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United States v. Vaid

United States District Court, S.D. New York

September 5, 2017

MUTAK Y. VAID, et al., Defendants.



         Defendants Mustak Y. Vaid, Paul J. Mathieu, Ewald J. Antoine, Marina Burman, Asher Oleg Kataev, Alla Tsirlin, Hatem Behiry, Lina Zhitnik, Eduard Miselevich and Ivan Voychak are charged with conspiring to commit health care fraud. This Opinion addresses pretrial motions: (1) to dismiss the operative indictment as to Vaid; (2) to sever Count Six as to Mathieu; (3) to suppress post-arrest videotaped statements of Mathieu, Antoine and Zhitnik; (4) for a bill of particulars, (5) for production of Brady and Giglio material and (6) disclosure of Rule 404(b) evidence.[1] For the following reasons, the motions for the bill of particulars and production of Brady material are granted in part and denied in part, and the other motions are denied.

         I. BACKGROUND

         A. The Alleged Scheme

         The Second Superseding Indictment is the operative indictment and is referred to in this Opinion as the “Indictment.” It charges that, beginning in 2007 and continuing through at least 2013, Defendants participated in a conspiracy to defraud the Medicare Program (“Medicare”), the New York State Medicaid Program (“Medicaid”) and other insurance providers. The scheme allegedly involved eight medical clinics in Brooklyn, New York (the “Clinics”) owned and operated by a co-conspirator (the “True Owner”).[2] The Indictment alleges that Defendants caused the Clinics to submit fraudulent claims to Medicare, Medicaid and other insurance providers for unnecessary medical services or services that were in fact not provided. These services were purportedly provided to individuals who were insured by Medicare, Medicaid or both, and who some Defendants and co-conspirators had recruited with cash payments (the “Paid Patients”).

         The Indictment further charges that Defendants and their co-conspirators provided the Paid Patients prescriptions and referrals for medically unnecessary medications, transportation services or durable medical equipment (“DME”), such as adult diaper kits. This allowed third-party providers to bill Medicare, Medicaid and other insurance providers for services, medications or equipment that were medically unnecessary or in fact not provided.

         B. Each Defendant's Alleged Role

         The Indictment alleges as follows as to each Defendant: the True Owner employed three physicians -- Defendants Vaid, Mathieu and Antoine -- to represent falsely to Medicare and Medicaid, among others, that each owned one or more of the Clinics. In addition to acting as nominal owners, each physician Defendant claimed to have performed medical services that he in fact did not perform, and each signed prescriptions and referrals for medically unnecessary services, medications and supplies. Defendant Behiry, a physical therapist, and Defendant Zhitnik, an occupational therapist, falsely certified that they performed medical services at the Clinics that they in fact did not perform or that were medically unnecessary.

         Defendants Kataev and Tsirlin were business partners of the True Owner and oversaw the operations of some Clinics. They paid cash to the Paid Patients to induce them to receive medically unnecessary or non-existent medical examinations, treatments and supplies at the Clinics and from third-party providers. Kataev and Tsirlin also instructed the Paid Patients that they should be transported to the Clinics by medical ambulettes.

         Defendants Miselevich and Voychak owned and operated an ambulette service that transported Paid Patients. They received more than $4 million in reimbursement from Medicaid for these medically unnecessary services. Miselevich and Voychak were also managers of at least one Clinic and paid cash kickbacks to the Paid Patients.

         Defendant Marina Burman (“Burman”) represented to Medicare, Medicaid and others that she was owner of Universal Supply Depot (“USD”), a company that sold DME, including adult diaper kits. Burman in fact co-owned USD with the True Owner. Between 2010 and around 2013, Medicare and Medicaid paid $3.5 million to USD as reimbursement for DME prescriptions issued by the physician Defendants. Burman knew that many of the reimbursement claims were for DME that was either medically unnecessary or not in fact provided. In many instances, Burman allowed Paid Patients to exchange their DME prescriptions for designer handbags, clothing or houseware. Burman also delivered to the Clinics packages of cash used to pay kickbacks to the Paid Patients.

