United States v. Robert Read , 710 F.3d 219 ( 2012 )

Case: 11-40643 Document: 00512042273 Page: 1 Date Filed: 11/02/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 2, 2012
No. 11-40643 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA
Plaintiff-Appellee
v.
ROBERT EARL READ; CLAUDETTE READ,
Defendants-Appellants
Appeals from the United States District Court
for the Eastern District of Texas
USDC No. 1:09-CR-40-2
Before KING, SMITH, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Defendants-Appellants Robert Earl Read and Claudette Read were
convicted on one count of conspiracy to commit health care fraud and twenty
counts of mail fraud. They appeal their convictions, sentences, and restitution
orders. For the reasons that follow, we AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
The grand jury charged Defendants-Appellants Claudette Read and her
husband, Robert Earl Read, with mail fraud, health care fraud, and conspiracy
*
Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set forth in 5TH
CIRCUIT RULE 47.5.4.
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to commit health care fraud, alleging that the Reads had submitted fraudulent
Medicare, Medicaid, and Blue Cross Blue Shield (“BCBS”) claims through their
ambulance business. The grand jury later returned a superseding indictment,
charging the Reads with one count of conspiracy to commit health care fraud,
thirty-two counts of health care fraud and aiding and abetting, forty-two counts
of mail fraud and aiding and abetting, and eight counts of aggravated identity
theft and aiding and abetting. 18 U.S.C. §§ 2, 371, 1028A, 1341, 1347. The
superseding indictment included a criminal forfeiture notice as to the alleged
gross proceeds from the charged fraudulent scheme. Id. § 982(a)(1), (a)(7).
The Reads owned Priority One—a Jasper, Texas-based company that
provided, inter alia, non-emergency ambulance transport services to dialysis
patients. The government alleged that between 2004 and 2007, the Reads
fraudulently represented to Medicare, Medicaid, and BCBS that patients
Priority One had taken to dialysis appointments required ambulance transport.
At trial, several witnesses testified as to Medicare, Medicaid, and BCBS
reimbursement policies. Medicare covers non-emergency ambulance transport
if a “medical necessity” exists: (1) The beneficiary is bed-confined, and his or her
medical condition precludes other means of transport; or (2) the beneficiary’s
medical condition, regardless of bed confinement, necessitates ambulance
transport. 42 C.F.R. § 410.40(d)(1). A beneficiary is “bed-confined” if he or she
cannot get up from bed without assistance, is unable to walk, or is unable to sit
in a chair or wheelchair. Id. Patients who can sit in a wheelchair can travel by
car or wheelchair van unless their medical condition requires ambulance
transport. If Medicare pays a “crossover claim,” Medicaid automatically pays the
Medicare co-pay and deductible. BCBS’s reimbursement policies are based on
Medicare’s policies. If Medicare pays or rejects a claim, BCBS “follow[s] suit.”
Medicare covers non-emergency, scheduled, repetitive ambulance
transport—the type of transport at issue here—if the ambulance provider
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obtains a certificate of medical necessity (“CMN”) from the beneficiary’s
physician. Id. § 410.40(d)(2). A CMN provides certification that the “medical
necessity” requirement has been satisfied, and must be no older than sixty days
at the time of transport. Id. A CMN does not permit reimbursement for an
ambulance run that is not medically necessary. Id. If a provider submits a claim
that includes any non-covered service, the provider must indicate this by
including a specified code on the claim form. The provider must also inform
Medicare of “double transports” because, although Medicare covers eighty
percent of the ambulance charge for a patient being transported singly, it covers
only seventy-five percent of each ambulance charge for two patients being
transported together. If a trip is a “courtesy transport” for which reimbursement
is not sought, this must be indicated on the claim form.
The jury found the Reads guilty on the conspiracy charge and twenty of
the mail fraud charges. The mail fraud convictions involved fraud on Medicare
and Medicaid, but not BCBS, and related to only four of the fifteen patients
identified in the superseding indictment: Cleveland L. Casey, Mattie Lewis,
Patsy R. Hogg, and Mary A. Pool. At the nine-day trial, the government offered
evidence and testimony respecting Priority One’s general business practices, as
well as its practices as to specific patients.
Tina Welch, a Medicare claims processor employee, testified as to
Medicare regulations governing ambulance service providers, including the
requirement not knowingly or recklessly to submit false claims. The government
offered into evidence Priority One’s Medicare provider application form, by
which Claudette Read certified on Priority One’s behalf that it would abide by
Medicare laws and regulations. Welch and others testified that government
health care programs rely on service providers to submit truthful claims because
these programs do not have the resources to verify every claim.
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Former Priority One emergency medical technicians (EMTs) testified that
they were required to fill out “run sheets”—forms submitted to Medicare that
provide information on ambulance transportees. Claudette Read instructed the
EMTs to omit certain information from the run sheets, including whether
transportees could sit in a wheelchair or walk, and she returned to EMTs any
run sheet that included the word “wheelchair” so that it could be rewritten.
