United States v. Beetle

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UNITED STATES OF AMERICA, Plaintiff-Appellee, v. CARIE LYN BEETLE, a.k.a. Carie Lyn Douglas, Defendant-Appellant.

No. 22-12677

United States Court of Appeals, Eleventh Circuit

November 1, 2023

DO NOT PUBLISH

Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 9:19-cr-80234-KAM-1 Before ROSENBAUM, GRANT and HULL, Circuit Judges

PER CURIAM

After a jury trial, Carie Beetle appeals her total sentence of 60 months' imprisonment for conspiracy to commit health care and wire fraud, in violation of 18 U.S.C. § 1349, and money laundering, in violation of 18 U.S.C. §§ 1957 and 2. On appeal, Beetle argues the district court erred: (1) in applying a 22-level increase in her offense level under U.S.S.G. § 2B1.1(b)(1) based on the amount of loss; and (2) in awarding $17,242,910.95 in restitution. After review we affirm Beetle's sentence and the restitution amount.

I. BACKGROUND

A. Offense Conduct

Beetle's convictions arose out of fraud associated with a substance abuse treatment center and a sober home in Florida owned and managed by Beetle and Eric Snyder. Beetle and Snyder conspired to defraud insurance companies by submitting claims for urinalysis and treatment that was either medically unnecessary or not provided.

At trial, the government presented evidence, including testimony from Snyder, that patients submitted to drug testing several times per week even though the drug tests were not reviewed by a doctor or used to guide patients' treatment. Beetle and Snyder also had employees and patients forge patients' signatures on sign-in sheets, backdate forms, and create fraudulent documents to make it appear as though patients attended therapy sessions or submitted to drug testing when they did not. And they paid kickbacks and bribes to individuals with private insurance who agreed to reside at the sober homes, attend therapy sessions, and submit to regular testing for purposes of billing the individuals' insurance plans.

Employees lacking the necessary licenses conducted the therapy sessions. Patients skipped therapy and tested positive without consequences. Patients signed each other in for therapy sessions and then did not attend. Doctors did not review drug tests or reviewed them only after ordering another drug test.

A forensic accountant testified that Beetle and her co-conspirators submitted insurance claims totaling $49,503,037.12 and were paid $17,242,910.95.

B. Presentence Investigation Report

Beetle's presentencing investigation report ("PSI") stated that Beetle and Snyder submitted claims of approximately $58,209,385 for substance abuse treatment and received $20,209,691 in reimbursements from insurance companies. The PSI recommended a total offense level of 39 consisting of: (1) a base offense level of seven, pursuant to U.S.S.G. § 2B1.1(a)(1); (2) a 22-level increase for an "intended loss amount of $58,209,385," pursuant to the table in § 2B1.1(b)(1); (3) a two-level increase for the number of victims, pursuant to § 2B1.1(b)(2)(A)(i); (4) a two-level increase for sophisticated means, pursuant to § 2B1.1(b)(10)(C); (5) a two-level increase for vulnerable victims, pursuant to § 3A1.1(b)(1); and (6) a four-level increase for her role as a leader, pursuant to § 3B1.1(b)(1).

While the table in § 2B1.1(b)(1) uses the term "loss," the commentary explains that the loss amount is "the greater of actual loss or intended loss." U.S.S.G. § 2B1.1 cmt. n.3(A). And "intended loss" is defined as "the pecuniary harm that the defendant purposely sought to inflict ...." Id. § 2B1.1 cmt. n.3(A)(ii).

With Beetle's total offense level of 39 and her criminal history category of I, the PSI recommended: (1) an advisory guidelines range of 262 to 327 months' imprisonment; and (2) a restitution amount of $17,242,910.95.

Beetle objected to the PSI's factual statement that she and Snyder submitted approximately $58,209,385 in insurance claims and received $20,209,691 in insurance payments. Beetle contended that she and Snyder submitted approximately $10,801,140 in claims and received $3,974,151, during the nine months she was "present" on a day-to-day basis, and that amount should be her relevant conduct. Beetle also contended that some urinalysis was legitimate, some therapy took place, and the government identified only $39,064 in payments for unattended group therapy sessions.

