# Petition for Writ of Certiorari — Hale v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1997
- **Citation:** 522 U.S. 860

## Text

FILED 1)
Me

neo 97-50 JUL 21997

Supreme Court, U.b». (1

O§ INE CLERKS
ine

Supreme Court of The United Diites
October Term 1996
e

DAN E. HALE,

Petitioner,
we

UNITED STATES OF AMERICA,
Respondent.

+

Petition For A Writ Of Certiorari
To The United States Court of
Appeals For The Sixth Circuit

€ —

PETITION FOR WRIT OF CERTIORARI
with Appendix

e

*ROBERT W. RITCHIE

WADE V. DAVIES

RITCHIE, FELS & DILLARD, P.C.
606 W. Main Street, Suite 300
P.O. Box 1126

Knoxville, TN 37901-1126
(423) 637-4623

Attorneys for Petitioner
*Counsel of Record

——-

LEGAL ADVANTAGE * 432 Walnut Street * Cincinnati, OH 45202
(800) 581-2252

i

QUESTIONS PRESENTED
WHETHER THE SIXTH CIRCUIT’S
RESTRICTIVE INTERPRETATION OF BRADY y.
MARYLAND, WHICH PROHIBITS DISTRICT COURTS
FROM CONTROLLING THE TIMING AND MANNER OF
PRODUCTION OF BRADY MATERIAL, VIOLATED DR.
HALE’S RIGHT TO DUE PROCESS BY PREVENTING
DEFENSE COUNSEL FROM RECEIVING AND MAKING

EFFECTIVE USE OF BRADY MATERIAL.

WHETHER THE STRICTER STANDARD OF
BRADY REVIEW, WHICH MANDATES REVERSAL
ONLY WHEN THERE IS A REASONABLE LIKELIHOOD
THAT FALSE TESTIMONY COULD HAVE AFFECTED
THE JUDGMENT OF THE JURY, SURVIVES KYLES vy.
WHITLEY AND APPLIES TO A SITUATION IN WHICH
THE PROSECUTOR ELICITED A FALSE STATEMENT
FROM A KEY PROSECUTION WITNESS ON REDIRECT
EXAMINATION.

WHETHER THE SIXTH CIRCUIT’S
INTERPRETATION OF RICO’S “RELATEDNESS”
REQUIREMENT, WHICH ALLOWS UNRELATED MAIL
FRAUD SCHEMES TO BE JOINED IN ONE RICO
COUNT AS LONG AS EACH SCHEME ALLEGES
MULTIPLE MAILINGS, EVISCERATES THE
“RELATEDNESS” REQUIREMENT AND RENDERS THE
STATUTE UNCONSTITUTIONALLY VAGUE.

li

TABLE OF CONTENTS

QUESTIONS PRESENTED 2.2... .cccccccccceccess i
TARE OF CARE 6.e4 Lock kd aoswaaeenaeees il
TABLE OF At Tene bn oobi cc en cceeueneweese Vv
OPRGULINS BeGare 50554 56 4Gse ee oe eae l |
STATEMENT OF KURT TOON ... cc cievccwens | |

CONSTITUTIONAL AND STATUTORY

PROVIGIING BUVURL VED ook o's secede cewtacseues l
STATEMENT OF THE CAGE 2. .cnscsccsvesecscess 2
REASONS FOR GRANTING THE WRIT ............ 6

I. THE SIXTH CIRCUIT’S RESTRICTIVE
INTERPRETATION OF BRADY y.
MARYLAND, WHICH PROHIBITS
DISTRICT COURTS FROM
CONTROLLING THE TIMING AND
MANNER OF PRODUCTION OF BRADY
MATERIAL, VIOLATED DR. HALE’S
RIGHT TO DUE PROCESS’ BY
PREVENTING DEFENSE COUNSEL

i a Dina tig oy lee lta ich Re Det Di St BEA Sa Ee etn Sota es

“ PL te bP Oe

ill

FROM RECEIVING AND MAKING
EFFECTIVE USE OF BRADY MATERIAL ..... 6

THE STRICTER STANDARD OF BRADY
REVIEW, WHICH MANDATES
REVERSAL ONLY WHEN THERE IS A
REASONABLE LIKELIHOOD THAT
FALSE TESTIMONY COULD HAVE
AFFECTED THE JUDGMENT OF THE
JURY, SURVIVES KYLES v. WHITLEY
AND APPLIES TO A SITUATION IN
WHICH THE PROSECUTOR ELICITED A
FALSE STATEMENT FROM A KEY
PROSECUTION WITNESS ON REDIRECT
EXAMINATION ......---eeeeee reer teeee 16

THE SIXTH CIRCUIT’S
INTERPRETATION OF RICO’S
“RELATEDNESS” REQUIREMENT,
WHICH ALLOWS UNRELATED MAIL
FRAUD SCHEMES TO BE JOINED IN
ONE RICO COUNT AS LONG AS EACH
SCHEME. ALLEGES MULTIPLE
MAILINGS, EVISCERATES THE
“RELATEDNESS” REQUIREMENT AND
RENDERS THE STATUTE
UNCONSTITUTIONALLY VAGUE ........ 20

iV

CONCLIUMEE ... Gn 2 a i eed 25

APPENDIX
OPINION BY THE SIXTH CIRCUIT ........ App. 1
ORDER OF THE SIXTH CIRCUIT ......... App. 20
U.S. CONSTITUTION, AMENDMENT V_ ... App. 22
IS UMC MONE: wos liies ssc App. 22
ISUGC SION okies ce edaeee ces App. 23
18 U.S.C. §3500(b) oo... cece e eee ee ee ee App. 23
RESPONSE TO PETITION FOR

REHEARING AND SUGGESTION FOR
REHEARING EN BANC ..........00-005- App. 24

Vv

TABLE OF AUTHORITIES
Cases

Ashland Oil, Inc. v. Arnett, 875 F.2d 1271
5, Ce ME . Sereerepenere ng ars 2 eer ry oe 22,23

Brady v. Maryland, 373 U.S. 83 (1963) ......... passim

Feinstein v. Resolution Trust Corporation,
O62 ESE PEG Bi che ieee ed) 21,22

Grant v. Alldredge, 498 F.2d 376 (2d Cir. 1974) ... 11,12

H.J., Inc. v. Northwestern Bell Telephone Company,
RGZ AED: FoR eee 0 ai AAS AIS 24

Kyles v. Whitley, 514 U.S. 419,
115 S. Ct. 1555, 131 L.Ed.2d 490 (1995) ...... passim

Sutherland v. O’Malley, 882 F.2d 1196
4 1k Peer Gas ee ee re te 22

United States v. Agurs, 427 U.S. 97 (1976) ..... 16,17,18

United States v. Alzate, 47 F.3d 1103 (11th Cir. 1995) .20

vi

United States v. Anderson, 481 F.2d 685
(4th Cir. 1973), aff'd 417 U.S. 211 (1974) ......... 1]

United States v. Bagley, 473 U.S. 667 (1985) ........ 17

United States v. Elmore, 423 F.2d 775
(4th Cir. 1970), cert. denied, 400 U.S. 825 (1970) ...15

United States v. Dan E. Hale,
Rh Re |) nie i a ene ]

United States v. Jones, 612 F.2d 453 (9th Cir. 1979),
cert. denied, 445 U.S. 966 (1980) ................ 14

United States v. Owen, 933 F. Supp. 76
EP : SHE obs keke ecee de eau labeueteeieee 13

United States v. Pollack, 534 F.2d 964 (D.C. Cir.),
cert. denied 424 U.S. 924 (1976) .............. 13,14

United States v. Presser, 844 F.2d 1275
Ga CE sk nckcasveadhabecksaarceuen passim

United States v. Scott, 524 F.2d 465 (Sth Cir. 1975) ...14

Vii

United States v. Smith Grading and Paving, Inc.,
760 F.2d 527 (4th Cir.), cert. denied, 474 U.S. 1005
1...) eee eeeer er eee Pe Or ene eters Peer 14

United States v. Starusko, 729 F.2d 256 (3d Cir. 1984) . 13

United States v. Williams, 10 F.3d 1070
(4th Cir. 1993), cert. denied 115 S.Ct. 313 (1994) ...12

United States Textiles, Inc. v. Anheuser-Busch
Companies, Inc., 911 F.2d 1261 (7th Cir. 1990) ..... 22

Vild v. Visconsi, 956 F.2d 560
(6th Cir. 1992), cert. denied, 506 U.S. 832 (1992) ... 23

Re sy oa dawned case eases !
NONI iad os 2 i Sa cia pe sek 1,2
Re, ae er a ere re ree 3
| ne ee ene 1,7
Te o> et non Tene

United States Constitution, Amendment V ............ l

l

PETITION FOR WRIT OF CERTIORARI

Petitioner Dan E. Hale respectfully prays that a writ of
certiorari issue to review the judgment of the United States
Court of Appeals for the Sixth Circuit entered January 28,
1997.

