State v. Wiley

[Cite as State v. Wiley, 2017-Ohio-2744.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State of Ohio, :
Plaintiff-Appellee, :
No. 16AP-686
v. : (C.P.C. No. 15CR-5663)
Lenore Wiley, : (REGULAR CALENDAR)
Defendant-Appellant. :
D E C I S I O N
Rendered on May 9, 2017
On brief: Michael DeWine, Samual J. Kirk, Attorney
General, and Anil Patel, for appellee. Argued: Samuel J.
Kirk.
On brief: Yeura R. Venters, Public Defender, and John W.
Keeling, for appellant. Argued: John W. Keeling.
APPEAL from the Franklin County Court of Common Pleas
BRUNNER, J.
{¶ 1} Defendant-appellant, Lenore Wiley, appeals a judgment entry of the
Franklin County Court of Common Pleas issued on September 1, 2016 insofar as it
ordered her to pay restitution of $44,316.23 to the Ohio Department of Medicaid.
Because we agree that the State presented evidence to show that it suffered an economic
loss only in the amount of $1,748.54, the $44,316.23 restitution award was excessive. We
therefore reverse and remand for imposition of restitution in an amount consistent with
the evidence and instruct that the trial court shall give consideration to Wiley's ability to
pay in accordance with R.C. 2929.19(B)(5).
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} A Franklin County Grand Jury indicted Wiley on November 17, 2015 for
Medicaid fraud in the range of $7,500 to $150,000 and several other offenses. She pled
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"not guilty" to the indicted offenses on February 12, 2016. But on August 3, 2016, she pled
"guilty" to Medicaid fraud in the range of $1,000 to $7,500. The State and Wiley’s
counsel jointly recommended a sentence of community control, along with restitution in
an amount to be determined. (Aug. 3, 2016 Plea Tr. at 11-12, filed Nov. 8, 2016; Aug. 31,
2016 Plea Form.) The remaining indicted offenses were dismissed.
{¶ 3} During the plea hearing but after the court accepted her guilty plea, the
prosecution called an investigator as a witness to present evidence of the amount of
restitution she owed. (Plea Tr. at 14.) The investigator testified that she began
investigating Wiley in 2012 in connection with a report of a kickback scheme. Id. at 17.
Video surveillance revealed that with respect to a Medicaid recipient, "Curry" (with whom
Wiley had a kickback scheme), Wiley did not provide services for which Medicaid was
billed during the two months of video surveillance. Id. at 17-18, 26-28. The amount of
wrongful payment totaled $1,748.54. Id. at 17-18.
{¶ 4} Wiley was only employed for companies receiving Medicaid funds because
she used forged BCI background checks to avoid disqualification for impermissible
criminal convictions on her record. Id. at 20-21. Thus, the investigator stated that the
loss to Medicaid was the total amount billed during Wiley's entire multi-year period of
employment, $44,316.23. Id. at 20-24. She did admit, however, that the State had no
evidence that Wiley had not provided the services for which the State was billed with
respect to any recipients other than "Curry." Id. at 25-27. The investigator witness also
admitted that Wiley had not billed Medicaid, herself, nor did she receive $44,316.23,
because Wiley submitted timesheets to her various employers who billed Medicaid. Id. at
28-29. Medicaid funded home-health aids like Wiley, the witness testified, make
approximately $8 per hour (though the witness did not know how much Wiley was
actually paid). Id. at 29-30.
{¶ 5} On September 1, 2016, the trial court held a sentencing hearing. (Sept. 1,
2016 Sentencing Tr., filed Nov. 8, 2016.) At sentencing, the State argued that:
But for the Defendant's actions of actively deceiving these
home health agencies, the Ohio Department of Medicaid
would not have improperly paid out the monies that it did;
and it's for that reason that the State is asking for the full
restitution amount, as we noted earlier, of $44,316.23 as a
condition of community control.
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Id. at 4. The defense contended that potential restitution argued for by the State fell into
two categories: first—actual loss for money paid in exchange for services not provided (a
small subset of the overall restitution sought), and second—a purported loss for all
services reportedly provided by Wiley based on the notion that she was ineligible to
provide the services because of her criminal record. Id. at 5-6. The defense objected to
the second category of restitution. Id.
{¶ 6} The trial court stated its reasoning on restitution:
I mean, the fact is that you [Wiley] shouldn't have been taking
care of these people. Regardless of whether you actually
performed the services or not, there's a reason they have
requirements to -- you need approval to be able to do this and
you falsified background information and passed off old --
passed off old fingerprint background checks as being
recently, correct? Is that --
[PROSECUTOR]: Yes, Your Honor, it was just altered past
background checks that she would give out.
