United States v. Shanin Moshiri

In the

United States Court of Appeals

For the Seventh Circuit

No. 16-1126

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

SHANIN MOSHIRI, also known as

SHAWNI MOSHIRI,

Defendant-Appellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 13 CR 312 — Matthew F. Kennelly, Judge.

ARGUED DECEMBER 7, 2016 — DECIDED JUNE 5, 2017

Before WOOD, Chief Judge, BAUER, Circuit Judge, and

SHADID,* District Judge.

*

Of the United States District Court for the Central District of Illinois,

sitting by designation.

2 No. 16-1126

BAUER, Circuit Judge. On July 2, 2015, after a bench trial,

Doctor Shanin Moshiri was convicted on one count of receiving

illegal remuneration in exchange for referring patients to

Sacred Heart Hospital in Chicago, Illinois, in violation of 42

U.S.C. § 1320a–7b(b) (Anti-Kickback Statute). On this appeal,

Moshiri challenges the sufficiency of the government’s

evidence and the district court’s admission of certain expert

testimony. For the following reasons, we affirm the conviction.

I. BACKGROUND

On March 18, 2014, Moshiri was charged, along with ten

other physicians and Sacred Heart administrators, with

participating in a scheme by which Sacred Heart paid physi-

cians for referring patients to Sacred Heart under the guise of

teaching and personal services contracts. Moshiri requested a

severance, waived his right to a jury trial, and proceeded to a

bench trial, during which the following facts were established.

Doctor William Noorlag was the director of the podiatry

residency program at Sacred Heart from 1999 to 2010. At trial,

Noorlag testified that in 2001, Edward Novak, the Hospital’s

owner and Chief Operating Officer, approached him express-

ing a desire to bring more podiatry patients to the Hospital. To

that end, Novak said that he wanted to begin paying podia-

trists pursuant to teaching contracts. It was Noorlag’s under-

standing that the teaching contracts would provide a vehicle to

pay physicians for patient referrals. At Novak’s direction,

Noorlag drafted the language to be used in these contracts.

Between 2001 and 2005, Sacred Heart entered into teaching

contracts with podiatrists Richard Weiss, Arshad Khan, and

Lewis Carrozza. Each of those contracts contained nearly

No. 16-1126 3

identical terms, based on the language Noorlag drafted. They

provided that Sacred Heart would pay the physician $2,000 per

month for performing duties within the residency program,

including teaching, performing administrative tasks, and

conducting residency workshops. Noorlag testified that at this

time, there were at least six other attending podiatrists who

performed teaching duties at the Hospital without receiving

any additional pay. He testified that the teaching contracts

were unnecessary because physicians had always taught

residents without such contracts.

Moshiri’s relationship with Sacred Heart began in Novem-

ber 2006, when he signed a teaching contract. He was to receive

$2,000 per month for performing duties similar to those

required by the contracts with Weiss, Khan, and Carrozza. The

contract also provided that Moshiri would serve as the

Director of External Podiatric Office Rotations for the residency

program. At this time, Carrozza’s contract, which was still in

effect, provided that he would serve in the same position.

According to Noorlag, however, neither Moshiri nor Carrozza

were considered to hold that title, and neither performed any

of the related duties. Instead, Doctor David Finkelstein held the

title of Director of External Rotations, performed the corre-

sponding duties, and did not receive additional compensation

from Sacred Heart for that work.

In April 2008, Moshiri signed a new contract with the

Hospital, pursuant to which he would receive $4,000 per

month for performing the same duties as those set forth in his

2006 contract. After signing this contract, Moshiri was receiv-

ing an annual salary of $48,000, while Noorlag, the Director of

the Residency Program, was receiving $40,000.

4 No. 16-1126

At trial, the government called Doctor Oleg Petrov to offer

an expert opinion on the standards for teaching contracts in

podiatric residency programs. Petrov was the Chair of the

Counsel on Podiatric Medical Education (CPME), which

oversees and certifies residency programs throughout the

country and publishes standards and requirements for those

programs. Petrov testified that he had conducted approxi-

mately 60 on–site evaluations of podiatric residency programs

during his time with CPME. He testified that teaching stipends

are uncommon for attending physicians associated with the

residency programs, and that he had never heard of such a

physician being paid as much as $2,000 per month. According

to Petrov, when physicians received teaching stipends, they

were typically between $200 and $4,000 per year, though he

acknowledged that payments fluctuated based on geographical

area.

