United States v. Faiz Ahmed ( 2019 )

Case: 18-20812 Document: 00515184725 Page: 1 Date Filed: 11/04/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-20812 FILED
November 4, 2019
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
FAIZ AHMED,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:15-CR-346-3
Before DAVIS, HO, and ENGELHARDT, Circuit Judges.
PER CURIAM:*
Following a jury trial, Defendant-Appellant, Faiz Ahmed, M.D., was
convicted of health care fraud and conspiracy to commit health care fraud. On
appeal, he argues the district court committed reversible error by instructing
the jury regarding “deliberate ignorance” and by excluding certain testimony
as inadmissible hearsay. On plain error review, we AFFIRM.
BACKGROUND
On July 1, 2015, a federal grand jury sitting in the Southern District of
Texas returned a 25-count indictment charging Faiz Ahmed, M.D., along with
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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several other individuals, with various crimes, including conspiracy, health
care fraud, violations of the federal Anti-Kickback Statute, and money
laundering. A superseding indictment was returned on October 21, 2015,
adding charges and defendants. The charges arose from Dr. Ahmed’s
employment at the Arca Medical Clinic. Specifically, the indictment alleged
that Dr. Ahmed and others fraudulently represented to Medicare and Medicaid
that certain diagnostic tests “were actually performed and medically
necessary.”
All of Dr. Ahmed’s co-defendants pleaded guilty prior to trial. On
January 17, 2017, Dr. Ahmed proceeded to trial on one count of conspiracy to
commit health care fraud, in violation of 18 U.S.C. § 1349, and seven counts
of health care fraud, in violation of 18 U.S.C. § 1347. Dr. Ahmed, testifying in
his own defense at trial, did not contest his co-defendants’ guilt, but denied any
knowledge that the Arca Clinic had submitted false or fraudulent bills to
Medicare for his work. On January 25, 2017, the jury found Dr. Ahmed guilty
on all eight counts. On November 29, 2018, the district court sentenced Dr.
Ahmed to 60 months incarceration on each count, with all terms of
incarceration to run concurrently, and ordered him to pay restitution of
$4,192,156.22. Dr. Ahmed timely appealed his conviction.
ANALYSIS
Sections 1347 and 1349 of Title 18 of the United States Code impose
criminal penalties for health care fraud and conspiracy to commit health care
fraud. See 18 U.S.C. § 1347 (health care fraud) and 18 U.S.C. § 1349(conspiracy). To be guilty of health care fraud, one must:
(a) “knowingly and willfully execute[], or attempt[] to
execute, a scheme or artifice—
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent
pretenses, representations, or promises, any of the
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money or property owned by, or under the custody
or control of, any health care benefit program,
in connection with the delivery of or payment for
health care benefits, items, or services[.]
18 U.S.C. § 1347 (emphasis added).
Dr. Ahmed maintains his innocence, contending he had no knowledge of
his co-defendants’ unlawful conduct. Additionally, urging legal error by the
district court, he asks this court to overturn his conviction. Specifically, he
argues the district court committed reversible (plain) error by including a
“deliberate ignorance” instruction in the instructions given to the jury for use
in their deliberations and by excluding, as inadmissible hearsay, his testimony
regarding statements others made to him that purportedly caused him to
believe that his conduct and Arca’s operations were lawful.
I. “Deliberate Ignorance” Jury Instruction
Without objection from Dr. Ahmed’s trial counsel, the district court
included a “deliberate ignorance” instruction in the instructions given to the
jury prior to its deliberations. That instruction told the jury:
You may find that the defendant had knowledge of a
fact if you find that the defendant deliberately closed
his eyes to what would otherwise have been obvious to
him. While knowledge on the part of the defendant
cannot be established merely by demonstrating that
the defendant was negligent, careless, or foolish,
knowledge can be inferred if the defendant
deliberately blinded himself to the existence of a fact. 1
1 The government included the deliberate ignorance instruction, in brackets, in its
proposed instructions. Without discussion, the district court included the bracketed language
in its draft instructions. Dr. Ahmed’s trial counsel neither objected to the district court’s
proposed instructions nor proposed instructions on behalf of Dr. Ahmed.
