# Petition — HARVEY GOLDEN v. UNITED STATES (Nos. 80-632, 80-558, 161) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0645%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 ## Text YONK, JR., CLERK | In the Supreme Court of the Anited States OCTOBER TERM, 1980 HARVEY GOLDEN, PETITIONER, VS. UNITED STATES OF AMERICA, RESPONDENT. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Counsel for Petitioners: Warren J. Pertove of the Rosert S. Harrison of the Michigan Bar Michigan Bar 18860 West Ten Mile Road 18860 West Ten Mile Road Suite 200 Suite 200 Southfield, Michigan 48075 Southfield, Michigan 48075 Telephone: (313) 424-8000 Telephone: (313) 424-8000 RENAISSANCE PRINTING COMPANY, 76 W. ADAMS, KALES BUILDING, DETROIT, MICHIGAN 43226 — PHONE 964-3185 I, II. QUESTIONS PRESENTED FOR REVIEW WHETHER, DURING THE PERIOD MAY 27, 1974, THROUGH JANUARY 9, 1975, APPLICATION OF 42 USC § 1396h(b)(1) WAS LIMITED TO ONE WHO BOTH (1) FURNISHED ITEMS OR SERVICES TO AN INDIVIDUAL WHICH WERE COMPENSABLE UNDER 42 USC § 1396 et seq., AND (2) SOLICITED, OFFERED, OR RECEIVED ANY KICKBACK IN CONNECTION WITH HIS OR HER FURNISHING OF SUCH SERVICES TO SUCH INDIVIDUAL? WHETHER COUNTS 11 THROUGH 15 OF THE AMENDED FOLLOW UP INFORMATION FAIL TO ALLEGE THAT PETITIONER FURNISHED ITEMS OR SERVICES TO ANY INDIVIDUAL WHICH WERE COMPENSABLE UNDER 42 USC § 1396 et seg. INCONNECTION WITH WHICH HE ALLEGEDLY RECEIVED THE PAYMENTS SET FORTH IN SAID COUNTS, AND THUS FAIL TO CHARGE AN ESSENTIAL ELEMENT OF A VIO- LATION OF 42 USC § 1396h(b)(1)? A. WHETHER THE AMENDED FOLLOW UP IN- FORMATION ALLEGED AND DEFENDANT'S PLEA OF GUILTY ESTABLISHED THAT PETITIONER FURNISHED LABORATORY TESTING SERVICES TO ANY INDIVIDUAL WHICH WERE COMPENSABLE UNDER 42 USC § 1396 et seq. B. WHETHER THE AMENDED FOLLOW UP IN- FORMATION ALLEGED AND DEFENDANT'S PLEA OF GUILTY ESTABLISHED THAT PETITIONER FURNISHED TO ANY IN- DIVIDUAL PHYSICIAN’S SERVICES AS Iil. - DEFINED BY 42 USC § 1396(d)(5) AND 42 USC § 1395(x)(r)1) WHICH WERE COMPENSABLE UNDER 42 USC § 1396 et seq. WHETHER THE AMENDED FOLLOW UP IN- . FORMATION ALLEGED AND DEFENDANT'S PLEA OF GUILTY ESTABLISHED THAT PETITIONER FURNISHED TO ANY IN- DIVIDUAL ANY SERVICES WHICH WERE COMPENSABLE UNDER 42 USC § 1396 et seq. WHETHER THE ALLEGED PAYMENTS TO PETI- TIONER AS SET FORTH IN COUNTS 11 THROUGH 15 OF THE AMENDED FOLLOW UP INFORMATION WERE KICKBACKS AS THAT TERM IS USED IN 42 USC § 1396(h)(b)(1) OR REBATES AS THAT TERM IS USED IN 42 USC § 1396(h)(b)(2)? A. DID THE COURT OF APPEALS COMMIT ER- ROR IN REFUSING TO GRANT A REHEAR- ING FOR THE PURPOSES OF DETERMINING WHETHER: 1. CONGRESS INTENDED TO DIFFEREN- TIATE BETWEEN KICKBACKS AND REBATES IN ENACTING 42 USC §§ 1396(h)(b\(1) and 1896(h)(b)(2)? 2. THE PAYMENTS ALLEGEDLY RECEIVED BY PETITIONER WERE KICKBACKS AS THAT TERM IS USED IN 42 USC § 1396(h)(b)(1) OR REBATES AS THAT TERM IS USED IN 42 USC § 1396(h)(b)2)? 3. ANY PAYMENTS ALLEGEDLY RECEIVED BY PETITIONER WERE PERCENTAGE PAYMENTS AND, THUS, KICKBACKS WITHIN THE DEFINITION SET FORTH iii IN U.S. v HANCOCK, 604 F.2d 999 (7th Cir. 1978)? IV. WHETHER DURING THE PERIOD MAY 27, 1974, THROUGH JANUARY 9, 1975, 42 USC § 1396(h)(b) (1) WAS APPLICABLE TO ONE WHO REFERRED LABORATORY BUSINESS TO A MEDICAL TESTING LABORATORY, BUT WHERE THE PARTY REFERRING SUCH BUSINESS DID NOT PERFORM THE LABORATORY TESTS AND WHERE THE REFERRING OF SUCH BUS!NESS WAS NOT A SERVICE WHICH WAS COMPEN- SABLE UNDER 42 USC § 1396 et seq. WHETHER APPLICATION OF THE PROVISION OF 42 USC § 1396(h\bX1) AS IT WAS FRAMED DURING THE PERIOD MAY 27, 1974, THROUGH JANUARY 9, 1975, WOULD RESULT IN A DENIAL Cr DUE PROCESS TO APPELLANT FOR THE REASON THAT SUCH STATUTE WAS VAGUE AND INDEFINITE AND DID NOT GIVE FAIR WARNING THAT IT WAS APPLICABLE TO THE RECEIPT OF PAYMENTS BY A DOCTOR IN RETURN FOR REFERRING LABORATORY BUSINESS TO A MEDICAL TESTING LABORA- TORY WHERE THE MEDICAL TESTING SERV- ICES WITH REGARD TO SUCH REFERRED BUSINESS WERE ALL PERFORMED BY THE MEDICAL TESTING LABORATORY AND NOT BY THE REFERRING DOCTOR? ey "s iv TABLE OF CONTENTS PAGE QUESTIONS PRESENTED ...............-00. TABLEOF AUTHORITIES...... 5b have to prove your guilt beyond a reasonable doubt before either the Judge or the jury could find you guilty, do you understand that? DEFENDANT GOLDEN: I understand that, your Honor. THE COURT: Do you understand that at a trial you could testify in your own behalf, if you chose to do so, but you have a right under the Constitution to remain silent, and if you chose to remain silent the jury would be instructed, and the Court would apply the same rule of law, that no finding or inference of guilt could be held against you? DEFENDANT GOLDEN: I understand. THE COURT: Do you understand that at a trial you are entitled to be represented by counsel, to be confronted in open court by the witnesses against you, to have your attorney cross-examine those witnesses and have the power of the court’s subpoena to secure witnesses on your own behalf, and by pleading guilty you give up all those rights? DEFENDANT GOLDEN: I understand that, your Honor. THECOURT: Knowing those things, how do you wish to plead at this time to Counts 11, 12, 13, 14, 15? DEFENDANT GOLDEN: Guilty, your Honor. THE COURT: Will you tell me in your own words what it is that you did do that causes you to plead guilty? DEFENDANT GOLDEN: Part of my motives I stated, perhaps an equal amount of my motives were for the indice- ment of monetary gain. THE COURT: In other words, to receive payment from Titan for sending work to Titan? DEFENDANT GOLDEN: Yes. THE COURT: And some of that work at least was Medicare and Medicaid work? DEFENDANT GOLDEN: Yes, your Honor. 