+
OPINIONS BELOW

The District Court Judgment was affirmed by the
United States Court of Appeals for the Sixth Circuit on
January 28, 1997. United States of America v. Dan E. Hale,
No. 95-5915 (6th Cir. 1/28/97).

e
JURISDICTION

The opinion of the United States Court of Appeals for

the Sixth Circuit was entered on January 28, 1997. A timely

Petition for Rehearing and Suggestion for Rehearing En Banc
was filed on February 11, 1997. Rehearing was denied on
April 3, 1997. The jurisdiction of this Court is invoked under
28 U.S.C. § 1254(i).

¢

CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
United States Constitution, Amendment V.
18 United States Code Section 1961(5).
18 United States Code Section 1962(c).
18 United States Code Section 3500(b).

2

STATEMENT OF THE CASE

Dr. Dan Hale operated a large medical center serving
primarily indigent patients in rural East Tennessee.

At trial, it was undisputed that a group of Dr. Hale’s
patients from Mt. Vernon, Kentucky, organized an insurance
fraud scheme. Led by Russell Ramsey, this group managed
to purchase multiple, supplemental insurance policies, which
paid claimants an amount for each day they were in a
hospital. Thereafter, these individuals sought hospitalization
for injuries that they had faked. The multiple insurance
policies provided a windfall for each hospitalized patient.
Each participant in the scheme provided a percentage of his
or her take to the organizer, Russell Ramsey.

The government indicted and convicted some 32
people involved in the insurance scam. As the participants
began to try to cooperate with the government, the
investigators turned their attention to their doctor. On
September 29, 1994, Dr. Hale was indicted. The original
indictment alleged that Dr. Hale participated in a RICO
conspiracy and committed a substantive RICO violation by
participating in the affairs of Boulevard West Medical Center
(BWMC) through a pattern of racketeering activity, in
violation of 18 U.S.C. § 1962(c). The government

superseded the indictment because it had improperly alleged

eee ee eT en ee

3

jurisdiction over certain counts.' The superseding indictment
alleged mail fraud as the “racketeering activity.” The
allegations of mail fraud fell into two distinct, unrelated
groups. The first group of counts alleged that Dr. Hale aided
and abetted the over- insurance scheme perpetrated by his
patients from Kentucky. In the second distinct group of mail
fraud counts, Dr. Hale was alleged to have committed mail
fraud against Medicare/Medicaid by billing and receiving
reimbursement for unnecessary medical procedures.

With regard to the insurance fraud scheme, the
question at trial was whether Dr. Hale knew that his Mt.
Vernon, Kentucky, patients had devised a scheme to defraud
the insurance companies and whether he knowingly aided and
abetted their efforts by admitting them to the hospital without
medical reason.

As one of their final witnesses, the government called
Russell Ramsey, the organizer, to testify against Dr. Hale.
Ramsey portrayed himself as having a close relationship with
the doctor. He testified that after he became involved in the
insurance scheme, he got other people involved. He testified
that he would introduce a new patient to Dr. Hale by telling
him that he had somebody that had been hurt and that he
wanted Dr. Hale to doctor them. The prosecutor then asked

'The district court had jurisdiction pursuant to 18
U.S.C. § 3231 to hear allegations of a violation of a fedeal
criminal statute.

4

Ramsey whether Dr. Hale seemed like he knew what Ramsey
meant, and Ramsey said that he did.

Among other extremely damaging claims, Ramsey
testified that Dr. Hale told him how to have his family and
friends act in the hospital. Finally, Ramsey testified that Dr.
Hale knew what was going on. Ramsey even claimed that he
once complained to Dr. Hale about a problem with all the
insurance forms.

What defense counsel did not know, however, was
that Mr. Ramsey had given a series of three interviews to the
prosecution team, including the prosecutor himself. In the
first two interviews, Ramsey admitted that he had organized
the insurance fraud scheme, but he exonerated Dr. Hale from
any involvement. In fact, the second memorandum of
interview reflects that although the Assistant United States
Attorney who handled the case confronted Ramsey with the
government’s belief that there must have been an agreement
with the doctors, Russell confirmed that he went in and lied
to the doctor about the injuries of the people he brought in
there. He insisted there was no “predetermined agreement
between he [sic] and the doctors.” Ramsey also responded to
interrogation about why he would protect the doctors by
saying that he would not do so. As the United States Court of
Appeals for the Sixth Circuit found in its opinion, these
exculpatory statements and others it listed in what it called a
“nonexhaustive list of Brady material” showed that, “the

5

government’s contention that the interview summaries do not

contain exculpatory material is patently unsupportable.”
Despite the obvious exculpatory nature of the

memoranda, the prosecution declined to produce them.

AD th Ra A Ses te Yin Spm ta hl SL Bs hb Alb ton Ye

wee ee

6

REASONS FOR GRANTING THE WRIT

I THE SIXTH’ CIRCUIT’S’§ RESTRICTIVE
INTERPRETATION OF BRADY v. MARYLAND,
WHICH PROHIBITS DISTRICT COURTS FROM
CONTROLLING THE TIMING AND MANNER OF
PRODUCTION OF BRADY MATERIAL,
VIOLATED DR. HALE’S RIGHT TO DUE
PROCESS BY PREVENTING DEFENSE COUNSEL
FROM RECEIVING AND MAKING EFFECTIVE
USE OF BRADY MATERIAL.

Because the United States Court of Appeals for the
Sixth Circuit has unduly restricted the authority of district
courts to order pretrial production of Brady material, even in
extremely complex cases such as this one, Dr. Hale had no
way to compel the government to produce this extraordinarily
important Brady material. See United States v. Presser, 844
F.2d 1275 (6th Cir. 1988). Had the district court had the
authority to compel pretrial production of Brady material in
this complex case, this problem would never have arisen. Dr.
Hale respectfully suggests that this Honorable Court should
grant his Petition for Writ of Certiorari and reject the overly
restrictive interpretation by the Sixth Circuit, which conflicts

7

with the holdings of several other circuits and is contrary to
the spirit of Brady v. Maryland’ and Kyles v. Whitley.

In Kyles v. Whitley, 514 U.S. 419, 115 S.Ct. 1555, 131
L.Ed.2d 490 (1995), this Court clarified the standard of
appellate review for Brady violations and emphasized the
prosecutor’s responsibility for ensuring that Brady material is
obtained and disclosed. Kyles v. Whitley, 115 S. Ct. at 1567-
69. This Court did not address, however, the timing and
procedure for Brady disclosure or the district court’s authority
to regulate the timing of such disclosure. Dr. Hale
respectfully submits that clarification of this important and
decisive issue is worthy of this Court’s consideration.

