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United States of America v. Dimitry Shteyman

May 23, 2011

UNITED STATES OF AMERICA
v.
DIMITRY SHTEYMAN, ALEKSEY SHTEYMAN, MAXSIM SHVEDKIN, ILYA GERSHOVICH, PELAGEYA KOTELSKY, ET AL. DEFENDANTS.



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

MEMORANDUM AND ORDER

The ten defendants in this action have been indicted for allegedly participating in a Medicare fraud scheme between January 2009 and April 2010. Presently before the Court are omnibus pretrial motions separately filed by certain defendants seeking bills of particulars, severances, suppression of statements, and further discovery. For the reasons set forth below, Defendants' motions are DENIED in part and GRANTED in part.

BACKGROUND

I.The Indictment

The operative indictment in this case, a second superseding indictment returned by the grand jury on November 12, 2010 (the "Indictment"), charges the ten defendants in this action with 19-counts of health care related fraud and conspiracy.*fn1 (See ECF No. 61.) The Indictment alleges that the fraudulent scheme operated out of a Medicare-certified Brooklyn-area purported provider of physical therapy and diagnostic testing known as Dr. Jesse A. Stoff Medical, P.C. d/b/a Solstice Wellness Center ("Solstice" or "the Center"). Solstice, according to the Indictment, submitted fraudulent claims to Medicare, illegally billing Medicare for goods/services that were not medically necessary or were never even provided to beneficiaries.*fn2

The ten defendants, as they are described in paragraphs 8 through 14 of the Indictment, may be classified as falling into three distinct categories of actors:

One category consists of defendants who managed and recruited beneficiaries into the alleged fraudulent scheme, but who are not themselves health care providers and/or Medicare beneficiaries ("Operator-Recruiter Defendants"). Three defendants fall in this category-Dmitry Shteyman ("Dmitry"), his brother Aleksey Shteyman ("Aleksey"), and Maxsim Shvedkin ("Shvedkin"). The bulk of the Indictment (Counts 1, 3--19) is directed against these defendants. It alleges that Dmitry was the Chief Operating Officer and Vice President of Solstice and managed the recruitment of Medicare beneficiaries at Solstice through the use of kickback payments to beneficiaries to induce them to allow Solstice to bill Medicare under their names for purported medical services. It further alleges that Aleksey was a consultant at Solstice and assisted in recruiting Medicare beneficiaries into the scheme, and that Shvedkin assisted in recruiting beneficiaries into the scheme. More specifically, Count 1 charge the Operator-Recruiter Defendants with conspiracy to defraud the United States and to have submitted and caused the submission of fraudulent claims to the Medicare program, in violation of 18 U.S.C. §§ 371 and 3551 et seq. In terms of overt acts, Count 1 alleges that the three men offered and paid cash kickbacks to a John Doe ("Doe") beneficiary to induce him to both visit Solstice on his own account and to refer other Medicare beneficiaries to the Center. It lists specific dates on which these Defendants allegedly offered and made kickback payments to Doe and the dates of the services Solstice fraudulently billed to Medicare on behalf of Doe. The Indictment further charge the Operator-Recruiter Defendants with conspiracy to commit health care fraud, in violation of 18 U.S.C. §§ 1349 and 3551 et seq. (Count 3) and with health care fraud, in violation of 18 U.S.C. §§ 1347, 2 and 3551 et seq. (Counts 4--19). In terms of overt acts, the Indictment provides a table sample of allegedly fraudulent claims Solstice submitted to Medicare for 19 patients, which includes the approximate date of claim, claim amount, date of service and services billed. Finally, the Indictment contains a criminal forfeiture allegation seeking forfeiture of property obtained through the fraudulent scheme alleged in Count 1, and 3--19.

A second category consists of defendants who are Medicare beneficiaries charged with soliciting and receiving kickbacks in exchange for allowing Solstice to bill Medicare under their names as well as with recruiting other beneficiaries into the scheme (the "Beneficiary-Recruiter Defendants"). Two defendants fall in this category-Ilya Gershkovich ("Gershkovich") and Pelageya Kotelsky ("Kotelsky").

Finally, the third category of defendants consists of Medicare beneficiaries who are charged only with soliciting and receiving cash kickbacks to participate in the alleged scheme ("Beneficiary Defendants"). Five defendants fall into this category, including Vladimir Rubin ("Rubin"). *fn3 Count 2 of the Indictment is the sole count that is directed at all three categories of Defendants, charging all ten with conspiracy to pay and receive healthcare kickbacks, in violation of 18 U.S.C. §§ 371 and 3551.

