U.S. v. Yielding

• Decision Date: 05 October 2011
• Docket Number: No. 10–1117.,10–1117.
• Citation: 657 F.3d 688,86 Fed. R. Evid. Serv. 973
• Parties: UNITED STATES of America, Appellee,v.Geff YIELDING, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

657 F.3d 688

86 Fed. R. Evid. Serv. 973

UNITED STATES of America, Appellee,

v.Geff YIELDING, Appellant.

No. 10–1117.

United States Court of Appeals, Eighth Circuit.

Submitted: March 15, 2011.Filed: Oct. 5, 2011.

Timothy Oliver Dudley, argued, Shelly H. Koehler, Samuel A. Perroni, on the brief, Little Rock, AR, for appellant.Laura G. Hoey, AUSA, argued, Little Rock, AR, for appellee.Before LOKEN and COLLOTON, Circuit Judges, and NELSON,¹ District Judge.

COLLOTON, Circuit Judge.

A jury found Geffrey A. Yielding guilty of two federal offenses: one count of aiding and abetting a violation of the so-called Medicare anti-kickback statute, in violation of 42 U.S.C. § 1320a–7b(b)(2) and 18 U.S.C. § 2, and one count of aiding and abetting the falsification of a document, in violation of 18 U.S.C. §§ 1519 and 2. The district court imposed concurrent sentences of 60 months' imprisonment for the anti-kickback conviction and 78 months' imprisonment for the document falsification conviction, to be followed by three years of supervised release. The court also ordered Yielding to pay $944,995.84 in restitution. We affirm Yielding's convictions, vacate the sentence due to procedural error, and remand for further proceedings.

I.

In approximately 1998, Yielding began to work as a surgical and administrative assistant for Dr. Richard Jordan, a neurosurgeon in North Little Rock, Arkansas. Dr. Jordan performed surgeries at several area hospitals, including Baptist Health Medical Center in North Little Rock (“Baptist”). Yielding was responsible for ensuring that the required equipment was present at all of Dr. Jordan's surgeries.

Jordan “Jody” Wall was a charge nurse at Baptist in 2003 and 2004. He was responsible for ordering medical supplies for Dr. Jordan's surgeries at that hospital. Yielding told Wall which supplies were needed for each scheduled surgery, and Wall ensured that the requested items were available. When Baptist did not have enough supplies on hand, Wall asked Denise Rhodes, the hospital's senior inventory coordinator, to order the needed items.

In 2002, Yielding's wife, Kelley Yielding, incorporated Advanced Neurophysiology, Inc. (“ANI”), a medical services company of which she was the sole shareholder. By 2003, Kelley had begun to work as an independent sales agent for two medical supply companies known as Orthofix and Osteotech. Orthofix sold external bone growth stimulators, which promote bone growth following surgery in patients who would otherwise have difficulty growing new bone. Osteotech sold bone allograft, which is substitute bone that is used to fill a void in a patient's bone after surgery or trauma.

Kelley Yielding marketed the two companies' products to surgeons, and received commissions on each sale. From February 2003 to October 2004, Kelley received approximately $384,000 in commissions from Osteotech and Orthofix that were attributable to purchases by Baptist. During the same period, ANI issued twenty-two checks to Wall totaling $54,366.08.

In November 2004, Baptist terminated Wall and Rhodes after an internal investigation revealed irregularities in the ordering of Osteotech bone and Orthofix bone growth stimulators. Baptist determined that Rhodes had placed purchasing orders for the Osteotech and Orthofix products without proper authorization, and that the hospital should not have purchased any Orthofix bone growth stimulators. Baptist also discovered that more than one hundred pieces of bone were missing from the hospital's inventory.

On December 27, 2004, Dr. Jordan forwarded to the Yieldings an e-mail he had received from a Baptist administrator. In the e-mail, the administrator characterized the purchases of the bone growth stimulators as “very suspicious,” and informed Dr. Jordan that the hospital was “continuing [its] investigation of this issue as well as the ... missing pieces of bone.”

Three days later, U.S. Bank issued a check to ANI for $34,018.90. This was the precise amount of ANI's total payments to Wall in 2004. The check listed the remitter as Jordan Wall, and the purpose of the payment as “REPAYMENT ON LOAN.” Bank records showed that on the same day, Yielding withdrew $21,018.90 from the Yieldings' personal bank account at U.S. Bank. A receipt and currency transaction report indicated that Yielding also paid the bank $13,000 in cash.

