United States v. Christopher Perry ( 2014 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-4012
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
CHRISTOPHER GEORGE PERRY, f/k/a Christopher Parry,
Defendant – Appellant.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Richard D. Bennett, District Judge.
(1:12-cr-00173-RDB-1)
Argued: March 20, 2014 Decided: July 1, 2014
Before DUNCAN, AGEE, and WYNN, Circuit Judges.
Affirmed by published opinion. Judge Wynn wrote the opinion, in
which Judge Duncan and Judge Agee joined.
ARGUED: Heather H. Martin, QUINN EMANUEL URQUHART & SULLIVAN,
LLP, Washington, D.C., for Appellant. Sandra Wilkinson, OFFICE
OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for
Appellee. ON BRIEF: James D. Wyda, Federal Public Defender,
OFFICE OF THE FEDERAL PUBLIC DEFENDER, Baltimore, Maryland, for
Appellant. Rod J. Rosenstein, United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.
WYNN, Circuit Judge:
A federal jury convicted Christopher Perry of three counts
of fraud related to his receipt of Social Security and
healthcare benefits. On appeal, Defendant argues that the
district court should have dismissed the indictment because it
did not include essential elements of the fraud charges and was
barred by the statute of limitations. In addition, Defendant
contends that the government failed to prove that he engaged in
a scheme or artifice to defraud the government. For the reasons
that follow, we disagree and affirm the district court’s
judgment.
I.
In December 1995, Defendant applied for Social Security
disability insurance benefits. In his application, Defendant
agreed to report to the Social Security Administration (“SSA”)
if his medical condition improved such that he could work or if
he returned “to work whether as an employee or a self-employed
person.” J.A. 454. SSA approved the application and found that
Defendant had been eligible for disability benefits as of
October 1, 1995. Sometime thereafter, in 1996 or 1997,
Defendant started receiving payments.
Yet in 1996, Defendant began working at Macy’s. And, with
the exception of 2001 to 2004, he worked for a variety of
2
employers including Hertz Corporation, L&J Cleaning, and
Nordstrom until 2007. In 1999, SSA sent Defendant a form
requesting information about his employment, but there is no
record of any response. In 1999 and 2000, SSA employees added
notations to Defendant’s file because Defendant’s posted
earnings in 1997 and 1998 were above the allowable income for
benefits recipients.
In January 2006, Defendant began to receive fully
subsidized prescription drug benefits under the Medicare Part D
program. His eligibility was based on the SSA’s understanding
that Defendant’s only income was from his Social Security
disability benefits. Later, in August 2006, Defendant received
a letter from Medicare seeking to verify that he was not
receiving income from sources other than his Social Security
disability benefits and thus continued to be entitled to
benefits. Defendant did not respond to this inquiry.
In April 2007, Defendant applied for the Low Income Subsidy
(“LIS”) program. The LIS is an additional benefit for Medicare
Part D beneficiaries that pays co-pays on expensive medicines
for individuals with a “lack of income” and is based on an
“official poverty determination.” J.A. 774. In essence, it is
“an extra layer of benefit” complementing Medicare Part D
prescription drug benefits. J.A. 773. Despite being employed
by Hertz at the time of his application, Defendant reported that
3
he “expect[ed] no earnings this year.” J.A. 779. In addition,
Defendant stated in his application that he was receiving no
income other than Social Security disability.
In June 2007, Defendant was accepted into the Federal
Career Intern Program, a two-year paid training program to
become a Benefits Technical Examiner with the SSA. This job
involved reviewing applications for disability benefits and
compiling information regarding the eligibility of individuals
for disability benefits. At the time, Defendant continued
submitting claims for Medicare benefits during the period from
June 2007 to 2009.
In July 2007, SSA’s review of IRS records reflected that
Defendant was receiving income. SSA thus sent Defendant a work
activity report form asking about Defendant’s employment history
in March 2008. Defendant completed the form and returned it in
July 2008, reporting some, but not all, of his employment from
the previous years.
