WILLIAM K. THOMAS, Senior District Judge.
This criminal appeal involves the operation of Inner-City Medical Services, Inc. (dba Inner-City Medical Clinic), a Michigan corporation, during the period of a charged criminal conspiracy. The relevant years are 1981, 1982 and the first half of 1983.
Shannon Mahar owned the majority of the stock of Inner-City Medical Services, Inc.
Under 21 U.S.C. § 846,
In counts 2 through 16 each of the defendants, except Maurice Norris, was individually charged with the unlawful distribution of a named controlled substance to an identified person, in violation of 21 U.S.C. § 841(a)(1),
Counts 18 through 32 charged each of the defendants, except Maurice Norris, with a violation of mail fraud under 18 U.S.C. § 1341,
Paragraph 1 of count 18 further alleged:
Finally, in count 17 Shannon N. Mahar and Walter V. Mahar were charged with engaging in a continuing criminal enterprise in violation of 21 U.S.C. § 848.
The defendants' seven week trial in the district court ended on February 26, 1985. The jury convicted defendants Shannon Mahar, Riley Mahar and Inner-City Medical Clinic on the count 1 conspiracy charge under 21 U.S.C. § 846. As to counts 2-11, and 13-16
The disposition of the charges against the remaining defendants was as follows: Before trial Maurice Norris plead guilty to count 1. During trial defendant Walter V. Mahar suffered a heart condition that required hospitalization. The charges against him were severed and the trial proceeded as to the other defendants. Subsequent to the trial he plead guilty to the count 1 conspiracy charge and to mail fraud. Dr. Stephen B. Kay was acquitted by the trial judge at the conclusion of the government's case. The judge made a finding of "no specific intent." Kent L. Oliver and Terrance R. Mahar were both acquitted by the jury on all counts on which each was charged.
I.
Each of the three appellants asserts separate grounds of error, and each adopts and incorporates the arguments of the other appellants. Before considering the principal claims of error, the court will first review the evidence and will also consider whether it is sufficient to support the convictions.
A.
Among the thirty-five witnesses who testified in the government's case were four undercover law enforcement officers (three FBI special agents and a Detroit police officer).
Other witnesses included various employees of the Clinic, who described its operation. The Clinic's computer software programmer explained the computer system, the programs he had installed, and the Clinic's use of the computer system. An internist and a pharmacist, called as expert witnesses by the government, gave their opinions regarding medical and pharmaceutical practices and standards. Representatives of Michigan's Medicaid program and of the state's Blue Cross/Blue Shield system also testified.
Inner-City Medical Clinic was located in a building at 15101 Livernois, Detroit, Michigan. A sign on the building stated "Medical Clinic and Weight Control — Medicare, Medicaid, Blue Cross." Another sign stated "Doctor is Here Now." A nearby sign announced "Open 7 days 9:00 AM-6:00 PM."
The front door of the Clinic opened into a waiting room. Along the inner wall was the glassed-in desk of the receptionist. One door of the waiting room led to the Clinic pharmacy and another door of the waiting room led to examination and testing rooms behind the waiting room. One of several signs read "PLEASE DIRECT ALL QUESTIONS TO THE RECEPTION PERSON AT THE FRONT WINDOW NOT TO THOSE PERSONS CALLING PATIENTS INTO EXAMINATION ROOMS." Another sign stated, in part, "NO CHANGES OR ADDITIONS AFTER YOU LEAVE THE PINK CHAIR. NEXT VISIT — 14 DAYS." Patients were required to present to the receptionist a medical card (Blue Cross or Medicaid) and an ID card.
On a typical day at least 100 patients visited the Clinic. Twenty to twenty-five persons were lined up in the waiting room, and other persons were standing outside the Clinic. When a person's name was called by the receptionist the patient was taken into an inner area and asked by a medical assistant why he or she was seeing the doctor. Typical answers were "pain and nerves," "diet," "weight loss and pain," "a back problem," "cold problem" and "pain." However, when one undercover officer said "back problem," he was told "the doctor would not buy a back problem." He then indicated that he was having a pain in the heel of his foot and that his neck hurt. This changed complaint was accepted.
Most of the long-time patient-witnesses testified that complaints of pain, cold, and overweight were often not true, and that their purposes in going to the Clinic were to obtain drugs. They told of selling the drugs on the street outside the Clinic, or elsewhere away from the Clinic. On some occasions drugs and money were seen to change hands in the waiting room.
Several witnesses worked as medical assistants during part of the time they were employed at the Clinic. Each stated that she took information from each patient, including physical complaints that brought the patient to the Clinic. Each medical assistant also explained that height, weight, blood pressure and pulse of patients were obtained and recorded. Patients similarly testified that such information was taken by Clinic employees. This information became part of the patients' medical records.
In the Clinic's back rooms, urine samples were taken and blood was taken from patients once a month. Several patients reported that they were told by employees that, in exchange for a payment to the employee ($5.00 for one, $10.00 for another), no blood would be taken. One patient testified that when blood was taken, six six-inch tubes were filled.
Medical assistant Karen Lasenby testified that patients would pay not to have blood drawn, that she had seen payments made and that defendant Walter Mahar "started receiving phone calls from patients about this." He called a meeting of employees and said he "didn't want it done anymore ... he was getting too many complaints." Ms. Lasenby named five employees whom she had observed accepting money for not drawing blood. She admitted
Carrying the patient's chart (a computer printout), the medical assistant escorted each patient into room 6 to see Dr. Kay. Medical assistant Vanessa Goodrum said that Dr. Kay "would sometimes take the stethoscope up to the patient's heart." The patients repeatedly testified that Dr. Kay's stethoscope examinations lasted just a few seconds. While some patients said that Dr. Kay would state what tests were needed, he rarely asked questions or said anything at all to the patients. Ms. Goodrum said further that she "would tell Dr. Kay what the patient's in for, give him the vital signs and everything on the chart that he would need, and then he would circle whatever the patient was in for and then we would leave." In red, Dr. Kay would usually circle "P" for pain, "C" for cold, "D" for diet, or "N" for nerves. Patients indicated that Dr. Kay's entire examination lasted 1 to 3 or 4 to 5 minutes.
