U.S. v. Migliaccio, Nos. 93-6211

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: Before KELLY and McKAY, Circuit Judges, and BRIMMER; PAUL KELLY, JR.
• Citation: 34 F.3d 1517
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John H. MIGLIACCIO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Bert M. AVERY, Defendant-Appellant.
• Docket Number: 93-6212,Nos. 93-6211
• Decision Date: 07 September 1994

Page 1517

34 F.3d 1517 UNITED STATES of America, Plaintiff-Appellee,
v.
John H. MIGLIACCIO, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Bert M. AVERY, Defendant-Appellant. Nos. 93-6211, 93-6212. United States Court of Appeals,
Tenth Circuit. Sept. 7, 1994.

Page 1520

Mack K. Martin, Martin Law Office, Oklahoma City, OK, for defendant-appellant John Migliaccio.

Robert L. Wyatt, IV (Stephen Jones, with him on the brief), Jones & Wyatt, Enid, OK, for defendant-appellant Bert Avery.

Ross N. Lillard, III, Asst. U.S. Atty. (Vicki Miles-LaGrange, U.S. Atty., with him on the brief), Oklahoma City, OK, for plaintiff-appellee.

Before KELLY and McKAY, Circuit Judges, and BRIMMER, District Judge. ^d

PAUL KELLY, JR., Circuit Judge.

Defendants-appellants Bert M. Avery, M.D., and John G. Migliaccio, M.D., appeal their convictions for conspiracy to defraud the United States, 18 U.S.C. Sec. 371, and mail fraud, 18 U.S.C. Secs. 1341 & 2. ¹ The government alleged that Drs. Avery and Migliaccio filed false claims with the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) by misrepresenting what surgical procedures were performed. Our jurisdiction arises under 28 U.S.C. Sec. 1291. We reverse the conspiracy convictions and eight counts contained in the mail fraud convictions. We reverse and remand for new trial one count of mail fraud against Dr. Migliaccio, due to inadequate jury instructions.

Background

Drs. Avery and Migliaccio are obstetricians/gynecologists who practiced together as Southwest Fertility Center, Inc., and A & M Surgical, Inc., in Lawton, Oklahoma. They were indicted on conspiracy and mail fraud charges after they submitted claims to CHAMPUS for surgeries that included fallopian tube repair. The government charged that the surgeries were reversals of tubal ligations, an uncovered procedure under CHAMPUS regulations, and that Defendants misrepresented the surgeries to CHAMPUS in order to receive payment. It argued that Defendants concealed the true nature of the surgeries by failing to document adequately the patients' previous tubal ligation on the operative reports, failing to submit excised hardware for a pathology determination in some cases, and labeling the fallopian tube repair as "salpingoplasty" rather than "tubal reanastomosis." Defendants assert that the

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surgeries were medically necessary and deny that they intended to defraud CHAMPUS. They argue that they complied with all hospital and CHAMPUS regulations, and that "salpingoplasty" accurately describes the procedures performed.

Defendants raise several issues on appeal. Together, they argue: first, that there was insufficient evidence of conspiracy and mail fraud; second, that they were entitled to a jury instruction concerning ambiguity and their good faith defense; and third, that the jury instruction error spilled over to the conspiracy charge. Dr. Migliaccio further challenges his convictions because of an alleged conflict of interest in his attorney representation.

I. Sufficiency of the Evidence

Appellants challenge the sufficiency of the evidence that they used the mails to defraud the government, either individually or together as a conspiracy. We review the evidence in the light most favorable to the government to determine whether substantial evidence exists, direct and circumstantial, together with reasonable inferences therefrom, whereby a reasonable jury might find the defendants guilty beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Zimmerman, 943 F.2d 1204, 1208-09 (10th Cir.1991). We will not uphold a conspiracy conviction obtained, however, by nothing more than "piling inference upon inference." United States v. Fox, 902 F.2d 1508, 1513 (10th Cir.1990) (citations omitted).

