United States v. Edgar Shakbazyan

Case: 15-20426 Document: 00513734913 Page: 1 Date Filed: 10/26/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-20426 FILED
October 26, 2016
UNITED STATES OF AMERICA,
Lyle W. Cayce
Clerk
Plaintiff - Appellee
v.
EDGAR SHAKBAZYAN,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
Before REAVLEY, DAVIS, and JONES, Circuit Judges.
EDITH H. JONES, Circuit Judge:
For the 39 days that it was open in 2009, a small Houston clinic
accomplished a lot. It claimed to treat 429 Medicare “beneficiaries,” submitted
approximately 9,300 claims to Medicare, and billed Medicare for $2.1 million.
The clinic, however, was a sham. A vehicle full of “patients” would arrive at
the clinic each day. The driver was paid to transport them, and the
“beneficiaries” were paid to visit the clinic. After acquiring their Medicare
information, the clinic would charge Medicare for thousands of procedures that
were either unnecessary or never performed.
The Government prosecuted several individuals involved in the
enterprise, including defendant-appellant Edgar Shakbazyan, the prime
mover behind the scheme. Shakbazyan pled guilty to a multi-count indictment
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No. 15-20426
and, pursuant to sentence enhancements under the 2009 Sentencing
Guidelines, was sentenced to 97 months of imprisonment.
In this appeal, Shakbazyan challenges his sentence, arguing, among
other things, that the district court erred in applying the 2009 Guidelines,
because only one of the counts involved criminal conduct that occurred after
the effective date of the 2009 Guidelines. He asserts that the use of the 2009
Guidelines to enhance his sentence violates the Ex Post Facto Clause. Finding
no merit to any of his claims, we AFFIRM.
I. BACKGROUND
A grand jury returned a superseding indictment that charged
Shakbazyan with 21 counts related to Medicare fraud: (1) one count of
conspiracy to commit health care fraud “involving 429 patients” under
18 U.S.C. § 1349 (Count 1); (2) 19 counts of health care fraud under
18 U.S.C. § 1347 (Counts 2 through 20); and (3) one count of conspiracy to
violate the anti-kickback provisions of 18 U.S.C. § 371 (Count 21). Count 1
alleged an ongoing conspiracy between “in or about April[] 2009” and “in or
about February[] 2010.” In particular, Count 1 alleged an unindicted co-
conspirator wired $9,700 to another co-conspirator on February 19, 2010. By
contrast, the remaining 20 counts covered conduct that occurred between June
2009 and August 2009. Thus, Count 1 alone extended to February 2010.
These time periods are important in Shakbazyan’s view because a
definition of “victim” was amended in the 2009 Sentencing Guidelines, which
became effective on November 1, 2009. Section 2B1.1(b)(2)(C) of both the 2008
and 2009 Guidelines provided a 6-level sentencing enhancement where the
offense “involved 250 or more victims.” See U.S. Sentencing Guidelines
Manual § 2B1.1(b)(2)(C) (U.S. Sentencing Comm’n 2008); U.S. Sentencing
Guidelines Manual § 2B1.1(b)(2)(C) (U.S. Sentencing Comm’n 2009)
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[hereinafter U.S.S.G.]. But the definitions of “victim” in the commentary
differed. The 2008 commentary defined victim as “(A) any person who
sustained any part of the actual loss . . . ; or (B) any individual who sustained
bodily injury as a result of the offense.” U.S.S.G. § 2B1.1 cmt. n.1 (2008). The
2009 commentary added a new note for purposes of the definition of “victim:”
“[I]n a case involving means of identification[,] ‘victim’ means (i) any victim as
defined in Application Note 1 [the 2008 definition]; or (ii) any individual whose
means of identification was used unlawfully or without authority.” U.S.S.G.
§ 2B1.1 cmt. n.4(E) (2009) (emphasis added).
The amendment features prominently in this case because the
presentence report (PSR) based Shakbazyan’s recommended sentence on the
2009 Guidelines. Ordinarily, the version of the Guidelines in effect on the date
of sentencing is the controlling version, see U.S.S.G. § 1B1.11(a)–(b), unless
doing so would violate the Ex Post Facto Clause. See id. § 1B1.11(b)(1).
Further, the Guidelines’ “one-book rule” forbids piecemeal application of the
Guidelines, requiring instead that only one version of the Guidelines be used.
See id. § 1B1.11(b)(2). The PSR stated that applying the current Guidelines
would violate the Ex Post Facto Clause because a post-offense amendment
enhanced health care fraud computations. Thus, the PSR used the 2009
Guidelines—the version in effect on the date the last offense of conviction (the
Count 1 conspiracy offense) was committed. The PSR, therefore, used the 2009
definition of “victim” and recommended a 6-level enhancement on the
understanding that the fraud involved 250 or more “victims”—429 Medicare
beneficiaries whose identifying information was used “unlawfully.” With that
6-level enhancement, Shakbazyan’s total offense level was 30 with a criminal
history category of I, and his range of imprisonment was 97 to 121 months.
