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United States v. Henderson

United States District Court, E.D. Washington

June 27, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
DONALD B. HENDERSON, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT OF ACQUITTAL OR ALTERNATIVELY A NEW TRIAL

          ROSANNA MALOUF PETERSON UNITED STATES DISTRICT JUDGE.

         This case is about Donald Henderson, a former serviceman who was injured in an accident while in the military. The Government does not contest that Mr. Henderson qualified for ongoing benefits from the Department of Veterans Affairs as a result of the permanent injuries that he suffered in the accident. However, the Government challenges the amount of the benefits that Mr. Henderson has received over the years and contends that Mr. Henderson was deceptive to Veterans Affairs and to the Social Security Administration to obtain more benefits than those to which he otherwise would have been entitled. Specifically, the Government alleges that Mr. Henderson's false statement to Veterans Affairs was his submission of the written diagnosis by Dr. Harshman, a Veterans Affairs eye doctor, stating that Mr. Henderson was legally blind due to a permanent condition.

         To support the Government's case regarding Mr. Henderson's alleged false statement, the Government called numerous witnesses over seven and a half days of trial to testify about what they observed Mr. Henderson doing, or heard him saying, during eye exams, in casual interactions, and while observing him surreptitiously. The Government's case hinged on comparing what its witnesses observed with those witnesses' conclusions about what a person can or cannot do who is legally blind due to keratoconus, one of Mr. Henderson's diagnosed conditions.

         Mr. Henderson argues that the Government failed to provide sufficient evidence to prove that he intentionally made a false statement about being legally blind due to a permanent condition. The Court agrees.

         Ultimately, the Court finds that the Government failed to meet its burden to prove by sufficient evidence that Mr. Henderson knowingly and willfully, with knowledge that his conduct was unlawful, made a false statement regarding either the permanence or the extent of his visual impairment. Therefore, the Court grants Mr. Henderson's motion for acquittal pursuant to Fed. R. Crim. P. Rule 29.

         LEGAL STANDARD

         A district court must, on a defendant's motion, “enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). The relevant inquiry “is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original); see also United States v. Laney, 881 F.3d 1100, 1108-09 (9th Cir. 2018). The jury's verdict is entitled to great deference. United States v. Dearing, 504 F.3d 897, 900 (9th Cir. 2007). “Sufficiency-of-the evidence review . . . should be independent of the jury's determination that evidence on another count was insufficient.” United States v. Powell, 469 U.S. 57, 67 (1984). In other words, a jury acquittal on another count does not affect a court's consideration of the evidence supporting a defendant's counts of conviction. United States v. Hart, 963 F.2d 1278, 1282 (9th Cir. 1992).

         In the event that a Court “enters a judgment of acquittal after a guilty verdict, the court must also conditionally determine whether any motion for a new trial should be granted if the judgment of acquittal is later vacated or reversed.” Fed. R. Crim. P. 29(d)(1).

         Mr. Henderson made a motion for judgment of acquittal at the end of the Government's case-in-chief, and the Court reserved ruling on that motion. Following the jury verdict, Mr. Henderson again moved for acquittal on the three counts of conviction. Where a court reserves decision on a motion for acquittal made at the close of the Government's case-in-chief, and returns to decide the motion after a guilty verdict, the Court must decide the mid-trial motion on the basis of the evidence at the time the ruling was reserved. Fed. R. Crim. P. 29(b).

         BACKGROUND

         Counts of conviction

         The Government charged Defendant in Count 3 of the superseding indictment with concealing a material fact from the United States Department of Veterans Affairs (the “VA”), in violation of 18 U.S.C. § 1001(a)(1) from “on or about August 6, 2002 and continuing through on or about February 8, 2016” “by representing that his eye condition, keratoconus, caused him to be permanently blind with a best corrected visual acuity worse than 20/200.” ECF No. 165 at 2. The superseding indictment labels Count 3 “False Statement to Veterans Affairs.” Id.

         In Count 2, the Government charged Defendant with knowingly and willfully stealing and purloining more than $1000 of money and property from the Social Security Administration (the “SSA”), in violation of 18 U.S.C. § 641, “on or about August 16, 2011, and continuing through on or about June of 2016[.]” ECF No. 165 at 2. In Count 4, the Government charged Defendant with committing the same offense with respect to the VA from “on or about August 16, 2011, and continuing through on or about February 8, 2016[.]” Id.