Unlike other circuits, the Sixth Circuit has held that a
district court exceeds its authority when it issues an order
requiring pretrial production of Brady material. United States
v. Presser, 844 F.2d 1275, 1284 (6th Cir. 1988). In Presser,
the government appealed a pretrial order of the district court
that required the government to disclose Brady/Giglio
evidence prior to trial. Jd. at 1276. The court surveyed this
Court’s decisions and determined that the Brady doctrine does
not create a general right to pretrial discovery. Jd. at 1283.
The Sixth Circuit also relied on the Jencks Act provisions at
18 U.S.C. § 3500(b) which provide that government’s witness
statements only have to be turned over after the witness has

2373 U.S. 83 (1963).

|

sake Pele he eS) I RR EE ie Sts BREE

8

testified on direct examination. Jd. at 1283. The court held
that the Jencks Act controls the timing of disclosure of any
exculpatory evidence contained within such statements.
Thus, the rule in the Sixth Circuit has come to be that a
district court has no authority to ensure that a defendant’s
Fifth Amendment right to due process is upheld by requiring
pretrial disclosure of Brady material.

Dr. Hale’s case presents a compelling example of how
the Sixth Circuit’s restrictive interpretation has the unforeseen
consequence of denying litigants such as Dr. Hale the
effective use of exculpatory information. Dr. Hale’s case was
extremely lengthy and complex. It resembled much more
closely a complex civil, regulatory matter in many ways than
it did a traditional criminal trial. This was a case that not
even the greatest defense lawyer could wing with last minute
preparation. The case required in-depth, early preparation.

Unfortunately, however, because the trial court lacked
authority to order pretrial production, defense counsel never
knew of the existence of interview memoranda that showed
a progression of a witness’ story that could have established
Dr. Hale’s theory of the case. Dr. Hale attempted to show
that he had no knowledge of the scheme and that those who
were involved in the fraud and now sought to implicate him
were in fact simply trying to curry favor with the United
States government after having gotten caught. These few of
Dr. Hale’s thousands of patients had fooled him and used

9

him. The memoranda showed just that scenario. The
organizer of the entire scheme initially told the truth that Dr.
Hale was not part of an agreement with them. Ramsey
explained that they had lied to the doctor to gain admission to
the hospital. Later, after months had gone by in which
Ramsey realized he was facing an extremely lengthy prison
sentence, he told the prosecution team what they had clearly
indicated in the first interviews they wanted to hear.

Armed with the knowledge that Ramsey had
exculpated Dr. Hale and then changed his story, defense
counsel could have launched a devastating attack, both on
Ramsey and the manner in which the government
investigators carried out their investigation. Defense counsel
could have effectively shown the jury how the prosecution
team suggested to those who participated in the fraud that the
government wanted to hear that Dr. Hale was involved and
that, facing lengthy prison terms, at least Russell Ramsey
finally gave them what they wanted to hear.

Without pretrial disclosure of the memoranda
themselves, effective cross-examination of Ramsey was

impossible, and the jury never got to hear about the
suggestions that the government team made to Mr. Ramsey at
the first, exculpatory interviews. That pretrial disclosure is in
some cases the only effective way to disclose Brady material
is illustrated by what actually happened in this case. In the
face of renewed Brady request by the defense, the prosecutor

10

did produce these memoranda for the trial court’s inspection,
but because of the way the prosecutor handled the disclosure,
the trial court only had a few seconds after the witness had
testified on direct examination to review the documents. The
district court’s cursory review proved to be too little too late.
The district court informed defense counsel orally that the
memoranda contained statements that Russell Ramsey had
lied to the doctor and that there had been no predetermined
agreement. However, without having the documents
themselves, defense counsel was wholly unable to use this
information. On cross examination, one of defense counsel’s
first lines of questioning involved a statement made by the
court that Russell Ramsey had at one time said that doctors
did not know about insurance forms. Ramsey’s response was,
“I believe the doctors knew everything.” Without having the
document, defense counsel could not impeach Ramsey with
his prior exculpatory statements. A bench conference was
held, and defense counsel explained that he was at a loss as to
how to handle the situation. The district court acknowledged
the problem caused by the manner in which defense counsel's
access to the memorandum had been restricted:

I gave you what was exculpatory in that one

paragraph. There were other things said in

that paragraph that made me believe that--I

don’t want to play psychologist--that maybe

Russell Ramsey was sort of in a train of

11

thought because I knew that what was said

was that he did not think the doctors knew,

but the very next sentence was, well, they did

have to get the doctor’s signature on the form

or something to that extent.

The court went on to acknowledge, “[t]hat’s the problem
when you get just exculpatory information.”

Thus, even the district court was uncertain about how
to handle the disclosure. Other courts have grappled with the
timing of Brady disclosure, and several different approaches
can be gleaned. As the Court of Appeals for the Fourth
Circuit has noted, part of the confusion stems from the fact
that “the Supreme Court has never pinpointed the time at
which the disclosure must be made.” United States v.
Anderson, 481 F.2d 685 (4th Cir. 1973), aff'd 417 U.S. 211
(1974).

Some courts have clearly held that pretrial disclosure
under certain circumstances is required in order to safeguard
the defendant’s right to due process. For example, in Grant
v. Aildredge, 498 F.2d 376 (2d Cir. 1974), the United States
Court of Appeals for the Second Circuit held that certain
types of Brady material must be disclosed prior to trial in
order to allow full exploitation by the defense. Jd. at 382. As
the Second Circuit made clear:

Although it may well be that marginal Brady

material need not always be disclosed upon

12

request prior to trial, the fact that Ms. Harris

had selected Walsh as a suspect was without

question specific, concrete evidence of a

nature requiring pretrial disclosure to allow

for full exploration and exploitation by the

defense. This information, so withheld by the

government, would have had a material
bearing on defense preparation and therefore

should have been revealed well before the

commencement of the trial.

Grant, 498 F.2d at 382 (citations omitted).

Other circuits have taken a much more balanced
approach than the Sixth Circuit and have recognized that
pretrial disclosure of Brady material may be required in order
to ensure its effective use. This issue has often come up when
courts consider whether exculpatory information, which is
also covered by the Jencks Act, must be disclosed prior to
trial. The United States Court of Appeals for the Fourth
Circuit, for example, has recognized that district courts may
need to order earlier production of Brady material. As the
court stated, the Jencks Act “in no way impairs the
government’s constitutional obligations under Brady v.
Maryland.” United States v. Williams, 10 F.3d 1070, 1079
(4th Cir. 1993), cert. denied, 115 S. Ct. 313 (1994).

Similarly, the United States Court of Appeals for the
Third Circuit has recognized that “compliance with the

13

statutory requirements of the Jencks Act does not necessarily
satisfy the due process concerns of Brady.” United States v.
Starusko, 729 F.2d 256, 263 (3d Cir. 1984).?

Several thoughtful district court opinions have taken
this approach as well. E.g., United States v. Owen, 933 F.
Supp. 76, 84 (D. Mass. 1996) (“given the important nature of
the constitutional rights at stake, this court rules that the
Brady requirement must effectively trump the Jencks Act
where the two are in direct conflict.”)

In United States v. Pollack, 534 F.2d 964, 973 (D.C.
Cir.), cert. denied, 424 U.S. 924 (1976), the court held that
“{d]isclosure by the government must allow the defense to use
that favorable material effectively in the preparation and
presentation of its case, even if satisfaction of this criterion
requires pretrial disclosure.” The Pollack court proposed the
use of a balancing test which could utilize the district court’s
ability to weigh competing interests:

Application of a strict rule in this area would

inevitably produce some situations in which

late disclosure would emasculate the effects of

Brady or other situations in which premature

disclosure would unnecessarily encourage

those dangers that militate against extensive

3In Presser, the Sixth Circuit acknowledged that its approach
potentially conflicted with the Third Circuit’s approach in Starusko.
Presser, 844 F.2d at 1283, n.9.

14

discovery in criminal cases, e.g., potential for

manufacture of evidence or bribing of

witnesses. Courts can do little more in
determining the proper time for disclosure

than balance in each case the potential dangers

of early discovery against the need that Brady

purports to serve of avoiding wrongful

convictions.
United States v. Pollack, 534 F.2d at 973-74.