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In reviewing a defendant’s claim that a jury instruction was
inappropriate, appellate courts consider “whether the court’s charge, as a
whole, is a correct statement of the law and whether it clearly instructs jurors
as to the principles of law applicable to the factual issues confronting them.”
United States v. Araiza-Jacobo, 917 F.3d 360, 365–66 (5th Cir. 2019) (internal
quotations omitted). And, of course, “[t]he court may not instruct the jury on
a charge that is not supported by evidence.” Id. at 366. See also United States
v. St. Junius, 739 F.3d 193, 204 (5th Cir. 2013) (review of a deliberate
ignorance instruction is “a fact-intensive endeavor” based on “the totality of
the evidence”); United States v. Lara-Velasquez, 919 F.2d 946, 950 (5th Cir.
1990) (deliberate ignorance instruction “not only must be legally accurate, but
also factually supportable”). In determining whether the evidence sufficiently
supports a particular jury instruction, we “‘view[] the evidence and all
reasonable inferences that may be drawn from the evidence in the light most
favorable to the Government.’” Araiza-Jacobo, 917 F.3d at 366 (quoting
United States v. Cessa, 785 F.3d 165, 185 (5th Cir. 2015)).
“The purpose of the deliberate ignorance instruction is to inform the
jury that it may consider evidence of the defendant’s charade of ignorance as
circumstantial proof of guilty knowledge.” Lara-Velasquez, 919 F.2d at 951.
Thus, it “‘is nothing more than a refined circumstantial evidence instruction
properly tailored to the facts of a case[.]’” Id. (quoting United States v.
Manriquez Arbizo, 833 F.2d 244, 248 (10th Cir. 1987)). “As one opinion has
colloquially noted, deliberate ignorance is reflected in a criminal defendant’s
actions which suggest, in effect, ‘Don’t tell me, I don’t want to know.’” Id.(quoting United States v. de Luna, 815 F.2d 301, 302 (5th Cir. 1987)).
Despite the seemingly common-sense nature of the deliberate ignorance
instruction, this court has been tasked with determining the propriety of its
usage a number of times in the last several years. These cases reflect that the
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instruction’s application has not been as straightforward as one might
initially expect. For instance, in United States v. Oti, we confirmed that the
instruction may properly be utilized in a conspiracy case, but also emphasized
“again [] that the deliberate ignorance instruction should rarely be given.”
872 F.3d 678, 697–99 (5th Cir. 2017) (emphasis added), cert. denied, 38 S. Ct.
1988 (2018). The panel additionally explained:
“We have often cautioned against the use of the deliberate
ignorance instruction.” [United States v. Mendoza-Medina, 346
F.3d 121, 127 (5th Cir. 2003)]. In United States v. Skilling, we
noted that such an instruction should be given only in “‘rare’
instance[s]” and observed:
The concern is that once a jury learns that it can
convict a defendant despite evidence of a lack of
knowledge, it will be misled into thinking that it can
convict based on negligent or reckless ignorance rather
than intentional ignorance. In other words, the jury
may erroneously apply a lesser mens rea requirement:
a “should have known” standard of knowledge.
Skilling, 554 F.3d 529, 548–49 (5th Cir. 2009), rev’d on other
grounds, 561 U.S. 358, 130 S. Ct. 2896, 177 L.Ed.2d 619 (2010).
. . .
[Accordingly,] “the district court should not instruct the jury on
deliberate ignorance when the evidence raises only the inferences
that the defendant had actual knowledge or no knowledge at all of
the facts in question.” Mendoza-Medina, 346 F.3d at 133–34.
Oti, 872 F.3d at 697–98 (emphasis added). See also Mendoza-Medina, 346
F.3d at 133 (“Where ‘the choice is simply between a version of the facts in
which the defendant had actual knowledge, and one in which he was no more
than negligent or stupid, the deliberate ignorance instruction is
inappropriate.’”) (quoting Lara-Velasquez, 919 F.2d at 951)).