Beetle also objected to the 22-level increase based on loss amount. Beetle disputed the PSI's "intended loss amount" of $58,209,385. Beetle contended she should be held responsible for only "the amount of urine testing that was paid through August 2013, minus a percentage for the urinalysis testing that was arguably medically necessary." Beetle requested a loss amount of $4,756,444, which was the amount actually paid for drug testing during that time, with adjustments for properly billed urinalysis and improperly billed group therapy. She also pointed out that Snyder and another co-conspirator were held accountable for only the amount insurance companies actually paid and that it was "only just that Ms. Beetle's relevant conduct be determined similarly."

The government argued that the loss amount should reflect the entire amount billed up to December 2014, which was around $49.5 million. Although in August 2013, Beetle transferred her ownership interests in the businesses to Snyder, Beetle maintained a financial interest in them through December 2014.

C. Sentencing

At Beetle's July 29, 2022 sentencing hearing, the district court stated that the jury found Beetle participated in the conspiracy through December 2014 and that facts up to that time were "relevant for and should remain in the presentence report."

Beetle reiterated her argument that her loss amount should reflect only what the insurance companies actually paid. She also argued the amount should be reduced because (1) some patients attended group therapy and (2) one third of the urinalysis (or once per week) "would be a proper amount" and could be considered medically necessary. Beetle read from shift notes indicating that Snyder sometimes spoke with patients after a positive drug test.

During the hearing, the district court discussed Application Note 3(F) to § 2B1.1, which sets forth "Special Rules" about loss determination. The district court focused on subsection (viii), which applies to "Federal Health Care Offenses Involving Government Health Care Programs," and provides that "the aggregate dollar amount of fraudulent bills submitted to the Government health care program shall constitute prima facie evidence of the amount of the intended loss . . . if not rebutted." U.S.S.G. § 2B1.1 cmt. n. 3(F)(viii) (emphasis added).

The district court pointed out that this "guideline commentary says . . . the presumptive loss amount is the amount billed, not the amount paid" and that it was the defendant's burden "to show that the amount billed is inappropriate." The district court asked why Beetle was relying on the amount paid. Beetle responded that her co-conspirators were sentenced based on the amount paid, and it was wrong to punish her for going to trial. The district court stated that her co-conspirators' guidelines calculations were based on negotiated loss amounts in their plea agreements. The district court explained that it was required first to calculate Beetle's advisory guidelines range before it could consider whether to vary downward based on how she was treated compared to other defendants.

Beetle also argued that insurance companies routinely pay less than the full amount billed. Beetle stressed that trial evidence showed the total amount billed for urinalysis was $19 million, but the total amount paid was only $4,756,044, and for most of that time, "Beetle wasn't even there."

The government argued that Beetle should be held accountable for the entire billed amount up to December 2014, which trial evidence showed was $49.5 million for both urinalysis and therapy sessions. The government pointed out that the urinalysis tests were tainted because they were procured through kickbacks and that the $19 million billed for urinalysis did not account for the evidence of hundreds of unattended therapy sessions billed to the insurance companies.

After consulting Application Note 3(F)(viii) in the commentary to U.S.S.G. § 2B1.1, the district court found that the government presented sufficient evidence of the intended loss and that Beetle failed to sufficiently rebut that evidence. Beetle pointed out that the commentary in Application Note 3(F)(viii) was for government programs and Beetle's offense conduct related to private insurance companies. The district court determined that Application Note 3(F)(viii) still provided guidance that was applicable in Beetle's case, overruled her objection, and adopted the loss amount in the PSI. The district court stated that it would take Beetle's arguments about the loss amount into account in considering a variance.

The district court sustained Beetle's objection to the two-level increase for the number of victims, lowering the total offense level to 37. The district court confirmed with the prosecutor that the $49.5 million dollar loss amount was based on six victim insurance companies Beetle agreed were proven.

The district court calculated a total offense level of 37, which with a criminal history category I, resulted in an advisory guidelines range of 210 to 262 months. The district court then heard the parties' arguments. The government agreed that a downward variance was warranted and asked for a sentence between 72 and 80 months. Upon inquiry from the district court, Beetle's counsel said, and the government agreed, that the range would have been 57 to 71 months had ...