United States v. Syme ( 2002 )

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
1-7-2002
USA v. Syme
Precedential or Non-Precedential:
Docket 0-5172
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Filed January 7, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-5172
UNITED STATES OF AMERICA
v.
ROBERT U. SYME, Appellant
On Appeal From the United States District Court
For the District of Delaware
(D.C. Crim. No. 98-cr-00032-5)
District Judge: Honorable Joseph J. Farnan, Jr.,
Argued: July 31, 2001
Before: BECKER, Chief Judge, McKEE, and
WEIS, Circuit Judges.
(Filed: January 7, 2002)
PETER GOLDBERGER, ESQUIRE
(ARGUED)
PAMELA A. WILK, ESQUIRE
50 Rittenhouse Place
Ardmore, PA 19003-2276
JOSEPH A. HURLEY, ESQUIRE
1215 King Street
Wilmington, DE 19801
Counsel for Appellant
CARL SCHNEE, ESQUIRE
United States Attorney
BETH MOSKOW-SCHNOLL,
ESQUIRE (ARGUED)
Assistant United States Attorney
1201 Market Street, Suite 1100
P.O. Box 2046
Wilmington, DE 19899-2046
Counsel for Appellee
OPINION OF THE COURT
BECKER, Chief Judge.
This is an appeal by defendant Robert U. Syme, who
owned and operated a number of individually incorporated
ambulance companies which, according to the 31-count
superseding indictment, fraudulently sought over-
reimbursement through the Medicare and Medicaid
programs. Syme was convicted on several counts of wire
fraud, mail fraud, and False Claims Act violations, and on
one count of making a false statement relating to a health
care matter. Syme's corporate co-defendants were convicted
on all counts and are not involved in this appeal. Each of
the fraud and False Claims Act counts alleged that Syme
engaged in two or more of the following forms of fraud when
he billed the government for ambulance trips: (1) falsely
identifying a Pennsylvania address for his companies and
seeking reimbursement at the rate paid to Pennsylvania
companies, when the claim should have been billed at the
(lower) Delaware or Maryland rates; (2) falsely representing
that ambulance transport was medically necessary; (3)
providing false information about the destination of the
ambulance trip; and (4) providing false information about
the type of treatment that the patient being transported
was going to receive.
Syme raises several challenges to his convictions. The
principal challenge is that the indictment alleged and the
District Court instructed the jury on a theory of fraud that
is invalid as a matter of law. More particularly, Syme
2
contends that the government's theory that he committed
fraud by misrepresenting that Pennsylvania was the"home
station" of his ambulance companies, thereby getting
reimbursed at the Pennsylvania rate, is invalid as a matter
of law because the term "home station" had not been
authoritatively defined during the time covered in the
indictment. We conclude, however, that this fraud theory is
not legally invalid, but rather, at most, may have been
unsupported by the evidence presented at trial. Because
each challenged count also rests on a fraud theory that
Syme does not challenge on appeal, we must affirm the
convictions that Syme challenges on this basis. See United
States v. Griffin, 502 U.S. 46, 57-58 (1991).
We will, however, vacate and remand for a new trial
Syme's False Claims Act conviction on count 25 of the
superseding indictment. Albeit quite inadvertently, the
District Court committed plain error with respect to that
count, constructively amending the indictment by
instructing the jury on a fraud theory that was not alleged
in the count. In noticing plain error in this case, we hold
that constructive amendments, which are per se reversible
under harmless error review, are presumptively prejudicial
under plain error review. Because we find that the
government failed to present sufficient evidence during the
first trial for the jury to convict on the "medical necessity"
theory on Count 25, the "medical necessity" theory must be
removed from the scope of the new trial thereon. To retry
count 25 based on that theory would violate the Double
Jeopardy Clause.
Syme also attacks all counts of conviction on the grounds
that the District Court erred in the admission of certain
evidence. Primarily, he challenges the admissibility of the
testimony of a physician expert witness on the grounds that
it could not "assist the trier of fact to understand the
evidence or to determine a fact in issue." Fed. R. Ev. 702.
We disagree, concluding that his testimony that an
ambulance trip is actually medically necessary is an issue
on which the average juror could benefit from a physician's
expert testimony. We reject Syme's other evidentiary
objections summarily. See infra note 2.
3
Turning from the convictions to the sentence, we agree
with Syme that the sentence imposed by the District Court
needs be vacated because the District Court committed
plain error in violation of the Ex Post Facto Clause by
applying the Sentencing Guidelines' enhancement for fraud
committed by "sophisticated means," which was not
included in the Guidelines until after Syme committed the
offenses in this case. We will remand for resentencing on
this count. We reject, however, Syme's claim that the
restitution order that the District Court imposed on him
violates Apprendi v. New Jersey, 530 U.S. 466 (2000). This
claim presents a question of first impression in this Circuit,
which we resolve by concluding that, because the statute
under which the District Court sentenced Syme to pay
restitution contains no maximum penalty, Apprendi does
not apply.
I. Facts and Procedural History
From 1987 through late 1996, Syme owned and operated
an ambulance company called Medical Services Corps, Inc.
("MSC"), which had its main office first in Stanton,
Delaware, and after 1995, in Wilmington, Delaware. Syme
created three corporate subsidiaries to MSC. In 1989, he
founded NCC Transportation, Inc. ("NCC") and Elk
Transportation, Inc. ("Elk"). In 1992 he created
Independence EMS, Inc. ("Independence"). All three
subsidiaries operated from MSC's Delaware offices and
engaged in the business of providing ambulance
transportation services. Ambulances from Syme's
companies sometimes also operated in Pennsylvania, New
Jersey, and Maryland. Syme exercised day-to-day control
over MSC and all of its subsidiaries, including oversight of
the ambulance dispatch and billing operations. One of the
mainstays of Syme's ambulance businesses was
transporting patients to and from regularly scheduled
medical treatments. For example, his companies had
contracts with the Delaware State Hospital to transport
patients to the hospital for treatment.
The majority of the patients that Syme's companies
transported were covered either by Medicare, the federally
funded program that funds medical services for the elderly,
4
or by Medicaid, a similar program that funds services for
low-income people. The Health Care Financing
Administration ("HCFA"), a federal agency within the
Department of Health and Human Services ("HHS"), is
responsible for coordinating and financing the
reimbursement of health care service providers under the
Medicare and Medicaid programs. During the period
relevant to this case, HCFA contracted first with
Pennsylvania Blue Shield and later with its subsidiary, Xact
Medicare Services ("Xact"), to administer the
reimbursement of Medicare claims. Xact was responsible
for claims arising in Pennsylvania, New Jersey, and
Delaware, and processed the claims for Medicare
reimbursement submitted by Syme's ambulance
companies.
Xact developed operational guidelines governing which
claims would be reimbursed under Medicare consistent
with HCFA policy memoranda. In order to get paid for
transporting Medicare patients, ambulance companies were
required to submit standard reimbursement requests to
Xact with information about the patient, the purpose of the
trip, and the starting point and destination. Xact would
determine whether to reimburse an ambulance service for
a trip depending on whether the trip met certain criteria.
First, the ambulance trip had to be "medically necessary"
as defined by Xact's guidelines. Second, the patient had to
be transported for a treatment covered by Medicare's
ambulance reimbursement guidelines. Third, the
ambulance trip had to be to a covered destination. Certain
destinations, such as hospitals, were covered by Xact's
reimbursement program, while others, such as a dental
offices, were not.
Ambulance services were also required to record on their
reimbursement forms a provider number that indicated the
state in which their service was located. Most importantly,
the rate of reimbursement that Medicare paid varied widely
according to which state provider number the ambulance
service used. The reimbursement rates for Pennsylvania
ambulance services, for example, were almost twice as high
as the rates for Delaware services.
5
Syme and his companies have long had a rocky
relationship with HCFA and its subcontractors. In February
1982, Xact's predecessor, Pennsylvania Blue Shield,
became concerned that Delaware Medical Services, Inc.
("DMS"), a separate company that Syme had formed around
the same time as MSC, was filing duplicate claims for the
same ambulance trip and billing at the higher Pennsylvania
rate rather than at the Delaware rate. According to an
affidavit by an employee in the HHS Office of the Inspector
General, representatives from Pennsylvania Blue Shield
spoke with Syme "in an attempt to educate [him] in the
appropriate claim filing policies and procedures." Syme
represented in this meeting that "he was inadequately
reimbursed for ambulance service in Delaware."
In 1987, the government filed a civil suit against Syme
and DMS, alleging, among other things, that DMS had
falsely filed claims for Delaware ambulance trips using a
Pennsylvania provider number in order to get reimbursed at
the higher Pennsylvania rate. Syme settled the suit for
$4,000 in May 1992, but did not admit any wrongdoing.
In April 1992, Donald Baxter, a Pennsylvania Blue Shield
investigator, started looking into the location of MSC's three
subsidiary companies. He visited the locations in
Philadelphia that Syme had listed as the addresses for his
three companies in the applications that he had submitted
for Medicare provider numbers. At 4700 Cedar Avenue, the
address listed on NCC's provider number application,
Baxter found neither a garage, nor ambulances, but rather
an apartment building. He also attempted to visit 3255 A
Street, the address listed on Elk's provider number
application, but found that the address did not exist.
Finally, Baxter visited 3300 Fairmount Avenue, the address
listed on Independence's application. At that address, he
found a number of garages that appeared to be vacant.
