Opinion
No. 02-40069-01/02/03-SAC
February 10, 2004
MEMORANDUM AND ORDER
The case comes before the court on the defendant Terrence W. Cooper's Motion for Judgment of Acquittal or, alternatively, a New Trial (Dk. 318 the defendant Frank D. Heck's Motion for New Trial (Dk. 306 and the defendant Paige A. Heck's Motion for Judgment of Acquittal or in the alternative for New Trial (Dk. 315). The government has filed a consolidated response opposing all three motions. (Dk. 319). After considering the arguments, researching the relevant law, and reviewing the evidence, the court denies the defendants' motions for the reasons stated below.
STANDARDS FOR MOTION FOR JUDGMENT OF ACQUITTAL
When the jury returns a verdict of guilty, the court may on such a motion set aside the verdict and enter a judgment of acquittal. Fed.R.Crim.P. 29(c). When the sufficiency of the supporting evidence is challenged, the court must examine the evidence in the light most favorable to the prosecution to determine whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319 (1979); see United States v. Bailey, 327 F.3d 1131, 1140 (10th Cir. 2003). In reviewing the sufficiency of the evidence, the court must consider the direct and circumstantial evidence, as well as the reasonable inferences to be drawn from that evidence. United States v. Davis, 1 F.3d 1014, 1017 (10th Cir. 1993) (citing United States v. Fox, 902 F.2d 1508, 1513 (10th Cir.), cert. denied, 498 U.S. 874 (1990)). The court must accept the jury's resolution of conflicting evidence, as well as the jury's apparent credibility calls. Davis, 1 F.3d at 1017 (citing United States v. Youngpeter, 986 F.2d 349, 352 (10th Cir. 1993)). "`[T]he evidence presented to support the conviction must be substantial;. . . it must do more than raise a mere suspicion of guilt.'" United States v. Torres, 53 F.3d 1129, 1133-34 (10th Cir.) (quoting United States v. Sanders, 928 F.2d 940, 944 (10th Cir.), cert. denied, 502 U.S. 845 (1991)), cert. denied, 515 U.S. 1152 (1995).
On the other hand, the evidence "`need not conclusively exclude every other reasonable hypothesis and it need not negate all possibilities except guilt.'" United States v. Johnson, 42 F.3d 1312, 1319 (10th Cir. 1994) (quoting United States v. Alonso, 790 F.2d 1489, 1493 (10th Cir. 1986)), cert. denied, 514 U.S. 1055 (1995). So long as the jury's verdict is "`within the bounds of reason,'" it will not be disturbed on appeal. United States v. Ramirez, 63 F.3d 937, 945 (10th Cir. 1995) (quoting Grubbs v. Hannigan, 982 F.2d 1483, 1487 (10th Cir. 1993)). "`A jury will not be allowed to engage in a degree of speculation and conjecture that renders its finding a guess or mere possibility. Such a finding is infirm because it is not based on the evidence.'" United States v. Jones, 49 F.3d 628, 632 (10th Cir. 1995) (quoting Sunward Corp. v. Dun Bradstreet, Inc., 811 F.2d 511, 521 (10th Cir. 1987) (quoting Daniels v. Twin Oaks Nursing Home, 692 F.2d 1321, 1326 (11th Cir. 1982))).
"An inference is reasonable only if the conclusion flows from logical and probabilistic reasoning." United States v. Jones, 44 F.3d 860, 865 (10th Cir. 1995). The Tenth Circuit looks to the following in deciding whether an inference is reasonable:
"The line between a reasonable inference that may permissibly be drawn by a jury from basic facts in evidence and an impermissible speculation is not drawn by judicial idiosyncrasies. The line is drawn by the laws of logic. If there is an experience of logical probability that an ultimate fact will follow from a stated narrative or historical fact, then the jury is given the opportunity to draw a conclusion because there is a reasonable probability that the conclusion flows from the proven facts. "
United States v. Jones, 49 F.3d at 632 (quoting Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 895 (3d Cir.), cert. denied, 454 U.S. 893 (1981)). "Additionally, `the essential requirement is that mere speculation be not allowed to do duty for probative facts after making due allowance for all reasonably possible inferences favoring the party whose case is attacked.'" United States v. Jones, 49 F.3d at 632 (quoting Galloway v. United States, 319 U.S. 372, 395 (1943)). Finally, a conviction may not be upheld by piling inference upon inference. Jones, 44 F.3d at 865.
