NOT TO BE PUBLISHED WITHOUT

THE APPROVAL OF THE COMMITTEE ON OPINIONS

SUPERIOR COURT OF NEW JERSEY

STATE OF NEW JERSEY PASSAIC COUNTY

LAW DIVISION, CRIMINAL PART

v. INDICTMENT NO. 18-02-00032-S

TODD KOPPEL, and GARDEN

STATE PAIN MANAGEMENT, P.A.,

Defendant(s).

____________________________________

Decided: July 24, 2019

Robert Grady, Deputy Attorney General, attorney for the

plaintiff (Gurbir S. Grewal, Attorney General, attorney)

Alan L. Zegas, attorney for defendant, (Law Offices of Alan L.

Zegas, attorney)

BARBARA J. BUONO STANTON, J.S.C.

THIS MATTER comes before the Court by way of defendants’,

Todd Koppel (hereinafter referred to as “Dr. Koppel”) and Garden

State Pain Management, P.A. (hereinafter referred to as “Garden

State Pain Management”), (hereinafter referred to collectively

as “defendants”), Omnibus Motion, filed on the defendants’

behalf by Alan Zegas, Esq. (hereinafter referred to as “Mr.

Zegas”), with Robert Grady, Esq., Deputy Attorney General

(hereinafter referred to as “D.A.G. Grady”), appearing in

opposition on behalf of the Attorney General of the State of New

Jersey: (1) to dismiss the indictment on legal and evidential

2

insufficiency grounds; (2) for a Bill of Particulars; (3) for

complete discovery including exculpatory and impeachment

material1; (4) a 404(b) Hearing; and (5) a Driver Hearing.

Thereafter, the State filed a motion to preclude defense

counsel from representing both defendants in this case.

For the reasons that follow, defendants’ Motion to Dismiss

the Indictment is GRANTED without prejudice,2 and the State’s

motion to preclude defense counsel from representing both

defendants is DENIED for purposes of this

motion only.

PROCEDURAL HISTORY

On February 28, 2018, the Grand Jury returned a 20 count

indictment, No. 18-02-0032-S charging both defendants with one

(1) count of First Degree Conspiracy; one (1) count of Fourth

Degree Financial Facilitation of a Criminal Activity; one (1)

count of Second Degree Attempted Theft by Deception; one (1)

count of Second Degree Theft by Deception; and three (3) counts

of Second Degree Health Care Claims Fraud. In addition, the

Grand Jury charged Dr. Koppel, individually, with the following:

one (1) count of Second Degree Misconduct by Corporate Official;

1During oral argument on the motions, the State did not contest the State’s

discovery obligations and therefore, the relief sought is moot. 2 For completeness sake, this decision does not preclude the State from

representing its case to the Grand Jury.

3

two (2) counts of Second Degree Commercial Bribery and Breach of

Duty to Act Disinterestedly; one (1) count of Second Degree

Health Care Claims Fraud; six (6) counts of Third Degree

Criminal Running; three (3) counts of Third Degree Commercial

Bribery and Breach of Duty to Act Disinterestedly.

On January 9, 2019, defendants filed the instant Omnibus

Motion and supporting brief. On February 26, 2019, the State

filed an opposition brief, and a Motion to preclude defense

counsel from jointly representing both defendants. On April 2,

2019, defendants filed its reply brief.

On April 17, 2019 this court heard oral argument on the

instant motions. During oral argument, the State submitted that

the State is not contesting any of defendants’ motions

requesting discovery.

Given some of the issues raised at oral argument, each

party submitted supplemental briefs, the State filed it’s brief

on May 15, 2019 and defendants filed their brief on May 17,

2019.

FINDINGS OF FACT

The salient facts of the underlying case are derived from the

record.

The Grand Jury presentment in this case included a Grand

Jury Orientation on February 14, 2018. During that Orientation,

4

the State, represented by the Attorney General’s Office,

confirmed that the grand jurors “had an opportunity to review

the Charge to the State Grand Jury.” State’s Br., Ex. A at

T:2:15-21. The parties do not dispute that the “Charge to the

State Grand Jury” was reference to AOC Directive #12-06, which

mandates the Court to read the Standard Grand Jury Charge (“the

Charge”) to a newly paneled Grand Jury. The use of the Charge

and the text of same is mandatory unless supplemented “to

address certain logistical issues specific to a particular

county…” AOC Directive #12-06; See, AOC Directive #23-06.

The Charge includes the following explanation of the burden

of proof to be applied:

You are not to return an indictment unless the

State has presented evidence which together

with the reasonable inferences you draw from

that evidence, leads you to conclude that (1)

a crime has been committed and (2) the accused

has committed it.

During the Grand Jury Orientation, the D.A.G. also

revisited the explanation as the burden of proof required for

consideration when deliberating. She explained the following:

You have to understand the standard or burden

of proof which is to guide you in your

determination as to whether or not to return

an indictment. That standard is called a

"prima facie" case. Ordinarily, you will hear

only the State's side of the case. By a prima

facie case, it is meant one from which

inferences of guilt can legitimately and

reasonably be drawn. Prima facie evidence is

defined in law as at first sight; accepted as

5

so until proved otherwise. This means that you

are to determine whether or not the State has

presented evidence which by itself, if

unexplained or uncontradicted, establishes

that a crime has been committed and that a

particular person committed it. Such a person

is referred to in the law as a target of the

Grand Jury investigation. It is only where

such a state of evidence is made out that an

indictment is authorized. Again, you do not

have to determine whether the State has proven

all of the elements of the crime beyond a

reasonable doubt. You only have to determine

whether there is prima facie evidence that a

crime has been committed and that the target

has committed it.

