U.S. v. Wexler

Citation522 F.3d 194
Decision Date03 April 2008
Docket NumberDocket No. 06-1571-cr.
PartiesUNITED STATES of America, Appellee, v. David E. WEXLER, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Diarmuid White (Brendan White, on the brief), White & White, New York, NY, for Defendant-Appellant.

Jonathan Kolodner, Assistant United States Attorney, (Michael Garcia, United States Attorney for the Southern District of New York), New York, NY, for Appellee.

Before: MINER and RAGGI, Circuit Judges, and RAKOFF, District Judge.*

Judge RAGGI dissents in part in a separate opinion.

MINER, Circuit Judge:

Defendant-appellant David Wexler appeals from a judgment of conviction and sentence entered in the United States District Court for the Southern District of New York (Preska, J.) convicting Wexler, after a jury trial, of all seventeen counts of an indictment charging various offenses involving the distribution of controlled substances and health care fraud related to Wexler's medical practice. During the course of the proceedings, the District Court (1) found that out of court statements made by a now-deceased drug addict were admissible as statements against penal interest; (2) received expert testimony regarding the scope of the medical practice of dermatologists and declined to instruct the jury as to a "good intentions" component of the good faith defense applicable to a physician's distribution of controlled substances; and (3) denied Wexler's motion, grounded in the lack of sufficient evidence, for an acquittal on the charge that Wexler was a co-conspirator in a controlled substance distribution that resulted in death. On appeal, Wexler challenges each of these rulings. For the reasons that follow, we affirm the judgment of the District Court in part, reverse in part, and remand for resentencing.

BACKGROUND
I. The Judgment of Conviction and Sentence

The judgment of conviction and sentence was entered on March 17, 2006. Wexler was convicted, after a 7-day jury trial, of: conspiracy to distribute, and possession with intent to distribute, Dilaudid, Percocet, Vicodin, and Xanax, in violation of 21 U.S.C. § 846, and conspiracy to distribute Dilaudid resulting in death, in violation of §§ 812 and 841(a)(1) and (b)(1)(C) ("Count One"); unlawful distribution and possession with intent to distribute Dilaudid, in violation of 21 U.S.C. §§ 812 and 841(a)(1) and (b)(1)(C) (Counts "Two," "Four," and "Eight"); unlawful distribution and possession with intent to distribute Dilaudid resulting in death in violation of 21 U.S.C. §§ 812 and 841(a)(1) and (b)(1)(C) ("Count Nine"); unlawful distribution and possession with intent to distribute Xanax, in violation of 21 U.S.C. §§ 812 and 841(a)(1) and (b)(2) ("Count Three"); unlawful distribution and possession with intent to distribute Vicodin, in violation of 21 U.S.C. §§ 812 and 841(a)(1) and (b)(2) (Counts "Five" and "Six"); unlawful distribution and possession with intent to distribute Percocet, in violation of 21 U.S.C. §§ 812 and 841(a)(1) and (b)(2) ("Count Seven"); conspiracy to commit health care fraud and to make false statements on documents submitted to health care benefit plans and insurance companies, in violation of 18 U.S.C. § 371 (Counts "Ten" and "Twelve"); and health care fraud, in violation of 18 U.S.C. § 1347 (Counts "Eleven" and Thirteen through Seventeen). The jury also answered affirmatively that the narcotics conspiracy charged in Count One resulted in the death of Barry Abler, but the jury found that the substantive distribution of narcotics charged in Count Nine did not result in the death of Barry Abler. The District Court sentenced Wexler on March 16, 2006. The sentence included the following terms of imprisonment: twenty years on Counts One, Two, Four, Seven, Eight and Nine; three years on Count Three; five years on Counts Five, Six, Ten and Twelve; and ten years on Counts Eleven and Thirteen through Seventeen, all terms of imprisonment to run concurrently. The sentence also provided for terms of supervised release as follows five years on Count One; three years on Counts Two Four, Seven, Eight, and Nine; and three years on Counts Three, Five, Six and Ten through Seventeen, all terms of supervised release to run concurrently. In addition, the judgment requires restitution to Medicare and various insurers in the total sum of $887,804.00 and imposes a mandatory special assessment of $1,700. Wexler currently is serving his sentence of imprisonment.

II. The Case for the Government

The evidence at trial established that Wexler, a dermatologist in Manhattan, committed health care fraud by submitting false and inflated bills to insurance companies for medical procedures that he did not perform. Wexler prescribed to addicted patients numerous painkillers that were not medically necessary and he submitted fraudulent claims to those patients' insurance companies or providers. Wexler also provided numerous prescriptions for painkillers to Barry Abler, who resold some of the prescriptions. Abler later died of an overdose of Dilaudid.

