This article delves into the intricacies of the mail fraud case involving medical professionals Steven Hershenow (a medical doctor), Stuart Rosenthal (a chiropractor), and Steven Shraiar (a pharmacist). The case, United States v. Hershenow, centered on a scheme to defraud insurance companies through inflated and false billing practices. This analysis will explore the key aspects of the legal proceedings, focusing particularly on the role and arguments of Stuart Rosenthal Lawyer and the ultimate convictions.
Background of the Mail Fraud Scheme
From 1975 to 1980, Hershenow, Stuart Rosenthal lawyer, and Shraiar engaged in a scheme to exploit the Massachusetts “no-fault” statute related to automobile accidents. The scheme operated as follows:
- Attorney Referrals: Lawyers in the Boston area referred individuals with minor car accident injuries to Hershenow or Stuart Rosenthal lawyer.
- Patient Referrals and Overbilling: These doctors would often refer patients to each other. While patients were seen only a few times, they were billed for significantly more visits, sometimes up to twenty.
- Pharmacy Involvement: Patients were also directed to Beaconsfield Pharmacy, owned by Shraiar, for surgical equipment. Similar to the doctors’ billing, the pharmacy submitted bills for equipment never purchased.
- Insurance Fraud: The inflated bills were sent to the referring attorneys, who then submitted them to insurance companies. The goal was to surpass the $500 medical expense threshold in Massachusetts. Exceeding this threshold allowed accident victims to sue for negligence and pain and suffering damages.
Evidence of Fraudulent Activities
Testimonies from former secretaries of Hershenow and Stuart Rosenthal lawyer were crucial in uncovering the fraudulent billing practices.
- Hershenow’s Secretary Testimony: Secretaries testified that while appointment books accurately recorded patient visits, significant discrepancies existed between these records and the bills Hershenow created for accident patients. One example cited a patient file showing two visits but a bill for sixteen.
- Rosenthal’s Secretary Testimony: Stuart Rosenthal lawyer’s former secretary also observed similar overbilling instances. Appointment books correctly reflected visits, but accident patient charts and billing logs showed inflated visit numbers. False billing dates in the doctors’ handwriting were also noted.
- Shraiar’s Role: Patients testified that pharmacy bills submitted on their behalf were false. Some patients had not received all listed equipment, and some had never even visited Beaconsfield Pharmacy.
Legal Challenges: Search Warrants and Suppression Motions
Both Hershenow and Stuart Rosenthal lawyer challenged the legality of search warrants executed at their offices, arguing that they were overly broad and lacked particularity.
Hershenow’s Challenge to the Search Warrant
Hershenow argued that the warrant description “accident patient files” was too general and exceeded the probable cause established in the affidavit. He contended the warrant should have been limited to automobile accident patients, as the investigation focused on fraud related to these cases.
The court referenced precedents like Marron v. United States, emphasizing the Fourth Amendment’s requirement for particularity in warrants to prevent general searches. Citing United States v. Abrams and In re Application of Lafayette Academy, the court acknowledged past cases where overly broad warrants were invalidated. However, the court distinguished this case by noting that the Hershenow warrant was limited to “all accident patient files” within a specific period.
The court reasoned that as long as the affidavit established probable cause to believe fraud permeated Hershenow’s entire accident practice, the warrant was sufficiently particular. The affidavit, based on Postal Inspector John Dunn’s investigation and testimonies from Hershenow’s secretaries, detailed widespread fraudulent billing practices related to “accident patients,” primarily automobile accidents.
The court concluded that a common-sense reading of the affidavit supported the inference of probable fraud throughout Hershenow’s accident practice. Therefore, the warrant to seize “all accident patient files” was deemed valid.
Stuart Rosenthal Lawyer’s Challenge to the Search Warrants
Stuart Rosenthal lawyer similarly challenged three warrants authorizing the seizure of “all accident patient files” from his office, citing lack of particularity and probable cause. The affidavits supporting these warrants, also by Postal Inspector Dunn, contained testimonies from Rosenthal’s former employees detailing billing practices similar to Hershenow’s. One secretary indicated that the majority of Stuart Rosenthal lawyer‘s practice involved automobile accident patients.
Applying the same reasoning as in Hershenow’s case, the court found the “all accident patient files” description sufficiently particular, given the probable cause for seizing all materials within that category.
Stuart Rosenthal lawyer further argued that the first warrant lacked probable cause due to staleness of information. The affidavit was dated February 11, 1980, relying on information from former employees, the most recent of whom had left in March 1979. However, the court cited United States v. DiMuro and Andresen v. Maryland, noting that for ongoing illegal activity, a few months’ delay does not invalidate probable cause, especially for business records.
