in restitution that restitution order was illegal because under the victim witness protection act the kickbacks for which dr palooka and was convicted were not the direct no your honor the there was a plea agreement and there was a separate stipulation by the terms of the stipulation dr politiken agreed to sell her home and put four hundred twenty one thousand dollars which was the amount that the government was claiming was the proper amount of restitution in to an escrow account which was done yes at the same time the plea agreement made clear that the defense was disputing the amount of restitution and was claiming that the restitution amount was europe so the point was that there was a pool of money from which restitution could be paid if in the terms of the stipulation was finally determined that restitution was due the final determination is before this court your honor there is nothing in either the plea agreement or the stipulation  hundred twenty one thousand as being the proper amount of restitution to the contrary it makes very clear that the restitution amount was disputed nor is there anything in either of those documents giving up the right to appeal the restitution determination if it came out against the government the defendant's position which was that the restitution amount was zero the reason that the restitution amount was that the kickbacks were not the either the but for cause of the losses to medicare or medicaid or the proximate cause of those losses because the sentencing in the plea agreement required no doubt to come to agreement so then on page twenty nine twenty nine of the sentencing transcript the court said well having reviewed sentencing submissions as well as having been the presiding judge in the matters of the other fraudsters i think i have a sufficient understanding of the scheme involved here and i do view it as one of health care fraud rather than separate frauds of kickbacks which was part of a health care fraud now that finding is not appealed that was the basis of the relevant conduct determination and the amount of the form twenty one thousand being fraud was my right so far and that that determination is not appealed so my question becomes what is the what is the health care honor the as this court has made clear in cases like saying which is cited in our brief the guideline determination of law is a separate inquiry from the determination like reasonable foreseeability and the judge made a finding that she had a reason to know what was going on with respect to the billing that that is sufficient for purposes of relevant conduct but it is not findings because there is no provision for reasonable foreseeability as being a basis for payment of restitution under the w p a the losses must d right because those built those bills that was phony right roger that's the broader fraud that's argued more than once in the sentencing transcript process i believe that the government's view is that the fraud starts in june of two thousand and eleven because that's when the bills start to be misrepresented that what there was what there was discussion there was a fair amount of dispute in the district court as to whether the prescriptions themselves were is a reference to the billing fraud by state pharmacy the billing being the not not simply charging for a compound ingrown when you could have done it with a generic whatever how you know the fact that you were not truly compound ing and therefore you should have paid you should have charged for generic you should have charged for powders and it was still i would say that it was still compound ing but the bills submitted to medicare and medicaid were themselves a firm contained affirmative misrepresentations because they claimed that at least one drug used an individual dosage unit a capsule as opposed to all bulk potters which caused the bills to be substantially inflated i believe that was the health care fraud  brings me to my question for you who were in the world is the evidence the proximate cause here in terms of the rest of her stand but for cause if she hadn't written for corrections it would not let the bad guys do the phoney compound and make a lot of money but where's where's the proof that she was in on that that she was in on the billing fraud as there's no direct evidence but the circumstantial evidence was overwhelming and it's not being challenged on appeal in terms of the health care fraud the billing fraud this was health care fraud the billing fraud this was her idea she was trying to set up her own pharmacy to occur and her her idea was to make money off of the off of these creams let's hear anything we have direct evidence of but  the tell me where to read evidence that shows that she had any clue that the shaft had it was too inconvenient to break up all these capsules i'm just going to put pounders in there instead can brought this idea to minnesota from her residency in new york there there was similar fraud going on it's what put it in residency quite a while back what she knew is that there was a lot of money to be made in this compound in the scheme and she had that cut she had a clear whether it was phony company or not right she knew there was more money to be made than was being made when that wasn't phony and of proximate cause that the government proximate and there is the district court cited to one piece which is a very significant piece where dr plough can throughout this kickback scheme it is a kickback it's not a bribe it's a kickback she know something's going on that she wants a piece of and she was during this time she was she and rabbits were trying to set up their own pharmacy to get a bigger cut of that fraud she says she knew and she wrote to another pharmacist or pharmacy trying to set up a pharmacy this isn't she use all caps a huge business if you look at what she made if it was legal the kickbacks she received was more than best a would have received with  legitimate pain payments if you're going to set up your own pharmacy i think and she did go very much into this you need to at least have some idea where the profits are coming from you know if they had stopped substituting  powders for the more labor intensive breaking down of cats if they'd continued to do what they started to do you know before right you know two thousand the educated lot of money  they made would still have been greater than that on a pick no medicare wouldn't medicaid wouldn't paid anything in medicare would have paid less than forty four thousand dollars she setting up her own pharmacy knowing that the profits are huge and frankly i think that's just they were getting reimbursed they had begun making these creams with a technique during two thousand and eleven yes our early during yes yeah but before the before the substitution of the powders yes they were getting the