U.S. v. Hooshmand

• Decision Date: 16 May 1991
• Docket Number: No. 87-6089,87-6089
• Citation: 931 F.2d 725
• Parties: 32 Fed. R. Evid. Serv. 1281 UNITED STATES of America, Plaintiff-Appellee, v. Hooshang HOOSHMAND, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 725

931 F.2d 725

32 Fed. R. Evid. Serv. 1281

UNITED STATES of America, Plaintiff-Appellee, v. Hooshang HOOSHMAND, Defendant-Appellant.

No. 87-6089.

United States Court of Appeals Eleventh Circuit.

May 16, 1991.

Joseph Beeler, Miami, Fla., for defendant-appellant.

Dexter Lehtinen, U.S. Atty., Anne Ruth Schultz, Linda Collins Hertz, Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before JOHNSON and BIRCH, Circuit Judges, and MERHIGE ^*, Senior District Judge.

JOHNSON, Circuit Judge:

Defendant Dr. Hooshang Hooshmand appeals his convictions for submitting fraudulent Medicare claims to the United States Department of Health and Human Services and fraudulent claims for medical services to private insurance companies.

I. STATEMENT OF THE CASE

A. Background Facts

Dr. Hooshmand, a licensed physician specializing in neurology, treats patients covered by private insurance companies as well as patients insured by Medicare, a federal program which pays for much of the medical costs of persons who are over the age of sixty-five or are disabled. Medicare is administered by the Health Care Financing Administration, a federal agency under the Department of Health and Human Services ("HHS"). The Medicare program is divided into two parts. Medicare Part A covers hospital-related costs, and Part B covers physician-related costs. Blue Cross and Blue Shield of Florida, Inc., ("Blue Cross") administers Medicare in Florida as the agent of the Health Care Financing Administration by processing claims and making payments to physicians on behalf of the federal government.

If Blue Cross compensates a physician directly, it pays eighty percent of the claim as determined by a schedule of allowances. The patient or co-insurer is responsible for the remaining twenty percent. The patient is also responsible for a seventy-five-dollar deductible and all non-covered charges. Physicians participating in the Medicare program cannot collect more than the applicable deductible and co-insurance. Participating physicians are required to obtain the co-payment and deductible from the patient.

Blue Cross publishes a Manual for Physicians ("the Blue Cross Manual") which provides physicians with the instructions necessary to file Medicare claims. A physician submits a standard claim form, HCFA form 1500, to Blue Cross. This form requires a physician to describe the services rendered using a set of descriptive terms and codes. The Blue Cross Manual derived the terms and codes from Current Procedural Terminology ("CPT"), a guide developed by the American Medical Association to create a standardized nomenclature for use in insurance claims, and the Florida Relative Value Studies ("FRVS"), developed by the Florida Medical Association, Inc., another manual which provided a standardized nomenclature. ¹

As part of his practice, Dr. Hooshmand administered electromyography ("EMG") exams which are designed to determine whether the muscles react to the stimulus transmitted by the nerves. Dr. Hooshmand's practice consisted of providing these tests as part of his care to his own patients as well as part of consultations regarding patients under the care of others.

B. Procedural History

On March 11, 1987, a federal grand jury returned a superseding indictment charging Dr. Hooshmand with seventeen counts of fraud for submitting false Medicare claims ("Medicare fraud"), in violation of 18 U.S.C. Secs. 2 & 287, and fifteen counts of mail fraud, in violation of 18 U.S.C. Secs. 2 & 1341. ² The mail fraud counts were based on allegedly false billings to private insurers. The government charged that Dr. Hooshmand presented fraudulent claims for consultation ³ when he should have made claims for new patients and that he presented claims for EMGs that he never performed. Dr. Hooshmand moved to dismiss the indictment for vagueness and because Counts 18-32 failed to allege sufficient use of the mails. The magistrate recommended that Counts 1-17 be dismissed but that Counts 18-32 not be dismissed. The district court rejected the magistrate's recommendation that Counts 1-17 be dismissed and denied Dr. Hooshmand's motion to dismiss as to all counts.

A jury trial began on July 7, 1987. On August 4, 1987, the jury announced a verdict. A poll of the jury revealed the verdict was not unanimous, and the jury returned to deliberations. On August 5, 1987, the jury found Dr. Hooshmand guilty on ten counts of Medicare fraud and seven counts of mail fraud. ⁴ The court sentenced Dr. Hooshmand to an aggregate sentence of eighteen months of imprisonment, five years of probation to begin upon completion of the jail sentence, full restitution in the amount of $3,101.24, 5000 hours of community service while on probation, a fine of $250,000, and an assessment of $300.

