UNITED STATES of America, Plaintiff-Appellee, v. Sidney C. LAUGHLIN, Defendant-Appellant.
No. 93-6049
United States Court of Appeals, Tenth Circuit
June 16, 1994.
26 F.3d 1523
ENGEL, Senior Circuit Judge.
We feel that in the circumstances before us, Hedgecock does not apply. There is no contract language here supporting an award of the fees in PSC‘s suit for declaratory relief and damages. Moreover, we note that in Rhodes the suit was for a declaratory judgment and for the fees in defending the malpractice case in prosecuting the declaratory judgment action. The Colorado court said the “Plaintiff‘s action for declaratory judgment is a statutory rather than an equitable action.” 819 P.2d at 1062. The instant suit for declaratory relief and damages we likewise treat as essentially a declaratory judgment suit, and one where the insurance policy lacks language supporting an award of fees and costs for maintaining that declaratory suit. Hence the denial of such fees and costs by the trial judge was proper here.
Lastly PSC argues that equitable considerations support an award of the litigation expenses of PSC in this action. PSC complains of CNA‘s conduct as delaying the litigation and relies on the court‘s sanction powers, citing Chambers v. NASCO, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991). We reject this argument because it was not made below. In the Plaintiff‘s Memorandum Brief Regarding Attorney Fees, Appellee‘s Supp.App. II at 000133, et seq., PSC stated that the parties agree that this claim (for fees) is not based on any statute or on any tortious conduct by the insurance carrier; “that this claim arises solely from the insurance agreement (and the public policy implicit in the literal enforcement of these contracts)“; and that the operative insurance contract is the Lloyd‘s policy. Id. at 000133. Accordingly, we decline to consider the argument insofar as it is cast in terms of a request for sanctions. As a claim for relief by PSC based on equitable principles, we are not persuaded to award such fees. PSC‘s theory was rejected in Bunnett v. Smallwood, 793 P.2d at 160-161, and Rhodes v. Copic Ins. Co., supra.
V.
In No. 90-1320, the summary judgment for PSC on coverage and the judgment on damages, as modified, see supra note 12, are AFFIRMED. In No. 91-1201, the denial of the expenses and fees incurred by PSC in maintaining the instant case is AFFIRMED.
Stephen Jones (Jeremy B. Lowrey with him on the brief), of Jones & Wyatt, Enid, OK, for defendant-appellant.
Before: ANDERSON, ENGEL*, and KELLY, Circuit Judges.
Sixth Circuit, sitting by designation.
The principal issues in this appeal are whether the trial court adequately instructed the jury with regard to the requisite mens rea for medicaid fraud and, if reversibly erroneous on that score, whether there was a spillover effect which fatally tainted the defendant‘s mail fraud convictions. While we are compelled to reverse the medicaid fraud convictions for failure to instruct on an essential element of the offense, we hold that the thoroughness and independence of the mail fraud instructions assured against any possible taint “spilling over” from the faulty medicaid fraud instructions.
I
Defendant Dr. Sidney Laughlin was charged in a fifty-seven count indictment with fifty-three counts of medicaid fraud, in violation of
Dr. Laughlin operated an obstetrics/gynecology clinic in Shawnee, Oklahoma. The allegations of medicaid fraud stem from claims for reimbursement for the treatment of six patients at this clinic. The charges are based on allegations that Dr. Laughlin fraudulently double-billed for related procedures, falsely claimed that a series of procedures were necessitated by “accidents at home,” and fraudulently billed medicaid for other random procedures that he did not perform. The mail fraud charges relate to the alleged mailing of false claims to facilitate reimbursement for these procedures. All other relevant facts will be revealed at the appropriate time in this opinion.
II
Dr. Laughlin‘s first claim on appeal is that the trial court erred in not instructing the jury that he must either have known that the claims being submitted were false or have submitted his claims with the intent to defraud or deceive. Because “knowledge of falsity” is a specific and necessary element of this offense, and because the jury was not instructed that it had to find this element in order to convict, we reverse Dr. Laughlin‘s fifty-two count medicaid fraud conviction.
