United States v. Sheila Harris

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 29 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-10006
Plaintiff-Appellee, D.C. No. 1:17-cr-00001-HG-1
v.
MEMORANDUM*
SHEILA HARRIS,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Hawaii
Helen W. Gillmor, District Judge, Presiding
Argued and Submitted October 22, 2020
Honolulu, Hawaii
Before: WALLACE, BEA, and BENNETT, Circuit Judges.
A jury convicted Sheila Harris of eleven counts of wire fraud, two counts of
aggravated identity theft, and four counts of making false statements relating to
health care matters. She appeals from her convictions, her seventy-month
sentence, and the orders of restitution and forfeiture. In a concurrently filed
opinion, we address Harris’s argument that her identity theft convictions under 18
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
U.S.C. § 1028A should be reversed because her conduct did not amount to “use” of
another’s identification under the statute. We address Harris’s other challenges
here.
We have jurisdiction under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291 and
affirm.
1. Harris argues that the district court erred in admitting evidence of
uncharged fraudulent transactions and “other acts” evidence because such evidence
was (1) irrelevant and (2) “misleading, overbroad and prejudicial” under Federal
Rule of Evidence (“Rule”) 403. We review the admission of evidence for abuse of
discretion. United States v. Salcido, 506 F.3d 729, 732 (9th Cir. 2007) (per
curiam).
The district court held that the evidence of uncharged transactions was
relevant to prove an element of wire fraud, “the existence of a scheme to defraud.”
United States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013). Generally, evidence of
uncharged transactions is admissible for this purpose. See United States v. Loftis,
843 F.3d 1173, 1177 (9th Cir. 2016). The district court held that the “other acts”
evidence was relevant and admissible under Rule 404(b)(2) to prove Harris’s
“motive, knowledge, intent, plan, modus operendi [sic], absence of mistake, and
lack of accident with respect to the claims for speech therapy submitted to
Tricare.”
2
Harris offers no legal argument explaining why the district court’s relevancy
determinations were erroneous. She also does not explain how the challenged
evidence was misleading, overbroad, or prejudicial under Rule 403. In fact, the
challenged evidence was manifestly relevant and went directly to Harris’s guilt.
The district court did not abuse its discretion in admitting it.
2. Harris argues that her Sixth Amendment right to confrontation was
violated when the district court permitted two witnesses, Julie Marlowe and
Samantha Vega, to testify by two-way video. Applying a Ninth Circuit decision
issued after Harris’s trial, United States v. Carter, 907 F.3d 1199 (9th Cir. 2018),
we agree. Carter held that “[c]riminal defendants have a right to ‘physical, face-
to-face confrontation at trial,’ and that right cannot be compromised by the use of a
remote video procedure unless it is ‘necessary’ to do so and ‘the reliability of the
testimony is otherwise assured.’” Id. at 1202 (quoting Maryland v. Craig, 497
U.S. 836, 850 (1990)). Carter pointed out that two-way video testimony is
unnecessary when the witness can be deposed. Id. at 1209.
Here, the witnesses were unable to travel from the mainland United States to
Hawaii for trial because they had to care for their disabled children, and because
Vega’s husband was deployed overseas with the U.S. military. The record does
not reflect, however, that the witnesses were unavailable for depositions near their
respective homes. Indeed, the government had sought to admit deposition
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testimony of Vega, and only in the alternative did it request the court’s permission
for Vega to testify by two-way video. The district court granted the government’s
request for Vega to testify by two-way video, reasoning that “[l]ive video
conferencing is preferable to deposition testimony” and relying on an out-of-circuit
case United States v. Gigante, 166 F.3d 75 (2d Cir. 1999). Our court in Carter,
however, held the opposite with respect to the preferability of depositions. 907
F.3d at 1209. Because this alternative was available to preserve Harris’s right to
physical face-to-face confrontation, two-way video testimony was not “necessary,”
and thus Harris’s confrontation rights were violated under Carter.
The error, however, was harmless beyond a reasonable doubt. See id. at
1210. Vega and Marlowe provided testimony about the frequency and duration of
the speech therapy services provided to their children, and that testimony
supported Harris’s overall scheme to defraud. But nine other parents gave similar
testimony, and several therapists and others who had worked for Harris’s business,
Harris Therapy, Inc. (Harris Therapy), also provided testimony supporting Harris’s
scheme to defraud. And the government presented emails, text messages, claim
forms, and other documents supporting Harris’s fraudulent scheme. Thus,
Marlowe’s and Vega’s testimony was cumulative of other overwhelming evidence
establishing Harris’s guilt in a scheme to defraud.
