Case Information
*1 Bеfore DUBINA and BARKETT, Circuit Judges, and JONES*, Senior Circuit Judge. ____________________________________________
* Honorable Nathaniel R. Jones, Senior U.S. Circuit Judge for the Sixth Circuit, sitting by designation.
BARKETT, Circuit Judge:
Kishor Vaghela appeals from his conviction for conspiracy to defraud the United States and to obstruct justice, and from his conviction for soliciting and receiving kickbacks for Medicare referrals. Vaghela raises three arguments in this appeal: (1) that there was insufficient evidence to support his conviction for conspiracy to obstruct justice; (2) that thе district court erred in assessing the restitution owed at the total amount for which the United States Department of Health and Human Services (“DHHS”) was billed for work referred by Vaghela, rather than at the amount Vaghela actually received in illegal kickbacks; and (3) that his convictions were tainted by improper remarks made during the prosecution’s closing argument. We reject the final of these arguments without comment, see 11th Cir. R. 36-1, but find the first and second to be meritorious. We therefore REVERSE Vaghelа’s conviction for conspiracy to obstruct justice, AFFIRM his conviction on all other counts, VACATE the order for restitution in the amount of $50,420.02, and REMAND to the district court for further proceedings consistent with this opinion.
I. Background
Kishor Vaghela was the office manager for the Family Medical Center (“FMC”), a medical practice owned and operated by Drs. Larry Levine and Gary Levine. In August of 1993, Raghu Desai, president and owner of Extendicare Clinical Laboratory (“Extendicare”), contacted Vaghelа. Desai had heard that FMC was in the market for a lab to handle its labwork, and was hoping to secure this business for Extendicare. Vaghela told Desai that he would refer $8000 to $10,000 in business each month to Extendicare in exchange for personal monthly payments to *3 Vaghela of $2000 to $2500. Desai accepted this offer. Between August 1993 and August 1994, Vaghela referred the labwork of 452 Medicare patients to Extendicare. In exchange for these referrals, Extendicare paid Vaghela persоnally a total of $23,400 in kickbacks. The labwork performed by Extendicare was ultimately paid for by DHHS in the total amount of $50,420.02.
In August 1994, Desai told Vaghela that Extendicare’s payments to Vaghela were being investigated, and that they needed to draft a contract that would legitimize them. The pair then drafted and signed a contract, backdated to August 1993, stating that all of Extendicare’s payments to Vaghela had been made in exchange for Vaghela’s “consulting services.”
Some time later, [1] Desai was interviewed by federal agents. Subsequently, in December 1995, Desai called Vaghela to discuss strategy. Vaghela told him to “stick with the contract.” On January 31, 1996, a federal grand jury subpoenaed records from Desai. Desai produced the back-dated contract and copies of the checks he had given Vaghela. Before producing the checks, Desai altered them, adding a memo showing that they were paid in exchange for “consulting work.” Desai also produced 1099 forms stating that Desai had employed Vaghela as a consultant in 1993 and 1994.
During the investigation, the FBI arranged for Drs. Levine and Levine to engage Vaghela in conversation about the referral payments made to Vaghela by Extendicare. This conversation was recorded by the FBI. During this conversation, the physicians discussed Vaghela’s apparent failure to share with them the money he received from Extendicare, commented on how the payments were likely to appear to Medicare, and referred to the money received by Vaghela from Extendicare as “rent.” Vaghela made no response to these allegations.
*4 Vaghela was indicted by a grand jury in February 1997, and was tried in July of that year.
During closing arguments, the prosecutor drew the jury’s attention to Vaghela’s non- responsiveness when confronted on tape by his employers, and suggested that the jury could draw conclusions regarding Vaghela’s guilt from his silence during that conversation.
The jury found Vaghela guilty on all counts, including one count of conspiracy to defraud the United States in violation of 18 U.S.C. § 371, thirteen counts of soliciting and receiving kickbacks in violation of 18 U.S.C. § 1320a-7b(b)(1)(A), and one count of conspiracy to obstruct justice in violation of 18 U.S.C. § 371. The district court sentenced him to 21 months of imprisonment and three years of supervised release on each count, with the sentences to run concurrently. The district court also ordered Vaghela to pay restitution to Medicare in the amount of $50,420.02. Vaghela now appeals.
