U.S. v. Tarango

• Decision Date: 07 January 2005
• Docket Number: No. 03-50810.,03-50810.
• Citation: 396 F.3d 666
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Loretta TARANGO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

396 F.3d 666

UNITED STATES of America, Plaintiff-Appellant, v. Loretta TARANGO, Defendant-Appellee.

No. 03-50810.

United States Court of Appeals, Fifth Circuit.

January 7, 2005.

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Mark Twain Roomberg (argued), Midland, TX, Joseph H. Gay, Jr., U.S. Atty. San Antonio, TX, for Plaintiff-Appellant.

Duane Allen Baker (argued), El Paso, TX, for Defendant-Appellee.

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

Before DeMOSS, STEWART and CLEMENT, Circuit Judges.

CARL E. STEWART, Circuit Judge:

The Government appeals from the district court's order granting Lorretta Tarango's motion for a new trial. A jury found Tarango guilty of aiding and abetting her co-defendant, Dipakkumar Patel, in his efforts to defraud various federal health care programs by submitting false billing statements that failed to comply with the governing provisions of those programs. The Government contends that the district court abused its discretion by granting the motion. We disagree, and for the reasons set forth below, affirm the district court's grant of a new trial.

FACTUAL AND PROCEDURAL BACKGROUND

Tarango was charged along with Patel in a two count indictment alleging that they conspired to defraud the Government by engaging in an intricate health care scheme designed to fraudulently bill both federally funded health care insurance programs, and private insurers. The indictment provided that Tarango, while working in her capacity as the office manager for Patel's medical practice, intentionally submitted false Health Care Finance Administration (HCFA) 1500 claim forms.¹ The indictment alleged that Patel would see between 50 and 100 patients per day for only a nominal amount of time, but would intentionally submit false claims that he had met with the individual patient for a much longer period. Apparently, it was not uncommon for Patel to submit a multitude of claims that, if the HCFA 1500 claim forms were read literally, it would have meant that Patel met with patients in excess of 24 hours per day. Patel would submit false diagnoses on the HCFA 1500 claim forms which were provided to health care insurers. Additionally, Patel would often waive deductible payments as an enticement to have patients return for more unnecessary medical visits.

The indictment alleged that Tarango played a role in facilitating Patel's fraudulent conduct. The underlying basis for the indictment stemmed from Patel's relationship with Prakash Alur, a supplier of Durable Medical Equipment (DME), including home oxygen units. Under Medicare's governing provisions, Alur was prohibited from filling in the applicable contents of HCFA 484 Form, Section B.² It was alleged that Alur would improperly provide a draft copy of a Section B form to Tarango who would then transcribe the information onto a new Section B form. Thereafter, Patel would sign the document, falsely certifying the necessity of medical equipment. The indictment alleged that Tarango and Patel, along with Alur, fraudulently attempted to receive in excess of 5.3 million dollars by submitting false HCFA 1500 and 484 claim forms to the relevant health care insurers.

Count One of the indictment charged Tarango and Patel with conspiring to defraud a health care benefit program in violation of 18 U.S.C. § 371.³ Count Two of the indictment charged Tarango and Patel with aiding and abetting a scheme to defraud a health care benefit program in violation of 18 U.S.C. §§ 1347⁴ and 2.⁵

Tarango and Patel were jointly tried. While he did appear for jury selection, Patel absconded prior to the trial's commencement. Moreover, the record reflects that his absence was a major local news story, in that it was the lead headline for the regional newspaper covering the trial. As it appeared that Patel would not be present at the trial, the district court gave the jury a limiting instruction and permitted Patel to be tried in absentia, while Tarango remained present throughout the entire proceeding. Over the course of the trial, the Government brought forth approximately 50 witnesses who testified principally about Patel's conduct, with only five witnesses testifying directly as to Tarango's complicity in the schemes enumerated in the indictment. The jury eventually returned a verdict, finding Tarango not guilty on Count One of the indictment (conspiracy), and finding her guilty on Count Two (aiding and abetting). Tarango's counsel moved for a new trial, pursuant to Federal Rule of Criminal Procedure 33,⁶ on the grounds that she had been prejudiced as a consequence of being jointly tried with Patel.⁷ The district court concurred, agreeing that it became apparent as the trial progressed that the parties should have been severed and granted the motion for a new trial.

