United States v. Cocivera , 104 F.3d 566 ( 1996 )

Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
12-26-1996
United States v. Cocivera
Precedential or Non-Precedential:
Docket 96-1071
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 96-1071
UNITED STATES OF AMERICA
v.
JOHN COCIVERA,
Appellant
No. 96-1072
UNITED STATES OF AMERICA
v.
U.S. HEALTH PRODUCTS, INC.,
Appellant
No. 96-1073
UNITED STATES OF AMERICA
v.
NORTH AMERICAN HEALTH INDUSTRIES, INC.,
Appellant
No. 96-1074
UNITED STATES OF AMERICA
v.
AMERICAN HEALTH PRODUCTS, INC.,
Appellant
No. 96-1075
UNITED STATES OF AMERICA
v.
BENEFICIAL HEALTH PRODUCTS, INC.
Appellant
No. 96-1076
UNITED STATES OF AMERICA
v.
UNIVERSAL MEDICAL COMPANY, INC.,
Appellant
No. 96-1077
UNITED STATES OF AMERICA
v.
MID-ATLANTIC HEALTH PRODUCTS, INC.,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Nos. 94-cr-00365-1, 94-cr-00365-3, 94-cr-00365-4,
94-cr-00365-5, 94-cr-00365-6, 94-cr-00365-7, 94-cr-00365-8)
Argued July 15, 1996
Before: SLOVITER, Chief Judge,
COWEN and ROTH, Circuit Judges
(Opinion filed December 26, l996)
Richard M. Meltzer (Argued)
Mesirov, Gelman, Jaffe, Cramer & Jamieson
Philadelphia, PA 19103-7589
Attorney for Appellants
Richard P. Barrett (Argued)
Office of United States Attorney
Philadelphia, PA l9l06
Debra L.W. Cohn (Argued)
United States Department of Justice
Washington, D.C. 20530
Attorneys for Appellee
OPINION OF THE COURT
SLOVITER, Chief Judge.
Appellant John Cocivera and six corporations that he
established were convicted by a jury of various crimes arising
out of a scheme to defraud Medicare. The principal issues before
us concern Cocivera's waiver of his right to counsel and his
representation of the defendant corporations.
I.
Cocivera was the chief executive officer and fifty
percent owner of six Pennsylvania corporations that were created
in August 1989 to provide medical equipment to Medicare
beneficiaries through a national telemarketing operation.
Cocivera and the corporations were indicted in September 1994 in
the United States District Court for the Eastern District of
Pennsylvania on one hundred forty-four (144) counts of mail fraud
in violation of 18 U.S.C. § 1341, twenty-eight (28) counts of
filing false Medicare claims in violation of 18 U.S.C. § 287, ten
(10) counts of money laundering in violation of 18 U.S.C. §
1956(a)(1)(A)(i), twenty-two (22) counts of engaging in money
transactions in violation of 18 U.S.C. § 1957(a), and one count
of structuring transactions to evade reporting requirements in
violation of 31 U.S.C. § 5324(a)(3). The government alleged,
inter alia, that the defendants engaged in telemarketing to
senior citizens using false and misleading statements, sent
preprinted certificates of medical necessity (CMNs) containing
false and misleading statements to physicians' offices, altered
certificates of medical necessity from physicians, made false
statements to senior citizens at the time of delivery in order to
secure assignment of Medicare payments, submitted false claims to
Pennsylvania Blue Shield, and made false and misleading
statements to physicians, Medicare and administrative law judges
to forestall complaints and make apprehension less likely.
Cocivera and U.S. Health Products, Inc., the umbrella
company, were found guilty of all 205 counts by a jury in May
1995. Each of the other corporations was convicted, although on
a lesser number of counts than charged. Cocivera was sentenced
to a 78 month prison term, a three year term of supervised
release, and a special assessment of $10,250. The corporate
defendants received assessments totalling $77,000. The
defendants filed timely notices of appeal; we have jurisdiction
under 28 U.S.C. § 1291.
II.