ANALYSIS
In large part, the defendants simply renew their arguments made during trial that the government's evidence is insufficient to sustain a finding of guilt as to any of the counts of conviction. The defendant Cooper denies that the evidence is enough to prove he acted with the necessary criminal intent on any of the counts. The defendant Paige Heck devotes several paragraphs to arguing the absence of "direct evidence" that she acted in concert with the co-defendants, that she entered into any agreement to defraud the government or Invacare, that she intended to join and associate herself with the criminal purpose of the charged conspiracy, or that she was directly involved in the coding of medical equipment on claims to Medicare. As it ruled at trial, the court is satisfied that the evidence is sufficient for a reasonable jury to return a guilty verdict on the counts of conviction.
"[T]he absence of any direct evidence of a conspiracy is immaterial so long as there is sufficient circumstantial evidence of a conspiracy to support a finding of guilt beyond a reasonable doubt." United States v. Torres, 53 F.3d at 1135 (citation omitted). "Direct evidence of a defendant's intent is seldom available. Intent can be proven, however, from surrounding circumstances." United States v. Johnson, 971 F.2d 562, 566 (10th Cir. 1992). Indeed, "direct evidence, as distinguished from circumstantial, is not essential to a criminal conviction." United States v. Brunson, 907 F.2d 117, 119 (10th Cir. 1990) (quotation and citation omitted). "Circumstantial evidence is entitled to the same weight as that given to direct evidence in determining the issue of factual sufficiency to support a verdict beyond a reasonable doubt." United States v. Smith, 788 F.2d 663, 669 (10th Cir. 1986).
For a conviction under 18 U.S.C. § 371, the government must prove: (1) the defendant agreed with another person to violate the law; (2) the defendant knew the essential objective of the conspiracy; (3) the defendant knowingly and voluntarily joined the conspiracy; (4) there was an overt act knowingly done to advance the conspiracy; and (5) interdependence among the coconspirators. See United States v. Rahseparian, 231 F.3d 1267, 1272 (10th Cir. 2000), cert. denied, 532 U.S. 974 (2001); United States v. Guadalupe, 979 F.2d 790, 793 (10th Cir. 1992). An agreement to violate the law is the essence of a conspiracy. United States v. Esparsen, 930 F.2d 1461, 1471 (10th Cir. 1991), cert. denied, 502 U.S. 1036 (1992). "The agreement need not be formal or explicit but rather may be inferred from facts and circumstances." United States v. Arutunoff, 1 F.3d 1112, 1116 (10th Cir.) (citation omitted), cert. denied, 510 U.S. 1017 (1993). It is rare to have direct evidence of an agreement to join a criminal conspiracy. United States v. Edmonson, 962 F.2d 1535, 1548 (10th Cir. 1992). A jury may infer an agreement to conspire "from the acts of the parties and other circumstantial evidence indicating concert of action for the accomplishment of a common purpose." United States v. Carter, 130 F.3d 1432, 1439 (10th Cir. 1997) (quotation omitted), cert. denied, 523 U.S. 1144 (1998). While the government must show more than mere association with alleged coconspirators, "frequent contacts" among conspirators and "their joint appearances at transactions and negotiations" tend to show the existence of an agreement. United States v. Evans, 970 F.2d 663, 669 (10th Cir. 1992) (internal quotations omitted), cert. denied, 507 U.S. 922 (1993).
An alleged conspirator must have a "general awareness of both the scope and the objective of the enterprise to be regarded as a coconspirator." Evans, 970 F.2d at 670. To establish that a defendant had knowledge of the essential objectives of the conspiracy, the government must "show that the defendant shared a common purpose or design with his alleged coconspirators." Evans, 970 F.2d at 669 (quotation omitted).
"A defendant may be convicted of conspiracy only if the government proves that the defendant had knowledge of the conspiracy and voluntarily participated therein." United States v. Evans, 970 F.2d at 669. "A defendant's connection to a conspiracy may be slight, as long as the government proves defendant's knowing participation." United States v. Powell, 982 F.2d 1422, 1429 (10th Cir. 1992) (citations omitted), cert. denied, 508 U.S. 917 (1993). In conspiracy cases, a "defendant's guilty knowledge and voluntary participation may be inferred from surrounding circumstances." Carter, 130 F.3d at 1440 (quotation omitted). "The jury is also permitted to presume a defendant is a knowing participant in the conspiracy when he acts in furtherance of the objective of the conspiracy." United States v. Scull, 321 F.3d 1270, 1282 (10th Cir. 2003) (internal quotation omitted), cert. denied, 124 S.Ct. 175 (2003).
Interdependence among coconspirators exists when "each coconspirator's activities constitute essential and integral steps toward the realization of a common, illicit goal." Carter, 130 F.3d at 1440. To be interdependent, "the defendant's activities must facilitate the endeavors of other conspirators or the venture as a whole." United States v. Arutunoff, 1 F.3d at 1116 (citation omitted). In Evans, the court said that "[w]hat is needed is proof that they intended to act together for their shared mutual benefit within the scope of the conspiracy charged." 970 F.2d at 670-71.
