Opposition Brief — Williams v. United States

aes

Nos. 95-289 and 95-290

In the Supreme Court of the Binited States

OcTOBER TERM, 1995

DEBORAH WILLIAMS, PETITIONER

v.

UNITED STATES OF AMERICA

GILBERT ROSS, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

“FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Drew S. Days, Ill

Solicitor General

JOHN C, KEENEY

Acting Assis*ani Attorney

General

DEBORAH WATSON

Attorney

Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTIONS PRESENTED

1, Whether the court of appeals employed *ie cor-

rect standard of review in assessing the sufficiency of

the evidence.

2. Whether the court of appeals properly con-

sidered the testimony of government witness Larita

Mitchell in assessing the sufficiency of the «evidence

against petitioner Williams.

3. Whether there was sufficient evidence that

petitioner Ross participated in the conduct of an en-

terprise through a pattern of racketeering activity.

4. Whether the district court correctly instructed

the jury that it could infer knowledge from deliberate

ignorance.

5. Whether the district court erred in restraining

petitioner Ross’s assets prior to sentencing pursuant

to the All Writs Act, 28 U.S.C. 1651.

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Caterino v. United States, 113 S. Ct. 129 (1992) . 19-20

Communist Party v. Subversive Activities Control

I Se RE SEO CROUGD ccvtabtinitinesthchancsnssevornss 15-16

Deakins v. Monaghan , 484 U.S. 193 (1988) ........ 25

Grayned v. City of Rockford, 408 U.S. 104

SUITE nc ectidisticl ane atesiccnnebtnecininiadeaboueinemertccoanes 19

H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S.

gs Ro Soe Aen? BIR ls aE AC 16, 17

Jackson v. Virginia, 443 U.S. 307 (1979) .......... 10, 12-13

Leary v. United States, 395 U.S. 6 (1969) .......... 20

Lewis v. Continental Bank Corp., 494 U.S. 472

PTET Sail tabie devchamambickctesnbauensesweseiectneiveneronvareens 25

Marquez v. United States, 504 U.S. 975 (1992) .. 20

Palomino-Figueroa v. United States, 115 S. Ct.

TIED rc Uinssi ccgaacancenssoibanracateseedtancbenesetinbe 19

Reves v. Ernest & Young, 113 S. Ct. 1163 (1993) 18

Salgado-Aristizabel v. United States, 504 U.S.

IIE Scat acienice cen deapetaineh pepkenatesmnunntyeecoese 20

Tomala v. United States, 504 U.S. 932 (1992) ...... 20

Turner v. United States, 396 U.S. 398 (1970) ....... 20

United States v. Feroz, 848 F.2d 359 (2d Cir.

Cee Sa coaceee 21, 22

United States v. Mang Sun Wong, 884 F.2d 1537

(2d Cir. 1989), cert. denied, 493 U.S. 1082

SEE sii tikcibdiciabctuecns iinet bniglaapseveigtehinasinatvodagreees 25

(IIT)

IV

Cases-Continued:

United States v. Monsanto, 491 U.S. 600

CRED ccncechiciesctedstidensbiankiasensninaseied enadeabiatasoaabiobon

United States v. New York Telephone Co., 434

UF BED GIVE) cdncncsccsiccnavtcsteetsinciisvivditnakiaginetean

United States v. Powell, 423 U.S. 87 (1975) .......

United States v. Rodriguez, 989 F.2d 455 (2d Cir.

FOU . ccnncecvtorscisiscntanbencsiccncciniibtmastinnaiivtiuniceness

Village of Hoffman Estates v. The Flipside,

Hoffman Estates, Inc., 455 U.S. 489 ( 1982) .....

Winship, In re, 397 U.S. 358 (1970) ...........ccecceeeees

Constitution, statutes and rules:

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p\ ey. 9 % Bis to | GREE re ent

Oe UE Rs Ne ctiscnilndiirictinaiitdareitintasiniapeittings

Racketeer Influenced and Corrupt Organizations,

Act 18 U.S.C. 1961 et seq.:

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56 UE oks EE Maiknsrinnicnenrcinnsanian

Bie Ee i ft eee ee

5B. Ui ie Un, cxnsaViieiasiidibininnnsincdanainnniinigee

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IS U.S.C. 19GGlaNIMANI) ...cccccrcccccccccrecccsccoseecess

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UB Be teetiecidaciicctitteieemnn

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BE VE a PI thtetensdevicavetapsoasnciecinemandiniemaie

Pod. BR. COR Bee GRD ocntecsisrpnveeniconserteceeniseusvides

Pod, Be Cai, Fr. Be) cckscrescosunciiicnssecessivvevintianiness

N.Y. Civ. Prac. L. & R. § 5222 (McVinney Supp.

TOO cckcsneiaiesttesneaneentniamidibbianenne

Miscellaneous:

American Law Institute, Model Penal Code &

Commentaries § 2.02(7) (1985) ...........cecceeceeseeeees

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In the Supreme Court of the Giuted States

OCTOBER TERM, 1995

No. 95-289

DEBORAH WILLIAMS, PETITIONER

v.

UNITED STATES OF AMERICA

No. 95-290

GILBERT ROSS, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (95-289 Pet. App.

la-24a; 95-290 Pet. App. 1a-24a)' is reported at 53 F.3d

507.

JURISDICTION

The judgment of the court of appeals was entered on

April 21, 1995. A petition for rehearing was denied on

June 9, 1995. Pet. App. 25a. The petitions for a writ of

1 When citing the court of appeals’ opinion in this brief, we

refer exclusively to the appendix to the petition in No. 95-290.