In 2009, SSA twice sent employment inquiries to Defendant
to determine whether he was receiving any work-related expenses
or subsidies from SSA. Then, SSA sent Defendant a letter
advising him that his benefits would cease, but also that he
could submit additional evidence about his employment status
within ten days. Defendant failed to respond to these
inquiries, and SSA then terminated his benefits.
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In March 2012, the government charged Defendant in a three-
count indictment with Social Security fraud, federal health
benefit program fraud, and health care fraud. Defendant moved
to dismiss the indictment, and the district court denied the
motion but directed the government to file a bill of particulars
“to delineate specifically the employment Defendant ha[d] failed
to report.” J.A. 132. The government responded by identifying
Defendant’s specific employers during the period that he was
receiving benefits.
Defendant went to trial in September 2013. At the close of
evidence, he moved for judgment of acquittal on the basis of the
statute of limitations, but his motion was denied. The jury
found Defendant guilty on all three counts. After the district
court sentenced Defendant to concurrent terms of 24 months on
Count One, 12 months on Count Two, and 24 months on Count Three,
he appealed.
On appeal, Defendant argues that Counts One and Two of the
indictment were unconstitutionally defective because they failed
to specify the “event” that triggered his obligation to disclose
his employment to the government; that the indictment failed to
allege specific intent for all three counts; that the indictment
failed to allege a scheme or artifice to defraud the government
on Count Three; and that the indictment is time-barred by the
statute of limitations. Defendant also challenges the
5
sufficiency of the evidence on Count Three. We address each
argument in turn.
II.
Defendant first contends that the district court erred in
denying his motion to dismiss the indictment because Counts One
and Two were unconstitutionally defective. “We review the
district court’s factual findings on a motion to dismiss an
indictment for clear error, but we review its legal conclusions
de novo.” United States v. Woolfolk, 399 F.3d 590, 594 (4th
Cir. 2005).
“When a criminal defendant challenges the sufficiency of an
indictment prior to the verdict,”—as Defendant did here—“we
apply a heightened scrutiny” to ensure that every essential
element of an offense has been charged. United States v.
Kingrea, 573 F.3d 186, 191 (4th Cir. 2009). Specifically,
[a]n indictment must contain the elements of the
offense charged, fairly inform a defendant of the
charge, and enable the defendant to plead double
jeopardy as a defense in a future prosecution for the
same offense. . . . [T]he indictment must include
every essential element of an offense, . . . .
Id. (citations and quotation marks omitted); accord United
States v. Resendiz-Ponce, 549 U.S. 102, 108 (2007).
“It is generally sufficient that an indictment set forth
the offense in the words of the statute itself, as long as
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‘those words of themselves fully, directly, and expressly,
without any uncertainty or ambiguity, set forth all the elements
necessary to constitute the [offense] intended to be punished.’”
Hamling v. United States, 418 U.S. 87, 117 (1974) (quoting
United States v. Carll, 105 U.S. 611, 612 (1882)); accord United
States v. Lockhart, 382 F.3d 447, 449 (4th Cir. 2004). However,
any general description based on the statutory language “must be
accompanied with such a statement of the facts and circumstances
as will inform the accused of the specific [offense], coming
under the general description, with which he is charged.”
Hamling, 418 U.S. at 117-18 (quotation mark omitted); see also
Russell v. United States, 369 U.S. 749, 765 (1962) (noting that
an indictment must “descend to particulars” where the definition
of an offense includes generic terms (quotation marks omitted)).
“Thus, the indictment must also contain a statement of the
essential facts constituting the offense charged.” United
States v. Quinn, 359 F.3d 666, 673 (4th Cir. 2004) (quotation
marks omitted).
In this case, Count One charges Defendant with Social
Security fraud, in violation of 42 U.S.C. § 408(a)(4), and Count
Two charges Defendant with federal health benefit program fraud,
in violation of 42 U.S.C. § 1320a-7b. Both statutes penalize
anyone who “conceals or fails to disclose” any event affecting
his right to disability or health benefits and payments “with an
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intent fraudulently to secure” greater benefits or payments than
are due or when no benefit or payment is authorized. 42 U.S.C.
§ 408(a)(4); 42 U.S.C. § 1320a-7b(a)(3).
