After a
federal jury “convicted Yennier Capote Gonzalez of five counts of health care
fraud in violation of 18 U.S. Code § 1347, one count of money laundering in
violation of 18 U.S. Code § 1957, and two counts of aggravated identity
theft in violation of 18 U.S. Code § 1028A” and he was sentenced him to
“67 months" in prison, he appealed his conviction to the U.S. Court of Appeals for the 6th Circuit. U.S. v. Gonzalez, 2014 WL 1257940
(2014).
As the
Court of Appeals noted at the beginning of its opinion, “Gonzalez appeal[ed]
his convictions and sentence on many grounds, most of which are meritless.” U.S. v.
Gonzalez, supra. This post is primarily concerned with one of his arguments
on appeal, but also notes the outcome of another, which proved
more successful.
According
to the opinion, the facts that led to the prosecution began when Gonzalez lived
in Miami:
He bought a tract of land at. . . . 179 Buck Branch Lane,
which included a run-down barn. Gonzalez later defaulted on the [mortgage for
that property, after which] the lender foreclosed and sold [it] at auction in
June 2010. . . .
That same
month . . . Gonzalez submitted a Tennessee corporate charter for Gainesboro
Ultimate Med Service Corporation, which listed Gainesboro Med's mailing address
as 179 Buck Branch Lane. The charter also listed the same address for Gonzalez,
and listed him as Gainesboro Med's president.
On July 1,
Gainesboro Med applied for a national provider identification (NPI) number,
which are unique identifiers issued by the Centers for Medicare and Medicaid
Services to healthcare providers such as doctors and medical clinics. This
application listed Gainesboro Med's address at 179 Buck Branch Lane and its
authorized official as Gonzalez. Weeks later, Gonzalez obtained a business
license from Jackson County, Tennessee, to operate Gainesboro Med as an `online
medical billing’ company. Once again, Gainesboro Med's listed address was 179
Buck Branch Lane.
On July
13, Manuel Trujillo sent a text message to cellphone number (305) 420-8152. The
text contained only the name `Tidence Prince, M.D.’ and an NPI number. Two days
later, Trujillo sent a series of text messages to the same phone number that
contained the names Orlando Martinez, Jorge Valdez, Monica Rodriguez, and
Rosemary Mir.
On July
16, Gonzalez opened a business-checking account for Gainesboro Med with Regions
Bank in Cookeville, Tennessee. He listed Gainesboro Med's address as 179 Buck
Branch Lane and made himself the account's only authorized signatory. Gonzalez
also listed his phone number as (305) 420–8152 -- the number for the cellphone
that had received the text messages on July 13 and 15.
Over the next few weeks, Gainesboro Med submitted several
online claims to two . . . insurance companies, Wellpoint and Cigna. Gainesboro
Med sought reimbursement for injections that were purportedly administered to
the persons listed in the July 15 text messages: Orlando Martinez, Jorge Valdez,
Monica Rodriguez, and Rosemary Mir. Each claim included Dr. Prince's NPI number
and listed him as the physician who administered the injections. In fact,
however, most of the patients were fictitious and none of the injections were
performed.
On August 12, Cigna mailed to 179 Buck Branch Lane a $38,116
check payable to Gainesboro Med for medical services purportedly provided to
Rosemary Mir and Monica Rodriguez. Five days later, Gainesboro Med deposited
that check into its checking account at Regions Bank in Cookesville, Tennessee.
The check constituted essentially all of the funds in Gainesboro Med's account.
Two days
later, Gonzalez (the account's only signatory) wrote a check to Manuel Trujillo
for $2000 and another check in the same amount to himself, which he deposited
in his personal account. On August 23, Gonzalez visited a Regions Bank in Miami
and obtained a $14,400 cashier's check, payable to his landlord, drawn from the
Cigna funds in the Gainesboro account. He also tried to wire Trujillo the remaining
$17,000 from the Regions account, but the bank refused because the funds had
been deposited too recently.
