United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
April 11, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 03-11030
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JOSEPH R. KIRKHAM; JAMES MARK MURPHY,
Defendants-Appellants.
--------------------
Appeal from the United States District Court
for the Northern District of Texas
(4:02-CR-011-Y(03))
--------------------
Before REAVLEY, WIENER, and BENAVIDES, Circuit Judges.
WIENER, Circuit Judge:*
Defendant-appellants James Murphy, M.D., and Joseph Kirkham
(collectively, “defendants”) appeal their respective criminal
convictions for health care fraud under 18 U.S.C. §§ 1347 and 2.
They raised numerous challenges to their convictions and sentences,
several of which are grounded on their argument that the government
improperly indicted them by including only one count in its
indictment while listing several other discrete executions of
defendants’ alleged scheme to commit health care fraud as examples
rather than as separate counts. Although we conclude that the
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
government’s indictment was flawed —— specifically, duplicitous ——
we hold that, because defendants experienced no prejudice as a
result of the duplicitous indictment or of any trial errors that
they asserted, their convictions should be affirmed. As for their
sentences, however, the Supreme Court’s recent decision in United
States v. Booker2 requires us to hold that defendants’ Sixth
Amendment rights were violated by the district court’s calculation
of loss and concomitant sentencing under the then-binding United
States Sentencing Guidelines. We therefore vacate defendants’
sentences and remand for re-sentencing.
I. FACTS AND PROCEEDINGS
In May 2003, a jury convicted Kirkham and Murphy of health
care fraud, in violation of 18 U.S.C. §§ 13473 and 2.4 The three-
page indictment charged each defendant with only one count,
alleging that they had executed and attempted to execute a scheme
to defraud various health care benefit plans from August 1996
2
125 S.Ct. 738 (2005).
3
Whoever knowingly and willfully executes, or attempts to
execute, a scheme or artifice--
(1) to defraud any health care benefit program . . .
in connection with the delivery of or payment for health care
benefits, items, or services, shall be fined under this title or
imprisoned not more than 10 years, or both. . .
4
(a) Whoever commits an offense against the United States
or aids, abets, counsels, commands, induces or procures its
commission, is punishable as a principal.
(b) 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.
2
through the year 2000. In October 2003, the district court
sentenced Kirkham to 120 months of imprisonment and ordered him to
pay restitution of $2,751,270. Murphy was sentenced to 87 months
of imprisonment and ordered to pay restitution of $732,061.
A. The Indictment
The government indicted Kirkham, Murphy, and Alvin Lostetter,
M.D., on one count of executing or attempting to execute a scheme
to commit fraud on health care benefit programs.5 Part A of the
indictment states the duration of the scheme, August 1996 - 2000,
its location, the defendants’ names, and the identities of several
health care benefit providers that defendants were charged with
defrauding. It goes on to describe the scheme as an effort to
“obtain by means of false and fraudulent pretenses,
representations, and promises, money owned by and under the custody
and control of health care benefit programs in connection with the
delivery of and payment for health care benefits, items, and
services.”
Part B of the indictment describes defendants’ scheme in
greater detail. It lists seven components of the scheme, including
creating phony medical business entities and names, billing under
the names of doctors who did not provide or supervise medical
services, recruiting patients with false representations, providing
false medical diagnoses, and using chiropractors and unlicensed
5
Although he was indicted with Kirkham and Murphy,
Lostetter did not go to trial with them.
3
personnel to recruit “patients” and render medical diagnoses and
treatment consistent with the scheme and the amount of health
insurance carried by the patient, rather than according to the true
medical needs of the patient. Part B also states that the health
care benefit programs provided payments to defendants based on the
submission of false claims and diagnoses, and that defendants
received and shared these proceeds pursuant to their scheme.
Part C of the indictment lists 13 particular transactions
executed or attempted to be executed in perpetrating the scheme to
defraud. Each transaction listed included the date of the billing,
the name of the medical insurance provider, the doctor’s name under
which services were billed, and the name(s) of the patient(s).
Four of these transactions named Lostetter as the physician
providing services, one transaction named Kirkham and Lostetter as
physician providers, and eight transactions named Murphy. All 13
listed transactions took place after August 1996. The indictment
does not specify which of the individually listed transactions
would be used at trial to illustrate defendants’ execution of the
scheme.
B. Health Care Clinic and Gym Scheme
The government asserted at trial that, beginning in 1993,
Kirkham, along with several other individuals, conducted a
continuing scheme to defraud health care benefit programs through
their operation of health care clinics associated with gyms and
4
health clubs; Murphy joined Kirkham in operating the scheme in
1997. Kirkham and Mark Darner, a chiropractor, operated the scheme
along with Murphy and other medical doctors, including Lostetter
and Victor McCall. Darner pleaded guilty to conspiracy to commit
mail fraud and testified about the health care fraud scheme at
Kirkham and Murphy’s trial.
Darner testified that he and Kirkham set up health care
clinics inside a number of health clubs of which they were majority
owners, and that they used the club sites to solicit and direct new
patients to the clinics. Murphy’s, Lostetter’s, and McCall’s names
were often used in billing insurers, said Darner, explaining that
insurers are more likely to reimburse and to pay a higher rate for
invoices submitted by doctors than those from chiropractors.
According to Darner, Kirkham was the CEO and principal operator of
the health clubs. He directed Darner regarding implementation of
the scheme.
Defendants implemented a standing procedure that required
each new fitness club member to be examined in the clinic. While
Murphy was associated with the clinics in 1997 and 1998, they
employed a written treatment protocol authored by Kirkham, Murphy,
and Darner. This protocol specified listed treatments to be given
to each new “patient” or gym member at the five or six clinics
being operated at the time, with explicit instructions not to
modify treatment unless it was contraindicated. Clients were
assigned treatment classifications based on their insurance
5
coverage. For the first visit of a member/client who had
insurance, the protocol required a new patient exam, range of
motion analysis, scanning EMG, thermography, and radiographs
regardless whether tests and these treatments were indicated as
required by the patient. The second automatic visit protocol
called for more extensive tests and treatment, including billing
for a number of other diagnostic tests.