The attorney originally retained by the defendants
withdrew more than five months before the trial began and the
court appointed Thomas Bergstrom, a well known criminal lawyer,
to represent all the defendants. At the start of the second day
of trial, and after four witnesses had testified, Cocivera asked
to address the court without the jury. The court gave him that
opportunity. Cocivera began by stating that he found Bergstrom
to be "a very intelligent and very capable attorney," and that
"I'm thankful I have him as an attorney." App. at 98. Cocivera
then proceeded to make various complaints about Bergstrom's
performance. Id. at 99-103. Although Bergstrom had spent nine
or ten hours with Cocivera in the course of his preparation,
Cocivera complained that the time Bergstrom spent with him was
inadequate, complained that Bergstrom declined to interview
certain persons or to file certain motions that Cocivera wished
to file, such as for a continuance, and complained about various
decisions made by Bergstrom which were, in essence, elements of
Bergstrom's trial strategy, such as his cross-examination.
Cocivera then asked the court three questions: first,
if he could file motions, second, if he could have a continuance
or, third, if he would be allowed to act as co-counsel so that he
"may ask some questions of the witnesses that I feel are very
pertinent . . . . I just want to get to the facts as I think
they should be brought out." Id. at 104.
The district court heard from Bergstrom who explained
the trial preparation that he had done and his reason for
declining to file the motions referred to by Cocivera. In
addition, although Bergstrom had not examined all the many files
to which Cocivera had referred, he had spent some three hours
looking through those documents, he had also reviewed the 300
government exhibits, reviewed all the Jencks material pertaining
to the 30 government witnesses, and planned to review the
remaining documents with the services of an accountant. Id. at
105-106. Bergstrom explained that he believed "that this case
requires simplification and not more complexity." Id. at 106.
He concluded that in spite of the difference in approach he and
Cocivera had, "I'm prepared to continue." Id. The court then
heard from the government lawyer who argued that it would be
inappropriate for Cocivera to serve as co-counsel and who opposed
all of Cocivera's requests.
The district court then ruled that Cocivera could "file
whatever motions he wishes and I will take a look at them." Id.at 113.
With respect to Cocivera's complaints about Bergstrom,
the district court found that Bergstrom had proceeded
conscientiously and expressed confidence that he would do so
throughout the trial. The court concluded: "Mr. Bergstrom is at
the very top of his profession . . . . If [he] isn't doing an
adequate job, we simply don't have the talent to handle this case
in the Eastern District of Pennsylvania." Id. at 114. The
court, noting the difficulties of hybrid representation, declined
to allow Cocivera to serve as co-counsel, stating "although I
find that there is no good cause for defendant's dissatisfaction
with Mr. Bergstrom, he, the defendant, Mr. Cocivera does have a
constitutional right to represent himself if he wishes." Id.
The court then asked Cocivera if he wanted the court to
conduct the required colloquy on the issue, but Cocivera asked if
he could wait until the end of the day or the next day to see how
counsel performed. The court insisted that Cocivera decide
whether he wanted to represent himself, and Cocivera replied,
"Yes, I guess I do," id. at 115, whereupon the court conducted
the colloquy, consisting of a series of questions concerning his
knowledge of law, his experience representing himself or others
in a criminal trial, his familiarity with the indictment, and the
possible penalty range if convicted. The court also told him
that he would be "on your own," without help or guidance from the
court, and asked if he was familiar with the rules of procedure
and evidence and the relevant statutory provisions. The court
advised Cocivera "from the bottom of my heart, sir," that he
would be "far better represented by a trained lawyer particularly
Mr. Bergstrom." Id. at 117.
In response, Cocivera stated that all he really wanted
was to be able to supplement Bergstrom's knowledge. "I have no
reason too [sic] want to represent myself." Id. The court then
repeated the question whether he wanted to represent himself.
Cocivera responded: "Yes, your Honor." Id. at 118. After the
court found that Cocivera had knowingly and voluntarily waived
his right to counsel, it permitted him to represent himself, and
appointed Bergstrom as standby counsel. Asked if he had further
comments, Cocivera responded: "No, Your Honor." Id.
When Cocivera was about to begin questioning the next
witness, the court asked whether he would also represent the
defendant corporations, and Cocivera replied "yes," to which the
court appeared to assent. Id. at 120. From the record, it
appears that Bergstrom remained in the courtroom throughout the
nine day trial. Following the convictions, new counsel
represented defendants in presenting a motion for a new trial and
represents them on this appeal.
III.
Cocivera contends that his waiver of his right to
counsel was not knowing or voluntary in violation of Faretta v.