[State’s Br., Ex. A at T:6:23-25 – 7:1-19][Emphasis Added]

On February 28, 2018, the State presented evidence to the

Grand Jury, and on that day, the Grand Jurors returned the

aforementioned indictment. State’s Br., Ex. A.

In summary, the State presented evidence that between the

years of early 2010 and late 2016, Dr. Koppel, the owner of

Garden State Pain Management, orchestrated a kickback-bribe

scheme by compensating five (5) different chiropractors a total

of $193,000 in exchange for referrals to his clinic, Garden

State Pain Management. Defs. Br., Ex. B at T:4:25 – T:5:1-2. To

facilitate this scheme, the State claims that Dr. Koppel

invoiced a number of insurance companies for services and

treatments performed on the referred patients which amounted to

a sum of over $500,000. Defs. Br., Ex. B at T:5:7-12. The State

further contends Dr. Koppel utilized the aforementioned funds to

6

supplement his salary, for profit sharing, or bonus payments

from Garden State Pain Management. Defs. Br., Ex. B at T:5:13-

14.

The presentment included a Brooke Murphy inquiry by the

State of grand juror potential bias or conflicts of interest.

Specifically, the D.A.G. stated:

The first thing we’re going to do is the Brooke

Murphy inquiry. This is a process to

determine whether any jurors have potential

biases or conflicts of interest that would

make it so that you couldn’t be impartial to

the defendants in this case. It’s a series of

questions that I’m going to pose to you now.

If your answer to any of those questions

indicates that you may have a potential

conflict of interest, just raise your hand.

Don’t speak about it with your neighbors. At

that point, we will go and talk to the

Assignment Judge, and see if you’re allowed to

stay in this case.

[Defs. Br., Ex. B at T:7:13-24]

…

The final note before I begin, I just want to

mention there are many insurance companies

listed on this sheet. There are a couple

different banks as well. The purpose of these

questions is to root out potential bias. A

vast majority of people in the State of New

Jersey have health or auto insurance with one

of the companies listed, and if merely having

insurance with one of these companies’ bars

you from sitting in this case, almost nobody

could be Grand Juror. Merely having insurance

with one of these companies or a bank account

with one of these companies, doesn’t

necessarily mean you have a bias and cannot

sit in this case. I will ask you questions

about your relationship with those different

7

persons and entities, and I’ll ask whether you

believe that relationship may affect your

ability to judge the evidence fairly and

impartially. If you do believe that the

relationship, however slight it may be, may

potentially affect your ability to be a fair

and impartial, let me know and we can discuss

that with the judge, and the judge will ask

you a few more questions to see if you can sit

in this case.

[Defs. Br., Ex. B at T:9:4-25 – T:10:1]

During the State’s presentation of evidence to the Grand

Jury, Detective Wendy Berg of the New Jersey Office of the

Attorney General, Division of Criminal Justice, Office of the

Insurance Fraud Prosecutor (hereinafter “Det.Berg”) testified as

to the legality of the actions the State alleges Dr. Koppel

took:

Q: And that referral was in contravention of

the laws for chiropractic licensed

individuals, medical practitioners and the

criminal law, correct?

A: Yes.

[Defs. Br., Ex. B at T:50:13-16]

…

Q: Detective, it’s illegal to pay an

individual in order to have them bring in

patients for the purposes of billing insurance

companies, correct?

A: Yes.

[Defs. Br., Ex. B at T:65:22-25].

8

In addition, Det. Berg testified as to the specific

elements of the charge, including considerations that insurance

companies deem as material:

Q: In the health care billing context,

insurance companies rely on a lot of things in

those billing forms and health care claims

forms and in the submission of claims in order

to make a decision about whether or not they

are going to pay a claim, correct?

A: Yes.

Q: And insurance companies consider it

material when individuals are committing

crimes and submitting bills after those crimes

have been committed, correct?

A: Yes.

Q: There is actually some civil case law that

some insurance companies rely on, and in that

civil case law it says that if there is a

kickback scheme that those doctors and those

chiropractors are not entitled to any payments

that come out of that kickback scheme,

correct?

A: Yes.

[Defs. Br., Ex. B at T:138:1-18].

In her testimony, Det. Berg read from an investigative

report which memorialized a proffer session3 between the State

and Dr. Ronald Hayek (hereinafter referred to as “Dr. Hayek”) on

April 1, 2016, which was marked as Exhibit 4 in evidence at the

3 In the transcript, Det. Berg testified to the meaning of a proffer session

stating Dr. Hayek provided a statement to the State and in exchange, the

information furnished by him will not be used against him unless it is

discovered to be false. Defs. Br., Ex. B at T:24:9-17.

9

Grand Jury hearing. Defs. Br., Ex. B at T:25:10-14. This is

reflected in the following testimony:

Q: I’m going to move forward to page six.

We’re on page six of eight. Detective, can you

read the paragraph starting Dr. Todd Koppel?

A: Yes. “Hayek has been getting paid by Dr.

Koppel for patient referrals from 2006 to

present. Koppel is involved in pain

management. Koppel operates Garden State Pain

Management in Clifton. Hayek met Koppel at

Endosurgical Center in Clifton where he did

MUAs, with are manipulations under anesthesia.