After Dr. Kay circled the pre-printed letter on the patient's chart, the patient was taken to the "pink chair." There, the person in charge of the chair and the computer terminal, usually Maurice Norris, determined the drug medications to be sold to the patient. Medical assistants at times relieved Maurice at the pink chair. The person in charge would go through the patient's chart, see what the patient had regularly received, and prescribe the same medications. Sometimes a patient would ask what he or she could get. Walter V. Mahar instructed employees to give the patient what the patient had received before. The person in charge of the pink chair keyed in a code for a particular drug on the computer terminal and the prescription was printed out as a bottle label in the pharmacy. If Terrance Mahar told the pink chair employee that the pharmacy didn't have a particular drug, the patient "had to take something else."
The principal tests given the patients were blood tests, urinalysis, X-rays, electrocardiograms (EKGs), and pulmonary function studies (PFS). The person in charge of the pink chair would look over the patients' histories and decide which of these tests the patient should receive. Medical assistant Lasenby testified that Dr. Kay didn't know what tests were taken, and that "We would do all the testing." Shannon Mahar had given the instruction that every patient with a cold should get a sinus X-ray. Maurice told "patient" Glaspie, "If you want Talwins you better be X-rayed." Either Walter Mahar or Shannon Mahar had given the instruction that in ordering the EKG or the PFS, the person in charge of the pink chair "had a time limit" on these tests. The trial judge asked, "Who got them, people there for pain, for cold, for nerves, for what?" Ms. Goodrum answered, "Everybody." The trial judge then asked, "Every patient?" and the witness answered "Yes."
After completion of tests the patient was directed to return to the waiting room. When the patient's prescription number was called by the receptionist the patient paid the specified cost and received the drugs. In all described instances each patient received two bottles of drugs, each containing a prescription label on which was typed the name of Stephen B. Kay, M.D. and Inner-City Medical Clinic Pharmacy. According to medical assistant Lasenby, the most frequently prescribed drugs were Desoxyn (an amphetamine for weight loss), Tylenol 4 and Talwin (for pain), and Ambenyl (a codeine cough medicine). The prices paid to the Clinic varied from a few dollars to $55.00, depending on the drugs purchased. A written notice in the medication sack from Dr. Kay stated: "Please
Dr. Ira Freilich worked as the Clinic's examining doctor on Sundays from August 1981 through March 1983. Shannon Mahar hired him. In their initial face to face conversation at the Clinic, Shannon Mahar explained "what medicine at the Clinic would be like." He said, according to Dr. Freilich, that it "was a high-volume type of practice, and the patients were interested in receiving medication from the Clinic that I might not be used to prescribing, and that we would be ordering tests that I might not be used to ordering." Shannon Mahar identified the medications as "Ambenyl, a cough syrup" and the pain medications were "Tylenol with codeine, Empirin with codeine, and Talwin." He further told Dr. Freilich that "if [he] was to be employed by the Clinic that the patients would have to get what they wanted, or there would be no need for a physician."
In time the patient volume on Sunday between 10:00 A.M. and 7:00 P.M. grew to 65 to 80 patients. The patient examination took "[s]ix to eight minutes." Based on a patient's complaint and the history and examination that Dr. Freilich could "get in six to eight minutes," he would "usually prescribe the medications that the patient had requested." While he made the selection of tests on his own, Dr. Freilich stated that he knew that "if sufficient testing was not done the Clinic would not be profitable" and his "services would not be necessary." On the test "menu" Clinic employees circled in pencil "tests that hadn't been done in awhile and could be done per Clinic schedule," but Dr. Freilich would "circle those that [he] thought could be justified medically." In addition, in light of the information he received Dr. Freilich would prescribe drugs for each patient. In contrast to Dr. Kay, Dr. Freilich would circle a particular prescribed drug. Also unlike Dr. Kay, he would sign prescriptions after they were printed out in the Clinic.
Dr. Freilich testified that he did not practice good medicine at the Clinic but "it created the appearance of good medicine." He stated that the prescriptions he issued and the tests that he ordered were "not medically necessary."
Dr. Gregory Berger, an internist, was called by the government as a medical expert. Questions focused on five volumes of prescriptions seized from the pharmacy during the February 14, 1983 search of the Clinic. Dr. Berger was asked to assume that the prescriptions were "a compilation of prescriptions issued by the Clinic during six of the seven days that it's open and operating." He was asked to give his opinion
As for testing, Dr. Berger stated that an EKG is not appropriate for a cold or cough, and that a pulmonary function test is "definitely not a good test to order for cold or cough because if the person has a cold or is coughing they can't cooperate with a pulmonary function testing." On the question of blood tests, he answered that a "complete blood count to check for infectious cells in the blood might be appropriate if there were fever." He did not believe that a urinalysis was "an appropriate test for cold or cough." With respect to X-rays, a chest X-ray definitely would be ordered "if the patient had a fever or making sputum" and "its acceptable either to [order] or not order the chest X-ray if the symptoms were lesser for cold or cough." But "X-rays won't help diagnose diet problems without specific complaints that you're trying to look for."
Dr. Berger was asked what determines, in the usual course of legitimate medical practice, which tests are done on blood samples drawn from a patient. He answered that the "physician orders the test in the usual medical practice based on his history and his physical exam and his attempts to make diagnosis."