Hence, “[t]he proper role of the deliberate ignorance instruction is not
as a backup or supplement in a case that hinges on a defendant’s actual
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knowledge.” United States v. Kuhrt, 788 F.3d 403, 417 (5th Cir. 2015)
(emphasis added). Rather, “[t]he instruction is appropriate only in the
circumstances where a defendant ‘claims a lack of guilty knowledge and the
proof at trial supports an inference of deliberate indifference.’” Id. (quoting
United States v. Brooks, 681 F.3d 678, 701 (5th Cir. 2012)). That is, the test
is two-pronged: a deliberate ignorance instruction is proper “when ‘the
evidence shows (1) [the defendant’s]subjective awareness of a high probability
of the existence of illegal conduct, and (2) purposeful contrivance to avoid
learning of the illegal conduct.’” Araiza-Jacobo, 917 F.3d at 366 (emphasis
added) (quoting United States v. Nguyen, 493 F.3d 613, 619 (5th Cir. 2007)).
Logically, “[t]he first prong often overlaps with an inquiry into a
defendant’s actual knowledge, because ‘the same evidence that will raise an
inference that the defendant had actual knowledge of the illegal conduct
ordinarily will also raise the inference that the defendant was subjectively
aware of a high probability of the existence of illegal conduct.’” Id. (quoting
Lara-Velasquez, 919 F.2d at 952. “‘Thus, in many cases, the propriety of a
deliberate ignorance instruction depends upon evidence that the defendant
purposely contrived to avoid learning of the illegal conduct—the second prong
of the deliberate ignorance test.’” Id. (emphasis added). See also Mendoza-
Medina, 346 F.3d at 133 (“The sine qua non of deliberate ignorance ‘is the
conscious action of the defendant—the defendant consciously attempted to
escape confirmation of conditions or events he strongly suspected to exist.’”)
(quoting Lara-Velasquez, 919 F.2d at 951). The second prong may be
established by direct or circumstantial evidence, including where “‘the
circumstances in the case [are] so overwhelmingly suspicious that the
defendant’s failure to conduct further inspection or inquiry suggests a
conscious effort to avoid incriminating knowledge.’” Nguyen, 493 F.3d at 621(quoting United States v. Daniel, 957 F.2d 169–70 (5th Cir. 1992)).
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A determination that a district court erred in giving a deliberate
ignorance instruction, however, does not end our inquiry. Instead, as in
Araiza-Jacobo and many other of the cited cases, “the error ‘is harmless
where there is substantial evidence of [the defendant’s] actual knowledge’”
presented at trial. Araiza-Jacobo, 917 F.3d at 367–68 (emphasis added)
(quoting Oti, 872 F.3d at 698). See also, e.g., Kuhrt, 788 F.3d at 418; St.
Junius, 739 F.3d at 204–05; Mendoza-Medina, 346 F.3d at 134. “‘Substantial
evidence means relevant evidence acceptable to a reasonable mind as
adequate to support a conclusion.’” Araiza-Jacobo, 917 F.3d at 368 (quoting
Simmons v. United States, 406 F.2d 456, 464 (5th Cir. 1969)).
In the instant matter, Dr. Ahmed’s trial counsel did not object to the
deliberate ignorance instruction before the district court. Accordingly, we
employ a plain error standard of review, rather than reviewing the district
court’s decision to give the instruction for an abuse of discretion. FED. R.
CRIM. P. 52(b). See also, e.g., United States v. Delgado, 672 F.3d 320, 340 (5th
Cir. 2012) (en banc). “To demonstrate plain error, the defendant must show
that there was error, it was plain, and it affected his or her substantial
rights.” United States v. Alaniz, 726 F.3d 586, 615 (5th Cir. 2013); see, e.g.,
United States v. Olano, 507 U.S. 725, 732–37 (1993); United States v. Aguilar,
645 F.3d 319, 323 (5th Cir. 2011). An error is “plain” if it is “clear” or
“obvious.” Molina-Martinez v. United States, 136 S. Ct. 1338, 1343 (2016). A
plain error affects a defendant’s substantial rights if the defendant “show[s]
a reasonable probability that, but for the error, the outcome of the proceeding
would have been different.” Id. (internal quotation omitted). “Even if the
defendant can meet this burden, we still would have discretion to decide
whether to reverse, which we generally will not do unless the plain error
seriously affected the fairness, integrity, or public reputation of the judicial
proceeding.” Alaniz, 726 F.3d at 615 (internal quotation omitted).
