Petition for Writ of Certiorari — Akin v. United States

oreme Court, U.S.

-~IleEeD

01 261 AUG 1 1 2001

OFFICE OF THE CLERK

No. 0l- .

IN THE

Supreme Court of the United States

CHARLES PHILIP AKIN,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

STEVEN JAY ROZAN

KUNIANSKY, KARAHAN & ROZAN

Attorneys for Petitioner

5051 Westheimer

Suite 700

Houston, Texas 77056

(713) 627-3608

168451 g

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

STEN EIB LARE ERE IRI EO R SONE PR eH

i

QUESTIONS PRESENTED

1. Whether the retrospective application of a Social

Security Administrative ruling interpreting vague definitions

in the Social Security Act effective September 18, 1996 can

be used as a basis for a criminal prosecution which was

commenced on May 7, 1997 for alleged criminal conduct

between November 1991 through July, 1993 constitutes an

clear violation of the Due Process Clause of the Fifth

Amendment to the Constitution of the United States.

2. Whether Petitioner was unconstitutionally sentenced

under an increased offense level under the Federal Sentencing

Guidelines based upon facts that were not included in the

indictment nor proven at trial beyond a reasonable doubt.

il

TABLE OF CONTENTS

Page

(Jecetions Presesied ns oo i

Table of Cee: 065 i se li

Table of Cited Authorities ...........ccccccecss iv

Table of Appem@ie@ oi cies cesses stweens ix

Opmnon Belew |... i563 Sine oe l

Statement.of Jurisdiction «2c... ...ccccascceces l

Constitutional Provisions, Statute and Regulation

MvOIVGE . .... s 605056 4ke eee |

Statement of the COO0. 3.4 6ccsccen sn eas 2

A. The Proceedings Below .........0.se00: 2

B. ‘The eleva PO acces ccsaaseceseans 2

Reasons for Granting the Writ ................. 8

A. In affirming the Petitioner’s conviction, the

United States Court of Appeals failed to

address and rule upon an important

substantive constitutional question- whether

the retrospective application of an

administrative ruling which imposed criminal

liability on Petitioner is a clear violation of

the Due Process Clause of the Fifth

iil

Contents

Page

Amendment to the Constitution by

criminalizing sanctioned conduct prior to the

administrative ruling. ...............+-- 8

B. The Petitioner was unconstitutionally

sentenced under an increased Offense Level

of 29, based upon facts that were not included

in the indictment nor proven at trial beyond

a reasonable doubt. .............--e0-- 18

ee nee e eee 8 as ee ess ee 21

iv

TABLE OF CITED AUTHORITIES

Page

Cases:

Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct.

RPE Fe bcrr ec dekeees uae eer 18, 19, 20, 21

Babbitt v. Sweet Home Chapter of Communities For

A Great Oregon, 515 U.S. 687, 115 S. Ct. 2407

GREE coo Sak oes CeO Reds hho oes ch deenGee 8

Blue v. United States, 121 S. Ct. 32 (2000) ....... 18

Bowen v. Georgetown University Hospital, 109

Re re ere nya ee wae ee 10

Brown v. United States, 2000 U.S. LEXIS 6603 18

Burton v. United States, 121 S. Ct..32 (2000) ..... 18

Clinton v. United States, 2000 U.S. LEXIS 6605 .. 18

Curry v. United States, 121 S. Ct. 376 (2000) .... 18

Dunn v. United States, 442 U.S. 100 (1979) ...... 17

Georgia Pacific Corp. v. OSHRC, 25 F.3d 999

GRMN Sik Ons ca bane du duns Ceekwew ee eede 11

Gibson v. United States; 121 S. Ct. 31 (2000) .... 18

Grayned v. City of Rockford, 408 U.S. 104 (1972) .. 13, 16

ee ee ee

Cited Authorities

Hester v. United States, 121 S. Ct. 336 (2000) ....

Hughes v. United States, 121 S. Ct. 423 (2000) ...

Humphrey v. United States, 121 S. Ct. 478 (2000)

In re OrthoConcepts v. MetraHealth, Dkt. No. 000-

OB ate x wie cade ds tirnake eee ee

Knight v. United States, 121 S. Ct. 478 (2000) ....

Kolender v. Lawson, 461 U.S. 352 (1983) .......

McMillan v. Pennsylvania, 477 U.S. 79 (1986) ...

Meais v. United States, 121 S. Ct. 559 (2000) ....

Potts v. United States, 121 S. Ct. 559 (2000) .....

Smith v. Goguen, 415 U.S. 566 (1974) ..........

Smith v. United States, 121 S. Ct. 336 (2000) .....

Travis Randle v. United States, 2001 WL 81170 ..

Twitty v. United States, 121 S. Ct. 559 (2000) ....

United States v. Ferguson, 211 F.3d 878 (Sth Cir.