6b THE COURT: Would that be true for all of the periods involved here, May 27, 1974, through December 6, 1974? DEFENDANT GOLDEN: Yes, your Honor. THE COURT: Are there any other questions the Gov- ernment would like me to ask? MR. ROSEN: I can’t think of any, your Honor. THE COURT: And you have had plenty of time to discuss this matter with your attorney? DEFENDANT GOLDEN: Yes, your Honor. THE COURT: And, counsel, you have also explained to him his constitutional rights in this matter? MR. HARRISON: Yes, we have, your Honor. THE COURT: Once again let me explain to you, Dr. Golden, that if an appeal on the legal issues that your counsel intends to raise is unsuccessful, at least I presume he does, you understand that this is a final plea of guilty here, that there will not be a chance at that time to ask that it be set aside or do something of that nature, do you understand this is a final plea of guilty? DEFENDANT GOLDEN: That has been explained to me. MR. HARRISON: Your Honor, we do intend to appeal with regard to our legal disagreement .. . lc APPENDIX C Nos. 79-5222-24, 79-5269-70 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT UNITED STATES OF AMERICA, Plaintiff-Appellee, APPEAL from v the United States District Court for RICHARD TAPERT, HARVEY GOLD- the Eastern Dis- GOLDEN, GERALD WEINGARDEN, _ trict of Michigan. DONALD FREEDLANDER and RO- BERT GASH, Dfendants- Appellants. Decided and Filed June 16, 1980. Before: WEICK and JONES, Circuit Judges, and PHILLIPS, Senior Circuit Judge. PHILLIPS, Senior Circuit Judge, delivered the opinion of the Court, in which WEICK, Circuit Judge, joined. JONES, (pp. 18-20) filed a separate concurring opinion. PHILLIPS, Senior Circuit Judge. These are consolidated appeals by five Detroit osteopathic physicians who were con- victed of receiving kickbacks for sending urine and blood samples of their patients to Titan Laboratories (Titan) for analysis. All five of the physicians were enrolled in the Medicare and Medicaid programs and the charges for the laboratory analysis were paid to Titan out of Medicare and 2c Medicaid funds. The district court held that the payments violated the original version of 42 U.S.C. § 1936h(b),' which was in effect during the years involved in this case. In 1977 Congress amended the statute so as to remove any possible doubt that conduct such as that involved in the present case violates the Act.” The principal issues on this appeal are whether the infor- mation under which appellants were convicted charges a violation of the pre-1977 version of 42 U.S.C. § 1396h(b)(1) (note one), and whether the statute is unconstitutional for vagueness. Then Chief District Judge Cornelia Kennedy, now a judge of this court, ruled that the payments to the doctors were kickbacks, that the information charges a violation of the statute and that the statute is not invalid for vagueness. We affirm. ' (b) Whoever furnishes items or services to an individual for which payment is or may be made in whole or in part out of Federal funds under a State plan approved under this title [42 USCS §§ 1396-1396d, 1396f-1396i] and who solicits, offers, or receives any — (1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or (2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. * The amended § 1396h(b) (1) is as follows: (b) (1) Whoever solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind — (A) in return for referring an individual to a person for the fur- nishing or arranging for the furnishing of any item or service for 3c I Apparently Titan initiated the arrangement for the kickbacks, by having its representative contact one of the which payment may be made in whole or in part under this sub- chapter, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facil- ity, service, or item for which payment may be made in whole or in part under this subchapter, shall be guiltyof a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. (2) Whoever offers or pays any remuneration (including any kick- back, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person — (A) to refer an individual to a person for the furnishing or ar- ranging for the furnishing of any item or service for which payment may be made in whole or in part under this subchapter, or (B) to purchase, lease, order, or arrange for or recommend pur- chasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under this sub- chapter, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. (3) Paragraphs (1) and (2) shall not apply to — (A) a discount or other reduction in price obtained by a provider of services or other entity under this subchapter if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under this sub- chapter; and (B) any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services. physicians.’ In return for payments from Titan or one of its affiliates, the physician agreed to send his patients’ specimens to Titan and to encourage his colleagues to do the same. Other physicians entered into similar agreements, which Titan described as “consulting” arrangements. This pattern of activity began in April 1974 and continued until January 1978. Beginning in 1976, the physicians began depositing their Titan checks in an escrow fund for the purpose of acquiring an interest in Titan. The fund was administered by J.K.F. Inc., a corporation set up by the physicians to hold the Titan stock they proposed to buy. When the escrow fund reached $60,000, the physicians contributed an additional $15,000 and J.K.F. Inc. acquired a 40 per cent interest in Titan. On September 21, 1978, a federal grand jury returned a 37 count indictment against appellants, five other individuals and three Michigan corporations. On February 2, 1979, the Government filed a 42 count follow-up information charging appellants with soliciting and receiving Medicare and Medicaid kickbacks from Titan and associated entities. The information thereafter was amended. The version under which appellants were convicted is referred to in the record as the Amended Follow-Up Information. Judge Kennedy denied the motions of appellants to dismiss the indictments. Thereafter, in a published opinion, she denied their motions for a rehearing. United States v. Wetn- garden, 468 F.Supp. 410 (E.D. Mich. 1979). In this opinion Judge Kennedy held that the pre-1977 version 42 U.S.C. § 3 See United States v. Shermetaro, F.2d (No. 79-5148, 6th Cir. 1980), in which this court affirmed the conviction of one of the par- ties to this scheme under 18 U.S.C. § 371 for conspiracy to defraud the United States by obstructing the collection of income taxes from Titan Laboratories. 