935), and United States v. Acosta, 924
F.3d 288, 299–309 (6th Cir. 2019), with Darden v. Wainwright, 477 U.S. 168, 179–82 (1986).
Even when, for example, a prosecutor made repeated inflammatory comments—such as calling
the perpetrator of the crime an “animal”—the Supreme Court held that the remarks did not rise to
the level of a constitutional violation. Darden, 477 U.S. at 179–82, 180 n.12. In this case,
Manzano’s alleged evidentiary errors—even when considered collectively—fall well short of this
high bar. “Asking questions that call for answers that may be deemed inadmissible on relevancy
grounds does not amount to prosecutorial misconduct that rises to the level of a due-process
violation.” Simmons v. Woods, No. 16-2546, 2018 WL 618476, at *4 (6th Cir. Jan. 30, 2018).
Giving Manzano the benefit of the doubt, we assume that she also independently asserts
violations of the Federal Rules of Evidence. Where, as here, a defendant fails to object to an
evidentiary ruling in the district court, we will review the ruling only for plain error. See United
States v. Young, 847 F.3d 328, 349 (6th Cir. 2017). The defendant must show that “(1) an error
occurred in the district court; (2) the error was obvious or clear; (3) the error affected defendant’s
substantial rights; and (4) this adverse impact seriously affected the fairness, integrity, or public
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reputation of the judicial proceedings.” United States v. Henry, 545 F.3d 367, 376–77 (6th Cir.
2008) (citation omitted). “Only in exceptional circumstances in which the error is so plain that the
trial judge and prosecutor were derelict in countenancing it will this court reverse a conviction
under the plain-error standard.” Id. at 377 (citation omitted).
We now turn to each of the three alleged evidentiary errors.
1. Lay Opinions. Manzano initially asserts that the government wrongly introduced lay
opinion testimony in violation of Rule 701 of the Federal Rules of Evidence. That rule permits a
nonexpert to give an opinion if it is “rationally based on the witness’s perception”; “helpful to
clearly understanding the witness’s testimony or to determining a fact in issue”; and “not based on
scientific, technical, or other specialized knowledge within the scope of Rule 702.” Fed. R. Evid.
701(a)–(c). “In applying Rule 701, the modern trend among courts favors the admission of opinion
testimony, provided that it is well founded on personal knowledge and susceptible to specific
cross-examination.” United States v. Harris, 786 F.3d 443, 446 (6th Cir. 2015) (citation omitted).
Unlike expert testimony, lay testimony “results from a process of reasoning familiar in everyday
life.” United States v. White, 492 F.3d 380, 401 (6th Cir. 2007) (citation omitted). Such testimony
is “helpful within the meaning of Rule 701 when the witness has enjoyed significantly more time
to study and compare the evidence than the jury.” Harris, 786 F.3d at 448 (citation omitted).
We see no “obvious” error in the admission of the challenged testimony. Henry, 545 F.3d
at 376. First, Manzano criticizes the testimony of two individuals involved in Anointed’s affairs—
Buenaflor (the former owner) and Laura Garland (a physical therapist). Both witnesses described
the differences between “legitimate” and “fraudulent” home health agencies, and indicated that
Anointed fell on the fraudulent side because it paid patients and charged for visits that did not
occur. The district court did not plainly err in allowing this testimony. The court could reasonably
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conclude that Buenaflor’s and Garland’s testimony was “rationally based on [their] perception.”
Fed. R. Evid. 701(a). Both were licensed physical therapists who had worked at other home health
agencies before they pleaded guilty to conspiring to commit healthcare fraud at Anointed. The
court also could reasonably conclude that this information would be helpful to the jury in
determining what home health agencies may and may not do. Fed. R. Evid. 701(b); see United
States v. Kpohanu, 377 F. App’x 519, 525–26 (6th Cir. 2010). And the court could reasonably
conclude that this opinion testimony—that it was fraudulent to charge for services that were not,
in fact, performed—was not based on any “specialized knowledge.” Fed. R. Evid. 701(c); see
United States v. Kerley, 784 F.3d 327, 336–40 (6th Cir. 2015).
