United States v. Gieger

• Court: Court of Appeals for the Fifth Circuit
• Decided: October 19, 1999
• Docket: 98-60137
• Status: Published

Opinion

REVISED, October 19, 1999

UNITED STATES COURT OF APPEALS For the Fifth Circuit

___________________________

No. 98-60137 ___________________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

JEFFERY W. GIEGER; TRACIE L. GIEGER,

Defendants-Appellants.

___________________________________________________

Appeals from the United States District Court For the Southern District of Mississippi ___________________________________________________ September 24, 1999 Before REYNALDO G. GARZA, HIGGINBOTHAM, and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Defendants-Appellants Jeffery W. Gieger and Tracie L. Gieger

(the “Giegers”) challenge on a number of grounds their convictions

for conspiracy to submit false claims to Medicare in violation of

18 U.S.C. § 286. For the reasons that follow, we affirm their

convictions. However, we vacate their sentences and remand this

case for resentencing.

I.

In 1992, the Giegers founded Gieger Transfer Service,

Inc./Gieger Ambulance Service (“GAS”) to transport both emergency

and non-emergency patients. GAS expanded rapidly and by the time

the company was sold in 1997, GAS operated over forty ambulances in

twelve counties in rural Southeastern Mississippi. GAS transported a large number of Medicare patients. After

1993, GAS filed electronic reimbursement requests with Medicare.

GAS’s initial attempts to obtain reimbursement from Medicare did

not go smoothly. In response to this problem, the Giegers began

misrepresenting to Medicare that all of GAS’s non-emergency

transports were for “bed-confined” patients. Consistent with this

billing practice, the Giegers instructed their paramedics and

emergency medical technicians not to use the word “ambulatory” on

the patient transport reports.

In December 1996, the Federal Bureau of Investigations (“FBI”)

began investigating GAS’s billing practices. After FBI Special

Agent Gregory Deegan conducted an in-depth investigation, the

Giegers were charged in a fifty-seven count indictment. This

indictment included charges of Medicare fraud, conspiracy to submit

false claims, money laundering, transmitting money instruments or

funds derived from specified unlawful activities, and a number of

similar charges. In October 1997, the Giegers were tried on forty-

six counts of this indictment. The jury returned a guilty verdict

on only Count 1--conspiracy to submit false claims to Medicare in

violation of 18 U.S.C. § 286.1

At sentencing, the district court enhanced the Giegers'

sentences because the Geigers abused a position of trust and the

conspiracy involved a “vulnerable victim.” After the enhancement,

the district court sentenced the Giegers to eighty months in

1 Section 286 makes it illegal for any person to “enter into any agreement, combination or conspiracy to defraud the United States, or any department or agency thereof, by obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim.” 18 U.S.C. § 286.

2 prison, three years of supervised release, a fine of $12,500, and

ordered restitution in the total amount of $228,917. In this

appeal both Jeffery and Tracie Gieger challenge their convictions

and sentences.

II.

Tracie Gieger makes a number of arguments on appeal. Jeffery

Gieger adopts these arguments and also makes arguments of his own.

We turn first to those arguments raised by Tracie Gieger.

A.

Tracie Gieger first contends that the district court erred in

denying her motion for judgment of acquittal, or in the alternative

a new trial, on Count 1, the conspiracy count, because of the

jury’s failure to convict her on any substantive counts.

In this Circuit, however, the law is clear that inconsistent

verdicts are not a bar to conviction so long as there is sufficient

evidence to support the jury’s determination of guilt. See, e.g,

United States v. Sylvester, 143 F.3d 923, 930 (5th Cir. 1998)

(inconsistent verdicts not a bar to conviction); United States v.

Scurlock, 52 F.3d 531, 537 (5th Cir. 1995) (jury can render

inconsistent verdicts, even when inconsistency is the result of

mistake or compromise). This argument is without merit.

B.

Tracie Gieger next argues that the district court made a

number of erroneous evidentiary rulings that require reversal of

her conviction. These include: improperly restricting defense

counsel’s cross-examination of key prosecution witnesses;

improperly overruling defense counsel’s objections during the

3 prosecution’s direct examination of key witnesses; improperly

excluding the testimony of defense expert witness Archie Lancaster;

and imposing more stringent restrictions on the defense than on the

Government in examining witnesses. After examining the record, we

are satisfied that the district court did not abuse its discretion

in these challenged rulings.