Initially, we hold that in accordance with the Ninth Circuit in United States v. Larm, 824 F.2d 780 (9th Cir.1987), “knowledge of falsity” is an essential element of medicaid fraud pursuant to
Over the objection of the defense, the trial court instructed the jury, both orally and in specific written instructions taken back to the jury room, as follows:
INSTRUCTION 11 MEDICAID FRAUD—ESSENTIAL ELEMENTS
Three essential elements are required to be proved in order to prove the offenses of medicaid fraud as charged in Counts 1-53 of the indictment:
First: That the defendant made or caused to be made a statement or representation of material fact in an application for benefits or payment under the Medicaid Act;
Second: That the statement or representation was false; and
Third: That the defendant knowingly and willfully made or caused to be made the false statement or representation.
In order to convict the defendant, all 12 of you must agree that a material statement or representation in each count is in fact false.
Unless the government has proved the same false statement to each of you, you must acquit the defendant of the charge in that particular count of the indictment.
The above charge was incomplete and insufficient because it failed to apprise the jury that the statement must not only be false but that Dr. Laughlin must also have known that the statement was false when the claim was submitted. The jury, therefore, could have convicted Dr. Laughlin without considering whether he knew that the claims he was submitting were false.
A proper instruction could have been made simply by adding knowledge of falsity as a fourth element or appending knowledge of falsity to any one of the three cited elements in one of the following ways:
First: That the defendant made or caused to be made a statement or representation of material fact in an application for benefits or payment under the Act which he then and there knew to be false, or
Second: That the statement or representation was false as the defendant knew,6 or
Third: That the defendant knowingly and willfully caused to be made the false statement or representation knowing it to be false when he made the claim.
Any such variation would have been fully adequate to apprise the jury of the mens rea element of the offense. The trial court could also have rectified the error by adding an additional independent instruction defining a false statement or representation in a manner similar to that elucidated in the above examples.7
The absence of a specific instruction on knowledge of falsity is in our judgment fatal. Failure to instruct on such an essential element as intent or knowledge requires reversal because the “Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 1073, 25 L.Ed.2d 368 (1970). See also Cole v. Young, 817 F.2d 412, 424 n. 8 (7th Cir.1987) (“Indeed every federal court to consider the question since the Court decided In re Winship . . . has agreed that a conviction procured without any jury instruction on an essential element of the offense is constitutionally invalid.“).
Dr. Laughlin did not specifically request an instruction in any of the forms as listed above. Nonetheless he did object to the instruction as given and requested an instruction which stated that the jury could only convict if “the defendant knowingly and willfully made or caused to be made the false statement or representation with the specific intent to violate the law or, in the alternative, with the intent to violate the law.” When this instruction was denied, he asked that the instruction with regard to the medicaid fraud counts mimic the instruction with regard to the mail fraud counts, so that the jury would be made aware that he had to “act with the specific intent to deceive.”
The trial court rejected Dr. Laughlin‘s proffered instructions on the basis that a “specific intent” charge has been disfavored since Liparota, and that the essential elements of the crime, as listed in the instructions, when read in conjunction with the definitions of “knowingly” and “willfully,” were sufficient to apprise the jury of the correct mens rea for medicaid fraud.
The trial court was correct that instructing in terms of “specific intent” has been disfavored by the courts because of the confusing and ambiguous nature of such an instruction. Liparota, 471 U.S. at 433 n. 16; Bailey, 444 U.S. at 403 (characterizing the distinction between general and specific intent as “ambigu[ous]” and as “the source of a good deal of confusion“); United States v. Valencia, 907 F.2d 671, 681-82 n. 12 (7th Cir.1990). In so recognizing, however, the trial court either misread or at least overextended Liparota, as not requiring any instruction whatever on the mental state required for a violation of medicaid fraud. Liparota, in qualifying the utility of the specific intent instruction,8 in no way relieved trial courts of their responsibili-
All the same, the government insists that the essential mens rea element was unmistakably covered by the court‘s charges elsewhere in the instructions. It is of course true that we review jury instructions in their entirety, United States v. Denny, 939 F.2d 1449, 1454 (10th Cir.1991), under a de novo standard of review. United States v. Agnew, 931 F.2d 1397, 1407 (10th Cir.1991). In so doing, we analyze, in light of the record, whether the instructions state the governing law and whether the jury was provided an intelligent, meaningful understanding of the applicable issues and standards. United States v. Cardall, 885 F.2d 656, 673 (10th Cir.1989) (citations omitted). We reverse only if in light of these considerations there was prejudicial error. Id. An analysis of the instructions in the form given convinces us that the jury could seriously have been misled in its understanding of the issues and law applicable to the case before it.
