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State v. Simone


September 30, 2010


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Indictment No. 08-09-1008.

Per curiam.


Argued September 20, 2010

Before Judges Lisa and Sabatino.

Defendant was the subject of a nine-count indictment charging him with: second-degree health care claims fraud (non-practitioner), N.J.S.A. 2C:21-4.3c (count one); third-degree theft by deception, N.J.S.A. 2C:20-4, N.J.S.A. 2C:20-2b(4), and N.J.S.A. 2C:2-6 (count two); third-degree attempted theft by deception, N.J.S.A. 2C:5-1, N.J.S.A. 2C:20-4, N.J.S.A. 2C:20-2b(4), and N.J.S.A. 2C:2-6 (count three); two counts of fourth-degree forgery, N.J.S.A. 2C:21-1a(3) (counts four and five); and four counts of falsifying records, N.J.S.A. 2C:21-4a (counts six, seven, eight and nine). Defendant's application for admission into the pre-trial intervention program (PTI) was rejected, and the court denied his appeal of that rejection. Defendant then moved to dismiss the indictment, and the motion was denied. Pursuant to a plea agreement, defendant then pled guilty to count nine. In accordance with the plea agreement, he was sentenced to one-year probation and ordered to pay $898.17 in restitution to Allstate Insurance Company (Allstate), and the other eight counts were dismissed.*fn1

On appeal, defendant argues:









We reject these arguments and affirm.


Defendant was injured in a vehicular accident in 1981. He was insured by Allstate and was entitled to collect from it personal injury protection (PIP) benefits for medical expenses incurred as a result of injuries sustained in the accident. Because of a dispute about entitlement to those benefits, defendant sued Allstate and obtained a judgment in 1985. Among other things, the judgment ordered that Allstate was "obligated to pay for future prescriptions for medication for pain and depression as prescribed by [defendant]'s treating physicians. This obligation shall be a continuing obligation as long as such medications are medically necessary as determined by [defendant]'s treating physicians."

Between 2000 and 2006, defendant's treating physician regularly prescribed medication for pain and depression arising out of the accident, including Talwin. During those years, defendant had other health insurance. Defendant had the Talwin prescriptions filled on a regular basis at Boyd's Pharmacy (Boyd's) in Mansfield Township. When each prescription was filled, defendant paid a small co-pay and his other insurance company paid the balance due to Boyd's.

On six separate occasions during this time, about once a year, defendant prepared a document purporting to be an invoice issued by Boyd's for the total cost of defendant's Talwin prescriptions for that year. However, the invoices were not prepared by Boyd's but by defendant. They included a forged signature of the pharmacist at Boyd's. Each of these invoices overstated the actual cost of the Talwin prescriptions during the time period covered by the invoice. In the aggregate, the invoices totaled $19,062.79. Defendant's aggregate co-payments over the six years totaled $707. In actuality, defendant's other insurer paid Boyd's only $14,447.62 for the Talwin prescriptions during this time period. Therefore, the forged invoices overstated the cost of the prescriptions by $3908.17.

When Allstate received the last of the invoices, it became suspicious about its legitimacy and contacted law enforcement authorities. The investigation revealed that defendant was receiving double payment during these years. Defendant was charged with health care insurance fraud and related offenses. Before the matter was presented to the grand jury, defendant's attorney submitted to the Deputy Attorney General (DAG), a copy of the 1985 judgment in defendant's civil litigation against Allstate. In his transmittal letter, defendant's attorney made no mention of the collateral source provision in the PIP statute, N.J.S.A. 39:6A-6, which authorizes a recipient of PIP benefits for medical expenses to receive those benefits "without regard to collateral sources," subject to certain exceptions not applicable here. Defendant's counsel was not aware of that provision, nor was the DAG. The DAG promptly responded to defendant's attorney. She said she did not deem the judgment exculpatory because defendant falsified Boyd's invoices and the signature of the Boyd's pharmacists to reflect that defendant paid the full price for Talwin when, in fact, he paid only his co-payment.