Testifying at Kirkham and Murphy’s trial were (1) Darner, (2)
Victor McCall, another physician who participated in the scheme,
and (3) Charles Stafford, a staff chiropractor, as well as several
clinic “patients,” a medical transcriber, and an expert witness.
The witnesses who had participated in the scheme with defendants
described the nature of the scheme in detail, including the process
used for submitting the fraudulent claims. The clinic’s clients
testified that, after joining the health club for fitness reasons,
they were told to go to the clinic for unwanted and unnecessary
medical exams. Several clients identified false listings of
symptoms and diagnoses in their files and confirmed that claims
sent to their insurance companies were false.
The government also presented an expert witness, Charles
Crane, M.D., who testified that defendants’ billing and testing
procedures were inappropriate and fraudulent. Eeletha Williams, a
medical transcriber who worked for Murphy from 1995 to 1999
testified that most of Murphy’s patient reports contained a note
stating that the billing had been dictated but not read by Murphy,
6
even though Murphy had not dictated, reviewed, or provided any
information for the reports. She also stated that Murphy told her
on several occasions that the reports were too short and asked her
to generate more lengthy patient reports containing false
information.
C. Oxylab
Oxylab was another company of which Murphy was medical
director. Karen Musch, an employee of Oxylab, pleaded guilty to
mail fraud and testified against Murphy. Musch testified that she
served as medical director of a fraudulent sleep apnea study
conducted by Oxy-Lab, and that Murphy participated in the study
during the time that he was active in the health club scheme with
Kirkham. Musch stated that Murphy never performed or read any
sleep apnea tests, yet he submitted insurance claims purporting to
bill providers for his services related to the study. Several
insurance billings listed in Part C of the indictment were claims
processed and paid by health care benefit programs for this sleep
apnea study.
II. ANALYSIS
A. Sufficiency of the Evidence
1. Standard of Review
We review challenges to sufficiency of the evidence by
examining whether, in the light most favorable to the government,
a rational jury could have found the essential elements of an
7
offense to be established beyond a reasonable doubt.6
2. The Evidence
Defendants’ challenge to the sufficiency of the evidence
rests, in large part, on their assertion that the government’s one-
count indictment against them was flawed. They contend that,
according to our decision in United States v. Hickman, when
charging defendants with violations of the health care fraud
statute, 18 U.S.C. § 1347 (“§ 1347"), the government is required to
charge each execution of their fraudulent scheme in a separate
count.7 In this case, the government included a list of
“executions” in the one-count indictment but did not single out any
specific acts on which the jury must have agreed to convict.
Defendants contend that this is contrary to Hickman and, because of
this defect in the indictment, the evidence was insufficient to
support their convictions. They insist that the government was
required to (1) list each execution of the scheme separately and
(2) prove the commission of each execution listed in the
indictment.
In addition to their Hickman argument, defendants assert that
their indictment was duplicitous, i.e., that it charged in a single
6
United States v. Solis, 299 F.3d 420, 445 (5th Cir. 2002).
7
See 331 F.3d 439, 446 (5th Cir. 2003), on remand at 282
F. Supp. 2d 528 (S.D. Tex. 2003), affirmed by 374 F.3d 275 (5th
Cir. 2004), vacated and remanded for re-sentencing in accordance
with United States v. Booker, 125 S.Ct. 738 (2005), 125 S.Ct.
1043 (2005).
8
count that which could have been charged in separate counts.8
Finally, defendants argue that, because several of the transactions
enumerated in Part C list Victor Lostetter as the physician who
provided the treatment, and the government did not produce evidence
to prove that these transactions were fraudulent, the government
did not meet its burden of proof with respect to these
transactions. We address defendants’ challenge to their indictment
in some detail, as it reappears several times, underlying many of
the other challenges to their convictions and to their sentences.9
First, defendants are mistaken in their assertion that Hickman
requires the government to charge health care fraud defendants for
each separate execution of their scheme to defraud health care
benefit providers. In Hickman, we held that the health care fraud
statute, like the bank fraud statute,10 criminalized executions of
schemes to defraud, in contrast to the mail and wire fraud
statutes, which permit the government to charge a defendant for
each act in furtherance of a scheme to defraud.11 We did not hold
that the government must charge defendants with each separate
8
See United States v. Baytank, 934 F.2d 599, 609 (5th Cir.
1991).
9
The defendants do not directly challenge the indictment
itself on appeal but argue only that, because the indictment was
duplicitous, this error contributed to other trial errors.
10
18 U.S.C. § 1344.
11
331 F.3d at 446 (citing United States v. Lemons, 941 F.2d
309 (5th Cir. 1991) for this interpretation of the bank fraud
statute).
9
execution of § 1347, stating instead that, as a health care fraud
may be executed several times, the government could charge each
execution in a separate count.12 In essence, we sought to clarify
that the government may not indict defendants for violations of §
1347 without charging that they fully executed a scheme, as
distinguished from only committing overt acts in furtherance of its
execution.
Other circuits have encountered similar challenges to single-
count indictments brought under the bank fraud statute and have
agreed that, although the government may charge defendants for each
execution of the scheme, it is not required to do so.13 The Seventh
Circuit’s reasoning, endorsed by the Ninth and D.C. Circuits,
explained that:
[F]or each count of conviction, there must be an
execution. However, the law does not require the
converse: each execution need not give rise to a
charge in the indictment. The indictment in this case
sets forth the existence of the scheme and alleges the
scheme was executed on at least one occasion. The
allegations tending to demonstrate the existence of
12
331 F.3d at 446 (“Of course, although the crime of health
care fraud is complete upon the execution of a scheme, any scheme
can be executed a number of times, and each execution may be
charged as a separate count.”)(emphasis added).
