U.S. v. Vest

• Decision Date: 25 June 1997
• Docket Number: No. 95-3671,95-3671
• Citation: 116 F.3d 1179
• Parties: 47 Fed. R. Evid. Serv. 283 UNITED STATES of America, Plaintiff-Appellee, v. Thomas Bruce VEST, also known as T. Bruce Vest, doing business as Doctors Clinic, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1179

116 F.3d 1179

47 Fed. R. Evid. Serv. 283

UNITED STATES of America, Plaintiff-Appellee, v. Thomas Bruce VEST, also known as T. Bruce Vest, doing

business as Doctors Clinic, Defendant-Appellant.

No. 95-3671.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 13, 1996.

Decided June 25, 1997.

Thomas M. Daly (argued), Office of the United States Attorney, Criminal Division, Fairview Heights, IL, for Plaintiff-Appellee.

Don W. Weber (argued), Collinsville, IL, for Defendant-Appellant.

Before CUDAHY, RIPPLE, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

Dr. Thomas Bruce Vest is, by all accounts, not your ordinary medical doctor. Vest is both an internist and a radiologist--an unusual combination in the field of medicine. Vest claims this combination allowed him to practice a new method of preventive medicine at his $10 million, state-of-the-art Doctors Clinic in Alton, Illinois. The United States, however, claims that Vest used his position as an internist to order unnecessary medical tests conducted at his own clinic, thereby bilking patients, private insurance companies, and the government out of thousands of dollars. A jury convicted Vest on 33 counts of mail fraud under 18 U.S.C. § 1341. On appeal, Vest asserts numerous trial errors. We find that none of his arguments justify reversal, and we therefore affirm the judgment of the District Court.

I. HISTORY

Dr. Vest began conceptualizing his Doctors Clinic back in 1977. Vest envisioned up to 12 doctors working as limited partners at a state-of-the-art diagnostic and treatment center. The clinic was completed in 1985, but Vest was unsuccessful in getting other doctors to invest in the partnership. Vest therefore had only his own primary-care patients and patients referred by outside doctors to finance the clinic's considerable operating expenses. With its MR scanner, CT scanner, two surgical suites, emergency room, medical laboratory, and other sophisticated diagnostic equipment, the clinic had operating expenses ranging between $150,000 and $250,000 per month. Vest advertised heavily to generate walk-in patients, but by 1991, Vest was forced to declare bankruptcy.

In 1993, a federal grand jury indicted Vest on numerous counts of mail fraud. The true bill alleged that Vest had engaged in a scheme to defraud by falsifying medical records and ordering unnecessary medical procedures since 1985. Each count in the indictment referred to a particular patient whom Vest had treated.

At trial, the Government offered three general categories of evidence against Vest. First, the Government offered economic evidence suggesting that one could not legitimately run a clinic like Vest's without more referring doctors. A radiologist and professor of medical economics at Washington University in St. Louis, for example, testified that Vest never had enough referring physicians to make the clinic economically viable. The expert also testified that he had never known another radiologist to practice primary care and make self-referrals for testing. An insurance company employee also testified that Vest, when questioned about excessive billing, angrily responded, "You're damn right I'm going to use this equipment. It's expensive and I have to pay for it somehow."

Second, the Government presented 36 patients who testified that during their visits to the Doctors Clinic, they did not report many of the symptoms and past conditions that Vest recorded on their medical records. On cross-examination, defense counsel used the patients' pre-visit and post-visit medical records to impeach the patients' recollections. If, for example, a patient denied that she reported dizziness to Vest, defense counsel was allowed to cross-examine the witness with medical records showing that the patient reported dizziness either before or after visiting the Doctors Clinic.

Third, the Government presented four medical doctors who testified that many of the tests Vest ordered were medically unnecessary. The first expert was a board-certified radiologist who testified regarding all 36 patients and the procedures Vest performed on them. The other three experts--who were board-certified in surgery and quality assurance utilization review, internal medicine, and rheumatology and internal medicine, respectively--each testified regarding approximately one-third of the patients. The jury therefore heard expert testimony on each count from two Government medical experts. Unlike the cross-examination of the patients, the District Court prohibited Vest from using the patients' pre-visit and post-visit medical records during the cross-examination of the Government experts. Two of the Government experts also testified that Vest's testing did not follow the normal "sequencing" of medical tests, which doctors use to prevent unnecessary testing.

