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United States v. Rutgard - 116 F.3d 1270 (9th Cir. 1997)

Rule:

18 U.S.C.S. § 1957 bears the title: "Engaging in monetary transactions in property derived from specified unlawful activity." It punishes by up to ten years' imprisonment and a fine anyone who: knowingly engages or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than $ 10,000 and is derived from specified unlawful activity. 18 U.S.C.S. § 1957(a). The description of the crime does not speak to the attempt to cleanse dirty money by putting it in a clean form and so disguising it. This statute applies to the most open, above-board transaction.

Facts:

Defendant Jeffrey Jay Rutgard was a physician who was convicted in federal district court of numerous counts of mail fraud on, and filing false claims with, Medicare; mail fraud on other insurers; and transferring funds in violation of 18 U.S.C.S. § 1957. He was sentenced to 11-1/4 years imprisonment, ordered to forfeit the proceeds of his fraud, and ordered to pay restitution. Defendant appealed.

Issue:

Did the court err in finding defendant guilty of numerous counts of mail fraud?

Answer:

Yes, as to some counts; no, as to the other counts.

Conclusion:

The appellate court affirmed as to certain counts of mail fraud and filing false claims, holding that the evidence was sufficient for a reasonable juror to conclude beyond a reasonable doubt that defendant performed unnecessary medical services for which he sought reimbursement and that he made false entries in patient files to facilitate the fraud. The court reversed as to other counts, finding that no reasonable juror could find guilt beyond a reasonable doubt in light of the conflicting testimony by medical experts regarding the necessity of certain procedures performed by defendant. The court also reversed defendant's § 1957 conviction, holding that the evidence was insufficient to prove that the transferred funds were fraudulently obtained. The court also reversed the forfeiture order, vacated defendant's sentence, and vacated the restitution order.

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