5c 1396h(b)(1) prohibited the conduct charged in the informa- tion, and that the challenged statute was sufficiently clear to given to appellants adequate notice that their alleged conduct was illegal. Thereafier, under a plea bargaining agreement, each of the appellants entered a plea of guilty to certain counts of the informaticn applicable to him. The Government approved dismissal of the indictment. II Prior to their guilty pleas, the appellants gave notice that they intended to appeal the ruling of the district court on the applicability of § 1396h(b)(1). To preserve the issue for ap- peal, they moved for arrest of judgment under Fed. R. Crim. P. 34 on the ground that the statute did not apply to their con- duct and the district court, therefore, had no jurisdiction to accept their guilty pleas. This is the procedure approved by this court in United States v. Heller, 579 F.2d 990, 992-93, and n. 1 (6th Cir. 1978). See also North Carolina v. Alford, 400 U.S. 25, 37-38 (1970); United States v. Cox, 464 F.2d 927, 941 (6th Cir. 1972). The Government concedes that the alleged defects raised by appellants are jurisdictional and not waived by their guilty pleas. Consequently the legal issue is properly before this court. III Dr. Gerald Weingarden entered a plea of guilty to Counts three through seven of the amended follow-up information, which are as follows: On or about the dates listed below, in the Eastern District of Michigan, Gerald Weingarden, D.O., having obtained services from Titan Laboratories, Inc., for 6c which payment was to be made in part out of federal funds under a state plan approved under Title XIX of the Social Security Act, did knowingly and wilfully solicit and receive kickback payments from Titan Labora- tories, Inc., Spartan Laboratories, Inc., and M. A. Delaney, Inc., as detailed below in connection with the furnishing of the aforesaid services, each payment being a separate count of this indictment. To wit, the Government contends Gerald Weingar- den, received monetary payments labelled “consulting fees” fzom an entity related to Titan Laboratories, Inc., namely Spartan Laboratories, Inc., principally to in- duce the defendant to send his laboratory work to Titan. In addition, it was agreed that the defendant would per- form the following services: (1) to forrn and assist in the formation of J.K.F., Inc., as described in indictment Number 78-80689, and (2) to encourage other doctors to send their laboratory work to Titan, as described in In- dictment Number 78-80689. Gerald Weingarden visited Titan Laboratories, Inc., from time to time, in connection with the performance of the above-described services. The claims filed by Titan Laboratories, Inc., were in accordance with the Medicaid statutes and regulations, and the monies received by Titan Laboratories, Inc., were those to which Titan Laboratories, Inc., was en- titled. That is, when Titan Laboratories, Inc., was ask- ing for payment for specific blood work, that blood work had been done, and that the billing for that blood work was in accordance with medicaid statutes and regula- tions. 7c Approximate Date Amount Source of Count of Payment of Money Payment 3 October 27, 1976 $1,000 Spartan Laboratories, Inc. 4 November 22, 1976 $1,000 Spartan Laboratories, Inc. 5 December 28, 1976 $1,000 Spartan Laboratories, Inc. 6 March 1, 1977 $1,000 Spartan Laboratories, Inc. 7 March 1, 1977 $1,000 Spartan Laboratories, Inc. All in violation of Title 42, U.S.C., Section 1396h(b)(1). At his Rule 11 sentencing hearing, Dr. Weingarden admit- ted that he had committed the acts charged in the informa- tion. Dr. Harvey Golden entered a plea of guilty to counts 11 through 15 of the Information, which charged as follows: On or about the dates listed below, in the Eastern District of Michigan, Harvey Golden, D.O., having ob- tained services from Titan Laboratories, Inc., for which payment was to be made in part out of federal funds under a state plan approved under Title XIX of the Social Security Act, did knowingly and wilfully solicit and receive kickback payments from Titan Labora- tories, Inc., and Media Technology, Inc., as detailed below in connection with the furnishing of the aforesaid services, each payment being a separate count of this in- dictment. To wit, Harvey O. Golden D.O., received monetary payments from Titan Laboratories, Inc., in exchange for referring his laboratory work to Titan Laboratories, Inc. The claims filed by Titan Laboratories, Inc., were in accordance with the Medicaid statutes and regula- tions, and the monies received by Titan Laboratories, Inc., were those to which Titan Laboratories, Inc., were entitled. That is, when Titan Laboratories, Inc., was asking for payment for specific blood work, that blood 8c Cal work had been done, and that the billing for blood work was in accordance with Medicaid statutes and regula- tions. Approximate Date Amount Source of Count of Payment of Money Payment 11 May 27, 1974 $ 850 Titan Laboratories, Inc. 12 August 8, 1974 $ 900 Media Technology, Inc. 13 September 3, 1974 $1,500 Titan Laboratories, Inc. 14 October 24, 1974 $1,000 Titan Laboratories, Inc. 15 December 6, 1974 $1,500 Titan Laboratories, Inc. All in violation of Title 42, U.S.C., Section 1396h(b)(1). At his Rule 11 sentencing hearing, Dr. Golden testified as follows: THE COURT: Knowing those things, how do you wish to plead at this time to Counts 11, 12, 13, 14, 15? DEFENDANT GOLDEN: Guilty, your Honor. THE COURT: Will you tell me in your own words what it is that you did do that causes you to plead guilty? DEFENDANT GOLDEN: Part of my motives I stated, perhaps an equal amount of my motives were for the inducement of monetary gain. THE COURT: In other words, to receive payment from Titan for sending work to Titan? DEFENDANT GOLDEN: Yes. THE COURT: And some of that work at least was Medicare and Medicaid work? DEFENDANT GOLDEN: Yes, your Honor. THE COURT: Would that be true for all of the periods involved here, May 27, 1974, through December 6, 1974? DEFENDANT GOLDEN: Yes, your Honor. Dr. Donald Freedlander entered a plea of guilty to counts 17 through 21 of the Information, which charged as follows: 9c On or about the dates listed below, in the Eastern District of Michigan, Donald Freedlander, D.O., having obtained services from Titan Laboratories, Inc., for which payment was to be made in part out of federal funds under a state plan approved under Title XIX of the Social Security Act, did knowingly and wilfully solicit and receive kickback payments from Titan Labora- tories, Inc., and M. A. Delaney, Inc., as detailed below in connection with the furnishing of the aforesaid serv- ices, each payment being a separate count of this indict- ment. To wit, the Government contends Donald