United States v. Jackson

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT March 2, 2007
Charles R. Fulbruge III
Clerk
No. 04-20600
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
CLEMIS LARAINE JACKSON, MD; WESLEY ALFORD BOYD, JR
Defendants - Appellants
Appeals from the United States District Court
for the Southern District of Texas, Houston
No. 4:02-CR-120-3
Before KING, GARZA, and OWEN, Circuit Judges.
KING, Circuit Judge:*
Defendants-appellants Clemis Laraine Jackson, M.D. and
Wesley Alford Boyd, Jr. appeal their convictions and sentences
resulting from their involvement in physical-therapy clinics that
fraudulently billed Medicare and Medicaid. For the reasons that
follow, we affirm Jackson’s convictions and sentence. We also
affirm Boyd’s convictions for conspiracy and payment of illegal
remunerations (kickbacks). But concluding that the government
presented insufficient evidence, we reverse Boyd’s conviction for
*
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this opinion should not be published and is not precedent except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.
health-care fraud, and we vacate his sentence and remand for
resentencing.
I. FACTUAL AND PROCEDURAL BACKGROUND
This case centers around two Houston, Texas, physical-
therapy clinics that engaged in fraudulent billing of Medicare
and Medicaid. The first of the clinics, Quality Medi-Care Health
Care Clinic, Inc. (“Quality”), was opened and operated by Henry
Lewis Reece, Jr. and Mark Anthony Broussard. Quality was open
from about 1996 to 1998. Initially, Quality’s business consisted
primarily of automobile-accident victims. At some point,
however, Broussard brought his friend, defendant-appellant Wesley
Alford Boyd, Jr., to meet with Reece, and Boyd advised them that
they should get Quality enrolled with Medicare and Medicaid.
Broussard and Reece hired Boyd as a consultant and paid him
$10,000 to assist them in transitioning Quality into a primarily
Medicare/Medicaid clinic. Boyd’s involvement with Quality was
limited to this transition period.
Since Medicare and Medicaid would pay only for services
billed by a physician, Reece and Broussard brought defendant-
appellant Clemis Laraine Jackson, M.D. on board as Quality’s
Medical Director. Jackson’s role was to perform a physical
examination on each patient, diagnose the patient, and prescribe
and oversee the patient’s physical therapy.
Although it was unlawful to do so, Quality hired individuals
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to recruit Medicare and Medicaid patients to the clinic and paid
them $100 to $300 for each patient referral. These “marketers”
targeted areas with a high concentration of elderly individuals.
Reece testified that Boyd told him and Broussard of adult-day-
care centers and elderly communities where potential patients
could be found. In addition to using marketers, Quality paid its
employees bonuses for patient referrals.
Quality also intentionally misdiagnosed patients in order to
receive maximum payment from Medicare and Medicaid. Initially,
the clinic diagnosed many patients with arthritis. But after
Reece learned that Medicare did not pay as much for arthritis-
related therapy since it was merely palliative, he asked Jackson
to diagnose arthritic patients with conditions such as sprains
and strains. Jackson complied, and the clinic reaped the benefit
of higher Medicare payments.
The clinic also ignored Medicare and Medicaid’s requirement
of direct physician supervision. Medicare and Medicaid covers
physical therapy only if it is performed under the direct
supervision of a doctor. Although the therapy does not need to
be performed in a doctor’s immediate presence, Medicare and
Medicaid cover it only if it is performed in the same suite while
a doctor is present to assist if needed. But Quality billed
Medicare and Medicaid for therapy performed while Dr. Jackson was
not at the clinic, as well as for therapy provided in patients’
homes and not in Dr. Jackson’s presence. Reece testified that
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Boyd told him the direct-supervision requirement was a gray area
and that the clinic would not be investigated as long as it did
not bill more than a certain amount.
Quality additionally billed Medicare and Medicaid for
services that were never performed. This included billing for
extra, unperformed therapy sessions as well as for extra,
unperformed treatments within a therapy session.
At some point after Quality closed, Boyd approached Reece
and Broussard, told them he was not doing well, and offered to
sell them his Medicare and Medicaid provider numbers so that they
could open a new clinic. Boyd, Reece, and Broussard partnered
together to open the second clinic at issue in this case, Phycare
Healthcare Systems (“Phycare”). Phycare’s physician was Howard
Grant, M.D. Many of Phycare’s initial patients and employees
came from Quality. Like Quality, Phycare employed marketers who
were paid to recruit patients, and it paid its employees bonuses
for patient referrals.
Initially, Boyd was not heavily involved in Phycare’s day-
to-day operations, which were primarily overseen by Reece. But
after a short period, in April 1998, Boyd terminated the
partnership, and Reece and Broussard were no longer associated
with Phycare. After this occurred, Dr. Grant ran the day-to-day
operations. Throughout this period, however, Boyd was the sole
signatory on Phycare’s bank account; Boyd wrote the employees’
paychecks, and he endorsed and deposited the checks that came in
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to Phycare.
After a dispute between Boyd and Dr. Grant,1 Boyd severed
their business ties. Boyd subsequently opened Houston Rehab with
his mortuary-school classmate, Carl Brooks, in a different suite
of the same building where Phycare was located.2 Houston Rehab
also employed the use of individuals to recruit patients to the
clinic.
