United States v. Miller ( 2003 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 02-4078
ROBERT B. MILLER,
Defendant-Appellant.

Appeal from the United States District Court
for the Southern District of West Virginia, at Bluefield.
David A. Faber, Chief District Judge.
(CR-00-38)
Argued: October 31, 2002
Decided: January 14, 2003
Before WILKINSON, Chief Judge, and LUTTIG and
MOTZ, Circuit Judges.
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Chief Judge Wilkinson and Judge Luttig joined.
COUNSEL
ARGUED: Michael William Carey, CAREY, SCOTT & DOUG-
LAS, P.L.L.C., Charleston, West Virginia, for Appellant. Hunter P.
Smith, Jr., Assistant United States Attorney, Charleston, West Vir-
ginia, for Appellee. ON BRIEF: Kasey Warner, United States Attor-
ney, Charleston, West Virginia, for Appellee.
2 UNITED STATES v. MILLER
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
Dr. Robert Miller pled guilty to mail fraud for over-billing third-
party insurers for services rendered in his medical practice. On
appeal, Miller argues that, when sentencing him, the district court
miscalculated the amount of loss resulting from this fraud. Finding no
reversible error in the district court’s loss calculation, we affirm.
I.
A grand jury indicted Miller on twenty-two counts of mail fraud in
violation of 18 U.S.C.A. § 1341 (West 2000). The indictment charged
Miller with submitting false claims to Medicaid, Medicare, West Vir-
ginia’s Workers’ Compensation program, and other health insurance
providers. Miller pled guilty to one count of mail fraud. The district
court conditionally accepted Miller’s plea pending receipt and review
of a presentence investigation report (PSR).
In the PSR, the probation officer concluded that Miller defrauded
Medicare, Medicaid, Workers’ Compensation, and private insurers in
four different ways. First, attempting to seek a higher reimbursement
rate, Miller billed ordinary new patient visits as more expensive "con-
sultations." Second, Miller routinely "upcoded" services performed
during office visits, claiming reimbursement for a higher level of ser-
vice than he actually provided. Third, Miller engaged in "phantom
billing" — submitting claims for office visits, services, and equipment
that he never provided. Finally, Miller used false diagnosis codes to
claim reimbursement for services not covered by Medicare and Med-
icaid.
In preparing the PSR, the probation officer reviewed over 200
Medicare and Medicaid reports in an attempt to estimate the total loss
resulting from Miller’s fraudulent conduct. This review disclosed an
error rate of 94% in Miller’s Medicare billing and 85% in his Medic-
aid billing. This review also revealed that Miller’s practice of upcod-
ing could result in payment three times or more than legally
authorized.
UNITED STATES v. MILLER 3
Additionally, the probation officer relied on the results of an inves-
tigation by several undercover law enforcement officers who made
visits to Miller. In 23 out of the 24 visits made by the officers, Miller
submitted fraudulent claims to the Government or private insurers.
Finally, the officer noted in the PSR that Miller paid $1.3 million to
settle the civil suit filed by the Government, $375,000 of which repre-
sented alleged overpayments by Medicare and Medicaid.
In summary, the PSR estimated that total losses to Medicare, Med-
icaid, Workers’ Compensation, and private insurers exceeded
$200,000. However, the PSR recommended that the district court
adopt the more "conservative estimate" of $150,000 in losses, based
only on losses to Medicare and Medicaid for fraudulent consultations.
This figure did not include any losses to Workers’ Compensation or
private insurers, nor did it include losses to Medicare or Medicaid
resulting from Miller’s fraudulent practices of "upcoding," "phantom
billing," or false diagnoses. Pursuant to U.S. Sentencing Guidelines
Manual ("U.S.S.G.") § 2F1.1(b)(1)(H) (2000), which establishes an
increase of seven offense levels if an offense involves more than
$120,000 but less than $200,000, the PSR recommended an increase
of seven offense levels based on the estimated loss of $150,000.