2000)

Page

18

18

18

18

vi

Cited Authorities

Page

United States v. Garber, 607 F.2d 92 (Sth Cir. 1979)

.600b0 6065000000 bees OReeee ee aes 15,17

United States v. Gaudin, 515 U.S. 506 (1995) ... 20

United States v. Gonzalez, _ F.3d ___, 2001 WL

DASOED écdct dca dceckecaseesse lesen 19

United States v. Howard, 220 F.3d 645 (Sth Cir.

BOOED. cnacdnncekeuctimasaneaa ees 12

United States v. Keller, 14 F.3d 1051 (Sth Cir. 1994)

OTT er ere oe oe eee 16 ;

United States v. Lanier, 520 U.S. 259 (1997) ..... 14 |

|

United States v. Marek, 238 F.3d 310 (Sth Cir.

FORUMY 2, DOGE) occccadccccacesencesosses 14 |

.

United States v. Meshack, 225 F.3d 556 (Sth Cir. .

WOO. vac cosaahetnssieas eee 20 |

United States v. Phillips, 600 F.2d 535 (Sth Cir.

StS) vwivdeudccvesbeneereuseviwieee 16

United States v. Reliford, 210 F.3d 285 (Sth Cir.

BOOED see ceindéacucdesensece nae 12

WTTTITTTiT Tri ty ee ee ee 11

vil

Cited Authorities

Page

Warder v. Shalala, (1997 WL 263733, 1997 U.S.

ee, BG TED 6 cccosdancvesesenebeeseses 9

Warder v. Shalala, 149 F.3d 73 (decided July 27,

SED sicscacandaaceesddésudlonouseueanaas 10

Whitt v. United States, 121 S. Ct. 423 (2000) ..... 18

Wims v. United States, 121 S. Ct. 32 (2000) ...... 18

United States Constitution:

Fifth Amendment ..............-.-. i, 1, 7, 8, 13, 15, 20

rr ee on. a Wekneeeebenenedeas 1,20

Statutes:

Ell Edt > PP rrrrrr rrr Try rrr ry Perr? 2

ath fo > | are rrr rere pakare 2

Nas OEE 2600 essndenseanwenieseusecens 2

gtk Fee) rrr rr res rere rrr rer 2

IS U.S.C. 8 ISSEIAMEMANME) 224. ccccacccscess 2

SNe BO oc ctnnscessasdausans 1

vill

Cited Authorities

ee ee i ED hse a vabewee Wheeeeiuness

ee Se OS RUPE avec taccnnnneiawnsa

oe ee ee Perera eS eer rr ye

ee ED Fob pabdedeccwedess si ebwa

cE DF SPP ee rererery rr rey yrrri er. or

Rule:

Pe Oa bacdoekn endekcnssaabuawers

Other Authorities:

SE CIR: OB SIG FIED cc dscccicccvcsscccsses

Se Ca OS SD 2. os obs cctacdvevsrveewes

BROCE CAI ois ook vs chien ccss

Page

19

12

ix ~

TABLE OF APPENDICES

Appendix A — Per Curiam Opinion Of The United

States Court Of Appeals For The Fifth Circuit

Dated And Filed May 16, 2001 ...... eee

Appendix B — Decision Of The Social Security

Administration Office Of Hearings And Appeals

In Orthoconcepts v. Metrahealth Dated January

oe, eeerrrre POPP eH ee Pee ree Ce rere

Appendix C — Ruling No. 96-1 Of The Department

Of Health And Human Services, Health Care

Financing Administration Dated September 18,

PE icteric a sae Rea ak we wee eee eR es

Appendix D — Excerpts From Memorandum And

Recommendation Of United States Magistrate

Judge Of The United States District Court For The

Western District Of Texas, San Antonio Division

Dated And Filed May 17, 1999 ..............

Appendix E — Constitutional Provisions, Statute

And Regulations Involved ..................

Page

la

]

Petitioner prays that a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the Fifth

Circuit entered in this case on May 16, 2001 affirming

Petitioner’s conviction and sentence.

OPINION BELOW

The opinion of the United States Court of Appeals for the

Fifth Circuit is unreported, but is reproduced at Appendix A.

STATEMENT OF JURISDICTION

The United States Court of Appeals for the Fifth Circuit

rendered its unpublished opinion on May 16, 2001 affirming

the judgment and sentence entered on February 11, 2000 in the

United States District Court for the Western District of Texas,

San Antonio Division, Hon. H. F. Garcia presiding.

This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS, STATUTE

AND REGULATION INVOLVED —

This case involves the Fifth and Sixth Amendmeats to the

United States Constitution, as well as 42 U.S.C. § 1° 95x(5)(9);

42 C.F.R. § 410.100(g)(1); and 42 C.F.R. § 410.36(a)(3).

The pertinent portions of these can be found reproduced at

Appendix E.

2

STATEMENT OF THE CASE

A. The Proceedings Below

Petitioner, Charles Philip Akin and two co-defendants, were

charged on May 7, 1997 in an eighty-eight count indictment in

the Western District of Texas, San Antonio Division, with a

general conspiracy to commit fraud (18 U.S.C. § 371) multiple

counts of mail fraud (18 U.S.C. §§ 1341 & 2) money laundering

(18 U.S.C. § 1956(a)(1)(A)(i)) and submitting false claims

(18 U.S.C. § 287).

