Decided: May 11, 2015
The Fourth Circuit reversed and remanded the district court’s ruling because it abused its discretion in excluding evidence that was reasonably necessary for the government to make its case regarding the fraudulent scheme.
Dr. Amar Bajoghli was indicted for executing a scheme to defraud when billing public and private healthcare benefit programs in violation of 18 U.S.C. § 1347, and for related offenses. Dr. Bajoghli filed three pretrial motions to limit the government’s evidence against him at trial: (1) motion to strike allegations of certain financial details from the indictment; (2) motion in limine to exclude evidence of post-scheme conduct, which the government planned to introduce to show consciousness of guilt; and (3) motion in limine to exclude any evidence that was not directly related to one of the 53 executions specifically charged in the indictment.
The Fourth Circuit found that evidence of a scheme is an element of § 1347, and thus, evidence of the entire scheme is relevant to proving each particular act of fraud. The Court held that when the government elects to only charge some of the executions of the scheme, its election does not limit its proof to only the charged executions. Although a district court retains broad discretion to manage trials, “its discretion must be balanced by the need to give the government adequate latitude to prove its case….” Additionally, because evidence not charged may be relevant to the nature of the fraudulent scheme, such evidence is intrinsic to the “scheme” element; therefore, Rule 404(b) does not limit it as “other bad acts” evidence. Furthermore, the Fourth Circuit found that the district court misapplied Rule 403 because unfair prejudice “speaks to the capacity of some concededly relevant evidence to lure the factfinder into declaring guilt on a ground different from proof specific to the offense charged.” Neither Bajoghli nor the district court identified any ground that would support a finding of guilt different from proof that is specific to the offense charged. Thus, because the district court misapplied Rule 404(b) and Rule 403 in excluding evidence of Bajoghli’s post-scheme conduct, it abused its discretion. Accordingly, the Fourth Circuit reversed and remanded.