U.S. v. Morgan, 06-20634.

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Per Curiam
• Citation: 505 F.3d 332
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Linda MORGAN, Defendant-Appellant.
• Docket Number: No. 06-20634.,06-20634.
• Decision Date: 17 October 2007

505 F.3d 332 UNITED STATES of America, Plaintiff-Appellee,
v.
Linda MORGAN, Defendant-Appellant. No. 06-20634. United States Court of Appeals, Fifth Circuit. October 17, 2007.

[505 F.3d 335]

Mary Jane Harmon (argued), James Lee Turner, Asst. U.S. Atty., Houston, TX, for U.S.

Richard Edward Banks (argued), Lockhart, TX, for Morgan.

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

Before DENNIS^*, CLEMENT and PRADO, Circuit Judges.

PER CURIAM:

Linda Morgan appeals her conviction. We AFFIRM.

I. FACTS AND PROCEEDINGS

On September 6, 2005, Linda Morgan was indicted on twelve counts of health care fraud, in violation of 18 U.S.C. § 1347, and one count of conspiracy, in violation of 18 U.S.C. § 371. Before trial, the government filed a notice of Federal Rule of Evidence 404(b) material and/or impeachment evidence, including evidence of Morgan's activity at Compass Bank. The government also filed a notice of intent to offer affidavits for certain records under Federal Rule of Evidence 902(11), including the use of Victor Davies's grand jury testimony transcript for the admission of patient beneficiary records. Morgan made motions in limine to exclude extrinsic bad act evidence under Rule 404(b) and use of Davies's grand jury testimony, and she objected to the authenticity of the documents obtained from Davies in the grand jury. The district court denied the motion to exclude the business records obtained from Davies in the grand jury.

At trial, the government established that Medicare required that a patient be seen face-to-face by a treating physician before any durable medical equipment was prescribed. Also, a Certificate of Medical Necessity ("CMN") needed to be completed. CMNs were Department of Health and Human Services forms that contained patient information, a physician attestation, and information about the equipment provided. Morgan was listed as the treating physician and her signature appeared on the CMNs associated with counts one through twelve of the indictment.

Seven of the Medicare beneficiaries named in these CMNs testified at trial. While residing in Louisiana or Texas, they or their spouses were approached by marketers—none of whom were Linda Morgan—about obtaining a wheelchair or scooter. They provided their Medicare and/or Medicaid insurance cards and identification to the marketers who copied them on a portable copier. All seven witnesses testified that they had never seen, met, or been treated by Morgan. Five of the witnesses were asked on direct-examination whether they needed a wheelchair to move around their residences and how much time they spent in a wheelchair each day. All five witnesses testified that they did not need a wheelchair to move around their residences and spent no time in wheelchairs. However, the CMNs associated with those five witnesses each indicated that they needed a wheelchair to move around their residences and that they spent eight hours in a wheelchair each day.

Peggy Miller of Palmetto GBA ("Palmetto") testified that Palmetto processed claims for durable medical equipment for Medicare. Durable medical equipment claims were paid when the companies providing the equipment provided documentation to billing companies that transmitted the information to Medicare for payment. Palmetto did not see the documentation for the bills, and the billing companies did

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not vouch for the accuracy of the billing they did on behalf of the equipment provider. Miller also testified that Morgan wrote Medicare in Oklahoma City a letter dated February 26, 2002, to advise them that she was moving to Texas and giving up her unique physician identification number that state medical associations used to track medical services. Morgan's number was deactivated effective May 31, 2002, making her ineligible to be paid through Medicare in Oklahoma.

Miller testified that based on the testimony of the previous witnesses approached for durable medical equipment, Morgan would not be considered a treating physician under Medicare. She could not be a treating physician because she had not seen any of the patients and had not established a diagnosis or course of treatment. Also, Medicare did not pay claims for services provided by physicians who were not licensed in the state where the patient lived or where the treatment took place. Other witnesses had testified that Morgan was not licensed to practice medicine in Louisiana or Texas. However, Miller explained that during 2003 and 2004, the years at issue, Medicare did not check to see if physicians were licensed in the state of residence of the patient whose treatment or equipment was being billed.

