United States v. Enitan Isiwele ( 2011 )

REVISED MARCH 23, 2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 7, 2011
No. 10-40347 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
ENITAN OSAGIE ISIWELE,
Defendant – Appellant
Appeal from the United States District Court
for the Eastern District of Texas
Before KING, DeMOSS, and PRADO, Circuit Judges.
KING, Circuit Judge:
Defendant–Appellant Enitan Isiwele was convicted on multiple counts of
health care fraud and conspiracy to pay kickbacks in connection with a scheme
to fraudulently bill Medicare/Medicaid for power wheelchairs. In this appeal,
Isiwele challenges the exclusion of certain prior inconsistent statements of
witnesses at trial as well as various aspects of his sentence. We affirm the
judgment of conviction. We vacate Isiwele’s sentence; the district court correctly
applied the “mass marketing” and “abuse of trust” sentencing enhancements, but
the court’s method for determining the “loss amount” attributable to the fraud
requires clarification.
No. 10-40347
BACKGROUND
Appellant Enitan Isiwele was the owner of a durable medical equipment
(“DME”) supply company called Galaxy Medical Supply (“Galaxy”), which was
a supplier to both Medicare and Medicaid. DME includes power wheelchairs.
Medicare rules relating to power wheelchairs provide that a beneficiary must
first obtain a prescription from a physician who determines that the beneficiary
cannot use a cane, walker, rollator, or manual wheelchair. Upon submission of
such a prescription to a DME supplier, the supplier must complete a Certificate
of Medical Necessity, to be signed by the physician and then sent together with
the prescription to Medicare. Medicare then reimburses the supplier for the
power wheelchair. Medicaid’s procedures for DME reimbursement are similar
to Medicare’s.
In an effort to meet urgent medical needs in the wake of Hurricanes
Katrina and Rita, Medicare eliminated these documentary requirements for the
replacement of any power wheelchairs lost or damaged in those hurricanes. This
waiver applied only to beneficiaries who had already met the requirements for
a doctor’s prescription and Certificate of Medical Necessity before obtaining their
original power wheelchairs. Galaxy used this waiver to bill Medicare and
Medicaid a total of $587,382.65 for power wheelchairs and related accessories,
and was reimbursed a total of $297,381.04.
Isiwele was tried on sixteen counts of health care fraud, in violation of 18
U.S.C. § 1347, and one count of conspiracy to pay illegal remunerations, in
violation of 42 U.S.C. § 1320a-7b(b)(2)(A). The indictment alleged that Isiwele
instructed a “recruiter,” Linda Patterson, to go into elderly and low-income
communities and gather billing information from Medicare/Medicaid
beneficiaries. Isiwele paid Patterson for this information, which he then used
to claim reimbursement from Medicare/Medicaid under the new hurricane
exception for power wheelchairs provided to these beneficiaries. At trial, the
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government presented testimony from Patterson, as well as from eleven such
beneficiaries who testified that they did not need a power wheelchair and never
had a power wheelchair prior to Hurricanes Katrina or Rita, much less one that
was damaged in those hurricanes. The jury found Isiwele guilty on all counts.
At sentencing, the district court applied a fourteen-level increase to
Isiwele’s base offense level on the basis of the “loss amount” occasioned by
Isiwele’s fraud. The court calculated the loss amount according to the amount
that Isiwele billed to Medicare/Medicaid. Isiwele objected, arguing that the
proper loss amount was the total of the fixed allowances paid for the wheelchairs
by Medicare/Medicaid. The district court also applied a two-level increase to
Isiwele’s offense level for the use of “mass marketing” in committing the offenses
and another two-level increase for an “abuse of trust” based on Isiwele’s status
as a DME supplier to Medicare/Medicaid. Isiwele was sentenced to 97 months’
imprisonment and three years of supervised release, and was ordered to pay a
$1,700 special assessment and restitution in the amount of $201,397.34. He now
appeals his conviction and sentence.
