Full opinion text
MEMORANDUM AND ORDER LUNGSTRUM, District Judge. This matter is presently before the court on motions for acquittal, new trial, arrest of judgment, and dismissal (Docs.423, 425, 426, 427, 428, 432) filed by the four defendants who were convicted of various Medicare fraud offenses by a jury following a nine week trial. Aso before the court is the defendants’ motion to compel production of the lengthy and detailed sentencing memo (Doc. 420) which the government provided ex parte to the District of Kansas probation officers involved in preparing the Pre-Sentence Investigation report in this case. The court has devoted countless hours to consideration of the arguments put forth in the parties’ papers. It has carefully considered the factual and legal points addressed and has conducted its own thorough legal research. The questions presented are often difficult to resolve and some are exceedingly close calls. While most of the issues have been raised, litigated and decided by the court previously before and during trial, other matters are ripe for indepth consideration virtually for the first time at this stage of the case. In any event, the court is now prepared to rule. For the reasons set forth below, the court grants Mr. McClatchey’s motion for acquittal and, in the alternative, for a new trial. The court also grants Ronald La-Hue’s motion for acquittal as to count eight. The remainder of the motions for acquittal, new trial, arrest of judgment, and dismissal, are denied. The defendants’ motion for production of the government’s sentencing memorandum is granted. TABLE OF CONTENTS I. Background.1052 A. Procedural History and Parties .1052 B. BVMG’s Relationship with Baptist.1053 C. Laboratory and Other Relationships Between Baptist and BVMG.1059 D. BVMG’s Relationship with Other Hospitals.1060 1. St. Joseph Medical Center.1060 2. Deaconess Hospital.1060 3. Bethany Medical Center .1061 4. Alexian Brothers Hospital .1061 5. Liberty Hospital.1061 II. Motions for Acquittal.1061 A. Standard.1061 B. Robert and Ronald LaHue.. 1062 C. Dan Anderson.1064 D. Dennis McClatchey.1065 E. Unlawful Inducement.1068 III. Motions for New Trial.1069 A. Standard.1069 B. Variance.1070 C. Severance.1073 D. Jury Instructions .1074 1. Instruction Nos.32 and 33 . 1074 2. Instruction No. 30 . 1076 3. Instruction Nos. 36 and 37 . 1076 4. Instruction Nos. 7 and 21.1077 5. Instruction No. 24 . 1077 E. Coconspirator Hearsay.1079 F. Prosecutorial Misconduct.... 1079 1. Preindictment Delay .... 1080 2. Judicial Immunity.1081 3. Other Alleged Misconduct .1081 IV. Arrest of Judgment.1082 V. Production of Sentencing Memo.. 1082 I. Background A. Procedural History and Parties On July 15, 1998, a grand jury returned a twelve-count superseding indictment charging seven defendants with conspiracy pursuant to 18 U.S.C. § 871 (count one). The indictment also charged each defendant with one or more substantive violations of the Medicare Anti-Kickback Act pursuant to 42 U.S.C. § 1320a-7b(b) (counts two through ten). Two defendants were charged with false claims conspiracy pursuant to 18 U.S.C. § 286 (count eleven), and one defendant was charged with witness tampering pursuant to 18 U.S.C. § 1512 (count twelve). Throughout this case, the court and the parties have placed the defendants into three distinct groups. One group, which the parties and the court have referred to generally as the doctor defendants, consists of two brothers, Drs. Robert and Ronald LaHue. The Drs. LaHue are osteopathic physicians, and were the longtime principals of a now-defunct organization called Blue Valley Medical Group (“BVMG”). BVMG was wholly owned by Robert LaHue, and Ronald LaHue was at all times a key employee. A second group, which the parties and the court have referred to generally as the hospital executive defendants, consists of Dan Anderson, Dennis McClatchey, and Ronald Keel. All of the hospital executive defendants worked for Baptist Medical Center (“Baptist”), a Kansas City, Missouri hospital. Dan Anderson was the President and Chief Executive Officer of Baptist, Dennis McClatchey was Senior Vice President and Chief Operating Officer, and Ronald Keel was a Vice President whose responsibilities included monitoring the relationship between Baptist and BVMG. A third group, which the parties and the court have referred to generally as the lawyer defendants, consists of attorneys Ruth Lehr and Mark Thompson. Both attorneys represented Baptist at various times during the course of the alleged conspiracy- In count one, the indictment alleged a conspiracy among all seven defendants to offer, pay, solicit, and receive remuneration in return for Medicare patient referrals at seven different hospitals in the Kansas City, Wichita, and St. Louis areas. The count one conspiracy allegedly involved all of the substantive conduct alleged in counts two through ten. Count two alleged substantive violations of the Medicare Anti-Kickback Act against the doctor defendants in connection with BVMG’s relationship with Baptist. Count three alleged substantive violations of the Medicare Anti-Kickback Act against the hospital executive defendants and attorney Ruth Lehr in connection with Baptist’s relationship with BVMG. Count four alleged similar conduct against attorney Mark Thompson. Counts five through ten alleged substantive violations of the Medicare Anti-Kickback Act against the Drs. LaHue in connection with St. Joseph Medical Center in Wichita, Deaconess Hospital in St. Louis, Bethany Medical Center in Kansas City, Kansas, Alexian Brothers Hospital in St. Louis, Liberty Hospital in Liberty, Missouri, and Olathe Medical Center in Olathe, Kansas, respectively. Count eleven alleged a false claims conspiracy against the Drs. LaHue in connection with their practices at BVMG. Count twelve alleged witness tampering against Robert LaHue. Over the course of the nine week jury trial, portions of the indictment were pared away. Specifically, the court severed counts eleven and twelve, holding the counts improperly joined pursuant to Fed. R.Crim.P. 8(b). The court granted the doctor defendants’ motion for acquittal as to count 10, involving Olathe Medical Center, on statute of limitations grounds. The court granted the lawyer defendants’ motion for acquittal on all counts, holding the evidence to be such that no reasonable jury could conclude that the lawyer defendants had the criminal intent necessary to commit the crimes alleged. The court also held that as to the count one conspiracy charge, the evidence was such that no reasonable jury could conclude that the hospital executives and lawyers had any involvement with a conspiracy at hospitals other than Baptist. In the end, the case was submitted to the jury only on the Baptist conspiracy charged in count one, the substantive violations involving Baptist alleged in count two against the doctors and count three against the hospital executives, and the substantive violations against the doctors alleged in counts five through nine. The jury convicted four of the five remaining defendants, finding specifically that the four were involved in a conspiracy at Baptist and that they committed the substantive anti-kickback violations with respect to Baptist alleged in counts two (Robert and Ronald LaHue) and three (Dan Anderson and Dennis McClatehey). The jury acquitted the fifth defendant, Ronald Keel, on all charges based on his statute of limitations defense. The jury convicted both