Accordingly, when the DAG presented the case to the grand jury on September 9, 2008, she did not present the judgment to the grand jurors or mention it. However, she elicited from the testifying investigator testimony that defendant was involved in an accident in 1981, as a result of which he was "permitted to submit for reimbursement for the prescription drug, Talwin, for pain management as part of his [Allstate PIP] insurance." It was the State's position before the grand jury that double recovery was not permitted and that the entire amount defendant collected from Allstate (and attempted to collect with his last invoice), minus his co-payments, was fraudulently obtained.

After the indictment was returned, defendant applied for PTI. By letter of December 29, 2008, the program director rejected the application. She relied on the nature of the offense, noting that applicants charged with second-degree crimes are presumptively ineligible for PTI enrollment and the burden is on the applicant to show compelling reasons to overcome the presumption. She concluded that defendant presented no such compelling reasons. Further, she relied upon the ongoing nature of defendant's criminal conduct over a period of six years. Finally, she relied upon defendant's prior conviction for violation of a municipal ordinance. The State agreed with the program director.

Defendant appealed his PTI rejection. After hearing oral argument on February 9, 2009, the judge denied the appeal. He first concluded that reliance on the municipal ordinance violation should be completely disregarded. He agreed, however, that defendant's reliance on the 1985 judgment could not constitute compelling reasons to overcome the presumption against enrollment. He further found that the continuing nature of the criminal conduct was an appropriate consideration. He accordingly upheld the rejection of defendant's PTI application.

In connection with the PTI application and the appeal of the PTI rejection, both parties were still unaware of the collateral source provision in the PIP statute. So was the court.

Defendant then moved to dismiss the indictment, and for the first time raised the collateral source provision. Defendant argued that by not providing the grand jury with the 1985 judgment and an instruction regarding the collateral source provision in the PIP statute, the State improperly withheld exculpatory evidence that deprived the grand jury of the ability to make an informed decision.

In responding to defendant's motion, the State conceded that, in light of the collateral source provision in the PIP statute, double recovery was not precluded. Nevertheless, because the aggregate amounts claimed on the forged invoices exceeded the actual cost of Talwin by nearly $4000, the State argued that the result before the grand jury would have been the same if the grand jurors were informed of the collateral source provision. This is because the threshold amount for second-degree health care claims fraud is $1000, see N.J.S.A. 2C:21-4.3c, and a prima facie case was established before the grand jury with respect to all elements of the crime. The State further argued that failure to provide the judgment was inconsequential because the testimony it presented informed the grand jurors that defendant was actually involved in an accident in 1981 in which he was injured and that he was permitted to obtain reimbursement for his prescription drugs from Allstate in connection with his injuries.

The judge agreed with the State's position and denied the motion to dismiss the indictment. We denied defendant's motion for leave to appeal. Although we have not been furnished with the briefs submitted by both parties in the trial court in connection with the motion to dismiss the indictment, it is readily apparent from the transcript of oral argument, as well as the arguments now made before us, that the focus of the motion related to the first count, second-degree health care claims fraud. The motion did not pertain to count nine, the only count to which defendant ultimately pled guilty, which deals strictly with falsifying documents and contains no reference to any threshold dollar amount.

After the parties entered into the plea agreement and defendant pled guilty to count nine on September 17, 2009, he was sentenced in the manner we have stated on October 30, 2009. This appeal followed.


We dispose of defendant's first two arguments quite summarily. These arguments relate to the denial of his motion to dismiss the indictment. First, because he pled guilty only to count nine, and it does not appear that count nine was a subject of the motion to dismiss the indictment, the argument is probably moot. More importantly, defendant's plea was unconditional. See R. 3:9-3(f) (allowing for conditional pleas with the approval of the court and consent of the prosecuting attorney, by which a defendant may reserve the right to appeal from the adverse determination of a specified pretrial motion). Because defendant pled unconditionally, he waived his right to appellate review of the denial prior to entry of his guilty plea of his motion to dismiss the indictment. State v. Knight, 183 N.J. 449, 470-71 (2005). Our court rules grant defendants who plead guilty the automatic right to appeal the denial of only two types of pretrial motions, i.e., motions to suppress physical evidence, R. 3:5-7(d), and motions appealing denial of admission into PTI, R. 3:28(g). Because of defendant's waiver, we need not address the merits with respect to the denial of his motion to dismiss the indictment.


