U.S. v. Sotto, No. 07-10480 (11th Cir. 5/26/2010)
| Decision Date | 26 May 2010 |
| Docket Number | No. 07-10480.,07-10480. |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. DIANA SOTTO, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Appeals from the United States District Court for the Southern District of Florida, D. C. Docket No. 06-20322-CR-CMA.
Before PRYOR and FAY, Circuit Judges, and QUIST,* District Judge.
DO NOT PUBLISH
Defendant, Diana Sotto (Sotto), appeals her convictions and sentences on three counts: (1) conspiracy to defraud the United States and to pay and receive health care kickbacks, in violation of 18 U.S.C. § 371 (Count I); (2) conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349 (Count II); and (3) conspiracy to launder money, in violation of 18 U.S.C. § 1956(h) (Count V). Soto raises ten issues on appeal. After review and oral argument, we affirm the convictions and sentences.
Sotto owned and ran All Medical Billing Solutions (All Medical), a company that provided billing services to medical providers for Medicare and other health insurances. Project New Hope, (PNH), a medical clinic, was a client of All Medical. In September 2004, Luis Manuel Fernandez (Fernandez) and his wife, Maria Julia Loriga (Loriga), assumed control of PNH in connection with a purchase of the clinic financed, in part, by Sotto. At the time of the purchase Sotto, Fernandez, and Loriga had been good friends for about five years. Sotto was instrumental in facilitating Fernandez's and Loriga's involvement with PNH. In fact, although Sotto did not manage the daily affairs of the clinic, she and her cousin, Miguel Libera, "call[ed] the shots" for the business.
PNH's business changed substantially following the sale, both with regard to Medicare billings and the patient medical conditions. Prior to the sale, PNH had billed Medicare less than $26,000 and received slightly more than $10,000, while in the two weeks or so following the sale, PNH billed Medicare more than $262,000 and received approximately $125,000. Prior to the sale, none of PNH's patients had AIDS, while after the sale all of PNH's patients were treated exclusively for AIDS.
Patients were given cash payments known as "candy," typically in the amount of $200, each time they went to the clinic, regardless of whether they received treatment. Manuel Ivan Perez recruited patients for the clinic. Beatriz Fernandez, the daughter of Fernandez and Loriga, worked as a receptionist and was in charge of getting patient signatures on blank superbills1 that she then gave to Sandra Galvez, the clinic's nurse, to fill out. Galvez always completed the superbills, indicating that the patient had received treatment, even when the patient was not treated.
After Fernandez became involved with PNH, PNH billed Medicare for treatment of 45 individuals, all of whom had AIDS. In several instances, the quantities of prescription drugs for AIDS infusion therapy in PNH's bills far exceeded the quantities PNH actually purchased. For example, PNH billed for 1,183 vials of the drug Procrit but only purchased 74 vials. Similarly, in many instances, claims that Sotto submitted to Medicare were for quantities far in excess of what was shown on the treatment sheets and superbills that Galvez filled out and, in fact, were far in excess of the amount that could possibly be administered to an individual. Moreover, some of the drugs billed as administered to the patients are infrequently used to treat AIDS.
Sotto received 5% of all Medicare receipts as payment for her billing services, but in addition, she received substantial amounts from PNH in the form of checks made payable to sham corporations that Sotto owned or helped to form. One such corporation, Falcon Transport, was set up by Francisco Falcon at the request of his stepdaughter, Scarlet Duarte, and her friend, Sotto. Falcon Transport never conducted any business, and Falcon, himself, never used the entity for any purpose, business or otherwise; yet, Falcon Transport received checks from PNH totaling $158,597. Francisco Falcon was unaware of these checks, although Sotto did give him one check from Falcon Transport for $5,000. Records that Fernandez kept of payments by PNH showed a January 5, 2005, payment to Sotto of $61,425, that corresponded by date and amount with a check that PNH had written to Falcon Transport. Scarlet Duarte, a friend of Sotto and employee of All Medical, used Falcon Transport funds for personal expenditures and on several occasions asked acquaintances to cash checks written on Falcon Transport's account.
In September 2005 PNH ceased doing business, and a new company, Outreach Medical Center (OMC), began operating a clinic in the same building where PNH was located. Sotto formed OMC and identified Beatriz Fernandez as the owner on the corporate documents. OMC essentially picked up business where PNH left off, with the same employees and same business practice of giving patients cash payments. OMC submitted $242,000 in claims to Medicare and was paid approximately $50,000.