LaHues on counts seven through nine, involving Bethany Medical Center, Alexian Brothers Hospital, and Liberty Hospital. The jury convicted Robert LaHue and acquitted Ronald La-Hue on counts five and six, involving St. Joseph Medical Center and Deaconess Hospital. Put another way, Dan Anderson and Dennis McClatehey, then, were convicted of counts one and. three. Robert LaHue was convicted of counts one, two, and five through pine. Ronald LaHue was convicted of counts one, two, and seven through nine. B. BVMG’s Relationship with Baptist In the early 1980s, Drs. Robert and Ronald LaHue were associated with University Hospital, the teaching hospital formerly affiliated with the osteopathic school in Kansas City, Missouri. The LaHues had attended the school, and over time began sending patients to and treating patients in University Hospital. Both doctors were part-time faculty members. The LaHues did not deliver their health care services in a traditional manner. Instead of operating out of a clinic, for exam-pie, the' LaHues built their practice by treating patients -in nursing homes. BVMG was the trade name under which the doctors practiced. By 1984, BVMG had a “census,” or patient population, of approximately '2,500 nursing home patients in the Kansas City metropolitan area. The uncontroverted evidence at trial was that BVMG’s large patient base was in substanital part due to the LaHues’ willingness to go to nursing homes to treat patients — serving a market that other doctors considered undesirable. Typically, the only care available to most nursing home patients from physicians involved costly ambulance rides to a hospital emergency room for acute care. Chronic ailments were often not addressed. _ In approximately the Fall of 1984, the LaHues sought a teaching salary increase from University Hospital. The LaHues told University that if the hospital wasn’t interested in increasing the salary, “they [the LaHues] would be no longer putting patients in our institution. They’d be moving them to Baptist.” Tr. at 39. Ronald LaHue told University Hospital that the LaHues didn’t want to be disloyal to the school, but “business is business.” Tr. at 41. Robert LaHue told University Hospital that Baptist had offered to pay the LaHues $120,000 to $140,000 to move their patients. University Hospital refused to pay. The LaHues’ conversations with University Hospital occurred contemporaneously with discussions among Ronald Keel and others at Baptist about the possibility of entering an arrangement with the LaHues that was similar to the arrangement at University Hospital. Mr. Keel, who was a neighbor of Ronald LaHue, presented the idea initially to Mr. Anderson and later to the rest of the administrative staff, including Dennis McClatchey, to pay the doctors to affiliate with Baptist. Baptist considered various alternatives, including an outright purchase of BVMG. In the context of a preliminary proposal to purchase the medical laboratory operated by BVMG, Clem Fairchild, a well respected corporate attorney who was inexperienced in the complexities of healthcare law, drafted a proposed agreement that specifically linked the purchase of the laboratory with patient referrals. Mr. Fairchild forwarded the proposal to Baptist CFO Gerald Probst, and copied Mr. Anderson. Ruth Lehr vetoed the idea as a blatant violation of Medicare Fraud and Abuse law. Rejecting the idea of a purchase for the time being, Baptist ultimately decided to enter an arrangement making the LaHues “Co-Directors of Gerontology” and paying them $75,000 per year each. When the LaHues began receiving their $75,000 annual payments from Baptist, BVMG referrals to University Hospital dropped dramatically and BVMG began referring large numbers of patients to Baptist. Although the formal contractual relationship between Baptist and the LaHues changed periodically over the next ten years in terms of the services the LaHues were scheduled to perform, the $75,000 annual payments continued unabated until approximately July 1994. Mr. Anderson directed the $75,000 payments, but although there is overwhelming evidence indicating Mr. McClatchey knew about the payments, there is no evidence he acted affirmatively to bring them about. It is important to point out, too, that there was no evidence at trial that the referred patients received substandard care at Baptist. To the contrary, Baptist came to be widely recognized as a premier provider of gerontology services. There was also no evidence at trial that the referral relationship affected patient choice. To the contrary, where patients or their families expressed a hospital preference, BVMG worked to honor the request. There was, moreover, no evidence at trial that any patient received unnecessary services. To the contrary, witness after witness testified that the BVMG/Baptist patient referral system had appropriate checks and balances to guard against such abuses. In the mid 1980s, about the time Baptist’s relationship with BVMG began, the Medicare system changed the way it reimbursed hospitals for inpatient services. Previously, Medicare reimbursed hospitals for the actual cost of providing medical services. In an effort to curtail rising costs, however, Medicare implemented a system of payment based on Diagnostic Related Groups, or DRGs. Under the DRG system, Medicare reimbursed hospitals for particular diagnoses, irrespective of how much the hospital spent to care for the patient. The DRG system, plus competition in the Kansas City health care market, created a need for Baptist to fill its inpatient beds. Defendant Anderson was concerned about filling the beds by keeping admissions up. Admissions from BVMG helped Baptist fill its market-based need. On January 9, 1985, Mr. McClatchey reported to the hospital’s department directors that BVMG had named Baptist as its “hospital of choice.” He reported that BVMG represented approximately 8,500 nursing home beds, and explained the hospital’s plans for how to deal with the influx of elderly patients. At a hospital Board of Trustees meeting on March 21, 1985, Mr. Anderson, after reporting on the hospital’s decision not to purchase any part of BVMG, reported the LaHue management services arrangement and reported to the hospital Board of Trustees that “[d]uring the first two and one-half months of operation the Blue Valley Medical Group has admitted 145 patients to the hospital, and outpatient business is steadily growing.” At some point in the summer of 1985, the LaHues approached Mr. Anderson seeking help in managing their practice. The LaHues suggested that Baptist employee Tom Eckard, essentially a marketing specialist with whom the' LaHues were familiar, be assigned to help them organize their practice. Mr. Anderson agreed, and Mr. Eckard became “Director of Geriatric Services.” Mr. Eckard described his job as “liaison function between Baptist Medical Center and Blue Valley Medical Group.” Tr. at 4346. Based on his discussions with Mr. Anderson, Mr. McClatchey, and Mr. Keel, Mr. Eckard understood his primary job duty was to “maintain the relationship with Blue Valley Medical Group on behalf of Baptist Medical Center in order to assure that the flow of patients to the hospital would continue.” Tr. at 4346. Mr. Eckard, of course, also assisted BVMG with organizational matters, which was not a strength of the LaHues. Ms. Lehr originally drafted an agreement whereby BVMG would pay Baptist for Mr. Eckard’s services, but the LaHues