         On September 22, 2017, at the conclusion of a trial that included seven and a half days of evidence and one and a half days of deliberations, a jury of twelve acquitted Defendant Donald Henderson of Social Security fraud (Count 1), [1] and convicted him of making a false statement to the VA (Count 3)[2] and theft of money from the SSA (Count 2)[3] and the VA (Count 4). Defendant timely moved for a judgment of acquittal, or, in the alternative, a new trial, on the latter three counts. ECF Nos. 241, 257, and 258.

         Evidence from the Government's case-in-chief

         Benefits Applications and Determinations during the Pre-Indictment Period

         The Government does not contest that Mr. Henderson was injured in a motorcycle accident in 1984 while serving in the Army. Gov't Ex. 20 at 1. He was unconscious for approximately ten to fifteen minutes following the accident, was immediately hospitalized in intensive care, and received surgery for an injury to his right hand. Id.

         According to the Government's exhibits, Mr. Henderson began experiencing debilitating headaches while in the hospital recovering from the accident. Id. His hospital records indicate that he suffered a head injury. Gov't Ex. 17 at 10. In 1986, Mr. Henderson was honorably discharged from the military. Gov't Ex. 16; ECF No. 224 at 57. At the time that he was released from military service, the VA granted Mr. Henderson a ten percent disability rating on the basis of his finger injuries. Gov't Ex. 17.

         The Government's witness, VA Rating Specialist Clinton David, testified about the VA disability rating system and the disability benefits that the VA awarded Mr. Henderson over the years. Mr. David testified that in 1988, Mr. Henderson requested an increased disability rating for his finger injuries in combination with a disability determination for migraine headaches. Gov't Ex. 18; ECF No. 226 at 213-14. The VA denied the request because Mr. Henderson had not reported a head injury (traumatic brain injury or “TBI”) at the time that he separated from the military. ECF No. 226 at 216. Mr. David testified that in 1991, Mr. Henderson sought reconsideration of his claim of disability for migraine headaches, submitting additional evidence. ECF No. 226 at 218. The VA again “denied service-connection” for the migraine headaches. ECF No. 226 at 219.

         By 1992, Mr. Henderson had moved to Spokane. Gov't Ex. 20 at 1-2. Mr. Henderson saw a VA doctor to complete a neurological disorder exam as part of his appeal of denial of benefits for migraine headaches. ECF No. 226 at 220. Defendant reported during that exam that he was missing ten to fifteen days of work yearly due to headaches and was experiencing severe headaches approximately two or three times each month. Gov't Ex. 20 at 2. He also reported that his headaches involved light sensitivity and nausea and that the headaches began shortly after his in-service motorcycle accident, during which he lost consciousness. ECF No. 226 at 222-23. In 1993, the VA reversed its previous decision and determined that Mr. Henderson was fifty percent disabled on the basis of his debilitating migraine headaches. ECF No. 226 at 225.

         In 1995, Mr. Henderson sought an increased disability rating for his migraine headaches. ECF No. 226 at 228. The VA denied the request and maintained a sixty percent total disability rating.[4] Gov't Ex. 21; ECF No. 226 at 228-30. Mr. David testified that fifty percent disability was the maximum that a veteran could receive on the basis of migraine headaches under the ratings schedules. ECF No. 226 at 232; Gov't Ex. 23 at 1.

         In 1996, Mr. Henderson's wife, Tamara Henderson, provided a statement in support of a new claim for disability for Mr. Henderson on the basis of symptoms of anxiety, depression, and opioid dependence related to medications that Mr. Henderson was prescribed for the migraine headaches. ECF No. 226 at 233; Gov't Ex. 22. Mr. David testified that the VA granted thirty percent disability for the secondary mental health symptoms that the Hendersons reported. Mr. David further explained that because of the way that the VA combines multiple partial disabilities, Mr. Henderson's total disability rating was raised to seventy percent. ECF No. 226 at 234.

         In approximately April 1998, Spokane optometrist Brett Hagen, OD, diagnosed Mr. Henderson with the eye disorder keratoconus after reviewing corneal topography results depicting the shape of the front surface of Mr. Henderson's eyes. Gov't Ex. 27 at 12; ECF No. 229 at 190-91. In February 2000, Mr. Henderson sought service-connection and disability compensation for keratoconus. ECF No. 226 at 238. The VA denied service-connection for the keratoconus on March 30, 2000, but gave Mr. Henderson an opportunity to provide more medical evidence of a service-connection. ECF No. 226 at 240; Gov't Ex. 24 at 7.

