United States v. Jeffrey Jay Rutgard

Jeffrey Jay Rutgard appeals his conviction of numerous counts of mail fraud on, and false claims to, Medicare, of counts of mail fraud on other insurers, and of transactions in money derived from the frauds. He appeals as well a judgment of forfeiture. He also appeals his sentence, challenging the enhancements and the calculation of loss that led to the imposition of a sentence of 1114 years and an order of restitution of over $16 million embracing virtually the entire proceeds of his practice as an ophthalmologic surgeon between 1988 and April, 1992.

This case, hard fought at trial and on appeal, with a vigorous attack on the sufficiency of evidence supporting conviction and presenting a transcript based on five months of trial, has required this court to determine to what degree a defense of good faith belief in the necessity of medical treatment may be based on disputed expert testimony. It has required this court to decide whether entries made by a physician in his patient’s files fall within federal jurisdiction. It has required this court to determine whether proof of particular examples of fraud in billing insurers establishes that the practice is, as a whole, a scheme to defraud. It has required us to decide whether 18 U.S.C. § 1957, the statute forbidding certain bank transfers, is violated if the transfers involve commingled criminal and innocent funds. Holding that a reasonable doubt may be created as to good faith when qualified experts disagree as to medical necessity, that statements in the files are within the jurisdiction of the government when the government as insurer must rely on them to document medical necessity, that fraud in specific cases and in specific kinds of billing does not prove that the whole practice is a fraud, and that proof of violation of § 1957 requires proof of the transfer of particular criminal proceeds, we affirm certain counts of conviction, reverse others, set aside the order of forfeiture, vacate the sentence, and remand for resentencing.

BACKGROUND

The Insurers. Medicare is the federal health insurance program for persons over the age of 65 who meet its qualifications. 42 U.S.C. § 1395o. As Medicare beneficiaries are 65 years of age or older, medical treatment of their eyes is a significant part of Medicare coverage. For example, in 1991, a year involved in this case, it is estimated that 45 percent of the approximately thirty million beneficiaries of Medicare received eye care paid for by Medicare, which processed thirty-five million claims for such care. Leon B. Ellwein, et al., Use of Eye Care Services Among The 1991 Medicare Population, 103 Ophthalmology 1732, 1734 (1996). Cataracts were the most common eye condition, accounting for 41 percent of the patients’ visits and 1.2 million cases of surgery. Id. at 1732. The cost was over 12 percent of Medicare’s total budget. Id. In 1991 cataract surgery was the largest single outpatient category funded by Medicare. See American Academy of Ophthalmology v. Sullivan, 998 F.2d 377, 379 (6th Cir.1993). The cost demonstrated by these statistics underlines the importance to the government and to taxpayers of honest billing in the practice of ophthalmologists, and they illustrate the prevalence of conditions among those over the age of 65 that necessitate treatment of their eyes.

Medicare pays only for services that are “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” 42 U.S.C. § 1395y(a)(l)(A). Participating providers are required to ensure that any services rendered to Medicare recipients are supported by sufficient evidence of medical necessity. 42 U.S.C. § 1320c- *1276 5(a)(1). Under the statute, the Secretary of Health and Human Services regulates the administration of the program with regulations now totalling over 1,600 pages. The agent of Medicare in Southern California is Transamerica Occidental Life Insurance Company.

CHAMPUS is the federal health insurance program for Department of Defense employees. Like Medicare, CHAMPUS pays only for medically necessary services and supplies. 32 C.F.R. § 199.4(a)(l)(i). The CHAMPUS insurance earner is Foundation Health.

The Railroad Retirement Health Insurance Program is the federal health insurance program for retired railroad workers administered by the Railroad Retirement Board. Travelers Insurance Company serves as the insurance carrier. The Railroad Retirement plan follows the same rules and regulations as Medicare.

Blue Cross of Southern California and Aet-na are insurers not connected with the government.

Jeffrey Jay Rutgard. Dr. Rutgard, the defendant, was born in Chicago, Illinois, in 1951. His father was a physician. He attended the College of Medicine of the University of Illinois. He also enrolled in the university’s graduate school where he was a James Scholar. On the basis of his proficiency in these schools he skipped internship and moved directly to a three-year residency in ophthalmology at the Medical School of the University of Iowa. In 1981 he came from this residency to practice in San Diego, California.

