Court Opinion

ID: 71942
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:24:33+00
Date Added: 2024-06-11T14:58:52.638084
License: Public Domain

PUBLISH
              IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT

                ________________________________

                          No. 94-5112
                ________________________________

                 D.C. Docket No. 93-367-CR-UU-B

UNITED STATES OF AMERICA,

                                     Plaintiff-Appellee,

     versus

PERLA MARTIN DAVIS, MARTA MORFA,
EMILIO VALDES, ELVA R. LAMAS,

                                     Defendants-Appellants.

_________________________________________________________________

         Appeals from the United States District Court
               for the Southern District of Florida
_________________________________________________________________

                            (July 2, 1997)

Before HATCHETT, Chief Judge, COX, Circuit Judge, and MESKILL*,
Senior Circuit Judge.

HATCHETT, Chief Judge:

     Appellants Perla Martin Davis, Elva Lamas, Marta Morfa and

Emilio Valdes, M.D., were convicted in a complex Medicare fraud

_______________________________
*
 Honorable Thomas J. Meskill, Senior U.S. Circuit Judge for the
Second Circuit, sitting by designation.
scheme.   On appeal, appellants challenge their convictions and

sentences on a number of grounds, including insufficient

evidence, erroneous jury instructions, failure to charge the jury

on an element of the offense, admission of uncharged criminal

conduct evidence, exclusion of expert psychological testimony,

prejudicial prosecutorial comments, failure to grant sentencing

departures, and improper assessment of restitution.    We affirm

the restitution orders assessed against appellants Davis, Lamas

and Morfa, and the judgments and sentences that the district

court entered in all other respects.

                             BACKGROUND

     In August of 1993, a grand jury returned a 23-count Medicare

fraud indictment against the appellants and eight other

defendants.    The indictment charged each of the twelve with

conspiring, in violation of 18 U.S.C. § 371, to (a) “defraud the

United States by impeding, impairing and obstructing the function

of the Department of Health and Human Services in administering

the Medicare Program,” and (b) commit offenses against the United

States, including violations of the False Claims Statute, 18

U.S.C. § 287, and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b

(Count 1).    Counts 2-16 of the indictment charged various

defendants, including appellants, with substantive violations of

the False Claims Act.1   Counts 17-23 included indictments for

violations of 42 U.S.C. § 1320a-7b.    The grand jury charged both

     1
       The indictment charged Davis in Counts 2, 3, 8 and 9;
Morfa in Counts 10 and 14; Lamas in Count 16; and Valdes in
Counts 4, 7, 8 and 10.

                                  2
Davis and Morfa with violating the Anti-Kickback Statute:    Davis

in Count 19 and Morfa in Counts 21-23.   The eight codefendants,

including Frank Morfa, Perla Morfa, Celia Morfa Martin, Mario

Fonesca, Ana Conde, Luis Mateus, Sandra Mayorga and Nora Vega,

subsequently pleaded guilty, leaving appellants to proceed to

trial.

     The government alleged that the appellants and their co-

defendants executed the Medicare fraud scheme through the

operation of sixteen related companies (the Morfa companies).

Certain members of the Morfa extended family, including

appellants Davis, Lamas and Morfa, owned, operated and worked for

the businesses at different times during the course of the

conspiracy.   Over a period of several years, the Morfa companies

submitted false claims and billed Medicare for medically

unnecessary nutritional supplements and feeding supply kits,

ostensibly for the purpose of parenteral and enteral nutritional

(PEN) therapy, the majority of which the intended patients never

received.   Participants in the scheme included (1) recruiters,

who solicited patients through whom Medicare could be billed

fraudulently without their knowledge; (2) physicians, such as

Valdes, who signed blank Certificates of Medical Necessity (CMNs)

which authorized the issuance of PEN therapy medical supplements

and supply kits for the recruited patients, regardless of their

medical necessity and the patients' eligibility to receive such

products; and (3) managers, who paid the recruiters to locate

Medicare-eligible participants, paid the physicians for signing

                                 3
false CMNs, and ran the actual Medicare billing operation --

completing the fraudulent CMNs, preparing falsified Medicare

claim forms and monthly summaries, and filing the documents with

Medicare seeking reimbursement.