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Without the 6-level enhancement, his range of imprisonment would have been
51 to 63 months.
Shakbazyan objected to the 6-level enhancement on the ground that
using the 2009 definition of “victim” to enhance his sentence on Counts 2
through 21 violated the Ex Post Facto Clause. The district court overruled this
objection, among others, and sentenced Shakbazyan to 97 months of
imprisonment. Shakbazyan timely appealed.
II. ANALYSIS
A. Standard of Review
“We review a district court’s sentencing decision for abuse of discretion.”
United States v. Pringler, 765 F.3d 445, 451 (5th Cir. 2014). However, we
“review[] the district court’s interpretation and application of the Sentencing
Guidelines de novo.” Id. (italics added). And, “when faced with a preserved
constitutional challenge to the Guidelines’ application, our review is de novo.”
United States v. Preciado-Delacruz, 801 F.3d 508, 511 (5th Cir. 2015).
B. Ex Post Facto Clause
Shakbazyan’s principal argument is that using the 2009 Guidelines
definition of “victim” to enhance his sentence violates the Ex Post Facto Clause.
That argument is foreclosed by our precedent.
The provision that “[n]o . . . ex post facto Law shall be passed,” U.S.
Const. art. I, § 9, cl. 3, includes “[e]very law that changes the punishment, and
inflicts a greater punishment, than the law annexed to the crime, when
committed.” Peugh v. United States, 133 S. Ct. 2072, 2077–78 (2013) (quoting
Calder v. Bull, 3 Dall. 386, 390 (1798)). The motivating concern in this
category of ex post facto violations “is not an individual’s right to less
punishment, but the lack of fair notice and governmental restraint when the
legislature increases punishment beyond what was prescribed when the crime
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was consummated.” Weaver v. Graham, 450 U.S. 24, 30, 101 S. Ct. 960, 965
(1981).
Shakbazyan concedes, as he did below, that the 2009 definition of
“victim” “can technically be applied to Count 1 which alleges conduct that
occurred post November of 2009, in February of 2010.” He does not challenge
the Guidelines’ one-book rule that requires one version of the Guidelines to be
applied to all grouped counts, and he does not claim that the 21 counts were
improperly grouped together. Nor does he allege that the post-November 1,
2009 conspiratorial conduct cannot be imputed to him. 1 His complaint,
however, is that the “expanded definition of victim was not in effect during the
[periods covered by] Counts 2 through 21 of the Indictment.” In his view, using
the 2009 definition of “victim” to enhance his sentence constitutes “an
increased retroactive punishment” and thus an Ex Post Facto Clause violation.
This court, along with eight other circuits, 2 has previously rejected
Shakbazyan’s argument. In United States v. Kimler, 167 F.3d 889 (5th Cir.
1999), the court held that “where a sentencing court groups offenses committed
before a change in the sentencing guidelines with offenses after the
1Cf. United States v. Olis, 429 F.3d 540, 545 (5th Cir. 2005) (“This court has held that
conspiracy ‘is a continuing offense’ and that ‘[s]o long as there is evidence that the conspiracy
continued after the effective date of the [amendments to the] guidelines, the Ex Post Facto
Clause is not violated.’ Moreover, unless a conspirator effectively withdraws from the
conspiracy, he is to be sentenced under the amendments to the guidelines, even if he did not
commit an act in furtherance of the conspiracy after the date of the new guidelines, or did
not know of acts committed by other co-conspirators after the date of the new guidelines,
where it was foreseeable that the conspiracy would continue past the effective date of the
amendments.” (citation omitted)).
2 See, e.g., United States v. Pagan-Ferrer, 736 F.3d 573, 598 (1st Cir. 2013) (explaining
that its decision on this point was “consistent with the findings of an overwhelming majority
of our sister circuits.” (citing cases from the Second, Fourth, Fifth, Sixth, Seventh, Eighth,
Tenth, and Eleventh Circuits)); United States v. Kumar, 617 F.3d 612, 626–27 (2d Cir. 2010)
(similarly citing cases).
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amendment, and then applies the amended guideline in determining a
defendant’s appropriate sentence, the Ex Post Facto Clause is not implicated.”
Id. at 893 (italics added). Given the Guidelines’ one-book rule and grouping
rules, “a defendant has notice that the version of the sentencing guidelines in
effect at the time he committed the last of a series of grouped offenses will
apply to the entire group.” Id. at 894–95. That notice eliminates any Ex Post
Facto Clause concerns that may have otherwise existed. Therefore, a
defendant who decides to “continue his illegal activities . . . after the revisions
in the sentencing guidelines” does so at his own peril because “that decision
allow[s] the sentencing court to determine his appropriate sentence with
reference to the guidelines in effect when the last criminal act in the grouped
series was committed without running afoul of the Constitution.” Id. at 893.
