United States v. Aronowitz ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
10-26-2005
USA v. Aronowitz
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-4044
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NOT PRECEDENTIAL
IN THE UNITED STATES COURT
OF APPEALS
FOR THE THIRD CIRCUIT
NO. 04-4044
UNITED STATES OF AMERICA
v.
ALAN I. ARONOWITZ,
Appellant
On Appeal From the United States District Court
For the Western District of Pennsylvania
(D.C. Crim. Action No. 03-cr-00261-1)
District Judge: Hon. Arthur J. Schwab
Submitted Pursuant to Third Circuit LAR 34.1(a)
October 19, 2005
BEFORE: SMITH, STAPLETON and NYGAARD, Circuit Judges
(Opinion Filed October 26, 2005)
OPINION OF THE COURT
STAPLETON, Circuit Judge:
From 1997 to 2002, Alan Aronowitz, a licensed dentist, charged an insurance
company as if he had performed certain root canal procedures even though he had in fact
unlawfully allowed dental assistants to do the work. In 2004, he pled guilty to health care
fraud under 18 U.S.C. § 1347 and was sentenced to 48 months of imprisonment.
Aronowitz was sentenced after the Supreme Court had decided Blakely v.
Washington, 542 U.S. 296 (2004), but before United States v. Booker, 125 S. Ct. 739(2005), when the validity of the U.S. Sentencing Guidelines was somewhat in doubt. The
District Court found the Sentencing Guidelines to be unconstitutional, but nevertheless
considered the suggested guidelines range for the offense as informing the decision rather
than mandating it, an approach later prescribed by the Supreme Court. See Booker, 125
S. Ct. at 756-57. At sentencing, the District Court found that the amount of loss in
Aronowitz’s case was between $199,000 and $344,000, a fact which had been included in
a Presentence Report calculating a 41-51 month sentencing range. The District Court was
reminded of that range at sentencing. The District Court sentenced Aronowitz to 48
months which “adequately conforms with the statutory objectives of [18 U.S.C. § 3553]
. . . [and is] appropriate to address the sentencing objectives including punishment,
rehabilitation, and deterrence.” App. at 138.
While Aronowitz’s sentence was enhanced based on facts neither admitted to nor
found by a jury, he does not complain that his Sixth Amendment rights were violated by
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raising a Booker challenge on appeal. In addition, remanding to allow the District Court
to resentence in light of Booker would be redundant in this case since the District Court
essentially applied the analysis called for by that case. Thus, the framework enunciated in
United States v. Davis, 407 F.3d 162 (3d Cir. 2005) (en banc), does not apply to
Aronowitz’s sentence. Instead, we will review the District Court’s application of the
Guidelines de novo, as under our prior case law, see, e.g., United States v. Brennan, 326
F.3d 176, 200 (2003), and Aronowitz’s sentencing for “unreasonableness.” See Booker,
125 S. Ct. at 765-66.
Aronowitz argues on appeal that the District Court erred by finding that he caused
any monetary loss in determining his sentence. Aronowitz argues that there were no
“losses” because there was no proof that any of his patients were harmed by the root
canals that he had his employees perform unlawfully. Id. at 14. He relies on United
States v. Maurello, 76 F.3d 1304 (3d Cir. 1996), and United States v. Hayes, 242 F.3d 113(3d Cir. 2001), as establishing the proposition that, for the purposes of sentencing those
who fraudulently offer professional services to the public, “loss” may not include the
services that were “satisfactory” and “have not harmed” the public. Maurello, 76 F.3d at
1311-12. According to Aronowitz, because the government did not make any showing
that patients were harmed by the root canal procedures, the District Court was wrong to
consider that his conduct caused any loss.
Aronowitz’s reliance on Maurello and Hayes is misplaced because those cases
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have been disavowed by the U.S. Sentencing Commission. In November 2001 (10
months after Hayes was decided), an Application Note was added to the Sentencing
Guidelines that read:
In a case involving a scheme in which . . . services were fraudulently
rendered to the victim by persons falsely posing as licensed professionals
. . . loss shall include the amount paid for the property, services or goods
transferred, rendered, or misrepresented, with no credit provided for the
value of those items or services.
U.S. Sentencing Guidelines Manual § 2B1.1, cmt. n.3(F)(v). The Sentencing
Commission specified United States v. Maurello as one of the two cases prompting the
addition of this Application Note:
This rule reverses case law that has allowed crediting (or exclusion from
loss) in cases in which services were provided by persons posing as
attorneys and medical personnel. See U.S. v. Maurello, 76 F.3d 1304 (3d
Cir. 1996) . . . The Commission determined that the seriousness of these
offenses and the culpability of these offenders is best reflected by a loss
determination that does not credit the value of the unlicensed benefits
provided.
U.S. Sentencing Guidelines Manual app. C, vol. II, amend. 617, at 183-84 (2003).
Commentary to the Sentencing Guidelines is as binding as the Guidelines
themselves are on the sentencing court. See Stinson v. U.S., 508 U.S. 36, 46 (1993)
(“Amended commentary is binding on the federal courts even though it is not reviewed by
Congress, and prior judicial constructions of a particular guideline cannot prevent the
Commission from adopting a conflicting interpretation . . . .”). While, as we have noted,
Booker instructs that the Sentencing Guidelines are no longer “mandatory,” it also finds
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that the Guidelines are “advisory” and requires that sentencing courts consider the advice
they give. Booker, 125 S. Ct. at 756-57. If District Courts, required to be informed and
guided by the Guidelines before imposing sentences, continue to follow an interpretation
of the guidelines that has been effectively overruled, then they would be to be
misinformed and misguided by them. So, while the Guidelines as interpreted in the
Commentary are not “controlling” in that they no longer dictate a sentence within the
specified range, they are “controlling” in the sense that the Sentencing Commission
retains the power to divest this Court’s case law interpreting the guidelines of its
precedential force.
Because the Application Note in this case is “controlling” in that it divests
Maurello and Hayes of their precedential force, the District Court here could refuse to
consider it only if doing so would raise ex post facto concerns. See United States v.
Marmolejos, 140 F.3d 488, 493 n.7 (3d Cir. 1998) (“Commission commentary
. . . remains controlling authority, that is to be applied in all but the most limited
circumstances . . . despite any conflict with established precedent, unless ex post facto
concerns are present.”) (citations omitted). Here, not only did Aronowitz not raise any ex
post facto concerns on appeal, but our Court has found that no ex post facto problem is
presented by applying Guideline amendments to criminal conduct – even if the
amendments that do more than merely “clarify” the law – as long as the amendments took
effect during the course of the criminal conduct. See United States v. Brennan, 326 F.3d
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176, 198 (3d Cir. 2003) (finding that, while “an amendment [that] overrules a prior
judicial construction of the guideline . . . is substantive” (and not a “clarifying”
amendment), such amendments “would still not violate the ex post facto clause if the
fraud continued after the effective date of the amendment”). This Application Note took
effect in November 2001. U.S. Sentencing Guidelines Manual app. C, vol. II, amend.
617, at 186 (2003). Aronowitz’s course of conduct continued through 2002. Even
though this Application Note effectively overrules prior precedent, it is constitutional to
apply it to Aronowitz’s criminal conduct.
Reviewing the District Court’s determination under the sentencing guidelines de
novo, the sentencing range considered by the District Court did not rest on an improper
calculation of loss under the Guidelines based on the amended commentary. As this was
the only error raised on appeal, Aronowitz’s sentencing was not “unreasonable” and the
judgment of the District Court will be affirmed.
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