balked, and no payments were made. In effect, although Baptist derived considerable benefit from Mr. Eckard’s placement with BVMG because Mr. Eckard helped streamline the patient flow, Baptist was loaning BVMG an employee for free. The Eckard arrangement continued from mid-1985 until 1993. There were problems with the Gerontology Directorship arrangement, so Mr. Keel asked Ms. Lehr to evaluate the possibility of entering a consulting arrangement with the LaHues. Ms. Lehr advised against such an arrangement because it involved potential Medicare Fraud and Abuse concerns. She advised Mr. Keel, with copies to Mr. Anderson and Mr. McClatchey, that a consulting arrangement was acceptable only if “the Drs. LaHue ... perform valid services for [Baptist], regardless of the label used to describe those services, and the compensation must be reasonable.” Mr. Keel and Ms. Lehr explored “other types of compensation arrangements,” including an option to purchase and a structured buy-out. Baptist decided to pursue entering into a consulting relationship with the LaHues. On January 7, 1986, Mr. Keel recommended modifying the Gerontology Directorship agreement to reflect accurately the services the LaHues were providing to Baptist. He also recommended reducing the annual payments to the LaHues from $75,000 each to $50,000 each, apparently because the Adult Health Care system at Baptist was now up and running and the hospital no longer needed the same level of service from the LaHues. Mr. Anderson okayed the recommendation for accurately specifying the LaHues’ services, but wanted to “discuss” Mr. Keel’s recommendation to reduce the fees. The fees were never reduced. Mr. MeClatchey was copied on Mr. Keel’s written recommendations, but there is no evidence he took part in or knew about the subsequent fee discussion or why the fees were not reduced. Mr. Keel consulted with Mr. Eckard to identify services the LaHues could perform pursuant to the consulting contract. Ms. Lehr drafted the resulting agreement. Mr. MeClatchey was copied on letters explaining the modifications to the contract, and he was “aware and involved in contract development.” Govt. Ex. 68. Mr. Anderson and both Drs. LaHue signed the revised contract, which called for the La-Hues to perform specified consulting services both within the hospital and outside the hospital, in nursing homes. - The Drs. LaHue actually performed only minimal services under the contract. In March of 1987, Deb Grimes, a Baptist employee involved with the gerontology program, informed Mr. MeClatchey that the LaHues were not performing the functions set forth in the consulting agreement, except for attending the quarterly Adult Health Care staff meetings. Ms. Grimes met with Mr. MeClatchey, who said he would “take care of it.” Tr. at 7831. Mr. MeClatchey directed hospital staff to “round” with the LaHues as specified in the contract, and those rounds immediately began. The, evidence was undisputed, in any event, that Mr. MeClatchey did not have day-to-day responsibility to monitor contract compliance. Mr. Eckard testified that Mr. MeClatchey, when notified about contract compliance problems, made efforts to ensure compliance, but that the compliance within the hospital eventually tapered off because of resistance among hospital staff. The hospital front-line staff apparently had little interest in interacting with the LaHues. Also in 1987, some executives at Baptist began to realize that Mr. Eckard’s allegiances were not entirely with Baptist and that the arrangement might have private inurement ramifications under federal tax law. In light of these concerns, Mr. MeClatchey and Mr. Probst recommended to Mr. Anderson that Mr. Eckard be terminated. Mr. Anderson declined. Mr. Anderson “had an understanding that the physicians weren’t in a position to employ Mr. Eckard, ‘cause of financial reasons or concerns’, and had a concern relative to that recommendation and proceeding with it in that it would disrupt or create a problem with the relationship between the Medical Center and [BVMG] or, specifically, the physicians.” Tr. at 1208 (Probst). By early 1991, Baptist was involved in merger discussions with other hospitals in the Kansas City area. These discussions eventually resulted in a merger whereby Baptist became a subsidiary of a corporation called Health Midwest. In connection with the merger, attorney Mark Thompson reviewed Baptist’s physician contracts, and identified the BVMG relationship as a problem area. After speaking about the relationship with Ms. Lehr, Mr. Thompson reported in a January 30, 1991 due diligence memo that “the history of the negotiation over this contract causes [Ms. Lehr] to wonder if the services called for are in fact being rendered.... [I]t may be a good idea to discuss with Baptist management whether the services called for in the contract are in fact being rendered and whether this is backed up by evidence in Baptist’s files.” Govt. Ex. 129. He also reported Ms. Lehr’s feeling that “if these services are in fact being rendered as provided in the contract, then the $75,000 fee paid to each of them is fair compensation.” Id. In the summer of 1991, Mr. Keel proposed a change in the 1986 contract. The hospital had learned that Mr. Eckard was involved in helping the LaHues market their “system” to other hospitals in Kansas City and to hospitals in Wichita and St. Louis. In response, Mr. Keel suggested that Mr. Eckard no longer be employed by Baptist, that the contract be modified to explicitly direct patients to hospitals within specified postal zip codes, and that the hospital increase the amount of fees paid to the LaHues by $70,000, which was the approximate amount of Mr. Eckard’s salary at the time. Mr. Keel directed his suggestions to Mr. McClatchey, who forwarded them to the hospital’s lawyers. The hospital did not adopt the recommendations. In August of 1991, Mr. Thompson informed Mr. Keel, with copies to Mr. McClatchey and Mr. Anderson, that the 1986 agreement did not meet the Anti-Kickback Act safe harbor regulations. Mr. Thompson recommended making good faith efforts to bring the contract into compliance with the safe harbor regulations, which would have required a clause specifying intervals of service and the rate to be charged per interval and more extensive documentation that the services specified were actually being performed. Mr. Thompson also indicated, however, that the services which were specified in the existing contract to be rendered by the LaHues “appear to be substantial.” The parties set out to draft a new contract, and negotiations went back and forth. Mr. Keel left Baptist in late 1991, and responsibility for contract negotiation fell into the lap of Baptist Vice President Kevin McGrath, who reported directly to Mr. McClatchey. Robert LaHue told Mr. McGrath that the doctors “were having difficulties in performing some of the services that were delineated in the contract.” Tr. at 2753. Mr. McGrath shared that information with Mr. Anderson and Mr. McClatchey. Mr. McClatchey was surprised to learn the information, and directed Mr. McGrath to check out the problem and report back. The parties, including Mr. McClatchey, Mr. McGrath, Mr. Thompson, the Drs. La-Hue, and Mr. Eckard, went through numerous contract drafts and revisions, all drafted and reviewed by Mr. Thompson. In one draft agreement, Mr. McClatchey highlighted an area he believed ought not to be part of the agreement because he was