[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
______________________ FEB 06 2001
THOMAS K. KAHN
CLERK
No. 99-14192
Non-Argument Calendar
______________________
D.C. Docket No. 97-00574-CR-JAL
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SUSAN REGUEIRO,
Defendant-Appellant.
______________________
Appeal from the United States District Court for the
Southern District of Florida
______________________
(February 6, 2001)
Before CARNES and MARCUS, Circuit Judges, and HAND*, District Judge.
PER CURIAM:
*
Honorable William B. Hand, U.S. District Judge for the Southern District of Alabama,
sitting by designation.
Susan Regueiro appeals her 144-month sentence for conspiracy to defraud
the United States by submitting false Medicare claims, 18 U.S.C. § 371, conspiracy
to commit money laundering, 18 U.S.C. § 1956(h), and money laundering, 18
U.S.C. § 1956(a)(1)(B)(i). She contends that the district court erred by departing
upward for disruption of a government function, pursuant to United States
Sentencing Guideline § 5K2.7, based on her involvement in a scheme to defraud
Medicare. Because the district court properly concluded that the nature and scope
of Regueiro’s conduct significantly disrupted the government’s provision of
Medicare benefits, we affirm its decision to depart pursuant to § 5K2.7.1
I. FACTS
Regueiro pleaded guilty to one count each of conspiracy to defraud the
United States, conspiracy to commit money laundering, and money laundering.
The charges arose from her involvement in a scheme to defraud Medicare through
the submission of false claims for home health care services. Regueiro and
codefendant Leopoldo Perez worked as administrators for Mederi of Dade County,
Inc., a not-for-profit home health provider that had contracted to provide Medicare-
covered services. As part of their fraudulent scheme, Regueiro and Perez
established more than 100 nursing groups whose ostensible purpose was to provide
1
This case was originally scheduled for oral argument, but the panel has elected to
remove the case from oral argument pursuant to 11th Cir. R. 34-3(f).
2
home health care services to qualified patients. However, Regueiro and Perez used
the nursing groups to bill Medicare for thousands of services that were never
performed, or that were performed on patients who were not eligible to receive
Medicare benefits. Medicare of Dade County reimbursed Mederi for the false
claims through electronic fund transfers to bank accounts controlled by Regueiro
and Perez, and they shared in the profits from those false claims. Both of them
were extensively involved in all aspects of the scheme, including establishing the
nursing groups, recruiting individuals to operate the nursing groups and physicians
and nurses to participate in the fraud, and creating false documents to support the
fraudulent home health visits. As part of their plea agreements, Regueiro and
Perez agreed that the loss to Medicare from their scheme totaled $15,238,489 and
that the value of the funds laundered totaled $3,570,907.
Prior to sentencing, the Probation Office prepared a Pre-Sentencing
Investigation Report, which it made available to the parties. The PSI assigned
Regueiro a base offense level of 20 according to U.S.S.G. § 2S1.1, the guideline
applicable to the money-laundering offenses. The PSI then added seven levels to
Regueiro’s base offense level due to the value of funds laundered, assessed her a
four-level enhancement for her role as an organizer or leader, and granted her a
three-level reduction for acceptance of responsibility. As a result, Regueiro’s total
offense level was 28. Neither party filed objections to the PSI.
3
On September 9, 1999, the district court conducted a final sentencing
hearing regarding Regueiro. Prior to that hearing, the district court had notified the
parties that it was considering imposing an upward departure on Regueiro because
her conduct had significantly disrupted a governmental function. See U.S.S.G. §
5K2.7, p.s. After listening to arguments from both sides at the hearing, the court
concluded that a four-level upward departure was warranted. In imposing that
departure, the district court cited United States v. Khan, 53 F.3d 507 (2d Cir.
1995), as authority. The district court explained:
[T]he facts as they have been delineated in this case covered only a
small portion of the large scale Medicare fraud industry that
[Regueiro] organized and participated in extensively. ... [T]he scheme
here disrupted the government’s function to efficiently administer the
Medicare program and [undermined] the public’s confidence in
government.
