United States v. Shannon
| Citation | 803 F.3d 778 |
| Decision Date | 01 September 2015 |
| Docket Number | No. 14–1727.,14–1727. |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Richard SHANNON, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED:Michael R. Dezsi, Law Office of Michael R. Dezsi, PLLC, Detroit, Michigan, for Appellant. Mark J. Chasteen, United States Attorney's Office, Detroit, Michigan, for Appellee. ON BRIEF:Michael R. Dezsi, Law Office of Michael R. Dezsi, PLLC, Detroit, Michigan, for Appellant. Mark J. Chasteen, United States Attorney's Office, Detroit, Michigan, for Appellee.
Before: KEITH, CLAY, and STRANCH, Circuit Judges.
Defendant–Appellant, Richard Shannon, appeals his conviction and sentence stemming from his involvement in a large-scale Medicare fraud scheme in which twenty-one people were indicted. Shannon was convicted of one count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349 and sentenced to 86 months imprisonment. On appeal, Shannon argues that (1) the district court erred in allowing the Government to introduce his proffer statements into evidence during trial; and (2) the district court's sentence was procedurally unreasonable. We AFFIRM the district court's ruling admitting Shannon's proffer statements. However, because the district court's sentence failed to comport with Federal Rule of Criminal Procedure 32(i)(3)(B), we VACATE Shannon's sentence and REMAND for resentencing.
On October 26, 2012, a jury found Shannon guilty of one count of conspiracy to commit health care fraud. On May 13, 2014, Shannon was sentenced to 86 months incarceration. The circumstances surrounding Shannon's conviction are as follows:
In 2008, Shannon met Mohammed Shahab, an owner and operator of various health care agencies in Michigan, through another co-conspirator. Shannon subsequently agreed to work for Shahab as a “marketer” or “recruiter” for two of Shahab's home health-care agencies: All American Home Health Care (“All American”) and Patient Choice Home Health Care (“Patient Choice”). Both agencies were run by Hassan Akhtar. Shannon's role required him to obtain account information and signatures on pre-signed medical notes from Medicare beneficiaries in exchange for $50–$100 and/or prescription narcotics. Shannon then delivered these pre-signed notes to the health care agencies where they were fraudulently signed by medical professionals. The billing staff then billed the Medicare accounts for services that were not rendered. Shannon was paid $400–$600 for each “patient” he recruited. To disguise their illegal scheme as legitimate payment for services rendered to Shahab's agencies, Shahab instructed Shannon to establish his own company in order to submit invoices to Shahab's agencies for payment. Shannon established Shannon Community Liaison, and Richard Shannon Community Liaison, to receive payment.
On July 13, 2010, an indictment charged Shannon and several others with conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349. On December 3, 2010, Shannon, along with counsel, met with the Government to make a proffer statement. Prior to the proffer statement, Shannon and his attorney were provided with a proffer agreement, also known as a Kastigar letter. The agreement was signed by the Government, Shannon, and his defense counsel. The agreement provided, in relevant part, that:
(R. 496–2, Proffer Agreement, Pg ID 2149). During the proffer session, Shannon made several inculpatory statements regarding his involvement in the health care fraud conspiracy.
At Shannon's trial, the Government offered the testimony of Akhtar, who pleaded guilty and cooperated with the Government. Akhtar testified that he ran Shahab's clinics, Patient Choice and All American (R. 622, Trial Transcript, Pg ID 3633), and that he knew Shannon as a recruiter for these clinics. (Id. at Pg ID 3634). Akhtar testified that he paid Shannon $400 for every patient Shannon recruited, and that Shannon claimed to pay each patient between $50 and $100, in addition to prescription pain pills. (Id. at Pg ID 3643, 3640). Akhtar further testified that he received a call from a patient stating that he had not received money that Shannon promised to him. (Id. at Pg ID 3637–39). On cross-examination, the following exchange occurred between Shannon's counsel and Akhtar:
(R. 623, Trial Transcript, Pg ID # 3802). On October 16, 2012, in response to this exchange and Shannon's questioning of other witnesses, the Government filed its Motion to Use Statements Made by Defendant Richard Shannon During Proffer Sessions.1 (R. 496, Pg ID # 2140–58). In its motion, the government asserted that Shannon waived the restrictions on the use of his proffer statements when Shannon's counsel “repeatedly attempted to elicit testimony that [was] inconsistent with [ ] statements by [Defendant].” The district court found that the defense's cross-examination went “too far,” and led to an inference that was inconsistent with Shannon's proffer. (R. 674, Trial Transcript at 19, Page ID 5638). The district court granted the Government's motion to allow introduction of Shannon's proffer statements. The jury found Shannon guilty of one count of conspiracy to commit health care fraud.
During sentencing, Shannon objected to the Government's fraud loss calculation.2 Particularly, Shannon disputed the Government's assertion that he received $186,775.00 from the conspiracy, contending that at trial, the Government had argued and put forth proof only that Shannon profited $55,350.00. Using a statistical extrapolation formula, the Government then calculated the amount of the fraud loss as $1,680,975.00.3 This amount was derived from an extrapolation of: (1) the total amount paid to Shannon of $186,775.00; (2) divided by an average payment to Shannon of $500 per patient; and (3) multiplied by the average Medicare payment of $4,500 per patient episode. While not disputing that it had only put forth evidence of $55,350.00 at trial, the Government countered that, during the sentencing phase, the court was free to consider evidence of Shannon's other relevant conduct. Thus, the Government submitted, as an exhibit to its Sentencing Memorandum a chart purporting to show additional payments to Shannon. These charts appeared to show that Shannon had actually profited an additional $131,425.00 from separate, but related, schemes of health care Medicare fraud, bringing his profit to $186,775.4
The district court accepted the Government's $1,680,975.00 fraud loss calculation, which resulted in a 16–point increase and an advisory guideline sentence range of 92–115 months. The district court sentenced Shannon below the guidelines to 86 months imprisonment. Shannon appeals.
Shannon first argues that the district court erred in allowing the Government to introduce portions of his proffer statements into evidence. Specifically, Shannon challenges the district court's determination that he waived the protections of his proffer agreement by offering evidence that was inconsistent with his proffer statements. Shannon contends that he did not “offer any evidence” because he did not “call any witnesses or put on any defense case.” Appellant Br. 20. The Government, on the other hand, asserts that Shannon waived the protections of his proffer agreement when he cross-examined Akhtar, thereby eliciting responses that were inconsistent with his proffer statements. This cross-examination, the Government argues, amounts to an “offer of evidence.”
In considering this issue, we engage in a two-part analysis. We first look at the terms of Shannon's proffer agreement for an interpretation of its contents. The agreement is a “contract that must be interpreted ‘to give effect to the intent of the parties.’ ” United States v. Barrow, 400 F.3d 109, 117 (2d Cir.2005). “Because the interpretation of a contract is generally a question of law, we first review the first issue de novo.” Id. “If we conclude that the proffer agreement waiver does apply in this case, our second step is to review for abuse of discretion the district court's evidentiary rulings admitting [Shannon's...
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