U.S. v. Davis, 94-5112

Decision Date02 July 1997
Docket NumberNo. 94-5112,94-5112
Citation117 F.3d 459
PartiesMedicare & Medicaid Guide P 45,500, 11 Fla. L. Weekly Fed. C 124 UNITED STATES of America, Plaintiff-Appellee, v. Perla Martin DAVIS, Marta Morfa, Emilio Valdes, Elva R. Lamas, Defendants-Appellants.
CourtU.S. Court of Appeals — Eleventh Circuit

Jill K. Traina, Coral Gables, FL, for Marta Morfa.

Benedict P. Kuehne, Sale & Kuehne, P.A., Miami, FL, for Emilio Valdes.

Kathleen M. Williams, Federal Public Defender, Helen C. Trainor, Asst. Federal Public Defender, Miami, FL, for Elva R. Lamas.

Marissa Tinkler Mendez, Coral Gables, FL, for Perla Martin Davis.

William A. Keefer, U.S. Attorney, Adalberto Jordan, Linda Collins Hertz, Kathleen Salyer, Miami, FL, for Plaintiff-Appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before HATCHETT, Chief Judge, COX, Circuit Judge, and MESKILL *, Senior Circuit Judge.

HATCHETT, Chief Judge:

Appellants Perla Martin Davis, Elva Lamas, Marta Morfa and Emilio Valdes, M.D., were convicted in a complex Medicare fraud scheme. On appeal, appellants challenge their convictions and sentences on a number of grounds, including insufficient evidence, erroneous jury instructions, failure to charge the jury on an element of the offense, admission of uncharged criminal conduct evidence, exclusion of expert psychological testimony, prejudicial prosecutorial comments, failure to grant sentencing departures, and improper assessment of restitution. We affirm the restitution orders assessed against appellants Davis, Lamas and Morfa, and the judgments and sentences that the district court entered in all other respects.

BACKGROUND

In August of 1993, a grand jury returned a 23-count Medicare fraud indictment against the appellants and eight other defendants. The indictment charged each of the twelve with conspiring, in violation of 18 U.S.C. § 371, to (a) "defraud the United States by impeding, impairing and obstructing the function of the Department of Health and Human Services in administering the Medicare Program," The government alleged that the appellants and their co-defendants executed the Medicare fraud scheme through the operation of sixteen related companies (the Morfa companies). Certain members of the Morfa extended family, including appellants Davis, Lamas and Morfa, owned, operated and worked for the businesses at different times during the course of the conspiracy. Over a period of several years, the Morfa companies submitted false claims and billed Medicare for medically unnecessary nutritional supplements and feeding supply kits, ostensibly for the purpose of parenteral and enteral nutritional (PEN) therapy, the majority of which the intended patients never received. Participants in the scheme included (1) recruiters, who solicited patients through whom Medicare could be billed fraudulently without their knowledge; (2) physicians, such as Valdes, who signed blank Certificates of Medical Necessity (CMNs) which authorized the issuance of PEN therapy medical supplements On July 20, 1994, the United States District Court for the Southern District of Florida granted judgments of acquittal on the false claims count against Lamas (Count 16), and one false claims count against Morfa (Count 14). On August 1, 1994, the jury returned guilty verdicts on most of the offenses charged in the indictment. Each appellant received a guilty verdict on Count 1, the multiple-object conspiracy. In addition to the conviction on Count 1, Davis received guilty verdicts on Counts 2, 3, 8 and 9, and an acquittal on Count 19; the jury declared Morfa guilty on Counts 10, 21, 22 and 23; and Valdes was found guilty on Counts 4, 7, 8 and 10. 2 In October of 1994, the district court sentenced Davis to forty-one months, Lamas to forty-six months and Morfa to forty-six months of imprisonment. Pursuant to the information and recommendations found in the appellants' Presentence Investigation Reports (PSR), the court ordered them to pay restitution jointly and severally to the United States Department of Health and Human Resources (HHR) in installments as the Bureau of Prisons instructed. The district court imposed the following restitution amounts: $9,182,271.40 for Davis, $8,119,445.40 for Lamas and $8,119,445.00 for Morfa. Valdes received a sentence of thirty months imprisonment; the court also ordered Valdes to pay $261,896.73 in restitution.