same reimbursement from medicare and medicaid when they were doing legitimate compound were getting nothing back from medicaid and they were getting a small amount back from medicare that's why they stopped doing it that way because it and i went back to there are exactly where i let me argue i mean if you would indulge me to let me articulate the plea agreement argument i think you'll see the distinction of what proximate cause argument they're making versus the war what the plea agreement allows and what the district court found i don't know if you have the plea agreement front of you but it's page twenty three unbelievably brief page twenty three well twenty three of the of the brief  defendant's position requires the court to read into the plea agreement a limitation that's not there and to disregard a limitation that is there in in the first subsection it says the court may order her to make restitution for amount above and beyond those directly caused by the a fist sense of conviction the defendant would have are you reading from i'm sorry this is a page twenty three of my brief where there's a block quote with the language for restitution is in bold you have that your honor the toward the second half of that says the court may order her to make restitution for amounts of above and beyond those directly caused by the offense of conviction period the defendant would have you add to that  phrase that says but not for anything beyond the kickback counts that's not him the plate agreement then in the second part which carries over to page twenty four the last just pause there the only the only loss to the i guess it's the ensure the medic here sure's this being restitution is is the billing for on it's own it's a single fraud of health care fraud the kickbacks are part and parcel as the district court found of the health care fraud would have been punishable without causing restitution loss and the did the district court runs through relevant conduct in this broad health care fraud that the end says oh you'll forand twenty one when you in restitution what i found is fraud laws i can address that your honor i was in the middle of the point but i'll take what you said no this is bothered me frequently when the district courts do this but the district court did nothing wrong the question here the legal question and the district court knew it the parties briefed it this way that the legal question was different one is the amount of loss under the guidelines the second is restitution lost that was only payable for the health care fraud conspiracy it's not even available for the kickback scheme well i just take an obvious example the the the manufacture and sale of of and adulterated or misbranded or on license drug is probably going to be criminally punishable under the united states code but it's not going to cause monetary loss to specific victims you know  honor i'm not getting to complete my thought and i wish i could go back and complete the thought i was just in the midst of which which is that although those are different legal questions as to the guidelines and restitution the fact question was the same it came down to the same thing which is was the defendant involved in the health care fraud as a whole the court held that it was and that disposed of the same legal different legal question but the same fact question as to restitution and in the sentencing turns at page thirty six defense counsel basically concedes that she's arguing for a lower sentence in part because as you found restitution that nobody has to debate what the restitution amount is at that point because everyone in the district court understood that restitution turned on the same legal question as last amount palooka involved in the health care fraud now if i can go back to my interpretation of the police agreement the defense argument is that there's this it's only limited to kickbacks and there would be no restitution available why would we enter a plea agreement like that that's absurd then they also have to read out of this the last pork which says that the government needs to establish amounts as compensable under the applicable rest statutes it's comp under the health care fraud conspiracy exactly as the defendant recognized in at page twenty three of their sensing position document number fifty one as the probation office found in paragraph one of nine and as the adopted everybody in the district court i'm sorry i'm out of everyone in the district court understood that the all that the restitution was based on the health care fraud and that's the way they wrote that plea agreement the all and it's clear because there's no other interpretation of the plea agreement that's possible because it would the defendant's argument is that we'd have to get restitution based on kickback counts and under title forty two which is not possible it's not compensable under the record relevant restitution statute problem is if you if you write it is the understanding then fraud loss facts will  the actual loss of con by the judge was the entire amount restitution c c subtracted off the cost of the forty thousand dollars i'm sorry and i think i misspoke about the june early june cost i think i was wrong about that the forty thousand dollars number i had in my mind was the cost to the point of four thousand but the cost and the cost of the you know the amount that they would have paid they would have paid anyway for this forty thousand dollars and so for restitution district court subtract the forty thousand dollars off of the four hundred sixty seven and awarded four hundred twenty seven you know when you say the judge found that she was involved in the health care for as explicitly she possibly could now is there want to understand that you say it's the same determination the proximate cause you mean you think proximate cause is required for the guideline loss amount you have in order to find actual loss caused you know as as part of reasonably foreseeable yes it has to enough credit if you think that she just forgot about it you're not giving defense counsel of credit because they recognize that at page thirty six of the of the transcript once she ruled on the reasonably foreseeable  part of the health care fraud that resolved the restitution dispute as well and on the basis of those findings the district court ordered her to pay four hundred twenty one thousand in restitution that was her only government it was her own finding that is not challenged i know that there's a lot about proximate cause here but there's no challenge that the that the defendant's conduct in the health care fraud was the proximate cause of the loss it's depends on this absurd argument that will get you there couple minutes thank you your honor your honor mr cheeper was not the prosecutor in the court below and i'm afraid that he has