Koppel was doing pain management at

Endosurgical Center. Koppel told Hayek if he

needed somewhere to refer patients for pain

management, Hayek could send his patients to

Koppel. Koppel pays Hayek once every few

months in cash. Koppel does not consistently

treat Hayek’s patients. Koppel and Hayek are

good friends. Koppel does a good job, that’s

why Hayek uses him. Hayek advised Koppel pays

him approximately 2,000 every three months or

probably 8,000 a year. The list of Hayek’s

referrals is kept on Koppel’s thumb drive.

Koppel plugs the thumb drive into his laptop

computer. Cash payments by Koppel take place

in either Hayek’s office or Koppel’s Clifton

office depending on where Koppel is at the

time. Koppel draws the blinds in his office,

counts the cash behind his desk drawer, and

gives the cash to Hayek. Hayek usually calls

Koppel to schedule a meeting. Hayek last

called Koppel about two months ago 2/10/2016.”

[Defs. Br., Ex. B at T:25:25 – T:26:1-23]

At another point during the Grand Jury presentation, the

D.A.G. played a recording from a proffer session between the

State and Dr. Philip Potacco (hereinafter referred to as “Dr.

Potacco”) on October 6, 2017, which was marked as Exhibit 19 in

10

evidence. Defs. Br., Ex. B at T:68:2-4. After the recording

ended, the D.A.G. questioned Det. Berg regarding same:

Q: Potacco in his proffer session later

stated that no one including his family was

willing to bail him out?

A: Correct.

Q: He said while he was in jail he had a

discussion with another inmate at the jail,

correct?

A: Yes.

Q: And based on what was said during that

discussion, he decided to put pressure on an

individual he knew he had dirt on, correct?

A: Yes.

Q: So Potacco actually stated during that

proffer that he used his criminal defense

attorney’s staff to call up Dr. Koppel,

correct?

A: Yes.

Q: And put pressure on him to pay his bail,

correct?

A: Correct.

[Defs. Br., Ex. B at T:70:5-22]

The D.A.G. questioned Det. Berg about an office employee

named Jude Dimanche (hereinafter referred to as “Mr. Dimanche”),

and the State alleges Dr. Koppel paid Mr. Dimanche to “bring in

patients.” Defs. Br., Ex. B at T:65:17-21. Det. Berg affirmed,

through her testimony, that there were approximately 40 checks

made to Mr. Dimanche from Dr. Koppel’s personal Wells Fargo

11

account for various amounts, including $100, $200, and $400.

Defs. Br., Ex. B at T:66:14-15 – 67: 1-11. In addition, the

D.A.G. inquired as to the memo lines of the checks:

Q: Most of them don’t have anything in the

memo line?

A: Correct.

Q: Some of them have something in the memo

line but it’s really hard to read exactly what

it says?

A: Yes.

Q: And, Detective, this is just a subset of

those, but there were about 40 some checks

made out to Jude Dimanche?

A: Correct.

[Defs. Br., Ex. B at T:67:12-21]

Following the State’s presentation, the Grand Jury indicted

defendants with the aforementioned charges.

LEGAL DISCUSSION

I. Motion to Dismiss the Indictment

A. State’s Failure to Properly Instruct the Jury as to the

Meaning of Probable Cause and the State’s Improper

Instructions as to the Applicable Burden of Proof.

Defense seeks to dismiss the indictment based on the

State’s failure to use instruct the grand jurors as to “probable

cause” and the State’s inclusion of other words in explaining

the applicable standard of proof.

12

As noted above, the Grand Jury was read and given the

Standard Grand Jury Charge in accordance with AOC Directive #12-

06 and AOC Directive #23-064. Again, that Charge included the

following:

You may only act on the basis of evidence you

receive. You are not to return an indictment

unless the State has presented evidence which

together with the reasonable inferences you

draw from that evidence, leads you to conclude

that (1) a crime has been committed and (2)

the accused committed it.

Here, after the Court gave the Grand Jury its Charge, the

D.A.G. explained – in her own words – what the charge of the

standard of proof required. Her explanation included the

following:

Ordinarily, you will hear only the State's

side of the case. By a prima facie case, it is

meant one from which inferences of guilt can

legitimately and reasonably be drawn. Prima

facie evidence is defined in law as at first

sight; accepted as so until proved otherwise.

(emphasis added)

The issue before this court is whether or not that

additional charge was so blatantly wrong as to warrant the

4 Subsequent to Directive #12-06, Assignment Judge’s Directive #23-06, dated

December 22, 2006, provided further guidance in Grand Jury procedure. Standard

4. Charging the Grand Jury of Directive #23-06 requires each Grand Juror to

receive a hard copy of the Standard Grand Jury Charge, promulgated by Directive

#12-06, which will also be read to them by the Assignment Judge or designated

supervising Judge before the first Grand Juror session. Further, the comment

to Standard 4 explains by instructing the Grand Jury in this manner, presentment

information will be provided when necessary, and it will lay down a foundation

to facilitate the Grand Jury in processing additional information.

13

dismissal of the indictment. State v. Triestman, 416 N.J. Super

195, 205 (App. Div. 2010).

For the reasons that follow, and after careful

consideration of applicable case law and our Rules of Court,

this court finds that the standard as described by the D.A.G.

was potentially misleading and confusing to the grand jurors as

to their respective roles in the Grand Jury process, and as to

the standard and burden of proof they were to apply. This court

finds that the definition provided was more than an imprecise or

inartful way of summarizing that burden, but given the potential

impact and effect on the listeners (i.e., each of the 23 grand

jurors) that there was a burden shifting (i.e., “until proven

otherwise”) and/or that they would hear from a side other than

the State, it was blatantly wrong and thus, the motion to

dismiss the indictment is granted.

