Opinion ID: 78389
Heading Depth: 2
Heading Rank: 1

Heading: The District Court Erred When It Calculated the Guidelines Range.

Text: The district court committed two procedural errors when it calculated the guidelines range. First, it failed to calculate loss. Second, it erroneously reduced Gupta's offense level by two points for acceptance of responsibility. We discuss each error in turn.
The loss is the greater of actual loss or intended loss. U.S.S.G. § 2B1.1 cmt. 3(A); United States v. Manoocher Nosrati-Shamloo, 255 F.3d 1290, 1291 (11th Cir. 2001) (per curiam). Actual loss is the monetary harm that resulted from the offense and was reasonably foreseeable, U.S.S.G. § 2B1.1 cmt. 3(A)(I), (iii), and intended loss is the monetary harm that was intended to result from the offense, id. cmt. 3(A)(ii), (iii). The court need only make a reasonable estimate of the loss[,] id. cmt. 3(c) but courts must not speculate concerning the existence of a fact which would permit a more severe sentence under the guidelines. Sepulveda, 115 F.3d at 890 (internal quotation marks omitted). [A] district court must make factual findings sufficient to support the government's claim of the amount of fraud loss attributed to a defendant in a [presentence investigation report]. Gupta II, 463 F.3d at 1200. We must decide whether the district court erred by finding ... that the loss attributable to [Gupta] could be reasonably estimated without impermissible speculation at [1.5 million dollars]. Sepulveda, 115 F.3d at 890-91. The government argues that [t]he district court's calculation of loss here was the very definition of speculation. The court merely picked a figure out of thin air... that was roughly between the parties' estimates of $0 and $3.4 million. The government identifies five issues about loss that the district court failed to resolve or even to discuss: (1) whether loss should be calculated using pretax or posttax income of Allegheny; (2) whether loss should be calculated by including in the income of Allegheny fraudulent expenses that had no benefit to the Medicare program; (3) what percentage of the income of Allegheny was derived from the defendant home healthcare agencies instead of three other home healthcare agencies owned by Gupta's brother, Vijay; (4) whether loss should be calculated by including in the income of Allegheny bad debts Allegheny owed to the home healthcare agencies; and (5) whether loss should be calculated by including in the income of Allegheny $400,000 that the Montana home healthcare agency paid in response to repayment demands from the government, or whether that money should be characterized as restitution. Gupta states that there is no dispute about the correct methodology of determining whether there was a loss to Medicare and acknowledges that any `loss' to Medicare could only be the amount of the profit made by Allegheny on the services provided to the defendant Home Healthcare Agencies. Gupta does not discuss the failures of the district court that the government mentions. Gupta again relies on the finding by Foodman that Allegheny had earned no profit from the Defendant home health agencies. Gupta attacks various assumptions of the Litvak report, argues that the government failed to provide reliable and specific evidence of the amount of loss, and argues that the district court evaluat[ed] the strengths and weaknesses of both experts' theories on loss. The government replies that splitting the difference between a credible loss estimate and an incredible loss estimate is not reasonable. The government also replies that meaningful appellate review requires the appellate court to be able to reconstruct the reasoning of the district court, which is impossible when the district court simply picks a number between the parties' estimates. We agree with the government. The district court failed to calculate loss, and the district court failed to make factual findings about several key issues. Although the district court considered both Foodman's and Litvak's expert reports, the district court failed to resolve any of the five issues the government raised about how to calculate the loss. Litvak testified that Foodman had erroneously relied on figures from a federal tax audit of Allegheny that would have been different if the Internal Revenue Service had known that Allegheny was related to the home healthcare agencies, and the district court also failed to resolve this issue. [T]he district court clearly erred when it did not make specific factual findings upon which to base the loss amount[]. United States v. Medina, 485 F.3d 1291, 1304-05 (11th Cir.2007). The error of the district court is not limited to its failure to make findings about these key issues. The cursory statements of the district court suggest that the district court made no findings about anything at all. The district court stated that it just pick[ed] a figure, like any jury would, about half way in between. The district court employed an arbitrary approach. It did not make a calculation. The district court described the loss amount of 1.5 million dollars as the amount that is a reasonable estimate, I guess, that I make. There is no basis for the amount of 1.5 million dollars other than that it is about half way in between the parties' estimates. Even this basis cannot fully explain the amount: 1.5 million dollars is more than 10 percent below the halfway mark between the parties' estimates. The arbitrary decision by the district court makes a difference. The decision spared Gupta one point on his offense level: a finding of $1,500,001 in loss would have required an additional point. The decision also precluded an accurate determination of restitution, which depends on the amount of pecuniary loss. See 18 U.S.C. § 3663A(b)(1)(B) (providing that the amount of restitution depends on the amount of the loss). Because the district court identified no basis for the loss amount it found, meaningful appellate review of the amount is impossible. Without further information from the district court, we cannot determine what factual basis was used to reach the conclusion .... Medina, 485 F.3d at 1304. A remand is necessary.