Court Opinion

ID: 4257907
Source: CourtListenerOpinion
Date Created: 2018-03-23 20:01:33.351768+00
Date Added: 2024-06-11T14:02:48.300940
License: Public Domain

FILED
                            NOT FOR PUBLICATION
                                                                             MAR 23 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No.    16-50322

              Plaintiff-Appellee,                D.C. No.
                                                 2:13-cr-00719-PSG-5
 v.

L’TANYA DENISE SMITH, AKA                        MEMORANDUM*
L’Tanya Russell, AKA L’Tanya Smith,

              Defendant-Appellant.

                    Appeal from the United States District Court
                        for the Central District of California
                    Philip S. Gutierrez, District Judge, Presiding

                       Argued and Submitted October 5, 2017
                               Pasadena, California

Before: RAWLINSON and N.R. SMITH, Circuit Judges, and KORMAN,**
District Judge.

      Defendant-Appellant L’Tanya Smith (Smith), convicted of five counts of

health care fraud in violation of 18 U.S.C. § 1347, appeals her sentence of fifty-

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
seven months’ imprisonment and restitution obligation of $4,007,586. Smith

asserts that the district court erred when determining the loss amount used to

calculate her sentencing range and restitution obligation. Because Smith did not

raise an objection to the loss calculation or restitution before the district court, we

review the claims on appeal for plain error. See United States v. Calvillo-Palacios,

860 F.3d 1285, 1288 n.3 (9th Cir. 2017).

      The amount of loss may be calculated by the greater of either actual or

intended pecuniary harm. See U.S.S.G. § 2B1.1(b)(1) cmt. n.3(A). “A district

court need not make its loss calculation with absolute precision; rather, it need only

make a reasonable estimate of the loss based on the available information. . . .”

United States v. Walter-Eze, 869 F.3d 891, 912 (9th Cir. 2017) (citations and

internal quotation marks omitted). Specifically, “[i]n health care fraud cases, the

amount billed to an insurer shall constitute prima facie evidence of intended loss

for sentencing purposes.” Id. (citation omitted).

      Smith pled guilty without the benefit of a plea agreement. At the change of

plea hearing, Smith affirmed that, as a physician’s assistant at the Sunset Clinic in

Los Angeles, California, she participated in a scheme to defraud Medicare by

ordering and prescribing medically unnecessary items and services for patients at

                                            2
the Sunset Clinic, as well as by making medically unnecessary referrals to other

Medicare providers.

      Smith’s intended loss to Medicare was calculated to be $12,212,594. This

calculation included the amount billed Medicare from Sunset Clinic based on

Smith’s orders added to the amount billed Medicare as a result of Smith’s referrals

to other providers. The actual loss to Medicare as a result of Smith’s actions was

calculated at $4,007,586. The district court adopted these calculations, and Smith

did not object.

      Although Smith had the burden at sentencing to rebut the presumption of

intended loss based on the amounts billed to Medicare, she did not present

evidence to challenge this evidence. See Walter-Eze, 869 F.3d at 912. On appeal,

Smith urges us to consider the declaration of co-defendant Sarkissian as record

evidence rebutting the amount of Smith’s intended loss. Sarkissian’s declaration

was not before the district court at the time of Smith’s sentencing and, in any

event, referred only to Sarkissian’s individual understanding and intent to bill

Medicare; it did not similarly address Smith’s understanding and intent. Smith

presented no similar declaration at her own sentencing.

      Smith also challenges the district court’s determination that the entirety of

the Medicare billing amounts were fraudulent. However, Smith failed to

                                          3
establish—or even raise the argument for consideration—that any portion of the

loss amount “was legitimate and untainted by the fraud.” Walter-Eze, 869 F.3d at

913.

       Given that the loss estimate was reasonably based upon evidence available at

Smith’s sentencing, we cannot conclude that the district court plainly erred when

calculating the intended loss amount attributable to Smith. See id. (“Nor, we

should add, do counsel’s arguments, unsupported by any evidence at trial or

sentencing, that [the defendant] was familiar with Medicare’s reimbursement

practices or that she did not expect to recoup the full billed amount suffice to rebut

this presumption. . . .”). Accordingly, Smith’s related claim that the district court

plainly erred in calculating the restitution amount also fails. See id. at 914-15.

       AFFIRMED.

                                           4
United States v. Smith, No. 16-50322                                       FILED
                                                                           MAR 23 2018
Korman, District Judge, concurring:
                                                                       MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

      As the memorandum disposition explains, Smith’s appeal fails because she

did not in the district court challenge the amount of intended loss. I write separately

because this forfeiture raises a serious question of ineffective assistance of counsel.

      On appeal, Smith argues that the district court improperly attributed to her an

intent to defraud Medicare of amounts billed to it rather than the far smaller amounts

it actually paid. If there is a reason competent counsel would not have raised this

argument below, it does not now occur to me. This issue was crucial—the difference

between $4 million or $12 million in fraud and two Guidelines levels. And this

argument, which Smith now must make under plain-error review, could have been

raised because this Court presented it in United States v. Popov, 742 F.3d 911 (9th

Cir. 2014), which predated Smith’s arrest. Addressing this same issue, Popov

explained that “it is well known that Medicare routinely pays much less than the

billed amount.” Id. at 915. Because of this, the amount billed is deemed the intended

loss only prima facie; a defendant can introduce evidence that the amount billed

overstated her intent, including evidence “that the defendant was intimately familiar

with Medicare’s fixed rate billing practices.” Id. at 916. That Smith’s counsel

apparently made no such argument is troubling, particularly when one of the exhibits

in Smith’s co-defendant’s trial was a manual “to tell a physician or a physician’s
assistant how to use the [Medicare] fee schedule.” Indeed, an expert at the trial

agreed that providers “were obligated under Medicare rules and procedures to bill at

their usual and customary rates” and that “it is a violation of the rules and procedures

to bill Medicare according to the rates [a practitioner knows she] will be

reimbursed.”

      Smith’s intent is also murky in another way. The great majority of the

billing—about $11 million of the $12 million, worth four Guidelines levels—was

done not by Smith, but by providers to whom Smith referred patients. Yet the entire

amount of this billing was attributed to Smith as “intended loss,” “pecuniary harm

that was intended to result from the offense.” U.S.S.G. § 2B1.1 cmt. n.3(A)(ii)

(2010) (emphasis added). “‘[I]ntended loss’ means a loss the defendant purposely

sought to inflict. ‘Intended loss’ does not mean a loss that the defendant merely knew

would result from [her] scheme or a loss [she] might have possibly and potentially

contemplated.” United States v. Manatau, 647 F.3d 1048, 1050 (10th Cir. 2011)

(Gorsuch, J.). Smith no doubt knew that these referral providers would bill some

amounts to Medicare, but it is not at all clear that she intended them—procedure by

procedure—to bill the $10,980,265 that they did. (And, of course, Medicare actually

paid the referral providers far less, about $3.5 million.)

       Combined, these two arguments reduce $12 million of intended fraud (the

amount billed by Smith and the referral providers) to $450 thousand (the amount
Medicare paid on bills from Smith alone). That is six levels’ difference, a Guidelines

range of 30–37 months rather than 57–71. To be sure, my concerns do not alter the

memorandum disposition’s correct conclusion, that Smith is not entitled to relief on

direct appeal. She may, however, be entitled to relief on collateral review.

See 28 U.S.C. § 2255.