Miller filed objections to the PSR, disputing the loss calculation
contained in the report. He also moved for a downward departure pur-
suant to U.S.S.G. § 5K2.0. In his written objection to the PSR, and
orally at the sentencing hearing, Miller argued that the proper mea-
sure of loss for sentencing purposes was the difference between the
amount he actually received from Medicare and Medicaid and the
amount to which he was legitimately entitled for the services he ren-
dered. Using this formula, and after comparing his patient records
with Medicare and Medicaid billing information, a billing specialist
hired by the defense estimated the proper loss amount to be between
$22,440 and $38,955. According to Miller’s calculations, the offense
level based on the estimated loss should therefore have been increased
by four levels, rather than the seven recommended in the PSR. See
U.S.S.G. § 2F1.1(b)(1)(E).
At the sentencing hearing, the Government conceded that some of
Miller’s objections to the PSR were reasonable and that the defense
expert’s loss estimate was based on better data than the PSR. How-
4 UNITED STATES v. MILLER
ever, the Government argued that the proper formula for calculating
loss was the difference between the amount Miller billed (rather than
the amount he actually received) and the amount to which he was
legitimately entitled. Under this formula, the Government computed
losses of approximately $73,000, using Miller’s own, most generous
estimate of the amount of money to which he was entitled. Pursuant
to U.S.S.G. § 2F1.1(b)(1)(G), the Government therefore recom-
mended increasing the offense level by six levels based on estimated
loss in the range of $70,000 to $120,000.
Relying on the findings in the PSR and the evidence presented by
Miller and the Government at the sentencing hearing, the district
court concluded that $100,000 would be a conservative estimate of
the loss in this case. However, because the Government conceded at
the sentencing hearing that it had only established loss in an amount
ranging from $73,000 to $76,000, the court held that the total loss
amount was between $73,000 and $76,000 and accordingly increased
Miller’s offense level by six levels. See U.S.S.G. § 2F1.1(b)(1)(G).
The court also denied Miller’s motion for a downward departure.
II.
The Sentencing Guidelines direct courts to increase the offense
level for defendants convicted of fraud commensurate with the
amount of loss involved in the fraud. See U.S.S.G. § 2F1.1(b)(1). Mil-
ler challenges the district court’s interpretation of "loss" under the
Sentencing Guidelines on two grounds. First, he contends that the dis-
trict court erred in interpreting the term "loss" under the Guidelines
to encompass intended, rather than actual, loss. Second, he argues that
even if the district court correctly used intended loss in its calcula-
tions, the Guidelines limit intended loss to the amount of loss that was
likely, or possible, and the loss calculated by the district court was not
likely.
We consider each of these arguments in turn, reviewing the district
court’s interpretation of the term "loss" under the Sentencing Guide-
lines de novo. See United States v. Dawkins, 202 F.3d 711, 714 (4th
Cir. 2000); United States v. Parsons, 109 F.3d 1002, 1004 (4th Cir.
1997).
UNITED STATES v. MILLER 5
A.
Miller argues initially that precedent and the commentary to the
Sentencing Guidelines require, in cases like his, that courts use the
actual, rather than the intended, amount obtained through fraud to
compute loss for sentencing purposes. He maintains that the district
court erred, therefore, in using the amount he intended to obtain to
compute the loss attributable to his fraud. In support of this proposi-
tion, Miller cites language from Dawkins, Parsons, and U.S.S.G.
§ 2F1.1, application note 8(d). Miller misreads our precedent and note
8(d).
1.
Neither Parsons nor Dawkins addresses the actual rather than
intended loss question. Moreover, other circuit precedent makes clear
that a court may use intended, rather than just actual, loss in calculat-
ing the loss attributable to fraud for sentencing purposes.
Parsons, 109 F.3d at 1003, involved an employee of the United
States Postal Service convicted of mail fraud for submitting false
travel vouchers for cash advances or reimbursement. The vouchers
sought reimbursement for some nonexistent expenses, but also sought
reimbursement for some expenses legitimately incurred in the course
of business. Id. At sentencing, the district court held that the amount
of loss was the total amount claimed on the false vouchers. Id. We
vacated that determination because the district court had failed to sub-
tract legitimate expenses from the total amount of loss. Id. We
explained that "[l]oss is not the total amount of the benefits the defen-
dant received, because some benefits may be rightfully due; instead,
loss is measured by the amount diverted from proper purposes." Id.
at 1004.