         In June 2001, the VA recalculated Mr. Henderson's disabilities and determined that going back to November 1, 2000, Mr. Henderson's “[a]nxiety neurosis with posttraumatic stress disorder and major depressive disorder” was fifty percent disabling, rather than thirty percent, and Mr. Henderson's finger injuries were twenty percent disabling, rather than ten percent. Gov't Ex. 25 at 1.

         On July 18, 2001, Mr. Henderson was examined at the Spokane Eye Clinic by Alan Johnson, OD, who described himself as an optometric physician. ECF Nos. 223 at 103; 226 at 247. Using a standard Snellen eye chart for the examination, Dr. Johnson determined Mr. Henderson's best-corrected visual acuity on that day was 20/80 in his right eye and 20/100 in his left eye. Gov't Ex. 26 at 11-12. Dr. Johnson also determined, based on corneal topographies, that Mr. Henderson's left eye was “moderately” affected by keratoconus while the keratoconus in Mr. Henderson's right eye was “severe.” ECF No. 223 at 220. By December 2001, Dr. Hagen determined that Mr. Henderson's best attainable visual acuity was 20/60 in both eyes and submitted that determination to the Washington State Department of Licensing for purposes of vision ability for a driver's license. Gov't Ex. 1 at 8. As a result, Mr. Henderson's driver's license was revoked due to his visual impairment. Gov't Ex. 9 at 14.

         In December 2001, Dr. Hagen referred Mr. Henderson to a local ophthalmologist, Christopher Sturbaum, MD, to be evaluated for the suitability of contact lenses to address Mr. Henderson's keratoconus and to explore the option of corneal transplant surgery. ECF No. 224 at 124. Contradicting Dr. Johnson's testimony, Dr. Sturbaum testified that based on Mr. Henderson's corneal topographies from spring 2001, Mr. Henderson's keratoconus was “mild.” ECF No. 224 at 127.

         Dr. Sturbaum further testified that a physician cannot “predict somebody's vision based on just a topography . . . . There's more factors involved.” ECF No. 224 at 130-31. Despite that disclaimer, Dr. Sturbaum postulated that Mr. Henderson's corneal topographies could be expected to result in a visual acuity as poor as 20/80. ECF No. 224 at 131. Dr. Sturbaum also testified that the medications that Mr. Henderson was prescribed and was taking at the time that Dr. Sturbaum examined Mr. Henderson in December 2001 can affect vision. ECF No. 224 at 169-70. With respect to the potential effects of TBI on Mr. Henderson's vision, Dr. Sturbaum testified that optometrists and ophthalmologists would not generally be treating TBI patients because TBI injuries are “not their area of expertise.” ECF No. 224 at 156.

         On January 8, 2002, the VA determined that the keratoconus was a service-connected condition and was thirty percent disabling beginning on October 25, 2000.[5] ECF No. 226 at 243. Therefore, according to the VA's formula of starting at 100 percent and accounting for each of a veteran's disabling percentages, by January 8, 2002, the VA calculated Mr. Henderson as ninety percent disabled beginning on October 25, 2000, and compensated him accordingly. Gov't Ex. 26 at 4; ECF No. 226 at 243-44.

         On February 11, 2002, VA optometrist Thomas Riley, OD, examined Mr. Henderson for the first time and measured his visual acuities as 20/100 in both eyes. ECF No. 225 at 235. Mr. Henderson reported during his appointment that his vision “fluctuates on a regular basis.” Gov't Ex. 27 at 16. Dr. Riley saw Mr. Henderson approximately on an annual basis from 2002 until 2013. Dr. Riley determined Mr. Henderson's visual acuity to be 20/100 on February 11, 2002, and 20/400 the next year. ECF No. 225 at 236. Dr. Riley testified that, “Based on the appearance of [Mr. Henderson's] eyes, the keratoconus had not progressed [between February 11, 2002, and January 13, 2003], and so the change in the visual acuity is not explained-explainable.” ECF No. 225 at 236. Mr. Henderson again reported to Dr. Riley in 2004 that his vision “wildly” fluctuated. ECF No. 225 at 232. Dr. Riley further testified that he observed Mr. Henderson bumping into the wall as he arrived for an optometric exam, which is not characteristic of someone with keratoconus.[6] ECF No. 225 at 256-57.

         On March 27, 2002, the VA granted a request from Mr. Henderson for “individual unemployability” benefits from March 11, 2002, meaning that although Mr. Henderson's disabilities did not total 100 percent under the VA ratings system, the VA recognized Mr. Henderson as having a combination of impairments severe enough to prevent him from working, thereby justifying disability compensation as though he were 100 percent disabled. ECF No. 226 at 245; Gov't Ex. 27. Mr. David also testified that the VA “made [Mr. Henderson] permanent” at the time of granting individual unemployability benefits. ECF No. 226 at 251.

