Court Opinion

ID: 4214095
Source: CourtListenerOpinion
Date Created: 2017-10-24 14:02:44.691915+00
Date Added: 2024-06-11T07:47:42.818908
License: Public Domain

Case: 17-10837    Date Filed: 10/24/2017   Page: 1 of 14

                                                        [DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                                 No. 17-10837
                             Non-Argument Calendar
                           ________________________

                    D.C. Docket No. 1:16-cr-20474-DMM-1

UNITED STATES OF AMERICA,

                                                                 Plaintiff-Appellee,

                                    versus

ANDY ARMAS,
a.k.a. Andy Armas Nunez,

                                                            Defendant-Appellant.

                           ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        ________________________

                               (October 24, 2017)

Before HULL, MARCUS and WILSON, Circuit Judges.

PER CURIAM:

      Andy Armas appeals his total 87-month sentence after pleading guilty to one

count of conspiracy to commit health care fraud, wire fraud, and mail fraud, in
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violation of 18 U.S.C. § 1349; four counts of mail fraud, in violation of 18 U.S.C.

§ 1341; and one count of conspiracy to defraud the United States and pay health

care kickbacks, in violation of 18 U.S.C. § 371. On appeal, Armas argues that: (1)

the district court clearly erred when it applied a two-level role enhancement

because it failed to make a factual finding that there was at least one other

participant in Armas’s offenses and under his control; (2) the district court clearly

erred when it applied a two-level enhancement for use of sophisticated means

because his conduct was not complex or especially intricate and he did not create

his pharmacies for the sole purpose of committing fraud; (3) the district court

plainly erred in assessing the total loss amount because it failed to grant him credit

for his legitimate prescriptions billed to Medicare; and (4) he was provided

ineffective assistance of counsel during the sentencing and plea phases, which

rendered the sentencing hearing unfair. The government concedes that the district

court clearly erred when it applied the two-level role enhancement. After careful

review, we affirm in part, vacate in part and remand for re-sentencing without the

role enhancement.

      Challenges to the application of the Sentencing Guidelines are mixed

questions of law and fact. United States v. Mandhai, 375 F.3d 1243, 1247 (11th

Cir. 2004). The district court’s findings of fact are reviewed for clear error while

its application of the Guidelines to the facts is reviewed de novo. Id. We review

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the district court’s determination that a defendant is subject to a § 3B1.1 role

enhancement for clear error. United States v. Martinez, 584 F.3d 1022, 1025 (11th

Cir. 2009). The district court’s decision to apply an enhancement for sophisticated

means is a question of fact that we review for clear error. United States v.

Robertson, 493 F.3d 1322, 1329-30 (11th Cir. 2007). A clearly erroneous factual

finding occurs when we “after reviewing all of the evidence” are “left with a

definite and firm conviction that a mistake has been committed.” United States v.

Foster, 155 F.3d 1329, 1331 (11th Cir. 1998). “Where the evidence has two

possible interpretations, the district court’s choice between them cannot be clearly

erroneous.” Id.

      We review for plain error a sentencing challenge raised for the first time on

appeal. United States v. Henderson, 409 F.3d 1293, 1307 (11th Cir. 2005). In

addition, we consider arguments raised for the first time in an appellant’s reply

brief to be abandoned. United States v. Nealy, 232 F.3d 825, 830 (11th Cir. 2000).

      We begin with Armas’s claim -- and the government’s concession -- that the

district court clearly erred in applying a two-level role enhancement. A defendant

receives a four-level enhancement if the district court determines that he “was an

organizer or leader of a criminal activity that involved five or more participants or

was otherwise extensive.” U.S.S.G. § 3B1.1(a). A two-level enhancement applies

if the defendant was otherwise an “organizer, leader, manager, or supervisor” in

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“any criminal activity.” Id. § 3B1.1(c). To qualify for either enhancement, the

defendant must be an organizer or leader of at least one other participant. Id. §

3B1.1, comment. (n.2). A participant is defined as a person who is “criminally

responsible for the commission of the offense, but need not have been convicted.”

Id. § 3B1.1, comment. (n.1). In order to apply a two-level enhancement for a

defendant’s leadership role, the district court must find by a preponderance of the

evidence that the criminal activity involved at least two persons, the defendant and

a participant. United States v. Williams, 527 F.3d 1235, 1248–49 (11th Cir. 2008).

