Court Opinion

ID: 9911447
Source: CourtListenerOpinion
Date Created: 2023-12-19 21:01:22.377279+00
Date Added: 2024-06-11T12:58:01.230271
License: Public Domain

USCA11 Case: 22-12837    Document: 48-1      Date Filed: 12/19/2023   Page: 1 of 14

                                                    [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 22-12837
                           Non-Argument Calendar
                           ____________________

        UNITED STATES OF AMERICA,
                                                       Plaintiﬀ-Appellee,
        versus
        ARMANDO VALDES,

                                                    Defendant-Appellant.

                           ____________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                    D.C. Docket No. 1:21-cr-20590-KMW-1
                           ____________________
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        2                      Opinion of the Court                  22-12837

        Before WILSON, LUCK, and HULL, Circuit Judges.
        PER CURIAM:
               After pleading guilty, Armando Valdes appeals his 60-month
        sentence for health care fraud, in violation of 18 U.S.C. § 1347.
        Valdes’s conviction and sentence arise out of his scheme to submit
        millions of dollars in fraudulent medical claims to United
        Healthcare and Blue Cross Blue Shield for intravenous infusions of
        Infliximab, an expensive immunosuppressive drug. These
        infusions, purportedly given to patients at Valdes’s medical clinic,
        Gasiel Medical Services (“Gasiel”), were either not provided or
        were medically unnecessary.
               On appeal, Valdes argues that the district court erred by:
        (1) applying a 22-level increase in his offense level under U.S.S.G.
        § 2B1.1(b)(1) because the loss amount exceeded $25 million;
        (2) applying a two-level increase under U.S.S.G. § 2B1.1(b)(10)(C)
        for using sophisticated means; (3) applying a two-level increase
        under U.S.S.G. § 3B1.3 for abusing a position of trust or using a
        special skill; and (4) ordering the forfeiture of his primary residence
        as substitute property. After review, we affirm Valdes’s sentence.
                                I. LOSS AMOUNT
               Under U.S.S.G. § 2B1.1(b)(1), a defendant’s offense level
        increases with the amount of “loss” caused by the offense. In
        Valdes’s case, his base offense level was increased by 22 levels
        because the district court found that the loss amount was $38
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        22-12837                Opinion of the Court                          3

        million, and thus more than $25 million, as provided in
        § 2B1.1(b)(1)(L).
        A. U.S.S.G. § 2B1.1(b)(1)
                Section 2B1.1(b)(1)(L) provides that a defendant’s base
        offense level is increased by 22 levels if the loss from the fraud
        offense was more than $25 million but less than $65 million.
        U.S.S.G. § 2B1.1(b)(1)(L),(M). The commentary to § 2B1.1 defines
        loss as the greater of either the actual loss, which is the “reasonably
        foreseeable pecuniary harm that resulted,” or the intended loss,
        which is the “pecuniary harm that the defendant purposely sought
        to inflict.” Id. § 2B1.1 cmt. n.3(A)(i)-(ii). Intended loss includes
        harm “that would have been impossible or unlikely to occur.” Id.
        § 2B1.1 cmt. n.3(A)(ii). Insurance fraud, in which the claim
        exceeded the insured value, is cited as an example of impossible or
        unlikely harm. Id.
               The Guidelines do not require a precise determination of
        loss. United States v. Barrington, 648 F.3d 1178, 1197 (11th Cir. 2011).
        Instead, the district court need make only a reasonable estimate
        based on the available information. Id.; see also U.S.S.G.
        § 2B1.1 cmt. n.3(C).
               While the government has the burden to prove the loss
        amount with specific, reliable evidence, the district court may
        make its factual findings as to the loss amount based on, among
        other things, evidence presented at trial or sentencing or on the
        undisputed statements in the presentence investigation report
        (“PSI”). United States v. Moran, 778 F.3d 942, 973 (11th Cir. 2015).
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        4                          Opinion of the Court                         22-12837

        We review a district court’s loss determination for clear error.
        Barrington, 648 F.3d at 1197.
        B. Analysis
               Here, Valdes has not shown the district court’s loss amount
        of $38 million was clear error. In his factual proffer and at his plea
        hearing, Valdes admitted that through Gasiel, he submitted
        approximately $33 million in fraudulent claims to United
        Healthcare and approximately $5 million in fraudulent claims to
        Blue Cross Blue Shield. Because there is a strong presumption that
        those statements are true, United States v. Medlock, 12 F.3d 185, 187
        (11th Cir. 1994), the district court could rely on them in
        determining the loss amount.
               Valdes contends some of the $33 million submitted to
        United Healthcare was attributable to duplicate claims and
        therefore should not have been included in the intended loss
        amount. 1 Valdes also claims the intended loss amount “was the
        30% contracted payment” under United Healthcare’s pricing
        payment agreement. There are several problems with Valdes’s
        arguments.
              First, for purposes of the loss amount under § 2B1.1, the
        intended loss includes unlikely amounts of pecuniary harm, such