As our New Jersey Supreme Court has stated in State v.

Hogan, 144 N.J. 216, 227 (1996), “[t]he Grand Jury has always

occupied a high place as an instrument of justice in our system

of criminal law. . . ." Ibid. (quoting State v. Del Fino, 100

N.J. 154, 165 (1985)); State v. Murphy, 110 N.J. 20, 36 (1988).

Article 1 of our State Constitution guarantees the Grand Jury a

central role in the enforcement of the criminal law of this

State:

14

No person shall be held to answer for a

criminal offense, unless on the presentment or

indictment of a Grand Jury, except in cases of

impeachment, or in cases now prosecuted

without indictment, or arising in the army or

navy or in the militia, when in actual service

in time of war or public danger.

[N.J. Const. art I, ¶8; see, Hogan, supra, 144 N.J.

at 227.]

Specifically, the Grand Jury must determine whether the

State has established a prima facie case that a crime has been

committed and that the accused has committed it. State v. New

Jersey Trade Waste Ass'n, 96 N.J. 8, 27 (1984); Trap Rock Indus.

v. Kohl, 59 N.J. 471, 487-88 (1971). The Grand Jury is the

"'primary security to the innocent against hasty, malicious and

oppressive persecution,'" Del Fino, supra, 100 N.J. at 164,

(quoting Wood v. Georgia, 370 U.S. 375, 390 82 S. Ct. 1364,

1373, 8 L.Ed.2d 569, 580 (1962)), and that it serves the

invaluable function of determining "'whether a charge is founded

upon reason or was dictated by an intimidating power or by

malice and personal ill will.'" Ibid. (quoting United States v.

Provenzano, 688 F.2d 194, 202 (3d Cir.)). Thus, the Grand Jury's

"'mission is to clear the innocent, no less than to bring to

trial those who may be guilty.'" State v. Hart, 139 N.J. Super.

565, 568 (App.Div.1976) (quoting United States v. Dionisio, 410

U.S. 1, 16-17 (1973)).

15

The Grand Jury plays a significant role in our criminal

justice system. Its independence is critical to its function,

and any injury to that independence is an injury to the system

itself.

The Grand Jury’s independence is the very reason Courts

have “expressed a reluctance to intervene in the indictment

process.” Hogan, 144 N.J. at 228-29 (citing State v. Perry, 124

N.J. 128, 168-69 (1991); State v. Long, 119 N.J. 439, 478

(1990); State v. Wein, 80 N.J. 491, 501 (1979); State v. La

Fera, 35 N.J. 75, 81 (1961). Once the Grand Jury has acted, an

"indictment should be disturbed only on the 'clearest and

plainest ground,'" Perry, supra, 124 N.J. at 168 (quoting New

Jersey Trade Waste Ass'n, supra, 96 N.J. at 18-19), and only

when the indictment is manifestly deficient or palpably

defective. E.g., Wein, supra, 80 N.J. at 501.

As the Hogan court explained, Courts “have demonstrated a

greater willingness to review Grand Jury proceedings where the

alleged deficiency in the proceedings affects the grand jurors'

ability to make an informed decision whether to indict.” Hogan,

supra, 144 N.J. at 229 (citing Murphy, supra, 110 N.J. at

35 (recognizing general reluctance of courts to dismiss

indictments, but noting that indictment may be dismissed if

alleged misconduct infringes on Grand Jury's decision-making

function); Del Fino, supra,100 N.J. at 164-65 (criticizing grand

16

jurors for voting to indict without having been present at all

Grand Jury sessions, and stating that grand jurors who vote to

indict must be informed of evidence presented at each session);

see also, Hart, supra, 139 N.J. Super. at 568-69 (dismissing

indictment because prosecutor improperly encroached on

independence of Grand Jury by telling some jurors that their

initial vote not to indict was wrong).

A target of an investigation has the right to have the

proper standard of proof announced to the Grand Jury, and not a

standard that is subject to different meanings, and certainly

not a standard that implies any shift of the State’s burden of

proof. The law is clear. Incomplete or imprecise Grand Jury

instructions are not fatal to an indictment. To be fatally

defective, the instructions must be blatantly wrong. Triestman,

supra, 416 N.J. Super at 205. To be considered blatantly wrong,

the prosecution’s instructions must be misleading or an

incorrect statement of the law. Ibid.; State v. Ball, 268 N.J.

Super. 72, 119-120 (App. Div.), aff’d, 141 N.J. 142 (1995),

cert. denied, 516 U.S. 1075 (1996).

This court finds that the interchangeable use of the

phrases “probable cause” and “prima facie evidence” to grand

jurors does not render the indictment fatally defective or

blatantly wrong. In re State ex rel. A.D., 212 N.J. 200, 218-19

(2012). Use of either of those phrases is acceptable. Thus,

17

defendants’ claim that failure to use the term probable cause is

not fatal to the indictment as the State used instead, it’s

alternative probable cause.5

However, here the D.A.G. revisited the standard of proof

instructions with the grand jurors after the grand jurors were

previously instructed as to same by the Court and provided a

written copy. The D.A.G. did not read the Standard Jury Charge

verbatim, nor was the D.A.G. required to do so. Instead, the

D.A.G. added words to the Standard which, in this court’s view,

improperly encroached on the independence of the Grand Jury by

directing them to “accept as so” the evidence presented and

misleading them that somehow that burden shifted to another “to

prove otherwise” once a prima facie case was established. The

explanation “until proved otherwise” followed the D.A.G.’s

explanation that “ordinarily, you will hear only the State’s

side of the case,” thus reinforcing the misconception that the

grand jurors would hear from someone other than the State.

