USA v. Kawai Ary-Berry
UNPUBLISHED OPINION FILED. [10-10721 Affirmed] Judge: EGJ , Judge: JWE , Judge: CH. Mandate pull date is 05/27/2011 for Appellant Kawai Ary-Berry [10-10721]
Case: 10-10721 Document: 00511469615 Page: 1 Date Filed: 05/06/2011
IN THE UNITED STATES COURT OF APPEALS
United States Court of Appeals
FOR THE FIFTH CIRCUIT
May 6, 2011
Lyle W. Cayce
UNITED STATES OF AMERICA,
Plaintiff - Appellee
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 5:09-CR-85-1
Before JOLLY, ELROD, and HAYNES, Circuit Judges.
Kawai Ary-Berry (“Ary-Berry”) appeals her conviction and sentence for one
count of making a false statement involving a health care matter and nine
counts of health care fraud. Ary-Berry raises three issues on appeal: (1) the
sufficiency of the evidence to support the jury’s verdict; (2) whether the district
court erred in failing to charge the jury on Ary-Berry’s good faith defense; and
(3) whether the district court erred in using intended loss rather than actual loss
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
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in calculating Ary-Berry’s sentence. Finding no error meriting reversal, we AFFIRM.
On May 21, 2004, Ary-Berry, a licensed massage therapist, enrolled as a
physical therapy provider with the Office of Workers Compensation Program
(“OWCP”), part of the United States Department of Labor (“DOL”), to receive
reimbursement for medical services provided to workers covered by the Federal
Employees Compensation Act (“FECA”). She subsequently billed the OWCP for
over $2.5 million worth of services from 2004 to 2008. On December 9, 2009,
Ary-Berry was indicted for one count of making a false statement involving a
health care matter and nine counts of health care fraud.1 After a two-day trial,
the jury returned a guilty verdict on all ten counts.
During the sentencing phase of the trial, Ary-Berry argued that the
district court should use the amount Ary-Berry received from the OWCP rather
than the amount she billed to calculate loss. The judge rejected this argument
and adopted the finding in the Presentence Report (“PSR”) that Ary-Berry
intended to cause loss of over $2.5 million, the amount she in fact billed to the
OWCP. Consequently, the district court increased Ary-Berry’s offense level by
eighteen points and sentenced her to concurrent prison terms of sixty months on
count one and seventy-eight months on each of counts two through ten. The
district court also sentenced Ary-Berry to three years of supervised release on
each count, running concurrently. Ary-Berry timely appealed.
A. Sufficiency of the Evidence
Ary-Berry challenges the sufficiency of the evidence to support the jury’s
verdict as to all ten counts of conviction.
Because Ary-Berry moved for a
judgment of acquittal based on insufficient evidence, “we review the district
The indictment charged Ary-Berry with billing over $2.5 million to OWCP and
receiving payments in excess of $1 million, but less than $2 million.
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court’s denial of that motion by examining the evidence and all reasonable
inferences drawn therefrom in the light most favorable to the verdict, and asking
whether a rational trier of fact could have found guilt beyond a reasonable
doubt.” United States v. Montes, 602 F.3d 381, 388 (5th Cir.), cert. denied sub
nom. Armijo v. United States, 131 S. Ct. 177 (2010). “‘[I]t is not necessary that
the evidence exclude every reasonable hypothesis of innocence or be wholly
inconsistent with every conclusion except that of guilt, provided a reasonable
trier of fact could find that the evidence establishes guilt beyond a reasonable
doubt.’” Id. (quoting United States v. Bell, 678 F.2d 547, 549 & n.3 (5th Cir. Unit
B 1982) (en banc)). If “the evidence gives equal or nearly equal circumstantial
support to a theory of guilt, as well as to a theory of innocence, the conviction
must be reversed.” United States v. Ferguson, 211 F.3d 878, 882-83 (5th Cir.
A review of the record shows that the government presented more than
enough evidence from which a reasonable trier of fact could find beyond a
reasonable doubt that Ary-Berry was guilty on all counts. As to count one,
making a false statement in connection with a health care matter,2 the jury
heard testimony that Ary-Berry wrote down provider numbers for physical
Count one of the indictment was based on the following statute:
(a) Whoever, in any matter involving a health care benefit program, knowingly and
(1) falsifies, conceals, or covers up by any trick, scheme, or device a material
(2) makes any materially false, fictitious, or fraudulent statements or
representations, or makes or uses any materially false writing or document
knowing the same to contain any materially false, fictitious, or fraudulent
statement or entry,
in connection with the delivery of or payment for health care benefits, items, or
services, shall be fined under this title or imprisoned not more than 5 years, or both.
(b) As used in this section, the term “health care benefit program” has the meaning
given such term in section 24(b) of this title [18 USCS § 24(b)].
