Filed: May 11, 2015
Latest Update: Mar. 02, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 14-4798 UNITED STATES OF AMERICA, Plaintiff - Appellant. v. AMIR A. BAJOGHLI, Defendant - Appellee. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (1:14-cr-00278-GBL-1) Argued: March 25, 2015 Decided: May 11, 2015 Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior Circuit Judge. Reversed and remanded by published opinion. Judge Niem
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 14-4798 UNITED STATES OF AMERICA, Plaintiff - Appellant. v. AMIR A. BAJOGHLI, Defendant - Appellee. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (1:14-cr-00278-GBL-1) Argued: March 25, 2015 Decided: May 11, 2015 Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior Circuit Judge. Reversed and remanded by published opinion. Judge Nieme..
More
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-4798
UNITED STATES OF AMERICA,
Plaintiff - Appellant.
v.
AMIR A. BAJOGHLI,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:14-cr-00278-GBL-1)
Argued: March 25, 2015 Decided: May 11, 2015
Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Reversed and remanded by published opinion. Judge Niemeyer
wrote the opinion, in which Judge Floyd and Senior Judge
Hamilton joined.
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.
2
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.
3
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
4
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
5
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
6
$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
7
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.
8
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 transactions. As it argues, it must be
able to prove the entire scheme, including Bajoghli’s
intentional and willful conduct in executing it. Such a burden,
it maintains, requires that it be allowed to introduce evidence
that, although perhaps not directly related to any of the 53
executions charged, is nonetheless relevant to proving the
scheme itself. The government warns that if it were not able to
offer evidence of uncharged executions in proving the scheme, it
would have to charge hundreds, if not thousands, of counts in
every large-scale healthcare-fraud case, such as this one.
Bajoghli maintains that the district court correctly
concluded that the evidence at trial must relate to one of the
specifically charged executions of the fraudulent scheme and
that “evidence of an uncharged fraudulent scheme should not be
9
admitted.” He asserts that the government’s brief paints with
too broad a brush, ignoring the 53 specific and discrete charges
it brought under § 1347. As he argues, “the evidence at trial
must relate to a specific allegation of fraud that the jury will
have to consider.” Because, as he contends, any evidence of
uncharged conduct would be only “loosely relevant” to the
charged executions, the evidence should be excluded under
Rule 403 as unfairly prejudicial and under Rule 404(b),
including Rule 404(b)(2)’s notice requirement, as “other acts”
evidence.
The scope of relevant evidence at trial is, of course,
dictated by the indictment. In this case, however, Bajoghli’s
position reveals a misunderstanding of the nature of the charges
in the indictment and the scope of proof that is relevant.
Section 1347 punishes “[w]hoever knowingly and willfully
executes . . . a scheme . . . to defraud any health care benefit
program” when delivering healthcare services. 18 U.S.C.
§ 1347(a)(1) (emphasis added). A “scheme to defraud” is thus an
element of the offense. See United States v. McLean, 715 F.3d
129, 137-38 (4th Cir. 2013) (“To sustain a conviction under
18 U.S.C. § 1347, the government [is] required to prove beyond a
reasonable doubt that [the defendant] knowingly and willfully
executed a scheme to defraud insurers by billing for medically
unnecessary procedures” (emphasis added)). While fraud can be
10
committed simply by engaging in an isolated transaction, a
scheme to defraud requires a plot, plan, or arrangement that is
executed by a fraudulent transaction. See Black’s Law
Dictionary 1546 (10th ed. 2014) (defining “scheme” as “[a]
systemic plan; a connected or orderly arrangement”; or “[a]n
artful plot or plan, [usually] to deceive others”).
In this case, the scheme alleged in the indictment is
described as encompassing four types of conduct, beginning in
January 2009 and continuing through August 2012. And although
the indictment charged only 53 “executions” of the scheme in
53 separate counts, it also alleged that each particular
execution was “part of the scheme and artifice to defraud.”
Thus, the indictment charged that “for the purpose of executing
the aforementioned scheme and artifice,” described earlier to
have lasted from January 2009 through August 2012, the defendant
engaged in the particularly described fraudulent transactions.
(Emphasis added). Because a scheme is an element of a § 1347
offense and because the specifically alleged three-and-one-half
year scheme is made part of each execution, evidence of the
entire scheme is relevant to proving each particular execution.
