Federal Evidence Review

In health care fraud trial concerning false billings, computer records of physician’s drug company purchases were admissible as business record under FRE 803(6), in United States v. Moon, 513 F.3d 527, 544-45 (6th Cir. 2008)

As part of a continuing series concerning the admissibility of computer evidence, a health care fraud case demonstrates how transactional computer records may be admissible under the business records hearsay exception. This type of transactional computer evidence is increasingly used.

In the case, doctor Moon specialized in cancer care and used chemotherapy medications (including Taxol, Camptosar and Procrit) to treat insured patients. An investigation was opened after a complaint was received that she was providing partial doses of chemotherapy medication but billed the medical insurance companies for full doses. The drug companies maintained computer records of the purchases. At trial, the government called custodians of the drug companies who testified about the defendant’s transactions. The trial court admitted the computer records under the business records exception, FRE 803(6). The defendant was convicted and sentenced to 188 months in prison and ordered to pay $432,000 in restitution.

On appeal, the Sixth Circuit rejected the defendant’s hearsay challenge to the admission of the computer records. The fact that the records were computer-generated did not undermine their status as business records. In reviewing other cases on the issue, the circuit noted that FRE 803(6) “specifically allows the admission of ‘data compilation,’ in any form.” Moon, 513 F.3d at 545 (citation omitted). The circuit also found support in two other cases which had admitted records generated by a computer. Id. (citing United States v. Russo, 480 F.2d 1228, 1240 (6th Cir. 1973) (admitting computer generated “statistical run” as a business record rather than a summary); see also United States v. Catabran, 836 F.2d 453, 457 (9th Cir. 1988) (computer printouts presenting inventory, payroll, and other accounting data entered into computer database by bookkeepers on monthly basis were business records were admissible as business records because the treatment of “general ledgers as business records, not summaries” did not change where a computer produced the ledger and FRE 803(6) “specifically allows the admission of ‘data compilation,’ in any form”))] The Moon court concluded: “Because of the similarities between the computer produced records at issue in Russo and Catabran and the evidence at bar, we find that the evidence of Defendant’s drug purchases falls within the business records hearsay exception.” Id.

As more data is maintained or generated on computers, the contents of the records may be admitted under FRE 803(6) where the requirements of the rule are met. For other cases in the series focusing on electronic evidence, visit the electronic evidence blog page.