      In Williams, we held that the evidence presented to the district court was

insufficient as a matter of law to justify a two-level role enhancement under §

3B1.1, and instructed the district court on remand to re-sentence the defendant

without the enhancement. Id. at 1248-49, 1252. In Martinez, we held that the

district court clearly erred when it imposed a role enhancement based on disputed

facts from the PSI without hearing any evidence from the government. 584 F.3d at

1026-30. We instructed the district court on remand to allow the government to

present evidence that the enhancement was applicable to the defendant. Id.

      Although the Guidelines are no longer mandatory, the district court is still

required to consult, consider, and correctly calculate the applicable guideline range

when imposing a sentence. Id. at 1025. If the district court erred when calculating

the guideline range during sentencing, we may vacate the defendant’s sentence and

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remand for re-sentencing. Id. The only time a remand is not appropriate is when

we determine that the error did not impact the district court’s sentence. See United

States v. Keene, 470 F.3d 1347, 1348-49 (11th Cir. 2006).

      When a defendant objects to a fact contained in the PSI, the government

bears the burden of proving that fact by a preponderance of the evidence.

Martinez, 584 F.3d at 1027. After the government presents evidence, the district

court must either make an explicit factual finding or determine that no finding is

necessary because the disputed fact will not be used to sentence the defendant. Id.

      Here, the government concedes that the district court clearly erred when it

applied a two-level role enhancement without finding that there was at least one

other criminal participant in Armas’s scheme and under his control. We agree. At

the sentencing hearing, a special agent with Health and Human Services testified

that the two pharmacies owned by Armas had been under investigation for billing

services to Medicare for prescription drugs never purchased.        As part of his

investigation, the agent spoke with Dr. Carlos Ramirez, who revealed that he had

received kickbacks from Armas for writing prescriptions for unnecessary drugs

and said that patients were involved in the scheme.         Thus, the government

presented some evidence at the hearing that the Medicare beneficiaries and

Ramirez participated in Armas’s scheme. Nevertheless, the district court never

made an explicit factual finding that there was another participant who was

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criminally responsible and under Armas’s control, only that Armas was an

organizer and that he relied on his employees. Williams, 527 F.3d at 1248-49;

U.S.S.G. § 3B1.1, comment. (n.2). Notably, the district court also rejected the

government’s argument that the Medicare beneficiaries were knowingly complicit

as participants. Because the district court was required to make an explicit factual

finding that there was at least one other willing participant involved in Armas’s

scheme and under his control in order to apply the two-level role enhancement, and

because it did not do so when it applied the enhancement, it clearly erred.

Williams, 527 F.3d at 1248-49; Martinez, 584 F.3d at 1025, 1027; see also

U.S.S.G. § 3B1.1, comment. (n.2).

      Nor can we say that this error is harmless. Not only was Armas sentenced

based on an incorrect guideline range, but there is nothing to suggest that the

sentence would have been the same without the two-level role enhancement. See

Martinez, 584 F.3d at 1025; Keene, 470 F.3d at 1348-49. Accordingly, we are

compelled to vacate and remand to the district court for re-sentencing without the

two-level role enhancement.     See Williams, 527 F.3d at 1248-49, 1252.        On

remand, the parties may raise their arguments regarding the § 3553(a) factors and

Armas’s alleged aggravating conduct.

      We are unpersuaded, however, by Armas’s remaining arguments. First, the

district court did not clearly err when it applied a two-level sophisticated means

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enhancement. A defendant receives a two-level enhancement if the district court

determines that a fraud offense “otherwise involved sophisticated means.”

U.S.S.G. § 2B1.1(b)(10)(C). This is defined as “especially complex or especially

intricate offense conduct pertaining to the execution or concealment of an offense.”

Id. § 2B1.1, comment. (n.9(B)). The district court is required to focus on the

offense conduct as a whole when evaluating whether the defendant qualified for

the enhancement, instead of the individual steps the defendant took. United States

v. Moran, 778 F.3d 942, 977 (11th Cir.), cert. denied sub nom. Huarte v. United

States, 136 S. Ct. 268 (2015).

      We’ve upheld a sophisticated means enhancement where the defendants

laundered proceeds while defrauding Medicare, using kickbacks and false group

therapy notes. Id. We also upheld the enhancement when a defendant’s company

falsified test results to demonstrate that Medicare beneficiaries required oxygen

tanks, and used the test results to conceal that an independent entity had not done

the testing. See United States v. Bane, 720 F.3d 818, 825-27 (11th Cir. 2013).