         C. The Charges

         The initial indictment was returned on November 16, 2016, charging Vaid with five counts. The First Superseding Indictment was returned on January 9, 2017. The operative indictment -- the Second Superseding Indictment -- was returned on February 15, 2017, charging the ten Defendants in six counts. Counts One through Five charge each Defendant with: (1) conspiracy to commit health care fraud, mail fraud and wire fraud in violation of 18 U.S.C. § 1349; (2) health care fraud in violation of 18 U.S.C. §§ 2, 1347; (3) mail fraud in violation of 18 U.S.C. §§ 2, 1341; (4) wire fraud in violation of 18 U.S.C. §§ 2, 1343 and (5) conspiracy to make false statements relating to health care matters in violation of 18 U.S.C. §§ 371, 1035. Count Six charges five Defendants, Burman, Kataev, Tsirlin, Miselevich and Voychak, with conspiracy to violate the Anti-Kickback Statute in violation of 18 U.S.C. § 371, 42 U.S.C. § 1320a-7b(b)(2)(B).


         A. Defendant Vaid's Motion to Dismiss

         Vaid moves to dismiss the Indictment as to all counts on the basis of the statute of limitations, which is the five-year period provided by 18 U.S.C. § 3282(a). The initial indictment, which charged Vaid with five counts, was returned on November 16, 2016. As Vaid concedes, the operative indictment, which is the Second Superseding Indictment, does not allege any additional conduct with respect to Vaid. Nor did it “materially broaden or substantially amend the charges” against Vaid with respect to the allegations cited below. United States v. Rutkoske, 506 F.3d 170, 175 (2d Cir. 2007). The Indictment therefore relates back to the initial indictment, id, and the limitations period begins to run after November 16, 2011. Vaid's motion is denied because the Indictment alleges pertinent conduct occurring after November 16, 2011.

         1. Applicable Law

         “Commission of a federal crime within the statute-of-limitations period is not an element of the offense.” United States v. Martinez, 862 F.3d 223, 235 (2d Cir. 2017) (internal quotation marks and alterations omitted). Consequently, “a pre-trial motion to dismiss based on statute of limitations grounds may be premature if the indictment is facially sufficient and the defendant's argument in favor of dismissal requires a determination of factual issues.” United States v. Levine, __F.Supp.3d.__, No. 16 Cr. 715, 2017 WL 1293621, at *3 (S.D.N.Y. Apr. 7, 2017); see United States v. Alfonso, 143 F.3d 772, 777 (2d Cir.1998) (“[T]he sufficiency of the evidence is not appropriately addressed on a pretrial motion to dismiss an indictment.”). In deciding the facial sufficiency of an indictment, a court assumes the indictment's factual allegations are true. United States v. Goldberg, 756 F.2d 949, 950 (2d Cir. 1985); accord United States v. Samia, No. 13 Cr. 521, 2017 WL 980333, at *3 (S.D.N.Y. Mar. 13, 2017).

         “[T]he limitations period begins only when the purposes of the conspiracy have been accomplished or abandoned.” Martinez, 862 F.3d at 232. Thus, the statute of limitations for a conspiracy charge may be satisfied if the Government proves the defendant or one of his coconspirators “committed an overt act in furtherance of the conspiracy within the limitations period.” United States v. Rutigliano, 790 F.3d 389, 400 (2d Cir. 2015); accord Rutkoske, 506 F.3d at 174-75.

         2. Application

         The Indictment[3] is facially sufficient, and alleges the scheme continued into the relevant limitations period -- i.e., beginning on or after November 16, 2011. The Indictment charges Defendant Vaid and others with participating in a scheme to defraud Medicare, Medicaid and other insurance providers that continued through “at least in or about 2013.” It further alleges that Defendant and others, “through at least in or about 2013, ” provided to the Paid Patients prescriptions and referrals for medically unnecessary medications, transportation services and DME, such as adult diaper kits.

