Summary
In People v. Paredes (2021) 61 Cal.App.5th 858, the office administrator of a radiology practice (Parades) entered into an oral agreement with the owner of a medical clinic through which the radiology practice would pay the clinic a referral fee for patients referred to the radiology practice for magnetic resonance imaging (MRI) scans.
Summary of this case from People v. SlaterOpinion
D076086
02-18-2021
The PEOPLE, Plaintiff and Respondent, v. Gonzalo Ernesto PAREDES, Defendant and Appellant.
Spolin Law and Aaron Spolin, Los Angeles, for Defendant and Appellant. Xavier Becerra, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Arlene A. Sevidal and James M. Toohey, Deputy Attorneys General, for Plaintiff and Respondent.
Certified for Partial Publication.
Pursuant to California Rules of Court, rule 8.1110, this opinion is certified for publication with the exception of part III.A and part III.B of the Discussion.
Spolin Law and Aaron Spolin, Los Angeles, for Defendant and Appellant.
Xavier Becerra, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Arlene A. Sevidal and James M. Toohey, Deputy Attorneys General, for Plaintiff and Respondent.
AARON, J.
I.
INTRODUCTION
A jury found Gonzalo Ernesto Paredes guilty of 35 counts of offering or delivering compensation for workers' compensation patient referrals ( Lab. Code, § 3215 ) (workers' compensation fraud) and 16 counts of concealing an event affecting an insurance claim ( Pen. Code, § 550, subd. (b)(3) ) (insurance fraud).
The trial court sentenced Paredes to an aggregate term of five years in prison, consisting of the upper term of five years on one of the counts of insurance fraud, concurrent five-year upper terms on the other counts charging that same offense, and concurrent three-year upper terms on each of the workers' compensation fraud counts.
On appeal, Paredes claims that the prosecutor committed misconduct during his examination of one of the witnesses and during closing argument by suggesting the existence of facts not in evidence. Paredes also maintains that the trial court erred in excluding, as hearsay, an unavailable witness's testimony from a prior federal trial. Finally, Paredes contends that there is insufficient evidence to support the verdicts.
We affirm the judgment.
II.
FACTUAL BACKGROUND
In approximately 2002, Ruben Martinez (Ruben), and his son, Alex Martinez (Alex), opened a medical clinic in Calexico. In 2009, a chiropractor, Dr. Steven Rigler, moved his practice into the clinic and examined patients who were referred to him by Ruben and Alex and were receiving workers' compensation benefits. Dr. Rigler did not pay rent or utilities or contribute to the salaries of clinic staff. In exchange, Dr. Rigler permitted Ruben and Alex to determine the providers to whom Dr. Rigler's patients would be referred for ancillary medical services. These ancillary service providers compensated Ruben and Alex for the referrals, and Ruben and Alex split the referral fees evenly.
In approximately 2010, Paredes was the office administrator for an entity called Advanced Radiology, owned by Dr. Ronald Grusd. As described in greater detail in part III.A, post , Ruben entered into an oral agreement with Paredes, on behalf of Dr. Grusd, through which Advanced Radiology would pay Ruben a referral fee for patients referred to Advanced Radiology for magnetic resonance imaging (MRI) scans. Thereafter, Paredes implemented the agreement with Ruben by, among other activities, receiving invoices from Ruben for patient referral fees and arranging payment of those fees to Ruben.
Ruben would split the proceeds with Alex evenly per their agreement.
In 2014, Alex began to manage Dr. Rigler's chiropractic clinics in San Diego and Escondido. Dr. Rigler gave Alex control over the referral of his patients to outside providers for ancillary services. Alex entered into an arrangement with Paredes whereby Alex referred Dr. Rigler's patients to Advanced Radiology in exchange for compensation from Advanced Radiology. As with the Calexico clinic, Paredes played an integral part of implementing the referral scheme with respect to the San Diego and Escondido clinics, including establishing the referral arrangement and arranging payment of referral fees to Alex.
An entity owned by Dr. Grusd billed insurance companies for services provided to the patients referred to Advanced Radiology by Ruben and Alex.
As noted in footnote 11, post , Paredes failed to transmit any of the exhibits introduced as evidence to this court, and we were thus unable to review the exhibits demonstrating this fact. However, the prosecutor referred to these exhibits during closing argument and Paredes does not dispute that an entity owned by Dr. Grusd billed insurance companies for services provided to patients referred to Advanced Radiology by Ruben and Alex.
