United States v. Arsenio Leon , 569 F. App'x 823 ( 2014 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-15251
Non-Argument Calendar
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D.C. Docket No. 1:12-cr-20219-WJZ-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ARSENIO LEON,
Defendant-Appellant.
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Appeals from the United States District Court
for the Southern District of Florida
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(June 23, 2014)
Before PRYOR, MARTIN, and FAY, Circuit Judges.
PER CURIAM:
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Arsenio Leon appeals after a jury found him guilty of (1) Count 1:
conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349; (2)
Counts 2 through 9: health care fraud, in violation of 18 U.S.C. § 1347; (3) Count
10: conspiracy to pay health care kickbacks, in violation of 18 U.S.C. § 371; and
(4) Counts 11 through 15: five counts of payment of kickbacks in connection with
a federal health care program, in violation of 42 U.S.C. § 1320a–7b(b)(2)(A).
Leon first argues the district court erred in denying his motion for a judgment of
acquittal on Counts 1 through 9. He also claims the district court erred in imposing
a 16-level loss amount enhancement when determining his sentence. Because we
find no error in either decision, we affirm.
I.
We review de novo the denial of a motion for judgment of acquittal on
sufficiency of evidence grounds. United States v. Friske, 640 F.3d 1288, 1290
(11th Cir. 2011). “A factual finding will be sufficient to sustain a conviction if,
after viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime beyond a
reasonable doubt.” United States v. Hunt, 526 F.3d 739, 745 (11th Cir. 2008)
(emphasis omitted). The standard is the same whether the evidence is direct or
circumstantial. United States v. Utter, 97 F.3d 509, 512 (11th Cir. 1996).
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Leon argues that the district court erred in denying his motion for a
judgment of acquittal on Counts 1 through 9, which charged conspiracy to commit
health care fraud under 18 U.S.C. § 1349, and health care fraud under 18 U.S.C.
§ 1347. To establish a conspiracy, “the government must prove beyond a
reasonable doubt (1) that a conspiracy existed; (2) that the defendant knew of it;
and (3) that the defendant, with knowledge, voluntarily joined it.” United States v.
Vernon, 723 F.3d 1234, 1273 (11th Cir. 2013) (quotation marks omitted). A jury
may find a defendant “guilty of conspiracy if the evidence demonstrates that he
knew the ‘essential objective’ of the conspiracy, even if he did not know all its
details or played only a minor role in the overall scheme.” United States v. Guerra,
293 F.3d 1279, 1285 (11th Cir. 2002). Circumstantial evidence can be used to
establish the elements of a conspiracy. Id.To prove health care fraud, “the defendant must be shown to have known
that the claims submitted were, in fact, false.” United States v. Medina, 485 F.3d
1291, 1297 (11th Cir. 2007). Claims are false if they “were not medically
necessary, or were not delivered to the patients.” See id. at 1304.
Leon claims the government failed to prove that he: (1) conspired with
anyone to commit health care fraud; (2) knew the claims were not medically
necessary or provided to patients; or (3) knowingly aided in the submission of
fraudulent claims. But viewing the evidence in favor of the verdict, a rational trier
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of fact could have reasonably found that Leon knowingly conspired to commit, and
in fact committed, health care fraud. This conclusion is based on Leon’s
significant control over his company Discovery Therapy, Inc., (Discovery) and its
finances, combined with the fact that Discovery’s primary, if not only, activity
during this period was paying kickbacks to patients and submitting fraudulent
claims. 1
Leon was the sole owner and president of Discovery. In April 2011, he
opened a new bank account for Discovery at J.P. Morgan Chase. Leon was the
only signator on the account when it was opened, although he later added and then
removed codefendant Yosany Sosa as an additional signator. Four days after
opening that separate bank account, Leon registered Discovery as an authorized
Medicare services provider with Blue Cross Blue Shield (BCBS), listing himself as
the “authorized official.” Leon directed that all of the Medicare claim payments
that BCBS made to Discovery be directly deposited into the J.P. Morgan Chase
bank account he controlled. In April 2011 he also hired DNA Billing to prepare
Medicare claims for Discovery. In the contract with DNA, Leon agreed that he
had “the sole responsibility for the accuracy of all source information [Discovery]
provides DNA, and DNA shall have no obligation to verify or otherwise validate
such information.”
1
Leon does not challenge his convictions on the charges of conspiracy to pay and actual
payment of kickbacks in connection with a federal health care program, Counts 10 through 15.
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Between May and August 2011, despite the fact that Discovery only had
twelve patients and was a small suite in a strip mall with one examination room, it
submitted over a million dollars in claims to BCBS, from which Discovery
received $443,000.65 in Medicare claim payments by direct deposit into the J.P.
