United States District Court, E.D. Virginia, Norfolk Division
MARK S. DAVIS, District Judge.
This matter is before the Court on two motions for a new trial filed by criminal defendant W. Wayne Perry ("Defendant"), ECF Nos. 170, 172, as well as a renewed Motion for Judgment of Acquittal, ECF No. 173. The United States of America (the "Government") has filed a consolidated brief in response to Defendant's motions. Defendant thereafter filed a consolidated reply brief, and all motions are therefore ripe for review.
After careful consideration of the parties' submissions, for the reasons set forth below, supplemented by the reasons stated on the record at trial, the Court DENIES each of Defendant's motions.
I. Procedural Background
On February 5, 2014, a federal grand jury returned an eighteen count superseding indictment charging Defendant with various health care fraud felony offenses, as well as alteration of records and aggravated identity theft felony offenses. On September 16, 2014, at the conclusion of a three week jury trial, the jury returned a verdict finding Defendant guilty as to all eighteen counts. Defendant has since filed the three motions identified above, two of which seek a new trial on certain specified counts, with the third seeking a judgment of acquittal or, alternatively, a new trial based on the sufficiency of the evidence. Each motion is addressed separately below.
II. Standard of Review
A. New Trial
Rule 33 of the Federal Rules of Criminal Procedure provides that, "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33(a). The Fourth Circuit has observed that "a court should exercise its discretion to grant a new trial sparingly." United States v. Perry , 335 F.3d 316, 320 (4th Cir. 2003) (internal quotation marks and citation omitted). Moreover, when a "motion for a new trial [i]s premised on an instructional error to which [the defendant] did not object... a district court should deny a motion for a new trial in the absence of plain error." United States v. Sprouse, 517 F.Appx. 199, 204 (4th Cir. 2013) (citing Fed. R. Crim. P. 52(b)). The United States Supreme Court has interpreted the "plain error" standard as having four criteria: "(1) there is an error'; (2) the error is clear or obvious, rather than subject to reasonable dispute'; (3) the error affected the [defendant's] substantial rights, which in the ordinary case means' it affected the outcome of the district court proceedings'; and (4) the error seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.'" United States v. Marcus , 560 U.S. 258, 262 (2010) (quoting Puckett v. United States , 556 U.S. 129, 135 (2009)).
B. Judgment of Acquittal
Federal Rule of Criminal Procedure 29 allows a district court to enter a judgment of acquittal for "any offense for which the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). A court must sustain a jury's guilty verdict in a criminal case "if there is substantial evidence, taking the view most favorable to the Government, to support it.'" United States v. Cameron , 573 F.3d 179, 183 (4th Cir. 2009) (quoting United States v. Burgos , 94 F.3d 849, 862 (4th Cir. 1996) (en banc)). "[Substantial evidence is evidence that a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant's guilt beyond a reasonable doubt.'" Id . (quoting Burgos , 94 F.3d at 862). "The jury, not the reviewing court, assesses the credibility of witnesses and resolves any conflicts in the evidence presented." United States v. Lentz , 383 F.3d 191, 199 (4th Cir. 2004).
A. ECF No. 172
Defendant seeks a new trial on Counts Two through Thirteen of the superseding indictment based on the assertion that the Court incorrectly defined the word "willfully" in its charge to the jury. For the reasons set forth below, the Court finds that a new trial is not warranted based on such claim of error.
Counts Two through Thirteen charge that Defendant "knowingly and willfully" made false or fraudulent statements in connection with a health care matter, or that Defendant "knowingly and willfully" executed a scheme or artifice to defraud a health care benefit program. 18 U.S.C. §§ 1035, 1347. Prior to trial, both the Government and Defendant separately submitted a proposed jury instruction defining "willfully" as requiring that Defendant acted with the general knowledge that his conduct was "unlawful." The Court, however, selected a jury instruction that defined "willfully" as only requiring that Defendant acted "deliberately, voluntarily, and intentionally." Such "baseline" mens rea requirement was previously adopted by the United States Court of Appeals for the Fourth Circuit as a proper interpretation of the word "willfully" as used in the general statute criminalizing false statements. United States v. Daughtry , 48 F.3d 829, 831-32 (4th Cir. 1995), vacated on other grounds 516 U.S. 984 (1995), reinstated in relevant part 91 F.3d 675 (1996). Although the parties in the instant case were afforded an opportunity to review and object to the Court's proposed jury instructions, neither the Government nor the Defendant objected to the instruction defining "willfully" that was selected by the Court. Such instruction is therefore subject to "plain error" review. Sprouse, 517 F.Appx. at 204.
