Appeals from the United States District Court for the
Southern District of Texas
DENNIS, OWEN, and SOUTHWICK, Circuit Judges.
H. SOUTHWICK, Circuit Judge
defendants were convicted of conspiracy to commit health care
fraud and several substantive counts of health care fraud.
Individual defendants were convicted of different additional
offenses. Defendants appeal, challenging the sufficiency of
the evidence, the jury instructions, the exclusion of certain
evidence, and one of the sentences. We AFFIRM.
AND PROCEDURAL BACKGROUND
case involves a scheme to defraud Medicare orchestrated by
two men: Zaven "Mike" Pogosyan and Edvard
Shakhbazyan. From 2008 to 2010, Pogosyan opened three
purported medical clinics in the Houston, Texas area: the
Jefferson Clinic, the Pease Clinic, and the Silver Star
Clinic. Pogosyan hired defendants Dr. Nguyen, Dr.
Martinez, and Dr. Simmons to serve as "Medical
Directors" for these clinics. The hiring of a physician
for each clinic was essential to the scheme because a clinic
cannot become a Medicare provider without an application
submitted by a physician or a non-physician practitioner.
See 42 C.F.R. § 424.510. Medicare will only
issue the requisite provider number and remit funds to a bank
account in the same name as that physician. Id.
Jefferson clinic opened first. In September 2008, Pogosyan
placed an advertisement on Craigslist for a Medical Director
position. Dr. Nguyen answered the listing and was hired at a
salary of $10, 000 per month. At the direction of Pogosyan,
Dr. Nguyen signed a Medicare enrollment application and
opened a checking account in his own name for the receipt of
Medicare payments. Dr. Nguyen then provided Pogosyan with
signed blank checks, functionally giving Pogosyan control
over the account.
and Pogosyan hired and trained Seryan Mirzakhanyan to
administer diagnostic tests. Defendant Anna Bagoumian was
hired in April 2009 to work as a receptionist and to perform
these same tests. None of these people were licensed medical
professionals or had any medical training. After Bagoumian
was hired, Mirzakhanyan became responsible for billing
Medicare, a task that was previously handled by Pogosyan.
and Pogosyan used marketers to locate and recruit
"patients" with the promise of cash payments. One
of these marketers was Frank "Bones"
Montgomery. Montgomery coached patients on what
symptoms to describe to the doctor. Montgomery was paid $150
in cash by Pogosyan, Mirzakhanyan, or Bagoumian for each
patient he delivered to the clinic. The marketers would
generally keep $50 and give $100 to the patient.
kickback exchanges were often concealed. Montgomery, for
example, would typically retrieve an envelope with the cash
from behind the medicine cabinet in a bathroom next to Dr.
Nguyen's office. On occasion, Pogosyan or Bagoumian
handed him the envelope directly. Patients were instructed to
not mention the payments to the doctor, and Montgomery always
drove to a secondary location before paying them.
Jefferson clinic, Dr. Nguyen saw patients - most of whom had
been brought to the clinic by marketers - and typically
ordered an extensive battery of diagnostic tests. For a
significant number of patients, the clinic submitted claims
to Medicare for one or more of the following procedures:
anorectal manometry, anal electromyography ("anal
EMG"), and rectal sensation tests (collectively,
three procedures are highly specialized and in most clinics
are rarely performed. All three tests are used for assessing a
patient that is suffering from either incontinence or
constipation. For obvious reasons, these tests tend to be
both uncomfortable and presumably memorable for the patient.
the frequency of the billing to Medicare, no rectal tests
were ever performed on a patient. The Jefferson clinic
possessed medical equipment associated with these tests, but
it was seemingly only used by Pogosyan or Bagoumian to
fabricate test results that were placed in patient files.
the clinic submitted claims to Medicare, payment would be
remitted to the account opened by Dr. Nguyen. Pogosyan
created a "management company" called Uni Office
Manage, Incorporated, and instructed Mirzakhanyan to open
bank accounts in its name. After Medicare paid claims,
Pogosyan used the blank checks provided by Dr. Nguyen to
transfer most of the money into the Uni Office
and Shakhbazyan also instructed Mirzakhanyan to withdraw cash
from the Uni Office account twice per week in amounts between
$5, 000-$9, 000. Bagoumian would also occasionally cash
checks and return the money to Pogosyan and Shakhbazyan. The
cash was used for the kickback scheme and for Shakhbazyan and
Pogosyan's regular trips to Las Vegas.
Jefferson clinic abruptly closed in June 2009. Pogosyan,
Shakhbazyan, Mirzakhanyan, and Bagoumian shredded the
entirety of the Jefferson clinic's records in a single
afternoon. Pogosyan then immediately opened a new clinic on
Pease Street in Houston. Dr. Nguyen and Bagoumian moved to
this new clinic, but Mirzakhanyan did not.