After an investigation involving both state and federal law-
enforcement agencies into various physical-therapy clinics,3 the
grand jury handed down a 70-count indictment.4 Count 1 charged
that Boyd and Jackson, along with several other individuals,
conspired together in violation of 18 U.S.C. § 371 to pay illegal
remunerations (kickbacks), to commit health-care fraud, and to
launder money. Counts 2 to 14 alleged various payments of
1
The dispute centered around (1) money Dr. Grant believed
Boyd owed him and (2) improper billing for Phycare patient
Timothy Brown, which is discussed in detail in the section of the
opinion pertaining to the sufficiency of the evidence.
2
The government and Boyd dispute whether Houston Rehab was
a new clinic separate from Phycare or rather the same clinic as
Phycare but with a new name. This dispute is not important for
the purposes of deciding this appeal.
3
The investigation looked into many more clinics than the
three mentioned here. We discuss solely Quality, Phycare, and
Houston Rehab because they are the only clinics relevant to this
appeal.
4
Nine individuals, including Jackson, Boyd, Reece, and
Broussard, were indicted. Pursuant to a plea agreement, Reece
pleaded guilty and testified in this case. Jackson, Boyd, and
Ronald A. Haley, M.D. proceeded to a jury trial. The jury
acquitted Haley of all charges.
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illegal remunerations in violation of 42 U.S.C.
§ 1320a-7b(b)(2)(A). Boyd was charged in counts 9 and 10 for two
checks paid to Phycare employee Michelle Gordon, allegedly for
patient referrals. Counts 15 to 60 alleged health-care fraud in
violation of 18 U.S.C. § 1347. Boyd was charged in count 44 in
connection with an allegedly fraudulent claim Phycare submitted
to Medicare for patient Timothy Brown.5
The jury convicted Jackson and Boyd of the counts listed
above. Boyd and Jackson now appeal both their convictions and
their sentences.
II. SUFFICIENCY OF THE EVIDENCE
A. Standard of Review
Because Boyd preserved his challenge to the sufficiency of
the evidence, we review de novo the district court’s denial of
his Rule 29 motion for a judgment of acquittal. United States v.
Anderson, 174 F.3d 515, 522 (5th Cir. 1999) (citing United States
v. Payne, 99 F.3d 1273, 1278 (5th Cir. 1996)).
In reviewing the sufficiency of the evidence, we view the
5
Boyd was also charged in counts 50, 51, 52, and 53 in
connection with certain Medicare billing performed by Houston
Rehab. The district court granted Boyd’s Rule 29 motion for a
judgment of acquittal on these counts.
Additionally, Jackson was charged in counts 24 and 25, but
the jury acquitted him of these charges.
Counts 61 to 70 alleged money laundering in violation of 18
U.S.C. § 1956(a)(1)(B)(i). Neither Boyd nor Jackson was charged
with money laundering.
-6-
evidence and the inferences drawn therefrom in the light most
favorable to the verdict, and we determine whether a rational
jury could have found the defendant guilty beyond a reasonable
doubt. Id. (citing United States v. Burton, 126 F.3d 666, 669
(5th Cir. 1997); Payne, 99 F.3d at 1278). “The evidence need not
exclude every reasonable hypothesis of innocence or be wholly
inconsistent with every conclusion except that of guilt, and the
jury is free to choose among reasonable constructions of the
evidence.” Id. (quoting Burton, 126 F.3d at 669-70). “Moreover,
our standard of review does not change if the evidence that
sustains the conviction is circumstantial rather than direct.”
Id. (citing Burton, 126 F.3d at 670; United States v. Cardenas, 9
F.3d 1139, 1156 (5th Cir. 1993); United States v. Bell, 678 F.2d
547, 549 n.3 (Former 5th Cir. 1982)).
But “a verdict may not rest on mere suspicion, speculation,
or conjecture, or on an overly attenuated piling of inference on
inference.” United States v. Pettigrew, 77 F.3d 1500, 1521 (5th
Cir. 1996) (citing United Stats v. Menesses, 962 F.2d 420, 427
(5th Cir. 1992)). And “if the evidence, viewed in the light most
favorable to the verdict, gives equal or nearly equal
circumstantial support to a theory of guilt and a theory of
innocence, we must reverse the conviction.” United States v.
Salazar, 66 F.3d 723, 728 (5th Cir. 1995) (per curiam) (citing
United States v. Sanchez, 961 F.2d 1169, 1173 (5th Cir. 1992)).
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B. Health-Care Fraud
Boyd first challenges the sufficiency of the evidence for
his conviction on count 44 of health-care fraud in violation of
18 U.S.C. § 1347.6 After carefully reviewing the trial testimony
in the light most favorable to the government, we conclude that a
rational jury could not have found that the government proved
every element of count 44 beyond a reasonable doubt.
The indictment alleged in counts 15 to 60 that various
defendants engaged in a scheme to fraudulently obtain money from
Medicare and Medicaid by billing Medicare and Medicaid for
therapy not covered, not ordered by a physician, not provided by
qualified persons, and/or not provided at all. Count 44
specifically charged Boyd with submitting a false claim to
Medicare in the amount of $1,890.00 for services relating to
Phycare patient Timothy Brown.
6
Section 1347 makes it a crime to
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 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.
