United States v. Sandra Bailey ( 2020 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0289p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, ┐
Plaintiff-Appellee, │
│
> Nos. 18-5607/5901/5903
v. │
│
│
BRYAN BAILEY (18-5607); CALVIN BAILEY (18-5901); │
SANDRA BAILEY (18-5903), │
Defendants-Appellants. │
┘
Appeal from the United States District Court
for the Western District of Tennessee at Jackson.
No. 1:15-cr-10011—S. Thomas Anderson, District Judge.
Argued: January 29, 2020
Decided and Filed: September 1, 2020
Before: SILER, GIBBONS, and READLER, Circuit Judges.
_________________
COUNSEL
ARGUED: Charles H. Barnett, IV, SPRAGINS, BARNETT & COBB, PLC, Jackson,
Tennessee, for Appellant in 18-5607. Kenneth P. Tableman, KENNETH P. TABLEMAN, P.C.,
Grand Rapids, Michigan, for Appellant in 18-5901. Kevin M. Schad, OFFICE OF THE
FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant in 18-5903. Matthew
Wilson, UNITED STATES ATTORNEY’S OFFICE, Jackson, Tennessee, for Appellee.
ON BRIEF: Daniel J. Taylor, Jackson, Tennessee, for Appellant in 18-5607. Kenneth P.
Tableman, KENNETH P. TABLEMAN, P.C., Grand Rapids, Michigan, for Appellant in 18-
5901. Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio,
for Appellant in 18-5903. Matthew Wilson, UNITED STATES ATTORNEY’S OFFICE,
Jackson, Tennessee, Naya Bedini, UNITED STATES ATTORNEY’S OFFICE, Memphis,
Tennessee, for Appellee.
Nos. 18-5607/5901/5903 United States v. Bailey Page 2
_________________
OPINION
_________________
JULIA SMITH GIBBONS, Circuit Judge. A jury convicted Sandra Bailey, Calvin
Bailey, and their son Bryan Bailey of conspiring to commit healthcare fraud and other related
crimes.1 The district court sentenced Sandra to 120 months’ imprisonment, Calvin to forty-five
months’ imprisonment, and Bryan to eighty-four months’ imprisonment. Sandra, Calvin, and
Bryan bring a number of challenges to their convictions, and Sandra and Calvin also challenge
their sentences. Most of those challenges lack merit. We agree with Sandra, however, that the
district court miscalculated her Guidelines-range sentence when it erroneously imposed a two-
level increase in her offense level for using “mass marketing” in her scheme. We also agree with
Calvin that the district court incorrectly calculated the loss amount for which he was
responsible—and by extension, his Guidelines-range sentence—by holding him responsible for
losses beyond those he agreed to jointly undertake. Accordingly, we affirm the convictions of
Sandra, Calvin, and Bryan. We vacate Sandra’s and Calvin’s sentences, however, and remand to
the district court for resentencing.
I.
Medicare and Medicaid, two federally funded healthcare benefit programs, cover eighty
percent of the cost of power wheelchairs and back braces when the devices are medically
necessary. A wheelchair is medically necessary when the patient is unable to perform activities
of daily life even with the aid of a cane, walker, manual wheelchair, or scooter. Wheelchairs
must be prescribed by a medical professional who has performed a face-to-face examination of
the patient.
A.
In fall 2009, Sandra, Calvin, and Bryan Bailey began working for Jaspan Medical
Systems, a company that sold durable medical equipment (“DME”) like back braces, knee
1To avoid confusion, this opinion refers to the defendants by their first names.
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braces, and power wheelchairs in western Tennessee. Sandra was Jaspan’s primary sales
representative and received a $750 commission for each sale of a power wheelchair. Calvin was
also listed as a sales representative, but he was rarely seen by other Jaspan employees. Bryan
was initially hired as an office manager but was soon asked to run the company—including
overseeing, among other things, personnel decisions, the awarding of sales commissions, and
compliance with Medicare rules and regulations.
Sandra achieved impressive sales numbers by convincing individuals insured by
Medicare to purchase a power wheelchair for which they had no need. Among those to whom
Sandra sold power wheelchairs were individuals who could walk and drive, individuals who
could not use the power wheelchair as intended, and individuals who had contacted Jaspan to
purchase different assistive devices. Sandra even sold power wheelchairs to a couple so
unburdened by mobility issues that they operated a daycare. These power wheelchairs largely
went unused.
Sandra often lied to close these sales. In 2009, she told one prospective customer that “in
2010 . . . Medicare would not be able to buy [power wheelchairs].” DE 314, Trial Tr., Page ID
2239. And she told another couple that they needed to order the power wheelchairs then—
despite having no need for them—because they might need them later in life and that, if then-
President Barack Obama was reelected, power wheelchairs would no longer be available through
Medicare.
To find additional customers for power wheelchairs, Sandra paid previous customers to
provide her lists of names of individuals to contact to sell power wheelchairs or to arrange a
gathering of individuals where Sandra could sell power wheelchairs in person. Sandra paid these
referrers through cash, gift cards, and other gifts like dresses or turkeys.
Sandra coached referrers on how to identify patients insured by Medicare. She also
suggested that they gather ten to twelve individuals before having her attend a gathering. And
she instructed them not to tell others that she was paying them for their referrals. She
specifically told one referrer that she was being investigated by the FBI and that, should the FBI
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speak with the referrer, the referrer should not tell the agency anything, including anything about
the money Sandra paid the referrer.
Through these referrers, Sandra developed a network of contacts throughout western
Tennessee, including contacts in Trezevant, Humboldt, Martin, Atwood, and Henning,
Tennessee. One referrer alone gave Sandra eighty-four names of individuals to whom Sandra
could sell power wheelchairs.
Meanwhile, Sandra relied on Cindy Mallard, an assistant to Nurse Practitioner Mechelle
Perry, to help circumvent the medical necessity requirement. Sandra asked Perry to prescribe
DMEs to patients discharged from a local hospital and told Perry that she was allowed to
prescribe DMEs without a face-to-face visit. Mallard assured Perry that Sandra’s claim that
Perry could prescribe DMEs without face-to-face visits was true.
Perry agreed to prescribe DMEs based on the paperwork alone, but, because she was not
performing face-to-face evaluations, would not complete the “review of systems” section. Yet,
this section was completed for many patients for whom Perry prescribed power wheelchairs.
And many of the customers for whom Perry is listed as the prescriber do not recall meeting her.
Perry testified that she recognized Mallard’s handwriting in the review of systems portion of the
form. While Mallard was employed by Perry, Sandra withdrew over $9,000 in cash on dates
close to, and in increments matching or similar to, deposits made by Mallard.
Calvin was also on the Jaspan payroll and received sales commissions, but he was rarely
seen in the office. Some customers whose paperwork stated that Calvin had sold them a power
wheelchair reported that they never met Calvin, only Sandra. Bryan testified that Calvin assisted
at Jaspan through “people contacting him as far as needing, family members needing chairs,” and
that “[Calvin] and [Sandra] worked together doing power wheelchairs.” DE 322, Trial Tr., Page
ID 3678–79.
While Sandra and Calvin were out selling power wheelchairs, Bryan was running Jaspan.
Lisa Vega, a Jaspan employee, testified that Bryan reviewed all paperwork related to power
wheelchairs as part of his duty to ensure Medicare compliance. Vega testified that, when she
identified paperwork missing patient or physician signatures for Bryan, he often turned around
Nos. 18-5607/5901/5903 United States v. Bailey Page 5
completed paperwork in a short time, sometimes a matter of minutes, despite the absence of the
signing physicians. Vega further testified that she witnessed Bryan forging paperwork for a
wheelchair order. Vega also witnessed Bryan shred a portion of a patient’s file that was
unfavorable to a Medicare claim for a power wheelchair. And Vega testified that she was asked
to falsify information on the co-payment form to ensure patients did not have to pay the twenty
percent costs not covered by Medicare. Bryan signed the forms containing customers’ financial
and insurance information, but many customers testified that they never provided Bryan with
such information or even spoke with him.
Because he was tasked with running Jaspan, Bryan oversaw his parents’ work. He
certified that Sandra and Calvin had received Medicare compliance training. When Vega raised
her suspicions about prescriptions for power wheelchairs from Perry, she noticed that her
responsibilities in the office decreased. And when a doctor’s office accused Sandra of forgery,
Bryan instructed Jaspan employees not to talk to the office’s manager. Finally, Bryan
occasionally assisted Sandra with visits to customers and received some of Sandra’s
commissions.