In Dawkins, 202 F.3d at 712, a jury convicted another postal
worker of making false statements to obtain federal employee’s com-
pensation benefits. The district court found that the postal worker’s
false statements had disentitled him to any compensation benefits, and
that the loss, therefore, was the entire amount of benefits Dawkins
received as a result of his false statements. Id. at 714. We vacated,
holding that Parsons dictated that loss be calculated as "the difference
6 UNITED STATES v. MILLER
between the amount of benefits Dawkins actually received and the
amount he would have received had he truthfully and accurately com-
pleted the [benefits] forms." Id. at 715 (citing Parsons, 109 F.3d at
1004-05).
In this case, Miller focuses on our use of the phrase "benefits . . .
actually received" in Dawkins, id., and similar language in Parsons,
109 F.3d at 1004 ("tangible economic loss of the victim"), to argue
that the district court erred in using the loss he intended in calculating
the fraud loss amount. However, neither Parsons nor Dawkins
involved intended, but unrealized, losses. Unlike Miller, both Parsons
and Dawkins actually received the full amount of money that they
fraudulently claimed. Thus, Parsons and Dawkins simply hold that
when determining losses for sentencing purposes, a court must sub-
tract the amount of money or benefits to which a defendant is legiti-
mately entitled from the amount fraudulently claimed. In this case,
therefore, the district court properly applied Parsons and Dawkins
when it calculated the loss, subtracting the value of the services to
which Miller was actually entitled (i.e., the value of the services he
actually performed) from the amount that he billed.
Although neither Parsons nor Dawkins addresses the issue that
Miller raises — whether "loss" under the Sentencing Guidelines
includes intended loss, or merely actual loss — in other cases we have
squarely endorsed the use of intended loss rather than just actual loss.
In United States v. Wells, 163 F.3d 889 (4th Cir. 1998), for example,
we considered a mail fraud conviction involving fraudulent financial
instruments called "comptroller warrants." We upheld the district
court’s calculation of loss amount as including warrants in sealed
envelopes that had never been mailed to the addressees, finding that
the un-mailed warrants were properly included in the loss calculation
as an "intended loss." Id. at 900-01; see also United States v. Brothers
Constr. Co., 219 F.3d 300, 318 (4th Cir. 2000) ("[I]f an intended loss
that the defendant was attempting to inflict can be determined, this
figure will be used if it is greater than the actual loss.") (quoting
U.S.S.G. § 2Fl.1, cmt. n.[8]); United States v. Loayza, 107 F.3d 257,
266 (4th Cir. 1997) ("Where the ‘intended loss’ is greater than the
‘actual loss,’ the intended loss should be used."); United States v. Wil-
liams, 81 F.3d 1321, 1328 (4th Cir. 1996) ("Under the Guidelines, a
fraud ‘loss’ for sentencing purposes includes not just actual loss but
UNITED STATES v. MILLER 7
intended loss whenever the latter can be determined."). Indeed, even
Parsons recognizes that loss calculations may include, "actual, proba-
ble, or intended loss to the victims." 109 F.3d at 1004 (quoting United
States v. Marcus, 82 F.3d 606, 608 (4th Cir. 1996)).
Accordingly, the relevant case law provides no support for Miller’s
argument that the Guidelines limit loss to actual, rather than intended,
loss.
2.
Like the case law, application note 8 of U.S.S.G. § 2Fl.1, on which
Miller also relies for his actual loss argument, offers him little assis-
tance. The note generally provides that "if an intended loss that the
defendant was attempting to inflict can be determined, this figure will
be used if it is greater than the actual loss." U.S.S.G. § 2F1.1, cmt. n.8.1
Because the intended loss in Miller’s case exceeded the actual loss,
the note apparently requires use of the intended loss figure. Miller,
however, argues that in cases involving losses to government pro-
grams like Medicare and Medicaid, note 8(d) modifies the general
directive in note 8 to use intended loss whenever possible.
Note 8(d) states, "In a case involving diversion of government pro-
gram benefits, loss is the value of the benefits diverted from intended
recipients or uses." U.S.S.G. § 2F1.1, cmt. n.8(d). Miller maintains
that this subsection instructs courts to use only actual losses to gov-
ernment programs, rather than intended losses. In essence, Miller asks
us to read note 8(d) to mean: in a case involving diversion of public
program benefits, loss is the value of the benefits actually diverted,
rather than the value of the benefits intended to be diverted.
