Opinion ID: 708172
Heading Depth: 3
Heading Rank: 1

Heading: Amount of Benefit as Amount of Loss

Text: 22 This court's review of the district court's application of the Guidelines' loss provision must be conducted de novo. United States v. Chatterji, 46 F.3d 1336, 1340 (4th Cir.1995); United States v. Bailey, 975 F.2d 1028, 1030 (4th Cir.1992). 23 Sentencing Guideline Sec. 2F1.1(b)(1) allows enhancement of a defendant's sentencing range according to the amount of loss suffered as a result of the defendant's conduct. Comment 8 to that provision states that the loss need not be determined with precision, and that [t]he offender's gain from committing the fraud is an alternative estimate that ordinarily will underestimate the loss. U.S.S.G. Sec. 2F1.1(b)(1), comment (8). 24 Appellant bases his argument primarily on Chatterji, in which the Fourth Circuit held that no actual, intended, or probable loss had resulted from the defendant's fraudulent submission of data to the Food and Drug Administration, and that the defendant's gain therefore could not be considered as a substitute measure of loss for purposes of applying Guideline Sec. 2F1.1. The court stated: 25 [T]he enhancement provided in Sec. 2F1.1(b)(1) ... applies when a victim has suffered economic loss. A defendant's gain may be an appropriate estimate of loss only when there is some actual, intended, or probable loss. Because we have concluded that [the defendant's] conduct occasioned no such loss, gain may not be used as an alternative basis for calculating loss. 26 Chatterji, 46 F.3d at 1342. 27 Appellant argues that no losses were suffered as a result of his conduct, and that, under Chatterji, the district court therefore erred when it used his gain as a proxy for losses. The government contends that Chatterji is not controlling here because, as Congress recognized when passing the anti-fraud measures, losses are almost always incurred when welfare fraud occurs: taxpayers must pay higher costs when kickback schemes encourage physicians to provide unnecessary services, and competition is discouraged when a doctor makes more referrals to a single, co-conspiring physician than to physicians with lower rates or better services. 28 Though it is difficult to determine precisely the amount of the added costs that have been imposed as a result of the acts of a single physician, welfare fraud, taken as a whole, surely does impose enormous, unnecessary financial burdens on the American public. When Congress passed legislation in 1977 designed to stiffen penalties for welfare fraud and to impose several fraud-discouraging requirements on various parties, the House Ways and Means Committee reported: 29 In whatever form it is found, ... fraud in these health care financing programs adversely impacts on all Americans. It cheats taxpayers who must ultimately bear the financial burden of misuse of funds in any government-sponsored program. It diverts from those most in need, the nation's elderly and poor, scarce program dollars that were intended to provide vitally needed quality health services. The wasting of program funds through fraud also further erodes the financial stability of those state and local governments whose budgets are already overextended and who must commit an ever-increasing portion of their financial resources to fulfill the obligations of their medical assistance programs. 30 H.R. 95-393, 95th Cong., 1st Sess., pt. II, at 44 (1977), reprinted in 1977 U.S.C.C.A.N. 3039, 3047. 31 Guideline Sec. 2F1.1, especially as explained in comment (8), appears designed for just such circumstances: the amount of loss caused by Appellant's conduct cannot be determined with any certainty, but the amount of Appellant's gain is an available, alternative measure of estimating that loss. Moreover, in the instant case, the amount of Appellant's gain seems like a highly appropriate measure of the loss suffered by the American taxpayers, insofar as the dollars paid to Appellant represent dollars that Mostaan apparently did not need to receive from federal funds in order to cover the costs of the care he provided. The dollars paid to Appellant, in other words, are dollars that were needlessly drained from the Medicare system. 32 We therefore find Chatterji distinguishable and affirm the district court's decision to apply the loss-enhancement provision.