C.

Mrs. Gieger also makes two challenges to her sentence. She

first contends that the district court erred in enhancing her

sentence and that of her former husband based on the “vulnerable

victim” and “position of trust” provisions in the Sentencing

Guidelines.

Section 3A1.1(b) of the Sentencing Guidelines permits a two

level enhancement of a defendant’s base offense level where “the

defendant knew or should have known that a victim of the offense

was unusually vulnerable due to age, physical or mental condition,

or that a victim was otherwise particularly susceptible to the

criminal conduct.” U.S. Sentencing Guidelines § 3A1.1(b). In this

case, the district court enhanced the Giegers’ sentences because

“the victims of this offense were unusually vulnerable due to age,

physical or mental condition and that the government as a victim

was otherwise particularly susceptible to the criminal conduct

committed by the defendant.” The Giegers contend that this

enhancement was not warranted because the patients were not victims

and the victim (the United States Government) was not vulnerable.

We agree.

First, the patients were not victims of the Giegers’ fraud

4 scheme. In contrast to other medical fraud cases within this

Circuit in which patients suffered harm or at least potential harm

from the fraudulent scheme,2 the patients here suffered no harm.

Instead the patients benefitted from the scheme--they received a

free ride to the hospital.

If the patients had paid money through a deductible,

copayment or similar charge, they might be considered victims of

the fraud. See United States v. Bachynsky, 949 F.2d 722, 735 (5th

Cir. 1991) (patients were victims in part because they paid

personally for bogus treatment through copayments and deductibles).

The Government, however, points to no evidence that the GAS

patients ever made such payments. In fact, as part of the

fraudulent scheme, GAS promised patients that they would not be

required to make any payment. At oral argument, the Government

conceded that the patients were probably not victims of the scheme.

Because they suffered no medical harm and no financial harm, the

patients cannot be considered victims of the Giegers’ fraudulent

scheme.

We turn now to whether the vulnerable victim enhancement can

be applied to the government. Section 3A1.1 of the Sentencing

Guidelines is leveled at criminals who take advantage of

individuals who are more vulnerable than the average members of

society, such as the elderly, the young, or the sick. See, e.g.,

2 See United States v. Burgos, 137 F.3d 841, 844 (5th Cir. 1998) (Patients “were often admitted to the hospital needlessly or their stays in the hospital were extended beyond what was necessary . . . .”); United States v. Bachynsky, 949 F.2d 722, 735 (5th Cir. 1991) (Unnecessary treatment was frequently ineffective and in some case actually harmful to the patients).

5 United States v. Moree, 897 F.2d 1329, 1336 (5th Cir. 1990). The

United States government simply does not fall in the same category

as these more vulnerable members of society. If the United States

government is a vulnerable victim, it is hard to imagine a victim

who would not be considered vulnerable.

The prosecution relies almost entirely on a footnote in United

States v. Bachynsky, 949 F.2d 722 (5th Cir. 1991), in support of

this enhancement. In that opinion, a panel of this Court stated,

in dicta, “we note that in this particular case the insurance

companies and the Department of Defense may themselves be deemed

‘vulnerable’ victims because of their ‘particular susceptibility’

to this type of fraud.” Id. at 736 n.10. We find this dicta

unpersuasive and contrary to section 3A1.1’s text and we choose not

to follow it. Instead, we are guided by the rationale underlying

this Court’s opinions in Moree, 897 F.2d at 1335-36 (Section 3A1.1

would be triggered by the robbery of a blind, elderly, or

physically disabled shopkeeper but not by theft from a bank, even

if the thief was aware of a security breach that rendered the bank

especially vulnerable), and in United States v. Burgos, 137 F.3d

841, 844 (5th Cir. 1998), in which we stated that insurance

companies “are not, and could not have been found to be, vulnerable

victims.” Both the text of section 3A1.1 and these cases persuade

us that the United States government cannot be considered a

vulnerable victim. The district court therefore erred in enhancing

the Giegers' sentences on this basis.

