U.S. v. Weinstock, s. 96-2474

• Decision Date: 27 May 1998
• Docket Number: Nos. 96-2474,96-2521,s. 96-2474
• Citation: 153 F.3d 272,1998 WL 472344
• Parties: UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Sanford WEINSTOCK, Defendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 272

153 F.3d 272

UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Sanford WEINSTOCK, Defendant-Appellant/Cross-Appellee.

Nos. 96-2474, 96-2521.

United States Court of Appeals Sixth Circuit.

Argued March 13, 1998.

Decided May 27, 1998. ^*

Richard M. Lustig (argued and briefed), Richard M. Lustig Law Office, Birmingham, MI, for Appellant.

Stephen J. Murphy, III (argued and briefed), Office of the U.S. Attorney, Detroit, MI, for Appellee.

Before: RYAN, COLE, and GILMAN, Circuit Judges.

GILMAN, Circuit Judge.

Podiatrist Sanford Weinstock appeals from his jury conviction on twenty-six counts of mail fraud in connection with a scheme to defraud Blue Cross Blue Shield of Michigan ("Blue Cross") by filing claims for medical procedures that he did not perform. The government cross-appeals, claiming that the district court erred in declining to enhance Weinstock's sentence.

For the following reasons, the judgment of the district court is in all aspects AFFIRMED.

I. BACKGROUND

Weinstock practices podiatry in Southeastern Michigan. On June 27, 1995, the government indicted Weinstock on twenty-six counts mail fraud in violation of 18 U.S.C. § 1341. The indictment alleged that as a part of a fraudulent scheme, Weinstock "would perform routine foot care and other services and would bill for treatments and surgical procedures that were not performed on the subscriber/patients, such as arthrocentesis procedures."

Dennis McKee, a fraud investigator for Blue Cross, testified that Blue Cross covers arthrocentesis procedures up to $85.00 for the first procedure and approximately one half of that amount for the second procedure. Arthrocentesis involves inserting a needle that either extracts fluid from or places fluid into a joint. McKee noted that podiatrists generally perform this procedure on the feet and occasionally on the hands of patients.

McKee began investigating Weinstock after receiving a tip from Blue Cross's fraud hot line. He interviewed twenty-nine patients, including the six patients who later testified at the trial. After completing the interviews, McKee gathered the Blue Cross records for these patients. At trial, McKee discussed the contents of these records by using various charts which indicated the diagnosis and treatment performed.

During the cross-examination of McKee, Weinstock's attorney asked who had interpreted the records obtained from Weinstock pursuant to the grand jury subpoena. McKee replied that Weinstock had refused to interpret the records for him. After McKee's response, Weinstock's attorney requested that the jury be excused. He then moved for a mistrial on the basis that McKee had impermissibly commented upon Weinstock's right against self-incrimination under the Fifth Amendment. The district court denied the motion.

Dr. George Gropian also testified on behalf of the government. He defined arthrocentesis to be the puncture of a joint space. Gropian testified that arthrocentesis is usually performed either to withdraw fluid or to treat inflammatory conditions of the joint by injecting certain anti-inflammatory medicines. The government then questioned Gropian about a Physician Practice Profile prepared by and introduced through McKee that compared the number of arthrocentesis procedures billed by Weinstock with the number performed by other podiatrists in the community. After considering the information, Gropian testified that Weinstock billed for many more arthrocentesis procedures than either Gropian or any of his peers. Gropian noted that, on average, he performed three arthrocentesis per day as compared to the ten allegedly performed by Weinstock. Gropian opined that Weinstock would have had to be a specialist in arthrocentesis in order to legitimately perform so many procedures per day.

The government then called the six patients whose treatment was at issue. These patients testified about the medical services they received from Weinstock. As its final witness, the government called Deborah Blair, the FBI agent investigating the case. Through Blair's testimony, the government introduced charts outlining all of the arthrocentesis procedures billed by Weinstock. The charts also separated the billings for the arthrocentesis procedures billed to the six testifying patients during each office visit. During her testimony, Blair conceded that the first arthrocentesis billed for each visit appeared to have actually been performed.

