If you do the Crime, You must do the Time

Cheating Government Health Plans Is a Serious Crime

Poor people who get services from state health care agencies like California’s Medi-Cal have little choice from whom they obtain medical and dental services. As a result the providers – who agree to take less than market value for the services – are sorely tempted to cheat so that the earnings are closer to the fair market value.

Natalie Lynn Brindos-Watters was so tempted and, because she gave in to the temptation, she found herself in court being sentence to serve time in prison. In The People v. Natalie Lynn Brindos-Watters, C084769, Court Of Appeal Of The State Of California Third Appellate District (Sacramento) (July 23, 2018) the California Court of Appeal dealt with an appeal after a jury found defendant Brindos-Watters guilty of grand theft, two counts of healthcare insurance fraud, and two counts of submitting fraudulent Medi-Cal claims. The trial court imposed a split jail term on one of the convictions for insurance fraud and stayed the remaining counts.

On appeal, defendant contends the trial court violated her right to due process in abandoning its neutral role through facilitating the admission of prosecution documentary evidence, the prosecutor committed misconduct in closing argument, an instruction on consciousness of guilt was not warranted, and the trial court identified an unwarranted aggravating factor.

FACTUAL BACKGROUND

Defendant had been a licensed dental hygienist authorized to work independently of dental supervision. She ran a business in which she and other independent hygienists (as independent contractors) provided Denti-Cal services at about 17 skilled nursing facilities.

A random audit of defendant’s accounts indicated she was the 12th largest biller in the Denti-Cal program. There were a number of days on which it appeared that she was seeing an extremely large number of patients for any one person to manage and was claiming to treat patients in a single day at facilities 250 miles apart. The auditor thus referred the matter to a criminal investigator.

Pursuant to a warrant, the investigator placed a GPS tracker on defendant’s car. The investigator kept track of defendant’s whereabouts in October and November 2014. The investigator then compared defendant’s billings for that period and determined that neither defendant nor any of her associates had appeared or performed services at the billed facilities. The investigator also identified instances of defendant billing for a higher level of service than was actually provided. The investigator identified roughly $38,000 in overbilling.

After her license was suspended, defendant sought to sell her contracts with facilities to one of her associates and receive a portion of the proceeds earned, which was not lawful. When the associate balked, defendant suggested the associate could launder the money through a third party’s account to conceal the source of payments.

DISCUSSION

Defendant has Forfeited her Claim of Prosecutorial Misconduct

At the conclusion of his argument, the prosecutor alluded to the associate’s testimony about defendant suggesting that the associate could launder Denti-Cal proceeds through a third party in order to pay defendant a share, ending with, “Motive, cavalier attitude, steal with impunity, then try to cover your tracks. [¶] That’s what she’s all about.” Defense counsel did not object.

On appeal, defendant labels this argument “highly prejudicial,” because it invited the jury to convict her based on her bad character, and thus we should address her claim of prosecutorial misconduct even absent objection in the trial court because a limiting instruction on the use of evidence of uncharged crimes was not included in the charge to the jury. Defendant also asserts in off-hand fashion that defense counsel could not possibly have had any tactical reason for failing to object, and thus provided ineffective assistance of counsel.

Failure to lodge a contemporaneous objection and a request for an admonition forfeits any claim of prosecutorial misconduct, except where a defendant affirmatively establishes on appeal that it was irremediable or it was futile to object, with more than a “ritual[ized] incantation” to this effect. Defendant has not established futility on the present record, nor does she particularize the reasons why these statements could not have been the subject of an effective admonition.

Defendant’s attempt to reach the issue under the guise of ineffective assistance of trial counsel fails in two regards:

  1. Direct appeal is almost inevitably the inappropriate forum for establishing that the inherently tactical choice of failing to raise an objection to misconduct fell below reasonable professional standards.
  2. Defendant does not provide anything more than a perfunctory analysis of how the failure to object did not meet objective professional standards. That does not suffice.

If, in fact, trial counsel did not have any strategic basis for failing to object, defendant has a remedy in habeas corpus (if she can establish resulting prejudice).

Instructing on Consciousness of Guilt was not Prejudicial

One associate testified that she could not remember if she ever saw the documents from Denti-Cal that detailed the services for which it was paying. Another associate testified that she never saw them when she worked for defendant, who told her that the statements of benefits listed multiple associates and she did not want them to see each other’s records or patient information.

Based on this testimony, the prosecution sought the instruction on consciousness of guilt from hiding evidence of her fraud. Defense counsel thought this was too tenuous to support the instruction. The trial court agreed to give the instruction, pointing out to defense counsel that he was free to make his objection in the form of argument to the jury.

At great length, defendant argues the evidence was insufficient to support the instruction, and in abbreviated fashion asserts that the “inference it created” of a plan to hide evidence was “inflammatory,” in the absence of which she would have obtained a more favorable result at trial.

The instruction does not “create” an inference. It does not act to a defendant’s detriment. It merely states the obvious proposition that if the jury believed there was evidence of concealment it could draw such an inference if the circumstances warranted it. Thus, even if defendant were correct that the evidence in the present case was insufficient to support the instruction, at worst it was superfluous and immaterial in the face of strong evidence of guilt, and thus not a basis for reversing the judgment.

In preparing to sentence defendant, the trial court recited three additional factors in aggravation not appearing in the probation report. Among these was its express finding that defendant induced others to participate in wrongdoing, premised on the testimony regarding her efforts to persuade her former associate to launder money.

Defendant completely ignores the other two factors that the court identified at the hearing (vulnerability and abuse of a position of trust), as well as the two in the probation report (sophistication and taking a large sum of money). Only a single aggravating factor is necessary to support imposing the upper term, and therefore a more favorable sentence is not reasonably probable in the absence of the allegedly improper factor.

ZALMA OPINION

Ms. Brindos-Watters  was tempted by the ease she found when cheating the government. It was too easy so she became greedy billing for services performed in the same day more than 250 miles apart. It was the greed that got her caught and then, after she was convicted, she had the unmitigated gall to accuse her lawyer of being incompetent and the trial judge of being unfair. The sentence will stand.

 


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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