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State v. Smith


November 30, 2009


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Indictment No. 05-11-0027.

Per curiam.


Submitted November 9, 2009

Before Judges Yannotti and Chambers.

Defendant Dwayne Smith was tried before a jury and found guilty of fourth degree health care claims fraud, in violation of N.J.S.A. 2C:21-4.3(d). Defendant was sentenced to two years of probation and ordered to make restitution in the amount of $8670, with payments of $100 per month. In this appeal, defendant challenges his conviction and the restitution order. For the reasons that follow, we affirm defendant's conviction and remand for a restitution hearing.


We briefly state the relevant facts, drawn from the record. Defendant was charged under State Grand Jury No. 05-10-00178-S with second degree health care claims fraud, contrary to N.J.S.A. 2C:21-4.3(c); and third degree Medicaid Fraud, in violation of N.J.S.A. 30:4D-17(b).

At trial, Dennis Doderer (Doderer), the Deputy Assistant Director of the Division of Medical Assistance and Health Services in the New Jersey Department of Human Services (Division), testified that Medicaid is a federal-state program that pays for health care services that are provided to eligible persons. The Division is responsible for administering New Jersey Medicaid Family Care program, and contracted with Unisys, a data processing company, to manage the claim payments.

Doderer explained that the Medicaid program recognizes and pays certain costs incurred by Medicaid beneficiaries, including livery services for transportation to sites for medical care. Persons who regularly provide livery services to Medicaid beneficiaries must obtain prior authorization from the State.

In June 1990, defendant and Mark J. Williams (Williams), were engaged in a business known as Smith and Williams Transportation Livery Service (SWT). SWT submitted an application to the Division for authorization to provide livery transportation services to Medicaid beneficiaries. Defendant and Williams signed the application, thereby agreeing to the terms and conditions of participating in the program. On August 1, 1990, the Division advised SWT that it had approved its provider application, effective July 23, 1990, and furnished SWT with a copy of its rules and regulations.

In September 2003, defendant submitted an application to the Division for authorization to continue providing livery services to Medicaid beneficiaries. The Division approved the application and defendant executed a new provider agreement on SWT's behalf. In the agreement, defendant was identified as SWT's President. Defendant also signed a form, dated September 15, 2003, which identified him as the person at SWT who is responsible for signing and submitting all provider claims to Medicaid.

Doderer further testified that a provider seeking reimbursement under the Medicaid program must submit a claim form with all pertinent information related to the particular service. Among other things, the form must identify the beneficiary and the date of service. Livery providers also must detail the transportation service for which payment is sought, state the fee charged, and submit the claim to Unisys for processing. In addition, the livery providers must complete "trip sheets" for the services and maintain those documents for at least five years.

Doderer said that New Jersey processes more than forty million Medicaid claims a year for a variety of providers and, consequently, cannot review each and every claim. He stated that the State relies upon providers to furnish the "necessary information on the claim form[.]" Doderer asserted that the State relies "heavily on the integrity of the provider to . . . submit a legitimate claim form."

The State also presented evidence that SWT submitted twenty-seven claims for livery services that SWT said were provided to E.D. in the period from May 5, 2003, to January 29, 2004. SWT did not have any trip sheets for these claims. Moreover, there were no documents substantiating that E.D. had medical appointments on the dates the services were purportedly provided. Seven of the claims were for transportation services supposedly provided while E.D. was hospitalized. Four of the claims related to a time when E.D. was confined to a wheelchair.

Medicaid does not pay for livery services for persons who use wheelchairs. SWT was paid $858 on these claims.

In addition, the State established that SWT submitted twenty claims for livery services purportedly provided to M.B. in the period from September 12, 2003, to March 30, 2004. SWT did not have trip sheets for these claims, and there was no documentation indicating that M.B. had medical appointments on the dates SWT claimed the services were provided. The total amount of the claims was $960; SWT was paid $912 on nineteen of the claims.

The State also established that SWT submitted five claims for livery services SWT said it provided to M.T. in January 2004. SWT did not have any trip sheets for these claims, and there were no documents indicating that M.T. had any medical appointments on four of the dates SWT purportedly provided the services. The fifth claim was for services supposedly provided on a date when M.T. had a medical appointment with a doctor who had an office on the ground floor of M.T.'s building. The total amount of these five claims was $150. SWT received payment for all five claims.

The State additionally established that SWT submitted 156 claims for livery services purportedly provided to E.F., in the period from March 21, 2003, through May 28, 2004. SWT had only fourteen trip sheets for these claims, and there was no documentation indicating that E.F. had medical appointments on the dates these services were supposedly provided. The total amount of the claims was $5262. SWT received payment on all of these claims.

The State also showed that SWT provided livery services to S.B., a four-year old child, whose grandmother accompanied him on all of his doctors' visits. SWT submitted forty-five claims for livery services purportedly provided to S.B. and his grandmother from October 27, 2003, to May 17, 2004, but there was no documentation indicating that S.B. or his grandmother had medical appointments on the dates SWT claimed the services were provided. Moreover, SWT had a trip sheet for only one of these claims. The total amount of the claims was $1440. SWT was paid $1200 on forty of these claims.

