Case o' The Week: Ninth Won't Put Pull Plug on Powered Wheelchair Bump - Abuse of Trust, USSG Sec. 3B1.3, and Adebimpe
The problem with the “abuse of trust” enhancement?
Medicare trusts everyone.
United States v. Adebimpe, 2016 WL 169866 (9th Cir. Apr. 28, 2016), decision available here.
Players: Decision by Judge Murguia, joined by Judge Hurwitz. Dissent by Judge Paez.
Hard-fought appeal by ND Cal CJA Counsel Mark Eibert, Amitai Schwartz, and Chris Cannon.
Facts: Sogbein defrauded Medicare by providing power wheelchairs. Id. at *1. His wife, Adebimpe, was part of the conspiracy: she supplied the wheelchairs through her company. Id. Conspiring with a referring doctor, the couple would secure and provide wheelchairs to patients who either didn’t need them, or who lived in residences that couldn’t accommodate them (two requirements for Medicare reimbursement). Id. at *3.
After conviction in a jury trial, the district court hit both defendants with the two-level adjustment for “abuse of a position of trust” under U.S.S.G. § 3B1.3. Id. at *4. The court found they were both owners of companies involved in the scheme, that Medicare operated on an “honor system,” and that the defendants’ “understood their obligations to this by virtue of the certifications they signed.” Id. at *4.
Issue(s): “Sogbein and Adebimpe challenge the district court's application of a two-level upward adjustment under section 3B1.3 of the Sentencing Guidelines, after finding the defendants abused a position of trust with respect to Medicare.” Id. at *1.
Held: “We hold that medical equipment suppliers can have the requisite ‘professional or managerial discretion’ for the abuse-of-trust adjustment to apply, if they are responsible for determining the need for the equipment they provide and personally certify the validity of their claims to Medicare . . . . We affirm the district court's application of the abuse-of-trust enhancement in this case.” Id.
“[T]he district court correctly determined that, as medical equipment suppliers, Sogbein and Adebimpe were in positions of trust with respect to Medicare. Medicare entrusted the defendants with ‘substantial discretionary judgment’ in selecting the proper equipment, and gave them ‘considerable deference’ in submitting claims that accurately reflected patients’ medical needs through an automated reimbursement system.” Id. at *7.
Of Note: In a compelling dissent, Judge Paez reviews the record and concludes that these medical suppliers “do not exercise substantial professional or managerial discretion . . . because Medicare’s rules and regulations confine them to a ministerial role and leave all critical determinations of medical need to the beneficiary’s physician.” Id. at *12 (Paez, J. dissenting). Judge Paez, concedes the defendants’ “verification is important,” but emphasizes that trial testimony showed that it was the doctor (not the defendants) that is “entrusted with the discretionary medical need determination.” Id. at *14. He concludes the majority’s analysis is flawed because it conflates the defendants’ fraudulent behavior, with the facts necessary to support the “abuse-of-trust” enhancement. Id. at *15. Judge Paez concludes by warning that this decision is an “expansion of section 3B1.3’s applicability beyond the narrow situations in which this court has previously approved of the enhancement’s application.” Id. at *18. As discussed below, to effectively limit this opinion one has to read this very good dissent – Judge Paez’s criticisms forced some important concessions in the scope of the holding.
How to Use: In response to the dissent, the majority emphasizes that this case doesn’t expand the enhancement to, for example, those convicted of tax fraud. Id. at *11. Unlike a taxpayer, the defendants’ decision to submit the Medicare claim in this case, “requires professional judgment.” Id. The last pages of the majority decision – limiting the holding -- may help avoid making this guideline enhancement an automatic hit for all fraud clients (like “use of a computer” in child porn cases).
Nonetheless, there are few fraud defendants who shouldn’t at least consider Adebimpe when worrying about guideline exposures.
For Further Reading: Unfortunately for these defendants, powered wheelchairs are --of interest to the feds. For an (unsympathetic) article discussing power wheelchair fraud, see article here.
Image of powered wheelchair from https://en.wikipedia.org/wiki/Motorized_wheelchair#/media/File:Pride_Jazzy_Select_power_chair_001.JPG
Steven Kalar, Federal Public Defender N.D. Cal. Website at www.ndcalfpd.org