Freed- lander, D.O., received monetary payments from an enti- ty related to Titan Laboratories, Inc., namely M. A. Delaney, Inc., principally to induce Donald Freed- lander, D.O., to send his laboratory work to Titan ‘Laboratories, Inc. In addition, it was agreed that Donald Freedlander would perform the following serv- ices: (1) to form and assist in the formation of J.K.F., Inc., as described in Indictment Number 78-80689, and (2) to encourage other doctors to send their laboratory work to Titan Laboratories, Inc., as described in Indictment Number 78-80689. The claims filed by Titan Laboratories, Inc., were in ac- cordance with the Medicaid statutes and regulations, and the monies received by Titan Laboratories, Inc., were those to which Titan Laboratories, Inc., were en- titled. That is, when Titan Laboratories, Inc., was asking for payment for specific blood work, that blood work had been done, and that the billing for that blood work was in accordance with Medicaid statues and regulations. 10c Approximate Date Amount Source of Count of Payment of Money Payment 17. August 23, 1976 $200 M.A. Delaney, Inc. 18 August 23, 1976 $200 M.A. Delaney, Inc. 19 September 7, 1976 $200 M.A. Delaney, Inc. 20 September 10,1976 $200 M.A. Delaney, Inc. 21 September 15,1976 $200 M.A. Delaney, Inc. All in violation of Title 42, U.S.C., Section 1396h(b)(1)._ - At his Rule 11 sentencing hearing, Dr. Freedlander testi- fied as follows: THECOURT: Will you tell me what it was that you did on or about the dates mentioned that causes you to plead guilty? What did you do on or about August 23rd, 1976, with regard to these checks apparently from M. A. Delaney, Inc.? DEFENDANT FREEDLANDER: These checks were received by me, yes, your Honor, they were received by me. THECOURT: You received the checks described in Counts 17, 18, 19, 20, 21? DEFENDANT FREEDLANDER: Yes, I did, your Honor. THE COURT: From M. A. Delaney? DEFENDANT FREEDLANDER: Yes, I did. THE COURT: And did you have some relationship at least with Titan Laboratories as stated in the informa- tion? DEFENDANT FREEDLANDER: Yes, I did, your Honor. THE COURT, And did that include some kind of business involving Medicare and Medicaid? DEFENDANT FREEDLANDER: Right. THE COURT: In other words, this was business lle with Titan Laboratories that included some business relating to Medicare and Medicaid samples? DEFENDANT FREEDLANDER: Yes, your Honor. THE COURT: Did you receive these payments for sending work to Titan Laboratories? DEFENDANT FREEDLANDER: Yes, I did, your Honor. THE COURT: Did you perform any services for these companies, M. A. Delaney and Titan Lab? DEFENDANT FREEDLANDER: Yes, I did, your Honor, I helped with the formation and was of assistance to the J.K.F. Corporation. * * * THE COURT: You have said something about, among other things, and that was kind of confusing to me, except for setting up J.K.F. Corporation, did you provide any other services to Titan Laboratories? DEFENDANT FREEDLANDER: Yes, among other things, I encouraged other physicians to send their work to the laboratory. THE COURT: In other words, there may not be a factual basis for this plea other than the statement that you in fact performed services besides sending business to Titan Lab? mn MR. FINK: I think under the general intent statute, I don’t think there has to be a dominant purpose, your Honor. He has indicated that that was one of the things he received consideration for. THECOURT: As long as it is clear, and I am not so sure it is clear from the statement, was one of the reasons that you received these payments from Titan Lab, or from M. A. Delaney, Inc., because you were sending your lab business to Titan Laboratories, was that one of the reasons? a | 12c DEFENDANT FREEDLANDER: In the total, yes, it was. It was part of it. It was one of the reasons. * * * THE COURT: In view of the fact it uses the word wilfully and that there were other considerations, I think we should at least really know what he does wish to plead guilty. I have a little problem with the factual basis under his statement. Maybe I can ask him this question. Was the referral of business to Titan Laboratories a substantial or significant reason? DR. FREEDLANDER: They were among the rea- sons, you know, a combination as to the rest of it, why, I received the compensation, yes, your Honor. THE COURT: I am still trying to find out if it was significant at all or was it just minor? DEFENDANT FREEDLANDER: Well, when I say significant, your Honor, there are several components involved. Is this more strongly than this one or that one, as the case may be, as I say, I did give my blood work to the laboratory, I did help assist them, I did help in get- ting other doctors referred to them, and with the com- bination of everything I don’t know where to put the weight on each one as to compensation, but all were done by me, that is true, and I did receive the compensa- tion, MR. FINK: Your Honor, the 1952 cases that you are familiar with, the Interstate travel in aid of racketeering cases, which are specific intent crimes, which I don’t think this is, do not require the dominant purpose to be the travel, it can be a co-equal purpose. THE COURT: Is he going to say it was co-equal with the other things? 13c DEFENDANT FREEDLANDER: With the other things, yes. THECOURT: As long as we get something that was co-equal with other services of recruiting doctors and helping to form this other corporation, the three oe them would be co-equal? DEFENDANT FREEDLANDER: Yes, your Honor. THECOURT: I think that that is sufficient for that. THE COURT: I think I should ascertain that. Did you, in fact, submit blood samples to Titan Laboratories? DEFENDANT FREEDLANDER: That I did, your Honor. THE COURT: And they were from Medicare and Medicaid patients? DEFENDANT FREEDLANDER: Yes, they were. MR. ROSEN: That's sufficient. THECOURT: I think I asked that but maybe not so directly. MR. ROSEN: I have nothing further. THECOURT: And that was during the time period of these checks that were received from M. A. Delaney? DEFENDANT FREEDLANDER: Yes, they were, your Honor. THE COURT: And the payments from M. A. Delaney were for the three purposes: One because you sent your lab work to Titan; two, because they indicated tests; and, three, you were supplying other doctors to send their work to J.K.F. and/or others? DEFENDANT FREEDLANDER: Yes, your Honor. 