Second, Manzano challenges the testimony of Kathleen Heuertz, who worked for a
Medicare contractor that investigates healthcare fraud. She says that Heuertz gave improper lay
opinions about various fraud “red flags” (such as patients who get recertified for more than one
course of treatment) and about the meaning of legal terms (such as “homebound” or “kickback”).
This argument presents a closer question. Compare Kerley, 784 F.3d at 336–40, with White, 492
F.3d at 400–04. On the one hand, we have said that “[t]he Medicare program operates within a
complex and intricate regulatory scheme and we cannot say that the average lay person, including
any Medicare beneficiary, commands a working knowledge of Medicare reimbursement
procedures.” White, 492 F.3d at 403. On the other, Heuertz’s testimony involved less complicated
subjects than those discussed by the fiscal-intermediary auditors in White. See id. at 399–400.
Regardless, the admission of this testimony did not affect Manzano’s “substantial rights.” Henry,
545 F.3d at 376. Much of Heuertz’s testimony provided simple background facts (not opinions)
about the Medicare program. See Young, 847 F.3d at 351. And the government presented
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“overwhelming evidence” of Manzano’s guilt, including testimony from many of her coworkers
at Anointed and from patients and patient recruiters. See White, 492 F.3d at 405.
Third, Manzano challenges a portion of FBI Special Agent Andrew Crump’s testimony
about the evidence recovered from a search of Anointed. Crump described the nursing-visit notes
that patients had pre-signed as a fraud “red flag.” The district court did not commit “obvious”
error in allowing this testimony. Henry, 545 F.3d at 376. The “indicators of fraud” that Crump
described were within his personal knowledge and required no specialized knowledge. See United
States v. Variste, 625 F. App’x 458, 459–60 (6th Cir. 2015).
2. “Bad Acts” Evidence. Manzano next challenges the government’s use of evidence about
her prior work at Alpha. Federal Rule of Evidence 404(b)(1) generally bars the government from
introducing evidence of a defendant’s prior “bad acts” to show that it was more likely that the
defendant committed the crime at issue. See United States v. Potter, 927 F.3d 446, 452 (6th Cir.
2019). Yet an exception allows the government to use this evidence for other purposes—to prove
“motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of
accident.” Fed. R. Evid. 404(b)(2). Here, even if the evidence concerning fraud at Alpha falls
within Rule 404(b)(1)’s ban, the district court did not commit “obvious” error in finding it
admissible under Rule 404(b)(2)’s exception. Henry, 545 F.3d at 376. We have already
recognized that close-in-time fraud at other medical facilities may show the defendant’s intent to
participate in the indicted healthcare fraud. See United States v. De Oleo, 697 F.3d 338, 343 (6th
Cir. 2012). That same logic applies here.
In response, Manzano calls this Alpha evidence irrelevant. Not so. “[A]s evidence experts
have long recognized, a prior ‘bad act’ satisfies the relevancy test’s low bar even when used to
show a person’s propensity to commit the indicted crime,” which is “why a separate rule” (Rule
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404(b)) regulates the use of “bad acts” evidence. Potter, 927 F.3d at 452 (citing 1 John H.
Wigmore, Evidence in Trials at Common Law § 55, at 122–23 (1st ed. 1904)). Manzano next says
that the probative value of this evidence was outweighed by its potential for unfair prejudice under
Rule 403. But the evidence was highly probative in that it was “both similar to, and close in time
with, the indicted conduct.” Id. Indeed, Manzano brought many of the same fraudulent patients
and patient recruiters from Alpha to Anointed. And given the relatively infrequent attention that
the government paid to Alpha during the trial, we cannot say that the risk of unfair prejudice was
“clear.” Henry, 545 F.3d at 376.