-8-
Brown testified that he was referred to Phycare in April
1998. Dr. Grant evaluated Brown during his first visit, and
Brown received treatment at Dr. Grant’s office three times a week
for several weeks. But in May or June of 1998, transportation
issues caused Brown to stop going to Phycare for further
treatment. After Brown stopped going to Phycare, however, he
received several Medicare Explanation of Benefits statements
indicating that Phycare had billed Medicare for treating Brown in
June and July of 1998. Brown discussed these statements in
person with Dr. Grant, and Dr. Grant explained that someone else
was billing Medicare automatically and that the automatic billing
had not been halted. Brown asked Dr. Grant for some money for
bringing the matter to his attention, and Dr. Grant paid Brown
$200 or $250 in cash. Brown also talked with Boyd by phone; Boyd
told Brown that the money Medicare paid on the claims would be
returned to Medicare.
Boyd does not dispute that Phycare continued to bill
Medicare for treating Brown even after Brown had stopped going to
Phycare. But Boyd contends that there is insufficient evidence
he knowingly billed Medicare for these unperformed services. He
argues that the evidence demonstrates the billing was being
performed automatically and that the false claim was submitted
because Brown stopped showing up for his appointments.
To establish that Boyd submitted the claim fraudulently, the
government first points to evidence that Boyd owned Phycare, that
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Boyd derived the most personal benefit from Phycare’s operation,
that Boyd was the sole signatory on Phycare’s bank account, that
Medicare paid Phycare $875.00 on the claim underlying count 44,
and that Boyd endorsed and deposited the Medicare check in
Phycare’s account. But this evidence does nothing more than
associate Boyd to some degree with the inaccurate claim; it does
not establish Boyd’s knowledge that the claim was inaccurate
either when it was submitted to Medicare or when the check was
received and deposited. Boyd’s having deposited the Medicare
check is equally as consistent with his purported belief in the
claim’s accuracy as it is with his alleged knowledge of its
inaccuracy.
The government next contends that Boyd’s conviction may be
sustained because the false claim for Brown’s therapy was
submitted in the course of a broad scheme to defraud Medicare.
At oral argument, the government opined that the only reason
Phycare was opened was to defraud Medicare and Medicaid and that
every claim Phycare submitted was therefore fraudulent. But as
we explain below, the government failed to establish that Boyd’s
knowledge of and participation in a scheme to defraud Medicare
extended to the practice of billing Medicare for therapy that was
never performed.
We acknowledge that the government did establish Boyd’s
participation in certain untoward practices at Phycare. For
example, Boyd participated in paying Phycare’s employees bonuses
-10-
for referring patients. But there was no evidence that the
individual who referred Brown to Phycare was paid a referral
bonus. The government also established that Boyd condoned Reece
and Broussard’s practice at Quality of billing Medicare and
Medicaid for therapy that was performed without direct physician
supervision; Boyd told Reece, Broussard, and Jackson that this
was a gray area and that Quality would not be investigated as
long as it did not bill more than a certain amount. But the
government did not establish that this practice occurred at
Phycare.7 Moreover, it is undisputed that Brown’s therapy was
performed in Phycare’s office under the supervision of Dr. Grant.
Thus, although the government established Boyd’s participation in
certain questionable, even unlawful, practices at Phycare, none
of these practices was sufficient to sustain Boyd’s conviction on
count 44 because there was no evidence that these practices
occurred with respect to Brown’s therapy.
The only way the claim underlying count 44 could have been
fraudulent is if it were submitted to Medicare with knowledge
that the services were not performed. It thus would have been
highly relevant to count 44 had the government established that
Phycare routinely billed Medicare for services that were never
performed. But apart from the claim for Brown’s treatment, the
7
Reece did testify that Phycare was “going to operate in
the same manner that Quality . . . was operating,” but beyond
this broad statement, he did not testify that the direct-
physician-supervision rule was being violated at Phycare.
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government failed to present evidence that Phycare ever billed
Medicare for extra, unperformed therapy. And although the
government did establish that Quality routinely billed Medicare
for unperformed services after Boyd’s consultation services for
Quality were completed, the government never linked Boyd to such
billing at Quality. In sum, the government wholly failed to
present evidence that Boyd engaged in a scheme to defraud
Medicare by submitting claims for services that were never
performed.
Furthermore, the government never presented any evidence
refuting the innocent explanation its own witness provided for
the inaccurate claims: that the billing had been set up to be
done automatically and had simply not been stopped after Brown
stopped coming in for therapy. For example, there is no evidence
that Phycare continued to bill for Brown’s unperformed treatments
after Brown brought the situation to Boyd’s attention. Moreover,
the defense presented two letters that Boyd wrote to Dr. Grant in
which Boyd chided Dr. Grant for paying Brown money and asked Dr.
Grant for accurate documentation of the dates of Brown’s
treatment so that Boyd could determine how much to refund
Medicare; Dr. Grant never provided this information. And soon
after this incident, and in part because of this incident, Boyd
severed his relationship with Dr. Grant.
We conclude that the jury’s verdict on count 44 cannot
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stand, and we reverse Boyd’s conviction for health-care fraud.8
C. Illegal Remunerations (Kickbacks)
Boyd was convicted of counts 9 and 10 for the payment of
illegal remunerations (kickbacks) in violation of 42 U.S.C.
§ 1320a-7b(b)(2)(A).9 These counts concerned two checks in the
amounts of $300 and $200, respectively, that Boyd wrote to
Phycare employee Michelle Gordon allegedly for referring patients
to the clinic.
Boyd challenges the sufficiency of the evidence for these
counts. He does not dispute that he wrote the checks or that the
checks, if they were in fact payments for patient referrals, were
in connection with a federal health-care program. Instead, he
asserts that there was insufficient evidence the checks were for
patient referrals and that they instead could have been payroll
checks.