13
United States v. King, 200 F.3d 1207, 1212-13 (9th Cir.
1999)(rejecting a defendant’s due process and double jeopardy
challenges to a one-count indictment); United States v. Bruce, 89
F.3d 886, 889-90 (D.C. Cir. 1996)(holding that the government
need not indict a defendant on every execution of a bank fraud
scheme); United States v. Hammen, 977 F.2d 379, 383-84 (7th Cir.
1992)(upholding a one-count indictment despite allegations in the
indictment that could, if worded and structured differently, be
chargeable as individual counts).
10
the scheme do appear to be allegations that, if worded
and structured differently, might constitute
additional executions. This is hardly surprising; the
actions that tend to prove the existence of the scheme
will often be the actions actually taken to execute
the scheme.14
Each court also emphasized, however, that to avoid duplicity, the
government must carefully craft its indictment to include only one
execution of a scheme in a count.15
As the government was not required to charge Kirkham and
Murphy with each execution of the scheme, but instead could indict
them for the scheme by charging only one execution, we must
determine whether the government carefully crafted its indictment
to charge only one execution, and thereby avoid a duplicitous
indictment. We begin by defining “executions” of a scheme to
determine whether more than one is charged in a single-count.
In Hickman, we described an “execution” under § 1347 in the
same manner as an execution of § 1344, the bank fraud statute,
viz., that transactions with a common purpose but involving
separate and independent obligations to be truthful may constitute
separate executions.16 The process of defining “execution of a
scheme” is a fact-intensive one in which we consider such factors
14
Hammen, 977 F.2d at 383; see also King, 200 F.3d at 1213;
Bruce, 89 F.3d at 889-90.
15
See King, 200 F.3d at 1213; Bruce, 89 F.3d at 890;
Hammen, 977 F.2d at 384.
16
Id., citing United States v. De La Mata, 266 F.3d 1275,
1287 (11th Cir. 2001).
11
as (1) the ultimate goal of the scheme, (2) the nature of the
scheme, (3) the benefits intended, (4) the interdependence of the
acts, and (5) the number of parties involved.17
In Hickman, the defendant was accused of billing Medicare,
Medicaid, and a variety of private insurance companies in a series
of fraudulent transactions.18 Applying the foregoing factors and
other prior interpretations of § 1344 (the bank fraud statute) to
§ 1347, we held the fourth factor, interdependence, to be
dispositive.19 The defendant submitted each claim separately and,
with each submission, owed a new and independent obligation to be
truthful to the insurer.20 Therefore, each claim submission was a
separate execution of the scheme.21
The government indicted Kirkham and Murphy for virtually the
same conduct —— submitting false claims to a variety of health
insurers —— as that for which it had prosecuted the Hickman
17
Id., citing De La Mata, 266 F.3d at 1288 (citations
omitted).
18
Id. at 441.
19
Id. We concluded that the other four factors were
unhelpful: The nature of the scheme was to submit false claims to
health insurers; the benefit was the money rendered by the
insurer to the defendant; financial gain was the ultimate goal;
and the defendant defrauded several parties, although she
primarily targeted Medicare and Medicaid. Id. at 446-47. These
factors are identical in the instant case, except that Kirkham
and Murphy targeted a wider variety of health care benefit
providers than had Hickman.
20
Id.
21
Id.
12
defendant. As in Hickman, these defendants submitted numerous
false claims to a variety of health insurers which were not
interdependent, with financial gain as defendants’ ultimate goal.
We conclude that, as in Hickman, each false claim submitted to an
insurer constituted an execution of Kirkham and Murphy’s scheme.22
The indictment itself appears so to define the listed claims, as it
states that “[i]n execution and attempting to execute the scheme.
. . medical claims were submitted and caused to be submitted by the
defendants. . .” before listing in Part C the separate claims
submitted by defendants. We are satisfied that Part C of the
indictment did charge defendants in one count with several
executions of their scheme when it listed 13 false claims submitted
without specifying which of these claims would be used at trial to
demonstrate that defendants executed their scheme.
Section 1347 does not criminalize the scheme alone —— the
government must prove at least one execution of the scheme, and the
indictment should specify which execution of the scheme will be
used.23 The indictment brought against Kirkham and Murphy lists 13
allegedly fraudulent claims without singling out one particular
22
Ordinarily, the process of defining a scheme under the
health care fraud, or the bank fraud, statute, would be more
laborious. In this case, the facts are so similar to the facts
set forth in Hickman that we see no need to re-hash an
explanation of why the defendants’ conduct constituted executions
of the scheme in greater detail. See 331 F.3d at 446-47.
23
See Hammen, 977 F.2d at 383.
13
claim as the one for which liability will be imposed.24 Had the
indictment listed several transactions as examples of executions of
the schemes but had also been “carefully crafted” to identify one
specific transaction that constituted execution of the scheme and
on which the jury must agree before convicting defendants, the
indictment would not have been duplicitous; however, it did not do
so.25
Despite this flaw in the indictment, though, the government
adduced trial evidence sufficient to sustain defendants’
convictions. With respect to Murphy, in addition to evidence of
the broader fraudulent scheme, two of the patients listed in Part
C as “treated” by Murphy, Joyner and Hancock, testified at trial as
did Stafford, the chiropractor involved with their treatment. All
three confirmed that Murphy’s billings for services ostensibly
provided by him to these patients were fraudulent. As for the six
patients listed in Part C as receiving sleep apnea services billed
by Murphy as part of the OxyLab study, the government also produced
ample evidence of fraud. The patients’ testing and Medicare claim
records were introduced into evidence, and the director of OxyLab
24
See Bruce, 89 F.3d at 890 (holding valid a one-count bank
fraud indictment listing acts taken in furtherance of the scheme
but that could have been charged separately as executions,
because the indictment specified one fraudulent transaction taken
“for the purpose of executing. . .”).