Multiple supervisors in Priority One directed EMTs to omit information that
would cause Medicare to deny payment. After Robert Read took over one
supervisor’s responsibilities, he did not instruct EMTs to change how they
completed run sheets. At one point, Robert Read told an EMT that “it did not
matter how [a patient] got to the stretcher [(e.g., walking, in a wheelchair, or
carried)]. . . . Medicare didn’t care.” Two witnesses testified that Claudette had
learned at a seminar that any claim that included the word “wheelchair” would
not be paid. The EMTs routinely picked up patients who could walk or use
wheelchairs.
Although many EMTs admitted on cross-examination that, as non-doctors,
they could not assess with absolute certainty whether a patient had a “medical
necessity” for ambulance transport, doctors and nurses of Priority One patients
testified that no medical necessity existed as to these patients. One EMT
testified that she noticed run sheets were being altered to include “the right
check boxes,” instead of attachments being appended to them. Further, the
Reads had doctors pre-sign CMNs that Priority One employees later filled out.
The government offered evidence and testimony as to the four dialysis
patients involved in the substantive counts of conviction. Although Patsy Hogg
and Mary Pool were transported together 537 times, each of these runs was
billed as two “single transports.” Cleveland Casey and Mattie Lewis were
transported together on thirty-nine runs, which were also billed as single
transports. Run sheets showed that Robert Read drove the ambulance on six of
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Hogg and Pool’s double transports. The government further presented evidence
that, regardless of single or double transporting, none of these four patients
qualified for ambulance reimbursement.
Mattie Lewis did not require a wheelchair, and routinely rode in the front
seat of the ambulance transporting her. Before Priority One began transporting
her, she was taken to dialysis appointments in the dialysis center’s van.
Although there was some concern that Lewis required an ambulance because she
suffered from dementia and had become violent on previous occasions, she took
medication for this condition, and Priority One EMTs uniformly testified that
she had never presented any difficulties in this regard. Indeed, several months
after Priority One began to transport her, EMTs were directed to move her from
the back of their ambulances to the front seat. The employee who evaluated
Lewis so that Robert Read could decide whether to transport her testified that
aggression was not his concern. Rather, his only concern was having someone
present to help her in moments of confusion. On occasion, Robert Read even
called on this employee to take her to appointments in a personal vehicle.
Cleveland Casey was paralyzed on his left side, but could nonetheless
propel himself in a wheelchair. His nursing home took him to dialysis
appointments in a wheelchair van before Priority One began transporting him.
Further, several EMTs testified that Casey could have been transported by
wheelchair van using an upper-body restraint to keep him secure. When Robert
Read asked an employee to transport Casey in a personal vehicle, an attendant
sat next to him to ensure that he stayed upright.
Like Mattie Lewis, Mary Pool often rode in the front of Priority One
ambulances. She also used a wheelchair, and had been transported by
wheelchair van in the past. EMTs and Pool’s nurse testified that she could have
ridden in a wheelchair van.
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Patsy Hogg was also in a wheelchair when EMTs picked her up. Her
doctor testified that she did not normally meet Medicare’s requirements for
ambulance transport, and could even walk on occasion. The government
presented documentation confirming this assessment.
The government presented evidence that no claim set out in the
superseding indictment—including those related to the eleven patients not
involved in the substantive counts of conviction—qualified for reimbursement
in the amounts billed. Department of Health and Human Services investigator
Joel Dan McQueen testified that after reviewing eighty boxes of documents
seized from Priority One, he determined that Priority One had omitted material
information that would have prevented payment. Tina Welch examined each
Medicare claim for which the Reads were charged, and testified that none of
them qualified for reimbursement in the amounts billed. Texas Medicaid
employee Patricia Cannizzaro testified that the Medicaid claims in the
superseding indictment involved “crossover claims” that Medicaid paid
automatically if approved by Medicare. BCBS investigator Marjorie Poche
testified that the BCBS claims in the superseding indictment lacked material
information that would have caused denial of payment.
The jury also heard testimony as to the Reads’ mental states. Government
investigators seized from Priority One’s headquarters a book of Medicare billing
regulations that had been highlighted, written in, and bookmarked. Scott
Zimmerman, a senior manager at Priority One, testified that Robert Read’s
“main concern” with the company’s office in Center, Texas, was “to make sure
that it made money so that it could stay in existence.” As for his management
style, “it was Robert’s way or the highway.” When one EMT raised concerns
about seeking reimbursement for Mattie Lewis’s and Cleveland Casey’s
transports, Robert Read became “pretty upset,” and told him he “could find
another job.” Another EMT testified that Robert Read told her it was legal to
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transport a patient in an ambulance’s front seat, even though it clearly was not.