8
Because we reverse Boyd’s conviction for count 44, we need
not address Boyd’s argument that the jury instructions pertaining
to this count were erroneous.
9
Under this provision,
whoever knowingly and willfully offers or pays
any remuneration (including any kickback,
bribe, or rebate) directly or indirectly,
overtly or covertly, in cash or in kind to any
person to induce such person . . . to refer an
individual to a person for the furnishing or
arranging for the furnishing of any item or
service for which payment may be made in whole
or in part under a Federal health care
program . . . shall be guilty of a felony.
42 U.S.C. § 1320a-7b(b)(2)(A).
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Boyd relies primarily on the fact that Gordon changed her
testimony at trial. During direct examination, Gordon testified
that she received these checks as bonuses for referring patients
to the clinic, but on cross examination she changed her testimony
and said that she could not remember whether the particular
checks were for patient referrals or for her salary.10
We conclude that despite Gordon’s changed testimony, there
was sufficient evidence that these two checks were payments for
Gordon’s patient referrals. Gordon testified that she referred
up to 20 patients to Phycare, that she was paid by check for
patient referrals, and that Boyd wrote all the checks she
received from Phycare; Gordon never changed this part of her
testimony. Moreover, the $300 check that was the basis for count
9 was notated “PR” in the memo line; although Boyd argued that
“PR” stood for “payroll” rather than “patient referral,” the jury
was free to conclude otherwise in light of the other evidence.
The government additionally presented evidence that Gordon’s
normal payroll checks were for more than $500 and were not in
even amounts, and they were often notated “salary” or “salary +
gas.” Furthermore, the amounts of these particular checks were
in line with the $100-to-$300 range that Reece testified his
employees at Quality were paid for each referral.
10
Ultimately, on redirect examination, Gordon testified
that the check that was the basis for count 9 could have been for
payroll or for patient referral: “[W]hichever way you-all want it
to be. I don’t know. I can’t remember.”
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Based on this additional evidence, we conclude that a
rational jury could have found beyond a reasonable doubt that
Boyd wrote the particular checks in issue as payment for Gordon’s
referring Medicare or Medicaid patients to Phycare.
III. JURY INSTRUCTIONS
A. Standard of Review
Because Boyd did not preserve his arguments by proffering
the proper objections below, our review of the jury instructions
is for plain error. See United States v. Fuchs, 467 F.3d 889,
901 (5th Cir. 2006) (citing United States v. Rubio, 321 F.3d 517,
523 (5th Cir. 2003)). Under this standard, we may reverse only
if (1) there was error, (2) the error was clear and obvious, and
(3) the error affected the defendant’s substantial rights. See
id. (quoting United States v. Garcia Abrego, 141 F.3d 142, 165
(5th Cir. 1998)); FED. R. CRIM. P. 52(b). “In determining whether
a particular jury instruction was erroneous, we consider the jury
charge as a whole.” Russell v. Plano Bank & Trust, 130 F.3d 715,
721 (5th Cir. 1997) (reviewing for plain error) (citing Turnage
v. Gen. Elec. Co., 953 F.2d 206, 211-12 (5th Cir. 1992)).
Generally, to demonstrate that his substantial rights were
affected, “the defendant must make a specific showing of
prejudice.” United States v. Olano, 507 U.S. 725, 735 (1993);
see also United States v. Hickman, 331 F.3d 439, 443 (5th Cir.
2003) (“A defendant’s substantial rights are only affected if the
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error ‘affected the outcome of the district court proceedings.’”
(quoting Olano, 507 U.S. at 734)). Even if these criteria are
satisfied, reversal is discretionary; we reverse only if we
conclude that “the error seriously affects the fairness,
integrity or public reputation of judicial proceedings.” Olano,
507 U.S. at 736 (quotation marks and brackets omitted) (quoting
United States v. Atkinson, 297 U.S. 157, 160 (1936)); Garcia
Abrego, 141 F.3d at 166.
B. Illegal Remunerations (Kickbacks)
Boyd contends that the jury instructions for counts 9 and 10
contained plain error because the jury was instructed that it
could convict him based on “any kickback” paid “to any person.”
The portion of the jury instructions pertaining to these counts
described the first element of the crime of illegal remunerations
as, “offer[ing] or pa[ying] remuneration, including any kickback
or bribe, directly or indirectly, overtly or covertly, in cash or
in kind to any person.” Boyd argues that because there was
evidence that Boyd may have been involved with other kickback
payments, there was a substantial risk that the jury may have
convicted him on the basis of other purported kickbacks.
Viewing the jury charge as a whole, we conclude that the
instructions for counts 9 and 10 did not amount to plain error.
The district court instructed the jury that it was to “decide
whether the Government has proved beyond a reasonable doubt that
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the defendants are guilty of the crimes charged. The defendants
are not on trial for any act, conduct, or offense not alleged in
the indictment.” Furthermore, in the instructions pertaining to
counts 9 and 10, the court explained that the indictment charged
Boyd with making specific payments in the amounts of $300 and
$200. The court’s instruction on the first element simply
tracked substantially the language of 42 U.S.C. § 1320a-7b(b)(2).
Contrary to Boyd’s argument, we believe the risk of juror
confusion was low. We conclude that Boyd has not demonstrated
plain error that affected his substantial rights.
