2012 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-10-2012

USA v. Ronald McFarland

Precedential or Non-Precedential: Non-Precedential

Docket No. 11-3485

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2012

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2012 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"USA v. Ronald McFarland" (2012). 2012 Decisions. Paper 1015.

http://digitalcommons.law.villanova.edu/thirdcircuit_2012/1015
NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 11-3485

_____________

UNITED STATES OF AMERICA

v.

RONALD A. MCFARLAND,

 Appellant

______________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

(D.C. Crim. No. 11-cr-00061-001)

District Judge: Honorable Yvette Kane

____________

Submitted Under Third Circuit LAR 34.1(a)

April 16, 2012

____________

Before: VANASKIE, ALDISERT and BARRY, Circuit Judges

(Opinion Filed: May 10, 2012)

____________

OPINION

____________

BARRY, Circuit Judge

Ronald McFarland (“McFarland”) appeals from the 37-month sentence imposed 

upon him after he pled guilty to embezzling over $2.4 million dollars from two cancer 

treatment centers. McFarland’s primary contention on appeal is that, in imposing the 
2

sentence, the District Court failed to consider the mitigating factors he presented, as 

required by 18 U.S.C. § 3553(a). The District Court’s sentence was neither procedurally 

nor substantively unreasonable, and we will affirm. 

I. Background

McFarland was the president and CEO of Verimed Services, Inc. (“Verimed”) and 

Medical Alliance Partners (“Medical Alliance”), companies that provided third-party 

billing services to health care providers. Specifically, Verimed and Medical Alliance 

billed health insurers for medical services, received and recorded payments, and then 

forwarded checks to the medical service providers. Rosewood Cancer Care Center 

(“Rosewood”) and Oaktree Cancer Care Center (“Oaktree”) both utilized the billing 

services of Verimed and Medical Alliance. 

Beginning in January 2007, instead of forwarding checks to Rosewood and 

Oaktree, McFarland secretly diverted checks payable to them into his Verimed and 

Medical Alliance accounts. He accomplished this through a complex scheme which

involved forging signatures of Rosewood and Oaktree officers, falsifying Verimed patient 

ledgers, and providing Rosewood and Oaktree with false accounting information. Over a 

three-year period from January 2007 until December 2009, McFarland utilized this 

scheme to embezzle more than $2.4 million from the cancer care centers. Eventually, 

after Rosewood and Oaktree began experiencing cash flow problems, the companies 

discovered McFarland’s embezzlement and alerted the Pennsylvania State Police and the 
3

Federal Bureau of Investigation.

On February 23, 2011, an information was filed charging McFarland with one 

count of theft or embezzlement in connection with healthcare under 18 U.S.C. § 669(a). 

McFarland pleaded guilty, and his guidelines sentencing range was determined to be 37 to 

46 months. At sentencing, defense counsel urged the District Court to exercise its 

discretion under § 3553(a) and impose a probationary sentence. Defense counsel argued 

a downward variance to probation was appropriate in light of McFarland’s lack of a 

“venal motive” in committing the crime, his “spirit of cooperation” during the 

investigation, and his “very low risk of recidivism” upon release. Because McFarland’s 

appeal turns on the extent to which the Court addressed these arguments prior to imposing 

its sentence, we quote at length from the Court’s sentencing remarks: 

I’ve considered all of the 3553(a) factors, as I’m required to do. I’ve 

evaluated the history and characteristics of the defendant, who stands before 

the Court, 54 years old, no prior criminal record, no substance abuse history 

and up until now a good work record. 

I pose that against the nature and the circumstances of the offense 

that bring him before the Court. As counsel has characterized it, there is a 

staggering amount of loss here. It’s huge. And it had a huge impact on the 

victims in this case. Not only was there trust violated, a gross abuse of 

trust, but there were victims to countless acts of forgery by a defendant who 

placed his own business interests ahead of theirs. This took not only a huge 

financial and legal toll on victims but an emotional toll, as well. Indeed, the 

defendant has wreaked havoc in the business affairs of people who trusted 

him the most. 

I do not find in this case that there is a basis for departure from the 

guideline range. I think that under all of the circumstances, the guideline 

range is modest. I do not find that there is aberrant behavior. I don’t think 

aberrant behavior applies in a case where we see repeated criminal acts over 

a long period of time and certainly not in this case. Nor do I think that the 

defendant should be credited for extraordinary responsibility that would 
4

invite a downward departure.

He has cooperated, after these things came to light, and he has 

received credit for that cooperation in the guideline calculation. And I 

credit his cooperation when I consider where in the guideline range his 

sentence should fall. 