18 U.S.C. § 1035.
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therapy and durable medical equipment rather than the provider number for
massage therapy. Because Ary-Berry enrolled as a physical therapist, even
though she only had a massage therapy license, she could bill the OWCP for a
broader range of services. Thus, her false statements were material. As to
counts two through ten of the indictment,3 the government presented testimony
that Ary-Berry submitted bills for more than twenty-four hours of services in one
day and continued to submit bills for patients after they stopped seeing her for
treatment. The evidence also showed that Ary-Berry filed bills on dates when
she could not have provided services. Indeed, Ary-Berry told an investigator
that she knew that the information on certain bills was incorrect, but assumed
“that if the government didn’t owe her the money, that they wouldn’t pay her.”
The government also presented evidence that Ary-Berry possessed explanations
of the uniform codes used to bill services and that she had received training on
how to submit proper claims for those services. Finally, the jury heard that AryBerry’s billings to the OWCP increased from approximately $60,000 in 2004 to
$625,815.01 in the first half of 2008, even though she only had one patient in
Counts two through ten of the indictment listed individual executions of a health care
fraud scheme. The statute under which Ary-Berry was charged reads:
(a) Whoever knowingly and willfully executes, or attempts to execute, a scheme or
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or
promises, any of the money or property owned by, or under the custody or
control of, any health care benefit program,
in connection with the delivery of or payment for health care benefits, items, or
services, shall be fined under this title or imprisoned not more than 10 years, or both.
If the violation results in serious bodily injury (as defined in section 1365 of this title
[18 USCS § 1365]), such person shall be fined under this title or imprisoned not more
than 20 years, or both; and if the violation results in death, such person shall be fined
under this title, or imprisoned for any term of years or for life, or both.
(b) With respect to violations of this section, a person need not have actual knowledge
of this section or specific intent to commit a violation of this section.
18 U.S.C. § 1347.
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2008. Because a rational trier of fact could have found Ary-Berry guilty beyond
a reasonable doubt based on the evidence presented at trial, we find no error on
B. Good Faith Instruction
Ary-Berry next challenges the district court’s refusal to include her
proposed jury instruction on a good faith defense. We review such a refusal for
abuse of discretion, noting that the “‘trial judge is afforded substantial latitude
in formulating his instructions.’” United States v. Daniels, 247 F.3d 598, 601
(5th Cir. 2001) (quoting United States v. Rochester, 898 F.2d 971, 978 (5th Cir.
1990)). Refusal to include an instruction constitutes reversible error only if: (1)
the requested instruction is substantively correct; (2) the actual charge given to
the jury did not substantially cover the content of the proposed instruction; and
(3) the omission of the instruction would seriously impair the defendant’s ability
to present his defense. United States v. St. Gelais, 952 F.2d 90, 93 (5th Cir.
Ary-Berry relies on United States v. Goss, 650 F.2d 1336 (5th Cir. Unit A
July 1981), for the proposition that a trial court commits reversible error if it
denies a request for a good faith instruction when there is any evidentiary
support for that legal defense. See id. at 1344. “Goss, however, must be read in
light of later cases which indicate that the failure to instruct on good faith is not
fatal when the jury is given a detailed instruction on specific intent and the
defendant has the opportunity to argue good faith to the jury.” United States v.
Storm, 36 F.3d 1289, 1294 (5th Cir. 1994) (citing Rochester, 898 F.2d at 978); see
also United States v. Daniel, 957 F.2d 162, 170 (5th Cir. 1992) (per curiam) (“We
have subsequently noted that Goss stands merely for the proposition that an
instruction on specific intent will not always be sufficient to necessarily exclude
a conclusion of good faith.”).
The jury instructions in this case defined the
terms “knowingly,” “willfully,” and “intent to defraud,” and Ary-Berry conceded
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that defense counsel was able to argue good faith to the jury during trial. See,
e.g., Storm, 36 F.3d at 1294-95 (finding no abuse of discretion in the district
court’s refusal to submit a good faith instruction to the jury, as the instructions
defined “knowingly” and “willfully,” and the defendant had the opportunity to
present his theory as to his intentions); Daniel, 957 F.2d at 170 (finding a good
faith instruction unnecessary, as the jury was properly instructed on the
elements of the offense, and counsel presented testimony concerning good faith
and argued it to the jury). We find no abuse of discretion in the district court’s
refusal to give Ary-Berry’s requested instruction.
C. Loss Calculation
Ary-Berry contends that the district court erred in using the amount she
billed to the OWCP rather than the amount she received from the OWCP in
calculating loss for sentencing purposes. We generally review a district court’s
sentencing decision for abuse of discretion, although we conduct a de novo review
of the “district court’s interpretation or application of the Sentencing
Guidelines.” United States v. Harris, 597 F.3d 242, 250 (5th Cir. 2010) (quoting
United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008) (internal
quotation marks and citation omitted)). Factual findings, including the loss
amount, are reviewed for clear error. United States v. Jones, 475 F.3d 701, 705
(5th Cir. 2007). In making factual findings, the “district court may adopt the
findings of the PSR without additional inquiry if those facts have an evidentiary
basis with sufficient indicia of reliability and the defendant does not present
rebuttal evidence or otherwise demonstrate that the information is materially
unreliable.” United States v. Valles, 484 F.3d 745, 759 (5th Cir. 2007). “The
defendant has the burden of showing that the information relied on by the
district court in the PSR is materially unreliable.” Id. at 759-60.