California, 422 U.S. 806 (1975). After careful review of the
record, we conclude that there is ample support for the district
court's finding to the contrary. The court engaged in a detailed
colloquy with Cocivera to determine if he was aware of the
charges against him and the penalty faced. The court fully
explained the dangers of proceeding pro se and strongly urged
Cocivera not to do so. We find no abuse in the fact that the
possibility of so proceeding was first raised by the court. As
we stated in Government of the Virgin Islands v. James, 934 F.2d
468, 470 (3d Cir. 1991), "if the court determines that good cause
for substitution of counsel does not exist, the defendant then is
left with the choice of continuing with existing counsel or
proceeding to trial pro se." In rejecting Cocivera's post-trial
motion for a new trial, the district court noted that Cocivera is
educated and articulate, and that he was "an intelligent and very
able advocate," Order of August 8, 1995, a finding fully
justified by our own reading of the transcript showing Cocivera's
examination of witnesses and conduct during the trial. The
district court also found that Cocivera's timing in raising the
issue of Bergstrom's allegedly deficient preparation on the
second day of the trial was a tactical decision. Inasmuch as the
trial date had been specially listed and the jury impanelled and
waiting in the middle of the government's presentation of its
case, we find no error or abuse of discretion in requiring
Cocivera to make his decision promptly.
Nor do we find merit in Cocivera's argument that his
waiver of counsel was not timely. The very cases cited by
Cocivera belie this argument since they merely state that the
district court has the discretion to reject a defendant's waiver
of counsel if it is not timely. See, e.g., Horton v. Dugger, 895
F.2d 714, 717 (11th Cir. 1990); United States v. Oakey, 853 F.2d
551, 553 (7th Cir. 1988), cert. denied, 488 U.S. 1033 (1989);
United States v. Lawrence, 605 F.2d 1321, 1324-25 (4th Cir.
1979), cert. denied, 444 U.S. 1084 (1980). The district court
had the discretion to allow Cocivera to proceed pro se even
though the trial had already begun. Moreover, we note that
Bergstrom, who had been appointed as standby counsel, was present
throughout the trial and participated on the record on various
occasions. See, e.g., App. at 664 (regarding a possible plea
agreement), 669 (regarding applicable sentencing guidelines),
675, 838, 1201 (regarding the use of defense exhibits), 1205
(regarding certain stipulations), 1206, 1354 (assisting in the
preparation of motions), 1355.
Thus, we reject Cocivera's argument that his waiver of
his Sixth Amendment right to counsel was not voluntary, knowing
or intelligent, or timely.
IV.
Cocivera claims that the assistance given at trial was
ineffective. This court has long followed the practice of
declining to consider a defendant's claim of ineffective
assistance of counsel on direct appeal. As we have explained in
our case law, the issue is ordinarily more appropriate for
collateral attack. Government of the Virgin Islands v. Forte,
806 F.2d 73, 77 (3d Cir. 1986). This affords the opportunity to
develop a factual basis for the claim that counsel's performance
did not meet the standard for effective assistance of counsel.
United States v. Theodoropoulos, 866 F.2d 587, 598 (3d Cir.
1989). It also gives the trial court the opportunity to hear
counsel's explanation for the conduct at issue. Frequently, the
direct appeal is handled by the same counsel who handled the
trial, and it is patent that that counsel cannot forcefully argue
ineffective assistance of trial counsel. United States v.
DeRewal, 10 F.3d 100 (3d Cir. 1993), cert. denied, 114 S. Ct. 1544
(1994).
On the other hand, we have recognized that in some
cases, albeit rare, we may have a sufficient record on appeal to
decide the issue and avoid the considerable effort of requiring
the defendant to institute a collateral proceeding in order to
raise the ineffective assistance of counsel claim. In Government
of the Virgin Islands v. Zepp, 748 F.2d 125, 133 (3d Cir. 1984),
we determined that the facts regarding the conflict of interest
issue raised on direct appeal were clear on the record.
Therefore, we held that under the circumstances of that case an
ineffective assistance of counsel claim was cognizable on direct
appeal.