25
See id.; Hammen, 977 F.2d at 383 (upholding one-count
indictment and noting that “the government has carefully crafted
the indictment to allege only one execution of an ongoing scheme
that was executed numerous times.”).
14
testing, Karen Musch, testified as to Murphy’s negligible
involvement in the study and in services for which fraudulent
claims were submitted to insurers. The government produced
sufficient evidence to support the jury’s verdict on every one of
the executions listed in Part C of the indictment as being
submitted by Murphy.
Substantial evidence also supported Kirkham’s conviction for
his role in this health care clinic scheme. Darner testified that
he and Kirkham originally set up the scheme and handled all billing
themselves. Darner also testified that he, Kirkham, and Murphy
conspired to commit health care fraud by fraudulently billing
insurance companies, and that Kirkham was the “main boss” of the
operation. And, McCall, a medical doctor, testified that he
participated in the scam with Kirkham and Darner after Murphy had
left the clinic. Even though the government included only one
execution of the scheme in which Kirkham was listed as the medical
provider and did not produce the named patient as a witness at
trial, the overwhelming evidence of Kirkham’s involvement with the
scheme and significant participation in the billing procedures
support a finding that he worked with Murphy to execute the scheme
on the other listed occasions.
The government need not prove all facts alleged in the
indictment as long as it proves the essential elements of the
15
crime.26 In this case, the government was required to show that the
defendants: (1) knowingly and willfully (2) executed or attempted
to execute (3) a scheme or artifice (4) to defraud any health care
benefit program (5) in connection with the delivery of or payment
for health care benefits, items, or services27; or that they (a)
aided, abetted, counseled, commanded, induced or procured such an
offense or (b) willfully caused an act to be done which, if it had
been directly performed by the defendant, would have constituted
such an offense.28 Even if we assume that the government did not
adduce adequate evidence to support conviction for the claims
listing Lostetter as the physician provider, it presented ample
evidence to prove each element of the offense with respect to each
defendant.29 For this reason we also reject defendants’ argument
that the government failed to meet its burden of proof with respect
to fraudulent transactions listed in the indictment that identified
26
United States v. Robinson, 974 F.2d 575, 578 (5th Cir.
1992).
27
18 U.S.C. § 1347(1).
28
18 U.S.C. § 2.
29
See Griffin v. United States, 502 U.S. 46, 49, 58-59
(1991)(holding that, although petitioner was convicted of
conspiracy despite the government’s failure to present any
evidence linking the petitioner to one of the two illegal objects
of the conspiracy as stated in the indictment, this did not
require reversal of the jury’s verdict as there was evidentiary
support for the other object. Although reversal is appropriate
where a jury’s verdict may have rested on a legally inadequate
basis, such is not the case when one possible basis of conviction
was unsupported by sufficient evidence, as juries are perfectly
well equipped to evaluate the evidence).
16
Lostetter as the treating physician.30
In sum, even though the indictment was flawed, making it
somewhat more difficult to ascertain for which of the executions
the jury convicted defendants, the government produced sufficient
evidence to support the jury’s finding that Murphy and Kirkham were
each responsible for at least one listed execution of the scheme.
We hold that the indictment’s flaw did not affect defendants’
substantial rights and that the evidence was sufficient to support
the jury’s verdict beyond a reasonable doubt.
B. “Void for Vagueness” Statutory Challenge
1. Standard of Review
We review challenges to the constitutionality of a statute de
novo.31
2. Vagueness
Defendants charge that, under the circumstances of this case,
§ 1347 is “void for vagueness.” Their argument rests largely on
claimed deficiencies in the jury instructions and in the
indictment, which we discuss elsewhere in this opinion. Otherwise,
defendants contend that, because the statute does not define
“execution or attempt to execute” a health care fraud scheme, it
did not adequately put them on notice that their conduct could be
30
As we noted above, Lostetter was indicted with the
defendants but was not tried with them.
31
United States v. Monroe, 178 F.3d 304, 308 (5th Cir.
1999).
17
illegal.
The Supreme Court requires that Congress define criminal
offenses with “sufficient definiteness that ordinary people can
understand what conduct is prohibited and in a manner that does not
encourage arbitrary and discriminatory enforcement.”32 Each
vagueness challenge that does not involve First Amendment freedoms
must be examined in light of its individual facts and
circumstances.33 A challenge that a statute is unconstitutional for
vagueness is closely related to an objection that a statute does
not require a showing of specific intent.34 If a statute does
include “willfulness” or specific intent as an element, it will
normally not be so vague as to deprive a defendant of reasonable
notice that his conduct is proscribed.35 Accordingly, we have
upheld the constitutionality, against vagueness challenges, of both
32
Kolender v. Lawson, 461 U.S. 352, 357 (1983).
33
United States v. Gray, 96 F.3d 769, 776 (5th Cir. 1996).
34
United States v. Waymer, 55 F.3d 564, 568 (11th Cir.
1995)(holding that, as the bank fraud statute incorporates
specific intent as an element, the defendant’s vagueness
challenge to the statute must fail).
35
Screws v. United States, 325 U.S. 91, 102 (1945) (“But
where the punishment imposed is only for an act knowingly done
with the purpose of doing that which the statute prohibits, the
accused cannot be said to suffer from lack of warning or
knowledge that the act which he does is a violation of law. The
requirement that the act must be willful or purposeful may not
render certain, for all purposes, a statutory definition of the
crime which is in some respects uncertain. But it does relieve
the statute of the objection that it punishes without warning an
offense of which the accused was unaware.”).
18
the bankruptcy fraud statute and former 18 U.S.C. § 1346, the
general anti-fraud statute, because each requires the government to
prove specific intent to defraud —— as does § 1347.36
Defendants do not contest that the jury was required to find
that they acted with specific intent to defraud a health care
benefit provider, or that the indictment adequately described the
overall scheme to defraud health care benefit providers. Although
the indictment itself may have been flawed, leaving defendants
somewhat unsure which of the 13 listed executions of the scheme the
government would attempt to prove at trial, neither the statute nor
the indictment left defendants guessing at what conduct the
government alleged was fraudulent, whom they defrauded, or how.