On June 14, 1999, trial commenced, and on June 29,

1999 the jury returned verdicts of guilty on all counts.

On February 24, 2000 Akin was sentenced to 87 months

imprisonment to run concurrently on all counts. In addition,

he was ordered to pay a special assessment totaling $3,650

and to make restitution of $1,108,775.90 to Medicare/

Medicaid. Petitioner filed a pre-trial Motion to Dismiss the

indictment. After an evidentiary hearing the Magistrate Judge

recommended denial of the Motion to Dismiss. Akin filed

objections to the Report and Recommendation, which the

trial court impliedly overruled when trial began.

On June 28, 2000, Petitioner self-surrendered without

incident to the United States Marshal’s Service. On July 17,

2000, he was transferred to FCI Bastrop in Bastrop, Texas,

where he remains detained at the Federal Prison Camp.

B. The Relevant Facts

Charles Philip Akin is a sixty-six year old dentist from

Austin, Texas, who was engaged in a medical supply business

from 1991 to 1993. He invested $257,000 in a corporation,

a

3

BioTex, Inc., which was selling a body support product, for

which the corporation had been receiving reimbursement

from Medicare. Akin formed a corporation, Health Care of

Texas, Inc., for the purpose of selling the product to nursing

homes. Co-defendants Henderson and Gurasich sold the same

product through an Austin-based business called Continental

Health. Between February 1992 and June 1993 Akin~-

submitted claims to the Medicare regional carrier, Blue Cross

& Blue Shield of Texas (hereinafter “Blue Cross’’)' for body

or lumbar supports used by nursing home residents confined

to wheelchairs. The claims were for “orthotic devices,”

reimbursable by federal regulation, which describes them as

“orthopedic devices that support or align movable parts of

the body, prevent or correct deformities, or improve

functioning.” 42 C.F.R. § 410.100(g)(1).? Akin’s device,

which fitted into the wheelchair, had adjustable sides and

front pads, rigid side and base inserts, was held by adjustable

clasps and straps and used pads. It kept patients upright,

aligning their spine and hips. Defense witness, Dr. David

Abbott, who signed most of the certificates of medical

necessity which accompanied Akin’s claims, testified that

wheelchair bound patients who could not maintain normal

posture developed ulcers and other serious physical problems

if not properly positioned in their chairs.

1. Blue Cross later became Texas/Trailblazer Health

Enterprises.

2. “Durable medical equipment” is paid for under Part B of

Medicare if it is medically necessary equipment used for treatment

of decubitus ulcers, and it is ordered in writing by the beneficiary’s

physician, who will be supervising its use in the course of treatment.

42 C.F.R. § 410.38(d).

4

Akin submitted his claims to Blue Cross for a “lumbar-

sacral support system,” accompanied by a certificate of

medical necessity which stated that the condition for which

the device was needed was “patient is wheelchair confined

with inability to maintain proper body alignment when

sitting.” Typical medical diagnoses on the certificates were

“dementia,” “Alzheimers,” or “osteoarthritis.” Akin’s claims

for reimbursement were made under Code L0430, which

appears under the heading “Orthotics” in a Medicare Part B

handbook on durable medical equipment for doctors

and suppliers. Code L0430 is defined in the handbook as

“TLSO, anterior-posterio-lateral control (body jacket), with

interface material, custom fitted.’ A device similar to that

sold by Akin’s company was marketed to the Veterans

Administration by Akin’s former associate, Bowman, who

testified as a government witness. Other similar devices were

routinely paid by Medicare carriers in other parts of the

country.

Prior to Akin’s investment in BioTex, Inc., the Health

Care Finance Administration (HCFA) issued a letter stating

that “custom designed orthotic seating and positioning

systems ... may be covered under Part B of the Medicare

program.” No official statement of the Department of Health

and Human Services or HCFA regarding “orthotics” or “body

jackets” was issued after that date until a “national policy”

was publicly stated in September 1996, three years and three

months after the last claim submitted by Akin which the

government alleges was “fraudulent.” This national policy

3. “TLSO” makes reference to “Thoracic Lumbar Sacral

Orthotic.” 42 U.S.C. § 1395x(n) provides that Medicare Part B precludes

coverage of durable medical equipment used in a hospital (42 U.S.C.

§ 1395(e)(1)) or a skilled nursing facility (42 U.S.C. § 1395i-3(a)(i)).

OE Vertis weit RED

eT eT

5

stated that those terms applied only to rigid devices that tightly

fit and immobilize the body, language not included previously

in any regulation, directive, or guideline. This policy was issued

after an Administrative Law Judge ruled on January 3, 1996

that equipment similar to Akin’s which was used for wheelchair

seating and body positioning constituted a reimbursable brace

or orthotic. This holding was affirmed by a Medicare carrier

appeals board. On February 9, 1996 a Medicare carrier hearing

officer reached the same conclusion. These decisions were the

first definitive statements of the law as to the interpretation of

devices similar to Akin’s.