Kimler plainly forecloses Shakbazyan’s Ex Post Facto Clause claim. The
conspiracy charged in Count 1 continued well after November 1, 2009. During
that period, the Guidelines gave Shakbazyan adequate notice that his pre-
November 1, 2009 offenses would be grouped with the Count 1 conspiracy
offense, and therefore that the 2009 Guidelines would apply. Indeed, “[i]t was
[Shakbazyan’s] decision to continue his illegal activities related to his . . .
[conspiracy] offense[] after the revisions in the sentencing guidelines, and that
decision allowed the sentencing court to determine his appropriate sentence
with reference to the guidelines in effect when the last criminal act in the
grouped series was committed without running afoul of the Constitution.”
Kimler, 167 F.3d at 893.
Shakbazyan fails to cite Kimler, but he contends that Peugh v. United
States supports his Ex Post Facto Clause claim. It does not. Peugh found an
Ex Post Facto Clause violation where “a defendant [was] sentenced under
Guidelines promulgated after he committed his criminal acts and the new
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version provide[d] a higher applicable Guidelines sentencing range than the
version in place at the time of the offense.” Peugh, 133 S. Ct. at 2078. But
there are clear factual and legal distinctions between Peugh and this case. On
the facts, the defendant in Peugh committed all of his alleged crimes in 1999
and 2000, before the promulgation of the 2009 Guidelines under which he was
sentenced. See id. at 2078–79. In contrast, Shakbazyan concedes that one of
the crimes to which he pled guilty extended past the effective date of the 2009
Guidelines. Additionally, as just explained, this case, unlike Peugh, does not
implicate the Ex Post Facto Clause’s concern with “the lack of fair notice . . .
when the legislature increases punishment beyond what was prescribed when
the crime was consummated.” Weaver, 450 U.S. at 30, 101 S. Ct. at 965. Peugh
had no notice of Guidelines enhancements that would be promulgated a decade
after he committed his crimes, but Shakbazyan was on notice of the Guidelines’
one-book and grouping rules that would apply one version of the Guidelines to
his pre- and post-amendment criminal conduct. Peugh does not carry the day
for Shakbazyan. No Ex Post Facto Clause violation occurred when the district
court applied the 2009 Guidelines to Shakbazyan’s sentence.
C. Miscellaneous Arguments
Shakbazyan raises a number of additional arguments, each of which we
reject. First, Shakbazyan claims that even if the 2009 Guidelines apply to his
sentence, the Medicare beneficiaries were not “victims” within the meaning of
the 2009 definition but were more like co-conspirators because “they were
either paid to attend the Barson Clinic or they suffered no harm.”
Shakbazyan has waived this argument. At the sentencing hearing, the
district court asked Shakbazyan’s attorney whether the Medicare beneficiaries
fall within the 2009 definition of “victim,” and the attorney answered
affirmatively:
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THE COURT: But the 2009 guideline which governs the
conspiracy count for sure defines “victims” as
these patients whose Medicare benefits were
used.
MR. GERAGOS: Correct.
This court does not consider arguments deliberately waived in the trial court.
See, e.g., United States v. Puckett, 505 F.3d 377, 383 n.1 (5th Cir. 2007), aff’d,
556 U.S. 129, 129 S. Ct. 1423 (2009).
Shakbazyan next asserts that, in any event, the indictment charged him
only “with defrauding eight total victims”—Medicare and individuals
specifically named in the indictment—which is “below the threshold need for
any victim enhancement to apply.” The superseding indictment, to which he
pled guilty, expressly mentioned 429 patients’ claims as being fraudulently
charged. And it is hornbook procedure that “[t]he sentencing judge is entitled
to find by a preponderance of the evidence all the facts relevant to the
determination of a Guideline sentencing range and all facts relevant to the
determination of a non-Guidelines sentence.” See, e.g., United States v. Mares,
402 F.3d 511, 519 (5th Cir. 2005). This contention is meritless.
Also without merit is Shakbazyan’s conclusional assertion that the trial
court’s Judgment and Commitment Order is facially deficient because it states
a sentence below 24 months was imposed and consequently did not include a
written statement of reasons for the sentence imposed. This complaint
apparently refers to the “Statement of Reasons” form, which did erroneously
categorize Shakbazyan’s sentence as “within an advisory guideline range that
is not greater than 24 months.” Because of the error, the form does not contain
the required written statement identifying the district court’s reasons for the
sentence. The error is harmless, and clerical in nature. Shakbazyan does not
and cannot claim his substantial rights were affected. The transcript evinces
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the district court’s thorough explanation of its reasons for imposing
Shakbazyan’s 97-month, bottom of the applicable sentencing range term of
imprisonment. Moreover, the Statement of Reasons form is intended “to serve
a record-keeping function” and not to provide “a procedural safeguard for any
particular defendant.” See United States v. Pillault, 783 F.3d 282, 292 n.2 (5th
Cir. 2015) (quoting United States v. Denny, 653 F.3d 415, 422 (6th Cir. 2011)
(quoting United States v. Ray, 273 F. Supp. 2d 1160, 1164 (D. Mont. 2003))).
For these reasons, the district court’s sentence is AFFIRMED.
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