United States v. Rettenberger, Randal ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
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Nos. 02-3191 & 02-3263
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
RANDALL A. RETTENBERGER and
JULIE L. RETTENBERGER,
Defendants-Appellants.
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Appeals from the United States District Court for the
Northern District of Illinois, Western Division.
No. 01 CR 50016—Philip G. Reinhard, Judge.
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ARGUED SEPTEMBER 11, 2003—DECIDED SEPTEMBER 25, 2003
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Before FLAUM, Chief Judge, and POSNER and
EASTERBROOK, Circuit Judges.
EASTERBROOK, Circuit Judge. A jury concluded that
Randall Rettenberger and his wife Julie were partners in
a scheme to defraud insurers, plus the Social Security
Administration, by pretending that Randall was disabled.
The payments that rolled in were sizable, as Randall had
taken out more than a dozen policies and had enjoyed a
substantial legitimate income before the supposed onset of
disability. Julie filled out most of the forms submitted to
2 Nos. 02-3191 & 02-3263
insurers and the federal government for use in assessing
Randall’s claim, and she related that Randall had been
turned into a couch potato who could do nothing but sit,
smoke cigarettes, and watch television—while she knew
that Randall was well enough to act as the developer of a
residential subdivision, take an 8-day motorcycle trip in
Mexico, go on whitewater rafting expeditions (one of which
lasted 18 days), and use weapons (Randall hunted and shot
a 7-point buck). Randall also went skiing in Aspen and
drove the family car on trips to Acapulco, Arizona, and
Nevada. Both Rettenbergers were sentenced to 57 months’
imprisonment for mail fraud, defrauding the federal gov-
ernment, and 45 other counts.
The evidence permitted rational jurors to find guilt be-
yond a reasonable doubt. Although defendants contend
that Randall had “good days” when he could function well,
they do not establish how he could be unable to work yet
perform real estate development activities, spend weeks on
the Colorado and Salmon Rivers, barrel down mountains on
skis, and drive cars and motorcycles for extended stretches,
without encountering bad days or bad hours, nor does it ex-
plain why these activities were not reported to the insurers
or the physicians who had diagnosed him as disabled.
Julie told insurers that Randall suffered from a mental
disability caused by a fall in January 1995. (Whether the
fall was genuine or staged is disputed.) When state troopers
and an ambulance arrived, the Rettenbergers refused to
allow Randall to be examined and drove off; he did not seek
immediate medical attention. But in March 1995 Julie
submitted claims under 14 policies of disability insurance
and started the process of obtaining Social Security disabil-
ity benefits. The forms described the disabling condition
as “head trauma,” “slow thought limits work functions,” and
the like. Randall’s physician, Dr. Basile Lambos, signed
forms certifying him as disabled because of “inability to
concentrate” even though none of Lambos’s tests (such as
Nos. 02-3191 & 02-3263 3
a MRI scan) had shown any abnormality. Some insurers
wanted more, and to satisfy them Julie submitted the
diagnosis of Dr. James Kelly, a neurologist affiliated with
Northwestern University. Kelly diagnosed Randall as suf-
fering from “post-concussion syndrome” that impaired
his ability to think, remember, concentrate, and speak.
Kelly’s diagnosis was influenced by the history that Julie
Rettenberger submitted and by Randall’s hesitant, slurred,
and sometimes incoherent speech when he appeared in
person (symptoms that, a jury sensibly could conclude,
Randall had affected). Randall also submitted a report
by Dr. Gerald Hoffman, a psychiatrist, who concluded that
Randall’s consciousness is too clouded to permit effective
functioning. Hoffman’s diagnosis was based on Randall’s
failure to respond to many of his questions (and his weird
responses to others), and by Julie’s report that Randall did
nothing all day except smoke and watch TV. Once again, the
jury could conclude that the diagnosis was based on fraud-
ulent reports and thespian performances: garbage in, gar-
bage out.
Most insurers, and the Social Security Administration,
accepted these diagnoses and started paying benefits. But
one insurer smelled a rat and hired a private investigator,
who found Randall out and about (not only driving, rafting,
shooting, and skiing, but also participating, without any
apparent impairment, in a hearing about zoning changes
for his subdivision). This insurer also sent Randall to Dr.