The government contended that Akin committed fraud,

however, by falsely claiming Between February 1992 and June

1993 that his devices were reimbursable “orthotic devices,”

billed under Code L0430, when they were in reality “non-

orthotic medical equipment.” The government contended that

Akin knew that this was a false designation because in August

1992, after Akin had submitted and received payment for his

devices from Blue Cross, the carrier published a newsletter in

which it stated that Medicare had identified a product being

billed under Code L0430 which “consist[ed] of a seat and back,

is constructed of foam rubber covered by vinyl and held together

with straps and Velcro.” The newsletter claimed that Medicare

had determined that the product did not meet the code definition

in the handbook because it “represents a safety and postural

device used in wheelchairs that is not covered by the Medicare

program.” Akin discussed this with the manufacturer of his

product, who was satisfied that it did not describe the product

he was making for Akin to distribute. Akin’s device provided

full body support, has adjustable sides and front pads, is made

with rigid side and base inserts and is held by adjustable clasps

and straps rather than Velcro. Subsequently, Blue Cross

continued to pay Akin’s claims until June 1993.

ee

6

In late September 1993, Blue Cross adopted a “policy”

stating that equipment claimed under Code L0430 must,

among other things, “be used to immobilize the specified

areas of the spine,” and may “not [be] specifically designed

for patients in wheelchairs.” In 1994, after the last date of

fraudulent billing alleged by the government, the Department

of Health and Human Services conducted a study which

recommended that Code L0430 be used only for rigid plastic

devices not used in wheelchairs. The study acknowledged

that Code L0430 provided only a “vague” and “general

description,” and that it contained loopholes which allowed

suppliers to claim other devices as meeting the definition.

The study was based in large part on interviews with

orthotists and doctors who designed equipment which

competed with equipment of the type sold by Akin.

The government produced witnesses at trial who

rendered their opinion as to the applicability of Code L0430

to Akin’s devices and testified to varying remarks from

family members of patients. Dianne Cassen, a physical |

therapist, testified over objection that in her opinion that Akin

was using the wrong code for his billing, that his product

was durable medical equipment and that the product was

not reimbursable. Her opinion was based in part on hearsay |

testimony that “Medicare” had told her that if a product is

profitable quickly it is probably “not okay.” Conrad Bowman, |

a former marketing associate of Akin’s co-defendants who

became a competitor by selling a similar device from |

Mississippi to the Veterans Administration, testified as to )

his opinion that L-Codes require an prescription by an

orthotist (a medical specialist in orthotics). Over objection

he testified that it would be fraud to bill Akin’s device as a

“body jacket.” His testimony contrasted with the testimony

of Dr. Rodney Carry, a nursing home physician, who testified

5

that he had been a physician for twenty years, but did not

know what a “body jacket” is. He testified that the term

“orthotic” was nonspecific, applicable to multiple devices

which support a weak or injured body member. He also

testified that Petitioner’s exhibits D1 through D4 were, in

his experience and training, orthotic devices.

Petitioner argued to the Court of Appeals that the

underlying definitions of an orthotic device was void for

vagueness and was in violation of the Fifth Amendment.

The Court of Appeals gave short shrift to this argument

stating the following:

On appeal, Akin raises several points of error.

First, he contends that the indictment should have

been dismissed because the basis for those charges

was a vague and indefinite Medicare claims code,

which failed to give him fair notice of the

illegality of his conduct. . . . we conclude that the

district court did not commit reversible error with

respect to the point[s] raised by Akin.

(See Appendix A.)

8 . 3

REASONS FOR GRANTING THE WRIT

A. In affirming the Petitioner’s conviction, the United

States Court of Appeals failed to address and rule

upon an important substantive constitutional

question- whether the retrospective application of an

administrative ruling which imposed criminal

liability on Petitioner is a clear violation of the Due

Process Clause of the Fifth Amendment to the

Constitution by criminalizing sanctioned conduct

prior to the administrative ruling.

The case at bar presents an unusual and unique

constitutional question which counsel believes has not been

directly addressed by this Court in a federal criminal case.

This Court has spoken to the rule of len’ty in Babbitt v.

Sweet Home Chapter of Communities For A Great Oregon, |

515 U.S. 687, 115 S. Ct. 2407 (1995) in the context of

legislation and regulatory interpretation: |

wee

... The rule of lenity is premised on two ideas:

First, “ ‘a fair warning should be given to the

world in language that the common world will

understand, of what the law intends to do if a

certain line is passed’ ”; second “legislatures and |

not courts should define criminal activity.” [citing |

cases]. . . Even if there exists regulations whose

interpretations of statutory criminal penalties

provide such inadequate notice of potential

liability as to offend the rule of lenity .. .

Id. at 704 n.18.

7

:

:

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9

With this perspective of the rule of lenity, this Court

should view the instant controversy regarding the ambiguous

and vague definitions, which were the underlying basis for

the criminal charges brought against Akin, and which has a

long and tortuous administrative and judicial history.