In 2011, Sandra and Calvin left Jaspan for other DME suppliers. DuraTech Medical
(“DuraTech”) hired Sandra as a subcontractor. Calvin was hired both by Apple Independence
Mobility (“Apple”) and Orthopaedic Specialties of Lexington, Inc. (“Orthopaedic Specialties”).
Neither Apple nor Orthopaedic Specialties was aware that Calvin remained employed as a
middle-school principal. Bryan remained Jaspan’s office manager. Despite working at different
companies, the Baileys’ scheme was largely unchanged.
Sandra returned to many of her power wheelchair customers when she began selling back
braces for DuraTech. For example, in 2012, Sandra returned to the residence of a former power
wheelchair customer to sell him and his parents back braces, even though none of the three
needed a back brace or were examined by a doctor before receiving one. Sandra also used
previous customers as referrers for back brace customers. One former customer testified that
she, at Sandra’s request, gathered several people at her house to meet with Sandra and that
Sandra gave those gathered back braces. That same customer testified that Sandra said that
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“she wanted to compensate [her]” and gave her a bag containing $200. DE 318, Trial Tr., Page
ID 2593–95.
At DuraTech, Sandra relied on Dr. Matthew Presson to prescribe back braces to
individuals he did not evaluate face-to-face. Presson testified that he did house calls on
Saturdays with Sandra where he physically examined patients before prescribing power
wheelchairs and back braces. Presson’s name appears on the paperwork for all the individuals to
whom Sandra sold back braces, but many of those individuals testified that they had “[n]ever
heard of ” Presson. DE 320, Trial Tr., Page ID 3013. Presson testified that Sandra occasionally
bought dinner for him and his parents at the end of his Saturday house calls with Sandra. But
Presson previously told agents investigating the Baileys that Sandra paid him between $200 and
$300 every Saturday.
Sandra was also involved in her husband’s work for two other companies, Apple and
Orthopaedic Specialties. Sandra recommended Calvin to Apple’s owner, explaining that Calvin
could “get a lot of business that they had from their previous company as far as referral sources.”
DE 320, Trial Tr., Page ID 3180. Once, Calvin drove potential DME customers to a local motel
where Sandra helped each customer fill out paperwork for DMEs; Calvin billed a room in that
motel to Apple. One of Sandra’s referrers testified that Calvin paid him for helping gather the
individuals who came to the motel. Meanwhile, Apple’s owner became concerned with how
frequently Calvin’s DME paperwork was incomplete or listed Presson as the prescribing doctor.
That prompted Sandra to call employees at Apple instructing them not to call the doctors
prescribing the power wheelchairs Calvin was selling.
Back at Jaspan, Bryan hired Dennis Sensing to be a sales representative in northern
Mississippi. Sensing sent Bryan paperwork relating to power wheelchair sales to review. Bryan
returned the paperwork with comments explaining how Sensing could change patient
information on the paperwork to ensure Medicare reimbursed the power wheelchair. Sensing
forged signatures on the paperwork and informed Bryan of the forgeries. Once, when Sensing
lamented that his forgery skills were poor, Bryan replied, “[D]on’t worry about it. I’ve been
taking care of momma for a long time. I’ll take care of yours.” DE 319, Trial Tr., Page ID 2968.
Nos. 18-5607/5901/5903 United States v. Bailey Page 7
Like Sandra, Bryan had Presson prescribe power wheelchairs to customers who Presson had not
physically examined.
In January 2013, Jaspan was reported to the Medicare fraud hotline. That same month,
Ronnie Winbush, one of Sandra’s paid referrers, became an informant for a government
investigation into the Baileys led by Agent Richard Haines from the Department of Health and
Human Services and Agent Clayton Goldsmith of the Federal Bureau of Investigation. Winbush
made numerous recordings of phone calls between himself, Sandra, and other members of the
conspiracy. In one conversation, another referrer told Winbush that “[Sandra] and Bryan paid
me real good” and offered to connect Winbush with Sandra and Bryan. DE 217-3, Gov. Resp. to
Mot., Page ID 878–79. In another recorded conversation, Sandra told Winbush not to tell others
about the money she gave him because “it could get [her] into trouble.” 18-5607 CA6 R. 44,
Appellee App., CD Ex. 49 (1:11:00 to 1:11:54). And in a later recorded conversation, Sandra
revealed to Winbush that she was under investigation and that the money she paid him was for
his driver’s license.
B.
A grand jury indicted Sandra, Calvin, and Bryan Bailey, as well as Cindy Mallard, on one
count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 371. Sandra was
also charged with seven counts of health care fraud, in violation of 18 U.S.C. § 1347,
and nine counts of illegal remuneration involving health care fraud, in violation of 42 U.S.C.
§ 1320a-7b(b)(2)(a). Bryan was also charged with one count of wire fraud, in violation of
18 U.S.C. § 1343. Before trial, Cindy Mallard pled guilty to a charge in a separate case and in
return the government dismissed her as a defendant in this case. The government also dismissed
two of the counts of health care fraud against Sandra.
The Baileys’ joint trial commenced on October 30, 2017. However, the case was
continued mid-way through trial in November after Sandra’s psychiatric condition deteriorated.
The trial resumed in front of the same jury on February 12, 2018.
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The jury convicted Sandra, Calvin, and Bryan on all counts. The district court sentenced
Bryan to eighty-four months’ imprisonment and ordered him to pay restitution in the amount of
$1,951,080.01.
Calvin was sentenced to forty-five months imprisonment. The district court increased
Calvin’s offense level by sixteen levels after finding that he was responsible for an amount of
loss greater than $1,500,00.00.
Sandra was sentenced to 120 months imprisonment. Sandra received three sentencing
enhancements relevant to her appeal: (1) a four-level enhancement for being a leader of criminal
activity; (2) a two-level enhancement for mass marketing; and (3) a two-level enhancement for
obstruction of justice. Sandra and Calvin were ordered to jointly pay $1,391,649.80 in
restitution. The district court later reduced that amount by $12,430.68 with the parties’ consent.
All three defendants timely appealed.
II.
We begin with Bryan’s assertion that the district court erred by admitting into evidence
recordings of statements made by Winbush and Wanda Wiggins, a woman who received an
unneeded power wheelchair from Sandra and whom Sandra later paid in exchange for referrals.
The district court concluded that the statements were not hearsay because they were made by
Bryan’s co-conspirators in furtherance of the conspiracy. See Fed. R. Evid. 801(d)(2)(E). Bryan
contends that was an error because the government failed to demonstrate by a preponderance of
the evidence that Bryan was a member of the conspiracy and because Wiggins’s and Winbush’s
statements were not made in furtherance of the conspiracy. We review the district court’s legal
conclusions de novo and its factual conclusions for clear error. United States v. Kelsor, 665 F.3d
684, 693 (6th Cir. 2011). “Where the admissibility is a close call, the trial judge’s findings
should generally remain undisturbed.” United States v. Clark, 18 F.3d 1337, 1342 (6th Cir.
1994).
While out-of-court statements of another are generally not admitted as evidence of the
truth of the matter asserted, the Federal Rules of Evidence exclude statements made by a
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defendant’s co-conspirator from this rule. Fed. R. Evid. 801(d)(2)(E). To invoke this hearsay
exclusion, the government must demonstrate by a preponderance of the evidence that (1) a
conspiracy existed, (2) the defendant was a member of the conspiracy, and (3) the co-
conspirator’s statement was made in furtherance of the conspiracy. United States v. Adams,
655 F. App’x 312, 319 (6th Cir. 2016) (citing Kelsor, 665 F.3d at 693). Bryan challenges the
government’s proof on the latter two factors. The government established both.
Before co-conspirator statements can be entered into evidence, “a defendant’s
participation in the conspiracy must be established . . . by a preponderance of the evidence.”
United States v. Conrad, 507 F.3d 424, 429 (6th Cir. 2007) (quoting Clark, 18 F.3d at 1341).
While the government may introduce the out-of-court statements as evidence of the defendant’s
participation in the conspiracy, Bourjaily v. United States, 483 U.S. 171, 181 (1987), those
statements must be supported by independent evidence that is strong enough “to rebut and
overcome the presumed unreliability of ” out-of-court statements, Conrad, 507 F.3d at 429(quoting Clark, 18 F.3d at 1341).
Here, the out-of-court statements are evidence of Bryan’s participation in the conspiracy,
and independent evidence rebuts the presumption of unreliability. The recordings of Wiggins
and Winbush demonstrate that Bryan joined Sandra in paying kickbacks to those who referred
customers for durable medical equipment:
Winbush: When you worked with Ms. Bailey did you hook
her up with a lot of wheelchair customers?