II. Discussion
1. The Conspiracy to Obstruct Justice
In this appeal, Vaghela argues that there was insufficient evidence to convict him of
conspiracy to obstruct justice. Specifically, Vaghela argues that because there was no judicial
proceeding ongoing at the time of the acts supporting the conspiracy charge, the government
failed to prove its case on this count. See United States v. Cihak,
The elements of the offense of conspiracy are “(1) an agreement between the defendant
and one or more persons, (2) the object of which is to do either an unlawful act or a lawful act by
unlawful means.” United States v. Toler,
There is no question that Vaghela and Desai made an agreement. The question we must resolve is whether the acts they agreed to commit would violate § 1503. For if they would not, Vaghela сould not be found guilty of conspiracy to obstruct justice, for the simple reason that such a finding would find him guilty of conspiring to commit acts that are not themselves illegal . Accordingly, we turn to the question of whether Vaghela’s act would be violative of § 1503, the substantive offense Vaghela was accused of conspiring to commit.
At the time of the events leading to Vaghela’s arrest and conviction, 18 U.S.C. § 1503 provided in relevant part that
Whoever . . . corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, *6 obstruct, or impede, the due administration of justice, shall be fined not more than $5,000 or imprisoned not more than five years, or both. [2]
8 U.S.C. § 1503 (cited in United States v. Aguilar,
In Aguilar, the Supreme Court resolved this disagreement. Citing with approval the
effort of courts of appeals “to place metes and bounds on the very broad language of the catchall
provision,” the Court read into § 1503's Omnibus Clause what it termed a “‘nexus’ requirement –
*7
that the act must have a relationship in time, causation, or logic with the judicial proceedings.”
Aguilar,
In Aguilar, a United States District Judge was charged and convicted of one count of § 1503 for lying to F.B.I. agents who were investigating an alleged conspiracy to influence the outcome of a habeas case pending in the district where he served. The Supreme Court, however, found there to be insufficient evidence to support a conviction under § 1503. See Aguilar, 515 U.S. at 606. Although a grand jury had аlready begun investigation into the conspiracy, the Court found the evidence offered by the government to be insufficient to support a conclusion “that [Aguilar] knew that his false statement would be provided to the grand jury.” Id. at 601. Instead, the Court found the evidence to “go[] no further than showing that [Aguilar] testified falsely to an investigating agent,” and that “[s]uch conduct . . . falls on the other side of the statutory line from that of one who delivers false documents or testimony to the grand jury itself.” Id. The difference betwеen these cases, according to the Court, lies in the fact that in the latter case, it is “all but assure[d] that the grand jury will consider the material in its *8 deliberations,” while the “use [that] will be made of false testimony given to an investigating agent who has not been subpoenaed or otherwise directed to appear before the grand jury is far more speculative .” Id. (emphasis added). As a consequence, the Court concluded that Aguilar’s act of lying to the investigating agents “cannot be said to have the ‘natural and prоbable effect’ of interfering with the due administration of justice,” and thus could not ground a conviction for the substantive offense of obstruction of justice. Id. For precisely this reason, if this very same act of giving false testimony to FBI agents had formed the basis of an agreement between Aguilar and another, Aguilar could not have been found guilty of conspiracy to obstruct justice because the act he would have conspired to commit would not have been itself illegal .
To provе a conspiracy to violate § 1503, the government must therefore show that
the
actions the defendant agreed to take
would themselves violate § 1503, that is, would have “‘the
natural and probable effect’ of interfering with the due administration of justice” in a way that is
more than merely “speculative.” Id. As in Aguilar, this standard cannot encompass every
agreement to deceive regarding the commission of a crime. Otherwise, every criminal who
conspired at any time and in any way to conceal evidence of his or her crime would be
susceptible to charges of conspiracy to obstruct justice, a result that would take us far beyond the
federal interest in “preserving the integrity of a judicial proceeding” that we have elsewhere
found to animate § 1503. United States v. Veal ,
At the same time, the requirement that the actions defendants conspired to take have “the
natural and probable effect of interfering with the due administration of justice” is not so narrow
as to preclude a conspiracy to obstruct specific future judicial proceedings, for example, an
agreement to bribe members of a grand jury should one be struck in the future. See United
States v. Perlstein,
Turning to the facts at hand, it is clear to us that the government’s evidence falls short of what is required to ground a conviction for conspiracy to obstruct justice. Vaghela participated in the drawing up of a bogus contract, and over a year later, urged Desai to “stick with th[at] contract.” At the time Vaghela and Desai drew up the contract, there was no grand jury proceeding. Although there had been some FBI invеstigation – the exact parameters of which were discernable neither from the government’s brief nor from the record – into the payments, there is no indication that the pair had reason to anticipate further proceedings, nor that they *11 viewed their own actions as a way to forestall them. They were simply trying to conceal the evidence of their crime. [5]
In a broad and colloquial sense, every criminal act is an obstruction of justice, as is every
effort to сonceal that criminal act. However, as we noted earlier, such a broad and literal reading
of the definition of this criminal offense is inconsistent with Aguilar. See Aguilar,
As we saw, in Aguilar, the defendant also sought to hide his own wrongdoing by lying to
federal agents. See Aguilar,
This is precisely the case we have here. Vaghela and Desai certainly agreed to stick with a contract they knew to be false. But if drawing up and asserting the veracity of a false document would not itself ground a substantive charge of obstruction of justice – and it is clear that it would not do so under Aguilar, which required that “the act must have a relationship in time, сausation, or logic with the judicial proceedings,” Aguilar, 515 U.S.at 599 – their agreement to do so cannot ground a conspiracy charge based on that same offense. And because the government is therefore unable to show that the pair agreed to commit one or more acts in violation of § 1503, Vaghela’s conviction for conspiracy to obstruct justice must be reversed.