Assuming that the case at hand can properly be characterized as
one "involving diversion of government program benefits," id.; cf.
United States v. Nastasi, 2002 U.S. Dist. LEXIS 8765, at *8-11
1
Cf. Stinson v. United States, 508 U.S. 36, 38 (1993) (holding that
"commentary in the Guidelines Manual that interprets or explains a
guideline is authoritative unless it violates the Constitution or a federal
statute, or is inconsistent with, or a plainly erroneous reading of, that
guideline.").
8 UNITED STATES v. MILLER
(E.D.N.Y. Apr. 17, 2002), Miller makes the same error in interpreting
note 8(d), as he does in interpreting Dawkins and Parsons. Like those
cases, note 8(d) simply does not speak to the issue of whether courts
can use intended rather than actual loss, but instead deals with an
issue altogether different from the one to which Miller would have it
apply. Specifically, note 8(d) directs courts to include the diversion
of government program benefits as losses, even if the government
funds ultimately go to eligible recipients. In other words, in cases
involving government program benefits, loss is the value of the bene-
fits diverted, as opposed to merely the value of benefits that ulti-
mately end up in the hands of ineligible recipients, or are used for an
unauthorized purpose.
A sampling of cases applying note 8(d) illustrates this point. For
example, in Brothers, 219 F.3d at 304, we considered a fraud involv-
ing the distribution of federal highway funds. Federal regulations
require contractors, like the defendants in Brothers, to comply with
state programs fostering the development of "disadvantaged business
enterprises" ("DBEs"). Id. A jury convicted the Brothers Construction
Company of fraudulently representing that work done by a non-DBE
had been done by a DBE. Id. The Government uncovered this fraud
before the completion of the project, however, and the contractors
were able to change their sub-contracting arrangements, and ulti-
mately satisfy the DBE requirements. Id. at 317-18.
Relying on the same application note that Miller cites,2 the contrac-
tors argued that no loss could be attributed to their conduct because
the DBE requirements had ultimately been satisfied, and at no addi-
tional cost to the Government. Id. Thus, they maintained that no gov-
ernment funds had actually been diverted from their intended
recipients because the federal highway funds ultimately ended up in
the hands of a contractor that satisfied the DBE requirements. Id. We
rejected this argument, holding that the contractors’ intention to divert
the funds to a non-DBE was sufficient to establish a loss under the
U.S.S.G. § 2F1.1. Id. at 318 ("If an intended loss that the defendant
2
The numbering of the comments in earlier versions of the Sentencing
Guidelines differs from the numbering of the comments in the 2000 Sen-
tencing Guidelines which govern this case. The text of the notes dis-
cussed, however, is identical.
UNITED STATES v. MILLER 9
was attempting to inflict can be determined, this figure will be used
if it is greater than the actual loss.") (quoting U.S.S.G. § 2F1.1, cmt.
n.[8]).
Similarly, in United States v. Brown, 151 F.3d 476 (6th Cir. 1998),
the Sixth Circuit relied on the same note to reject Brown’s argument
that because his conduct had not resulted in any money being "unlaw-
fully taken," no "loss" had occurred. Id. at 489. Federal law required
Brown, an administrator of a Section 8 housing program, to place
applicants for benefits on a waiting list, and then select persons from
that waiting list in a particular order. Id. at 479. However, Brown
chose certain individuals out of order in exchange for bribes and other
consideration. Id. at 480. On appeal, Brown argued that the United
States Department of Housing and Urban Development had suffered
no loss as a result of his conduct because all persons selected for Sec-
tion 8 benefits were, in fact, qualified to receive those benefits. Id. at
489. The Sixth Circuit rejected this argument, holding that by choos-
ing persons out of order, "Brown diverted or attempted to divert funds
from the recipients contemplated by the application regulations." Id.;
see also United States v. Kosth, 257 F.3d 712, 722 (7th Cir. 2001);
United States v. Hayes, 242 F.3d 114, 120 n.4 (3d Cir. 2001).
Thus, these cases make clear that note 8(d) is not meant to distin-
guish actual loss of government program benefits from intended loss
of government program benefits, as Miller would have us read it.
