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Ninth Circuit Affirms Convictions of Bribe-Taking Surgeon
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday upheld the conviction of an orthopedic surgeon who was sentenced to two years and nine months in prison for receiving more than $316,597.44 in bribes and kickbacks—up to $15,000 for each spinal operation—as part of a massive workers’ compensation insurance fraud perpetrated at Pacific Hospital in Long Beach.
Appellant David Hobart Payne—whose medical license has been suspended—on July 14, 2023, was ordered by District Court Judge Josephine L. Staton of the Central District of California to pay a $20,000 fine and to disgorge $316,597 which he received in illegal payments. On Nov. 28, 2023, Staton denied Payne’s motion for release on bond pending appeal.
Under the scheme, Michael Drobot, former owner of the hospital who continued to operate it, paid doctors to steer patients to the facility, which specialized in spinal surgeries. Where implants were used, they came from one of Drobot’s companies.
Payments generally came from the workers’ compensation system. Questions were raised as to whether some of the surgeries were unnecessary.
Affirmance of Payne’s conviction came in a memorandum opinion signed by Circuit Judges Salvador Mendoza Jr. and Jacqueline H. Nguyen and by Senior Circuit Judge A. Wallace Tashima. One of Payne’s convictions was under the Travel Act—18 U.S.C. §1952—which renders it a crime engage in “any unlawful activity” using an interstate facility to “promote...or facilitate” certain prohibited acts. One of those acts is “bribery.”
Taken in its generic sense, Payne maintained, bribery entails a “corrupt intent” but under California law, which was applied, the offense is so broadly defined as to eliminate that element. Hence, bribery, as defined by state law, does not match the crime mentioned in the Travel Act, he reasoned.
“Contrary to Payne’s contention,” the judges responded, “the generic definition of bribery does not include an element of corrupt intent.”
They also pointed out that under last year’s Ninth Circuit decision in U.S. v. Shen Zhen New World I, LLC, “the Travel Act’s underlying state predicate offenses need not be categorical matches for generic bribery.”
Fraud Convictions
Payne was also convicted on two counts of honest services wire fraud. He contended that the indictment was defective because that crime does not apply to a doctor-patient relationship.
Under last year’s Ninth Circuit decision in U.S. v. Solakyan, the judges pointed out, it does.
That decision also topples Payne’s contention that honest services requires a showing of an intent to cause tangible harm, the opinion says.
Sentencing Memorandum
A June 30, 2023 sentencing memorandum prepared by prosecutors called for a sentence of four years and nine months in prison and a $150,000 fine. They argued:
“Defendant was convicted by a jury of conspiracy, honest services fraud, and interstate bribery for participating in the insidious and far-reaching Pacific Hospital bribery scheme that deeply corrupted the medical industry in Southern California. Defendant agreed to trade bodies for bribes in an effort to enrich himself. Defendant’s conduct was willful—he knew it was wrong and engaged in efforts to cover up the bribes by disguising them as legitimate marketing and medical collection fees. These cover-up efforts continued at trial when he perjured himself by lying about the bribe payments and contracts.”
The prosecutors said that conduct such as that displayed by Payne “robs patients of their peace of mind,” explaining:
“Patients who have kickback-tainted surgeries are faced with the mental anguish of now wondering whether they needed a surgery, whether the medical hardware drilled into their bones was legitimate hardware, and whether they should have trusted defendant with their lives. This is a serious offense that warrants serious punishment.”
Payne’s View
Payne’s memorandum asserted:
“Dr. Payne is a true first-time offender. The conduct of conviction took place over a decade ago, and he has led an otherwise impressive life of service. This Court has already sent a strong message of deterrence through the many, custodial sentences imposed upon defendants convicted in the Pacific Hospital scheme, including doctors, chiropractors, marketers, and hospital executives who were far more culpable and profited by orders of magnitude more.”
The next sentence in the memorandum is redacted. It continues:
“Dr. Payne has already been incapacitated—he cannot reoffend. He has already been punished, moreover, since he has lost his vocation—a medical career he worked his entire adult life to build—and his ability to care and provide for those he loves. No additional measure of punishment is necessary to deter him or others from future criminality, or to achieve any goal of sentencing. Dr. Payne has lost it all.
“Dr. Payne therefore respectfully requests that the Court sentence him to a term of probation upon those conditions that the Court deems appropriate.”
The hospital has been sold. Drobot was sentenced by Staton in 2018 to five years and three months in prison.
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