Count One of the indictment charged that Defendant, from
about 1996 through about September 2009,
having knowledge of the occurrence of any event
affecting his initial or continued right to any
payment under Subchapter II of Title 42 (Disability
Insurance Benefits), did conceal and fail to disclose
said events with intent to fraudulently secure payment
in a greater amount than is due and when no payment is
authorized; to wit, the defendant concealed and failed
to disclose his employment and earnings to the Social
Security Administration.
J.A. 14. Similarly, Count Two charged that Defendant, from
about April 1998 through about September 2009,
having knowledge of the occurrence of any event
affecting his initial and continued right to any
benefit and payment under a federal health care
program, did conceal and fail to disclose said event
with intent to fraudulently secure such payment and
benefit in a greater amount and quantity than is due
and when no such benefit and payment is authorized; to
wit, the defendant concealed and failed to disclose
his employment and earnings to Medicare.
J.A. 15.
Further, the indictment identified Defendant’s employment
history, starting in 1996 and continuing through the charged
time period, as the “event” that triggered his disclosure
obligations and alleged that Defendant’s concealment and failure
to disclose this employment constituted the criminal conduct.
Specifically, the indictment alleged that Defendant “was
8
employed but did not report his employment to the SSA or to
Medicare despite the fact that his employment would affect his
eligibility for, and the amounts he was eligible to receive
from, these federal benefit programs.” J.A. 12. The indictment
also stated that Defendant “knew that employment is an event
affecting his continued right to [Social Security Disability]
and Medicare benefits and he concealed and failed to disclose
such events with a fraudulent intent . . . .” J.A. 13.
We agree with the district court that this indictment was
sufficient to apprise Defendant of the charges against him and
identify the essential elements of the crimes charged. The
indictment tracked the statutory language, provided specific
details about the nature of the charges, and identified the
“event” triggering Defendant’s disclosure obligations.
Defendant has shown, and we have found, nothing requiring the
government to list each specific job Defendant held during this
period as a basis for charging him with these fraud crimes.
Further, the government clarified any confusion by filing a bill
of particulars providing Defendant with specific notice of each
job within his employment history that served as the “event” in
the indictment. We therefore conclude that the indictment here
was sufficiently specific to pass constitutional muster.
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III.
Defendant also argues that the government failed to allege
specific intent to defraud, an essential element of each crime,
for all the counts in the indictment. We review this issue de
novo. Woolfolk, 399 F.3d at 594.
Defendant rightly notes that every essential element of an
offense must be charged. See Kingrea, 573 F.3d at 191. And
intent to defraud is an element here. Fatally for Defendant’s
argument, however, his indictment charges it.
Specifically, in Count One, the government alleged that
Defendant “did conceal and fail to disclose said events with
intent to fraudulently secure payment in a greater amount than
is due and when no payment is authorized; to wit, the defendant
concealed and failed to disclose his employment and earnings to
the Social Security Administration.” J.A. 14. Similarly, in
Count Two, the government alleged that Defendant “did conceal
and fail to disclose said event with intent to fraudulently
secure such payment and benefit . . . to wit, the defendant
concealed and failed to disclose his employment and earnings to
Medicare.” J.A. 15.
The other portions of the indictment provide details and
allege that Defendant knew he was required to report his
employment, failed to do so, and received benefit payments and
benefits during that time. In Count Three, the government
10
directly charges that Defendant “did willfully execute and
attempt to execute a scheme and artifice to defraud a federal
health care benefit programs [sic], that is, Medicare, to
obtain, by means of false and fraudulent pretenses,
representations and promises, money and property owned by and
under the custody and control of Medicare, . . . .” J.A. 16.
These allegations plainly charge Defendant with the specific
intent to defraud that is required for the pertinent crimes.
Defendant nevertheless presses that the indictment alleges
only “passive non-disclosure of employment by a recipient of
Social Security benefits” rather than affirmative concealment of
material facts and that these allegations are insufficient to
sustain the fraud charges. Appellant’s Br. at 32. In support
of this argument, he relies heavily on United States v.
