Opinion ID: 4534671
Heading Depth: 2
Heading Rank: 3

Heading: Sentencing issues as to Okwilagwe

Text: Okwilagwe objected to his two-level enhancement under Section 2B1.1(b)(2)(A)(i) of the Guidelines for an offense involving 10 or more victims. The preserved objection means we review the district court’s interpretation of the Guidelines de novo and its factual findings for clear error. See United States v. Eustice, 952 F.3d 686, 690 (5th Cir. 2020). Okwilagwe argues that the only “victims” were Medicare and Medicaid, so there were not 10 or more victims for purposes of Section 2B1.1(b)(2)(A)(i), and the district court thus erred in applying this enhancement. We have 9 Case: 19-10400 Document: 00515416830 Page: 10 Date Filed: 05/14/2020 No. 19-10400 already held that “Medicare beneficiaries for whom the conspirators falsely claimed benefits were ‘victims’ under the Guidelines” because “[a]pplication Note 4(E) of U.S.S.G. § 2B1.1 defines ‘victim’ in a way that encompasses the Medicare beneficiaries because it includes ‘any individual whose means of identification was used unlawfully or without authority.’” Barson, 845 F.3d at 167. As Okwilagwe discusses, the court has not been unanimous in its conclusion. See Barson, 845 F.3d at 168–69 (Jones, J., concurring in part and dissenting in part) (disagreeing with majority as to meaning of “victim”); United States v. Ainabe, 938 F.3d 685, 694–95 (5th Cir. 2019) (Dennis, J., concurring) (disagreeing with Barson as to meaning of “victim”). We note Okwilagwe’s objection and the disagreement in our precedents, but we are bound by Barson. The district court did not err in imposing this two-level enhancement.
Okwilagwe objected to the enhancement under Section 2B1.1(b)(1)(J) of the Guidelines for an intended loss between $3.5 million and $9.5 million. We review a district court’s method of determining loss de novo. United States v. St. Junius, 739 F.3d 193, 214 (5th Cir. 2013). “[T]he amount fraudulently billed to Medicare/Medicaid is prima facie evidence of the amount of loss the defendant intended to cause.” Id. A district court reduces loss by “the fair market value of the property returned and the services rendered . . . to the victim before the offense was detected.” § 2B1.1 cmt. 3(E)(i). A district court “need only make a reasonable estimate of loss,” and given its “unique position to assess the evidence and estimate the loss” amount, its “loss determination is entitled to appropriate deference.” § 2B1.1 cmt. 3(C). Okwilagwe argues that he overcame the presumption that the amount billed to Medicare and Medicaid was the intended loss. During sentencing 10 Case: 19-10400 Document: 00515416830 Page: 11 Date Filed: 05/14/2020 No. 19-10400 though, Okwilagwe argued that he had no burden to produce evidence Elder Care had rendered legitimate services. Okwilagwe offered no evidence to show that the amount billed overstated his intent. See St. Junius, 739 F.3d at 214. Nevertheless, Okwilagwe argues that because Elder Care provided at least some appropriate medical services to patients, the district court erred by not subtracting the value of these services from its total loss calculation. He relies on a precedent in which we held a district court erred by not discounting the fair market value of dispensed medications from its loss calculation. United States v. Klein, 543 F.3d 206, 213–14 (5th Cir. 2008). In Klein, though, the defendant had overbilled and coded procedures incorrectly. Id. at 208–09. The court there recognized that no party disputed “that the patients needed those drugs and that the insurers would have had to pay for the drugs had [the defendant] merely written prescriptions.” Id. at 213. In contrast here, had Medicare and Medicaid been aware of Okwilagwe’s involvement with Elder Care, they would not have paid any of the claims because of his exclusion. Okwilagwe analogizes to another case where the district court erred by not reducing the loss calculation by the value of legitimate services. United States v. Mahmood, 820 F.3d 177 (5th Cir. 2016). “Medicare would have reimbursed [the defendant’s] hospitals $430,639 if the claims had been submitted without [the defendant’s] fraud.” Id. at 194. The court recognized that if Medicare had known of the defendant’s fraud, it “would not have paid for the services that [the defendant’s] hospitals rendered to patients,” and if that had been the case, then the defendant would have been “entitled to no such credit” for the fair market value of those services. Id. at 193–94. We have held that because Medicare only pays for treatments that meet its standards, and services rendered by unlicensed personnel do not meet those standards, Medicare receives no value from those services. United States v. Jones, 664 F.3d 966, 984 (5th Cir. 2011). Similarly, because of the exclusions, 11 Case: 19-10400 Document: 00515416830 Page: 12 Date Filed: 05/14/2020 No. 19-10400 Elder Care’s services were not legitimate because it did not meet Medicare’s and Medicaid’s standards, and they would not have paid the claims but for the fraud. So, the district court did not err in its loss calculation.
Okwilagwe also objected to the restitution amount. We review the legality of restitution awards de novo; if the award is legally permitted, we review the amount for abuse of discretion. United States v. Mann, 493 F.3d 484, 498 (5th Cir. 2007). Restitution is limited to the victim’s “actual loss directly and proximately caused by the defendant’s offense of conviction.” Mahmood, 820 F.3d at 196. For healthcare-fraud cases, actual loss does not include any amount an insurer would have paid had the defendant not committed fraud. Id. Okwilagwe argues that if he had not committed the fraud of which he was convicted, Elder Care’s patients still would have received treatment from some other Medicare/Medicaid provider, suggesting that Medicare and Medicaid would have paid the same amount even if Okwilagwe had not committed fraud. The Government responds that Okwilagwe still has produced no evidence to support his argument that his patients received legitimate care. It argues that regardless of whether medical care may have been legitimately claimed by an entity employing no excluded individuals, the correct “actual loss” analysis does not involve the question of whether Medicare and Medicaid might have paid the amount to some other healthcare provider in the absence of Okwilagwe’s fraud, but whether Medicare and Medicaid would have paid for the specific services provided by Elder Care absent Okwilagwe’s fraud. Because Medicare and Medicaid would not have paid any of the claims in the absence of Okwilagwe’s fraud (i.e., if he had not concealed the exclusions), the 12 Case: 19-10400 Document: 00515416830 Page: 13 Date Filed: 05/14/2020 No. 19-10400 Government contends that the district court’s calculation of the actual loss based on the amount actually paid was not in error. The Government’s argument convinces. Okwilagwe’s conspiracy and false statements regarding the exclusions caused Medicare and Medicaid to treat Elder Care as an eligible provider. The claims would not have been paid, though, if the fraudulent conduct had been known. The district court did not err by using the amount paid by Medicare and Medicaid, which would not have occurred without Okwilagwe’s fraud, as actual loss for restitution. See United States v. Mathew, 916 F.3d 510, 521 (5th Cir. 2019).