C. Multiple Conspiracies
Boyd’s contention that the district court committed plain
error by not giving the jury a multiple-conspiracies instruction
is baseless. In the portion of the instructions pertaining to
the conspiracy count, the court did include this circuit’s
pattern multiple-conspiracies instruction.11
11
The court instructed the jury:
Further, you must determine whether the
conspiracy charged in the indictment existed,
and, if it did, whether the defendant was a
member of it. If you find that the conspiracy
charged did not exist, then you must return a
not guilty verdict, even though you find that
some other conspiracy existed. If you find
that a defendant was not a member of the
conspiracy charged in the indictment, then you
must find that defendant not guilty, even
though that defendant may have been a member
of some other conspiracy.
Cf. FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS (CRIMINAL) § 2.21 (2001).
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D. Ex-Post-Facto Instruction
Count 1 charged Boyd with conspiracy to commit health-care
fraud, launder money, and pay illegal remunerations. With
respect to conspiracy to commit health-care fraud, Boyd argues
that the district court should have instructed the jury that it
could consider only the conduct that occurred after the health-
care-fraud statute took effect. The health-care-fraud statute,
18 U.S.C. § 1347, was enacted on August 21, 1996, but the
indictment alleged in count 1 that the conspiracy began in or
before January 1996. Boyd argues that if his conspiracy
conviction was based on conduct occurring before the effective
date of the health-care fraud statute, then his conviction
violates the Ex Post Facto Clause, U.S. CONST. art. I, § 9, cl. 3.
As we stated above, we review for plain error. Assuming
without deciding that the district court should have given a jury
instruction regarding the effective date of the statute, Boyd
must also demonstrate that his substantial rights were
affected——i.e., he must show a reasonable probability that absent
the error he would have been acquitted of the conspiracy charge.
See Olano, 507 U.S. 725, 735.
Boyd has failed to show any affect on his substantial rights
for two reasons. First, since conspiracy is a continuing
offense, the jury could still have convicted Boyd of conspiracy
to commit health-care fraud if it found that the conspiracy
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continued after the effective date of the health-care-fraud
statute. See Garcia Abrego, 141 F.3d at 167. Boyd has not
demonstrated that the conspiracy ended before the health-care-
fraud statute was enacted.
And second, the special verdict form demonstrates that the
jury would have convicted Boyd of conspiracy even had the court
given an instruction as to the effective date of the statute.
The jury reported on a special verdict form that it unanimously
found that Boyd had conspired to commit all three alleged
purposes of the conspiracy (health-care fraud, money laundering,
and payment of illegal remunerations). The jury’s finding as to
any one of the three purposes is sufficient to support a
conviction on count 1. See, e.g., United States v. Calle, 120
F.3d 43, 45 (5th Cir. 1997) (“[A] general guilty verdict on a
multiple-object conspiracy may stand even if the evidence is
insufficient to sustain a conviction on one of the charged
objects.” (citing Griffin v. United States, 502 U.S. 46, 60
(1991))). Since the jury found that Boyd also conspired to
launder money and to pay illegal remunerations, the outcome at
trial would have been the same absent the alleged error.
IV. CONSTRUCTIVE AMENDMENT
Jackson asserts that the jury instructions constructively
amended the indictment because they permitted the jury to convict
him of conspiracy to commit health-care fraud on the basis of a
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scheme to defraud Medicare and Medicaid of the intangible right
of honest services, when the indictment charged only a scheme to
defraud Medicare and Medicaid of money and property. Concluding
that the error did not affect Jackson’s substantial rights, we
reject Jackson’s argument that the error was reversible.
A. Standard of Review
As Jackson acknowledges, our review is for plain error
because Jackson did not properly object to the jury instructions
below. See United States v. Bieganowski, 313 F.3d 264, 287 (5th
Cir. 2002) (citing United States v. Delgado, 256 F.3d 264, 278
(5th Cir. 2001)).
B. Discussion
“[T]he Fifth Amendment guarantees a criminal defendant that
he will only be tried on the charges that have been alleged in an
indictment handed down by a grand jury” and that the indictment
will not “be broadened or altered except by the grand jury.”
United States v. Griffin, 324 F.3d 330, 355 (5th Cir. 2003)
(internal quotation marks omitted) (quoting United States v.
Arlen, 947 F.2d 139, 144 (5th Cir. 1991)). A constructive
amendment of the indictment, in violation of these guarantees,
“occurs when the trial court[,] through its instructions and
facts it permits in evidence, allows proof of an essential
element of a crime on an alternative basis permitted by the
statute but not charged in the indictment.” Id. (internal
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quotation marks omitted) (quoting Arlen, 947 F.2d at 144).
Jackson was charged in count 1 with conspiracy to defraud
the United States in violation of 18 U.S.C. § 371 by, inter alia,
conspiring to commit health-care fraud as defined in 18 U.S.C.
§ 1347.12 The indictment alleged that Jackson conspired to
commit health-care fraud by agreeing to execute a scheme to
fraudulently obtain money and property from Medicare and
Medicaid; the indictment did not allege that Jackson agreed to
execute a scheme to deprive the government of the intangible
right to honest services.
In the jury instructions relating to count 1, the district
court enumerated the elements of both conspiracy and health-care
fraud. The court instructed the jury that an element of health-
care fraud was a scheme or artifice to defraud a health-care
benefit program, but the instructions did not at this point
define “scheme to defraud.” Seven pages later, however, in the
portion of the instructions relating to the substantive health-
care-fraud counts, the instructions defined “scheme to defraud”
as including “any scheme to deprive another of money, property,
or of the intangible right to honest services by means of false
12
Count 1 also charged that Jackson violated § 371 by
conspiring to commit money laundering and to pay illegal
kickbacks. On a special verdict form, the jury reported that it
unanimously agreed that Jackson conspired to commit health-care
fraud; only six of the twelve members agreed that Jackson
conspired to commit money laundering; and only one member found
that Jackson conspired to pay illegal kickbacks.