The defendants admitted in their civil depositions to sharing decision-making responsibility for Midwest Health Care Providers, the durable medical equipment supply business through which the different charged offenses were carried out. The testimony of three former employees, Lisa McNish, Cathy Hambrick, and Rick Lipscomb, as well as, the defendants' co-conspirator statements confirmed that the three defendants jointly made decisions such as which products Midwest would sell, how Midwest billed for products, what debt Midwest would carry, and how Midwest would spend its monies. The record is replete with evidence showing all three defendants to have known at various points during the relevant time period that Midwest was upcoding regularly one or more of its products, that it was billing for unnecessary wheelchair cushions for the Ranger II chairs, that it was billing prior to the delivery date, and that Midwest was continuing one or more of these practices after the defendants were told either by Medicare officials or other knowledgeable persons that these practices were in violation of Medicare requirements. The jury's finding that the defendants conspired to commit these violations is sustained by the following evidence and inferences therefrom, the size of Midwest's operations, the observed interaction between the defendants in operating the business, the conversations overheard between the defendants, the defendants' admissions to different employees and sales persons of upcoding, the significantly large amount of profits earned by the defendants in a short period of time by unlawfully upcoding different products, and the nature and number of Medicare violations committed by Midwest. In their respective corporate roles, each defendant knowingly participated in and furthered the conspiracy to defraud. The court is satisfied that a rational trier of fact could have found the essential elements of conspiracy as charged in count one beyond a reasonable doubt.
To obtain a conviction for health care fraud under 18 U.S.C. § 1347(2), the government must prove that the defendants knowingly and willfully executed or attempted to execute a scheme to defraud a health care benefit program in connection with the delivery of or payment for health care benefits, items or services by means of material, fraudulent representations. Cf. United States v. Akers, 215 F.3d 1089, 1101 (10th Cir.), cert. denied, 531 U.S. 1023 (2000). "Because it is difficult to prove intent to defraud from direct evidence, a jury may consider circumstantial evidence of fraudulent intent and draw reasonable inferences therefrom." United States v. Bailey, 327 F.3d at 1140. Intent can be inferred from efforts to conceal the unlawful activity, from misrepresentations, from proof of knowledge, and from profits. Id.
The government introduced evidence that after being told repeatedly by persons with superior knowledge of Medicare coding that the Mastex cushion could not be billed as an EO192, the defendants continued to bill with the higher code and even did so after Medicare officials informed them by letter of the proper code. Other evidence of intent includes Midwest's continued billing of cushions on van seat wheelchairs when the wheelchair representative said additional cushions should not be provided with those models. The defendants ignored plain Medicare requirements by billing prior to delivery and by adding information and accessories to the CMNs. A rational jury could fairly infer an intent to defraud from evidence that the defendants knew or were aware of the proper Medicare codes and requirements and repeatedly violated them. Evidence that Medicare paid significant monies to Midwest because of the upcoding is enough to prove the materiality of Midwest's misrepresentations.
To establish wire fraud, the government had to prove "(1) a scheme or artifice to defraud and (2) use of interstate wire communications to facilitate that scheme." United States v. Janusz, 135 F.3d 1319, 1323 (10th Cir. 1998). Similarly, money laundering requires a specific intent to launder the proceeds from a known illegal activity. See United States v. Rahseparian, 231 F.3d 1257, 1261 (10th Cir. 2000). Even when a defendant denies having the requisite intent, a jury may disbelieve the defendant when the circumstances make the explanation seem improbable. United States v. Magleby, 241 F.3d 1306, 1312 (10th Cir. 2001).
Rather than keeping current Midwest's debt payments to Invacare, the defendants were diverting Midwest's profits to their fitness club. The evidence at trial showed that Midwest continued to fall behind in its payments to Invacare and that the defendants asked Invacare for month's skip in payment and explained they were having cash flow problems. Yet, when Midwest received a sizable rebate from the Invacare, the defendants did not apply it towards their debt but immediately distributed it as bonuses to themselves. In order to assure Invacare's release of product and ongoing business, the defendants executed significant personal guaranties and a new commercial purchase agreement. The evidence showed the defendants had no reason to believe they could honor such guaranties or the agreement, particularly when they knew their ability to pay was tied to Midwest's receipt of Medicare proceeds and Midwest was now subject to post-payment or pre-payment review and its claims were being denied at an unprecedented rate. The defendants also initially misrepresented to Invacare representatives that Midwest funds were being used to finance the health club. The court is satisfied that the evidence at trial is more than sufficient for a rational jury to infer that the defendants acted with an intent to defraud Invacare. The materiality of the defendants' misrepresentations is proved by Invacare's reliance on the defendants' promises by continuing to provide Midwest with product on credit. Finally, the evidence at trial relevant to the money laundering charges was largely uncontroverted that the defendants transferred large sums of money to its health club from Midwest's bank account where the proceeds derived from the health care fraud had been deposited.