7% 14c THE COURT: And you did what you did knowing- ly? DEFENDANT FREEDLANDER: Yes, I did, your Honor. THE COURT: Having discussed these matters this afternoon, do you still wish to plead guilty to Counts 17, 18, 19, 20 and 21? DEFENDANT FREEDLANDER: Yes, I do. Dr. Richard Tapert entered a plea of guilty to counts 27 through 31 of the Information, which charged as follows: On or about the dates listed below, in the Eastern District of Michigan, Richard Tapert, D.O., having ob- tained services from Titan Laboratories, Inc., for which payment was to be made in part out of federal funds under a state plan approved under Title XIX of the Social Security Act, did knowingly and wilfully solicit and receive kickback payments from Titan Labora- tories, Inc., and Associated Physicians Services Co., as detailed below in connection with the furnishing of the aforesaid services, each payment being a separate count of this indictment. To wit, Richard Tapert, D.O., received monetary payments from an entity related to Titan Laboratories, Inc., namely Associated Physicians Services Company, in exchange for referring his laboratory work to Titan Laboratories, Inc. The claims filed by Titan Labora- tories, Inc., were in accordance with the Medicaid statutes and regulations and the monies received by Titan Laboratories, Inc., were those to which Titan Laboratories, Inc., was entitled. That is, when Titan Laboratories, was asking for payment for specific blood work was in accordance with Medicaid statutes and regulations. 15c Approximate Date Amount Source of Count of Payment of Money Payment 27 June 24, 1975 $200 Associated Physicians Services, Co. 28 August 12, 1975 $200 Associated Physicians Services, Co. 29 September 9, 1975 $500 Associated Physicians Services, Co. $0 October 17, 1975 $200 Associated Physicians Services, Co. 31 December 10,1975 $200 Associated Physicians Services, Co. All in violation of Title 42, U.S.C., Section 1396h(b)(1). At his Rule 11 sentencing hearing, Dr. Tapert testified as follows: THE COURT: How do you plead to counts 27 through 31? THE DEFENDANT: I plead guilty. THECOURT: Will you tell me what it was that you did do that causes you to plead guilty to those counts? THE DEFENDANT: I accepted monetary pay- ments from Associated Physicians Service Company in exchange for referring my laboratory work to Titan Laboratory. THE COURT: And did you do that knowingly? THE DEFENDANT: Yes, I did. THE COURT: Are there any other questions the Government would like me to ask? MR. ROSEN: Maybe your Honor could inquire as to the taking of blood samples from Medicare-Medicaid patients. THE COURT: Yes, during this period of time that these payments were made, was some of the work that you were referring to Titan Laboratory or Associated Physicians Medicare and Medicaid work? l6c THE DEFENDANT: Yes. THE COURT: For Medicare and Medicaid pa- tients? THE DEFENDANT: That is correct. THE COURT: And would that be true during the period of each of these payments? THE DEFENDANT: Yes. THE COURT: Any other questions, Mr. Rosen. MR. ROSEN: No, your Honor. THE COURT:Have you had plenty of time to discuss this matter with your attorney? THE DEFENDANT: Yes, I have. THE COURT: And he has explained to you what it is the Government has to prove to prove you guilty? THE DEFENDANT: Yes. THE COURT: And you understand also that this is a final disposition insofar as this Court is concerned, that this plea of guilty, if the Court accepts it, it will not set aside the plea of guilty should an appeal be unsuccessful on the legal issues, do you understand? THE DEFENDANT: I understand. THE COURT: Having discussed these matters this afternoon, do you still wish to plead guilty to these counts? THE DEFENDANT: Yes, I do. Dr. Robert Gash entered a plea of guilty to county 36 of the Information, which charged as follows: On or about the dates listed below, in the Eastern District of Michigan, Robert Gash, D.O., having obtain- ed services from Titan Laboratories, Inc., for which pay- ment was to be made in part out of federal funds under a state plan approved under Title XIX of the Social Security Act, did knowingly and wilfully solicit and 17c receive kickback payments from Titan Laboratories, Inc., and Associated Physicians Services, Co., as detailed below in connection with the furnishing of the aforesaid services, each payment being a separate count of this in- dictment. To wit, Robert Gash, D.O., received monetary payments from an entity related to Titan Laboratories, Inc., namely Associated Physicians Services Company, in exchange for referring his laboratory work to Titan Laboratories, Inc. The claims filed by Titan were in ac- cordance with the Medicaid statutes and regulations and the monies received by Titan Laboratories, Inc., was en- titled. That is, when Titan Laboratories, Inc., was ask- ing for payment for specific blood work was in accord- ance with Medicaid statutes and regulations. Approximate Date Amount Source of Count of Payment « of Money Payment 36 August 11, 1975 $200 Associated Physicians Services, Co. All in violation of Title 42, U.S.C., Section 1396h(b)(1). In his Rule 11 sentencing hearing, Dr. Gash testified as follows: THE COURT: Will you tell me what you did on or about August 11, 1975 that causes you to plead guilty? DEFENDANT GASH: On or about August 11, 1975, I received a check for $200.00 from Associated Physicians Services, Inc., for submission of lab work to Titan Laboratories. THE COURT: To Titan Laboratories? DEFENDANT GASH: Yes. THE COURT: And was some of that lab work at least lab work under both Medicare and Medicaid? 18c DEFENDANT GASH: _I would have to assume so. I really don’t know that, your Honor. THE COURT: But ordinarily there would be some within the work that you would submit within a month? DEFENDANT GASH: _I would say so, yes. THE COURT: Does the Government have some evidence that some of this was? MR. ROSEN: Yes, it does, your Honor. THE COURT: Are there any other a you would like to ask? MR. ROSEN: No, your Honor. THE COURT: Having discussed this matter this afternoon, do you still wish to plead guilty to Count 36? DEFENDANT GASH: Yes, your Honor. IV In asserting that the statute was not sufficiently broad prior to the 1977 amendment to make their activities a criminal of- fense, and that the statute under which they were convicted is invalid for vagueness, appellants rely strongly upon the fact that Congress found it necessary to enact the 1977 amend- ment. An amendment to an existing statute is not an acknowledg- ment by Congress that the original statute is invalid. It is a common and customary legislative procedure to enact amendments strengthening and clarifying existing laws. The report of the House Committee on Ways and Means contains the following statement on the purpose of the 1977 amendment: Your committee bill would modify the penalty provi- sions in existing law which relate to those persons pro- viding services under medicare and medicaid. 