The government also called Gerald Bodendistal, a registered Michigan pharmacist, who is associated with a "prescription orientated pharmacy." He pointed out that Tylenol 4 and Empirin 4 each contains 1 grain of codeine and other components. Mr. Bodendistal stated that "the codeine in the strong dose could have a potential for drug dependence." Talwin is "used for moderate to severe pain" and "not for ordinary or minor pain." He said it had "a potential for abuse." Ambenyl, containing codeine, requires a prescription. He distinguished some cough syrups not requiring a prescription even though they contain codeine. Ambenyl is not one of those drugs. Desoxyn is a methamphetamine, a central nervous system stimulant, "that has been used in diet control, appetite suppression." He observed that it has "a high potential for abuse and is really prescribed not very often by most physicians because of that abusing." Preludin, containing Phenmetrazine, is a central nervous system stimulant used for appetite control. Because it tends to elevate blood pressure and increase heart rate it "must be used with caution
Mr. Bodendistal stated that when there was a doubt about the legitimacy of a prescription the pharmacist "would refuse to dispense the prescription." Explaining this statement, he said that a pharmacist acting in the usual course of his legitimate practice would question whether the prescription was in fact issued for a legitimate medical purpose under these circumstances:
B.
We now consider the sufficiency of the evidence produced at trial to support the convictions on the various counts. The jury's verdict "must be sustained if there is substantial evidence, taking the view most favorable to the Government." Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942). We first consider the evidence as it relates to the count 1 charge of conspiracy to distribute controlled substances in violation of 21 U.S.C. § 846.
As seen, the Clinic often received 100 or more patients per day. This means that in an 8 hour day — 480 minutes — Dr. Kay spent no more than 4.8 minutes per examination (allowing no time between patients). These brief examinations, or even the 6 to 8 minute examinations conducted by Dr. Freilich, permitted the jury to find that it was impossible for the Clinic to conform to the usual course of medical practice. The additional evidence, as reviewed above, showing that patients were regularly sold controlled substances (most "commonly abused drugs") selected by non-physician lay employees of the Clinic would further support a finding that controlled substances were issued outside the usual course of medical practice and for no legitimate medical purpose.
Shannon Mahar, the Clinic's president, administered the affairs of the Clinic. Thus he purchased and supervised the operation of the Clinic computer system installed in the fall of 1981. The main computer terminal was in his office.
The evidence thus showed that Shannon and his father, Walter, shared the Clinic's management. Since Walter V. Mahar spent considerable time in the pharmacy and supervised the Clinic's employees, the evidence supports a finding that he knew about the Clinic's distribution of Schedules II, III and IV controlled substances to its patients and knew that this was not being done in the usual course of medical practice. Similarly, the evidence permitted a finding that Shannon was equally knowledgeable that drugs were distributed outside the usual course of medical practice.
Defendant Riley Mahar, manager of the Clinic's pharmacy and its licensed pharmacist, was responsible for the purchase and distribution of all the pharmacy's controlled substances. He knew of the nature and identity of the drugs that he was purchasing for use by the Clinic's patients. He knew that each patient was receiving drugs and knew of the types of drugs that
In toto, the evidence warranted the jury in finding that defendants Shannon Mahar, Riley Mahar and Walter V. Mahar
The evidence also supports the conspiracy conviction against the Clinic.
The court correctly instructed the jury that count 1 of the indictment charged a conspiracy under 21 U.S.C. § 846, and quoted as follows from this section:
The court then stated that 21 U.S.C. § 841(a)(1) provides, in pertinent part, as follows:
The court went on to "caution" the jury that the law clearly permits a physician to prescribe and a pharmacist to fill prescriptions for controlled substances in the usual course of medical practice for legitimate medical purposes.
In other instructions the court correctly listed the elements essential to the offense of conspiracy charged in the indictment. In sum, we find that the conspiracy count instructions were adequate and sufficient. The evidence as previously highlighted and the findings set forth above support the conviction of each of the convicted defendants on count 1.
Similarly, except as hereafter indicated, the convictions of the defendants on particular substantive counts are supported by the evidence at trial, as highlighted above. Since substantive counts 2-11 and 13-16 charged each defendant both as a principal and as an aider and abetter, the part each convicted defendant played in the illegal sale and distribution of the identified controlled substances was sufficient to support conviction. Moreover, the convictions were warranted under the following instruction as to counts 2 through 16:
However, there are two substantive counts, 13 and 14, for which the convictions are not sustained by the evidence.
Michael Smith said he had gone to the Clinic at least 18 times. The Clinic records show that he was there on March 8, 1982. This date, which sounded "about right" to him, is the date set forth in count 4 in which it is charged that the defendants illegally distributed Preludin to him. Count 13 cites illegal distribution of Talwin to Michael Smith on October 19, 1982. But no Clinic record of a visit to the Clinic on that date was called to his attention. Nor was it otherwise proved that controlled substances were illegally distributed to him on or about that date. Hence, the conviction on count 13 against the three defendants is set aside and vacated.
Count 14 of the indictment charged the defendants, on or about November 23, 1982, with unlawfully distributing and aiding and abetting the distribution of Phenmetrazine (Preludin) to Martin Hinton. Mr. Hinton stated that he went to the Clinic about six times, the first time in 1981, sometime in the summer. Pressed on examination for the period of time that he was there, Mr. Hinton said it was over a five or six month period; he'd be "pretty safe to say around '81." Whatever the reason may have been for Mr. Hinton's poor memory for dates, the five to six month period in 1981 in which he said he made visits to the Clinic does not embrace November 23, 1982, the date of the charged offense. Nor does other evidence support this count. It will be set aside and vacated.
Defendants Shannon Mahar and the Inner-City Medical Clinic were convicted of violating 18 U.S.C. § 1341 (mail fraud) in counts 18 through 32. As seen, the mail
The remaining count is count 17, on which Shannon Mahar was convicted of engaging in a continuing criminal conspiracy. All of the reviewed evidence, considered together with evidence of Shannon Mahar's receipt of Clinic profits, supported Shannon Mahar's conviction on this count.
Having reviewed the evidence in the record, and having concluded that such evidence supports the convictions of the defendants (with the exception of counts 13 and 14), we now separately consider each of the principal grounds of error which these defendants have raised on appeal.
II.