Considering the direct and circumstantial evidence, as well as the reasonable inferences that can be drawn from this evidence, the court concludes that the jury's guilty verdict on the respective counts is within the bounds of reason. The defendants' motions for judgment of acquittal are denied.
STANDARDS FOR MOTION FOR NEW TRIAL
A court may grant the defendant a new trial "if required in the interest of justice." Fed.R.Crim.P. 33. Though afforded discretion in ruling on such a motion and being free to weigh the evidence and assess witness credibility, a trial court is to regard a motion for new trial with disfavor and grant it only with great caution. United States v. Quintanilla, 193 F.3d 1139, 1146 (10th Cir. 1999), cert. denied, 529 U.S. 1029 (2000). The court should grant such a motion when in those exceptional cases "the evidence preponderates heavily against the verdict," United States v. Evans, 42 F.3d 586, 593 (10th Cir. 1994) (quotation and citation omitted), stated another way, when "the verdict is contrary to weight of the evidence such that a miscarriage of justice may have occurred," United States v. Garcia, 182 F.3d 1165, 1170 (10th Cir.) (quotation and citation omitted), cert. denied, 528 U.S. 987 (1999), or when there has been "[a]ny error of sufficient magnitude to require reversal on appeal." 3 Charles A. Wright, Federal Practice and Procedure § 556 (1982); see United States v. Stiner, 765 F. Supp. 663, 664 (D. Kan. 1991), aff'd, 952 F.2d 1401, 1992 WL 9020 (10th Cir. 1992) (Table). The defendant has the burden of proving the necessity of a new trial. United States v. Davis, 15 F.3d 526, 531 (6th Cir. 1994); United States v. Walters, 89 F. Supp.2d 1206, 1213 (D. Kan. 2000), aff'd, 28 Fed. Appx. 902 (10th Cir. Dec. 7, 2000).
Insufficient Evidence for Guilty Verdict
The court already has discussed the sufficiency of evidence in denying the defendants' motion for judgment of acquittal. After analyzing the same evidence discussed above using the standards governing a motion for new trial, the court concludes that the evidence does not preponderate heavily against the verdict and that the verdict is not contrary to weight of the evidence such that a miscarriage of justice may have occurred. The court sees no reason to revisit the evidence already discussed which was sufficient for the jury to return a guilty verdict as it did.
Instruction on Deliberate Ignorance
The defendants argue the court erred in giving a deliberate ignorance instruction over their objection, as the government failed to present the evidence necessary to sustain this instruction. The defendants construe the government's evidence as showing only their non-compliance with Medicare regulations and merely the possibility of their awareness of the regulatory violations. The defendants see their case as resembling United States v. Hilliard, 31 F.3d 1509, 1516 (10th Cir. 1994), in that the deliberate ignorance instruction "made it a real possibility that the jury could have convicted . . .[them] for negligence in failing to heed" the Medicare regulations. In short, the defendants' objection is not with what was stated in the instruction but with the propriety of giving it.
The Tenth Circuit has held that a deliberate ignorance jury instruction is appropriate only "when the prosecution presents evidence that the Defendant purposely contrived to avoid learning all the facts in order to have a defense in the event of a subsequent prosecution." United States v. Espinoza, 244 F.3d 1234, 1242 (10th Cir. 2001) (quotation marks and citation omitted). On the other hand, "the fact that an objective reasonable person would have had knowledge is immaterial." Espinoza, 244 F.3d at 1242. The real focus is on whether the defendants "`had subjective knowledge of his criminal behavior,' but purposely and deliberately avoided actual knowledge of the operant facts." United States v. Soussi, 316 F.3d 1095, 1106 (10th Cir. 2002) (quoting United States v. Delreal-Ordones, 213 F.3d 1263, 1268 (10th Cir.), cert. denied, 531 U.S. 915 (2000), and citing Espinoza, 244 F.3d at 1242-43), cert. denied, 123 So. Ct. 1772 (2003). The Tenth Circuit has also said that "the use of a deliberate ignorance instruction is rarely appropriate . . . because it is a rare occasion when the prosecution can present evidence that the Defendant deliberately avoided knowledge." United States v. Hanzlicek, 187 F.3d 1228, 1233 (10th Cir. 1999) (quotation and citation omitted).
