The People Of The State Of Ill. v. Gutman

• Decision Date: 31 March 2010
• Docket Number: No. 1-08-1379.,1-08-1379.
• Citation: 340 Ill.Dec. 342,401 Ill.App.3d 199,928 N.E.2d 61
• Parties: The PEOPLE of the State of Illinois, Plaintiff-Appellee,v.Irit GUTMAN, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

401 Ill.App.3d 199

928 N.E.2d 61

340 Ill.Dec. 342

The PEOPLE of the State of Illinois, Plaintiff-Appellee,v.Irit GUTMAN, Defendant-Appellant.

No. 1-08-1379.

Appellate Court of Illinois First District, Fourth Division.

March 31, 2010.

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Lisa Madigan, Attorney General of Illinois, Chicago (Michael A. Scodro, Michael M. Glick and Michael R. Blankenheim, of counsel), for Plaintiff-Appellee.

Pissetzky & Berliner, P.C., Chicago (Gal Pissetzky, of counsel), for Defendant-Appellant.

Justice NEVILLE delivered the opinion of the court:

The defendant, Irit Gutman, was convicted, following a bench trial, of vendor fraud (305 ILCS 5/8A-3 (West 2000)), theft (720 ILCS 5/16-1 (West 2000)), and money laundering (720 ILCS 5/29B-1 (West 2000)). The trial court sentenced her to 66 months' imprisonment and ordered her to pay $1. 2 million in restitution. On appeal, Gutman presents the following issues for our review: (1) whether the trial court erred where evidence of Universal Public Transportation Inc.'s (UPT) receipts rather than its profits was used to convict her of money laundering; (2) whether the State knowingly used perjured testimony; (3) whether she was denied the effective assistance of counsel; and (4) whether the State proved her guilty beyond a reasonable doubt. The State responds that this court lacks jurisdiction over Gutman's appeal. For the following reasons, we affirm in part and reverse in part.

BACKGROUND

On January 20, 2004, Gutman, Mike Tishel, Ilya Lubenskiy, and UPT were each charged with vendor fraud, theft, and money laundering. Lubenskiy entered into a plea agreement with the State and pled guilty to vendor fraud in exchange for his testimony against Gutman, Tishel, and UPT. On April 25, 2005, Gutman requested a severance, which the trial court granted. In simultaneous but severed bench trials, the trial court heard the evidence presented against Gutman, Tishel, and UPT.

The State's Case

Lubenskiy testified that he pled guilty to forgery and mail fraud in federal court in 2003 and pled guilty in the instant case in 2004 and agreed to testify truthfully for the State. Lubenskiy explained the “prior approval system” used by the State of Illinois for the Medicaid program from the late 1990s until June 2001. Specifically, Lubenskiy testified that recipients in need of transportation to medical services called the local public aid office and requested transportation. The public aid office called a transportation company, informed the transportation company when and where the transportation company was supposed to provide the service, and the transportation company provided the service. A few months later, the public aid office would send the transportation company a copy of the prior approval number. The transportation company would then submit a bill and eventually be paid.

Lubenskiy met Gutman in 1993 when they worked for A.K. Medical Transportation Company (A.K.). In 1995, he and Gutman opened Egra Medical Transportation. Gutman spoke with the recipients and the public aid office, and Lubenskiy performed the bookkeeping. By 1999, Lubenskiy and Gutman co-owned additional companies, all of which were located in the same office space.

In February or March of 1999, Gutman told Lubenskiy that the public aid office had sent her a prior approval form with an incorrect code. The person from the public aid office instructed Gutman to delete the incorrect code and insert the correct code. Gutman told Lubenskiy that they should make changes on other prior approval forms. For example, in order to increase their payments, Gutman suggested that they could alter the destination, alter the number of miles traveled, or change the category of service. Gutman also suggested that they order blank prior approval forms, rewrite the forms, and insert any destination or number of trips on the forms. At Gutman's suggestion, Lubenskiy sent a bill in excess of the amount to which UPT was entitled to the public aid office for which they were eventually paid.

Lubenskiy identified exhibit 129 as the December 1, 1999, agreement between Lubenskiy, Gutman, and the federal government in which he and Gutman agreed to be permanently barred from participating in the Medicare program, all other federal healthcare programs, and the Illinois Medical Assistance Program. After they signed the agreement, Lubenskiy told Gutman that they had to sell the companies because their accounts were frozen as a result of their agreement. Gutman suggested that they rename the company and find a third partner. In December 2000, Lubenskiy and Gutman met with Tishel. Gutman offered Tishel 50% of the company and explained that she and Lubenskiy would run the company and Tishel would receive a salary. Lubenskiy testified that because he and Gutman were barred from participating in the Medicaid programs, Tishel was supposed to appear as the sole owner of the company. According to Lubenskiy, Tishel said it would only be fair if he owned one-third, rather than half, of the company.

