United States v. Higdon, William J. ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 07-3951
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
WILLIAM J. HIGDON,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Southern District of Indiana, Evansville Division.
No. 3EV 07-01-CR-01 Y/H—Richard L. Young, Judge.
____________
ARGUED JUNE 10, 2008—DECIDED JULY 9, 2008
____________
Before POSNER, COFFEY, and FLAUM, Circuit Judges.
POSNER, Circuit Judge. The defendant pleaded guilty
to defrauding the Indiana Medicaid program of $294,000,
in violation of 18 U.S.C. § 1347, which criminalizes
schemes to defraud health care benefit programs. The
guideline sentencing range, as the parties agreed and
the judge determined, was 18 to 24 months. The
presentence investigation report, and the prosecution,
recommended that the defendant be sentenced within
the guidelines range, but the district judge sentenced
him to 60 months (as well as to pay restitution of the
amount he had stolen). The defendant appeals only the
prison sentence.
2 No. 07-3951
A high school graduate (with some college), the
defendant was working as a laborer and living with his
mother, who operated a small company that transports
Medicaid patients to and from medical facilities, when
she asked him to take over the company. He was 23 at the
time (he was 26 when he was sentenced). He deliberately
overbilled Medicaid.
The district judge appears to believe that the sen-
tencing guidelines treat white-collar criminals too
leniently. It is apparent from Kimbrough v. United States,
128 S. Ct. 558, 570 (2007), that the regime created by the
Booker case, which demoted the guidelines from mandatory
to advisory status, permits a sentencing judge to have
his own penal philosophy at variance with that of the
Sentencing Commission. United States v. Orsburn, 525
F.3d 543, 547 (7th Cir. 2008); United States v. Bush, 523
F.3d 727 (7th Cir. 2008); United States v. Taylor, 520 F.3d
746 (7th Cir. 2008); United States v. Rodriguez, 527 F.3d 221,
227 (1st Cir. 2008); United States v. Evans, 526 F.3d 155, 161
(4th Cir. 2008). As a matter of prudence, however, in
recognition of the Commission’s knowledge, experience,
and staff resources, an individual judge should think
long and hard before substituting his personal penal
philosophy for that of the Commission. The guidelines are
advisory, but they are not advisory in the sense in which a
handbook of trial practice is, which a trial lawyer could
ignore completely if he wanted to. The judge must not
merely compute the guidelines sentence, he must give
respectful consideration to the judgment embodied in the
guidelines range that he computes. That is why the scope
of judicial review varies with the extent to which the
judge’s out-of-guidelines sentence departs from the
guidelines range; the greater the departure, the more
No. 07-3951 3
searching will be the appellate review of the judge’s
exercise of his sentencing discretion. Gall v. United States,
128 S. Ct. 586, 597 (2007); United States v. Omole, 523 F.3d
691, 697 (7th Cir. 2008); United States v. Padilla, 520 F.3d 766,
775 (7th Cir. 2008); United States v. Wachowiak, 496 F.3d 744,
749-50 (7th Cir. 2007).
The sentencing transcript in this case is laced with
apparent mistakes and misunderstandings by the district
judge that may have been decisive in his imposing a
sentence almost three times the length of the midpoint
of the guidelines range (60 months versus 21 months).
1. The judge appears to have believed that Medicaid
fraud is more serious than other fraud because it is fraud
against the government (Medicaid is a joint federal-state
program). But the statute under which the defendant was
convicted punishes frauds only against health care benefit
programs, and all but one of the reported appellate cases
that we have found involve public programs, such as
Medicare or Medicaid. E.g., United States v. Hunt, 521 F.3d
636, 641 n. 2 (6th Cir. 2008); United States v. Davis, 490 F.3d
541, 544 (6th Cir. 2007); United States v. Hickman, 331 F.3d
439, 444 (5th Cir. 2003). The one is United States v. Whited,
311 F.3d 259, 264 (3d Cir. 2002), and it squarely holds that
private programs are covered. In two cases, the very
applicability of the statute to nonpublic programs is treated
as an open question. United States v. Redcorn, 528 F.3d
727 (10th Cir. 2008); United States v. Jones, 471 F.3d 478, 481
n. 4 (3d Cir. 2006). We cannot tell whether the judge
realized that the statute was directly and per-
haps solely (though we are strongly inclined to agree
with Whited that the statute reaches frauds against private
health care benefit programs) directed at the defendant’s
crime, and disagreed merely with the guidelines sen-
4 No. 07-3951
tence under it, or thought that the defendant was being
punished under a general fraud statute and that his
violation of it was particularly egregious because it in-
volved fraud against a public program of health benefits.
2. The judge appears to have believed that Medicaid
fraud is also more serious than other fraud because the
intended beneficiaries of the Medicaid program are the
elderly and the poor. It is not a program for the elderly (the
judge may have confused Medicaid with Medicare), but
for a subset of the poor. More to the point, fraud against the
Medicaid program is not fraud against Medicaid beneficia-
ries; their benefits are unaffected. There is no suggestion
that without prison sentences above the applicable guide-
lines range, fraud against the Medicaid program will reach
a point at which benefits have to be cut.