(1)

2

certiorari were filed on August 21, 1995. The juris-

diction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

Following a jury trial in the United States District

Court for the Southern District of New York, peti-

tioners were convicted on one count of racketeering,

in violation of the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. 1962(c); one

count of conspiring to engage in racketeering, in

violation of 18 U.S.C. 1962(d); and numerous counts of

mail fraud, in violation of 18 U.S.C. 1341. In addition,

petitioner Williams was convicted on nine counts of

money laundering, in violation of 18 U.S.C. 1956(a)(1)

(A)(i). Gov’t C.A. Br. 2-3. Petitioner Williams was

sentenced to 41 months’ imprisonment, to be followed

by a three-year term of supervised release. In

addition, she was ordered to pay $1,814,896 in

restitution to the New York State Department of

Social Services (DSS) and to forfeit $50,000 to the

United States. Petitioner Ross was sentenced to 46

months’ imprisonment, to be followed by a three-year

term of supervised release. He was also ordered to

pay $612,855 in restitution to DSS and to forfeit

$40,000 to the United States. Jd. at 3-4; Pet. App. 3a-

4a. The court of appeals affirmed the convictions, but

remanded for reconsideration of the restitution

orders. Pet. App. la-24a.

1. a. From February 1990 through June 1991, pe-

titioners participated in a racketeering enterprise

that defrauded the New York State Medicaid System

2 Petitioner Ross was acquitted on two counts of money

laundering. Gov’t C.A. Br. 3.

re

—_—_—_—$————

a mene eens ee EEE

of more than $8 million. The enterprise, headed by

Mohammed Sohail Khan, operated through four sham

clinics located in the New York City area. The

scheme operated as follows: Indigent patients came to

the Khan clinics to obtain prescriptions for expensive

drugs for which they had no medical need, and later

resold the drugs on the street for cash.

To obtain the prescriptions, the patients provided

the Khan clinics with valid Medicaid recipient num-

bers, underwent medically unnecessary procedures

and tests, and gave blood samples. The patients were

typically seen by Physicians’ Assistants (PAs), who

were fully aware of the fraud and made no pretense of

legitimate treatment. Doctors were rarely on the

premises at any of the clinics, and provided no

meaningful supervision over the PAs. Pet. App. 4a-5a.

Medicaid was billed for each patient visit and office

test. Moreover, each blood sample was sent to Clin

Path, a medical laboratory located in New Jersey,

which, in turn, billed Medicaid for every blood test.

Clin Path “kicked back” 27% of its Medicaid receipts

to Khan. Khan was the primary organizer of the

scheme: he leased the space for the clinics, purchased

what limited medical supplies were provided, and

hired and paid the PAs. Khan advertised for the

physicians in the New York Times, promising

“[vjery, very good $$.” Physicians were essential to

the success of the operation, because only a physician

could qualify as a Medicaid provider. Pet. App. 5a.

The physicians received Medicaid payments for

office visits and tests purportedly performed at the

clinics. Of those payments, the physicians would

“kick back” 30-40% to Khan. Eventually, the physi-

cians’ payments to Khan were disguised as rent pay-

ments. Under this arrangement, each physician en-

Se OR ES ea LL LLL LLL A

4

tered into a lease agreement with Khan in which the

physician agreed to pay Khan rent of $1500 per week

—an amount that did not correspond to the actual

rent paid by Khan for the premises. Pet. App. 5a-6a.

The Khan clinics were unusual in many ways.

They lacked substantial medical equipment and were

very dirty. In some of the clinics, signs instructed

patients not to discuss their prescriptions with one

another. The patients were not a normal mix of

children, women, and the elderly, but were mainly

men between the ages 25 and 45. There were never

any emergencies or hospital referrals, and every

patient was a Medicaid recipient. Finally, the clinics

had a policy of limiting follow-up visits, expressed, for

example, by a sign at one of the clinics that stated “no

more old patients for tomorrow.” This medically in-

defensible policy reduced the number of less-lucrative

second visits the clinics might otherwise expect. To

accomplish the same purpose, repeat patients often

were treated as “first-time” patients at several of the

clinics. Pet. App. 6a.

The physicians rarely examined any patients

themselves. Rather, the PAs would examine the

patients, seeing each one for only a few minutes.

Clinic records indicated that virtually all the patient

complaints were described in one of a very limited

number of ways, a coincidence that was statistically

impossible. Nearly all the blood samples taken were

analyzed under one of four highly specialized and

expensive tests. Hearing tests were ordered for

patients whose charts indicated no hearing problem.

Moreover, EKG tests lacked the required inter-

pretation, and some EKG graphs were cut into pieces

and distributed among the files of various patients.

Two physicians who worked at the clinics testified

5

that they realized almost immediately that the clinics

were not legitimate, and that they were fraudulently

billing Medicaid. Pet. App. 6a-7a, 10a.

b. Petitioner Williams was one of the physicians

employed at the Khan clinics. Khan testified at trial

that Williams was aware of Khan’s relationship with

Clin Path and that Williams agreed to pay Khan 40%

of her Medicaid receipts. To this end, Williams en-

tered into a bogus lease agreement under which she

agreed to pay Khan $1500 per week for rent. Khan

further testified that in May 1991 he was notified that

he and all the physicians were to be excluded from

Medicaid. He said that when he told Williams that he

was going to close the clinics because he did not

“want to be a front anymore,” Williams volunteered to

take over as the “front,” with Khan paying her ex-

penses from the money he received from Clin Path.

Pet. App. 8a-9a.

Dr. Sadaphal, another physician who worked at the

clinics, testified that she became concerned about the

remarkably similar diagnoses on all the patient

charts, and asked Williams about the similarities.

