Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-01999/USCOURTS-ca8-06-01999-0/pdf.json

Parties Involved:
Patient Transfer Service
Appellant
United States of America
Appellee

Document Text:

1

The Honorable James M. Moody, United States District Judge for the Eastern

District of Arkansas.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-1999

___________

United States of America, *

 *

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the Eastern

* District of Arkansas.

Patient Transfer Service, Inc., *

*

Defendant - Appellant. *

___________

Submitted: September 25, 2006

 Filed: October 11, 2006

___________

Before MURPHY, HANSEN, and RILEY, Circuit Judges.

___________

MURPHY, Circuit Judge.

After Patient Transfer Service, Inc. (PTS), an Arkansas corporation that

provides ambulance transport services, was convicted of filing false Medicare and

Medicaid claims and sentenced to a $1,177,786 fine, it appealed. We affirmed the

conviction but remanded for resentencing. See United States v. Patient Transfer Serv.,

Inc., 413 F.3d 734 (8th Cir. 2005). On remand the district court1 made additional

findings and imposed a fine of $500,000. PTS appeals, and we affirm.

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At the original sentencing proceeding the district court set a base fine of

$841,276 under U.S.S.G. § 8C2.4(a) and multiplied it by PTS's total culpability factor

determined under § 8C2.5. The resulting fine range was $1,177,786 to $2,355,572,

and the district court imposed a fine at the very bottom of the guideline range. It

stayed payment of the fine and ordered PTS not to dispose of its assets in the

meantime.

On the earlier appeal we found there was sufficient evidence to support the

findings on which the district court relied in calculating the guideline range, but we

vacated the sentence and remanded because the court had not made specific findings

about PTS's ability to pay the amount of the fine. It was also unclear whether PTS had

been found to be a criminal purpose organization under U.S.S.G. § 8C1.1 (fines

should divest such a defendant of all its net assets).

At resentencing the district court expressly found PTS not to be a criminal

purpose organization and then considered whether PTS had the ability to pay a fine

within the guideline range. The court indicated that it intended to rely on the

presentence report which had been prepared for the original sentencing and asked

whether PTS had additional information to offer. PTS acknowledged that it bore the

burden of persuading the court to depart beneath the guideline range, but asked the

court to "impose as small a fine as possible" based on "the financial information

compiled by the probation office." Although PTS remarked that the presentence

report had been prepared "at [a] time when certain factors, which are now relevant,

weren't taken into consideration," it offered no new evidence relating to its financial

condition and did not request any revision of the original figures. 

Based on the presentence report's financial data for PTS for the year 2002, the

district court found the market value of the company's assets to be $2,369,724. It then

deducted $871,357 in liabilities and applied discounts for depreciation and for the fact

that any sale or liquidation would take place in "less than ideal market conditions."

The court concluded that PTS had approximately $1 million in net assets and then

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examined the company's reported cash flow for 2002 in order to estimate future annual

income. After taking into account "write-down" depreciation and extraordinary legal

expenses incurred as a result of the prosecution, it estimated that future operating

expenses would be lower than those reported in 2002 and that the company's annual

net income would be approximately $200,000. After making these findings, the

district court imposed a fine of $500,000 to be paid in quarterly installments of

$25,000 over a period of five years. 

Just before concluding the resentencing and after advising PTS of its right to

appeal, the court asked whether there was "anything else ... to resolve today," and

defense counsel replied, "nothing further." PTS raised no objection at the hearing to

the district court's findings about its finances or to the nature of the fine imposed and

never suggested a specific fine amount. Furthermore, PTS does not now argue that

the district court should not have relied on the facts contained in the presentence

report. 

On its new appeal PTS complains that the district court relied on "its own

understanding of certain accounting principles" and used a questionable method of

determining the company's ability to pay and that the company does not have the

ability to pay a $500,000 fine. The government argues that the amount of the fine was

reasonable.

A defendant's financial condition must be considered in determining the amount

of a fine. 18 U.S.C. § 3572(a); see also U.S.S.G. § 8C3.3 (providing that the amount

of a fine may be reduced if an organization is unable to pay a guideline range fine).

A sentencing court must make specific factual findings on the record demonstrating

that it has considered the defendant's ability to pay the fine. United States v. Walker,

900 F.2d 1201, 1206 (8th Cir. 1990).

Because PTS did not object at sentencing to the amount of the fine imposed, the

manner in which the fine was calculated, or the court's factual findings, its sentence

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is reviewed for plain error. United States v. Johnson, 327 F.3d 758, 759 (8th Cir.

2003). Plain error exists when (1) there is error (2) which is plain and (3) affects

substantial rights, and we should only exercise our discretion to correct such error if

it seriously affects the fairness, integrity or public reputation of judicial proceedings.

See United States v. Olano, 507 U.S. 725, 732-36 (1993).

The district court committed no plain error by relying on its own understanding

of accounting principles. PTS neither expressly states what it believes was wrong

about the district court's method of calculation nor points to anything unusual about

it. It has also cited no case that supports its argument that the district court should be

reversed because of its method of calculating the amount of fine PTS is able to pay.

The district court explained in detail both the manner in which it calculated

defendant's assets, liabilities and future earning estimates, and the rationale behind

those calculations. This explanation was more than sufficient to satisfy the

requirement that a district court make specific findings showing it has considered the

defendant's ability to pay. See United States v. Aguilera, 48 F.3d 327, 329 (8th Cir.

1995) ("detailed analysis" of defendant's finances not required).

PTS submitted no new evidence to supplement the original presentence report,

and the district court carefully considered the financial information in that report in

calculating the fine it imposed on remand. PTS has shown no error in the district

court's thorough consideration of PTS's ability to pay, and we find none.

We conclude that the significantly reduced fine imposed by the district court

is reasonable and accordingly affirm its judgment.

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