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09/14/77 COMMONWEALTH v. WILLIAM J. CERVENY &

September 14, 1977

COMMONWEALTH
v.
WILLIAM J. CERVENY & OTHERS *FN1



Hampden. Sixteen indictments found and returned in the Superior Court on November 12, 1974, and February 7, 1975. The cases were tried before Tisdale, J. After review was sought in the Appeals Court, the Supreme Judicial Court, on its own initiative, ordered direct appellate review.

Hennessey, C.j., Quirico, Braucher, Kaplan, & Liacos, JJ.

SYLLABUS BY THE COURT

Perjury. False Pretenses. Larceny. Practice, Criminal, Directed verdict, Duplicitous convictions, Mistrial. Jury and Jurors. Regulation. Administrative Agency. Words, "Required by law."

The opinion of the court was delivered by: Kaplan

At the trial of an indictment for perjury under G. L. c. 268, § 1A, against an individual, and of indictments against four corporations providing health services for falsifying information filed with the Rate Setting Commission, in violation of G. L. c. 7, § 30N, as appearing in St. 1968, c. 492, § 3, there was no error in the denial of motions for directed verdicts where there was evidence that through a holding company the individual defendant owned and controlled the four corporations, that he signed annual reports of their operation under penalties of perjury on forms required by the commission's regulations incorporating a form setting out the declaration to be subscribed, and that he manipulated checking accounts so that the annual reports of the corporations showed sums as equity capital, an element on which the per diem rate payable to them for care to "Medicaid" patients was based, which properly should have been shown as "intercompany" accounts not comprising equity capital; there was no merit in claims that the check manipulation was harmless, that the falsehood was not "material," or that no "law" required the declarations in the reports to be made under the penalties of perjury. [351-354]

Upon a sentence for perjury under G. L. c. 268, § 1A, based on the defendant's making false statements for financial gain, and upon his sentence for attempted larceny by false pretenses under c. 274, § 6, based on the same false statements, the attempted larceny sentence to be served "from and after" the perjury sentence, this court decided that in the unusual situation presented the lesser sentence for attempted larceny must be struck, and judgment of conviction thereon reversed and the verdict set aside. [354-356]

Exceptions, taken at the empanelment of a jury, to the denial of motions that probation reports of prospective jurors in the hands of the prosecution be made available to the defendants were without merit where the probation office made the reports available the next day. [356-357]

There was no error at a lengthy trial of indictments involving voluminous records of the defendant corporations in the denial of motions for mistrial based on references to an independent investigation about possible "fraud" by the corporations where the Judge adequately cured any possible prejudice. [357-358]

There was no error in the denial of motions by the Commonwealth and the defendants for mistrial with respect to indictments against nursing home corporations and the individual owning and controlling them, based on the fact that a patient in one of the defendant corporations was the mother of the chief court officer and the grandmother of a subordinate officer in charge of the jury pool, where this court could not declare to be plainly wrong the trial Judge's opinion that there was no likelihood that the officers had conveyed anything to a juror which might influence his vote. [358-359]

A Hampden County jury found the defendant William J. Cerveny guilty on five indictments charging perjury by written instrument, *fn2 and on four indictments charging attempted larceny by false pretense. *fn3 They found Valley View Nursing Home, Inc., guilty on three indictments charging that, as a health provider, it falsified information required to be filed with the Rate Setting Commission; *fn4 West Springfield Nursing Home, Inc., guilty on two indictments with similar charges; and Ridgeview Nursing Home, Inc., and Eldercare Nursing Home, Inc., each guilty on one indictment. Cerveny was sentenced to concurrent terms on the perjury convictions, and concurrent terms, to be served "from and after," on the convictions of attempted larceny. *fn5 The corporate co-defendants received fines on their several convictions. The defendants named have appealed pursuant to G. L. c. 278, §§ 33A-33G.

The charges and convictions sprang from the submission to the Rate Setting Commission of certain annual reports of the operations of the corporations -- three nursing homes and one rest home -- signed by Cerveny under penalties of perjury, and alleged to contain material falsehoods. The reports, on "Form RSC-1," were for Valley View and West Springfield for the year 1971; for Valley View for 1972; and for all four corporations for 1973. These reports were intended for use by the commission in fixing the per diem rates at which the corporations would be compensated by the Department of Public Welfare for the care they provided to patients publicly assisted under "Medicaid."

Although the trial was protracted, it is possible to state the main facts and pose the chief legal questions quite briefly.

Through holding company ownership, Cerveny owned and controlled the four defendant corporations, all doing business in the Springfield-Westfield area. Cerveny dominated the affairs of the entities as the principal operating officer of each.

The RSC-1 report form, usually filed in March, reflected the operations of the home for the preceding calendar year; included was a balance sheet as at December 31. Detailed regulations of the Rate Setting Commission, which referred to and incorporated the form, defined the ...


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