      Here, the district court did not clearly err when it applied a two-level

enhancement for use of sophisticated means.         Although the court noted that

Armas’s fraud was “typical” and “rampant” in South Florida, it also found that

Armas had created billings to Medicare for fraudulent prescriptions, created false

invoices to attempt to cover up the scheme from auditors, made false statements to

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the auditors, and made cash withdrawals of $4,000,000 to attempt to conceal his

fraud. See U.S.S.G. § 2B1.1, comment. (n.9(B)). Even if the creation of invoices

and cash withdrawals may be conducted in the ordinary course of business and

may be simple methods if examined in isolation, it was not clearly erroneous for

the court to look at the offense conduct as a whole and find that Armas used

complex and intricate means to both carry out and conceal his fraud. See Moran,

778 F.3d at 977; Foster, 155 F.3d at 1331. Further, like the defendants in Moran

and Bane, Armas used false records and kickbacks to conceal his fraud. See

Moran, 778 F.3d at 977; Bane, 720 F.3d at 825-27. Accordingly, the district court

did not clearly err when it applied the two-level enhancement for use of

sophisticated means.

      We also find no merit to Armas’s claim that the district court plainly erred in

assessing the total loss amount because it failed to grant him credit for his

legitimate prescriptions billed to Medicare. Under plain error review, we may only

grant a defendant relief when, at the time of the appeal, there is: (1) an error in the

district court’s determination; (2) the error is plain or obvious; (3) the error affects

the defendant’s substantial rights in that it was prejudicial and not harmless; and

(4) the error seriously affects the fairness, integrity, or public reputation of judicial

proceedings. United States v. Clark, 274 F.3d 1325, 1326 (11th Cir. 2001). An

error is plain if it is clearly contrary to settled law at the time of sentencing or at

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the time of appellate consideration. United States v. Shelton, 400 F.3d 1325, 1330-

31 (11th Cir. 2005). Plain means contrary to the applicable statute, rule, or on-

point precedent. See United States v. Lejarde-Rada, 319 F.3d 1288, 1291 (11th

Cir. 2003). A plain error affects substantial rights if it was prejudicial, meaning

that the error “actually did make a difference” in the defendant’s sentence.

Shelton, 400 F.3d at 1332 (quotation omitted). The defendant has the burden to

prove that there would be a “reasonable probability of a different result” without

the error. Id. (quotation omitted).

      We’ve said that an incorrect calculation of a sentencing guideline range

affects a defendant’s substantial rights. Molina-Martinez v. United States, 136 S.

Ct. 1338, 1349 (2016). Moreover, a miscalculation of a guideline range can

implicate the fairness and integrity of the sentencing proceedings. United States v.

Chisholm, 73 F.3d 304, 307–08 (11th Cir. 1996) (holding that equating crack-

cocaine and powder-cocaine was plain error that “seriously implicates the fairness

and integrity of sentencing” because of the base offense level disparity).

      When a defendant expressly consents to or affirmatively seeks a district

court’s decision, he is deemed to have invited any error the court may have made

and to have waived appellate review for plain error. United States v. Brannan, 562

F.3d 1300, 1306 (11th Cir. 2009). We’ve held that when a defendant withdraws

his objection and “fully comprehends the error the court is going to commit and

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nonetheless agrees to be bound by it,” he has invited error. United States v.

Masters, 118 F.3d 1524, 1526 (11th Cir. 1997). We’ve previously held that a

defendant invited error when he told the district court to ignore other issues at re-

sentencing and focus only on correcting the sentence that exceeded the statutory

maximum penalty, and then challenged two other sentences on appeal. See United

States v. Haynes, 764 F.3d 1304, 1307-08, 1310 (11th Cir. 2014). The invited

error doctrine is not triggered by ambiguous statements or representations. United

States v. Hayes, 762 F.3d 1300, 1310 n.6 (11th Cir. 2014).

      An 18-level enhancement applies if the district court decides that the total

loss of an offense exceeds $3,500,000, but does not exceed $9,500,000, whereas a

14-level enhancement applies if the total loss exceeds $500,000, but does not

exceed $1,500,000. U.S.S.G. § 2B1.1(b)(1)(H), (J). Loss can be calculated by

looking at certain factors, like “the scope and duration of the offense and revenues

generated by similar operations.” Id. § 2B1.1, comment. (n.3(C)). The estimation

of loss is granted substantial deference because the “sentencing judge is in a unique

position to assess the evidence and estimate the loss based upon that evidence.” Id.

The court only needs to make a “reasonable estimate of the loss.” Id.

