Former Secaucus Mayor’s Corruption Conviction Upheld: Third Circuit Rejects Argument That Government’s Cross-Examination And Closing Arguments Were Improper

Posted On Tuesday, March 19, 2013

The Third Circuit has affirmed the corruption conviction of Dennis Elwell, former Mayor of Secaucus, New Jersey, finding no merit to numerous issues he raised regarding the conduct of his jury trial.  United States v. Elwell, No. 12-2202 (3d Cir. March 13, 3013). Elwell’s arguments centered on evidence and arguments presented by the government that Elwell claimed were designed to make him guilty by association.  The court, in a non-precedential opinion, found it all to be fair game. 

The charges against Elwell grew out of a government sting operation.  The evidence at trial established that corrupt payments were made to Elwell, through longtime friend Ronald Manzo, by a government informant posing as a real estate developer.  The meetings included proposals by the informant to make campaign contributions in order to “expedite” some of his projects.   At the first meeting, the informant told Elwell that he was interested in contributing to Elwell’s re-election campaign and that he would like some of his development projects, which included a hotel development, “expedited.”  In later meetings, the informant promised to pay $10,000 before and after an upcoming primary election while seeking assurances that Elwell would “expedite [his] stuff.” 

According to trial testimony, at one of the meetings the informant gave $10,000 in cash to Manzo, who then gave it to Elwell.  Two weeks later, during another meeting to discuss potential sites for the informant’s hotel, Elwell confirmed that he had received the money.  Manzo eventually entered a plea of guilty and testified against Elwell at trial. 

One of Elwell’s contentions was that the district court had allowed irrelevant and prejudicial evidence to be introduced against him, including questions on cross-examination.  The cross-examination questions had been follow-up to Elwell’s testimony about a conversation with a certain township administrator about the propriety of taking cash contributions.  On cross-examination the government was permitted to ask Elwell about the township administrator’s prior work as chief of staff for former Hudson County Executive, Robert Janiszewski, himself the subject of well-publicized corruption charges. The court found that the district court’s allowance of this questioning was appropriate, finding that Elwell’s knowledge of the administrator’s experience working for someone who got into trouble for taking cash provided valuable context for the testimony, and could be viewed as making it less likely that Elwell genuinely thought the payment was a campaign contribution. 

“It rejected the proposition that the mention of Janiszewski’s name posed a substantial risk of guilt by association.”

The court was also not swayed by Elwell’s argument the government should not have been permitted to ask him to confirm that he had once commented to Janiszewski that “Hudson County government is ruled by the mayors.”  The court found that this was testimony was properly admitted to rebut Elwell’s claim on direct examination that he was a “weak mayor” and to show that he had power over property development in Secaucus.  It rejected the proposition that the mention of Janiszewski’s name posed a substantial risk of guilt by association.   The court similarly rejected arguments that the government’s eliciting of testimony from Manzo about other instances of corruption in Hudson County were improper.

Elwell also argued that he was entitled to a new trial because the government made improper comments during closing arguments that amounted to establishing guilt by.  The government had argued:

Dennis Elwell was no babe in the woods. He was a savvy politician. He was a politician who had been in Hudson County for 17 years, a place where Ron Manzo told you, unfortunately, there is no stranger to corruption, a place where some of the highest-ranking people in Hudson County government, the county executive, the freeholders, have gotten into legal trouble for taking cash payoffs. This was the world that Dennis Elwell lived in in the summer of 2009.

The court concluded that the statements weren’t improper because they all went to issues in the case such as Elwell’s intent in accepting the payment.  

While the court also rejected Elwell’s argument of prosecutorial misconduct for making several references to improper interactions between Elwell and his counsel, it took a closer look at the statement in the prosecutor’s closing argument that:

When he (Elwell) was asked a difficult question,” he “look[ed] over at the counsel table … as if he was looking for the right answer.

The court found that, although that allegation could be construed as an attack on the character of the defense attorney, any risk of prejudice was mitigated by a curative instruction the district court issued to the jury, which explained that “[t]here is nothing in this case that would suggest that defense counsel in any way was acting improperly.”

A complete copy of the opinion can be found here: http://www.ca3.uscourts.gov/opinarch/122202np.pdf

Healthcare Fraud & Abuse Remains Top DOJ Criminal Enforcement Priority

Posted On Monday, March 18, 2013
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In February, HHS and DOJ released their Annual Report for the Health Care Fraud and Abuse Control Program, describing yet another “record breaking year” in healthcare fraud and abuse enforcement.  While there are no formal reports to cite regarding activity in 2013, it certainly appears that the trend will continue.  Just a review of a few of the cases that made news at the end of last week is sufficient to make this point.

“During 2012, federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants.”

On Friday, the former medical director of Biscayne Milieu, a Miami-based mental-health clinic, was sentenced to 144 months in prison for his role in a fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare.  Dr. Gary Kushner’s conviction came after a two month trial where the evidence showed that he and co-conspirators submitted over $50 million dollars in false and fraudulent claims to Medicare.  The claims were submitted through the Biscayne Milieu facility that purportedly operated a partial hospitalization program (PHP), a form of intensive treatment for severe mental illness.  Instead, patient recruiters were paid to refer ineligible Medicare beneficiaries to the facility for services that were never provided or were not properly reimbursable by Medicare. 

On Thursday, a Houston-area physician was sentenced to serve 63 months in prison for conspiring to commit health care fraud by falsifying plans of care for Medicare beneficiaries, including patients whom he did not treat.  Dr. Ben Harris Echols’ conviction came after a trial where the evidence showed that he signed plans of care for Medicare beneficiaries who were not under his care and about whose conditions he had no knowledge.  In addition to his prison term, the physician was sentenced to serve three years of supervised release and ordered to pay over $2 million in restitution.

On the same day of the sentencing of Dr. Echols, a Houston grand jury returned a four-count, superseding indictment against urologist Hossein Lahiji M.D. and his wife, attorney Najmeh Vahid Lahiji, charging the couple with conspiracy to commit health care fraud, several individual counts of health care fraud, and for conspiring to violate Iranian sanctions.

The health care fraud scheme alleged in this indictment alleges that the defendants submitted false and fraudulent claims in connection with the use of unlicensed and unqualified medical personal and for billing for medical services not rendered. The indictment further alleges they submitted claims for urology services allegedly performed by Dr. Lahiji when, in fact, he was traveling outside Texas and outside the United States. The individuals, who were only licensed as medical assistants, were the ones actually performing these “urology services” without any supervision from any physician or other qualified, licensed personal.  The government also charges Dr. Lahiji with fraud relating to “upcoding,” where he billed for a more comprehensive medical service than was warranted or actually preformed.

According to the DOJ/HHS Annual report, DOJ opened 1,131 new criminal health care fraud investigations in 2012, involving 2,148 potential defendants.  During 2012, federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants.  A total of 826 defendants were convicted of health care fraud-related crimes during the year.

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