United States v. Walter-Eze

869 F.3d 891

UNITED STATES of America, Plaintiff-Appellee,

v.Sylvia Ogbenyeanu WALTER-EZE, AKA Sylvia O Okam, Defendant-Appellant.

No. 15-50315

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 7, 2017 Pasadena, California

Filed August 25, 2017

David J. Bernstein (argued), Law Office of David Jay Bernstein PA, Deerfield Beach, Florida, for Defendant-Appellant.

Ellen R. Meltzer (argued), Special Counsel; Joanna K.W. Bowman, Alexander F. Porter, and Blanca Quintero, Assistant United States Attorneys; Sung-Hee Suh, Deputy Assistant Attorney General; Leslie R. Caldwell, Assistant Attorney General; Fraud Section, Criminal Division, United States Department of Justice, Washington, D.C.; for Plaintiff-Appellee.

Before: Sidney R. Thomas, Chief Judge, Jacqueline H. Nguyen, Circuit Judge, and Carol Bagley Amon,^** District Judge.

Concurrence by Judge Nguyen

OPINION

AMON, District Judge:

Appellant Sylvia Walter-Eze stands convicted after a jury trial of one count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349 (Count 1); four counts of health care fraud in violation of 18 U.S.C. § 1347 (Counts 2, 3, 5, and 6); and one count of conspiracy to pay and receive health care kickbacks in violation of 18 U.S.C. § 371 (Count 7). She was acquitted of one count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1347 (Count 4). Walter-Eze was sentenced to 97 months imprisonment and three years of supervised release and was ordered to pay restitution of $1,939,529.27.

On appeal, Walter-Eze raises challenges to her conviction and sentence on the following grounds: (1) a conflict of interest created by the district court when it conditioned an adjournment on counsel's paying jury costs and witness fees violated her Sixth Amendment right to counsel, and (2) the district court erred (a) in refusing to grant defense counsel's morning-of-trial request for a continuance; (b) in giving a deliberate ignorance instruction; (c) in instructing the jury on the burden of proof; (d) in calculating the loss under United States Sentencing Guideline ("U.S.S.G.") § 2B1.1(b)(1) ; (e) in applying a leadership role under U.S.S.G. § 3B1.1(a) ; and (f) in calculating restitution. Because we conclude that none of these claims is meritorious, we affirm.

BACKGROUND

I. Pre-Trial Continuances

Walter-Eze was initially represented by a court-appointed attorney for whom the district court granted three separate trial continuances, on June 27, 2014 (continuing trial from July 1, 2014, to November 12, 2014), on November 4, 2014 (continuing trial to January 13, 2015), and on January 7, 2015 (continuing trial to March 3, 2015). In granting the last continuance, the district court found that counsel had not set forth any good cause for failing to be prepared for trial and found that counsel had not been diligent in handling the case. Nonetheless, in the interest of justice, the district court granted the third continuance, admonishing the parties that "you're going to have a really hard time" convincing the court to continue the trial any further.

After three continuances over nearly eight months and only two weeks before trial, Walter-Eze filed a motion on February 17, 2015, to substitute in Christopher Darden and Oma Nkele as counsel. On February 18, 2015, the district court held a hearing on the motion. During this hearing, the district court expressed concern that Walter-Eze's last-minute request to change attorneys was an attempt to delay trial even further. The district court therefore requested that before being substituted in, new counsel guarantee that they would be prepared to proceed on the current trial date, or at the latest, March 10, 2015. Although at first asserting that she would need another three months in order to deal with the over 21,000 pages of documents at issue, Nkele made an express commitment that she and the firm of Christopher Darden would be prepared to try the case no later than March 10, 2015. On this representation, the district court allowed the substitution, retained the existing trial date of March 3, 2015, and instructed counsel to let it know if they needed the extra week until March 10, 2015. On February 25, 2015, Walter-Eze filed a Motion to Continue Trial and the district court continued trial to March 10, 2015.

II. Conflict of Interest

On the morning of the first day of trial, March 10, 2015, Walter-Eze filed an Emergency Motion to Continue Trial. Appearing in court, defense counsel requested a continuance from March 10, 2015, to April 7, 2015, due to Nkele's inability to prepare for trial as a result of an illness and alleged problems with the discovery materials. The district court reminded counsel of their prior representation that they would be prepared to try the case on March 10. The district court also expressed suspicion that Walter-Eze had used the substitution of counsel and other events in the preceding month as a delaying tactic, knowing that this was the only way it would agree to another continuance. Based on the events that had transpired, the district court found that defense counsel had made misrepresentations to the court.

