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United States v. Barson

United States Court of Appeals, Fifth Circuit

December 28, 2016

UNITED STATES OF AMERICA, Plaintiff - Appellee
v.
DENNIS BARSON, JR.; DARIO JUAREZ, Defendants-Appellants

         Appeals from the United States District Court for the Southern District of Texas

          Before REAVLEY, DAVIS, and JONES, Circuit Judges.

          PER CURIAM.

         Defendants appeal their convictions for conspiracy to commit health care fraud and several substantive counts of health care fraud. Defendants primarily challenge the sufficiency of the evidence, the court's deliberate ignorance jury instruction, a number of evidentiary rulings, and the enhancements applied to their sentences. We AFFIRM.

         I.

         Defendants Dennis Barson, Jr. and Dario Juarez were charged with one count of conspiracy to commit health care fraud under 18 U.S.C. § 1349 (Count 1) and nineteen counts of health care fraud under 18 U.S.C. § 1347 (Counts 2 through 20). After a jury trial, both Defendants were convicted on all 20 counts. The district court sentenced Barson and Juarez to 120 and 130 months of imprisonment, respectively, followed by three years of supervised release. The court also ordered forfeiture and restitution.

         Defendant-Appellant Barson was recruited by Edgar Shakbazyan to serve as the medical director for a diagnostic clinic under Shakbazyan's control in Houston, Texas. Shakbazyan was the manager of the clinic and handled the financial affairs of the clinic. He was indicted in a multi-count indictment in this case and was convicted pursuant to his plea of guilty.

         At Shakbazyan's request, Barson signed a blank form so the clinic could apply for and obtain a Medicare number to be used to bill Medicare for its services. Barson opened a bank account in his name where Medicare reimbursements could be deposited. Barson also signed a number of blank checks and gave them to Shakbazyan so he could draw on the account.

         The clinic opened on June 8, 2009. For $7, 000 per month, Barson traveled from Austin to Houston every other Saturday to review patient files. The clinic was set up to perform EKGs, ultrasounds, electrocardiograms, spirometer tests, and physical exams performed by a physician's assistant. Medicare was billed for 9, 339 procedures for tests performed on 429 beneficiaries using Barson's Medicare number. Hundreds of the claims were for rectal sensation testing and electromyography studies of the anal or urethral sphincter, which the clinic could not and did not perform. At trial, several of the clinic's patients testified they went to the clinic because they were paid to do so and some never received any medical services. Barson testified he never reviewed bank statements, Medicare remittances, or concern himself with any of the financial affairs of the clinic.

         Defendant-Appellant Juarez worked at the clinic and claimed to be a physician's assistant working under Barson's supervision. Juarez, who had no formal medical training, held himself out to patients as a physician and was the medical staff member at the clinic.

         Barson closed the clinic on July 30, 2009, after he suspected that the clinic was not above board; however he notified no one of his suspicions.

         Several suspicious circumstances came to Barson's attention. In the weeks leading up to closing the clinic, Barson made a number of unsuccessful attempts to reach the California doctor who reviewed ultrasounds for the clinic. Barson also learned in July that Shakbazyan was lying about his true identity. On August 4, a Medicare contractor in charge of waste, fraud, and abuse, opened an investigation into the clinic and tried unsuccessfully to contact Barson by phone. On August 11, Barson closed the clinic bank account set up to receive Medicare reimbursements. Upon receiving his 1099 tax form in February 2010, Barson learned that the clinic's bank account in his name received approximately $1.2 million in Medicare reimbursements. In his testimony, he claimed this was his first notice that this large sum had been deposited in his account during the approximately two months the clinic had been open.

         II.

         Sufficiency of the evidence challenges are reviewed de novo.[1] In doing so, this Court must determine whether "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt."[2] The Court should accept "all credibility choices and reasonable inferences made by the trier of fact which tend to support the verdict."[3]

         III.

         Sufficiency of the Evidence

         Defendants' primary challenge on appeal is to the sufficiency of the evidence to establish both the conspiracy count and the substantive counts for health care fraud.