Meanwhile,
Cigna reported Gainesboro Med as a suspicious provider to Special Agent Robert
Turner at the Department of Health and Human Services. Turner investigated,
first by visiting 179 Buck Branch Lane. There he found only a barn and a
mailbox, which contained mail addressed to Gainesboro Med.
Turner
also learned that the patients whom Gainesboro Med supposedly had treated
resided at 140 Lonesome Point Lane. He drove there and found only a mailbox and
the unfinished house, which consisted of a foundation, walls, and a cover for a
roof. The mailbox contained mail from Wellpoint and Cigna.
On August 24, Turner called Carol Sawaya, a manager at Region
Bank's Miami office, and explained that he was investigating Gainesboro Med and
Gonzalez. With Sawaya's assistance, Turner then coordinated a plan to arrest
Gonzalez at the bank. The next day, a Region's employee called Gonzalez and
told him his $17,000 wire transfer had been approved and that he needed to come
into the bank. Gonzalez did so and gave Sawaya his driver's license and bank
card. Then Turner arrested him.
U.S. v. Gonzalez, supra. The press
release you can find here gives a few more details about the prosecution.
Gonzalez’s first argument on appeal was that the prosecution
violated his
4th Amendment right to be free
from unreasonable searches when it obtained the July 13 and 15 text messages
from the phone company without a warrant. The phone number that received the
messages was the same one that Gonzalez had listed as his contact number when
he opened a Regions Bank account for Gainesboro Med. In fact, . . . that phone
number was assigned to an account registered to someone else.
The [U.S. District Court Judge
who presided over his trial] denied Gonzalez's motion to exclude on the grounds
that he lacked standing to challenge the admission of text messages retrieved
from a phone account that was registered to someone else.
U.S. v. Gonzalez, supra.
As Wikipedia explains, conduct violates a citizen’s 4th Amendment right to
be free from “unreasonable” searches and seizures if (i) the conduct at issue
constituted a “search” and (ii) the search
was carried out without the authorization of a search warrant or one of the
applicable exceptions to the 4th Amendment’s default warrant requirement. As Wikipedia also notes, to constitute a 4th
Amendment “search”, the government conduct at issue has to have (i) violated a
place or a thing in which the person had an “actual, subjective expectation of
privacy” and (ii) society is willing to accept that subjective expectation of
privacy as objectively reasonable. In Katz v. U.S., 389 U.S. 347 (1967), the
Supreme Court articulated this two-part standard for defining a 4th
Amendment “search.”
That brings us back to Gonzalez. The Court of Appeals began its analysis of
his 4th Amendment argument concerning the text messages by noting
that
[t]o establish standing for the
purposes of the 4th Amendment, Gonzalez must show, first, that `he had an
actual, subjective expectation of privacy’ in the text messages; and second,
that his expectation was `objectively reasonable.’ U.S. v. Smith, 263
F.3d 571 (U.S. Court of Appeals for the 6th Circuit 2001).
Reasonable expectations of privacy arise from `a source outside of the 4th
Amendment, either by reference to concepts of real or personal property law or
to understandings that are recognized and permitted by society.’ U.S. v. Jones, 132 S.Ct. 945 (2012). . . .
U.S. v. Gonzalez, supra.
The Court of Appeals then found that the U.S. District Court
Judge did not err in rejecting Gonzalez’s challenge to the use of his text
messages:
Gonzalez has made virtually no effort
to carry his burden here. He offers merely the conclusory assertion that `[c]learly
[he] had a legitimate expectation of privacy in his telephone and telephone
records.’ But the phone account in fact was not `his,’ and he made no effort to
show that he exercised any control over the account (which belonged to someone
else) from which the text messages were obtained. Thus, whatever the particular
standard might be for establishing standing for purposes of contesting the
government's retrieval of records from a cellphone account, Gonzalez has not
met it here.
U.S. v. Gonzalez, supra.
Despite the fact that he also struck out on most of the
other arguments he made on appeal, Gonzalez did win on one of them: He argued that his conviction for aggravated
identity theft in violation of 18 U.S. Code § 1028A(a)(1) was not supported by
sufficient evidence. U.S. v.
