New York Law Review

Tag: Falsifying Business Records

  • People v. Doshi, 17 N.Y.3d 155 (2011): Falsifying Business Records & Third-Party Submissions

    People v. Doshi, 17 N.Y.3d 155 (2011)

    A physician can be found guilty of falsifying business records in the first degree for submitting fraudulent medical documentation to a no-fault insurance carrier to receive payments for unnecessary or unperformed treatments; these documents qualify as “business records” under the statute, even when submitted by a third party.

    Summary

    Defendant Doshi, a physician, was convicted of falsifying business records and insurance fraud for submitting false consultation reports to State Farm, an insurance carrier, seeking payment for procedures purportedly performed on accident victims. The New York Court of Appeals affirmed the conviction, holding that these submissions constituted falsifying business records, even though the defendant was an outside party providing the false information. The Court reasoned that the submitted documents directly affected State Farm’s financial condition and legal obligations, thus qualifying as business records under Penal Law § 175.00.

    Facts

    Doshi worked at IK Medical P.C., a clinic investigated for insurance fraud. She submitted false “Verification of Treatment Forms” and accompanying medical reports to State Farm for nerve testing purportedly performed on two accident victims. These forms were intended to evidence State Farm’s obligation to pay for medical services and became part of State Farm’s permanent business records. The patients testified that Doshi did not perform all the tests she billed for. IK Medical was found to be fraudulently billing no-fault insurance companies irrespective of the patients’ actual needs.

    Procedural History

    The Supreme Court denied Doshi’s motion to dismiss the falsifying business records counts. At trial, Doshi was convicted of insurance fraud and falsifying business records, but acquitted of scheme to defraud. The Appellate Division affirmed the conviction. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s decision.

    Issue(s)

    1. Whether Penal Law § 175.10 is violated when a third party submits false information to a company to induce action based on that information.
    2. Whether medical reports submitted to an insurance carrier constitute “business records” under Penal Law § 175.00 when they falsely evidence the submitter’s activities and the condition of their patients, rather than the recipient’s condition or activity.

    Holding

    1. Yes, because the Penal Law does not limit the types of persons who may be liable; outsiders or third parties are not immune from prosecution under this statute.
    2. Yes, because State Farm “kept or maintained” the consultation reports and claim forms, which evidenced or reflected its legal obligation to reimburse medical providers for services rendered, thus affecting its financial condition.

    Court’s Reasoning

    The Court focused on the plain language of Penal Law §§ 175.00 and 175.10. It stated, “Where the language of a statute is clear and unambiguous, courts must give effect to its plain meaning.” The Court rejected the argument that only insiders could be liable for falsifying business records, citing People v. Bloomfield, 6 N.Y.3d 165 (2006), which eliminated the “insider/outsider distinction.” Several other courts have held third parties accountable for submitting fraudulent records. The Court also distinguished People v. Papatonis, 243 A.D.2d 898 (1997), noting that in that case, the falsifications on a job application did not relate to any rights or obligations of the recipient agency, whereas Doshi’s submissions created financial liabilities for State Farm. The court emphasized that State Farm’s financial condition was directly affected by the false submissions, giving rise to liabilities under its policies and classifying the documents as business records. The court held that the excluded evidence regarding the Attorney General’s investigator would not have changed the outcome, since Doshi was acquitted of the scheme to defraud charge, and the evidence was not relevant to the fraudulent submission of claims for unperformed treatments.

  • People v. Ribowsky, 77 N.Y.2d 284 (1991): Establishing Venue in Conspiracy Cases

    77 N.Y.2d 284 (1991)

    In conspiracy cases, venue must be proven by a preponderance of the evidence, and the failure to submit the question of venue to the jury is not harmless error if the defendant contests the evidence supporting venue and the jury’s verdict does not necessarily imply a finding that venue was proper.

    Summary

    Defendants, chiropractors, were convicted of conspiracy and falsifying business records for allegedly defrauding insurance companies with an attorney. The trial court denied their request to submit the questions of venue and the statute of limitations to the jury. The Appellate Division reversed the conspiracy convictions due to the Statute of Limitations issue and deemed the venue error harmless. The Court of Appeals disagreed, holding that the failure to properly instruct the jury on venue was not harmless error and reversed the convictions for falsifying business records as well because the jurisdictional predicate for those charges depended on the conspiracy conviction.

    Facts

    Defendants, chiropractors practicing in the New York City area, allegedly conspired with an attorney to defraud insurance companies by fabricating injuries and treatment of accident victims. As a result, the defendants were convicted of conspiracy and falsifying business records in Kings County. The alleged agreement was not entered into in Kings County, and none of the substantive crimes of falsifying business records occurred there. The indictment alleged 100 overt acts, with only seven specified as occurring within Kings County. Evidence was presented of only one of these seven at trial, but evidence of other unspecified overt acts in Kings County was also presented.

    Procedural History

    The trial was held in Kings County, where defendants requested the court to submit the questions of venue and the Statute of Limitations to the jury, which was denied. The Appellate Division reversed the conspiracy convictions, remitting for a new trial due to Statute of Limitations concerns, but affirmed the convictions for falsifying business records, deeming the failure to charge the jury on venue as harmless error. The Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the trial court’s failure to submit the question of venue to the jury was harmless error.

    2. Whether reversal of the conspiracy charge requires reversal of the substantive crimes of falsifying business records.

    Holding

    1. No, because defendants contested the evidence supporting venue, and the jury’s verdict did not necessarily imply a finding that venue was proper.