III.
DISCUSSION
See footnote *, ante .
C. There is substantial evidence to support the verdicts
Paredes claims that there is insufficient evidence in the record to support the jury's guilty verdicts with respect to either the workers' compensation fraud counts ( Lab. Code, § 3215 ) or the insurance fraud counts ( Pen. Code, § 550, sub. (b)(3)).
1. Standard of Review
In People v. Smith (2005) 37 Cal.4th 733, 738–739, 37 Cal.Rptr.3d 163, 124 P.3d 730, the California Supreme Court outlined the standard of review governing claims of insufficient evidence in criminal cases:
"In reviewing a sufficiency of evidence claim, the reviewing court's role is a limited one. ‘ "The proper test for determining a claim of insufficiency of evidence in a criminal case is whether, on the entire record, a rational trier of fact could find the defendant guilty beyond a reasonable doubt. [Citations.] On appeal, we must view the evidence in the light most favorable to the People and must presume in support of the judgment the existence of every fact the trier could reasonably deduce from the evidence. [Citation.]" ’ [Citations.] [¶] ‘ "Although we must ensure the evidence is reasonable, credible, and of solid value, nonetheless it is the exclusive province of the
trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts on which that determination depends. [Citation.] Thus, if the verdict is supported by substantial evidence, we must accord due deference to the trier of fact and not substitute our evaluation of a witness's credibility for that of the fact finder." ’ "
"Thus, to prevail on a sufficiency of the evidence argument, the defendant must present his case to us consistently with the substantial evidence standard of review. That is, the defendant must set forth in his opening brief all of the material evidence on the disputed elements of the crime in the light most favorable to the People, and then must persuade us that evidence cannot reasonably support the jury's verdict. [Citation.] If the defendant fails to present us with all the relevant evidence, or fails to present that evidence in the light most favorable to the People, then he cannot carry his burden of showing the evidence was insufficient because support for the jury's verdict may lie in the evidence he ignores." ( People v. Sanghera (2006) 139 Cal.App.4th 1567, 1574, 43 Cal.Rptr.3d 741 ( Sanghera ).)
2. There is substantial evidence to support the jury's verdicts finding Paredes guilty of violating Labor Code section 3215
a. Governing law
Labor Code section 3215 provides:
"Except as otherwise permitted by law, any person acting individually or through his or her employees or agents,
who offers, delivers, receives, or accepts any rebate, refund, commission, preference, patronage, dividend, discount or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring clients or patients to perform or obtain services or benefits pursuant to this division, is guilty of a crime."
b. The People presented overwhelming evidence of Paredes's violations of Labor Code section 3215, which Paredes fails to address in his brief on appeal
Ruben testified that Paredes told him that Advanced Radiology would provide compensation for referrals. Ruben also stated that he reached an agreement with Paredes pursuant to which Ruben would refer patients to Advanced Radiology for MRI scans in exchange for $180 per scan. Ruben stated further that he signed a written marketing agreement that contradicted the terms of the oral agreement after Paredes assured Ruben that he would not be required to comply with the terms of the written agreement, which required the legitimate marketing of Advanced Radiology. Ruben further explained that he was not provided with promotional materials and he did not attempt to market Advanced Radiology. Ruben stated that he was in frequent contact with Paredes concerning various aspects of their referral agreement, including requesting and receiving payments.
Alex testified that he reached a similar agreement with Paredes concerning patient referrals from clinics in San Diego and Escondido to Advanced Radiology. For example, in discussing the scheme, the prosecutor asked Alex, "Did you refer patients for money?" Alex responded, "Yes." Alex stated that he sent invoices to Paredes for referral fees that he was owed pursuant to the scheme, and that he communicated with Paredes about those fees. The People also presented evidence that Alex received referral fees pursuant to the scheme.
In addition, the People presented recordings of conversations that Dr. Rigler had recorded that corroborated Alex and Ruben's testimony. In one of the conversations, Paredes, Alex and Ruben discussed amounts that Advanced Radiology owed for referrals. The People also offered in evidence numerous documents that corroborated the testimony above, including invoices, e-mails, and checks consistent with Alex and Ruben's testimony concerning the scheme.
