Defendants appeal from the judgments of the Supreme Court, New York County (Rena K. Uviller, J.), rendered March 15, 2011 and April 8, 2011, following a joint jury trial, convicting defendant Keschner of enterprise corruption, scheme to defraud in the first degree, two counts of grand larceny in the first degree, money laundering in the second degree, four counts of insurance fraud in the fourth degree, and two counts of falsifying business records in the first degree, and convicting defendant Goldman of enterprise corruption, scheme to defraud in the first degree, two counts of grand larceny in the first degree, money laundering in the first and second degrees, five counts of insurance fraud in the third degree, three counts of insurance fraud in the fourth degree, and one count of falsifying business records in the first degree, and imposing sentence.
Robert S. Dean, Center for Appellate Litigation, New York (Susan H. Salomon of counsel), for Matthew Keschner, appellant.
Jenner & Block LLP, New York (Peter B. Pope and Kenyanna M. Scott of counsel), for Aron Goldman, appellant.
Cyrus R. Vance, Jr., District Attorney, New York (Susan Axelrod and Alan Gadlin of counsel), for respondent.
Peter Tom, J.P., Richard T. Andrias, David B. Saxe, Judith J. Gische, JJ.
Defendants ask this Court to alter the definition of "enterprise corruption" to include a criterion not contained in the statute — namely, that the "criminal enterprise" (Penal Law § 460.10) must be so structured as to permit it to continue its existence without the involvement of one or more key participants. Because the statute expressly requires only "a continuity of existence, structure and criminal purpose beyond the scope of individual criminal incidents " (id. [emphasis added]), not criminal " participants, " we reject this construction. Defendants' remaining contentions are largely unpreserved and otherwise devoid of merit.
The evidence adduced against defendants Aron Goldman and Matthew Keschner supports the jury's conclusion that they were knowing participants in a fraudulent scheme concocted by Gregory Vinarsky, and the verdict is not against the weight of the evidence. Vinarsky utilized health care clinics to fraudulently obtain money from insurance companies by submitting claims for unnecessary medical tests, procedures and medical devices or equipment on behalf of injured persons entitled to receive no-fault automobile insurance benefits. Vinarsky, who testified under a cooperation agreement, employed runners to find and solicit patients and hired medical personnel — including Goldman, an internist, and Keschner, a chiropractor — to supply medical services. Goldman and Keschner had both worked at a no-fault clinic set up by Vinarsky in 2001 in the Yorkville section of Manhattan. Since New York State regulations require that a medical clinic be owned by a physician, it was Goldman's name that appeared on the relevant paperwork for the Yorkville clinic.
In 2002, Vinarsky closed the Yorkville operation and opened the St. Nicholas Clinic, the facility involved in this prosecution, located on St. Nicholas Avenue in upper Manhattan. Goldman again signed as the owner of the corporate entity, St. Nicholas Avenue Medical Care, P.C., while Vinarsky owned all of the businesses associated with the clinic's operation, encompassing real estate, billing and administrative services. Keschner was hired as the clinic's chiropractor and received, as remuneration, 35% of the profits he generated, with the remainder going to Vinarsky. Vinarsky instructed Keschner to direct patients to visit the clinic three times a week for chiropractic treatments and offered Keschner $5 to $10 for each water circulating unit he prescribed (for which Vinarsky received a $50 kickback from the unit's distributor). As to Goldman, Vinarsky stated that since the doctor had worked at the Yorkville clinic, there was no need to explain what was expected of him.
Vinarsky devised a five-page, printed "initial evaluation" form, which listed a series of tests and treatments the doctors were expected to order and included prepared diagnostic impressions. The form concluded with sections dealing with the treatment plan and consultation referrals, including one advising that the patient receive physical therapy at least three times a week, the maximum frequency of treatments reimbursed by insurance companies. Included was a list of durable medical equipment that could be ordered and a preprinted section providing that the patient's prognosis was "guarded." Many of the prescribed medical tests were performed at the St. Nicholas clinic, and Vinarsky received kickbacks for tests administered at outside facilities.
The jury heard testimony from patients who were given tests and prescribed treatment despite never having complained of pain in the particular area of the body corresponding to the diagnosis. The jury also heard from investigators for various insurance carriers, who testified concerning the receipt of claims forms and medical reports. In the case of one patient, bills were submitted for injuries he had allegedly sustained in connection with three successive automobile accidents, without mention of any preceding accident or an even earlier motorcycle accident. Testimony was also heard from undercover officers and a confidential informant, who presented themselves at the clinic for evaluation, and from a forensic accountant and a statistician, who analyzed the clinic's treatment and financial records.
Defendants were tried jointly and convicted of enterprise corruption and related offenses, including grand larceny, scheme to defraud, money laundering and insurance fraud. Goldman was sentenced to a term of 2½ to 7½ years and an $800, 000 fine, and Keschner to a term of 1½ to 4½ years and a $750, 000 fine. Defendants remain free on bail pending appeal.
Both defendants contend that their convictions of enterprise corruption are unsupported by legally sufficient evidence and are against the weight of the evidence. In particular, they argue that because Vinarsky was essential to the operation of the St. Nicholas facility, it lacked the structure to maintain the necessary continuity of existence in his absence. Thus, they conclude, the clinic did not meet the statutory requirements of a criminal enterprise essential to sustain conviction for their participation in its operation.
While Keschner moved to dismiss the enterprise corruption count on this basis, Goldman did not, thereby failing to preserve the issue for appellate review (see People v Vargas, 236 A.D.2d 258 [1st Dept 1997], lv denied90 N.Y.2d 865  [objection by one codefendant does not preserve an issue for the other]). In any event, the argument is without merit. Defendants rely on People v Yarmy (171 Misc.2d 13 [Sup Ct, NY County 1996]), in which the court correctly found that the People had not established the existence of a criminal enterprise to support the defendant's conviction of enterprise corruption . The court reasoned that the arrangement between Yarmy, the licensed firearms dealer who supplied weapons, and his accomplice, who acted as a distributor by selling them to local gang members, did not constitute "a structured organization" but merely two persons acting in concert (with the occasional assistance of a family member) to advance their respective interests (id. at 18-19). Absent was "any semblance of a hierarchical organization beyond what is minimally necessary to effectuate the individual sales" (id. at ...