Wiggins: Uh huh, yeah.
Winbush: You did?
Wiggins: Um hmm.
Winbush: She just, she just, she just pay you pretty good?
Wiggins: Yeah, she pay you pretty good.
Winbush: Talking about when you, when you was helping her
out.
Wiggins: Yeah, she paid me pretty good. She and Bryan paid
me real good.
DE 217-3, Gov. Resp. to Mot., Page ID 878–79 (emphasis added). Independent evidence
Nos. 18-5607/5901/5903 United States v. Bailey Page 10
corroborates Bryan’s role in the conspiracy. One customer testified that she did not know Bryan
or provide him with her financial information, yet Bryan’s named appeared on a financial
statement for that customer. Vega, Bryan’s employee, testified that Bryan reviewed all the
paperwork submitted by Jaspan’s sale representatives for DMEs; that both Sandra and Calvin
were sales representatives for Jaspan and that paperwork lacking patient or doctor signatures
often came from Sandra; and that she witnessed Bryan forge patient signatures and noticed that
Bryan obtained doctor’s signatures within five minutes of her notifying him that the signatures
were missing, even though she never saw those physicians in the Jaspan offices.
Nor, given the deference owed to the district court’s decision, can we disturb its
conclusion that the government also sufficiently proved that the statements were in furtherance
of the conspiracy. We look to the speaker’s intent when determining whether statements are
made in furtherance of a conspiracy. See United States v. Darwich, 337 F.3d 645, 657 (6th Cir.
2003). Still, “[a] statement may be in furtherance of a conspiracy ‘even if not exclusively, or
even primarily, made to further the conspiracy.’” United States v. Henderson, 307 F. App’x 970,
977 (6th Cir. 2009) (quoting United States v. Tocco, 200 F.3d 401, 419 (6th Cir. 2000)).
“[S]tatements identifying other conspirators and their roles in the conspiracy” further the
conspiracy. United States v. Jordan, 511 F. App’x 554, 562 (6th Cir. 2013) (quoting United
States v. Hitow, 889 F.2d 1573, 1581 (6th Cir. 1989)).
A permissible reading of Wiggins’s conversation with Winbush is that she intended to
encourage and assist Winbush in participating in the conspiracy. Wiggins consistently spoke of
Winbush’s potential participation. DE 217-3, Gov. Resp. to Mot., Page ID 881 (“Winbush: Ms.
Bailey . . . get you a chair and you don’t even need one[?] Wiggins: Yeah. You know, you tell
her you need [a power wheelchair] and uh you explain to her why you need it or why you think
you need it and . . . she’ll hook you up . . . .”); id. at 883 (“[J]ust think if . . . [Sandra] get[s] 500
dollars per wheel chair, then you get her 10 people today and then I get her 10 people . . . .”
(emphasis added)). Wiggins aided Winbush’s participation by identifying Presson, Bryan,
Calvin, and Sandra as members of the conspiracy. And Wiggins described Sandra, Calvin, and
Bryan’s role in the conspiracy, explaining that “[Sandra] and Bryan paid me real good” for
Nos. 18-5607/5901/5903 United States v. Bailey Page 11
referring wheelchair customers, id. at 879, and that Calvin “don’t sell, he go with [Sandra]
sometimes when he’s off,” id. at 882.
Bryan disagrees, insisting that, in light of Wiggins declaring that she “stopped [working
with Sandra] all together [sic] . . . after [she] got sick,” id. at 878, our decision in Darwich
precluded the district court from considering Wiggins’s conversation to be in furtherance of the
conspiracy. This argument fails for a number of reasons. First, it misreads Darwich. Darwich
did not say that conversations about past events could not be made in furtherance of a
conspiracy, it said that “mere ‘idle chatter or casual conversation about past events’” could not
be made in furtherance of a conspiracy. 337 F.3d at 657 (quoting Tocco, 200 F.3d at 419.)
Darwich distinguished the impermissibly admitted statements from “[s]tatements that identify
participants and their roles in the conspiracy.” Id. (alteration in original) (quoting United States
v. Monus, 128 F.3d 376, 393 (6th Cir. 1997)). Second, Bryan conceded at oral argument that
Wiggins had not formally withdrawn from the conspiracy. And the conspiracy extended beyond
the time of Wiggins’s conversation with Winbush.
Finally, to the extent Bryan contends that there must be some forward-looking statements
regarding the conspiracy, Wiggins’s conversation with Winbush included as much. Although
Wiggins does indicate in the call that she at some point stopped working for Sandra, her remarks
can be fairly characterized as encouraging Winbush’s participation in the scheme. Moreover, at
the outset of the conversation, Wiggins said she was going to call Sandra to get Bryan’s number
to see if Bryan could help her get a knee brace, reflecting ongoing participation in the
conspiracy. Later, the following exchange occurred:
Wiggins: I’m gonna try my best to get in touch with him today. I’m
going to try to get in touch with Ms. Bailey today and tell
Bryan to, you know, call me. I’m gonna ask him, ask him
to do me a favor and when she tell me what it is, I’m gonna
ask her to send Bryan by here so I can get me a knee brace.
Winbush: Uh huh. Do you have to go to the doctor for a knee brace?
(Talking over each other)
Wiggins: Uh uh. I went over to Dr. Presson’s about 3 weeks ago and
I had missed Bryan by 2 minutes.
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Winbush: Um. Ok.
Wiggins: Missed him by 2 minutes.
Winbush: What do knee braces cost?
Wiggins: I don’t know. Like I said, I don’t know how much they
cost. And uh…
Winbush: Bryan can get you one without seeing the doctor?
Wiggins: Dr. Presson told me to call Bryan and uh he said my knee
was in bad shape. So, he, uh, if I call, if I catch up with
Bryan, he’ll come out here, Dr. Presson will sign the papers
saying I need one.
DE 217-3, Gov. Resp. to Mot., Page ID 885–86. This exchange involves two other members of
the conspiracy, Presson and Bryan, and involves the object of the conspiracy, fraudulently
obtaining DMEs. Bryan contends that Wiggins was discussing her legitimate need for a knee
brace. But there is plenty of suspect content to the conversation. Wiggins says she “needs a
favor” from Bryan. While she says she visited Presson earlier, she said she “had missed Bryan
[at Presson’s office] by 2 minutes.” DE 217-3, Gov. Resp. to Mot., Page ID 886. It is not clear
why Bryan would have been at Presson’s office or why his being there would have helped
Wiggins get a knee brace. We cannot say that the district court clearly erred in viewing the
conversation as in furtherance of the conspiracy.
Because the government demonstrated that (1) there was a conspiracy, (2) Bryan was a
member of the conspiracy based on evidence independent of Wiggins’s out-of-court statements,
and (3) Wiggins’s out-of-court statements were made in furtherance of that conspiracy, the
district court properly admitted the statements pursuant to Federal Rule of Evidence
801(d)(2)(E).
III.
Bryan next argues that the district court erred in permitting Haines to testify three times
during trial. This issue arose from the trial’s lengthy continuance. Haines testified before the
break, immediately after the break, and then again just before the government rested its case.
The defendants objected to the second recall of Haines, arguing that the government reserved
only the right to recall Haines once, not twice. The government explained that it had always
Nos. 18-5607/5901/5903 United States v. Bailey Page 13
planned to recall Haines at the end of trial but had to “unexpectedly” recall him earlier to
impeach Presson’s testimony—the last testimony the jury heard before the three-month
continuance. DE 321, Trial Tr., Page ID 3287. The district court overruled the objection,
explaining that, “because of the delay we have encountered, I don’t see really how the
defendants are going to be prejudiced.” Id. at 3291.
Federal Rule of Evidence 611(a) gives the district court “reasonable control over the
mode and order of examining witnesses and presenting evidence.” Because the matter is left to
the “substantial discretion” of the district court, we reverse the district court only where its
erroneous decision affected the defendant’s substantial rights. United States v. Fields, 763 F.3d
443, 465 (6th Cir. 2014) (quoting United States v. Maddox, 944 F.3d 1223, 1230 (6th Cir.
1991)).