On the other hand, other circuits have joined the Sixth
Circuit, at least to the extent of holding that where evidence
is both Brady and Jencks material, the Jencks Act controls the
timing of disclosure. United States v. Scott, 524 F.2d 465,
467-68 (Sth Cir. 1975); United States v. Jones, 612 F.2d 453,
455 (9th Cir. 1979), cert. denied, 445 U.S. 966 (1980). None
of these cases, however, seems to go as far as the Sixth
Circuit opinion purports to do in preventing the district court
from ordering the pretrial production of Brady material that
is not necessarily covered by the Jencks Act.

As noted above, the United States Court of Appeals
for the Fourth Circuit takes the position that Brady is fulfilled
when a disclosure of exculpatory material is made at a time
such that it allows the defense to make effective use of the
material at trial. See United States v. Smith Grading and
Paving, Inc., 760 F.2d 527, 532 (4th Cir.), cert. denied, 474
U.S. 1005 (1985). The Fourth Circuit has clarified that

15

“disclosure to be effective must be made at a time when the
disclosure would be of value to the accused.” United States
v. Elmore, 423 F.2d 775, 779 (4th Cir 1970), cert. denied, 400
U.S. 825 (1970). This Court should clarify that, in a complex
case, it is highly likely that effective disclosure must be made
at a time well in advance of trial.

In this case, the writ should be granted to clarify that
district courts do have a role to play in determining the timing
and manner of Brady disclosure. This Court could also use
the opportunity to promulgate a balancing test to set out those
proper factors. Among those of course would be the
complexity of the case. Clearly, in this case, the complexity
required pretrial production. This Court could also clarify the
manner in which disclosure is to be made. In this case, the
district court’s quick attempt to summarize the exculpatory
material was of no value to the defendant. Thus, the Sixth
Circuit plainly erred when it held that the most telling
exculpatory material was revealed to the defense by the trial
judge and was of a nature that it could be effectively exploited
by cross examination. (App.10). Even the trial judge’s
comments revealed the limitations of the district court’s
disclosure.

This Court should also grant the writ to clarify for
Department of Justice prosecutors what their role is and that
the courts do have authority over their conduct. After the
Sixth Circuit found that the prosecutor had withheld Brady

16

material in this case, that same prosecutor disclosed to the
court that one of the things he had learned from the
experience was that one of his approaches to this problem
would be not to take notes of his interviews in the future.

(App. 25).

Il. THE STRICTER STANDARD OF BRADY REVIEW,
WHICH MANDATES REVERSAL ONLY WHEN
THERE IS A REASONABLE LIKELIHOOD THAT
FALSE TESTIMONY COULD HAVE AFFECTED
THE JUDGMENT OF THE JURY, SURVIVES
KYLES v. WHITLEY AND APPLIES TO A
SITUATION IN WHICH THE PROSECUTOR
ELICITED A FALSE STATEMENT FROM A KEY
PROSECUTION WITNESS ON REDIRECT
EXAMINATION.

In United States v. Agurs, 427 U.S. 97 (1976), this
Court set out three different types of Brady claims and
applied different standards of review to each. The first
standard was to govern the situation in which the prosecution
introduced trial testimony that it knew, or should have known,
was perjured. 427 U.S. at 103-104. The Court mandates
strict review of this situation and held that “a conviction

obtained by the knowing use of perjured testimony is
fundamentally unfair, and must be set aside if there is any

17

reasonable likelihood that the false testimony could have
affected the judgment of the jury.” Agurs, 427 U.S. at 103.
The second two Agurs situations arise where the government
has failed to honor a defense request for disclosure of some
specific exculpatory evidence or where the government failed
to volunteer exculpatory evidence never requested or
requested only generally. In United States v. Bagley, 473
U.S. 667 (1985), the Court clarified that it would apply the
same standard of review to the latter two situations. The test
is that reversal is required “if there is a reasonable probability
that, had the evidence been disclosed to the defense, the result
of the proceeding would have been different.” Bagley, 473
U.S. at 682. In Kyles v. Whitley, US. ,115S.Ct.
1555 (1995), this Court clarified and refined this Bagley
materiality standard but specifically noted that it was not
addressing any claim under the first Agurs category. Kyles v.
Whitley, 115 S. Ct. at 1565 n.7.

Dr. Hale respectfully submits that this Court should
grant the writ to clarify the first Agurs situation and
specifically to clarify the difference in the standard of review
set out in Bagley and recently clarified in Kyles v. Whitley.

In this case, the prosecutor elicited testimony from the
organizer of the insurance fraud scheme, Mr. Ramsey, that
was simply false. The context is the same as in the first
Brady issue presented above. After having specifically
denied defense counsel the opportunity to examine Mr.

18

Ramsey’s glaringly exculpatory prior interviews, the
prosecutor compounded the prejudice by having Mr. Ramsey
affirm on redirect examination that Ramsey had always told
the truth and always told the same thing he told the jury.

Q. So, you have talked about this on

several occasions?

A. Yes, I have.

Q. And have you always told the same

thing that you have told this jury,
including what Dr. Hale’s role was in
this conspiracy?

A. I have tried my best 100 percent.

As set out above, contrary to this representation, Ramsey had
previously in effect denied that Dr. Hale had any role other
than to be used and deceived by the individual the
government was using as a witness. It is difficult to
comprehend asking this question when the prosecutor had the
memorandum in his possession and was personally present at
the interview for which the memorandum reflects that the
prosecution team asked him why he was covering for the
doctors.

After having just elicited information from Ramsey
that he had always told the same story and had always told the
truth, the prosecutor went on to ask Ramsey a leading
question that called for an answer again that contradicted
what Ramsey said when previously interviewed:

19

Q. Did Don Collins tell you before you

went down there in 1988 that Dr. Hale
was already doing this?

A. Yes.

Again, this directly contradicts the government’s
memorandum:

We asked him [Russell Ramsey] to go back to

the time when Donald Collins introduced him

to the doctors. He stated that-he was only

introduced to Dr. Hale and not Dr. Lynch. He

says that Donald Collins never said that he,

Hale, was a “crooked” doctor. Donald Collins

only told him, “They’ll put you in--act hurt.”

These affirmative acts by the prosecution mislead the
jury and defense counsel.

Having discovered this problem, appellate counsel for
Dr. Hale suggested to the Sixth Circuit that it would be
appropriate for the court to review the error under the stricter,
first Agurs standard set out for reviewing instances in which
the prosecution elicits or fails to correct perjury. The Sixth
Circuit failed to do so.

In contrast to the Sixth Circuit’s decision not to apply
the stricter standard of review in this case, the United States
Court of Appeals for the Eleventh Circuit has determined that
it is appropriate to apply the stricter standard when the

prosecution, even unintentionally, made a false representation

20

to the jury but did not correct it when it had the opportunity
to do so. United States v. Alzate, 47 F.3d 1103 (11th Cir.
1995). The Eleventh Circuit found that the stricter standard
was appropriate in cases involving prosecutorial misconduct
in the corruption of a truth-seeking function. Alzate, 47 F.3d
at 1110.

In light of the importance of the issue and the differing
approach taken in the different circuits, this Court should
grant the writ to clarify under what circumstances the stricter
standard is to be applied after Kyles v. Whitley.

III. THE SIXTH CIRCUIT’S INTERPRETATION
OF ~— RICO’S “RELATEDNESS”
REQUIREMENT, WHICH ALLOWS
UNRELATED MAIL FRAUD SCHEMES TO
BE JOINED IN ONE RICO COUNT AS LONG
AS EACH SCHEME ALLEGES MULTIPLE
MAILINGS, EVISCERATES THE
“RELATEDNESS” REQUIREMENT AND
RENDERS THE STATUTE
UNCONSTITUTIONALLY VAGUE.

The issue placed before the United States Court of
Appeals for the Sixth Circuit was whether two unrelated mail
fraud “schemes” can be lumped together in one RICO count
in an attempt to create a “pattern of racketeering activity.” As

21

Dr. Hale set forth, a common sense reading of the statutory
language indicates that unrelated criminal activity cannot
form a “pattern” as a matter of law. Dr. Hale has shown that
the Medicare/Medicaid over utilization allegations bore no
relationship to the Kentucky insurance fraud scheme. The
Sixth Circuit explicitly disregarded the problem:

Even if we assume arguendo that the alleged

Medicare and Medicaid abuse was unrelated

to the Kentucky insurance fraud, there were

many related predicate acts involved in the

insurance fraud alone. This is enough to

satisfy the RICO relatedness requirement.