19c Existing law provides specific penalties under the medicare and medicaid programs for certain practices that long have been regarded by professional organiza- tions as unethical, which are unlawful in some jurisdic- tions, and which contribute significantly to cost of the programs. Such practices as the submission of false claims, or the soliciting, offering, or acceptance of kickbacks or bribes, including rebates or [sic] a portion of fees or charges for patient referrals, are misdemeanors under present law ... Recent hearing and reports, however, indicate that such penalties have not proved adequate deterrents against illegal practices by some individuals who provide services under medicare and medicaid. In addition, these misdemeanor penalties appear inconsistent with existing Federal criminal code sanctions which make similar actions punishable as felonies. Also, it has been brought to the attention of the committee by the U.S. Attorney's offices which have utilized these Social Secur- ity Act sanctions in the prosecution of medicare and medicaid fraud cases that the existing language of these penalty statutes is unclear and needs clarification. Your committee's bill would strengthen the penalty provisions in existing law which relate to persons pro- viding services under medicare and medicaid .. . In addition, the bill would clarify and restructure those provisions in existing law which define the types of financial arrangements and conduct to be classified as il- legal under medicare and medicaid. (Emphasis added.) H.R. Rep. No. 95-393 (II), 95th Cong., Ist Sess. reprinted in (1977) U.S. Code Cong. & Ad. News 3039, 3055. 20c We agree with the definition of “kickbacks” adopted and applied by the Seventh Circuit in United States v. Hancock, 604 F.2d 699 (7th Cir. 1978). We follow that decision in affirr ng the decision of the district court that appellants have entered pleas of guilty under an Information charging them with violations of a valid statute which made their con- duct a criminal offense. The record demonstrates to our satisfaction that the payments which the appellants admitted receiving were “kickbacks” within the meaning of the statute. We choose to follow the Seventh Circuit in Hancock, rather than United States v. Porter, 591 F.2d 1048 (5th Cir. 1979). The reasons for this conclusion are stated well by Judge Ken- nedy in her published opinion. 468 F.Supp. at 412-15. Appellants contend that they did not “furnish” the services in connection with which they received payments, and that the Information does not charge an offense. These and all other contentions made by appellants have been considered and found to be without merit. The convictions are affirmed. JONES, Circuit Judge, concurring. I agree that the term “kickback” should be defined to include “a percentage pay- ment for granting assistance by one in a position to open up or control a source of income.” United States v. Hancock, 604 F.2d 999, 1002 (7th Cir. 1978). The United States has an im- portant interest in securing the honest administration of federally funded programs. United States v. Thompson, 366 F.2d 167 (6th Cir.), cert. dented, 385 U.S. 973 (1966). I write separately to discuss a substantial issue of first impression con- cerning the construction of 42 U.S.C. § 1396h (b) (1) (1972): Is a physician, who provides services to medicaid patients and who receives illegal kickbacks from laboratories for the refer- ral of those patients, for which referrals federal funds do not reimburse the doctor or the laboratory, a person who “fur- 2lc nishes items or services to an individual for which payment is or may be made in whole or part out of Federal funds . . . and who ... receives any (1) kickback .. . in connection with the furnishing of such items or services ...?” I concur with the majority's affirmative answer. The language of the amended informtions and the guilty pleas, as thoroughly reported in the majority opinion, define the facts of the case.' The defendants were charged with and pleaded guilty to receiving payments in various forms from a laboratory for patient referrals. The informations allege that the defendants “obtained services” from a laboratory, for which services medicaid would pay in part, and that the defendants received kickbacks in connection with these serv- ices. Consequently, the relevant services for which federal funds were paid are the tests performed by the laboratory. The record also establishes that the defendants were reim- bursed by medicaid for their treatment of the same patients referred to the laboratories. The facts raise two questions of statutory interpretation: 1) did the physicians “furnish” the laboratory services; and 2) were the kickbacks paid “in connection with” the laboratory services rather than just the patient referrals? Defendants ' According to my construction of § 1396h (b) (1), the amended infor- mations do state an offense. In his zeal to uphold the guilty pleas, the Assistant United States Attorney argued seriously that this Court should consider the amended informations to have been informally amended by oral argument and by his response to the defendants’ motion to dismiss the informations. Further, he contended that the district court had im- plicitly granted leave for this informal second amendment. The Govern- ment’s position is not supported in the record and is an attempt to play “fast and loose” with the established rules of criminal procedure and principles of due process. Such overly zealous advocacy should be tem- pered. In other respects, the Assistant United States Attorney prepared a fine brief. 