        1 Valdes has never disputed that the intended loss amount was the appropriate

        measure of loss in his case or argued that the definition of loss in the Guidelines
        commentary should not apply. He has merely argued that duplicate claims
        should not be part of the intended loss because he did not intend them to be
        paid.
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        22-12837                   Opinion of the Court                            5

        as claims that exceed the insured value. U.S.S.G. § 2B1.1 cmt.
        n.3(A)(ii); United States v. Moss, 34 F.4th 1176, 1191-92 (11th Cir.
        2022) (affirming district court’s use of the amount billed, rather
        than the amount the defendant expected to be reimbursed, even
        though it was unlikely the defendant would be paid the full billed
        amount). Thus, even if United Healthcare was unlikely to
        reimburse Valdes for the entire amount billed or for duplicate
        claims, those claims were nonetheless properly included in the
        intended loss amount.
                Second, at the sentencing hearing, Valdes’s own fraud
        analyst testified that, even accounting for duplicate claims, the total
        loss amount was above $25 million, the threshold for the 22-level
        increase in Valdes’s offense level. Further, Valdes did not present
        any testimony or evidence at sentencing to support his assertion
        that he intended United Healthcare to reimburse him only 30% of
        the billed amount. 2 See Moss, 34 F.4th at 1192 (affirming where the
        defendant did not point to any evidence, such as revenue
        projections based on the actual reimbursable amount, showing he
        intended to obtain less than the amount billed). Accordingly,
        Valdes has not shown clear error in the district court’s
        determination of the loss amount or its application of the 22-level
        increase in Valdes’s offense level under § 2B1.1(b)(1).

        2 Valdes himself did not testify.
                                        Valdes’s expert testified about the duplicate
        billing but not about an agreement with United Healthcare to reimburse only
        30% of the amount billed.
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        6                      Opinion of the Court                 22-12837

               II. SOPHISTICATED MEANS ENHANCEMENT
                Valdes also challenges the district court’s application of a
        sophisticated means enhancement under U.S.S.G. § 2B1.1. Valdes
        argues that his offense involved the largely repetitive act of billing
        for a service that was not provided and was easily detectable.
        A. U.S.S.G. § 2B1.1(b)(10)(C)
               If a defendant’s fraud offense involved sophisticated means,
        his offense level is increased by two levels.              U.S.S.G.
        § 2B1.1(b)(10)(C). The commentary defines “sophisticated means”
        as “especially complex or especially intricate offense conduct
        pertaining to the execution or concealment of an offense.” Id.
        § 2B1.1 cmt. n.9(B). Hiding assets or transactions using fictitious
        entities or corporate shells ordinarily indicates sophisticated
        means. Id.
               Whether conduct is sophisticated is based on the conduct as
        a whole, not on the individual steps. Barrington, 648 F.3d at 1199.
        Repetitive and coordinated conduct can be a sophisticated scheme
        even when no one step is particularly complicated. Id. When a
        large amount of money is stolen gradually and the fraud is not
        discovered over a long period, the length of time for which the
        conduct is not detected can reflect the sophistication of the scheme.
        United States v. Feaster, 798 F.3d 1374, 1381 (11th Cir. 2015).
               In addressing a sophisticated means enhancement, we
        review a district court’s factual findings for clear error and its
        application of the guideline provision to those facts de novo. See
        United States v. Humber, 255 F.3d 1308, 1311 (11th Cir. 2001).
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        22-12837               Opinion of the Court                         7

        B. Analysis
              Here, we find no error in the district court’s application of
        the two-level sophisticated means enhancement.
               Based on his factual proffer and undisputed facts in the PSI,
        Valdes operated an elaborate, years-long scheme to defraud
        insurance companies for expensive Infliximab infusions, obtaining
        over $7 million as a result. The large amount of money defrauded
        and the six-year period the scheme went undetected support a
        finding of sophisticated means. See Feaster, 798 F.3d at 1381. The
        fact that Gasiel was a real medical clinic that provided other,
        legitimate medical services to real patients, including primary care
        services and other intravenous infusions, made the fraud scheme
        involving Infliximab infusions more difficult to detect.
                Contrary to Valdes’s claims, his fraudulent billing was not
        simple, repetitive conduct. To be paid for the fraudulent Infliximab
        infusions and related services, Valdes had to submit itemized claim
        forms to the insurance companies that required various
        information, including descriptions of the services provided and
        billing codes. These claim forms had to be prepared in compliance
        with applicable laws and regulations, including certifying that the
        billed services were medically necessary and actually provided.
        This is the kind of repetitive, yet complex, conduct that qualifies as
        sophisticated means. See Barrington, 648 F.3d at 1199.
               Moreover, Valdes, the beneficial owner and operator of
        Gasiel, took steps to conceal his ownership of Gasiel and his
        involvement in the fraud. At the sentencing hearing, FBI Special
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        8                          Opinion of the Court                       22-12837