seriously mis characterized the record below and what's not in the record the government talks at length about what everyone understood the plea agreement to mean but i negotiated this plea agreement and what everyone understood is the disagreement as to restitution is the exact same issue that is before this court namely whether the the losses attributable to the billing fraud are properly attributable to dr palooka and by way of restitution that was the reason that we reserved the right to challenge restitution paragraph three explains we agree on the numbers we disagree about what the numbers mean it was never are under huey and under the victim witness protection  act the court may not simply treat a conviction for kickbacks as if it was a conspiracy to commit health care fraud relevant conduct is a relevant consideration with agreed to what we agreed to do was eliminated the risk of non collection we agreed to put money in escrow until the issue was finally determined we did not concede that that amount was paid all we agreed here it is if it is payable and we are asking the court to make that determination and we made very clear in the plea agreement that we were disputing didn't the judge find against you when the judge found that the two schemes really were are going to treat it as if it is health care fraud well but you agree you did agree in the plea agreement the the restitution could be for matters beyond the offense of conviction because you because she pleaded guilty to a single substantive count for six hundred sixty dollar kickback which amounted to thirty three prescriptions and so the government under q e the government would be limited to read just to sion for that six hundred sixty dollars kick back we were all agreeing that that was untenable so we agreed that the court could consider all of the kickbacks all things go beyond the offense conviction it doesn't go along lee to kick back it can go beyond the offense of conviction if the court determines that the court has established such amounts as compensable under the restitution statutes which means has proven that they are directly and proximately caused our argument in the district court would have been precluded if we in fact were agreeing that the health care fraud is included in the amounts to be considered by way of restitution yet the government never raised that issue because contrary to what mr cheaper is saying everyone understood in the district court that we were disputing the effect of the health care fraud on restitution but we were agreeing that the full forty three thousand dollars in restitution in kickbacks were to be considered for purposes of restitution but this stand where you get out of the plea agreement language that the limitation was to kickbacks i agree that there is an ambiguity which had the government raised it would have been resolved in the district court and i believe that the intent of the parties would have been made clear that it's exactly what i would have raised and you're the one who's objecting to the restitution word why didn't you say to the judge this violates our agreement no one ever claimed in the district court it i'm not saying that the got that the court's decision violated the plea agreement the government was  making that court had to make any restitution based on the health care fraud violates our agreement because we agreed to limit it to the kickback not i may have misspoken your honor what i mean is the government was taking the position that the health care fraud counts for restitution we were taking the position that it didn't whoever wins depend that issue is resolved by a determination of whether the health care fraud whether the whether the well that's true that's true that's true as well your honor and that would be an alternate basis for our position then and here and in response to the court's questions about where you could find that in the record about  they made that switch and i don't believe that mr cheever gave an accurate account of the chronology but it page three in four of the appellant's brief in the fact statement there is a clear recitation of getting exactly what they were paying for the only difference was under no nts to medicare and medicaid as of june of two thousand and eleven best date pharmacies cost went down doing what they were representing exactly i thought you were saying there's no there's no showing that the kickbacks beginning to receive the kickbacks was in consideration or a part of which that's true that is our position your honor but i would go further and say that even if the court were to accept that she knew about the billing fraud and while that may be sufficient for relevant conduct it is not sufficient for restitution because restitution turns the loss which is directly and proximately caused by the offense of conviction  doesn't go further than that but that's huey that it could go beyond the offense of conviction now you're trying to say well it could only go beyond the offense of conviction as to certain other kickback offenses but i don't hear that there is an ambiguity in the plea agreement was that ambiguity is an ambiguity that because if there is an ambiguity because it's clear in the plea agreement that we are reserving the right to dispute the amount of restitution and if where agreeing that it includes the health that the restitution should include the health care fraud then there is nothing left to dispute well i thought you were disputing whether she was involved in the health care fraud that was your dispute and you lost that factual argument so then you lost the restitution we look at this restitution language is standard language that occurs in any plea agreement where a defendant pleads guilty to a single substantive count and the relevant conduct of the law is broader and this was a provision that was drafted by the government the reason that the government never raised in the district court that we had already accepted this time at the time of the sentence and yes because everybody knew that it was going to that her four hundred twenty was going to be so how do we know if you're right on the on your broader your broadening of my understanding of the proximate cause issue then her sentencing the sentencings of the other two rascals who also have been vulnerable and do we have do we have the sentencing records can we is it is it permissible to look at their don't believe that the sentencing transcript is part of the record i also don't believe this is from memory that there is any discussion of the restitution amount at their sentencing they were both cooperating defendants and i think there was an agreement as to the restitution amount so i don't think there was any ninety thousand comes the additional money comes from a second person who has read receiving kickbacks in addition to