When an EMT suggested to Claudette Read that transporting one of the patients
by ambulance was improper, she responded that Priority One would not be
audited because the government was “after the big fish, not the little people.”
She also said that if Priority One overbilled, the government would permit them
to pay the money back. Tina Welch testified that Priority One had received
letters on three occasions stating that it had overutilized non-emergency
ambulance transport for dialysis patients. The Reads did not respond to these
letters.
In his defense, Robert Read testified that his subordinates had been
responsible for any illegal or apparently illegal conduct at Priority One. The
Reads called a former Priority One EMT who testified that the patients she
transported required ambulance service, and that any “double transports” were
performed as “courtesy” runs. Other former employees testified that Priority
One’s software would not have permitted the Reads to falsify any documents
unnoticed. An expert witness’s testimony implied that the Reads had complied
with applicable regulations.
Although the jury found the Reads guilty on twenty-one charges, it
returned no verdict on the remaining sixty-two counts. On the government’s
motion, the district court dismissed the hung counts. In a special verdict, the
jury found by a preponderance that the forfeitable proceeds of the offenses of
conviction amounted to $93,535.95.
The district court determined that the Reads’ criminal history category
was I, and that their offense level was 29, rendering an advisory sentencing
range of 87 to 108 months. The court applied a two-level enhancement for
abusing a “position of trust” under U.S.S.G. § 3B1.3, and a sixteen-level
enhancement for causing an “actual loss” of $1,766,681.31 under § 2B1.1(b)(1).
The court imposed on each defendant concurrent sentences of 60 months’
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imprisonment for the conspiracy conviction and 108 months’ imprisonment for
each mail fraud conviction. The court also ordered forfeiture of $93,535.95 and
restitution of $1,766,681.31. The Reads timely appealed.
II. DISCUSSION
On appeal, the Reads argue that: (1) there was insufficient evidence to
sustain their convictions; (2) the district court used the incorrect “loss” amount
to calculate their advisory sentencing range; (3) the district court incorrectly
determined the amount they owed in restitution; and (4) the district court
incorrectly applied the “abuse of position of trust” enhancement. We disagree.
A. Evidentiary Sufficiency
By moving for judgments of acquittal following the government’s case-in-
chief and again at the close of evidence, the Reads have preserved the de novo
standard of review as to their evidentiary sufficiency argument. United States
v. Frye, 489 F.3d 201, 207 (5th Cir. 2007). “When reviewing the sufficiency of the
evidence, this Court views all evidence, whether circumstantial or direct, in the
light most favorable to the Government with all reasonable inferences to be
made in support of the jury’s verdict.” United States v. Moser, 123 F.3d 813, 819
(5th Cir. 1997). “[W]e consider whether ‘any rational trier of fact could have
found the essential elements of the crime beyond a reasonable doubt.’” United
States v. Jara-Favela, 686 F.3d 289, 301 (5th Cir. 2012) (quoting Jackson v.
Virginia, 443 U.S. 307, 319 (1979)). “We do not consider whether the jury
correctly determined guilt or innocence, [only] whether the jury made a rational
decision.” United States v. Lopez-Urbina, 434 F.3d 750, 757 (5th Cir. 2005)
(alteration in original) (citation omitted).
1. Conspiracy
The Reads were charged with conspiring to commit health care fraud
under 18 U.S.C. § 371. A conviction under § 371 requires proof beyond a
reasonable doubt of: “(1) an agreement between two or more persons to pursue
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an unlawful objective; (2) the defendant’s knowledge of the unlawful objective
and voluntary agreement to join the conspiracy; and (3) an overt act by one or
more of the members of the conspiracy in furtherance of the objective of the
conspiracy.” United States v. Coleman, 609 F.3d 699, 704 (5th Cir. 2010).
The government offered sufficient evidence to sustain the Reads’
conspiracy convictions. There was ample proof of a voluntary agreement to
defraud Medicare, Medicaid, and BCBS. As the sole owners of Priority One, the
Reads made all important decisions relating to their business: They determined
which patients’ ambulance runs were billable, devised the policies governing run
sheets, and told EMTs to omit material information from the run sheets. The
evidence showed that the Reads knew their billing practices were illegal: They
were familiar with regulations governing reimbursement, and had also been
informed three times that they were overutilizing reimbursement for non-
emergency ambulance transport. Finally, each satisfied the “overt act”
requirement by, inter alia, instructing EMTs not to disclose that patients could
walk or use wheelchairs.
The Reads argue that their conspiracy convictions are void because the
government failed to show that their “overt acts” were independently forbidden.
They incorrectly rely on United States v. Ragsdale, 426 F.3d 765, 778 (5th Cir.
2005), in which an independently criminal act was sufficient for a conspiracy
conviction, not necessary. An “overt act” is “any act” in furtherance of the
conspiracy’s criminal objective, whether independently forbidden or not. 18
U.S.C. § 371; United States v. El-Mezain, 664 F.3d 467, 558 (5th Cir. 2011), cert.
denied, 2012 U.S. LEXIS 8451 (U.S. Oct. 29, 2012) (No. 11-10437).
