United States v. Shoemaker, s. 12–60754

• Decision Date: 25 March 2014
• Docket Number: Nos. 12–60754,12–60791.,s. 12–60754
• Citation: 746 F.3d 614
• Parties: UNITED STATES of America, Plaintiff–Appellant v. Raymond Lamont SHOEMAKER, also known as Ray Shoemaker; Earnest Levi Garner, JR., also known as Lee Garner, Defendants–Appellees United States of America, Plaintiff–Appellee v. Raymond Lamont Shoemaker, also known as Ray Shoemaker, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

746 F.3d 614

UNITED STATES of America, Plaintiff–Appellant

v.Raymond Lamont SHOEMAKER, also known as Ray Shoemaker; Earnest Levi Garner, JR., also known as Lee Garner, Defendants–Appellees United States of America, Plaintiff–Appellee

v.Raymond Lamont Shoemaker, also known as Ray Shoemaker, Defendant–Appellant.

Nos. 12–60754, 12–60791.

United States Court of Appeals, Fifth Circuit.

March 25, 2014.

Clayton Adair Dabbs, Robert J. Mims, Assistant U.S. Attorney, U.S. Attorney's Office, Oxford, MS, for Plaintiff–Appellant.

Michael A. Heilman, Christopher Thomas Graham, Heilman Law Group, Jackson, MS, for Plaintiff–Appellant, for Raymond Lamont Shoemaker, also known as Ray Shoemaker.

Christi Rena McCoy, McCoy Law Firm, Philip Halbert Neilson, Esq., Neilson Law Firm, Oxford, MS, for Earnest Levi Garner, Jr., also known as Lee Garner.

Appeals from the United States District Court for the Northern District of Mississippi.

Before STEWART, Chief Judge, and GARZA and SOUTHWICK, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Earnest Levi Garner (“Garner”) and Raymond Lamont Shoemaker (“Shoemaker”) stood trial for various federal crimes arising from a bribe and kickback scheme involving a community hospital. The crimes included conspiracy, federal program bribery, paying and receiving healthcare kickbacks, embezzlement, and making false statements to federal agents. After the jury returned guilty verdicts on all counts, the district court entered judgments of acquittal and, in the alternative, granted new trials as to several of the counts. We resolve two appeals in this opinion: In No. 12–60754, the Government appeals the district court's judgments of acquittal and grants of new trials for Garner and Shoemaker, and in No. 12–60791, Shoemaker appeals the district court's denial of his motion for judgment of acquittal or new trial on the remaining counts, of which he alone was convicted. We vacate the district court's judgments of acquittal and grants of new trials, affirm Shoemaker's other convictions, and remand for reinstatement of the jury verdict and for sentencing.

I

This case concerns a bribe and kickback scheme involving Tri–Lakes Medical Center (“TLMC”), a community hospital in Panola County, Mississippi.¹ In 2004, when the County owned 60% of TLMC, the County's Board of Supervisors appointed David Chandler (“Chandler”) to serve as the Chairman of TLMC's Board of Trustees. Chandler had been the County Administrator for almost twenty years, and he was appointed to oversee the sale of the hospital on behalf of the Board of Supervisors. As Chairman, Chandler scheduled and set the agenda for hospital board meetings, contacted department heads for reports, and regularly dealt with Shoemaker, then TLMC's Chief Operating Officer (“COO”).

Garner owned and operated a nurse staffing business known as Guardian Angel Nursing and, later, as On–Call Staffing, which provided temporary nurses to area hospitals. In early 2005, TLMC entered into a contract with Guardian Angel Nursing after Chandler had arranged two meetings between company representatives and Shoemaker. Soon thereafter, Chandler requested that Garner pay him $5 for every nursing hour his company billed at TLMC. According to Chandler, the $5 per hour was in return for Chandler's ensuring that TLMC used Garner's company for contract nurses and paid Garner's bills in a timely manner. About once a month, Garner would push Chandler to increase hours for his nurse staffing business at TLMC, and Chandler would lobby Shoemaker accordingly. A few months after this arrangement commenced, Chandler signed a board authorization giving Shoemaker a $50,000 raise. Upon Garner's request, Chandler created invoices that did not directly correlate to billed hours but rather looked as if they were for consulting or tax services; the memo “Accounting Fees” or “Accounting Services” appeared on checks from Garner.

In total, Garner paid Chandler $268,000 as a result of the agreement, and TLMC paid Garner's company approximately $2.3 million for nursing services. Shoemaker's executive assistant testified that Chandler, on behalf of Garner's company, regularly delivered invoices to and picked up checks directly from Shoemaker's office, while other vendors had no such billing practices. Moreover, Garner's nursing company was typically the first vendor paid by TLMC. Over the course of one year, when TLMC engaged a total of seven nursing companies, Garner's company received 40% of the hospital's business.