UPT commenced doing business on January 16, 2001. Except for the name change, the business remained the same: they had the same vehicles, the same drivers, the same employees and the same office space. Gutman continued to talk with the public aid office using an alias, Lubenskiy continued to perform the bookkeeping, and Tishel signed and deposited checks received from the State of Illinois into a bank account on which only Tishel and his son were the authorized signatories.

Lubenskiy further testified that money was transferred from UPT's business account to Tishel's personal account and from Tishel's personal account to Gutman's account. The money issued to Gutman's account was used to purchase single-family homes that were put in Gutman's name. However, Lubenskiy testified that he did not receive half of the property as agreed. Lubenskiy identified exhibit 130 as a trustee's deed dated January 29, 1998, for property in Galena owned by him and Gutman. Lubenskiy identified exhibit 131 as a quitclaim deed dated May 10, 2000, bearing his and Gutman's names transferring the Galena property to Gutman's son. Lubenskiy explained that they were attempting to hide the property. Lubenskiy identified exhibit 132 as a mortgage for $224,000 on the Galena property recorded February 26, 2001. Lubenskiy identified exhibit 53 as a check from the title company dated February 26, 2001, in the amount of $216,720.50. Lubenskiy identified exhibit 54 as a deposit ticket for UPT's account in the amount of $216,720.50.

Lubenskiy further testified that he and Gutman purchased cars with funds from UPT. Lubenskiy identified exhibit 61 as an invoice for a Mercedes owned by him and Gutman and used by Gutman. Lubenskiy identified exhibit 62 as a receipt dated March 13, 2002, for another Mercedes owned by Gutman and Ezra Entertainment that he used. Lubenskiy testified that from January 16, 2001, until February 2002, UPT billed the State of Illinois approximately $6 million and received approximately $3 million. Finally, Lubenskiy testified that they eventually sold the business to Arik Amzaleg and Tishel for $600,000, but only received $400,000.

On cross-examination, Lubenskiy testified that he was banned as a result of activities that occurred between July 1995 and September 1999. On August 22, 2003, he pled guilty and on December 12, 2003, was sentenced to 33 months' imprisonment in a federal penitentiary. Around the same time, he was found guilty of forgery in state court. The federal and state sentences were to run concurrently.

Lubenskiy further testified on cross-examination that he only spoke with Tishel, not Amzaleg. Lubenskiy also denied having a conversation with Amzaleg in which they discussed the following: that there were discrepancies in the bookkeeping, that the consulting fee of $600,000 was to pay a previous front man, that they altered the mileage reimbursement procedure, that they billed four transportation companies for the same transport, that Lubenskiy hired women to create false documentation, that Lubenskiy created bills inclusive of kickbacks, and that Lubenskiy told Amzaleg that he slept well because he had taken $7 million. On redirect examination, Lubenskiy testified that Tishel never paid for his share of the business and that Tishel was listed as the sole, not one-third, owner of UPT.

Alla Denisenkio testified that she has known Lubenskiy and Gutman since 1999 when she worked for Ezra. She has also worked for other medical transportation companies owned by Lubenskiy and Gutman, including Tamid Medical Transportation, A.K., Purple Heart, and Etza. In January 2001, when the company changed its name to UPT, everything in the business remained the same except that Lubenskiy stopped coming into the office. Gutman informed Denisenkio that Tishel was the new owner and that he would sign the paychecks.

Ilona Golshmit testified that she has known Lubenskiy and Gutman since 1998 when she worked for Ezra. The company had several names at various points in time: Ezra, A.K., Purple Heart, and UPT. Gutman and Lubenskiy owned all of the companies except for UPT, which was owned by Tishel. Regardless of the name of the company, the daily operations remained the same: same drivers, same vehicles, same employees, and same job responsibilities.

John Fingley testified that he is the fraud and abuse executive for the office of the Inspector General with the Illinois Department of Health Care and Family Services (Department of Health Care). The Department of Health Care was previously called the Illinois Department of Public Aid. The office of the Inspector General is charged with program integrity for the medical assistance program of the State of Illinois. The medical assistance program, or Medicaid, is run by the federal government and gives medical services to the poor and indigent without health insurance. The...