The Reads further argue that § 371’s specific-intent requirement was not
satisfied. Because the trial evidence showed that the Reads were familiar with
Medicare regulations, and knew they were overutilizing non-emergency
ambulance transport, the jury was permitted to find that the Reads knew their
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agreement’s objective was illegal. Further, the offense conduct’s continuous
nature supported a finding that their agreement was voluntary. See United
States v. Castillo, 77 F.3d 1480, 1492, 1495 (5th Cir. 1996) (repeated facilitation
of drug shipments sufficient to show voluntary participation in conspiracy).
2. Mail Fraud
In the remaining twenty counts of conviction, the Reads were charged with
mail fraud and aiding and abetting. A mail fraud conviction under 18 U.S.C. §
1341 requires proof that: “(1) the defendant devised or intended to devise a
scheme to defraud, (2) the mails were used for the purpose of executing, or
attempting to execute, the scheme, and (3) the falsehoods employed in the
scheme were material.” United States v. Ratcliff, 488 F.3d 639, 643–44 (5th Cir.
2007). The fraudulent scheme must have one of three objectives, which include
“obtaining money or property by means of false or fraudulent pretenses,
representations, or promises.” Id. at 644 (quoting 18 U.S.C. § 1341). The
government must also “prove that a defendant knew the scheme involved false
representations.” United States v. Phipps, 595 F.3d 243, 245–46 (5th Cir. 2010).
The grand jury charged the Reads with “caus[ing] requests for payments
to be filed [through the mails] with Medicare [and] Medicaid . . . knowing that
the claims were false because the patients did not meet the qualification for
ambulance transportation.” Accordingly, the government was required to prove
that the Reads devised a scheme to submit claims that did not qualify for
reimbursement under Medicare/Medicaid regulations.
Each element of mail fraud was satisfied here. As we have discussed, the
government offered evidence that the Reads sought to obtain payment from
Medicare and Medicaid by transporting non-qualifying patients. The “use of
mails” element was satisfied because Medicare mailed the checks used to pay
claims as to these beneficiaries. See United States v. Ingles, 445 F.3d 830, 835
(5th Cir. 2006) (“One ‘causes’ the mails to be used ‘[w]here one does an act with
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knowledge that the use of the mails will follow in the ordinary course of
business, or where such use can reasonably be foreseen.’” (quoting Pereira v.
United States, 347 U.S. 1, 8–9 (1954))). Finally, the Reads instructed EMTs not
to disclose if patients were in wheelchairs or could walk—information the Reads
knew would have caused these claims to go unpaid.
The Reads first argue that the government failed to prove that they
intentionally overbilled for courtesy and double transports. The evidence
showed, however, that 576 double transports were billed as single transports,
and that Robert Read sometimes drove on these runs. This and other evidence
we have discussed permitted the jury to infer that the Reads’ overbilling was
intentional.
The Reads further contend that the government did not prove that they
intentionally filed fraudulent claims because Priority One EMTs sought to
determine in good faith whether patients required ambulance transport. As we
have explained, the government offered abundant evidence showing that the
Reads devised a fraudulent scheme that they knew involved false
representations. See Phipps, 595 F.3d at 245–46; Ratcliff, 488 F.3d at 643–44.
The Reads incorrectly argue that the government failed to prove that
Priority One employees made materially false representations as to Casey’s,
Lewis’s, Pool’s, or Hogg’s medical condition. Witnesses testified that none of
these patients required ambulance transport. For instance, although Lewis
suffered from dementia and had previously exhibited violent outbursts, the
EMTs who transported her testified that she had never been difficult, and the
EMT who vetted her condition did not believe she would become violent.
Further, Lewis’s physician testified that she was medicated and could have been
transported by wheelchair van. Because the Reads instructed EMTs to provide
only information that would ensure a claim’s payment, and to omit information
that would cause payment to be denied, representations that these patients
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needed ambulance transport were materially false. See United States v. Dillman,
15 F.3d 384, 392–93 (5th Cir. 1994) (representation is “false” if made with
reckless indifference to truth or falsity).
Finally, the Reads argue that their convictions must be reversed because
Priority One was not required independently to assess each patient’s medical
necessity for ambulance transport once the patient’s physician furnished a CMN.
The jury found them guilty, they argue, because transportees’ physicians
misunderstood Medicare regulations. The Reads ignore that they had doctors
sign blank CMNs on many occasions, thus completely removing the doctors from
the medical necessity determination. Moreover, assuming, arguendo, that the
Reads’ summation of Medicare regulations is correct, it does not affect the mail
fraud convictions. Multiple EMTs, doctors, and nurses testified that the four
patients at issue plainly did not qualify for ambulance transport. At the Reads’
direction, however, EMTs misrepresented the patients’ eligibility to ensure
payment. Possession of a CMN—even one that is legitimately obtained—does not
permit a provider to seek reimbursement for ambulance runs that are obviously
not medically necessary. See 42 C.F.R. § 410.40(d)(2) (“Medicare covers medically
necessary nonemergency, scheduled, repetitive ambulance services if the
ambulance provider . . . obtains a [CMN].”) (emphasis added).
