United States v. Armas
| Decision Date | 24 October 2017 |
| Docket Number | No. 17-10837,17-10837 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ANDY ARMAS, a.k.a. Andy Armas Nunez, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
Non-Argument Calendar
D.C. Docket No. 1:16-cr-20474-DMM-1
Appeal from the United States District Court for the Southern District of Florida
Before HULL, MARCUS and WILSON, Circuit Judges.
Andy Armas appeals his total 87-month sentence after pleading guilty to one count of conspiracy to commit health care fraud, wire fraud, and mail fraud, in violation of 18 U.S.C. § 1349; four counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of conspiracy to defraud the United States and pay health care kickbacks, in violation of 18 U.S.C. § 371. On appeal, Armas argues that: (1) the district court clearly erred when it applied a two-level role enhancement because it failed to make a factual finding that there was at least one other participant in Armas's offenses and under his control; (2) the district court clearly erred when it applied a two-level enhancement for use of sophisticated means because his conduct was not complex or especially intricate and he did not create his pharmacies for the sole purpose of committing fraud; (3) the district court plainly erred in assessing the total loss amount because it failed to grant him credit for his legitimate prescriptions billed to Medicare; and (4) he was provided ineffective assistance of counsel during the sentencing and plea phases, which rendered the sentencing hearing unfair. The government concedes that the district court clearly erred when it applied the two-level role enhancement. After careful review, we affirm in part, vacate in part and remand for re-sentencing without the role enhancement.
Challenges to the application of the Sentencing Guidelines are mixed questions of law and fact. United States v. Mandhai, 375 F.3d 1243, 1247 (11th Cir. 2004). The district court's findings of fact are reviewed for clear error while its application of the Guidelines to the facts is reviewed de novo. Id. We reviewthe district court's determination that a defendant is subject to a § 3B1.1 role enhancement for clear error. United States v. Martinez, 584 F.3d 1022, 1025 (11th Cir. 2009). The district court's decision to apply an enhancement for sophisticated means is a question of fact that we review for clear error. United States v. Robertson, 493 F.3d 1322, 1329-30 (11th Cir. 2007). A clearly erroneous factual finding occurs when we "after reviewing all of the evidence" are "left with a definite and firm conviction that a mistake has been committed." United States v. Foster, 155 F.3d 1329, 1331 (11th Cir. 1998). "Where the evidence has two possible interpretations, the district court's choice between them cannot be clearly erroneous." Id.
We review for plain error a sentencing challenge raised for the first time on appeal. United States v. Henderson, 409 F.3d 1293, 1307 (11th Cir. 2005). In addition, we consider arguments raised for the first time in an appellant's reply brief to be abandoned. United States v. Nealy, 232 F.3d 825, 830 (11th Cir. 2000).
We begin with Armas's claim -- and the government's concession -- that the district court clearly erred in applying a two-level role enhancement. A defendant receives a four-level enhancement if the district court determines that he "was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." U.S.S.G. § 3B1.1(a). A two-level enhancement applies if the defendant was otherwise an "organizer, leader, manager, or supervisor" in"any criminal activity." Id. § 3B1.1(c). To qualify for either enhancement, the defendant must be an organizer or leader of at least one other participant. Id. § 3B1.1, comment. (n.2). A participant is defined as a person who is "criminally responsible for the commission of the offense, but need not have been convicted." Id. § 3B1.1, comment. (n.1). In order to apply a two-level enhancement for a defendant's leadership role, the district court must find by a preponderance of the evidence that the criminal activity involved at least two persons, the defendant and a participant. United States v. Williams, 527 F.3d 1235, 1248-49 (11th Cir. 2008).
In Williams, we held that the evidence presented to the district court was insufficient as a matter of law to justify a two-level role enhancement under § 3B1.1, and instructed the district court on remand to re-sentence the defendant without the enhancement. Id. at 1248-49, 1252. In Martinez, we held that the district court clearly erred when it imposed a role enhancement based on disputed facts from the PSI without hearing any evidence from the government. 584 F.3d at 1026-30. We instructed the district court on remand to allow the government to present evidence that the enhancement was applicable to the defendant. Id.
