Evidentiary Hearing – Abuse of Discretion

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Criminal

7^th Circuit Court of Appeals

Officials: WOOD, Chief Judge, and ROVNER, Circuit Judge, and SPRINGMANN, District Judge.*

Evidentiary Hearing – Abuse of Discretion

No. 14-2915 United States of America v. Keenan Ferrell

District court in medicare fraud case did not abuse discretion in disallowing hearsay statements proffered by appellant as evidence and admitting evidence offered by Government after.

“The district court then engaged in Rule 403 balancing and ruled the testimony admissible. Healthcare fraud is a specific intent crime, United States v. Natale, 719 F.3d 719, 741–42 (7th Cir. 2013), cert. denied, 134 S. Ct. 1875 (2014) (mem.), and the district court found Ferrell’s defense was that “he was unaware these practices were occurring.” Def.’s/Appellant’s App. 48. Thus, Ferrell’s intent and knowledge was actually contested. United States v. Richards, 719 F.3d 746, 759 (7th Cir. 2013) (“[If] the defendant simply asserts his innocence in a more general way or argues his conduct failed to satisfy some other element of the crime besides intent or knowledge, prior bad acts evidence is inadmissible.”) (emphasis added); United States v. Miller, 673 F.3d 688, 697 (7th Cir. 2012) (“[W]hile intent is at least formally relevant to all specific intent crimes, intent becomes more relevant, and evidence tending to prove intent becomes more probative, when the defense actually works to deny intent, joining the issue by contesting it.”); United States v. Meislin, — F. Supp. 3d — , No. 5:14-CR-18, 2015 WL 3645724, at *2–5 (N.D.N.Y. June 11, 2015) (holding former co-worker’s testimony that defendant’s prior conduct—submitting bills to Medicare indicating a doctor was present when a doctor actually was not—was proper to show knowledge and intent when defendant faced charges for engaging in identical conduct at a subsequent job and defendant contended she lacked requisite knowledge and intent for healthcare fraud). The highly probative value of Shriver’s testimony is readily apparent, as it revealed Ferrell’s awareness of sending unlicensed individuals to various nursing homes to conduct psychotherapy sessions in Ferrell’s name. It also demonstrated Ferrell’s intent to bill Medicare for these visits. Although this testimony is obviously prejudicial, we are convinced the district court engaged in “‘a principled exercise of discretion’” and thought “through the relevance of and the potential prejudice posed by the proffered evidence.” United States v. Lee, 724 F.3d 968, 977–78 (7th Cir. 2013) (quoting United States v. Beasley, 809 F.2d 1273, 1278–79 (7th Cir. 1987)).”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.