Williams “misled” Sadaphal by claiming that the

similarities were representative of the community in

which the clinics were located. Patient Larita

Mitchell testified that after giving the receptionist a

list of fake ailments, she met with Williams in an

examination room. Williams did not ask her any

questions or perform a medical exam. Rather,

Williams simply told Mitchell to “go next door and

take blood.” After giving blood, Mitchell obtained her

prescription, had it filled, and resold the drugs on the

street. Pet. App. 9a.

An examination of the charts of patients seen by

Williams and by the PAs supervised by her reflected

no real evidence of medical treatment. Rather, the

charts showed that unwarranted tests were done on

the patients, and that unwarranted medication was

prescribed for them. Moreover, a DSS physician re-

viewed the charts for 25 of Williams’ patients and

found that the patient complaints were strikingly

similar. All 25 patients complained of ulcers, and all

but two complained of both hypertension and asthma.

All three of the patients personally seen by Williams

were diagnosed with hypertension, notwithstanding

that one patient’s chart indicated a normal blood

pressure, and another contained no blood pressure

reading at all. Moreover, a review of the 25 charts

showed that Williams had approved and billed

Medicaid for 22 hearing tests ordered by the PAs,

even though the patients’ histories, set forth in the

charts, indicated no hearing loss. The charts also

showed that Williams had authorized complex blood

tests for all but one of the 25 patients, and made no

attempt to follow up abnormal results. Gov’t C.A. Br.

25-26.

c. Petitioner Ross was another physician em-

ployed at the clinics. At their first meeting, Khan

explained that Ross would have to give him 40% of his

Medicaid receipts, and that they would enter into a

lease agreement to mask the fee-splitting. Physi-

cian’s Assistant Melville Ferns, who was present at

the meeting, explained that all the patients came in

with the same complaints, and that Ross would write

them prescriptions. Ross “swallowed,” but said

nothing. Ross subsequently agreed to associate him-

self with one of the clinics. Gov’t C.A. Br. 39. There-

after, Ross was present at the clinic for approxi-

mately three days each week, and met with staff

members in the area where signs were posted

indicating that only new patients were welcome.

During an early meeting, Khan told Ross that a

patient that had been seen by another clinic physician

would be seen by Ross and treated as a “nev ” patient.

Khan explained that by recycling patients in that

fashion, each doctor could maximize profits by charg-

ing Medicaid for a first comprehensive visit and

certain testing, including a full blood work-up. Khan

showed Ross the notebook used to keep track of which

patients would be “new” for which doctor. Ross

iooked at the notebook and responded, “Looks like all

the corners are covered.” Pet. App. 12a; Gov’t C.A.

Br. 40.

Shortly after Ross joined the clinic, Ferns told him

that Khan had ordered a prohibition on urinalysis

because such tests were not profitable. Ferns sug-

gested that Ross speak to Khan about the prohibition,

but Ross did nothing. On another occasion, Ferns

told Ross that he routinely prescribed drugs without

seeing test results, and that when the lab results

arrived he did not review them. Ross took no action

in response to that information. In March 1991, after

a DSS representative had taken custody of 20 of

Ross’s files, Ferns advised Ross that they should

“put a lid on Mevacor’—a high cholesterol drug—

because the clinic was routinely prescribing it for pa-

tients whose blood tests showed a normal cholesterol

level. Ross agreed, and sent Ferns a letter “di-

recting” Ferns not to prescribe Mevacor without

proof of high cholesterol. Pet. App. 12a; Gov’t C.A. Br.

41, 103-104. A subsequent review of the charts of

patients supervised by Ross_ revealed patently

unnecessary testing. Gov’t C.A. Br. 42.

2. a. Ross testified at trial that he had no

knowledge of the ongoing fraud at the Khan clinics.

Gov't C.A. Br. 45-52.

The district court instructed the jury:

In determining whether these defendants acted

knowingly, you may consider whether the de-

fendants deliberately closed their eyes to what

otherwise would have been obvious.

I would like to point out that the necessary

knowledge cannot be established by showing that

a defendant was careless, negligent or foolish.

However, one may not willfully and intentionally

remain ignorant of a fact material and important

to his or her conduct in order to [escape] the

consequences of the criminal law. If you find be-

yond a reasonable doubt that a defendant was

aware that there was a high probability that the

representations charged in the indictment were

fraudulent but deliberately and consciously avoid-

ed confirming this fact, then you may treat this

deliberate avoidance of positive knowledge as the

equivalent of knowledge.

Gov't C.A. Br. 106.

b. Before trial, the court issued an order, pursuant

to 18 U.S.C. 981(b)(1) and 1963(d)(1), restraining cer-

tain of petitioner Ross’s assets, including real

property, bank accounts, and investment accounts.

The order permitted the release of assets for living

expenses and the release of $100,000 for attorney’s

fees through sentencing. Following the jury’s ver-

dict of guilty as to Ross, the district court issued an

order pursuant to the All Writs Act, 28 U.S.C.

1651(a), restraining Ross’s assets until sentencing.

9

The court cited its intention at sentencing to order

“substantial restitution” reflecting “all of the losses

caused by [Ross’s] activities” and found “a real

question” as to the existence of “liquid assets” to

satisfy that restitution. Gov't C.A. Br. 166-167. The

court found “no logic to the position that the [cJourt

is powerless to enter a restraining order after a

[guilty verdict] simply because sentencing has been

delayed so that a pre-sentence report may be pre-

pared.” Jd. at 168. The court also noted its authority

under 18 U.S.C. 3663 to enter a restraining order at

sentencing.”

At sentencing, the court found nothing to con-

tradict the presentence report’s determination that

Ross had a net worth in excess of half a million

dollars, and it ordered Ross to pay restitution in the

amount of $612,855, to be paid according to a schedule

that would be set at a subsequent proceeding. The

district court invited Ross’s counsel to submit a brief

on the issue of whether maintaining a restraining

order on his assets would constitute a denial of Ross’s

right to counsel. Ross’s counsel declined the court’s

invitation. Gov’t C.A. Br. 168-169.