         As to the conspiracy charges, Counts One and Five, the statute of limitations does not warrant dismissal because the Indictment alleges that Vaid or a conspirator knowingly committed an overt act in furtherance of that conspiracy within the limitations period. These alleged overt acts include: (1) an occupational therapist and a radiologist submitting fraudulent claims in 2012 to insurance providers based upon medical referrals Vaid provided; (2) a co-conspirator negotiating a check payable from Medicaid issued to a Clinic in November 21, 2011, for services that Vaid claims to have rendered; and (3) other Defendants paying kickbacks to the Paid Patients in 2012 for receiving medically unnecessary treatment.

         Counts Two, Three and Four, which allege the underlying substantive crimes of health care fraud, mail fraud and wire fraud, are timely as charged. These Counts allege that Vaid violated 18 U.S.C. § 2, which provides in part, “Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.” Count Two charges that, at least until 2013, Vaid and others caused Medicare and Medicaid to pay fraudulent health claims for unnecessary and unperformed services purportedly provided by Vaid. Counts Three and Four similarly charge that at least until 2013, Vaid used, or caused others to use, the U.S. mails and interstate wires, respectively, in furtherance of their fraudulent scheme. Because these factual allegations must be accepted as true, the Indictment properly alleges timely conduct attributable to Vaid under 18 U.S.C. § 2. See, e.g., Rutigliano, 790 F.3d at 401 (rejecting statute of limitations challenge to mail and wire fraud case where “each of the substantive offenses was based on a mailing or wire within the applicable limitations period”); United States v. Kerik, 615 F.Supp.2d 256, 270 (S.D.N.Y. 2009) (finding that conduct attributable to the defendant under 18 U.S.C. § 2 rendered mail fraud count timely for statute of limitations purposes on motion to dismiss the indictment).

         Vaid's arguments to the contrary are unavailing. First, he claims that he was not part of any conspiracy that continued after November 16, 2011, because the Indictment fails to allege that he committed any overt acts after that date. This argument is premature. “Unless a conspirator produces affirmative evidence of withdrawal, his participation in a conspiracy is presumed to continue until the last overt act [in furtherance of the conspiracy] by any of the conspirators.” Martinez, 862 F.3d at 232-33 (internal quotation marks omitted). “Mere cessation of the conspiratorial activity by the defendant is not sufficient to prove withdrawal.” United States v. Leslie, 658 F.3d 140, 143 (2d Cir. 2011). The Indictment does not allege that Vaid withdrew by November 16, 2011, or that the conspiracy had been accomplished as of that date. Vaid's assertion that he was no longer a member of the alleged conspiracy during the limitations period must await trial. Id. (“[I]t is well-settled that withdrawal from a conspiracy is an affirmative defense for which the defendant bears the burden of proof at trial.”).

         Second, Vaid cites the Second Circuit's decision in United States v. Grimm, 738 F.3d 498, 499 (2d Cir. 2013), arguing that the alleged overt acts are insufficient because they relate merely to the results of his previous conduct. Vaid misconstrues Grimm. As the Second Circuit recently observed, Grimm articulated a “narrow exception” to “the ordinary rule . . . that a conspirator's receipt of anticipated benefits within the limitations period can, by itself, constitute an overt act in furtherance of an ongoing conspiracy.” Rutigliano, 790 F.3d at 400 (internal citation omitted); see Grimm, 738 F.3d at 499. “Grimm explained that ‘a conspiracy ends notwithstanding the receipt of anticipated profits where the payoff merely consists of a lengthy, indefinite series of ordinary, typically noncriminal, unilateral actions and there is no evidence that any concerted activity posing the special societal dangers of conspiracy is still taking place.'” Rutigliano, 790 F.3d at 400 (quoting Grimm, 738 F.3d at 502).

