Opinion ID: 692045
Heading Depth: 2
Heading Rank: 2

Heading: Whether the victims were unusually vulnerable under Sec. 3A1.1.

Text: 25 Appellants' second argument is that the victims were not unusually vulnerable under Sec. 3A1.1. Appellants contend that individuals who developed medical problems and could not get their claims paid are no more unusually vulnerable than other victims of health insurance fraud. In support of their argument, appellants rely again on United States v. Rowe, 999 F.2d at 17, and on United States v. Moree, 897 F.2d 1329 (5th Cir.1990). In Rowe, the court agreed that individuals who later developed medical conditions ... had more than the usual incentive to continue paying their premiums. 999 F.2d at 17. Nevertheless, the court declined to apply Sec. 3A1.1 because the thrust of the wrongdoing with which Rowe was charged was the initial fraudulent solicitations and the mismanagement or looting of the plan's assets. Id. The court reasoned that [t]he near certainty that some of the subscribers would be more enmeshed than others appears to have been a collateral aspect of the wrongdoing, and thus there was no special targeting of such victims and the added impact is incidental. Id. 26 We find the Rowe court's reasoning inconsistent with the plain meaning of Sec. 3A1.1. Section Sec. 3A1.1 states that a victim can be unusually vulnerable due to age, [or] physical or mental condition, or otherwise particularly susceptible to the criminal conduct. Here, individuals who developed medical problems and then could not get their claims paid fulfill both the unusually vulnerable physical or mental condition and the otherwise particularly susceptible criteria of Sec. 3A1.1. Several of the victims had serious physical or mental conditions that required follow-up care. These individuals realistically could not have switched insurance companies--they were at the mercy of the appellants. One victim, for instance, needed three surgeries, of which one was temporarily postponed because ALRI denied coverage and failed to pay his claims. 27 Appellants argue, however, that applying Sec. 3A1.1 in this instance would mean virtually every defendant who is convicted of a crime involving health insurance fraud would be subject to a vulnerable victim adjustment. Appellants cite Moree for the proposition that 28 the vulnerability that triggers Sec. 3A1.1 must be an unusual vulnerability which is present in only some victims of that type of crime. Otherwise, the defendant's choice of a likely victim does not show the extra measure of criminal depravity which Sec. 3A1.1 intends to more severely punish. 29 Moree, 897 F.2d at 1335. 30 We disagree with appellants' initial assumption that under our reading of Sec. 3A1.1, all defendants convicted of health insurance fraud would be subject to an upward adjustment. It is not difficult to imagine a health insurance fraud scheme in which the defendants simply took the money and ran--i.e., the defendants did not pay for the victim's medical claims, but nevertheless did not accept more premium money from the victims. In that instance, the victims of the health insurance fraud would not be unusually vulnerable victims. Here, however, the victims were unusually vulnerable and particularly susceptible once they developed medical conditions, accrued outstanding medical bills, and in some cases needed further treatment--these victims felt compelled to continue paying their premiums in order to avoid losing coverage. 31 We also disagree with the Moree court's restrictive reading of Sec. 3A1.1. The plain language of Sec. 3A1.1 does not contain a requirement that the vulnerability must be present in only some victims of that type of crime. Moreover, the commentary to Sec. 3A1.1 expressly anticipates application of Sec. 3A1.1 in instances where the defendant marketed an ineffective cancer cure. U.S.S.G. Sec. 3A1.1, comment. (n. 1). The Fifth Circuit, in a case decided after Moree, noted that nowhere in the cancer example 32 does it state that any individual victim purchasing such a cure must be unusually vulnerable beyond the fact that he has cancer and is seeking a cure. In other words, the Guidelines deem cancer patients, as a group, to be unusually vulnerable vis a vis the general public to snake oil salesmen promising cancer cures. 33 United States v. Brown, 7 F.3d 1155, 1161 n. 3 (5th Cir.1993). Here, victims who developed medical conditions and could not get their claims paid are, as a group, unusually vulnerable to appellants' continued acceptance of premiums and appellants' promises of payment. 34 Our reasoning, which rejects appellants' invitation to apply both Rowe and Moree, is consistent with United States v. Peters, 962 F.2d 1410 (9th Cir.1992). In Peters, the defendants engaged in a fraudulent fake credit card scheme in which they sent solicitations to 30,000 individuals listed on a mailing list entitled, Credit Problem Names. Id. at 1412. All 30,000 victims were deemed vulnerable victims. The court held that [t]he Peters knew or should have known that individuals with poor credit backgrounds were more likely than others to succumb to the solicitation and were particularly susceptible to the scam. Id. at 1418. Similarly here, appellants knew or should have known that individuals who developed medical problems were more likely than others to succumb to appellants' continued acceptance of their premiums and were particularly susceptible to appellants' continued promises of payment. 35 We emphasize that appellants in this case did more than just fail to pay for the victims' medical claims. Appellants continued to accept premiums from these victims, many of whom were afraid not to keep making their premium payments for fear they wouldn't be covered. It is this continual fraud perpetrated upon these victims--who became vulnerable once they developed medical conditions, had outstanding medical bills, and in some cases needed further treatment--that triggered Sec. 3A1.1. 36 AFFIRMED.