United States of America, Plaintiff-Appellee, v. Suzanne Burgos, Defendant-Appellant.
Nos. 03-12185, 03-14589 and 04-14839
United States Court of Appeals, Eleventh Circuit.
Dec. 12, 2005.
435 F.3d 1327
UNITED STATES of America, Plaintiff-Appellee, v. Grisel ARIAS, Marco Burgos, Suzanne Burgos, Pedro Sarduy, Idania C. Arias, Dalia Landrove, Michael Iheagwara, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Grisel Arias, Defendant-Appellant.
IV. CONCLUSION
The district court properly determined that
Lisa A. Hirsch, J. Kirk Ogrosky, Anne R. Schultz, Asst. U.S. Atty., Dawn Bowen, Eduardo I. Sanchez, Miami, FL, for U.S.
Before TJOFLAT and BARKETT, Circuit Judges, and MILLS*, District Judge.
BARKETT, Circuit Judge:
In consolidated appeals No. 03-12185 and No. 03-14589, Grisel Arias, Marco Burgos, Suzanne Burgos, Pedro Sarduy, Idania C. Arias, Dalia Landrove, and Michael Iheagwara appeal their convictions for conspiracy and other crimes relating to a scheme to defraud the Medicare program. With the exception of Dalia Landrove, each also appeals the sentence imposed by the district court.1
I. Background
The DME companies participating in the scheme ostensibly procured the medication from the pharmacies on behalf of the patients, often obtaining the patient medications in mass quantity, bringing stacks of prescriptions to the pharmacies once a month.4 Sometimes the DME companies delivered the respiratory medications to
Defendants Grisel Arias, Idania Arias, and Dalia Landrove operated DME companies involved in the scheme. Idania Arias also owned and operated J&A Billing Company, through which all Medicare claims from the DME companies were processed. Pedro Sarduy was a doctor at First Option Medical Center, where he allegedly falsely diagnosed the “patients” with COPD. Marco and Suzanne Burgos, who were married during the time of the conspiracy, operated South Beach Pharmacy and La Moderna Pharmacy, two of the pharmacies suрplying the aerosol medications to the fraudulent DME companies. Michael Iheagwara was a co-owner of La Moderna before leaving to create Maz Pharmacy. Iheagwara and Suzanne Burgos were both pharmacists.
II. Discussion
As noted earlier, Jose Arias, the alleged head of the scheme, pled guilty and cooperated with the government, although he did not testify at trial. After a joint trial before a jury, the Appellants were convicted.5 We consider all of the arguments of each Appellant in turn, but engage in an extended discussion regarding only Michael Iheagwara and Pedro Sarduy.6
A. Grisel Arias
Grisel Arias argues that her conviction should be reversed because: (1) the evidence was not sufficient to support her conviction; (2) her Confrontation Clause rights were violated when the court refused to permit her to re-call a government witness who pled guilty tо an unrelated drug charge subsequent to testifying in this case; (3) the government withheld exculpatory evidence in violation of Brady v. Maryland, 373 U.S. 83 (1963); (4) the district court erred in denying her requested continuance when a superseding indictment was issued one month before trial; and (5) the court erroneously refused to give a requested jury instruction pertaining to the evidence that she had acted in “good faith” and not with fraudulent intent. She also argues that her sentence should be vacated because in calculating her guideline sentence, the district court incorrectly calculated the loss attributable to her.
We have carefully considered the record and find no merit to any of these contentions. First, the evidence was clearly sufficient to support her conviction. Without cataloguing each piece of evidence against Grisel Arias, we note that the government submitted documents еstablishing that Grisel Arias was the original president and incorporator of two DME companies involved in the fraud scheme, Bird Road Medical Services and, subsequently, New Advanced Medical Equipment Corporation; on the evidence presented, the jury
Second, the district court did not abuse its discretion in refusing to allow the recall of Amador or the introduction of documents relating to the drug charge against him. The sole purpose in seeking further testimony from Amador was impeachment, the questioning would have been cumulative of that already permitted during cross examination, and Amador had represented that he would simply invoke his Fifth Amendment privilege if recalled.8 Third, Grisel Arias did not have a valid Brady claim, because when viewed in context, the purported contradictions between Jose Arias’ sentencing testimony and the prosecution‘s pretrial letter describing his statements are not material. Fourth, in this complex multi-defendant case, the district court did not abuse its discretion by denying Grisel a continuance after the second superseding indictment included additional details concerning the DME New Advanced Medical Equipment Corporation; the government had previously disclosed New Advanced materials during discovery, and the superseding indictment did not add new charges or alter the theory of prosecution. Fifth, the district court did not abuse its discretion by refusing Grisel‘s request for a “good faith” instruction, as there is no foundation in the evidence for such an instruction.9 Finally, the district court did not err in calculating the amount of loss attributable to Grisel—in a jointly undertaken criminal activity, each defendant is responsible for “all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity.”
