Conviction for Health Care Fraud Upheld

It is a Crime to Cheat Insurers

The government’s case against Theresa Fisher was strong, predicated in part on the following evidence:

• testimony by five witnesses who claimed to have been coached by Fisher;
• testimony by a co-conspirator that both she and Fisher were pressured to bring in patients for insurance-covered procedures;
• forged doctors’ notes with Fisher’s handwriting;
• text messages between Fisher and patients regarding insurance coverage for cosmetic procedures; and
• recordings of Fisher on the phone with one of the patients discussing insurance coverage.

This evidence overwhelmingly implicated Fisher in a mail fraud scheme. She was convicted and now contends that the district court committed several errors that individually and cumulatively created sufficient prejudice to warrant a new trial. The videotape of Fisher’s meeting with the undercover agent was admissible, notwithstanding the government’s erroneous hearsay objection.

In United States of America v Theresa Fisher, United States Court of Appeals, Ninth Circuit, — Fed.Appx. —- 2016 WL 4784046 (9/14/16), Fisher claimed the court erred by allowing a co-conspirator’s confession that added to the evidence of Fisher’s guilt.

THE ERROR CLAIMED

The district court admitted the portion of Lindsay Hardgraves’ (Hardgraves) confession that inculpated Fisher. Because Hardgraves did not testify at trial, admission of that portion of her confession violated Fisher’s Confrontation Clause rights. See Bruton v. United States, 391 U.S. 123, 126 (1968). Fisher did not object to the admission of this evidence at trial. Even assuming that the error was clear and obvious, Fisher cannot show that admission of this evidence affected her substantial rights.

Nonetheless, the Ninth Circuit concluded that exclusion of the tape was harmless error given the government’s strong case against Fisher.

Even when combined with the Bruton error mentioned above, the error in excluding the videotape does not warrant a new trial. The government has shown, based on the strength of the evidence presented at trial, that it is more probable than not that these two errors “did not materially affect the verdict.” See United States v. Gonzalez-Flores, 418 F.3d 1093, 1099 (9th Cir. 2005).

Fisher argues that the jury might have convicted her merely upon finding that she deliberately avoided learning that the procedures were not medically necessary, without also finding that she knew the procedures were fraudulently billed to insurance companies. This argument ignores the fact that the jury was required to find that Fisher acted with an “intent to defraud” in addition to finding that she acted knowingly. In order to find an intent to defraud, the jury must have found that Fisher intended to defraud someone or something, and in this case that was the insurance companies.

Fisher contends the jury was required to find the facts that form the basis for the restitution determination. This argument is foreclosed by our decision in United States v. Eyraud, 809 F.3d 462, 471 (9th Cir. 2015) and she must therefore pay restitution to the insurers.

It would have been error for the district court to have admitted Hardgraves’s statement over a Bruton objection. But there wasn’t any Bruton objection or any other objection.

A party may have perfectly valid reasons for declining to object to evidence that is technically objectionable, but that causes no harm in the context of the facts and the theory of the defense. Just as an appellate lawyer chooses which rulings to challenge on appeal and which ones to let go, the same is true of trial lawyers and objections. Not every witness has to be cross-examined; not every evidentiary objection has to be made. Good lawyers pick their fights.

Why didn’t defense counsel raise a Bruton objection here? The answer is: the court doesn’t know. Counsel may have had a strategic reason for his decision, or he may have been asleep at the switch. It was not error per se for the judge to have admitted testimony that wasn’t objected to, even if it could have been. The conviction stands, as does the restitution order.

ZALMA OPINION

Defrauding an insurer is a crime. The United States caught Fisher and others cheating insurers with false medical claims. The evidence against Fisher was damning. Without objection, a confession of a co-conspirator was admitted even though a valid objection existed. Because the evidence was damning, the error was not sufficient to require a new trial.