Rather, note 8(d) clarifies that "loss" includes the amount of govern-
ment program benefits diverted from intended recipients or uses, even
if those funds are ultimately distributed to eligible recipients, or used
for an otherwise authorized purpose. Indeed, as in both Brothers and
Brown, when note 8(d) is read in conjunction with the general direc-
tive relating to intended losses, § 2F1.1 extends to situations in which
there may be no actual loss to the Government because the diverted
funds went to otherwise lawful recipients.
In sum, the district court did not err in interpreting "loss" under the
Sentencing Guidelines to encompass intended loss. Accordingly, we
reject Miller’s first argument.
B.
Alternatively, Miller contends that even if the district court prop-
erly interpreted "loss" to include "intended" loss, the Guidelines limit
10 UNITED STATES v. MILLER
"intended" loss to that which is likely or possible. Therefore, Miller
insists, the court erred in using the amount he billed to Medicare and
Medicaid, rather than the payments those programs allow, in estimat-
ing the amount of loss he intended because he "could not have any
reasonable expectation to be paid any monies beyond what the pro-
grams allow." Brief of Appellant at 23.
As an initial matter, we note that this argument finds some support
in case law from the Sixth and Tenth Circuits. For example, in United
States v. Santiago, 977 F.2d 517, 524 (10th Cir. 1992), the Tenth Cir-
cuit ruled that a defendant’s subjective intent should not control
"when the economic reality is that the probable or actual loss could
not in any circumstances have exceeded a discernible lesser amount."
Applying this reasoning, the court held that the maximum loss in an
automobile insurance fraud case was the $4,800 "blue book" value of
the car, not the full $11,000 amount submitted to the insurance com-
pany by the defendant. Id. at 525-26; see also United States v. Gal-
braith, 20 F.3d 1054, 1059 (10th Cir. 1994). The Sixth Circuit has
adopted a similar view, stating that "the intended loss must have been
possible to be deemed relevant." United States v. Watkins, 994 F.2d
1192, 1196 (6th Cir. 1993).
The majority of circuits in more recent cases, however, have
rejected this "economic reality" approach, holding that the Guidelines
permit courts to find intended loss in an amount exceeding that which
was in fact possible or probable. See, e.g., United States v. Edwards,
303 F.3d 606, 645 n.27 (5th Cir. 2002) ("[N]othing in § 2F1.1 n.[8]
requires that the defendant be capable of inflicting the loss he
intends."); United States v. Klisser, 190 F.3d 34, 35 (2d Cir. 1999)
(per curiam) (rejecting view taken in Galbraith); United States v.
Blitz, 151 F.3d 1002, 1010 (9th Cir. 1998) ("The fact that, due to con-
ditions beyond their control, the seed that defendants had so hopefully
sowed could never grow into a harvest crop has not affected our
determination of the intended loss itself."); United States v. Studevent,
116 F.3d 1559, 1563 (D.C. Cir. 1997) ("[I]ntended loss under applica-
tion note [8] to Guidelines section 2F1.1 is not limited to an amount
that was possible or likely."); United States v. Wai-Keung, 115 F.3d
874, 877 (11th Cir. 1997) ("It is not required that an intended loss be
realistically possible."); United States v. Coffman, 94 F.3d 330, 336
(7th Cir. 1996) (rejecting the argument "that a loss that cannot possi-
UNITED STATES v. MILLER 11
bly occur cannot be intended," and concluding that "the unlikelihood
of an actual loss does not affect the computation of the ‘intended
loss.’").
We adopt the majority view, and hold as a matter of law that the
Guidelines permit courts to use intended loss in calculating a defen-
dant’s sentence, even if this exceeds the amount of loss actually possi-
ble, or likely to occur, as a result of the defendant’s conduct. We find
the majority view more persuasive for several reasons.