Defendants contend that 12 pages of handwritten notes, marked collectively as Exhibit 22A, were improperly admitted into evidence. Defendants argue that the 12 pages of notes constitute inadmissible hearsay, and that no hearsay exception was established at trial.
A.
The 12 pages of handwritten notes making up Exhibit 22A are undated and unsigned. FBI special agent James B. Walter testified that the notes were found along with "miscellaneous business records" in room 6. This room was occupied by Dr. Kay on his workdays and by Drs. Freilich and Yurina on their workdays. A handwriting expert called by the government testified that five of the 12 pages of Exhibit 22A were written by Dr. Wally Mahar and that three pages were written by Walter V. Mahar. The handwriting expert did not identify the author of the remaining four pages.
The notes making up Exhibit 22A appear to focus upon a Medicaid investigation into the Clinic's activities.
During the first part of his closing jury argument, government counsel characterized the notes in Exhibit 22A as "a game plan for avoiding detection of fraud." Describing this exhibit as "evidence from the defendants' own mouths," the prosecutor displayed portions of the notes to the jury using transparencies on a video projector. He wove various quotes into his argument:
He continued:
The prosecutor also observed that the "problems, of course, are picked out quite well" in the notes, referring to these entries: "Multiple vague or non-specific complaints"; "So much time with each patient"; "Not very good history."
The prosecutor returned to Exhibit 22A in his rebuttal argument:
He then concluded as follows:
B.
The government argues that the notes in Exhibit 22A were not offered to prove the truth of the matters asserted and thus that the notes do not constitute hearsay. The principal case cited in support of this proposition is United States v. Wilson, 532 F.2d 641, 645 (8th Cir.), cert. denied, 429 U.S. 846, 97 S.Ct. 128, 50 L.Ed.2d 117 (1976), in which the court held that statements contained in notebooks found at the defendants' apartment were not hearsay "since they were not offered to prove the truth of the facts asserted therein." Rather, the notebooks "were admissible as circumstantial evidence (a) to show the character and use of the place where the notebooks were found and (b) to corroborate the informant's testimony." Id.
Although the government now advances the argument that the Exhibit 22A notes were not offered to prove the truth of the matters asserted, it is significant that at no time during the trial did government counsel offer to place such a limitation on the
Furthermore, it appears from the government's use of the notes at trial that the government did in fact intend to convince the jury of the truth of the matter of several statements in the notes. During his rebuttal argument, the prosecutor asked the jury to consider whether the defense had "explain[ed]" the statements in the notes, and then proceeded to recite several of these statements. By emphasizing, for example, the statement "High test volume per visit," the government apparently intended to convince the jury of the truth of the matter asserted: That there was in fact a "High test volume per visit" at the Clinic. The prosecutor's intent to prove the truth of the matters asserted is evidenced by his follow-up statement to the jury: "Well, we know they had a very high test volume, didn't they, per patient at Inner-City Medical Clinic."
Other examples of statements in the notes that the jury may have improperly considered for the truth of the matter asserted include, but are not limited to: "Get rid of supplies that should've been used"; "Double billing"; "High vol. of claims"; and "High vol. of dollars." Thus, the jury may have relied on these very statements "from the defendants' own mouths" as evidence that as part of the scheme charged in the mail fraud counts the Clinic did, for example, engage in double billing and did get rid of supplies that should have been used.
C.
Having rejected the government's argument that Exhibit 22A was not offered to prove the truth of the matters asserted, we now must determine whether the notes were properly admitted under any exception to the hearsay rule. The trial court originally admitted Exhibit 22A under the business records exception of Fed.R.Evid. 803(6).
It is concluded that under this rule no proper foundation was laid for the admission of the handwritten notes of Exhibit
It is apparent that this testimony, standing alone, fails to satisfy the requirements of Rule 803(6). There is no evidence in the record, as the rule requires, as to whether the notes were "kept in the course of a regularly conducted business activity," or whether "it was the regular practice of that business activity to make" the notes. The absence of any testimony by someone with personal knowledge of the defendant Clinic's recordkeeping practices and the circumstances under which the notes were recorded clearly establishes that the business records exception was not satisfied in this case.
After making its ruling that the Exhibit 22A notes were business records, the trial judge appears to have shifted the basis for admissibility to the coconspirator exception of Rule 801(d)(2)(E). Thus, following receipt of the handwriting expert's testimony the court found that the "government had demonstrated the existence of a conspiracy, and that the defendants before the court were members" of the conspiracy.
The trial court's findings that a conspiracy existed and that the defendants against whom Exhibit 22A was offered were members of the conspiracy, clearly satisfied the first two prongs of United States v. Enright, 579 F.2d 980, 986 (6th Cir.1978).
More particularly, the trial judge erred in failing to make findings as to the time and circumstances under which the notes were written by Dr. Wally Mahar and Walter V. Mahar. Counsel for defendant Shannon Mahar requested the right to call Dr. Wally Mahar out of the jury's presence to show that the notes were "authored in February and March of 1977." Counsel stated that Dr. Wally Mahar would swear to counsel's comments that this "was the date of a Medicaid audit" and that "on three different dates in March of 1977, they came to the Clinic; they obtained certain records for the purpose of review."
It was no answer for the court to say that the defendants were "free to put all of the explanations of the evidence before the jury as part of your defense case." Enright specifically teaches that the admissibility of coconspirators' statements pursuant to Rule 801(d)(2)(E) is for the court to decide under Rule 104(a):
579 F.2d at 987. Thus the question was not for the jury. The court should have permitted the defendants to call Dr. Wally Mahar and should have received any other evidence that was relevant to show the time and circumstances under which the
The court's failure to make the required Enright finding, a responsibility that devolved on the court, was clearly an abuse of discretion. This is the standard under which evidential errors of a trial court are tested on appeal. Mitroff v. Xomox Corp., 797 F.2d 271, 275 (6th Cir.1986). The remedy for the trial judge's abuse of discretion in admitting Exhibit 22A is articulated, infra, in part VI.