A district court controls the mode and order of examining witnesses to “(1) make those
procedures effective for determining truth; (2) avoid wasting time; and (3) protect witnesses
from harassment or undue embarrassment.” Fed. R. Evid. 611(a). Of course, the district court
must ensure that evidence presented at trial is relevant, Fed. R. Evid. 401, and that it is more
probative than prejudicial, Fed. R. Evid. 403. When a witness is brought back to testify “before
the defendant has presented any evidence, it is unlikely that prejudice sufficient to establish an
abuse of discretion can be established.” United States v. Blankenship, 775 F.2d 735, 741 (6th
Cir. 1985).
Given the deference owed to the district court on this issue, and the unique circumstances
surrounding this trial, we see no occasion to disturb the district court’s judgment. First, it is not
obvious from the transcript that the government failed to give the defendants notice that it would
recall Haines more than once if it needed to impeach witness testimony. When the government
called Haines, it explained its intent to recall Haines later in the trial “in summary fashion” and
to recall him again “if there is an issue that is brought up.” DE 253, Trial Tr., Page ID 1134–35.
The government recalled Haines to impeach Presson’s testimony. Presson testified just before
the continuance that he had not been paid by Sandra, but instead that she had merely bought him
dinner. When the trial resumed, the government recalled Haines who testified that Presson’s
testimony was false.
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Second, the district court, better positioned than this court to determine the effect of
allowing Haines to testify a third time, made a reasonable decision. Haines testified a third time
to provide summary testimony. The district court allowed Haines to testify because of the
abnormal “delay [the parties] have encountered,” because the court did not “see really how the
defendants are going to be prejudiced,” and because Haines’s testimony “was relevant,
admissible, and not unduly prejudicial.” DE 321, Trial Tr., Page ID 3290–91; DE 336, Order,
Page ID 4029. The district court’s statements make clear that it considered its role in managing
the trial and avoiding prejudice to the defendants. And the defendants had not yet presented any
evidence when Haines was recalled. See Blankenship, 775 F.2d at 741.
Bryan notes several decisions providing that a district court may “curtail or entirely
preclude questioning as to any matter of questionable relevance.” 18-5607 CA6 R. 33, Appellant
Br., at 34 (quoting United States v. Ferguson, 252 F. App’x 714, 723 (6th Cir. 2007)). Those
decisions accomplish little. District courts have wide latitude over the order of testimony at trial.
Bryan does not point to any decision holding that a district court abused this significant
discretion by allowing a witness to testify a third time under circumstances similar to the
Baileys’ trial.
IV.
All three defendants argue that the government failed to present sufficient evidence for a
rational juror to find the elements of each count beyond a reasonable doubt.
Defendants “bear[] a very heavy burden” when challenging the sufficiency of the
evidence supporting a jury verdict. United States v. Callahan, 801 F.3d 606, 616 (6th Cir. 2015)
(quoting United States v. Jackson, 473 F.3d 660, 669 (6th Cir. 2007)). A conviction will be
upheld where the evidence, “viewed in the light most favorable to the government,” supports the
jury’s verdict. United States v. Chaney, 921 F.3d 572, 589 (6th Cir. 2019) (quoting United States
v. Solorio, 337 F.3d 580, 588 (6th Cir. 2003)). “[C]ircumstantial evidence alone can defeat a
sufficiency challenge.” United States v. Volkman, 797 F.3d 377, 390 (6th Cir. 2015). We are
especially hesitant to disturb a jury verdict when the district court “thoroughly considered and
subsequently denied” a motion of acquittal. United States v. Fisher, 648 F.3d 442, 450 (6th Cir.
Nos. 18-5607/5901/5903 United States v. Bailey Page 15
2011) (quoting United States v. Lee, 359 F.3d 412, 418–19 (6th Cir. 2004)). “[W]e may not
reweigh [the evidence] ‘or substitute our judgment for that of the jury.’” United States v. Smith-
Kilpatrick, 942 F.3d 734, 745 (6th Cir. 2019) (quoting United States v. Martinez, 430 F.3d 317,
330 (6th Cir. 2005)).
A.
A defendant commits health care fraud when she “knowingly and willfully executes . . . a
scheme or artifice to defraud any health care benefit program,” or uses “false or fraudulent
pretenses, representations, or promises,” to obtain money or property of a health benefit
program. 18 U.S.C. § 1347(a). To prove conspiracy to commit health care fraud, “the
government must establish: (1) the existence of an agreement to violate the law; (2) knowledge
and intent to join the conspiracy; and (3) an overt act constituting actual participation in the
conspiracy.” United States v. Hughes, 505 F.3d 578, 593 (6th Cir. 2007). Direct evidence of
intent to commit fraud is not necessary—circumstantial evidence from which a jury could draw
reasonable inferences of intent to commit fraud will suffice. United States v. Washington,
715 F.3d 975, 980 (6th Cir. 2013). “[O]nce the existence [of] a conspiracy is shown, the
evidence linking an individual defendant to that conspiracy need only be slight.” United States
v. Potter, 927 F.3d 446, 453 (6th Cir. 2019) (second alteration in original) (quoting United States
v. Caver, 470 F.3d 220, 233 (6th Cir. 2006)).
The evidence of the Baileys’ agreement to defraud Medicare is voluminous and indicates
that the Baileys agreed to enrich themselves by artificially increasing their sales of DMEs—and
the sales commissions they received—by selling power wheelchairs to individuals insured by
Medicare who did not qualify for power wheelchairs.
There is also ample evidence to link each of the Baileys to the conspiracy. Sandra sold
power wheelchairs to individuals who did not have mobility issues by falsely telling those
individuals that the power wheelchair would be free and that they might not have an opportunity
to obtain one later. And Sandra circumvented the requirement that the equipment be deemed
medically necessary by telling Perry that Perry did not need to evaluate patients in person to
prescribe a power wheelchair. Sandra paid Mallard to confirm her lie to Perry and to forge
Nos. 18-5607/5901/5903 United States v. Bailey Page 16
portions of Perry’s paperwork. For Sandra’s sales, Bryan forged co-insurance forms to ensure
that the power wheelchair was free for the customers. And Bryan sometimes accompanied
Sandra on trips to make sales. Calvin also accompanied Sandra on trips to make sales, and
Calvin received commissions for some sales, even though he did not make the sale himself.
The evidence also reflects a number of overt acts in furtherance of the conspiracy,
including: testimony from several individuals that Sandra paid them in exchange for referrals;
Vega’s testimony that she witnessed Bryan forge paperwork related to a power wheelchair order;
and Calvin’s billing to Apple a motel room he and Sandra used to sell power wheelchairs for
DuraTech.
Bryan argues that without admission of the call between Wiggins and Winbush the
government lacks sufficient evidence to show that he agreed to participate in the scheme.
Because the statements were properly admitted, that argument lacks merit. But, even without
Wiggins’s statements, ample evidence supports Bryan’s conviction. Jaspan employees witnessed
Bryan forging paperwork associated with purchasing power wheelchairs. At least one customer
testified that Bryan pushed a power wheelchair on her after she repeatedly told him that she did
not want it. And Sensing testified that Bryan told him he forged paperwork relating to Sandra’s
sales.
Calvin argues that the government never proved that he “submitt[ed] false claims or that
he agreed to pay kickbacks to get referrals for healthcare benefits.” 18-5901 CA6 R. 41,
Appellant Br., at 19. But one referrer testified that Calvin paid him a kickback. And Calvin
accepted sales commissions for sales of power wheelchairs to individuals he never met. A jury
could reasonably conclude that Calvin’s acceptance of those commissions amounted to
knowledge of and intent to join the conspiracy.
Sandra argues that “[t]he Government never proved with whom [Sandra] agreed to
commit healthcare fraud or to promote an illegal kickback scheme.” 18-5903 CA6 R. 32,
Appellant Br., at 37. The record is simply to the contrary. Sufficient evidence supported
Sandra’s, Calvin’s, and Bryan’s convictions for conspiracy to commit healthcare fraud.
Nos. 18-5607/5901/5903 United States v. Bailey Page 17
B.
Next, Sandra challenges the sufficiency of the evidence for her conviction on five counts
of health care fraud, one count each for her transactions with individual DME customers, one of
whom is Winbush.
There was ample evidence of Sandra’s use of false pretenses or representations to
artificially increase her sales of DMEs and therefore increase her sales commissions. Three
individuals testified that Sandra sold them power wheelchairs that they did not need and rarely
used. Each individual’s paperwork stated that Perry prescribed their wheelchair, but Perry did
not examine any of the patients in person. Perry believed that she could prescribe wheelchairs to
individuals that she had not examined in person because Sandra told her so—a lie Sandra paid
Mallard to confirm to Perry. Winbush testified that Sandra purchased him a cane to give the
false impression that he struggled walking. Another customer testified that Sandra sold him and
his wife power wheelchairs that they did not need by falsely telling them that, if then-President
Obama was re-elected, they would be unable to buy power wheelchairs. A jury could reasonably
infer from the evidence of Sandra’s false pretenses that she intended to defraud Medicare for her
own financial gain.