First, that approach better accords with the text of note 8. The note
instructs: "Consistent with the provisions of § 2X1.1 (Attempt, Solici-
tation, or Conspiracy), if an intended loss that the defendant was
attempting to inflict can be determined, this figure will be used if it
is greater than the actual loss." U.S.S.G. § 2F1.1, cmt. n.8. As the
D.C. Circuit has observed, this note "does not qualify ‘intended loss’
in any way." Studevent, 116 F.3d at 1562. The plain language of the
note indicates that the Commission regarded a defendant’s intent as
the focal point of the guideline. Thus, neither the Guideline nor its
commentary contains any requirement that this intent be realistic. See
United States v. Robinson, 94 F.3d 1325, 1328 (9th Cir. 1996)
("There is nothing in note [8] that mandates that the defendant be
capable of inflicting the loss he intends."); Coffman, 94 F.3d at 336(noting that ‘economic reality’ approach "gives a twisted meaning to
the word ‘intended’").
Application note 11 to § 2F1.1 further counsels against reading "in-
tended loss" as limited to what is realistic or possible. Application
note 11 authorizes a downward departure "where a defendant
attempted to negotiate an instrument that was so obviously fraudulent
that no one would seriously consider honoring it." U.S.S.G. § 2F1.1,
cmt. n.11. "It would be unnecessary to authorize such a departure if
the unlikelihood of success already limited the intended loss attribut-
able to a defendant under application note [8]." Studevent, 116 F.3d
at 1563; see also United States v. Geevers, 226 F.3d 186, 196 (3d Cir.
2000) ("In light of the specific contemplation of impossibility in the
context of departures, grafting an impossibility exception on to the
setting of the offense level is inconsistent with the language and struc-
ture of the guidelines."); Coffman, 94 F.3d at 336 (concluding that the
12 UNITED STATES v. MILLER
argument "that a loss that cannot possibly occur cannot be intended
. . . is inconsistent with application note [11]").3
Furthermore, the majority view is more consistent with an impor-
tant principle underlying the Guidelines, namely matching punish-
ment with culpability. See U.S.S.G. ch. 1, pt. A(3) ("Congress sought
proportionality in sentencing through a system that imposes appropri-
ately different sentences for criminal conduct of differing severity.").
As one of our sister circuits has noted, "[l]imiting intended loss to that
which was likely or possible . . . would eliminate the distinction
between a defendant whose only ambition was to make some pocket
change and one who plotted a million-dollar fraud." Studevent, 116
F.3d at 1563; see also Coffman, 94 F.3d at 336 (noting that the ‘eco-
nomic reality’ approach "would, if accepted, irrationally erase any
distinction in the severity of punishment between a defendant who
tries to defraud his victim of $1,000 and a defendant who tries to
defraud his victim of $1,000,000").
Finally, although mindful of the pitfalls of using subsequent
amendments to interpret prior legislation, we note that the Sentencing
Commission has recently agreed that the majority interpretation of
§ 2F1.1 best conforms with the objectives of the Guidelines, and
amended the definition of loss to clarify this point. See U.S.S.G. supp.
to app. C at 185 (2001) ("The amendment resolves the [circuit] con-
flict to provide that intended loss includes unlikely or impossible
losses that are intended, because their inclusion better reflects the cul-
3
One observer has also suggested that the "economic reality" approach
adopted by the Sixth and Tenth Circuits, and recommended to us by Mil-
ler, flies in the face of broader legal principles. See Frank O. Bowman,
"Federal Economic Crime Sentencing Reforms: An Analysis and Legis-
lative History," 35 Ind. L. Rev. 5, 79 (2001) ("The Tenth Circuit was
apparently attempting to import into fraud sentencing a version of the
principles of criminal liability concerning mistake of fact, or perhaps the
doctrine of impossible attempts. Even if those principles have a place in
sentencing law, the Tenth Circuit does not appear to have applied them
properly to the facts of Santiago."); id. at 79-80 ("The Tenth Circuit’s
Galbraith opinion creates the arguably anomalous situation that a defen-
dant can be sentenced based on the amount of nonexistent narcotics he
attempted to buy from a government agent, but not on the amount of
money he attempted to swindle from the same agent.").
