430 F.3d 681 (4th Cir. 2005), 03-4207, United States v. Alerre

Docket Nº:03-4207, 03-4212, 04-4161.
Citation:430 F.3d 681
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Ricardo U. ALERRE, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Deborah Bordeaux, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Michael D. Jackson, Defendant-Appellant.
Case Date:December 01, 2005
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 681

430 F.3d 681 (4th Cir. 2005)

UNITED STATES of America, Plaintiff-Appellee,

v.

Ricardo U. ALERRE, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.

Deborah Bordeaux, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.

Michael D. Jackson, Defendant-Appellant.

Nos. 03-4207, 03-4212, 04-4161.

United States Court of Appeals, Fourth Circuit.

December 1, 2005

Argued Sept. 20, 2005.

Appeals from the United States District Court for the District of South Carolina, at Florence, C. Weston Houck, Senior District Judge, CR-02-673

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[Copyrighted Material Omitted]

COUNSEL

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ARGUED:

Eli D. Stutsman, Portland, Oregon, for Appellants.

Thomas Ernest Booth, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

ON BRIEF: G. Wells Dick-son, Jr., Charleston, South Carolina, for Appellant

Deborah Bordeaux; Lionel S. Lofton, Charleston, South Carolina, for Appellant

Ricardo U. Alerre; David Bruce Betts, Columbia, South Carolina, for Appellant

Michael D. Jackson. Jonathan S. Gasser, Acting United States Attorney, William E. Day, II, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, for Appellee.

Before MICHAEL, MOTZ, and KING, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published opinion. Judge KING wrote the opinion, in which Judge MICHAEL and Judge MOTZ joined.

OPINION

KING, Circuit Judge:

Appellants Ricardo U. Alerre, Deborah S. Bordeaux, and Michael D. Jackson (the "defendants") challenge the various convictions and sentences imposed on them in the District of South Carolina. The defendants — medical doctors — seek a new trial on drug distribution, drug conspiracy, and money-laundering conspiracy charges levied

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against them by the grand jury. The multiple charges in their indictment arise from an alleged prescription-selling operation and a health-care-fraud scheme carried out during a four-year period in the Myrtle Beach area of South Carolina. The defendants contend on appeal that, in their 2003 trial, their lawyers were constitutionally ineffective and the prosecutors engaged in prejudicial misconduct. They also maintain that the trial evidence was insufficient to support their money-laundering conspiracy convictions. Finally, the defendants challenge their sentences on the basis of the Supreme Court's recent decision in United States v. Booker, and the prosecutors have confessed error on that point. As explained below, we affirm the defendants' convictions, vacate their sentences, and remand for resentencing.

I.

The Government prosecuted the defendants — who were medical doctors licensed in South Carolina and registered with the Drug Enforcement Administration (the "DEA") — for their involvement with the Comprehensive Care and Pain Management Center ("CCPMC"), in Myrtle Beach. During the relevant period (1997 to 2001), CCPMC was owned and operated by Dr. David Woodward. On August 29, 2002, the grand jury charged the defendants, along with Woodward and four others, in a ninety-three count indictment. J.A. 83-110.1 The defendants were each charged with conspiracy to distribute controlled substances, in contravention of 21 U.S.C. § 846 (the "drug conspiracy charge") (Count 1); conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h) (the "laundering conspiracy charge") (Count 93); and multiple counts of distributing controlled substances, in violation of 21 U.S.C. § 841(a)(1) (the "distribution charges"). More specifically, of the forty-two distribution charges in the indictment, Dr. Jackson was charged with five counts of distributing OxyContin, Oxy IR, and Percocet (Counts 9 through 13); Dr. Bordeaux with four counts of distributing OxyContin and Oxy IR (Counts 30 through 33); and Dr. Alerre with eight counts of distributing OxyContin (Counts 34 through 41).2

A.

The defendants' jury trial was conducted in Florence, South Carolina, from January 27 to February 10, 2003. The jury heard the testimony of fifty-four witnesses, thirty of whom were called by the Government. The most important prosecution witness was Dr. Woodward, who had earlier pleaded guilty under a plea agreement and was cooperating with the United States Attorney.