B. Idania Arias
Idania Arias argues that the district court erred by refusing to admit evidence to support her defense that she was completely subservient to her husband, Jose Arias, and therefore unable to formulate the mens rea for the crime аnd by refusing to dismiss the money laundering
The district court did not abuse its discretion in excluding Idania‘s expert witness. In order to be admissible, the expert evidence must establish that Idania was not able to form the mens rea for the crime; however, Idania‘s expert witness provided evidence of justification, not lack of mens rea. Nor did the district court abuse its discretion by excluding Idania‘s other evidence regarding subservience, based on its determination that the evidence was not relevant.10 The court did not err in refusing to dismiss the money laundering charge against Idania. The facts proved at trial did not deviate materially from the language of the indictment, and bank records provided by the government in discovery sufficiently notified Idania that facts relating to Medicos Marketing transactions would be included in the money laundering case. Finally, after hearing testimony from Idania‘s treating psychiatrist at FDC Miami, the district court had adequate information to evaluate Idania‘s mental condition, and did not abuse its discretion in denying further psychiatric evaluation before sentencing.
C. Dalia Landrove
Dalia Landrove argues that the district court erred by failing to remove a juror for cause or to inquire more thoroughly into that juror‘s ability to be fair and impartial, and by allowing the prosecution to characterize her tax returns as fraudulent with no evidentiary basis. We find that the district court‘s inquiry into this juror‘s misconduct was well within the court‘s discretion, and that the prоsecution‘s use of Landrove‘s tax returns cannot be deemed a harmful error.
D. Suzanne Burgos
Suzanne Burgos argues that the evidence was not sufficient to support her conviction; that the district court erred by admitting certain extrinsic evidence and by treating an inspector‘s audit as intrinsic rather than extrinsic evidence; and that the district court should not have instructed the jury on deliberate ignorance. Burgos also argues that in determining her guideline range for sentencing, the district court incorrectly calculated the loss attributable to her.
After careful review of the record, we find that the evidence was sufficient to support the jury‘s conclusion that Suzanne Burgos knowingly participated in the conspiracy. Documentary evidence established that Suzanne was a corporate officer of both La Moderna Pharmacy and South Beach Pharmacy, and several witnesses testified that Suzanne was involved in hiring personnel for those pharmacies, including personnel whose work involved filling the fraudulent aerosol prescriptions. Mary Ghabrial, who worked as a managing pharmacist at La Moderna and was not charged with any wrongdoing, testified that Suzanne Burgos was manager of the pharmacists at these pharmacies and “always made it a point to know what was going on in each pharmacy .... She
Ghabrial further testified that although she was hired to supervise only the prescription area at La Moderna, which did not include the aerosol compounding section, she became aware that significant quantities of aerosol medication were nonetheless being dispensed with La Moderna labels, often with Ghabrial‘s initials as dispensing pharmacist, without her supervision. Ghabrial testified that she informed Suzanne Burgos about this. Additionally, according to Ghabrial‘s testimony, Areta Ruiz, a pharmacy technician, was dispensing aerosol medication from Peripheral DME, a DME company located next door to and affiliated with La Moderna, with no apparent pharmacist supervision, as is required by law. On cross examination, Ghabrial testified that Ruiz reported to either Marco or Suzanne Burgos. Additionally, Ghabrial testified that Janeide Regueiro, a pharmacy technician at South Beach Pharmacy, told Ghabrial that Suzanne Burgos knew that Regueiro was filling aerosol prescription vials with incorrect volumes of medication. In light of the evidence establishing the substantial fraudulent aerosol business ongoing at both La Moderna and South Beаch Pharmacies,11 the jury was entitled to infer that Suzanne Burgos, a licensed pharmacist whom evidence established was active in managing both the personnel and day-to-day activities of both pharmacies, was a knowing participant in the fraudulent conspiracy.12
Similarly, the district court did not err by instructing the jury on deliberate ignorance, as there was evidence to support an inference that Suzanne Burgos, through her role at South Beach and La Moderna Pharmacies, was aware of facts that should have put her on notice of the fraudulent activity, but deliberately insulated herself from positive knowledge. The district court did not abuse its discretion by admitting extrinsic evidence or by allowing Agent Cesar Arias to testify about his audit of La Moderna and South Beach Pharmacies, as the audit represented intrinsic evidence that the pharmacies had purported to sell more product during the time period of the conspiracy than the volume of supplies they purchased would have allowed.