At the subsequent hearing, the district court

evaluated Ross’s assets and reaffirmed its earlier

3 18 U.S.C. 3663(h)(1)(B) provides that an order of restitu-

tion “may be enforced * * * by the United States * * * in

the same manner as a judgment in a civil action.” Federal Rule

of Civil Procedure 69(a) allows the federal government to

enforce civil judgments in accordance with state practice and

procedure. New York Civil Practice Law and Rules § 5222

(McKinney Supp. 1995) provides for the issuance of a restrain-

ing order to prevent a judgment debtor from dissipating his

assets.

10

order of restitution. The court ordered that the

restitution payments be made according to a schedule

determined by the Probation Department as a special

condition of supervised release. The court also

restrained Ross’s assets pending appeal, again citing

its authority under 18 U.S.C. 3663(h).* The court

stated that it would “entertain an application to

adjust the restraining order to the extent necessary

to pay reasonable living expenses.” Ross has never

made such application. Pet. App. 23a; Gov’t C.A. Br.

169.

3. The court of appeals affirmed petitioners’ con-

victions, but remanded for reconsideration of the

restitution orders. Pet. App. la-24a. Applying the

standard recited in Jackson v. Virginia, 443 U.S. 307,

319 (1979) (whether “any rational trier of fact could

have found the essential elements of the crime beyond

a reasonable doubt”), the court rejected petitioners’

claim that the evidence was insufficient to establish

their knowledge of the scheme to defraud Medicaid.

Pet. App. 8a-10a, 12a-13a.

4 The government further noted, without dispute from

Ross, the court’s authority under Federal Rule of Criminal

Procedure 38(e) to enter a restraining order pending appeal to

ensure compliance with restitution. Gov’t C.A. Br. 169. Rule

38(e) provides:

A sanction imposed as part of the sentence pursuant to

18 U.S.C. * * * 3556 [order of restitution] may, if an

appeal of the conviction or sentence is taken, be stayed

* * * The court may issue such orders as may be

reasonably necessary to ensure compliance with the

sanction upon disposition of the appeal, including the

entering of a restraining order * * *.

11

The court also rejected Williams’ argument that

Larita Mitchell’s testimony should be disregarded

because Mitchell had perjured herself at trial. The

alleged perjury consisted of Mitchell’s testimony that

she remembered her visit with Williams because she

had gone to the clinic that day to obtain money to pay

her son’s Boy Scout dues; according to Williams,

Mitchell did not have a son in the Boy Scouts. Pet.

App. 9a-10a; Gov’t C.A. Br. 58 n.*. The court noted

that the government had made a “painstaking in-

vestigation” into the allegations that Mitchell’s

testimony was perjured, and that the results were

inconclusive. The court further found no evidence

that the government had knowledge of any perjury

when it proffered Mitchell as a witness. Finally, the

court held, Mitchell’s credibility was vigorously

disputed before the jury. Pet. App. 10a.

The court also rejected Ross’s contention that his

conduct did not amount to a pattern of racketeering

activity because he worked at the Khan clinics for

only nine weeks. The court held that the predicate

acts of racketeering had the requisite “relatedness”

and “continuity” because all the predicate acts of mail

fraud were performed in the same way with the same

purpose, and because the clinics regularly engaged in

defrauding Medicaid. Pet. App. 13a.

The court further rejected petitioners’ claim that

the district court’s conscious avoidance charge was

error because it failed to include certain “actual

belief’ balancing language—i.e., that the jury could

not infer the defendant’s knowledge of a fact if the

defendant actually believed that that fact did not

exist. The court held that the instruction given, to

which petitioners offered no objection at trial, did not

amount to plain error. The court found that although

12

the instruction did not include the “actual belief”

language preferred by that Circuit, the district

court’s charge as a whole set forth the requisite level

of knowledge and made clear that the necessary

knowledge could not be established by showing that a

defendant was “careless, negligent, or foolish.” Pet.

App. 16a-17a.

The court remanded on the issue of restitution. The

court found that the record did not indicate whether

the district court, in setting the amount of resti-

tution, considered the financial resources of the

defendants or the financial needs and earning ability

of the defendants and their dependents, as required by

18 U.S.C. 3664(a). Pet. App. 22a. The court also held

that the district court had improperly ordered that

the restitution payments be made according to a

schedule determined by the Probation Department.

Id, at 23a.

ARGUMENT

1. Petitioners argue (95-289 Pet. 33-40; 95-290 Pet.

49-56) that in reviewing the sufficiency of the evi-

dence, the court of appeals failed to apply the standard

articulated in Jackson v. Virginia, 443 U.S. 307, 316-

318 (1979), and In re Winship, 397 U.S. 358 (1970).

That claim is incorrect. In upholding the sufficiency

of the evidence, the court, citing Jackson v. Virginia,

443 U.S. at 319, correctly stated that the standard of

review was whether “any rational trier of fact could

have found the essential elements of the crime beyond

a reasonable doubt.” Pet. App. 8a. Applying that

standard, the court found the evidence sufficient to

13

>

establish petitioners’ knowing involvement in the

conspiracy charged.’

As to petitioner Williams, the court relied upon the

following factors as establishing her knowledge of the

scheme to defraud Medicaid: Khan’s testimony that

Williams was aware of his relationship with Clin Path

and that she agreed to pay him 40% of her Medicaid

receipts; Williams’ entry into a bogus lease agree-

ment under which she agreed to pay Khan $1500 per

week for rent; Williams’ volunteering to take over as

the “front” when Khan told her that he was going to

close the clinics; Williams’ misleading of Dr. Sadaphal

upon hearing Sadaphal’s concerns regarding the

similar diagnoses on all the patient charts; and

Mitchell’s testimony that Williams gave her a pre-

scription without performing a medical exam. Pet.