ANALYSIS
I. Exclusion of Prior Inconsistent Statements
Isiwele claims that the district court erred in excluding three documents
offered as prior inconsistent statements of three different witnesses. We review
a district court’s evidentiary rulings for abuse of discretion, subject to harmless
error review. United States v. Jackson, 625 F.3d 875, 879 (5th Cir. 2010).
Federal Rule of Evidence 613 provides that a witness may be impeached
with a prior inconsistent statement. See United States v. Watkins, 591 F.3d 780,
787 (5th Cir. 2009) (“It is well established that after a witness denies making a
statement during cross examination, evidence may be introduced to prove the
statement was made.” (citations omitted)). However, Federal Rule of Evidence
901(a) requires, as a preliminary matter, that all evidence be properly
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authenticated as a condition precedent to admission. The proponent bears the
burden of introducing “evidence sufficient to support a finding that the matter
in question is what its proponent claims.” FED R. EVID. 901(a); see 5 JACK B.
WEINSTEIN & MARGARET A. BERGER, WEINSTEIN’S FEDERAL EVIDENCE § 901.02[3],
at 901-14 (Joseph M. McLaughlin ed., 2d ed. 2010) [hereinafter “WEINSTEIN”].
“The requirement of showing authenticity falls in the category of ‘relevancy
dependent upon fulfillment of a condition of fact and is governed by the
procedure set forth in Rule 104(b).’ ” 5 WEINSTEIN § 901.02[3], at 901-15 (quoting
FED. R. EVID. 901 Advisory Committee Note (1972)). “Under Rule 104(b), the
trial court must admit the evidence if sufficient proof has been introduced so
that a reasonable juror could find in favor of authenticity or identification.” Id.
The prior inconsistent statements at issue here are three documents, each
entitled “Request for Replacement of DME Lost in Hurricane” and purportedly
signed by one of three beneficiaries—Leroy Bass, Marion DeGutis, and James
Brady—who were government witnesses at trial. The documents were on
Galaxy letterhead and stated:
I, [name of beneficiary/witness], hereby request the services of
Galaxy Medical Supply, LLC to assist me in obtaining a
replacement for my equipment, a(an) POWERCHAIR, which was
lost in [H]urricane RITA.
By signing the attached Release of Information and Authorization
for Payment of Benefits Form, I hereby declare that the said
equipment was lost as a direct result of the hurricane and authorize
us [sic] to take necessary action to assist me in securing the
replacement equipment.
On cross examination, each of the three witnesses identified his or her
signature on one of these documents, but testified in direct contravention of its
contents that they had not previously owned power wheelchairs that were lost
in Hurricane Rita. Bass testified that he signed a paper that Isiwele gave him
to sign, without looking at it. When shown the statement at trial, Bass said that
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No. 10-40347
he did not know what the document was, that he did not know “how [his
signature] got there,” and surmised that “[i]t could have been under something
else and I signed and you got my name under there.” DeGutis testified that the
signature on the document bearing her name looked like her signature, but said
the contents of the documents were not true. Brady identified his signature, but
stated at trial that he “didn’t read the documents” and disagreed with the
contents.1 The district court refused to admit these documents into evidence on
the ground that they had not been properly authenticated because the witnesses
did not absolutely adopt the substance of the documents.
“[W]e do not require conclusive proof of authenticity before allowing the
admission of disputed evidence.” Watkins, 591 F.3d at 787. Rule 901(a) “merely
requires some evidence which is sufficient to support a finding that the evidence
in question is what its proponent claims it to be.” Id. “Once the proponent has
made the requisite showing, the trial court should admit the exhibit . . . in spite
of any issues the opponent has raised about flaws in the authentication. Such
flaws go to the weight of the evidence instead of its admissibility.” 5 WEINSTEIN
§ 901.02[3], at 901-17.
