U.S. v. Weiss

• Decision Date: 05 April 1991
• Docket Number: No. 155,D,155
• Citation: 930 F.2d 185
• Parties: Medicare&Medicaid Gu 39,206, 32 Fed. R. Evid. Serv. 877 UNITED STATES of America, Appellee, v. Steven B. WEISS, Defendant-Appellant. ocket 90-1086.
• Court: U.S. Court of Appeals — Second Circuit

Page 185

930 F.2d 185

Medicare&Medicaid Gu 39,206, 32 Fed. R. Evid. Serv. 877

UNITED STATES of America, Appellee, v. Steven B. WEISS, Defendant-Appellant.

No. 155, Docket 90-1086.

United States Court of Appeals, Second Circuit.

Argued Oct. 25, 1990.

Decided April 5, 1991.

Colleen P. Cassidy, New York City (The Legal Aid Society, Federal Defender Services Appeals Unit, New York City, of counsel), for appellant.

Jon Bevilacqua, Sp. Asst. U.S. Atty., E.D. New York, Brooklyn, N.Y., Kevan Cleary, Asst. U.S. Atty., E.D. New York, Brooklyn, N.Y. (Andrew J. Maloney, U.S. Atty. E.D. New York, Brooklyn, N.Y., of counsel), for appellee.

Joseph M. Lipner, Cambridge, Mass. (Alan M. Dershowitz, Cambridge, Mass., David Zwiebel, Morton M. Avigdor, Agudath Israel of America, New York City, of counsel), for amicus curiae Agudath Israel of America.

Before OAKES, Chief Judge, MESKILL, Circuit Judge, and RESTANI, ^* Judge.

MESKILL, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the Eastern District of New York, Wexler, J., entered after a jury trial, convicting Steven Weiss on counts of mail fraud, mail fraud conspiracy, and making false statements on Medicare and Medicaid forms in violation of 18 U.S.C. Sec. 1341, 18 U.S.C. Sec. 371, and 42 U.S.C. Secs. 1395nn(a)(1) and 1396h(a)(1), respectively. Weiss appeals his conviction on several grounds, specifically the sufficiency of the evidence, bias by the court, prosecutorial misconduct, ethnic bias and several evidentiary rulings. We have already heard the appeal of Weiss' co-defendants Gleicher, Patient Medical Systems Corp. (PMSC) and Health-Med, Inc. (Health-Med), and have affirmed those convictions. United States v. Weiss, 914 F.2d 1514 (2d Cir.1990).

BACKGROUND

The statutory and regulatory scheme for the payment of Medicare claims is set forth in Weiss, 914 F.2d at 1515-17. Familiarity with the payment scheme is assumed for purposes of this opinion.

From the evidence at trial the jury could have found the following facts. Health-Med was a supplier of durable medical equipment including seat lift chairs, to Medicare beneficiaries. Steven Weiss was president of Health-Med from 1983 until 1984. In 1984 Health-Med ostensibly ceased operation, although it continued to submit bills to Medicare carriers through PMSC, also a durable medical equipment supplier, until early 1986. When Health-Med ceased operation all employees were hired by PMSC, and PMSC took over the Health-Med clients. Steven Weiss became a vice president of PMSC, Barry Gleicher was president. Both Health-Med and PMSC were located at 220 Franklin Avenue, Franklin Square, New York.

Weiss and Gleicher first met in August 1983. They discussed the submission of Medicare bills and the use of computers for such billing. They continued these discussions through 1986. Weiss also discussed the submission of Medicare bills with Health-Med and PMSC employees.

Originally, Health-Med submitted Medicare claims for equipment sold to New York clients to the New York metropolitan area carrier, Blue Cross and Blue Shield of Greater New York (NY Blue Cross). In Box 31 of each Form 1500, the official Medicare claim form, the Health-Med address was listed as "220 Franklin Ave, Franklin Square, NY 11010." The reverse side of Form 1500 contained several paragraphs of information. The fifth paragraph on the reverse of Form 1500 stated: "Notice. Anyone who misrepresents or falsifies essential information to receive payment from federal funds requested by this form may upon conviction be subject to fine and imprisonment under applicable federal laws." The last paragraph on the reverse of Form 1500 stated: "I understand that payment and satisfaction of this claim will be from federal and state funds and that any false claims, statements or documents or a concealment of a material fact may be prosecuted under applicable federal or state laws, or both." Each claim form had to be signed by the supplier in Box 25. The signature was accompanied by a sentence stating "I certify that the statements on the reverse [side] apply to this bill and are made a part hereof."

