Case o' The Week: Judge Graber Urges a "Liberal" Reading in a Criminal Case, Awad and Sufficiency of the Indictment

In Awad, Judge Susan Graber (left) urges a "liberal" approach in a criminal case. Honest. Unfortunately for Awad, however, Judge Graber is referring to a "liberal" reading of a deficient indictment; a reading which allows fraud convictions (and a 180 month sentence) to stand. United States v. Awad, __ F.3d __, 2009 WL 47054 (Jan. 12, 2009), decision available here.

Players: Decision by Judge Susan Graber.

Facts: Dr. Awad billed Medicare millions for the treatment of (mostly) mentally-ill patients in board and care facilities. Id. at *2. His billing forms, turns out, were predetermined and preprinted – 100% of patients seen “needed” the same services. Id. At times over 90 patients were “seen” in a day. Id. Awad was charged with a scheme to defraud Medicare (§ 1347) and money laundering using health care fraud proceeds (§ 1956 (a)(1)(A)). Id. at *3. After his conviction at trial, Awad moved for judgment of acquittal because the indictment did not use the word, “wilfully” with respect to the health care fraud allegations. Id.

Issue(s): “Defendant asserts on appeal that the indictment was insufficient; that the indictment was multiplicitous [and] that the jury instructions erroneously stated that the jury need not find that Defendant knew his actions were unlawful and that the error was prejudicial . . . .” Id. at *1.

Held: 1. Sufficiency of the Indictment: “[H]ere, an inference of willfulness is obvious because of the facts alleged in the indictment. . . . [A]lthough the word ‘willfully’ does not appear in the indictment, sufficient facts were pleaded so that any reader would infer that Defendant acted with a bad purpose.” Id. at *4. “Omission of the word ‘willfully’ was not fatal, as the indictment sufficiently informed Defendant of the charges against him because of the nature and specificity of the facts alleged.” Id.

2. Multiplicity: “[T]he indictment charging 24 counts of health care fraud was not multiplicitous.” Id. at *6.

Of Note: Judge Graber’s “liberal” reading of a deficient indictment traces back to an important Ninth Circuit decision, United States v. Du Bo, 186 F.3d 1177 (9th Cir. 1999). Du Bo’s rule is that, “if properly challenged prior to trial, an indictment's complete failure to recite an essential element of the charged offense is not a minor or technical flaw subject to harmless error analysis, but a fatal flaw requiring dismissal of the indictment.” Id. at 1179 (emphasis added). Apprendi litigation taught us that the timing of an indictment challenge is everything. If the defense doesn’t bring a challenge to the sufficiency of the indictment before trial, it loses the bite of structural error and the challenge will collapse into the deferential mush recited in Awad. See United States v. Velasco-Medina, 305 F.3d 839, 846-47 (9th Cir. 2002).

After the Supreme Court’s decision in Cotton, other circuits have held that failure to raise a challenge to the sufficiency of the indictment before trial demotes the attack to plain error review. See, e.g., United States v. Sink, 473 F.3d 1315, 1317 (10th Cir. 2007) (distinguishing United States v. Prentiss, 256 F.3d 971, 982 (10th Cir. 2001) (en banc)). This is a frustrating rule, from the defense perspective: we must teach AUSAs how to clean-up their shoddy indictments before trial, or (effectively) surrender our indictment challenges.

How to Use: The indictment here didn’t allege “willfulness,” and the jury instructions flatly screwed-up the “willfulness” definition. Id. at *7-*8. The conviction, however, still survives harmless error review! Nonetheless, among the harmless errors weeds there is a mens rea rose or two in this decision.

It was error for the district court to instruct, “[t]he government is not required to prove that the defendant knew that his acts or omissions were unlawful.” Id. at *8. Instead, a health-care fraud defendant is entitled to a general instruction that “‘willfully’ means that a defendant knew his or her conduct was unlawful.” Id. at *7. One must tease this principle out of the harmless error discussion of Awad, but the principle is there: a health care fraud defendant must know that his or her conduct was unlawful in order to have acted “willfully.”

For Further Reading: Judge Graber is generally seen as a tough defense draw. Her mens rea dissent in Heredia was thus particularly notable. In Heredia (that en banc willful blindness debacle, on the Jewell instruction) Judge Graber’s dissent was forceful, blunt, and persuasive: she would require proof of a “knowing or intentional” mens rea in federal drug cases. For a good summary of a great dissent, see a thoughtful blog here.


Image of Judge Susan Graber from http://www.abovethelaw.com/susan_graber/


Steven Kalar, Senior Litigator N.D. Cal FPD. Website at www.ndcalfpd.org

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