Prince Yellowe was in detention pending resolution of health care fraud and other federal criminal charges when he testified at Morgan's trial. Yellowe first became involved in durable medical equipment through the owner of a company billing for motorized wheelchairs, which paid a substantial profit. Yellowe began selling durable medical equipment and used marketers to recruit Medicare recipients who wanted motorized wheelchairs. The marketers would obtain the recipient's information to submit for billing.

Yellowe was introduced to Morgan during 2003. He offered to pay her $250 per prescription that she filled out for Medicare recipients and for filling out other paperwork required for claims. Yellowe paid Morgan in cash once or twice a week. Yellowe brought her patient information on ten to forty patients each time he saw her, but he never took a patient to see her. He handled between 800 and 1000 of Morgan's prescriptions during his relationship with her and paid her between $150,000 and $200,000. Yellowe was familiar with Morgan's signature and identified it on the exhibits associated with counts one through twelve of the indictment.

After he met Morgan, Yellowe became involved with an individual named Victor Davies. Yellowe agreed to provide Davies with prescriptions that he obtained, mostly from Morgan. He charged Davies between $900 and $1200 for prescriptions for which he was paying Morgan $250. Yellowe contracted with Davies to do the billing for his company, Rovic Medical Supply.

Denise Scott, a Special Agent with the Department of Health and Human Services, Office of Inspector General, testified that she interviewed Morgan three times. Morgan told Scott that she was not a licensed physician in the state of Texas because she failed to pass the examination. She admitted that she prepared and sold claim forms to Yellowe for Medicare beneficiaries, and she admitted that she had never seen the beneficiaries for whom she had been preparing forms. Scott identified Morgan's signature on claim forms associated with counts seven, eight, nine, and eleven of the indictment. Morgan told Scott that she had received $40,000 from Yellowe. When Scott told Morgan that Medicare had paid millions of dollars in claims on prescriptions with her physician number, Morgan responded, "I should have been paid more."

Government exhibits indicated that from January 2003 through December 2004,

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$24,076,103.93 in claims were submitted using Morgan's physician identification number. Medicare paid $7,961,885.27 of those claims.

At the close of the government's case, Morgan moved for a judgment of acquittal which was denied.

Morgan testified that she was not licensed to practice medicine in Louisiana or Texas, but she was licensed to practice medicine in Oklahoma. She testified that she did not sign the documents associated with counts one through twelve of the indictment, although she admitted that she did write some prescriptions without seeing patients.

On cross-examination, Morgan testified that the prescriptions associated with counts one through twelve of the indictment were on preprinted forms from her clinic in Oklahoma. In response to a question about whether she had been paid $100,000 for seeing patients while she was unlicensed in Texas, Morgan claimed that some of the patients were from Oklahoma. In response to the follow-up question of whether she saw them in Texas, Morgan responded, "No, I saw them close to the line of Oklahoma." When asked if she knew which side of the line she was on, Morgan responded, "I don't know exactly in relationship whether it was to the left or to the right of the line." Morgan denied signing prescription forms that had been shown to her by Scott.

After questioning Morgan about the charges in the indictment, the government continued to cross-examine her about pretrial release conditions requiring her to refrain from opening any new bank accounts. Morgan admitted that she met her daughter at Compass Bank one day and that she endorsed a check for approximately $179,000 on that visit but denied depositing it and denied opening a new account.

The government called a rebuttal witness, Daniel Wu of Compass Bank, who testified that Morgan and her daughter met with him on October 24, 2005 when Morgan asked him to close two business accounts, to open a new business account, and to transfer the funds from the old accounts into the new account. The new account carried the same name as one of the closed accounts, and Morgan's daughter was to be the signatory. Over a defense objection, Compass Bank records were admitted which included a signature card with Morgan's daughter's name and a copy of a check for $172,506. Wu identified the check as the instrument that was deposited on October 24, 2005, stated that Morgan had handed him the check and stated that he was present when she endorsed it. Morgan told Wu to only put her daughter's name on the new account. Wu testified, "[Morgan] said to make sure that I remembered who she was so that when she took care of her personal matters, that she could—so that I could add her to this new account."

The defense renewed its motion for a judgment of acquittal which was denied.

Morgan was convicted on all thirteen counts and...