United States v. Arun Sharma

Case: 13-20325 Document: 00513014501 Page: 1 Date Filed: 04/21/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-20325 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, April 21, 2015
Lyle W. Cayce
Plaintiff – Appellee, Clerk
v.
ARUN SHARMA; KIRAN SHARMA,
Defendants – Appellants.
Appeals from the United States District Court
for the Southern District of Texas
USDC No. 4:09-CR-409-1
Before REAVLEY, JONES, and ELROD, Circuit Judges.
PER CURIAM:*
This cases requires us to review a $37 million restitution award entered
against Arun Sharma and Kiran Sharma, who pleaded guilty to operating a
decade-long insurance fraud scheme. This is our second opportunity to review
the district court’s calculation of restitution, as the Sharmas previously
appealed their first judgment and sentence, which included a $43 million
restitution award. We vacated the first award and remanded for resentencing
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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to correct errors in the restitution calculation. This appeal follows
resentencing. We AFFIRM.
I.
Arun and Kiran Sharma, married physicians licensed in the state of
Texas, owned and operated two health clinics that predominately offered
prescriptions for painkillers and injections for temporary relief of joint and
muscle pain. Throughout the relevant period, the Sharmas fraudulently billed
insurers (including Medicare, Medicaid, and several private insurance
companies) for pain injections that they never actually administered to their
patients. Most of the Sharmas’ fraud involved “upcoding,” a practice through
which the Sharmas would submit bills to insurers claiming that they had
administered more specialized, expensive injections when they had actually
administered only basic injections. For example, the Sharmas typically
administered simple “trigger point injections” to their patients, which involved
using short needles that were targeted at the outer muscles. However, the
Sharmas represented to the insurance companies that they were
administering deep-tissue injections, including: facet-joint, paravertebral,
sacroiliac nerve, sciatic nerve, and various other nerve block, injections. These
required longer needles aimed at targets deeper in the tissue or skeletal
structure such as the spine.
Throughout the course of the fraud, the Sharmas billing suggested that
they saw a remarkable number of patients each year, averaging as many as
109 patients per day in 2005. The Sharmas tried to convince all of their
patients to take shots at every office visit, and they put many of their patients
on a regimen of shots every two weeks. Beyond just the upcoding, the Sharmas
also would often bill insurers for fictitious injections and for “phantom” office
visits that never took place.
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Authorities learned of the fraud after two foreign medical graduates 1
working for the Sharmas sent an anonymous letter to the Texas Medical Board
and various insurers detailing the Sharmas’ illegal activities. After an
investigation, a grand jury indicted the Sharmas on sixty-four counts of
conspiracy, health-care fraud, mail fraud, unlawful distribution of controlled
substances, and money laundering. The Sharmas each pleaded guilty,
pursuant to a plea agreement, to one count of conspiracy to commit health-care
and mail fraud and one substantive count of health-care fraud, in violation of
18 U.S.C. §§ 371, 1347.
At the first sentencing, the district court sentenced Arun Sharma to 180
months of imprisonment and three years of supervised release. The district
court sentenced Kiran Sharma to 96 months of imprisonment and three years
of supervised release. In addition to their prison terms, the district court
ordered the Sharmas to pay restitution, jointly and severally, to Medicare,
Medicaid, and various private insurers in the total amount of $43,318,170.93.
To arrive at this figure, the district court adopted the calculation offered by the
government in its sentencing memorandum, which relied on facts in the
Presentence Investigation Report (PSR) and the Sharmas’ plea agreements.
The amounts in the PSR came from written “victim impact statements” and
electronic claims data—information that insurers had submitted which
detailed the amounts they had paid to the Sharmas.
1 The Sharmas regularly hired physicians who had graduated from medical schools
outside of the United States and the Sharmas’ plea agreements refer to these employees as
“foreign medical graduates.” Within the medical community, such physicians were earlier
considered “foreign medical graduates,” but the American Medical Association now refers to
them as “international medical graduates,” which we use hereinafter.
The Sharmas employed international medical graduates to help them operate their
deluged clinics and add fictitious information to the progress/procedure notes that formed the
basis of the bills that they sent to insurers.
