United States v. Muhammed Usman , 460 F. App'x 414 ( 2012 )

Case: 10-11077 Document: 00511757165 Page: 1 Date Filed: 02/13/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 13, 2012
No. 10-11077
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
MUHAMMED NASIRU USMAN, also known as Nasir Usman,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:09-cr-146-P-1
Before HIGGINBOTHAM, SMITH, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Muhammed Nasiru Usman appeals his sentence for Medicare/Medicaid
fraud, challenging the district court’s calculation of loss amount under U.S.S.G.
§ 2B1.1 and application of enhancements for mass-marketing and abuse of a
position of trust with Medicare and Medicaid. Usman also argues that his
sentence is substantively unreasonable. We affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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No. 10-11077
I.
Muhammed Nasiru Usman owned and operated two private ambulance
companies, Royal Ambulance Services, Inc. (“Royal”) and First Choice, EMS, Inc.
(“First Choice”). Usman operated Royal until late 2006, when it ceased doing
business due to seizure of its assets stemming from the investigation of its
fraudulent Medicare and Medicaid billing. First Choice stopped doing business
in 2007 after Medicare began denying its claims on pre-pay medical review.
Usman was indicted on one count of conspiracy to commit health care
fraud in violation of 18 U.S.C. § 371; twelve counts of health care fraud, in
violation of 18 U.S.C. §§ 1347 and 2; and one count of engaging in monetary
transactions in property derived from specified unlawful activity, in violation of
18 U.S.C. §§ 1957 and 2. David McNac, Usman’s former office manager, and
Shaun Outen, Usman’s former director of operations, were also indicted and pled
guilty to conspiracy to commit health care fraud. McNac’s and Outen’s plea
agreements effectively limited their sentencing exposure to sixty months
imprisonment – the statutory maximum for the conspiracy count.
Usman proceeded to trial. The evidence adduced at trial revealed that
Royal and First Choice primarily transported Medicare and Medicaid patients
to and from dialysis treatment on a non-emergency basis. Medicare paid for a
non-emergency transport of a dialysis patient only if the patient suffered from
a medical condition that, at the time of transport, made other means of
transportation dangerous to the patient’s health. At least eighteen patients
transported by Royal and First Choice did not meet Medicare’s criteria for
reimbursement. In total, First Choice and Royal billed Medicare and Medicaid
$3,644,464.90 for the eighteen patients. Under Usman’s direction and approval,
McNac, Outen, and other managers instructed company employees to modify the
ambulance “runsheet” narratives to disguise the patients’ true conditions. The
claims for these patients omitted key details of the patients’ medical statuses
and transport and included false information to justify reimbursement.
2
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The jury convicted Usman on all counts.
At sentencing, the district court applied an eighteen-level enhancement
to Usman’s base offense level based on a “loss amount” of $3,644,464.90.1 The
district court calculated the loss amount according to the amount Usman billed
to Medicare/Medicaid. The district court also applied a two-level enhancement
for mass-marketing,2 a two-level enhancement for abuse of a position of trust,3
a four-level adjustment for Usman’s role as an organizer or leader in the
criminal activity,4 and a two-level increase in the offense level for obstruction of
justice.5 This resulted in a total offense level of 35. Because Usman was in
Criminal History Category III, that offense level corresponded to a Guideline
range of 210 to 262 months. However, the district court granted a two-level
downward variance, leaving Usman with a Guideline range of 168 to 210
months. The court sentenced Usman to 180 months imprisonment and a three-
year term of supervised release and ordered him to pay restitution in the amount
of $1,317,179.30. Usman timely appealed.
II.
A. Loss Amount
“We review de novo the district court’s method of determining loss, while
clear error review applies to the background factual findings that determine
whether or not a particular method is appropriate.”6 The commentary to § 2B1.1
indicates that for the purposes of that Guideline, “loss” is the “greater of the
1
See U.S.S.G. § 2B1.1(b)(1)(J).
2
See id. § 2B1.1(b)(2)(A)(ii).
3
See id. § 3B1.3.
4
See id. § 3B1.1(a).
5
See id. § 3C1.1.