     On July 20, 1994, the United States District Court for the

Southern District of Florida granted judgments of acquittal on

the false claims count against Lamas (Count 16), and one false

claims count against Morfa (Count 14).     On August 1, 1994, the

jury returned guilty verdicts on most of the offenses charged in

the indictment.   Each appellant received a guilty verdict on

Count 1, the multiple-object conspiracy.     In addition to the

conviction on Count 1, Davis received guilty verdicts on Counts

2, 3, 8 and 9, and an acquittal on Count 19; the jury declared

Morfa guilty on Counts 10, 21, 22 and 23; and Valdes was found

guilty on Counts 4, 7, 8 and 10.2     In October of 1994, the

district court sentenced Davis to forty-one months, Lamas to

forty-six months and Morfa to forty-six months of imprisonment.

Pursuant to the information and recommendations found in the

appellants’ Presentence Investigation Reports (PSR), the court

ordered them to pay restitution jointly and severally to the

United States Department of Health and Human Resources (HHR) in

installments as the Bureau of Prisons instructed.     The district

court imposed the following restitution amounts:     $9,182,271.40

for Davis, $8,119,445.40 for Lamas and $8,119,445.00 for Morfa.

     2
       Lamas only received the guilty verdict on the conspiracy
count following the district court’s dismissal of the substantive
false claims charge.

                                  4
Valdes received a sentence of thirty months imprisonment; the

court also ordered Valdes to pay $261,896.73 in restitution.
                                ISSUE

     The issue is whether the district court committed plain

error in ordering appellants Davis, Lamas and Morfa to pay

restitution jointly and severally, without making the proper

factual findings regarding the amount of loss and appellants’

respective abilities to pay.3
                           CONTENTIONS

     The appellants argue that the district court (1) plainly

erred in imposing restitution on them for amounts greater than

their specific contributions to the conspiracy; and (2) plainly

erred in failing to make the requisite factual findings regarding

each appellant's ability to pay.

     The government counters that the district court may

attribute the total loss associated with the conspiracy to a

particular conspirator when imposing restitution.   A defendant is

liable for the foreseeable acts of co-conspirators.   While

indigence is a consideration, it is, nonetheless, one of many

factors and does not itself bar an order of restitution.   Because

the appellants did not dispute the relevant facts at trial, the

government contends that the district court was not required to

make explicit factual findings on the restitution issue.

     3
       We do not find appellants' arguments persuasive regarding
the remaining issues raised in this appeal, and, deciding that
the district court did not commit reversible error, we dispose of
them without additional comment. See Eleventh Circuit Rule 36-1.

                                   5
                            DISCUSSION

     In this appeal, appellants challenge the restitution order

on two grounds:   the district court erred in determining the

amount of loss attributable to each appellant for restitution

purposes; and the district court failed to make findings as to

each appellant’s ability to pay the restitution amount.    The

Victim and Witness Protection Act of 1982 (VWPA), 18 U.S.C. §§

3663-64, empowers the district court to award restitution to

victims.   The VWPA enumerates those factors which a district

court must consider before imposing a restitution order.    Section

3664(a) provides:

     The court, in determining whether to order restitution
     under section 3663 of this title and the amount of such
     restitution, shall consider the amount of the loss
     sustained by any victim as a result of the offense, the
     financial resources of the defendant, the financial
     needs and earning ability of the defendant and the
     defendant's dependents, and such other factors as the
     court deems appropriate.

18 U.S.C. § 3664(a) (1994).4   The court must award restitution

“in accordance with sections 3663 and 3664.”   United States v.

Twitty, 107 F.3d 1482, 1493 (11th Cir. 1997) (quoting 18 U.S.C. §

3556).

     4
       We acknowledge that Congress substantially amended
sections 3663 and 3664 in 1996. See Antiterrorism and Effective
Death Penalty Act of 1996, Pub. L. No. 104-132, Title II, §§
205(a), 206(a), 110 Stat. 1214, 1229-31, 1232-36 (Apr. 24, 1996),
codified at 18 U.S.C.A. §§ 3663, 3664 (West Supp. 1997). We need
not apply the amended versions to these facts, however, because
the amendments are only effective “for sentencing proceedings in
cases in which the defendant is convicted on or after Apr. 24,
1996.” 18 U.S.C.A. §§ 3663, 3664 note (West Supp. 1997). All
future references to the VWPA within this opinion are to its pre-
1996 amendment version.

