U.S. v. Kaplan

Citation895 F.2d 618
Decision Date07 February 1990
Docket NumberNo. 84-1260,84-1260
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Steven L. KAPLAN, M.D., Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Robert W. Lueck, Las Vegas, Nev., for defendant-appellant.

Paul E. Wommer, Asst. U.S. Atty., Las Vegas, Nevada, for plaintiff-appellee.

Appeal from the United States District Court for the District of Nevada.

Before CANBY, and NORRIS, Circuit Judges, and WILSON 1, District Judge.

WILSON, District Judge:

This is an appeal from a final judgment of conviction in a criminal case. Appellant, a medical doctor, was convicted of mail fraud in a scheme aimed at defrauding an insurance company and of prescribing controlled substances for reasons other than legitimate medical purposes. A five year sentence of unsupervised probation was imposed on August 7, 1984. This court has jurisdiction pursuant to 28 U.S.C. Sec. 1291.

FACTS

Appellant, Steven L. Kaplan, was a physician duly licensed to practice medicine in the state of Nevada. This case arose from two independent investigations being conducted by state and federal law enforcement agencies into appellant's medical and controlled substance prescription practices. The Federal Bureau of Investigation's (FBI) investigation of appellant centered around allegations that he was involved in and engaging in schemes aimed at defrauding various insurance companies. The FBI's investigation also concerned itself with the controlled substance prescription practices of appellant. A separate investigation of appellant's prescription practices was also conducted during this same time period by the Investigative Division of the state of Nevada.

The two mail fraud counts (Counts 1-2) arose from the investigation by the FBI, as did the first seventeen controlled substance distribution counts (Counts 3-19). Each of these counts was the result of the appellant's dealings with FBI Special Agent Rick P. Baken, who was acting in an undercover capacity using the name "Jimmy Sollow." Baken originally approached appellant on May 3, 1983, for the purpose of developing evidence regarding allegations that appellant Counts 20 through 39, all of which charged appellant with separate counts of distributing a controlled substance by way of a prescription not issued in the usual course of professional practice and not for legitimate medical purpose, were based upon the investigation conducted by the Investigative Division for the state of Nevada. Counts 20 through 28 involved various controlled substances the appellant prescribed to David Buzzalini, a paid confidential operative utilizing the undercover name "David Charles."

was filing false insurance claims. Baken met with appellant eleven more times during the period of May 3 to June 8, 1983. On those occasions appellant prescribed numerous controlled substances even though no physical examinations were performed.

Counts 29 through 39 involved dealings appellant had with Robert Nepolitan, a paid informant utilizing the name "Steve Watkins." Nepolitan met with appellant at least twelve times between December 7, 1982, and April 19, 1983, for the purpose of obtaining prescriptions for controlled substances. In May 1983, Nepolitan voluntarily approached the Investigative Division and provided that agency with information concerning the appellant. Nepolitan agreed to assist in the investigation of appellant and subsequently met with appellant three additional times. On June 15, 1983, Nepolitan gave appellant a bag of what purportedly was marijuana (in reality, it was commercial brand tea) in exchange for some prescribed controlled substances. Following this exchange, appellant was arrested.

Appellant now appeals his conviction on five grounds: (1) insufficiency of the evidence as to counts 20-39; (2) the district court's refusal to sever the counts based on the state investigation from the counts based on the federal investigation; (3) the district court's denial of a motion to suppress for a warrantless search; (4) the district court's denial of a motion to suppress for a subsequent search; and (5) the district court's failure to give a jury instruction.

DISCUSSION
I. Sufficiency of the Evidence

A criminal conviction is supported by sufficient evidence if, "after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original); U.S. v. Whitworth, 856 F.2d 1268, 1286 (9th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 1541, 103 L.Ed.2d 846 (1989).

Counts 20-39 charged appellant with violating 21 U.S.C. Sec. 841(a)(1), which provides "[e]xcept as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally (1) to ... distribute ... a controlled substance." Doctors are liable for prosecution under this section "when their activities fall outside the usual course of professional practice." U.S. v. Moore, 423 U.S. 122, 124, 96 S.Ct. 335, 337, 46 L.Ed.2d 333 (1975).