Phillips, 600 F.2d 535 (5th Cir. 1979). But Defendant’s
reliance on that case is misplaced—not least because Phillips is
not about the sufficiency of an indictment, but is instead a
challenge to the sufficiency of the evidence. There, the Fifth
Circuit decided that the government had provided insufficient
evidence of the defendant’s fraudulent intent by failing to show
that the defendant knew he was not entitled to benefits or
adducing evidence of the defendant’s “devious” behavior such
that the jury could infer Phillips’s fraudulent intent.
Phillips, 600 F.2d at 538-40. Here, the relevant question is
11
whether the government charged that Defendant committed fraud by
intentionally concealing his employment. Phillips has minimal
application in the context of Defendant’s challenge to his
indictment.
In sum, the indictment charged the requisite intent. We,
therefore, reject Defendant’s argument that the government
failed to allege specific intent to defraud.
IV.
Defendant also argues that the district court erred in
denying his motion to dismiss the indictment as time barred
under the statute of limitations. We review this issue de novo
because the district court’s decision depended solely on a
question of law. United States v. United Med. & Surgical Supply
Corp., 989 F.2d 1390, 1398 (4th Cir. 1993).
It is undisputed that there is a five-year statute of
limitations for the fraud offenses at issue here. See 18 U.S.C.
§ 3282(a) (setting forth general five-year statute of
limitations for non-capital crimes). The Supreme Court has
recognized that “‘[s]tatutes of limitations normally begin to
run when the crime is complete.’” Toussie v. United States, 397
U.S. 112, 115 (1970) (quoting Pendergast v. United States, 317
U.S. 412, 418 (1943)). “Criminal acts over an extended period,
however, may be treated as a ‘continuing offense’ for
12
limitations purposes when a criminal statute explicitly compels
that result, or if ‘the nature of the crime involved is such
that Congress must assuredly have intended that it be treated as
a continuing one.’” United States v. Smith, 373 F.3d 561, 563-
64 (4th Cir. 2004) (per curiam) (quoting Toussie, 397 U.S. at
115).
In this case, Defendant moved to dismiss the indictment,
which was filed in March 2012, as time-barred because some of
the charged conduct occurred before March 2007. The district
court denied the motion and ruled that “here there is no
limitations in this case . . . as to Counts 1 and 2, much of
which charged is clearly within the five-year period, anyway,
and as to those matters before, the doctrine of continuing
offenses would apply with respect to any limitation issue.”
J.A. 85. The district court then issued a memorandum
reiterating that the charged offenses were continuing offenses
and that “the defendant’s continued concealment constitutes a
‘course of conduct’ that affects his remaining rights going
forward, and the course of conduct—failing to report—is that act
which constitutes the violation.” J.A. 131-33.
Defendant does not challenge the determination that these
crimes are continuing offenses for statute of limitations
purposes. See Appellant’s Br. at 35 n.3 (“Perry accepts for the
purposes of this discussion the district court’s determination
13
that the charged offenses are continuing offenses.”). Instead,
Defendant contends, as he did in his post-trial Rule 29 motion,
that the limitations period began to run not when the continuing
offenses were complete, but instead in 1999 when the government
knew of, or could have discovered, Defendant’s non-disclosure.
Defendant has pointed to no binding precedent applying such
a discovery rule in a case like this, nor have we found any.
Instead, Defendant attempts to rely on a Fourth Circuit civil
forfeiture case and some easily distinguishable out-of-circuit
immigration offense cases. United States v. Kivanc, 714 F.3d
782, 789 (4th Cir. 2013) (involving civil forfeiture statute
that states that the action must be commenced within “‘five
years after the time when the alleged offense was
discovered[.]’” (emphasis added) (quoting 19 U.S.C. § 1621));
United States v. DiSantillo, 615 F.2d 128, 134-36 (3d Cir. 1980)
(differentiating between the crime of entry through “regular
immigration service procedures” and the crime of “being found in
the United States when the alien did not enter . . . through an
INS port of entry” and deeming “illegal entry through a
recognized INS port” crime not a continuing offense); United
States v. Gomez, 38 F.3d 1031, 1037-38 (8th Cir. 1994) (deeming
crime of being “found in” the United States under 8 U.S.C. §
1326 a continuing offense). Aside from the fact that this case
involves a clearly different statute of limitations from the one
14
analyzed in Kivanc, both DiSantillo and Gomez focused on the
government’s ability to discover a defendant’s entry to the
United States as the basis to distinguish illegal reentry
violations under 8 U.S.C. § 1326 and determine whether those
violations are continuing offenses. We refuse to shoehorn these
round pegs into the square hole that is this case and,
accordingly, reject Defendant’s argument.