Sotto and six other co-defendants were charged in a six-count superseding indictment with various health care fraud and money laundering offenses. Soto was charged with: (1) conspiracy to defraud the United States and to pay and receive health care kickbacks, in violation of 18 U.S.C. § 371 (Count I); (2) conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349 (Count II); and (3) conspiracy to launder money, in violation of 18 U.S.C. § 1956(h) (Count III). Prior to trial Sotto filed a motion to suppress all of the documents seized in a search of All Medical's offices on the grounds that the agents flagrantly disregarded the scope of the warrant. Following a hearing, the district court granted the motion with respect to the documents outside the scope of the warrant but denied the motion with regard to the PNH documents.
Five of the co-defendants pled guilty prior to trial, and Sotto and Sandra Galvez proceeded to trial. At the conclusion of the trial, the jury convicted Sotto and Galvez on all counts. The district court sentenced Sotto to 121 months.
Sotto then filed this timely appeal.
On appeal Sotto argues that: (1) there was insufficient evidence to support Sotto's convictions on Counts I, II, and V; (2) the district court erred in denying Sotto's motion to suppress all of the documents seized during the search of All Medical; (3) the district court erred in denying Sotto's motion to dismiss Count II as multiplicitous; (4) the district court abused its discretion when it admitted Rule 404(b) evidence of uncharged bad acts committed by Sotto, including previously uncharged conduct of money laundering for a medical clinic; (5) the district court abused its discretion by admitting prejudicial hearsay and double hearsay statements by Beatriz Fernandez regarding a conversation between her father and an unknown male; (6) the admission of hearsay statements by Beatriz Fernandez regarding statements by her father and an unknown male violated the Confrontation Clause; (7) the cumulative effect of the district court's evidentiary errors influenced the outcome of the trial; (8) the district court erred by applying U.S.S.G. § 2S1.1(a)(2) to the amount of money Sotto laundered; and (9) the district court erred by adding a two-level enhancement for sophisticated means pursuant to U.S.S.G. 2S1.1(b)(3). We review these arguments in turn.
The district court denied Sotto's Rule 29 motion for judgment of acquittal. We review the denial of a motion for judgment of acquittal de novo. See United States v. Hansen, 262 F.3d 1217, 1236 (11th Cir. 2001). "An appellate court must view the evidence in the light most favorable to the government, drawing all reasonable inferences and credibility determinations in favor of the verdict." United States v. Simpson, 228 F.3d 1294, 1299 (11th Cir. 2000) (citation omitted).
In Count I, Sotto was charged with conspiracy under 18 U.S.C. § 371 to defraud the United States and violate 42 U.S.C. § 1320(a)-7b(b)(2)(B) by paying kickbacks to Medicare patients. The elements of a conspiracy under § 371 include (1) an agreement among two or more people to achieve an unlawful objective, (2) the defendant's knowing and voluntary participation in the agreement, and (3) an overt act by a conspirator in furtherance of the agreement. See United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998). In Count II, Sotto was charged with participating in a conspiracy, in violation of 18 U.S.C. § 1349, to execute a scheme to defraud the Medicare program, which is a violation of 18 U.S.C. § 1347.
The government presented a plethora of evidence supporting Sotto's convictions. Sotto fronted half of the money to purchase PNH from its previous owner and remained part owner of PNH while she worked closely with Fernandez. Fernandez and Loriga had no medical training or experience prior to purchasing PNH but managed to bill Medicare $262,000 in their first sixteen days of operations, and $10 million in their first year, while the previous owner billed Medicare for less than $26,000 in five months of operations. Sotto furthered the fraud by inflating Medicare claims for expenses above the amounts listed on PNH's superbills. Moreover, in an undercover tape recording, Sotto told Lori Sanchez, an employee of All Medical whose husband was the corporate officer for one of Sotto's sham corporations, that PNH paid kickbacks to patients and that Sotto was behind the whole scheme.
Sotto's role did not stop at this. Sotto also set up several sham companies, including Dade County Medical Consulting, Medical Consultants of Miami, and Seapointe Investments, through which Sotto cashed checks, evidenced by the ledger found in the search of Fernandez's home. Finally, Sotto prepared false invoices to cover the money Sotto received from Unified Transport. Therefore, the...
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