U.S. v. Lipkis

• Decision Date: 10 September 1985
• Docket Number: No. 84-5274,84-5274
• Citation: 770 F.2d 1447
• Parties: Medicare&Medicaid Gu 34,904 UNITED STATES of America, Plaintiff-Appellee, v. Roger Wayne LIPKIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1447

770 F.2d 1447

Medicare&Medicaid Gu 34,904

UNITED STATES of America, Plaintiff-Appellee, v. Roger Wayne LIPKIS, Defendant-Appellant.

No. 84-5274.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 7, 1985.

Decided Sept. 10, 1985.

Robert A. Pallemon, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Stephen Gilbert, Santa Monica, Cal., for defendant-appellant.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, TANG, and WIGGINS, Circuit Judges.

TANG, Circuit Judge.

Roger Lipkis appeals his conviction for: (1) one count of conspiracy to defraud the United States by receiving "kickbacks" for referring Medi-Cal and Medicare business, under 18 U.S.C. Sec. 371; (2) four counts of receiving "kickbacks," under 42 U.S.C. Sec. 1396b; (3) five counts of making false statements on Medicare claim forms, under 42 U.S.C. Sec. 1395nn; and (4) five counts of mail fraud for submitting the claim forms through the mails, under 18 U.S.C. Sec. 1341. Lipkis raises two issues on appeal: first, that the government improperly used statements he made under an informal grant of immunity to obtain his indictment and to prosecute him; and, second, that there was a fatal variance between the false statement charges under 42 U.S.C. Sec. 1395nn and the government's proof at trial. He therefore contends that the indictment should have been dismissed or, in the alternative, that there was insufficient evidence to support the jury's verdict on the false statement and mail fraud counts.

We affirm.

FACTS

Roger Lipkis was the president and managing partner of Mobile Medical Industries (MMI), which provided management services for Mobile Medical Group (MMG), owned by a physician, Dr. David Gans. Under their organizational framework, MMG practiced medicine and MMI took care of the business of the practice.

MMG provided primary medical care, including diagnostic testing, on location to patients in board and care facilities and halfway houses in Central and Southern California. MMI provided vans to transport doctors, technicians and equipment to the patients. The primary source of payment for the company's services was the Medicare and Medi-Cal programs.

In 1977, Lipkis entered into an agreement with a medical laboratory, Automated Laboratory Services (ALS), whereby MMI would refer lab work to ALS in exchange for kickback payments of approximately twenty percent of ALS's revenue from MMI/MMG business. To account for the kickback payments, MMI provided ALS with certain services including collecting specimens, spinning down blood, supplying forms and stickers, and carrying insurance. The fair market value of these services was substantially less than the compensation MMI received from ALS, and there is no question that ALS was paying for the referrals as well as the described services. This arrangement lasted from April through October 1978. During this period, Lipkis instructed his billing clerk to bill Medicare for the same blood collection and handling services.

In May and June 1980, Lipkis met on three occasions with FBI agents to discuss the business relationship between MMI and ALS. The FBI was then investigating allegations that ALS was paying kickbacks as an inducement for the referral of Medicare business. Lipkis acknowledged receiving payments from ALS but maintained that they were fair compensation for specimen collection and handling services. These interviews produced twenty-two typed pages of notes. It is undisputed that Lipkis gave these statements voluntarily and free from government deception or duress.

The FBI sought to interview Lipkis again in December 1980 on the narrow issue of a possible "advice of counsel" defense for ALS. In the interim Lipkis had retained an attorney who negotiated with the United States Attorney for an "informal" grant of use immunity for statements made by Lipkis in the December interview sessions. It is clear that this limited grant of use immunity was not intended by the United States Attorney to encompass statements already made. Instead of focussing solely on the role of counsel in the MMI-ALS relationship, the December interviews covered most of the same particulars discussed in May.

The ALS investigation continued throughout 1981 and included yet another interview with Lipkis. Finally, in the fall of 1982 the United States Attorney's office offered Lipkis informal use immunity in exchange for grand jury testimony in the ALS matter. Lipkis appeared before the grand jury but asserted his Fifth Amendment privilege and did not provide any useful testimony. His indictment followed.

