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United States v. Gevorgyan

United States Court of Appeals, Fifth Circuit

March 27, 2018

UNITED STATES OF AMERICA, Plaintiff - Appellee
TSOLAK GEVORGYAN, also known as Mike, Defendant-Appellant

          Appeal from the United States District Court for the Southern District of Texas

          Before HIGGINBOTHAM, PRADO, and HIGGINSON, Circuit Judges.

          PATRICK E.HIGGINBOTHAM, Circuit Judge.

         Tsolak Gevorgyan was convicted of healthcare fraud and violating the Anti-Kickback Statute, including conspiracy and substantive counts. We AFFIRM these convictions.


         In 2006, Leonard Kibert, a physician, established the New Life Sleeping and Allergy Disorder Center ("the Clinic") in Houston, Texas. Gevorgyan was employed by the Clinic as an "office manager" and "operations person, " where he cut a ubiquitous figure. There were no formal job titles at the Clinic, but Gevorgyan was described as "kind of r[unning] the [C]linic" on a day-to-day basis. In particular, Gevorgyan paid rent, faxed documents, met with patients, conducted sleep and allergy tests, and occasionally participated in job interviews with prospective employees.

         That the Clinic's practice was sustained in part by illegal activity is not at issue in this appeal. Of relevance here, two distinct sets of practices befouled the Clinic. First, the Clinic engaged in the payment of "marketers" who themselves paid patients to attend the Clinic. Second, the Clinic routinely sought and received reimbursement for medical tests it never conducted.

         Gevorgyan was involved in each of these schemes. With respect to the payment of kickbacks for patients, Gevorgyan personally paid a marketer named Leon, who then distributed the money to the other marketers who succeeded in bringing patients to the Clinic. At some point during the Clinic's lifecycle, one of Gevorgyan's erstwhile codefendants, Robert Manning, replaced Leon in his role as middleman. As before, Manning paid the marketers, who themselves provided money to prospective patients; at the end of the week, Gevorgyan reconciled a ledger with the number of patients who had visited the Clinic to the number that Manning had recorded based on his own interactions with marketers. Gevorgyan then paid Manning based on the number of patients brought in. The Clinic's patient base was unique; the Clinic only served Medicare beneficiaries, and it also apparently never charged copays.

         Gevorgyan gave checks to Manning, payable to a company named GGM Inc., which Manning had created for the purpose of holding the money he received from the Clinic. Similarly, the checks provided by Gevorgyan did not draw upon the accounts of Gevorgyan or the Clinic; they were drawn from the account of a corporation called Gohev Services, which by corporate filings Gevorgyan served as an owner, officer, and director. These checks were signed by Arsen Gevorgyan, Gevorgyan's older brother. Gohev Services was also "intertwined" in the Clinic's general activities, financing many of the day-today costs incurred by the business.

         With respect to the healthcare fraud, in addition to "kind of r[unning] the [C]linic" in the ways described above, Gevorgyan was also involved in the intake of new patients and had apparently trained the Clinic's receptionist on how to register them.

         In August 2009, Kibert closed the Clinic. Several years later, the Texas government began investigating and interviewing actors associated with it on the basis of tips from marketers, which led to the indictment of Gevorgyan alongside Kibert, Manning, and two other codefendants. The indictment charged all of the defendants with conspiracy to commit healthcare fraud and various individual counts of healthcare fraud; it charged Gevorgyan and Manning with conspiracy to violate the Anti-Kickback Statute and five counts of unlawfully making kickback payments. Manning pleaded guilty to his charges and provided testimony against his codefendants. Following a 14-day trial, Kibert and Gevorgyan were convicted while the other two remaining codefendants were acquitted.[1] On January 11, 2017, Gevorgyan was sentenced to 58 months of imprisonment followed by three years of supervised release. Gevorgyan appealed, challenging both the sufficiency of the evidence supporting his convictions and the district court's failure to sever him from the trial.


         In review of the sufficiency of evidence underlying criminal convictions, we ask whether "a rational jury could have found each essential element of the offense beyond a reasonable doubt."[2] All evidence must be taken in the light "most favorable to the verdict and drawing all reasonable inferences from the evidence to support the verdict."[3] Gevorgyan challenges both sets of his convictions on the basis of insufficient evidence: first, he challenges his convictions for conspiracy to violate, and substantive violation of, the Anti-Kickback Statute; second, he challenges his convictions for conspiracy to commit, and substantive commission of, healthcare fraud. We take these two categories of challenges in turn.


         Gevorgyan challenges the sufficiency of the evidence underlying his Anti-Kickback Statute convictions. The Anti-Kickback Statute in effect during the relevant time period proscribed "knowingly and willfully offer[ing] or pay[ing] any remuneration . . . directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program."[4] A conspiracy to violate the Anti-Kickback Statute under 18 U.S.C. § 371 requires "an agreement to do so, knowing and voluntary participation in the conspiracy, and an overt act by one member in furtherance of the unlawful goal."[5] Gevorgyan focuses only on the mens rea components of these offenses, arguing that he did not "knowing[ly] and willing[ly]" violate the statute or participate in any conspiracy.

         The government claims that Gevorgyan's challenge to the Anti-Kickback Statute convictions was not properly preserved, asserting that, at the close of evidence, Gevorgyan only reurged his challenge to the evidence presented in support of healthcare fraud, not the Anti-Kickback Statute counts. If Gevorgyan abandoned his challenge to the evidence underlying the Anti-Kickback Statute counts, we would review the imposition of the convictions with greater deference to the district court; we would ask whether the convictions impose a "manifest miscarriage of justice, " which requires Gevorgyan to demonstrate that "the record is devoid of evidence pointing to guilt" or that "the evidence on a key element of the offense is so tenuous that a conviction would be shocking."[6]

         This we need not do, for even if we decided that the objections were fully preserved, we would uphold Gevorgyan's convictions. On this record, and drawing all reasonable inferences in support of the verdict, we must conclude that the jury could have found that Gevorgyan was aware of the nature and purpose of the kickback payments he made to Manning.

         Gevorgyan understandably attacks the testimony of Manning, his former coconspirator-he argues that Manning was an inherently unreliable witness given his own role in the scheme, and points out that there are alternative explanations for the payments, including that they were simply for "crowd control" or "keep[ing] some semblance of order at the clinic." Perhaps this is so, but the fact remains that there is sufficient evidence to support the jury's conclusion that Gevorgyan knew the payments were kickbacks. Manning's testimony aside, evidence indicates that Gevorgyan instructed the Clinic's receptionist to keep a ledger tallying the number of incoming patients. This patient ledger contained total figures written by Gevorgyan that ...

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