Dr. Hooshmand raises the following issues on this appeal. He contends that his mail fraud convictions for the allegedly fraudulent consultation billings are inconsistent with the Supreme Court's holding in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). He also claims that the definition of consultation is so vague that criminal prosecution for allegedly submitting a false claim for consultation violates due process. Dr. Hooshmand further contends that the evidence is insufficient to support his convictions for fraudulently submitting false EMG claims and that the district court erred in its jury instructions. He claims that the medicare fraud counts were inadequately pleaded in the indictment and that the district court made numerous evidentiary errors. Dr. Hooshmand also argues that the district court's denial of his post-verdict motion to interview jurors violated his rights under the First and Fourteenth Amendments. Finally, he claims that the district court erred in imposing a fine of $250,000.

II. ANALYSIS

A. The McNally Challenge to the Mail Fraud Convictions

Dr. Hooshmand argues that the mail fraud convictions for the allegedly fraudulent consultation billings are inconsistent with McNally, supra. In McNally, the Supreme Court held that the mail fraud statute applied only to schemes to defraud for money or property and did not include schemes to defraud individuals of intangible, non-property rights, e.g., a citizen's right to honest government. Carpenter v. United States, 484 U.S. 19, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987).

Federal law prohibits the use of the mails in the furtherance of a scheme to defraud. 18 U.S.C. Sec. 1341. To prove mail fraud, the government must show that the defendant (1) intentionally participated in a scheme to defraud and (2) used the mails to execute the fraudulent scheme. United States v. Hawkins, 905 F.2d 1489, 1496 (11th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 707, 112 L.Ed.2d 696 (1991). Success of the scheme is not a necessary element of the offense. United States v. Dynalectric Co., 859 F.2d 1559, 1576 (11th Cir.1988), cert. denied, 490 U.S. 1006, 109 S.Ct. 1642, 104 L.Ed.2d 157 (1989).

To determine whether a conviction for mail fraud is consistent with McNally, this Court looks to the wording of the indictment and the jury instructions. Dynalectric, 859 F.2d at 1570. If these are expressed in such a way that the jury must have concluded that a defendant schemed to defraud a victim of a monetary or property right, then we will uphold the convictions. Id. at 1570-71. If the jury could have convicted a defendant of scheming to defraud a victim of a McNally intangible right, then we will reverse the convictions. Id.

Turning to the indictment, paragraphs two and three of Count Fifteen, the first mail fraud count, charged that the object of Dr. Hooshmand's scheme was to obtain money from insurers for services he did not perform. All of the other mail fraud counts incorporated these two paragraphs. To convict Dr. Hooshmand in accordance with the indictment, the jury would have to conclude that Dr. Hooshmand was engaged in a scheme to defraud the insurers of money. Accordingly, the indictment complies with McNally.

We must next determine whether the jury instructions were consistent with McNally. When reviewing jury instructions, this Court determines whether the charges as a whole sufficiently instructed the jury so that it understood the issues involved and were not misled. Everett v. Carnival Cruise Lines, 912 F.2d 1355, 1358 (11th Cir.1990).

The challenged instructions are substantially similar to the instructions this Court upheld in Dynalectric, 859 F.2d at 1573. ⁵ As in Dynalectric, the jury was instructed that it was required to find a scheme to defraud money or property. Id. "Or equal importance is that the jury was not instructed on the intangible rights theory." Id. Finally, the court instructed the jury that the government had to prove a scheme to defraud that was "substantially the same as the one alleged in the indictment." As we have noted, the indictment alleged a scheme to defraud the insurance companies of money. Accordingly, we find that the mail fraud counts withstand Dr. Hooshmand's McNally challenge. Id.

B. Due Process

Dr. Hooshmand argues that the definition of consultation used by Medicare and private insurers is so broad that his consultation claims fell within that definition. In the alternative, he claims that the definition of consultation is so vague that criminal prosecution for falsely submitting such a consultation claim violates due process.

Blue Cross was the Federal Government's exclusive agent in processing Medicare claims in Florida. The Blue Cross Manual defined a consultation as a request for services by a physician or an agency. This definition is not vague; it is plainly evident from the language. Dr. Hooshmand received no requests from either physicians or agencies for the consultations that form the basis of the Medicare fraud counts. The government presented overwhelming evidence that Dr. Hooshmand knew and...