6
United States v. Isiwele, 635 F.3d 196, 202 (5th Cir. 2011) (citing United States v.
Harris, 597 F.3d 242, 251 n.9 (5th Cir. 2010)).
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actual loss or intended loss.”7 To establish a particular amount of “intended
loss,” the government must prove by a preponderance of evidence that the
defendant had the subjective intent to cause that amount of loss.8 The
commentary to § 2B1.1 explains that intended loss may “include[] intended
pecuniary harm that would have been impossible or unlikely to occur.”9 This
court has held that the amount fraudulently billed to Medicare and Medicaid is
“prima facie evidence of the amount of loss [the defendant] intended to cause,”
but “the amount billed does not constitute conclusive evidence of intended loss;
the parties may introduce additional evidence to suggest that the amount billed
either exaggerates or understates the billing party’s intent.”10
Here, it was undisputed that Usman billed $3,644,464.90 in fraudulent
claims. Thus, there was prima facie evidence that Usman intended a loss of
$3,644,464.90.11 Usman maintains, as he did at sentencing, that the district
court should have found that he intended a loss of no more than the
$1,317,179.30 actually paid on the fraudulent claims. Usman notes that he
argued at sentencing that he and the others involved in the scheme were
“abundantly aware” that they would only receive amounts allowed under
Medicare’s reimbursement formula and fee schedule. But Usman presented no
evidence in support of that argument, and the record does not support it.
None of the witnesses at trial testified that Usman knew the details of
Medicare’s reimbursement formula and fee schedule. In addition, there was no
testimony that Usman knew that Medicare would automatically forward the
7
U.S.S.G. § 2B1.1 cmt. n.3(A). The commentary to a Guideline is binding unless it is
inconsistent with the language of the Guideline. See United States v. Cervantes-Blanco, 504
F.3d 576, 579 n.1 (5th Cir. 2007).
8
United States v. Sanders, 343 F.3d 511, 527 (5th Cir. 2003).
9
U.S.S.G. § 2B1.1 cmt. n.3(A)(ii).
10
Isiwele, 635 F.3d at 203.
11
See id.
4
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claims to Medicaid for dually-covered patients. Usman himself testified that he
did not know the rules of Medicare/Medicaid billing or how to go about billing for
ambulance transports. He stated that he contracted with professional billing
companies “because they know the Medicare/Medicaid rules,” which he did not
know. Usman also testified that, although he owned and operated First Choice
and Royal, he relied on his employees and was not aware of fraudulent conduct.
One of the government’s witnesses, an employee of a government contractor that
processed Medicare claims, provided brief testimony about Medicare fee
schedules and reimbursement rates, and the government introduced into
evidence a disk containing a scanned version of the manual of Medicare rules
and regulations for the years 2002 and 2004-2006. However, none of the billing
representatives testified that they had discussed the reimbursement rates or fee
schedules with Usman.
Given Usman’s own testimony that he knew nothing about billing and the
absence of any testimony that he was aware of or understood the Medicare fee
schedule and reimbursement formula, it was not clear error for the district court
to find an intended loss of $3,644,464.90 – the amount billed for fraudulent
claims.12
B. Mass-Marketing Enhancement
We review the district court’s factual findings with regard to the mass-
marketing enhancement for clear error and the district court’s interpretation of
the Sentencing Guidelines de novo.13
The commentary to § 2B1.1(b)(2) explains that for the purposes of the
subsection, “‘mass-marketing’ means a plan, program, promotion, or campaign
12
See, e.g., United States v. Hearne, 397 F. App’x 948, 951 (5th Cir. 2010) (unpublished)
(finding no clear error in the district court’s finding that the billed amount was the intended
loss amount where “[t]here was evidence that [the defendant] lacked knowledge of the billing
procedures for Medicare and therefore did not understand the amounts that Medicare likely
would pay”).
13
United States v. Mauskar, 557 F.3d 219, 232 (5th Cir. 2009).