3
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The Sharmas objected to the restitution award recommended in the PSR
on the grounds that: (1) it included amounts that insurers paid for procedures
that were entirely outside the scope of the fraud; and (2) it did not include
offsets for the value of legitimate and medically necessary trigger point
injections. The Sharmas submitted an alternative restitution figure of
$21,028,963.61 prepared by their forensic accountant. The district court
rejected the Sharmas’ calculation and adopted the figures in the PSR, ordering
restitution in the amount of $43,318,170.93, to be paid jointly and severally.
The Sharmas appealed. 2
On appeal, we vacated the restitution award because the “amount
exceeded the insurers’ actual losses by millions of dollars.” United States v.
Sharma (Sharma I), 703 F.3d 318, 327 (5th Cir. 2012). For example, we noted
that the district court erroneously included payments that insurers made
during the year before the admitted fraudulent conduct had even begun. Id.at 323–24. The restitution award also included amounts paid for treatments
and procedures that were not considered part of the injection-related fraud.
Id. at 324. We held that these errors, along with the Sharmas’ rebuttal
2 After the district court issued its order, and while the Sharmas’ direct criminal
appeal was pending, the two international medical graduates who reported the fraud, Samuel
Babalola and Kayode Samuel Adetunmbi, filed a qui tam action under both the False Claims
Act (FCA) and the Texas False Claims Act, to recover a share of the forfeiture in the Sharmas’
criminal action. The district court, interpreting the FCA, granted the government’s motion
for partial summary judgment, concluding that the FCA requires filing the qui tam complaint
at or before the time of the restitution order in the related criminal case. United States ex
rel. Babalola v. Sharma, No. H-11-4026, 2013 WL 431821, at *3 (S.D. Tex. Feb. 1, 2013).
Because the two graduates filed their FCA action after the district court issued its order, they
could not share in the restitution. We affirmed. United States ex rel. Babalola v. Sharma,
746 F.3d 157, 163 (5th Cir.), cert. denied, 134 S. Ct. 2856 (2014).
In addition, the Sharmas’ son, Guarav Sunny Sharma, filed a third-party petition
under 21 U.S.C. § 853(n) for an ancillary proceeding to determine his rights to property
forfeited as part of his parents’ criminal convictions. The district court dismissed the petition
and we affirmed on the basis that Guarav did not timely file his petition after receiving actual
notice of the preliminary forfeiture order on March 3, 2011. United States v. Sharma, 585 F.
App’x 861, 861–62 (5th Cir. 2014).
4
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evidence, sufficiently undermined the reliability of the PSR. Id. We further
held that the district court abused its discretion, and we vacated its judgment
and remanded the case for resentencing. 3 In the remand order, we instructed
the district court to recalculate the restitution award “consistent with [our]
opinion and based solely on evidence already in the record [and to] . . . specify,
on the record, its findings and reasons regarding each insurer’s actual loss.”
Id. at 327 (emphasis added).
In the first appeal from the first sentencing hearing, we also held that
the district court did not abuse its discretion in denying offsets to the
restitution award for injections that the Sharmas argued were “medically
necessary or reimbursable by the insurers.” Id. As we explained, the Sharmas
bore the burden of proving the offsets and, based on the record, they presented
no competent evidence to show that the injections were medically necessary
procedures that warranted legitimate reimbursement. 4 Id. at 326.
Before resentencing, the Sharmas filed a joint motion for continuance
and discovery seeking to review their seized patient files “for information that
might establish the medical necessity of certain procedures” so that they could
prove they were entitled to offsets. The district court summarily denied the
motion.
At resentencing, the government contended that the proper restitution
award was $37,636,436.39, and the Sharmas, again, argued that it was
$21,028,963.61, which included their requested offsets. Excluding offsets, the
3 We also vacated the amount of the Sharmas’ forfeiture money judgment and
remanded it for recalculation because, pursuant to the Sharmas’ plea agreements, the
forfeiture award must match the restitution award.
4 The Sharmas sought panel rehearing in United States v. Sharma (Sharma I), 703
F.3d 318 (5th Cir. 2012), which we denied. Arun also petitioned the United States Supreme
Court to review our denial of his request to proceed pro se in this appeal. The Supreme Court
denied his petition. See Sharma v. United States, 134 S. Ct. 78 (2013).
