United States v. Natalya Shvets

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 14-3669
________________
UNITED STATES OF AMERICA
v.
NATALYA SHVETS,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-12-cr-00112-002)
District Judge: Honorable Eduardo C. Robreno
_____________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
November 17, 2015
Before: AMBRO, HARDIMAN, and SLOVITER, Circuit Judges.
(Opinion filed: November 20, 2015)
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OPINION
______________________
SLOVITER, Circuit Judge.
Natalya Shvets appeals her conviction for conspiracy to commit health care fraud
in violation of 18 U.S.C. § 1349 and for health care fraud in violation of 18 U.S.C.

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
§§ 1347 and 2.1 A jury found Shvets guilty of conspiracy and seven substantive health
care fraud offenses. She now argues that the District Court committed reversible error
based on the instruction given to the jury as to the meaning of “willfully” under § 1347.
(Gov. Br. 3; PSR ¶ 2.)
Shvets argues that § 1347 requires “proving defendant’s knowledge of the statutes
alleged to make her conduct criminal,” and, furthermore, that the “knowingly and
willfully” element attaches to a separate provision defining “health care benefit
program[s]” as those which “affect[] commerce.” Appellant’s Br. at 15-16 (citing 18
U.S.C. § 24(b)).
For the following reasons, we will affirm.
I. Background
On March 21, 2012, a federal grand jury in the Eastern District of Pennsylvania
indicted Natalya Shvets, along with four other defendants, on conspiracy to commit
health care fraud, in violation of 18 U.S.C. § 1349, as well as multiple substantive counts
of health care fraud in violation of 18 U.S.C. §§ 1347 and 2. (App. 23-39.) On March
25, 2014, the jury convicted Shvets as charged. (App. 1823-25.)
The charges concerned Shvets’ employment as a nurse for Home Care Hospice,
Inc. (“HCH”), a for-profit provider of hospice services. (App. 23.) HCH received
insurance reimbursements for “providing home care and in-facility care to purportedly
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The District Court had subject matter jurisdiction over the case pursuant to 18 U.S.C.
§ 3231. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.
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terminally ill patients with life expectancy prognoses of six months or less.” App. at 23.
In particular, Medicare paid more for patients reported as requiring “continuous care,”
defined as at least eight hours of service per day with a majority of the care provided by a
nurse. 42 C.F.R. § 418.302.
According to the indictment and testimony elicited at trial, Shvets (along with
other nurses at HCH) agreed to create false records documenting continuous care claims
(Gov. Br. 6-7, App. 592-600.) and subsequently prepared numerous fictitious schedules
and nursing notes, for which she was individually paid $20 per hour. (App. 434, 443-52.)
In total, HCH received $253,196 as a result of the conspiracy in which Shvets
participated. (Gov. Br. 7, PSR 17.)
At trial, defense counsel moved for a Rule 29(a) judgment of acquittal, arguing
that the Government “ha[d] to show that [Shvets] actually did something which she knew
that the law forbids” and that Shvets “ha[d] to know of those provisions in order to
violate them.” App. at 1581, 1583. Defense counsel analogized the healthcare fraud
statute to structuring, wherein the Government “ha[s] to show not only knowledge that
it’s illegal to structure, . . . to prevent a bank from filing a currency transaction report, but
moreover, that [the defendant has] specific knowledge that the regulations make it illegal
for [the defendant] to do that.” App. at 1583.
The Government opposed the Rule 29(a) motion, arguing that “the healthcare
fraud statute does not require that the [defendant] . . . have a complete understanding of
what the Medicare . . . regulations embrace.” App. at 1583-84. Defense counsel
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conceded that “if ‘willfully’ is just defined as knowledge that you[r] conduct was wrong,
bring it to the jury,” and acknowledged that if the pattern Third Circuit instruction on
“willfulness” applied, the Rule 29 motion would be defeated. App. at 1584.
Subsequently, defense counsel again admitted that “if it’s general willfulness, . . . I
think they get to the jury.” App. at 1594-95. He also noted the legislative history of
§ 1347, which included a Congressional “conflict report” regarding the Senate’s addition
of “willfully” to the statute. App. at 1595-96. The District Court clarified that, in
essence, defense counsel was arguing that a 2010 amendment to § 1347 (defining
willfulness) amounted to “a substantive change” and that the issue therefore, was
“whether or not [the change was meant to] simply . . . clarify or whether . . . it filled in a
gap.” App. at 1596.