         On July 5, 2002, more than three months after already being granted “individual unemployability” status, Mr. Henderson was assessed by the VA Visual Impairment Services Team “VIST” Coordinator Cheryl Sjoberg, MSW, who recorded in her notes that Mr. Henderson was “most likely legally blind” but needed a “definitive diagnosis.” Gov't Ex. 41 at 20-22. VIST Coordinators are social workers who guide veterans with vision disabilities through the disability application process and identify appropriate services for which the veterans should apply. ECF No. 225 at 54-55. Ms. Sjoberg's records indicate that Mr. Henderson reported to her on July 5, 2002, that despite his impairment he was independent in his activities of daily living, including housework, laundry, cooking, yardwork, and child care. Gov't Ex. 41 at 21.

         Benefits Applications and Determinations during the Indictment Period, August 6, 2002, until February 8, 2016

         On approximately August 27, 2002, Mr. Henderson again applied for an increase of his service-connected VA benefits.[7] On a “Statement in Support of a Claim” form, signed and dated August 6, 2002, Mr. Henderson wrote:

I am requesting an increase of my service connected disability due to my keratoconus eye disease. My latest eye appointment is attached and is highlighted with my current vision which is 20/400. I cannot tolerate contact lenses and the VIST coordinator at the Spokane VA Hospital told me that my vision is bad enough to be rated at 90% all by itself. I just had an eye exam at the VA hospital here in Spokane on 7/16/02 by Dr. Harshman. I included the notes from the exam to show my 20/400 vision and fact [sic] that I cannot tolerate any kind of contact lens. I also suffer from severe double vision and no vision at night. Because of this service connected disability eye disease I lost my driver's license and am classified as legally blind according to the VIST coordinator Cheryl C. Sjoberg. . . . Could you please increase my service connected disability for my keratoconus eye disease.[sic] Thank you.

Gov't Ex. 28 at 5-6.

         Mr. Henderson appended a cover letter to his VA benefits application stating:

I am writing to update my request for an increase is [sic] service connected disability due to my eye condition called Keratoconus. I am requesting that this service connected disability be classified as a total and permanent disability. My eye condition continues to regress.
I have already sent in my last eye examination results that was conducted at the Veteran's Administration hospital here in Spokane.

Gov't Ex. 28 at 8.

         The examination results consisted of a statement signed by Douglas Harshman, OD, and dated July 16, 2002:

Mr. Donald B. Henderson is legally blind due to Keratoconus, both eyes with best-corrected visual acuity of 20/400 both eyes. This is a permanent condition and not expected to improve.

Gov't Ex. 28 at 7. A copy of Government's Exhibit 28, at 7, is included here:

         (Image Omitted.)

         The Government did not call Dr. Harshman or Ms. Sjoberg at trial, although Defendant called Ms. Sjoberg during his case.

         On November 25, 2002, Mr. Henderson also applied for Social Security benefits, alleging that he had become unable to work on December 5, 2001. Gov't Ex. 41 at 1. Mr. Henderson stated in his application:

I have an eye condition/disease called keratoconus which is progressive and I am now legally blind and does not get better, but has gotten worse over the last year. I have enclosed one form from Dr. Harshman which states this fact.

         Gov't Ex. 41 at 63. Mr. Henderson submitted Dr. Harshman's July 16, 2002 diagnosis in support of his Social Security application. Gov't Ex. 28 at 7.

         Mr. Henderson's applications for disability benefits on the basis of keratoconus and his permanent condition of legal blindness were granted by the VA on September 26, 2002, and by the SSA on February 19, 2003. Gov't Exs. 28 at 1-4; 41 at 67-68; ECF No. 228 at 30-32. Mr. David testified that the VA based its determination on Mr. Henderson's representation that his condition had worsened and on Dr. Harshman's July 16, 2002 VA diagnosis that said, according to Mr. David, that “based on whatever testing that they completed, he's at 20/400.” ECF No. 228 at 33.

         Investigation

         VA Special Agent Marcus Munn testified that in 2012 he first focused his attention on Mr. Henderson in the course of conferring with Dr. Riley on a different case. ECF No. 224 at 49. After advising Dr. Riley of the “obligation to report to the inspector general information about fraud, waste, and abuse, ” Agent Munn received a lead from Dr. Riley, the content of which was unspecified at trial, that precipitated Agent Munn's investigation of Mr. Henderson. Id. Agent Munn confirmed that the VA had rated Mr. Henderson as 100 percent disabled for both eyes, and subsequently drove to Mr. Henderson's house in June 2012, where he observed Mr. Henderson working in his garden, walking along a low retaining wall, and picking things out of a raised bed. ECF No. 224 at 52. Agent Munn also surreptitiously observed Mr. Henderson waiting at a VA bus stop on the day of a dental appointment. ECF No. 224 at 88.