As to Suzanne Burgos’ sentence, the district court did not err in calculating the
E. Michael Iheagwara
Michael Iheagwara, a licensed pharmacist, incorporated two pharmacies that were allegedly involved in the fraud scheme, La Moderna and, later, Maz Pharmacy. He argues that his conviction for conspiracy must be vacated because the district court erred in finding that Rule 408 of the Federal Rules of Evidence did not apply to criminal proceedings,13 and thus erroneously admitted evidence arising from a state administrative complaint against him. The administrative complaint at issue was brought by the Florida Department of Health against Maz Pharmacy. In his representative capacity as an owner of Maz Pharmaceuticals, Inc., Iheagwara signed a statement in response to the complaint wherein he agreed to: (i) admit as true the drug-alteration allegations made in the administrative complaint; and (ii) permit the Department of Health to enter a fine and final order in order to avoid more formal administrative proceedings and the potential penalties arising therefrom. The district court overruled Iheagwara‘s objection to the admission of the statement, holding that Rule 408 did not bar its admission because Rule 408 does not apply to criminal proceedings.
Rule 408 provides that “[e]vidence of ... furnishing ... a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount.”
First, the plain language of Rule 1101(b) renders each of the Federal Rules of Evidence—including Rule 408—generally applicable to criminal cases and proceedings.
Second, the last sentence of Rule 408 specifically states that the Rule “does not require exclusion when the evidence is offered for another purpose, such as ... proving an effort to obstruct a criminal investigation or prosecution.”
Third, applying Rule 408 to criminal cases furthers the policy interests that undergird the Rule. The advisory committee‘s notes clarify that there are two justifications for the exclusions that Rule 408 requires: (i) the evidence is irrelevant, as the compromise at issue may have been motivated by a desire for peace rather than any concession as to the merits of the party‘s position; and (ii) the exclusion promotes settlement of disputes. Fed.R.Evid. 408, advisory committee‘s note (1972 proposed rules). It is self-evident that a defendant in a civil suit is far less likely to offer to settle a claim if evidence of that offer can later be introduced to prove criminal liability for the same conduct. Limiting Rule 408 to civil proceedings thus undermines the public policy in favor of compromise that the Rule aims to further. Moreover, while the Second Circuit has found that the interest in accurate determinations in criminal trials outweighs the interest in promoting civil settlements, this rationale overlooks a basic premise underlying Rule 408: evidence of compromise is not necessarily probative of liability. Indeed, the advisory committee‘s notes indicate that evidence of a settlement offer is often irrelevant to liability for the charged conduct, because “the [settlement] offer may be motivated by a desire for peace rather than from any concession of weakness of position.” Fed.R.Evid. 408, advisory committee‘s note (1972 proposed rules). In this light, permitting the admission of civil settlement offers in subsequent criminal prosecutions actually compromises the accuracy of the jury‘s determination. As the Fifth Circuit explained, “[i]t does not tax the imagination to envision the juror who retires to deliberate with the notion that[,] if the defendants had done nothing wrong, they would not have paid the money back.” Hays, 872 F.2d
For these reasons, we join the Fifth and Tenth Circuits in holding that Rule 408 applies to both civil and criminal proceedings. It follows that the evidence and testimony at issue was inadmissible under Rule 408, and that the district court abused its discretion in admitting the evidence.15 See Koon v. United States, 518 U.S. 81, 100 (1996) (“A district court by definition abuses its discretion when it makes an error of law.“).