According to multiple witnesses, Moshiri did not perform

the majority of his duties under the teaching contracts. He had

little involvement in the administration of the residency

program, did not conduct residency workshops, did not work

with residents in the Hospital’s clinic, and did not coordinate

or supervise the residents’ external rotations.

In addition, records showed that Moshiri spent less time

teaching and working with residents than many of the other

podiatrists associated with the program. The program kept a

log of the “didactic activities” physicians performed with

residents. Between 2006 and 2013, there were over 1,000 such

activities logged, and only nine of those were attributed to

Moshiri. During that same time, Moshiri worked with resi-

dents on podiatry cases just over three times per month on

No. 16-1126 5

average, while eleven other physicians in the program aver-

aged over ten cases per month with residents. The logs also

showed that Moshiri logged the lowest number of individual

procedures performed by a resident within each of those cases.

Between 2006 and 2013, Moshiri logged more surgeries at

Sacred Heart than any other attending podiatrist. During that

same period, the Hospital billed Medicare and Medicaid

approximately $482,000 for patients Moshiri treated.

In early 2013, law enforcement agents investigating the

Hospital secured the cooperation of Anthony Puorro, the Chief

Operating Officer. As part of his cooperation, Puorro recorded

a number of conversations with Moshiri.

In a conversation recorded on February 18, 2013, Puorro

told Moshiri that Novak wanted Moshiri to pick up his check

in person. In response, Moshiri suggested that when he came

to pick up the check, he could bring a “list of patients” he had

referred to the Hospital in case Novak wanted to see it. On

February 22, 2013, Moshiri met with Puorro to pick up his

check and provided him with a list of the surgeries he per-

formed at Sacred Heart in the previous month.

In another conversation recorded on March 8, 2013, Puorro

asked Moshiri if he had another list of patients, to which

Moshiri responded, “Not yet.” Moshiri asked Puorro if Novak

liked the list from last month. He then said that Novak “should

be very happy I bring my patients here. This is not the first, uh,

stop for me. Okay? … I’m the most active podiatrist in the

department of podiatry in this Hospital. … Six, seven patients

a month for podiatrist is a lot.”

6 No. 16-1126

Moshiri was arrested on April 16, 2013. Special Agent

Jeffrey Jamrosz informed Moshiri of his Miranda rights, and

Moshiri agreed to speak with him. Agent Jamrosz testified that

Moshiri explained that the meeting with Puorro to pick up his

check was atypical, and that he had provided the list of

patients to demonstrate what he had done for the Hospital.

Agent Jamrosz then testified that he asked Moshiri if the

teaching contract was a cover for payments for patient refer-

rals. According to Agent Jamrosz, Moshiri responded that “the

contract turned into basically paying for patients.”

Moshiri was charged with three counts of receiving illegal

payments in violation of the Anti-Kickback Statute. He waived

his right to a jury trial and proceeded to a bench trial. On

July 2, 2015, the district court found him guilty on one count.

The court noted that Moshiri did not function as the Director

of External Rotations and that he did not perform most of the

duties required by his contract. The court then explained that

it relied heavily on Moshiri’s recorded statements to Puorro

and his statement to Agent Jamrosz. It found that those

statements demonstrated that Moshiri understood he was

being paid not for teaching, but rather for patient referrals.

Moshiri then filed a motion seeking a judgment of acquittal

notwithstanding the verdict or, in the alternative, a new trial.

He argued that there was insufficient evidence to establish that

he knowingly or willfully violated the Anti-Kickback Statute;

that the admission of Petrov’s expert testimony was error; and

that the statute was unconstitutionally vague as applied in this

case. The district court rejected all three arguments and this

appeal followed, based on the same challenges.

No. 16-1126 7

II. DISCUSSION

A. Sufficiency of the Evidence

Moshiri’s first argument on appeal is that there was

insufficient evidence to support his conviction. He contends

that the government failed to prove that his teaching contracts

fell outside the Anti-Kickback Statute’s “safe harbor” provi-

sion, and that there was insufficient evidence to establish that

he knowingly or willfully violated the statute.

When reviewing a challenge to the sufficiency of the

evidence, “we view the evidence in the light most favorable to

the prosecution and ask whether any rational trier of fact could

have found the essential elements of the crime beyond a

reasonable doubt.” United States v. Salinas, 763 F.3d 869, 877

(7th Cir. 2014) (citing Jackson v. Virginia, 443 U.S. 307, 319

(1979)). We do not reweigh the evidence nor judge the credibil-

ity of witnesses. United States v. Galati, 230 F.3d 254, 258 (7th

Cir. 2000). If there is a reasonable basis in the record for the

verdict, it must stand. Id. (citation omitted).

