United States v. Gill

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1203

UNITED STATES OF AMERICA,

Appellee,

v.

CHARLES HENRY GILL, JR.,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, U.S. District Judge]

Before

Torruella, Chief Judge,

Boudin, Circuit Judge,

and Lisi,* District Judge.

Terry A. Fralich with whom Peter J. DeTroy and Norman, Hanson &

DeTroy were on briefs for appellant.

Helene Kazanjian, Assistant United States Attorney, with whom

Jay P. McCloskey, United States Attorney, was on brief for the United

States.

November 6, 1996

*Of the District of Rhode Island, sitting by designation.

BOUDIN, Circuit Judge. Charles Gill appeals from his

sentence, following a plea of guilty to various criminal

charges, to challenge two sentencing determinations made by

the district judge. One involves the issue of the vulnerable

victim adjustment, U.S.S.G. 3A1.1(b); the other, an

increase for abuse of a position of trust. Id. 3B1.3. The

facts, which we briefly summarize, are drawn from the

presentence report, the sentencing transcript and various

other materials before the district court. United States v.

Egemonye, 62 F.3d 425, 426 (1st Cir. 1995).

From August 1993 until November 1994, Gill owned and

operated the Maine Health Trust, doing business as The

Counseling Center in Fryberg, Maine, and provided

psychological counseling services to individuals at the

Counseling Center during this period. Additionally, from

February 1994 to November 1994, Gill was employed part-time

at the Bethel Area Health Center in Bethel, Maine, where he

performed similar counseling services.

Gill told individual patients at the two facilities, and

his employers at the Bethel Area Health Center, that he

possessed a doctoral degree in psychology and was licensed as

a psychologist or counselor under Maine law. In fact, Gill

was not licensed and had never received an advanced degree in

either psychology or counseling. Gill had a substantial

record of offenses involving theft and passing bad checks.

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During the period in question, Gill submitted claims, or

caused patients and the Bethel Area Health Center to submit

claims for payment to various private insurance companies and

the Medicare and Medicaid programs for services that Gill

provided to them. The total value of the payments claimed

from these entities was over $37,000. Gill also made similar

false statements as to his credentials and licensing to the

insurance companies and to Medicare and Medicaid authorities.

Gill received payments totalling over $16,000 directly from

individual patients.

In March 1995, Gill pled guilty to one count of

willfully using a passport secured by means of a false

statement, 18 U.S.C. 1542, Gill having proffered the

passport when the Bethel Area Health Center requested proof

of his citizenship at the start of his employment. In

October 1995, Gill pled guilty to one count of mail fraud,

one count of wire fraud, and one count of making false

statements to the Medicare and Medicaid programs. 18 U.S.C.

1341, 1343; 42 U.S.C. 1320. All charges were

consolidated for sentencing.

Following a hearing on January 30, 1996, the district

court sentenced Gill to 40 months' imprisonment, three years

supervised release, and a requirement of restitution in the

amount of $43,481.49. The underlying calculations included a

two-level increase in Gill's base offense level for victim

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vulnerability, U.S.S.G. 3A1.1(b), and a two-level increase

for abuse of a position of trust, id. 3B1.3. It is these

two adjustments that are the sole subjects of Gill's appeal

from his sentence. Gill was sentenced under the November

1995 edition of the guidelines, and references are to that

version unless otherwise specified.

The standard of review in such a case is simple, in fact

deceptively so, in the standard formulation: the district

court's factual findings are respected unless clearly

erroneous, and the determinations of law are reviewed de

novo. United States v. Sabatino, 943 F.2d 94, 102 (1st Cir.

1991). In principle, the application of a legal standard to

undisputed facts is also an issue of law, id., but in

practice the matter is not quite so clear-cut.

Victim vulnerability. Since November 1, 1989, the

provision now designated U.S.S.G. 3A1.1(b) has remained

substantially unchanged, although a recent change in the

commentary is pertinent to the issue of "targeting"

(discussed below). The black letter of section 3A1.1(b)

states that a two-level increase in the defendant's offense

level must be imposed:

[i]f the defendant knew or should have known that a
victim of the offense was unusually vulnerable due
to age, physical or mental condition, or that a
victim was otherwise particularly susceptible to
the criminal conduct.

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The presentence report proposed that the adjustment be

applied to Gill. As amended to reflect rulings on

objections, the report reasoned that Gill knew that the

patients with whom he would be dealing "had psychological

difficulties, mental health disorders and substance abuse

problems." Accordingly, the probation officer said that Gill

knew that his victims were vulnerable and "specifically

targeted them because of their `vulnerability' by [choosing]

to play the part of a person who treats such people with

mental health problems."