Baxter then contacted Syme to ask him where his
companies' ambulances were located. Syme told him that
two ambulances were housed at 3300 Fairmount Avenue at
the time, but that no ambulances were housed at 3255 A
Street. In a follow-up letter to Baxter, Syme wrote that Elk
and NCC had moved from 3225 A Street to 3300 Fairmount
Avenue about one year earlier, and that all of the
6
administrative offices and dispatching operations for all
three of the subsidiaries had been moved to Stanton,
Delaware. On April 13, 1992, after receiving the letter from
Syme, Baxter returned to 3300 Fairmount Avenue. He
visited the site twice, once at 12:30 a.m., and again from
4:25 p.m. until approximately 4:45 p.m., but saw no
activity either time. Before leaving the site, Baxter taped the
garage doors so that he could tell if anyone opened them
while he was away. When he returned three days later, the
tape had not been disturbed.
Baxter returned to 3300 Fairmount Avenue in July 1994
along with Klaus Placke, an investigator from Xact, and
found that the garages and attached office space appeared
to be empty. Following their visit to 3300 Fairmount
Avenue, the investigators went to see Syme at his office in
Stanton, Delaware. They asked him where the ambulances
for NCC and Elk were located, and he replied that they
were still housed at 3300 Fairmount Avenue. When the
investigators told him that they had just been to the
location and that it had looked empty, Syme replied that he
had moved most of his operation to Delaware, but that he
still housed one of NCC's ambulances at the Fairmount
Avenue location. He added that NCC's one Philadelphia-
based ambulance was then in Delaware for servicing and
he showed it to the investigators. The investigators asked
Syme why the supposedly Philadelphia-based ambulance
had Maryland tags and a Maryland certification sticker, but
he could not explain the discrepancy.
During the same visit, the investigators asked to see NCC
and Elk's state licenses to operate ambulance services in
Pennsylvania. Syme was unable to find the licenses, but
asked the investigators to return the next day so that he
could give them copies. When the investigators returned the
next day, Syme told them that he had been mistaken, and
that NCC and Elk were not licensed in Pennsylvania and
consequently had no ambulances housed in Philadelphia.
He said that Independence was licensed in Pennsylvania
and operated one ambulance out of 3300 Fairmount
Avenue. Following the visit, Placke, the Xact investigator,
changed NCC and Elk's provider numbers to indicate that
the two companies were Delaware providers that could be
7
reimbursed only at the Delaware rate. He left
Independence's provider number unchanged, and
Independence continued to bill at the Pennsylvania rate.
The Pennsylvania state ambulance licensing authority
was also investigating Syme's Philadelphia operations
during the early- to mid-1990s. Independence originally
received an ambulance license from Pennsylvania in 1992.
In September 1993, however, Michael Tunney of the
Philadelphia region of Pennsylvania's ambulance licensing
authority, prompted by a call from his supervisor at the
state licensing board, inspected Syme's purported 3300
Fairmount Avenue location. Tunney saw no employees and
no activity at the location. He knocked on a door located
next to the garages, but received no response.
Tunney also received applications signed by Syme for
Pennsylvania ambulance licenses for NCC and Elk in
September 1993. Each application listed 3300 Fairmount
Avenue as a location out of which the company operated.
Because he had visited the Philadelphia address only a few
weeks earlier and found no activity, Tunney called Syme to
inquire about the location that he had listed. Syme told him
that there was not much activity at 3300 Fairmount
Avenue. Tunney did not process the applications for NCC
and Elk because, following his conversation with Syme, he
had "a question in [his] mind about the veracity of the
information in the application . . . as to whether or not
[Syme] was really operating in Philadelphia."
Tunney visited the 3300 Fairmount Avenue location
again soon after February 1995, after receiving
Independence's application for relicensing, which
Pennsylvania requires ambulance companies to submit
every three years. He found that the building located at that
address appeared to be empty and received no response
when he knocked. Tunney therefore denied Independence's
application for relicensing.
On March 10, 1998, a grand jury in the District of
Delaware returned a 30-count indictment against Syme and
his corporations, MSC, NCC, Elk, and Independence. The
grand jury later returned a 31-count superseding
indictment against the same defendants for offenses that
8
allegedly occurred between October 1993 and March 1997.
Our references hereafter are to the superseding indictment.
Syme was charged in all counts of the indictment. Counts
1-4 allege mail fraud in violation of 18 U.S.C.S 1341. The
indictment alleges that for each count in this group, Syme
engaged in a "scheme to defraud" the HCFA in at least two
of the following ways: (1) by falsely identifying a
Pennsylvania address for his companies and fraudulently
seeking reimbursement at the higher Pennsylvania rate
when the claims should have been billed at the Delaware or
Maryland rates (the "Pennsylvania rate theory"); (2) by
falsely representing that ambulance transport was
medically necessary (the "medical necessity theory"); (3) by
providing false information about the destination of the
ambulance trip (the "destination theory"); and (4) by
providing false information about the type of treatment that
the patient being transported was receiving (the"treatment
theory").
Counts 1-4 allege that Syme's scheme to defraud caused
the HCFA to send him checks through the U.S. Mail on
four separate occasions to reimburse his companies for the
ambulance trips in question. Counts 5-9 allege wire fraud
in violation of 18 U.S.C. S 1343, pleading that Syme's
companies electronically transmitted reimbursement
requests to Pennsylvania Blue Shield that Syme knew
contained false information. In each count, the indictment
alleges two or more of the four theories of fraud described
above.
Counts 10-29 allege violations of the False Claims Act, 18
U.S.C. S 287. The indictment divides these counts into
three groups. Counts 10-12 apply to the Medicare
payments that the defendants are alleged to have received
fraudulently. Counts 13-17 apply to the reimbursement
and copayments from Medicaid that the defendants are
alleged to have fraudulently received. Counts 10-17 rely on
all four theories of fraud: the Pennsylvania rate theory, the
medical necessity theory, the destination theory, and the
treatment theory. Counts 18-29 allege that Syme and his
companies violated the False Claims Act by submitting
duplicate bills for the same ambulance trip. In addition to
the duplicate billing theory, each count in the 18-29 group
9
also alleges one or more of the four fraud theories described
above.
Count 30 alleges that Syme obstructed justice in
violation of 18 U.S.C. S 1505 by failing to respond properly
to a subpoena duces tecum issued by the Office of the
Inspector General of the Department of Health and Human
Services. Count 31 alleges that Syme made a false
statement relating to a health care matter in violation of 18
U.S.C. S 1035 when he prepared a letter concerning the
application for a provider number by Lifestar Ambulance
Services, the renamed company that he had sold to one of
the former managers of MSC, in which he falsely stated
that "Mr. Robert Syme has no role whatsoever in Lifestar,"
when in fact he remained active in managing the company.
Following a seven-day trial, a jury convicted Syme on all
of the mail and wire fraud counts (1-9), many of the False
Claims Act counts (10-17, 19, 21, 23-25, 27, and 29), and
the false statement count (31). Syme was acquitted on
several of the False Claims Act counts (18, 20, 22, 26, and
28) and on the obstruction of justice count (30). The
corporate defendants were convicted on all counts. After the
trial, all defendants moved for a new trial and for judgment
of acquittal, which the District Court denied in a published
opinion. See United States v. Med. Servs. Corps, Inc., 43 F.
Supp. 2d 499 (D. Del. 1999). The Court sentenced Syme to
a prison term of 37 months on each of the counts for which
he was convicted, to be served concurrently, followed by
three years of supervised release. In addition, the Court
ordered Syme to pay special assessments totaling
$1,750.00, and restitution to the HCFA of $100,000 (a
$300,000 restitution order less a credit of $200,000).
Following his sentencing, Syme filed a timely appeal.1
Because the most difficult issue that Syme raises on appeal
is the validity of the Pennsylvania rate theory, we begin our
discussion with that issue. However, we will first dispose of
_________________________________________________________________
1. The District Court had jurisdiction pursuant to 18 U.S.C. S 3231, and
we have appellate jurisdiction under 28 U.S.C. S 1291 and 18 U.S.C.
S 3742(a).
10
Syme's claims of improper admission of trial evidence in the
margin.2
_________________________________________________________________
2. Syme contends that the District Court committed plain error by
admitting the testimony of two prosecution witnesses. He argues that the
District Court should not have admitted the testimony of Joseph Leaser,
M.D., a physician who had consulted for Xact and it predecessor
company for twenty-four years, and who reviewed the medical records of
several patients whom Syme had transported, or Craig Swartz, a
Medicare fraud examiner employed by Xact. Syme did not object to
Leaser's or Swartz's testimony in the District Court. Therefore, we review
for plain error. See Fed. R. Ev. 103(d); see also infra note 4 (describing
the plain error standard of review).
He contends that Leaser's testimony should not have been admitted as
expert testimony under Federal Rule of Evidence 702 because it could
not "assist the trier of fact to understand the evidence or to determine
a fact in issue." Fed. R. Ev. 702. Leaser reviewed the files of several
patients whose ambulance transportation, the government contended,
was not medically necessary within the meaning of Xact's
reimbursement policy. Syme submits that it was Xact's policy to leave to
the ambulance provider the initial decision on whether ambulance
transport was medically necessary. If the decision was Syme's, the
argument continues, Leaser's testimony should not have been admitted
as expert testimony under Rule 702 because it could not help the jury
to determine whether Syme (who is not a physician) could have in good
faith thought that ambulance transportation was medically necessary.
As the government correctly points out, however, one of the facts that
the prosecutor was required to prove was that "the trips actually were
not medically necessary." We are satisfied that whether an ambulance
trip is actually medically necessary is an issue on which the average
juror could benefit from a physician's expert testimony.
