Court Opinion

ID: 9917335
Source: CourtListenerOpinion
Date Created: 2024-01-12 01:00:59.796584+00
Date Added: 2024-06-11T08:02:24.538267
License: Public Domain

Case: 23-30048        Document: 00517030138             Page: 1      Date Filed: 01/11/2024

             United States Court of Appeals
                  for the Fifth Circuit                                  United States Court of Appeals
                                                                                  Fifth Circuit

                                     ____________                               FILED
                                                                          January 11, 2024
                                      No. 23-30048                         Lyle W. Cayce
                                     ____________                               Clerk

   United States of America,

                                                                     Plaintiff—Appellee,

                                            versus

   Victor Clark Kirk,

                                              Defendant—Appellant.
                     ______________________________

                     Appeal from the United States District Court
                         for the Middle District of Louisiana
                               USDC No. 3:19-CR-115-1
                     ______________________________

   Before Jones, Haynes, and Douglas, Circuit Judges.
   Per Curiam:*
         Victor Kirk was convicted of conspiracy to commit health care fraud,
   in violation of 18 U.S.C. § 1349, and health care fraud, in violation of 18
   U.S.C. §§ 1347 and 2, arising from a scheme to defraud Medicaid by
   improperly billing group psychotherapy sessions.                 The district court
   sentenced Kirk to a term of imprisonment, ordered he pay restitution in the
   amount of $1,841,527.31, entered a $234,789.87 forfeiture money judgment

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-30048       Document: 00517030138            Page: 2   Date Filed: 01/11/2024

                                       No. 23-30048

   against him, and imposed a $30,000 fine. Kirk appeals the district court’s
   order imposing the forfeiture money judgment and fine. For the reasons set
   forth below, we AFFIRM in part and REMAND in part.

                                  I.     Background
          A. Facts
          Applying the facts consistent with the jury verdict, from January 2011
   to June 2015, Kirk—as the Chief Executive Officer of St. Gabriel Health
   Clinic, a non-profit corporation that operated medical clinics inside
   Louisiana schools—conspired to defraud Medicaid. Under his direction, St.
   Gabriel employees administered educational and character development
   programs, including one called “Character Counts!,” to entire classrooms of
   students, including Medicaid recipients, and then billed these services as
   group psychotherapy sessions.         Even though Medicaid does not cover
   educational services, St. Gabriel employees, at Kirk’s direction, created false
   and fraudulent progress notes indicating that the students present for the
   program required group psychotherapy and that the services provided
   constituted as such.
          After Medicaid ceased reimbursing St. Gabriel’s claims for group
   psychotherapy sessions in the absence of an Axis I diagnosis, St. Gabriel
   employees, again at the direction of Kirk, falsely diagnosed students who
   received the education services with Axis I diagnoses. In total, Medicaid paid
   approximately $1.8 million in claims to St. Gabriel for group psychotherapy
   sessions even though St. Gabriel merely provided educational services.
          B. Procedural History
          A jury found Kirk guilty of one count of conspiracy to commit health
   care fraud, in violation of 18 U.S.C. § 1349, and five counts of health care
   fraud, in violation of 18 U.S.C. §§ 1347 and 2. The presentence investigation
   report (“PSR”) calculated a Sentencing Guidelines range of 121 to 151

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   months with a fine range of $35,000 to $350,000. As to Kirk’s ability to pay,
   the PSR indicated that “[i]t is unlikely the defendant will be capable of paying
   a fine within the guideline range based on the amount of the required
   restitution.”
            Prior to sentencing, the government filed a motion to amend the
   preliminary order of a general forfeiture money judgment, seeking a
   forfeiture money judgment of $234,789.87. The government argued that
   since 45 percent of St. Gabriel’s revenue, or $1.8 million out of $4 million,
   was derived from the fraudulent billing scheme, the court should order Kirk
   to forfeit 45 percent of his salary and compensation that he earned during the
   alleged fraud. This percentage was based solely on the money illegally sought
   compared to the total amount paid by Medicaid (i.e., some of which was
   properly sought). In addition, the government urged the district court to
   order Kirk to forfeit all of his bonus and incentive payments earned during
   the alleged fraud.
            Kirk opposed this motion, arguing, among other things, that the court
   should only order Kirk to forfeit 18 percent of his total salary and benefits
   because St. Gabriel’s total revenue (both Medicaid and non-Medicaid)
   during the time of the alleged fraud was more than $10 million. As such, Kirk
   requested the court to order forfeiture totaling no more than $75,957.
            At sentencing, Kirk introduced financial statements demonstrating
   that St. Gabriel received over $10 million in total revenue during the
   conspiracy and reargued that the court should order Kirk to forfeit, at most,
   20 percent of the salary he received during the fraud. The district court
   credited the government’s proposed forfeiture amount over Kirk’s. But
   neither the district court nor the government addressed Kirk’s argument that
   St. Gabriel’s total income was approximately $10 million during the alleged
   fraud.

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          The court then sentenced Kirk to a total of 82 months of
   imprisonment, ordered he pay restitution in the amount of $1,841,527.31,
   imposed a $30,000 fine, and entered a forfeiture money judgment in the
   amount of $234,789.87. Kirk objected to the imposition of the fine, arguing
   that he was unable to pay the fine in light of the restitution order and the
   forfeiture. In response, the district court indicated there were numerous
   assets listed in the sealed PSR, which it would not disclose on the record, that
   showed Kirk had the ability to pay the $30,000 fine. Kirk filed a timely notice
   of appeal.