The Anti-Kickback Statute prohibits a physician from

knowingly or willfully receiving payment, directly or indi-

rectly, in return for referring a patient for a service for which

payment may be made, in whole or in part, under a federal

health care program. 42 U.S.C. § 1320a-7b(b)(1)(A). The

statute’s regulations provide a “safe harbor” for personal

services contracts if they meet certain criteria. See 42 C.F.R.

§ 1001.952(d). Generally, a contract is protected by the safe

harbor if its terms are for less than a year, the compensation is

consistent with fair market values, and the services are

reasonably necessary to accomplish the business goals of the

8 No. 16-1126

contracting entity. Id. If, however, the contract “takes into

account the volume or value of any referrals” for services to be

paid by a federal health care program, it is not protected. Id.

§ 1001.952(d)(5).

We need only briefly address Moshiri’s argument that the

government did not prove that his contracts fell outside the

safe harbor provision. To clear that hurdle, the government

needed to show only that the arrangement “[took] into account

the volume or value of any referrals” that Moshiri made to the

Hospital. Id. There was ample evidence presented to make that

showing, beginning with Moshiri’s own statements. In Febru-

ary 2013, Moshiri offered to bring a list of his patient referrals

to show Novak when he went to pick up his check. In March

2013, Puorro told Moshiri that Novak wanted to see another

list of referrals. Moshiri then asked if Novak was happy with

the previous list he provided. Additionally, Agent Jamrosz

testified that, after his arrest, Moshiri admitted that his

relationship with the Hospital had turned into receiving

payment for patient referrals. These statements also bolstered

the government’s evidence showing that Moshiri performed

fewer teaching activities than other physicians who were not

being paid to teach, and that he did not actually perform the

duties associated with the title conferred upon him under the

contract. This evidence was sufficient to demonstrate that

Moshiri’s arrangement with the Hospital took into account his

patient referrals, and therefore, fell outside the statute’s safe

harbor.

For many of the same reasons, Moshiri’s next argument

also fails. He contends that there was insufficient evidence to

prove that he knowingly violated the Anti-Kickback Statute.

No. 16-1126 9

Notably, the district court found Moshiri guilty of only one

count, which was associated with the check he received on

March 8, 2013. There was a sufficient basis in the record for the

district court to conclude that, when he accepted that check,

Moshiri knew he was being paid, at least in part, for referrals

rather than simply for the duties outlined in his contract.

Moshiri’s conversations with Puorro and his statement to

Agent Jamrosz are the most convincing evidence that Moshiri

knew he was receiving payment in exchange for referrals.

Moshiri’s references to the number of patients he brought to

the Hospital, his inquiry as to whether Novak was happy with

those numbers, and his subsequent admission to Jamrosz

indicate that he knew that he was not receiving the March 8,

2013, check only for his teaching.

The government also demonstrated that Moshiri was aware

of the Anti-Kickback Statute’s prohibitions by introducing a

Medicare enrollment form that Moshiri signed in 2012. By

signing that document, Moshiri certified that he would comply

with all Medicare rules and regulations, including the Anti-

Kickback Statute. Additionally, it was clear that Moshiri knew

he was not performing all of the duties outlined in his contract,

particularly as they relate to his title of Director of External

Rotations. When considered in the light most favorable to the

government, this illustrates his awareness that he was being

paid for something other than performing those duties.

Moshiri argues that the evidence did not make it clear

when, if ever, he became aware of the true nature of his

contract, and that there was nothing conclusive to show when

he stopped “harboring a good fath belief in the lawfulness of

his contract.” However, his conversations with Puorro, which

10 No. 16-1126

occurred on and before March 8, 2013, demonstrate that at

some time prior to his receipt of the payment on that date, he

was aware that his referral numbers were relevant to his

compensation.

In sum, Moshiri’s knowledge of the statute’s prohibitions,

the lack of work performed under the contract, and his

statements to Puorro and Agent Jamrosz clearly provided a

sufficient basis for the district court to find that Moshiri

received the March 8, 2013, payment with the requisite

knowledge under the Anti-Kickback Statute. Accordingly, we

find that there was sufficient evidence to support Moshiri’s

conviction.

B. Admission of Petrov’s Expert Opinion Testimony

Moshiri’s second argument on appeal is that the district

court committed reversible error by allowing Petrov to opine

on the fair market value of his contract. He contends that

Petrov was not qualified to render such and opinion and that

it was not based on sufficient credentials or methodology.