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Here, Dr. Ahmed contends there is no evidence that he “consciously
attempted to escape confirmation of conditions or events he strongly
suspected to exist” or engaged in a “purposeful contrivance to avoid learning
of the illegal conduct.” Hence, he argues the district court committed plain
error in giving the deliberate ignorance instruction. Additionally, because
knowledge was the principal disputed issue in the case, the government
emphasized the deliberate ignorance instruction in closing argument, and the
evidence of actual knowledge was hotly disputed, Dr. Ahmed maintains that
the error affected his substantial rights and requires reversal.
In response, the government urges the court to find the deliberate
ignorance instruction appropriate based on the “failure to inquire” rationale
approved in Nguyen and Araiza-Jacobo, i.e., “the circumstances in the case
[are] so overwhelmingly suspicious that the defendant’s failure to conduct
further inspection or inquiry suggests a conscious effort to avoid
incriminating knowledge.” Nguyen, 493 F.3d at 621 (internal quotation
omitted). The government’s position, however, rests largely upon conclusory
assertions and overly generous characterizations of the evidence on which it
relies.
Even so, we conclude that the plain error required for reversal has not
been established here because sufficient evidence exists of Dr. Ahmed’s actual
awareness of the Medicare fraud occurring at the Arca clinic. While
reasonable minds could assess and weigh the largely circumstantial evidence
in this matter differently, it is far from apparent that the jury’s overall
negative assessment of Dr. Ahmed’s credibility, relative to his purported lack
of knowledge of the illegality of the clinic’s billing practices, is erroneous.
While Dr. Ahmed’s efforts to portray himself as simply a conscientious,
honest, and hardworking doctor—whose alleged innocence and
misunderstanding of American jargon caused him to unknowingly become
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part of his co-defendants’ fraudulent scheme—are fairly impressive, other
evidence of his prior dealings, particularly the video and audio recordings
introduced by the government, suggest the contrary very well may be true.
At a minimum, the competing evidence properly left the final determination
to the jury. Accordingly, Dr. Ahmed fails to meet his plain error burden of
demonstrating that the outcome of the proceeding would have been different
had the instruction not been given or that its inclusion seriously affected the
fairness, integrity, or public reputation of the judicial proceeding.
II. Exclusion of Testimony as Inadmissible Hearsay
Dr. Ahmed’s second assertion of error concerns the district court’s
exclusion of his testimony, as the sole defense witness, regarding statements
that certain of his co-defendants made about clinic operations, particularly
regarding patients and billing practices, that purportedly caused him to
believe that his conduct was lawful. On appeal, Dr. Ahmed insists these out-
of-court statements were not offered to prove the truth of the declarant’s
statement; rather, they were offered only to show their effect on his state of
mind, i.e., to show why he believed the clinic’s operation was legitimate. Such
out-of-court statements—offered as evidence of the state of mind of the “in-
court” speaker, not the truth of the words spoken—are not hearsay. See FED.
R. EVID. 801(c) (statement offered to “prove the truth of the matter asserted
in the statement” is hearsay). See also, e.g., United States v. Ballis, 28 F.3d
1399, 1405–06 (5th Cir. 1994); United States v. Cantu, 876 F.2d 1134, 1137–
38 (5th Cir. 1989).
