Case o' The Week: Convictions of King and Queen Upheld by Ninth - Anieze-Smith and Restitution

  Queen avoids custody.

   (But not restitution).

United States v. Anieze-Smith, 2019 WL 1944737 (9th Cir. May 2, 2019), decision available here.

Players: Decision by Judge Gould, joined by Judge Nguyen and District Judge Benitez. 

  Hard-fought appeal by, among others, CD Cal AFPD Kathryn Ann Young.   

Facts: Queen Anieze-Smith, and her co-defendant, Abdul King Garba, owned a medical supply company. Id. at *1. She was indicted in April 2013 – the statute of limitations went back five years, to April 2008. Id. The indictment alleged a Medicare fraud scheme involving powered wheelchairs that took place from 2006 to 2009, and alleged five executions that took place in 2008 (within the S.O.L.). Id. at *4.

   She was convicted after a jury trial, and the district court imposed restitution for the entire amount billed to Medicare – which necessarily included fraudulent acts outside of the statute of limitations. Id.

Issue(s): “[W]e turn to Anieze-Smith’s argument that the district court’s restitution order should be limited to losses traceable to executions of the fraudulent scheme that occurred within the statute of limitations.” Id.

  “Anieze-Smith’s argument presents an issue of first impression in this circuit . [W]e have held that the MVRA authorizes a district court to impose restitution based on related but uncharged conduct that is part of a fraudulent scheme . . . But we have not yet had occasion to address whether that rule applies when the conduct occurred outside the statute of limitations.” Id. at *5.

Held: “[T]he text of the MVRA does not limit restitution to the reach of the indictment, but instead authorizes district courts to order restitution for all losses directly resulting from conduct throughout the course of the fraudulent scheme. We reject Anieze-Smith’s argument and hold that the MVRA authorizes district courts to impose restitution to all victims for the losses they suffered from the defendant’s conduct throughout the course of the fraudulent scheme, even where such losses were in part caused by conduct outside the statute of limitations.” Id. at *5.

Of Note: Medicare fraud, powered wheelchairs? Sound familiar? In 2016, the Ninth decided an important “abuse of trust” enhancement issue in the context of another powered wheelchair case, United States v. Adebimpe, 819 F.3d 1212 (9th Cir. 2016); see also blog here. 

  These appeals are the tail end of a prosecution effort focused on Medicare wheelchair fraud. Tough cases to defend – particularly when the recipients walk up to the stand to testify in court, with no wheelchair, walker, or cane. See article here. 

How to Use: Anieze-Smith was ordered to pay over $800k in restitution, for offense conduct that extended over years. Id. at *3. She was a CEO with an MBA, an enrolled agent in the IRS, and she managed the company’s financial records. She was convicted after a ten-day trial. Id. at *2.

   Her sentence?

   Probation. Id. at *3.

   Remember Anieze-Smith when arguing sentencing disparity variances in these Medicare fraud cases.

                                               

For Further Reading: Last week marked the milestone of one hundred jurists nominated by President Trump and confirmed by the Senate. See article here.  By this time in his term, President Obama had 81 judicial nominees confirmed. Id. 

  Should the Ninth be expanded, with five more seats to be filled by the President during this first term? For an interesting article discussing that prospect, and reporting the Circuit's last major growth spurt, see, Ninth Circuit Recommended for Expansion. Could it mean shift to the right?, available here.

Image of Mary Queen of Scots from https://www.pinterest.com/pin/403564816588220116/

Image of Ninth Circuit Seal from https://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_Ninth_Circuit  

Steven Kalar, FPD Northern District of California. Website www.calfpd.org

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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

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