Morgan Chase bank account. With the exception of two deposits totaling $2,000,
the only money that ever went into the J.P. Morgan Chase bank account was the
$443,000.65 from BCBS. During this time period, Leon made withdrawals or
received payments from the account totaling approximately $119,000. There were
also retail purchases made from the account to businesses like Macy’s, Home
Depot, and a grocery store. Notably, only five payments were made from the J.P.
Morgan Chase account to pharmaceutical suppliers, for a total of approximately
$8,000, despite the fact that Discovery billed BCBS over $1 million for various
injections that it claimed were given to Discovery’s patients.
Leon was also present at Discovery when a fraud investigator from BCBS
came to conduct an audit. There were no patients or medical staff present, despite
the fact that it was 1 p.m. on a Monday. The only medication present was a few
small vials in a locked refrigerator. Leon told the investigator that he was not able
to find the medical records she was requesting because he did not know where they
were. Later the fraud investigator received only seven of Discovery’s twelve
patient files by mail. For each patient there was a cover letter signed by Leon
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attesting that “the attached records are the complete accurate patient file for the
time period requested as it was created at or about [the] time the services were
rendered, and that no changes, alterations, or amendments have been [made] to the
records” and acknowledging “that [BCBS] of Florida is relying upon this
material[] representation in its review of those claims.” But these files did not
match the claims Discovery made on behalf of these patients.
Although this evidence is mostly circumstantial, it was sufficient to allow
the jury to conclude beyond a reasonable doubt that Leon conspired with his
confederates to commit health care fraud and knew the claims submitted to BCBS
were not medically necessary or provided to patients. We therefore affirm his
convictions on Counts 1 through 9.
II.
Leon next argues that the district court clearly erred in imposing a 16-level
loss amount enhancement under § 2B1.1(b)(1)(I) of the United States Sentencing
Guidelines (USSG) because: (1) the amount billed to BCBS was not a reasonable
estimate of the intended loss; and (2) amounts from bills that were faxed from a
number that Leon asserts was not associated with himself or with Discovery should
not have been included.
We review de novo the district court’s interpretation and application of the
Sentencing Guidelines, and its calculation of the amount of loss for clear error.
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United States v. Machado, 333 F.3d 1225, 1227 (11th Cir. 2003). A 16-level
increase applies if the loss exceeded $1,000,000. USSG § 2B1.1(b)(1)(I).
According to the Guidelines Commentary, “loss is the greater of actual loss or
intended loss.” Id. § 2B1.1, comment. (n.3(A)). “Intended loss” is “the pecuniary
harm that was intended to result from the offense,” even if “impossible or unlikely
to occur.” Id. § 2B1.1, comment. (n.3(A)(ii)). The defendant is responsible for
loss that he “knew or, under the circumstances, reasonably should have known,
was a potential result of the offense.” Id. § 2B1.1, comment. (n.3(A)(iv)).
Against this legal backdrop, the district court did not clearly err in imposing
a 16-level enhancement for a loss amount of over $1,000,000. First, Leon offers
no evidence that he intended BCBS to pay—or even knew that they would pay—
less than the full $1,244,088.13 in submitted claims, even if BCBS’s
reimbursement formulas for providers like Discovery made it unlikely or even
impossible that BCBS would pay the full amount. USSG § 2B1.1, comment.
(n.3(A)(ii)).
Second, we reject Leon’s objection to the inclusion in the loss amount
calculation of fraudulent bills submitted to DNA Billing on behalf of Discovery
that came from an unidentified fax number. As we already explained, based on the
evidence presented at trial, the district court did not err in finding by a
preponderance that Leon participated in a health care fraud conspiracy with others
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to submit fraudulent bills to BCBS. Although neither party identified this fax
number, the bills indicated they were from Discovery, were sent to Discovery’s
billing agent DNA, and were used to pay money into the bank account Leon
controlled. It was therefore not error for the district court to find by a
preponderance that Leon was responsible for the amount of loss attributable to
these bills. There was sufficient evidence to conclude that Leon knew or, under
the circumstances, reasonably should have known, that the receipt of fraudulent
reimbursements paid into the bank account he controlled for these Discovery bills,
whether submitted to his authorized billing agent by himself or his coconspirators,
was a potential result of the offense. See USSG § 2B1.1, comment. (n.3(A)(iv));
see also United States v. McCrimmon, 362 F.3d 725, 732–33 (11th Cir. 2004) (per
curiam).
Leon’s convictions and sentence are therefore AFFIRMED.
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