REVISED-JULY 2, 1998

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

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No. 97-20330

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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

DAVID ILOANI,

Defendant-Appellant.

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Appeal from the United States District Court

For the Southern District of Texas

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June 11, 1998

Before GARWOOD, DAVIS, and EMILIO M. GARZA, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Following his conviction for mail fraud under 18 U.S.C.

§ 1341, Dr. David Iloani raises a number of issues on appeal. He

claims that: (1) the Government breached its plea agreement with

him; (2) the district court erred in denying a downward departure

for acceptance of responsibility; (3) the district court erred in

imposing a two-level upward adjustment for abuse of a position of

trust; (4) the district court erred in imposing a four-level

adjustment based on its determination that the loss exceeded

$20,000.00; and (5) the district court erred in denying him a

downward departure for aberrant behavior. After reviewing the
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briefs, we find that issue (3) above is the only issue that merits

discussion. We therefore consider the propriety of the district

court’s imposition of an “abuse of trust” sentencing enhancement

pursuant to § 3B1.3 of the United States Sentencing Guidelines. 

Dr. Iloani, a chiropractor, conducted a scheme in which he

conspired with patients to submit fraudulent bills to insurance

companies for treatments that were never rendered. One of the

insurance companies discovered that Dr. Iloani had submitted

fraudulent bills for Elizabeth Aboderin’s treatment, and the

insurance company notified the FBI. The FBI conducted an

investigation of Dr. Iloani’s billing practices and gathered

evidence of Dr. Iloani’s illegal conduct through cooperating coconspirators and an undercover sting operation. Dr. Iloani

ultimately pled guilty to one count of mail fraud in violation of

18 U.S.C. § 1341. He was sentenced to 27 months of imprisonment,

three years of supervised release, a $15,000.00 fine, and a $50.00

special assessment. We address only Dr. Iloani’s claim that his

sentence was improperly enhanced under § 3B1.3 of the Sentencing

Guidelines for abuse of a position of trust.

The district court assessed a two-point enhancement due to Dr.

Iloani’s abuse of a position of trust pursuant to § 3B1.3 of the

1995 Sentencing Guidelines. Section 3B1.3 states in part:

If the defendant abused a position of public or private

trust . . . in a manner that significantly facilitated

the commission or concealment of the offense, increase by

2 levels. 

U.S.S.G. § 3B1.3. An abuse of trust enhancement is appropriate if
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(1) Dr. Iloani held a position of trust, (2) that he used to

significantly facilitate the commission or concealment of the

crime. Id.; United States v. White, 972 F.2d 590, 600 (5th Cir.

1992). We review the district court’s imposition of an abuse of

trust enhancement for clear error. United States v. Fisher, 7 F.3d

69, 70 (5th Cir. 1993). In this Circuit, it is settled that a

§ 3B1.3 enhancement is appropriate for a physician who abuses the

trust of his patients. See United States v. Sidhu, 130 F.3d 644,

655-56 (5th Cir. 1997) (holding that a physician had abused his

patients’ trust and was subject to a § 3B1.3 enhancement where he

billed for services that were not performed, not performed as

billed, or performed by non-physicians). However, this Circuit has

never considered whether a physician who acts in concert with his

patients to conduct a fraudulent billing scheme may be assessed a

§ 3B1.3 enhancement for abuse of a position of trust on the basis

of the physician’s relationship with an insurance company.

The Government argues that the Appellant held a position of

trust with respect to the insurance companies, because those

companies extend privileges, as well as professional discretion and

deference, to medical professionals. The Appellant argues that

there is no such trust relationship between a chiropractor and an

insurance company and that his position did not obscure the crime.

A position of trust “is characterized by ‘substantial

discretionary judgment that is ordinarily given considerable

deference.’ The position of trust ‘must have contributed in some

substantial way to facilitating the crime and not merely have
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provided an opportunity that could as easily have been afforded to

other persons.’” United States v. Kay, 83 F.3d 98, 102 (5th Cir.),

cert. denied, 117 S. Ct. 147 (1996) (quoting U.S.S.G. § 3B1.3, at

n.1). 

Because this is a matter of first impression in this Circuit,

we look to our sister circuits for guidance. In United States v.

Rutgard, a Ninth Circuit panel concluded that the sentence of the

defendant, an opthamologist, was properly enhanced under § 3B1.3

for abuse of a position of trust where the defendant had submitted

false claims to Medicare. 116 F.3d 1270, 1293 (9th Cir. 1997).

The panel concluded that “the government as insurer depends upon

the honesty of the doctor and is easily taken advantage of if the

doctor is not honest.” Id. 

Similarly, in United States v. Adam, a Fourth Circuit panel

concluded that a § 3B1.3 enhancement for abuse of trust was

appropriately applied to an internist who conducted a scheme in

which he received illegal kickbacks in return for referring

patients to a cardiologist. 70 F.3d 776, 778, 782 (4th Cir. 1995).

The care of the referred patients was paid for in part by federal

welfare funds, in violation of 42 U.S.C. § 1320a-7b(b) (1988),

which makes it illegal for any person to knowingly solicit or

receive remuneration in return for patient referrals if payment for

such services is made in part out of federal welfare funds. Id.

at 778. The Fourth Circuit concluded that Adam’s sentence was

appropriately enhanced two levels for abuse of a position of trust

because “[t]he position that Appellant enjoyed as a physician
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making claims for welfare funds is an example of the kind of

position” contemplated by the abuse of trust provision. Id. at

782. The panel further stated that “welfare fraud is terribly

difficult to detect because physicians exercise enormous

discretion: their judgments with respect to necessary treatments

ordinarily receive great deference and it is difficult to prove

that those judgments were made for reasons other than the patients’

best interests.” Id. 

The relationship of Dr. Iloani to the private insurers in this

case is closely analogous to the relationships of the defendants to

the government as insurer in the above cases. We are persuaded by

the reasoning of the Fourth and Ninth Circuits in these cases, and

we therefore conclude that the district court did not err in

concluding that Dr. Iloani abused a position of trust with the

insurance companies in fraudulently billing such companies for

medical care. Dr. Iloani made medical findings and diagnoses of

his patients and then prescribed treatments and medications. Dr.

Iloani also falsely represented to the insurance companies that

specified treatments had been rendered. The district court was

entitled to conclude that insurance companies usually rely on the

honesty and integrity of physicians in their medical findings,

diagnoses, and prescriptions for treatment or medication.

Furthermore, the district court was entitled to conclude that

insurance companies must rely on physicians’ representations that

the treatments for which the companies are billed were in fact

performed. The district court did not err in applying the § 3B1.3
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enhancement to Dr. Iloani’s sentence.

We find Dr. Iloani’s remaining claims on appeal to be

meritless. We therefore affirm Dr. Iloani’s sentence.

AFFIRMED.