THE COURT: Yeah. And had -- had these not been paid out --
or, you know, had -- had they been aware of your actual
background history, you wouldn't have had these jobs and you
wouldn't have had these assignments and you wouldn't have
been paid $44,000 and change for the work that you did. And
the fact that you did the work doesn't change the fact that you
weren't entitled to the money.
As to the restitution, I do find that the State has presented
competent and credible evidence and established that they are
entitled to restitution in the amount of $44,316.23 for work
that Ms. Wiley was not entitled to. This is not a case of unjust
enrichment because she shouldn't have been providing those
services to begin with. This is fraud, clear and simple.
Id. at 9-10.
{¶ 7} With evidence that Wiley's apparent motive was that she was attempting to
support her family and that she had stage III breast cancer, the trial court sentenced her
to five years of community control, including the payment of restitution in the amount of
$44,316.23. Id. at 7-9, 11; Sept. 1, 2016 Jgmt. Entry at 1. Wiley now appeals the
imposition of restitution.
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II. ASSIGNMENTS OF ERROR
{¶ 8} Wiley asserts three assignments of error for review:
[1.] THE TRIAL COURT ERRED WHEN IT AWARDED
RESTITUTION TO MEDICAID FOR SERVICES IT PAID
THE DEFENDANT TO PROVIDE BECAUSE THE
MEDICAID PROGRAM SUFFERED NO ECONOMIC LOSS
SINCE THESE SERVICES WERE ACTUALLY PERFORMED.
[2.] THE TRIAL COURT ERRED WHEN IT IMPOSED A
FINANCIAL SANCTION OF RESTITUTION FOR THEFT IN
AN AMOUNT GREATER THAN THE OFFENSE THE
DEFENDANT PLED GUILTY TO AND WAS CONVICTED OF
COMMITTING.
[3.] THE TRIAL COURT ERRED WHEN IT ORDERED THE
DEFENDANT TO PAY RESTITUTION IN THE AMOUNT OF
$44,316.23, WITHOUT CONSIDERING HER FUTURE
ABILITY TO PAY AS REQUIRED BY LAW.
III. DISCUSSION
A. First Assignment of Error—Whether the Trial Court Erred in Awarding
Restitution in Excess of Proven Economic Loss
{¶ 9} One sanction a sentencing court may impose is:
Restitution by the offender to the victim of the offender's
crime * * * in an amount based on the victim's economic loss.
* * * If the court imposes restitution, the court may base the
amount of restitution it orders on an amount recommended
by the victim, the offender, a presentence investigation report,
estimates or receipts indicating the cost of repairing or
replacing property, and other information, provided that the
amount the court orders as restitution shall not exceed the
amount of the economic loss suffered by the victim as a direct
and proximate result of the commission of the offense.
(Emphasis added.) R.C. 2929.18(A)(1).
"Economic loss" means any economic detriment suffered by a
victim as a direct and proximate result of the commission of
an offense and includes any loss of income due to lost time at
work because of any injury caused to the victim, and any
property loss, medical cost, or funeral expense incurred as a
result of the commission of the offense. "Economic loss" does
not include non-economic loss or any punitive or exemplary
damages.
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R.C. 2929.01(L). The Supreme Court of Ohio has reiterated the statutory limitation of
restitution to economic losses:
A trial court has discretion to order restitution in an
appropriate case and may base the amount it orders on a
recommendation of the victim, the offender, a presentence
investigation report, estimates or receipts indicating the cost
of repairing or replacing property, and other information, but
the amount ordered cannot be greater than the amount of
economic loss suffered as a direct and proximate result of the
commission of the offense.
(Emphasis added.) State v. Lalain, 136 Ohio St.3d 248, 2013-Ohio-3093, paragraph one
of the syllabus. See also State v. Simmons, 10th Dist. No. 15AP-708, 2017-Ohio-1348,
¶ 59-61 ("Thus, the court was entitled to order restitution * * * but only if it had
competent and credible evidence demonstrating that the amount ordered corresponded
to economic loss ODM suffered as a proximate result of defendant’s theft").