Significantly, however, Dr. Ahmed’s trial counsel did not present this
argument to the district court in response to the government’s hearsay
objections. Instead, in a couple instances, counsel maintained the
statements—made by government witnesses—qualified as party-opponent
admissions, pursuant to Federal Rule of Evidence 8.01(d)(2)(D). Otherwise,
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defense counsel simply accepted the rulings. Furthermore, despite the
government’s objections being sustained, the record does not reflect an offer
of proof of the substance of the desired testimony, or further explanation of
its relevance, being made outside the presence of the jury in order to properly
preserve the issue in the record for this court’s review. Thus, the government
argues, we should decline to consider this claim on appeal.
A district court’s decision to admit or exclude evidence is generally
reviewed for an abuse of discretion. See United States v. Njoku, 737 F.3d 55,
73 (5th Cir. 2013). However, Federal Rule of Evidence 103(a)(2) provides that
“a party may claim error in a ruling to admit or exclude evidence only if the
error affects a substantial right of the party and . . . if the ruling excludes
evidence, a party informs the court of its substance by an offer of proof, unless
the substance was apparent from the context.” FED. R. EVID. 103(a)(2).
Despite Dr. Ahmed’s failure to present an offer of proof, or a basis for
admissibility, as to the excluded testimony, we still may exercise our
discretion to review his claim utilizing a plain error standard. See FED. R.
EVID. 103(e) (“A court may take notice of a plain error affecting a substantial
right, even if the claim of error was not properly preserved.”). See also United
States v. Clements, 73 F.3d 1330, 1336 n.4 (5th Cir. 1996); United States v.
Grapp, 653 F.2d 189, 194 (5th Cir. 1981) (noting that “errors seriously
affecting the fairness or integrity of . . . judicial proceedings” would justify an
exception to the general rule that the reviewing court would not consider the
basis for admission of an out-of-court statement that was not presented to the
trial court) (quoting Anderson v. United States, 417 U.S. 211, 217 n. 5 (1974)).
Assuming arguendo that the district court’s rulings constitute plain
error, it is difficult to conclude that reversible error occurred without knowing
the complete substance and context of Dr. Ahmed’s excluded testimony.
Although in a few instances Dr. Ahmed had time to answer his attorney’s
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questions (regarding an out-of-court statement) prior to the government’s
objection, those answers, without more, are not sufficient to establish a
reasonable probability that, but for the error, the outcome of the proceeding
would have been different.
This deficiency becomes particularly evident when considered in the
context of the other evidence that the parties presented to the jury. In his
defense, Dr. Ahmed provided extensive direct testimony—during his nearly
two days on the witness stand—as to his good faith and lack of criminal
intent. Indeed, while Dr. Ahmed was not permitted to testify regarding what
others told him about the clinic and their business operations, he was allowed
to tell the jury what he said to others. Additionally, Dr. Ahmed was in fact
able to explain to the jury that “[a]s a result of what [he was] told” by [co-
defendant] Yepremian about Arca’s business practices, he “trusted”
Yepremian and believed that the two would “do a straightforward, no hanky-
panky business.” And, in other instances, Dr. Ahmed either testified without
objection relative to his understanding, based on his interactions with others,
or managed to sufficiently re-phrase his answer without compromising the
intended message.
Finally, as discussed above, the government presented competing
evidence suggestive of Dr. Ahmed’s actual awareness of Yepremian’s
fraudulent scheme. Under these circumstances, it is far from apparent that
allowing Dr. Ahmed to freely answer all of his counsel’s inquiries regarding
statements others made to him would have swayed the jury’s assessment of
his credibility. Thus, because Dr. Ahmed “was able to place his defense before
the jury, the fact that the defense was not elicited in the precise manner
originally contemplated by the defendant is not a proper basis for reversal.”
United States v. Wellendorf, 574 F.2d 1289, 1290 (5th Cir. 1978).
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III. Fairness of the Trial
Assuming the district court is found to have erred in more than one of
its rulings, Dr. Ahmed contends the cumulative effect (even if harmless when
considered individually) deprived him of the constitutional right to a fair trial.
For the reasons set forth with the first two issues raised by him, his last is
likewise unavailing.
Having found no reversible error, we AFFIRM the judgment of the
district court.
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