The controversy over the ambiguous and vague

definitions, which were the underlying basis for the criminal

charges brought against Akin, has a long and tortuous

administrative and judicial history. Jn re OrthoConcepts v.

MetraHealth, Dkt. No. 000-45-1375 (Social Security

Administration Office of Hearings and Appeals Decision

dated January 3, 1996) the Administrative Law Judge held

that an orthotic device similar to that for which Akin is

charged with committing fraud was an orthotic device which

met the requirements for reimbursement. (See Appendix B).

Subsequently, the Department of Health and Human

Services, Health Care Financing Administration (HCFA)

issued its ruling HCFAR-96-] (See Appendix C) effective

September 18, 1996 which “provide[d] clarification and

interpretation of complex or ambiguous provisions of the

law or regulations relating to Medicare, Medicaid, Utilization

and quality Control Peer review and related matters”.

This ruling in effect determined that the orthotic device which

was similar to the device sold by Akin’s company was not

reimbursable. The HCFA ruling (HCFAR-96-1) resulted in

a civil law suit entitled Warder v. Shalala, (1997 WL 263733,

1997 U.S. Dist. Lexis 7029)* which was decided May, 1997

wherein District Judge Lasker held that the orthotic device

under the same billing code which Akin had billed was

reimbursable stating “i]t is not necessary, however to decide

4. The decision gives a full history of the underlying

controversy as to the ambiguity in the law and regulations and the

interpretation given by HCFA.

10

that the bracing systems do not satisfy the DME’ definition

in order to conclude that the government cannot use a

purported ambiguity created by the devices falling within

two coverage categories to classify them as DME.”

[Emphasis supplied] Judge Lasker held that OrthoConcepts

was entitled to reimbursement. Judge Lasker’s decision

was appealed to the United States Court of Appeals for the

First Circuit and was reported in Warder v. Shalala, 149

F.3d 73 (decided July 27, 1998). The First Circuit held in

reversing Judge Lasker’s decision that HCFAR 96-1 was

an interpretative ruling which did not need notice and

comments procedures under the Administrative Procedure

Act. Thus, the courts should give deference to the

administrative determination.® This Court denied certiorari.

119 S. Ct. 1455.

This Court in a civil context has decried the use of

retroactive curative cost-limit rule making under the

Medicare Act noting that retroactivity is not favored in the

law. Bowen v. Georgetown University Hospital, 109 S. Ct.

468 (1988). As Mr. Justice Scalia stated in his instructive

Bowen concurring opinion discussing the distinction of rule

making and adjudication “a rule is a statement that has legal

consequences only for the future”. /d. at 476. “Adjudication

deals with what the law was; rule making deals with what

the law will be”. /d. at 478 “Quite simply, a rule is an agency

statement of ‘future effect’ not ‘of future effect and/or

reasonable past effect’”. Emphasis supplied. /d. at 478.

“It is important to note that the retroactivity limitation applies

only to rule making”. /d. at 480. Thus, this Court, in the

5. DME makes reference to “durable medical equipment.”

6. The First Circuit did not reach the question of retroactivity.

ll

context of the case at bar, has impliedly given guidance that

the HCFR-96-1 ruling of September 1996 has prospective

application only and should not have been used as a basis to

criminalize prior sanctioned conduct.

It is with this tortuous administrative and judicial

background in dealing with Social Security’s vague

definitions’ of orthotic devices and durable medical

equipment that Akin became subject to criminal prosecution

on May 7, 1997.

In the District Court, Akin moved to dismiss the

indictment on the ground that the definition of orthotic

devices, which were reimbursable under the Medicare laws,

was void for vagueness. The motion was the subject of an

evidentiary hearing before the Magistrate Judge. In her

Memorandum and Recommendation, the Magistrate Judge

acknowledged that the coding for orthotic devices in the

Medicare Carrier Claims Manual (L0430) was ambiguous

before September of 1996, but recommended that the

question of whether the device which was the subject of the

indictment was an orthotic device be submitted to a

jury.* (See Appendix D). Petitioner’s objections to the

Memorandum and Recommendation were overruled by

7. The Eleventh Circuit in Georgia Pacific Corp. v. OSHRC,

25 F.3d 999, 1005 (1994) has held that where the Secretary of Labor

is unable to settle upon a single definition of a critical term or phrase

of its own regulations, the regulation is unconstitutionally vague.

8. Contrary to the U.S. Magistrate Judge’s recommendation,

the question of the ambiguity of a government regulation is a

question of law for the judge and not for the jury. United States v.

Upton, 91 F.3d 677, 683-84 (Sth Cir. 1995) The Fifth Circuit refused

to address this issue in its unpublished opinion in this case.

12

implication when the case proceeded to trial without a formal

ruling by the District Judge. The Magistrate Judge’s factual

findings are sustained on appeal unless they are clearly

erroneous, and her recommended conclusions of law are

reviewed de novo.

