U.S. v. Hughes

• Decision Date: 12 February 1990
• Docket Number: 88-1661 and 88-1751,Nos. 88-1658,88-1659,88-1660,s. 88-1658
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Charles HUGHES (88-1658), Luckett Larry (88-1659), Sanford Hoskow (88-1660), Basem Kandah (88-1661), and Dale Dudley (88-1751), Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1135

895 F.2d 1135

UNITED STATES of America, Plaintiff-Appellee, v. Charles HUGHES (88-1658), Luckett Larry (88-1659), Sanford Hoskow (88-1660), Basem Kandah (88-1661), and Dale Dudley (88-1751), Defendants-Appellants.

Nos. 88-1658, 88-1659, 88-1660, 88-1661 and 88-1751.

United States Court of Appeals Sixth Circuit.

Argued Nov. 30, 1989.

Decided Feb. 12, 1990.

Thomas A. Ziolowski, Asst. U.S. Atty., Wayne F. Pratt (argued), Office of the U.S. Atty., Detroit, Mich., for U.S.

James R. Andary, Andary, Brennan & Andary, Detroit, Mich., for Charles Hughes.

David I. Goldstein (argued), Ann Arbor, Mich., for Luckett Larry.

Howard J. Wittenberg (argued), Andary, Brennan & Andary, Detroit, Mich., for Sanford Hoskow.

Edward Wishnow (argued), Southfield, Mich., for Basem Kandah.

Kenneth M. Mogill (argued), Mogill, Posner & Cohen, Detroit, Mich., for Dale Dudley.

Before KEITH, JONES and BOGGS, Circuit Judges.

KEITH, Circuit Judge.

Hubbell Medical Clinic ("HMC") was a disreputable medical clinic in Detroit that defrauded Medicaid and Blue Cross Blue Shield of Michigan through a scheme involving fraudulent blood testing and the illegal distribution of controlled substances. On March 22, 1988, after a six week trial before Judge Julian Abele Cook, a jury convicted Sanford Hoskow ("Hoskow"), Dale Dudley ("Dudley"), Luckett Larry ("Larry"), Charles Hughes ("Hughes") and Basem Kandah ("Kandah") (collectively "defendants") for their respective roles in the operation of HMC. ¹ Defendants appeal their convictions. For the reasons set forth below, we AFFIRM.

I.

HMC opened in August 1985. The patients were drug addicts who came to the clinic to obtain Schedule III drugs. ² One of two physician's assistants attended the patients. Under the policy established by Linda Fisher ("Fisher"), ³ four tubes of blood were drawn from each new patient to conduct a "comprehensive" blood profile test. Patients who refused to give blood were denied controlled substances. The controlled substance prescriptions were telephoned to a cooperating pharmacy ⁴ where the patient purchased the drugs.

The policy of taking blood from every new patient was necessary for HMC to make a profit. The "comprehensive" blood test allowed the blood lab to bill the patient's insurance company for the most money. ⁵ A portion of that money was illegally kicked back to HMC and used to operate the clinic, pay the employees and pay the other bills.

Defendants' involvement in the operation of HMC was manifested in several ways. Hoskow assisted Fisher in setting up HMC. He provided equipment, contacts with doctors, loans and kickbacks in exchange for the right to serve as a broker for the clinic's blood testing business. Hoskow was convicted of one count of the Racketeer Influenced and Corrupt Organization Act ("RICO") conspiracy, in violation of 18 U.S.C. Sec. 1962(d), one count of criminal RICO, in violation of 18 U.S.C. Sec. 1962(c), and twelve counts of mail fraud, in violation of 18 U.S.C. Sec. 1341. He was sentenced to a total of 17 years of imprisonment and fined $10,000. In addition, a $150 special assessment was imposed.

Dudley, a medical doctor, agreed to be a supervisory physician or "doctor of record" for $500 cash per week, in order to lend a facade of legitimacy to the medical practice at HMC. In fact, Dudley did not meaningfully supervise HMC's medical practice or obtain the required supervisory license. Instead, he directed the physician's assistants, who actually treated the patients, to provide the patients with the controlled substance of their choice. Dudley was found guilty of RICO conspiracy, in violation of 18 U.S.C. Sec. 1962(d), two counts of unlawful distribution of controlled substances, in violation of 21 U.S.C. Sec. 841(a)(1), and 16 counts of mail fraud, in violation of 18 U.S.C. Sec. 1341. Dudley was sentenced to a total of four years in prison and a two-year parole term. In addition, a $950 special assessment was imposed.

Larry owned and operated the blood testing lab, Superior Bio-Medical Lab, Inc. Through his company, Larry paid illegal kickbacks to HMC in exchange for receiving HMC's blood testing business. Larry was convicted of RICO conspiracy, in violation of 18 U.S.C. Sec. 1962(d), two counts of mail fraud, in violation of 18 U.S.C. Sec. 1342, and Medicaid fraud, in violation of 42 U.S.C. Sec. 1396h. Larry was sentenced to 18 months in prison.

