UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 10-7579

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

BRIAN CONNER,

Defendant - Appellant.

Appeal from the United States District Court for the Eastern 

District of North Carolina, at Greenville. Louise W. Flanagan,

Chief District Judge. (4:04-cr-00027-FL-2; 4:09-cv-00096-FL)

Argued: October 25, 2011 Decided: December 5, 2011

Before TRAXLER, Chief Judge, and WILKINSON and WYNN, Circuit 

Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Milton Gordon Widenhouse, Jr., RUDOLF, WIDENHOUSE & 

FIALKO, Chapel Hill, North Carolina, for Appellant. Edward D. 

Gray, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North 

Carolina, for Appellee. ON BRIEF: George E. B. Holding, United 

States Attorney, Jennifer P. May-Parker, Assistant United States 

Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North 

Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
2

PER CURIAM:

Brian Conner appeals a district court order denying his 

motion for relief under 28 U.S.C. § 2255 based on his claim that 

he received ineffective assistance of counsel at sentencing. 

Finding no reversible error, we affirm.

I.

In 1990, Conner, a certified emergency medical technician, 

became the owner, operator, and president of Convalescent 

Transports, Inc. (“CTI”). The North Carolina corporation was in 

the business of providing ambulance and wheelchair 

transportation services for, among others, medical patients 

covered by Medicare and Medicaid. Both Medicare and Medicaid 

have explicit regulations concerning the conditions under which 

they will provide reimbursement for ambulance transportation 

services. The regulations essentially require a showing of 

medical necessity. 

Sometime after October 1991, Conner began submitting false 

claims to Medicare and Medicaid for ambulance transportation 

services that CTI rendered. Employees were told to transport 

all dialysis patients by ambulance, and employees were 

instructed to falsify the ambulance call reports to make it 

appear that transportation by ambulance was medically necessary.
3

On the basis of this conduct, Conner was charged by 

superseding indictment with 350 counts of health care fraud, 

conspiracy to commit health care fraud, and obstruction of the 

criminal investigation of health care fraud. See 18 U.S.C. 

§§ 371, 1347, 1518. The district court dismissed four counts on 

the government’s motion, and the case proceeded to trial. A 

jury found Conner guilty of all remaining counts.

After the convictions, a presentence report (“PSR”) was 

prepared. It included a recommendation for a two-level 

enhancement for abuse of a position of trust, see U.S. 

Sentencing Guidelines Manual § 3B1.3 (2005), and a loss 

determination of more than $2,500,000 but not more than 

$7,000,000, which would have resulted in an 18-level enhancement 

to the applicable base offense level, see U.S.S.G. 

§ 2B1.1(b)(1)(J). Conner objected to both of these 

enhancements.

At Conner’s sentencing hearing, the government presented 

detailed testimony concerning the loss amount. The government 

showed that CTI had received $6,822,690.54 between 1997 and 2002 

in reimbursements on 35,328 claims for non-emergency dialysis 

transports. The government determined how much of these 

payments constituted the government’s loss by sampling and 

extrapolation. In this regard, “RAT-STATS,” a computer program 

developed by the United States Health and Human Services’ Office 
4

of Inspector General, was used to perform three different steps: 

(1) determining the sample size needed to represent the data; 

(2) randomly generating the list of particular claims to review 

as part of the sample; and (3) extrapolating from the reviewed 

claims. The first two steps produced a sample of 230 of the 

claims paid to CTI for transportation of patients in connection 

with dialysis. Government agents then attempted to retrieve the 

records corresponding to these claims but were only able to find 

documentation for 165 of them. These records were, in turn, 

reviewed by a medical fraud investigator.

Treating the 65 claims with no documentation (“the missingrecords claims”) as invalid, the investigator testified that of 

the 230 claims, only 14 were justified by medical necessity, and 

the average overpayment was $188.03 per claim. Multiplying the 

per-claim average by the total number of claims (35,328) yielded 

a total overpayment of $6,642,582 for the 230 claims. Based on 

this amount, the government’s statistics expert, Suzanne Moody, 

testified that RAT-STATS indicated that, with a 90% confidence 

interval, the range of overpayment was between $6,330,298 and 

$6,954.866. Moody also testified alternatively that if the 65 

missing-records claims were treated as fully valid, the lower 

end of the overpayment range would drop to $3,738,866.