5
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Sharmas essentially agreed with the government’s new calculation; the
Sharmas’ expert calculated gross restitution at $37,670,826.32, slightly higher
than the government’s figure.
The district court did not issue a written opinion, but dictated a “mini-
opinion” into the transcript. As the district court explained, it “adopt[ed] the
methodology and amounts set out by the government in its resentencing
memorandum, including the list of injection-related procedure codes and the
dollar amount paid by each insurer for injection-related procedures during the
time period of the conspiracy.” The court explained that it had considered the
electronic claims data and the Sharmas’ expert report prepared by their
accounting expert. Reading our opinion from the first appeal into the
transcript, the district court rejected the Sharmas’ claims for offsets. The
district court stated that it agreed with our reasoning in the first appeal,
specifically our reasoning that the government provided sufficient evidence
that the trigger-point injections were illegitimate, and that the Sharmas failed
to show they were medically necessary. The district court explained that it
“formally ma[de] the same factual findings” as the findings we made in the first
appeal. The district court also overruled all of the Sharmas’ objections to the
PSR report and addenda, and adopted as its findings the facts in those
documents. The district court accepted the government’s figure in the
resentencing memorandum and found “that 18 fraud victims incurred an
actual loss of $37,636,436.39.” The district court again sentenced Arun to 180
months of imprisonment and three years of supervised release. It again
sentenced Kiran Sharma to 96 months of imprisonment and three years of
supervised release. The district court listed on Arun’s amended judgment the
restitution amount awarded to each insurer. However, it did not include the
same list on Kiran’s amended judgment, writing only “See Attached List”
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under “Name of Payee,” and under “Restitution Ordered,” including only the
combined total awarded. The district court failed to attach the list.
The Sharmas filed the instant appeal. The Sharmas argue that the
district court abused its discretion by denying their motions for a continuance
and further discovery. They contend that they were first made aware that they
bore the burden of proving offsets when we ruled on their first appeal.
Therefore, they argue, by denying their motions, the district court denied them
the opportunity to satisfy their burden of proving offsets by presenting
evidence that the trigger point injections were medically necessary. This, they
assert, violated their due process rights.
In addition, the Sharmas argue that the district court did not follow our
remand instructions because it failed to specify its findings and reasons for
ordering the restitution attributable to each insurer. Arun further argues that
the district court abused its discretion because its restitution award included
amounts paid for procedures that the government has not shown to be part of
the fraud. More specifically, he argues that while the procedures included in
the restitution award are injection-related, the government has failed to show
that they are the types of injections the Sharmas admitted to billing during
their conspiracy. 5
5 Kiran Sharma also argued in her brief that she did not receive an adequate
explanation of the basis for her restitution award because the district court failed to attach
to her amended judgment a list of the individual insurers’ losses—the district court instead
included only the combined total restitution amount. However, her counsel conceded at oral
argument that this issue alone would not warrant a remand for resentencing. In any event,
Kiran’s amended judgment did indicate that her restitution obligation ran jointly and
severally with Arun’s and identified Arun’s amended judgment by cause number, which
contained the detailed figures. Moreover, the district court stated at the resentencing
hearing that it was adopting the “methodology and amounts set out by the Government in its
resentencing memorandum,” a document which was itself entered into the record. The fact
that the district court incorporated that content by reference, at the hearing rather than
attaching it to the amended judgment, is of no consequence. The district court’s explicit
incorporation of the government’s resentencing memorandum in its sentencing judgment was
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II.
We review de novo whether a district court faithfully and accurately
applied our instructions on remand and whether the law of the case doctrine
bars re-examination of an issue of fact or law already decided on appeal.
United States v. Lee, 358 F.3d 315, 320 (5th Cir. 2004). We review the amount
of a district court’s restitution award for abuse of discretion. United States v.
Mann, 493 F.3d 484, 498 (5th Cir. 2007). Factual findings supporting the
award are reviewed for clear error. United States v. Beydoun, 469 F.3d 102,
107 (5th Cir. 2006). Even absent express findings, we may affirm a restitution
award if “the record provides an adequate basis to support the restitution
order.” United States v. Blocker, 104 F.3d 720, 737 (5th Cir. 1997).