{¶ 10} The limitation of restitution to direct and proximate economic loss has led
courts to hold, for instance, that "restitution is limited to a victim's economic loss. If a
victim is reimbursed by a third-party, the victim has not suffered an economic loss." State
v. Crum, 5th Dist. No. 12 CAA 08 0056, 2013-Ohio-903, ¶ 12. Following this principle,
the Twelfth District Court of Appeals, in State v. Hatmaker, held that where a victim
estimated the value of a destroyed car at $3,500 and received $3,000 from insurance,
restitution should have been limited to $500 and the trial court erred in imposing
restitution of $1,250. 12th Dist. No. CA2012-10-198, 2013-Ohio-3202, overruled on other
grounds, State v. Collins, 12th Dist. No. CA2014-11-135, 2015-Ohio-3710, ¶ 29. Adhering
to the maxim that loss is the proper measure of restitution, the Eighth District Court of
Appeals, in State v. Labghaly, held that a restitution award of $13,665 was not properly
imposed where, although there was evidence the defendant had been selling counterfeit
DVD movies, there was no evidence to establish that the amount of restitution imposed
properly accounted for the value of lost sales of the copyright owner. 8th Dist. No. 87759,
2007-Ohio-73. In State v. Smith, the Twelfth District found error in a restitution award
that included $7,000 paid by a victim to a third party to finish building a garage the
offender had promised to build. 12th Dist. No. CA2004-11-275, 2005-Ohio-6551, ¶ 22-23.
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The court reasoned that the $7,000 could not properly be considered a "loss" because in
exchange for the money the victim received value—a garage. Id.{¶ 11} In this case the appropriate inquiry was whether the State presented
evidence that Wiley's actions inflicted an actual economic loss on the State of Ohio in the
amount of $44,316.23. It appears to be undisputed that, with respect to the services
Wiley failed to provide to recipient "Curry," the State paid for services it never received.
(Plea Tr. at 17-18, 26-28.) As to $1,748.54 of the total figure, the State sufficiently proved
an economic loss. Id. But further than that, the State's proof fell short.
{¶ 12} The State's investigator admitted that the State had no evidence that Wiley
had failed to provide the services for which the State was billed with respect to any
recipients other than "Curry." Id. at 25-27. The investigator also presented no evidence
to suggest that Wiley had provided defective or worthless services. Rather, the State
argued and the trial court agreed, that since Wiley was disqualified (by reason of her
criminal background) from working the jobs she was working, she had no right to the
money she earned from the state's Medicaid funding. As the trial court put it:
[H]ad [the State] been aware of your actual background
history, you wouldn't have had these jobs and you wouldn't
have had these assignments and you wouldn't have been paid
$44,000 and change for the work that you did.1 And the fact
that you did the work doesn't change the fact that you weren't
entitled to the money.
As to the restitution, I do find that the State has presented
competent and credible evidence and established that they are
entitled to restitution in the amount of $44,316.23 for work
that Ms. Wiley was not entitled to. This is not a case of unjust
enrichment because she shouldn't have been providing those
services to begin with.
(Sentencing Tr. at 10.) This analysis erroneously shifts the focus from the appropriate
legal question--whether the State suffered an economic loss.
{¶ 13} While both sides agree that had Wiley not deceived the State of Ohio in
order to provide home health services for the various Medicaid recipients she served, she
1 There is no evidence suggesting that Wiley actually received anything approximating $44,000. The
evidence was rather that Wiley submitted timesheets to her various employers who, in turn, billed Medicaid
for that amount. (Plea Tr. at 28-29.) Wiley was then paid hourly, presumably at a lesser rate and likely on
the order of $8 per hour. Id. at 30.
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No. 16AP-686
would not have held those jobs or been paid for them, no evidence suggests the State
actually suffered a proximate loss from Wiley's actions.
{¶ 14} No evidence was presented to suggest that the Medicaid recipients Wiley
served would not still have needed services or that the State would not still have had to
pay someone to provide such services. The State still would have paid for services and the
recipients still would have received services, whether it was Wiley or someone else
providing them. Though Wiley did not possess all necessary qualifications for providing
the services, the State presented no evidence to the effect that the services Wiley did
provide were incompetently rendered in any respect such that they would have been
reduced in material value. Based on what Wiley did, the State's economic position (other
than with respect to recipient "Curry") did not change because of her crime. With or
without Wiley, these Medicaid recipients needed Medicaid services and the State was
required to pay for them. This is not a loss.
{¶ 15} Yet, citing no case law in support, the State argues that Wiley's services were
effectively worthless because Wiley was "legally disqualified from performing any work
from the outset." (Feb. 1, 2017 State Brief at 8.) We have previously recognized that an
attorney who defrauds his client is not entitled to collect a fee for his services thus
diminishing his client/victim's restitution by a contractual fee offset. State v. Silverman,
10th Dist. No. 05AP-837, 2006-Ohio-3826, ¶ 160. Thus a restitution award in a case
where an attorney has defrauded a client may properly include (as economic loss) both
the amount stolen in the fraud and the amount paid by the client to the attorney as a fee.
