United States v. Chavez

• Decision Date: 21 February 2020
• Docket Number: No. 19-5016,19-5016
• Citation: 951 F.3d 349
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ledinson CHAVEZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

951 F.3d 349

UNITED STATES of America, Plaintiff-Appellee,

v.Ledinson CHAVEZ, Defendant-Appellant.

No. 19-5016

United States Court of Appeals, Sixth Circuit.

Argued: December 5, 2019

Decided and Filed: February 21, 2020

ARGUED: R. Kenyon Meyer, DINSMORE & SHOHL, LLP, Louisville, Kentucky, for Appellant. L. Jay Gilbert, UNITED STATES ATTORNEY’S OFFICE, Louisville, Kentucky, for Appellee. ON BRIEF: R. Kenyon Meyer, DINSMORE & SHOHL, LLP, Louisville, Kentucky, for Appellant. L. Jay Gilbert, UNITED STATES ATTORNEY’S OFFICE, Louisville, Kentucky, for Appellee.

Before: ROGERS, STRANCH, and THAPAR, Circuit Judges.

THAPAR, Circuit Judge.

Four men from Miami drove to Louisville with a plan to set up chiropractic clinics. But Oskel Lezcano (who all agree was the mastermind) had another, more lucrative idea: file false claims with the patients’ insurers and get paid for treatments that never happened. The other men involved—Ledinson Chavez, Sergio Betancourt, and Yuriesky Diaz—joined in.

The plan worked (for a while). One reason for its success: aggressive marketing. The conspirators recruited and paid patients both to come to the clinics and to recruit others. Many of the patients worked at a shipyard called Jeffboat. Jeffboat (through its claim administrator, United Healthcare) paid the clinics more than $1 million for fake injections of a muscle relaxant.

Eventually, the government discovered the scheme and brought criminal charges against the four men. Chavez went to trial. He claimed that he was innocent and had no idea that Lezcano was cooking the books. But to no avail. The jury found Chavez guilty of healthcare fraud, conspiracy to commit healthcare fraud, aggravated identity theft, and conspiracy to commit money laundering for purposes of concealment.

Chavez now appeals those convictions and his 74-month sentence. He alleges a host of trial errors, which fall into three groups: (1) two challenges to the sufficiency of the evidence and a related challenge to the prosecutor’s closing argument, (2) two hearsay arguments, and (3) three objections to the jury instructions. He also raises one sentencing argument. We affirm.

I.

A.

Sufficiency of the Evidence: Aggravated Identity Theft. Chavez argues the evidence was insufficient to find him guilty of aggravated identity theft. For this challenge, we take the evidence in the light most favorable to the government and ask whether any rational trier of fact could have convicted on the count. Jackson v. Virginia , 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).

To prove aggravated identity theft, the government had to show that Chavez knowingly and without authority transferred, possessed, or used someone else’s personal identification while committing another crime enumerated in the statute (here, healthcare fraud and conspiracy). 18 U.S.C. § 1028A(a)(1). The jury found that the government carried its burden. That finding was rational based on everything the jury heard and saw.

During the conspiracy, the clinics asked United Healthcare to make them approved out-of-network providers. To that end, the clinics sent in applications with identifying documents (driver’s license, Social Security card, and chiropractic license) for the chiropractors who allegedly worked at the clinics. One application packet, submitted on behalf of a clinic called Ledic Therapy Group, included the documents of chiropractor Todd Black. But Black testified that he had never heard of Ledic Therapy Group, never worked there, and never authorized the clinic to use his information.

That’s the identity theft Chavez was charged with: knowingly using Black’s documents, without his permission, in the Ledic application. The evidence was sufficient to convict him. The Ledic packet didn’t just contain Black’s identifying documents. It also had Chavez’s driver’s license and his Social Security number. And the documents’ cover sheet purported to be signed by Chavez (with a signature that resembled the one on his driver’s license). A reasonable jury could have taken those documents at face value—particularly with no evidence to the contrary.

True, Chavez tried to exclude the Ledic documents from evidence and, after that failed, asked that the jury be told not to consider his name on the documents. But the district court admitted them in full. And when we analyze the sufficiency of the evidence, we look at all the evidence admitted. See Lockhart v. Nelson , 488 U.S. 33, 40–42, 109 S.Ct. 285, 102 L.Ed.2d 265 (1988) ; United States v. Quinn , 901 F.2d 522, 530–31 (6th Cir. 1990).

