State of Iowa v. Chung Chris Lo ( 2020 )

IN THE COURT OF APPEALS OF IOWA
No. 18-0853
Filed February 19, 2020
STATE OF IOWA,
Plaintiff-Appellee,
vs.
CHUNG CHRIS LO,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Dallas County, Richard B. Clogg,
Judge.
Chung Chris Lo appeals his conviction for first-degree fraudulent practice.
AFFIRMED.
R. Ben Stone of Parrish Kruidenier Dunn Boles Gribble Gentry Brown &
Bergmann LLP, Des Moines, for appellant.
Thomas J. Miller, Attorney General, and Martha E. Trout, Assistant Attorney
General, for appellee.
Heard by Vaitheswaran, P.J., and Doyle and May, JJ.
2
DOYLE, Judge.
Chung Chris Lo appeals his conviction for first-degree fraudulent practice.
He contends his trial counsel provided ineffective assistance by failing to argue the
statute defining the charge is unconstitutionally vague and therefore void. In the
alternative, Lo challenges the sufficiency of the evidence supporting his conviction,
the district court’s failure to instruct the jury on mistake of law, and its denial of his
motion for mistrial.
I. Background Facts and Proceedings.
Lo has a federal conviction for mail fraud. In an October 2014 letter, the
Iowa Department of Human Services (DHS) informed Lo that he was permanently
excluded from participation in the Medicaid program1 because of that conviction.
The letter explains that under the DHS’s administrative rules, the sanction
precludes him from submitting claims for Medicaid payment personally or through
another person or affiliate. See Iowa Admin. Code r. 441-79(2)(5)(a).
Lo’s wife, Sue, owned and managed Elderly Care of Iowa, LLC (ECI), which
provided services to Medicaid recipients. In 2014 and 2015, the DHS investigated
ECI for submitting false or fraudulent claims for services. Sue was convicted of
third-degree fraudulent practice in February 2016 as a result of that investigation.
Because of her conviction, the DHS permanently excluded Sue from participating
in the Medicaid program.
1 Medicaid is a joint federal and state program that provides essential health
insurance to low income, elderly, disabled, and children. The cost of the program
is shared by the federal and state governments, with the federal government
paying about sixty percent of the cost and the state paying about forty percent.
3
Sue sold ECI to Spirit Home Care in December 2015 and began working
for Spirit Home Care right after. Lo was granted supervised release from prison in
January 2016 and began working for Spirit Home Care the next month. But Spirit
Home Care terminated Lo and Sue’s employment in April 2016 after learning each
had been excluded from participation in the Medicaid program.
In the weeks after Lo and Sue lost their jobs with Spirit Home Care, Vithana
David Thavonekham, their nephew, started Senior Assistance of Iowa, LLC (SAI).
SAI provided the same services to Medicaid recipients as ECI and Spirit Home
Care.2 Thavonekham opened a checking account for SAI that listed Sue as an
authorized signer. And one of Sue’s aliases was listed on SAI’s partnership
contract. In December 2016, Lo reported he was employed by SAI and named
Thavonekham as his supervisor. At least one check was issued from SAI to Lo in
the amount of $1400.
The Iowa Medicaid Fraud Control Unit investigated SAI and obtained a
warrant to search Lo’s home in January 2017. It discovered many SAI documents
in the house, including insurance documents for Medicaid recipients and care
2 The service provided is called consumer directed attendant care service, which
is basically home health aide services provided to the elderly, under the elderly
waiver, that need services to stay in their home instead of going to a nursing facility.
Those services include housekeeping, helping one with bathing, hygiene, and
grocery shopping. Under Iowa’s privatized Medicaid program, which began in April
2016, the State pays private managed care organizations (MCOs) to oversee the
program. In 2016, the State of Iowa contracted with three MCOs—AmeriHealth
Caritas, Amerigroup Iowa, and United Health Care. The MCOs handle the claims
payment function of the program and the managing of services for the bulk of the
Medicaid population. Under the program, a provider, such as SAI, must enroll
through Iowa Medicaid Enterprises to become a provider. A provider contracts
with one or more of the MCOs. Individual providers submit claims or bills for
payment to a MCO for services the provider provided to Medicaid recipients, and
the MCO pays the provider for those claims it finds appropriate.
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providers, as well as daily service records. Based on the evidence it obtained, the
State charged Lo with first-degree fraudulent practices. A jury found Lo guilty as
charged.