Id. at ¶ 158-60. It does not follow from this that the State similarly should be able to
recover fees paid to Wiley for services rendered under false pretenses. (State Brief at 9-
10.) Unlike in attorney fee-forfeiture cases,2 no evidence was presented that the services
Wiley provided were valueless, even though she was technically disqualified from
providing them by virtue of her criminal background. And the State has provided no
authority to support such a notion in the Medicaid provider context.
2 The Silverman case seems to rest on the principle that the services of a traitorous advocate are actually
valueless. Id. at ¶ 159, citing Restatement of the Law 3d, Governing Lawyers (2000), Section 37; see also
Restatement of the Law 3d, Governing Lawyers (2000), Section 37, at comment b ("a lawyer's clear and
serious violation of a duty to a client destroys or severely impairs the client-lawyer relationship and thereby
the justification of the lawyer's claim to compensation").
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{¶ 16} Other than the $1,748.54 of services billed but not provided with respect to
recipient "Curry," the State presented no evidence that it suffered an economic loss.
Based on the evidence, the trial court erred in imposing restitution in excess of $1,748.54.
{¶ 17} We sustain Wiley's first assignment of error.
B. Second Assignment of Error—Whether the Trial Court Erred in
Ordering Restitution in Excess of the Fraud Value Range of the Offense
to which Wiley Pled Guilty
{¶ 18} Wiley pled guilty to one count of Medicaid fraud as a fifth-degree felony.
(Aug. 31, 2016 Plea Form.) R.C. 2913.40(E) provides that Medicaid fraud is a fifth-degree
felony when the "value of property, services, or funds obtained in violation of this section
is one thousand dollars or more and is less than seven thousand five hundred dollars."
Wiley argues that because she was only convicted of fraud within that range, no
restitution amount equal to or in excess of $7,500 could legally be imposed. (Dec. 6, 2016
Wiley Brief at 24-40.) We have already determined that the State did not present
evidence of economic loss beyond $1,748.54 and the trial court therefore erred in
imposing restitution greater than that amount. Whether the trial court could have legally
imposed restitution equal to or in excess of $7,500 is now a moot question.
{¶ 19} Wiley's second assignment of error is moot and considered no further.
C. Third Assignment of Error—Whether the Trial Court Erred in Ordering
Restitution Without Considering Wiley's Ability to Pay
{¶ 20} "Before imposing a financial sanction under section 2929.18 of the Revised
Code or a fine under section 2929.32 of the Revised Code, the court shall consider the
offender's present and future ability to pay the amount of the sanction or fine." R.C.
2929.19(B)(5). In construing this requirement, we have stated:
When determining a defendant's present and future ability to
pay, there are no express factors which must be considered, or
specific findings which must be made. State v. Finkes (March
28, 2002), Franklin App. No. 01AP-310, 2002-Ohio-1439.
Further, while a trial court may hold a hearing to determine if
the defendant is able to pay the sanction, a hearing is not
required by statute. Nonetheless, there merely must be some
evidence in the record the trial court considered defendant's
present and future ability to pay the sanction. State v. Fuller,
Lucas App. No. L-02-1387, 2004-Ohio-2675, at ¶ 8.
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State v. Conway, 10th Dist. No. 03AP-1120, 2004-Ohio-5067, ¶ 7. While the trial court
stated in its judgment entry that, "[t]he Court has considered the Defendant’s present and
future ability to pay a fine and financial sanction, pursuant to R.C. 2929.18," it made no
express consideration of the issue or finding on the record to this end. (Jgmt. Entry at 2.)
Regardless of what restitution amount may be ordered, even under the simple admonition
in Conway, some genuine consideration of ability to pay must occur. Id.{¶ 21} However, since we have sustained Wiley's first assignment of error, this
issue is moot.
{¶ 22} Wiley's third assignment of error is moot and considered no further.
IV. CONCLUSION
{¶ 23} Restitution is for economic loss suffered by the victim as a direct and
proximate result of the commission of the offense. The evidence presented by the State
limits restitution to no more than $1,748.54. This case is remanded to the Franklin
County Court of Common Pleas for a new hearing on restitution with instructions that the
trial court should limit its imposition of restitution to the economic loss suffered by the
State and thereafter consider the defendant's ability to pay. The first assignment of error
is sustained and the remaining two assignments are moot.
Judgment reversed and
remanded with instructions.
KLATT and SADLER, JJ., concur.