Sandra’s attempts to avoid this conclusion fail. She argues that “it is undisputed that each
of the patients that received wheelchairs signed their own paperwork indicating the information
therein was true.” 18-5903 CA6 R. 32, Appellant Br., at 32. But evidence at trial demonstrated
that Bryan was falsifying co-insurance information on the paperwork after patients had signed.
Sandra also argues that ensuring Medicare compliance was someone else’s job. But Sandra
visited many of the patients to whom she sold power wheelchairs and should have noticed that
they did not struggle with mobility. For example, one customer testified that he was taking care
of the children at the daycare he and his wife ran when Sandra visited to sell them power
wheelchairs. And Sandra distributed back braces to individuals gathered at another customer’s
home knowing that none had seen a doctor to be prescribed a back brace. Finally, there is
voluminous evidence of Sandra’s calculated efforts to circumvent the rules governing the
benefits program. Sufficient evidence supported each of Sandra’s convictions for health care
fraud.
Nos. 18-5607/5901/5903 United States v. Bailey Page 18
C.
Sandra also challenges her convictions for nine counts of illegal remuneration involving
health care fraud. It is a crime to “knowingly and willfully offer[] or pay[] any remuneration
(including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in
kind to any person to induce such person to refer an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which payment may be made in whole or
in part under a Federal health care program.” 42 U.S.C. § 1320a-7b(b)(2)(A). Sandra’s nine
counts represent charges for payments to eight individuals; two charges are for payments to
Winbush. All but one individual testified at trial that Sandra paid them. Winbush testified at
trial that Sandra gave that individual an envelope full of money after she brought Sandra
wheelchair patients. A jury could reasonably infer that Sandra made these payments to induce
the individuals to refer customers to Sandra. Sufficient evidence supports each of Sandra’s
convictions for illegal remuneration involving health care fraud.
D.
Finally, Bryan challenges his conviction for wire fraud. A defendant commits wire fraud
when he (1) knowingly and willfully, (2) participates in a scheme to defraud or obtain money or
property by means of false or fraudulent pretenses, and (3) uses interstate wire communications
to further that scheme. 18 U.S.C. § 1343.
Ample evidence supports Bryan’s conviction for wire fraud. Sensing testified that he and
Bryan participated in a scheme to defraud Medicare by selling power wheelchairs to individuals
for whom the device was not necessary. Sensing further testified that he faxed paperwork to
Bryan containing forgeries and that Bryan was aware that the documents contained forgeries.
And Sensing testified that Bryan faxed him back documents with instructions on how to best
further falsify the paperwork.
V.
In yet another alleged error related to the lengthy continuance, all three defendants
contend that the district court abused its discretion in allowing the government to play an edited
Nos. 18-5607/5901/5903 United States v. Bailey Page 19
audio recording during its case-in-chief. The eight-minute tape combined portions of various
recorded phone calls between the defendants and co-conspirators that had already been entered
into evidence in their entirety. Some of the phone calls had already been played for the jury
before the break. We review the district court’s decision to permit the government to play the
tape for abuse of discretion. United States v. Harris, 881 F.3d 945, 950 (6th Cir. 2018). The
district court abuses it discretion when it relies on a clear error of fact or improperly interprets or
applies the law. United States v. Kilpatrick, 798 F.3d 365, 378 (6th Cir. 2015). Even where a
district court errs, we will order a new trial only if the error affected the defendants’ substantial
rights or materially affected the verdict. Id. While the district court technically erred in failing
to provide a limiting instruction to the jury before allowing the government to play the tape, the
error was harmless.
The Federal Rules of Evidence allow a party to introduce “a summary, chart, or
calculation to prove the content of voluminous writings, recordings, or photographs that cannot
be conveniently examined in court,” so long as the proponent makes the originals or duplicates
available for examination and can, if called upon, produce them in court. Fed. R. Evid. 1006.
A party seeking the admission of a summary under Rule 1006 must demonstrate, inter alia, that
the recordings are “so ‘voluminous’ that they ‘cannot conveniently be examined in court’ by the
trier of fact” and that the summary is accurate and nonprejudicial. United States v. Bray,
139 F.3d 1104, 1109 (6th Cir. 1998) (quoting United States v. Seelig, 622 F.2d 207, 214 (6th Cir.
1980)).
“[T]he summary should be accompanied by a limiting instruction which informs the jury
of the summary’s purpose and that it does not constitute evidence.” United States v. Vasilakos,
508 F.3d 401, 412 (6th Cir. 2007). Because summary evidence poses risks that “[t]he jury might
rely upon the alleged facts in the summary as if these facts had already been proved,” that the
jury will use the summary “as a substitute for assessing the credibility of witnesses,” or that the
summary might “emphasiz[e] too much certain portions of the Government’s case,” district
courts are to provide juries a limiting instruction whenever summary evidence is presented.
United States v. Scales, 594 F.2d 558, 564 (6th Cir. 1979).
Nos. 18-5607/5901/5903 United States v. Bailey Page 20
The defendants first argue that the tapes were not properly admitted because the
government did not show that the full tapes were so voluminous that they could not be played.2
“There is no requirement in Rule 1006, however, that it be literally impossible to examine the
underlying records before a summary or chart may be utilized.” Scales, 594 F.2d at 562. And
other circuits have permitted use of a summary tape under Rule 1006 where there were twelve
hours of tapes. United States v. Anderson, 105 F.3d 670, at *2 (10th Cir. 1996) (unpublished
table decision).
Here, there were about two hours of phone call recordings and seven hours of video
recordings. Haines testified that there were multiple hours of recordings and that the content of
the recordings was voluminous. Based on that record, we cannot conclude that the district
court’s factual finding that the records were voluminous was clearly erroneous. And we have
previously rejected the defendants’ argument that, because the jury had already heard some of
the recordings in the summary tape, the recordings cannot be voluminous. See Scales, 594 F.2d
at 562.
The defendants next argue that the summary tape was prejudicial, especially since the
district court offered no limiting instruction. The government counters that a limiting instruction
was not necessary because the summary tape included snippets of recordings already in evidence
and therefore the traditional risks of prejudice from summary testimony were not present. That
is not entirely correct. While the summary tape included recordings of calls already in evidence,
Haines’s testimony that the calls fell into four categories provided additional characterization of
the calls. For example, one category was “calls about whether or not Sandra Bailey actually
knew what she was doing was wrong.” DE 321, Trial Tr., Page ID 3380. There was a risk the
jury would treat Haines’s characterizations as evidence. And Haines’s characterizations did
serve to “emphasiz[e]” some of the government’s main contentions. Scales, 594 F.2d at 564.
A jury instruction would have helped ameliorate the risk of prejudice to the Baileys.
2Sandra also argues that the government did not prove that each of the underlying tapes was admissible or
that Haines supervised the production of the tape. Neither argument has merit. As to admissibility, the defendants’
chief issue with the summary tape is that most of the tape’s content was already played during trial and all of the
underlying tapes were entered into evidence. As to Haines’s supervision of the tape’s creation, Haines testified that
he supervised the creation of the tape.
Nos. 18-5607/5901/5903 United States v. Bailey Page 21
Moreover, the government’s argument about how much the summary tape risked
prejudice to the defendants goes to whether the failure to provide a limiting instruction was
harmful error, not whether the district court erred in failing to provide one. Scales requires
district courts to provide juries a limiting instruction whenever summary evidence is presented.
Id. The government presents no case law to the contrary. The district court thus erred when it
permitted the use of summary evidence without a limiting instruction.
That error, however, was harmless. We need only vacate the Baileys’ convictions if we
lack “fair assurance that the outcome of [their] trial was not affected by evidentiary error.”
