U.S. v. Huerta, Docket No. 03-1513.

• Decision Date: 10 June 2004
• Docket Number: Docket No. 03-1513.
• Citation: 371 F.3d 88
• Parties: UNITED STATES of America, Appellant, v. Albert HUERTA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

371 F.3d 88

UNITED STATES of America, Appellant, v. Albert HUERTA, Defendant-Appellee.

Docket No. 03-1513.

United States Court of Appeals, Second Circuit.

Argued: May 17, 2004.

Decided: June 10, 2004.

COPYRIGHT MATERIAL OMITTED

Kim A. Berger, Assistant United States Attorney for the Southern District of New York (Laura Grossfield Birger, Assistant United States Attorney, of counsel; James B. Comey, United States Attorney, on the brief), New York, NY, for Appellant.

Jeffrey M. Rubin, Rubin & Shang, New York, NY, for Defendant-Appellee.

Before: McLAUGHLIN, STRAUB, and LAY, Circuit Judges.^*

PER CURIAM.

Defendant-Appellee Albert Huerta pleaded guilty on November 7, 2001 to two counts of conspiring to submit false statements and submitting false statements relating to health care matters in violation of 18 U.S.C. §§ 371, 1035 & 2. On July 15, 2003, the District Court (Lawrence M. McKenna, Judge) sentenced Huerta to five months' imprisonment, to be followed by five months of home confinement and three years of supervised release. The court also required Huerta to pay substantial restitution. In sentencing Huerta, over the government's objection, the District Court declined to apply a leadership role enhancement and granted Huerta a downward departure for "extraordinary family circumstances." The government appeals.

BACKGROUND

In 1997, Huerta became the president of Liberty Testing Laboratory ("Liberty"), an independent clinical laboratory in Brooklyn, New York. Around the same time, he hired Ara Miranda as a sales representative to procure new client-doctors who would refer their bloodwork to Liberty.

Miranda, and several others who worked for her, paid the residents of a Miami trailer park for blood samples that they submitted to Liberty for testing. Another co-conspirator, Jose Hernandez, the owner of Dade Medical Billing, provided Miranda with the names and identification numbers of Medicare beneficiaries and doctors and Miranda attached those names to the blood samples that were submitted to Liberty.

Huerta knowingly arranged for the falsified samples to be tested and for Medicare to be billed. Huerta admitted that he customized test requisition forms for Miranda so as to maximize the recovery from Medicare. Huerta and Liberty submitted claims to Medicare of over $4.5 million and received approximately $1.7 million before the scheme was uncovered.

On December 13, 1999, the government indicted Huerta on two counts of conspiring to submit false statements and submitting false statements relating to health care matters in violation of 18 U.S.C. § 371 and 18 U.S.C. §§ 1035, 2, respectively. Huerta pleaded guilty on November 7, 2001, without a plea agreement, to both counts of the indictment. During his plea colloquy, Huerta stated as follows:

In 1997 and '98 when I was President of the Liberty Testing Laboratory[,] I agreed with others including Ara Miranda to fraudulently obtain Medicare funds. During this time[,] I and others caused Liberty to submit claims for payments to the Empire Medical Services in Manhattan for tests which I knew had not been authorized by doctors whose names appeared on the test order forms.

Five of Huerta's co-conspirators, including Miranda, Hernandez, Ramon Pichardo (Liberty's billing manager), and two of Miranda's workers, Doris Delatorre and Alejandro Pujol, were also eventually charged with health care fraud in connection with the scheme. Like Huerta, all five pleaded guilty.

DISCUSSION

I. The Section 3B1.1 Role Enhancement

Under section 3B1.1(a) of the United States Sentencing Guidelines, a defendant's base offense level should be increased by four levels "[i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." The guideline further provides that "[i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive," the offense level should be increased by three levels. U.S.S.G. § 3B1.1(b).

