Filed: Nov. 02, 2017
Latest Update: Mar. 03, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 17-1044 _ UNITED STATES OF AMERICA v. ROSE UMANA, Appellant _ On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Criminal Action No. 1-14-cr-00151-001) District Judge: Honorable Sylvia H. Rambo _ Argued September 27, 2017 Before: AMBRO and KRAUSE, Circuit Judges, and CONTI, District Judge.* (Opinion Filed: November 2, 2017) Jeremy B. Gordon Brandon C. Sample [ARGUED] Jeremy Gord
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 17-1044 _ UNITED STATES OF AMERICA v. ROSE UMANA, Appellant _ On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Criminal Action No. 1-14-cr-00151-001) District Judge: Honorable Sylvia H. Rambo _ Argued September 27, 2017 Before: AMBRO and KRAUSE, Circuit Judges, and CONTI, District Judge.* (Opinion Filed: November 2, 2017) Jeremy B. Gordon Brandon C. Sample [ARGUED] Jeremy Gordo..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 17-1044
___________
UNITED STATES OF AMERICA
v.
ROSE UMANA,
Appellant
____________________________________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal Action No. 1-14-cr-00151-001)
District Judge: Honorable Sylvia H. Rambo
____________________________________
Argued September 27, 2017
Before: AMBRO and KRAUSE, Circuit Judges, and CONTI, District Judge.*
(Opinion Filed: November 2, 2017)
Jeremy B. Gordon
Brandon C. Sample [ARGUED]
Jeremy Gordon
Suite 106
1848 Lone Star Road
Mansfield, TX 76063
Counsel for Appellant
*
Honorable Joy Flowers Conti, Chief District Judge for the United States District Court
for the Western District of Pennsylvania, sitting by designation.
Stephen R. Cerutti, II [ARGUED]
Office of United States Attorney
228 Walnut Street, P.O. Box 11754
220 Federal Building and Courthouse
Harrisburg, PA 17108
Counsel for Appellee
_________
OPINION**
___________
KRAUSE, Circuit Judge
Rose Umana challenges the amount of restitution ordered in her criminal judgment
after her conviction for health care fraud offenses. For the following reasons, we
conclude that her challenges are unpersuasive, and we will affirm the District Court’s
judgment.
I. Background
Umana was charged with several offenses related to health care fraud in
connection with her operation of Vision Healthcare Services, Inc. (“Vision”), a medical
staffing company and homecare services provider that was approved to receive Medicaid
compensation. She eventually pleaded guilty to one count of making false statements or
using false writings under 18 U.S.C. § 1035(a)(2); one count of identity theft in relation
**
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
2
to the 18 U.S.C. § 1035(a)(2) violation; and one count of engaging in monetary
transactions using criminally derived property in violation of 18 U.S.C. § 1957. 1
The Government sought restitution for the Pennsylvania Medical Assistance
Program (“Medicaid”), the victim of the crimes. The Government derived Medicaid’s
total loss amount, which forms the basis for the restitution order, from two separate
investigations, one by the Pennsylvania Department of Human Services Bureau of
Financial Obligations (“the BFO audit”), supporting a $674,996.31 loss, and one by
Medicare Fraud Control Unit (“the MFCU audit”), supporting a $441,806.12 loss. As a
result of these calculations, a total restitution figure of $1,116,802.43 was included in the
Probation Office’s presentence investigation report (“PSR”).
Umana objected to this restitution figure on two grounds. Through her expert,
David H. Glusman, Umana argued, first, that the Government misreported the amount
actually calculated in the BFO audit by $9,361.27, and, second, that it improperly
included Medicaid payments for legitimate services provided to Vision clients totaling
$115,837.00 in relation to the BFO audit and $228,399.03 in relation to the MFCU audit.
At the hearing on these objections, counsel for the Government explained that the
Government did not dispute the “change figures” related to the BFO audit. Appendix
(“App.”) 56. That is, the Government agreed that $9,361.27 and $115,837.00 should not
have been included in the restitution calculation, and stated at one point that it was “not
1
Among other things, her plea agreement included the following provision: “[w]ith
respect to the application of the Sentencing Guidelines to [Umana’s] conduct, the parties
agree to recommend that the amount of loss attributable to [Umana] is more than
$1,000,000 and less than $2,500,000.” Plea Agreement 10, ¶ 13.
3
disputing those amounts proposed by the Defendant for purposes of the BFO audit,” App.
61-62. However, the Government did dispute Umana’s proposed $228,399.03 reduction
in relation to the MFCU audit, and it substantiated that amount through, among other
things, the testimony of two witnesses: Jennifer Snerr, an MFCU supervisory special
agent, who testified about timesheets for services for the patients and Umana’s
falsification of employee records and fabrication of documents; and Carol Palinkas, a
fraud auditor with the Medicaid Fraud Control Section, who testified about the
documentation requirements and her analysis of the claims submitted monthly for the
patients in the relevant time period.