Following the verdict, the court in revisiting its decision to give a deliberate ignorance instruction must view the evidence in the light most favorable to the government. United States v. Delreal-Ordones, 213 F.3d at 1264. Proof that the defendant consciously avoided learning certain facts need not be by direct evidence, for the government may "rely on circumstantial evidence and the benefit of the favorable inferences to be drawn therefrom." Id. at 1268 (citation omitted). This evidence "must establish that the defendant had subjective knowledge of his criminal behavior," for proof of negligence or even recklessness will not suffice. Id. (citations omitted).
When viewed in the light most favorable to the government and considered in its entirety, the evidence in this case supports the inference that the defendants acted deliberately in several respects to avoid knowledge that their billing codes and practices were improper. The evidence at trial was replete with instances where the defendants, who had prior business experience with sales of medical equipment and supplies under Medicare rules and regulations, learned reliable information from manufacturer representatives, their own employees, billing service employees, and auditing company representatives from which one can infer that the defendants actually knew that one or more of their billing codes and practices violated Medicare law. With this knowledge, the defendants then consciously avoided looking up the controlling provisions in the Medicare manuals, checking on relevant updates to the manuals, or contacting the SADMERC helpline. At trial, the defendants claimed reliance on others such as the billing service companies and Medicare itself to detect and correct any mistakes in their billing codes and practices. Based on the foregoing, a jury could readily conclude that despite clear opportunities to do so, the defendants purposely declined to learn more about the controlling Medicare rules and regulations. The court finds no error in giving this instruction on the facts of this case.
Evidentiary Rulings
In their motions, the defendants take issue with three evidentiary rulings made during trial: in permitting the government to question their expert witness, Sandra Soerries, on certain subjects; in admitting government's exhibit 75 which is the written audit report made by Sunrise Medical; and in admitting government's exhibit 214 which is a letter from the defendants' counsel, Jane Arnold of Bryan Cave, LLP, to Paige Heck concerning the completion of certificates of medical necessity. The government defends each of the evidentiary rulings as proper. The court will quickly address each ruling.
Cross Examination of Sandra Soerries
The defendants complain that the court should not have permitted the government to cross examine their expert witness, Sandra Soerries, about the extent of her review of the documents in this case, as her services were necessarily limited by the amount of funding that the court had approved. "Cross examination may embrace any matter germane to the direct examination, qualifying or destroying, or tending to elucidate, modify, explain, contradict, or rebut testimony given in chief by the witness." United States v. Troutman, 814 F.2d 1428, 1450 (10th Cir. 1987) (citations and quotation omitted). Of course, a court may restrict cross-examination that is irrelevant, unduly prejudicial, or collateral to the issues in the trial. See, e.g., United States v. Kinnard, 465 F.2d 566, 582 (D.C. Cir. 1972). A court should cautiously exercise this discretion when the impeachment of a witness could have an important influence on the outcome of the trial. See, e.g., United States v. Pryce, 938 F.2d 1343, 1345 (D.C. Cir. 1991), cert. denied, 503 U.S. 941 (1992). "The scope and extent of cross-examination of expert witnesses rests in the sound discretion of the trial court and is not subject to exception unless wholly arbitrary, unreasonable and abusive, and examination need not be extended to permit interrogation about collateral, immaterial or irrelevant matters." Specht v. Jensen, 832 F.2d 1516, 1527 (10th Cir. 1987) (citations and quotations omitted), reh'g granted on other grounds, 853 F.2d 805 (10th Cir. 1988), cert. denied, 488 U.S. 1008 (1989).
The court does not believe it was an abuse of discretion to permit the government's cross examination into the bases of Ms. Soerries' opinions and the extent with which she familiarized herself with the specific facts and documents relevant to the different charges in this case. In arguing error, the defendants do not articulate how they were unduly or unfairly prejudiced by this cross examination. This is not a situation, nor have the defendants argued that it is one, where the court deprives the defendants of adequate funding for expert witness services and the government then exploits the situation. One would infer from the record that the defendants chose Ms. Soerries and used her testimony consistent with their trial strategy and that the defendants were not forced into limiting her review and testimony because the court denied their requests for additional funding. The defendants offer no authority for immunizing a defendant's expert witness from a thorough cross examination when the witness's fees are being paid pursuant to 18 U.S.C. § 3006A(e). The defendants' contention is without merit.
Sunrise Medical Audit
The defendant Cooper argues the court erred in admitting government's exhibit 75, because it was "replete with inaccurate information, unfairly biased and unfounded opinions, and criticisms that were wholly irrelevant to the issues before the jurors." (Dk. 318, pp. 5-6). The defendant complains this evidence was unfairly prejudicial and compares the issue here with United States v. Riddle, 103 F.3d 423, 430-31 (5th Cir. 1997), in which the appellate court found an abuse of discretion in admitting four years' of reports made by the Office of the Comptroller of Currency ("OCC") constituting "extensive evidence about the OCC's appraisal of . . .[the defendant's bank's] general health and its failure to comply with regulations from its inception to its demise" and thereby introducing prejudicial information concerning a number of regulatory violations unrelated to the charges in the case.