Defendants’ real objection appears to be the fact that the
indictment did not separately charge each execution of their scheme
to defraud health care benefit programs, which, as we observed
above, it was not required to do. Defendants do not advance that
they did not understand what it meant to execute the scheme to
defraud and therefore could not have intentionally violated the
statute. We hold that defendants’ vagueness challenge to the
constitutionality of the health care fraud statute fails.
C. Motion for Bill of Particulars
1. Standard of Review
36
Id., United States v. Daniels, 247 F.3d 598, 600 (5th
Cir. 2001). In Daniels, we concluded that there is nothing
“inherently vague in the notion of a general anti-fraud statute.”
Id.
19
We review denial of a motion for a bill of particulars for
abuse of discretion.37 Only defendant Murphy moved for a bill of
particulars, however, so our review as to defendant Kirkham is for
plain error.
2. Bill of Particulars
The purpose of a bill of particulars is to apprise a defendant
of the charges against him with enough detail to allow him to
prepare his defense.38 A criminal defendant must demonstrate that
he was actually surprised at trial, and thereby prejudiced in his
substantial rights, before we will reverse a conviction based on a
district court’s denial of a motion for a bill of particulars.39
As we concluded above, the indictment returned against Kirkham
and Murphy was duplicitous; nevertheless, it gave defendants
adequate notice of the charges against them. The language of the
indictment clearly describes the essential elements of the crime
and charges that defendants “knowingly and willfully executed, and
attempted to execute, a scheme and artifice to defraud health care
benefit programs. . .” This tracks the language of § 1347, which
37
United States v. Lavergne, 805 F.2d 517, 520 (5th Cir.
1986).
38
United States v. Montemayor, 703 F.2d 109, 117 (5th Cir.
1983).
39
Lavergne, 805 F.2d at 521 (“The fact that the indictments
are only thus decipherable falls short of the precision desirable
in an indictment. But a finding that no bill of particulars was
needed also rests on the fact appellants have not made the
requisite showing of surprise. . .”).
20
states “whoever knowingly and willfully executes, or attempts to
execute, a scheme or artifice to defraud any health care benefit
program,”40 and makes clear which subsection of the statute
defendants were being charged with violating. The indictment goes
on to name six insurance companies that defendants allegedly
defrauded, and, in seven paragraphs under Part B, the specific
scheme or artifice by which defendants allegedly defrauded them.
The time frame of the scheme, August 1996 through 2000, is also
included. Part C of the indictment lists 13 allegedly fraudulent
medical claims, including dates and the names of insurance
providers, doctors, and patients, submitted by defendants in their
execution of the scheme.41 The government obviously provided enough
information to the defendants to give them notice of the charges
against them.
In any event, Murphy (and, for that matter, Kirkham) was
neither surprised nor prejudiced at trial by the court’s failure to
grant his motion for a bill of particulars. The government
provided both defendants with voluminous discovery, including the
testimony and exhibits eventually introduced against them at
40
18 U.S.C. § 1347(1).
41
Five of these claims listed Lostetter as the doctor who
allegedly provided services to the patient; as noted infra,
Lostetter was originally indicted along with Kirkham and Murphy
but did not go to trial with them. Therefore, the government did
not present evidence as to these transactions.
21
trial.42 Moreover, even if the indictment had not furnished
adequate information about the charges brought against defendants,
the government’s providing them with the necessary information in
another satisfactory form obviated the need for a bill of
particulars.43 We are convinced that defendants were not actually
taken by surprise at trial, so the trial court’s denial of the bill
of particulars did not prejudice them.44
D. 404(b) Challenge
1. Standard of Review
We review challenges to the admission of evidence for abuse of
discretion.45
2. Extrinsic Evidence of Bad Acts
42
See Lavergne, 805 F.2d at 521 (holding that defendants
had not been surprised or prejudiced by facts used to support the
government’s case because the government had made the evidence
used at trial available for inspection and copying by the
defendants’ attorneys or investigators).
43
United States v. Vasquez, 867 F.2d 872, 874 (5th Cir.
1989).
44
See United States v. Montemayor, 703 F.2d 109, 117 (5th
Cir. 1983).
45
United States v. Stouffer, 986 F.2d 916, 924 (5th Cir.
1993)(citing United States v. Liu, 960 F.2d 449, 452 (5th Cir.
1992). Defendants made a 404(b) challenge only to the admission
of the testimony of Lydia Roberts, a patient/client of the
clinic; the trial court also admitted testimony of other patients
and patient files not listed in the indictment, to which the
defendants did not object. Although review of this other
evidence should rightfully be for plain error, as we hold that
the court did not abuse its discretion with respect to admission
of any of the evidence at issue here, it obviously did not commit
plain error either.
22
Defendants challenge the trial court’s admission of evidence
of fraudulent transactions that were not specified in the
indictment. They contend that these transactions constitute
evidence of extrinsic bad acts, requiring the trial court to weigh
the probative value of the evidence against unfair prejudice to the
defendants as a result of its admission.46 Defendants argue further
that, as the government did not disclose its intention to introduce
this evidence at trial pursuant to defendants’ 404(b) motion to
disclose, they did not receive fair notice that such evidence would
be introduced against them at trial.
If the existence of a scheme to defraud is an element of the
offense, then acts and transactions constituting a part of that
continuing offense are admissible as proof of the criminal
enterprise.47 Evidence of an uncharged offense arising out of a
scheme or artifice to defraud is not “extrinsic” within the meaning
of 404(b) and thus not excludable on this ground.48 The prosecution
46
See United States v. Dula, 989 F.2d 772, 777 (5th Cir.