The district court nonetheless cautioned counsel that if they were unprepared, it was their duty to not proceed and trial would be continued to April 28, 2015, conditioned on counsel's paying the costs incurred by the continuance, including witness and jury fees, which totaled approximately $3,600. Alternatively, the district court stated that if counsel could affirm that they could adequately represent their client, trial would commence that day and no fees would be assessed. Darden expressed his concern that the proposed fees might require reporting to the California State Bar Association.¹ The district judge replied that, because he understood the reporting rule to only apply to sanctions, he would characterize the costs as fees if that would help avoid the issue. Recognizing the difficult position that counsel was in, the district court instructed counsel to discuss the matter before making their decision. After further discussion—and an initial statement that counsel were not prepared to try the case—Darden stated that he would be prepared to proceed but proposed that the district court empanel the jury that day (March 10), and then continue trial for two days. During the two days, Darden stated that he would familiarize himself with Nkele's portion of the case in the event she became unavailable due to physical limitations. Based on Darden's representation that he would be prepared to proceed on March 12, 2015, the district court granted the fifth continuance of trial to March 12, 2015.

III. Evidence at Trial

At trial, witnesses called by the government testified to a five-year scheme run by Walter-Eze through her company Ezcor-9000 ("Ezcor") to fraudulently bill Medicare and Medi-Cal for durable medical equipment ("DME") provided to patients who had no need for the devices.² Recruiters would be paid kickbacks to find patients and doctors would be paid for prescriptions. Among the witnesses called were Wilmer Guzman and Elder Aguilar, workers for Walter-Eze, who explained the illegal kickback scheme and the provision of the DME; Dr. Edna Calaustro, who was paid by Ezcor to write prescriptions for unnecessary devices; and several beneficiaries (or their relatives) whose receipt of unnecessary devices served as the predicates for each of the substantive claims in Counts 2 through 6 of the indictment. The federal and state investigators who worked on the Ezcor case also testified.

Walter-Eze testified in her own defense. No other witnesses were called by the defense.

The majority of the government's evidence at trial pertained to one type of DME in particular—power wheelchairs—for which Medicare paid a particularly high rate of reimbursement and which, in order to be prescribed, required doctors to determine that their patients had such limited mobility that they lacked the ability to perform activities of daily living in the home. Over 50% of the $3,432,776 of claims that Walter-Eze submitted to Medicare and Medi-Cal through Ezcor were for these high-value power wheelchairs and wheelchair accessories. The fraudulent claims were not limited to these items, but included additional DME, such as hospital beds and knee and back braces, which accounted for an additional 33% of Ezcor's business. Walter-Eze would pay recruiters such as Guzman kickbacks for each prescription that they brought in to Ezcor; the kickback amount would vary based on the reimbursement value of the piece of DME. Accordingly, the highest kickbacks were paid for power wheelchair prescriptions, followed by hospital beds, and knee and back braces. From January 2007 through early March 2012, Ezcor submitted $3,432,776 in reimbursement claims to Medicare and was paid $1,866,261. During this same period, Ezcor submitted claims to Medi-Cal totaling $89,011 and was paid $73,269.

Walter-Eze denied that she paid kickbacks to recruiters, instead characterizing them as commissions paid to independent contractors. She also denied paying any money to Dr. Calaustro for prescriptions.

IV. Jury Instructions

During the charging conference, the government requested a deliberate ignorance instruction based on Guzman's testimony that he told Walter-Eze that Medicare beneficiaries were only accepting the power wheelchairs because Guzman was offering them money, to which Guzman said Walter-Eze replied "I don't care. Just do what you have to do." The district court replied that, "if that's what she said, that's part of the conspiracy," and thus refused to give that instruction. Based on this ruling, the government's summation focused on Walter-Eze's actual knowledge of the fraud, and the defense's summation centered almost entirely on the argument that Walter-Eze was a naïve businesswoman who unwittingly became involved with unsavory characters who were violating the law. After the defense...