III.
A.
As another ground of error, defendant Shannon Mahar argues that the trial court erred in quashing the defense subpoena ad testificandum of Dr. Kay. After the government rested and Dr. Kay was acquitted by the court, counsel for defendant Riley Mahar issued a subpoena for Dr. Kay to appear as a defense witness.
Out of the presence of the jury, counsel for Dr. Kay informed the court that Dr. Kay would assert the Fifth Amendment right against self-incrimination to all questions if called to the witness stand. Citing an affidavit of Dr. Kay,
It is argued on appeal that the trial judge erred in quashing the subpoena without requiring Dr. Kay to first take the witness stand.
In re Morganroth, 718 F.2d 161, 167 (6th Cir.1983).
Under these well-settled Sixth Circuit principles, it is clear that the trial court should have required Dr. Kay to take the witness stand and to assert his claim of Fifth Amendment privilege in response to particular questions. The trial court then
Although the trial court could have required Dr. Kay to assert his claim of privilege in response to particular questions, we note that defense counsel failed to request that the court follow such a procedure. Thus, it is questionable whether this asserted ground of error was properly preserved for appeal. Nevertheless, we will consider this claimed ground of error.
Initially, we observe that had Dr. Kay been required to assert his Fifth Amendment privilege in response to particular questions, it appears that there would have been at least a colorable basis for the claimed privilege with respect to questions regarding his conduct as the Clinic's doctor during the years covered by the indictment. Even though Dr. Kay would not have been subject to further federal prosecution, it appears that there would have been more than "a mere imaginary, remote or speculative possibility of prosecution," Morganroth, 718 F.2d at 167, under Michigan law. As explained by the Supreme Court of Michigan in People v. Formicola, 407 Mich. 293, 284 N.W.2d 334, 336 (1979), the double jeopardy clause of the Michigan Constitution does not bar state prosecutions subsequent to federal prosecutions for offenses arising out of the same act where the interests of the two forums are "substantially different." Of course, the trial court would have been in a better position to make the determination of whether the interests of the two forums were "substantially different"; we cite this standard simply to show that there would have been at least a colorable basis for Dr. Kay to fear prosecution under Michigan law and to assert his Fifth Amendment privilege.
We further observe that had Dr. Kay been denied his claims of privilege and been required to testify, it is difficult to see how his testimony would have aided the defendants. Defense counsel proffered to the court that Dr. Kay would state that "he treated [his] patients, that he felt competent to do it, that when they left he knew that they were going to get a prescription filled, and that he authorized that."
Had Dr. Kay testified as thus represented,
Defendant Shannon Mahar contends that the need for the defendants to question Dr. Kay was heightened by his acquittal at the close of the government's case. It is thus argued that following Dr. Kay's acquittal,
With respect to this argument, we note first that the jury was instructed as follows concerning agent Beranie's testimony as to what Dr. Kay had told him:
Later, the court further instructed the jury as to Dr. Kay:
These instructions clearly and properly directed the jury not to be influenced either by Dr. Kay's statement
Moreover, upon review of all the evidence we must reject the contention that the convictions of the defendants on the conspiracy count and the various substantive counts were based on "spillover" from the dismissal of Dr. Kay. The evidence, viewed in its entirety, clearly supported the jury in finding each of the defendants themselves criminally responsible for the illegal drug distribution conspiracy. While it is true that Dr. Kay's examination of patients was an important focus of the trial testimony, it is abundantly clear that the conspiracy was directed by Shannon Mahar and Walter V. Mahar, with the collaboration and support of Riley Mahar, and that it involved far more employees than just Dr. Kay. For example, the conspiracy depended upon the prescribing and dispensing of controlled substances and the selection of testing procedures by employees at the pink chair. Even though Dr. Kay circled on the patient's chart preprinted letters indicating pain, diet, nerves or cold, the employee at the pink chair actually selected the controlled substance to be sold to the patient. The conspiracy also required the cooperation and participation of the pharmacy in filling the prescriptions for controlled substances. The pharmacy, as seen, would keep the employee at the pink chair informed as to the availability of drugs in stock. In addition, the evidence permitted a finding that persons in the pharmacy signed the prescriptions in the name of Dr. Kay. All this evidence, along with all the other evidence at trial, provided a convincing basis for the jury to find the defendants themselves criminally responsible for the count 1 conspiracy, and, as principals or aiders and abettors, for the various substantive counts.
In sum, for all the reasons stated herein we conclude that no "fundamental rights were affected by the court's ruling"
B.
As his final claim of error, defendant Shannon Mahar cites the refusal of the trial court to give a requested instruction
Stephen B. Kay is a physician. It is therefore a defense to the charges in this indictment that the controlled substances were prescribed by him, if they were prescribed, unless the government proves beyond a reasonable doubt that they were not prescribed for a legitimate medical purpose in the usual course of his professional practice.
During colloquy between the court and counsel concerning proposed jury instruction 65 of the court's draft charge, defendant Shannon Mahar's counsel requested the following instruction as a substitute for the proposed instruction:
As is seen, the requested instruction added to the court's instruction the element that "the other defendants" knew that Dr. Kay's prescription of controlled substances was "outside the usual course of medical practice and was not written for a legitimate medical purpose." While the court did not mention the required knowledge element in the challenged charge, three pages later the court specifically charged that "actual knowledge of the kind of controlled substance which was possessed with intent to distribute, or was distributed by the conspiracy, is an essential element of the offense charged." This was given in conjunction with an instruction stating that for distribution of controlled substances to be a violation of 21 U.S.C. 841(a)(1), "said distribution or transfer must be outside the law."
It is also noted that after its "actual knowledge" instruction, the court thus elaborated this "essential element."
Moreover, the court gave a cautionary instruction "that the law clearly permits a physician to prescribe and a pharmacist to fill prescriptions for controlled substances in the usual course of medical practice for legitimate medical purposes."