At the close of the government’s case-in-chief, the

Petitioner moved for a judgment of acquittal under Rule 29,

Federal Rules of Criminal Procedure, which motion was

denied. The motion was renewed at the end of all the

evidence, and again the motion was denied. Motions for

judgment of acquittal are questions of law which are

reviewable by this Court de novo. United States v. Ferguson,

211 F.3d 878 (Sth Cir. 2000); United States v. Reliford, 210

F.3d 285 (Sth Cir. 2000). Constitutional challenges

to government legislative authority are also reviewed

de novo on appeal. United States v. Howard, 220 F.3d 645

(Sth Cir. 2000). The court below declined to review Akin’s

constitutional challenge.

The undisputed evidence at the hearing and at trial

showed that at all times charged in the indictment — that is,

between June 24, 1992 and June 8, 1993 — there was no

directive, order or regulation specifically excluding the

device which was the subject of the indictment in this case

from coverage as an orthotic under Code L0430. It was not

until after Dr. Akin had submitted all the claims which were

specified in the indictment that an investigation was

conducted by the Health Care Financing Administration

(“HCFA”). The investigation resulted in a recommendation

to the Department of Health and Human Services in April

1994 that more “stringent controls” be instituted to limit

payments for orthotic “body jackets,” because the applicable

code used in billing — L0430 — provided only a “vague”

aes: Pr rer eS ee ee ee ee és

13

and “general” description that allowed Medicare suppliers

to file claims for other devices. It was not until September

1996 that a HCFA ruling stated a policy regarding the

distinction between “orthotics” and “durable medical

equipment” and defined an “orthotic device” as a “brace used

independently of other equipment.” This ruling specifically

stated that the purpose of an HCFA ruling is to “provide

clarification and interpretation of complex or ambiguous

provisions of the law or regulations. . . .” , and was the first

official statement by the Department of Health and Human

Services relating to the device for which Akin had submitted

claims almost four years earlier. In the meanwhile, other

regional Medicare carriers had ruled that devices similar to

that which was the subject of the charges against Akin, were

indeed Medicare-reimbursable orthotics, and two hearing

officers had held the same. Contrasted with these belated

rulings was the evidence submitted by Akin that prior to the

marketing of his device, the HCFA issued a letter in 1990

stating the “custom designed orthotic seating and positioning

systems ... may be covered.... under the Medicare

program”. Akin further produced evidence that in 1992 and

1993 some Medicare carriers were allowing payment for

similar devices while others were not — a clear indication

that no one individual could look at the applicable statutes

and regulations and determine what devices could properly

be submitted for coverage.

It is the most basic proposition of due process under

the Fifth Amendment to the Constitution that a person cannot

be held criminally accountable for conduct for which he has

no notice of its prohibition. Grayned v. City of Rockford,

408 U.S. 104, 108 (1972). An individual is not required to

guess or speculate about whether his conduct is forbidden

by law: a legal prohibition must be sufficiently clear that

14

ordinary persons can understand what conduct contravenes

the law. Kolender v. Lawson, 461 U.S. 352, 357 (1983).

If the terms of the law are so vague that individuals must

necessarily guess at its meaning and differ in its application,

it does not give “fair warning,” and consequently violates

the Fifth Amendment Due Process provisions. United States

v. Lanier, 520 U.S. 259, 266 (1997). If under a law applicable

to persons nationwide there is disagreement among those _

charged with execution of the law as to the appropriateness

of payment for a device, the first question to be asked is

whether the disagreement stems from ambiguity, vagueness

or indefiniteness in the law. In the case at bar, the applicable

regulations were treated variably from jurisdiction to

jurisdiction for six years, which is a clear sign of ambiguity,

vagueness and indefiniteness. It is plain from the regulations

themselves defining durable medical equipment and orthotic

devices, that the position taken by the government in the

case at bar was unduly restrictive, given the broad and

inclusive language of the definitions prior to September,

1996.°

9. The court below declined to address the rule of lenity in the

case at bar. However, in United States v. Marek, 238 F.3d 310 (Sth

Cir. February 2, 2001) the court did address this issue, even though

it found it not applicable, by stating

The rule of lenity-a rule of narrow construction rooted

in concern for individual rights, awareness that it is the

legislature and not the courts that should define criminal

activity, and belief that fair warning should be accorded

as to what conduct is criminal-applies when, but only

when, “after seizing everything from which aid can be

derived, the Court is left with an ambiguous statute”... .

The principle behind the rule of lenity is that no one

should be forced to speculate whether her conduct is

prohibited. id. at 322.

15

The Fifth Circuit has considered, and spoken on, the

question of criminal liability in the face of a dispute among

proper authorities on the meaning of the law. United States

v. Garber, 607 F.2d 92 (Sth Cir. 1979) (en banc). In that

case the defendant, who had an extremely rare blood

antibody, had sold her plasma on a contractual basis to a

; laboratory. She did not report any of the sums received on

her tax return, believing that it did not meet the definition of

income. There was no definitive court ruling on the issue

during the relevant time period, and both sides produced

expert testimony at trial to testify to opposing interpretations

of the law. The Court held that willfulness is an essential

element of tax evasion, but that “[a] tax return is not

criminally fraudulent simply because it is erroneous.”