In a further attempt to define the mens rea element, the trial judge instructed the jury that:
INSTRUCTION 9 “KNOWINGLY AND WILLFULLY“—DEFINED
A defendant acted “knowingly” when he was conscious and aware of his actions, realized what he was doing or what was happening around him, and did not act because of ignorance, mistake, or accident.
A defendant acted “willfully” when he knowingly performed an act, deliberately and intentionally, as contrasted with accidentally, carelessly, or unintentionally.
This general definition of “knowingly and willfully,” however, is not helpful if the jury is never adequately instructed what elements of the statute these terms modify. The jury here was never instructed what Dr. Laughlin had to know and may very well have been left with the same uncertainty that bothered the Supreme Court in Liparota. Commenting upon this disquieting ambiguity, Justice Brennan cited W. LAFAVE & A. SCOTT, CRIMINAL LAW § 27 (1972):
“Still further difficulty arises from the ambiguity which frequently exists concerning what the words or phrases in question modify. What, for instance, does ‘knowingly’ modify in a sentence from a ‘blue sky’ law criminal statute punishing one who ‘knowingly sells a security without a permit’ from the securities commissioner? To be guilty must the seller of a security without a permit know only that what he is doing constitutes a sale, or must he also know that the thing he sells is a security, or must he also know that he has no permit to sell the security he sells? As a matter of grammar the statute is ambiguous; it is not at all clear how far down the sentence the word ‘knowingly’ is intended to travel—whether it modifies ‘sells,’ or ‘sells a security,’ or ‘sells a security without a permit.‘”
Liparota, 471 U.S. at 424 n. 7 (emphasis added).
On this record, we cannot confidently know whether the jury convicted Dr. Laughlin for: (1) knowing that he was making or causing claims to be made, or (2) knowing that the claims he was making or causing to be made were, in fact, false. See Sandstrom v. Montana, 442 U.S. 510, 526, 99 S.Ct. 2450, 2460, 61 L.Ed.2d 39 (1979) (“[E]ven if a jury could have ignored the presumption [as to intent] and found defendant guilty because he acted knowingly, we cannot be certain that this is what they did do.“) (emphasis in original). Without such confidence, it would be grossly unfair to uphold Dr. Laughlin‘s conviction for medicaid fraud.
It is true that a review of the instructions, both oral and written, reveals that the indictment as sent to the jury in the written instructions contains an accurate description of the mens rea for medicaid fraud.9 This
Unlike the remainder of the instructions, the indictment, although listed as Instruction 3, was not read verbatim to the jury but was summarized by the trial judge. This summary did not include the mens rea description. Thus, any arguably curative effect of the actual language in the indictment was minimized by the judge‘s instructions as given. The utility of the indictment was further qualified by the judge‘s statement that “the indictment itself is not evidence, it merely describes the charges and is only an accusation.”
Even had the trial judge read the indictment to the jury verbatim, it is our judgment that the inclusion of the knowledge of falsity element, embedded in eighteen lines of text, reproduced in footnote 9, supra, does not adequately remedy the judge‘s failure to incorporate the correct mens rea into the appropriate instructions.10 We cannot be confident that a reasonable juror, having read and heard the indictment, would have identified the contradiction, rectified it in a manner inconsistent with the judge‘s explicit “element” instructions, and determined that Dr. Laughlin was required to know that the statements he was submitting were, in fact, false. Again, without such confidence, we cannot affirm Dr. Laughlin‘s medicaid fraud convictions.
We hold that the trial judge committed prejudicial error with regard to the faulty jury instructions on medicaid fraud. The risk of misunderstanding is simply too sub-stantial to be ignored. We thereby reverse Dr. Laughlin‘s convictions on counts 1-33 and 35-53.
