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United States v. Ainabe

United States Court of Appeals, Fifth Circuit

September 13, 2019

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
MERCY O. AINABE, Defendant-Appellant.

          Appeal from the United States District Court for the Southern District of Texas

          Before Smith, Dennis, and Owen, Circuit Judges.

          Priscilla R. Owen, Circuit Judge:

         Mercy Ainabe was convicted of several health-care-related offenses in connection with recruiting and transporting individuals to Texas Tender Care (TTC) for treatment. At sentencing, the district court considered Ainabe's similar conduct at two other companies-Gulf EMS, LLC (Gulf) and Gifter Medical Services (Gifter)-and considered the amounts billed by all three of these companies in calculating the "loss" for sentencing purposes. Ainabe challenges the district court's application of (1) a two-level enhancement under § 2B1.1(b)(2)(A)(i) of the Guidelines for offenses involving more than ten victims; (2) an eighteen-level increase under § 2B1.1(b)(1)(J) for losses of more than $3.5 million; and (3) an increase of three levels under § 2B1.1(b)(7)(B)(ii) for a loss to a government healthcare program of more than $7 million. We affirm.

         I

         Gulf, an ambulance service owned and operated by Mercy Ainabe and her husband, began operating in 2003. Gulf transported residents from group homes to and from partial hospitalization programs (PHPs).

         Gulf falsely classified those group-home patients to justify their transportation via ambulance. Gulf submitted billings to Medicare for those transportation expenses, even though it often double-loaded residents into a single ambulance or transported them in private vehicles. Gulf also transported ambulatory dialysis patients and submitted false claims stating the patients were non-ambulatory. Gulf submitted approximately $4.3 million in claims from January 2007 through April 2010. Medicare paid approximately $1.1 million on the claims submitted by Gulf.

         In April 2010, Ainabe enrolled Gifter as a Medicare provider. Although Gifter claimed to be a diagnostic testing company, evidence suggests that, like Gulf, it transported patients to and from PHPs. For example, Gifter received checks from a PHP identified as "Pristine Healthcare" under the name "Gifter Transport," and Ainabe signed a certification stating that Gifter was "bringing . . . patients to [Pristine] for their group therapies and medical treatments." A Medicare contractor audit determined that Gifter presented false claims. From October through December of 2010, Gifter submitted approximately $300, 000 in claims to Medicare. Medicare paid approximately $200, 000 on those claims.

         In September or October of 2010, Ainabe contacted Magdalene Akharamen, a social acquaintance who owned TTC, a home healthcare agency. Ainabe told Akharamen that "what she [Ainabe] does is refer patients to agencies," including home healthcare agencies and PHPs, and that she had "been doing this recruiting business for a while." Ainabe explained "the way she operated" to Akharamen. Ainabe said she referred patients to a provider and paid for all of the services received by the patients (nursing services, physician services, etc.). The provider then billed Medicare. When the provider was paid by Medicare, it reimbursed Ainabe for the payments she had made. The remaining funds from the Medicare payment-the "profit," as Akharamen described it-were then split evenly between Ainabe and the provider.

         Akharamen agreed to this arrangement, and Ainabe began working with TTC. Ainabe caused TTC to grow "a lot." Ainabe recruited patients for TTC from group homes even though many of those patients did not qualify for home healthcare services. Further, many of the services for which TTC billed Medicare were never actually provided to patients. Between August 2011 and August 2015, TTC billed Medicare approximately $3.6 million for home healthcare services. Medicare paid approximately $3.2 million on those claims.

         The Government charged Ainabe with seven counts stemming from her relationship with TTC: one count of conspiracy to commit healthcare fraud, [1]five counts of healthcare fraud, [2] and one count of conspiracy to pay healthcare kickbacks.[3] A jury convicted Ainabe on all counts.

         Based on the information contained in a Presentence Report (PSR), the district court applied several sentencing enhancements. Over Ainabe's objections, the district court added (1) two levels under § 2B1.1(b)(2)(A)(i) of the Guidelines because the offense involved more than ten victims; (2) eighteen levels under § 2B1.1(b)(1)(J) because the loss was more than $3.5 million; (3) three levels under § 2B1.1(b)(7)(B)(ii) because there was more than $7 million in loss to a government healthcare program; and (4) two levels under § 3B1.3 because Ainabe's criminal conduct violated the public trust.[4] With a base offense level of six and a criminal history category of I, those enhancements brought Ainabe's Guidelines range to 108 to 135 months of imprisonment.[5] The district court sentenced Ainabe to 108 months.

         Ainabe appeals, contending that the district court erred when it imposed the enhancements because it (1) used an incorrect definition of victims, (2) considered Ainabe's actions on behalf of Gulf and Gifter as relevant conduct, and (3) relied on the amounts billed to Medicare to calculate intended loss.

