Opinion ID: 786488
Heading Depth: 2
Heading Rank: 1

Heading: The Section 3B1.1 Role Enhancement

Text: 8 Under section 3B1.1(a) of the United States Sentencing Guidelines, a defendant's base offense level should be increased by four levels [i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. The guideline further provides that [i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, the offense level should be increased by three levels. U.S.S.G. § 3B1.1(b). 9 In evaluating the District Court's decision not to impose a section 3B1.1 leadership-role enhancement on Huerta, it is well established that we review its factual findings for clear error. See 18 U.S.C. § 3742(e) (The court of appeals ... shall accept the findings of fact of the district court unless they are clearly erroneous.); United States v. Molina, 356 F.3d 269, 275 (2d Cir.2004) (same). With respect to the District Court's application of the guidelines to the facts, we are to give due deference to the district court. 18 U.S.C. § 3742(e). As we explained in United States v. Burgos, 324 F.3d 88 (2d Cir.2003), however, cases in this Circuit are not wholly consistent in expressing how much deference is `due' the district court's determination when reviewing the imposition of an aggravating role adjustment. Some apply a clear error standard; others review the adjustment de novo.  Id. at 91 (collecting cases); cf. United States v. Birkin, 366 F.3d 95, 101 (2d Cir.2004) (applying abuse of discretion standard except [w]here a sentencing court's application of the Sentencing Guidelines ... approaches a purely legal question in which case de novo review is appropriate); United States v. Si Lu Tian, 339 F.3d 143, 156 (2d Cir.2003) (holding that whether the district court's factual findings support an enhancement under section 3B1.1(a) ... represents a legal question, which we review de novo ). We need not resolve the apparent inconsistency in our precedents, however, because we would reach the same result irrespective of the standard applied. 10 Huerta has conceded that there were five or more participants in the conspiracy. As such, the District Court's task was merely to determine the role he played with respect to those other participants. After considering the parties' arguments, the District Court concluded that none of the three people who made integral contributions to the conspiracy could be considered more important than the others because while co-conspirator Ara Miranda bore principal responsibility for collecting the blood samples (from individuals who were not actually Medicare beneficiaries), co-conspirator Jose Hernandez contributed the fraudulent physician and patient information, and Huerta had the blood testing and billing capabilities to complete the scheme. The District Court explained that it could not find ... any convincing evidence [that] the defendant was responsible for organizing these others for the purpose of carrying out the scheme. The court went on to say that [t]he fact that the defendant was the head of the company is also not relevant because [i]t's role in the offense conduct that is relevant. 11 There are two immediate problems with the District Court's analysis. First, the fact that others in the conspiracy also played leadership or managerial roles is not dispositive of whether Huerta played such a role. Si Lu Tian, 339 F.3d at 158; see also U.S.S.G. § 3B1.1, cmt. n. 4 (There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy.). 12 Second, the District Court seems to have been inappropriately dismissive of the significance of Huerta's role as the president of Liberty, the company through which the integral final step of the Medicare fraud was accomplished. In United States v. Duncan, 42 F.3d 97 (2d Cir.1994), we held that a leadership role enhancement was warranted because the defendant was the president of a real estate development corporation that was the primary vehicle through which the corrupt payments and bribes at issue in the case were made, and it was established that the defendant knew of and profited from [the] corruption. Id. at 106; see also United States v. Wisniewski, 121 F.3d 54, 58 (2d Cir.1997) (per curiam) (vacating and remanding for resentencing because the district court had not imposed a role enhancement; defendant was the owner of a car dealership that was the locus of operations for a major money laundering scheme and an active participant in the scheme); United States v. DeRiggi, 72 F.3d 7, 9 (2d Cir.1995) (per curiam) (holding that when a business's top officer knows of corruption in the business and implicitly approves it by participating in the corruption, a four-level enhancement ... is proper). Although we have also made it clear that such role enhancements should not be automatically imposed on business owners or executives, see Burgos, 324 F.3d at 93, there is enough evidence of Huerta's active involvement in the conspiracy at issue in this case to undercut the District Court's assertion that Huerta's role as president of Liberty was not relevant to the role enhancement analysis. 13 Our review of the District Court's decision to deny the role enhancement is further complicated by the fact that the court's factual findings — particularly as to contested issues — were limited. The District Court indicated in the judgment that it had adopt[ed] the factual findings and guideline application in the presentence report except ... as set forth on the record on 7/15/03. Unfortunately, the record is not entirely clear about the court's ultimate determination as to, inter alia: (i) whether Huerta had knowledge of the fraudulent scheme when he hired various of his co-conspirators; (ii) whether Huerta knew all of the other participants and the extent of his direct involvement with them; (iii) whether Huerta arranged for Miranda to be paid in a manner that would conceal her involvement; and (iv) the extent of Huerta's knowledge of what specifically was transpiring in Florida at the trailer parks where Miranda collected the blood samples. The District Court also neglected to find other facts that would have further informed the role-enhancement inquiry. For example, there is no evidence of how much Huerta actually profited from the fraud relative to his co-conspirators. In addition, one of the government's more serious allegations against Huerta — that he intervened to prevent one of his employees who was not a participant in the scheme from investigating allegations that Liberty was submitting false claims — was not contained in the PSR, not adopted by the District Court at the hearing, and not conceded by Huerta. 14 The government claims, however, that even considering only those facts that were actually found by the District Court, it is clear as a legal matter that Huerta should have been given the four-level leadership enhancement. Application note 4 to section 3B1.1 of the Sentencing Guidelines provides a short list of [f]actors the court should consider in evaluating a defendant's role in the offense, including: 15 the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. 16 U.S.S.G. § 3B1.1, cmt. n. 4. These factors may be useful [i]n distinguishing a leadership and organizational role from one of mere management or supervision. Id. 17 In this case, the first two factors and the final two factors weigh in favor of at least a three-level enhancement. Huerta conceded that he had hiring and firing control over various of his co-conspirators, including presumably Miranda, Pichardo, Delatorre, and Pujol. Huerta made key decisions that maximized the proceeds of the fraud, including the decision to create a customized requisition form for Miranda to use. Finally, he admitted to having overseen the final stages of an extensive fraud, including the submission of the claims to Medicare, and the payment of his co-conspirators. In light of these facts, we find that the District Court should have imposed at least a three-level role enhancement under section 3B1.1(b). 18 The current state of the record, however, leaves open important factual questions regarding the other three factors listed in application note 4, i.e., Huerta's role in planning and organizing the scheme, his role in recruiting and managing accomplices, and his share of the revenue from the conspiracy. See U.S.S.G. § 3B1.1, cmt. n. 4. As such, we remand the case to the District Court to make additional findings, including those enumerated supra at 92-93, to determine whether a four-level leadership enhancement is warranted by the facts of Huerta's case. Otherwise, the three-level enhancement provided by section 3B1.1(b) of the Sentencing Guidelines should be imposed. 19