G. Christopher Kelly, who represented Conner at trial and 

at sentencing, raised several objections to the government’s 
5

loss amount, including arguments that the calculations were 

partly based on claims that were not part of the scheme and that 

the loss amount included all payments made for non-medicallynecessary services rather than only those payments that had been 

procured by fraud. Kelly also maintained that the government’s 

extrapolation methodology was not reliable and specifically 

focused on the missing-records claims. Kelly questioned Moody 

regarding how changing the overpayment amounts of only roughly 

28% of the claims (65 out of 230) could reduce the estimated 

loss amount by about 41%. Kelly later argued to the district 

court that Moody had not provided a satisfactory explanation. 

Kelly also questioned the government’s witnesses concerning 

the government’s inability to locate the documentation regarding 

the missing-records claims. Kelly subsequently asserted that 

the government had not exercised due diligence in trying to 

locate the 65 missing-records claims and that this was an 

additional reason that the government’s methodology was flawed. 

Kelly added that the government had the opportunity to do more 

sampling and make its estimates much more reliable and precise 

but had failed to do so. Kelly contended that the appropriate 

loss amount would be the amount proven by the evidence presented 

at trial, which he claimed would have been less than $30,000.

In the end, the district court accepted the reliability of 

the sampling process. However, the court also accepted Kelly’s 
6

argument that the government had failed to show that it 

exercised sufficient diligence in searching for the 

documentation related to the 65 missing-records claims or 

alternatively in reviewing substitute claims. In an effort to 

ensure that Conner was not penalized by the government’s lack of 

diligence, the court calculated the loss based on the assumption 

that the 65 missing-records claims were entirely valid. The 

district court also agreed with Kelly that trips transporting 

patients to and from hospitals were not properly included and 

thus counted such claims as valid as well. With those two 

assumptions, the court found a loss amount of $3,613,165.00, 

nearly $3 million less than the government’s proposed amount. 

Unfortunately for Conner, this quite substantial reduction still 

left him the same loss range of more than $2.5 million and not 

more than $7 million. See U.S.S.G. § 2B1.1(b)(1)(J). Thus, the 

associated 18-level enhancement and the two-level abuse-ofposition-of-trust enhancement, which the court also applied over 

Kelly’s objection, left Conner with a total offense level of 32. 

This level, in conjunction with Conner’s Criminal History 

Category of I, yielded a guideline range of 121 to 151 months’ 

imprisonment. The district court sentenced Conner at the 

highest point in that range.

We affirmed Conner’s sentence on appeal, holding, as is 

relevant here, that the government’s extrapolation provided 
7

adequate support for the district court’s loss determination. 

See United States v. Conner, 262 F. App’x 515, 518-19 & n.5 (4th 

Cir. 2008). In so doing, we specifically rejected an argument 

by Conner that the sampling process was not adequately shown to 

be random. See id. at 519 n.5.

Conner subsequently filed a motion to vacate his judgment 

or set aside his sentence pursuant to 28 U.S.C. § 2255, alleging 

that Kelly was ineffective at trial and at sentencing. As is 

relevant here, Conner alleged that Kelly was constitutionally 

ineffective at sentencing in failing to offer expert testimony 

to challenge the government’s statistical evidence and in 

failing to argue for a reduction in his loss amount for the 

value received by the government from CTI’s provision of 

services. 

In support of his motion, Conner offered evidence from two 

expert witnesses who challenged the reliability of the 

government’s loss calculation methodology on a number of bases. 