The Government also argued that the loss amount for which it advocated was
conservative given that the MFCU audit focused on the claims of six patients over a finite
period whereas Umana had approximately 150 clients during that time and had been in
business since 2006. While Umana’s counsel secured from Snerr on cross-examination
the admissions that “of that 150, [she] limited [her] review in the criminal sense of those
6 cases you testified about,” and that she “d[id]n’t have any information here today that
any of the other 150 cases have any fraudulent billings or any issues with respect to
fraud,” App. 70, Snerr also affirmed that there were “additional clients identified during
the BFO audit . . . with additional billing issues.” App. 87.
4
After further briefing,2 the District Court overruled Umana’s objections and ruled
that Umana owed the amount requested by the Government.3 The District Court
concluded that the Government had met its burden to show the amount of loss, and
Umana had not shown that she was entitled to any offset. The District Court further
noted that “based on the evidence presented during the loss hearings and the
pervasiveness of the fraud, the loss figure as calculated by the Government understates
the total actual loss.” App. 16. The District Court then stated that, “although some small
amount of the services provided with regard to the six patients may have been
reimbursable . . . , [Umana] is not entitled to a credit against the restitution amount due to
the understatement of the loss.” App. 16. Thus, in Umana’s criminal judgment, the
District Court included an order of $1,184,224.67 in restitution under the Mandatory
Victims Restitution Act of 1996, 18 U.S.C. §§ 3613A, 3663A (“MVRA”). This appeal
followed.
II. Jurisdiction and Standard of Review
The District Court had jurisdiction pursuant to 18 U.S.C. § 3231, and we have
jurisdiction under 18 U.S.C. § 3742 and 28 U.S.C. § 1291. We “review a restitution
2
Umana proposed that the entire restitution amount be reduced by 52% based on the
problems that Glusman found in the calculation of the amount related to the MFCU audit.
The District Court concluded “[s]uch a reduction is mere speculation, not supported by
any evidence, and would be counter to the court’s finding that the total loss in this case
has been understated.” App. 19. That ruling is not at issue on appeal.
3
The restitution amount included an additional $192.389.51 that the Government
requested for the first time at the hearing, and that is not contested on appeal.
5
order under a bifurcated standard: plenary review as to whether restitution is permitted by
law, and abuse of discretion as to the appropriateness of the particular award.”4 United
States v. Fallon, 470 F.3d 542, 548 (3d Cir. 2006) (citation and quotation marks omitted).
The District Court’s fact-finding is reviewed for clear error, meaning that we consider
whether it is “completely devoid of a credible evidentiary basis or bears no rational
relationship to the supporting data.” See United States v. Vitillo,
490 F.3d 314, 330 (3d
Cir. 2007) (citation and quotation marks omitted).
4
Given the stipulation and waiver in her plea agreement, Umana’s appeal is necessarily
limited to the amount of the restitution order and not her offense level under the
Sentencing Guidelines. Plea Agreement 10, ¶ 13; Transcript of Guilty Plea at 6:16-20,
8:18-23 (ECF No. 104); Recording of Oral Argument at 8:35-38 (17-
1044USAvUmana.mp3 available at http://www.ca3.uscourts.gov/oral-argument-
recordings); see United States v. Williams,
510 F.3d 416, 422 (3d Cir. 2007) (“When a
defendant stipulates to a point in a plea agreement, he is not in a position to make . . .
arguments [to the contrary].”) (citation and quotation marks omitted).
6
III. Discussion
The calculation of restitution is governed by the MVRA, which requires a court to
order restitution for the “full amount” of the victim’s loss. 18 U.S.C. § 3664(f)(1)(A);
see also United States v. Bryant, 655 F.3d 232, 254 (3d Cir. 2011). Where the defendant
disputes the proper amount or type of restitution, the district court resolves that dispute
“by the preponderance of the evidence.” 18 U.S.C. § 3664(e). As for who bears the
burden with regard to that evidence, the MVRA provides that “[t]he burden of
demonstrating the amount of the loss sustained by a victim as a result of the offense shall
be on the attorney for the Government,” while “[t]he burden of demonstrating such other
matters as the court deems appropriate shall be upon the party designated by the court as
justice requires.”
Id.
On appeal, Umana challenges the restitution calculation on three grounds. First,
she argues that the District Court used the wrong burden-shifting framework in deciding
the restitution amount. Second, she contends that it legally erred in finding that the
amount of loss and restitution understated or underestimated the total loss where the
actual loss was measurable. Third, she maintains that the District Court clearly erred in
finding that its loss figure understated the total loss because the Government stipulated to
Umana’s loss figure for the BFO audit and offered testimony that it had no evidence of
fraud beyond that relating to the six consumers in the MFCU audit.
7
A. Burden-Shifting Framework
Umana’s first argument is that the District Court did not use the proper burden-
shifting framework in assessing the amount of loss in calculating the restitution award.
