Court Opinion

ID: 4315984
Source: CourtListenerOpinion
Date Created: 2018-09-27 14:00:27.254195+00
Date Added: 2024-06-11T13:27:36.724179
License: Public Domain

Case: 18-10123   Date Filed: 09/27/2018   Page: 1 of 10

                                                          [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 18-10123
                         Non-Argument Calendar
                       ________________________

                  D.C. Docket No. 1:17-cr-20408-JEM-1

UNITED STATES OF AMERICA,

                                                               Plaintiff-Appellee,
                                   versus
PEDRO MANUEL MANGANO,
                                                          Defendant-Appellant.

                      __________________________

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

                            (September 27, 2018)

Before WILLIAM PRYOR, FAY and ANDERSON, Circuit Judges.

PER CURIAM:
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      Pedro Manuel Mangano appeals his 48-month sentence, imposed after

pleading guilty to one count of health care fraud, in violation of 18 U.S.C. § 1347.

We affirm.

                                I. BACKGROUND

      Mangano owned and operated PVRX Pharmacy, Corp. (“PVRX”), where he

served as the president, sole director, and sole signatory on its bank account.

Mangano enrolled PVRX in the Medicare Part D health care benefit program and

engaged in a scheme to defraud the Medicare Part D program through submitting

false and fraudulent claims to the program. As part of the scheme, Mangano paid

kickbacks to individuals for referring fraudulent prescriptions to PVRX and then

submitted the claims to the Part D program to receive reimbursements without ever

actually ordering many of the drugs or dispensing the drugs to the Medicare

beneficiaries. Mangano paid a patient recruiter several thousand dollars cash to

provide him with patients’ Medicare information, which he used to submit the

fraudulent claims. The Medicare beneficiaries, who were complicit in the scheme,

received several hundred dollars cash each month as kickbacks.

      The scheme went on for at least three years and resulted in losses to the Part

D program of over $1,000,000. Numerous individuals were involved in the

scheme, including beneficiaries, patient recruiters, and unknown others, such as

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doctors. Mangano submitted fraudulent prescriptions from at least five separate

Medicare beneficiaries.

      Mangano was indicted on ten counts of health care fraud, in violation of 18

U.S.C. § 1347. The indictment listed ten fraudulent prescriptions that Mangano

submitted for five separate Medicare beneficiaries. Mangano pled guilty to Count

I, pursuant to a plea agreement, and the remaining counts were dismissed.

      In preparing the presentence investigation report (“PSI”), the probation

officer applied a base offense level of six under U.S.S.G. § 2B1.1(a)(2). Mangano

received a 14-level increase under section 2B1.1(b)(1)(H), as the loss was more

than $550,000 but not more than $1,500,000; a two-level increase under section

2B1.1(b)(7), as the offense involved a government health care program and the

loss was more than $1,000,000; a two-level increase under section

2B1.1(b)(10)(C), because the offense involved sophisticated means; and a three-

level increase under section 3B1.1(b), as Mangano was a manager or supervisor of

extensive criminal activity. Mangano received a three-level decrease for accepting

responsibility for the offense under section 3E1.1(a) and (b), resulting in a total

offense level of 24. Based on a total offense level of 24 and a criminal history

category of I, Mangano’s guideline range was 51 to 63 months of imprisonment.

The statutory maximum was ten years of imprisonment under 18 U.S.C. § 1347.

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      Mangano filed objections to the PSI, arguing that the three-level

manager/supervisor enhancement under section 3B1.1(b) was inapplicable,

because he was not a supervisor or manager of criminal activity that was otherwise

extensive, and that the two-level sophisticated-means enhancement under section

2B1.1(b)(10)(C) was inapplicable.

      The district court stated that it believed 48 months was the “right sentence”

in this case and that it was “not sure” whether its ruling on the enhancement

mattered since it intended to impose a 48-month sentence. The court overruled

Mangano’s objections, stating that Medicare fraud is sophisticated by its very

nature, because the participants have to do numerous things just right, and,

therefore, the enhancement will apply except in “very unusual circumstances.”