Syme also argues that Leaser's testimony should not have been
admitted as expert testimony even on the issue of actual medical
necessity. He contends that Leaser "rejected[Medicare's] standards
insofar as they treated a patient's need for restraint as a presumptive
justification for use of an ambulance." If the only relevant issue was
whether the ambulance trips in question were actually medically
necessary under the standards set forth in the Medicare regulations,
Syme argues, Leaser had nothing relevant to say on that question. In his
reply brief, Syme extends the argument even further and says that
because Leaser rejected the Medicare standards he failed to satisfy the
requirement of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579(1993), that there be a valid connection between the expert testimony
and the question at issue in the case. Id. at 591.
11
II. Validity of the Pennsylvania Rate Theory
A. The Parties' Contentions
The superseding indictment alleges that Syme and his
companies fraudulently overcharged Medicare and Medicaid
by submitting false bills that stated that the "home
_________________________________________________________________
Syme does not specifically document his claim that Leaser disagreed
with Medicare's treatment guidelines, but he alludes to the following
exchange from Leaser's cross-examination:
Q. Do you agree with me that one of the hallmarks of medical
necessity is if a person, a patient needs restraint?
A. No, -- do you mean medical necessity for ambu lance transport?
Q. Yes.
A. No. I don't believe that you need to take a per son by ambulance
if they require restraint.
Q. We have had documents introduced here which say if there is a
presumption of medical necessity and [sic] the patient needs
restraint. But you would disagree with that?
A. I would disagree with that, because you could t ake a patient in
a geriatric chair or a person in a wheelchair and restrain them in
a
posey vest.
This exchange may demonstrate that Leaser questioned the wisdom of
one of Medicare's guidelines. However, it does not show, as Syme seems
to suggest, that Leaser refused to evaluate the necessity of transporting
patients by ambulance under Medicare's standards. The exchange seems
especially weak evidence of Leaser's refusal to apply Medicare standards
when considered in light of the fact that Leaser had been consulting for
Xact or its predecessor company for around twenty-four years at the
time he testified. Therefore, we think that the District Court did not
violate Rule 702 by allowing Leaser's testimony.
Syme also argues that Leaser's testimony was unfairly prejudicial
when combined with the testimony of Craig Swartz, an Xact Medicare
fraud examiner who testified as a prosecution witness. Syme contends
that Swartz's testimony misled the jury into thinking that, if Leaser
stated that a particular ambulance trip was not medically necessary,
then the reimbursement form that Syme submitted should not have
stated otherwise. We conclude that Swartz's testimony was not unduly
confusing or prejudicial and that it was not error for the District Court
to admit the testimony.
12
stations" of the ambulance companies were located in
Philadelphia rather than in Delaware or Maryland, thereby
getting reimbursed at the higher Pennsylvania rate. The
indictment states that:
At all times material to this indictment, Medicare
authorized reimbursement for ambulance services at
pre-established rates based upon the home station of
the ambulance. If an ambulance's home station was in
Philadelphia, Pennsylvania, the ambulance company
would be reimbursed at the rate for that part of
Pennsylvania. If the ambulance's home station was in
Delaware, the ambulance company would be
reimbursed at the Delaware rate, which was lower than
the rate for Philadelphia, Pennsylvania.
The indictment then goes on to allege that Syme and all of
his companies:
submit[ted] bills to Medicare for ambulance services
under a provider number which would be reimbursed
at a Pennsylvania rate (which was substantially higher
than the Maryland or Delaware rates) although the
home station for the ambulances were [sic] either in
Delaware or Maryland. Such bills should have been
submitted under a Delaware or Maryland provider
number, not under a Pennsylvania provider number.
The District Court also used the term "home station" in its
jury instructions. The Court instructed the jury that in
order to convict on the mail or wire fraud counts, it had to
find that the defendants "knowingly submitted each claim
for reimbursement at a higher Pennsylvania rate, although
the ambulances' home station was in Delaware." 3
_________________________________________________________________
3. In order to establish a violation of the mail or wire fraud statutes, a
prosecutor must prove: (1) the existence of a scheme to defraud; (2) the
participation by the defendant in the particular scheme with the specific
intent to defraud; and (3) the use of the United States mail or of wire
communications in furtherance of the fraudulent scheme. See 18 U.S.C.
SS 1341, 1343; United States v. Hannigan , 27 F.3d 890, 892 (3d Cir.
1994). The elements for a False Claims Act violation are substantially
similar. To establish a violation of the False Claims Act, the government
must prove that: (1) the defendant presented a false or fraudulent claim
13
Syme bases his current challenge on the use of the term
"home station." He contends that defects in the
government's use of the term render the Pennsylvania rate
theory both legally invalid and insufficiently supported by
the evidence presented at trial. Syme submits three
arguments attacking the legal validity of the Pennsylvania
rate theory based on the use of the term "home station."
First, he contends that neither the HCFA nor Xact had
established a clear definition of the term "home station"
during the period at issue in this case. Second, he asserts
that even if "home station" had been defined, there was no
official determination that an ambulance's "home station"
would be the governing standard for determining
reimbursement rates. Third, Syme argues that the
application forms supplied by Xact, which he submitted in
order to get Pennsylvania provider numbers for his
ambulance companies, never asked for the companies'
"home stations," but rather asked for their addresses. Syme
contends that he therefore cannot be convicted of a scheme
to defraud based on the fact that he misrepresented his
companies' "home stations," because he never made any
representations about their "home stations" at all.
Finally, Syme asserts that for the same reasons that he
claims the Pennsylvania rate theory of fraud is legally
invalid, the evidence presented at trial is also insufficient
factually to support his conviction based on the
Pennsylvania rate theory. In addressing these arguments,
we must of course first define our standard of review, which
we set forth in the margin.4
_________________________________________________________________
against the United States; (2) the claim was presented to an agency or
contractor of the United States; and (3) the defendant knew the claim
was false or fraudulent. See 18 U.S.C. S 287; United States v. Thayer,
201 F.3d 214, 222-23 (3d Cir. 1999) (citing United States v. Okoronkwo,
46 F.3d 426, 430 (5th Cir. 1995)). In this case, the theory that Syme
misrepresented the "home stations" of his ambulance companies goes to
both the existence of a "scheme to defraud" (in the case of the mail and
wire fraud counts) and the "false or fraudulent claim against the United
States" (in the case of the False Claims Act counts); it also encompasses
Syme's intent.
4. Syme contends that his trial counsel preserved his argument that the
Pennsylvania rate theory is invalid as a matter of law, and that therefore
14
We agree with Syme that the evidence presented at trial
_________________________________________________________________
we should review this claim under the harmless error standard of review
rather than the plain error standard. The government urges us to apply
the latter standard. For the reasons that follow, we agree with the
government.
At the close of the government's case, Syme moved generally to dismiss
all the counts for failure to state a prima facie case. He later raised a
more specific claim in his Motion for Judgment of Acquittal, arguing that
Xact's policies could not serve as the basis for a conviction because they
did not have the force of law. Syme noted that "[t]he basis of the
Government's claim nullifying the use of the Pennsylvania provider
number was that the policy definitions offered by Xact, or its
predecessor, Blue Shield, represented the de jure law of the land," and
that "[t]he foundation of the prosecution is that the defendants violated
a policy statement of a private or public non-governmental corporation
and not that the defendants violated federal law." Essentially, Syme
argued: (1) that Xact's reimbursement guidelines did not have the force
of federal laws or regulations; and (2) that the scheme to defraud that is
predicate to a federal mail or wire fraud conviction must itself be a
violation of federal law.
The District Court addressed these issues in an opinion accompanying
the order denying the defendant's Motion for Judgment of Acquittal and
for New Trial. There, the Court concluded that it did not matter that Xact
and Medicare did not have the authority to make policy statements with
the force of law because "the `scheme to defraud' itself need not violate
federal law." United States v. Med. Serv. Corps, Inc., 43 F. Supp. 2d 499,
501 (D. Del. 1999). The arguments that Syme presented to the District
Court were not sufficiently similar to the one that he now makes before
this court to justify applying harmless error review. Syme contends on
appeal not that the policies of Xact are insufficient to define Syme's
"scheme to defraud" because they do not have the force of federal law,
but rather that the fraud that the government identified -- falsifying the
"home station" of the ambulances -- could not have occurred because
"home station" was not authoritatively defined during the relevant
period. Syme did not make this argument in the District Court. We will
therefore review Syme's claim for plain error. See Fed. R. Crim. P. 52(b).
Under the plain error standard, a reviewing court may reverse the
district court "only if [it] finds that (1) an error was committed; (2)
the
error was plain, that is, `clear' and `obvious;' and (3) the error
`affected
[the defendant's] substantial rights.' " United States v. Nappi, 243 F.3d
758, 762 (3d Cir. 2001) (quoting United States v. Olano, 507 U.S. 725,
734 (1993)). "If a forfeited error is `plain' and `affects substantial
rights,'
a Court of Appeals `has the authority to order the correction, but is not
15
shows little beyond the fact that there was a general
understanding in the ambulance community of the
definition of the term "home station." The earliest document
that the prosecution presented that defines "home station"
in the reimbursement context is a February 2, 1995 letter
from Xact to an ambulance provider that defines a
transporting vehicle's "home station" as its"point of
departure." Testimony presented at trial also shows that
there was a debate within the ambulance community
during the time relevant to this case as to whether"home
station" was the correct reimbursement standard.
Syme is also correct that none of the forms that he
completed in order to get Pennsylvania provider numbers
asked for the "home stations" of his ambulance companies.