App. 8a-9a. That evidence was sufficient to establish

Williams’ knowledge of the illegal scheme beyond a

reasonable doubt.

As to petitioner Ross, the court relied on the

expert testimony establishing the fraudulent nature

of Ross’s patients’ charts; Ross’s presence three days

5 Petitioners also claim (95-289 Pet. 38-39; 95-290 Pet. 55-56)

that reliance on this language in Jackson v. Virginia undercuts

the “beyond a reasonable doubt” standard by suggesting that

only one juror need be persuaded of a defendant’s guilt beyond

a reasonable doubt. In reciting that the standard was whether

“any rational trier of fact” could have found guilt beyond a

reasonable doubt, however, the Jackson Court was merely

making the observation that the sufficiency inquiry does not

require an appellate court to “ask itself whether it believes that

the evidence at the trial established guilty beyond a reasonable

doubt.” 443 U.S. at 318-319. Rather, explained the Court, the

relevant question is whether “any rational trier of fact” could

have so found. Jd. at 319.

14

a week at the clinic, where he had ample opportunity

to observe the “utterly inadequate facilities” as well

as the posted signs indicating that only new patients

were welcome; Ross’s attempt to cover his tracks,

after the DSS had taken custody of some of his

patients’ files, by instructing that a certain drug be

prescribed only when the condition for which it

should be prescribed was present; and Ross’s failure

to do anything upon being informed that all of his

patients came in with the same complaints, and upon

being asked to speak to Khan about a nonsensical

prohibition on urinalysis. Pet. App. 12a-13a. As the

court of appeals correctly found, that evidence was

sufficient to establish Ross’s knowledge of the

clinics’ fraudulent nature. I[bid.

Petitioners rely (95-289 Pet. 34-38; 95-290 Pet. 51-

55) on an article authored by Second Circuit Chief

Judge Jon Newman, to the effect that appellate courts

have failed to take the “beyond a reasonable doubt”

standard seriously in assessing sufficiency of the

evidence claims. Whether other courts have properly

applied the correct standard of review to sufficiency

claims, however, has no bearing on this case; the

factors relied upon by the court of appeals in this case

clearly established petitioners’ guilt beyond a reason-

able doubt.

2. Petitioner Williams argues (95-289 Pet. 13-16,

40-50) that, in conducting its sufficiency analysis, the

court of appeals improperly relied on Larita

Mitchell’s testimony because evidence discovered

after trial showed that Mitchell had perjured herself.

In particular, petitioner claims that Mitchell lied in

testifying that she remembered her visit to the clinic

and her treatment by Williams because she had gone

to the clinic that day to obtain money to pay her son’s

enn

15

Boy Scout dues. According to Williams, evidence dis-

covered after trial (which petitioner fails to disclose

here) showed that Mitchell’s seven-year-old son was

not old enough to be a Boy Scout and that in any event

the child was not in Williams’ custody at the time of

Mitchell’s visit to the clinic.

Petitioner cannot complain of the court of appeals’

consideration of Mitchell’s testimony in assessing

the sufficiency of the evidence against her. Following

the post-trial discovery of the alleged perjury,

petitioner made no attempt to seek a new trial or to

present evidence of the alleged perjury to the district

court. Moreover, the court of appeals found that the

government had conducted a “painstaking investi-

gation” into the allegations, but that the results were

“inconclusive.” Pet. App. 10a. The court further

found that petitioner had presented no evidence that

the government had knowledge of any perjury when it

proffered Mitchell as a witness. Jbid.

In any event, Mitchell’s alleged perjury went to a

collateral issue, and not to the core of her testimony

that she visited the clinic and that Williams issued

her a prescription without first conducting an

examination of any kind. Indeed, Mitchell’s meeting

with Williams was fully corroborated by the patient

file prepared by Williams and introduced into evidence

at trial. Gov’t C.A. Br. 58 n.*. Moreover, Mitchell’s

credibility was thoroughly challenged on cross-

examination. That examination disclosed Mitchell’s

drug addiction, her prior conviction for drug pos-

session, and her possible fear of prosecution. Evi-

dence bearing on whether or not her son was a Boy

Scout at the time in question would have added little

16

of impeachment value to the cross-examination.°

Finally, even absent Mitchell’s testimony, the

evidence amply established the existence of the

fraudulent scheme and Williams’ knowing partici-

pation in that scheme. The court of appeals’ reliance

on Mitchell’s testimony in assessing the sufficiency

of the evidence would, at most, be harmless error.

3. Petitioner Ross argues (95-290 Pet. 56-59) that

the evidence failed to establish that his conduct

amounted to a “pattern of racketeering activity” be-

6 Petitioner relies (95-289 Pet. 40-41) on Communist Party

v. Subversive Activities Control Board, 351 U.S. 115 (1956), for

the proposition that the court of appeals improperly relied on

Mitchell’s testimony in making its assessment as to the

sufficiency of the evidence. Petitioner’s reliance on Com-

munist Party is misplaced. In Communist Party, this Court,

having granted certiorari, was faced with an “uncontested

challenge” that one of the administrative findings under

review “was in part the product of three perjurious witnesses.”

Id. at 124. To avoid unnecessary decision of the constitutional

issues on which certiorari was granted, see id. at 122, the Court

remanded the case to the agency for a determination of

whether the agency had based its decision on tainted or

untainted evidence. That disposition does not suggest that a

remand to the court of appeals or district court would be

appropriate here. Unlike in Communist Party, the charge of

perjury here was not “uncontested.” Jd. at 124. In addition,

while the alleged perjury here was collateral, the perjury in

Communist Party was “not inconsequential in relation to the

issues on which the [agency] had to pass.” Jd. at 123. Unlike

petitioner, who did not present her claim of perjury to the

district court, the petitioner in Communist Party had

unsuccessfully sought leave to adduce additional evidence

before the Board to support its claim of perjury. Jd. at 119-120.