The appellant argues that the evidence is insufficient to support his conviction on counts 20-39 because a defense witness, Dr. Wascher, testified that he also prescribed controlled substances for the undercover informants. Appellant contends that it is ironic that it "was apparently okay for Dr. Wascher to prescribe [controlled substances] for Mr. Buzzalini, but it was a criminal act for [appellant] to do the exact same thing." Appellant also points out that his expert witness, Ronald K. Siegal, a psychopharmacologist, stated that generally appellant's prescriptions were within acceptable limits of prescribing practices. Finally, appellant states that while he may have been naive or too casual, his acts were not criminal.

However, the prosecution also presented an expert witness, Dr. Alvin D. Blumberg, who outlined the normal procedure for treatment and diagnosis before prescribing any of the involved controlled substances. Dr. Blumberg indicated that a prescription for any of the involved controlled substances would not be legitimate without a physical examination. All three undercover informants testified that at no time did appellant conduct a physical exam of them, nor did he ask for their medical histories. Moreover, when Dr. Wascher prescribed controlled substances for Mr. Buzzalini, he, unlike appellant, did perform a physical exam and inquire into Buzzalini's medical history. Finally, Dr. Blumberg indicated that appellant's actions were outside the course of professional practice.

In addition to the testimony by Dr. Blumberg, the evidence at trial also demonstrated that the appellant had issued an inordinate number of prescriptions to the undercover agents. For example, appellant wrote nineteen prescriptions for controlled substances to Agent Baken in a month, and wrote twenty-one prescriptions to Agent Buzzalini during that same time period.

When the evidence is viewed in the light most favorable to the prosecution, there is little doubt that a rational trier of fact could have found that appellant prescribed drugs to patients upon whom he had not performed physical exams, and that prescribing drugs in this fashion was outside the course of usual professional practice. Thus, sufficient evidence did exist for appellant's conviction.

II. Severance of counts 1-19 from counts 20-39

Appellant complains that the counts resulting from the FBI's investigation should not have been joined with the counts resulting from the state investigation. Appellant claims that the FBI's investigation and resultant charges (Counts 1-19) involved the insurance fraud scheme while the state investigation (Counts 20-39) was concerned with the prescription of controlled substances. He contends that the misjoinder of these charges was prejudicial.

Federal Rule of Criminal Procedure 8(a) allows offenses to be joined if they are of the same or similar character. Misjoinder of charges is a question of law reviewed de novo. United States v. Smith, 795 F.2d 841, 850 (9th Cir.1986), cert. denied 481 U.S. 1032, 107 S.Ct. 1964, 95 L.Ed.2d 535 (1987).

The charges resulting from the separate investigations are of a similar character in that they all revolve around allegations that appellant was acting in a criminal manner outside the usual course of his medical practice. In fact, counts 3-39 all involved distribution of controlled substances. Counts 1 and 2 are mail fraud counts resulting from appellant's scheme to defraud an insurance company. 2 Under Federal Rule of Evidence 404(b), evidence of these "other acts" would be admissible to show motive, intent, or common scheme. Thus, the charges were properly joined because they do indeed show a common scheme and intent.

Having decided that the charges were properly joined, we must address the related issue of whether the court abused its discretion by denying appellant's pretrial motion for severance.

A denial of severance will be upheld absent a showing that "joinder was so manifestly prejudicial that it outweighed the dominant concern with judicial economy and compelled exercise of the court's discretion to sever." U.S. v. Whitworth, 856 F.2d 1268, 1277 (9th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 1541, 103 L.Ed.2d 846 (1989); U.S. v. Armstrong, 621 F.2d 951, 954 (9th Cir.1980). "[J]oinder is the rule rather than the exception." Whitworth, 856 F.2d at 1277. Appellant inexplicably argues that the testimony of the three undercover informants may have led the jury to believe that the method of prescribing drugs for these three witnesses was the appellant's ordinary method of prescribing drugs. But appellant was not charged with prescribing drugs to other patients, only the three that testified. Appellant offers no other evidence of prejudice. Accordingly, the...

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