It is important to recognize that just as all the overt
acts of a conspiracy need not be charged in an indictment, see
United States v. Janati, 374 F.3d 263, 270 (4th Cir. 2004) (“It
is well established that when seeking to prove a conspiracy, the
11
government is permitted to present evidence of acts committed in
furtherance of the conspiracy even though they are not all
specifically described in the indictment”), all executions of a
scheme likewise need not be charged, see United States v. Pless,
79 F.3d 1217, 1220 (D.C. Cir. 1996) (“That the government chose
to charge as the execution of the scheme only the three deposits
in National [Bank] does not reduce the boundaries of the scheme,
which the statute requires the government to prove. . . . [I]t
is not necessary for the government to charge every single act
of execution of the scheme in order to prove the whole scheme”).
Nonetheless, evidence of transactions and conduct not charged is
relevant to proving the existence of and the boundaries of the
conspiracy or scheme. See
Janati, 374 F.3d at 275 (“[T]he
government has the right and the burden to prove in its case-in-
chief a conspiracy broader than the individual overt acts
alleged [and] therefore the district court must give the
government a reasonable opportunity to carry this burden”);
Pless, 79 F.3d at 1220 (“[T]he government is [not] artificially
limited to presenting to the jury only that portion of the
scheme that directly related to [the charged executions]”). A
scheme and a conspiracy thus are, for these purposes, similar
concepts. See United States v. Lothian,
976 F.2d 1257, 1262
(9th Cir. 1992) (“Because an essential element of these offenses
is a fraudulent scheme, mail and wire fraud are treated like
12
conspiracy in several respects”); United States v. Read, 658
F.2d 1225, 1239 (7th Cir. 1981) (“A scheme to defraud and
conspiracy embrace analogous, but not identical, concepts”);
United States v. O’Connor,
580 F.2d 38, 41-42 (2d Cir. 1978)
(equating “a continuing scheme” with a conspiracy); SEC v. Nat’l
Bankers Life Ins. Co.,
324 F. Supp. 189, 195 (N.D. Tex. 1971)
(describing “the possibility of reading ‘scheme’ as synonymous
with a conspiracy” in a federal securities statute). We
therefore conclude that when the government charges a defendant
under § 1347 with a scheme to defraud and elects to charge only
some of the executions of that scheme, its election does not
limit its proof to only the charged executions. It may
introduce other evidence of uncharged executions to prove the
scheme.
To be sure, a district court still retains broad-ranging
discretion to manage trials and limit proof that is, for
instance, overly duplicative. But, as we noted in Janati, its
discretion must be balanced by the need to give the government
adequate latitude to prove its case, especially in a large and
complex healthcare-fraud case where the defendant’s criminal
intent is placed at issue. See 374 F.3d at 273-74. We conclude
that, in this case, the district court abused its discretion in
failing to give the government sufficient latitude to carry its
burden of proof.
13
In addition, it follows that because evidence of conduct
not charged in a specific execution may be relevant to the
nature and scope of a scheme charged under § 1347, such evidence
is intrinsic to the “scheme” element, and Rule 404(b) therefore
does not, as Bajoghli argues, regulate it as “other bad acts”
evidence. See Unites States v. Grimmond, 137 F.3d 823, 832 (4th
Cir. 1998) (“[W]hen ‘other crimes, wrongs, or acts’ evidence is
relevant to establishing an element of the offense, Rule 404(b)
is not even implicated”).
In sum, we conclude that the district court abused its
discretion in limiting the government’s proof to that which is
directly relevant to one or more of the 53 executions charged in
the indictment, without taking into account the relevance of
uncharged conduct to the alleged overarching scheme. The
government has the burden of proving a scheme to defraud and
Bajoghli’s knowing and willful conduct in executing the scheme.
And to that end, it must be allowed to offer evidence probative
of these elements, even if that evidence is not directly related
to one of the 53 executions.