        Agent Zachary Mandell testified that Valdes was not listed in
        Gasiel’s corporate records despite being the actual owner and
        operator. Valdes hid behind two licensed doctors, Hilario Isaba
        and Ramon Santiago, who claimed no ownership interest in Gasiel
        and did not prescribe Infliximab. Valdes, who had medical training
        in Cuba, held himself out to patients as a doctor, but Isaba and
        Santiago were identified as the referring providers for all $38
        million in false claims. 3 In addition, Isaba was listed as Gasiel’s
        registered agent and president. Valdes’s false paper trail initially
        worked, as Isaba was the original target of Special Agent Mandell’s
        investigation.
              In light of these facts, the district court properly applied a
        two-level sophisticated means enhancement.
                     III. ABUSE-OF-TRUST ENHANCEMENT
              Valdes also argues that the district court’s application of
        U.S.S.G. § 3B1.3’s abuse-of-trust enhancement was unwarranted.
        A. U.S.S.G. § 3B1.3
              If a defendant abused a position of public or private trust, or
        used a special skill, in a manner that significantly facilitated the

        3 On appeal, Valdes argues that he never held himself out as a doctor at the

        clinic. However, Valdes did not object to that factual statement in paragraph
        13 of the PSI, so it is deemed admitted for sentencing purposes. See United
        States v. Wade, 458 F.3d 1273, 1277 (11th Cir. 2006). Special Agent Mandell
        also testified that many of the clinic patients he interviewed referred to Valdes
        as “Dr. Armando” and that Valdes dispensed pills to patients and sometimes
        reviewed charts and test results with patients.
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        22-12837               Opinion of the Court                         9

        commission or concealment of the fraud offense, the sentencing
        court increases his offense level by two levels. U.S.S.G. § 3B1.3. A
        special skill is one not possessed by members of the general public
        and usually requires substantial education, training, or
        licensing. Id. § 3B1.3 cmt. n.4. Being a doctor is a type of special
        skill. Id.
              The district court applied the two-level enhancement
        because: (1) Valdes engaged in activities consistent with what a
        doctor would do and (2) the clinic’s patients thought he was a
        doctor.
        B. Analysis
               On appeal, the parties vigorously dispute whether Valdes—
        who trained as a doctor in Cuba but was not licensed in the United
        States—occupied, and abused, a position of trust vis-à-vis the clinic
        patients.
                We need not answer that question, however, because the
        enhancement also applies if Valdes used a special skill to facilitate
        the commission of the fraud scheme. The undisputed facts show
        Valdes used his skills as a trained doctor, whether licensed or not,
        to facilitate his fraud by submitting false medical claims. Given that
        Valdes used a special skill in the commission of his offense, the
        district court properly applied § 3B1.3’s two-level enhancement.
                IV. FORFEITURE OF VALDES’S RESIDENCE
               Valdes argues the district court erred by ordering the
        forfeiture of his home as substitute property. Valdes admits that as
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        10                     Opinion of the Court                 22-12837

        part of his plea agreement, he agreed to forfeit his primary
        residence as substitute property. Valdes claims, however, that this
        agreement was not voluntary because the district court failed to
        advise him that his home was a substitute forfeiture asset during
        the plea colloquy, in violation of Federal Rule of Criminal
        Procedure 11.
        A. General Principles
               A district court must order a defendant guilty of a federal
        health care offense to forfeit property derived, directly or
        indirectly, from the commission of the offense. 18 U.S.C.
        § 982(a)(7). Further, the district court is required to order the
        forfeiture of other property of the defendant, i.e., substitute
        property, if any property derived from the commission of the
        offense cannot be forfeited as a result of the defendant’s actions. 21
        U.S.C. § 853(p).
               As to Valdes’s guilty plea, a district court must ensure that a
        defendant’s guilty plea is knowing and voluntary. United States v.
        Sosa, 782 F.3d 630, 636 (11th Cir. 2015). To that end, the district
        court accepting a guilty plea must comply with Rule 11 and, in
        particular, address the three core concerns by ensuring that (1) the
        guilty plea is free from coercion, (2) the defendant understands the
        nature of the charges, and (3) the defendant understands the
        consequences of his plea. Fed. R. Crim. P. 11(b); United States v.
        Utsick, 45 F.4th 1325, 1337-38 (11th Cir. 2022).
              To comply with the third core concern, “Rule 11(b)(1)
        provides a list of rights and other relevant matters about which the
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        22-12837               Opinion of the Court                        11