The violation was also harmless beyond a reasonable doubt as to Counts 15
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and 16. Counts 15 and 16 related to false treatment notes for Marlowe’s and
Vega’s children, but Marlowe and Vega did not provide any testimony about the
creation or submission of the false notes. Rather, the following was the crucial
evidence supporting Counts 15 and 16: (1) copies of Harris Therapy employee and
speech therapist Erica Apana’s original notes; (2) copies of the altered notes that
had been submitted to TRICARE; (3) Apana’s testimony that she created the
original notes and did not create the altered notes; (4) Harris Therapy employees
and speech therapists Kara Spheeris’s and Terri LeSage-Oyamot’s testimony that
they did not treat the patients identified in the altered notes and did not create the
altered notes;1 and (5) Harris Therapy employee Abigail Fiesta’s testimony that, at
Harris’s direction, she created the altered notes and submitted them to TRICARE.
While parts of Vega’s and Marlowe’s testimony corroborated that some of the
information in the altered notes was false, their testimony was cumulative of the
key evidence supporting Counts 15 and 16.
1
At oral argument, Harris’s counsel stated that he believed that Spheeris and
LeSage-Oyamot had not provided testimony related specifically to Vega’s and
Marlowe’s children. Oral Arg. at 4:19–4:32,
https://www.youtube.com/watch?v=EMVefFTQEsY. The record shows, however,
that Spheeris specifically testified that Vega’s child was not her patient and that
she did not create the false note that contained Spheeris’s name. See Trial Tr. at
170–71 (May 3, 2018). And LeSage-Oyamot specifically testified that Marlowe’s
child was not her patient and that she did not create the false note that contained
LeSage-Oyamot’s name. See Trial Tr. at 76 (May 3, 2018).
5
For the above reasons, we conclude that the Confrontation Clause violations
were harmless beyond a reasonable doubt. See id. (“[W]e assess [harmlessness] by
considering the importance of the witness’ testimony in the prosecution’s case,
whether the testimony was cumulative, and, of course, the overall strength of the
prosecution’s case.” (quotation marks and citation omitted)).
3. Harris makes several arguments challenging the district court’s
admission of Agent Salazar’s summary testimony and the summary charts. Harris
contends that the record cites on page thirty-five of her opening brief show that she
raised all her arguments in the district court. We have reviewed those record cites,
which include Harris’s oppositions to the government’s motions in limine to admit
summary testimony and charts, and they do not show that she sufficiently raised
the arguments she makes on appeal. Thus, all her arguments challenging the
summary testimony and charts are subject to plain error review. See United States
v. Hong, 938 F.3d 1040, 1046 (9th Cir. 2019).
Harris presents no legal argument showing that she has satisfied all the plain
error factors. Her entire plain error argument consists of two conclusory
statements with no legal citations. Thus, Harris fails to show that the district court
plainly erred in admitting Agent Salazar’s summary testimony and the summary
charts.
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4. Harris argues that the aggravated identity theft statute, 18 U.S.C.
§ 1028A, required the government to prove that her fraudulent use of Spheeris’s
identification as the rendering provider was material, i.e., it influenced TRICARE
to pay the false claims. She contends that the evidence was insufficient to support
this supposed materiality requirement. Harris’s argument is misplaced because
§ 1028A includes no materiality element (but even if it did, there was sufficient
evidence to prove materiality).
Harris confuses the elements of § 1028A with the elements of wire fraud, the
predicate offense here. While § 1028A can be predicated upon the commission of
wire fraud (which includes a materiality requirement), § 1028A itself does not
require that the government prove materiality. But even were that not so, Harris’s
argument fails. Witnesses testified that TRICARE would have refused to pay had
it known that the rendering provider information shown on the claim forms was
inaccurate. Viewing this evidence in the light most favorable to the prosecution, a
rational trier of fact could have found beyond a reasonable doubt that Harris’s
fraudulent use of Spheeris’s identification influenced TRICARE’s decision to pay
the claims. See Hong, 938 F.3d at 1047.
5. Harris appeals from the forfeiture order, arguing: (1) the district court
abused its discretion by refusing to hold an evidentiary hearing on forfeiture; (2)
the forfeiture notice in the indictment was insufficient under Federal Rule of
7
Criminal Procedure 32.2(a); (3) the forfeiture notice limited the forfeiture amount
to proceeds derived from the eleven specific wire uses charged in the indictment
and thus it was improper to order forfeiture of proceeds related to the entire
scheme; and (4) “[t]he Government [could not] simply guess that all bills
submitted on consecutive dates were fraudulent and [was required to] provide
actual proof of false claims, or extrapolate based on a scientifically valid method.”
Harris also argues that the restitution order should be vacated for these same
reasons.