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or fraudulent pretenses, representations, or promises.” 1 R. 215(emphasis added).
Jackson contends that the district court’s inclusion of
“intangible right to honest services” in the jury instructions’
definition of “scheme to defraud” constituted a constructive
amendment of the indictment since it was not charged in the
indictment. He argues that his conviction must be reversed
because the jury was permitted to convict him of conspiracy on a
basis not charged in the indictment.
The government conceded at oral argument that “intangible
right to honest services” should not have been included in the
jury instructions. But the government contests Jackson’s
position that the conviction should be reversed, arguing that
Jackson has not demonstrated that the error affected his
substantial rights.
Jackson argues that his substantial rights were affected
because the jury could have found that he engaged in a scheme to
deprive Medicare and Medicaid of the intangible right to honest
services.13 But under the third prong of plain-error review, it
is Jackson’s burden to demonstrate a substantial probability that
absent the error the outcome at trial would have been different.
Hence, it is not enough that the jury could have convicted
13
Although Jackson’s services were provided directly to the
patients, the jury could have found that they were provided
indirectly to the Medicare and Medicaid programs since these
programs were paying for the patients’ treatment.
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Jackson based on the “honest services” language; Jackson must
also demonstrate a reasonable possibility that the jury would
have acquitted him had only the “money and property” language
been included in the instructions. Jackson has failed in this
regard. The government’s theory was that Jackson engaged in a
scheme to defraud Medicare and Medicaid through false billing.
Jackson has not articulated any rational basis on which the
jury——once it accepted the government’s theory, as it ostensibly
did——could have found that the purpose of the scheme was to
deprive Medicare and Medicaid of the right to honest services and
not also to deprive them of money and property.
United States v. Griffin, on which Jackson relies heavily,
is distinguishable. The panel in that case, reviewing for plain
error, vacated the defendants’ mail-fraud convictions because of
a constructive amendment of the indictment. Griffin, 324 F.3d at
355-56. As in this case, the jury instructions in Griffin
defined “scheme or artifice to defraud” as including a scheme “to
deprive another of the intangible right to honest services,” even
though the indictment charged only a scheme to obtain money and
property. Id. at 353. The difference between Griffin and this
case is that in Griffin the object of the scheme was to obtain
unissued tax credits, which the panel held was not money or
property as those terms were used in the mail-fraud statute. See
id. at 352-55. The only possible basis for the convictions was
therefore under the “honest services” language, which did not
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appear in the indictment. Unlike in Griffin, the evidence in
this case of Jackson’s involvement in a scheme to fraudulently
bill Medicare and Medicaid supports a conviction under the “money
and property” language that was charged in the indictment.
Jackson’s reliance on United States v. Adams is also
misplaced since the standard of review in that case was not for
plain error as it is here. See 778 F.2d 1117, 1120 (5th Cir.
1985) (noting that the defendant objected below). This
distinction is crucial because when there is a constructive
amendment that was properly objected to before the trial court,
the conviction must be vacated regardless of any showing of
prejudice. Griffin, 324 F.3d at 355 (quoting United States v.
Mikolajczyk, 137 F.3d 237, 243 (5th Cir. 1998)). But where, as
here, the defendant fails to raise the error below, the defendant
carries the heavy burden of demonstrating that the error affected
his substantial rights. See id. at 355-56; Olano, 507 U.S. at
734.
Instead, this case is most analogous to United States v.
Dixon, 273 F.3d 636 (5th Cir. 2001). In Dixon, the defendant was
charged with kidnapping for the purpose of committing aggravated
sexual abuse. Id. at 637. But the trial judge instructed the
jury that to convict it needed to find that the defendant held
the victim for “some benefit,” which could have included either
sexual gratification or financial gain, even though financial
gain was not charged in the indictment. Id. at 638-39. The jury
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convicted the defendant of kidnapping. Id. at 638. Reviewing
the jury instructions for plain error, the Dixon panel concluded
that the defendant had not demonstrated any effect on his
substantial rights. Id. at 640. The panel recalled evidence of
the victim’s sexual activity during the kidnapping and reasoned
that the jury must have found that the defendant had sexually
assaulted the victim. Id. Given the “overwhelming evidence that
the ‘benefit’ [the] defendant derived from the kidnapping was
aggravated sexual abuse, as specifically charged in the
indictment,” the panel affirmed the conviction. Id.Based on the evidence in this case, the jury could not have
convicted Jackson based on the “honest services” language without
also finding that the purpose of the scheme was to deprive
Medicare and Medicaid of money and property. Consequently, we
conclude that the inclusion of “intangible right to honest
services” in the jury instructions did not affect Jackson’s
substantial rights, and we decline to reverse his conspiracy
conviction on this basis.
V. INTERFERENCE WITH A WITNESS
Jackson asserts that the government substantially interfered
with its own witness Kim Boutte’s right to testify, violating
Jackson’s constitutional right to present a defense. We disagree
that the government’s conduct affected Jackson’s rights.