In evaluating the District Court's decision not to impose a section 3B1.1 leadership-role enhancement on Huerta, it is well established that we review its factual findings for clear error. See 18 U.S.C. § 3742(e) ("The court of appeals ... shall accept the findings of fact of the district court unless they are clearly erroneous."); United States v. Molina, 356 F.3d 269, 275 (2d Cir.2004) (same). With respect to the District Court's application of the guidelines to the facts, we are to give "due deference" to the district court. 18 U.S.C. § 3742(e). As we explained in United States v. Burgos, 324 F.3d 88 (2d Cir.2003), however, "cases in this Circuit are not wholly consistent in expressing how much deference is `due' the district court's determination when reviewing the imposition of an aggravating role adjustment. Some apply a clear error standard; others review the adjustment de novo." Id. at 91 (collecting cases); cf. United States v. Birkin, 366 F.3d 95, 101 (2d Cir.2004) (applying abuse of discretion standard except "[w]here a sentencing court's application of the Sentencing Guidelines ... approaches a purely legal question" in which case de novo review is appropriate); United States v. Si Lu Tian, 339 F.3d 143, 156 (2d Cir.2003) (holding that whether the district court's factual findings "support an enhancement under section 3B1.1(a) ... represents a legal question, which we review de novo"). We need not resolve the apparent inconsistency in our precedents, however, because we would reach the same result irrespective of the standard applied.

Huerta has conceded that there were five or more participants in the conspiracy. As such, the District Court's task was merely to determine the role he played with respect to those other participants. After considering the parties' arguments, the District Court concluded that none of the three people who made integral contributions to the conspiracy could "be considered more important than the others" because while co-conspirator Ara Miranda bore principal responsibility for collecting the blood samples (from individuals who were not actually Medicare beneficiaries), co-conspirator Jose Hernandez contributed the fraudulent physician and patient information, and "Huerta had the blood testing and billing capabilities to complete the scheme." The District Court explained that it could not "find ... any convincing evidence [that] the defendant was responsible for organizing these others for the purpose of carrying out the scheme." The court went on to say that "[t]he fact that the defendant was the head of the company is also not relevant" because "[i]t's role in the offense conduct that is relevant."

There are two immediate problems with the District Court's analysis. First, the fact that others in the conspiracy also played leadership or managerial roles is "not dispositive" of whether Huerta played such a role. Si Lu Tian, 339 F.3d at 158; see also U.S.S.G. § 3B1.1, cmt. n. 4 ("There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy.").

Second, the District Court seems to have been inappropriately dismissive of the significance of Huerta's role as the president of Liberty, the company through which the integral final step of the Medicare fraud was accomplished. In United States v. Duncan, 42 F.3d 97 (2d Cir.1994), we held that a leadership role enhancement was warranted because the defendant was the president of a real estate development corporation that was "the primary vehicle" through which the corrupt payments and bribes at issue in the case were made, and it was established that the defendant "knew of and profited from [the] corruption." Id. at 106; see also United States v. Wisniewski, 121 F.3d 54, 58 (2d Cir.1997) (per curiam) (vacating and remanding for resentencing because the district court had not imposed a role enhancement; defendant was the owner of a car dealership that was the locus of operations for a major money laundering scheme and an "active participant" in the scheme); United States v. DeRiggi, 72 F.3d 7, 9 (2d Cir.1995) (per curiam) (holding that "when a business's top officer knows of corruption in the business and implicitly approves it by participating in the corruption, a four-level enhancement ... is proper"). Although we have also made it clear that such role enhancements should not be automatically imposed on business owners or executives, see Burgos, 324 F.3d at 93, there is enough evidence of Huerta's active involvement in the conspiracy at issue in this case to undercut the District Court's assertion that Huerta's role as president of Liberty was "not relevant" to the role enhancement analysis.

Our review of the District Court's decision to deny the role enhancement is further complicated by the fact that the court's factual findings — particularly as to contested issues — were limited. The District Court indicated in the judgment that it had "adopt[ed] the factual findings and guideline application in the presentence report except ... as set forth on the record on 7/15/03." Unfortunately, the record is not entirely clear about the court's ultimate determination as to, inter alia: (i) whether Huerta had knowledge of the fraudulent scheme when he hired various of his co-conspirators; (ii) whether Huerta knew all of the other participants and the extent of his direct involvement with them; (iii) whether Huerta arranged for Miranda to be paid in a manner that would conceal her involvement; and (iv) the extent of Huerta's knowledge of what specifically was transpiring in Florida at the trailer parks where Miranda collected the blood samples. The District Court also neglected to find other facts that would have further informed the role-enhancement inquiry. For example, there is no evidence of how much Huerta actually profited from the fraud relative to his...