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579

(1993), the Supreme Court set forth the framework to be used

when determining the admissibility of expert testimony under

Federal Rule of Evidence 702. Moshiri does not argue that the

district court incorrectly applied the Daubert framework.

Therefore, we review the district court’s admission of Petrov’s

testimony for an abuse of discretion. See United States v. Allen,

269 F.3d 842, 845 (7th Cir. 2001).

Under Rule 702, an expert may offer opinion testimony “if

they have ‘specialized knowledge,’ are qualified based on

No. 16-1126 11

‘knowledge, skill, experience, training, or education,’ and the

expert’s testimony ‘will assist the trier of fact to understand

evidence or determine a fact at issue.’” Id. (quoting Fed. R.

Evid. 702). The district court acts as a “gatekeeper” in deter-

mining the relevance and reliability of the opinion testimony,

and enjoys “broad latitude” in making such a determination.

Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999).

Moshiri takes issue with Petrov’s testimony that a typical

stipend for teaching physicians in podiatric residency pro-

grams is between $400 and $2,000 per year and that he had

never heard of an attending physician being paid as much for

teaching as Moshiri was under his contract. He argues that

Petrov was not qualified to give such an opinion, and that his

testimony was, therefore, unreliable.

This argument is unavailing. First, it is important to note

that, contrary to Moshiri’s contention, Petrov did not opine

as to the fair market value of Moshiri’s contract. The only

testimony he provided specifically as to Moshiri’s contract was

that he had never encountered such high compensation for

similar positions. Outside of that, Petrov only testified as to the

industry norms for such contracts based on his specialized

experience and knowledge within the field.

To demonstrate his qualifications, the government elicited

testimony detailing Petrov’s extensive background and

experience working in the field of podiatric residency. Petrov

testified that he had worked for the CPME for over 20 years,

during which time he conducted over 60 on–site evaluations of

podiatric residency programs. As part of those evaluations,

Petrov spoke with administrators regarding compensation for

12 No. 16-1126

attending physicians. That background provided a sufficient

foundation from which the district court could determine that

Petrov was qualified and that his testimony regarding a typical

teaching contract was reliable.

Moshiri makes much of the fact that Petrov’s testimony

was not based on an empirical analysis of podiatric residency

programs nationwide, and suggests that without that analysis,

Petrov’s testimony was unreliable. Such an argument, how-

ever, speaks to the weight of his testimony, not its admissibil-

ity, and is a matter ripe for cross-examination. See Gayton v.

McCoy, 593 F.3d 610, 616 (7th Cir. 2010) (noting that even

“‘shaky’ expert testimony may be admissible, assailable

by its opponents through cross-examination”). Indeed, on

cross-examination, Moshiri elicited testimony that Petrov did

not have specific knowledge of the workings of every program

in the country, nor the specific details of teaching contracts at

Sacred Heart or other Chicago hospitals.

Petrov testified as to the standards within the industry as

he had encountered them throughout his considerable per-

sonal experience. Such experience, even in the absence of any

empirical data, can provide an adequate basis for the admis-

sion of expert testimony. See Metavante Corp. v. Emigrant Sav.

Bank, 619 F.3d 748, 761 (7th Cir. 2010) (“An expert’s testimony

is not unreliable simply because it is founded on his experience

rather than on data … .”). The district court did not abuse its

discretion in determining that Petrov was qualified to provide

expert testimony on the nature of physician teaching contracts

in a podiatric residency program.

No. 16-1126 13

C. Constitutionality of the Anti-Kickback Statute

Moshiri’s final argument on appeal is that the Anti-Kick-

back Statute is unconstitutionally vague as applied to his case.

He urges us to overturn our holding in United States v. Borrasi,

639 F.3d 774, 782 (7th Cir. 2011), that “if part of the payment

compensated past referrals or induced future referrals,” it

constitutes a violation of the Anti-Kickback Statute. He asks us

instead to adopt a standard by which a conviction can stand

only if the payment for referrals constitutes the “primary

purpose” of the arrangement.

We recently rejected an identical argument in United States

v. Nagelvoort, -- F.3d --, 2017 WL 1959976 at *10 (7th Cir. 2017).

For the same reasons set forth in that opinion, we decline to

overturn Borassi, and hold that the Anti-Kickback Statute is

constitutional as applied to Moshiri.

III. CONCLUSION

For the foregoing reasons, we affirm the conviction.