They contended that the sample size was too small, and that 

“deleting” the 65 missing-records claims called into question 

the randomness of the sample. J.A. 96. Conner’s experts also 

pointed out additional flaws in planning, sample design, conduct 

of the actual sample, data analysis, and the presentation of the 

final results. 
8

Conner also presented an affidavit and testimony from 

Joseph B. Cheshire V, an attorney who represented Conner in his 

direct appeal. Cheshire opined that Kelly should have hired an 

expert to study the government’s theory of how to calculate the 

loss and that Kelly should have tried to minimize the loss 

amount by identifying benefits that the government received from 

CTI’s provision of services. 

Additionally, Conner presented an affidavit and testimony 

from Keith A. Williams, an attorney who represented one of 

Conner’s co-defendants. As is relevant here, Williams opined 

that Kelly was constitutionally deficient in not arguing for a 

reduction in loss amount based on the value to the government of 

services CTI rendered. He also asserted that an expert “could 

have provided some assistance in preparing for and presenting” 

arguments at sentencing. J.A. 278. 

The government also presented an affidavit and testimony 

from Kelly. He noted that he “had had civil cases that dealt 

with [RAT-STATS] and that type of thing so [he] knew some of the 

issues that could occur with those.” J.A. 331. He also stated 

that he researched the validity of the use of RAT-STATS in 

federal jurisdictions. He admitted, however, that “it would 

have been helpful to have had an expert at sentencing.” J.A. 

332. He explained that Conner’s inability to pay for an expert 
9

figured in to his decision not to seek one, but he conceded that 

he did not seek court appointment of an expert. 

After considering the evidence before the court, a federal 

magistrate judge recommended denying each of Conner’s claims. 

Conner subsequently filed objections with the district court, 

but the district court overruled the objections, adopted the 

magistrate’s findings and analysis, and denied the motion to 

vacate. See Conner v. United States, Nos. 4:04-CR-27-FL-2, 

4:09-CV-96-FL, 2010 WL 4484397, at *8 (E.D.N.C. Nov. 1, 2010). 

The court also granted Conner a certificate of appealability. 

See id.

II.

Conner first argues that Kelly was ineffective in failing 

to offer expert testimony challenging the statistical and random 

sampling methodology used by the government at sentencing (“the 

expert claim”). We disagree.

In considering the denial of a § 2255 motion, we review a 

district court’s factual findings from an evidentiary hearing 

for clear error, and we review de novo mixed issues of law and 

fact, such as whether established facts demonstrate a deficient 

performance by counsel. See United States v. Roane, 378 F.3d 

382, 395 (4th Cir. 2004).
10

Claims of ineffective assistance of counsel are reviewed 

under the standards of Strickland v. Washington, 466 U.S. 668 

(1984), and its progeny. To be entitled to relief, Conner must 

demonstrate “that counsel’s performance was deficient” and that 

“the deficient performance prejudiced the defense.” Id. at 687. 

To demonstrate inadequate or deficient performance, Conner “must 

show that counsel’s representation fell below an objective 

standard of reasonableness” measured by “prevailing professional 

norms.” Id. at 688. Our application of this standard “must be 

highly deferential,” and we “must indulge a strong presumption 

that counsel’s conduct falls within the wide range of reasonable 

professional assistance.” Id. at 689. Moreover, counsel’s 

performance must not be judged with the benefit of hindsight; 

rather, we consider “counsel’s perspective at the time” of the 

representation in question. See id. To demonstrate prejudice, 

Conner “must show that there is a reasonable probability that, 

but for counsel’s unprofessional errors, the result of the 

proceeding would have been different.” Id. at 694. 

While Strickland applies in both capital and noncapital 

sentencing proceedings, see, e.g., Glover v. United States, 531 

U.S. 198, 202-04 (2001) (applying Strickland test in noncapital 

case), what constitutes deficient performance can differ 

depending on the type of proceeding. The ABA’s Criminal Justice 

Standards, which can serve as a tool for evaluating the 
11

reasonableness of counsel’s representation, see Wiggins v. 

Smith, 539 U.S. 510, 524 (2003), indicate that defense counsel 

in a noncapital sentencing proceeding should (1) promptly 

investigate the circumstances and facts relevant to sentencing, 

(2) present the court with any basis that will help achieve an 

outcome favorable to the defense, and (3) supplement or 

challenge information provided in any presentence report. See

ABA Criminal Justice Standards 4-4.1(a) and 4-8.1(b). 