The court pointed to evidence suggesting Stuart Rosenthal lawyer retained patient records and appointment books at his office and the ongoing nature of the scheme. Information from Hershenow’s secretary about patient referrals between Hershenow and Stuart Rosenthal lawyer further supported the belief in continued violations. The court concluded that probable cause existed to believe the records would be at Stuart Rosenthal lawyer‘s office in February 1980.
Lindsay Subpoena and Hershenow’s Box
Hershenow also challenged the seizure of a cardboard box containing patient records, which he had placed in a barn at St. Monica’s Nursing Home. He argued the search of the box violated his Fourth Amendment rights and the seizure his Fifth Amendment rights.
The box was discovered by the nursing home administrator, Donald Lindsay, who opened it and found patient records not related to the nursing home. Lindsay then contacted Postal Inspector Dunn, leading to the issuance of a grand jury subpoena for the box.
The court denied Hershenow’s motion to suppress, finding he had abandoned the box and lacked a reasonable expectation of privacy. Applying the two-step test from Smith v. Maryland, derived from Katz v. United States, the court assessed Hershenow’s expectation of privacy. While Hershenow subjectively intended to hide the box, the court found this expectation objectively unjustifiable. The barn was an unsecured storage area, and Hershenow had no legal right to store items there.
The court further reasoned that Hershenow had relinquished control over the box and its contents by placing it in such a location. Citing Couch v. United States, the court emphasized that Fifth Amendment privilege requires possession or constructive possession of seized papers. As the records were not in Hershenow’s possession when seized via subpoena, his Fifth Amendment claim failed.
Denial of Rosenthal’s Opening Statement
Stuart Rosenthal lawyer argued that the district court erred in denying him the opportunity to make an opening statement to the jury immediately after the prosecution. The trial court’s policy was to allow defense openings only if witnesses were called.
The court acknowledged that while no explicit federal case law establishes a criminal defendant’s right to an opening statement at a specific time, it is generally presumed. Citing Hallinan v. United States and United States v. Breedlove, the court conceded it was error to deny Stuart Rosenthal lawyer an opening statement. The purpose of an opening statement is to inform the jury of the defense’s intended evidence and theory, which is crucial even if the defense relies on cross-examination.
However, the court concluded this error was harmless in Rosenthal’s case. Stuart Rosenthal lawyer stated he would have argued that billing errors were due to sloppy bookkeeping and a busy practice, not fraud. The court deemed this defense straightforward and predictable, adequately conveyed through cross-examination and closing arguments. Therefore, despite acknowledging the error, the court found no reversible prejudice.
Jury Charge on Unsubmitted Counts
Stuart Rosenthal lawyer also challenged the court’s jury charge regarding counts not submitted to the jury. The judge mentioned withdrawing “many of the counts” from the jury’s consideration, which Stuart Rosenthal lawyer argued might have suggested to the jury that even more evidence of guilt existed beyond what was presented.
Referencing United States v. Aronson, the court rejected this argument. The court emphasized that the jury was clearly instructed on the specific counts they were to consider and that evidence was limited to testimony and admitted exhibits. The court found no indication that the judge’s statement led to improper inferences by the jury, deeming any inaccuracy harmless.
Shraiar’s Severance and Sufficiency of Evidence Arguments
Shraiar argued for severance, claiming prejudicial spillover from evidence against his co-defendants. He specifically pointed to patient files of Hershenow and Stuart Rosenthal lawyer and an insurance file, all involving him as a patient-claimant.
The court upheld the denial of severance, finding no abuse of discretion. While the medical files linked Shraiar to the scheme, other evidence, including testimonies and his connections to the doctors and attorneys, corroborated his involvement. The court noted the jury’s split verdicts for Shraiar, indicating they followed instructions to consider evidence separately for each defendant.
Shraiar also challenged the sufficiency of evidence against him. The court, viewing evidence favorably to the government, found sufficient evidence for the guilty verdicts. Testimony from Shraiar’s former partner, Jerrold Lurie, patient testimonies, and Shraiar’s handwriting on fraudulent bills and related checks provided ample support for the jury’s findings.
Conclusion
The court ultimately affirmed the convictions of Hershenow, Stuart Rosenthal lawyer, and Shraiar. While acknowledging a procedural error in denying Stuart Rosenthal lawyer‘s opening statement, the court found no reversible errors that prejudiced the defendants’ rights. The case underscores the legal ramifications of fraudulent billing practices within the medical and legal professions and highlights the importance of accurate and ethical billing procedures. This case remains a significant example in discussions surrounding healthcare fraud and the role of legal professionals in uncovering such schemes.