Gonzalez, supra. In addressing that argument, the Court of
Appeals explained that to convict Gonzalez of this crime, the prosecution was
required to prove
that he `knew that the means of identification at issue
belonged to another person.’ Flores–Figueroa v. U.S., 556 U.S. 646(2009). Here, the means of identification at issue was Dr. Prince's NPI number.
Thus, for Gonzalez's conviction to stand, the government must have proved that
Gonzalez knew that Prince was a real person.
The
government's proofs on this issue were sparse. The government concedes that it
has no direct evidence that Gonzalez knew that Prince was a real person, and
that the only information that Gonzalez received about Prince was the July 13
text message that contained Prince's name along with an NPI number. But the
government argues that the jury could infer that Gonzalez knew that Dr. Prince
was a real person nonetheless. The government summarizes its argument as
follows:
`[Gonzalez]
created the corporation Gainesboro Ultimate Med Service by filing for a
corporate charter for on June 29, 2010. Later in July, 2010, he applied for a
business license for Gainesboro Med. (R. 156, TTR I, Page ID# 750–752,
767–769). [His] actions, while setting up the corporation, demonstrate [Gonzalez]
had knowledge that Gainesboro Med had to be a real corporation in order to
receive an NPI number. He knew he could not merely fill in the name of a
corporation on the NPI application without the appropriate documentation to
substantiate the existence of the corporation. From this, a jury could
reasonably infer [Gonzalez] knew that the doctor's name and NPI number provided
on the claim forms must be that of a real person.’
Thus, in essence, the government argues that Gonzalez's own experience
in obtaining an NPI number for Gainesboro Med shows Gonzalez knew that Dr.
Prince could have obtained an NPI number only if he was a real person. But that
inference is hardly compelling. True, the government presented evidence that
the IRS `validates’ NPI numbers for `organizations’ every six months.
But the government did not present any proofs that Gonzalez
was aware of those procedures. More to the point, the government did not
present evidence that the same or similar procedures existed for validating NPI
numbers assigned to doctors -- much less that Gonzalez was aware of those procedures.
So far as Gonzalez knew -- and indeed so far as the record shows here -- the
possibility remains that a fraudster could obtain an NPI number, at least for a
while, for a doctor who is fictitious.
U.S. v. Gonzalez, supra.
The Court
of Appeals was not convinced, finding that the evidence in this case was
considerably weaker than the proofs found sufficient in cases
involving aggravated identity theft. In one case, the defendant possessed the
victim's birth certificate and credit reports, in addition to the Social
Security number that was the means of identification used there. U.S.
v. Valerio, 676 F.3d 237 (U.S. Court of Appeals for the 1st Circuit 2012).
In another case, the defendants possessed credit-card numbers
they were told `had to be used within 24 hours, which the jury could view as
notice that the account numbers belonged to the persons listed and might be reported
stolen after 24 hours.’ U.S. v. Shifu Lin, 508 F. App'x 398 (U.S.
Court of Appeals for the 6th Circuit 2012).
And other courts have held that `a defendant's repeated and
successful testing of the authenticity of a victim's identifying information
prior to the crime at issue is powerful circumstantial evidence that the
defendant knew the identifying information belonged to a real person as opposed
to a fictitious one.’ U.S. v. Doe, 661 F.3d 550 (U.S. Court of Appeals for the 11th Circuit 2011).
We have nothing of the sort here. What we have,
by the government's own account, is merely that Gonzalez incorporated
Gainesboro Med (itself a shell corporation) in order to obtain an NPI number
for it. Even viewing the evidence in the light most favorable to the
government, that fact would not allow a jury to infer, beyond a reasonable
doubt, that Gonzalez knew Prince was a real person. We therefore reverse
Gonzalez's conviction for aggravated identity theft.
U.S. v. Gonzalez, supra.
Since it
reversed that conviction, the Court of Appeals remanded the case for
resentencing. U.S. v. Gonzalez, supra.
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