III
The government next challenges the district court’s ruling
to exclude evidence of the defendant’s post-scheme conduct. It
seeks to introduce evidence (1) that “after being interviewed by
14
law enforcement, [Bajoghli] immediately stopped sending
pathology slides” to outside contractors; (2) that after his
interview, “the defendant stopped performing Mohs surgery
without a biopsy”; and (3) that the defendant “delet[ed]
scheduling data for the past wound repairs that were performed
by medical assistants.” The district court considered this
evidence to be “prior ‘bad act’ evidence” governed by
Rule 404(b) and excluded it on the ground that the government
had not provided Bajoghli with adequate notice, as required by
Rule 404(b)(2). ∗ Moreover, the court excluded this evidence under
Rule 403, concluding that its probative value was “substantially
outweighed by the danger of unfair prejudice . . . , confusing
the jury . . . , and waste of judicial resources.” The
government argues that the district court erred in applying
Rule 404(b) because the evidence is intrinsic to the charged
crimes; that is, it “bear[s] directly on the defendant’s intent
as to the charged fraud (not some other crime) and [is]
∗
Even if Rule 404(b) were to apply, it is difficult to
understand how the government had not provided adequate notice
to Bajoghli. Bajoghli’s motion to exclude evidence of his post-
scheme conduct admitted as much, stating, “The government has
indicated that they plan to introduce evidence of changes in
procedures and practices in [his] offices after he became aware
that he was under criminal investigation, presumably to
demonstrate that the prior practices were illegal.” Moreover,
in his motion to exclude this evidence, Bajoghli did not raise a
lack of notice as a ground for exclusion.
15
inextricably intertwined with how he committed the fraud and his
efforts to conceal it once he learned [of the] investigation.”
Bajoghli contends that Rule 404(b) does apply to this
evidence because, as he argued with respect to the evidence of
his uncharged conduct, it would not be “tied to any one of the
53 narrowly defined executions of healthcare fraud” and thus
would not be “intrinsic” to the charged offenses. More
particularly, he contends that “evidence of remedial measures,”
as a matter of law, “cannot be ‘intrinsic’ to any of [the
charged] offenses” because the remedial measures all occurred
after the period of time noted in the indictment as encompassing
the alleged fraudulent scheme. In addition, he contends that
its admission would be unfairly prejudicial under Rule 403,
parroting the district court’s conclusion.
Again, we agree with the government. As the government
points out, it intends to offer evidence of Bajoghli’s post-
scheme conduct to prove his knowledge and intent to defraud, as
is required by § 1347. For instance, that Bajoghli stopped
sending pathology slides to outside contractors after he learned
he was under investigation, but before federal agents had even
become aware of this practice -- as the government represents --
would tend to prove Bajoghli’s fraudulent intent and guilty
knowledge with respect to this aspect of the scheme. Similarly,
the government notes that Bajoghli “intends to challenge [the
16
charge of fraudulent Mohs surgeries] by asserting that he
exercised reasonable medical judgment in performing Mohs
surgeries and that any errors were the product of innocent . . .
mistakes.” Thus, it reasons, evidence that Bajoghli stopped his
practice of performing Mohs surgeries without first reviewing
biopsies once he learned of the investigation would tend to show
that he knew the accepted standard of care for diagnosing skin
cancer and had deliberately chosen to disregard it. And
finally, as the government notes, evidence that Bajoghli deleted
scheduling data from his computers -- data that revealed who had
actually performed wound-repair procedures -- would tend to
refute his claim that this aspect of the fraud resulted from
honest billing mistakes. Cf. McLean, 715 F.3d at 139
(concluding that evidence that the defendant “attempted to shred
patient files subpoenaed” by the government was probative that
the defendant knew he “had something to hide”). The proffered
evidence therefore would be probative to prove knowledge and
intent, which are elements of the crimes charged in the
indictment. And because Rule 404(b) does not apply to conduct
that is intrinsic to the charged crime, the district court erred
in applying the rule to this evidence. See United States v.
Basham,
561 F.3d 302, 326 (4th Cir. 2009) (“The Rule 404(b)
inquiry . . . applies only to evidence of other acts that are
17
‘extrinsic to the one charged’” (quoting United States v. Chin,
83 F.3d 83, 87 (4th Cir. 1996))).
Bajoghli nonetheless argues that his post-scheme conduct
cannot be intrinsic to the charged offenses because it took
place after the end of the period of activity charged in the
indictment. But it simply does not follow that conduct that
takes place after the end of the period of activity charged in
the indictment is -- as a matter of law -- subject to the
requirements of Rule 404(b). In fact, our case law demonstrates
that simply because a defendant’s conduct takes place outside
the time frame of the activities charged in the indictment does
not, as Bajoghli argues, automatically render that conduct
extrinsic to the charged offense and therefore subject to
Rule 404(b). See United States v. Kennedy, 32 F.3d 876, 885
(4th Cir. 1994) (“The basic flaw in [the defendant’s] argument
is that . . . [it] erroneously assumes that all evidence falling
outside the charged conspiracy period necessarily involves a
separate, unrelated offense subject to the strictures of
[Rule 404(b)]. It is well-established, however, that the mere
fact that the evidence involved activities occurring before the
charged time frame of the conspiracy does not automatically
transform that evidence into ‘other crimes’ evidence”).