Id. at 97. The Court said that

The unresolved nature of the law is relevant to

show that defendant may not have been aware of

a tax liability or may have simply made an error

in judgment.

Id. at 98.

In the case at bar, given the government’s admissions

of vagueness and ambiguity, the basing of a criminal

prosecution on a policy statement issued 3 to 4 years after

the conduct charged in the indictment violates the Due

Process Clause prohibitions of the Fifth Amendment.

The distinction between an orthotic device and durable

medical equipment requires expert analysis and should be

highly detailed in the regulations. Otherwise, the legislature’s

authority to determine forbidden conduct is “impermissibly

delegate[d] . . . to policemen, judges and juries for resolution

on an ad hoc, subjective basis, with attendant dangers of

16

arbitrary and discriminatory application.” Grayned v. City

of Rockford, supra at 108-09. Accord, Smith v. Goguen, 415

U.S. 566, 575 (1974). That is precisely what happened in

this case: the HHS agent and the prosecutor arbitrarily

applied their personal interpretation of the relevant

regulations and proceeded with the prosecution on the basis

of a theory, which was untested and unresolved by any

competent authority, judicial or executive at the time of the

conduct which they charged was felonious. Further, there

was no evidence that the Medicare carrier, who has no

constitutional authority to define criminal conduct, rejected

the billings submitted by Akin or his associates, nor gave

him any written notice that the specific device in issue in

this case would not be covered.

To prove intent to defraud, the government must show

that Akin intentionally deceived the Medicare carrier by

submitting claims that he knew were false. See, e.g., United

States v. Keller, 14 F.3d 1051 (Sth Cir. 1994); United States-

v. Phillips, 600 F.2d 535 (Sth Cir. 1979). Fraud is a matter

of deliberate deception. United States v. Phillips, supra at

537. An individual cannot be guilty of an intentional crime,

much less one with the particular burden of proving

fraudulent intent, on the basis of a confused, vague and

indefinite administrative ruling. While knowledge of legal

requirements is a legitimate requirement of anyone dealing

with taxpayer funds, those legal requirements should be

readily ascertainable and plain in their meaning and

application. In this case one cannot be guilty of fraudulently

billing devices fully accepted as lawful submissions in

another jurisdiction. Further, a Medicare official personally

testified for the Petitioner that in her opinion the device was

orthotics. Dr. Kaye Jewel, who was Medical Director for

Wisconsin Medicare Part B Carrier and medical officer at

17

the Health Care Financing Administration in Baltimore and

Washington, D.C., working on policy statements testified that

if there is no specific instruction about a particular device,

then “you go with what most fits the function of the code.”

She further testified that “if it meets the actual descriptors,

then it can be coded under L0430.” Also included in her

testimony was a description of the controversy among state

medical directors and within the HCFA as to whether devices

similar to Akin’s which provided lumbar and/or sacral

support were orthotics or some other form of “durable

medical equipment” not reimbursable by Medicare which

were furnished in a nursing home. “A criminal proceeding

is an inappropriate vehicle for pioneering interpretations of

... law.” United States v. Garber, supra at 100. At the time

of the alleged offenses there was no clear interpretation of

federal regulations pertaining to orthotic devices such as

Dr. Akin claimed his to be.'® Therefore, he could not, as a

10. As Mr. Justice Marshall stated in a statutory context

(not in an administrative ruling context) in Dunn v. United States,

442 U.S. 100, 112-113 (1979):

To characterize such an interview as an ancillary

proceeding would not only take liberties with the

language and legislative history of Sec. 1623, it would

also contravene this Court’s long-established practice

of resolving questions concerning the ambit of a criminal

statute in favor of lenity. [citing cases] This practice

reflects not merely A convenient maxim of statutory

construction. Rather, it is rooted in fundamental

principles of due process which mandate that no

individual be forced to speculate, at his peril of

indictment whether his conduct is prohibited. [citing

cases] Thus, to ensure that a legislature speaks with

special clarity when marking the boundaries of criminal

conduct, courts decline to impose punishment for actions

that are not “plainly and unmistakably” proscribed.

18

matter of law, have intended to defraud the government,

which could not decide the question for itself.

Dr. Akin’s motion to dismiss and/or motion for judgment

of acquittal should have been granted by the trial court.

B. The Petitioner was unconstitutionally sentenced

under an increased Offense Level of 29, based upon

facts that were not included in the indictment nor

proven at trial beyond a reasonable doubt.

The Circuit Court in its unpublished opinion also gave

short shrift to Petitioner’s constitutional challenge to his

sentence by dismissing the argument as having no merit.

However, this Court has remanded to the various courts of

appeal Apprendi issues, similar to the issue raised above.!'