1993).
47
See id. at 777-78.
48
Id. See also Stouffer, 986 F.2d at 926 (“[E]vidence
relevant to establish the existence of a criminal enterprise is
not extrinsic to the crime charged.”); United States v. Lokey,
945 F.2d 825, 834 (5th Cir. 1991)(holding evidence of similar
crimes committed outside the temporal scope and substantive
counts of the indictment admissible “because it was relevant to
establish how the conspiracy came about, how it was structured,
and how each appellant became a member”); United States v.
Nichols, 750 F.2d 1260, 1264-64 (5th Cir. 1985)(holding evidence
of defendant’s involvement in uncharged crimes admissible as it
was intrinsic to the government’s case in proving the existence
23
may offer evidence of any surrounding circumstances that are
relevant to prove intent or motive with respect to the fraudulent
scheme.49
All the evidence challenged by Murphy and Kirkham concerned
other transactions that tended to show the existence of the
continuing scheme to defraud insurers. The evidence introduced by
the government was undeniably relevant to proving defendants’
intent or motive with respect to the fraudulent scheme. Most
telling is the fact that defendants did receive fair notice of this
evidence, as the government either produced or allowed defendants
access to all of it well in advance of trial. The district court
did not abuse its discretion in admitting this evidence.
E. Jury Instructions
1. Standard of Review
Appellants did not challenge the jury instructions at trial or
proffer any alternative instructions of their own. We therefore
review their complaints about the instruction for plain error.50
of a conspiracy).
49
Id.
50
United States v. Hickman, 331 F.3d 439, 443 (5th Cir.
2003), on remand at 282 F. Supp. 2d 528 (S.D. Tex. 2003),
affirmed by 374 F.3d 275 (5th Cir. 2004), vacated and remanded
for re-sentencing in accordance with United States v. Booker, 125
S.Ct. 738 (2005), 125 S.Ct. 1043 (2005). Defendants charge that
to challenge the instructions would have been futile and refer us
to United States v. Velarde-Gomez, 224 F.3d 1062, 1074 (9th Cir.
2000), in which the Ninth Circuit allowed a “pointless formality”
exception to the requirement for formal objections to jury
instructions. This decision was vacated by an en banc re-
24
2. Contested Jury Instructions
Defendants contest the trial court’s instruction to the jury
that it was not necessary for the government to prove “all the
details alleged in the indictment concerning the precise nature and
purpose of the alleged scheme.” They take issue as well with the
court’s instruction that “it must be proven beyond a reasonable
doubt that the defendants knowingly devised or intended to devise
a scheme substantially similar to that charged in the indictment
and that they executed or attempted to execute the same.” These
instructions, defendants argue, may have caused them to be found
guilty of uncharged conduct or may have resulted in a non-unanimous
verdict.
The government responds first by pointing out that the
instructions at issue required the jury to convict only for conduct
charged in the indictment. It acknowledges, however, that the
indictment charged multiple executions of a scheme in but a single
count, and that this potentially posed a danger of a non-unanimous
verdict. Conceding that a special unanimity instruction would have
avoided this claimed problem with the indictment,51 the government
hearing, 269 F.3d 1023 (9th Cir. 2001). The Ninth Circuit’s
rule, established by other cases, requires that a defendant offer
an alternative instruction, which the defendants in this case do
not claim to have done. See United States v. Kessi, 868 F.2d
1097, 1102 (9th Cir. 1989).
51
See United States v. Baytank, 934 F.2d 599, 609 (5th
Cir. 1991) (“[T]he complaint comes down to whether the jury
instructions were sufficient, as it is clear that this aspect of
a duplicity problem can be cured by appropriate special
25
nevertheless contends that the court’s general unanimity
instruction (“Your verdict must be unanimous as to each defendant
named in the indictment.”) was sufficient. Citing our decision in
United States v. Tucker, the government goes on to argue that,
absent evidence to the contrary, a court has no reason to assume
that a verdict is not unanimous.52
The government argues further that defendants have produced no
evidence that they were prejudiced. The key issue at trial was
whether defendants’ business was a fraudulent scheme under § 1347.
As there is no question that, if the business was fraudulent,
defendants executed the fraud numerous times, argues the
government, there is little danger that the jury convicted
defendants non-unanimously.
Although the indictment was duplicitous and did create the
potential risk of a non-unanimous verdict, the district court
instructed the jury that it must find that defendants had executed
or attempted to execute the fraudulent scheme. As we noted above
in our discussion of defendants’ challenge to the sufficiency of
the evidence, there was ample evidence supporting the government’s
charges as to several of the executions of the scheme listed in the
indictment, and there is no real danger that the jury did not agree
instructions which . . . inform the jury that it must unanimously
agree on the specific basis . . . on which it finds the defendant
guilty”)(emphasis in original).
52
345 F.3d 320, 336 (5th Cir. 2003).
26
that defendants had executed the scheme. Even if the district
court might have erred in not giving a special unanimity
instruction to cure the defect in the indictment, such omission did
not prejudice defendants.53
F. Ex Post Facto Conduct
1. Standard of Review
Defendants did not raise this argument before the district
court. We therefore review it for plain error.54
2. Conduct Predating the Statute of Conviction
Defendants argue that, by presenting evidence of their conduct
that took place prior to the August 1996 effective date of § 1347,
the government violated the Constitution’s Ex Post Facto clause.
In response the government emphasizes that (1) the indictment
specified that the criminal scheme extended from August 1996 until
2000, (2) the only executions listed in the indictment took place
after August 1996, and (3) the district court instructed the jury
that it must find a scheme or plan to defraud “substantially the
same as the one alleged in the indictment.” Although the
government did adduce evidence relating to pre-enactment conduct,
53
See, e.g., Baytank, 934 F.2d at 610 (holding no plain
error where court did not give special unanimity instruction on
single count, duplicitous indictment); United States v. Razo-
Leora, 961 F.2d 1140, 1146-47 (5th Cir. 1992) (finding no plain
error despite trial court’s failure to give special unanimity
instruction on duplicitous indictment).