Tracie Gieger also argues that the district court erred by

enhancing the Giegers’ sentences under section 3B.1.3 of the

6 Guidelines for abusing a position of trust. This section provides

a two-level enhancement for defendants who have “abused a position

of public or private trust . . . in a manner that significantly

facilitated the commission or concealment of the offense.”

U.S.S.G. § 3B1.3. We agree with the Government that this argument

is barred by United States v. Iloani, 143 F.3d 921, 922-23 (5th

Cir. 1998). In Iloani we applied the enhancement to a chiropractor

convicted of defrauding insurers. Id. at 923. We held that a

chiropractor maintains a position of trust with the insurance

companies that he billed. Id. at 923. In the instant case, the

defendants carried out their fraud by abusing a similar position of

trust with medical insurers. Therefore, under Iloani, the district

court did not err in enhancing the Giegers’ sentences under section

3B1.3.

D.

Tracie Gieger’s final argument challenges the district court’s

order requiring that the Giegers pay $228,917 in restitution to

Medicare. She contends that because she was acquitted on all the

substantive counts, she cannot be required to pay restitution on

the conspiracy count. She also argues that because the district

court did not provide a specific factual basis for the restitution

order, the order must be vacated.

We find her arguments unpersuasive. The conspiracy count is

an adequate basis for the restitution order. The court based the

amount of the restitution order on the amount that Medicare paid on

the fraudulent billings. The restitution order has sufficient

support.

7 III.

We now turn to the additional arguments raised by Jeffery

Gieger.

Jeffery Gieger contends that his conviction cannot be upheld

because the evidence is legally insufficient. He argues first that

the Medicare guidelines are vague, confusing and conflicting and

the district court erred in rejecting his argument that as a matter

of law he did not knowingly submit false claims. We are not

persuaded. The words “bed confined” were not so vague or confusing

that Gieger was unable to discern their meaning.

We also reject Jeffery Gieger’s argument that he did not have

the state of mind necessary for conviction because he was merely

following the instructions provided by United Healthcare and

relying on the advice of his lawyer. The jury was entitled to find

that the Giegers had the requisite state of mind to commit the

offense.

Jeffery Gieger’s final argument on this issue is that his

claims were not “false” within the meaning of 18 U.S.C. § 286

because the two patients that the Government used at trial to

demonstrate the fraud were entitled to reimbursement of their

transportation charges by Medicare even if they were not bed-

confined. Gieger argues that both patients the government

presented as witnesses, Henry Bush and Annie Scott, were entitled

to reimbursement for their ambulance transportation on the

alternative ground that the transportation was medically necessary.

He further contends that the district court erred in refusing to

8 permit the Giegers to submit evidence demonstrating their

eligibility on this alternative ground.

According to Mr. Gieger’s theory, a defendant cannot violate

section 286 so long as he transports patients whose transportation

is covered by Medicare because it is medically necessary, even if

he bases his reimbursement claim on another reason -- even a false

or fraudulent one.

We have found a number of cases rejecting arguments seeking a

similar construction of the companion statute to section 286 -- 18

U.S.C. § 287, the substantive federal false claims statute. Courts

have explained that because the language of section 287 (like 286)

covers not only those who submit “fraudulent” claims, but also

those who submit “false” or “fictitious” claims, a defendant may

not escape the reach of the statute by arguing that the government

was not actually defrauded. While a claim may not be fraudulent

under this section unless the defendant intends to obtain funds by

fraud from the federal government, a claim is false whenever it is

“known to be untrue by the person making it or causing it to be

made.” United States v. Milton, 602 F.2d 231,233 (9th Cir. 1979).