Jesse Viner, a psychiatrist. (Till then, Randall and Julie
had selected all the physicians; jurors sensibly could have
concluded that they refused the paramedics’ offer of assist-
ance in January 1995 because they could not have deter-
mined which physicians would examine Randall.) Randall’s
behavior during the interview with Viner was so odd that
he required Randall to take the Minnesota Multiphasic
Personality Indicator to get a better handle on his men-
tal state. Dr. Alex Caldwell evaluated Randall’s responses
4 Nos. 02-3191 & 02-3263
to the MMPI as atypical, likely the result of either “acute
panic” or deceit. For example, Randall reported suffering
delusions, which are not effects of concussions, more often
than bona fide paranoid schizophrenics do. Caldwell told
Viner that Randall’s pattern of responses prevented use of
the MMPI to ascertain his true mental status, but that the
results were consistent with malingering. Viner interviewed
Randall again and detected suspicious patterns in his
verbal errors and hesitations. From there everything
unraveled.
Defendants’ lead argument on appeal is that the district
judge hobbled their ability to obtain exculpatory evidence
from Dr. Kelly when the judge prevented Kelly from telling
the jury why he did not agree with Dr. Viner, Dr. Caldwell,
and Dr. Jeri Morris (a neuropsychologist who followed up on
Viner’s findings and conducted an independent analysis)
that Randall is faking his symptoms. The judge blocked
this testimony because defense counsel had not disclosed
before trial that they would ask Kelly about his evaluation
of other physicians’ assessments—though they did disclose
that Kelly would explain and support his own diagnosis.
The rule in question, Fed. R. Crim. P. 16(b)(1)(C), says that
if (at defense request) the prosecution discloses details of
expected expert testimony, then the defense must do so too,
revealing “the witness’s opinions, the bases and reasons
for those opinions, and the witness’s qualification”. (At
the time of trial, this was Rule 16(d)(1)(C); the subsequent
changes in numbering and language are not material.) The
rule requires “a summary of the expected testimony, not
a list of topics.” United States v. Duvall, 272 F.3d 825, 828
(7th Cir. 2001). The Rettenbergers contend that, by requir-
ing a witness who disclosed before trial that he will support
proposition X, also to state that he will disagree with
persons who have concluded not-X, the district court has
required a pointless exercise and unduly weakened Kelly’s
testimony (for a jury may discount the conclusions of an
Nos. 02-3191 & 02-3263 5
expert witness who has failed to consider divergent views).
Whether pretrial disclosure would have been senseless
depends on what Kelly would have said, had he been
allowed to answer the questions. If Kelly planned to do
nothing more than reiterate his own diagnosis, then further
disclosure would have been a waste of time. But if Kelly had
scientific reasons for thinking that Viner, Caldwell, and
Morris used unreliable techniques, or implemented good
techniques in slipshod ways, then disclosure could have
been valuable. It would have enabled the prosecutor (who
is no medical expert) either to ask Viner, Caldwell, and
Morris about those points before trial, or to engage another
expert to evaluate Kelly’s contentions. Yet we do not know
what reasons Kelly would have given, because defense
counsel did not make an offer of proof. That scuttles their
position, for “[e]rror may not be predicated upon a ruling
which admits or excludes evidence unless a substantial
right of the party is affected, and . . . [i]n case the ruling is
one excluding evidence, the substance of the evidence was
made known to the court by offer or was apparent from the
context within which questions were asked.” Fed. R. Evid.
103(a)(2). Kelly’s bottom line may have been “apparent from
the context within which [the] questions were asked”, but
the “substance” of his potential testimony was not (and is
not) known. Cf. United States v. Vest, 116 F.3d 1179, 1189
(7th Cir. 1997) (offer of proof unnecessary if the substance
of the excluded testimony may be found in the record). The
district court’s ruling therefore may not be disturbed.
Likewise the judge was entitled to prevent evasion of this
ruling by sustaining an objection to the use of Kelly as a
conduit to introduce the opinion of a non-testifying expert
on a subject foreclosed (to Kelly) by the lack of pretrial
disclosure. Nor did the judge commit plain error in inform-
ing the jury that the objection to Kelly’s testimony had been
sustained “on the basis of lack of disclosure”. Although
6 Nos. 02-3191 & 02-3263
jurors might have interpreted this as denigrating Kelly—
the statement does not reveal who was responsible for the
shortcoming—the judge doubtless would have cleared up
the ambiguity if counsel had pointed it out, which they did
not.