54
United States v. Richards, 204 F.3d 177, 197 n.6 (5th
Cir. 2000).
27
this evidence demonstrated the existence of a continuing offense
and, as it was not listed in the indictment, could not have been
the conduct for which the jury convicted defendants.
A law violates the Ex Post Facto clause if it punishes acts
that, when committed, were not criminal.55 In Hickman, we held
invalid the defendant’s conviction on three specific counts under
§ 1347 for violation of the Ex Post Facto clause.56 Although we
noted that a scheme to commit health care fraud is a continuing
offense, we found that these three counts charged behavior that had
been fully executed before the effective date of the statute.57
With respect to continuing offenses in general, however, the
Ex Post Facto clause is not violated by application of a statute to
a continuing scheme that began before the effective date of a
statute but continued thereafter.58
Unlike the Hickman indictment, the one-count indictment
against Kirkham and Murphy did not charge them on or list any
individual counts or executions of transactions that were fully
executed before the effective date of the statute. In fact, all of
the executions listed in the indictment involved transactions that
55
Hickman, 331 F.3d at 445.
56
331 F.3d at 447.
57
Id. at 447.
58
United States v. Duncan, 42 F.3d 97, 104 (2d Cir. 1994);
United States v. Garfinkel, 29 F.3d 1253, 1259-60 (8th Cir.
1994). See also Hammen, 977 F.3d at 385.
28
took place well after August 1996, and each “patient” who testified
at trial was billed after 1998. There is no danger that defendants
were convicted on the basis of their pre-enactment behavior.59 We
hold that, as no Ex Post Facto violation occurred, the trial court
did not err by admitting the evidence in question.
G. Calculating the Amount of Loss
Defendants also challenge the district court’s sentencing
calculation of the amount of loss caused by their fraudulent
activity. To avoid an Ex Post Facto violation at sentencing, both
defendants were sentenced under the 2000 edition of the United
States Sentencing Guidelines (“U.S.S.G.”). The court calculated a
base offense level of six for a violation of § 1347 under former
U.S.S.G. § 2F1.1(a) and adopted the intended-loss figures reported
in defendants’ Presentence Investigation Reports (PSR) in applying
offense level enhancements under § 2F1.1.
Kirkham’s PSR reported an intended loss of $6,654,634,
resulting in a 14-level enhancement under § 2F1.1(b)(1)(O);
Murphy’s PSR reported an intended loss of $ 1,709,826, resulting in
a 12-level enhancement under § 2F1.1(b)(1)(M). For its calculation
59
See United States v. Todd, 735 F.2d 146, 150 (5th Cir.
1984)(holding that evidence of conduct occurring prior to
enactment of criminal statute did not violate ex post facto
clause because the indictment for conspiracy included only two
overt acts that occurred prior to the effective date of the
statute and most —— but not all —— of the evidence presented at
trial focused on events that took place after the effective
date.) In Todd we also relied on the fact that, as in the
instant case, the record clearly established violations of the
relevant statute after its effective date. Id.
29
of restitution, the district court adopted the actual loss amounts
stated in defendants’ respective PSRs, resulting in a restitution
order of $2,751,270 for Kirkham and $732,061 for Murphy. Although
the district court computed defendants’ sentences by including
various other enhancements and adjustments, on appeal they
challenge only the calculation of loss, intended and actual.
The Supreme Court’s recent decision in United States v.
Booker makes clear that imposition of a sentence based on facts
found by the sentencing judge rather than by a jury or a confessing
defendant, under a mandatory sentencing guidelines regime, violates
a defendant’s Sixth Amendment rights.60 Under Booker, defendants
clearly experienced such a violation of their constitutional rights
when the trial court included in its loss calculations amounts not
admitted by defendants or proved to the jury beyond a reasonable
doubt.61 We recently held, in United States v. Mares, that when a
defendant has preserved his Sixth Amendment/Booker objection in the
district court by an objection to his sentencing, we will
ordinarily vacate and remand, unless we can say that the error is
harmless under Rule 52(a) of the Federal Rules of Criminal
60
125 S.Ct. 738, 750-51 (2005).
61
See 125 S.Ct. at 751, 769 (upholding circuit court’s
holding that, as the district court had applied the Guidelines as
written and imposed a sentence higher than the maximum authorized
solely by the jury’s verdict, based on its finding that the
defendant had possessed 566 grams of cocaine in addition to the
50 grams found by the jury, the defendant’s Sixth Amendment
rights had been violated).
30
Procedure.62 Although neither Booker nor its earlier state-
Guidelines analog, Blakely v. Washington,63 had been decided at the
time of defendants’ sentencing hearings, we hold —— and the
government concedes —— that objections made by defendants at their
sentencing hearings were sufficient to invoke their Sixth Amendment
rights to the extent necessary to preserve their Booker objections.
We hold further that defendants have preserved this argument on
appeal, as they briefed their challenge to the district court’s
calculation of loss using amounts not found by a jury, specifically
citing Blakely in their reply briefs that were filed with us after
Blakely was decided but before Booker.
Defendant Kirkham objected to the court’s calculations by
arguing that “[t]he loss, if any, must be proved in Court. The
government never attempted to prove any dollar loss in this case.
Therefore, any loss attributable to Kirkham must be restricted to
that alleged in the indictment.” Murphy made a similar objection
to the court’s calculations, stating that he objected “to the
method of computing [his] punishment and fine or restitution
without determining which scheme or attempted schemes were actually
found by the jury to be executed.” He went on to insist that he
“may be punished only for conduct found by the jury to be
fraudulent on the allegations in paragraph C in the indictment. .
62
No. 03-21035, 2005 U.S. App. LEXIS 3653, at *24 n.9 (5th
Cir. Mar. 4, 2005).