As noted above, the question before this court is: was that

standard of proof explained by the D.A.G. imprecise and

incomplete, or blatantly wrong?

Any instruction that shifts a burden of proof to someone

other than the State is blatantly wrong. In State v. Spano, 64

5 The court finds no fault with the use of the words “first sight” to explain

“prima facie,” as that is it’s Latin derivative.

18

N.J. 566, 567 (1974), our own Supreme Court affirmed the

reversal of conviction where the A.P.’s closing remarks that the

defendant could have testified in the Grand Jury proceeding was

“tantamount to a denial of the right of a defendant to remain

silent.”

Similar to Spano, the D.A.G.’s remarks that the evidence

presented must be accepted as so until proved otherwise is

tantamount to improper burden shifting where there is no burden

on a target (and later a criminal defendant) to prove his

innocence or offer any proof as to his innocence.6 Therefore,

there is no burden on anyone “to prove otherwise.” These words

have no justifiable meaning.

To be sure, where an instruction relieves the State of a

burden, our Courts have properly dismissed indictments. For

example, in State v. Eldakroury, 439 N.J. Super. 304 (App. Div.

2015), the Appellate Division upheld a trial court’s dismissal

of an indictment where the instructions to the jury was

“blatantly wrong” by relieving the State from having to

establish defendant’s mens rea as to a material element of an

offense. In Eldakroury, the State had failed to instruct the

jury that the location of a business was a material element of

the offense and that it therefore had the burden of thus proving

6 The Court acknowledges that a target of a grand jury investigation may be

subpoenaed to testify and/or consent to appear before the grand jury, but

this does not shift the burden of proof in any way onto defendant.

19

that the defendant had acted knowingly with respect to that

element. Id. at 306-07. Similar to Eldakroury, here the

instruction “accept as so until proved otherwise” relieved the

State of its burden to convince the Grand Jury that it had

presented prima facie evidence for their own independent

consideration; and adding the phrase “until proved otherwise”

added a burden to the defense that was simply wrong.

While dismissing an indictment is a harsh remedy for a few

perhaps regrettable words, this court cannot in good conscience

rule to the contrary and hold that the phrase “accepted as so

until proved otherwise” is an acceptable way to describe the

burden of proof a grand juror must hold the State to. It

simply is not.

An indictment returned by a Grand Jury who was instructed on

an improper burden shifting can be nothing less than blatantly

wrong. Once the D.A.G. supplemented the Court’s standard of proof

with the underlined words above, that bell could not be unrung,

even with giving the D.A.G. the benefit of her words in the entire

context they were given.7 Even if only one juror was confused as

to the burden and who shall bear it, impacts the sanctity of our

Grand Jury system.

7 The State’s argument that the D.A.G.’s explanation that follows the

instruction “until proved otherwise” somehow vitiates the sting and clarifies

that instruction. This court finds that argument meritless as what follows

makes no reference to, or clarifies the statement “accepts as so until proved

otherwise.”

20

For the all the above stated reasons, the indictment is

dismissed.

B. Remaining Issues Serving as a Basis for the Motion to

Dismiss Are Moot.

As indicated above, the Court is granting defendants’

Motion to Dismiss the Indictment on the grounds noted above.

However, defendants did raise other grounds for dismissal of the

indictment. For completeness sake, the Court will address the

merits of those arguments.

The remaining grounds issues raised by defendants for

dismissal of the indictment include the following: (1) whether

the prosecutor usurped the role of the Grand Jury by soliciting

testimony regarding the ultimate issues for the Grand Jury

(hereinafter referred to as “Issue No. 1”); (2) evidence

presented to the Grand Jury by the State (hereinafter referred

to as “Issue No. 2”); (3) leading questions during the State’s

Grand Jury presentation (hereinafter referred to as “Issue No.

3”); (4) conflicts of interest among the Grand Jurors

(hereinafter referred to as “Issue No. 4”); and (5)

prosecution’s presentation of evidence as to each element of

Count 1 and Count 2 of the indictment (hereinafter referred to

as “Issue No. 5”).

21

Issue No. 1: Prosecutor Usurped the Role of the Grand Jury

by Soliciting Testimony Regarding the Ultimate

Issues for the Grand Jury

This court finds that the defense’s argument that the

prosecutor usurped the role on the Grand Jury by soliciting

testimony regarding the ultimate issues is meritless. The

application of the Health Care Claims Fraud Statute (N.J.S.A.

2C:21-4.3a) is predicated upon the "making, or causing to be

made, a false, fictitious, fraudulent, or misleading statement

of material fact in, or omitting a material fact from ... any

record, bill, claim or other document ... that a person attempts

to submit, submits ... for payment or reimbursement for health

care services." The elements of that charge include: (1) the

individual charged is a practitioner; (2) the practitioner

committed health care claims fraud; (3) the practitioner

committed the fraud in the course of providing professional

services; and (4) the practitioner acted knowingly. See, Model

Jury Charge Health Care Claims Fraud: Knowing Practitioner.

Specifically, with respect to the second element of this charge,

health care claims fraud is defined as, “…making or causing to

be made a false, fictitious, fraudulent or misleading statement

of material fact in a record, bill, claim or other document.”

See, Model Jury Charge Health Care Claims Fraud: Knowing

Practitioner. As explained further, “[t]he statement of fact or

omitted fact is material if it could have affected the decision

22

to pay or reimburse for the health care services.” Ibid. Here,

the testimony elicited went to the element regarding materiality

and not to the ultimate issues.