United States v. Rayborn, 491 F.3d 513, 518 (6th Cir. 2007). Here, we have plenty of
assurances. First, the risk of prejudice from this summary tape was not so great as to constitute
harmful error. The recordings on the summary tape were themselves already in evidence. While
the failure to instruct the jury that the summaries were not themselves evidence did increase the
risk that the jury would treat Haines’s characterization of the tape’s contents as conclusive,
defendants had an opportunity to cross examine Haines. See Kilpatrick, 798 F.3d at 383
(suggesting that the risk of prejudice is reduced where defendants are “free to challenge the
accuracy of any summary testimony through cross-examination”). Indeed, Sandra’s attorney
cross examined Haines extensively about how and why he decided to include certain snippets in
the summary tape. Defendants argue that the summary tape was prejudicial because it lacked
context. But, on cross examination, Sandra’s counsel asked Haines if he recalled recordings that
were beneficial to Sandra but not included in the summary tape. Finally, there is ample evidence
of each defendant’s guilt aside from the summary tape. “Given the overwhelming evidence of
the defendants’ guilt, we are satisfied that the court’s failure to instruct on summary testimony
did not affect the outcome of the trial.” Vasilakos, 508 F.3d at 412.
VI.
Calvin and Sandra argue that their trial was marred by a variance—a difference between
the charges in the indictment and the proof offered during trial. See United States v. Kuehne,
547 F.3d 667, 683 (6th Cir. 2008). According to Calvin and Sandra, the government proved two
conspiracies at trial instead of the one alleged: one between them, Perry, and Presson in
Tennessee, and another between Bryan, Dennis Sensing, and Brenda Sensing in Mississippi.
Nos. 18-5607/5901/5903 United States v. Bailey Page 22
Calvin and Sandra agree that, because neither raised the issue before the district court, we
review for plain error. Thus, Calvin and Sandra must show that there was “(1) error, (2) that is
plain, and (3) that affects substantial rights.” United States v. Perez-Martinez, 746 F. App’x 468,
472 (6th Cir. 2018) (quoting United States v. Maliszewski, 161 F.3d 992, 1003 (6th Cir. 1998)).
Calvin and Sandra bear the burden of proving that a variance occurred. Kuehne,
547 F.3d at 683. “Whether single or multiple conspiracies have been shown is usually a question
of fact to be resolved by the jury [and is] to be considered on appeal in the light most favorable
to the government.” United States v. Smith, 320 F.3d 647, 652 (6th Cir. 2003) (quoting United
States v. Schultz, 855 F.2d 1217, 1222 (6th Cir. 1988)). Accordingly, we will find a variance in a
conspiracy case only where “the evidence can reasonably be construed only as supporting a
finding of multiple conspiracies.” Id. (quoting United States v. Warner, 690 F.2d 545, 548 (6th
Cir. 1982)). “The principal considerations in determining the number of conspiracies are the
existence of a common goal, the nature of the scheme, and the overlapping of the participants in
various dealings.” Id. “To prove a single conspiracy, the government need only show that each
alleged conspirator had knowledge of and agreed to participate in what he knew to be a
collective venture directed toward a common goal.” Id. at 653. “Once the existence of a . . .
conspiracy, as charged, has been shown, proof of a formal agreement is unnecessary.” United
States v. Rugiero, 20 F.3d 1387, 1391 (6th Cir. 1994). And, “[a] defendant may be convicted for
a single conspiracy if the evidence supports a finding that he had knowledge or foresight of the
conspiracy’s multiplicity of objectives even where the ‘conspiracy is open-ended . . . and the
specifics of the future crimes . . . is undetermined or at least unknown to the defendant.’” Smith,
320 F.3d at 653 (quoting United States v. Morrow, 39 F.3d 1228, 1234 (1st Cir. 1994)).
Calvin and Sandra argue that the government’s evidence concerning Jaspan’s selling of
power wheelchairs in Northern Mississippi from 2010 through 2013 was proof of a second
conspiracy that “had nothing to do with” them. 18-5901 CA6 R. 41, Appellant Br., at 23. We
disagree. While Calvin and Sandra’s characterization of the evidence is a permissible one, it is
not the only one. See Smith, 320 F.3d at 652. Reviewed for plain error or otherwise, that is not
enough to reverse their convictions. See United States v. Spearman, 186 F.3d 743, 746 (6th Cir.
Nos. 18-5607/5901/5903 United States v. Bailey Page 23
1999) (explaining that the evidence “need not remove every reasonable hypothesis except that of
guilt” (quoting United States v. Vannerson, 786 F.2d 221, 225 (6th Cir. 1986))).
Bryan’s expansion of Jaspan into northern Mississippi, which occurred before Sandra and
Calvin left Jaspan, was consistent with the Baileys’ common goal of enriching themselves by
increasing their sales of—and therefore sales commissions for—power wheelchairs to
individuals insured by Medicare who did not qualify for power wheelchairs. See Smith, 320 F.3d
at 652. Bryan received a $100 commission for every sale made by Dennis Sensing. The jury
could have reasonably concluded that the expansion furthered the Baileys’ common goal by
providing the Baileys with new customers. The nature of the scheme also remained the same.
The scheme used the same methods. Bryan, Sandra, and Calvin continued to sell DMEs to
individuals insured by Medicare who did not qualify. Bryan told Sensing that he used the same
forgery techniques that the two were deploying to sell power wheelchairs in Mississippi to
“tak[e] care of momma.” DE 319, Trial Tr., Page ID 2968. And, even after leaving Jaspan,
Sandra relied on the referrers she had cultivated with Bryan at Jaspan to help her sell DMEs for
DuraTech, Apple, and Orthopaedic Specialties. Members of the conspiracy also overlapped.
See Smith, 320 F.3d at 652. Dennis Sensing was hired by Jaspan before Sandra and Calvin left.
Bryan, Sandra, and Calvin relied on Presson to prescribe DMEs after Sandra and Calvin left
Jaspan. And Wiggins told Winbush in 2013 that she could get in touch with Bryan through
Sandra.
Calvin and Sandra’s argument appears to rest on the fact that they were not employed by
Jaspan for much of Sensing’s criminal conduct. But we have previously held defendants
responsible for a conspiracy where they did not participate in every portion of the conspiracy,
particularly where participants overlapped and were “family who regularly associated with one
another.” Smith, 320 F.3d at 653. Moreover, “[w]here a conspiracy contemplates a continuity of
purpose and a continued performance of acts, it is presumed to exist until there has been an
affirmative showing that it has terminated; and its members continue to be conspirators until
there has been an affirmative showing that they have withdrawn.” United States v. Hamilton,
689 F.2d 1262, 1268 (6th Cir. 1989) (quoting United States v. Mayes, 512 F.2d 637, 642–43 (6th
Cir. 1975)). Here, Calvin and Sandra point to no evidence that they terminated their conspiracy
Nos. 18-5607/5901/5903 United States v. Bailey Page 24
with Bryan. Indeed, after Calvin and Sandra left Jaspan, they continued to use the same methods
of defrauding Medicare as Bryan, used the same doctor to prescribe power wheelchairs to
customers as Bryan, and remained in contact with Bryan about obtaining DMEs. Sandra and
Calvin’s convictions are not undermined by a variance.
VII.
Sandra argues that the district court erroneously imposed three sentencing enhancements
resulting in a procedurally unreasonable sentence. Specifically, she challenges the district
court’s imposition of enhancements for leadership, U.S.S.G. § 3B1.1(a), obstruction of justice,
U.S.S.G. § 3C1.1, and mass marketing, U.S.S.G. § 2B1.1(b)(2). Generally, when reviewing a
district court’s decision to apply a sentencing enhancement, we review the district court’s factual
findings for clear error and its legal conclusions de novo. United State v. Angel, 576 F.3d 318,
320 (6th Cir. 2009). We agree with the district court’s imposition of the leadership and
obstruction of justice enhancements. But, because the district court employed the wrong legal
standard when imposing the mass marketing enhancement, we vacate Sandra’s sentence.
A.
The Sentencing Guidelines instruct a district court to increase a defendant’s offense level
by four if the defendant was “an organizer or leader of a criminal activity that involved five or
more participants or was otherwise extensive.” U.S.S.G. § 3B1.1(a). We authorize an enhanced
penalty based on the size of the criminal organization. United States v. Anthony, 280 F.3d 694,
700 (6th Cir. 2002). Specifically, “we consider ‘whether the combination of knowing and
countable non-participants is the functional equivalent of an activity carried out by five
criminally responsible participants.’” United States v. Myers, 854 F.3d 341, 358 (6th Cir. 2017)
(quoting Anthony, 280 F.3d at 699–701). The enhancement may be appropriate when the
defendant recruits accomplices to the crime and pays intermediaries for their work. United
States v. Garcia, 20 F.3d 670, 674 (6th Cir. 1994). And we have upheld the imposition of the
enhancement where a “scheme was quite extensive inasmuch as it involved the ‘unknowing
services of many outsiders.’” United States v. Olive, 804 F.3d 747, 759 (6th Cir. 2015).