In 1982 he secured his own medical practice by the purchase of Dr. Amos Root’s in San Diego. Four years later he bought Dr. John Bickerton’s in La Jolla and thereafter had two offices. In 1989 he opened as well an ambulatory surgery center in La Jolla. His practice flourished. He kept an extraordinary schedule of working days per week, 16 hours a day, with trips to medical meetings but without vacations. He also made a great deal of money. From 1988 through May, 1992 he received from Medicare (80% of his practice) over $15 1/2 million.

His skill as a surgeon was recognized. The success of his practice he attributed in large measure to word-of-mouth recommendation by satisfied patients. Dr. Bickerton and several other ophthalmologists sent members of their families to him for surgery. Members of the staff who were government witnesses at trial had only praise for his surgical abilities.

Rutgard was also an active promoter of his practice. One-third of his practice he estimated came from his “community relations” program. He employed staff to hold free screening at senior citizen centers and nursing and retirement homes and, although without professional qualifications, to diagnose cataract and eyelid problems, suggesting Rutgard as the doctor who could cure them. Vans arranged by Rutgard brought this kind of clientele to his climes for further examination. Members of his staff, including the van drivers and the receptionist, were paid bonuses or qualified for raises by the number of the persons they successfully recruited to have surgery by him. In pursuit of these rewards some staff would tell strangers wearing glasses whom they saw in a supermarket that they should see Dr. Rut-gard.

Rutgard approved his office manager, George Butera, setting “quantifiable goals” for the practice. For example, for 1991, the quantifiable goals were as follows:

Cataract surgeries — 1230 (up 30 from 1990)

R.K.S. (Radial keratotomy surgeries) — 240 (up from 144 in 1990)

YAG laser surgeries — 1,080 (up from 816 in 1990)

Ptosis surgeries — 720 (up from 480 in 1990)

The quantifiable goals for 1992 were increased in each category. For example, the goal for YAGs was increased to 1,175 and for ptosis surgeries to 960.

Rutgard was not shy about self-promotion. Staff was instructed to say, “Doctor is the best eye doctor in San Diego.” Staff was told to tell patients, “The Lord guides his *1277 work and skills.” Rutgard was rebuked by the American College of Eye Surgeons for putting out a resume stating that he was a fellow rather than a member of that college. He was criticized in 1991 by the chairman of the ethics committee of the American Academy of Ophthalmology for an advertisement stating that he was “board-certified” by this academy, which does not do such certification. He gave patients Cataracts And Implants. A Guide For Patients And Their Families. The front, inside and back covers all showed him as the co-author of the book with Dr. Phillip C. Hoopes, and the book was dedicated by the two authors to their wives. In fact only Dr. Hoopes was the author, and Rutgard’s name appeared as author because he paid Hoopes to have his name displayed as author.

PROCEEDINGS

How Rutgard became the subject of a federal investigation is not part of the record in this ease. On March 24,1994 a 217-count indictment against Rutgard was returned by a federal grand jury. The district court scheduled trial for June. On May 4, the court declared the case complex and reset the trial for August. On June 8, the court re-set the trial date for October 4 and admonished counsel that the date was firm.

At the arraignment Rutgard was represented by Richard “Racehorse” Haynes, a member of the Texas bar admitted pro hac vice to practice in California. Haynes had also recently represented Rutgard in lengthy license revocation proceedings involving many of the issues covered in the indictment. Haynes was joined by local counsel Juanita Brooks, an active member of the San Diego bar.

The first major procedural battle occurred on September 19 when Rutgard pro per moved to relieve Haynes and to secure a continuance. In support of the motion Haynes filed a declaration that he had not read the “thousands of pages” of documents supplied since August 19 by the government and could not physically do so by October 4 and that in consequence he would be unprepared to render effective assistance as counsel on the scheduled trial date. Brooks declared that she was only prepared to “assist ” Haynes.

The district court denied the motion to relieve Haynes and to continue the trial date. The court noted that Haynes had been involved with the case “since before its inception” and was aware of its complex character. The court noted that as early as May 20, 1994 Brooks was aware of Haynes’ lack of diligence in preparing. Haynes was unprepared now because he had “simply chosen to spend his time doing other things.” There was still two weeks’ time for Brooks and her firm to prepare the case. The inconvenience to the court in resetting a trial expected to last at least two months was serious, as was the inconvenience to the government.

With the continuance denied, Haynes went on as lead counsel. On October 3 he developed a painful abscessed tooth and moved for a 60-day continuance. The court denied the motion. Thereupon Brooks, although declaring herself unprepared, participated in the selection of the jury. When selection was completed, the ease was put over to October 12 to permit Haynes to return from an operation on his tooth.