In United States v. Whittington, 783 F.2d 1210 (5th Cir. 1986), we held
that “[p]roof that a document has been signed is sufficient to charge a signatory
with its contents.” Id. at 1215 (citing 7 J. WIGMORE, EVIDENCE § 2134, at 719 &
n.2 (Chadbourn rev. 1978)). In Whittington, the defendants challenged a
contract bearing their signatures on the grounds that there was no evidence that
any part of the document other than the signature page was the same as the
document they originally signed, and that they never intended the contract to
have any legal effect. Id. at 1214–15. In holding that the document was
1
It is unclear from the transcript whether Brady meant that he did not read the
document while on the stand, or whether he did not read the document before he signed it.
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No. 10-40347
sufficiently identified as authentic by identification of its signature page, we
stated:
A decision that a document is authentic and, therefore, admissible
does not determine whether the evidence will be credited by the
trier of fact. The opponent may then question whether the
challenged document is the same or different from the one originally
signed. As Weinstein’s Evidence states, “Once the evidence is
admitted the question becomes one of credibility and probative force
and the trier may ultimately disbelieve the proponent’s proof and
entirely disregard or substantially discount the persuasive impact
of the evidence admitted.”
Id. at 1215 (quoting J. WEINSTEIN & M. BERGER, WEINSTEIN’S EVIDENCE
¶ 901(a)[01], at 16–17 (1985)). After the district court admitted the contract on
the basis of evidence sufficient to authenticate it—the defendants’ signatures on
the signature page—it became the separate role of the trier of fact to “make an
ultimate determination of its genuineness, including whether the entire
document was sufficiently identified as the one signed by [the defendants].” Id.;
see also Proctor v. Colonial Refrigerated Transp., Inc., 494 F.2d 89, 93 (4th Cir.
1974) (holding that, “[w]ith the authenticity of the signature admitted, [a]
statement was proper impeachment material” where a witness identified his
signature on a statement but testified at trial that he could not remember giving
the statement and denied certain portions of it).
The government argues that the single fact of the witnesses’ signatures
was insufficient to establish the authenticity of the documents, given the other
circumstances relevant to their authenticity. The government points to the fact
that the witnesses in question are elderly and/or mentally infirm; that Isiwele’s
co-defendant, the recruiter Linda Patterson, testified that she never saw such
documents and that Isiwele was never concerned about whether beneficiaries
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No. 10-40347
were replacing wheelchairs lost in a hurricane; and that the circumstances
surrounding the discovery and production of the documents were suspicious.2
However, these arguments properly go to the weight of the evidence, not
to its authenticity. Once the signatures were authenticated, the district court
should have admitted the documents and allowed the government to present
these arguments to the jury to show that the testimony of Bass, DeGutis, and
Brady at trial should be believed rather than the impeaching statements they
allegedly signed. Accord Whittington, 783 F.2d at 1215 (“The defendants had
ample opportunity to challenge the identity of the remainder of the document,
to show how it came to be signed (as they did, at length), and to urge that,
although signed, it was not intended to have legal effect.”).
Having concluded that the exclusion of the documents was an abuse of
discretion, we turn now to whether this error was harmless beyond a reasonable
doubt. See Jackson, 625 F.3d at 885. Notably, Isiwele argued below only that
the documents should be admitted as prior inconsistent statements for the
purpose of impeachment. Therefore, if the documents had been admitted, the
jury could have considered them only for the purposes of impeachment of Bass,
DeGutis, and Brady, not as evidence that those witnesses had lost power
wheelchairs in Hurricane Rita and that Medicare reimbursement for their
wheelchairs was thus appropriate. See Watkins, 591 F.3d at 787.
Bass was eighty-three years old at the time of trial. He testified that in
2006, Isiwele phoned him and told him that he had won a wheelchair that would
be delivered to Bass’s home. When Isiwele arrived at Bass’s home, he put the
wheelchair together and gave him “some paper and told [Bass] to sign [his] name
on it,” which Bass did. Bass then put the wheelchair in storage. Bass testified
that he did not need a wheelchair, nor did he want one. He further testified that
2
The documents were provided to the government the morning of the trial with no
explanation as to why they were not produced earlier.