concerned the services would not occur. On November 4, 1992, Mr. Eckard forwarded Mr. McGrath a list of job duties from Robert LaHue. Mr. McGrath forwarded the list to Mr. McClatchey, calling it “not very complete.” On November 5,1992, the FBI appeared at Baptist to interview Mr. McClatchey and Mr. Anderson concerning the hospi-tabs relationship with BVMG, specifically seeking information about the consulting fees and the Eckard arrangement. Immediately following the FBI visit, Baptist employed attorneys from Baltimore specializing in civil and criminal health care fraud cases. See United States v. Anderson, 55 F.Supp.2d 1163 (D.Kan.1999) (government violated the Baltimore attorneys’ due process rights by publicly labeling them as unindicted coconspirators in pretrial documents). In a November 11, 1992 meeting, the Baltimore attorneys recommended documenting actual performance of consulting duties. Such a move, according to Baltimore counsel, would move the contract issue “out of the criminal arena and into the civil side.” Govt. Ex. 182A. The parties at the meeting agreed to change the consulting relationship to a new part-time employment contract which more accurately described the services that were actually being performed. The Baltimore attorneys were even more pointed with respect to the Eckard arrangement. The group decided that, “as quickly as possible, we need to get [Mr. Eckard] off the Baptist payroll and onto the payroll at Blue Valley Medical Group.” Id. Health Midwest attorney Gina Kaiser testified that it was Mr. McClatchey’s responsibility to fix the Eckard arrangement. The LaHues initially were unresponsive to the hospital’s demands, but agreed to come to the table to discuss modifying the arrangement after the hospital gave them an ultimatum date. When BVMG finally came to the table, there were a series of meetings among.Robert LaHue, Mr. McClatchey, and Mr. Thompson. It became clear that BVMG had no intention of putting Mr. Eckard on its payroll, so Mr. McClatchey decided to bring Mr. Eckard back to Baptist effective March 1,1993. At least initially, Mr. McClatchey seemed reluctant to cut all ties between Mr. Eckard and BVMG. In early February 1993, as the parties were hammering out the specifics of Mr. Eckard’s return, he asked Mr. Thompson whether it would be appropriate to send Mr. Eckard on site at BVMG from time to time. Also in this prereturn-to-Baptist time frame, Mr. McClatchey asked Mr. Eckard to “list what my being pulled out of Blue Valley Medical Group would mean in terms of lost service or things that the practice — Dr. Bob LaHue was getting from me that he would no longer be getting.” Tr. at 4517. Mr. Eckard testified that Mr. McClatchey was “concerned about the negative impact my removal from the Blue Valley practice would have on the relationship with Blue Valley Medical Group.” Tr. at 4518. On an early February draft of Mr. Eck-ard’s new written job description, Mr. Eckard reassured Mr. McClatchey that “Bob LaHue sees [the proposed new relationship] as ‘no real change.’ ” Govt. Ex. 204. The job requirements included Mr. Eckard marketing Baptist services to nursing homes who, he reported, saw him as “BVMG’s Administrator.” Id. Mr. Eckard testified that the proposed job description differed from what he was doing previously in that “[i]t was more Baptist oriented and less specifically Blue Valley Medical Group oriented.” Tr. at 4519. Nonetheless, it did involve some duties related to BVMG. At least according to Mr. Eckard, his purpose after the change remained “[t]o maintain the relationship between the Blue Valley Medical Group and the hospital in order to assure the continued flow of patients.” Mr. Eckard did not, however, go so far as to say that Mr. McClatchey or anyone else so instructed him or was aware that he saw his job in that light. In this vein, it is important to note that there was overwhelming evidence at trial indicating that Mr. Eckard, unbeknownst to the hospital administrators, engaged in self-dealing efforts which had the effect of promoting BVMG’s interests over Baptist’s. He surreptitiously negotiated with Robert LaHue to obtain 10 percent commissions on all new consulting fee business (i.e. with non-Baptist hospitals), and also negotiated a car allowance with BVMG despite Mr. Keel’s explicit instruction that he not do so. Even after Mr. Eckard returned to Baptist, there was evidence that he took steps to conceal his BVMG-related activities from the Baptist administrators. He continued corresponding with other hospitals on behalf of BVMG without informing anyone at Baptist. The February 12, 1993 final draft of Mr. Eckard’s new job description differed from the early February proposal in that it omitted any reference to any work with BVMG, and instead involved marketing efforts with “area Long Term Care Physicians.” Govt. Ex. 205. The duties under that portion of the job description, however, were markedly similar to the duties in the previous draft that explicitly related to BVMG. Mr. Thompson reported to Baltimore counsel that he and Mr. McClatchey planned to emphasize to Robert LaHue in a February 15 meeting “that the new job description replaces the old one and that nothing in the new description implies any services to the LaHues in their practice.” Id. True to Mr. Thompson’s word, Mr. McClatchey suggested a laudable alternative solution at the February 15 meeting. Despite his earlier inquiries of Mr. Thompson and Mr. Eckard concerning how to let Mr. Eckard continue to be a free benefit to BVMG, Mr. McClatchey proposed a new alternative — having BVMG pay Baptist for Mr. Eckard’s services. Dr. LaHue apparently declined. Also during these meetings, Dr. LaHue asked Baptist to purchase BVMG, increase BVMG’s annual take, or base the fees paid on a per patient basis. Baptist refused. Mr. Eckard returned to full-time hospital duties as of March 1, 1993. Mr. Anderson and the LaHues finally executed a new agreement, titled a “Medical Group Services Agreement,” on April 1, 1993. The agreement contained at least some of the services that had been identified as areas of nonperformance in the past. Mr. Eckard left Baptist in September 1993 to pursue his own start-up business which he intended to compete with BVMG. Mr. McClatchey left Baptist in October 1993 to begin an unrelated employment position with Health Midwest. On November 26, 1993, Robert LaHue wrote a letter of termination to Mr. Anderson. Pursuant to the terms of the agreement and the letter, the agreement was to terminate as of February 28, 1994 because of a proposed sale of BVMG to Vencor, an entity unrelated either to Baptist or BVMG. After receiving the letter, Mr. Anderson worked to develop a strategy to replace the BVMG patients, but did nothing to replace the LaHues’ consulting services. Baptist began quiet efforts to compete with BVMG for control of nursing home beds. The Vencor sale fell through. The parties entered another agreement dated March 1, 1994 that listed the same, but fewer, contractual duties for the LaHues to perform. This agreement was to last only for three months. Later in March, Ronald LaHue met with Mr. McGrath to discuss Baptist’s efforts to compete with BVMG for nursing home patients, which the LaHues apparently had begun to perceive. Dr. LaHue told Mr. McGrath that BVMG “feels they have value in the 2,000 nursing home beds they control. They wish to work out any arrangement with Health Midwest that pays them for this