The court's instructions must be "judged as a whole." Berrier v. Egeler, 583 F.2d 515, 518 (6th Cir.), cert. denied, 439 U.S. 955, 99 S.Ct. 354, 58 L.Ed.2d 347 (1978). See also Cupp v. Naughten, 414 U.S. 141, 94 S.Ct. 396, 38 L.Ed.2d 368 (1973). Particular "jury instructions in a criminal case should not be analyzed in isolation, but rather must be evaluated in the context of the overall charge." United States v. Gray, 790 F.2d 1290, 1297 (6th Cir.1986). Considered and judged as a whole, the court's total charge gave the jury all of the elements contained in defendants'
IV.
A.
Riley Mahar contends that the trial court erred in finding that Miranda warnings were not required at the time of his interview by FBI special agent Diane Bennett, which occurred during the FBI search of the Clinic's premises on February 14, 1983. Over Riley Mahar's objections, the court permitted agent Bennett to testify at trial as to his statements made to her during the interview.
The Fifth Amendment of the United States Constitution provides: "No person ... shall be compelled in any criminal case to be a witness against himself...." In Miranda v. Arizona, 384 U.S. 436, 444, 86 S.Ct. 1602, 1612, 16 L.Ed.2d 694 (1966), the Supreme Court held that this constitutional guarantee prevents the government from using any statement against a defendant in a criminal case "stemming from custodial interrogation of the defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination." The Court explained that "[b]y custodial interrogation, we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way." Id. A person being questioned in "custodial interrogation" must be warned "that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney...." Id.
In its recent decision in Berkemer v. McCarty, 468 U.S. 420, 104 S.Ct. 3138, 82 L.Ed.2d 317 (1984), the Supreme Court elaborated upon the meaning of "custodial interrogation." The Berkemer Court rejected the contention that Miranda rights do not attach until a person is formally placed under arrest. Thus, it was determined that "a motorist who has been detained pursuant to a traffic stop [who] is subjected to treatment that renders him `in custody' for practical purposes, ... will be entitled to the full panoply of protections prescribed by Miranda." Id. at 440, 104 S.Ct. at 3151. For purposes of deciding whether a person was "in custody" at a particular time, "the only relevant inquiry is how a reasonable man in the suspect's position would have understood his situation." Id. at 442, 104 S.Ct. at 3152. See United States v. Reynolds, 762 F.2d 489, 493 (6th Cir.1985) (applying the "reasonable man" test of Berkemer); United States v. Gillyard, 726 F.2d 1426, 1429 (9th Cir.1984) (holding that a "suspect is in custody and entitled to Miranda warnings, if under the circumstances a reasonable person would believe that he is not free to leave").
It is undisputed in this case that the now-familiar Miranda warnings were not given to Riley Mahar either prior to or during his interview with agent Bennett. The question, therefore, is whether he was subjected to "custodial interrogation" within the meaning of Miranda and Berkemer. The search of the Clinic, as it relates to Riley, and the circumstances of his interview, are now reviewed.
On the afternoon of February 14, 1983, armed FBI and DEA agents, along with uniformed Detroit police officers, searched the Clinic pursuant to a search warrant. In all, there was a total of approximately 20 law enforcement officers. Riley Mahar, in the pharmacy at the time of the officers' arrival at the Clinic, heard a "loud pounding." Pushing open the pharmacy door, he was met with a gun aimed at him by one of the agents. He and other employees were informed "This is the FBI" and were directed to raise their hands and place them against the wall of the waiting room. When he uttered a statement to the person
Riley estimated his hands were raised against the wall for about twenty minutes. During this time he was patted down, as were other employees. Once he was permitted to drop his hands, it was another ten to twenty minutes before he was taken to the corner of the waiting room for identification and photographing.
After his identification, Riley, as the pharmacist, was then taken to the pharmacy and asked to open the safe. For the next 10 minutes he remained in the pharmacy with three agents, and was unable to move about. Next, one of the agents escorted Riley to a doctor's examining room for an interview with agent Diane Bennett. She informed Riley that she was taking a statement pursuant to the search warrant. He was told neither that he had the right to consult a lawyer, that he need not submit to the interview, nor that he was free to leave the Clinic.
The door to the interview room was ajar throughout the interview, and agents were standing just outside the door. The interview was completed in less than half an hour. At its conclusion, Riley was taken by one of the agents back to the pharmacy.
In light of all the circumstances surrounding his detention, we find that a "reasonable person" in Riley's position would not have felt free to leave the Clinic prior to or during his interview.
The remaining question is whether the admission of Riley Mahar's statements, submitted through the trial testimony of agent Bennett, constitutes reversible error. The effect of the admission at trial of Riley Mahar's statements must be judged under the "harmless error" analysis of Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). Under Chapman, as the Supreme Court recently reiterated, an otherwise valid conviction should not be set aside if the reviewing court determines that the error "was harmless beyond a reasonable doubt." Rose v. Clark, ___ U.S. ___, ___, 106 S.Ct. 3101, 3105, 92 L.Ed.2d 460 (1986). Under this test, the question this court must ask is whether absent the improperly admitted statements, "is it clear beyond a reasonable doubt that the jury would have returned a verdict of guilty?" United States v. Hasting, 461 U.S. 499, 511, 103 S.Ct. 1974, 1981, 76 L.Ed.2d 96 (1983). In answering this question, we must consider the entire record. Id. at 509 n. 7, 103 S.Ct. at 1981 n. 7.
Upon consideration of the entire record, we conclude that the introduction at trial of Riley Mahar's statements to agent Bennett constitutes harmless error. First, with respect to Riley's statement that he was "partially one of the [Clinic's] managers," we note that uncontroverted evidence established that he asserted a 25% ownership in the Clinic. See supra note 1. In addition, one employee, Vanessa Goodrum, named Riley Mahar as one of the people from whom she took orders.
