United States v. Richard Pergler

233 F.3d 1005, 2000 U.S. App. LEXIS 30453, 2000 WL 1770673
CourtCourt of Appeals for the Seventh Circuit
DecidedDecember 4, 2000
Docket99-3879
StatusPublished
Cited by39 cases

This text of 233 F.3d 1005 (United States v. Richard Pergler) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Richard Pergler, 233 F.3d 1005, 2000 U.S. App. LEXIS 30453, 2000 WL 1770673 (7th Cir. 2000).

Opinions

BAUER, Circuit Judge.

Richard Pergler was convicted of mail fraud, money laundering, and submitting false claims in connection with a scheme to fraudulently bill Medicare for incontinence products. Before his indictment, Pergler employed attorney Paul DeMuro of La-tham & Watkins to counsel him regarding Medicare coverage for some of the products he sold. After his indictment, Pergler employed two other Latham & Watkins attorneys, Herve Gouraige and Michael Leib, to defend him. In this direct appeal, Pergler contends that his trial counsel was forced to choose between vigorously representing him and. protecting their colleague, DeMuro. This conflict of interest, Pergler argues, caused Gouraige and Leib to violate his Sixth Amendment right to effective assistance of counsel. Pergler urges us to vacate his convictions and remand the case for a new trial. We decline to do so.

I. Background

Pergler was convicted of selling non-reimbursable adult incontinence products, notably adult diapers and “fempouches” to Medicare patients, and fraudulently billing the products to Medicare. Medicare assigns products to an HPPC code group, which, among other things, indicates whether the product may be billed to Medicare. Adult diapers are assigned to a non-billable code, A4554. Pergler, however, billed “belted undergarments” and “briefs” to Medicare under billable code A4328, arguing that their status fell into a gray area.

In 1994, Pergler became aware of the fempouch, a diaper-like incontinence product with an insert to collect urine samples. At the time Pergler began selling the fem-pouch, it was a new product with an undetermined billing status. The inventor of the fempouch informed Pergler that his attorney, Joy Thomas, was working to determine the billing status of the product. Pergler retained Paul DeMuro, a Latham [1008]*1008& Watkins attorney from California, to advise him about billing the fempoueh to Medicare. DeMuro, with Thomas and Medicare expert Ron Nicholson, participated in two conference calls regarding the billable status of the fempoueh. Nicholson opined that the fempoueh was billable to Medicare, but urged Pergler to seek a final determination of its billable status from Medicare. Pergler billed the fern-pouch to Medicare before receiving a final determination.

In October of 1994, the government investigated and indicted Pergler for Medicare fraud. After Pergler’s indictment, he retained Herve Gouraige and Michael Leib, both of Latham & Watkins, as defense counsel. One week before trial, Gou-raige and Leib informed the government that they intended to mount a good faith defense. In support, they planned to call Thomas, counsel to the fempoueh manufacturer, and question her about the two conference calls.

The government was concerned that Thomas’ testimony could create a potential conflict of interest for Pergler’s attorneys. Specifically, the government theorized that Pergler relied on Thomas’ advice of counsel. The government feared that if the defense elicited Thomas’ testimony about the conference calls, it would thereby waive Pergler’s attorney-client privilege with DeMuro. If the government then called DeMuro as a witness, the defense attorneys would be in a conflict of interest position when they cross examined DeMu-ro.

The day before trial, the government filed a memorandum raising these attorney-client privilege and conflict of interest issues. The government sought to determine whether Thomas’ testimony about the two conference calls would destroy Pergler’s attorney-client privilege with De-Muro. The district court ruled that Thomas’ proposed testimony would not waive Pergler’s attorney-client privilege with De-Muro because the calls were not confidential, and thus were not subject to the privilege.

After the court’s ruling, the government asked that Pergler waive his potential advice-of-counsel defense. Attorney Gou-raige indicated to the court that he had counseled Pergler about the waiver and that Pergler waived his advice-of-counsel defense. The court engaged in a colloquy with Pergler during which it briefly explained . the potential conflict of interest and confirmed that Pergler indeed wanted to waive his advice-of-counsel defense.

The government then requested that the court appoint independent counsel to advise Pergler of his rights. Again, in a brief colloquy with the court, Pergler indicated that he was aware of his right to discuss the waiver with independent counsel. Pergler, however, declined the court’s offer to allow him time to consult with another attorney.

At trial, Pergler’s counsel called only one witness on Pergler’s behalf, the fem-pouch manufacturer. The defense did not call Thomas or DeMuro. Pergler alleges that his attorneys’ failure to call these witnesses stemmed from their conflict of interest. Further, Pergler argues that the conflict of interest forced the defense to truncate its cross-examination of Nicholson.

Pergler, with new counsel, filed a direct appeal claiming that his Latham & Watkins defense team denied him effective assistance of counsel as a direct result of their conflict of interest. Pergler chose not to use 28 U.S.C. § 2255 to bring his ineffective assistance of counsel claim; therefore, we do not have the benefit of a developed factual record.

II. Discussion

Pergler argues that the district court violated his Sixth Amendment right to effective assistance of counsel because it allowed Gouraige and Leib to defend him despite an actual or potential conflict of interest. The defendant bears the burden [1009]*1009of proof for an ineffective assistance of counsel claim because we adopt a strong presumption that counsel was effective. See United States v. Herrera-Rivera, 25 F.3d 491, 495 (7th Cir.1994) (citing Strickland v. Washington, 466 U.S. 668, 690, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)).

To prevail, Pergler must prove that (1) his counsel’s performance was deficient and (2) the failure to provide adequate representation prejudiced his defense. See Cabello v. United States, 188 F.3d 871, 875 (citing Strickland, 466 U.S. at 687, 104 S.Ct. 2052). However, when, as here, the claim is based on a conflict of interest, the defendant can satisfy the prejudice element by proving either that his counsel (1) labored under an actual conflict of interest, see Strickland, 466 U.S. at 692, 104 S.Ct. 2052, or (2) was subject to a potential conflict of interest which the court was or should have been aware of, and which it failed to address adequately, see United States v. Fish, 34 F.3d 488, 492 (7th Cir.1994) (citing Holloway v. Arkansas, 435 U.S. 475, 484-91, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978)). We review ineffective assistance of counsel claims de novo. See Cabello, 188 F.3d at 875 (citing Spreitzer v. Peters,

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Cite This Page — Counsel Stack

Bluebook (online)
233 F.3d 1005, 2000 U.S. App. LEXIS 30453, 2000 WL 1770673, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-richard-pergler-ca7-2000.