Accordingly, Communist Party does not support petitioner’s

claim.

ee

17

cause he was at the Khan clinics for only nine weeks.

The court of appeals correctly rejected that claim.

In H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S.

229, 239 (1989), the Court held that, to form a pattern,

the predicate acts of racketeering in a RICO case

must be “related” and must “amount to or pose a

threat of continued criminal activity.” Criminal acts

are related if they have the “same or similar

purposes, results, participants, victims, or methods

of commission.” Jd. at 240. The Court defined

“continuity” to include “either * * * a closed period

of repeated conduct, or * * * past conduct that by its

nature projects into the future with a threat of

repetition.” Jd. at 241. When a RICO case has been

commenced before continuity can be established by

proof of “a series of related predicates extending over

a substantial period of time,” then “liability depends

on whether the threat of continuity is demonstrated.”

Id. at 242.

Although the Court in H.J. Inc. stated that

continuity is “centrally a temporal concept,” it also

made clear that “the requisite threat of continuity”

may be present even though “the number of related

predicates involved may be small and they may occur

close together in time.” 492 U.S. at 242. The Court

explained that a “RICO pattern may surely be esta-

blished if the related predicates themselves involve a

distinct threat of long-term racketeering activity,

either implicit or explicit,” or if “the racketeering

acts themselves include a specific threat of repetition

extending indefinitely into the future.” Jbid. Finally,

the Court held that facts external to the predicate

acts, such as the nature of the RICO enterprise, may

supply the threat of continued criminal activity. For

example, the threat of continuity may be established

18

by showing that the predicate acts are part of an

ongoing entity’s regular way of doing business. Jd. at

243. The question whether the charged predicate acts

establish a threat of continued racketeering activity

“depends on the specific facts of each case.” Id. at 242.

As the court of appeals correctly held (Pet. App.

13a), the H.J. Inc. standards are met here. Ross’s ten

predicate acts of mail fraud were performed in the

same way and with the same purpose: to defraud

Medicaid. Moreover, the requisite threat of

continuity was present here because the Khan clinics

regularly engaged in defrauding Medicaid—indeed,

the perpetration of such fraud appears to have been

the sole reason for the clinics’ existence.

Petitioner mistakenly asserts (95-290 Pet. 57-58)

that the court of appeals’ conclusion that his conduct

amounted to a pattern of racketeering conflicts with

the Court’s decision in Reves v. Ernest & Young, 113

S. Ct. 1163 (1993). In Reves, this Court construed the

phrase “to conduct or participate, directly or in-

directly, in the conduct of [an] enterprise’s affairs” to

require an element of managing or operating the

enterprise. The Court explained (id. at 1170) (foot-

note omitted):

Of course, the word “participate” makes clear

that RICO liability is not limited to those with

primary responsibility for the enterprise’s affairs,

just as the phrase “directly or indirectly” makes

clear that RICO liability is not limited to those

- with a formal position in the enterprise, but some

part in directing the enterprise’s affairs is

required.

Here, the proof squarely established that petitioner

had a role in directing the clinics’ affairs. Like the

a a A A li A A

$e

Se

19

other physicians employed by the clinic, Ross per-

formed unnecessary tests on patients, billed Medicaid

for the office visits and the medical tests, and kicked

back 40% of his Medicaid receipts to Khan. Moreover,

a physician such as Ross may reasonably be found to

be a supervisor of the Physicians Assistants, whose

activities were the primary means of carrying out the

fraudulent schemes. Thus, petitioner had a role in

directing or managing the illegal scheme, which

established his “participat{ion] in the operation or

management of the enterprise itself.” Jd. at 1172.’

4. Petitioners also contend (95-289 Pet. 17-33; 95-

290 Pet. 34-49) that the district court erred in giving

the jury a “deliberate ignorance” instruction on the

knowledge element of the offense. They argue (95-289

Pet. 18-19, 25-26; 95-290 Pet. 34-35, 42-48) that the

Ross also raises a vagueness challenge to the pattern of

racketeering element of the RICO statute. He relies on the

opinion concurring in the judgment in H.J. Inc., 492 U.S. at

251-256, in which Justice Scalia, joined by three other Justices,

expressed doubts about whether the RICO “pattern” require-

ment could withstand a constitutional vagueness challenge. To

succeed on such a vagueness claim, the defendant must show

that the statute is vague as applied to the particular conduct

with which he is charged. See Village of Hoffman Estates v.

The Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494-495 &

n.7 (1982); United States v. Powell, 423 U.S. 87, 92 (1975). The

defendant must show that the statute fails to give a person of

ordinary intelligence reasonable notice that his conduct is

forbidden. See Grayned v. City of Rockford, 408 U.S. 104, 108

(1972). Petitioner’s active participation in this case of ongoing

Medicaid fraud unmistakably satisfied the pattern requirement

On ten separate occasions over a two-month period, Ross

submitted invoices to Medicaid for patently unnecessary tests.

Those act:', as Ross well knew, were part of the clinics’ regular

way of doing business.

ee

20

instruction was improper because it permitted the

jury to convict them on proof of mere negligence; that

the instruction was legally insufficient because it did

not contain certain balancing language; and that

there was no evidentiary basis for such a charge.

This Court has denied several recent petitions for

writs of certiorari raising similar issues. See

Palomino-Figueroa v. United States, 115 S. Ct. 640

(1994); Caterino v. United States, 113 S. Ct. 129

(1992); Marquez v. United States, 504 U.S. 975 (1992);

Salgado-Aristizabel v. United States, 504 U.S. 942

(1992); Tomala v. United States, 504 U.S. 932 (1992).