The Federal Bureau of Investigation opened an inquiry into the irregularities at Baptist in mid–2005. In an interview in October 2005, Wall told investigators that the Yieldings had given him a loan of “[m]aybe $10,000,” not the $34,018.90 paid by check in December 2004. On April 14, 2006, the FBI executed search warrants at the Yieldings' home and at Dr. Jordan's office. During the search of the Yielding residence, the agents discovered a promissory note describing an interest-free loan of $34,018.90 issued from ANI to Wall in January 2004. The note was marked as paid on December 30, 2004.

The agents also interviewed Kelley Yielding. She initially described the payments from ANI to Wall as a loan and denied that Wall had been employed by ANI. Yielding told the agents that he and his wife had given Wall a loan of approximately $30,000, that the loan had been documented, and that Wall had repaid the loan. After the agents confronted Yielding with bank records indicating that he used his own funds to purchase Wall's check to ANI, however, Yielding stated that Wall had convinced him to pay Wall approximately $3000 per month in exchange for Wall's promise to keep all of Kelley Yielding's supplies fully in stock. Yielding told the agents that Wall asked him to purchase a cashier's check to make it appear as if the payments to Wall had been a loan that Wall was paying back. On the same day, the FBI again interviewed Wall, who then admitted that he had received payments from the Yieldings in exchange for ordering Osteotech bone and Orthofix bone growth stimulators.

Kelley Yielding died on October 2, 2006. Wall entered a plea agreement with the government in 2008. On May 8, 2008, a grand jury indicted Yielding on forty-six counts of mail fraud, falsification of documents, and payment of kickbacks involving a federal health care program. A superseding indictment was filed on November 5, 2008, and a two-count second superseding indictment was returned on February 4, 2009.

At trial, the government presented testimony from FBI agents, Osteotech and Orthofix managers, and current and former Baptist employees. Wall testified that Yielding had approached him and had offered to pay him in exchange for ordering the products sold by Kelley Yielding. According to Wall, Yielding gave Wall lists of items to order, and Wall then asked Rhodes to obtain the listed supplies. Wall recalled that Yielding once told him to order some bone products so that Kelley would qualify for a free vacation. In return for Wall's efforts, Yielding gave him envelopes containing checks from ANI. Wall testified that Yielding told him to “keep it quiet,” and asked him in approximately December 2004 to sign and date a promissory note so that the note would appear to have been signed in January 2004. Wall said that Yielding also asked him to sign a cashier's check that would make the payments from ANI to Wall look like a loan.

The government also presented testimony concerning Yielding's past employment. Cary Hagan, the owner of a medical device distributorship named Medex, Inc., explained that his company employed Yielding for about two years in the mid–1990s. Hagan testified that he terminated Yielding after discovering that Yielding had misappropriated $4000—the amount of Yielding's regular monthly pay—from the distributorship's bank account while Hagan was out of town. Hagan's wife Julie Hagan, who worked as the distributorship's bookkeeper, confirmed this account and testified that she found a $4000 check from the distributorship to Yielding on which her husband's signature had been forged. In a similar vein, the government called as a witness Daniel Fry, a former assistant to Dr. Jordan, who testified that Yielding was in charge of processing payments at Dr. Jordan's office in the late 1990s. Fry discovered that roughly $28,000 in payments from insurance companies and patients were marked as received by Dr. Jordan's office, but had in fact been diverted from Dr. Jordan's accounts into a separate bank account listed under the names of Dr. Jordan and Yielding. Fry testified that Dr. Jordan was “upset” when informed of the missing funds, and that Yielding took a leave of absence following a meeting with Dr. Jordan about the irregularities.

The jury convicted Yielding on both charges. At sentencing, the district court calculated an advisory guideline range of 78 to 97 months' imprisonment. The court sentenced Yielding to 60 months' imprisonment on the first count of the indictment, and 78 months' imprisonment on the second count, to run concurrently, and to a three-year term of supervised release. The district court also ordered Yielding to pay $944,995.84 in restitution.

II.

Yielding first argues that the district court erred in admitting testimony concerning statements made by Kelley Yielding during her interview with the FBI on April 14, 2006. Over Yielding's objection, the district court permitted the following testimony from one of the FBI agents who interviewed Kelley:

Q: Did you ask Kelley Yielding about the monies that she, through ANI, had paid to Jody Wall?

A: We did.

Q: What did Ms. Yielding tell you about those payments?

A: She acknowledged the payments and she expressed to us that they were a loan provided to Mr. Wall....

Q: Okay. Did you ask her who made that loan?

A: I don't know if we asked her specifically, but it was—during the interview it was discussed as a “We gave him a loan,” leading us to believe it was her and her husband, Mr. Geffrey Yielding.

Q: Did you ask her whether Jody Wall had ever been employed by ANI?

A: We did.

Q: What was her...