Specifically, she contends that the District Court improperly placed the ultimate burden
on her, rather than the Government, to prove actual loss, and that, pursuant to United
States v. Evans, 155 F.3d 245, 253 (3d Cir. 1998), and United States v. Raven,
39 F.3d
428, 434-35 (3d Cir. 1994), once she cast doubt on the total restitution figure,5 the
District Court should have shifted the burden back to the Government to show that the
offsets she claimed for legitimate services should not be credited against the loss.
We see no error in the District Court’s allocation of the burden. Neither Evans nor
Raven concerned the calculation of restitution. Evans considered loss as it related to a
sentencing enhancement, 155 F.3d at 253, and Raven dealt with determining the weight
of drugs to be attributed to a defendant for sentencing
purposes, 39 F.3d at 432, 434-35.
This case, however, is governed by United States v. Bryant, where we explained, “with
respect to an offset for services rendered, . . . that, because ‘[t]he restitution statute
allocates the various burdens of proof among the parties who are best able to satisfy those
burdens[,] . . . the defendant should know the value of any [legitimate services] he has
already provided to the victim[, and so] . . . the burden should fall on him to argue for a
reduction in his restitution
order.’” 655 F.3d at 254 (citations omitted).
5
She cites, for instance, the agreed-to $115,837.00 offset for legitimate services related
to the BFO audit.
8
Thus, to the extent that the District Court placed the burden of proof on Umana, it
was consistent with our case law. It also was consistent with the MVRA, which puts on
“the party designated by the court as justice requires” the “burden of demonstrating such
other matters as the court deems appropriate,” 18 U.S.C. § 3664(e), which, in our view,
includes offsets for any legitimate services that were rendered.
B. Estimation of Loss
Umana next contends that the District Court erred by finding that the amount of
loss and restitution underestimated the total loss where the true loss was measurable.
We have held that a “loss calculation should represent the fraud victim’s actual
loss,” and that a district court cannot rely on an alternative estimate where the loss is
measurable. See United States v. Dickler, 64 F.3d 818, 826 (3d Cir. 1995). Here,
however, the District Court did not rely on something different than the actual loss
amount. Indeed, it based the restitution award on the evidence that the Government
presented in support of the PSR and at the hearing and its determination that Umana did
not present credible evidence to meet her burden to show that she was entitled to any
offsets to, or credits against, that loss.
We review that determination for clear error and find none. The District Court
concluded that the Government met its initial burden of establishing the amount of loss
and that Umana’s evidence was insufficient to show that legitimate services were
rendered to offset the amount. In so concluding, the District Court accepted the
Government’s witness testimony as reliable and noted that the timesheets and nursing
notes reviewed by the witnesses showed gross inadequacies and fraud. In determining
9
that Umana was not entitled to any offset for the value of legitimate services provided to
her patients, the District Court observed, inter alia, that although Glusman identified
what he believed were legitimate services, Umana’s documentation was unreliable. In
view of the evidence, we cannot say that its determination was “completely devoid of a
credible evidentiary basis.” See Vitillo, 490 F.3d at 330 (quotation marks and citation
omitted).
C. Underestimation of Loss
Finally, Umana contends that the District Court clearly erred in finding that the
loss figure underestimated the total loss because the Government allegedly (1) stipulated
to Umana’s loss figure for the BFO audit, and (2) conceded, through Snerr’s testimony,
that it had no evidence of fraud beyond that relating to the six patients whose files were
reviewed in the MFCU audit.
As a threshold matter, it is not clear that the District Court relied on a finding that
the loss figure underestimated the total loss. Although it opined that “some small amount
of the services provided with regard to the six patients may have been reimbursable . . . ,
[Umana] is not entitled to a credit against the restitution amount due to the
understatement of the loss,” App. 18. Moreover, the District Court made this statement
after having already rejected Umana’s claim for a credit because her documentation was
“almost entirely unreliable,” App. 16.
Even if the District Court did rely on such a finding, however, there is no basis for
reversal or remand on this record, as we see no merit in either of Umana’s arguments.
First, she asserts that the loss amount could not have been an underestimation given the
10
Government counsel’s statement that the Government was “not disputing those amounts
proposed by the Defendant for purpose of the BFO audit.” App. 61-62. We disagree. In
context, and particularly in light of counsel’s more specific statements that the
Government was not disputing the “change amounts,” App. 56-57, the District Court
reasonably concluded that the Government’s statement meant only that the Government
agreed that the initially proposed restitution amount should be reduced by $9,361.27 and
$115,837.00. Accordingly, the District Court could consider the degree of fraud found in
the BFO audit, in addition to that found in the MFCU audit, to substantiate an
understatement or underestimation of loss.
Second, although Snerr testified that she did not have any evidence of fraud in
cases beyond the six reviewed in the MFCU audit, she did not state that she had evidence
that there was no fraud. On the contrary, she testified that there were “additional clients
identified during the BFO audit . . . with additional billing issues,” App. 87, and
described egregious problems with record-keeping discovered in both the MFCU audit
and the BFO audit, supporting the notion that the losses associated with MFCU audit
were illustrative, not exclusive.
IV. Conclusion
For the foregoing reasons, we will affirm the District Court’s judgment.
11