On May 15, 1996, the jury returned a verdict finding Weinstock guilty on each count of mail fraud listed in the indictment. Weinstock then moved for a judgment of acquittal and a new trial on the same grounds asserted in this appeal. On September 9, 1996, the district court denied his motion. The district court held a sentencing hearing on November 14, 1996 and sentenced Weinstock to three years of supervised release, with the first five months to be served in custody. Weinstock was also ordered to pay $29,000 in restitution and $10,000 as a fine. During the sentencing hearing, the government requested a two-level enhancement pursuant to U.S.S.G. § 3B1.3 for Weinstock's alleged use of a special skill to facilitate the crime. The district court initially granted the enhancement, but after additional deliberation reconsidered and rejected the government's request.

On appeal, Weinstock argues that the district court erred in denying his motion for a new trial. Weinstock first argues the district court committed reversible error by admitting into evidence certain charts containing statistical data. Weinstock also claims that the evidence offered at trial impermissibly varied from the indictment. Finally, Weinstock contends that the trial was unfair because his fifth amendment right against self-incrimination was compromised when McKee testified about Weinstock's silence. The government cross-appeals, contending that the district court erred by not enhancing Weinstock's sentence pursuant to U.S.S.G. § 3B1.3

II. ANALYSIS

A. The Evidentiary Questions

1. The Physician Practice Profile. Weinstock challenges the government's introduction of statistical data generated from Blue Cross computers that is referred to as a Physician Practice Profile. This profile listed all of the arthrocentesis procedures billed by Weinstock as well as all other participating podiatrists in the same community. In addition, the government summarized the information in several charts that were also admitted into evidence. Weinstock objected to the introduction of this profile and the accompanying summary charts. On appeal, Weinstock requests a new trial on the following grounds: (1) the profile failed to meet the requirements of Rule 803(6) of the Federal Rules of Evidence because McKee could not testify as to the procedures used in gathering and verifying the information; (2) the introduction of the profile violated Rule 404(b) of the Federal Rules of Evidence by introducing evidence relating to other acts used for the purpose of proving his character "in order to show action in conformity therewith"; and (3) the probative value of the profile was substantially outweighed by the risk of unfair prejudice in violation of Rule 403 of the Federal Rules of Evidence.

i. Rule 803(6) of the Federal Rules of Evidence. As discussed in Redken Laboratories, Inc. v. Levin, 843 F.2d 226, 229 (6th Cir.1988), a business record must satisfy the following four requirements in order to be admissible under Rule 803(6):

(1) it must have been made in the course of a regularly conducted business activity; (2) it must have been kept in the regular course of that business; (3) the regular practice of that business must have been to have made the memorandum; and (4) the memorandum must have been made by a person with knowledge of the transaction or from information transmitted by a person with knowledge.

Id. at 229. The custodian of the records, however, "need not be in control of or have individual knowledge of the particular corporate records ..., but need only be familiar with the company's recordkeeping practices." In re Custodian of Records of Variety Distrib., Inc., 927 F.2d 244, 248 (6th Cir.1991).

Weinstock argues that McKee could not testify as to the nature of the other podiatrists' practices, particularly what percentage of their practices included surgery. He claims that without the ability to cross-examine McKee on this issue, the statistical data was misleading. Moreover, Weinstock contends that McKee had no personal knowledge of whether Blue Cross instituted any measures to ensure the accuracy of the data in the Physician Practice Profile.

Weinstock's argument ultimately goes to the weight to be afforded to the evidence rather than to its admissibility. The Physician Practice Profile consists of data entered in the regular course of business. McKee testified that Blue Cross receives claims from doctors, enters the information from these claims into its computer, and then sends payments to the subscribing doctor. When Blue Cross wants to compare the billing procedures of a particular type of doctor, it can retrieve the information from the computer and compile a profile. Although McKee personally did not know how Blue Cross performed the safety checks, he was aware that Blue Cross had procedures in place to check the accuracy of the records. Finally, McKee noted that profiles are often distributed to doctors to inform them of their standing within their peer group. Blue Cross also regularly uses the profile to identify problems, including the fraudulent billing of claims by individual doctors.

Rule 803(6) does not require that the custodian personally gather, input, and compile the information memorialized in a business record. Records prepared in the course of regularly conducted business activity are particularly reliable because the person preparing the record has an incentive to be accurate. Fed.R.Evid. 803(6) advisory committee's note. The custodian of the...