However, two of the provider number applications asked for
both an "address" and a "mailing address;" another form
asked for both a "physical location" and a"mailing
address." Syme supplied Philadelphia addresses as the
"address" and "physical location" as well as the "mailing
addresses" on these forms.
The government counters that "home station" was
sufficiently defined and understood to be the governing
reimbursement standard during the time relevant to the
case. Alternatively, the government argues that Syme's
behavior would constitute fraud under any of the meanings
of "home station" or alternative reimbursement standards
that may have been debated during the relevant period. The
government also contends that it demonstrated a pattern of
deception that is sufficient to demonstrate Syme's intent to
defraud Medicare and Medicaid.
B. Griffin and Yates
As we noted above, the prosecution has presented
alternative theories of guilt to support each count in the
_________________________________________________________________
required to do so.' The Court should exercise its discretion to order such
a correction only if the error, `seriously affects the fairness,
integrity, or
public reputation of judicial proceedings.' " United States v. Stevens,
223
F.3d 239, 242 (3d Cir. 2000) (quoting Olano, 507 U.S. at 734) (internal
citations omitted). The burden is on the defendant to demonstrate that
"plain error" occurred. Olano, 507 U.S. at 734.
16
indictment. Each count rests on two or more of the four
main theories that the government presented: the
Pennsylvania rate theory, the medical necessity theory, the
destination theory, and the treatment theory. See supra at
9. When a criminal defendant appeals a conviction in which
the prosecution presented more than one theory of guilt
and the jury returned a general verdict, we apply the
holding of Griffin v. United States, 502 U.S. 46 (1991).
Griffin restated the longstanding rule that if the evidence is
insufficient to support a conviction on one alternative
theory in a count but sufficient to convict on another
alternative theory that was charged to the jury in the same
count, then a reviewing court should assume that the jury
convicted on the factually sufficient theory and should let
the jury verdict stand. Id. at 49-50. However, under Griffin,
if one of two or more alternative theories supporting a
count of conviction is either (1) unconstitutional, or (2)
legally invalid, then the reviewing court should vacate the
jury verdict and remand for a new trial without the invalid
or unconstitutional theory. Id. at 56 (citing Stromberg v.
California, 283 U.S. 359, 367-68 (1930) (reversing a
conviction where one of the alternative guilt theories was
unconstitutional), and Yates v. United States , 354 U.S. 298,
312 (1957) (reversing a conviction where one of the possible
grounds was legally invalid because it was time-barred)).
The rationale for this distinction is that a jury is
presumed to be able to distinguish factually sufficient
evidence from factually insufficient evidence. That function
is central to its role as fact finder. The jury is not
presumed, however, to be able to distinguish accurate
statements of law from inaccurate statements. Id. at 59;
Tenner v. Gilmore, 184 F.3d 608, 611 (7th Cir. 1999). And
Griffin made it clear that claims regarding the insufficiency
of evidence do not fall into the categories of a legally invalid
or an unconstitutional basis for conviction. The Court
explained:
In one sense "legal error" includes inadequacy of
evidence -- namely, when the phrase is used as a term
of art to designate those mistakes that it is the
business of judges (in jury cases) and of appellate
courts to identify and correct. In this sense "legal error"
17
occurs when a jury, properly instructed as to the law,
convicts on the basis of evidence that no reasonable
person could regard as sufficient. But in another sense
-- a more natural and less artful sense -- the term
"legal error" means a mistake about the law, as
opposed to a mistake concerning the weight or the
factual import of the evidence . . . . [W]e are using
"legal error" in the latter sense.
502 U.S. at 58-59. The question of which side of Griffin's
line the present challenge to the Pennsylvania rate theory
falls -- whether it is a claim about the sufficiency of the
evidence presented on this theory, or (as Syme contends)
an argument that the theory is legally invalid (he does not
argue that it is unconstitutional) -- is dispositive of Syme's
challenge to the theory as a basis for conviction. If we find
that the Pennsylvania rate theory was, at most,
unsupported by the facts presented at trial, then we will let
the challenged counts of conviction stand, because each
one rests on at least one other fraud theory that Syme does
not challenge. If we find that the Pennsylvania rate theory,
as it was alleged in the indictment and charged to the jury,
constituted an error of law, then we must reverse Syme's
conviction on the counts in which the theory was alleged
and remand these counts for a new trial.
A theory upon which a criminal charge rests is legally
invalid under Griffin if the indictment or the district court's
jury instructions are based on an erroneous interpretation
of law or contain a mistaken description of the law. This
"invalid legal theory" exception to the longstanding rule that
general verdicts will stand even if one of the possible
grounds for conviction was unsupported by the evidence,
comes from Griffin's attempt to rationalize Yates v. United
States, 354 U.S. 298 (1957), with the bulk of the Court's
precedents. Prior to Yates, the only exception that the
Court had applied to the rule of presuming that general
verdicts rest on permissible grounds was that, when"any of
the [grounds] in question [was] invalid under the Federal
Constitution, the conviction cannot be upheld." Stromberg,
283 U.S. at 368. The Court applied this exception in many
cases involving "general-verdict convictions that may have
rested on an unconstitutional ground." Griffin, 502 U.S. at
18
55 (listing cases). In Yates, the Court extended the
exception to cover grounds that were not unconstitutional,
but rather were legally invalid. Yates held that the statute
of limitations had already run on the charge that the
defendants had "cause[d] to be organized units of the
[Communist] Party." 354 U.S. at 302. This"organizing"
offense was one of two theories that were the basis for a
conspiracy charge. Id. The question whether the statute of
limitations had run turned on the meaning of the statutory
term "to organize." Id. at 303-304. The lower courts had
construed the term "to organize" to "connote[ ] a continuing
process which goes on throughout the life of an
organization," but the Supreme Court rejected this
definition, finding that "to organize" meant"to enter[ ] into
the creation of a new organization" Id. at 310.
Because the Supreme Court held that the term "organize"
referred to the initial establishment of the Communist
Party, and it was undisputed that the three-year statute of
limitations had run between the time the Communist Party
was initially organized and when the defendants were
indicted, it held that the "organizing" charge was time-
barred. Because it was "impossible to tell which ground the
jury selected," either the "organizing" charge, or the
alternative charge, the Court set aside the jury verdict and
remanded for a new trial. Id. at 312. It did so, however,
based on a finding that the lower courts had erred on a
purely legal question, i.e., the construction of a statutory
term.
There does not appear to have been any dispute in Yates
over the factual issue of when the Communist Party was
initially organized. It was not as if the prosecution in that
case simply failed to present sufficient evidence that the
establishment of the Communist Party took place within
three years prior to the indictment. If that were the case,
then the jury would have been capable of determining that
the facts were insufficient to show that the statute of
limitations had not run and the Court would have
presumed that the jury rested its general verdict on one of
the factually supported grounds. However, because the
lower court misinterpreted the meaning of the statutory
term "to organize," erroneously permitting the"organizing"
19
charge to go to the jury, the jury was faced with a potential
ground for conviction that was based on an invalid
interpretation of the statute. Because the jury is not
assumed to be able to distinguish between correct and
incorrect legal interpretations, the Yates Court reversed the
jury's general-verdict conviction.
Griffin, in addition to referencing a claim that was time
barred as an example of a legally inadequate ground for
conviction, also cited the example of a theory of conviction
that "fails to come within the statutory definition of a
crime." 502 U.S. at 59. Again, this situation presents a
strictly legal question -- the interpretation of whether the
scope of a statutory definition of a crime extends to acts
alleged in an indictment.
C. Analysis
In the present case, neither the indictment nor the
District Court's instructions to the jury relied on erroneous
interpretations of the law or contained mistaken
descriptions of the relevant legal standards regarding the
Pennsylvania rate theory of fraud as an element of Syme's
fraud and False Claims Act charges. The indictment alleges
that Syme's misrepresentation of his companies' home
stations was a "scheme to defraud" within the meaning of
the mail and wire fraud statutes, and a "false or fraudulent
claim" under the False Claims Act, and the prosecution
undertook to demonstrate the existence of that scheme and
Syme's specific intent to engage in the scheme. See supra
note 3 (listing the elements of mail and wire fraud and
False Claim Act violations). Concomitantly, the District
Court instructed the jury that in order to convict Syme for
mail or wire fraud, the prosecution had to demonstrate that
Syme "knowingly submitted each claim for reimbursement
at a higher Pennsylvania rate, although the ambulances'
home station was in Delaware."
The "home station" theory of fraud on which the District
Court instructed the jury certainly falls within the scope of
the fraud statutes and the False Claims Act. To prove the
existence of this scheme and Syme's intent to engage in the
scheme, the government needed to demonstrate that a
20
definition of the term "home station" existed and that Syme
was aware of the meaning of "home station" when he
submitted his claims for reimbursement from Medicare and
Medicaid using a Pennsylvania provider number. But even
if there was no HCFA regulation or written instruction from
Xact on the definition of "home station," and no clear
indication that "home station" was the appropriate
standard for reimbursement, the prosecution could still
have demonstrated that Syme knew that this was the
standard that Xact wanted ambulance companies to apply
and that he knowingly used a Pennsylvania provider
number in order to get paid at a higher rate.