Chavez also argues that even if he submitted the documents, the evidence didn’t prove that he knew Black hadn’t authorized their use. Chavez points out that Black had done work at other Lezcano-affiliated clinics and routinely provided his documentation for administrative purposes. But there’s no reason to think anyone (Chavez included) would have understood Black’s consent for some uses to extend to all uses—including the Ledic application. Again, Black testified that he never worked at Ledic, never authorized his information to be used for Ledic’s benefit, and had never even heard of Ledic until this case.

Of course, it’s conceivable that Chavez somehow made an honest mistake about whether he had permission to use Black’s credentials. But the jury was entitled to think of that possibility (if at all) as a mere "fanciful conjecture," not a reasonable doubt. Victor v. Nebraska , 511 U.S. 1, 20, 114 S.Ct. 1239, 127 L.Ed.2d 583 (1994). Particularly since there was no evidence to support that conjecture.

B.

Sufficiency of the Evidence: Conspiracy to Commit Concealment Money Laundering. Chavez also argues that the government failed to prove he conspired to commit concealment money laundering. To prove concealment money laundering, the government had to show (1) that a person conducted a financial transaction (2) that involved the proceeds of unlawful activities, (3) that he knew involved some illegal proceeds, and (4) that he knew was "designed" (at least in part) to conceal or disguise certain facts about the proceeds. 18 U.S.C. § 1956(a)(1), (a)(1)(B)(i) ; see Cuellar v. United States , 553 U.S. 550, 563–67, 128 S.Ct. 1994, 170 L.Ed.2d 942 (2008). And to prove conspiracy, the government had to show that the defendant knowingly agreed with someone else to commit this crime. United States v. Bazazpour , 690 F.3d 796, 802 (6th Cir. 2012). The jury found the government carried its burden. Again, that finding was rational.

Why? Because for at least some clinics, the conspirators created duplicate business entities with identical names (one in Kentucky, one in Florida) and opened parallel bank accounts for those entities. The chiropractors at the clinics would have access to one set of accounts. The conspirators used the duplicate accounts to store the proceeds of their healthcare scheme and to pay themselves. The chiropractors never saw these duplicate accounts.

Chavez doesn’t argue that the government failed to prove his knowledge of these accounts or his agreement to deposit illegal proceeds in them. (In fact, he personally opened some of them.) And the jury easily could have inferred a concealment purpose behind these parallel accounts. If the chiropractors had found out how much money the clinics were moving, they might have started to ask inconvenient questions. So a rational juror could infer that the conspirators opened the accounts to conceal their fraudulent-billing scheme from the chiropractors by using bank accounts the chiropractors could not monitor.

Even so, Chavez says that it would have made no sense to conceal funds by depositing them in a bank account with his own name on it. But the jury didn’t have to find that the conspirators wanted to hide this money from the whole world . It could just find that they wanted to hide it from the chiropractors . That satisfies the statute, which (1) demands only a partial purpose of concealment; (2) covers efforts to conceal the funds’ "nature," "location," "source," "ownership," or "control"; and (3) doesn’t specify from whom the transaction must be designed to conceal those attributes. 18 U.S.C. § 1956(a)(1)(B)(i) ; see also Cuellar , 553 U.S. at 559, 128 S.Ct. 1994 (noting that "nature" refers to "the funds’ illegitimate character").

Chavez also challenges the timing of the money-laundering offense. By definition, money laundering involves the "proceeds" of illegal activity. 18 U.S.C. § 1956(a)(1). That implies that you can’t commit money laundering unless some other crime has already been committed (though not necessarily completed since it could be a continuing offense). See United States v. Santos , 553 U.S. 507, 511, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008) (plurality opinion); United States v. Kerley , 784 F.3d 327, 344–45 (6th Cir. 2015). Chavez says that depositing United Healthcare checks in the bank accounts was a necessary step in the healthcare fraud. Thus, he reasons, those funds were not "proceeds" and the deposits couldn’t constitute money laundering. The conclusion follows from the premise. But the premise is wrong.

That’s because the law Chavez was convicted under "prohibit[s] the ‘scheme to defraud,’ rather than the completed fraud." Neder v. United States , 527 U.S. 1, 25, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999) ; see 18 U.S.C. § 1347(a). Thus, the crime was committed the moment the conspirators submitted false claims for payment. Under a "scheme to defraud" statute, liability doesn’t wait to attach until after the victim falls for the ruse and cuts a check. See United States v. Turner , 465 F.3d 667, 680 (6th Cir. 2006). Much less until after the fraudster deposits that check. See Kerley , 784 F.3d at 344–45. So there’s no timing problem with Chavez’s conviction.

C.

The Government’s Closing Argument. Even if the evidence was sufficient to prove a concealment scheme distinct from the fraud scheme, Chavez argues that the government’s closing argument improperly equated the two.

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