III.
For the reasons discussed below, the Sharmas’ arguments are without
merit. They are not entitled to offsets, the district court correctly followed our
remand instructions, and the evidence in the record supports the district
court’s restitution award.
As an initial matter, the law of the case doctrine controls our review of
whether the district court should have applied the offsets requested by the
Sharmas, as this issue was already decided in the Sharmas’ first appeal. “The
law of the case doctrine posits that ordinarily ‘an issue of fact or law decided
on appeal may not be reexamined either by the district court on remand or by
the appellate court on subsequent appeal.’” Lee, 358 F.3d at 320 (quoting
United States v. Matthews, 312 F.3d 652, 657 (5th Cir. 2002)). The doctrine
reflects the “‘sound policy that when an issue is once litigated and decided, that
should be the end of the matter.’” Lee, 358 F.3d at 320 (quoting United States
sufficient to satisfy our instruction to “specify, on the record, its findings and reasons
regarding each insurer’s actual loss.”
8
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v. United States Smelting Ref. & Mining Co., 339 U.S. 186, 198 (1950)). “[O]nly
those discrete, particular issues identified by the appeals court for remand are
properly before the resentencing court.” United States v. Marmolejo, 139 F.3d
528, 530 (5th Cir. 1998). “In short, the resentencing court can consider
whatever this court directs-no more, no less. All other issues not arising out of
this court’s ruling and not raised before the appeals court, which could have
been brought in the original appeal, are not proper for reconsideration by the
district court below.” Id. at 531. 6
In the first appeal, we directly addressed the offsets issue, holding that
the district court did not abuse its discretion in determining that the Sharmas
failed to meet their burden of proving offsets. 7 Sharma I, 703 F.3d at 326. In
6 In contrast, some circuits allow district courts the discretion to expand the scope of
resentencing “unless the district court’s discretion is specifically cabined.” E.g., United States
v. West, 646 F.3d 745, 749 (10th Cir. 2011). In those circuits, the district court should “look
to the mandate for any limitations on the scope of the remand and, in the absence of such
limitations, exercise discretion in determining the appropriate scope.” Id.7 In Sharma I, we reasoned that:
The government presented unrebutted evidence that Arun (1) deliberately
misdiagnosed patients as having rheumatoid arthritis and put them on an
injection regimen, (2) tried to convince all of his patients to have trigger-point
injections at every visit, (3) required patients who declined injections to sign
mendacious acknowledgments that they had received the treatments before he
would prescribe pain medication, and (4) administered injections in an
assembly-line fashion without taking routine sanitary precautions. The
Sharmas also employed six foreign medical graduates to fabricate bills en
masse. Finally, the government asserted in its sentencing memorandum that
patients who later went to different physicians were “universally” taken off
trigger-point injections.
The Sharmas offered little in the way of concrete evidence to rebut the
government's contentions. Their plea agreements stated that some injections
were provided, but did not represent that those injections were medically
necessary or that the physicians would have been reimbursed for them by the
insurers. Although the Sharmas provided anecdotal statements from patients
claiming some degree of pain relief, the victims of the crimes of conviction were
the insurance companies, not the patients. The Sharmas did not produce
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our remand instruction, we said nothing about reconsidering the offsets issue
at resentencing. However, we did instruct the district court to recalculate the
gross restitution amount, address whether the government had offered
sufficient evidence to support that amount, and conform the forfeiture money
judgment to the new restitution award. Sharma I, 703 F.3d at 327. Given our
circuit’s application of the law of the case doctrine, these were the exclusive
issues for consideration at resentencing and our ruling on the offsets was
binding on the Sharmas at resentencing and in this appeal.
Moreover, despite their argument to the contrary, denying the Sharmas’
request for offsets does not violate their due process rights. The Sharmas
contend that our allocating to them the burden of proving offsets in Sharma I,
and, subsequently, the district court’s denying their motions for a continuance
and for further discovery before resentencing, 8 violate their due process rights
because, when developing the record at initial sentencing, they were unaware
of their burden. To be sure, actual losses under the Mandatory Victims
Restitution Act (MVRA), codified at 18 U.S.C. §§ 3613A, 3663A–64 (which is
competent evidence suggesting that even one injection to even one patient was
medically necessary and met the insurer's reimbursement standards.