Nguyen continued to see patients at the Pease clinic, but did
not enroll with Medicare as the provider. Instead, Pogosyan
placed another advertisement on Craigslist, which led to the
hiring of Dr. Martinez in July 2009. At the time, Dr.
Martinez lived in Dallas and was finishing the second year of
his residency. After interviewing, he agreed to travel to
Houston once per month to review patient files in exchange
for a monthly salary of $7, 000. Like Dr. Nguyen, Dr.
Martinez signed a Medicare enrollment form, opened a bank
account, and turned over the checkbook to Pogosyan.
November 2009, Pogosyan posted a second job listing for a
"Medical Director" to review patient files once a
month. This time Dr. Simmons responded to the posting on
Craigslist. For a salary of $8, 000 per month, he performed
the same role as Martinez, periodically reviewing patient
files from the Pease clinic. Like Dr. Nguyen and Dr.
Martinez, he signed a Medicare enrollment form, opened a bank
account, and signed blank checks for Pogosyan's use.
than the addition of Dr. Martinez and Dr. Simmons as
"reviewing" doctors, the Pease clinic largely
operated in the same manner as the Jefferson clinic.
Bagoumian and Pogosyan employed marketers to pay patients to
visit the clinic. Dr. Nguyen saw patients and claims were
submitted for, among other things, rectal tests that were not
actually performed. Checks were written from Dr.
Martinez's and Dr. Simmons' accounts to transfer most
of the Medicare payments to the accounts of supposed
"management companies" controlled by
Pease clinic closed in March 2010, but Pogosyan had already
opened a third clinic with Dr. Nguyen in January 2010. This
time, Dr. Nguyen and Pogosyan applied for a provider number
in the name of Silver Star Medical Group, a professional
association they had created. For the second time, Dr. Nguyen
signed a Medicare enrollment application, opened a bank
account, and provided the checkbook to Pogosyan.
Silver Star, Dr. Nguyen saw patients, including some patients
he had previously seen at Pease. As before, patients were
paid and claims were submitted to Medicare that included
rectal tests that were never performed.
scheme ended in April 2010 after the FBI executed search
warrants on the Pease and Silver Star clinics. Overall, the
evidence at trial showed that 39, 608 claims totaling $7,
638, 245 had been submitted to Medicare for services from Dr.
Nguyen, Dr. Martinez, and Dr. Simmons, for which it paid $3,
jury returned a 52-count indictment against the defendants.
All four defendants were charged with conspiracy to commit
health care fraud in violation of 18 U.S.C. § 1349.
Bagoumian was also charged with conspiracy to pay kickbacks
in violation of 18 U.S.C. § 371.
indictment also charged 42 substantive counts of health care
fraud. On each substantive count, the defendants were charged
and convicted under both 18 U.S.C. Section 1347 and 18 U.S.C.
Section 2, as principals and as aiders and
abettors. However, not every count applied to
every defendant. Dr. Nguyen and Bagoumian were both initially
charged with all 42 counts, but the government ultimately
dismissed nine counts with respect to
Bagoumian.Dr. Martinez and Dr. Simmons were only
charged with those substantive counts for claims submitted
under their respective provider numbers.Finally, the
doctors were each charged with multiple counts of engaging in
monetary transactions of property derived from specified
unlawful activity, in violation of 18 U.S.C. §
defendants were convicted as charged following a nine-day
jury trial. The district court sentenced them as follows:
• Bagoumian - 51 months imprisonment, 3 years of
supervised release, $2, 675, 628.06 in restitution, $3,
500.00 in special assessments;
• Dr. Nguyen - 87 months imprisonment, 3 years of
supervised release, $3, 357, 752.62 in restitution, $4,
700.00 in special assessments;
• Dr. Martinez - 28 months imprisonment, 3 years of
supervised release, $1, 109, 203.31 in restitution, $1,
600.00 in special assessments;
• Dr. Simmons - 15 months imprisonment, 3 years of
supervised release, $171, 833.82 in restitution, $1, 200.00
in special assessments.
defendants timely appealed.
defendants challenge the sufficiency of the evidence for
their convictions, the jury instructions, and the exclusion
of certain "reverse 404(b)" evidence. Bagoumian
raises additional challenges to her sentence. We discuss the
challenges in that order.
Sufficiency of the Evidence
review the denial of a motion for judgment as a matter of law
de novo. United States v. Ganji, 880 F.3d
760, 767 (5th Cir. 2018). To evaluate whether the evidence is
sufficient to support a jury conviction, we "examine
whether a rational jury, viewing the evidence in the light
most favorable to the prosecution, could have found the
essential elements of the offense to be satisfied beyond a
reasonable doubt." Armstrong, 550 F.3d at 388.