II. Ineffective Assistance of Counsel.
Lo first contends his trial counsel rendered ineffective assistance3 by failing
to argue that his rights under the Due Process Clauses of the United States and
Iowa Constitutions were violated when the State prosecuted him under a
unconstitutionally vague statute. We review this claim de novo. See Lamasters v.
State, 821 N.W.2d 856, 862 (Iowa 2012). To succeed, Lo must show counsel
breached a duty and prejudice resulted. See State v. Graves, 668 N.W.2d 860,
869 (Iowa 2003). We may affirm if either element is lacking. See id. Although we
address a claim of ineffective assistance of counsel on direct appeal if the record
is sufficient to decide the issue, see State v. Ross, 845 N.W.2d 692, 697 (Iowa
2014), we generally preserve these claims for postconviction-relief proceedings to
allow the record to be developed fully, see State v. Null, 836 N.W.2d 41, 48 (Iowa
2013).
To succeed on the first prong of the ineffective-assistance test, Lo must
show that his “counsel’s representation fell below an objective standard of
reasonableness.” State v. Ortiz, 905 N.W.2d 174, 183 (Iowa 2017) (citation
omitted). We ask whether, under the circumstances, counsel acted “outside the
wide range of professionally competent assistance.” Id. (citation omitted). And
3 Our supreme court decided recent amendments to Iowa Code section 814.7
(Supp. 2019) prohibiting consideration of ineffective-assistance-of-counsel claims
on direct appeal apply only prospectively and do not apply to cases, like this one,
pending on July 1, 2019. See State v. Macke, 933 N.W.2d 226, 235 (Iowa 2019).
5
there is a strong presumption that counsel acted reasonably. See id. Counsel has
no duty to raise a meritless issue. See id. So we must determine whether Lo’s
void-for-vagueness challenge has merit. See id.Both the United States and Iowa Constitutions require that our laws “give
people of ordinary intelligence fair warning of the prohibited conduct so they will
have a reasonable opportunity to navigate through life by engaging in lawful
conduct and spurning unlawful conduct.” State v. Newton, 929 N.W.2d 250, 255
(Iowa 2019). The question is whether the plain language of the statute or the way
it is construed make it reasonably clear that the conduct at issue was criminal. See
id.We presume statutes are constitutional and will construe them reasonably
to uphold them. See State v. Showens, 845 N.W.2d 436, 441 (Iowa 2014). The
defendant bears the heavy burden of proving the statute is unconstitutional beyond
a reasonable doubt and refuting every reasonable basis on which it could be found
to be constitutional. See State v. Thompson, 836 N.W.2d 470, 483 (Iowa 2013).
If the statute can be construed in more than one manner, we will adopt the
constitutional construction. See id.Lo claims counsel had a duty to challenge the constitutionality of Iowa Code
section 249A.51 (2017). That section states:
A person who knowingly makes or causes to be made false
statements or misrepresentations of material facts or knowingly fails
to disclose material facts in application for payment of services or
merchandise rendered or purportedly rendered by a provider
participating in the medical assistance program under this chapter
commits a fraudulent practice.
6
Iowa Code § 249A.51. Because the term “participating” is undefined, Lo claims he
could not know what acts the statute prohibits.
The State notes that our supreme court has held the term “participating” is
“a term of common usage and readily understandable.”4 See Thongvanh v. State,
494 N.W.2d 679, 684 (Iowa 1993) (holding no jury instruction on the term
“participation” is necessary in prosecution for felony murder). If the meaning of the
words used a statute can be “fairly ascertained” by referring to similar statutes,
other judicial determinations, the common law, or the dictionary, or if the words
have “a common and generally accepted meaning,” the statute is not
unconstitutionally vague. See State v. Heinrichs, 845 N.W.2d 450, 455-56 (Iowa
Ct. App. 2013) (citation omitted). It seems clear that a provider “participates” in
the Medicaid program by enrolling in the program, providing services or goods to
Medicaid recipients, submitting claims to the program for those services or goods,
and accepting payment for those services or goods provided. We conclude the
4 We recognize that in State v. Liggins, 557 N.W.2d 263, 267 (Iowa 1996), the Iowa
Supreme Court stated that “it is important to define ‘participation’” in a prosecution
for felony murder. But that case involved a murder of a child who had last been
seen in Illinois and whose body was discovered in Iowa. Liggins, 557 N.W.2d at
265-67. The trial court instructed the jury that “[a] person participates in an offense
beginning with the first act done toward the commission of the offense and ending
when a person has been arrested or has escaped from pursuers.” Id. at 267.