At voir dire of the prospective jurors Rut-gard moved to have the court make specific inquiry as to whether the jurors had been exposed to hostile coverage of his problems in the media. He stated that there had been at least six articles in the Los Angeles Times, ten in the San Diego Union Tribune, and fourteen in the La]olla Light that had been run and created unfavorable publicity. The court merely inquired if any member of the jury panel had “read or heard anything about this case” other than the indictment. There was no affirmative response.

The court ruled in limine that four ex-employees of Rutgard testifying for the government could not be cross-examined on the civil suit they had pending against him seeking compensatory and punitive damages for malicious prosecution unless the government then had the opportunity to bring out the circumstances of the suit. The background of the suit was that these employees had testified against Rutgard in the state proceedings for revocation of his license, which *1278 had resulted in the revocation; and that he sued the employees for slander in the federal district court and the suit was dismissed in February, 1994. Faeed with this ruling, the defense chose not to examine the employees on their suit. Later in the trial the defense suggested that an employee or someone connected with an employee might have filed a qui tarn action against Rutgard. The government filed a response under seal.

The trial proceeded for the next five months. The court made a number of comments and rulings to which the defense took exception and which now form part of the grounds for appeal. In particular, when a government witness was explaining what she meant by her use of “honesty and integrity,” Haynes made an evidentiary objection. The court said, “You see the word ‘honesty?” Haynes: “Yes, I do.” The court: “All right. That’s what she is explaining. It’s called honesty and integrity.” Haynes: “I understand, Your Honor.” The court: “I hope so. Objection is overruled.” Haynes sought a sidebar, objecting that the court’s remark would be understood by the jury as a shot at his client. Overruling another objection to evidence by Haynes, the court said: “Your objections are noted for the record. Take it up with the Ninth Circuit.” This comment was made in the presence of the jury.

After a month of trial, the court was dissatisfied with the pace at which the trial was moving. The court said to counsel outside the presence of the jury: “[T]here are going to be ultimatums laid down to both sides, time ultimatums .... [a]nd I’m going to enforce that and cut you off, and I don’t care if the Ninth Circuit likes it or not, and I don’t care whether the Supreme Court likes it or not.” The time limits were three hours apiece on direct and cross-examination and one hour apiece on redirect and recross. Violation would be a contempt of court. These time limits were thereafter in force.

During trial the government dismissed counts involving six patients, thereby reducing the number of counts to 132. On March 15, 1995 the jury found Rutgard guilty on each remaining count. The jury then found the amounts of $5,629,220.74 and $1,935,-220.48 to be moneys derived from the frauds and transferred by wire in violation of 18 U.S.C. § 1957 and found the amounts forfei-table under 18 U.S.C. § 982(a)(1). On June 26, 1995 the court imposed a sentence with enhancements for vulnerable victims, abuse of trust, leadership role, perjury on the witness stand, and loss determined by Rutgard’s receipts fi-om 1988 to April, 1992 when the government effectively closed his office.

Rutgard appeals.

ANALYSIS

RULINGS OF THE TRIAL COURT

Rutgard argues that cumulatively the errors of the district court deprived him of a fair trial and explain why the jury convicted him despite the insufficiency of the evidence. Reviewing the record, we find no single error or combination of errors that would sustain Rutgard’s contentions.

The ruling on the request to relieve Haynes and to continue the trial date was a ruling within the discretion of the district court, requiring the careful examination and balancing of various considerations which the court explicitly made. See United States v. Robinson, 967 F.2d 287, 291 (9th Cir.1992).

With his motion to examine the jurors specifically as to their exposure to hostile media coverage, Rutgard gave the number of articles that had been published, but did not attach the articles. On this appeal he asks us to take judicial notice of the articles as we did in Dockray v. Phelps Dodge Corp., 801 F.2d 1149, 1152 n. 3 (9th Cir.1986). We have no obligation to take such notice when the contents were not brought before the district court. However, in the interest of fairness we have examined the articles attached to Rutgard’s motion requesting judicial notice.