However, a non-constitutional error is harmless if, viewing the proceedings in their entirety, a court determines that the error “did not affect the verdict, or had but very slight effect.” See United States v. Magluta, 418 F.3d 1166, 1180 (11th Cir. 2005) (internal marks omitted); see also Kotteakos v. United States, 328 U.S. 750, 762, 764 (1946). Here, as we detail below, the government presented overwhelming evidence of Iheagwara‘s knowledge of and participation in the conspiracy. Therefore, we find that the admission of Iheagwara‘s statement was merely cumulative and did not affect the verdict.
The government presented evidence that Iheagwara incorporated both La Moderna Pharmacy (a d/b/a for M&M Pharmacy), which he co-owned with Marco Burgos, and Maz Pharmacy. Pharmacy technician Odalys Regil, who pled guilty and cooperated with the prosecution, testified that Iheagwara hired her to work at La Moderna and trained her to compound the aerosol medication, and also described La Moderna‘s standard procedures for compounding the aerosol medication under Iheagwara‘s direction. According to Regil, she and Iheagwara did not accurately weigh the chemicals mixed in the compounds; haphazardly dispensed the medication into individual dosage vials, often ignoring the amount specified on the prescription; did not clean the machine used to dispense medication into individual vials, so that it developed a green fungus in the dispensing hoses; allowed a night crew to label the medication, unsupervised by a pharmacist; and would print dates on medication labels that did not match the actual date dispensed (as they should). The jury could reasonably conclude that these egregious violations indicate Iheagwara‘s knowledge that he was manufacturing and dispensing medication only to create a facade of legitimacy for the fraud scheme, and not to actually serve sick patients.
Additionally, Regil testified that while she worked at La Moderna, she and Iheagwara sold half portions of medicine to Jose Arias, and that the two also sold unaffixed labels to Jose Arias on the side, receiving a cash payment which they shared. Later, Regil and Iheagwara left La Moderna, at which point they opened a DME company to continue the scheme, and Iheagwara established Maz Pharmacy. Mercedes Jerez, who worked at Sunshine Medical DME and also pled guilty in the case, testified that Maz Pharmacy would sell Sunshine labels unaffixed to medication, as well as labels backdated by several months.
Additionally, Investigator Louis Collado testified that when they visited Maz Pharmacy, he found pre- and post-dated aerosol medication prepared for dispensal; the pharmaceutical orders contained only hаlf the contents indicated on the labels. The testimony of Agent Cesar Arias corroborates Collado‘s testimony. Finally, while we have specifically described only the evidence implicating Iheagwara individually, we note that the government presented overwhelming evidence that a fraud conspiracy existed, generally. Because the substantial evidence incriminating Iheagwara assures us that the erroneous admission of the statement was harmless, we affirm Iheagwara‘s conviction and sentence.17
F. Pedro Sarduy
Pedro Sarduy, a medical doctor who worked at the Arias-owned First Option Medical Center, was convicted of conspiracy based on the government‘s allegations that he participated in the fraud scheme by certifying false diagnoses of COPD. Sarduy argues that the district court erred by refusing to instruct the jury on his defense of withdrawal from the conspiracy, because there was sufficient evidence to support the conclusion that he withdrew from the conspiracy more than five years before the government charged him. If the jury accepted his withdrawal defense, the statute of limitations would preclude
A criminal defendant has the right to a jury instruction on his theory of defense, separate and apart from instructions given on the elements of the charged offense. See Mathews v. United States, 485 U.S. 58, 63 (1988); United States v. Ruiz, 59 F.3d 1151, 1154 (11th Cir. 1995). If the proposed instruction presents a valid defense and there has been “some evidence” adduced at trial to support the defense, a trial court may not refuse to charge the jury on that defense. Ruiz, 59 F.3d at 1154. The burden of presenting evidence sufficient to support a jury instruction on a theory of defense is “extremely low.” Id. “[T]he defendant is entitled to have presented instructions relating to a theory of defense for which there is any foundation in the evidence, even though the evidence may be weak, insufficient, inconsistent, or of doubtful credibility.” United States v. Lively, 803 F.2d 1124, 1126 (11th Cir. 1986) (internal marks omitted). In reviewing the evidence adduced, the court must view the evidence in the light most favorable to the accused. Ruiz, 59 F.3d at 1154.