According to Dr. Woodward's testimony, CCPMC was simply a front for an illegal prescription-selling operation and a health-care-fraud scheme. Woodward explained how he had developed a plan to conceal CCPMC's illegal activities from the law enforcement and medical authorities. In carrying out his activities, he had directed CCPMC physicians to conduct superficial physical examinations of CCPMC patients

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that served no medical purpose and were intended only to make the issuance of prescriptions look like the practice of medicine. Tr. 790.3 In so doing, Dr. Woodward developed a medical record template with boilerplate diagnoses that could be loaded into patients' charts and used to deceive insurance companies and investigators. Tr. 792. Patients were given various diagnostic tests to justify insurance billings, and CCPMC physicians systematically requested outside radiologists to "over read" magnetic resonance imaging pictures in order to justify specific prescriptions. Tr. 798-99. If a patient was insured, the CCPMC doctors would order additional unnecessary tests and scans. Tr. 799.4 The revenue from such tests and scans constituted about half of CCPMC's income, with the other half being derived from the superficial patient examinations and the issuance of illegitimate prescriptions. Id.

In his testimony, Dr. Woodward acknowledged that fifteen to twenty percent of CCPMC's patients had legitimate medical problems, but asserted that all patients were "treated the same" — i.e., "[t]hey all received the narcotic medication" — without regard to medical necessity. Tr. 887. The testimony of former CCPMC employees and patients corroborated Woodward's evidence.

Dr. Woodward hired Dr. Jackson in February 1998, and hired Dr. Bordeaux two years later, in February 2000. The evidence revealed that Bordeaux and Jackson, along with other CCPMC physicians, developed a practice known as "fast tracking," which they used to expedite the issuance of illegitimate prescriptions for controlled substances. Tr. 399-400. Under the fast-tracking practice, a CCPMC physician would enter an examination room where five or six patients waited, sign prescriptions for each, and promptly exit without asking any medical questions or performing any medical examinations. Id.

After Drs. Bordeaux and Jackson left CCPMC in the summer of 2000, Dr. Woodward hired Dr. Alerre. According to Woodward, he needed Alerre to "shadow" him and issue prescriptions because Woodward's license to prescribe controlled substances had been suspended by the DEA. Tr. 818. Woodward further testified that Alerre understood his role before he accepted a position with CCPMC. Id. When Alerre began his work at CCPMC, he would accompany Woodward while superficial patient examinations were conducted. Tr. 819. At the conclusion of such examinations, Alerre would issue illegitimate prescriptions to the patients. Tr. 820.

Donald Shafer, a former CCPMC patient, testified that, on his first visit to CCPMC, Drs. Alerre and Woodward took him to an examination room, searched him to determine if he was wired, and asked if he was working as an undercover agent. J.A. 581-82. Once satisfied that Shafer was not working for the authorities, Woodward and Alerre asked Shafer if he wanted a prescription for OxyContin or a drug called Lorcet. J.A. 584.

Importantly, Dr. Woodward also testified that he confronted each defendant and inquired whether they understood the illicit nature of CCPMC's activities. The defendants

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assured Woodward that they were willing to participate in CCPMC's overall scheme. Woodward approached Dr. Jackson, asked if he was "able to do this," and Jackson assured him "I got your back." Tr. 792. In answering a similar inquiry, Dr. Bordeaux replied "if I go along with this and do this, can I have your father's pickup truck?" Tr. 815. When Woodward asked Dr. Alerre if he was comfortable with "what we were doing," Alerre paused and responded "[o]h, to hell with it." Tr. 823. Woodward understood Alerre's response to confirm that Alerre was "part of our team"; that is, Alerre was agreeing to join in Woodward's illicit operations. Id.

B.

The prosecution's expert witness, Dr. Arthur Jordan, testified that the defendants systematically wrote prescriptions that "were not issued for a legitimate medical purpose." J.A. 819. Based on his review of eighty-eight randomly selected patient charts, Jordan opined that the defendants had failed to adhere to generally accepted medical standards. See J.A. 757, 789-813. Specifically, Jordan testified that many of the prescriptions lacked appropriate documentation or had no "follow up" treatment, that the defendants ignored "red flags" indicative of drug abuse, and that certain prescriptions and dosages were inappropriate. See J.A. 789-813.

Dr. Jordan then testified that the defendants had issued prescriptions that were "totally away from and inconsistent with the dosages that a prudent physician in the state of South Carolina would give, as what we call the standard of care." J.A. 815. When the court, sua sponte, expressed concern that such evidence might be improper, a defense lawyer stated that he was waiting for Jordan to finish his answer. J.A. 816. The court then observed there was "no reason to put something in the record which the jury may [consider] . . . that is not the standard." Id. The court concluded, in the presence of the jury, that "[w]hether the doctors are negligen[t] or not, whether they were guilty of malpractice, is not an issue in this case." Id.

The prosecution presented other evidence that the defendants' prescription...

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