The People also presented evidence tending to show Paredes's consciousness of guilt. For example, Paredes rounded payments to Alex and Ruben up or down so that they did not appear "funny," he split up large payments so as not to attract attention, he instructed Alex not to include "numbers" in e-mails requesting payment, and he referred to a check that he was going to send as a "document."
Paredes fails to discuss any of this evidence in his briefing on appeal or to explain why it is insufficient to support the jury's verdicts finding him guilty of violating Labor Code section 3215. Accordingly, we conclude that Paredes has failed to demonstrate that there is insufficient evidence to support the jury's verdicts finding him guilty of violating Labor Code section 3215. (See Sanghera, supra , 139 Cal.App.4th at p. 1574, 43 Cal.Rptr.3d 741 [describing an appellant's burden in raising a claim of insufficiency of the evidence on appeal].)
Further, despite raising a claim that the evidence is insufficient to support his convictions, Paredes's appellate counsel has not requested transmission to this court of any of the documentary exhibits offered at trial. (See Cal. Rules of Court, rules 8.320(e) & 8.224(a).) We remind counsel that it is appellant's responsibility to have transmitted to this court all exhibits that are necessary to permit review of appellant's claims on appeal.
c. Paredes's arguments to the contrary are unpersuasive
Paredes claims that he could not be found guilty of violating Labor Code section 3215 because he was merely "an office manager" and "[t]he offer or delivery of compensation," came only from Dr. Grusd. We are not persuaded. A reasonable jury could find that a person, such as Paredes, who negotiates kickbacks, reviews invoices for kickbacks, and facilitates the payment of kickbacks (see part III.C.2.b, ante ), has "offer[ed] or deliver[ed] ... consideration ... as compensation," as defined in Labor Code section 3215. Further, Paredes cites no case law that supports his contention that a person who engages in such conduct does not commit a criminal offense.
As noted in part III.C.2.b, ante , in presenting his sufficiency claim on appeal, Paredes fails to address any of the evidence related to this conduct.
Paredes also argues that he lacked the mens rea to commit a violation of Labor Code section 3215 because his "knowledge was limited to an understanding that his boss, Dr. Grusd, had a contract for legitimate marketing services with [Alex and Ruben]." In light of the evidence discussed in part III.C.2.b, ante , the jury could clearly find that Paredes knew that he was offering or delivering compensation for patient referrals. In short, the People presented ample evidence that Paredes had sufficient knowledge of the referral scheme to support the jury's guilty verdicts on the Labor Code section 3215 counts.
Paredes also suggests that the People were required to prove that he had "knowledge that the payments made were illegal .... " We are aware of no authority supporting this assertion, and Paredes cites none. Knowledge of illegality is not required in order to prove a violation of Business and Professions Code section 650, a related antikickback statute. (See People v. Guiamelon (2012) 205 Cal.App.4th 383, 405, 140 Cal.Rptr.3d 584 ["under [Business and Professions Code section 650 ] the defendant need not know his or her conduct is unlawful"].) Further, the jury was specifically instructed, "It is not a defense to the crime of Labor Code Section 3215 that the defendant did not know he was breaking the law or that he believed his act was lawful."
In addition, even if there were a requirement that Paredes knew that kickbacks was illegal, the People presented evidence that Paredes has such knowledge. Specifically, a Department of Insurance investigator testified that she met with Paredes in 2015 and that he told her that he understood that kickbacks were illegal.
3. There is substantial evidence to support the jury's verdicts finding Paredes guilty of violating Penal Code section 550, subdivision (b)(3)
Paredes contends that there was insufficient evidence to find him guilty of violating Penal Code section 550, subdivision (b)(3) pursuant to the natural and probable consequences doctrine of conspirator liability. Specifically, he argues that a violation of Penal Code section 550, subdivision (b)(3) is not a natural and probable consequence of a violation of Labor Code section 3215 because "[c]oncealing a fact from an insurance company is not ‘closely related’ to an alleged payment of a kickback for the referral of patients." a. Governing law
Penal Code section 550 provides in relevant part:
"(b) It is unlawful to do, or to knowingly assist or conspire with any person to do, any of the following:
"[¶] ... [¶]
"(3) Conceal, or knowingly fail to disclose the occurrence of, an event that affects any person's initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled."