The meaning of the term "home station" and Syme's
intent with respect to falsifying the "home station" of his
ambulance companies was an issue on which both sides
focused at trial. The government presented witnesses to
attempt to show both (1) that "home station" had a
generally recognized meaning during the times relevant to
this case; and (2) that Syme understood the meaning of the
term "home station." For example, the prosecution
presented testimony from Jill Shaffer, a policy coordinator
from Xact, that from 1990-95 "the home station
requirement was that [Xact] reimbursed an ambulance
company based on where [its] ambulance vehicles were
garaged or housed." On cross examination, however,
Shaffer admitted that the definition that she provided for
"home station" came from a section of the Medicare manual
defining "carrier jurisdiction," which referred to the
insurance company with jurisdiction over processing a
claim.
Similarly, government witness Patrick Kennedy, the
founder of the Ambulance Association of Pennsylvania, also
testified that there was an understanding in the ambulance
industry that "home station" meant "where your major
business center would be," i.e., "where your major offices
are . . . where your billing center is . . . [and] [m]ost
importantly, where your communication center is."
However, on cross-examination, Kennedy admitted that
during the times relevant to this case, there was no written
definition of "home station" as it relates to reimbursement
rates. Prosecution witnesses also testified that Syme knew
21
of the different rates paid to Pennsylvania and Delaware
providers and had complained that they were unfair, and
that Xact officials had met with Syme to instruct him on
the proper practices for submitting reimbursement claims.
Thus, the questions whether "home station" had a
meaning, and whether Syme knew that meaning, were
highly disputed issues of fact in this trial, and were
presented to the jury as such.
Because the District Court correctly instructed the jury
that it must find that Syme knowingly engaged in a scheme
to defraud (in the case of the fraud counts) or made a false
claim (in the case of the false claims counts), and because
the jury was presented with conflicting testimony about
whether the term "home station" had a meaning that Syme
was aware of, we presume under Griffin that the jury
focused on and was able to decide this disputed factual
issue. There was a factual dispute regarding the term
"home station," which the jury was competent to resolve.
Under Griffin, we will presume that the jury did resolve this
factual dispute, and that it relied on the Pennsylvania rate
theory only if it found that the government presented
sufficient evidence that the term "home station" had a
meaning that Syme knew.5
We conclude that, while the government simply may have
failed to present sufficient evidence on the definition of the
term "home station" to make out the elements of the fraud
and False Claims Act charges, neither the indictment nor
the District Court's instructions contained a "mistake about
the law" regarding the Pennsylvania rate theory that, under
Griffin, would require reversing the counts in question. 502
U.S. at 59. Whether the government succeeded in
presenting sufficient evidence so that a jury could have
convicted Syme beyond a reasonable doubt is a question we
need not reach, because even assuming that the evidence
_________________________________________________________________
5. In contrast, the jury in Yates could not have been presumed to have
focused on the legal issue of the proper interpretation of the statutory
term "to organize." This legal issue was not presented to the jury, and at
all events was ultimately a question for the court instead of the jury.
Similarly, a jury cannot be presumed to distinguish a constitutional
ground for conviction from an unconstitutional one.
22
presented was insufficient to convict Syme on the
Pennsylvania rate theory, Griffin instructs that we should
presume that the jury relied on an alternative theory of
guilt within the same count that is both legally valid and
supported by sufficient evidence. Because Syme leaves
unchallenged at least one of the fraud theories charged in
each fraud and False Claims Act count for which he was
convicted, we must uphold the jury verdict on each of these
counts.
Because we will not remand these counts for a new trial
(except for count 25, which we will remand because the
District Court constructively amended it, see infra Part III),
we need not reach Syme's challenges to the factual
sufficiency of the medical necessity, destination, and
treatment theories of fraud, which he challenges for some
of the counts for which he was convicted. If we were to
vacate and remand any other counts for a new trial, then
we would need to evaluate each challenged theory of guilt
to determine whether the evidence presented at the first
trial was sufficient. If we found that it was not sufficient,
then we would be required to remove that theory from the
scope of the new trial. See Burks v. United States, 437 U.S.
1, 17-18 (1978); see also infra Section III.D. However,
because Syme leaves unchallenged at least one alternative
theory of guilt on each count of conviction, we must affirm
those counts and need not evaluate the evidentiary
sufficiency on the alternative theories of guilt that Syme
does challenge. We address below Syme's challenge to the
evidentiary sufficiency of the "medical necessity" theory in
count 25. See infra Section III.D.
III. Constructive Amendment to Counts 18-29
Syme contends that the District Court erred by
instructing the jury on the Pennsylvania rate theory of
fraud for counts 18-29, even though the indictment does
not allege the theory in those counts. Syme did not raise
this argument in the District Court and we therefore apply
the plain error standard of review. See Fed. R. Crim. P.
52(b); see also supra note 4.
23
A. Did the District Court Err by Constructively
Amending the Indictment?
A constructive amendment occurs where a defendant is
deprived of his "substantial right to be tried only on charges
presented in an indictment returned by a grand jury."
United States v. Miller, 471 U.S. 130, 140 (1985) (quoting
Stirone v. United States, 361 U.S. 212, 217 (1960)) (internal
quotation marks omitted). A constructive amendment to the
indictment constitutes "a per se violation of the fifth
amendment's grand jury clause." United States v. Castro,
776 F.2d 1118, 1121-22 (3d Cir. 1985).
In their text, counts 18-29 of the superseding indictment
charge Syme under three alternative theories of fraud: (1)
that he submitted Medicare forms indicating that
ambulance trips were medically necessary when they were
not ("medical necessity"); (2) that he falsified the description
of the treatment, service, or destination of the ambulance
trip ("treatment, service, or destination"); and (3) that he
submitted duplicate bills for single ambulance trips, one
using a Delaware ambulance provider number, and one
using a Pennsylvania ambulance provider number
("duplicate billing"). The text of the indictment for counts
18-29 does not specifically charge Syme under the
Pennsylvania rate theory of fraud. However, a chart
accompanying these counts, which lists the various
theories supporting each charge, does list the Pennsylvania
rate theory in the sections for counts 19, 21, 23, 24, 27,
and 29. The chart appeared in the superseding indictment
as follows:
24
ID: Graphic of Counts XVIII through XXIX
25
Although the Pennsylvania rate theory was neither
mentioned in the text of the indictment, nor listed in the
accompanying chart for several of the counts in the 18-29
group, the District Court instructed the jury that it could
convict on all of the counts in this group based on the
Pennsylvania rate theory. In its jury instructions, the Court
stated:
The next criminal act that has been charged is false
claims. Counts 10 through 29 of the indictment charge
that the defendants did make and present and caused
to be made and presented to the Health Care Financing
Administration, . . . claims for services provided to
Medicare and/or Medicaid patients, the defendants
knowing the claims to be false and fraudulent, which
is prohibited by federal law.
The indictment charges that defendants falsely
submitted bills that were not medically necessary and
were not for covered services, and that bills were
improperly submitted at the higher Pennsylvania rate .
(emphasis added). The District Court repeated its erroneous
instruction on the Pennsylvania rate theory in its response
to the following question from the deliberating jury (which
references the abbreviations for the government's different
theories of fraud in the case, explained in the margin)6:
First let me read the question. The question says:
"Must we find all elements of the false statement
proven?" Then, there is parentheses, "(i.e., PA, MN,
_________________________________________________________________
6. The superseding indictment defines the abbreviations that the
prosecution and the jury used to refer to the different theories of fraud
presented. "PA" refers to the scheme whereby Syme "would submit bills
. . . for transportation services billed at the Pennsylvania rate instead
of
the Delaware or Maryland rate." "MN" means a scheme in which the
defendants "intentionally falsely represent[ed] that the [ambulance]
transportation was medically necessary." "Dest." refers to the practice of
"intentionally . . . send[ing] false and misleading information concerning
the destination" of the ambulance trip. And finally, "Treat." means
"intentionally transmit[ting] false and misleading information concerning
the . . . reason for the transportation," i.e., the medical treatment
sought.
26
treat., dest.)," close parens, "to render a verdict on each
count, or would only one element suffice?"
The first part of my answer is this: In your
deliberations, to render a verdict on the false statement
counts, you must find that the government has proven
beyond a reasonable doubt each element of the crime
of making a false statement. And in the instructions I
provided you, I gave you the law of what the elements
are for the crime of false statement.
. . . .
Now, in the question, the second part of my answer is,
when you refer to items such as "PA," "MN," "Treat."
and "Dest." as elements, I interpret your question to
mean entries on the statements. In order to find on an
entry, you would only have to find one of the entries
was proven to be false beyond a reasonable doubt, as
long as all the other elements were proven to your
satisfaction beyond a reasonable doubt.
So I answer you in two parts. Using the word
"element," all elements of the crime have to be proven
beyond a reasonable doubt. One of the elements is
there has to be a false entry. It only has to be proven
beyond a reasonable doubt that one of the entries
entered meets all of the elements.
The government concedes that the District Court
"committed error in its instructions to the jury on Counts
18, 20, 22, 25, 26 and 28" because the sections of the
indictment corresponding to these counts do not reference
the Pennsylvania rate theory. As to the remaining counts in
the 18-29 group, the government argues that the District
Court did not constructively amend the indictment because
the Pennsylvania rate theory was alleged in the indictment
for these counts. The government relies on the chart that
was included in the indictment. See supra at 25. The chart
lists the various charges, and the theories on which each is
based. Each horizontal row of the chart represents a
different count of the indictment. Each vertical column in
the chart has a heading telling which information
corresponds to which count (e.g., "Billing Date" or "Money
Billed"). One heading labeled "False State." refers to the
27
category of statement or statements that the count alleges
Syme to have falsely made on his reimbursement forms.
This box contains abbreviations that correspond with the
different categories of information that the government
charged Syme with falsifying.