Following additional discussion, defense counsel stated that he now believed that
the government’s willfulness instruction “get[s] to the jury.” App. at 1609. He
continued, “We did the research . . . . It was a clarifying amendment. . . . So they have to
show what I call general willfulness, an intent to disregard or disobey the law.” App. at
1609. The Court ultimately denied the defendant’s Rule 29 motion. (App. 1614.)
The Court then turned to the arguments regarding jury instructions. (App. 1627.)
The Court noted that the parties agreed to the use of Third Circuit Model Jury
Instructions 5.02 (“Knowingly”) and 5.05 (“Willfully”). The Government then argued
for the inclusion of optional language in pattern instruction 5.05: “Willfully does not
require proof that the actor know of the existence and meaning of the statute making his
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conduct criminal.” App. at 1637. Defense counsel replied, “Well, judge, I agree.” App.
at 1638. Defense counsel continued, “That was the whole point of that legislative history
research I did on the 2010 amendment. . . . That just codifies the question if we have to
go over the statute specifically, and if you do, you get charged on it, and if you don’t you
don’t.” App. at 1638. The Court adjourned the hearing and brought the jury in for
closing arguments. (App. 1638-39.)
The Court delivered the following instructions to the jury on the willfulness:
[T]o find Natalya Shvets acted willfully, you must find that the evidence
proved beyond a reasonable doubt that she acted with a purpose to disobey
or disregard the law. ‘Willfully’ does not, however, require proof that
Natalya Shvets had an evil motive or a bad purpose, other than the purpose
to disobey or disregard the law. ‘Willfully’ does not require proof that the
act toward the defendant in this case knew of the existence and meaning of
a statute making her conduct criminal.
App. at 1773-74.
The jury convicted Shvets of all charges. (App. 1823-26.)
II. Analysis
A. Standard of Review
We must first decide what standard of review to apply to the District Court’s
willfulness instruction. Under Federal Rule of Criminal Procedure 30, a party’s failure to
object limits our review to whether the District Court committed a plain error. Fed. R.
Crim. P. 30(d); 52(b). The Government argues that Shvets did not object to the jury
instruction.
We agree. There is no evidence that Shvets’ trial counsel objected to the use of
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the final instruction on willfulness, either before or after the Court charged the jury.
Instead, defense counsel stated that he “agree[d]” with the “willfulness” instruction
argued for by the Government, thereby abandoning his prior argument for a stricter level
of intent. Defense counsel did request in writing a “willfulness” instruction that would
have required the Government to “prove that Natalya Shvets . . . knew of the existence
and meaning of the statute and regulations which the government alleges made her
conduct criminal.” App. at 110. However, merely requesting the charge before the jury
retires “[does not] preserve an objection to the instruction actually given by the court.”
United States v. Pelullo, 399 F.3d 197, 221 (3d Cir. 2005) (alteration in original) (quoting
Jones v. United States, 527 U.S. 373, 388 (1999)). As a result of Shvets’ failure to
object, her claim may be reviewed only for plain error. See United States v. Flores, 454
F.3d 149, 156 (3d Cir. 2006) (citing Fed. R. Crim. P. 30; Gov't of the Virgin Islands v.
Knight, 989 F.2d 619, 631 (3d Cir. 1993)).
B. Plain Error Analysis
Under the plain error standard, we may reverse the District Court’s ruling only if
(1) an error occurred, (2) the error was plain, and (3) the error “affected the defendant’s
substantial rights.” United States v. Syme, 276 F.3d 131, 143 n.4 (3d Cir. 2002)
(alteration in original) (quoting United States v. Nappi, 243 F.3d 758, 762 (3d Cir.
2001)). An “error” by a trial court is “[a] deviation from a legal rule in circumstances in
which the legal rule has not been waived.” Govt. of Virgin Islands v. Rosa, 399 F.3d 283,
290 (3d Cir. 2005) (citing United States v. Olano, 507 U.S. 725, 732-33 (1993)).
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i. Waiver
Shvets did not waive her objection to the willfulness instruction—she merely
forfeited it. “Whereas forfeiture is the failure to make the timely assertion of a right,
waiver is the ‘intentional relinquishment or abandonment of a known right.’” Olano, 507
U.S. at 733 (quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938)). Unlike waiver,
forfeiture does not preclude review: “[W]hen a legal rule has been waived, an appeal
based upon the nonadherence to that legal principle is precluded. If, however, the correct
application of the rule merely was ‘forfeited,’ Rule 52(b) provides a basis for review.”
