United States v. Rainford

110 F.4th 455

UNITED STATES of America, Appellee, v. Ryan RAINFORD, Bryan Duncan, Robert Locust, Defendants-Appellants Peter Kalkanis, Kerry Gordon, aka Curry, Defendants.^*

Nos. 20-359

20-2695

20-2993

21-1753

August Term 2022

United States Court of Appeals, Second Circuit

Argued: May 1, 2023

Decided: August 2, 2024

On Appeal from the United States District Court for the Southern District of New York

Alexandra N. Rothman, Assistant United States Attorney (Nicholas W. Chiuchiolo, Nicholas S. Folly, David Abramowicz, Assistant United States Attorneys, on the brief), for Damian Williams, United States Attorney for the Southern District of New York, New York, NY, for Appellee.

Donna R. Newman, Law Offices of Donna R. Newman, PA, New York, NY, for Defendant-Appellant Ryan Rainford.

Bryan Duncan, pro se, for Defendant-Appellant Bryan Duncan.

Randall Douglas Unger, Law Offices of Randall Douglas Unger, Kew Gardens, NY, for Defendant-Appellant Robert Locust.

Before: Jacobs, Menashi, and Merriam, Circuit Judges.

Judge Jacobs concurs in a separate opinion. Judge Merriam concurs in part and dissents in part in a separate opinion.

Menashi, Circuit Judge:

Defendants-Appellants Ryan Rainford, Robert Locust, and Bryan Duncan appeal their convictions and sentences for conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 1349.¹ Duncan proceeds pro se on appeal.

The convictions arose from a fraudulent slip-and-fall scheme that the defendants and others orchestrated. The scheme involved recruiting poor and homeless people to fake accidents at properties around the New York area. The recruit would stage an accident and then seek unnecessary medical treatment—sometimes including surgery—from doctors who were part of the scheme. The organizers of the scheme would then refer the recruit to a lawyer, who would sue the property owner or the owner's insurance company for damages. The proceeds from the lawsuits, which often settled, were then divided among the co-conspirators, with the recruits receiving relatively little.

The defendants raise several arguments on appeal. We affirm with respect to each issue relating to the trial and convictions. See infra Part I. We affirm the judgment with respect to the sentencing guidelines calculations, but we remand for factfinding as to the number of fraudulent accidents orchestrated by the conspiracy while Rainford and Locust were members for the purpose of performing a loss calculation under U.S.S.G. § 2B1.1. See infra Part II. Finally, we vacate and remand Duncan's forfeiture order, affirm but modify the restitution order for Rainford and Locust, and affirm Rainford's sentence but remand for reconsideration in the interest of justice. See infra Part III.

BACKGROUND

The conduct underlying this appeal involves two fraudulent slip-and-fall schemes. The first scheme began around 2013 and included Rainford, Duncan, and Locust. Peter Kalkanis was the principal organizer of the first scheme, and Rainford, Duncan, and Locust were lower-level co-conspirators known as "runners." The runners would seek out people who were often poor or homeless. They would then find suitable locations for slip-and-fall accidents and instruct a recruit to stage a fall at the location and to seek medical attention for nonexistent injuries. Sometimes, the unnecessary medical attention included surgery.

The recruit was then referred to a lawyer who would pursue a personal injury lawsuit on his or her behalf. Kalkanis would typically sit in on a recruit's meeting with the attorney. At the meeting, Kalkanis would record pertinent information on an "intake sheet," which included the name of the recruit as well as others involved in the "accident," including the runner who referred the recruit to the scheme. Notably, some of the intake sheets processed in this way were not fraudulent but documented genuine slip-and-fall accidents and legitimate legal claims. When asked at trial how many of the intake sheets involved fraudulent slip-and-falls, Kalkanis initially testified that "[a]t least 80 percent" were fraudulent. Rainford App'x 884. Kalkanis then backtracked, saying that "practically all of them" were fraudulent. Id. When asked to clarify, Kalkanis said "the majority of them" were fraudulent. Id. The district court noted that Kalkanis had given different answers to the same question; Kalkanis then reiterated that "[t]he majority of them" were fraudulent. Id. When asked how many cases he managed during the first conspiracy, Kalkanis estimated that there were "[a]pproximately 300, if not more." Id. at 883.