This case is distinguishable from Riddle in several critical aspects. First, the Sunrise Audit was done at a single point in time by a company hired by the defendants for several stated purposes, one of which was to determine whether Midwest was complying with various Medicare regulations. Second, the defendants repeatedly referred to the fact of this audit throughout the trial as proof that they lacked any intent to defraud, because no criminal would have wanted to create a record that could be used to demonstrate the unlawfulness of their actions and to establish their knowledge of the same. Third, the defense counsel extensively examined government witnesses about the report pointing out its alleged errors and the lack of factual foundation for some of the opinions and criticisms expressed in it. Fourth, the report corroborated numerous allegations in the indictment that the defendants had violated Medicare regulations in its billing practices during a time period critically relevant to the charges. Having used the fact of the audit as evidence in their defense, the defendants are not in a position to claim unfair prejudice from the jury learning the negative conclusions expressed in the audit. The court finds that the admission of the audit report did not unduly prejudice the defendants and that any error in its admission was merely harmless.
Counsel's Letter
The defendant Cooper claims the court failed to protect his attorney-client privilege in admitting this letter based on an erroneous finding of abandonment that was litigated in part when the defendant was not represented by counsel. The defendant Cooper limits his argument to the obvious privileged nature of the letter and simply adopts and incorporates his argument and authority from his motion to suppress. Because the defendant offers no new arguments or facts relevant to the matters extensively discussed and decided in the order issued during the grand jury proceedings and the later order filed on the suppression motions, the court will not revisit its rulings. Having left behind numerous business and personal documents, including this letter from their counsel, and turned over possession and control of all such documents to known third parties, the defendants are unable to assert any viable continuing privilege in that letter. The court finds no error in its ruling.
Other Pretrial Rulings
In arguing errors to support her request for a new trial, the defendant Paige Heck lists several of the court's pretrial rulings, including denial of the defendant's motion for bill of particulars, denial of her motion to suppress, denial of her motion to recuse, and denial of her motion in limine. The defendant's only argument is to cite her original briefs filed with those prior motions. The defendant does not further delineate the errors in the court's ruling or in the analysis employed. The defendant provides the court with no reason for revisiting those rulings, and the court is not aware of any other reason for doing so. The court denies the defendant's request for a new trial based on those prior rulings and the reasons expressed therein.
Prosecutorial Misconduct
All three defendants argue that the government's counsel repeatedly and insistently asked improper questions and interjected improper comments and that the prosecutor's improper actions went undeterred by the court's rulings on defense objections. As examples of this misconduct, the defendants allege the prosecutor incorrectly implied in questions that Midwest had not filed income tax returns for 1996 and 1997, defied an in limine order by eliciting testimony from agent Brian Holt about the observed medical condition of individual patients who had purchased durable medical equipment from Midwest, improperly interjected comments to answers elicited by her questions, and gave a closing argument in which she vouched for government witnesses, accused the defendants of lying, denigrated defense counsel for withholding certain evidence, and misrepresented other evidence. The defendants also seek a new trial on the cumulative effect of the prosecutorial misconduct. The government denies any allegations of misconduct, asserts the record does not support the defendants' contentions, says the defendants are simply "crying wolf," and argues the allegations fall far short of showing a miscarriage of justice or prejudice to the defendants' right to a fair trial.
The decision whether to grant a defendant's motion for new trial based on prosecutorial misconduct is committed to the discretion of the district court. See United States v. Gordon, 173 F.3d 761, 769 (10th Cir.), cert. denied, 528 U.S. 886 (1999). The court reviews claims of prosecutorial misconduct using a two-step process: first, was the conduct improper; and second, if improper, does the conduct warrant reversal. United States v. Lonedog, 929 F.2d 568, 572 (10th Cir.), cert. denied, 502 U.S. 854 (1991). Generally "a criminal conviction is not to be lightly overturned on the basis of a prosecutor's comments standing alone, for the statements or conduct must be viewed in context; only by so doing can it be determined whether the prosecutor's conduct affected the fairness of the trial." United States v. Young, 470 U.S. 1, 11 (1985); see also United States v. Kravchuk, 335 F.3d 1147, 1153 (10th Cir.), cert. denied, 124 S.Ct. 279 (2003). If the prosecutor's statement is improper, it is harmless unless there is reason to believe that it influenced the jury's verdict. United States v. Toles, 297 F.3d 959, 972 (10th Cir. 2002). In considering whether the misconduct affected the verdict, the court looks at the trial court's curative measures and the magnitude and role of the prosecutor's misconduct within the context of the entire trial. Lonedog, 929 F.2d at 572. "To warrant reversal, the misconduct must have been flagrant enough to influence the jury to convict on grounds other than the evidence presented." Toles, 297 F.3d at 972 (quotation and citation omitted).