The court imposed a below-guideline 48-month sentence.

      On appeal, Mangano argues that the district court clearly erred by applying a

three-level manager/supervisor enhancement to his base offense level because

there was no evidence that he managed or supervised any other criminal

participant. Additionally, he argues that the district court clearly erred by applying

a two-level sophisticated-means enhancement because his offense was not

sophisticated.

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                                 II. DISCUSSION

A. Manager/Supervisor Enhancement

      Section 3B1.1 calls for an enhancement in a defendant’s base offense level if

he was an organizer, leader, manager, or supervisor of the offense. U.S.S.G.

§ 3B1.1. The government must prove the existence of an aggravating role by a

preponderance of the evidence. United States v. Alred, 144 F.3d 1405, 1421 (11th

Cir. 1998). We review for clear error a district court’s decision to impose an

aggravating-role increase. United States v. Sosa, 777 F.3d 1279, 1300 (11th Cir.

2015). Review for clear error is deferential; “we will not disturb a district court’s

findings ‘unless we are left with a definite and firm conviction that a mistake has

been committed.’” Id. (quoting United States v. Clarke, 562 F.3d 1158, 1165 (11th

Cir. 2009)). A district court’s choice between two permissible views of the

evidence cannot be clear error. United States v. Ndiaye, 434 F.3d 1270, 1305 (11th

Cir. 2006).

      Under section 3B1.1(b), a district court may increase a defendant’s offense

level by three levels if 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. U.S.S.G. § 3B1.1(b). Section 3B1.1 requires that the

defendant exercised some authority in the organization or exerted some degree of

control, influence, or leadership. United States v. Gupta, 463 F.3d 1182, 1198

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(11th Cir. 2006). To qualify for an increase under this section, the defendant need

only manage or supervise one other participant in the criminal activity. Sosa, 777
F.3d at 1301. “However, ‘a section 3B1.1 enhancement cannot be based solely on

a finding that the defendant managed the assets of a conspiracy,’ without the

defendant also managing or exercising control over another participant.” Id.

(quoting United States v. Glover, 179 F.3d 1300, 1303 (11th Cir. 1999)).

      A defendant can be a manager or supervisor where he arranges criminal

transactions or hires others to participate in the criminal conduct, even if he does

not have the power to force others to engage in criminal acts. See United States v.

Matthews, 168 F.3d 1234, 1249-50 (11th Cir. 1999) (stating that the management

enhancement is appropriate for a defendant who arranges drug transactions,

negotiates sales with others, and hires others to work for the conspiracy); see also

United States v. LaFraugh, 893 F.2d 314, 319 (11th Cir. 1990) (concluding that the

defendant was a manager or supervisor where he recruited a codefendant,

participated in negotiations, and used his residence as the base of operations). In

Sosa, we affirmed a section 3B1.1(b) enhancement where the defendant co-ran a

clinic used in the fraud, received 50% of the fraud proceeds, had signatory

authority over the bank account, wrote checks to compensate at least one

participant in the scheme, and had some decision-making authority and control

over the pharmacy’s finances. Sosa, 777 F.3d at 1301-02.

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      A “participant” in criminal activity “is a person who is criminally

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

U.S.S.G. § 3B1.1 cmt. n.1; Sosa, 777 F.3d at 1301. “In assessing whether an

organization is ‘otherwise extensive,’ all persons involved during the course of the

entire offense are to be considered. Thus, a fraud that involved only three

participants but used the unknowing services of many outsiders could be

considered extensive.” U.S.S.G. § 3B1.1 cmt. n.1; Sosa, 777 F.3d at 1301.

Although we do not employ a precise definition for the “otherwise extensive”

standard, there are a number of factors relevant to the extensiveness determination,

including the length and scope of the criminal activity as well as the number of

persons involved. United States v. Holland, 22 F.3d 1040, 1046 (11th Cir. 1994).