In sum, because the government offered sufficient evidence to sustain the
Reads’ convictions, we will not disturb the jury’s verdict.
B. “Loss” Amount
The Reads argue that the district court incorrectly determined the “loss”
amount for Sentencing Guidelines purposes. They have preserved this claim of
error by specifically objecting before being sentenced. United States v. Neal, 578
F.3d 270, 272 (5th Cir. 2009). Accordingly, we review the district court’s legal
interpretation of the Guidelines de novo, and its factual findings for clear error.
United States v. Torres, 601 F.3d 303, 305 (5th Cir. 2010) (per curiam).
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Under the Guidelines, the offense level of a defendant convicted of fraud
is adjusted according to the amount of “loss” involved in the fraud. U.S.S.G. §
2B1.1(b)(1) (2009). “[L]oss is the greater of actual loss or intended loss.” Id. §
2B1.1 cmt. n.3(A). “Actual loss” is “the reasonably foreseeable pecuniary harm
that resulted from the offense.” Id. “Intended loss” is “the pecuniary harm that
was intended to result from the offense.” Id.
Although the government urged that the loss amount was
$7,639,279.74—the full amount billed to the victims—the district court
determined this could not be the “intended loss” because the Reads knew that
some claims would be rejected. Instead, the district court used the “actual loss”
of $1,766,681.31—the amount that Medicare, Medicaid, and BCBS paid on the
claims that Priority One submitted. This amount increased the base offense level
by sixteen. Id. § 2B1.1(b)(1)(I). The Reads contend that the correct loss amount
was $93,535.95—the amount of forfeitable proceeds as determined by the
jury—which would have increased the offense level by eight. Id. § 2B1.1(b)(1)(E).
Had the lower adjustment applied, the Reads’ advisory sentencing range would
have been 37 to 46 months’ imprisonment instead of 87 to 108 months.
The Reads ask us to remand for redetermination of the loss amount,
arguing that: (1) the district court committed Booker error; and (2) the loss
amount was not proven by a preponderance. We disagree.
1. Booker Error
The Reads argue that the district court committed Booker error by
applying the Guidelines as mandatory instead of advisory, and consequently
refusing to consider rebuttal evidence respecting the loss amount. See United
States v. Booker, 543 U.S. 220 (2005).
The Booker argument is based on an exchange between Claudette Read’s
attorney and the district court at the sentencing hearing:
MR. MAKIN: We feel that the correct amount should be the
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93,000-dollar amount that the jury found. We disagree with the
higher seven-point-whatever million-dollar amount. And I think it’s
interesting that the new [2011] guidelines that are going into effect
deal more with the Reads than the guidelines in effect now. In just
a straight reading of the guidelines as they are now, the government
is correct. You know, I may not agree with that; but that is the law.
But I think that law was aimed at people who had post office boxes
and never performed any services or anything. Here --
THE COURT: Well, I’m applying the law that applies now, the law
that applied at the time that the defendants -- so, whatever the law
may be in the future is really not -- it’s interesting, but it’s not what
I’m going to use today.
The Reads contend that because the district court referred to the
Guidelines as “the law,” it must have treated them as mandatory. Remarkably,
they ignore that the district court referred to the Guidelines as “the law” only in
response to Claudette Read’s attorney’s doing the same. Moreover, nothing in
the record establishes that the district court considered the Guidelines
mandatory. Indeed, the court expressly stated during the sentencing colloquy
that it viewed them as advisory. In context, the reference to “applying the law”
is most fairly construed as the court’s recognition that it was required correctly
to calculate an advisory sentencing range under the Guidelines, and to consider
that range when imposing sentence. See 18 U.S.C. § 3553(a)(4); Booker, 543 U.S.
at 245.
The Reads next argue that the district court considered the Guidelines
mandatory because it prohibited them from offering evidence to rebut the
$1,766,681.31 loss amount. Rebuttal evidence as to an “intended loss” amount
is expressly contemplated in the 2011 Guidelines, but not in the 2009 Guidelines
under which the Reads were sentenced. See U.S.S.G. § 2B1.1 cmt. n.3(F)(viii)
(2011). The Reads contend that because they “did real work” to earn most of the
$1,766,681.31, they should have been permitted to present evidence showing
that the correct loss amount was the amount by which they were overpaid.
