United States v. Benjamin Martinez
921 F.3d 452
5th Cir.2019Background
- From 2008–2010, Pogosyan and Shakhbazyan operated three Houston-area clinics that billed Medicare for thousands of claims; doctors Nguyen, Martinez, and Simmons served as nominal "Medical Directors."
- Clinics recruited patients through paid marketers; patients were often coached and paid cash kickbacks; some clinic staff were unlicensed and fabricated test results.
- Large numbers of claims were submitted for specialized "rectal tests" (anal EMG, anorectal manometry, rectal sensation) that experts and patients testified were not performed; Medicare paid over $3.3 million on ~39,608 claims.
- Defendants were indicted on a 52-count indictment: conspiracy to commit health care fraud (18 U.S.C. § 1349), multiple substantive § 1347 health-care-fraud counts, § 1957 monetary-transaction counts, and Bagoumian also for an anti-kickback conspiracy.
- At a nine-day trial, all four defendants were convicted; district court imposed prison terms (51–87 months) and substantial restitution; defendants appealed challenging sufficiency, jury instructions, exclusion of reverse 404(b) evidence, and Bagoumian’s sentence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for conspiracy and substantive health-care-fraud counts | Gov't: circumstantial evidence (files, payments, patient and expert testimony, destroyed records) supports convictions | Defendants: lacked knowledge of fraud; some substantive counts lacked patient/expert proof of nonperformance or lack of necessity | Affirmed: ample circumstantial evidence supported conspiracies, substantive counts (esp. rectal tests); non-rectal claims were supported by files, testimony, patterns, and spoliation evidence |
| 18 U.S.C. § 1957 monetary-transaction convictions | Gov't: account deposits and withdrawals tied to Medicare fraud support § 1957 counts | Defendants: commingling/clean-funds problem and signature authenticity raise doubt | Affirmed: accounts were essentially exclusively Medicare proceeds; aggregate withdrawals and other evidence satisfied elements |
| Jury instruction on deliberate ignorance / knowledge and request for good-faith instruction | Gov't: instruction (or a willful blindness instruction) appropriate given evidence of deliberate avoidance | Defendants: court’s specially-crafted instruction muddled/ lowered knowledge standard; requested good-faith instruction omitted | Court: instruction was confusing (error) but harmless; denial of separate good-faith instruction not reversible because specific-intent instruction and defense argument sufficed |
| Admission of reverse 404(b) evidence (Arizona scheme) | Defendants: evidence that prior scheme showed principals had duped other doctors would have shown lack of knowledge | Gov't: evidence marginal and attenuated; principals could be called but were not | Affirmed: district court did not abuse discretion excluding attenuated, collateral evidence about different-case investigations |
Key Cases Cited
- Ganji v. United States, 880 F.3d 760 (5th Cir.) (standard for reviewing sufficiency of the evidence)
- Barson v. United States, 845 F.3d 159 (5th Cir.) (similar health-care-fraud scheme; guidance on inferences of knowledge)
- Evans v. United States, 892 F.3d 692 (5th Cir.) (medical-prescription sufficiency and file-based proof)
- Sanjar v. United States, 876 F.3d 725 (5th Cir.) (no categorical rule requiring expert testimony for medical-necessity findings)
- Hickman v. United States, 331 F.3d 439 (5th Cir.) (each insurance claim may constitute separate execution under § 1347)
- Akpan v. United States, 407 F.3d 360 (5th Cir.) (sufficiency without expert testimony when timing/attendance contradictions are decisive)
- Ekanem v. United States, 555 F.3d 172 (5th Cir.) (inferring fraud from delivery of different equipment than billed)
- Fuchs v. United States, 467 F.3d 889 (5th Cir.) (elements and review standards for § 1957 convictions)
- Stanford v. United States, 823 F.3d 814 (5th Cir.) (instructional-error standards; distinguishing harmlessness vs. structural error)