The newspaper articles fall into two classes: those written before trial and those written during trial. Those written during trial recapitulate court proceedings and testimony the jury itself heard. While occasionally the articles might give an emphasis beyond what a juror would have noted in the courtroom, the net impact is de minimis and could not have prejudiced a juror during *1279 trial. The pretrial articles do contain inflammatory material of a prejudicial character, largely, it would appear, coming from the state Medical Board or its representatives, and once, it would appear, coming from the United States Attorney’s office. If a juror had read this material, it is fair to say that he or she would have had a highly unfavorable view of Rutgard as a cheat. The coverage, however, was not extensive. It was intermittent, triggered by various events such as the federal raid in April, 1992 on Rutgard’s home and office and by the state proceedings for suspension of his license in May, 1992 and the state’s actual revocation in May, 1994. Except for one front page story in the San Diego Union Tribune about how several doctors, including Rutgard, were receiving disability payments for stress after being forced from practice by charges against them, the stories were on the inner pages of the metropolitan papers. The headlines typically referred to “a doctor” or “surgeon,” although several of the stories carried photos of Rutgard with his name and the stories uniformly identified him by the second paragraph. Unless a juror were particularly interested in medical fraud, it is not likely that this sporadic coverage would have generated any memory.

The defense could have made a stronger showing of potential prejudice by producing the articles before the district court and the district court could have made a more particular inquiry of potential jurors than in fact it did. The question, however, is whether the district court abused its discretion in not going beyond the usual inquiry as to whether the jurors had read anything about the case. United States v. Baker, 10 F.3d 1374, 1403 (9th Cir.1993); United States v. Giese, 597 F.2d 1170, 1183-84 (9th Cir.1979). We conclude that it did not.

The district court’s ruling on the cross-examination of the four ex-employees, who were described by Rutgard as “key” government witnesses, struck a fair balance. To have permitted cross-examination to develop a hostile motive to testify against Rutgard would have given only half the picture when the original hostility began with Rutgard’s resentment of their testimony against him in the license revocation proceeding. The court was entitled to use its discretion in ruling on how much of the relevant circumstances could be brought out by the government if it had to rehabilitate its witnesses. See United States v. Shapiro, 879 F.2d 468, 472-73 (9th Cir.1989).

As to the possibility of qui tam the government filed its response under seal because it believed that written disclosure of the existence of any such actions would violate the secrecy that protects an informant. At the request of Rutgard on this appeal we have inspected the sealed response of the government and are satisfied that as of the time of the response, January 17, 1995, there were no qui tam actions filed by anyone seeking a reward for information provided against Rut-gard.

In a long trial, marked by repetitive cross-examination by the defense, the court had the discretion to impose reasonable time limits on the examination of the witnesses. See Wood v. Alaska, 957 F.2d 1544, 1549-50 (9th Cir.1992) (limits on cross-examination violate defendant’s Sixth Amendment rights only if district court abused its discretion); United States v. McClintock, 748 F.2d 1278, 1289-90 (9th Cir.1984). Reference before the jury to the Ninth Circuit carried an implication that the defendant would be convicted — an implication that many jurors would be sufficiently sophisticated to catch. Such statements should not be made but here the reported comment is not sufficient to taint the verdict. Analogously, the comment on defense counsel’s understanding of honesty did carry a negative implication as to the defendant or his counsel but did not destroy the fairness of the trial.

More generally, a reading of large sections of the transcript gives the impression that the court treated government counsel less brusquely than it treated defense counsel but the difference in treatment is not such as to undermine confidence in the verdict. See Duckett v. Godinez, 67 F.3d 734, 740 (9th Cir.1995) (appellate court will reverse only if there has been an “extremely high level of interference” that “creates a pervasive climate of partiality and unfair *1280 ness”), cert. denied, - U.S.-, 116 S.Ct. 1549, 134 L.Ed.2d 651 (1996); United States v. Mostella, 802 F.2d 358, 361 (9th Cir.1986) (appellate court should order new trial only if record discloses actual bias or reflects that judge’s comments projected an appearance of advocacy or partiality to jury).

As to one ruling we do have serious misgivings — the ruling limiting to 18 the number of patients the defense might present as witnesses to rebut the government’s theory that Rutgard’s practice was “permeated with fraud.” However, as we subsequently hold in this opinion that the government failed to prove this theory, any arbitrariness in the number of witnesses allowed turns out to be harmless error. A similarly serious but ultimately harmless error occurred in the court’s refusal to permit patient testimony to be offered by the defense at the forfeiture hearing. See United States v. Feldman, 853 F.2d 648, 662 (9th Cir.1988) (district courts must allow defendant to offer evidence regarding the extent of assets subject to forfeiture if the issue is disputed). As we go on to hold that the government did not prove its case for forfeiture, the error was harmless.

We have reviewed Rutgard’s other objections to evidentiary rulings, claim of Brady error, failure to grant immunity to certain witnesses, and exclusion of experts. We find no fatal error.