"We do not evaluate whether the jury's verdict was
correct, but rather, whether the jury's decision was
rational." United States v. Miles, 360 F.3d
472, 477 (5th Cir. 2004). The "verdict may not rest on
mere suspicion, speculation, or conjecture, or on an overly
attenuated piling of inference on inference." United
States v. Pettigrew, 77 F.3d 1500, 1521 (5th Cir. 1996).
the government cannot obtain a conviction by piling
"inference upon inference," the defendants cannot
obtain an acquittal simply by ignoring inferences that can
logically be drawn from the totality of the evidence.
Id. at 1521, 1519. When evaluating the sufficiency
of the evidence "[n]either the jury nor this [c]ourt is
obligated to examine each circumstance in isolation."
United States v. Duncan, 919 F.2d 981, 990 (5th Cir.
we discuss each count as relevant to each defendant and
review the evidence. We begin with the count for conspiracy
to violate the Anti-Kickback statute, which is unique to
Bagoumian. We then proceed to the counts for conspiracy to
commit health care fraud and health care fraud, which apply
to all the defendants. Finally, we address the counts against
the doctors for engaging in monetary transactions of property
derived from specified unlawful activity.
18 U.S.C. § 371 - Anti-Kickback Conspiracy
was convicted of conspiracy to violate the Anti-Kickback
Statute, 42 U.S.C. § 1320a-7b(b). That Act
"criminalizes the payment of any funds or benefits
designed to encourage an individual to refer another party to
a Medicare provider for services to be paid for by the
Medicare program." Miles, 360 F.3d at 479. A
conspiracy requires "(1) an agreement between two or
more persons to pursue an unlawful objective; (2) the
defendant's knowledge of the unlawful objective and
voluntary agreement to join the conspiracy; and (3) an overt
act by one or more of the members of the conspiracy in
furtherance of the objective of the conspiracy."
United States v. Njoku, 737 F.3d 55, 64 (5th Cir.
2013) (quoting United States v. Mauskar, 557 F.3d
219, 229 (5th Cir. 2009)). As to mens rea, a
defendant must have had the "specific intent to do
something the law forbids." Id. (citation
alleges the evidence does not support that she had the
specific intent to do anything unlawful. The evidence from
which jurors could make findings includes that 15 of the 19
patients who testified stated they were paid to visit the
clinics, and 12 of them testified the only reason
they visited the clinics was to get paid. Bagoumian lived
with three of the co-conspirators who pled guilty:
Mirzakhanyan, Shakhbazyan and Pogosyan. Frank
"Bones" Montgomery, the marketer recruiting
"patients," testified that Bagoumian paid him cash
for patients directly, indirectly by placing cash behind the
bathroom cabinet, and she was often present when Montgomery
was paid by Pogosyan.
contends there was no evidence that she knew the payments
were illegal or that Montgomery used the money to pay
patients. To the contrary, the testimony about her use of the
bathroom cabinet to place cash payments was relevant evidence
Bagoumian knew of their illegality because the
"unusualness of this transaction supports a reasonable
inference of a design to conceal." United States v.
Willey, 57 F.3d 1374, 1387 (5th Cir. 1995). The jury
could have easily credited Montgomery's testimony that,
on at least one occasion, Bagoumian directed him to recruit
additional patients because she was "running
the circumstantial evidence that she lived with the
organizers of the conspiracy, that she placed cash in a
bathroom to pay recruiters, and that the recruiter Montgomery
admitted to being paid for each patient he procured through
Bagoumian's secreted envelopes of cash, and that
witnesses who had been the ostensible patients testified they
were paid to go to the clinics, jurors could properly find
that Bagoumian knowingly participated in the kickback
conspiracy. See Gibson, 875 F.3d at 188-89.
18 U.S.C. § 1349 - Conspiracy to Commit Health Care
four defendants were convicted of conspiracy to commit health
care fraud. Proof of such a conspiracy requires evidence
"that (1) two or more persons made an agreement to
commit health care fraud; (2) that the defendant knew the
unlawful purpose of the agreement; and (3) that the defendant
joined in the agreement willfully, that is, with the intent
to further the unlawful purpose." United States v.
Grant, 683 F.3d 639, 643 (5th Cir. 2012). No formality
to the agreement needs to exist, and it can even be unspoken.