Another of defendants’ evidentiary contentions is that the
district judge erred by excluding, as hearsay, the contents
of a tape recording. During the investigation, an agent pos-
ing as a Social Security worker interviewed Randall about
his status. Randall spoke haltingly and disclaimed any
ability to concentrate or exercise good judgment, even in
household activities. Along the way, Randall mentioned
that he had tried to be useful in a real estate development
project that some friends were running, though he also
said that his confusion had hindered his efforts to assist.
Randall wanted to put this taped conversation into evidence
to show that, contrary to the prosecution’s contentions, he
had revealed his involvement in the development.
It is not clear that the tape was relevant for the purpose
Randall had in mind. It does not show a proper disclosure
(in the administrative process), let alone a timely or candid
one; Randall portrayed himself as a hanger-on apt to do
more harm than good (a position supporting his claim to be
disabled) rather than as the principal developer of the sub-
division. But the district judge did not exclude the tape
under Fed. R. Evid. 402; he held instead that it was hearsay
that must be excluded under Rule 802. That was a mis-
taken assessment. Randall did not offer these aspects of the
conversation as out-of-court statements “to prove the truth
of the matter asserted”—the definition of hearsay, see Rule
801(c). He offered them not to show that he was a bumbling
camp follower to the project, but to show that he had men-
tioned the development at all and thus belatedly had
alerted the Social Security Administration to a fact missing
from his application for disability benefits. That was not
Nos. 02-3191 & 02-3263 7
a hearsay use. Still, the judge was right to sustain the
objection, because Randall offered the whole tape, not just
the portion dealing with the real estate development. The
remainder of the tape was full of Randall’s descriptions of
his limited abilities, which could have been relevant only for
the truth of Randall’s narration. Playing the full tape for
the jury would have been equivalent to permitting Randall
to testify without cross-examination. (He did not take the
stand at trial.) When the prosecutor objected, counsel did
not propose to redact the tape. The district judge’s handling
of this matter thus does not undermine the judgment.
Unlike Randall, Julie did testify. When she was done,
Randall’s lawyer sought to cross-examine her. The district
judge said no, because he viewed Julie as a witness favor-
able to Randall’s position. Counsel’s vow to forswear the
usual tools of cross-examination (argumentative and lead-
ing questions) did not move the judge to change his mind.
Randall now insists that some of Julie’s testimony was ad-
verse to his interests, and that he was therefore entitled to
cross-examine Julie under the sixth amendment’s right to
confront one’s accusers. Julie testified, for example, that
Randall went hunting, and that the couple jointly decided
to take out some of the disability policies only a short time
before Randall’s fall, which could imply that acquisition of
the policies was part of a fraudulent scheme. (The testi-
mony hurt Julie too: the jury did not believe it, and the
judge added two levels to her sentence after concluding that
she obstructed justice by committing perjury.) Thus Randall
had a constitutional entitlement to examine Julie under
oath. But a court is entitled to determine when this should
occur. The judge must have thought that the jury would
gain a clearer understanding if Randall’s lawyer examined
Julie during Randall’s portion of the case. In other words,
the judge postponed, but did not preclude, Randall’s ex-
amination of Julie. This was a sensible decision, enabling
each of the defendants to make a more focused presentation
8 Nos. 02-3191 & 02-3263
(running three weeks, this was already a lengthy trial) and
helping the jury to see that in the main Julie’s testimony
was favorable to Randall, even though it may have shored
up the prosecution’s case in some respects. When the time
came for Randall to present a defense, however, his lawyers
elected not to put Julie back on the stand. That decision,
like one to forgo cross-examination of a witness for the pros-
ecution, was a legitimate defense option. Randall had the
rights granted by the sixth amendment—the opportunity to
confront Julie during trial and to have compulsory process
to produce evidence in defense—and chose not to use them.
In closing argument, the prosecutor lampooned the
Rettenbergers’ defense as a contention that Randall had
what the prosecutor labeled a “magical mystery disease.”