    2. Yes, because the jurisdictional predicate for the falsifying business records charges depended on a finding of proper venue for the conspiracy charge.

    Court’s Reasoning

    The Court reasoned that the failure to submit the question of venue to the jury is not harmless where the defendant contests the evidence supporting venue and the jury’s verdict does not necessarily imply a finding that venue was proper. It is not enough that the record contains evidence of conduct within the county asserting jurisdiction; the jury must have made a finding that venue was proper. The court noted that because the agreement was not entered into in Kings County and none of the substantive crimes occurred there, the People were required to prove the commission of an overt act in Kings County to sustain jurisdiction. The Court emphasized that because the evidence of overt acts in Kings County was contested and because it was unclear which acts the jury relied on to support its conviction on the conspiracy charge, the failure to submit the question of venue to the jury could not be deemed harmless. Regarding the substantive crimes, the Court held that because jurisdiction over those charges was predicated on the conspiracy charge, the reversal of the conspiracy charge also required reversal of the falsifying business records counts, because there remained no jurisdictional predicate for these charges in the absence of a finding of proper venue by the jury on the conspiracy charge. The Court quoted from prior cases noting that “In order to sustain jurisdiction over the conspiracy and substantive charges against defendants, the People were required to prove by a preponderance of the evidence the commission of an overt act in Kings County by a member of the conspiracy with whom defendant had agreed to engage in criminal conduct”.

  • People v. Foster, 52 N.Y.2d 911 (1981): Defining ‘Business Records’ Under New York Penal Law

    People v. Foster, 52 N.Y.2d 911 (1981)

    ‘Business records,’ as defined in New York Penal Law § 175.00(2), include writings maintained by an enterprise to reflect its condition or activity, regardless of their eventual destination.

    Summary

    The defendant, an employee of the Genesee County Automobile Bureau, was convicted of falsifying business records and grand larceny. The Court of Appeals affirmed the conviction, holding that the forms the defendant falsified, which were used to account for missing registration plates and stickers to the Department of Motor Vehicles, qualified as ‘business records’ under Penal Law § 175.00(2). The court also found no error in requiring the defendant to appear before the grand jury, even though she intended to claim privilege, and deemed the testimony of other employees admissible and the evidence sufficient to support the conviction.

    Facts

    The defendant was an employee of the Genesee County Automobile Bureau. Her duties involved preparing forms to account for missing or mutilated registration plates and validation stickers, which were then submitted to the New York State Department of Motor Vehicles. The defendant was found to have falsified these records. Some validation stickers certified as missing were actually issued. The numbers of the missing stickers appeared in her handwriting on vehicle owners’ checks. The office cash showed no shortage or overage during the relevant period. She admitted to preparing all of the falsified documents.

    Procedural History

    The defendant was convicted on seven counts of falsifying business records and two counts of grand larceny. The Appellate Division affirmed the conviction. The defendant then appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether requiring a grand jury target to appear before the grand jury and claim privilege constitutes constitutional error?
    2. Whether the forms prepared by the defendant constituted ‘business records’ within the meaning of Penal Law § 175.00(2)?
    3. Whether the testimony of other employees of the Genesee Bureau was improperly admitted as self-serving and irrelevant?
    4. Whether the evidence presented was sufficient as a matter of law to support the conviction?

    Holding

    1. No, because requiring a grand jury target to appear and claim privilege does not constitute constitutional error.
    2. Yes, because the forms were writings maintained by an enterprise (the Genesee Bureau) to reflect its activity.
    3. No, because the testimony was relevant to the issue of the defendant’s guilt, especially considering the circumstantial nature of the evidence.
    4. Yes, because the evidence, viewed in the light most favorable to the prosecution, was sufficient to permit the jury to find the defendant guilty beyond a reasonable doubt.

    Court’s Reasoning

    The court addressed each of the defendant’s claims of error.

    First, the court stated that requiring a grand jury target to appear and claim privilege is not a constitutional error, citing United States v. Wong and Matter of Cunningham v. Nadjari. While acknowledging that it may be better practice not to do so, the court held that the prosecutor’s actions did not warrant dismissal of the indictment.

    Second, the court addressed the definition of ‘business records’ under Penal Law § 175.00(2), which includes writings maintained by an enterprise for the purpose of evidencing or reflecting its condition or activity. The court found that the forms falsified by the defendant met this definition because they were required to account for missing items and transactions, thus reflecting the activity of the Genesee Bureau. The court emphasized that the subsequent transfer of the documents to the Department of Motor Vehicles did not negate their status as business records of the Bureau.

    Third, the court rejected the argument that the testimony of other employees was self-serving and irrelevant. The court clarified that the defendant’s argument was a misconception of the meaning of self-serving in the law of evidence. Furthermore, the court found the testimony relevant as the defendant had argued the evidence against her was weak due to the presence of other employees. It was up to the jury to weigh the credibility of those witnesses.

    Fourth, regarding the sufficiency of the evidence, the court emphasized that the evidence must be viewed in the light most favorable to the People, citing People v. Benzinger. The court noted that the defendant was present on the days in question, arrived early, admitted to preparing the falsified documents, and that some validation stickers certified as missing were actually issued. Additionally, the defendant’s handwriting appeared on vehicle owners’ checks associated with the missing stickers, and there were no cash discrepancies. Considering all this, the court concluded that the evidence was sufficient to support the jury’s finding of guilt beyond a reasonable doubt. The case against the defendant was circumstantial, and the People had to exclude every reasonable hypothesis of innocence.