THE SUFFICIENCY OF THE EVIDENCE

The rules governing appellate review of a challenge to the sufficiency of the evidence are familiar. The jury has been free to make credibility determinations (except in the unusual ease where the witness is incompetent or manifestly incredible) and to draw reasonable inferences from the testimony and exhibits before it. Our sole function is to determine whether any rational juror could have found beyond a reasonable doubt that the defendant was guilty. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979).

The Cataract Counts. Running through the government’s ease on the cataract counts is the way Rutgard used the Brightness Acuity Test or BAT. For 125 years the standard way of testing eyesight has been the eye-chart known as the Snellen, familiar to anyone who has gone to an ophthalmologist. In 1983 there came into commercial production tests to measure the effect of glare on vision. See Thomas C. Prager, Jack T. Hol-laday, et ah, Glare Testing in Cataract Patients: Instrument Evaluation and Identification of Sources of Methodological Error, 15 J. Cataract & Refractive Surgery 149 (1989). The BAT was a device created by Dr. Jack T. Holladay, professor of ophthalmology at the University of Texas in Houston, to measure the effect of glare on vision. It is used in conjunction with the Snellen test in a dark room where the patient reads letters or numbers on lines that are progressively smaller as a way of determining if the patient’s best-corrected eyesight is 20/20 or something worse. “Something worse” for Medicare purposes was 20/40 (meaning the patient can only see at 20 feet what a person of normal eyesight can see at 40 feet) until July, 1990 when Medicare made the minimal standard 20/50.

As a government witness, Dr. Holladay testified that use of the BAT was encouraged by the American Academy of Ophthalmology and common today. He testified that determining if and how glare affects an individual’s living is an essential element in assessing visual functions.

The BAT has three settings — low, medium, and high. These settings simulate various combinations of illumination and reflectivity. None of the settings correspond to nighttime glare. “Low” simulates bright overhead commercial lighting. “Medium” and “high” simulate outdoor daylight conditions with overhead sunlight. As both illumination and reflectivity vary, the possible combinations are many. Illustratively, “medium” and “high” both simulate light when a person is standing on a white concrete sidewalk or on a sandy beach looking horizontally at the Snel-len eye chart (i.e., reflectivity is high), but “medium” corresponds to illumination on a cloudy day and “high” corresponds to light on a bright sunny day. In every instance it is the combination of sunlight with the reflectivity of the surrounding surfaces that deter *1281 mines the degree of glare so that there is no single equation between degree of light in San Diego and the amount of glare generated.

As the instruction manual for the BAT prescribes, the tester should move from the BAT off, to low, to medium, to high, giving the patient’s retina time to adjust to the different amounts of light. If a single value has to be chosen, the most appropriate reading would be at the medium setting. The only possible abuse of the BAT known to Dr. Holladay was to use only the high setting and to take the measurement so rapidly that the patient did not adjust to the bright light. Dr. Holladay’s manual on the use of the BAT was found in Rutgard’s home. The jury could infer that Rutgard knew what proper usage was. There was conflicting testimony on whether Rutgard instructed his staff to use the BAT regularly only on high or at least record only the reading from the high setting. There was also testimony that Rut-gard instructed employees to use whatever BAT setting was necessary for the patient to qualify for medically necessary surgery. If the jury believed that these were his instructions, the jury could infer that a BAT reading without indication of the setting was a high reading based on an improper use of the BAT.

Medicare regulations made no reference to BAT even though the BAT can cause a patient’s acuity on the Snellen Test to drop more than six lines. Rutgard argues that, in the absence of a Medicare rule, his use of the BAT was not fraudulent. We agree that he could use the BAT readings. But a reasonable juror could have found a fraudulent pretense of medical necessity if Rutgard deliberately used the BAT improperly. This case is not about violation of the rules of Medicare but about whether Rutgard made representations that were in fact untrue in order to obtain money from Medicare.

Against the background of the testimony about the BAT we examine the cataract counts in terms of individual patients.