63
124 S.Ct. 2531 (2004).
31
. .” Even though neither defendant expressly cited Apprendi,
Blakely, or the Sixth Amendment in his objections at his sentencing
hearing, we hold that the above-quoted language, challenging the
district court’s sentencing based on facts —— the quantum of actual
or intended loss —— not found by a jury was sufficient to inform
the district court that defendants objected to their sentences
under the Sixth Amendment. They thereby preserved their Booker
objections to the district court’s calculation of loss.64
As we stated in Mares, we will ordinarily vacate a defendant’s
sentence when he has preserved an objection to a Booker Sixth
Amendment violation and we find the violation not to be harmless
error.65 Rule 52(a) of the Federal Rules of Criminal Procedure
64
See, e.g., United States v. Dowling, No. 04-10464, 2005
U.S. App. LEXIS 4725 at *7 - 13 (11th Cir. Mar. 23, 2005)(holding
that, in order to preserve a Booker objection, a defendant must
make a “constitutional” objection at sentencing, which may
include citing Apprendi, the Sixth Amendment, or the defendant’s
right to have facts found by a jury instead of a judge); United
States v. Selwyn, 398 F.3d 1064, 1066-67 (8th Cir. 2005)(holding
that defendant had preserved his Sixth Amendment challenge to his
sentence by objecting to drug quantity findings at his sentencing
hearing); United States v. Fox, 396 F.3d 1018, 1027 (8th Cir.
2005)(finding that defendant had preserved his Sixth Amendment
Booker objection to drug quantity finding by objecting to PSR’s
recommendation that he be found responsible for a greater
quantity of methamphetamine than that for which the jury had
convicted him). We requested supplemental briefing from both
parties after publication of the Court’s Booker decision and we
note that the government also concedes that the defendants have
preserved their Booker objections.
65
2005 U.S. App. LEXIS 3653 at *24 n.9. We note, however,
that the Court’s Booker opinion appears to suggest that we engage
in a harmless error analysis only in cases not involving a Sixth
Amendment violation. See 125 S.Ct. at 769 (“[I]n cases not
involving a Sixth Amendment violation, whether resentencing is
32
provides that a harmless error is “any error, defect, irregularity
or variance that does not affect substantial rights” and such error
“must be disregarded.” When harm is in question, we must determine
whether such an error is harmless beyond a reasonable doubt before
we will vacate a defendant’s sentence; unlike plain error analysis,
the government, not the defendant, bears the burden of persuading
us that an error did not affect the defendant’s substantial
rights.66
warranted or whether it will instead be sufficient to review a
sentence for reasonableness may depend upon application of the
harmless-error doctrine.”)(emphasis added). In cases involving
particular constitutional violations, the Court has held that
these defects “infect the entire trial process” and by their
nature “necessarily render a trial fundamentally unfair,”
therefore obviating the need, once such a constitutional
violation has been identified, for further analysis before
reversing a defendant’s sentence. Neder v. United States, 527
U.S. 1, 8 (1999)(listing such errors as complete denial of
counsel, trial before a biased judge, racial discrimination in
selection of grand jury, denial of public trial, and defective
reasonable-doubt instruction as errors requiring reversal of a
defendant’s conviction because of their inherent harmfulness).
As the government does not argue that the trial court’s error was
harmless in this case, however, we decline to speculate whether
such an analysis would be necessary under these circumstances.
66
Neder, 527 U.S. at 15; United States v. Olano, 507 U.S.
725, 734 (1993)(noting that, unlike harmless error analysis, in
which the government bears the burden of showing no prejudice to
the defendant’s rights, plain error analysis places this burden
on the defendant); United States v. Wheeler, 322 F.3d 823, 828
(5th Cir. 2003)(“Unlike the harmless error analysis, it is the
defendant rather than the Government who bears the burden of
persuasion with respect to prejudice.”)(citing Olano, 507 U.S. at
734); United States v. Tello, 9 F.3d 1119, 1131 (5th Cir.
1993)(stating that, as the party seeking to preserve the
defendant’s sentence under harmless error analysis, the
government bears the burden of persuading the court that the
district court would have imposed an identical sentence absent an
33
The government does not argue in this case that the district
court’s employment of the Sentencing Guidelines as mandatory did
not affect defendants’ substantial rights; rather, the government
agrees that we must vacate defendants’ sentences and remand for re-
sentencing. We glean no indication from the record on appeal that
the mandatory nature of the Guidelines and the facts found by the
court rather than by the jury did not affect the length of
defendants’ sentences.67 We therefore vacate their sentences and
remand for re-sentencing.
III. CONCLUSION
Although the defendants’ indictment was technically
duplicitous, they waived this argument by not raising it before
trial, and they have not suffered substantial prejudice to their
rights as a result of the flawed indictment. Defendants have not
shown that the district court erred or, if it did, that the error
affected their substantial rights with respect to any of their
other challenges to their conviction. We therefore affirm
defendants’ convictions.
Not so for their sentences. As defendants preserved their
objections to the district court’s calculation of loss under the
erroneous application of the guidelines).
67
See United States v. Rogers, 126 F.3d 655, 661 (5th Cir.
1997)(“The misapplication of a guideline is harmless error if the
district court would have imposed the same sentence even in the
absence of the error. . . The question is not whether the
district court could have chosen the same sentence, but whether
it would have chosen that sentence.”)(emphasis in original).
34
sentencing guidelines, and the district court’s use of facts that
were neither admitted by the defendants nor found by the jury in
determining defendants’ sentences under the mandatory sentencing
guidelines violated defendants’ Sixth Amendment rights, their
substantial rights were affected as a matter of law. We therefore
vacate defendants’ sentences and remand this case to the district
court for re-sentencing.
CONVICTIONS AFFIRMED; SENTENCES VACATED AND CASE REMANDED FOR RE-
SENTENCING.
35