By Sheryl Allenson, J.D.
A district court did not clearly err in applying the two-level sophisticated means enhancement and four-level leader or organizer enhancement in the sentencing of an individual guilty of Medicare fraud, and therefore, the appeals court affirmed the individual’s sentence.
The individual, who was convicted of health care fraud, money laundering and conspiracy to commit the crimes was sentenced to 84 months. He appealed the sentence, claiming that the district court clearly erred in applying both the sophisticated means enhancement and the leader or organizer enhancement, which are spelled out in the U.S. sentencing guidelines (USA v. Galindo, January 9, 2020, per curiam).
With respect to the sophisticated means enhancement, the individual asserted that the case was not "especially complex, intricate, or sophisticated." In its analysis, the appeals court cited the sentencing guidelines, which defines and includes examples of the term "sophisticated means." "’Sophisticates means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense," the appeals court wrote, citing the sentencing guidelines. The court explained that it must look at the totality of the defendant’s conduct to determine sophisticated means, because there is no requirement that each of his acts be sophisticated.
In this instance, after examining and applying examples drawn from prior cases considering the enhancement, the appeals court, citing the defendant’s conduct, ruled that the district court did not clearly err in its application of the sophisticated means enhancement. Specifically, the appeals court highlighted multi-faceted conduct supporting the enhancement. For example, the court pointed out that the individual hired a Medicare biller to, for months, repetitively bill a Medicare Part D program, paying the biller $5,000 each time he billed the program.
The appeals court also noted that the individual tried to conceal the offense by laundering and directing others to launder some of the proceeds procured fraudulently. In all, the court rejected the individual’s claim that his conduct did not rise to the level supporting application of the specific means enhancement.
Turning to the four-level leader or organizer sentencing enhancement, the appeals court cited the sentencing guidelines, explaining that the enhancement may be implemented where a defendant "(1) was an organizer or leader of a criminal activity that (2) involved either five or more participants or was otherwise extensive." The appeals court laid out the factors considered in determining whether an individual is an organizer or leader.
The individual asserted that the government must prove, by a preponderance of the evidence, that the enhancement is justified. He claimed that here, the court clearly erred in its application, because the only evidence of his ownership of several of the relevant pharmacies was based on hearsay. However, the appeals court explained that the sentencing court many consider any evidence regardless of admissibility at trial, if certain elements are met. Specifically, the evidence must have a "sufficient indicia" of reliability; the court makes "explicit findings of fact as to credibility;" and, the defendant has a chance to rebut the evidence.
In this instance, the individual admitted in his guilty plea that he was the "true owner" of certain of the relevant pharmacies and that he conspired to launder the funds procured by fraud. The appeals court rejected the individual’s efforts to contest these admissions for purposes of sentencing and also cited other testimony supporting application of the four-level leadership sentencing enhancement. Specifically, the appeals court concluded that the government proved, by a preponderance of the evidence, that the individual was a leader or organizer. Thus, the district court did not clearly err in applying the sentencing enhancement. In light of its findings with respect to both sentencing enhancements, the court affirmed the district court’s ruling sentencing the individual to 84 months.
The case is No. 19-10039.
Attorneys: Sivashree Sundaram, U.S. Attorney's Office, for the United States. Daniel James Tibbitt (Daniel J. Tibbitt, PA) for Loite Galindo.
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