Rosa, 399 F.3d at 290 (footnote omitted); see also Fed. R. Crim. P. 30(d) (allowing
review pursuant to Rule 52(b) when counsel fails to object). Since the record evidences
that Shvets’ counsel merely acquiesced to, and did not specifically request, the
willfulness instruction as given by the trial court, we may reach the merits of her
argument. Cf. United States v. Holmes, 607 F.3d 332, 335 (3d Cir. 2010).
ii. Willfulness
The jury instruction for “willfully” used by the trial court was not erroneous.
Section 1347 makes it illegal to “knowingly and willfully . . . defraud any health care
benefit program.” Although “willfully” is a “notoriously slippery term,” United States v.
Starnes, 583 F.3d 196, 210 (3d Cir. 2009) (citation omitted), it is generally defined as
“act[ing] with knowledge that [one’s] conduct was unlawful.” Bryan v. United States,
524 U.S. 184, 192 (1998) (quoting Ratzlaf v. United States, 510 U.S. 135, 137 (1994)).
The proper definition of “willfully” under § 1347 hinges primarily on the nature of
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a 2010 amendment to the statute, which states that “[w]ith respect to violations of this
section, a person need not have actual knowledge of this section or specific intent to
commit a violation of this section.” 18 U.S.C. § 1347(b). The pre-2010 version of
§ 1347, under which Shvets was charged and convicted, does not contain this provision
and is silent as to the definition of willfulness under the statute. Therefore, the question
is whether the 2010 amendment represents a substantive change in the statute’s mens rea
requirement, or whether it was merely clarifying in nature.
As conceded by Shvets’ trial counsel, the legislative history of the 2010
amendment forecloses Shvets’ current argument that § 1347 requires proof of the
defendant’s knowledge of the statute. See 155 Cong. Rec. S10853 (daily ed. Oct. 28,
2009) (statement of Sen. Kaufman) (“The bill . . . addresses confusion [and] . . . clarifies
that ‘willful conduct’ in this context does not require proof that the defendant had actual
knowledge of the law in question or specific intent to violate that law.”). And the weight
of the case law interpreting § 1347 and the analogous Anti-Kickback statute, 42 U.S.C. §
1320a-7b, only strengthens this conclusion. See United States v. Davis, 132 F.3d 1092,
1094 (5th Cir. 1998) (requiring “specific intent to do something the law forbids; that is to
say, with bad purpose either to disobey or disregard the law”); United States v. Starks,
157 F.3d 833, 837–39 (11th Cir. 1998) (holding that knowledge of the Anti-Kickback
statute was not required); United States v. Jain, 93 F.3d 436, 440-41 (8th Cir. 1996)
(requiring proof that the defendant “knew that his conduct was wrongful, rather than
proof that he knew it violated a known legal duty”); United States Baystate Ambulance &
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Hosp. Rental Serv., Inc., 874 F.2d 20, 33 (1st Cir. 1989) (holding that “willfully” means
to do something the law prohibits).
The only court of appeals to find that the pre-2010 version of § 1347 or the Anti-
Kickback statute required a heightened level of intent is the Ninth Circuit. See Hanlester
Network v. Shalala, 51 F.3d 1390, 1400 (9th Cir. 1995) (holding that “knowingly and
willfully” in the Anti-Kickback statute required defendants to have knowledge of the
statute and “specific intent to disobey the law”). However, the 2010 amendment to
§ 1347 rejected this interpretation, codifying the majority view. See 155 Cong. Rec.
S10853 (daily ed. Oct. 28, 2009) (statement of Sen. Kaufman) (“This heightened mental
state requirement may be appropriate for criminal violations of hyper-technical
regulations, but it is inappropriate for these crimes, which punish simple fraud.”).
The District Court’s willfulness instruction was not erroneous. But even if it were,
any such error was not “plain” as is required for us to reverse under the plain error
standard. Because there was no plain error in this case, it is unnecessary to examine
whether Shvets’ “substantial rights” were affected by the instruction as given.
III. Conclusion
For the foregoing reasons, we deny Shvets’ appeal and affirm the judgment of
conviction of the District Court.
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