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U.S. v. BARBERA

June 2, 2004.

UNITED STATES OF AMERICA, -against- JUDE BARBERA, Defendant


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

Defendant Jude T. Barbera ("Barbera") has moved pursuant to Rule 29(c) of the Federal Rules of Criminal Procedure to set aside the verdict of guilty rendered against him on the grounds that the government failed to establish venue, and alternatively, pursuant to Fed.R.Crim.P. 33 (a), for a new trial on the grounds that the government's rebuttal summation, by vilifying defense counsel and shifting the burden of proof, and the Court's improperly instructing the jury of IRS regulations concerning "employee" compensation, substantially prejudiced the defendant.

  For the reasons set forth below, the motions are denied.

 Prior Proceedings

  Indictment S1 02 Cr. 1268 (AGS) (the "Indictment") charged Barbera in twelve counts: one count of conspiracy to defraud the United States and to commit federal tax offenses; five counts of aiding and assisting in the preparation and presentation of a false individual income tax return; one count of conspiracy to commit health care fraud offenses against the United States; one count of theft from an employee benefit plan; one count of making false statements relating to health care; one count of mail fraud; one count of health care fraud; and one count of obstructing a criminal investigation of federal health care offenses. The Indictment charged six unlawful acts on the part of Barbera. First, it alleged that Barbera, as a doctor authorized to practice medicine, caused his Brooklyn medical practice to pay Thomas Gelardo ("Gelardo") a salary and to provide Gelardo with W-2 forms, when in fact Gelardo was not a legitimate employee. Second, the Indictment charged that Barbera caused his Brooklyn medical practice to include Gelardo in the practice's medical insurance plan, which was obtained through Local 348 of the United Food and Commercial Workers International Union (the "Union"), and that on three occasions Barbera defrauded the Union's medical insurance fund by submitting or causing to be submitted false insurance claims on both July 25, 2000 and July 27, 2000 for Gelardo and on August 16, 2000 on behalf of Gina Gelardo. Lastly, the Indictment alleged that Barbera submitted false charts of the July 25 and August 16 visits in response to a grand jury subpoena.

  The case was assigned to the Honorable Allan G. Schwartz sitting in White Plains. After Judge Schwartz's tragic and untimely death, various judges filling in on White Plains matters signed orders relating to the case. As speedy trial deadlines approached, the case was assigned to this Court.

  Trial commenced on June 12, 2004. The government called ten witnesses: FBI agent Vincent Presutti ("Presutti"); Claire Watkins ("Watkins"); Marina Adelman ("Adelman"); Dr. Anthony Scarafile ("Dr. Scarafile"); Rafael Chavez ("Chavez"); Luba Gonzales ("Gonzales"); Scott Curtis ("Curtis"); Peter Marino ("Marino"); Elvira Yasova ("Yasova"); and IRS revenue agent Robert Russo ("Agent Russo"). The defense cross-examined each government witness, with the exception of Dr. Scarafile and Marino, and called one witness, Gina Gelardo.

  The evidence at trial established that the defendant is a urologist who ran his own urology practice located at 2519 Avenue U, Brooklyn, New York, which was called "Jude T. Barbera, M.D., P.C." (See Trial Transcript (hereinafter, "Tr.") at 135.) Barbera put Gelardo, a member or "soldier" of the Luchese Organized Crime Family of La Cosa Nostra, on the payroll of his medical practice and thereby gave Gelardo a "no-show" job. Barbera also put Gelardo on his medical practice's health insurance plan.

  With respect to the tax fraud charges (Counts One through Six), the evidence established that beginning in or about 1995, Barbera agreed with Gelardo to claim falsely in tax filings that Gelardo was an employee of Jude T. Barbera, M.D., P.C. This enabled Gelardo to claim falsely on Gelardo's own individual income tax returns that Gelardo was a legitimate salaried employee, when, in fact, he was a full-time member of the mob. (See Government Exhibits ("GX") 50, 51, 52.) Accordingly, for the years 1995 through 2000, Barbera arranged to have Jude T. Barbera, M.D., P.C. provide Gelardo with W-2 forms which made it appear that Gelardo was a bona fide employee of Jude T. Barbera, M.D., P.C. (GX 402-09; see id. 500-06; Tr. at 419-29.)