703 F.3d at 326.
8 We review the denial of a request for continuance under an abuse of discretion
standard. United States v. Walters, 351 F.3d 159, 170 (5th Cir. 2003). “To prevail, the movant
must show that the denial resulted in specific and compelling or serious prejudice.” United
States v. Barnett, 197 F.3d 138, 144 (5th Cir. 1999) (internal quotation marks omitted).
Likewise, we review the denial of a request for discovery for abuse of discretion. United
States v. Conn, 657 F.3d 280, 284 (5th Cir. 2011).
It is not exactly clear that the Sharmas’ adequately preserved their due process
argument given that they did not specifically raise this issue at resentencing. See United
States v. Lopez, 923 F.2d 47, 50 (5th Cir. 1991) (explaining that to preserve an issue, a
defendant must “make and factually develop in the district court all arguments”).
Accordingly, their due process argument may be subject to plain-error review. As discussed
above, however, the Sharmas cannot prevail even under an abuse of discretion standard.
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the basis for ordering restitution in this case) cannot “include any amount that
the insurer would have paid had the defendant not committed the fraud.”
Sharma I, 703 F.3d at 324; see also United States v. Klein, 543 F.3d 206, 215
(5th Cir. 2008). However, since at least 1998, we have interpreted 18 U.S.C. §
3664(e) to require shifting to the defendant the burden of proving offsets. See
United States v. Sheinbaum, 136 F.3d 443, 449 (5th Cir. 1998) (“[W]e conclude
that justice requires that the burden of establishing any offset to a restitution
order should fall on the defendant.” (internal quotation marks omitted)). 9 We
have, in several subsequent cases, approved shifting “at least a portion of the
burden to a defendant to establish his entitlement to a restitution credit [i.e.,
offsets].” Sharma I, 703 F.3d at 325–26; see, e.g., United States v. Loe, 248 F.3d
449, 470 (5th Cir. 2001) (affirming the denial of offsets where the defendant
was unable to provide reliable evidence supporting its claims); United States
v. Edet, No. 08-10287, 2009 WL 552123, at *3 (5th Cir. Mar. 5, 2009) (denying
offsets where a defendant could not offer evidence that Medicare would have
paid for the equipment at issue absent his fraud). At least two other circuits
similarly allocate the burden of proving offsets to the defendant. See United
States v. Bryant, 655 F.3d 232, 254 (3d Cir. 2011); United States v. Elson, 577
9 As we further explained in United States v. Sheinbaum:
Logically, the burden of proving an offset should lie with the defendant.
[Section 3664(e) of Title 18 of the United States Code] allocates the various
burdens of proof among the parties who are best able to satisfy those burdens
and who have the strongest incentive to litigate the particular issues involved.
Having investigated the crime and wishing to provide as strong a deterrent as
possible, the government is best suited to persuade the court as to the amount
of loss caused by the offense. On the other hand, the defendant is better
positioned to proffer evidence about his own financial resources and needs, and
his desire to lower his restitution order gives him the incentive to litigate such
mitigating circumstances.
136 F.3d 443, 449 (5th Cir. 1998).
11
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F.3d 713, 734 (6th Cir. 2009). Given these precedents, the Sharmas cannot
claim that they were unaware of their burden. 10
Furthermore, the Sharmas did in fact have notice that the medical
necessity of the injections was at issue in the first sentencing. The
government’s filings continually challenged the validity of not only the
specialized injections, but also the trigger point injections. The government’s
initial sentencing memorandum discussed at length the reasons why even the
trigger point injections were illegitimate: (1) the Sharmas routinely diagnosed
insured patients with arthritis regardless of test results; (2) drug patients who
refused shots were required to sign acknowledgements saying that they had
received them; (3) shots were administered without following sanitation
protocols; (4) employees added false information to progress and procedure
reports; (5) the Sharmas did not “spen[d] enough time with any of the ‘pain’
patients to properly evaluate their medical needs”; and (6) patients who left
the Sharmas universally reported that their new doctors discontinued the
shots as medically unnecessary. These allegations, at the very least, informed
10 The Sharmas, citing Bell v. Berson, 402 U.S. 535, 541–42 (1972), argue that due
process requires a hearing to be meaningful and appropriate to the related case, and that a
hearing that “excludes consideration of an element essential to” deciding the issue fails to
meet this due process standard. The Sharmas also cite United States v. Klein as an example
where we have remanded to give the district court an opportunity to credit offsets. However,
neither of these authorities supports the Sharmas’ argument here.