22c argue that they did not “furnish” the laboratory services, since the laboratory actually performed the tests. They point out that their services were reimbursed separately from the labor- atory tests. Second, they argue that the kickbacks were paid “in connection with” the patient referrals rather than any service for which medicaid funds were paid. They declare that the kickbacks did not affect their treatment of patients or the laboratory's performance of tests. It is fair to say that physicians in Michigan in 1976-1977 furnished the laboratory services to their patients. The physi- cians took the specimens and sent them to a laboratory. A laboratory could act only on orders from the physicians. Mich. Comp. Laws Ann. §§ 325.81(b), 325.89(b), repealed by Mich. Comp. Laws Ann. § 333.20501 et seq. (1978); cf. 42 C.F.R. § 405.1316(e) (Medicare regulations). The laboratory could report the test results only to the physicians, unless they instructed otherwise. Mich. Adm. Code R. 325.2353(2) (Rule 53); cf. 42 C.F.R. § 405.1316(g) (Medicare regulations). The physicians bore the responsibility of interpreting the test data. In short, the physicians did everything but actually perform the clinical tests. Under these circumstances, by interpreting the word “furnish” according to its common usage to mean “supply or provide”, I would hold that the physicians did “‘fur- nish” the laboratory services. The physicians received the kickbacks “in connection with” the laboratory services. The statute is satisfied if there is a logical relationship between the kickbacks and the services for which federal funds were paid. In our case, the kickbacks were an agreed part of the performance of the laboratory services. The relationship between the physicians and the laboratory was formed around the payment of the kickbacks. The physicians chose to refer patients to a specific laboratory because of the negotiated kickback payments. The phrase “in 23c connection with” has a sufficiently broad meaning in com- mon parlance to conclude that the kickbacks were received “in connection with” the laboratory services. The legislative history bolsters my interpretation of § 1396h (b) (1) as enacted in 1972. Congress intended to prohibit in the administration of the Medicaid program any practices which were unethical or were proscribed by state law. H. R. Rep. No. 92-231, 92d Cong., 2d Sess., reprinted in [1972] U.S. Code Cong. & Ad. News 4989, 5007, 5093, 5308. The physicians’ receipt of kickbacks for patient referrals to the laboratory is forbidden by both Section 21 of the Code of Ethics of the Michigan Association of Osteopathic Physicians and Surgeons and by state statute, Mich. Comp. Laws Ann § 445.162. Similarly, a laboratory is prohibited from soliciting business by paying kickbacks. Mich. Comp. Laws Ann. § 333.20525(c) 1978). Since the language of the statute permits, § 1396h (b) (1) should be interpreted to effectuate congressional intent. Barrett v. United States, 423 U.S. 212 (1976); United States v. Tarter, 522 F.2d 520 (6th Cir. 1975). The ordinary meaning of the statutory language and the 1972 legislative history compel the conclusion that the physicians’ receipt of kickbacks under the circumstances in this case is a violation of § 1396h (b) (1). Finally, because the ordinary meaning of the plain language of § 1396h (b) (1) would have notified the defen- dants that their conduct was unlawful, the statute is not un- constitutionally vague. United States v. Hancock, 604 F.2d at 1002. Accordingly, I concur with the opinion and judgment of the majority. ld APPENDIX D IN THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT UNITED STATES OF AMERICA, Plaintiff-Appellee v Nos. 79-5222-24 RICHARD TAPERT, HARVEY GOL- 79-5269-70 DEN, GERALD WEINGARDEN, DON- ALD FREEDLANDER, AND ROBER'1I GAST, Defendant-Appellants. MOTION TO STRIKE OR AMEND FOOTNOTE ONE IN CONCURRING OPINION NOW COMES the United States of America, by and through its attorney, James K. Robinson, United States Attor- ney, Eastern District of Michigan, and respectfully requests that footnote one of the concurring opinion in this case be striken or amended for the following reasons: 1. The defendants in this case, under terms of a plea bargain, pled guilty to various counts of receiving Medicaid kickbacks from Titan Laboratories for referral of blood work. In addition to making arguments on the meaning of “kick- backs” and on other matters of statutory interpretation, the defendants also contended on appeal that even if the Govern- ment'’s statutory interpretation was accepted, the information still failed to state an offense. 2d The Government responded on this last argument with two alternative arguments: 1) that the information implicitly alleged that the kickbacks were received by the defendants in connection with their furnishing to their Medicaid patients blood testing services performed by the lab (Argument IV-A of Government's Brief); or 2) that the information was infor- mally amended to embrace a second means of violating the statute in that the kickbacks were received by the defendants in connection with their furnishing treatment services to Medicaid patients separate from but related to the blood testing services performed by the lab (Argument IV-B of Government's Brief). The Court's opinion affirming the convictions stated simply that the defense contention that the information did not charge an offense was “considered and found to be without merit.” Slip op. at 17. Thus it is not clear whether the major- ity accepted Argument IV-A, Argument IV-B or both. The text and footnote one of the concurring opinion make it apparent, however, that the concurring opinion accepted Government's Argument IV-A and rejected Government's Argument IV-B. This motion addresses itself solely to the manner in which the concurring opinion rejected Government's Argument IV-B. 2. Footnote one of the concurring opinion states: 1. According to my construction of § 1396h(b)(1), the amended informations do state an offense, In his zeal to uphold the guilty pleas, the Assistant United States Attorney argued seriously that this Court should consider the amended informations to have been informally amended by oral argument and by his responre to the defendants’ motion to 3d dismiss the informations. Further, he contended that the district court had implicitly granted leave for this informal second amendment. The Govern- ment’s position is not supported in the record and is an attempt to play “fast and loose’ with the established rules of criminal procedure and prin- ciples of due process. Such overly zealous advocacy should be tempered. In other respects, the Assistant United States Attorney prepared a fine brief. 