At sentencing, the district court concluded that the

victims "were especially vulnerable because of their needs

that gave rise to their seeking and their receiving of

services." The court cited decisions in other circuits

imposing such an adjustment on individuals fraudulently

providing medical services. See United States v. Echevarria,

33 F.3d 175, 180-81 (2d Cir. 1994) (unlicensed doctor);

United States v. Bachynsky, 949 F.2d 722, 735-36 (5th Cir.

1991) (physician making false diagnoses), cert. denied, 506

U.S. 850 (1992).

Gill disputes the district court's adjustment on several

grounds. He argues that the finding of vulnerability must be

based on evidence as to individuals, rather than upon mere

membership in a class. He denies that the patients he

victimized were especially vulnerable. Finally, he says that

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he did not "target" the victims on account of their

vulnerability, a requirement he imputes to the guideline

based on commentary language. The first two claims are

related; the last we discuss separately in the next section

of this opinion.

The vulnerable victim guideline is primarily concerned

with the impaired capacity of the victim to detect or prevent

the crime, rather than with the quantity of harm suffered by

the victim. The latter aggravation is dealt with in five

other provisions of the guidelines, expressly permitting

upward departures where the crime resulted in death,

significant physical injury, extreme psychological injury,

special property damage, or the gratuitous infliction of

injury or prolonging of pain or humiliation. U.S.S.G.

5K2.1, .2, .3, .5, .8. As United States v. Kaye, 23 F.3d 50,

54 (2d Cir. 1994), explained:

[T]he courts appear to have interpreted
the phrase "susceptible to the criminal
conduct" as emphasizing that a particular
victim was less likely to thwart the
crime, rather than more likely to suffer
harm if the crime is successful.

Thus, the issue here is whether the patients at the two

mental health facilities where Gill practiced were, on

account of their condition, substantially less able than the

average citizen to protect themselves against Gill's fraud.

There is nothing in the presentence report or in the district

judge's comments that suggests a misunderstanding on this

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point. However, we stress the focus of the guideline at the

outset because one cannot measure degrees of vulnerability or

susceptibility without some notion of what kind of

vulnerability or susceptibility is at issue.

Even thus narrowed, our case is peculiarly difficult

because Gill was dealing with a group, made up of individuals

about whom we know almost nothing beyond the fact that they

fall into a class of persons, namely, those who visit mental

health centers for counseling and therefore are likely to

have or think they have some emotional or mental problem--

which may afflict the patient or a related non-patient. Gill

argues that in such a case it is improper for a vulnerability

finding to be based on membership in a class rather than on

evidence as to a specific individual.

Appeals courts have been rather more willing to set

aside determinations of vulnerability made solely on a class

basis than when the focus was on the susceptibility of a

specific individual. United States v. Rowe, 999 F.2d 14, 16-

17 (1st Cir. 1993). But, as we also said in Rowe, this is in

no way a fixed rule. Id. at 17. In some cases the inference

to be drawn from the class characteristics may be so powerful

that there can be little doubt about unusual vulnerability of

class members within the meaning of section 3A1.1.

The guideline makes clear that "class" determinations

are permissible by saying in its commentary that the

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adjustment would apply to someone who sold an ineffective

cancer cure. U.S.S.G. 3A1.1(b), comment. n.2. Numerous

cases have upheld upward adjustments based on group

determinations. See, e.g., United States v. Malone, 78 F.3d

518, 522-23 (11th Cir. 1996) (cab drivers); Echevarria, 33

F.3d at 180-181 (medical patients); United States v.

McDermott, 29 F.3d 404, 411 (8th Cir. 1994) (black

teenagers); United States v. Peters, 962 F.2d 1410, 1417-18

(9th Cir. 1992) (people with poor credit histories);

Bachynsky, 949 F.2d at 735 (medical patients).

In Rowe, the primary subjects of the fraud were business

entities, and, without knowing more about any company, it was

hard for us to see how they were "unusually" vulnerable to

fraud. The more recent case of United States v. Feldman, 83

F.3d 9 (1st Cir. 1996), also relied upon by Gill, is quite

different. There, this court was concerned with a crime

directed against only one or two specific victims. Id. at

15-16. To resort to a single, class-based characteristic in

such a case is to prefer the less complete picture to a more

complete one readily available.

Yet even in a one-victim case, a single "class"

characteristic could be so powerful a proof of vulnerability

as to settle the issue without more. Indeed, the guideline

commentary suggests it would be enough to show that an armed

robbery victim was confined to a wheelchair. U.S.S.G.