The point was that the clouds in Randall’s mind cleared
whenever he wanted to ski, raft, hunt, drive, or develop real
estate, but returned whenever he saw a physician or con-
templated employment. The phrase “magical mystery dis-
ease,” used to encapsulate the line of argument, could be
understood as inviting the jurors to take an anti-intellectual
stance and reject medical testimony just because the jurors
believe a particular set of symptoms unlikely, or because
the syndrome does not have a Latin name or an associated
drug. Strip out the phrase, however, and the logic remains:
even if bewilderment or vocal slurring comes and goes
(many people with brain injuries have lucid periods), the
timing of Randall’s competent and confused states was just
too convenient. One unfortunate phrase after a three-week
trial does not turn jurors’ heads; it is hard to believe that
any juror who had paid attention to the testimony and
instructions could have been switched onto a bad track by
this turn of phrase. The district court’s decision overruling
the defense objection to the use of this phrase, if it was
error, was harmless.
As for the sentences: each withstands the Rettenbergers’
Nos. 02-3191 & 02-3263 9
appellate arguments.
When calculating the intended loss (that is, the loss
the insurers would have suffered if the Rettenbergers
had not been caught, see U.S.S.G. §2B1.1 Application
Note 2(A)(ii)(I)), the district judge assumed that Randall
would have continued faking disability until he reached
65, the age at which most policies’ coverage ended. The
Rettenbergers complain that this is not supported by any
evidence, but we do not see why evidence beyond the facts
of the crime and the terms of the policies was needed.
Randall set out to take the insurers for all they were
worth, and that meant benefits through age 65. What
would have induced him to disclaim benefits earlier? The
Rettenbergers have no answer to that question, which
means that the district court did not commit a clear error.
See United States v. Haber, 251 F.3d 881, 992-93 (10th Cir.
2001).
The district judge increased each defendant’s offense lev-
el by two after concluding that “sophisticated means” had
been used to bilk the insurers. According to U.S.S.G.
§2B1.1(b)(8)(C) Application Note 6, and its predecessor
§2F1.1(b)(6)(C) Application Note 18 (2000), means are
“sophisticated” when they entail “especially complex or
especially intricate offense conduct pertaining to the exe-
cution or concealment of an offense.” The Rettenbergers
depict their scheme as a simple lie, but it was significantly
more detailed. Fooling a skilled neurologist and 14 insurers
requires intricate maneuvers. The Rettenbergers had to
present a picture consistent with the injury Randall sup-
posedly suffered: Julie had to describe the conduct both
in writing and in interviews with physicians, and Randall
had to mimic it on demand. Careful execution and coordina-
tion over an extended period enabled the Rettenbergers to
bilk more insurers and reduce the risk of detection. That
Randall eventually slipped up, and that the deception was
10 Nos. 02-3191 & 02-3263
caught as a result of his errors plus the private investi-
gation, does not make the scheme any the less complex. The
district judge did not commit a clear error in concluding
that this scheme meets the Guidelines’ definition of sophis-
tication.
Finally, Randall objects to the judge’s decision to sentence
him at the top of the 46 to 57 month range prescribed by
the Guidelines’ cross-table. The judge concluded that Julie
obstructed justice by lying on the stand (a decision not
contested on appeal). As he believed that the Rettenbergers
were partners in fraud, he also believed that they were
partners in this attempt to deceive the jury. Instead of
adding two levels to Randall’s offense severity, the district
judge elected to sentence Randall at the top of a range that
had been calculated without an obstruction-of-justice en-
hancement. Randall contends that neither a direct nor an
indirect means to hold him accountable for Julie’s perjury
is appropriate, but this contention is not open to appellate
review. The district court imposed a sentence within a
properly determined range, and as the range did not exceed
24 months the judge had discretion to select a sentence
without needing to justify the choice to the court of appeals.
See 18 U.S.C. §3553(c)(1). A sentence within a properly
determined range does not violate any legal rule and thus
does not justify reversal. See 18 U.S.C. §3742(a). A judge
who did not need to give a reason, but volunteered a legally
forbidden one such as race or an irrational reason, would
reveal a violation of law, and we would have authority to
remand for resentencing. But no rule of law (and no pro-
vision in the Guidelines) forbids a judge to hold one defen-
dant accountable for another’s misconduct that was con-
ducted according to their mutual plan. Whether such a plan
actually existed is not a question of law that would support
appellate review of an in-range sentence.
AFFIRMED
Nos. 02-3191 & 02-3263 11
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-25-03