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Again, the Reads misrepresent the record. First, the 2011 Guidelines
permit a defendant to present rebuttal evidence showing that the total amount
billed to a government health care program is not the “intended loss”; the
rebuttal evidence provision does not apply to “actual loss” or the total amount
paid on fraudulent claims. Id. Under these Guidelines, the Reads thus could
have presented evidence showing that the $7,639,279.74 they billed did not
reflect the losses they subjectively intended to cause. This was unnecessary,
however, because the district court adjusted the offense level based on the
amount the victims actually paid. Accordingly, the new provision on which the
Reads rely is inapposite.
More significantly, the Reads’ argument is meritless because the district
court did consider their rebuttal evidence. At the sentencing hearing, the Reads
offered the argument they advance now—that they legitimately obtained most
of the $1,766,681.31 amount, and thus should be penalized only for the amount
overpaid. They further stated that the rebuttal evidence to this effect had been
presented at trial. Although they stated that they were willing to present
rebuttal testimony, they did not affirmatively seek to do so. At no point did the
court prohibit the Reads from presenting evidence or argument. After hearing
their arguments, the district court rejected the $93,535.95 figure as “[not]
appropriate at all.” Because the court considered the Reads’ arguments and
supporting evidence, their claim of Booker error is meritless.
2. Loss Amount
The Reads next argue that the district court incorrectly determined the
loss amount. Again, we disagree.
A district court may find by a preponderance all facts relevant to
determining the Guidelines sentencing range, including loss amount. United
States v. Ollison, 555 F.3d 152, 164 (5th Cir. 2009); United States v. Johnson,
445 F.3d 793, 797–98 (5th Cir. 2006). Once again, “loss” for sentencing purposes
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includes “actual loss”—“the reasonably foreseeable pecuniary harm that resulted
from the offense.” U.S.S.G. § 2B1.1 cmt. n.3(A)(i) (2009). Because the jury found
the Reads guilty of conspiracy, conduct relevant to determining their Guidelines
sentencing range included their acts and omissions, as well as “all reasonably
foreseeable acts and omissions of others in furtherance of the jointly undertaken
criminal activity.” Id. § 1B1.3(a)(1)(B); United States v. Torres, 114 F.3d 520, 527
(5th Cir. 1997); United States v. McKinney, 53 F.3d 664, 678 (5th Cir. 1995).
As alleged, the Reads conspired “to obtain reimbursement from the
Medicare and Medicaid programs for transporting by ambulance dialysis
patients for whom [they] knew reimbursement was not available.” The district
court determined that the actual loss resulting from the “relevant conduct” was
$1,766,681.31—the combined value of the claims paid for transporting the fifteen
patients identified in the superseding indictment. This finding was based on a
preponderance of the evidence, including testimony by Tina Welch, Joel
McQueen, Patricia Cannizzaro, and Marjorie Poche that none of the claims set
out in the superseding indictment qualified for payment.
The Reads argue that the district court could not have found the
$1,766,681.31 loss amount by a preponderance because the jury found them
guilty of mail fraud as to only four patients’ ambulance transport claims,
whereas the district court’s figure was derived from claims related to all fifteen
patients at issue. Because the jury did not return a verdict on the mail fraud
counts related to the eleven remaining patients, or on any of the health care
fraud counts, the Reads contend that the government’s evidence did not support
the court’s loss determination. They ignore that the jury’s failure to return a
verdict is not equivalent to an affirmative finding of innocence. See United States
v. Price, 750 F.2d 363, 365 (5th Cir. 1985). The district court was thus not
prohibited from finding that the “relevant conduct” related to the conspiracy
offense caused an actual loss of $1,766,681.31.
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Finally, the Reads argue that the total amount paid by the victims was not
the correct loss amount because the Reads “did real work” to earn most of that
money, and that they should have been penalized only to the extent they were
overpaid for non-reimbursable ambulance runs. Once again, the district court
did not clearly err in finding that none of the ambulance transports set out in the
superseding indictment qualified for reimbursement. Accordingly, it properly
held the Reads accountable for the full amount paid by the victims.
C. Restitution
The Reads argue that the district court abused its discretion in ordering
them to pay $1,766,681.31 in restitution when the jury found that the “gross
proceeds traceable to” the offenses of conviction amounted to only $93,535.95.
We apply de novo review to a restitution award’s legality, and clear-error review
to the factual findings underlying the award. United States v. Beydoun, 469 F.3d
102, 107 (5th Cir. 2006); United States v. Cothran, 302 F.3d 279, 288 (5th Cir.
2002). If the award is legally permitted, we review it for abuse of discretion.
Cothran, 302 F.3d at 288.
Under the Mandatory Victims Restitution Act of 1996, a court sentencing
a defendant for an offense involving property loss must order the defendant to
pay restitution to the victim. 18 U.S.C. § 3663A. “[W]here a fraudulent scheme
is an element of the conviction, the court may award restitution for actions
pursuant to that scheme.” Cothran, 302 F.3d at 289 (citation and internal
quotations omitted). While restitution represents a victim’s loss from the
defendant’s offense, forfeiture represents the defendant’s gain from the offense.
