Court Opinion

ID: 3206744
Source: CourtListenerOpinion
Date Created: 2016-05-25 17:00:53.375554+00
Date Added: 2024-06-11T12:47:34.755897
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                              File Name: 16a0283n.06

                                          No. 15-1935

                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT
                                                                                   FILED
                                                                              May 25, 2016
UNITED STATES OF AMERICA,                   )                             DEBORAH S. HUNT, Clerk
                                            )
        Plaintiff-Appellee,                 )
                                            )
v.                                          )       ON APPEAL FROM THE UNITED
                                            )       STATES DISTRICT COURT FOR THE
FARID FATA,                                 )       EASTERN DISTRICT OF MICHIGAN
                                            )
        Defendant-Appellant.                )

BEFORE: BOGGS and KETHLEDGE, Circuit Judges; STAFFORD, DistrictJudge.*

        STAFFORD, District Judge.        The defendant, Farid Fata, was a physician who

intentionally mis-diagnosed no fewer than 553 of his patients with cancer and other maladies they

did not have, then administered debilitating treatments, noxious chemicals, and invasive

tests—including chemotherapy, intravenous iron, and PET scans—they did not need. For this

reprehensible conduct, Fata received no less than $17 million in ill-gotten payments from

Medicare and other insurers. The district court accurately described Fata’s conduct as “a huge,

horrific, series of criminal acts.”

        Fata pleaded guilty to sixteen counts—thirteen counts of health-care fraud, one count of

conspiracy to pay and receive kickbacks, and two counts of promotional money laundering. He

*
 The Honorable William H. Stafford, Jr., Senior United States District Judge for the Northern
District of Florida, sitting by designation.
No. 15-1935
United States v. Fata

did not have a Rule 11 plea agreement. After a five-day hearing, the district court sentenced Fata

to 45 years in prison, a sentence within his guideline range of 360 months to life. Fata thereafter

filed this timely appeal, arguing that the district court (1) erred in its application of “Role in the

Offense” enhancements under sections 3B1.3 and 3B1.1 of the United States Sentencing

Guidelines (“USSG”); (2) erred in allowing victim impact statements from patients whose status

as actual “victims” had not been determined; and (3) lacked a sufficient factual basis to accept his

guilty plea to the money laundering counts. Because Fata’s arguments on appeal are without

merit, we affirm.

                                                   I.

        Fata first contends that the trial court erred in enhancing his sentence under USSG

§§ 3B1.3 and 3B1.1. “In reviewing the district court's application of the sentencing guidelines,

this court reviews the district court's legal conclusions de novo and its factual findings for clear

error.” United States v. McCloud, 730 F.3d 600, 605 (6th Cir. 2013).

        Under § 3B1.3, a defendant’s guideline range is increased by two levels if he “abused a

position of public or private trust, or used a special skill, in a manner that significantly facilitated

the commission or concealment of the offense.”            USSG § 3B1.3.         Where this two-level

enhancement is “based solely on the use of a special skill, it may not be employed in addition to an

adjustment under § 3B1.1” for aggravating role. Id. (emphasis added). On the other hand, “[i]f this

adjustment is based upon an abuse of a position of trust, it may be employed in addition to an

adjustment under § 3B1.1.” Id.

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No. 15-1935
United States v. Fata

       The offense-level calculations in Fata’s Presentence Investigation Report (“PSR”)

included a two-level upward adjustment under § 3B1.3 based on Fata’s abuse of a special skill.

The PSR’s calculations did not include an aggravating-role enhancement under § 3B1.1. The

government objected to the calculations, arguing that the calculations should reflect both Fata’s

abuse of trust under § 3B1.3 and his aggravating role under § 3B1.1. While not disputing that

Fata utilized special skills to commit his offenses, the government argued that Fata’s “most

significant abuse” under § 3B1.3 was his abuse of the trust position he held with respect to his

patients and the organizations he billed for fraudulent services. Given the applicability of an

abuse-of-trust adjustment under § 3B1.3, the government urged the district court to add a two-level

adjustment under § 3B1.1 for Fata’s leadership role in the kickback conspiracy. Fata responded

to the government’s argument by arguing that a special-skill enhancement was more appropriate

because “[e]verything in this case stems from [Fata’s] special skill.” Fata accordingly urged the

district court to adopt the calculations as presented by the probation officer. Persuaded by the

government’s arguments, the district court applied a two-level upward adjustment for abuse of

trust under § 3B1.3 and then added another two-level upward adjustment under § 3B1.1(c) for

aggravating role.1

       The record amply supports the district court’s two-level enhancement for abuse of trust.