II.Defendants' Pretrial Motions

Four Defendants have filed omnibus pretrial motions seeking bills of particulars, various items of pre-trial discovery, severance and suppression of statements, all of which are opposed by the Government.*fn4 Specifically:

* Dmitry, Gershkovich, Kotelsky, and Rubin have moved for bills of particulars pursuant to Federal Rule of Criminal Procedure ("Rule") 7(f).

* Gershkovich, Kotelsky, and Rubin also seek further forms of discovery, including Brady material, and Federal Rule of Evidence ("FRE") 404(b) material, and a witness list. Rubin also seeks a hearing on the FRE 404(b) issue.

* Gershkovich and Rubin seek severance.

* Gershkovich and Kotelsky seek to suppress certain post-arrest statements and requested a suppression hearing.

* And finally, Gershkovich, Kotelsky, and Rubin all join in the motions of their co-defendants to the extent such action is beneficial.

For purposes of clarity, to the extent defendants seek common elements the Court will describe them in turn and consider them together. Requests that are unique to the moving defendant will be considered separately.*fn5

DISCUSSION

I. Bills of Particulars

A.Governing Standard

Federal district courts have the authority to "direct the government to file a bill of particulars." FED. R. CRIM. P. 7(F). The district court has broad discretion in deciding whether to grant a motion for a bill of particulars. United States v. Walsh, 194 F.3d 37, 47 (2d Cir. 1999); United States v. Panza, 750 F.2d 1141, 1148 (2d Cir. 1984). A bill of particulars may be appropriate "where the charges of an indictment are so general that they do not advise the defendant of the specific acts of which he is accused." Walsh, 194 F.3d at 47. The purpose of a true bill of particulars is three-fold: to provide a defendant the necessary facts that would allow him "[1] to prepare for trial, [2] to prevent surprise, and [3] to interpose a plea of double jeopardy should he be prosecuted a second time for the same offense." United States v. Bortnovsky, 820 F.2d 572, 574 (2d Cir. 1987). The defendant bears the burden of showing "the information sought is necessary," and that he will be prejudiced without it. United States v. Fruchter, 104 F.Supp. 2d 289, 312 (S.D.N.Y. 2000).

In cases involving fraud, as is alleged here, a bill of particulars may be appropriate where the indictment does not identify the specific documents and transactions the Government contends are fraudulent. See Bortnovsky, 820 F.2d at 574--75 (reversing the denial of a bill of particulars in an insurance fraud case where government failed to identify which insurance claims were falsified) and United States v. Namachie, 91 F. Supp. 2d 565, 567 (S.D.N.Y. 2000), aff'd, 211 Fed. Appx 76 (2d Cir. 2007) (producing "mountains of documents" to the defense without specifying which documents are falsified will not obviate the need for a bill of particulars where the indictment is not specific). However, further pre-trial disclosure may vitiate the need for a bill "where the government has made sufficient disclosures concerning its evidence and witnesses by other means." United States v. Chen, 378 F.3d 151, 163 (2d Cir. 2004) (quoting Walsh, 194 F.3d at 47); see also Bortnovsky, 820 F.2d at 574 ("If the information sought by defendant is provided in some acceptable alternate form and/or further discovery by the Government, no bill of particulars is required.")

In short, a defendant is not entitled to preview, via a motion for bill of particulars, an extended trailer of the feature the Government plans to screen for the jury well in advance of the premiere. See, e.g., United States v. Torres, 901 F.2d 205, 234 (2d Cir. 1990) ("Acquisition of evidentiary detail is not the function of the bill of particulars") (quotation marks and citations omitted); United States v. Sindone, No. 01 CR. 517 (MBM), 2002 WL 48604, at *1 (S.D.N.Y. Jan. 14, 2002) (a bill of particulars is not appropriate for use as a general pre-trial investigative tool for the defense); Fruchter, 104 F. Supp. 2d at 311--12 (a bill of particulars is not appropriate as a device to compel the Government to disclose the manner in which it will attempt to prove its charges); United States v. Jimenez, 824 F. Supp. 351, 363 (S.D.N.Y. 1993) (a bill of particulars is not appropriate as a tool to foreclose the Government from using proof it may develop as the trial approaches).