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No. 10-40347
he had not been affected by Hurricanes Katrina or Rita, and that he never asked
anybody to replace a wheelchair damaged by those hurricanes. He also testified
that it would be impossible to use a wheelchair on his property because he had
no ramp or concrete sidewalks, his house was situated on a hill, and the
wheelchair would not even fit through the doorway of his home.
Ninety-two-year-old Marion DeGutis testified that she did not need a
power wheelchair and never had one previously. She was approached by a
woman who asked her if she wanted a wheelchair. DeGutis, who used a cane,
said no. Despite declining the offer, DeGutis received a wheelchair, which she
never used. DeGutis did not recall signing any documents at the time the
wheelchair was delivered, and noted that the signature on the delivery notice
was not in her handwriting and that her name had been misspelled.
James Brady was a man suffering from slight mental retardation and
severe diabetes. Nevertheless, he was ambulatory and testified that he did not
need a wheelchair and had never had a power wheelchair before. He testified
that he just “went along with the group” of his neighbors who all received power
wheelchairs.
The circumstances under which the documents were allegedly
signed—including the advanced age of these witnesses and Brady’s slight mental
retardation—raise the inference that the declarants were misled or confused
about what they were signing, and/or did not read the statements before signing
them. The impeaching statements would also have been weighed against the
clear and adamant testimony of these witnesses at trial that they neither needed
nor ever had power wheelchairs, testimony that was repeated by all the other
beneficiaries in the case.
The jury also heard corroborating testimony from Linda Patterson, the
recruiter, who testified that she could not recall ever seeing any kind of form like
the documents in question, that she had never asked beneficiaries if they were
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No. 10-40347
replacing wheelchairs damaged or lost in a hurricane, and that Isiwele never
seemed concerned about whether the beneficiaries were replacing DME lost in
a hurricane. This testimony was significant in light of the fact that all of the
beneficiaries testified that they were approached by a lone woman (some of them
remembered her name as “Linda”), and that Isiwele had not been the person who
recruited them for receiving power wheelchairs or gathered their
Medicare/Medicaid information.
Based on the evidence described above, we conclude that even if the
documents had been admitted, the jury would have found beyond a reasonable
doubt that Isiwele was guilty of filing fraudulent claims for reimbursement of
power wheelchairs for Bass, DeGutis, and Brady. The error in excluding the
forms was therefore harmless.
II. Calculation of Loss Amount
The amount of loss resulting from the fraud is a specific offense
characteristic that increases the base offense level under the U.S. Sentencing
Guidelines. U.S.S.G. § 2B1.1(b)(1) (2010). “Loss” is defined in the commentary
to § 2B1.1 as “the greater of actual loss or intended loss.” Id. cmt. n.3(A).
“Intended loss” includes “intended pecuniary 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).” Id. cmt.
n.3(A)(ii). We review de novo the district court’s method of determining loss,
while clear error review applies to the background factual findings that
determine whether or not a particular method is appropriate. United States v.
Harris, 597 F.3d 242, 251 n.9 (5th Cir. 2010).
The district court determined the loss amount in this case to be
$587,382.65. In making this determination, the district court measured the
amount of intended loss by the amount that Isiwele billed to Medicare/Medicaid,
rather than the lower amount that Medicare/Medicaid allowed and paid for the
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No. 10-40347
wheelchairs. On appeal, Isiwele challenges this method as overstating the loss
amount because Medicare/Medicaid has a fixed fee schedule for DME and does
not reimburse a supplier for any amount billed over those fixed allowances. He
alleges that he knew he would receive these lower capped amounts, and that he
therefore did not have the subjective intent to cause a loss equal to the amount
he billed.
Our cases have endorsed a fact-specific, case-by-case inquiry into the
defendant’s intent in determining “intended loss” for sentencing purposes.
“Although it may be theoretically possible to intend a loss that is greater than
the potential actual loss, our case law requires the government [to] prove by a
preponderance of the evidence that the defendant had the subjective intent to
cause the loss that is used to calculate his offense level.” United States v.