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3A1.1(b), comment. n.2. In truth, many inferences about an

individual rest on an implicit generalization about a class.

Everything depends on the strength of the inference.

In our own case, the government could have simplified

matters if it had offered evidence from some of Gill's former

patients as to their own conditions. At the same time,

concerns about privacy and privilege make it pretty obvious

why the prosecutor might wish to avoid this course--quite

apart from considerations of time and expense. In all

events, the government was free to rest upon the inference

that many such patients would be highly vulnerable, leaving

it to the sentencing judge to agree or disagree.

In our view, a sentencing judge could reasonably

conclude based on general knowledge that, in the typical

situation, at least a fair number of patients at a community

mental health center are commonly under significant emotional

stress. True, some patients might be free of stress but to

suppose this to be generally true is unrealistic. Counseling

in mental health matters often involves disclosing affairs

that most people treat as private and, if for no other

reason, it is a step that many are likely to take only to

cope with substantial strains.

The records revealed that Gill had treated many

patients and that a number of them had multiple visits. It

is thus safe to infer that at least some of these victims

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were under significant stress and so unusually vulnerable to

Gill's fraud. It seems to us evident that Gill could foresee

the risk sufficiently to meet the guideline's "knew or should

have known" standard. Id. 3A1.1(b). See United States v.

Skillman, 922 F.2d 1370, 1378 (9th Cir. 1990), cert. denied,

502 U.S. 922 (1991).1

Ours would be a different case if Gill had seen only one

patient and we knew nothing about that individual. Yet a

different problem would be presented if Gill had accepted the

general inference as to most clinics but offered evidence

that his clinic treated only persons with a special problem

unlikely to involve much patient stress. But neither of

these variations is presented, and there will be time enough

to deal with them, and many other variations, as cases arise.

Targeting. Gill makes a separate complaint that his

section 3A1.1 enhancement was erroneously applied because he

did not "target" or select his victims because of their

unusual vulnerability. He cites several cases for the

proposition that this motivation is a additional requisite

element. Until November 1995, the commentary to section

3A1.1 stated that the section was applicable "where an

1This contrasts with the situation, described by the
guideline commentary, in which one of many victims happens to
be vulnerable by some circumstance accidental in relation to
the fraud and largely unforeseen. U.S.S.G. 3A1.1(b),
comment. n.2 (enhancement not applicable to purveyor of
fraudulent securities to general public if one victim happens
to be senile).

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unusually vulnerable victim is made a target of criminal

activity by the defendant." U.S.S.G. 3A1.1, comment. n.1

(Nov. 1994).

This commentary language was deleted by the Sentencing

Commission in November 1995 to "clarif[y] the operation" of

section 3A1.1. U.S.S.G. App.C, Amend. 521, at 430 (Nov.

1995). But Gill's criminal conduct took place prior to the

amendment date. So, if the 1995 amendment did away with a

previously required element of targeting motivation, the

prior guideline might have to be followed under ex post facto

principles. See U.S.S.G. 1B1.11; United States v.

Prezioso, 989 F.2d 52, 53-54 (1st Cir. 1993).

Gill's argument about targeting leans heavily on our

opinion in Rowe. The Rowe case involved a scheme to sell

fraudulent health insurance policies to various small

businesses, that were not, in our opinion, shown to be

unusually vulnerable under section 3A1.1. Rowe, 999 F.2d at

16-17. When the government said that some of the employee-

patients might have been unusually vulnerable--because once

insured they could not easily switch companies--we replied

that there was no "special targeting [by Rowe] of such

victims." Id. at 17.

The confusion is understandable, and wholly of our own

making, but it does not help Gill. All that we meant was

that the case might have been different if the Rowe's fraud

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had involved direct dealings between Rowe and the employee-

patients whereby the success of his scheme had depended upon

the latter's vulnerability. See, e.g., Bachynsky, 949 F.2d

at 735 (upholding enhancement against physician who submitted

false claims to insurers after seeing vulnerable patients).

In short, the reference to targeting in Rowe had nothing to

do with laying down a separate and additional requirement

that the primary subject of the fraud be a "target," as well

as foreseeably vulnerable to an unusual degree.

Although the circuits are divided,2 such an additional

requirement of "targeting," even under the pre-amendment

guideline, is at odds with the evident purpose of the

guideline: to punish more severely conduct that is morally

more culpable and to protect such victims by adding more

deterrence. See, e.g., United States v. Brunson, 54 F.3d

673, 676 (10th Cir.), cert. denied, 116 S.Ct. 397 (1995);

United States v. Morrill, 984 F.2d 1136, 1137-38 (11th Cir.