In this case, to fully understand the district court’s 

findings, we also must consider the magistrate’s analysis of 

Conner’s claims. The magistrate rejected Conner’s assertion 

that Kelly’s representation at sentencing was constitutionally 

deficient and concluded that, even assuming that Kelly was 

deficient in the ways Conner alleged, Conner could not establish 

a reasonable probability he would have received a more lenient 

sentence had Kelly taken the steps Conner now says he should 

have taken. As relates to the expert claim, Conner objected to 

the magistrate’s conclusions regarding both Strickland prongs. 

Regarding the second prong, Conner maintained that if Kelly had 

been able to convince the district court that the government’s 

extrapolation was invalid, then the extrapolation “would have 

been required to be re-done” and there was “more than a 

reasonable likelihood that a different sentence would have” 

resulted. J.A. 727.
12

The district court rejected both of these arguments. 

Regarding the second prong, the court reasoned that even if 

Kelly’s presentation of expert testimony would have convinced 

the district court to require the government to take another 

sample and redo its extrapolation, Conner made no showing that 

he would have ended up with a smaller loss amount than he did 

having the court assume that the 65 missing-records claims were 

actually completely legitimate. See Conner, 2010 WL 4484397, at 

*5.

In his initial brief to us, Conner challenged the district 

court’s conclusion that Conner failed to establish that Kelly’s 

representation was rendered deficient by his decision not to 

present expert testimony challenging the government’s 

extrapolation methodology. However, he did not address the 

district court’s determination that he could not show a 

reasonable probability that redoing the government’s analysis 

would have led to a more lenient sentence. Conner addressed 

this issue for the first time in his reply brief, claiming he 

demonstrated prejudice because an expert could have shown that 

the government’s extrapolation was flawed, and thus caused the 

district court to reject it and determine the loss amount by 

considering only the trial evidence, which would have supported 

a loss finding of less than $30,000.
13

This prejudice argument is not properly before us for two 

reasons. First, inherent in Conner’s new argument is a 

contention that the district court erred in assuming that the 

government would have been allowed to “redo” its statistical 

analysis if the district court agreed with Kelly’s expert. Not 

only did Conner not make this argument to the district court, 

he affirmatively argued the opposite — that had Kelly employed 

an expert at sentencing, the government would have been required

to redo its statistical analysis. Accordingly, the argument is 

waived. See First Va. Banks, Inc. v. BP Exploration & Oil, 

Inc., 206 F.3d 404, 407 n.1 (4th Cir. 2000) (“Because neither of 

these arguments were raised below, we decline to consider them 

on appeal.”). Additionally, even had Conner raised this 

argument in the district court, he would have waived it by 

failing to raise it in his initial brief. See Cavallo v. Star 

Enter., 100 F.3d 1150, 1152 n.2 (4th Cir. 1996) (“[A]n issue 

first argued in a reply brief is not properly before a court of 

appeals.”). 

In any event, even assuming arguendo that Conner properly 

preserved a challenge to the district court’s ruling that he 

could not establish prejudice from his asserted deficiency, we 

agree with the district court that Kelly’s performance was 

constitutionally adequate.
14

As the district court noted, Kelly was quite active during 

sentencing: 

Kelly reviewed the [PSR] with [Conner], going over 

potential objections in great detail and discussing 

the calculation of loss. Kelly made a number of 

objections to the PSR on [Conner’s] behalf, and . . . 

he zealously and effectively advocated on [Conner’s] 

behalf at sentencing, particularly relating to the 

government’s statistical sampling and its proposal to 

“deny” for loss purposes sixty-five (65) claims for 

which no medical documentation existed. 

Conner

Kelly argued a number of the same points that 

[Conner’s] experts bring to the court’s attention. 