The government subpoenaed Boutte, who had been a secretary
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at Houston Rehab and who had not worked with Jackson, to testify
at trial. Boutte moved to quash the subpoena, asserting her
Fifth Amendment privilege against self-incrimination. At a
hearing, Boutte alleged that a statement she had given the
government implicating four defendants was partially false and
that she had produced the statement only in response to pressure
from the government. She also averred that when she brought this
to the attention of a government lawyer, the lawyer threatened
her. Moreover, she told the court that there was not any
testimony she could give at trial that would not tend to
incriminate her. The court gave defense counsel an opportunity
to question Boutte, but Jackson’s counsel declined. The court
then granted Boutte’s motion and released her.
Jackson argues for the first time on appeal that Boutte’s
testimony would have benefitted him and that the government’s
interference thus violated his right to present a defense.
Because Jackson did not preserve his arguments below, we review
for plain error, even though Jackson’s arguments pertain to
alleged constitutional violations. See United States v. Knowles,
29 F.3d 947, 951 (5th Cir. 1994) (“[A]lleged constitutional
errors in criminal convictions——that do not amount to plain
error——are forever forfeited by the failure to object
contemporaneously to that error in the district court.”).
“The Sixth Amendment guarantees a criminal defendant the
right to present witnesses to ‘establish his defense without fear
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of retaliation against the witness by the government.’”
Bieganowski, 313 F.3d at 291 (quoting United States v. Dupre, 117
F.3d 810, 823 (5th Cir. 1997)). “In addition, the Fifth
Amendment protects the defendant from improper governmental
interference with his defense. Thus, ‘substantial governmental
interference with a defense witness’[s] choice to testify may
violate the due process rights of the defendant.’” Id. (quoting
Dupre, 117 F.3d at 823).
Jackson contends that the government’s interference with
Boutte’s free and unhampered choice to testify violated his Fifth
and Sixth Amendment rights to present a defense. He asserts that
Boutte’s testimony would have been exculpatory to at least some
defendants and that any exculpatory evidence would have had some
impact on the government’s case against him on the conspiracy
count.
But Jackson has not demonstrated that the government
interfered with his ability to present his own defense because
Boutte was a government witness, not Jackson’s witness. Jackson
acknowledges this problem and attempts to overcome it by arguing
that Boutte was a de facto defense witness. He asserts that we
may assume Boutte’s trial testimony would not have benefitted the
government since it would have been contrary to her previous
statement implicating certain defendants. But even accepting
this assumption arguendo, Jackson has not alleged that he would
have called Boutte to testify for him absent the government’s
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interference, nor has he made any specific showing of prejudice
beyond his conclusory allegation that Boutte’s testimony would
somehow have hurt the government’s case generally. Jackson has
thus failed to demonstrate plain error that affected his
substantial rights.
VI. SENTENCING ISSUES
A. Boyd’s Sentence
Because we reverse Boyd’s conviction on count 44, we also
vacate his sentence and remand for resentencing. We nonetheless
address here Boyd’s arguments about alleged sentencing error.
1. Booker Error
Relying on Apprendi v. New Jersey, 530 U.S. 466 (2000),
Blakely v. Washington, 542 U.S. 296 (2004), and United States v.
Booker, 543 U.S. 220 (2005), Boyd contends that the district
court erred by enhancing his sentence based on facts not found by
the jury beyond a reasonable doubt. He argues that the district
court should have granted his motion for a new trial to give the
jury an opportunity to make factual findings for sentencing.
Booker error occurs when the sentencing judge bound by
mandatory United States Sentencing Guidelines (“Guidelines” or
“U.S.S.G.”) increases the Guidelines sentencing range based on
facts not found by the jury or admitted by the defendant. United
States v. Mares, 402 F.3d 511, 518 (5th Cir.), cert. denied, 126
S. Ct. 43 (2005). But under Booker, “with the mandatory use of
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the Guidelines excised, . . . [t]he sentencing judge is entitled
to find by a preponderance of the evidence all the facts relevant
to the determination of a Guideline[s] sentencing range.” Id. at
519. Boyd was sentenced under the post-Booker advisory
Guidelines system, and the record indicates that the district
judge was aware of the Guidelines’ advisory nature. There was
therefore no Booker error in Boyd’s sentencing.
2. Mass-Marketing Enhancement
Boyd also contends that the district court’s application of
a two-level enhancement under U.S.S.G. § 2B1.1(b)(2)(A)(ii) for
the use of mass marketing was improper.
Since Boyd objected to the enhancement below, we review the
district court’s factual findings for clear error and its
interpretation and application of the Guidelines de novo. United
States v. Angeles-Mendoza, 407 F.3d 742, 746-47 (5th Cir. 2005).
“A factual finding is not clearly erroneous as long as it is
plausible in light of the record as a whole.” United States v.
Holmes, 406 F.3d 337, 363 (5th Cir.) (quoting United States v.
Powers, 168 F.3d 741, 752 (5th Cir. 1999)), cert. denied, 126 S.
Ct. 375 (2005).
U.S.S.G. § 2B1.1(b)(2)(A)(ii) provides for a two-level
enhancement if the offense was committed through mass marketing.
The commentary to the Guidelines defines “mass marketing” as “a
plan, program, promotion, or campaign that is conducted through
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solicitation by telephone, mail, the Internet, or other means to
induce a large number of persons to (i) purchase goods or
services; (ii) participate in a contest or sweepstakes; or (iii)
invest for financial profit.” U.S.S.G. § 2B1.1 cmt. n.4(A).