Instead, conduct that takes place outside the time frame of the
charged offense can avoid having to comply with the requirements
18
of Rule 404(b) where it is, inter alia, “relevant to
establishing an element of the offense.” Grimmond, 137 F.3d
at 831-32. And, as we concluded above, Bajoghli’s post-scheme
conduct is relevant to proving his fraudulent intent and guilty
knowledge.
The district court’s additional ruling -- that Rule 403
requires exclusion of the evidence because its probative value
is substantially outweighed by the danger of unfair prejudice
and other concerns -- reflects a misunderstanding of what
constitutes unfair prejudice under Rule 403. Once it is
recognized that evidence is probative of an element of the crime
charged, “the balance under Rule 403 should be struck in favor
of admissibility, and evidence should be excluded only
sparingly.” United States v. Aramony, 88 F.3d 1369, 1378 (4th
Cir. 1996); see also United States v. Siegel,
536 F.3d 306, 319-
20 (4th Cir. 2008). And in this context, unfair prejudice
“speaks to the capacity of some concededly relevant evidence to
lure the factfinder into declaring guilt on a ground different
from proof specific to the offense charged.”
Basham, 561 F.3d
at 327 (emphasis added) (quoting Old Chief v. United States,
519 U.S. 172, 180 (1997)) (internal quotation marks omitted).
Neither Bajoghli nor the district court has identified any
ground that would support a finding of guilt different from
proof that is specific to the offense charged.
19
Because the district court misapplied Rule 404(b) and
Rule 403 in excluding evidence of Bajoghli’s post-scheme
conduct, it abused its discretion.
V
Finally, the government challenges the district court’s
ruling to exclude evidence that, despite receiving between $100
and $130 per slide from healthcare benefit programs based on his
claim that he both prepared and analyzed his patients’ pathology
slides himself, Bajoghli paid outside contractors only $15 per
slide to perform those tasks. The government contends that
evidence of financial gain “is critical in a fraud case to
establish a defendant’s intent to defraud.” It argues that the
arrangement between Bajoghli and the outside contractors is
“part and parcel of proving this aspect of the fraud” and that
“an essential part of this arrangement was the amount that the
defendant paid them.” According to the government, “[t]he
substantial disparity between the amount that the defendant
received, and what he paid” can only “underscore[] [Bajoghli’s]
motive for this intentional deception.”
Bajoghli contends that evidence of what he paid the outside
contractors is irrelevant, and thus he urges us to affirm the
district court’s ruling to exclude it. According to Bajoghli,
“this case is about billing and whether or not the billing was
20
false.” Because “[a]ny amounts paid to outside contractors were
not part of the alleged misrepresentations in bills submitted to
insurers,” those amounts, he argues, “were not material to the
charged offenses of executing healthcare fraud schemes by
submitting false claims.”
We agree with the government. Because a violation of the
healthcare fraud statute requires knowing and willful conduct,
see 18 U.S.C. § 1347(a), the government must establish
Bajoghli’s intent to defraud. United States v. Godwin, 272 F.3d
659, 666 (4th Cir. 2001). And evidence of financial gain is
particularly probative in a fraud case to establish the
defendant’s intent to defraud. See, e.g., United States v.
Beverly, 284 F. App’x 36, 40 (4th Cir. 2008) (per curiam);
accord United States v. Davis,
490 F.3d 541, 549 (6th Cir.
2007); United States v. Dearing,
504 F.3d 897, 901 (9th Cir.
2007) (endorsing the Sixth Circuit’s declaration in Davis that
evidence of profits can serve as indirect proof of one’s intent
to defraud); United States v. Wheeler,
889 F. Supp. 2d 64, 68
(D.D.C. 2012) (“In a § 1347 [healthcare-fraud] case, ‘intent [to
defraud] can be inferred . . . from profits’” (quoting
Dearing,
504 F.3d at 901)).
Moreover, the district court’s ruling allowing the
government to introduce evidence that the defendant “would have
been paid less (or not at all) had the claims not been
21
materially false” simply does not allow the government to
present its case with sufficient detail and narrative. Cf. Old
Chief, 519 U.S. at 183 (recognizing “the offering party’s need
for evidentiary richness and narrative integrity in presenting a
case”).
We conclude, accordingly, that the district court abused
its discretion in excluding this evidence.
REVERSED AND REMANDED
22