Prior to sentencing, Fata admitted that his offenses involved an abuse of trust. Indeed, after he
1
  The government argued for a four-level enhancement for aggravating role under § 3B1.1(a).
That section applies “[i]f the defendant was an organizer or leader of a criminal activity that
involved five or more participants or was otherwise extensive.” The district court instead added
two levels under § 3B1.1(c), which applies “[i]f the defendant was an organizer, leader, manager,
or supervisor in any criminal activity other than [one that involved five or more participants or was
otherwise extensive.]”
                                                 -3-
No. 15-1935
United States v. Fata

pleaded guilty, Fata entered into a stipulation with the government as follows: “The parties agree

that the government could prove, by a preponderance of the evidence, that Fata’s offense involved

the abuse of a position of trust [under] Section 3B1.3.” At sentencing, Fata spoke to the judge,

saying that he “violated the medical oath . . . and caused anguish, hardship and pain to my patients

and their families.” Fata then added that he “grossly abused the trust that my patients placed in

me. They came to me seeking compassion and care. I failed them.” Fata’s counsel similarly

advised the judge at sentencing that Fata “admitted to [his probation officer] the first day we saw

her . . . that he had betrayed the trust of his patients and took advantage of them in their most

vulnerable state.”

       Per the Guidelines, a position of trust is “characterized by professional or managerial

discretion (i.e., substantial discretionary judgment that is ordinarily given considerable

deference),” and subjects persons holding such positions “to significantly less supervision than

employees whose responsibilities are primarily non-discretionary in nature.” USSG § 3B1.3,

Application Note 1; see also United States v. Gilliam, 315 F.3d 614, 618 (6th Cir. 2003)

(explaining that a “position of trust arises almost as if by implication when a person or

organization intentionally makes himself or itself vulnerable to someone in a particular position,

ceding to the other’s presumed better judgment some control over their affairs” (internal quotation

marks omitted)).     That a doctor works with little supervision and exercises “substantial

discretionary judgment that is ordinarily given considerable deference” is axiomatic. See United

States v. Kaminski, 501 F.3d 655, 667 (6th Cir. 2007) (referring to the “mantle of trust” accorded to

medical doctors). The Guidelines recognize as much, offering—as one example of a proper

                                                 -4-
No. 15-1935
United States v. Fata

abuse-of-trust enhancement—the “sexual abuse of a patient by a physician under the guise of an

examination.” § 3B1.3, Application Note 1.

       Clearly, Fata occupied a position of trust vis-à-vis his patients within the meaning of

§ 3B1.3. With little supervision and a great deal of discretion, Fata was able to make false

diagnoses and administer potentially deadly, yet unnecessary, courses of treatment for hundreds of

patients who relied on his presumed integrity and accepted his presumed professional

judgments—all to their detriment and to Fata’s financial gain.         Like the physician in the

Guidelines example who sexually abuses a patient under the guise of an examination, Fata

occupied a position of trust when he abused his patients by treating non-existent maladies with

life-threatening chemicals.