For example, Kelly argued that the government’s expert 

had not adequately explained “how the relatively minor 

change of 25 to 28% of the claims could result in an 

over 40% difference in the damage calculation.” Kelly 

argued that “[t]hat’s not the kind of precision that 

makes this study reliable.” He also noted that the 

government “had the opportunity to make [the sampling] 

more reliable by doing a larger scope” and that they 

failed to “explain the differences and irregularities 

. . . in the results.” 

, 2010 WL 4484397, at *4. As the court explained, 

Id. at *4 n.7 (citations omitted). 

Kelly was well aware that extrapolations similar to the 

government’s in this case had “been upheld numerous times in the 

federal courts.” J.A. 115. In light of that fact, it was his 

judgment “that under the facts of this case, and the time and 

financial limitations that the family placed on [him], that 

calling an expert at sentencing would [not] have been possible 

or beneficial.” J.A. 115. 
15

Based on all of these facts, we simply cannot conclude that 

Conner has rebutted the “strong presumption” that Kelly’s 

performance was constitutionally reasonable. Strickland, 466 

U.S. at 689. By vigorously exploiting the government’s lack of 

diligence in searching for the documentation for the missingrecords claims (and by challenging the relevance of claims 

relating to transportation to and from hospitals), Kelly 

obtained a loss amount for his client that was millions of 

dollars less than the government sought. Although his efforts 

did not yield a guideline range lower than the government had 

proposed, we conclude that his performance was within prevailing 

professional norms. 

For similar reasons, we do not believe that Conner was 

prejudiced by Kelly’s decision not to call an expert. Even had 

Kelly been able to use an expert to persuade the district court 

to reject the government’s methodology, it is sheer speculation 

to conclude that the ultimate result would have been a loss 

determination of less than $2,500,000. 

III.

Conner also argues that the district court erred in 

rejecting his claim that Kelly was constitutionally ineffective 

at sentencing because he did not argue that the loss amount 

should be reduced by the value of benefits that the government 
16

received by virtue of the provision of CTI’s services (“the 

benefits received claim”). See U.S.S.G. § 2B1.1 cmt. n.3(F)(ii) 

(“In a case involving government benefits (e.g., grants, loans, 

entitlement program payments), loss shall be considered to be 

not less than the value of the benefits obtained by unintended 

recipients or diverted to unintended uses, as the case may 

be.”); United States v. Dawkins, 202 F.3d 711, 715 (4th Cir. 

2000) (“[W]e advise the district court to consider loss as the 

difference between the amount of benefits [the defendant] 

actually received and the amount he would have received had he 

truthfully and accurately completed the . . . forms.”). For 

example, he maintains that even with regard to claims in which 

ambulance transportation was not medically necessary, nonemergency transport may have been necessary, and Kelly should 

have argued that Conner was entitled to a credit for the value 

of such transport.

We cannot conclude that counsel’s representation was 

constitutionally deficient. As noted, Kelly made numerous 

arguments disputing the government’s loss calculation, and he 

indeed achieved a significant victory in establishing the 

government’s lack of diligence in searching for the missingrecords documentation. As a result of his challenge to the 

quality of the government’s investigation, and his arguments as 

to how the inclusion of those claims would undercut the 
17

reliability of the government’s extrapolation, the loss amount 

was based on the assumption that the missing-records claims, 

which made up more than a quarter of the entire sample, were 

100% valid. One need not be an expert in statistics to 

recognize that that change resulted in a significant reduction 

of Kelly’s loss amount even if it was not enough to reduce his 

guideline range.

Our review of the record makes clear that even if there 

were good arguments that Kelly did not make, there were many 

good ones that he did make and indeed made effectively. See

Mickens v. Taylor, 240 F.3d 348, 363 (4th Cir. 2001) (en banc) 

(“The Sixth Amendment guarantee of counsel does not guarantee an 

ideal or perfect representation.”). Given the “highly 

deferential” standard by which we judge counsel’s performance, 

we cannot conclude that Kelly’s representation at sentencing was 

constitutionally deficient. Strickland, 466 U.S. at 689.

IV.

In sum, for the foregoing reasons, we affirm the district 

court’s order denying Conner’s § 2255 motion.

AFFIRMED