United States v. Bajoghli

• Decision Date: 11 May 2015
• Docket Number: No. 14–4798.,14–4798.
• Citation: 785 F.3d 957
• Parties: UNITED STATES of America, Plaintiff–Appellant. v. Amir A. BAJOGHLI, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

785 F.3d 957

UNITED STATES of America, Plaintiff–Appellant.

v.Amir A. BAJOGHLI, Defendant–Appellee.

No. 14–4798.

United States Court of Appeals, Fourth Circuit.

Argued: March 25, 2015.

Decided: May 11, 2015.

ARGUED:Paul Nathanson, Office of the United States Attorney, Alexandria, Virginia, for Appellant. Peter Hugh White, Schulte Roth & Zabel LLP, Washington, D.C., for Appellee. ON BRIEF:Dana J. Boente, United States Attorney, Matthew Burke, Assistant United States Attorney, Katherine L. Wong, Assistant United States Attorney, Office of the United States Attorney, Alexandria, Virginia, for Appellant. Joe Robert Caldwell, Jr., Baker Botts LLP, Washington, D.C.; Kirk Ogrosky, Murad Hussain, Arnold & Porter LLP, Washington, D.C., for Appellee.

Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior Circuit Judge.

Opinion

Reversed and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge FLOYD and Senior Judge HAMILTON joined.

NIEMEYER, Circuit Judge:

Dr. Amir Bajoghli, a board-certified dermatologist, was indicted for executing a “scheme or artifice to defraud” when billing public and private healthcare benefit programs during the period from January 2009 through August 2012, in violation of 18 U.S.C. § 1347, and for related offenses. The indictment set forth, in 53 of its 60 counts, particular “executions” of the fraudulent scheme.

On September 30, 2014, several weeks before the scheduled trial date of October 22, 2014, Bajoghli filed a motion to strike as unduly prejudicial certain financial details alleged in Paragraph 50 of the indictment; on October 13, he filed a motion in limine to exclude evidence of post-scheme conduct that the government intended to introduce to show his consciousness of guilt; and on October 20, he filed a motion in limine to exclude all evidence of the scheme that was not directly related to one of the 53 specifically charged executions. The district court granted all three motions, the latter two on the day before the trial was scheduled to begin. On the same day, the government filed this interlocutory appeal, pursuant to 18 U.S.C. § 3731, challenging the rulings.

Because we conclude that the district court's rulings unduly restricted the latitude reasonably necessary for the government to carry its burden of proof, we reverse and remand.

I

Bajoghli is the owner of the Skin and Laser Surgery Center, a medical practice that operates from three offices in Virginia and one in Washington, D.C., and that specializes in skin diseases and the performance of Mohs micrographic surgery

. According to the indictment, Mohs surgery is a “highly lucrative,” “specialized surgical technique for the removal of skin cancer from healthy skin” that is “generally performed on sensitive areas of the body, such as the head and neck, where preservation of healthy tissue and cosmetic appearance are particularly important.”

On August 12, 2014, the grand jury returned a 60–count indictment against Bajoghli, charging: 53 counts of healthcare fraud, in violation of 18 U.S.C. § 1347 ; 6 counts of aggravated identity theft committed in connection with the scheme to defraud, in violation of 18 U.S.C. § 1028A ; and 1 count of obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2). The indictment alleged that over a three-and-one-half year period—from January 2009 through August 2012—Bajoghli “knowingly and willfully execute[d] ... a scheme and artifice to defraud and to obtain, by means of materially false and fraudulent pretenses, ... money owned by and under the custody and control of health care benefit programs, in connection with the delivery of health care benefits, items, and services.” More particularly, seventeen counts alleged executions of the scheme in which Bajoghli routinely diagnosed patients with skin cancer

, even though they did not, in fact, have cancer, and then performed the medically unnecessary Mohs surgery on benign tissue. Fifteen counts alleged executions of the scheme in which Bajoghli directed “unlicensed and unqualified medical assistants” to perform wound closures on the Mohs surgery patients and then billed the healthcare benefit programs as if he personally had performed or supervised the closures, thereby claiming more money than he was entitled to under the reimbursement schedule. Ten counts alleged executions of the scheme in which Bajoghli billed for services that he claimed he had personally performed when, in fact, they had been performed by non-doctors, again allowing him to claim a higher reimbursement than he would have been allowed to claim had he disclosed that non-doctors had performed the services. And eleven counts alleged executions in which Bajoghli submitted bills “for preparing and analyzing [skin pathology] slides” when, in fact, he had personally performed neither service, but instead had hired outside contractors to perform the services at a cost far below the amount he claimed from the programs.

