United States v. Zemlyansky
945 F. Supp. 2d 438
S.D.N.Y.2013Background
- Indictment charges 36 defendants with conspiracy to commit racketeering, health care fraud, mail fraud, and money laundering in a No-Fault scheme.
- Court heard multiple pretrial motions; oral argument held April 19, 2013.
- Motion to suppress evidence seized from Tri-State Billing Corp. is granted; other motions denied.
- Indictment relies on a “fraudulent incorporation” theory regarding ownership/control of No-Fault clinics and related PCs.
- New York No-Fault Law requires reimbursement to insurers subject to licensing; NY regulations permit insurers to deny payments when clinics are not properly owned/operated by licensed professionals; NY cases address ownership, control, and fraud concerns.
- Court analyzes whether the alleged fraudulent ownership representations on NF3 forms and related ownership schemes constitute actionable fraud and cognizable property interests under federal law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is fraudulent incorporation theory legally sufficient for mail/health care fraud? | Zayonts, Danilovich, Kremerman insist theory lacks misrepresentation or injury. | Defendants argue no affirmative misrepresentation or cognizable injury; ownership ambiguity. | Denied; theory survives pretrial scrutiny as to misrepresentation and injury. |
| Was Tri-State search warrant constitutionally deficient (particularity/overbreadth) to warrant suppression? | Prosecution argues warrant sufficiently tied to offenses and investigation. | Warrant was overbroad, lacked temporal limits, and failed to incorporate the affidavit. | Granted; suppression of Tri-State evidence warranted. |
| Does good faith attempt save evidence seized under a defective warrant (Rosa/Herring framework)? | Government contends good faith should save despite defects. | Defects were not isolated; officers relied on defective warrant and briefing. | Denied; good faith exception does not apply to Tri-State search. |
| Was wiretap minimization properly conducted post-Sukhman cooperation? | Minimization steps were adequate, and continued interception justified. | Certain calls (private) should have been minimized more strictly. | Denied; overall minimization deemed reasonable; wiretap evidence admissible. |
| Should certain discovery/Rule 16/Brady materials be compelled? | Defendants seek broader disclosure of Brady/Giglio/Rule 404(b) materials. | Requests for additional disclosure; defense rights require timely production. | Denied; Government to comply per prior representations; motions denied as to scope. |
Key Cases Cited
- United States v. Velastegui, 199 F.3d 590 (2d Cir. 1999) (assimilates pretrial indictment sufficiency standards)
- United States v. Alfonso, 143 F.3d 772 (2d Cir. 1998) (indictment sufficiency and Rule 12 standards)
- Groh v. Ramirez, 540 U.S. 551 (U.S. 2003) (requires incorporation of affidavits by reference to cure warrant defects)
- Herring v. United States, 555 U.S. 135 (U.S. 2009) (good faith exception limits when warrant facially deficient but conduct is culpable)
- United States v. George, 975 F.2d 72 (2d Cir. 1992) (particularity and notice requirements for warrants)