Defendant did not testify at trial, and he did not call any witnesses on his own behalf. The jury found defendant not guilty of second degree health care claims fraud but guilty of fourth degree health care claims fraud, a lesser included offense. The jury also found defendant not guilty of third degree Medicaid fraud.

Defendant appeals and raises the following arguments for our consideration:










We turn first to defendant's contention that the trial court erred in charging the jury. Defendant argues that the court should have instructed the jury on the mental state of "negligently" and provided an instruction on mistake of fact. Since defendant did not request these instructions during the trial, we consider whether the court erred in failing to provide the instructions and, if so, whether "the error was clearly capable of producing an unjust result." R. 2:10-2.

Here, defendant was charged with second degree health care claims fraud, in violation of N.J.S.A. 2C:21-4.3(c), which provides that a person who is not a practitioner, is guilty if he or she "knowingly commits five or more acts of health care claims fraud and the aggregate pecuniary benefit obtained or sought to be obtained is at least $1,000." N.J.S.A. 2C:21-4.2 defines "health care claims fraud" as making, or causing to be made, a false, fictitious, fraudulent, or misleading statement of material fact in, or omitting a material fact from, or causing a material fact to be omitted from, any record, bill, claim or other document, in writing, electronically or in any other form, that a person attempts to submit, submits, causes to be submitted, or attempts to cause to be submitted for payment or reimbursement for health care services.

Defendant also was charged with Medicaid fraud, in violation of N.J.S.A. 30:4D-17(b). That statute generally provides that a person is guilty of a high misdemeanor if he or she "[k]nowingly and willfully makes or causes to be made any false statement or representation of a material fact" in a Medicaid claim with an intent to secure unauthorized payments or benefits.

As stated previously, defendant was found not guilty of these charges but guilty of fourth degree health care claims fraud, in violation of N.J.S.A. 2C:21-4.3(d). That statute provides that a person, who is not a practitioner, is guilty of the offense if he or she "recklessly commits health care claims fraud."

The trial court provided instructions to the jury on the mental states of "knowingly" and "recklessly." Defendant contends that, because he asserted that the claims at issue were the result of mistakes on his part, the court was required to instruct the jury on the mental state of "negligently." We disagree.

In State v. Concepcion, 111 N.J. 373, 374 (1988), the defendant was convicted of reckless manslaughter. The trial court instructed the jury on the mental state of "recklessly." Id. at 377. While deliberating, the jury asked the court to clarify the definition of recklessness. Id. at 378. The court repeated the statutory definition of the offense. Ibid.

The Court reversed the defendant's conviction because the trial court erred by "selectively" focusing its charge on only "one aspect" of the critical events that led to the victim's death. Id. at 380-81. The Court stated that the charge may have "misled the jury and influenced it to return a guilty verdict based solely on that conduct." Id. at 381.

The Court added that the jury may not have sufficiently understood the concept of recklessness and suggested that the trial court "might have" explained that concept by comparing it to other mental states. Ibid. The Court said that "[t]he jury's understanding of these distinctions could have been enhanced if these mental states had been clarified by illustrative examples." Ibid.

In this case, the jury was instructed on the mental states applicable to the offenses for which defendant was charged and the lesser included offense for which he was convicted. There is nothing in the record to suggest that the jury was confused about the concept of "recklessly." Indeed, unlike the situation in Concepcion, the jury did not ask the court to clarify the meaning of "recklessly." We therefore conclude that the trial court was not required to contrast "recklessly" with "negligently" for purposes of illustration and the absence of that instruction was not plain error.

Defendant also contends that the court should have instructed the jury on mistake of fact. Again, we disagree.

N.J.S.A. 2C:2-4(a) provides in pertinent part that "[i]gnorance or mistake as to a matter of fact or law is a defense if the defendant reasonably arrived at the conclusion underlying the mistake and: (1) [í]t negatives the culpable mental state required to establish the offense[.]" This statute "provides for a complete defense to criminal liability based on a mistake of fact or matter of law." State v. Wickliff, 378 N.J. Super. 328, 334 (App. Div. 2005) (citing State v. Pena, 178 N.J. 297, 306 (2004)). The statute "serves to emphasize that a mistake may negate the culpability element required for conviction of an offense." Ibid.

Defendant argues that a "mistake of fact" instruction should have been provided here because at times he provided livery services to E.F. without having her sign the required trip sheets. E.F. testified that SWT transported her to various medical appointments and defendant was the driver "[e]ighty percent of the time." E.F. stated that there were times when the driver told her that he did not have the trip sheet and she "would sign them later."

In our judgment, E.F.'s testimony did not provide a factual basis for a "mistake of fact" charge. E.F.'s testimony did not establish that defendant acted in the mistaken belief that he was not required to complete the paper work for all services provided, nor did it establish that defendant mistakenly believed that he could submit claims for reimbursement when he had not provided the services.