Under 18 U.S.C. Sec. 371, a conviction for conspiracy requires that the government prove beyond a reasonable doubt that the defendants agreed to defraud the United States and that one of the conspirators committed an overt act in furtherance of the conspiracy. United States v. Guadalupe, 979 F.2d 790, 793 (10th Cir.1992). An agreement between the defendants to violate the law is an essential element, which must be shown beyond a reasonable doubt. United States v. Davis, 965 F.2d 804, 814 (10th Cir.1992) (holding various actions of state insurance commissioner insufficient evidence of agreement to bribe a public official). See also United States v. Butler, 494 F.2d 1246, 1249 (10th Cir.1974) (mere knowledge of or acquiescence in the object of a conspiracy does not make one a coconspirator). In United States v. Nall, 949 F.2d 301, 305-06 (10th Cir.1991), we concluded that the government's proof that the defendants, a buyer and seller of real estate, left a meeting together to make a deposit at a bank was insufficient to prove a conspiracy existed to circumvent the cash transaction reporting requirements of 31 U.S.C. Secs. 5324(a)(3) and 5313(a). In Zimmerman, 943 F.2d at 1210-11, we concluded that, although a close case, the government's proof of an agreement between an attorney and his partner and his partner's client was sufficient to warrant the jury's guilty verdict. We noted there, however, that the attorneys' partnership and consultation on the client's case was insufficient evidence of a conspiracy. Id. at 1210.

While not specifically addressing whether the evidence of an agreement was sufficient to submit the issue to the jury, the government argues generally that the evidence was sufficient to support the conspiracy convictions. We have carefully reviewed the record and conclude that here the government failed to prove the existence of an agreement between the doctors to defraud the United States.

The government offered no direct evidence of an agreement, relying instead on circumstantial evidence and suggested inferences. Its proof, however, that Defendants practiced medicine together, shared one billing system, assisted each other in surgery, and advertised heavily in the Lawton, Oklahoma area simply does not constitute facts upon which a reasonable juror could infer an agreement to commit mail fraud. See Zimmerman, 943 F.2d at 1210 (legitimate business partnership, standing alone, does not constitute proof of conspiracy). Neither does the testimony of operating room nurses who testified generally that they heard Defendants discuss insurance filing procedures so that payment might be had. The record simply does not reflect that this testimony constituted evidence of an agreement to engage in criminal conduct. Finally, an expert witness' testimony

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that, in his opinion, Defendants were performing operations together and then billing for them in a fraudulent manner, again, is not sufficient evidence of an agreement. At most, a reasonable juror might infer that one defendant had knowledge of the other's intent, but knowledge, by itself, is insufficient to create a conspiracy. Id. (citing United States v. Fox, 902 F.2d 1508, 1514 (10th Cir.1990)). We conclude, therefore, that the government failed to meet its burden of proof of an essential element of the crime of conspiracy.

The mail fraud statute contains two separate offenses, fraud and misrepresentation. 18 U.S.C. Sec. 1341; United States v. Cronic, 900 F.2d 1511, 1513 (10th Cir.1990) (citations omitted); accord United States v. Falcone, 934 F.2d 1528, 1539 n. 28 (11th Cir.1991). The indictment here charges that the Defendants willfully and knowingly devised a scheme to obtain money by false representations. False or fraudulent pretenses, representations or promises are therefore an essential element that the government must prove. Cronic, 900 F.2d at 1514. The government argues generally that the evidence sufficiently proved that defendants committed mail fraud by making misleading statements on CHAMPUS claims.

Under CHAMPUS regulations, the Defendants must report each procedure performed, whether covered or not, either in narrative form or by use of a procedure code. 32 C.F.R. Sec. 199.7(b)(2)(ix). In turn, CHAMPUS must review each submitted claim for, inter alia, compliance, exclusions, utilization of claimed services and quality assurance. 32 C.F.R. Sec. 199.7(g). While CHAMPUS does not provide payments for reversals of sterilization, 32 C.F.R. Sec. 199.4(e)(3)(i)(B)(4), the regulations provide an evaluation system for multiple surgery claims, i.e., surgical claims involving more than one procedure. 32 C.F.R. Sec. 199.4(c)(3)(i). CHAMPUS provides payment at one-hundred percent for the major surgical procedure, i.e., the procedure with the greatest covered cost, and lower payments for other procedures performed at the same time. Id. CHAMPUS does not provide payment for any incidental procedures performed during a multiple surgery. Id.

The mail fraud counts may be separated into two categories: one group of counts evidenced primarily by documents, and another group of counts evidenced by testimony in addition to documents. The Defendants' convictions of mail fraud from the first group lack sufficient evidence of criminal wrongdoing. The small amount of testimony in the record specifically relating to Counts 2, 6, 8, 9, 10, and 11 does not support a reasonable inference that these claims constitute misrepresentations. In addition an expert witness testified that, in his opinion, Defendants' primary purpose in performing surgery on the patients whose files he reviewed was reversal of sterilization, although he also testified that many of these patients had disease. He, however, did not identify any patients who had no disease. Because Defendants were permitted, and indeed required, to file multiple surgery claims with CHAMPUS that included tubal reversal procedures which CHAMPUS would then review, we cannot say that these statements contained within the claims filed by Defendants were false. Without evidence that statements on these...