Liggins challenged the instruction, arguing it eliminated the requirement that the
jury determine where the child died as was necessary to establish “the essential
element of jurisdiction” under the unique facts of that case. Id. at 267. In rejecting
Liggins’s argument, the supreme court found the instruction “merely defined the
concept of participation in a felony,” it did so correctly, and nothing suggested the
jury use the instruction to decide the issue of jurisdiction rather than the issue of
felony murder. Id. We view the court’s statement that “it is important to define
‘participation’” as dicta rather than a requirement that the term be defined in all
prosecutions for felony murder, let alone in all criminal prosecutions where the term
is used. The Thongvanh holding controls.
7
void-for-vagueness claim has no merit and Lo’s counsel had no duty to raise it. So
his claim fails on the first prong of the ineffective-assistance test.
In any event, the statute is not unconstitutionally vague as applied to Lo. As
used in section 249A.51, the term “participating” does not relate to Lo’s conduct
but to the conduct of a provider participating in the Medicaid program. Here, that
provider is SAI. In other words, when the statute is applied to Lo, it prohibits him
from aiding and abetting Thavonekham or Sue in making a material false
statement in applying for payment of services rendered by SAI.
Because there is no reasonable probability that the outcome of the trial
would have changed even if counsel had raised a void-for-vagueness argument,
he cannot meet the second prong of the ineffective-assistance test. See State v.
Virgil, 895 N.W.2d 873, 882 (Iowa 2017) (“The defendant is prejudiced when ‘there
is a reasonable probability that, but for counsel’s unprofessional errors, the result
of the proceeding would have been different.’” (citation omitted)).
III. Sufficiency of the Evidence.
Lo also contends the district court erred in denying his motion for judgment
of acquittal because there is insufficient evidence to support his conviction. We
review claims on the sufficiency of the evidence to support a conviction for
correction of errors at law. See State v. Coleman, 907 N.W.2d 124, 134 (Iowa
2018). We consider the record evidence in the light most favorable to the State,
including all reasonable inferences that may be fairly drawn from the evidence.
See State v. Huser, 894 N.W.2d 472, 490 (Iowa 2017). We will uphold the trial
court’s denial of a motion for judgment of acquittal if substantial evidence supports
the conviction. See State v. Harris, 891 N.W.2d 182, 186 (Iowa 2017). “Evidence
8
is substantial if it would convince a rational trier of fact the defendant is guilty
beyond a reasonable doubt.” State v. Henderson, 908 N.W.2d 868, 875 (Iowa
2018). Evidence is not substantial if it raises only suspicion, speculation, or
conjecture. See Huser, 894 N.W.2d at 490.
Lo raises the same argument he raised on the definition of “participating”
and the lack of evidence showing he participated in the Medicaid program. 5 He
argues that the term “participating” in the context of section 249A.51 is too
ambiguous for a jury to convict. He asks us to apply the “rule of lenity,” which
5 Although his trial counsel did not challenge the use of the term “participating” in
the statute as part of a void-for-vagueness argument, counsel did move for
judgment of acquittal on the basis that the evidence is insufficient to show Lo
participated in the offense. Counsel admitted Lo provided services to
Thavonekham but denied the evidence shows that the SAI submitted any false
claims for payment or that Lo was an employee of SAI. Counsel argued:
And as a matter of law, the issue as to whether or not
whatever the defendant did or his wife did in concert with Mr.
Thavonekham or the defendant constitutes participation as the
administrative code provision does not define that word.
And Mr. Gookin [Program Integrity Director for the Iowa
Medicaid Program] himself seemed to tell this jury that participation
would somehow be tied to an employee based prohibition rather than
independent contractor relationship. And I don’t believe the
evidence shows from the record that the defendant’s conduct falls
within the definition of an affiliate for purposes of the administrative
code section 441-79.2(1).
Now, what is not charged is fraudulent practice for being an
excluded person participating in the program. . . . That is the
gravamen of the evidence, if it is believed. But that’s not what Mr.
Lo has been charged with. He’s charged with participating either as
a principal or aider and abetter in submitting false statements that
either say something that’s materially false or admit the fact that he’s
helping as an affiliate, apparently.
And I respectfully submit that there is essentially no evidence
whatsoever given the State’s failures that I’ve outlined to submit to
matter to the jury and no rational trier of fact, having considered these
arguments, could find beyond a reasonable doubt each and every
element of the offense charged as either a principal or aiding and
abetting or joint criminal conduct.