Pearl Adams. She had cataracts in both eyes. A government witness, Dr. Russell Edwards, testified that he had not examined her but had examined her chart and found her Snellen test readings to be 20/25 minus 1 in both eyes (minus 1 refers to an inability to read one letter on the line indicated). With BAT the measure was 20/60 minus 2. The chart reflected her complaint of being unable to read newspapers and magazines. In Dr. Edwards’ opinion bifocal glasses would have met her reading problems; her ordinary Snellen scores did not show a need for cataract surgery and she denied having problems with glare. Whether or not surgery was needed depended primarily on the weight given the BAT score. Inferentially, the BAT was set on high to provide false evidence of medical necessity. Combined with Adams’ denial of glare problems, the inference supports the conviction on counts 1, 2, 49, 50, 52 and 53. Rutgard objects that Dr. Edwards cannot pronounce on medical necessity without seeing the patient; but he was competent to give his expert opinion and the jury was free to believe him if it chose to do so. See United States v. Sullivan, 595 F.2d 7, 8 (9th Cir.1979) (jury, not court, is to determine credibility of expert witnesses offering competing views of defendant’s sanity).

John Boyle.. In 1987 and 1988 Boyle came to Rutgard with a sense that he needed new glasses; he was having trouble seeing freeway signs at a distance. His left eye had been amblyopic or undeveloped since birth, but his right eye had been 20/20 with glasses. Rutgard found that he had cataracts in both eyes but did not recommend surgery. Boyle returned in 1990 believing he needed bifocals to read small print in the newspapers. He repeated his difficulty in seeing freeway signs at a distance and said that at night, looking at oncoming headlights, “I would see two or three lights instead of one.” His chart showed vision in his right eye as 20/40+ , with “40+ ” being written in over “30”, and vision in his left eye as 20/200. His complaints were listed as “trouble reading fine newspaper print, trouble seeing freeway signs, lights at night like starbursts can’t see driving.”

At trial defense witnesses explained the common practice of translating a patient’s response to a diagnostic procedure into a statement made by the patient. The practice *1282 was not fraudulent. Rutgard told Boyle that cataract surgery would improve his right eye and might improve the vision in his left. Boyle testified that surgery had no effect on his left eye. There is no doubt that Boyle had cataracts and that he complained of their effect on his driving. Medicare changed its regulations in July, 1990 to require that vision be at least 20/50 to justify surgery. The “40+ ” entry is not an attempt to meet this standard. Without specific testimony that “30” was altered to 40+ , a jury could not be sure that there had been a fraudulent alteration. A reasonable juror could not conclude beyond a reasonable doubt that the cataract surgery performed on Boyle’s right eye was medically unnecessary but could reach this conclusion as to surgery on his undeveloped left eye. Counts 165 and 166 have not been proved, counts 7, 171 and 172 have been proved.

Robert Church. Church did not testify. His BAT scores (not identified as to setting) were 20/50 in each eye; the chart reflected alteration by someone at Rutgard’s office from earlier scores of 20/40. Church complained of blurry vision and problems driving, but denied glare problems. In the opinion of government expert Dr. Edwards cataract surgery was not necessary if the BAT scores were based on the high setting of BAT. A reasonable juror could infer that in Rutgard’s practice the high setting was usual and accept Dr. Edwards’ opinion that Church did not have daily living problems that required cataract surgery. Counts 71, 72, 73 and 74 were proved.

Jean Elwood. The government’s evidence was that a form given to Elwood showed a check against the printed form: ‘Tour vision is borderline or below the standard to drive an automobile established by the Department of Motor Vehicles.” Under “History”, her chart reads: “Chief Complaint. Painless progressive loss of vision which is interfering with normal daily activities.” Under “Physician Notes,” there is an indication of her complaining of her vision “interfering with daily activities, including seeing street signs, driving.” Elwood testified that she had not driven since 1980. In presenting the case to the jury the prosecutor said: “This false documentation is why the defendant is guilty of Count 91, for performing that right eye cataract surgery.”

Elwood’s testimony presents a different picture. She came to San Diego in 1985. At the time she possessed a Massachusetts driver’s license. When she went to get a California license she flunked her eye exam. She had not been driving but she could not be licensed to drive because of her eyesight. She came to Rutgard in July, 1991 claiming: “I couldn’t see good. I was — that was the main thing, I couldn’t see good when I was walking or anything. I couldn’t see the television good.” This statement, made during the government’s direct examination, was amplified on cross: she agreed that she “had trouble seeing signs or reading signs.” She responded affirmatively to the question whether she “had trouble in everyday life, just getting around, because of your poor vision.” She admitted having glare problems. She benefitted from the surgery. No reasonable juror could conclude from her testimony that there were material false statements made by Rutgard to justify cataract surgery upon her. She had cataracts. They seriously impaired her living. Their removal led to a significant improvement in her vision. The entry on her chart as to driving was inaccurate but not materially false; it approximated her problems. Counts 13, 91, 92, 94 and 95 have not been proved.