value.” Govt. Ex. 232. Later, on March 18, 1994, Dr. LaHue proposed a “sale” of approximately 2,300 nursing home beds in the Kansas City area for $2,500,000 and future employment. Baptist refused. Discussions to save the relationship continued until January 1995, when the relationship finally ended. C. Laboratory and Other Relationships Between Baptist and BVMG Effective June 1, 1986, BVMG and Baptist formalized a laboratory services agreement. Under the agreement, BVMG collected specimens, and Baptist performed necessary lab testing. BVMG billed Medicare, and split the net revenues with Baptist on a fifty-fifty basis. The agreement was renewed in 1988, but the allocation was split to allow BVMG to collect nearly two-thirds of the revenues. Under the agreement, it was BVMG’s responsibility to collect all receivables. Mr. McClatchey signed the 1988 renewal agreement. In 1986, BVMG fell behind in collecting the receivables. Tom Eckard proposed an idea to Baptist whereby Baptist would hire a temporary employee to bring the lab up to date in its billing practices. Mr. Eckard sold his idea to Mr. Keel (who apparently obtained Mr. McClatchey’s approval) by arguing that BVMG had little interest in collecting the receivables in a timely manner and the hospital needed to shore up its accounting for those receivables. The project resulted in a nice net income for the hospital. In the early 1990s in response to new regulations from Congress relating to lab referrals, BVMG needed to restructure its lab arrangement. Mr. Keel recommended, and Mr. Anderson approved, the loan of an employee to BVMG to bring the lab “up to speed.” Mr. McClatchey knew about the arrangement but there is no evidence he acted to bring it about. In 1990, the LaHues approached Mr. Keel about Baptist helping them solicit nursing home referrals from Baptist patients who were in need of nursing home care but otherwise unassigned to any specific nursing home. Mr. Keel implemented this idea with other hospital staff after informing Mr. McClatchey and Mr. Anderson of the plan. In early 1991, the LaHues asked Baptist for a loan to cover payroll. Mr. McClat-chey asked Mr. McGrath to work with Mr. Thompson on documenting a $100,000 line of credit. Mr. Thompson drew up the documents, but the LaHues never drew on the line of credit. There is no evidence that Mr. McClatchey did not intend any loan which might have been made to be repaid. In 1992, the LaHues asked Baptist to take over the lease of certain office space. Baptist agreed, and began making lease payments as of September, 1992. Mr. McClatchey knew about this arrangement, but it was negotiated by Mr. McGrath and documented by Mr. Thompson. It constituted a beneficial business arrangement from Baptist’s perspective, allowing Baptist to aquire needed space at a favorable rate. D. BVMG’s Relationship with Other Hospitals 1. St. Joseph Medical Center Beginning in the summer of 1988, and continuing through November of 1989, Robert LaHue and Tom Eckard, acting for and on behalf of BVMG, negotiated an agreement with St. Joseph Medical Center whereby BVMG would refer Medicare eligible patients to St. Joseph Hospital for an ostensible consulting fee. The solicitation was Robert LaHue’s idea. The 1988 proposal discussed at the hospital explicitly states that BVMG will refer all its Wichita patients to St. Joseph Hospital. The consulting services outlined in the final version of the contract were similar to the consulting services listed in the Baptist consulting contracts. BVMG did only minimal consulting, and any consulting that was done was done by Tom Eckard — not BVMG. The only benefit to the hospital from the arrangement was the referrals because the services listed were for the benefit of BVMG’s nursing home patients, not the hospital. St. Joseph Medical Center paid BVMG $50,000 per year at first, and the amount increased to $100,000 per year in 1992 when BVMG’s Wichita patient census had grown substantially. 2. Deaconess Hospital Beginning in May 1989 and continuing through February 1990, Robert LaHue and Tom Eckard, acting on behalf of BVMG, negotiated an arrangement with Deaconess Hospital whereby BVMG would refer Medicare eligible patients to Deaconess Hospital in return for an ostensible consulting fee. This agreement, like the agreement at St. Joseph Medical Center, provided that Deaconess Hospital would pay $50,000 per year to BVMG. Witnesses testified that despite the consulting services required of BVMG in the agreement, Deaconess Hospital did not need any expertise from BVMG to take care of elderly patients at Deaconess Hospital. BVMG sent Deaconess Hospital patients — nothing more. 3. Bethany Medical Center Beginning in April 1991 and continuing through May 1991, Tom Eckard and Dr. Chris Murray, acting on behalf of BVMG, on the recommendation of Ronald LaHue, negotiated an agreement with Bethany Medical Center whereby BVMG would refer Medicare eligible patients to Bethany Medical Center in return for an ostensible consulting fee. The solicitation at Bethany Medical Center occurred with the approval of Robert LaHue. When the three BVMG doctors primarily responsible for nursing homes in Bethany Medical Center’s area jumped from BVMG to Tom Eckard’s new startup business in 1994, Ronald LaHue attempted to reassure Bethany that BVMG would nonetheless send patients. From May 1992 through September 1994, Bethany Medical Center paid BVMG over $169,000. 4. Alexian Brothers Hospital Beginning in January 1992 and continuing through October 1, 1992, Robert La-Hue and Tom Eckard negotiated an agreement with Alexian Brothers Hospital whereby BVMG would refer Medicare eligible patients in return for an ostensible consulting fee. The arrangement here was similar in substance to the arrangements at the other non-Baptist hospitals. Alexian Brothers Hospital paid approximately $190,000 to BVMG during the relationship. 5.Liberty Hospital At a meeting with Liberty Hospital executives at which Tom Eckard and Robert and Ronald LaHue were all present, BVMG proposed a contract whereby BVMG would be paid for services Liberty was already performing on its own. According to at least one witness at the meeting, “Blue Valley Medical Group approached [Liberty CEO] Joe Crossett about a possible fee in exchange for the patient referrals that they sent.” Tr. at 2189. Liberty refused the offer. II. Motions for Acquittal Each defendant seeks acquittal pursuant to Fed.R.Crim.P. 29. Specifically, each defendant asserts that the government’s proof was insufficient, as to him, to establish the mens rea element of the charged crimes. Each defendant also asserts that the government’s proof fell short of proving the unlawful inducement element of an Anti-Kickback Act violation. The court denies the motions of Mr. Anderson and Robert LaHue because the evidence is sufficient for a reasonable jury to have convicted them beyond a reasonable doubt. The court grants the motion of Mr. McClatchey, because, although the evidence appears close upon first glance, it is upon closer review insufficient to support a jury finding beyond a reasonable doubt on the element of intent. The court grants the motion of Ronald Lahue as to count eight but denies the motion with respect to all other counts. A. Standard A motion for judgment of acquittal challenges the sufficiency of the evidence. United States v. Urena, 27 F.3d 1487, 1490 (10th Cir.1994). In deference to the jury’s finding of guilt, the court must view