U.S.A v. Miller

• Decision Date: 12 May 2010
• Docket Number: No. 09-40438.,09-40438.
• Citation: 607 F.3d 144
• Parties: UNITED STATES of America, Plaintiff-Appellee,v.Brenda Davis MILLER, also known as Brenda Graham Davis, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

607 F.3d 144

UNITED STATES of America, Plaintiff-Appellee,v.Brenda Davis MILLER, also known as Brenda Graham Davis, Defendant-Appellant.

No. 09-40438.

United States Court of Appeals, Fifth Circuit.

May 12, 2010.

COPYRIGHT MATERIAL OMITTED

Mary Jane Harmon (argued), James Lee Turner, Asst. U.S. Atty., Houston, TX, for U.S.

Cheri Lynn Duncan (argued), (Court-Appointed), Houston, TX, for Miller.

Appeal from the United States District Court for the Southern District of Texas.

Before GARWOOD, SMITH and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

Brenda Davis Miller pled guilty to one count of conspiracy to commit health care fraud, 18 U.S.C. §§ 1347, 1349, and one count of conducting a financial transaction with criminally derived property valued at over $10,000 id. § 1957. After applying sentencing enhancements for inter alia, abuse of a position of trust and obstruction of justice, the district court sentenced Miller to ninety-seven months' imprisonment. We affirm the enhancement for abuse of a position of trust, vacate the enhancement for obstruction of justice, and remand for resentencing.

FACTS AND PROCEEDINGS

Miller was the owner of AA Better Medical Supply in Houston, Texas. She obtained licenses from Medicare and Medicaid to operate as a durable medical equipment (DME) provider, which, upon certification of medical necessity (CMN) by a licensed physician, may provide certain supplies and equipment to beneficiaries of those programs. The DME provider may then submit a reimbursement claim to Medicare or Medicaid for the provided equipment.

Miller admitted to submitting false and fraudulent claims to Medicare and Medicaid for power wheelchairs and power scooters that were either never supplied or more costly than the equipment actually supplied to beneficiaries. Her scheme was assisted by a physician, Dr. Walter Long, who provided pre-authorized CMNs that lacked patient information. Miller or her employees would complete the CMNs with names and information from Medicare and Medicaid patients, none of whom had an actual certified need for a wheelchair or scooter. Miller also admitted to fraudulently billing Medicaid for psychotherapy counseling services, despite the fact that she was not a licensed counselor.

Miller was charged by a thirty-count indictment and pled guilty to two counts: conspiracy to commit health care fraud, and conducting a financial transaction with criminally derived property valued at over $10,000. In a plea agreement, she and the government stipulated to a loss amount of $1.283 million.

In preparing the presentence report (PSR), the probation officer grouped the two offenses pursuant to U.S.S.G. § 3D1.2, and after considering the intended loss amount, calculated a base offense level of twenty-two. The probation officer also recommended the following enhancements: (1) a four-level increase under U.S.S.G. § 3B1.1(a) based on Miller's role as an organizer or leader of criminal activity; (2) a two-level increase under § 3B1.3 for abuse of a position of trust in a manner that significantly facilitated the offense; and (3) a two-level increase under § 3C1.1 for obstruction of justice. The probation officer also recommended denying a reduction for acceptance of responsibility. Miller objected to each of the PSR's recommendations.

Over Miller's objection, the district court applied all three enhancements, but granted a two-level downward adjustment for acceptance of responsibility. The total offense level of twenty-eight, in light of Miller's criminal history category of III, resulted in an advisory guidelines sentencing range of ninety-seven to 121 months. The district court sentenced Miller to ninety-seven months' imprisonment and ordered restitution in the amount of $1.18 million. ¹ It imposed no fine. Miller timely appealed the sentencing enhancements for abuse of a position of trust and obstruction of justice.

STANDARD OF REVIEW

“This court reviews de novo the district court's guidelines interpretations and reviews for clear error the district court's findings of fact.” United States v. Le, 512 F.3d 128, 134 (5th Cir.2007). “The district court's application of section 3B1.3 is a sophisticated factual determination that we review for clear error.” United States v. Burke, 431 F.3d 883, 889 (5th Cir.2005); see also United States v. Dial, 542 F.3d 1059, 1060 (5th Cir.2008) (per curiam) (resolving an intra-circuit split over the proper standard of review for § 3B1.3 enhancements). For an obstruction of justice enhancement, we likewise review the district court's factual findings for clear error. United States v. Mann, 493 F.3d 484, 498 (5th Cir.2007). “A ruling that those findings permit an obstruction-of-justice enhancement is a question of law, reviewed de novo.” United States v. Brown, 470 F.3d 1091, 1094 (5th Cir.2006). “Under the clearly erroneous standard, we will uphold a finding so long as it is plausible in light of the record as a whole.” United States v. Ekanem, 555 F.3d 172, 175 (5th Cir.2009) (quotation omitted). “However, a finding will be deemed clearly erroneous if, based on the record as a whole, we are left with the definite and firm conviction that a mistake has been committed.” Id. (quotation omitted).