The government acquiesced in the petition for

certiorari in YJomala, and the government also

suggested that the petitions in Salgado-Aristizabel

and Marquez be held pending this Court’s disposition

of Tomala. The petitions in all of those cases were

nonetheless denied. There is no reason for a different

result here.

a. The instruction given in this case did not dilute

the knowledge requirement of petitioners’ offenses or

otherwise permit their conviction on proof of mere

negligence. The second paragraph of the district

court’s instruction concerning the knowledge ele-

ment of the offenses largely tracked Model Penal

Code § 2.02(7), which states:

When knowledge of the existence of a particular

fact is an element of an offense, such knowledge is

established if a person is aware of a high pro-

bability of its existence, unless he actually

believes that it does not exist.

That definition of knowledge was approved by this

Court in Leary v. United States, 395 U.S. 6, 46 & n.93

(1969), and Turner v. United States, 396 U.S. 398, 416

21

& n.29 (1970). The Model Penal Code definition of

knowledge is commonly used in so-called “deliberate

ignorance” or “conscious avoidance” cases, in which

the defendant asserts that he lacked knowledge of a

crucial material fact. In fact, however, the in-

struction is more accurately described as a definition

of the level of certainty required to constitute

knowledge of a fact for purposes of the criminal law.

Congress could not have viewed the absence of

absolute certainty as equivalent to the absence of

knowledge, for in many cases a defendant would learn

of incriminating facts only from other persons, rather

than from direct observation, or would avoid learning

the facts in order to maintain a pretense of ignorance.

The “high probability” formulation accords with the

common sense understanding of the level of certainty

required to constitute knowledge in those situations.

Contrary to petitioners’ contention (95-289 Pet. 18-

19, 25-26; 95-290 Pet. 34-35, 42-43), the instruction in

this case did not invite the jury to convict them on a

theory of negligence. The instruction stated that the

jury could find that petitioners acted knowingly if it

found beyond a reasonable doubt. that they were

“aware that there was a high probability that the

representations charged in the indictment were

fraudulent but deliberately and consciously avoided

confirming this fact.” Gov't C.A. Br. 106. The

instruction expressly cautioned, however, that the

necessary knowledge could not be established by

showing that petitioners were “careless, negligent or

foolish.” Ibid.

Petitioners argue (95-289 Pet. 27-29; 95-290 Pet. 44-

45) that the conscious avoidance instruction was

insufficient as a matter of law because it failed to

include any “actual belief” balancing language—i.e.,

22

that a defendant’s knowledge was not established by

an awareness of a high probability of a fact’s

existence if he actually believed that the fact did not

exist. Petitioners correctly note that in United

States v. Feroz, 848 F.2d 359, 360-361 (2d Cir. 1988)

(per curiam), the Second Circuit stated that “in

giving the conscious avoidance charge, the district

judge should instruct the jury that knowledge of the

existence of a particular fact-is established (1) if a

person is aware of a high probability of its existence,

(2) unless he actually believes that it does not exist.”

The court directed that the prosecutor should

request that the “high probability” and “actual belief”

language be incorporated into every conscious

avoidance charge. The court nonetheless held that a

conscious avoidance instruction that included neither

“actual belief’ nor “high probability” balancing lan-

guage, while “incomplete,” did not constitute plain

error.

In keeping with the court’s directive in Feroz, the

government in this case requested that the “actual

belief’ language be included in the charge. The

district court failed to comply with that request,

however, and petitioners did not object to the

omission. Gov't C.A. Br. 111 n.* The court did,

however, instruct that “the necessary knowledge

cannot be established by showing that a defendant was

careless, negligent or foolish.” Jd. at 106. Moreover,

during deliberations, in response to a jury request for

further instructions concerning the agreement ne-

cessary to establish a conspiracy, the district court

charged the jury (id. at 108 (emphasis omitted)):

If you find that a doctor who you are

considering went to work at one of these clinics

23

and that that doctor’s activities furthered the

fraudulent scheme but that doctor did not know

that a fraud was going on, the mere fact that that

doctor worked at that clinic without knowledge or

intent to further the fraudulent activity, that

would not make that doctor a member of the

conspiracy, because the doctor would not

knowingly and intentionally in any way associate

himself or herself with the fraud, and therefore

there would never be a basis on which you could

find that, impliedly or tacitly, that doctor agreed

to participate in a fraudulent scheme or frau-

dulent conspiracy.

* * * kK *

* * * Itis * * * absolutely required that you

find before you convict a defendant that that

defendant knowingly and intentionally acted to

further the aims of the conspiracy. The fact that

a person simply worked there, if that person did

not know of any fraud going on and did not intend

to further any fraud by their action, that would

not justify any verdict of guilty in this case.

