United States v. Sponaugle
| Docket Number | Crim. No. 19-103-LPS |
| Decision Date | 15 August 2022 |
| Citation | 621 F.Supp.3d 474 |
| Parties | UNITED STATES of America, v. Kimberly SPONAUGLE, Defendant. |
| Court | U.S. District Court — District of Delaware |
David C. Weiss, U.S. Attorney, and Carly A. Hudson and Ruth Mandelbaum, Assistant U.S. Attorneys, UNITED STATES ATTORNEY'S OFFICE FOR THE DISTRICT OF DELAWARE, Wilmington, Delaware, Attorneys for United States.
John S. Malik, LAW OFFICES OF JOHN S. MALIK, Wilmington, Delaware, Attorney for Defendant.
TABLE OF CONTENTS
I. INTRODUCTION . . . 481
II. BACKGROUND . . . 481
III. NECESSARY IMPLICATIONS OF THE JURY'S GUILTY VERDICT . . . 497
IV. OBJECTIONS TO THE PSR . . . 501
V. SENTENCING GUIDELINES COMPUTATION . . . 535
VI. CONCLUSION . . . 536
I. INTRODUCTION
The defendant, Kimberly Sponaugle ("Ms. Sponaugle," "Sponaugle," "Defendant," or "the Defendant"), was indicted by a grand jury sitting in the District of Delaware on one count of wire fraud, a violation of 18 U.S.C. § 1343. On December 15, 2021, after a seven-day trial, a jury convicted her. (See D.I. 93-99) ("Trial Tr.") Later that month, the Court met with counsel to discuss issues relating to sentencing. (See D.I. 100) After obtaining the parties' preliminary views on certain likely issues that would need to be resolved in connection with calculating the applicable United States Sentencing Guidelines ("Sentencing Guidelines," "Guidelines," "U.S.S.G.," or "SG"), and after the Court expressed concern as to whether the trial record would be sufficient to allow it to make the necessary determinations, the Court subsequently presided over four days of additional proceedings, at which both parties called witnesses to the stand to provide evidence; presented other testimony from victims of Ms. Sponaugle's crime and from individuals who could speak to her character; and provided oral argument. (See D.I. 119, 122) ( )1
On March 3, 2022, the United States Probation Office ("Probation Office" or "USPO") filed a Presentence Investigation Report ("PSR"). (D.I. 109) On April 25, 2022, the Probation Office submitted a revised PSR, which included the parties' extensive written arguments regarding the Guidelines calculations. (D.I. 115)
Having considered the now-extensive record created at trial and during the subsequent hearings relating to sentencing, as well as all written submissions made in connection with sentencing (see, e.g., D.I. 105, 106), the Court herein rules on Ms. Sponaugle's objections to the PSR and sets out the Guidelines range it will apply in connection with the forthcoming sentencing. Before doing so, the Court first provides background information, including a discussion of All About Women, PA ("AAW") and Ms. Sponaugle's role in the practice, findings on pertinent aspects of the culture of AAW, and a description of the investigation, trial, and sentencing proceedings to this point. The Court also addresses what is "necessarily implied" by the jury's verdict finding the Defendant guilty and what, therefore, the Court must accept as true for purposes of sentencing.
II. BACKGROUND2
AAW is an obstetric and gynecological healthcare practice that was founded as a partnership in 2001 by several doctors. (McCracken Trial Tr. at 404, 502)3 With the doctors focused on providing healthcare to women in the community, AAW needed someone else to handle the business aspects of the practice. (See D.I. 73 at 4; McCracken Trial Tr. at 406) Initially, the doctors had assistance from Steve McBride, then-partner Dr. McBride's father, who would write checks and help with the books. (McCracken Trial Tr. at 501-02) At some point, Tom Mazzello served as practice manager; he was terminated after two years, when Mr. McBride caught him allegedly stealing from the practice. (McCullough Trial Tr. at 685-87) After that, Mr. McBride again provided assistance, continuing to do so until Dr. McBride left AAW. (Sponaugle Trial Tr. at 1233-34, 1240)
In 2005, the partners hired Ms. Sponaugle to serve as AAW's practice manager. (See D.I. 73 at 4; McCracken Trial Tr. at 408) She was hired as an employee, not a partner, and remained a non-partner employee at all times she was with AAW. (See D.I. 73 at 4; McCracken Trial Tr. at 431) Little effort was made to define Ms. Sponaugle's duties at the time of her hiring or thereafter. (McCullough Trial Tr. at 691-92, 697-98)
In 2006, soon after the partners hired Ms. Sponaugle, AAW became a subsidiary of ChristianaCare, a regional healthcare system. (See D.I. 73 at 4; McCracken Trial Tr. at 412) As required by ChristianaCare, in this period outside accountants reviewed and audited AAW's financial practices. (McCracken Trial Tr. at 413)
In 2012, AAW separated from ChristianaCare and reverted to being a private practice. (See D.I. 73 at 4; McCracken Trial Tr. at 414) From that point on, and for the remainder of Ms. Sponaugle's tenure, there was minimal independent oversight of AAW's finances, although the doctor-partners assumed otherwise. (McCracken Trial Tr. at 415, 418, 505; McCullough Trial Tr. at 684-85)
Ms. Sponaugle's role at AAW expanded significantly over time. Her title evolved from "practice manager" to "director" and eventually "CEO" of the practice. (McCracken Trial Tr. at 410) In time, Ms. Sponaugle was responsible for managing the practice's day-to-day operations, including scheduling, finances, human resources, payroll, overseeing 65 employees, communicating with vendors, and recording and paying bills. (McCracken Trial Tr. at 410; Sponaugle Trial Tr. at 1274-76)
Prior to working at AAW, Ms. Sponaugle had earned an MBA with a specialization in healthcare management, but she had no education in or experience with bookkeeping or accounting. (Sponaugle Trial Tr. at 1224-29, 1236) She was given responsibility for AAW's accounting but received little training in QuickBooks, the program Ms. Sponaugle's predecessors had set up and used to track AAW's receipts and expenditures. (McCullough Trial Tr. at 692-94; Sponaugle Trial Tr. at 1247) Julie Morgan, an accountant, gave Sponaugle a short introduction to QuickBooks, lasting maybe "five minutes." (Sponaugle Trial Tr. at 1247) No one at the practice formally defined Ms. Sponaugle's accounting-related duties; the doctors simply assumed she had an adequate background to perform these duties. (McCullough Trial Tr. at 691-95)
As Ms. Sponaugle's role at AAW expanded, her compensation increased. When she was hired in 2005, her annual salary was $60,000. (McCracken Trial Tr. at 517) The following year, she was given a raise to $65,000. (Id.) In 2007, she received another raise to $68,000. (Id.) Her next raise came two years later, when her annual salary went up to $78,000. (Id.) Then in 2010, her salary increased yet again to $88,000. (Id.) At the same time, she also started receiving a monthly vehicle allowance of $600, the same amount the doctor-partners received. (Id. at 518)
In 2011, Ms. Sponaugle received another raise, making her salary $100,000 a year. (Id. at 517-18) She also became entitled to a quarterly bonus equal to five percent of her base salary ($5,000) each quarter, contingent on AAW's financial performance during that quarter. (Id. at 518) For a few years, Ms. Sponaugle collected these bonuses. (Id. at 522-23) Then, in or around March 2014, when she began the process of separating from and ultimately divorcing her husband, she stopped taking the quarterly cash bonuses, under circumstances - and with...
To continue reading
Request your trial