Sanders, 343 F.3d 511, 527 (5th Cir. 2003). We now explicitly apply this
standard to the health care fraud context, adopting the approach taken by the
Fourth Circuit in United States v. Miller, 316 F.3d 495 (4th Cir. 2003): the
amount fraudulently billed to Medicare/Medicaid is “prima facie evidence of the
amount of loss [the defendant] intended to cause,” but “the amount billed does
not constitute conclusive evidence of intended loss; the parties may introduce
additional evidence to suggest that the amount billed either exaggerates or
understates the billing party’s intent.” Id. at 504; see also United States v.
Hearne, Nos. 09-60613, 09-60750, 2010 WL 4116663, at *1–2 (5th Cir. Oct. 20,
2010) (considering evidence that the defendant lacked knowledge of the billing
procedures for Medicare and therefore did not understand the amounts that
Medicare likely would pay); United States v. Singh, 390 F.3d 168, 193–94 (2d
Cir. 2004) (remanding for resentencing in order to give the defendant an
opportunity to show that the total amount he expected to receive was less than
the amount he actually billed to Medicare/Medicaid).
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No. 10-40347
A close reading of the record below leaves us uncertain as to what the
district court understood the law to be.3 There is some evidence in the record on
the basis of which the court could have concluded that Isiwele intended to
receive only the lower capped amount.4 However, the determination of the
factual predicate for Isiwele’s sentence is best made by the district court in the
first instance. We remand for resentencing on this issue consistent with the
standard set forth above. The district court may take additional evidence if it
deems it necessary.
III. Mass Marketing Enhancement
U.S.S.G. § 2B1.1(b)(2)(A)(ii) provides for a two-level enhancement “[i]f the
offense . . . was committed through mass-marketing.” The commentary to
§ 2B1.1 defines “mass-marketing” as “a plan, program, promotion, or campaign
that is conducted through solicitation by telephone, mail, the Internet, or other
means to induce a large number of persons to (i) purchase goods or services; (ii)
participate in a contest or sweepstakes; or (iii) invest for financial profit.” Id.
cmt. n.4(A). Mass marketing is not limited to the mass communication methods
listed in the commentary; the definition “explicitly contemplates ‘other means’
of mass-marketing.” United States v. Magnuson, 307 F.3d 333, 335 (5th Cir.
3
Our uncertainty is exacerbated by the fact that the government cited two inapposite
cases to the district court during the sentencing proceeding in support of its position that the
intended loss amount should be measured by the higher billed amount. See United States v.
McLemore, 200 F. App’x 342, 344 n.1 (5th Cir. 2006) (specifically noting that the defendant in
that case abandoned this issue on appeal); United States v. Brown, 354 F. App’x 216 (5th Cir.
2009) (never explicitly mentioning this issue at all). Furthermore, in discussing Isiwele’s
objection to the calculation of the loss amount, the Presentence Investigation Report focused
on the inapposite Guidelines comment that “[t]he court shall use the gain that resulted from
the offense as an alternative measure of loss only if there is a loss but it reasonably cannot be
determined,” U.S.S.G. 2B1.1 cmt. n.3(B), without actually addressing Isiwele’s intent in this
case.
4
For example, Stephen Ward, a witness for the government, testified during the trial
that “[w]hen you agree to participate in the Medicare program and provide services, you’re
agreeing to a set fee schedule for whatever the services are that you’re providing.” The record
reflects that Isiwele was a Medicare and Medicaid supplier.
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No. 10-40347
2002) (per curiam). Among these “other means” of mass marketing is face-to-
face marketing intended to reach a large number of persons. See United States
v. Jackson, 220 F. App’x 317, 331–32 (5th Cir. 2007).
On appeal, Isiwele argues that a mass marketing enhancement should not
apply because his mass marketing efforts were not directed at the victims of the
crime—here, Medicare/Medicaid. This ground for objection is different from that
which Isiwele raised during the sentencing hearing; consequently, the plain
error standard of review applies. See United States v. Medina–Anicacio, 325
F.3d 638, 643 (5th Cir. 2003). Under plain error review, the appellant must
show that there was a clear and obvious error that affected his substantial
rights. United States v. Andina–Ortega, 608 F.3d 305, 309 (5th Cir. 2010). If
these conditions are met, the court may exercise its discretion to correct the
error if it “seriously affect[s] the fairness, integrity or public reputation of
judicial proceedings.” Id. (citation and internal quotation marks omitted).