the evidence in a light most favorable to the government. United States v. Valadez-Gallegos, 162 F.3d 1256, 1262 (10th Cir. 1998). The court must then determine whether there is substantial evidence to support a verdict of guilt beyond a reasonable doubt. Id. To support a conviction the evidence must do more than simply raise a suspicion of guilt; the evidence must be substantial. United States v. Taylor, 113 F.3d 1136, 1144 (10th Cir. 1997). The jury, as fact finder, is entitled to consider both direct and circumstantial evidence, as well as all reasonable inferences therefrom. United States v. Hooks, 780 F.2d 1526, 1531 (10th Cir.1986). "Even though rational jurors may believe in the likelihood of the defendants’ guilt, ... they may not convict on that belief alone." United States v. Jones, 49 F.3d 628, 632 (10th Cir.1995). As it relates to Drs. Robert and Ronald LaHue, the Anti-Kickback Act provides in pertinent part: Whoever knowingly and willfully solicits or receives any remuneration ... in return for referring an individual to a person for the furnishing ... of any ... service for which payment may be made ... under [Medicare] shall be guilty of a felony .... 42 U.S.C. § 1320a-7b(b)(1). As it relates to Dan Anderson and Dennis McClatchey, the Anti-Kickback Act provides in pertinent part: Whoever knowingly and willfully offers or pays any remuneration ... to any person to induce such person — to refer an individual ... for the furnishing ... of any ... service for which payment may be made ... under [Medicare] shall be guilty of a felony .... 42 U.S.C. § 1320a-7b(b)(2). The “willfully” language in the Anti-Kickback Act incorporates a heightened mens rea element. Pursuant to the court’s instructions, An act is done willfully if it is done voluntarily and purposely and with the specific intent to do something the law forbids, that is, with the bad purpose either to disobey or disregard the law. A person acts willfully if he or she acts unjustifiably and wrongly while knowing that his or- her actions are unjustifiable and wrong. Thus, in order to act willfully as I have defined that term, a person must specifically intend to do something the law forbids, purposely intending to violate the law. Instruction No. 36; see also United States v. Jain, 93 F.3d 436, 440-41 (8th Cir.1996). The conspiracy charges require an identical degree of criminal intent. See United States v. Jones, 808 F.2d 754, 755 (10th Cir.1987). B. Robert and Ronald LaHue There is ample evidence to support the inference that both Robert LaHue and Ronald LaHue acted with a bad purpose, specifically intending to violate the Anti-Kickback Act at Baptist Hospital. From the beginning of BVMG’s relationship at Baptist — the very first conversation over the neighborhood fence between Ron Keel and Ronald LaHue — the relationship between BVMG and Baptist was about patients and what Baptist would have to do for the LaHues in order to obtain referrals. Immediately when Baptist began paying the LaHues $150,000 per year, BVMG’s patient referrals to University Hospital came to a virtual halt and Robert and Ronald LaHue each began referring massive numbers of patients to Baptist. This happened immediately after Ronald LaHue told University Hospital representatives that “business is business” and Robert LaHue told University Hospital that Baptist had offered them a large sum to move their patients. Witness after witness testified that the LaHues performed very few actual services in return for the substantial annual sum they were paid. Mr. Eckard described the services performed by the La-Hues as “minimal to none.” Although the LaHues did provide some services under the contracts, many of the services specified in the contracts were services related to care of their own patients. In connection with the February 1993 meetings to fix the Eckard employment arrangement, Robert LaHue out and out asked Baptist to base the LaHues’ fees on a per patient basis. In connection with the 1994 meetings after the failed Vencor sale, Ronald LaHue told Kevin McGrath that BVMG “feels they have value in the 2,000 nursing home beds they control. They wish to work out any arrangement with Health Midwest that pays them for this value.” (emphasis added). A reasonable jury could conclude from this evidence that the LaHues solicited and received considerable sums of money from Baptist, intending to be influenced by that money in their patient referral decisions. See Instruction No. 33. In light of the ample evidence that the LaHues knew that such patient referral schemes are illegal, there was easily enough evidence for a rational jury to convict them of conspiracy and substantive violations of the Anti-Kickback Act at Baptist beyond a reasonable doubt. Similarly, there was ample evidence to convict Robert LaHue of substantive violations of the Anti-Kickback Act at St. Joseph Medical Center. The solicitation at St. Joseph was Robert LaHue’s idea. BVMG did only minimal consulting under the arrangement, and any consulting that was done was done by Mr. Eckard. BVMG referred its patients to St. Joseph, and was paid a substantial sum. There was ample evidence to convict Robert LaHue of substantive violations of the Anti-Kickback Act at Deaconess Hospital. Robert LaHue negotiated the familiar consulting-fee-type arrangement with Deaconess, who, witnesses testified, did not need any consulting expertise in the geriatric field. In return for $50,000 per year, BVMG sent Deaconess patients and nothing more. There was ample evidence to convict Robert and Ronald LaHue of substantive violations of the Anti-Kickback Act at Bethany Medical Center and Liberty Hospital. Ronald LaHue suggested BVMG solicit Bethany, and Robert LaHue approved the suggestion. Bethany paid BVMG, Robert’s corporation, over $169,000. BVMG sent Bethany patients. When there was a threat to the patient numbers, Ronald attempted to reassure Bethany that BVMG would nonetheless continue to send patients. Robert and Ronald together solicited Liberty Hospital “about a possible fee in exchange for the patient referrals that they sent.” There was ample evidence to convict Robert LaHue of substantive violations of the Anti-Kickback Act at Alexian Brothers Hospital. Robert LaHue negotiated the familiar consulting agreement, whereby Alexian Brothers paid BVMG approximately $190,000. BVMG did little or no consulting at Alexian Brothers. Moreover, the overwhelming evidence of Robert La-Hue’s intent to be influenced in his patient referral decisions at the other hospitals is sufficient to support an inference that he had similar intentions with respect to Ale-xian Brothers. See Fed.R.Evid. 404(b). Despite the court’s ruling at trial to the contrary, however, the evidence was insufficient to support a conviction of Ronald LaHue for principal or aider and abettor liability at Alexian Brothers Hospital. In order to support conviction under an aider and abettor theory, the government needed to prove that Ronald LaHue “knowingly did some act for the purpose of furthering the commission of that particular crime.” Instruction No. 35. The only evidence specifically connecting Ronald LaHue with the arrangement at Alexian Brothers Hospital is the equivocal testimony of Mr. Eckard, Ronald’s presence at Alexian Brothers Hospital on one occasion, and the appearance of Ronald’s name as a copied recipient on three Alexian Brothers-related documents. Mr. Eckard testified that he discussed the idea to