The district court noted that, even in instances where multiple defendants are properly joined, a defendant may still be prejudiced by such joinder; and thus, a new trial may be warranted. The district court observed that much of the evidence and witness testimony focused exclusively on Patel, even though he was absent. The court was also troubled by the discordant nature of the evidence against the two defendants, specifically that a limited number of witnesses directly implicated Tarango. The principal role Tarango played, the Government alleged, was that she would copy information provided to her onto the HCFA 1500 and 484 claim forms that were eventually submitted to Medicare. These forms would indicate, for example, that Patel was requesting certain medical equipment for particular patients, even when such equipment was not medically necessary. The Government's case against Patel was so powerful, the court noted, that it was not disputed that Tarango, in her capacity as office manager, had submitted claim forms that contained fraudulent certifications of medical necessity. However, the court also noted that the crime of health care fraud is a specific intent crime and that minimal witness testimony supported the Government's contention that Tarango was, in fact, aware that her conduct necessarily constituted fraud.

Much of the evidence regarding Patel's knowledge of the false diagnoses and improper billing procedures was based on his medical expertise; this evidence was inadmissible against Tarango. The district court commented that this case presented circumstances expressly disfavored in a conspiracy prosecution involving multiple defendants, in that testimony that was allowed to be heard by the jury solely as it pertained to Patel was deemed to be probative as to the allegations against Tarango, even though the testimony was inadmissible against her. In effect, the court found that there was little evidence that Tarango had knowledge of, or had any specific intent to engage in, the conduct of which Patel was convicted. Moreover, the court found that the limiting instruction that it gave the jury was ineffective in insulating Tarango from the prejudicial effect of being joined with Patel.

On appeal, the Government contests the district court's order granting a new trial, arguing that the decision constituted an abuse of discretion. The Government contends that a new trial is inappropriate because there has been no showing that the verdict was the byproduct of any manifest injustice, and suggests instead that the jury's verdict was consistent with the evidence that was presented. In its view, Tarango was not prejudiced because Patel had absconded, and there was no "spillover effect" even if the disproportionate weight of the evidence centered on Patel's conduct, rather than anything that Tarango may have done to facilitate the fraudulent health care scheme.

The Government also avers that it will be forced to recall the multitude of witnesses that were brought forth in the original trial, and that the subsequent trial would likely last another four weeks, thereby placing an additional financial burden on taxpayers.⁸ The Government believes that the district court, by granting the motion for a new trial, ignored testimony indicating that Tarango was cognizant that she was aiding and abetting a scheme to defraud Medicare. Ultimately, the Government suggests that Tarango was undone by her own testimony and that the jury's decision was proper given that Patel was found not guilty on two separate mail fraud counts, and that Tarango was found not guilty on the conspiracy count against her. The Government avers that this indicates that the jury was fully capable of discerning which evidence was admissible and relevant as to the respective defendant. We will thus consider whether the district court erred by granting a new trial.

DISCUSSION

A. Standard of Review

We review a district court order granting a motion for a new trial for an abuse of discretion. See, e.g., United States v. Robertson, 110 F.3d 1113, 1116 (5th Cir.1997); United States v. Dula, 989 F.2d 772, 778 (5th Cir.1993); United States v. Arroyo, 805 F.2d 589, 597 (5th Cir.1986); United States v. Leal, 781 F.2d 1108, 1110 (5th Cir.1986).

B. Federal Rule of Criminal Procedure 33

Granting a motion for a new trial pursuant to Rule 33 is permissible if it is necessitated by the interests of justice. See Robertson, 110 F.3d at 1117. If granted, the Government would simply have a second opportunity to try the accused. See generally Miller v. United States, 224 F.2d 561, 562 (5th Cir.1955). In determining whether to grant the motion, the district court must carefully "weigh the evidence and may assess the credibility of the witnesses during its consideration of the motion for new trial," Robertson, 110 F.3d at 1117 (citing Tibbs v. Florida, 457 U.S. 31, 37-38, 102 S.Ct. 2211, 2215-16, 72 L.Ed.2d 652 (1982)), but must not entirely usurp the jury's function, United States v. Ferguson, 246 F.3d 129, 134 (2d Cir.2001), or simply set aside a jury's verdict because it runs counter to result the district court believed was more...