Petitioner’s sentence was unconstitutionally enhanced

at sentencing by the District Court based on a preponderance

of evidence standard, without the jury’s finding of guilt

beyond a reasonable doubt on certain facts that were not

11. Burton v. United States, 121 S. Ct. 32 (2000); Wims v.

United States, 121 S. Ct. 32 (2000); Gibson v. United States; 121

S. Ct. 31 (2000); Blue v. United States, 121 S. Ct. 32 (2000); Brown

v. United States, 2000 U.S. LEXIS 6603; Clinton v. United States,

2000 U.S. LEXIS 6605; Hughes v. United States, 121 S. Ct. 423

(2000); Curry v. United States, 121 S. Ct. 376 (2000); Hester v.

United States, 121 S. Ct. 336 (2000); Smith v. United States, 121

S. Ct. 336 (2000); Twitty v. United States, 121 S. Ct. 559 (2000);

Potts v. United States, 121 S. Ct. 559 (2000); Meais v. United States,

121 S. Ct. 559 (2000); Humphrey v. United States, 121 S. Ct. 478

(2000); Knight v. United States, 121 S. Ct. 478 (2000); Whitt v.

United States, 121 S. Ct. 423 (2000). See also Travis Randle v.

United States, 2001 WL 81170 (Sth Circuit decision July 17, 2001)

where in the Court reversed a sentence on similar ground.

————————————

19

included in the indictment.'? These enhancements were

proposed by the U.S. Probation Officer, argued by the

Government and ordered by the court based upon the

preponderance of evidence standard outside the jury’s finding

and after the jury had been discharged.

At sentencing, Petitioner’s base offense level was

established to be level 23 pursuant to U.S.S.G. § 281.1.

As such, Petitioner was enhanced four (4) levels for being a

leader and organizer based on the preponderance of evidence

standard resulting in an approximate 30 months of additional

incarceration. Petitioner was neither charged in the

indictment for this conduct nor was the jury given

any indication under the pleadings that Petitioner was

subject to such an enhancement if found guilty. Additionally,

Akin’s Total Offense Level was enhanced two (2) levels

for $328,855.15 for “value of the funds” based on the

preponderance of evidence standard resulting in 11 months

more incarceration regarding the money laundering counts.

This amount of money was not pled in the indictment, as the

Government conceded (See Government’s Addendum

Objections to PSI and additionally, U.S. Position Regarding:

(1) Defendant’s Objections To. PSI; and (2) Money

Laundering Calculations, filed under seal), nor was the jury

given any indication that Akin was subject to such an

enhancement if found guilty on this fact.

12. The Fifth Circuit on July 19,2001 held in United States v.

Gonzalez, __ F.3d __, 2001 WL 815606 in deciding an Apprendi

issue in a drug case that failure to allege an amount of drugs in an

indictment, submit it to a jury and prove it beyond a reasonable

doubt affected the defendant’s substantial rights. The Fifth Circuit

in the case at bar failed to address this very same issue which raised

by Akin.

20

Under the Sixth Amendment to the J.S. Constitution,

Petitioner’s rights indisputably entitled him to a jury

determination of guilt on every element of the crime with which

he is charged beyond a reasonable doubt. United States v.

Gaudin, 515 U.S. 506 (1995) cited by Apprendi v. New Jersey,

530 U.S. 466, 120 S. Ct. 2348 (2000). Further, Petitioner’s

sentence violates the Sixth Amendment and his due process

rights under the Fifth Amendment.

In United States v. Meshack, 225 F.3d 556 (Sth Cir. 2000)

the Fifth Circuit held that Apprendi did not clearly resolve

whether an enhancement which increases a sentence within the

statutory range but-which does not increase the sentence beyond

that range must be submitted to the jury and proved beyond a

reasonable doubt. Meshack, supra at 576. Although the Court

found the above reading of Apprendi plausible, it took the more

limited reading of Apprendi which requires that a fact be

submitted to a jury and proved beyond a reasonable doubt only

if that fact, as a formal matter, extends the range of punishment

beyond the prescribed statutory maximum. Appendi, supra at

2380. Any amount of excess jail time has Sixth Amendment

significance. Additionally, the Court in Meshack stated that the

Apprendi majority expressly declined to reverse an earlier

opinion allowing a judge to determine by a preponderance

whether an enhancement should apply, instead limiting that

case’s “holding to cases that do not involve the imposition of a

sentence more severe than the statutory maximum for the offense

established by the jury’s verdict.” Meshack, supra, quoting

Apprendi, 120 S. Ct. at 2361 n.13 (discussing McMillan v.

Pennsylvania, 477 U.S. 79 (1986), and noting that it might

reconsider the holding in the future). The Fifth Circuit in the

case at bar, declined to entertain Petitioner’s constitutional

challenge to his sentence stating that the District Court

committed no error in the sentencing of Petitioner.

21

Petitioner’s sentence was enhanced beyond the statutory

maximum permitted and contrary to the dictates of Apprendi

and therefore was unconstitutional.

CONCLUSION

For the foregoing reasons, certiorari should be granted.

Respectfully submitted,

STEVEN JAY ROZAN

KUNIANSKY, KARAHAN & ROZAN

Attorneys for Petitioner

5051 Westheimer

Suite 700

Houston, Texas 77056

(713) 627-3608