Nos. 18-5607/5901/5903 United States v. Bailey Page 25
Here, the district court adopted the finding of the presentence report, which stated, in
relevant part:
Adjustment for Role in the Offense: The defendant was an organizer or leader of
a criminal activity that involved five or more participants or was otherwise
extensive; therefore, four levels are added. USSG §3B1.1(a). During the
conspiracy, the defendant was instrumental in organizing this conspiracy. She
was able to utilize hundreds of patients due to directing numerous individuals in
giving her patient referrals. She also obtained a sales position for Calvin Bailey,
who had little if any sales experience, and she sold wheelchairs and back braces
for him.
DE 369, Presentence Report, Page ID 4296. The district court agreed with that finding,
explaining “[a]s is stated in the report, it does appear based upon the testimony that a large
number of, the report says hundreds of patients. I believe the total number was above 600.” DE
426, Sentencing Tr., Page ID 5407.
Sandra contends that the district court relied on an impermissible factor—the number of
victims—in determining her role in the offense. That is incorrect. The district court appeared to
be restating, albeit clumsily, the presentence report’s rationale for the application of the
enhancement. The presentence report’s rationale does not rely on the number of victims; instead,
it focuses on Sandra’s “ab[ility] to utilize hundreds of patients due to directing numerous
individuals in giving her patient referrals.” DE 369, Presentence Report, Page ID 4296
(emphasis added). When the many referrers are counted alongside Mallard, Presson, Calvin, and
Bryan, the operation was certainly equivalent to “an activity carried out by five criminally
responsible participants.” Myers, 854 F.3d at 358. That is an adequate basis for imposition of
the leadership enhancement.
B.
Sandra also argues that the district court erred in imposing a sentence enhancement for
obstruction of justice. See U.S.S.G. § 3C1.1. The precise standard of review for a district
court’s decision to impose the obstruction of justice enhancement is unclear. See United States
v. Thomas, 933 F.3d 605, 608–10 (6th Cir. 2019). Some panels have reviewed the district
court’s determination that certain conduct constitutes obstruction de novo, while other panels
Nos. 18-5607/5901/5903 United States v. Bailey Page 26
have reviewed the same question for clear error. Id. We need not settle the matter now because
the district court’s decision to impose the enhancement survives even de novo review.
The Sentencing Guidelines instruct district courts to impose a two-level increase to the
defendant’s offense level when a defendant has willfully obstructed the investigation of her
offense and her obstructive conduct related to that offense. U.S.S.G. § 3C1.1. Application notes
provide a non-exhaustive list of examples of the conduct to which the enhancement was intended
to apply and not apply. Id. § 3C1.1 cmt. n.3. “[U]nlawfully influencing a . . . witness . . . or
attempting to do so;” “suborning, or attempting to suborn perjury . . . if such perjury pertains to
conduct that forms the basis of the offense of conviction;” and “providing a materially false
statement to a law enforcement officer that significantly obstructed or impeded the official
investigation” are examples of conduct to which the enhancement should apply. Id. § 3C1.1 cmt.
n.4. Material statements are those that “if believed, would tend to influence or affect the issue
under determination.” Id. § 3C1.1 cmt. n.6. We recently clarified that material lies warrant a
sentencing enhancement because they require that “[t]he United States devote[] time and
resources to disprove them.” Thomas, 933 F.3d at 611.
The district court identified two instances of obstructive conduct that justify the
enhancement’s application. Because at least one represents an attempt by Sandra to cause
another to materially lie to investigators, we find no error in the district court’s decision to
impose the obstruction of justice enhancement.
Sandra attempted to cause Winbush to lie to investigators in a conversation on February
6, 2014. Sandra had previously told Winbush not to tell others about the money she gave him
because “it could get [her] into trouble.” 18-5607 CA6 R. 44, Appellee App., CD Ex. 49
(1:11:00 to 1:11:54). Then, on February 6, 2014, Sandra called Winbush and told him that she
was under investigation and that the money she paid him was for his driver’s license. The
district court found that “it would be difficult for reasonable minds not to conclude that there was
a[n] attempt by Ms. Bailey to obstruct justice, based on what she said to Ronnie Winbush.” DE
426, Sentencing Tr., Page ID 5410. We agree.
Nos. 18-5607/5901/5903 United States v. Bailey Page 27
Sandra’s conduct rises to the level of obstruction. Sandra was charged with violating the
anti-kickback statute, requiring the government to establish that she “knowingly and willfully
offer[ed] or pa[id] any remuneration . . . to any person to induce such person to refer an
individual . . . for the furnishing of any item or service for which payment may be made in whole
or in part under a Federal health care program.” 42 U.S.C. § 1320a-7b(b)(2)(A). Had Winbush
told investigators that Sandra had only given him money to get a driver’s license, investigators
would have needed to “devote[] time and resources” to proving that Sandra actually gave
Winbush the money for referrals. Thomas, 933 F.3d at 611.
Sandra’s conduct is akin to the conduct in United States v. Huntley, 530 F. App’x
454 (6th Cir. 2013). There, Huntley, who was charged with possessing a firearm as a felon,
asked two unidentified individuals to have another individual claim possession of the gun. Id. at
455–56. We held that his conduct rose to the level of obstruction because it represented “a
substantial step toward [Huntley’s] goal of ” avoiding responsibility for his offense. Id. at 458.
Similarly, Sandra’s conduct was a substantial step toward avoiding responsibility for providing
kickbacks in exchange for referrals in violation of the anti-kickback statute.
Sandra argues that her conversation with Winbush cannot constitute obstructive conduct
because she was unaware that she was under investigation during the call. But Sandra stated that
she was aware of the FBI investigation during the call. Besides, “[o]bstructive conduct that
occurred prior to the start of the investigation of the instant offense of conviction may be covered
. . . if the conduct was purposefully calculated, and likely, to thwart the investigation or
prosecution of the offense of conviction.” U.S.S.G. § 3C1.1 cmt. n.1.
C.
Finally, Sandra argues the district court erred by imposing the mass-marketing
sentence enhancement when she engaged only in word-of-mouth solicitation. U.S.S.G.
§ 2B1.1(b)(2)(A)(ii). Our circuit has yet to decide whether the mass-marketing enhancement can
apply to word-of-mouth solicitation. We conclude it cannot.
The Sentencing Guidelines instruct district courts to increase the defendant’s offense
level by two if “the offense . . . was committed through mass-marketing.” U.S.S.G.
Nos. 18-5607/5901/5903 United States v. Bailey Page 28
§ 2B1.1(b)(2)(A)(ii). The Guidelines’ commentary further provides that “‘mass-marketing’
means 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 [] purchase
goods or services.” Id. § 2B1.1 cmt. n.4(A). Other circuits have explained that the
commentary’s invocation of “telephone, mail, the Internet” suggests that the enhancement’s
application turned on the method the defendant used to market her goods, not the number of
victims reached by way of the marketing. United States v. Heckel, 570 F.3d 791, 794 (7th Cir.
2009); see also United States v. Olshan, 371 F.3d 1296, 1301 (11th Cir. 2004) (“[T]he [mass-
marketing] enhancement focuses on the method of inflicting the harm.”). Specifically, other
circuits look to “the scope and sophistication of the defendant’s fraud.” United States v.
Fredette, 315 F.3d 1235, 1244 n.4 (10th Cir. 2003).
We believe that this is the correct approach. The emphasis on sophistication and scope is
consistent with the text of the Sentencing Commission’s commentary calling for a “plan,
program, promotion, or campaign.” U.S.S.G. § 2B1.1 cmt. n.4(A). And it makes sense. Mass
marketing cannot mean all marketing; rather, the enhancement must punish marketing designed
to more efficiently (i.e., with “sophistication”) defraud a large number of people (i.e., a sufficient
“scope”). Fraudulent face-to-face marketing proceeds at the normal pace of fraud and is already
accounted for in the statutes criminalizing fraud; no enhancement is necessary.
The government disagrees, arguing that the commentary’s “other means” language
encompasses word-of-mouth marketing. And the government points us to some Fifth Circuit
decisions interpreting the “other means” language just that way. United States v. Mauskar,
557 F.3d 219, 233 (5th Cir. 2009); United States v. Jackson, 220 F. App’x 317, 332 (5th Cir.
2007). But we do not believe that “other means” sweeps so broadly. To interpret it as such
would be to ignore the traditional interpretive practice of reading ambiguous and broad items in a
list with reference to the more specific items listed. See United States v. Douglas, 634 F.3d 852,
858 (6th Cir. 2011). And, given that many anti-kickback violations involve a defendant paying
others for referrals, such an interpretation risks requiring district courts to apply the mass-
marketing enhancement for nearly all convictions under the anti-kickback statute.