(App. at 18) (citations omitted).

In one fell swoop, this ruling eviscerates the
“relatedness” requirement, conflicts with established circuit
precedent (including its own), and renders the statute
unconstitutionally vague.

First, the Sixth Circuit’s novel holding that unrelated
mail fraud schemes could be joined in one RICO count as part
of a “pattern” just because each scheme involved more than
one mailing directly contradicts other circuit precedent. In
Feinstein v. Resolution Trust Corporation, 942 F.2d 34 (1st
Cir. 1991), the United States Court of Appeals for the First
Circuit clearly rejected a similar argument. There, the court

addressed two different sets of transactions stemming from
formation of joint ventures. Jd. at 44. The court found that,

22

as here, each of the “schemes” featured several transactions.
Id. Nevertheless, the fact that each scheme contains several
transactions did not overshadow the real problem which was
that the unrelated schemes could not be joined in a single
RICO count alleging a pattern of racketeering. Jd.

Specifically in mail fraud context, there is a host of
cases which hold that the mere fact that there were several
mailings alleged to be in furtherance of a single scheme does
not create a RICO pattern. E.g., United States Textiles, Inc.
v. Anheuser-Busch Companies, Inc., 911 F.2d 1261, 1267-69
(7th Cir. 1990); Sutherland v. O'Malley, 882 F.2d 1196, 1205
(7th Cir. 1989) (“mail fraud and wire fraud are perhaps
unique among the various sorts of ‘racketeering activity’
possible under RICO and that the existence of a multiplicity
of predicate acts . . . may be no indication of the requisite
continuity of the underlying fraudulent activity. Thus, a
multiplicity of mailings does not necessarily translate into a
‘pattern’ of racketeering activity.”). In Ashland Oil, Inc. v.
Arnett, 875 F.2d 1271, 1278 (7th Cir. 1989), the court further
explained this concept:

The plaintiffs are mistaken to emphasize the

raw number of mail and wire fraud violations.

Some of the present. uncertainty over the

pattern elements stems from such arguments

which depend upon the unusual nature of

23

these two most commonly alleged RICO

predicate acts.

RICO includes as “racketeering activity” any

act indictable under the mail and wire fraud

Statutes. In mail and wire fraud, each mailing

or interstate communication is a separate

indictable offense, even if each relates to the

same scheme to defraud, and even if the

defendant did not control the number of

mailings or communications. Thus, the
number of offenses is only tangentially related

to the underlying fraud, and can be a matter of

happenstance.
(Citations omitted).

In the past, even the United States Court of Appeals
for the Sixth Circuit had recognized that multiple mailings
under one scheme could not cure the fact that unrelated
schemes cannot be joined in one RICO count. Véild v.
Visconsi, 956 F.2d 560, 567 (6th Cir. 1992), cert. denied, 506
U.S. 832 (1992). In the instant case, the Sixth Circuit seems
to have abandoned its prior reasoning.

Second, the Sixth Circuit’s approach undermines the
defendant’s right to a unanimous jury verdict. The Sixth
Circuit ruling indicates that a pattern could have been made

out of multiple mailings under either “scheme.” That is not
how Dr. Hale was charged. There is no way to know whether

24

a jury would have convicted Dr. Hale if the indictment had
only alleged the private insurance fraud scheme as consisting
of a pattern. Thus, the Sixth Circuit's approach undermines
Dr. Hale’s right to a unanimous jury verdict.

Finally, the Sixth Circuit’s ruling renders the pattern
requirement so nebulous that the RICO statute must be
deemed unconstitutionally vague. Justice Scalia
foreshadowed this problem in his concurring opinion in HJ,
Inc. v. Northwestern Bell Telephone Company, 492 U.S. 229,
256 (1989):

No constitutional challenge to this law has

been raised in the present case, and so that

issue is not before us. That the highest Court

in the land has been unable to derive from this

statute anything more than today’s meager

guidance bodes ill for the day when that

challenge is presented.

In affirming a conviction that was based on an
allegation of a “pattern” which itself comprised wholly
unrelated activity, the United States Court of Appeals for the
Sixth Circuit has inadvertently excised from the statute the
meager guidance that the public and the courts had previously
been given regarding the scope of the RICO statute and the

meaning of the pattern requirement.

25

CONCLUSION

Dr. Hale’s due process right to bring the truth before
the jury was abridged by the prosecutor’s refusal to disclose
exculpatory evidence and by his eliciting false statements
from Mr. Ramsey. This Court should grant the writ to clarify
to all district courts that they do have the right to prevent such
deprivations before trial and to clarify the standard under
which courts of appeals review instances of putting false
testimony before the jury. This Court’s review would also
serve to clarify an important issue regarding limitations on the
RICO pattern requir.inent. Dr. Hale respectfully prays that
a writ of certiorari issue.

Respectfully submitted,

ROBERT W. RITCHIE

WADE V. DAVIES

Counsel of Record

RITCHIE, FELS & DILLARD, P.C.
606 West Main Avenue

P. O. Box 1126

Knoxville, TN 37901-1126

(423) 637-0661

Attorney for Petitioner

APPENDIX

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

CASE N® 95-5915

+
PAGE NO.

Sixth Circuit Opinion,
gs Tr Terr reer Tere Te ee 1-19
Order [Denying Petition for
Rehearing En Banc},
ENT Shoda he's ce beceecerceccvcceus 20-21
U.S. Constitution, Amendment V ............. 22
18 U.S. Code § 1961(5) ...ccccccccccccvcves 22
18 U.S. Code § 1962(c) ..... cc ccvesccvecees 23
18 U.S. Code § 3500(b) ... wc crc ccc cvvecens 23

Excerpted Response to Petition

for Rehearing and Suggestion

for Rehearing En Banc,

ko, eee err ee eee ree eee eee 24-25

APPENDIX A

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

+
OPINION

Sixth Circuit Case N®&. 95-5915
Filed January 28, 1997

¢

Pages 1 thru 19

;
ye - :
;

App. |

NOT RECOMMENDED FOR PUBLICATION

No. 95-5915

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

DAN E. HALE,

Defendant-Appellant.

) OPINION

) (iled 1/28/97)

)

) ON APPEAL FROM
)THE UNITED
) STATES DISTRICT
) COURT FOR THE

) EASTERN DISTRICT
) OF KENTUCKY

BEFORE: NORRIS, SUHRHEINRICH, = § and

BATCHELDER, Circuit Judges.

ALAN E. NORRIS, Circuit Judge. Dr. Dan E. Hale
appeals from his multi-count conviction for crimes related to

his Tennessee medical practice. For the reasons outlined

below, we now affirm his conviction and sentence.

App. 2

I.

Defendant began practicing medicine in Morristown,
Tennessee, in 1977. For many years he worked in loose
association with Dr. Gene Lynch, eventually purchasing his
practice in 1992, at which time Lynch became an employee
of defendant’s professional service corporation, Boulevard
West Medical Center (““BWMC”).

In the early 1990s, several insurance companies
contacted the United States Postal Service to report their
belief that a large-scale insurance fraud was ongoing in
Kentucky and Tennessee. The Lexington, Kentucky, office
of the Postal Inspection Service looked into the matter.
Inspector Lanny Miller contacted insurance companies in an
effort to determine the extent of the fraud and the identity of
the perpetrators. Eventually, the Inspection Service focused
on about forty people living near Mt. Vernon and Corbin,
Kentucky.