3. The Government respectfully suggests that the characterization of the Government's argument as “not sup- ported in the record” and as “an attempt to play ‘fast and loose’ with the established rules of criminal procedure and principles of due process” as well as constituting “overly zealous advocacy” is an unfair criticism of the Government's argument and that publication of this criticism in the perma- nent reports of the Sixth Circuit would do an injustice to the office of the United States Attorney for the Eastern District of Michigan and to the Assistant United States Attorney who handled the appeal in this case. 4. Assistant United States Attorney Francis Zebot, appel- late counsel for the Government in this case, presented Argu- ment IV-B in good faith. Even in the wake of the criticism in footnote one of the concurring opinion, he believes that the argument was appropriate and that advancing it was consis- tent with his obligation under Canon 7 of the Code of Profes- sional Responsibility: “A Lawyer Should Represent a Client Zealously Within the Bounds of the Law.” (See Zebot Affi- davit, attached hereto.) 5. In Argument IV-B, Mr. Zebot quoted precise lan- guage in the Government's response to defendant Golden's motion to dismiss and precise language in oral argument on that motion upon which he was relying to argue for informal 4d amendment of the information. See Government's Brief, pp. 67-69. He likewise quoted precise language from Judge Ken- nedy’s Opinion and Order denying defendant Golden’s mo- tion to dismiss upon which he relied. See Government’s Brief, pp. 70-71. The relied-upon language of Government trial counsel and Judge Kennedy does indeed refer to doctors’ treatment services to Medicaid patients separate from blood testing services. Yet footnote one asserts that appellate gov- ernment counsel's position is “not supported by the record.” 6. Not only did Mr. Zebot set out clearly the language upon which he relied for informal amendment and informal leave to amend, but stressed certain factors which might lead the court to be receptive to such informal amendment in the circumstances of this case (7.e., the virtual assurance of some reimbursable Medicaid treatment service by the defendants on a patient related to the blood work whenever there is a reimbursable Medicaid blood testing service by the lab; failure of the defense to object to the information on this specific ground before pleading guilty when the Government and court treated the information 2 if it embraced treatment services to patients; harmless error because of actual notice; the context of a bargained guilty plea (this factor was added at oral argument)). 7. Mr. Justice Sutherland In Berger v. United States, 295 U.S. 88 (1935) said: The United States Attorney is a representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal pro- secution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the 5d twofold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnest- ness and vigor — indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.” 8. Representing the government with “earnestness and vigor” certainly includes making good faith appellate argu- ments in an effort to sustain a criminal conviction. Ethical Consideration 7-4 regarding Canon 7 of the Code of Profes- sional Responsibility states: The advocate may urge any permissible construc- tion of the law favorable to his client, without regard to his professional opinion as to the likeli- hood that the construction will ultimately prevail. His conduct is within the bounds of the law, and therefore permissible, if the position taken is sup- ported by the law or is supportable by a good faith argument for an extension, modification, or rever- sal of the law. However, a lawyer is not justified in asserting a position in litigation that is frivolous. 9. Appellate courts are, of course, free to reject appellate arguments of counsel, as the concurring opinion does with respect to Argument IV-B. We disagree, however, that it was improper even to advance the argument and we believe that the position asserted was not “frivolous.” Surely the appellate adversary system is better served by a climate which en- courages counsel to make all good faith arguments in support of his or her client's cause. 10. Mr. Zebot has the reputation both in this office and the local legal community as a competent and cautious attorney 6d who attempts to seek justice within proper bounds. Prior to joining our office, Mr. Zebot served for several years with the office of the Michigan State Appellate Defender where he represented many indigent defendants in criminal appeals. 11. Mr. Zebot labored painstakingly to produce the brief in this case. To charge that he has made an argument not sup- ported by the record and to accuse him of playing “fast and loose” with the law in the permanent published reports of the Sixth Circuit would unjustly blemish an otherwise excellent record. 12. The concurring opinion’s rejection of Argument IV-B certainly can be accomplished without calling Mr. Zebot’s in- tegrity into question. WHEREFORE, for all the foregoing reasons, the Govern- meni respectfully requests that footnote one of the concurring opinion be struck or amended. Respectfully submitted, JAMES K. ROBINSON United States Attorney Dated: July 10, 1980. le APPENDIX E Nos. 79-5222, 79-5228, 79-5224, 79-5269 and 79-5270 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT (Filed July 29, 1980) UNITED STATES OF AMERICA, Plaintiff- Appellee, Vv ORDER RICHARD E. TAPERT, D.O., HAR- VEY GOLDEN, D.O., GERALD WEIN- GARDEN, DONALD FREEDLANDER and ROBERT GASH, Defendants-Appellants. Upon consideration of the motion of appellee to strike or amend footnote one in the concurring opinion in the above- styled cases, It is ORDERED that the motion be and it hereby is denied. ENTERED BY ORDER OF THE COURT. (s) JOHN P. HEHMAN, Clerk --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0645%3A1. Public record. Not legal advice.