                                 6
     This court ordinarily reviews a district court's restitution

order for abuse of discretion.    United States v. Remillong, 55

F.3d 572, 574 (11th Cir. 1995).     The court reviews the legality

of the restitution order de novo.     United States v. Cobbs, 967

F.2d 1555, 1556 (11th Cir. 1992).     The appellants admit, however,

that they did not dispute the restitution order at sentencing.

Moreover, the appellants did not state any objections to their

PSRs on the issue of restitution.     A defendant’s failure to

challenge a restitution order at sentencing constitutes a waiver

of the objection.   United States v. Stinson, 97 F.3d 466, 468 n.1
(11th Cir. 1996), cert. denied, 117 S. Ct. 1007 (1997).     The

appellants were obligated to preserve this issue for appeal, and

their silence in the face of that duty precludes us from

addressing the merits of their contentions absent a showing of

manifest injustice.   Effective appellate review is hindered when

the asserted error has not been brought to the district court’s

attention.   Under these facts, therefore, we will review the

restitution orders for plain error.     See United States v.

Obasohan, 73 F.3d 309, 310-11 (11th Cir. 1996) (absent manifest

injustice, this court will not entertain an appeal of a

restitution order if the defendant failed to raise an objection

to the district court); see also Cobbs, 967 F.2d at 1557-58 (if
plain error exists, this court may review the claim).

     1.   The Amount of Loss

     The appellants fail to show any error in the district

court’s measure of restitution assessed on behalf of HHR.        The

                                  7
appellants contend that the district court did not properly

tailor the amount of restitution to each appellant’s specific

conduct within the conspiracy.   In Obasohan, this court held that

a district court may order a defendant to pay restitution for

losses "which result from acts done in furtherance of the

conspiracy of which the defendant is convicted."      73 F.3d at 311.

After careful review of the record, we conclude that the district

court did not commit error, plain or otherwise, in calculating

the amount of loss attributable to the appellants.

     A conspiracy is an ongoing criminal activity for which a

participant remains culpable until the conspiracy ends or the

participant withdraws.   Hyde v. United States, 225 U.S. 347, 369
(1912).   “Congress intended restitution to be tied to the loss

caused by the offense of conviction.”      Hughey v. United States,

495 U.S. 411, 418 (1990).   Where the defendant is convicted of

conspiracy to defraud, the district court has “the authority to

order restitution for the losses caused by the entire fraud

scheme, not merely for the losses caused by the specific acts of

fraud proved by the government at trial.”      United States v.

Brothers, 955 F.2d 493, 497 (7th Cir.), cert. denied, 506 U.S.

847 (1992).

     Each appellant herein had a sufficiently substantial

involvement in the fraud scheme to warrant the restitution amount

that the district court ordered.       See United States v. Barnette,
10 F.3d 1553, 1556 (11th Cir.), cert. denied, 513 U.S. 816

(1994)(granting restitution to the extent justice requires).      Our

                                   8
conclusion follows the general proposition that a defendant is

liable for reasonably foreseeable acts of others committed in

furtherance of the conspiracy of which the defendant has been

convicted.    See, e.g., United States v. Ismond, 993 F.2d 1498,

1499 (11th Cir. 1993).   The appellants herein were thoroughly

involved in this scheme to defraud the Medicare system.

Accordingly, the district court properly relied on the

information contained in the PSRs to render the appellants

jointly and severally liable for the losses resulting from the

enterprise.   The court did not plainly err in imposing

restitution on each appellant based on the acts of all those

involved in the scheme for the period that the appellant was

involved.    See United States v. Plumley, 993 F.2d 1140, 1142 (4th
Cir.), cert. denied, 510 U.S. 903 (1993).

     2.     Ability to Pay

     The appellants also do not demonstrate that the district

court failed to consider the appellants’ financial resources,

such that the restitution order can be deemed manifestly unjust.

The statute requires that the district court “consider” the

factors listed above prior to imposing restitution.    18 U.S.C. §

3664(a).    This court has held that the district court must

“evaluate the defendant’s financial condition and ability to pay
before determining the restitution amount . . . .”    Remillong, 55

F.3d at 574 (citations omitted) (emphasis added).