In October 1983 Health-Med began submitting Medicare reimbursement claims for equipment, including seat lift chairs sold to New York residents, to the New Jersey carrier, Prudential Insurance Company (NJ Prudential). Weiss instructed Ms. Estee Weisz, an employee of Health-Med and then PMSC, to file the New York claims in New Jersey "because the reimbursement was higher." Box 31 of Form 1500 submitted to NJ Prudential listed the Health-Med address as "42 Edward Hart Drive, Jersey City, NJ 07303." The telephone number listed was (201) 355-3900. Health-Med's New Jersey stationery listed the same address and also contained an "800" number. At Weiss' direction, the New Jersey address was put on the forms by placing a label with the New Jersey address over the previously typed New York address.

No sales were made from that New Jersey address; Health-Med maintained a warehouse there. All mail was forwarded to Franklin Square, and all calls to the New Jersey number were call-forwarded to a New York number.

NJ Prudential, through a random inspection, discovered Health-Med's filing of New York claims in New Jersey. In a letter addressed to Weiss dated June 7, 1984 NJ Prudential noted that Health-Med had been "submitting Medicare claims for supplies sold or rented to beneficiaries in the State[s] of New Jersey, Illinois and New York." Prudential stated that it only would accept and process claims with a New Jersey point of sale and advised Health-Med to submit other claims to the appropriate states. Prudential also quoted section 3201.B of the Medicare Carriers Manual (Manual) which explains how a provider of services should determine the carrier to whom a claim should be submitted.

In response, Weiss wrote a letter asserting to NJ Prudential that the New Jersey Health-Med office handled sales for the tri-state area and a Service Bureau had been retained in New York to handle data processing and claims printing.

Based on the representations made by Weiss, NJ Prudential found no fraud in Health-Med's misfiling of claims as a result of its investigation. Mrs. Carol Harvey, an employee of NJ Prudential, testified that had NJ Prudential known that Health-Med had no sales people in New Jersey and that all calls to New Jersey were call-forwarded to New York, NJ Prudential would not have paid the claims. Health-Med ceased filing claims with NJ Prudential and NJ Prudential issued its last reimbursement check to Health-Med on February 15, 1985.

Once NJ Prudential refused to accept improperly filed Health-Med claims, PMSC and Health-Med, in March 1985, began to submit claims for equipment including seat lift chairs to the Ohio carrier, Nationwide Insurance Company (Ohio Nationwide). Weiss told a Health-Med employee that Ohio Nationwide paid a higher rate of reimbursement and processed claims more An Ohio Nationwide representative found no medical supplies, equipment or commercial signs at the residence of Mrs. Lifshitz when he visited her. Mrs. Lifshitz was a PMSC and Health-Med employee but did not run a sales office. She made two sales of catheters and related equipment for Health-Med but she never sold any seat lift chairs. Mrs. Lifshitz did not process any PMSC claims submitted to Ohio Nationwide; all processing was done in New York, at Franklin Square.

                quickly than NY Blue Cross.  In Box 31 of Form 1500 the address for both companies as submitted to Ohio Nationwide was "1614 Miramar Court, Cincinnati, OH 45237."    This was the address of Mrs. Lifshitz, a full-time mother of eight.  Health-Med supplied (800) 645-6225 as its telephone number;  PMSC provided (513) 381-0037, a Cincinnati number.  All telephone calls, including those to the Cincinnati number, were automatically forwarded to Franklin Square, New York, and all mail received was also forwarded to New York
                

In June 1985 Weiss spoke with an Ohio Nationwide employee who was inquiring about some of the claims filed. Weiss assured Ohio Nationwide that all contacts with Medicare beneficiaries originated from catalog distribution across the country and that the catalog was distributed from Ohio. Weiss claimed there was some phone contact and it always originated from Cincinnati. During the conversation Mr. Weiss quoted the Manual, specifically section 4105.8, which deals with suppliers who regularly do business outside the carrier's service area. Weiss also stated that PMSC had no sales offices outside of Ohio and West Virginia, then corrected himself, and stated that PMSC had a sales representative in Los Angeles. Weiss asserted that PMSC had no sales officials or representatives in New York.

Ohio Nationwide later discovered four claims improperly submitted to their office. By letter dated July 25, 1985 it returned the misfiled forms and explained that the claims should be submitted to the carrier at the point of sale, New York, regardless of whether the company used centralized billing. Ohio Nationwide also stated that this was in keeping with Medicare policy since 1977. The carrier went on to point out that its investigation indicated that the supplies were sold in the state of residence of the beneficiaries. Ohio Nationwide even supplied Weiss with the New York and Florida carriers so that PMSC could correct its billing.

Ohio Nationwide continued its investigation into PMSC and determined, through a study of PMSC claims and calls to adult homes in New York, that the sales of supplies and equipment including seat lift chairs were made from New York. On August 8, 1985 Ohio Nationwide wrote to Weiss and informed him of its intention to submit all PMSC claims received to NY Blue Cross and suggested that PMSC send the claims there directly.

PMSC, in a letter written primarily by Gleicher but signed by PMSC comptroller Vincent Pontillo, requested that the PMSC claims be returned to...