III
Dr. Laughlin‘s next claim on appeal is that the error with regard to the jury instructions on the medicaid counts “spilled over” into the mail fraud counts, impermissibly tainting the mail fraud convictions pursuant to
The trial judge exercised great care in separating the instructions on the two distinct offenses. The jury were instructed that “[e]ach crime charged and the evidence applicable to it should be considered separately, and the guilt or innocence of the defendant as to each count should be considered separately.” (emphasis added). We can be confident that the jury heeded instructions such as this because the jury, in considering the medicaid fraud counts, exercised their authority and dismissed one of the fifty-three medicaid fraud counts—indicating, with some assurance, that the jury scrutinized each count separately and distinctly.
It might even be logically argued that some of the instructions given on the mail fraud charges were so clear that the jury must perforce have been led to believe that
IV
At sentencing, the trial court increased Dr. Laughlin‘s offense level two points, pursuant to U.S.S.G. § 2F1.1(b)(4), for having performed unnecessary surgical procedures, pursuant to a fraudulent double-billing scheme, which resulted in a “risk of serious bodily injury.” This guideline provision deals solely with fraud and deceit offenses—both mail fraud and medicaid fraud fall within the grasp of this enhancement provision. United States Sentencing Guideline § 2F1.1(b)(4) provides that:
If the offense involved the conscious or reckless risk of serious bodily injury, increase by 2 levels. If the resulting offense level is less than level 13, increase to level 13.
The term serious bodily injury is defined in U.S.S.G. § 1B1.1, comment. (n. 1(j)):
“Serious bodily injury” means injury involving extreme physical pain or the impairment of a function of a bodily member, organ, or mental faculty; or requiring medical intervention such as surgery, hospitalization, or physical rehabilitation. As used in the guidelines, the definition of this term is somewhat different than that used in various statutes.
The risk of “serious bodily injury” identified by the district court pertains to unnecessary surgery performed on one patient in particular—Tammy Mansfield. This unnecessary surgery formed the predicate act for one of the mail fraud convictions which we uphold today.
Dr. Laughlin chose to perform a tubal ligation (a sterilization procedure) on Tammy Mansfield four weeks after he delivered her child by caesarian section. Testimony at trial indicated that this choice was abnormal, as most doctors would have performed the sterilization procedure concurrently with the caesarian section. Subsequent and due, in part, to the second operation, Ms. Mansfield developed an ileus (distended abdomen) and had to be hospitalized a third time so that this condition could be treated. The development of the ileus can be traced, as even Dr. Laughlin admitted, to the unnecessary second operation.
Dr. Laughlin argued that the evidence was insufficient to justify the conclusion that he performed this procedure several weeks following the caesarian section so that he could double-bill for surgical procedures. He points to Dr. Lampert‘s testimony, which, according to Dr. Laughlin, merely brought into question Dr. Laughlin‘s decision to wait four as opposed to six to eight weeks following the caesarian to do the tubal ligation. Dr. Laughlin argues that this testimony evidences only a disagreement concerning operation strategy, not a fundamental error with regard to appropriate procedure, and only proves that, at the very most, his decision might be controversial but in no way was designed to perpetrate a fraud.
The government draws a different conclusion from Dr. Lampert‘s testimony; it is a conclusion which under the totality of the evidence is supported by the greater force of logic. The government points out that Dr. Lampert testified that: (1) normally a tubal ligation is performed at the same time as a caesarean section; (2) there was no medical reason not to have performed the procedure on Tammy Mansfield when the caesarian was done; and, (3) it would be difficult to find a doctor to defend Dr. Laughlin‘s actions with regard to his decision to wait before performing the related tubal ligation procedure.
According to further testimony by other witnesses, Dr. Laughlin was aware that he could not be paid twice if he performed the tubal ligation at the same time as the caesarian. Furthermore, Dr. Laughlin‘s reason for not concurrently performing the surgical procedures in question—that he wanted to provide time for Tammy Mansfield to heal—was
We are satisfied that the trial judge committed no error, and certainly no clear error, United States v. Harris, 903 F.2d 770, 778 (10th Cir.1990), when she found that the second operative procedure was unnecessary and caused one of Dr. Laughlin‘s patients to develop an ileus, requiring a subsequent third trip to the hospital. The evidence was fully sufficient to permit the jury to find that Dr. Laughlin made the decision to postpone the tubal ligation pursuant to a fraudulent double-billing scheme which was facilitated by his use of the mails. Dr. Laughlin‘s fraudulent activity therefore caused a risk of serious bodily injury to Ms. Mansfield, and the trial court‘s decision to enhance his base offense level by two points should, therefore, be upheld pursuant to U.S.S.G. 2F1.1(b)(4).