Improper Questions
The defendants generally argue that the prosecutor engaged in improper questioning when she interjected comments on the witnesses' answers to her questions. The defendants do not argue that the trial court failed to sustain their objections to the prosecutor's comments. In most of these instances, the court also instructed the jury that a counsel's statements, argument, and remarks are not evidence in the case and that they should disregard the government counsel's comment. The court gave a similar instruction in the final set and further instructed that a lawyer's question is not evidence, for "[i]t is the witnesses' answers that are evidence, not the questions." (Dk. 301, Instr. 53). Neither the frequency nor the nature of the government counsel's interjected comments on witnesses' answers during cross-examination gives the court any reason to believe the jury's verdict was influenced by them.
The defendants next highlight the prosecutor's cross-examination of their accounting expert which implied that the defendants caused Midwest not to file tax returns when, in fact, Midwest had filed returns for the years of 1996 and 1997. As provided at trial and in its response to the defendants' motions, the government had a good faith basis for pursuing a line of inquiry on whether a legitimate business would file tax returns. Two fact witnesses, Diane Kennedy and Scott Long, had testified previously to the effect of Midwest's failure to file timely tax returns. In addition, the government had an IRS certification of no Midwest tax records for 1998 and 1999. That the breadth of the government's inquiry may have left the erroneous impression of no Midwest tax returns being filed in 1996 and 1997 was a matter the defendants effectively corrected in subsequent testimony and then tried to exploit later in their closing arguments by citing as an example of a mistake and/or misrepresentation in the government's case. The court is confident that whatever erroneous impression was left by the government's cross-examination about Midwest's filing of 1996 and 1997 tax returns did not influence the jury's verdict.
The other alleged example of improper questioning was the prosecutor's examination of Agent Holt as to what he had observed about the physical abilities of certain Midwest wheelchair customers whom he visited during his investigation. The defendants say this line of inquiry violated the court's order in limine, but they offer no specific citations to an order that was arguably violated. While the court did grant the defendants' motion in limine to exclude evidence or arguments that Midwest's customers suffered negative health problems as a result of the equipment which Midwest sold them, the court did not issue any pretrial ruling that precluded the government from introducing evidence of a customer's observed ability to walk as proof on the issue whether the equipment was medically necessary. Consequently, it was not improper for the government to initiate this line of inquiry to which the defendants made their immediate objection that was sustained.
Closing Argument
According to the defendants, the prosecutor in her closing "made repeated and egregiously improper arguments, including vouching for her witnesses' credibility, denigrating the defense for failure to present certain evidence, calling the defendants liars, mischaracterizing the evidence, and misrepresenting the facts." (Dk. 318, p. 4). The defendants do not quote, cite or reference any particular statements from the prosecutor's closing in support of their general allegations. As a result, the court will be brief in addressing these allegations.
"[V]ouching by an attorney as to the veracity of a witness is improper conduct and an error which this court will carefully review." United States v. Swafford, 766 F.2d 426, 428 (10th Cir. 1985). In determining whether improper vouching has occurred, the court considers "the extent to which the witness's credibility was attacked." See, e.g., United States v. Rudberg, 122 F.3d 1199, 1204 (9th Cir. 1997) (internal quotation marks omitted). A focus of the defendants' case here was to attack the credibility of the government's witnesses. The court also must assess any vouching statements within the context of the entire proceeding. The court is satisfied that the government's counsel generally confined her comments to identifying circumstances that corroborated the credibility of the government witnesses without interjecting her personal opinion about the same. The court recalls no serious or blatant instances of improper vouching. Moreover, the court instructed the jury extensively on evaluating witnesses' credibility, including that they were "the exclusive judges of . . . the credibility of the witnesses" and that a lawyer's statements were not evidence. Even assuming that any of the prosecutor's statements were improper, these measures were sufficient to cure any error. See United States v. Broomfield, 201 F.3d 1270, 1276-77 (10th Cir.) (district court mitigated the impact of any improper vouching when it "repeatedly instructed the jurors that they were the sole and exclusive judges" of witness credibility and that "the statements and arguments of counsel are not to be considered evidence in this case."), cert. denied, 531 U.S. 830 (2000).