Similarly, in United States v. Headley, 923 F.2d 1079,
1083 (3d Cir. 1991), we allowed an ineffective assistance of
counsel claim on direct appeal where "an evidentiary hearing to
develop the facts is not needed," because the record was
sufficient to show that the attorney failed to raise a sentencing
adjustment for the defendant being a minor participant in a
criminal enterprise. We could find no tactical reason for the
attorney's failure to raise the adjustment, and thus concluded
that counsel's ineffective assistance was clear.
In this case, we also hold that under the circumstances
we need not require Cocivera to pursue a collateral proceeding
before we can rule on the ineffective assistance of counsel
claim. The issue was raised by Cocivera on the second day of
trial, and the district court held a hearing to decide the issue.
Cocivera presented his claim to the district court cogently, as
does his counsel on appeal, and Bergstrom explained the reasons
for his actions and confirmed his preparedness and willingness to
proceed. The district court ruled on Cocivera's claim twice -
once orally when the issue was presented at trial, and again in
its order of August 8, 1995 rejecting Cocivera's post-trial
motions. The issue is thus cognizable in this case on direct
appeal.
Turning to the merits, the district court ruled post
trial that "Mr. Bergstrom's performance -- both before and after
Mr. Cocivera waived the right to the assistance of counsel -- was
highly professional and did not fall below any objective standard
of reasonableness. See Strickland v. Washington, 466 U.S. 668,
688 (1984)." Order of August 8, 1995. We see no reason to
overturn this ruling, and thus reject Cocivera's ineffective
assistance of counsel claim.
V.
The corporations contend that they also did not
voluntarily or knowingly waive their right to counsel. In United
States v. Rad-O-Lite of Philadelphia, Inc., 612 F.2d 740, 743 (3d
Cir. 1979), we considered the parameters of the constitutional
right to counsel and noted that the "language does not suggest
that the protection of sixth amendment rights is restricted to
individual defendants." We held that the right to effective
assistance of counsel applies to corporations, saying:
[A]n accused has no less of a need for
effective assistance due to the fact that it
is a corporation. The purpose of the
guarantee is to ensure that the accused will
not suffer an adverse judgment or lose the
benefit of procedural protections because of
ignorance of the law. A corporation would
face these same dangers unless the agent
representing it in court is a competent
lawyer. Thus, the right to effective
assistance of counsel is not so peculiarly
applicable to individuals that corporations
should not be entitled to it.
Id. (citations omitted).
Neither counsel in this case has suggested that
anything in the record indicates, much less demonstrates, that
Cocivera was authorized by the corporations to substitute himself
for Bergstrom. Nor is there any indication in the record that a
change in representation for the corporations was even discussed
with other corporate officers. It may be true, as the government
argues, that Cocivera effectively ran the corporations and was
their alter ego, but that does not mean that he had the right to
decide alone to represent the corporations. Indeed, the record
does not show whether Bergstrom's status as standby counsel also
applied to the corporations, as the entire discussion between the
district court and Cocivera regarding the corporate
representation consisted of one simple question and answer.
Moreover, as the Supreme Court has stated, "[i]t has
been the law for the better part of two centuries . . . that a
corporation may appear in the federal courts only through
licensed counsel." Rowland v. California Men's Colony, 506 U.S.
194, 201-02 (1993); see also, Simbraw, Inc. v. United States,
367 F.2d 373 (3d Cir. 1966) (per curiam).
The cases cited by the government to support its
contention that the corporations could proceed without being
represented by counsel are inapposite. In In re Victor
Publishers, Inc., 545 F.2d 285, 286 (1st Cir. 1976) (per curiam),
the court upheld the general rule that a corporation must be
represented by licensed counsel. Although dictum in a footnote
referred to an earlier First Circuit case, In re Las Colinas, 453
F.2d 911 (1st Cir. 1971), cert. denied, 405 U.S. 1067 (1972),
that supposedly made an exception allowing a corporation to be
represented by a non-lawyer when that individual had demonstrated
extraordinary legal ability, we find no reference in Las Colinasto
allowing corporations to be represented by a non-lawyer. Nor
could a district court in its later opinion in the ongoing LasColinas
litigation find the reference to the representation issue
in the case cited in the Victor footnote. See Schreibman v.
Walter E. Heller Co., 446 F. Supp. 141, 144 n.7 (D.P.R.) (holding
that a corporation could not be represented by a non-lawyer),
aff'd sub nom. Las Colinas Dev. Corp v. Schreibman, 577 F.2d 723
(1st Cir. 1978).