For the foregoing reasons, the medicaid fraud convictions are REVERSED and REMANDED for new trial or further proceedings consistent herewith. The mail fraud convictions are AFFIRMED.
ANDERSON, Circuit Judge, dissenting.
I agree that
I. Knowledge of Falsity
Contrary to Laughlin‘s assertion, the district court did not fail to instruct the jury on the knowledge of falsity requirement. Instruction Eleven identified “three essential elements” of Medicaid fraud:
First: That the defendant made or caused to be made a statement or representation of material fact in an application for benefits or payment under the Medicaid Act;
Second: That the statement or representation was false; and
Third: That the defendant knowingly and willfully made or caused to be made the false statement or representation.
Appellant‘s Br.App. at 88. Like the statute itself, however, the third element‘s description of the necessary intent was ambiguous. It could mean that Laughlin knowingly made a statement that happened to be false, even if he did not know it was false. Or it could mean that Laughlin knew that the statement he was making was false. See Liparota v. United States, 471 U.S. 419, 423-24 & n. 7, 105 S.Ct. 2084, 2086-87 & n. 7, 85 L.Ed.2d 434 (1985).
The jury almost certainly understood the instruction correctly. The first element already required proof that Laughlin made or caused to be made a statement. I doubt that a jury would think one could make a statement without knowing that he was doing so. “Knowingly” in the third element could only add the requirement that Laughlin knew the statement he was making was false.
Instruction Nine further guaranteed that the jury would correctly understand the intent element by defining “knowingly” as acting with awareness and not because of ignorance or mistake. See Appellant‘s Br.App. at 86. A reasonable juror would conclude that a defendant who intentionally made a statement but did not know it was false was acting in ignorance. Although plausible to lawyers, I doubt that any reasonable juror would think that a person who did not know his statement was false “knowingly made a false statement.”
Nevertheless, our precedents do suggest that this technical ambiguity makes the intent instruction alone inadequate. See United States v. O‘Brien, 686 F.2d 850, 851-53 (10th Cir.1982); Hunt v. Oklahoma, 683 F.2d 1305, 1308 (10th Cir.1982). But flaws in jury instructions are only errors if the instructions as a whole do not “provide the jury with an ample understanding of the applicable principles of law and factual issues.” Denny, 939 F.2d at 1454. The indictment contained in Instruction Three clarified the correct understanding of Instruction Eleven on the re-
Sidney C. Laughlin . . . knowingly and willfully made and caused to be made false statements and representations of material facts in applications for payments of Medicaid funds for physician services in that the defendant . . . represented that he had provided specific physician services . . . and that certain patients had accidents and injuries at home . . . , whereas Sidney C. Laughlin, the defendant herein, then and there well knew said statements and representations on the applications forms submitted were false. . . .
Appellant‘s Br.App. at 67. Laughlin agreed to have the judge summarize the indictment rather than read it to the jury, but the judge nevertheless told the jury to “read and review it carefully.” R.Supp. at 4-5. The indictment can and in this case did help to explain the required intent. See Hunt, 683 F.2d at 1308 (“[T]he mere use of the word ‘knowingly’ in the Information and jury instructions did not adequately convey the concept of scienter to the jury.“). The jury knew it should interpret each instruction in light of other instructions because the judge told the jury to “consider the instructions as a whole and not a part to the exclusion of the rest.” R.Supp. at 13. Especially since the jury was likely to understand the intent instruction correctly, the indictment‘s clear allegation that Laughlin knew the statements were false was enough to ensure that the jury would understand it could convict Laughlin only if he knew the statements were false.
I don‘t see how the “utility of the indictment was further qualified by the judge‘s statement that ‘the indictment itself is not evidence, it merely describes the charges and is only an accusation.‘” Majority Op. at 1529. This is true of all instructions. None is “evidence“; they simply describe what the government must prove. The judge‘s remark does not suggest that the indictment may not clarify what the government must prove.