UNITED STATES v. MILLER 13
pability of the offender."). The commentary to the new guideline
states that intended loss, "(I) means the pecuniary harm that was
intended to result from the offense; and (II) includes intended pecuni-
ary harm that would have been impossible or unlikely to occur (e.g.
as in a government sting operation, or an insurance fraud in which the
claim exceeded the insured value)." U.S.S.G. § 2B1.1, cmt. n.2(A)(ii)
(2001).4
Thus, we adopt the position taken by the majority of circuits, and
hold that "intended loss" under U.S.S.G. § 2F1.1 (2000) is not limited
by the amount of loss that is actually possible or likely to occur as a
result of a defendant’s conduct. For this reason, we reject Miller’s
second legal argument.
III.
Finally, Miller maintains that the district court erred in estimating
the amount of the loss he intended. Specifically, Miller contends that
the court should not have calculated the amount of loss he intended
on the basis of the amount Miller billed to Medicare and Medicaid.
We review for clear error the district court’s factual determination
of the amount of loss Miller intended. Dawkins, 202 F.3d at 714; Par-
sons, 109 F.3d at 1004. In doing so, we recognize that "only a prepon-
derance of the evidence need support these factual findings." Loayza,
107 F.3d at 265. Moreover, "the loss need not be determined with pre-
cision. The court need only make a reasonable estimate of the loss,
given the available information." U.S.S.G. § 2F1.1, cmt. n.9.
The Third Circuit recently considered an argument very similar to
Miller’s in Geevers, 226 F.3d at 193. In that case, the defendant, con-
victed of bank fraud, contended that the district court erred in finding
that the relevant loss amount caused by his fraud was the total face
value of his fraudulent checks because "he could not have success-
fully withdrawn those funds even if he had wanted to." Id. at 189. The
court of appeals rejected this argument, reasoning that a sentencing
court may "draw inferences from the face value of . . . checks
4
Amendment 617 to the Sentencing Guidelines consolidated § 2F1.1
with § 2B1.1. See U.S.S.G. supp. to app. c amend. 617.
14 UNITED STATES v. MILLER
[$2,000,000] in arriving at the factual conclusion that the defendant
intended" losses in the face value amount, even though he only with-
drew $400,000. Id. at 193. Indeed, the court held that the prosecu-
tion’s introduction of evidence regarding the face value of the
defendant’s fraudulent checks constituted a "prima facie case" of
intended loss. Id.; see also United States v. Kushner, 305 F.3d 194,
197-98 (3d Cir. 2002); United States v. Hayes, 242 F.3d 114, 118 (3d
Cir. 2001). So it is in this case — the district court did not clearly err
in relying on the amount Miller billed Medicare and Medicaid as
prima facie evidence of the amount of loss he intended to cause.
The justification for this rule is clear. As anyone who has received
a bill well knows, the presumptive purpose of a bill is to notify the
recipient of the amount to be paid. Indeed, courts have recognized this
principle for well over a hundred years. See, e.g., First Nat’l Bank v.
Henry, 159 Ala. 367, 378 (1905) ("The loss is prima facie the amount
of the bill or note."); First Nat’l Bank v. Fourth Nat’l Bank, 77 N.Y.
320, 328 (1879) (same); see generally Restatement (Second) of Torts
§ 911 cmt. g (1979) ("Prima facie the present worth of a chose in
action calling for an unconditional payment of a sum of money is the
amount of the obligation."); 18 Am. Jur. 2d Conversion § 136 (2002)
("[W]here the instrument calls for the payment of money the owner
is presumed to be damaged to the extent of its face value, which,
prima facie, is its actual value.").
Of course, the amount billed does not constitute conclusive evi-
dence of intended loss; the parties may introduce additional evidence
to suggest that the amount billed either exaggerates or understates the
billing party’s intent. In the instant case, however, as in Geevers, 226
F.3d at 194, the defendant offered no evidence to rebut the Govern-
ment’s prima facie case.
Miller’s counsel did argue at sentencing that Miller intended to bill
Medicare and Medicaid only the amount set forth on the government-
established "fee schedule" as the price of a given medical service. See,
e.g., 42 U.S.C. § 1395w-4(a)(1) (West Supp. 2002) (providing that
doctors billing Medicare will only receive the lesser of either the
numerical price they include on the bill or "the amount determined
under the fee schedule" for the procedure they perform and thus guar-
anteeing that such providers will not receive more from such pro-
UNITED STATES v. MILLER 15
grams than the fixed price associated with the procedure they report
on the reimbursement form). If Miller had offered evidence on this
point (and similar evidence as to the other insurers he defrauded), he
might well have overcome the usual presumption that a "bill is a bill."