For example, in United States v. Belcker, 657 F.2d 629 (4th

Cir. 1981), the defendant contended that the trial court erred both

in excluding evidence that the government “got it’s money’s worth”

for consulting services performed by the defendant and in failing

to instruct the jury that to convict it must find that the

government did not receive adequate value for the work performed by

the defendant. Id. at 634. The Fourth Circuit rejected these

arguments, explaining that section 287, like 286, “is phrased in

9 the disjunctive, and a conviction under that statute may therefore

be based on proof that a claim submitted to the government is

either false, fictitious or fraudulent.” Id.. Accordingly, the

court held that regardless of whether the government was actually

defrauded, the defendant had violated section 287 by knowingly

submitting inaccurate claim forms. Id. at 635. Accord United

States v. Milton, 602 F.2d 231, 233 (9th Cir. 1979)(statement need

only be false in order to violate section 287); cf. United States

v. Leahy, 82 F.3d 624, 634 n.11 (5th Cir. 1996)(holding that

defendant contractor violated section 286 even though the false

claims were irrelevant to the total amount paid by the government

to the contractor).

Furthermore, as a number of courts have recognized, Congress

fashioned the federal false claim statutes to punish not only those

who would cheat the federal government, but also those who would

“mislead it in the administration of its programs.” United States

v. White, 27 F.3d 1531, 1535 (11th Cir. 1994)(quoting United States

v. Johnson, 284 F. Supp. 273, 278 (W.D. Mo. 1968),discussing

section 287). See also United States v. Maher, 582 F.2d 842, 847-8

(4th Cir. 1978) (“The plain purpose of § 287 is to assure the

integrity of claims and vouchers submitted to the government.”);

Pina v. United States, 165 F.2d 890, 893 (9th Cir. 1948)(“the

contemplated infliction of monetary loss is not a necessary

ingredient of an intent to defraud the United States”). If we

accepted Gieger’s argument on this point, Medicare’s task of

determining which claims are covered and reimbursable would be an

impossible one. The reimbursement form would be useless for this

10 purpose because the agency could not rely on the form to determine

coverage. We decline to endorse such an interpretation of sections

286 and 287.

Accordingly, we conclude that the evidence is legally

sufficient to support the Giegers’ convictions. We also conclude

that the district court did not abuse its discretion in excluding

the Giegers’ evidence related to this argument.

Jeffery Gieger also contends that his conviction must be

overturned due to the inadequacy of the record. In support of his

claim, he observes that the district court failed to place on the

record seventy-two bench conferences, most of the bench conferences

from the trial.

Clearly many of these bench conferences should have been

placed on the record. Whether this error mandates reversal,

however, is a separate issue. The law relating to incomplete

records in this Circuit is set forth in United States v. Selva, 559

F.2d 1303 (5th Cir. 1977). Under Selva, an appellant must

generally show prejudice from omissions or errors in the record

before such lapses require reversal. Id. at 1305. If the

appellant, however, is represented on appeal by an attorney other

than the one who represented him at trial, no showing of prejudice

is required. Id. All that is required is that the appellant

demonstrate that the missing record portions are “significant and

substantial.” Id. at 1306.

The Government contends that Jeffery Gieger’s trial counsel,

11 Sam Wilkins, is still his counsel because the court has not

released him from that position. But Wilkins did not file the

Notice of Appeal or make any other appearance in this court. Nor

does his name appear on any of the briefs. We must therefore

conclude that Jeffery Gieger is represented by new counsel on

appeal. For that reason, we examine the record and attempt to

decipher what took place at the missing bench conferences to

determine if they are “significant and substantial.” While the

entire context of all the bench conferences is not entirely clear,

we can determine the following. Many of the bench conferences were

administrative in nature. These conferences are not important to

the record on appeal. Some of the conferences were permitted to

allow further argument on evidentiary objections. Objections to

the court’s rulings following these bench conferences makes the

arguments leading up to the rulings unimportant to the record on

appeal. Other missing bench conferences concern counts on which the

Giegers were acquitted. In sum, while we agree with Jeffery Gieger

that many of these bench conferences should have been placed on the

record, we are not convinced that these bench conferences are

substantial and significant. We therefore decline to reverse the

Giegers’ convictions on this ground.

Conclusion

For the reasons stated above, we affirm Appellants’

convictions. We affirm Appellants’ sentence with one exception.

We agree with Appellants that their sentences should not have been

enhanced under the “vulnerable victim” provision of the Sentencing

12 Guidelines. Therefore, we vacate Appellants’ sentences and remand

this case to the district court for resentencing.

AFFIRMED in part, VACATED in part, and REMANDED.