Vest offered three medical experts of his own, including his son who is an orthopedic surgeon and a cousin who is a diagnostic radiologist. The third expert was a board-certified psychiatrist and neurologist. These experts testified that the tests Vest ordered were medically necessary based on Vest's records and that, on most occasions, the tests were necessary even without the allegedly-false symptoms that Vest recorded. Vest himself also testified and denied that he ordered any inappropriate tests. Vest also stated that he accurately recorded the patients' symptoms, thus rebutting the patients' contrary assertions.

After a 55-day trial, a jury convicted Vest on 34 counts and acquitted him on two counts. The District Court later granted Vest's motion for judgment of acquittal on one of the counts. The District Court sentenced Vest to two years in prison and ordered him to pay fines and restitution totaling over $65,000.

II. ANALYSIS

A. Limitation on Defendant's Use of Patient Medical Records

Vest first contends that the District Court abused its discretion when it limited the use of the patients' pre-visit and post-visit medical records. Although the District Court allowed Vest to cross-examine the patients with their pre-visit and post-visit medical records, the District Court did not allow Vest to cross-examine the Government's medical experts with the records. Vest argues that such evidence was vital to showing his innocence.

Whether this evidence was relevant and should have been admitted depends, of course, on what facts are "of consequence to the determination of the action." See Fed.R.Evid. 401. To prove its counts of mail fraud, the Government had to prove that Vest had 1) devised or intended to devise a "scheme or artifice to defraud," and 2) placed something in the mails "for the purpose of executing such scheme or artifice." 18 U.S.C. § 1341. Crucial to the Government's case, therefore, was proving that Vest intended to defraud when he ordered the tests and submitted the bills through the mail. See United States v. Feldman, 711 F.2d 758, 765 (7th Cir.1983) ("An essential element of a mail or wire fraud violation is specific intent to defraud.").

How might one prove such intent? Two routes are readily apparent, either of which would be probative of fraudulent intent. First, one could show that Vest made false entries on the patients' medical records. If Vest truly did falsify these reports, the falsification would be strong evidence of an intent to defraud. The inference, moreover, would be strengthened if the Government could show that without the false medical symptoms, the tests that Vest ordered would have been unnecessary.

The second avenue one could pursue is to show that the medical tests were unnecessary even if Vest's medical records were perfectly accurate. In other words, one might prove fraudulent intent without reference to whether Vest lied on the medical records. An expert might testify, for example, that even assuming Vest was confronted with a patient having the symptoms he recorded, he never should have ordered the tests. If an unquestionably-competent doctor orders tests that his own records indicate were beyond all bounds of normal medical practice, one can reasonably infer that the doctor had a fraudulent intent.

In the indictment, the Government alleged both the falsification of records and the ordering of unnecessary tests, and the Government pursued both avenues of proof at trial. First, to prove that Vest falsified the records, the Government presented 36 patients who testified that when they visited Vest's clinic, they did not suffer from the maladies that Vest recorded. The Government also asked its medical experts a series of hypothetical questions based on the assumption that Vest's records were false. The experts testified that many of the tests Vest ordered would have been inappropriate for patients who did not have the allegedly false symptoms. During cross-examination of the patients, the District Court allowed Vest to use the pre-visit and post-visit medical records to suggest that the patients might have forgotten what symptoms they reported to Vest. The District Court also allowed both the Government and Vest to submit summary charts of the pre-visit and post-visit records to the jury. Vest wanted to use the records to cross-examine the Government experts as well to show that the tests were medically justified. The District Court, however, prohibited the cross-examination of the experts with the records and instructed the jury that the records were admissible only for impeachment of the patients.

Second, to prove that Vest ordered unnecessary tests, the Government asked its experts a second series of hypotheticals based on the assumption that Vest's records were true. ¹ The experts testified that even assuming that Vest was honest with the records, many of the tests he ordered were still medically unnecessary. The District Court again did not allow Vest to cross-examine the experts using either the pre-visit or post-visit records.

The District Court's limitation on the use of the pre-visit...