The abbreviation "PA" appears in the "False State."
column for the rows corresponding to counts 19, 21, 23,
24, 27, and 29. As we explained above, see supra note 6,
"PA" is defined earlier in the indictment to mean
"submit[ting] bills . . . for transportation services billed at
the Pennsylvania rate instead of the Delaware or Maryland
rate." Therefore, argues the government, Syme was
effectively indicted in these counts on the Pennsylvania rate
theory and the District Court therefore did not amend these
counts in its jury instructions or its answer to the jury's
question. Syme responds that including the term"PA" in
the chart corresponding to the counts in question was
alone insufficient when the theory was not also described in
the text of the indictment that corresponded to these
counts. It is particularly confusing, argues Syme, because
when "the same `PA' abbreviation was used in a chart
pertaining to the other fraud and false claims counts, it was
used together with charging language."
Although the indictment is below the level of clarity to
which prosecutors should aspire, we agree with the
government that the chart sufficiently alleges the
Pennsylvania rate theory for counts 19, 21, 23, 24, 27, and
29 for the purpose of determining whether there has been
a constructive amendment to the indictment. There is
nothing impermissible about setting out allegations in an
indictment by a chart as long as the terms used in the
chart are clearly defined, as they were here. Cf. United
States v. Heath, 122 F.3d 682, 684 (8th Cir. 1997) (holding
that it was not error for a sentencing court to"consider all
of the acts charged in the indictment" including a chart
that was "incorporated by reference" in one of the counts).
Indeed, Federal Rule of Evidence 1006 recommends the
value of presenting evidence to a jury in the form of a chart
when doing so would increase the clarity of presentation. In
sum, while the use of charts in this indictment is somewhat
inconsistent internally, we find that the chart
28
accompanying counts 19, 21, 23, 24, 27, and 29 makes it
sufficiently clear that those counts alleged the Pennsylvania
rate theory. Therefore, we find that the District Court erred
by constructively amending the indictment only as to
counts 18, 20, 22, 25, 26 and 28.
B. Was the Error Clear or Obvious?
The government concedes that the District Court's error
was clear with respect to counts 18, 20, 22, 25, 26, and 28.
Cases from the Supreme Court and this court hold that it
violates the Grand Jury Clause of the Fifth Amendment
when a court instructs a jury on a ground for conviction
that is not fully contained in the indictment. See Miller, 471
U.S. at 140; Castro, 776 F.2d at 1121-22. Nowhere in
counts 18, 20, 22, 25, 26, or 28, including the chart, does
the indictment allege the Pennsylvania rate theory.
Therefore, we agree that it was clear error for the District
Court to instruct the jury on the Pennsylvania rate theory
for those counts.
C. Did the Error Affect Syme's Substantial Rights?
Under plain error review, a defendant must also show
that the clear error " `affected [the defendant's] substantial
rights.' " United States v. Nappi, 243 F.3d 758, 762 (3d Cir.
2001) (quoting United States v. Olano, 507 U.S. 725, 734
(1993)). "In most cases, the language about affecting
substantial rights `means that the error must have been
prejudicial,' that is, `[i]t must have affected the outcome of
the district court proceedings.' " United States v. Stevens,
223 F.3d 239, 242 (3d Cir. 2000) (quoting Olano , 507 U.S.
at 734). Syme was found not guilty on counts 18, 20, 22,
26, and 28. Therefore, the constructive amendment of these
counts obviously did not affect his substantial rights. That
leaves only the question whether the constructive
amendment of count 25 affected Syme's substantial rights.
Syme does not attempt to demonstrate that the
constructive amendment to count 25 was prejudicial.
Instead, he submits that our holding in United States v.
Castro, 776 F.2d 1118, 1121-22 (3d Cir. 1985), that a
constructive amendment is per se reversible error, compels
29
us to find that a constructive amendment per se affects a
defendant's substantial rights under plain error analysis.
The government argues the opposite, maintaining that
under plain error review, it is the defendant's burden to
show that the constructive amendment was prejudicial.
Neither Castro nor United States v. Somers, 496 F.2d 723(3d Cir. 1974), the Third Circuit case on which Castro relies
for the proposition that a constructive amendment is per se
reversible, specify whether the per se rule that they cite
applies under both harmless error and plain error review.
Stirone v. United States, 361 U.S. 212 (1960), the U.S.
Supreme Court opinion that both Castro and Somers cite as
authority to support the per se rule, reviewed a
constructive amendment to which the defendant raised an
objection in the district court, and thus does not
necessarily extend the per se rule to the plain error context.
See id. at 214.
However, even if the general statements from Castro and
Somers must be read to extend to the plain error context,
it is uncertain whether this application of the per se rule
has survived Olano, which recognized broader discretion for
appellate courts exercising plain error review. See United
States v. Dipento, 242 F.3d 1090, 1095 (9th Cir. 2001)
(noting that it is uncertain whether the Ninth Circuit's per
se reversal rule for constructive amendments under plain
error review has survived Olano, but declining to decide).
Several courts of appeals have considered the question
whether a constructive amendment is per se reversible
under the plain error standard, but the circuits are divided
and the resulting law is checkered, as explained in the
margin.7 However, the question whether the per se reversal
_________________________________________________________________
7. The Fourth Circuit, sitting en banc, has held that because a
constructive amendment is per se error in the harmless error context, it
also per se satisfies the "affects substantial rights" prong of the plain
error test. See United States v. Floresca, 38 F.3d 706, 714 (4th Cir.
1994)
(en banc).
In the Ninth Circuit, "it was established . . .[prior to Olano] that a
constructive amendment required reversal, even under plain error
review." United States v. Dipento, 242 F.3d 1090, 1095 (9th Cir. 2001).
The Ninth Circuit has twice faced the question whether this rule has
30
rule of Castro and Somers applies in the context of plain
error review appears to be one of first impression for us.
As noted above, Olano stated that in order for an error to
"affect substantial rights" under the plain error test, the
defendant usually must show that the error was
"prejudicial," that is that it "affected the outcome of the
district court proceedings." 507 U.S. at 734. However, as
we recently recognized in United States v. Adams , 252 F.3d
276 (3d Cir. 2001), "the Supreme Court has cautioned that
some errors to which no objection was made should be
`presumed prejudicial' if the defendant cannot make a
_________________________________________________________________
survived Olano, but declined to decide it, because it found that the error
was prejudicial, and thus that it satisfied the plain error test. See id.;
United States v. Shipsey, 190 F.3d 1081, 1087 (9th Cir. 1999).
The Seventh Circuit recently purported to decline to reach the question
whether a constructive amendment is per se reversible in the plain error
context, but in an earlier case it seems to have reached the question and
concluded that a defendant must show prejudice to succeed in a plain
error challenge to a constructive amendment. Compare United States v.
Cusimano, 148 F.3d 824, 828 n.3 (7th Cir. 1998) (noting that the court
"need not reach the issue of whether constructive amendments of
indictments are always reversible because we conclude no amendment
occurred"), with United States v. Remsza, 77 F.3d 1039, 1044 (7th Cir.
1996) (applying the plain error framework's prejudice test to a
constructive amendment and declining to reverse the conviction because
the defendant "suffered no prejudice").
The D.C. Circuit and Second Circuit have both, after Olano,
acknowledged that constructive amendments are per se reversible under
harmless error review, but have nevertheless placed the burden on the
defendant to show that the constructive amendment was prejudicial
under plain error analysis. See United States v. Lawton, 995 F.2d 290,
294 (D.C. Cir. 1993); United States v. Vebeliunas, 1996 U.S. App. LEXIS
8727, at *22 (2d Cir. Feb. 21, 1996) (deciding, based on defendant's
concession, that he could prevail under the plain error standard only by
demonstrating that he was prejudiced). While the Fifth Circuit maintains
a per se reversal rule for constructive amendments in the harmless error
context, it has not addressed whether the same rule applies under plain
error review because, citing concerns about defendant "sandbagging," it
concluded that it would exercise its discretion not to reverse a
conviction
even if all four prongs of the plain error test were met. See United
States
v. Reyes, 102 F.3d 1361, 1365 (5th Cir. 1996).
31
specific showing of prejudice." Id. at 285 (quoting Olano,
507 U.S. at 735). We also noted that under Olano , "there
may be a special category of forfeited errors that can be
corrected `regardless of their effect on the outcome,' " and
stated our assumption that this category is coextensive
with the category of "structural" constitutional errors. Id. at
285 & n.6 (quoting Olano, 507 U.S. at 735). We concluded
that "Olano dictates that when a defendant fails to object[,]
. . . his claim on appeal is reviewed for plain error -- which
requires the defendant to make a specific showing of
prejudice, unless he can show that the error should be
presumed prejudicial, or that the error belongs in a special
category of errors that should be corrected regardless of
prejudice (i.e., the category of structural errors)." Id. at 285.
Adams addressed a denial of the right of allocution (i.e.,
the right of a criminal defendant to make a statement prior
to sentencing). Adams did not reach the issue whether the
denial of the right of allocution constituted structural error;
rather it held that it fell into the other category of errors
that should be presumed prejudicial. The question in this
case, therefore, is whether constructive amendments fall
into either of the two exceptions to the general rule that a
defendant must demonstrate prejudice under plain error
review.