3. The judge thought that the defendant in committing
the fraud had been motivated by “personal greed”; doubt-
less; but that is true of most frauds, and so did not distin-
guish the defendant from other violators of 18 U.S.C.
§ 1347. Moreover, the probation officer said that he had
visited the house where the defendant lives with
his mother and the “furnishings were noted to be mod-
est,” and “no furnishings, appliances, or conven-
iences . . . appeared extravagant,” which distinguishes
the defendant’s criminal conduct from the common case
in which defrauders live lavishly on their stolen funds.
4. The judge thought that if everybody could steal from
the government with impunity, this “would lead to
chaos in the business community.” Doubtless, but the judge
provided no grounds for thinking that a sentence within
the guidelines range would have so little deterrent effect
that it would amount to an announcement of open season
on Medicaid fraud.
No. 07-3951 5
5. The judge seemed to believe that the defendant was
remorseful and would not commit another crime. The
transcript of the sentencing hearing, right up until the
imposition of the sentence, suggests that the prosecutor
and the judge (and of course defense counsel) believed
that the defendant had learned his lesson, and one would
have expected the judge to explain why this would not
weigh against the imposition of a sentence above the
guidelines range.
6. The reason the judge disregarded the preceding
point may have been his belief that the defendant would
benefit from a long prison sentence because it would
enable him to obtain “needed educational, vocational
training, medical care or other correctional treatment.” But
no need for any such things has been demonstrated. The
defendant has supported himself as a factory worker,
construction worker, and carpenter, and is young and
in good health. The judge did not explain why a guide-
lines sentence would not be long enough to enable the
defendant to reap whatever benefits one might expect from
living in a federal prison, and of course the longer his
prison term, the costlier his punishment to the federal
government and the less likely he is to earn enough
money to be able to pay all or (more realistically) a sig-
nificant portion of the restitution ordered by the judge.
Moreover, the judge did not mention 18 U.S.C. § 3582(a),
which provides that in determining the length of impris-
onment the court must “consider the factors set forth in
section 3553(a) to the extent that they are applicable,
recognizing that imprisonment is not an appropriate means
of promoting correction and rehabilitation” (emphasis added).
7. The judge thought the complexity of the fraud required
an out-of-guidelines sentence. But complexity (“sophis-
6 No. 07-3951
ticated means”) is a guidelines factor, U.S.S.G.
§ 2B1.1(b)(9)(C), and neither the government, the probation
service, nor the judge suggested adjusting the guidelines
range to take account of the sophistication of the means
employed by the defendant to commit the fraud. In fact,
the fraud was a garden-variety overbilling fraud. The
defendant made no effort to cover his tracks.
8. The judge thought the amount of money that the
defendant had stolen from the Medicaid program was so
great as to require (in combination with the other factors
he mentioned) an out-of-guidelines sentence. Yet the
defendant would have had to steal $20 million from the
program for a sentence of 60 months to be within the
guidelines range. U.S.S.G. § 2B1.1(a)(2), (b)(1)(L). There is
no indication that the judge appreciated how far he was
going against the judgment of the Sentencing Commission.
9. Finally, the judge thought the heavy sentence was
necessary “to avoid unwarranted sentence disparities
among defendants with similar records who have been
found guilty of similar conduct.” But he did not mention
any sentence that he has imposed in another case. Neither
party has furnished us with any information con-
cerning previous sentences imposed by this district
judge, and our own research has not revealed any
previous case in which the judge sentenced a defendant
for violating 18 U.S.C. § 1347. Just the other day we re-
viewed a sentence of 36 months for a violation of the same
statute that caused a loss of $500,000 to the Medicare
program. United States v. Wallace, No. 07-4052, 2008
WL 2583029 (7th Cir. July 1, 2008). That was 40 percent
lower than the sentence in this case, for a fraud that
cost the government more than twice as much. “Sen-
tencing disparities are at their ebb when the Guidelines
No. 07-3951 7
are followed, for the ranges are themselves designed to
treat similar offenders similarly. That was the main goal of
the Sentencing Reform Act. The more out-of-range sen-
tences that judges impose after Booker, the more disparity
there will be.” United States v. Boscarino, 437 F.3d 634, 638
(7th Cir. 2006).
The last two mistakes or omissions, and also the first,
could reflect the district judge’s possession of a personal
penal philosophy at variance with the Sentencing Com-
mission’s; and that, as we said, is permitted. But we
can have no basis for confidence in such an inference,
and the other six mistakes or misunderstandings that we
have identified seem unrelated to a legitimate philosophi-
cal difference.
We suggest that when a judge decides to impose an out-
of-guidelines sentence—whether it is above or below the
guidelines range—he write out his reasons rather than
relying entirely on the transcript of his oral remarks to
inform the reviewing court of his grounds. The discipline
of committing one’s thoughts to paper not only promotes
thoughtful consideration but also creates a surer path of
communication with the reviewing court.
The judgment is vacated and the case remanded for
resentencing.
USCA-02-C-0072—7-9-08