Moreover, the evidence clearly established that Riley managed the Clinic pharmacy. As the licensed pharmacist, he directed
Riley also objects to the admission of his statement describing the procedures followed by patients attending the Clinic. Agent Bennett testified as follows:
It is difficult to see how this statement could have had any prejudicial effect upon the jury. The statement contains no admissions of guilt or wrongdoing.
Finally, Riley objects to admission of his statement that he "had seen [Clinic doctors] perform physical exams." There is no indication in this statement as to when or how often Riley had seen physical examinations performed. Nor does the statement specify which doctor or doctors Riley had observed. And nothing in the statement suggests that the examinations seen by Riley were substandard, or that Riley knew substandard medical examinations were being performed.
Having reviewed the statements attributed to Riley Mahar by agent Bennett, we conclude that introduction of such statements was harmless beyond a reasonable doubt. As seen, none of the statements contained incriminating admissions of involvement in the drug distribution conspiracy or any of the substantive distribution counts. More importantly, setting aside the improperly admitted statements, we find that there is clearly sufficient evidence in the record, as detailed in part I.B. supra, to support Riley Mahar's convictions on the conspiracy count and the various illegal distribution counts. We therefore conclude that absent the improperly admitted statements, it is clear beyond any reasonable doubt that the jury would have returned the same convictions against defendant Riley Mahar on the conspiracy count and the various substantive counts.
B.
Riley Mahar also asserts as error the trial court's inclusion in the jury charge
C.
As his final ground of error, Riley Mahar asserts that the trial court erred in denying his motion for severance and a separate trial. In this circuit, the "general rule in conspiracy cases is that persons indicted together should be tried together." United States v. Licavoli, 725 F.2d 1040, 1051 (6th Cir.), cert. denied, 467 U.S. 1252, 104 S.Ct. 3535, 82 L.Ed.2d 840 (1984) (citing United States v. Robinson, 707 F.2d 872, 879 (6th Cir.1983)). In order to establish that the trial court abused its discretion, a defendant "must make a strong showing of prejudice" and "must demonstrate an inability by the jury to separate and treat distinctively evidence that is relevant to each particular defendant on trial." United States v. Day, 789 F.2d 1217, 1224 (6th Cir.1986) (quoting United States v. Gallo, 763 F.2d 1504, 1525 (6th Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 826, 88 L.Ed.2d 798 (1986)).
We conclude that Riley Mahar has failed to establish "actual prejudice" by the denial of his motion for severance. Most significantly, the jury clearly demonstrated its ability to consider the evidence separately against the various defendants. Thus, although Shannon Mahar was convicted on all but one of the mail fraud counts, and the Clinic on all 15 of the mail fraud counts, Riley Mahar was exonerated on all the mail fraud charges.
V.
A.
The Clinic, as its first asserted ground of error, contends that "governmental misconduct which occurred throughout the trial" denied the defendants a fair trial. Included among the claims of improper conduct is government counsel's alleged comment during closing argument on the defendants' failure to testify. Defendant cites the following statements of government counsel in support of this claim:
In considering these comments, we note first that the court expressly informed the jury that the law does not compel a defendant in a criminal case to take the witness stand and testify. Moreover, it is determined that the statements cited above were, at most, "indirect comments," and are thus analyzed under this four part test:
Spalla v. Foltz, 788 F.2d 400, 404 (6th Cir.1986) (emphasis in original).
Applying each of these factors in this case, we find that the comments cited above did not in any way impinge upon defendants' Fifth Amendment right against self-incrimination, and thus provide no basis for overturning their convictions.
The remaining asserted "prosecutorial misconduct" is judged in accordance with the following standard:
United States v. Thomas, supra, 728 F.2d at 320 (quoting United States v. Lichenstein, 610 F.2d 1272, 1281 (5th Cir.), cert. denied sub nom., Bella v. United States, 447 U.S. 907, 100 S.Ct. 2991, 64 L.Ed.2d 856 (1980)). We have considered the several asserted claims of prosecutorial misconduct, and upon review of the entire record conclude that any improper conduct of government counsel that occurred at trial constitutes harmless error. See United States v. Krebs, 788 F.2d 1166 (6th Cir.1986).
B.
Finally, two related claims of error are raised by the Clinic. First, it is claimed that evidence admitted at the trial constituted an impermissible variance from the charges in the indictment. As this court recently observed, "a conviction cannot stand if it is based on an offense which is not charged in the grand jury's indictment." United States v. Gray, supra, 790 F.2d at 1297 (citing United States v. Miller, 471 U.S. 130, 105 S.Ct. 1811, 1819, 85 L.Ed.2d 99 (1985)).
Upon consideration of the entire record, we are convinced that any error in admitting testimony or evidence outside the scope of the indictment was harmless. See United States v. Ismail, 756 F.2d 1253, 1259-61 (6th Cir.1985). Therefore, we reject this claimed ground of error.
Similarly, we reject the defendants' claim that the trial court's denial of their motion for a bill of particulars constitutes reversible error. The indictment set forth the charges in considerable detail, and the denial of the request for a bill of particulars was not an abuse of the trial court's discretion. United States v. Largent, 545 F.2d 1039, 1043-44 (6th Cir.1976), cert. denied, 429 U.S. 1098, 97 S.Ct. 1117, 51 L.Ed.2d 546 (1977); United States v. Birmley, 529 F.2d 103, 108 (6th Cir.1976).
VI.
We held in part II.C. that Exhibit 22A was improperly admitted at trial. It is now determined that the case must be remanded to the trial court to conduct the inquiry that should have been made under Rule 801(d)(2)(E). An appellate court is not the proper forum to conduct the needed factual hearing required under Enright and Vinson. Recently faced with a nearly identical problem in United States v. Holloway, 731 F.2d 378, 382 (6th Cir.1984), the court remanded the case to the district court "to make the appropriate Enright finding." We believe this is the proper
In the event the trial court determines on remand that the notes in Exhibit 22A were made in the course of and in furtherance of the conspiracy,
If the trial court determines that the notes were not authored by coconspirators in the course of and in furtherance of the conspiracy, we conclude that the conviction of defendant Shannon Mahar on count 17 and counts 18 and 20-32, and of defendant Clinic on counts 18-32, must be set aside and a new trial granted the defendants on these counts.