        court is required to inform the defendant prior to accepting a guilty
        plea, including . . . the possibility of forfeiture.” United States v.
        Moriarty, 429 F.3d 1012, 1019 (11th Cir. 2005) (emphasis added);
        Fed. R. Crim. P. 11(b)(1)(J) (requiring the district court to inform
        the defendant of “any applicable forfeiture” and determine that the
        defendant understands it).
        B. Guilty Plea
               The record shows that the forfeiture allegations in Valdes’s
        indictment and the plea agreement he signed both expressly
        identified Valdes’s primary residence by address as being substitute
        property potentially subject to forfeiture.
               Then, at his plea hearing, Valdes confirmed to the district
        court that he had read, thoroughly reviewed with his lawyer, and
        understood the indictment and plea agreement, both of which
        were translated into Spanish. The district court also reviewed the
        forfeiture provision in Valdes’s plea agreement, and explained,
        among other things, that Valdes “not only agree[d] to give up
        property that was directly derived from this crime,” but also “to
        give up what is known as substitute assets.” Valdes responded that
        he understood the forfeiture provision.
        C. Plain Error Review
              The day before sentencing, the government filed a motion
        for a preliminary order of forfeiture that, among other things,
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        12                       Opinion of the Court                    22-12837

        forfeited Valdes’s primary residence as substitute property. 4 Valdes
        did not oppose the motion or object to the proposed forfeiture of
        his residence before or during his sentencing.
               In fact, Valdes did not raise any issue about the forfeiture of
        his home until after his sentencing, at a status conference at which
        Valdes’s trial attorney was permitted to withdraw. Valdes also did
        not object to the adequacy of his guilty plea proceedings or move
        to withdraw his guilty plea, despite being given the opportunity to
        do so with his newly appointed counsel.
                As such, Valdes agrees that our review of his forfeiture issue
        is for plain error only. See United States v. Monroe, 353 F.3d 1346,
        1349 (11th Cir. 2003); see also Sosa, 782 F.3d at 636 & n.2 (concluding
        the defendants’ “post-sentencing filings did not timely preserve”
        the issue of whether they knowingly and voluntarily agreed to the
        forfeiture provisions in their plea agreements).
                Under plain error review, (1) there must be error; (2) that is
        plain; (3) that affects the defendant’s substantial rights; and (4) that
        seriously affects the fairness, integrity, or public reputation of
        judicial proceedings. Monroe, 353 F.3d at 1349. When neither the
        Supreme Court nor this Court has resolved an issue, there can be
        no plain error. Sosa, 782 F.3d at 637. We may review the whole

        4 The government’s motion for a preliminary forfeiture order sought
        forfeiture of Valdes’s primary residence as substitute property because the
        government was unable to locate all of the directly forfeitable property.
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        22-12837               Opinion of the Court                       13

        record when determining whether acceptance of a plea was plain
        error. United States v. Vonn, 535 U.S. 55, 59, 74 (2002).
        D. Analysis
              Here, we strongly presume Valdes’s statements made
        during the plea colloquy are true. See Medlock, 12 F.3d at 187. In
        these statements, Valdes acknowledged he had read and
        understood his indictment and plea agreement.
               Valdes has not explained how he could have read and
        thoroughly reviewed the indictment and plea agreement with his
        attorney without understanding that the substitute property
        potentially subject to forfeiture was his primary residence. Indeed,
        his primary residence was the only substitute property specifically
        identified in the documents. And the indictment spelled out that
        under certain circumstances caused by Valdes, the government
        was “entitled to the forfeiture of the substitute property.”
               If that’s not enough, at sentencing Valdes’s attorney stressed
        in mitigation that Valdes had agreed to forfeit “five properties”—
        his primary residence was one of the five real properties listed in
        the plea agreement—and that Valdes would be homeless after his
        release from prison. There are no indications in the record that
        Valdes disagreed with his attorney’s statements, corroborating that
        Valdes had agreed to forfeit his primary residence. The record as a
        whole reflects that Valdes understood that his primary residence
        was the substitute property that could be subject to forfeiture.
              Valdes points out that during the plea colloquy, the district
        court did not specifically mention his home, define “substitute
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        14                     Opinion of the Court                 22-12837

        property,” or explain the legal ramifications of having his home
        listed as substitute property. Valdes does not cite any binding
        precedent from this Court or the Supreme Court requiring such a
        detailed discussion of the forfeiture provision to satisfy the
        requirements of Rule 11. In the absence of such precedent, the
        district court’s failure to discuss the substitute property in more
        detail cannot be plain error. See Sosa, 782 F.3d at 637.
               Because Valdes has shown no plain error in the district
        court’s accepting his guilty plea as to the forfeiture allegations, he
        has not shown the district court erred in ordering the forfeiture of
        his primary residence as substitute property.
              AFFIRMED