1993). Further, to require subjective motivation undermines

the guideline's own lesser scienter requirement, namely, that

the defendant "knew or should have known" of the victim's

unusual vulnerability.

2Compare United States v. O'Brien, 50 F.3d 751, 755-56

(9th Cir. 1995) (declining to impose a scienter requirement
of targeting beyond the "knew or should have known" standard)
with United States v. Holmes, 60 F.3d 1134, 1136 (4th Cir.

1995) (discussing additional targeting requirement), and

United States v. Smith, 39 F.3d 119, 124 (6th Cir. 1994)

(adopting targeting requirement).

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In the present case, the main subjects of Gill's fraud

include both the patients with whom he dealt directly and

those third parties who were billed, such as insurance

companies. It is a reasonable, indeed compelling, inference

that the former include at least some who were unusually

vulnerable and were foreseeably so. That is enough under the

guideline, pre and post amendment, regardless of Gill's own

private motivation. If Rowe has confused matters, as

apparently it has, we are happy to set the record straight.

Abuse of Position of Trust. Gill also argues that the

district court erred in enhancing his sentence under U.S.S.G.

3B1.3. That section provides for a two-level enhancement

"if the defendant abused a position of public or private

trust . . . in a manner that significantly facilitated the

commission or concealment of the offense." U.S.S.G. 3B1.3.

Thus, the district court must first decide that the defendant

occupied a position of trust and then find that he used that

position to facilitate or conceal the offense. See United

States v. Santiago-Gonzalez, 66 F.3d 3, 8 (1st Cir. 1995).

Here the district court concluded that, at least "in

real life terms," Gill occupied a position of trust relative

to his counseling patients, and that Gill took advantage of

the patients' reliance on his claimed status as a

psychologist to further his fraud scheme. Gill challenges

both findings, claiming that he did not hold a position of

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trust as intended by the guideline, and that there was no

evidence that he abused his position.

Were Gill a duly licensed psychologist who used his

status as a mental health professional to perpetrate some

fraud or other crime upon his patients and their insurers,

there is no doubt that section 3B1.3's enhancement would

apply. "Effective psychotherapy . . . depends upon an

atmosphere of confidence and trust in which the patient is

willing to make a frank and complete disclosure of facts,

emotions, memories, and fears." Jaffee v. Redmond, 116 S.

Ct. 1923, 1928 (1996). The guideline phrase "private trust"

readily describes the relationship of a psychologist vis a

vis his or her patients.

Gill argues that because he did not legitimately occupy

the position of counselor, he did not "hold" that position

under section 3B1.3. This argument has persuaded at least

one other circuit. In Echevarria, 33 F.3d at 181, the Second

Circuit reversed a section 3B1.3 enhancement on a defendant

who falsely held himself out as a physician, stating that

"[w]e do not believe that an imposter `holds' the position

that he purports to occupy within the meaning of this

commentary." It does not persuade us.

We appreciate that read literally, the guideline could

be taken to refer only to one who legally or legitimately

occupied a position of trust, presumably the usual case. But

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the threat that animates the guideline may as easily be

present where the position is occupied by an imposter. That

threat--illustrated by the lawyer who bilks a client out of

trust funds or the doctor who sexually abuses a patient--is

that wrongdoer's position facilitates the crime, reduces the

chance of detection, or both. See U.S.S.G. 3B1.3, comment.

n.1.

The threat is equally present whether the lawyer or

doctor is fully licensed or is a pretender sporting a vest or

white coat and displaying a fake diploma. In both cases, the

wrongdoer is using the ostensible position to facilitate or

conceal the crime, just as Gill's extraction of payments was

facilitated by his claim to be a licensed counselor. Our own

cases have stressed the practical realities rather than legal

title in applying this adjustment.3 This is also the view of

the Tenth Circuit in United States v. Queen, 4 F.3d 925, 929-

30 (10th Cir. 1993).

The district court here found that Gill did acquire, "in

real life terms . . . by virtue of his conduct" a position of

trust relative to his patients. "Trust" alone, of course, is

3See United States v. Newman, 49 F.3d 19 (1st Cir. 1995)

(section 3B1.3 enhancement upheld against a defendant who
defrauded a corporation that was under his actual control,
despite the fact that he had never properly obtained legal
authority over the corporation); cf. United States v.

Innamorati, 996 F.2d 456, 489-90 (1st Cir.) (former registry

police officer subject to enhancement if prior position
facilitated crime), cert. denied, 510 U.S. 955 (1993).

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not enough; there must also be a "position." But by

pretending, Gill effectively occupied the "position" so far

as the present guideline is concerned.

Affirmed.

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