The court also found that Regueiro had organized the fraudulent scheme, had
induced doctors and nurses to abuse their positions of trust, and had created
corporations to perpetrate and cover up the fraud. Based on all of those facts, the
district court concluded that the extent and nature of the disruption and the
importance of the government function that was affected warranted a four-level §
5K2.7 departure.
II. ANALYSIS
4
Generally, a sentencing court must impose a sentence within a guideline
range unless it finds there exists “an aggravating or mitigating circumstance of a
kind, or to a degree, not adequately taken into consideration by the Sentencing
Commission in formulating the guidelines that should result in a sentence different
from that described.” United States v. Hoffer, 129 F.3d 1196, 1200 (11th Cir.
1997) (quoting 18 U.S.C. § 3553(b)). Thus, to depart from the guidelines, the
sentencing court must determine (1) whether any factor makes the case atypical,
meaning that it takes the case out of the “heartland” of cases involving the conduct
described in the applicable guideline, and (2) whether that factor should result in a
different sentence. See U.S.S.G. § 5K2.0 (“Presence of any [factor that has not
been given adequate consideration by the Sentencing Commission] may warrant
departure from the guidelines, under some circumstances, in the discretion of the
sentencing court.”); Hoffer, 129 F.3d at 1200 (citing Koon v. United States, 518
U.S. 81, 98, 116 S.Ct. 2035, 2046-47 (1996)).
A sentencing court’s departure decision involves both factual and legal
findings. The court determines whether a case falls outside of the heartland by
assessing the facts, and comparing them to the facts of other cases that fall within
the heartland of the applicable guideline. Hoffer, 129 F.3d at 1200. To determine
if a factor that takes a case out of the heartland should result in a different sentence,
the court must decide whether that “factor is forbidden, encouraged, discouraged,
5
or unaddressed by the guidelines as a potential basis for departure.” Id. If a factor
is encouraged, the sentencing court is “authorized to depart from the applicable
guideline if the guideline does not already take that factor into account.” Id.
With the above framework in mind, we conclude that the district court did
not abuse its discretion in departing upward four levels pursuant to § 5K2.7. See
Hoffer, 129 F.3d at 1200 (reviewing departures from otherwise applicable
sentencing guideline ranges for abuse of discretion). Regueiro was sentenced
under U.S.S.G. § 2S1.1, the general money-laundering guideline. Because that
guideline does not encompass an interference with the administration of a
governmental program, we agree with the district court that Regueiro’s conduct
takes this case out of the heartland of typical money laundering cases. See United
States v. Gunby, 112 F.3d 1493, 1500-01 & n.11 (11th Cir. 1997) (“[T]he
significant disruption of a governmental function is not inherent in the offense of
large-scale fraud involving an abuse of public trust ....”); Khan, 53 F.3d at 518.
We also agree that U.S.S.G. § 5K2.7 warrants an upward departure. Section 5K2.7
states:
If the defendant’s conduct resulted in a significant disruption of a
governmental function, the court may increase the sentence above the
authorized guideline range to reflect the nature and extent of the
disruption and the importance of the governmental function affected.
6
U.S.S.G. § 5K2.7, p.s. Regueiro’s conduct significantly disrupted the
government’s ability to administer its Medicare program. Every time one of the
more than 100 nursing groups that Regueiro helped organize and establish
fraudulently billed Medicare, the government lost funds that it otherwise could
have used to provide medical care to eligible Medicare patients. As the district
court explained:
The Medicare program was created to help provide medical care, and
this particular program, for home care services, was specifically
created and delineated so persons who were not able to receive
medical care otherwise would not be lacking for the medical care they
sorely cried out for. Through the fraudulent billing and the loss of
over $15 million, those monies are no longer available for the medical
care for the persons in this program.
That reasoning is sound and finds support in the Second Circuit’s Khan decision.