  Also for the years 1995 through 2000, Barbera arranged for Jude T. Barbera M.D., P.C. to file corporate income tax returns which contained a deduction for Gelardo's purported salary, which had the effect of improperly reducing Jude T. Barbera, M.D., P.C.'s ordinary income. (GX 435-40; Tr. at 433-36.) In accordance with the Internal Revenue Service laws, Subchapter S Corporations were required to file income tax returns, but not required to pay income taxes in their own rights. (Tr. at 433-36.) Barbera's individual income tax returns under-reported the defendant's income from Jude T. Barbera, M.D., P.C. (See Tr. at 434-36; GX 442-47.)

  At trial, three former and current employees of Barbera's medical practice, as well as the defendant's brother who shared office space with him, testified that Gelardo did not work at the medical practice and that they had never seen him perform any services for the medical practice. Watkins worked as a bookkeeper for Barbera's medical practice for approximately ten years from 1993 up to and including the time of trial and testified that in approximately 1995 Barbera instructed her to put Gelardo on the payroll (Tr. at 76-77), that she then sent a W-4 form to Gelardo's address in Mount Vernon, New York (Tr. at 77-80), and proceeded to write payroll checks to Gelardo every two weeks from 1995 through 2000, which she mailed to him at his home address in Westchester County. The evidence also established that Gelardo lived in Westchester County for the duration of the charged conspiracy, first in Mount Vernon until approximately 1998 (Tr. at 80; GX 107, 401-03), and then in Crestwood, New York. (GX 107, 404-08). Watkins testified that she never met Gelardo in the ten years that she worked for Barbera's medical practice. (Tr. at 78.)

  Adelman, who worked for Barbera as his office manager from approximately 1990 until 2001, testified that she never saw Gelardo performing any work in Barbera's medical office. Although Adelman had the responsibility of hiring employees for the medical practice, she testified that she did not hire Gelardo and that she never had a conversation with Barbera about what Gelardo's job was. (Tr. at 150-51.) She testified that the first time she met Gelardo was at a social event in approximately 1995 or 1996 (Tr. at 144-45), and that she saw Gelardo at Barbera's medical practice in Brooklyn on only one or two occasions when Gelardo accompanied his father to an appointment. (Tr. at 150). She also testified that Watkins mailed Gelardo's paychecks to Gelardo. (Tr. at 148-49.)

  Yasova worked as a nurse for Barbera from August 1995 through December 1997 (Tr. at 373), and testified that she never met anyone named Gelardo and did not even hear his name during the two and a half years she worked at the defendant's medical practice. (Tr. at 376). Dr. Scarafile, Barbera's brother, who worked in the same office as the defendant and signed payroll checks on occasion for the defendant, testified that at the time he was signing Gelardo's payroll checks, he never saw Gelardo in the office and never observed Gelardo working in the office. (Tr. at 248-49.) Dr. Scarafile also testified that he asked his brother, the defendant, why Gelardo was on the payroll and Barbera said that Gelardo was going through a difficult time and "he's a good friend of the family and I'm helping him." (Tr. at 248-49.)

  Agent Presutti of the FBI testified that he and other law enforcement agents interviewed Barbera at his medical office in December 2000. At the beginning of the interview, Barbera told the agents that Gelardo worked as his "driver." (Tr. at 37.) After the agents responded with skepticism, Barbera admitted that Gelardo did not work as his driver and said that Gelardo had asked Barbera to put him on the payroll because Gelardo "needed a source of income." (Tr. at 38-40.) Barbera admitted that he had paid Gelardo between $20,000 and $30,000 a year since 1996.

  With respect to Counts Seven through Eleven, the evidence at trial established that Barbera arranged for Gelardo to obtain medical insurance for Gelardo, his wife Linda Gelardo, and his daughter Gina Gelardo, on the urology practice's medical insurance plan. The Gelardo family's ability to obtain medical insurance was based on the representation that Gelardo was a genuine employee of Jude T. Barbera, M.D., P.C. (GX 205; Tr. at 298-300.) The medical insurance plan was a union-run plan which required that the recipient of medical insurance and related benefits be a bona fide employee and member of the union. (Tr. at 319.)

  In the beginning of 2000, Barbera arranged for Gelardo to join Local 348 of the Union, and for Gelardo, his wife and his daughter to receive health insurance and other benefits from the Union's Health and Welfare Fund ("Union Fund") (GX 205, 206), by representing to the Union Fund that Gelardo was an employee of Jude T. Barbera, M.D., P.C. The application, which Watkins filled out in part and which bore Gelardo's signature, stated that Gelardo was employed as a "medical assistant" in Barbera's medical practice. (GX 205; Tr. at 98-100, 298-99.)

