United States v. Salomon E. Melgen (11th Cir. July 2020)

The Federal Docket

Fraud/Materiality – The district court did not err in declining to use the defendant’s propose jury instruction defining materiality based on “the effect on the likely or actual behavior of the recipient of the alleged misrepresentation.”

New trial – Under de novo review, the district court did not err in denying defendant’s motion for new trial under Brady and Federal Rule of Criminal Procedure 33 since the evidence was not new and solely went to the purposes of impeaching a witness.

In a healthcare fraud appeal, Solomon Melgen was convicted on 67 counts of defrauding Medicare by purposefully misdiagnosing patients and prescribing unnecessary treatments and medications. He was sentenced to 17 years in prison and raised several challenges.

First, the Court agreed that the district court did nor err in using the pattern jury instruction on materiality stating that false claims/statements are material if they “have a natural tendency to influence” or are “capable of influencing” the “decision of a decision-making body to which it is addressed.”  Melgen argued that the district court should have referred to the heightened standard for materiality based on the language from the Supreme Court’s decision in United States v. Escobar, which held that, in the context of “implied false certifications” on claims, materiality was determined based on “the effect on the likely or actual behavior of the recipient of the alleged misrepresentation.” The Court reasoned that the language in Escobar did not change the standard for materiality, or at least in the context of criminal fraud statutes.

Next, the defendant raised several challenges to admission of summary charts showing that Melgen’s diagnosis and treatment practices were “markedly different from similarly situated physicians.”  The Court held that the charts were supported by evidence in the record, including an expert witness who explained the comparison criteria and testimony from the chart preparer.  The Court also rejected Melgen’s Confrontation Clause argument since the summary chart was based on non-testimonial records and did not introduce a Confrontation Clause issue.

The Court further held that the district court did not abuse its discretion in allowing in evidence of multi-dosing because it was probative of Melgen’s profit motive or in denying Melgen’s motion for new trial since a curative jury instruction was issued immediately when it became known a witness testified falsely.  The Court also held the district court did not err in providing copies of the indictment to the jury since there was no evidence of an effect on Melgen’s substantial rights, and the court repeatedly instructed the jury that an indictment is not evidence of guilt.  The Court held that the district court did not abuse its discretion in ruling that there was no witness intimidation after conducting a hearing and determining that the witness’ testimony was not altered.

The Court also upheld the district court’s denial of Melgen’s motion for new trial under Brady since testimony by the government’s witness that was useful to Melgen’s defense was not “new evidence,” nor would it have changed the outcome of the trial.  The Court also held under Rule 33 that the new evidence cannot be introduced solely for the purpose of impeaching a government witness.

Regarding sentencing, the Court held that the district court’s loss amount calculation was not clear error since the sample patient group it relied on was representative of Melgen’s patient population and was only a portion of the timeframe covering Melgen’s scheme.  The Court also upheld the district court’s sentence as reasonable and the downward adjustment appropriately considered Melgen’s age, lack of criminal history, and his medical conditions.

Appeal from the Southern District of Florida

Opinion by Grant, joined by Martin and Lagoa

Click here to read the opinion.

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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