      The loss must be reduced by “[t]he money returned, and the fair market

value of the property returned and the services rendered, by the defendant or other

persons acting jointly with the defendant, to the victim before the offense was

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detected.” Id. § 2B1.1, comment. (n.3(E)(i)). This credit accounts for the fact that

“value may be rendered even amid fraudulent conduct.”              United States v.

Campbell, 765 F.3d 1291, 1305 (11th Cir. 2014) (quotation omitted). However,

where “a defendant’s conduct was permeated with fraud, a district court does not

err by treating the amount that was transferred from the victim to the fraudulent

enterprise as the starting point for calculating the victim’s pecuniary harm.” Id.

While the government must prove the total loss amount by a preponderance of the

evidence, this does not require that the district court begin at zero or that it “sift

through years of bank records and receipts to ascertain itemized proof of every

single transaction that should be chalked up as a loss to the victim.” Id. at 1304.

“Where detailed information is not available, a detailed estimate is not required.”

United States v. Orton, 73 F.3d 331, 335 (11th Cir. 1996).

      Here, we decline to review Armas’s challenge to the loss assessment

because he invited the district court’s alleged error. See Brannan, 562 F.3d at

1306. As the record reveals, he did not object to the calculation of losses in the

PSI. Rather, he said he accepted “the amount and the guideline range that is

applicable here,” and told the district court that he would not challenge the

government’s calculation and would instead ask for a downward variance because

it was a mitigating factor that the calculation of losses was “not an exact science.”

See Masters, 118 F.3d at 1526. Armas also admitted that there was potentially an

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error in the government’s calculation of losses, but expressly elected not to

challenge it, unambiguously stating that he was “not contesting the amount” and

would not “argue to get one level down on the amount when this is a hit-and-miss

type of calculation.” See Hayes, 762 F.3d at 1310 n.6. The district court also

inquired twice if Armas would object to the amount of losses, and Armas expressly

refused to do so while acknowledging that there were potential problems and that

he would receive a heightened enhancement for the amount of loss, similar to the

defendant in Hayes who acknowledged that there were potentially other issues to

address at re-sentencing but informed the district court to ignore them. Id. at 1307-

08, 1310. In short, Armas invited any error in the calculation of the loss amount,

and we decline to review his challenge. Brannan, 562 F.3d at 1306.

      Finally, we decline to consider Armas’s claim of ineffective assistance of

counsel. Generally, we will not consider ineffective-assistance-of-counsel claims

raised on direct appeal, because these claims are more properly considered in a

motion to vacate under 28 U.S.C. § 2255. Massaro v. United States, 538 U.S. 500,

504–05 (2003). This is especially true when the district court has not considered

the claims and there has been no opportunity to develop a factual record about

counsel’s performance. United States v. Bender, 290 F.3d 1279, 1284 (11th Cir.

2002). However, if the record has been sufficiently developed, we may consider a

defendant’s ineffective assistance of counsel claims, subject to de novo review. Id.

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      Criminal defendants have a constitutional right to effective assistance of

counsel. Strickland v. Washington, 466 U.S. 668, 686 (1984). To succeed on an

ineffective-assistance-of-counsel claim, a defendant must show that (1) his

counsel’s performance was deficient, and (2) the deficient performance prejudiced

his defense. Id. at 687. Under the first prong, counsel’s performance is deficient

only if it falls below the wide range of competence demanded of attorneys in

criminal cases. Id. at 688-89. As for the prejudice prong, the defendant must show

that there is a “reasonable probability that, but for counsel’s unprofessional errors,

the result of the proceeding would have been different.” Id. at 694.

      In this case, we decline to consider Armas’s ineffective-assistance-of-

counsel claim because there is no factual record regarding counsel’s performance.

Bender, 290 F.3d at 1284. Although all of Armas’s arguments on appeal reference

his sentencing proceedings, no record has been sufficiently developed that would

allow us to determine whether Armas’s counsel acted deficiently or if his

performance was prejudicial to the outcome. Id.; see also Strickland, 466 U.S. at

687-69, 694. For example, we do not have testimony from counsel regarding why

he did or did not do the things that Armas now challenges. See Bender, 290 F.3d

at 1284. Armas’s ineffective-assistance-of-counsel claim is more properly brought

in a 28 U.S.C. § 2255 motion to vacate where a sufficient record can be developed

regarding counsel’s performance. Thus, we will not consider it on direct appeal.

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     Accordingly, we affirm in part, and vacate and remand in part to the district

court for re-sentencing without applying the two-level leadership role

enhancement.

     VACATED AND REMANDED IN PART, AFFIRMED IN PART.

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