Lipkis moved to dismiss the indictment on the grounds that since his December 1980 statements were immunized and they substantially overlapped the May 1980 statements, the government could not, as a matter of law, meet its burden of showing that the information supporting his indictment came from a source untainted by the grant of immunity. Originally, the district court agreed with Lipkis and ruled that the December immunity applied retroactively to statements made in May. After reconsideration, however, the district court vacated its former ruling and held that the May 1980 statements were not retroactively immunized.

The court ordered the parties to make a joint submission on the question of whether the government had met its burden under Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972) to demonstrate affirmatively that its evidence was derived from a source independent from Lipkis was tried before a jury. The government's proof on the false statement and mail fraud counts consisted of the testimony of MMI's billing clerk, Patricia Rayford; ten Medicare claim forms requesting payment for blood collection and handling services submitted during the period when ALS was paying MMI for these services; and Lipkis's own admission under cross-examination that he had instructed Rayford to bill Medicare for blood collection services paid for by ALS. The jury convicted Lipkis on all counts remaining before it and this appeal followed.

immunized statements. The parties stipulated that the differences between the May and December 1980 statements were insignificant and did not trigger the Kastigar requirement of an evidentiary hearing. Lipkis argued, however, that the government should nonetheless be required to show affirmatively that any information obtained after December 1980 was not the result of the use or derivative use of immunized statements. The court ruled that the May interviews were a sufficient independent source under Kastigar for names of witnesses also mentioned in December, and that the government was free to use evidence derived from subsequent interviews with those individuals at trial.

IMMUNIZED TESTIMONY

We review under the clearly erroneous standard the district court's finding that the government's evidence was untainted by a grant of immunity. United States v. Rogers, 722 F.2d 557, 560 (9th Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 129, 83 L.Ed.2d 70 (1984).

The United States Attorney may compel a witness to testify by immunizing his testimony from use against him in a subsequent criminal proceeding. See 18 U.S.C. Secs. 6001-6005. The grant of use immunity covers any use or derivative use of the particular testimony (18 U.S.C. Sec. 6002) and is coextensive with the scope of the Fifth Amendment privilege against self-incrimination. Kastigar v. United States, 406 U.S. 441, 453, 92 S.Ct. 1653, 1661, 32 L.Ed.2d 212 (1972). ¹ An individual who has testified under a grant of Sec. 6002 use immunity is not shielded from all prosecution. Use immunity does not protect the substance of compelled testimony, it only protects against the use of compulsory testimony as a source for evidence. Id. at 453, 92 S.Ct. at 1661. Thus, before trial, the government must prove that any evidence it proposes to use against the witness is derived from a legitimate source wholly independent of his compelled and immunized testimony. Id. at 460-61, 92 S.Ct. at 1664-65.

On appeal Lipkis first contends that the use immunity granted him in December 1980 retroactively immunized his May 1980 statements. He argues that the government therefore was precluded from using either May or December statements to obtain his indictment or in its subsequent prosecution.

In making this argument, Lipkis ignores a crucial point: statements may only be immunized through an express grant by the United States Attorney, 18 U.S.C. Sec. 6003(a). Lipkis concedes that the May statements were not immunized before he made them. Further, there was no evidence the United States Attorney intended to immunize them retroactively when he immunized the December 1980 statements. Absent a specific grant by the United States Attorney, the statements lack immunity as a matter of law. Cf. Pillsbury v. Conboy, 459 U.S. 248, 256-57, 103 S.Ct. 608, 614 (1983) (A district court cannot invest an individual with transactional, or Second, Lipkis contends that even if his May, 1980 statements were not immunized, the government failed to meet its burden under Kastigar of showing that all of the evidence it relied upon in prosecuting him came from sources wholly independent of his immunized December statements. He argues that the government did not show that all information uncovered after December 1980 was derived from untainted statements.

complete, immunity on matters about which he testified under a grant of use immunity.).

Lipkis points particularly to the testimony of FBI Special Agent Hersley, who interviewed Lipkis in both May and December and did not affirmatively identify nonimmunized sources for his testimony. He further argues that both the prosecutor and Hersley, the government's primary witness, were "infected" by their first-hand knowledge of his immunized statements; therefore the government could not prove that no use was...