Harris fails to show that the district court abused its discretion by refusing to
hold an evidentiary hearing. She asserted in the district court that an evidentiary
hearing was necessary to present expert testimony on proper sampling and
extrapolation methods and to disprove the double-billing scheme. The district
court held that expert testimony was unnecessary because the government’s
forfeiture calculations rested on the trial evidence, not extrapolation or sampling,
and that Harris sought to challenge the trial evidence improperly. The district
court’s conclusions are reasonable and supported by the record. Thus, the district
court did not abuse its discretion by refusing to hold an evidentiary hearing on
forfeiture.
Harris’s argument challenging the sufficiency of the forfeiture notice in the
indictment is unavailing. Federal Rule of Criminal Procedure 32.2(a) requires the
8
government to provide a notice in the indictment “that the government will seek
the forfeiture of property . . . in accordance with the applicable statute” (emphasis
added). The indictment cited 28 U.S.C. § 2461(c) and 18 U.S.C. § 981(a)(1)(C),
which are the “applicable statute[s]” authorizing criminal forfeiture for wire fraud.
See United States v. Lo, 839 F.3d 777, 791 (9th Cir. 2016) (“[W]here the
government includes a criminal forfeiture allegation pursuant to 18 U.S.C. § 981and 28 U.S.C. § 2461(c), forfeiture is authorized under § 981 even though that
section typically governs civil, rather than criminal, forfeiture.”); see also 18
U.S.C. § 981(a)(1)(C) (providing that proceeds traceable to “specified unlawful
activity,” which includes by reference wire fraud under 18 U.S.C. § 1343, are
subject to forfeiture). Thus, the government’s forfeiture notice complied with
Federal Rule of Criminal Procedure 32.2(a).
We reject Harris’s argument that the forfeiture notice limited the forfeiture
amount to proceeds derived from the eleven specific wire fraud counts charged in
the indictment. Section 981 authorizes the government to seek forfeiture of all
proceeds obtained from the fraudulent scheme of a wire fraud offense, see Lo, 839
F.3d at 793, and nothing in the indictment suggests that the government was
limiting itself to the proceeds derived only from the eleven charged offenses.
Rather, the indictment cited and tracked the language of § 981, which notified
9
Harris that the government would be seeking forfeiture of all proceeds obtained
from her fraudulent scheme.
Harris challenges the methodology used to calculate the forfeiture amount.
The government must prove the forfeiture amount by a preponderance of the
evidence, see United States v. Christensen, 828 F.3d 763, 822 (9th Cir. 2015), and
we review the district court’s forfeiture determination for clear error, see United
States v. Newman, 659 F.3d 1235, 1243–44 (9th Cir. 2011), abrogated on other
grounds by Honeycutt v. United States, 137 S. Ct. 1626 (2017). Based on the trial
evidence, the district court held that the forfeiture amount of $320,641 was
appropriate. This amount is not clearly erroneous as it is directly supported by the
evidence. Harris urges, however, that the government needed to conduct statistical
sampling and extrapolation. We are not persuaded. The district court can base a
forfeiture amount “on evidence already in the record,” Fed. R. Crim. P.
32.2(b)(1)(B), and Harris identifies no authority that requires the government to
prove the forfeiture amount through statistical sampling and extrapolation.
Because Harris’s arguments challenging the forfeiture order lack merit, her
argument that the restitution order should be vacated for the same reasons also
fails.
6. Harris challenges the district court’s calculation of the intended loss
amount under United States Sentencing Guidelines (“U.S.S.G.”) § 2B1.1. She
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argues that the intended loss amount was inflated because: (1) the loss amount
“was not based on any verified empirical data or scientific methodology”; (2) the
numbers were improperly extrapolated from a nonrandom sample; (3) “Agent
Salazar lacked the education, experience, training, and formal methodology to
appropriately calculate a loss amount”; (4) the “formal process [for calculating
overpayments] identified in the TRICARE operations manual” was not followed;
(5) “the appropriate loss amount is only the loss attributable to the specific patients
discussed at trial”; (6) the loss amount should be based on the amounts Harris
received, not the billed amounts; and (7) the loss amount “should be reduced by the
value of medically necessary services rendered to a patient.” Harris also argues
that the restitution order should be set aside for these same reasons.
“A district court’s factual determinations, including the amount of loss in
cases of fraud, are reviewed for clear error.” United States v. Popov, 742 F.3d 911,
914 (9th Cir. 2014).
We reject Harris’s first two arguments because the loss amount was based
on the trial evidence—TRICARE records and testimony, which showed that Harris
engaged in a pattern and practice of double billing. We also reject her third
argument, because even if Agent Salazar was not qualified to calculate the loss
amount, Harris does not explain how this shows that the district court’s loss
amount calculation was clearly erroneous. Harris’s fourth argument is frivolous, as
11
she provides no explanation why the court was bound by the TRICARE operations
manual in calculating the loss amount. Her fifth argument is not persuasive
because she cites no legal authority supporting that the loss amount must be limited
to the loss attributable to the specific patients discussed at trial.