3. Improper Bolstering. Manzano lastly argues that the prosecutor improperly asked
Special Agent Crump to describe the process for seeking the warrant used to search Anointed
because it led the agent to discuss irrelevant matters—the need for probable cause and for a judge’s
approval to obtain a warrant. That discussion, Manzano adds, would have improperly bolstered
the jury’s perception of the government’s case.
We again see no “obvious” error from this short exchange between the prosecutor and
Agent Crump. Henry, 545 F.3d at 376. Under the relevancy rules, “[e]vidence which is essentially
background in nature . . . is universally offered and administered as an aid to understanding.” Fed.
R. Evid. 401 advisory committee’s note to 1972 proposed rules. And courts have found that a
witness’s discussion of the “investigative process” falls within this general principle. United States
v. Littlewind, 680 F. App’x, 496, 498 (8th Cir. 2017) (per curiam); see also Young, 847 F.3d at
351–52; United States v. Allen, 403 F. App’x 800, 802 (4th Cir. 2010) (per curiam). Here, the
district court could reasonably conclude that Crump’s testimony described relevant background
facts (under Rules 401 and 402) and did not unduly prejudice Manzano (under Rule 403).
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To support her contrary claim, Manzano cites a single case: Fair v. Franklin County, No.
98-4237, 2000 WL 659418 (6th Cir. May 11, 2000). There, an officer testified about the meaning
of probable cause (not the need for probable cause) during a civil-rights trial in which the presence
or absence of probable cause was the critical question (not a background fact). Id. at *1–2.
Ultimately, the court did not even opine on whether the district court had properly allowed this
officer testimony because it found the testimony harmless in any event. Id. at *4.
III.
Alternatively, Manzano argues that her trial counsel provided ineffective assistance in
violation of the Sixth Amendment. She alleges that her counsel had a conflict of interest because
he represented her while under investigation by the State Bar of Michigan for another matter. She
also contends that her counsel wrongly failed to raise the evidentiary objections that she now
asserts on appeal. To support these claims, Manzano asks us to take judicial notice of her counsel’s
90-day suspension and of her daughter’s affidavit describing his allegedly improper representation.
“[A]s a general rule, ineffective-assistance claims ‘are best brought by a defendant in a
post-conviction proceeding under 28 U.S.C. § 2255 so that the parties can develop an adequate
record on the issue.’” United States v. Buchanan, 933 F.3d 501, 513 (6th Cir. 2019) (citation
omitted). We review these claims on direct appeal only in “rare circumstances,” United States v.
Sypher, 684 F.3d 622, 626 (6th Cir. 2012), because the record is typically not “adequately
developed,” United States v. Hall, 200 F.3d 962, 965 (6th Cir. 2000). When an ineffective-
assistance claim hinges on evidence outside the record, a § 2255 motion allows the defendant to
introduce the evidence in the district court “in the first instance.” Sypher, 684 F.3d at 626.
A defendant, by contrast, takes a big risk by raising an ineffective-assistance claim on direct appeal
that requires further factual development to have any chance of success. If we were to reject the
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claim on the merits based on the inadequate record, the defendant generally cannot relitigate the
claim again in a later § 2255 motion. See Jones v. United States, 178 F.3d 790, 796 (6th Cir.
1999); cf. United States v. Flores, 739 F.3d 337, 341–42 (7th Cir. 2014).
Our general rule—reserving ineffective-assistance claims for a § 2255 motion—is the
proper course here. Manzano’s attempt to introduce new evidence on appeal confirms that her
claims require further factual development. So we decline to consider the claims now. That
decision keeps the door open for Manzano to pursue them “through the more traditional method
of a collateral proceeding.” United States v. Walden, 625 F.3d 961, 967 (6th Cir. 2010).
We affirm the district court’s judgment and deny Manzano’s motion to take judicial notice.
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