b. Natural and probable consequences doctrine
" ‘[A] defendant may be held criminally responsible as an accomplice not only for the crime he or she intended to aid and abet (the target crime), but also for any other crime [nontarget crime] that is the "natural and probable consequence" of the target crime.’ [Citation.] To find an aider and abettor guilty of a nontarget crime under the natural and probable consequences theory, the jury must find that the defendant aided and abetted the target crime, that a coparticipant in the target crime also committed a nontarget crime, and that this nontarget crime was a natural and probable consequence of the target crime the defendant aided and abetted." ( People v. Hardy (2018) 5 Cal.5th 56, 92, 233 Cal.Rptr.3d 378, 418 P.3d 309.)
"The natural and probable consequences doctrine applies equally to aiders and abettors and conspirators." ( People v. Covarrubias (2016) 1 Cal.5th 838, 901, 207 Cal.Rptr.3d 228, 378 P.3d 615.)
c. Application
In accordance with the elements of the natural probable consequences doctrine outlined above, the People's theory at trial was that: (1) Paredes conspired with Dr. Grusd to commit the target crime of workers' compensation fraud ( Lab. Code, § 3215 ) (i.e., by paying referral fees for workers' compensation patient referrals); (2) Dr. Grusd committed the nontarget crime of insurance fraud ( Pen. Code, § 550, subd. (b)(3) ) (i.e., by concealing that kickbacks had been paid for the referrals when billing insurance companies); and (3) insurance fraud was the natural and probable consequence of the workers' compensation fraud. Paredes challenges only the final element, contending that concealing information from an insurance company pertaining to a patient's insurance claim ( Pen. Code, § 550, subd. (b)(3) ) is not " ‘closely related’ " to the payment for a referral of the patient ( Lab. Code, § 3215 ). Paredes's argument is unpersuasive.
For example, the prosecutor stated in closing argument:
"Now, think about the liability of co-conspirators.... [Paredes] conspired to commit a violation of Labor Code [section] 3215, illegal kickbacks; a member of the conspiracy committed the 550(b)(3), the insurance fraud, the submitting of bills to the insurance company, and here it's Dr. Grusd. It's Dr. Grusd who's submitting the bills to the insurance company, so a member of the conspiracy, Dr. Grusd, committed the insurance fraud. And that insurance fraud under 550(b)(3) is a natural and probable consequence of the common plan or design of the crime that the defendant conspired to commit, illegal kickbacks. Is it a natural and probable consequence? Then [Paredes is] guilty of the [Penal Code, section] 550 [, subdivision] (b)(3)."
The People presented ample evidence from which the jury could find that the purpose of providing compensation for patient referrals was to obtain payment from insurance companies for services provided to those patients. The People also presented evidence that it is unlawful for providers to seek reimbursement from insurance companies for services performed on patients referred to them in exchange for compensation, and that insurance companies are forbidden by law from paying claims for services that they know have been referred in exchange for compensation. Thus, Dr. Grusd's commission of the crime of concealing the kickbacks from the insurance companies was closely related to the conspiracy to pay the kickbacks, since the purpose of the kickback scheme (to obtain money from insurance companies for the provision of services) could not have been accomplished but for the concealment of the kickbacks.
For example, Ruben testified:
"[The prosecutor:] So you and your son refer patients from your clinics to medical providers who then provide treatment and bill insurance companies?
"[Ruben:] Yes.
"[The prosecutor:] And in exchange those medical providers give you money back, correct?
"[Ruben:] Correct.
"[The prosecutor:] On a per-patient-per-service basis?
"[Ruben:] Yes, that's pretty much how it worked."
Accordingly, we conclude that insurance fraud ( Pen. Code, § 550, subd. (b)(3) ) was a natural and probable consequence of the conspiracy to commit workers' compensation fraud ( Lab. Code, § 3215 ), in which Paredes participated. We therefore conclude that there is substantial evidence to support the jury's verdicts finding Paredes guilty of violating Penal Code section 550, subdivision (b)(3) pursuant to the natural and probable consequences doctrine. IV.
DISPOSITION
The judgment is affirmed.
WE CONCUR:
McCONNELL, P. J.
O'ROURKE, J.