United States District Court, E.D. Kentucky, Central Division, Frankfort
MEMORANDUM OPINION & ORDER
Gregory F. Van Tatenhove United States District Judge
Rule of Evidence 404(b) allows evidence of a criminal
defendant's prior bad acts to be introduced for purposes
other than proving a person's character and his
propensity to act in accordance with that character. In this
case, the Government and Defendants dispute whether certain
evidence is admissible under that rule. While the Government
claims the noticed evidence is relevant to proving
Defendants' intent, plan, and knowledge, Defendants
maintain admitting the evidence would violate the protections
of the rule. For the reasons that follow, the Court GRANTS IN
PART but DENIES IN PART Defendant Brian Walters's motion
to exclude admission of the evidence in question.
five Defendants in this matter are charged with one count of
conspiracy to defraud the United States in violation of 18
U.S.C. § 1349 and ninety-nine counts of aiding and
abetting one another to commit healthcare fraud in violation
of 18 U.S.C. §§ 2 and 1347. [R. 1.] On August 9,
2016, the Government filed a notice of its intent to seek the
admission of two categories of evidence falling within the
scope of Federal Rule of Evidence 404(b). [R. 112.]
the Government desires to introduce proof of a series of
allegedly inappropriate procedures that Defendants'
laboratory, PremierTox, used for its urine drug testing, as
well as evidence related to allegedly inappropriate payments
Defendant Robert Bertram made to promote business referrals
to PremierTox. [Id.] Defendant Brian C. Walters
filed a response in opposition to the notice, as well as a
motion to preclude admission of the evidence and a
conditional motion for severance, pending the Court's
decision on admissibility. [R. 116; R. 117.] Defendants James
W. Bottom and Robin G. Peavler have joined in Defendant
Walters's request introduction of the noticed
evidence. [R. 120; R. 154.]
Walters, Wood, and Peavler maintain the noticed evidence is
inadmissible under Federal Rule of Evidence 404(b). Pursuant
to that rule, “evidence of a crime, wrong, or other act
is not admissible to prove a person's character in order
to show that on a particular occasion the person acted in
accordance with the character.” Fed.R.Evid. 404(b)(1).
the rule goes on to note in relevant part that such evidence
“may be admissible for another purpose, such as proving
motive, opportunity, intent, preparation, plan, knowledge,
identity, absence of mistake, or lack of accident.”
Fed.R.Evid. 404(b)(2). The Sixth Circuit has adopted a
three-part test that courts use to decide whether to admit or
exclude evidence under Rule 404(b):
First, the district court must decide whether there
is sufficient evidence that the other act in question
actually occurred. Second, if so, the district court
must decide whether the evidence of the other act is
probative of a material issue other than character.
Third, if the evidence is probative of a material
issue other than character, the district court must decide
whether the probative value of the evidence is substantially
outweighed by its potentially prejudicial effect.
United States v. Jenkins, 345 F.3d 928, 937 (6th
Cir. 2003) (emphasis in original); see also United States
v. Yu Qin, 688 F.3d 257, 262 (6th Cir. 2012).
Rule 404(b) “does not extend to evidence of acts which
are ‘intrinsic' to the charged offense.”
Fed.R.Evid. 404 advisory committee's note. Put another
way, “Rule 404(b) is not implicated when the other
crimes or wrongs evidence is part of a continuing pattern of
illegal activity.” United States v. Weinstock,
153 F.3d 272, 276 (6th Cir. 1998) (quoting United States
v. Barnes, 49 F.3d 1144, 1149 (6th Cir. 1995)).
Ultimately, this Court has broad discretion to determine
whether bad acts evidence is admissible. See, e.g.,
United States v. Stout, 509 F.3d 796, 799 (6th Cir.
United States seeks to introduce evidence of payments made by
Defendant Robert Bertram to Willow Rouben and Night Hawks
Investment Company in exchange for business referrals to
PremierTox and Nexus, a laboratory not referenced in the
indictment but allegedly owned, at least in part, by Dr.
Bertram. [R. 112 at 3.] These payments, which might violate
the Anti-Kickback Statute, 42 U.S.C. § 1320a-7(b)(b),
provide a classic example of a “crime, wrong, or other
act” under Rule 404(b). Because the test for admitting
the evidence is not satisfied, any evidence of these payments
shall be inadmissible at trial.
relevant three-prong test first asks the Court to consider
whether there is sufficient evidence to prove the
inappropriate payments actually occurred. The Government
claims that evidence of the payments has already been
produced through discovery [R. 112 at 4], and several
exhibits attached to the Government's notice do seem to
corroborate that contention. [See, e.g., R. 153-18.]
But whether sufficient evidence ...