       Fata also occupied a position of trust vis- à-vis the insurers—both public and private—that

he billed for fraudulent services. In United States v. Hodge, 259 F.3d 549 (6th Cir. 2001), this

court held, “in accord with the other circuits,” that:

       [C]ertain health care providers, or persons who hold themselves out as providers of
       care, occupy a position of trust with respect to both public and private insurance
       companies if they exercise professional or managerial discretion in treating patients
       and in billing for those treatments, which discretion is given deference by the
       insurers and helps to facilitate [a] crime. Our determination that health care
       providers may be subject to the § 3B1.3 adjustment is in harmony with our circuit's
       case law on this adjustment. Our precedents make clear that the touchstone for a
       finding that the defendant occupies a position of trust is not necessarily the amount
       of supervision the person receives, although that is an important factor to consider,
       but rather the amount of discretion the person has in his or her position of
       employment. Insurance companies must, for the most part, assume that health
       care providers are billing for services that they have actually performed. Because
       the methods available to insurance companies for assessing whether care providers
       have been honest . . . are limited, billing fraud is hard to detect, and insurance
       companies must ultimately defer to the health care providers’ representations that
       service was performed.

                                                  -5-
No. 15-1935
United States v. Fata

Id. at 556 (citations omitted).

       Not only did Fata occupy a position of trust, but that position also facilitated in a significant

way his crimes of health-care fraud and conspiracy to pay and receive kickbacks. The discretion,

the lack of supervision, and the deference granted to Fata by virtue of his being a physician not

only placed him in the position to commit his offenses but also allowed him to victimize so many

for so long for so much. As his criminal conduct illustrates, Fata took advantage of the trust of his

patients and their insurers in a particularly heinous manner. For Fata, an enhancement for abuse of

trust was appropriate. See United States v. Goldman, 607 F. App’x 171, 176 (3d Cir. 2015)

(finding that a physician’s position of trust significantly facilitated the offense of receiving

kickbacks for medical referrals); United States v. Hoogenboom, 209 F.3d 665, 671 (7th Cir. 2000)

(upholding abuse-of-trust enhancement for psychologist who billed Medicare for services that had

not been performed or services not performed as billed); United States v. Sidhu, 130 F.3d 644,

655–56 (5th Cir. 1997) (finding that a physician’s abuse of his patients’ trust significantly

facilitated the physician’s offense of defrauding various government programs and insurance

companies by billing for services that were not performed or were not performed appropriately);

United States v. Adam, 70 F.3d 776, 782 (4th Cir. 1995) (upholding abuse-of-trust enhancement

for an internist who took illegal kickbacks from a cardiologist in exchange for patient referrals).

       While not denying that Fata abused a position of trust with both his insurers and his

patients, Fata contends (1) that the sine qua non of the offense behavior in this case was his use of

special skills; and (2) that, of the two alternatives to enhancement set forth disjunctively in

                                                  -6-
No. 15-1935
United States v. Fata

§ 3B1.3, the district court should have selected the special-skill alternative as the more

appropriate—and only—basis for the § 3B1.3 upward adjustment. Had the trial judge done so,

the additional enhancement for aggravating role under § 3B1.1 would have been precluded.2 Fata

thus maintains that he is entitled to resentencing without the two-level enhancement for

aggravating role.3

       Fata’s argument is not persuasive. As the first sentence of § 3B1.3 provides, a two-level

increase in the Guidelines calculation is applicable if a defendant abused a position of trust or used

a special skill to facilitate or conceal an offense. From that first sentence, it is reasonable to

conclude that § 3B1.3 authorizes only a single two-level increase in the sentencing calculus. It

does not allow for two-level increases for both abuse of trust and special use. However, as the

word “solely” in the third sentence of § 3B1.3 implies, the two applications are not otherwise

mutually exclusive. The third sentence of § 3B1.3 provides that a two-level aggravating-role

enhancement under § 3B1.1 may not be applied if the § 3B1.3 adjustment “is based solely on the

use of a special skill.” That third sentence thus implies that a district court may add two-level

adjustments under both § 3B1.3 and § 3B1.1 when the § 3B1.3 adjustment is based on either

(1) abuse of trust alone, or (2) both abuse of trust and use of a special skill. If it were otherwise,

the word “solely” in § 3B1.3 would be superfluous. See United States v. Porcelli, 440 F. App’x

2
 Without the § 3B1.1 two-level enhancement for aggravating role, Fata’s sentencing range would
have been 292–365 months, and the 45-year sentence that was imposed would have represented an
upward variance.
3
  Fata does not contend that there are no facts to support the aggravating role enhancement. He
limits his argument to the district court’s purported error in attributing the § 3B1.3 enhancement to
abuse of trust rather than solely to the use of a special skill.
                                                 -7-
No. 15-1935
United States v. Fata

870, 877 (11th Cir. 2011) (recognizing that a court may apply enhancements under both § 3B1.1

and § 3B1.3 “if the latter is based at least in part on an abuse of trust”).