V.
Defendant challenges the sufficiency of the indictment on
Count Three. The parties disagree about the appropriate
standard of review, with Defendant arguing for de novo and the
government arguing for plain error. We need not resolve this
dispute because Defendant cannot prevail, even under the de novo
standard.
Count Three charged Defendant with violating 18 U.S.C. §
1347. That statute penalizes health care fraud, which is
committed by anyone who
knowingly and willfully executes, or attempts 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 money or
property owned by, or under the custody or control of,
any health care benefit program, . . . .
18 U.S.C. § 1347(a). As with Counts One and Two, the indictment
tracked the language of the statute and directly alleged that
15
Defendant “execute[d] a scheme and artifice to defraud . . .
Medicare[.]” J.A. 16.
The government premised its theory regarding Defendant’s
“scheme and artifice to defraud” on three particular
allegations: 1) Defendant was employed at “the Social Security
Administration, Hertz Corporation, L&J Cleaning, Macy’s . . .
and other businesses while he was receiving [Social Security
Disability] and Medicare benefits[;]” 2) Defendant “personally
profited from the scheme to defraud Medicare by obtaining
prescription drugs and not having to pay for the drugs and/or
make a co-payment[;]” and 3) Defendant “made false statements in
documents regarding his employment.” J.A. 16. Throughout the
indictment, the government alleged that Defendant “concealed and
failed to disclose” his employment while continuing to accept
benefits and payment. J.A. 12-17. Also, the government alleged
that Defendant applied for and received the Low Income Subsidy
to assist him in paying for his prescription drugs, in addition
to his Medicare Part D prescription drug benefits. It further
alleged that in his LIS application, despite being employed at
the time, Defendant stated that “I expect no earnings this
year.” J.A. 12. Defendant points to nothing requiring the
government to provide further factual allegations in the
indictment to support the alleged scheme and artifice to defraud
16
in Count Three. And we find nothing. Accordingly, we reject
this argument.
VI.
Finally, Defendant challenges the sufficiency of the
government’s evidence on his healthcare fraud conviction. The
standard for reversing a jury verdict of guilty is a high one:
the Court does so only “where the prosecution’s failure is
clear.” United States v. Foster, 507 F.3d 233, 244–45 (4th Cir.
2007) (quotation marks omitted). That is because “the appellate
function is not to determine whether the reviewing court is
convinced of guilt beyond reasonable doubt, but, viewing the
evidence and the reasonable inferences to be drawn therefrom in
the light most favorable to the Government, ‘whether the
evidence adduced at trial could support any rational
determination of guilty beyond a reasonable doubt.’” United
States v. Burgos, 94 F.3d 849, 863 (4th Cir. 1996) (en banc)
(quoting United States v. Powell, 469 U.S. 57, 67 (1984)). The
“jury’s verdict must be upheld on appeal if there is substantial
evidence in the record to support it,” where substantial
evidence is “evidence that a reasonable finder of fact could
accept as adequate and sufficient to support a conclusion of a
defendant’s guilt beyond a reasonable doubt.” United States v.
17
Young, 609 F.3d 348, 355 (4th Cir. 2010) (quotation marks
omitted).
To convict Defendant for healthcare fraud, the government
must prove that he “knowingly and willfully execute[d] . . . 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 money or
property owned by . . . any health care benefit program . . . .”
18 U.S.C. § 1347(a). See also Kivanc, 714 F.3d at 795 (same).
“[T]he specific intent to defraud may be inferred from the
totality of the circumstances and need not be proven by direct
evidence.” United States v. McLean, 715 F.3d 129, 138 (4th Cir.
2013) (quotation marks omitted).