53 F.3d 507.
Kahn had helped organize an extensive scheme to defraud the government’s
Medicaid system out of approximately $8 million. Id. at 511. He set up four
clinics and two corporations to provide patients with drug prescriptions and to
perform medical procedures and tests that those patients did not need. The clinics
then billed Medicaid for the unnecessary prescriptions and services. Id. at 511-12.
Khan was sentenced under § 2F1.1, the general fraud guideline. Id. at 517-18. The
Second Circuit affirmed the district court’s decision to depart upward from that
7
guideline on that basis of § 5K2.7 because “[Khan’s] scheme ... disrupted the
government’s function of efficiently administering Medicaid ... [and] undermined
the public’s confidence in government.” Id. at 518. Although Regueiro was
sentenced under a different guideline, the same reasoning applies here. The only
difference is that Regueiro’s scheme was more massive and had a more disruptive
effect than the one in Khan.
Regueiro’s primary argument on appeal is that the caselaw concerning
U.S.S.G. § 5K2.7 does not support the district court’s decision to depart upward.
See Gunby, 112 F.3d 1493; United States v. Baird, 109 F.3d 856 (3d Cir. 1997);
United States v. Horton, 98 F.3d 313 (7th Cir. 1996); United States v. Dayea, 32
F.3d 1377 (9th Cir. 1994); United States v. Murillo, 902 F.2d 1169 (5th Cir. 1990);
United States v. Kikumura, 918 F.2d 1084 (3d Cir. 1990). To the contrary, the
cases Regueiro relies on suggest that the fraud in this case is precisely the type that
supports a § 5K2.7 departure because of interference with the day-to-day
functioning of government. See, e.g., Gunby, 112 F.3d at 1503 (affirming § 5K2.7
departure in case of embezzlement of court filing fees); Baird, 109 F.3d at 871-72
(affirming § 5K2.7 departure in case of widespread police misconduct); Murillo,
902 F.2d at 1174 (affirming § 5K2.7 departure in case of selling false immigration
documents).
8
In contrast, the cases that Regueiro relies on in which the § 5K2.7 departure
was found inappropriate involve overly attenuated effects on governmental
functions. See Dayea, 32 F.3d at 1381-82 (involuntary manslaughter resulting in
death of police officer which produced “stress” in other officers did not warrant §
5K2.7 departure); Kikumura, 918 F.2d at 1116-17 (conduct designed to affect
government policy does not constitute attempt to disrupt a governmental function);
see also Horton, 98 F.3d at 318 (eight-level upward departure unreasonable for
empty bomb threat against federal building).
Regueiro makes two additional arguments. First, she maintains that the
district court improperly relied on the amount of monetary loss in departing
upward even though that factor was already taken into account in her sentence.
We disagree. While the district court made repeated references to the amount of
money that the government lost to Regueiro’s scheme, it did so only to stress the
scope and nature of Regueiro’s fraud and the substantial affect that it had on the
Medicare program.
Finally, Regueiro argues that the district court’s disparate treatment of her
and her codefendant Perez violates the sentencing guidelines. Specifically, she
claims that the district court’s failure to consider a § 5K2.7 departure for Perez
indicates that the court’s decision to impose the upward departure was based on
9
emotion and not on the facts of her case. Regueiro also claims that this disparate
treatment violates the principle of uniformity of sentencing that animates the
guidelines. We disagree. Disparity between the sentences imposed on
codefendants is generally not an appropriate basis for relief on appeal. See United
States v. Chotas, 968 F.2d 1193, 1197-98 (11th Cir. 1992) (holding that disparate
sentencing among codefendants was adequately considered by the Sentencing
Commission and is therefore not an appropriate ground for departure). As we
explained in Chotas, “to adjust the sentence of a co-defendant in order to cure an
apparently unjustified disparity between defendants in an individual case will
simply create another, wholly unwarranted disparity between the defendant
receiving the adjustment and all similar offenders in other cases.” Id. at 1198
(citations omitted).
III. CONCLUSION
For the reasons set forth above, we conclude that the district court did not
abuse its discretion in departing upward, and AFFIRM the sentence imposed by the
district court.
10