United States v. Frankel

1

UNITED STATES OF AMERICA, v. PERRY FRANKEL, Defendant.

No. 22-CR-0180(JS)

United States District Court, E.D. New York

October 26, 2023

For United States: Patrick J. Campbell, Esq.

Kelly M. Lyons, Esq.

For Defendant: Timothy Sini, Esq.

Michal E. Cantor, Esq.

Neil Patrick Diskin, Esq.

JOANNA SEYBERT, U.S.D.J.

Perry Frankel (“Defendant”) moves: (1) to compel the discovery of purported Brady material; (2) to quash the Government's grand jury subpoena; and (3) for a bill of particulars relating to the Government's charges. (See Motion, ECF #39.) For the reasons below Defendant's: motion to compel the discovery of purported Brady material is DENIED; motion to quash the Government's Grand Jury Subpoena is GRANTED; and motion for a bill of particulars is GRANTED in part and DENIED in part. The Government is directed to provide Defendant with a chart as described infra.

BACKGROUND^[1]

I. Summary of the Grand Jury Subpoena and Indictments

On or around March 30, 2022, Advanced Cardiovascular Diagnostics PLLC (“Advanced Cardio”), a company owned by Defendant, was served a grand jury subpoena (“Subpoena”) seeking records relating to the Defendant's business and billing practices from March 1, 2020 through the date of the Subpoena's service. A few weeks later, on April 19, 2022, Defendant was charged by a three-count indictment with health care fraud (the “First Indictment”). (See ECF # 1.) On June 27, 2023, Defendant was charged by a seven-count superseding indictment with health care fraud and engaging in unlawful monetary transactions (the “Superseding Indictment” or “S-1”). (See ECF # 35.) On September 30, 2022, the Subpoena issued to Advanced Cardio expired. (Opp'n, ECF #42, at 16).

The alleged criminal scheme arises in connection with Defendant's operation of mobile Covid-19 testing sites (“Mobile Testing Sites”) during the Covid-19 pandemic. In particular, the Government alleges that Defendant fraudulently submitted billing claims to Health Care Benefit Programs^[2] for services rendered to persons who received Covid-19 tests at Mobile Testing Sites. According to the Government, Defendant billed for “evaluation and management” services which were “medically unnecessary, not provided as represented and illegible for reimbursement.” (S-1 at 9.) For some of the billing claims, the Government alleges Defendant was not present in New York State on the date those services were purportedly provided. (Id.)

Defendant billed $17 million in allegedly fraudulent claims, resulting in his receipt of approximately $3 million in payments from Health Care Benefit Programs. Id. Defendant is also charged with engaging in unlawful monetary transactions by using the proceeds of the alleged scheme to make purchases in amounts greater than $10,000. (Id. at 11.)

II. Procedural History

a. Discovery

The parties agree the Government has produced voluminous discovery in this matter. (Support Memo, ECF # 39-18, at 2; Opp'n at 12.)

In particular, the Government has provided Defendant with: (1) the names of the five individuals whose insurance claims are charged in the Superseding Indictment; (2) the initials, dates of service, location of service, and insurance information for an additional beneficiary the Government may call at trial; and (3) over a dozen spreadsheets, totaling nearly 310,000 pages, which catalogue hundreds of thousands of patient claims, identified by claim number and date, and at least one of which contains diagnosis codes, procedure codes, and payment status information. (Support Memo at 15, n.6; Opp'n at 12-13).

b. Meetings Amongst the Parties

Throughout November and December 2022, the parties discussed Defendant's belief that, during the Covid-19 pandemic, he was not required to be present in New York State in order to bill for services rendered by non-physician practitioners working under his remote supervision. This was due to a change in applicable regulations, which Defendant calls the “Supervision Rule Change”. Following the November and December 2022 discussions, in January 2023, the Government interviewed its experts about the Supervision Rule Change, and subsequently produced documents memorializing those interviews. (DX 11, 12.)