Thus, any questioning from the State as to that issue

related to an essential element of the crime alleged, and thus,

was proper as it was the duty and obligation of the D.A.G. in

presenting the State’s case to the Grand Jury. Hogan, 144 N.J.

at 236 (holding that “… the prosecutor's sole evidential

obligation is to present a prima facie case that the accused has

committed a crime,” when seeking an indictment).

Defense further argues that in response to the juror’s

question regarding conduct constituting health care fraud, the

State could have restated or read the health care fraud law

rather than questioning Det. Berg on the stand. However, the

defense fails to mention that the D.A.G. did explain the law

prior to Det. Berg taking the stand to clarify the facts, which

is memorialized in the transcript at T:136:21-25 – T:137:18.

The D.A.G.’s conduct in this regard did not infringe upon the

jury’s decision-making function, conduct that would warrant

dismissal, but instead, was consistent with the our R. 3:6-6(a)

“which permits the prosecutor not only to present before the

Grand Jury to question witnesses, but also during deliberations

to advise as to the law and its application to the facts in the

23

case.” See, State v. Schamberg, 146 N.J. 559, 563 (App.

Div.1977).

Issue No. 2: Evidence Presented to the Grand Jury by the

State

This court finds defendants’ argument that the State

presented contradictory evidence to the Grand Jury lacks merit.

Defense claims that the presentment of Dr. Hayek’s proffer

regarding the amount of kickbacks to the Grand Jury contradicted

later testimony by Dr. Hayek four months later in a civil

deposition.8 In the event that Dr. Hayek’s proffer is

inconsistent with this civil deposition testimony is fodder for

8 The allegedly inconsistent testimony offered by Dr. Hayek is as follows.

Det. Berg testified at the Grand Jury presentment that Dr. Hayek’s proffer

included: “Hayek advised Koppel pays him approximately $2,000 every three

months or probably $8,000 a year. The list of Hayek’s referrals is kept on

Koppel’s thumb drive.” Defs. Br., Ex. B at T:26:12-14.

In comparison, the statement provided by Dr. Hayek at the civil deposition is

as follows:

Q Did you testify that he gave you over 75,000, Dr. Koppel?

A A lot of that stuff – now that I’m thinking of it, it

wasn’t like this when we talked, when I testified and we

gave my plea agreement and all that, and they interrogated

me. They said they weren’t believing when I – my answers,

pushing, pushing. I was extremely stressed out. I don’t

even remember what I told them.

Q Well, you testified that it was over 75,000 that Dr. Koppel

gave you.

A Yeah. But he didn’t give me over 75,000. Yeah, did not

give me – well – so, 500 a month times 12 months is what,

$6,000?

[Defs. Br., “Ex. C” at T:193:8-21]

24

cross-examination at a later proceeding, including trial. Given

that the civil deposition occurred four months after the Grand

Jury presentation, this court cannot penalize the State for Dr.

Hayek changing his statement four months following the Grand

Jury presentation, if said statement is found to be

inconsistent, such inconsistency and Dr. Hayek’s credibility is

for the petit jury to evaluate. The State utilized the

information it had prior to and at the time of the Grand Jury

presentation.

Defense counsel next argues that the prosecution improperly

relied on the testimony of Det. Berg, and neglected to

corroborate Det. Berg’s testimony with direct evidence. This

court rejects this argument. When presenting to the Grand Jury,

the State has no obligation to present corroborating evidence.

The State has the responsibility to present a prima facie case

to the Grand Jury. Further, there is no obligation to present

direct evidence. Evidence may be direct, circumstantial or a

combination of both, along with all reasonable inferences that

can be drawn therefrom.

Defense counsel next argues that the State’s inquiry

regarding a proffer by Dr. Potacco was improper and insinuated

that Dr. Potacco “had dirt” on Dr. Koppel. This argument lacks

merit. The October 6, 2017, proffer provided by Dr. Potacco was

received and marked as Exhibit 19 in evidence, and prior to the

25

D.A.G.’s questioning of Det. Berg, he played the recording in

the presence of the Grand Jurors. Defs. Br., Ex. B at T:68:16 –

25, T:69:7. Contrary to the defense’s assertion, the Grand Jury

heard the actual recording of Dr. Potacco’s proffer, to which

Det. Berg testified. In any event, the defenses argument of the

word “dirt” comes down to semantics. Summarizing Dr. Potacco’s

statement with the word “dirt” does not necessarily equate to

false and misleading, especially when a recording of the actual

proffer was played, and this is simply a poor word choice.

Lastly, the defense counsel argues that the testimony

discussing checks paid to Jude Dimanche is likewise false and

misleading, as the State declared the memo lines on the checks

as illegible. Further, the defense counsel contends that they

have only received seven checks to Jude Dimanche, when Det. Berg

testified there were approximately 40 checks issued to Mr.

Dimanche, and there is nothing to establish the actual checks

were provided to the Grand Jury. Further, the defense argues

there is nothing to establish that the State provided an audio

recording of the proffer to the Grand Jurors. These arguments

regarding the testimony about the approximately 40 checks issued

to Jude Dimanche and their legibility is meritless, as the

D.A.G. questioned Det. Berg extensively regarding the checks

issued to Dimanche, the details of the check, his bank record,

26

and the amount of checks. Defs. Br., Ex. B at T:66:9-25 – 67:1-

21.