        Here, the district court properly added two levels to Fata’s Guidelines calculation

based—at least in part—on Fata’s abuse of a position of trust under § 3B1.3. Because Fata’s

§ 3B1.3 adjustment was based at least in part on abuse of trust, the district court did not err in also

adding two levels for aggravating role under § 3B1.1.

                                                   II.

        Fata next contends that the district court erred by allowing victim impact statements, both

written and oral, from patients whose status as actual “victims” was not confirmed. Even

assuming that the district court considered statements from non-victim patients, Fata’s claim of

error is without merit.

        It is well established that a district court may consider a wide variety of information at

sentencing that could not otherwise be considered at trial. See 18 U.S.C. § 3661 (providing that

“[n]o limitation shall be placed on the information concerning the background, character, and

conduct of a person convicted of an offense which a court of the United States may receive and

consider for the purpose of imposing an appropriate sentence”); Pepper v. United States, 562 U.S.
476, 489 (2011) (noting that sentencing courts may appropriately “conduct an inquiry broad in

scope, largely unlimited as to the kind of information they may consider, or the source from which

it may come”) (internal quotation marks and alteration omitted). The Sentencing Commission

has incorporated the “no limitation” principle in the Guidelines by providing as follows: “In

determining the sentence to impose within the guideline range, or whether a departure from the

                                                   -8-
No. 15-1935
United States v. Fata

guidelines is warranted, the court may consider, without limitation, any information concerning

the background, character and conduct of the defendant, unless otherwise prohibited by law.”

USSG § 1B1.4 (emphasis added); see also United States v. Case, 434 F. App’x 522, 523 (6th Cir.

2011) (noting that the district court “could freely consider” statements from the defendant’s

sister-in-law and mother-in-law, “regardless of whether the in-laws were properly characterized as

‘victims’”). The law thus makes clear that the district court in this case was permitted to consider

oral and written statements from Fata’s patients, whether or not those patients were confirmed as

“victims.”

       In any event, the district court decided not to rely on the patients’ statements in determining

Fata’s sentence. The district court expressly explained that it was unnecessary to rely on them

because the expert testimony and Fata’s pleas “provide[d] a basis for the sentencing.” To the

extent, if any, that the district court considered patient statements, Fata’s sentence was not

rendered unreasonable.

                                                III.

       Finally, Fata claims for the first time on appeal that his guilty pleas to promotional money

laundering (Counts 22 and 23) were not supported by a sufficient factual basis. This claim is

reviewed for plain error. Under the plain-error standard, Fata must show “(1) error (2) that was

obvious or clear, (3) that affected [his] substantial rights and (4) that affected the fairness,

integrity, or public reputation of the judicial proceedings.” United States v. Vonner, 516 F.3d
382, 386 (6th Cir. 2008) (en banc) (internal quotation marks omitted).

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No. 15-1935
United States v. Fata

       A district court must determine that there is a “factual basis” for a guilty plea “[b]efore

entering judgment” on that plea. Fed. R. Crim. P. 11(b)(3). Because a sufficient factual basis

need be present only by the time of judgment, it is not necessary that the factual basis be

established at the plea hearing. Judges may draw factual bases from many sources, including such

post-plea sources as the defendant’s PSR and testimony proffered at sentencing. United States v.

Byrd, 220 F. App’x 421, 425 (6th Cir. 2007); United States v. Bennett, 291 F.3d 888, 896–97 (6th

Cir. 2002).

       The    elements   of   promotional    money laundering,      prohibited   by    18   U.S.C.