But Miller offered no such evidence. He did not testify that he was
aware of the Medicare or Medicaid fee schedules; nor did he proffer
any evidence to suggest that he knew the amount Medicare and Med-
icaid would pay; nor did he proffer any evidence that he was aware
of which patients were covered by Medicare or Medicaid — and
therefore subject to the fee schedules for these programs — rather
than by Workers’ Compensation or private insurers.
At oral argument, Miller’s counsel stated that "it would be fancy
to speculate that [Miller] did not know that he was not getting the full
amount [billed]." This statement misapprehends the standard under
which we review the district court’s factual findings and ignores the
common inference that the amount billed is the amount that is
intended to be paid. In essence, Miller asks us to assume that he knew
the limits on Medicare and Medicaid payments — although he never
testified to this fact — and that he chose to bill well above that
amount with no intention of receiving the amount billed — although
he never testified to this fact, much less suggested any alternative rea-
son for the billing amount.
Even if we were to assume, as Miller contends, that he did not have
any "reasonable expectation" of receiving the full amount billed, this
would not render the district court’s estimate clearly erroneous.
"[E]xpectation is not synonymous with intent when a criminal does
not know what he may expect to obtain, but intends to take what he
can." Geevers, 226 F.3d at 193. While Miller, like the defendant in
Geevers, "may not have expected to get it all, he could be presumed
to have wanted to." Id. In such situations, a sentencing court may rely
on the prosecution’s prima facie showing as "sufficient evidence" that
the face amount "was the intended loss." Id. at 194.
Finally, Miller’s argument ignores the fact that during the course
of his criminal activity, he defrauded Workers’ Compensation and
private insurers, as well as the Medicare and Medicaid programs.5
5
The district court did not include the loss to Workers’ Compensation
and private insurers in its estimate because these losses were too difficult
16 UNITED STATES v. MILLER
Here, again, Miller offers no evidence to suggest that he made distinc-
tions in billing between patients covered by Medicare and Medicaid
and patients covered by Workers’ Compensation or private insurers.
Indeed, the results of the presentence investigation suggest the con-
trary; it appears Miller engaged in similarly fraudulent billing prac-
tices regardless of the insurer. Miller does not argue that Workers’
Compensation and private insurers place the same limits on payment
as Medicare and Medicaid, and thus it would surely be reasonable for
a court to conclude that Miller intended to receive the full amount
billed to these insurers. Absent any evidence that Miller was aware
of which patients were covered by Medicare and Medicaid, and which
patients were covered by Workers’ Compensation or private insur-
ance, it was not clearly erroneous for the district court to find that
Miller intended losses in the amount he billed patients, irrespective of
their insurance coverage. In fact, it seems clear that the district court
properly followed the Sentencing Guidelines and made "a reasonable
estimate of the loss, given the available information." U.S.S.G.
§ 2F1.1, cmt. n.9.
Because Miller has failed to demonstrate that the district court’s
factual determination that he intended loss in the amount billed to
Medicare and Medicaid constituted clear error, we affirm the district
court’s determination of loss for sentencing purposes.6
to determine accurately. Similarly, the court ignored losses resulting
from Miller’s fraudulent practice of "upcoding," "phantom billing," and
submitting false diagnoses. However, the presentence investigation and
Miller’s $1.3 million settlement suggest that these losses were substan-
tial.
6
Miller also contends that the district court erred in denying his motion
for a downward departure because the court relied on a material mistake
of fact, i.e., that his guideline sentence range falls within Zone D, making
him ineligible for probation or a split sentence. Miller argues that this
was a clear error because in determining his guideline sentence range, the
court used a loss figure of between $73,000 and $76,000, rather than the
$22,000 to $35,000 figure Miller proposes. Given our conclusion that the
district court’s determination of the loss involved in this case was not
clearly erroneous, Miller’s argument concerning the denial of his motion
for downward departure must fail.
UNITED STATES v. MILLER 17
IV.
In sum, the district court correctly interpreted "loss" under the Sen-
tencing Guidelines and did not clearly err in it factual findings as to
the amount of loss in this case.
AFFIRMED