Issue No. 3: Leading Questions During State’s Grand Jury

Presentation

This court finds the defense’s argument lacks merit, as

leading questions are permissible during Grand Jury

presentation. It is well-settled that law that “[a]n indictment

may be based largely or wholly on hearsay and other evidence

which may not be legally competent or admissible at the plenary

trial.” State v. Holsten, 223 N.J. Super. 578, 585-86 (App. Div.

1988) (citing State v. Schmidt, 213 N.J. Super. 576, 584

(App.Div.1986), certif. granted 107 N.J. 635 (1987)). This

includes leading questions. See, Holsten, supra, 223 N.J.

Super, at 585-86. Given that this court dismissed the charges

herein, it is not necessary to decide whether the State provided

enough evidence to sustain the charges. See, ibid. (where the

Court held that although the Grand Jury presentation consisted

entirely of leading questions, the State provided enough

evidence to sustain the charges).

Issue No. 4: Conflicts of Interest among the Grand Jurors

This court finds that the D.A.G. did not violate any

procedures in administering instructions to the Grand Jury

27

regarding the Brooke Murphy inquiry. A Brooke Murphy inquiry is

questioning by the prosecutor to root out any bias or

impartiality among jurors based on relationships with witnesses,

victims, counsel or defendants.

In order to fully analyze this issue, a thorough review of

the transcript is necessary. Defense takes issue with the

D.A.G.’s instruction to the Grand Jurors that “it is unlikely

that they will have a conflict based on any of the insurance

companies involved, despite the fact that all the jurors have

had experience with some of the insurance companies,” citing to

T:9:4-13 of the transcript. Def. Br. at 18. T:9:4-13 reads as

follows:

The final note before I begin, I just want to

mention there are many insurance companies

listed on this sheet. There are a couple

different banks as well. The purpose of these

questions is to root out potential bias. A

vast majority of people in the State of New

Jersey have health or auto insurance with one

of the companies listed, and if merely having

insurance with one of these companies’ bars

you from sitting in this case, almost nobody

could be Grand Juror.

[Defs. Br., Ex. B at T:9:4-13]

In this statement, the D.A.G. simply explained that the

“vast majority” of individuals in New Jersey have policies with

one of the listed insurance companies, and “merely having

insurance” will not bar one from being selected as a Grand

Juror. Defs. Br., Ex. B at T:9:4-13. The D.A.G.’s statement

28

does not discuss the unlikelihood or likelihood of conflict with

the insurance companies arising, but explains to the Grand

Jurors that simply having a policy with one of the listed

companies does not equate to bias. This notion is further

expanded upon in the lines of the transcript, which immediately

follow T:9:4-13:

Merely having insurance with one of these

companies or a bank account with one of these

companies, doesn’t necessarily mean you have

a bias and cannot sit in this case. I will

ask you questions about your relationship with

those different persons and entities, and I’ll

ask whether you believe that relationship may

affect your ability to judge the evidence

fairly and impartially. If you do believe

that the relationship, however slight it may

be, may potentially affect your ability to be

a fair and impartial, let me know and we can

discuss that with the judge, and the judge

will ask you a few more questions to see if

you can sit in this case.

[Defs. Br., Ex. B at T:9:14-25 – T:10:1]

When viewing T:9:4-13, both individually and coupled with

the lines of the transcript following immediately after, it

shows that the D.A.G. intended to clarify the meaning of a bias

to the Grand Juror’s in the context of this case, and the

process of the Brooke Murphy inquiry.

Further, the D.A.G. cannot be said to have discouraged the

Grand Jurors from raising a conflict, as was the case in the

seminal case of State v. Murphy, 110 N.J. 20 (1988) where the

very procedure followed today evolved. In that case, a grand

29

juror alerted the D.A.G. and fellow Grand Jurors of her

employment with Allstate Insurance Company, one of the victims

in the case, but explained she would not be impartial

irrespective of this relationship. 110 N.J. at 24. In

response, the presenting Deputy Attorney General was directed by

his superior not to raise the aforementioned potential conflict

with the Assignment Judge. Id. Despite a strong disapproval of

the D.A.G.’s actions, the Court in Murphy held that the D.A.G.

did not willfully and deliberately violate established

procedures. However, the Murphy Court further held that,

“…violation of such procedures by a prosecuting attorney, in the

face of evidence of grand juror bias or partiality, will result

in dismissal of an indictment prior to trial,” applicable to all

matters following its decision. Murphy, 110 N.J. at 36.

Following the ruling of the Murphy case, the D.A.G. instructed

the Grand Jurors to notify him of any relationships they believe

to give rise to bias or impartiality, “however slight it may be”

and it would be brought to the attention of the Assignment Judge.

Issue No. 5: Prosecution’s Presentation of Evidence as to

Each Element of Count 1 and Count 2 of the

Indictment

This court finds that defendants’ argument that the State

failed to present evidence to establish the threshold amounts

for Counts 1 and 2 lack merit. Specifically, defendants claim

30

that during the Grand Jury presentation, the State did not meet

or exceed the $500,000 threshold required for a first degree

financial crime pursuant to N.J.S.A. 2C: 21-25a given that the

State only presented the Grand Jury with billings of two

patients with a total value of approximately $200,000 and failed

to elicit testimony from Det. Berg as to the specific dollar

amounts of each kickback. In order to sustain this claim,

defendants must also demonstrate that the State’s evidence to

support the charge against them is “clearly lacking.” State v.

