Monday, May 18, 2009
Ninth Circuit Panel Tosses Conviction in Stolen Medical Parts Scam
By KENNETH OFGANG, Staff Writer
The Ninth U.S. Circuit Court of Appeals Friday overturned a Seattle-area woman’s convictions on charges of transportation of stolen property and conspiracy in connection with a scheme to sell medical devices she stole from her employer.
The court said U.S. District Judge Robert Lasnik of the Western District of Washington erred in allowing Tuyet Thi-Bach Nguyen’s co-defendant to testify with regard to Nguyen’s knowledge that the property was in fact stolen.
The ruling, however, leaves intact Nguyen’s convictions for introduction of misbranded medical devices into interstate commerce, although the case was sent back to the district court for retrial with respect to the other charges.
Lasnik sentenced Nguyen to four years in prison, and co-defendant Sess Merke to two years. Merke was convicted of conspiracy to transport stolen medical devices in interstate commerce in the case, which involved $368,000 worth of ultrasound probes.
The case was investigated beginning in September 2000, when Philips Medical Systems—a medical device manufacturer located in the Seattle suburb of Bothell—contacted local police to report the theft of the devices. The investigation ultimately came to involve both the Food and Drug Administration and the Internal Revenue Service.
The investigation led to charges that Merke, who worked for Philips for 10 years and was in charge of several stockrooms of ultrasound equipment, filled out fraudulent documentation for allegedly defective probes that were in fact still usable, and which were then sold with altered serial numbers through Columbia Medical Systems, Inc., owned by Nguyen and her husband.
Evidence showed that Nguyen’s company sold more probes than it purchased over a four-year period and that many of those probes had false serial numbers. One of the federal agents investigating the case related an interview with Merke, who said he sold stolen probes to Nguyen’s company, although Nguyen’s attorney maintained she did not know the probes were stolen or that the serial numbers had been changed.
Judge Ronald Gould, writing for the Ninth Circuit, said the hearsay testimony regarding what Merke told the agent should have been excluded under the Confrontation Clause since Nguyen’s counsel could not cross-examine Merke about the statement. While the prosecution argued that the statement was not inculpatory, the appellate jurist said this made no difference because “Confrontation Clause error occurs at admission of a testimonial statement without an opportunity to cross-examine”
The issue of whether the statement is inculpatory may affect the harmless-error analysis, the judge said, but does not determine whether the admission of the testimony was error.
In this case, Gould went on to say, the error was not harmless beyond a reasonable doubt.
“The statement that Merke received money from the Nguyens in exchange for medical equipment was the most persuasive evidence that tied Tuyet Nguyen to the stolen probes, and the only testimony that showed her knowledge that the probes were stolen,” the judge explained.
Senior Judge Robert M. Beezer concurred, but Judge Consuelo M. Callahan argued in a separate opinion that the convictions should be affirmed in their entirety.
“Based on all of the remaining evidence in the record, I conclude that any reasonable jury would have connected Nguyen to the stolen probes and determined that Nguyen knew the probes were stolen, even without Merke’s hearsay statement,” Callahan wrote.
The case is United States v. Nguyen, 07-30197.
Copyright 2009, Metropolitan News Company