2. The Restitution Issue
Vaghela also argues that the district court erred in calculating the amount of restitution at $50,420.02, the amount for which DHHS was billed under Medicare for work referred to Extendicare by Vaghela, rather than at $23,400, the amount Vaghela received in illegal kickbacks in exchange for the referrals. [6] We agree.
It is well settled that restitution awarded the victim of a crime pursuant to the Victim and
Witness Protection Act of 1982, 18 U.S.C. §§ 3663, 3664 (1996),
[7]
may not exceed the loss
suffered by the victim for those crimes specifically charged. See United States v. Stone, 948
F.2d 700, 704 (11th Cir. 1991); United States v. Cobbs,
The government, which bears the burden of proving otherwise, offers little or no evidence capаble of doing so. Speculation that Medicare ends up paying for some medically unnecessary treatments and tests when kickbacks are provided in exchange for the referral of Medicare patients and services is insufficient to support the government’s burden to prove actual losses in each particular case.
Even if we were to accept the government’s argument to this effect, the evidence in this case does not come close tо supporting an inference that medically unnecessary services were performed by Extendicare as a consequence of the kickback scheme. Vaghela was merely the office manager who selected the lab to perform the tests ordered by the physicians who employed him. But it was the physicians themselves who made the determinations as to which tests were necessary and which were not, and the government offers no evidence (nor, as best we *14 сan tell, is there any such evidence to offer) that Drs. Levine and Levine were party to the scheme. There is therefore no basis for concluding that any of the tests ordered from Extendicare and paid for by DHHS were anything other than medically necessary.
We therefore conclude that the government failed to prove that the amount of loss for purposes of restitution in this case was $50,420.02. Instead, we find that amount of the loss for purposes of restitution suffered by DHHS as a result of Vaghela’s illegal conduct is equivalent to the amount he received in kickbacks, and not the amount paid to Extendicare for services rendered Medicare.
CONCLUSION
For the foregoing reasons, we hold that there was insufficient evidence to support Vaghela’s conviction for conspiracy to obstruct justice in violation of 18 U.S.C. § 371, and find that the district court erred in its determination that the amount of restitution owed was $50,420.02 and not $23,400. We therefore REVERSE Vaghela’s conviction for cоnspiracy to obstruct justice, AFFIRM his conviction on all other counts, VACATE the order for restitution in the amount of $50,420.02, and REMAND to the district court for resentencing consistent with this opinion.
Notes
[1] The record does not provide a specific date for this interview.
[2] This statute has since been amended. The above quoted language is now contained in 18 U.S.C. § 1503(a) (1998).
[3] Our own circuit took a broad view of § 1503's Omnibus Clause, requiring simply that the
government establish “that the defendant should have reasonably foreseen that the naturаl and
probable consequence of the success of his scheme would [obstruct the due administration of
justice].” United States v. Silverman,
[4] These steps included “agree[ing] not to report the fact that [state trooper] Messerlian had
assaulted [the arrestee], . . . fail[ing] to provide routine information to the hospital concerning the
circumstances of [the arrestee’s] death, . . . knowingly omitt[ing] accounts of the alleged assault
from statements prepared during interviews with [several witnesses], . . .fabricat[ing] a story
[regarding how the arrestee came to be injured, and] . . . ma[king] false declarations before the
grand jury.” Messerlian,
[5] This case is thus very different from Messerlian. See discussion, supra.
[6] We review for clear error the district court’s factual findings as to the amount of
restitution. United States v. Bourne,
[7] These statutory provisions have been amended in the time since Vaghela’s sentencing. See 18 U.S.C. §§ 3663, 3663A, 3664 (1997).