The fraud worked simply. Participants would buy
numerous hospital indemnity policies that paid a sum certain
in the event of a hospital admission. They would then fake
injuries, present themselves to a “sympathetic” doctor, and
gain admission to a hospital, typically for a soft tissue injury.
The participants then filed claims for coverage with numerous

insurance companies.
After investigators developed a detailed understanding
of how the fraud operated, they confronted some of the

App. 3

participants, thirteen of whom testified against defendant,
explaining how he helped them by authorizing hospital stays.
Russell Ramsey, who directed many of the participants,
recalled how defendant had facilitated the enterprise. Ramsey
would simply tell defendant that he had somebody who
needed “doctoring.” So certain was Ramsey that his charges
would be admitted to the hospital that he explained in
advance what they needed in the way of supplies for a stay of
ten to fifteen days.

The fraud spanned several years, during which time
Ramsey estimated that he orchestrated as many as 100
admissions to the Morristown hospitals. He also indicated
during trial that defendant seemed to know what was going on
with respect to the fraud although they did not discuss it
specifically because, in Ramsey’s view, “I was kind of
protecting him.” According to Ramsey, defendant suggested
that the people he brought in for admission should “ride in
wheelchairs.” As further evidence of their close association,
Ramsey testified that defendant once asked to borrow
$200,000 to buy equipment for the office.

A primary issue at trial and on appeal involves when,
and if, defendant knew of the fraud. Defendant focuses on
what he sees as inconsistencies in three pretrial interviews of
Ramsey by law enforcement officials. In two of them,
Ramsey insisted “there was no predetermined agreement
between he [sic] and the doctors.” In the last interview,

App. 4

however, after having “had a good bit of time to reflect on his
relationship with Dr. Dan Hale,” Ramsey claimed that he
would talk to defendant the day before he was to bring in a
new “patient.” Defendant would tell Ramsey how to have the
patients behave: bend over in pain, use a wheelchair, and
request pain medication. He also discouraged Ramsey’s
fondness for staging car accidents because they involved
police; rather, “a bathtub was a good place to have an
accident.”

Other testimony that pertained to defendant’s
knowledge of the fraud came from Steven Taylor, who
administered a hospital in Morristown. In 1990, he was
warned that the hospital was being used for fraud. Testifying
from a contemporaneous file memorandum, Taylor recalled
that he discussed the fraud with defendant and Lynch.
Defendant indicated that he was aware of it. Although the
admissions stopped for a few months, they soon resumed.

While the insurance fraud investigation moved
forward, the Tennessee Bureau of Investigation began looking
into possible over billing by defendant in an attempt to
defraud the Medicare and Medicaid programs. Testimony
during trial indicated that his goal was to see as many patients
and perform as many tests as the government would pay for.
To that end, he used a three-minute egg timer to pace himself,
and posed special challenges to staff. During “EKG month,”
for instance, they would be rewarded if they exceeded the

App. 5

number of EKGs performed during the same month the year
before.

A doctor who worked briefly for defendant was told
by him that he must test patients every time they walk in the
door. As a result of this policy, tests were often scheduled
before the doctor even saw the patient.

In short, the testimony at trial from former employees,
including doctors, nurses, and staff about unnecessary testing
and dubious billing was overwhelming. Defendant does not
dispute this but rather argues that an avalanche of
inadmissible evidence unfairly prejudiced his defense.

Defendant was charged with numerous counts of mail
fraud in violation of 18 U.S.C. § 1341, as well as criminal and
civil violations of the Racketeer Influenced and Corrupt
Organizations Act (“RICO”). 18 U.S.C. §§ 1961-68. After
a lengthy trial, a jury convicted him on all counts.

Il.
I. Brady Material

It is well-established that “the suppression by the

prosecution of evidence favorable to an accused upon request

violates due process where the evidence is material either to
guilt or to punishment, irrespective of the good faith or bad
faith of the prosecution.” Brady v. Maryland, 373 U.S. 83, 87
(1963). Favorable evidence is material, and constitutional
error results from its suppression by the government, if there
is a reasonable probability that, had the evidence been

i. App. 6

disclosed to the defense, the result of the proceeding would
have been different. United States v. Bagley, 473 U.S. 667,
682 (1985). This does not require demonstration by a
preponderance that disclosure would have resulted in an
acquittal; rather, a reasonable probability of a different result
is shown when the government’s suppression of the favorable
evidence undermines confident in the outcome of the trial.
Kyles v. Whitley, 115 S.Ct. 1555, 1566 (1995).

Because, as a practical matter, implementation of the
Brady rule contemplates that the government will enjoy a
measure of discretion in determining whether evidence in its
possession is material, it is burdened with a corresponding
duty to evaluate potential Brady material in a manner that will
result in a fair trial. It is the prosecution’s duty, after all, to
seek a just verdict, not a conviction. See Berger v. United
States, 295 U.S. 78, 88 (1935). It alone knows what evidence
remains undisclosed and therefore it must be assigned the
primary responsibility of gauging whether it constitutes
evidence favorable to the accused and is therefore
discoverable. Whitley, 115 S.Ct. at 1568.

In the case before us, counsel for defendant sought
access to pretrial statements made by participants in the fraud
scheme. Among the statements in the government’s
possession were summaries of the three interviews of Russell
Ramsey. Because the government took the position that these
statements were not exculpatory, defense counsel asked the

|

App. 7

trial court to inspect the statements in camera prior to cross-
examination of the witness and make an independent
determination whether any of the material should be provided
to the defense.

After the direct examination of Russell Ramsey, the
trial court reviewed the interview summaries and concluded
that “the essence of most of these exculpatory matters have
been hit by Mr. Ramsey.” However, the court went on to
mention that the summaries indicated that Ramsey lied to the
doctor about the injuries of the people he brought to the
hospital; that he insisted that there was no predetermined
agreement between himself and defendant; and that he would
tip the women in defendant’s office $100 to fill in insurance
forms that were later signed by defendant. Although defense
counsel attempted to use the information provided by the
district court to cross-examine Ramsey, he contends that the
timing and nature of the disclosure compromised his ability
to cross-examine the witness effectively.

This court reviews de novo the issue of whether
evidence withheld by the prosecution constituted Brady
material. United States v. Phillip, 948 F.2d 241, 250 (6th Cir.
1991). Having had the opportunity to review the three
interview summaries at length, a privilege that the
government’s handling of this material denied to the district
court, we conclude that the memoranda contain exculpatory
material that should have been disclosed to the defense prior

App. 8

to trial. The following statements culled from the interviews
provide a non-exhaustive list of Brady material:
“Russell stood by his original claim that he
went in and lied to the doctor about the
injuries of the people he brought there. He
insisted there was no_ predetermined
agreement between he [sic] and the doctors.”
“{Inspector] Lanny [Miller] asked Russell
why he felt he needed to protect the doctors.
Russell responded that he wouldn’t.”
“Russell was asked if he’d ever told anyone
that he had an agreement with the doctors
about the scheme. He stated ‘no, that he’d
always led everyone to believe he was in
control of the situation.’”
“He said that on occasion, he would ask to be
admitted to the hospital, but that he never
talked to the doctors about actually faking the
accidents.”
“He never gave the doctors bribes -- only paid
the bill.”
In light of these statements and others not cited, the
government’s contention that the interview summaries do not
contain exculpatory material is patently unsupportable.
Moreover, its position that Russell Ramsey’s trial testimony
was consistent with these statements is likewise incorrect.

all

App. 9

One instance will suffice to illustrate this point. As noted
above, Ramsey stated before trial that he would not protect
the doctors. That hardly can be reconciled with his assertion
during trial that “I was kind of protecting him [defendant].”

The prosecution, then, was obliged to release the
exculpatory portions of the interview summaries to defendant.
In failing to do so, it improperly failed to carry out its duty to
evaluate the exculpatory nature of the statements. Surely, the
prosecution’s affirmative duty under Brady to disclose
evidence favorable to a defendant includes the affirmative
duty to evaluate whether the evidence is favorable to a
defendant; the prosecution cannot avoid the former duty by
defaulting on the latter and delegating it in every instance to
a trial judge. While it may be proper to seek the intervention
of the trial court where the material is arguably non-
exculpatory, that certainly was not the situation with these
interview summaries. Here, the trial judge effectively
evaluated the materials. However, since any last-minute
evaluation by the trial court runs the risk of not providing the
defense with an opportunity to prepare an adequate cross-
examination, which in turn may compromise the overall
fairness of the trial, it is all the more imperative that the
government not shirk its duty to make good-faith evaluations.

