9th Circuit orders charges reinstated in medical fraud case

By Mary Manning

Thursday, Aug. 27, 2009 | 4:15 p.m.

A decision by the 9th Circuit Court of Appeals today reinstated medical fraud charges against Noel Gage and Howard Awand.

A trial judge in the fraud case against Gage and Awand had improperly dismissed the indictment, the 9th Circuit said in an eight-line decision.

The appeals court reversed the trial court judge and found that the indictment "must be reinstated."

Gage and Awand are two of 24 local doctors and lawyers suspected of cooperating in a complicated plot to grab millions of dollars from personal injury cases.

Visiting Senior U.S. District Court Judge Justin Quackenbush dismissed the fraud case in June 2008 after the government refused to comply with his order to grant immunity to spine surgeon Dr. Mark Kabins. The government filed an appeal.

The U.S. Attorney's Office argued before the 9th Circuit two weeks ago that it was improper for the trial judge to dismiss the indictment.

The 9th Circuit stated that because Doctor Kabins would not have directly contradicted a government witness who received immunity, the indictment must be reinstated.

"We are obviously very pleased with the court's decision," said U.S. Attorney Greg Brower of Nevada. "We have felt all along that Judge Quackenbush's ruling with respect to Doctor Kabins was erroneous and contrary to the overwhelming weight of case law precedent. Today's ruling not only vindicates our position on the issue we appealed, it puts these important cases back on track toward trial."

Federal criminal fraud and conspiracy charges were filed against Gage and Awand in 2007. The men are accused of being part of a network of Las Vegas physicians and lawyers who cheated clients out of honest services by inflating medical costs, protecting doctors from malpractice lawsuits and sharing kickbacks from legal settlements.

Gage's trial began in February 2008 and lasted for three weeks. The jury deliberated for one week before announcing it could not reach a conclusion.

During trial, the government presented evidence that Doctor Kabins allegedly participated with Gage and Awand in a conspiracy and scheme to defraud one of Kabins' patients. Judge Quackenbush dismissed the case, finding that it was unfair the government offered immunity to two doctors accused of being involved in the conspiracy, but not to Kabins, whose testimony was expected to contradict government witnesses.

The government refused to grant immunity because Kabins did not contradict an immunized government witness and he was an unindicted co-conspirator and a target of the ongoing investigation.

In March 2009, Kabins was charged with fraud and conspiracy for alleged role in the scheme.