Nos. 18-5607/5901/5903 United States v. Bailey Page 29
Because Sandra’s only marketing was word-of-mouth marketing, the district court erred
in imposing the mass-marketing sentencing enhancement. Accordingly, we vacate Sandra’s
sentence and remand to the district court for resentencing.
VIII.
Finally, Calvin challenges his sentence—both his term of imprisonment and his
restitution amount. The district court found that the loss attributed to Calvin was $2,103,544.81,
producing a sixteen-level increase in Calvin’s offense level. See U.S.S.G. § 2B1.1(b)(1)(I). The
district court also held Calvin jointly responsible with Sandra for restitution in the amount of
$1,391,649.80. While we find no error in the district court’s calculation of Calvin’s restitution
amount, we agree with Calvin that the district court miscalculated his offense level.
Accordingly, we vacate Calvin’s sentence and remand for resentencing.
A.
The Sentencing Guidelines instruct district courts to impose a sixteen-level increase to a
defendant’s offense level if the loss caused by the conduct exceeds $1,500,000. U.S.S.G.
§ 2B1.1(b)(1)(I). When determining the amount of loss attributable to the defendant in a jointly
undertaken criminal activity, the district court should include only loss that resulted from the
defendant’s own criminal conduct and any conduct of others that was “(i) within the scope of the
jointly undertaken criminal activity, (ii) in furtherance of the criminal activity, and
(iii) reasonably foreseeable in connection with that criminal activity.” Id. § 1B1.3(a)(1)(B).
Calvin argues that the district court considered conduct outside his relevant conduct when
setting his loss amount. “[W]hether conduct constitutes ‘relevant conduct’ . . . is reviewed de
novo, while the underlying factual findings regarding whether that conduct is ‘within the scope’
of, ‘in furtherance of,’ and ‘reasonably foreseeable’ in connection with jointly undertaken
criminal activity are reviewed for clear error.” United States v. Moody, 787 F. App’x 857, 868
(6th Cir. 2019) (alteration in original) (quoting United States v. Donadeo, 910 F.3d 886, 893 (6th
Cir. 2018)).
Nos. 18-5607/5901/5903 United States v. Bailey Page 30
“[T]he scope of conduct for which a defendant can be held accountable under the
sentencing guidelines is significantly narrower than the conduct embraced by the law of
conspiracy.” United States v. Swiney, 203 F.3d 397, 402 (6th Cir. 2000) (quoting United States
v. Okayfor, 996 F.2d 116, 120 (6th Cir. 1993)). Instead, for purposes of determining relevant
conduct, the scope is limited to “the scope of the criminal activity that the particular defendant
agreed to jointly undertake.” Donadeo, 910 F.3d at 895. A few months after the district court
sentenced Calvin, we “[took] the opportunity to state more clearly what is relevant when
determining” the scope of criminal activity that the defendant agreed to jointly undertake. Id.
We counseled district courts to consider “(1) the existence of a single scheme; (2) similarities in
modus operandi; (3) coordination of activities among schemers; (4) pooling of resources or
profits; (5) knowledge of the scope of the scheme; and (6) length and degree of the defendant’s
participation in the scheme.” Id. (quoting United States v. Salem, 657 F.3d 560, 564 (7th Cir.
2011)).
While we cannot fault the district court for failing to methodically apply the then-
unannounced Donadeo factors, we must agree with Calvin that the district court employed too
broad a standard for determining his relevant conduct. At the sentencing hearing, the
government and Calvin disputed whether Calvin could be held responsible for the full amount of
loss occasioned by sales of power wheelchairs accomplished by Sandra paying Cindy Mallard to
forge prescriptions in Perry’s name. The district court sided with the government, explaining:
Mr. Bailey was found guilty of . . . conspiracy. And as the attorneys are well
aware, once you’re involved in a conspiracy -- a conspiracy is really nothing more
than an agreement to engage in unlawful activity. And then once that occurs, and
you’re a part of the conspiracy, then you can be held liable for the acts and actions
of the other co-conspirators throughout the duration of the conspiracy, unless
there is some indication that you voluntarily withdraw or remove yourself as a
part of the conspiracy. And we don’t, to my knowledge, we don’t have that type
of situation in this case.
DE 425, Sentencing Tr., Page ID 5286. While the district court’s description of conspiracy
liability is correct, we have explained that “relevant conduct” in jointly undertaken criminal
activity for Sentencing Guidelines purposes is not as broad as conspiracy liability. Donadeo,
910 F.3d at 895; Swiney, 203 F.3d at 402. Instead, under the Sentencing Guidelines, the
Nos. 18-5607/5901/5903 United States v. Bailey Page 31
defendant can only be held accountable for the “the criminal activity that the particular defendant
agreed to jointly undertake.” Donadeo, 910 F.3d at 895. This error of law requires that we
vacate Calvin’s sentence.
The government disagrees, arguing that the Donadeo factors produce the same result.
Were the district court’s error that it did not anticipate and address the Donadeo factors, remand
would be unnecessary. See Moody, 787 F. App’x at 868–69. But our qualm with the district
court is that it applied the wrong legal standard. The district court’s improper calculation of the
loss amount was a procedural error that resulted in a sixteen-level increase in Calvin’s sentence.
Remand is therefore necessary. United States v. Warshak, 631 F.3d 266, 328 (6th Cir. 2010).
B.
Calvin also argues that the errors that marred the district court’s amount of loss finding
also infected the district court’s restitution order.3 We review the district court’s restitution order
for abuse of discretion. United States v. Bogart, 576 F.3d 565, 569 (6th Cir. 2009). The
government has the burden of proving the amount of restitution by a preponderance of the
evidence. 18 U.S.C. § 3664(e).
Calvin’s argument is unavailing. The district court erred in calculating Calvin’s amount
of loss by using conspiracy principles. But a district court does not err by using conspiracy
principles to determine a defendant’s amount of restitution. Indeed, we have previously rejected
a defendant’s argument that he should not be held responsible for restitution in a conspiracy case
because “his particular actions did not cause the victims’ losses.” Bogart, 576 F.3d at 576.
Nor is it incongruous to order an amount of restitution that reflects the loss caused by the
entire conspiracy, even while simultaneously finding an amount of loss that reflects only conduct
closely related to the defendant. The Mandatory Victim Restitution Act (“MVRA”), not the
Sentencing Guidelines, governs restitution awards. 18 U.S.C. § 3663A. And amount of loss and
3Calvin further argues that, because the statutory maximum restitution amount is zero dollars and thus any
restitution award constitutes an increase in a defendant’s statutory maximum restitution sentence, the Sixth
Amendment requires that “a jury, not the judge, must determine the amount of restitution.” 18-5901 CA6 R. 41,
Appellant Br., at 40. This circuit has already held otherwise. United States v. Sosebee, 419 F.3d 451, 461 (6th Cir.
2005).
Nos. 18-5607/5901/5903 United States v. Bailey Page 32
restitution serve different purposes. “[Restitution]’s purpose is to make the victims whole;
conversely, the Sentencing Guidelines serve a punitive purpose.” United States v. Gossi,
608 F.3d 574, 581 (9th Cir. 2010) (quoting United States v. Gordon, 393 F.3d 1044, 1052 n.6
(9th Cir. 2004)). That a defendant played a minor role in a conspiracy and warrants a lesser
punishment does not change the amount of loss sustained by the conspiracy’s victims. Finally,
the MVRA has its own method of responding to the unique issues of culpability posed by
conspiracy: where multiple defendants are responsible for a victim’s loss, 18 U.S.C. § 3664(h)
allows the district court to make multiple defendants jointly responsible for payment of
restitution or to apportion to each defendant her own share.
Finally, Calvin argues that the district court should have addressed his argument that the
restitution amount should be apportioned between him and Sandra, not applied jointly. But we
have previously held that, while a district court “has the option” to apportion restitution payment
among defendants in conspiracy cases, it “is not required to do so.” Bogart, 576 F.3d at 576; see
also United States v. Kolodesh, 787 F.3d 224, 242 (3d Cir. 2015).
IX.
For the reasons stated, we affirm the convictions of Bryan, Sandra, and Calvin Bailey.
We also affirm the district court’s restitution order to Sandra and Calvin. We vacate, however,
the sentences of Sandra and Calvin and remand for resentencing in accord with this opinion.