         In contrast to the conduct at issue in Grimm, the Indictment does not charge a “lengthy, indefinite series” of unilateral payments. 738 F.3d at 502. It alleges discrete acts that caused a Clinic, or a third-party provider, to submit fraudulent bills within the limitations period based on referrals Vaid provided; it also charges that a conspirator negotiated a single check Medicaid issued within the limitations period for services Vaid claimed to perform. Vaid's motion to dismiss the Indictment is denied. See Rutigliano, 790 F.3d at 400-01 (exception articulated in Grimm not justified where the defendant and his coconspirators “engaged, within the limitations period, in measures of concealment and other corrupt intervention” (internal quotation marks omitted)).

         B. Defendant Mathieu's Motion to Sever

         Mathieu moves to sever Count Six and the five defendants charged in Count Six from his trial pursuant to Federal Rules of Criminal Procedure 8(b) and 14(a). This count alleges that five other defendants -- Burman, Kataev, Tsirlin, Miselevich and Voychak -- conspired to violate the Anti-Kickback Statute. Antoine, Behiry and Zhitnik join the motion, and Vaid seeks to preserve his right to join in the future. The motion is denied.

         1. Applicable Law

         Federal Rule of Criminal Procedure 8(b) allows joinder of defendants “if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses.” The “‘same series of acts or transactions' language . . . mean[s] that joinder is proper where two or more persons' criminal acts are unified by some substantial identity of facts or participants, or arise out of a common plan or scheme.” United States v. Rittweger, 524 F.3d 171, 177 (2d Cir. 2008) (Sotomayor, J.) (some internal quotation marks omitted); accord United States v. Rutigliano, 614 F. App'x 542, 547 (2d Cir. 2015) (summary order). “[M]embers of two or more conspiracies may be joined as defendants even where the members have not been charged as participating in one overarching conspiracy.” Rittweger, 524 F.3d at 178. In analyzing joinder under Rule 8(b), courts must “apply a commonsense rule to decide whether, in light of the factual overlap among charges, joint proceedings would produce sufficient efficiencies such that joinder is proper notwithstanding the possibility of prejudice.” Id. (internal quotation marks omitted).

         Federal Rule of Criminal Procedure 14(a) provides in part that “[i]f the joinder of offenses or defendants in an indictment . . . appears to prejudice a defendant . . ., the court may order separate trials of counts, sever the defendants' trials, or provide any other relief that justice requires.” “[A] district court should grant a severance under Rule 14 only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.” Zafiro v. United States, 506 U.S. 534, 539 (1993); accord United States v. Cacace, 796 F.3d 176, 192 (2d Cir. 2015). “Rule 14 does not require severance even if prejudice is shown; rather, it leaves the tailoring of the relief to be granted, if any, to the district court's sound discretion.” Zafiro, 506 U.S. at 538-39. “‘[L]ess drastic measures [than severance], such as limiting instructions, often will suffice' to cure any risk of prejudice and permit joinder.” United States v. Page, 657 F.3d 126, 129 (2d Cir. 2011) (quoting Zafiro, 506 U.S. at 539).

         2. Application

         Joinder is proper under Rule 8(b). Counts One through Six evince a “common plan or scheme” to fraudulently bill Medicare and Medicaid for misrepresented services. Rittweger, 524 F.3d at 177. The Indictment alleges that Vaid, Mathieu, Antoine, Zhitnik and Behiry, together with others, provided Paid Patients prescriptions or referrals for medically unnecessary medications, transportation services, tests or DME such as adult diaper kits. The kickbacks are alleged to be integral to the scheme as they induced the Paid Patients' involvement. Contrary to Mathieu's argument, Count Six, which involves the alleged kickbacks, is not based on a “wholly separate conspiracy.” Rather, the kickback conspiracy was the means to recruit the Paid ...

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