§ 1956(a)(1)(A)(i), are that the defendant “(1) conducted a financial transaction that involved the

proceeds of unlawful activity; (2) knew the property involved was the proceeds of unlawful

activity; and (3) intended to promote that unlawful activity.” United States v. Prince, 618 F.3d
551, 554 (6th Cir. 2010) (internal quotation marks omitted). Fata challenges only the third

element: intent to promote the unlawful activity.

       Fata focuses on the plea colloquy only. At the plea hearing, Fata was asked to recite the

facts supporting the two promotional money laundering counts. He testified as follows:

       THE DEFENDANT: As I previously stated in other counts, I submitted claims to
       various insurance companies and Medicare for unnecessary services and infusions
       through my company, Michigan Hematology Oncology [MHO]. In 2013 I
       incorporated a new company, United Diagnostics, that would perform tests such as
       PET scan[s]. . . . United Diagnostics was funded in part using funds that I had
       earned through my submission of claims for unnecessary services. . . . I deposited
       or caused the deposit of two checks from MHO to United Diagnostics –

       THE COURT: From who?

       THE DEFENDANT: Michigan Hematology Oncology to United Diagnostics on
       May 3rd, 2013 . . . and July 2nd, 2013.

                                               -10-
No. 15-1935
United States v. Fata

          THE COURT: Okay.

          THE DEFENDANT: Each written in the amount of $100,000.

          THE COURT: Okay.

          THE DEFENDANT: After United Diagnostics became operational, I submitted
          false claims . . . for certain patients for unnecessary PET scans through United
          Diagnostics.

According to Fata, this plea colloquy “wholly fails to establish that he engaged in the financial

transactions funding United Diagnostics with the specific intent to promote the submission of false

medical claims.”

          Even assuming the plea colloquy was insufficient by itself to establish a factual basis for

the third element of the money-laundering counts, the record as a whole supports the district

court’s finding that Fata deposited checks from MHO with the intent to promote health- care fraud

at United Diagnostics. Before judgment was entered, the district court was able to consider the

PSR,4 the parties’ pre-sentence stipulation,5 and the sentencing documents proffered by the

prosecutor, including the record of interviews taken of medical assistants who worked for Fata at

MHO. From those interviews and the record as a whole, the district court had the following

information: (1) United Diagnostics was originally scheduled to open in April 2013; (2) There was

a huge increase in the number of PET-scan orders signed by Fata beginning in February 2013, all

to be done when United Diagnostics opened its doors, supposedly in April; (3) When the opening
4
    Fata filed no objections to the paragraphs in the PSR that related to the money laundering counts.
5
  After Fata entered his plea but before he was sentenced, the parties stipulated that “consistent
with his guilty plea, Fata’s offense involved money laundering under 18 U.S.C. Section 1956.”
Sealed Stip., Doc. 147–2, Ex. A in the record of the district court in this case (Case No.
2:13cr20600–PDB–DRG).
                                                  -11-
No. 15-1935
United States v. Fata

of United Diagnostics was delayed until July, Fata instructed his staff to reschedule the PET- scan

appointments, delaying them to July and August when scans could be done at United Diagnostics;

(4) Fata made clear to his staff that he did not want his patients referred to other facilities for scans;

(5) When patients questioned the delays and asked for referrals to other PET scan facilities, Fata

instructed his staff to lie to the patients rather than referring them elsewhere; (6) Fata deposited

$100,000 into the bank account of United Diagnostics on May 3, 2013, and again on July 2, 2013,

during the very time period when scans were being rescheduled at United Diagnostics and referrals

were being refused; and (7) The $100,000 checks came from MHO’s bank account. This

information—combined with Fata’s admission that he was guilty of laundering money in violation

of 18 U.S.C. § 1956(a)(1)(A)(i)—was more than enough to provide a sufficient factual basis to

determine that Fata transferred MHO funds to United Diagnostics with the specific intent to

promote the submission of false medical claims at United Diagnostics. The district court did not

err, much less commit plain error, when it accepted Fata’s guilty plea to the money-laundering

counts.

                                                   IV.

          For the foregoing reasons, we AFFIRM the judgment of the district court.

                                                   -12-