Furthermore, non-disclosure of Brady material places
an onerous burden on an appellate court. We must answer the
question posed by Whitley: Did the absence of the exculpatory

App. 10

material have the cumulative effect of depriving defendant of
a verdict worthy of confidence? Whitley, 115 S.Ct. at 1566-
67. In the context of a lengthy trial such as the one now
before us, resolution of this issue represents a difficult and
time-consuming task, requiring us to review the record of the
entire trial in order to determine the effect of non-disclosure.

We have done so and conclude that, although the
prosecution should have provided defense counsel with
interview summaries, their non-disclosure does not require
reversal. The most telling exculpatory material was revealed
to the defense by the trial judge, and it was of a nature that it
could be effectively exploited by cross-examination if the
defense cared to utilize it. Evidence of guilt, both direct and
circumstantial, was overwhelming. While we disagree with
the government’s characterization of Russell Ramsey’s
testimony as “relatively minor,” we do not believe that the
verdict in any way hinged upon it. Furthermore, much of his
testimony, which was clearly damaging to defendant, was
consistent throughout. Thus, while the exculpatory material
could have been used to impeach Ramsey, it would not have
enabled defense counsel to negate entirely the damaging
nature of his testimony. Given these considerations, our
confidence in the verdict remains intact.
2. Evidentiary Issues

Over the objection of defense counsel, the trial court
permitted the government to introduce evidence that the

App. 11

insurance fraud was much greater than that actually charged;
according to this testimony, which was admitted pursuant to
Fed. R. Evid. 404(b),? as many as 170 individuals took part in
the fraud. In its motion in limine, the government contended
that this evidence was admissible on the ground that it tends
to show a common scheme and to prove defendant’s
knowledge of the fraud:

It is beyond challenge that the
Kentucky people were patients of Dr. Hale
and Dr. Lynch and that the Doctors placed
them in the hospital. The sole issue for jury
determination is what was Dr. Hale’s state of
mind when he admitted these people. To
borrow a phrase: “What did he know, and
when did he know it?”

In this context it is easy to see that
anything which imputes to Dr. Hale
knowledge of the fraud, or makes his
knowledge more probable, is probative and

3Evidence of other crimes, wrongs, or acts is not admissible to
prove the character of a person in order to show action in conformity
therewith. It may, however, be admissible for other purposes, such as
proof of motive, opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident, provided that upon request by
the accused, the prosecution in a criminal case, shall provide reasonable
notice in advance of trial, or during trial if the court excuses pretrial notice
on good cause shown, of the general nature of any such evidence it
intends to introduce at trial.” Fed. R. Evid. 404(b). Y

App. 12

=

admissible. . . . To the extent that Dr. Hale

takes the position that he could not see this

forty person Kentucky scam being perpetrated

through his office because it was not that large

in comparison to his overall practice, then the

existence of a 170 person identical scam

would be admissible to refute his defense.
Defendant contended that such testimony was overly
prejudicial, consisted of inadmissible hearsay, and was
improper opinion testimony.

In United States v. Feinman, 930 F.2d 495 (6th Cir.
1991), this court set out the following guidelines for
reviewing Rule 404(b) issues:

A trial court must employ a two-step analysis

in determining the admissibility of evidence

offered under Fed. R. Evid. 404(b). First, the

trial court must ascertain whether the

proffered evidence is relevant and admissible

for a proper purpose. To be relevant, the

evidence must relate to a matter which is “in

issue,’ and must deal with conduct

substantially similar and reasonably near in

time to the offenses for which the defendant is

being tried. To determine whether the

proffered evidence is admissible for a proper —

purpose, the trial court must decide, whether

eer eee

App. 13

that evidence is probative of a material issue

other than character.

Finally, the court must determine
whether the probative value of the evidence is
“substantially outweighed by the danger of
unfair prejudice.” The district court has broad
discretion in balancing probative value against
potential prejudicial impact. We review a
district judge’s balancing of prejudicial impact
and probative value under Fed. R. Evid.

404(b) under an abuse of discretion standard.

Id. at 499 (citations omitted).

Insurance investigator Tom Isbell testified about his
work uncovering fraud in Tennessee, which defendant
contends violates Rule 602 of the Federal Rules of Evidence:
“A witness may not testify to a matter unless evidence is
introduced sufficient to support a finding that the witness has
personal knowledge of the matter. Among other things, Isbell
mentioned investigating sixty-eight suspicious claims
involving soft tissue injuries. Nearly all of them were
patients of either Dr. Lynch or defendant. He also described
a conversation that he had with defendant in 1991 concerning
suspected insurance fraud.

Inspector Lanny Miller of the Postal Service also
testified regarding the “larger scam.” Like Isbell, he used
charts summarizing the various participants in the fraud to

App. 14

help illustrate his testimony. In our view, the testimony of
both Isbell and Miller is admissible. Contrary to the position
taken by defendant, each man discussed a subject of which he
had intimate personal knowledge, to wit, his own
investigation of fraud.

The testimony introduced by the government relating
to the alleged abuse of the Medicare and Medicaid programs
was supported in large part by administrators and
investigators who testified about defendant’s administrative
history with the programs.

According to witness Yvonne Wood, who investigated
fraud in the Medicaid program, the Medicaid Bureau could
track suspected “over utilization” by comparing doctors.
When it determined that a claimed procedure was not
medically necessary, it would send the doctor a “recoupment”
letter. She indicated that defendant had received such letters,
which she characterized as a relatively rare event.

Another witness, Kay Hogan, indicated that defendant
fell statistically into the “top 1%” of doctors with the most
aberrant history of Medicare claims. Similar testimony culled
from investigations and statistical models was admitted from
other witnesses as well.

Defendant argues that all of this testimony was
improper, at least in part, as “scientific” evidence introduced
by lay witnesses and it violated the rule against hearsay. He
also contends that it was overly prejudicial.

App. 15

However, at trial defense counsel did not object to
either lay witness testimony or to hearsay. Consequently, we
review for plain error. Fed. R. Crim. P. 52(b). Neither issue
remotely approaches the level of plain error required for
reversal. See United States v. Olano, 507 U.S. 725 (1993)
(explaining the application of Rule 52(b)).

Under Feinman, the trial court retains broad discretion
when balancing the potential prejudice of proffered testimony
against its probative value. 930 F.2d at 499. In this case, the
fact that the primary defense theory was based upon
defendant’s alleged ignorance of the fraud convinces us that
the district court did not abuse its discretion in ruling that the
evidence relating to both the abuse of the Medicare and
Medicaid programs and the actual extent of the insurance
fraud were relevant and not unfairly prejudicial.

3. Use of Grand Jury Testimony

This circuit has held that as a general rule testimony
given by a grand jury witness suspected of wrongdoing may
be used against him in a later prosecution for a substantive
criminal offense. United States v. Slone, 933 F.2d 595, 601
(6th Cir. 1987). Such statements are not considered hearsay.
Id. (citing Fed. R. Evid. 801(d)(2)).

Nonetheless, defendant contends that S/one does not
permit introduction of lengthy questions posed to him during
grand jury proceedings because they represent statements
made by the prosecutor, not by the defendant. We find no

= Ae 5

| eT

App. 16

support for this position. Rather, the questions were
necessary to put defendant’s responses in context and their
introduction during trial was proper.
4. RICO Pattern Requirement

RICO requires a pattern of racketeering activity,
defined as

at least two acts of racketeering activity, one

of which occurred after the effective date of

this chapter and the last of which occurred

within ten years . . . after the commission of a

prior act of racketeering activity.
18 U.S.C. § 1961(5). The Supreme Court requires the
criminal conduct to be connected and related:

In normal usage, the word “pattern” here

would be taken to require more than just a

multiplicity of racketeering predicates. A

“pattern” is an “arrangement or order of things

or activity,” and the mere fact that there are a

number of predicates is no guarantee that they

fall into any arrangement or order. It is not

the number of predicates but the relationship

that they bear to each other or to some

external organizing principle that renders

them “ordered” or “arranged.”