III. The Instant Motions

Defendant now moves: (1) to compel the discovery of purported Brady material; (2) to quash the Government's Subpoena; and (3) for a bill of particulars relating to the Government's charges. (See Support Memo.) In particular, the Defendant seeks the following:

(A.) “Brady” Material: All information and material relating to the Supervision Rule Change, including but not limited to: (1) When the prosecutors first learned of the Supervision Rule Change;

(2) When the prosecutors first discussed [said change] with anyone else, including each other, supervisors, Franco [Government's case agent], other government officials, witnesses, etc.;

(3) The content of those communications;

(4) The views, opinions, and/or positions of government officials regarding the Supervision Rule change and its implementation and/or enforcement; and

(5) Contact information for government employees who have provided an opinion or view on the Supervision Rule change, or who have told the Government that they were not aware of it.

(Id. at 13.)

(B.) An Order Quashing the Subpoena: “if the term of the grand jury has expired and . . . regardless of whether the grand jury term has expired, because the Subpoena improperly seeks information in preparation of trial.” (Id. at 23.)

(C.) Bill of Particulars: “identifying each claim it intends to prove was fraudulent, including the date of service, the claim number, the patient's name, the services and amount billed, the payor, the amount paid, and the reason why the Government is alleging the claim is fraudulent.” (Id. at 19.)

DISCUSSION

I. Motion to Compel “Brady” Material

Defendant moves for an order compelling the production of all Brady material relating to the Supervision Rule Change, including all communications “by and among government officials . . . who have provided an opinion or view on the Supervision Rule Change, or who have told the Government that they were not aware of it.” (Id. at 10.) Defendant contends the Government is obligated to provide this information under Brady v. Maryland, 373 U.S. 83 (1963), because “it is likely that during those communications, government[] officials expressed their ignorance of the Supervision Rule Change or their views on its interpretation.” (Id. at 12.) The Government's purported ignorance on the Supervision Rule Change is “highly probative” according to Defendants, because it “shows how easily a physician or billing specialist could be confused by and/or unaware of the unprecedented number of regulatory changes and CPT coding rules that were constantly being implemented and adjusted during the course of the pandemic.” (Id.) The Defendant seeks to use the Government's purported ignorance as to the Supervision Rule Change to show “that it is not reasonable to infer criminal intent from not complying with a complicated, ever-changing set of rules that the Government cannot even get right.” (Id.)

The Government counters Defendant's arguments, noting the allegations in the Superseding Indictment do not concern whether Defendant supervised his personnel during the relevant time period. (Opp'n at 5.) According to the Government, “the defendant is not charged with committing health care fraud simply because he was not present at . . . COVID-19 mobile testing sites or because he violated regulations.... [H]e is charged with billing $17 million to federal health care programs for services that were not provided either by him, as the claims to Insurers represented they were, or his employees, whom he claims he supervised.” (Id.) The Government further argues “[i]nternal government documents prepared in connection with prosecuting a case . . . are explicitly exempt from disclosure under Federal Rule of Criminal Procedure 16” and, to the extent Defendant requests documents from other governmental agencies, such documents are not in the Government's “possession, custody, or control” and thus are not subject to disclosure. (Id. at 7-8.)

A. Legal Standard

“The basic rule of Brady is that the Government has a constitutional duty to disclose favorable evidence to the accused where such evidence is ‘material' either to guilt or to punishment.” United States v. Coppa, 267 F.3d 132, 139 (2d Cir. 2001). Accordingly, a Brady violation occurs only where the Government fails to turn over evidence that “could reasonably [have been] taken to put the whole case in such a different light as to undermine confidence in the verdict.” Id. (collecting cases); United States v. Schlesinger, 439 F.Supp.2d 255, 257 (E.D.N.Y. 2006) (“Information is material under Brady if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.”) (internal quotation marks and citations omitted); United States v. Payne, 63 F.3d 1200, 1208 (2d Cir. 1995).

B. Analysis

The Court finds the information sought by Defendant does not meet the materiality requirements of Brady, and accordingly need not be disclosed. It bears repeating that Defendant is charged with health care fraud by billing for medical procedures that were either unnecessary or not provided at all. (S-1 at 9.) While the Superseding Indictment does briefly mention that the Defendant was not in New York State at the time some of the alleged fraud took place (id.), there is no allegation in the Indictment that the fraud occurred because the Defendant was not in New York State or ...