Here, in evaluating Defendants' specific requests for bills of particulars, the Court notes that the Government has indicated that it has disclosed and/or made available the vast majority of the evidence in its possession that it intends to introduce at trial during its case-in-chief. Thus, while the Indictment itself is not necessarily chock-full of evidentiary details, Defendants have also received a significant amount of disclosure including, but not limited to, 39 boxes of documents that were seized at Solstice; CDs of undercover videos and transcripts of same; bank and state corporate records; electronic Medicare claims data along with a "cheat sheet" or key to understanding the claims data; kickback ledgers; and, lastly, interview notes of several potential witnesses. (See Government Letter re: Summary of Discovery, dated 4/11/2011 ("Gov. 4/11/2011 Ltr."), ECF No. 112.) As a general matter, then, Defendants appear to already have sufficient information to satisfy the three-fold purpose of a true bill of particulars, as discussed above. With this background, the Court now addresses Defendants' specific requests below.

B. Dmitry's Motion for a Bill of Particulars

Dmitry, in his motion for a bill of particulars, seeks an order to compel the Government to identify and segregate, in the discovery it has already disclosed, the approximate calculation of losses that is attributable to the alleged scheme as opposed to claims that Solstice legitimately submitted. (See Dmitry's Demand for a Bill of Particulars at 1, ECF No. 90.) He maintains that contrary to the Government's claim that the loss attributable to the alleged scheme is approximately $3.5 million, "the prosecution can only point to a handful of questionable situations that do not account for more than a few hundred dollars." (See id. at 4.) Thus, unless the Government intends to proceed on a theory that every dollar Solstice derived is the result of criminal activity, he asserts, the Court should grant a bill of particulars to avoid a "sound and light show" for the jury, whereby the Government would ask the jury to infer that all of Solstice's revenues were illicit proceeds. (See id. at 3.)

In light of the fact that the sum total of the sample fraudulent claims the Indictment lists amounts to just $4,465, by the Court's calculation, Dmitry's desire for more information concerning the alleged $3.5 million loss is understandable. Dmitry's legal arguments, however, are without merit. As an initial matter under the principles set forth above, Dmitry is not entitled to discovery on the manner in which the Government will attempt to prove the alleged $3.5 million loss. See United States v. Albunio, No. CR-91-0403(S-2), 1992 WL 281037, at *2 (E.D.N.Y. Sept. 9, 1992) (a "defendant's right to know the crime with which he is charged must be distinguished from his right to know the evidentiary details by which proof of his culpability will be established.") Second, as the Government correctly points out, loss calculation, though relevant to sentencing and possible restitution, is not among the elements necessary to establish a violation of any of the statutes with which Dmitry is charged.*fn6 Finally, the request is moot pursuant to Dmitry's own concession that a bill of particulars would only be necessary "if the prosecution is not contending or arguing that every last penny collected or billed by [Solstice] are criminal proceeds. . . ." (See Dmitry's Demand for a Bill of Particulars at 2.) Here, the Government has stated that it is its position that Solstice's only business was to bilk the Medicare Program.*fn7 Accordingly, Dmitry's motion for a bill of particulars is DENIED.

C.Gershkovich's Requests for Bills of Particulars

Gershkovich seeks the following particulars on the Rule 16 discovery the Government has already provided: (1) the identity of the patients he is charged with recruiting, including the only one specifically alleged in the Indictment as John Doe; (2) the medical treatment the patient(s) allegedly received; (3) an explanation of how the treatment ran afoul of the law-i.e. whether treatment was not medically necessary or not rendered at all; and (4) Medicare claim documents reflecting the billing of such treatment to Medicare. He also seeks greater specificity as to the dates within the 16-- month period he alledgedly (5) recruited patient(s) and paid a cash kickback; and (6) solicited and received a cash kickback. Finally, he seeks greater specificity as to (7) how the concomitant medical treatment he received when he visited Solstice as a beneficiary ran afoul of the law. (See generally Gershkovich's Request for Particulars at Ex. C, ECF No. 93.)