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that is conducted through solicitation by telephone, mail, the Internet, or other
means to induce a large number of persons to (i) purchase goods or
services . . . .”14 We have emphasized that “th[is] definition of ‘mass-marketing’
is not limited to the listed mediums-it explicitly contemplates ‘other means’ of
mass-marketing.”15 For example, “face-to-face marketing intended to reach a
large number of persons for the purpose of facilitating health care fraud can
constitute mass-marketing.”16 For purposes of the enhancement, the mass-
marketing need not be directed at victims of the fraud.17 In addition, the
enhancement may be applied even where the defendant did not actively
participate in the mass-marketing activities.18
The district court explained that it was applying the mass-marketing
enhancement in Usman’s case because “[t]his Circuit has upheld that
[enhancement] in . . . Medicare fraud cases where they are targeting nursing
homes and the places where you have multiple people that could be potential
clients.” Usman argues that the district court erred in applying the
enhancement because, unlike printed advertisements, promotional pens and
mouse pads distributed by McNac and Outen merely displayed logos and did not
“impart details . . . about the goods or services a company produces.” As the
government notes, however, the marketing efforts in this case consisted of more
than the distribution of pens and mouse pads. Usman’s employees distributed
those promotional items, as well as “gifts provided by . . . Usman such as
colognes, perfumes, [and] gift cards,” in conjunction with a face-to-face
marketing campaign that targeted administrators at nursing homes in the
14
U.S.S.G. § 2B1.1 cmt. n.4.
15
United States v. Magnuson, 307 F.3d 333, 335 (5th Cir. 2002) (per curiam).
16
Mauskar, 557 F.3d at 233 (quotation marks, alterations, and citation omitted).
17
Isiwele, 635 F.3d at 204-05.
18
Mauskar, 557 F.3d at 233.
6
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Dallas area. They also catered lunches for employees at the facilities. Usman
and McNac enlisted Murray Thomas, one of the patients, to market for Usman
at the dialysis center where she received treatment. McNac testified that in late
2004 and 2005, ninety percent of the patients served by Royal Ambulance had
been “acquired by marketing efforts.” The district court did not err in its
application of the mass-marketing enhancement.
C. Abuse-of-Position-of-Trust Enhancement
Usman next challenges the district court’s application of an enhancement
based on Usman’s abuse of a position of trust with Medicare and Medicaid,19
arguing that as the owner of an ambulance service provider, he was not in a
trust relationship with Medicare and Medicaid. As Usman acknowledges, that
argument is barred by circuit precedent,20 and he raises it merely to preserve it
for future review.
D. Substantive Reasonableness
Usman asks the panel to find that his sentence was substantively
unreasonable because it was “at least 300% higher than those meted out to his
codefendants.” Because Usman did not challenge the reasonableness of his
sentence in the district court, we apply a plain error standard of review.21 Under
that standard, Usman must demonstrate that the district court made a clear or
obvious error that affected his substantial rights.22 If he does so, we may
exercise our discretion to correct the error only if it seriously affects the fairness,
integrity, or public reputation of judicial proceedings.23
19
U.S.S.G. § 3B1.3 (providing for a two-level enhancement “[i]f the defendant abused
a position of public or private trust . . . in a manner that significantly facilitated the
commission or concealment of the offense”).
20
See United States v. Miller, 607 F.3d 144, 150 (5th Cir. 2010).
21
United States v. Peltier, 505 F.3d 389, 391-92 (5th Cir. 2007).
22
Puckett v. United States, 556 U.S. 129, 135 (2009).
23
Id.7
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Under 18 U.S.C. § 3553(a)(6), a district court must consider “the need to
avoid unwarranted sentencing disparities among defendants with similar
records who have been found guilty of similar conduct.”24 However, this rule
does not apply to “sentencing disparities between co-defendants who might not
be similarly situated.”25 As the district court reasonably concluded, Usman and
his co-defendants were not similarly situated. Usman thus has not shown any
error with regard to the substantive reasonableness of his sentence.
III.
The sentence imposed by the district court is AFFIRMED.
24
See United States v. Guillermo Balleza, 613 F.3d 432, 435 (5th Cir. 2010) (quoting 18
U.S.C. § 3553(a)(6)).
25
Id.8