The evidence at trial included: (i) the testimony of Steven Kravitz and Andrew Wist, two of Wexler's patients who were introduced to Wexler by Abler, who were themselves addicts who receive prescriptions from Wexler that were not medically necessary and whose insurance companies were billed by Wexler for medical procedures that Wexler never performed; (ii) the testimony of Marty Laufer, who bought prescriptions from Abler that were written by Wexler, although Wexler never saw Laufer as a patient; (iii) the testimony of Janet Levine, who, unrelated to Abler, obtained unlawful prescriptions for various painkillers from Wexler and whose insurance companies were charged by Wexler for medical procedures that Wexler did not perform; and (iv) the testimony of Joseph Nash and Stanley Gerbin, both of whom were Wexler's patients whose insurance companies were charged for medical procedures that Wexler did not perform.

The government also called two expert witnesses — Dr. Robert Auerbach, a dermatologist who testified about the general standard of care provided by dermatologists and about certain procedures performed by dermatologists, and Dr. Michael Gelb, a dentist specializing in temporomandibular and orofacial pain disorders, regarding the management of pain, the addictiveness of certain medications, and the treatment of temporomandibular joint syndrome ("TMJ"). Dr. Auerbach also testified that the records maintained by Wexler were so incomplete that they were "not really medical charts" and, in regard to one particular patient, he testified that the records did not support the 1,200 skin excisions billed by Wexler because "[p]eople don't have that much skin to spare." The evidence also included the testimony of Investigator Richard Springer of the Drug Enforcement Administration, who interviewed Wexler on Several Occasions.

A. Wexler's Criminal Conduct Involving Barry Abler

In 1992, Wexler began submitting bills to Medicare for treatments he purportedly performed on Barry Abler. As early as April 1992, Wexler submitted bills to Medicare for various dermatological procedures involving the benign excision of a piece of skin between three and four centimeters in length and one-and-a-half centimeters in width. At the same time, Wexler wrote various prescriptions to Abler for certain painkillers, including Dilaudid, Percocet, and Vicodin, which are controlled substances, in addition to Carisprodol, commonly known as "Soma," which is not controlled. Abler allowed Wexler to fraudulently bill Medicare for various medical procedures that Wexler did not perform and Wexler, in turn, wrote prescriptions for any drugs Abler wanted.

From 1992 until Abler's death in May 2001, Wexler submitted false bills to Medicare for approximately 1,941 different skin excisions, for which Wexler received approximately $425,000. Abler, in turn, received hundreds of prescriptions for various painkillers, to which he was addicted. Abler complained to his friends that he suffered from TMJ, but there was no evidence that Wexler had examined or treated Abler for TMJ. Wexler also paid Abler between $700 and $750 monthly, and when Abler complained that this was, not sufficient, Wexler offered to write prescriptions for Abler to sell on the street to make extra money.

Abler introduced Kravitz to Wexler. Abler told Kravitz, who became addicted to painkillers after suffering a broken leg, that he could get as many prescriptions for painkillers as he wished from Wexler. In 1995, Kraviz went to visit Wexler for the first time, at which time Wexler gave Kravitz a quick examination, although Wexler did not examine Kravitz's leg, and gave Kravitz prescriptions for Percocet and Valium.

After his first visit to Wexler in 1995, Kravitz received monthly prescriptions from Wexler through Abler, but Kravitz rarely visited Wexler himself. Kravitz purchased these prescriptions from Abler, paying in cash, meals, clothing, and other gifts. The prescriptions were in Kravitz's name and were written by Wexler for such drugs as Percocet, Vicodin, Valium, and Soma. Wexler submitted several thousand dollars of claims to Kravitz's insurance companies for procedures Wexler did not perform.

Abler also introduced Wist to Wexler. Wist became addicted to painkillers after a fall and subsequent back surgery. Wist met Abler in 1999 in a store near Abler's apartment. Abler offered to sell Vicodin to Wist and Wist accepted the offer. Thereafter Wist purchased three prescriptions from Abler that were written by Wexler, although Wexler had never met Wist. Thirty days after buying his last prescription from Abler, Wist went to see Wexler. Wist identified himself as a friend of Abler and told Wexler about his back pain. Wexler wrote various prescriptions for Wexler without examining him. Wexler billed Wist's insurance company for approximately $4,000 for procedures Wexler...

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