Socorro Manzo. Manzo came to Rutgard already diagnosed as having cataracts in both eyes. Her eyesight was 20/400 in her left eye, even without the BAT. Under “Physician Notes” on her chart it was remarked that she “complain[ed] of decreasing vision interfering with daily activities, including reading and walking, seeing curbs and steps.... Patient has a history of some macular degeneration, however.” Rutgard told her he could do nothing for her left eye but less than a month later performed cataract surgery on that eye. William Rose, a government witness on billing, testified on the basis of her chart that Manzo’s complaints met the Medicare standard of medical necessity for cataract surgery. Dr. Edwards, also basing his opinion only on Man- *1283 zo’s chart, testified that the macular degeneration prevented any reasonable expectation of improvement with cataract surgery. Dr. Tornambe, a defense witness with extensive experience with patients suffering from ma-cular degeneration, testified without reviewing Manzo’s chart that “the macular function is better the more light that gets to it” and that removal of a cataract could improve peripheral vision. With two expert ophthalmologists, neither of whom had seen the patient, disagreeing as to whether the performance of cataract surgery on an eye with a hole at its center is ever medically necessary and with Rose testifying that Manzo’s chart met Medicare standards, no reasonable juror could conclude beyond a reasonable doubt that Rutgard knew the surgery on Socorro Manzo’s left eye was medically unnecessary; the evidence is insufficient to establish fraud. See United States v. Migliaccio, 34 F.3d 1517, 1525 (10th Cir.1994). Counts 10, 20, 115 and 116 are not proved.

Bobbie McKelvey. McKelvey denied making the complaints recorded in her chart about glare problems and problems in driving and seeing street signs. She consented to cataract surgery on her right eye. She was dissatisfied with the result, did not agree to surgery on her left eye, and was suing Rutgard for malpractice at the time of trial. Her insurer was Blue Cross. We are not informed as to what Blue Cross required in order to pay for cataract surgery. Information in the physician’s files cannot be fraud on Blue Cross without such evidence. The jury could believe McKelvey’s denial of the complaints in her file, however, and conclude that McKelvey had no cataracts and that Rutgard had defrauded Blue Cross by inducing her to have cataract surgery that was completely unneeded. Count 26 is proved.

Marguerite Meador. Meador came to Rutgard already diagnosed by another doctor as having cataracts. Her medium BAT was 20/50 and 20/40; her high BAT was 20/70 in each eye.

At trial she denied the complaints entered on her chart of blurry vision and trouble reading words on television. On cross she testified that she circled complaints in a patient form indicating that she had glare problems at night, problems judging distance, and problems reading the telephone book. Government witness Rose testified that her chart met Medicare’s definition of medical necessity-

The government argued to the jury, “There were no patient complaints in this ease.” The government repeats on this appeal that Meador did not make the complaints “that would have warranted cataract surgery.” The jury could believe her denial of making the complaints entered, but she admitted to making other serious complaints about her vision; her medium BAT scores were fairly high and the high BAT met the Medicare standard; Rose’s expert opinion was that the complaints on her chart justified cataract surgery. In this context the complaints she denied, if eliminated, do not materially affect the diagnosis of cataracts or the medical necessity of surgery; or at least no reasonable juror could conclude beyond a reasonable doubt that medical necessity was fraudulently represented to Medicare. Counts 125,126,128 and 129 are not proved.

Ruth Roden. Like Manzo, Roden had ma-cular degeneration in one eye, which also had a cataract. Roden’s best vision in the right eye before surgery was 20/200; after surgery it was 20/300. Reviewing her chart at the trial Dr. Edwards was of the opinion that it was “not very likely that visual acuity would improve significantly with the cataract extraction.” His opinion was based on a view of the benefits of cataract surgery on peripheral vision in conflict with the opinion given by Dr. Tornambe on the importance of increasing peripheral light. As in Manzo’s case, with no other concrete evidence concerning Roden’s condition a reasonable juror could not be sure beyond a reasonable doubt that Rutgard knew that cataract surgery was unnecessary. Counts 42, 43, 159 and 160, all based on such surgery to Ruth Roden’s right eye, were not proved.

YAG Laser Counts. Rutgard performed YAG laser surgery on Socorro Manzo and Ruth Roden, follow-up operations after their cataract surgeries. Dr. Edwards testified based on the patient charts that the surgeries were not medically necessary because of the macular degeneration. Dr. Tornambe’s *1284 refutation went toward the benefits on patients with macular degeneration of cataract surgery, not YAG laser surgery. The government during closing argued that YAG laser surgery affects only central, not peripheral vision, so that it could not help patients with macular degeneration. The jury could reasonably conclude that YAG surgery on these patients was medically unnecessary. Counts 119, 120, 163 and 164 are proved.