Meanwhile, in mid–2005, Robert Corkern (“Corkern”) contracted to purchase TLMC. However, in order to secure financing, he needed a nonprofit entity that would qualify for a loan backed by the United States Department of Agriculture (“USDA”). Shoemaker offered Corkern the use of a non-profit under his control called Kaizen, and Corkern transferred to Kaizen his right to purchase TLMC. Subsequently, Kaizen's name was changed to Physicians and Surgeons Hospital Group (“PSHG”).

In the fall of 2005, Chandler signed on behalf of TLMC a contract providing PSHG with rights to purchase the hospital from Panola County and the City of Batesville. Thereafter, PSHG purchased TLMC for approximately $27 million. Once the sale was finalized, Chandler left the Board, and Shoemaker was promoted from COO to Chief Executive Officer (“CEO”).

Soon thereafter, Shoemaker began claiming that Garner and Corkern owed him money. Just prior to the sale of the hospital, Chandler had arranged a meeting between Shoemaker and Garner at the Como Steakhouse. During the meeting, Garner excused Chandler from the table, whereupon Garner and Shoemaker conversed privately for approximately thirty minutes. After the sale of the hospital, Shoemaker demanded $25,000 from Chandler, claiming that Garner had “promised” that sum in return for Shoemaker's maintaining the flow of nursing hours and payments to Garner's business. Chandler recounted this conversation to Garner, who initially did not respond. Chandler then proposed that he would begin paying Shoemaker $2,000 per month, and Garner repliedthat he did not care what Chandler did as long as the money came out of Chandler's $5–per–hour fee. Chandler testified that he ultimately paid Shoemaker a total of $12,000 over six months.

Later, Shoemaker demanded that Corkern pay him $250,000 for providing use of the non-profit to acquire TLMC. Corkern refused, explaining that it was illegal to sell a non-profit entity. There was no mention in any sale or loan documents of any debt owed by Corkern to Shoemaker regarding the sale of the non-profit, and Corkern testified that Shoemaker had not demanded such payment initially.

Shoemaker ultimately secured $250,000, though not from Corkern. While the hospital was applying to GE Capital for a line of credit that had to be approved by the USDA, Shoemaker signed a letter to the USDA stating that the hospital desperately needed working capital for its day-to-day operations. The letter did not indicate that Shoemaker would also pay himself using the funds. That same month, Shoemaker signed a statement certifying that the loan would be used only for the hospital and would not be applied toward the obligations of any third parties or affiliates. On the day the line of credit was issued, Shoemaker went to TLMC's business office and had a check for $250,000 issued to Kaizen. No one in the business office knew that Shoemaker had previously owned Kaizen. When TLMC received its first draw under the GE line of credit, the $250,000 was replenished. Shoemaker later presented an invoice to the business office indicating that the payment to Kaizen was for “organizational costs.” Shoemaker subsequently deposited the check into a bank account that he controlled.

In October 2009, Federal Bureau of Investigation (“FBI”) Special Agent Shannon Wright interviewed Shoemaker. At first, Shoemaker denied receiving $10,000 in checks from Chandler. Then he said he was “99% sure” he had not received any checks but that if he had, he would like to see them. Afterward, Shoemaker and Chandler agreed that they would call the payments a loan. Accordingly, the next time Agent Wright interviewed Shoemaker, he explained that Chandler had loaned him $10,000.

Chandler later began cooperating with the government and recording his consensual conversations with Garner. In one such conversation, Garner wondered if Chandler's payments to Shoemaker were “gonna be called bribery.” They agreed to characterize the $5–per–hour arrangement as payments for “accounting” and “professional” services, and Garner insisted that the bill not disclose the arrangement or otherwise correspond with nursing hours. Later in that conversation, Garner said, “You know I told you ... I ... I didn't need to know who you paid ... what you did.” Although Chandler's testimony was inconsistent as to the meaning of Garner's statement, he ultimately explained that it referred to his payments to Shoemaker, and to Garner's earlier remark that he did not care what Chandler did with his $5–per–hour fee.

Shortly thereafter, Agent Wright and USDA Special Agent Keith Luke interviewed Garner. They asked Garner about the payments to Chandler, and Garner explained that certain larger payments constituted a “finder's fee” for securing business at TLMC. He also confirmed that he paid $5 for every hour that his company billed and collected at TLMC.

Garner and Shoemaker were subsequently charged in twelve counts of the Superseding Indictment. Both Garner and Shoemaker were charged with two counts of conspiracy in violation of 18 U.S.C. § 371: Count One charged conspiracy to violate 18 U.S.C. § 666 by bribing Chandler and Shoemaker, and Count Four charged conspiracy to violate 42 U.S.C. § 1320a–7b, based on the same facts alleged in Count One. Garner alone was charged in Count Two for violating 18 U.S.C. § 666 by bribing Chandler, and in Count Five for violating 42 U.S.C. § 1320a–7b, based on the same bribes. Shoemaker...