An accused conspirator‘s participation is presumed to have continued until all objects of the conspiracy have been accomplished or until the last overt act has been committed by any of the conspirators. United States v. Reed, 980 F.2d 1568, 1583 (11th Cir. 1993). However, if a conspirator establishes the affirmative defense of withdrawal, the statute of limitations will begin to run at the time of withdrawal.18 Id. at 1584; see also United States v. U.S. Gypsum Co., 438 U.S. 422, 465 n. 38 (1978). Otherwise, the statute will not begin to run until the final act of the conspiracy has occurred. Reed, 980 F.2d at 1584.
Because withdrawal constitutes a valid dеfense to the conspiracy charge, Sarduy was entitled to his requested instruction if there was “any foundation in the evidence” to demonstrate that he withdrew from the conspiracy more than five years before he was indicted. See Ruiz, 59 F.3d at 1154. Thus, Sarduy must demonstrate that the evidence provided a foundation to satisfy this circuit‘s two-prong test for withdrawal: “first, the defendant must prove that he has taken affirmative steps to defeat the objectives of the conspiracy; and second, he must show either that he made a reasonable effort to communicate these acts to his co-conspira-
Sarduy argues that the evidence provides a sufficient foundation for a jury to infer that he had withdrawn from the conspiracy, and that withdrawal had been communicated to Jose Arias, the head of the scheme. First, he presents an August 28, 1995 letter to Blue Cross/Blue Shield, as administrator for Medicare Part B, wherein he advised them that he was no longer seeing patients at First Option, and requested his cancellation as provider at First Option.19 Sarduy‘s expert testified that a physician could reasonably assume that by notifying Medicare that he was no longer working for a particular clinic, Medicare would notify any other participating providers. Citing this expert testimony, Sarduy argues that the letter to Blue Cross/Blue Shield therefore constituted a communication “reasonably calculated” to reach Jose Arias, the scheme‘s principal.
Additional evidence indicates that his communication of withdrawal was indeed successful, bolstering his claim. Days after he mailed the August 28, 1995 letter to Blue Cross/Blue Shield, his name was crossed out from the list of individual provider numbers on First Option Medical Center‘s Medicare electronic billing enrollment form.20 Further, checks submitted by the government, as well as a chart of those checks submitted into evidence by the government, illustrate that the checks purportedly paying Sarduy for his involvement in the scheme cease in September 1995. Finally, Sarduy argues that testimony by his former office manager stating that Jose Arias acquired a subsequent October 16th “To whom it may cоncern” letter from Sarduy, in which Sarduy wrote that “I will be providing medical services at First Option Medical Center,” indicated that Arias had actually received Sarduy‘s communicated withdrawal (in the August 28th letter), and was attempting to engage Sarduy‘s continued participation. After this October exchange, a final December 4, 1995 letter to Blue Cross/Blue Shield again requests Sarduy‘s cancellation as a provider for First Option, and advises Blue Cross/Blue Shield that he had not seen any patients since sending the previous cancellation letter in August.
Viewing this evidence in the light most favorable to Sarduy, see Ruiz, 59 F.3d at 1154, and in light of the “extremely low” burden that Sarduy must meet, id., we find that he has provided a sufficient foundation in the evidence from which a jury could conclude that he took affirmative steps to withdraw from the conspiracy and to communicate that withdrawal to his co-conspirators. Becausе Sarduy adduced evidence supporting his valid theory of defense, he was entitled to the jury instruction he requested. The district
CONCLUSION
Having considered the record and argument of counsel, we find no reversible error as to Grisel Arias, Marco Burgos, Suzanne Burgos, Idania C. Arias, Dalia Landrove, or Michael Iheagwara, and affirm their convictions and sentences. However, for the reasons set out above, we vacate the conviction and sentence of Pedro Sarduy and remand for a new trial.
AFFIRMED in part VACATED in part.