         To establish a conspiracy to commit health care fraud, the government must show "the existence of an agreement between two or more people to pursue the offense of fraud; the defendant knew of the agreement; and the defendant voluntarily participated in the conspiracy."[4] The agreement may be silent and informal between the conspirators.[5] Further, "voluntary participation may be inferred from a collection of circumstances, and knowledge may be inferred from surrounding circumstances."[6] The defendants need not have personally submitted the necessary forms requesting reimbursement from Medicare to be guilty of health care fraud or conspiracy to commit health care fraud.[7] The government may use direct or circumstantial evidence to prove each element.[8]

         At trial, both Barson and Juarez argued they had no knowledge of the fraudulent activity, let alone an agreement to commit fraud.

         Barson based his argument that he had no knowledge of fraudulent activity on his lack of experience. Before taking the job as the medical director for the clinic, Barson was a physician in the Navy and worked a short time in private practice. When he was hired by Shakbazyan to work for the clinic, Barson was working as a neurology resident in Austin, Texas. On a resident's salary, he argued, he needed the extra money the job at the clinic would provide. Barson had no prior experience with Medicare or medical billing practices in any of his prior positions. Barson argued that he had no way of knowing about the fraudulent scheme because he never saw any patient files that included many of the tests the clinic billed Medicare for. Barson testified that the patient files he reviewed included services that the clinic was set up to provide: EKGs, ultrasounds, electrocardiograms, spirometer tests, and physical exams performed by a physician's assistant. Because he was hired in this limited role to review patient files set aside for him twice a month, Barson maintained that he had no way of knowing that the clinic was engaged in fraudulently billing Medicare.

         Similarly, Juarez argued that even though he was impersonating a physician's assistant, he had no knowledge of or access to any of the facility's billing systems.

         The government presented ample circumstantial evidence to establish both Defendants' knowledge of the ongoing health care fraud. Barson signed documents in blank allowing the clinic to bill under his Medicare identification number and opened a bank account in his name to receive Medicare reimbursements. He signed a number of blank checks to permit Shakbazyan to draw on the account. He allowed the bank statements to be sent to the clinic and never reviewed them. Barson received a significant sum, $7, 000 per month, for reviewing patients' charts every other Saturday. Barson admitted to an FBI investigator that despite his suspicions and bad feelings about the clinic, he reported his suspicions to no one. He quietly closed the clinic on July 30. Barson did not monitor the bank account in his name or review any Medicare remittances that went to the clinic. Upon receiving his 1099 tax form showing that the clinic bank account received nearly $1.2 million, Barson again failed to contact Medicare to report his concerns.

         The government also established that Juarez was aware he was participating in a scheme to commit Medicare fraud. Juarez held himself out as a "doctor" at the clinic and falsely claimed to Barson that he was a physician's assistant, the clinic's on-site medical staff member. Juarez saw almost all of the patients and turned a blind eye to the fact that most of the so-called patients had no need for medical care and that many received no medical care. He saw large numbers of patients lining up outside the clinic daily after being delivered to the clinic by the same white van. Juarez had access to the clinic's mail including the bank statements and Medicare remittances. Juarez was paid $20, 000 for his work, a large sum for an unlicensed individual to pose as a physician's assistant. He lied to investigators about the payments he received. Juarez also gave conflicting testimony to an FBI investigator about an alleged break in at the clinic and missing patient files.

         Barson also argues that the evidence was insufficient to establish an "agreement" to commit health care fraud. His arguments closely track his arguments on the knowledge element and fails for similar reasons.

         The evidence established that Barson and Shakbazyan agreed that (1) Barson would apply for a Medicare number; (2) Barson would allow the clinic to use that number to bill Medicare; and (3) Barson would receive $7, 000 per month for reviewing files every other Saturday. The evidence established that Shakbazyan set up the fraudulent scheme and had intimate knowledge of the details of the fraud.

         Juarez agreed with Skakbazyan to work at the clinic as the medical staff member and hold himself out as a physician's assistant to Barson and as a physician to the patients.

         The jury was also entitled to find that the Defendants committed health care fraud on the substantive counts of the indictment. Each substantive count was based on a separate request for Medicare reimbursements that the government established were not for medical services ...


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