solicit Alexian Brothers with Ronald LaHue and that he “believe[d]” that Ronald approved of the solicitation. Tr. at 4654. This testimony does nothing to show that Ronald did some affirmative act to further the crime because Mr. Eckard’s mere, belief that Ronald approved is insufficient to show beyond a reasonable doubt that Ronald affirmatively approved. Mr. Eckard also testified, in the context of broad government questions related to the solicitation of all the non-Baptist hospitals as a group, that both Drs. LaHue were “involved in” these relationships. Tr. at 4351. This evidence is too equivocal to support more than a suspicion of guilt because the question and response were too broad; Ronald LaHue was clearly involved in the relationships at Bethany and Liberty and Robert was clearly involved in the relationships with all the non-Baptist hospitals. Ronald’s presence at Alexian on one occasion does nothing to support conviction because there is nothing unusual about a doctor appearing in a hospital, and there is no evidence explaining why he was there. See United States v. Jones, 44 F.3d 860, 869 (10th Cir.1995) (“The government must prove, through direct or circumstantial evidence, more than mere presence at the scene of the crime even if coupled with knowledge that the crime is being committed.”). The three Alexian Brothers-related documents which mention Ronald La-Hue, Govt Exs. 802, 815, and 819, merely list Ronald as a document recipient and do nothing to show that he acted affirmatively to further the Alexian Brothers/BVMG relationship. Accordingly, the court grants Ronald LaHue’s motion for acquittal as to count eight. See United States v. Bindley, 157 F.3d 1235, 1238 (10th Cir.1998) (quoting United States v. Jones, 44 F.3d 860, 869 (10th Cir.1995) (“To be guilty of aiding and abetting, a defendant must willfully associate with the criminal venture and aid such venture through affirmative action.”)). C. Dan Anderson The court denies Mr. Anderson’s motion for acquittal because the evidence at trial was sufficient for a reasonable jury to conclude he willfully violated and conspired to violate the Anti-Kickback Act. From the beginning of the BVMG/Baptist relationship, Mr. Anderson understood Baptist’s relationship with the LaHues to be centered around patient referrals and what Baptist would have to do to acquire them. The relationship began when Mr. Anderson agreed in principle to pay the LaHues to associate with Baptist. Only after the fee was set did the parties begin attempts to justify the fee. Shortly thereafter, Mr. Anderson approved the LaHues’ request to assign Tom Eckard to their practice. Without more, however, the mere chronology of events (i.e. patients following remuneration) is insufficient to infer that Mr. Anderson “purposely intended to violate the law.” What makes the Baptist situation different from the relationships between the other hospitals and BVMG is that Baptist endeavored to involve legal counsel much more extensively in an effort to effectuate the relationship, and those lawyers attempted to put it on a legal footing. As the court recognized in granting the lawyer defendants’ motions for acquittal at the close of the government’s evidence, and which is applicable as well to the starting point in evaluating the evidence of culpability of the hospital executive defendants, It is undisputed from the evidence that all the lawyers who dealt with or reviewed these transactions ... held good faith beliefs that it was possible to facilitate some business relationship that was legal between the hospitals and BVMG. Even if patient referrals were devoutly hoped for and anticipated; even if the volume of patients could be large; even if the parties might never have come together but for Baptist having embarked on a long range plan that depended on attracting nursing home patients, there is nothing in the evidence or the law that would have a priori precluded a legal relationship from being entered into under these circumstances. The problem here is that a very simple concept, “payment for patients is illegal,” became far from simple as Congress, the Executive Branch, and the Courts got more deeply involved. “Remuneration to induce” language invites judicial interpretation as to what these words mean — indeed, the government in this case adamantly maintains that the words require definition as part of the jury instructions. Judicial catch phrases like “one purpose rule” [see United States v. Greber, 760 F.2d 68, 69 (3d Cir.1985) ] or “primary purpose rule,” the reversals of field by the OIG concerning its own interpretation, the checkered history of the Hanlester [Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995) ] case and the reservation by Congress of a safe harbor provision in the act (the promulgation of regulations concerning which were delayed for a considerable time) all invite lawyers to attempt to devise legal ways for parties to have a relationship which has as a component hoped-for and anticipated referrals.... There were no decisions from the U.S. Supreme Court or from the Eighth or Tenth Circuits, where the activities in question were going on, to guide them. What the evidence unassailably demonstrated is that [the lawyers] steadfastly maintained to their clients that if fan-market value were paid for the doctors’ practice or for legitimate consulting services, the relationship passed legal scrutiny. Nothing in the evidence or the law suggests otherwise. Tr. at 7342-45. The court must examine, therefore, whether Mr. Anderson’s actions demonstrate that he caused Baptist to pay more than fair market value for consulting services, whether he knew the consulting services were illegitimate, and whether he knew they were not sufficiently being performed. The government’s evidence is sufficient to show that Mr. Anderson knew the payments he directed were more than fair market value for consulting services, that the services specified ultimately proved to be not entirely bona fide, and that the services specified were not sufficiently being performed. When Mr. Keel recommended modifying the relationship in January of 1986 to reduce the amount of fees paid and accurately specify services to be provided, Mr. Anderson approved the latter recommendation but raised questions about the former. The fees were not reduced. A jury could infer from this evidence that Mr. Anderson refused to reduce the fees even when faced with information that the specified consulting services were not being performed. Wfiien Mr. Probst and Mr. McClatchey recommended in 1987 that Mr. Eckard be terminated for tax reasons and because his allegiances were beginning to shift, Mr. Anderson rejected the recommendation because he was concerned that firing Mr. Eckard would “disrupt or create a problem with the relationship between Baptist Medical Center and [BVMG].” A jury could infer from this evidence that Mr. Anderson cared little whether Mr. Eckard performed duties for the hospital as long as the patients kept coming. In 1991, Mr. Thompson informed Mr. Anderson that the 1986 agreement did not conform with safe-harbor regulations, but could be brought into compliance if the contract were written to require hourly services at a specified rate and if Baptist undertook to extensively document the services actually being performed. Neither of these recommendations were implemented. Mr. Anderson later learned that the LaHues were having difficulty performing some