United States v. Ronald Kahn ( 2019 )

Case: 18-20033 Document: 00514926862 Page: 1 Date Filed: 04/23/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-20033 FILED
Summary Calendar April 23, 2019
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
RONALD F. KAHN,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:14-CR-194-1
Before BARKSDALE, ELROD, and HO, Circuit Judges.
PER CURIAM: *
Following a jury trial, Ronald F. Kahn was convicted of conspiracy to
commit health-care fraud and conspiracy to pay or receive health-care
kickbacks, in violation of 18 U.S.C. §§ 371, 1347, 1349 and 42 U.S.C. § 1320a-
7b(b)(2). He was sentenced, inter alia, to 60 months’ imprisonment for each
conviction, to run concurrently. Kahn contends: the evidence was insufficient
to prove he had the requisite knowledge and intent to be convicted for either
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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No. 18-20033
offense; the district court abused its discretion in instructing the jury on
deliberate ignorance; and the court erred by excluding defense evidence
relating to Kahn’s repayment of a Medicare overcharge.
Generally, Kahn’s superseding indictment alleged a conspiracy to
commit health-care fraud and a conspiracy to pay and receive health-care
kickbacks among: Kahn, a medical doctor who owned and operated Lonestar
Healthcare Group; Antonia Harris, a registered nurse who was the manager,
administrator, and operator of Allied Covenant Home Health, Inc.; and
Charles Harris, Antonia Harris’ brother and a licensed social worker who was
the owner and chief operating officer of Harris Healthcare Group (HHC).
The sufficiency challenges to Kahn’s convictions were not properly
preserved; therefore, review is only for plain error. E.g., United States v.
Broussard, 669 F.3d 537, 546 (5th Cir. 2012). Under that standard, Kahn must
show a forfeited plain (clear or obvious) error that affected his substantial
rights. Puckett v. United States, 556 U.S. 129, 135 (2009). If he does so, we
have the discretion to correct the reversible plain error, but should do so only
if it “seriously affect[s] the fairness, integrity, or public reputation of judicial
proceedings”. Id. For a sufficiency challenge, an error is “clear or obvious” only
when the record is “devoid of evidence pointing to guilt” or “the evidence of a
key element of the offense is so tenuous that a conviction would be shocking”.
United States v. Suarez, 879 F.3d 626, 630–31 (5th Cir. 2018) (cleaned up and
citations omitted).
For the sufficiency challenge to his conviction for conspiracy to commit
health-care fraud, Kahn does not dispute the Government proved Charles and
Antonia Harris were engaged in a conspiracy to defraud Medicare. Rather,
Kahn asserts the evidence is insufficient to show he had knowledge of the
conspiracy and intentionally joined it to further its unlawful purpose.
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To establish a conspiracy to commit health-care fraud, the Government
must prove: defendant and one or more other persons made an agreement to
commit health-care fraud; “defendant knew of the unlawful purpose of the
agreement”; and “defendant joined in the agreement willfully, that is, with the
intent to further the unlawful purpose”. United States v. Willett, 751 F.3d 335,
339 (5th Cir. 2014) (citation omitted); 18 U.S.C. §§ 1347, 1349. An agreement
between conspirators “need not be formal or spoken, but can be inferred from
concert of action”. United States v. Dailey, 868 F.3d 322, 329 (5th Cir. 2017)
(citation omitted), cert. denied, 138 S. Ct. 715 (2018). Each element of a
conspiracy, including knowledge and intent, may be established by direct
evidence or inferred from circumstantial evidence. Willett, 751 F.3d at 339–
40.
Viewing the evidence in the requisite light most favorable to the
prosecution, id. at 339, a reasonable factfinder could infer Kahn’s knowledge
of the conspiracy, his intent to join it, and his specific intent to defraud
Medicare. There was evidence Kahn prepared and submitted claims to
Medicare for services he did not perform, and Medicare paid him for these
fraudulent claims; Kahn, in his capacity as a Medicare provider and treating
physician to a Medicare beneficiary, signed Medicare claim forms for both
Charles and Antonia Harris; and these claims, which were paid by Medicare,
were also fraudulent. From this evidence, a reasonable juror could infer that
Kahn knew of the fraudulent agreement he had with the Harrises, and
intended to further it by knowingly submitting false claims and assisting with
the submission of false claims. See Dailey, 868 F.3d at 328–29; United States
v. Mauskar, 557 F.3d 219, 230 (5th Cir. 2009). Accordingly, especially given
the deference owed the jury, there was no clear-or-obvious error regarding
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Kahn’s sufficiency challenge to his conviction for conspiracy to commit health-
care fraud. See Dailey, 868 F.3d at 329.
As noted, for his sufficiency challenge to his conviction for conspiracy to
pay and receive health-care kickbacks, Kahn again asserts the evidence is
insufficient to show knowledge and intent. The Anti-Kickback Statute, 42
U.S.C. § 1320a-7b(b)(2), “criminalizes the payment of any funds or benefits
designed to encourage an individual to refer another party to a Medicare
provider for services to be paid for by the Medicare program”. United States v.
Miles, 360 F.3d 472, 479 (5th Cir. 2004). “In order to obtain a conviction under
this statute, the Government must show that a defendant: (1) knowingly and
willfully made a payment or offer of payment, (2) as an inducement to the
payee, (3) to refer an individual, (4) to another for the furnishing of an item or
service that could be paid for by a federal health care program.” Id. at 479–80
(citation omitted).
