FILED
NOT FOR PUBLICATION
MAR 23 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 16-50322
Plaintiff-Appellee, D.C. No.
2:13-cr-00719-PSG-5
v.
L’TANYA DENISE SMITH, AKA MEMORANDUM*
L’Tanya Russell, AKA L’Tanya Smith,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Argued and Submitted October 5, 2017
Pasadena, California
Before: RAWLINSON and N.R. SMITH, Circuit Judges, and KORMAN,**
District Judge.
Defendant-Appellant L’Tanya Smith (Smith), convicted of five counts of
health care fraud in violation of 18 U.S.C. § 1347, appeals her sentence of fifty-
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
seven months’ imprisonment and restitution obligation of $4,007,586. Smith
asserts that the district court erred when determining the loss amount used to
calculate her sentencing range and restitution obligation. Because Smith did not
raise an objection to the loss calculation or restitution before the district court, we
review the claims on appeal for plain error. See United States v. Calvillo-Palacios,
860 F.3d 1285, 1288 n.3 (9th Cir. 2017).
The amount of loss may be calculated by the greater of either actual or
intended pecuniary harm. See U.S.S.G. § 2B1.1(b)(1) cmt. n.3(A). “A district
court need not make its loss calculation with absolute precision; rather, it need only
make a reasonable estimate of the loss based on the available information. . . .”
United States v. Walter-Eze, 869 F.3d 891, 912 (9th Cir. 2017) (citations and
internal quotation marks omitted). Specifically, “[i]n health care fraud cases, the
amount billed to an insurer shall constitute prima facie evidence of intended loss
for sentencing purposes.” Id. (citation omitted).
Smith pled guilty without the benefit of a plea agreement. At the change of
plea hearing, Smith affirmed that, as a physician’s assistant at the Sunset Clinic in
Los Angeles, California, she participated in a scheme to defraud Medicare by
ordering and prescribing medically unnecessary items and services for patients at
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the Sunset Clinic, as well as by making medically unnecessary referrals to other
Medicare providers.
Smith’s intended loss to Medicare was calculated to be $12,212,594. This
calculation included the amount billed Medicare from Sunset Clinic based on
Smith’s orders added to the amount billed Medicare as a result of Smith’s referrals
to other providers. The actual loss to Medicare as a result of Smith’s actions was
calculated at $4,007,586. The district court adopted these calculations, and Smith
did not object.
Although Smith had the burden at sentencing to rebut the presumption of
intended loss based on the amounts billed to Medicare, she did not present
evidence to challenge this evidence. See Walter-Eze, 869 F.3d at 912. On appeal,
Smith urges us to consider the declaration of co-defendant Sarkissian as record
evidence rebutting the amount of Smith’s intended loss. Sarkissian’s declaration
was not before the district court at the time of Smith’s sentencing and, in any
event, referred only to Sarkissian’s individual understanding and intent to bill
Medicare; it did not similarly address Smith’s understanding and intent. Smith
presented no similar declaration at her own sentencing.
Smith also challenges the district court’s determination that the entirety of
the Medicare billing amounts were fraudulent. However, Smith failed to
3
establish—or even raise the argument for consideration—that any portion of the
loss amount “was legitimate and untainted by the fraud.” Walter-Eze, 869 F.3d at
913.
Given that the loss estimate was reasonably based upon evidence available at
Smith’s sentencing, we cannot conclude that the district court plainly erred when
calculating the intended loss amount attributable to Smith. See id. (“Nor, we
should add, do counsel’s arguments, unsupported by any evidence at trial or
sentencing, that [the defendant] was familiar with Medicare’s reimbursement
practices or that she did not expect to recoup the full billed amount suffice to rebut
this presumption. . . .”). Accordingly, Smith’s related claim that the district court
plainly erred in calculating the restitution amount also fails. See id. at 914-15.
AFFIRMED.
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United States v. Smith, No. 16-50322 FILED
MAR 23 2018
Korman, District Judge, concurring:
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
As the memorandum disposition explains, Smith’s appeal fails because she
did not in the district court challenge the amount of intended loss. I write separately
because this forfeiture raises a serious question of ineffective assistance of counsel.
On appeal, Smith argues that the district court improperly attributed to her an
intent to defraud Medicare of amounts billed to it rather than the far smaller amounts
it actually paid. If there is a reason competent counsel would not have raised this
argument below, it does not now occur to me. This issue was crucial—the difference
between $4 million or $12 million in fraud and two Guidelines levels. And this
argument, which Smith now must make under plain-error review, could have been
raised because this Court presented it in United States v. Popov, 742 F.3d 911 (9th
Cir. 2014), which predated Smith’s arrest. Addressing this same issue, Popov
explained that “it is well known that Medicare routinely pays much less than the
billed amount.” Id. at 915. Because of this, the amount billed is deemed the intended
loss only prima facie; a defendant can introduce evidence that the amount billed
overstated her intent, including evidence “that the defendant was intimately familiar
with Medicare’s fixed rate billing practices.” Id. at 916. That Smith’s counsel
apparently made no such argument is troubling, particularly when one of the exhibits
in Smith’s co-defendant’s trial was a manual “to tell a physician or a physician’s
assistant how to use the [Medicare] fee schedule.” Indeed, an expert at the trial
agreed that providers “were obligated under Medicare rules and procedures to bill at
their usual and customary rates” and that “it is a violation of the rules and procedures
to bill Medicare according to the rates [a practitioner knows she] will be
reimbursed.”
Smith’s intent is also murky in another way. The great majority of the
billing—about $11 million of the $12 million, worth four Guidelines levels—was
done not by Smith, but by providers to whom Smith referred patients. Yet the entire
amount of this billing was attributed to Smith as “intended loss,” “pecuniary harm
that was intended to result from the offense.” U.S.S.G. § 2B1.1 cmt. n.3(A)(ii)
(2010) (emphasis added). “‘[I]ntended loss’ means a loss the defendant purposely
sought to inflict. ‘Intended loss’ does not mean a loss that the defendant merely knew
would result from [her] scheme or a loss [she] might have possibly and potentially
contemplated.” United States v. Manatau, 647 F.3d 1048, 1050 (10th Cir. 2011)
(Gorsuch, J.). Smith no doubt knew that these referral providers would bill some
amounts to Medicare, but it is not at all clear that she intended them—procedure by
procedure—to bill the $10,980,265 that they did. (And, of course, Medicare actually
paid the referral providers far less, about $3.5 million.)
Combined, these two arguments reduce $12 million of intended fraud (the
amount billed by Smith and the referral providers) to $450 thousand (the amount
Medicare paid on bills from Smith alone). That is six levels’ difference, a Guidelines
range of 30–37 months rather than 57–71. To be sure, my concerns do not alter the
memorandum disposition’s correct conclusion, that Smith is not entitled to relief on
direct appeal. She may, however, be entitled to relief on collateral review.
See 28 U.S.C. § 2255.