9
directs us to construe criminal statutes strictly in favor of the accused. See State
v. Lindell, 828 N.W.2d 1, 13 (Iowa 2013). But that rule is viewed as a “tie breaker”
to be applied only after we exhaust all techniques to interpret the statute and
grievous ambiguity still exists. See id. (citation omitted). That ambiguity is absent
here. We also note that we must construe our statutes “in such a way as to not
defeat their plain purpose.” State v. Coleman, 907 N.W.2d 124, 136 (Iowa 2018)
(citation omitted).
Sufficient evidence supports Lo’s conviction. Lo concedes that the record
reveals he processed paperwork on behalf of a company that provided services
under Iowa Medicaid, helped Thavonekham set up the company with the office of
the Iowa Secretary of State, lent Thavonekham funds and equipment, helped
Thavonekham obtain insurance, answered questions about the billing process,
and allowed Thavonekham to use his home as an office. These acts aided and
abetted Thavonekham and SAI to obtain Medicaid payments. And the evidence
shows Thavonekham and SAI failed to disclose the material fact that the DHS
precluded Lo from submitting claims for payment for Medicaid services provided
after his termination, either personally or through another person or affiliate. See
Iowa Admin. Code r. 441-779.2(5)(a) (“[T]ermination from participation shall
preclude the person from submitting claims for payment, whether personally or
through claims submitted by any other person or affiliate, for any services or
supplies except for those services provided before the suspension or
termination.”). The evidence shows Lo knew he was permanently excluded from
participation in the Medicaid program based on the letter the DHS sent him in
October 2014. And he knew the information was material because Spirit Home
10
Care terminated Lo and his wife after learning they were excluded from
participating in the program.
Lo claims the State failed to show he understood that assisting his family
members constituted the necessary “participation” in the Medicaid program that
required his disclosure of his involvement. The court instructed the jury to find Lo
guilty of fraudulent practice if the State proved: (1) Lo submitted claims for payment
to the Medicaid program or aided and abetted Sue or Thavonekham in submitting
claims for payment6; (2) Lo did so while knowingly failing to disclose that either he
or Sue had been terminated from participation in the Medicaid program; and (3)
their termination from participation in the Medicaid program was a material fact.
The instruction does not require the jury to find that Lo participated in the Medicaid
program. Lo never objected to the jury instruction defining fraudulent practice, and
it is now the law of the case. See State v. Taggart, 430 N.W.2d 423, 425 (Iowa
1988) (“Failure to timely object to an instruction not only waives the right to assert
error on appeal, but also ‘the instruction, right or wrong, becomes the law of the
case.’” (internal citation omitted)). .
Because substantial evidence supports Lo’s conviction, we affirm.
6 The instruction does contain an error in that it requires the State prove that “the
Defendant, as an Iowa Medicaid provider, submitted or caused to be submitted
claims for payment to the Medicaid program.” (emphasis added). There was no
objection to this portion of the instruction, and Lo does not make any argument
regarding the error on appeal. But it is clear from the record that the State never
argued Lo himself was a Medicaid provider. The State’s evidence concerned the
second portion of the instruction, which required proof that Lo “did aid and abet
Sue Boutdara Lo and/or David Thavonekham in that act.” The evidence shows
that Sue and Thavonekham were partners in SAI, a Medicaid provider.
11
IV. Jury Instructions.
Lo next contends the district court erred in refusing to give an instruction he
requested. We review his claim for correction of errors at law. See State v.
Benson, 919 N.W.2d 237, 242 (Iowa 2018) (noting we review the refusal to give a
requested jury instruction for correction of errors at law). The court must instruct
the jury on the applicable law on all material issues in a case. See State v. Mathias,
936 N.W.2d 222, 233 (Iowa 2019). The question is whether the instruction
accurately states the law and whether substantial evidence supports it. See State
v. Albright, 925 N.W.2d 144, 157 (Iowa 2019). If an error occurred, we reverse if
it prejudiced the defendant. See id. But we consider the jury instructions as a
whole to determine whether they correctly state the law. See Benson, 919 N.W.2d
at 242.
Lo challenges the court’s instruction on “mistake of law.” The trial court
submitted a portion of the instruction Lo requested but omitted the following:
The defendant also claims that at the time SAI was submitting billings
to MCOs for payment, he was ignorant of the law that the State
deemed his relationship to David Thavonekham or assistance to SAI
was prohibited participation in the program and that the law required
such participation disclosed to the MCOs. When an act or omission
is made mistakes of fact or ignorance of the law, the mistake or
ignorance must be because of good faith reasonable belief by the
defendant acting as a reasonably careful person under the similar
circumstances.