The government also cites United States v. Reeves, 431
F.2d 1187 (9th Cir. 1970), for the proposition that a
partnership's managing partner may represent the partnership when
state law gives a partner a specific right to the property sought
to be foreclosed. However, the Ninth Circuit later held that the
Supreme Court's Rowland opinion had overruled Reeves "to the
extent that Reeves stood for the proposition that non-attorney
members of a partnership could appear on behalf of the
partnership." See In re America West Airlines, 40 F.3d 1058,
1059 (9th Cir. 1994). In any event, the issue before us is
representation of a corporation, not a partnership.
Similarly, even the decision in In the Matter of
Holliday's Tax Services, Inc., 417 F. Supp. 182 (E.D.N.Y. 1976),
aff'd, 614 F.2d 1287 (2d Cir. 1979), where the district court
made a limited exception allowing a small closely-held
corporation to be represented in bankruptcy proceedings by its
sole shareholder if the corporation was financially unable to
hire an attorney, was cited in Rowland as among the "aberrant"
cases holding contrary to the general rule. Rowland, 506 U.S. at
202 n.5.
The government's citation to the district court
decision in Willheim v. Murchison, 206 F. Supp. 733 (S.D.N.Y.
1962), allowing a stockholder and non-lawyer to represent himself
and other similarly situated stockholders in a derivative action,
is surprising in light of the criticism of the reasoning of
Willheim by the court of appeals of that circuit. See Phillips
v. Tobin, 548 F.2d 408, 411 n.4 (2d Cir. 1976) (refusing to allow
a stockholder to file pro se in a derivative suit).
We thus find that none of the cases cited by the
government actually deviate from the general rule that a
corporation may not be represented by other than licensed
counsel. The district court's action in permitting Cocivera to
represent the corporation ran against almost unbroken precedent.
See, e.g., Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th
Cir. 1985), cert. denied, 474 U.S. 1058 (1986); Jones v. Niagara
Frontier Transp. Auth., 722 F.2d 20, 23 (2d Cir. 1983); Southwest
Express Co., Inc. v. ICC, 670 F.2d 53 (5th Cir. 1982) (per
curiam); Strong Delivery Ministry Ass'n. v. Board of Appeals of
Cook County, 543 F.2d 32 (7th Cir. 1976) (per curiam). In fact,
in Rowland the Supreme Court stated of the rare cases holding to
the contrary: "These cases neither follow federal precedent, nor
have themselves been followed." Rowland, 506 U.S. at 202 n.5.
Moreover, the cases referred to were civil cases and did not
implicate the central issue here, which is whether a corporation
may proceed in a trial as a criminal defendant represented by
someone who is not an attorney.
In sum, the corporations in this case were not
represented by counsel as contemplated by the Sixth Amendment.
We cannot accept the government's argument that the appointment
of Bergstrom as standby counsel "cured any problem with corporate
representation in this case." Appellee brief at 33. Standby
counsel cannot remedy the absence of counsel unless s/he
"provides . . . the mandated assistance . . . ." at all crucial
stages of the proceedings. United States v. Novak, 903 F.2d 883,
891 (2d Cir. 1990). The record does not even show that Bergstrom
was standby counsel for the corporations. The district court
appointed Bergstrom standby counsel for Cocivera as part of the
decision allowing Cocivera to proceed pro se. App. at 118. At
the time of Cocivera's response to the court that he would also
represent the corporations, the court said nothing concerning the
appointment of standby counsel for the corporations. Id. at 120.
There is nothing in the court's subsequent reminder to Cocivera
that "I've appointed Mr. Bergstrom as your standby counsel and
you should feel free to the extent as you wish, as you have, to
consult from time to time," id. at 1201, to suggest that
Bergstrom was standby counsel to the corporations as well as to
Cocivera. We have no basis to assume that Bergstrom's
participation as standby counsel on behalf of Cocivera was also
on behalf of the corporations.
Because we conclude that the six corporations were not
properly represented in this case, we must vacate their
convictions and remand for a new trial.
VI.
For the reasons set forth, we will affirm the
conviction and sentence of Cocivera but will vacate the
convictions of the six corporations and remand for further
proceedings.
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