We turn first to the question whether constructive
amendments fall into Olano's category of"those errors that
should be presumed prejudicial if the defendant cannot
make a specific showing of prejudice." Olano , 507 U.S. at
735. In Adams, we found that the denial of a defendant's
constitutional right of allocution falls within Olano's
category of "errors that should be presumed prejudicial" in
the plain error context. 252 F.3d at 287 (quoting Olano,
507 U.S. at 735) (internal quotation marks omitted). We
noted that "[g]iven the nature of the right[of allocution] and
the difficulty of proving prejudice from its violation, we
conclude that we should presume prejudice when a
defendant shows a violation of the right and the
opportunity for such a violation to have played a role in the
district court's sentencing decision." Id. at 287.
Like a denial of the right of allocution, a constructive
amendment also violates a basic right of criminal
32
defendants, the grand jury guarantee of the Fifth
Amendment. We follow the holding of Adams that some
serious errors should be presumed prejudicial in the plain
error context even if they do not constitute structural errors
and find that constructive amendments fall into that
category.8 Similar to the plight of a defendant who is denied
the right of allocution, it is very difficult for a defendant to
prove prejudice resulting from most constructive
amendments to an indictment. In the present case, for
example, it is nearly impossible for Syme to demonstrate
that he was convicted on count 25 based on the
Pennsylvania rate theory, rather than on one of the other
theories of guilt pleaded in that count (i.e., that the
constructive amendment altered the outcome on that
count), even though there is a substantial possibility that
he was convicted based on the Pennsylvania rate theory. As
Syme points out, the District Court identified the
Pennsylvania rate theory as the "crux" of the government's
case. Therefore, we will apply in the plain error context a
rebuttable presumption that constructive amendments are
prejudicial (and thus that they satisfy the third prong of
plain error review).9
_________________________________________________________________
8. We note that our holding today is narrower than the rule that Adams
applied because constructive amendments are constitutional errors that
are of sufficient magnitude that they cannot be dismissed as harmless
when a defendant objects to them in the district court. See Stirone, 361
U.S. at 217; Castro, 776 F.2d at 1121-22. By contrast, the right of
allocution is not grounded in the Constitution. See Adams, 252 F.3d at
288.
9. We recognize that the presumption that we apply, like any exception
to the general rule that the burden is on the defendant to demonstrate
all of the prongs of the plain error test, may increase the likelihood of
defendants "sandbagging," i.e., failing to object to an error at the trial
level in order to keep an issue for appeal as insurance in the event they
are convicted. The Fifth Circuit cited its concerns about sandbagging as
the reason for its refusal to notice plain error in the constructive
amendment context. See Reyes, 102 F.3d at 1365. There are, however,
two reasons why the potential instances of sandbagging arising from the
presumption that we apply today will be limited. First, constructive
amendments are a narrowly defined category of errors, which arise
relatively infrequently. The presumption of prejudice under plain error
analysis does not extend to the more frequently encountered category of
33
Applying the rule that constructive amendments are
presumptively prejudicial under plain error review to the
present case, we must determine whether the government
has effectively rebutted the presumption that the
constructive amendment was prejudicial. The government
argues that the pattern of counts on which the jury
convicted Syme reveals that it did not rely on the District
Court's erroneous instructions, and that Syme was
therefore not prejudiced by the constructive amendment.
The jury convicted Syme on all of the counts in the 18-29
range in which the Pennsylvania rate theory was alleged in
the chart accompanying the indictment but found him not
guilty on all but one of the counts in which the
Pennsylvania rate theory was not alleged. This pattern
holds for all of the counts in this range except for count 25,
in which the Pennsylvania rate theory was not alleged, but
on which the jury convicted Syme. Thus, the government
contends that the jury actually relied on the chart
accompanying the indictment rather than the District
Court's instructions and that Syme therefore could not
have been prejudiced by the erroneous jury instructions.
We find this argument unconvincing. We do not believe
that the "pattern of convictions" is sufficient to support the
conclusion that the government urges us to draw about the
jury's motivations, i.e., that it relied on the chart and
ignored the Court's instructions. As a rule, we presume the
opposite -- that the jury follows a district court's
_________________________________________________________________
variances from an indictment, which may be dismissed as harmless even
when properly objected to at trial. See, e.g. , Castro, 776 F.2d at 1121 &
n.1 (distinguishing constructive amendments from variances). Second,
even with a presumption of prejudice in plain error analysis of
constructive amendments, defendants who may be considering a
sandbagging strategy still risk that an appellate court will exercise its
discretion to refuse to notice plain error if the defendant fails to
object
to the error at the trial level. See Fed. R. Crim. P. 52(b) ("Plain errors
or
defects affecting substantial rights may be noticed although they were
not brought to the attention of the court.") (emphasis added); see also
Olano, 507 U.S. at 732 (noting that appellate courts are not required to
notice plain error, but may do so at their discretion). Appellate courts
will be particularly reluctant to notice a constructive amendment as
plain error if they suspect that the defendant was sandbagging.
34
instructions. See, e.g., Jermyn v. Horn , 266 F.3d 257, 312
(3d Cir. 2001). We therefore conclude that the government
has not rebutted the presumption that the constructive
amendment was prejudicial.
Applying a presumption of prejudice to our plain error
review of this constructive amendment, we conclude that
the constructive amendment to count 25 affected Syme's
substantial rights.10 Leaving this error uncorrected would
seriously affect the fairness and integrity of the proceeding.
See Olano, 507 U.S. at 736. We will therefore exercise our
discretion to vacate Syme's conviction on count 25 of the
superseding indictment and remand for a new trial on that
count.
D. Was the Evidence Presented Sufficient for
the Jury to Convict Syme Based on the
"Medical Necessity" Theory of Fraud for
Count 25?
Syme challenges the "medical necessity" theory of fraud
_________________________________________________________________
10. Because we hold that constructive amendments are presumptively
prejudicial under plain error review, and that the government cannot
rebut that presumption in this case, we need not address the question
whether constructive amendments are structural errors (in which case
we assume they would constitute per se reversible error even under plain
error review). We note, however, that it is doubtful that constructive
amendments are structural errors as the Supreme Court has defined
that category. In its two most recent structural error cases, the Court
listed the categories of errors that it has found to be structural. See
Johnson v. United States, 520 U.S. 461, 468 (1997) (noting that the
Court has "found structural errors only in a very limited class of cases")
(citing Sullivan v. Louisiana, 508 U.S. 275 (1993) (erroneous reasonable-
doubt instruction to jury); Vasquez v. Hillery , 474 U.S. 254 (1986)
(unlawful exclusion of grand jurors of defendant's race); Waller v.
Georgia, 467 U.S. 39 (1984) (the right to a public trial); McKaskle v.
Wiggins, 465 U.S. 168 (1984) (the right to self-representation at trial);
Gideon v. Wainright, 372 U.S. 335 (1963) (a total deprivation of the right
to counsel); Tumey v. Ohio, 273 U.S. 510 (1927) (lack of an impartial
trial judge)); see also Neder v. United States , 527 U.S. 1, 8 (1999)
(citing
the same cases). Notably, neither Johnson nor Neder cited Stirone or
listed constructive amendments as one of the narrow class of recognized
structural errors.
35
in several of the fraud and False Claims Act counts for
which he was convicted. As we explained above, we need
not reach the question whether the evidence was sufficient
to support the "medical necessity" theory on all of the
counts in which it was alleged because each count
contained an alternative theory of fraud that Syme does not
challenge on this appeal. Therefore, under the rule from
United States v. Griffin, 502 U.S. 46 (1991), we affirm the
convictions, assuming that they rested on the factually
supported ground. However, because we reverse count 25
and remand for a new trial thereon, we must consider
Syme's challenge to the factual sufficiency of the"medical
necessity" theory of fraud pleaded in that count.
Citing Burks v. United States, 437 U.S. 1 (1978), Syme
contends that if we find that there was not sufficient
evidence presented at trial to support the medical necessity
theory as it applies to count 25, we must exclude it from
the new trial that we order on this count. Syme's trial
counsel moved to dismiss the case for insufficient evidence
at the close of the government's case, thus preserving the
issue for appeal. We will review Syme's challenge to the
sufficiency of the evidence to support the "medical
necessity" theory of fraud in count 25 under the harmless
error standard. See Fed R. Crim. P. 52(a).
When the sufficiency of the evidence to support a jury's
verdict is challenged, "we must view the evidence in the
light most favorable to the government and must sustain
the jury's verdict if a reasonable jury believing the
government's evidence could find beyond a reasonable
doubt that the government proved all the elements of the
offense." United States v. Pressler, 256 F.3d 144, 149 (3d
Cir. 2001) (quoting United States v. Rosario, 118 F.3d 160,
163 (3d Cir. 1997)) (internal quotation marks and
alterations omitted). In fact, "only when the record contains
no evidence, regardless of how it is weighted, from which
the jury could find guilt beyond a reasonable doubt, may
an appellate court overturn the verdict." United States v.
Anderson, 108 F.3d 478, 481 (3d Cir. 1997) (quoting United
States v. McNeill, 887 F.2d 448, 450 (3d Cir. 1989))
(internal quotation marks and alterations omitted).
36
Count 25 refers to an August 3, 1994 ambulance trip in
which NCC transported 80-year-old patient Ruth Graham.
Dr. Leaser, the government's expert medical witness,
testified that, based on his review of Graham's medical files,
it was his opinion that it was not necessary to transport
Graham by ambulance. Leaser based his opinion that
ambulance transport was not necessary for Graham largely
on notes made by the medical personnel at the nursing
home where Graham lived, which indicated that she was
ambulatory and could sit up unassisted. He cited a record
that stated that as of January 1994, Graham was able to
ambulate without assistance. He also noted that Graham's
records indicated that in late March 1994, she was able to
sit up without assistance and participate in an
occupational therapy session.
