Opinion ID: 2803227
Heading Depth: 1
Heading Rank: 1

Heading: Studley

Text: We review criminal sentences for procedural reasonableness under an abuse of discretion standard. United States v. Chu, 714 F.3d 742, 746–47 (2d Cir. 2013). “A district court commits 2 procedural error where it fails to calculate (or improperly calculates) the Sentencing Guidelines range . . . .” United States v. Robinson, 702 F.3d 22, 38 (2d Cir. 2012). “The district court’s interpretation of the Guidelines is a question of law, which we review de novo. As to the facts that support the application of a Guideline, the burden of proving such facts is on the government, the standard for proving such facts is a preponderance of the evidence, and we review the district court’s factual conclusions for clear error.” United States v. Archer, 671 F.3d 149, 161 (2d Cir. 2011) (internal citation omitted). Under the Guidelines, relevant conduct of co-conspirators may be considered by the sentencing court. See U.S.S.G. § 1B1.3(a)(1)(B). In order to hold the defendant accountable for jointly undertaken criminal activity, the district court must make two particularized findings: “1) that the acts were within the scope of the defendant’s agreement and 2) that they were foreseeable to the defendant.” United States v. Studley, 47 F.3d 569, 574 (2d Cir. 1995). In Studley we identified several factors relevant to determining the scope of the defendant’s agreement: (1) “whether the participants pool[ed] their profits and resources, or whether they work[ed] independently”; (2) “whether the defendant assisted in designing and executing the illegal scheme”; and (3) “what role the defendant agreed to play in the operation, either by an explicit agreement or implicitly by his conduct.” Id. at 575. The district court asserted a finding that Khandrius’s conduct evidenced an implicit agreement sufficiently broad to include all of the conspiracy’s activities. Relying principally on Khandrius’s awareness of the scope of the conspiracy and his interest in being paid by the clinic, the district court concluded that the entire intended loss amount, nearly $77.5 million in fraudulent Medicare billing, was properly attributable to Khandrius under the Guidelines. We disagree. The findings of the district court are insufficient to satisfy the first of the Studley prongs. For instance, the court noted that Khandrius played “a big role” in the scheme, including by posing as a doctor and failing to correct individuals who erroneously identified him as such. But to whatever extent the clinic’s fraudulent billing depended on Khandrius’s impersonation of Dr. Drivas, even important participation in one aspect of a conspiracy with awareness of others does not necessarily establish responsibility for the whole of the conspiracy’s activities. “[T]he scope of conduct for which a defendant can be held accountable under the sentencing guidelines is significantly narrower than the conduct embraced by the law of conspiracy.” United States v. Getto, 729 F.3d 221, 234 n.11 (2d Cir. 2013) (internal quotation marks omitted). In addition, the court gave undue weight to Khandrius’s knowledge of the fraud, including his awareness that a suspiciously high volume of patients passed through the clinic and that some patients received cash kickbacks. But as we have emphasized, neither “knowledge of another participant’s criminal acts,” nor “aware[ness] of the scope of the overall operation” alone is enough to deem the defendant responsible for the acts of co-conspirators. Studley, 47 F.3d at 575. Finally, the court determined that Khandrius expanded the variety of diagnostic tests he conducted in order to increase his compensation. Khandrius was not paid on a commission basis. As in Studley, there is no indication here that Khandrius’s pay “was directly tied to the activities of the other [conspirators],” id., nor that he “shared in the profits” of the overall operation, id. at 572 (emphasis added). That Khandrius was paid as a clinic employee is insufficient to establish that the entire scope of the scheme orchestrated by his employers fell within his agreement. 3 Nor does our review of the record reveal sufficient evidence to support a particularized finding that Khandrius’s agreement to participate in this conspiracy encompassed the whole of its activities. The government contends that Khandrius bore the burden to prove that the fraud loss caused by the conspiracy fell outside the scope of his agreement. We find this argument unavailing. The case cited by the government in support of its contention, United States v. Negron, 967 F.2d 68, 72 (2d Cir. 1992), stands only for the proposition that the defendant carries the burden with respect to the second Studley prong—the foreseeability of co-conspirators’ conduct—which is not at issue on this appeal. In addition, a 1992 amendment to the Guidelines, removing language from the commentary on which the Negron court relied, erodes that holding. Compare U.S.S.G. § 1B1.3, Applic. Note 1 (1991) with U.S.S.G. § 1B1.3, Applic. Note 1 (1993). Indeed, this alteration clarified that the duty to make particularized findings as to both the defendant’s agreement and the foreseeability of co-conspirators’ acts lies with the sentencing court, and we have expressly stated that the burden rests with the government to establish, by a preponderance of the evidence, the scope of the defendant’s agreement. Studley, 47 F.3d at 574, 576; see United States v. Rizzo, 349 F.3d 94, 99 (2d Cir. 2003) (noting that under Section 1B1.3 the government “[i]s required to prove” that a third party’s acts are within the scope of defendant’s agreement and reasonably foreseeable to the defendant).3 We see no reason to alter the allocation of this burden. Accordingly, we vacate Khandrius’s sentence and remand the case to the district court with instruction to sentence Khandrius without considering the acts of co-conspirators, unless the district court makes particularized findings that the scope of his agreement to undertake jointly the conspiracy’s activities was broad enough to cover the acts of individual co-conspirators and that these acts were foreseeable to him.