  Adelman testified that in approximately 2000, Barbera had instructed her to put Gelardo on the medical insurance plan. (Tr. at 154-55.) After that, and in response to Barbera's direction, Adelman instructed Watkins to put Gelardo on the medical plan. (Tr. at 155.) Watkins testified that after Adelman told her to put Gelardo on the Union's medical plan, she assembled the required forms and sent them to Gelardo. (Tr. at 96-98.) In particular, Watkins sent the application form (GX 205) to Gelardo at his home in Westchester. (Tr. at 99-100). Watkins also wrote out monthly checks from Barbera's medical practice for Union dues and medical insurance payments on behalf of Gelardo and sent them to the Union throughout 2000. (Tr. at 100-05; GX 109A-109W.)

  In all, Gelardo and his dependents received in excess of $13,000 in medical benefits, as well as other welfare benefits including prescription medication and life insurance from the Union Fund to which they were not entitled. (Tr. at 319-20, 334.) Barbera admitted that he put Gelardo on the Union's health insurance plan after Gelardo asked Barbera for medical coverage, and that Barbera paid approximately $300 per month to the Union Fund on behalf of Gelardo. (Tr. at 42-43.)

  During its rebuttal summation, the government commented as follows:
Then you heard Mr. McDonald's closing. That, we submit, is the third fake story, taking the opening and incorporating the facts and giving you — packaging you a new version, as if you are willing to believe all these different fake stories. (Tr. at 682.)
* * *
He thinks if he says it forcefully enough and dramatically enough, you're just going to give in to his will. (Tr. at 684.)
* * *
But let's focus on what Mr. McDonald was doing with this and why he went down this road, and you'll see that he came up with a fourth bogus story, just because he's got to throw fog and confusion and try to throw away all this evidence. (Tr. at 687.)
* * * Now they come up with a new theory because they've got to throw mud at the government, and the new theory is that TJ came to him looking for a job. Speaking out of both sides of his mouth, you know, TJ did not need a job. You know TJ's lifestyle. (Tr. at 688.)
* * *
Every time Mr. McDonald told you you can't look at inside his head, he's telling you not to use your judgment, not to use your experience, not to use your good wisdom. Don't listen to him. Don't be intimidated. Do your jobs. Follow the evidence. We know you will. (Tr. at 689.)
* * *
I've got a bridge to sell you. Mr. McDonald might sell it to you. (Tr. at 694-95.)
* * *
And when Mr. McDonald ignores it and tries to explain everything else, he's trying to scam someone else, and that's you. (Tr. at 695.)
* * *
But there's a lot more than that that Mr. McDonald didn't address because even his creative mind can't come up with a response to them. (Tr. at 697.)
* * *
Now, if they don't believe the witnesses, they can cross them. They can get into this a little more. Didn't bother, because they knew what they were going to find. Didn't bother because it would just be more testimony on cross to corroborate what the government's saying, what the evidence shows you, what you already know. They're playing games with you. Do not be fooled. Keep your eye on the ball. Keep your eye on the evidence. (Tr. at 679.)
* * *
Mr. Chavez was on the stand folks, right? Mr. McDonald questioned him. He could have asked him that question. He could have asked him, did you know he was on the plan? What checks do you have? Did you ever find out? Did you ever do anything? Didn't ask him because to the defense this is a game. They want to see if they can fool you. He doesn't ask him these questions and he spends so much time trying to tell you how it must really be. It's not evidence, folks, it's a game. You're not playing a game. You know you're not. (Tr. at 692.)
* * *
You heard a lot of stuff about these charts, folks. McDonald spent a lot more time in closing than he did in questioning the witnesses about them. (Tr. at 696.)
  The jury returned a verdict on June 18, 2003. It convicted Barbera of Counts One through Eleven, and acquitted him of Count Twelve, the obstruction of a criminal health care investigation charge. With respect to the substantive health care fraud counts — Counts Eight, Nine, Ten and Eleven — the jury, having responded to special interrogatories, found Barbera guilty by reason of his practice having obtained medical insurance for Gelardo, rather than having committed theft or making false statements or fraud by reason of any of the three contested medical insurance claims.

  Post trial the action was returned to White Plains and assigned to the Honorable Stephen C. Robinson. The filings on the instant motions were completed on October 9, 2003. The action was ...


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