But the government asked Leaser only if he had reviewed
"the medical records for Graham for [the] dates of service
January 20th, 1994 and March 17th, 1994." Leaser did not
mention consulting any medical evidence recorded after
March 1994, and his testimony suggests that he did not
review Graham's medical files for dates after March 1994.
Leaser noted that, in addition to Graham's medical records
near the January 20, 1994 and March 17, 1994 ambulance
trips, he "also looked at one other date . . . [on which] there
was an ambulance transport . . . 2/16/94." (emphasis
added). However, Graham's health could have deteriorated
during the more than four months that passed between the
date of the last medical record upon which Leaser relied
and the August 3, 1994 ambulance trip in question.
Therefore, although we "view the evidence and the
inferences logically deducible therefrom in the light most
favorable to the government," McNeill, 887 F.2d at 450, we
conclude that due to the government's failure to put forth
any evidence more current than March 1994, no reasonable
jury could find beyond a reasonable doubt that Graham's
August 3, 1994 ambulance trip was not medically
necessary.
Because we conclude that the government presented
insufficient evidence for a reasonable jury to have convicted
Syme on count 25 based on the "medical necessity" theory
in the first trial, we must address the question whether to
37
allow the government to retry that theory on remand, or to
limit the remand exclusively to the "treatment" theory
(which Syme does not challenge). Syme argues that Burks
instructs this court not to allow the government to retry a
theory on which the government presented insufficient
evidence the first time around. In Burks, the Supreme
Court considered whether the Double Jeopardy Clause of
the U.S. Constitution bars an appellate court that reverses
a conviction for insufficiency of the evidence presented at
trial from remanding the count of conviction for a new trial.
The court of appeals in Burks (1) found that at trial the
"Government had failed to come forward with sufficient
proof of petitioner's capacity to be responsible for criminal
acts," (2) held that the district court should have entered a
judgment of acquittal in the first instance, and (3)
remanded the case for a new trial. 437 U.S. at 10-11. The
sole issue before the Supreme Court was whether it is
proper for an appeals court to remand a case for a new trial
after finding that the verdict was insufficiently supported by
the evidence presented at trial.
The Court found that it is not proper, holding that the
"Double Jeopardy Clause forbids a second trial for the
purpose of affording the prosecution another opportunity to
supply evidence which it failed to muster in the first
proceeding." Id. at 11. The Court has stated that this
principle, which "prevents the State from honing its trial
strategies and perfecting its evidence through successive
attempts at conviction," lies "at the core of the Clause's
protections." Tibbs v. Florida, 457 U.S. 31, 41 (1982). While
Burks held that it was improper to order retrial of a whole
count that the evidence was insufficient to support, we see
no reason why the Double Jeopardy Clause would not also
bar retrial on an alternative theory of guilt that the evidence
was insufficient to support in a single count of conviction.
The government does not argue that this error was
harmless. Therefore, we will restrict the scope of the new
trial on count 25 to the "treatment" theory, excluding both
the Pennsylvania rate theory (because it was not alleged in
the indictment), and the "medical necessity" theory
(because the government presented insufficient evidence to
support it in the first trial).
38
IV. Upward Adjustment for "Sophisticated Means"
under the Sentencing Guidelines
Syme argues that the District Court violated the Ex Post
Facto Clause by applying a two-level sentence enhancement
for the commission of fraud by "sophisticated means"
pursuant to S 2F1.1(b)(5)(c) (1998) of the United States
Sentencing Guidelines. Because Syme raises this objection
for the first time on appeal, we review the claim under the
plain error standard. See Fed. R. Crim. P. 52(b); see also
supra note 4.
The "sophisticated means" enhancement did not become
effective until November 1, 1998, more than a year after the
last conduct charged in the indictment. We have held that
"[a]s a general rule, sentencing courts must apply the
guidelines in effect at the time of sentencing, not at the
time of the crime," but that where, as here,"such
retroactivity results in harsher penalties, Ex Post Facto
Clause problems arise, and courts must apply the earlier
version." United States v. Kopp, 951 F.2d 521, 526 (3d Cir.
1991); see also U.S.S.G. S 1b1.11(b) (2001) ("If the court
determines that use of the Guidelines Manual in effect on
the date that the defendant is sentenced would violate the
ex post facto clause of the United States Constitution, the
court shall use the Guidelines Manual in effect on the date
that the offense of conviction was committed.").
The government concedes that the first two prongs of
plain error review are met, i.e., that the District Court erred
by applying the "sophisticated means" enhancement, and
that this error was clear. The government challenges the
third prong of the plain error standard, however,
contending that Syme's substantial rights were not
prejudiced by the error because the range of possible
sentences under the correct sentencing level (level 19,
which calls for a sentence of 30-37 months) overlaps with
the range of sentences under the erroneous sentencing level
(level 21, which yields a sentence of 37-46 months).
However, in United States v. Knight, 266 F.3d 203 (3d Cir.
2001), we held that under plain error review, "an error in
application of the Guidelines that results in use of a higher
sentencing range should be presumed to affect the
defendant's substantial rights." Id. at 207. As does this
39
case, Knight addressed the situation where the erroneous
sentencing range overlapped with the correct sentencing
range. The government has failed to rebut this presumption
of prejudice. We conclude that this error too "seriously
affects the fairness, integrity, or public reputation of
judicial proceedings" to be left uncorrected. United States v.
Olano, 507 U.S. 725, 736 (1993) (internal quotation marks
and alternation omitted). Therefore, we will vacate Syme's
sentence and remand to the District Court with
instructions to sentence Syme without applying the
"sophisticated means" enhancement.
V. Did the Restitution Order Violate Apprendi?
The District Court ordered Syme to pay $100,000 in
restitution to the HCFA (a $300,000 restitution order less a
$200,000 credit) pursuant to the Victim and Witness
Protection Act (VWPA), 18 U.S.C. S 3663. Syme contends
that the restitution order violates Apprendi v. New Jersey,
530 U.S. 466 (2000). Syme failed to raise this objection in
the District Court, and therefore we review for plain error.
See Fed. R. Crim. P. 52(b); see also supra note 4.
The operative rule from Apprendi is as follows: "Other
than the fact of prior conviction, any fact that increases the
penalty for a crime beyond the prescribed statutory
maximum must be submitted to a jury, and proved beyond
a reasonable doubt." 530 U.S. at 490. We consider
restitution orders made pursuant to criminal convictions to
be criminal penalties. United States v. Edwards , 162 F.3d
87, 91 (3d Cir. 1998) (holding that restitution ordered
under the Mandatory Victims Restitution Act (MVRA), 18
U.S.C. S 3663A, constitutes punishment for the purpose of
Ex Post Facto Clause analysis); United States v. Sleight, 808
F.2d 1012, 1020 (3d Cir. 1987) (finding that under the
Federal Probation Act, restitution "remains inherently a
criminal penalty"); United States v. Palma , 760 F.2d 475,
479 (3d Cir. 1985) (holding that a restitution ordered under
the VWPA is a criminal penalty). We therefore hold that
restitution ordered under 18 U.S.C. S 3663 constitutes "the
penalty for a crime" within the meaning of Apprendi. The
jury in this case was not charged with finding the amount
of restitution owed to the HCFA. Therefore, the question is
40
whether the District Court's restitution order increased
beyond the statutory maximum the penalties that Syme
faced. If so, the order violated Apprendi.
Section 3663(a)(1)(A) of the VWPA provides: "The court,
when sentencing a defendant convicted of an offense under
this title, . . . may order, in addition to or, in the case of
misdemeanor, in lieu of any other penalty authorized by
law, that the defendant make restitution to any victim of
such offense . . . ." 18 U.S.C. S 3663(a)(1)(A) (emphasis
added). The highlighted language specifically indicates that
restitution orders are penalties that a district court may
impose when sentencing a defendant for any offense under
title 18. Restitution orders have long been treated as part of
the sentence for the offense of conviction, and not, as Syme
appears to contend, separate enhancements to the
underlying offense. See, e.g., Sleight , 808 F.2d at 1020(holding that "restitution . . . is imposed as a part of
sentencing"); Palma, 760 F.2d at 479 (noting that the
legislative history of the VWPA "amply demonstrates that
Congress intended restitution to be an integral part of the
sentencing process").
Therefore, because the language of section 3663
specifically applies that section to all offenses defined in
title 18, and because it has been the traditional practice of
district courts to include restitution as part of the sentence
for the offense of conviction, we think that the appropriate
place to look for the statutory maximum as that term
applies in the Apprendi context, is the restitution statute
itself. But section 3663 does not specify a maximum
amount of restitution that a court may order. The statute
provides guidelines that a sentencing judge may use to
determine the amount of restitution, but does not prescribe
a maximum amount. The Apprendi rule therefore does not
apply to restitution orders made pursuant to 18 U.S.C.
S 3663, because Apprendi applies only to criminal penalties
that increase a defendant's sentence "beyond the prescribed
statutory maximum." 530 U.S. at 490.
VI. Conclusion
For the reasons stated above, we will vacate Syme's False
Claims Act conviction on count 25 of the superseding
41
indictment and remand that count for a new trial based
only on the "treatment" theory of fraud. We will also vacate
the sentence imposed by the District Court and remand for
resentencing with instructions not to apply the
"sophisticated means" enhancement of S 2F1.1(b)(5)(c)
(1998) of the Sentencing Guidelines. In all other respects,
we will affirm the judgment of the District Court.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
42