I do believe that a guideline range sentence is necessary to justly 

punish, adequately deter, reflect the seriousness of the defendant’s conduct 

and to promote respect for the law. I also believe that a sentence in the 

guideline range is necessary to protect the public. Counsel has argued that 

there is little likelihood of recidivism here. I think that remains to be seen.

What we have seen so far is a very complicated scheme of forgeries 

and embezzlement over a long period of time. So I can’t really say that 

there is no likelihood of recidivism in this case.

The District Court then imposed a bottom-of-the-guidelines sentence of 37 months 

followed by a two-year term of supervised release, and ordered that McFarland make 

restitution in the amount of $2,463,922.16. In pronouncing its sentence, the Court 

reiterated that it had “considered all seven factors set forth in the statute” under § 3553(a) 

and that “the sentence imposed is sufficient but not greater than necessary to comply with 

the purposes set forth in 18 U.S.C. § 3553(a)(2).” McFarland filed a timely notice of 

appeal. 

II. Discussion1

Our review of a criminal sentence “proceeds in two stages.” United States v. 

Merced, 603 F.3d 203, 214 (3d Cir. 2010) (citing Gall v. United States, 552 U.S. 38, 46 

(2007)). First, we examine whether the sentencing court committed a “significant 

procedural error,” such as improperly calculating the guidelines range, treating the 

 

1

The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. On appeal, we have 

jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). 
5

guidelines as mandatory, or, most relevant to this case, failing to consider the § 3553(a) 

factors. Gall, 552 U.S. at 51. Second, assuming the sentencing was procedurally sound, 

we “then consider the substantive reasonableness of the sentence imposed.” Id. We 

review a criminal sentence for both procedural fairness and substantive reasonableness 

under a deferential abuse of discretion standard. United States v. Levinson, 543 F.3d 190, 

195 (3d Cir. 2008). “[T]he party challenging the sentence has the burden of 

demonstrating unreasonableness.” United States v. Tomko, 562 F.3d 558, 567 (3d Cir. 

2009) (en banc).2

A. Procedural Reasonableness

Before pronouncing sentence, a district court is required to give “meaningful 

consideration” to the factors set forth in § 3553(a). United States v. Ausburn, 502 F.3d 

313, 329 (3d Cir. 2007). We have acknowledged that “we can articulate no uniform 

threshold” for this requirement “because of the fact-bound nature of each sentencing 

decision.” Tomko, 562 F.3d at 567. That said, the touchstone of the inquiry is whether 

the sentencing court “set forth enough to satisfy the appellate court that he has considered 

 

2 Although McFarland characterizes his appeal as a substantive unreasonableness 

challenge, the failure to consider mitigating factors under § 3553(a) is a procedural error. 

Ultimately, however, it does not matter whether McFarland’s appeal is framed as a 

substantive or procedural challenge, as our task is to “review a sentence for 

reasonableness, evaluating both its procedural and substantive underpinnings.” United 

States v. Lessner, 498 F.3d 185, 203 (3d Cir. 2007); see also Levinson, 543 F.3d at 195 

(“Our responsibility on appellate review of a criminal sentence is limited yet important: 

we are to ensure that a substantively reasonable sentence has been imposed in a 

procedurally fair way.”). 
6

the parties’ arguments and has a reasoned basis for exercising his own legal 

decisionmaking authority.” Rita v. United States, 551 U.S. 338, 356 (2007). Although a 

simple “rote statement of the § 3553(a) factors” is insufficient to meet this standard, 

United States v. Sevilla, 541 F.3d 226, 232 (3d Cir. 2008), a district court “need not make 

findings as to each factor if the record otherwise makes clear that the court took the 

factors into account.” Lessner, 498 F.3d at 203. “Nor must the court consider arguments 

that clearly lack merit.” Id.

At sentencing, the District Court twice stated that it had considered all of the 

factors set forth under 18 U.S.C. § 3553(a). Because, however, a “mere recitation” or 

“rote statement” of the § 3553 factors, standing alone, would be insufficient, we must 

examine the record to see whether or not the Court considered at least those arguments 

for a variance on which McFarland primarily relied. 

McFarland first asserts that the District Court ignored his argument that he 

committed his crime not “out of greed or the desire to live a lavish lifestyle, but in an 

effort to save his sinking businesses.” McFarland is wrong. In discussing the severity of 

the crime, the Court pointedly described McFarland as “a defendant who placed his own 

business interests ahead of [his victims’].” This statement indicates both that the Court 

understood McFarland’s position that his crime was motivated by business interests and 

that it was decidedly unmoved by the argument.3 

 

3

It is not surprising that the District Court was dismissive of this argument, as the notion 

that McFarland’s so-called “business motive” is fundamentally different from a “greed 
7