     Neither the statute nor this court requires the district

court to make specific factual findings.    Twitty, 107 F.3d at

                                  9
1493 (“District courts are not obligated to make explicit factual

findings of a defendant’s ability to pay restitution if the

record provides an adequate basis for review.”); see also United

States v. Hairston, 888 F.2d 1349, 1352-53 (11th Cir. 1989).     In

order to warrant a reversal of the restitution order, the

challenging party must show that the “record is devoid of any

evidence that the defendant is able to satisfy the restitution

order.”   Remillong, 55 F.3d at 574 (internal quotation marks

omitted).   The appellant’s burden is particularly acute under the

plain error standard of review.

     Under these facts, the record shows that the district court

considered each appellant’s ability to pay prior to imposing

restitution.   The sentencing transcripts reveal that the district

court noted its reliance upon the information contained in each

appellant’s PSR.   The PSRs assessed the appellants’ financial

resources and capacities for future earnings.   Each PSR

recommended that the appellant would be able to make monthly

payments toward restitution.   “A defendant who disputes his

ability to pay restitution bears the burden of demonstrating his

financial resources by a preponderance of the evidence.”    Twitty,

107 F.3d at 1494 n.14; see also 18 U.S.C. § 3664(d) (1994).      A

defendant’s failure to present contrary evidence authorizes the

district court to rely on the information provided in the PSR.

Twitty, 107 F.3d at 1494 n.14.

     Our prior decision in United States v. Page, 69 F.3d 482

(11th Cir. 1995), does not compel resentencing under the facts at

                                  10
issue.   In Page, this court found plain error where the district

court did not provide the defendants with an opportunity to

object to its findings of fact or conclusions of law as required

under United States v. Jones, 899 F.2d 1097, 1102 (11th Cir.),

cert. denied, 498 U.S. 906 (1990), overruled on other grounds,

984 F.2d 1136 (11th Cir. 1993) (en banc).    Page, 69 F.3d at 492-

93.   Moreover, although the district court had adopted wholesale

the recommendations in the PSR, this was deemed insufficient

because the district court neglected to consider the defendants’

objections.   Page, 69 F.3d at 494.   Furthermore, the record

demonstrated that the district court recognized one defendant’s

inability to pay the restitution imposed.   Page, 69 F.3d at 494.

Our opinion in Page, therefore, stands only for the proposition

that “the wholesale adoption of the PSR at the commencement of

the sentencing hearing, without more, does not suffice to meet

the court’s obligation under 18 U.S.C. § 3664(a) and under

Remillong to consider a defendant’s financial resources before

imposing restitution.”    Page, 69 F.3d at 493-94.

      The facts herein demonstrate that the district court sought

input from the appellants.   As in Page, the district court

acknowledged the information in the PSR and adopted its factual

findings regarding the appellants’ abilities to pay restitution.

Unlike Page, however, the court reviewed the appellants’
objections to the PSRs.   The court then specifically asked each

appellant and counsel whether they objected to the court’s

findings of fact or the sentence imposed.   No appellant took

                                 11
exception to the restitution order.     Where the PSR provides a

detailed account of the “amount of the loss sustained by the

victim, the defendant’s financial resources, and other factors

enumerated in Sections 3663-3664 as appropriate for the court to

consider when imposing restitution[,] . . . the record provides

an adequate basis for review of the restitution order[].”

Twitty, 107 F.3d at 1493-94.   We cannot find plain error where

the district court adopts a PSR supporting its restitution order,

provides the defendant with the chance to object, and considers

any objections raised.   While the district court must explain its

decision to reject any challenges to the restitution order, we

can impose no such burden where the defendant fails to avail

himself of the opportunity to object.

     Upon review of the record, we conclude that the district

court did not plainly err in determining appellants' restitution

amounts.   Even though the district court did not make any

explicit factual findings as to appellants' abilities to pay

restitution, the record does reveal that the district court

considered appellants' abilities to pay as a factor.    The

district court gave each appellant an opportunity to object to

the restitution amount and encountered silence.    The district

court has only the duty to consider the defendant's ability to

pay; it does not have a duty to make a specific factual finding.

Twitty, 107 F.3d at 1493.   Under these circumstances, the

appellants have not shown that the district court failed to honor

                                12
that obligation.   Accordingly, we affirm the district court’s

restitution orders.
                             AFFIRMED

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