Isiwele relies on an Eighth Circuit opinion, United States v. Miller, 588
F.3d 560 (8th Cir. 2009), in support of his argument that the mass marketing
enhancement does not apply when the marketing is not directed at the victims.
In Miller, the defendant was convicted of various offenses related to defrauding
financial institutions through a mortgage fraud scheme. Id. at 562–63. The
defendant used television commercials to recruit borrowers to apply for
mortgages, which the defendant then sold to lenders by misrepresenting the
borrowers’ qualifications and property values. Id. at 562–63. The Eighth Circuit
found no error in the district court’s conclusion that the enhancement did not
apply because “[t]he crime was the fraud that was committed on the lenders”
and “there was no[ ] mass marketing involved in that . . . .” Id. at 568 (alteration
in original).
We find more persuasive our own recent decision in United States v.
Mauskar, 557 F.3d 219 (5th Cir. 2009), in which we upheld the application of the
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No. 10-40347
mass marketing enhancement to a physician who conspired to defraud
Medicare/Medicaid by falsely certifying that ambulatory patients needed power
wheelchairs. In Mauskar, “recruiters” targeted elderly beneficiaries to escort to
the defendant’s clinic for evaluations, and DME suppliers used the false
Certificates of Medical Necessity supplied by the defendant to obtain payment
from Medicare/Medicaid for medically unnecessary wheelchairs for thousands
of beneficiaries. Id. at 224. The defendant objected to the mass marketing
enhancement on the grounds that there was no evidence that he was personally
involved in the mass marketing. Id. at 232–33.
While this argument is different from Isiwele’s argument on appeal that
the mass marketing was not directed at the victims of the fraud, the reasoning
in Mauskar is instructive in upholding the enhancement here:
The plain language of the Guidelines forecloses Mauskar’s argument
that the mass-marketing enhancement does not apply to his
conduct. The mass-marketing enhancement is applicable if an
“offense . . . was committed through mass-marketing.” U.S.S.G. §
2B1.1(b)(2)(A)(ii). “ ‘Offense’ means the offense of conviction and all
relevant conduct under § 1B1.3 (Relevant Conduct) unless a
different meaning is specified or is otherwise clear from the
context.” U.S.S.G. § 1B1.1 cmt. n.1(H). And “in the case of a jointly
undertaken criminal activity,” relevant conduct includes “all
reasonably foreseeable acts and omissions of others in furtherance
of the jointly undertaken criminal activity.” U.S.S.G.
§ 1B1.3(a)(1)(B).
Id. at 233 (alteration in original).
Implicit in the Mauskar court’s holding is the determination that the mass
marketing efforts of the recruiters who escorted beneficiaries to the defendant’s
medical clinic was “relevant conduct” constituting part of the “offense” of health
care fraud, such that the mass marketing enhancement applied to the recruiters’
co-defendant. We explicitly adopt that reasoning today in holding that the
district court did not err in finding Isiwele eligible for the mass marketing
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enhancement on the basis of Patterson’s face-to-face recruitment of
Medicare/Medicaid beneficiaries.
IV. “Abuse of Trust” Enhancement
Pursuant to clear Fifth Circuit precedent, the district court applied a
two-level “abuse of trust” enhancement to Isiwele’s offense level under U.S.S.G.
§ 3B1.3 because Isiwele’s status as a DME supplier placed him in a relationship
of trust with Medicare/Medicaid. See United States v. Miller, 607 F.3d 144,
148–50 (5th Cir. 2010). Isiwele argues that he was not in a relationship of trust
with Medicare/Medicaid solely to preserve the argument for further review. We
therefore summarily affirm this enhancement.
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of conviction of the
district court. We VACATE Isiwele’s sentence and REMAND for resentencing
as to the loss amount.
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