With respect to Gershkovich's requests Nos. (1) and (4), the Government has already disclosed the names of beneficiaries Gershkovich allegedly recruited. (See Gov. 4/11/2011 Ltr. and attached email dated 4/6/2011). With respect to requests Nos. (5) and (6), the Government is not required to prove, never mind provide ahead of trial, exactly when a conspiracy was formed or exactly when a particular defendant joined the alleged scheme. United States v. Matos-Peralta, 691 F. Supp. 780, 791 (S.D.N.Y 1988). Furthermore, these requests amount to a "when" of the charged conspiracy, and courts have routinely held that the "wheres, whens and with whoms" of a charged offense are beyond the proper scope of a bill of particulars. United States v. Rivera, No. 09-CR-619 (SJF), 2011 WL 1429125, at *8 (E.D.N.Y. Apr. 13, 2011); see also Chen, 378 F.3d 151 at 163 (upholding the denial of a bill of particulars as to the "exact time and place of each alleged act associated with each offense in identified in the indictment").

Additionally, concerning Gershkovich's request for greater specificity as to when within the 16-month period he recruited patients, this Circuit consistently sustains wide latitude with date ranges within the indictment where the indictment, as is the case here, tracks the language of the statutes defendants are charged with violating. See generally Walsh, 194 F.3d at 44--45. Finally, it is well-settled that "there is no general requirement that the Government disclose in a bill of particulars all the overt acts it will prove in a conspiracy charge." Namachie, 91 F. Supp. 2d at 575 (quotation marks and citations omitted); see also United States v. Jimenez, 824 F. Supp. 351, 363 (S.D.N.Y 1993). Accordingly, Gershkovich's requests Nos. 1, 2, 4, 5, and 6 are DENIED.

Gershkovich's requests Nos. (3) and (7), which essentially demand greater specificity concerning how the claims Gershkovich may be held criminally responsible for were fraudulent, are GRANTED. The Indictment alleges that all of the claims Solstice submitted to Medicare were fraudulent because they were for medical treatment not provided and not medically necessary. (See Indictment at ¶¶ 13, 17(d), ECF No. 61) (emphasis added.) Such an allegation does not apprise Gershkovich with sufficient precision as to enable him to prepare a defense and avoid unfair surprise at trial. See Namachie, 91 F. Supp. at 574 (a Medicare fraud case granting a similar request for a bill of particulars where the Government failed to specify the ways in which the allegedly fraudulent claims were false).

D.Kotelsky's Requests for Bills of Particulars

Kotelsky maintains that while the Government has provided an enormous amount of discovery, much of it concerns Medicare claims billing data and medical diagnosis and, as such, is highly technical. (See Kotelsky's Aff. and Mem. of Law in Support of Her Motions at 1, ECF No. 89.) Kotelsky seeks further clarification of this discovery and moves for the following particulars: (1) the commercial billing system used to generate the claims data and (2) an explanation of the columns and acronyms in the data. She further requests that the Government identifies for each beneficiary she is alleged to have recruited as well for the claims Solstice submitted to Medicare on her behalf as a beneficiary (3) the specific visit/file/entry that is allegedly fraudulent as noted in the billing and medical records. (See id. at 5--6.)

With respect to Kotelsky's requests Nos. (1), (2) and (3), the Government has already provided this information. (See Gov. 4/11/2011 Ltr., attached email dated 4/7/2011, and attached letter dated 11/23/2010.) This disclosure coupled with the Government's position that all claims submitted by Solstice were fraudulent makes this request redundant. Accordingly, Kotelsky's request for a bill of particulars is DENIED in its entirety. However, to the extent that she joined in her co-defendant Gershkovich's motion, the Government should similarly provide her with the specifics on how the claims she may be held criminally responsible were fraudulent-i.e. whether the medical services were not medically necessary or whether they weren't provided at all.

II. Further Disclosure Issues

Gershkovich and Kotelsky also seek disclosure of all evidence of prior bad acts or other crimes that the Government intends to use it its case-in-chief, pursuant to FRE 404(b). Dmitry joins the three in requesting all materials discoverable under Brady v. Maryland, 373 U.S. 83 (1963). Additionally, Kotelsky requests disclosure of the identities of unindicted co-conspirators as wellstatements of all conspirators; and Gershkovich also requests a witness list 30 days in advance of trial.

The Government, in its opposition to these motions, states that it provided initial and supplemental discovery responses, and that it furnished the bulk of the evidence in its possession that it intends to introduce at trial as early as July 2010. The Government also maintains that its pre-trial disclosure to date is substantial. Nevertheless, in the interest of managing the Group 1 Trial that is fast approaching, the Court has exercised its discretion to grant certain of Defendants' request. In addressing the various issues Defendants raise here, the Court finds Namachie, a Medicare fraud case that addresses several of the issues Defendants raise here, directly on ...


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