McFarland next argues that the District Court failed to appreciate that he “has 

already suffered collateral punishment in this case through the loss of his business and 

professional reputation and depletion of his resources.” In essence, this argument posits 

that because he has already been punished extra-judicially, “just punishment for the 

offense” under § 3553(a)(2) can be achieved with a lighter judicial sentence. The Court 

clearly considered the question of “just punishment” in imposing its sentence, and 

concluded that “a guideline range sentence is necessary to justly punish . . . the 

defendant’s conduct.” Indeed, the Court reiterated this conclusion later in the proceeding 

when it stated that “the sentence imposed is sufficient but not greater than necessary to 

comply with the purposes set forth in 18 U.S.C. § 3553(a)(2).”4 

McFarland also argues that the District Court ignored his argument that a 

 

motive” is, at best, questionable. After all, as the president and CEO of the businesses he 

was propping up with stolen monies, McFarland undoubtedly realized personal pecuniary 

gain from his criminal activities. Indeed, McFarland admits that even as his businesses 

foundered, he continued to pay himself a six-figure salary year after year using funds 

stolen from the cancer treatment centers. 

4 Additionally, a strong case can be made that McFarland’s “collateral punishment” 

argument is the type of frivolous, non-colorable argument that a district court need not 

even consider during sentencing. See Lessner, 498 F.3d at 203 (“Nor must the court 

consider arguments that clearly lack merit.”). First, if mere reputational damage due to a 

criminal conviction constituted grounds for a variance, then presumably every criminal 

defendant could argue for a lighter sentence on that basis. Second, the two cases cited by 

McFarland in an attempt to support this argument actually undercut his position. In 

United States v. Vigil, the court rejected the defendant’s argument for a variance on the 

basis of collateral punishment. 476 F. Supp. 2d 1231, 1315 (D.N.M. 2007). And United 

States v. Gaind, 829 F. Supp. 669 (S.D.N.Y. 1993), has been correctly characterized as 

“far too broad” and “not the law of this circuit.” See United States v. Gallagher, 1998 

U.S. Dist. LEXIS 38, at *10 (E.D. Pa. Jan. 6, 1998). 
8

probationary sentence would allow him to work towards paying off over $2.4 million in 

restitution. McFarland is correct that “the need to provide restitution to any victims of the 

offense” is a factor that should be considered under § 3553(a)(7). Once again, though, 

the record makes clear that the Court did consider the issue of restitution in crafting its 

sentence. Specifically, the Court provided:

During the term of imprisonment, restitution is payable every three months 

in an amount . . . equal to 50 percent of the funds deposited into the 

defendant’s inmate trust fund account. In the event that restitution is not 

paid in full prior to the commencement of supervised release, the defendant 

shall, as a condition of supervised release, satisfy the amount due in 

monthly installments of no less than $200 . . . . 

Finally, McFarland argues that the District Court failed to consider that he 

demonstrated “great remorse” and “fully accepted the responsibility for his actions.” 

Again, he is wrong. The Court recognized that McFarland accepted responsibility, but

concluded that this was not the type of “extraordinary responsibility that would invite a 

downward departure.” 

B. Substantive Reasonableness

Having found no flaw in the District Court’s sentencing procedure, we next 

consider the substantive reasonableness of the sentence. In this inquiry, “[w]e may not 

reverse the district court simply because we would have imposed a different sentence,” 

and we must affirm “[a]s long as a sentence falls within the broad range of possible 

sentences that can be considered reasonable in light of the § 3553(a) factors.” United 
9

States v. Wise, 515 F.3d 207, 218 (3d Cir. 2008). Stated differently, we must affirm 

“unless no reasonable sentencing court would have imposed the same sentence on that 

particular defendant for the reasons the district court provided.” Tomko, 562 F.3d at 568.

Although the District Court’s sentence of 37 months was at the very bottom of the 

guidelines range, McFarland nonetheless contends that it is substantively unreasonable 

and that a probationary sentence is warranted instead. The record, however, provides 

ample justification for a guideline-range sentence. The Court noted the “staggering 

amount of loss here” and the “huge impact on the victims in this case”—an impact that 

was particularly painful because those harmed were the very people “who trusted 

[McFarland] most.” Additionally, the Court rejected the notion that this was “aberrant 

behavior” that warranted a variance from the guideline range, reasoning that conduct can 

hardly be deemed “aberrant” in a case involving “repeated criminal acts over a long 

period of time.” Finally, the Court reasoned that in light of “the seriousness of the 

defendant’s conduct,” a guideline range sentence was “necessary to justly punish, 

adequately deter, . . . promote respect for the law . . . [and] to protect the public.” The 

Court’s determination that a downward variance was not warranted was eminently 

reasonable. We simply cannot say that “no reasonable sentencing court would have 

imposed the same sentence.” 

IV. Conclusion

For the foregoing reasons, we will affirm the judgment of sentence.