McCrary, 97 N.J. 132, 142 (1984). Yet, the record establishes

that the State did meet its required burden as to the threshold

and did present “some evidence” that establishes the prima

facie elements of Count 1 and Count 2, and the evidence, coupled

with reasonable inferences, to lead a Grand Jury to conclude

both that a crime has been committed and the defendant committed

it; however, the evidence relied upon by the State need not be

enough to sustain a conviction. State v. Morrison, 188 N.J. 2

(2008). State v. New Jersey Trade Waste Ass’n., 96 N.J. 8, 27

(1984).

Here, the State supported Count 1 and Count 2 with “some

evidence” to show the requisite $500,000 threshold. During the

Grand Jury presentation, Det. Berg testified that over $500,000

was paid to Dr. Koppel after a review of documents and checks in

connection with the kickback scheme. Defs. Br., Ex. B at

31

T:80:2-9. Further, the State presented the Grand Jurors with a

Kickback Chart, marked as Exhibit 1 in evidence, which detailed

amounts paid out from the various insurers, and a NJM TIN run,

marked as Exhibit 10 in evidence, which outlined the patients

and corresponding procedures defendant billed to NJM. In

addition, the State elicited testimony from Det. Berg confirming

it was “more than a half million dollars in procedures” and “it

was over $500,000 paid to” Dr. Koppel. Defs. Br., Ex. B at

T:52:4-8, T:80:6-9.

II. State’s Motion to Preclude Defendants’ Counsel from for the

Joint Representation of Both Defendants

Given the relief sought by the parties in the underlying

application, and the relief granted by way of dismissal of the

indictment, for this motion only, this court finds there is no

conflict of interest between the co-defendants.9 On this motion,

each Defendant had a similar interest, that is, to have the

indictment dismissed against them, on the same grounds.

Under RPC 1.710, if an attorney seeks to represent two

clients with concurrent conflicts of interest, he may do so if

9 In the event this case is again presented to the Grand Jury following the

decision of this motion, and defendants are indicted as a result of that

presentation by the State, the issue of the joint representation of the co-

defendants should be readdressed if this matter proceeds to trial, motion

practice, or pre-trial resolution. 10 RPC 1.7 (a) provides that a concurrent conflict of interest exists if: (1)

the representation of one client will be directly adverse to another client;

or (2) there is a significant risk that the representation of one or more

clients will be materially limited by the lawyer's responsibilities to

32

each affected client can give informed consent, confirmed in

writing, after full disclosure and consultation. In the case

where one of the two co-defendants is a Professional

Association, and if the organization's consent to the dual

representation is required by RPC 1.7, the consent shall be

given by an appropriate official of the organization other than

the individual who is to be represented or by the shareholders.

See, RPC 1.13. In addition, that R. 3:8-2 requires consent of

co-defendants for dual representation by the same counsel in a

criminal case.

In other words, Mr. Zegas would need both the consent of

Dr. Koppel, individually on his behalf, and Garden State

Management from someone other than Dr. Koppel, on its behalf.

Dr. Koppel is the sole officer and operator of Garden State Pain

Management, P.A. Defs. Br., Ex. B at T:17:1-10.

The issue here is a novel one, and as of this writing, this

court has not found any applicable case law that would provide

guidance to it as to how to ascertain the consent of a closely-

held corporation where the sole shareholder is the co-defendant.

While that act of consent is virtually impossible to obtain, and

is, on its face, contrary to the rules cited above, this court

finds guidance in our Constitution in that each defendant in a

another client, a former client, or a third person or by a personal interest

of the lawyer.

33

criminal case has the right to, not only counsel, but counsel of

his own choosing.

The Sixth Amendment to the United States Constitution and

Art. I, par. 10 of the New Jersey Constitution afford criminal

defendants the right to the assistance of counsel. When an

attorney serves the conflicting interests of two co-defendants,

it would greatly impair a crucial constitutional right of not

one, but multiple individuals being represented by a sole

attorney. See, State v. Bellucci, 81 N.J. 531, 537 (1980). “A

defense attorney's representation must be "untrammeled and

unimpaired," his loyalty undivided.” Id.

“Underlying the principle that an attorney should represent

only one client is the assumption that a conflict exists or may

exist between co-defendants… However, there may be circumstances

where no conflict exists.” See, State v. Land, 73 N.J. 24,

29-30 (1977) (where the Court found a conflict of interest

between the spouses where the co-defendant wife took the stand

in a drug possession case and ultimately inculpated her

husband).

Here, at least on this motion to dismiss the indictment,

there does not appear to be any inherent conflicts of interest,

or a divided loyalty for one client over another by defense

counsel. To the contrary, here defense counsel’s representation

on this motion of both defendants is not impaired by such

34

representation; nor is his loyalty divided, as the relief sought

for both involved identical issues and grounds.

Accordingly, this court will not limit defendant’s

constitutional right to choose his own counsel, simply because

of the way he chose to structure his business.

III. All Remaining Motions are Moot

With respect to all other relief sought in the motion,

i.e., a Bill of Particulars, a 404(b) hearing, and a Driver

hearing, those motions are now moot and have no bearing on the

dismissal of the indictment.

CONCLUSION

For the above stated reasons, defendants’ Motion to Dismiss

the Indictment is GRANTED, without prejudice, and the State’s

motion to preclude defense counsel from representing both

defendants is DENIED for this motion only.

As for the remaining issues set forth as a basis for the

Motion to Dismiss the Indictment (Issues No. 1 through 5), the

Motion for a Bill of Particulars, the Motion for a Driver

Hearing and the Motion to Admit 404(b) Evidence, the

35

aforementioned are considered moot and have no bearing on the

dismissal of the indictment.