W
h
Tl seeensinieienneniiiieeaenmael

App. 17

RICO’s legislative history reveals Congress’
intent that to prove a pattern of racketeering
activity a plaintiff or prosecutor must show
that the racketeering predicates are related,
and that they amount to or pose a threat of
continued criminal activity.

What a plaintiff or prosecutor must prove is
continuity of racketeering activity, or its
threats, simpliciter. This may be done in a
variety of ways, thus making it difficult to
formulate in the abstract any general test for
continuity.
H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229,
238-41 (1989) (citations omitted). Defendant focuses on the
“relatedness” requirement, citing Vild v. Visconsi, 956 F.2d
560 (6th Cir. 1992), for the proposition that two separate
schemes do not qualify. The Vild court looked to H.J., noting
that “[t]he plaintiff may satisfy the relationship requirement
if the predicate acts alleged ‘have the same or similar
purposes, results, participants, victims, or methods of
commission, or otherwise are interrelated by distinguishing
characteristics and are not isolated events.” Jd. at 566 (citing
HJ).
Even if we assume arguendo that the alleged
Medicare and Medicaid abuse was unrelated to the Kentucky

App. 18

insurance fraud, there were many related predicate acts
involved in the insurance fraud alone. See Dana Corp. v.
Blue Cross & Blue Shield, 900 F.2d 882, 886-87 (6th Cir.
1990) (single scheme containing repetitive illegal conduct
satisfies relatedness requirement). This is enough to satisfy
the RICO relatedness requirement.

5. Jury Instruction

Finally, defendant argues that the district court erred
in giving a jury instruction that included the language “a
scheme to deprive another . . . of the intangible right to honest
services by false or fraudulent pretenses, representations, or
promises.”

Prior to November 18, 1988, such a charge was
impermissible. McNally v. United States, 483 U.S. 350
(1987). In an attempt to address this situation, Congress
enacted 18 U.S.C. § 1346, which reads: “For the purposes of
this chapter, the term ‘scheme or artifice to defraud’ includes
a scheme or artifice to deprive another of the intangible right
of honest services. This statute is not retroactive. United
States v. Davis, 873 F.2d 900, 902 (6th Cir. 1989). Thus,
defendant argues that the district court improperly allowed the
jury to consider a theory of criminal liability that was invalid
when some of his criminal conduct occurred.

The government concedes that the “honest services”
portion of the instruction was given in error with respect to
the wrongful activity committed by defendant before

- | .

App. 19

November 1988. Because it did not premise its case upon an
“honest services” theory, but rather upon the old-fashioned
motive of financial gain, the government argues that the error
does not require reversal.

Defense counsel neglected to object to the instruction
and we therefore review it for plain error. Fed. R. Crim. P.
52(b). Taken in the context of the prosecution’s theory of
guilt, we conclude that defendant has not, as he is required to
do, made a “specific showing of prejudice to satisfy the
‘affecting substantial rights’ prong of Rule 52(b).” See
United States v. Olano, 507 U.S. at 735 (1993).

Il.
For the foregoing reasons, the conviction and sentence

of defendant are affirmed.

a ne em 3 pr neem

APPENDIX B

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

+

ORDER
DENYING PETITION FOR REHEARING EN BANC

Filed April 3, 1997

+

Pages 20 thru 21

te
aves
no eae

App. 20

No. 95-5915

UNITED STATES COURT OF APPEALS ~
FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ORDER

DAN E. HALE, D.O.,

)
)
)
)
)
)
)
) Filed April 3, 1997)
)

)

Defendant-Appellant.

BEFORE: NORRIS, SUHRHEINRICH, and
BATCHELDER, Circuit Judges.

The court having received a petition for rehearing en
banc, and the petition having been circulated not only to the
original panel members but also to all other active judges of
this court, and no judge of this court having requested a vote

on the suggestion for rehearing en banc, the petition for

rehearing has been referred to the original panel.

App. 21

The panel has further reviewed the petition for
rehearing and concludes that the issues raised in the petition
were fully considered upon the original submission and
decision of the case. Accordingly, the petition is denied.

ENTERED BY ORDER OF THE COURT

/s/ _Leonard Green

Leonard Green, Clerk

APPENDIX C

+

U.S. Constitution, Amendment V
18 U.S.C. § 1961(5)
18 U.S.C. § 1962(c)
18 U.S.C. § 3500(b)

+

Pages 22 thru 23

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“ . 2

-

App. 22

United States Constitution, Amendment V.

Criminal actions - Provisions concerning - Due
process of law and just compensation clauses. — No person
shall be held to answer for a capital, or otherwise infamous
crime, unless on a presentment or indictment of a Grand Jury,
except in cases arising in the land or naval forces, or in the
Militia, when in actual service in time of War or public
danger; nor shall any person be subject for the same offence
to be twice put in jeopardy of life or limb, nor shall be
compelled in any criminal case to be a witness against
himself, nor be deprived of life, liberty, or property, without
due process of law; nor shall private property be taken for
public use without just compensation.

ee eeeeee et

18 United States Code § 1961(5)

“pattern of racketeering activity” requires at least two
acts of racketeering activity, one of which occurred after the
effective date of this chapter and the last of which occurred
within ten years (excluding any period of imprisonment) after
the commission of a prior act of racketeering activity.

:
i
|
/
!
i

App. 23

18 United States Code § 1962(c)

It shall be unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of
which affect, interstate or foreign commerce, to conduct or
participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering activity
or collection of unlawful debt.

e*ee+¢42¢4¢444%

18 United States Code § 3500(b)

Demands for production of statements and reports
of witnesses

(b) After a witness called by the United States has
testified on direct examination, the court shall, on motion of
the defendant, order the United States to produce any
statement (as hereinafter defined) of the witness~ in the
possession of the United States which relates to the subject
matter as to which the witness has testified. If the entire
contents of any such statement relate to the subject matter of
the testimony of the witness, the court shall order it to be
delivered directly to the defendant for his examination and
use.

=

APPENDIX D

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

+
EXCERPTED RESPONSE TO PETITION
FOR REHEARING AND SUGGESTION
FOR REHEARING EN BANC

Filed April 19, 1997

+

Pages 24 thru 25

App. 24

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
CASE NO. 95-5915

UNITED STATES OF AMERICA
Plaintiff-Appellee
vs.
~ DAN E. HALE

Defendant-Appellant

RESPONSE TO PETITION FOR REHEARING AND
SUGGESTION FOR REHEARING EN BANC

(EXCERPT FROM PAGE 7)

Reasonable people can disagree as to whether more or
less of the notes should have been disclosed. But to call what
occurred here “cheating,” deserving of the extreme remedy
suggested, is preposterous. If the undersigned had any
inclination to cheat or suborn perjury, there would not have
been any notes to review.

App. 25

There is a distinct risk of appearing recalcitrant by
continuing to argue the Brady issue itself. And, the
undersigned recognizes that the better course of action would
have been to give over redacted summaries to avoid these
issues.‘

=

‘These notes contained numerous investigative leads about
lawyers, insurance agent, etc. that could not be disclosed while the
investigation was ongoing. Redacting names would not suffice, because
the identity could be deciphered from the context. Redacting the entire
subject would have rendered the interviews confusing. (The Court must
understand we are not talking about redacting just Ramsey’s three
summaries. There were 13 scammer witnesses whose summaries would
have to be redacted). Having the Court review the summaries for
exculpatory information, which this-Court has repeatedly encouraged,
seemed to be the proper course of action. In the future, to avoid this kind
of issue, either no notes will be taken (still revealing oral Brady, but at
least avoiding unnecessary context and semantics disputes), or redaction
will have to be done.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_1023%3A1. Public record. Not legal advice.