Bajoghli filed three pretrial motions to limit the government's evidence against him at trial: the September 30 motion to strike allegations of certain financial details from Paragraph 50 of the indictment; the October 13 motion in limine to exclude evidence of post-scheme conduct, which the government planned to introduce to show consciousness of guilt; and the October 20 motion in limine to exclude any evidence that was not directly related to one of the 53 executions specifically charged in the indictment.

In the September 30 motion, Bajoghli sought to strike from Paragraph 50 the allegation that he “regularly billed the health care benefit programs $300 to $450 per slide.” Paragraph 50 alleged in full:

The defendant fraudulently submitted claims to patients' health care benefit programs for preparing the permanent section slides and analyzing those slides, when he actually performed neither service. The defendant regularly billed the health care benefit programs $300 to $450 per slide, when he had paid the Ohio company and the dermatopathologist a total of approximately $15 per slide for actually rendering the services.

(Emphasis added). Because healthcare benefit programs reimburse physicians at a predetermined rate, Bajoghli claimed that evidence of what he billed would be unfairly prejudicial because those amounts did not represent what he actually expected to receive from the programs. The district court granted Bajoghli's motion and, in doing so, also excluded, sua sponte, any evidence of “the fees or payments Defendant allegedly made to outside sources to perform” these services—that is, the $15 per slide paid to outside contractors. The court stated that the government could introduce evidence to prove that Bajoghli “would have been paid less (or not at all) had the claims not been materially false,” but that it could not state the specific dollar amounts.

In the October 13 motion, Bajoghli sought to exclude evidence of actions that he had taken after the charged scheme had ended, which the government planned to introduce at trial to show his consciousness of guilt. The government intended to show that after Bajoghli was interviewed by law enforcement, (1) he immediately stopped sending pathology slides to outside contractors; (2) he stopped performing Mohs surgery

without a supporting biopsy; and (3) he deleted scheduling data for past wound repairs that were performed by medical assistants. Bajoghli argued that this evidence was irrelevant; that it was evidence of subsequent remedial measures, which is barred by Federal Rule of Evidence 407 ; and that, if admitted at trial, it would be unfairly prejudicial, in violation of Federal Rule of Evidence 403. The district court did not rule on this motion until it ruled on the October 20 motion.

In the October 20 motion, Bajoghli sought to exclude “volumes of irrelevant, uncharged misconduct” evidence, as he characterized it, that related to his fraudulent conduct during the three-and-one-half year period of the scheme but that was not directly tied to any of the 53 charged executions. He argued that because this evidence was not directly relevant to any of the 53 charged counts, it was therefore improper “[p]ropensity evidence” offered only to show the defendant's bad character, in violation of Federal Rule of Evidence 404(b). He also argued that by waiting until so close to the date of trial to give him notice of its intent to introduce this evidence, the government failed to comply with the notice requirement of Federal Rule of Evidence 404(b)(2).

On October 21, the day before the scheduled trial date, the district court issued an order granting both the October 13 and October 20 motions. In doing so, the court ruled, without explanation, that “[a]ll testimony is ... limited to the 53 charges in the indictment,” thus excluding evidence of Bajoghli's uncharged conduct. And in excluding evidence of the defendant's post-scheme conduct, it gave as reasons that the government had not provided adequate notice of its intent to introduce this “prior ‘bad act’ evidence,” as required by Federal Rule of Evidence 404(b)(2), and, in any event, that the evidence would be excluded under Federal Rule of Evidence 403, as “the probative value of [the post-scheme] evidence is substantially outweighed by the danger of unfair prejudice.”

The government filed this interlocutory appeal, seeking review of the district court's pretrial evidentiary rulings.

II

The government first challenges the district court's ruling limiting “[a]ll testimony ... to the 53 charges of the indictment” and thus excluding evidence of Bajoghli's uncharged conduct in furtherance of the scheme during the three-and-one-half year period. It notes that this ruling is especially debilitating because Bajoghli's criminal intent is hotly contested in this case, and it therefore contends that it needs to rebut the defense that the charged transactions were “isolated mistakes” by demonstrating that it did not merely “cherry pick” aberrant...