In Point III, defendant argues that his plea allocution did not provide a sufficient factual basis to support his conviction on count nine. He gave this testimony:

THE COURT: And at that time did you present... a document to Allstate Insurance Company for the purpose of receiving a reimbursement?


THE COURT: And when you presented that document, is it a document that you had created yourself?


THE COURT: And did you create it in a manner that you intended for Allstate Insurance Company to believe that it had been created by Boyd's Pharmacy?


Preliminarily, we question whether this argument is properly before us. Defendant has given no indication that he wishes to withdraw his guilty plea to count nine and have all of the other counts of the indictment against him reinstated, which is generally required as a prerequisite to attacking the sufficiency of a factual basis supporting a guilty plea. State v. Mitchell, 374 N.J. Super. 172, 175-76 (App. Div. 2005). Indeed, the relief defendant seeks on appeal is either dismissal of the indictment or admission into PTI. Nevertheless, we address the merits of this argument.

N.J.S.A. 2C:21-4a provides that a person commits the crime of the fourth-degree who "falsifies, destroys, removes, conceals any writing or record, or utters any writing or record knowing that it contains a false statement or information, with purpose to deceive or injure anyone or to conceal any wrongdoing." The offense contains two elements: (1) that the defendant falsified, destroyed, removed, or concealed any writing or record, or uttered any writing or record knowing that it contained a false statement or information; and (2) that defendant did so with the purpose to deceive or injure anyone or conceal any wrongdoing. Model Jury Charge (Criminal), "Falsifying Or Tampering With Records" (1999). Defendant admitted that he prepared and uttered a false document to Allstate, and that his purpose was to deceive Allstate into believing the document had been created by Boyd's Pharmacy so that he could receive reimbursement for prescription drugs. His statement satisfied both elements. We therefore reject this argument.


Finally, defendant argues that he was improperly denied entry into PTI. Unlike our analysis of defendant's argument regarding denial of his motion to dismiss the indictment, our analysis of this issue requires us to take into account the substantive basis upon which that motion was denied. This is because, as we have explained, the motion pertained to the first count of the indictment, the only count charging a second-degree crime, for which there is a presumption against PTI enrollment. See R. 3:28, Guideline 3(i).

Citing State v. Hogan, 144 N.J. 216, 237 (1996), the trial judge noted the prosecutor's obligation to inform the grand jury of "clearly exculpatory" evidence that "squarely refutes an element of the crime in question." The judge then noted that although the collateral source provision in the PIP statute permits double recovery if the insured has other insurance, "it does not entitle him to more than the actual cost." The judge then explained:

The grand jury heard the testimony that Boyd's received $15,154.62 for the Talwin dispensed to defendant, the total payments by the pension-related prescription benefit and his own co-payments. It also received evidence that defendant, through the use of six invoices, claimed, and received from Allstate, $3,908.17 more than that total. Because N.J.S.A. 2C:21-4.3 requires only five acts and an aggregate pecuniary benefits of only $1,000, a prima facie case was made. The fact that the collateral-source provision may entitle one to double recovery for up to the actual value of a medication does not in any way exculpate the use of fraudulent means to receive payments in excess of that value.*fn2

In light of this highly deferential standard, we find no error in the denial of defendant's PTI appeal. Over a span of six years, defendant prepared false and fraudulent documents each year and submitted them to Allstate for the purpose of receiving nearly $4000 more than he was entitled to receive. The State properly considered the nature of the offense and the ongoing course of criminal activity it involved. Contrary to defendant's argument, the State also considered factors personal to defendant that would tend to favor his PTI admission, including his age and first-offender status. The record does not support a conclusion that the State clearly and convincingly committed a patent and gross abuse of discretion by concluding that defendant failed to provide sufficient compelling reasons to overcome the presumption against admission.


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