      The district court may base its factual findings on undisputed facts in the

PSI. United States v. Beckles, 565 F.3d 832, 843 (11th Cir. 2009). Facts in the PSI

are undisputed and deemed to have been admitted unless a party objects to them

before the sentencing court with specificity and clarity. Id. at 844. In ultimately

deciding the defendant’s role in the offense, the sentencing court need not make

any specific subsidiary factual findings. United States v. De Varon, 175 F.3d 930,

939 (11th Cir. 1999) (en banc) (explaining that, as long as the record supports the

district court’s decision and the court clearly resolves disputed factual issues, the

court may simply state its conclusion). The district court is not required to make

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any specific findings other than the ultimate determination of the defendant’s role

in the offense. Id. at 940.

      Here, the district court did not clearly err in applying the three-point

manager/supervisor enhancement under section 3B1.1(b), as Mangano maintained

exclusive control over the pharmacy where the fraud took place and all of the

profits from the scheme, which he used to direct and facilitate the actions of the

other criminal participants. Gupta, 463 F.3d at 1198. Moreover, the scheme here

either involved five or more participants, or was otherwise extensive, as the PSI

indicated that there were at least five other criminal participants, and the scheme

went on for at least three years, resulted in losses exceeding one million dollars,

and involved the services, either knowing or unknowing, of numerous individuals,

including insurance auditors, Medicare employees, and patients. U.S.S.G. §

3B1.1(b); Sosa, 777 F.3d at 1301; Holland, 22 F.3d at 1046. Lastly, the district

court did not clearly err by applying the enhancement without making an explicit

factual finding that Mangano controlled another participant, as it was not required

to make such an explicit factual finding when determining Mangano’s role in the

offense. De Varon, 175 F.3d at 939-40.

B. Sophisticated-Means Enhancement

      We review for clear error a district court’s decision to impose a

sophisticated-means enhancement. Sosa, 777 F.3d at 1300. Under section

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2B1.1(b)(10)(C), a defendant’s offense level is enhanced by two levels if the

offense involved sophisticated means and the defendant intentionally engaged in or

caused the conduct constituting sophisticated means. U.S.S.G. § 2B1.1(b)(10)(C).

“‘Sophisticated means’ means especially complex or especially intricate offense

conduct pertaining to the execution or concealment of an offense.” Id. cmt. n.9(B).

Examples of sophisticated means listed in the commentary include hiding assets or

transactions, or both, through the use of fictitious entities, corporate shells, or

offshore financial accounts. Id. However, the application notes do not limit the

ways in which a defendant could use sophisticated means to conceal his crime.

Clarke, 562 F.3d at 1165.

      Section 2B1.1(b)(10)(C) was amended in 2015 to narrow the focus of the

enhancement to the sophistication of the defendant’s personal conduct, not the

scheme as a whole. United States v. Presendieu, 880 F.3d 1228, 1248 (11th Cir.

2018). In gauging sophistication, the court must examine the totality of the

defendant’s conduct, as there is no requirement that each of the defendant’s

individual actions be sophisticated. United States v. Ghertler, 605 F.3d 1256, 1267

(11th Cir. 2010). The use of repetitive, coordinated conduct to perpetuate and

conceal a fraud scheme supports a sophisticated-means enhancement. United

States v. Bane, 720 F.3d 818, 826-27 (11th Cir. 2013). Further, the length of time

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for which the conduct is not detected can reflect on the sophistication of the

scheme. United States v. Feaster, 798 F.3d 1374, 1381 (11th Cir. 2015).

      Here, the district court did not clearly err in applying the sophisticated-

means enhancement because Mangano’s conduct of enrolling the pharmacy in

Medicare Plan D, creating and submitting claims for fraudulent prescriptions, and

misleading and deceiving insurance auditors was all intricate offense conduct,

made possible by his expertise as a pharmacy owner and licensed pharmacy

technician. U.S.S.G. § 2B1.1 cmt. n.9(B). The sophistication of Mangano’s

conduct was further evidenced by the scheme’s endurance for three years without

detection and by his utilization of repetitive and coordinated conduct, including

continual cash payments to the criminal participants. Bane, 720 F.3d at 826-27;

Feaster, 798 F.3d at 1381.

      AFFIRMED.

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