                       II.   Jurisdiction & Standard of Review
          The district court’s jurisdiction arose under 18 U.S.C. § 3231. We
   have jurisdiction over this matter under 28 U.S.C. § 1291 and 18 U.S.C.
   § 3742.
          “We review the district court’s findings of fact [relating to a forfeiture
   order] under the clearly erroneous standard of review, and the question of
   whether those facts constitute legally proper forfeiture de novo.” United
   States v. Reed, 908 F.3d 102, 125 (5th Cir. 2018) (cleaned up) (internal
   quotation marks and citation omitted). We review the reasonableness of a
   fine for an abuse of discretion. See United States v. Pacheco-Alvarado, 782 F.3d
   213, 219–20 (5th Cir. 2015).

                                  III.   Discussion
          Kirk raises two issues on appeal: (1) whether the district court erred
   in imposing a $234,789.87 forfeiture money judgment, and (2) whether the
   district court abused its discretion in imposing a $30,000 fine. We address
   each issue below.

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          A. Forfeiture Money Judgment
          Kirk contends the district court’s forfeiture money judgment
   calculation was flawed because it improperly took 45 percent of Kirk’s salary
   and all of his bonuses during the alleged fraud when, based on St. Gabriel’s
   total revenue during that time period (nearly $10 million), it should have
   taken at most 20 percent of his salary and bonuses. The government
   concedes that the district court erred because it failed to resolve the factual
   dispute regarding St. Gabriel’s total revenue during the alleged fraud. As a
   result, the government requests a remand for a new forfeiture hearing. In
   reply, Kirk requests, for the first time, that we resolve the forfeiture
   calculation on appeal because the government cannot present new evidence
   on remand.
          Because both parties agree that the district court’s failure to resolve
   the factual dispute regarding St. Gabriel’s total revenue during the alleged
   fraud constitutes clear error, the central issues here are whether remand is
   appropriate and, if so, the scope of remand. To start, it is unclear whether
   Kirk’s request that we resolve the forfeiture calculation on appeal is even
   properly before us since he did not raise this argument until his reply brief.
   See United States v. Fernandez, 48 F.4th 405, 412 (5th Cir. 2022) (explaining
   failure to adequately brief an issue on appeal, which includes raising an
   argument for the first time in a reply brief, results in the argument being
   abandoned). However, even if the argument was properly raised, remand is
   still the proper disposition because the government has conceded only that
   the district court erred in failing to resolve the factual dispute, not that the
   government did not carry its initial evidentiary burden. See United States v.
   Chem. & Metal Indus., Inc., 677 F.3d 750, 753 (5th Cir. 2012) (concluding
   remand was improper because the government conceded that it did not carry
   its initial evidentiary burden before the district court in proving the amounts
   for forfeiture).

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          To be more explicit, because the government is not conceding that its
   evidence was insufficient to support the forfeiture money judgment, it will
   not need to present new evidence on remand. Indeed, its appellate brief
   intimates as much since it seeks to chip away at the reliability of Kirk’s
   evidence and the validity of his calculation, rather than argue for the
   introduction of new evidence. Thus, we remand the forfeiture money
   judgment for more detailed findings by the district court regarding both
   Kirk’s salary and his bonuses during the alleged fraud based upon the
   evidence originally presented. See United States v. Carales-Villalta, 617 F.3d
   342, 345 (5th Cir. 2010) (explaining the court may “limit consideration to
   only particular evidence on remand”).
          B. Imposition of the Fine
          Kirk contends the district court erred in imposing the fine because the
   PSR indicated he was unlikely to be able to pay the fine due to his financial
   conditions and the substantial restitution amount owed and because the
   government failed to come forward with evidence to show Kirk could pay the
   fine. We disagree.
          If the district court adopts the PSR but disregards its recommendation
   regarding a fine, then the district court must make specific findings regarding
   the defendant’s ability to pay. United States v. Brantley, 537 F.3d 347, 351–52
   (5th Cir. 2008). However, the district court is not required to make specific
   findings regarding the defendant’s ability to pay a fine when the court does
   not reject or depart from the PSR’s recommendation. Id. at 352.
          The district court did not depart from or reject the PSR’s
   recommendation regarding Kirk’s ability to pay the fine.            The PSR
   determined that based on the required amount of restitution Kirk had to pay,
   “[i]t is unlikely [Kirk] will be capable of paying a fine within the guideline
   range.” The district court then imposed a below-Guidelines fine in the

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   amount of $30,000. Thus, the district court did not depart from the PSR’s
   recommendation. See United States v. Landerman, 167 F.3d 895, 900 (5th Cir.
   1999). Moreover, as the district court suggested, the PSR contains evidence
   that indicates Kirk would likely be able to pay a lesser fine, e.g., his monthly
   cash flow, properties, and other assets. Accordingly, the district court did
   not abuse its discretion in imposing the $30,000 fine.

                                IV.      Conclusion
          For the reasons set forth above, we VACATE the forfeiture money
   judgment and REMAND for more detailed findings by the district court
   regarding both Kirk’s salary and bonuses during the alleged fraud based upon
   the evidence originally presented. The remainder is AFFIRMED.

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