The Government asserted at trial that Kahn agreed to pay Charles
Harris a percentage of Medicare payments Kahn received for facet-joint
injections performed on patients referred to him by HHC, and that this
payment was an illegal kickback for such patient referrals. The evidence at
trial showed: Kahn paid Charles Harris 25% of the Medicare payments Kahn
received for such injections performed on patients referred to Kahn by HHC;
and, if Kahn did not receive payment from Medicare on a claim, Kahn would
not pay Charles Harris. The evidence also showed: the payments from Kahn
to Charles Harris were not set amounts per month; and the evidentiary
documents relating to the payments did not in any way denote these payments
were rental or lease payments.
In support of this insufficiency claim, Kahn understandably cites to the
testimony of Darpino, Lonestar’s office manager, who testified: the payments
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from Kahn to Charles Harris were lease payments for the use of a room and an
assistant at HHC when Kahn performed facet-joint injections on patients at
HHC; and Darpino was the person who negotiated this lease contract with
Charles Harris. As Kahn’s contentions are based on his assessment of the
credibility of trial witnesses, in particular Darpino, his contentions “must fail
[because] credibility determinations are within the sole province of the jury”.
United States v. Marrero, 904 F.2d 251, 257 (5th Cir. 1990) (citation omitted);
see also United States v. Mata, 491 F.3d 237, 242 (5th Cir. 2007). “[T]his Court
is bound to accept credibility determinations made by the jury unless the
challenged testimony is so unbelievable on its face that it defies physical laws”.
Marrero, 904 F.2d at 257 (internal quotation marks and citation omitted). The
jury could infer from the evidence that the nature and purpose of the payments
Kahn made to Charles Harris were kickbacks or commissions for Charles
Harris’ referral of Medicare beneficiaries to Kahn. Therefore, there was no
clear-or-obvious error regarding Kahn’s sufficiency challenge to his conviction
for conspiracy to pay and receive health-care kickbacks.
Kahn next challenges the court’s giving a deliberate-ignorance
instruction. He asserts the instruction was not warranted and misstated the
law. Unlike his two above-discussed sufficiency challenges, this issue was
preserved; therefore, the use of the deliberate-ignorance instruction is
reviewed for abuse of discretion, viewing “the evidence and all reasonable
inferences therefrom in favor of the government”. Delgado, 668 F.3d at 227
(internal quotation marks and citation omitted).
A deliberate-ignorance instruction is warranted when: “defendant
claims a lack of guilty knowledge”; and the evidence at trial supports an
inference that defendant “was subjectively aware of a high probability of the
existence of the illegal conduct”, and “purposely contrived to avoid learning of
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the illegal conduct”. Id. (internal quotation marks and citations omitted). For
the reasons that follow, including the evidence at trial and Kahn’s defense at
trial that he lacked knowledge of the conspiracies to defraud Medicare and pay
and receive kickbacks, the court did not abuse its discretion by giving the
deliberate-ignorance instruction.
First, the evidence regarding Kahn’s having knowledge of the
conspiracies and intentionally joining them also suggests Kahn had a
subjective awareness of the high probability of illegal conduct. Second, the
evidence supports a conclusion that Kahn purposely avoided learning of illegal
conduct. See United States v. Nguyen, 493 F.3d 613, 621 (5th Cir. 2007). Kahn
spent time at HHC where the patients were socializing, watching television,
playing cards, playing board games, and going on outings. He also signed every
Medicare form presented to him by Antonia Harris without asking one
question. Kahn, a Medicare provider and owner of Lonestar, chose not to ask
questions even though he was obligated to know the answers to the questions
he chose not to ask. Kahn’s lack of inquiry “suggests a conscious effort to avoid
incriminating knowledge”. Id. (internal quotation marks and citation omitted).
Accordingly, there was no abuse of discretion. See Delgado, 668 F.3d at 227.
Furthermore, our court has held the Fifth Circuit pattern instruction on
deliberate ignorance, which was given to the jury, is a correct statement of the
law as enunciated by the Supreme Court in Global-Tech Appliances v. SEB
S.A., 563 U.S. 754 (2011). United States v. Brooks, 681 F.3d 678, 702 (5th Cir.
2012). This forecloses Kahn’s contention that the instruction was a
misstatement of the law. See United States v. Kuhrt, 788 F.3d 403, 416 n.4
(5th Cir. 2015).
Kahn’s final claim is that he should have been allowed to introduce
specific-act evidence to prove his law-abiding character and to demonstrate he
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did not act with the necessary criminal intent for the charged offenses. As
Kahn recognizes, controlling precedent precludes this claim. Defendant may
only present evidence of specific instances of conduct when his “character or
character trait is an essential element of a charge, claim, or defense”. FED. R.
EVID. 405(b); see Marrero, 904 F.2d at 259–60. Kahn’s character was not an
essential element of the charges against him. See Marrero, 904 F.2d at 260.
Additionally, with respect to his lack-of-intent defenses, his attempted use of
“specific acts circumstantially to prove lack of intent . . . is not only disfavored,
it is not permitted under Rule 405(b)”. Id. Accordingly, there was no abuse of
discretion in excluding Kahn’s specific-acts evidence. Id.
AFFIRMED.
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