Bell involved a state administrative hearing in which a driver’s license was revoked
without considering liability, a factor that played a “crucial role” in implementing the policies
of the governing statute. The administrative agency adjudicating the matter foreclosed the
driver’s opportunity to be heard on the issue. In contrast, here, the district court did not
foreclose the Sharmas’ opportunity at the first sentencing proceeding to argue their offsets
claim. They had the opportunity to do so as part of the sentencing process, and they did in
fact present some evidence on the issue.
Similarly, Klein does not help the Sharmas’ argument. Although we remanded a
restitution order to the district court for recalculation because it failed to discount for offsets,
we did so because the government did not dispute that the procedures were legitimate; the
dispute was instead over how the defendant billed insurers for those procedures. Klein, 543
F.3d at 215. For reasons already explained, that is not the case here.
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the Sharmas that the government intended to establish that most, if not all, of
their injections were unnecessary and fraudulent.
IV.
The only remaining issues in this appeal are whether the district court
abused its discretion in recalculating the gross restitution amount and whether
it adequately followed our remand instructions. We have reviewed the record,
including the underlying data, and are satisfied that the district court’s
restitution award includes only amounts paid pursuant to the Sharmas’
fraudulent scheme.
Under the MVRA, restitution is limited to the
actual loss directly and proximately caused by the defendant’s offense of
conviction. An award of restitution cannot compensate a victim for losses
caused by conduct not charged in the indictment or specified in a guilty
plea, or for losses caused by conduct that falls outside the temporal scope
of the acts of conviction.
Sharma I, 703 F.3d at 323 (citing United States v. Hinojosa, 484 F.3d 337, 343
(5th Cir. 2007)). As we explained in Sharma I, the restitution award in this
case should exclude payments for non-injection-related procedures given that
those are outside the scope of the offense of conviction. 11 Sharma I, 703 F.3d
at 323. In addition, every dollar in the restitution award must be supported
by record evidence. United States v. Arledge, 553 F.3d 881, 899 (5th Cir. 2008).
11 The probation officer concurred with the methodology in the resentencing
memorandum but noted in the PSR that he “believes the restitution statute allows for
additional losses associated with the fraudulent medical examinations, x-rays, and tests, as
cited in the Indictment as part of the scheme under the counts of conviction . . . .” But, the
probation officer understood our first opinion to require a more conservative approach. In
addition, despite the Sharmas’ admissions in their plea agreements that they billed insurers
for some office visits that never occurred, the government explained in its resentencing
memorandum that, “given the difficulty of separating out the phantom visits from the real
visits,” it decided to take a conservative approach in calculating its restitution figure and
assumed that all visits were legitimate.
13
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In their plea agreements, the Sharmas pleaded guilty only to conspiracy
and fraud arising out of injection-related procedures, which excludes some of
the other procedures they offered at their clinics (e.g., allergy-related
consultations and medication). However, Arun argued for the first time at
resentencing that even some of the injection-related procedures that the
government included in its calculation (which are listed by “procedure codes”
in Attachment A of the government’s resentencing memorandum) are outside
the categories of injections that comprise their offense (as delimited in their
plea agreements). Arun contends that the government failed to meet its
burden of proving that every code in its resentencing memorandum should be
included in the calculation.
The government argues that the mandate rule 12 prevents Arun from
raising this new argument after remand. See Marmolejo, 139 F.3d at 530–31
(“All other issues not arising out of this Court’s ruling and not raised before
the appeals court, which could have been brought in the original appeal, are
not proper for reconsideration by the district court below.”) (emphasis added).