The runners also ensured that the recruits attended medical and legal appointments by transporting them to those appointments. The organizers of the scheme would arrange for litigation funding companies to underwrite the medical expenses and litigation. While litigation proceeded, the organizers would often arrange "loans" to the recruits from the litigation funding companies to pay expenses. One witness testified that he used his loan to pay for "anything, whether it be rent, bills" as well as "to pay the medical facilities for the surgeries that [he] would need." Id. at 751. The lawsuits frequently resulted in settlements, often for six figures. The proceeds were distributed among the organizers, doctors, lawyers, litigation funders, and others involved in the scheme. The recruit would receive what was left.

One recruit who testified at trial was Yvette Battle. After staging a fraudulent slip-and-fall, Battle underwent knee surgery for which she received anesthesia. She was compensated with $1,000 along with cookies and juice. See id. at 685. A "couple of months later," she underwent a shoulder surgery and in exchange for the surgery she was paid $1,000. Id. at 685-88. She filed an action against the owner of the property where she staged the accident. That action was "[d]ismissed" and she received nothing of value from that lawsuit. Id. at 689. During the government's examination of Battle, the prosecutor referred to these $1,000 payments as "loans," id., and Battle did not correct that characterization. Some recruits whose cases settled received larger payouts. One recruit who underwent shoulder surgery received $19,000 out of a $100,000 settlement, and another who underwent back and knee surgery received $35,000 out of a $225,000 settlement.

In 2015, Duncan and Kerry Gordon—another co-conspirator in the Kalkanis scheme—began a spin-off scheme. That scheme was substantially similar to the Kalkanis scheme, often using the same attorneys, doctors, and low-level co-conspirators. Duncan and Gordon created a business entity—D&G Premier Solutions LLC ("D&G")—to operate the scheme. D&G would connect recruits with litigation funding companies. D&G would receive a referral fee from a funding company after the company contracted with a recruit to provide payments in exchange for the recruit's future settlement amount.

In 2019, a six-count superseding indictment was returned against the co-conspirators in the two schemes. Rainford, Duncan, and Locust were each charged with three counts in connection with the Kalkanis scheme: conspiracy to commit mail and wire fraud (Count One), mail fraud (Count Two), and wire fraud (Count Three). Id. at 60-64. Duncan was indicted on three additional counts relating to the spin-off scheme: conspiracy to commit mail and wire fraud (Count Four), mail fraud (Count Five), and wire fraud (Count Six). Id. at 64-67.

The government presented extensive evidence of guilt at trial. Almost a dozen recruits testified that they had participated in the schemes by staging accidents and receiving unnecessary medical treatment. Kalkanis also testified. He stated that he "directed the traffic" in the first scheme and "was a manager in th[e] whole thing." Id. at 819. Kalkanis elaborated that the scheme was fraudulent because "these weren't real accidents." Id. And he identified Locust, Rainford, and Duncan as members of the conspiracy. Id. at 819-20. The government also introduced the intake sheets, medical records, and communications between the co-conspirators.

The jury found Rainford, Locust, and Duncan guilty of conspiracy to commit mail and wire fraud in connection with the Kalkanis scheme (Count One). See id. at 1226.² The jury also found Duncan guilty of conspiracy to commit mail and wire fraud (Count Four), mail fraud (Count Five), and wire fraud (Count Six) in connection with the spin-off scheme. This appeal followed.

DISCUSSION

Rainford, Duncan, and Locust raise several arguments on appeal. We begin with the arguments relating to the trial and convictions, and we affirm the judgment of the district court with respect to those issues. See infra Part I. We next consider the defendants' challenges to their sentencing guidelines calculations. We affirm the judgment with respect to the calculations, but we remand for additional fact-finding relating to the loss enhancements for Rainford and Locust. See infra Part II. Finally, we address the defendants' arguments about their sentences. We vacate and remand Duncan's forfeiture order because the district court relied only on representations by the government, not on evidence, in calculating the forfeiture amount. We affirm the district court's restitution order for Rainford and Locust, but we modify the order as the parties agree. And we affirm Rainford's sentence of imprisonment but remand with instructions to reconsider it in the interest of justice. See infra Part III.

I

First, we consider the defendants' challenges to their convictions.

A

Duncan argues that his due process rights were violated because the government introduced false testimony by Alvin Martin, Reginald Dewitt, and Tina Nichols. The government may not knowingly introduce false evidence or testimony to obtain a conviction. See United States v. Alston, 899 F.3d 135, 146 (2d Cir. 2018). A witness does not perjure himself merely by giving incorrect, confusing, or mistaken testimony: ...