A prosecutor may comment on the lack of evidence in a case. See, e.g., United States v. Gomez-Olivas, 897 F.2d 500, 503 (10th Cir. 1990) (prosecutor is allowed considerable latitude in commenting on evidence and arguing inferences therefrom). It is improper, however, for the prosecutor not only to comment directly about the defendant deciding not to testify, but it is also improper for the prosecutor to comment indirectly by referring to "matters that could have been explained only by the accused, . .[they] give rise to an innuendo that the matters were not explained because [petitioner] did not testify." Battenfield v. Gibson, 236 F.3d 1215, 1225 (10th Cir. 2001) (quotations and citations omitted). "A prosecutor, however, is otherwise free to comment on a defendant's failure to call certain witnesses or present certain testimony." Id. "There is a distinction between a comment on the defense's failure to present exculpatory evidence as opposed to a comment on the defendant's failure to testify." United States v. Mende, 43 F.3d 1298, 1301 (9th Cir. 1995). Moreover, "when a defendant takes the stand, his credibility may be impeached and his testimony assailed like that of any other witness." Portuondo v. Agard, 529 U.S. 61, 69 (2000) (quotation and citation omitted). Because all three defendants testified at trial and because the prosecutor's closing comments appear to have only concerned the defendants' decision not to call a particular witness, a former Mastex sales representative, the court finds no misconduct.
It is improper for a prosecutor to express a personal belief in the guilt of a defendan, see United States v. Meienberg, 263 F.3d 1177, 1179-80 (10th Cir. 2001), or to use closing arguments to inflame the passions or prejudices of the jury. See United States v. Pena, 930 F.2d 1486, 1490-91 (10th Cir. 1991). Prosecutors may, however, draw reasonable inferences from the evidence in their closing arguments, see United States v. Nolan, 551 F.2d 266, 274 (10th Cir.), cert. denied, 434 U.S. 904 (1977), and suggest such reasonable inferences to the jury. See Pena, 930 F.2d at 1490. "[T]he Tenth Circuit has characterized as `unnecessary' and `unwarranted' a closing argument in which a prosecutor called a defendant a `liar,' United States v. Nichols, 21 F.3d 1016, 1019 (10th Cir. 1994), [ cert. denied, 513 U.S. 1005 (1994), but] it is not per se prosecutorial misconduct to refer to testimony as a lie, see, e.g., United States v. Hernandez-Muniz, 170 F.3d 1007, 1012 (10th Cir. 1999)." United States v. Kravchuk, 335 F.3d at 1154. As in Kravchuk, the trial court here instructed the jury on witness credibility, on their role as the exclusive judge of witness credibility, and on the counsels' statements not being evidence. These instructions mitigated any impact from the prosecutor arguing that the defendants' testimony included "whoppers." The court finds that the jury would have perceived the prosecutor's statements within the context of her closing argument as simply a commentary on the implausibility of the defendants' story rather than the prosecutor's personal expression of her judgment of the defendants' credibility based on her own undisclosed inside knowledge of the case. See United States v. Robinson, 978 F.2d 1554, 1567 (10th Cir. 1992), cert. denied, 507 U.S. 1034 (1993). In sum, though not condoning the prosecutor's use of excessive hyperbole in her closing argument, the court is satisfied that the objectionable statements were isolated and brief and their impact minimized by the court's repeated instructions to the jury about their consideration of counsels' statements. The court concludes that the prosecutor's comments did not undermine the jury's fundamental ability to weigh the evidence fairly.
Cumulative Error
The defendants argue alternatively that the court should grant them a new trial based on the cumulative effect of the alleged errors committed at trial. Though having occasionally referenced the harmless error rule above, the court does not expressly find any errors in its rulings at trial or in its conduct of the trial. To preserve the defendants' record on appeal, the court will consider briefly the defendants' cumulative error argument.
The Tenth Circuit has held:
A cumulative-error analysis merely aggregates all the errors that individually have been found to be harmless, and therefore not reversible, and it analyzes whether their cumulative effect on the outcome of the trial is such that collectively they can no longer be determined to be harmless. Unless an aggregate harmlessness determination can be made, collective error will mandate reversal, just as surely as will individual error that cannot be considered harmless. The harmlessness of cumulative error is determined by conducting the same inquiry as for individual error — courts look to see whether the defendant's substantial rights were affected.
United States v. Sarracino, 340 F.3d 1148, 1169 (10th Cir. 2003) (citation omitted), cert. denied, 72 U.S.L.W. 3448 (Jan. 12, 2004). Considering the minimal impact from any of these arguable errors, collectively as well as individually, the court is confident that the errors did not affect the defendants' substantial rights and that the defendants received a fair trial.
IT IS THEREFORE ORDERED that the defendant Terrence W. Cooper's Motion for Judgment of Acquittal or, alternatively, a New Trial (Dk. 318); the defendant Frank D. Heck's Motion for New Trial (Dk. 306); and the defendant Paige A. Heck's Motion for Judgment of Acquittal or in the alternative for New Trial (Dk. 315) are denied.