Simply put, defendant's occasional failure to present E.F. with a trip sheet for her signature did not negate the mental state required for conviction of fourth degree health care claims fraud. Thus, the trial court's failure to instruct the jury on "mistake of fact" was not an error, let alone an error "clearly capable of producing an unjust result." R. 2:10-2.


We next consider defendant's contention that he was denied a fair trial because of the following remarks made by the prosecutor in summation:

Some of you may have heard of the term Slick Willy. Slick Willy was a real bank robber from the 1920's. His name was Willy Sutton. After he was caught, they said hey, Willy, why'd you rob banks? He said that's where the money is. Ladies and gentlemen, [defendant] went after Medicaid because Medicaid is where the money is.

Defendant argues that the comments were improper "name-calling" and "an improper emotional solicitation." Defendant did not object to the prosecutor's remarks at trial.

Improper comments by a prosecutor will not warrant reversal of a conviction unless the remarks were "so egregious that [they] deprived defendant of a fair trial." State v. Ramseur, 106 N.J. 123, 322 (1987), cert. denied, 508 U.S. 947, 113 S.Ct. 2433, 124 L.Ed. 2d 653 (1993). "In determining whether the prosecutor's comments were sufficiently egregious to deny defendant a fair trial, we consider the tenor of the trial and the responsiveness of counsel and the court to the improprieties when they occurred." State v. Timmendequas, 161 N.J. 515, 575 (1999), cert. denied, 534 U.S. 858, 122 S.Ct. 136, 151 L.Ed. 2d 89 (2001) (citing State v. Scherzer, 301 N.J. Super. 363, 433 (App. Div. 1997)).

"Generally, if no objection was made to the improper remarks, the remarks will not be deemed prejudicial." Ibid. (citing Ranseur, supra, 106 N.J. at 323). Indeed, counsel's "[f]ailure to make a timely objection indicates that defense counsel did not believe the remarks were prejudicial at the time they were made." Ibid. (citing State v. Irving, 114 N.J. 427, 444 (1989)).

We are not convinced that the prosecutor's comments were improper. The prosecutor did not engage in name-calling, nor was the brief reference to Willie Sutton an improper appeal to the juror's emotions. Even were we to conclude that the prosecutor erred by making the comments, the prosecutor's remarks were relatively insignificant when considered in light of the remainder of the prosecutor's statements in her summation. Defense counsel apparently did not believe the comments were prejudicial, nor do we. We therefore reject defendant's contention that the prosecutor's comments denied him of his right to a fair trial.


Defendant also argues that the trial court erred by failing to give him a formal hearing on restitution.

When sentencing defendant, the court observed that it had "to hold a hearing" on defendant's ability to pay. The court then engaged in a discussion with counsel and defendant regarding restitution. The court accepted the prosecutor's representation that during the trial the State had proven a fraud totaling $8670, but acknowledged that it had not reviewed the evidence on that issue.

The court also considered whether defendant had the ability to pay $8670 in restitution. Defendant was forty-two years old at the time. Defendant is single and has no children. Defendant stated that, although he was retired from his job as a special police officer in New York City, he was not receiving a pension.

Defendant additionally asserted that he would have difficulty finding employment while he is on probation. He said he had been earning $24,000 a year as a security guard but was unemployed at the time. He also claimed that Medicaid owed him $51,000. Defendant said that he was living with his parents and therefore had no housing expenses.

The prosecutor argued that defendant had sufficient resources to pay restitution as well as a substantial fine. The prosecutor stated that SWT had owned multiple vehicles, which it used in the business. However, defense counsel asserted that, towards the end of the State's investigation, SWT had been renting vehicles for use in its business. The prosecutor noted that the State had not undertaken an analysis of any bank accounts defendant might have.

The court found that defendant did not have resources to write a check to cover "what the [S]tate contends was proved at the trial." The court therefore ordered defendant to pay restitution in the amount of $8670, at a rate of $100 per month. We are convinced that further review of the court's restitution order is required.

The record does not support the court's finding that the State established that defendant obtained $8670 through the submission of fraudulent claims. Although that is the full amount of the claims at issue, Medicaid did not pay all of the claims.

Moreover, it is unclear from the record whether defendant has the ability to pay $8670, even in $100 monthly installments. The State did not establish the resources that are available to defendant. There also was no documentation showing that defendant was entitled to receive a $51,000 payment from Medicaid, although defendant said that was so. Furthermore, defendant was not working at the time and the prospects for his employment appeared questionable.

We remand the matter to the trial court for a restitution hearing. In determining the amount of restitution, the court may rely upon the proofs presented at trial. The court should determine the amount of fraudulent claims for which defendant actually received payment. The court should consider whether Medicaid still owes defendant $51,000, and whether Medicaid could offset the amount of the fraudulent claims proven in this case against any monies due to defendant. The State and defendant should be permitted to present any additional evidence that may bear upon defendant's ability to pay. The court should make appropriate findings on these issues.

Affirmed in part and remanded in part for a restitution hearing. We do not retain jurisdiction.


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