In considering whether there existed a scheme to defraud,
we must look to the “common-law understanding of fraud[,]” which
we have interpreted to include “acts taken to conceal, create a
false impression, mislead, or otherwise deceive in order to
‘prevent[] the other [party] from acquiring material
information.’” United States v. Colton, 231 F.3d 890, 898 (4th
Cir. 2000) (quoting Restatement (Second) of Torts § 550 (1977))
(interpreting the scope of a scheme or artifice to defraud under
18 U.S.C. § 1344, the bank fraud statute); see also United
States v. Beverly, 284 F. App’x 36, 39 (4th Cir. 2008)
(unpublished but orally argued) (per curiam) (interpreting the
18
scope of a scheme or artifice to defraud under 18 U.S.C. § 1347,
the health care fraud statute).
“Although silence as to a material fact (nondisclosure),
without an independent disclosure duty, usually does not give
rise to an action for fraud, suppression of the truth with the
intent to deceive (concealment) does.” Colton, 231 F.3d at 899.
Almost surely for this reason, the Eighth Circuit upheld a
health care fraud guilty verdict in United States v. Phythian,
529 F.3d 807 (8th Cir. 2008). In that case, which we find
illuminating, the government’s evidence showed that the
defendant had worked, that SSA had advised the defendant of her
duty to report any work, and that the defendant nevertheless
failed to report her work while continuing to receive benefits.
Based on these facts, the Eighth Circuit held that “[r]eviewing
the evidence in the light most favorable to the verdict, a
reasonable jury could readily find [that Defendant] Phythian
violated § 408a(4).” Id. at 812.
Here, the jury had notably more evidence to support its
verdict than did the jury in Phythian. Specifically, the
government’s evidence showed that Defendant knew he had a duty
to report any employment to SSA. Indeed, in his application for
benefits that reflected, Defendant agreed to “promptly notify
Social Security if my medical condition improves so that I would
be able to work . . . [or] I go to work whether as an employee
19
or a self-employed person.” J.A. 453-54. See also, e.g., J.A.
630 (reflecting that SSA’s letter to Defendant explicitly stated
that “if you have applied for or are receiving Social Security
benefits, you are responsible for immediately notifying your
local Social Security Office of your employment because your
income may affect your benefits”).
The government showed the materiality of Defendant’s
employment status as it related to his Social Security benefits—
i.e., that Defendant’s benefits would have been affected and
likely terminated had he informed SSA about his employment.
Further, the government presented evidence that Defendant’s job
with the SSA as benefits technical examiner included training on
the receipt and termination of benefits, including that benefits
may be reduced, suspended, or terminated upon employment and
receipt of income.
At trial, Defendant’s SSA supervisor agreed that Defendant
worked on cases involving people who were working and receiving
disability payments. J.A. 738. And the government sent
Defendant several documents requesting employment information
and reiterating Defendant’s disclosure obligations in 1999,
2006, and 2008, but Defendant failed to disclose any of his
employment until returning a work activity report in July 2008.
This report corroborated the fact that Defendant had been
employed while receiving benefits and supported SSA’s decision
20
to terminate his benefits. Further, the response was incomplete
because Defendant omitted from his work history employment for
which there were no tax records. Compare S.J.A. 1-14 (work
activity report) with J.A. 801 (Defendant’s reference to Carla
and Company position in 2002 credit application), S.J.A. 16, 18
(Defendant’s reference to L&J Services position in 2005 Hertz
application and resume).
In addition, the evidence showed that Defendant continued
receiving the LIS to supplement his Medicare prescription drug
benefits in 2007 and 2008 while he was employed with SSA. He
received over four thousand dollars worth of LIS benefits during
that time. And, while working at SSA, Defendant continued to
cash government disability checks totaling “a little bit less
than $15,000.” J.A. 795-97.
In sum, the government presented sufficient evidence for a
rational jury to find that Defendant engaged in a health care
fraud scheme. Accordingly, his conviction must be affirmed.
VII.
For the foregoing reasons, we hold that the district court
properly denied Defendant’s motion to dismiss the indictment and
motion for judgment of acquittal. Therefore, the district
court’s judgment is
AFFIRMED.
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