United States v. Taylor, 582 F.3d 558, 566 (5th Cir. 2009) (citing United States
v. Webber, 536 F.3d 584, 602–03 (7th Cir. 2008)).
The district court ordered restitution of $1,766,681.31—the combined
value of the claims paid in the course of the charged conspiracy. The Reads
argue that the district court abused its discretion by ordering restitution in this
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amount because the jury’s forfeiture determination precluded a finding of loss
greater than $93,535.95. We disagree.
The Reads first argue that “the victims’ cumulative losses [(the restitution
amount)] cannot exceed the ‘gross proceeds traceable to the commission of the
offenses of conviction’ [(the forfeiture amount)].” They fail, however, to provide
any apposite authority supporting this argument. They erroneously rely on
Apprendi v. New Jersey, 530 U.S. 466, 490 (2000), in which the Supreme Court
held that “[o]ther than the fact of a prior conviction, any fact that increases the
penalty for a crime beyond the prescribed statutory maximum must be
submitted to a jury, and proved beyond a reasonable doubt.” Apprendi is
inapposite because no statutory maximum applies to restitution; the restitution
amount is equal to the victims’ loss, whatever this may be. See 18 U.S.C. §
3663A; United States v. Gasanova, 332 F.3d 297, 301 (5th Cir. 2003).
To the extent the Reads argue that the restitution amount could not, as a
factual matter, exceed the forfeiture amount in this case, and that the district
court’s restitution finding conflicts with the jury’s forfeiture verdict, they provide
no apposite authority supporting this argument. They rely on United States v.
Emerson, 128 F.3d 557 (7th Cir. 1997), in which the Seventh Circuit stated that
“paying restitution plus forfeiture at worst forces the offender to disgorge a total
amount equal to twice the value of the proceeds of the crime.” Id. at 567 (citation
omitted). The Emerson court made this statement in deciding whether ordering
restitution in addition to forfeiture disproportionately punishes a defendant.
Emerson thus does not support the proposition that a district court’s factual
findings respecting restitution cannot conflict with a jury’s forfeiture verdict. Cf.
United States v. Sims, 144 F.3d 1082, 1084 (7th Cir. 1998) (“Inconsistent RICO
convictions and forfeiture verdicts are no more problematic than inconsistent
verdicts on substantive offenses.”); United States v. Parker, 991 F.2d 1493,
1500–01 (9th Cir. 1993) (forfeiture verdict inconsistent with verdict on
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underlying count may be sign of jury leniency (citing United States v. Powell, 469
U.S. 57, 65 (1984))).
The Reads next argue that ordering restitution in the full amount of the
“double transport” payments grants the victims an “unlawful windfall” because
these transports would have been reimbursable if billed correctly. This argument
is moot because the district court permissibly found that none of the claims for
which the Reads were charged was eligible for payment, regardless of single or
double transporting. In any event, we are not convinced that the “windfall”
argument is correct. See United States v. Crawley, 533 F.3d 349, 358–59 (5th Cir.
2008) (corrupt union president must return his full salary even though union
would have paid the same amount to an honest president).
The Reads further contend that for restitution purposes, they cannot be
held responsible for acts that occurred after the charged conspiracy ended. They
base this argument on the erroneous belief that the conspiracy ended in 2004.
As charged, and as the trial evidence showed, the conspiracy lasted from 2004
until November 2007. The district court thus properly ordered the Reads to
make restitution for claims paid during this period.
Finally, the Reads incorrectly suggest that the restitution order as to
BCBS was improper because none of the substantive counts of conviction relates
to BCBS. Because the Reads were convicted of conspiracy, and the trial evidence
supported the district court’s finding that all claims set out in the superseding
indictment were fraudulent, the district court properly ordered restitution to
BCBS. See 18 U.S.C. § 3663A; Cothran, 302 F.3d at 289.
D. “Position of Trust” Enhancement
The district court applied a two-level enhancement to the Reads’ offense
levels pursuant to U.S.S.G. § 3B1.3. This provision applies to a defendant who
has “abused a position of public or private trust . . . in a manner that
significantly facilitated the commission or concealment of the offense.” U.S.S.G.
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§ 3B1.3 (2009). The Reads argue that the position of trust enhancement is
“unconstitutionally vague, arbitrary, and unenforceable” as applied in this
circuit. They further argue that applying this enhancement in the instant
circumstances “is overbroad and contrary to public policy.” Because the Reads
properly preserved this issue, we review the district court’s legal conclusions de
novo, and its factual findings for clear error. Torres, 601 F.3d at 305.