We reach this conclusion — that such convictions must be reversed if it is determined that the notes were not written in the course and in furtherance of the conspiracy — under the "harmless error" analysis of Chapman v. California, supra. Applying this test in the instant case, we conclude, in light of the incriminating nature of the statements contained in Exhibit 22A and the government's emphasis on such statements during closing and closing rebuttal argument, as reviewed above, that the admission of Exhibit 22A was not harmless beyond a reasonable doubt. Thus, the statements contained in the notes bear directly on the alleged scheme to defraud Medicaid and Blue Cross/Blue Shield,
Likewise, the statements in Exhibit 22A may have influenced the jury in convicting Shannon Mahar under count 17 of conducting a continuing criminal enterprise. The charges in the mail fraud counts, on which Shannon Mahar stands convicted, are clearly intertwined with the continuing criminal enterprise charge. Having concluded that the admission of Exhibit 22A was not harmless beyond a reasonable doubt as to the mail fraud counts, we similarly conclude that admission of the exhibit was not harmless beyond a reasonable doubt as to count 17.
In contrast, nothing in the content of the notes in Exhibit 22A relates to or supports the convictions for distribution of controlled substances charged in counts 1 through 16. The convincing and overwhelming nature of the proof of guilt against all three defendants on the count 1
VII.
In summary, the convictions of the three defendants are affirmed on the count 1 conspiracy charge. As to the respective convictions of each defendant on substantive counts 2 through 16, the convictions are affirmed, except as to the count 13 conviction of each defendant, which is vacated and set aside, and the count 14 conviction of defendants Riley Mahar and the Clinic, which convictions are vacated and set aside.
With respect to the count 17 conviction of defendant Shannon Mahar, and the mail fraud convictions of defendants Shannon Mahar and the Clinic, these are remanded to the trial court for further proceedings consistent with part VI. of this opinion.
FootNotes
As the trial court correctly instructed the jury, it is not a violation of this section for "a physician to prescribe and a pharmacist to fill prescriptions for controlled substances in the usual course of medical practice for legitimate medical purposes." The basis of the court's instruction is 21 C.F.R. § 1306.04.
Moreover, the conduct of Walter V. Mahar is also pertinent in this case as it bears on all the remaining counts against the Clinic. As one of the Clinic's managers, Walter V. Mahar's actions could be imputed to the Clinic on the substantive distribution counts and the various mail fraud counts.
In the instant case, each appellant played an important, although different, role in the conspiracy. Riley Mahar, for example, spent most of his time in the pharmacy, and had little to do with day-to-day management of the remainder of the Clinic. Nevertheless, his role as the pharmacist and manager of the pharmacy was an essential role in the overall drug distribution conspiracy.
This language sufficiently conforms to Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946).
Thus, in clear words the Clinic and Shannon Mahar, as its owner and president, boldly told every Clinic patient that in order to get "treatment," i.e. drug prescriptions, the patients must submit to the completion of their tests.
Had government counsel similarly intended to use Exhibit 22A solely for non-hearsay purposes, and not to prove the truth of the matters asserted, then the government's intent should have been explained to the court and defense counsel so that an appropriate limiting instruction could have been requested.
The court responded:
On February 7, 1985, at the conclusion of the handwriting expert's testimony, the government rested. Shortly thereafter, the trial judge made the following statement:
See also United States v. Howard, 770 F.2d 57, 59 (6th Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 1213, 89 L.Ed.2d 325 (1986).
United States v. Vinson, 606 F.2d 149, 152 (6th Cir.1979), cert. denied, 444 U.S. 1074, 100 S.Ct. 1020, 62 L.Ed.2d 756 (1980), sets forth "alternative" procedures that a district court may adopt in "structur[ing] conspiracy trials." It is not clear which of the three procedures the trial judge sought to follow in this case, although it appears the court may have attempted to conform to the third, in which the judge "may admit the hearsay statements subject to later demonstration of their admissibility by a preponderance of the evidence." Vinson, 606 F.2d at 153.
At this point, counsel for defendant Oliver raised another subject and the court made no finding.
Thereafter, government counsel brought to the attention of the court and defense counsel an affidavit of Dr. Kay. Government counsel explained:
This representation and others in defendant's brief regarding what Dr. Kay would have stated at trial are outside the trial record and are thus not considered on this appeal. As seen, the proffer made to the trial court was limited to the statement set forth above.
The need to make any further proffer became important when the trial court denied defense counsel's request to "make a record of what we would have elicited by having Dr. Kay respond to questions outside the presence of the jury." Even though denied the opportunity to make a record through testimony of Dr. Kay, defense counsel nonetheless could have made a representation for the record regarding Dr. Kay's expected testimony.
Because the trial court properly instructed the jury that Dr. Kay's statement could not be considered against any other defendant, it is apparent that Dr. Kay was not a "witness[] against" them within the meaning of the Sixth Amendment's Confrontation Clause. We therefore reject the claim that the Confrontation Clause was offended by the quashing of the Dr. Kay subpoena.
In determining that Miranda warnings were not required, the trial judge erroneously focused on whether Riley Mahar's statement was "voluntary," rather than on whether he was "in custody" for Miranda purposes. Had the trial judge addressed the custody issue, any finding that Riley was not in custody at the time of his interview would have been "clearly erroneous."
Defendant Shannon Mahar's other double jeopardy claim, that his convictions under 21 U.S.C. § 841(a)(1) are lesser included offenses of 21 U.S.C. § 848, is precluded by Garrett v. United States, 471 U.S. 773, 105 S.Ct. 2407, 85 L.Ed.2d 764 (1985).
Comment
User Comments