Defendant's post-trial assertion that this Court clearly erred by providing the jury a legally erroneous instruction is based on a line of cases interpreting the word "willfully" to have one of two elevated mens rea definitions. In Ratzlaf v. United States , 510 U.S. 135 (1994), the Supreme Court adopted a definition of the term "willfully" that required the government to prove not only that the defendant intentionally structured financial transactions in a manner designed to evade the requirement that the financial institution report such transactions to the Secretary of the Treasury, but that he "knew the structuring he undertook was unlawful." Id. at 136-38; see Cheek v. United States , 498 U.S. 192, 201 (1991) ("Willfulness, as construed by our prior decisions in criminal tax cases, requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty.") (emphasis added). Subsequent to Ratzlaf, in Bryan v. United States , 524 U.S. 184 (1998), the Supreme Court adopted a slightly more relaxed definition of the word "willfully" as used in a firearms trafficking statute, requiring only that the defendant had a generalized knowledge that his conduct was unlawful. Id. at 196. In Bryan, the Supreme Court distinguished the standard applied in Cheek and Ratzlaf, noting that those cases involved "highly technical statutes that presented the danger of ensnaring individuals engaged in apparently innocent conduct." Id. at 194.
1. The Instruction Given in this Case is an Accurate Statement of the Law
Guided by Ratzlaf, Bryan, and other Supreme Court and Fourth Circuit precedent, the Fourth Circuit recently repeated the two different heightened mens rea definitions of the word "willfully" set forth immediately above. United States v. Bishop , 740 F.3d 927, 934 (4th Cir. 2014). Although the Fourth Circuit did not reject, distinguish, or otherwise discuss the "baseline" mens rea requirement that was previously approved by the Fourth Circuit in Daughtry, it did note that the definitions of "willfully" as applied in both Ratzlaf and Bryan move away from the "fundamental canon of criminal law that ignorance of the law is no excuse.'" Id . (quoting United States v. George , 386 F.3d 383, 392 (2d Cir. 2004)). In light of the Fourth Circuit's recognition of the fact that even the less rigorous Bryan standard moves away from such fundamental canon,  it does not appear that the Fourth Circuit's failure to discuss the "baseline" mens rea standard is tantamount to a sweeping rejection of such standard. This is particularly the case because, in Bishop, both the defendant and the government agreed that "knowledge of an export's illegality" was necessary to satisfy the "willfulness requirement" of the statute at issue in that case, thus obviating the need for the Court to discuss the potential applicability of an even lesser "baseline" mens rea standard that only required voluntary and intentional acts. Id. at 932. Moreover, the statue at issue in Bishop, similar to the statute at issue in Bryan, criminalized willful violations of "any provision" of the Arms Control Export Act. 22 U.S.C. § 2778(c). In contrast, here, the statutes at issue criminalize "knowingly and willfully" making false statements or "knowingly and willfully" executing a scheme to defraud, making no reference to "willfully violating" the statute itself. 18 U.S.C. §§ 1035, 1347.
Exiting the arena of illegal firearms trafficking, which was at issue in both Bryan and Bishop, and returning to the arena of federal fraud crimes, which is at issue here, the Fourth Circuit has not only previously approved of the "baseline" mens rea requirement when defining the word "willfully, " but in the same opinion, expressly rejected the applicability of a heightened mens rea standard requiring proof that the defendant had knowledge that his conduct was unlawful. Daughtry , 48 F.3d at 831-32. In Daughtry, the Fourth Circuit was interpreting the mens rea phrase "knowingly and willfully" as used in 18 U.S.C. § 1001, the general false statements statute located in the same chapter as § 1035. As explained by the Fourth Circuit in Daughtry:
The statute of conviction, 18 U.S.C. § 1001, provides:
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10, 000 or imprisoned not more than five years, or both. At trial, [the defendant] requested the following instruction on willfulness: "An act is done wilfully' if done voluntarily and intentionally, and with the specific intent to do something the law forbids; that is to say, with bad purpose either to disobey or to disregard the law." The district court ...