According to the Sentencing Guidelines, the general rule for loss
calculations is that a court should use “the greater of actual loss or intended
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loss.” U.S. S ENTENCING G UIDELINES M ANUAL § 2B1.1 cmt. 3(A) (2009). “‘Actual
loss’ means the reasonably foreseeable pecuniary harm that resulted from the
offense.” Id. § 2B1.1 cmt. n.3(A)(i). “‘Intended loss’ (I) means the pecuniary
harm that was intended to result from the offense; and (II) includes intended
pecuniary harm that would have been impossible or unlikely to occur (e.g., as in
a government sting operation, or an insurance fraud in which the claim exceeded
the insured value).” Id. § 2B1.1. cmt. n.3(A)(ii). The district court has “wide
latitude” in calculating the loss amount and should make a reasonable estimate
based on the available information. Id. § 2B1.1 cmt. n.3(C); Jones, 475 F.3d at
705 (“The finding must be plausible in light of the record as a whole.”). In cases
involving intended loss, “our case law requires the government prove by a
preponderance of the evidence that the defendant had the subjective intent to
cause the loss that is used to calculate his offense level.” United States v.
Sanders, 343 F.3d 511, 527 (5th Cir. 2003) (citations omitted).
We first reject Ary-Berry’s argument that Sentencing Guideline Section
2B1.1 cmt.3(F)(v) dictates that a district court must use the amount Ary-Berry
received from the OWCP rather than the amount she billed because this case
involves services that were fraudulently rendered by a person falsely posing as
a licensed professional. The application rule states that: “[i]n a case involving
a scheme in which (I) services were fraudulently rendered to the victim by
persons falsely posing as licensed professionals; . . . loss shall include the amount
paid for the property, services or goods transferred, rendered, or misrepresented,
with no credit provided for the value of those items or services.” U.S. S ENTENCING
G UIDELINES M ANUAL § 2B1.1 cmt. 3(F)(v) (2009) (emphasis added). The rule
states that loss shall include the amount paid for services. It does not limit the
loss to the amount paid, but merely prevents the district court from setting off
the value of services provided by a person fraudulently posing as a licensed
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professional.4 See United States v. McLemore, 200 F. App’x 342, 344 (5th Cir.
2006) (per curiam) (unpublished) (stating that “[t]here is no setoff for the value
of any services actually rendered or products provided” when applying the
special rules for certain cases of fraud, and “the determination of the amount of
loss for calculations under U.S.S.G. § 2B1.1(b)(1) require the use of the greater
of actual loss of [sic] intended loss”); see also United States v. Hunter, 618 F.3d
1062, 1065 (9th Cir. 2010) (finding that the application rule supported the
conclusion that the calculated loss required no deduction for the value of work
the defendant performed when she was falsely acting as a nurse). Thus, AryBerry’s argument that this special application rule required the district court to
use only the amount the OWCP paid to Ary-Berry is without merit.
With respect to her argument that she did not intend to cause the loss
because she thought OWCP would pay her what she was owed, we note that
although Ary-Berry objected to the district court’s use of intended loss during
sentencing, she did not argue her subjective intent to the district court, so we
review the district court’s decision for plain error.
See United States v.
Hernandez-Martinez, 485 F.3d 270, 272-73 (5th Cir. 2007) (reviewing a case for
plain error because the district court was not on notice of the arguments later
presented on appeal, and the district court therefore had no opportunity to
correct itself or clarify its ruling). To prevail, Ary-Berry must show: (1) an error;
(2) that is clear and obvious; and (3) that affected her substantial rights. Id. at
273 (citing United States v. Olano, 507 U.S. 725, 732 (1993)). If these conditions
are met, we may exercise our discretion to reverse only if “the error seriously
affects the fairness, integrity, or public reputation of judicial proceedings.”
The Sentencing Commission explained that “the seriousness of these offenses and the
culpability of these offenders is best reflected by a loss determination that does not credit the
value of the unlicensed benefits provided.” U.S. SENTENCING GUIDELINES MANUAL app. C, vol.
II, amend. 617, at 179-80 (2003).
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Hernandez-Martinez, 485 F.3d at 273 (quoting Olano, 507 U.S. at 732 (internal
quotation marks omitted)).
On appeal, Ary-Berry has not shown that the district court’s findings on
subjective intent are incorrect. Because Ary-Berry presented no evidence to
challenge the reliability of the intended loss figure in the PSR or to show that
another figure exists that more accurately represents the loss Ary-Berry
subjectively intended to cause, Ary-Berry has not shown plain error.
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