In United States v. Hamilton, a case involving a Medicare fraud scheme, we
held that the defendants could not argue for the first time in their second
appeal that the district court improperly included lawfully-obtained proceeds
in its restitution award. 440 F.3d 693, 697 (5th Cir. 2006). Likewise, we barred
another defendant from seeking reductions in restitution for actual services he
12 See United States v. Pineiro, 470 F.3d 200, 205 (5th Cir. 2006) (“The mandate rule .
. . prohibits a district court on remand from reexamining an issue. . . . [It] cover[s] issues
decided both expressly and by necessary implication . . . .”) (emphasis in original). There are
three scenarios excepted from application of the mandate rule, none of which, according to
the government, are applicable here: (1) introducing evidence at a subsequent trial that is
substantially different; (2) an intervening change in controlling authority; and (3) a
determination that the earlier decision was clearly erroneous and would work a manifest
injustice. Id.14
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provided because he did not raise his arguments in his original appeal. United
States v. Isiwele, 493 F. App’x 562, 563 (5th Cir. 2012).
Arun did not raise this new argument at the first sentencing hearing or
in the first appeal. The Sharmas argued at their first sentencing hearing that
many of the insurer payments should not have been included in the loss
calculation because they were outside the time period of the conspiracy, were
not injection-related, and/or were based on the insurer’s claim despite the
insurer’s uncertainty whether the claim was related to the Sharmas’ guilty
plea. Arun first raised this new argument about excluding payments for
certain types of injections at the second sentencing hearing and again in his
brief in this appeal. At resentencing, the district court read our remand
instructions in Sharma I to require recalculating the restitution figure to
include all injection-related payments supported by the record. This was a fair
reading of Sharma I.
Even reviewing the injection-related payments, the district court
adequately specified the basis for its calculation. In issuing its amended
restitution award, the district court stated on the record that it was “adopt[ing]
the methodology and amounts set out by the Government in its resentencing
memorandum, including the injection-related procedure codes and the dollar
amount paid by each insurer for injection-related procedures during the time
of the conspiracy.” The resentencing memorandum included Attachment C, a
spreadsheet detailing the individual losses for each of the eighteen insurers,
and Attachment D, the underlying electronic claims data. Relying on this data
(rather than just the victim impact statements filed by insurers that proved
problematic in the first restitution calculation), the government narrowed the
payments in two main ways. First, it included only payments made for claims
filed during the timeframe of the conspiracy (January 1, 1998 and June 10,
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No. 13-20325
2009). Second, it selected from that subset only those payments made for
injection-related procedures—the type of procedures the Sharmas admitted
comprised a part of their fraud. The government did this by looking at the
billing code for each claim and determining whether the description of the
procedure associated with that code fit within the fraud. Attachment A to the
resentencing memorandum includes a list of injection-related procedures with
their description and corresponding codes. By narrowing the restitution in this
way, the government made sure to avoid including amounts for procedures that
may not have been part of the fraud, which is what led to the errors at the
initial sentencing.
Moreover, Arun’s challenge to these codes is undermined by the
Sharmas’ own expert, who acknowledged that she received the codes from the
Sharmas’ defense counsel and used all of them for purposes of calculating her
restitution award. It is true that her report excludes certain codes that Arun
claims should not be included in his restitution award, but these codes
represent only $2,351.71 of the award. And, the Sharmas’ expert calculated
gross restitution that was about $34,000 higher than the government’s
figure. 13 We also note that the Sharmas’ counsel acknowledged on the record
that the gross restitution amount in the government’s resentencing
memorandum was “correct in the way it was calculated.” He explained that it
is based on the claims data already in the record, and correctly excludes “any
amounts billed that were outside of the scope of the conspiracy and any
amounts that were billed for non-injection-related procedures.” This
admission directly contradicts Arun’s argument.
13 Because the Sharmas’ expert included a few additional procedures that the
government chose to exclude, her gross restitution amount was $37,670,826.32, compared to
the government’s figure of $37,636,436.39.
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No. 13-20325
Given that the Sharmas own expert essentially agreed with the
government’s calculation of the gross restitution and that their counsel
admitted that the amount “is correct in the way it was calculated,” we are not
persuaded that the district court abused its discretion in its calculation of the
restitution award. In explicitly adopting the government’s methodology, the
district court satisfied our remand instruction to “specify, on the record, its
findings and reasons regarding each insurer’s actual loss.” Sharma I, 703 F.3d
at 327.
V.
For the foregoing reasons, we AFFIRM.
17