The majority concludes that Instruction Three did not sufficiently clarify the required knowledge of falsity because “[w]e cannot be confident that a reasonable juror, having read and heard the indictment, would have identified the contradiction, rectified it in a manner inconsistent with the judge‘s explicit ‘element’ instructions, and determined that Dr. Laughlin was required to know that the statements he was submitting were, in fact, false.” Id. However, Instruction Three did not contradict Instruction Eleven. Instruction Eleven clearly required Laughlin to have known something when he made the false statements. One of the possible meanings—in fact, the most likely meaning—of the third element in Instruction Eleven was just what the indictment in Instruction Three alleged: that Laughlin knew his statements were false. Instruction Three therefore simply clarifies the ambiguity in Instruction Eleven; they do not conflict at all. The jury would have no reason to disregard Instruction Three and the judge‘s admonition to follow all of the instructions. See R.Supp. at 4.
The majority also suggests that the jury would not have correctly understood the knowledge requirement because the judge did not read the relevant part of the indictment, which was “embedded in eighteen lines of text.” Majority Op. at 1528-29. The mere density of an instruction does not make it inadequate. We may assume that the jury followed the judge‘s instructions to read the indictment carefully, regardless of what he read orally. Instructions Three and Eleven, along with Instruction Nine, adequately informed the jury that Laughlin was guilty only if he knew the statements were false.
II. Willfullness
The statute requires proof that the defendant both “knowingly” and “willfully” made or caused to be made a false statement.
I disagree with Laughlin that the Medicaid fraud statute requires proof that the defen-
The instructions ensured that the jury would not convict Laughlin unless he “willfully” made false statements in this sense. The instructions require the jury to find that Laughlin “knowingly and willfully made or caused to be made the false statement or representation.” Appellant‘s Br.App. at 88. The court also explained that “willfully” means Laughlin “knowingly performed an act, deliberately and intentionally, as contrasted with accidentally, carelessly, or unintentionally.” Id. at 86. Again, the court‘s description of the willfullness requirement is technically ambiguous. It could mean only that Laughlin intended to make a statement, or that he intended to make a false statement. The required knowledge of falsity makes this ambiguity inconsequential, however. The instructions require that Laughlin knew the statements were false, and that he “willfully” or “intentionally” made those statements that he knew to be false. This is all that “willfully” means in this statute. The instructions as a whole thus adequately instructed the jury on the correct meaning of the charge that Laughlin “knowingly and willfully” made false statements. I therefore dissent.
UNITED STATES of America, Plaintiff-Appellee, v. Oscar DIAZ; Jose Manuel Ruiz; Jesus Manuel Fernandez; Al Pastor; Billy Allen, a/k/a William Holster Allen; Dudson Woods; Daniel Lee Deatherage; Kelly Fred Kalinowski; Irving Schwartz; Ramon Rodriguez, Jr.; Robert Lincoln Fowler; Joseph Thomas Marino and Samuel J. Degiso, Defendants-Appellants.
No. 90-7890.
United States Court of Appeals, Eleventh Circuit.
July 29, 1994.
Notes
(a) Whoever—
knowingly or willfully makes or causes to be made any false statement or representation of material fact in any application for any benefit or payment under a State health care program . . . shall (i) in the case of such a statement, [or] representation by any person in connection with furnishing (by that person) of items or services for which payment is or may be made under the program, be guilty of a felony. . . .
Whoever, having devised or intending to devise any scheme or artifice to defraud . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the postal service, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail according to the direction thereon. . . .
JUDGE KELLY: Do you agree that the defendant had to know that the claim as made was false as opposed to merely knowing the claims were made?
GOVERNMENT: Yes, Your Honor.
That on or about the dates set forth hereinafter, in the Western District of Oklahoma, SIDNEY C. LAUGHLIN, the defendant herein, knowingly and willfully made and caused to be made false statements and representations of material facts in applications for payments of Medicaid funds for physician services in that the defendant, SIDNEY C. LAUGHLIN, stated and represented that he had provided specific physician services, identified in part by procedure code numbers, on the dates indicated,
and that certain patients had accidents and injuries at home on the dates indicated, whereas SIDNEY C. LAUGHLIN, the defendant herein, then and there well knew said statements and representations on the application forms submitted were false in that he had not provided the physician services as described and identified by the procedure code numbers, on the dates stated, and that the patients did not have accidents and injuries at home on the dates stated, which misrepresentations were material. (emphasis added).