1. Vagueness
Based on the trial evidence, the district court found that Priority One’s
enrollment in Medicare and Medicaid put the Reads in a position that
“significantly facilitated the commission” of their fraud offenses, and that they
thus merited the § 3B1.3 position of trust enhancement. Several witnesses had
testified that because Medicare and Medicaid do not have the resources to
evaluate each of the claims they process—millions each month in Texas
alone—these programs’ administrators generally assume that the claims
providers submit are truthful, and do not verify these claims. Tina Welch
testified that the Reads certified they would not knowingly or recklessly submit
fraudulent claims to Medicare, and that they understood payment of claims was
conditioned on compliance with Medicare laws and regulations. Based on these
representations, Medicare gave the Reads substantial discretion to submit
claims with minimal supervision.
The district court applied § 3B1.3 in compliance with our clear and long-
standing precedent. We have consistently affirmed the position of trust
enhancement’s application to Medicare and Medicaid providers when sufficient
evidence supported a finding that they had substantial discretion to submit
claims they knew would likely not be scrutinized. United States v. Isiwele, 635
F.3d 196, 205 (5th Cir. 2011); United States v. Miller, 607 F.3d 144, 150 (5th Cir.
2010); United States v. Gieger, 190 F.3d 661, 665 (5th Cir. 1999); see also United
States v. Iloani, 143 F.3d 921, 922–23 (5th Cir. 1998) (affirming § 3B1.3’s
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application to a chiropractor who submitted fraudulent bills to insurance
companies). These cases, in turn, are consistent with our broader position of
trust jurisprudence: We have held, in accordance with § 3B1.3’s application
notes, that “[a] position of trust is characterized by (1) professional or
managerial discretion (i.e., substantial discretionary judgment that is ordinarily
given considerable deference), and (2) minimal supervision”; and that a court
considering this enhancement must take into account “the extent to which the
position provides the freedom to commit a difficult-to-detect wrong.” Ollison, 555
F.3d at 166 (citing U.S.S.G. § 3B1.3 cmt. n.1 (2006); United States v. Brown, 7
F.3d 1155, 1161 (5th Cir. 1993)); see also id. at 168 n.12 (collecting cases).
The Reads do not argue that the district court violated our precedent in
applying the position of trust enhancement. Rather, they argue that under our
precedent, the enhancement is applied so broadly that “literally anyone charged
with theft under the federal system will necessarily also have abused a position
of private trust.” In the Reads’ view, the position of trust enhancement should
apply only when “recognized legal and fiduciary duties” create the trust
relationship contemplated under § 3B1.3, and not in the context of “purely
commercial transactions,” such as those they purportedly entered into with the
victims. In support of this proposed limitation, the Reads rely on Skilling v.
United States, 130 S. Ct. 2896 (2010). The Supreme Court held in Skilling that
the federal honest services fraud statute had been applied too broadly and
inconsistently. Id. at 2929. Because such application might prevent ordinary
people from understanding what conduct the statute prohibited, the Court
limited honest services prosecutions to the core category of bribery and kickback
schemes that Congress had intended to prohibit. Id. at 2931.
By challenging our position of trust jurisprudence on vagueness grounds,
the Reads obliquely argue that prior panels of this circuit have incorrectly
interpreted § 3B1.3. If we held, as the Reads urge, that the position of trust
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enhancement is unconstitutionally vague as applied in this circuit, we would
have to overturn the binding authority supporting its application in the instant
matter. Per our firm rule, even if we were inclined to question that precedent,
we can do this only if there has been “an intervening change in the law, such as
by a statutory amendment, or the Supreme Court, or by our en banc court.” In
re Pilgrim’s Pride Corp., 690 F.3d 650, 663 (5th Cir. 2012) (citation omitted).
The Reads contend that Skilling supersedes our jurisprudence respecting
the position of trust enhancement as applied to Medicare and Medicaid
providers. We disagree. “[F]or a Supreme Court decision to change our Circuit’s
law, it must be more than merely illuminating with respect to the case before the
court and must unequivocally overrule prior precedent.” Id. The criminal statute
addressed in Skilling has no material relation to the position of trust Guidelines
enhancement at issue here, and we may not use the void for vagueness doctrine
to ride roughshod over prior panel decisions merely because the Supreme Court
has recently elaborated on that doctrine in a different context. See United States
v. Zuniga-Salinas, 945 F.2d 1302, 1306–07 (5th Cir. 1991).
2. “Billing Error”
Finally, the Reads argue that the district court erroneously applied
§ 3B1.3 in the context of a “complicated commercial transaction” in which a
billing agent caused a loss equal to a small fraction of the total amount billed.
They contend that such application is “overbroad” and would have a “chilling
effect.” This argument is meritless. As we have discussed, the trial evidence
supported the district court’s finding that the victims’ loss amounted to over $1.7
million. To the extent the Reads suggest that neither of them, but instead a
billing agent, was in the position of trust triggering the enhancement, the
district court’s amply supported factual findings preclude this argument.
III. CONCLUSION
For the foregoing reasons, the district court’s judgment is AFFIRMED.
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