United States v. Galatis
2017 U.S. App. LEXIS 3397
| 1st Cir. | 2017Background
- Michael Galatis owned and operated At Home VNA (AHVNA), a Medicare-participating home health agency that billed Medicare about $27.6 million in claims (≈$19.9M paid to AHVNA).
- AHVNA nurses and staff testified they were instructed to recruit Medicare patients aggressively, misstate OASIS Form responses and nurses’ notes, and continue visits for patients who should have been discharged.
- Dr. Spencer Wilking, AHVNA’s medical director, routinely signed Form 485 certifications without examining patients; he later pled guilty to Medicare fraud for that conduct and testified for the government at Galatis’s trial.
- Galatis was convicted by a jury of conspiracy to commit healthcare fraud (18 U.S.C. § 1349), healthcare fraud (18 U.S.C. § 1347), and money laundering (18 U.S.C. § 1957); sentenced to 92 months’ imprisonment, fine, and restitution; convictions affirmed on appeal.
- On appeal Galatis raised three trial-error claims: (1) failure to give a sua sponte limiting instruction regarding Dr. Wilking’s guilty plea; (2) improper admission of lay and expert testimony about Medicare regulatory terms; and (3) refusal to give a preferred jury instruction about the face-to-face encounter certification requirement.
Issues
| Issue | Plaintiff's Argument (Galatis) | Defendant's Argument (U.S.) | Held |
|---|---|---|---|
| Admission of co-defendant’s guilty plea without limiting instruction | District court should have given sua sponte limiting instruction; absence prejudiced Galatis | Evidence of Wilking’s plea was proper; used to assess witness credibility; no limiting instruction required absent request | No plain error: no sua sponte duty; any error did not affect substantial rights given overwhelming evidence and proper uses of plea testimony |
| Lay witness testimony about Medicare terms | Lay/extrinsic testimony improperly stated legal meanings of regulations | Lay witnesses offered permissible experiential testimony about observed facts and perceptions; court cautioned jury that law is for judge | No abuse of discretion: Rule 701 permits lay testimony reflecting personal perceptions; testimony did not state law to jury |
| Expert testimony describing regulatory regime and terms | Expert improperly opined on legal meaning of regulations and usurped judge’s role | Expert limited to explaining regulatory framework from investigative experience and did not apply law to facts or state legal conclusions | No abuse of discretion: testimony admissible under Rule 702 and consistent with court’s pretrial limits |
| Refusal to give requested instruction on face-to-face encounter (including qualified non-physicians) | Requested instruction would support good-faith defense by showing broader, objectively reasonable interpretation | No evidence supported that qualified non-physicians performed encounters or that Galatis had factual basis for that defense | No legal error: requested instruction not supported by evidence and thus properly refused; defendant not entitled to instruction without evidentiary support |
Key Cases Cited
- United States v. Rodriguez, 759 F.3d 113 (1st Cir.) (plain-error standard for unpreserved claims)
- United States v. Duarte, 246 F.3d 56 (1st Cir. 2001) (plain-error four-part test)
- United States v. Dworken, 855 F.2d 12 (1st Cir. 1988) (closing-argument review; limiting instructions given in that case)
- United States v. Foley, 783 F.3d 7 (1st Cir. 2015) (admission of associate’s guilty plea accompanied by limiting instruction reviewed for abuse of discretion)
- United States v. Torres-Colón, 790 F.3d 26 (1st Cir.) (use of cooperator’s plea to support credibility permissible)
- United States v. Prigmore, 243 F.3d 1 (1st Cir. 2001) (defendants entitled to jury instructions construing law in light most favorable to defense theory, subject to evidentiary support)
- United States v. Vega, 813 F.3d 386 (1st Cir. 2016) (Rule 701 permits lay testimony based on personal knowledge and perception)
- United States v. Weekes, 611 F.3d 68 (1st Cir. 2010) (abuse-of-discretion standard for admitting testimony about law)
- United States v. Lopez-Lopez, 282 F.3d 1 (1st Cir. 2002) (requested jury instruction must have sufficient evidentiary support)
- United States v. Figueroa-Lugo, 793 F.3d 179 (1st Cir.) (standard for reviewing preserved jury-charge legal errors)