Although the Guidelines are no longer mandatory, the district court is still required to consult, consider, and correctly calculate the applicable guideline range when imposing a sentence. Id. at 1025. If the district court erred when calculating the guideline range during sentencing, we may vacate the defendant's sentence andremand for re-sentencing. Id. The only time a remand is not appropriate is when we determine that the error did not impact the district court's sentence. See United States v. Keene, 470 F.3d 1347, 1348-49 (11th Cir. 2006).
When a defendant objects to a fact contained in the PSI, the government bears the burden of proving that fact by a preponderance of the evidence. Martinez, 584 F.3d at 1027. After the government presents evidence, the district court must either make an explicit factual finding or determine that no finding is necessary because the disputed fact will not be used to sentence the defendant. Id.
Here, the government concedes that the district court clearly erred when it applied a two-level role enhancement without finding that there was at least one other criminal participant in Armas's scheme and under his control. We agree. At the sentencing hearing, a special agent with Health and Human Services testified that the two pharmacies owned by Armas had been under investigation for billing services to Medicare for prescription drugs never purchased. As part of his investigation, the agent spoke with Dr. Carlos Ramirez, who revealed that he had received kickbacks from Armas for writing prescriptions for unnecessary drugs and said that patients were involved in the scheme. Thus, the government presented some evidence at the hearing that the Medicare beneficiaries and Ramirez participated in Armas's scheme. Nevertheless, the district court never made an explicit factual finding that there was another participant who wascriminally responsible and under Armas's control, only that Armas was an organizer and that he relied on his employees. Williams, 527 F.3d at 1248-49; U.S.S.G. § 3B1.1, comment. (n.2). Notably, the district court also rejected the government's argument that the Medicare beneficiaries were knowingly complicit as participants. Because the district court was required to make an explicit factual finding that there was at least one other willing participant involved in Armas's scheme and under his control in order to apply the two-level role enhancement, and because it did not do so when it applied the enhancement, it clearly erred. Williams, 527 F.3d at 1248-49; Martinez, 584 F.3d at 1025, 1027; see also U.S.S.G. § 3B1.1, comment. (n.2).
Nor can we say that this error is harmless. Not only was Armas sentenced based on an incorrect guideline range, but there is nothing to suggest that the sentence would have been the same without the two-level role enhancement. See Martinez, 584 F.3d at 1025; Keene, 470 F.3d at 1348-49. Accordingly, we are compelled to vacate and remand to the district court for re-sentencing without the two-level role enhancement. See Williams, 527 F.3d at 1248-49, 1252. On remand, the parties may raise their arguments regarding the § 3553(a) factors and Armas's alleged aggravating conduct.
We are unpersuaded, however, by Armas's remaining arguments. First, the district court did not clearly err when it applied a two-level sophisticated meansenhancement. A defendant receives a two-level enhancement if the district court determines that a fraud offense "otherwise involved sophisticated means." U.S.S.G. § 2B1.1(b)(10)(C). This is defined as "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." Id. § 2B1.1, comment. (n.9(B)). The district court is required to focus on the offense conduct as a whole when evaluating whether the defendant qualified for the enhancement, instead of the individual steps the defendant took. United States v. Moran, 778 F.3d 942, 977 (11th Cir.), cert. denied sub nom. Huarte v. United States, 136 S. Ct. 268 (2015).
We've upheld a sophisticated means enhancement where the defendants laundered proceeds while defrauding Medicare, using kickbacks and false group therapy notes. Id. We also upheld the enhancement when a defendant's company falsified test results to demonstrate that Medicare beneficiaries required oxygen tanks, and used the test results to conceal that an independent entity had not done the testing. See United States v. Bane, 720 F.3d 818, 825-27 (11th Cir. 2013).
Here, the district court did not clearly err when it applied a two-level enhancement for use of sophisticated means. Although the court noted that Armas's fraud was "typical" and "rampant" in South Florida, it also found that Armas had created billings to Medicare for fraudulent prescriptions, created false invoices to attempt to cover up the scheme from auditors, made false statements tothe auditors, and made cash withdrawals of $4,000,000 to attempt to conceal his fraud. See U.S.S.G. § 2B1.1, comment. (n.9(B)). Even if the creation of invoices and cash...
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