HLD, v. 32, n. 7 (July 2004)
U.S. Court In New York Affirms Jury Verdict That Defendant Submitted
Health Insurance Claims For "No-Show" Employee
Defendant Dr. Jude T. Barbera, a urologist with a private practice
in Brooklyn, New York, was indicted on several conspiracy and health fraud charges
for putting Thomas Gelardo, a member of the Luchese Organized Crime Family of
La Cosa Nostra, on his medical office payroll in order to provide Gelardo with
health insurance through his practice's health plan. The indictment charged
that defendant provided a salary and W-2 forms for Gelardo, when Gelardo was
not a legitimate employee--also known as a "no-show" employee--defrauded the health
plan, which was obtained through Local 348 of the United Food and Commercial
Workers International Union (union), and submitted false insurance claims on
behalf of Gelardo and his wife.
At trial it was shown that defendant filed false tax forms showing
Gelardo as an employee of his practice, and filed tax forms on behalf of the
practice taking a deduction for Gelardo's salary. Several of defendant's employees
testified that they never saw Gelardo in the office. Defendant's employees also
testified that the medical practice paid the health insurance premiums on behalf
of Gelardo. The jury convicted defendant on all but one count. On four of the
counts related to healthcare fraud the jury responded to special interrogatories
in which it found defendant guilty for obtaining the medical insurance for Gelardo
but not for fraud regarding the submitted health claims.
Defendant moved under Fed.
R. Crim. P. 29(c) to set aside the verdict on the ground the government
did not prove venue and in the alternative that under Rule 33(a) he should be
granted a new trial because the government's rebuttal summation vilified defense
counsel and shifted the burden of proof, and the trial court's jury instructions
about employee compensation prejudiced him.
The U.S. District Court for the Southern District of New York denied
defendant's motions. As to defendant's argument that the government had not
established venue, the court noted that it had to identify the conduct and determine
where it occurred. The court found that the evidence showed that the false W-2
forms and payroll checks were sent from Brooklyn to Westchester, both of which
were in the court's venue, and that defendant's false corporate tax forms were
prepared in Manhattan, which was also within the court's venue. Thus, the court
concluded that venue was proper.
Defendant also argued the government's rebuttal summation was improper
because it "vilified" defense counsel and improperly shifted the burden of proof
to him. To prevail on a claim of prosecutor misconduct, said the court, a plaintiff
must prove the improper remarks caused him substantial prejudice. The court
explained that it has repeatedly held that a prosecutor is entitled to remark
about a defendant's failure to call a witness. Defendant specifically argued
that the prosecutor improperly commented on defendant's failure to cross-examine
certain government witnesses and impermissibly shifted the burden of proof by
arguing about the false billings and medical charts of Gelardo after spending
little time questioning the witnesses about the billings. The court looked at
the remarks within the context of the entire trial and determined that the prosecutor
never mentioned the burden of proof being on defendant, and mentioned at various
points during the trial that the burden of proof was on the government. The
court also determined the comments of the prosecutor during rebuttal were in
response to the defense's summation, and a prosecutor is entitled to latitude
in making remarks to the jury. The defendant was also not prejudiced by any
of the prosecutor's comments, said the court.
Defendant also argued the jury instruction on employee compensation
was improper because the trial court instructed the jury about when a person
is treated as an employee when the court should have instructed the jury about
whether defendant treated Gelardo as an employee knowing it was improper to
do so. The court determined that the trial court instructed the jury about whether
defendant acted knowingly in providing a job in name only to Gelardo, and whether
he acted knowingly in submitting the tax forms. The court found that the trial
court's instructions were proper. Therefore, the court denied defendant's motions.
United States v. Barbera, No. S1 02 Cr. 1268 (RWS) (S.D.N.Y.
June 2, 2004).