         In addition, Agent Munn contacted the VA dentist who treated Mr. Henderson and learned that Mr. Henderson had sent the dentist a gift card and thank you card, which thanked the dentist for “giving [Mr. Henderson his] smile back” and stating that “if you ever want to go out and shoot, just give me a call.” ECF No. 224 at 91. A second VA Special Agent, Jason Farrell, accepted Mr. Henderson's invitation under the guise of being the nephew of Mr. Henderson's dentist and went to a shooting range with Mr. Henderson on November 27, 2012. ECF No. 224 at 95.

         Agent Farrell testified that he saw Mr. Henderson quickly locate ammunition in containers in Defendant's garage; that Mr. Henderson gave him directions as Agent Farrell drove to the gun club; that he received detailed feedback from Mr. Henderson about what targets Agent Farrell was hitting at the shooting range; and that he saw Mr. Henderson accurately shoot targets at a range of 21 feet. ECF No. 226 at 906-09.

         For a nearly three-month period from March 22, 2013, until June 11, 2013, Agent Munn recorded video from a covert surveillance camera placed across the street from Mr. Henderson's house, which activated when motion was detected in front of the residence. ECF No. 224 at 106-07. The Government offered videos recorded from March 24, 2013, until April 17, 2013, showing Mr. Henderson exiting a vehicle from the passenger side, backing a vehicle out of the garage, operating a keypad to open his garage, walking across the street, mowing the lawn with both a push and ride-on lawnmower, trimming the edges of the lawn, adjusting the sprinkler system, receiving a pizza delivery, and avoiding a hanging branch, all while not falling or bumping into things. ECF No. 224 at 108-12, 194- 210; Gov't Exs. 74-95. In response to the Government's question, Agent Munn denied that he “ever [saw Mr. Henderson] using a white stick or a cane.” ECF No. 224 at 217.

         When Agent Munn advised VA authorities about his investigation, the VA scheduled a “compensation and pension exam” for Mr. Henderson with Dr. Johnson to evaluate the severity of Mr. Henderson's claimed disability. ECF No. 224 at 210. With the consent of Dr. Johnson and his staff, Agent Munn covertly recorded the exam on May 30, 2013; watched Mr. Henderson leave the exam room; and arranged for an undercover agent to record Mr. Henderson leaving the clinic building. ECF No. 224 at 211-13.

         Dr. Johnson testified that during the exam Mr. Henderson reported double vision as a symptom that he had been experiencing. Dr. Johnson confirmed corneal irregularity in Mr. Henderson's eyes through “objective testing, ” which “would be consistent with the double vision difficulties.” ECF No. 223 at 162-63. Dr. Johnson testified that the double vision likely would occur “occasional[ly], daily depending upon task and lighting.” ECF No. 223 at 166. Dr. Johnson also confirmed that the 2013 corneal topographies of Mr. Henderson's eyes were not significantly different from the 2001 corneal topographies. ECF No. 223 at 170. Based on the lack of change in the topographies, Dr. Johnson concluded that Mr. Henderson's keratoconus was moderate in one eye and severe in the other. ECF No. 223 at 158, 169-70, 220.

         Dr. Johnson also testified that many of the symptoms that are characteristic of TBI overlap with the symptoms of keratoconus, but “the challenge with TBI is it's sometimes that you don't see physical findings.” ECF No. 223 at 187. Dr. Johnson testified that he had not reviewed Mr. Henderson's medical records other than his Spokane Eye Clinic file and had not considered whether Mr. Henderson's vision was impacted by TBI or the medications that Mr. Henderson had taken within a day of the exam. ECF No. 223 at 173, 188-89, 196-97.

         The Government also presented lay witnesses who testified about what they had observed or been told that Mr. Henderson could and could not do. In addition, the Government presented testimony from SSA Program Expert Christine Vu that to qualify for Social Security disability benefits, an individual needs to have an impairment that lasts for a “continuous period of 12 months.” ECF No. 226 at 112. Ms. Vu continued, “And so even though the listing fluctuates, it didn't last 12 months.” Id. Ms. Vu further generated a list of “functions [that Mr. Henderson could carry out] that are not consistent with an ...


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