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U.S. Court In New York Affirms Jury Verdict That Defendant Submitted Health Insurance Claims For 'No-Show' Employee


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).   

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