As to Harris’s sixth argument, she fails to show that the district court clearly
erred in relying on the billed amounts. Under U.S.S.G. § 2B1.1, billed amounts
“constitute prima facie evidence of the amount of the intended loss,” U.S.S.G.
§ 2B1.1, cmt. n.3(F)(viii), and Harris bears the burden of rebutting that
presumption, see Popov, 742 F.3d at 916 (“[T]he parties may introduce additional
evidence to support arguments that the amount billed overestimates or understates
the defendant’s intent.”). Harris claims that she never intended to receive the
billed amounts because she knew that TRICARE paid a fixed amount under her
contract with TRICARE and she “knew the rules and had worked in the field for
many years,” but she cites no evidence supporting these assertions. Her
arguments, unsupported by any evidence, are insufficient to show that she
adequately rebutted the presumption that the billed amounts reflected the intended
loss amount. See United States v. Walter-Eze, 869 F.3d 891, 913 (9th Cir. 2017)
(holding that “counsel’s arguments, unsupported by any evidence at trial or
sentencing, that [defendant] was familiar with Medicare’s reimbursement practices
or that she did not expect to recoup the full billed amount” were insufficient to
12
rebut the presumption). Because she does not point to any rebuttal evidence that
she presented, she fails to show that the district court clearly erred in relying on the
billed amounts.2
Harris’s final argument is that the loss amount should be reduced by
$84,710, the value of legitimate services that were rendered by therapists
(according to Harris), but which were improperly billed using Spheeris’s
credentials. Harris makes the conclusory assertion that “services were provided to
patients and were medically necessary,” but she identifies no evidence in the
record supporting her claim that services equivalent to $84,710 had been
legitimately rendered. She therefore fails to demonstrate that the district court
clearly erred by refusing to reduce the loss amount by $84,710.
In sum, Harris fails to show that the district court’s intended loss amount
2
During oral argument, Harris’s counsel suggested that the district court prevented
Harris from presenting this rebuttal evidence when it denied Harris’s request for an
evidentiary hearing. Oral Arg. at 40:00–40:10,
https://www.youtube.com/watch?v=EMVefFTQEsY. Based on our review of the
record, however, in requesting an evidentiary hearing, Harris’s counsel never
informed the district court that Harris intended to present evidence about the
amounts she intended to receive from TRICARE.
We recognize that, based on our independent review of the record, Harris
submitted some evidence from which it could be inferred that the TRICARE
reimbursement rates were fixed and that she had signed a contract agreeing to
those fixed rates. Harris neither cites this evidence nor explains how the district
court’s loss amount was clearly erroneous given this evidence. Even if Harris had
done so, however, this evidence could not likely have established clear error,
because the evidence says little about her familiarity with TRICARE’s
reimbursement practices and whether she intended to receive the billed amounts.
13
was clearly erroneous. Because Harris’s arguments challenging the loss amount
lack merit, her argument that the restitution order should be vacated for the same
reasons also fails.
7. Harris appeals from the district court’s imposition of a sentencing
enhancement for obstruction of justice under U.S.S.G. § 3C1.1. She argues that
the district court’s factual findings supporting the enhancement, including that
Harris acted willfully, were erroneous. We review the district court’s findings for
clear error. See United States v. Castro-Ponce, 770 F.3d 819, 821 (9th Cir. 2014).
The district court agreed with the presentence report’s findings that after
Harris had received a grand jury subpoena, Harris approached Fiesta and told
Fiesta that Fiesta had to plead guilty to wire fraud because Harris had a doctor’s
note showing that Harris was not responsible for the audit. Based on these
findings, the district court determined that imposition of the enhancement was
proper because Harris “was attempting to . . . put over . . . the responsibility [on]
Abigail Fiesta.”3
The district court’s findings are directly supported by Fiesta’s testimony at
trial. Fiesta testified that Harris called Fiesta and asked to meet with her. During
their private conversation, Harris told Fiesta to plead guilty and explained that
3
As far as we can tell from the record, nothing suggests that the government
pursued charges against Fiesta related to Harris’s fraudulent scheme.
14
Harris had a doctor’s note saying that she was out for surgery during the audit.
That Harris initiated the conversation with Fiesta and told Fiesta to plead guilty to
uncharged crimes is evidence supporting that Harris acted willfully. See United
States v. Manning, 704 F.3d 584, 585 (9th Cir. 2012) (stating that “willfully” under
U.S.S.G. § 3C1.1 “requires that the defendant consciously act with the purpose of
obstructing justice” (quotation mark and citation omitted)). The district court’s
findings are not clearly erroneous.
AFFIRMED.
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