Hughes, a registered pharmacist, owned and operated Sunshine Pharmacy. He filled illegal prescriptions from HMC for codeine, a Schedule III controlled substance. He then fraudulently billed the patient's insurance company for the medication. Hughes was found guilty of RICO conspiracy, in violation of 18 U.S.C. Sec. 1962(d), criminal RICO, in violation of 18 U.S.C. Sec. 1962(c), five counts of mail fraud, in violation of 18 U.S.C. Sec. 1342, and one count of unlawful distribution of controlled substances, in violation of 21 U.S.C. Sec. 841(a)(1). Hughes was sentenced to three years in prison, and a special assessment of $400 was imposed.

Kandah, a registered pharmacist, worked at East Pharmacy for Carl Scott ("Scott"). Kandah, at Scott's direction, filled controlled substance prescriptions from HMC that he knew were outside the scope of legitimate medical practice. Kandah was convicted of one count of unlawful distribution of controlled substances, in violation of 21 U.S.C. Sec. 841(a)(1). Kandah was sentenced to three years in prison and four years of parole. In addition, a special assessment of $50 was imposed.

II.

On appeal, defendants raise a variety of issues. Dudley, Hughes, Kandah and Larry challenge the sufficiency of evidence to support the jury's verdict in their respective convictions. In addition, defendants challenge their respective convictions on grounds that they raise separately. Dudley contends that the trial court abused its discretion in denying his motion for a separate trial and committed plain error by permitting a qualified medical expert to offer an impermissible opinion as to a legal conclusion. Hoskow asserts that the trial court abused its discretion by denying his motion for a mistrial because the government violated the court's order in limine. Hoskow also argues that permitting the jurors to use transcripts, that had been verified by the court, while listening to tape recorded conversations constituted an abuse of discretion. Hughes alleges that a licensed pharmacist in Michigan has no duty to determine the medical necessity of prescriptions ordered by a licensed physician; therefore, it is error to hold him criminally liable for distributing controlled substances outside the course of legitimate medical practice. Kandah contends that the trial court erred in quashing a subpoena requiring a government expert to produce pharmacy documents. We will begin by addressing those issues that defendants raise collectively, and then address the issues that defendants raise separately.

A.

Hughes, Larry, Dudley and Hoskow claim that their RICO conspiracy convictions cannot stand because there is insufficient evidence to support the single conspiracy charged in the indictment. They contend that, at best, the government has shown two separate, parallel and possibly overlapping schemes, rather than the one unified scheme charged in the indictment. We find this argument meritless.

This court has a limited scope of review in appeals challenging the sufficiency of evidence. We must view the evidence in the light "most favorable to the government." Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Grunsfeld, 558 F.2d 1231, 1238 (6th Cir.1977). We are bound to make all reasonable inferences and credibility choices in support of the jury's verdict. United States v. Stull, 743 F.2d 439, 442 (6th Cir.1984), cert. denied, 470 U.S. 1062, 105 S.Ct. 1779, 84 L.Ed.2d 838 (1985). Moreover, if "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt," the convictions must be affirmed. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original).

Whether a single conspiracy or multiple conspiracies have been shown is a question of fact resolved by the jury. A conspirator need not have agreed to commit every crime within the scope of the conspiracy, so long as it is reasonable to infer that each crime was intended to further the enterprise's affairs. See United States v. Sutton, 642 F.2d 1001, 1017 (6th Cir.1980). Moreover, it is not necessary for each conspirator to participate in every phase of the criminal venture, provided there is assent to contribute to a common enterprise. See United States v. Grassi, 616 F.2d 1295, 1303 (5th Cir.), cert. denied, 449 U.S. 956, 101 S.Ct. 363, 66 L.Ed.2d 220 (1980) ("Seemingly independent transactions may be revealed as parts of a single conspiracy by their place in a pattern of regularized activity involving a significant continuity of membership.").

The jury instructions explicitly required the jury to determine whether a single scheme existed as alleged in the indictment. ⁶ Defendants argued for acquittal based on the government's failure to prove the scheme charged in the indictment. However, the jury rejected this argument, and we are in accord with the jury's finding.

There is sufficient evidence to sustain the jury's finding that defendants were involved in a single criminal venture with more than one phase of criminal activity. ⁷ We believe that a reasonable juror could find that the multiple criminal acts committed by defendants, which include the unlawful distribution of controlled substances, defrauding insurers and engaging in kickbacks, were elements of a single scheme. Thus reversal of defendants' convictions on this ground is unwarranted.

Having found that there is sufficient evidence to support the jury's finding that a single RICO conspiracy existed, we will address...