         II

         Ainabe argues that the district court erred when it concluded that her offense involved ten or more victims and consequently merited a two-level enhancement under § 2B1.1(b)(2)(A)(i).[6] According to Ainabe, her offense did not involve ten or more victims because the many Medicare beneficiaries implicated in her offense "did not spend any of their own money on their care." However, as Ainabe concedes, that argument is foreclosed by United States v. Barson, which held that "Application Note 4(E) of U.S.S.G. § 2B1.1 defines 'victim' in a way that encompasses . . . Medicare beneficiaries because it includes 'any individual whose means of identification was used unlawfully or without authority.'"[7] Therefore, the district court did not err when it imposed the two-level enhancement under § 2B1.1(b)(2)(A)(i).

         III

         The district court imposed an eighteen-level enhancement pursuant to § 2B1.1(b)(1)(J) of the Guidelines based on its conclusion that the relevant conduct involved a "loss" of more than $3.5 million.[8] The district court also imposed a three-level enhancement under § 2B1.1(b)(7)(B)(ii) based on its conclusion that the relevant conduct involved a "loss" of more than $7 million to a government healthcare program.[9] In reaching those conclusions, the district court considered the amounts billed to Medicare by TTC (approximately $3.6 million), Gulf (approximately $4.3 million), and Gifter (approximately $300, 000).

         Ainabe contends that the district court erred by considering the frauds perpetrated in conjunction with Gulf and Gifter as relevant conduct. Section 1B1.3(a)(2) of the Guidelines provides that the "relevant conduct" that a district court should consider when applying the Guidelines includes "all acts and omissions . . . that were part of the same course of conduct or common scheme or plan as the offense of conviction."[10] "For two or more offenses to constitute part of a common scheme or plan, they must be substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi."[11]

         The district court found that "the fraudulent claims submitted to Medicare by Gulf EMS and Gifter were part of the same scheme or plan as the offenses of conviction." A district court's determination of what constitutes relevant conduct for sentencing purposes, including what acts and omissions are part of a common scheme or plan as the offense of conviction, is a factual finding that this court reviews for clear error.[12] "A factual finding is not clearly erroneous if it is plausible in light of the record read as a whole."[13]

         Ainabe stresses two types of factual differences among the three frauds: the services provided by the companies and the time periods during which the fraudulent claims were submitted. She also argues that the district court improperly considered evidence beyond what was introduced at trial.

         A

         Gulf was an ambulance company, Gifter purported to provide diagnostic testing, and TTC was a home healthcare agency. However, the fraud accomplished through each company began with Ainabe's contacts at group homes, PHPs, and home healthcare agencies. Gulf submitted fraudulent bills for transporting residents of group homes to PHPs. The record indicates that Gifter also submitted fraudulent bills for transporting patients to PHPs for group therapy. TTC, a home healthcare agency, similarly benefited from Ainabe's relationship with group homes, the source of many of the unnecessary referrals to TTC. Each business submitted fraudulent bills for Medicare services purportedly provided to Medicare beneficiaries recruited through Ainabe's connections with group homes then pocketed the difference between the amount reimbursed by Medicare and the amount it had paid for the services actually provided. Given these similarities, it is at least plausible that the three frauds were "substantially connected to each other by at least one common factor, such as common victims, . . . common purpose, or similar modus operandi."[14] Therefore, the district court did not clearly err when it found that Gulf, Gifter, and TTC submitted fraudulent claims to Medicare as part of a common scheme or plan.

         B

         Ainabe also insists that her actions on behalf of Gulf and Gifter do not have the requisite temporal proximity to qualify as relevant conduct. The district court concluded that the frauds perpetrated at Gulf and Gifter were relevant conduct under § 1B1.3(a)(2), which instructs district courts to consider "all acts and omissions described in subdivisions 1(A) and 1(B) above that were part of the same course of conduct or common scheme or plan as the offense of conviction."[15] Ainabe seems to argue that § 1B1.3(a)(2) incorporates the last segment of § 1B1.3(a)(1), thereby limiting the acts that can be considered under § 1B1.3(a)(2) to those "that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense."[16]

         We rejected this argument in an unpublished opinion. In United States v. Valenzuela-Contreras, we noted that "[t]he plain language of § 1B1.3(a)(2) only refers to (1)(A) and (1)(B), not the 'occurred during the commission' language which belongs more generally to § 1B1.3(a)(1). Otherwise, (a)(2) would have referred broadly to section (a)(1)."[17] We also noted that "the commentary accompanying § 1B1.3 contemplates scenarios in which acts and omissions that are part of the 'same course of conduct or common scheme or plan' may be included under § 1B1.3(a)(2) but do not occur during, in preparation for, or in the course of attempting to avoid detection or responsibility for the offense of ...


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