Boyd argues here, as he did below, that the mass-marketing
enhancement encompasses only techniques of modern mass
communication, such as billboards, radio, television, the
Internet, newspaper, and bulk mail. He posits that the
application of the enhancement in this case was improper because
the marketing primarily involved personal, face-to-face
recruiting of patients, not channels of mass communication.
But the definition of “mass marketing” is not limited to the
mass-communication channels listed in the commentary. Instead,
the commentary “explicitly contemplates ‘other means’ of mass-
marketing.” United States v. Magnuson, 307 F.3d 333, 335 (5th
Cir. 2002) (per curiam). Section 2B1.1(b)(2)(A)(ii) “merely
requires advertising that reaches ‘a large number of persons.’”
Id. (quoting United States v. Pirello, 255 F.3d 728, 731 (9th
Cir. 2001)).
Based on the following evidence, we discern no clear error
in the district court’s implicit finding that the face-to-face
marketing in this case was intended to reach a large number of
persons. First, as part of his consulting services to Quality,
Boyd taught Reece and Broussard how to use marketers to find
elderly patients, and Boyd suggested areas where such patients
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could be found, such as adult day-care centers and elderly
communities. Second, Gordon testified that Boyd paid her for
recruiting up to 20 patients to Phycare. And third, part of
Houston Rehab’s business involved recruiting patients to the
clinic, and the clinic had at least one person recruiting full
time. Furthermore, Boyd does not dispute that the marketing
methods were intended to reach and did in fact reach a large
number of persons.
Accordingly, we conclude that the district court did not err
in applying a two-level enhancement for the use of mass
marketing.
B. Jackson’s Sentence
The district court calculated Jackson’s Guidelines base
offense level at 24 and imposed a 3-level enhancement for his
managerial role in the offense and a 2-level enhancement for
violating a position of trust, resulting in a total offense level
of 29. Factoring in Jackson’s Category III criminal history, the
court arrived at a Guidelines range of 108 to 135 months’
imprisonment. But the court sentenced Jackson to 60 months’
imprisonment, the statutory maximum for a conspiracy conviction
under 18 U.S.C. § 371.
Jackson maintains that his sentence should be vacated
because of Booker error. Since he failed to properly object
below, we review Jackson’s sentence for plain error. See Mares,
-31-
402 F.3d at 520. As the government concedes, Jackson satisfies
the first two prongs of plain-error review: there was error
because he was sentenced under a mandatory scheme, and the error
is plain under Booker. See id. at 520-21. The question
therefore is whether Jackson has demonstrated that his
substantial rights were affected. To make such a showing,
Jackson must demonstrate that under an advisory system, the
district court would have imposed a significantly different
sentence, i.e., a sentence of less than 60 months’ imprisonment.
See id. at 521.
Jackson first argues that the Booker error affected his
substantial rights because the district judge’s own factual
findings caused his Guidelines range to be increased from 2-8
months to 108-135 months. But Booker error does not occur simply
because the district judge enhances a sentence based upon her own
factual findings; rather, Booker error occurs “when the
sentencing judge bound by mandatory Guidelines increase[s] the
sentencing range under the Guidelines based on facts not found by
the jury or admitted by the defendant.” Id. at 518 (emphasis
added). Hence, it is not enough that Jackson has demonstrated
that the district judge’s own factual findings resulted in a
higher sentence; he must also demonstrate a sufficient
probability——sufficient enough to undermine confidence in the
outcome——that his sentence would have been lower under an
advisory, rather than mandatory, system. See id. at 521.
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Jackson next argues that the district court would have
imposed a lesser sentence under an advisory scheme. Jackson
points to the district judge’s remarks during the sentencing
proceeding wherein she stated that she lacked any discretion over
the sentence to be imposed. Jackson also notes that the district
court imposed the lowest possible sentence under the mandatory
scheme. After reviewing the transcript of the sentencing
proceedings, however, we are not persuaded that the district
judge would have imposed a sentence below 60 months’ imprisonment
under an advisory Guidelines system. The district judge’s
comment that she lacked discretion with regard to Jackson’s
sentence referred simply to the fact that there was no range of
possible sentences from which she could select since the low end
of the Guidelines range (108 months) exceeded the 60-month
statutory maximum. Furthermore, Jackson has not even attempted
to demonstrate that a sentence of less than 60 months, which
would have varied from the 108-month Guidelines minimum by more
than 48 months, would have been reasonable.14
14
Jackson also makes the following arguments solely to
preserve them: (1) that application of the plain-error standard
is inappropriate in this case because it would have been futile
for him to object to the mandatory nature of the Guidelines prior
to Blakely; (2) that under Bouie v. City of Columbia, 378 U.S.
347 (1964), and Marks v. United States, 430 U.S. 188, 196-97 &
n.13 (1977), and their progeny, due process forbids the
retroactive application of Booker’s remedial holding to him; (3)
that Mares misapplies the plain-error standard of United States
v. Dominguez Benitez, 542 U.S. 74 (2004); and (4) that he is not
required to show prejudice because the error was structural since
it affected the entire framework of the sentencing proceedings in
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VII. CONCLUSION
For the foregoing reasons, Jackson’s convictions and
sentence are AFFIRMED; Boyd’s convictions on counts 1
(conspiracy) and counts 9 and 10 (illegal remunerations) are
AFFIRMED; Boyd’s conviction on count 44 (health-care fraud) is
REVERSED; and Boyd’s sentence is VACATED and the case REMANDED
for resentencing.
this case. As Jackson recognizes, these arguments are foreclosed
by this court’s precedents.
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