DISCUSSION

Miller challenges the district court's application of the enhancements for abuse of a position of trust and obstruction of justice. We take her arguments in turn.

I. Abuse of a Position of Trust

Section 3B1.3 may be applied to increase a defendant's offense level by two “[i]f the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.” U.S.S.G. § 3B1.3. This court applies a two-part test to determine whether there has been an abuse of trust: “(1) whether the defendant occupies a position of trust and (2) whether the defendant abused her position in a manner that significantly facilitated the commission or concealment of the offense.” United States v. Kay, 513 F.3d 432, 459 (5th Cir.2007) (quotation omitted).

A. Position of Trust

Application note 1 to § 3B1.3 states that a position of trust is “characterized by professional or managerial discretion,” and that individuals in such positions “are subject to significantly less supervision than employees whose responsibilities are primarily non-discretionary in nature.” U.S.S.G. § 3B1.3 cmt. n.1.² The ability to exercise such professional or managerial discretion is the “signature characteristic” of one who holds a position of trust. United States v. Ollison, 555 F.3d 152, 166 n. 9 (5th Cir.2009). Miller argues that she did not occupy a position of trust because she was merely an ordinary vendor in an arm's length commercial relationship with the government. She contends that under the structure of the Medicare and Medicaid programs, the government's trust is placed in physicians who provide CMNs and not in DME providers. The government counters that Medicare and Medicaid place substantial trust in DME providers, as evinced by witness testimony at the sentencing hearing. It further argues that circuit precedent applying § 3B1.3 to Medicare service providers compels affirmance.

A § 3B1.3 enhancement was upheld in United States v. Iloani against a chiropractor who had conspired with his patients to submit fraudulent claims to private insurance companies for treatments that were never rendered. 143 F.3d 921, 922-23 (5th Cir.1998). We reasoned that “insurance companies usually rely on the honesty and integrity of physicians in their medical findings, diagnoses, and prescriptions for treatment or medication,” and that “insurance companies must rely on physicians' representations that the treatments for which the companies are billed were in fact performed.” Id. at 923. In United States v. Gieger, the defendants, operators of a Medicare-licensed ambulance company, defrauded the government by billing for the transport of patients who were improperly claimed to be bed-confined. 190 F.3d 661, 663 (5th Cir.1999). This court held that Iloani barred the defendants' attempt to overcome a § 3B1.3 enhancement, reasoning that “the defendants carried out their fraud by abusing a similar position of trust [to Iloani's] with medical insurers.” Id. at 665.

Miller seeks to distinguish herself from the ambulance operators in Gieger by arguing that the latter enjoyed considerable discretion, without physician oversight, to determine whether patients were ambulatory, whereas she, as a DME provider, could not provide any equipment without a CMN. We reject her argument, for two reasons. First, Miller effectively exercised the discretion that the Medicare and Medicaid programs entrust to physicians by knowingly completing CMNs for patients who had no need for the equipment provided. There was evidence that Miller obtained a set of pre-authorized, blank CMNs from Dr. Long and simply filled in patient names as they became known to her. Under the scheme she devised, Miller assumed the position of the certifying physician, and, like the Gieger defendants, she made the key decision whether a particular patient had a medical need for a wheelchair or scooter.

Second, as the owner of AA Better Medical Supply, Miller exercised substantial managerial discretion, which the guidelines recognize as an independent basis for occupying a position of trust. See U.S.S.G. § 3B1.3 cmt. n.1. The PSR indicated that Miller directed and oversaw the business operations at both her company and a related company.³ She specifically instructed an employee to complete pre-authorized CMNs with patient information, and she provided cash or gifts to individuals in exchange for patient referrals from those individuals. At the sentencing hearing, a Texas official charged with administering the Medicaid program for the State testified that the program trusted providers “to be honest in their billings” because the State lacks the resources necessary to...