Eyelid Procedure Counts. Rutgard performed a large number of eyelid surgeries, often on the same patients he had treated for cataracts. Those surgeries corrected two conditions: ptosis (drooping of the upper eyelid) or ectropion (turning outward of the lower lid). Medicare recorded Rutgard as performing 13.65 percent of the ptosis surgeries done by the approximately 1,000 Specialty 18 Medicare providers in the seven-county area in Southern California serviced by Transamerica in 1990, 24.77 percent in 1991, and 12.42 percent up to April 1992. Rutgard performed 32.9 percent of the ectro-pion surgeries in 1991 and 22.3 in 1992. A number of counts were based on such surgeries.

Depending on the patient involved, the prosecution offered various grounds for finding fraud as to these eyelid surgeries. First, the government argued Rutgard billed for more expensive procedures than he performed. Rutgard performed a form of upper eyelid repair known as a Fasanella-Servat, which took him only a few minutes to do, and billed it as a true blepharoptosis, which takes approximately 45 minutes to perform properly. Rutgard at trial described the Fasanella-Servat as “quick and easy and comfortable for the patients” and on direct examination did not deny that this procedure was what he favored. In the cases where the more complicated operation was billed a reasonable juror could conclude beyond a reasonable doubt that Rutgard had deliberately billed the simple Fasanella-Servat as the more complicated one in order to receive the higher fee it justified. The defense argues that the Medicare billing code for “internal pto-sis” was for the higher fee and that a Fasa-nella-Servat could be billed in good faith to this code number. On this question of billing accuracy, it was for the jury to decide if a billing mistake was honest or fraudulent. With respect to lower lid surgery, Rutgard performed ectropion surgery on both eyes in about ten minutes. Experts testified that true ectropion repair on both eyes takes between 45 minutes and one hour so that Rutgard could not have performed the procedure for which he billed. Here again the jury was entitled to decide whether any billing errors were honest or fraudulent.

Secondly, the government also produced patients who denied the eyelid complaints recorded in their files. The jury was entitled to believe the patients’ testimony and to find the charts falsified.

Thirdly, the government also contended that in particular cases the Polaroid photos showing patients with droopy upper eyelids or droopy lower lids were “staged,” that is, the patients were coached to exaggerate their condition for the photographer so that surgery which was unnecessary would appear to be necessary. The defense disputed this testimony, noting that the close-range Polaroids often produced some distortion and presenting evidence that patients with droopy eyelids sometimes overeompensate to hide their condition and need to be told to relax to get a picture accurately reflecting their condition. The jury was entitled to make its own judgment as to the credibility of the government’s evidence and the defense rebuttal.

In the light of these criteria of evidentiary sufficiency, the following counts were proved:

Counts 3, 55 and 56, ptosis surgery on Pearl Adams, proved by improper billing.

Count 180, note in the file of Edwin George Bebbington as justification for future ptosis surgery. The note read, “My lids are cutting off my vis, when I hold them up I see better.” In his deposition read into the record at trial, Bebbington, an octogenarian who died prior to trial, denied that he thought his eyelids interfered with his vision, but later stated in the deposition, “I remember [Rut-gard] raising [the lid] up and asking about— and I think I could see a little better at that time. I don’t recall particularly if I did, but it seems like I did.” He had not actually had *1285 the eyelid operation and could see well now without having had the operation. Bebbing-ton’s deposition, taken as a whole, could have been found by any reasonable juror to have shown him scheduled for an unnecessary surgery.

Counts 8, 174, 175 and 212-215, ptosis surgery on John Boyle, proved by his denial of complaints.

Counts 75 and 76, ectropion surgery on Robert Church, proved by improper billing. Counts 77 and 78, ptosis surgery on him, proved by improper billing.

Counts 9, 79, 80 and 182, ptosis surgery on, and photos of, the right eye of Kevin Collins. The eye was prosthetic; the surgery was cosmetic, not medically necessary. Collins also denied making complaints in his file.

Counts 10, 83-86, 186 and 187, ptosis surgery on, and photos of, Eileen DiPuma, proved by her daughter’s denial of the complaints in the file and by improper billing. Counts 11, 12, 87-90, 188 and 189, ectropion surgery on, and photos of, DiPuma, proved by her daughter’s denial of complaints in the file and by improper billing.