Id. On the other hand, any "'similarity of
conduct among various persons and the fact that they have
associated with or are related to each other' is
insufficient to prove an agreement." Ganji, 880
F.3d at 767-68 (quoting United States v. White, 569
F.2d 263, 268 (5th Cir. 1978)). Nonetheless, an
"agreement may be inferred from concert of action,
voluntary participation may be inferred from a collection of
circumstances, and knowledge may be inferred from surrounding
circumstances." Grant, 683 F.3d at 643 (quoting
United States v. Stephens, 571 F.3d 401, 404 (5th
evidence in this case bears a striking resemblance to the
evidence we considered in a 2016 decision in which we
affirmed convictions for health fraud committed by a doctor
and others in Houston. See United States v.
Barson, 845 F.3d 159 (5th Cir. 2016). While
sufficiency challenges are inherently case-specific,
Barson nonetheless provides a useful benchmark for
our analysis. For that reason, we first review our reasoning
in that case. We held there was "ample circumstantial
evidence to establish . . . knowledge of the ongoing health
care fraud" because it showed that Doctor Barson
signed documents in blank allowing the clinic to bill under
his Medicare identification number and opened a bank account
in his name to receive Medicare reimbursements[, ] . . .
signed a number of blank checks to permit [Edgar] Shakbazyan
to draw on the account[, ] . . . allowed the bank statements
to be sent to the clinic and never reviewed them[, ] . . .
received a significant sum, $7, 000 per month, for reviewing
patients' charts every other Saturday[, ] . . . [and]
admitted to an FBI investigator that despite his suspicions
and bad feelings about the clinic, he reported his suspicions
to no one.
Id. at 164.
There also was sufficient evidence to convict the
held himself out as a "doctor" at the clinic and
falsely claimed . . . that he was a physician's
assistant, the clinic's on-site medical staff member[, ]
. . . saw almost all of the patients and turned a blind eye
to the fact that most of the so-called patients had no need
for medical care and that many received no medical care[, ] .
. . saw large numbers of patients lining up outside the
clinic daily after being delivered to the clinic by the same
white van[, ] . . . had access to the clinic's mail
including the bank statements and Medicare remittances[, ] .
. . was paid $20, 000 for his work, a large sum for an
unlicensed individual to pose as a physician's
assistant[, ] . . . [and] lied to investigators about the
payments he received.
Id. at 164-65.
present appeal, though, does present some issues absent from
Barson that we will discuss where needed.
We now review the evidence.
Evidence as to Dr. Nguyen
Dr. Nguyen does not dispute that many of the claims submitted
to Medicare were fraudulent, he challenges only the knowledge
element of his conspiracy conviction. Like the
doctor-defendant in Barson, Dr. Nguyen "signed
documents in blank allowing the clinic to bill under his
Medicare identification number[, ] . . . opened a bank
account in his name to receive Medicare reimbursements[, ] .
. . [and] signed a number of blank checks to permit"
Pogosyan "to draw on the account." Id. at
expert, Dr. Michael Snyder, testified about the three rectal
test procedures: anorectal manometry, anal electromyography,
and rectal sensation tests. Dr. Snyder indicated that these
tests are relatively uncommon, and that it would be
"somewhat inappropriate" for a family practice
clinic to perform the tests rather than a specialist. Dr.
Snyder reviewed 277 patient files containing rectal test
orders, most of which were signed by Dr. Nguyen, and
testified that he concluded none were actually performed.
Hundreds of actual patient files with rectal test orders
signed by Dr. Nguyen were introduced into evidence.
the physician-assistant defendant in Barson, Dr.
Nguyen worked on a daily basis at the clinic, where he
"saw almost all of the patients and turned a blind eye
to the fact that most of the so-called patients had no need
for medical care and that many received no medical
care." Id. Many patients Dr. Nguyen ostensibly
evaluated testified at trial that they never saw a doctor.
Mirzakhanyan testified that Dr. Nguyen was only at the
Jefferson clinic for approximately three hours each day, yet
Dr. Nguyen supposedly "treated" up to 10-15
patients daily, and the Jefferson clinic submitted 11, 276
claims to Medicare for 683 beneficiaries in just seven
months, an average of 16.5 claims per patient.
Dr. Nguyen actually saw patients, there was video evidence
that he spent just a few minutes with them before billing
Medicare for 45-minute examinations and dozens of
"tests" that he had ordered. This was undisputed by
Dr. Nguyen's own testimony. Some patients were treated by
Dr. Nguyen at multiple clinics in a short period of time and
Medicare was billed for identical procedures.
an inference of knowledge was supported by Dr. Nguyen's
"proximity to the fraudulent activities" at all
three clinics, which gave him a unique vantage point for
observing the suspicious nature of the operation. United
States v. Willett, 751 F.3d 335, 340 (5th Cir. 2014).
was ample circumstantial evidence of Dr. Nguyen's knowing
participation in the conspiracy.
Evidence as ...