                and (b) commit offenses against the United States, including violations of the False Claims Statute, 18 U.S.C. § 287, and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b (Count 1).  Counts 2-16 of the indictment charged various defendants, including appellants, with substantive violations of the False Claims Act. 1  Counts 17-23 included indictments for violations of 42 U.S.C. § 1320a-7b.  The grand jury charged both Davis and Morfa with violating the Anti-Kickback Statute:  Davis in Count 19 and Morfa in Counts 21-23.  The eight codefendants, including Frank Morfa, Perla Morfa, Celia Morfa Martin, Mario Fonesca, Ana Conde, Luis Mateus, Sandra Mayorga and Nora Vega, subsequently pleaded guilty, leaving appellants to proceed to trial
                and supply kits for the recruited patients, regardless of their medical necessity and the patients' eligibility to receive such products;  and (3) managers, who paid the recruiters to locate Medicare-eligible participants, paid the physicians for signing false CMNs, and ran the actual Medicare billing operation--completing the fraudulent CMNs, preparing falsified Medicare claim forms and monthly summaries, and filing the documents with Medicare seeking reimbursement
                
ISSUE

The issue is whether the district court committed plain error in ordering appellants Davis, Lamas and Morfa to pay restitution jointly and severally, without making the proper factual findings regarding the amount of loss and appellants' respective abilities to pay. 3

CONTENTIONS

The appellants argue that the district court (1) plainly erred in imposing restitution on them for amounts greater than their specific contributions to the conspiracy; and (2) plainly erred in failing to make the requisite factual findings regarding each appellant's ability to pay.

The government counters that the district court may attribute the total loss associated with the conspiracy to a particular conspirator when imposing restitution. A defendant is liable for the foreseeable acts of co-conspirators. While indigence is a consideration, it is, nonetheless, one of many factors and does not itself bar an order of restitution. Because the appellants did not dispute the relevant facts at trial, the government contends that the district court was not required to make explicit factual findings on the restitution issue.

DISCUSSION

In this appeal, appellants challenge the restitution order on two grounds: the district court erred in determining the amount of loss attributable to each appellant for restitution purposes; and the district court failed to make findings as to each appellant's ability to pay the restitution amount. The Victim and Witness Protection Act of 1982 (VWPA), 18 U.S.C. §§ 3663-64, empowers the district court to award restitution to victims. The VWPA enumerates those factors which a district court must consider before imposing a restitution order. Section 3664(a) provides:

The court, in determining whether to order restitution under section 3663 of this title and the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate.

18 U.S.C. § 3664(a) (1994). 4 The court must award restitution "in accordance with sections 3663 and 3664." United States v. Twitty, 107 F.3d 1482, 1493 (11th Cir.1997) (quoting 18 U.S.C. § 3556).

This court ordinarily reviews a district court's restitution order for abuse of discretion. United States v. Remillong, 55 F.3d 572, 574 (11th Cir.1995). The court reviews the legality of the restitution order de novo. United States v. Cobbs, 967 F.2d 1555, 1556 (11th Cir.1992). The appellants admit, however, that they did not dispute the restitution order at sentencing. Moreover, the appellants did not state any objections to their PSRs on the issue of restitution. A defendant's failure to challenge a restitution order at sentencing constitutes a waiver of the objection. United States v. Stinson, 97 F.3d 466, 468 n. 1 (11th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1007, 136 L.Ed.2d 885 (1997). The appellants were obligated to preserve this issue for appeal, and their silence in the face of that duty precludes us from addressing the merits of their contentions absent a showing of manifest injustice. Effective appellate review is hindered when the asserted error has not been brought to the district court's attention. Under these facts, therefore, we will review the restitution orders for plain error. See United States v. Obasohan, 73 F.3d 309, 310-11 (11th Cir.1996) (absent manifest injustice, this court will not entertain an appeal of a restitution order if the defendant failed to raise an objection to the district court); see also Cobbs, 967 F.2d at 1557-58 (if plain error exists, this court may review the claim).

1. The Amount of Loss

The appellants fail to show any error in the district court's measure of restitution assessed on behalf of HHR. The appellants contend that the district court did not properly tailor the amount of restitution to each appellant's specific conduct within the conspiracy. In Obasohan, this court held that a district court may order a defendant to pay restitution for losses "which result from acts done in furtherance of the conspiracy of which the defendant is convicted." 73 F.3d at 311. After careful review of the record, we conclude that the district court did not commit...

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