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Univ. of South Carolina School of Law

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Tuesday, March 25, 2008

Miami State of Mind: Eleventh Circuit Finds Doctor's Statements About Past Fraud Inadmissible Under Rule 803(3)

The Eleventh Circuit's recent opinion in United States v. Nosovsky, 2008 WL 696595 (11th Cir. 2008), provides a nice clarification of the dichotomy created by Federal Rule of Evidence 803(3).  In Nosovsky, from November 2004 until mid-April 2005, Rosa Walled, her brother Rafael Walled, and Gregory Delatour owned an HIV AIDS clinic in Miami, Florida.  The plan of the clinic, according to Walled, "was trying to get patients and bill Medicare and make some money." The Walleds and Delatour planned to “recruit[]” patients, pay the patients from $100 to $200 per visit to their clinic, “alter[]” their blood work to make the patients eligible for “expensive [HIV/AIDS] medications,” and bill Medicare even though the patients, in fact, would neither receive the medications nor be treated by a physician. The Walleds and Delatour needed a physician to be associated with their clinic, as a medical director, so that they could utilize his “provider number” to bill Medicare for reimbursement.  The physician they contacted was the defendant, Dr. Isaac Nosovsky, with the question being whether they informed him of this scheme.

After being approached by the government, Rosa agreed to wear a wire and record a conversation with Nosovsky. The government anticipated that Nosovsky would make admissions or statements in furtherance of conspiracy, but when Rosa broached the subject of the fraud, Nosovsky responded with surprise and shock at Rosa's declaration that there had been fraud at the clinic and that documents he had signed had been used to further that fraud. Nosovsky repeatedly denied having known about the fraud.  Of course, the government did not want to introduce the recording of Nosovsky's statements at trial, but defense counsel sought to introduce them pursuant to Federal Rule of Evidence 803(3), the state of mind exception to the rule against hearsay.  The trial judge, however, ruled the recording inadmissible, and Nosovsky was subsequently convicted of one count of conspiracy to defraud the United States and to commit health care fraud and six counts of health care fraud.

On appeal to the Eleventh CIrcuit, Nosovsky claimed that the trial judge's evidetiary ruling was erroneous because Federal Rule of Evidence 803(3) allows for the admission of statements of the declarant's then existing state of mind and his statements to Rosa evinced an innocent state of mind.  The problem with this argument, however, is that while Federal Rule of Evidence 803(3) allows for the admission of statements of the declarant's then existing state of mind, its specifically excludes statements of memory or belief to prove the fact remembered or believed.  Thus, the Eleventh Circuit found that Nosovsky's statements to Rosa were inadmissible because they were statements of memory to prove facts remembered.  Now, if Rosa instead proposed that a fraud be committed in the future and Nosvsky balked at the idea, his statements would have been admissible because they would have referred to proposed future actions, not alleged past actions.

-CM

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