Given these explicit instructions as to the level of

knowledge necessary to convict, the court of appeals

properly found (Pet. App. 17a) that the district court’s

failure to include the “actual belief” language in the

conscious avoidance instruction “did not constitute

plain error ‘going to the very essence of the case.’”

b. Petitioners also argue (95-289 Pet. 19-20, 30-31;

95-290 Pet. 36-37, 46-48) that the deliberate ignorance

instruction was improperly given in this case because

the evidence at trial did not present a question of

conscious avoidance. The evidence, however, was

24

sufficient to establish that if petitioners were

unaware of the Medicaid fraud, their ignorance was

deliberate. Petitioners ignored the obvious physical

inadequacies of the Khan clinics, they failed to

question the blatant and repetitive similarities in the

patient charts, they authorized expensivé tests and

prescriptions that were unsupported by the patient

files, and they received large Medicaid payments in

exchange for doing virtually nothing. When a

physician voiced concern to petitioner Williams that

“something was wrong” because all the patient charts

were nearly identical, Williams took no steps to

assure herself of the legitimacy of the clinic’s

practice, but summarily dismissed the physician’s

concern by responding that the suspicious similari-

ties were representative of the community in which

the clinics were located. Similarly, when PA Ferns

told petitioner Ross that all of the patients com-

plained about essentially the same ailments, and

directed that Ross would write them prescriptions,

Ross “swallowed” and said nothing. When Ferns told

Ross that he should talk to Khan about Khan’s

prohibition on urinalysis because they were not

profitable, Ross did nothing. And when Ferns told

Ross that he routinely prescribed drugs without

seeing test results, and that when the lab results

arrived he did not review them, Ross did nothing. In

sum, the evidence was more than adequate to justify a

conscious avoidance charge.*

8 Petitioners claim (95-289 Pet. 30-31 & n.8; 95-290 Pet. 47-

48 & n.16) that unlike the Fifth, Ninth, Tenth, and Eleventh

Circuits, which require an evidentiary showing that the

defendant pursued a conscious course of deliberate ignorance,

the Second Circuit “allows use of a conscious avoidance charge

25

5. Finally, petitioner Ross contends (95-290 Pet.

59-64) that, following his conviction, the district court

improperly restrained his assets pursuant to the All

Writs Act, 28 U.S.C. 1651, in order to preserve those

assets for restitution at sentencing. That contention

is moot. The district court’s order restraining Ross’s

assets pending sentencing, issued pursuant to the All

Writs Act, was in effect only for the brief period of

time between its entry and the district court’s

restitution order at sentencing. By its terms, the

order expired at sentencing; accordingly, there is no

reviewable issue for the Court to consider. See Lewis

v. Continental Bank Corp., 494 U.S. 472, 477-478

(1990); Deakins v. Monaghan, 484 U.S. 193, 199

(1988).°

without specific evidence of a conscious purpose to avoid

detection.” Petitioners are wrong. Although the courts of

appeals have articulated a variety of approaches to the question

of when an instruction concerning deliberate ignorance may be

given, the Second Circuit has held that there must be an

evidentiary basis for a conscious avoidance charge. Thus, the

court has held that a factual predicate exists for the charge

when “the evidence is such that a rational juror may [conclude]

beyond a reasonable doubt” that “the defendant was aware of a

high probability of the fact in dispute and consciously avoided

confirming that fact.” United States v. Rodriguez, 983 F.2d

455, 458 (2d Cir. 1993); see also United States v. Mang Sun

Wong, 884 F.2d 1537, 1541-1542 & n.5 (2d Cir. 1989), cert.

denied, 493 U.S. 1082 (1990). The Second Circuit in this case

did not address petitioners’ claim that there was no evidentiary

basis for a conscious avoidance instruction. There was ample

evidence, however, to show that petitioners consciously avoided

confirming the Medicaid fraud that was taking place at the

Khan clinics.

® The district court clearly had the authority at

sentencing, pursuant to Federal Rule of Criminal Procedure

38(e), to restrain petitioner Ross’s assets pending appeal in

26

In any event, the district court properly restrained

Ross’s assets following his conviction and pending

sentencing pursuant to the All Writs Act. That Act

provides that a court “may issue all writs necessary

or appropriate in aid of their respective jurisdictions

and agreeable to the usages and principles of law.” 28

U.S.C. 1651(a). This Court “has repeatedly re-

cognized the power of a federal court to issue such

commands under the All Writs Act as may be

necessary or appropriate to effectuate and prevent the

frustration of orders it has previously issued in its

exercise of jurisdiction otherwise obtained.” United

States v. New York Telephone Co., 434 U.S. 159, 172

(1977) (approving use of All Writs Act to order

telephone company to assist FBI in installing pen

registers, even though no statute specifically re-

quired such assistance).

Here, based on the evidence presented at trial, the

district court was persuaded that Ross should make

restitution to the State of New York for the losses

caused by his activities, including both the amounts

he himself received and the amount paid by the State

for unnecessary tests ordered under Ross’s provider

number. An order restraining Ross’s assets was

therefore necessary in order to preserve Ross’s

assets pending sentencing. Because the order was

“necessary and appropriate in aid” of the district

court’s jurisdiction, it was entirely appropriate under

the All Writs Act.

Ross also claims (95-290 Pet. 62-63) that the post-

verdict restraining order violated his Sixth Amend-

order to ensure compliance with the court’s restitution order,

and petitioner Ross does not dispute the district court’s

authority to do so.

27

ment right to use his own funds to retain defense

counsel. It is doubtful that funds needed to satisfy

restitution orders have any different constitutional

status from forfeitable funds, see United States v.

Monsanto, 491 U.S. 600, 615-616 (1989) (rejecting

Sixth Amendment attack on restraint of forfeitable

funds), but, in any event, petitioner’s claim lacks

merit. Under the pre-trial restraining order, $100,000

was made available to Ross to hire and pay for counsel

of his choice. Moreover, the district court determined

at sentencing that Ross had a net worth in excess of

half a million dollars. The court nonetheless invited

Ross’s counsel to submit a brief on the issue of

whether maintaining a restraining order on his

assets would constitute a denial of Ross’s right to

counsel. Ross’s counsel declined that invitation. In

those circumstances, Ross’s Sixth Amendment claim

must fail.

CONCLUSION

The petitions for a writ of certiorari should be

denied.

Respectfully submitted.

DREw S. DAYS, III

Solicitor General

JOHN C. KEENEY

Acting Assistant Attorney

General

DEBORAH WATSON

Attorney

NOVEMBER 1995

—