of the services delineated, but Mr. Anderson made no efforts to limit or end the consulting fees he himself had directed. A jury could infer from Mr. Anderson’s repeated “torpedoes be damned” attitude toward paying the annual fees, which he personally directed be paid, that he placed little value on the LaHues’ consulting and instead cared only about patient referrals. The most inculpatory evidence as to Mr. Anderson falls near the end of the Baptist/BVMG relationship. After receiving BVMG’s termination letter prior to the anticipated BVMG sale to Vencor, Mr. Anderson worked to develop a strategy to replace the BVMG patients but did nothing to replace the LaHues’ consulting services. Again, a jury could infer from this evidence that Mr. Anderson placed little value on the consulting services and instead valued BVMG’s patients. D. Dennis McClatchey The question of whether there is sufficient evidence to support a finding that Mr. McClatchey joined a conspiracy specifically intending to do something the law forbids, purposely intending to violate the law, initially appears close because of his acknowledged association with the other defendants. The issue is whether, on more careful analysis, it is only this mere association that can properly be inferred. See, e.g., United States v. Austin, 786 F.2d 986, 988 (10th Cir.1986) (“A defendant’s mere association with conspirators is not enough to support a conspiracy conviction.”). In evaluating the motion, the court is ever mindful that it would be entirely improper for it to substitute its judgment for that of the jury. See United States v. Copus, 110 F.8d 1529, 1534 (10th Cir.1997). After thoroughly reviewing the trial record, the court concludes that, even viewing the evidence in the light most favorable to the government and drawing every permissible inference in the government’s favor, the evidence was insufficient as a matter of law to support a jury finding beyond a reasonable doubt on the element of intent. Accordingly, the court grants Mr. McClatchey’s motion for acquittal. Mr. McClatchey’s position is fundamentally different from the positions of Mr. Anderson and the Drs. LaHue. What is illegal under the Anti-Kickback Act is to offer or pay remuneration to induce referrals, or to solicit or receive remuneration in return for referrals. 42 U.S.C. § 1320a-7b(b). The evidence at trial was overwhelming that it was Mr. Anderson, not Mr. McClatchey, who offered and paid remuneration to the LaHues. Specifically, Mr. Anderson directed the $150,000 annual payments to the LaHues and Mr. Anderson assigned Mr. Eckard to assist BVMG. Mr. McClatchey played only a peripheral role in the alleged offer and payment scheme because there is simply no evidence that he personally offered or paid or directed any remuneration to induce referrals. As such, the government can obtain a conviction only on a coconspirator liability theory. See Self, 2 F.3d at 1085, 1089; Pinkerton, 328 U.S. at 640, 66 S.Ct. 1180. The evidence was that Mr. McClatchey was in many ways caught in the middle between Mr. Anderson, who (the jury was entitled to find) insisted that the LaHues be paid $150,000 per year and that Mr. Eckard continue to work for BVMG, and Mr. Keel, Mr. McGrath, and Mr. Eckard, who had the day-to-day responsibility for monitoring contract performance. The government’s principal contention at trial was that Mr. McClatchey made the illegal kickback scheme possible by preparing the hospital for the influx of patients and facilitating the hospital’s overall relationship with BVMG. He surely did so, as he openly admitted when he took the witness stand at trial. The government may not, however, obtain a conviction merely by relying on actions Mr. McClat-chey legitimately took as Chief Operating Officer of Baptist Medical Center. There is nothing illegal or susceptible to an inference of criminal intent, for example, for the Chief Operating Officer of a hospital merely to prepare for an expected influx of patients and facilitate a potentially bona fide relationship with a group of doctors from whom patient referrals are expected as a by-product. The court has reviewed every shred of evidence the government has marshaled against Mr. McClatchey and conducted its own extremely thorough independent review of the record. Even granting the government all the inferences to which it is entitled, the court’s efforts have led it to the unmistakable conclusion that the evidence was insufficient to support his conviction. Every time Mr. McClatchey appears in the chronology of events in this case, he is either merely a silent document recipient, acting to bring the BVMG/Bap-tist relationship into compliance with what the lawyers told him was required, or acting in the normal course of his employment as Chief Operating Officer. To be sure, Mr. McClatchey knew there were grave risks attendant to Baptist’s relationship with BVMG. But he also knew that the lawyers had given the basic structure their blessing. Every time there is evidence that Mr. McClatchey learned the relationship drifted too far afield from the lawyers’ directions, he took serious and decisive efforts to bring the hospital into compliance. When the BVMG/Baptist relationship was in its infancy, Mr. McClatchey had very little to do with the day to day arrangements. Mr. Anderson directed that the remuneration be paid, and Mr. Keel and Mr. Eckard had responsibility to foster and monitor the relationship. Mr. McClatchey was kept up to date with written correspondence, but took almost no direct action. He knew, for example, that Mr. Keel recommended modifying the relationship in early 1986 to reduce the fees and shore up the terms of the contract, but he had little or no substantive involvement in these activities. Mr. Keel, Mr. Eckard, and Ms. Lehr took on those duties. There is no evidence that any involvement Mr. McClatchey did have in connection with shoring up the contract was anything other than legitimate. As the relationship progressed, Mr. McClatchey acted only in conformance with his understanding of the law. In 1987, Mr. McClatchey received the memo from Deb Grimes informing him that the LaHues-were .not sufficiently performing services under the contract. Mr. McClat-chey said he would “take care of it.” He ruffled feathers and hospital front 'line staff began using the LaHues’ services. His actions were entirely consistent with his understanding that the LaHues needed to be performing valid services for the relationship to be legal, and he had every right to rely on the earlier efforts of Mr. Keel, Mr. Eckard, and Ms. Lehr to draft a contract that was legal. Mr. McClatchey also recommended against increasing the fees to the LaHues in this time period. Moreover, when it later became clear that the Eckard arrangement had tax and other negative implications for the hospital, Mr. McClatchey willingly joined with Mr. Probst to recommend Mr. Eckard’s termination. After the Health Midwest merger, Mr. McClatchey took on a greater role with respect to the Baptist/BVMG relationship, and continued his work to keep it on course. In the summer of 1991, when Mr. Keel made some rather inappropriate suggestions for contract modifications, . Mr. McClatchey did not adopt the recommendations but forwarded the ideas to the hospital’s lawyers. Later in 1991, when Mr. McGrath told him there were problems with the delivery of services, Mr. McClatchey was surprised and directed Mr. McGrath to check out th