Lo argues the district court erred in eliminating a portion of his requested
instruction.
Iowa Code section 701.6 states:
All persons are presumed to know the law. Evidence of an accused
person’s ignorance or mistake as to a matter of either fact or law shall
be admissible in any case where it shall tend to prove the existence
12
or nonexistence of some element of the crime with which the person
is charged.
Our supreme court has noted that exceptions to the rule that knowledge of the law
is irrelevant “are strictly limited and arise primarily in crimes requiring a specific
intent or mental state which would tend to be negated by a defendant’s ignorance
or mistake of law.” State v. Clark, 346 N.W.2d 510, 512 (Iowa 1984).
Lo again focuses his argument on the use of the term “participating” or
“participation,” claiming he did not know what acts constituted “participation” in the
Medicaid program. But the letter informing Lo of his termination from the Medicaid
program states that he is precluded “from submitting claims for payment,
‘personally or through claims submitted by another person or affiliate, for any
services or supplies except for those services provided before the suspension or
termination.’” (quoting Iowa Admin. Code r. 441-79.2(5)(a)). (APP 142) And, as
the State notes, Lo was fired from his employment with Spirit Home Care because
he had been terminated from participation in the Medicaid program. So even if the
court had submitted the instruction with the language Lo requested, the result
would have been the same. Lo cannot show the omission of a portion of his
requested instruction prejudiced him.
V. Mistrial.
Finally, Lo contends the district court abused its discretion in denying his
motion for a mistrial. Because the trial court “is in the best position to appraise the
effect of any alleged misconduct,” State v. Frei, 831 N.W.2d 70, 80 (Iowa 2013),
overruled on other grounds by Alcala v. Marriott Int’l, Inc., 880 N.W.2d 699, 708
(Iowa 2016), it has wide discretion in deciding whether to grant or deny a mistrial,
13
State v. Huser, 894 N.W.2d 472, 498 (Iowa 2017). Generally, we will reverse that
discretion on appeal only if the trial court exercised that discretion “on grounds or
for reasons clearly untenable or to an extent clearly unreasonable.” Huser, 894
N.W.2d at 498 (citation omitted); see also State v. Anderson, 448 N.W.2d 32, 33
(Iowa 1989).
Lo moved for a mistrial based on testimony given by the first witness at trial.
His counsel was cross-examining Andrea Geier, who worked as an agent with the
Medicaid Fraud Control Unit during its investigation of Lo. When asked what
material fact Lo misrepresented in application for Medicaid payment, Greier
answered, “That he’s an excluded provider.” Lo’s counsel then asked, “And what
evidence do you have that he knowingly caused any bills to be submitted?” Geier
replied, “He knowingly entered into a scheme to defraud the Medicaid program into
believing that he had nothing to do with Senior Assistance of Iowa. And had they
known that the Los were involved, they would not have paid any of the claims.”
Counsel moved for a mistrial on the basis that Greier gave an improper opinion on
an element of the offense.
A witness may not testify about a defendant’s guilt or innocence. See State
v. Murphy, 451 N.W.2d 154, 156 (Iowa 1990). But a witness may testify to an
ultimate fact that the jury must determine. See id. Lo concedes that Greier did not
testify about an ultimate fact of guilt or innocence of the crime that he was
“technically charged with” but claims the testimony was “close enough” to prejudice
him. He also notes that the trial court never admonished the jury about this
testimony. See State v. Breitbach, 488 N.W.2d 444, 448 (Iowa 1992) (recognizing
14
cautionary instructions are sufficient to cure prejudice in all but the most extreme
cases).
“A mistrial is appropriate when ‘an impartial verdict cannot be reached’ or
the verdict ‘would have to be reversed on appeal due to an obvious procedural
error in the trial.’” State v. Newell, 710 N.W.2d 6, 32 (Iowa 2006) (citation omitted).
The question is “whether the trial court was clearly unreasonable in concluding an
impartial verdict could be reached notwithstanding the witness’s testimony.” Id.We conclude it was not. Greier was tasked with investigating SAI for Medicaid
fraud. Although she mentions a “scheme” to defraud the Medicaid program, her
testimony essentially summarizes the State’s theory of the case. The State
presented evidence that Lo and his wife knew they were prohibited from working
for businesses that submitted claims to Medicaid for services provided to its
recipents and withheld that information to keep doing this work. Because Greier’s
testimony did not render the jury unable to reach an impartial verdict, the trial court
was within its discretion to deny Lo’s motion for mistrial.
AFFIRMED.